Yesterday we experienced more vintage Obama rhetoric while he announced the proposed financial system overhaul. "Millions of Americans who have worked hard and behaved responsibly have seen their life dreams eroded by the irresponsibility of others and by the failure of their government to provide adequate oversight. Our entire economy has been undermined by that failure." Truer words have never been spoken. But his policy has been to bail out the irresponsible while ignoring the damage done to the responsible.
Has Tim Geithner, President of the monetary policy implementing and Wall Street bailout managing New York Federal Reserve Bank at the time the major commercial banks were conducting their irresponsible activities, suffered any consequences from his participation in the debacle? No, he was rewarded by being appointed US Treasury Secretary by Obama even though he was discovered to have cheated on his taxes.
Did Alan Greenspan and then Ben Bernanke, Chairmen of the Federal Reserve while the economic system was becoming overleveraged due to the Fed's accomodative monetary policy, suffer any consequences from their central position in the financial catastrophe? No. Alan Greenspan managed to get out before the crap hit the fan and Ben Bernanke is still the Fed Chairman.
Have Barney Frank or Christopher Dodd, perhaps two of the most blameworthy protagonists responsible for creating the housing bubble by being the Congressional mouthpieces and cheerleaders for Fannie Mae and Freddie Mac, ever suffer any consequences for their actions? No, they remain in their jobs as chairmen of the House Financial Services Committee and Senate Banking Committee, respectively, and spend their time blaming everyone but themselves for the disaster.
Have top bureaucrats at the federal regulatory agencies that were asleep at the switch in providing oversight for the financial industry suffered any consequences of their negligence? Not that I know of.
How about the top executives at the major banks, insurance companies and Wall Street investment firms who were the major players in the fiasco? Less than a handful at the very top lost their jobs, but received exceedingly generous severance packages. Others may see their compensation packages temporarily curtailed, but they will still have jobs making much more money than those they fleeced.
The mega-rich hedge fund and pension fund managers who played the game of investing in the worthless crap have also not exactly had to sell their multi-million dollar apartments in New York and London, mansions in Greenwich, homes on the French Riviera, yachts or corporate jets. Many took some hits, but they should have been wiped out. Most will soon be back taking advantage of the gullible victims again.
All of this is what is so infuriating about Barack Obama. He is skilled at saying the right thing, but does the opposite. You have to watch what he does, not listen to what he says.
Will the new rules announced yesterday about overhauling the financial system make any difference? The Wall Street Journal said it best. "The main idea behind the Obama Administration's new financial revamp is essentially this: With more power and a modest reshuffling of the bureaucratic furniture, the same regulators who missed the last credit mania will somehow prevent the next one."
Most of the "historic" proposals were things the government was already supposed to be doing. The plan is really nothing more than public relations damage control by changing a few names and reassigning responsibility. Dealing with the financial collapse should not be that difficult or complicated. It is not hard to recognize the one common thread running through the whole meltdown - debt. Debt should be less easily obtained, and the consequences for default should be more severe - for both the borrower and the lender. Let the bankruptcy laws work, and stop meddling. But the government won't. And over time, the financial vultures will again capitalize on the incestuous relationships with regulators or catch them asleep at the post and figure out new ways to devour the public.
Thursday, June 18, 2009
Friday, June 12, 2009
The Death Of Liberty
Historians of the future will point to the year 2008 as the year America's world leadership began to fade away. It is the year the country's traditions of freedom and economic prosperity generated from private enterprise, individual rights, equal opportunity and impartial justice started to erode. It would take a number of years for the evidence of decline to become obvious to all, but eventually even the diehard believers of utopian promises could not deny that their personal liberties and standard of living were being confiscated by the newly empowered oligarchs whose promises they believed.
The spark of the flame in 2008 was the "historic" election of the Democratic Party and its most ideologically socialist radicals to total control of the government. It certainly was historic, but not in the way most of the believers imagined. As soon as these autocrats took over in January, 2009, they began to take control of the economy, starting with the financial and automotive industries and eventually moving on to health care and energy. American citizens began to lose their free choice in the lifestyles they wished to pursue and the goods and services they wished to purchase. Government began to direct nearly every aspect of citizens lives, mandated through both edict and oppressive tax rules.
The American economy in 2008 was in recession. That made it easy for the radical left-wing politicians to take advantage of voters apprehension and make promises that could not possibly be kept, because promises of economic recovery and a return to stability were what the voters wanted to hear. Most did not seem to know or care that recessions have always been a normal consequence of economic development and occur from time to time on a regular cyclical basis, each time recovering without any drastic government measures and moving on to even greater heights of prosperity.
In a society of free choice and an economic system of dynamic change and progress, some companies and industries always go out of business if their products become obsolete or they cannot remain competitive with their rivals. Bankruptcy laws have been on the books for generations to deal with either corporate restructurings or dissolutions. Government intervention in the process cannot work, because all a rescue or subsidized support of a moribund, unproductive organization does is attempt to sustain the unsustainable and defeat the progress engendered by the process of creative destruction.
But this time, once elected, the extremists in charge began to dismantle, ignore and overturn the fundamental principle's underlying the traditional capitalist economic system. They took over major companies, fired their executives, decided what products they could and could not produce and sell, and firmly entrenched themselves in every aspect of private businesses. They directed the policies of the Federal Reserve System, the supposedly quasi-independent central bank of the United States, and forced them to undertake unprecedented money creating policies that were hyper-inflationary. They increased federal spending to such outrageous levels that all Americans for generations to come would be required to live a much more modest lifestyle than their predecessors in order to service the massive resulting debt. And the retirement and health benefits that were promised to them were simply not affordable.
American citizens themselves were responsible for all this. With the assistance of the major media organizations, the public believed the snake oil promises fed them by a rhetorically skilled, relatively unknown politician with a minimal but definitely socialist track record, and no experience managing anything but political campaigns. They believed the outrageous accusations and character assassination tactics of congressional democrats against their opponents, even though it was readily apparent the congressional democrats themselves were the primary contributors to the economic implosion due to their support and promotion of imprudent real estate lending policies. The campaign of deceit worked, the radical socialists gained total control of government and immediately began implementing their overhaul of the American economic and social systems.
There is little question that the United States, through the economic growth engine of capitalism, had achieved a remarkably high standard of living as a country but at the same time suffered a disparity of wealth and income among its citizens that needed to be addressed. In a society of abundance there was no legitimate reason for those at the bottom to be left out. If future economic growth had to be marginally sacrificed through higher taxes on the wealthy in order to provide support for the disadvantaged, underprivileged and disabled, then a society of advanced affluence could certainly afford it.
But in order to actually provide assistance to the unfortunate, the money needed to be spent wisely, not thrown away to some favored interest group, politically correct crusade, or government programs that didn't produce results. And it should never have been used to interfere in private enterprise. Unfortunately, the newly empowered oligarchs were more interested in consolidating their power than helping the people. They autocratically seized the power to abrogate contracts, set financial industry lending policies, reward their benefactors at the expense of the public, and unilaterally determine such formerly free choice basics as how much money people could make, what car they could drive, what energy sources they could use, and on and on.
With little to no opposition, a cabal of the president and a few of the most powerful congressional leaders gained control of American industry and decided how taxpayer dollars could be confiscated and redistributed. Instead of free markets, private enterprise and equal opportunity, America gradually deteriorated to a system that depended on favoritism, central government allocation of resources, and, inevitably, even more graft and corruption. Instead of the market determining who won and who lost, the president, legislators and bureaucrats in Washington did.
American business under government run industrial policy degenerated into bribe paying supplicants vying to be rewarded with contracts to supply public goods and services as determined by the overlords in the political bureaucracy. As socialism gained its stranglehold, industrial production and productivity experienced a downward tailspin that ended in complete government control of society and the economy. The predictable result was that the folks on the bottom of the economic ladder did not advance, those in the middle and most of those on the top gradually fell to the bottom, and all that was left at the pinnacle were the well-connected, priviliged elite who dictated how American citizens were to live their lives. In the end, the pyramid of living standards collapsed on its sides into a narrow middle finger pointed directly at the American public.
The spark of the flame in 2008 was the "historic" election of the Democratic Party and its most ideologically socialist radicals to total control of the government. It certainly was historic, but not in the way most of the believers imagined. As soon as these autocrats took over in January, 2009, they began to take control of the economy, starting with the financial and automotive industries and eventually moving on to health care and energy. American citizens began to lose their free choice in the lifestyles they wished to pursue and the goods and services they wished to purchase. Government began to direct nearly every aspect of citizens lives, mandated through both edict and oppressive tax rules.
The American economy in 2008 was in recession. That made it easy for the radical left-wing politicians to take advantage of voters apprehension and make promises that could not possibly be kept, because promises of economic recovery and a return to stability were what the voters wanted to hear. Most did not seem to know or care that recessions have always been a normal consequence of economic development and occur from time to time on a regular cyclical basis, each time recovering without any drastic government measures and moving on to even greater heights of prosperity.
In a society of free choice and an economic system of dynamic change and progress, some companies and industries always go out of business if their products become obsolete or they cannot remain competitive with their rivals. Bankruptcy laws have been on the books for generations to deal with either corporate restructurings or dissolutions. Government intervention in the process cannot work, because all a rescue or subsidized support of a moribund, unproductive organization does is attempt to sustain the unsustainable and defeat the progress engendered by the process of creative destruction.
But this time, once elected, the extremists in charge began to dismantle, ignore and overturn the fundamental principle's underlying the traditional capitalist economic system. They took over major companies, fired their executives, decided what products they could and could not produce and sell, and firmly entrenched themselves in every aspect of private businesses. They directed the policies of the Federal Reserve System, the supposedly quasi-independent central bank of the United States, and forced them to undertake unprecedented money creating policies that were hyper-inflationary. They increased federal spending to such outrageous levels that all Americans for generations to come would be required to live a much more modest lifestyle than their predecessors in order to service the massive resulting debt. And the retirement and health benefits that were promised to them were simply not affordable.
American citizens themselves were responsible for all this. With the assistance of the major media organizations, the public believed the snake oil promises fed them by a rhetorically skilled, relatively unknown politician with a minimal but definitely socialist track record, and no experience managing anything but political campaigns. They believed the outrageous accusations and character assassination tactics of congressional democrats against their opponents, even though it was readily apparent the congressional democrats themselves were the primary contributors to the economic implosion due to their support and promotion of imprudent real estate lending policies. The campaign of deceit worked, the radical socialists gained total control of government and immediately began implementing their overhaul of the American economic and social systems.
There is little question that the United States, through the economic growth engine of capitalism, had achieved a remarkably high standard of living as a country but at the same time suffered a disparity of wealth and income among its citizens that needed to be addressed. In a society of abundance there was no legitimate reason for those at the bottom to be left out. If future economic growth had to be marginally sacrificed through higher taxes on the wealthy in order to provide support for the disadvantaged, underprivileged and disabled, then a society of advanced affluence could certainly afford it.
But in order to actually provide assistance to the unfortunate, the money needed to be spent wisely, not thrown away to some favored interest group, politically correct crusade, or government programs that didn't produce results. And it should never have been used to interfere in private enterprise. Unfortunately, the newly empowered oligarchs were more interested in consolidating their power than helping the people. They autocratically seized the power to abrogate contracts, set financial industry lending policies, reward their benefactors at the expense of the public, and unilaterally determine such formerly free choice basics as how much money people could make, what car they could drive, what energy sources they could use, and on and on.
With little to no opposition, a cabal of the president and a few of the most powerful congressional leaders gained control of American industry and decided how taxpayer dollars could be confiscated and redistributed. Instead of free markets, private enterprise and equal opportunity, America gradually deteriorated to a system that depended on favoritism, central government allocation of resources, and, inevitably, even more graft and corruption. Instead of the market determining who won and who lost, the president, legislators and bureaucrats in Washington did.
American business under government run industrial policy degenerated into bribe paying supplicants vying to be rewarded with contracts to supply public goods and services as determined by the overlords in the political bureaucracy. As socialism gained its stranglehold, industrial production and productivity experienced a downward tailspin that ended in complete government control of society and the economy. The predictable result was that the folks on the bottom of the economic ladder did not advance, those in the middle and most of those on the top gradually fell to the bottom, and all that was left at the pinnacle were the well-connected, priviliged elite who dictated how American citizens were to live their lives. In the end, the pyramid of living standards collapsed on its sides into a narrow middle finger pointed directly at the American public.
Wednesday, April 22, 2009
The Biggest LBO Of All Time
Barack Obama likes to say words should mean something. He is absolutely right. Words should mean what the generally accepted dictionaries say they mean. Personally I have never cared much for the labels conservative or liberal as applied to the two contending political philosophies that have dominated American politics for nearly a century and a half. That is because the working definitions of each don't really address competing points of view.
There is usually more than one definition of most words. Webster's College Dictionary did not have a good definition of Conservatism, so I referenced the Merriam-Webster Online Dictionary for a better one. Their definition of Conservatism that seemed most appropriate to me is "a political party based on tradition and social stability, stressing established institutions, and preferring gradual development to abrupt change, specifically, such a philosophy calling for lower taxes, limited government regulation of business and investment, a strong national defense, and individual responsibility."
Liberalism, according to Webster's College Dictionary, is "a political and social philosophy advocating individual freedom, representational forms of government, progress and reform, and protection of civil liberties." Except for the lunatic fringes, most folks in America would not see any major contradictions in either definition, and would advocate both of those philosophies. Maybe its just me, but I don't see where conservativism and liberalism are mutually exclusive. It seems one can be both liberal and conservative if they believe in the idea's contained in the respective definitions. To me, Liberalism means a nation based on democracy and freedom. Conservatism means we want to keep it that way.
When it comes to definitions of economic systems, however, there are distinct and profound differences. Webster's College Dictionary defines Capitalism as "an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations." Socialism is "a theory or system of social organization in which the means of production and distribution of goods are owned and controlled collectively or by the government." Those are certainly distinct and opposing economic philosophies. Communism takes it a step further, defined as "a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party."
It has long been assumed we are all capitalists in America, except again for that lunatic fringe. Maybe it would be a good time to sit down and consider what is going on in America today. What we may be witnessing is the biggest leveraged buy-out of all time as the government is clearly taking over our economy, and perhaps the end of capitalism as we have known it.
Private equity firms maintain that their business structure is a more efficient way of financing and managing large enterprises than public companies whose shares trade on a stock market and are owned by public individuals and institutions. In the private equity structure, all decisions can be made by a select few who answer to no one. They have relative freedom from regulation, and do not have to open themselves to outside monitoring by shareholders or financial journalists. They accomplish their buy-outs by using massive amounts of borrowed money, and the leverage allows them to become fabulously wealthy.
Basically, the growth of private equity is the economic equivalent of a political retreat from democracy to a small but powerful aristocracy. Instead of ownership by many and responsibility of management to generate results for the wide spectrum of stakeholders, it becomes ownership and unaccountable decision making for the benefit of the few. In the private equity world, companies (and the economy) are at the mercy of the top executives, just like the politburo in a communist country.
The Democratic Party and its wealthy supporters understand this. And no, Barack Obama was not the candidate, and now president, from Main Street as the Democrats like to propagandize. Nor was he the stealth candidate from Manchuria as some Republicans like to believe. He was not even the candidate from MLK Boulevard or Wall Street. He was the candidate from the billionaries of Greenwich and East Hampton, and the media moguls of Bel Air. And he was the candidate of the career bureaucrats revolving between government posts and Ivy League faculties or policy institutes as well as special interest group lobbyists residing in the wealthy counties surrounding Washington, D.C. After all, who is getting bailed out from their billion dollar mistakes, who is taking over the top jobs in government, and who is first in line to grab all the goodies the Obama regime is handing out.
The folks at the top of the financial and government food chain are working hard, and succeeding, in doing a gradual leveraged buy-out of the American economy. Starting with the largest financial organizations and automobile makers they will soon move on to the health care and energy industries. This stealth LBO effectively takes the economy private, producing a giant enterprise totally controlled by a self-appointed, unaccountable aristocracy - and the irony is they are doing it not with their own money but with taxpayer's money.
I don't know what the proper political label is for those now in charge of the U.S. government. They definitely do not fit the definition of conservatives, and given their disdain for the people who elected them I do not think they qualify as liberals, either. What they do seem to be working toward is a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party. And that folks, is the definition of communism.
