Yesterday, Obama wielded his scepter of justice to seize GM and Chrysler. If you listened to his speech, you probably would have thanked him for it as well. However, I’ve made a point to read his speeches instead. It helps to cut through the lies he’s spinning. I’ve rearranged the important segments for all to see his double talk.
“Let me be clear: The United States government has no interest in running GM. We have no intention of running GM.”
Let’s be clear folks. Firing the GM is not running GM! Rejecting GM’s plan not because it wouldn’t work, but because “it isn’t strong enough,” that’s too is not running GM! Offering GM capital over the next 60 days is not running GM! In fact, GM is running GM so long as they do exactly what Obama thinks they should do. Chrysler on the other hand, Obama is running. I know this because President Obama decided that Chrysler must merge with Fiat. Plus, he didn’t tell us he wasn’t running Chrysler as he told us with GM.
“But after careful analysis, we’ve determined that neither goes far enough to warrant the substantial new investments that these companies are requesting.”
Who’s analysis? How far is enough? We know that, “…no one can deny that our auto industry has made meaningful progress in recent years – and this doesn’t get talked about often enough. Some of the cars made by American workers right now are outperforming the best cars made abroad. In 2008, the North American Car of the Year was a GM. This year, Buick tied for first place as the most reliable car in the world.” The car of the year by the way was the Chevy Malibu, which is not a hybrid.
“And that’s why we’ll give Chrysler and Fiat 30 days to overcome these hurdles and reach a final agreement.” This is where Obama shows us his golden car company management skills, by tilting Chrysler’s hand to the buying company, Fiat. This is a sure fire way to get tax payer money back, let’s give Fiat a major bargaining chip by setting the time frame and an ultimatum. Truly, Obama cannot be charged with inefficiency. The game of negotiation is a very complex one. If you are going to work out the most favorable deal for Chrysler, then you must use as many tools as possible, not diminish them with rhetoric. Keep in mind, the buy out of Chrysler will probably be used to help repay the tax payers. Glad to see Obama working on the side of Chrysler.
“Now, while Chrysler and GM are very different companies with very different paths forward, both need a fresh start to implement the restructuring plan they develop. That may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger.”
If only this was said and upheld long before we gave these companies a dime. Yet once again, Obama is showing us how the government wastes no money. I thought the billions we have already given, the 6 billion more for the Fiat deal, the billions more for the 60 days of cash influx to GM (surely to be many, many, many more billions), the money the IRS will spend to offer tax credits to buy cars, the tax breaks congress is offering to buy American cars and the backing of warrantees were to keep these companies from going into a disorderly bankruptcy. Now bankruptcy is a way to “clear away debts.” I love how government opens up so many options.
“But what I can promise you is this: I will fight for you. You’re the reason I’m here today…And I won’t pretend that the tough times are over. I can’t promise you there isn’t more difficulty to come…There are jobs that won’t be saved. There are plants that may not reopen.”
Obama will fight for you. Please don’t expect that in fighting for you that you will be getting a job. Also, fighting for you does not mean that plants will be reopening. Hopefully, you will feel better by him spreading the paid around. However, don’t expect your life to be any better. That is not Obama’s business.
“In moments of trial and moments of hardship…Americans rediscover the ingenuity and resilience that makes us who we are.”
I see no ingenuity in anything Obama has been saying. This is a nice “rugged individualism” reference, but there is no place in this speech where individuals are involved in making the auto industry better. In fact, the ideas of individuals were “not strong enough” for Obama. Perhaps, ingenuity is limited solely to Obama’s brilliance.
What Obama has said, speaks for itself. I do not understand the progressive’s blind faith in Obama for the same reason I did not understand the conservative’s blind faith in Bush. The Founders of this country were skeptical of government and for good reason. They defeated a system of tyrants who believed they had a divine right to rule. That elitist attitude has not disappeared but reemerged in the form of our modern day government. We as the people should be expecting more from our elected leaders and demand that they recognize the limits of government that were required by our Founders in the constitution.
Too Big to Fail - 2 of 3 on the new bank bail out
Sunday, March 29, 2009
Too big to fail is more than just a media word being thrown around in the news lately, but a term that has been studied in great detail over the last 30 years in the academia of money and banking. However, many are probably not too familiar with the concept.
Most are already familiar with the first part of the too big to fail scenario. The largest financial institutions are too interconnected to the economy to be allowed to fail when they become distressed. Therefore, the government must come in and bailout the institution. However, there are consequences to the bailout. Many probably are not aware that bailouts promote risky behavior in the financial sector.
Bailouts are nothing new to the Fed and government. Over the past 30 years there have been a consistent number of bailouts including Continent Illinois and the Savings and Loan crisis at the end of the 80’s. The successes of these bailouts have only bolstered the idea that a bailout is a certainty. Most people outraged by the collapse of Fanny and Freddie Mac were people confident that the government would insure the bank's losses. It is important to note that Lehman was the first financial institution that failed to receive a bailout since bailouts began. In fact, it is likely that today’s mortgage crisis is a result of the too big to fail concept playing itself out over the years.
With the confidence of government assistance, where is the threat of failure which forces prudence and good decision making? Going back to Lehman, the company was so sure of a bailout, they had not made strides towards an alternative when they found out they were not going to get assistance. I used to work in the mortgage industry and I worked closely with Citimortgage (the 3rd largest mortgage company with over 3.5 million mortgages). Citimortgage gives us a clue of management’s mentality regarding their risk taking. Prior to the economic meltdown, Citimortgage was working hard building their kingdom of mortgages in their race to be the largest mortgage company in the US. They acquired company after company. All the while, not reviewing loan origination standards nor assessing the risk they were taking by acquiring these loans. In fact, few loans were ever originated by Citimortgage themselves, but were bought up second hand. The focus was clearly on the size of the portfolio and not the substance. Now that they are bailed out, what lesson will they learn and what incentive do they have to change?
