The Reasonable Curmudgeon

OH! CHRISTMAS TREE?

2011-12-22T16:49:00.004-05:00

The holiday season is the time for reflecting on holidays past and your Curmudgeon is no different. Here's a tale from way back in the dark ages... 1973.

After spending the first three years of our marriage in western Maryland, a place that takes a back seat to nowhere else when it comes to winter snow amounts, my first wife and I moved to Fairmont, WV. This is a small city in the north central part of the state whose claim to fame, at least for us, was that it had a state college (now university) and that it was about 20 minutes on I-79 from West Virginia University in Morgantown.

We were living in one side of a duplex on a little cross street in town. The house was of the "I" house design. From the side view it was a narrow, two stories high with a sharply pitched roof line. Attached to the main house at the back were one story additions with low ceilings. A pretty typical early 20th century duplex in a college town. Oh, and one more thing. The front porch, which covered both front doors, was only about four feet wide up a short flight of steps. The front door opened to a closet directly opposite which required a sharp left turn to get into the living room. More on that later.

Our first Christmas in Fairmont found my wife working at her retail job and my friend and business partner, Ray, and I (we had a roofing and siding business) sort of off work because of the weather. This may have contributed to what was to come. The weather was typical for the area with 5 or 6 inches of snow on the ground. It's possible that a surplus of Christmas cheer, and too much time on our hands, lead to the brilliant idea that we should go out and cut us a Christmas tree.

So, after, perhaps, a bit more Christmas cheer, Ray and I and a saw and some rope piled into my Fiat 128 and headed out across the river to a cut your own tree lot we'd both seen in passing. That's not a picture of my Fiat, but it looked just like that. Bright red. As you can see from the picture, this is not a very big car. The good news was that it was front wheel drive and went very well in the snow. Off we went to the tree lot.

We pulled in and discussed our quest with the guys huddled around a 55 gal. drum fire and thus learned that all the trees were the same price. That seemed fair, so we paid the man, got out the saw and headed over a small hill to the actual trees. There, at the front of a small forest of Christmas trees, was the best looking tree I had ever seen. It was perfectly shaped even with snow weighing down its branches. It was full, with no ugly voids or missing branches. This was the kind of tree that should grace the front of every Christmas card ever sent. It looked that good from the top of the hill. I just knew, this was the tree for me.

As we descended, saw in hand, the perfect Christmas tree seemed to grow. The closer we got, the taller and wider it became. But I was determined. This was my tree, damn it, and I was going to cut it down and bring it home.

The first thing we had to do was get some of the snow off the branches. It was easy enough to knock loose the snow from the lower limbs and with the saw we could reach a little way up, but there was a lot of snow still on the higher branches. Simple, I just reached in to shake the trunk. I could barely reach the trunk of this tree! I had to push lower limbs aside, and up until I finely grabbed a hold and shook with all my might. Nothing happened. I tried again. Nothing moved. The snow on the upper branches was still there. I backed out, stepped back, lit a cigarette and Ray and I just looked at the imposing thing. It was starting to get dark.

"Okay," I said, "The snow will fall off when the tree falls." "No problem." I finished my cigarette, grabbed the saw, and got down on my knees to crawl under the lowest branches. Now, I was what you might call a city slicker when it came to the fine points of felling trees. Our previous Christmas trees had come from a lot set up in front of the Jewel grocery store. I knew a fair amount about cutting wood having had a house framing business back in Maryland, but that was lumber. And an electric circular saw. This was a growing pine tree and a hand saw. Not a "Bow" saw with great big and sharp teeth. No, this was a regular old, cut a two by four hand saw. I started cutting.

The stump of the tree was about eight inches in diameter. I pushed and pulled and pushed some more on the saw. After about a minute I stopped to check my progress. I hadn't yet made it through the bark! That just made me more determined. More pushing and pulling and a bit of cursing that last cigarette resulted a some progress, so I backed out and handed the saw to Ray. I won't bore you with the entire ordeal. Lets just say that by the time we finely yelled, "Timber," the sky was pitch black. We'd been working under the lights for at least 30 minutes. But the tree was felled. We beat our chests in a manly way with what strength we still had and grabbed up the tree from each end... and barely made it three feet before we had to drop the load. This sucker was heavy. We beat as much of the remaining snow off the upper limbs as we could and then both grabbed the butt end and started to drag the tree up the hill.

Ten minutes later and the tree was next to the car and the tree cutters were somewhat winded. With whatever strength we had left we hoisted the perfect Christmas tree onto the roof of the Fiat. This was probably pretty dumb and would have done some major damage to the paint if the roof wasn't still covered in ice and snow. But on the roof it went and with some effort we were able to tie the pointy end to the front bumper and the other end to the rear. A tug on the rope made us realize that the ice on the roof also had a down side. The tree wanted to slip and slide. After a brief consultation we looped the remaining rope around the middle of the tree and put the ends of the rope through the car's front windows. With Ray holding his side with his right hand, and me holding my side with my left hand we started out of the parking lot. And immediately realized that I couldn't hold the tree, steer and shift gears at the same time. Something had to give.

Being young, cold and tired the only (to us) rational answer was for me to drive while Ray shifted gears. That way we could both hold the tree and make it home before the spring thaw. So off we went. Our path home included a toll on a small bridge. As I recall, the toll was only a Nickle, but there was a booth and a girl collecting, so we stopped and paid up. Until that point I really hadn't thought about how we looked driving a little red car with a tree on the roof. The girl taking the toll put it all into perspective when she said, "You look like a Christmas tree with a red ornament on it." "Is that the tree for the courthouse?"

"IS THAT THE TREE FOR THE COURTHOUSE?" What the heck were we carrying? We laughed, told her no and pushed on. Me steering with my right hand while Ray shifted with his left all the way back home. But we made it and without further incident. When we pulled up in front of the house we saw that my wife was not home yet. Perfect, I thought. We can surprise her with this wonderful Christmas tree all set up and ready to decorate when she gets home. Ya, right!

We untied and rolled the tree onto the sidewalk. Now that we weren't on the side of a snow covered hill we could actually pick up the whole tree and carry it up the stairs onto the porch and to the front door. Oops, we had it wrong way around. We went back down the stairs, made a 180 in the neighbors yard and headed back up to the door, butt end first. Now, remember I said the entry way was a little tight. Well, it no time at all to realize that this tree was not going through that door from that angle. Not goin' to happen.

There were two immediate problems before us. One was the direction of travel. In order to get this tree into that door we needed to come at it from the porch on the other side of the duplex. The second was the storm door on my front door. Number two was easy enough to solve. We were "in the business" so to speak, so we grabbed some tools and took down the storm door. In what may have been the only good decision in a day of not so good decisions we also removed the front door of the apartment. Just in case. We were ready now. We huffed the tree back down our steps, across the front of the house and up the neighbors steps with the cut end pointed at the door. There was a half wall between the two porches that the tree sort of sat on as we attempted entry.

By pushing, pulling, shaking and cussing we got almost three whole feet of the tree into the house. This was not working all that well. More pushing and pulling, followed by much more cussing, and we got it about a third of the way in. This continued through several stages, several more cigarette breaks and possibly more Christmas cheer. Finely the tree popped the final three feet into the living room. It pretty much filled the whole room. But, heck, it was still on its side. It wouldn't take up that much room once it was set up. Would it?

I'd actually thought ahead enough to have gotten out the tree stand. This was one of those with three screws that you turn in to hold, and plumb, the tree while it sits in a pan of water. Simple. Well not so simple. It seems that the eight inch diameter of the tree trunk was a bit larger than the ring holding the set screws. Maybe more than a bit. It was never going to fit. Okay, I thought, we'll just make a stand. We set up some saw horses out back, grabbed power tools from the car and some scrap lumber and in a little while we had a plywood and two by four Christmas tree stand. Back into the house we went and, with some pretty big nails, we nailed the stand to the base of the tree. We were all set.

Ray and I positioned ourselves at the pointy end and together heaved the tree top up toward the ceiling. And stopped dead when we realized that the tree was taller than the ceiling was high. By what seemed like a lot. It was time to measure the ceiling height and the tree. The ceilings in this old house were 10 feet from the floor. The tree, it turned out, was a little more than that tall. Lets just say that after grabbing the hand saw out of the car and cutting for what seemed to be another very long time we had made the big tree shorter. How mush shorter? I gave Ray the cut off top and he and his wife used it for their Christmas tree that year. It didn't need to sit on a table.

We huffed and puffed and finely the tree was standing in my living room. As I said, the house was an old "I" house. One of the features of this style of building was that the living room, and the bedroom above it, were big. 16 by 16 big. The tree took up a third of the room! And it was against, that is touching, both walls of the corner of the room. It was gigantic.

When my wife got home there were exclamations of wonder, as in "I wonder what you clowns were smoking," wonder. But all was, in fact well. Over the next few days we decorated with lights and ornaments and the old style aluminum tinsel. Lots of lights. Lots of ornaments. Pounds of tinsel. When finished it was, truly, the perfect Christmas tree. But the story doesn't end there.

In the modern world of the 21st. century we have a wide selection of available types of holiday tree. For example, this year the Queen of the Frontier and I put up Frazier Fur Christmas tree that we cut from a friends tree farm. Cut, wrapped in that net stuff and in the bed of my pickup in 15 minutes. A beautiful 9 foot tall Christmas tree. They even drill the butt end to fit the spike on the bottom of the tree stand pan were you put the water. Oh ya, water for the tree.

The home made stand that Ray and I had cobbled together held the tree. Okay, it held the tree along with some wire that I had to run to both side walls to keep this monster from falling over. Luckily this was done before the decorations went on. What we didn't bother with was a way to give the tree water. We figured that since it was fresh it would last just fine. We were wrong!

Now, knowing what it took to get the tree into the house I was in no real hurry to take it back out. By mid-January things were starting to turn a little brown. So one Saturday we commenced to remove the decorations and the tinsel and the lights from the perfect Christmas tree. Several painful hours later the tree stood bare in all its greenish brown glory in the living room. Our hands and arms carried scores of little red spots where the now dry as a desert needles had poked. And we still needed to get it out of the house.

I'm somewhat ashamed to admit that yes, I used my Skil Saw to cut off all of the branches right there in the living room. When done nothing remained but the bare trunk of the tree, the knobby cut ends of the branches ringing around and around. And then, so that I wouldn't have to take off the damn door again, I cut the trunk in half and walked the pieces out with a quiet feeling of relief. At least the ordeal was over.

Except for the needles. We stayed in that house until 1975. I can say, without hesitation, that at least once a week for those three years someone in the living room would step on, sit on or in some other way get stabbed by a very sharp and very dry, pine needle. And somewhere there's a picture of your Curmudgeon wearing a suede leather jacket, backwards, some leather gloves and a fencing mask standing before that tree with a circular saw in my hands.

Have a very merry Christmas and a wonderful new year!

WE NEED A CHRISTMAS MIRACLE

2011-12-12T12:28:00.001-05:00

As it turns out, this is my 100th blog post. Who'd have thunk it! Any how, after a break from blogging I'm ready to take on the second hundred, so let's go.

We, that is citizens of the U.S. of A., sometimes act like cats chasing a flashlight beam. We'll pay attention to a problem right up until the beam moves, then wham, our focus moves to something else. This seems to hold true in just about everything we do as a nation and the question of what to do about the lasting effects of the Great Recession is no different. And that could be a problem.

As the mortgage/housing bubble burst and banks stopped lending the issue that seemed to join Wall Street, Main Street, government and the individual was the issue of debt. Everybody had too much of it. Of course, we saw right away that this wasn't that big a problem for Wall Street since the Bush Administration was eager to push forward TARP to ease the pain of that particular segment of our economy. Main Street and the individual debtors were not so lucky. I don't even want to get started on the government's debt situation except to remind you of how much fun raising the debt ceiling was. That gave me nightmares.

So, as the whole countries' attention was focused on debt, and in particular, our personal level of indebtedness, we were cautioned from every corner that we owed too damn much, saved too damn little and the whole thing was, at base, a moral failure of the American people. If only we could change our ways. And, as strange as it may seem, we did change. Saving went from -1% to +5%, on average. Consumer spending all but stopped for a while. Some of this was not just a reaction to the moral dilemma, it was the hard economic reality of losing jobs, worrying about losing jobs and not being able to find new jobs. So, why then has the economy not turned around? We're all being good, moral citizens. We're not using credit to buy stuff we don't need. We're saving more. What the heck is the problem?

The problem is our short attention span and "all or nothing" way of dealing with problems. If the problem is too much debt we just need less debt, right? Wasn't that the rallying cry of the GOP during the fight over stimulus spending. "The first thing you do when you find yourself in a hole is... stop digging!" That makes perfect bumper sticker sense, doesn't it? Well, yes and no. And in our economy no is the better answer.

The U.S. economy, before the crisis of 2008, was 70% consumer driven. That is, 70% of all economic activity was people buying stuff. And not just buying stuff, but buying stuff on credit. So clearly the answer had to be, stop digging. But what if the hole one finds oneself in is starting to cave in. In that case one needs to keep digging in order to keep breathing. Go back to that 70% number. When consumers stopped digging, that is buying stuff, layoffs got worse. More people lost their jobs. More companies went under. More pain ensued. Why?

Because a consumer driven economy can't change over night to a saving and investing economy. There is way too much economic inertia. Just open the yellow pages, assuming that you still get such a thing. You'll find page after page of businesses dedicated to selling stuff to you, the consumer. Remember, 70%. No matter how much moral indignation is raised against our borrowing and spending ways, that's what the economy is set up to do. And, unless and until the consumer can start doing some of that spending again the recovery will remain weak. So what can we do?

We need, rather than tight money and increased saving, looser lending and a return to some pre-recession levels of consumer spending. We're seeing some of the latter this holiday season and I think that the results may surprise some folks. I know this sounds like I'm encouraging a return to the bad old days, but I'm only saying that this economy can't change over night, and to expect it to is a recipe for a double dip recession. Yes, we should encourage saving, but when the same banks that want to (and do) charge double digit interest on personal loans and credit card accounts can only offer savers <1% interest on saving accounts I really can't see the value to society of removing any money from the market place. Later, when the crisis is behind us? Sure. Now? Not so much.

So, let's all have a joyful holiday season and get out there and spend. Your country is counting on you!

THEY SAY THE STIMULUS FAILED...

2011-10-21T12:18:00.001-04:00

Ah, autumn. Leaves changing, football on TV (Let's Go Mountaineers!) and the Republicans still telling the same tired lie about the President and the 2009 so called stimulus. What lie is that, you ask? Well, it's actually a compound lie. One which can indite the president and his policies in multiple ways. They go like this.

"Obama lied because..." Or, "The stimulus failed because..." Or the ever popular, "Obama is a failure because..." See the cleaver combining of the President himself with the failed program. So what is all this lie telling and failing about? It's about one little number... 8%.

Here's what happened. During the run up to passing the American Recovery and Reinvestment Act, the said "stimulus," one of the President's advisors, Christina Romer, then chair of The Council of Economic Advisers, made the prediction that the ARRA would bring unemployment down to the aforesaid 8%. Since that time, of course, the unemployment rate has not fallen to 8%, so that, in whatever Never Never Land the Republican Party resides, the entire program was a failure. Period. No discussion needed. Oh ya, and since Obama said it (by way of an adviser's words) he lied to the American people.

This is A number 1, super high quality BS, and to my mind anyone who holds and expresses that position not only shouldn't run for office, he or she should probably be treated for a mental disorder. Let's start with the "Obama lied," group.

No matter how you cut it, paste it, or fold and spindle it, Ms. Romer's statement was, is and always will be, a prediction. The American Heritage Dictionary of the English Language defines the term:
1. The act of predicting
2. Something foretold or predicted; a prophecy
Nothing in the definition of the word relates in any way to the truth of the statement. In fact, we are faced with predictions all the time which we know may not happen. We may say, when we go to work without an umbrella and it rains, that the weatherman lied, but everyone knows it's not a lie. It was a prediction. If that's not enough how about these gems of prediction: "The fighting won't last more than six months." "The war will be paid for by Iraqi oil." "They will greet us as liberators." Or my favorite, "We know Saddam has WMD and we know where they are." Each of these came from Bush folks before we invaded Iraq. Each was wrong. Point this out to Republicans and see how many rise up on their hind legs and say that George W. Bush lied. So I think we should agree that predictions that prove false are not, on their face, lies.

But, you say, what about the obvious failure of the stimulus to meet the goal that was predicted. Again, one must start from the proposition that a failed prediction or prophecy as to the result expected from some program or action does not necessarily mean that the program or action was a failure. It just means that the particular program or action didn't match the prediction. I can predict that WVU will win tonight's game by 30 points. If they only win by 20 does that mean that the WVU football team is a failure? It may show that I'm a failure at predicting, but it really doesn't say anything about the success or failure of the team.

Likewise, while Ms. Romer's prediction missed the mark, I think it's a stretch to then declare the entire program a failure because of it. What Ms. Romer is guilty of is a failure to follow Scotty's first law of engineering: When the Captain asks how long the very important repair to the warp engines will take, tell him three hours if you think it will only take an hour. That way being done in an hour, or even two, means you did better than your prediction and the good captain will keep you around. Had Ms. Romer only thought to predict that the ARRA would hold the unemployment rate below 12% we wouldn't be talking about this almost three years later. And let's not ignore a very important fact. The Great Recession was far worse than anyone predicted it would be. In fact the full extent of the downturn is not yet fully known, but just this year we discovered that it was far deeper and wider than was reported even just a year ago. Under those circumstances it looks to me like the ARRA was a success. But then I'm one of those strange fellows that think that any money pushed into the Main Street economy, so long as it stays in the U.S.A., will act as a stimulus.

Now, it may be that the Republicans aren't just mouthing the talking point of the week when they call the stimulus a failure. It just might be that they have a different view of what a prediction should be. Maybe they like that part of the definition that says a prediction is prophecy. Couple that with their often repeated swipes at the President's acting as if he's "The One," and it all makes sense. Of course, to make the logic work out Obama has to actually, you know, be "The One." I don't think their willing to accept that, so their arguments that the ARRA was a failure, or that the President lied, just make them look stupid. It's going to be such a fun election season. I may have to take up knitting!

KEEPING PROMISES

2011-09-14T14:19:00.001-04:00

One of the big issues floating around right now is the problems companies and units of government are having meeting the pensions which they have promised to past and current workers. We hear that this or that public pension fund is way underfunded, or that such and such corporation went through bankruptcy in order to shed long term pension responsibilities and if it's not your pension they're talking about we just sort of move on with life. But it is somebody's pension and breaking that promise to a worker carries harm far beyond that worker alone.

Pensions, either private or public, are simply a future benefit earned by today's work. It's a promise to the worker that funds, either from the worker, the employer, or both will be set aside to be given to the worker when he or she retires. At least that is the intent. Of course, we've heard for years about this or that union boss or politician who raided the union's pension fund for their own gain. So now we have 401ks and defined contribution pensions and all manner of other vehicles to provide the benefit and avoid the graft. But what about the promise itself?

It must be remembered that a worker, and her family, whether consciously or not, took the promise of a benefit into account when accepting the job in the first place. That was one of the reasons that government jobs were considered by many to be real plum employment. The government pensions were great.

But now we are in the age of the disappearing pension. Funds are under funded. Public pensions are seen as an undeserved perk for already over paid drains upon the body politic.Workers with 20 or 30 years in worry if they will get any of what has been promised and fear for their future. And that fear is where the harm spreads to the whole economy.

As I, and just about anyone looking at the state of the economy who avoids Fox News, have said repeatedly, we are in a demand crisis. Before the Great Recession 70% of the US economy was consumer spending. Now I have heard some on both the right and left applauding the recent upsurge in consumer saving (from less than 0% to 5%) and in so doing framing the consumption vs. saving argument in moralistic terms. It would be wrong, they say, to go back to our wicked excessive consumption ways. Now, whether it's wrong, wicked or even evil to be a consumer is not for me to say. But anyone who thinks that our broken economy is going to turn around just because folks are putting a little away for a rainy day is, in a word, deluded! It is not possible to transform a consumer driven economy into a saving and investing economy over night. Or even over decades. It can't be done. If we are going to recover it is going to have to be because people start to consume again. Buy things. Use things up and then buy more. That's what we are as a country and we are not going to change any time soon.

The problem is, when someone worries that the pension that they have been promised won't be there when they retire, they don't spend the money that they have. They start to hold on to it. And that means less demand in a demand driven economy.

I have little hope that this state of affairs will change any time soon, but I think we really need a national conversation about promise keeping. That to me is the morality problem we face, not whether or not someone is putting a little back. The threat of losing one's pension thus sweeps across the entire retail landscape. And if that threat, as most do, impacts thousands or hundreds of thousands of workers, like teachers and police and firefighters, then that threat can hold our whole economy back.

You want stability in our broken economy Mr. Politician? Stabilize the countries pension nightmare first. That stability will then spread. Just like the fear.

THIS MIGHT WORK

2011-08-17T12:38:00.001-04:00

In looking back over my growing list of postings I've spotted a scary trend: I've written more posts with the Money label than any other topic. This could be because we are deep into a national financial crisis, or because, just as one thinks a lot about the beach in the dead of winter, I think a lot about money because I don't have much. Whichever it is doesn't really matter. Here's yet another one.

If, as I and a whole bunch of actual experts believe, the country is in a demand crisis not a too high taxes and too much regulation crisis than we need ideas that help create demand for American products and services. The Obama administration is proposing an extension of the 2% reduction in the Payroll Tax passed last December as a way to put more money in the hands of consumers who will, most likely, spend the extra money. This is fine, but since it only extends something already in place it can't really help much more than it already has. It won't create any new spending. We need something more. We need to reform the Usury Laws at the Federal level.

In brief, Usury is the act of charging too high an interest rate on loans and borrowing. Most states have such laws, as does the Federal government. And you would be very surprised to find that the legal limits are far below what Pay Day lenders, sub-prime mortgage lenders and, most importantly for this idea, credit card companies, charge their customers. Why?

Without going all lawyer on you the simple answer is that the U.S. Supreme Court ruled in the 1978 case of MARQUETTE NATIONAL BANK OF MINNEAPOLIS v. FIRST OF OMAHA SERVICE CORP. ET AL. that National Banks can charge credit card interest based upon the Usury law of the state where the bank is located. They said basically that:

The National Bank Act provision codified as 12 U.S.C. 85, authorizes a national banking association "to charge on any loan" interest at the rate allowed by the laws of the State "where the bank is located,"

Why does that matter, you ask? Just take a look at the address where you send payments to your credit card company. Delaware and South Dakota seem to predominate. These states, South Dakota in particular, took one look at the Marquette decision and realized that they could attract Credit Card companies who could then charge out of state borrowers based upon South Dakota's Usury rate. Of course, there is no usury limit in South Dakota. That's why so many credit card companies locate there.

So here is my proposal: Congress should amend 12 U.S.C. 85 to allow national banks to charge on any loan interest at the rate allowed by the laws of the State where the borrower resides. That's pretty much it. Of course it would have to apply to all existing balances. The screams of the bankers will be heard throughout the land, but there certainly is precedent for making changes to the terms of a credit card contract after the fact, so to speak.

The credit card contracts themselves provide the answer. They can change pretty much whatever term of the agreement that they want to and we, the borrowers pretty much have to take it. Oh, you don't want to pay the new and improved rate of 26% on your existing balance? Well, just close the account. You can't charge any more on that card, but you do have to pay the balance owed under the original terms. In my proposal the States and the Federal government would be acting for the consumers as their representatives (imagine that) in the clearly unfair and unequal contractual agreements that now exist.

The immediate result would be lower payments on high interest rate cards and other consumer loans which puts more money in the hands of consumers just like the Payroll Tax reduction, but this would act as a new stimulus rather than a continuation of an already in place tax cut. And it really isn't such a big change in the law anyway. Most states have Usury laws and have had them from the beginning. Why, even the hard core of the GOP can't bitch too much. Usury is forbidden by the Bible [Exodus 22:25] [Leviticus 25:36] [Leviticus 25:37]!

OBAMA AND THE DEMOCRATS ARE TRAPPED

2011-07-12T12:06:00.001-04:00

It looks to me like the President and the Democrats in Congress have let themselves be pushed into a 2012 election trap. Pretty much any deal made with the GOP on raising the debt ceiling and/or dealing with the deficit will now have to contain provisions which will increase, rather than decrease, unemployment leading up to the election. Why?

Okay, just to review a little: The GOP wants to cut lots of spending and taxes on corporations and wealthy individuals, you know, the groups that they call the "job creators." The Dems for their part now want to cut spending by trillions of dollars and raise some taxes. That's really about all that they can't agree on. The taxes part of the equation. But as far as the President's reelection prospects are concerned either option is equally bad.

I think we have to look at the basic assumptions of each position. The basic assumptions under which the GOP is operating are that:

All tax cuts increase revenues, and
If we cut taxes on the "job creators," they will, well, create jobs, and
Cutting government spending will stimulate, and increase, spending in the in the private sector and thus create jobs.

On the President's side the assumptions are:

In order to increase revenues we must increase taxes, and
The level of taxation has little, if any, effect on hiring or expansion, and
Government spending stimulates the economy, thus helping the creation of more jobs.

Now it's pretty easy to see that the two sides will never really agree on anything since their respective world views are so completely different. But go back and reread the second paragraph. The Dems are willing to ignore their assumption #3 and make massive cuts to spending. This is the President's first reelection hurdle. I've said before, almost redundantly, that I think that cutting spending will cut jobs. My logic goes like this: if you take dollars out of the economy those dollars can no longer be paid as wages.

"But we're broke," screams the GOP, "40% of that dollar was borrowed. From China." "We can't afford that spending." Well okay, for the sake of argument I'll agree with the GOP here. But only for the sake of argument. The point is, they're looking at the wrong side of the equation. At the place were the dollars actually get spent their source matters not one wit. What matters is that somebody got paid with that government dollar and now, after spending cuts, they will not get paid. Of course the GOP counters that, if the program in question has merit, the private sector will step in, make investments and no one will lose their job and everything will work out fine. Back on the farm I used to have to shovel that stuff!

