Tuesday, September 30, 2008

I'm not sending an incumbent Democrat to DC.

Why I can not and will not vote to send an incumbent Democrat back to Washington this year. The last few years, the only approval numbers that were consistently lower than President Bush's numbers, are those of the Democrat controlled Congress.
There are a lot of issues facing America right now that need to be dealt with and I can not vote to put a man in the white house who has refused to deal with them while he has been in the Senate. One of these issues is Social Security.
Say what you will about President Bush, because you will anyway and most of it will just be mash rhetoric that is primarily unfactual and extremely vitriol, but President George W Bush has tried to tackle a good number of the issues facing our Nation, and the Democrats have refused to come to the table. One of these issues was Social Security. President Bush raised the issue of fixing Social Security so that it does not bankrupt the nation. He asked both sides to put forth ideas. For decades the Democrats have been railing about how Social Security is going bankrupt and needs to be fixed. Here was their chance. The Republican President is willing to play ball. Did the Democrats seize the opportunity? No. Not in the least. There were several ideas/plans proposed. Were any of them from the Democrats? NO! NOT EVEN ONE! Instead all they did was complain about the plans that were proposed. Here was their opportunity to accomplish one of their priorities, and they wouldn't even, in fact refused, to show up. Strike 1.
Next let's talk about education. We all know that America desperately needs to do something with our education system. Our ranking has been falling globally for years. We are headed into an information economy where an exceptional education is a must for every American, we need to step up the level of education our kids are getting and yet, and nothing is being done to turn up the heat. President Bush and, oh yeah did you forget Sen. Ted Kennedy put forth the 'No Child Left Behind' initiative. If you listen to just about anyone they will tell you what a disaster it is, and they will blame the disaster on President Bush and the Republicans. Yet has there been one single proposal from the Democrats? Nope. Do they ever even mention that they had a hand in it? If there was something so blatantly wrong, they should have worked to fix it when they were sponsoring it. Instead they want to blame President Bush and those terrible Republicans rather than take responsibility and actually do something constructive. Strike 2.
One of the next big issues is health care. The democrats have had control of congress for some time now. That means they set the agenda. They decide what bills get slated, what bills get heard, and what bills get voted on. Have we seen any bills on health care, or prescription drugs? Nope. Have we seen or heard anyone proposing to fight to protect the drug patents for American drug companies, so that their drugs aren't stolen and manufactured in other countries. This prevents these companies from recouping their investment in the research, development and testing of their drugs. When other countries don't honor patents that means that the companies have to charge higher prices here, where the patent is honored, so that they can continue to do business. Have you heard any democrats... excuse me. Have you seen any Democrats do anything about these issues? No? Me neither. Strike 3.
Not that I want to seem tough on crime, but I do want to seem tough on politicians. I believe we elect our representatives to go to Washington to work on these and other issues facing America, not to work on getting re-elected. If we send them to Washington to accomplish something, and they don't do anything, then I quote someone, "Vote the bums out!"

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Monday, September 29, 2008

The Oxford Debate

At the conclusion of the first presidential debate I thought – “What a colossal waste of time.”

The talking heads reminded me later that not everyone has been watching these two men for the last 19 months. For them, this may have been a refreshing and delightful evening of television. They were the fortunate ones. The talking heads also told me that this was an amazingly cerebral debate compared to most and for that reason there weren’t any memorable moments. I suppose that it was issue oriented, but cerebral…I think not. It was what debate has become – a performance. In this instance, a boring performance with more stump speech excerpts than true thoughtfulness. Anyone that watched either party convention learned nothing interesting or useful during the debate.

For my part, the first debate was actually the first time I’ve started to tune out of the presidential race. It has become an agony to watch the daily news unfolding. All those many months ago I thought that the two men left running for president were different from the rest. John McCain had spent years making up his own mind about things; some may argue that it was an impulsive and inconsistent mind, but when he told the Jerry Falwell followers that they could all go to hell my heart warmed. Barack Obama had risen rapidly with a willingness to speak truth to hostile audiences and in his case, embrace religion rather than deride it. I thought to myself – either of these men would be a nice improvement.

Not so much anymore. My love affair with John McCain ended last summer. He embraced the right wing of his party trying to persuade those he needed most to win the nomination. As he stood on the stage of Jerry Falwell’s college I started shopping for a new candidate. In the face of no better options I stuck with him. Meanwhile, I’ve always liked Barack Obama because I’ve always liked a good speech. I’m a sucker for a good speech. As Obama started piling up primary wins I kept anticipating the next victory speech. Politically, I should have been behind Clinton, but I kept thinking maybe all this hope and change brouhaha was for real…maybe, just maybe. Turns out it wasn’t, not really. Obama turned out to be an exceptionally good politician surrounded by the same old politicians that have been lurking around Washington since Bill Clinton took office.

