The PACIFIC GATE POST

Steve Paul Jobs, Thank You

2011-10-06T13:39:00.003-04:00

Steve,

You have directly affected the consciousness of hundred of millions around the world through your uncommon grasp of the most critical elements guiding the human interaction with technology.

You opened new paths in aesthetics, transforming mundane technologies into design marvels which each of us absolutely had to take home.

You set standards of quality and reliability that all others could only strive to emulate, but never imitate.

You established a standard for every executive running a large corporation, completely ignoring the corrupting siren songs of Wall Street brokerages. You couldn’t be bought. That maintenance of independence enabled a clarity of thinking and an unadulterated direction of America’s greatest company.

It was a pleasure to have participated in those earliest days of the ride.

All best wishes as you continue your voyage of discovery.

• Canada’s Welcome Mat To Crime

2011-08-15T20:13:00.002-04:00

As Canadian taxpayers contemplate personal debt ceilings, increasing costs of living, increasing taxes, and regressing net incomes, they are being failed by a broken judicial system and police forces who are no longer empowered or willing to act in their defense and protection.

Grasping for the good life, the average Canadian family has enshrouded itself with over $100,000 of debt, which represents a debt-to-income ratio of 150%. Admitting it is difficult, and discussing it in detail brings certain shades of shame, but the stress is undeniable. That stress has consequences. One of them is the blindness it brings to the breakdown occurring in the broader society. That blindness seems like complacency, however, when you’re overburdened with the challenge of feeding your family month to month, keeping up with what your own government is or is not doing, rarely makes your priority list.

While Canadian taxpayers were averting their attention throughout the past generation, their streets became littered with crime. Whether you visit Vancouver, Toronto, or Edmonton, on almost every street corner you cannot miss the drug pushers. The drug industry has a hierarchy that is unmistakeable, from the kid with the hoody and the backpack pretending to be waiting for a bus, to the low level distributor running low riding foreign subcompacts, to the black Chrysler 300s, to the Black Cadillac Escalades with $5,000 wheels, and all with necessary and prescribed blacked out windows, the drug industry command food chain is obvious. Obvious to all, but the judicial system.

Generally, there is the pernicious attitude that, “As long it doesn’t affect me, I don’t care.” Along come the gang wars, with high caliber, automatic weapons blaring, and spraying SUVs with bullets. The latest one on sunny Sunday afternoon in front of the high-end Delta Grand Hotel on the Kelowna, BC, waterfront. Temporarily, or for a few days at best, attitudes change then go back to, “As long it doesn’t affect me, I don’t care.”

Unfortunately, we don’t care, and neither do the police, the lawyers, the judges, or the liberal minds of the legislators who evolved Canada’s judicial system, laws and sentencing guidelines.

To keep the populace quiet, the suggestion promulgated by the media is that this particular shooting, for example, was a “targeted hit.” What a classy, diverting phrase this is. Oh, well, that makes it OK, “It's just criminals killing one another, which does not concern me.” Of course, the fact that a salon was also peppered with bullets from the automatic assault weapon didn’t quite make the front pages. And still, we don’t care.

The police departments have for years rationalized their lack of aggressive effort against the proliferation of criminals and criminality, by whining that their efforts are a waste of time since the courts let the criminals go when the criminals are brought in, . . . so what’s the point? The Court system in Canada is so lax that a murderer, Sasan Ansari, can kill Josh Goos at the Hoolyburn Country Club in West Vancouver, to whom he owes $100,000, by stabbing him 30 times with video evidence, and he gets two and half years for the crime.

Canadian taxpayers believe that their judicial system contains Sentencing Guidelines because their judges tell them so. That is an outright lie. Guidelines are virtually non existent because judges’ egos will not succumb to being instructed or told what to do. They also use the rationalization that each crime is committed in a different context from the previous one. Excuses are simply, that, excuses. There should be tight guidelines and regulations for crimes, rather than loose, very loose, recommendations.

There should also be a legislated shift away from the broken liberal belief that all criminals can be rehabilitated. This is one Trudeau legacy that must be put to rest conclusively. The politically correct attitude that people change and can be “improved,” may be occasionally true, but is not the rule. It is devastating the streets of Canada to backwaters where all doors are locked.

For two decades now, the British Columbia joke is that marijuana is the biggest industry in the Province. In truth, the immigration business is bigger, but drugs have become a major multi billion dollar industry that is enormous by any comparative measure.

It’s time the courts quit hiding behind the veil of poor guidelines, and the police quit hiding behind the poor record of Canadian courts. If the trend continues, Canada’s civil society will disintegrate to unrecognizable degradation which its children and grandchildren will regret.

• World Awaits America’s New Entrepreneurs

2011-07-30T01:58:00.008-04:00

The developed world, and most of the struggling third world, as much as it may pretend otherwise for politically expedient reasons, is depending on an American economic turnaround. This means that the world is in fact awaiting, not for Washington to solve its debt crisis, not for a forestalling of Obama’s armageddon, not for resolutions of budget deficits, but for the resurgence of America’s unique brand of entrepreneurialism.

American entrepreneurs have always been the consummate optimists, whose innovation, creativity, ingenuity, resourcefulness, and financial diligence, have produced the most successful economic engine in history. Entrepreneurs have independently created companies, big and small, that have sustained the tests of time and market adversities, and some have gone on to become international behemoths.

Today, America is spinning and twisting under leadership that vilifies businesses and maligns corporate America. It imposes laws, and institutes structural dictates that push entrepreneurship into the realm of the nearly impossible. An administration that promotes a climate of government growth and government dependence, is promoting the destruction of the fundamental and positive core of the human spirit that makes for a dynamic society.

When government grows faster than the private sector, net productivity shrinks. Such is the trend in America. It would be a complete waste of time to look to Washington for ideas or programs that might actually be helpful to any advancement of the entrepreneurial exercise. Furthermore, let’s not look to those glad-handers, who’ve gravitated to the beltway to rub shoulders with this Administration, for any answers. The agenda is being manipulated by less than a handful of ideologues behind Obama. Everything else is showcasing and pretense for the masses, accomplishing nothing positive toward improving productivity or increasing GDP.

Not everyone is cut out to become an entrepreneur, however, the urgent need for supporting entrepreneurship is now more manifest than at any time in the past century. Far too broad a swath of the MSM has been supportively trumpeting the Obama Administration’s ideological convictions and hostility toward corporate America. Too many Americans are sliding into the slothful perception that heaping taxation on those who “have,” is an answer to deficits produced by bloated government spending.

Since America’s earliest days, entrepreneurs have disseminated enthusiasm and passion for success which has been contagious. American entrepreneurs champion the work ethic while playing by the country’s rules and laws that much of the world may not emulate, but furtively admires. I say "may not emulate" because, as we have discovered in so many other socio-political environments including China, laws and decency don’t often matter.

In high schools, colleges and universities, students should be encouraged to break new ground for themselves as new entrepreneurs, rather than to go out and “find a job.” It’s always easier and is the default to pursue the latter, but some encouragement is required to attempt the former. Educational institutions should place more emphasis on the stimulation of entrepreneurial thinking, and should allocate class time and courses to the encouragement of new entrepreneurs. You may not be able to “teach” entrepreneurialism, but you can certainly induce its discovery, and inspire its actualization.

Some entrepreneurs may be born, but entrepreneurialism is also a mindset that can be ignited and nurtured, and its required skills developed. More effort should be addressed to cultivating the perception that entrepreneurs are among the most positive contributors to a vibrant and successful society. They are critical to the economic health of America. The entrepreneurial attitude is the antithesis of the union led bureaucratic morass that has grown out of control, and clogged the wheels of progress and the financial well being of companies.

Typically the entrepreneurs who grab public attention are those who cut new trails in technology, however, any new business, in any industry, that can be formed to employ at least one person, is a step in the right direction. America has no choice but to reverse the current trend toward disaster. The Nation must enthusiastically promote entrepreneurialism and its optimistic perseverance.

The world looks forward to America’s new entrepreneurs and the energy they will inject into the world’s most consequential economy.

The Source Of Vancouver's Dangerous Housing Bubble

2011-06-17T13:25:00.003-04:00

Heads in sand, Federal and Provincial governments have stood by as out of control forces abuse Canada's immigration largesse and place financial pressures that are already harming Canadian taxpayers.

Now Canadians get a glimpse at the sources of the cash that has corrupted the whole Immigration industry, and created a strange anomaly that has become known around the world as the Vancouver Housing Bubble.

The Financial Times has revealed, "Corrupt officials took $124bn out of China" outlining the size of the fraud perpetrated on China by corrupt officials. Canada has not been the recipient of the "investment" part of that stash, but its real estate has been impacted by large amounts of "cash sheltering." For twenty years the stories of Chinese "buyers," purchasing real estate in Vancouver, as well as Toronto, sight unseen, have been common place.

These ill gotten billions have created an unusual situation for Vancouver. As the Vancouver Sun reported, "Chinese are parking money in Canadian land like a bank." Its real estate prices have no economy to support them.

British Columbia produces very little that anyone outside its borders wants to purchase, other than the natural resources it digs out of its soil. And yet, it's real estate is among the most expensive on earth. Young people cannot afford to house themselves in Vancouver, and even find other parts of the British Columbia lower mainland too expensive.

The aberration of corrupt Chinese officials offshoring their cash has placed a massive burden on Canadians whose homes are in majority owned by banks. Canadians now shoulder more personal debt than Americans. The housing bubble that will inevitably burst, will begin a wave that will start in Vancouver, and will rapidly spread across the country. Neither Ottawa, nor Victoria, can do anything to temper the damage the burst will bring.

• Trump As President?

2011-04-09T19:49:00.011-04:00

TRUMP - The analysis begins in earnest as it should. Obama has announced his reelection campaign from the vantage and with the advantage of the bully pulpit. Contenders are lining up as America as America struggles through a long recession, yearning for strong decisive leadership.

Donald Trump has teased the electorate in the past, pretending to seriously consider a run for the White House. This Presidential election finds Republican support for some politically green but very appealing potential candidates. These may well bide their time and wait until 2016 before displaying the audacity to become pretenders to the seat in the Oval Office. Past analysis such as Obama – The First Tell, was helpful in anticipating a President Elect’s road ahead. Trump’s superficial relationship with the voting public has been distorted by its inevitable distance from an unusual celebrity billionaire. Donald Trump has delighted in each moment of attention he has been able to attract by jumping onto the spotlight dot. His reach into our communal consciousness begs a little scrutiny.

• Trump is not ideologically anchored. This moves his appeal factor positively as he will carry little obligation to either political party. He will also present a more refreshing alternative to a public tired of Washington indebtedness to special interests. At the very least, he will be more honest with how he feels, and he will easily be more knowledgeable with on all topics than what we have seen subjected to since the last Presidential election.

• A lack of ideological fervor also makes it more likely that from his perch in the Oval Office he would be a pragmatist. Unlike the embarrassingly far “left” rooted individuals choking the Obama Administration, Trump would most probably pluck the best talent, however it might present itself, wherever he could find it, and in whatever political flavor it might be drenched.

• His insecurities mean his ego can be stroked to get his favor and attention, but he isn't narcissistic. In Trump’s case the insecurities also suggest that he is driven to succeed.

• Trump will surround himself with experienced talent, and it is unlikely that he will punt important decisions down the road, or to someone else, unlike Obama who is clearly controlled by his handlers and seems ready, willing and able, to have others take care of business. If and when America elects Trump, he will be the President, NOT one of his handlers.

• Trump will not chase the Presidency in order to enable a retirement anxious for newfound opulence and luxury. Trump might be seduced, but he won’t be bought.

• Trump will get into the face of anyone in his administration not delivering the goods whether on the economy, on international affairs, and on national affairs. His ego will not allow for anything to screw up. Trump will be a “task master.”

• He'll probably try to figure out how to get his name emblazoned over the White House front door. He has a tendency to “brand” everything he touches. One way or another, he’ll want the world to know “Donald Trump was here.” “Destiny” would be his middle name for at least four years.

• Getting elected would not be Trump's "crowning moment," . . . the four years of his Presidency would be.

• He may not be as bright as Slick Willy Clinton, however he isn't as ideologically rooted, therefore his pragmatism will be more effective and he is likely to be more persuasive. Oh, and he will not tarnish the Oval Office the way Slick did.

• He isn't afraid of hard work, and his track record suggests an interested, inquisitive mind, unlike what we have recognized in the current occupant of the leather chair in the Oval Office.

• Trump likes attention, obviously, but his need to be successful at everything he does, means he’s a workaholic, which would be a welcome change from the reality we have discovered in the incumbent.

• Trump has been in the construction business in New York, Atlanta, Las Vegas and Chicago where he's had to have a close and warm working relationship with the mob since the mob controls such minor and unimportant industries as Concrete. Those “guys” are not the easiest crowd in town to deal with. Trump knows how to ''get things done," and will. When you need a guy, he "knows a guy."

• Trump cleaned his bankers - got the better of them through his now legendary recoveries from the grim shadows of the poorhouse, again, and again, and again. That took unmitigated brass.

• Trump comes across as a bit of a lecher who could give Slick Willy a run for his money, but that’s just a perception. Slick used other people's executive jets to take advantage of impressionable young women, and the whole world knew about it except Hillary. Trump has his own plane.

• Love for America? It is impossible to deny that Trump really loves America, and is passionate about its success and leadership in the world.

• Contributions to both political parties? You're kidding? . . . . Who cares. He bought some support. That's what Congress is there for, . . . to be bought. The results are obvious and ever present.

• Trump has a long track record of being a leader. America is longing for a leader who can deliver more than long words on a teleprompter saying little and delivering less.

• Genuflection – somehow that is not a picture of a President Trump and any foreign head of state which would be served up by the MSM. Ever. Knocking fists? Perhaps. Genuflection? Not much.

• Trump’s fluid I-speak-my-mind-regardless-who-I’m-talking-to approach would be a refreshing alternative from the daily decantings of unrelenting telepromptered dronings we are served from the White House. Not that Trump’s musing are all intelligent, many are fused in common sense, but at least he’s entertaining when he drives off the road.

Elections are greatly influenced by the state of the economy. Regardless what the Administration, or its supportive pundits pretends, . . . the economy continues to be in serious trouble and will be so through the 2012 election. Additionally, there is no will or clarity in the White House, and not much of it in a majority of Congress to deal head-on with the deficit, or the debt, or job creation. Trump provides an alternative which the poles currently suggest is being seriously considered.

• Japan – A Need Of Friends In The Aftermath

2011-03-21T01:08:00.010-04:00

We have observed the graphic images of the Japanese and their nation, succumbing to the overwhelming forces of nature destroying lives, infrastructure, and economy.

In a couple of years the currents of the Pacific and prevailing winds will scatter debris across North America’s shores. Those will be reminders of the life changing devastation and very human tragedy that has been, since that infamous day March 11, holding Japan in a state of shock. Who will Japan look to as it rebuilds.

The world’s third largest economy, and America’s second largest debt holder, is being battered with power shortages and supply-chain difficulties that impact production of its principal exports, as concern grows that nuclear contamination could affect its food supply system, and its water sources. Japan is very aware that such a calamity, the reality of which has been literally slammed into its consciousness, will tax all of its emotional, spiritual and economic reserves. Japan also understands that in this time of confusion, and catastrophe, while it welcomes help from foreign shores, it knows that it is in a very lonely place.

Japan’s dependence on nuclear energy is not about to change since it is devoid of natural resources, and nuclear has presented the best insulation from the vagaries of the oil fields of the Middle East. Once Japan has had a chance to mourn its dead and heal its injured, and once it has answered the needs of over half a million new homeless, it will revisit its vulnerabilities. The dedication, work ethic and pride, which created the ingenuity behind the high quality products which the world markets clamored for and absorbed, will address itself to the question of self-sufficiency with renewed vigor.

Japan will launch its considerable wealth and industry to solving a breadth of weaknesses that recent events highlighted. It will address itself to long-term solutions for its energy needs, as well as the fragility of its food and water supplies. In a dramatic shift from the past half-century’s regressed strategy on defense and military, we can expect Japan to take strong strides toward more military self-reliance. For now, it welcomes all the help it can get including that of foreign companies who have already contributed significant funds to the relief effort.

As the state of the art USS Ronald Reagan aircraft carrier along with other U.S. ships in the region provide welcomed humanitarian assistance and disaster relief, the Japanese cannot help but be touched, even inspired, by the indomitable American spirit of the Sailors and Marines who have donated and collected goods and supplies, personally augmenting the official relief effort. This touching and much needed accomplishment, in the face of the monumentally devastating crush of one of America’s truly best and closest allies, served to balance the impoverished tone and shapeless delivery of, “Our hearts go out to our friends in Japan and across the region, and we’re going to stand with them as they recover and rebuild from this tragedy” from the Obama White House teleprompter – then, exit stage left for Rio.

The whole of the Japanese population is looking inward for strength, but in its isolation it will also look to friends for support through the next few years of rebuilding and restoration. Fortunately, there exists an American population, far from the self-absorption of Washington that the people of Japan can look to for a confirmation on the meaning of friendship.

• Leadership And The Middle East Crisis

2011-03-04T02:40:00.008-05:00

In one generation our world has shrunk immeasurably, yet it has also exploded unrecognizably. The Internet and the social media superimposed on it has claimed responsibility for igniting revolutions and/or demonstrations throughout Tunisia, Egypt, Libya, Yemen, Oman and Bahrain.

Overthrown governments in Tunisia and Egypt are a problem, however, revolutions in countries such as strategically critical Libya and Bahrain present a whole different set of even more troubling uncertainties. Saudi Arabia, Qatar, Kuwait, and United Arab Emirates are implementing measures to snuff out those potential fires of unrest by “buying” segments of their populations before they get out of control.

Saudi Arabia increased salaries to public employees by 15% and made claims that it will improve education, infrastructure and healthcare through the trickling of $36 billion down through Saudi society – from the top. The Saudi pre-emptive strike is a short-term plug in a leaky dyke holding back unrest it doesn’t understand, and blames on foreign disruptive forces. It’s king and ruling family lack the capacity to ignite the entrepreneurial or creative innovation required to build a country for long term success.

Countries that are currently home to 2/3 of known crude reserves are now unstable, and have escalating conflicts that will further the bloodshed in the streets. It doesn’t take a crystal ball to foresee continuing rises in oil prices which will in turn feed the monster of inflation to affect prices of most products and foods around the world.

Through the sandstorms of all uprisings there are religious forces influencing the fighting, particularly Shiites colliding with Sunnis. We should be particularly concerned with evolving conflicts on the streets of Bahrain, where a Sunni king rules a 70% Shiite population. Bahrain is the banking capital of the Persian Gulf. The U.S. Fifth Fleet, which is responsible for the naval forces in the Persian Gulf and the whole regions, is based on the island. Bahrain’s strategic importance is immeasurable. Shiite Iran which has long funded and armed insurgencies occurring amongst its Muslim neighbors is just a stone’s throw across the pond, while Sunni Saudi Arabia is a walk across the 16 mile causeway, but Saudi Arabia’s Eastern province with a Shiite majority, holds critical oil production facilities.

There are parallels in perspectives that exist between the House of Saud and the Administration in the White House, and should either or both continue to proceed in denial, there are outcomes that will negatively impact the populations of the two countries.

Both the House of Saud and the Obama administration are attempting to purchase support of their respective populations. Such measures are very temporary, stopgap solutions rooted in ignorance. Both ignore reality. King Abdullah heaving bushels of dollars out his palace windows, briefly quieting the simmering discontent he doesn’t understand, and Obama’s stubborn refusal to listen to the message bellowed from America’s streets through the midterm election bullhorns, suggests confusion at the top in both countries.

The current United States leadership appears conflicted between choosing the objective of championing America’s propensity to uphold principles of freedom and democracy, and maintaining stability in the region. Those are not mutually exclusive missions for the Middle East, yet any breakdown of decisive direction and action will provide Iranian leadership an opportunity to expand it footholds from which to spread its religious doctrine of hate and slaughter across the Middle East.

A majority of any population does not want handouts – this truism applies in America, and it applies in Saudi Arabia, as well as Bahrain. As we have witnessed, it also applies in the streets of Teheran. People seek safety, freedom, dignity, transparency, and justice, within which they can actuate the lives they pursue for themselves and their families. A transition to more open governance is inevitable. It will take decisive leadership from the West to ensure that such freedom is provided and maintained in Bahrain, Saudi Arabia and Kuwait.

We may soon reach a point when America will be forced to draw a line around Bahrain’s sands. American presence must not leave Bahrain’s shores, and Bahrain cannot fall to extremist interests. It certainly cannot be allowed to slide under an Iranian manipulated extremist thumb. Stability in these critical countries across the Middles East will have positive impact on the West, and the Obama White House will have to demonstrate some heretofore obscure measures of resolve.

• The Great Void In Education

2011-02-20T17:16:00.012-05:00

Watching teachers lead young children by the hand to demonstrate on the streets of Wisconsin, educating them on the finer art of union bargaining methodology, it becomes abundantly clear that great voids exist in the educational continuum. The void becomes even more obvious when the Oval office, and possibly the Democratic Party, meddle with the State leadership by championing Union actions such as shutting down schools.

As we set out on our paths through life, we come to recognize that students graduating from High School, University or College, are lacking some necessary tools and percepts critical to all endeavors, personal or business, which academia could have provided. Union tactics are not among them.

Evidently, too many voters during the last Presidential elections forgot that a community organizer gains power and influence by making chimerical promises to susceptible listeners. He assures them that government controlled economic activity will lead to redistribution of wealth, . . . “You’re being oppressed so that you can’t get what’s yours, . . . I’ll get it for you through government.”

The community organizer Does Not imbue the community with personal motivation, or any sense of individual purpose. The Community organizer is incapable of distinguishing the difference between controlling the game and its players, from the enforcement of laws that shape how honestly the game is played, particularly by its biggest players. He also confuses Wall Street and Banking, with the business and corporate sectors of the Nation’s economic engines.

Although we are social beings, our greatest learning and our deepest satisfaction come from within and these are energized through accomplishment. The good and the bad of all our experiences, big and small, are positive as long as they are ours, . . . ours without blame, or deflection, or passing the buck.

Those who would stifle such energy are hypocritical, self-serving charlatans. This type of leadership does not honestly promote challenging of the mind, or invigorating the spirit, or animating innovation, or even hard work, but instead seeks to covertly suppress them.

America holds a unique body of work that rests at its foundation, produced by an exceptional group of men, but it may be less commonly known in its classrooms than the sayings of Confucius. I refer to the ample documentation such as The Federalist Papers, and the letters and speeches provided for future generations by the sages who were principally responsible for the Independence and the Constitution of the United States of America, the Founding Fathers.

I don’t infer that these men were the epitome of wisdom, since they were human after all, nevertheless they were wise enough to create the foundation for an environment the world admires and wishes to emigrate to, 222 years after the first adoption and ratification of its framework.

When John Adams wrote, “Children should be educated and instructed in the principles of freedom,” he did not mean that the country’s youth should be instructed in ideology. As individual freedom remains a most aspired-to circumstance in any society, the thinking of those who produced its best configuration, should, as has been proposed by many for two centuries, become very common knowledge and should be intrinsically incorporated into the fabric of the educational system.

As teachers march out of the schools of Wisconsin, we are reminded of what has been gravely omitted from their place of work.

• Obama’s Impossible Gordian Knot

2010-12-16T16:28:00.009-05:00

Over 2300 years ago, birth was given to a myth which in time became a powerful metaphor that has served us well through the ages when addressing seemingly impossible or intricate challenges. Halfway through the current Obama Presidency we face a moment when reaching back for an ancient Greek analogy has become self evidently appropriate.

Legend tells us that Alexander The Great fulfilled a prophecy by bringing a creative solution to the Gordian Knot – he sliced the complex knot with his sword, thereby showing himself capable of thinking outside the box. Gordian, the mythological king of the Phrygians had tied his oxcart to a palace as an offering to Zeus, and an oracle had foretold that whoever untied the knot would conquer Asia. Although he died at the young age of 31, Alexander’s conquest of a continent started with a bold decision.

History has provided ample debate on the event of Alexander’s controversial “solution,” and whether it was actually any solution at all, however, Alexander’s omen, has remained a favorite metaphor.

The present moment in history finds a society struggling with overwhelming unemployment, as well as a worrisome personal and national level of debt. Productive employment is critical to sustenance of a vibrant society, and it is through that employment that the costs of all of society’s “structural and functioning” needs get paid. A majority of Americans also understand that it is business and industry, large and small, that create employment, and the basis for all other employment. Without such employment, government doesn’t get paid. While this should be abundantly obvious, the American taxpayer is being led by an Administration that seems not to understand.

America went to the poles during the midterm elections and emphatically voiced its displeasure with the way the Administration and Congress were treating its most serious and urgent concerns. America is looking for leadership capable of making bold decisions.

This week, Obama is facing his archetypal Gordian Knot, IMHO. The current debate over the maintenance of the Bush tax cut has been worthwhile, and pushes economic discussion to the fore, which serves to educate. The solution to America’s economic woes however, does not rest with an extension of the Bush tax cut. The solution rests in the aggressive stimulation of job creation, and leadership that will-not-sleep-until unemployment numbers have been halved.

On Wednesday we were treated to novel expressions from an American President such as this one uttered by Obama to 20 CEOs in a session held yesterday with the Administration, “I want to dispel any notion we want to inhibit your success.”

The fact that his grammar is questionable matters less than the fact that he would have to say anything remotely close to an attempt at denying he has and will continue to “inhibit” the success of all businesses. His actions precede him, so his words appear to come from a distant corner of the twilight zone. It is not in his DNA to either stimulate economic growth, or care what the fat cats (his own rhetoric) of corporate America need to see from their government in Washington. He does not understand, and cannot understand.

The MSM is even posting articles about “détente” between this Administration and business. Détente? As in, “he’s at war?” Who would have thought this concept remotely possible in twenty first century America? In the middle of an extended recession, who would have expected a question posed to a sitting President such as the one asked by CNBC’s John Harwood, “Mr. President, can you repair your relationship with business?”

Pretend all he wants at “dispelling,” Obama is incapable of providing a solution to his Gordian Knot, because he does not comprehend the most significant problem facing the country over which he presides.

• Another Misstep On Obama’s New Battle Front

2010-11-12T16:34:00.010-05:00

There is little argument that the concluding G-20 meeting has been an international beat-up slugfest on America. Effective and substantial Strategic Planning is critical in the success of any significant endeavor. It should be ever-present when addressing the country’s economic long-term health.

Obama and his advisors fumbled once again on the international scene. Unfortunately, this time the fumble was on an economically critical battlefront.

The Fed continued its artificial manipulation of the economy by announcing that at the stroke of a pen filled with dollar printing ink called the Quantitative Easement Quill, a tidy $600 billion will be added to the float. While there is urgency in taking decisive action to stimulate hiring across the country, The Fed’s bond purchase program could have waited announcement another few days, particularly since it will be implemented over a very extended period. The Fed may in fact decide to scale back on the total amount depending on how the economic activity trend reacts.

Currency fluctuations have not been the source of the current economic crisis, but have been the outcome of such things as the overwhelming export of never to return jobs to inexpensive-labor-gives-us-cheap-products countries, AND we can artificially inflate national wealth by enforcing the financing of a home-for-each-citizen program.

Announcing the easement (read: circumlocutive euphemism for Inflative) just prior to G-20 gave China a major pass at the meeting, and in fact, pushed it to stand shoulder-to-shoulder with America’s “friends” pounding on America. The G-20 meeting should have been more about China’s maintenance of a weak Renminbi, and protectionism, rather than about the U.S.’s wholesale weakening of King Dollar.

The Bernanke announcement resulted in a verbal assault on America by everyone from China to Germany. America’s defense was left to representation by a President not familiar with things economic. It isn’t even clear that China’s real relative exchange rate hasn’t appreciated recently given the rapidly rising prices within China. Just like The Fed, whose complete independence from Congressional control or real oversight enables it to go wherever it wishes to go, so too China will ignore all bended-knee implorations from Obama and Geithner.

Now to make matters doubly difficult, the Administration is shouting into the deaf ears of its trading partners and geopolitical friends. China will continue on its merry way, and it has firmly confirmed that it would completely ignore the Administration when it admonished Obama as he went out the door with a, “Don't make others take the medicine for your disease,” (Yu Jianhua, a director general of China's Ministry of Commerce). The opportunity presented by the G-20 meeting to coagulate forces to pressure China is now passed, and the situation has been made worse for America.

This Administration really must take some classes on Effective Negotiating.

• More Erratic Economic Notions From Obama

2010-09-08T19:56:00.004-04:00

After almost two years of demonizing corporate America, holding a “boot to its neck,” and doing nothing for small businesses, Obama suddenly pretends to reverse himself with a “corporate tax break.” This is political pandering, and at odds with what is required to set employment trends on an upward path.

In between teleprompter stopovers and golf games, Obama comes up with helter-skelter strategies aboard Air Force One that serve little but confuse the country he was elected to lead. Obama’s new one-year tax relief on capital investment looks like a stroke of genius in his mirror. Does he know that companies, from the local bakery to the coalmine, actually have plans - long term and mid term action plans? Evidently not. Your local dress shop spends more time on “planning” than this President. I also suspect that the owner of that dress shop spends less time holidaying, and more time struggling to keep the business afloat. The “I will not rest until . . .” incantations from the Oval Office not only ring hollow, they are overt lies.

This Administration’s disconnected actions assert that no cohesive economic plan is in the offing. Prolonged uncertainty will continue to limit hiring and minimize commitment to long-term capital expenditures. Only a very few large corporations with plans already on the books to expand capacity will take advantage of this temporarily accelerated tax break. This plan enables an acceleration of depreciation allowances which businesses would deduct over time, as such implementations fit into corporate long-term plans. It should be pointed out to this Administration that all companies develop and implement strategies which include capital expenditures constructed from outlooks on such elements as market expansion, market penetration, competition and product demand. Corporations set budgets that include major spending, years ahead of time.