Another aspect is that by mitigating the losses of an ailing financial institution, the government allows the poor business practices of the past and often the present to continue without redress. When companies are bailed out, we are not guaranteeing a change in management behavior. The purpose of TARP was to provide money to financial institutions so that they could relieve themselves of their burdened assets. Just as the state stimulus money was to be used for infrastructure, but in actuality many states are using the money for budget gaps. TARP funds were not used to relieve the assets as intended but used as an influx of cash to go into their various operations and protect the company’s earnings. Bailout does not promote change! While AIG may have needed to keep people on the payroll using retention bonuses to do so, how hard were they negotiating when the tax payers were subsidizing the payroll? How much time was spent looking into alternative options? I can only speculate.
Most would rather chalk the recent problem to deregulation, but that is only a piece of the puzzle. Despite deregulation, there are still regulations and regulators, but regulators rarely catch on until it’s too late and no amount of regulation will change that fact. This is because regulation violations are rarely evident until there is a problem. If you walked through the halls of AIG 2 years ago, I'm sure anyone would have been convinced of their stability. Even if there was proper regulation, that does not mean that banks cannot exploit holes in the regulation system. AIG’s troubles were related not to deregulation, but taking advantage of regulation holes. Like computer viruses, no regulation written can be perfect and cover all possibilities. Most regulation issues are not from a lack of regulation, but a gray area in regulation. By the time a regulator has figured it out, the damage is already done.
We are now looking at a new bailout bill, complete with new regulations looking to gain new bailout power (please stay tuned for the next post on why the new regulations are bad). Yet, how will this bailout and these regulations fix the underlying problem above? It will not end the problem of too big to fail, but promote it. It will not deal with the trouble of regulation loopholes; it will create more of them. It will not promote good management in the bailed out companies; it will grant amnesty to them. Finally, it will not end the fact that these bad mortgages have borrowers who cannot pay; it will only forestall the reality until bank bailout number three is needed.
We don’t need new bailouts and we don’t need new regulations. We need the old regulations that helped limit the size of these financial institutions from the time of FDR. This may tighten up the easy credit this country has enjoyed, but in limiting size it should promote competition and keep the cost of credit low. Finally, I believe we need to break up these large companies so that the healthy segments can continue while the troubled ones are allowed to fail.
Most are already familiar with the first part of the too big to fail scenario. The largest financial institutions are too interconnected to the economy to be allowed to fail when they become distressed. Therefore, the government must come in and bailout the institution. However, there are consequences to the bailout. Many probably are not aware that bailouts promote risky behavior in the financial sector.
Bailouts are nothing new to the Fed and government. Over the past 30 years there have been a consistent number of bailouts including Continent Illinois and the Savings and Loan crisis at the end of the 80’s. The successes of these bailouts have only bolstered the idea that a bailout is a certainty. Most people outraged by the collapse of Fanny and Freddie Mac were people confident that the government would insure the bank's losses. It is important to note that Lehman was the first financial institution that failed to receive a bailout since bailouts began. In fact, it is likely that today’s mortgage crisis is a result of the too big to fail concept playing itself out over the years.
With the confidence of government assistance, where is the threat of failure which forces prudence and good decision making? Going back to Lehman, the company was so sure of a bailout, they had not made strides towards an alternative when they found out they were not going to get assistance. I used to work in the mortgage industry and I worked closely with Citimortgage (the 3rd largest mortgage company with over 3.5 million mortgages). Citimortgage gives us a clue of management’s mentality regarding their risk taking. Prior to the economic meltdown, Citimortgage was working hard building their kingdom of mortgages in their race to be the largest mortgage company in the US. They acquired company after company. All the while, not reviewing loan origination standards nor assessing the risk they were taking by acquiring these loans. In fact, few loans were ever originated by Citimortgage themselves, but were bought up second hand. The focus was clearly on the size of the portfolio and not the substance. Now that they are bailed out, what lesson will they learn and what incentive do they have to change?
Another aspect is that by mitigating the losses of an ailing financial institution, the government allows the poor business practices of the past and often the present to continue without redress. When companies are bailed out, we are not guaranteeing a change in management behavior. The purpose of TARP was to provide money to financial institutions so that they could relieve themselves of their burdened assets. Just as the state stimulus money was to be used for infrastructure, but in actuality many states are using the money for budget gaps. TARP funds were not used to relieve the assets as intended but used as an influx of cash to go into their various operations and protect the company’s earnings. Bailout does not promote change! While AIG may have needed to keep people on the payroll using retention bonuses to do so, how hard were they negotiating when the tax payers were subsidizing the payroll? How much time was spent looking into alternative options? I can only speculate.
Most would rather chalk the recent problem to deregulation, but that is only a piece of the puzzle. Despite deregulation, there are still regulations and regulators, but regulators rarely catch on until it’s too late and no amount of regulation will change that fact. This is because regulation violations are rarely evident until there is a problem. If you walked through the halls of AIG 2 years ago, I'm sure anyone would have been convinced of their stability. Even if there was proper regulation, that does not mean that banks cannot exploit holes in the regulation system. AIG’s troubles were related not to deregulation, but taking advantage of regulation holes. Like computer viruses, no regulation written can be perfect and cover all possibilities. Most regulation issues are not from a lack of regulation, but a gray area in regulation. By the time a regulator has figured it out, the damage is already done.
We are now looking at a new bailout bill, complete with new regulations looking to gain new bailout power (please stay tuned for the next post on why the new regulations are bad). Yet, how will this bailout and these regulations fix the underlying problem above? It will not end the problem of too big to fail, but promote it. It will not deal with the trouble of regulation loopholes; it will create more of them. It will not promote good management in the bailed out companies; it will grant amnesty to them. Finally, it will not end the fact that these bad mortgages have borrowers who cannot pay; it will only forestall the reality until bank bailout number three is needed.
We don’t need new bailouts and we don’t need new regulations. We need the old regulations that helped limit the size of these financial institutions from the time of FDR. This may tighten up the easy credit this country has enjoyed, but in limiting size it should promote competition and keep the cost of credit low. Finally, I believe we need to break up these large companies so that the healthy segments can continue while the troubled ones are allowed to fail.
