The Official Obama Scorecard Thread

[hblask 1]

Troops moved in to stop the violence between warring alcohol dealers:http://www.cnn.com/2009/WORLD/americas/03/...oops/index.htmlOops, sorry, this stuff between alcohol dealers stopped when alcohol was made legal. This nonsense only exists for peaceful activities made illegal. The IWoD has no effect on drug abuse rates. Let me repeat that: no effect on drug abuse rates. If a liberal proposes a program that spends trillions of dollars and has NO EFFECT on the problem it was intended to solve, conservatives mock them as fuzzy thinkers. Then, when liberals say they just haven't spent enough money on it yet, the conservatives trot out the line about the definition of insanity, and accuse the liberals of shutting their brains off and thinking with their heart.Good intentions do not make good policy, even when conservatives do it. Bad results do not justify more expenditures, even when conservatives do it. How many more orders of magnitude of people have to die from the WAR on drugs than drugs itself before you consider the policy fatally flawed? How many innocent children have to have their neighborhoods terrorized by gangs, and have to sleep on the floor for fear of random bullets coming through their window? For what? So that your neighbor doesn't get happy via a chemical?This violence is coming more and more to the US each year. It was easy to ignore when it was just those brown-skinned people in those lame foreign countries. But now it is coming to our streets. Will you still think it is important for you to control your neighbor's desire to chemically alter his state of mind when the tanks roll down *your* street?PS: No effing effect. None. How is that defensible?

[CindyLou 11]

The IWoD has no effect on drug abuse rates. Let me repeat that: no effect on drug abuse rates.PS: No effing effect. None. How is that defensible?

This is the first thing I thought of when I read your post (note: not intended as an argument against your post, just what came to mind):Marge: What makes you think this Darryl Strawberry character is better than you? Homer: Marge, forget it. He's bigger than me, smarter than me, faster than me, stronger than me, and he already has more friends around the plant than I do. Bart: You make me sick, Homer! You're the one who told me I could be the best at anything if I just put my mind to it! Homer: Well, now that you're a little bit older, I can tell you that's a crock! No matter how good you are at something, there's always about a million people better than you. Bart: Gotcha. Can't win, don't try. That reminded me of one of my favorite Simpsons' exchanges:Homer: You're Darryl Strawberry! Strawberry: Yes. Homer: You play Right Field! Strawberry: Yes. Homer: I play Right Field too. Strawberry: So? Homer: Well, are you better than me? Strawberry: Well, I've never met you, but... yes. And then when I was looking for that first quote, I noticed this:Lisa: (to Grampa) So, we wrote the cartoon, put your name on it and sent it in. Bart: Didn't you wonder why you were getting checks for doing absolutely nothing? Grampa: I figured 'cause the Democrats were in power again. And this:Mr. Burns: Welcome, fellow Republicans. To start off tonight's agenda, brother Hibbert will report on our efforts to rename everything after Ronald Reagan.Hibbert: All Millard Fillmore schools are now Ronald Reagans. The Mississippi River is now the Mississippi Reagan.Dracula: And my good friend Frankenstein is now Frankenreagan. Blah!Mr. Burns: Excellent. Aaaaand this:Sideshow Bob: I'll be back. You can't keep the Democrats out of the White House forever. And when they get in, I'm back on the street! With all of my criminal buddies! Ah-ha-ha-ha-ha!

[Nimue1995 1]

Okay first it was alcohol then drugs now Barbies? Lol you're right H, government IS getting way too involved in our lives. http://www.wpxi.com/news/18845355/detail.htmlW.Va. Lawmaker Wants To Ban BarbieCHARLESTON, W.Va. -- Barbie could get an unwelcome present for her 50th birthday: outlawed in West Virginia.-----------------------------------------------------------------------------A state lawmaker proposed a bill Tuesday to ban sales of the iconic Mattel doll and others like her.The proposal from Democratic Delegate Jeff Eldridge said such toys influence girls to place too much importance on physical beauty, at the expense of their intellectual and emotional development."Basically, I introduced legislation because the Barbie doll, I think, gives emphasis on if you're beautiful, you don't have to be smart," Eldridge said.A Mattel spokeswoman did not immediately respond to a request for comment Tuesday. The Barbie doll officially turns 50 on March 9, and the toy maker has made big plans this year to mark the anniversary.Barbie has had her foes over that half-century. Critics said the doll promotes materialism and an unnatural body image.

