Friday, February 27, 2009

One Big A__ Mistake, America


These fine bumper stickers are available from Patriot Depot. Too bad folks did not learn more about President Obama's past before they voted for him. I agree with with former Bush Press Secretary Tony Fratto who said "Trying to mask huge spending increases under the cloak of 'fiscal responsibility' is the height of audacity."

Saturday, February 21, 2009

As California goes, so goes the Nation! Gee, I hope not!

The "Terminator" turned girly man has turned California into France according to Matthew Kaminski of the WSJ. To quote Chester A. Riley, protagonist of the 50s TV show "The Life of Riley," "What a revolting development this is." One of my favorite places on earth used to be La Jolla, but now, I fear that ambiance just won't be the same. Worse, Mr. Kaminski suggests that the rest of the country is not far behind and destined to become a “dysfunctional financial mess” hamstrung by an electorate too accustomed and dependent upon feeding at the public trough and too self-unenlightened to correct the problem.

Consider also that the dean of the University of California, Irvine law school, a public institution, is suing the community of Laguna Beach over its treatment of some of the homeless who have started pitching tents and living on the beach. This despite the fact that “Michael and Robert, wearing sunglasses and relaxing in a park overlooking the sparkling Pacific Ocean, cheerfully list … the meals and services available to them: coffee and Danish brought to the park every weekday morning; bag lunches and dinner feedings; showers, laundry and kitchen facilities at a drop-in center; and shelter during the winter months.” Sounds like they have it pretty good! I understand that we need to support those less fortunate, but I wow, do I wish I lived on the Pacific Ocean!

Many years ago I head a joke that said California was like a bowl of granola full of fruits, nuts and flakes! Clealy the situation has not improved.

Monday, February 9, 2009

Who Created this Economic Mess?

Professor John Taylor of Sanford University thinks our government created the financial crisis and I think he has a very strong argument.

However, Mr. Taylor gives to much credence to the increase in oil prices, which were driven by speculators, and the public's reaction to TARP, which was a need jerk reaction to such large sums and not a studied and thoughtful response to Messrs. Bernanke and Paulson. In my opinion, Jay Leno's person-on-the-street interviews and John Ziegler's HowObamaGotElected.com suggest that the vast majority of Americans probably have no clue who either person is and what they did. So it is highly unlikely that their poor congressional performance elicited a strong response.

Artificially low interest rates and undervaluing the risk of mortgage back securities due to the wrong headed meddling of congress, lax oversight and partisanship where in my opinion the major forces. With stories everywhere about the steep increases in housing prices and a steep increase in the numbers of homes purchased by investors the Fed should have raised interest rates. Unethical relations with the industry like Senator Chris Dodd's with Countrywide and Representative Barney Frank's with his lover at Fannie Mae were probably unethical and diminished congressional oversight to the point that they became cheerleaders for new excesses in the housing mortgage market. And when President Bush and regulators complained, Democrats led by Dodd and Frank defended with partisanship rancor instead of investigating the complaint or providing a reasoned response.

Sunday, February 8, 2009

Consequences

Speaker Pelosi says we are losing 500 million jobs every month, so we need to act now. According to the Census Bureau Population Clock there are about 306 million people in the U.S. The magnitude of Speaker Pelosi's error makes me wonder if she did not commit some other errors of magnitude when she helped draft the Recovery and Reinvestment Act. Increased spending of the magnitude that contained in the Act will harness our future with an incredible debt.

Simple interest on the Act's trillion dollar spending spree is somewhere in the neighborhood of 35 to 45 billion dollars a year. Can we really afford that?

What got us into this mess were rocketing home prices caused by questionably-qualified mortgages, congressional interference pushing Fannie Mae and Freddie Mac to purchase risky mortgages, lax oversight and unethical congressional behavior and historically low interest rates, all of which was rationalized on sky rocketing home prices. That's right. Rising prices lulled lenders into making 100 percent or no money down mortgages. President Clinton pushed through modifications to the Community Reinvestment Act and Congress, instead of providing oversight pushed Fannie and Freddie to do more and accept ever riskier mortgages. Alan Greenspan contributed by keeping interest rates low. All of which kept home buyers motivated to offer ever higher prices. Prices that everyone relied upon to explain their behavior, which in turn pushed prices higher1!

When the government borrows money, it can take on many forms including notes, bonds and bills. But mostly Government borrowing is more like a uncapped adjustable rate, interest only loans. When the government needs money the Treasury issues various instruments and then according to the terms and conditions contained therein Treasury makes interest payments at various intervals. Currently the long term rates are at about 4.5 percent.

The problem is, for every 1 percent increase in the repayment interest rate, we increase our burden another 10 billion dollars. Since there are no market caps on how much the repayment rate can increase or decrease we can not accurately forecast how much this debt will cost us. If everyone stopped supporting our debt and demanded the repayment of their principal investment, the Government would fail. The bottom line is that no one can say or predict with any clarity what will happen and how much we will eventually owe.

Remember the surge in gas prices? Most industry analysts now agree that the most likely cause of the steep and rapid increase of oil prices was speculators. What if speculators start artificially manipulating the Treasury market. Interest rates could shoot up and our debt could skyrocket.

