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We need to see a lot more of this November 25, 2010

Posted by WillardWhyte in Justice, Politics.
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Tom DeLay. Guilty of felony crimes, punishable by time in prison.

He didn’t rob a bank, assault a neighbor, abuse a child. He saw a law he didn’t like, determined he would find a way to do what it outlawed and — in complete contempt of the rule of law and of We the People who put it in place — used his position of public trust to twist the democratic system to favor himself and his followers. He subverted the system we hold dear.

Oh he did that in a relatively small way. And maybe the money he manipulated unlawfully made no difference in the voting. Maybe his cause and the people fighting for it are angels sent to do just that. Not mine to judge all that.

But he broke the law, intentionally. And that is NOT politics as usual. That is a shard in a scrap heap of immorality, injustice and base corruption of souls that permeates our nation’s capital to this day, deeply encrusts our capital markets and commerce and eats away a little more each day at the greatness of our democratic experiment.

Deficits are a problem. Unemployment and slow growth are a problem. Costly inefficient healthcare is a problem. Unproductive and violent citizens are a problem.

But fixing the moral mess must be Job 1. Because if we do not address the lawlessness — the fraud, the theft, the arrogant abuse of position — nothing lasting and just can be done with anything we tackle no matter how earnest our efforts are. The rot will eat away at those fixes also, in time.

A lot of this involves long and expensive investigations, prosecutions and pursuit of appeals to make the point again and again in realm after realm that there is a “right” and a “wrong” way to live, to earn, to govern. And there are real and somewhat immediate consequences for breaking the law. Without this type of deterrence, justice will submit to power and liberty is at risk.

But a lot of this falls to us, also. We cannot abide people who act in this manner, who scoff at laws and make their own rules. Not when they hold an opposite political view — and most importantly not when they share our view and seek to carry a banner we follow.

No manner how smooth, no matter how glib, no matter how gifted they seem, if their soul is thusly corrupted by arrogance, pride and lust for power, they must be cast aside. For within our ranks — Red, Blue or in that vast sea in between — there are far better hands for the task, far better tunics to pin our hopes upon.

We must just say ‘no’ to the dishonest ones, if we are to fix what needs fixing.

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Two men laying bricks to build … something November 21, 2010

Posted by WillardWhyte in Economy, Musings.
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Both of these guys — Apple Steve Jobs and News Corp’s Rupert Murdoch — can make you flinch often with their ego and their controlling approaches. But they have one thing in common that bears considerable study as we all move forward: They lead.

This venture they seem to be proposing does not appear all that radical in its design, though it does funnel distribution through a narrow needle, and of course opens up another potentially large information pipeline to the Murdoch empire — and philosophy.

But there is plenty of room for competition in this too.  Maybe.

The lesson, I think, is far more valuable than concerns about monopoly power or propaganda. And it is a simple matter of men with an idea taking considerable riches and putting them on the line to build something to meet what they see as a need in the marketplace, perhaps hedging the bet a tad with smartness to help create the need with buzz.

It’s a TV model: Here’s what we say is the “news” today, all packaged and buffed and piped to a predominantly passive audience, one that isn’t going to be floating all over the ether browsing. A loyal, measurable audience that can be sold to advertisers now pulling their hair out trying to line up with media with an audience that doesn’t change in the blink of an eye.

Many mega-rich folks out there are sitting on their pile, waiting for someone to point the way to a safe place with a high margin and no downside. They’ll do OK and I guess we need that also.

But we badly need people willing to point the way, hack through the first layer of brush and plant the flag in new territory.

Not just in media. In every realm. Because most of the old streams, mines and deep formations are played out, and new market share comes from someone else’s piece, not from growth.

This isn’t a government thing. Government and make this easier maybe, or harder maybe. And our elected officials need to work real hard to make sure the balance is properly tipped to the former.

But without this kind of vision focused on cultivation rather than on harvest, it does not happen. Stagnation happens.

Serious business for the infantile November 20, 2010

Posted by WillardWhyte in Economy, Greed, Politics, U.S. Budget, Wall Street.
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Exactly when did these two guys — Simpson in particular — become the ultimate in Wise Men?

