"Are the Good Times Really Over?"

Recently I heard a song by this title sung by Merle Haggard, and it seemingly described the feelings of a lot of folks right now. Don't worry, it was first published in the Spring of 1982 in the midst of the recession caused when Paul Volcker of the Federal Reserve cut off the credit spigot that had caused accelerating inflation from the late 1960's through the 1970's.

Lyndon Johnson's War on Poverty and the War in Viet Nam had been financed with credit, and very loose monetary policies were followed by Nixon, Ford and Carter, and the Fed chairmen that served under them. This created double digit inflation and extremely high interest rates by the end of Carter's term. He appointed Volcker to solve the problem. He did, but at the cost of a serious downturn.

At the end of the recession, the good times started back as a result of tax cuts and more deficit spending under Reagan, but this was again briefly halted by a real estate bust and the failure of most savings and loan institutions around the country.

Volcker was not reappointed, and Greenspan replaced him as chairman of the Fed.

The good times started back, to be only briefly interrupted by a tightening of money just in time during George H. W. Bush's term to cause a short recession in the election year of 1992, when Clinton was elected.

During Clinton's two terms, the good times returned, and the party, which was based upon very easy credit, lasted until 2007. Then, the world ran out of credit.

A slump has ensued that we are still not recovering from. So how about the good times? Are they really over for good?

I say "No." There are plenty of good times left. To get there, however, there must be some pain.

We as a country, and indeed the whole world, are at the end of a long term credit cycle. These have happened before, and, given human nature, surely will again.

What has happened? Chris Martenson put it this way:

"Banks began lending money at a faster rate than the global economy grew, and we're now at the turning point where we simply have run out of new borrowers for the ever-growing debt the system has become addicted to."


Now the bill is coming due. When one tries to create prosperity with easy credit, which the world has done, it will always end with a serious contraction.

Prosperity has to be earned, not borrowed. We have borrowed to obtain prosperity, and now, having danced to the tune, it is time to pay the Piper.

The economic paradigm we have operated under in the world since Bretton Woods in 1944, and particularly since Nixon closed the gold window in 1973, was based upon easy credit and fiat currencies, particularly the dollar.

In spite of huge efforts by governments and central banks around the world, led by the US, that old paradigm is failing, and cannot be saved. They are literally creating trillions of dollars and Euros out of thin air trying to do so, but it won't work in the end. But it will make the world's currencies, including the dollar, worthless if they continue. It may already have.

That reminds me of another country song, by Willie Nelson: "Turn Out the Lights, the Party's Over." All we have to do is recognize it, and move on.

Now, how about the good times? We have to get over the funk we are in. It will be painful, but we must go back to sound money. I am not expert on that, but we had pretty sound money before 1913, and since then the dollar has become worth only a penny of its value during that year.

Perhaps we will see whether after the Great Depression and the current ongoing crisis, our government and our people have the courage and determination to put in place a more sound and sensible economic paradigm.

If we do, the good times will come back.

Afterword:

For those who like country music, here ate the sites for the two songs:
http://www.youtube.com/watch?v=eFHJ41ktt3Q
http://www.youtube.com/watch?v=tsTAUs_h_uY

Bits and Pieces for January 12, 2012

Haley Barbour? Tell me it is not true! Apparently the conservative, law and order  Republican governor of Mississippi has pardoned a bunch of criminals, including 14 murderers. Even the Democrats are appalled. Ths story can be found here.

Marin County, California is going to outlaw smoking tobacco, but the county supervisors are going out of their way to make sure marijuana is not included in the ban. I suppose it shows a lot about the culture out there.

Marin’s war on smoking was blunted Tuesday as a measure cracking down on tobacco and other “weed” was sent back for revision to make clear the crackdown does not include marijuana.

Although supervisors were in agreement with the policy when county staff last month asserted an ordinance outlawing smoking in unincorporated-area apartments included marijuana and other herbs as well as tobacco, the county board Tuesday abruptly called for revisions making clear tobacco was the only weed at issue.

 This is not a joke. Coverage from the Marin Independent Journal is here.

Law and Order. Steven Hayward over at Power Line Blog has a good short story on the Obama recess appointments. It is a discussion with Tom Campbell. Read it here. Obama is pretty clearly making new precendent with them. What will be the end result?

Defense spending is shovel ready. So says Victor Davis Hanson. Pointing out that defense spending is not the real problem he concludes:

The decline of civilizations of the past -- fourth-century-B.C. Athens, fifth-century-A.D. Rome, 15th-century Byzantium, or 1930s Western Europe -- was not caused by their spending too much money on defense or not spending enough on public entitlements. Rather, their expanding governments redistributed more borrowed money, while a dependent citizenry wanted even fewer soldiers to guarantee ever more handouts.

History's bleak lesson is that those societies with self-reliant citizens who protect themselves and their interests prosper; those who grow dependent cut back their defenses -- and waste away.

Some people never learn.

Orangutans using iPads at zoos - soon to use Skype. For all of you iPad owners that think you are smart, just read this article from Gizmag.com.

"They like many of the free apps that I think children would like - they like the free apps where you can fingerpaint, they like the apps where you can use the drums," says Trish Khan, Milwaukee County Zoo's orangutan keeper.

Maybe we humans aren't as much smarter than the apes as we thought. lol

Climate change from CO2 may not be as bad as predicted. Also from Gizmag is a story about the new report from the National Science Foundation's Paleoclimate Program that says that climate change may be far less sensitive to CO2 than previously thought.

"Many previous climate sensitivity studies have looked at the past only from 1850 through today, and not fully integrated paleoclimate date, especially on a global scale," said Schmittner. "When you reconstruct sea and land surface temperatures from the peak of the last Ice Age 21,000 years ago - which is referred to as the Last Glacial Maximum - and compare it with climate model simulations of that period, you get a much different picture.

"If these paleoclimatic constraints apply to the future, as predicted by our model, the results imply less probability of extreme climatic change than previously thought," Schmittner added.

The sciece of anthropogenic global warming is still not settled, in spite of what the scaremongers who wish to profit from government programs would have you believe.

Masters of the World. That is what the Muslims Brotherhood's goal is. And good old Jimmy Carter says about their election in Egypt:

"I don't have any problem with that,and the U.S. government doesn't have any problem with that either. We want the will of the Egyptian people to be expressed."

