Friday, October 30, 2009

Random Rants--A Friday Feature

Consumer Spending is Down Proving my Point on the Elusive Recovery

“Nothing sways the stupid more than arguments they can't understand”
Cardinal de Retz

Yesterday, the politicians were falling all over themselves to claim credit for the third quarter GDP growth of 3.5%, claiming the growth was proof the Administration's stimulus plan had worked. The President claimed,“the steps we’ve taken have made a difference.” Whoa there Big Fella.

As I reminded yesterday, the GDP growth was fueled by the Cash for Clunkers program which was borrowing demand from the future as consumers scrambled to make auto purchases before the program's deadline in early September. Automobile sales declined 23% in the month causing the large drop in September's consumer spending reported today. According to to the Wall Street Journal, "The 0.5% drop in spending was the largest since December 2008, when the recession was at its worst. "

And it is not about to get better any time soon. Washington policies like health care and "cap and trade" if enacted will add an enormous tax burden to consumers and small businesses ensuring slow--if any--growth and sustainabily high unemployment for years to come. We have only to look at Carter's policies for a benchmark of what's in store, if the leadership in Washington doesn't change. (See my blog entry for October 15th, The Misery Index All Over Again

People who don't have jobs, don't spend. Further proof? The WSJ reported September "personal saving as a percentage of disposable personal income was 3.3%, compared to 2.8% in August." Those who are working are increasingly saving not spending.

Random Rants:

  • Nancy Pelosi's health care bill is 1,990 pages long and uses the word SHALL 3,425 times according to The Weekly Standard. How's that for choice?

  • The Ten Commandments uses the word SHALL eleven times.

  • October was the deadliest month for our troops in Afghanistan. Obama yesterday agreed to give General McChrystal 20,000 of the 40,000 troops he asked for on August 30th.

  • It was reported yesterday that the 30,383 jobs the stimulus plan/Obama Administration had saved/created with $16 billion of our tax dollars spent so far had been overstated by 20% or approximately 6,000 jobs. After I stopped laughing I recalculated the cost per job (see my letter to the President on October 17th, Stimulus Please--Obama's Stash Part 2). $640,000. What more is there to say?

  • And finally, Tuesday I happened on a Tea Party gathering in the next town over. Stopped at the stoplight I noticed a handful of protesters (protesting the Tea Party protest) carrying professionally made signs saying Yes We Can, and Support Health Care Reform. I rolled down my window and asked who was going to pay for the $1 trillion health care bill. They replied promptly, "We all are." I replied, "Not me thank you, I already pay enough." (I had just recovered from the nauseating realization that over 60% of our family income goes to the government in some form or another.) Immediately they shouted: Selfish. Selfish. Selfish.

  • Why does the Left always resort to name calling and finger wagging?

  • I guess because it is easier than sucking it up and doing the right thing.

Thursday, October 29, 2009

There's No Such Thing as a Jobless Recovery

There's No Such Thing as a Jobless Recovery

I have been watching the U.S. markets and the economy for twenty-five years. And I can tell you with confidence: There is no such thing as a recovery when unemployment is rising. I can also tell you that over those twenty-five years (during which I was managing billions of dollars) never have I seen a media so determined to call an end to a recession only to declare with the next bit of economic news that the so and so indicator "unexpectedly" came in below expectations... Unexpected? Only to the wishing on a star crowd.

Look at the chart attached. It is a government chart that shows unemployment registering 7.5% in January of this year. That is the unemployment number (among other things) that prompted Mr. O to declare the worst recession since the Great Depression. We were advised that Congress must pass the economic stimulus package to the tune of some $870 billion dollars to ensure that unemployment not rise above 8%. Well, nine short months and a stimulus bill later we are hovering at 10% and rising. Stimulus of the sort the Obama Administration (and Bush before him) has advocated and employed obviously does not work.

Now, take today's GDP number. Hip hip hooray. The Gross Domestic Product rose by a seasonally adjusted 3.5%--greater than expectations. Why? Because consumer spending rose 3.4% during the quarter and added 2.4% to overall growth. Why? Because the Cash For Clunkers program borrowed demand from the future by incenting consumers to make car purchases during the quarter. What has happened since then? Auto sales have fallen off a cliff. This will happen every time sales are managed through government programs that borrow demand from the future. Look at the housing market if you need further confirmation.

There is one thing that is certain from today's report. The consumer is critical to GDP growth. And without jobs, consumers won't sustain spending.

Here is one prediction you can take to the bank: Until the Obama Administration embraces fiscal responsibility, which includes reigned in spending and tax cuts to incent true growth, the end to this recession will continue to surprise the economically naive.

Wednesday, October 28, 2009

And They Want to Be Our Health Care Providers

In 2002, Caltrans (California Department of Transportation ) began the construction of a new eastern span of the Bay Bridge. The estimated cost was $1.3 billion dollars. The plan? To rebuild rather than retrofit the span after the Loma Prieta earthquake in 1989 caused a section of the bridge to collapse.

After a series of delays and cost overruns the bridge is now expected to be complete in 2013 at a total cost to taxpayers of $6.3 billion. Just $5 billion or 384% over budget. That was before the break in a steel cable on the new section which was recently inserted into the old span. The bridge is closed indefinitely until the cable is repaired. Caltrans does not have an estimate of when the repairs will be complete.

But there is good news in all of this we are told. Caltrans has the parts to fix the problem on hand. Yippee.

When have you known the government to finish anything on time or on budget? The CEO of the bridge project--if a member of the private sector--would have lost his job by now and if Pay Czar Feinberg had anything to say about it would have to give his salary back. Yet the Caltrans folks keep plugging along: $5 billion over budget, years behind schedule and now, it appears, being paid to fix a broken cable that should never have snapped in the first place.

Now tell me, do you want these unaccountable bureaucrats in charge of your health care?

I don't think so.