And from this piece, there seems to be a whole lot of chortling going on over the potential ruination of the U.S. economy if their particular strategy for reducing the deficit — and radically overhauling the entire tax code with little assessment of impact — is not swallowed pretty much whole. Get this:

“I can’t wait for the bloodbath in April,” Simpson said, relishing the prospect of political turmoil. “When debt limit time comes, they’re going to look around and say, ‘What in the hell do we do now? We’ve got guys who will not approve the debt limit extension unless we give ‘em a piece of meat, real meat” in the form of spending cuts. “And boy, the bloodbath will be extraordinary,” he said.

Extraordinary indeed. It’s all a game to him too — the graying, dottering Fox can’t wait for the Hen House to catch fire.

Shameful.

OK — this is a start, if you reject Coburn November 18, 2010

Posted by WillardWhyte in Musings, Politics.
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Bipartisanship and constructive collaboration often begins with the little things — rather, with the easier things. Ones with a shared objective, like this food safety bill that maybe can move.

And breaking the back of things that sow the seeds of discontent also can start with smaller steps — like flatly rejecting the “Christmas Tree” approach to lawmaking Sen. Tom Coburn (R-Okla.) would employ here. It’s back-door lawmaking and it needs to stop — tacking an amendment onto a bill that looks like a good thing, hoping to either kill it with a “poison pill” or piggyback something through you are not forthright enough to put to a vote on its own merits.

Coburn wants an earmark clause on a food safety bill.

Just say ‘no’ to this sort of crap.  If an amendment is not germane to the matters considered in the main bill, it is trickery designed to confuse the matter, game the system or avoid a clear up-down legislative statement and, hence, out of order.

 

This is fun, but … November 14, 2010

Posted by WillardWhyte in Economy, Politics, U.S. Budget.
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…after going through it and saving the nation from deficits through 2030 with mouse-clicks that took about 15 minutes, I find myself wondering about all the ramifications.

My ratio of spending cuts to tax increases was 61-39, and it did not seem like I was taking food out of the mouthes of babies, leaving infirm seniors by the side of the road with just a bone to gnaw on, or leaving the nation wide open to attack — now or a quarter-century from now.

Earmarks, farm subsidies, a 10% reduction in federal workforce and a 250,000 whack to government contractors, reducing troop levels ion South Asia and cutting non-combat military compensation and capping Medicare growth and reducing SS benefits to high-income folks all seemed like areas that could take trims.

Workforce/contractor reductions of 10% would about equal what has taken place in the private sector, with productivity expected to absorb workload. It surely would provide ample incentive to managers to find wasted effort, if only by having to prioritize the most productive tasks and workers. This is always artificial, so I would allow a manager to be able to save a position if he/she were able to identify permanent/verifiable savings equal to 110% of the full cost of that position  in salary and benefits.

Capping Medicare growth to GDP+1% also seemed reasonable, if very difficult. As medical costs will go up with sheer volume more than that, it requires a heavy hand, and that hand would need to find the waste and fraud in a hurry. A good whistleblower program is needed here.

On the tax side, I returned estate tax to 2009 level, with $3.5 million exemption; cut cap gains to Clinton-era levels; kept Bush tax cuts for all but those above $250,000; jacked payroll taxes back up to cover 90% of income (level at original enactment); converted mortgage interest deduction to credit); and enacted bank tax as a disincentive for risk.

I opted against a carbon tax (prefer market approach with cap-trade); a sales tax; millionaire’s tax; and complete loophole reduction.

I opted against the Bowles-Simpson complete wipe-out of “loopholes” because I am a believer in using the tax code, as well as the checkbook, to attempt to steer investment toward things deemed in the national interest — like energy independence, reinvestment of profits into R&D, individual incentives for education. Markets today are extremely short-term in their vision and the government needs to “help” money look longer.

That said, the tax code needs to be overhauled with a “zero-based budgeting” approach — each clause amounting to a “tax expenditure” must be justified after an exhaustive, neutral cost-benefit audit fully identifying where the crutch applies and why.

With all this said, I’ll say I have no idea whether this little graphic exercise created by the Times is “neutral” or “spun” to identify things a “progressive” would target, and not highlight as an option things a “conservative” might want as an option.

And I’d also say that it all kind of assumes all else could be ignored, which I don’t agree with as an approach.