[Zealous Donkey 0]

Be sure to take a couple of minutes to watch this, pretty darn funny.

[Sheiky 0]

First of all, this is false. Many, many people use heroin or crack and lead productive lives. Probably some people you know and who you would never suspect use drugs. So, the first step is to stop buying into the lies. The notion that every person that tries heroin or crack or coke becomes a worthless drain on society is the sort of ridiculous, dangerous propaganda that gave us Reefer Madness and the claim that pot makes black people rape white women. It's a flagrant, dangerous lie, that causes a lot of harm. Truth matters.Second, if you are talking about people who develop obsessive addictions, you could say the same about every single pleasurable activity on earth -- somebody has let it destroy their life. Do you think we should ban alcohol, smoking, sex, World of Warcraft, chat rooms, religion.... the list is endless. The notion that "somebody may abuse it, therefore we must ban it" is one of the more dangerous ideas in the world.Third, over the long run, people take the best option the have to fulfill their inner cravings. A certain subset of the population craves altered states, whether it's through drugs, alcohol or religion. This subset, if given a choice of a safe, inexpensive outlet for this craving will choose that option over a dangerous, destructive outlet. If you eliminate the safe choice, they will chose the destructive outlet, causing much harm to society.And then, there are people who are addicted to chaos. These are the really hardcore drug users. They will destroy their lives whether they have access to drugs, or if they are alone on a tropical island. They will find a way to create the chaos they crave. For these people, the question is not whether they will find a way to destroy themselves, the question is whether we want to take our neighborhoods, our safety, and our liberty down with them.

That's just not true. The reason these people are hardcore drug users is because the drugs they're taking are hardcore addictive. You seem to think that the people who take these substances have the easy choice of taking them or not taking them, and that they're continued use of the is ultimately because they chose to. This isn't the case. The vast majority of heavy drug users are addicted because of the chemical properties of the drug they're taking. Sure, at the start it was a choice, they chose to take a drug, but once they get hooked, it's no longer a choice, it's an addiction. Undoubtedly there will be some people who really will destroy their lives whatever, but I would say that with hardcore drugs it is the opposite. The drug all to often destroys the person. Cocaine is NOT Warcraft. I know you're not naive enough to seriously consider them the same thing. Warcraft does not have anywhere near the same level of chemical stimulants caused by hardcore drugs, and you know that. I think that the majority of addicted drug users will say that they made a mistake by taking the drug in the first place, and that they wish they were unable to access the drug in the first place. I also think that society benefits from people not taking drugs. In this case, both the drug users and the non drug users would benefit from the government making drugs illegal and limiting access to them. If you disagree with either of those axioms(that drug addicts wish they weren't addicted or that non drug takers would prefer other people to not take drugs), then ok. But if you agree that both parties wish drugs didn't exist and that everyone would benefit from government limiting access to them, but still think that government shouldn't interfere, then I think you're view is incredibly naive.

OK, fair enough, so it shows M1/M2 has gone up 25% and 14% in the last six month, respectively, during a time of slow economic growth. Another increase like this over the next six months, and double digit inflation would be pretty much inevitable. Will it keep growing like this? I don't know, but Obama doesn't seem to be showing any sign of slowing the flow.