Tuesday, October 27, 2009

Height of Chutzpah

Height of Chutzpah

On October 3rd, Business Week published an Associated Press article on the compensation package for the new Freddie Mac Chief Financial Officer, Ross Kari. Mr. Kari was presented with a package "worth as much as $5.5 million. That includes an almost $2 million cash signing bonus and a generous salary that could top $2.3 million" according to the AP. (see link below) The article goes on to explain that the generous pay package was established to be competitive with the other financial sector jobs presumably available to Mr. Kari.

You remember, Freddie Mac surely. The government-controlled mortgage lender that played a heavy hand in the financial crisis; the crisis the President is single-handedly trying to "mop" up. The same Freddie Mac that provided a seat on its board of directors for Rahm Emanuel (see October 16th, 2009 blog entry: Never Let a Good Crisis Go to Waste) and contributed gobs of money to the Obama campaign. You know, the one that was riddled with fraud. The one whose former CFO was found dead in April of an apparent suicide. Perhaps that is why Mr. Kari is being paid such a hefty sum to replace him. A form of hazard pay, if you will.

Freddie Mac's lending policies helped justify the latest $800 billion stimulus package, on top of the hundreds of billions of dollars allocated through the two or three (who can remember?) previous stimulus plans approved during the Bush Administration. The stimulus package was needed because the financial crisis was severe we were told and that led to the bank and auto company take-overs, that led to Pay Czar, Ken Feinberg slashing executive compensation. Oh don't worry not OUR compensation, just the compensation of those executives who took government money.

So sweeping were Feinberg's pay cuts that some private-sector, financial executive salaries will be slashed by 90%. Ken Lewis, the soon-to-be-former CEO of Bank of America will apparently have to give his entire 2009 salary back. Ken Feinberg suggested that too, bless his heart. Apparently Mr. Feinberg is so powerful his decisions, according the President, have been made without Mr. Obama's knowledge or approval. Imagine that. A government official who serves at the pleasure of the president, who is not only not accountable to him but neither is he accountable to the limits of the Constitution. It is difficult, I acknowledge, but try to imagine it. A sort of Reverend Wright of the Treasury. Obama's knows him he just doesn't know what he is doing.

Anyway, as usual, not only is this Administration grabbing the liberty and private property of private citizens, they are doing so at breakneck pace with no regard for the consequences of their actions. Governor Patterson of New York had it right when he accused the Adiministration of cutting about $1 billion in income tax out of the New York state treasury when Feinber slashed financial exec salaries. Ooops. Oh well, the Administration doesn't want Governor Patterson to be governor any more anyway. This should push what's left of his approval ratings over the cliff. Two birds with one Feinberg stone.

And for those of you who are sympathetic to Feinberg's pay cuts because these companies took tax money--which we all know is money out of our own pockets--and therefore the government has the right to dictate their pay, think again. Thousands like me have received government money. Mine came in the form of a government sponsored scholarship to attend college in the 1970's and no one ever told me where to go to school or what to major in. They let me decide. If we follow the Feinberg logic then we would have to take a hard look at the salaries of our elected officials. We might have to confiscate the pay packages of those involved in the financial crisis, starting perhaps with the Senate or House Finance Committee (maybe with, oh I don't know, say... Barney Frank?).

These folks are not smarter than us. They do not have proven resumes in running anything for a profit or for a profit while abiding by the onerous taxes and massive regulation they impose on the private sector--especially small businesses. They have no Constitutional authority to do what they are doing.

And what's with all the finger wagging? Mr. Feinberg, Rahm, Msssss. Pelosi, Harry the Horse and the Fiddler-in-Chief...they're always wagging their fingers at us.

As the King Fiddler says: what's up with that?

Saturday, October 24, 2009

Consent of the People

Consent of the People

Alexander Hamilton, in Federalist 22 writes : The fabric of American empire ought to rest on the solid basis of THE CONSENT OF THE PEOPLE. The streams of national power ought to flow immediately from that pure, original fountain of all legitimate authority.
That's us. That's we, the people.

In Federalist 23, he writes of the "principal purposes" of a union of the states: "...the common defence of the members; the preservation of the public peace, as well against internal convulsion as external attacks; the regulation of commerce with other nations and between the States; the superintendence of our intercourse, political and commercial, with foreign countries. "

Those are the principal purposes of our United States government. Not taking over private corporations like banks and auto companies and insurance companies. Or, the entire health care system. Not determining and confiscating the pay of private individuals. Those, my friends are the principal purposes of Socialist regimes.

Thursday, October 22, 2009

Obama's Stash--Part Three or How Many Zeros in a Trillion

Obama's Stash--Part Three or How Many Zeros in a Trillion?

When Gray Davis was still governor of California--before the recall effort and the election of the Governator--he gave an interview to the media to explain why the state was in deficit. At the time, I had taken over the management of a company struggling with profitability. Reporting to my board was a chore. And then I heard the melodious voice of Gray Davis explaining away the state's problems. It's not that we spent too much money, it's that we didn't have enough revenue.

Would my board fall for that? Unlikely.

Yet this view is de rigeur for government officials. John Garamendi, current Lt. Governor of California recently made a similar statement. Those pesky revenues are the problem, you see. (For those of you in District 10 he is running for United States Congress--and oh by the way, doesn't even live in the district, but that is for another time.) Even after the unprecedented tax increases passed earlier this year, some $38 billion for Californians, Garamendi isn't done. He wants to go after Prop. 13 and raise our property taxes. California, the great sink hole, needs more revenue.

Their revenue is our income, our savings, our property, our sweat.

Here's the part the politicians refuse to understand. When you tax something, you get less of it.
Take the recent hike in California sales taxes. In my county we pay 9.25%; in LA it is closer to 10%. I now make a conscious effort to purchase any and every thing subject to sales tax via the internet or do without. 10% is confiscatory in my view. And it seems I am not alone. Despite the increase, sales tax revenues have been below levels projected at the time of increase (link to story below). Higher taxes will dampen demand; the polar opposite consequence the Democrat legislature intended. And guys like Garamendi simply will not get it. They are not done ferreting out revenue and will never be done as long as we give them the keys to the hen house.