A New Kind of Depression - 1 of 3 on the new bank bailout
Thursday, March 26, 2009
Obama, Bush, Democrat, and Republican all have sinned in the area of fiscal responsibility. Where a prudent person would save and prepare for tougher times, the Bush administration spent like a lottery winner on steroids. Bringing us to the current administration whose goals cannot be postponed for the sake of economic crisis. Instead of working with the resources available at the time of his inauguration, Obama wines “I inherited this economy” expecting the populous to restrain their cries for immediate relief and persevere in the hopes that spending will one day in the future create new jobs. Meanwhile, they ignore the devastating macroeconomic movements going on in the global economy.
Enough of the candidates and the parties, it’s too late. We may one day start to see a turnaround in the economy, but the damage has been done. The media has glanced over several important events over the last two months that have far reaching implications for lower and middle class Americans. In case you missed it, here is what has been going on.
In February, the Chinese asked Obama and congress to do “the honorable thing” in relation to the country’s spending. Obama immediately held a fiscal responsibility seminar in an attempt to curb the perception that he is only concerned about spending. However, since his fiscal meeting Obama failed to veto the omnibus bill, proposed dramatic increases in spending in his budget and all the while promising to cut some, but not all of the deficit spending in the years to come. Obama may have stemmed some of the criticism at home, but his moves have not bolstered confidence in the world economy. Please pay attention to the next statement. Normally, deficit spending would be backed by the sale of treasuries sold by the Fed. Seeing that no one would finance our debt, for the first time since WWII ended the Fed began printing money. The difficulty in selling our debt has continued with a poor showing at the US Treasury auction yesterday nearly sending the stock markets into a free fall. In the meantime, China and other G20 countries are working hard to establish a form of world currency with the purpose of dumping the dollar.
So what does this mean? It means in certain terms that any recovery in the US will be greeted with Carter style stagflation at best and a new kind of depression at worst. This new US depression will look a lot like the last depression. However, in this depression food for pennies and empty pockets will be replaced with food for hundred dollar bills while everyone has a room of dollar bills that are worth nothing.
How can I be so sure? You may not be aware of this, but the US dollar is the currency of the world. Much of the world holds US dollars in their vaults to bring value to their currency. Our currency only has value so long as people who believe the dollar has value continue to believe in that value. That principle has held water since the Bretton Wood standard was repealed in the seventies. However, once the dollar starts being dumped worldwide, our currency will be rendered useless. We had a small taste of this when China decided to dump some of their dollars in favor of diversifying with the Euro. That action alone has been the main reason for the decrease of the dollar’s value in recent years. In response, we saw more jobs move overseas and gas prices sky rocket. That was only one country dumping some of their dollars.
The threat of dumping dollars was always a constant, but the recent increase in dollar creation only precipitates the problem. Believe it or not, dollars are just like any other commodity. The more dollars there are in the world that people hold but don’t want, the more devalued the dollar gets. It’s just like stocks. If the world is selling dollars, the stock plunges. A new world currency would only solidify the dollar’s devaluation by creating an independent currency that can be recognized outside of the dollar.
Of course there is no sweating at the Fed or the Federal Government. A drastically devalued dollar does not mean that spending must be cut or taxes increase. In fact, the policy of inflating the dollar only makes it easier to pay off debt. The conservative argument that our children will pay higher taxes is ridiculous. Here is why. We owe a certain amount in the future. There is interest involved, but the term of the debt is fixed. Today our money is worth a certain amount and in the future we owe a certain amount of funds. We can simply print money, like counterfeiting, to pay this debt legally and the borrowers must accept the money, but the price is a worthless currency.
This has very serious implications for the middle class, but mostly the poor who have been counting on government transfer payments. They may be struggling now, but the money they do receive does have value. With hyperinflation, it doesn’t matter how much money the government gives them, their money will be worthless. In fact, the more we print dollars and send them to the poor, the more worthless the money will be. Many in the middle class who have saved long will find their savings worthless. I’m talking far beyond the 50% hit they took in the stock market. The best part is, the rich may take a huge hit in their wealth, but ultimately they will remain rich, because they have a lot of the one thing neither the middle nor poor classes have much of; tangible assets.
Let’s put everything on the table. I understand the goals of the American left. Let’s assume that those goals are all things that should be done. Should we not put out the current fire in our economy before advancing the agenda? Should we not get a control over government spending first and then seek the changes that the left feel is needed? Regardless of your anger and regardless of your ethnic or social status, everyone in this country is facing the same fate. Could this be the one issue we could unite and come together on or do you agree with Obama, that the spending can continue unchecked and unbridled? Let's decide not to lose the value we have in our dollar so that we can send banks more money. Let's decide to put the social agenda on hold until spending in Washington is on a tight leash for good.
Enough of the candidates and the parties, it’s too late. We may one day start to see a turnaround in the economy, but the damage has been done. The media has glanced over several important events over the last two months that have far reaching implications for lower and middle class Americans. In case you missed it, here is what has been going on.
In February, the Chinese asked Obama and congress to do “the honorable thing” in relation to the country’s spending. Obama immediately held a fiscal responsibility seminar in an attempt to curb the perception that he is only concerned about spending. However, since his fiscal meeting Obama failed to veto the omnibus bill, proposed dramatic increases in spending in his budget and all the while promising to cut some, but not all of the deficit spending in the years to come. Obama may have stemmed some of the criticism at home, but his moves have not bolstered confidence in the world economy. Please pay attention to the next statement. Normally, deficit spending would be backed by the sale of treasuries sold by the Fed. Seeing that no one would finance our debt, for the first time since WWII ended the Fed began printing money. The difficulty in selling our debt has continued with a poor showing at the US Treasury auction yesterday nearly sending the stock markets into a free fall. In the meantime, China and other G20 countries are working hard to establish a form of world currency with the purpose of dumping the dollar.
So what does this mean? It means in certain terms that any recovery in the US will be greeted with Carter style stagflation at best and a new kind of depression at worst. This new US depression will look a lot like the last depression. However, in this depression food for pennies and empty pockets will be replaced with food for hundred dollar bills while everyone has a room of dollar bills that are worth nothing.