I agree that high inflation is definitely a very real threat. However, I think that despite the growth in money supply, we will not see as high inflation as some expect. Inflation is not just a simple measure of the amount of money in comparison to the amount of goods(though obviously that is a consideration). First of, money in circulation doesn't equate to money being used for buying goods and services. Consumer demand is falling through the floor right now and just because there is an increase in money doesn't mean there is an increase in consumers demanding products as many are paying down debt or increasing the savings ratio. If we were in a period of growth with high demand and confidence levels from both business and consumers, then the increase in money supply would be more likely to feed directly into the economy and create higher prices. At the moment, unemployment is skyrocketing and confidence is shattered, consumers have both less money to spend and are less willing to spend it because they don't feel the same job security or general confidence that leads to increased consumption. Added to this, the failure of the financial system is crippling lending. Consumers have tighter constraints on spending that would bid up the general price level. I suspect a large proportion of this increase in money is currently being hoarded by banks and that it will be a long time before they can restore their capital ratios, increase lending and transmit this new money into the wider economy.

[vbnautilus 48]

Cocaine is NOT Warcraft. I know you're not naive enough to seriously consider them the same thing. Warcraft does not have anywhere near the same level of chemical stimulants caused by hardcore drugs, and you know that.

Almost all rewards act through similar circuitry in the brain. The process is the same; if you are repeatedly rewarded by doing something eventually a compulsion to continue doing that appears. Some rewards can act to produce this behavior faster and more reliably than others, but its a continuum and not a categorical difference. I guarantee you completing a level in WoW produces dopamine release in the nucleus accumbens just like cocaine does. They have also either studied the learning literature or happened up on the variable interval reinforcement schedule that is virtually inescapable for all creatures large and small.

[hblask 1]

Undoubtedly there will be some people who really will destroy their lives whatever, but I would say that with hardcore drugs it is the opposite. The drug all to often destroys the person.

I will agree that addictive chemicals is a much faster way of destroying your life, but people who like addictive chemicals that destroy your life are the same people who will destroy their life no matter what. This is made obvious by the fact that only a tiny minority of the people who try addictive chemicals let it destroy their lives. The rest think it's an interesting form of entertainment, and may choose to continue using it or not.

Inflation is not just a simple measure of the amount of money in comparison to the amount of goods.

Yeah, actually it is, as long as you include all forms of money and all forms of goods. That is the exact definition of inflation, the necessary and sufficient condition.The trick comes in measuring money supply, and measuring goods, and figuring out the difference between actual inflation and prices increases in things that happen to be heavily weighted in the CPI.

[Sheiky 0]

Almost all rewards act through similar circuitry in the brain. The process is the same; if you are repeatedly rewarded by doing something eventually a compulsion to continue doing that appears. Some rewards can act to produce this behavior faster and more reliably than others, but its a continuum and not a categorical difference. I guarantee you completing a level in WoW produces dopamine release in the nucleus accumbens just like cocaine does. They have also either studied the learning literature or happened up on the variable interval reinforcement schedule that is virtually inescapable for all creatures large and small.

..Which is what I said?'Warcraft dost not have anywhere near the same level of chemical stimulants caused by hardcore drugs' That wasn't being sarcastic, I meant that the effect of warcraft is not in the same league as cocaine, which it isn't.

[Sheiky 0]

Yeah, actually it is, as long as you include all forms of money and all forms of goods. That is the exact definition of inflation, the necessary and sufficient condition.The trick comes in measuring money supply, and measuring goods, and figuring out the difference between actual inflation and prices increases in things that happen to be heavily weighted in the CPI.

No, no it isn't.From wikipedia - Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[5] Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities, as well as to growth in the money supply.You said it yourself, the money supply has increased 25% in America in the last year, while inflation is near 0%. The two facts are linked, but by no means is the measure of inflation solely determined by the growth in money supply.

[hblask 1]

No, no it isn't.From wikipedia -Economists generally agree that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply.[5] Views on which factors determine low to moderate rates of inflation are more varied Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities,as well as to growth in the money supply.You said it yourself, the money supply has increased 25% in America in the last year, while inflation is near 0%. The two facts are linked, but by no means is the measure of inflation solely determined by the growth in money supply.