The GOP's reliance on the "private sector" to step in and save us all is a recurring theme. Just look at the GOP #2 above. It's a nice fairy tale. It just has no basis in fact. But it works really well as a political club. And that's where Obama's problems arise.

If the President agrees to huge spending cuts, as seems likely, something like $3 to $4 trillion will be removed from the economy over 10 years. That will, in my opinion, result in a spike in the unemployment percentage of from .5% to 1.5%. Since we are now at 9.2% it doesn't take a rocket scientist to see that this would be very bad news for Obama. But how about that tax increase/tax cut part of the equation?

If the GOP is right, and they get an agreement including tax cuts, then the jobs picture should improve, which is a net plus for the President's reelection hopes. Does anyone believe that the GOP wants that result? And really, what kind of policy is it that gives money to one segment of society and then simply hopes that they will hire more people because of all the extra money they have. Oh ya, it's called a conservative policy.

So, here's my take on all of this. If Obama and the Dems agree to spending cuts (cuts jobs) and no tax increases. The GOP will then point at the unemployment number and claim that it was the failure to cut taxes that caused the problem. Obama loses. Or, the Dems agree to the spending cuts (cuts jobs) and tax cuts. Since I see no real connection between tax cuts and more hiring the result will be the same. Increased unemployment and, Obama loses. See, I think that the GOP knows full well that the surest way to "make Obama a one term president," is massive cuts to spending which will put more Americans out of work. Too bad that that's the one thing both sides seem to be agreeing on.

And one more thing. If Obama were to bring home the troops from Iraq and Afghanistan a great many of those men and women will leave the service for private life. You know, the private life where there are no jobs. Strike Three Mr. President!

HAPPY 4Th OF JULY

2011-07-02T11:49:00.000-04:00

For you newer readers, here's a link to a piece I wrote a long time ago about my adventure with holiday fireworks. I posted this first in 2009. Enjoy.

THINGS I'VE LEARNED

2011-06-21T15:29:00.001-04:00

I've finally reached an age where things that I thought were true at the time of having the thought have now proven to be true. Of course, some have also proven to be false and there are lessons in that, too.

I've learned that if someone, or even some business, goes out of their way to tell you how great they are, they usually aren't very great. This is true in most every walk of life. Witness the TV talent shows, of which I think there may be 40 or so on the air right now. It never fails that when they show the dancer/singer/juggler who spouts off about how the judges have never seen the likes of him before, he turns out to be completely without talent.

A corollary to this rule is that if a business tells you how wonderful they are more than once in an ad, they ain't so wonderful. Like when the local strip club tells us that they're, "A class act," at the start and finish of their TV ads. Guess what, they're not. And I'm sure I don't even have to mention politicians.

I've learned that in many, if not most, cases what an opponent accuses you of, is actually what they would do in the same circumstances. A card cheat will be the first to accuse you of cheating at cards and a crooked politician will always be the first to point the finger and call his opponent a crook. It never fails.

I've learned that the people who praise God the loudest are usually the least godly people in the room. This appears to be true across all denominations, locations and time zones. Just sayin'.

I've learned that no matter how often educators and their administrators tell us how every child can go to college and have a better life, the percentage of people with college degrees will stay around 30%. If your child isn't in the top 30% of students, please let him or her do something that doesn't require the degree that they can never hope to get. Give your son a good set of tools. encourage your daughter to go into dog grooming. Just don't force them into a mold that they don't fit.

I've learned that you should never retire to the same place that you vacation. Never! You will quickly discover two very important things.

First, you can no longer spend money like you did when you were on vacation. So that great restaurant that you make sure to visit twice during your vacation week is now, because you're retired, a once a month treat. Maybe. And all those wonderful attractions that you visited each year are now just added expenses.

Second, the population of the vacation spot where you'd like to live breaks down to having; natives, locals, and tourists. Guess what? You're none of the above. You can never be a native, since you weren't born there and your family doesn't go back a hundred years. Sorry. You're no longer a tourist, since you live there now, but it takes time to become a local. Time, which you'll discover in the off season, that drags on and on. You see, it's called the off season for a reason; nobody wants to be there then. And the population of "locals" is pretty much a population of transients. People who are passing through, or who dropped out of larger society, or who just work the seasons and then move on to another vacation place for their busy season. What you won't find is a sense of community. That's reserved for the natives.

And finally I've learned that being a dyed in the wool cynic isn't that bad. I least I'm rarely disappointed!

A BAD EXAMPLE

2011-05-19T16:20:00.001-04:00

Here we are the in spring goofy season, where politicians offer wilder and wilder budget plans to save us from the wild budget plans of their predecessors. I opened the local newspaper today and what should greet me but a front page story about a Chamber of Commerce meeting held last night. One of the speakers was the newly elected Republican Congressman from our district. His words appear regularly in this rag, since I don't think the editors have ever seen a Republican Congressman from our district. Since he not only holds the title but also toes the (tea) party line he stands out as a hero to our local "news" types.

Congressman McKinley, in explaining to the crowd the mysteries of Federal budget making, used an analogy that I've heard from most, if not all, of the current crop of conservatives. It goes something like this. "You see," will say our conservative friends, "our Federal budget is just like your budget at home." "If your family brings in $35,000 each year, but spends $45,000, your family will have to borrow money to get by," they'll explain. "Now that might work for a little while, but sooner or later your little family is going to be BANKRUPT!" After the shock wears off they will go on, "in order for your family to avoid that you'll have to cut how much you spend." This is usually said with a bit of smugness, just to show the listener that the speaker knows something important.

And then comes the zinger! "In the same way, we as a nation must cut our out of control spending or we're DOOMED!" A cheer usually goes up from the attendees at this point followed by much head nodding and conversation in the audience. But something about that nice simple explanation bugs the heck out of me.

You see, the better example might be a family where mom and dad both work, earning $45,000 a year together, but where dad gambles away $10,000 a year leading to the shortfall. This seems to work if you see mom as Main Street or the so called real economy, and dad as Wall Street. But such a construction really doesn't matter. What matters is that part of the "family" isn't contributing to the welfare of the household.

Unlike your families finances, the government has a special, some would seem to think secret, means of balancing the budget that doesn't involve only cutting spending. It's called raising taxes. Mom and dad can't generate their own raises so that more money comes into the family, but the government can.

I'm not going to go into all of the arguments that swirl around talk of tax cuts or tax increases. I've written about the Laffer Curve before and nothing has happened to change my mind. Our citizens are "suffering" through some of the lowest tax burden in over 60 years. We are not over taxed. Do I like taxes? Hell no. Taxes are, in the main, an immoral burden on the work of some confiscated to benefit others. I don't like taxes at all. But that's the deal we have struck.

The social contract under which we live has to deal with what is, not what we wish was. We burden ourselves (we, the people, remember) with taxes because we need that which only government can provide. Yes, we get programs and projects that waste huge sums and don't benefit "us" but we also get programs and projects to help and benefit many others. It's a tradeoff. At least it's a tradeoff to those who believe in such things as tradeoffs and negotiations and making deals that benefit the largest number of citizens. To the side that believes that the mom and pop story is a real example of how government works, not so much.

OBAMA NOT FROM MARS...FILM AT 11:00

2011-04-28T16:30:00.000-04:00

As anyone not living in a cave should know by now President Obama has released, for all the world to see, his so called "Long Form" birth certificate. You know, the one that, under Hawaiian law, is not to be used as proof of birth. The form that the law says is actual, honest to goodness proof of birth is the one that the Obama campaign released back in 2007. But hey, better late than never, right?

This entire "Birther" business is a part of a larger problem though. We are faced with a growing number of elected and public figures who find it perfectly alright to lie. I don't mean misspoke either. If you go in front of TV cameras and claim that the duly elected President of the United States wasn't born in this country, you are telling a lie!

Now, I suppose that one could be given a little wiggle room on this. The answers, "I'm not sure," or "I don't know," might seem innocent enough and that's how I might have viewed them in the past. But not any more. When the actual, you know, proof has been out there for more than three years you're either lying, or are dumber than a stick. And these folks, at least most of them, aren't dumb.

The idea that politicians lie is, of course, not a new one. But in today's information, multimedia explosion even a simple political lie can have wide spread consequences. For example, during last fall's mid-term election cycle people were surveyed about their taxes. Over 70% said that their taxes had gone up under Obama. I found that troubling, since for 95% of all taxpayers taxes have gone DOWN under the current administration. Not only were the people surveyed wrong, they were 180 degrees wrong. What's going on here?

What's going on is good old fashioned propaganda. Propaganda is defined as;

information, ideas, or rumors deliberately spread widely to help or harm a person, group, movement, institution, nation, etc.

Since early in our history we have both used and abhorred the use of propaganda. The idea of spreading information which the spreader knows to be false just bothers us a bit more than the idea of spreading information that is shaded toward one side or the other. The former we call propaganda. The latter we call advocacy.

So, when a whole lot of people are found to believe something (increased taxes or Obama wasn't born here) that is demonstrable not true, shouldn't those who know the truth point at the propagandists and get on their case for telling the lies? Ya, we should, but we don't.

Just review the press after the mid-term elections. Every other pundit went on and on about what the electorate said. "The American people," we were told, "said that they were tired of tax increases, and blah, blah, blah." When, in fact, the real story was that the propagandists had pulled off a spectacular victory against the truth. Likewise, when 45% of Republicans believe that the President was not born in the U.S.A., I'm much more interested in where the "American People," got such a stupid idea.

So let's celebrate the fact that, at least as to the question of where the President was born, truth will out. And let's maybe look a little more closely at most of the claims being made by our politicians. Oh, and finely, for all you birthers out there I might suggest, take another look at global warming. You all might just have been fooled again!

WHEN THE LOONIES RUN THE LOONY BIN

2011-04-06T15:18:00.001-04:00

By now most of you have heard that the nutcase preacher down in Florida (whose name I won't mention so there's less chance of linking to his site) who had threatened to burn a Quran last September 11 has gone ahead and done so. His actions, which received almost no press in this country, appeared on his church's web site for the whole world to see. Islamic extremists in the Middle East saw, rioted and people died and are still dying. So, what can be done?

Let's first get out of the way that the guarantees of the First Amendment protect this dumb ass from being prosecuted for doing dumb ass things. And don't think that I'm about to argue why this clown and his actions should be exceptions. I'm an absolutist when it comes to the First Amendment, so as far as I'm concerned, there ain't no exceptions. But this case and other examples, like the riots after a Danish newspaper printed "offensive" cartoons of the Prophet, should raise a red flag or two. At least as this relates to our future dealings with the Middle East and their oil.

See, whether one agrees with the concept that Muslim extremists want to foment a religious war or not, the Quran burning and the reaction to it happened. I think that we may have to face the fact that the start of such a war is out of our hands. And by "our hands" I mean those of use who are rational!

It now appears as if any nut case, or group of nut cases, can get a reaction from religious extremists half a world away with no more expense than a book, some lighter fuel, a match and a web cam. And there's not one thing we can do to stop them. What we maybe can do is try to defuse the reaction from the Muslim world. We could try and make clear that burning holy books is not the country's policy but the actions of a few. Of course, we could also get our troops out of their countries. And stop propping up dictators. And stop buying their oil.

Oh heck! I don't think we can stop it at all. So the question has to be, what group or groups in our country might want to start a world wide religious war? I'll deal with that soon.

SHOW ME YOUR PAPERS!

2011-03-15T15:36:00.000-04:00

That phrase, show me your papers, has been immortalized by inclusion in any number of WWII movies over the years. You know the ones: our heroes are undercover in Nazi held territory, the come up to a checkpoint and the nasty Nazi in the gatehouse comes out and asks our heroes for their papers, ie, their proof that they are, in fact, loyal followers of the Third Reich.

It's that connection to one of the worst regimes in modern history which is why, I think, many people were not happy with the Arizona immigration law that raised such a stink last year. The image of a native born citizen of this great country, be he or she Hispanic or not, being asked to prove his or her citizenship when asked by a cop during a traffic stop or on a street corner waiting for a ride, smacked a little too much of Show Me Your Papers.

But that, and the entire illegal immigrant problem got me to thinking. Now, before my more conservative readers blow a gasket and stop reading, let me state that I am in full support of the much used phrase, "What part of illegal don't they get?" Where I differ with my friends on the Right is that I'm enough of a pragmatic realist to know that 12 million status law breakers are pretty hard to find, let alone deport. Clearly, it just can't be done without doing great harm to our rule of law... Show me your papers!

Why, just in the last couple of weeks a rather large ring of document forgers was caught and implicated in what could be the sale of thousands of phony documents. And, as a former employer of hundreds of employees I can tell you that knowing whether the ID that new hire showed me was legit or not fell well outside my abilities. Particularly when the drivers license, for example, was from a different state.

In 2005 congress passed the Real Id Act which requires the states to standardize the design and safety features of drivers licenses. The deadline for this has been extended from May of this year to January 15, 2013. There is still much controversy concerning the Act since it sorta/kinda creates that much dreaded National Id Card. Show me your papers!

But hold on a minute. Considering ID theft, the illegal immigrant problem, the thought of terrorists entering the country on forged documents (see 9/11) and the need for each of us to prove who we are, both in person and online, is a national ID card really that bad? It would, of course, have to be very hard to forge. It probably would need a biometric identity component. And it would have to be universally accepted within the U.S.A.

Don't get me wrong. The idea of having any of my personal data socked away in a government computer system scares the heck out of me. And it doesn't matter which team is in charge, since I don't trust any of them as far as I could toss Air Force One. But the need is still there and growing. Wouldn't you like to just swipe your card in a card reader attached to your smart phone or iPad and be certified by a web site on the other end as, well, you. No more passwords with "letters and numbers and at least one capital letter" BS when trying to use your online banking account. For every potential horror there is a compelling benefit from such a national identity document. If technology can just come up with a truly impossible to forge card, that is.

So, each time my bank makes me come up with yet another password, which I have to write down in order to remember, which means it isn't really safe, I wonder if a national ID wouldn't be a better answer. Except, of course, for Show Me Your Papers!

ASK THEM ABOUT THE JOBS

2011-02-15T15:07:00.000-05:00

Well now, we've had snow storms, an Egyptian revolution and a very disappointing Super Bowl result so far this month and it's only the 15th. And now even more disappointment blossoms as our elected leaders play fast and loose with the national budget. And part of the reason is that the American people are pretty ignorant of how and where the government spends their tax money.

Bruce Bartlett nicely summarizes some of the many ways that we just don't get it. Case in point:

A Nov. 30, 2010, poll by WorldPublicOpinion.org found that when people were asked what percentage of the federal budget goes to foreign aid, the mean (average) response was 27 percent and the median was 25 percent. When asked how much of the budget should go to foreign aid, the mean response was 13 percent and the median was 10 percent. Actual spending is well under 1 percent.

This is just one small example, but when the public is that far off it says something. It says that either a large part of the public is just, well, dumb, (remember, 1/2 of all the people in your town are below average) or that we have failed miserably to educate ourselves and our children, or that our public servants do a very poor job of explaining just what they do and how they do it. I'm going with all three.

Of course it could be that our elected leaders don't know any more than we do. This is getting on my wires right now in the almost constant chant of, "Cut Spending, Cut Spending, Cut Spending" that we hear from the Right.

Now, no sane person would claim that our mountain of debt is a good thing. Or that running a $1.3 trillion deficit is in any way going to lower that mountain of debt. But, just as the GOP and the Tea Party and right wing radio talkers everywhere can, with a straight face, claim that raising taxes in a recession recovery will kill that recovery, I want to know how cutting government spending during the same recovery won't create even more unemployment. Would someone please explain this to me.

Government spending could just as easily be called government buying. That is, the government uses money collected in taxes and, of course, money borrowed from the Chinese and others, to buy goods and services. Now, before anyone has a fit over the simplistic nature of that claim, let me add that the government does this buying either directly or, sometimes very, indirectly. Let me explain.

Let's say the feds give a community block grant to a small town to help build a much needed sewer system. The town needs to hire and contract for all manner of goods and services in order to complete the job. And, of course as we've discussed before with regard to the Obama stimulus, the money doesn't stop there. The contractor buys some new equipment from a dealer a couple towns over, who then decides to enlarge his showroom with the extra profits by hiring a local contractor, who then employees three carpenters and subcontracts to a tile guy, who then buys a new used truck from a local dealer and...well it just keeps on going doesn't it. And don't forget that every one of those transactions is taxable! In fact, I challenge any of you to come up with a Federal spending line item that doesn't include wages or profit for persons either real or corporate.

Heck, take the most outrageous example of wasteful government spending that you can think of, like studying owl vomit in the Northwest, and somebody is still going to be getting paid, like researchers, their paid staff, the guy who fixes their truck, and on and on. Everything you can think of to do with government spending results in a paycheck for someone. It's just like the point I've made before about our spending on NASA. Honest, they don't pack the shuttle full of $100 bills and release them into orbit. Every dime is spent on earth to pay somebody!

So please, all you folks clamoring for spending cuts during a recovery; how many lost jobs can we afford? Do I think that it's a good thing that we are so far in debt? No! But if we can only stick blindly to our ideologies, even in the face of extraordinary circumstances, then we are well and truly screwed.

YOU CALL THAT A SNOW STORM?

2011-02-04T16:10:00.001-05:00

The recent mega snow storm that hit my home town of Chicago put me in mind of the record Chicago area storm of 1967. I was a senior in high school and thus allowed to drive to school instead of taking the bus. On this particular day I'd picked up my friend Bruce on the way in, planning to take him home after school. The sky was threatening and starting to spit a little snow as we went into the building. And then the sky opened. It began to snow at the rate of 2 or 3 inches an hour! We'd move from one class to the next, sit down and, I swear, the view out the new classroom window would be worse than the view from the room we left 5 minutes before. It was really coming down.

Now, this post wouldn't be truly complete without saying a little something about my car. My first car.

My first car was a powder blue, 1952 Austin Healey (Bug Eyed) Sprite which I bought for $450 as a 16 year old in 1965. At the time I had yet to learn how to drive a standard transmission car. As I slipped behind the wheel after completing the paperwork the former owner mentioned that "1st. gear and reverse where a little broken." It seems two teeth were missing. It clunked, but moved, in reverse but 1st. was just not worth the trouble.

Since I had a date with a tall redhead later I had no choice but to learn how to drive stick in my new sports car and do so without the use of 1st. gear.

Well, I only spun out once and never actually stalled the engine. Thanks must go to the fine British engineers who put a lovely, and forgiving, hydraulic clutch in my cute little car. I made my date with the redhead on time and we went merrily on our way...top down, wind in our hair, starting from each stop sign in 2nd gear and having the time of my life.

Neither my relationship with the redhead, nor the car, lasted all that long. The redhead broke up with me while driving, in the Sprite, to a Lake Michigan beach on the day after I had taken her to her school's prom. Not a real great memory there. The car I sold to one of my brothers and then I got married and moved away and I never saw the little cutey again. Here's an old Polaroid from the day I brought the beauty home.

So there I am, sitting in class just after lunch, when the Vice Principle comes on the PA to tell us that the school would be closing early. Now, understand, this was northern Illinois in the winter. They didn't close school ever for snow days. But this sucker had already laid down 16 to 18 inches of blowing snow, so I guess somebody thought earlier was better than later when we'd be facing 23 inches.

My first thought was, "Hey, we get out of school early." My second was, "and my car sits only 5 inches above the road!" This was going to be interesting. I found Bruce in the hallway and off we went to the parking lot. I was in a bit of a rush because I figured that fresh snow was going to be easier to maneuver in than the tracks from the bunch of school buses lined up along were the curb used to be.

It turns out that I was right. The Sprite was so light that I was able to drive pretty much on top of the fresh stuff. We were the first car out of lot and a quick look over my shoulder revealed the second and third cars caught in the tracks from the buses. We, on the other hand, were bobbing and weaving along at a good, yet safe, clip. Sort of in a controlled skid as we made our way to Bruce's house. At least that's what we did until we were about a half mile away from school. The little Sprite coughed once and then just died. Since there really wasn't a shoulder on the road, just plowed snow mounds, we were sitting on the roadway, during a white out blizzard, in a very small British sports car that was dead as a post.

We, of course, did what you are supposed to do. We opened the hood to see if we could fix it. Surprise, surprise! Lifting the hood (which on this model included the front fenders) revealed a perfect sculpture of the inside of said bonnet made of eight or ten inches of beautiful fresh snow which had blown in throughout the day. Here's a little tip about early British sports cars: their electrical systems will short out if the air is humid. My electrical system was covered with snow which, thanks to the heat of the engine while it ran, was now melting. A lot.

While I made this rather unpleasant discovery, Bruce very wisely flagged down another student who's car had not died and got us a lift to the nearest gas station. There, after an hour of so wait (it was in the middle of a blizzard) the tow truck guy and I went off to get the car, bring it back to the garage and try to dry it out sometime before Spring.

With a lot of digging, by hand, and the liberal application of a high pressure air hose, it only took another hour or so until we again heard the sweet sound of that British four cylinder engine and we pushed off again into the storm. Now, being a Midwestern boy, I might have been dumb enough to go out in a blizzard in a sports car, but I wasn't so dumb as to do it without carrying a shovel. So we'd go along pretty well until we hit an intersection full of ruts where we'd get hung up on snow packed under the car. A little digging and a little pushing and away we'd go again. This drama was repeated several times before getting Bruce home, but we finely made it. A ten minute ride in the summer had taken all of four hours and I was still several miles from home.

As tense as the trip had been with Bruce in the car, and on the shovel, I was now alone and it was getting dark. Either through luck, or my superior winter driving skills, I only had to dig myself out a couple of times. By the time I made it into our subdivision it was night dark, but the streets had been plowed. It felt so good to have challenged the elements and to have made it home safe and sound. I turned into our street and ... the Sprite died again, right at the end of the driveway that my father and brothers had spent all afternoon clearing. A quick glance at the gauges told the tale. Super winter driver had run out of gas! My dad was not amused.

So, all you folks that want to bitch about the bad winter weather just keep one thing in mind. We old folks can always top your stories with our own.

AFTER TUCSON

2011-01-12T12:33:00.001-05:00

I won't go into all of the political charges and counter charges relating to the mass shooting in Arizona over the past weekend. Andrew Sullivan over at The Atlantic is, as usual, doing a great job of looking at both sides, so if you want an overview I suggest you go there. What concerns me is, I think, much bigger and much scarier.

I've mentioned before that I'm worried about the confluence of a presidential election in our current heated political environment with the increasing awareness of, and crazy ideas, centering on end of the world theories involving the year 2012. Briefly, you'll remember, the ancient Mayan calendar ends a long cycle of measurement on December 21, 2012. This seems to coincide with other predictions and prophecies made through history, as well as some astronomical events involving the alignments of the solar system and the planets. Couple this stuff, explained and examined over and over again by the History channel (among others), with the end times prophecies of Apocalyptic Christians, Jews and Muslims (also presented with graphic images of A-bombs exploding and Horsemen riding on cable channels) and you can see why some, including your Curmudgeon, worry.

The usual response to such worries is a chorus of, "It can't happen here," followed by the suggestion that the worrier may need to get a life. I think after Tucson that argument has lost most of its force. What has driven me to the keyboard now was hearing a cut from Glenn Beck's radio show after the shooting. In describing what Beck said was an exchange of emails with Sarah Palin, Mr. Beck mentioned that if, God forbid, Palin were shot the country would just explode. (Or words to that effect, since I can't locate the link to see exactly what he said) That pretty much raised my blood pressure, coming as it did in response to the shooting of a Democratic member of Congress whose district was targeted, by Palin, with gun sight cross hairs, in the last election. Talk about projection!

So, just what is my nightmare and what, if anything, can we do to prevent it from happening? My 2012 story goes like this:

After a highly charged primary race the Republicans nominate former half-term Alaska Governor Sarah Palin as their candidate for the Presidency. The campaign leading up to the election is both brutal and somewhat unconventional. Instead of debates between the candidates we are blistered by wave after wave of social media attack and counterattack. The rhetoric gets so bad that both Facebook and Twitter attempt to moderate postings. Bad idea! The cries of censorship flow from both camps and the rhetoric just gets hotter. Election night feels, to most, like the air pushed ahead of a really bad hurricane. Something awful is about to happen. And then the polls close and, as President Obama is declared the winner in his bid for reelection, all hell breaks out across the country with riots, shootings, fires and looting.

Now, as a nation we have faced these kind of things before, most recently in race related actions like the Rodney King riots in L.A. But this time it's different. It's not just one city or even one region, it's all across the nation. And it doesn't burn itself out in a few days because, unlike in previous periods of our history, a large chunk of popular media in the form of Fox News and talk radio not only doesn't push for restraint but actually fans the flames with anti Obama rhetoric. Obama sends the National Guard to, say, Memphis to quell the rioting there and the troops are fired upon by packs of citizen soldiers trying to protect their families from the naked provocation of this "Illegitimate President." The rioting gets worse. Armed attacks are made against the President, and somewhat surprisingly, against the Vice-President. A brief dip into the talk radio cesspool reveals that the Tea Party types have finally realized that a Republican, Speaker of the House John Boehner, is now second in line for the Presidency and Twitter and the blogs are aflame with talk of the idea that he, after assuming the office, can then appoint the defeated Sarah Palin to be his VP. Then, just weeks away from the dreaded date of December 21, 2012, the end of the world types add their own fuel to the fires. If the world is going to come to an end anyway, they think, why should I follow any laws enforced by "those" people in charge. And besides, the religious among them reason, only through the Apocalypse can we reach the golden era promised by the Prophets. After national martial law is declared on December 19th things go from bad to worse. New Years Day 2013 finds us at war with ourselves. The American experiment has come to an end.

Mighty bleak, ain't it? Now, I don't claim to be any kind of prophet nor do I have a crystal ball. What I do have is a rich understanding of sociology and the real power of both mass media and the new social media to influence people. So, what can be done?