There is usually more than one definition of most words. Webster's College Dictionary did not have a good definition of Conservatism, so I referenced the Merriam-Webster Online Dictionary for a better one. Their definition of Conservatism that seemed most appropriate to me is "a political party based on tradition and social stability, stressing established institutions, and preferring gradual development to abrupt change, specifically, such a philosophy calling for lower taxes, limited government regulation of business and investment, a strong national defense, and individual responsibility."
Liberalism, according to Webster's College Dictionary, is "a political and social philosophy advocating individual freedom, representational forms of government, progress and reform, and protection of civil liberties." Except for the lunatic fringes, most folks in America would not see any major contradictions in either definition, and would advocate both of those philosophies. Maybe its just me, but I don't see where conservativism and liberalism are mutually exclusive. It seems one can be both liberal and conservative if they believe in the idea's contained in the respective definitions. To me, Liberalism means a nation based on democracy and freedom. Conservatism means we want to keep it that way.
When it comes to definitions of economic systems, however, there are distinct and profound differences. Webster's College Dictionary defines Capitalism as "an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations." Socialism is "a theory or system of social organization in which the means of production and distribution of goods are owned and controlled collectively or by the government." Those are certainly distinct and opposing economic philosophies. Communism takes it a step further, defined as "a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party."
It has long been assumed we are all capitalists in America, except again for that lunatic fringe. Maybe it would be a good time to sit down and consider what is going on in America today. What we may be witnessing is the biggest leveraged buy-out of all time as the government is clearly taking over our economy, and perhaps the end of capitalism as we have known it.
Private equity firms maintain that their business structure is a more efficient way of financing and managing large enterprises than public companies whose shares trade on a stock market and are owned by public individuals and institutions. In the private equity structure, all decisions can be made by a select few who answer to no one. They have relative freedom from regulation, and do not have to open themselves to outside monitoring by shareholders or financial journalists. They accomplish their buy-outs by using massive amounts of borrowed money, and the leverage allows them to become fabulously wealthy.
Basically, the growth of private equity is the economic equivalent of a political retreat from democracy to a small but powerful aristocracy. Instead of ownership by many and responsibility of management to generate results for the wide spectrum of stakeholders, it becomes ownership and unaccountable decision making for the benefit of the few. In the private equity world, companies (and the economy) are at the mercy of the top executives, just like the politburo in a communist country.
The Democratic Party and its wealthy supporters understand this. And no, Barack Obama was not the candidate, and now president, from Main Street as the Democrats like to propagandize. Nor was he the stealth candidate from Manchuria as some Republicans like to believe. He was not even the candidate from MLK Boulevard or Wall Street. He was the candidate from the billionaries of Greenwich and East Hampton, and the media moguls of Bel Air. And he was the candidate of the career bureaucrats revolving between government posts and Ivy League faculties or policy institutes as well as special interest group lobbyists residing in the wealthy counties surrounding Washington, D.C. After all, who is getting bailed out from their billion dollar mistakes, who is taking over the top jobs in government, and who is first in line to grab all the goodies the Obama regime is handing out.
The folks at the top of the financial and government food chain are working hard, and succeeding, in doing a gradual leveraged buy-out of the American economy. Starting with the largest financial organizations and automobile makers they will soon move on to the health care and energy industries. This stealth LBO effectively takes the economy private, producing a giant enterprise totally controlled by a self-appointed, unaccountable aristocracy - and the irony is they are doing it not with their own money but with taxpayer's money.
I don't know what the proper political label is for those now in charge of the U.S. government. They definitely do not fit the definition of conservatives, and given their disdain for the people who elected them I do not think they qualify as liberals, either. What they do seem to be working toward is a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party. And that folks, is the definition of communism.
Tuesday, April 14, 2009
Civilization Lost
There were several articles in today's Wall Street Journal (April 14, 2008) that makes one wonder about the state of our society. One was about elderly folks on fixed incomes throughout the country who are losing their homes through foreclosure because slick talking mortgage brokers persuaded them to unnecessarily refinance mortgages, obtain reverse mortgages or take out home equity loans. Many of these people had lived for decades in their homes and had built up substantial equity or had completely paid them off. A lot of them were victims of fraud as the unscrupulous brokers filed false loan applications and did not advise the homeowner of the high fees, adjustable rates and other explosive terms involved in the refinancings. Since the borrowers incomes are so low, usually just monthly payments from social security, they do not qualify for government sponsored mortgage relief programs.
On the flip side, we read that Goldman Sachs, a company that received bail-out funds (and generated a sizable first quarter profit), is issuing $5 billion of new shares so they can pay the government back. While it is admirable they want to pay back the money they apparently didn't need, the reason for doing so is to release their executives from the compensation restraints imposed by the government on financial organizations receiving bail-out funds. This will allow them to quickly increase their pay from the paltry minimum of $1 million that nearly a thousand of them received last year to their more traditional multi-million dollar levels.
There is something very wrong with a country that uses taxpayer money to bail out millionaire bankers and financial advisors while letting low and middle class folks lose their modest homes to foreclosure, particularly when the foreclosures are the result of financial fraud.
Another article discussed how pilots at American Airlines are demanding that their average salaries and benefits be increased by 50% from the current $225,000 per year to $337,500 per year. Granted that airline pilots have some of the most awesome responsibilities of any occupation (certainly significantly more than Goldman Sachs investment bankers), but is this a good time to be demanding big increases given today's economic environment? And for any occupation, when is enough enough?
Perhaps it is time for Americans to pause and reflect on what our country's culture and principles have evolved into. We are no longer a society that believes in fairness, integrity, compassion and justice. Americans are now all about unrestrained greed, self-centered narcissism and gluttonous hedonism. We demand it all and we demand it now, and the hell with everyone else. And when the bubbles burst it seems to me that our government could have displayed a little more compassion and support for the victims of the financial frauds and Wall Street excesses by helping those lower and middle class folks who did nothing wrong instead of bailing out and sustaining the lifestyles of the rich and famous.
On the flip side, we read that Goldman Sachs, a company that received bail-out funds (and generated a sizable first quarter profit), is issuing $5 billion of new shares so they can pay the government back. While it is admirable they want to pay back the money they apparently didn't need, the reason for doing so is to release their executives from the compensation restraints imposed by the government on financial organizations receiving bail-out funds. This will allow them to quickly increase their pay from the paltry minimum of $1 million that nearly a thousand of them received last year to their more traditional multi-million dollar levels.
There is something very wrong with a country that uses taxpayer money to bail out millionaire bankers and financial advisors while letting low and middle class folks lose their modest homes to foreclosure, particularly when the foreclosures are the result of financial fraud.
Another article discussed how pilots at American Airlines are demanding that their average salaries and benefits be increased by 50% from the current $225,000 per year to $337,500 per year. Granted that airline pilots have some of the most awesome responsibilities of any occupation (certainly significantly more than Goldman Sachs investment bankers), but is this a good time to be demanding big increases given today's economic environment? And for any occupation, when is enough enough?
Perhaps it is time for Americans to pause and reflect on what our country's culture and principles have evolved into. We are no longer a society that believes in fairness, integrity, compassion and justice. Americans are now all about unrestrained greed, self-centered narcissism and gluttonous hedonism. We demand it all and we demand it now, and the hell with everyone else. And when the bubbles burst it seems to me that our government could have displayed a little more compassion and support for the victims of the financial frauds and Wall Street excesses by helping those lower and middle class folks who did nothing wrong instead of bailing out and sustaining the lifestyles of the rich and famous.
Sunday, March 08, 2009
The Blame Game
It seems that in order to succeed in politics one has to become a master of the blame game. Politicians have a great talent for causing chaos and disaster, then blaming their political opponents for the damage. Barney Frank, the gender challenged Representative from Massachussetts who is chairman of the House Financial Services Committee, recently said he thinks the people who are responsible for the financial market and economic collapse should be tried as criminals. That is a good idea. Barney Frank and many of his Democratic Party masters of disaster cohorts would be at the top of the list.
Certainly there is plenty of blame to go around. That includes the folks at Fannie Mae, Freddie Mac, Countrywide, AIG, Bear Stearns, Lehman Brothers, Merrill Lynch and other debt crazed financial institutions that created the gratuitous, pointless, toxic investment vehicles that fueled the catastrophic financial pandemic, and then traded among themselves for artificial profits. It includes the intellectually arrogant and common sense challenged quantitative geniuses from elite Ivy League academic institutions who found their way to Wall Street hedge funds and other money management organizations and had the audacity to think they could create complex strategies to control the ever growing risk of massively leveraged financial instruments that served no purpose other than to enrich themselves. And don't forget the patrician, useless, rubber stamping Boards of Directors at financial institutions whose members get paid large sums of money to attend their all expense paid quarterly circle jerks to party and ignore their duties of representing shareholders interests and providing management oversight.
But the whole disaster would never have gotten this out of control without the aid, support and encouragement of our honorable public servants in Congress and those throughout the federal bureaucracies charged with oversight, regulation and control of the financial system. Certainly George Bush bears responsibility in that it happened on his watch. He is responsible in the sense that the Republican Congress in the first six years of his presidency spent money like drunken sailors, or in other words, just like Democrats always have - and George let them do it. He is responsible in that he trusted the competence and abilities of his economic advisers as all presidents do - and that was a mistake. And he is responsible because he expected the financial system regulators at the SEC and FDIC to do their jobs - but they didn't.
Consequently, economic activity around the world has come to an abrupt halt. Global stock markets plunged more than 50% in less than a year and a half. The meltdown of over-leveraged financial institutions started in the good old USA, but the damage has spread like an out of control forest fire. Naturally, Barney Frank and his esteemed Democratic colleagues in Congress are doing their utmost best to convince the public that it is all George Bush's fault.
It has become standard operating procedure for politicians to claim false credit for actions that have a positive outcome, if there ever are any, and deny any responsibility what-so-ever for anything that turns out bad. But in this case they go too far. Barney and his buddies were at the epicenter of forcing lenders to make sub-prime loans to borrowers who had very little prospect of ever paying the money back. Now they want to revise the facts and put George W. Bush in the public's crosshairs rather than take any responsibility for their destructive legislative activities.
But it wasn't George Bush who produced or signed the Community Re-investment Act of 1977 that ordered lenders to ease their lending requirements to make high risk loans to borrowers who normally would not qualify. That was the Democratic Party dominated Congress and President Jimmy Carter. And it wasn't George Bush who relaxed the rules even further in 1995 that led to the creative no-down payment, low initial adjustable rate, balloon, interest only, no income no asset mortgages and liar loans that were at the heart of the meltdown. That would be Bill Clinton.
It wasn't George Bush who was responsible for the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which repealed part of the Glass-Steagall Act of 1933 and allowed commercial banks, investment banks, brokerage firms, insurance companies and investment advisory firms to combine and create financial institutions that were judged to be "too big to fail." That was Senator Phil Gramm, Representative Jim Leach and Representative Thomas Bliley, all three Republicans, and President Bill Clinton who signed it.
It wasn't George Bush who responded to legislative actions calling for regulatory reforms (Federal Housing Enterprise Regulatory Act of 2005) introduced by Republican members of Congress to recognize and address the high risk nature of the portfolios of Fannie Mae and Freddie Mac by denying these quasi-government institutions were in any kind of trouble right up to the day of implosion, and joining their Democratic colleagues in killing the bill. No, that was Barney Frank and Christopher Dodd, now the Democratic Chairmen of the financial industry oversight committees of the House and Senate, respectively, and each recipients of substantial campaign contributions from the two federal quasi-agencies.
It wasn't George Bush who kept interest rates too low too long and encouraged the credit markets to expand exponentially, creating the superfluous speculative credit based derivative securities that generated home price inflation and caused leverage throughout the financial system to rise to levels that guaranteed disaster at the first sight of economic slowdown. That would be Alan Greenspan, who served over 18 years as Chairman of the Federal Reserve Board, and his successor Ben Bernanke. The Federal Reserve is the central bank of the United States and is subject to oversight by and reports to Congress.
Of course the Democrats are also blaming George Bush for the continuing collapse of the stock market and deteriorating economic conditions that have accompanied the first months of the Obama regime. What they don't want Americans to know is that at first the prospect and then the reality of a government totally under the control of Democrats caused a moderate recession and a serious but containable bear market to turn into an unprecedented disintegration of asset values.
Through September of 2008 the Dow Jones Industrial Average was down 25% from its peak in October, 2007, a typical cyclical drop in a bear market. In late September it became apparent Barack Obama was going to be the next president, and Democrats would be in total control of Congress. From that time on the market plunged another 40%, with the bulk of that drop coming after Obama made it known his redistribution and anti-capitalist policies would be even worse than imagined. But of course the Democrats and their die-hard supporters still want to blame all of this on George Bush.
But it isn't George Bush who keeps throwing even more bail-out money at failing financial institutions and constantly changing the rules so no potential investors can make prudent decisions. That would be the financial stewards appointed by Barack Obama, who in many cases are the friends, former colleagues and lobbying targets of those being bailed out.
It isn't George Bush who announced more government intervention in the financial markets by giving more powers to the Treasury, Fed and FDIC to unilaterally use taxpayer dollars to provide bail-out funding to businesses that should be allowed to reorganize or go out of business under the Chapter 11 and Chapter 7 bankruptcy laws that have been in place for decades, which would let capitalism function as intended without politics, government and taxpayer money being involved. That would be Tim Geithner with the approval of Barack Obama.
It isn't George Bush who plans massive new spending for partisan Democratic Party favorite programs that will drive federal spending to over 28% of GDP (up from the traditional level of around 20%) and quadruple the budget deficit this year, with no end to the rapid expansion in sight. That is Barack Obama.
It wasn't George Bush who directed the Fed to print money by having them buy billions of dollars of Treasury bills, thereby providing the fuel for inflation, killing the dollar and causing major foreign holders of U.S. government debt to question the need for an alternative reserve currency. That was Barack Obama.
It wasn't George Bush who made approval of the ironically "newspeak' named Employee Free Choice Act his top priority, thus denying workers the right to secret ballots in labor union organizing campaigns. This payoff to the Democratic Party's most corrupt supporters is a huge job killer because it restrains companies from hiring new workers, leads to higher costs for maintaining existing ones, produces increased operating inefficiencies and results in a lack of competitiveness for U. S. companies in world markets, encouraging many companies to move manufacturing plants overseas. No, that would be Barack Obama.
It isn't George Bush who plans to raise capital gains taxes on the people who have the money to invest in American industry, taking away incentives to invest and thereby denying productive businesses the capital they need to get the country moving again to restore and maintain our prosperity. That, again, is Barack Obama.
It wasn't George Bush who said he was going to veto every earmark and then ignore a record number of new ones in the first spending bill sent him by Congress. That was Barack Obama.
It isn't George Bush who publicly proclaims the intent to redistribute income by raising taxes on the productive members of our society to give to the unproductive, signalling a move away from the historically successful economic principles of capitalism, private enterprise and free markets to the failed underachieving philosophy of state controlled socialism. Sorry, it is Barack Obama.
It wasn't George Bush who signalled our vulnerable allies in Eastern Europe we are untrustworthy partners in global security pacts by declaring our intention to renege on missile defense systems designed to provide security to these fledgling democracies, allowing the reemerging predator of Russia to reassert its influence and potential domination. That was Barack Obama.
It wasn't George Bush who threatens the security of the more restrained states of the Middle East by proposing to re-engage diplomacy with Iran, providing that feared country and its psychotic ayatollah's the opportunity to gain more power and influence at the expense of the friendlier Sunni dominated moderates.
It isn't George Bush who has signalled an intent to abrogate trade agreements and introduce new restraints against trading partners, raising the spectre of reciprocal actions and protectionist policies that could lead to a devastating contraction in world trade. Again, that is Barack Obama.
No wonder the financial markets and ordinary Americans are scared shitless. This new government is rejecting and completely dismantling an economic and social system that has been successful for over 230 years. The folks now in charge can blame anyone they want for America's current predicament. But they need to look in the mirror to see the real perps.
By the way, does it ever occur to anyone what type of people president's have to deal with when they are trying to get government bureaucracies to function. Generally, conservatives and moderates don't work for government. They believe in free markets and are engaged in productive private enterprise. It is typically the folks who believe government is the answer rather than the problem who comprise the bureaucracy. They are the beneficiaries of government spending, not the providers of the funding. They are political activists rather than producers of goods and services. They are obstacles to the progress that free and open markets generate. It is difficult for capitalism to function effectively when the infrastructure of government is populated by socialists.