Perhaps Obama has also not checked interest rates lately. If a successful company needs money to expand, its interest costs are minimal, and it will be able to deduct its capital expenditures over time. On the other hand if the company is feeling strain it won’t get the credit very easily. Either way, before getting a tax break, companies have to have decided on the expenditures, and acted on them – you have to spend before you can claim. This Obama tax credit will have little real impact on corporate America. When there is uncertainty, companies retrench, and hold tight. Only a fool of a CEO would run out and build a plant that wasn’t in the works just because of the sudden and temporary appearance of an accelerated tax break. Government should not insinuate itself into the efficiency with which corporations allocate their resources.

This stroke of genius will accomplish nothing for Middle America and the unemployment ranks. Evidently no one around this President has managed a large corporation, and he is ignoring any useful advice if he’s getting any. This announcement might be more palatable if it was one minor element in a broader strategy to inject confidence, stimulating businesses to action, particularly smaller businesses. Much like the Clunker For Cash program, this temporary manipulation of the tax code is a desperate political Hail Mary with no regenerative effect. It is also a manipulation that dares Republicans in Congress to react negatively to a “pro-business” pretense.

The President could announce something meaningful like restructuring the corporate tax code to drastically simplify the process for all businesses, thereby reducing their headaches and costs.

Obama’s other sudden stroke of brilliance, the Research Tax Credit, is a non-starter for the simple reason that the American economy will only get going again when small to medium sized businesses start hiring. If this sector of the economy isn’t with you, nothing is happening. As for the large corporations, they will not suddenly spend some “research” money that they aren’t already spending, just because there’s a tax break on the table. If that were true, any CEO making that decision should be fired for incompetence and poor planning. Small to medium sized businesses are the engines of a successful and stable Middle America. Those businesses don’t spend much on research. They find a need and they fill it. This $100 billion tax announcement panders to the education industry, and does little for the business environment where it counts. What it creates is a cash-bag whose contents will be dished out in allotments proportional to the political affiliation of the recipients. What a surprise.

Obama’s $50 billion stimulus package announced this week for roads and runways will be similarly designated in political vote-purchase-bundles which will create temporary employment, but create nothing for the long term. This could be momentarily seen in positive light, if it was capital invested from surplus funds. Such billions created out of intolerable debt is another toxic tin can being kicked down the road for our grandchildren to feed out of. This is not part of a cohesive long-term plan that will increase national productivity. It smells more like a haphazard “throw stuff at the wall,” and “make noise about how many jobs we’ve created,” deficit spending bill looking for Congressional approval. Obama may be deaf to his electorate, but Congress is getting the message, and we can predict this will not get passed even through the back door.

While the President is stomping and performing in the grand and absurd political theatre of the campaign trail, shouting about his opposition “talking about him like a dog,” or making strange comments about “blue skies,” and “fish in the sea,” (what audience does this appeal to?) Obama should ponder the structure of a firm policy statement to immediately table major cuts in government spending.

This, above any other announcement he might make, would inject renewed vigor, and confidence into the National landscape.

• Pent-up Pressures Will Explode Into A New Age Of America

2010-08-17T22:10:00.007-04:00

The Obama Administration nudges Treasury Secretary Timothy Geithner to the front of the class to present Pollyanna statements on subjects apparently not fully understood by the President or many of his advisors. Millions react with little more than frowns of confusion.

The skeptical population is exposed to too many scripts on the economy written in rose-colored ink, read through rose-colored lenses. Listening to Geithner, leads one to wonder if he’s read the news lately. Actually seeing him, leads one to doubt that he cares. Down the road, Bernanke does as he’s told by the bankers who have little concern for 17%+ unemployment. Their multi-billion dollar bonuses are thick insulation from the plight of Middle America. Ben Bernanke pontificates from The Fed, pretending that inflation is a curse, when in fact its advance would erode the assets of his bosses on The Street. Inflation’s impact would also be a reduction of the real debt currently burdening homeowners whose perceptions rendered home ownership a panacea.

Hypocrisy is one those more despicable black arts practiced by too many sitting in positions of influence. Self preservation and self interest too easily twists truth from the podiums of power, and confuses a population unfamiliar with the complexities pretended by economists. Today a whole middle class shudders at the long term prospects of its underwater mortgages further sliding into an abyss, as job continue to evaporate.

The public sustains abuse, particularly when the likes of Geithner, and Bernanke continue the reign of power and influence enjoyed by Greenspan, even after having proven complete and absolute incompetence during the creation of the mess. Of course in fairness to Bernanke and Greenspan, we should note that Geithner additionally demonstrated contaminated morals and meager principles in his tax filings. These three mousequeteers of finance and their friends, along with the misguided Congress of the past 20 years fuelled the indebtedness now burdening an anguished middle America. The crisis is the result of burst housing and debt bubbles, which many perceived correctly and some capitalized on. Bernanke, Geithner and Greenspan were not among them. Bernanke, however, was very capable when he effectively misled Congress on behalf of his boss in the White House and his bosses on The Street, to get the Troubled Asset Relief Program (TARP) passed.

Both businesses and consumers are ignoring Bernanke’s continuation of “cheap debt”. If you’re concerned with job security, you’re not running out borrowing for a bigger home. These days, no one wants more debt, it seems. No one, that is, except Washington.

The lamentable uncertainty afflicting every corner of the United States has permeated its business engines. In Board Rooms across the Nation, Accountants are telling their bosses, “hold tight.” CEOs aren’t economists, or fortunetellers. They gleam information from those they have hired, and those which they have confidence in and trust. From behind closed doors, senior executives sense the choking “uncertainty” and they fear it. The result? Corporate America sits on almost $9 trillion in cash and counting.

Another result? Investors purchase Johnson & Johnson 2.95% ten-year notes, preferred over company shares or even over Treasuries with downward sliding yields. Suddenly junk bonds are more delectable than Treasuries? This is a major shift in perceptions. It is also telling of concern for the economy’s future, mid to long term. It speaks volumes of investor confusion about the economic future. Corporate America and Main Street are uncertain, and Washington daily adds to the confusion.

Corporate America would normally look for any excuse to invest. American business is seeking signs from the country’s leadership that it can “get behind.” That is the biggest failure of the current leadership in Washington. No one in the Capital seems capable of leading the charge to the restoration of confidence, least of all the inexperienced President. Ineptitude, indecision, reckless spending and loading up the future with unfathomable debt, pulls the train of hope into reverse.

A panoply of hapless maladroits appear like balls bouncing down a pinball machine, reacting to daily events with little grasp of the most critical expectations of a tired public. Perceptions are powerful forces moving through the country’s social, economic and political fabrics. While stagnating over economic stimulus package decisions, Washington should give energy to psychological stimulus.

Assertive leadership should take forceful steps to reduce administrative bureaucracies, and streamline all levels of the structures providing services, including simplification of the taxation and the health-care systems. Other actions should include biting into the biggest lie of them all - the Social Security and health-care costs which almost 80 million Baby Boomers have been led to expect as they head into retirement. The expectations represent entitlements of $4 trillion which the U.S. economy will be incapable of supporting. There is even more important action for a leader to take. Inspiration.

It is not the nature of the average American to want coddling by big government. America has long demonstrated a propensity for innovation, hard work, creativity, and entrepreneurship. America has progressed through numerous transformations since its founding. The vast majority of jobs lost in the past five years have been in manufacturing, while the most stable corporate environments have been those in the high technology industries.

We may not know what new chemicals or revolutionary algorithms will trigger new industry sectors, but as the future unfolds, America’s destiny will rest on the stimulation of interaction between people and the stimulation of thinking which will galvanize toward new discoveries. Avenues of communication, through the Internet, as well as physical corridors such as high-speed trains between major urban centers will further stimulate connections and energize creativity. Each of these discoveries, large or small, will then need encouragement on risk taking, and entrepreneurship.

Companies, nascent and mature, will require the opposite of the noise which is today effusing from Washington. Leadership means pointing to clear defined goals and energizing Main Street. It means stating confidence in the bearing – clear heading and clear direction. Once such leadership leaps onto the stage, there is pent-up pressure from the cash stockpiles corporations are sitting on. Just as significant is the pent-up creativity and innovation waiting to commercialize the next technological revolution. The psychological stimulus America hungers for, is inspiration.

• Gang Receives Succor From Federal Judge In Gang-Haven Vancouver

2010-08-12T21:29:00.018-04:00

Canada’s Federal Court brings new meaning to coddling criminality. A Federal Judge has handed down a decision that will heretofore ensure that Canadian authorities will address criminal gangs with proper decorum and “quiet” respect.

Federal Court Judge The Honourable Mr. Justice Michael L. Phelan has, in one simple judgment, backhanded Revenue Canada, and the Gang Task Force. Justice Phelan has stymied and impeded any future approach government officers and officials might make on gangs and their members.

Here is the heart of his decision on behalf of all Canadians (Docket: T-555-08, Citation: 2110 FC 448): “THIS COURT ORDERS that the Applicants are awarded fees of $200,000 plus disbursements of $13,986.92. The Applicants are to have their costs of this motion of $3,000 plus disbursements of $500.”

The applicants are Ryan Murphy et al, . . . et al being his UN gang member associates, and the respondent is the Minister of National Revenue, which is in effect the Canadian taxpayer. Canadian taxpayers, . . . the gang thanks you.

Why would a judge of the Federal Court hand down such an astounding decision? Why would the Court in one bang of the gavel render ineffective any future investigations into the countless billions of dollars that are being made illegally and purchasing businesses and estates from Victoria to Halifax? Why would the Federal Court have a problem with Revenue Canada digging into the non-existent sources of income which materialize so readily into so much material and visible wealth? Why would a Federal Judge decree that the Revenue Canada Agency (CRA) should in effect care little about its own personal safety when serving Requests for Information on very well known and dangerous criminals? Why would a Federal Judge have a problem with the CRA investigators teaming up with Gang Task Force members to deliver request letters to gang members?

Justice Phelan’s stated reasoning was that “Police presence was clear and visible and highly obtrusive. The service of the documents was generally carried out late at night, with multiple police cruisers present, lights on and with all the paraphernalia of a police raid.”

So? Are all Canadians now suddenly in fear of being similarly served? Is this what this judge thinks is, . . . protecting Canadians from overt and visible harassment from the police?

Shouldn’t the authorities have some room for common sense? Shouldn’t Revenue Canada be used to launch investigations into illicit earnings? Don’t most Canadians know that the neighbor just down the road with NO visible income, but with the mansion and fleet of cars in the driveway, might be, just might be, in the drug business, for example?

If the authorities have evidence of such, let them have at it, and if they break the law in the process, then charge them, or fire them, or both. It flies in the face of common sense to think that if what occurred in this case is allowed by the judicial system, then we would all see multiple police cars at our doors delivering requests for itemized income sources. Canadians should beware of those pretending to defend them against the beginnings of “slippery slopes.” Canadians should beware of this judge.

A judge pandering to an ephemeral notion that his decision, right off the scale of common sense, protects the public, is a twisted percept rooted in self importance. The police admits that the gang problem in Canada, particularly Vancouver, is out-of-control. Isn’t the Canadian public getting tired of witnessing its police force stifled by the courts?

This judge’s sanctimonious decision panders to some righteous percept that the judiciary grasps elements pertaining to the social order that society at large cannot possibly comprehend. For too many years, the Canadian courts have been ensconced in the belief that they have unique abilities to perceive realities that their broader community is incapable of considering. These former lawyers are wrong.

Their many incomprehensible decisions are not so difficult to fathom. It is not the nature and complexity of the cases that society cannot understand. Canadian society cannot and should not accede to decisions which negatively affect the social setting. Decisions such as the one handed down by Justice Phelan add to the government’s failure to accomplish its most critical purpose – preserving the safety of citizens and their property. When our public schools have pushers selling drugs to 7 and 10 year olds, the system is broken. The courts have much blame to shoulder for this calamity, along with Canada's Parliament.

This court order was not about the prevention of entry onto slippery slopes, but was the result of incompetence on the Federal bench. The decision should be reversed.

Canada Welcomes Illegal Sri Lankan Asylum Seekers

2010-08-10T03:30:00.008-04:00

Canada, the world's leader in the immigration business, is about to welcome the first of many ships carrying illegals from Sri Lanka.

The Canadian immigration industry is licking its lips at the imminent arrival of a ship load of illegals, with lawyers lining up to leach off the Canadian taxpayers, and the Courts are making sure that endless days will be cleared from the dockets, so judges can enjoy the stories of downtrodden Sri Lankans well into the next decade.

The Canada Border Services Agency (CBSA) will pretend to filter the good from the bad, not having a clue about much, since no human being on earth can vouch for the veracity of any documentation presented in pretense on the origins of any asylum seekers. There are few countries in the world where documentation cannot be purchased, names changed, false birth certificates magically created, and new family members materialized.

Canadian taxpayers seem to rest easy in the knowledge that the CBSA will investigate thoroughly, then make sure that Canada becomes the destination of choice for Tamil asylum seekers, replacing the formerly more convenient Australia. Canada will enjoy the unique distinction of being the only country on earth not overly concerned with allowing Tamil Tigers into its midst. Pretending otherwise, is pretending that the CBSA has the capacity to know the difference between terrorists and non-terrorists, and also further pretending that it has the capability of tracking them once they’ve allowed them into the Canadian society at large.

Canada has no way to track anyone. The immigration industry knows this and takes advantage. Daily abuses of the many loopholes in the country’s laws result in the government having no idea of the country's real population.

There are almost 7 billion people on earth, most of whom live in abject poverty, in overpopulated corners of the earth. Canada’s doors seem wide open. Canadians have for generations attempted to build a country that could support itself. For some reason, the current version of Canadian governance is following the Jean Chretien belief that “Anyone who wants to live in Canada, should be allowed to live in Canada.” Such genius thinking now brings a need to increase taxes (such as HST) to feed a rapidly breaking system, . . . a system controlled by too many lawyers who were elected to the National Legislature over the last century.

Canadians should know that their government is under no international obligation to accept a ship arriving under false pretenses. Ottawa should stop aiding and abetting the human smuggling operations of international criminal organizations.

Those pretending that Canada is a wealthy country and that it should “share,” haven’t spent much time with the average Canadian household working multiple jobs, and carrying personal debts second only to their neighbors to the South.

The concern here isn’t even about Tamils, but about an attitude toward the preservation of a fast disappearing lifestyle. Overcrowding was once not a Canadian objective. The clogged arteries of Vancouver and Toronto are evidence that the balance has tipped.

• DEMORALIZING AMERICA

2010-07-13T22:45:00.014-04:00

America is shuddering in a struggle to shake off a recession, just as it is told the recession might morph into a depression. The admonishments coming from the daily teleprompter addresses of its President further shake the nation’s confidence, as blame becomes the only strategy dripping from the country’s leadership.

America has ushered in a new age of self admonishment led by a White House and a Congress that are using the widespread economic crisis to reinvent the country. As the administration increases spending, and augments government intrusion into all corners of human endeavor, it rationalizes the trillion dollar budget deficit, and ignores the looming burden of overwhelming debt. The government ignoring the imminent and inevitable monetization of this debt, doesn’t subdue the anxiety felt by entrepreneurial or mid-sized businesses in every corner of the country.

Beside shattering the economic foundation with which America has been endowed, this Administration and this Congress are also doing everything possible to internationalize their own feelings of impotence. Through promotions of head-numbing programs such as those given energy in Copenhagen, or the exaltations on the cap and trade contrivance, there is astonishing evidence that a radical transformation of the country is being attempted.

Actions and policies of this White House are either purposeful or the result of ignorance, but in either instance, the MSM is providing it a pass on the majority of its follies. In some cases the MSM even applauded from the sidelines such as when Obama strengthened the influence of the United Auto Workers over the US auto industry. Americans watched passively as the very unions who destroyed Detroit were provided even greater influence over companies that now flail against advancing forces of extinction. The people who abused their power and the cash of their own membership for most of a century, now dictate the future of the American automobile.

Working Americans, and all those who have lost good paying jobs, will not be lulled into believing in taxpayer funded windmills, but they are being demoralized by Washington politicians who can’t seem to tell truths, or provide direction. The endless releases of nostrums pitched by a floundering President leave little suspense as to his abilities, or capacities to lead the country creatively out of the doldrums. His limitations have further evidenced themselves in those he has surrounded himself with. His most senior advisors and appointments are either reflections or lesser versions of their boss.

There is also failed leadership in the richest corners of corporate America where the most visible captains of industry have not shown themselves to be diligent or effective in administering their fiduciary or managerial duties. Some, such as the CEOs and Directors of City Bank, AIG, Lehman, Merrill Lynch, and Citygroup, have in fact proven to be weak-kneed, and self serving hacks who had to run for cover, begging for taxpayer bailout money when twenty years of easy money, easy growth and easy markets turned against them.

Americans do not appreciate bailout receivers or givers. Americans don’t respond so well to whiners and blamers who depend on committee regurgitations for direction. Americans, like most fellow human beings, respond positively to optimistic visionaries who are clear, confident, and straightforward on goals and strategies.

The current leadership appears incapable of pulling the national consciousness out of its stagnating paralysis. The nation has slowly slid into react mode, with no charisma-with-purpose pulling its attention. The result is a country of demoralized taxpayers staggering to pull the eject lever on incumbents. Unfortunately this negative energy is simply a reaction against the current leadership, rather than a wave of confidence empowering an inspiring champion.

America is once again playing “find a leader.”

• The Obama & Krugman Keynesian Conceit

2010-07-05T16:51:00.010-04:00

Paul Krugman, the Keynesian drum-beating economist, was invited by CNN on Sunday to promote the Obama strategy of pumping additional billions into the economy. One of his very telling responses to Fareed Zakaria’s question on significantly more spending and borrowing was “what about now?”

This very self serving response from Krugman was an advocacy of profligate spending very much in keeping with a too popular expectation of immediate gratification. Pushing the debt onto future generations, and “get-me-what-I-want-now,” is the egocentric inclination that delivered the current state of financial devastation. “What about now?” came from the mind of an economist who exudes a distinct arrogance much too indistinguishable from that personified in Obama.

The defiant arrogance, evident in both of these currently influential individuals, is a disconcerting heap of hubris that America’s present and future conscience must reject out of hand. Another prognosticating ego on the talking-head circuit is Nouriel Roubini, the self-proclaimed forecaster of doom, who improves his personal bank account by knocking capitalism and calling for more government intervention. Current and future taxpayers cannot afford to accommodate such egocentric thinking, from egocentric minds. When overwhelming egos audaciously preach anything, we should become very suspicious of the direction they profess to lead.

I am making a statement less on economic theory, than I am making an observation on the message our intuitive natures are very likely receiving, many of us at least - the Obama and Krugman recipe for a utopian Now is false. It is false for the Now, and it is false for the Future. We should be apprehensive and skeptical of all egocentric thinking. We should very much distrust assertions, articulate or otherwise, that emanate from well-understood egotism.

Weary taxpayers should demand leadership that does not ignore the burdens of tax increases, massive stimulus spending, and out-of-control deficit spending. They should also demand of the Krugmans of the world, why they have no solutions to the impossible debt load that will be confronting America in 10 to 12 years. Taxpayers are standing on the sidelines of a progressive parade sweeping the country with an ideology that is expanding government to redistribute wealth rather than enacting measures to stimulate its creation.

• What Congress Should Be Asking Of BP

2010-06-17T18:43:00.011-04:00

Congress is performing its requisite role on the nation’s worst environmental disaster. Congressmen from both sides of the political divide attack BP with a certain resolute and earnest energy that plays well for the cameras, and may provide some traction with the folks back home. For the long term, this circus in Washington is actually dropping the ball on behalf of America.

Rep. Bart Stupak (D-Mich.), and Rep. Henry Waxman (D-Beverly Hills), led the charge with repeated accusations and other attempts to extract response from BP’s CEO, Tony Hayward. With his company’s stock trading at about $31, well below half of the high it once enjoyed, Hayward looked and acted lost and confused, as he deflected questions. The optics were also negative as he disavowed any knowledge of events that might have led to the calamity that killed 11 of his employees. Unfortunately for America, he provided nothing that could be used against him in any court of law.

It may be useful for Congress to become educated through these hearings and perhaps oversight bodies will be pressed to actually do their jobs in future, however, the nature of the questions serves little purpose toward ensuring the long term reparations that will inevitably need to be provided to all those who have really incurred losses on the gulf coast.

For purposes of grandstanding, Congress is getting itself stuck in macro details that in effect leave Hayward and his Board of Directors off the hook.

Here is the direction the Congressional questions should take and why:

The most critical element in the management of a corporation is the structure of its executive lines of command.

When a CEO issues instructions, missives, or policies, and re-structures the company, as he or she deems appropriate to implement plans to achieve the company’s mission, the line of command and its “walking papers,” are clearly delineated, stated and evident.

Whether such instructions are in writing or verbal, each senior manager is given direction and parameters. The trickle down process permeates the corporation, and unless there is abject incompetence, even in a quarter of a trillion dollar enterprise like BP, each employee from the CFO to the local technician knows his or her job. Each employee understands the scope of the decisions he or she can make.

This may sound obvious, however Congress it ignoring this critical reality as it discharges indignant shame toward BP. Stupak and his committee should delve into Tony Hayward’s decision and policy distribution process. The sub-committee should question how Hayward has actualized his leadership of one of the world’s largest corporations. Congress should pull evidence on how and how much responsibility has been delegated to each executive, and how the process is in turn pushed down the various lines of command.

With such facts in hand, the legal process can place responsibility on specific individuals who will not be able to pull a “Tony-Hayward-side-step” once the details are collected. If there has been willful negligence or worse, the specific details pertaining to the chain of command will become critical to extracting cash and compensation - through legal means. Knowledge on the decision process will provide Congress much clout that it currently doesn’t have. The information will provide legal recourse.

Congress will also need to make sure that along the path of assigning blame to specific employees, it doesn’t make the mistake of destroying a whole company. In most large corporations there are some bad apples. Even if the rot goes to the very top of the company including its Board of Directors, this rarely means the whole company is blamable or culpable.

Congress should take care that it does not destroy the world’s fourth largest refiner. There are countries like China waiting on the sidelines who would welcome a “fire sale” on BP’s assets, and who would welcome overnight expansion into the Gulf’s oil and gas reserves. Congressional and White House rhetoric should temper itself, and act with a little more command of common sense.

• Is More Evidence On Obama’s Presidency Needed?

2010-06-16T20:36:00.004-04:00

The Mainstream Media is tripping all over itself deciding how to not embarrass itself over the latest demonstrations of incompetence emanating from the Oval office. America not only elected a novice with absolutely no worthwhile experience in managing anything, other than giving a speech, but through its votes America also populated the White House with incompetent individuals.

American voters should have thought a little longer on the ramifications of hiring an apprentice President. Of course, the nature of an apprentice is to work under the wings of an expert, which makes what’s going in the Oval office rather understandable. There’s no one with talent or experience in running anything, who might take the President under his or her wing.

For a country built on the fruits and creativity of the entrepreneurial spirit, it remains stupefying that an administration voicing so much animosity toward business and the business ethos was ever elected. I noted before the election that the “Tells” were of grave concern. Now, well into this Administration’s ill-advised ramblings and mismanaged trampings through the complex corridors of the economy, foreign affairs and domestic affairs, the MSM finds itself looking for rationalizations.

The MSM is becoming creative in excusing the object of its sycophancy. For example, the New York times thinks Obama is not able to get emotional or “involved” because he is too “cool.” Hollywood thinks he should lose a little bit of his “cool,” and show more anger. Does America really think it elected a cool President? Does America really think anger is a way to find a solution? Such thinking is not only idiotic, but sadly for the country, it excuses someone incapable of making critical decisions. This has nothing to do with cool.

The decisions that have been required of the White House since the election have been significant, and have been plentiful. None have found decisive or thoughtful direction from the President. Instead, Obama took America on a left turn into healthcare, at a time when Americans were stuck in consternation over the loss of jobs.

America has elected a President who doesn’t even know what questions to ask, . . . of anyone. It elected someone who made more trips on Air Force One and made more speeches than any other President in his first year in office.

America does not expects a single individual to have all the answers, however America should expect the individual sitting in the revered Oval office to know enough to surround himself with people more talented than he, and of whom he can ask the tough questions, and to whom he can give very direct and specific marching orders. The electorate elected a fumbling Administration at a time when a tough manager was called for. The MSM is running out of rationalizations and excuses.
The evidence is in.

• End Our Intimate Relationship With Debt

2010-04-22T19:36:00.017-04:00

American taxpayers are witnessing an unprecedented full-frontal attack on free enterprise, business, innovation, invention, creativity, productivity and entrepreneurialism. This is a misguided strategy from elected officials. At its core it is also an attack on employment.

We are provided a daily dose of news from Washington and from Wall Street’s experts that the economy is now in a phase of recovery, however we are told that this is a jobless recovery. "Jobless recovery" must be a new mantra concocted to perpetuate feel-good perceptions. There is little point in wasting anyone’s time analyzing this non-sense. For the millions of unemployed, and all the workers who will lose their jobs over the coming months, the economy is, and for the foreseeable future, will continue to be in a recession. This is not a glass-half-full attitude, but a lucid perception of the reality facing the road ahead for taxpayers, so let’s not sit and wait for answers from government. The actual number of unemployed is over 26 million. Where are we going?

As a result of this drawn out recession, and out of the undiminished American perseverance, a whole new wave of entrepreneurial ventures will spring up over the next five years. Washington has not been able to kill the entrepreneurial energy that created the millions of jobs in the first place, regardless how much it has tried. This remains enough of a "free" country that from the housewives in the suburbs struggling to feed their families, to the laid off office managers in the cities, individuals across America will rise to the challenge, and do something for themselves. They will take back whatever control over their own lives they might have relinquished to carelessness. Such is the nature of the human condition, as long as it does not allow itself to succumb to oppression, but holds the door open to fulfilling inspiration. America continues to be an environment where fulfillment at all levels is possible.

Out of the current stress and anxiety, will sprout a new collaborative entrepreneurship flowering through mutual inspiration and encouragement. The population’s negative reaction to “bigger, more expensive government,” that we have seen this past year, has not been an accident. While there will always be those who want to be “taken care of,” the vast majority of America has a natural desire to flourish and succeed without “big brother.” America also wants to see its government implement its laws with more diligence than has been demonstrated over the past twenty years.

Over the coming decade, the biggest change in perception that Americans will have to make will be in their relationship to debt. Debt has been very effectively promoted by banks and government, to the point where consumption of the conspicuous kind became a necessity for happiness.

Our general perception has been that debt is not only right, it is a right. Evermore lavish homes with equally lavish mortgages have become expectations, without which we have not achieved the unanimously accepted “dream.” How has such a perception translated to the national stage? It has become nationally acceptable that the U.S. government reach a state where it owes $13 trillion or a little under $120,000 per taxpayer. With an ever-increasing Federal budget deficit nearing $1.5 trillion, and no one seriously yelling stop, politicians have every right to think they have free reign to do as they please.

Washington knows and understands that perception is everything. Until the taxpayers decide otherwise, the White House and Congress will not implement restraints on the out-of-control spending.

The 110 million Americans paying income tax should lock out the grating noise of the propaganda machines lathering up their conscious minds with idiocies, and do what is right - Change perception on debt. Debt should be used when absolutely needed, rather than when desires have been stimulated into “wants.” Much of the national budget has been bloated by special interests, and by satisfying the personal wants of elected officials. A fraction of all government spending is needed. Demand a drastic cutback on that spending.

Debt has inflicted enough damage on the American landscape, and come very close to injuring the American psyche beyond recognition.

• Toyota Under Political Siege

2010-02-04T17:01:00.006-05:00

Toyota’s has overnight passed through a political tunnel that has severely tarnished its image as the greatest automaker on the planet. With U.S. Transport Secretary Ray LaHood leading the attack, and Unions piling on, the Administration’s denials of nationalist impulses are transparent. The White House apparently believes that it is now appropriate to extend corporate bashing to foreign controlled companies. Attacking banks went over well with the fawning MSM, now that same media is jumping on the train and fueling passions against a company which directly or indirectly provides hundreds of thousands of jobs to North American taxpayers.

It is peculiar that the Administration and Congress, along with friendly members of the MSM, are attacking a well-run and successful Japanese company so aggressively, while giving a comparative pass to any Chinese company transgressions with millions of faulty and dangerous products distributed across America.

The answer appears to rest in the undue power and influence which the United Auto Workers (UAW) currently enjoys with Washington, and very directly with President Obama.

Mr. LaHood can pretend otherwise, but his “stop driving” Toyota comment had the intended consequences of directly affecting the perception of Toyota in the marketplace. Democratic California Congressman Henry Waxman found easy fodder with his accusations of misleading statements from Toyota as to the causes of the more serious vehicle incidents. Waxman is playing to the home crowd along with the UAW, in his chastisement of Toyota - the underlying reason being Toyota’s closure of a unionized plant in California. How can Waxman possibly believe he is being helpful to his constituents?

Laws and government oversight are in place to deal with managerial malfeasance when it comes to auto companies knowingly misleading the public, or selling vehicles it knows are faulty. Carmakers have in the past been guilty of such practices. There is no evidence here that Toyota has for years sold cars into the market that it knew were faulty. Should facts in time prove to the contrary, the executives responsible will endure the consequences. Engineering and manufacturing mistakes occur, and all auto companies have had to endure the damage that such events present. Although Toyota may be mishandling it’s PR response to the faulty accelerator pedals, given the facts as currently available, the company appears to be responding responsibly to a recall that will cost its international shareholders billions of dollars.

Toyota will survive and will continue to manufacture some of the best vehicles on the road. Current Washington attitudes toward business and industry, and now toward foreign owned businesses, however, presents an attitude that may prove very harmful in the short, mid and long term, to long lines of unemployed now reaching 17% levels. This calculated, aggressive and belligerent continuation of impugned inclination toward a significant, and otherwise pristine employer, should give us pause. Leadership in Washington is flailing in an ill-perceived wind of populism.

This Administration should come out strongly and audibly reversing its course, and it should reign in the misguided thrashing of a major North American employer.

• Policy Development By Panic

2010-01-21T17:31:00.012-05:00

American taxpayers should not read anything into today’s stock market supposed reactions to the President's verbal and policy attacks on banks. Markets have little to do with realities of the broader world and its economics. The Presidential attacks, however, should be very troubling to taxpayers for more profound reasons.