Let's all at least try to get both sides of each and every issue presented to the public. If some friend or family member forwards to you a link or an email that sounds, well, crazy, call them on it. Or at least ask them for their source. Oh ya, and I'd suggest stocking up on bottled water and toilet paper starting around the end of October 2012. Just to be safe.

A NEW YEAR, BUT THE SAME OLD INSANITY

2011-01-05T12:02:00.000-05:00

Here we are in a brand new year. The sun is high, the air is warm and mild and that lovely young lady in the bikini is about to bring me another refreshing beverage with a little umbrella shading the frosty glass. Not! It's cold and dark too early and it's supposed to snow again tomorrow. I really hate winter.

That said, what, you may ask, has been on the Curmudgeon's mind over this past month of lousy weather? Unfortunately, I'm still thinking mostly about the financial mess we are in and why the answers to it seem so hard for our elected leaders to comprehend. In particular I wonder why the mortgage meltdown continues to expand and why no one seems to have a way to fix it.

Just for fun I'm going to state my position up front and then justify it, rather than build an argument that then ends with my particular point of view. So here goes.

I think that one path out of our current economic quagmire is for the Federal Reserve to print more money! Okay, all you conservatives out there, just take a deep breath and relax. Your Curmudgeon, unfortunately, doesn't have the power to actually do that. But I really do think that the only way out of this hole is to climb over a pile of new money.

Here's the story. As I've noted before, wages for 98% of the country have been flat for decades. Average incomes have only barely, and in some case not, kept up with inflation. And, that inflation has been historically low thanks to the Fed's aggressive low interest monetary policies. Those policies, of course, were a major component in the sub-prime mortgage mess that the banks and courts are now trying to repair. So why do I think that we now need more inflation?

All through the past decade, until it all went bust, we, the country and its citizens, pretty much lived on debt. At the state and federal government level we see that, sooner or later, the piper must be paid. But at the personal level the bust was much more devastating to many. It is estimated that $1.2 trillion of the value of our real estate has been lost over the last 3 years. $1.2 trillion! Gone! Now, there are a couple of ways one can look at that huge number. First, and this has been my position until recently, it doesn't really matter if your house is worth less than your mortgage unless you're trying to sell or refinance. Just keep making the payments and all will be fine. What I didn't take into account with that position was the cycle of debt that had developed over the last 10 or 15 years. Our collective borrowing, whether by credit card, purchase mortgage, refinance mortgage or whatever, was based upon a simple assumption; we'll be able to pay off the debt because our real estate will grow in value. Want to add a new bath to your home? No problem. New bathrooms add almost what they cost to your home equity. Wait a year or two and your house will be worth more that when you started the remodel. Simple and elegant. And, as we now see, wrong. And it's that wrongness that has thrown sand into the gears of recovery. If I can't feel and believe that the value of my home has, and will continue, to increase than my plans as a consumer have to change. I must, therefor, stop spending.

This is no different than what a business faces. In fact, I've argued before that the American homeowner has been acting much like a business by using leverage from their home's increases in value to support their lifestyles. But now the value is gone. $1.2 trillion simply wiped out.

Now, remember, 70% of the US economy had been driven by consumption. Business growth and hiring requires demand for the products and services those businesses provide. No demand, no hiring. And $1.2 trillion is a whole lot of demand. So, what can we do about it?

The value of our property will, given enough time, recover. But we don't have a lot of time. Pouring federal dollars into the top of the hopper (the bank bailout) didn't work. Not that I thought it would, mind you. The amount that could trickle down to the consumers of this country was limited by the unmitigated greed of the bankers and brokers at the top. The tiny amount of money that escaped their hands would barely dampen a tissue, let alone create a trickle. Rewriting or adjusting mortgage loans isn't working because the foreclosure system starts from the assumption that the borrower is the wrongdoer. Any so called help for borrowers thus looks way to much like charity.

No, I'm afraid that the only way to recover the $1.2 trillion of lost wealth is to print money and get it into circulation. We need some inflation. Inflated dollars make debt, from the position of the debtor, easier to pay off. Across the board inflation means bigger paychecks and creates the urge to make purchases now, before prices go up. A little inflation, then, would be a good thing.

Now, clearly, inflation, in a general way, is a bad thing. But, as we have seen from Japan in the eighties and nineties, deflation is much worse. I'm in no way suggesting that we would all be better off with Zimbabwean style $100 trillion bank notes in our wallets (that will be $552 trillion for your cheeseburger sir, would you like fries with that?) or, like prewar Germany where it took a wheelbarrow full of money to buy a loaf of bread. What I am saying is, since the government can't cover the homeowners' losses on their property in the same way they covered the banks' losses with the bailout, inflation is the only way to get back the value that has been lost.

Well, another day another wacky idea. Happy New Year all.

HERE'S A LITTLE BRAIN TEASER

2010-12-07T16:24:00.000-05:00

During the recent discussions on the Bush era tax cuts one little thing keeps bothering me. Actually, it's two things.

First, it's absolute Republican dogma that all tax cuts increase revenue flowing into the government doing the taxing. This is, of course, based upon our old friend the Laffer Curve. You remember, right. As tax rates go up one reaches a point at which peoples economic behavior changes and they start to work less, thus lowering tax revenues.

As you can see, the government gets zero revenue from a 0% tax rate and, according to the theory behind the curve, zero revenue when the tax rate reaches 100%. Now, the problem with this nice simple formulation is that the curve doesn't work to predict anything. See, there's no way to figure out where the actual tipping point (labeled Equilibrium Point on the chart) lands. Are we now at the point that any increase in tax rates means less revenue or are we on the left hand side where increased rates equal increased revenue? There's no good way to know. According to the Republicans, of course, we're always on the right hand side.

The second bit of dogma is the Republican concept of "Starve the Beast." The easy definition:

"Starving the beast" is a fiscal-political strategy of some American conservatives to use budget deficits via tax cuts to force future reductions in the size of government.

We hear this a lot when the conversation turns to those nasty entitlement programs. If the Republicans could just lower taxes that would take care of all our problems because then the Democrats wouldn't have the money to fund their Socialist wealth redistribution programs and so on.

Okay boys and girls, we've learned two political terms. So, would someone please explain to me how they can both be right? How the heck can cutting taxes both increase revenues and starve the beast at the same time? One or the other (or both?) of these must be wrong. Or maybe I just need to take a nap until my head stops hurting.

WHY THIS RECOVERY IS JOBLESS

2010-12-03T15:35:00.000-05:00

The latest employment numbers are out and things are not looking good. The unemployment rate increased last month from 9.6% to 9.8%. While I think everyone can agree that this is not a good thing it surprises me that folks who should have a handle on this don't seem to. For example, Davis Leonhardt in the New York Times, says with regard to the bad jobs numbers, "What’s causing this? No one knows, to be honest."

Okay, so no one knows why hiring has stalled. Now, maybe I'm fooling myself, but it seems to me that the answer is really quit simple. It goes like this:

Before the Great Recession the single biggest driver of the U.S. economy was consumer spending, amounting to over 70% of the total economy. This may, or may not, be viewed as a good thing, but it is what it is. Americans purchase goods and services. Most of us don't manufacture anything, that's done in other countries now. Most of us don't grow things to eat, that's done by factory farms using (illegal) immigrate labor. No, what Americans are good at today is consuming. But the financial meltdown, and resulting recession, put a stop to that in a big hurry. Why, you ask?

Because many more Americans than anyone wanted to admit have been living on debt. Not living in debt, living on debt. Let me explain. It's pretty clear that a calculation of many, if not most, American's net worth would yield a negative number, both today and before the recession hit. When the average home price reached $200,000, while at the same time the average new vehicle costs close to $20,000, it's not hard to see that your average family of 4 making $50,000 was behind on the debt to equity ratio as it applied to their stuff. You could add up the value of everything that family owned, but when you subtract what they owe on just the house, the car, and the credit cards the number, in a lot a cases, is less than zero. Negative net worth. In fact, by most definitions, a lot of folks in this country are bankrupt. But, before the recession, they weren't broke. So how does that work?

It's like I said, we were living on debt. We have, as a nation, been spending more than we make, year in and year out. Today, after seeing what a bad downturn can do, that concept seems, well, silly. But make no mistake, it was happening. Remember, wages have been mostly flat for the past decade. The economy created far fewer jobs over the last ten years than were needed just to break even for those young people just entering the job market. So we borrowed. We borrowed from the banks to finance and refinance our homes. We borrowed to buy that car. We borrowed from our credit cards to buy Christmas presents. We could do this because we all knew in our hearts that our jobs were secure, and our house would only increase in value, so we'd be able to make the payments each month. If an emergency came up we knew that another refinance of the house would put thousands into our hands. No worries, be happy.

So, when the hydra-headed monster of this recession emerged we were faced with a host of insurmountable problems. House values tanked so we couldn't tap the old refinance ATM. More importantly, the so called credit crunch meant that even if you had equity in your home the banks weren't lending. Credit cards? In a totally predictable manner, as soon as the credit card companies got wind of "credit reform" raising its head in Congress they raised interest rates and cut available credit for millions of card holders, bad risk, good risk or whatever. So, that money source also dried up. And then came the layoffs. As the number of unemployed Americans skyrocketed, even the most free spending of us pulled up short. As consumer spending declined that lack of demand for goods and services caused even more job loses. And around and around we go. And, contrary to right wing conventional wisdom, companies are not waiting for an extension of the Bush tax cuts to jump start the economy. They're waiting for demand to come back.

So, why do some say they can't figure out why employment is still down. It beats me. All together now, lets follow along:

70% of the economy was consumer spending.
Much of that spending was fueled by debt.
Debt was an acceptable way to live because with a good job and increasing home prices debt can be "managed."
Falling home prices, tight credit and a shaky job market means people don't have the money to spend now or in the foreseeable future.
Consumers not spending means that the demand for goods and services also stops.

Fixing just one (say jobs) without fixing the others (real estate values and tight credit) just won't work.

I'm sorry. There isn't any magic answer to this. Until that 70% of the economy gets their hands on some (borrowed) money the problem will continue. I just hope that the dunderheads in the government don't make things worse. Anyone want to bet on that?

WEAR A KILT LADDIE!

2010-11-16T13:40:00.000-05:00

Here's a great idea for the next time you need to fly the friendly skies. The cell phone videos alone would be priceless.

DEALING WITH REALITY

2010-11-16T11:31:00.000-05:00

David Frum, former George W. Bush speech writer, has a very interesting article in the New York Times. It's not very long and I encourage everyone to take a look. In the article, titled: Post-Tea-Party Nation, Frum looks at how today's conservative politicians would rather keep to the talking points play book than deal with the realities that the country finds itself in. A sample.

Too often, conservatives dupe themselves. They wrap themselves in closed information systems based upon pretend information. In this closed information system, banks can collapse without injuring the rest of the economy, tax cuts always pay for themselves and Congressional earmarks cause the federal budget deficit. Even the market collapse has not shaken some conservatives out of their closed information system. It enfolded them more closely within it. This is how to understand the Glenn Beck phenomenon. Every day, Beck offers alternative knowledge — an alternative history of the United States and the world, an alternative system of economics, an alternative reality. As corporate profits soar, the closed information system insists that the free-enterprise system is under assault. As prices slump, we are warned of imminent hyperinflation. As black Americans are crushed under Depression-level unemployment, the administration’s policies are condemned by some conservatives as an outburst of Kenyan racial revenge against the white overlord.

I'm pretty much burned out on politics right now so I'm not going to expound on the meanings of Frum's piece, except to say that I agree with him. Read the article!

MEDICAL MALPRACTICE REFORM IS NOT FUNNY

2010-11-09T12:29:00.000-05:00

Well, actually, it sort of is funny. At least the way the GOP uses and abuses the term, that is.

For many years now the primary reaction of the GOP to any Democratic talk of health care reform has been to scream, "We want malpractice reform first," followed by what ever other means of obstruction that they can think up. Conservatives throughout the land would then nod knowingly and the conversation would turn to other, more pressing matters. But then came 2008 and President Obama.

This guy had a pretty fair election mandate, given the vote totals, and both houses of Congress on his team. The Democrats, thus charged up with victory zeal, went ahead and actually passed a health care reform (HCR) law. But, as we now know, said law did not contain the sacred malpractice reform which those on the right have assured us is all that's needed to make health care affordable for all.

Now, the usual reason given by the GOP is that the Dems. are beholden to the trial lawyers for big campaign contributions so they will never, never I say, do anything to stop frivolous law suits. Since the passage of HCR all we've heard from the right is that they will repeal this awful law and replace it with something better that includes malpractice reform. What sends my blood pressure raging is that, in reality, the federal government can't really do much, if anything, about malpractice reform.

Medical malpractice civil actions are a purely state matter, governed and controlled by state law. Now, if you listen to the Republicans and conservative pundits that little fact gets, shall we say, little notice. In fact, it basically gets ignored. Here's an example from the Wall Street Journal which starts off with the expected position:

Eliminating defensive medicine could save upwards of $200 billion in health-care costs annually, according to estimates by the American Medical Association and others. The cure is a reliable medical malpractice system that patients, doctors and the general public can trust.

But this is the one reform Washington will not seriously consider. That's because the trial lawyers, among the largest contributors to the Democratic Party, thrive on the unreliable justice system we have now.

A careful reading of the whole article does actually, in a sort of back door, off handed way, make mention of the problem:

On July 31, Rep. Bart Gordon (D., Tenn.), a Blue Dog Democrat, introduced an amendment to the House health-care reform bill (H.R. 3200) to fund pilot projects for liability reform, including pilots for "voluntary alternative dispute resolution."

What happened? According to the online newsletter Inside Health Policy, "While Gordon's amendment originally had seven policies that states could implement in order to receive federal funding, the other five suggestions were crossed out . . . due to the agreement with the trial lawyers." (Bold and italics added)

See the catch? The best the federal government and Congress can do is threaten to withhold federal money to states that don't do this or that in order to reform medical malpractice rules. This is that classic form of federal intervention in state law that we enjoyed during the 55 mph years in the 70s and 80s. States had to lower their top speed limit to 55 or they wouldn't get federal highway funds. In the case of medical malpractice I assume that it would be Medicaid funds, or something along those lines, that would be withheld. It is, in point of fact, a method by which Congress could effect the matter at the state level. I just don't think that you can call it malpractice reform.

You see, contrary to what one may think reading this Blog, I'm a firm supporter of State's Rights. But then, so are the Republicans and conservatives who keep pushing for this. My position on this matter is that only the states can, or should, control their own courts and civil practice rules. I can well imagine the conservative outcry if such a federal mandate were added to health care reform. It would be much like the outcry over the insurance mandate that is in the law.

And it's not like the states can't so the job. The WSJ article doesn't mention the Texas law, or those of other states, that have gone a long way to correct many of the problems of the current way we deal with medical malpractice in our society. Some are better than others, but each at least attempts to find solutions. And please, don't forget that from 2001 through 2006 the GOP controlled both houses of Congress and the White House. Why didn't they do something then?

So here's the best advice that an old, retired lawyer can offer regarding medical malpractice reform. The next time you hear a GOP member of Congress spouting off about malpractice reform and what he or she can do about it, ask yourself why he or she didn't do, or suggest, anything within their own state. My guess is that they think that actually doing something doesn't get them elected nearly as well as just complaining about the other side not doing something.

HOW ABOUT SOME FACTS

2010-11-06T14:33:00.000-04:00

The chart above is from this Blog. I think it addresses pretty well the perception on the part of many on the right (see my last post, here) that the only job created have been government jobs. I think this says less about a segment of society not paying attention and more about how successful the GOP, Fox News and talk radio have been in pushing a less than truthful argument.

MORE ON THE JOBS ISSUE

2010-11-01T11:22:00.001-04:00

I received an email response to my last post from a dear friend. Here's her email and my reply:

One question, how does the current administration think they can create jobs other than within the government? That is the place where the jobs have been created in the last two years, which is why D.C. has the lowest rate of unemployment. The majority of the current administration have never had a job other than professor, politician or employment by a tax-exempt organization. I would never trust them to know how to create a job outside of the government…

Okay, let's take one example from the real world. Early in the run up to the invasion of Iraq the Bush administration, by way of the DOD, let contracts to private firms to provide security for diplomats and other civilians who would soon be in the war zone. One of those companies was Blackwater.

Blackwater (now Xe) built their headquarters in Camden County, NC on a tract of over 3,200 acres and started hiring, and training, former military personnel.

Our real estate office was less than 20 miles from Blackwater in an area where 20 miles is a short hop. We saw, by way of the Multiple Listing Service, that these new people in the area bought and rented homes. We saw that they bought cars and trucks from local dealers. Heck, we even saw unmarked Zodiac boats full of healthy looking men in unmarked black outfits tying up at the waterfront restaurant that we went to for lunch. In they'd come for a good, hardy meal.

See the point? Federal dollars, spent by the Department of Defense, passed down the chain to the employees of Blackwater who then spent those dollars in the local economy. The money was then re-spent by members of the local economy to pay cooks, Realtors, car dealers and others. Did the government create jobs? Not directly, but clearly the indirect effect did create jobs. The same is true across the country.

The second point I should make is, if you're correct and the "I've created thousands of jobs in my industry" candidates are the better choice for voters, how the heck can THEY create jobs after they're elected? Your side's position is that they CAN'T create private sector jobs, isn't it? What do you expect them to do, then?

I JUST DON'T GET IT

2010-10-29T15:45:00.000-04:00

There's a little trick that I've learned from marketing. Watch the way people and companies advertise and you can learn who they think is their target audience. It's not earth shaking, but it can be handy in competitive markets. It apparently has failed miserably during the current political season.

I just cannot understand why anyone would believe some of what is advertised to be the benefits of electing candidate X, Y or Z. Of course, that's when they actually say anything about what they want to do. Mostly they just point to their opponent and try to rile up the pitchforks and torches crowd. When they do tell us it goes something like this.

You have some very wealthy people, claiming that "they know how to create jobs," because they're such fine and successful business types, Yet, they're willing to invest millions of dollars, of their own money, to take a job in the government, which government they decry as "The Problem," and do so for the shear love of freedom and country. Back on the farm we used to shovel stuff like that.

Why do I smell BS? First, I don't care how many jobs that X,Y, or Z may have created in the private sector, they are now in the public sector and we know, because they themselves have been telling us for many, many months now, that government can't create jobs! If they're running for a legislative position they're in for a real surprise; you're no longer in charge. You are one newbie fish in a little pond full of much more experienced fish. They have turf to protect. And then there's the other party. They may not be in the majority, but they know all the same tricks that you're party used on them for the last 20 months. You won't get much done, I'm afraid.

More importantly, your job is to legislate. To write laws which compel others to do, or not do, things. It turns out that the only way that you Senator X or you Representative Y can create jobs is to...wait for it...spend tax dollars! The same is, of course, true for the Governor jobs. Those folks may be more in charge, but, according to them, any jobs they create are still government jobs and therefor unworthy of mention. Now, I know that right about now all of my readers on the political right are sputtering and trying to blot up the coffee they just spit on their keyboards, because I have neglected to mention the super remedy for all that ails us: TAX CUTS. To that I will only say: Bush tax cuts 1 and 2 and the $300 billion of cuts in the stimulus package didn't seem to work, so what makes you think even more cuts will work now?

The second problem that I have with the self financed business types is that idea that they're running to help," The Little Guy." Here's the rub. If you're such a great, and successful, business person, why would you invest millions more than the job pays? Could it be that you plan on writing laws and governing in such a way as to benefit yourself? Making money is what they do best and, as we saw in the case of Bell, California, you can only vote yourself pay raises for so long before somebody figures it out. No, I'm afraid that the "Spend millions on a government job," types are in it for the money that they and their buddies will make at our expense. They want to lower their taxes and deregulate their businesses because, as I'm sure they would tell us, what's good for them and their businesses is good for the country. If only that were true.

I just do not get why that's not obvious to anyone who looks.

SO, WHAT DO YOU WANT TO CUT?

2010-10-20T12:13:00.001-04:00

Our friends in the tea parties, and just about every Republican running for office, tell the voting public what is needed to fix the economy: Stop spending and cut taxes. It's a nice, simple, bumper sticker message. Of course, if you ask them where they want to cut spending they; repeat that we must stop spending; or, change the subject, say to repealing every thing the Democrats have done, ever; or, have the person who asked the question "detained" by their very own private security cops. What they don't do is answer the question.

It's easy to see why. Pretty much every dollar of government spending, at every level, has some group of citizens who think that the government funds are just fine by them. Medicare? Seniors and boomers. Money to save the spotted owl? Tree huggers. New weapons systems? The entire military industrial complex. Some one, hopefully a voter, somewhere, really wants (or needs) that government money. So it's pretty easy to see why the politicians don't want to piss off voters by saying, "yes, I will cut aid to (fill in your pet project) and damn the consequences."

The problem is that there is very little that can be cut without major societal disruption. But what about the tax side of the argument? The clear position taken by the right is that the only way to save this great nation is to cut taxes. Home sales in the crapper, cut taxes! Poverty on the rise, cut taxes. Unemployment at 9.6%, cut taxes. But, of course, first we must make the Bush tax cuts permanent. Then all will be well with the world.

But here's the rub. First, if tax cuts are the way to improve the economy and job creation, why hasn't it worked? Remember, these cuts have been in effect for 9 years for some and 7 years for the rest. On top of that the much hated Obama stimulus included $300 billion in tax cuts directed at 95% of the country. People's after tax wages went up immediately after the stimulus bill was signed into law. Where, dear tea party, are the new jobs? But, here's the thing, on the stump the tax cut candidates make the argument that making the Bush cuts permanent will help create more jobs. They speak and act as if these are new tax cuts; something we haven't seen before. They want to have it both ways. They know in their ideological hearts that all taxes are bad so they rant on about health care reform raising taxes. About, in fact, just about every plan or program put forth by Obama and the Democrats in the last 20 months. This or that program will, "RAISE OUR TAXES."

But wait a minute, claiming that one or another Democratic proposal will result in higher taxes is one thing. Claiming that not extending tax cuts already long in place is a tax increase is also, while a little disingenuous coming from the same people who passed the bill with the sunset included, is at least consistent. But you can't then try to pass off that extension of cuts as new tax cuts that are somehow going to do for the economy what they haven't done for 7 years.

So, the question I have for the Republican candidates is: Given the size of the debt and the deficit, and that extending the Bush tax cuts doesn't count as new cuts, just what the heck taxes do you plan on cutting? And while I'm at it, if you first cut programs, or even whole departments of the Federal government, as a way to help the debt and deficit, and then reduce taxes with any excess left over, how, exactly, does furloughing thousands of Federal employees and contractors lower the unemployment rate?

So, what the heck do you want to cut? I'm just askin'

MONDAY'S RANDOM THOUGHTS

2010-10-18T16:33:00.001-04:00

The stacks of Post-it notes and loose paper upon which I jot down ideas for this blog are starting to take over my desk, so here are a few Idea Starters from the pile.

Good Grief!
Looking at the current political scene I am reminded of Charlie Brown once again facing Lucy and the football. It's not hard to see the Republicans as Lucy and the Democrats as the ever hapless Charlie Brown. Ever since President Obama took office he, and to a lesser extent, the Dems. in Congress have tried to be bipartisan and include the GOP in crafting legislation. And each time, it seems, after only one Republican lawmaker agrees to sign on if the bill is just changed a little, swish, the ball gets pulled away and the Dems. land on their collective butts.

Will they ever learn? Did Charlie Brown?

You Mean I'm Still Paying Taxes!
There's a dirty little secret (actually, not so secret, just ignored) fact about all those wonderful IRA and 401K plans in many Boomers retirement accounts. They're TAX DIFFERED, not tax free investments. And with a mandatory age of, I think, 72 when you must begin taking money out, there are going to be a bunch of seniors facing income tax bills well after they've stopped working. The government giveth and the government taketh away. Get over it.

The Unemployment Problem is Worse Than We Think.
Now, why would I say that? Well how about the fact that many of the mortgage brokers in the last two or three years of the real estate bubble were freelance, independent contractors. As were many real estate appraisers. As were many home inspectors. And as were most real estate agents. If you don't draw a paycheck from an employer you also don't get unemployment benefits.

For example, at the height of the boom on the Outer Banks of North Carolina, where The Queen of the Frontier and I had a real estate firm, there were over 1,300 sales agents or brokers. The off season population of the entire 124 miles of coast is about 34,000. That's about one real estate agent for every 26 residents. Including children! And the vast majority of them worked as independent contractors.

Are Low Interest Rates Hurting the Recovery?
Maybe they are. I know that this idea is completely counter intuitive, but let me explain.

There are several ways to look at mortgage interest rates. One is to see the rate as being "set" by what the Federal Reserve decides at each meeting. This is one of the main tools that the Fed has for fighting inflation. Another is as a hedge against risk, ie. a borrower deemed a poor risk will have to pay a higher interest rate and a good credit risk will borrow at a lower rate. There is a third way, which is to see mortgage interest rates as reflecting demand for mortgages in the market. Okay, you ask, but so what.

Currently mortgage interest rates are at all time lows. Most would see this as first, a good thing, if you want to borrow and second, a good thing because it means that that the Fed is keeping inflation in check. But what about a down side? If you're a banker doing mortgage business and want to stay competitive you're faced with a bit of a problem. You need to offer the low rate to your good risk borrowers, but in the current economy can you trust that even the good risk client will have job in 6 months? You also face the problem of a disappearing margin. Banks are offering depositors less than one percent interest on their savings now. If the Fed pushes rates much lower banks will have to lower savings returns even lower yet. Can you say zero? Bankers are already so afraid of any risk that they've effectively stopped all lending in places.

And that's where we begin to lurch toward the real bad problem: Deflation! Deflation is when prices for goods and services go down over time. And it's not just prices. It's also wages. It's just fine, at first, for the consumer who gets a bargain, but human nature being what it is leads to a very unhappy ending. People stop buying as they wait for tomorrow's, or next week's, lower prices. Store shelves remain full so orders for new goods stop. Distributors can't clear their warehouses, so they stop ordering goods. Manufacturers stop making stuff. Raw materials remain in the ground. The economy shuts down. Did I mention the wholesale layoffs?

