Monday, December 31, 2012

Obama - Over the Cliff We Should Go?

How else to explain his bizarre "news conference".  News conference?  At a news conference the press asks questions.  This was more like a campaign event...something this president is pretty good at as long as He has his prompter, which He didn't have today.  It's not a campaign event.  I mean he's not running for office; But more on that later.  Why would He, as delicate negotiations were being concluded, mock and chide the Republicans?  There are a few goals, not necessarily mutually exclusive, He may be attempting to accomplish:

1. He was trying to sabotage the talks.  This is the most obvious one.  If so, this is not about doing what's right for the country.  This is about taking advantage of His strong political position to further damage the Republican Party.  Krauthammer says this is short-term oriented but I think not.  Going over the cliff and being able to put the blame on the Republicans will come in handy in a couple of years....say November of 2014.  The country could be forced into another recession for which the Republicans would be blamed which could go a long way to getting Democratic control of the House and extending their control of the Senate.  At which point He'll have two years to implement his far left agenda.  Hey, at that point maybe He could get the 22nd Amendment to the Constitution repealed?

2. There was some trouble in the Democratic ranks and Joe Biden needed some help.  So the President came before the people to give us an update on the progress and managed to buck up his side by assuring them that this was just the beginning of the tax increases.  He promised there would be more to offset the sequestration cuts and help offset or reduce the cuts needed from Medicare and/or Social Security.

3.  The news conference with no questions also made life more difficult for Senate Minority Leader McConnell and Speaker Boehner as it revealed to their rank and file that more tax increases were coming.  But with the Republicans reeling from the election loss and the multiple self-inflicted wounds leading up to today what else can they do?  Vote down the legislation and lead the country over the fiscal cliff?  See part 1 above.

Finally, I don't use pejoratives when discussing the President of the United States so I'm not going say that this guy is a real jerk.  I will also refrain from calling Him an arrogant asshole.  But I will say that as long as I've followed politics I've never seen a president act in as unprofessional manner as this guy.  He is, without doubt, the most duplicitous and rude president of my lifetime.  But unlike Bill Clinton, He is faithful to His wife.  And that is a good thing.

Brewing Up Confusion Krugman Dec. 31, 2012

Mr. Krugman, you are officially part of the problem not the solution.  When you say "the president has already cut spending sharply" that is pure fabrication. And when President Obama said on "Meet the Press" that he "cut spending by over a trillion dollars in 2011", that too is pure fabrication.

In fiscal 2010 total federal spending was $3,456,213,000,000.  In fiscal 2011 total federal spending was $3,603,213,000,000.  So, that's $147B MORE.  Mr. Obama is referring to reductions in increases from a budgetary baseline but reductions in increases are not cuts. 

Now as Nobel Laureate Krugman often notes the crucial metric is growth of debt as a ratio to GDP.  Ratios of less than 90% don't appear to have significant impact on growth but once past that threshold "are associated with 1% lower media growth."

Your attack on "Fix the Debt" is unhelpful and illustrates why you are part of the problem.  I guess you include them in the "Prophecy of Doom" cult.  But they are more inclusive of all options required to solve the problem whereas you and your cult are rather one-sided and exclusive in your position.  By this analysis the Krugman Cult is, well, a cult.

But there's one thing on which we can agree.  The Republican call for cuts in entitlement spending goes against the wishes of their constituents.  Polls show unequivocally that cuts to Social Security and Medicare are not popular.  A majority, even of those sympathetic to the Tea Party, are supportive of Social Security and Medicare.  Once these constituents realize the impact the Republican positions will have on them, the Republican Party will disintegrate.

So have no fear Mr. Krugman, you and your ilk will surely win the day.  And eventually we'll all be worse off.