Certainly there is plenty of blame to go around. That includes the folks at Fannie Mae, Freddie Mac, Countrywide, AIG, Bear Stearns, Lehman Brothers, Merrill Lynch and other debt crazed financial institutions that created the gratuitous, pointless, toxic investment vehicles that fueled the catastrophic financial pandemic, and then traded among themselves for artificial profits. It includes the intellectually arrogant and common sense challenged quantitative geniuses from elite Ivy League academic institutions who found their way to Wall Street hedge funds and other money management organizations and had the audacity to think they could create complex strategies to control the ever growing risk of massively leveraged financial instruments that served no purpose other than to enrich themselves. And don't forget the patrician, useless, rubber stamping Boards of Directors at financial institutions whose members get paid large sums of money to attend their all expense paid quarterly circle jerks to party and ignore their duties of representing shareholders interests and providing management oversight.
But the whole disaster would never have gotten this out of control without the aid, support and encouragement of our honorable public servants in Congress and those throughout the federal bureaucracies charged with oversight, regulation and control of the financial system. Certainly George Bush bears responsibility in that it happened on his watch. He is responsible in the sense that the Republican Congress in the first six years of his presidency spent money like drunken sailors, or in other words, just like Democrats always have - and George let them do it. He is responsible in that he trusted the competence and abilities of his economic advisers as all presidents do - and that was a mistake. And he is responsible because he expected the financial system regulators at the SEC and FDIC to do their jobs - but they didn't.
Consequently, economic activity around the world has come to an abrupt halt. Global stock markets plunged more than 50% in less than a year and a half. The meltdown of over-leveraged financial institutions started in the good old USA, but the damage has spread like an out of control forest fire. Naturally, Barney Frank and his esteemed Democratic colleagues in Congress are doing their utmost best to convince the public that it is all George Bush's fault.
It has become standard operating procedure for politicians to claim false credit for actions that have a positive outcome, if there ever are any, and deny any responsibility what-so-ever for anything that turns out bad. But in this case they go too far. Barney and his buddies were at the epicenter of forcing lenders to make sub-prime loans to borrowers who had very little prospect of ever paying the money back. Now they want to revise the facts and put George W. Bush in the public's crosshairs rather than take any responsibility for their destructive legislative activities.
But it wasn't George Bush who produced or signed the Community Re-investment Act of 1977 that ordered lenders to ease their lending requirements to make high risk loans to borrowers who normally would not qualify. That was the Democratic Party dominated Congress and President Jimmy Carter. And it wasn't George Bush who relaxed the rules even further in 1995 that led to the creative no-down payment, low initial adjustable rate, balloon, interest only, no income no asset mortgages and liar loans that were at the heart of the meltdown. That would be Bill Clinton.
It wasn't George Bush who was responsible for the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, which repealed part of the Glass-Steagall Act of 1933 and allowed commercial banks, investment banks, brokerage firms, insurance companies and investment advisory firms to combine and create financial institutions that were judged to be "too big to fail." That was Senator Phil Gramm, Representative Jim Leach and Representative Thomas Bliley, all three Republicans, and President Bill Clinton who signed it.
It wasn't George Bush who responded to legislative actions calling for regulatory reforms (Federal Housing Enterprise Regulatory Act of 2005) introduced by Republican members of Congress to recognize and address the high risk nature of the portfolios of Fannie Mae and Freddie Mac by denying these quasi-government institutions were in any kind of trouble right up to the day of implosion, and joining their Democratic colleagues in killing the bill. No, that was Barney Frank and Christopher Dodd, now the Democratic Chairmen of the financial industry oversight committees of the House and Senate, respectively, and each recipients of substantial campaign contributions from the two federal quasi-agencies.
It wasn't George Bush who kept interest rates too low too long and encouraged the credit markets to expand exponentially, creating the superfluous speculative credit based derivative securities that generated home price inflation and caused leverage throughout the financial system to rise to levels that guaranteed disaster at the first sight of economic slowdown. That would be Alan Greenspan, who served over 18 years as Chairman of the Federal Reserve Board, and his successor Ben Bernanke. The Federal Reserve is the central bank of the United States and is subject to oversight by and reports to Congress.
Of course the Democrats are also blaming George Bush for the continuing collapse of the stock market and deteriorating economic conditions that have accompanied the first months of the Obama regime. What they don't want Americans to know is that at first the prospect and then the reality of a government totally under the control of Democrats caused a moderate recession and a serious but containable bear market to turn into an unprecedented disintegration of asset values.
Through September of 2008 the Dow Jones Industrial Average was down 25% from its peak in October, 2007, a typical cyclical drop in a bear market. In late September it became apparent Barack Obama was going to be the next president, and Democrats would be in total control of Congress. From that time on the market plunged another 40%, with the bulk of that drop coming after Obama made it known his redistribution and anti-capitalist policies would be even worse than imagined. But of course the Democrats and their die-hard supporters still want to blame all of this on George Bush.
But it isn't George Bush who keeps throwing even more bail-out money at failing financial institutions and constantly changing the rules so no potential investors can make prudent decisions. That would be the financial stewards appointed by Barack Obama, who in many cases are the friends, former colleagues and lobbying targets of those being bailed out.
It isn't George Bush who announced more government intervention in the financial markets by giving more powers to the Treasury, Fed and FDIC to unilaterally use taxpayer dollars to provide bail-out funding to businesses that should be allowed to reorganize or go out of business under the Chapter 11 and Chapter 7 bankruptcy laws that have been in place for decades, which would let capitalism function as intended without politics, government and taxpayer money being involved. That would be Tim Geithner with the approval of Barack Obama.
It isn't George Bush who plans massive new spending for partisan Democratic Party favorite programs that will drive federal spending to over 28% of GDP (up from the traditional level of around 20%) and quadruple the budget deficit this year, with no end to the rapid expansion in sight. That is Barack Obama.
It wasn't George Bush who directed the Fed to print money by having them buy billions of dollars of Treasury bills, thereby providing the fuel for inflation, killing the dollar and causing major foreign holders of U.S. government debt to question the need for an alternative reserve currency. That was Barack Obama.
It wasn't George Bush who made approval of the ironically "newspeak' named Employee Free Choice Act his top priority, thus denying workers the right to secret ballots in labor union organizing campaigns. This payoff to the Democratic Party's most corrupt supporters is a huge job killer because it restrains companies from hiring new workers, leads to higher costs for maintaining existing ones, produces increased operating inefficiencies and results in a lack of competitiveness for U. S. companies in world markets, encouraging many companies to move manufacturing plants overseas. No, that would be Barack Obama.
It isn't George Bush who plans to raise capital gains taxes on the people who have the money to invest in American industry, taking away incentives to invest and thereby denying productive businesses the capital they need to get the country moving again to restore and maintain our prosperity. That, again, is Barack Obama.
It wasn't George Bush who said he was going to veto every earmark and then ignore a record number of new ones in the first spending bill sent him by Congress. That was Barack Obama.
It isn't George Bush who publicly proclaims the intent to redistribute income by raising taxes on the productive members of our society to give to the unproductive, signalling a move away from the historically successful economic principles of capitalism, private enterprise and free markets to the failed underachieving philosophy of state controlled socialism. Sorry, it is Barack Obama.
It wasn't George Bush who signalled our vulnerable allies in Eastern Europe we are untrustworthy partners in global security pacts by declaring our intention to renege on missile defense systems designed to provide security to these fledgling democracies, allowing the reemerging predator of Russia to reassert its influence and potential domination. That was Barack Obama.
It wasn't George Bush who threatens the security of the more restrained states of the Middle East by proposing to re-engage diplomacy with Iran, providing that feared country and its psychotic ayatollah's the opportunity to gain more power and influence at the expense of the friendlier Sunni dominated moderates.
It isn't George Bush who has signalled an intent to abrogate trade agreements and introduce new restraints against trading partners, raising the spectre of reciprocal actions and protectionist policies that could lead to a devastating contraction in world trade. Again, that is Barack Obama.
No wonder the financial markets and ordinary Americans are scared shitless. This new government is rejecting and completely dismantling an economic and social system that has been successful for over 230 years. The folks now in charge can blame anyone they want for America's current predicament. But they need to look in the mirror to see the real perps.
By the way, does it ever occur to anyone what type of people president's have to deal with when they are trying to get government bureaucracies to function. Generally, conservatives and moderates don't work for government. They believe in free markets and are engaged in productive private enterprise. It is typically the folks who believe government is the answer rather than the problem who comprise the bureaucracy. They are the beneficiaries of government spending, not the providers of the funding. They are political activists rather than producers of goods and services. They are obstacles to the progress that free and open markets generate. It is difficult for capitalism to function effectively when the infrastructure of government is populated by socialists.
Monday, February 16, 2009
Why Not Try Something Productive?
Forty years ago Americans walked on the moon. The world watched in awe. It was a technological triumph beyond comprehension. Everyone on the planet, even our acknowledged adversaries in the Soviet Union and China, set aside their differences and on that day, for a brief moment, global harmony was realized. We were all citizens of the world basking in man's achievements, all members of the same human race. American technology and science had proved that anything was possible.
An extraordinary by-product of the space program was the creation of a multitude of new technologies instrumental in the development of nearly every major product used today. Many of the innovations in data processing, communications, medical instruments, power generation and other life improving advances had their genesis in man's endeavors to explore space. Products generated from American initiative and ingenuity were distributed throughout the world, leading to unprecedented gains in global living standards that benefitted all mankind.
But today it seems that nothing is possible. Despite the technological progress of the last four decades, the common accord that was briefly enjoyed by the people of the world as the space program reached its zenith quickly dissipated as earthly realities and base human instincts reclaimed their natural order. Human beings returned to the petty jealousies, irrational hatred's and inhuman atrocities against others that have long been commonplace. Powerful Western countries that advocate human rights as well as global organizations chartered to bring peace and stability to area's of conflict idly stand by while people continue to withdraw into the cultural, religious and tribal shells that are tearing the world apart.
Within many nations, changing demographics and widening political differences among diverse ethnic groups and ideological opponents is creating intolerance, lack of respect for others and dangerous polarization of civilized societies. These divisions are now being compounded by the inevitable implosion of global financial markets and associated collapse in economic activity caused by out of control accumulation of massive debt leverage and imprudent speculation. Naturally this is leading to rising business failures, increased unemployment, exploding government budget deficits, and dangerously threatening the system of international commerce and global capital flows.
The world is in a self-reinforcing downward spiral that will lead to disastrous consequences unless rational action taken by responsible government's soon prevail. Unfortunately, most of the policy actions taken to date by major governments have been the wrong ones, particularly in the United States. Boosting unemployment spending and providing for the basic needs of those displaced by business failures and lay-offs is certainly required. But massive spending programs to fund bail-outs, nationalization of industries and relief to folks who made bad decisions is doomed to failure. Trying to solve a problem created by too much debt with enormous amounts of more debt will not work.
Perhaps a bold challenge to all industrial countries of the world to initiate a quest for new scientific and technological achievements would wake up the entrepreneurial and creative hormones, halt the economic stupor and stimulate a vigorous expansion of discovery and invention. Every major power on earth has an educated, rational nucleus of citizens that could be instrumental in joining together in a global mission that could again challenge all of the globe's people to work together to make the world a better place.
In this time of global economic adversity, instead of throwing massive amounts of money down the drain to support imprudent investors, indebted consumers and insolvent financial institutions at the expense of responsible and prudent citizens, government leaders could challenge the industrial world to launch a cooperative new venture to explore the unknown, renew our efforts to conquer the solar system, and in the process generate meaningful new jobs throughout the world, create new technologies that advance global standards of living, and maybe generate international support, teamwork and progress through common interests. Maybe it is possible a joint effort of the scientific communities of each country that has the ability to contribute to renew the exploration of space could work such a miracle.
An extraordinary by-product of the space program was the creation of a multitude of new technologies instrumental in the development of nearly every major product used today. Many of the innovations in data processing, communications, medical instruments, power generation and other life improving advances had their genesis in man's endeavors to explore space. Products generated from American initiative and ingenuity were distributed throughout the world, leading to unprecedented gains in global living standards that benefitted all mankind.
But today it seems that nothing is possible. Despite the technological progress of the last four decades, the common accord that was briefly enjoyed by the people of the world as the space program reached its zenith quickly dissipated as earthly realities and base human instincts reclaimed their natural order. Human beings returned to the petty jealousies, irrational hatred's and inhuman atrocities against others that have long been commonplace. Powerful Western countries that advocate human rights as well as global organizations chartered to bring peace and stability to area's of conflict idly stand by while people continue to withdraw into the cultural, religious and tribal shells that are tearing the world apart.
Within many nations, changing demographics and widening political differences among diverse ethnic groups and ideological opponents is creating intolerance, lack of respect for others and dangerous polarization of civilized societies. These divisions are now being compounded by the inevitable implosion of global financial markets and associated collapse in economic activity caused by out of control accumulation of massive debt leverage and imprudent speculation. Naturally this is leading to rising business failures, increased unemployment, exploding government budget deficits, and dangerously threatening the system of international commerce and global capital flows.
The world is in a self-reinforcing downward spiral that will lead to disastrous consequences unless rational action taken by responsible government's soon prevail. Unfortunately, most of the policy actions taken to date by major governments have been the wrong ones, particularly in the United States. Boosting unemployment spending and providing for the basic needs of those displaced by business failures and lay-offs is certainly required. But massive spending programs to fund bail-outs, nationalization of industries and relief to folks who made bad decisions is doomed to failure. Trying to solve a problem created by too much debt with enormous amounts of more debt will not work.
Perhaps a bold challenge to all industrial countries of the world to initiate a quest for new scientific and technological achievements would wake up the entrepreneurial and creative hormones, halt the economic stupor and stimulate a vigorous expansion of discovery and invention. Every major power on earth has an educated, rational nucleus of citizens that could be instrumental in joining together in a global mission that could again challenge all of the globe's people to work together to make the world a better place.
In this time of global economic adversity, instead of throwing massive amounts of money down the drain to support imprudent investors, indebted consumers and insolvent financial institutions at the expense of responsible and prudent citizens, government leaders could challenge the industrial world to launch a cooperative new venture to explore the unknown, renew our efforts to conquer the solar system, and in the process generate meaningful new jobs throughout the world, create new technologies that advance global standards of living, and maybe generate international support, teamwork and progress through common interests. Maybe it is possible a joint effort of the scientific communities of each country that has the ability to contribute to renew the exploration of space could work such a miracle.
Wednesday, February 11, 2009
Yes, It Can Happen Here
In any society, no matter how advanced, complacency and ignorance can both be fatal to survival. Some Americans seem to believe our country is too strong and powerful to ever be vanquished and subjugated by foreign aggressors. Others believe that committed adversaries intent on destroying our way of life either do not exist or can be appeased through dialogue and negotiation. These folks see no need to spend our resources on developing and maintaining a strong defense capability.
Perhaps they are not aware of human history, and the part luck played in several turning points of military conflict. In June of 1942, if American scout planes had not spotted the Japanese carriers at the Battle of Midway before their scout planes found ours, we would all be speaking Japanese today. If Adolf Hitler had focused on defeating Great Britain rather than launching an attack on the Soviet Union in 1941, creating a disastrous two front war, perhaps we would all now be speaking German.
Throughout history the centers of power and influence have always been changing. Today the predominance of the United States is arguably on the wane as China, India and Russia are rapidly developing into formidable competitors, both militarily and economically. Combine that with the fact Europe spends very little on defense, is becoming muslimized and cannot defend itself. Their only option if threatened is to capitulate to external or internal threats unless the United States comes to their rescue as in the past.
The proliferation of weapons of mass destruction and the rise of militant Islam has created a much more dangerous world than we have encountered before, whether the threat be state sponsored or contained in difficult to identify and locate terrorist organizations. The United States today clearly confronts risks to our security that our growing more perilous by the day, and complacency and denial of these threats will only ensure that we do not survive the inevitable conflict. We cannot afford to leave our future to the fortunes of chance. We must continue to face reality, and be prepared. We can only hope the pacifists in Washington wake up to the ways of the real world before it is too late.
