President Obama continues to sound the alarm. "Irreversible situation", "worst economy since the Great Depression", "catastrophe" awaits, etc...is the President's approach to halting unemployment, foreclosures, and contracting GDP.
Congenially the President held his first news conference. He said that some, meaning Republicans, "want to do nothing". Doing nothing, according to the President is not an option.
The $820 billion stimulus plan is "not perfect" the President opines. But we must forego perfection to avoid "catastrophe".
The President's dire language may compel Americans to trust him as Americans trusted Bush and Paulson's secret $700 billion TARP give-away plan intended to stablize the financial sector and the American economy. It did neither. Bad banks are still bad banks and not loaning money. Credit remains touch and go. Housing has continued its downward climb. Even while Obama's American Recovery Plan is being shoved down the throats of citizens, Americans are not privy to the allocation of the initial $350 billion of TARP I. Which banks received how much funding? The public, Treasury Secretary Paulson said, was not allowed to know for fear of the public producing a run on the bad banks in question.
Even more mesmerizing is that Elizabeth Warren, the chairperson of the Congressional Oversight Panel in charge of monitoring TARP bailout funds, delivered some stunning news. In crunching the figures of the initial TARP I cash injection by Paulson, she found that the government had injected $78 billion toward bailouts that had been lost. Where did the money go? Apparently, it' s too difficult to track.
How do you lose track of $78 billion? Lose a wallet, keys, notebooks, etc...are understandable. But lose a pot of money the equivalent size of the GDP of dozens of nations around the world?
The "Gong Show" continues. President Obama has stated on several occasions, as if American's still aren't sure: "I won the election". The President's insinuation is that Americans are expected to accept the looting of their treasury under the guise of saving Americans from apocalyptic Armageddon.
So times are bad. But they aren't the days of the Hoover Hotels, long soup lines, and the Dust Bowl. The majority of banks are solvent versus 1/3rd of the banks going under in the 1930's. About 93% of Americans continue to be employed. About 94% of Americans with home mortgages are making their payments. For the lower end of the pay scale, free health care, free education, free job training, several months of unemployment benefits, free food stamps, free or reduced housing, free children's healthcare insurance, etc...have made the poverty line of families the equal of the American family in the 1960's as a measure of wealth.
And President Obama is reduced to fear mongering language to compel Congressional passage of a poorly constructed spending plan?
Contrary to President Obama's mesasge, the CBO (Congressional Budget Office) has concluded that the American Recovery Act written as it is will actually be more harmful than actually doing nothing.
"We must do something" is no rational reason for propping up the same-old failed policies that FDR and LBJ so coveted as President. After eight years as President, Morgenthou being FDR's Treasury Secretary stated:
"We have tried spending money. We are spending more than we have ever spent before and it does not work ... After eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"
The Harvard Review President should be wise enough to learn history's lessons if he would dare open his eyes to their truths. Spending the people's money with reckless abandom is folly beyond measure. Slashing government spending and sending the people's money back to them in the form of tax cuts and business incentives is the wiser course of action.
No one man will destroy this great nation with a set of impoverished policies. The spirit of the people is too great.
But the impoverished policies of this administration draw us near to the immortal words of Thomas Jefferson. A generation who willfully incurs debts for the next generation to pay is an "immoral" generation.
Tuesday, February 10, 2009
President Obama's Bottom Line
This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," " said President Obama while stumping for his $820 billion stimulus package.
It will be "a catastrophe" are the words of our President concerning the Congressional bill if it does not pass.
"We are enduring the worst economy since the Great Depression" states President Obama before the television cameras.
Nearly 600,000 thousand jobs were lost last month, unemployment is at 7%, and the stock market had its worst January showing down 8% ever. These figures make President Obama's appeal for decisive and immediate action much more compelling.
But is not accuracy not more important than speed? After all, Treasury Paulson determined that $700 billion was necessary to avert financial Armageddon. The first half went secretly into the pockets of big banks. Stock prices have sunk even afterwards while unemployment continues it's climb. Credit markets have eased a bit. But confidence, lending, and business sentiment have tightened ever since.
According to President Obama, government is the only solution to the marketplace turmoil. With the "failed policies of tax cuts in the past eight years", the President wonders why he should consider these "old worn out arguments of more tax cuts" during an impending crisis in which he was elected to fix.
Americans elected President Obama to four years based upon his his "change that you can believe in" policies. He should govern as he sees fit. But the President shoudn't be pulling the wool over the people's eyes with less than truthful remarks.
This is a weak economy that is getting weaker. However, 10% unemploymnet marked the days of 1981 with 21% interest rates. During 1973-1974 high unemployment and stagflation ensued eating people's savings and earnings.
The way out of this period were structural tax rate deductions. Personal income tax rates were revised downward from 70% to 28%. Capital gains tax rates were reduced as well. The greatest peace time expansion for 11 years ensued. JFK understood capital friendly policies in 1961 and passed a stimulus bill reducing taxes thereby spurring economic growth during the 1960's. Warren Harding and Calvin Coolidge separately reduced marginal tax rates in the 1920's giving America a 7% GNP growth rate toward the longest peace time expansion in U.S. history.
President Obama should understand that tax cuts alone have worked in the recessions of the past. But government spending has been detrimental to the growth of economic development over the long-term. The liberal Democrats of the 1960's promised a panancea ushered in by the "Great Society" spending that was forthcoming. But the spending led to inflation in the 1970's and stagnant growth in private industry.