Using Wikipedia for information on economic topics is like using Michael Moore for advice on dieting.Inflation, as the term is used in economics, cannot be attributed to "fluctuations", as that is not the definition of inflation -- that is called "price fluctuations".Inflation has a very specific meaning regarding the general devaluation of the currency, and may or may not coincide with local fluctuations, and certainly cannot be caused by local fluctuations. Saying that inflation is caused by rising prices is like saying rain is caused by wet sidewalks.In the specific, economic sense (as opposed to the way the term is loosely thrown around in casual conversation and wikipedia articles), is an entirely monetary issue. If you need to demonstrate this to yourself, imagine a barter economy in equilibrium, and determine how inflation enters that system.

[hblask 1]

You said it yourself, the money supply has increased 25% in America in the last year, while inflation is near 0%. The two facts are linked, but by no means is the measure of inflation solely determined by the growth in money supply.

An inappropriate balance in the money supply causes inflation in the economy between 12-24 months later, not instantly. Hence, the numbers in my posts above regarding the end of this year and the middle of next year.

[hblask 1]

Bend over and grab your ankles:http://www.openmarket.org/2009/03/07/90-pe...-rate-proposed/Congressman Jerry McNerney (D-California) has advocated raising marginal tax rates to 90 percent. Such a tax increase on the wealthy would be necessary, but not sufficient, to pay for the vast spending increases proposed by the Obama Administration, if it is to keep its promise not to raise taxes on those making less than $250,000 per year. Indeed, it would not raise enough money, since there simply are not enough wealthy people to pay for all the proposed spending.In the National Journal, the disillusioned centrist Stuart Taylor, who once praised Obama, notes that Obama’s budget projections are based on bogus accounting, and would result in mushrooming deficits as far as the eye can see unless taxes are raised radically. Obama, he writes, “has been deceptive in basing his deficit projections on phantom expenditure cuts and wildly optimistic revenue estimates.” Moreover, “The numbers don’t add up — and still won’t if and when, as seems almost certain, Obama ratchets up his so-far-fairly-modest new taxes on the top 2 percent. ‘A tax policy that confiscated 100 percent of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue,’ according to a February 27 editorial in The Wall Street Journal. ‘That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable ‘dime’ of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.’ As for the budget’s $2 trillion in projected net “savings,” Obama’s budget director, Peter Orszag, admitted in testimony on Tuesday under questioning by Rep. Paul Ryan, R-Wis., that $1.6 trillion comes from phantom cuts of the money that would be needed to sustain the troop surge in Iraq for another decade — money that nobody ever intended to spend. Other supposed savings — especially from Medicare — seem unlikely to materialize absent benefit cuts, which Obama has not proposed. And the cost of any health care legislation — to be drafted largely by a Congress that is allergic to the kind of cost-cutting necessary to make universal care sustainable — is likely to be two or three times the $634 billion over 10 years that Obama has budgeted.”Ironically, even as Obama advocates raising taxes on families making more than $250,000 per year, he bails out irrresponsible, high-income mortgage borrowers, even if their current mortgage payments are not high. His $75 billion-plus mortgage bailout, announced last week, reduces borrowers’ mortgages even if they have big homes (covering mortgages up to $729,750) — and even if their mortgage payment is not high (they can qualify if their mortgage, plus property taxes and insurance, amounts to as little as 32 percent of income — less than many responsible homeowners have long paid on their mortgage).Obama’s bailouts reward the irresponsible rich, even as his proposed tax increases would punish thrifty high-income households by increasing their capital gains and income taxes, and raise taxes on the small businesses that create most of America’s jobs. Bush launched a war on terror. Obama has launched a war on thrift and American investors.Since Obama signed the bloated $800 billion stimulus package into law, the stock market, a leading economic indicator, has plunged like a stone. (The Congressional Budget Office predicts the “stimulus” will actually shrink the economy in the long-run). Investors are spooked, as Stanford University economist Michael Boskin notes in his Wall Street Journal column, “Obama’s Radicalism Is Killing the Dow.” Another commentator notes, “In less than 50 days, Obama has spent more than three times the cost of the entire Iraq War so far. This year, he will more than triple the largest deficit of the Bush era.”