How can I be so sure? You may not be aware of this, but the US dollar is the currency of the world. Much of the world holds US dollars in their vaults to bring value to their currency. Our currency only has value so long as people who believe the dollar has value continue to believe in that value. That principle has held water since the Bretton Wood standard was repealed in the seventies. However, once the dollar starts being dumped worldwide, our currency will be rendered useless. We had a small taste of this when China decided to dump some of their dollars in favor of diversifying with the Euro. That action alone has been the main reason for the decrease of the dollar’s value in recent years. In response, we saw more jobs move overseas and gas prices sky rocket. That was only one country dumping some of their dollars.
The threat of dumping dollars was always a constant, but the recent increase in dollar creation only precipitates the problem. Believe it or not, dollars are just like any other commodity. The more dollars there are in the world that people hold but don’t want, the more devalued the dollar gets. It’s just like stocks. If the world is selling dollars, the stock plunges. A new world currency would only solidify the dollar’s devaluation by creating an independent currency that can be recognized outside of the dollar.
Of course there is no sweating at the Fed or the Federal Government. A drastically devalued dollar does not mean that spending must be cut or taxes increase. In fact, the policy of inflating the dollar only makes it easier to pay off debt. The conservative argument that our children will pay higher taxes is ridiculous. Here is why. We owe a certain amount in the future. There is interest involved, but the term of the debt is fixed. Today our money is worth a certain amount and in the future we owe a certain amount of funds. We can simply print money, like counterfeiting, to pay this debt legally and the borrowers must accept the money, but the price is a worthless currency.
This has very serious implications for the middle class, but mostly the poor who have been counting on government transfer payments. They may be struggling now, but the money they do receive does have value. With hyperinflation, it doesn’t matter how much money the government gives them, their money will be worthless. In fact, the more we print dollars and send them to the poor, the more worthless the money will be. Many in the middle class who have saved long will find their savings worthless. I’m talking far beyond the 50% hit they took in the stock market. The best part is, the rich may take a huge hit in their wealth, but ultimately they will remain rich, because they have a lot of the one thing neither the middle nor poor classes have much of; tangible assets.
Let’s put everything on the table. I understand the goals of the American left. Let’s assume that those goals are all things that should be done. Should we not put out the current fire in our economy before advancing the agenda? Should we not get a control over government spending first and then seek the changes that the left feel is needed? Regardless of your anger and regardless of your ethnic or social status, everyone in this country is facing the same fate. Could this be the one issue we could unite and come together on or do you agree with Obama, that the spending can continue unchecked and unbridled? Let's decide not to lose the value we have in our dollar so that we can send banks more money. Let's decide to put the social agenda on hold until spending in Washington is on a tight leash for good.
Coming posts
Tuesday, March 24, 2009
I have been wanting to do a series of posts regarding values and principles. An attempt to try and understand where the political bloggers today are coming from.
However, I'm putting that series on hold for the time being. I want to do two nonbiased posts on the state of the economy and the 2nd bank bail out. First, I wanted to talk about the classic case of "Too Big to Fail." I don't know if you've heard that word thrown around, however it is an actual concept in the acedemia of money and banking. There is a high level concept regarding what is going on that is being missed by most commentators regarding these bailouts. I think most would be interested to hear how the theory of "Too Big to Fail" plays out in economic thought and how closely it mirrors what is going on. Second, I want to do a post on some of the important changes with regard to our debt management as a country and how the world is responding. We are seriously headed down a path that I am not sure many people understand. Putting capitalism and socialism arguments aside, there are some very serious implications for the continued trillion dollar a month spending. You may be interested to find out exactly where we are going to find ourselves, should our government fail to see the road ahead.
If your interested, check back in a few days for an indepth explanation of what's going on behind the scenes.
However, I'm putting that series on hold for the time being. I want to do two nonbiased posts on the state of the economy and the 2nd bank bail out. First, I wanted to talk about the classic case of "Too Big to Fail." I don't know if you've heard that word thrown around, however it is an actual concept in the acedemia of money and banking. There is a high level concept regarding what is going on that is being missed by most commentators regarding these bailouts. I think most would be interested to hear how the theory of "Too Big to Fail" plays out in economic thought and how closely it mirrors what is going on. Second, I want to do a post on some of the important changes with regard to our debt management as a country and how the world is responding. We are seriously headed down a path that I am not sure many people understand. Putting capitalism and socialism arguments aside, there are some very serious implications for the continued trillion dollar a month spending. You may be interested to find out exactly where we are going to find ourselves, should our government fail to see the road ahead.
If your interested, check back in a few days for an indepth explanation of what's going on behind the scenes.
Government a Lesson in Failure
Tuesday, March 17, 2009
The narrative in the media has the AIG story all wrong. We read about AIG bonuses and are outraged. We read about how taxpayer money was spent at AIG and are outraged. However, let’s not forget the people with the keys to the safe. It is those who rushed to come up with TARP and did not come up with an efficient method to ensure how the funds were to be used. The true culprits are the politicians in Washington. When you give money to a company too big to fail and too incompetent to exist, then provide them with free money, what do you think they will do? Did you think that suddenly a culture of responsibility would bloom over night? The big point is that our government is a poor and inefficient keeper of taxpayer money.
For those of you who are excited about government health care and all manner of social programs beware like government college education. AIG is just one of a long list of wasteful examples. Already stimulus money to be use for infrastructure is being wasted to fill state budget gaps (*cough* NY *cough* David Patterson). Who is surprised? Did you think embarrassment from Obama would rein in the state members of his own party? What arrogance.
If you disagree with me, then please name me a government program that works? We spend more per student than any other nation, yet our students are not the best (could it be that parents have more of a role in education than any amount of money that can be spent?). Social security is on life support and will cost younger generations if not repaired (Could this be from the inability of congress to plan for the possibility that successive generations may not continue to grow in population?) AMT, which was to ensure that the rich paid their fair share, nearly soaked millions of the middle class (Could it be that politicians are more concerned about raising tax revenue?).