Democrats aren't interested in what works. Tax cuts have worked. History has vindicated this position. It's the spending that reigns out of control and has caused all sorts of problems. In the last 40 yeasrs Congress has imposed an undue burden upon the people witht the egregious and outlandish spending habits since the days of LBJ.
President Obama's potion to magically hike tax rates is intended to:
Balance the budget, spur economic growth, add jobs, halt foreclosures, create a green economy, provide universal health care coverage, and expand welfare coverage.
Indeed, he is either the Messiah and subject to no laws of which men are subject to. Or he is a traveling evangelist with a phony message to which 60 million plus voters were duped into believing.
It will be "a catastrophe" are the words of our President concerning the Congressional bill if it does not pass.
"We are enduring the worst economy since the Great Depression" states President Obama before the television cameras.
Nearly 600,000 thousand jobs were lost last month, unemployment is at 7%, and the stock market had its worst January showing down 8% ever. These figures make President Obama's appeal for decisive and immediate action much more compelling.
But is not accuracy not more important than speed? After all, Treasury Paulson determined that $700 billion was necessary to avert financial Armageddon. The first half went secretly into the pockets of big banks. Stock prices have sunk even afterwards while unemployment continues it's climb. Credit markets have eased a bit. But confidence, lending, and business sentiment have tightened ever since.
According to President Obama, government is the only solution to the marketplace turmoil. With the "failed policies of tax cuts in the past eight years", the President wonders why he should consider these "old worn out arguments of more tax cuts" during an impending crisis in which he was elected to fix.
Americans elected President Obama to four years based upon his his "change that you can believe in" policies. He should govern as he sees fit. But the President shoudn't be pulling the wool over the people's eyes with less than truthful remarks.
This is a weak economy that is getting weaker. However, 10% unemploymnet marked the days of 1981 with 21% interest rates. During 1973-1974 high unemployment and stagflation ensued eating people's savings and earnings.
The way out of this period were structural tax rate deductions. Personal income tax rates were revised downward from 70% to 28%. Capital gains tax rates were reduced as well. The greatest peace time expansion for 11 years ensued. JFK understood capital friendly policies in 1961 and passed a stimulus bill reducing taxes thereby spurring economic growth during the 1960's. Warren Harding and Calvin Coolidge separately reduced marginal tax rates in the 1920's giving America a 7% GNP growth rate toward the longest peace time expansion in U.S. history.
President Obama should understand that tax cuts alone have worked in the recessions of the past. But government spending has been detrimental to the growth of economic development over the long-term. The liberal Democrats of the 1960's promised a panancea ushered in by the "Great Society" spending that was forthcoming. But the spending led to inflation in the 1970's and stagnant growth in private industry.
Democrats aren't interested in what works. Tax cuts have worked. History has vindicated this position. It's the spending that reigns out of control and has caused all sorts of problems. In the last 40 yeasrs Congress has imposed an undue burden upon the people witht the egregious and outlandish spending habits since the days of LBJ.
President Obama's potion to magically hike tax rates is intended to:
Balance the budget, spur economic growth, add jobs, halt foreclosures, create a green economy, provide universal health care coverage, and expand welfare coverage.
Indeed, he is either the Messiah and subject to no laws of which men are subject to. Or he is a traveling evangelist with a phony message to which 60 million plus voters were duped into believing.
Wednesday, January 21, 2009
Operation Alinsky
What should we expect from President Barak Obama now that he is President?
The tingly words of "change you can believe in" will spearhead the promised social revolution in America. Alinsky promised the model would work. President Obama promises to work the model.
Americans would never buy the Alinsky message if the message was spelled out clearly: social revolution, wealth redistribution, tearing down the system of power, etc....But the Alinsky model goes undected before the masses and media in speech after speech. The code words that rile average Americans into action duping them into the frenzy of voting for social revolution is nothing short of masterful manipulation.
If the messenger is charismatic enough, the masses will hang on each of his words as he embraces their frustrations (food on the table, help with kids, programs to lighten the burden). He will affirm their struggle for "economic justice", "social justice", and righting the wrongs that have placed us in dire circumstances. He will tell them that they have been victimized and that they need help. The messenger will win their trust to overtake the unnamed Goliaths in the capitalist system that have exploited the people. The Alinsky disciple stirs up the beckoning cry of the masses to march, join, unify in a romantic revolution against the oppressors of average Americans trying to feed their families. The Alinsky disciple must make sure that the masses see him sybolically as their pure sacrificial messsenger who is destined by fate to embrace the people's struggle for independence against the constraints and shackles of those who are holding them back.
Even of Republicans, President Elect Obama has affirmed and quoted their all-time hero, Ronald Reagan in talking about the America we live in. How confusing? President Obama has received, accepted, embraced, listened, empathized, and befriended bigwig conservative columnists like George Will, Larry Kudlow, Peggy Noonan, and Nina Easton. How confusing? The goal is to little by little, tear the opposition's defenses down. Two hours at dinner secluded in George Will's home, the effervescent President-elect listened and pretended to learn what social and economic conservatives wanted. Will not a couple of hours listening to Republicans soften the print articles, news columns, and television interviews that were bound to be lobbed against him?
President Obama will embrace even the political enemy with calm assurance, poise, and a smile seeking their partnership to forward his agenda. There will be no rantings. There will be no vindictive retributions in the public eye. This is not the way of Alinsky- or is it?