As the debate unfolded, whatever excitement had returned by the end of the primaries had been replaced by anguish over watching the tit for tat back and forth of modern, daily campaigning. What lobbyist worked for whom? What surrogate said what? What sort of terrorists in Iran? Lipstick on a pig? God help us and god help America! By the end of the debate I was having trouble finding the enthusiasm to vote for either candidate.

It’s hard to vote for a man that can’t answer a simple question. Neither man wanted to answer the first question – do you support the current bailout plan? In their first try they spent two minutes apiece regurgitating their economic stump speech. When Jim Lehrer asked again, he got more of the same. When he asked one more time, he received grudging and vague support. It took nine minutes to answer a yes/no question. Why couldn’t either man say, “Yes, I support the bailout. I have reservations, but it is necessary for the following reasons…” Why couldn’t they? Because thoughtfulness has been stripped from politics. Why confuse people with thought and reason when they can be so easily dazzled with smoke and mirrors.

It’s hard to vote for a man that cannot say, “I was wrong.” We are all wrong sometimes. John McCain was wrong about Saddam Hussein’s capability to develop and distribute weapons. Barack Obama was wrong about the surge. I waited for Obama to say, “John, I was wrong about the surge. I didn’t think it would work and didn’t think it was worth the risk. I’m happy to be wrong about that. I wanted to take a different path and none of us here can say whether it would have been better. But John, you were wrong about parts of this too. Being right about one thing and being wrong about all the rest does not demonstrate good judgment. It demonstrates good timing.” At any time McCain could have said, “Senator Obama, I was wrong about weapons of mass destruction. I thought Iraq was further along and a more eminent threat than they proved to be. That doesn’t change my continuing conviction that liberating Iraq was the right decision. Hussein was a dictator. Hussein was a killer. Eventually, we would not be able to contain him. To say that we shouldn’t have gone to war at all because of a mismanagement of the military strategy by George Bush demonstrates a lack of understanding in how the world really works.”

It’s hard to vote for a man that can’t be honest about the political realities we face. After being repeatedly asked by Jim Lehrer whether any adjustments would need to be made to their plans when elected president in light of the financial meltdown neither wanted to give up anything. John McCain finally suggested a spending freeze. Sounds good. Barack Obama finally conceded that yes, of course, some things just couldn’t happen, but obviously we’d need to cut taxes. John McCain agreed. Obviously. We always need tax cuts. All problems can be solved with tax cuts. How about either one of these guys tell me the truth – no tax cuts, no Social Security when I retire and no way we come out of this financial crisis without a recession and complete realignment of the economy? I suppose that’s asking too much.

Then again, maybe it’s me. Maybe it’s us. Maybe we are asking too much of the presidency. We want our presidents to be something unreal. We want them to be all things to all people. We want them down-home and ordinary, but the smartest kid in the class. We want them to be funny, but inoffensive. We want them to be perfect people, but flawed. We want specifics and details, but in no larger chunk of time than a television commercial. We want candidates that are above the fray, but willing to draw blood in a fight.

We seek inspiration where none can be found. We seek answers where none are offered. We seek guidance from a steady hand when one is not extended. This is our own fault. Our candidates reflect the worst in us because at we don’t care so much what our candidates say as long as they make us feel good about ourselves.

For ninety minutes, the two men running for president did everything they could to make us feel good about voting for them and feel foolish for voting for the other guy. That just doesn’t work for me.

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Monday, September 22, 2008

Bail? What happend to spending a night in jail?

Well, I couldn’t agree more, as much as I enjoy disagreeing and have a good debate. I just don’t quite see the need for a government bailout. The sensible banks, that loan money when it makes sense, are still doing well. While they may see a bit of a slow down for a time, these banks will not only survive this, but become stronger as the weak behemoth banks fall on the wayside. People will still have their jobs. They will still make their payments. They will still buy bread, and they will still pay for their cable.

Oh yes, there will be many that lose their jobs over this, and they may not find jobs in their chosen field right away, or ever. So what, There are millions of people working in fields they never dreamed of being in. For good or bad, they are doing it. They have said that this generation will work in 6 or 7 industries during their lifetime. Now they have one more down. The thing about Americans is that we survive. We thrive. For two hundred years we’ve met every challenge and come out stronger than before. To quote President Bill Clinton from a recent visit to the David Letterman show, “for two hundred years, everyone that has bet against America has lost.”

