Oh, crap

This ain’t good. France has rejected an “Obama-style” stimulus plan as being too socialist. Yeah, that France.

LYON: Prime Minister François Fillon on Monday rejected demands that the French government seek to stimulate consumer spending, rather than follow his plan to stimulate corporate and infrastructure investment, to lift France out of its economic slump.

“It would be irresponsible to chose another policy, which would increase our country’s indebtedness without having more infrastructure and increased competitiveness in the end,” Fillon said in a speech in Lyon.

More than 1.1 million people took to the streets across France last Thursday, according to the Interior Ministry, with unions putting the number of protesters at 2.5 million, to call on President Nicolas Sarkozy to stop cutting government jobs, increase the minimum wage and spend more on households as the economy enters its first recession since 1993.

Opponents of the government have been calling for an “Obama-style” stimulus plan, one that puts money directly into the pockets of working people.

This is gonna be a long four years, isn’t it?

Daily Hopechange for January 28

Day eight, still no unicorn. I’m beginning to lose hope.

Remember when George Bush was leaving a press conference in Beijing and found that the door was locked? He laughed it off, but the photos captured are still used to portray him as a bonehead. Well, apparently today Obama tried to walk through a window to get into the White House instead of using the door. Surprisingly, not many photos of this have surfaced, and I doubt I’ll be seeing it all over CNN, NYT, and WaPo anytime soon…

Also, it appears that Obama suddenly does have Muslim roots. He says that his Muslim family members and time living in Muslim countries give him an advantage in relating to Muslims as he tries to “reach out to them.” What this means, I’m not quite sure, but I do think it’s interesting that a fact so vehemently denied during the primaries is now embracied as a positive attribute. Certainly makes you wonder about John McCain calling any mention of Islam in relation to Obama a “shameless attack.”

And the stimulus package from hell just keeps on rolling… the good news is that the Republicans are letting the Democrats own every festering ounce of it. It passed the house today 244-188, with every Republican voting against it (along with 11 Democrats). As Pelosi said, “We won the election. We wrote the bill.” It’s become plain as day where the Democrats stand now – firmly on the side of pork spending and shady interest groups. Thankfully, this time the Republicans are actually standing firm against this one, so when this house of cards crumbles – and it will – then it will be Obama and his party who correctly take the blame.

We’re screwed

You know, I didn’t think the recession would be that bad in the big scheme of thing. Rising costs of production suck, sure, but they can be dealt with. Jobs becoming a little scarcer is harsh too, but we can address it… but then I stumbled across this and realized our nation is doomed.

To offset the cost increases of cookie ingredients, Girl Scouts of the USA made the decision to shrink its cookie boxes by a centimeter, package fewer cookies into boxes of Thin Mints, Do-si-dos, and Tagalongs, and reduce the size of its Lemon Chalet Crèmes.

Okay Bernake, now it’s personal.

Supply, demand, oil, and deregulation!

So Chris Byrne linked to a very interesting article from 60 Minutes on oil futures, speculation, and how they caused the price of oil to skyrocket even as the demand for it didn’t go up and the supply didn’t go down. Economics is a fascinating field to me, but only in spurts, so I know entirely too little about the subject. But it’s interesting that the system put in play to allow commodities traders to more easily exchange their goods is now being sucked into the theoretical trading market that’s been the source of most of our recent economic woes. It’s notable that the deregulation of the futures market that allowed for these sort of trades to happen came under the Clinton administration, just like the housing regulations that forced banks into making bad loans – oh, Bill, is there anything you can’t screw up?

The comments section of his site also highlighted a few good points. Mike suggests that the problem wasn’t so much that speculation occurred, as the article indicates, but that it increased suddenly and to a very large degree. Gun Blobber adds the timing of it coincided with the housing crisis, so the money had to be moved somewhere else. Additionally, it’s also escalated by the fact that there is something like 20 times more money invested into futures than the actual value of the underlying securities. Chris also wrote a very extensive post touching on this and other issues a few months back when discussing the problems with Wall Street. I said then and I’ll say it now, the more I realize how our market is propped up, the more I wonder how it’s lasted this long.

As I understand it, the root problem comes from how we have more money in the investment “pool” than we have stuff to actually invest in – or rather, stuff that is deemed worthy of investing in (startup companies may be considered too risky, etc). This causes more money to be bound to an item – like oil, or real estate, or whatever – than what it is actually valued at on the supply/demand scale, which artificially inflates prices. When things get bad for investors, or the value rises so artificially high that the market “crashes,” then that money has to shift somewhere else. That’s why we saw oil rise so high, and then suddenly fall when the money moved.

This sort of thing makes me agree with Chris that we’d be better off if we banned equities trading in, and securities based on, synthetic instruments, and made companies actually invest money into “real” things – or at least put regulations in place to strongly “encourage” this behavior. The massive amount of money floating around would become available to all the garage geniuses out there trying to start the next Google, or just your average joe wanting to start a bookstore down the street. By allowing small businesses to grow, we would help the economy to grow, which would give us yet more opportunities for investment. Of course, as Chris points out, this would kill off the big investment banks and brokerage houses, but they’re little more than bookies at this point anyway. They are, however, getting massive bailouts from the government for running a risky business that finally crashed on them, and that is A Bad Thing.

Take everything I’ve said with a grain of salt, as I’m certainly nothing remotely close to an expert here. I’d love to hear feedback on this issue.