[El Guapo 8]

Since Obama signed the bloated $800 billion stimulus package into law, the stock market, a leading economic indicator, has plunged like a stone. (The Congressional Budget Office predicts the “stimulus” will actually shrink the economy in the long-run). Investors are spooked, as Stanford University economist Michael Boskin notes in his Wall Street Journal column, “Obama’s Radicalism Is Killing the Dow.” Another commentator notes, “In less than 50 days, Obama has spent more than three times the cost of the entire Iraq War so far. This year, he will more than triple the largest deficit of the Bush era.”

It is frightening to me, how many people just do not understand this. These numbers are so large, the are not comprehensible.

[Balloon guy 158]

It is frightening to me, how many people just do not understand this. These numbers are so large, the are not comprehensible.

What do you mean?The numbers are too large to comprehend?Or that people don't understand that Obama is spending a lot of mobney?

[El Guapo 8]

What do you mean?The numbers are too large to comprehend?Or that people don't understand that Obama is spending a lot of mobney?

Both. Most people do not realize how much is being spent, the reason being, the numbers are so large that most people cannot wrap the minds around it. "Billion" has been thrown around so much recently that people have grown immune to it, they don't bat an eye about someone spending a billion dollars on something that has to do with government, especially now that the T word has come into play. 1 Trillion, 2 Trillion - what does it matter, it's only one more trillion.They are viewing it the same as $100.If we were in Vegas and asked to borrow a hundred dollars, you probably would question why I need so much, but eventually loan it to me, if I came back to you after the original request and said "sorry I need $50 more", you wouldn't think much of it.That is what happened with the original $800 Billion, a couple weeks later $400 Billion flew right under the radar.

[hblask 1]

If you've read much of what I post here (and I know nobody does), you'll know that I like politicians with courage.In that spirit, I'd like to congratulate President Obama. No politician has been willing to make the tough choices necessary to deal with the immigration issues facing this country.With his economic plan, Obama is turning us into a third-world socialist banana republic, which removes the incentive for anyone to immigrate to this country.It takes a new kind of politician to think outside the box like that and to act boldly on it.

[dapokerbum 0]

I thought this was interesting.http://www.newsweek.com/id/188565?GT1=43002LIVING POLITICSHoward FinemanA Turning Tide?Obama still has the approval of the people, but the establishment is beginning to mumble that the president may not have what it takes.Surfer that he is, President Obama should know a riptide when he's in one. The center usually is the safest, most productive place in politics, but perhaps not now, not in a once-in-a-century economic crisis.Swimming in the middle, he's denounced as a socialist by conservatives, criticized as a polite accommodationist by government-is-the-answer liberals, and increasingly, dismissed as being in over his head by technocrats.Luckily for Obama, the public still likes and trusts him, at least judging by the latest polls, including NEWSWEEK's.But, in ways both large and small, what's left of the American establishment is taking his measure and, with surprising swiftness, they are finding him lacking.They have some reasons to be concerned. I trace them to a central trait of the president's character: he's not really an in-your-face guy. By recent standards—and that includes Bill Clinton as well as George Bush—Obama for the most part is seeking to govern from the left, looking to solidify and rely on his own party more than woo Republicans. And yet he is by temperament judicious, even judicial. He'd have made a fine judge. But we don't need a judge. We need a blunt-spoken coach.Obama may be mistaking motion for progress, calling signals for a game plan. A busy, industrious overachiever, he likes to check off boxes on a long to-do list. A genial, amenable guy, he likes to appeal to every constituency, or at least not write off any. A beau ideal of Harvard Law, he can't wait to tackle extra-credit answers on the exam.But there is only one question on this great test of American fate: can he lead us away from plunging into another Depression?If the establishment still has power, it is a three-sided force, churning from inside the Beltway, from Manhattan-based media and from what remains of corporate America. Much of what they are saying is contradictory, but all of it is focused on the president:The $787 billion stimulus, gargantuan as it was, was in fact too small and not aimed clearly enough at only immediate job-creation. The $275 billion home-mortgage-refinancing plan, assembled by Treasury Secretary Tim Geithner, is too complex and indirect. The president gave up the moral high ground on spending not so much with the "stim" but with the $400 billion supplemental spending bill, larded as it was with 9,000 earmarks. The administration is throwing good money after bad in at least two cases—the sinkhole that is Citigroup (there are many healthy banks) and General Motors (they deserve what they get). The failure to call for genuine sacrifice on the part of all Americans, despite the rhetorical claim that everyone would have to "give up" something. A willingness to give too much leeway to Congress to handle crucial details, from the stim to the vague promise to "reform" medical care without stating what costs could be cut. A 2010 budget that tries to do far too much, with way too rosy predictions on future revenues and growth of the economy. This led those who fear we are about to go over Niagara Falls to deride Obama as a paddler who'd rather redesign the canoe. A treasury secretary who has been ridiculed on "Saturday Night Live" and compared to Doogie Howser, Barney Fife and Macaulay Culkin in "Home Alone"—and those are the nice ones. A seeming paralysis in the face of the banking crisis: unwilling to nationalize banks, yet unable to figure out how to handle toxic assets in another way—by, say, setting up a "bad bank" catch basin. A seeming reluctance to seek punishing prosecutions of the malefactors of the last 15 years—and even considering a plea bargain for Bernie Madoff, the poster thief who stole from charities and Nobel laureates and all the grandparents of Boca. Yes, prosecutors are in charge, but the president is entitled—some would say required—to demand harsh justice. The president, known for his eloquence and attention to detail, seemingly unwilling or unable to patiently, carefully explain how the world works—or more important, how it failed. Using FDR's fireside chats as a model, Obama needs to explain the banking system in laymen's terms. An ongoing seminar would be great. Obama is no socialist, but critics argue that now is not the time for costly, upfront spending on social engineering in health care, energy or education. Other than all that, in the eyes of the big shots, he is doing fine. The American people remain on his side, but he has to be careful that the gathering judgment of the Bigs doesn't trickle down to the rest of us.