Perhaps they are not aware of human history, and the part luck played in several turning points of military conflict. In June of 1942, if American scout planes had not spotted the Japanese carriers at the Battle of Midway before their scout planes found ours, we would all be speaking Japanese today. If Adolf Hitler had focused on defeating Great Britain rather than launching an attack on the Soviet Union in 1941, creating a disastrous two front war, perhaps we would all now be speaking German.
Throughout history the centers of power and influence have always been changing. Today the predominance of the United States is arguably on the wane as China, India and Russia are rapidly developing into formidable competitors, both militarily and economically. Combine that with the fact Europe spends very little on defense, is becoming muslimized and cannot defend itself. Their only option if threatened is to capitulate to external or internal threats unless the United States comes to their rescue as in the past.
The proliferation of weapons of mass destruction and the rise of militant Islam has created a much more dangerous world than we have encountered before, whether the threat be state sponsored or contained in difficult to identify and locate terrorist organizations. The United States today clearly confronts risks to our security that our growing more perilous by the day, and complacency and denial of these threats will only ensure that we do not survive the inevitable conflict. We cannot afford to leave our future to the fortunes of chance. We must continue to face reality, and be prepared. We can only hope the pacifists in Washington wake up to the ways of the real world before it is too late.
Monday, February 09, 2009
Reward The Irresponsible, Punish The Prudent
The primary problem of American government as it functions (or disfunctions) today is that politicians routinely facilitate and encourage the unprincipled and the irresponsible while punishing the honest and the prudent. Unfortunately, one thing that never receives any consideration during deliberations in Congress is whether new legislation will be fair and equitable to the public in general rather than serving to benefit specific interest groups. The primary focus is typically to reward particular lobbies and constituents rather than address real problems faced by the citizenry.
Providing incentives and subsidies that affect the few is certainly not fair to everyone, particularly when that action encourages or rewards irresponsible behavior to the detriment of the far greater number of people who act responsibly. Both the enormous government bail-out of the financial system and the massive stimulus program are examples of government actions that are not fair and equitable to the majority of Americans.
The economic problems we face today are the result of an outrageously excessive amount of debt created with the active support of our monetary authorities and the explicit encouragement of elected representatives in Congress. The use of borrowed money that was easily obtainable with favorable payment terms caused the price of assets throughout the economy to rise to unsustainable levels, particularly real estate.
Despite the plunge in prices of homes and other assets, prices still remain too high. Prices must fall to levels that clear the market and naturally balance supply and demand before sustainable economic progress can resume. Providing tax incentives and other targeted stimulus with taxpayer dollars to rescue reckless financial institutions and consumers will result in the maintenance of prices at current inflated levels, causing any bounce from this spending to be short-lived, thereby wasting the massive amounts of money spent on these programs.
Most importantly, the bail-out and stimulus plans do not pass the test of fairness and equity for the majority of citizens. For example, the intent of the Troubled Assets Relief Program (TARP) to rescue the mortgage market is to limit losses on loans made by financial institutions and reduce the prospect of foreclosure for those who paid too much for property by supporting prices above the current real market. This does nothing but reward those who irresponsibly played this game, often because they greedily assumed they were guaranteed to make a profit, while punishing the far greater number of Americans who prudently refrained from these irrational transactions. The response by Congress to the damage caused by it's own mindless policies does nothing but keep prices too high for those who desire to buy a home at a rational price, ensuring that the crisis will be prolonged much longer than necessary and that all the taxpayer dollars carelessly tossed to financial institutions will be gone forever.
Providing incentives and subsidies that affect the few is certainly not fair to everyone, particularly when that action encourages or rewards irresponsible behavior to the detriment of the far greater number of people who act responsibly. Both the enormous government bail-out of the financial system and the massive stimulus program are examples of government actions that are not fair and equitable to the majority of Americans.
The economic problems we face today are the result of an outrageously excessive amount of debt created with the active support of our monetary authorities and the explicit encouragement of elected representatives in Congress. The use of borrowed money that was easily obtainable with favorable payment terms caused the price of assets throughout the economy to rise to unsustainable levels, particularly real estate.
Despite the plunge in prices of homes and other assets, prices still remain too high. Prices must fall to levels that clear the market and naturally balance supply and demand before sustainable economic progress can resume. Providing tax incentives and other targeted stimulus with taxpayer dollars to rescue reckless financial institutions and consumers will result in the maintenance of prices at current inflated levels, causing any bounce from this spending to be short-lived, thereby wasting the massive amounts of money spent on these programs.
Most importantly, the bail-out and stimulus plans do not pass the test of fairness and equity for the majority of citizens. For example, the intent of the Troubled Assets Relief Program (TARP) to rescue the mortgage market is to limit losses on loans made by financial institutions and reduce the prospect of foreclosure for those who paid too much for property by supporting prices above the current real market. This does nothing but reward those who irresponsibly played this game, often because they greedily assumed they were guaranteed to make a profit, while punishing the far greater number of Americans who prudently refrained from these irrational transactions. The response by Congress to the damage caused by it's own mindless policies does nothing but keep prices too high for those who desire to buy a home at a rational price, ensuring that the crisis will be prolonged much longer than necessary and that all the taxpayer dollars carelessly tossed to financial institutions will be gone forever.
Wednesday, February 04, 2009
Beltway Bandits
by Slugzilla
They promise prosperity, they promise great wealth.
They promise security, they promise good health.
They promise us everything money can buy,
But they never come through, it's always a lie.
They claim they are saints, their opponents are liars.
But they're nothing more than thieves for hire.
Power and wealth are their reason for being.
Bribes and corruption are what they believe in.
Avarice and duplicity rule the day.
America is in a state of decay.
Greed is a virtue, Honesty's a sin.
The old values are gone, decadence is in.
They live like kings, and we pay the receipt.
Their lives are nothing but constant deceit.
Pretending to have our interests at heart.
Acting like they care is the easiest part.
The political lizard's, it's plain to see,
Take care of themselves, not you and me.
Pork barrel politics is the name of the game.
It's out of control, there is no shame.
They lie to the public about the course they'll chart.
They say they'll unite us, but they tear us apart.
There is too much hatred, too much hostility.
Too much anger, threatening our liberty.
Throughout all our history men have given their lives,
To keep us all safe, to make sure we thrive.
Our founding fathers took many great risks,
For liberty and justice, not a government like this.
They raise our taxes til' the money's all gone,
Then find someone else to blame it all on.
Their legacy's a bill our children must pay.
May justice be served come judgment day.
It's all bullshit, nothing but lies.
We're beginning to see, we're opening our eyes.
Communities go under, factories die.
Jobs disappear, debts multiply.
Families suffer, and people cry.
But the Bandits in Congress are living high.
They promise prosperity, they promise great wealth.
They promise security, they promise good health.
They promise us everything money can buy,
But they never come through, it's always a lie.
They claim they are saints, their opponents are liars.
But they're nothing more than thieves for hire.
Power and wealth are their reason for being.
Bribes and corruption are what they believe in.
Avarice and duplicity rule the day.
America is in a state of decay.
Greed is a virtue, Honesty's a sin.
The old values are gone, decadence is in.
They live like kings, and we pay the receipt.
Their lives are nothing but constant deceit.
Pretending to have our interests at heart.
Acting like they care is the easiest part.
The political lizard's, it's plain to see,
Take care of themselves, not you and me.
Pork barrel politics is the name of the game.
It's out of control, there is no shame.
They lie to the public about the course they'll chart.
They say they'll unite us, but they tear us apart.
There is too much hatred, too much hostility.
Too much anger, threatening our liberty.
Throughout all our history men have given their lives,
To keep us all safe, to make sure we thrive.
Our founding fathers took many great risks,
For liberty and justice, not a government like this.
They raise our taxes til' the money's all gone,
Then find someone else to blame it all on.
Their legacy's a bill our children must pay.
May justice be served come judgment day.
It's all bullshit, nothing but lies.
We're beginning to see, we're opening our eyes.
Communities go under, factories die.
Jobs disappear, debts multiply.
Families suffer, and people cry.
But the Bandits in Congress are living high.
Friday, December 12, 2008
Paying The Piper - A Financial Recovery Plan
A lot of people did financially stupid things over the last several years by buying homes they could not afford and investing in securities they did not understand. The "I want it all and I want it now" mania of the consuming public clearly overcame prudence and good judgment. In the financial services industry greed, arrogance and deceit triumphed over ethics, responsibility and common sense. And in Washington, D.C., our elected representatives and government bureaucrats not only encouraged the unhealthy orgy of debt accumulation, but mandated it. Now the whole world is paying the price.
It is somewhat understandable that consumers would spend beyond their means when evidence of unlimited prosperity was all around and real estate brokers and financial snake-oil salesmen were providing the means to do it. It seemed as if every American had found the end of the rainbow and discovered the proverbial pot of gold. When the drug store is giving away free candy, it is hard for those who dream of the good life to say no thanks. Consequently, homebuyers at the lower end of the income and educational scale who bought homes for their families to live in with non-standard adjustable rate, balloon payment or interest only mortgages should be cut some slack. The terms of their mortgage loans should be modified to allow them to maintain their homes and eventually fulfill their obligations. But those who definitely should have known better must be held accountable and suffer the consequences.
In a capitalistic society of private property, contracts and explicit laws covering commercial and financial transactions, people and businesses need to be held accountable for their actions in order for the system to function properly. Otherwise, economic activity will stagnate as transactions involving credit, the lifeblood of the American economy, would vanish since no one would trust the counterparties to fulfill their obligations. And that is exactly what is happening today. The credit bomb has exploded, and too many borrowers are insolvent and unable to pay their debts. The American economic system built on trust has been severely damaged.
Efforts are now underway from the same folks who brought this situation upon us to fix the system by bailing out those they consider "too big to fail." The "too big to fail" classification could be defined as those who contributed the most money to the "honorable" elected representatives entrusted with making these decisions. In an amazing display of disregard for what caused the crisis in the first place, they propose to fix the problem of too much debt by pouring more gasoline on the fire. They plan to confiscate more money from taxpayers (driving them deeper into debt to pay for basic necessities) and borrow more money from foreigners to give to the same brilliant captains of Wall Street and corrupt agencies in Washington that created the meltdown in the first place. Only college professors, investment bankers and congressmen could possibly believe the solution to a problem of too much debt is to create more debt.
Perhaps a good question to ask is "Who is really being bailed out?" Is it the average guy on Main Street who goes to work each day, diligently does his job, pays his taxes, provides for his family and doesn't risk their future by speculating in high risk, overleveraged, derivative financial gimmicks that no one really understands? No. He is the guy that gets to pay for the bailout.
It is somewhat understandable that consumers would spend beyond their means when evidence of unlimited prosperity was all around and real estate brokers and financial snake-oil salesmen were providing the means to do it. It seemed as if every American had found the end of the rainbow and discovered the proverbial pot of gold. When the drug store is giving away free candy, it is hard for those who dream of the good life to say no thanks. Consequently, homebuyers at the lower end of the income and educational scale who bought homes for their families to live in with non-standard adjustable rate, balloon payment or interest only mortgages should be cut some slack. The terms of their mortgage loans should be modified to allow them to maintain their homes and eventually fulfill their obligations. But those who definitely should have known better must be held accountable and suffer the consequences.
In a capitalistic society of private property, contracts and explicit laws covering commercial and financial transactions, people and businesses need to be held accountable for their actions in order for the system to function properly. Otherwise, economic activity will stagnate as transactions involving credit, the lifeblood of the American economy, would vanish since no one would trust the counterparties to fulfill their obligations. And that is exactly what is happening today. The credit bomb has exploded, and too many borrowers are insolvent and unable to pay their debts. The American economic system built on trust has been severely damaged.
Efforts are now underway from the same folks who brought this situation upon us to fix the system by bailing out those they consider "too big to fail." The "too big to fail" classification could be defined as those who contributed the most money to the "honorable" elected representatives entrusted with making these decisions. In an amazing display of disregard for what caused the crisis in the first place, they propose to fix the problem of too much debt by pouring more gasoline on the fire. They plan to confiscate more money from taxpayers (driving them deeper into debt to pay for basic necessities) and borrow more money from foreigners to give to the same brilliant captains of Wall Street and corrupt agencies in Washington that created the meltdown in the first place. Only college professors, investment bankers and congressmen could possibly believe the solution to a problem of too much debt is to create more debt.
Perhaps a good question to ask is "Who is really being bailed out?" Is it the average guy on Main Street who goes to work each day, diligently does his job, pays his taxes, provides for his family and doesn't risk their future by speculating in high risk, overleveraged, derivative financial gimmicks that no one really understands? No. He is the guy that gets to pay for the bailout.
Truth is, the folks being bailed out are the mega-rich hedge funds, private equity groups, institutional fund managers, investment bankers and brokers who gained immense wealth by fueling the debt orgy. Now these people, with their mansions in the Hamptons, elegant apartments in New York City and London, luxurious retreats in Aspen and on the French Riviera, 200 foot yachts, memberships in exclusive country clubs, box seats at the professional sports arena's, and magnificent $50 million private jets to whisk them away to enjoy all these immorally gained privileges, want the government to bail them out of their stupid investment mistakes. They proclaim the implosion of debt could not have been foreseen and was not their fault. WRONG!!! Everyone with any common sense and prudence saw it coming.
Everyone who ever learned anything about investing and corporate finance should know that the capital structure of a business is normally comprised of both equity and debt, and each type of capital has different risks and rewards. The holders of corporate debt have a higher claim to the company's assets than do the shareholders. If a company finds itself in a position where it has more debt than assets, the company is insolvent, or bankrupt. The value of the company to shareholders at that point is zero. The more debt a company piles on its balance sheet, the greater the risk of the equity becoming worthless if the company cannot earn a return on assets greater than the cost of its liabilities. This is not rocket science. Anyone who bought shares in a company with lots of debt on its balance sheet should have known they were investing with a greater risk of losing their money, and they don't deserve to be bailed out.
The same goes for commercial banks and government agencies that lend money to people or businesses they know can't pay it back, and for investors who buy securities backed by a package of mortgages they should know will go bust if housing prices stop going up. And it goes for insurance companies (read AIG) that insure buyers of the mortgage backed securities against the default of those securities. Investors that take high risks must suffer the consequences, or there will never be any incentive to stop taking risks that can lead to catastrophic meltdowns.
Furthermore, the current course of action pursued by government authorities to fight the economic meltdown makes absolutely no sense. What good does it do to inject more government money into financial institutions and auto companies, or lowering interest rates to zero? The problem is that consumers are over-extended with too much debt now. They don't want to borrow more. That is why they are not buying anything on credit.
Instead of giving $700 billion to banks, $100 billion to AIG and who knows how much to car makers, which solves nothing and just postpones the inevitable, how about putting the money in the pockets of consumers, preferably through permanent tax cuts. $1 trillion divided by 300 million people is $3,333 for every man, woman and child in America - $13,333 for a family of four. If that money was in the hands of consumers perhaps they would spend it, and get the economy moving again. Giving money to the perpetrators of the crime instead of the folks who can productively use it is utterly absurd.
So what is a fair and equitable solution to the financial crisis America now finds itself in? My plan is as follows -
1. Immediately eliminate the Troubled Asset Relief Plan (TARP), and prohibit any more expenditures to financial institutions or the automobile industry. The only rational solution for these beneficiaries of government (i.e., taxpayer) handouts is Chapter 11 bankruptcy, which allows them to restructure and stay in business if they are viable going concerns.
2. For homeowners, those who bought homes priced under $300,000 should have their mortgage restructured to reflect current, conventional mortgage rates with the principal amount reset to the current market value of the home. Any loss in the restructuring is assumed by the initial lender. If the lender is out of business, the loss is covered by the Financial Disaster Trust Fund discussed below. Owners of homes costing more than $300,000 and anyone who bought them as investment property are SOL, and not eligible for any relief.
3. For lenders, they absorb the losses on the restructurings described in #2 above, and 100% of the loss on defaults on loans still on their books on homes priced over $300,000. If the lender is insolvent as a result of these losses, they enter Chapter 11 bankruptcy and re-organize if viable. As a result of declaring bankruptcy, top management of the lender (everyone making over $250,000 per year) is terminated and not allowed back into the mortgage business for 3 years. Lower level workers compensation is reduced by 20% until the company returns to solvency.
