The big economic stimulus give away

The IRS started mailing the economic stimulus checks last Sunday, and Goldman Sachs has already compiled a list of the 10 companies that will benefit most from the extra cash: Cheesecake Factory, Best Buy, Darden Restaurants, Home Depot, JC Penney, Kroger, Kohl's, Royal Caribbean, Safeway, and, of course, Wal-Mart. (Wal-Mart was an easy guess considering that 8% of U.S. retail sales already go there.) Goldman Sachs' list looks a little strange to me. It includes no bars or lotteries. I guess you can get a drink at Cheesecake Factory or Darden, but geesh... who wants to? Also, Royal Carribbean? I know little about cruises, and have never been on one, but what's Royal Caribbean doing on Goldman's list? A $600 cruise? To where, Detroit?

In the same way that I wonder if anyone actually thinks the TSA makes air travel safer, I am amazed that anyone actually thinks a bunch of $600 checks will do the economy any real good. The money was ours to begin with. The government doesn't make real money, they just take yours and mine, though lately they have sure printed a great deal of fiat money, thus diluting what they left us. That fiat money, by the way, has largely gone into the balance sheets of financial institutions. The same guys that brought you those wonderful "liar loans" called ARMs, and passed the (promise of a) buck right along to Fannie Mae who paid them their cut and spread around the fiscal virus to investors in big packaged portfolios called mortgage derivatives. The virus spread like wildfire. Bear Stearns, the investment bank that you and I are helping to bail out, got a lot. China got some. Eventually and inexorably it all spread to you and me in the form of one the most greed festooned recessions in decades.

Oh, and the fiat money the fed is printing? Well, it comes vis-a-vis the declining fed rate, which was dropped another quarter of a percent just today. The fed rate is what bankers use to loan to other bankers, usually to help that banker meet his reserve requirements. The effect, however, is supposed to trickle down into the economy by stimulating borrowing to buy more consumer goods and capitalize enterprise. Let me ask you, has your credit card company offered to lower it's interest rate on balances held in your account? Have you tried to get a mortgage lately, or a small business loan? How about a student loan? The stuff grown men and women take seriously is really unbelievable.

As of last April 15th (tax day) the cost of the Iraq war had already been $522.5B. Today is the fifth anniversary of President Bush's "mission accomplished" speech made aboard the USS Abraham Lincoln in which he declared "major combat operations in Iraq have ended". That $522.5B is equal to $18.54 each for every person living in the U.S. That is your real cost if you are a taxpayer. The economic incentive package is supposed to provide $600 for each taxpayer, plus $300 for each dependent child. So for many of you, this all may seem like a good deal. Spend $18.54 and get back $600 or more. But don't forget to calculate the .0014% of an American military person's life that each and every person must bear. I wonder what is the cost of that? That is, of course, without calculating the cost of 1,205,025 Iraqi lives caused by the war there. But we shouldn't be bothered with that, right? Or how about the 309 other coalition troops? Peanuts yea? Maybe you feel, as some do, that those other coalition members are slackers. The stuff grown men and women do not take seriously is really unbelievable.

You know all those big Hollywood movies based on garish comic book story lines? I mean movies like “Batman”, “Sin City”, “Shoot em up”, etc.? The more I read the financial and political headlines the more I think we have entered a period of art imitating life. I can make more sense of a Salvador Dali painting then I can of what is happening today.

References:
http://www.antiwar.com/casualties/
http://www.nationalpriorities.org/budgetpriorities2009
http://www.justforeignpolicy.org/iraq/iraqdeaths.html
http://www.cnn.com/2003/US/05/01/bush.transcript/
http://www.cnn.com/2003/US/05/01/bush.transcript/
http://www.census.gov/