I will agree that reforms need to be made and some programs should exist, but let’s not let the spotlight fall solely to the addicts, while we let the pushers off the hook. Shame on Obama for pointing the finger at AIG and not admitting the failure of the Treasury Department who was responsible for oversight (They had a blank check from congress if you remember). Shame on congress for pointing the finger at AIG and not admitting that they were the enablers. This type of reckless oversight of tax payer money will continue so long as we let the guilty shift all the blame to their cohorts.
For those of you who are excited about government health care and all manner of social programs beware like government college education. AIG is just one of a long list of wasteful examples. Already stimulus money to be use for infrastructure is being wasted to fill state budget gaps (*cough* NY *cough* David Patterson). Who is surprised? Did you think embarrassment from Obama would rein in the state members of his own party? What arrogance.
If you disagree with me, then please name me a government program that works? We spend more per student than any other nation, yet our students are not the best (could it be that parents have more of a role in education than any amount of money that can be spent?). Social security is on life support and will cost younger generations if not repaired (Could this be from the inability of congress to plan for the possibility that successive generations may not continue to grow in population?) AMT, which was to ensure that the rich paid their fair share, nearly soaked millions of the middle class (Could it be that politicians are more concerned about raising tax revenue?).
I will agree that reforms need to be made and some programs should exist, but let’s not let the spotlight fall solely to the addicts, while we let the pushers off the hook. Shame on Obama for pointing the finger at AIG and not admitting the failure of the Treasury Department who was responsible for oversight (They had a blank check from congress if you remember). Shame on congress for pointing the finger at AIG and not admitting that they were the enablers. This type of reckless oversight of tax payer money will continue so long as we let the guilty shift all the blame to their cohorts.
Accusing the Rich in America
Monday, March 16, 2009
If you didn’t hear about the bonuses received by AIG executives today then you must have been asleep. AIG who received billions in TARP money issued bonuses to executives (stated the second time for emphasis). I’m tired of the lavish living of the rich in this country. It simply isn’t fair.
I do not understand why we stand for it? It is detestable that the rich in the US have such a feeling of entitlement that they mismanage government assistance, they misuse the tax payer's money. It is a mockery to the people who struggle every day. I’m talking about the people that live in absolute misery. They work themselves to the bone to better their lot in life and to no avail. These people are doomed because of their situation. Doomed because of the station in life they were born into.
Those of you who agree, I ask you to join me in redressing this wrong. We need to come together and take a stand for the underprivileged. It is time we get back this wealth that has been horded. We must do so by force if needed.
What social status are you in? Upper, middle, lower, or poor class in America? Did you think I was referring to the US CEOs or people making more than 250k? No, I was referring to those on welfare and those who receive government assistance. Most of the world's wealth is located in the US. Even our poorest of poor are richer than rich in comparison to the average wealth of any citizen on this planet.
Yet the rich poor in this country are envious. They are livid about their station in life. They argue that they are victims of a society bent at holding them down. They point to poor living conditions, yet even our poorest has the ability to get some health care. Our poorest have not had to live in a war torn nation like the People’s Republic of Congo. Even our poorest have easy access to food. Our poorest are rich.
When one in the US complains about the rich, they condemn themselves to the indignation of billions of others in this world who are worse off. I am not beyond compassion. I believe there is much that can and should be done for the less fortunate in this country, but the anger is hypocritical. They are angry that the wealth is concentrated at the top, that they are held down and should get their fair share. Are these same people willing to give their fair share to the more needful in the world if the same argument was brought to them? I submit that they would condemn the idea, they would turn their back on the more needful in the world. Is the envy of the poor more righteous then the greed of the rich?
Surprisingly, the rich are generous in their donations. They donate to the community and they donate lavishly to world causes. It’s not hard to find, their names are on buildings of hospitals, schools, and museums. What has our rich poor given? What is their contribution? If they are to be truthful to their point of view, then they should get ACORN to start demanding taxes on the poor to send over seas. Don’t hold your breathe, I don’t think we are going to see this in the news anytime soon.
I do not understand why we stand for it? It is detestable that the rich in the US have such a feeling of entitlement that they mismanage government assistance, they misuse the tax payer's money. It is a mockery to the people who struggle every day. I’m talking about the people that live in absolute misery. They work themselves to the bone to better their lot in life and to no avail. These people are doomed because of their situation. Doomed because of the station in life they were born into.
Those of you who agree, I ask you to join me in redressing this wrong. We need to come together and take a stand for the underprivileged. It is time we get back this wealth that has been horded. We must do so by force if needed.
What social status are you in? Upper, middle, lower, or poor class in America? Did you think I was referring to the US CEOs or people making more than 250k? No, I was referring to those on welfare and those who receive government assistance. Most of the world's wealth is located in the US. Even our poorest of poor are richer than rich in comparison to the average wealth of any citizen on this planet.
Yet the rich poor in this country are envious. They are livid about their station in life. They argue that they are victims of a society bent at holding them down. They point to poor living conditions, yet even our poorest has the ability to get some health care. Our poorest have not had to live in a war torn nation like the People’s Republic of Congo. Even our poorest have easy access to food. Our poorest are rich.
When one in the US complains about the rich, they condemn themselves to the indignation of billions of others in this world who are worse off. I am not beyond compassion. I believe there is much that can and should be done for the less fortunate in this country, but the anger is hypocritical. They are angry that the wealth is concentrated at the top, that they are held down and should get their fair share. Are these same people willing to give their fair share to the more needful in the world if the same argument was brought to them? I submit that they would condemn the idea, they would turn their back on the more needful in the world. Is the envy of the poor more righteous then the greed of the rich?
Surprisingly, the rich are generous in their donations. They donate to the community and they donate lavishly to world causes. It’s not hard to find, their names are on buildings of hospitals, schools, and museums. What has our rich poor given? What is their contribution? If they are to be truthful to their point of view, then they should get ACORN to start demanding taxes on the poor to send over seas. Don’t hold your breathe, I don’t think we are going to see this in the news anytime soon.