Thursday, December 27, 2012

Why, God? Maureen Dowd Column in NY Times Dec. 26, 2012

Why, God? To paraphrase Hitch when he asked the same question, "the universe screams, why not?". 
I'm not an atheist but I'm close.  I believe in a universal-consciousness but not a universal all-knowing controlling intelligence.
If one observes what happens in the world it seems to happen exactly as one would expect without a universal puppet-master.
The question I ask is why did God create?  If one accepts that "God is all-powerful and all-knowing" as noted by Father Kevin then one has to accept that God is also prescient and that He created evil.  The angels that rebelled were from God and he knew what they were going to do and create on their own before he created them. 
Sts. Augustine and Thomas Aquinas struggled with this question and could not come up with a satisfactory answer except, that it pleased Him to do so.  Well that bespeaks a selfish, cruel intellect that would create such suffering for his personal entertainment. Why, to assuage the boredom of being God?
After reading Christopher Hitchens the doubt that began in 1996 shortly after my mother's untimely death increased. I tried to be an atheist but found it depressing.  My wife introduced me to Eckhart Tolle and his secular spiritualism and I found peace in being or at least attempting to be "present".
After episodes like Newtown and Webster, I'm even more convinced that Mr. Tolle and the Buddists may be onto something.  Life is about learning to live with and reduce pain.

Tuesday, December 25, 2012

Krugman Cult...yea, there's more

Another Commenter to Krugmans “Prophecy of Doom” wrote "We got into this situation because of Bush's tax cuts, two wars unpaid for, and the Great Recession that clobbered revenue and imposed costs for jobless benefits, etc".

The roots of the Great Recession, because it was based on the housing industry and government/market excesses goes back a several decades. So I'm going to set a premise you may or may not agree with; the Great Recession was inevitable plus or minus a couple of years.

That being said adding up all the Bush Administration tax cuts, wars and Medicare Prescription Drug Benefit (something the left would have made even more generous) comes to a cool $2.9T. Serious money so our deficit would now be $13T instead of $16T (including intra-governmental loans)

Question: Would we not still have a serious problem??

Krugman Cult Continued

A Commenter to Paul Krugman’s “When Prophecy Fails” wrote, “2) You didn't really respond to my argument that it is the softness in the economy that is holding interest rates down, not the Fed's actions. Another way to look at this is to ask what has happened to the $3 trillion in cash that the Fed has injected into the economy by buying Treasuries. People are happy to leave them in near-zero interest earning bank deposits. And banks can't find borrowers in the private sector.”

I'll take a stab at responding to point 2. To the extent that the Fed is holding down short-term interest rates DUE to the softness of the economy then yes. So, it is the Fed that determines short-term rates. But, it would be nice to know what interest rates would be had we a truly free market.

The $3T sits primarily in bank accounts doing nothing except perhaps earning a pittance for its owners.

But low interest rates typically signal to the market that long-term investments are a good idea. The problem lies in the ability of the Fed to unwind all the QE programs and take the $3T OUT of the economy before it get used to fund another boom/bust and potentially inflationary cycle.

The Federal Reserve may function based on Keynesian Economics but although it is loath to admit it, it is aware of the Austrian implications.

Klugman Cult

Here's a cult to fear, the Krugman cult and its faith in government control of interest rates. Let's have some clarity about these low interest rates. Short-term interest rates are controlled by our central bank, the Federal Reserve, a quasi-government entity. But not only does the Fed control interest rates, it's also a significant customer since it owns about $1.7T of bills/bonds in varying maturities.
The Fed has less control over long-term rates. So the Treasury seems to be purchasing more short-term bills at lower interest rates when they should be locking in those 30 year 3% long-term rates but that would cost them (us) more now.  Short-term thinking leads to long-term problems.  Want proof; Despite a recent auction in which $32B in 30 Bonds were tendered only $13B were accepted.
So, have no fear, the Federal Reserve is helping out by buying bonds with created money which increases the money supply dollar for dollar. There's nothing to worry about....Have a great Holiday....all is well. The government has everything under control, even the interest rates.