I knew Carter when he was President, personally. He became the reason why I left the Democratic Party, along with the policies he and they espoused.

Like Obama, he has no use for the national interest of the United States. He would turn the whole world over to the radicals.

Bits and Pieces for January 11, 2012

New Hampshire. Romney and Obama both win, as expected. For a lot of stories, go to Memeorandum, which has a lot of links. Good site.

Pay particular attention to Nate Silver's FiveThirtyEight blog. Although he is a liberal and it is a New York Times blog, he is probably the best analyst out there these days. Pretty positive outlook for Romney, as one might expect.

Obama's War on Energy. John Hinderaker has a blurb over at PowerLine about this, with a good chart. He concludes, correctly:

The real question, of course, is how much petroleum is being recovered from public lands. Because of three years of Obama anti-energy policies, energy development is down substantially:

Oil production on federal lands is down 13 percent in 2011: 97,721,813 barrels in 2011 versus 112,124,812 barrels in 2010.

This is what happens when we have an administration that thinks Americans consume too many resources, which is to say, live too well.

 Mr. Obama’s 99% — Are We Poor or Just Unequal or Both or Neither?

Victor Davis Hanson has an excellent essay up exploring the differences between the 99% and the 1% that has been in all the news lately. I highly recommend it. He concludes:

Keep all that in mind as we enter the most divisive, class-warfare campaign in recent memory. We are living in the upside-down world Orwell wrote about. A president who likes upscale golf a lot, and Martha’s Vineyard even more, who has hired three “fat cat” bankers as his chiefs of staff (how odd that Emanuel and Lew probably both made a lot out of the Freddie/Fannie bubble), and who is the largest recipient of Wall Street cash in history now argues that half of America suffers from the hands of “them.”

Being unequal is not poor. And not having what the “rich” have hardly means having it bad. Sorry, that’s just the way it is.

FuturePundit reports that full genome sequencing costs are dropping to close to $1,000 per genome. The way things are going it won't be long before it is affordable for anyone that wants it.

These low prices are going to drive up the rate of full genome sequencing. Therefore expect to see an explosion of discoveries on what the many genetic variants mean. What I'm especially looking forward to: genetically derived personal advice on ideal diet, exercise, sleep, and other lifestyle choices.

I have had a small bit of mine sequenced, and the information derived is quite interesting. I got my testing at Family Tree DNA and tranferred it and had additional testing at 23andMe as well. It is all pretty interesting.

A Future History. Came across this wandering around some science blogs. Kind of wild speculation, but interesting. Much seems impossible, but I remember my Dad telling me in the 1950s (I was reading science fiction of the day) that men would never go to the moon. Neil Armstrong stepped onto the moon less that three years after he passed away. For those who may be interested in space, this is an interesting read.

Here are the writer's prediction for 2015:

By 2015:
By now, Virgin Galactic will have flown dozens of tourists into space, and anticipation will be growing for the next step – Bigelow’s orbiting hotels. It should come as no surprise that many couples are already making advanced bookings with a wink toward zero-gravity sex. The Google Lunar X-Prize will have been won and a few companies vying to dominate the resulting private space probe market. Exoplanets continue to be discovered, with a few Earth-sized planets plus many more large planets in habitable zones, but as yet no confirmed Earth-like planet.

With commercial launch capabilities now obvious even to Congress, plus growing space programs in other nations, the ambivalence toward NASA is finally subsiding. Human spaceflight, beyond the recreational commercial near-Earth activities is now being pursued in the form of multinational programs and the negative stigma of nuclear space propulsion and power is waning. NASA has a large role in making that happen, along with a resumption of the research to bring the more-difficult space technologies to fruition.

There are a lot more predictions. Go to the site and see what they are.

Twinkies. Has filed for bankruptcy according to the WSJ. It owes the union nearly $1 billion, and can't pay. It has tried to sell out, but there are no buyers. Too bad.

Paying College Athletes is a Terrible Idea. So says Mark Emmert in today's Wall Street Journal.

There are fundamental flaws in the pay-for-play mantra. Proponents naively think that paying players will solve all the problems involving agents, team boosters and others who are willing to break rules. They are wrong. The stakes will simply be raised to bribe athletes to attend a school, support them financially for the agent's future gain, or help them cheat in school. No, paying players a salary would make the situation worse.

Can't say I disagree  but what he proposes may do the trick. The problem is that the NCAA doesn't have the guts to really enforce the rules, and larger schools get away with a lot of violations, and aren't really punished when they are caught. It is a lot easier for an Oklahoma or Ohio State or an Oregon or a USC to get away with it because the NCAA is dependent on schools like that for their money. They don't make any off of Arkansas State, or similar schools.

We have to be willing to take hard stands based on our principles. Rather than push college athletics further and further from academics, we need to bring it closer. The values of our colleges and universities need to be consistent across the campus, classroom and playing fields. Coaches, administrators and student-athletes need to be held to the same standards and expectations as all members of the community.


That's what we started in the fall: clearing the way for student-athletes to get a $2,000 miscellaneous expense allowance, awarding multiyear scholarships, raising academic standards, simplifying the rule book, and toughening the penalties for egregious rule breakers.

I will have to see it to believe it.

Is Romney the only Republican candidate that has not alienated more than one half of the Republican Party? Jay Cost over at the Weekly Standard suggests that it is atleast so in New Hampshire.

We have heard a lot over the last couple months about the anti-Romney sentiment in the Republican party. However, this statistic suggests that, in New Hampshire at any rate, Romney is the only candidate with whom a majority of the party is satisfied. The rest of the candidates seem to have alienated more than half of the GOP.

There is more analysis in the story. Read the whole thing at the site.

Did Ron Paul win the liberal crossover vote in New Hampshire? So say Jim Hoft, who has the exit polls here. Go read it all at the site.

Bits and Pieces for January 10, 2012

Politics. Is anybody getting pretty sick at the inanity of our politics and the press coverage thereof? I am.  Is contraception or the ability of someone in the private sector to fire people all that important?

This may be the most important election in our lifetime, and nobody is really doing much talking about what the real issues are, or the press is not covering it.

We need to get serious about this. Now.

Is it just me. Or is it just a dull day all over while we wait for New Hampshire to vote?