Third, promise the masses what they want to hear. "Change that you can believe in" is apparently lofty enough to win hearts and minds. About 200,000 Berliners fell in love with the rapture of Obama. Alinsky's methods always means telling the people that they are in trouble; but that hope is on the way. You tell the masses that they need help. And in Senator Obama's case, "Government is the only solution" to their problems. With him, they have a promise of hope. "We will lead again!"
Fourthly, once in power, deliver to the masses the new plans for their lives. The people aren't wise enough to decide what is good for them. They neeed "their brother's keeper" who will make sure from Washington that they have food, leisure time, transportation, health care, mandated jobs, government funded pensions, etc...Alinsky's disciple, who organized them, will make sure that government will do its part from cradle to grave caring for the people that should be caring for themselves. Who else could do this except the on who organized them, promises them hope, and identifies with their pain?
It was the revolutionary, Alinsky, who believed that "an intermediate end for radicals should be democracy because of its relative ease to work within to achieve other ends of social justice.
Democracy is not good enough in the grand scheme of social revolution. It is merely a stepping stone to more utopian days when citizens don't have to worry about elections and democracy.
The Bolsheviks promised bread for the Russian masses and an end to war upon storming the Kremlin and taking power. We got the Soviets. Mao promised "The Great Leap Forward" in 1957 with collectivist policies that starved 20 million Chinese citizens. William Pitt, Prime Minister of England in 1796, promised England's poor the keys to the treasury for easing the plight of poverty resulting in the creation of even more poverty. Post WWII Europe's turn toward socialist policies floundered for forty years until Margaret Thatcher unleashed economic incentives with the rest of Europe following suit. The result were the citizens creating unparalleled wealth.
Will President Obama's "Government is the only solution" and "America is in trouble" work? He may have mesmerized the masses and won the White House with Alinsky's methods, but there is going to be an awful mess when the citizens awake from the hypnosis of "change that you can believe in."
Even so, because of Senator Obama's masterful oratory and wordsmith savvy, he awed crowds with his incantations and vocabulary blinding the many about the realities of his federal economic plans for America.
President Obama will begin re-shaping America through a slight of hand proposition. The economy needs stimulus. So why not designate specific funds toward newly formed government programs? Will these government mandated programs be eliminated upon their one time designation? It won't be likely.
President Obama's incremental approach will be "death by a thousand cuts", not a bazooka. A little money for this program and that program to stimulate the populous multiplied hundreds of times over will show government to be "the Great Leviathan".
Look no further than the 1971 revolutionary and community organizer Saul Alinsky's training manuals that so captured Barak Obama's attention as a neighborhood organizer. Alinsky's modus operandi, as a socialist, was to:
- co-opt the language of the masses
- affirm the masses of their plight
- promises the masses change they can believe in is forthcoming
- deliver to the masses new plans for their life
Alinsky said, " The Prince was written by Machiavelli for the Haves on how to hold power. Rules for Radicals is written for the Have-Nots on how to take it away"
Alinsky continues:
"Any revolutionary change must be preceded by a passive, affirmative, non-challenging attitude toward change among the mass of our people. They must feel so frustrated, so defeated, so lost, so futureless in the prevailing system that they are willing to let go of the past and change the future. This acceptance is the reformation essential to any revolution. To bring on this reformation requires that the organizer work inside the system, among not only the middle class but the 40 per cent of American families"
Barak Obama actually taught the Alinsky methods and tactics dozens of times to local Chicago neighborhoods just as Alinsky had himself organized the now famous "Back of the Yards" Chicago neighborhood.
How well has Senator Obama now President Obama employed the tactics in "organizing for mass power"?
Using the strategies above, the masses were to be infiltrated and won over. Standing firmly on principle is by far the most damaging of ideas to Alinsky. President Obama was tutored well. He has masked true intentions with fairy tale words that promise undefined change. What a perfect model for winning votes and not alienating the public?
How crafty will President Obama be in the days to come?
First, he must co-opt the language of Republicans. "Tax cuts", "unity", "economic growth", "creating jobs", etc...may be the heart of the Republican economic message. But now, Alinsky's disciple, will employ these words and phrases to insidiously comandeer Republicans.
The goal is to re-define the meaning of conservative language. Tax cuts will now mean providing welfare checks to people who didn't make any money. Economic growth means "economic justice"- taking from wealth creaters and giving to unproductive citizens. Creating 4 million jobs means fabricating government mandated jobs by paying $216,000 per job picking for picking up litter, refurbishing government windows, creating new windmills, etc...
Secondly, Senator Obama will affirm the plight of the masses. Operation Alinsky always requires embracing your enemy, not confronting your enemy. We will affirm all. We will receive all. We will accept; not reject. The Alinsky disciple will follow the revolutionary model befriending and embracing all citizens. The goal is to unify the sheep who feel lost in the American pligth. The fateful night that Senator Obama was thrust onto the American stage in 2004, the Senator raptured Americans into unity by saying, "We are not divided as red states and blue states. We are the United States....we are not Republicans and Democrats....we are Americans."The tingly words of "change you can believe in" will spearhead the promised social revolution in America. Alinsky promised the model would work. President Obama promises to work the model.
Americans would never buy the Alinsky message if the message was spelled out clearly: social revolution, wealth redistribution, tearing down the system of power, etc....But the Alinsky model goes undected before the masses and media in speech after speech. The code words that rile average Americans into action duping them into the frenzy of voting for social revolution is nothing short of masterful manipulation.
