Could you rescue your own standing (in my eyes) by presenting a justified critique of the math, in mathematical terms, without which you sound like a, simple……. well, a simple politician casting a net of unsubstantiated hyperbolae.

I dont want to see my subscription commentators going the same way as the elected lot so get your act together and back up what you allege with some coherent thought.

Cheers
W

Mistake No. 1
Laying it on the lap of the Fed’s money supply increase is inappropriate. The financial community has and has had for a long time the ability to inflate the system through the creation of any number of financial instruments, many of which are still little understood. Let’s just take leveraging and allowing 5% of an asset as sufficient to control that asset. That’s an increase in money supply since it give money the power to buy 20 times more than if the entire 100% was required. Monetizing future income, such as the Philadelphia school district, is just another way of adding to the purchasing power supply. This was just one of many ways of taking an asset/debt and monetizing it, thus adding to the money supply. So between the Fed and the financial community they did in fact inflate the financial markets.
Then, given the clever ways the financial community avoided reserve requirements rendered large portions of deposits not subject to reserves, thus, these portions could be multiplied at infinitum.
Fannie Mae and Freddie Mac have been a member of the financial community
The public is told that the banking system’s problem is the toxic assets, and for that reason they can’t lend; when they then get TARP money, instead of starting to lend, they buy other banks to heal their balance sheets.
I would expect inflation as the financial community will start lending at about the same time as the Recovery package money starts being released; it’s a good plan to blame inflation on government actions. However, inflation can be managed if the financial communities stop relying on macro-economics as an unworkable control mechanism, and start treating the system more like a gas network, that has to distribute the right proportions fuel to many different communities. Maybe liken the money supply management to an intricate navigation system, with locks, gates, reservoirs, and channels, monitoring the flow, and opening or closing controls, depending on what’s really happening on the ground.

Mistake No. 2
Lending between banks may have improved, but it hasn’t benefited Main Street; companies that have had to close for lack of funds, haven’t reopened, and rehired people as a result of the improved bank lending. That’s what the economy is all about; not just financial markets, which in fact depend on the health of the real economy. The banks maybe in better shape, but they don’t seem to understand their responsibility to the real economy, and keep trading paper on some hope that the real economy will revive on its own, without liquidity from government… The banks aren’t providing it!
Save more versus borrow more: Our financial system is debt based; it seems the only way to increase liquidity is through borrowing. This is probably the fundamental flaw that will fuel the booms and busts, as there’s no way to avoid bankruptcies, defaults, and foreclosures, even with the economy at its best.

Mistake No. 3
Here it is reasonable to agree with your evaluation, which is likely to be the case if the old system of money supply management is applied. Obama talked about different sources to make up the shortfalls. In my “navigation system” scenario, you can say that some of the large reservoirs will start being drained into the navigation system.
I doubt you’re a grouchy old skeptic, but I’m sure that you are only thinking from within the economic box we’ve been in for hundreds of years, particularly the monetary system and method of money creation. As it is, the current system is almost totally in the hands of the financial community; when they’re in trouble, they go to the government (the people) to ask for new money… so they can monetize and multiply more and more.
I think Reagan was not as believable as Obama, which maybe a good thing or a bad thing. We believe Reagan, and see where it got us!
As for “middle of the road” I would quote Hightower, “There’s nothing but yellow lines, and dead opossums in the middle of the road.” I guess we read different opinions and feel different pulses. What I see, hear, and read, tells me the majority of the population is more interested in a progressive agenda, even many who think of themselves as “conservatives.” But today’s definitions fall short of reality, so yesterday’s progressive is today’s right hardliner. Who knows?
Finally, I'm just a 67 year-old student, and Mr. Martin might be able to educate me a bit more.

Well, here it is. Last week, President Obama unveiled his budget—his blueprint for America—and it's ambitious, amazing and unapologetically progressive. As Paul Krugman said, it will set America on a "fundamentally new course." I say it's about time. Count me among the millions of Americans who are tired of broken campaign promises and middle of the road pablum that gets nothing done.

