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HAPPY NEW YEAR 2009!!!

From the Associated Press:

Gov. David Paterson said Friday that the loss of tax revenue from just six Goldman Sachs’ executives will cost New York $178 million.

The executives complied with the urging of New York Attorney General Andrew Cuomo and others who said in November that major Wall Street companies benefiting from federal bailouts shouldn’t pay out the usual huge bonuses to executives.

Paterson says it is the right thing to do, but the result is a further hit to the fiscal crisis of state government.

“Things could go even more south in a big hurry,” Paterson told reporters.

He said Wall Street firms receiving federal bailout did the right thing by forgoing bonuses to their executives, but that has had a devastating effect on New York’s fiscal crisis because Wall Street taxes accounted for 30 percent of state revenue in the last fiscal quarter.

“I think it was the right urge,” he said, but “the state lost $178 million in that moment.”

The Governor was glad the bonuses were not paid but sad the state lost revenue because of the class warfare instituted symbolic gesture. How leftist, indeed!

Barack Hussein Obama, President-Elect of the US, is touting a $1 trillion spending spree, er plan. Yes, Mr. Obama wants the US to green the American economy out of recession by “creating” jobs, something the government is poor at doing and real jobs are created through private business building not federal expansion.

 ”It is critical that the other branches of government step up,” Obama said at his Chicago press conference, reiterating his support for new roads, green energy projects, school construction, bike paths, museums and bridges to nowhere.

Some would say this is the “new, new deal” but is really looks more like a replay of Jimmy Carternomics of lax monetary policy, weak dollar, high tax rates and explosive spending.

The Federal Reserve moved to slash interest rates nearly to zero and Obama responded to the announcement by recognizing the obvious:

“We are running out of the traditional ammunition that’s used in a recession, which is to lower interest rates,” scowled Mr. Obama on Tuesday.

Were happy to see this community organizing lawyer from Chicago can count down to zero and realize that negative interest rates are from Mars or San Francisco.

The Fed repeatedly cut interest rates in the 1970s in a weak attempt to jump start an economy hampered by over-regulation and 70% marginal tax rates. Each interest rate move by the Fed inched the inflation rate from 7% in 1978 to 11% in 1979 to 14% in 1980. One of Jimmy Carter’s chief economic advisors, Lawrence Klein, reflected on Carter economic thinking when he said:

“We need faster monetary growth,” even as inflation hit double digits.

While Carter’s inept fiscal policy of federal spending almost tripled in the 1970s, from $195 billion to $590 billion, the unemployment rate steadily climbed. Similar policies by FDR caused the Great Depression to extend itself by as much as 7-years but Carternomics revisited by Obamanomics will eventually bring on great inflation and Jimmy Carter malaise.

Tune-up your bicycle and get ready to start pedaling. Indeed!