[Balloon guy 158]

Obama without a teleprompter

OBAMA: See, uhhh, I -- I -- eh -- Just one thing that, uhh, I was thinking about as I was, uhh, -- as I was -- getting off the, uhhh, copter 'cause, I -- uhhh -- you know, it was hard for me to believe you were entirely serious about that socialist question.ZELENY: Mmm-hmm!OBAMA: Uhhhh, I -- I -- I did think it might be useful to point out that, uh, it wasn't under me that we started, uh, buying a whole bunch of (pause) shares of banks. Wasn't on my watch. And it wasn't on my watch that we passed, uhhh, a massive new entitlement, uhh, the prescription drug plan without a source of funding. Uh, and so I think that, uh, it's important just to note, uhh, when you start, uhh, hearing folks, uhh, throw these words around, thaaat (pause) .. Um, uh, we've actually been operating, uh, in a way that, uh, is entirely consistent with free market principles, uh, and that, uhhh, uh, some of the same folks who are throwing, uh, the word "socialist" around can't say the same.ZELENY: Right. So whose watch are we talking about here, sir?OBAMA: Well... Uh, heh, heh, heh. I -- I -- I -- I just think it's c-clear that by the time we had, uhhhhh. By the time we, eh, uh, got here, uhhh, ummm, there already had been, uh, an enormous infusion of taxpayer money into the financial system, aaand, eh, eh, eh, y-y-yuh-y-y-yuh.... The thing I constantly try to emphasize to people is that, if coming in the market was doing fine, nobody would be happier than me, uh, to stay out of it.ZELENY: Right.OBAMA: Uh, you know, I -- I -- I have more than enough to do, uh, without having to worry about the financial system. Uh, and the fact that, uh, we've had to take these extraordinary measures, uh, and intervene, uh, is, uhh, not an indication of my ideological preferences --ZELENY: Mmm-hmm!OBAMA: -- but an indication of the degree to which, uhhh (pause) lax regulation, uh, and extravagant risk taking, uh, has precipitated a crisis.