Deflation is a very bad thing, just ask Japan. So right now the Fed is fighting deflation by...wait for it...printing more money. Now, I don't have as much of a problem with that as some of the Tea Party types. We have had a very low rate of inflation for some time. Private wages have been stagnant for over a decade. In certain sectors, like consumer electronics and computers, we've come to expect that just waiting a few months will let us buy that flat screen for a couple hundred less than we could today. What worries me is that the Fed is also keeping interest rates low. So, they're fighting inflation by lowering interest rates and fighting deflation by inflating the currency!?! What the heck am I missing here?

I think a better plan would be to continue a bit of inflation through the currency and raise the bank exchange interest rate by one or even three percent. This rate increase will provide the following positive effects to the economy. First, banks, who currently have no stomach for risk at all, may see that, yes they can make loans and make a profit. Second, and I think an even better result, home buyers will see interest rates rising and stop sitting on the side lines. Just plug some numbers into a mortgage calculator program and see what one or two percentage points does to a monthly payment.

For example, a loan of $100,000 for 30 years at 3% (I've seen lower rates offered) has a payment of $422/month. Push the rate up to 5% (still a very low mortgage rate) and you pay $537/month. Finely, try 7%, which is historically around the average, and you'd pay $665/month. If potential buyers think that rates will increase they may, just may, start buying real estate again. The same would be true for businesses, you know, the corporations that at last count were sitting on over $1.5 Trillion in cash. "Time to build that new plant before the rates go up any more."

I'm I crazy? Just ask Her Highness, she'll tell ya. But it can't be any crazier than what the economy is doing now, so what the heck. Let's give it a try.

SOMETIMES YOU JUST HAVE TO RESPOND

2010-10-12T14:15:00.000-04:00

Truth be told, on any given Sunday morning I'm a pretty lazy fellow. I read the paper, including the comics mind you, watch some of the talk shows and then a football game or golf, depending upon the season. But sometimes something flips my switch and I just have to respond with more effort than yelling at the TV or throwing down the paper in disgust. This past Sunday was one of those times. Below is a letter which I wrote to the editor of our local paper. The entire letter to the editor to which I'm responding is here. This is slightly edited to eliminate the authors name.

Dear Editor:

This past Sunday's local newspaper contained a letter from a reader who expressed his dissatisfaction with the Obama health care reform legislation and its personal effects on his finances.

As a wise man once said, everyone is entitled to their own opinion, just not their own facts. this letter writer says, "(T)his administration ... also has a health plan program that creates a 'donut hole' in the Medicare prescription drug program."

Well, not exactly. The so called donut hole in prescription drug coverage was a part of the George W. Bush Medicare Part D prescription drug benefit which was passed by the (then) Republican Congress and signed into law my President Bush. This is the same addition to Medicare which was not funded and which thus added significantly to our national debt. This is the same addition to Medicare which forbade the government from negotiating with drug companies for the best and lowest price for prescription drugs. Let me repeat: the Medicare Part D prescription drug benefit was proposed and passed by the Republican Congress and signed by President Bush.

The correspondent goes on to say, "Obama said, 'we know your prescription drug cost will increase, so here is a check for $250 - a one-time payment.'" This letter writer alludes to the idea that since Obama crammed this donut holed health care program, "down our throats," (which he didn't, see above) the one-time payment of $250 was somehow an insult, since his actual donut hole drug coast would range much higher.

Sorry, but the $250 was contained in the new health care reform law to lesson the donut hole costs for this year. The new law actually eliminates the donut hole over a few years during which the hole will get smaller and smaller.

Finely, the letter writer laments that, "Obama's administration also takes $400 billion from the Medicare plan - thus the 'donut' hole." The $400 billion from Medicare is in the new law, but refers to cost reductions over 10 years or $40 billion a year in savings to the government. And, "thus the 'donut' hole," again makes the incorrect assumption that the said donut hole was somehow created by the current administration. It was not.

I would caution this reader and, in fact, all of the voters in our great state, to learn the facts behind the political babble we hear and read daily. Otherwise you'll be voting on November 2 with incomplete, or incorrect, information. I don't think any of us wants to do that.

Thank you,

I hope that I shed a little light on this issue and that the letter writer, and others with the same mistaken ideas of what's going on in the world, may have learned something. Hey, I'm optimistic.

I GET IT NOW!

2010-10-05T12:08:00.001-04:00

For some time now I've been pulling out what hair I have left over the issue of the $800 billion stimulus passed and signed into law early in 2009. The ever helpful Republicans, after voting NO in lockstep, started telling us that the whole thing was a complete failure. They claimed, as per Econ. 101, that the government can't create wealth or private sector jobs. This was said over and over and over again. Now, after more than a year, the drum beat has changed only to tense. "The stimulus didn't create even one job," said a Republican lawmaker in an interview. "Not even one," he declared.

Now, aside from the obvious fact that outside, nonpartisan, observers have shown that at least 1.2 million jobs were created by the stimulus, the stimulus failed BS is still the GOP talking point. This seeming disconnect from reality just makes my head hurt. Why, you ask? Because history tells a different story.

In the weeks leading up to the passage of the stimulus the GOP and the right wing made reference after reference to the FDR years during the Great Depression. We were told that none of the New Deal projects got us out of the depression. That all those projects failed, just like the Obama stimulus would fail. Time and again we were told that it was only WWII that ended the Great Depression. And then they moved on to all the other bad things that would befall us. They just sort of skipped over why the war ended the economic troubles of a decade. So what was the magic of the war?

Deficit Spending! That's right, the government needed all manner of war related products, from Victory Ships to Spam. The nasty old government spent huge amounts of borrowed money to arm for and then fight a two front war. In fact, the spending as a share of Gross National Product was far higher in the war years than it is today. And it was almost all on borrowed money. Did the war deficit spending, then, create any jobs or wealth? Both, of course, in spades. Entire industries were expanded (aircraft manufacturing) or created (atomic energy, radar, computers) during those years. This simple fact is that when a government spends money to buy things, even things that have a short lifespan like bullets and bombs, that spending creates jobs in the private sector and profits for businesses.

To listen to the GOP one would think that such an idea is just crazy talk. That position reminds me of the folks who think that NASA and space flight are a huge waste of tax dollars. They act as if the capsules are stuffed full of hundred dollar bills that are then ejected into space in a giant paper cloud. Sorry folks, all the billions spent on space flight went to actual businesses and people.And the long term benefits to society go far beyond Tang. So how do these historical facts fit into the current debate over stimulus spending? And why does my head hurt when I hear that the stimulus failed?

Well, the answer to the second question came this weekend in a column by George Will that appeared in our local paper last Sunday. In describing all that was wrong with the stimulus Mr. Will offered that, if the stimulus had worked then unemployment would now be less than 8%. And it hit me like a lightning flash. The people claiming stimulus failure weren't actually looking at the type of spending or the long term effects of dollars of stimulus not yet spent. They were, and are, only pointing to the claim made by a member of the Obama administration that the stimulus would keep the rate of unemployment under 8%!

That's it. That's the whole argument. Somebody made a too low estimate of the effect of the stimulus and since that wasn't met, the whole thing was a failure. Had the administration predicted that the law would keep unemployment under 12 or 13 percent, the insane position that stimulus failed would itself be seen as a failure. But, they didn't so now we are subjected to pundit after pundit mouthing the same claim. Stimulus failed because the rate is over 8%. Period. Nothing else need be said.

The only thing I can do now for my mental health is, every time I hear or read this stimulus failed crap, I say to myself, slowly and with feeling "Mission Accomplished." See, sometimes they make predictions that are wrong too.

ALL NEW, LEMON SCENTED, PLEDGE TO AMERICA

2010-09-29T11:11:00.000-04:00

My brother Scott sent me the following piece that he wrote. Very funny and, unfortunately, true. Enjoy.

Pledge to America! (Lemon scented )

Shine, restore, and refresh your Country.

Pledge® Natural Beauty is ideal for quickly cleaning your wood furniture and clearing your mind of any factual data. Its Anti-Dust™ formula keeps America looking less sooty, longer. It removes dust, dirt, smudges, and all Gays, minorities, or non-Judeo/Christians in a flash. Plus, it protects against Health reform, water damage and stains. Dusting with Pledge® leaves America squeaky clean with no waxy buildup.

A Wonder for Wood Furniture—and a Variety of Other Surfaces in Your Traditional Values Home!
Great for increasingly popular vague themes like…………

We pledge to advance policies that promote greater liberty, wider opportunity, a robust defense, and national economic prosperity.

We pledge to honor families, traditional marriage, life, and the private and faith-based organizations that form the core of our American values.

We pledge to make government more transparent in its actions, careful in its stewardship, and honest in its dealings. Plus, Pledge works on …..

People who don’t know any better.
People who listen to Fixed News
People who are Mega Wealthy (giving them a tax break will help us all because it will trickle down to us wage slaves… honest.)
People who are CEO’s of Health Insurance companies. (If we repeal this awful ObamaCare that gives actual care to those who need it most and just stop those frivolous lawsuits (Tort Reform) then all the Doctors, Hospitals, And Health Insurance companies will lower their prices or premiums and America will be a Great and Prosperous Land once again… honest.

Don't take chances with your best investments… Try Pledge. If you are not satisfied in two years, we will reinvent the same Pledge with different wording.

Directions for use:

Press key issues lightly on electorate, gradually increasing pressure as you go. Start with larger Faith Based groups first.
Listen to people who agree with you. They are always right.
Motivate potential voters thru FEAR.
Take Special care of those large Corporations and Lobbyists that got you elected last time (they don’t want money… only Love)
If rehashed ideas look cloudy or smeary, lie or blame President.

Remember our motto: If it smells like a lemon it's our... PLEDGE TO AMERICA!

I found all the information listed above on the website WWW.GOP. gov

It is all listed under the heading "The 2010 Republican Agenda "

I copied it word for word and didn't make anything up..... Honest

If only this Pledge could remove Tea stains....

I FIND THIS ALL VERY TAXING

2010-09-22T15:49:00.000-04:00

In a continuing effort to make some sense out of the "Tax Cuts" "Tax Increases" discussion now going on, I'd like to offer a few points.

First, didn't House Minority Leader John Boehner and, in fact, all of the Republicans then in office (except Rep. Ron Paul of course) vote in favor of the two rounds of the Bush tax cuts? And, didn't those bills contain the expiration date for the cuts? So, let me get this straight, they voted for tax cuts that they knew would expire at the end of 2010 but now scream about how this so called tax increase will ruin the country. To my mind they are either complete hypocrites or, in fact, they always intended to make the cuts permanent and only included the sunset clause to get Democratic votes. I'm pretty sure it's the latter, since during the early years of the Bush presidency there was talk of a permanent GOP majority floating around. Of course they could "fix" that expiration date.

Now, please tell me how throwing the opposition a bone that you never intend to let them eat is any different from offering a Senator, say from Nebraska, the perk of never having that state pay for Medicaid increases in the future? That, folks, is politics. But, it can be argued, that considering the current economic problems letting tax cuts expire now might be a mistake.

But let's at least get serious about it. During the Clinton years the country created 22 million private sector jobs and the government ended up with a surplus. During the Bush years only 3 million new jobs were created and the tax cuts cost the government $1.3 trillion. Any arguments that start with the assumption that maintaining the tax cuts will help create jobs is just a bunch of Republican hot air. It didn't happen under Bush and it won't happen now. And let's not forget that the ever so hated stimulus bill contained $300 billion in tax cuts. Still no big rush to create jobs.

But. you say, won't increasing taxes stifle job creation? If that is true then how do you square that with the fact that corporate America is awash in cash, but still not hiring. What am I missing here? The issue is one of demand on the part of the American consumer. Without increased demand, companies don't, and can't, hire. And, while it is never said but certainly applies, tax cuts are only felt when the taxes are due and even then only if the business makes money. No demand = no hiring. It really is that simple.

I, personally, have started eight different small businesses in the last 40 years. I've created jobs and made payrolls. I've made money and lost money. Trust me on this when I say: tax policy means nothing when it comes to hiring for new positions. Nothing. In fact, I think I can safely say that any small business owner who makes business decisions based on tax policy is both a fool and a bad businessman. The bottom line issues are how much the particular employee will cost to hire and how much will that labor contribute to profits. We also must assume that companies made financial projections based upon the fact of expiring tax cuts. Or maybe they just assumed that their bought and paid for lawmakers would put the fix in, as usual.

Please remember that it is the duty of publicly traded companies to maximize the returns of the stockholders. Period. Doing good for the country, the workers, the customers, or the planet all take a back seat to ever increasing profits. What has this given us. Enron, AIG, Countrywide and Madoff are just a few examples of the religion of greed. More to the point, it has also given us jobs outsourced to cheaper labor markets, flat or declining wages and the flaunting of even reasonable safety regulations that might interfere with those profits.

I think it's clear that until consumer demand picks up, job creation will be slow and sporadic. But, of course, there are other arguments against allowing the tax cuts to expire for the top 2% of earners. One goes like this: "If we increase taxes on the rich it will stifle investment." But will it really?

I think that there is a popular misconception about investments and investing in our country. Every brokerage firm or online stock trading firm touts its "Investment Opportunities." Heck, stocks are referred to as "Equity" investments. You pays your money and you get a piece of a particular company, right? Well, yes, you do buy a piece or share of a corporation. In the case of mutual funds you buy fractional pieces of many different companies. That's all well and good, but as it relates to higher taxes limiting or diminishing investment, it gets a little more complicated.

If you buy your stock from an Initial Public Offering or I.P.O. you're buying shares of stock directly from the issuer, that is, from the corporation itself. In that case you are, in fact, investing in that company by providing them with capital. But, when you buy stock in the stock market you're really buying from another, so called, investor who wants to sell his stock. None of the money goes to the corporation. It goes to the seller and, of course, to the broker(s). You are indeed investing, but only into the coffers of those brokers and other stock traders. Sure, some of that money may end up in the hands of venture capitalists who then invest directly to new or growing corporations, but only in a secondary way. It's called "Playing" the market for a reason. It's really just gambling. You put down your "bet" and hope that the price of stock goes up so that you can sell it for a profit.

Now, this is a somewhat new form of investing. In the old days, say 40 years ago, one bought a stock from a seller, by way of a broker, and then held on to it as it, hopefully, increased in value. With the advent of the mutual fund the idea of buy and hold changed. Now when you buy a share of the mutual fund you're actually buying fractional shares of many companies. The trouble is that the fund managers, wanting of course to increase profits for their clients, and themselves, trade the underlying shares at a fast and furious rate in the market. They only need a little gain on a lot of shares to show that profit. Buying and holding isn't sexy and doesn't make them nearly as much money. So how does that figure into our discussion on taxes?

Because what's called investing is, in most cases, really just gambling in the stock market. Increasing taxes on the highest earners may deprive them of some of their gambling funds, but its effect on actual investing by venture capitalists will be much less. Likewise, if the argument is that higher taxes will prevent small business people from starting or growing their businesses, the effect will also be small. Why? Because small businesses are funded primarily through debt, either from banks, friends and family, or credit cards! The new businesses funded by the owners cash are actually rather rare.

Well, I'm now so far off the original topic that I need a review. Here goes.

The lawmakers screaming the loudest about the expiration of the Bush tax cuts voted for that expiration.
Tax cuts do not spur job creation.
Companies having mountains of cash will not just create jobs as a way to spend that cash.
Jobs will be created to fill the need for growing demand.
No demand means no new jobs.

Increased taxes will not stifle investment in new or expanding companies.

I think that just about sums things up. Enjoy the first day of Fall, ya'll.

TAX CUTS

2010-09-17T11:51:00.000-04:00

I've been having a very enjoyable email discussion with a dear friend and one of the topics was tax cuts as the savior of our economy. I was going to write a post dealing with that issue, but yet again, it's been done, and done better than I could have done, by none other than Bruce Bartlett. So, rather than repeating what he said, here's the link to: Bush Tax Cuts Had Little Positive Impact on Economy.

Here's a sample. I urge my conservative/tax cuts always good readers to check this out.

The truth is that there is virtually no evidence in support of the Bush tax cuts as an economic elixir. To the extent that they had any positive effect on growth, it was very, very modest. Their main effect was simply to reduce the government’s revenue, thereby increasing the budget deficit, which all Republicans claim to abhor.

THE DEMS HAVE BEEN SNOOKERED

2010-09-14T15:45:00.000-04:00

We are soon to witness one of the greatest con-jobs ever played out in our countries history. It goes like this.

Since his election President Obama has been called by Republicans and the right wing, among other things, a failure at every single thing he, or the Democratic Congress, has proposed or passed. Every single thing. This is so even though some of what is being criticized was passed under President Bush (the bank bailout) or has been shown, by experts outside of government, to have worked (the stimulus).

Now, I've talked about the fact that President Obama's name has been linked to the word "Failure" many more times in 18 months than President Bush in 8 years, here. I still think that this is a deliberate effort to, at least in the minds of the voters, make this President out to be a failure well before even his first term ends. The Republicans, of course, hope that by this effort there will not be a second term.

That's all well and good for the politics, but what of the actual health of the country? As I said above, the fail at everything trope just doesn't stand up to reality. Of course, lets not forget that the right wing in our country believes that they can make their own reality. And that's just what I'm afraid of.

In their campaign to discredit the Democrats at every turn, the right convinces more and more people that the policies of the administration are failures when, in fact, much of what has been done, like the stimulus bill, hasn't had an effect ... yet! The stimulus was designed to provide monies for various goals and projects over a longer time period than just a year and a half. But, with the voting public having the attention span of a gerbil, that year and a half is well past what most people either can, or want to, pay attention to. So, fail, fail fail is what we hear.

But, is it possible that all this failure talk could actually cause failure, rather than just report it? Are we in the grip of a self fulfilling prophesy? Lets look at some, you know, facts.

Fact, unemployment remains in the 9.5% range with millions of Americans out of work.
Fact, manufacturing and construction are at an all time low point since the end of the Great Depression.
Fact, housing values have declined by 25 to 30 percent and are still going down.

Any sane observer could reach the conclusion that the economy is still in a bad place. Thus, Obama = failure.

But there are other facts that need to be accounted for. For example, in an article in the September 6 issue of Time magazine we learn that, in the second quarter of 2010 alone, Apple sold 3 million of its new iPad devices and 8 million iPhones. The iPhone sales were 60% higher than the year before. I don't know about anyone else, but I don't put iPhones and iPads on my list of necessities like food and medical care. These, and many other so called luxury items, are selling well, filling corporate coffers and making some folks a whole lot of money. That doesn't sound like a failing economy to me.

But, I have gotten well off topic here. The snookering being done to the Democrats, and to the country, is simply this:
By the time of this November's election we will have heard 21 months of failure talk. I think that it is having a depressing effect on the country. Not the presumed failures, mind you, but the talk of failure. This has slowed recovery far more than deficits or bailouts ever could. But the Republicans are anything but stupid. They know full well that the actions of the administration will take time to work. So here's the old rope-a-dope.

The Republicans will take over the House and maybe the Senate. They won't, however, be able to actually do anything with these majorities, either due to Senate rules or the Presidential veto. But low and behold, things will start to get better. The back loaded parts of the stimulus will begin to have an effect on employment and credit markets will begin to loosen, at least a little. And, I imagine, the Republicans and their various talking heads (I'm looking at you Fox News) will declare for all to hear that they, the GOP, has stepped in to save the day!

So, there you have it. Two years of finger pointing at the Democrats followed by two years of taking credit for what the Democrats actually did resulting in, may heaven help us, President Palin. Poor President Obama. Snookered, pure and simple.

THE GROUND ZERO MOSQUE

2010-08-27T11:30:00.000-04:00

I'm fully aware that the Muslim Community Center proposed for Lower Manhattan isn't really an issue that folks outside of NYC (or DC) care all that much about. Therefor, I won't take too much of your time.

Did anyone else wonder why there have not been more court challenges to this project. Since zoning laws and such can be used to encourage or block just about any project it seemed strange to me that the opponents of this project had resorted to: " It may be their right, but it's just not right," type arguments. So I did a little research.

It turns out that in 2000 the then Republican Congress, at the urging of evangelical Christian groups, passed a bill, signed into law by President Clinton, to protect churches from being zoned out of neighborhoods. It's called The Religious Land Use and Institutionalized Persons Act. The law is explained here.

So you see, those opposed can't win in court because of a law that they, themselves, championed. Ain't Karma great!

WE'RE DOOMED - FEDERAL WORKERS ARE OVERPAID!

2010-08-12T12:15:00.000-04:00

I make no bones about the fact that I'm old, but I'm not so old that I can't remember when one of the reasons given for the inefficiencies of the Federal Government was that the private sector could pay more and thus took all of the better applicants. This was brought to mind by an article in Tuesday's USA Today.

The front page piece, entitled: Federal pay tops private workers, lays out data showing that, since 2000,

Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

That is not a small difference, and, as would be expected, caused a political response. In the same article Rep. Eric Cantor, R-Va., expresses the GOP's position this way:

Americans are fed up with public employee pay scales far exceeding that in the private sector.

So I guess that's it then. We can't be paying out good taxpayer money to pay government employees when we could get a much better deal by using the private sector for more and more government services. Spending cut! Deficit defeated! Let's all go home and have a cookout.

Now, there are two points one can make of all this. One, which I will only mention in passing, is that this huge increase in Federal pay happened under a Republican President and Congress. Just sayin'.

The point that bothers me, though, is the assumption that it's Federal pay that is too high. Could it be that private sector pay is too low?

We know that over the past two decades more and more private sector jobs in the U.S.A. have been off-shored and out-sourced to workers in other countries. This depressed payrolls throughout the private sector. Lets look at a graph.

What this shows, very clearly, is that as household incomes for the top 1% went up dramatically in that time period, the same could not be said for the rest of us. Household income for the middle 60% and bottom 20% have been almost flat. Other more recent data indicate that in some of the middle class household incomes are in decline, down 2 to 3 percent in the last two years.

As usual, let's review. The Federal Government, which for years was considered the employer last on anyone's list of top jobs, now offers better pay and benefit packages than the private sector that has been shedding jobs to other countries, cutting back on staffs and doing more and more with fewer and fewer people each year. A private sector that thinks nothing of a corporation going bankrupt in order to shed so called legacy costs, those pesky union contracts with health benefits and pension plans. A private sector that hires undocumented workers to avoid high wages and payroll taxes. And let's not forget, a private sector that invented the "Golden Parachute" that sends executives with horrible track records off into the sunset with plenty of cash and stock to ease their suffering.

And the GOP and conservatives think that Federal workers are paid too much? You've got to be kidding!

I GUESS WE'RE ALL STUPID

2010-07-28T15:10:00.000-04:00

As I was surfing some news sites the other day I was struck by the use of the word Fail used regarding something that President Obama had done. Okay, I guess it's alright for a blogger on the Republican side to express such a thought, but then those old alarm bells started to go off in my head.

I'd been hearing that same thought, in fact the same use of words, for some time now and then I remembered that Republican lawmaker who said that the GOP should work to ensure Obama's failure on health care reform. That the issue would become Obama's Waterloo. And then I did a little Google search.

Search for Obama+fail and Google will return 20,600,000 hits. With no point of comparison I had no way of knowing if that was a lot of hits for the terms, or an average number, or what. So I did another search, this time for Bush+fail. That returned 16,100,000! I was a bit shocked. what was going on here.

I mean, let's get serious. Obama has been in office 18 months and 9 days, as of today. George W. Bush was in office for 8 years. To what do we owe the difference. Now I'm sure that my right leaning readers will be happy to point out that there are more Obama+fail entries because President Obama is such a failure at his job. They'll probably go on and on about how he's screwed up this and muddled that and we should all just watch because it's going to get worse in the next two years. I guess that's one way of looking at it.

Of course, those of us with functioning memories will, maybe, remember WMD and "Mission Accomplished." We might think about all of the other ways that President Bush let us down and wonder how he, Bush, could have a better Google showing than Obama. We might think that the fix is in.

Let me tell you a story. Out local morning newspaper is a bit conservative in their op/ed department. Okay, more than a bit. They publish a column by a right wing writer who's initials are (I'm not kidding) B.S. In the last 18 months he's written two pieces that stick in my head, both for the same reason. I'll explain in a moment. Anyway, the first of the memorable columns appeared 3 days after the first reports about the Swine Flu. The writer's main, and only, point of the column was that Obama was a complete failure in his handling of the Swine Flu pandemic crisis. After only 3 days? And you have to assume that he submitted it at least a day earlier. So President Obama completely failed in his actions regarding this potential health crisis in just two days.

The other column I remember was just a month or so ago, wherein the question was asked, "Is Obama The Worst President Ever?" In order to answer that question the columnist, of course had to compare President Obama to some horrid past Presidents. Want to guess who he didn't pick? We saw some obscure comparison to Andrew Johnson and an equally lame comparison to James Buchanan. But even after a rereading I could not find the name of George W. Bush!

So, let's review. We know that there are columnists on the right who don't hesitate to call President Obama a failure, even when they can't possibly have any data to back up their assertion. Listen and read for yourselves. We also know that in a mere 18 months Obama has been linked to the word fail more than 4 million times more than the guy who came before him. I'm going to offer a theory here.

I think that the Republicans and the conservatives in our great country have all but agreed that, just as they never let any hint of disappointment or concern for the actions and policies of George W. Bush enter into their collective writings, they will never admit any successes by the current President. They want the President of the United States to fail, miserably, at his job and they will call him, and everything he does or offers, a failure. And they will do so without need of any facts what-so-ever.

Guys, this scares the crap out of me. I thought the right wing was all about motherhood, apple pie, Chevrolet and American Exceptionalism. How, I wonder, do they reconcile that with their complete and total disrespect for our President?

NOTE: I have not, nor will I, name the columnist: B.S. I don't want to drive any traffic his way. Ask me nice by email and I'll spill the beans.