Obama is vociferously attacking “risk taking,” that very human characteristic at the heart of America’s success. Observing his address, it is evidently something he doesn’t have a good grasp of. It is also very, very obvious that the President does not understand business, or economics, even at their simplest denominations. The economy and its future progress is very dependent on risk taking.

This post has written repeatedly against the abuse by Wall Street, and has called for the re-instatement of “the Glass-Steagall Act (except as it pertains to the Fed) that was for the most part repealed in 1999 eliminating the restrictions of affiliations between banks and “investment banks,” … and don’t listen to any bankers who tell you different with stories about diversification reducing risk, or banks being completely capable of regulating themselves.” There is no need for knight-on-horse-saving-the-day-grandstanding. Congress should restore the act, but in the meantime, we can sit back and enjoy the theatre as the President shows us how to distinguish market making from proprietary trading within the banks.

Obama’s rhetoric of new populist policies against banks, comes across as a simplistic attempt to flirt with what he thinks is Main Street’s perception of banks. This also smells of the disingenuous, given this Administration’s early actions during the “bailout” debacle, that gave so much credence, and amperage, to the too-big-to-fail idiocy. It obstinately, and uncomprehendingly, provided hundreds of billions for the creation of financial behemoths. No preconditions were established, nor were any strings attached to the money. Wall Street played with this Administration, as it did with the Bush Administration, and helped itself to taxpayer-borrowed cash. This President should be taught that failure, big or small, is part of the long road to both personal and business success.

Contrary to Obama’s claims, the financial meltdown was NOT caused by the reckless abandon of speculative bankers mired in greed. It was the direct result of cheap money from The Fed, being pushed onto consumers with little, or no credit, by a Congress, which believed in the mantra, “everyone should own a home.” If anything, we would like to hear about some reigning in of Fannie Mae and Freddie Mac, . . . just for starters. The greed which drove the likes of Goldman Sachs, Morgan Stanley and City Bank beyond the fringes of ethical boundaries was not the root cause of the disaster the world is now burdened with.

Obama’s attack on banks is a knee-jerk reaction in response to the devastating Democrat loss of the Massachusetts Senate seat this week. This breathes the fragrance of panic. The President evidently has no idea how to approach the most important concern on the minds of his constituents – stimulating the creation of jobs. He should stay away from teleprompters for a few weeks, and educate himself on the workings of businesses, and the economy. Then he should surround himself with advisors who have actually managed a wide variety of successful enterprises. The result should then be a speech, without teleprompter, impassionedly promoting American business and ingenuity to the national and international community.

What America will definitely not need is a lecture on what its core values should be.

• Nantucket’s Cape Wind Whips Up Hypocrisy

2010-01-14T00:15:00.009-05:00

The Nantucket Massachusetts Cape Wind plans to built the first U.S. offshore wind park are blowing some toxic waste to the surface of the broad zeal to create “green” industries. These toxins are not of the materially harmful kind, but consist of all the pretentions at the core of too much human self-indulgence floating around the quagmire of the green energy movement.

The planned 130 wind turbine forest covering 24 sq. miles, which is intended to become a symbol of alternative energy on Horseshoe Shoal in Nantucket Sound, could also become an enormous subsidy magnet, sucking $731 million from taxpayers, before any long term costs are estimated. The “money” in such projects is in “building” these blights on the landscape, and then heading out of town because they have historically never proven to either work or be comparatively efficient when measured against other energy sources. Nevertheless, the irony of the Cape Wind debate rests in the reaction it has received from the wealthier Massachusetts residents, lead by the Kennedy family.

After the recent push from the White House and Congressional Democrats for Cap and Trade legislation, and for a Copenhagen Agreement, it is ironic that the Kennedy clan and its Massachusetts friends are campaigning against the Cape Wind project. It seems, quite justifiably, that the blue bloods don’t want any unsightly giant wind turbines disturbing their idyllic paradise, and would rather not have them distract from the expansive views visible from their oceanfront weekend mansions. The farm would be visible from Nantucket and Martha’s Vineyard. They are using the obviously suspect rationalizations for their dissenting views, including the concern for wildlife, and the danger to air and sea navigation. They would evidently be much happier if the windmills disadvantaged some other corner of the population, even as they profess support for them generally.

The hypocrisy here is that they can’t bring themselves to speak against the sham that is the building of windmill farms. The moneyed Massachusetts residents who have controlled that State’s politics for two generations cannot bring themselves to admit that this windmill project would be unviable, producing electricity at approximately twice the current wholesale prices (Minerals Management Service (MMS) Draft Environmental Impact Statement), or that such windmill farms are notoriously inconsistent, unreliable, and expensive to maintain. Currently the money is in building the farms, and not in their successful energy contribution to the grid over the long term.

There is ample evidence that such systems create cash sinks that do not benefit any progress toward renewable energy sources, which is now forcing Europeans to scale back on their windmill investments. Massachusetts blue bloods will rest self-righteously in the comfortable feint that advocating windmills plays to the politically correct, politically lucrative, and presently financially rewarding clean-energy movement, but, “Hide these windmills somewhere far away, and not in my backyard.”

• America Waits For Leadership

2010-01-06T22:17:00.014-05:00

How can history be an accurate record when the elusive present is being recorded as wild distortions of reality? The mainstream media’s (MSM) record of the White House, which it reflects onto the American perspective, as well as it’s flaccid ruminations on the Obama Administration, commemorate Napoleon’s, “history is the invention of historians.” Obama is failing in his duty to country, and the MSM refuses to acknowledge the evidence.

The word history comes to us from the Greek word historia, which means knowledge acquired by investigation. The White House press corps is the supreme example of the current Fourth Estate’s inability to analyze, question or investigate as it panders to a President who was given a mandate to affect change in Washington. History is being distorted as it is being written.

The expectations of the taxpayers have not materialized, and anticipations have given way to disappointments, yet the MSM cannot bring itself to raise any serious questions. It’s not as if opportunities to question don’t exist. Obama has given a speech each and every working day of every week of his administration. Research should prove that no President in history will have made as many speeches, yet the Nation is stuck in anticipation of substance.

The latest sampling of this President’s systemic tepid engagement in his job as America’s CEO, came in the form of an unenthusiastic tropical response to the attempted bombing of Northwest Flight 253. Evidently the managerial capacities required to direct an administration were not part of the Obama tool-set when he moved into the White House. The blight from the dearth of experience, and the entrenched ideology in his Cabinet and czar brigade, has been unveiling endless failings from the outset, and yet, Obama can’t dismiss the likes of incompetents such as Napolitano. Admitting a mistake of posting would be a sign of confidence, rather than one of insecurity.

Political debts of this Administration run deep. The billion dollars Obama raised to win the Presidency expect influence. He lost all objectivity and independence from such influence long before he moved into the White House. Unfortunately, such is the state of politics in Washington. With tingling in its legs, the MSM gives his failures a pass, and in doing so, it forsakes its responsibilities to American taxpayers. The media refuses to demand the most important and reasonable expectation of the population – it refuses to demand Leadership.

Obama has been hiding behind the teleprompter long enough, and should be confronted with the obvious, the first of which is his tiresome blaming of the Bush Administration to deflect all responsibility for the economic and security challenges of America.

Obama and the current Congress are responsible for the accelerated government growth and spending of the past year. They are intimately and directly responsible for disastrous and ill advised programs such as Cash for Clunkers, bailouts for the Too-Big-To-Fails, dishonest promotions of a two thousand page health care bill, inept indulgence of Wall Street, bold pandering to special interests, and the explosion of unemployment to over 17%.

This Administration appears to be ensconced in the belief that a broad and rapid expansion of government, and its insinuation into all walks of American life, is the answer to economic problems facing the Nation. To be allowed his ramp-up of government, Obama validated in Goldman Sachs, JP Morgan and their Wall Street friends, a right to abuse taxpayers through a confoundingly complex cash grab, and a purchase of unknown toxic assets. The Administration further succumbed to special interests by obliterating any calls for the return of Glass-Steagall. This White House is completely void of any understanding of the key drivers of the American way of life - the small to mid-sized businesses. It is also flailingly uninterested in genuinely furthering its own education on the subject. It has become evident that this President has no interest in fostering the encouragement and stimulation of the entrepreneurial spirit in America.

Obama also seems confused on the international front, having administered one misstep after another with perpetual miscues in his actions, and in the perceptions he leaves in his wake. The vexing list is rather embarrassingly extensive, and it includes everything from Obama’s extravagant bowing to a dictator, then to his doubling over to a king. At the other end of the perplexing-Obama-acts record is the snubbing slight of the Prime Minister of America’s biggest trading partner, Canada’s Stephen Harper. Harper was shown to a back door of the White House, and was received by an administrative minion since Obama was too “busy.”

More substantively, Obama extracted nothing from Russia when he reversed the proposed installation of a European missile defense system. Now Iran runs amok, with ample time to hide its nuclear fuel and uranium enrichment facilities. Hard sanctions on Iran? That would be a “hard” decision, very much in opposition to the appeasement strategy employed to date. Have we so soon forgotten the Administration’s condemnation of the constitutional removal of Manuel Zelaya, the Honduran, America hating, Hugo-Chavez supported despot? Given the MSM’s refusal to confront this President, we have also no doubt forgotten Obama’s appeasement, and offers of some engaging “rapprochement,” to the murderous Omar Hassan al-Bashir of Sudan and his homicidal regime.

There was broadly felt consternation with Obama’s response to the Fort Hood massacre, and dismay with the languid nature of his address to the cadets as he announced that he was sending 30,000 young men and women into Afghanistan. We have yet to hear a rationalization from the most powerful lawyer in America on the decision that may unravel his Presidency - enabling terrorist to Lawyer-Up. No matter how much earnestness the President now pretends to convey in his prepared addresses, he long ago lost any appearance of authenticity, and the authoritative was reduced to an eerily natural self-righteousness. The capping may have been the weak-minded, insecure and vain B+ self grading.

Some have accused Obama of dithering, particularly on concerns of international affairs and national security. “Dithering,” is a colorful term, but is inappropriate here. Obama is simply incapable and unqualified. He was given ample room to demonstrate the claims of his intelligence. Wasn’t he a professor with a law degree, after all? Didn’t he rouse audiences with a couple of lofty speeches that bordered on sermons during the campaign? Yes he did. And, . . . well, that’s it.

His detachment, and apparent lack of passion, was initially rationalized as “well, he’s listening and he’s thinking.” Now this insensibility surprises, even befuddles, a majority of the electorate that launched him into office. Whether or not he actually lacks passionate disposition toward his country is no longer relevant. Smart or not, is also irrelevant. He is not a leader, and that, he cannot, and will not change.

America still waits for promises of speeches, given during the most expensive Presidential campaign in history, to materialize into actions that will be positive for a Nation facing unprecedented debt, deficits and unemployment. Though it yearns for leadership, America now knows better than to anticipate it from this President, and knows that such misplaced hope is too disheartening.

While the MSM continues its fawning ways, America will look to the next Presidential election to find a strong and willful leader. America doesn’t want or expect to support all of its President’s policies, or decisions, or compromises, or appeasements, however, America wants to know it has a leader of integrity who is never in doubt, and who makes it proud. America wants a leader who takes decisive actions nationally and internationally. America wants, and deserves a leader who says, “I will not rest until, . . .” and then doesn’t jump onto Airforce One, heading off on another golfing trip, or other holiday, or other speech in another zip code.

One good piece of news: The vacuous promises of Hope and Change will be decidedly wiped from the lexicon of Presidential campaigns for at least one generation.

• Napolitano – Incompetence In Ascendance

2009-12-28T21:13:00.014-05:00

When a CEO fumbles and stumbles repeatedly, then demonstrates incompetence, the company’s Board takes remedial action, and if it doesn’t, the shareholders get vocal with their votes. When the head of Homeland Security repeatedly demonstrates an inability to manage, as well as a peculiar ignorance of either mundane or critical facts, does she get sidelined? Not in this Administration.

Janet Napolitano said on CNN's State of the Union, "One thing I'd like to point out is that the system worked." After the Nation had a head-shake wondering what planet she was talking from, she then said on Monday, "No secretary of homeland security would sit here and say that a system worked prior to this incident which allowed this individual to get on this plane.”

This is the same Napolitano who in April of this year, shortly after taking office, demonstrated an uncommon knowledge of geography, international affairs and of recent history, with a claim that the Sept. 11 hijackers entered the United States through Canada. What a great opening statement for a New Administration to make toward its biggest trading partner, and supplier of the majority of its energy needs.

This former Arizona Governor is a self-proclaimed road safety expert because she thought that she could put a dent in the Arizona deficit by installing a photo speed enforcement program. The fact that the systems don’t even pay for themselves, much less bring in tax dollars, escaped her notice, and she went to Washington before the evidence of her mistake came to the fore.

On the list of all services a government provides its population, Security is first and foremost. The position of Secretary of Homeland Security is one that should be filled with an individual who is Ready, Willing and most importantly, Capable, of fulfilling the demands of this most critical post. This administration has deemed that security and terrorism are almost inconsequent concerns of American taxpayers, since it has attached such an inconsequential individual to manage the department. Fortunately, courageous passengers who demonstrated swift presence of mind and effective action trumped the serious breach in National security that resulted from the mismanagement.

One Canadian newspaper in April 2009 asked, in reference to Napolitano, “Can someone please tell us how she got her job?” The question today should be asked of the President, “How can someone this incompetent retain her job, and why has the task become so unimportant?”

Well, while we're asking questions, there's one more question that absolutely must be asked, "Can anyone from this Administration deliver common sense and coherent commentary without a teleprompter?"

• Tiger Woods – The Hazards Of Assumptions

2009-12-18T16:13:00.007-05:00

The floodgates on Tiger Woods news opened and cannot be closed, as he remains the biggest story in all media. Notoriety and cash seeking alleged girlfriends surface by the hour, and rare factual tidbits eek out, tantalizing our celebrity obsessions with a daily fix. Are we actually learning anything from the circus that has become Tiger’s life?

To fuel the frenzy, as if that was needed, Associated Press assigned Woods the title of Athlete Of The Decade. This may simply be an attempt to confuse us at to what constitutes either a “sport,” or an “athlete.” Did Lance Armstrong, Roger Federer, Ronaldinho and Michael Schumacher not demonstrate enough dominance in their “game,” or sufficient superiority of character? Probably, but this isn’t about athleticism.

Woods has dominated Golf, and that undeniable fact has brought him acclaim which in turn has imposed the weight of $100 million in annual endorsements onto his life. The current meaning of endorsement is, “pretend you like our products so that those who idolize you will believe you enough to buy them. Your brilliance on the golf course means you are an upstanding, honorable and respected character. Your word is gold.” Well-crafted endorsements are swarmed by expectations, and tinged by assumptions.

The public assumes that if you are supremely great on the golf course, you must also be gifted with other assets such as intelligence, grace, maybe even a little common sense. No chance that you might be narcissistic or self absorbed, and no chance that you believe your own press. Yet, your biggest challenge is your own ego. It is that Achilles heel that will be exploited by your handlers. Whether or not this is Tiger’s problem, his current state of affairs suggests that he should be more attentive to his hired help. Some of his handlers may not be in his camp and more than a few might truly not wish him well. It doesn’t take a genius to predict that the public will soon be pandered with the required dose of apologetic “addiction” treatment, and sorrowful wistfulness of divorce proceedings as we witness “damage” control. His family, his children, don’t deserve the kind of exposure they will have to endure as they prevail over their uncertain emotional road ahead.

So where does that leave his sponsors? Unfortunately, what we have so far witnessed is not terribly encouraging. Knight, of Nike, has said, "When his career is over, you'll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now." This is not what anyone should expect from the head of major company. No need to analyze the inanity of this perception since there is little ambiguity in the obvious.

We cannot assume that because someone is the CEO of a company, that the position automatically imbues the occupant with wisdom, principles, ethics, or morals. We can hope, but that would be foolish. The insecure egos running some of our Wall Street financial institutions are currently providing ample evidence that such assumptions can be misplaced – and therein lies a lesson on making assumptions about power, wealth and celebrity.

We are also being reminded that we are in charge of our perceptions. We are in control of what we accept, or normalize as appropriate behavior. While we may not be in absolute control of the appropriateness of everything our children are exposed to, we have influence on what we embrace as the mores that will colonize our own lives and theirs.

Regardless what our mainstream media, or the corporate landscape has decided “sells,” wealth and celebrity are not anointments of “right.” The implosion of Tiger’s familial career reminds us that we should be very discriminate in the broader conditioning to which we accede on our percepts. We should unambiguously guard the nature and the influences that we affirm on behaviors – ours and those of our children. The Nikes and Tigers we venerate cannot do that for us.

• Not Overheard In Copenhagen . . .

2009-12-08T06:26:00.004-05:00

As the deceit of the limo-jet-caviar congestion of Copenhagen grinds that city into the forefront of an international tragedy, there will be no mention of humanity’s biggest challenge. Political correctness amongst the 15,000 attendees and the attendant fawning media will ignore the irony of this self-serving and bloated spectacle. They will be excused their extravagance and their obscene carbon footprint, culminated with the arrival of President Obama on Air Force One, and his unsparing entourage. Economic forces along with the political correctness will prevent discussion on the root cause of stress on the earth’s oceans, air, forests, rivers, and lakes. No one in Copenhagen will breathe a word about the world’s population.

The Copenhagen conference is a United Nations gambit using fear of global warming as the apocalyptic Armageddon that will squeeze hundreds of billions of dollars from the United States and Canada, and will redistribute the cash as it sees fit. Copenhagen is not a conference intended to clean up our environment.

Obviously all third world countries run by dictators, as well as the very few who aren’t, will clamor for consensus. Why wouldn’t they? More cash means more Bentleys and Escalades, another mansion or two, as well as a shipload of arms to maintain power. When you don’t care about your own people, but strive to retain absolute power over them with brute force, the least of your concerns is a distraction from foreign fanatics with a cause, but if it’s going to fill your coffers, . . . bring it on. Countries such as China and Russia with a wink and a nod will continue on course, unrattled or swayed by anything the international community has to say, yet surprisingly, they are the only two who’s populations are shrinking.

The only world leader who seems to have kept his wits about him is Canada’s Steven Harper. He is the only leader who has remained cool to jumping onto the Copenhagen climate change boondoggle. He appears to be the only one cognizant of the fact that Copenhagen will not clean up the air, and will only drag his taxpayers into deeper taxation. Obama, on the other hand seems oblivious. Obama’s Cap And Trade program should remain right where it is, … nowhere, and taxpayers should remain skeptical, unlike too many scientists who appear to be closing the books on the supposedly “settled science” of climate change. Absolute certainty, . . . um, is that another term for scientific stupidity? Does that not grate on the “scientific method?” Is this an example of progress toward truth?

Attention should be brought to addressing the world’s continuing population explosion. The Earth’s population has now crossed over 6.8 billion, rapidly getting to 7 billion in 2011. Let’s note that there were only 2.5 billion of us in 1950.

It is reasonable for each individual to have the right to enjoy a positive and fruitful life. Unfortunately, there is a reality that comes with each life here on Earth - each of us requires sustenance and each of us “processes” more or less of the abundance nature makes available. There is only so much we can process in the aggregate before nature’s support system stresses beyond its ability to sustain our needs, never mind our wants. The dead zone in the Gulf of Mexico is one of thousands of examples around the globe of the overburden we have imposed. Technology does not hold the magical answer to sustenance for our ever-burgeoning numbers, and technology will not bring an end to our abundant polluting. Even if we all lived in an Amazon of windmill trees, we would still choke the life out of nature around us.

Beyond the domain of political correctness, lives the game of economics, and the simple fact that the greater the number of people, the more there are consumers. Consumption supplies the fuel for economic growth - growth in products, goods, services and above all growth in the money supply. Growth in global population accelerates the concentration of wealth at the top of the economic food chain. Don’t expect the political or economic leadership to touch the population concern.

The only answer lies in the dissemination of as much education as possible, which will bring positive affect so that a bigger percentage of the earth’s population can exist beyond just the daily struggle to minimally survive. We should call for a World Population Conference, instead of a Copenhagen Climate Change conference, to be convened within a couple of years before the population trend irreversibly crashes into the brick wall of ignorance.

• Transforming Perceptions Of Reality

2009-12-01T14:48:00.021-05:00

We have entered a new phase of reality distortion as negative events become positive in their reporting. Truth is being transformed. I don’t refer here to politicians lying about the state of affairs to promote a self serving scheme or other. I refer to the mainstream media and its warped reporting of the reality its audience lives through each day.

Perhaps we subconsciously need the adulteration of our realities, converting them into distracting wishful deceptions. Is there a chance that the effect is dispersing our anxieties? With so many directly affected by a burst-mortgage-bubble recession, positive spins are readily accepted. How else can one explain an acceptance, with all associated relief, of continuing increases in unemployment numbers? Is it because the totals are not as bad as had been expected? How did it make any sense that the financial institutions most responsible for the current state of economic affairs became the too-big-to-fail partners of government? Is there any doubt that Wall Street controls the agenda?

Why is it good news that government has insinuated itself into the heart of American industry while permanently bolstering union influence over the management of companies like GM? Has something new been introduced into the concept of socializing industry? Did Soviet Russia not prove beyond any doubt that government-in-charge doesn’t work? The current version of hope-and-change appears to simply mean Big Government.

Is it really good news that the health care industry is heading irreversibly toward a day when it will be a government run business? Were there not alternative strategies available to seriously improve the state of health care including those discussed here: Health Care - What You Are Not Hearing? But wait, there’s more good news coming, and please ignore the $12 trillion U.S. national debt almost equaling the Nation's GDP, since it only amounts to $111,000 per taxpayer. It is apparently great news that this amount is minor when compared to the funds “committed” to health care and pensions that the Baby Boomer generation is fully expecting just around the corner.

When a President professes concern about deficits, but supports unprecedented spending programs sending the Country into out-of-control deficits and debt, the headlines read, “good news,” because he doesn't really want to do it, but he has to. The media sells us the gossamer subtlety of "intent," to promote acceptability of truth distortion. The fawning mainstream media is doing its best to channel public consciousness down the feel good road.

Look for more government stimulus money to be added to the already pegged $787 billion stimulus, much of which has been allocated to prominent Democratic districts. Over two thirds of the money is still awaiting distribution, obviously being held back for release at the most propitious time in order to achieve maximum influence on upcoming elections.

Fear has been very effectively used through the past few years by government to gain support for the implementation of decisions that might not have easily floated over the electorate otherwise. Positive spin has worked the fear, and converted absurd policies into amplified and satisfying rays of hope.

If the main stream media continues its persistent misrepresentations of the truth, hope will disintegrate completely as new intractable realities insinuate themselves permanently into the economic and social landscape. Taxpayers deserve better from their Fourth Estate and from their politicians. If this transformation of perceptions doesn’t end soon, the result will be an irreversible transformation of America.

• Show Trial Goes To New York

2009-11-16T01:18:00.012-05:00

The significance of continuing growth in unemployment ranks has been obliterated from news headlines by an unexpected decision by the Administration: Khalid Sheikh Mohammed and four other Guantanamo Bay Sept. 11 terrorist detainees will be tried in a civilian federal courthouse in New York.

Democratic support for the decision argues that a civil trial would be a demonstration of America's might and moral certainty, and such a trial would be further confirmation that America’s justice system is the envy of the world. Republicans counter that demonstrating such civility toward foreign terrorists seeking to destroy America’s way of life is a servile and underserved accommodation which would provide a dangerous platform.

This Administration is loath to acknowledge the term "War," particularly as is relates to religious extremists. Does this Administration feel this way because the extremists have bases in various countries and are funded from numerous sources scattered around the world, and therefore it is reticent to antagonize those foreign governments? Is there a concern that acknowledging a war would by inference mean an indirect war on countries from Saudi Arabia to Indonesia? Events wherein people using powerful weapons, funded with hundreds of millions of dollars, launch attacks against a country, its people, its embassies and other outposts, are not just “criminal acts,” they are Wars. Pretending that perpetrators of such acts are not “at war,” but are conducting a broad, concerted effort of criminality, flies in the face of rather ordinary common sense.

Civil trials pointing the guns of American jurisprudence at the most infamous terrorists to have ever committed crimes against America on its own soil will become venues that will launch a new crop of lawyers onto the international stage. Could we dare suspect the Administration believes that a New York City trial for these most visible terrorists will keep the “blame Bush” fires alive.

The loud crowing we hear about exposing the world to the American judicial system is disingenuous. The Islamic world already knows the American system is different from its own and doesn't care how. Most Islamic countries are dictatorships, by any other name, whose leaders don’t much desire open societies, or an American style rule of law. They know it, we know it, and the rest of the world already knows it.

On the other hand, a civil trial, and the legal hams and egos who will run that circus will expose America’s espionage and intelligence systems, and methodologies. We already know waterboarding was used, however, we can expect that it will be used by the defense, and in so doing, once again revisit the application of such torture, purposely putting the previous administration on trial.

We should note that U.S. Attorney General Eric Holder stated that the five suspects prosecutors would likely seek the death penalty. This is not a very definitive statement, but he had to reassure New Yorkers that they would not likely run into these killers while shopping on Park Avenue. We should also note that Holder’s law firm, Covington & Burling, represents seventeen detainees of the Guantanamo Bay detention center. In time we will discover the true nature of such a conflict of interest. More importantly, given the nature of civil trials, the rights provided to (usually) American defendants, the discovery process and the eventual appeals process, American citizens will not find the hands of justice administering punishment on these fanatics until well over a decade has passed.

Fanaticism is deaf to all pleadings, be they judicial, political or personal entreaties. Pretending that a federal civil trial will be a victory against terrorism is flailing against an ill wind, and will accomplish little but inflate the self-righteous.

True and pure statesmanship should be untainted by idiosyncrasies of politics, or political provocation, however, this is evidently too much to ask for. This trial is guaranteed to become a proverbial three-ring circus. We may also become baffled as publicity ignites strange images on the streets of distant cities around the world, as lawyers play their games on this venue in New York freshly served up by the Administration.

• The Commander In Chief And Today’s Disaster In Texas

2009-11-05T17:32:00.009-05:00

As I watched the first news reports of the Fort Hood Military Base shootings, I wondered what the right response from the Commander In Chief should be to this disaster. At around 2:00PM, we all witnessed the actual response from the sitting President, but what would you have done?

Twelve members of America’s troops are dead, and at least another 31 have been wounded. These 42 soldiers and their comrades were preparing for deployment to the front. This is major calamity, not just because it occurred on American soil, but this crime was committed, it appears, by one some of their own, on an American base. The shock to hundreds of individuals comprising the related families will last a lifetime.

The priority for the Commander In Chief, IMHO, would be to bypass any planned speech and immediately fly to Austin, Texas, act like a Commander In Chief, go to the site of the shootings, meet with senior staff, assess the situation and events that led to the shootings, speak to the troops, particularly the injured, demonstrate concern and take action based on the findings of your assessment. Such actions should include addressing the families of the fallen and the injured. Assure the American people that their military bases and the security of the bases are not compromised and all possible measures will be taken to tighten what already has been established to safeguard the safety of soldiers.

Once satisfied that orders have been issued on all potential fronts of the follow-up, fly back to the White House, and get on with the addressing the challenges of the Nation.

Would you have remained in Washington, and while giving a speech, mentioned the killings in a “by the way," addendum? Perhaps not.

• The UN – A New World Power Through Climate Change Fears?

2009-10-29T22:18:00.013-04:00

The international movement to provide the United Nations (UN) with unprecedented power and influence over world affairs has found a seemingly innocuous, but deceptive train to ride. The North American perception of this world body founded in 1945 has become that of a vast, but vapid and corrupt organization. The UN “Climate Change” train will change that impression, but not for the better. With support from the Obama administration, the path ahead will place the UN on a track toward receiving an irreversible influence over our lives. The continuing corruption will render untold dividends for the corrupt and morally repugnant.

There are currently 192 countries making up the United Nations members list. The vast majority of the member nations are dictatorships by any other name. You can dress their leaders in fancy robes and toss an occasional crown on a head, but from Saudi Arabia to Libya and Gambia, their leaders oppress their populations. They loot as much as they can from their economies, while enjoying a comforting credibility rubbing shoulders with other narcissistic misanthropes under the opulent umbrella of the UN General Assembly.

The UN has never been an effective vehicle for achieving real peace and security, although it was intended to achieve exactly that when it replaced the impotent League of Nations. The overwhelming power of the United States has been the major underlying force that has prevented major international wars since WWII. The UN has been an inept bystander to international affairs. America’s power and influence has generated kick-back that has been fomented within the UN where jealousy found broad fertile ground amongst a majority of member nations, including Europeans such as Norway, and Denmark. No need here to extend the list of envious pretenders that easily includes the likes of Russia.

The reaction against the U.S. found new energy when the world found itself in an economic recession, and fingers could be pointed at America for having been too self serving. In slide the opportunists. Beating the newfound drums of climate change fear and catastrophe, they will mutate the upcoming Copenhagen meeting on climate change into a perfect vehicle through which begrudging usurpers will once again attempt elevating the UN to status of world power, “over” the U.S.

We can rest confident that the contemplated Copenhagen Treaty emanating from this meeting will find elements to mirror in the cap-and-trade bill now being promoted by Obama and Congress. This, along with the December 10 Nobel Peace Prize presentation, will lock-in support from Washington for the agreement. Obama and Congress will have unwittingly signed on for the formation of Two disasters. The first will be a UN managed onerous extraction of cash from the United States and Canada for what can only be described as payment of a “climate debt.” The second will be the unprecedented endowment of the UN with sweeping powers over the economies of all nations. The text currently contemplated for signing by the membership will provide this body with incisive absolutism over the economic engines that have fuelled both America’s hegemony, as well as its population’s independence of thought and freedoms.

Keep in mind that many, if not most, of the enlightened leaders of UN member countries are the same ones responsible for crimes against humanity, … their own humanities within their own home borders. This is also a membership heavily populated by misogynistic individuals who believe in the subjugation of women and criminalization of homosexuality, all the while pretending to promote the United Nations Declaration of Human Rights.