4. All other financial obligations and assets (including but not limited to CDO's, CLO's, CMO's, ETN's, SIV's, credit default swaps, auction rate securities, covered bonds, junk bonds and complex synthetic investment vehicles comprised of leveraged derivatives) are not eligible for relief and left to work themselves out in the marketplace. That is what capitalism and free markets are all about.
5. All financial institutions and over-leveraged corporations that become insolvent as a result of the financial crisis are not eligible for government relief and suffer the consequences of their operating decisions. They declare whichever form of bankruptcy fits their condition, their shares of stock become worthless and bondholders receive the residual payout from the marketable assets. If a more favorable re-organization can be worked out to keep the company going while restructuring the balance sheet, so much the better.
6. Replace all federal regulatory agency executives and bureaucrats who were responsible for monitoring activity in the financial markets and enforcing compliance with applicable laws. This would include the Federal Reserve and SEC, and also quasi-governmental entities such as Fannie Mae and Freddie Mac. Place a maximum annual compensation of $250,000 for these public servants, and ensure that no employee of any regulatory agency maintains a social, financial, or other relationship with regulated parties.
7. Create a Financial Disaster Trust Fund to provide funding for the losses incurred in restructurings pursuant to #2 above. The fund would also be used to augment unemployment payments to all Americans who lost their jobs in the last year, with payments extended for a period of a maximum of five years. It is to be funded by a retroactive tax on all individuals working in the financial services industry as mortgage lenders, residential real estate brokers, investment bankers who packaged mortgages, securities salesmen who sold them, investors who bought them, and executives of the firms that employed them who reported gross income (no credits, deductions or other loopholes that allow them to report low taxable income) over $500,000 in any year between 2001 and 2007, and any government employee and registered government lobbyist with gross income over $250,000 during that same period. The tax would be 80% of the gross income over the designated limit in each and every year it applies. These are generally the folks who caused the problem, and they should be required to pay for the solution. If any funds remain in the Financial Disaster Trust Fund after five years, it is kept by the government and used to reduce the national debt.
8. Make permanent tax cuts across the board now to put more money in the hands of consumers to stimulate spending, and by all means eliminate the expiration of the 2001 and 2003 tax cuts scheduled to occur on January 1, 2011. Offset any increase in the budget deficit with cutbacks in the bloated federal bureaucracy. In three to five years (2012 - 2014), assuming sustainable economic growth has resumed, implement a transition from the current income based tax structure to a consumption based tax system containing no tax preferences of any kind. The consumption based tax is the most fair and equitable to all taxpayers and serves to encourage savings and investment.
These are the basics of the plan. Under no circumstances should those who profited from the mega-leveraging of the financial system be bailed out. The only people the plan doesn't provide fair and equitable treatment for are the sensible and prudent Americans who have been caught up in the collapse, suffering significant losses of jobs and financial resources due to the greed of Wall Street and corruption of Washington, D.C.
Thursday, December 04, 2008
Preventing A Collapse?
Every day it is something new in the government bailout sweepstakes. Yesterday our fearless leaders stopped bouncing off the walls long enough to announce a new plan to provide Treasury backing for securities that will allow banks to grant new mortgages at rates as low as 4.5% in order to revive the housing market. Refinancings will not qualify.
This is egregiously unfair to strapped homeowners who are struggling to do the right thing and pay their debt obligations, often while raising young children, putting food on the table and clothes on their backs, and trying to find enough money to pay for the other essentials of everyday life such as utility bills, gas for the family car and education expenses. In order to provide these basic necessities, many of these people diligently go to work every day to often low paying jobs they are in danger of losing because some overpaid morons in Washington D.C. and corporate executive offices piled too much additional debt on top of an already over-leveraged economy.
Changing the rules any time by creating government directed subsidies, preferences or other bailouts is always unfair to many more people than the new rules are designed to benefit, and inherently inappropriate. Changing the rules on a daily basis just creates even more confusion and gross inequities, and is no way to manage any organization - let alone a national government. In this particular case, if the government does decide it is necessary to take action and interfere in the mortgage markets by creating below market rates of 4.5%, it makes no sense and is clearly unfair to the vast majority of homeowners unless the rate is also allowed to apply for refinancings, accompanied by the waiving of all fees or charges involved in doing so. Only then would there be a degree of equal opportunity and fairness for those who are complying with their contractual and moral duty to pay off their obligations.
Of course, those who have already paid off their mortgage and those who rent or lease receive no benefit from this government generosity at taxpayers expense, and are therefore dumped on by their elected representatives. Besides, where does it say that everybody has to own a home? There is nothing wrong with renting.
Daily announcements of changes in plans to fix the financial markets and stimulate the economy are doing more damage to those two related problems than any other response possibly could. Supposedly this government intervention is intended to prevent the financial system and American economy from collapse. Perhaps if the lords of the gilded halls of Congress and massive edifices of federal bureaucracy inside the DC Beltway would pull their heads out of their asses they might notice that the markets and the economy have already collapsed. Thanks to their panic driven anti-capitalistic maneuvers and rapidly changing quick fixes, they have screwed up the situation and made it much worse than it ever needed to be. Staying the hell out of the way and letting the markets sort it out, as government is supposed to do in a free market economy, would have been and still would be a much better course of action.
This is egregiously unfair to strapped homeowners who are struggling to do the right thing and pay their debt obligations, often while raising young children, putting food on the table and clothes on their backs, and trying to find enough money to pay for the other essentials of everyday life such as utility bills, gas for the family car and education expenses. In order to provide these basic necessities, many of these people diligently go to work every day to often low paying jobs they are in danger of losing because some overpaid morons in Washington D.C. and corporate executive offices piled too much additional debt on top of an already over-leveraged economy.
Changing the rules any time by creating government directed subsidies, preferences or other bailouts is always unfair to many more people than the new rules are designed to benefit, and inherently inappropriate. Changing the rules on a daily basis just creates even more confusion and gross inequities, and is no way to manage any organization - let alone a national government. In this particular case, if the government does decide it is necessary to take action and interfere in the mortgage markets by creating below market rates of 4.5%, it makes no sense and is clearly unfair to the vast majority of homeowners unless the rate is also allowed to apply for refinancings, accompanied by the waiving of all fees or charges involved in doing so. Only then would there be a degree of equal opportunity and fairness for those who are complying with their contractual and moral duty to pay off their obligations.
Of course, those who have already paid off their mortgage and those who rent or lease receive no benefit from this government generosity at taxpayers expense, and are therefore dumped on by their elected representatives. Besides, where does it say that everybody has to own a home? There is nothing wrong with renting.
Daily announcements of changes in plans to fix the financial markets and stimulate the economy are doing more damage to those two related problems than any other response possibly could. Supposedly this government intervention is intended to prevent the financial system and American economy from collapse. Perhaps if the lords of the gilded halls of Congress and massive edifices of federal bureaucracy inside the DC Beltway would pull their heads out of their asses they might notice that the markets and the economy have already collapsed. Thanks to their panic driven anti-capitalistic maneuvers and rapidly changing quick fixes, they have screwed up the situation and made it much worse than it ever needed to be. Staying the hell out of the way and letting the markets sort it out, as government is supposed to do in a free market economy, would have been and still would be a much better course of action.
Thursday, November 13, 2008
Blame It On George - And The Evils Of Capitalism
Apparently the American public has been convinced by the fork-tongued leading lizards of the New American Socialists (a.k.a. the former Democratic Party) and their propagandists in the press that capitalism in general and George Bush in particular are totally responsible for the financial meltdown that has brought our country to its knees in the fall of 2008. I beg to differ, at the risk of confusing the American public with the facts.
Capitalism had very little to do with the current financial crisis, and its not really hard to identify what did -
1. Growing government interference in America's economy and financial markets. Beginning with the Community Re-investment Act (CRA) of 1977, Congress required lenders to loosen credit standards in order to encourage home ownership. In 1995 the rules were relaxed further, with the quasi-government agencies Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) becoming the repository of the loans the original lenders knew could not be paid back. As a result of the incestuous and sordid relationship between these agencies and their assumed overseers in Congress, specifically Barney Frank (Chairman of the House Financial Services Committee) and Chris Dodd (Chairman of the Senate Banking Committee), both Democrats who received substantial campaign contributions from the two agencies (along with Barack Obama and Rahm Emanuel), Fannie Mae and Freddie Mac grew to dominate the mortgage industry with massive amounts of unpayable sub-prime home loans on their books.
Four Republicans (Charles Hagel, John McCain, Elizabeth Dole and John Sununu) sponsored the Federal Housing Enterprise Regulatory Act of 2005 to address the potential financial disaster that was building at Fannie and Fred, but the Democrats killed the bill. Meanwhile, Barney Frank and Chris Dodd were denying that any problems existed at these agencies right up until their portfolios imploded. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
2. Irresponsible monetary policy by the Federal Reserve. Fed Chairman Alan Greenspan and his successor, Ben Bernanke, kept interest rates too low too long, encouraging and facilitating the massive expansion of credit throughout the economy. The Federal Reserve is the central bank of the United States, and is an independent agency whose decisions are not mandated or ratified by the president or anyone else in the executive branch. The chairman is appointed by the President, subject to confirmation by the senate. The Federal Reserve is subject to oversight and reports to Congress, not the President. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
3. Creative financial instruments that had nothing to do with the functioning of industry and commerce. Wall Street created complex, esoteric, incomprehensible investment vehicles traded among themselves and sold to institutional investors that did not represent the ownership of corporations and private businesses, and therefore were not representative of the true definition of capitalism. Credit Default Swaps, Exchange Traded Notes, Toggle Bonds, hundreds of specially designed securities based on derivatives of other securities, all leveraged up with debt to multiply the returns on invested capital - none of these were necessary for the functioning of a capitalist economy. But you can't legislate against greed. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
And last but not least, capitalism has nothing to do with bailing out businesses and investors who make unwise, high risk mistakes. In fact, capitalism can only work efficiently if those who do make bad investments suffer the consequences. There is no bailing out in capitalism.
Capitalism has everything to do with private enterprise, where individuals rather than the government own the means of production and distribution. This ownership is evidenced by shares of stock in public companies and proprietary or partnership interest in private ones. It is not evidenced by purchasing contrived securities that represent nothing tangible.
Yet today the government is bailing out those wealthy financiers and traders on Wall Street who created the useless financial snake oil. Meanwhile, the Main Street investors in real assets that generate economic growth through the production of goods and services are obliged to pay for it. That is not capitalism. And it is not all George Bush's fault.
Capitalism had very little to do with the current financial crisis, and its not really hard to identify what did -
1. Growing government interference in America's economy and financial markets. Beginning with the Community Re-investment Act (CRA) of 1977, Congress required lenders to loosen credit standards in order to encourage home ownership. In 1995 the rules were relaxed further, with the quasi-government agencies Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) becoming the repository of the loans the original lenders knew could not be paid back. As a result of the incestuous and sordid relationship between these agencies and their assumed overseers in Congress, specifically Barney Frank (Chairman of the House Financial Services Committee) and Chris Dodd (Chairman of the Senate Banking Committee), both Democrats who received substantial campaign contributions from the two agencies (along with Barack Obama and Rahm Emanuel), Fannie Mae and Freddie Mac grew to dominate the mortgage industry with massive amounts of unpayable sub-prime home loans on their books.
Four Republicans (Charles Hagel, John McCain, Elizabeth Dole and John Sununu) sponsored the Federal Housing Enterprise Regulatory Act of 2005 to address the potential financial disaster that was building at Fannie and Fred, but the Democrats killed the bill. Meanwhile, Barney Frank and Chris Dodd were denying that any problems existed at these agencies right up until their portfolios imploded. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
2. Irresponsible monetary policy by the Federal Reserve. Fed Chairman Alan Greenspan and his successor, Ben Bernanke, kept interest rates too low too long, encouraging and facilitating the massive expansion of credit throughout the economy. The Federal Reserve is the central bank of the United States, and is an independent agency whose decisions are not mandated or ratified by the president or anyone else in the executive branch. The chairman is appointed by the President, subject to confirmation by the senate. The Federal Reserve is subject to oversight and reports to Congress, not the President. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
3. Creative financial instruments that had nothing to do with the functioning of industry and commerce. Wall Street created complex, esoteric, incomprehensible investment vehicles traded among themselves and sold to institutional investors that did not represent the ownership of corporations and private businesses, and therefore were not representative of the true definition of capitalism. Credit Default Swaps, Exchange Traded Notes, Toggle Bonds, hundreds of specially designed securities based on derivatives of other securities, all leveraged up with debt to multiply the returns on invested capital - none of these were necessary for the functioning of a capitalist economy. But you can't legislate against greed. Yet George Bush and the Republicans are held responsible by the Democrats and the media.
And last but not least, capitalism has nothing to do with bailing out businesses and investors who make unwise, high risk mistakes. In fact, capitalism can only work efficiently if those who do make bad investments suffer the consequences. There is no bailing out in capitalism.
Capitalism has everything to do with private enterprise, where individuals rather than the government own the means of production and distribution. This ownership is evidenced by shares of stock in public companies and proprietary or partnership interest in private ones. It is not evidenced by purchasing contrived securities that represent nothing tangible.
Yet today the government is bailing out those wealthy financiers and traders on Wall Street who created the useless financial snake oil. Meanwhile, the Main Street investors in real assets that generate economic growth through the production of goods and services are obliged to pay for it. That is not capitalism. And it is not all George Bush's fault.
Monday, November 10, 2008
Uniting Americans?
Since the election of Barack Obama as the next President of the United States, there have been a number of columns and editorials from liberal journalists (sorry, that's redundant) about how the new administration and the leadership of congress will now be able to bring the country together and unite us all in a common purpose after the demonic, polarizing years of the Bush presidency. I guess that is possible if we all drink the socialist, pacifist Kool-Aid and have our brains turn to mush.
It is always quite clear these socialists mean we can all sing kumbaya together if we neanderthals who do not agree with them "see the light" and accept their superior understanding of how the world works and what is good for us. Perhaps that means we who have been around a few years and built the country into the greatest economic powerhouse in history and the savior of western civilization against evil, brutal tyrants should no longer be involved in running the country. Obviously the coalition of black and brown minorities and those under the age of 30, or those who put Barack Obama in the oval office, can do a better job of it than us conservative and libertarian old fogeys.
But the reality is that Barack Obama did have the most liberal voting record in Congress, at least when he took the time to do the job he was elected to do. I find it incredulous that those journalists say he will lead from the center and be a unifying figure. Of course, since their idea of the center is the nose bleed seats in the upper deck on the third base side of the left field foul line, I suppose I can sort of understand the thought process. And perhaps, since Obama is basically a blank slate with no track record of making major decisions effecting anyone but himself, no one really knows what to expect. Maybe we should give him the benefit of the doubt until we actually see what direction his actions take us.
Unfortunately, for those who seek to unify us and entertain fantasy's of Barack being the man to do it, they might want to consider the role of the congressional leadership. Nancy Pelosi, Harry Reid and the other riders of the apocalypse have their priorities too, and they aren't about to let an inexperienced rookie lead them by the nose, even if he is a former colleague from their own party. These creatures, who have achieved impressive new standards in taking their traditional tradecraft of creating massive problems for the country, blaming them on their opponents and then claiming credit for attempting to deal with those problems, and who have reneged on every promise they made to voters to take over congress in 2006, will not be easy to deal with.
To mention just a few of their priorities, Henry Waxman from California favors steep energy taxes on oil and gas producers to be used to combat global warming. What a great idea! Limiting the supply and causing price increases on the sources of energy that Americans really need and wasting taxpayer dollars on a politically correct agenda that is not universally accepted as anything more than a natural development that has happened before and reverses over time, and could possibly pour billions of dollars down a black hole of alternative sources that may not become commercially viable. By the way, has Mr. Waxman ever heard of nuclear power?
Charles Rangel of New York wants to bring back the draft. What a great idea! If Barack wants to invade China, Russia, India or Western Europe, Charlie will find him the troops.
Barney Frank from Massachussetts, the poster child for the previously mentioned masters of causing problems then pretending to solve them (in the case of the current credit crisis), wants to slash defense spending by 25%. What a great idea! In a world with easier access to weapons of mass destruction and fanatical people who have sworn to eliminate us from the face of the earth, maybe we should just stick our heads in the sand with our butts high in the air and hope the bad men will go away.
