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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review June 30, 2010 / 18 Tamuz 5770

G-20 fairy tales

By Robert Robb


http://www.JewishWorldReview.com | Based upon the statement coming out of the G-20 meeting, global political leaders apparently live in a never-never land where excesses do not have consequences.

They not only believe that their own excesses don't have consequences, but that they can wish away the consequences of excesses in the private sector.

The current global economic malaise began with excesses in the private sector. Lenders imprudently lent and borrowers imprudently borrowed, particularly in housing. Financial institutions imprudently invested in securitized subprime mortgages.

Rather than allow these lenders, borrowers and investors to suffer the full consequences of their imprudence, governments borrowed heavily to bail them out and provide general fiscal stimulus to ameliorate knock-on effects on the rest of the economy.

The U.S. central bank had already been pursing a lax monetary policy that facilitated the imprudent lending and borrowing. It opened the monetary spigots even wider, including becoming a buyer of securitized debt that had difficulty finding other takers.

The European central bank, which had been pursing a more prudent monetary policy, also opened the spigots and, in a more modest fashion, became a buyer of last resort as well.

Now the markets believe that governments have borrowed too much and are putting pressure on sovereign debt, particularly in Europe.

Not to worry, the G-20 statement says, we've got this under control.

We will continue our fiscal stimulus because our economies are still in the dumps. But we will also cut our deficits, as a percentage of GDP, in half by 2013. We will do so, however, in a way that is "growth-friendly."

And while we do that, the countries in the G-20 that have trade deficits will consume less and save more, while those with trade surpluses will buy more and save less.

This fairy tale was concocted to paper over a fundamental disagreement between the Obama administration, which wants to keep the pedal down on fiscal stimulus, and Europe, particularly Germany, which believes that the party's over.

Germany, the object of much frustration when government leaders were trying to suspend the consequences of excess, increasingly looks like the grownup in the world's economy. It went for fiscal stimulus considerably less and has, among developed nations, a relatively low current deficit and accumulated debt load. It also has an unemployment rate of 7.7 percent, compared to 9.7 percent in the U.S. and a Euro area average of over 10 percent.

In the U.S., it is almost universally believed that we have been living beyond our means. We consume and borrow more than we can afford. We save and invest too little.

There's only one way to fix that. We have to consume and borrow less and live more modestly. We have to save and invest more.

Yet government policy continues to promote consumption including, almost unfathomably, in housing. Big tax breaks for buying a house, easy money to keep mortgage rates low, government-guaranteed mortgages with low down-payments, a bankrupt Fannie Mae and Freddie Mac given an unlimited federal checkbook to maintain liquidity.

And the Obama administration wants to disincentivize saving and investing by increasing taxes on capital gains and dividend income.

Recessions are painful. But after they have run their natural course, there is a more fundamentally sound economy to build from.

The United States has endured the pain of recession with high unemployment rates. But because the federal government, under Bush and Obama, has sought to wish away the consequences of excess, we do not now have a more fundamentally sound economy on which to build.

Behavioral changes -- such as consuming less and saving more -- occur during bad times. Perhaps they can make bad times slightly more bad, but then you get the good. When times are good, no one sees the need for change.

The motto of the Obama administration is supposedly not to let a crisis go to waste. They've wasted this one.

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JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.

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