IT'S JUST NOT TRUE

2010-07-20T15:15:00.003-04:00

In our completely connected, 24/7 news, internet world I'm finding it harder and harder to come up with original ideas for blog posts. It's not that I'm suffering from writer's block or that that the news each day doesn't lend itself to stuttering rants. It's just that as soon as I get the idea for a post the same idea starts to magically pop up all over the web. Case in point:

A table in last Thursday's USA Today (from Moody's Analytics) showed clearly how much a Federal dollar injected into the economy returns in economic growth. Here's a scan of the table.

Now, as anyone who can, you know, read can see, spending Federal dollars into the economy at the bottom by way of extending unemployment benefits or an increase in food stamps or even our old favorite, increased infrastructure spending (can you say "shovel ready") will do more for the economy than ANY of the tax cut types presented in the table. The comparison with permanent tax cuts is particularly informative.

So why does it matter, you ask? Because our learned political leaders from the GOP are once again (or still) going on about how tax cuts are always better for the economy. They also always make the point that tax cuts increase tax revenues. No, I'm not making that part up. Conservatives have for some years now relied upon something called the Laffer Curve to justify never raising, and always lowering, taxes. Click the link for a definition. The basic idea is that at a certain economic point an increase in tax rates will cause changes in economic behavior such that tax revenues will actually go down. Of course, the curve has two sides. The believers in this fairy tale never seem to look at the side that says an increase in tax rates will result in an increase in revenue. They just get up on their hind legs and go on about taxes taking away our liberty and the conversation tends to end.

Well, I was going to go into chapter and verse on this issue when a posting by former Bush administration member Bruce Bartlett stopped me cold. He got there first. This post is worth a read. It lays out the thoughts of some GOP and conservative economists who call the Laffer Curve assertions the A-1 prime BS that it is.

So the question we must ask is, what can we do about politicians who spout off about ideas that just are not true? Throw all of the bums out? The trouble is, some of the new bums believe this crap too. And don't get me started on the press!

Note: I would really love to hear from my conservative readers on the Laffer Curve issue. A good conversation is never a bad thing.

IT'S CALLED LEVERAGE

2010-07-12T11:58:00.002-04:00

Well, they're at it again. Some opinion pieces over the weekend pointed fingers at the financial reform bill(s) making their way through Congress and in particular at the fact that nothing is done therein to address how Freddie Mac and Fannie Mae "pushed" banks and other lenders into unsafe lending practices. The next sentence will invariably be something about all those greedy home buyers who bought homes and took out mortgages that they couldn't hope to pay. I've already addressed this here where I lay out why the "bad borrowers" idea is just so much BS so I will try not to repeat too much. But there is another way to look at the borrower part of the equation.

In the big wide, wonderful world of finance there is a little something called Leverage. A business with, say, $20,000 in cash puts that money down towards the purchase of a $100,000 asset. The business has leveraged their position by using a small amount of money to get a much larger effect. If the business used only $5,000 for the same loan, they would just be more leveraged in their position. That's what businesses do.

When you or I use the exact same idea in the purchase of a home though, it's now viewed as a bad thing. During the inflation of the real estate bubble that is exactly what borrowers were allowed to do; use small or 0% down payments to be able to borrow the moneys needed to buy a home. They used leverage. And, once again, no, these folks did not know that the price was too high, or that the market would implode, or that they'd be laid off in a year. These people, in the main, thought that they would continue to make a sound income and that their income would increase over time. It's called the American Dream, remember. No one entered into a mortgage that they knew they couldn't afford.

So the next time someone tells you that's it's all the fault of the greedy people who bought more house than they could afford, just look em in the eye and say, "yep, pretty good use of financial leverage wasn't it!" It'll just be so much fun to watch their heads explode when they try and explain around that little fact.

SHOULD WE BE AFRAID?

2010-07-06T12:36:00.000-04:00

Well, the corn and burgers and hotdogs have been eaten, the fireworks have boomed, and now it's time to get back to worrying about the future. Normally I would now be thinking more about golf tournaments coming up on TV or what additional debris the huge sycamore tree in front of the house will deposit on my lawn this month. But things like celebrating freedom and liberty starts to make you think. So thinking I've been doing.

I've been thinking about the future, and in particular about 2012. Not about the coming presidential election (at least not at first) but about the Mayan calendar and the predictions of the end of the world coming on December 21, 2012. Now, I have to make a confession. I tend to watch a fair amount of science based TV. Discovery Channel, Science Channel, History Channel and National Geographic offer many interesting shows during the summer and other repeat seasons, so I've seen a pretty good cross section over the past few months. If I didn't know any better, and I do, you would think that our lovely blue planet is primed and ready to end, maybe in just a couple of years

I've seen giant rocks from space and mega-volcanoes take us out. Nuclear winter or out of control global warming (see Venus) might be the end of us. Global pandemic sounds like fun, as does sea level rise of a couple hundred feet. And there are plenty more. So, at least for people who watch science TV, things look pretty bad. But, what about the general public, you ask? Well, there was that little movie (2012) and some other movies (The Day After Tomorrow, for example) so clearly the idea has entered the general public's radar view. Of course, look on the internet and there's lots of talk and opinions.

So, I think we can agree that a lot of people are aware that there are predictions of the end of the world in 2012. Now, just to be clear, I personally don't put any stock at all in such predictions. But I do see another concern for this country in 2012; the presidential election intersecting a growing, militant segment of our society and the belief by some, which could grow to many, that bad stuff is going to happen in the near future. Say in December of 2012. The latter part of that statement is based upon the theory of the self fulfilling prophecy. If enough people believe something awful is going to happen, they might act in a way that creates something awful.

Let's say that a lot of people believe the 2012 prophecy and they start partying like the end of the world is around the corner. Selling their homes and cars and other goods and booking trips they always wanted to take. Or quitting jobs and pulling kids out of school to hide in a bunker. Or looting and rioting likes its the end of time. Each of these could bring on some of the very bad things that people fear. Add in a volcano or earthquake and things could get very dicey. But I did mention the election, didn't I.

The tea party movement, the militia movements, the gun rights folks and the sovereign citizen movement are all recruiting and spreading. The huge increase in gun purchases after President Obama's election fits into this concern. So what is it I'm worried about?

My worry is that, as the 2012/end of the world talk builds during that year, and as the already heated political atmosphere gets worse (that's hard to believe) leading up to the election, we could see some very awful things happening. My real fear is that an Obama reelection will set off the militant groups and the tea parties and they will act to "take their country back," as they keep saying on signs and bumper stickers. I worry about an actual attempt at insurrection or a coup attempt. If the world is ending anyway, what's the difference and if it doesn't end, well then they will be sure that they saved the country from a horrible fate. Either way, it sets up a very dangerous time for all of us. Bring on the giant rock from space and cue the mega-volcano!

SOME RAMDOM THOUGHTS

2010-06-30T16:03:00.000-04:00

There's so much going on in the world right now that it's difficult for me to land on a single topic. This could be a result of undiagnosed ADD or just that I'm busy and never seem to have the time to research and write a long post. Whatever. Here are some points to ponder. Some may get the full treatment later. Or not.

Does it bother anyone else that today's conservatives and the tea party bunch seem to hold the following ideas simultaneously:
1.The United States of America is the greatest nation now or ever on the face of the Earth and we are, in a word, Exceptional!
2. We are a government of the people and by the people. The people are the government and that government must remain subservient to the will of the people. And,
3. The U.S. government can't do anything right!

So, lets review: we're incredibly exceptional, but we can't do anything right!?

Along that same road: did you ever notice that the "government is the problem" crowd never fixes it when they are in power? They just seem to screw things up even more, get defeated at the polls, then grouse about the other side's attempts to expand government in order to fix, or at least address, the problems that they created until they throw those bums out and start over. Lather, rinse, repeat.

I, for one, am sick and tired of news talkers who act as if what they are reading is a complete surprise to them, and by extension, to their audience, even when it's something very common. For example, I remember a news story about a study that showed that a substantial number of adults, not just college kids, binge drink. The news reader was shocked, shocked I say, to discover this incredible nugget of new knowledge. Ya, like he or she never went to a wedding. Or a family reunion. Or never had an Uncle Harry or neighbor Don who drank a six-pack of beer every night, except weekends when he'd drink a case. The news readers have never seen this behavior before? If these folks are that far removed from real life, why do we listen to them at all? And don't even get me started on the breathless "Team Coverage" we get every time there's a thunderstorm. "Rain pounds the Valley...film at 11!" Spare me, please.

The real harm of the $700 billion Bush/Paulson financial bailout is that we the taxpayers replaced the banks "vapor wealth", that is, the gigantic sums that were bet on complex and convoluted derivative products by those high finance guys, with our "real" money.
Let me explain. All of the trading back and forth of derivatives and credit default swaps really just amounted to ledger entries. Stuff was put on the books at such and such a value. And the values kept getting higher. It's just like in the savings and loan crises of the 1980s. Then, real estate moguls were buying up commercial property, financed by friendly S & L loan officers, and then selling it to other moguls for more money, also financed by S & L loans. The value of the property didn't actually increase, it just looked that way on the books. Swap that property back and forth a few times and you've got property worth a whole lot of money. At least on the books. At some point a "real" appraisal will show that the prices have been inflated and that's what happened when that bubble burst.
Jump to 2008 and you see the same thing only this time with derivatives. But this time, thanks to George W. Bush and Hank (the sky is falling) Paulson we, the taxpayers, bought this junk with real money and at the inflated value. So the taxpayers paid actual money for what was really only bookkeeping entries. Vapor wealth!

If you listen (in small doses for safeties sake) to the tea party folks you'll begin to notice a theme. It's the same theme that runs through the GOP of today. They're always right! They convey opinions and spout positions, but underlying it is the absolute certainty that they, and their opinions, are now, and have always been, the correct ones. No doubt. No hesitation. No small hint of hoping that they have gotten it right. They know they have.
I see this as having a firm connection to the fact that this group is, in the main, not just Christians, but evangelical Christians. Since they know that everything they believe is, well, true. it's very easy for them to carry that same belief structure into the realm of politics and governance. The only problem for the rest of us is the same problem one has trying to argue about religion. You can't get anywhere. They know they're right and you're wrong so there really isn't anything to discuss. I think this is why we are unable to find any common ground. This assumption of rightness overpowers any argument one chooses to make. And, by extension, anyone else with the same position must also be right so it becomes very easy to listen to the ranting of the birthers and Rush and Beck and the like. "They're just like me, so they must be right," becomes the the glue that sticks this bunch together.

You may now return to your regularly scheduled web surfing. Thanks for stopping by.

WE CAN'T REGULATE, OR TAX, ANY BUSINESS, EVER!

2010-06-18T14:05:00.000-04:00

The following appeared in yesterday's USA Today. The issue being discussed is the regulation of credit card companies charging vendors "Swipe Fees" for each use of a credit card in their establishment. The writer is Edward L.Yingling who is president and CEO of the American Bankers Association. He's against such regulation.

The amendment would have a dramatic impact on things that many of us take for granted. For example, interchange revenue allows banks to offer basic banking services at little or no charge, particularly to low-income customers. An erosion of this revenue stream would lead to cuts in these important services. States increasingly distribute benefits, such as child support and unemployment, using prepaid debit card programs. Officials from at least 15 states have publicly expressed opposition to the amendment because it would undermine these programs and increase taxpayer costs.

So let's see now. We shouldn't regulate credit card companies because it will hurt poor people! And by extension, any tax, fee or other obligation (like cleaning up the Gulf, BP) would also effect poor people since the corporations will just pass the cost down to their customers. How do we know that? Simple. An American corporation's only duty, it seems, is to enrich its stockholders.

This particular argument against regulation or tax increases works for the political right in this country because, 1. Nobody likes higher prices and 2. The American electorate has the attention span of a puppy. Thus, even after all of the many bad things done to us by corporate negligence and greed, we'd rather blame the government for interfering with that corporations god given right to make all of the obscene profits it can than maybe ask the nice CEO man to, you know, not poison us all in the process.

Think about it for a second. It works for everything. Cap and Trade to help move us away from our oil dependence? That will just increase costs to polluters and they'll just pass that along to the consumer. Electric bills gone wild! Regulate deep water oil production? Nope, that just leads to higher gasoline prices. Poor people won't be able to heat their homes, oh my! But were does it stop?

The Queen of the Frontier and I have owned some restaurants in our day and we can attest to the fact that health inspections cost, both in lost time during, but also in time and money keeping the place clean and the refrigeration equipment working. If the city had decided to double the number of health inspections to help fight food born illness, I guess we would have had to raise prices. Oh no, those low income types that came into the restaurant won't be able to afford a burger. No more health inspections!

And we all know how expensive medical equipment is these days. We sure don't want to make those companies go through inspections and regulation. They'll raise their prices and small town hospitals won't be able to afford that new Whatever Scanner they need and poor people won't get their whatevers scanned and they might DIE! Hey, this is fun.

But if it works for new taxes or regulations it must also work on current taxes and regulations. If we just didn't tax or regulate businesses at all, they could lower their prices and help poor people. That's it. What a concept. I've figured out the real goal of conservatives and the tea party folks. They want to help the poor by making products cheaper for corporations to make and sell. What a truly noble goal. And if you believe that, I've got some Gulf front property I can let you have cheap.

YOU BETCHA'

2010-06-07T12:34:00.000-04:00

In the background of the current disaster filled news and opinions there is still ranting on the part of certain voices on the conservative side about the War on Terror. Actually, the opinion pieces I've seen are not about the W.O.T., they're about how much of a failure President Obama is. They run the usual list of presidential failures, including his apologizing for America's past actions, bowing to foreign leaders, not treating attempted terror attacks as acts of war and so on. It's that last one that bothers me.

The drum beat to treat every act of terrorism, or attempted terrorism, as an act of war carries with it certain baggage which the right wing pundits just seem to ignore. Like, what constitutes a terrorist act? Or more precisely, is it an act of terror if it's done, or attempted, by a non-Muslim actor? You know, like shooting an abortion doctor in his church. Or, is it an act of war, rather than a criminal act, if done by an American citizen? The Times Square car bomb attempt fits this category. See how this might get sticky?

The right wing seems to just assume that any action, taken by a Muslim, against American interests, is a terrorist act of war. Simple and straight forward. But here in the world of reality it's not so simple.

There are all those Miranda Warning problems. We can't stop interrogating some Muslim guy even if he is a citizen, so let's strip him of his citizenship! That is, in fact, what Senator Lieberman suggested. We just strip suspected terrorists citizens of their U.S. citizenship and we can then ignore all the rules.

Of course, once we have these bad guys, we sure don't want to house them in the good old U.S.A. No sir, just because we've got more than 300 convicted terrorist prisoners in our prisons now, we sure can't keep these new bad actors here. Now, does it ever bother these folks (the right wing pundits, not the terrorists) that they appear scared stiff of guys who can't even make a bomb go boom.

But the big issue to be is the whole war versus crime comparison. The right, and in particular the so called Neocon right is, and has been, utterly wedded to the War on Terror way of looking at this. They backed (and pushed) the wars in Iraq and Afghanistan so they're sort of stuck with that solution. Even though, as had been much reported after the Christmas crotch bomber's failed attempt, the Bush administration had used the Federal Courts to prosecute guys like the shoe bomber. The Neocons just ignore that. Their position is that it's always an act of war because, well, we're at war.

Now, can we stop for a minute and explode that thought. Writers far smarter than I have explained, slowly and carefully, in words of only one or two syllables, that the "War on Terror" is an empty concept involving as it does the declaration of war against a tactic. May I be blunt? It's stupid! It's stupid because it assumes (wrongly) that the U.S.A. has a right to enter any country, at any time, to kill or capture anyone who we deem to be a threat to us. It's stupid because it ignores the basic human values of protecting family and tribe if the ones doing the protecting are not of our particular tribe. It's stupid because it completely ignores the fact that for every civilian death in Iraq or Afghanistan we create more people who hate us and want harm to come to us. And it's stupid because the current crop of attempts were made by a guy from Pakistan and a guy from Yemin and we aren't at war with either of them (yet).

So, if I may paraphrase that great American thinker, Sarah Palin, when it comes to protecting the homeland from the threat of terror my dear Neocons, how's that War on Terror thing workin' out for ya?

MAYBE WE SHOULD LOOK BACK

2010-05-17T16:11:00.000-04:00

As the news stories keep piling up, I continue to wait for the Main Stream Media to point out what I think is obvious; the Bush administration will haunt us for years to come.

Let's look at some of the more glaring examples.

A deep water oil drilling rig blows up, kills 11 workers, sinks and starts spewing oil and gas into the Gulf. And then we find out that the Federal Regulators performed fewer and fewer inspections each year as the Bush administration was in office.

A coal mine blows up right here in Wild and Wonderful West Virginia. 29 miners die and we find out that the Federal Regulators, under the Bush administration, did inspections without follow-up and fined the mine operators pennies on the dollar.

As the entire financial system teetered on the edge of a complete meltdown in September of 2008, the Bush administration presented to Congress the infamous TARP bailout. Only now do we discover that it was the Federal Regulators in the Bush administration who dropped the ball and never saw the meltdown coming. Oh ya, and they surfed porn at work while Wall Street burned. Very Roman of them.

I could go on. Katrina and FEMA. Madoff and the SEC. There not only seems to be a pattern here, there's a damn pattern here! The administration of the 43rd President should, and I hope will, go down in history as raising incompetence to a new high. Why did this happen?

The conservatives and neocons who came into power on January 20, 2001, were, I believe, dedicated to the Ronald Reagan pronouncement, "Government is the problem." Because of that belief, they under funded important regulatory agencies. They made a point of hiring not from the Ivy League but from the likes of Liberty U. and Patrick Henry College. Being a crony of someone in or near the administration was more important than ability and loyalty was more important that talent. The general feeling, I think, was that either the agencies in question weren't all that important to what the Bushies wanted to do or that an incompetent agency was easier to eliminate or curtail. Government is the problem, remember. And looking back to the Bush years we see that, son of a gun, they're right!

Obama says that he wants to look forward. All right, he and his administration can look forward, but I, for one, will continue to look back to the rolling mess that will spawn problems for years and decades to come.

Let's see, torture, gutting the constitution, misrepresenting us into war, unfunded drug benefit.....

IT'S REALLY NOT OUR FAULT

2010-04-26T15:07:00.001-04:00

Well it seems as if this weeks political theater will revolve around the financial industry and the causes of the Great Recession. We will once again be told that the real estate bubble bursting caused the entire house of cards of high finance to come tumbling down. We'll hear about how Goldman Sachs played fast and loose with the facts of their offerings. We'll hear how the SEC regulators spent more time surfing for porn than they spent, well, regulating. But never fear, we will also hear how part (or some, or most) of the blame must go to people who bought houses that they just couldn't afford. To which I say; BS!

The image of poor people running into banks and mortgage brokerage firms pleading for a 100% Jumbo loan to buy a half million dollar McMansion fits just fine with the personal responsibility crowd on the right. They can just see the hidden camera video, produced by the dude who "exposed" ACORN, no doubt, showing a phony poor couple getting a huge loan with a wink and a nod and no job or income to speak of. The problem with this idea is that people really don't act like that.

Look, the Queen of the Frontier and I owned a real estate firm for a while during the late bubble and after it burst so I know what I'm talking about here. The vast majority of real estate transactions involve at least one real estate professional. If you're trying to sell a home which you have listed you don't want to take deadbeats in to see the home. It's a huge waste of time. And time, as we know, is money. In fact, the process of "qualifying" a buyer is part of the training for your license. There are formula for determining whether or not the buyers can afford the house they want to look at. But, of course, the question of what a client can or cannot afford changes when bankers and mortgage brokers solicit real estate agents to bring them borrowers for a new and improved "Mortgage Product."

Because, really. If a banker tells you, as a person who makes a living by earning commissions, that people who meet conditions X, Y and Z can get a huge loan are you not going to direct potential buyers to that bank? And if X, Y and Z don't involve 24 months of pay stubs and a hefty down payment, should you worry that, gee these folks might not be able to keep up their payments? No, what you do is send the clients to the lender and then when they come back and say that they can, in fact, borrow what they need to buy the house you write up the papers and think about spending your commission.

Because, here in the real world, the vast majority of people don't know if they can afford a home or not. They count on certain professionals (bankers) to tell them how much they can afford to borrow. They count on other professionals (appraisers) to tell them how much the house they want to buy, or refinance, is worth. They count on still others (real estate brokers) to put the deal together and they count on lawyers and insurance agents to make things proper. When all of those professionals directly, and indirectly, tell you that yes, you can buy a home, most folks will not then sit down at the closing table and say, "Oh gosh, I don't think I will be able to afford the payments in three years when the interest rate adjusts."

So at the individual level I can see how most buyers, or people who refinanced, didn't have a clue of the problems ahead. But if we look at the bigger picture I think it becomes crystal clear that it wasn't borrowers who caused the crash at all. You don't hear about borrowers being charged with fraud for lying on an loan application but we sure have heard about fraud done by lenders. That to me is the best argument for not blaming borrowers.

Predatory lending was a fact in the real estate bubble. Mortgage brokers, bankers, appraisers and lawyers were all involved. The biggest houses of finance in the world created money by the truckload to pay for it all and we are now discovering that it was all based on the simple lie that real estate prices never go down.

Please don't blame the mess on the little guys. If your banker told you that you were golden for a loan, would you argue with him? Would you really? I didn't think so.

THIS IS NOT A GOOD THING, PART 2

2010-04-23T11:00:00.001-04:00

After rereading part 1, and fixing the typo, I realized that I hadn't finished the thoughts started in that post.

Clearly, I could go on for pages with examples, like the Tea Party claims that Obama has "plans" for stripping us of our freedoms. Or any and all of the claims of the "birthers". Or the "truthers". But, of course, maybe I'm the one fibbing about those guys. In the end, that's the whole point.

So long as our press and media continue to frame all issues as having (at least) two opposing positions, and that those positions, regardless of merit, are equally valid and possibly correct, we will be faced with this type of horse race journalism at every turn. Just check out the Sunday talk show circuit. In this corner we have Dem. (Senator, Congressman, Adviser, Author) versus a GOP somebody, who will be asked softball questions about issues of the day. We'll hear Dem. talking points countered by GOP talking points and, of course, the reverse. This will happen sometimes four or five times and hour regardless of the importance, or lack of importance, of the topic. War good! War bad! Torture good! Torture bad! And on and on it goes.

Here's a thought. How about bringing actual experts on to explain the issues? Of course, then the other channels would find their own experts to counter the first experts and away we'll go again. That is the true harm we face. With no trusted voices we will grow more and more apart, sorting ourselves to an ever greater degree into us and them. This is called Tribalism and we certainly can see one long term result of that type of social separation; can you say Middle East.

Am I being too alarmist here? Maybe, but unlike certain groups on the conservative side of the argument, I don't see our society as being immune from the type of tribal disputes that abound in the world. We just think that we're better then that. We're not. Just look at the recent spat that grew around the Governor of Virginia and his declaration of a Confederate History Month without a mention of slavery. Listening to some of the rhetoric you'd have thought that the Civil War was about to start again!

I think that the best course, at least for the individual, is to try not to take sides at all. Unfortunately, when everyone around you is screaming, it's awfully hard to not start screaming too. Oh well. Is it cocktail time yet?

THIS IS NOT A GOOD THING

2010-04-22T15:55:00.002-04:00

We have entered what I am afraid will turn into a very uncomfortable time. We have entered the time of "No Authority." Now, I don't mean by this that the anarchists are at the gate. Only that there appear to be no voices in our society that we can point to as being correct. No one from whom we know we will get the truth.

We have politicians calling other politicians names. We have cable networks putting up false pictures of events and characterizing our leaders as Commies and Nazis (ya, they don't care much for intellectual consistency) while the so called Main Stream Media chases after the latest sex scandal involving either a politician or a sports figure. We have U.S Senators standing up in front of the cameras and just plain lying about what is contained in a bill.

So then we must look to that beacon of moral certainty, the Church. Oops, maybe not the best choice, what with the Pope involved in moving pedophile priests around. And there's always Pat Robertson blaming the latest natural disaster on The Wrath of God! I guess that Pat hasn't seen an earthquake or flood that he can't use. To bad about the people, but they got what they deserved, don't ya know.

If anyone offers an opinion in the public arena these days you can bet that the counter opinion will be tweeted, posted and announced within minutes. Who can we trust? Who?

I WAS WRONG

2010-03-16T16:02:00.000-04:00

In my last post I outlined what I thought was a Medicare mess which I had fallen into. It turns out that I jumped a little to quickly to that conclusion.

In fact, it turns out (and yes I knew this, I just forgot it) that Medicare pays a pre-set amount for reimbursement. In my case the reimbursement for the enteral nutrition that I need is $2.57 per can rather than the $11.88 which the supplier would charge me if Medicare didn't pay. Now that, in and of itself, shocks the conscience. It is even more shocking when you realize that Medicare is willing to pay more than a dollar per can over the retail (on-line) price. But it's certainly not as outrageous as I presented it.

Lesson for the blogger; check your facts. Now back to our regularly scheduled ranting.

HEALTH CARE HORROR SHOW

2010-03-11T15:29:00.001-05:00

I'd like to share with you a tale of horror concerning our very badly broken health care system. First the facts.

As my friends are aware, I had a little dust-up with throat cancer back in 2006. As I have told many people since, cancer is easy to beat, it's cancer treatment that gets you. The radiation therapy that killed the cancer also did a number on my esophagus. I can no longer swallow and have tube fed for three years. That, in concert with some other permanent side effects means that the Social Security Administration deems me to be disabled. That status also means that I became eligible for Medicare before my 65th birthday. The plot thickens.

In going over the mountain of information and literature available about Medicare that one can find on-line I came across an interesting reference. It seems that Medicare will help pay for what's called Enderal Nutrition. What is enderal nutrition? Why it's the formula which yours truly pours through a tube into his stomach four times a day. And that horrible government run health plan called Medicare will help pay for it. This was starting to get interesting.