John Conyers of Michigan has called for reparations for slavery. What a great idea! In a country where nearly 620,000 citizens died in a war to end slavery, where no one has legally owned a slave in 150 years, and where a man of African descent was just elected president, what a great way to compensate those who suffered under slavery (wait a minute, they are all long gone) and create harmony among the races. By the way, do you know anyone who has ever owned a slave and needs to be punished?
The perpetually p.o.'d Mr. Conyers also is a sympathizer with our culturally and intellectually superior European "friends" (tell me again, how many times have we bailed their asses out from annihilation or total domination from tyrranical dictators) who want to indict the Bush Administration and officials for war crimes (for trying to save them again, this time from diehard terrorists who want to convert them to Islam or, if they don't submit, kill them). Another great idea by our man from Detroit (talk of war zones)! Particularly in a country where a good many people still support the War on Terror, mainly because we enjoy living and not having to bow five times a day toward Mecca. I can't think of a better way to start another civil war among Americans than to indict a president for doing the job he was elected to do. However, maybe then Mr. Conyers could create someone to make reparations to.
It should be an interesting four years. The lunatics are now in total charge of the asylum. I guess Americans could only stand so much prosperity and freedom. We grew a little too comfortable with the success of capitalism and free markets, unprecedented individual rights, and a strong military to ensure we maintained them. Somebody managed to convince a lot of people that those things were not worth keeping, maybe because somebody somewhere was not fully participating in the good life our way of life has created. Somewhere along the way we forgot that the good things in life were supposed to be earned, and cannot just be given away to everybody. As the old saying goes, sooner or later no good deeds go unpunished. So now we are moving in a different direction. I don't think the members of the "I want it all and I want it now" generation are going to be very happy with what they have done.
It is always quite clear these socialists mean we can all sing kumbaya together if we neanderthals who do not agree with them "see the light" and accept their superior understanding of how the world works and what is good for us. Perhaps that means we who have been around a few years and built the country into the greatest economic powerhouse in history and the savior of western civilization against evil, brutal tyrants should no longer be involved in running the country. Obviously the coalition of black and brown minorities and those under the age of 30, or those who put Barack Obama in the oval office, can do a better job of it than us conservative and libertarian old fogeys.
But the reality is that Barack Obama did have the most liberal voting record in Congress, at least when he took the time to do the job he was elected to do. I find it incredulous that those journalists say he will lead from the center and be a unifying figure. Of course, since their idea of the center is the nose bleed seats in the upper deck on the third base side of the left field foul line, I suppose I can sort of understand the thought process. And perhaps, since Obama is basically a blank slate with no track record of making major decisions effecting anyone but himself, no one really knows what to expect. Maybe we should give him the benefit of the doubt until we actually see what direction his actions take us.
Unfortunately, for those who seek to unify us and entertain fantasy's of Barack being the man to do it, they might want to consider the role of the congressional leadership. Nancy Pelosi, Harry Reid and the other riders of the apocalypse have their priorities too, and they aren't about to let an inexperienced rookie lead them by the nose, even if he is a former colleague from their own party. These creatures, who have achieved impressive new standards in taking their traditional tradecraft of creating massive problems for the country, blaming them on their opponents and then claiming credit for attempting to deal with those problems, and who have reneged on every promise they made to voters to take over congress in 2006, will not be easy to deal with.
To mention just a few of their priorities, Henry Waxman from California favors steep energy taxes on oil and gas producers to be used to combat global warming. What a great idea! Limiting the supply and causing price increases on the sources of energy that Americans really need and wasting taxpayer dollars on a politically correct agenda that is not universally accepted as anything more than a natural development that has happened before and reverses over time, and could possibly pour billions of dollars down a black hole of alternative sources that may not become commercially viable. By the way, has Mr. Waxman ever heard of nuclear power?
Charles Rangel of New York wants to bring back the draft. What a great idea! If Barack wants to invade China, Russia, India or Western Europe, Charlie will find him the troops.
Barney Frank from Massachussetts, the poster child for the previously mentioned masters of causing problems then pretending to solve them (in the case of the current credit crisis), wants to slash defense spending by 25%. What a great idea! In a world with easier access to weapons of mass destruction and fanatical people who have sworn to eliminate us from the face of the earth, maybe we should just stick our heads in the sand with our butts high in the air and hope the bad men will go away.
John Conyers of Michigan has called for reparations for slavery. What a great idea! In a country where nearly 620,000 citizens died in a war to end slavery, where no one has legally owned a slave in 150 years, and where a man of African descent was just elected president, what a great way to compensate those who suffered under slavery (wait a minute, they are all long gone) and create harmony among the races. By the way, do you know anyone who has ever owned a slave and needs to be punished?
The perpetually p.o.'d Mr. Conyers also is a sympathizer with our culturally and intellectually superior European "friends" (tell me again, how many times have we bailed their asses out from annihilation or total domination from tyrranical dictators) who want to indict the Bush Administration and officials for war crimes (for trying to save them again, this time from diehard terrorists who want to convert them to Islam or, if they don't submit, kill them). Another great idea by our man from Detroit (talk of war zones)! Particularly in a country where a good many people still support the War on Terror, mainly because we enjoy living and not having to bow five times a day toward Mecca. I can't think of a better way to start another civil war among Americans than to indict a president for doing the job he was elected to do. However, maybe then Mr. Conyers could create someone to make reparations to.
It should be an interesting four years. The lunatics are now in total charge of the asylum. I guess Americans could only stand so much prosperity and freedom. We grew a little too comfortable with the success of capitalism and free markets, unprecedented individual rights, and a strong military to ensure we maintained them. Somebody managed to convince a lot of people that those things were not worth keeping, maybe because somebody somewhere was not fully participating in the good life our way of life has created. Somewhere along the way we forgot that the good things in life were supposed to be earned, and cannot just be given away to everybody. As the old saying goes, sooner or later no good deeds go unpunished. So now we are moving in a different direction. I don't think the members of the "I want it all and I want it now" generation are going to be very happy with what they have done.
Friday, November 07, 2008
The New Reality
In retrospect, I suppose one could say it is unfortunate Americans did not elect either Al Gore in 2000 or John Kerry in 2004. If we had, the voting public would perhaps be blaming them for any inevitable economic difficulties we may have, even though the news media and congressional Democrats would certainly be doing their best to blame it on Republicans. And even more important, this 2008 election outcome and its potentially fatal blow to the future of our country probably would not have happened.
But it did. We can now try to prepare ourselves for -
1. Redistribution of income from the economic growth generators to the unmotivated beneficiaries of government handouts. By the way, I am one who firmly believes there are way too many enormously overpaid people, primarily in financial services, the legal profession, and CEO's throughout commerce and industry. They make much more money than they are worth, and they should pay significantly higher taxes if their Boards of Directors cannot reign in the outrageous compensation packages. In fact, many hedge fund and private equity managers belong in jail, and all the money they made looting companies over the last decade should be impounded and used to pay for the damage they have done to companies and employees.
But it doesn't make sense to burn down the whole orchard to eliminate some of the bad apples. In far greater numbers are those entrepeneurs and small private business owners who create successful businesses and create the majority of jobs in our economy, and most are worth every penny of the earnings they take home. There is no logical reason to punish them with higher taxes.
2. Higher government spending for existing entitlement programs, new social initiatives and politically correct special interest agenda's, accompanied by astronomical federal budget deficits. The rapid expansion of borrowing by the federal government will lead to higher interest rates for everyone who buys a home, purchases a car or has a business that needs working capital.
3. Higher corporate taxes, which will ultimately be paid for by consumers as businesses raise prices, and result in productive companies moving their operations to foreign countries that allow them to be more competitive.
4. Higher capital gains taxes, reducing the incentives necessary for capital investment that are critical for economic recovery and sustainable growth.
5. Nationalization, or federal government take-over, of the financial and health care industries, as well as possibly the auto and energy industries. This repudiation of capitalism and turn towards government directed and managed industrial policy will ensure the misallocation of capital resources, destroy productivity, suppress workers wages and restrain economic progress and growth for many years to come.
Regarding energy, at a minimum we can expect continued bizarre policies of limited oil and gas production and restraints on nuclear power generation, including probable "windfall profits" taxes. These actions will result in scarcity of energy resources, higher energy prices and continued reliance on foreign sources.
6. Economic isolationism and protectionism. From abrogating existing trade agreements to creating new barriers to free trade, these actions always result in sharp contractions of international commerce due to retaliatory measures from trading partners. This not only leads to higher prices for goods and services, but is well known as one of the primary reasons for the depth and prolongation of the Great Depression of the 1930's.
7. The return of productivity destroying thuggish labor unions to power, and the end of right to work laws.
8. Packing the federal judiciary with liberal judges who use the courts to make law according to their personal viewpoints rather than decide cases by interpreting existing law as it was intended.
9. Irresponsible campaign finance and voter registration laws that ensure elections can be bought by whichever special interest groups contribute the most money, and that fraudulent votes (non-existent or ineligible voters) will continue to be counted.
10. Legislation to limit free speech with the preposterously named "Fairness Doctrine", the sole purpose of which is to prevent opposing opinions from being heard.
11. A reduction in defense spending, which puts our country more at risk in an increasingly dangerous world of belligerent adversaries armed with weapons of mass destruction.
12. Surrender of our national interests to world organizations, such as the United Nations, controlled by bureaucrats, left wing politicians and third world tyrants who protest and oppose everything the United States of America stands for while expecting us to pay for their ability to do so.
Every one of these policies and actions are detrimental to the prosperity and ultimate survival of any nation. And I haven't even mentioned the issues of immigration, education and what can be done to address the out of control entitlements of social security and medicare. Rest assured that these issues will each be handled in the wrong manner by our ultra-leftist new government.
The United States is now clearly on the path to becoming a socialist country, pure and simple. The old Democratic Party does not exist anymore. It has been hi-jacked by the far left elitists who are arrogant enough to believe Americans should live our lives as they see fit. Our new leaders might as well go ahead and change their name to the Communist Party of America. Karl Marx was right. Our democracy did sow the seeds of its own destruction.
But we are not without hope. The majority of Americans are still centrist in nature. The left-wing propaganda machine has been extremely successful in brain-washing the American public into thinking the country was going down the drain and evil Republicans were responsible, even though until recently the economy was growing at above average rates, unemployment was low, nearly anyone could buy any consumer product they wanted, and our country had been kept safe from terrorist attack ever since 9/11/2001. The propagandists proved the word is mightier than the sword, because words can misinform, mislead, deceive and establish false information as fact.
There is no doubt that Americans will discover over the next few years that the socialists have deceived them. Their policies are doomed to failure, and we must make sure we maintain our resolve in protecting the basic freedoms Americans have always enjoyed. We cannot let these socialists hi-jack our country and lead us down the path of declining personal freedom and eroding standards of living. As long as we continue to fight for our constitutional rights that are becoming more and more precarious, conservatives, independents and the more moderate liberals will be able to offer better solutions for renewed prosperity, social justice and individual rights - and we will take our country back from those who rely on lies and false promises to win elections.
But it did. We can now try to prepare ourselves for -
1. Redistribution of income from the economic growth generators to the unmotivated beneficiaries of government handouts. By the way, I am one who firmly believes there are way too many enormously overpaid people, primarily in financial services, the legal profession, and CEO's throughout commerce and industry. They make much more money than they are worth, and they should pay significantly higher taxes if their Boards of Directors cannot reign in the outrageous compensation packages. In fact, many hedge fund and private equity managers belong in jail, and all the money they made looting companies over the last decade should be impounded and used to pay for the damage they have done to companies and employees.
But it doesn't make sense to burn down the whole orchard to eliminate some of the bad apples. In far greater numbers are those entrepeneurs and small private business owners who create successful businesses and create the majority of jobs in our economy, and most are worth every penny of the earnings they take home. There is no logical reason to punish them with higher taxes.
2. Higher government spending for existing entitlement programs, new social initiatives and politically correct special interest agenda's, accompanied by astronomical federal budget deficits. The rapid expansion of borrowing by the federal government will lead to higher interest rates for everyone who buys a home, purchases a car or has a business that needs working capital.
3. Higher corporate taxes, which will ultimately be paid for by consumers as businesses raise prices, and result in productive companies moving their operations to foreign countries that allow them to be more competitive.
4. Higher capital gains taxes, reducing the incentives necessary for capital investment that are critical for economic recovery and sustainable growth.
5. Nationalization, or federal government take-over, of the financial and health care industries, as well as possibly the auto and energy industries. This repudiation of capitalism and turn towards government directed and managed industrial policy will ensure the misallocation of capital resources, destroy productivity, suppress workers wages and restrain economic progress and growth for many years to come.
Regarding energy, at a minimum we can expect continued bizarre policies of limited oil and gas production and restraints on nuclear power generation, including probable "windfall profits" taxes. These actions will result in scarcity of energy resources, higher energy prices and continued reliance on foreign sources.
6. Economic isolationism and protectionism. From abrogating existing trade agreements to creating new barriers to free trade, these actions always result in sharp contractions of international commerce due to retaliatory measures from trading partners. This not only leads to higher prices for goods and services, but is well known as one of the primary reasons for the depth and prolongation of the Great Depression of the 1930's.
7. The return of productivity destroying thuggish labor unions to power, and the end of right to work laws.
8. Packing the federal judiciary with liberal judges who use the courts to make law according to their personal viewpoints rather than decide cases by interpreting existing law as it was intended.
9. Irresponsible campaign finance and voter registration laws that ensure elections can be bought by whichever special interest groups contribute the most money, and that fraudulent votes (non-existent or ineligible voters) will continue to be counted.
10. Legislation to limit free speech with the preposterously named "Fairness Doctrine", the sole purpose of which is to prevent opposing opinions from being heard.
11. A reduction in defense spending, which puts our country more at risk in an increasingly dangerous world of belligerent adversaries armed with weapons of mass destruction.
12. Surrender of our national interests to world organizations, such as the United Nations, controlled by bureaucrats, left wing politicians and third world tyrants who protest and oppose everything the United States of America stands for while expecting us to pay for their ability to do so.
Every one of these policies and actions are detrimental to the prosperity and ultimate survival of any nation. And I haven't even mentioned the issues of immigration, education and what can be done to address the out of control entitlements of social security and medicare. Rest assured that these issues will each be handled in the wrong manner by our ultra-leftist new government.
The United States is now clearly on the path to becoming a socialist country, pure and simple. The old Democratic Party does not exist anymore. It has been hi-jacked by the far left elitists who are arrogant enough to believe Americans should live our lives as they see fit. Our new leaders might as well go ahead and change their name to the Communist Party of America. Karl Marx was right. Our democracy did sow the seeds of its own destruction.
But we are not without hope. The majority of Americans are still centrist in nature. The left-wing propaganda machine has been extremely successful in brain-washing the American public into thinking the country was going down the drain and evil Republicans were responsible, even though until recently the economy was growing at above average rates, unemployment was low, nearly anyone could buy any consumer product they wanted, and our country had been kept safe from terrorist attack ever since 9/11/2001. The propagandists proved the word is mightier than the sword, because words can misinform, mislead, deceive and establish false information as fact.
There is no doubt that Americans will discover over the next few years that the socialists have deceived them. Their policies are doomed to failure, and we must make sure we maintain our resolve in protecting the basic freedoms Americans have always enjoyed. We cannot let these socialists hi-jack our country and lead us down the path of declining personal freedom and eroding standards of living. As long as we continue to fight for our constitutional rights that are becoming more and more precarious, conservatives, independents and the more moderate liberals will be able to offer better solutions for renewed prosperity, social justice and individual rights - and we will take our country back from those who rely on lies and false promises to win elections.
Wednesday, October 29, 2008
America's Only Hope
With this presidential election next tuesday, America will pass the point of no return - or tipping point. Given Barack Obama's tax plan and the near certainty it will be supported by his cheerleaders in congress, more people will be the beneficiaries of government spending than there will be paying taxes to fund it. The only way that can work to maintain a viable economy is if the providers of support have incentives to continue to do so. Under this plan, they won't.
Consequently, the American economy is in for a prolonged period of stagnation and decline. There is no way out of the situation given the current system of taxation and the implementation of a philosophy of redistribution of income. Those who will get a free ride will not vote to re-impose taxes on themselves. And the Democrats who created the situation are unlikely to re-impose the taxes since it would cost them votes. This is not rocket science or advanced graduate economics. It is common sense.