Thursday, December 13, 2012

Dr. Krugman, "We are not having a debt crisis"

"We are not having a debt crisis". Really??

Interest on the debt currently makes up 6% of the federal budget, call it $227B per year on a $3.6T 2011 annual budget that was $1.9T a mere 12 years ago. It should only be about $2.75T assuming a 3% inflation rate.

Currently interest rates are at historical lows, as Dr. Krugman notes, but it will not always be thus. The 10 year bond currently pays about 1.68%. The long-term average is 5.57 or 3.32 times higher. When rates come back just to the historical average the cost of our debt ASSUMING THE DEBT REMAINS THE SAME, will be about $754B per year...a tad more than the entire current annual Defense Budget.

That additional $527B will come out of the defense or discretionary components of the budget (the rest of the budget, known as entitlements are on autopilot).  The discretionary portion is only 18% of the current budget. Assuming defense remains at its current level it would consume just about all of the discretionary spending that "includes such categories as law enforcement, education, homeland security, environmental protection, transportation, disaster relief, medical research and foreign aid" according to the Concord Coalition.

Don't tell me we don't have a debt crisis.

Friday, December 7, 2012

Where the Keynesian Solution Leads

Let's buy into Dr. Krugman's all in Keynesian solution.  The prescription to the problem is to increase debt (while interest rates are so low) to stimulate the economy to the point where economic growth (a new bubble) will eventually increase revenues.  The increased revenues would be used to reduce the deficit (while increasing the debt albeit more slowly).  I don't recall Dr. Krugman's specific position on Social Security and Medicare but I expect reductions in benefits are probably not a priority.  So demographics will continue to add to the debt as we monetize the Social Security trust fund I.O.U.'s.  And Baby Boomers will continue to make more demands on Medicare which will increase the debt much more than Social Security.

So while the debt continues upward the economy will pick up steam according to Dr. Krugman.  What happens next?  As the economy heats up the Fed will need to real in all that money it printed (with Dr. Krugman's blessing) to keep inflation low.  How?  By increasing interest rates of course.  What the consequence of increased rates?  The percentage of the federal budget that goes to paying interest on the debt goes up.  Currently net interest payments along with Social Security, Medicare and other “mandatory” spending make up 62% of annual outlays, so as interest rates rise the percentage of the annual budget for discretionary spending will go down.  Discretionary spending could be maintained or even increased but only at the expense of defense…not a bad thing in my opinion.  But it can’t go to zero.  There are people trying to kill us and all politicians say that protecting the American people is the number one priority of government.  It’s just not going to be the number one priority in the budget anymore.

But even you hardcore, irrational, arithmetically challenged leftists can’t deny where this will lead.  Social Security, Medicare, interest on the debt will become a higher and higher percentage of the federal budget.   Depending on where interest rates have to go to unwind all that Quantitative Easing it could consume 90% or even more.  This will force reductions in entitlements even more draconian that if we had addressed the problem sooner.

The other way out is a move to true free market capitalism coupled with smaller government (reduced entitlements, less defense spending, etc.), changes in corporate structure and a gradual return, perhaps initially, to a hybrid hard money financial system.  But Dr. Krugman would certainly not approve.

Friday, November 23, 2012

On Death and Religion

I watched a video this morning on the life of a former business associate, Mark Nilo, who died of cancer at the age of 54.  I happened to just finish reading a book by a rather obscure French poet and novelist that I started about 2 weeks or so ago.  It was novel about death and was the first book by Jules Romains the founder of the French literary concept of Unanimism which has to do with collective conscienceness.  I remembered receiving an email with the link to this video and decided this was a good time to watch it, 2 days having elapsed since my father’s funeral.  It was a bit surreal.  I was struck by the randomness of death.