I guess it is not dull in the world of medicine. Brigham and Women's Hospital, via E! Science News, has announced:

Researchers at Brigham and Women's Hospital (BWH) have successfully tested a controllable endoscopic capsule, inspired by science fiction, that has the ability to "swim" through the body and could provide clinicians with unprecedented control when photographing the inside of the human body. The capsule is designed to be swallowed like a pill and can be equipped with a camera. Once inside the patient's digestive track, a doctor can "steer" the capsule through the body using an MRI machine, photograph specific areas of interest, and view those pictures wirelessly.

Wow! Anyone that has ever had endoscopy or colonoscopy will appreciate this research. Let's hope the FDA won't screw this up.

The Congressional Budget Office has released a brief on suggested changes to Medicare and Social Security eligibility. They have a chart on their blog. The blog concludes:

CBO estimates that by 2035, the set of increases just described would cause outlays for Social Security and Medicare to fall by 0.4 percent of GDP and federal revenues to rise by around a half percent of GDP—leading to a reduction in the budget deficit of nearly 1 percent of GDP, not including the effects of lower interest outlays. Altogether, by 2060, the federal budget deficit would be reduced by about 1¾ percent of GDP.

 In a 15+ trillion dollar economy, those can be big numbers. Enough to save the system? Who knows?

Maybe something will come out of the MF Global scandal. Seems one of the perps wants to make a deal:

While prosecutors and regulators have jointly conducted dozens of depositions with former and current employees, a senior official in the Chicago office of MF Global recently declined to meet with the federal authorities, people briefed on the investigation said.

That official, Edith O’Brien, a treasurer at MF Global, is considered a “person of interest” in the investigation, the people said. Federal authorities suspect that she transferred about $200 million to JPMorgan Chase in London on the eve of the bankruptcy of MF Global, money that turned out to be customer cash.

If they can get some of the rats to rat on the others, maybe at long last we will see a big banker do the perp walk. There have been far too few prosecutions of the bankers who have perpetrated huge frauds against the public. Of course, the reason for that is they are being protected by politicians including the one at the very top.

The top perp in this case is Jon Corzine, one of Obama's big pals.

 

Bits and Pieces for the Day

Speaking of Goldman Sachs, Timothy Haight, writing in The Orange County Register, says that the Dodd-Frank legislation did not solve the problem of the Too Big to Fail financial institutions.

Unfortunately, legislation enacted does not solve the fundamental problem. It simply provides cover for those who were asleep at the wheel, while ignoring the underlying cause of the crisis.

Some, of course, knew this. Including most in Congress. But many in the public were fooled. Our ignorance is going to come back and bite us. He recommends that we go back to Glass-Steagall and increase bank capital requirements. He would also cap the FDIC insurance on bank deposits per institution. That is leave the coverage where it is for smaller banks, but cap the exposure in the very big ones.

My thought is that the FDIC should charge premiums to the large banks according to the real risk they have. But that would require that they be honest with their risks, and right now the Federal Reserve and the Treasury are permitting them all to pretend they aren't already broke. I call it The Golden Rule: those with the gold, make the rules. In spite of their anger at Obama, they have had it real good the last few years. And they have pretty much had their way with the Congress and the President.

Uh Oh. Charles Gasparino says in the New York Post that Goldman Sachs is supporting Romney this year after having been Obama's big supporter in 2008.

What makes Goldman’s move to the right so striking is just how far to the left it was in 2008. The Goldman community gave more than a $1 million to the 2008 Obama campaign, bested only by donors tied to the ultraliberal University of California. But the latest contribution records (through the end of September) show that Goldman-linked givers barely crack the top 20 of Obama donors, with a little more than $50,000 toward his 2012 re-election effort.

Now they are the leading source of cash for Romney. They are good at picking winners. That has given them unprecedented power and influence in Congress and the executive for many years. How else could they have gotten the huge bailouts in 2008 and since?

Romney should not celebrate this. It gives many a sound reason to oppose him. Very sound. The crony capitalism we have had the last two decades is a huge part of the financial difficulties we have been experiencing. GS and a lot of the huge institutions have way too much influence.


Tim Tebow.  What more can one say? After all of the denigration and criticism, he put in a great performance to win the playoff game yesterday. Congratulations to him, and a big loud raspberry to those who have been on him for his overt Christianity. I am really getting tired of the people who belittle others for being Christian, particularly when many of them are apologists for Muslims, even the radical ones. You can guess who I am talking about.


The only known photos from the White House’s 2009 “Alice in Wonderland” party.

Why did the Obamas want to keep this secret? Why did the press go along? Goodness, Marie and Louis partied during a recession. Guess the Obamas wanted to avoid the same result. LOL

There are others. Go to the site for more.



Roger L. Simon takes on George Stephanoloupos and his question on contraceptives in Saturday night's debate here. He also is critical of the GOP for letting the leftwing media set the terms of the debates and would prefer having no moderators:

I am interested in the candidates and what they have to say to each other — mano-a-mano — in the style of Lincoln and Douglas.

They should be given a topic for the debate (entitlements, Iran, whatever) and be set free to examine it. Those issues can be discussed at length and in more depth without the interference of media personalities who, besides being biased one way or the other, are often more interested in the promotion of themselves or their companies.

Mark Steyn also has a post on the subject:

 This country is broke, and the unprecedented scale of its brokeness is an existential threat. Yet, with the exception of Newt’s occasional flashes of contempt for the questioners, everyone else plays along with this absurd game. It’s not merely that the GOP is letting the left frame the contest but that a party willing to dignify this pitiful charade is sending a broader message about the likelihood of its mustering the determination to stand up to a Democrat-media establishment once in office and effect meaningful course correction.

I think I have to agree with them both. Does anyone think Obama would do debates like this, particularly without a teleprompter?


Quote of the Day:

In a world inhabited by sincere sane leaders, willing to level with the citizens and disposed to allow financial institutions that took world crushing risks to fail through an orderly bankruptcy process, debt would have been written off and a sharp short contraction would have occurred. The stockholders, bondholders and executives of the Wall Street banks would have taken the losses they deserved. Instead Wall Street used their undue influence, wealth and power to force their politician puppets to funnel $5 trillion to the bankers that created the crisis while dumping the debt on taxpayers and unborn generations. The Wall Street controlled Federal Reserve provided risk free funding and took toxic mortgage assets off their balance sheets. The result is total credit market debt higher today than it was at the peak of the financial crisis in March 2009.

