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Jim Cook



Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

Best of Aubie Baltin
May 27, 2009
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It's been more than 70 years since we have seen unemployment drop as much or as fast as it has in the current recession. The volatility is breathtaking. "Normally, labor markets lag the economy because incremental spending transactions are financed by debt, stimulated by interest rate cuts. But as long as credit remains frozen, (why shouldn’t it - who in their right mind wants to lend at today’s interest rates) spending will require income, and income comes from jobs. Today, debt service payments can only be made out of income. Therefore, in a de-leveraging economy, job growth becomes an important leading indicator of demand. The so called bounce in the economy and stabilization in markets reflect government actions that may be big enough to impact near-term growth, but are of the one shot variety and not sufficiently directed at the root problem of excessive indebtedness to produce a permanent fix. The drop in employment will continue because companies' profit margins are so deeply damaged that a little bounce in growth won't do much to alter their need to cut costs. Obama’s anti-business rhetoric, like Hoover’s and Roosevelt’s, is certainly not helping. Continuing increases in unemployment will undermine demand and continue to pressure loan repayments, which will keep the pressure on the banks and the inevitable rising cost of capital will continue to inhibit credit expansion. This illustrates the problem of using which past period’s performance to project future results. You have to look at the underlying conditions in order to get a real comparison, and we have not seen a de-leveraging recession in the US for 78 years.

Long term budgetary trends show that we are now on an unsustainable path that will result in massively higher taxes. By as early as 2010, we will have to fund Social Security out of general revenues as the surplus we now have will be gone. Trust funds? What trust funds - they are just a myth, there are none. Social Security makes Bernie Madoff look like a Wall Street Three Card Monte Piker.

Medicare is in far worse shape.

We now have $1.8 trillion deficit that is in reality going to be at least $2 trillion, with at least another $2 trillion for a revised health-care program that will mean at least an additional $2 trillion in deficits for as far as the eye can see. How will we pay for it? Even getting rid of the Bush tax cuts will only produce a few hundred billion a year and I am not so sure about that either. Raising taxes has always been shown to actually reduce revenue: But since when does the Left look at history or care about the truth?

It is a simple fact that you cannot increase the debt-to-GDP ratio without limit. We hit the wall on personal and corporate debt this past year. We pushed the limits until the system crashed. And now the US Government is basically doing the same thing. Are they planning to see where the limits on government debt-to-GDP will end up being? Unless cooler and more rational heads in government prevail, what is coming is not going to be pretty. Sometime in the middle of the next year or two at the most, we will hit the wall, and it will make the current crisis pale in comparison. Is there even an emergency Game Plan? I think not.

The only way to solve the problem is to grow GDP more rapidly than debt and the only way for that to happen is through the use of FREE MARKET CAPITALIST policies. Unfortunately, right now we are barreling head first into a more and more Socialist agenda. Cap and Trade is hugely anti-growth as it is nothing more than a disguised Huge Income Tax Increase. So are high corporate taxes, which Obama is proposing to effectively raise. Everybody knows that it is lowering taxes that creates growth – don’t they? Just think back what $4.50/gal gas did to our spending on other products. Cap and Trade will push gas into the $6/gal range. Then what?


Border towns in Ontario, Canada have already effectively barred US contractors from doing business with them in retaliation for job losses stemming from US protectionism in the stimulus plan. That movement is spreading. A US steel mill with 600 union jobs will have to close down because its owners are not US-based, and thus it is not technically a US supplier. They are losing jobs to US-owned mills -- but those are US jobs. And the insanity goes on!