If the messenger is charismatic enough, the masses will hang on each of his words as he embraces their frustrations (food on the table, help with kids, programs to lighten the burden). He will affirm their struggle for "economic justice", "social justice", and righting the wrongs that have placed us in dire circumstances. He will tell them that they have been victimized and that they need help. The messenger will win their trust to overtake the unnamed Goliaths in the capitalist system that have exploited the people. The Alinsky disciple stirs up the beckoning cry of the masses to march, join, unify in a romantic revolution against the oppressors of average Americans trying to feed their families. The Alinsky disciple must make sure that the masses see him sybolically as their pure sacrificial messsenger who is destined by fate to embrace the people's struggle for independence against the constraints and shackles of those who are holding them back.
Even of Republicans, President Elect Obama has affirmed and quoted their all-time hero, Ronald Reagan in talking about the America we live in. How confusing? President Obama has received, accepted, embraced, listened, empathized, and befriended bigwig conservative columnists like George Will, Larry Kudlow, Peggy Noonan, and Nina Easton. How confusing? The goal is to little by little, tear the opposition's defenses down. Two hours at dinner secluded in George Will's home, the effervescent President-elect listened and pretended to learn what social and economic conservatives wanted. Will not a couple of hours listening to Republicans soften the print articles, news columns, and television interviews that were bound to be lobbed against him?
President Obama will embrace even the political enemy with calm assurance, poise, and a smile seeking their partnership to forward his agenda. There will be no rantings. There will be no vindictive retributions in the public eye. This is not the way of Alinsky- or is it?
Third, promise the masses what they want to hear. "Change that you can believe in" is apparently lofty enough to win hearts and minds. About 200,000 Berliners fell in love with the rapture of Obama. Alinsky's methods always means telling the people that they are in trouble; but that hope is on the way. You tell the masses that they need help. And in Senator Obama's case, "Government is the only solution" to their problems. With him, they have a promise of hope. "We will lead again!"
Fourthly, once in power, deliver to the masses the new plans for their lives. The people aren't wise enough to decide what is good for them. They neeed "their brother's keeper" who will make sure from Washington that they have food, leisure time, transportation, health care, mandated jobs, government funded pensions, etc...Alinsky's disciple, who organized them, will make sure that government will do its part from cradle to grave caring for the people that should be caring for themselves. Who else could do this except the on who organized them, promises them hope, and identifies with their pain?
It was the revolutionary, Alinsky, who believed that "an intermediate end for radicals should be democracy because of its relative ease to work within to achieve other ends of social justice.
Democracy is not good enough in the grand scheme of social revolution. It is merely a stepping stone to more utopian days when citizens don't have to worry about elections and democracy.
The Bolsheviks promised bread for the Russian masses and an end to war upon storming the Kremlin and taking power. We got the Soviets. Mao promised "The Great Leap Forward" in 1957 with collectivist policies that starved 20 million Chinese citizens. William Pitt, Prime Minister of England in 1796, promised England's poor the keys to the treasury for easing the plight of poverty resulting in the creation of even more poverty. Post WWII Europe's turn toward socialist policies floundered for forty years until Margaret Thatcher unleashed economic incentives with the rest of Europe following suit. The result were the citizens creating unparalleled wealth.
Will President Obama's "Government is the only solution" and "America is in trouble" work? He may have mesmerized the masses and won the White House with Alinsky's methods, but there is going to be an awful mess when the citizens awake from the hypnosis of "change that you can believe in."
Even so, because of Senator Obama's masterful oratory and wordsmith savvy, he awed crowds with his incantations and vocabulary blinding the many about the realities of his federal economic plans for America.
President Obama will begin re-shaping America through a slight of hand proposition. The economy needs stimulus. So why not designate specific funds toward newly formed government programs? Will these government mandated programs be eliminated upon their one time designation? It won't be likely.
President Obama's incremental approach will be "death by a thousand cuts", not a bazooka. A little money for this program and that program to stimulate the populous multiplied hundreds of times over will show government to be "the Great Leviathan".
Thursday, January 15, 2009
Wall Street Tycoons & Sunday School
It was Rudyard Kipling who wrote, "What a web we weave when we first practice to deceive".
And so the story goes...the 2008 Tronch I, Bailout Nation, Stimulus Plan I, 2009 Tronch II, Stimulus Plan II, New Deal III, etc...are but symptoms of a serial pandemic spreading through Wall Street.
Politicians are scrambling to solve problems of transparency and integrity disguised as economic problems. Consider stalwart Wall Street firms Lehman and Bear Stearns. They promised nothing was wrong. Both ended bankrupt and were bought for pennies on the dollar. Freddie Mac and Fannie Mae promised that they had no financial woes. The government rescued both. AIG appeared strong and untouchable. The government bought them out for 85 bilion dollars. Thane's Merrill Lynch promised only one trip to the discount window for money and that Merrill was through its most difficult economic patch. Merrill then begged to be bought out; Bank of America came to the rescue with the Treasury Secretary's explicit promise to back all of the toxic assets no matter how many there were. Pandit promised Citigroup was getting through the worst of its problems. Tronch I and Treasury rescue packages have left the stock bleeding under five dollars and the company fighting for its survival.
Now Apple Computer, under the cloud of suspicion concerning Steve Jobs' health, promised Jobs was in fine health. Then Apple confirms suspicions that Jobs was taking a leave of absence for six months for health reasons.
