A Note to the House Republicans

If before you leave your meeting today you do not also hold an election for Majority Leader, the rest of us will remember.

We need all new faces. So far, so good.

42 comments

    • 75%?????

      This was the Status Quo Prediction:
      Larry O’Neal – Speaker
      Jan Jones – Speaker Pro-tem
      Jerry Keen – Majority Leader
      Ed Lindsey – Majority Whip

      So, what you got, at best, was 25% (unless you are for status quo). And even that is a wait and see.

      But regardless of my personal beliefs and opinions, Congratulations, to the newly elected leadership. I still have some hope you’ll begin to do what’s best for Georgia,… just not holding my breath.

  1. John Konop says:

    In fairness I would not throw Jan Jones and Ed Lindsey in the status quo. Also by the reaction from the establishment lawmakers telling people not to read the PP it must have had a huge impact on even getting Jan and Ed on the ticket as well as Dave.

    I have to give Erick and his front page posters credit for this victory. When they work together and putting aside differences and focus on real core issues they can move mountains.

    • Jeff says:

      Jan Jones was Burkhalter’s top lieutenant and you DON’T see her as status quo? Burkhalter will now have all the advantages of the Speaker Pro-Tem office, with none of the public scrutiny.

  2. Goldwater Conservative says:

    I am telling you, the GOP should have been “bipartisan” in this election for Speaker and Speaker Pro-Temp.

    They should have voted for Alan Powell for Speak Pro-Temp.

    • I would much rather have conservative Republicans in leadership as opposed to promoting all out gambling on a Democrat. It was only a few years ago our reserves were in the tank.

      I don’t see ANY of these Democrats decrying the obscene attempt to destroy the capitalist free enterprise system.

      If our leadership can’t get it done, God help us all. However, I think they can and will.

      • ByteMe says:

        It was Roy Barnes who insisted that our reserves get built up; Perdue came into office as the economy was tanking, but the reserves gave him space to not have to take drastic actions. Don’t change history to suit your belief system.

        • Ken in Eastman says:

          ByteMe,

          It was also Roy Barnes who emptied the state treasury two weeks after he lost the election (from Georgia Clips):

          Barnes emptied emergency fund after losing job
          “Two weeks after his re-election defeat, Gov. Roy Barnes spent most of the remaining money in the Governor’s Emergency Fund despite a looming budget shortfall that has his successor slashing programs and proposing tax increases.”

          http://www.georgiaclips.com/current/03.0217.budget.htm

          The original story on the ajc appears to be MIA.

          • ByteMe says:

            So I went looking for the executive order dated Nov 20, 2002 (the one in question). Can’t find it on the current site, which only goes back to 2003. But did find a notice that Perdue adjusted the appropriation to shift money from a uniform voting system appropriation to one that funded the PSC’s No Call program.

            If it was such a big deal, why didn’t Perdue — in the midst of a budget crunch — change anything more than a single line item? The answer, of course, is that it’s not.

            Spending a few hundred thousand from the emergency fund is not the same as leaving billions in the reserve fund. It’s a false equivalence you’re trying to create.

            By the way, Perdue’s order is here: http://gov.georgia.gov/gov/exorders/2003/jan/01_29_03_01.pdf and there are no other orders referencing that original appropriation that I saw in the first half of 2003.

          • Ken in Eastman says:

            ByteMe,

            I’m sure you noted this was a portion. It may well have been more than a “few hundred thousand”. Once funds are committed, it’s not easy to de-commit them, as I am sure you know.

            Perhaps you can find Barnes’s original executive order and that will settle it.

          • ByteMe says:

            You’re the one making the assertion of equivalence. I know for a fact that the reserves were in the billions and there’s no way that a governor’s emergency fund — allocated by the legislature, by the way — is more then a few million. There’s no equivalency, no matter how much you want Barnes to be a bad guy about the state’s finances.

          • ByteMe says:

            And — just for good measure — the time between the original order and Perdue getting into office was about 6 weeks over the holidays. Yes, indeed, the governor can pull most of that money back if he wants. Government does not spend money quickly (note to stimulus supporters), which is why he took his time to get the $300K moved around the way he did.

          • Ken in Eastman says:

            ByteMe,

            Obligating money and spending money are two different things. It does not take weeks to let contracts.

            Finally, you may well be right about the amounts. I honestly don’t know – and believe me I have looked for that original executive order from Barnes. Still, to do that – even for just a few million – is pretty petty and vindictive. It wasn’t done to him by Miller.