The time has long passed for the UN’s charter to be changed. The UN has no ability or capacity to act as a world peace maker. It could remain as an organization directed toward humanitarian efforts, and provide a meeting place for resolving broad international challenges pertaining to education, population, or agriculture. It cannot, however, be allowed to morph into a world power. The United States, which funds almost one quarter of the UN’s budget, should not allow it. Obama and Congress should refuse signing America on to the Copenhagen agreement, or any version of it. Copenhagen has nothing to do with cleaning up our refuse or CO2.

I should add a Third ensuing disaster if Copenhagen materializes: A weaker America would not be positive for long term prospects of world peace.

• The Obama Nobel Is Not About Peace

2009-10-17T17:52:00.015-04:00

We have suffered a week of apoplexy having endured a bombardment of reasons offered to justify a Nobel Prize awarded for expectations and promises rather than results. Our rationality has been addled as all corners of the MSM meandered through fantastic rationalizations. All appear to have missed the mark. The ideologically motivated radicals dominating the Norwegian Nobel Committee, are not seeking peace in the world, but are making a down payment on fortification for their own agenda. The United States and Canada will pay dearly if this agenda materializes.

Let’s first dispel any doubt that the offered reasons for awarding President Obama the Nobel Peace prize were ungenuine. He hadn’t warmed the king sized bed in the White House when he was nominated, which means that any real evaluation of his authentication as a Nobel awardee, other than the oratory of his campaign, was impossible. In the end, the Nobel Committee stated that it, “… attached special importance to Obama's vision of and work for a world without nuclear weapons.” Reality and common sense in both Norway and the White House seem to have vacated the premises.

Promises made by politicians are for electioneering, and they rarely see daylight. Remember when Obama made a bold and firm commitment that he would pull out of Iraq if he were made President? That was a defining and differentiating moment in the race to the Oval Office. Did he do what he committed to do? Are some of his phantasmagorical promises also the delusions of the Norwegian Nobel Committee? We will find an answer in the upcoming Copenhagen climate summit to be held in early December.

140 nations will meet in Copenhagen to replace the Kyoto Protocol, which runs out in 2012, with a global deal supposedly intended to limit CO2 emissions, reduce the destruction of rainforests, and help developing countries to become low-carbon economies. On the surface, the publicly claimed intentions of cleaning up our emissions from our air, our garbage from the oceans, and our toxins from the soil are lofty objectives very deserving of acclamation. The reality that will arise from the United Nations Copenhagen Climate Change Conference will prove to be something altogether different. What is to become the “Copenhagen Agreement,” will in fact be the largest international redistribution of wealth ever undertaken. The Earth and our environment will enjoy no benefit.

On December 10, Obama will receive his award in Oslo, just in time to energize the “Copenhagen” agenda. Whether or not he shows up at the UN meeting, the ideological intensions and expectations have been air freighted in the form a Nobel Prize. The Nobel awarded to Obama is a very personal stimulation to procure his support and therefore the financial commitment of the U.S. to a blueprint claiming to save the world.

The Copenhagen meeting in December will require that the United States and Canada annually transfer billions of dollars to the developing world as “climate debt” for past transgressions in their emissions of CO2. A key element in the penalization process will be the degree to which a developed country meets an allocated allowable emission schedule. Countries like the U.S. and Canada will have a tougher time than most, since it is always the last 10% or 20% that is the most difficult and most expensive to “scrub” from your emissions when you have already done more than most to clean up your own mess.

Developing countries will be using starting points with disastrous emission levels, comparable to that of the U.S. and Canada over a century ago. Minor improvements will give poor countries a leg-up on developed countries. Industrialized countries will in effect be penalized for already having well equipped, technologically advanced infrastructures. Canada in particular will very likely incur the highest penalties per capita since it is a net energy producer with production requiring extensive energy consumption, and it endures cold winters and hot, humid summers. This is not to say that every industrial sector should not strive to reduce its carbon footprint. We all should. The conundrum rests in what methodology to apply to the process and to enforcement given the reality that much has already been done by developed countries, and more is planned since all levels of society have become conscious of the need to reduce pollution.

The transfer payments from developed nations to poor ones will be made through purchases of unused “credits,” as well as through outright payments which will be made over and above the current billions distributed as foreign aid. Developing countries will be compensated for “lost opportunities, resources, lives, land and dignity,” and the funds are to be divinely distributed by the United Nations. The UN will also be the arbiter of good taste in all things CO2 emissionable, including all approvals of emission scrubbing plans and the ensuing allocations of emission credits. The agreement also leaves room for developing countries to do absolutely nothing on emissions should they feel they are not receiving enough technological and financial support from developed countries. How is that for a backdoor to escape adaptation?

An invigorated and supremely powerful United Nations is in the offing. The principal justification for turning the UN into a true world power is this: The most advanced industrialized countries are responsible for global warming which in turn is responsible for the drought and famine being suffered by the poorest nations, ergo, the most developed countries owe cash to the undeveloped ones. How more obvious can the planners be than allowing rich countries to buy offsets rather than make emission cuts at home?

Kyoto’s good intensions have mutated into a politically charged Copenhagen draft agreement for a global plan to redistribute wealth to the tune of an estimated $1.4 trillion over the coming decade, which in and of itself will have little or no impact on pollution. The agreement’s impact on climate change will be even more amorphic, nevertheless, we can expect an abundance of fear mongering on the road to ratification.

Obama’s upcoming acceptance of the Nobel Peace Prize and the invisible strings attached to it, while he is quite entitled to claim it, along with his plans for Cap and Trade, may prove to be an enormously expensive exercise for all taxpayers on this continent. The “Copenhagen” supporters on the Nobel Committee, on the other hand, are counting on it.

• Economy – The Outlook Is Your Outlook

2009-10-12T19:45:00.005-04:00

You can listen to conflicting opinions of self proclaimed experts on government activity or lack thereof on “stimulating,” the economy, however, the reality is that the economy’s progress remains in your hands. The top of the financial food chain with the government’s help wants to prejudice your perception toward positive spending.

The American taxpayer is provided an abundance of opinions and fantasies surrounding economic progress packaged as truths, facts or principles. The certitude applied to the delivery of this inspiring radiation has maximum impact on the behavior of the audience.

The vast central swath through the middle of the American political spectrum representing a majority, seeks reasonableness from government. The majority expects its business to be conducted with some integrity, without the encumbrance of concrete boots of left or right extremism demanded by party affiliation. This expectation of common sense, and forthrightness has not been honestly accommodated by politicians. The cost of reaching elected office has so escalated that special interests have become the overwhelming force behind all thrones influencing legislative agendas. As a result, every utterance emanating from a political pulpit has become suspicious.

When Paulson and Geithner browbeat their economically illiterate, and incurious bosses, into bailing too big to fail financial firms, and to launch profligate spending programs, the taxpayers had no input, nor were they provided enough truthful information to know right from wrong. Furthering confusion came in the form of suddenly popular Keynesian economists affirming government stimulus spending. Their continual proclamation of mission accomplished, and the recession is over, has become a tired refrain.

With unemployment hovering at 16%, when you include marginally attached workers and part timers for economic reasons, the principal energy in the system is the government’s $1.25 trillion mortgage support program artificially inflating home prices, borrowed with future taxpayer sweat.

The two principal pulls at opposite ends of the government intervention string, are Financial Stimulus, and Lowering Taxes. The arguments move the cursor of political will along this confusing line with abundant force pulling effectively from both ends. Over the long term, practical evidence suggest that there is little positive impact on GDP from supposed spending multipliers, so the amount spent as financial stimulus will not find itself increased or even mirrored in the amount of the nation’s gross domestic product. From the other side of the great divide, the lowering of taxes has shown some positive affect, however long-term impact has been almost impossible to empirically quantify.

In the middle, rests the most reasonable path which mandates that government, and politics (humans guided by special interests), remain out of the equation altogether, with some leaning toward easing of corporate and personal taxes, and reducing government expenditures. As his will not occur, and as we have seen, the likely reality is for a continuation of tax increases facing the enormous deficit demanding to be satiated.

Your perceptions as consumers, and taxpayers, will impact economic activity. You will dictate the direction, which the economy takes, and through that process, minimize the influence from politicians and experts confusing your judgment with mutable notions of economic confidence. Instilling confidence is intended to move consumers to borrow and spend. Ignore the noise.

As the recession continues, and it will, we should all remain diligent with each dollar we earn, and even more so with each dollar we borrow, unlike the examples set by Washington.

The biggest financial decision we make pertains to our dwellings. We will be hearing newly energized implorations of mortgaging ourselves into evermore elaborate dwellings, or increasing the debt on those we already inhabit. The reality remains that a home’s increasing value should never become a source of newfound cash while we live in it. Perceive your home as an expense if you have purchased one. If you still rent, congratulations, you have bypassed the heavy stress that millions of mortgage borrowers have endured over the past couple of years.

As the ravages of unemployment persist, we can each contribute to a return of long-term national economic stability by viewing each dollar we earn as if it were your last one for a while. The behavior might just be contagious, and will hopefully spread long enough for political representatives to assimilate the message since elections don’t appear to change much in Washington’s behavior.

• Obama’s Blunder On Iran

2009-09-27T19:52:00.011-04:00

We cannot listen to Iran’s Ahmadinejad posturing on the expansion of the Iranian atomic energy program, without recalling Obama’s dramatic reversal on the U.S. land based missile defense system in Europe only days ago. The blunder was not in the reversal, but in its timing and its process.

The degree to which Iran has advanced its uranium enrichment capabilities will remain an unknown factor, and the international community reaction will continue to be perplexed, and marooned in paralysis of fear. Iran will not let anyone into whatever enrichment facility exists. No one will see what the ayatollahs do not wish to make public, sending us into recollections of the disastrous outcome following a long hide-and-seek dance with Saddam Hussein seven years ago. This leaves the world, Israel and the U.S. in particular, with a conundrum of literally seismic proportions. Iran’s nuclear progress is not new, nor is it news. What is new is the loss of one very powerful strategic negotiating tool that could have been useful in addressing Iran’s dangerous belligerence – the land-based European missile defense system.

When Obama backed off the deployment of a missile defense system in Europe, he did so without gaining a single concession from Putin and Russia. Russia had long blustered and railed against the U.S. missile deployment plan. Putin claimed the missiles were intended to threaten Russian sovereignty in the region, and that they were not meant to defend against Iran. The hovering menace from the U.S. was a significant affront to Putin's self-image. Obama’s abrogation of such significant “stance” on behalf of the United States suggests that this Administration learned nothing from the Ronald Reagan approach to international negotiations. Reagan changed the world when he boasted of his Strategic Defense Initiative satellite based defense system. The long list of concessions extracted from Gorbachev by Reagan, as well as his brilliance throughout the process of negotiations, should be compulsory reading for any student of Presidential impact on history.

Disclosure that Obama has known about Iran’s second uranium-enrichment facility all along, and that he has supposedly sprung an international trap for Iran, as some media such as the Washington Post are now suggesting, is peculiar analysis, as well as it is pandering in the extreme. Obama gave up a major negotiating card that could have been used to push Russia toward joining the strengthening of sanctions against Iran. China cannot be counted on to assist any future confrontation with Iran, having taken itself out of the equation with investments in Iran to feed its own requirements for energy and natural resources. The only other power, whose advocacy is truly needed in the region for serious containment of the ayatollahs in Tehran, is Russia. China and Russia provide Iran with enough trade to successfully finance the Ayatollahs through many more elections no matter what sanctions Obama might think of adding to the existing limitations. Iran’s path to becoming a nuclear power appears unobstructed.

The alternative to the controversial land based system being mothballed, according to Obama, is cheaper, quicker and more effective. This means the decision to embrace the new technology is very likely a good one. If you had this information in hand, would you have run headlong into an announcement, given that the planned European shield had been a major thorn under Putin’s belly? The diplomatic clout that the West’s tension with Iran has provided Putin still remains, and no concessions have been extracted, nor are we likely to see any extracted in the near future. Russia’s response has been to provide more rhetoric, and more blustering. The Russian envoy to NATO, Dmitry Rogozin, said, “… Americans have simply put their own mistake right. And we are not duty-bound to pay for someone to put their own mistakes right.” Putin will continue to view Iran as an economic opportunity that will be exploited without interference from the West. The threat of crisis and instability in the region will also maintain energy prices at levels that Russia requires to finance its annual operating budget.

Adding to the confusion of signals emanating from the White House, Obama suggested that he could resurrect the European missile defense plan if Russia doesn’t help with the threat presented by Iran. This kind of accessory statement further weakens America’s hand. It suggests a lack of resolve on the initial reversal of the strategy, and it also infers apprehension about the new strategy and the underlying technology. Can America rely on the new capabilities and technologies or not? Are the interceptor capacities more flexible and cost-effective? Are the advanced sensor technologies capable of detecting and tracking enemy missiles, or aren’t they? Why would Obama even hint at such uncertainty?

The signals showered on Americans and their allies by this Administration’s decisions and announcements are confusing, but to Russia, they seem to be welcome and they reinforce its strategy of saber rattling. Sanctions have also not deterred Iran's ayatollahs. Now, with the loss of a major strategic and negotiating option against the Kremlin, the enlistment of the Russian bear’s assistance will undoubtedly be impossible, and will lead to a more belligerent Iran. We can expect an increase in its destabilizing activities in Iraq and Afghanistan, and its financing of terrorism. The violence we witnessed against the Iranian people after the recent elections should be indication enough that a strategy pursuing, "engagement that is honest and grounded in mutual respect," as Obama wishes it, is simply just that, … wishful thinking.

• Health Care – What Are You NOT Hearing?

2009-09-15T18:10:00.019-04:00

The lawyers and legal minds holding the joystick of politics in America’s White House and Congress, are afraid to make a move. The administration and legislature are staying away from confronting their friends, and former classmates, in the legal profession.

America is holding fast on its resistance to health care reform. The double talk and confusion from Washington is abundant, however the leadership is unwilling to implement changes that could dramatically reduce health care costs such as those that could easily be acted on pertaining to tort reform. We are provided claims such as those from the “nonpartisan” Congressional Budget Office report that malpractice litigation represents only 2% of health-care costs. This one is very “misleading,” since lawyers have always made up the majority of representatives sitting in Congress. It also purposely ignores the real costs burdened onto physicians, and the costly “actions” they take to protect themselves from being financially wiped out. Insurance premiums are just the beginning of the overhead. Defensive medicine has nothing to do with health care, but with doctors protecting themselves, and there is almost no viable measurement on the hundreds of millions that this truly mounts to.

You could extrapolate some numbers such as the 83% of doctors in Massachusetts who order tests they know are unnecessary in order to minimize their potential liabilities. When doctors already pay up to $250,000 per year in malpractice insurance, it is understandable that protecting themselves as much as they can, comes naturally. This is defensive medicine, … not the good kind, but the expensive kind. These tests are not preventive care defending patients against future illness. These defensive actions come from doctors protecting themselves against lawyers of the ambulance chasing kind. While some doctors can be accused of offensive medicine by ordering extra, not wholly necessary tests, don’t believe for a moment that there can be no agreement on what constitutes defensive medicine. You might also ask yourself on average, and in their general population, would you trust more of the doctor, or would you trust more of the lawyers?

Federal tort reform must be implemented, such as bringing under control the size of verdicts handed down by the courts, as well as placing serious caps on noneconomic and punitive damages. It is also critical that the fees taken by law firms in all such cases be reviewed and percentages controlled and capped. Let’s not submit to the bromide that lawyers are society’s first line of defense against private or civil wrongs. That claim is a virtuous and finespun abstraction on justice, no matter how much we wish it to be a truism. We have been witness to enough abuse of the legal system by lawyers over the past twenty years. It is time to close the open season trial lawyers have enjoyed on the medical profession, and bring the enormous judgments into the realm of reasonableness.

Obama refuses to support limits on liability. Does he really want reform of the medical care system? His words are delivered emphatically, but they are vacuous. He seems incapable of taking a specific stand against his friends and financial supporters in the legal profession. Congress is right behind him from both sides of the isle. Neither Democrats nor Republicans seem willing to launch a determined heads-on confrontation with the waste, although some of the reticence can be explained by the fact that the Democratic party took $47 million in contributions last year from the its benefactors in the legal profession. The lip service we are subjected to is easily dispensed, but accomplishes little. The White House and Congress would demonstrate more honesty if they would only pick a side, … address health care needs of taxpayers OR admit to supporting the very financially supportive legal profession.

There is much to be fixed before you ever get to a complete overhaul of the health care system. When there is a dearth of will to implement partial corrections, or controls, pertaining to waste and abuse in the existing system structure, there can be little hope for serious reform other than pursuit of ideological doctrine. Tort reform would be a start, though only a start, on the long road to an improved and sustainable system.

The American public is right to be suspicious of leadership that will not take immediate and specific action that would reduce an estimated $200 billion dollars from the Nation’s annual medical bill. How can taxpayers not be apprehensive of a program whose point person, Secretary Kathleen Sebelius, previously led the Kansas Trial Lawyers Association? This is more assurance that “change,” is not coming.

• Political Campaign Funding – A Democracy’s Dilemma

2009-09-08T23:01:00.006-04:00

Tomorrow, the Supreme Court will hear arguments on the constitutionality of the restrictions that have been placed on corporate money in politics. The ruling may be one of the Court’s most critical decisions in an age which has seen one Presidential campaign accumulate almost a billion dollars in contributions. When the constitutionality of any far reaching federal law is opposed, it is a matter of national relevance, however, when a law affecting the foundation of the Democracy is challenged, such event should be arousing everyone’s notice and should be at the forefront of all news media outlets.

The case in front of the Supreme Court, Citizens v. Federal Election Commission, revolves around a documentary called “Hillary: The Movie,” produced by Citizens United. Based on Hillary Clinton, the film was banned for violating the McCain-Feingold bill which requires disclosure on funding sources, and stipulates that neither corporate or union treasuries can finance any “ad” pro or con just before a primary.

The 2002 Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold bill, was the last major piece of legislation passed to control the source of financing for Federal political campaigns. The bill eliminated soft money donations to the national party committees, and restricted the funding of political pronouncements, ads, etc., by corporations, or organizations such as unions and non-profit organizations.

The arguments and presentations beginning tomorrow in front of the Supreme Court, will address a question all voters should take a stand on. Are your rights to free speech the same as the rights of corporations or organizations? Corporations and organizations are not individuals, they do not have the inherent rights of the people, nor do they have the same privileges. They are vehicles created and used by society for diverse purposes. Voters should seek to minimize their further influence on the political process and on the political landscape.

You will hear and read arguments whining that the government is treating organizations big and small, unfairly by prohibiting election advocacy, and is in effect imposing censorship. Some suggest that such treatment of organizations provides them less protection in the eyes of the law than is provided to individuals. The suggestion that organizations should be equal to individuals under the law twists the interpretation of the Constitution beyond common sense, and ignores the fact that current laws provide organizations with rights and privileges not available to individuals. Let’s not let anyone convince us that organizations are “persons.”

You will also hear that the media companies have no restrictions on their election leanings, or that restrictions do not apply to them and should therefore equally not apply to other corporate entities. While it is true that media companies have been given a pass on their ability to “manipulate” opinion, this is not a persuasive argument for overturning laws that in themselves do not go far enough in the restrictions of campaign finance.

The First Amendment of the Constitution explicitly prohibits Congress from infringing on the individual’s freedom of speech (other than inciting government overthrow), and as we long ago learned, free speech is a great freedom, but is not so “free.” While you may be able to shout your ideas, demands or wishes freely out your window to the extremes your lungs will allow without bursting, you will not achieve the reach that well financed organizations are able to affect as they shout at you through your invasive televisions.

This court decision revolves around financing free speech, but at its heart is the impact the decision will have on ability of organizations to influence voter perception. Organizations large and small already have too much influence on the electoral process. Corporations and labor organizations already impact election outcomes through such vehicles as Political Action Committees (PACs), or through the doors of political party organizations. We should note that the billion dollar campaign which carried Barack Obama into the Oval Office could not be audited by the Federal Election Commission (FEC) because the task was too onerous. Do not believe the pretense that the FEC is a watchdog, or does its job of monitoring campaign contributions, much less where and how the money is spent.

Allowing entities to finance the formation of perceptions, places a vast amount of power in the few hands at the helms of those entities, far overreaching the capacities of their “rank and file.” Politics have always been and will always be subject to self-serving influences. As wealth concentration continues unabated, effective control of the political process has already been skewed away from the average taxpayer. Simply put, the CEO of Goldman Sachs reaching into the company coffers has access to more money than you do to impact the outcome of an electoral campaign, and it’s not even his money. Neither shareholders, nor his employees, have any say on the candidate receiving the CEO’s largesse.

Some alternative legislation should be considered, including anonymity of donations, capping personal contributions and matching them with government funds, as well as eliminating all corporate and union political contributions and related loopholes. Beyond cleaning up the abuse of the process, this would bring campaign funding and spending within realms that might foster the advance of alternative parties to the political game on the national stage.

Should the Supreme Court overturn years of tested law in favor of corporate and union spending, it will relegate the taxpaying voter to that of second-class citizen, and insinuate a gigantic crack into the democratic process. No matter what the Supreme Court decides, the voter should take a stand at the poles with facts rather than with the prejudice of well-financed and influential rhetoric and advertisements.

High definition cameras bringing the drama into public consciousness should invade this upcoming Supreme Court hearing, and educate voters on the fundamental process none can take for granted. A Democracy is a very fragile environment demanding fastidious nurturing. “We the people,” was never intended to mean, “We the corporations and unions.”

• America, End Your Fear Of Wall Street

2009-08-20T01:07:00.012-04:00

Few Americans have the time to educate themselves on the operations of those who control the most critical elements at the heart of the Nation’s well being. The Kings of Wall Street have long coveted the absolute supremacy they now enjoy over the largest economy in the world. Their road to ascendancy has been long and methodical, but with the collapse of the mortgage and equity bubbles, the past year’s actions by those pillars of persuasive absolutism on Wall Street confirm that their dominance is unprecedented in American history.

A vast majority of Americans must have been astounded by Bernanke’s recent response to Congress’s request that the Government Accountability Office (GAO) audit the Federal Reserve’s financial transactions and assets. The following was the heart of Bernanke’s response, “… auditing ... would be highly destructive to the stability of the financial system, the dollar and our national economic situation.” The GAO is a legislative branch agency organized under the U.S. Congress. How is it possible that Bernanke would have had the guts to tell Congress to go fly a kite? This is the same Federal Reserve whose power Obama wants to expand? Does he really have a good grasp of the true nature of Wall Street and the functions of its insiders? Perhaps the $14 million he received from Wall Street bankers, investment firms and securities brokers during the election campaign are clouding his perception.

Bernanke not only screamed an emphatic, "no," but he had the gall to threaten Congress and the American people with economic destruction. How is such arrogance and power remotely possible? While it might be tolerated if coming from the oval office, it should not be tolerated from a banker. It is also, for anyone who is watching, an obnoxious affront to the Constitution as articulated in Article I, Section 8, “The Congress shall have power to … coin money, regulate the value thereof, and of foreign coin, and … to borrow money on the credit of the United States.” Does this resemble anything we have witnessed during the past year? Not remotely.

Through a century of market ups and downs, interest rate fluctuations, mergers, acquisitions, political influence, lobbying and positioning insiders to the most powerful government and government related institutions, the Kings of Wall Street have nurtured and advanced their isolated power to a point where they are responsible to no one. After the Fed created hundreds of billions in bailout dollars to purchase unaudited toxic waste from its “friends,” these same friends paid themselves billions of dollars in bonuses. These were billions more than the amounts they distributed to their own shareholders, and the rationalizations were as asinine as the bonuses. Obama’s wishful thinking and promises of “oversight and transparency,” over trillions of Fed dispensations, have long been attenuated by the dissonance of fear. Stating that the Fed and Wall Street’s autonomy is complete, would be a gross understatement.

When Bernanke told Congress and the world that if AIG was not bailed out, the international economic order would come tumbling down, did the majority of his listeners believe him? Absolutely. Panic was being incessantly pounded into the public’s consciousness. Unless a handful of senior players from the banking sector didn’t get their way, the underpinnings of the global economy would disintegrate, and the world as we knew it would come to an immediate halt. Paulson chanted the refrain, and shortly thereafter so did Geithner, whose performance made sure that the message was delivered with the requisite amount of perspiration and earnestness accentuating the urgency. Above all, he underscored the fear.

Individuals, who could not care less about the health of America, just as they never cared about their firms’ clients, control the economic engines of this country. Their egos dictate their actions, and satisfaction of abnormal greed is the compelling priority. The details of the business, and its legalities, … be damned. Have we forgotten that when Lehman Brothers collapsed overnight, no one knew there had been a problem? None of its executives were familiar with the extent of the calamity when it hit their firm, nor did their books indicate where assets might be hiding or what claims might exist against them. Transparency? Due diligence? Forget being a shareholder looking for information since the senior executives, the CEO and the Board of Directors were oblivious. Was there any conscious human being near the top of the Lehman ladder who cared enough to raise doubts? Would he or she have been listened to? Not likely.

When you are too preoccupied picking out the leather for your new executive jet, or refurnishing your third mansion in Cap D’Antibe, you don’t have time to spend on corporate incidentals such as the details of an audited financial statement. Even if there had been a spare moment, you’d have to fly to that Bridge tournament in Chicago, … or some other urgent pastime where your “friends,” or your ego expect an appearance.

There is a culture of omnipotence that has been very pervasive throughout all of Wall Street’s major firms during the past two decades. It has reached a level of absolute and supreme potency within a few of its more majestic mindsets like those at the top of firms such as Goldman and Morgan. These firms have by design created complex webs of interwoven corporate entities, crossing geopolitical borders with questionable practices beyond the boundaries of laws and oversight. Theirs has been a comfortable ride, since there is no will on the part of any government to provide intrusive oversight to the investment banking giants, therefore effective oversight is simply an ephemeral, wishful thought on the part of a cornered public.

The Morgan Stanley acquisition of Bear Stearns with a $30 billion taxpayer guarantee was a sweet gift handled between the boys, with little evidence of hard-nosed negotiating on behalf of American taxpayers. Obviously, reasonableness also never entered the room. Bailouts for Citigroup, AIG, Bank of America, Citigroup, and AIG were negotiated between friends, some friends only pretended to be working on behalf of the American taxpayers. When Treasury, The Fed and the heads of the major Wall Street firms, particularly Goldman Sachs and Morgan Stanley, came together to make deals, their actions were not “negotiations” as defined in any normal dictionary. Who really represented taxpayer interests? No one. The Third Side, the taxpayer who will foot the major risk, was not in the room. Not only were taxpayers not in the room, but they were also swindled. There is no other way to describe the one sidedness of the structures that taxpayers were handed.

Taxpayers recapitalized banks under insanely bad terms and conditions, where they unwittingly guaranteed toxic asset, as occurred in the Citigroup bailout or when B. of A. acquired Merrill Lynch. Did anyone question B. of A.’s use of TARP funds to “acquire,” competitors? No-one representing taxpayer interests seemed to care, and quite to the contrary, Merrill’s losses were purposefully concealed from both investors and regulators. Did anyone negotiate hard with these banks, B. of A., Goldman and Citi, when as creditors to Chrysler, they forced its destruction instead of allowing the government to provide it with deals as sweet as the ones they had received themselves? Not much. Geithner and Bernanke were evidently not close friends of any Chrysler executives or employees residing in Detroit. They were, however, friends and colleagues of Wall Street.

We have written elsewhere on this post about Too Big To Fail, however, with the taxpayer’s willingness (through inept government) the crisis has created ever-larger monsters on Wall Street. America’s vast banking system has become weak and remains weak other than for those at the top of its food chain. The controlling players have not changed, and the economic contraction will continue. We have become numbed to the fact that when banks fail, the public pays. A few companies, under the aegis of a small band of individuals created the perfect environment for the implosion of the banking system through massive risk taking. Congress cheered actively from the sidelines. The Wall Street hands that were in large part responsible for the crisis now dictate government actions, and have effective control over the public purse. In the meantime, the Fed, standing squarely on the backs of all taxpayers, is doing the job of large banks that still refrain from injecting credit into the economy.

While megabanks trade publicly, there is a dearth of verifiable, or incisively auditable value that can be placed on them since it appears none of their executives know the extent of the worthless paper lurking deep in their bowels, and none of them would tell you if he knew. Admitting the size of the toxic assets would require enormous write-downs, and would affect their bonuses as well as the values of the company shares.

We should not get swayed into believing that Too Big To Fail is simply a remote concept dealing with enormous corporations with global reach. Too Big To Fail refers to individuals at the top of these financial giants with all of the substantial power that the companies they manage can wield. Too Big To Fail encapsulates the stupidity that brought the world to the brink of collapse. We are just a couple of mergers away from a global financial power that will be impossible for any government to regulate, although regulation already seems nonexistent for any of the current top players on the Street.

The markets are technically driven and managed by systems that maximize profits for those who control them, using technologies that very creative talent produced. There is no ceiling to that creativity, and no end to what might be done to restructure the financial underpinnings and superstructure of the nation’s economy. The talent is available, and all that is required is willingness to do so. Constitutionally there are possibilities, but relinquishing control over money is not an alternative Wall Street will readily agree to, yet, reversing the process is within the purview of Congress.

The key to minimizing the future damage that the kings of Wall Street might further inflict on the Nation is to bring their power and influence into the realm of reasonableness. This means bringing their propensity for size to within reason for any organization involved in pure “banking,” and focusing their attention to providing large and small companies with the services, particularly credit, which they require to remain open for businesses.

There is a lesson to be learned from the current debacle, while the window remains very clear, and before time and retrospect blur the current reality into a distorted sequence of lies as the months advance. In order of priority, the following should be considered for a sound America going forward.