Now, anyone who knows me well can tell you that I like to be parsimonious. Waste not want not and all that. Back in the day when I was a roofing contractor I took great pride in never ordering more roofing than was needed and then using up every possible piece and scrap to finish the job. So saving some bucks by letting Medicare pay for what I've been paying for for the last three years was pretty appealing. Not that I was spending all that much. I very kind nurse in the hospital where I received the feeding tube told us that you could order the formula they use in the hospital or just use the WalMart version of a nutritional shake. Well that's all it took. We stopped at Wally World on the way home from the procedure for the first cans and that has been my exclusive source for nutrition since.

Now I'm currently paying $6.87 per 6 pack or $27.48 for a case of 24 cans. Doing all the math means that I need $240 worth of "food" a month. $8.00 a day is not bad, but if Medicare picks up 80% that's even better. So off I went down the rabbit hole.

After some more research I discovered that WalMart is not what Medicare accepts as a provider of enteral nutrition. That would have been far too easy. So back to Google I go until I land on a manufacturer's web site. Not only do they have what I need, but they will deliver right to my door. I call. I wait on hold. I play Solitaire and wait some more. Finely, a very nice young lady explains that the brand name product I need will cost $37 per case. I thought, fine, Medicare's going to pay 80% anyway. "No problem," I said, "So how does this get billed to Medicare?" Oops. Seems that they don't do Medicare sales. I would need to find a provider locally. Just a minor setback. Nothing to worry about.

A quick trip to the yellow pages and I found a local medical products company. The very nice lady there told me that once I get an order from my doctor they can get the product and deliver it to my door. I asked how much my share would be, put she couldn't say until it actually came in. Okay, that sounded good, and since I already had an appointment with my doctor, things were moving right along. The doctor visit and a few phone calls and faxes later and my order for six cases of nutritional shake would be on my front porch.

The six cases came today. In the course of signing nine different documents acknowledging receipt of the cases among other things, I came upon the document that said that if my insurance declined or refused to pay that I would be responsible for payment at the rate of $11.88 per can.

Let's see now, $11.88 per can equals $285.12 per case or $1,710.72 per month. And how much would my 20% co-payment be? $342.14. So if I order from the approved provider I can pay $100 more per month for the convenience of having this stuff delivered and Medicare can pay $1,369 for a product that I buy now for $240! This is messed up.

Needless to say, I will not be ordering my nutritional needs from that provider nor will Medicare be helping me pay. My friends on the right (you know who you are) are probably crowing loudly how this proves just how broken the "Government Run Health Care" that we have is and why we should abandon "Obamacare" just as fast as we can. I see a different lesson here.

One of the administration's arguments for the health care plan now before Congress is that it will save $500 billion from Medicare over ten years. The GOP points to this and says, "See, they want to cut Medicare." But clearly, there are huge sums that can be saved if someone just works at it a little. The government will pay over seven times the retail cost of this one product the way the system works now. Is it the GOP's contention then that the greatest nation on the face of the earth, the country that put a man on the Moon, invented the light bulb and the Twinky, can't figure out how to not spend $1,700 for $240 worth of product? I'm just curious.

So that is my tale of horror. Hours of research, hours of phone calls and many games of Solitaire later and I'm right back where I started. Oh well, I got a blog post out of it. Is it time for dinner yet?

WHY ARE WE IN A JOBLESS RECOVERY?

2010-03-09T12:25:00.000-05:00

That question keeps being asked by politicians and pundits alike. Why oh why, in the face of improving stock prices and other leading indicators, are companies not hiring? The political sides are quick to point at each other. The Republicans are sure that the stimulus bill not only didn't create even one job but that pushing $872 billion into the economy actually killed jobs. The Democrats, on the other hand, are sure that jobs are being created and, by the way, most of the money hasn't been spent yet. I think, in a way, that they're both right.

The problem is that most politicians have no small business or small employer experience. The former governors now either in the administration or Congress know how to make executive decisions but really don't have a clue about day to day employment needs. they had department heads for that. The former business folks are mostly big business types, or worse, come from high finance. Again, clueless. So what is it that these smart people are missing?

They actually believe, I think, that all people make monetary decisions rationally and without emotion. That's why they believe in the rightness of markets. Markets will, they tell us, always reach the correct position, if given enough time. Regular people acting emotionally just confuses them.

The current situation stems from this type of misreading of the population. Let's think back to late summer and fall of 2008. The housing market was reaching a complete freeze up. Banks and financial firms were realizing that the huge stack of mortgage backed securities in the vault were, well, worthless. At this point the Bush administration went into panic mode and pushed for and got the $700 billion bank bale out. The idea was that the financial institutions had all these worthless or toxic assets as the backing for loans and other transactions. No assets meant that the system could not continue to function. The argument was that we had to pour money into the top of the financial machine much as one pours oil into the top of an engine to keep it running. This, to my mind, was the first mistake.

The assumption that pouring billions into the top of the financial machine would grease the gears and thus loosen up the works simply ignored basic human nature. The people in charge of these institutions, while probably just fine folks who you'd enjoy talking with at a picnic, are, by their actions before and after the bale out, still the high priests of American greed. They have to be, you see. It's how they define their job. The highest and best thing that they can do is protect and grow the value of their stockholder's holdings. Nothing else, from 10% unemployment to possible bread lines snaking around block, matters to these people. The money just goes in at the top...and stays there. Can you say bonuses? Of course, it can also be said that they didn't really make a mistake, they knew full well that the money wouldn't trickle down. They just didn't care about anything other than their own bottom line.

Then came mistake number two, the stimulus bill. Now, those who only watch FNC or listen to Rush are sure that the only way to stimulate the economy is...wait for it...TAX CUTS. They sort of skip over the fact that the stimulus bill contains $288 billion in tax cuts! You can see the logic, of course. If pouring money into the top was a good idea for the banks then it's a good idea for the general economy. It just, again, flies in the face of human nature.

So, again, why hasn't the economy created more jobs? Here's the simple answer; the whole system is broken and bale outs and stimulus bills can't fix it. We can't hand bankers a bunch of our tax dollars and expect them to immediately start lending that money out. Not while Congress and the press are screaming to the heavens that loose lending started the mess in the first place. We can't expect businesses, both large and small, to just simply start hiring because we give them a tax break. A business owner will look at a tax break as a windfall for them or for the company. They'll start hiring when they need the labor to conduct their business not before. And the consumer, why won't they start spending again? They can't. They don't have the money.

The dirty, and not so secret, fact of our consumer driven economy is that it was driven by debt. When consumers could no longer refinance their home for a cash infusion they stopped buying. When they open their credit card bill and see that the interest rate has gone from 8% to 30% they stop spending. When they see layoff after layoff they fear for their own job and they stop spending. And let's not forget that the cable news channels have multiple "Finance Correspondents" telling us how important it is to start saving. Save for the future. Save for retirement. Save for your kids collage education. Save, save, save. Of course, saving is the opposite of spending so again, the consumer, if only out of confusion, stops spending. And so the circle comes full around.

Banks won't lend, business won't hire and consumers won't buy. That's not all that hard to understand is it? But our leaders and the pundits keep asking, "when will the consumer start spending again" without seeming to understand that simple equation. I think that both the bale out and the stimulus authors assumed that the consumer would just start buying again and all would be well. They were so wrong.

So what's the answer? Well, if another stimulus is planned I hope that it targets the consumer directly, rather than trying to rely on the trickle down of money that tends to stick to the top rather than trickle. Just think, if the bale out had gone (as Jon Stewart on the Daily Show had suggested) to payoff or pay down actual mortgages the banks would have gained solvency at the same time that the consumers would have been able to continue spending.

Or how about if the stimulus funds were pumped right into the economy from the bottom. A trillion dollar stimulus would provide $10,000 to 100,000,000 households. Now how much of that money do you think would have been spent and how much saved? How about in your household? Now think about that money working it's way up in the economy. Each purchase is a taxable transaction. Buy groceries and you pay sales tax and the store pays income tax and pays their workers who pay income tax and buy things with their wages and so on. Pour the money into the top and we see that the opposite happens. Give a million dollar bonus to a billionaire and he will invest it. Is that a bad thing? No, but in a troubled economy that does next to nothing to help. No taxable transactions. In fact the guiding principle of the rich is to avoid taxes. They put the money in "safe" investments and hold it.

But we all know that the first idea is never going to happen, so what can be done? I think that local banks and local businesses are going to have to increase their lending and borrowing risks. Sorry, but somebody has to take the first step and I can't see it being the consumers. I'm afraid that our salvation my have to come from a change in the priorities of the banks and bankers. They're going to have to look farther ahead than the next quarters financial report. They are going to have to become good citizens rather than just good business people. Don't hold your breath.

SO WHERE'S MY FLYING CAR?

2010-02-01T15:34:00.000-05:00

It now seems fairly obvious where Steve Jobs and the geeks at Apple get their ideas. They watch a lot of Star Trek!

The just released iPad tablet/touchscreen device bears an uncanny resemblance to devices in use by Star Fleet since the 60s. And what was this marvelous piece of starship equipment called? The Personal Access Display Device was referred to on the show as the P.A.D.D. No joke, go look for yourself.

HERE'S A CRAZY IDEA

2010-01-19T12:02:00.000-05:00

Here's a crazy idea to help the people of Haiti recover from the earthquake disaster. With the world in an economic slump right now there are thousands of unused cargo containers sitting idle in freight yards. How about shipping bunches of these 40 foot steel boxes to the quake area ASAP? It seems to me that this can be pretty much a win, win, win situation.

First, the containers can be set up on piles of compacted rubble. The huge cleanup necessary as part of the recovery will create a lot of crushed concrete rubble.

Second, a simple cutting torch can be used to cut window and other openings with ease. Since the containers are built with all of there strength at the corners the walls can be cut anywhere without fear of collapse.

Third, they can be stacked and cantilevered like giant Lego blocks. This allows for more practical configurations and larger structures.
They can also, later, be converted to permanent use. Here's a company that's doing that now. There are many others. Such long term use would give the Haitian people strong steel buildings which would be both earthquake and hurricane resistant.

Forth, when the world economy starts to recover, any shortage of cargo containers would drive a need for steel and the manufacture of new containers would result in increased employment in that and related industries.

Finely, lets not forget that they are "shipping" containers. Fill them with aid goods, put them on container ships, and get them to the people quickly.

Let's pass this one around the net. It might help where help is so sorely needed.

FUTURE ROCK DRUMMER

2010-01-07T13:32:00.000-05:00

WELCOME PASSENGERS AND GUESTS

2010-01-06T11:47:00.000-05:00

Given the current security concerns at our airports I think that the FAA and TSA should post the following sign at the entrance to all of this countries airports.

WELCOME PASSENGERS AND GUESTS

PLEASE BE ADVISED THAT BY ENTERING THIS FACILITY YOU AGREE TO WAIVE ANY AND ALL RIGHTS GUARANTEED BY THE UNITED STATES CONSTITUTION.

HAVE A NICE DAY

FOR WHOM THE BELL CURVES

2010-01-05T16:42:00.001-05:00

During the New Years Day debacle called the Gater Bowl (WVU looked bad!) they put on one of those nice "here's why you should come to our school" PSAs. I zoned, since I've been there and done that a long time ago, but one line caught my attention. Something about how anyone could aspire to get a collage education. Oh boy, there goes that alarm again (I really need to have that looked at).

This particular myth seems to me to be a direct result of American egalitarianism. Since Jefferson declared that "All men are created equal," some have thought that the meaning was that all people were equal. In everything and in every way. The problem, of course, is that reality tends to intrude. Let me explain.

One way to compare the traits of any population is to look at a large enough group and measure how each member of the group expresses that particular trait. You can then graph the result to show the distribution of the trait over the population. Your observations will result in a bell shaped curve, with the average, or most seen result, in the middle. Like this.

So, what good does that do us, you ask? Well, if you know how a trait is distributed you can address certain things about that trait. Confusing? Okay, let's try an example.

Say you want to open a shoe store. It would help your bottom line if you could only order the sizes that people are most likely to buy. Well, it seems that shoe size, like pretty much everything else, fits onto a bell curve.

On this chart, your Shaq size 22s are on the right and your jockey size 5s are on the left. It's pretty easy to see that you don't want to order 5 of each size now do you? The number of people looking for the very big, or the very small size shoe, is minuscule when compared to the number who need the "average" sizes. Or lets look at ladies skirts.

Same thing. Your ladies apparel store will need to order way more mediums and larges then XXX large or super petites. It just makes sense.

So why doesn't it make sense when we look at getting a college degree? Because when it comes to the smarts needed to get a degree we fall back on "All men are created equal." We want to believe that the great mass of people are smart, a small group is very smart and another small group are, shall we say, mentally challenged. It even makes sense when you see the IQ bell curve.

See, most of the people occupy the broad middle. What's the problem? The problem is that we have a very poor understanding of what smart means. We can't internalize being different than how we have always been. But what do the numbers say? In fact only about 30% of the US population has a college degree. The other 70% doesn't. Some of the 70%, of course, is in that group through a lack of means or opportunity. But most are not. They are not now, nor will they ever be, smart enough to get a college degree.

Go back up and look at the curve. The 30% line falls right around an IQ of 110. Now, before the yelling begins, I'm fully aware that correlation is not causality. Everybody with an IQ greater than 110 doesn't get a degree and many from the lower group do go on to a college cap and gown. This stuff is only truly valid for large groups. But we keep making public policy as if those percentages were reversed and that, in my opinion, is putting this country at an educational disadvantage.

Our entire educational establishment is geared toward the "Any child can get a college degree" model. It didn't used to be so. Back in the day the schools tended to sift the student body into different groups based upon how smart they were. The "A" group was expected to take college prep type courses and were assumed to be on the higher education tract. The "B" group, the broad middle, were headed for white collar jobs and supervisor positions. And the "C" group learned wood working and auto shop skills and went on to work in the factories and mills and mines. This is the educational model which we abandoned in favor of the modern, everybody gets a blue ribbon, high self esteem model which we now have in place. Of course the old model also gave us the great scientific achievements of the latter half of the Twentieth Century. Things like atomic energy, space flight and solid state electronics. Our modern model has given us Twitter. I'm just sayin'.

So, the next time you're reading the newspaper or watching the news and the actions of your fellow human beings is giving you heartburn, or worse, just look back at the IQ bell curve and repeat after me:

HALF OF ALL THE PEOPLE ARE BELOW AVERAGE!

THE TYLENOL EFFECT

2010-01-04T17:05:00.000-05:00

I just caught the last part of an interview this morning on CNN on the topic of terrorist attacks. Since this fellow seemed knowledgeable, and made sense, I knew he wasn't an American politician so I perked up and started to listen. He was explaining that al Qaeda, bin Laden's outfit, likes to plan attacks bigger and bloodier than their last attack. For them, 9/11 is a hard act to follow. But the bunch that sent the Crotch Bomber tm from Yemen, al Qaeda in the Arabian Peninsula (AQAP) seems to be focusing on smaller operations like the Crotch Bomber tm. That's when the alarm bells started to go off in my head.

I've never really understood why we have placed so much anti-terror emphasis on preventing the big strike. Yes, the idea of another 9/11 type attack is horrible but, as we saw then, huge tragedies can bring us together as a nation. And such an attack can also stiffen our, and our allies, resolve. We can never know what might have happened after 9/11 if someone else had been in the White House, but clearly, for a time we, and the rest of the world were of one voice in our loathing of the terrorist group who brought this down upon us. So maybe big flashy attacks against the American homeland aren't such a good idea, if you're a terrorist. Maybe small, repeated attacks in multiple locations, like AQAP seem to be planning, are better at terrorizing a population.

And that brings us to the Tylenol Effect. In the Fall of 1982, in the Chicago suburbs, 7 people died from Tylenol capsules tainted with cyanide. This was no factory mix-up or contamination, this was premeditated murder. Bottles of capsules had been shoplifted, taken somewhere, tampered with and then placed back on store shelves. No one was ever caught and punished, but a few things did change.

For those of you younger than I (and that's a big bunch of folks, getting bigger every day) I offer a story which, at first, you might not believe. Once upon a time, when you twisted the top off of a jar of peanut butter, you saw....peanut butter. Not a paper seal, actual peanut butter. The same was true for grape jelly. And for bottles of aspirin and, yes, Tylenol. The poke and tear dance that we all do to get into products which we put in our mouths began with the Tylenol poisoning case. Prior to 1982 product tampering was nowhere on the radar. After Tylenol it was everywhere.

Now I know this doesn't sound like such a big thing, but stop and think a minute. Every single processed food or over the counter medicine you buy is in a sealed container. It's Federal Law. The huge sums expended to protect us from this threat are incalculable, but must be in the billions. Entire industries were created to satisfy the need for seals and guards and the adhesives to attach them. New factory machines and production steps needed to be created. This was a really big deal!

So what, then, is the Tylenol Effect? It is the very American response to bad things in the world. We go way overboard. We do everything in our power to see to it that any harm that happens, if caused by bad actors, can never happen again. Why do I add the part about "if caused by bad actors?" Because when it comes to natural disasters we aren't so motivated it seems. Witness the continuing poor response to Hurricane Katrina. Now compare that to our response to 9/11. We will spend just about any sum to try and stop the bad guys. Or bad guy. We will fight to open our sealed products forever because we think that will make us safer.

So what do we think would be this countries response to, say, ten terrorists, each with just three rocket propelled grenades, who each fired those RPGs at so called soft targets on ten consecutive days? Ten days of shopping mall explosions? Or random vehicles exploding on the Interstates? Or power sub-stations blowing up putting thousands into blackouts? What would we do? We'd go absolutely nuts, that's what.

By the eleventh day there would be no one in the malls or on the Interstates. Commerce would lock up at every level. No one would risk their own life and certainly not the lives of their children. Employers wouldn't dare put their workers at risk (lawsuits you know) nor shop keepers their customers (more lawsuits). It would not be pretty. And that's just the commercial effects. What the government would do to try and keep us all safe would make today's airport security seem like a wave from the greeter at Walmart. Can you say martial law?

So I fervently hope that the bad guys continue to equate the USA with Israel. After more that 60 years of terrorist attacks, they still continue to continue. For all of it's failings in it's past and current dealings with the Palestinians, Israel is still a democratic nation that supports human rights and the rule of law. They have not been broken by terrorism. So, perhaps, the bad guys will think that we, too, would overcome the death by a thousands cuts of many small attacks, like the Israelis. Because if they ever figure out that instead we would probably respond with the Tylenol Effect, we could be in a world of hurt.

Just thinking about this has given me a headache. I wonder if I can get into that new bottle of Tylenol?

YUMPIN' YEMENI

2009-12-30T14:18:00.000-05:00

The Christmas day attempted bombing of an airliner by a Nigerian man, supposedly trained and supplied in Yemen, has turned up the volume on the left/right debate on what we should do about terrorists.

In the left corner we have the law enforcement folks. Those who think that the actions of the Crotch Bomber tm, attempting to blow a hole in an airplane as it descended into Detroit, should be dealt with as violations of Federal Laws.

In the right corner we have the War on Terror contingent, most recently represented by former Secretary of Homeland Security, Tom Ridge. On yesterdays Larry King Show on CNN he said this:

“I take a look at this individual who has been charged criminally, does that mean he gets his Miranda warnings? The only information we get is if he volunteers it? He’s not a citizen of this country. He’s a terrorist, and I don’t think he deserves the full range of protections of our criminal justice system embodied in the Constitution of the United States”

In other words, damn the Constitution, full speed ahead into another front in the endless War on Terror. I have a few questions for Mr. Ridge, though.

Just what is it about this fellow, or his actions, which strips him of the Constitutional rights which we freely offer to other legal aliens within our borders? It can't be because he's black, can it? It can't be because he's Nigerian? Is it because he tried to blow up a plane? Well, the Shoe Bomber, Richard Reid, tried to blow up a plane and he was tried and convicted, by the Bush administration, in criminal court just fine. Was it because he had connections with al Qaeda in Yemen? Why should this guy be treated as an Enemy Combatant?

Because that fits within the right's position that all such acts are terrorism and the only way to fight terrorism is as a war. "No ifs, ands or buts about it, we are at war with terrorism and we've got to...."
And that's where the War on Terror bunch starts to change the subject. Even (some) of these chowder heads begin to realize that we can't keep invading every country with any connection to al Qaeda. At least I hope they do.

No, the basic problem here is that those on the right have no faith in the American justice system. Since even before the Miranda decision conservatives stopped trusting that the courts could "get it right" when it came to crime in this country. For that reason conservatives, when they have been in power, lead the charge that has pushed this country to it's position as the prison capital of the world. Justice has become secondary to punishment. So we are expected to see Mr. Ridge's calling this guy a Terrorist as the reason for bypassing the Constitution. Never mind presumption of innocence. Calling him a terrorist puts him into the War on Terror, which is a military and not a criminal justice issue. And anyone, like the President, who disagrees is, well, just use your imagination. I'm sure within the next weeks and months that they'll have lots of names for the President.

But where does it end Mr. Ridge? If all we need do is call someone a Terrorist and puff, all his or her Constitutional rights are forfeit are any of us safe? And would the same apply to Terrorist Sympathizer, or Terrorist Enabler, or Terrorist Leaner? Thought crimes can't be far behind. Of course, they won't be crimes, they'll be acts of war. In the war that can never end.

Here are a couple of links that explore the current situation a little more.

MERRY CHRISTMAS TO ALL

2009-12-24T12:45:00.000-05:00

Here's a little something to add a sense of scale to this hectic holiday time. Enjoy.

MORE THOUGHTS ON CHINA

2009-12-15T15:14:00.000-05:00

The first thing that I think we need to do in order to share the 21st century with China is take a step back from the issue of human rights. Every time we try to overlay trade and economic foreign policy with morality we run smack into the same problem; our understanding of other cultures diminishes in direct proportion to how many layers of ethnocentric moral clap trap we bring to the table. We so want the Chinese to think and act just like us that we act as if they already do. They don't!

As I mentioned in the first China post, they are a culture that takes the long view. Their history and pre-history go back over 5,000 years. China contains almost 20% of Earths people at 1.33 billion (and counting). They've earned the long view of culture. We, on the other hand, lose interest after 15 minutes. We're like a bunch of puppies in a field of butterflys. It is that inherent difference between our cultures that may end up benefiting them and, maybe, harming us.

Take energy. In this moment in time, as we worry about global warming and climategate, we hear that it really doesn't matter what the U.S. does since China is just going to out carbon everybody going forward. They are putting into service one coal fired power plant every week to 10 days. But they are also the world leader in so called clean coal technology. They are building more nuclear power plants than the entire world combined (our contribution being zero). They have doubled the amount of energy gotten from wind power in each of the past four years and will soon be the world leader in wind technology equipment purchases. That's taking the long view.

The Chinese know that they cannot sustain their current carbon excesses, so they plan for a future world where the mighty U.S.A. has to buy wind turbines, along with TVs, from them. We can't decide where or how to address nuclear waste and are scared out of our jammies that a nuclear power plant will melt down and kill us all. So we don't build nuke plants. We carp about the need for clean coal fired plants but don't want to pay the price, or claim in campaign ads that "There's no such thing as clean coal!", so we don't try to build them either.

Here in the Mountain State of West Virginia we have the coal is king group taking the tops off of mountains while the environmentalists would rather preserve all of nature by just keeping all the people away. No one is seeing that we need coal for some time to come, but we also need to push ahead with non-coal produced energy (oops, there goes my local reader(s)) like wind and geothermal. Hey, lets put wind turbines on those topless mountains. Flat terrain and good road beds already in place!

And in the end I think that's the answer to the question of China as the next super power. If we continue to make every discussion an argument between vested interests, we can only make progress in the short term. If that happens the Chinese will surpass us in the long term and the long term is not that far away. If we continue to be reactive to environmental crisis instead of being proactive in the face of sound scientific predictions, the Chinese will surpass us in the long term. If we continue to think that some future technology, not yet thought of, will get us out of environmental trouble, the Chinese will surpass us. I wish it were not so, but we are a stubborn bunch. I think I better learn Mandarin!

PRIMING THE PUMP

2009-12-14T16:15:00.000-05:00

I was going to title this post; Stimulus Follies, since that's what the dog and pony show we call politics in the U.S.A. has devolved in to. But this way I get to use a nice metaphoric image to help make my point.

The conservatives among us declare, with great huffing and puffing, that the first stimulus was bad and any further Federal stimulus plans will be worse. "Government can't create wealth," they puff, "only the private sector can create wealth," they huff, and, of course the tag line...wait for it..."we must cut taxes!" All very tiring and, for want of a better term, wrong.

Okay, not Econ. 101 wrong. More like real world wrong. This argument, that governments can't create wealth, is, it seems to me, based upon a single transaction view of the economy. The problem with that view is that real economies consist of multiple transactions. Let me explain.

In the single transaction model the government, with money from the stimulus package, let's say orders signs to be put up on road projects funded by the self same stimulus. (I've addressed this before here, so I'm not going to repeat that post. Go look if you're curious.) That's it. No wealth was created, just moved around. Taxes collected from John Doe (actually lots of John Does) are redistributed to Acme Sign Co. End of transaction. No wealth created here. Move along, nothing to see. Oh, and since this is a single transaction Acme can't count on additional orders later, so it sure wouldn't do to hire any more workers. Stimulus plan failure at it's worst.

In the real world model, those redistributed tax dollars do something else. They spread out. The sign companies vendors get some. The workers and truck drivers and paint makers all get some and then they spend it on gas or Christmas presents or whatever. And each of those transactions are TAXABLE EVENTS! Yep, the money that John Doe paid in taxes, that was then redistributed by the evil socialist government, is now being paid in taxes by all of the people and companies on down the chain. And we are to believe that none of that earning and spending and tax paying created any real wealth anywhere down the line. Really?

