2.22.09: Anger or Despair

In the wake of the stimulus bill passing with only three Republicans voting for it, none in the House, it's curious as to what Sen. Arlen Specter (PA), Sen. Olympia Snowe and Susan Collins (ME), and one of today's MTP guests Gov. Charlie Crist (R-FL) were all thinking. They are all for the stimulus package, be it they all have their amendments (everyone does), but nonetheless they bucked the rest of their party.

But why would Gov. Crist be for the stimulus? Florida residents have seen their savings [read: retirement savings] decimated and hence have had their homes foreclosed on at staggering rate. They need the money... Virtually every state is running at a deficit with the possible exception of Alaska. Spending is at a trickle and Gov. Crist believes that the government, the only ones with cash, need to come into the picture.

Like we said, every state runs at a deficit so why would today's other Gubernatorial guest, Bobby Jindal (R-LA). His reasoning, in the context of his of his state, isn't shallow rhetoric. He says that changing or extending the employment benefits in the state as a temporary solution would require a permanent change in state law that would event raise taxes on small businesses. It's refreshing to hear from a Republican who actually gives an informed reason as to why the stimulus is not a good idea instead of answers with bad posture. Also, he stated that Louisiana, despite running a deficit, is still a 'doner' state with it's offshore gas and oil interests.

This latter proclamation doesn't carry any weight in that it doesn't mean that the state is doing well. It can certainly mean that they are not as bad off as others. Surprisingly, Mayor Ray Nagin of New Orleans (show clip) made succinct sense, "Any money that Gov. Jindal does not want, New Orleans would take happily." Gov. Jindal also mentioned that the stimulus is an unreasonable bill to hand future generations.

This brings us to state clearly: Whether it be a heavily based Republican tax cut plan or what's in place now, an enormous stimulus spending bill, future generations will get the bill. No matter how it's done, future generations are paying.

Without seeing the fine print, the increase in taxes for small businesses that Gov. Jindal talked about, could be looked at in different ways. First, without extended unemployment benefits you could begin to see another sort of mass drowning in New Orleans, one of the unemployment and homeless variety. Extraordinary circumstances, which this column believes have not yet truly have hit us, means that this temporary solution is a necessity for the people. If the tax is proportional, this eventual tax increase would be in response to increased production on the part of the small business and hence making more money. Again, without knowing what the percentage increase is, the increased tax becomes the result of more money coming in. And then there is just the naive question: Can't you just change the law back after time when it is advantageous to do so?

Governor Crist talked about common sense and doing what was right for the people of Florida. Isn't that another way of saying that the Republican party, generally, is not acting with common sense? It's a better question than David Gregory asking both guests about their future political ambitions at this time. If the purpose is simple to have the clip for use in the future, then it's trite.

But back the 'Republican' question. We can understand the concern with being handed a 1,000 page bill and then being asked to vote on it 5 hours later, but the problem is that the main counter idea from the Republicans, voiced most loudly, is that more tax cuts are needed. Ad nauseam... Having done this for the past eight years simple didn't work. The proof is the state we're in now.

And the crisis we're in now starts with the banks, which leads us to that nasty multi-syllabic word, 'nationalization.' Today's panel consisting of Bloomberg News' Al Hunt, NPR's Michele Norris and CNBC's Becky Quick addressed this in reaction to what Senator Chris Dodd (D-CT) said earlier this week to Al Hunt. He said that a temporary nationalization (and we're paraphrasing here) of the banks may be necessary sending the stock market further into the deeper end of the pool. However, Mr. Hunt's reaction on today's program, was quite interesting in that he said that Mr. Dodd's statement was actually quite benign. And though, the reaction was one of alarm, we agree with Mr. Hunt in that the statement did not deserve such a reaction, in the press at least. At this time, 14 banks have been 'nationalized,' which is to say that the bank no longer had the cash to cover all of it's customers' holding (the money in your savings accounts for example) so the FDIC, the government agency that ensures those savings, had to step in and take control. It's funny, when the ordinary American puts his/her money in a bank, that person would always take a small assurance away that the bank was FDIC insured (we did). And now that those insurers have to act, we have trepidation in them do so.

And lastly, and rightly, the panel reacted to an on-air commentary by CNBC's Rick Santelli on the program Squawk Box, which Ms. Quick co-anchors. His commentary basically made the argument as to why the stimulus for the housing market is wrong in that the 'losers' in the market get bailed out at everyone's expense. On a ground level, one neighbor is paying for another mortgage. Ms. Quick did point out that Mr. Santelli makes these kinds of comments a lot, but this one in particular was addressed by the White House Press Secretary Robert Gibbs, in which he invited the editor to sit down with him and read over the plan. Unfortunately, it's a lose-lose situation for that 'neighbor' who takes the hit in Mr. Santelli's illustration. That person is angry that his/her tax dollars are going to help in someone else's financial woes (forget about the notion of Americans being in this together we guess) so that is a losing proposition. However, when three in ten homes on his/her block are foreclosed on, then the person is in despair, because he/she is now underwater with their mortgage, paying more than the house is actually worth.

So that person has to decide on either anger or despair. We suggest anger, it tends to be a motivator.