I saw the movie “Lincoln” last night with my wife Jan and my 2nd sister Donna.  There was a scene in the movie when Lincoln asks a question of a Lt. and an engineer.  There were operating the newly invented telegraph which played a big part the war.  He asked them if they thought we were born to meet our specific times…or words to that effect.  The Lt. said he wasn’t sure about himself but thought Lincoln was.  The engineer’s answer was  and  I paraphrase, “I’m an engineer, I believe the machine has been designed then operates on its own”, a very Deist observation, probably a reference to questions about Lincoln's own religiosity.

In the book by Romains entitled “The Death of a Nobody”, a young man who had attended the funeral of Jacques Godard (the “nobody”) a year earlier is thinking about the dead man whom he had never met and is contemplating death, life and eventually his own death and makes a poignant observation, “The beyond, better world, spirit, ghost – all those vulgar catchwords annoy me.  I must drive them away.  Otherwise, they will end by becoming an obsession, and I shall not be able to see anything anymore.”  This can be extrapolated to mean religious obsession or obsession with any idea or ideal can blind you.

This reminds me of a quote Jan and I heard recently….I can’t remember where.  It goes something like this, “Trust in people who seek the truth but not those who claim to have found it.”

Wednesday, November 7, 2012

The Election Part 1

There’s much that can be said about this election.  It could be said that Romney, a Northeast, I’ll be generous and say moderate, was a bad candidate to deliver the message of fiscal restraint and smaller government. True enough.  He never really believed it and therefore didn’t come across very genuine.

There are already calls from mainstream Republicans that Romney didn’t pivot to the middle soon enough to capture those independents.  And if that is the correct analysis then the underlying reason is really quite simple, while American’s poll their support for smaller government, it’s not true.  America has become an entitlement minded country.  It was foisted on us by F.D.R. and embraced by Republicans and Democrats  ever since.  It has taken 70 years to create this mindset and the demographics are not helping.  Until Americans relearn that government can’t bring security, eschew both of these parties and embrace new ideas our slide into oblivion will continue. 

So, on that happy note….Congratulate your Democratic friends and stock up on food, ammunition and buy a generator.

Thursday, November 1, 2012

God endorses Barack Obama

For God so loved the United States he killed 80 people and caused $20B in damage that whoever believes in Barack Obama shall not want but have everlasting entitlements.   Hang in, the blasphemy has just begun….

Hurricane Sandy is the ultimate October surprise.  There’s a reason these things are called Acts of God.  For fundamentalists of all Abrahamic traditions God controls all things.  So, what’s a religious Republican to think?  Has God chosen a side?  Which side has he chosen?  There’s no way one can deduce that this event helps Romney.  He who wants to cut the Federal government and according to the Democratics, gasp, FEMA too.  This storm doesn’t let Romney look presidential.  He AIN’T the president!! It lets President Obama look presidential!! And what does that mean?  Four more Years!!  God help us or continue hurting us??....whatever.

We all know that God is not going to just descend from the heavens and announce to the world his preference for Barack Obama, I mean, this isn’t 1041 BC uh, E?  I mean, ever since the New Testament He’s been more nuanced than that.  And anyway, Barack isn’t exactly the second coming of King David, so God may be putting some distance between His choice and Himself just so He doesn’t get all the blame when things don’t work out.  Hey, wait a minute, God KNOWS what’s going to happen.  What is he trying to pull with this mind manipulating preemptive ballot stuffing con?  Could it be he wants to PUNISH the United States for all its SINS, like legalized abortion and for not allowing the state to endorse religion?  If that’s what’s pissing Him off, go fuck with Europe, Oh wait most of them HAVE state sponsored religion…they’re just not religious.

Well, the irony just doesn’t quit.  If one has to assume that the events of the last few days supports the theory that God has endorsed Barack Obama then all those good religious Republicans have to rethink this election and do what God is obviously signaling to them.  Re-elect Obama to fulfill God’s plan, YOUR plan for America!!!