Read 2012 - The Year of Living Dangerously here. This is certainly not an endorsement of everything he says. He gets off the rails a bit, particularly towards the end when he gets partisan.

Lance Roberts at StreettalkLive.com has a good rundown on last week's employment report:

First, let's start by putting things into perspective. If you take a look at the  actual number of those "counted" as employed, that number has risen from the recessionary trough. However, in reality, employment is still far below the long term historical trend. Currently, the deviation from the long term trend is the widest on record and has made very little improvement.

 The unemployment number went down, but it was not all a happy thing.

If, and that is a big "IF", employment was truly improving, we would be seeing these numbers begin to reverse course. They aren't, and the reason is due to population growth. During the last month it is estimated that the number of individuals of working age, 16 years and over, rose by 143,000 with the working age population now residing at 240.6 million. The offset is that, while job gains are modest and primarily located in lower-paying temporary employment for the end-of-year seasonality, the population continues to grow at an unfettered clip. In simple terms, the economy is not creating jobs fast enough to keep up with population growth.

There are some very good charts that show the real situation. If the government were measuring unemployment like they did during the Great Depression, the unemployment rate would be much, much higher. Read the whole thing at the site.

At USA Today, Richard Wolf notes that the US national debt is now at 100% of the economy. This is the point where all analysis shows that we are in seriious trouble. And our politicians are whistling past the graveyard trying to avoid offending anyone by doing what is necessary. All of them are failing us because they are too busy playing politics. Its time for a change. They all need to be thrown out.


Gallup says that 40% of Americans prefer to be independent rather than identify with either of our political parties. 31% are Democrats and 27% are Republicans.

As dysfunctional as both parties are, I cannot really imagine anyone wanting to identify with either of them.

On Eating Our Seed Corn; Or, Why Gross Domestic Product Measures May be Deceiving

Those raised around farms will probably know what eating one's seed corn means, but what does that have to do with Gross Domestic Product? Read on, and I will try to make the point.

Back in the 1970s on the campaign trail with my good friend Bob Krueger (former Democratic Congressman and US Senator) Bob would often use the term "we are eating our seed corn" in discussing government budgets and deficits. (Yes, Democrats, or some of them, were concerned about that in those days.) Bob was one of those rare politicians who would tell the truth, even when many people didn't want to hear it.

Of course we know that if you eat your seed corn, you have no seed to plant to get next year's crop. You would then be broke, or would starve to death. Not a good outcome.

This brings us to the current debate over the huge and growing deficits and national debt. Borrowing against the future to pay for the present is just like eating your seed corn. Our people, many businesses, and almost all of our governments have been doing this for years. The party is just about over. The train that is our economy is about to come to the abyss.

So what does this have to do with Gross Domestic Product, and how it is measured. Read on.

GDP is measured by adding Consumption (both private and business) plus Investment plus Government Spending plus Net Exports (exports - imports).

Those are the constituent parts of GDP. Note that the only net figure is the import/export number, and for over 40 years that has been a negative number.

Right now, GDP as thus measured is positive, and we are in a "recovery." Does it feel like a recovery to you? Ask the record number of long term unemployed.

Why do not we measure the net domestic product, whereby all of the spending would be reduced by the amount of borrowing that supports it? NDP has a good ring.

I am not an economist, so I cannot give any expert opinion on why the gross figure is considered better than a net figure, but I do know that relying on the gross figure has to distort the view of what is really happening in the economy.

Consider that government spending is all included although at least 44% of it is borrowed money. Is that why politicians always want to do a big stimulous when we hit a recession? It certainly makes it statistically look like a recovery. That is why we had a "recovery" this past year, and now that the stimulous is running out the "recovery" is faltering.

Back out the deficit spending and a clearer  image of the real economy emerges.

Also consider that private (consumer) spending is also a gross figure, when by all reports, much of it is again being done on credit cards. This, of course, is one reason why the Federal Reserve always wants to force interest rates down during a recession. They want to encourage the consumer to borrow and spend.(Another is to allow the banks to borrow at low rates and lend at higher rates, helping their profits.) That is a lot of what got us into this problem.

The last decades were spent on a big joyride, with consumers being encouraged to buy things (houses among them) that they could not afford. A lot of people maxed out their credit, then borrowed their home equities to buy the tickets for that ride.

The fact that the measured GDP was good enabled the politicians---of all stripes--- to get elected and reelected because times appeared to be better than they were. And they sold it as such.

Here is where the measure of GDP deceives us: the last forty years we have been eating our seed corn, and the economic measure the government statisticians, the economic statitisticians, and the politicians have been using to tell us where we are has hidden the facts. Of course, we all know about liars, damned liars, statisticians, and politicians.

What is all this about? It is very simple. Over 30 years ago, Bob was right. We were eating our seed corn then, and that has continued to this day. And many want to continue.

That train I wrote about six months ago when I last posted speeds on nearer the abyss. At some point it will get too late to stop it in time.

Somebody needs to get serious about this, or we need to throw them out.

Imagine a train

A very long train, with the United States on board. Call it the Gravy Train, for a name.

This train has been speeding down the tracks for many, many years. It has been a great party for most on board, though not for all.

At the end of the track it is running on there is an abyss. Nobody knows where the end is, but it is there.

It might be one mile away, ten miles, 100 miles; nobody can know for sure. We only know that the train must be stopped before it reaches the abyss, or there will be a terrible train wreck.

We also know that the train takes a long distance to be stopped, so there can be no waiting until the last moment to apply the brakes.

The only way to stop the train is to stop the party. Everyone will have to give up some of their gravy. It cannot be stopped any other way.

Meanwhile, the Engineer is opening the throttle. The train is picking up speed rapidly.

The rest of the crew is dithering, doing little at all to stop the train.

Some of the passengers are getting worried, many are just ignoring the speed and are enjoying all the gravy.

Very little is being done because nobody on the train wants to give up any of their gravy.

So the train keeps speeding toward the abyss. Will it be stopped in time?

It doesn't look much like it.

This little story should seem familiar. Our government has a huge and growing budget deficit and huge and growing entitlement commitments that cannot be paid for under any scenario.

The President has offered a budget proposal that will increase the deficit considerably. His party which controls the Senate is fighting to preserve current levels of spending.