1. Take back control of The Fed. Humans will be human therefore there are no guarantees that the people’s representatives will act with foresight, however, they will accountably serve under the canopy of transparency, and due diligence, rather than submit to the beck-and-call of those whose billions in annual bonus money stagger the imagination.
2. Take back control of money.
3. Segregate “Banking,” from “Investment Banking,” and everything else that seems to attach itself to the once-upon-a-time credibility of banking. Reinstate the Glass-Steagall Act (except as it pertains to the Fed) that was for the most part repealed in 1999 eliminating the restrictions of affiliations between banks and “investment banks,” … and don’t listen to any bankers who tell you different with stories about diversification reducing risk, or banks being completely capable of regulating themselves. We have seen the evidence. One very intelligent provision contained in the act is section #32 that prohibits banks from having interlocking directors. Such decree could well be applied to other industries where “Board of Directors,” has simply become an incestuous and corrupt exercise.
In the same process, throw out that brilliant piece of Congressional ingenuity called the Gramm-Leach-Bliley Act.
4. Cap the size of banks so that their executives more naturally demonstrate concern for soundness of lending decisions, and the well being and success of their regional customers. Banking should be a service, and should not be a casino where the management can pilfer the till as has been repeatedly demonstrated wantonly by the major Wall Street firms.
5. Allow the FDIC to do its job, and instruct it to play serious hardball with the risk takers who come into its line of sight.

This is not minor tweaking of the system. This is also not a call for the establishment of a consumer protection agency to police all things financial from credit cards to mortgages. Common sense dictates implementation of a structural reconstruction. The proposed Consumer Financial Protection Agency would only be an ill-defined expansion of the government payroll, proliferating government reach into more corners of society. This make little sense since there are agencies already entrusted to protect consumers which are not doing their jobs. Proposing the launch of such an inappropriate meddling amoeba is evidence of government ignorance of the realities on Wall Street.

America, your government is lying to you. You’ve been had, and are being had. It has no idea what is going on with your money. Those few bureaucrats who have ensconced themselves in positions of unnatural power and influence, and who manage the joystick, won’t tell you the truth. Even more pathetic is the fact that neither Congress, nor the President, know enough about the mechanics of America’s economy to apply practical judgment decisions in the refashioning of the system, … nor, it seems, do they have the will to act. Considering the fact that the current administration continued the trend of installing those who had a healthy hand in packing the powder keg that ignited into the economic disaster now encumbering the nation, we cannot expect much change. The billions of dollars that politicians received from Wall Street over the past decade through campaign contributions and lobbying, was insurance on their continuing silence, and stifled any burgeoning ethics.

Taxpayers have become disillusioned by the abuse they have endured at the hands of special interests, and the lack of intelligent, common sense response from their elected officials. A broad swath of the electorate is wearied. Congress should pay attention to 2012, and the electorate should demonstrate a little selfishness. Taxpayers should look for some creative thinking instead of the tired old nursery rhymes dispensed from portable pulpits.

Banking is not a magical, abstract, or obscure foreign art, although some of the fringe elements have become complex by design, such as the proliferation of derivative financial instruments. Government is protecting special interests and is NOT forcing a restructuring of America’s financial system. Taxpayers should demand that capitalism be reinstated back into the banking system. They should demand that Wall Street’s power elite end its mortgaging of the American future. Taxpayers should ignore platitudes and bromides from Obama and Congress, and they demand a break-up of Wall Street’s major players.

Taxpayers should be lining up in the next elections to install individuals into Congress, no matter what party they might represent, who will take back control of the most important components of the economy, and ensure that the country has a chance at a sound future. The electorate should not allow the continuing concentration of financial power to accumulate in fewer and fewer irresponsible and egocentric hands.

Take control back from Wall Street, demand transparency, and quit bailing out firms that should be allowed to fail. Stop being mesmerized by the pretense and illusion that was perfected under Alan Greenspan. Take back control of the money supply before another crisis turns a struggling economy with escalating debt, into a long term depressed economy.

• Obama & Middle Class Income Tax Increases

2009-08-05T17:44:00.015-04:00

The recession is dealing a hard blow to government revenues with tax receipts expected to drop 18 percent this year. The big question being lathered across the Nation, but not being answered honorably by the Administration, revolves around tax increases. The double-speak and denials are only adding annoyance to the feelings surging around the stress already felt by the taxpayers. Not only will the “middle class” be saddled with fresh tax increases, but so will you and your neighbor if you live in America.

The strategy of repeatedly pretending that only the wealthy are going to pay for the massive spending increases is quickly getting old and not believable. From the mansions in Beverly Hills to the park benches of Central Park, all residents will be sending more dollars to the government in one way or another. This is not about new tobacco or alcohol consumptions taxes, or even about the massive tax-grab that will come from Cap And Trade, this is about new tax measures, and new taxes on everything that can be squeezed for cash starting with your income. Forget the campaign promises you almost believed about middle-class tax cuts, and forget Sunday meet-the-press equivocations by well-trained emissaries like Geithner and Summers. Your taxes are about to increase dramatically.

The Administration is very demonstrably building a government well beyond anything that national revenues will be able to support either in the mid-term, or the long-term. With the Nation stuck in a long-term economic quagmire hurting all taxpayers who are already feeling the weight of chronic tax-creeping, the imposition of obvious and visible new income taxes is politically dangerous. The sophistication of the speciousness will find new levels of creativity during the coming weeks.

The White House will no doubt launch a campaign to “talk-up” the economy in the hope that positive proclamations will make them so. Reality is that unemployment, well above the claimed 10%, is somewhere around 16% when you include “marginally attached workers” as well as those employed “part time for economic reasons,” calculated as the “U-6 rate” by the Bureau of Labor Statistics. Unemployment increasing is neither a turn around, nor a bottom to the recession, and is a far different reality from the “8% or less” predicted by the Administration when it launched its stimulus program. So much for rose-colored forecasting by economists.

Tax receipts are apparently down by 22 percent on individual incomes, and are down 57 percent on the corporate front. When you blend that with a deficit that will surge to almost $2 trillion this year, and a National debt accelerating past $11.6 trillion, your options are limited. We can assume that cutting federal spending is an ideological impossibility, leaving the government with two principal choices, and neither induces positive tingles up your spine. You can be asked to sacrifice and have your income taxes increased massively, or the dollar’s value can be allowed to drop significantly as more of them get printed. The likely path will be a less harmful blend of both of these alternatives. The key will be to allow the dollar’s value to slide gradually so that there are no sudden shocks striking at the heart of national and international markets. International creditors like China will be irritated, but will accede to the gradual process of easing down the dollar. Forget the doomsday scenarios, however, America will take years to work its way out of this recession, then pay off past and current government spending sprees, on its way to growing through the new financial demands on its treasury that will surface over the next decade from baby boomers, social security and healthcare.

In order to initiate an advance on the lengthy economic turnaround, the joy ride of debt-spending-with-wanton-abandon mindset enjoyed by Bush and continued by Obama must be brought to a close. Deficit growth cannot continue on a path exceeding the rate of economic growth. The Administration should surface out of its decision closet, and become resolutely emphatic on a course of action that will reverse the deficit's current trend. Obama’s next address to the Nation should be, “I know I promised that if you made under $250,000 per year, you would not see your taxes increased a single dime. Not your income tax. Not your payroll tax. Not your capital gains tax. No tax. I was wrong. I was hasty in forming that covenant with the electorate. We are a government living beyond its means, with currently no end in sight to the discrepancy. Here is my plan for an overhaul of the tax code, and what it will mean to every single one of you. You can expect your income taxes to increase an average of ten percent, for starters. Now, about a national sales tax, …”

• Government Capping Compensation?

2009-07-30T03:19:00.008-04:00

As you shelter yourself in a cool closet from the hailstorm of healthcare promotion, Congress and the President are sliding into home plate with compensation controls in the senior offices of financial firms, … for starters. The new Corporate and Financial Institution Compensation Fairness Act will provide no other than the SEC with the ability to establish the rules on how executives are paid, and will enable government agencies to effectively control the “inappropriate risks,” practices of financial companies. Institutions with less than $1 billion in assets will be exempt. This further intrusion into the fiber of corporate America by those who have completely failed in carrying out their responsibilities to the electorate is another misguided kneejerk reaction.

This bill will empower government bureaucrats to control compensation plans that will threaten the safety of financial institutions, or adversely impact economic conditions or financial stability. Have no fear, the newly hired experts will figure this part out, what it means and how to implement it, and they will diligently look after your interests.

There’s hope, however, with some minor good news in this bill that resides in its provision for procedures for shareholder approval of golden parachutes. What this portion of the bill looks like in final form will dictate whether or not it makes any sense, but in the meantime, three cheers for the crumbs thrown at demands for common sense. We shall not hold our collective breath. Another clause that might have provided teeth in a corporate structure fix was the providing of a voice to shareholders on executive pay. It failed miserably in its final form, since the shareholder vote on executive pay will be non-binding, therefore will leave shareholders where they were before, … “we’ll tease you with a little influence on the company you own, but, … naah, just kidding, get lost and go back to your trading screens.” Shareholders, large and small, should have greater influence on the proceedings of the public companies they own, and such influence should be addressed at the Board of Directors level. The government is not improving the lot of shareholders, but is escalating its own intrusion into the boardrooms of America.

We should remember that this is the same Administration and Congress that couldn’t even track the bailout money, or put strings on the money to restrict it from getting dished out in the form of bonuses. This is also the government that threw those billions at financial institutions on the pretext that they had to be bailed, to avert a depression, yet no one in government could tell you where that money actually went. So how was it, exactly, that those bailout billions were allocated? The toxic assets could not be defined or audited, which means that the fear mongering and threats were outright lies. Wall Street skunked this Administration, as well as the last one, and as a result a colossal extortion of the taxpayer was allowed. Did anyone making these horrendous decisions ask the hundreds of thousands of businesses from coast to coast what their banking preferences might be? … Would you rather deal with a gigantic-too-big-to-fail-market-dominant bank headquartered in New York, or a medium or smaller sized regional bank? When did “failure” get expunged from the dictionary of American Capitalism?

Government intervention has reduced competition in the banking sector, allowing the favored few bailout-receiver-therefore-government-backed behemoths to attract investor support, and has enabled their acquisitions of not so fortunate competitors.

All of this frenzied government activity pretends to be response to the outrage against some of the insanity exercised by some like AIG, Goldman Sachs, and Morgan Stanley. The $11 billion plus, awaiting the bonusable at Goldman should soon make for incendiary fireworks, and support the government cause. Using public anger as cover to implement invasive measures is rather expected from a government that has failed to acknowledge or accept any responsibility for the environment that incubated the bubble which burst into a recession. Giving more power to vehicles such as the SEC for example, reminds us of the abject incompetence the SEC demonstrated through the economic extravagance that allowed Wall Street the power and influence to exploit, and then erode, the financial health of the Nation. Did the SEC also not have a front row seat to Bernie Madoff’s implementation of an extensive 40 year long grotesque personal compensation program?

Sweeping expansion of government incompetence into corporations is an invasion that will not be reversed. Other more intelligent policies should be considered instead of launching clusters of bureaucrats to invade company offices in all corners of the country. One could consider implementing laws against monopolies, but it would be more effective to start with segregating the large banking institutions into more pure line of business sectors. It really comes down to reinstating certain portions of the Glass-Steagall Act that was repealed in 1999. Hundreds of millions were expended by the large banking institutions to achieve the repeal of the Act, therefore a reversal would be very difficult. Given the present climate of Washington dependence on Wall Street cash, even “difficult” might be a stretch, however, such reinstatement would bring back some peace of mind to taxpayers in the long-term.

The critical functions provided by undistorted banks operating within narrow guidelines should be reconsidered. The contamination of many banks over the past decade, with the annexation of such things as brokerages, and the underwriting or trading of complex securities, should be reversed. Government should direct existing oversight bodies to perform their duties, including the enforcement of laws dealing with asset requirements, capital ratio leveraging, and lending guidelines. Then, government might provide shareholders with more teeth to bite when necessary, and leave them to rule over freshly formed and more independent Boards of Directors.

• Government vs. American Capitalism

2009-07-25T22:32:00.026-04:00

For a generation, now, we have been accommodated with a front row seat to a rigorous and seemingly intractable advance of government into the whole of America’s social fabric, and into the institutions of its capitalist system. Today we are confronted with a wave of negative wind pushing against the capitalism that has brought America its unprecedented success, as it absorbs the blame for the economic meltdown.

I am not equating capitalism with free markets here as is too often done, because that would imply an inclusion of international communities into a common basket, and there has to be balance and common sense in the application of “free trade,” between participants as we have discussed in previous articles.

Recessions inevitably deliver capitalism a bad rap. Making matters worse, there are usually groups or individuals who have taken advantage of power and influence, or who hustle the provenance of panicked confusion into magnified opportunities for fortune creation. All the while, wide swaths of society are struggling to meet basic needs. Visible abuse of the system that leads to wealth concentration provides thresholds over which those so inclined will leap to promote expansion of government and its insinuation into the corporate fiber of the Nation. Such intrusions usually come from those with little grasp of the elements at the heart of economic growth, human nature, creativity and the human spirit. On the other hand, extravagant, unrestrained, and unconscious excess fosters jealousy, and reaction. It can also propel overreaction, which in turn empowers those in government who seek increases in government intervention at all levels of commerce.

Such exercises in reactive belligerence pretending concern for the public “good,” are actually acts of self-interest intoxicated by ideology, or worse, driven by overwhelming ego. The reactive process ignores long term consequences of hysterically applied policies, and absolutely cannot effectively evaluate the secondary or tertiary repercussions.

We lament the often-declared unintended consequences of unctuously presented self-righteous actions such as the promotion of dubiously structured mortgages. It is reasonable to expect a chicken in every pot. It was, however, unreasonable to have politicized the American dream of home ownership into a structural expectation and promoted it as a fundamental right. Somehow, the “home” became the vessel that would bring forth the promise of collective prosperity. Both of the dominant American political assertions, Republican and Democrat, signed onto the program. Both sides of the political isle bent all rules of common sense to exert pressure in effort to curry favor with the electorate, and corporate benefactors, while satisfying expectations of lobbyists.

The department of Housing and Urban Development from the early ‘90s on, pushed minority applicant quotas on mortgage bankers, and set targets for the purchase of less than median mortgages by Fanny Mae and Freddie Mac (FM & FM). With the taxpayer on the hook for trillions in questionable debt, banks and bank executives were dancing in risk-free ballrooms up to the rafter in money. As the trillions accumulated, FM & FM, with the applause of Wall Street financial institutions such as Morgan and Goldman, “creatively-accounted” for the real value of the toxic assets that taxpayers would one day be required to cover. Oversight? Sure there was oversight – oversight that appropriate kickbacks made their way to all of the proper pockets. The Clinton Administration and Congress pushed banks to adhere to the Community Reinvestment Act (CRA) in order to be allowed to diversify. Again, where was the risk? Thank you FM & FM. No, make that, thank you taxpayers. Then along came George Bush with the American Dream Downpayment Initiative (ADDI) signed into law in December 2003 to increase home ownership rates with funds to be provided to first time buyers for down payments and closing costs.

Making matters more fragile, in came galloping the Morgan and Goldman types, smarter and more ruthless than the deplorable dunces at AIG who were easily perverted into insuring Collateralized Debt Obligations, and seducing banks to over-leverage, using complex instruments the bankers didn’t understand. The financial community availed itself self-servingly of the opportunity created by the government’s intervention. Morgan, Goldman and other investment banks made billions selling tainted goods to banks and to foreign governments. Lack of awareness and understanding by the general community encouraged a galvanization of international endorsements for what were worthless toxic assets from the outset. The long-term consequences of this extensive and forceful government intervention will have unintentionally synthesized some extremely substantive burdens on our grandchildren.

What old and repeated lesson has once more been reinforced from this generation-long exercise?

Government is using taxpayers’ money to build powerful infrastructures that will in effect work against them, and encroach on their freedoms. Uncontrolled government intervention and cronyism are destructive potencies that destroy the fundamental bulwarks of the capitalist system, and Washington has been practicing the schemes for too long. In so doing it has eroded the openness and efficiency of America‘s economic broad-wealth creating environment. I say broad because any government reinforcement of excessive concentration of wealth and power is not conducive to the long-term health of the broader society.

Entrepreneurial energies bloom most abundantly in small clusters. The more the better, but each succeeds best without encumbrance of committees, or group designed strategies. Government on the other hand is by its nature a giant mushrooming amoeba, incapable of creativity, requiring endless approvals, with all departments and agencies in a continuous phase of expansion, justified by egos requiring satisfaction and aggrandizing the turf. Government bureaucracy instills dependence upon itself whenever and wherever possible. History shouts that dependence on government becomes dangerously habitual, and leads to loss of liberty. That goes for individuals, as well as for businesses.

Stifling true entrepreneurial spirit will destroy that critical energy at the foundation of the American economy. It is this fundamentally critical energy that strives to anticipate needs or wants of the broader society, then creatively delivers solutions, and augments output. It strives to become educated in order to better understand whatever might advance its ascent along the risky path to success, and endeavors to minimize its assumptions. Above all it applies as much common sense as it can muster to minimize the chances of failure, and improve the odds of producing something greater than what began. As this energy succeeds, many prosper and benefit. Entrepreneurial independence operating within the boundaries of the Nation’s laws has for two centuries differentiated America from every other country on Earth.

It is understandable that not everyone can be an entrepreneur in the strictest sense, however, each can be entrepreneurial in personal practice and mindset, and each one of us can be thoughtful. At the very least, we can all void jealousies that might restrain that spirit in others, or attempt to obstruct their right to exercise positive natural tendencies and capacities. So doing might quell the demagoguery that is inflating the ascent against the private sector, productivity, and the creation of wealth.

We should not accept deceitful rationalizations artfully packaged through demagoguery and homiletics, or allow them to deliver prepackaged thinking on our behalf. We are presented with economic realities which demand reason, and summon our uncompromised reasoning. The economic challenges presented should apprehend the participation of the whole of population. Such participation is occasion for self-education at a very singular level to understand, as much as is possible, all of the causes that led to the events now chastising the country. The comprehension will guide the electorate toward a more judicious discernment, as it navigates through the political passage ahead. Assuming that others “on The Hill,” will have the answers, would be a gross abdication of rights and capabilities.

Capitalism provides the platform for the individual to push the boundaries of creativity and productivity in the creation of wealth. Government’s role is to protect the environment, through laws, and judicious oversight, within which capitalism is allowed to strive. Broad participation is required, without ambiguity, if there is to be sensible pushback on the advancing and infringing hoards from “The Hill.”

• Bernanke And The Super Fed Say It's Over

2009-07-21T18:09:00.025-04:00

The loud, national sigh we heard this week was America gratefully, but suspiciously, acknowledging Ben Bernanke’s claims that, well, it’s over. The Fed Chair is satisfied that the recession is in a turn around mode, or at least stabilizing. Covering his backdoor, he added that America can look forward to a sluggish recovery. Just in case anyone missed it, he added, with all the vigor and compassion of a snail, “Unemployment will stay high for some time. It’s not going to feel like a very strong economy.”

You cannot get more confident than that, can you? With that level of insight you can now go out and make major decisions for your own future, such as, whether or not to buy a house, upgrade your car, perhaps even fly to Europe on the wings of hope. No? This is the kind of foggy thinking and direction we have come to expect from the independent organization that controls America’s most important economic element – America’s money. Did he define an exit strategy for the money being fed into the system? Did he even describe where, or how, that money is doing anyone any good? Not so much.

Bernanke is the same expert who only last year told Congress wonderful fairytales about housing, the markets, and the economy just as the bubble was beginning its implosion. This is the also the Bernanke who, along with Geithner, in a desperate moment of panic made a deal with J.P. Morgan, taking on $30 billion of toxic derivatives from Bear Stearns. Even former Fed Chairman Paul Volcker thought the deal impelled the Fed to, “extend to the very edge of its lawful and implied powers.” What an incredible understatement. The agreement viewable here, was not a loan as claimed, but an outright purchase of an ephemeral mountain of garbage. It was in effect a gift. Did anyone in Congress jump on this breach of law? Of course not. No one would dare question The Fed. Did anyone explain why Lehman was sent over into the abyss, but not Bear? Don’t ask. You don’t want to know. You also won’t be told how it was possible that giant firms including A.I.G., were allowed to gamble with complex derivatives that their own executives didn’t understand. The crumbs leave a trail from Wall Street, all the way to Congress.

You will note that the first signature on the hastily created agreement (linked above) is Tim Geithner’s. You can judge for yourself with a little analysis of Tim’s “signature,” what help such a massive ego (IMHO), will bring to your neighborhood. While you’re at it, also check out Morgan CEO James Dimon’s scribble on the signature line. Let me know what you think he’s all about. Looking at that signature, I doubt anyone really knows, but in the meantime, understand that he has more influence on your life than most of your friends do. These are some of the egos that were so overwhelmed with arrogance, and so confident in self intelligence, that there was nothing that the economic super-bubble would throw at them which couldn’t be handled. As the world economy melted about their ankles, all they could do was panic, and in turn panic everyone around them.

Bernanke, Geithner and their buddies are effectively in charge of taking good care of the largest members of the banking industry. This does not include your pocket book, or your wellbeing. Although Greenspan was vilified, and slapped into anonymity for having completely missed the housing bubble, Bernanke was right there with him promoting almost non-existent interest rates, downplaying obvious dangers of the bloated borrowing, and belittling concerns of inflation. The fact that no one in America was saving a dime since there was no Interest incentive to do so, didn’t seem to matter. In fact, it still does not seem to matter to Bernanke. How much are You getting on your savings account? How’s your borrowing capacity coming along? Getting any good business loans at cheap interest rates lately? Wall Street will make money if you spend, if you churn, but not so much if you build equity in those resources that matter most to You or if you invest in yourself.

When you listen to The Fed Chairman's claim that he can tighten monetary policy, and actuate programs such as selling securities from its portfolio to take cash out of the market, as needed to head off inflationary pressures, .... based on past record, you can now bet against him. Beyond applying common sense to his present prognostications, his track record suggests that he will not be able to reign-in inflationary pressures. You can assume that with the fast expanding money supply, inflation is returning for a visit that may be reminiscent of the late ‘70s. The amounts flying into the system are enormous, and making the assumption that The Fed will be able to “repurchase,” or appreciably retract the process, is to assume the improbable will occur. When Bernanke says things like, “I don’t regret anything we’ve done,” heed the arrogance in the context of the domain which is his sovereignty. Most importantly take everything else he says with a grain of salt, and let's remember that he’s referring to such things as taking taxpayer money/debt for the bailout of institutions that should have been left to flail in the currents of the options available to them in law.

Are we to believe anything Bernanke, or his pal Tim, tell us? Nothing he did or said in the past was either rational, intelligent, or truthful. Alright, so it’s easy to beat up on him. Oh, but wait, he’s still in charge of The Fed. Along with Geithner, he remains in complete control of all things monetary in America. Why? Because neither the President nor Congress have either the knowledge or the backbone to question The Fed and its friends on Wall Street. They certainly don’t have the intellectual or emotional capacity to implement any serious change at the top of the money food chain where it is most needed.

It is unclear what has misfired in the President’s acumen when we hear yesterday from Bernanke that Obama wants to give The Fed new supervisory powers to oversee the financial system. Isn’t that just what you wanted to hear? The same Fed and Bernanke who have been so intuitive, diligent and ingenious over the past decade will be given more power? They don’t report to anyone now, if they’re not in the mood, so how will more influence be of advantage to the overburdened taxpayers, exactly? How about calling for the observance and application of existing laws, or implementing current oversight capabilities before expanding and swelling expensive government bureaucracies? How about appealing to Washington politicians for some demonstration that they understand why taxpayers have elected them? How about demanding a little transparency? Apply the controls available, without inventing new ones, and refrain from creating a Nation dependent on its government (through politicized cronyism) for financial success. Prosperity has no address on that road.

• Goldman Sachs: Thank You Mr. President

2009-07-13T03:59:00.008-04:00

Dear Mr. President,

This should prove a challenging week on the PR front for us at Goldman Sachs. There are a few situations surfacing for which appropriate clarification will provide you sufficient context in the event that the inevitable questions arise. We also have a couple of suggestions.

Regarding this nastiness of the past week, please do not be too concerned about all this talk surrounding our super high-speed fully automated transaction processors. Also please understand that they are our future. Admittedly, we are enamored with the technological prowess we have acquired. Don’t believe those jealous rumors coming from begrudging low-level corners of the financial community, whining about our “edge.” We run a clean and very efficient business that can withstand any scrutiny. Our company represents about one quarter of all program trading on the NYSE. We realize you are not familiar with our business or what we do, but just know that the billions in valuations that represent our daily trades require extremely fast, exceptionally complex algorithms running on the largest, and fastest processors money can buy, with as close proximity to the NYSE as is physically possible. This is part of our multifaceted long-term strategic plan.

This business is not for the feint of heart. We take risks, but we are extremely adept at minimizing our exposure. That’s all. Don’t listen to noises suggesting that we make money on trades even when we buy and sell at the same price levels to ourselves. Everyone in the business is familiar with our fee structures. What’s a half penny a trade anyway? Nothing. There is no magic. As for front running orders with our faster than light system on stocks or options, well, that is just not the way we work, and it’s not even legal, is it? We’ll get back to you on that. In these difficult times people can become very excited, and reactive to unwarranted rumors. Pay no attention to hearsay coming from bottom feeders. … Front running indeed.

Thank the guys at Justice and the FBI for being so quick to respond, and picking up that frustrated dancer, Sergey Aleynikov. Stealing secret algorithms should be punishable by incarceration for life. Oh, could you check into what’s wrong with that judge who let him out on bail? Bail should be revoked. This is a matter of grave concern, and is of National import. As we said, someone could get a hold of this program and use it to manipulate the markets. OK, not “manipulate,” so much as harm the markets. We would never manipulate of course, but someone else certainly could. This is no superficial matter. This breach and the whole episode must be snuffed out before it develops any legs. This is no time to demonstrate any sign of weakness or lethargy in addressing such a heinous affront to the intellectual property at the deepest core of our business, and in some ways, the characterization of its essence.

You should see what we pay the guys like Sergey who develop and run our systems. It takes half a million a year to get them out of bed, but we tie them up for life with more legalese than they can understand. No matter what precautionary measures are implemented, there always has to be one that must feed a need we can’t fill and he becomes an abomination, turning to criminal activity.

On other matters, thank you for keeping those lovable and sleepy bureaucrats at the SEC off our backs. We also have to express our sincere gratitude for leaving the AIG dogs to die without clamor. Our involvement was very profitable, but if it had surfaced too visibly, the exposure would have been embarrassing. Our boy Tim is pretty slick isn’t he? He left all the folks in place at AIG who rode that trick pony over the abyss. Amazing talent. Keep him in the job for another year, or two, won’t you? Make sure the billions in bailout checks are cashed before sending him to Paris as ambassador. We need to make sure our friends on the Street are still standing. Competition is good for us, to a certain extent. The smaller fish keep prying eyes busy.

On a sadder note, we feel really bad for the Iceland economic implosion, but hey, we didn’t force them to buy our derivative packages. We sell what we can to make money. They had cash that needed to find a home, and we obliged.

We should point out that operating speculative derivative or futures markets outside the bounds of national or international oversight is fundamentally critical and necessary given the world we now live in. How else could we possibly continue to take advantage of events and situations around the globe unfolding at lightning speed and impacting the fluctuations in such things as commodities or financial instruments. You can get more background on this from Tim, but being nimble in a rapidly changing environment is critical to success. Nothing moves faster than money flowing over electronic waves. Agility is part of our very survival.

Naming our colleague Philip Murphy to an ambassadorship in Germany is a nice touch, which should provide our firm with a very friendly ear on governance in the EU at a time when these countries are fighting over each other’s relative “tax advantages.” What a bunch. They’re killing capitalism with their policies. You can’t find a real capitalist over there anymore. Everyone is an employee, from the Chairman to the clerk, no one is an owner, and everybody waits for a paycheck and the year-end bonus. What’s this world coming to?

Speaking of bonuses, you will be hearing some announcements about our historically large earnings for fiscal 2009, which means it is once again bonus time. The numbers might sound really big, really, really big, but keep in mind that we have top-notch employees we aim to retain in branches spread around the world. If we didn’t provide them ample compensation, they would leave for greener pastures. Do you recall when we told you that about the AIG bonuses, and after a few days you succumbed to pressure, making some angry statements about … well you remember, let’s not have a repeat of that sordid week, shall we. We’re putting aside billions to cover all benefits and compensation, so we are good to go. We are simply in great shape. You should be pleased that at least one company in this country really has its act together. This will in turn enable us to be of help to others as we all weather the economic storm together. Do us all a favor and ignore the squawking.

We might point out that California needs a visit. They’re cracking at the seams in Sacramento. Tell Arnold we said hello, and we’ll see what we can do to help out in a few weeks when we get around to it. He’s not hurting badly enough yet. We’ll wait till they repossess his state issued limousine, at which point we’ll have a chat. Don’t you find his IOU business hilarious? Those Californians are just a little too arrogant, thinking all trends start in the West, and all innovation starts there. We like your attitude, or is it Timmy’s, on holding off and making them sweat before sending in the bailout team. What a day that will be. Bailing out a bankrupt State with bailout money created by debt financing.

Please continue to demonstrate insouciance toward rising unemployment which we believe is heading to 11%. Such distractions can be disquieting and being President requires a clear mind, … so many decisions, so much to learn, so many speeches to give, so many trips to take.

One final note to buttress against the reactionary comments from some invidious corners attacking us with “too big to fail,” accusations. Don’t listen to this jealous and frivolous drivel. We are a proud organization seeped in history and what is good for Goldman Sachs is good for America.

Mr. President, please just let the boys take care of that money supply expansion machine, and we will do our very best to manage its trade, efficiently and diligently. We will also endeavor to do our best to always find a home for your debt.

We know you are grateful for our past contributions, and likewise, we thank you for your continuing support in these emotional and turbulent moments.

Sincerely.
Your Friends at G.S.

• Obama’s Russian Misadventure

2009-07-11T03:17:00.021-04:00

The recent representation of America at the Moscow summit delivered a mutually agreed-to target for the removal of some nuclear warheads and launchers. Almost. The relationship was neither improved nor set back, and America achieved little beyond being dealt a little embarrassment at the hands of Putin. The mainstream media (MSM) is applauding the event as a job well done. What meeting could it possibly be writing about with such approval and commendation?

Getting rid of antiquated and cumbersome warheads, 2,200 down to 1,500 or so, and trimming delivery rockets from 1,600 to around 1,000, is a good thing, if it ever happens, but such reduction would have absolutely no impact on either nation’s present realities. Elimination of a few war heads, or WVMDs, (weapons of very massive destruction), leaves entrenched and siloed enough destructive power to annihilate everything living on the face of the Earth a few times over. We shall hear over the coming months whether the Administration’s claims of these reductions ever actually come to pass. The odds are not terribly favorable to the President’s claims. Any part-time student of international affairs knows that Putin will not allow any such compliance under his watch, if the U.S. proceeds with its defense shield deployment in Poland and Czech.