This tax and spend and spend and spend strategy has worked so well in California we are now pursuing it at breakneck pace on the national level.

Consider for a moment the $789 billion stimulus bill that we simply had to pass this last February. A sort of inauguration gift to the Fiddler-in-Chief. He told us it was the only way to ensure unemployment didn't rise above 8%. We are hovering at 10% eight months later and his chief economic advisor yesterday told us to get used to it.
  • The deficit stands at $1.42 trillion.

  • The Obama Administration projects "the deficits will total $9.1 trillion over the next decade unless corrective action is taken."

  • "Corrective action" is apparently ramming through a health care bill that the majority does not want to the tune of another $1 trillion. That ought to do the trick.

  • The deficit as a percent of GDP is now at 10%--the highest level since WWII.

  • Revenues collected in 2009 were down 16.6% from 2008 yet spending rose 18.2%. Most of us who run our households (or a small business if there are any left) understand that kind of math just doesn't work.

These statistics were quoted from an article posted on MSNBC (link below), hardly a critic of the Obama Administration.

So, I am hopeful that Obama's stash is a big one and that it can accommodate the plethora of deficit zeros he is accumulating. $1,000,000,000,000 is a lot of dough.

"The trouble with socialism is that you eventually run out of other people's money." Lady Margaret Thatcher, Former Prime Minister of England

Some Good News, Finally

Friends, I have taken the liberty of passing along a story from The Heritage Foundation. Some good news finally on the health care debate. Take a moment to read.

A Whole New Health Care Ball Game.

You have to read all the way to page A-25 in today’s New York Times to learn about it, but the Senate took its first floor vote on Obamacare yesterday and the White House lost. Big. The NYT reports: “Democrats lost a big test vote on health care legislation on Wednesday as the Senate blocked action on a bill to increase Medicare payments to doctors at a cost of $247 billion over 10 years. The Senate majority leader, Harry Reid, Democrat of Nevada, needed 60 votes to proceed. He won only 47. And he could not blame Republicans. A dozen Democrats and one independent crossed party lines and voted with Republicans on the 53 to 47 roll call.”

As we reported on Monday and Tuesday, yesterday’s “doc fix” vote was part of a White House Chief of Staff Rahm Emanuel strategy to smooth passage of President Barack Obama’s $1 trillion-plus health care overhaul by transferring a quarter of its cost into a separate, and completely unpaid for, bill. This transparently dishonest shell game was too much for honest Democratic Senators like Evan Bayh (D-IN), Kent Conrad (D-ND), Russ Feingold (D-WI), Claire McCaskill (D-MO), Bill Nelson (D-FL), and Ron Wyden (D-OR). Wyden told the NYT: “On the eve of a historic debate on health care, it’s essential to show a commitment to real reform,” which includes fiscal responsibility.

Yesterday’s vote marks a significant failure of the Left’s special interest approach to passing Obamacare. From the beginning, the White House thought that if it bought off all of the business interests involved (the American Medical Association, the drug industry, health insurers, hospitals, etc.) opposition to the plan would whither. In one sense, the plan worked. USA Today reports PhRMA, Pfizer, America’s Health Insurance Plans, and the Federation of American Hospitals have all ponied up millions of dollars for lobbying and television ads in support of Obamacare.

But all these special interest television ads failed to rid Americans of their common sense objections to Obamacare’s government takeover of health care. Gallup reports today that Americans now more than ever believe the costs their family pays for health care will get worse if Obamacare passes. And more Americans now believe that Obamacare will lower the quality of care they receive, reduce their health care coverage, and complicate the insurance company requirements they have to meet to get certain treatments covered.

Instead of the massive overhaul being pursued by the White House, a solid majority of Americans tell Gallup they want to see Congress move in the opposite direction. By 58% to 38%, Americans would generally prefer to see Congress deal with health care reform “on a gradual basis over several years” rather than “try to pass a comprehensive health care reform plan this year.” Bipartisan, fiscally responsible, reform such as equalizing the tax treatment of health insurance purchases, freeing customers to purchase health insurance across state lines, and allowing states more flexibility on Medicaid spending are readily doable. And that is what the people want.

Wednesday, October 21, 2009

The Head Czar is Fiddling While Our Troops are Under Attack

The Commander in Chief continues his never ending campaign for Adored Leader of the Free World while General McChrystal waits (week 8 and counting) for the President to decide on a strategy in Afghanistan. Those of you who assumed the question of strategy was settled when Obama appointed McChrystal in March after an exhaustive review of the Afghan situation are understandably confused. So confident was Obama in McChrystal, he hand-picked him to replace the previous commander. Selecting the general was a good decision. He is a tried and decorated soldier. So what are we waiting for?
The President has been understandably busy. Giving speeches for one. Not counting his failure before the Olympic Committee in Copenhagen, the president has crisscrossed the country making remarks, speaking to groups and attending DNC fundraisers (four in the last few days). These are no ordinary fundraisers, mind you, these are $34,000 per couple gala's.
Where is the decency? What about decorum? Not to mention leadership.
Imagine the outrage if President Bush were in the same situation. Unemployment at historical highs, a deficit that is growing so fast it is unfathomable to the average citizen, soldiers fighting in two wars and $34,000 per couple fundraising dinners? I think not. President Bush gave up golf once he committed troops to Iraq because he was worried about appearances. That's good leadership.
Our current Fiddler-in-Chief, has taken multiple vacations, flown his wife to "date night" in New York City for dinner, commanded an unsuccessful boondoggle to Copenhagen, sat as a guest on late night comedy shows and attended multiple fundraising soirees.
That's just bad leadership.
"The only man who makes no mistake is the man who does nothing. " Theodore Roosevelt

Tuesday, October 20, 2009

When the numbers don't add up they don't add up

When the Numbers Don't Add Up

In the early 1990's, before our kids were in school, we would spend Thanksgiving on a small working farm in Killarney Ireland. On the way we would stop in London for a few days. Every year for three years I would note the headlines were dominated by the same news: the British health care system was out of money.