The only non-violent solution to escape from a future of economic regression is to trash and eliminate the income tax. The only method of taxation going forward that is fair and equitable and that will allow for the regeneration of sustainable economic growth is the consumption tax. Whether it is a sales tax or a value-added tax, it would give the innovators and industrious the incentives of profiting from their efforts as they would be allowed to keep what they earned rather than having a significant portion of their earnings confiscated by the government.
A return to prosperity would also require that congress restrain its spending habits, an event that has to occur at some point as tax revenues under the current system dwindle and the cost of borrowing becomes prohibitive. Of course, the only way to keep government spending under control on a sustainable basis is to deny incumbents the ability to buy votes by imposing term limits on every elected official. That is a subject for another day.
Consequently, the American economy is in for a prolonged period of stagnation and decline. There is no way out of the situation given the current system of taxation and the implementation of a philosophy of redistribution of income. Those who will get a free ride will not vote to re-impose taxes on themselves. And the Democrats who created the situation are unlikely to re-impose the taxes since it would cost them votes. This is not rocket science or advanced graduate economics. It is common sense.
The only non-violent solution to escape from a future of economic regression is to trash and eliminate the income tax. The only method of taxation going forward that is fair and equitable and that will allow for the regeneration of sustainable economic growth is the consumption tax. Whether it is a sales tax or a value-added tax, it would give the innovators and industrious the incentives of profiting from their efforts as they would be allowed to keep what they earned rather than having a significant portion of their earnings confiscated by the government.
A return to prosperity would also require that congress restrain its spending habits, an event that has to occur at some point as tax revenues under the current system dwindle and the cost of borrowing becomes prohibitive. Of course, the only way to keep government spending under control on a sustainable basis is to deny incumbents the ability to buy votes by imposing term limits on every elected official. That is a subject for another day.
We Can Only "Hope" To Survive Obama's "Change"
Next week Americans will make the biggest mistake in the relatively brief history of the United States.
When Americans go to the polls to vote for our next president, they basically have two choices. They have the opportunity to vote for an experienced man of demonstrated character and integrity who has spent his whole life in courageous and honorable duty to his country. This man's service in defense of his country went beyond the capacity of human limits, as everyone should by now know. And his career in public service has focused on the fight against corruption in government and efforts to restrain the out of control growth of government spending, both of which are the primary domestic enemies of the American citizens the federal government is supposed to represent. It appears this man has no chance of winning the election.
The other choice is a man with great rhetorical skills but little to no record of accomplishing anything of substance. He has an opaque personal background, is the product of the most corrupt political machine in America (Chicago), associates with known subversive domestic terrorists (William Ayers), and whose personal mentors over the years have been radical agitators who promote hatred of American ideals, culture and principles (Jeremiah Wright). Whenever he has won public office he has spent very little time doing the job he was elected to do but spent considerable amounts of time campaigning for his next higher political office. Unfortunately, this time there is no higher office, and he may actually spend some time doing what he says he is going to do. And that will be disastrous.
His stated goals are to expand government programs across the board, programs that are already on a path of self-destruction that will make the mortgage meltdown, caused by the government passing legislation requiring lenders to loan money to people they knew could not pay it back, look like a pimple on an elephant's butt. He has promised labor unions he will enact the Orwellian named "Employee Free Choice Act", which denies workers the right to secret ballots in voting for union representation, ensuring workplace intimidation and punishment for workers who favor the right to work laws. We are again seeing leaders of the Democratic Party promoting the anything but fair "Fairness Doctrine", designed to stifle dissenting opinion and deny free speech. And this candidate's tax plan is nothing more than pure, socialist income redistribution through the raising of tax rates on the higher income earners while promising those on the lower end of the income scale increased credits, deductions and exemptions to not only reduce their taxes to zero, but give them money confiscated from those who do pay taxes.
These spending and tax plans will have two consequences. One, they will kill the engine of economic progress in America by increasing the inefficient government directed allocation of capital resources to politically favored social programs and politically correct agenda's, and reduce productivity generating incentives, innovation and entrepreneurship as the government mandates a retreat from the proven prosperity producing power of capitalism, free markets and global trade. Two, they will ensure that Democrats remain in control of government until the American economy has totally collapsed with no prospect of recovery, or some outside force imposes its will. Why is that? Because this tax plan buys the votes of more than half the voting public.
In 2006, according to the US Census, 220 million Americans were eligible to vote. 89 million of those people, or 40.5%, paid no income tax. Under the Obama plan, 18 million more folks, or 8.2%, will not pay any taxes (in fact, many of these 107 million people will receive money from the government). 2.7 million people, or 1.2%, are employed by the federal government. Add that up and you have 49.9% of the voting public either paying no taxes or being dependent on the federal government. Another 24 million people, or 10.9%, will pay less than $1,000 and less than 5% of their income in taxes. Combined, that means 60.8% of eligible voters pay next to nothing to fund the profligacy of the US government, and really don't care how congress spends it other than to hope they send more freebies their way. Why should they vote for Republicans when the Democrats are giving them a free lunch - or more accurately, a free big screen tv, new car, rent money or extra cash for whiskey, cigarettes and drugs.
As any sane human being should be able to figure out, that can't last. Sooner, rather than later, the productive will tire of seeing the fruits of their efforts confiscated from them to be given to the non-productive. Before long, the whole country becomes non-productive and the game is over. It is interesting that some of Barack Obama's most passionate supporters are the 20 to 30 year olds who are the ones that are going to be most royally screwed under his new direction. Income redistribution might sound good to them now, but in 20 to 30 years there will be no income to redistribute. The government programs for social security, health care and other social entitlements that sound so great will not be there when it is time for the younger generation to use them, even though they will be the ones paying for the older generations to deplete.
Over the last century, capitalism and free markets produced the most rapid advance in standards of living the world has ever seen. Obama's "change" will put global economic progress in reverse, at least here in the United States. Perhaps his supporters have not noticed what the world's stock markets are telling them. Global stock markets peaked one year ago before beginning a normal consolidation following the five year bull market run that began in late 2002. At the end of August this year the US market was 17% below the October 2007 high, well within the bounds of a traditional cyclical contraction. But when it started to become clear that Barack Obama was going to be our next president, the stock market plunged 35% in less than two months. Nationalization of the financial industry, a fatal first step down the wrong road, was certainly the initial catalyst. But the realization that a new president and a like-minded congress would thrust the American economy recklessly towards socialism and income redistribution has arguably caused this financial disaster to be worse than it needed to be.
Obama's campaign slogans have been "change we can believe in" and "hope". The global stock markets are telling us that western civilization may not survive his type of "change." And the only "hope" we have is that he doesn't do what he says he will do.
When Americans go to the polls to vote for our next president, they basically have two choices. They have the opportunity to vote for an experienced man of demonstrated character and integrity who has spent his whole life in courageous and honorable duty to his country. This man's service in defense of his country went beyond the capacity of human limits, as everyone should by now know. And his career in public service has focused on the fight against corruption in government and efforts to restrain the out of control growth of government spending, both of which are the primary domestic enemies of the American citizens the federal government is supposed to represent. It appears this man has no chance of winning the election.
The other choice is a man with great rhetorical skills but little to no record of accomplishing anything of substance. He has an opaque personal background, is the product of the most corrupt political machine in America (Chicago), associates with known subversive domestic terrorists (William Ayers), and whose personal mentors over the years have been radical agitators who promote hatred of American ideals, culture and principles (Jeremiah Wright). Whenever he has won public office he has spent very little time doing the job he was elected to do but spent considerable amounts of time campaigning for his next higher political office. Unfortunately, this time there is no higher office, and he may actually spend some time doing what he says he is going to do. And that will be disastrous.
His stated goals are to expand government programs across the board, programs that are already on a path of self-destruction that will make the mortgage meltdown, caused by the government passing legislation requiring lenders to loan money to people they knew could not pay it back, look like a pimple on an elephant's butt. He has promised labor unions he will enact the Orwellian named "Employee Free Choice Act", which denies workers the right to secret ballots in voting for union representation, ensuring workplace intimidation and punishment for workers who favor the right to work laws. We are again seeing leaders of the Democratic Party promoting the anything but fair "Fairness Doctrine", designed to stifle dissenting opinion and deny free speech. And this candidate's tax plan is nothing more than pure, socialist income redistribution through the raising of tax rates on the higher income earners while promising those on the lower end of the income scale increased credits, deductions and exemptions to not only reduce their taxes to zero, but give them money confiscated from those who do pay taxes.
These spending and tax plans will have two consequences. One, they will kill the engine of economic progress in America by increasing the inefficient government directed allocation of capital resources to politically favored social programs and politically correct agenda's, and reduce productivity generating incentives, innovation and entrepreneurship as the government mandates a retreat from the proven prosperity producing power of capitalism, free markets and global trade. Two, they will ensure that Democrats remain in control of government until the American economy has totally collapsed with no prospect of recovery, or some outside force imposes its will. Why is that? Because this tax plan buys the votes of more than half the voting public.
In 2006, according to the US Census, 220 million Americans were eligible to vote. 89 million of those people, or 40.5%, paid no income tax. Under the Obama plan, 18 million more folks, or 8.2%, will not pay any taxes (in fact, many of these 107 million people will receive money from the government). 2.7 million people, or 1.2%, are employed by the federal government. Add that up and you have 49.9% of the voting public either paying no taxes or being dependent on the federal government. Another 24 million people, or 10.9%, will pay less than $1,000 and less than 5% of their income in taxes. Combined, that means 60.8% of eligible voters pay next to nothing to fund the profligacy of the US government, and really don't care how congress spends it other than to hope they send more freebies their way. Why should they vote for Republicans when the Democrats are giving them a free lunch - or more accurately, a free big screen tv, new car, rent money or extra cash for whiskey, cigarettes and drugs.
As any sane human being should be able to figure out, that can't last. Sooner, rather than later, the productive will tire of seeing the fruits of their efforts confiscated from them to be given to the non-productive. Before long, the whole country becomes non-productive and the game is over. It is interesting that some of Barack Obama's most passionate supporters are the 20 to 30 year olds who are the ones that are going to be most royally screwed under his new direction. Income redistribution might sound good to them now, but in 20 to 30 years there will be no income to redistribute. The government programs for social security, health care and other social entitlements that sound so great will not be there when it is time for the younger generation to use them, even though they will be the ones paying for the older generations to deplete.
Over the last century, capitalism and free markets produced the most rapid advance in standards of living the world has ever seen. Obama's "change" will put global economic progress in reverse, at least here in the United States. Perhaps his supporters have not noticed what the world's stock markets are telling them. Global stock markets peaked one year ago before beginning a normal consolidation following the five year bull market run that began in late 2002. At the end of August this year the US market was 17% below the October 2007 high, well within the bounds of a traditional cyclical contraction. But when it started to become clear that Barack Obama was going to be our next president, the stock market plunged 35% in less than two months. Nationalization of the financial industry, a fatal first step down the wrong road, was certainly the initial catalyst. But the realization that a new president and a like-minded congress would thrust the American economy recklessly towards socialism and income redistribution has arguably caused this financial disaster to be worse than it needed to be.
Obama's campaign slogans have been "change we can believe in" and "hope". The global stock markets are telling us that western civilization may not survive his type of "change." And the only "hope" we have is that he doesn't do what he says he will do.
Saturday, March 29, 2008
The Struggle To Survive
Many citizens of the United States believe we should not have gone to war against Islamic terrorists subsequent to a direct, sneak attack on one of our major cities. It seems their major objection is the invasion of Iraq, a country that was ruled by a ruthless dictator who for over twenty years had routinely murdered his own citizens, terrorized his neighbors, sponsored and funded terrorism throughout the world, violated countless UN resolutions to cease and desist his activities, and promised to lead the forces of Islam to victory in battle against the Great Satan, also know as American imperialists, with the use of nuclear, chemical and biological weapons. The opponents to the war claim the invasion was unilaterally conducted by the United States, even though 40 countries formed the initial coalition and sent troops, and was unwarranted since Iraq had not directly attacked the United States.
For those who believe the effort to eliminate Saddam Hussein and his murderous regime has not been worth the cost of 4,000 American soldiers lives, I have a few questions -
117,000 American soldiers lost their lives during the one and a half years the United States was involved in World War I. Was it necessary to become involved in that war? Germany had never directly attacked the United States.
From June 6 through August 25, 1944, a period of less than 3 months, the United States lost 29,000 soldiers killed in action in Operation Overlord, the invasion of Europe that started on the beaches of Normandy. In all, we lost over 300,000 soldiers and airmen in the European Theater of Operations during World War II. Was it really necessary to storm the beaches at Normandy or even go to war with Germany in World War II? Germany had not directly attacked the United States.
In the Pacific Theater during World War II, the United States lost over 12,500 men during the 3 month campaign for the island of Okinawa and over 7,300 killed and missing during the 2 month campaign for the island of Iwo Jima. Japan did conduct a sneak attack on what was then a U.S. Territory on December 7, 1941, at Pearl Harbor, Hawaii, killing 2,400 Americans. But that wasn't as many as the more than 3,000 killed on September 11, 2001, from direct attacks on American soil. Should the United States have gone to war against Japan?
In the first 3 days of July in 1863, 7,863 Americans were killed and 27,044 wounded at the Battle of Gettysburg during the Civil War. Over-all, 625,000 Americans died during the War between the States from 1861 through 1865. Was it really necessary to suffer a devastatingly bloody war among ourselves in order to preserve the Union?
Cultures of the East and West have clashed for at least 2500 years, and if not for the heroic stand of the Spartans at Thermopylae in the fifth century B.C., Emporer Xerxes and the Persians would have conquered the West and the history of Western Civilization would have been quite different.
The hostility between East and West became even more profound subsequent to the founding of Islam by the Prophet Muhammed in the seventh century A.D. Western culture separates political and spiritual authority while Islam combines it - and demands absolute obedience to its precepts. There is no common ground between Islam and the West, and western societies had better wake up to that fact in an age of weapons of mass destruction. The loss of 4,000 heroic Americans who volunteered to preserve freedom from tyranny is heartbreaking and tragic, but is it not a relatively small cost when compared with previous unwanted but necessary conflicts that have arisen throughout the course of human history?
For those who believe the effort to eliminate Saddam Hussein and his murderous regime has not been worth the cost of 4,000 American soldiers lives, I have a few questions -
117,000 American soldiers lost their lives during the one and a half years the United States was involved in World War I. Was it necessary to become involved in that war? Germany had never directly attacked the United States.
From June 6 through August 25, 1944, a period of less than 3 months, the United States lost 29,000 soldiers killed in action in Operation Overlord, the invasion of Europe that started on the beaches of Normandy. In all, we lost over 300,000 soldiers and airmen in the European Theater of Operations during World War II. Was it really necessary to storm the beaches at Normandy or even go to war with Germany in World War II? Germany had not directly attacked the United States.
In the Pacific Theater during World War II, the United States lost over 12,500 men during the 3 month campaign for the island of Okinawa and over 7,300 killed and missing during the 2 month campaign for the island of Iwo Jima. Japan did conduct a sneak attack on what was then a U.S. Territory on December 7, 1941, at Pearl Harbor, Hawaii, killing 2,400 Americans. But that wasn't as many as the more than 3,000 killed on September 11, 2001, from direct attacks on American soil. Should the United States have gone to war against Japan?
In the first 3 days of July in 1863, 7,863 Americans were killed and 27,044 wounded at the Battle of Gettysburg during the Civil War. Over-all, 625,000 Americans died during the War between the States from 1861 through 1865. Was it really necessary to suffer a devastatingly bloody war among ourselves in order to preserve the Union?
Cultures of the East and West have clashed for at least 2500 years, and if not for the heroic stand of the Spartans at Thermopylae in the fifth century B.C., Emporer Xerxes and the Persians would have conquered the West and the history of Western Civilization would have been quite different.
The hostility between East and West became even more profound subsequent to the founding of Islam by the Prophet Muhammed in the seventh century A.D. Western culture separates political and spiritual authority while Islam combines it - and demands absolute obedience to its precepts. There is no common ground between Islam and the West, and western societies had better wake up to that fact in an age of weapons of mass destruction. The loss of 4,000 heroic Americans who volunteered to preserve freedom from tyranny is heartbreaking and tragic, but is it not a relatively small cost when compared with previous unwanted but necessary conflicts that have arisen throughout the course of human history?