          • ByteMe says:

            Vindictive? What nefarious appropriations do you think he did with the money? We know $300K went to the SoS to help get the voting systems normalized. Oooohhh, can’t have that!

            Really, you’re grasping at straws here to try to make a point that you can’t make with the available evidence.

      • trainsplz says:

        EEK! Socialists! Maurice, do you remember that letter you got from your credit card companies explaining that starting in February they will apply payments to balances with the highest interest rates first? Do you remember thinking “Hunh. That’s pretty alright.”?

  3. IndyInjun says:

    Shrinking revenues are going to put the entire GA on the hot seat.

    I would think that running for Governor using the same old usual BS is not going to fly either.

    When so many are hurting, the last thing you want is for them to look around and see state government funded agencies and individuals who are immune.

    • ByteMe says:

      Or someone who claims that reducing taxes is somehow going to magically help. People without jobs don’t need a tax break. That’s 10% of the population right there. And everyone is pretty clear now that “trickle down” just looks like a golden shower to anyone without a golden parachute.

    • John Konop says:

      Indy

      You might find this interesting. Yet I think the trade deficit is a major issue in the lack of money recycling in our economy. The money is spinning out of our economy faster than outside money is coming in. You have to make things here that you sell for the recycling to work.

      ….It continues to amaze me that no one on the left or right seems to have noticed that the essential factor causing the economic downturn is a decline in velocity: the number of times that money turns over in the economy, which is measured as the ratio of the money supply to GDP. In 2006 and 2007 this ratio was 1.9. I take that as normal. In 2008, velocity fell to 1.76 and currently is 1.69. (I divided end of year M2 into 4th quarter GDP; the latest figure is 2nd quarter GDP divided by end of June money supply.)

      If velocity were 1.9 instead of 1.69, 2nd quarter GDP would have been $1.6 trillion higher. Therefore, no recession. The output gap would have simply disappeared. From this I conclude that a lack of spending in the economy is the central problem and the only policies that will help are those that increase spending – consumer spending, investment spending, net exports or government spending. How tax cuts would have helped – or at least the type of tax cuts advocated by Republicans – is a mystery to me.

      I continue to believe that the Republican position is nonsensical. Final proof is that the previously cited CBO report shows total federal revenues coming in at 14.9 percent of the gross domestic product in FY2009. According to the Office of Management and Budget, one has to go back to 1950 to find a year when federal revenues were lower as a share of GDP. For reference, revenues averaged 18 percent of GDP during the Reagan administration and were never lower than 17.3 percent – 2.4 percent of GDP above where they are now.

      I think there are grounds on which to criticize the Obama administration’s anti-recession actions. But spending too much is not one of them. Indeed, based on this analysis, it is pretty obvious that spending – real spending on things like public works – has been grossly inadequate. The idea that Reagan-style tax cuts would have done anything is just nuts…..

      http://capitalgainsandgames.com/blog/bruce-bartlett/1200/why-economy-needs-spending-not-tax-cuts

      • John Konop says:

        This is the writer of the above article.

        Bruce Bartlett is a columnist for Forbes.com, the online side of Forbes, the nation’s premier financial magazine. He served for many years in prominent governmental positions including executive director of the Joint Economic Committee of Congress, Deputy Assistant Secretary for economic policy at the U.S. Treasury Department during the George H.W. Bush Administration, and as a senior policy analyst in the White House for Ronald Reagan.

      • Ken in Eastman says:

        John,

        When the money supply (especially M1) is increased so drastically, then the velocity drops. It’s like turning inventory in a store – if one is overstocked then the inventory turns decrease.

        In this case there is a more pertinent reason. Uncertainty is a huge part of the risk factor and right now the uncertainty regarding the future of the economy is very high. It is also the only reason we do not have runaway inflation (and we are also exporting part of our inflation to China in the form of bonds).

        • ByteMe says:

          You have it exactly backward, Ken. Velocity dropped like a rock in Sept 2008 when no bank was willing to lend money, no VC was willing to invest in anything, no sovereign was sure whether their investments had disappeared with AIG, and so on. Increasing the money supply kept our GDP (which is velocity x money supply) from being -20% instead of just -6%. Velocity has only slightly recovered, since banks are still being stingy with loan money.