Who can blame investors from fleeing the scene and producing a 40% drop in equity prices during 2008 matching the worst year since 1931? With financial statements useless, CEO's and government officials playing the charlatans, and the prospects of success in the markets being turned into a gambling parlor, Americans are left holding the financial losses to the tune of billions of dollars.
What excactly is the problem? Its not losses, bankruptcies, or over-leveraged financial institutions. The problem is integrity and character. The day that a man's word is not as "good as gold", has arrived.
Cheating, lying, deceiving, and half-truths are ground-zero for America's 2008 Wall Street financial implosion and economic recession that is underway. When truth is discarded, the financial statements become useless. When truth is hidden, banks won't lend and people won't borrow. No one can conduct business fairly.
What is the solution? Bust the entire bunch of financial charlatans that cooked the books and lied in public about the material affairs of their public companies. Jail time, accountability, and swift accountability are partial solutions addressing those swindlers who have destroyed the 401K's, pension plans, and retirements of millions of Americans. Enron and Worldcom were not the only bad apples in the barrel. The entire Wall Street and financial system has men who continue to peddle half-baked truths about their companies.
The solution, however, is not only to swiftly house white collar crooks in pin-stripe suits. Americans must re-learn the timeless truths and great lessons of honesty, integrity, and character in their personal lives.
Bruner and Carr who wrote of J.P. Morgan's steely nerves in saving America's banking system during the Panic of 1907, record Mr. Morgan's famous verbal exchange during a Congressional inquiry:
Untermyer: Is not commercial credit based primarily upon money or property?
Morgan: No, sir. The first thing is character.
Untermyer: Before money or property?
Morgan: Before money or anything else. Money cannot buy it ... a man I do not trust could not get money from me on all the bonds in Christendom.
J.P. Morgan, the great banker, knew that without good character there could be no good commerce. Sunday School may seem a bit archaic and aloof a solution for our sophisticated modern day financiers. But the difference between a street thief and a pin-stripe suit college graduate swindler is the amount of money that is stolen. Both are thieves. Both have the effect of destroying the America we love.
Harvard and Yale graduates may have a ticket to success. But success crumbles easily when character is not built upon the timeless of values of Sunday sermons where conscience, love, hope, and faith train us toward honesty and integrity. Today's financial leaders need no more motivation or incentives to succeed. They already make millions.
They need Sunday School and a re-learning of the 10 Commandments that makes one right with his soul before handling the public's trust and their money.
And so the story goes...the 2008 Tronch I, Bailout Nation, Stimulus Plan I, 2009 Tronch II, Stimulus Plan II, New Deal III, etc...are but symptoms of a serial pandemic spreading through Wall Street.
Politicians are scrambling to solve problems of transparency and integrity disguised as economic problems. Consider stalwart Wall Street firms Lehman and Bear Stearns. They promised nothing was wrong. Both ended bankrupt and were bought for pennies on the dollar. Freddie Mac and Fannie Mae promised that they had no financial woes. The government rescued both. AIG appeared strong and untouchable. The government bought them out for 85 bilion dollars. Thane's Merrill Lynch promised only one trip to the discount window for money and that Merrill was through its most difficult economic patch. Merrill then begged to be bought out; Bank of America came to the rescue with the Treasury Secretary's explicit promise to back all of the toxic assets no matter how many there were. Pandit promised Citigroup was getting through the worst of its problems. Tronch I and Treasury rescue packages have left the stock bleeding under five dollars and the company fighting for its survival.
Now Apple Computer, under the cloud of suspicion concerning Steve Jobs' health, promised Jobs was in fine health. Then Apple confirms suspicions that Jobs was taking a leave of absence for six months for health reasons.
Who can blame investors from fleeing the scene and producing a 40% drop in equity prices during 2008 matching the worst year since 1931? With financial statements useless, CEO's and government officials playing the charlatans, and the prospects of success in the markets being turned into a gambling parlor, Americans are left holding the financial losses to the tune of billions of dollars.
What excactly is the problem? Its not losses, bankruptcies, or over-leveraged financial institutions. The problem is integrity and character. The day that a man's word is not as "good as gold", has arrived.
Cheating, lying, deceiving, and half-truths are ground-zero for America's 2008 Wall Street financial implosion and economic recession that is underway. When truth is discarded, the financial statements become useless. When truth is hidden, banks won't lend and people won't borrow. No one can conduct business fairly.
What is the solution? Bust the entire bunch of financial charlatans that cooked the books and lied in public about the material affairs of their public companies. Jail time, accountability, and swift accountability are partial solutions addressing those swindlers who have destroyed the 401K's, pension plans, and retirements of millions of Americans. Enron and Worldcom were not the only bad apples in the barrel. The entire Wall Street and financial system has men who continue to peddle half-baked truths about their companies.
The solution, however, is not only to swiftly house white collar crooks in pin-stripe suits. Americans must re-learn the timeless truths and great lessons of honesty, integrity, and character in their personal lives.
Bruner and Carr who wrote of J.P. Morgan's steely nerves in saving America's banking system during the Panic of 1907, record Mr. Morgan's famous verbal exchange during a Congressional inquiry:
Untermyer: Is not commercial credit based primarily upon money or property?
Morgan: No, sir. The first thing is character.
Untermyer: Before money or property?
Morgan: Before money or anything else. Money cannot buy it ... a man I do not trust could not get money from me on all the bonds in Christendom.