Let's say that I see an opportunity to start a business making nuts and bolts just like the ones used to hang road signs. The conservative position is that, since I invested in the business, even if I use borrowed money, real wealth creation occurs when I do business. That is, when I buy materials and do something to those materials so that I can sell a product, that creates wealth. But in the big scheme of things, do I, my workers, my vendors or my customers care that the original dollars for sign bolts came from the government? I can start my business because the government is spending, not in spite of it.

Look at the mother of all government stimulus actions; WWII. The Federal government went way into debt to buy guns and tanks and planes and bombs and all of the other things from the atom bombs to socks needed to fight a two front war. In the process many new and never before thought of companies were created. Huge fortunes were made and the post war economy has resulted in the the incredible technological world we now live in. Trust me, the war and its spending created lots of wealth, in every sense of the term.

Lets try a thought experiment. You've been stranded in the desert by a car break down. After a very hot dry day without water you come upon an old hand pump next to an abandoned farm house. Standing next to the pump is a (closed) quart jar of water. What do you do? It seems to me that the conservative position on wealth creation offers a clue. If we view the pump as the government and the jar of water as tax dollars, the conservative response would be to drink the damn water. Since the pump (government) can never really create water (wealth) the only logical thing to do is drink the water and move on, hoping that more water will be found tomorrow.

A better approach might be to use the water in the jar to prime the pump. For those too young or too urban to understand the reference, it goes like this. Old fashioned hand water pumps had very sloppy tolerances. The parts didn't fit tight to each other. If they did you probably couldn't pump water by hand. Anyway, the water would drain past the pump piston, made of a material that would swell when wet so as to create a suction, the piston would dry out and the pump would stop pumping. It was pretty common to leave a jar or can of water near the pump so that the next time water was needed one could pour water into the pump housing, wetting the piston so that it sealed the tube creating a suction and allowing the water to be raised from below. This is called priming the pump.

In our current predicament the conservative would have us believe that since the pump itself can never create water we should drink away. But I think it's clear that even if stimulus moneys create no wealth at first, subsequent transactions do create real wealth. The government just needs to prime the pump.

THOUGHTS ON CHINA

2009-12-04T17:12:00.000-05:00

A reader asks about my views on China, "the next super power." I've been thinking a lot about China, of late, and not comforting thoughts. The future of China, and our relationship to that country, may well have been forged in the cauldron of corporate greed that business in the USA has become.

The main reason that China is the source of so much of what we consume in this country is that it was, and is, much cheaper to make goods in China than here. As labor became more expensive here, more and more manufacturing work was outsourced to China. Simple economics from Business 101. Of course, Business 101 might also suggest that the wise business person take a long view and not trade short term profit for long term survival. Our hyper greedy businesses figured that it was OK to take jobs away from Americans since the trade off was products cheap enough that even poor folks could buy them. Particularly if the poor folks could get a hold of some cheap credit. Oops! Maybe they should have read to the end of the textbook.

China, on the other hand, due in no small part because the Chinese form of capitalism is overlaid upon a communist form of government, takes nothing but a long view. They have cheap labor to spare and huge sums of dollars paid to them for their exports. They have invested those dollars locally in infrastructure and, more importantly for us, in our debt. What a great idea. Sell products to us that we buy with money that they loan to us. And American business acting as the middlemen on both sides of the transaction makes gobs of money.

The only good news in all of that is a truth I learned from a (crooked) contractor I once worked for: When you're up to your eyeballs in debt ask your banker for more money. Your banker is the last person who wants to see you fail before you pay him back. Likewise, China has a vested interest in seeing America and Americans thrive. At least in the short term.

To be continued.

IT REALLY IS A HOLY WAR

2009-12-01T12:32:00.002-05:00

The neocon reaction to the recent tragedy of the Fort Hood killings and to the administrations decision to bring Gitmo detainees to NYC for trial opens a window to the thinking (if any) of the pundits on that side of the debate. The view is not pretty.

On the trials we are greeted with the litany of:

They were captured in a war so they must be tried by military commission.
This will only invite more attacks.
What if they get off?
This is war, not crime.
Repeat (endlessly it seems).

Of course, the "This is war, not crime" trope has been wrapped tightly around the heads of the neocon right since George W. Bush both created the War on Terror concept and used it to invade Iraq and Afghanistan. They can't now take a terrorist act as crime tact since that would blow the entire justification for the two wars we are now involved in.

As you might imagine, I take a different position. I'm old school on this. I think a war should be declared, by congress, against another sovereign state. No declaration, no war. No sovereign state, same result. As has been said before, the War on Terror is a war against a tactic. Let's have a War on Land Mines. How about a War on Flanking Maneuvers. Ya, it sounds pretty silly doesn't it. If, on the other hand, we take the criminal approach we can clearly see that action can be taken against those who committed, planned or supported criminal acts. This approach can be applied to large acts, like 9/11, as well as small acts, like the "shoe bomber". This neither diminishes the horror of 9/11 nor elevates Richard Reids attempt to light his shoes at 30,000 feet. A crime is a crime and should be prosecuted as such.

Which brings us to Nidal Hasen and Fort Hood. The neocon right is screaming that Hasen's actions are terrorism, and he must be treated as a terrorist and, I suppose, be shipped off to Gitmo and a water-boarding session or two (or 183, you never know).

But wait a minute! If Hasen is a terrorist and our response to terrorist attacks is based upon the War on Terror model, who, pray tell, should we now invade? With whom should we start war number 3? Hasen wasn't, as far as we know, a part of any al-Qaeda sleeper cell. He didn't train at an Afghanistan "monkey bars" training camp. He wasn't bin Laden's driver, or go-fer, or anything. He is a Palestinian by birth so maybe we should invade Palestine. Oh wait, there's no such country as Palestine. OK, maybe we should invade the West Bank. Or Gaza. See the problem in dealing with Hasen as a terrorist actor in the War on Terror.

To my mind this blows up (sorry) the whole idea of the War on Terror as anything other than a holy war against Islam. That 800 pound gorilla is the only connection between Hasen and al-Qaeda. In fact, Islam is the only real connection between the many far flung Islamic terrorist groups around the globe from Asia to Africa to Europe. If Hasen must be treated as a terrorist it must be because he is a Muslim. There is no other logical reason.

Nidal Hasen is a murderer for whatever reason he himself used as motivation. Likewise, those who planned and executed 9/11 are murderers. We know full well in this country how to deal with murderers. By labeling him, and them, anything else leads to endless war in countries with little or no connection to the acts committed. I, for one, have more and better faith in our justice system then those on the right it seems. What ever happened to American Exceptionalism?

CURMUDGEON'S FIRST LAW

2009-11-23T15:28:00.002-05:00

It may be, in the continued popularity of Sarah Palin, that we are approaching a truly staggering national proof of what I like to call Curmudgeon's First Law of Politics. Before stating what it is that the First Law states we need a bit of history.

Personal history, that is. For pretty much the entire decade of the 80's I was the duly appointed City Attorney of a small town in north central West Virginia. Since this town held elections every two years I got a chance to work with five different mayors and about a dozen city council members. That direct exposure to the results of small town politics lead to the creation of the First Law. The fifth and final election was so memorable that the First Law almost wrote itself in the aftermath.

You see, the fourth mayor had some issues with the Sargent of Police. The said Sargent took some medical time off and during that time he grew a rather full beard. It is when the Sargent returned to active duty that things get interesting. According to the mayor, the Sargent reported for duty to the mayor in full bearded glory. The mayor suspended him and told him to go home and shave. When he refused, according to the mayor, His Honor fired him.

Of course, according to the Sargent no such bearded appearance ever happened. He was on his way home to shave before appearing for duty when the mayor saw him. The firing was unjust and unlawful and just plain wrong. And oh ya, I'm suing the city.

The details of the case and even it's outcome are not important. OK, the Sargent won a small settlement but that's not what lead to the First Law. During the course of the litigation another election came up and who do you think ran for mayor? And won? You betcha'. The Sargent ran for mayor while suing the city and in the end had to sign his own settlement agreement both as plaintiff and as defendant. That's what brought forth Curmudgeon's First Law of Politics.

Which states:

People will elect others to local office whom they perceive to be dumber than themselves.

I have since had to modify this to remove the word local. As we saw so clearly in 2000 and 2004 our utterly connected world makes all politics local. I can sit at my desk and read the thoughts of partisans from all parts of the political spectrum. Hell, I can add my opinion to the mix. So the First Law now reads:

People will elect others to office whom they perceive to be dumber than themselves.

If the First Law is predictive, which of course I think it is, then the Democrats, and the country, could be in real trouble if Palin runs in 2012. The population of voting age Americans who think she is dumber than they are is, well, huge! And growing bigger each and every day. Be afraid. Be very afraid.

WONDERFUL ART

2009-11-20T10:10:00.003-05:00

I've recently reconnected with an old friend from high school. It turns out that she is now an incredible artist working in quilts. The picture is a work called "Brookside in Winter". Her site is here and everyone should go look and buy.

Your curmudgeon will now return to his regular ranting.

FROM THE DAILY SHOW

2009-11-01T11:32:00.004-05:00

Here is a recent Jon Stewart piece taking on Fox News. Enjoy.

THE BAD VS THE GOOD

2009-10-28T10:37:00.003-04:00

Let me get this straight. According to the shouters on the right it's bad for the government to use our tax money to provide for the populace, except for defending our shores, of course, but it's good for our government to use our tax dollars to provide for the populace of Iraq and Afghanistan. Am I missing something here?

STATES' RIGHTS

2009-10-22T10:43:00.005-04:00

I came across this article by Kathleen Parker in the Washington Post concerning legalization of marijuana. In it she makes the following point:

States' rights and conservatism are old friends -- except when they're not. While many Republicans nurse a libertarian streak, the party has been selective in its support of federalist principles. George W. Bush's administration refused to honor states authorizing medical uses of cannabis, for instance, but aimed to return abortion and marriage issues to state jurisdictions.

That particular bit of conservative hypocrisy has always riled me. It is also apparent with regard to doctor assisted suicide and gay marriage.

I think that we would enjoy a somewhat saner country if the Federal Government had stayed out of most of what we do, leaving control to the states. Likewise, states should shift control to counties and cities so that the governed can have local control of those governmental actions which directly effect their lives. And, if you don't like what the state or county does you can vote the bums out, or move. That, in a nutshell, is what states' rights is all about.

Of course, you have to be able to afford to move, and the local governments can't raise enough revenue to do what needs to be done, and they would have to cooperate with neighboring jurisdictions so that roads are built to the same standards everywhere, for example. But it's nothing that a perfectly good 19th century country couldn't do.

The current conservative mindset sees no conflict since clearly the parts of our lives that they want to control are bad for us and immoral. The War on Drugs really started in earnest when Nancy Reagan spoke the bumper sticker phrase, "Just say no!" The implied justification being that taking drugs is bad, wrong and immoral. Congress, under control of the ever gutless Democrats, fell over each other in the rush to create ever harsher punishments for all those evil doers in the drug trade, thus to not be painted with the soft-on-crime brush. And away we went. Life sentences for pot possession, three strikes and its life laws and the biggest prison population in the world. All because a former actress declared drugs to be immoral and lawmakers agreed.

So, does it bother anyone else that this huge, and expensive, debacle is based upon the moral pronouncements of those with very little moral standing, i.e., the Congress of the United States of America? It sure bothers me. Stop Prohibition Now!

ARE PEOPLE IN THE NEWS BUSINESS JUST DUMB?

2009-10-20T10:55:00.004-04:00

Now, clearly I can't be talking about all people in the news business, but there does seem to be a pretty low threshold of smarts required to get into the club.

Case in point: On Sunday, as is my practice, I tuned in the Reliable Sources segment on CNN. This is the Sunday morning hour hosted by Washington Post columnist Howard Kurtz that looks at the media itself. The number one topic this week was the "Balloon Boy" story that had dominated several hours of cable news network time during the week.

I was half listening to Kurtz's opening paragraph when that little alarm went off in the back of my head. You know the one that nibbles at you when the actor reads lines about the beautiful sunset on the ocean, and you know the film is set on the east coast. That tiny alarm when off when Mr. Kurtz called the silver flying object a "Hot air balloon".

OK, first, just by looking at the pictures of the thing flying like a silver UFO, taken from news helicopters, showing every single angle and view possible, it was easy to see (at least for me) that this was a Helium Balloon not much different from shiny party balloons seen at every boomer turning 50 birthday party in the land. So maybe Kurtz misspoke and a very nice producer talking in his ear will tell him its a helium balloon so that he can save face. But no, he goes on and calls the contraption a hot-air balloon again, and then again and then so many times that I lost count.

But hey, it's live TV. Maybe he got the idea it was a hot air balloon stuck in his head and just didn't realize it. But then I happened to check out his Washington Post on line piece on the same subject. Yep, first paragraph: Hot Air Balloon. This was, I hope, written while Kurtz was not under mortar fire in Iraq. Or while fleeing from a wild fire in California. So if he wrote this with time to reflect, why didn't he fact check his own story? Doesn't the Post have editors? Doesn't CNN have researchers?

This is just lazy journalism. The nature of the device in question was important to the story. A hot air balloon has a basket from which a 6 year old could fall. The helium balloon in the sky did not. A modern hot air balloon has a burner, powered by propane, to produce the hot air. It can burn or explode in a crash. Helium doesn't burn or explode. These are critical facts about the incident. This is like reporting that a child was bitten by a cat when in fact she was mauled by a lion. It ain't the same story Mr. Kurtz.

For the benefit of Howard Kurtz, and all the other news people who appear completely surprised when they report that a giant corporation, say, cheated it's customers or that NASA was "Bombing the Moon", here is a quick lesson on hot air balloons. Be careful Howard, there might be a test.

THE TORT REFORM MYTH

2009-10-13T16:54:00.002-04:00

As the health care reform debate continues we hear again the call for "Tort Reform." Wikipedia defines the term like this:

In the United States tort reform is a contentious political issue. US tort reform advocates propose, among other things, procedural limits on the ability to file claims, and capping the awards of damages.

Of course the sides line up as one would expect. Republicans want to limit jury awards in medical malpractice cases, which would then lower medical malpractice insurance premiums and the health care crisis would be solved. Democrats don't want to limit jury awards in malpractice cases because that would add more harm to the people who are injured by doctors and hospitals and also wouldn't punish those bad actors enough.

OK, that's a little simplified and snarky, but that really is the gist of it. I come down somewhere in the middle. Yes, I think some reform is necessary, particularly as it relates to the election of, and resulting gutlessness, of trial court judges. See my post on that subject here. But I also think that arbitrarily limiting the amount that a jury can award does harm the already harmed. But that's not what I want to address here.

The drumbeat for tort reform in the current debate is a giant straw man built by the Republican right and I wonder why no one ever calls them on it. They would have us believe that if the Democratic controlled Congress and Democratic President didn't owe their positions to the donations of trial lawyers, why we could fix this problem right quick. That position is, shall we say, disingenuous, for two very good reasons.

First, why didn't the Republicans do this when they had all the power? Do we forget that from 2001 to 2007 the GOP held both houses of Congress and the Presidency? Do we forget that the Democrats during that time were gutless wonders who allowed two wars, huge tax cuts for the wealthy and the torture of prisoners held by our forces? Why didn't the GOP just do it? Because:

Second, neither they or the Dems. can reform the tort system at the Federal level. The civil justice system is a state function. Few, if any, medical malpractice cases can be brought in the Federal Court system. It's up to the legislatures of the various states to make changes. The states have insurance commissions overseeing the insurance industries within their borders. State laws control the rules of civil procedure and I would imagine that it would be the Republicans who would shout "States Rights" the loudest if the federal government tried to push the states around on this issue.

Perhaps disingenuous is too nice a word. I seem to recall that the Republicans actually control the governments of some of the states. So why haven't they instituted tort reform there? How about our good friend greed!

If medical malpractice awards were limited the insurance companies would be forced by market pressure to lower the premiums that doctors and hospitals pay for insurance. They can charge outrages six figure premiums now because of outrages jury awards. Of course, over 95% of malpractice cases never see a jury, but are settled out of court. And, since doctors who are super careful and never have a claim made against them are still charged huge premiums it's not in the insurance companies best interest to have a reason to lower premiums.

Hospitals and physician specialty practices, who might see an insurance premium decrease under tort reform may not actually be in favor of such reform, either. They make an awful lot of money, paid to them by the health insurance side of those same insurance companies, when they perform test after expensive test ordered by doctors who are practicing defensive medicine. Hey, the hospital has to pay for that new CT scanner some way.

What it boils down to is that the "for profit" American medical system maybe can't be reformed. Damn, I think I just made an argument for the so called Public Option insurance plan. Oops.

GREED

2009-10-06T15:42:00.000-04:00

Now, this might be what we used to call a BFO, a Blinding Flash of the Obvious, but we are living in a society powered by greed. Not just a little bit of greed. Not just some of society. No, if you stop and think about it, greed permeates every part of American society. And that realization may explain some of the otherwise unexplainable aspects of our lives.

For example, the health care reform debate. People who have health insurance provided to them by an employer seem unwilling to allow the government to help out people without health insurance. They can offer all manner of reasons, but deep down isn't it just that they don't want someone else to get for free (or cheap) what they now have? Greed.

Keeping to health care reform, we also see that the right wing in American politics looks at any government intervention as a failure in advance because "government is the problem." But why is this so? I'll grant that government run programs are, generally, inefficient and wasteful. How does greed enter into the picture? Well, one of the main reasons for inefficiency and waste is that all government programs are designed to try and prevent theft. Whole forests of paperwork are needed to try and make sure that the recipient of a government provided benefit is deserving of the benefit. The assumption is that people will cheat the system. Greed again.

It's everywhere you look. Even the one government program the right seems to always want to increase, the military, is rife with tales of $800 hammers and other procurement messes. Again, paperwork, inspections and reviews written into every procurement contract intended to prevent theft of our tax dollars. Greed.

And it's not just government. Banks that make billions of dollars from overdraft fees. Credit card companies charging 30% or more interest. Airlines charging for checked luggage. Oil companies making record profits from consumers when they had to pay $140 per barrel. It's just about greed.

Please understand, I'm no left wing communist. Having been a business owner for 40 years puts me smack dab in the category of capitalist, but the world we now inhabit seems to me to be awash in greed far in excess of the capitalism of 40 years ago. I've touched on some of this before, here and here. When good old Mom and Pop owned the general store they knew that it was in their self interest to allow the Widow Jones to buy groceries on credit every now and then. Their altruism, based on self interest, could be viewed as greed, but at least it was altruistic toward the Widow Jones. She benefited and that benefit was spread to her children and grandchildren. The benefit out weighed the self interest. Today that general store is owned by General Store Corp., Inc. and the stockholders would not take kindly to letting that old woman get out without paying.

It seems to me that the only real charity in America comes either from the very, very rich (Bill Gates and his wife) or from the poor helping each other in time of need. Every other group and institution in society, when you look under the rocks, is based on greed.

SO, WHAT'S THE SCORE?

2009-09-30T15:12:00.005-04:00

A recent cover story in USA Today got me thinking. The story (USA Today, September 22, 2009) was about the use, by lenders, of credit scores and how people's scores can be effected my things over which they have no control. In particular how a lender lowering a borrower's credit limit can cause that borrower's credit score to go down.

First, a little refresher. The FICO credit score was created by the Fair Issac Corporation in 1958 as an aid to lenders. The idea is that if you gather together a history of a persons use of credit, their payment history and other like information and then apply a mathematical/statistical analysis to the data, it is possible to predict who will pay back a loan and whole will most likely default. That is, one can predict risk. The resulting "FICO score" is a number in a range from 300 to 850. The higher your score the better. High scores can result in lower interest rates, better loan or credit card terms, or even that you can get credit at all. There are other credit scoring companies in the market place so Fair Issac is not the only game in town. Sounds fairly straight forward, right? Maybe not.

As the article reveals;

...consumer advocates say regulators and Congress need to address lender actions that are unintentionally hurting credit scores. They say that as underwriting standards tighten, even a small change in a credit score could affect what rate consumers get on a loan — if they get one at all. Some analysts also say the fact that consumers’ credit scores can fall even if they’ve never missed a payment or exceeded their credit limits raises questions about the score’s usefulness.

“All these changes are new structural changes in the financial system,” says Leonard Bennett, a Newport News, Va., lawyer who has testified before Congress about credit-reporting issues. “The ability to predict risk and integrate that into a credit score — based on historic data — is logically impossible.”

See, when your credit card company sends you that notice that says your credit limit has been reduced to say, $10.00 more than your current balance, they're just making a sound business decision to protect themselves, and their stockholders, from risk. But wait a minute. Lowering your credit limit means that your Credit Utilization has changed. Credit Utilization is a fancy way of looking at the ratio between the amount of debt you have versus the amount of available credit you have. If you could borrow $1,000 but you only have $100 in outstanding debt then you have a good ratio. If, on the other hand, your balance is $990 then your ratio is not so good. Credit Utilization makes up 35% of your FICO score, so it's not a small factor.

What the credit card companies are doing, then, is changing your debt to credit ratio seemingly without regard to payment history or anything else that you may have done. And that lowers your FICO score. Now another credit card company (we do all have more than one, don't we?) sees that your score has gone down, so they lower the limit on their card (see, they HAVE a reason) and your score gets even lower. Can you say vicious cycle?

Now, all of this has been addressed other places by people with way more financial knowledge then your humble Curmudgeon, but there is one aspect that hasn't been looked at. Why the hell should my or your ability to get credit be in the hands of same faceless corporation that gives out a score that we have basically no control over? And further, should our banks and credit card companies trust these scores? Tom Quinn, a vice president at Fair Isaac, which created the FICO credit score, says its data show the scoring formula “is working,” because it’s able to rank consumers’ riskiness.That sounds familiar. Isn't that the same thing that was said about the companies that rate investment instruments? I seem to remember (I may be old, but not that old) that last September we heard about AAA rated securities that turned out to be the so called "Toxic Assets."

So let's review. The financial industry uses the services of rating companies to determine the riskiness of securities using mathematical/statistical analysis. Those companies get it wrong and a bunch of highly rated paper turns out to be worse than junk which almost causes the world economy to implode. The same financial industry uses rating companies to rate our credit worthiness using mathematical/statistical analysis which can be shown to NOT reflect what we the borrowers do, but which can be manipulated by the said financial industry and we are just supposed to take it and thank them for the privilege of having to beg for our next car loan. Do I have that right? What a world!

HOW NOT TO SAVE JOBS

2009-09-22T11:59:00.004-04:00

The Queen and I did a little shopping yesterday and it seems that a new, and not very hopeful, sign of the times hit us in the face. Well, really it hit us the patience meter.

At stops at both Home Depot and WalMart (the single largest private employer in the country) we were faced with the prospect of SELF CHECKOUT!

There were no regular, staffed lanes open at Home Depot. Just one poor soul overseeing a group of self service checkout stands. OK, we said, we can play this game. The Curmudgeon has been what we call computer literate since the early 70s so how hard could it be? Well, pretty hard actually. The combination of a poorly laid out display and the total absence of printed instructions coupled with the requirement (never clearly expressed) that items MUST be placed on the bagging area (to be weighed it turns out) led to mild frustration. The fact that the damn scanner required four or more passes and then the help of the attendant led to verbal outbursts. This is no way to run a railroad (or retail store).

WalMart was no better. The only live cashiers were at the 10 items or less lane and the cigarette lane. Huge lines, so we tried self service again. Same result. Now this is clearly a small thing which on this day caused us a bit of frustration, but it's not hard to see a bigger problem in the making.

How many cashiers were not working and earning a living while we, the customers, did their work, I wondered. And then the full implication hit me. This is just the latest examples of a trend. First gas stations, after doing away with their service bays in favor of convenience store selves, did away with attendants altogether. Or maybe it was the other way around. Regardless, we, the customers, now pumped our own gas, cleaned our own windows and if we wanted to check the tires we could find a pump at the end of the lot that took a quarter to provide compressed air. The work of six or seven skilled (mechanics) and unskilled workers was now being done by one paid employee and the customers who are paying the freight.

Then those customer service giants the airlines figured that they could use the Internet and kiosks to sell tickets and provide boarding passes. More jobs lost. And now general retail has joined the club.

Sure, this is a way to keep prices low, but isn't it also, in the long run, counter productive? Fewer and fewer paid employees means fewer and fewer people able to buy what those fewer employees are selling. What we are seeing is both the end promise of the industrial revolution and the reversal of Henry Ford's response to that revolution. Ford saw that while he could build more of the new finagled horseless carriages with fewer employees by using the tools of industry, he also saw that he needed to pay higher wages to those employees so that they could afford to buy the cars.

Today we see that companies are trying to sell more products to an ever diminishing pool of buyers. Jobs are outsourced to other countries or eliminated all together (no cashiers). Now I'm not in favor of silly work rules that create jobs just to create jobs (see GM) but, since 70% of our economy, before this recession, was driven by consumer spending, shouldn't we maybe think about were those consumers are going to work?

I'VE BEEN AWAY

2009-09-22T11:54:00.002-04:00

The "Queen of the Frontier" and I have been out of town and away from computers so this blog has been silent of late. No more! Being away from home sometimes helps focus the mind and I'm pretty focused right now. Also pissed, so look out world, I'm back.

WHY ALL THE ANGER?

2009-09-01T13:19:00.003-04:00

I've been scratching my head over the very vocal anger being expressed by some at town hall meetings, in interviews and in blogs. While it's easy to see that people fed a steady diet of Rush or Glenn Beck distortions and false claims (see my last post), intended to arouse anger, would result in anger, I think that there may be an underlying cause.

Note that most of what is said (shouted) is anger at GOVERNMENT. "I don't want the Government to get between me and my doctor" or "The Government can't run anything right. What makes them think that they can run GM, health care or whatever." While the Obama = Hitler trope is there too, the overall sense is that these folks really hate THE GOVERNMENT. Since Obama has only been in office 7 months this, to me, seems a bit excessive. What is going on here?

