2009/9/24 Credit Where Credit is Due
I disagree with just about everything President Obama does, or at least the things I hear about in the news. But I have to give him credit for some good things. For example, former President Carter has been saying in public that opposition to Obama's policies is based on race: disagree with Obama, and you're a racist, plain and simple. Hearing this kind of judgment from Carter makes me increasingly happy that he's an ex-president. Meanwhile, Obama has said in public that he thinks this "disagree with me and you're a racist" notion is just not true.
Even though I didn't vote for Obama, I am very happy to live in a time when a black man can become President of the United States. It shows we're getting somewhere positive on some issues, anyway: the color of your skin is no longer a significant obstacle in this country. We have a long way to go on a lot of issues, and much of that distance involves repudiating much of what Obama thinks, or what he wants to do. But being black or brown or red or yellow or white or whatever has nothing to do with it.
So I want to applaud President Obama for being upfront about Carter's boorish race baiting. I may disagree with Obama's policies, but in this regard, anyway, he's being the kind of straight-up guy this country needs.
And when Louisiana Governor Bobby Jindal, a man of East Indian
parentage, runs for President, it appears likely at this point that
I'll vote for him. Jindal is not the fabulous public speaker that Obama
is, but what he thinks and does is more in line with the way I think things should be.
And now I have to applaud someone else I generally disagree with. To say I generally disagree with Iranian President Ahmedinijad is an understatement. But in his address to the U.N. yesterday, he said something to the effect that a system that survives by printing money is a failure. He's right about that. The strange part is that he applies this complaint to "capitalism", which can only result in a guffaw. If he wants to complain about "current American monetary policy", that's just fine: so do I. I'm sure the actual root of his complaint is that worthless American funny money is what he's being paid for his oil right now, which is a very capitalist kind of complaint to make.
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2009/3/10 They're Not Listening
Nancy Pelosi says we should get ready for another "Stimulus" Package real soon now. This news came along with news of the passage of the pork-laden spending package. Who are these people? And why did we elect them? Do you believe we can borrow our way out of a problem caused by excess borrowing?
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2009/2/6 Bailing Out
Perhaps you've seen the diagrams used by economists to describe the flow of money through a working economy. These pictures have lots of loops in them, as money in one part of the cycle feeds back into other parts of the cycle, and the amount of money in any part of the cycle is indicated by the width of the arrow representing that part. Some people think this is interesting.
A few decades ago, some economists claimed that, if you want to pump up the economy, it doesn't really matter where in the cycle you do it. If you fatten up one part of the cycle, the other parts will follow suit, because the money flows around through all these loops. This was the underlying claim of Roosevelt's New Deal, and it is the underlying claim of the current "Stimulus Package" being promoted by our new President.
I have news for anyone who accepts such a claim: if you want to fatten up the economy as a whole, there is only one place in this cycle that matters. That place happens between two private people for private reasons. At this place, one person says "I have or can make something that is worth more to you than it is to me." And the other person, of his own free will and at the same time, says "I agree." That's it. This is the place where Value is created, and it is the place where Value's tangible proxy, Money, begins to flow. Anything else a government does to improve an economy is purely a matter of not making it worse.
If you want to understand the Stimulus Package, here is a very good analogy. The language is a little harsh here, but it is appropriate in this case.
The Stimulus Package is a matter of someone from the government reaching way far up your ass to take the food you would have eaten tomorrow out of your mouth so that you can eat it today. Or, more likely, so that someone else can eat it today. The claim is that, without this treatment, you, or that someone else, will die today. Whether that is in fact true is debatable: hunger is not the same as death. What is not debatable is that people who make such claims don't want to talk about the tomorrows that will probably follow their version of today.
Let's talk about history a little bit. Wanna know how the Great Depression came about? In the 1920s, the stock market was going crazy. Lots of people were getting rich, at least on paper, buying stocks. So lots of other people started buying stocks, too. A lot of them borrowed money to buy stocks, because the market was only going up, and it was obvious that you couldn't lose. Then people started borrowing money to buy tangibles, where their collateral was their stock holdings. Herbert Hoover, our President at the time, and a very smart man, noticed this and thought it wasn't a good thing. He suggested to Franklin Roosevelt, then Governor of New York, that something ought to be done about this. This was considered the right way to approach things at the time, because the Feds weren't what they are today and the Stock Market was in New York, Roosevelt's state. Roosevelt told Hoover to go pound sand. Eventually, somebody figured out that all these stocks were just a bunch of paper, and any value they once had had been borrowed against and already used up far into the future. In other words, they had no value today. When the stock market crashed, Hoover got the blame, and Roosevelt got the White House. Go figure. Perhaps we'll talk about what Roosevelt did next, and what it actually accomplished, another time.