J.P. Morgan, the great banker, knew that without good character there could be no good commerce. Sunday School may seem a bit archaic and aloof a solution for our sophisticated modern day financiers. But the difference between a street thief and a pin-stripe suit college graduate swindler is the amount of money that is stolen. Both are thieves. Both have the effect of destroying the America we love.
Harvard and Yale graduates may have a ticket to success. But success crumbles easily when character is not built upon the timeless of values of Sunday sermons where conscience, love, hope, and faith train us toward honesty and integrity. Today's financial leaders need no more motivation or incentives to succeed. They already make millions.
They need Sunday School and a re-learning of the 10 Commandments that makes one right with his soul before handling the public's trust and their money.
Tuesday, January 13, 2009
Do Any Of Them Know What To Do...???
It was Alan Greenspan, the Maestro who led America as the most powerful man on the globe, who said in the twilight of his days before Congress, that his forty year understanding of economics was faulty. Need anything else be said?
Do President Elect Obama's financial advisors including Warren Buffet, Robert Reuben, and Paul Volcker have any greater clarity concerning the great American economy? What about Bernanke or Paulson?
Earily so, the answer is no. The omnicscient masters of economics remain muted about the exact solution for deep recession or depression type scenarios.
No unfolding economy is so frightening to a central banker or politician than an economy slipping into deflation or depression. Peope stop spending. They hoarde. Prices decline swiftly. Employers cut hours, jobs, and shut down factories.
In the 1930's, this meant breadlines, Hoover Hotels, and selling eggs to make ends meat. In 2009, this means Blockbuster, McDonalds, and used cars instead of cinemas, Ruth's Steakhouse, and brand new sports cars.
Listenting to Warren Buffet's "economic Pearl Harbor" comments and Paul Krugman's doom and gloom rhetoric, one might think the "Great Mother of all Recessions" is upon us. Is America in such deep trouble that President Elect Obama should ominously report that "government is the only solution" and that failure to pass his 1 trillion dollar stimulus plan is akin to destroying the American economy?
Let it be said clearly. Bad public policy of the 1930's of hiking taxes, errecting tariffs, and contracting access to credit were the death knell of economic recovery for 12 years. Every conceivable big government program that could be invented was employed. FDR said, "Do something. And when you have done that something, if it works, do it some more. And if it does not work, then do something else."
Bail outs have wiffed. Markets have tanked. Confidence is waning. Obama's "Change that you can believe in" rhetoric is fast becoming fizzled soda.
President Obama, Geithner, and Summers promised that help was on its way. More spending, massive government invervention, greater regulation, and increased legislation was their intention. Such medicine which they offer as a cure will be worse than the disease of 2009's recession.
To what is President Obama beholden? Is it economic recovery for all citizens? Or is the President so entranced by the social re-engineering experiment to equalize outcomes in America, that nothing shall stand in his way?
Indeed, the beguiling of the people has taken root. The "Shining City Upon a Hill" which has endured the wacky ages of FDR and LBJ, shall once again require the citizens to reclaim their liberty when the damage is done.
Do President Elect Obama's financial advisors including Warren Buffet, Robert Reuben, and Paul Volcker have any greater clarity concerning the great American economy? What about Bernanke or Paulson?
Earily so, the answer is no. The omnicscient masters of economics remain muted about the exact solution for deep recession or depression type scenarios.
No unfolding economy is so frightening to a central banker or politician than an economy slipping into deflation or depression. Peope stop spending. They hoarde. Prices decline swiftly. Employers cut hours, jobs, and shut down factories.
In the 1930's, this meant breadlines, Hoover Hotels, and selling eggs to make ends meat. In 2009, this means Blockbuster, McDonalds, and used cars instead of cinemas, Ruth's Steakhouse, and brand new sports cars.
Listenting to Warren Buffet's "economic Pearl Harbor" comments and Paul Krugman's doom and gloom rhetoric, one might think the "Great Mother of all Recessions" is upon us. Is America in such deep trouble that President Elect Obama should ominously report that "government is the only solution" and that failure to pass his 1 trillion dollar stimulus plan is akin to destroying the American economy?
Let it be said clearly. Bad public policy of the 1930's of hiking taxes, errecting tariffs, and contracting access to credit were the death knell of economic recovery for 12 years. Every conceivable big government program that could be invented was employed. FDR said, "Do something. And when you have done that something, if it works, do it some more. And if it does not work, then do something else."
On second thought instead of just doing something, doing something right such as employing capital friendly policies would have been far more effective than relying on the gimcrack populist policies to pull people out of recession in the 1930's? Had Morgenthau or FDR not strong-armed capitalists, business owners, entreprenuers, with excesssive government regulation including wage and price controls, capital and labor would have readjusted more efficiently and effectively to recession than with centralized planning of the 1930's. Even Morgenthau lamented years later that enormous spending and government expansion simply didn't work.
So what have we learned today? Maybe not very much. Secretary Paulson said, "We have to do something."
Six-hundred dollars to each American in 2007 to rev up the economy...A $350 billion housing plan to save housing....Bear Stearns bailout in March 2008...Citigroup, AIG, TARP I, TARP II to follow in 2008....TALF....Stiumulus I of 2009 in the amount of $789 billion, Stimulus II on the horizon...auto companies, insurance companies, etc...bailed out of insolvency.Bail outs have wiffed. Markets have tanked. Confidence is waning. Obama's "Change that you can believe in" rhetoric is fast becoming fizzled soda.