Did America advance ground on obtaining any cooperation whatsoever on its objective of reigning-in Iran? Not a nod. Putin is very comfortable with selling Iran anything nuclear that it wishes to put its hands on. He has to sell Iranians something, anything, since they won’t buy his cars. Iran strategically presents the most critical foreign relations pillar to potential peace in the Middle East, and for now it remains an ace in Putin’s hand.

Countries expected by Putin of remaining within the “Russian sphere of influence,” such as Ukraine and Georgia, are making efforts to slip away from the bear’s grasp through entry into NATO. While the U.S. supports their inclusion, this stance is considered a direct threat to Russian hegemony in the region, further aggravated by the U.S. ballistic missile defense system intentions. Putin is not buying the sales pitch that this deployment is intended as a deterrent against Iran, no matter how the U.S. presents it. Putin just can’t take a joke. Of course it’s intended to protect against Russian aggression, however, in reality, well, it would augment the threat looming over Moscow, … just in case.

When Obama said to a business audience in Moscow, “Along the way, you gave us a pretty good deal on Alaska. Thank you,” was this intended to liven the discussion? Was it delivered to remind them Czar Alexander II, who received less than a penny per acre in gold for it, had shafted them? ... Under 21st Century Russian perception it is worse than a really bad deal. Is this a novel method of referencing a long history of trade? Russians never quite swallowed that pill, and Obama might have thought twice, or thrice, before raising this caustic historical Russian forget-me-not on Russian soil. Given Alaska’s current importance as a source of natural resources, it should have been evident that such recollection would rub some salt on an old wound. It should also have been obvious that it would be received as a backhand smack at Putin’s urgent quest for new productive oil and gas fields in Siberia, and more recently in contested areas of the Arctic. It would serve little here to imagine in much detail how the MSM might have treated Bush, had he made such a gaffe. Obama should understand that he is addressing a humiliated empire, desperate for a return to former glory.

Some of Putin’s highest priorities are oil and gas, their control, and their prices. He will support any measures that can sustain oil prices above $65 per barrel so that he can continue to fund his expensive power base. America's wishes are for something less than $40 per barrel, rendering Putin's ears deaf to any such discussion on this topic. Putin also needs to be seen as the nation’s strongman, and has been almost Hollywoodian in the shaping of that image. He must be seen as the defender of the motherland, and he enjoys approval by a comfortable majority of his countrymen. While Obama’s insecurity surfaces as arrogance, IMHO, Putin’s insecurity effuses as “My ego will take no prisoners, and my superiority doesn’t care what you think.” Any slights to his ego can only result in automatic and deep setbacks to pretense of cozy relations even though there is a long laundry list of expectations by each side.

The MSM has applauded Obama’s appeal to Russia’s youth that they should ignore past agenda (Putin), and take responsibility for a new 21st century agenda. Such communing with young Russians should help negotiations along astonishingly well with the country’s boss. Still, the MSM considers this strangeness, “a solid foundation,” for the future of the relationship. There is always something to be said for looking at a glass as being half full. There is also something to be said for realistic assessment, which provides a viable platform for effective strategic thinking. This U.S. representation in Moscow, IMHO, established absolutely no inroads that might provide launching pads for addressing the serious confrontational bargaining sessions that Putin’s long-established, aggressive and firm belligerence might budge for.

Obama apologists have excused him with commentary that he was simply stating historical fact. Such perception is baffling. Putin has been around a while, perhaps when visiting him, Obama should have taken more care to recall that his title is that of Prime Minister. No one in Russia does anything of import that his iron fist does not pre-approve. This too is historical fact, but perhaps Obama was tired, and when he mentioned Stalin, well, Stalin is part of Russian history after all, is he not?

The Moscow trip was not a favorable photo-op as it turned out, with Putin doing his best to appear nonplussed, and the meetings seemed to have accomplished nothing of substance. What was the point? The warheads will likely stay where they are, the missile shield has a doubtful future, and Putin will continue feeding Iran’s dreams of nuclear power. Putin understands America’s overwhelming military power. He cannot replicate it, however, he will remain an irritant, unwilling to appear acquiescent to any demands from America and the West. We can be assured that any backwards move Putin might relent to, he will extract maximum price for.

• Don’t Believe The Pundits On This Being China’s Century

2009-07-07T02:10:00.025-04:00

While countries struggle, muddling their way through stimulus packages and bailouts, China is being touted as everything from, “the best current place to invest,” to being, “the engine that will pull the globe out of its recession.” These entreaties and prognostications are sprinkled with reminders of the power it wields over America, given the huge dollar reserves that it holds. If I may quote Tony Soprano, “forget about it.”

China has asked rather politely, that the U.S. maintain its creditworthiness. No kidding? That plea was less a wish that the U.S. not skip town on its debt (devalue the dollar dramatically), than it was a declaration of a deep desire for a return to excessive U.S. borrowing. When the U.S. borrowed, it bought. When it bought, China prospered. This is rather basic, however, what is not so evident, or obvious to many pundits and experts, it seems, is the fact that China became inebriated through the glory days of consumerism. China now suffers the consequences of its acquiescence to a surety that the intoxicating euphoria enjoyed around the globe for a generation, would never end.

China understood that to become America’s principal provider of goods, it had to manufacture less expensively than anyone else. China excelled at squeezing productivity out of its labor force. It rapidly implemented a sweeping expansion of the necessary infrastructure to manufacture products faster, better (sometimes), and cheaper (always). New plants sprouted at an unprecedented rate. China’s expansion of its machine was based on an enormous assumption - the rate of growth it was enjoying through exports would continue unabated. It is now shutting down plants faster than it opened them. The capacity that was preparing for demand twenty years out, is now shutting down, and the Chinese are not about to ramp up their own consumption to energize reopening of the plants. While China has become a major manufacturer, the majority of its manufacturing is for, and on behalf of foreigners, selling established brands. China’s authoritarian “system” has made the creation and recognition of its own brands, all but impossible.

American consumers are not returning to the binge behavior of the past twenty years, although their ambivalence on trade with Asia persists. As for China, it focused on creating trade surpluses, and it adroitly squeezed its workers, but it did not prepare them, or its industries for broad based consumption. It has not created a self-sustaining, stable economic environment. China will dip into its coffers to stimulate internal employment, spending on infrastructure, or investing in what it knows best - export industries. Endeavoring to attract foreign investments, China will claim improvements in efficiencies, forensics, accountability and accounting practices of its indigenous infrastructure. The claims are beyond its ability to deliver. Until such critical elements as property rights, or a welfare breadbasket are implemented through appropriate taxation, Chinese consumers will be more prone to save, as they must individually concern themselves with how to pay for tomorrow’s meals.

Any cash China spends outside will go to acquiring natural resource producers for pennies on the dollar in the present climate, and countries, including Canada will be happy to sell out. This will do absolutely nothing for the long-term health of the North American economy.

There are currently foreign reserves of around $7.5 trillion held around the world with particular concentration of dollars held in East Asia, where since the late 1990s there was perceived need to protect against currency speculations, and a tendency, no, make that urgency, to feed (finance) the American engine driving China’s growth. We should note that the size of China’s reserve accumulations have, in the past couple of years, attracted the very speculation they sought to themselves protect from, which has further accelerated the bloating imbalance. The size of China's dollar reserves forces a tentative, even precarious, equanimity between the U.S. and China, but it is a potent equilibrium nonetheless. It will be a long road traveled before China finds sustainable balance in savings, consumption, exports, and internally stimulated (broad based) investment. It will also be a long wait before we witness demonstrations of international responsibility emerging out of China. Until then, China will continue to flex its new-found influence to push for such things as an independent currency a few degrees removed from the dollar.

The world’s economic history has been fueled by leaps from one bubble to the next, but the current recession may have a long wait for the next bubble of consequence that will yank the world out of the doldrums. Whatever its form, it is not likely to come out of the less than transparent, state owned, and controlled economy of communist China. China has created a massive middle class in a single generation, but it has yet to empower it. China will not soon be supplanting Americans, or Europeans, in the mall line-ups yearning for China-made-American-invented-branded-and-engineered products. American consumers are unconsciously pushing back the clock on that empowerment of the Chinese middle class through their dramatic behavior modification of the past year. Like it or not, global economic stability will for the foreseeable future depend on the West, and very particularly on America.

• Dear Mr. President: Thanks Again For Cap And Trade

2009-07-01T13:28:00.015-04:00

To The Office Of The President Of The United States,

Dear Mr. Obama

We are the heads of a few of your largest constituents, including Dow, GE and DuPont. This letter represents our sentiments in wishing to express our gratitude for your and Ms. Pelosi’s efforts on our behalf. We thank you, our shareholders thank you, and certainly all of us look forward to contributing to your Presidential Library, once you leave office, if we did not sufficiently contribute already prior to the election.

We can appreciate that neither yourself nor your dear friends in Congress have had time to read the new Bill that opens: “A BILL - To create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy.” This Bill is very, very, very long and boring. It is also very complex. We conceived it and structured it in such way that the fewer the readers, the less editing would take place. We therefore anticipate that its passage will be swift. The sooner that train leaves the station, the more impossible its progress will be to reverse. It would also not be advantageous if the irrationality, and fear surrounding humanity’s hand in the process of global warming were to subside. Now, is an opportune time to strike.

Attaching the name “Cap and Trade” to this whole business has been a stroke of genius. No one really understands what it all means, and the media believes everything you tell them, so keep plugging it, and keep promoting the “reduction in CO2” stuff. That works really well in LA. Have you seen the air out there? Terrible. Terrible, or "turbull" as Charles Barkley would say. We are all thrilled that you have successfully reconstructed the original intent of CO2 reduction, into an energy consumption reduction program. We knew you could do it.

The impact on consumption reduction will, in our view, be minimal, and fortunately, that is not our objective. We wish you much luck in managing this monster, and in building an administration capable of verifying such things as the veracity of corporately claimed offsets. This Bill is so complex that it will provide endless possibilities for abuse and excesses, and we can smell the fraud stinking up the air already. As you know, a transparent system such as a simple graduated carbon tax, paralleled with targeted caps on emissions, would not have been as financially beneficial for us. Not even close.

We are well aware that most of our smaller brethren in the business will get put out to pasture as a result of their inability to move off-shore quickly enough, or by the fact that they will not be able to afford the carbon pollution permits. We, on the other hand, already have unregulated facilities around the world to which we can reallocate resources at a moment’s notice. Our competitors will also not have our advantage of receiving significant Cap and Trade credits based on our being able to provide all necessary products supporting this bill, from solar panels to wind mills in the sky. Our smaller competitors will also be unable to sustain the sheer costs of managing the government’s bureaucratic intrusion into their affairs, as it deploys armies of newly hired climate science experts to distribute and oversee capping and trading of carbon dioxide emissions.

We anticipate much higher costs in the manufacture of many alternate energy sources, such as solar energy absorption cells, and this will impact the expansion of solar cell farms, but well, we have no choice.

The Bill will be very effective in rendering the cost of any carbon-based energy unaffordable through overwhelming taxation. That should help you refill the government coffers somewhat, although the hole you are digging for American taxpayers is becoming rather considerable. Households across the country will bear the brunt of the costs, through higher product prices and a heavier tax burden, but most people seem very accepting of a “price” for reducing climate change. Even if most don’t believe that they impact climate, they still feel that the air needs cleaning. We are unsure, however, how taxpayers will feel about being mandated into financing the adoption of efficient technologies overseas. They will probably not be thrilled with paying to prevent the clear-cutting of the Amazon, for example, at a time when many households are barely paying their food bills. We, on the other hand, will not be affected, whatever reactions surface on that front, although a couple of us feel bad for our buddies running operations like aluminum, or steel mills. They are in for some tough times.

We note that some of our other friends on Wall Street are very preoccupied, as we write this letter, coming up with new and extremely creative financial tools which they expect to launch upon the Bill’s passing. Those boys have amazing ways of getting in on any game with the potential of throwing off billions in cash. They look forward to a whole new set of opportunities opening up for them, replacing the ones eclipsed by the recent devastating financial compression. Listening to some of them, one might conclude that they have been holding séances with Jeffrey Skilling of Enron fame.

We are anxious to be in receipt of our free Trade Allowances, but most of all, we are excited with the anticipation of enjoying astronomical growth for many years. In passing, we should thank you for having allowed, and fuelled with cash, firms like Goldman Sachs or Morgan Stanley to become even bigger, and more powerful than they were before the financial down-turn. This action set a tremendous precedent we look forward to duplicating in our industries. If you thought “too big to fail” applied to these giants before the crash, wait until you see how big a few of us get in the next five years.

We have one last request if we can be so bold. Could you repeat as often as possible to the Nation that this Bill will not cost over $3,000 per household each year, and that much like the national objective of being carbon neutral, so too the cost will be, … “neutral.” Explain to America that it is just a methodology for keeping track of excessive energy consumers, and polluters. Perfect, don’t you think? They’ll all buy it. The media will promote that theme for you.

We will continue to postulate assertively on the need for battling global warming, and look forward to your persistent oratory on getting this momentous Bill passed into law.

Sincerely.
Your Friendly Benefactors

• IKEA’s Complaint Of Russian Mob Rule

2009-06-25T20:39:00.010-04:00

“The withdrawal of such a large foreign investor from the Russian market may cause considerable damage to the image of the country.” This is an understatement published this week in Pravda, Putin’s personal PR machine, relating a major, and far-reaching decision by Ikea.

Ingvar Kamprad, Ikea’s founder, has revealed that his company had been swindled of $190 million by Russian authorities. Many businesses have pulled out of Russia in the past couple of years, but to have one of the wealthiest individuals in the world make such an emphatic declaration against a country, is a powerful signal that warns others who might venture into the corrupted climate ruled by Putin.

Ikea is one of the largest privately held companies in the world with approximately 300 stores across 40 countries, and it employs over 127,000 people. Its more than $31 billion in annual sales give Ikea a broad reach and clout, yet, it could not find the ceiling of the graft that was required to be paid as it attempted for almost 2 years to open its most recent store in Samara, Russia. Now that 130,000 meter facility will never open. A pioneer in the Russian market has slammed on the parking brake.

Kamprad’s very sarcastic characterization of Russia’s business landscape, “the unpredictable character of administrative procedures,” while almost humorous, is very telling. Businesses and investors know that doing business in Russia means you will very likely deal with either remnants of the KGB, or the mob. Dealing with the KGB provides more powerful and far-reaching influence than buying support from the mob. With the former KGB, you get protection from the highest levels of government.

For giant corporations such as Ikea, size means that the price extracted for doing business becomes an impossible number to cap. The money extraction process is insidious, and because the corporate coffers are enormous, the blood money has no ceiling. Kamprad has finally cried, “uncle.” More importantly, he has done so very publicly. Since 2009 he had made Ikea’s entry into Russia a very personal project. It is entirely possible that this declaration is a temporary stance by Ikea, intended to shake up Putin and his friends into putting a ceiling on the graft payments. Either way, there are no indications that the underlying corruption throughout the system has any hope of finding much-needed repair. Perception of Russia’s corruption levels, as published by Transparency International, equals that of Bangladesh, Kenya and Syria, so it cannot get much worse. Ikea found that, “blackmail, sabotage and pressure for bribes,” as well as disrespect for contracts, became too much.

These are economically difficult times for Russia, as with most other countries. Russia can ill afford declarations the likes of those made by Ikea and its boss. Such news, of course, means that for the foreseeable future, America will continue to be the safe haven for the world’s cash.

• Neda Agha-Soltan - Innocent Symbol Of Revolution

2009-06-24T20:26:00.013-04:00

Neda Agha-Soltan was a bystander in the dramatic conflict gripping her country. Today, following her slow death from a bullet in the chest, she is the icon of Iranian reaction to the violent suppression by an entrenched theocracy. Her name means “voice” or “message,” and she has become a dynamic symbol for Iranians seeking openness in government. She has also altered international reaction, even moving the White House off its mark.

The video of her last frightful two minutes was seen around the world within moments of her passing. The ubiquity of the Internet disseminating the powerful images of Neda’s final struggle, elicited additional and essential support almost instantly to the plight of her people.

This unwilling participant has inadvertently stimulated the energy of demonstrators, and has intoxicated events, rapidly evolving them into a full-blown revolution. The success of this revolt is in doubt over the short term, since the ayatollahs are willing and able to take any and all action to retain power. Ali Khamenei has not only gone well beyond the revolutionary Grand Ayatollah Komenei’s tenets, and moved himself toward self-deification, but he is determined to convert his theocracy into a family business, as he grooms and prepares his son to perpetuate his very own history making dynasty.

Neda has made an emotional connection with the world. She is being mythologised, partly because the large demonstrating crowds needed a focus, or rallying point, which opposition leader Mir Hussein Moussavi could not deliver. She has stimulated the popular will. Her biggest contribution may be the impact that she has had on Western leadership. Obama’s reticence on making any statement pertaining to the theocratic thugs he wanted to negotiate with, was broken by, “I strongly condemn these unjust actions.” While this may be typically indecisive, it is a statement that says, “I’m moving off the fence, because I now have no choice, and doing otherwise would show Americans that I lack resolve.” Although this comes well after denouncements of the violence by European leaders, American voices and feelings toward the violence on the streets of Iran have finally been heard officially.

The Iranian leadership cares little what Obama or any other leaders have to say. They are staying on course to retain power at all cost. Only force will alter their determination. At this point they may fear that the retaliation against them might be as extreme as the program of assassinations they very effectively implemented themselves in 1979 against the Shah and his regime.

Neda’s graphic entry into martyrdom will have put an end to the placating of ruling Iranian thugs by a European leadership which has enjoyed business as usual for a generation, sanctions or not. Westerners will no longer idly accept the mollifying that has populated the foreign policy agenda of both Europe and North America on Iran. The ayatollahs and mullahs are prepared to decimate their own population, and will kill many Iranians in the days ahead. We may find Khamenei verbally pretending to give voice to the opposition, however, the systematic aggression will continue, and dissenters will disappear.

Some write that there are divisions among the ruling elite that will grow deeper as the demonstrations and the killings continue. Reality suggests that all members of this despotic regime are complicit in the pilfering of the country’s treasury, and they will in the end go down together. There should also be little doubt of the extreme measures they are capable of perpetrating on other countries once they acquire nuclear potency.

Neda Agha-Soltan has become the perfect symbol for demonstrators who innocently sought a voice in their governance. Reaction to the squashing of that voice is energizing a revolution. The world now waits in anticipation for the day when Iran’s military declares itself “neutral,” and a new leader from within, or from exile, surfaces, marking a new era for Iran, and for the whole of the Middle East.

• A New Dawn For Iran?

2009-06-17T18:31:00.018-04:00

In the wake of demonstrations crowding hundreds of thousands onto the streets of Teheran, the world conjures up visions of the 1979 Islamic revolution. No such event is occurring today. The demonstrations are not revolutionary, but they will bring change.

If we were witnessing a revolution, the Iranian Supreme Leader Ayatollah Ali Khamenei, along with the rest of the vast network of mullahs, would order the army to wreak havoc on the demonstrating public. There is no overt demand for change in the theological administration of the country. There is, however, a relatively peaceful and powerful request for alternate voices in governance, and for a lifting of oppressive measures.

Mahmoud Ahmadinejad’s opponent Mir-Hossein Mousavi has indicated that he would seek to improve relations with the West and enhance the role of women, however, he should not be mistaken for a reformist. Had he been elected, change within Iran would have been minimal. Mousavi is a supporter of the ruling ayatollahs, and is unlikely to appear confrontational to the well entrenched rulers.

Many Iranians seek progress, but ayatollahs and religion will not easily surrender suzerainty over social, economic, and political life in Iran. Unless the violence on the streets escalates the demonstrations into visibly bloody confrontations that are filmed, and disseminated on YouTube, Khamenei will remain firmly in control for the foreseeable future. He will carefully manage Ahmadinejad’s newfound vigor following his landslide victory, and navigate around the Iranian President’s calls for cleaning up corruption among the powerful clerics.

Demonstrators, University Students in particular, are being threatened with the death penalty if they “incite unrest.” Reports indicate that demonstrators are being arrested by the Basij (the Revolutionary Guards), however, their ultimate physical abuse or dispositions will not find their way to our TV sets, or to our computer screens.

Even with the violence, there is a possibility that the marches will continue, and will have impact. The unusual size of the current demonstrations could coerce and change the inertia that has gripped Iranians wishing for an end to the economic and political abuse they are enduring. It may be that the growing crowds, comprised principally of young people, are the proverbial genie that cannot be repressed back into the bottle.

The vast diaspora of Iranians, who left Iran over the past two decades, provides a passionate international network supportive of the demonstrations favoring change. There are anywhere from 500,000 to 1,000,000 Iranians living in the United Sates and Canada, many in Southern California as well as in Toronto and Vancouver. If, in time, the genie succeeds in remaining free of the bottle, a great many of these expatriates would rapidly find their way back to their homeland, bringing their education, contacts, capabilities and money with them. Their return would stimulate an economic growth for Iran that would rapidly escalate the country’s standard of living.

Iran is rich in natural resources, and Iranians have long demonstrated a propensity for hard work and creativity, along with a willingness to “build,” when they are not suppressed by autocratic governments. The lifting of sanctions alone would provide Iran an immediate and discernable economic boost. The resulting socio-economic transformation within Iran would change the Middle East. Iran would become positively pivotal in the region.

The mullahs may have long feared that change would eventually come in reaction to their abuse of the population. Many have moved the proceeds of their pilfering offshore, “just in case.” Some have built themselves Los Angeles and West Vancouver mansions, in anticipation that the gun might eventually not suppress the crowds in Tehran.

The potential for change is directly conditional on the persistence and endurance of the youth filling the streets of Iran. It will be unstoppable if the demonstrations move to the poorer rural regions of the country. Although the nature of the change that crowds are clamoring for may not for now be as dramatic as the video scenes escaping the crackdown, their demands will persist. We can expect that the extent of that change will gradually expand to encompass the nature of Iranian governance. It is now only a matter of time. The growing crowds are shouting, and are being heard.

Note: Jun.19 update - Should the violence being perpetrated on the demonstrators continue or escalate, the ayatollahs and mullahs will have turned these demonstrations into a full-fledged revolution. Our best wishes go to the demonstrators who are defiant, and seek a reduction in their oppression.

• Does America Yearn For A Monarch?

2009-06-11T02:40:00.006-04:00

Life Magazine fabricated a mythical monarchy in the early sixties by applying polish and airbrushing to John and Jacky Kennedy, elevating them into a Camelot. America couldn’t get enough of the magazine, and rewarded its uncommon “access,” to the JFK White House with financial success. The corporate strategy very successfully built an unprecedented, but mutually beneficial, relationship.

This was not the first popularization of an American President, but it was the most successful anointing of an almost-monarch. We all admire true heroes, however, there are many who seem to require more than honored heroes. To satisfy that craving, we create stars and surround them with irrational adoration bordering on veneration. The mainstream media (MSM) plays a role in the process, and has much to gain from it just as Life Magazine solidified itself, and its profits with the creation of the American version Camelot.

Life Magazine presented a glossy veneer of a young President and his family, because it could, and because it would not have been as profitable to have done otherwise. The public reaction was extremely receptive, and the oversized periodical continued to publish its principal stars’ immaculate images.

America has long succumbed to Hollywood’s very adept star manufacturing machine. Studios and production companies very effectively and profitably practiced the art of star production, as well as veneer creation, for a century. Whether the individuals in question believe their own press, matters little to the studios and the machinery that creates them. They are ephemeral creations that have no truth other than that of existence in the percepts of adoring devotees. They scatter nonsense, and often lies, and all utterances are gratefully accepted. Stars step into the light, feigning timidity, as they engage in absorbing gushing adulation. The star making process has been perfected and whether young, old, intelligent, rich, poor, educated or not, it seems that everyone is susceptible to its affects.

In 2009, the MSM has been provided a new President, whose natural tendency is already a well-prepared gleaming image, requiring little visible airbrushing. Obama’s promotional machine has had the added and unabashed advantage of having its subject well versed and practiced in the art of sermon delivery. Obama placed himself on a pedestal, and the MSM has delivered applause and sometimes infatuation. The zeal of this infatuation has translated into an abandonment of any application of journalistic ethics or common sense. The obsession has been transferred onto the population eager to satisfy a yearning for a monarch. This is not to suggest that America wants a king, because it doesn’t, however, there is evidently a vast portion of society that yearns for a personality that it believes will transcend it to a place where Camelots exist. America doesn’t want to literally revisit the anachronism of royalty, yet the British monarchy is as popular in the U.S. as it is in Great Britain.

In Obama, America found a willing aspirant on whom it consigned the cloak and stature of monarch, the ultimate iteration of star. Modern versions of monarchs however, have no effective power, but they enjoy fulfillment of ceremonial roles. Obama accommodates that role rather effectively and continues his cultivation of the “I,” unabated. As President, he has avoided the thorny details of assiduous analysis on the most critical problems facing America, and has used sweeping, but banal statements of obvious principals, while his appointees actually implement policies and programs inconsistent with the claims of the message.

Obama has filled the ceremonial role of monarch with enchanting voyages across the country and around the world, although the country might wish for more representation of America’s interests, rather than promotion of its leader as internationalist. While the public and the MSM might treat a monarch with reverence, a President should be treated as a politician, and challenged as such.

As President, Obama has yet to demonstrate any proclivity for practical leadership of the free nation envisioned by the unpretentious framers of the Constitution. As he insinuates government into all social and economic fibers of the country, the American taxpayer’s expectations of Obama’s heralded change will rapidly evaporate, the “self-evident truths” will become redefined, and the reality of the costs will become the new, overwhelming burden.

Now that the Congressional Budget Office has notified them that federal spending in 2019 will represent at least 25% of the GDP, all taxpayers should decide that a monarch just will not be injected into their futures in any form, and that their President should be challenged. There are enough stars floating out of Hollywood to satisfy desires of royalty.

• Obama’s Not So Private Economic Conundrum

2009-05-30T04:02:00.027-04:00

Having effectively been elected by a population believing in his redistribution of wealth promises, Obama has leaped into the fray of a game in which he has no experience. He arrived with an ideology, and seems to have learned little about the recession facing the Nation. Still he charges ahead. Along with millions of fawning supporters, Wall Street is quietly cheering and encouraging the moves of a neophyte CEO. You would too, if you controlled the game.

Many pundits and most of the mainstream media have intellectualized a rationality for the President’s actions with an unconvincing, “he’s a smart guy, he knows what he’s doing” or the very successful assignation, “the mess is Bush’s fault.” Others who once supported him now have stepped back a little with an abundance of “time will tell, give him some time,” brace-yourself sentiments. The American voters re-elected Bush to a rare second term, so this blames the voters, but more critically it is a disingenuous condemnation.

The anti-capitalism wave that swept the nation and elected Obama was a reaction to the financial sector’s abuse of influence and power. Within the reach of a compliant and not so watchful Congress, some players took absurd risks across the banking spectrum, breaking all rules of reasonable lending practices and leveraging. As Obama continues the out of control bailout of the financial services industry program Bush started, the problem America has faced for the past decade and continues to be saddled with, is the dearth of knowledge on the part of its President pertaining to its most critical challenge.

Any CEO who is perplexed when facing a balance sheet is incapable of effectively managing a large corporation, particularly one passing through a very turbulent and economically treacherous period. In such times, having in place an independent and objective Board of Directors is imperative, even if the CEO is aware. In the President’s case, Congress is expected to act as a balanced and diligent chamber, not an anesthetized rubber-stamping convocation. Both Republican and Democrats in Congress can take blame for having succumbed to the seduction of money, which led them to ignore the bubbles (housing and financial) that have imploded with worldwide ramifications. Congressionally mandated liberal (read: Standardless) mortgage qualifications, coupled with Greenspan’s loose money policies were the fuel that energized the bubbles. Bush was not responsible for the financial meltdown, and neither is Obama, although both can be accused of complacency. However, …

When the markets caved, Bush was in over his head facing challenges he did not understand, and he handed the hot potato to Paulson. Apparently Bush believed that a fox is the only one who has experience with chickens, and is therefore their inevitable overseer. It was evident that Bush had already vacated the White House premises mentally, and was running south for cover, hoping Obama would take over the reigns even before his time. In came Obama, with no more intimate knowledge, perhaps less, of the economic landscape and Wall Street than his predecessor. What did he do? Installed Paulson’s buddy and protégé of sorts to continue the good work of bailing out the financial community. Unfortunately for the taxpayers, Obama will continue to do whatever he is told to do.

At least Bush didn’t pretend he knew what he was doing. Obama’s ego on the other hand refuses to allow for such leak of doubt even in his private moments with the mirror. He is confident, and believes that he is intelligent, but the arrogance is leading him, and the Nation, overzealously into trouble. Problem is, the nation will pay for his ego and his lack of analysis or interest in educating himself.

As I’ve suggested previously he should shut the door of the Oval Office for a month, stay off Air Force One, and get a concentrated dose of education on the biggest challenges. He won’t. If America’s financial house is in order, every other challenge facing the country will be more easily remedied. It deserves his attention and intimate understanding of subtleties. A few phone calls will roundup all the teaching talent he can use. The objective is not to transform him into an economist. That would be just as disastrous. The goal it to get the CEO to become aware of what he doesn’t know, and get a grasp on some right questions to ask those that he has delegated authority to.

The U.S. Treasury and The Fed deserve his attention though they don’t want it. Who wants meddling when you’ve got yourself a key to the vault? They are happy to work with someone who doesn’t know enough to probe effectively with relevant examinations. They have been content for over a generation with residents of the White House who did not know what they didn’t know. Their jobs were made so much easier. Clinton might be the only President in recent memory who might have come close to being analytical and inquisitive. Have we so soon forgotten Allan Greenspan’s endless tenure and obscure meanderings who propelled the money markets over the edge? Why has Geithner’s failed role at the New York Fed garnered him ultimate power in the new Administration? Simple. His boss doesn’t know any different.