Still, it is quite thought-provoking and worth the time I think, if for no other reason than to get familiar with what really might be “saved” by the various options on this list.  Things like the estate tax don’t really help close the huge gap all that much and might very well motivate hardship-sales of  enterprises best left in family hands. Perhaps another method would be better — such as a ceding of a non-voting ownership stake to a blind trust, with repurchase options to owners or their designees. Perhaps Treasury could pool the combined stake and sell slices into the open market, giving Uncle Sam the cash and shifting the risk/gain to global investors.

It would be nice, maybe, if the Wall Street Journal or Bloomberg joined with the Times in this venture to extend the choices (and in a manner of thinking also vetting the entire deal for “bias”). And perhaps each option could link to pro-con essays or more detailed studies of the risk/reward for each, allowing folks to better understand the pain/gain each choice involves.

Sort of a joint venture in education and reason.

 

One nation, under God, indivisible … November 13, 2010

Posted by WillardWhyte in Justice, Musings.
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I urge anyone and everyone visiting here to read this fine piece by David Brooks.

For we are in the midst of a revolution of sorts. Peaceful thus far, but as Mr. Brooks and many other point out, a seething thing bound for crisis without a steady head or vision.

What seems like a long, long time ago I threw out an idea.  Silly, perhaps. But something akin to this needs to occur. To erase the broad brush of Red and Blue on those maps, to wipe the word “mandate” from the lips of them all — unless that words is read simply as a directive to “fix what needs fixing” — without a murmur in the direction of Blame.

For Blame is what is killing us. A nation divided cannot stand.

We must repair, replace and rebuild. And no individual, group or enterprise can get that done alone.

And no individual, group or enterprise is devoid of wisdom, blessing or energy needed to build new and lasting greatness.

Our union remains a long way from perfect at the moment. We all must change that to ensure that this great nation shall not perish from the earth.

 

You can tax me now — or tax me later November 11, 2010

Posted by WillardWhyte in Economy, Politics.
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Twin stories from Bloomberg — here on Obama and there on Bernanke’s Bucks — have some unsettling news for the hundreds of millions out there waiting for an economic boost to follow the GOP ascent to House leadership, or from the Federal Reserve’s $600 billion buy of Treasuries.

Investors think they are going to get their cash reward with extended tax cuts, like the new climate for investments and see hope for a smaller U.S. budget deficit.

But the view is pessimistic when it comes to any GOP impact on the overall economy, job gains or credit.

And they think  — a whopping 76 percent of them — that Ben’s money move will have absolutely no effect on unemployment in the U.S. And by a 56-41 margin — with 3% too busy bidding up gold to answer — they said the Fed move would not bolster the U.S. economy in the coming year.

They know the purchasing power simply is not there — not across the board as it needs to be to sustain healthy production.

I say this and note this poll not to depress, but in the hope that it helps us all get to the place we need to be: One where we do not expect things to get radically better, radically soon — and govern our expectations well.

The devastation from the Crash of 2008 requires rebuilding the economy and we must demand from our elected officials plans for that — not snake oil promises or pledges or pablum suggesting they can do this overnight.

They can’t — we can’t. Anyone who says they have a magic elixir is lying, rendering them part of the problem.

Oh — I forgot to mention that those investors don’t like Obama.

Gold bars, future oil, cotton ain’t gonna hire Joe the Plumber November 8, 2010

Posted by WillardWhyte in Economy, Politics, Wall Street.
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I found this take on Ben’s money-move to be quite on target. This in particular from Richard Fisher, president of the Fed bank in Dallas:

I could envision such action would lead to a declining dollar, encouraging further speculation, provoking commodity hoarding, accelerate the transfer of wealth from the deliberate save and unfortunate, and possibly place at risk the stature and importance of the Fed.

But Ben knows this, just as he knows that the odds of monetary policy stimulating job growth and greater consumption in the U.S. are extremely long.  It’s his only play, knowing now the fiscal side is headed toward the austerity solution demanded by the voters, ostensibly. And that will take billions out of circulation in 6-8 months.

With no new wage growth on the horizon at anything but the top end, throwing accelerant on commodities and equities and potential bubbles abroad is intentioally destablizing, a sort of drop-the-gloves-and-hope-the-sparks-fly approach that depends on some of the embers landing in the deadwood and warming many.