President Obama called his budget "a threat to the status quo," and trust me, the status quo noticed. Oil companies, big banks and insurance companies are already mobilizing to stop it.

Here are some really incredible things about Obama's plan. Check them out and then send them on to your friends and family so that millions of people will have the information they need to fight to make this vision a reality.

10 things you should know about Obama's plan (but probably don't)

The plan:

1. Makes a $634 billion down payment on fixing health care that will go a long way toward paying for a more efficient, more affordable health care system that covers every single American.

2. Reduces taxes for 95% of working Americans. And if your family makes less than $250,000, your taxes won't go up one dime.

3. Invests more than $100 billion in clean energy technology, creating millions of green jobs that can never be outsourced.

4. Brings our troops home from Iraq on a firm timetable, finally bringing the war to a close—and freeing up almost ten billion dollars a month for domestic priorities.

5. Reverses growing income inequality. The plan lets the Bush tax cuts for the wealthiest Americans expire and focuses on strengthening the middle class.

6. Closes multi-billion-dollar tax loopholes for big oil companies.

7. Increases grants to help families pay for college—the largest increase ever.

8. Halves the deficit by 2013. President Obama inherited a legacy of huge deficits and an economy in shambles, but his plan brings the deficit under control as soon as the economy begins to recover.

9. Dramatically increases funding for the SEC and the CFTC—the agencies that police Wall Street.

10. Tells it straight. For years, budgets have used accounting tricks to hide the real costs of the wars in Iraq and Afghanistan, the Bush tax cuts, and too many other programs. Obama's budget gets rid of the smokescreens and lays out what America's priorities are, what they cost, and how we're going to pay for them.

This is the change we voted for. President Obama has done his part, now we need to do ours.

Can you pass this on to your personal network? Just cut and paste into an email.

Here are a few more amazing things in Obama's budget:

1. Stops unnecessary government subsidies to big banks, health insurance companies and big agribusinesses.

2. Expands access to early childhood education and improves schools by investing in programs that make sure every child has a qualified, strong teacher.

3. Negotiates for better prescription drug prices using Medicaid's tremendous bargaining power.

4. Expands access to family planning for low-income women.

5. Caps the pollution that causes global warming, and makes polluters pay to support clean energy innovation.

Martin, the author, said it. He is a "grouchy old skeptic" who just doesn't get it.

Begin to phase out, as we know it, the term "employees"
Require and train "employees " to be set up as businesses, either as an LLC or S corporations. Let,train and encourage the employee be employed by his own company.
This will create an immediate "multiplier".
In turn, require banks to lend money to these new entities. For example, target stimulus checks or other funds, be put on deposit with local banks and require the banks to lend against it. This will give, even the beaten, an opportunity at a second chance to build credit .
For example, if you take a company with 10,000 employees and now create an additional 10,000 new businesses,hence a new economy.
Keep in mind that this will open the door for the former "employee" to look at new business options, including addressing the falsehood that one job will sustain a family. To simplify, it is no different then getting two aces in blackjack and splitting them into two independent entities run by one.

New companies need business cards,credit cards,perhaps an additional phone ,maybe a ups account and many more things that get a real economy going and ultimately will "empower" those that had previously relied on others, only, for their livelihood.How about 10,000 new entities ordering checks at the same time from their banks or business cards or flyers from their local printer or local Staples or Office Depot?
Of course, this is but a thumbnail sketch. Much work would have to be done. However, this kind of retooling that I am discussing ,could be a less painful process and can offer long term economic prosperity as it rebuilds the middle class through creating new small businesses..

I welcome your comments,

Banks and other institutions must put their guarantee on all securitised packages so as to ensure that banks etc are responsible in their future lending policy.

Banks should be allowed NOT to mark to market for say two years.

Now Obama is emulating FDR with higher taxes (79%, 90% and confistatory tax on busnesses, which STOPPED investments and job creation). The market's collapse is due to the combination of Fanny/Freddy failure and fear of investors for what excessive taxation will do to investments. Check out the wall street reaction to every Obama speech back to his election.