I read stories about hospital closings due to lack of funding. People in need of urgent surgery being put back on the wait list because there simply was not enough money to keep the hospitals open for the rest of the year. Today we hear stories of British women being forced to give birth in hallways or at home, one woman on a sidewalk. The National Health Service (NHS they like to call it) without any apparent appreciation of the irony, defended their provision of private health care insurance for 3,000 of their employees because, well...the care is better. The sooner NHS employees get treated, the sooner they get back to work to take care of those on the NHS wait lists. Now that is funny.

This weekend my daughter went to the emergency room. She was quickly seen for abdominal pain that could have been (but wasn't) appendicitis. She was not pre-screened for insurance coverage; the doctors and nurses and admitting personnel were too busy recording and analyzing her symptoms,ordering tests and seeing to her comfort. Five years ago, my 87 year old mother who still went to work every day and tap dancing on Thursday afternoons, needed a triple by-pass. She got it. There was never any question. And we have had her for five more precious years. Recently, in Britain, an 87 year old woman was denied antibiotics when she got pneumonia, her doctors, following the guidelines of the system decided to withdraw her care. Her daughter fought and she eventually was given treatment, got over the pneumonia and lived another nine months.

The reason 54% of Americans do not want this health care reform bill is because we know that when it comes right down to it, we'll be on the short end of the stick. Like the NHS employees in England who are covered by private insurance, our members of Congress and big democrat donors, perhaps, will likely be covered by their own plans. And we'll be stuck with the plan that 54% of didn't want.

Three trillion dollars to address the supposed 37 or so million uninsured, 24 million of whom will remain uninsured after passage of the Baucus bill. Too reminiscent of the cost of creating jobs under the Obama stimulus package. (See Saturday's blog: "Stimulus Please--Obama's Stash Part 2".) The numbers just don't add up.

And when they don't add up, they don't add up.

Monday, October 19, 2009

Brrrr! I might freeze if Al Gore doesn't do something about Global Warming

Conveniently Truthful

I guess I am a contrarian by nature. Ever since the 1970's when we were told there was not enough oil to last us through the year 2000; and we were warned of a coffee shortage, then a sugar shortage and finally (I am not making this up) a toilet paper shortage, I have had a healthy suspicion of government predictions. Terms like "every body knows" or the "conventional wisdom" or it is "a given, "it will," "we must," "you should," cause me to automatically examine the alternate view. Because in my 50+ years every time Uncle Sam tells us the sky is falling--it doesn't.
So it does not come as a surprise to you, I suppose, when I tell you that I have never put much stock in this global warming hoo-hah.
Lord Christopher Monckton, former adviser to Lady Thatcher is one of the most articulate opponents to Al Gore's Inconvenient Truth and the actual "science" behind the Global Warming "crisis." He is not alone, of course. A majority of Americans don't buy the story either. But that isn't stopping Obama's government from pushing forward on the dangerous cap and trade bill. With our attention focused on the Health Care (I am sorry I just can't call it Reform) Bill, not much time has been spent discussing the unnecessary financial burden this bill will foist on--once again--the middle class.
On October 15th Lord Monckton gave a speech at Bethel University entitled "Is Obama Poised to Cede U S Sovereignty?" It is worth your time. Pass it along. While the lights are still on. And the power to run the internet Al Gore invented is still connected. Before we are subjected to the taxes these people want to slap on every kilowatt of energy we use. Oh yeah and have a Coke while you're at it. They want to tax that, too.

Saturday, October 17, 2009

Stimulus Please--Obama's Stash Part 2

Dear President Obama:

I was so happy to see that $16 billion of the $800+ billion (or is it trillion? all those zeros confuse me) February stimulus package has been spent. And 30,383 jobs were created/saved. Wowie. That means that each job created/saved only cost $526,610.00. You guys sure must be working hard spending all that money.

Not to be presumptuous or anything but I think I can help. While you all are writing checks I was wondering if you could write one to me for $263,305.00 (that's half the amount you are spending to save/create a job in Washington) and I promise to create/save a job (maybe two!) in California. We're having a tough time out here. You see our unemployment rate is 12.2%, higher than the rest of the country because we have been spending much more than we take in for decades now.

Well, anyway, I sure could use some help cleaning my house. It's back-breaking work and it never seems to end. And, well, I was just thinking, if health care is a right and all, maybe in addition to Life, Liberty and the Pursuit of Happiness, I might be entitled to a clean house?

What do ya think, Mr. President? By taking out all the middlemen in Washington, I can save/create one job for half the price! Just $263,305.00. A bargain, huh?

Thanks so much, Mr. O. Like those women in Detroit I was just thinking maybe I could get my hands on some of your "Obama stash." (Where did you get all that money anyway? You must be a very smart man.)

Respectfully yours.