Consider too that this is a course of action from which we cannot retreat. We cannot default or walk away from our debt because once we accept the money and spend it, we are burdened with the debt until we can retire it and repay principal obligation.

Which gets us back to the Act. President Obama, Speaker Pelosi and myriad others say if we don't spend money now we may never recover. But at what price? No one can say for sure what that price is or what will happen if we pass the bill or if we do not.

Therefore, it is my fervent hope that all the Senators and Representatives think about the consequences of the Act before they cast their vote. I for one hope they stand up to President Obama's and Speaker Pelosi's dire admonition that we must do something and vote NO on the Recovery and Reinvestment Act.

Friday, February 6, 2009

President Obama's Speech to Fellow Dimwitocrats

We are in deep, deep, trouble. There is no way the Dimwitocrat's borrow and spend policy is going to stimulate anything but the national debt. Obama said no earmarks. Wrong. Obama said no partisanship. Wrong. Obama said change. Wrong! Wrong! Wrong! President Obama is the very embodiment of partisan politics he derided during his campaign and a bunch of people hoping for better times bought into the canard and elected a consummate politician.

I did not understand the venom the left spewed at President Bush, but I am beginning to get a sense of it. Especially when President Obama laughed at the debt he inherited like it was not something that he did not need to consider. President Obama was wrong when he said tax cuts were discredited. President Bush and Republicans were voted out of office because of the Iraq war and borrowed spending on the war amplified the mortgage crisis we had been teetering on for years. A mortgage crisis made more terrible by Senator Chris "I did not know I was getting special treatment from Countrywide" Dodd and Barney "Supporting my lover at Fannie Mae is not unethical" Frank.

This is a time for sound fiscal responsibility, not unbridled borrowing and spending. We can not and should not rush into a trillion dollar, pork laden, social engineering experiment. Unfortunately, no one seems strong enough or poised to stop it.

Thursday, February 5, 2009

Waterboarding & Islamic Parenthood, A Perspective

Water board a couple of Islamic terrorist and the World denigrates America and accuses Americans of losing their moral compass and authority. For not living up to the high ideals of her founding fathers as contained in the Constitution.

To a certain extent I agree with the turn the other cheek crowd who argue that we should have turned to peaceful means to deal with fundamentally disturbed people who sponsored September 11, 2001. On the other hand, is it reasonable to believe that diplomacy will work with people who believe suicide bombers and honor killings are reasonable?

Consider Samira Ahmed Jassim, the self proclaimed mother of female suicide bombers whose recruiting methods focused on distraught women. And when circumstances did not provide enough natural candidates, dear old Mom may have organized the rape of some especially vulnerable women to enhance her recruiting. Mom then diligently tried to persuade her victims, errr, candidates, that it was nobler to become a suicide bomber rather than to live with the dishonor of having been raped. Clearly mom was a fiendishly thoughtful woman; but, I do not believe she would respond well to diplomatic efforts.

Or how about the honor killing (murder) of a 17 year old Kurdish girl, Du'a Khalil Aswad, who dishonored her family because she was attracted to a Sunni boy. Eight or nine men (probably the girl's father and her brothers and family members and friends -- remember the intent here is to redeem the family honor) dragged the girl from her home and hurled stones and insults at her for over a half hour until she died. This is such a strange and perverse manifestation of honor and religion that it is impossible for me to comprehend.

My brother-in-law believes that there are Americans who scheme and plan ways to Americanize other cultures. This is far too complex a notion for me. Rather, I think, lex parsimoniae, that to any reasonable person American culture, with its freedoms and liberties, is preferable to any other culture on earth. So by comparison, a reasonable person would rather adopt American culture then suffer under totalitarian, tribal or archaic regimes. Certainly I have no time for any culture that would beget mothers and fathers so uncaring of their children. And personally, I think water boarding a few terrorists pales in comparison to the love shown by these parents.

Monday, February 2, 2009

re: Look at the Time, Peggy Noonan, WSJ, 1/30/09

Ms. Noonan is right. America needs it's politicians to recognize that times have changed and the old ways can not and should not be tolerated. President Obama left the crafting of his stimulus package to Congressional Demwitocrats who seemingly just could not resist the temptation to burden the package and taxpayers with amazing amounts of pork. The WSJ's analysis of the package can only justify about 12 percent of porkage as something that can actually stimulate the economy.

President Obama promised change but what he actually delivered was more of the same old partisanship by abdicating his role as consensus builder to the Goldmansachs Head (GSH - coined by Ms. Noonan in her article) suffering Speaker Pelosi and her merry band of pokers. Worse, because President Obama is still the darling of main stream media Republican disapproval was "reported" as Rush Limbaugh vitriol. Remarkably Speaker Pelosi came to the rescue by placing her GSH on display by attmpting to defend her pet condom project as "cost cutting" stimulus.

Americans need to wake up and realize the impact of the numbers being tossed around. Glen Beck's Inconvenient Debt puts our economic troubles in frightening perspective. We simply cannot afford the massive amounts of spending contained in President Obama's Stimulus Package. We need stimulus, but nothing is better than the Speaker Pelosi's GSH based porkage.