The writers at “The Daily Show” should wrote this, not me…I’m just saying…

Monday, September 3, 2012

Run Paul Run…Away from that stupid lie

Exaggeration is something we all accept in politics. We also accept it in product marketing. In sales and marketing there’s a concept called “puffing”. Puffing is a slight exaggeration, like, “this is the best car in its class”, or “you can’t buy a better broadcast video server than the Grass Valley K2”.

Saying you once ran a marathon in the high two’s, “2 hours and fifty-something” minutes when you haven't….is NOT the same thing. Even if he had run it in 3 hours and 1 minute he would not have remembered it as 2 hours 59 minutes. You just don’t. I know that I’ve never shot 79 at golf but shot 80 several times. I remember that I never ran a 10K (6.2 miles) in less than 62 minutes which equates to a 10 minute mile average. I remember that. And I don’t have a particularly great memory.

So, my level of trust in Paul Ryan has waned. It’s not going to change my vote because it's still my intent to vote for the Libertarians; Gary Johnson and Jim Gray. It's stuff like this that just really gets on my last good nerve and why I simply don't trust the two major parties. They make for good entertainment but their thirst for power is such that they'll lie about just about anything. Oh, and Gary Johnson REALLY did climb Mount Everest.

Saturday, August 25, 2012

Democratics versus Democrat

Members of The Democratic Party don't mind being called Democrats.  But consistency would require that Democrats belong to the Democrat Party.  But they take extreme umbrage when Republicans call them the Democrat Party. But the english language probably has a rule about this somewhere.   Now I don't know what the rule is.  I made Cs in english.  I'm just trying to figure out a way to be consistent when I refer to Democrats(ics), Republicans and Libertarians.  I mean Republicans are not called Repubs.  Libertarians are not called Libertars.

Members of the Libertarian Party are called Libertarians.  Members of the Republican Party are called Republicans.  Members of the Green Party are called, we'll they're called a lot of things but for this excercise they are call Greens.  But members of The Democratic Party want to be called Democrats.  The Republicans, trying to be consistent typically refer to Democrats as being members of The Democrat Party.  This pisses off Democrats who prefer the more democratic sounding Democratic Party.  Ya'll following this nonsense?

So I think we should start referring to Democrats as Democratics.  That way members of the Republican Party are Republicans, members of the Libertarian Party are Libertarians and members of the Democratic Party are Democratics.  Oh, and members of the Green Party should be refered to as Communists.

Friday, August 17, 2012

Paul Ryan and the 2012 Election

Paul Ryan is the Republican I respect the most but when the history of this campaign is written, it will not surprise me in the least to learn that he lobbied very hard to become vice-president or at minimum made it known that he was very open to the possibility.  He is a very bright and principled legislator who really, really wants to do the right thing for this country.  This selection is interesting on several levels; the impact it will have on the substance of this campaign for which Mitt Romney should be congratulated, the political implications and the Machiavellian benefits to Paul Ryan.

I’ve never been a fan of Mitt Romney but this selection gives me some hope that he’s not the closet leftist I've long suspected him to be.  Having Paul Ryan on the ticket will FORCE the Democratics (and Romney for that matter) to face our present and future fiscal crisis.  But the Democratics will pivot the conversation to their political benefit by taking advantage of our debilitating culture of entitlement.   They will not promise a new entitlement but rather will instill fear of losing a benefit the electorate is already “paying for” and therefore entitled to; Social Security and Medicare.

As Obama’s negative attacks picked up steam in the last few weeks Romney’s numbers started slipping, so a new campaign strategy was quickly becoming necessary.  The choice of Paul Ryan as his V.P., the one man who can explain the fiscal mess we’re in (and a possible solution), initiates a very principled strategy and a debate we should all look forward to.  And speaking of debates, I can’t wait to see Joe Biden versus Paul Ryan.  It should be very entertaining.  But understand this, while it should be much more interesting and educational than the pure gutter fight that was developing, education and campaigns typically don’t mix.  The American people, generally, prefer to wallow in ignorance.