The occasionally heard rationalization, “we need those who brought us this mess to help clean it up,” is actually touted as if it made sense. … Not to American taxpayers, it doesn’t. With the bobbing head of the President, those who manipulated the fashioning of the worldwide recession are now tapping into the taxpayer pockets with schemes that will eventually surface, but to no avail. There will be no repercussions because there is no elected official who knows enough to dig, or has competence enough to conduct even superfluous due diligence.

When, for example, will taxpayers ever be apprized of the realities that will have allowed banks to market packaged toxic assets to funds, with the taxpayers, through the deft fingers of Geithner, guaranteeing the losses? ... The funds being pools of capital formed in partnership with Treasury where the taxpayer is fifty percent partner. Yes, you, the taxpayer will be a 50/50 partner, and that’s not good news because you are also the backstop on any losses incurred. Losses will represent much of the packages because we’re talking about mortgage loans that have been under water for some time and worse, these wondrous financial baskets include miasmal securities that were created by the geniuses running these now thrashed financial institutions. The outside independent fund “partners” have you to thank for their lack of risk. Don’t hold your breath waiting for transparency from Geithner. Geithner’s buddies will continue to be bailed, make billions, replenish their coffers, and taxpayers won’t know the hows, whens or whats. Ever. If you think you have a few bucks to invest, and want to get in on this action, good luck.

The big lie was that such radical measures were necessary if big lenders were ever going to lend again. Think about the absurdity of that statement. Your corner lemonade stand entrepreneur knows better than that. Oh, and the other sensible reason was that these giants of the financial world required their lost capital replenished. So, in go the taxpayers, threatened and squeezed into recapitalizing incompetent banks by overpaying for assets, … well, not assets so much as worthless toxic waste.

Thousands of banks across the country with solid financial statements could easily have been provided government backing to loosen some cash for loans, with deals and conditions pre-negotiated, etc., etc., etc., we could go on and on. The Geithners around him, by the way, could care less what Obama does with headaches like GM, Chrysler etc., so he plays pretend capitalist flexing his newfound CEO muscles, guided by an irresistible ideological need to change the rules of capitalism, another game far beyond his capacities and experience. He now seems to be an expert in the desires of the American public, which is apparently clamoring for electric automobiles, but is evidently doing it very silently.

The Administration’s bungling of the GM restructuring completely extinguished any possibilities of renegotiating the repressive union contracts that weighed heavily in the collapse of the auto industry. Obama’s support of unions, and his indulgence of their quid pro quo expectations will have detrimental effect on the taxpayer investment in GM. Obama is adding a whole new level of risk to investments – political risk. With GM and Chrysler as examples of overzealous government intrusion, and being very indicative of the overall climate in Washington, unionized companies and those encumbered with legacy liabilities, can expect to encounter serious difficulties raising capital in the foreseeable future. Unions have an important role to play in the economy, however, overstepping bounds of reason is detrimental to the “host.” The free market system needs oversight, however, Obama is taking the concept of oversight a little too personally, and his insinuation of government into the free market system is exceeding all constitutional expectations.

Meanwhile middle America awaits a positive outcome from its new President’s policies. It holds fervent hope that things will work out, and his wealth redistribution will magically trickle down to better jobs and higher incomes.

The money game and Wall Street are influenced by major players who never write tell-all books. There is no conspiracy, but there IS a game. Even Geithners are pawns in the game, but they play just the same. The vast independent pools of capital circling the globe, are directed by astute, quiet, effective and ruthless administrators. If you influenced the management of $500 billion and more, would you leave the investments to the vagaries and whims of markets? Would you risk the capital? Absolutely not. You would influence, and manage as much of the game as possible to achieve your objectives. You would do what you have to do to preserve capital first, and maximize returns second, to whatever extent possible, as would any mid sized, or small fund, or even minor investor.

As for Bushes and Obamas? They don’t know there is a game. Ideology is blinding, and with arrogance stirred in, the clustered aggregate, marketed and sold with masterful dexterity, will be detrimental to a whole nation’s economic well-being.

• Obama’s Not So Free Money

2009-05-27T02:45:00.015-04:00

Government interference has simply never, repeat never, enhanced the efficiencies of markets. While Obama may claim to be a scholar of history, he appears not to heed what he has read, or simply does not believe it. Learning, real learning, is a long process of trial and error. History is full of trials and errors. Why is this not obvious to the current White House resident?

Attaching operational strings to government stimulus money is forcing many companies to take actions they would not otherwise implement. Along the longest and biggest by dollar volume trading border in the world, are endless American and Canadian communities, as well as companies that have co-existed successfully for generations through mutually beneficial trade. Obama’s exigent and rigid imposition of trade restrictions such as provisions requiring that only U.S. made steel, iron, and other manufactured products be purchased for state and local projects funded with stimulus funds, are twisting communities into stagnation and onto the unemployment lines. While in contravention to the free trade agreement between the two countries, such sweeping and misinformed restrictions have generated reaction from both Sellers and Buyers on either side of the 49th. parallel.

The impact on the U.S. side is that Americans are losing jobs. Canada continues to represent a sustaining market for many American companies manufacturing products used in the housing industry, for example, while the U.S. housing market has dried up for the foreseeable future. Why annoy your own marketplace, and propel it to react and to stop buying from you? “Buy American” makes sense where communities have decided where and on what such stance is of benefit. Enforcing such protectionist programs wholesale is being blind to realities and needs of business, trade, and life of communities where the rubber meets the proverbial road.

Government has no business dictating methods or practices to companies. Set laws for the land and punish those who break them, but don’t interfere with the functioning of such a critical element in the successful progress of a society. In particular, don’t interfere when you have no concept of what a business requires to effectively and profitably function. Allow companies to decide for themselves where to source products and services, particularly when such products are not available to them other than going North of the border. When businesses complain of the paperwork mountain required along with endless strings attached, someone should realize that the Obama free money has been rendered too onerous to be accepted.

If government is going to even establish suggested guidelines, first understand the nature of the beast. Canada, for example, is America’s biggest trading partner. Unlike almost every other nation the U.S. trades with, Canada’s standard of living, lifestyles and society in general are very similar to its own. England, Germany, and France don’t come close, and China isn’t remotely in the same ballpark.

Contrary to Obama’s representations to Unions, the reality is that Canada and the U.S. benefit from the NAFTA arrangement. Trade with China, on the other hand isn’t trade on equal footing, since China has imposed endless restrictions on imports. It is supremely idiotic to treat these different trading “partners,” with the same broad brush Obama style protectionism. While he pretends that he now does not wish to renegotiate NAFTA, his actions are not only confused, they are affirmatively ambiguous.

We can expect to find Obama once more make like Gretzky and implement a fast skate backwards down the ice on this front, much as we have seen him skate on almost everything else this administration has acted on. He forgot to do his homework and he will be forced to pull a reversal on the strings attached to the money, as will local and state governments involved in the cash distribution chain.

The financial services industry which came to represent an enormous percentage of the Nation’s total considered productivity output enchanted America into complacency and unreasonable personal debt. A self-serving Congress failed in its oversight of major financial service providers, and we are now enjoying the fruits of the deliberate bungling. America needs to return to creating, developing, building, and manufacturing, instead of being the world’s bean counter and dominant consumer.

Free enterprise did not bring us the current economic disaster, although free enterprise has become a favorite whipping post of many left leaning expectants of an uncurbed welfare state, and of the current administration. Businesses across Middle America should be allowed to function without government interference, and shouldn’t be made to feel that the new Administration has launched a war against them.

Dismembering the system that has produced the economic engine fueling America’s way of life will be detrimental to that standard of living. As he rushes headlong into an unfathomable indebting record $1.8 trillion deficit, Obama should stop long enough between Air Force One cross-Nation hops to listen a little more attentively to those businesses that are now saying, “No Thanks,” to the stimulus free money. He should pay special attention to the “why.” He should also establish for himself what might be defined as “free trade,” and what parameters such trade might entail before his next policy imposition.

• Detroit Icons - Ending More Than An Era

2009-05-21T19:52:00.013-04:00

2009 is a year that will long be remembered by all automobile enthusiasts as the year they killed the American car. After over eight long decades, GM announced the closing of the Pontiac brand. More than an automobile era is closing. For many of us, this is an acknowledgement and confirmation that the transformation in a segment of our social landscape is now permanent.

There were many other closings of venerable marques over the years, such as Plymouth, or more recently Oldsmobile, that hit us as “little deaths.” The current economic devastation spilling bloodshed throughout the auto industry, however, is overwhelming the Detroit based manufacturers. The impact is making some of the dissolution irreversible. The names we grew up with, names that were very much present in the consciousness of our society and had meaning through multiple elements of North American culture, will no longer be components of corporate America. The future of the Big Three is now in serious doubt.

Vehicles such as the 1958 Pontiac Bonneville, the 1956 Ford Crown Victoria, the 1959 Cadillac Eldorado, the 1956 DeSoto Adventurer, the 1955 Chrysler C300, and the 1958 Chevrolet Impala were not simply transportation. They were the artful and complex product of creative teams, led by visionary designers who delivered “glory days” for their employers.

Europeans produced engineering marvels, but Detroit pushed vehicles into the artistic realm. If, for example, you analyze the taillights on vehicles from the ‘50s and ‘60s, their designers made them an integral and unique element of the rear decks. For European manufacturers, on the other hand, taillights were an afterthought. For most of them, it almost appeared as if they had forgotten that taillights were even required and the taillights had been added as the cars rolled off the assembly lines. Not so for the symbols of American knowhow and creativity.

Even the interiors were uniquely stylized, one more exotic than the next. Most importantly, Middle America could afford them. New or used, for a couple of generations, they represented stages and punctuations in one’s life or career. They were icons with vastly differing characteristics and complexions. For millions of us they represented dreams and aspirations, … “one day I’m going to own an Olds 442.” That the day did not always come wasn’t important, but dreaming of that Z28 Camaro, GTO or Barracuda was an enjoyable part of life for young and old.

The emotional component that automobiles of that era provided has not been replicated, and as poor management and careless unions destroyed the fabric of Detroit’s ingenuity, we watched the epoch extinguish itself from within.

The Oldsmobile Toronado, launched in the mid ‘60s when GM held 60% of the U.S. auto market, was a landmark technological wonder. Under one of the longest hoods on the road, the car’s 455 cubic-inch (7.5L) displacement Rocket V8 engines could smoke the enormous front wheels hurling the 5,000lb. vehicle down a quarter mile in under 17 seconds. The ’68 rendition, with hidden headlights and a front end the length of a Concord, is one of the great but underappreciated American automobiles. It punctuated the end of the sixties, and the fading of an automotive era, whose ending after four decades of denial can finally be put to rest in 2009.

We can rest confident and grateful that the tireless efforts of curators, aficionados, enthusiasts as well as hobbyists will continue to resuscitate, restore and preserve the art that has been the American automobile. Dare we dream of a resurgence?

• Continental Flight 3407 – Casting Blame on Pilots?

2009-05-15T02:32:00.012-04:00

North American media has published the pictures of the cockpit crew at the controls of Continental Flight 3407 when it went down in New York on Feb. 12, killing 50 people. Most prominent in the coverage is the 24-year-old co-pilot and her $23 per hour salary, plus the fact that she supposedly had a second job working in a coffee shop. There you have it. Right there. That’s your guilty party.

The media coverage on the young lady, and the blame-throwing, is relentless, … too young, too underpaid, too inexperienced, too tired, living with her parents, and on top of all that, she flew to her co-piloting shift from Seattle in the cockpit of a red-eye flight, and then had the gall to rest or nap illegally in a crew lounge before taking another flight to Newark where she reported for duty. Why else would she not have noticed the alarm indicating a sudden drop in speed? Why else, other than from exhaustion or incompetence would the pilot, reacting too late to the stall with a pull instead of a push on the controls, have conflicted with the plane’s auto-correction system that was attempting to bring the nose down? Boy did they ever mess-up.

Oh, and wait, that’s not all. The pilot failed tests and lied on his application when he was hired by Colgan Air. He probably earned $55,000 per year like other Colgan Pilots. Well, that’s it then. That confirms it. The cockpit crew was to blame for the crash.

Or are they?

Let’s ignore that there was ice on the windshield and on the leading edge of the wings. It was winter, and planes fly in winter. All kinds of planes, including the Bombardier Dash 8 Q400 twin engine turboprop. The severe weather conditions mean that extra measures of caution and diligence are required on the part of all individuals with any responsibility for putting the plane into the air including ground crews, and control towers.

Regardless the weather or technical conditions, ultimate responsibility for who occupies the two seats at the front of the plane rests in the company executives who make the decisions on who fills them. Experience or lack thereof, talented or not, an employer decided that a 24 year old co-pilot and a 47 year of pilot, had enough experience and proficiency to safely transport a plane full of travelers to their destinations.

The media’s unsubtle accusations, as it trumpets a 24 years old, including her picture, who held down two jobs to pay the rent, and who was placed in a situation with which she and her partner in the cockpit were unfamiliar, is unconscionable. We are also understandably surprised that anyone flying a passenger plane would only be paid $23 per hour. Do we not all assume that pilots, particularly those responsible for passengers require wheel barrows to haul their cash home on payday?

The grieving families who lost loved ones on that flight deserve better reporting. Society in general deserves better analysis by the media of a service which has become critical to its daily functioning, but whose financial cutbacks have brought practices of some providers too close to the edge of unsafe, and whose regulators should revisit the application of their rules guiding safe aviation.

• Obama’s Squandering Of More Than Capital

2009-05-09T12:25:00.012-04:00

With a straight face, Obama has announced that just as Americans are tightening their belts, so too he is taking fiscal responsibility seriously. He magniloquently claims he has “charged” the OMB to go through the budget line by line taking action to save Americans tax dollars. He assures that he is taking “aggressive” action, and result? $17 billion in Savings “next year alone.” America is not laughing, and while the MSM is reporting this presentation with languidly deferential support, some of the reporting appears to be betraying some signs of embarrassment with the absurdity of its task.

How can the majority of the MSM not feel queasy when reporting on the Administration’s new aggressive savings claims? After emphatic campaign promises, and consistent affectations since the election that Obama would bring change to Washington’s addictions to spending, a $3.55 trillion dollar budget can only yield $17 billion in cuts?

Evidently the Administration believes that this one half of one percent scrubbing of the budget will be easily “bought” by the public if it is presented with “we can no longer afford to spend as if deficits do not matter and waste is not our problem.” At least that’s how it’s sold to the media since even the NYT and the Washington Post couldn’t find a term in their dictionaries to call this perversion of the truth for what it is, ... a lie.

The MSM must have accepted that Obama’s cutting of a $35 million long-range radio navigation system had taken superhuman effort, and been convinced by Obama's refrained, “we cannot accept business as usual.” Repeated often, with a frown, and earnest conviction, this affirmation apparently becomes convincing. Evidence that it works rests in the fact that a majority (though a shrinking one) of the nation is buying into the brilliant salesmanship committing taxpayers to almost $15 trillion in debt in four years.

Perception is everything, it seems, and the Obama White House has mastered the art of affecting consciousness. It can make absurd statements with seemingly no serious challenges from the Fourth Estate. The repercussions from this complete lack of fiscal acumen will bring an electorate far beyond the change it was seeking after eight years of Bush.

Bush believed it was his right as President to run helter-skelter and without discernment through the corridors of debt. He was clearly apathetic to the consequences. Obama, a little more than a hundred days in office, is making the object of his blame look like a miser.

Obama’s determination to grow government, plus the bailout / stimulus funds he is being manipulated into providing, will bring America’s national debt to a level approximately equal to the nation’s GDP. His supportive Congress will ensure that his programs win the day, however, the nation will become weary of the reality behind the presentation well before the First Term is over, and a popular President will have squandered an opportunity to bring positive change to Washington.

• Common Sense – Apple Will Not Twitter

2009-05-06T01:50:00.012-04:00

Twitter, barely three years old, is being touted as a takeover target by the rumor mill fuelled by every media outlet in North America. The unsubstantiated rumors claim that Apple is planning a $700 million cash buy-out for the still profitless social networking San Francisco company. If this were true, it would suggest that Apple’s senior management has suddenly become careless and dimwitted.

Apple controls a healthy war chest in the neighborhood of $30 billion including receivables, which means it can weather the current economic storm, and continue to invest in the development of new technologies. Having very successfully returned from the brink of disaster, Apple Computer built its cash hoard carefully and diligently. It is not about to blow a major hole in that bank account by acquiring a temporarily fad-sustained-platform that it has the technology and engineering depth to build for itself.

Twitter’s business model has not shown any possibility of sustaining itself over the long term. Publications with influence, such as Businessweek, are suggesting that such an acquisition would keep Twitter out of the hands of Google, Microsoft and Facebook. That’s good business? Isn’t it more likely that Apple would wish that a Google or other, blow a billion on a company with a questionable future? It is more likely that Apple does not care either way. Folding a young corporate infrastructure into a mature stable company is almost never a successful endeavor. It also strains the senior management of the acquisitor beyond its capacities as it bends to the newly transplanted egos intractably flexing their wills against new directives.

Apple’s iPhone/iPod applications will satisfy the needs of all Twitterers until their fleeting affections and mores decide that a new and more useful platform has arrested their insubstantial attention. The media will follow. The rumors that Google was a potential buyer of Twitter only a few weeks ago fizzled into the Silicon Valley ether. Google’s management, it seems, had some common sense.

Through the past decade, Apple has shown an unusually high degree of foresight and has been fastidious in controlling the quality of its offerings. While Apple has stubbornly held onto its own version of the NIH syndrome, it remains one of the most potent engineer magnets in America. Common sense will continue to prevail in Cupertino, and Twitter will continue to deplete the venture capital sustaining its current luster in the media glare, as momentary as it might be. Stories of an Apple acquisition should prove to be little more than wishful media musings about a current fad.

Going all the way back to ’81 when Apple established an alliance of sorts with Logo Computer Systems for the Logo programming language that solidified Apple’s position in the world of education, the hardware manufacturer has a history of establishing effective relationships to solidify its market presence. Spending $700 million on Twitter doesn’t fit that blueprint, and Wall Street very probably does not have the influence on Apple's Board that it did on eBay's when eBay acquired Skype for reasons that strained common sense. Even if Twitter continues its growth trend over the mid term, Apple should stay away.

• Dilettantes At The Chrysler Gate

2009-05-01T16:01:00.009-04:00

As Obama forces his personal views on the automotive landscape, his injection into the Chrysler debacle is evidence of the lengths he appears prepared to reach for morphing the Presidency into a willful bully-pulpit. Even the media is using words like “rogue group,” to describe the Chrysler creditors holding out for better treatment from the government.

Obama complained that the small “group of speculators,” rejected the government’s 33 cents on the dollar offer. Speculators? What a peculiar denigration of bankers who didn’t feed at the government bailout trough. This is a very serious misrepresentation of the reality surrounding the mess that has swirled around the government intervention into corporate America.

The “holdout group,” which included approximately 20 debt holders, claim they are being treated unfairly. No kidding. They have no seat at the negotiating table, and are required to be represented by recipients of taxpayer TARP money. Where is the common sense here? Why would the UAW and TARP fund receivers be more capable of representing the interests of the debt holders than they are themselves? These rogue investors, representing pension and retirement plans and school endowments, as well as teachers union, placed senior secured loans into the Chrysler coffers. Now Obama calls them “speculators,” as if the term is a dirty word that middle America and taxpayers should accept as such. Speculators are exactly what America’s business engines urgently need right now. Why disparage them?

This is simply misrepresentation and obfuscation floating from a White House seemingly unafraid of twisting perception of reality into support for a profoundly ideological agenda. The serious concern rests in the possibility that the government will corrupt the longstanding bankruptcy code that has stood the smooth functioning of the capitalist system very well. The bully pulpit in the hands of an effective salesman might well inflict permanent damage on the open and free corporate landscape which has fuelled America’s growth for over a century.

Those financial institutions who profited handsomely from taxpayer philanthropy which financed their bailout cash, distributed by the current and previous administrations, are understandably very solicitous of Obama’s demands. The White House accusing the holdouts of acting against the national interest, is injecting the government directly into the management and decision making process governing the funds. This is a pretense that the activity of bankruptcy is somehow unnatural and un-American.

Leaders of the rogue funds should continue to act and conduct themselves in line with what they believe are their fiduciary responsibilities on behalf of their investors, regardless what others in fear of the bully-pulpit might do to pacify the domineering harassment from the White House. The bankruptcy proceedings should be allowed to play themselves out legitimately under the rules and laws that have long proven effective and cleansing in corporate America, and the Administration novices should refrain from interference with management of corporate America and speculator fund management. America is a country of laws. Government should abide by them.

• A Nation Changing First 100 Days

2009-04-29T21:42:00.016-04:00

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.

• A Nuclear Weapons-Free World? Really?

2009-04-22T20:15:00.022-04:00

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.

• EBay, Skype, Goldman, Morals And Principles

2009-04-17T15:55:00.024-04:00

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.

• Politically Incorrect Reaction To Somali Pirates

2009-04-15T01:18:00.007-04:00

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.

• A Political Lesson From Italy’s Disastrous Quake

2009-04-07T21:21:00.009-04:00

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.

• War On Drugs – Time For A Change

2009-03-31T13:38:00.010-04:00

There are no viable, or wise reasons for drug use to remain on the illegal side of the national judicial ledger. Legalization of drugs, starting with marijuana, will be a major step toward society getting back in control of its streets, and its sanity.

The violent circus that is the Mexican drug industry currently arrests the attention of the mainstream media herd which is reacting with “deer-in-the-headlights” amazement. In its stupor, it fears taking a politically incorrect position on the nonsense making up the current laws surrounding drug use. The answer, if one believes the current Administration’s response, is to spend additional taxpayer money and provide other support to Mexico in order to strengthen its own drug war efforts.

Following recent news headlines, one might perceive “drug wars,” as being a Mexican problem that only requires some of our attention and reaction. Not so. Even Canadians are becoming numb to the accumulation of bodies dropping daily from bullets flying through the streets of once docile cities like Vancouver. Vancouver has of late established its presence at the top of an infamous list. It is now home to more violent gangs than any other city on the continent.

The billions of dollars to be made from the traffic and sale of illegal drugs are worth the risk to armies of well-armed criminals. Drug lords from Miami to Toronto have accumulated powerful armies, and vast assets, including legal businesses and expensive real estate. In many neighborhoods, some of the largest gated mansions belong to the kings of the drug business. On our neighborhood street corners, the pushers at the bottom of the drug distribution hierarchy are visible and obvious as they ply their nefarious and toxic trade. We are all being affected by the crimes their clients must commit to raise money for the next hit. Our homes or our neighbors’ homes are subject to “home invasion,” a new crime that has become so common, it has made its way into our daily vocabulary. Everyone you know has been affected negatively by the current and failed war on drugs.

Well beyond our shores, but affecting us very directly, is the wealth that our laws on drugs have provided groups like the Taliban. In Afghanistan the billions in revenue received from feeding the costly demand for its principal export, finance the daily attacks on our soldiers, fund expanding terrorist networks around the world, and finance the growth of Islamic Sharia law governance. Whole countries are now under the control of well-armed, well-connected international drug lords. Dictatorships in countries in West Africa, for example, find themselves particularly attractive to the cocaine supply chain. Their vulnerabilities succumb readily to drug sourced billions. Countries such as Guinea-Bissau have become narco-states, providing convenient launching points for South American cocaine shipment distribution into Europe where a kilo of cocaine sells for about $50,000. In Guinea, diplomatic pouches expedite drug shipments under comfort of Presidential protection. Drug money is establishing a new order in countries like Niger and Mauritania. Drug cartels have become powers unto themselves. North America is their preferred market.

It should now be evident to anyone not blinded by ideology, that the present twenty five year archaic policy on drugs is not only NOT working, it is stimulating and energizing the decay of our society. Our policies positively affect the street price of all drugs, and induce the pusher to action. Prohibition itself, while dissonant with the Constitution, has evolved into a multi-billion dollar industry as the never-ending war on drugs continues to fail, but its costs keep increasing. The impact of our policies on our own society is that we pay for the drug trade in lives, in international instabilities, in tax dollars, in personal loss, and in anxiety.

First on the agenda should be legalization of marijuana, reversing misguided laws that were supported by twisted racist social perceptions in Congress with funding from special interests. Allow individuals who decide they absolutely need it, to grow two plants for personal consumption for example. This action alone would vacate thousands of jail cells, but more importantly, it would remove justification for the pusher, and would end the massive inflow of cash into the hands of the drug hierarchy. Marijuana would have no street value.

Let’s take a page from the early ‘30s; defer to the reasons which led to the ratification of the Twenty-first Amendment, and the repeal of federal prohibitionary laws that unsuccessfully attempted to smother the consumption of alcohol. Ask Al Capone’s ghost how he felt about the repeal of prohibition. It would also be enlightening for anyone on either side of the argument to research the depraved process through which the government brought about the abolition of marijuana. Society has moved on from those very backward percepts, and very peculiar special interest groups.

Legalization of other drugs can be brought under the control of state governments in time, but the lessons learned from the legalization of marijuana and alcohol, will guide the unraveling of laws governing use of cocaine and heroin. Collection of taxes on sale of drugs will be just a beginning. The objective should be to minimize the value of street drugs. There will always be individuals among us seeking alternative levels of consciousness through substance abuse. Our objective as a society is to reduce the impact that these people’s self-abuse has on the rest of us. It is time for a paradigm shift in attitudes and a reversal of the failed Control Substance Act governing the war on drugs.

• China’s Weak Gambit On A Currency Shift

2009-03-25T22:23:00.032-04:00

China is calling for a move toward an obscure international currency known as SDRs (Special Drawing Rights) used by the IMF, to replace the U.S. dollar. The proposal on first blush suggests China is concerned with looming inflation in the U.S. and the devaluation of the debt it holds. While a reasonable concern, why would it push for such a dramatic shift?

The U.S. / China relationship is both complex and fragile. The American consumer has been the principal driving force that has fuelled the Chinese economy into becoming the world’s third largest. The result has been the creation of a communist controlled capitalist system very reliant on a democratic, open society on the other side of the Pacific.

The U.S. has long pressed for Beijing to allow its currency to float. All requests fell on deaf ears. Now with the world is in financial turmoil, and with the U.S. being blamed for mismanaging its own economy, there is some not so subtle muscle flexing being exerted by numerous countries, particularly China. Currency is a major element at the heart of any international debates. China’s suggestion that the world should begin moving away from the dollar changes the dialogue away from demands to see its own currency, the yuan, move higher which would reduce the competitive price edge of its products. Obviously this could in turn very negatively impact its exports. From the U.S. perspective, a rise in the yuan would aid in reducing its mounting deficit with China.

China purchased dollars and will probably purchase more of the Obama packaged U.S. debt. While it can clamor for a move away from the dollar, China has every incentive to see the dollar’s value remain strong, and will not sell its dollar reserves.

So what are we to make of China’s current grandstanding just before the upcoming G20 meeting in early April?

It is understandable that this populous country wants to increase its influence on the world’s financial affairs, and feels emboldened given its almost $1.5 trillion in U.S. securities, nevertheless, the world’s business is done, and continue to be done in U.S. dollars. China and Russia might wish otherwise, however trade is very dependent on the safety and security of the method of payment.

Although there have been abuses in America’s capitalist community, the vast majority of the country’s businesses are well managed organizations who present reliable balance sheets. The Euro has been touted as a potential alternative to the dollar, however the current economic state of countries like Germany, France, England, Italy and others, suggests that they are having difficulty putting their own and collective houses in order, affecting long term confidence on the common European currency. Some of the European member nations also present little reliability as worthy credit risks. For countries such as China and Russia, it would take two or three generations to establish confidence through the evolution of independent, authentic, trustworthy, and transparent organizations populating their economic landscapes.

The Knights Templar became extremely powerful in the middle ages because they could do what others, including whole countries, could not. Their influence was rooted in their reputation as a fighting force. They could guarantee letters of credit paying for goods moving across borders in a disorganized medieval world. America is not in a position to be losing it’s power and influence any time soon. Even as it goes through the process of recuperating from the abuse of its financial system, America remains the principal safe haven for the world’s cash, and the world's principal trading partner.

America holds two critical elements standing in the path of any change to the current status of the dollar; military power, and international confidence in its business sector. It is at this point inevitable that we will see a devaluation of the dollar as the U.S. government prints dollars on its way into unprecedented spending. This action will impact all of America’s creditors, however, it is difficult to envision an unseating of the dollar as the dominant reserve currency and the preferred currency of trade. It is also not likely that Americans will be unseated at the world's foremost consumers, and they buy in dollars.

No matter how much China beats the drums for change, SDRs will remain tools for the IMF to account for its aid to debtor countries, the IMF will not be creating a new super-reserve currency, and the dollar will maintain its position in trade.

• A.I.G. – A National Embarrassment

2009-03-17T11:00:00.002-04:00

America expected, or hoped for, a new administration that would set new standards in leadership, ethics, and diligence over the government of the country. Instead there is growing unease as the nation increasingly realizes that the lack of competence demonstrated by its new leadership regrettably appears to be simply more of the same.

As Obama jumps on the public’s reaction-to-A.I.G.-bonus-bandwagon with requisite teleprompter escorted acrimony, the reality of his administration’s failure to effectively manage taxpayer money is surfacing. What happened to promises of controls over executive pay for bailout recipients? Before signing the checks, shouldn’t agreements have been struck regarding the “use of funds?” This is basic sound business practice, so where is the common sense in the continuing delivery of money with no strings?

Even if, as A.I.G.’s chief executive Edward Liddy suggests, the company has no choice but to honor the bonus commitments made to its employees, it was the Administration’s responsibility to establish parameters for the application of the money. The problem here is not so much that a minor percentage is going to “bonus” money, but that the administration had no idea where the big money is really heading. This, after A.I.G. had already embarrassed its benefactors with a California resort conference, and an English country manor partridge hunt, following the initial protection from bankruptcy with US$85-billion in taxpayer money. Have we forgotten that Geithner was the brilliance behind that original A.I.G. bailout? Is this not evidence of his inability to conduct basic and sound business methodology?