Wanna know how we got into this current mess? Real estate values were going up like crazy, and credit was cheap. Lots of people either took out loans for expensive houses they didn't really need, or else borrowed the equity in the houses they had. Furthermore, the government insisted that banks give loans to people who normally couldn't afford them. It didn't matter if you lost your job or couldn't make your payments, because you could just sell your house for a lot more than you paid for it and everything would be fine. It was obvious that you couldn't lose. Is this starting to sound familiar? A few years ago, some Republicans were saying this whole situation was looking more than a little shaky, but the Democrats said things were just fine. Yes, that's really what happened. Eventually, somebody figured out that any value all this real estate once had had been borrowed against and already used up far into the future. In other words, it had no value today.
Now keep in mind: I'm not a Republican, and George Bush is not my idea of a great president. One reason he's not is because he went along with the Democrats and didn't reign in the mortgage market, and then he borrowed $700,000,000,000.00 from us to try to fix it after it was too late. And John McCain is not my idea of someone who would have been a great president, either, because he went along with Bush's $700,000,000,000.00 borrowed-money bailout. Now we have Barack Obama, who is telling us we not only can, but must, find our way out of this mess with another $1,000,000,000,000.00 of borrowed money. The underlying claim is that we can somehow hang onto the absurdly fictive sale prices of our homes if we just borrow against them further.
No.
What we need to do now is discover the value of what we have. There is one way to do that: sell it. A lot of things need to change hands so we can find out what things are really worth. This is going to hurt. It is going to hurt a lot. I will probably be hurt along with everyone else, even though I didn't go out and casually borrow my future away. But I would rather get started on that unpleasant process and get it over with, preferably without the additional $1,000,000,000,000.00 loan against all our tomorrows to pay off.
The time for borrowing money is over. It is now time for me and you to create Value. Barack Obama can help us do that by not making it harder for us. We'll be hungry for a while, but we'll get through that. Or we can do what our new President says we must do today, as he tries to fatten up the loops in the economist's diagrams by pumping negative value into them in arbitrary places. That is, by the way, what Roosevelt did, and the Depression lasted for ten years.
Choose.
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2009/1/24 The Employee What Act?
I saw a commercial on CNN on Friday. Slick production: assembly lines, happy smiling workers, welders emitting sparks, the whole range of industrial stereotypes. This commercial was promoting something called the Employee Free Choice Act. I looked it up online. Currently, to certify a union in a workplace requires a secret-ballot election among the affected workers. The Employee Free Choice Act proposes a different mechanism: a Union Guy comes to visit you, and asks you if you want to be represented by a union at your job. You can say Yes or No. If you say Yes, he checks your name on a card, thereby relieving you of the effort of checking Yes on a ballot, which I suppose might be too much for some people.
Now let me rephrase this scenario along more realistic and useful lines: Say Yes to the Union Guys, or they will know whom to ostracize, vandalize, harass, and assault. Don't even open your mouth to say that Union Guys would never do that. Secret ballots exist for a reason: to prevent just this kind of vicious nonsense.
I think it takes a lot of nerve to present this bill under such a name. People who display that kind of nerve need to be shown the door, and don't bother being polite to them as they're leaving. These are the kind of people who will use your good manners against you. Don't let them. And if this topic ever comes up amongst your circle of friends, be sure to refer to it as the Union Goon's Free Coercion Act, just so there is no mistaking the bill's true effect and probable intent.
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2009/1/22 Obama Has Taken Charge
It's interesting watching our new president. He speaks forthrightly, and I always feel like he means what he says. Today I heard him on TV, telling those folks over in the Middle East that things are going to change. Yay, say I to myself.
I read an article this evening: a leader in Hamas says that Obama is already making all of the same old mistakes. He should concern himself with keeping Israel from attacking Gaza, where Hamas is, but not with Hamas firing rockets into Israel. Hmmm. Am I surprised? Not at all.
There are some things that really can change if people only want them to. There are other things that can't, or that won't. I want a president who can think in terms of the first kind of thing, the kind of thing driven by hope. I need a president who can see the second kind of thing, and recognize that no amount of rationality, or benevolence, or hope, will ever bring them to right. It will be better if he can see such things coming, rather than going.
What kind of president do I have? I really don't know. I do have an opinion. I hope he'll surprise me.
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