President Obama, Geithner, and Summers promised that help was on its way. More spending, massive government invervention, greater regulation, and increased legislation was their intention. Such medicine which they offer as a cure will be worse than the disease of 2009's recession.
To what is President Obama beholden? Is it economic recovery for all citizens? Or is the President so entranced by the social re-engineering experiment to equalize outcomes in America, that nothing shall stand in his way?
Indeed, the beguiling of the people has taken root. The "Shining City Upon a Hill" which has endured the wacky ages of FDR and LBJ, shall once again require the citizens to reclaim their liberty when the damage is done.
Sunday, December 21, 2008
"I Am Not Herbert Hoover!"
"I am not Herbert Hoover", claimed President Bush in an interview less than 60 days until Air Force One takes him back to Texas.
Hoover from 1928 to 1932 oversaw the crash, depression, and largest destruction of wealth in American history. Historians don't ponder the details of Hoover's actions very much. Many believed Hoover to be one who did little but stand by and watch the building burn down. But quite the opposite occurred.
Thomas Dilorenzo in "How Capitalism Saved America", illuminates the detailed programs, massive government spending, and intervention that Hoover implemented to stablize the economy. Hoover "orchestrated massive interventions-high-wage policies, tax and spending increases, protectionism, government credit rationing...his hyperinterventinism destroyed the economy's prospects for the kinds of adjustments that needed to take place."
What was the result? "He turned a recession turned into The Great Depression." (Dilorenzo, Thomas p. 178)
Hoover doesn't get the blame for the banks that lacked the imaginative course of making more capital available. Perhaps this ranks has the single greatest error of the age that tossed thousands of banks into bankruptcy. But Hoover's hyperinterventionism and his signing of the Smoot Hawley Tariff Act of 1930 eviscerated 83% of foreign trade and destroyed the American economic engine.
How does President Bush's term compare to the Hoover years? Deroy Murdock of National Review Online describes "comrade Bush" as a centralized planner who destroyed limited-government policies.
"Bush’s eight-year-long spending spree, his signature on at least 69,341 earmarks, his barely touched veto pen, his $783 billion Medicare drug entitlement, and his massive financial bailout (so far: $3.35 trillion in actual outlays and $13.35 trillion in total guarantees and commitments) apparently are not enough."
Strewn acorss the yard of American economics in 2008 are the bones of Bear Stearns, Fannie Mae, Freddie Mac, and AIG. The $700 billion TARP, Paulson's purchase of bank preferred stock, purchase of non-performing mortgages, and moratorium on home foreclosures have been Bush's answer to stock market declines of 40%. City, county, and state officials booked their tickets for one-on-one POW WOW sessions with Senators, Congressmen, and the President pandering for fedreal dollars. Now the Big 3, facing bankruptcy, have trotted up to Washington with hands out pleading bailout money. President Bush has responded with 17 billion dollars.
Does this sound like government invervention similar to Hoover's? FDR's backers gleefully proclaimed how wonderful Hoover's administration set forth the agenda for governmet solutions as FDR was taking office. More of the same was expected. FDR was going to "do something" and not sit back. Hoover, the "golden boy", who engineered the feeding of Bolsheviks in their times of distress during Harding's Presidency, was bent on re-organizing and socially engineering capital and labor to his own likings as President. He did it.
The early 1970's saw President Nixon with Hoover & FDR type policies. He froze wages prices on a huge number of goods. He eliminated the gold standard. Nixon was free to spend America's surpluses into deficits to get re-elected. New social programs were Nixon's ideas to get re-elected. Hoover would have loved Nixon.
Did not President George Bush, who claims to be a free-market guy, not employ similar strategies? Bush gave Americans health care prescription, No Child Left behind, and forced trillions of dollars of bailout money down the throats of specified financial institutions. In addition, even when the Senate voted against funding the auto bailouts, President Bush handed the auto makers 17 billion dollars anyway.
President Bush can claim "I am not Herbert Hoover". But the facts speak a different story. Government intervention is what the Bush administration has been about. In Foreign policy and domestic policy American government has attempted to be the solution for the people under the Bush Presidency.
The "Golden Boy" of 1928 has been reincarnated in GW Bush. The only question remains: Will Obama Obama willingly play FDR?
Hoover from 1928 to 1932 oversaw the crash, depression, and largest destruction of wealth in American history. Historians don't ponder the details of Hoover's actions very much. Many believed Hoover to be one who did little but stand by and watch the building burn down. But quite the opposite occurred.
Thomas Dilorenzo in "How Capitalism Saved America", illuminates the detailed programs, massive government spending, and intervention that Hoover implemented to stablize the economy. Hoover "orchestrated massive interventions-high-wage policies, tax and spending increases, protectionism, government credit rationing...his hyperinterventinism destroyed the economy's prospects for the kinds of adjustments that needed to take place."
What was the result? "He turned a recession turned into The Great Depression." (Dilorenzo, Thomas p. 178)
Hoover doesn't get the blame for the banks that lacked the imaginative course of making more capital available. Perhaps this ranks has the single greatest error of the age that tossed thousands of banks into bankruptcy. But Hoover's hyperinterventionism and his signing of the Smoot Hawley Tariff Act of 1930 eviscerated 83% of foreign trade and destroyed the American economic engine.
How does President Bush's term compare to the Hoover years? Deroy Murdock of National Review Online describes "comrade Bush" as a centralized planner who destroyed limited-government policies.