Obama's 'stimulus' legislation is a cruel joke on America – only 15 to 20% of funds to be spent in 2009! Plus socialist projects of the Democrats and redistribution for the majority of money to be spent in 2010 and 2011, just in time to help him get re-elected.

WAKE UP
America and VOTE ALL DEMOCRATS OUT OF OFFICE!

Whilst I do not agree with all that Pres. Obama is doing to supposedly 'save' the US economy, I agree much less with your assessment of the situation.

First of all your assessments of the twelve largets banks was faulted insofar that you did not list the 'Exposure' of these banks to toxic derivatives. These figures are deliberately being kept from the public and you chose to try to do so too.

If you take into account the exposure to derivatives, swaps and other 'cleverly' contrived financial vehicles by smart arse financial criminals then the whole bunch of large US banks and many smaller banks would be 'smoke'.

In addition to these false assessments by you , you further completely ignore the fact that the main reason that the whole world banking system is at peril is not because of Greenspan, nor Bernenke but by the US banks who sold criminally created vehicles which were knowingly created based upon faulty banking practices and sold all around the world.

You see they knew what they were doing but like all criminals they didn't expect to get caught and in fact , so far, they haven't been caught because nobody in th system wants them to be taken to task , especially when they can hood-wink politicians to cover their backsides with 'Bailouts'.

You say, "Obama made three notable missteps, including an error in strategy and goal setting serious enough to nudge the U.S. economy back into a recession" I would prefer getting out of the hole that so-called conservative Republicans got us into over the last 28 years or so. As a fiscal conservative, I must ask, "what planet do you live on?" We are in the midst of the largest downturn since the Great Depression. All out monetary stimulus has been ineffective in creating growth and Paulson and Bernanke's TARP while it did restart inter-party lending has not even begun to replace the securitization-induced bubble of the last decade.

I am truly trying to understand the logic of Republicans. You say that Obama has misread the crisis since he believes the entire problem stems from Wall Street. Where do you get that from? He has laid out 3 legs to the plan for recovery. Certainly, he recognizes that borrowers took foolish risks and while his mortgage plan makes me very sad, it would be even more foolish to simply let housing precipitate another Depression. That is the consensus from economists including McAin's advisor, Mark Zandi and Dr. Robert Shiller who have a lot more credibility than any naysayer at this moment. They say that Obama's stimulus should have been larger and tax cuts would not provide the same "bang for the buck".

This crisis was caused by unmitigated greed both from Wall Street and Main Street. Your focus on CRA's contribution distorts the fact that only 6% of foreclosures came from this segment and that percentage will decline as more prime loans default. No, it was securitization and leverage that was the main culprit and bankers could have prevented the dislocation in housing and asset prices, but they would have limited their bonuses. Given the human frailty of greed vs. altruism, they took the money.

Regarding goal setting, we have learned from history that what will be will be which is why I would choose the Swedish model as opposed to the Japanese model for restructuring our banking system and Worldwide capital markets. This is a perfect time to take on SS and Medicare along with the massive infusion that is needed for infrastructure. Incrementalism, as was used by Japan only delayed the inevitable. Banks need to go away and housing prices need to decline to their historic relationship to wages and rents. This will take place regardless of whatever the Fed does. It always does.

Next you say that he believes the credit market has frozen. Again, he and his advisors are well aware that lending is continuing, but if you think we can rebound from this deflationary environment with zombie banks making loans to businesses without established reserve requirements, I think you're being very short sighted. We need to use the Swedish model to remove the worst of the large banks from the system. The markets will trend lower until and unless we do. Proposals to suspend mark-to-market are foolish. Many of our largest banking institutions grew to unsustainable levels by participating in securitization and, like FRE and FNMA, need to disappear. This makes bankers like you unhappy with Obama's plan. What a surprise!

Did we watch the same speech? It left me with a picture of a guy who was an oustanding campaigner but now the reality of being President is sinking in – for himself, and unfortunately, for us Americans.

It scares me that this President can talk with such confidence about one ideology while actually implementing something completely different.