          And the reason we don’t have runaway inflation after increasing the money supply is that the money isn’t chasing assets (like homes) or workers (salaries). Those are the biggest components to systemic inflation, so without inflating those, there’s no inflation (only enough to counter the deflation we’d see otherwise).

          • Ken in Eastman says:

            ByteMe,

            And the reason we don’t have runaway inflation after increasing the money supply is that the money isn’t chasing assets (like homes) or workers (salaries). Those are the biggest components to systemic inflation, so without inflating those, there’s no inflation (only enough to counter the deflation we’d see otherwise).

            This is what I’m talking about when I talk about uncertainty. People are afraid to invest in either capital or in labor.

            I do agree that money was not moving through the economy earlier, but we cannot keep inflating our way out of problems like we have done since Bretton-Woods.

            Money is a commodity just like anything else except that it is a very liquid commodity. Increasing the supply of the commodity while demand remains constant decreases the value of that commodity.

            For clarification, I’m not sure a 1:1 gold standard is required or even a fixed annual increase in money supply (I think Friedman recommended 2 or 2.5% per year) but the increase in money in the last year scares the living daylights out of me.

          • ByteMe says:

            Increasing the supply of the commodity while demand remains constant decreases the value of that commodity.

            But doesn’t that also match what you’re saying, which is that we need to rebalance the trade deficit? What we’re seeing is the dollar tanking, increasing the price of imports, which then reduces the demand for them and increases the demand for our exports. If only we could get off our oil addiction, our trade imbalance would be gone.

            But it also makes vacations to Europe more expensive. 🙁

      • Ken in Eastman says:

        John,

        I apologize, I forgot to to include this in my earlier reply.

        Republicans misspeak when referring to marginal tax rate decreases and refer to them as “tax cuts” because that is the way individuals see them. Very often marginal tax rate decreases increase total tax revenues.

        There are also cases of looming tax rate increases that decrease current tax revenues. How? Because real economics is not s static econometric construct, instead it is dynamic. Small businesses are not going to expand when they may soon be saddled with increased costs associated with employees and the knowledge that tax rate increases on small businesses and individuals that everyone except very partisan Democrats agree are only a matter of time under this administration.

        • John Konop says:

          Ken

          I do not think you get the recycling concept. Pre massive trade debt when you bought a product most of the money stayed in our economy. But when weoff shored our manufacturing ( NAFTA, WTO CHINA…)to sub 2 buck an hour labor markets ie Mexico, China…. we lost middle class workers spending their wages.

          This is a trade issue in which we turn a blind eye to child/slave like labor, Intellectual Property theft, currency manipulation……

          NAFATA CAFTA HAVTA FIND A JOB!

          • Ken in Eastman says:

            John,

            I’m pretty sure I understand. I also know that our trade deficit problems are greatly affected by petroleum imports and failure to enforce licensing agreements in many foreign markets.

            Perhaps you would care to define “recycling concept”. I’m completely unfamiliar with that term.

            Thanks.

          • John Konop says:

            The lack of velocity means the money is not circulating in our economy as efficiently in the past. Now this was covered up in the Clinton/Bush era via out of control consumer and national debt.

            The average family was making up real wages shrinking by using their house as an ATM machine, credit cards… to keep up with the cost of living ie college for kids, healthcare….

            Now the ATM machine is running out of money. So the only way we can have meaningful growth with no debt is production. Yet how can we out produce economies with no real labor laws, IP laws……?

            This is why the father of the free market system insisted that workers must have the same legal rights as the boss. And for capitalism to work right we must have a justice system. The whole concept of Pursuit of Happiness came from Adam Smith. This is why he was a leading abolitionist of his times.

            In conclusion if we do not fix our trade agreements you will see a spread between rich and poor grow in the US. Around 50% of people do not even qualify to pay income taxes. The middle class is evaporating and have no real money to recycle to grow the economy at a meaningful level. Now what money workers do have end up in China, Middle East….. buying products.

            ….It continues to amaze me that no one on the left or right seems to have noticed that the essential factor causing the economic downturn is a decline in velocity: the number of times that money turns over in the economy, which is measured as the ratio of the money supply to GDP. In 2006 and 2007 this ratio was 1.9. I take that as normal. In 2008, velocity fell to 1.76 and currently is 1.69. (I divided end of year M2 into 4th quarter GDP; the latest figure is 2nd quarter GDP divided by end of June money supply.)