The other party, which controls the House of Representatives are engaging in tokenism so far, and were split on a vote this week that would cut a mere $22 billion from the $1.5 trillion deficit.

The only conclusion that I can reach about this is that we are governed by morons.

Who will lead the political revolution that is needed?

Is Egypt Iran Redux?

We are at the 32nd anniversary of the overthrow of the Shah of Iran, sped along by Jimmy Carter when he abandoned the Shah to the Ayatollahs. That had a great result, putting one of the chokepoints for the world's oil supplies in the hands of radicals who hate the United States.

Now we see the same thing going on in Egypt. And sure enough, our bowing and scraping President is abandoning our long time ally Mubarak.

To be sure, both the Shah and Mubarak are/were SOBs. But they were OUR SOBs. Those that replace(d) them hate us. And they are still SOBs.

Carter had no plans for the aftermath of the Iranian Revolution, and now, our government is apparently going to allow the Iranians to produce nuclear weapons, as well.

Obama? Where does he stand on Egypt? Unprepared, quite obviously. When the phone rings, there is nobody to answer it, not even Hillary.

Egypt has been the linchpin of our Mideast policy, helping to keep the shaky peace between the Israelis and the Arab nations. It also controls another major chokepoint for the worlds's oil supply, the Suez Canal.

And Obama........well, he opines that the Muslim Brotherhood would be fine in the new government. That is the grandfather of all Jihadis groups, and has just this week called for war between Egypt and Israel.

What could go wrong?

The Financial Crisis Commission Reports

It reported, and didn't really add anything to what we didn't already know.

Six Democrats and four Republicans did interviews and investigation, and probably could have read Sorkin's book TOO BIG TO FAIL and derived the same information. They also could have read Simon Johnson and James Kwak's book 13 BANKERS. Both of those shed a good bit of light on the situation.

The majority report is 545 pages, and from the reviews I have read, most of it just repeats the same things found in the above books, although I doubt it makes the allegations made in 13 BANKERS. That would not have been politically correct. I don't think I will bother, but it is available on Amazon in paperback for under ten bucks.

What it boils down to is that a partisan majority blames the banks, a partisan minority (of one) blames the government, and the rest of the Republicans blame everything and everybody.

So much for that waste of time. The government at least appears to have "done something" when, in fact, it has done nothing but perpetuate the problems at the expense of the taxpayers.

And all the politicians wonder why the Tea Parties are gaining influence.

The State of the Union

It sure didn't take Obama long to solve the fiscal crisis here in the US.

He is going to freeze spending!

This occurs at the point where the Congressional Budget Office confirms that spending at current levels will result in a $1.5 TRILLION deficit this year.

That will certainly get the job done.

The state of our union is going to be desperate until we get better leadership.

Sigh.

Musings on a Monday

Fooling around on a chilly Monday, a few thought have occurred to me:

First, The New York Times reports that our Congressman, Randy Neugebauer, has blown the whistle on a large scam taking place at Fannie Mae and Freddie Mac. It seems that the taxpayers have paid the legal bills for some of the worst of the perps in the greatest banking fraud ever....to defend them from charges of civil fraud!

The scandal of the banking collapse, the government bailouts of the perpetrators, and the government coverup of all the fraud needs to be fully exposed. Go Randy!

Secondly, it appears that one of the big perps, Jeffery Immelt of General Electric (General Electric Credit Corp.), has been appointed to a high economic post at the White House. He will know how to bail out the perps even more at the expense of Main Street Americans.

One wonders if there is no shame in Washington, D.C. But not for long. Clearly there is none.

Third, I note that Texas Tech has won in the Court of Appeals in the Mike Leach case. I have not read the opinion, and have no thoughts about the ruling.

From the news stories, it appears that Tech is not bound by the contract it signed, and is immune from any damages it might be assessed if Tech doesn't pay under its terms.

Bad news for Leach, but I wonder how everyone else that has signed contracts with Tech feel?

New Year's Resolutions

Christmas has passed and we approach the New Year, so it is time for some resolutions.



Not for me. For Uncle Sam.



Mine are the same old ones: lose weight and avoid going broke.



Uncle Sam needs a lot more than that, so here goes with what I think they should be (in part):



1. BALANCE THE BUDGET!



Now. Not 10 years from now; not 5 years from now. Do it NOW!



How to do it? Cut spending. How about cutting the budget to where it was on September 1, 2008? That was before the bailouts started. A good start. But not enough.

Restore Federal employment to the level of September 1, 2008, then cut it 10% across the board, except for the uniformed military.



Taxes? Tax rates don't need to be raised. Just do away with all of the tax shelters that the very wealthy use to avoid paying taxes.



No more tax subsidies for anything. If it is not profitable without tax breaks, then let the resources go to something that is. (this would include the oil and gas depletion allowance, something dear to my heart, among other things).


Stop subsidies as well, for the same reason. (this would include farm subsidies, and the ethanol subsidy, also very dear to close friends).


If that has not insulted everyone, I could continue. The point is that nothing should be sacred except preserving our economy and our freedom. Everyone will have to pay up. It has to be an equal opportunity cutting contest, with no sacred cows. Everything must be on the table.


It has to be done, so get started..



2. Pass a Balanced Budget Amendment to the Constitution that would require a balanced budget every year unless a super majority of Congress and the President declared a national emergency. There needs to be teeth in it so the politicains can't ignore it. 'Nuff said.



3. Do away with Too Big to Fail.



If a financial institution or large corporation is that big, the law should require that they be broken up. Think Teddy Roosevelt.


A corollary to that would be to reenact the Glass-Steagall Act, or something that accomplishes the same thing.

The big banks and bankers are getting fatter and fatter, while our middle class shrinks.


Go back and strengthen the extraordinarily weak regulation of financial institutions that was passed last year. Congress let the perps write their own rules. Ridiculous!


With the above, outlaw bailouts of corporations (and states, and municipalities) that go broke.



4. Enact a Sunset Act which would subject every Federal agency and program to expiration if not renewed every 10 years. No exceptions.


Texas has one that is pretty good. Model it on theirs, but stronger.



5. Reform Social Security.



Gosh, where to start? Begin by extending the age of eligibility to 70 years gradually, like it was previously extended to 67. Then index the eligibility age to life expectancy in the US.


Remove the Social Security tax from the general revenue budget, and restore the trust fund ( really too late. That horse is out of the barn.).


