Wednesday, April 29, 2009

• A Nation Changing First 100 Days

Marking the First Hundred Days of a Presidency is a benchmark, a reflective moment of sorts, and more importantly it is a point at which a nation assesses the job done by its new leader. In an environment where the vast majority of the national media has demonstrated no objectivity in its reporting on the Obama White House, America is being aggressively rushed into potentially destructive economic adventures.

Two social objectives of the new Presidency that should be commended are Obama’s goal to extend the availability of education and the provision of universal health care. That he plans to achieve both in a time of economic crisis is difficult to comprehend, nevertheless, these should be long term objectives worthy of a modern nation since superior education of a country’s youth ensures its stability for the foreseeable future. Even the much maligned George Bush initially set out to bolster educational spending when he stepped into the Oval office.

Obama came to the White House an ideologue, with experience very distant from the world of economics, business and entrepreneurship. He has been energized by a voting public seeking renewal, promises of a better tomorrow, end to the war in Iraq, and deliverance from the weight of the recession.

The President’s principal focus and attention through the First Hundred Days should have been the economy, and should have remained the economy. His shotgun approach to administration has exposed his weakness on the economic front which allowed Bernanke, Geithner and Summers to wreak havoc over the taxpayers’ futures with commitments of trillions of dollars to the banking community. Obama’s lack of knowledge, experience and interest in all things economic, have left individuals who were responsible for the mess, in charge of directing the grand Wall Street bailout program, the stimulus package, and the restructure of corporate America.

Seemingly stuck in silent stupor, the MSM uncritically observes an administration already heading to almost $2 trillion dollars of deficit, and planning the spending of $4 trillion in the 2010 fiscal year. It almost appears as if the numbers have numbed taxpayers. "The size of such spending is incomprehensible, so why worry about it?" “The Administration and Congress aren’t worried, so why should we be?” “Wall Street seems to be in agreement, so that must be good? No?” Bankers on Wall Street are in fact ecstatic with the Administration’s profuse distribution of taxpayer dollars.

Somewhere floating through the ether is the assumption that all this bailout and stimulus spending of trillions by the government will magically create a vibrant surging economy that will enable repayment of the trillions borrowed. Preventing failures of major financial institutions has been sold to taxpayers as “a must do or we all starve,” concept with absolutely no valid presentation of the facts underlying either the size or nature of the bailouts or the assets being bailed or even where the cash really went. All the while Obama promised transparency, … well, actually he pretended he wanted transparency. There is no transparency, but this is a minor footnote on the real agenda.

The escalation of government presence, government interference and government corporate welfare is an ideologically launched imperative that has very effectively used fear to restrain objection. The public has acquiesced. This government expansion will not only never be reversed, as is the tendency with most government expansions, but it will create a fundamental shift in the core of the American psyche, the American business landscape and in the American social system.

We can expect that the commitment of such unprecedented government intervention, expansion and spending will lead the nation into double digit inflation since the economy will not generate the surge in tax payments necessary to cover the debt, the interest on that debt, and the total government committed funds over the coming twenty years.

As noted here previously, this President’s First Hundred Days should have been spent understanding the complexities permeating the economy of the great nation he was taking charge of, and most of all he should have established for himself a thorough grasp on the nature of this peculiar economic ingredient we call inflation. Inflation is a destructive force that destroys the wealth of a nation, of companies and of individuals.

With all the brain power available to the largest media outlets, it would be enlightening to occasionally hear a perceptive question, or a contrarian article of substance objectively assessing the measures being implemented by Washington. All Presidents obfuscate when selling themselves, however, after One Hundred Days, it is about time the media presented taxpayers with some analysis that might bring about some restraint on the abuse being escalated on them and the next generation by the Obama White House and its suppliant Congress.

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Wednesday, April 22, 2009

• A Nuclear Weapons-Free World? Really?

When hearing someone of influence establish a goal for a nuclear free world, there is anticipation that the stance is strictly intended as precursor to some stimulating arguments, all preceded by extensive critical thinking and analysis. When the statement comes for the podium of the U.S. Presidency, the reaction is more puzzlement than anticipation of a lucid deployment of creative concepts, and it makes one wonder what Obama could possibly be leading to.

Other than making the brash statement, the President has provided little insight since making his pronouncement to clarify what analysis might have provided his administration with such a conclusion.