Could it be our old friend cognitive dissonance? Our country has been through hell over the past 8 years. A terrible attack on the Homeland. A war to catch the people who planned and ordered the attack and the failure of that war to catch them. Another war started on grounds that proved to be pretty much completely false. A storm ravaged American city and the incompetent Government response. The revelations of mistreatment and torture of prisoners. The past 8 years have shown those average citizens out there in Sarah Palin's "Real America" that, by gosh, the Government IS incompetent and can't seem to do anything right.

But wait. These are the same folks who believed that Saddam had WMD. They believed that if we fight them over there they won't come here. They believed that we don't torture our prisoners. Classic cognitive dissonance. "The uncomfortable feeling caused by holding two contradictory ideas simultaneously" is exactly what we are now seeing. And, since they believe that they should both respect our leaders and their policies and that the Government run by those leaders has resulted in poorly planned and run wars, programs and agencies (can you say FEMA?) their brains are faced with the pain of cognitive dissonance.

What we are seeing now is the expression of that pain against the new guy and his Government. "He's Black you know. Not like us. He has a funny name. I heard he wasn't even born here." They find it much easier to yell about Obamacare now rather than protest the war back then. The anger and frustration has been building for 8 long years (longer still when you consider the 1996 congressional election and the impeachment of Clinton). Their buttons are easy to push, and as we can see, the Rushes and Becks of the world know where those buttons are.

It's going to be a very angry fall and winter.

THE HEALTH CARE REFORM MESS

2009-08-31T13:53:00.002-04:00

I've been absent from the blog for awhile due to other projects and needs. I have also purposely NOT been blogging on the health care reform mess, in part because the matter is everywhere right now and because by poor old heart can't take the strain of trying to understand what some of the opponents are even saying. Reading or hearing opinions based upon complete ignorance and misunderstanding tends to put my BS meter into shock. It's not easy to argue with someone who declares, in a loud voice, that the sky is pink when a simple look up reveals pure blue.

In an effort to help clear the air a bit, here is a link to a FactCheck.org post titled: Twenty-Six Lies About HR 3200. It looks at 48 claims made about one of the reform proposals now being debated in the Senate. Enjoy!

IF GOVERNMENT PROGRAMS ARE ALWAYS BAD...

2009-08-17T16:39:00.003-04:00

Here we are in the silly season of August and the issue dominating the news is, of course, how utterly incompetent and wasteful our government is in anything it attempts. At least that's what's dominating the news from the mouths of Republicans. With each proposal to reform, say, health care, we are treated to a chorus of "The government wastes too much" or "The government can't do anything right" or some such. My question is, have these folks ever thought about how that attitude plays with the people who work for the government?

I know that if I worked for the government, in any capacity no matter how high or low, I would be pretty pissed off every time a Republican lawmaker stands up and tells the world how incompetent I and my fellow workers are. Because isn't that what all government programs are? They're just people trying to do a job with the tools that they are given. They really don't get up each morning thinking of new ways that they can screw up. And let's not forget that those lawmakers ALSO work for the government.

Here's a crazy idea. Instead of griping about poorly performing government programs, how about proposing ways for those programs to work better. Give the government workers better tools, better training and better pay. You know, like a good business owner might do in the private sector.

STIMULUS BILL WASTE

2009-07-07T13:06:00.005-04:00

A front page story (with color picture) in my local newspaper has done real damage to the Curmudgeon's blood pressure. "SIGNS OF WASTED STIMULUS?" reads the headline. The AP story, backed up by the paper's second editorial on the subject in a week, takes the Obama Administration to task for the "Project Funded By" signs going up at stimulus money projects. Here's a sample of today's editorial:

Last week we complained about use of taxpayers' money to erect gigantic signs at sites where projects funded by federal "stimulus" money are in progress. The signs are a blatant attempt to gain votes for President Barack Obama and members of Congress.
Each sign costs between $500 and $1,200, according to the Associated Press. We are not the only party to have pointed out that the money could have been put to better use.

Now, the signs themselves don't mention the President or any member of congress. Signs headed "Your Tax Dollars at Work" have graced the sides of West Virginia highways and interstates for years. They DO mention the Governor. Thus, making the "Propaganda" argument, as the paper does, is really just sour grapes by the side that lost the last election. It's the second reason, "that the money could have been put to better use," argument that has me steamed.

The stimulus money is intended to stimulate an economy that has "locked up."

Banks are not lending.
Businesses are not selling products.
People and businesses are not buying goods or services.
Workers are being let go.

Now, we can argue all day and night about whether the government can or should act to try and restart the frozen economy. The $780 billion stimulus package is a fact, though, so lets deal with what is, not what we wish was. The government can effect each of the four areas, each in different ways.

In order to effect number 1. the government could inject money directly into the hands of people and businesses. Cutting taxes seems to be the preferred method on the right, but since, contrary to the conservative conventional wisdom, this will result in lowered government revenues, it won't help the problem. The stimulus bill does, I think, provide for $400 to $800 payments to taxpayers which may help, but because of number 4. above, that really can't do much long term. If you're afraid of losing your job you don't go buy a new TV with your $800 check. It is also impossible to funnel enough money into peoples hands to have much of an effect. There are too many fairness questions. Them that don't pay any taxes shouldn't share. Socialism you know. And we don't want to give any money to those who don't need it.

The government can effect number 4. by simply hiring people to work for the government. If one listens to those on the right, this is the "real" intention of Obama and his liberal government. Make everyone a government employee, dependent for their livelihood on the Democrats for ever and ever. This does not seem to be the intent of the stimulus bill here in the real world.

Now number 2. The government of George Bush attempted to goose the banks with the TARP bailout fund. We don't know where the money went, but it didn't seem to make it to Main Street. The Federal Reserve has also tried giving a boast to lending by keeping interest rates low. Still no help.

It seems that the only way to stimulate the economy that might work is to get businesses to start selling products and services again (number 3.). The government, thus, needs to BUY things. Like road and bridge repairs and SIGNS.

The signs are made of aluminum and are hung on steel posts with steel bolts. That means both the steel and aluminum industries benefit. The signs are painted and coated with products of the chemical industry. Someone at a desk and computer designed the signs. Someone else made the presses that were used to stamp out the aluminum blanks and someone else maintains and repairs those presses. Someone makes the actual wording graphics and yet another someone puts the graphic on the sign blank. Packaging and shipping involve yet more people. And as each of those folks receives wages or profits in the making of signs they in turn spend those wages at the grocery or the dentist or McDonald's. The economy is an interconnected whole.

There are 4,840 highway projects being funded by the Recovery Act. If each one uses just one $800 sign the cost is $3.9 million. Is this a "waste" of stimulus money? As we can see, this money gets into the hands of people and businesses and will be used to pay even more people and businesses and so on. The money will "stimulate" activity in the economy. Is this stimulus not as good as the $15.4 billion for highway projects that it's a part of? Concrete and asphalt good. Aluminum and steel bad. Can we pick and choose like that? Should we?

You see, there's really no such thing as bad or wasted stimulus money. There are only projects and products that we don't like. Yes, the direct building costs of these highway projects are an investment in the nations infrastructure, but benefiting the sign industry and all the related industries is not a waste of money. Just as funding volcano monitoring isn't a waste of money if you live near a volcano. Hurricane hunter aircraft? Not much use in Indiana but pretty important on the coasts. Stimulus money is intended to stimulate. I for one don't care where it goes, so long as it's spent in the U.S.A. So come on, stimulate us!

IT'S THE JUDGES' FAULT

2009-06-25T13:44:00.012-04:00

The continuing debate over Health Care Reform is starting to heat up. I've started to hear that old chestnut about how doctors and hospitals are burdened by the high cost of malpractice insurance, brought about by out of control damage awards, and that we as a nation could lower the high cost of health care if we just enact tort reform.

Some of the arguments for reform include limits on punitive damages, limits on non-economic damages, use of court appointed expert witnesses, the adoption of the English rule that the loser pays and the elimination of elections for judges. The arguments against reform include fairness to persons injured, punishing people or corporations that are negligent and the idea that only by exposing and punishing negligent acts will people and institutions change their behavior. Which political side takes which position is pretty well known, so I'm just going to leave that alone. What I would like to address is the elimination of elections for judges, and how that could have a significant effect on jury awards in general and medical malpractice in particular.

Why should electing judges have any effect on the size or frequency of jury awards? Judges are impartial, right? Well...sort of. We've seen of late that judges can, and do, get their hands caught in the cookie jar when their financial interests and the interests of justice collide. And there's no bigger cookie jar than campaign donations. But, while avoiding even the appearance of a conflict of interest may be a good reason to stop electing judges, I think that there's an even larger conflict that elected judges face. Pleasing voters.

Elected judges like to get reelected. While their appeals to donors can be personal and done in the back room, so to speak, the appeal to voters is public and based on a judges record. And there's the rub. It's far easier to defend your record (to the voting public) as a judge in civil lawsuits if you don't have a long list of the poor injured plaintiffs who you've dismissed out of court before their cases could be decided by a jury. So "bad" cases or cases that could result in huge unjustified jury awards regularly get tried. And juries award huge unjustified sums to injured plaintiffs and we all get to stand back and blame the greedy lawyers. So, as a result, all liability insurance rates go up and more and more cases are settled out of court. More importantly in the medical field, more and more doctors start to practice "defensive medicine," ordering tests and procedures that protect the doctor or hospital from lawsuit, rather than the health and well being of the patient.

As I've said, the public likes to blame the lawyers because they file some really ugly lawsuits. They will include every possible defendant, no matter how remote their connection to the harm. under that tried and true legal theory of "Sue everyone in sight." And our elected judges just roll over and allow such cases to proceed. You see, it's not as if judges don't have any recourse. They do. It's called "The Rules of Civil Procedure." Every state, and the federal judiciary, have them. The rules set out how you start a civil lawsuit, serve notice, make motions, etc. Here's the West Virginia version that I used to practice under.

Now here is the really interesting bit. The rules say that, in order for a party to file a legitimate lawsuit, they have to "state a claim upon which relief can be granted." Say what? In English that means that your lawyer can't just make up a connection between your injury and, say, Dr. Green. There needs to be what's called a causal link. So judges can throw plaintiffs out of court before a case even gets underway. (The particular rule is number 12(b)(6). It also references rule Rule 56, Summary Judgment).

So what's the point? If judges weren't worried about reelection they would have far less inclination to "let a case go to the jury." They might actually throw bad cases out and sanction plaintiffs' lawyers for wasting the court's time in the first place (see Rule 56(g) ). Let a sitting judge charge a few malpractice lawyers with contempt of court and a fine and the number of questionable lawsuits in that jurisdiction will start to go down. Will some good cases get thrown out or not filed? Probably, but that's why we have appeals.

Elected judges are afraid to do this. I know. I've seen it in action. I represented a businessman in a matter involving a contract to buy some real estate. In the course of negotiations the businessman's father hand delivered the contract documents to the seller. When the negotiations went south the seller sued my client and his father! Now, it doesn't take a law degree to see that Dad's connection to this matter was peripheral at best. So, as a favor to my client, I filed a 12(b)(6) motion to have the case against his father dismissed. The judge turned us down saying "I think we should let the jury decide." Result...Dad had to get his own lawyer and proceed with the case. He was ultimately dismissed as a defendant and his son won his case, but at what cost? The father had to pay his lawyer and take time off from work simply because the elected judge was facing opposition and, to a judge, letting the jury decide is always safer than making the decision yourself.

In medical malpractice cases, as we've seen, the results can be much more expensive for the parties and for society as a whole. What should we do then? I think that judges at every level should be appointed for either a limited term (say 12 years for trial judges, 20 for appellate judges) or until they reach a mandatory retirement age. Governors can do the appointing at the state level, just like the President for the Federal Bench, and, if need be to get such an idea passed, confirmation by the state senate. We already know how to do this, it just requires some political courage.

Oh wait. Political courage seems to be in short supply every time this subject comes up. Maybe next year. Ya, sure!

A SEASONAL NOTE

2009-06-17T16:37:00.005-04:00

Just for fun I've posted a piece I wrote some 17 years ago about the time I got the chance to help set off fourth of July fireworks. Here's the link and a taste.

What was a 43 year old lawyer doing on a barge in the middle of the Ohio River with a half ton of explosives?

The Fourth of July! Independence Day! Fireworks! Was there a boy alive in these United States whose heart didn't beat faster at the thought?

Flags and parades and marching bands are fine. Picnics and hotdogs and outdoor games are just great.
But FIREWORKS! They're the very essence of this country's annual birthday extravaganza. Pictures of firecrackers exploding form the background of newspaper ads for weeks in advance of the big day. Television gives us shells star-bursting in the background as the car/furniture/swimming pool salesman offers that special sale price in celebration of the Fourth.

IRAN

2009-06-16T11:52:00.004-04:00

The Iranian election and its aftermath, contrary to what we are seeing and hearing on cable and network news, is a big deal. Our relationship to this country has been shaped for decades by its last revolution. This time the region is much less stable, so the stakes are high, but it also seems that many of the Iranian people are fed up with the direction that their leaders have taken. The possibilities for the future of U.S./Iranian relations may be changing.

Andrew Sullivan over at the Atlantic is doing an incredible job of pulling the threads together. Check it out.

LIES OF THE TORTURE REGIME

2009-06-12T15:34:00.007-04:00

Senator Sheldon Whitehouse (D-RI) spoke in the Senate yesterday about this nations "Torture Regime" and the lies that are being told to protect the guilty. Here's a taste. The entire statement (it's not too long) in the Congressional Record is here.

President Bush told us ``America does not torture'' while authorizing
conduct that America itself has prosecuted as crime and war crime, as
torture.
 Vice President Cheney agreed in an interview that waterboarding was
like ``a dunk in the water'' when it was actually a technique of
torture from the Spanish Inquisition to Cambodia's killing fields.
 John Yoo, who wrote the original torture opinions, told Esquire
magazine that waterboarding was only done three times. Public reports
now indicate that just two detainees were waterboarded 83 times and 183
times. Khalid Shaikh Mohammed reportedly was waterboarded 183 times. A
former CIA official had told ABC News: ``KSM lasted the longest on the
waterboard--about a minute and a half--but once he broke, it never had
to be used again.''
 We were told that waterboarding was determined to be legal, but we
were not told how badly the law was ignored and manipulated by the
Department of Justice's Office of Legal Counsel, nor were we told how
furiously government and military lawyers tried to reject the defective
OLC opinions.
 We were told we couldn't second guess the brave CIA officers who did
this unpleasant duty, and then we found out that the program was led by
private contractors with no real interrogation experience.

He goes on with more of the facts that fly in the face of what the members of the former administration, and their apologists, have been saying. I so hope that we can get all of the facts out and prosecute these war criminals!

AH, THOSE WERE THE DAYS

2009-06-11T16:31:00.005-04:00

Here is an old drug company ad that I lifted from an Andrew Sullivan post. Here's the source site.

He noted (and I hope you can read it) the inclusion of "...codeine, chloroform and cannabis!" but it looks like he missed the real hoot, "...available in 16 - fluid - ounce bottles, also in gallons." GALLONS of codeine cough syrup. Today you can get thrown into prison for smoking a weed harvested from a roadside ditch. What a world!

HOW MUCH IS A LIFE WORTH?

2009-06-03T14:26:00.004-04:00

That question has been rattling around my brain box for some time now. While it may seem obvious that the answer is "A human life is priceless," a moments thought reveals that "priceless" carries with it a very steep price that we Americans pay in the social policies that we all must live with.

Take medicine. The idea that the adoption of a European type universal health care system will result in rationing (see my post here) only makes sense if you realize that what is meant is rationing of the best care. The government can't be the insurer of last resort because the country would go broke, say the anti universal care types. And since we wouldn't want that, some people (read poor) will be denied care. But the care they are referring to is the best care available. You see, if every human life is priceless, to deny or ration the best care to anyone is to cheapen that human life.

The idea works like this. Comparing treatment "A" with treatment "B" as to their efficiency will lead to the conclusion that, of course, we should use whichever is the most efficient. But what happens when we compare their cost effectiveness? If "B" is 10% more effective but costs 10 times as much as "A" should we still choose "B"? How about if the patient is willing to pay the difference? How about if the taxpayers (you) are picking up the tab? Every life is priceless. With "A" you'll live 30 more days. With "B" you'll live 33. Which makes more sense?

That, in a nutshell, explains one of the many hard questions we will face as we try to solve the health care crisis. Great Britain has dealt with this as it relates to drug costs by setting up a body called the National Institute for Health and Clinical Excellence (NICE). See this Time story for some details. NICE uses a formula to compare "A" and "B" and approves or disapproves any new drug or treatment. That is, whether or not the National Health Service will pay for the drug or treatment. Rationing. Why would we ever want to adopt such a scheme here in America.

Sir Michael Rawlins, chairman of NICE, believes that if the U.S. adopted a similar system, it would revolutionize the culture of major pharmaceutical companies, many of which spend more on marketing than research and development. A 2008 study in the New England Journal of Medicine predicted that incorporating information about cost-effectiveness into the design of U.S. insurance would save $368 billion over 10 years.

Oh ya, that's why. I'm afraid that for this country to be able to afford universal health care we are going to have to come to grips with the idea that "Every life is priceless." We're going to have to make the hard choices about quality of life vs. cost of care. We're going to have to put a price on a human life. Do we have the courage to do that?

WHERE THE HECK HAVE I BEEN?

2009-06-03T14:20:00.002-04:00

I have been MIA for the past week or so. I just wanted to let anyone know that nothing is wrong, I've just been helping "The Queen of the Frontier" get the new homestead into shape for the summer.

New posts are on the way. Lucky you.

THEY KEPT US SAFE

2009-05-20T16:44:00.002-04:00

Writing for The Daily Dish, Chris Bodenner quoting Zachary Roth of Talking Points Memo, looks at Chaney's speech from earlier today:

"Zachary Roth points out "the most radical argument" of Cheney's "extremely radical" speech. Cheney:

And when [our enemies] see the American government caught up in arguments about interrogations, or whether foreign terrorists have constitutional rights, they don't stand back in awe of our legal system and wonder whether they had misjudged us all along. Instead the terrorists see just what they were hoping for - our unity gone, our resolve shaken, our leaders distracted. In short, they see weakness and opportunity.

Rule of law and democratic debate, even years after the emergency of 9/11, are deemed weaknesses. Roth:

In other words, the very act of debating torture, or the process by which we try detainees, is encouraging terrorists to strike. The implication, of course, is that dissent of any kind is dangerous.

Then Bodenner offers up the zinger:

My translation of Cheney's speech: they hate us for our freedom, so let's just get rid of the freedom part and then we'll be safe.

Ya, that's pretty much the way it sounded to me. It was another part of the speech, though, that got under my skin. For what seems to be the millionth time, a spokesperson for the Bush administration trotted out "(We) kept us safe for 71/2 years." In this speech Chaney went even further. He outlined how the Clinton administration treated the 1993 World Trade Center bombing as a police matter and then we were hit at the Embassies in Africa, and the bombing of the Cole and so on. Then 9/11 happened and our heroes treated it as a reason to start two wars and...wait for it..."The homeland hasn't been hit again!" Did you catch the old switch-a-roo.

When it's the Clinton bunch, every time a terrorist struck, anywhere in the world, that counts against the Clinton policies. Even though the people who did the WTC bombing where caught, tried, convicted and are now serving their time right here in a prison in the good old USA, somehow Chaney and the other apologists for the Bush years can't see that Clinton kept us safe, here at home, from 1993 until 9/11/01. During Bush and Chaney's watch our forces have been attacked to the tune of over 4,200 dead and tens of thousands wounded. But no, we haven't been attacked here at home.

I'm really getting quite tired of these guys either thinking we're all too dumb to notice this stuff, or they believe it like the true believers they are. Some choice.

RAISING THE WHITE FLAG OF SURRENDER

2009-05-20T11:32:00.011-04:00

Here are some words that we heard a lot over the past eight years. It seems that some of us need to hear them some more.

Terrorism is a policy or ideology of violence intended to intimidate or cause terror for the purpose of exerting pressure on decision making by state bodies.

Terrorism is more commonly understood as an act which (1) is intended to create fear (terror).

A person who practices terrorism is a terrorist.

Terrified: To drive or impel by menacing: Scare.

So, now we find that the people who are the most bowel twisting terrified of captured terrorists that they're falling over each other to be the first to say, "don't send them here," are (mostly) Republican elected officials.

I'm speaking of course of the vocal pushback to the idea of housing Gitmo detainees in the good old USA. I touched on this in an earlier post entitled "THE ONLY THING WE HAVE TO FEAR...", but the apostles of NIMBY are getting particularly shrill of late. I wonder if any of them understand that their position, as Sarah Palin said during the campaign, "Waves the white flag of surrender?"

That's right folks. If you're so terrified of the detainees and their friends that you want to write a law to forever prevent them from being imprisoned on US soil then you have surrendered to the terrorists. You have given up and run off the field with your tail between your legs. I can't put in any more bluntly (well I could, but it wouldn't be fit for the children to hear) .

Theirs isn't a reasoned position based on how poorly we as a nation keep and house our prisoners. Since most of the folks who now have their hands waving over their heads are the same bunch that helped create the largest and most secure prison system in the world, they'd have a hard time making that claim. And they're not. They just sort of skip over that fact and get right to the whimpering about how putting these bad boys in our prisons will just make their buddies attack the prisons!? Yep. Last night on the news I heard Senator Inhofe (R - OK) say,

"The problem with that is they(the detainees) become magnets to terrorism…"

How the hell does he know that. Have any places that have housed detainees (you know like Naval Base brigs) been attacked? Ever? No, I'm sorry to say that Inhofe and all the others of like mind are just scared. The terrorists won. They're saying loud and clear "We'll change our behaviour, our laws, our way of doing justice, just please, please mister terrorist, don't terrorize us again." I, for one, find that attitude disgusting. And don't even get me started on the fact that the detainees are only suspected terrorists. Ya, they're so bad ass that we can't even try them like mass murderers or child molesters before we put them in prison for life. Oh no. I'm sure that if the option were open to him, Sen. Inhofe would gladly scream, "Off With Their Heads," at the top of his lungs. They're just sooo scary!

Update:

I just heard on CNN that the Dems voted to keep detainees out of the country. They are just as terrorized as the GOP. Disgusting!

EVER INCREASING PROFITS

2009-05-19T14:22:00.003-04:00

A post in naked capitalism: "Why Did Bankers Behave So Badly?" offer up the following:

The real question is why did management fail to do a better job of reining in the aggression of traders? The nature of traders has not changed since, say, the early 1980s; what changed is the willingness of management to rein them in. That fell due the the fact that the industry went from private partnerships with unlimited liability to public corporations. As long as what the traders did appeared †o be profitable, management benefited too, since larger trading desk profits also meant larger bonuses for the MDs overseeing them.

To chalk this up to simple "bad incentives" puts a Wizard of Oz-type veil over the problem The leadership of good firms did not take on risk and drive themselves into what would have been bankruptcy en mass (would even Goldman have made it without the Fed's various interventions, including all the special facilities and the interest rate cuts at critical moments? Doubtful). The "bad incentives" turn of phrase, while narrowly correct, does not put blame where blame was due. The industry's leadership designed the compensation schemes; they were not visited upon them by a mysterious outside force.

I think the most important part of the first paragraph is that part about industry moving from private partnerships to public corporations. In fact, this change, and the huge increases in the the number of people owning stocks through mutual funds, may be a major cause of most of the finance related problems we are now facing.

In the bygone past, say 30 years ago, the decision makers had large stakes in the companies they owned, brought years of experience to the table and understood that there are up times and down times and decisions had to be made to account for both. Now, while the decision makers may hold large stakes in the form of stocks and stock options, and while they may have lots of experience, they are subject to the unbelievably huge weight of the stockholder's will. Why unbelievably huge? Because the advent of the mutual fund and similar groupings and resales of financial instruments has created tens of millions of new and inexperienced stockholders. It has also created layer upon layer of brokers and fund managers and firms, all of whom are looking for not just a profit but a profit the gets bigger each year.

So how did this change in ownership contribute to our current financial mess? The decision makers stopped doing what was right for the company and started doing what was right for the stockholders. I know, that sounds like nonsense. Aren't both interests the same? Well no, they aren't.

The new and greatly expanded population of stockholders, as stated above, want their ever increasing profits from a mass of companies. They may, and do, own only fractional shares of actual companies. And those companies are constantly changing as the fund managers seek to maximize the funds profits. The best interests of each individual company may not always be maximum profit in this quarter or the next. Maybe a slowing of growth is needed to allow supply chains to catch up to sales is the best thing to do. But, since the company decision makers measure their success by how well the stock is doing on a day to day basis, they start to make decisions that are both short term and short sighted. They don't slow down to allow the catch up. They don't want Wall Street to start having doubts. They zig when maybe they should zag, all the time driven by the stock ticker. They begin to take greater and ever greater risks. The result, price bubbles and the eventual bursting of those bubbles.

As I see it, this problem is systemic. It is a part of our basic economy now and effects most industries to a greater or lesser degree. Look at drug companies, for example. They put their R & D money into developing high profit drugs that can be sold to the largest number of people. They spend millions on directly advertising those drugs to the end users, even though those end users can't buy the product without a prescription. One result is the Bush era Prescription Drug benefit, which by itself, could lead to the country going broke in the next 15 or 20 years. The drug companies aren't going to make much money in that future, but hey, the stockholders will do great in the short term.

Or take a national franchise like McDonalds. The decision makers will send down to the franchisees a new sandwich that has a high cost to make, in either labor, raw materials or both, because Wall Street will look kindly upon MCD stock and the stock price will go up. Never mind that franchisees will suffer loses that could result in restaurants being closed and thus lower the number of units sending money up to the company in the long run. The stockholders (that is the fund managers and brokers) don't look at the long term.

What's the bottom line, then? I don't know if the mutual fund/mass ownership genie can be stuffed back in the bottle. I do know that the bailouts already done, in process, and yet to come seem to address the problem from the top down, thus continuing to feed the appetite for more and bigger profits at the expense of long term corporate health. But what do I know. I'm just a curmudgeon with a blog.