Friday, October 16, 2009

Never Let A Good Crisis Go To Waste

Random Rants-A Friday Feature
On The Question of Power
White House Chief of Staff, Rahm Emanuel said in an interview: "You never want a serious crisis to go to waste. And what I mean by that it's an opportunity to do things that you think you could not do before." (His grammar, not mine, click on link below.) This is the same Rahm Emanuel that sent a dead fish to a pollster who made him angry. According to a Time Magazine profile (link below) he: once worked for Mayor Richard M. Daley, was a member of the Clinton Administration and then went on to become an investment banker where he "got rich." My favorite, he sat on the board of Freddie Mac, a testament to his financial and managerial acumen...not.
Alexander Hamilton wrote in Federalist 15: Why has government been instituted at all? Because the passions of men will not conform to the dictates of reason and justice, without constraint. Has it been found that bodies of men act with more rectitude or greater disinterestedness than individuals? The contrary of this has been inferred by all accurate observers of the conduct of mankind;
We the People need to understand the character of those in power.
On the Question of Jealousy and Anger
The Rasmussen poll of September 22nd reported 59% say Americans are angrier now than under Bush. (link below)
John Jay wrote in Federalist 5: Distrust naturally creates distrust, and by nothing is good-will and kind conduct more speedily changed than by invidious jealousies and uncandid imputations, whether expressed or implied.
The rhetoric of this Administration needs to turn civil. And quick.
On the Question of Victory in Afghanistan
According to Fox News (link below), "President Obama has put securing Afghanistan near the top of his foreign policy agenda, but "victory" in the war-torn country isn't necessarily the United States' goal, he said Thursday in a TV interview."
Alexander Hamilton wrote in Federalist 11: The rights of neutrality will only be respected when they are defended by an adequate power. A nation, despicable by its weakness, forfeits even the privilege of being neutral.
This week I asked my college freshman how many had read the Declaration of Independence. About six had. One could cite the opening sentence. We need to know our history before we can learn from it.

Thursday, October 15, 2009

The Misery Index All Over Again

Misery Index All Over Again

During the Dark Days of the Carter Administration, through the bleak haze of stagflation (for the under 50 crowd stagflation is: a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation)--sound familiar?) we were told America's best days were past. Not that Jimmy Carter's message was that direct. He was dignified as a Presidenct should be; he used subtle language; he set a good example.

When oil prices shot through the roof, Carter was a picture of calm, addressing the nation before the comforting flame of the presidential fireplace, dressed in a cardigan sweater exhorting his fellow citizens to mind the thermostat levels and put on a sweater. Just like he did. When the prime rate hit 21.5% he maintained his composure. After all who really needs a mortgage? It's not like it's a right or anything. When the Soviet's invaded Afghanistan, he didn't take the bait, he remained focused on our thermostats and was careful not to lust in his heart anymore like he did before he was President. When our diplomatic personnel in Iran (you know, the same Iran we are not worried about having a nuclear bomb today) were held hostage for 444 days he maintained his commitment to peace, not lifting a military finger on their behalf. That work was left to the efforts of private citizens like Ross Perot and eventually, President Reagan.

Jimmy Carter was known for many things: Billy, his brother and promoter of Billy Beer; peanuts, (aw shucks); Miss Lillian, his mother; Amy's tree house on the White House lawn and...oh yes, the Misery Index--the economic index established by Arthur Okun to measure the combination of unemployment and inflation but made famous by Carter as a result of his failed economic policies. When he left office the index measured 20.76%. When he took office it stood at 13.57%.

Elected as a president of change by a country wearied from the Watergate scandals (oh to deal with such straightforward corruptness again), by the time he left office America's reputation abroad was a laughingstock, our spirit at home was crushed and our military was depleted.

I don't know about you but I am getting that deja vu feeling all over again.

Wednesday, October 14, 2009

Czar-ist Wednesday--Who Are These People?

Who Are These People?

A few words about the Obama pay czar Kenneth Feinberg.

Someone please tell me in the Constitution where it says the Executive branch will have authority over the salary policies of private industry. Better yet, can someone please tell me where in the Democratic platform--you know, the one that talks about all that Hope and Change--kitchen assistants and file clerks are deemed "unessential people" as Mr. Feinberg called them in his audit of bonuses being paid at AIG. (

Aren't these the very people the Democrats claim to care about? The "unessential people?"

I am deeply offended by that phrase as we all should be. Unessential according to whom?

Tell me please, someone, anyone, when it became the business of government to determine who is essential and who isn't?

Oh, wait. I know. When they decided to impose mandatory health care. Yes, these folks that haven't balanced a budget for decades are going to expand health care and improve it and, here's the best part--don't blink or you'll miss it, here it comes, the rabbit out of the hat--they're going to save money in the process. Pay attention you Unessentials. This is your government. This is your health care. This is our future.

Robert Reich, former Labor Secretary in the Clinton Administration speaking to a U.C. Berkeley audience in September 2007 on health care reform explained what he described as the truth a candidate would never say about health care reform, "We're going to have to, if you're very old, we're not going to give you all that technology and all those drugs for the last couple of years of your life to keep you maybe going for another couple of months. It's too we're going to let you die."

I ask you, who are these people?

Tuesday, October 13, 2009

Obama Care Has No Clothes! Or ,Why I am Opting Out

Obama Care Has No Clothes! Or, Why I am Opting Out.
One of the most important premises underlying the study of economics is the notion that people will always act in the their economic best interest. We assume the same of our leaders. That is our biggest mistake.

Help me understand how the cost of health care, as Obama promised, will not add to the deficit. In September he told us "I will not sign a plan that adds one dime to our deficits-either now or in the future. Period." If he intends to cover the uninsured, a number he cited as 47 million, then 42 million and now 30 million Americans, how is that possible? Further if we do not know the terms of the bill or which bill he is referring to how can we believe him? Is he talking about H.R. 3200? Or the Baucus bill? Though, the Baucus bill wasn't written at the time of his speech. Or perhaps it was. How would we know? The transparency we were promised has gone all foggy.
I've read the CBO scores. And the revised CBO scores. And the revisions to the revised scores. Here is my view: when the numbers don't add up they don't add up. This is the same President and Congress that gave us the $789 billion stimulus that is really going to cost $3.27 TRILLION. (see This is the same stimulus bill that Obama promised was necessary to hold unemployment at 8%. Oops.