It would be disconcerting to think that thorough analysis led to what can only be considered a naïve objective. Reversing the trend of nuclear weapon proliferation is obviously in the interest of all humanity. Eliminating nuclear weapons altogether, on the other hand, is by any measure of common sense an impossibility. A world leader setting such a goal demonstrates an ignorance of the reality that is human frailty, and dismisses the existence of the many implacable, narcissistic egos that too often gain control of countries and the arsenals at their disposal.

Is it really so obscure that nuclear weapons have provided the world’s major powers a level playing field? Has there not been a greater sense of international security since the end of WWII? Regional conflicts have always, and may forever exist, however world scale war is a completely different beast. Why would Obama think that undermining the past fifty years of security would be an intelligent concept? International oversight of nuclear capabilities and control of nuclear technology proliferation may be difficult, but not impossible.

Making the assumption that all existing nuclear weapons would be destroyed by their owners, would require taking countries such as Russia, China, and Pakistan at their word. That assumption is well beyond the margins of wishful thinking. It borders on the idiotic. The obsession for evermore powerful arms, will always lead countries toward the nuclear door. If there were no nuclear weapons in existence, scientist would be enlisted to produce them.

Obama is obsessed with making change, although the change he campaigned on to reach the Presidency was apparently not the change American taxpayers are now succumbing to. His push for change on the nuclear front should be to stimulate the building of nuclear energy plants, not the elimination of nuclear weapons.

Paranoia and fear were centerpieces of military strategy long before Ghengis Khan’s “wrath of Khan” psychological warfare founded the largest contiguous empire in history during the early 13th. century. Nuclear arms moved this doctrine to the top of the security objectives list for most nations during the past 50 years. Fear of the extreme destructive force available with nuclear weapons makes statesmen of would-be aggressors, instilling the need to find alternatives to annihilation when searching for settlement of disagreements.

The challenge of reducing the total nuclear arsenal around the world is a daunting task which would have to start with getting an inventory remotely resembling the actual number of warheads, and the number of delivery vehicles. All one can honestly expect from this endeavor will be approximations. The Moscow Treaty of seven years ago came closest to an established and agreed-to measurement which was termed “operationally deployed warheads,” which only included warheads virtually sitting on missiles-ready-for-launch. Evidently the veracity of any international nuclear warhead accounting is about as valuable as that used by past A.I.G. executives prior to calculating their bonuses.

The most critical consideration is the capability of launching a devastating first-strike. This is where real stability between the superpowers rests, and the point on which control must be operationally and practically retained over arsenal developments of all nations. Countries considered “rogue states,” which seek nuclear arms should be held in check through the only viable tool, fear. Debate and discussion is valid only when negotiating with reasonable people and reasoning individuals.

The Pandora’s Box that was opened on July 16, 1945 in the New Mexico desert unleashed a devastating force on humanity. Although our wisdom seems not to have advanced, the physical power handed to mankind on that day can never be extinguished. It can, however, be controlled. In the arsenal of all weapons ever developed, nuclear warheads remain the most fearsome. Nuclear attacks are never an option, until they are.

A world without nuclear weapons is impossible, and a world leader, such as America, not having nuclear weapons is not remotely conceivable. Setting as an objective the complete elimination of all nuclear weapons is more evidence of the incomprehensibly simplistic contemplations and decisions exhaling from the White House. The real concern now is whether there is real political will in this new administration to carry out what might be needed to prevent proliferation of nuclear power in rogue countries.

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Friday, April 17, 2009

• EBay, Skype, Goldman, Morals And Principles

EBay is finally making plans to unwind itself from Meg Whitman’s appalling and astronomically expensive decision to acquire Skype. At the time of the acquisition’s announcements, the financial media, while showing surprise, did little to clarify why such a transaction could possibly be considered good business. The answer lies in how the game is played on Wall Street.

The acquisition had little, if anything, to do with any business model that could remotely have made any sense for EBay, but it did have everything to do with a brokerage’s need to pay its executives billion dollar bonuses. All it takes is the coercion of a CEO and a Board who will go along with a plan to pillage the corporate coffers and the company’s capital structure. Shareholders seldom complain since for all practical purposes, they actually have no voice in the running of public companies whose Boards of Directors are comprised of friends of the CEO.