Investing and lending is a matter of risk. Every broker has heard at least a thousand times, there is risk in the market. Every investor should already know that their investments are at risk. Sometimes you win, today… you lose. There is a bull fighting adage I’ve heard, “Sometimes, the bull does not always lose.” Today the bullfighter loses. They should have seen it coming.

For years we’ve been hearing about the collapse of the housing market. Financial analysts said there would be a correction, translated ‘crash’, in the housing market. Did these big banks make any efforts to rebalance their books? Did they recognize that their investments were inflated time bombs and try to defuse them? If they have we’ve not yet heard about it. They had to see this coming for months or even years. Yet what did they do about it? Nothing that I’m aware of.

So how did these loans get made? Let’s take a moment and look at how this happened.

One loan at a time. Mortgage loan officers weren’t making loan decisions based on the customer’s ability to pay back the loan; they were make the loans based on whether or not they could sell the loans to someone else. Only they didn’t have to sell the individual loans, they loans were clumped together and sold in groups. This eliminated the responsibility of making a bad loan by preventing the buyers of these groups of loans from analyzing the quality of the loans individually. Throw in a few really good loans in with a batch of not so good loans, and the numbers as a whole look ok. It’s like the old hamburger trick. When hamburger has been sitting in the cooler for a couple of days and starts turning brown, the butcher will wrap it in some new hamburger and repackage it and people will think the whole lot is fresh. What happens to personal responsibility? It is gone.

The sad part of this is that the people who will inevitably pay if the government does not come through with a bail out are the baby boomers. They are the ones whose entire life savings is wrapped up in the markets and mutual funds. These “investments” take a dive and all of the sudden Wal-mart has a few thousand or million door greeters. Not that I’m cynical. But if the investment you planned on living off of is suddenly gone, you still have to eat, so out the door looking for a job you go.

Unfortunately, they’ve been told for years that they should put their money into the market in the form of a mutual fund of sorts. Not in particular, just put your money in the hands of someone you don’t even know the name of, and let them do what’s best for you. Removing you from the responsibility for your financial future, and leaving the guy who manages the fund without responsibility as well. Everyone is void of personally being responsible. If he performs too poorly he gets sacked, takes his paycheck and finds another fund to manage, while your money disappears with out a trace.

Yeah, that’s it. That’s the ticket. You give me your money. We’ll put it in a basket. You can pick which one. Then we’ll stand back and see what happens. What happens is some guy opens a hidden hole in the basket pulls all the money out while you are sent to get a cotton candy, and when you get back you find all your money is gone. "So sorry. Bad luck chap you picked the wrong basket. Care to take another stab at it? Just put the rest of your money in these baskets, and shake them all up. We’ll see if you can do better this time.” BAH! The chips are stacked against you, the game is rigged. The Carny always wins. The Barker knows that, but he’s not about to let you in on it, because he gets a cut of the take. Millions can’t see this coming and that is why there have been carnivals for centuries. The Carny always walks away with the money. If not they wouldn’t eat and they’d all die off.

To me this seems like a chapter out of a bad Ayn Rand novel. One that never got published. The bureaucrats have created a mess of the economy, using government money, so that they would have a reason to step in with more government money and take control. They make government backed/guaranteed home loans that make no sense. (Not even the mafia would make a loan like these.) Why would you make a loan that you can’t collect on? You wouldn’t unless there was some strategy behind it.

What is severely lacking here is personal responsibility. The people cry out for help, and instead of holding people responsible and letting them pay for their own bad decisions, the government will step in and take more control in the name of saving it’s people. It will further separate the rich from the poor, by taking a few of the rich and making them poor, as an example, and then taking the rest of the cost from the poor making their living situation even worse, all the while blaming the wealthy for the problems.

The main plot of Rand is that the Socialists running the government set out to make things go so bad for the poor that they cry out for help. Then they pit the poor against the rich, blaming the rich for the terrible circumstances and finally seize the assets of the rich in the name of helping the poor. What Ayn argues is that in doing so, they take away the very thing that will save the people. Thus the collapse of Capitalism and the rise of the new Socialist order. Everyone is happy, or miserable as it turns out, and the Elite few rule the world.

The problem I see here is that of a lack of personal responsibility. It is a parent paying the fine for the child. They child doesn’t have to pay for their misdeeds and therefore never learns the lesson. They are removed from personal responsibility, eventually they fail to believe that there are consequences for their actions.