Establish a way to begin changing Social Security to a defined contribution plan rather than a defined benefit plan, like the private sector is doing.



6. Reform Medicare and Medicaid.


I have to admit that I do not have a clue about these.


Obviously, the benefits will have to be reduced. There just have to be limits, particularly on end of life payments. Tough choices there, but they have to be made. It needs to be made the right way, by doctors, patients, and families, not bureaucrats. Although the right is critical of Medicare supporting end of life counselling, my view is that it is necessary to encourage families to plan ahead for that eventuality. My family has. We have medical powers of attorney, living wills, and the like. Everyone should.


Premiums and deductibles for Medicare will have to be raised. The same for Medicaid.

While we are on health care, Obamacare needs to be replaced with something less intrusive. Some reform was needed, but the bill went WAY too far.

Other suggestions are quite welcome.




7. Bring the boys (and girls) home.



No great power has ever pacified Afghanistan, and we can't do it now. If we did, what would we accomplish? There is nothing there that is worth the expenditure of lives and money that is required. Declare victory soon, and bring them home.


Keep the carrier strike groups in the Persian Gulf, however. We will need them when Iran makes their first nuclear weapons. That could be another resolution, but I will resist.



8. Secure the borders now.


When that is accomplished, and only then, we can make some strides on a humane way to deal with the illegal immigrants that have been here for a good while. But there should be no blanket amnesty.


We can also then reform our immigration policies to make immigration more available to other than those who come illegally. Our current rules are way too restrictive. We need to be a bit picky about who we let in as well, but based upon skills and education, not race.


Before anything else the borders must be well secured first. And soon.



This is just a few of many things that are needed. Both political parties have contributed to a terrible situation that is a real threat to our country in many ways.



They have both sold out to the big money folks and the big labor unions. Campaign contributions are far more important to our elected officials than doing the right thing.



The big banks, labor unions, and politicians are thriving, while the middle class and the lower class is suffering.


It is time for a change, but for the RIGHT change.

This is not a complete list of what I think should be done, and I am not married to all the details. But the overall resolutions are quite necessary, in my opinion.

Clearly, the economy is not singled out for a resolution. The government just needs to get out of the way of the economy, and the other resolutions will help that quite a bit.

Other suggestions are welcome, either on this site or on Facebook.

Fire away. Let the conversations begin.

Bill Clinton and the Tea Party

Former President Bill Clinton, best known for having soiled a blue dress in the Oval Office, weighed in on the Tea Party menace a few days ago.

He is afraid the limited government rhetoric of the Tea Partiers will lead to another act of domestic terrorism like the Oklahoma City bombing.

Naturally, he leaves out the really pertinent point: that McVeigh bombed Ok City in response to Bill Clinton's mangement of the seige at Waco.

You can read a good story on the subject by Tony Blankley here.

At the same time that he was trying to trash the Tea Party, a real incident of domestic violence was taking place.

A young woman staffer for the Republican Governor of Louisiana and her date were leaving a function in New Orleans when they were set upon by left wing thugs, viciously assaulted and hospitalized. This for wearing Sarah Palin pins. More on that here. And parts of the police reports are here.

Of course, there has been no media coverage, and certaily no comments from Clinton or other Democrats who are so concerned about violence in the political sector.

Double standard?

Trashing the Tea Party won't work.

Mr. Clinton needs to slither quietly back under his rock.

Musing On a Rainy Friday Afternoon

There has been a lot of moisture out here in West Texas the last few months. Right now, we are at about 2 1/2 times normal, and our rainy season has just begun. I suppose its the El Nino that has been in progress, but the Winter sure felt like Global Cooling.

That does bring to mind the issue of Global Warming that all the liberals were panicked about. We have not heard a lot about that lately, since the science has been shown to have been unscientific. It appears that a lot of it was based upon scientists wanting to be politically corrrect so they could get more government money for research. The rest was based upon doctored evidence that was never disclosed, and "conveniently" lost before it could be checked.

Poor Al Gore. It now appears he will not make the billions of dollars he would have made if the "cap and trade" fiasco had passed.

The problem is, the globe does warm and does cool, and we should be prepared for it. Right now there appears to be temporary cooling, but by the time we really establish that, it may well be warming again.

That is what the earth does. It warms for a while, then it cools. In the last 100,000 years we have had several cycles of warming and cooling. Humans have always adapted to it. We need to be prepared to adapt to it again. We can't stop it, and to try would be foolish.

Back to the rain. It caused the postponement of the Tax Day Tea Party on Thursday. Too bad. I was going to go, as I did last year.

It has been very interesting to see how our political left and their minions in the media have treated the Tea Partys over the last year.

At first they were "right wing extremists" then moved on to be racists and Nazis. That did not work, of course, because none of it was true. They also tried to set up some individuals as "leaders" of the Tea Party and tried to tear the Partiers down by attacking those "leaders." That didn't work, either, mainly because the Tea Party groups are all local folks. Its a movement, not an organization.

The lastest is a New York Times/CBS poll that asserts they are rich and well educated, and not representative of a cross section of the citizenry. That will fail as well, because its not true. Obviously, the media has not covered the actual Tea Partys enough to have a clue about them. Or they don't care about the truth.

I wonder what they will try to come up with next.

On a Personal Note

Back when I started this blog, I knew little about it, but did so because a friend of mine did it, and I thought it might be fun to do.

At the time, knowing that there is nothing really anonymous on the Internet, I determined that I would not hide my identity, and that I would scrupulously abide by the Texas Code of Judicial Conduct.

As a result, I have kept my commentary entirely on political issues of national interest, and have not posted on any issues that might ever come before me when sitting by assignment.

I welcome and encourage comments on the issues presented on this blog. I know that there are many who do not agree with my viewpoint, and welcome your input.....as long as it is on issue.

Lately I have been having another kind of commenter......some who would use the comments to anonymously criticize rulings or decisions I have made. These comments are not welcome, and have been, and will continue to be deleted.

All I can say to those people is that if you do not agree with me, just appeal the case.

If you wish to complain to me, then call me. I probably will not discuss any case with anyone, but at least you can honestly express your opnion before I hang up.

Those who would be cowardly and try to hide behind anonymity.....well, reread the second paragraph.

The Ides of March

This year the Ides of March bring the new "final" push by the Democrats to impose Obamacare on a very reluctant nation.