EBay’s IPO in September of 1998 was handled by Goldman Sachs, and it was followed up with a secondary offering in April of 1999. Following a House Financial Services Committee investigation in 2002 it surfaced that Meg Whitman, EBay CEO and a also a director of Goldman Sachs, along with other EBay directors and/or founders Robert Kagle, Jeffrey Skoll and Pierre Omidyar, allegedly purchased shares in 100 Goldman IPOs, and then sold the shares in most of them the next day for a fast profit. Whitman rationalized the practice of flipping, in an interview on CNBC with, “well, everyone else was doing it.” This is the strong moral fiber on which her more recent attempts at a political career are apparently based.

Evidently, Ms. Whitman and her cohorts did not violate the letter of the law. Flipping, on what can only be viewed, in my opinion, as insider information, remains legal even after the financial disaster that the economy has enjoyed through the last twelve months at the adept hands of investment bankers including Goldman Sachs and Morgan Stanley. It seems that all of EBay’s employees who didn’t get in on the sweet stock deals are of a very different class of citizen than those who control the key to the cash and capitalization vault of the company. Perhaps that is also true of the many average EBay shareholders, since they were neither enriched by side deals offered to the Board of their company, nor did they voice much disapproval as the top of their food chain was engorging itself on additional hundreds of millions, simply for being in positions of direct corporate influence.

Wall Street does not need to buy all of a company’s employees, or the multitude of shareholders, with major stock favors when the laws enable it to manipulate a company through the exclusive executive door.

Back to Skype. Why would Wall Street’s golden firm, Goldman Sachs, have stepped down from its heavenly throne and demanded such absurd multi billion dollar overpayment for an acquisition of a service that could be built by a handful of engineers for a few million dollars? Why would Skype, an offshore (Luxembourg) company, have been so appetizing for Goldman? Did the acquisition have anything to do with building the EBay brand or EBay customer service? The best rationalization EBay could come up with was that “Skype would allow customers to discuss transactions in real-time.” That kind of non-sense actually floated by all of the MSM at the time of the deal. Did anyone ever divulge the details of the deal’s structure? Who actually received the billions that went offshore? Who else was in on the receiving end of all that cash besides the Skype founders Niklas Zennstrom and Janus Friis? Skype was tailor-made for an obscure but rich deal to be pulled off with no prying eyes, and no questions from a fawning media.

The Skype acquisition was never about good business. It was about corporate America being told what to do by its brokers. Now EBay attempts to quietly extricate itself from a very expensive decision that made it look foolish. It now states the obvious, and claims that there are few synergies between the two companies. It should be noted that since Whitman left the company, EBay has made great strides in improving its service and it has vastly upgraded what was a very inelegant and gnarled front end to its web presence.

As EBay unwinds itself from its past to more adroitly confront its future, it would serve its board well to critically revisit some of its past decisions under a new light of business ethics and governance. Such action would serve well the business practices of EBay and numerous other corporations that have too long succumbed to Wall Street’s not so subtle coercion.

As for any of the main stream media doing its job when abuse of power and position takes place, … well, that appears just way too much to expect.

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Wednesday, April 15, 2009

• Politically Incorrect Reaction To Somali Pirates

Captain Richard Phillips is the epitome of hero by any definition. His five day ordeal was crowned by the successful nighttime execution of precision marksmanship that took out his three captors. The White House bows for praise, and Senator Russ Feingold calls for direct U.S. involvement in stabilizing Somalia. Has nothing been learned from the experience of Iraq and Afghanistan?

The unquestionable talent of the Navy Seals and their role in successfully terminating this difficult confrontation with Somali pirates will never be fully recognized and applauded by a grateful nation, even if these adept soldiers deserve unrestrained accolades. When allowed to carry out a mission without encumbrances of political correctness, the military shows it can deliver with precision. Today, Captain Phillips and his family are no-doubt grateful for the support of a well trained and exceptionally skilled military. For the first time in his Presidency, Obama stayed out of the way and let experts successfully implement a solution.

Now, enter the politically afflicted meddlesome and sclerotic agendas permeating Washington. Enter the misguided politically correct foreclosures on common sense. Enter concepts of invasions and foreign nation building, and you have propositions for additional foreign policy disasters the likes of which can only be conjured up by an arrogant Administration and Congress.

With six and a half billion people populating this fragile planet, it is idiotic to believe that America can or should stabilize, democratize, infrastructurize, commercialize and adherentize every wayward country on Earth. Somalia, like a hundred other failed states, is a broken nation that America should not endeavor to morph into a modern country. America’s responsibility is to itself and its own safety, which means shoring up its own capacities starting with its economy. Where its citizens are placed in harm’s way, it should allow its soldiers full and ample latitude to take all necessary action against criminals or terrorists, including covert temporary insertions into foreign lands. Then get out and go home, rather than remain to implement some misguided plans to “fix” a broken region.