[nutzbuster 7]

Obama without a teleprompter

that uhhh was about uhhhh the most errr ummmm ridiculous thing that uhhhh I- I - I've read in ... mmmm a long.... errr time.or the standard Obama template answer:"Quit being unfair, he's only been in office [fill in with a number] (and chose one: [days/months/years] ) !"

[hblask 1]

Regarding the inflation discussion earlier in this thread:http://www.cato.org/pub_display.php?pub_id=10033Inflation is reigniting. The U.S. Bureau of Labor Statistics announced last week that consumer prices, which had declined from November and December, rose 0.4% between December and January, an inflation rate of 4.9% on an annualized basis. The bureau announced earlier that producer prices rose 0.8% in the same period, a 10% annual rate of inflation.Why is this happening? The answer is painfully clear. From the end of January 2008 to the end of January 2009, the Federal Reserve's monetary liabilities, the sum of currency and bank reserves known as the "monetary base," more than doubled. This is a year-over-year expansion unprecedented in the Fed's history. During the last three months of that period alone, the base grew an incredible 50%. (At that pace, it would have quintupled in a year's time.) The base has thankfully receded a bit in February.Broader measures of the money stock reflect the rapid growth in the base. The M1 measure (the sum of the public's currency and checking deposits) has grown at an annualized rate of 23% over the last six months, while the broader M2 measure has grown at 15%. As standard theory predicts, this rapid money growth has pushed short-term interest rates to historic lows. For the last 10 weeks 12-month Treasury bills have been trading at yields below 0.6%.For perspective, flash back to the early years of the Great Depression. Between 1929 and 1932, runs on the banking system led to a sharp decline in the money stock, leading in turn to a general deflation. The best-known historians of the event, Milton Friedman and Anna J. Schwartz, faulted the Federal Reserve system for not using its money-creation powers to stop the decline.In a 2002 speech at a conference honoring Milton Friedman on his 90th birthday, Ben Bernanke promised that the Fed would never again commit that error. Today, as chairman of the Fed, Bernanke is so eager to fulfill his promise that he is erring strongly on the side of monetary overexpansion.Chairman Bernanke is quite right to want to avoid a collapse of the money stock, because when that happens, economic activity contracts needlessly. Certainly the Fed should not sit idly by while the money stock shrinks.But today's money stock is not collapsing--not by a long shot. Moreover, while asset prices have fallen over the past year due to the bursting of real estate and stock market bubbles inflated by years of excessive money growth, the prices of consumer goods and services have not. The decline of asset prices thus does not represent a general deflation. Instead, it represents the correction of a relative price distortion. The reduction in asset prices is actually the beginning of recovery; thus, an effort to prop up asset prices delays recovery.Asset prices rose more quickly than the prices of goods and services during the money-fueled expansion, because interest rates were artificially low. It is impossible to keep interest rates artificially low forever, so the relative price of those assets was set to return to normalcy in one of two ways: either by a fall in asset prices or by an increase in the prices of goods and services.Chairman Bernanke's strategy is seemingly staving off a further decline in nominal asset prices by expanding the money stock. Equilibrium will have to be re-established in the only other way possible--through a general inflation of consumer prices.Despite the dramatic reversal in real estate prices, and the Dow Jones industrial average of stock prices having lost 40% of its nominal value from the high point of the past 12 months, the sky has not fallen. The real output of goods and services in the fourth quarter of 2008 (according to the revised estimates of the Bureau of Economic Analysis released last week) was less than 1% below the level of Q4 2007, having grown modestly over the first half of 2008 and declined modestly over the second half.Consumer prices are not plummeting. Despite several months of slight declines during the second half of the year, the 2008 average Consumer Price Index was up 3.8% from the previous year. The December 2008 CPI was up 0.1% over December 2007. As previously noted, January 2009 is up over December 2008.The fact that consumer prices are not yet rising as fast as the stock of money is growing indicates that the "velocity" of money, or the annual consumer spending per dollar of money balances held, has temporarily declined. The huge additions to the monetary aggregates are currently being mostly absorbed into "idle" cash balances, but like a sponge, cash balances will only absorb so much.With continued Fed expansion, money balances will exceed the amounts people want to hold. Velocity will begin returning to normal. As spending begins to catch up with money growth, the Fed will face a difficult choice: either slam on the money brakes and risk having the recovery stall out, or continue its current pedal-to-the-metal policy and cause accelerating inflation.This is not a new situation. In 1973 to '75, the U.S. had a deep recession. Rather than let the effects of the Arab oil embargo run its course, the Fed attempted to soften the blow with expansionary monetary policy. Though there was little inflation to start, it took off as the economy began expanding and velocity began to rise. Inflation as measured by the CPI grew from 5.8% to 6.5% to 7.6% to 11.3% to 13.5% between 1976 and 1980. Extricating the economy from the distortions built up during that long period of monetary expansion required the sharp Reagan-Volcker recession of 1981 to 1983.Then Fed Chairman Greenspan warned that the stock market was exhibiting "irrational exuberance" in 1996, even as he oversaw a rapid increase in the money stock. He took comfort in the fact that although asset prices were rising rapidly, there was little inflation as measured by the CPI. He overlooked the effects monetary expansion was having on asset prices. Greenspan should have worried more about asset prices then, and Bernanke should worry less about them now.A fall in inflated asset prices does not a general deflation make. It is, in fact, the first step on the road to recovery. The sooner asset prices find their bottom, the sooner they can begin to rebound--and that is the key to restoring investor confidence.