            If velocity were 1.9 instead of 1.69, 2nd quarter GDP would have been $1.6 trillion higher. Therefore, no recession. The output gap would have simply disappeared. From this I conclude that a lack of spending in the economy is the central problem and the only policies that will help are those that increase spending – consumer spending, investment spending, net exports or government spending. How tax cuts would have helped – or at least the type of tax cuts advocated by Republicans – is a mystery to me…..

          • Ken in Eastman says:

            John,

            This is how I see it. Money doesn’t flow straight through the economy. It’s often diverted from the simplest, most direct route (read: most profitable, fastest return). Taxes and regulations divert the flow of money through the economy thus slowing it to a trickle.

            Taxes may provide necessary services, but sometimes they do not. Efficiency and effectiveness are not usually associated with government projects and bureaucracies.

            A century ago, starting a business was an easy thing. It pretty much consisted of an idea, some capital and hanging up a shingle. Now it can be nightmarish in its complexity and requires much greater capital.

            Even in the 1930s, remember the pictures of those guys selling apples? What would happen to them if they tried that on the streets of Atlanta, or even my little hometown? They couldn’t do it now and I have no idea how many licenses would be required to sell food in downtown Atlanta and how much tax paperwork would be required to avoid sales tax on buying the fruit.

      • IndyInjun says:

        JK,

        I don’t agree with your Keynesian approach that we need to spend our way out of this trap.

        One thing you touch on has been something I have written on for 2 months and that is that foreigners cannot possibly be buying $UST debt, because there is no way that their annual surplus with us of less than $500 billion (Probably less than $150 million of that profit) is throwing off enough $USD cash to fund $1.8 trillion of new debt, plus $3 trillion of debt rollover. My conclusion is that the Fed has been purely creating one-legged creation of money from the ether, then buying the bond issuance through primary dealers.

        Deputy governor Zhu of the Bank of China pointed this out yesterday.

        Not only is the USA doing this insanity, but so are Britain and Japan. There is NO WAY the business cycle is throwing off this kind of money.

        Forcing spending into various channels by governments is pumping up rewards for government employees while devastating savers and frugal people.

        The problem with artificially ramping up velocity is that some channels are overcrowded and some are empty. Government makes winners of some and destroys others trying to ramp up velocity.

        It also tries to increase velocity by putting a gun to the heads of savers to make them “use it or lose it” to inflation. The problem with that is that the savers see that the entire system is doomed and are rushing into gold and silver – a place where some of us who saw this coming in 2003 have been ever since. That isn’t the velocity they want.

        The entire system is thoroughly corrupt and the savvy folks don’t want any part of it, hence the flight to real money.

        Bush, Obama, and every central bank in the world are making the looniest gold bug’s theory a prophesy.

        They should have let the whole thing correct itself. The criminals would have been punished. The stupid would have lost everything. The government would have shrank. And housing would have been affordable. There was enough sound bank assets to have wiped out the common, preferred, and bondholders and given the depositors what they were due.

        Is there something WRONG with prices falling?

        • Ken in Eastman says:

          No savings = no capital = no investments

          Inflation – and fiscal and monetary policy – is destroying the middle class by encouraging it to consume instead of save. If we do not have a large middle class then society will become unstable. Only those with an investment in the community have a need for stability even in rough economic times.

          • IndyInjun says:

            The policies in place will eradicate the middle class.

            Giving investment banks $hundreds of billions in FREE MONEY resulted in them speculating/investing in futures markets to dominate the NECESSITIES OF LIFE that we the people will have to have come default or hyperinflation. So what we have is banksters who stole our money once, being lent our money again, to steal from us in the future.

            Because retirees and savers no longer have taxable income from savings and investments, revenues have dried up. So now, in addition to their attack on savings through hyperinflation, they are going to enact a VAT to tax previously-taxed savings of the frugal, the responsible, and the elderly.

            Furthuremore, their “free trade” idiocy has eliminated manufacturing jobs needed by the manually dextrous, but mentally limited people. These were good paying jobs sacrificed on the altar of demented economists who brought us to disaster.

            Pray tell, how has currency manipulation to raid the USA by making our exports more expensive any different than the economists’ hated tariff’s. Has any nation ever before paid a huge % of GDP to defend its major trade rivals – a huge hidden subsidy for imports and a tax on exports.

            We have let a gagle of truly insane economists – only 15 out of 20,000 of them got this melt-down right – destroy our country on some nutty globalist crusade.

            Buchanan and Perot were right – America First!