Already in 2009, 78 ships have been attacked by pirates off the Somali coast, and calls for continued appeasement of pirate demands will persist for fear that their violence against hostages might escalate in retaliation. Support for these thieves is strong in the Somali population, and their financial backing comes from external sources supposedly based in places like Dubai or Mogadishu, suggesting that they are well entrenched at home.

America cannot and should not continue to finance and bear the burden of policing the world. Somalia is not simply a country, it represents a dysfunction that is a way of life for hundreds of millions around the world. The fast expanding world population presents an endless road of impossibilities, and America cannot be the infinite source of fixes for broken dreams and ruthless cycling dictatorships. Schemes such as those intended by Feingold should be ignored and drowned in the wisdom that has hopefully been harvested from the foray into Iraq.

Let’s not confuse foreign aid with intruding foreign meddling and foreign nation building.

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Tuesday, April 7, 2009

• A Political Lesson From Italy’s Disastrous Quake

Much news is being made that a researcher at the Italian National Physical Laboratory of Gran Sasso, Giampaolo Giuliani, predicted the events that have devastated the town of L’Aquila in central Italy. Government officials shut him down for “spreading alarm,” prior to the actual catastrophic earthquake. There is an important lesson here, and we should all take heed.

Italy is currently being hit with aftershocks of the earthquake that has left hundreds dead, and over 50,000 homeless. A 5.6 magnitude quake has followed and added to the devastation already inflicted on the town of L’Aquila by Monday’s 5.8 to 6.3 quake. In this vulnerable area of Italy where the vast majority of buildings are not up to modern seismic safety standards, Mr. Giuliani’s prediction of these events initially resulted in vans riding around town telling residents to evacuate their homes. This became a thorn for politicians and Mr. Giuliani was “shut down.” His claims that a quake was imminent were ridiculed as fear mongering.

Mr. Giuliani based his forecast on measurements of increased concentrations of radon gas surfacing around seismically active areas. This measurement has been used for over thirty years in California as one measure of activity in the Earth’s crust, but not as a predictor. His forecast was not specific as to the exact day, nor on the exact location of the quake’s epicenter, nevertheless, he was within reasonable bounds of accuracy on both time and place. Experts around the world claim that quakes are not predictable, so why care that a scientist who turned out to be correct, was put in his place and admonished by his own government?

The concern here relates to the inescapable parallel that surrounds the use of “fear.” It is evidently alright when the government uses fear mongering to affect change or to exact support from the population for usually misguided policies. Fear mongering is unquestionably in the purview of government, and the MSM seems to not be stirred by such devious malpractice. It is something altogether different when someone tries to do what he or she believes is right toward fellow human beings. Fear mongering is a powerful tool of the state, and post earthquake, Mr. Giuliani’s claims are being ridiculed even more than they were when he made them. It is entirely possible that in this region of Italy, Mr. Giuliani’s experience and years of studying its geology, its tectonic plates and their seismological collisions, could have provided him more credibility than his government was prepared to dispense his way. We now read in the MSM that every earthquake has quacks that predicted them, and that Mr. Giuliani has now joined their ranks. How dare he have been right?

Government too often assumes an inherent stupidity in its population and claims people will panic, or will take to the streets in anarchic stupor, if they are told anything resembling the truth. Government also expects its population will swallow any far-fetched theory or policy if an appropriate dose of fear is injected into the presentation to ensure a heightened sense of fear - as long as the government is in control of the fear mongering. Italy’s government should have allowed the population of the L’Aquila region some room to decide for themselves whether they wished to heed Mr. Giuliani’s warnings. He was not stirring for political demonstration, but for personal safety of fellow Italians.

While the surviving residents of L’Aquila search for loved ones through the rubble of their historic town, and wish they had not listened to their own government, Americans are beginning to feel pangs of suspicion about the earth chattering changes occurring at home. The tremors being felt across America’s financial and corporate sector, have been grossly animated by a White House and a Congress grasping the opportunity presented. The momentary uncertainty in the taxpaying population has provided a broad gateway through which will slide policies and bills that will fundamentally change the social and economic fabric of America. The public perception has successfully been inflamed with agitating potions from the fear medicine cabinet. Government retains tight hold on the only keys to that cabinet.

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