Obama a Presidential Leader?
Tuesday, March 10, 2009
The truth is this country gambled on Obama. With no resume or experience to base our decision, we judged him by his ability to use a teleprompter, his talent at campaigning and the promise of a different direction than Bush. From his oratory, we ascribed Obama intelligence and leadership. Although a gleaming political resume is not a requirement for being a successful President (Think Lincoln, a two term congressman who never proposed a bill in his life), some people will simply never be able to fill the shoes. I pride myself on being a good observer and so I’ve listed a few things that I’ve been watching in Obama. Please note; these are purely conjectures, but all the same, something worth keeping your eye on.
Obama is possibly inadequate to fill all of the roles of the President. For those of you that don’t know what they are, they are commander in chief, Head of state, and executive in chief. We haven’t seen much from him on the commander and chief side, but then again, this may or may not be a strike against him.
• Head of state – Where is Obama on the national scene? Iran is getting closer to being a nuclear state (very public about it too), North Korea is rattling the saber, and China is practicing cold war tactics in international waters. Yet, Obama has no comment, no direction, nor policy. He’s left Clinton (no experience as an ambassador) to herself. It’s clear his administration wants to change our foreign policies. However, it’s naïve to believe that world leaders will open their doors because you speak well and are not Bush. We’ve heard a lot about how the world views Obama better, but that has not turned into any action of substance. We’ve extended a reset button to Russia in regards to our nation’s relations. They’ve rejected it. So far Obama has strained ties with NATO Eastern European Countries and Israel to reach out to Russia, Palestine, Syria, and Iran. All the while, he has done so publically, but silently. Each turn has been fruitless, except indignation from countries we’ve long been allies. Obama snubbed Britain when Brown was in Washington. Whether he was ignorant or deliberate, I do not know which is worse.
• Executive in chief – Geithner has been going down in flames. He has not appointed any staff to his department and has failed to give any details on his department’s actions. Obama is his boss and needs to rein him in. Coach him if needed, provided Obama understands what is going on, which I am doubtful. Obama is absent from foreign policy as noted above, leaving an inexperienced Clinton to sink or swim. What about his cabinet chief vetting process (I’m not saying anymore there).
Meanwhile, where is Obama while the economy is in crisis and the world is looking to the US for our new foreign policy? He’s campaigning for the stimulus he’s already signed. Now, I know a little about leadership. I have a long history in leadership. I have mentored others to become leaders and studied leadership academically. There are a few things that I know about the subject. For example, how do incapable leaders deal with their insecurities? One of the most used methods is to engage only in the tasks with which they are successful, even to the detriment of achieving one’s goals. For example, a successful accountant turned gas station manager. Perhaps, the gas station is suffering from lack of business and the accountant needs to get more clients. Instead, our incapable accountant leader will lock the office door and obsess about the books. He’ll focus on making sure the cash register is not short or over. He’ll focus in on the time you clock in. While facing something they’ve never done before, they will resort to whatever activities they feel most comfortable to relax their inadequacies.
Obama is out promoting his stimulus plan, but for what reason? Sure he’s come under fire and I can understand the desire to defend his actions, but he’s not up for election anytime soon. There is plenty of time for his plan to take effect and work or not work. Either way, his stimulus promotion now will be worthless by the time we the people determine the outcome. So why is he out campaigning? Most politicians campaign for their bills until they are passed and move on. Could it be that he feels inadequate and is using a new campaign to distract him from his insecurities? After all, campaigning is one of the few things he does well.
Now I understand and agree it’s too early to make a final judgment on Obama. He may be doing what Bush should have been doing with the Iraq war. Still, since we don’t know Obama, we can only be left with the idea that our President may be in over his head.
Obama is possibly inadequate to fill all of the roles of the President. For those of you that don’t know what they are, they are commander in chief, Head of state, and executive in chief. We haven’t seen much from him on the commander and chief side, but then again, this may or may not be a strike against him.
• Head of state – Where is Obama on the national scene? Iran is getting closer to being a nuclear state (very public about it too), North Korea is rattling the saber, and China is practicing cold war tactics in international waters. Yet, Obama has no comment, no direction, nor policy. He’s left Clinton (no experience as an ambassador) to herself. It’s clear his administration wants to change our foreign policies. However, it’s naïve to believe that world leaders will open their doors because you speak well and are not Bush. We’ve heard a lot about how the world views Obama better, but that has not turned into any action of substance. We’ve extended a reset button to Russia in regards to our nation’s relations. They’ve rejected it. So far Obama has strained ties with NATO Eastern European Countries and Israel to reach out to Russia, Palestine, Syria, and Iran. All the while, he has done so publically, but silently. Each turn has been fruitless, except indignation from countries we’ve long been allies. Obama snubbed Britain when Brown was in Washington. Whether he was ignorant or deliberate, I do not know which is worse.
• Executive in chief – Geithner has been going down in flames. He has not appointed any staff to his department and has failed to give any details on his department’s actions. Obama is his boss and needs to rein him in. Coach him if needed, provided Obama understands what is going on, which I am doubtful. Obama is absent from foreign policy as noted above, leaving an inexperienced Clinton to sink or swim. What about his cabinet chief vetting process (I’m not saying anymore there).
Meanwhile, where is Obama while the economy is in crisis and the world is looking to the US for our new foreign policy? He’s campaigning for the stimulus he’s already signed. Now, I know a little about leadership. I have a long history in leadership. I have mentored others to become leaders and studied leadership academically. There are a few things that I know about the subject. For example, how do incapable leaders deal with their insecurities? One of the most used methods is to engage only in the tasks with which they are successful, even to the detriment of achieving one’s goals. For example, a successful accountant turned gas station manager. Perhaps, the gas station is suffering from lack of business and the accountant needs to get more clients. Instead, our incapable accountant leader will lock the office door and obsess about the books. He’ll focus on making sure the cash register is not short or over. He’ll focus in on the time you clock in. While facing something they’ve never done before, they will resort to whatever activities they feel most comfortable to relax their inadequacies.