          • John Konop says:

            Indy & Ken

            I am not advocating a Keynesian approach I am merely pointing out without fixing the trade problem you cannot fix production. And without production you cannot fix the wage and job problem for Americans. And without good middle class jobs here producing products we will see less and less recycling of money here and more money/assets leaving our country.

            It seems both parties are talking around this issue. And both parties are focused on tax gimmicks and not looking at the core problem of competing with countries that give workers limited rights if at all, Intellectual property theft, currency manipulation…..

            Also this is not about protectionism it is about enforcing and or negotiation agreements that are based on legal and moral standards. Adam Smith the father of the free market system as you know was known as a moral philosopher more than an economist in his time.

            Finally social conservatives supporting the abuse of children, woman and fathers to get cheap products is the definition of hypocrisy! And for so called progressives to complain about the lack of commitment to places like Africa yet are a blind to the abuses in places like China for cheap products is bizarre at best.

            ….RCP-There’s a popular game in America that goes, I’ll cut your wages, but you don’t cut mine. And the outsourcing of your factory job to China is a good thing, because it makes my paycheck go further at Wal-Mart. We hear this theme a lot in the debate over illegal immigration……

            …..For some reason, the job of keeping prices low has fallen entirely on the shoulders of the most vulnerable Americans. If we banged down CEO compensation and sliced lawyers’ pay by a third, the same thing would happen. Everyone’s prices would drop. The corporation could sell its products for less, and the cost of legal services would fall.

            No vocation keeps a tighter lid on immigration than the medical profession. “If we let in 100,000 immigrant doctors,” Richard Freeman, another Harvard economist, recently told a group of journalists, “everyone in this room would benefit.” Except the American doctors.
            Suggest a U.S. labor policy that depresses professional pay as a means of keeping prices in check, and you get laughed out of the room. But say that sitting on the wages of unskilled factory workers stems inflationary pressure — a frequently made argument — and the PhDs quietly nod in agreement.

            And that’s how the game is played. High pay for me. Low pay for you. The folks at the economic bottom are obviously not making the rules……

            http://controlcongress.com/uncategorized/illegal-immigration-a-rich-americans-game

  4. IndyInjun says:

    If the deflation were allowed to progress, not even doctors would be immune to the imperative to cut prices. Thus, retiree’s stable or even reduced SS and Medicare Benefts probably would buy more goods and services.

    There are hundreds of programs to make housing more affordable that have failed. Now the market delivers lower housing prices and the government rigs the market toward higher prices.

    Good point about bringing in more doctors.

    The ZIRP is causing financial Armageddon for pensions and 401ks. At the current 3.5% yield on 10 year treasuries, it takes $1,000,000 at NPV to fund just one $60,000 pension for 25 years on an amortizing basis. The longer the Fed plays ZIRP, the greater the parabolic launch of pension costs.

    I warned about this to my GA senate candidates 4 years ago, but they said they were going to kick the can down the road again, because it was to hot to touch. So much for ‘leadership” They are too busy chasing tail up there to do any leading whatsoever.

    In PA, after 2014 state contributions to pension plans will be more than 30% of payroll and that is assuming a YOY return of 8%!!!!

    Because of the average maturity of $UST debt is 30 months, more than 1/3 of the US debt must rollover in a year, or $3 trillion. Add to this $1.8 trillion this year in deficits to increase the debt and you get monthly debt demands of more than $350 billion a month. This cannot be serviced by $400-500 billion trade deficits. That leaves only ‘printing’.

    The states need $400 billion
    The FDIC needs $1 trillion
    The PBGC needs $100 billion for starters.

    The math of this is impossible and it is kicking the dogsh!t out of the political hacks……forcing them into ever greater, more obvious, and more extreme lies.

    This whole shooting match is coming down before the states get completely bailed out.

  5. IndyInjun says:

    BTW, how many noticed last week the USA’s reward for ‘saving’ Iraq?

    The Rumalia oil field contracts went to the Russians and Chinese!!!!

    Thousands of US troops died and tens of thousands maimed…to make Iraq safe for Russia and China to take its oil.

    Our ‘leaders’ are beyond contemptible.

    • Elin is Hot says:

      Just goes to prove the war in Iraq was never “about oil.”

      It was about Bush, Jr. exorcising the wishes of Bush, Sr. to “get Saddam.”

      If there is a Hell, the Bushes should be going there, led by Rumsfeld and Cheney.

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