Tuesday, October 30, 2007
Always Wrong But Never In Doubt
It is amazing that environmentalists are always absolutely certain they are 100% correct about their predictions of disaster. Perhaps it is because of their appalling track record that they believe sooner or later they have to be right. After all, a blind squirrel finds an acorn every now and then. These folks give new meaning to the phrase "always wrong but never in doubt".
One of the first on record to predict that human beings were doomed was Thomas Malthus in "An Essay on the Principle of Population", published in 1798, stating that population would outrun the food supply, leading to widespread famine. Even though he was pathetically wrong, there always seems to be a large number of people who deny reality and believe mankind is irreversibly creating its own demise. They reject the concept of progress, and don't understand the ability of man to adapt to the circumstances and fix problems before they become unfixable.
The earth is doomed movement did not really get rolling until the last half of the twentieth century. In 1968, Stanford professor Paul Ehrlich published "The Population Bomb". He wrote that "the battle to feed humanity is over. In the 1970's and 1980's hundreds of millions of people will starve to death. In the United States alone, famine will kill 65 million in the 1980's." There may be no other book ever published that got the future as wrong as this one.
Never-the-less, the belief that the earth has a destiny of disaster caused by man continued to gain popularity. Many organizations, such as Greenpeace, the Sierra Club and Friends of the Earth, were formed to save the earth from the evil deeds of mankind, growing into religious cults that proclaimed economic progress must be stopped or else. The Club of Rome published a report called "The Limits of Growth" in 1972 predicting earth would exhaust its supply of raw materials by the late 1980's. Even though these doomsayers are always wrong, they never admit it or give up the quest.
From 1945 into the 1970's the earth experienced a period of global cooling, accompanied by scholarly predictions of a new ice age. In the mid-1970's the National Science Board and National Academy of Sciences published reports on the phenomena, and Newsweek produced an article in 1975 called "The Cooling World". Of course human activity was seen as the primary culprit, with aerosols from fossil fuel combustion increasing the number of tiny particles in the air and reducing the amount of sunlight reaching the earth's surface. Predictably, the phenomena ended about the same time the mass media discovered it and began hyping its apocalyptic predictions.
The same folks who went ballistic over global cooling in the 1970's are the same people who are now hysterically panic-stricken over global warming. Now the problem is too much carbon dioxide in the atmosphere, creating a greenhouse effect that is warming the earth's surface. It certainly is happening, but whether it is a long term trend or another in the long history of periodic climate cycles is not yet known. Of course the Greenies blame it all on SUV's and the energy wasting lifestyle of you and me. They would rather tell us how to live our life in pristine harmony with nature and give up all the benefits of progress, without any proof at all that would solve the problem. Regardless, not one of the Greenies will admit that one of the primary causes of the increase in carbon dioxide in the atmosphere stares at them every time they look in a mirror.
The biggest source of carbon dioxide is from coal fired electricity generating power plants. The reason so many new coal fired power plants were built was because Greenie hysteria effectively halted the construction of environmentally clean nuclear power plants in America nearly 30 years ago, causing the electric power industry to default to building more carbon dioxide producing coal fired power plants. But they aren't about to acknowledge that inconvenient truth.
If the Greenies want to focus on global threats that truly are a clear and present danger they might consider spending their time attacking the problem of deadly bacteria that are becoming resistant to antibiotics and threaten our very existence. A growing number of Americans are dying each year from these superbugs, and very little is being done by medical scientists to develop new drugs to fight this menace. A recent article in the Wall Street Journal said that only 10 new antibiotics have been approved by the Food and Drug Administration since 1998. Right now there are only 13 new antibiotics in development by drug companies compared to more than 60 a decade ago. It appears the American health system is not putting a very high priority on stopping these microscopic killers. Now that is a real problem.
Unfortunately, the Greenies track record with these types of threats is not so stellar either. In fact, perhaps the most damning evidence of the results of their self-righteous crusades hits at the very heart of environmental religion. Rachel Carson is the patron saint of environmentalism, and is often credited with being its progenitor. She published a book in 1962 called "Silent Spring", describing how the insecticide DDT, though non-toxic to humans, was very harmful to a wide range of wildlife. The book created such extensive panic that the chemical was soon banned by most countries in the world.
Prior to Carson's book, DDT was used to control the mosquitoes that spread malaria, which has killed more people than any other disease in history. In fact, according to a recent article in National Geographic, some scientists believe malaria has killed one out every two people who have ever lived. DDT was discovered in the 1940's by a Swiss chemist, and was by far the most effective insecticide for killing mosquitoes ever developed, and at a cost 4 times lower than previous ones.
DDT worked so well that over the decade of the 1950's malaria was basically eliminated in the developed countries of the world, and nearly wiped out in most developing countries. Unfortunately, DDT was heavily overused for agricultural purposes and did create collateral damage to many species of animals. But instead of adopting the more rational approach of limiting the DDT use for agriculture, the result of Carson's book was to eliminate its use altogether.
The unhappy consequence has been the rapid resurgence of malaria around the globe. The World Health Organization estimates that 300 to 500 million people are now afflicted with the disease every year. According to the article in National Geographic, malaria today kills 3,000 children every day in Africa alone. In Zambia, nearly 1 in 5 children die from malaria before they reach the age of 5. A researcher for the National Institutes of Health was quoted as saying, "The ban on DDT may have killed 20 million children". These dreadful statistics are the result of environmentalism taken to the extreme, but no one in the cult will ever acknowledge their culpability.
So the real question is, why would anybody ever believe anything the environmental lunatics have to say? Their arrogantly self-righteous prophesies turn out to be false alarms, and sometimes even deadly as evidenced by the results of the Mother of the Movement's call to action. Never-the-less, they continue to pat themselves on the back, declare their moral virtue and slobber over new-found heroes that are "always wrong but never in doubt".
One of the first on record to predict that human beings were doomed was Thomas Malthus in "An Essay on the Principle of Population", published in 1798, stating that population would outrun the food supply, leading to widespread famine. Even though he was pathetically wrong, there always seems to be a large number of people who deny reality and believe mankind is irreversibly creating its own demise. They reject the concept of progress, and don't understand the ability of man to adapt to the circumstances and fix problems before they become unfixable.
The earth is doomed movement did not really get rolling until the last half of the twentieth century. In 1968, Stanford professor Paul Ehrlich published "The Population Bomb". He wrote that "the battle to feed humanity is over. In the 1970's and 1980's hundreds of millions of people will starve to death. In the United States alone, famine will kill 65 million in the 1980's." There may be no other book ever published that got the future as wrong as this one.
Never-the-less, the belief that the earth has a destiny of disaster caused by man continued to gain popularity. Many organizations, such as Greenpeace, the Sierra Club and Friends of the Earth, were formed to save the earth from the evil deeds of mankind, growing into religious cults that proclaimed economic progress must be stopped or else. The Club of Rome published a report called "The Limits of Growth" in 1972 predicting earth would exhaust its supply of raw materials by the late 1980's. Even though these doomsayers are always wrong, they never admit it or give up the quest.
From 1945 into the 1970's the earth experienced a period of global cooling, accompanied by scholarly predictions of a new ice age. In the mid-1970's the National Science Board and National Academy of Sciences published reports on the phenomena, and Newsweek produced an article in 1975 called "The Cooling World". Of course human activity was seen as the primary culprit, with aerosols from fossil fuel combustion increasing the number of tiny particles in the air and reducing the amount of sunlight reaching the earth's surface. Predictably, the phenomena ended about the same time the mass media discovered it and began hyping its apocalyptic predictions.
The same folks who went ballistic over global cooling in the 1970's are the same people who are now hysterically panic-stricken over global warming. Now the problem is too much carbon dioxide in the atmosphere, creating a greenhouse effect that is warming the earth's surface. It certainly is happening, but whether it is a long term trend or another in the long history of periodic climate cycles is not yet known. Of course the Greenies blame it all on SUV's and the energy wasting lifestyle of you and me. They would rather tell us how to live our life in pristine harmony with nature and give up all the benefits of progress, without any proof at all that would solve the problem. Regardless, not one of the Greenies will admit that one of the primary causes of the increase in carbon dioxide in the atmosphere stares at them every time they look in a mirror.
The biggest source of carbon dioxide is from coal fired electricity generating power plants. The reason so many new coal fired power plants were built was because Greenie hysteria effectively halted the construction of environmentally clean nuclear power plants in America nearly 30 years ago, causing the electric power industry to default to building more carbon dioxide producing coal fired power plants. But they aren't about to acknowledge that inconvenient truth.
If the Greenies want to focus on global threats that truly are a clear and present danger they might consider spending their time attacking the problem of deadly bacteria that are becoming resistant to antibiotics and threaten our very existence. A growing number of Americans are dying each year from these superbugs, and very little is being done by medical scientists to develop new drugs to fight this menace. A recent article in the Wall Street Journal said that only 10 new antibiotics have been approved by the Food and Drug Administration since 1998. Right now there are only 13 new antibiotics in development by drug companies compared to more than 60 a decade ago. It appears the American health system is not putting a very high priority on stopping these microscopic killers. Now that is a real problem.
Unfortunately, the Greenies track record with these types of threats is not so stellar either. In fact, perhaps the most damning evidence of the results of their self-righteous crusades hits at the very heart of environmental religion. Rachel Carson is the patron saint of environmentalism, and is often credited with being its progenitor. She published a book in 1962 called "Silent Spring", describing how the insecticide DDT, though non-toxic to humans, was very harmful to a wide range of wildlife. The book created such extensive panic that the chemical was soon banned by most countries in the world.
Prior to Carson's book, DDT was used to control the mosquitoes that spread malaria, which has killed more people than any other disease in history. In fact, according to a recent article in National Geographic, some scientists believe malaria has killed one out every two people who have ever lived. DDT was discovered in the 1940's by a Swiss chemist, and was by far the most effective insecticide for killing mosquitoes ever developed, and at a cost 4 times lower than previous ones.
DDT worked so well that over the decade of the 1950's malaria was basically eliminated in the developed countries of the world, and nearly wiped out in most developing countries. Unfortunately, DDT was heavily overused for agricultural purposes and did create collateral damage to many species of animals. But instead of adopting the more rational approach of limiting the DDT use for agriculture, the result of Carson's book was to eliminate its use altogether.
The unhappy consequence has been the rapid resurgence of malaria around the globe. The World Health Organization estimates that 300 to 500 million people are now afflicted with the disease every year. According to the article in National Geographic, malaria today kills 3,000 children every day in Africa alone. In Zambia, nearly 1 in 5 children die from malaria before they reach the age of 5. A researcher for the National Institutes of Health was quoted as saying, "The ban on DDT may have killed 20 million children". These dreadful statistics are the result of environmentalism taken to the extreme, but no one in the cult will ever acknowledge their culpability.
So the real question is, why would anybody ever believe anything the environmental lunatics have to say? Their arrogantly self-righteous prophesies turn out to be false alarms, and sometimes even deadly as evidenced by the results of the Mother of the Movement's call to action. Never-the-less, they continue to pat themselves on the back, declare their moral virtue and slobber over new-found heroes that are "always wrong but never in doubt".
Monday, July 02, 2007
What Is Wrong With Us?
It seems obvious that every human being's goal in life would be to lead a happy and productive life, free to pursue the living of their choice and to reap the rewards of their efforts. No country in the history of the world has provided better opportunities to achieve those objectives than the United States of America.
Yet the attainment of previously unknown levels of freedom and prosperity in the last few decades has resulted in unimaginable polarization of American society. It has generated a society of greed, arrogance, selfishness and hate - human characteristics that are incompatible with happiness and productivity.
Modern civilization lacks civility. America no longer values the concepts of honesty, integrity, common sense and respect for others. Those who think they have a monopoly on values and principles believe theirs are the only ones that are appropriate, and feel compelled to force them on others. There is no attempt to understand the opinions of others or compromise for the greater good. Everyone is talking and no one is listening. The attitude is I am right, and if you don't agree with me you are an idiot.
What are the causes of this polarization?
1. Politics and Political Parties. They do nothing but demonize and vilify their opponents, constantly portraying the other side as the personification of evil while declaring themselves the saviors of mankind. Furthermore, corruption is rampant as big money allows special interest groups to buy influence, favors and contracts, creating hostile divisions between those who are the beneficiaries of government spending and those who have to pay for it. Americans need to have more choices, whether it be third and fourth parties, or independents. And the campagn system needs to be reformed in a manner that will allow them to get their message across.
2. Journalistic Bias. The mass media is not interested in truth or facts. They publish and broadcast little but opinions designed to influence and control the thinking of the public. They choose what to publish, what not to publish, and slant it in a manner that will convey only their point of view. In a free society there may not be much we can do about that. All one can hope for is that Americans are smart enough to know the truth about journalism and will never allow censorship to silence opposing points of view.
Unfortunately, the current reality of political acrimony and media manipulation of the news has resulted in an American public that is highly misinformed and brainwashed about the most important issues facing modern society.
National Defense and the War on Terror - There seems to be a lack of belief or understanding that brutal, violent people exist who hate us (or more accurately, are jealous of our freedom and prosperity) and will do anything to eliminate us from the face of the earth. It is not important to be liked by the rest of the world. It is important to be prepared to defend what you have when others try to take it from you.
Economic Progress - Capitalism, free markets, fair competition, low taxes and limited government interference have produced the great wealth America has achieved, not redistribution of income, government mandated industrial engineering and high taxes. The tax system should never be used to confiscate the rewards of the productive nor to favor chosen industries or sectors with tax breaks. Socialism works only if the goal is to make everyone equally miserable.
It shouldn't be that difficult to realize liberty means freedom of thought and toleration of opposing views; that our economic system of capitalism and free markets works; and there are bad people out there who want to destroy us because they are insanely jealous of our way of life. Why can't we all understand that and try a little harder to just get along.
Yet the attainment of previously unknown levels of freedom and prosperity in the last few decades has resulted in unimaginable polarization of American society. It has generated a society of greed, arrogance, selfishness and hate - human characteristics that are incompatible with happiness and productivity.
Modern civilization lacks civility. America no longer values the concepts of honesty, integrity, common sense and respect for others. Those who think they have a monopoly on values and principles believe theirs are the only ones that are appropriate, and feel compelled to force them on others. There is no attempt to understand the opinions of others or compromise for the greater good. Everyone is talking and no one is listening. The attitude is I am right, and if you don't agree with me you are an idiot.
What are the causes of this polarization?
1. Politics and Political Parties. They do nothing but demonize and vilify their opponents, constantly portraying the other side as the personification of evil while declaring themselves the saviors of mankind. Furthermore, corruption is rampant as big money allows special interest groups to buy influence, favors and contracts, creating hostile divisions between those who are the beneficiaries of government spending and those who have to pay for it. Americans need to have more choices, whether it be third and fourth parties, or independents. And the campagn system needs to be reformed in a manner that will allow them to get their message across.
2. Journalistic Bias. The mass media is not interested in truth or facts. They publish and broadcast little but opinions designed to influence and control the thinking of the public. They choose what to publish, what not to publish, and slant it in a manner that will convey only their point of view. In a free society there may not be much we can do about that. All one can hope for is that Americans are smart enough to know the truth about journalism and will never allow censorship to silence opposing points of view.
Unfortunately, the current reality of political acrimony and media manipulation of the news has resulted in an American public that is highly misinformed and brainwashed about the most important issues facing modern society.
National Defense and the War on Terror - There seems to be a lack of belief or understanding that brutal, violent people exist who hate us (or more accurately, are jealous of our freedom and prosperity) and will do anything to eliminate us from the face of the earth. It is not important to be liked by the rest of the world. It is important to be prepared to defend what you have when others try to take it from you.
Economic Progress - Capitalism, free markets, fair competition, low taxes and limited government interference have produced the great wealth America has achieved, not redistribution of income, government mandated industrial engineering and high taxes. The tax system should never be used to confiscate the rewards of the productive nor to favor chosen industries or sectors with tax breaks. Socialism works only if the goal is to make everyone equally miserable.
It shouldn't be that difficult to realize liberty means freedom of thought and toleration of opposing views; that our economic system of capitalism and free markets works; and there are bad people out there who want to destroy us because they are insanely jealous of our way of life. Why can't we all understand that and try a little harder to just get along.
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