"Bush’s eight-year-long spending spree, his signature on at least 69,341 earmarks, his barely touched veto pen, his $783 billion Medicare drug entitlement, and his massive financial bailout (so far: $3.35 trillion in actual outlays and $13.35 trillion in total guarantees and commitments) apparently are not enough."
Strewn acorss the yard of American economics in 2008 are the bones of Bear Stearns, Fannie Mae, Freddie Mac, and AIG. The $700 billion TARP, Paulson's purchase of bank preferred stock, purchase of non-performing mortgages, and moratorium on home foreclosures have been Bush's answer to stock market declines of 40%. City, county, and state officials booked their tickets for one-on-one POW WOW sessions with Senators, Congressmen, and the President pandering for fedreal dollars. Now the Big 3, facing bankruptcy, have trotted up to Washington with hands out pleading bailout money. President Bush has responded with 17 billion dollars.
Does this sound like government invervention similar to Hoover's? FDR's backers gleefully proclaimed how wonderful Hoover's administration set forth the agenda for governmet solutions as FDR was taking office. More of the same was expected. FDR was going to "do something" and not sit back. Hoover, the "golden boy", who engineered the feeding of Bolsheviks in their times of distress during Harding's Presidency, was bent on re-organizing and socially engineering capital and labor to his own likings as President. He did it.
The early 1970's saw President Nixon with Hoover & FDR type policies. He froze wages prices on a huge number of goods. He eliminated the gold standard. Nixon was free to spend America's surpluses into deficits to get re-elected. New social programs were Nixon's ideas to get re-elected. Hoover would have loved Nixon.
Did not President George Bush, who claims to be a free-market guy, not employ similar strategies? Bush gave Americans health care prescription, No Child Left behind, and forced trillions of dollars of bailout money down the throats of specified financial institutions. In addition, even when the Senate voted against funding the auto bailouts, President Bush handed the auto makers 17 billion dollars anyway.
President Bush can claim "I am not Herbert Hoover". But the facts speak a different story. Government intervention is what the Bush administration has been about. In Foreign policy and domestic policy American government has attempted to be the solution for the people under the Bush Presidency.
The "Golden Boy" of 1928 has been reincarnated in GW Bush. The only question remains: Will Obama Obama willingly play FDR?
Friday, November 07, 2008
President Elect's Chief of Staff Says What?
Rahm Emanuel, upon seeing Senator Obama's election night victory, reportedly drove a knife stake into a table. A list of Obama enemies were listed one by one in slow diction as if they were being prepared to pay for not falling in line with Senator Obama's campaign.
Paul Begala described Emanuel as a cross between a hemroid and hurting tooth. Sounds lovely, right?
Known as Rahmbo for his tough non-diplomatic take-no-prisoner approach in politics, he is a partisan. And now he has been chosen Chief of Staff to President Elect Obama.
What does this mean? Anyone wanting to see the President will schedule through Mr. Emanuel. He has earned his stripes. He is tough. He has no love lost for Republicans.
The Obama campaign seemed to have a thin skin for opposition to his campaign. The Washington Post and Dallas Morning News were thrown off of his campaign plane for coming out formally and supporting Senator McCain. Free speech may not be so free around the Obama regime?
Will a Republican ever had chance to set foot in the White House for debate with Senator Obama? Probably not. Outside opinions may need to tread lightly if ever they hope to conference in the next four years with Washington's newest Messiah.
Rahm Emanuel has a long memory. He has a list of out-of-favor characters that are on it.
Trained in the Clinton White House, he has learned the lessons of cold-calculated decisions. He has learned to be black and white about friends and enemies. There is no in between.
Will Republicans see the inside of the White House? Only when they grovel pitifully to see the President. Will Hillary's people appear in the White House? Not unless Emmanuel sees the desperate need for that meeting to take place.
Senator Obama has promised to unify the nation. If Rahmbo Emmanuel is any indication, that promise will exempt all politicians that fought against "Change that we can believe in" during the primaries and general election.
Paul Begala described Emanuel as a cross between a hemroid and hurting tooth. Sounds lovely, right?
Known as Rahmbo for his tough non-diplomatic take-no-prisoner approach in politics, he is a partisan. And now he has been chosen Chief of Staff to President Elect Obama.
What does this mean? Anyone wanting to see the President will schedule through Mr. Emanuel. He has earned his stripes. He is tough. He has no love lost for Republicans.
The Obama campaign seemed to have a thin skin for opposition to his campaign. The Washington Post and Dallas Morning News were thrown off of his campaign plane for coming out formally and supporting Senator McCain. Free speech may not be so free around the Obama regime?
Will a Republican ever had chance to set foot in the White House for debate with Senator Obama? Probably not. Outside opinions may need to tread lightly if ever they hope to conference in the next four years with Washington's newest Messiah.
Rahm Emanuel has a long memory. He has a list of out-of-favor characters that are on it.
Trained in the Clinton White House, he has learned the lessons of cold-calculated decisions. He has learned to be black and white about friends and enemies. There is no in between.
Will Republicans see the inside of the White House? Only when they grovel pitifully to see the President. Will Hillary's people appear in the White House? Not unless Emmanuel sees the desperate need for that meeting to take place.
Senator Obama has promised to unify the nation. If Rahmbo Emmanuel is any indication, that promise will exempt all politicians that fought against "Change that we can believe in" during the primaries and general election.
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