Sep 23, 2008

Open Letter to Philip Klein: What You Missed

Since your new site is currently in the testing phase and a new article is imminent, I wanted to bring you up to date on some things you probably missed while you were rescuing pets,  jonesin' for free meals at Sanderson's, and sleeping in the air-conditioned comfort of the Nederland Volunteer Fire Department.

Your recent comments on the U.S. economy show gross ignorance of the real issues:

  • It is the economy stupid. And it is doing pretty d**n good.
  • Stock market - Bad day only. Watch it come back."
  • Good economy - higher gas prices. Supply - demand.

Because the economy has been so good, the Federal Government swallowed two gigantic mortgage companies and dumped more than $5 trillion of the firms' debt onto taxpayers, nearly doubling the amount Uncle Sam owes to his lenders. While I was still trying to get my head around what amounts to the biggest debt transfer since money was created, Lehman Brothers went broke, and Merrill Lynch felt compelled to shack up with the Bank of America to avoid a similar fate.

Then, having sworn off bailouts by letting Lehman fail and wiping out its shareholders, the Treasury and the Fed reverse course for an $85 billion rescue of creditors and policyholders of American International Group (AIG), a $1 trillion insurance company.

I realize that these are difficult issues for you to grasp. You have a hard time "talking educated" when it comes to financial matters, like the difference between actual numbers and percentages of a whole:

  • Folks - you have watched five men take a budget of 76 million and increase it almost 40 million dollars in just five years.
  • This would bring over a five year [sic] period a spending budget in excess of a 40% increase over five years.

Likewise, you're obviously confused about the effect of unreserved fund balances on city and county bond ratings. However, surely you have some comment upon these recent developments, considering your previous positions on "Nanny Government" and its indifference to the business community at large?

Sincerely,

Gus

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