Rasmussen says that the current bill (to the extent anyone knows what is in it) is supported by 43% of the country, while 53% are opposed.

They do not appear to have the votes to pass the bill by ordinary means, so we are seeing all kinds of manipulations in the House to try to force it through.

We will see how many House Democrats are willing to walk the plank for Obama and Nancy Pelosi.

Meanwhile, Paul Ryan, a Republican Congressman, has an excellent article up in the Washington Post today. Read the whole thing. Its good.

His analysis, in part, includes the following:

"...Through any analytical lens, the legislation will not address the central problem of skyrocketing health-care costs. The Congressional Budget Office estimates that families' premiums could rise 10 to 13 percent; private-sector actuarial estimates top these already high numbers. The higher costs are driven by federalizing the regulation of insurance, narrowing consumers' options and reducing competition among providers. The health-care market would be dominated by government programs and the largest insurance companies, operating as de facto government utilities........"

"This legislation includes a range of job-killing tax hikes and controls on all Americans -- to fund this new entitlement and to penalize employers and individuals who don't play by Washington's new rules........"

The bill is a bad one that really does not address the real concerns that the public has about health care. Rising costs are not solved.

So what are the real purposes of the bill? Ryan explains:

"....If this debate had actually been about health care, we could have worked together to get a grip on costs, make quality care more accessible, address exclusions for preexisting conditions and realign the incentives of insurance companies with those of patients and doctors. Yet this process -- including its embarrassing conclusion -- demonstrates that the debate has never been about health-care policy but, instead, paternalistic ideology....."(emphasis mine)

His conclusion:

"...Should the Democrats' health-care train wreck make it to the president's desk, it will be a pyrrhic victory, and its devastating consequences will take their toll on our health-care system, our budget and our economy."

I emphatically agree. But a bright side of all of this is that the legislation, the way it has been forced on Congress by the Democratic leadership, and all of the shenanigans involved in its passage, will likely doom the Democratic Party to minority status for some time to come.

Now what we need to see is a Republican Party that will step up. So far, when given the chance, they have failed to do so.

Maybe some of the young leaders like Paul Ryan will be the Republican Party of the future.

The leaders of the past have largely failed.

Don't tell us......

On February 19, 2009, a guy named Rick Santelli, a CNBC business news broadcaster, set the Internet afire with a rant about taxpayers having to bail out defaulting mortage holders. A Youtube version of the rant spread over the Internet like wildfire. You can find it here.

In it he called for a Chicago Tea Party to protest the bailouts.

Boy did the idea catch on. All over America, mad citizens determined to protest what was happening in our government. It was a spontaneous movement, not created or led by anyone, unless you want to credit Mr. Santelli with it. He, of course, had no idea how his rant would catch on with the people.

Now in its second year politicians and press from all sides of the spectrum seem to amazed, even frightened by the movement. They should be.

Many are even setting up strawmen in the movement to tear it down. We see the press trying to set up a lot of people as "leaders" of the movement, then attempting to discredit the movement by being critical of the "leaders." (Some of the people they have described as "leaders" or "founders" of the tea party are pretty bad people, others very controversial.)

This is an attempt by them to discredit a grassroots citizens' movement falsely and by design.

There is no particular leader, although there are many activists who speak up. Most who claim to be leaders are doing so for their own purposes. So don't believe it.

But on to the title point.

A dear friend of mine, who happens to be a liberal, sent me two articles today from Politico.com, a reputable online source for political news.

One titled Republicans woo wary tea partiers dicusses how GOP Chairman Steele is engaging with 50 "leaders" of the tea party in hopes of enticing them into the Republican Party. For most of them, that will not work.

The other article was entitled Conservative manifesto coming soon. This is a story about a large group of Republican leaders and thinkers are getting together a new manifesto describing the basic Republican mission statement. This is also a response to the tea party movement.

I want to break the news to Mr. Steele and the other Republicans and to the Democrats: you people have had your chance. You had the chance to govern well and you blew it. Badly. Both parties.

The time is over for you to tell the people how and what you will or will not do. No more top down pontificating and then continuing on as usual. That day is over for now.

It is time that political power again starts flowing from the citizens to the politicians rather than the reverse.

What we want to see from you is actions. Your words are not meaningful. So listen instead of talk. Act instead of pontificate.

Show us.

We Have Met the Enemy............

Yes, POGO had it right all the time. Its us. We did it to ourselves. Can't blame anybody else.

What, you ask? The answer is a huge mountain of debt as high as one can see.

Last week, the Congress of the United States passed an amendment raising the debt limit by $1,900,000,000,000.00. That is $1.9 TRILLION.

The debt is already in excess of $14,000,000,000,000.00. That is $14 TRILLION.

But that is not all. There is an additional $60,000,000,000,000.00 ( $60 TRILLION) in unfunded future liabilities for things like Social Security, Medicare and other so-called entitlement programs.

We can't pay it.

We have about $2.5 Trillion in tax revenues coming into the Federal Government annually. The Federal budget for the upcoming fiscal year is in excess of $3.8 TRILLION. For the first time in history, the Social Security tax will not bring in enough to pay current obligations. Left unchanged, it probably never will again.

None of this even counts the huge debts of states like California, or the huge consumer debt load that exists.

Who will pay for all of this? How will they pay it?

There are those who blame the politicians for the mess. There is a lot of blame to go around, certainly. The situation in Washington is corrupt, dysfunctional, and overly partisan. Both political parties have bought into spending money that we don't have. Each side wants to reap the rewards of power and have the free rein to funnel public money or tax and regulatory breaks to their friends and contributors. Almost every one of the elected officials in Washington should be thrown out for having bought into that system

But its too easy to just blame the politicians. Our country is pretty evenly split between folks who are "conservative" and want low taxes and smaller government, and "liberals" who want higher taxes and more government.

Usually, there is a healthy tension between the sides that keeps the government more or less to a center course. But since the politicians of both sides are committed to spending rather than saving, we get more debt.

Let a liberal want to raise taxes to help pay for all of this, and every taxpayer gets riled. If a conservative wants to cut spending and cut taxes, then the other side gets riled.

We the people put a lot of pressure on Congress to preserve our pet spending programs or tax breaks or regulatory scheme.

The result has often been cutting taxes and increasing spending. Sometimes its been raising taxes and raising spending.