I like my health care plan. I like my doctor. I can't recall one thing the government has given me that I have liked nearly as much, except perhaps, the Blue Angels. I had the privilege of watching them burn through tens of thousands of dollars of fuel this weekend and I couldn't have been prouder to be an American and a taxpayer. When our elected officials can perform their duties with the precision of a Blue Angel pilot they'll have my support and, more importantly, my trust.

Until then, I'm out.

Monday, October 12, 2009

Federalist Number One--Warning Against Despotism Disguised as Populism or "Obama's Stash" 101

"Obama's Stash"

I have not been able to shake the Friday soundbite of the Detroit woman waiting in line to apply for a government voucher. When journalist, Ken Rogulski of WJR in Michigan asked why she was waiting, she replied, To get some money." What kind of money he asked? "Obama money. " In reply to his query regarding where did Obama get his money, she replied: "I don't know, his stash." The first time I heard the clip I laughed. But the more I thought about it the less funny I found it. How many people think there really is such a thing as a government stash and that the government's money is its own? Not the money of the people.
Let's look at it another way.
In 2009 the average worker (those that actually pay income taxes, that is) worked from January 1st to April 13th for the federal government. To fund "Obama's Stash." (FYI, according to The Tax Foundation 31% or 42.5 million working Americans in 2004 were not even required to file or pay income tax. That percentage is up from 17.9% just twenty years before in 1984, increasing the burden on those are required to pay. )
April 13th: Three and one half months during which our labor is dedicated to the federal government. Dedicated, of course, is a literary term implying that the motivation to do so is altruistic. In fact, our labor is not offered to the government, rather the government confiscates it. Then of course, there is social security tax and medicare and if you live in a state like California another 10 or so percent off the top. I haven't done the math but that should put us somewhere into the summer before the average worker living in California begins to earn money to save for his retirement and his children's college education and durable goods like automobiles and big screen TV's (until their outlawed here) and food and clothing and oh yes, to pay his mortgage.
Back to the Stash. In addition to wisely anticipating the potential factiousness surrounding the question of direct taxation, our Founders also understood very clearly the dangers of despotism. In Federalist 1, Alexander Hamilton warns: "...and that of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people; commencing demagogues, and ending tyrants."
Obsequious court to the people. Demagoguery. Impossible. Not in America. Yet, in just a few short months we have seen a government that is willing to create false crises to pass legislation (the stimulus bill that would ensure unemployment not rise above 8%--now hovering at 10% and the trend is up not down), pandering to special interests like environmentalists and global warming quacks with the growth -killing cap and trade bill, promises of change and transparency though bills are being pushed through without the opportunity for citizen review (health care reform) and a flaming of racial prejudice as we saw with the Cambridge police accusation a few months back. School children singing songs of praise to "Barack Hussein Obama." Yuck.
And now we have Obama's Stash. The Stash he is benevolently dispensing to the common folk.
"...the greatest number have begun their career by paying an obsequious court to the people; commencing demagogues and ending tyrants."

Friday, October 9, 2009

Random Rants--A Friday Feature

I worked with a guy once who had the whole package. He was tall and trim and impeccably dressed. He carried a Mont Blanc pen in his leather portfolio which was always tucked under his arm, or placed on the table in front of him with the pen positioned just so. He was grave and had an immense vocabulary. He knew all the right people, worked out regularly and had a big corner office overlooking the San Francisco Bay. In fact he had two offices: the large, bookshelf-lined office where he entertained visitors and the inner sanctum where he retreated to think big thoughts.

The problem was he just couldn't seem to pull the trigger.

He consumed great amounts of people's time gathering evidence and conducting research. He considered each problem from every angle, delving into the minutest detail. But when it came time to act, he froze. Inevitably he would zig when he should zag or worse, stay put in the middle of the tracks as the express rounded the bend. His decisions (or perhaps I should say un-decisions) were very expensive for the shareholders but since he controlled the dialogue, those decisions were rarely examined after the fact, the way they had been before.

I thought of my old colleague today when I read Charles Krauthammer's article, Young Hamlet's Agony discussing Obama's inaction on General McChrystal's request for more troops in Afghanistan.

McChrystal was appointed in March by President Obama after the "conclusion of a serious policy review." The general submitted his recommendation to Obama August 30th. Obama has yet to take action while our troops encounter increasing violence. He says he is focused on developing a strategy...the one I guess he had not yet developed at the "conclusion of the serious policy review" that prompted him to appoint the general in March...yikes! I am getting dizzy.

Ironic that while Obama fiddles, the Nobel Prize Committee awards him the Peace Prize?
Ironic that Alfred Nobel made his fortune from the invention of dynamite?
I'm just wondering,
  • If former President Bush had remarked to Jay Leno as Obama did, “I bowled a 129. It was like the Special Olympics or something” would the media or Leno for that matter have been so forgiving?

  • If Sara Palin had claimed, as Obama did during the campaign, to have visited "57 states with one more to go" wouldn't the late night hosts and Saturday Night Live have had a field day at her expense?

  • If Bush I, of "read my lips fame" had remarked as Obama did during a press conference that he had spoken to all the presidents "...who are living," (laughter), "I didn’t want to get into a Nancy Reagan thing you know about doing any seances." (more laughter) I wonder if the outrage would have been so muted.

Regardless, thank goodness for Bob Woodward who received a leaked copy of the General's request that was submitted to but not accepted by the President, and had the courage to publish it. At least we know the score now; that our military leaders are on the job even while our President is vying for the Olympics and health care and the hearts and minds of our youth or accepting the Peace Prize while our enemies keep fighting and our young men and women in the military keep defending.

Thursday, October 8, 2009

Czar-ist Wednesday on a Thursday

OK. So we've got this cadre (word carefully chosen) of Czars populating the Obama Administration. Thirty-nine by last count, though there is no definitive list. Which is, of course, the beauty of the Czar. The appointment flies under the radar. Czar's are not required to be publicly vetted. They are not reviewed nor confirmed by the Senate.

