Wednesday, October 15, 2008

Keynes Would have seen it Coming....Really??

Letter to the Editor of the Washington Post in response to an Op Ed by Robert Skidelsky on Oct. 14, 2008

To the Editor:

With market capitalism on its heels, Keynesian economics is being saluted by the likes of Robert Skidelsky and Nouriel Roubini with their concomittant load of FDR style "investment" suggestions. Excellent ideas all and even better timing. We have a cash debt of $10T and unfunded liabilities of $50T plus brought on primarily by FDR programs like Social Security, LBJ's add-on Medicare and in the spirit of bi-partisanship Geoge Bush's Prescription Drug Benefit guerdon for the elderly and more importantly, 70 million soon-to-be elderly voting baby-boomers.

The pendulum is swinging far to the left and Mr. Obama hasn't even won the election yet. He will of course, by a landslide.

All the work being done to save the world's financial system in response to the government induced, greed enhanced, mortgage meltdown will go for naught due to an inability to see the real root of the problem; a fiduciary monetary system that can, ultimately, never be controlled by man. A monetary system can only be controlled by decentralized and competing sound monetary systems.

I would like to say this is going to be fun to watch, but it won't. It will be painful.

Friday, October 10, 2008

The Debt Bomb by Rudolph Penner

I can't give this article large enough distribution. It should be required reading for every American. It succinctly describes the implications of our mountain of debt in light of the current crisis. And the opportunity it presents to the next president.

Less anyone think this is some radical libertarian think-tank, it's not. The Urban Institute is a genuine non-partisan public policy think-tank. It was founded by L.B.J. in the '60s and the trustees appear to be balanced between Republicans and Democrats. Of the names I recognize, many, if not most, are Democrats.

There is nothing but truth here. I ask that you forward this to everyone in your address book and recommend they do the same. We need to understand the larger problem. This economic situation is as important, if not more important than the war. For one thing, we'll not be able to fight it much longer if our economy falls apart and should that happen, we'll become even more vulnerable.

It matters not if either Barack Obama or John McCain is elected. They both have spending plans that will have to be canceled or severely modified. Both of them will face an enormous problem, one as president and one as a U.S. Senator. Whomever is elected, he will need our support to get our debt problem under control. This article will help convince the American people the seriousness of the problem. It would help if they would also watch the documentary I.O.U.S.A., a documentary in which Warren Buffet, a supporter of Barack Obama, appears.

Monday, October 6, 2008

The Shift

In this election America will make a significant political shift from the center-right position to the center left or maybe just left. We will elect the most left-leaning politician ever. It has become apparent that John McCain will lose on November 4 and lose big. It will probably be an electoral landslide for Obama. This is disconcerting but it is reality. The Mortgage Backed Security (MBS) induced financial crisis was the last nail in the Republican’s coffin. The president and his party, right or wrong, get the blame or the credit for the state of the economy. The Republicans cannot recover from this. Not with a president as unpopular as this one.

Sarah Palin initially brought hope to the party. She seemed to breathe life into it. It was thought that she might be the magnet to bring those blue-collar (white) Reagan Democrats back into the fold, which could bring Pennsylvania, Michigan, Ohio and other battleground states to the Republicans. But this economic crisis, and it is a serious crisis, will be the end of that. Governor Rendell, on ABC’s “This Week” used the following metaphor. And I paraphrase, “If you’re caught in a flood and a man on the bank has a rope, you don’t care if he’s white or black, Jew, Gentile or Muslim. All you care about is he has a rope and may be able to save you.” Obama’s poll numbers have been steadily increasing since the crisis and unless there’s a foreign policy crisis to offset it, they will continue.

An Obama victory in the current economic climate, however, is problematic. Unless Obama repudiates his campaign promises he will increase the capital gains tax and repeal the Bush tax cuts. He also has numerous programs planned that will increase spending. None of this will help the situation, with the possible exception of the spending programs. The tax increases will without doubt make it much worse. And the additional debt is its own problem. But the American people in their ignorance will think a move to the left will solve our economics problem. It won’t. But then neither will electing the Republicans.

A radical new approach is needed. The patient needs surgery. It should be apparent to everyone that the country is in serious trouble. The country needs to embrace unfetered capitalism, less government and a return to a sound monetary system. Our two predominant political parties are incapable of delivering the remedy. Freedom works.