It used to be that you could count on the Republican Party to be the party that advocated Personal Responsibility. Are they standing up for it now? NOPE. They are right in there singing the same songs as the Democrats, offering to Bail everyone out. I say let all of the bankers, mortgage lenders, stock brokers and stupid investors spend the night in jail. Make them roll doubles before they can get out and pass Go to get their $200.

Finally, since this is the season of Presidential Candidates, I would like to say something to all of you who think McCain is a Republican, You are a fool. He’s more of a socialist than President George W Bush. President Bush has done more for socialist causes than the last five Presidents. The problem for the Republicans is that McCain IS a renegade, and that’s why people like him. They like him because he isn’t beholden to any political party. In fact the Republican Party is beholden to him. If he fails, they lose miserably. If he wins they still lose. They lose; because he will negotiate a deal that he likes which will be two shades bluer than they can stand.

The good news is that he is a Renegade who gets things done. He crosses party lines. He puts together proposals and ropes both sides into agreeing to it, even though they don’t want to. The problem for both parties is that John McCain will hold everyone’s toes to the fire. I heard a recent quote, “If your toes are all that he is holding to the fire, you’re doing good.” He will tackle problems. I expect that if John McCain is the next president, you will see the return of the Bully pulpit. And if he is successful, we will see at least progress toward our problems if not resolution to some of them.

If you are an independent thinker, then I believe John McCain is your candidate. If you are a conservative, you are out of this race. We’ll see you again in four years. If you are a Socialist, who doesn’t want to see any progress on the issues that are really facing our country, but want your Party in power, then Barack Obama is your man.

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Sunday, September 21, 2008

The Bailout

There is a staggering amount of economics that I don't know or understand. This has not stopped our president, the candidates for his job or the bulk of Congress from commenting on the current "financial crisis" so I won't let it stop me either.

Here's what I do know: $700 billion is a lot of money, the government doesn't have that much money and no one is quite sure whether it is enough money or will, in fact, do any good in the long term. The other thing I know: I don't like any of it at all.

The universal cry is that the free market doesn't work. That's odd...it was working until a couple weeks ago. It had worked with only a couple episodes for most of the history of this country. It propelled us to world dominance by the end of the last century. It made more millionaires than any other economy, created the highest gross domestic product, per capita income and overall general wealth of any economy in any country in the history of the world. Yet, it doesn't work. What am I missing?

On the contrary, what doesn't work is getting in the way of the free market punishing people for overextending their credit in the name of greed. What doesn't work is stepping in the way of the free market correcting a long overdue imbalance.

I have a few random thoughts on this whole thing. A Republican, free market loving, administration is essentially nationalizing the financial system. What? To give them credit, the plan they have proposed puts all the power into one man with essentially no legislative oversight or accountability. Meanwhile, the Democrats, always first to point out income and wealth inequality, should be rejoicing over the biggest slap in the face to the wealthy elites that could possibly occur, but instead they are happy to socialize banking to protect the wealthy they so hate. I suppose it's any obvious choice - socialize no matter the consequence because we'll all be better off with the government doing everything for us.

The financial collapse will eventually affect my family, but not that much. The food prices and gas prices have done more significant damage than any unemployment or wage stagnation resulting from corporate America not having easy credit. My family doesn't invest in mortgage equities - we don't even know what mortgage equities are. Also, I didn't buy a house in Southern California when prices were at their highest. You know way? I couldn't afford it. Neither could most everyone else, but that didn't stop them. Lesson learned.

It would seem I don't have sympathy. I don't. I think the market is about risk and those not bright enough to deal in that risk shouldn't. Those that are bright enough, but get blinded by greed and power should pay the price.

It may also seem that I don't fully comprehend the catastrophe inherent in letting the market correct itself. Probably I don't. My instinct tells me that the government bailout only delays the inevitable. Most of this problem derives from the collapse in house values and even though here in Southern California prices have dropped 35% in the last two years that means a median price of $350,000 and guess what, most of the people I know still can't afford that mortgage payment. People were making bundles of money off people that couldn't afford mortgages. Now they are losing it. Good. That's how a free market works. It giveth and it taketh away.

The government should keep my money out of it. I'm making my payments. I was bright enough not to take out a loan I couldn't afford. I've been stingy with my money and judicious in my debt. Now I get to help pay for everyone who wasn't. Government should exist for protecting my rights, not bailing out people who should have known better.

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