So, as I say, we have this cadre of Czars. And they are a ripe field of turnips. Van Jones--the self-proclaimed Communist and Truther (Truthers are those who believe our government was culpable or, at the very least, complicit in the 9/11 terrorist attacks) was President Obama's Green Jobs Czar. He resigned under pressure once his extremist views and rhetoric came to light. The Administration explained to The Washington Post, Jones was not vetted as closely as other assistants to the President due to his low rank. Unlikely since Valerie Jarrett, the President's closest adviser knows Van Jones well. But as the young people say: "Whatever."

My eye is on Kevin Jennings, the supposed Safe Schools Czar.

Here's the way I see it. We make certain contracts with those who provide our services . I flip a light switch and there is light. I place my garbage on the curb on garbage day and it is collected. I ask my hairdresser to get rid of the gray and presto I am a brunette once more. I send my kids to school and they learn to read and write. Right? Wrong.

In the Obama Administration's safe school world, I send my kids to school and they become sexualized. Thank you very much, but how about the schools leave that to me, the parent. Never mind that Safe Schools Czar Jennings has dedicated his life to promoting a homosexual agenda. This is America, land of the free. He can think and promote whatever he believes. And he has my support. I am NOT among the voices calling for censure. We are, or at least have been in the past, a society of free speech. More power to you, Mr. Jennings.

BUT, and this is a big but, just as I was not permitted as a professional in the ranks of corporate America to allow sexual harassment or sexual inuendo or, even condone compliments on the appearance of an employee--male or female--among my staff, NEITHER should Mr. Jennings (on our payroll mind you) be allowed to push his sexual agenda in government. And most especially not among our children. I, and tens of millions of parents, send my kids to school each day assuming they will learn how to read and write and compute math problems. Or learn about the wonders of science--a caterpillar transitioning to a butterfly, an egg hatching a chick. These are my fondest memories of elementary school. Thank God, I did not have to write a compare/contrast essay on the transsexual versus the gender neutral in the 4th grade. Instead, I was making a sugar cube model of Mission Santa Cruz. And that is how it should be.

But our Safe School Czar, Mr. Jennings is the man who wrote the forward to a book called Queering Elementary Education. To me, that says it all. And I say, enough already.

We have important issues for government to attend to. We are fighting a war. Our unemployment rate is the highest in 26 years, our economy barely has a pulse after the biggest government "stimulus" in our history. The dollar is weak. California (which has been following the failed policies on a state level that our federal government is now pursuing on a national level) is bankrupt. And now a cadre of Czars roaming the halls of government with kooky ideas spending our hard-earned money.

This is America. We have a Constitution for a very specific reason--so that to the extent possible we, the citizens, are governed by a transparent system. Obama certainly didn't invent the Czar appointment but he is the most enthusiastic employer of the Czar by scores. Let's call for some of that hope and change we were promised. Let's see some of the transparency he endorsed. Let's get these nuts out of government and most importantly, out of our schools.

Wednesday, October 7, 2009

A Digression--Veritas et Aequitas

In 1915 approximately 1.5 million ethnic Armenians were slaughtered by their Turkish neighbors. Turkey has yet to acknowledge the genocide. Instead they call the deaths a necessary response to violent uprisings by the Armenians. But genocide? No way.

There were, of course, eye witness accounts. The most notable, a detailed history written by the American Ambassador to Turkey, Henry Morgenthau. There are survivor accounts, too, from those who were strong enough or lucky enough to escape. Pictures of the brutality and barbarous nature of the attacks still remain: heads of Armenian men mounted on public walls; miles of women and children refugees being marched through the desert; piles of dead bodies left behind as those marches continued on with little to no food or rest; massacre sights covered with mounds of bones left to age in the blazing sun, picked clean by vultures. Poetry of witness survives, as well; accounts of soldiers setting young women on fire and whipping them into a frenzy of dance, the torture so intense it was impossible to know what killed them first, the enormous loss of blood from their wounds or the fire.

I lived in Turkey for a summer in 1975. When I told the Turks I met I was Armenian ,to a person they apologized for the past. They were gracious and deferential. The people knew then just as they know today. But the government asserts otherwise.

Can we not learn from history that simply saying emphatically something is so does not make it so? We hear from our government that we must pass a health care bill because 47 million are uninsured. Then 42 million. Then thirty. The facts have been tuned like a piano seeking the optimal pitch. We hear that thousands are dying because they are uninsured. Yet federal law mandates emergency rooms treat all-comers insured or not. Thousands? Could we see the evidence please? Could we have a legitimate debate? The public is overwhelmingly opposed to health care as currently framed, yet it is being crammed down our throats by a rogue Congress.

We ostensibly live in a democracy. Can our leaders speak the truth? Abide by the constraints of the Constitution? Am I alone in thinking we are just a step away from barbarity when our leaders discard the truth in favor of propaganda? President Obama posing with 150 doctors dressed in white coats (given them by the White House right before the photo opp) is a sham. When our leaders become ideologues, interested only in pushing their agenda we are a merely a step away from the failed regimes of the past.

The Armenian genocide, almost 100 years later remains unavenged. The border between the two countries is closed though an agreement to open the borders may be signed October 10th. That is good news. But until the truth is is acknowledge and some sort of retribution made, the problem will remain. That is why we study history. Through Veritas comes Aequitas.

Monday, October 5, 2009

Mr. President, you are no Abe Lincoln

"I expect to maintain this contest until successful, or till I die, or am conquered. Or my term expires, or Congress or the country forsakes me.”– Abraham Lincoln, 1862

Oh to hear those words from our President today.

While our troops--the sons and daughters, husbands and wives, fathers and mothers of our fellow Americans--are dying in Afhanistan, our general in charge of the region, General McChrystal, waits for the President to consider his August 30th request for 40,000 additional troops. This request is the result of his on the ground analysis of what it would take to win in Afghanistan, the "...war of necessity" as Obama called it on August 17th in a speech to the Veteran's of Foreign Wars.

