Short Quiz

[johnkarls]

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SHORT QUIZ

Editorial Note: The following questions (and their answers which will be sent with next weekend's newsletter) do NOT reflect conventional wisdom which, presumably, "All The Devils" does.

1. What was the American Jobs Creation (sic) Act of 2004 (aka the American Jobs DESTRUCTION Act of 2004)?

2. Did Congress realize that the special 5.25% corporate income tax rate (vs. the normal 35%) that they were enacting for dividends from tax-haven subsidiaries of U.S.-based multi-national companies related to the profits that had accumulated in those subsidiaries for more than a decade FROM EXPORTING AMERICAN JOBS?

3. Did Congress think that those tax-haven subs have “mattresses” in which they stuffed the TRillions of profits from exporting American jobs?

4. Did the tax-haven subs of the American-job exporters, in fact, have “mattresses”?

5. Where had the tax-haven subs of the American-job exporters invested their TRillions?

6. Since the tax-haven subs of American-job exporters had effectively been forced to invest their TRillions in the short-term commercial paper of (in other words, make short-term loans to) the unrelated CHUMP American companies that had NOT exported American jobs, what was the impact on the CHUMP American companies of the sudden inability to re-finance their TRillions of short-term commercial-paper borrowings?

7. Did the TRillions in reduced payrolls and capital expenditures of the CHUMP American companies that had NOT exported American jobs take place between 10/22/2004 and 12/31/2007?

8. How many TRillions in reduced payrolls and capital expenditures of the CHUMP American companies were required? (In other words, how many TRillions of profits of the tax-haven subs had been loaned to the CHUMP companies?)

9. What did the American-job exporters do with the TRillions that they were suddenly able to extract from their tax-haven subs?

10. Following the 10/22/2004 > 12/31/2007 reductions of $4-5 TRillion in American payroll and capital expenditures of the CHUMP American companies that had NOT exported American jobs, did Congress convene in January 2008 in PANIC MODE and, in less than 5 weeks (a Guinness record except for Declarations of War of which there have been none since 1941), enact the first Economic Stimulus Act = a rebate of $300 per person (including minor dependents) of 2007 personal income taxes (maximum $1,200 refund for a joint return with 2 or more minor dependents)?

11. Would the 2008-201? economic crash have occurred as a result of the $4-5 TRillion reductions in American payroll and capital expenditures REGARDLESS OF ANY “REAL ESTATE BUBBLE”?

12. On 10/23/2008, did Federal Reserve Chairman Greenspan testify before Congress that the financial meltdown had been caused by the failure of Congress to regulate “derivatives”? Did he testify that his earlier opposition to such regulation was based on a “flaw” (his term) in his understanding of how the economy operated?

13. Was Greenspan stupid for believing that the insertion of “swap” in the title of a traditional “plain-vanilla garden-variety” insurance contract for any loss in value of an asset somehow makes the insurance a “derivative”? [After all, a mortgage-backed security is an asset, just like your car or your home or your health or your life. Or a female movie star's legs, for that matter.]

14. Was Greenspan stupid for failing to realize that the Fed’s model of the economy assumed that the 1.5 generations of Americans who had come of age since the economy experienced regular economic cycles with a recession every 5 years or so, would not panic just like their more-experienced elders would not have panicked?

15. Was Greenspan stupid for failing to realize that the American Jobs DESTRUCTION Act of 2004 had produced $4-5 TRillion of reductions in American payroll and capital expenditures?

16. Do both Congress and the Federal Reserve have a “conflict of interest” in admitting that the $4-5 TRillion of reductions in American payroll and capital expenditures would have produced the 2008-201? economic meltdown whether or not there had been a “real estate bubble”?

17. Is this "conflict of interest" why Congress and the Federal Reserve have perpetrated the myth that the 2008-201? economic meltdown was caused by the “real estate bubble”?

18. Did we think at our 5/11/2011 meeting that because of Greenspan's stupidity (please see Question 13-15), New York University should investigate the legality of revoking Greenspan's PhD in Economics?

19. What do Alan Greenspan and Congress have in common with octopi? [NB: Per the "Ask the Editor" feature of http://www.merriam-webster.com (select "video" from the top menu and scroll down to "octopus"), the "correct" plural of "octopus" in America is "octopi" though "octopuses" is also acceptable for Americans willing to appear "ignorant" while in the U.K., only "octopodes" is correct.]

20. What are Bethany McLean and Joe Nocera?

21. Are you gullible enough to believe the myth created by Congress, Greenspan, McLean, Nocera, et al.?

*****
For anyone who just can’t wait during this Holiday Season to learn more about these issues, a plethora of information is available on this Bulletin Board for our 5/11/2011 meeting which focused on “Debtor Nation: The History of American Red Ink” by Louis Hyman. Particularly, (1) Q&A-14 of the Short Quiz and the Short Quiz Reply entitled “Q&A-14 and the Real Cause of the Economic Crash,” (2) the posting entitled “American Jobs DESTRUCTION Act of 2004” and (3) the posting entitled “The Plausibility of John Karls’ Challenge to Conventional Wisdom” -- all of which are contained in the “Participant Comments” section of this Bulletin Board with regard to our 5/11/2011 meeting.