But Ben undervalues the monkey still perched on the back of money markets —  the jonesing for fast money made with money, not output of goods and services in demand. The dice and spinning wheels and flashing lights still draw the biggest crowd, and garner the loudest roars from the onlookers.

It’s going to help some folks make a good chunk of change on the house, Ben. That’s about it, because a “real job” is still the chump play.

The folks sitting on the mounds of cash are not coming off until your cheap money is all gone and it becomes clear the only way to make money is the old-fashioned way.

Funny, didn’t hear about this on Monday November 4, 2010

Posted by WillardWhyte in Economy, Greed, Politics.
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The guy set to take over the House Financial Services Committee — which oversees agencies regulating banks — shows what’s tops on his agenda: Rolling back financial reforms to let the banks back into high-stake gambling with U.S. government insured deposits. That’s long for: Your money and mine, “insured” by your tax dollars and mine.

Reuters is here and Salon is here. Here’s a quote from Rep. Spencer Bachus’ letter to Treasury Secretary Timothy Geithner and other top regulators, who are writing rules they were ordered to write by the financial reform law passed last spring.

I strongly recommend that your study of the Volcker Rule take account of how trading activities fit into the core business plan of global banks, as well as the consequences for U.S. banks and the banks’ clients of prohibiting those activities in the U.S. while they continue to be permitted everywhere else in the world.

Funny — I’ve read that five times now and I must have missed the part about you and me and how the Volcker Rule would be bad for us and getting rid of it would create jobs.

Well Butch, we’ll get to all you cowpokes out there after we make things better for Wells Fargo.

Hey — thanks Ben. Working out well so far. November 4, 2010

Posted by WillardWhyte in Economy, Wall Street.
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That $600 billion juiced into the economy to jump-start hiring by boosting inflation and spooking folks into buying before things got more expensive?

Well, some of it seems to have leaked out into more commodity speculation, which will drive up prices nicely, but probably will leave most of us with even less disposable income after we buy cereal, beef, poultry and — it seems gasoline and distillates like heating oil this winter.

The WSJournal tells the tale here. The nut is this:

Crude oil futures shot higher on Thursday on the back of a weaker dollar following the Federal Reserve’s decision to inject $600 billion into the U.S. economy.

Futures Market News was looking down the road with this:

Consumers might want to stock up on fuel oil soon – analysts at Wall Street banks believe that oil futures might rise to over $100 per barrel for the first time since the credit crisis hit and wiped out asset classes across the board.

And from the AP regarding gasoline, consumption of which was down another 3% last week according to the Energy Department. Inventories are up as a result. But more cash chasing even high supplies means the price goes up:

The national average for a gallon of unleaded gasoline was $2.806 Thursday, according to AAA, Wright Express and Oil Price Information Service. That’s about 7 cents more than a month ago and 12 cents above a year ago. It will probably keep rising. Some analysts think the price could be a nickel to a dime more by Thanksgiving.

Ben’s betting on the fear of rising prices driving people to buy now, rather than later. That’s classical economics there folks; the data studied over 20 years shows that tendency.

But that was before everything changed, 15 million hit the bricks and stayed there and no one really thinks the bottom’s been hit. Not in their bones. Withthe current consumer mindset, the prospects of the basic necessities like heat, gas, food and medical care going up in the future means: Save more, spend less.

That’s a Depression mentality, Ben. I thought you were a big study of the Depression.

Meanwhile, domestic output is going to go down, at least as measured by GDP, because government outlays are going to go down. Consumer spending overall isn’t going to go up because your commodity inflation will simply transfer current spending levels from one household category to another — that’s mainly because we’re still deleveraging, rebuilding equity and for the most part anticipate no “real” wage gain and certain higher healthcare costs.

And any tick up in interest rates will immediately increase the cost of any debt we continue to carry, since card rates are tied to automatic inflators.

So as gas, food and lodging costs start to creep up in the next six weeks, someone gets whacked from the gift list.

Real wage growth and profit margin moderation will spark recovery, because, Bennie old buddy old pal, most of the nation has been dealing with deflation for more than a year now.

The only thing that hasn’t been deflating are prices of the basics. And now you’ve screwed that pooch too.