This brings us to the main reason, which I alluded to earlier, why this approach will lead to failure for the Republicans.  The American culture has become a culture of entitlement.  And not just for Democratics; Republicans and independents are all heavily invested in the aforementioned entitlement of Social Security and Medicare.  The youngest “baby-boomer” turns 48 this year.  So, about 17 million of them will be directly affected by the changes Ryan’s plan will bring to these programs, not to mention all 48 million of generation X just behind.  Gen X and the Baby Boomers make up 85% of the workforce.  Paul Ryan, a Gen Xer is atypical of this generation whose “MO” seems center on “what’s in it for me”.

I haven’t read Ryan’s plan yet.  But it’s my guess the Democratic interpretation of it will be an easier sell than the Republican version.

The Machiavellian considerations for Paul Ryan are interesting.  He is 42 years old.  In 4 years he’ll be 46.  The Republicans only give you one shot at the Presidency so if Romney doesn’t win he’s kaput.  This campaign is win-win for Ryan.  If Obama wins re-election the country will devolve further and the electorate will surely be ready for change.  Ryan will have had 4 years to make the case and I suspect more and more people will be open to listening.  If Paul Ryan wasn’t lobbying to be selected as V.P. he should have been.

Sunday, February 19, 2012

The Rise of Libertarianism

The libertarian message has finally become mainstream. And for this we have to thank Republican Ron Paul who after the Maine caucus results said “the revolution is only beginning”. In the long-run this will be great for our country. It means the electorate is waking up (or more accurately re-awakening) to the libertarian virtues of Individual Liberty, Personal Responsibility and Free Markets and not the faux versions promoted by Republican conservatism. But unfortunately, in the short term, the Democratics will be the primary beneficiaries of this phenomenon.

It may not seem like it, but Ron Paul is on fire. The libertarian message is typically relegated to the 1% range. The best showing of a Libertarian Presidential candidate was in 1980 when Ed Clark and David Koch (one of the Koch brothers) got almost one million votes, 1.06% of the popular vote. Ron Paul has been in the 15% range and sometimes much better, like the 36% he got in the Maine caucuses. We were all hoping he would win at least one primary contest but it doesn’t really matter; because it’s about the message, the message of LIBERTY.

Because Congressman Paul has been in the top 3 or 4 in every primary contest he’s being taken seriously. Not seriously enough that anyone thinks he can win the nomination but seriously enough to invite him on Meet the Press, Face the Nation, This Week, Fox News Sunday, CNN. And the message is getting out, well, at least to the political junkies.

Knowing he can’t win, Ron Paul’s goal is to influence the Republican Party and if he can get enough delegates he may well keep some or his supporters loyal to the Republican Party. But I don’t think most of them will be satisfied with a promise to investigate the Fed. No, they’ll look elsewhere and they’ll find Gary Johnson.

This is where it gets sticky for the Republicans and for the nation. Gary Johnson, the former Republican Governor of New Mexico, who managed to get in one, count ‘em, (1) Republican debate has bolted for the Libertarian Party and will likely get its nomination. So, here’s the bad news. Many of those newly recruited libertarians are going to help re-elect Barack Obama by voting for Gary Johnson.

This is going to be a close election. A lousy economy is bad for the incumbent as many of the independents who supported Barack Obama will have second thoughts about voting for him a second time. However, the Republicans are doing a great job of improving the Presidents chances. As I write this, it doesn’t really matter who the Republicans nominate; Romney, Santorum or Gingrich each of them has significant baggage and would be a weak candidate. If Romney loses in Michigan, a distinct possibility, the whole nomination process could be disrupted to the point that even Ron Paul could get the nomination. Ok, not really.

Hence, if the Libertarian candidate can impact a single state (Georgia with 16 electoral votes comes to mind) that would normally vote Republican; that one state could easily give Obama a second term. And I’m personally ok with that.