Meanwhile Vice President Biden is arguing for a downsizing of the number of troops on the ground in Afghanistan and a focus on killing selected terrorists. Can this be a serious suggestion? Did we not try something similar in Iraq under Bush II that cost Rumsfeld his job? And what about listening to our experts, especially the ones we hire ourselves, just as President Obama handpicked General McChrystal in May? Never mind leadership--our expectation that our President would actually exhibit some.

Just a month ago we were told health care was such a crisis we had to solve it NOW. A few months before that the economy was in such crisis we had to push through the largest economic stimulus bill in our history as a nation IMMEDIATELY. But when it comes to our national security and the lives of the young men and women in our country, this President has more important things to do and feels no urgency to respond in a week or a month, in fact, he will surely require at least three more weeks to make a decision on General McChrystal's August 30th request. Once again we seem to be asking him to make decisions as he said "above his pay grade."

Thankfully General McChrystal is a warrior who is interested in victory. When asked in London if he agreed with Vice President Biden's recommended strategy General McChrystal was forthright.

"The short answer is no," McChrystal said. "You have to navigate from where you are, not where you wish to be. A strategy that does not leave Afghanistan in a stable position is probably a shortsighted strategy."

Lincoln was a hands on Commander-in-Chief. He frequently visited the front to lend support to the troops. He consulted with his generals extensively. He sat up nights waiting for word, tortured with the weight of his office. He communicated with the nation on the progress of the war. And he said things like, "I expect to maintain this contest until successful..."

Friday, October 2, 2009

Random Rants--A Friday Feature

I used to manage money for a large German re-insurance company. Frequently I discussed social and economic policy differences between Germany and the U.S. with my client. It was from him I learned about Germany's pesky, perennial, high single, low double-digit unemployment rate.

I know what your thinking: But, the Germans make great products. How is it their unemployment rate would remain high? According to my client and every other German business man I spoke to, the imposition of onerous social programs on the backs of small business, that's how.

Let's consider the average small business owner in the U.S. (If you really want to have fun, and before they go extinct, you may want to consider those in California trying to scrape out a living.) After hiring an employee and paying his salary, the employer must pay a social security tax, health care premiums (in part or in total), vacation and sick pay, provide a retirement plan option (tested for discrimination to ensure the evil business owner isn't stashing a greater percentage of his profits in his own retirement account). In California, add a tax for one of the most poorly run worker's comp funds in the country and a city tax on each employee if you are unfortunate enough to have based your business in San Francisco and pray your employees don't have any pre-existing conditions since you are required by California law to accommodate them. Whatever it takes.

With mandatory health care casting a shadow over employers like a mushroom cloud, should we be surprised (as apparently the "economist's polled" were) that they have not just stopped hiring but are still shedding jobs. I know I've cut my own household expenses by 20% and am still searching for places to cut further. Uncertainty has that effect on people.

So our unemployment rate has risen 0.1% to 9.8%. Big surprise. Another 263,000 jobs. Those Olympics in 2016 should help, huh? The TARP money being spent overseas should have some sort of trickle down, don't you think? Last July the unemployment rate was 6%. I know, I know, Obama inherited a poor economy. Yadda Yadda. It's a tough job being President. Presumably he knew that when he ran. Having run a small business myself I was a little worried when he replied to one question that it was above his pay grade.

Ronald Reagan understood when you get government off the backs of small business, when you clear the way for them to do what they do better than any other nation on the planet, they will innovate and grow and HIRE.

Thursday, October 1, 2009

Want less of something? Tax it.

Let's indulge in a little fantasy for a moment. Imagine a world where we could tax our politicians for poor performance. A kind of penalty tax every time they ignored or abandoned their responsibility to the Constitution. Each unconstitutional piece of legislation would result in a "Time-Out Tax," payable immediately with onerous penalties for tardiness. Or why not just debit their checking accounts? The House health care bill advocates an 8% non-participation tax to be debited against the offender's checking account. Why not the same for Congress? Wouldn't it be splendid to dip into their checking accounts as often as they dip into ours. But I digress.

It would, of course, be a progressive tax (the Pelosi crowd loves progressive taxes to punish the people who work hard and make a great deal of money); the greater the number of Constitutional offenses, the greater the tax. Even with her vast stores of wealth I wonder how long it would take Ms. Pelosi to at least think twice before she continued trampling defiantly on our rights.

See, before we even get to my "right" to health care I have a few rights I would like discuss with our government:
  • The right to work as hard as I want, earn income and decide for myself how to spend that income for the benefit of my own family.
  • The right to make my own decisions about my children's education. Teach them at home if I want, choose a particular public school (as we do at the collegiate level) or send them to private school without being penalized. In short, if I choose to opt out of the public school system I would appreciate having my money back to use as I see fit.
  • The right to free speech whether anyone (read: Congressional leadership) likes it or not.
  • The right to expect and receive the protections provided for me under the Constitution and the Bill of Rights.

Instead, my government and yours is busy trying to push an agenda that is so far out of touch with the law of the land (Congress, Mr. President, that means: The Constitution) and the majority of Americans, they are resorting to shady parliamentary schemes to effect their plans. Meanwhile, our commander in Afghanistan continues to wait for a reply to his request for more troops while the First Couple is occupied with Olympic aspirations. Our unemployment rate is close to 10% and rising and Congress is trying to impose yet another burden on small business--mandatory health care. TARP monies are being spent on pork right and left, yet our government is bankrupt by any FASB accounting standard U.S. corporation's are routinely held to and the economy is still shrinking.

We can't afford any more of this government's shenanigans, morally or financially. As every good economist knows, if you want less of something--tax it.

So, let's take a page out of their playbook and slap an excise tax on their bad behavior. Maybe, just maybe, we can put them in permanent time-out.