Obama is out promoting his stimulus plan, but for what reason? Sure he’s come under fire and I can understand the desire to defend his actions, but he’s not up for election anytime soon. There is plenty of time for his plan to take effect and work or not work. Either way, his stimulus promotion now will be worthless by the time we the people determine the outcome. So why is he out campaigning? Most politicians campaign for their bills until they are passed and move on. Could it be that he feels inadequate and is using a new campaign to distract him from his insecurities? After all, campaigning is one of the few things he does well.
Now I understand and agree it’s too early to make a final judgment on Obama. He may be doing what Bush should have been doing with the Iraq war. Still, since we don’t know Obama, we can only be left with the idea that our President may be in over his head.
Political Distraction
Thursday, March 5, 2009
I was surprised this week to be hearing so much about Rush Limbaugh. I see it in the blogs I read, in the TV and print news. We hear Robert Gibbs and White House aides talking about him. To what end do we owe all this interest in Rush Limbaugh? Is he announcing his candidacy for office? Have all foreign and domestic issues been so completely solved that it is now time to focus on a single comment made by a radio host?
The buzz from a single comment taken out of context has caused more stories than I can count. Born on the false premise that wishing Obama to fail is the same as wishing ill on the economy, liberals have jumped into a frenzied spin of righteous indignation. However, if you think as I do, that Obama’s policies are bad for America and will ruin the economy, then his comments seem warranted.
A report from Fox News hinted at the reason for Rush’s comments to be targeted by the White House. While polling in the White House war room, they found that Rush Limbaugh has high negatives making him a good target for political punishment. Despite the buzz and coverage, their campaign to end conservatism through a media smear of Rush will not succeed.
There is an overwhelming misunderstanding from the liberal side regarding how conservative republicans think. What they do not realize is that our school of thought is based on principles that we believe and look to for guidance. When a Republican or self proclaimed Conservative looses track of those principles, they loose support (Bush for example). You see the Liberal side focus solely on their leaders and look to their leaders to set the guiding principles of their beliefs. If the leader is found to be false, their ideals are found to be false. This is why so many liberals feel conservatism died with Bush. This is why many cannot cope with the so many broken promises already made by Obama. A failure of Obama is a failure of their beliefs.
Our principles transcend our leaders. The Republican Party is now weak, not because conservatism has failed, but that conservative leaders have walked away from the principles. So when the liberal hit men look to discredit conservatism by making Rush the de facto leader, they are doomed to failure. The truth behind the conservative principles do not cease simply because they are misrepresented by liberals or conservatives. They stand for themselves as the back bone behind over 200 years of this country’s history. I’m sorry to all who are salivating for the end of conservatism, but the principles will continue even your lifetime.
The buzz from a single comment taken out of context has caused more stories than I can count. Born on the false premise that wishing Obama to fail is the same as wishing ill on the economy, liberals have jumped into a frenzied spin of righteous indignation. However, if you think as I do, that Obama’s policies are bad for America and will ruin the economy, then his comments seem warranted.
A report from Fox News hinted at the reason for Rush’s comments to be targeted by the White House. While polling in the White House war room, they found that Rush Limbaugh has high negatives making him a good target for political punishment. Despite the buzz and coverage, their campaign to end conservatism through a media smear of Rush will not succeed.
There is an overwhelming misunderstanding from the liberal side regarding how conservative republicans think. What they do not realize is that our school of thought is based on principles that we believe and look to for guidance. When a Republican or self proclaimed Conservative looses track of those principles, they loose support (Bush for example). You see the Liberal side focus solely on their leaders and look to their leaders to set the guiding principles of their beliefs. If the leader is found to be false, their ideals are found to be false. This is why so many liberals feel conservatism died with Bush. This is why many cannot cope with the so many broken promises already made by Obama. A failure of Obama is a failure of their beliefs.
Our principles transcend our leaders. The Republican Party is now weak, not because conservatism has failed, but that conservative leaders have walked away from the principles. So when the liberal hit men look to discredit conservatism by making Rush the de facto leader, they are doomed to failure. The truth behind the conservative principles do not cease simply because they are misrepresented by liberals or conservatives. They stand for themselves as the back bone behind over 200 years of this country’s history. I’m sorry to all who are salivating for the end of conservatism, but the principles will continue even your lifetime.
Economic News to Watch
1# - The stock market closed in positive numbers yesterday on the news that China is planning a stimulus. This is an obvious slap in the face to Obama, since his own stimulus was greeted with a free fall market. Adding insult to injury, the market is responding positively to China of all places. China is releasing details this weekend. Watch the market Monday to see if investors give the stimulus a thumbs up. Liberals will make sure to pay attention. If China proposes an Obama style stimulus, they you can be sure there is at least a good deal of bias in the market.
2# - The dollar has been gaining strength over the last few months. This is important because it is a sign that investors expect deflation in the near future. Just to let you know, deflation is worse than inflation and is in part what made the depression such a disaster.
That’s it for today’s quick update.
2# - The dollar has been gaining strength over the last few months. This is important because it is a sign that investors expect deflation in the near future. Just to let you know, deflation is worse than inflation and is in part what made the depression such a disaster.
That’s it for today’s quick update.
Quick Commentary on Cap and Trade
Wednesday, March 4, 2009
I have a lot to say, so I'm going to try and be brief in the next few posts and focus on a few developments. I'd really like to dedicate an article to each and give them fair and thorough treatment, but at the rate the government is preceding my points would be moot by the time I had a chance to write about them.
Geithner gave details on some of Obama’s economic policies today. In discussing taxes and or costs that would be increasing, he mentioned that a cap and trade system that would be implemented on carbon polluters. He stated that people’s energy bills would be affected as coal power plants are responsible for a large amount of carbon pollution. Quote Geithner, "Now, if people don't change how they use energy, then they will face higher costs for energy.” Now don’t get me wrong, I’m actually for clean energy. However, Obama has tied our hands on this one. Nuclear energy does not produce carbon and is the most efficient energy developed. Coupled with electric cars, a power grid fueled by nuclear energy could easily end oil dependence and carbon pollution. So why doesn’t Obama take it seriously? I can’t figure it out. As far as Geithner’s comments go, most of the energy I use (and I do use a lot) is over the winter to heat my home. I’m sorry, but I need the heat to live, my habits do not have the ability to change and therefore my middle class income will be taking a serious hit. Thanks for standing up for the little guy Obama team.