If Geithner was aware that A.I.G. planned to pay bonuses ahead of time, which is apparently the case, why is Obama now seemingly indignant? Is this parade presenting an opportunity that looks too tantalizing to ignore? Perhaps Geithner should now remain well clear of buses.

Barney Frank, the Chairman of the House Financial Services Committee also jumped on the hysteria fuelled opportunity with, “These bonuses are going to people who screwed this thing up enormously, who made terrible decisions." Really? How does he know who they are? Liddy seems to have confidence in them, and he’s only being paid $1 per year to clean up the A.I.G. mess. It seems that Barney Frank’s failure in the whole A.I.G. disintegration is escaping both himself and the MSM.

There are many questions swirling around the A.I.G. fiasco that should be answered if any change is going to be brought to the banking community, including:

- Should Frank’s responsibility in the creation of this mess not be analyzed with more objectivity, and much more scrutiny?

- Is anyone asking how it was that Maurice R. "Hank" Greenberg, former A.I.G. Chairman and CEO, was able to transfer $2.2 billion worth of A.I.G. stock to his wife less than four years ago while this disaster was being cooked? What employee is worth that much over and above the millions he received in cash? Are any CEOs worth these tens or hundreds of millions?

- Where was Congressional oversight through the past fifteen years of abuse by the company’s executives? Should it not assign a special prosecutor? Shouldn't former employees like Joe Cassano and his dangerous actions be grilled and dissected so that the country can receive a better understanding of the process that produced the mess? Should there not be investigation into the hundreds of millions of dollars that Cassano and his colleagues took each year, draining the coffers that American taxpayers are now being forced to refill?

- Was the A.I.G. Board of Directors actually awake and functioning, and should it now be charged with fraud? Shouldn't all public company Boards of Directors not be restructured and made more accountable?

- Eliot Spitzer was on the hunt, prior to being felled, probing into questionable reinsurance transactions and improper accounting practices of the giant insurer. Spitzer filed a civil suit against the company and its top two executives charging fraud and misrepresentation of reserves, but eventually all investigations and charges were called off. Who really made the rain stop and why? Does Congress care? It didn’t appear to at the time the sheriff was called off the trail. Shouldn't the investigation be re-launched?

- Hank Greenberg and his lieutenants also settled a shareholder suit charging that he and three other executives used a brokerage named C.V.Starr which was under their control, and through which they siphoned commissions and fees from A.I.G., the very company they managed. Why is Congress not calling for an investigation? Taxpayers are heading for complete ownership of this company, they deserve answers?

- Last summer, A.I.G. CEO Martin J. Sullivan received a severance package valued at $47 million when he resigned following $20 billion in write downs. Why is no-one asking for that money back? Why did Congress not cry wolf?

- Is the credit default swap game played by A.I.G. too complicated for any investigation to unravel the decision making line of command? It shouldn’t be. The collateral and guarantees were provided to recipients that are on its books and all transactions can be, or should be, verified. The risks were taken, perhaps with abandon, but still someone made those decisions. Someone, actually many, should be brought to the fore and become accountable for the decisions. The A.I.G. Board and its senior staff at the time should be placed in the sights of a special prosecutor.

- Why is there no investigation of the supposedly venerable J.P. Morgan and its role in launching the A.I.G. explosion into writing insurance on packages of Collateralized Debt Obligations? It seduced A.I.G., a U.S. government backed fish, into the game, by conning its enthralled employees to bite on a risky business concept Morgan and other investment bankers like Goldman Sachs could sell to funds and banks around the world. Citigroup Inc. did Iceland taxpayers a particular favor when it suckered that country into bankruptcy by convincing it to purchase more than its share of these worthless derivatives.

A.I.G. has been used as a personal piggy bank by a long list of senior people, inside and outside the business, and yet here America sits, suffering from the denouement of this abused tragedy of a company. Worse, the taxpayer is having to incur massive debt for the failures of senior executives who are not being punished for crimes that obviously had to have been committed. This company’s central role in the financial meltdown that is affecting the whole world deserves more scrutiny than it is getting from either Congress or the White House. America and its taxpayers deserve better.

Obama’s constant blame of the Bush White House for having created the mess is becoming a tired refrain, and is a misdirection of the real responsibility. The implosion of the financial community was caused by actions stimulated by bi-partisan incompetence. Congress and the Obama Administration appear able to rapidly impose tremendous burdens on current and future taxpayers, but are completely incapable of bringing forth any plan that will clean up the mess, or taking any actions that will reduce the likelihood that such a financial disaster will reoccur. Such is the price of having people in charge who are simply out of their depth while confronting one of the greatest challenges to have faced the country for the past fifty plus years.

• The Deal To Make With Madoff

2009-03-13T20:42:00.010-04:00

The icon embodying our generation’s perception of the more extreme and baser elements pervasive on Wall Street will receive a sentence this summer that will extend far beyond his life expectancy. The devastated thousands of sources that rendered up the $65 billion Madoff fraudulently appropriated will not be satisfied. Neither will society’s need for necessary corrections of the system that continues to sanction thievery.

The mainstream media suggests that his 11 felony counts should spread like shrapnel to his wife and kids, and to his associates. Madoff stated in court that the businesses they ran were, “legitimate, profitable and successful in all respects.” The importance of this court delivered statement is not what he said, but what his claim reveals of the prosecutorial shortcomings in his case. Evidently the prosecutors have not effectively extracted the most important information from this well-connected and very effective scoundrel. Madoff is under no obligation to cooperate since he has no deal with the state. The prosecution attempted to extract admission of conspiracy from him. This accomplished nothing, and his lawyer indicated that Madoff has accepted the fact that he will die in jail.

We have previously written on this case with The Madoff Letter, however, with Madoff’s pleading concluded, we feel strongly that prosecutors should move to make him an offer that will render a maximum of the dispersed capital back to the original investors, and surface a majority of the co-conspirators hiding far beyond the circle of the Madoff family. Most importantly, an effective deal would bring the implementation of wide-ranging fixes to the regulatory cracks that continue to enable such broad abuse on the Street.

To successfully achieve these objectives, let’s set aside the public fury calling for blood, and attempt to extract the highest possible benefit to society. The prosecutors may in future use his family as leverage in extracting information from him, however, with his guilty plea, Madoff has made this unlikely in the near or mid-term, and such efforts could take many years to resolve. Time will work against the prosecution in bringing satisfaction in these cases, and the last thing they should wish for is that harm comes to Madoff in prison.

Going after his family might satisfy emotions, but as such a process evolves through years of judicial wrangling, it will provide little of real value toward the principal objectives. Given that he has accepted his fate, the justice system should make Madoff a deal that would provide him some faint hope before he dies. Give him the prospect of spending some free time with his children and grandchildren before his days are over.

If billions of dollars are recovered from offshore accounts, from foreign feeder funds, and from an endless list of individuals who catered to the Madoff cash collection by accepting kickbacks, does it matter if Madoff once again sees daylight? If the long list of individuals who conspired gets rounded up to join the ranks of the incarcerated, does the greater good become advanced? If the specifics of regulatory shortcomings, and failures or incompetence of the “overseers,” such as Congress and the SEC, receive unprecedented attention, and correcting legislation becomes enacted, would this not reduce future recurrences of colossal or amorphous frauds? Would the 5,000 people whose lives have been dramatically affected not welcome a significant recovery of their capital? Of course.

Make a deal Madoff will not refuse. Provide Madoff sight of the end of his tunnel. Take ego and emotions out of the equation, and make light deals with each member of his family. Exchange the leniency for a complete and specific unraveling of the past thirty years Madoff spent in the more dubious financial chambers of Wall Street, Geneva, London, Monaco or Singapore. Get all names and amounts. Then go after all of them, extraditing many from the comfort of protective jurisdictions while those countries still need all the financial goodwill they can get, and grab the cash these co-conspirators stashed as you bring them to justice on the streets of New York.

Revenge in this case would not positively serve the society Madoff abused, and he is not likely to atone for his crimes. What matters now, more than retaliation on this former NASDAQ Chairman, is the achievement of some restoration, and salvaging as much as is possible of the destruction rendered by this monstrous crime. Let his dream hold contain a whiff of freedom, as he rests uncomfortably in his new austere surroundings. Do whatever it will take for him to cough it all up.

• The Fourth Estate – R.I.P.?

2009-03-11T20:49:00.014-04:00

For generations we have accepted the “press,” as a vital element of democracy. It has been known as The Fourth Estate because it came to represent a counterbalance to the executive, legislature and judiciary. This fourth leg providing balance in our society was given birth through a network of independent single page papers distributed by hand that evolved over two centuries to include radio and television. Its current manifestation, however, no longer plays the role of independent pillar supporting the social triumph that is democracy.

The Fourth Estate brought us news, presented opinions and often played the role of guardian, even becoming an attack dog, when it found abuse of power in one of the three branches of government. We did not assume complete objectivity, which would have been too much to ask of fellow human beings, but we expected truth, and at the very least we demanded a dearth of ideological paddling of particular political creeds.

The past twenty years saw enormous consolidations occur at alarming rates throughout the corporate landscape, to an extent that the term, “too big to fail,” became acceptable, terminology. Through repetition, the phrase evolved into an affirmation, and the insanity of its meaning escaped inquisitive common sense.

These consolidations inevitably affected all areas of media and resulted in the formation of gigantic entertainment and culture empires with some subsidiaries masquerading as news companies. In today’s media sovereignties, the term, “journalism,” no longer applies to any performance or occupation preoccupying their employees. Their commissions have dissolved into endeavors that would more appropriately be called, “celebrity reporting.” The writers and talking heads have themselves become celebrities, and the objects of their reports are celebrities created by the media conglomerates. The “star” making machines are profitable cogs for their masters.

Whether the celebrities are the Hollywood version, the corporate executive edition or the latest political rendition, the pandering dialogue is neither inquisitive nor analytical. Whether addressing business or politics our media has become boringly consistent and vacuous as if every news program or publication was its own adaptation of People magazine. Pretty pictures passing by, saying nothing, providing no insight or truth, but shouting, “look at me, I am a trademark.”

We witnessed in dismay as not a single member of the media questioned the irrational invasion of Iraq. We watched interviews adoringly pander to too many business leaders of corporate America as they abused their positions, and in some cases personally took hundreds of millions, even billions of dollars, from their corporate coffers. More than a few committed acts that should have been considered fraudulent, but were acceptable because everybody else was doing it. The business media simply looked on approvingly as ethics evaporated. They would not dare question celebrity, or inquire uncomfortably of those who had the power to terminate advertising and therefore affect their paychecks. What else can we expect when there is greater concern for the interviewer’s sex appeal or status, than for the quality of the interview. It is not that the interviewers are airheads, far from it. It is simply not their job to delve, probe or question, plowing for truth, while well armed with information. The objective is to attract audience and advertising.

It may be some time before we recover from the lack of analysis into the ideological games that were played by politicians manipulating the levers of influence that created the housing bubble. Not one member of the Administration, present or previous, nor any member of Congress, has been purposefully brought to task by anyone in the mainstream media. We have not benefitted from any vigorous investigate reporting on the creation of the financial fiasco currently being endured and creating stress for all taxpayers. Where are our 21st Century versions of Woodward and Bernstein? The few who attempt such efforts are independent, and considered marginal. Their labors bear little fruit. If the mainstream media doesn’t pick up the story, its likelihood of gaining traction is minimal at best.

It is fortunate that the internet’s pervasive presence provides ample sources for those who wish to research. While there are stimulating ideas coming out of the blogosphere, expecting great things from the net now appears to be misguided. The influential web sites also need advertisers. They rush to attract more eyes than the next, and in so doing, only join the ranks of the irrelevant, ratings obsessed, mainstream media.

And so, we remain passively entertained, perched on the sidelines, as our lives become altered by special interests. We wish we had the time to become energetic participants, but we have jobs, sometimes 2 or 3, the rent is due, and just around the corner tax payments will demand attention. We can’t understand it all and wish some elected official would tell us the truth, for once. We yearn for that unusual political candidate that will once elected, keep promises made on the campaign trail. We wish members of the media would be more objective, and occasionally root out some of the schemes siphoning off our tax dollars for purposes no-one understands or cares enough to follow-up on.

The time has come for the phrase, “too big to succeed,” to take effect, and become entrenched in our vocabulary, particularly as it relates to members of The Fourth Estate. We need to clamor for a refurbishing of the fourth pillar so necessary in the sustenance of a healthy democracy. The accelerating polarization being perpetrated on society by the entertainment and culture industry posing as, “news,” must be reversed, before we return to a state similar to pre-revolutionary France where the Three Estates considered were the Aristocracy, the Clergy, and the People, however, the People had no say in the allocation of their tax money once it was collected.

• Obama, The Third Tell

2009-03-05T05:21:00.007-05:00

Previous articles on this post observing certain “tells,” have hopefully laid useful stepping-stones in the analysis of Obama’s attitude or inclinations towards the nation he leads. The President has just delivered another significant reveal.

During an attempt to turn positive in contrast to his consistent negative affirmations on the economy since his election, Obama said that "profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you've got a long-term perspective on it.” Whether or not this was a planned attempt to appear reassuring to Wall Street, the statement’s impact was broadly revealing.

Obviously no-one expects that such a “buy” signal from the President will stimulate unfamiliar investors to leap into the markets. If anything, the observation raises concern on his evident lack of familiarity with the most critical elements of the American capitalist system. At the very least he could have taken the time to become familiar with some of the essential vernacular long practiced by the investment community, Wall Street and management of corporate America.

The Dow is down 30% from its election day levels. Although Obama has rushed to stimulate the economy, amplify government presence and government spending, his policies have thus far not found acceptance from Wall Street and the markets. The state of the economy, and its persistence at the top of the priority list, should have provided him some incentive to become educated on the key components of American industry, and the nature of business.

Profit and earnings are usually considered the same thing, therefore the ratio between the two is one. Price-to-earnings ratios on the other hand, have been effective deciding measures used by investors when assessing relative risks inherent in purchasing individual company stocks or baskets of stocks through index funds. The price divided by the earnings through the most recent trailing twelve-month period, provides the P/E ratio, and can easily be compared to that of other companies.

While Obama’s commentary might have been well-meaning, it suggests a general lack of knowledge about profitability and yield. These are the biggest concerns of all business leaders whether they manage large corporations or smaller employers. The success of these companies, their ability to raise capital, and their profitability, will be a source of the much touted, but little defined economic growth that will supposedly result from the stimulus billions. These companies will in future provide a principal source for the cash that will repay the overwhelming debt. Obama will therefore require more than a vague or passing acquaintance with the engines that will enable a return to prosperity, as he leads the charge to inject trillions into bailouts and the so-called stimulus of the economy.

Is this a foretelling of outcomes similar to what we witnessed in the aftermath of Bush’s disastrous decision to invade Iraq? A President completely unaware of all things foreign, made a historically momentous decision to invade another country for still vague or questionable reasons. Are we to assume that in the equally significant decisions that are required when addressing a depressed economy, a complete lack of awareness will somehow surprise us and serve the day with wisdom? Is Obama aware that he absolutely must provide himself a condensed education on the inner workings of small and large businesses?

As we have previously suggested, the 44th President must rapidly acquaint himself with a few fundamental economic elements if he is to become effective in managing the largest economy in the world, and he must absolutely understand inflation, that destructive monster waiting just around the corner. The markets have never been forgiving, and will not likely find comfort where out-of-control spending and excessive debt are the principal measure of the world’s leading government.

The President should also become very inquisitive as to the nature of his nation’s currency, its bonds and its capital markets. On his way to borrowing the trillions of dollars to fund his agenda, he will better understand what he is asking for from the country’s international creditors, and will better comprehend the relative position into which he will be placing his country. Those behind the lending wicket will have little empathy for America’s concerns over currency, national security or trade balances. It is hoped that a little more knowledge will heighten the wisdom during the chastening process of borrowing, and will stimulate the discovery of less expensive paths to economic health. Such appreciation might also provide the administration with some confidence that business and capitalists are not its enemies.

• America’s Overnight Transformation

2009-02-27T00:59:00.018-05:00

The centerpiece of the Administration’s rushed, colossal bailout and stimulus program is the taxpayer support of the nation’s 20 largest banks. Treasury Secretary Geithner, former Federal Reserve Bank of New York President, is Obama’s point man on the aggressive plan to bolster the financial system. As he leads the charge to inject hundreds of billions into banks, he cringes from applying the term, “nationalization,” to his strategy.

In the American lexicon and consciousness, nationalization of corporations steps across the threshold of socialism. Obama and his team are being careful not to overtly to be taking that gambit so early in the game.

By allowing this strategy to move forward, taxpayers are betting their futures that the collective mediocrity which mismanaged the financial institutions into an incomprehensible mess, will suddenly become masters of rational thought, and will transform into diligent financial management. Are there any taxpayers in America who would independently place their hard earned cash with any of these failed speculators? Not likely, so why is the greater collective mindset rushing into the abyss?

While he is not an economist, Geithner is supposedly an expert in monetary policy, yet he has no idea of the depth of the banking problem and cannot evaluate the viability of the financial institutions. He is also unable to establish their near term or long term solvency. Unfortunately, neither can anyone else, it seems. America is looking for guidance from a man who was one of those who not so long ago believed the banks were strong and their risks were distributed broadly enough to satisfy expectations for long term stability.

Bottom line, the government’s approach for instilling a return to “confidence in America,” means taking mountains of debt raised dollars, and placing them into giant unfathomable baskets of risk. Countries around the world are looking to America for a return to stability, but do they really care if the U.S. taxpayers drown in debt as the U.S. government rushes into territory it knows nothing about?

We are subjected to emphatic statements that the government must take these drastic measures of a scale never experienced, because the alternative will hold consequences of a far worse crisis. How can the Administration make such absolute and foreboding claims, when the government doesn’t fully comprehend the problem. It has also been unable to satisfactorily explain the specifics of its plan, or the expected outcome. Is the problem really insurmountable, or is this a massive cash grab and a government bloating exercise being quickly actualized while the historically unique opportunity presents itself?

It appears everyone in the MSM supporting the current plan uses Lehman Brothers in the argument, suggesting that its collapse almost destroyed the global financial system. That is a fabrication based on vacant assumptions, fuelled with panic. Are we expected to accept that the calamitous repercussions awaiting us are so overwhelming, they must be true? Surely Obama, Geithner and a list of well-educated experts along with NYT can’t be wrong, nor would they lie. When they tell Americans that Citigroup, Bank of America and Morgan Stanley hold the future of the world in their hands, surely they must know what they’re talking about.

On the surface, adding capital to an undercapitalized bank might seem to make sense. Unfortunately, the capital is coming from the taxpayer, and however the Administration camouflages it, this will be a nationalization of banks because the capital injections will exceed current market values of these financial institutions. In any case, this nationalization has already begun under the FDIC, and will accelerate as the largest banks get bailed. Equally disturbing is that the degree of undercapitalization enjoyed by all these banks is unknown. The taxpayer is being forced into guaranteeing the credit and balance sheets of these banks without any measure of as to the size of liabilities awaiting them. Such guarantee of unknown obligations isn’t even “throwing good money after bad,” it’s worse. And don’t believe them when they tell you taxpayers will get money back when the distressed assets are sold.

This panic driven overreaction will siphon an anticipated $3 trillion or $4 trillion from taxpayers over the coming three or four years. The strategy, being energized by Wall Street and its stockowners, reminds us of placer gold miners using overpowered firehoses that completely destroyed the landscape in the hope that it would render an occasional nugget and some gold dust. Somewhere on the side of that mountain, might be some gold. Somewhere out there, if trillions are immediately thrown at financial and other institutions, some jobs will be generated. The parallel isn’t quite appropriate of course, because miners of nineteenth century Northern California actually knew which hillsides sheltered the wellhead to their fortunes.

The administration suggests that once the economy recovers and these banks become viable once again, they will be returned to private status once again. Given the degree to which these banks are undercapitalized, such anticipation would appear to be an impossibility, and is therefore either disingenuous or lacks basic knowledge.

It would be more prudent for the Administration and Congress to reign in the panic, take control of The Fed and regain control of the U.S. dollar. The Fed did not do its job, and did not step in to restrain the out-of-control leveraging that allowed the crisis to bubble. Showing the world that the U.S. is changing the ways of its wayward financial community with specific plans, would bring back some confidence. It would also be more responsible to apply measured responses to specific pressure points in the financial industry, as the extreme demands surface, that are not efficiently answerable with bankruptcy protection. Taking the term “bankruptcy” out of the financial lexicon is a mistake regardless the size of the institution. Such attitude will only lead to further inappropriate consolidations such as the many we have already witnessed. There are many viable and well-capitalized banks remaining that will gladly lend, with minor inducement to take on risk from The Fed and the FDIC, but without bailout capital.

In its rush, the new administration does not appear to have come up with any creative or novel programs to address the financial industry’s decay. We appear to be coaxed into a dark alley, still drunk from two decades of profligate spending, and expecting magical overnight answers hoping the walls will keep us upright. Much more had been anticipated from this Presidency, or at least much more had been hoped for from a majority of the voting public. Much more, and certainly not the short-term uncreative thinking Taxpayers are being presented with. We are, however, witnessing a rapid transformation of America.

• A Positive Trend Rising Out Of The Fear

2009-02-23T15:45:00.007-05:00

A positive trend is imposing itself on the American landscape. The average savings rate, which had been 7.7% in 1992 and even reached lofty levels of around 12% in the ‘70s, dropped to almost zero four years ago and stayed there. In the last quarter of 2008 that trend made a dramatic turn.

The fourth quarter of 2008 found a 2.9% personal savings rate with 3.6% reached in December. The consumer has made a decision, forced though it may have been, that having some cash reserves for a rainy day is a prudent life style change. The other good news is that the consumer is ignoring those absurd pleadings sprinkled across the MSM attempting to instill more fear, that if you don’t spend and consume with abandon, the recession will get worse. Even the NYT laments that saved dollars don’t circulate through the economy.

The argument, obviously, runs that consumption now forms such a major portion (71%) of U.S. GDP, that only the consumer’s spending can bring this recession out of its tailspin. Ignore those experts and pundits, and disregard their threats and idiotic short-term thinking. While Obama helps failing companies and bails mortgage foreclosures, consumers should disregard the noise and remain on track. The economy is a long-term game with long-term effects in which patience should prevail as the governing strategy.

With this perspective, consumers armed with their increased savings will gain confidence as they live within reasonable and manageable levels of consumption. Wherever they choose to preserve their capital in a pillow, in gold, silver or any other medium, the state of mind will be positively impacted over a 3 or 4 year period. Such assurance in time will translate into long term, sustainable support of the economy.

It is hoped that consumers will ignore government and expert pleadings, and that current trends will prevail pushing savings rates to levels achieved 30 and 40 years ago. Perhaps we can say, "good riddance" to profligate spending for a generation or two into the future. It would, however, be too much to expect that such attitude could infect government through osmosis. With the return of consumer confidence there will also be an increase in the powerful sense of freedom, and a recession of the fear that government is trying so hard to instill in the American taxpayer.

• Obama Mitigating Mortgage Foreclosures?

2009-02-17T15:56:00.013-05:00

Obama announced that between $50 billion and $100 billion will be spent on making mortgage payments affordable, as part of the giant gamble he and Congress are making, under the title of “stimulus.” No help will be provided for those who made rational decisions on purchases, but ample support will be provided to those who couldn’t afford the homes they signed up for. Rationalizations for such a move are being promoted by the administration, Congress and the MSM. They are easy to dispense, but is such policy right?

Banks are temporarily suspending foreclosings on some home loans until they have had time to understand what the government really intends, and they’ve had a chance to negotiate their way into the handouts. Financial corporations such as Citigroup, Chase & Co., and Morgan Stanley will set a moratorium in place until early March, by which time it is expected that the mortgage modification details will be finalized.

The hard sell for this program uses supposedly sincere reasoning such as, “If the house next to yours is in foreclosure, your home drops in value as well.” That is the big one since instilled fear is an instrumental motivator. At first blush, it sure sounds convincing, but then it settles into your consciousness, and a discomfort begins to shade it’s seemingly benevolent intent. You begin to dissect the soundness of the argument and stand back to look objectively at the whole picture. Where is the common sense?

Who else is thrilled with the Obama and Congress decision to rush into a cash dispensation of such magnitude? Everyone in the bad mortgage food chain is in support of stemming the foreclosure rate. Banks, large and small, are clamoring for more bailout money to cover bad loans they were responsible for providing, and their executives don’t really want to give up the summer home in the Hampton’s. Mortgage brokers, real estate brokers, and homebuyers who are underwater on their house purchase decisions are cheering Obama and Congress. The only ones not in favor are those who made financial decisions diligently, having saved their money and minimized the outlay for shelter as much as they could. We don't need to explore how millions who are renting while saving and waiting for prices to become affordable for their first home, feel about taxpayer money being used to attenuate the drop in real estate values.

Aside from unknown hundreds of billions that will be required to implement such shocking endeavor, Rep. Barney Frank intends to introduce legislation to change bankruptcy law that will enable judges to adjust the principal on mortgages held by homeowners who cannot afford the payments. He plans to provide protection to lenders who reduce already set and contracted interest rates, or change the terms on troubled loans. This movement has enormous ramifications for the long-term viability of the financial services industry. It will certainly impact investors who invest in mortgages with set interest rates and steady returns on investments.

The plan is to reduce potential delinquent borrowers’ payments to as low as 31% or their pre-tax incomes. Evidently those facing foreclosure will get preference on the priority list. It is doubtful that anyone in government will be capable of differentiating fraudsters from intentionally bad decision makers. Who is not on the list? Those who purchased homes well within their financial means. These are also the people who will be paying for their wayward neighbors’ well being. Should renters be given a financial break for having made good decisions, NOT having been seduced by the “no money down” siren’s song, and NOT having lept into the froth of the real estate pool?

We are witnessing the government sliding the country into forced rewarding of bad behavior. This was bad behavior by borrowers, by lenders and by all the middlemen eating off the mortgage loan buffet. In such a program the opportunity for abuse will be significant, and probably uncontrollable. Why would people who purchased automobiles they couldn’t afford not also get bailed out? Didn’t many of these mortgages finance giant TVs and second cars?

The argument for “help” will originate from all corners of the economy. Across the U.S., businesses are preparing their theatrical presentations for requests of a piece of the bailout pie. With the trillions of dollars being loosened from the grasp of future generations by the government, it is understandable that the line-up extends invisibly over the horizon. There is no indication from any source, and certainly not from Obama, Congress or their economists friends, as to how any of these trillions will be repaid. They are probably afraid to face the real answer. Public reaction would be immediate.

Some of the answer for return to a healthy economy rests in individual responsibility for reasonable behavior, enhanced with large doses of education. The government should consider spending money on educating the whole population on the management of money, and on making sound financial decisions, particularly those pertaining to housing. The result would be much less self-destructive behavior. It wasn’t the fine print that burned borrowers, it was the big, bold print. This is one of those areas where even a little knowledge would go a long way.

This dramatic shift of government intervention into the economy from the backs of future generations with no plan or concept for recovery is a realm never before experienced, not even in the 1930s. The added measure of placing additional burden, even punishment, on those who have made the right financial decisions in their lives, is also beyond the pale of reason. The only ones in support of these measures are those with a stake in the game, or those panicked into thinking it is necessary, or possibly those who don’t pay taxes. It would be more reasonable to offer strong incentive such as long term zero interest loans to new home buyers who can come up with large down payments. There is also ample room for the government to positively influence the "renegotiation" of underwater mortgages, however, the government’s unreasonable and unbalanced current plans with this program are extremely difficult to comprehend.

• FBI’ Shifts – Counter-terrorism To Anti-Fraud

2009-02-12T19:02:00.010-05:00

As the economy’s meltdown confuses politicians and economists, and stresses businesses and wage earners, the FBI has suddenly discovered a new path to career advancement. It has announced open season on the financial community with 530 corporate fraud investigations.

The FBI also claimed that 38 of these new investigations involve some of the biggest names on Wall Street, and that it has a record 1,800 investigations digging into mortgage fraud. Mortgage industry professionals, including the CEOs of companies, brokers, and lawyers are apparently being scrutinized for their roles in the evaporation of hundred of millions of dollars.

Some of the disappearance is related to the $700 billion Troubled Asset Relief Program’s cash distribution already dispensed. No-one was watching. What can really be expected for the stimulus money Obama and Congress will shortly be disposing of? Neil Barofsky, the special inspector general of the TARP program put it rather aptly, “History teaches us that an outlay of such money in such a short period of time will inevitably draw those seeking to profit criminally.” This is evidently a behavior newly discovered amongst these so-called pages of history. We can assume that anyone of the millions of taxpayers who are being asked to go into massive debt, could easily have lent a more watchful eye over the apportionment of cash than the amateurish efforts which the Administration and Congress have provided.

All of this, of course, is intended to allay, even anesthetize the public fears that its precious cash is, and will be, judiciously dispensed throughout the attempt to stimulate the economy. Taxpayers must be convinced that the trillions that will be borrowed on their behalf to bailout failing or troubled businesses, are in good hands. Every tactic, including fear and panic, is being applied to convince America that this unprecedented borrowing is justified, and execution of the cash distribution will be diligently overseen by government agencies. Taxpayers must also be persuaded that government intrusion in corporate America will, in time, have positive affect. How else can the emergence of future Madoffs be prevented? Shifting public consciousness is a slow multi-level, multi-dimensional process.

We can rest assured that the FBI investigation, along with an allegedly revived SEC, will not delve too deeply into any affairs of financially healthy friends of the Administration or Congress. Future results will be consistent with past inaction on abuses perpetrated by former executives of organizations such Fannie Mae and Freddie Mac. Where was the SEC’s oversight during the past few months or the past year? Where is it now?

America can look forward to being entertained by in-depth coverage of occasional culprits assembled into the coral constructed specifically for scapegoats. Sure, they will be guilty, and mountains of evidence will be collected then disgorged on their heads with flamboyance in the public square, but they will be bit players in the game. The new FBI initiative is another tool in the arsenal prescribed for taking the taxpayer’s eye off the ball. Fraudsters should be punished. All fraudsters, including the ones at the top of any fraudulent food-chain, even those whose cosy relationships provide insulation from prosecution. Delivering otherwise is repeating tired myths, and is a prolonging of past disrespect of taxpayers.