[Nimue1995 1]

Okay guys, just out of curiosity, if you believe that Obama's programs will spark higher inflation, hyperinflation etc, what would you invest in? Real estate? gold? bonds? money markets? stocks? guns? what?

[hblask 1]

Okay guys, just out of curiosity, if you believe that Obama's programs will spark higher inflation, hyperinflation etc, what would you invest in? Real estate? gold? bonds? money markets? stocks? guns? what?

Gold is the traditional hedge against inflation, but I think it's had a huge run-up already, and it's fairly speculative at any time. I saw an advisor that I trust recommend commodities - farm futures, corn, wheat, etc -- the physical stuff that makes the world work. Seems like a reasonable statement, but again, the market has probably already priced potential inflation into those things, so unless you are an insider, it'll be tough to make money.The best best is to spend your money as quickly as possible while stuff is still cheap. I'm only half kidding.

[CaneBrain 95]

Gold is the traditional hedge against inflation, but I think it's had a huge run-up already, and it's fairly speculative at any time. I saw an advisor that I trust recommend commodities - farm futures, corn, wheat, etc -- the physical stuff that makes the world work. Seems like a reasonable statement, but again, the market has probably already priced potential inflation into those things, so unless you are an insider, it'll be tough to make money.The best best is to spend your money as quickly as possible while stuff is still cheap. I'm only half kidding.

You should see the deals I got at Circuit City last week. Amazing. 90% off. We bought my in-laws a flat screen TV. Which makes us great children (even though it was 135 bucks. Read that shit again. I bought a new, 32 inch flat screen LCD TV for 135 bucks with tax. Damn.)This is also a GREAT GREAT time to buy an American car. There is a Ford dealership in Miami that is running a deal: buy one SUV and get a 2nd car of equal or lesser value free. Go buy shit Americans! The time is now.

[Balloon guy 158]

You should see the deals I got at Circuit City last week. Amazing. 90% off. We bought my in-laws a flat screen TV. Which makes us great children (even though it was 135 bucks. Read that shit again. I bought a new, 32 inch flat screen LCD TV for 135 bucks with tax. Damn.)This is also a GREAT GREAT time to buy an American car. There is a Ford dealership in Miami that is running a deal: buy one SUV and get a 2nd car of equal or lesser value free. Go buy shit Americans! The time is now.

Wish cigars would get cheaper

[El Guapo 8]

Well Obama 180ed on earmarks today, he said he does not oppose them and thinks they are crucial for congressman and senators to get things passed for their district.So yeah, that he is the exact opposite of what he said in his campaign.