I feel it is a big mistake for Obama to rule out nuclear energy when it is the most promising solution. With nuclear energy, we may not even need to resort to cap and trade, or may reduce the negative effects of implementing cap and trade. However, I strongly believe that Obama has ruled out expanding nuclear energy, because he wants the tax revenue by imposing carbon restrictions that cannot be realistically achieved. What are your thoughts?
Geithner gave details on some of Obama’s economic policies today. In discussing taxes and or costs that would be increasing, he mentioned that a cap and trade system that would be implemented on carbon polluters. He stated that people’s energy bills would be affected as coal power plants are responsible for a large amount of carbon pollution. Quote Geithner, "Now, if people don't change how they use energy, then they will face higher costs for energy.” Now don’t get me wrong, I’m actually for clean energy. However, Obama has tied our hands on this one. Nuclear energy does not produce carbon and is the most efficient energy developed. Coupled with electric cars, a power grid fueled by nuclear energy could easily end oil dependence and carbon pollution. So why doesn’t Obama take it seriously? I can’t figure it out. As far as Geithner’s comments go, most of the energy I use (and I do use a lot) is over the winter to heat my home. I’m sorry, but I need the heat to live, my habits do not have the ability to change and therefore my middle class income will be taking a serious hit. Thanks for standing up for the little guy Obama team.
I feel it is a big mistake for Obama to rule out nuclear energy when it is the most promising solution. With nuclear energy, we may not even need to resort to cap and trade, or may reduce the negative effects of implementing cap and trade. However, I strongly believe that Obama has ruled out expanding nuclear energy, because he wants the tax revenue by imposing carbon restrictions that cannot be realistically achieved. What are your thoughts?
Democrats Need to Learn from Republican Failures
Monday, March 2, 2009
Recent Democratic rhetoric may be lofty, but actions speak louder than words. I’ve posted a few articles over the last few days that demonstrate the hypocrisy and double talk of today’s democratic politician. Although these examples are not easy to find in main stream media, that does not mean that people will not hear nor remember these instances. It is dangerous for any party, to lose the respect and trust of the American voter. I you don’t believe me, just look at the Republican Party.
Here is a list of some of the promises made by the ruling democratic leaders (Obama, Pelosi, and Reid) that they are not taking seriously or actions that are hypocritical to their cause:
1. Promising fiscal responsibility while spending irresponsibly. Rasmussen shows that fiscal responsibility is the one issue most people are concerned with. We have been promised fiscal responsibility and none of Obama’s bills encourage or take into account fiscal responsibility. Perhaps, this is something we are will need to wait until his second term for?
2. Promising the end of earmarks, but allowing approximately 9,000 of them in the omnibus bill. Their claims the bill is really Bush’s bill, not Obama’s, is ridiculous. They say possession is nine tenths of the law and the bill will be in Obama’s hands if it is signed.
3. Forcing people, not politicians to except green initiatives. I posted an article today regarding congress’ plan to ease pollution restrictions on the power plant they use and their refusal to buy pollution credits to offset.
4. Promising accountability, while taking concealment to new levels. Obama promised to post all bills for 5 days before congress votes. Congress promised to allow 2 days to view the stimulus bill before voting. The American public and politicians had 12 hours.
5. Promising that the Democratic Party will be the party of Ethics. The list is long, but governors from New York, Illinois, and Arizona are all involved in major scandals. Three tax cheats were picked for Obama’s cabinet. One new senator already looking at perjury charges. This is only the beginning
I could go on, but I don’t want to write a book. Most of these have occurred in only the last month since Obama took office. Democrats should stop and take notice of this list and begin to align their rhetoric to match what they are actually perpetuating through their actions. Some suggest that the people of this country have been swayed to the left way of thought. They believe this shift will continue in the future. They couldn’t be more wrong. Conservatism by definition is an attempt to return to the principles of the founding fathers. In short, it is home to most. If people are disillusioned with where they’ve been led, they are going to look to return home.
Here is a list of some of the promises made by the ruling democratic leaders (Obama, Pelosi, and Reid) that they are not taking seriously or actions that are hypocritical to their cause:
1. Promising fiscal responsibility while spending irresponsibly. Rasmussen shows that fiscal responsibility is the one issue most people are concerned with. We have been promised fiscal responsibility and none of Obama’s bills encourage or take into account fiscal responsibility. Perhaps, this is something we are will need to wait until his second term for?
2. Promising the end of earmarks, but allowing approximately 9,000 of them in the omnibus bill. Their claims the bill is really Bush’s bill, not Obama’s, is ridiculous. They say possession is nine tenths of the law and the bill will be in Obama’s hands if it is signed.
3. Forcing people, not politicians to except green initiatives. I posted an article today regarding congress’ plan to ease pollution restrictions on the power plant they use and their refusal to buy pollution credits to offset.
4. Promising accountability, while taking concealment to new levels. Obama promised to post all bills for 5 days before congress votes. Congress promised to allow 2 days to view the stimulus bill before voting. The American public and politicians had 12 hours.
5. Promising that the Democratic Party will be the party of Ethics. The list is long, but governors from New York, Illinois, and Arizona are all involved in major scandals. Three tax cheats were picked for Obama’s cabinet. One new senator already looking at perjury charges. This is only the beginning
I could go on, but I don’t want to write a book. Most of these have occurred in only the last month since Obama took office. Democrats should stop and take notice of this list and begin to align their rhetoric to match what they are actually perpetuating through their actions. Some suggest that the people of this country have been swayed to the left way of thought. They believe this shift will continue in the future. They couldn’t be more wrong. Conservatism by definition is an attempt to return to the principles of the founding fathers. In short, it is home to most. If people are disillusioned with where they’ve been led, they are going to look to return home.
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