It just doesn't work. We need a new paradigm in Washington.

We are in such deep trouble that we must come together and make some changes. Everyone is going to have to give up something in order to cure the problem.

Spending will have to be cut; taxes will have to be raised. Everyone will have to pitch in. We just can't go on this way.

Nothing will get done unless everyone is called upon to make the sacrifices necessary.

If we don't stop, we become a Banana Republic, and our children and their children will suffer greatly.

Good News?

The headline story on Drudge this morning was about the reported 5.7% increase in GDP this morning. If it were real, that would be very good, and an important improvement in the economy.

Unfortunately, its a statistical gimmick more than anything else.

All but 2.2% of the improvement was because inventories have stopped declining so fast.

"About 60 percent of the fourth quarter's growth resulted from a sharp slowdown in the reduction of inventories as firms began to rebuild stockpiles depleted by the recession."

The best of it was a large increase (from a very low level) in exports, but that was tempered by a decrease in the growth of consumer spending.

The elephant in the room, of course, is employment and wages. My view has always been that there is no real economic recovery without employment improving. So far that is not on the horizon.

Megan McArdle, over at The Atlantic, says it pretty well:

"But man cannot live by GDP alone. I'd argue that the better measure of whether the economy has returned to health is employement--at least, that's when the improvement starts to translate into improvements in peoples' real lives. Prolonged unemployment is one of the most crippling things that can afflict people in the modern world."

Ed Yardeni in an article at the Washington Post, commented before the numbers came out:

"A lot of it is the arithmetic of inventories," said Yardeni, who is expecting a 6.5 percent jump in the GDP number. "Even if there is a very strong number for the fourth quarter, if it's [all because of] inventories, it will raise real questions about the strength of the economy in 2010."

There will be more reaction to the GDP release. I will try to keep updating this post as more comes out.

UPDATE:

The Wall Street Journal has reported on wages for 2009:

"Wage and benefit costs, both before and after adjusting for inflation, grew more slowly 2009 than any year since the U.S. government began tracking data in 1982 as double-digit unemployment weakened workers’ ability to command higher pay.

"Over the past 12 months, the cost of wages and benefits for workers other than those employed by the federal government rose 1.5%, according to the Labor Department’s employment cost index. Over the same period, consumer prices rose 2.7%."

There can be no recovery in the economy until good paying jobs come back.

UPDATE 2:

The Economic Policy Institute points out that the measure of demand from US households and businesses is still decelerating:

"A measure of the strength of demand coming from U.S.-based households and businesses (final sales to domestic purchasers, a measure that excludes export growth and includes import growth) grew at only a 1.7% rate in the quarter, actually decelerating from the third quarter growth rate of 2.3%. In fact, this quarter saw the largest divergence since 1987 between the overall GDP growth figure and the growth rate of domestic demand. In short, nothing about today’s report should lead to upward revisions in forecasts for economic growth over the next year, which generally hover around the 3% mark. This projected pace of growth would likely not even drive the unemployment rate below 10% by the end of 2010."

It appears that some parts of the economy may have some improvement, but its not yet reaching Main Street.

UPDATE 3:

Mish Shedlock finishes off the day with:

"Digging beneath the surface there is nothing to cheer about in the GDP numbers. Moreover, this weakness is in the face of the largest stimulus measures the world has ever seen, not just in the US, but globally. Money supply in China is growing at 30% and housing bubbles are likely to pop in Australia, Canada, and the UK. Problems in Greece, Spain, and Iceland continue to mount."

And:

"GDP is a mirage of sand blowing in the wind. So is global growth. It is a mistake to believe government spending can possibly provide a solid foundation for a lasting recovery."

It should also be noted that the huge pop in the commercial real estate bubble that is impending cannot support a recovery absent another huge bailout of the banks by the taxpayers.

I will repeat my view: There will not be a real recovery without jobs. Anything else will be smoke and mirrors.

The State of the United States

No, not the speech, although I will get to it later, perhaps.

The state of our country is not good. We are mired in a deep recession with high and growing unemployent, and only the huge institutions that were bailed out by the government are showing profits. Main Street still suffers.

We are in a situation caused by a huge expansion of credit wherein large financial institutions, both private and semi-public engaged in wild speculation, creating a bubble in real estate, and then the bubble popped.

This had the effect of destroying much of the capital of the financial institutions, but also the capital of the general public.

With the bubble gone, the US Government under George W. Bush stepped in to socialize the huge losses of the financial institutions, but not, of course, the huge losses that had been imposed upon the general public. (I call this the Golden Rule) In fact, the general public will end up paying for the financial institutions' losses as well as their own.

Hope and Change gets elected and promptly nationalizes General Motors and to some extent, Chrysler.

Relief for the general public? Hardly.

Next is a huge "stimulous" bill that goes primarily to large Democratic political constituencies, adds nearly a trillion to the deficit, and accomplishes nothing but add further burdens on the general public.

We then get a Cap and Trade Bill that is rushed through the House without being read. This bill would add hundreds of billions to the costs of energy....to be ultimately paid by whom? You got it. The general public.

With the first of these matters a movement began to form: The Tea Parties. The public was awakening. But the politicians ignored them or put them down as extremists. Who were the partiers? The general public.

After Cap and Trade passed the House, the Pelosi crowd began to attempt to socialize our country's medical care. Behind closed doors.

It was if the Iron Curtain was rebuilt right there in Washington, D.C. Everything was done behind closed doors. In secrecy. Few know what kind of deals were made to buy "support" for the bill, but what is known is that it was terribly unfair to.........the general public.

A similar bill is now pending in the Senate, where the majority party is still trying to push it through, in spite of the opposition of....the general public.

So here we are after one year of Hope and Change. We have no hope, and only a change for the worse.

Elections in Virginia and Massachusetts have given the general public a chance to be heard, but from the State of the Union speech last night, it is clear that the lessons have been lost by the politicians in our government.

Maybe they should all watch and listen to the ad that newly elected Senator Scott Brown ran during the campaign in Massachusetts. It is one of the very best I have heard in my over fifty years in politics.

You can find it here. If you do nothing else, go to this ad.

The public will get little, if any, relief from the policies spoken of by the President last night.

But we can get relief in November when we have the opportunity to throw all the rascals out. There is Hope, after all.

Who will lead the revolution?