Testing a bumper sticker

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I saw a bumper sticker on a recent trip -- "End this war."

As always, I instinctively sought a definition and tested the sentiment at its extremes. What is a war? Here is one definition: "the waging of armed conflict against an enemy."

Who wants to continue the war? Who wants to end it immediately?

I am mystified as to exactly who wants to start or continue a war. Sometimes politicians use wars as ways to divert attention from other issues (remember the Monica missles?).

I can think of a lot of people who want to end the Iraqi occupation. It started as a war against Saddam Hussein and Al Qaeda in Iraq which he harbored. That war was successful and ended with a correctly deserved "Mission Accomplished."

What followed was a long, difficult nation-building period in Iraq. Is that what the person who put the 'End This War" bumper sticker on her (yes, it was a 'her') car meant?

How did she want to end this period of nation-building? Just close up shop and walk away?

There are a whole lot of people who want to end the war, the occupation, and the nation-building on honorable terms. I do not think the "End This War" bumper sticker crowd has honor in mind at all. I think they will do anything their political party asks of them to harass President Bush. And the shame of it - those "End This War" types are hardly patriots.

Is U.S. Democracy or Plutocracy?

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Among others Gerald Celente argues that the United States is a plutocracy not a democracy.

If we posit that a plutocracy means that wealth influences government, there may be a point here.

Consider the $1 trillion dollar candidate elected this past November. Consider the billions spent by businesses and foreign governments to influence legislation both in Washington DC and fifty state capitals.

And don't forget to consider that the votes of citizens are influenced in large part by the perceived amount of "government money" which will be spent on their personal behalf.

The real problem it seems to me is that plutocracy has a natural path of decline ... to a kleptocracy, or 'government by thieves.'

When will we citizens take back control of our own government?

United States Stock Market

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I'm not an economist.

I do know how to use least squares to find a best fit curve.

Curious, I found a set of data showing the annual Dow Jones Industrial average values since 1928 and tried to find a best fit curve. Nothing really looked reasonable when the range was the entire time period, but I noticed what appeared to be a "sea change" around 1980.

To make a long story short, to my mind the best fit was to use a different growth factor starting in 1980. The curve below shows an annual 2.2% gain from 1928 through 1979, followed by a 10% annual increase starting in 1980. Take a quick look. The last plot shows the curve as it should be as of 12/1/2009 and the DJIA as of 12/15/2008. It looks like a simple 85% gain over the next year will bring us back to the curve!

What happened in 1980? Well, I simply don't know. I did find that was the year that Congress prevented banks from leaving the regulatory authority of the Federal Reserve, permitting the FED to have total control over monetary policy. I have no idea if that is a root cause or not.

I am sure of a couple of things. The 10% increase has resulted in a curve steepness too impossible to maintain, and to revert back to the mean of the curve would mean an impossibly huge market increase in 2009.

What has our government done to cause our economy to work itself into this mess?

The Chinese model of capitalism

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As readers undoubtedly know, Bank of America proposed a loan extension to Republic Window and Door employees, in part no doubt to avoid undue criticism over the Holiday season, but there may be a more fundamental cause. I found this quote from a longer article concerning Newt Gingrich's observations.

On Election Day, voters did not reject conservatism. On the contrary, they rejected the Bush administration for expanding executive power, increasing deficit spending, conducting a far less than prudent foreign policy, and displaying a general lack of competence. Of the financial bailout package, Nobel Prize-winning economist Joseph Stiglitz said: "If this isn't socialism, then I don't know what is." Conservatism, indeed, was not tried and found wanting — it was not tried.

Last night the Asian market reporter on Bloomberg noted that the US has abandoned pure capitalism for the Chinese model in which the government is the largest shareholder in what are otherwise capitalistic enterprises. The US government is part owner of the banks, and will soon be part owner of the US auto companies.

We have just seen in the Republic Window - Bank of America situation what happens when the government has part ownership. They are an owner with massive influence both real and in terms of access to the press. Thus sound business decisions take second place to politically motivated choices.

Assuming these ventures, and I am sure others in our immediate future, begin to turn a profit for the government how -- given their avariciousness for money in the form of taxes -- will the government willingly redeem their ownership?

It may be that pure capitalism is long gone in the United states. When we look for the administration which started this ball rolling, it is surprising that it was that of George W. Bush.

What is a lender's responsibility?

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Lets see, the analogy would go something like this:

1. I own two homes, one in Chicago and one in Iowa.

2. I take out a Home Equity Line of Credit (HELOC) on the Chicago property.

3. I hire a gardener for the Chicago property.

4. My income is reduced so the bank closes my HELOC in Chicago.

5. As a result I lay off the gardener and prepare to sell out the Chicago house.

6. The gardener occupies that house in Chicago saying I owed him a sixty day notice plus back vacation pay. Further, the gardener says that this is all the fault of the lender of the HELOC.

7. The president elect says the gardener is right. Jesse Jackson, seeing a case of community activism, visits the gardener and gathers some public relations points. The governor of Illinois suspends all state business not with me but with the bank involved.

8. Meanwhile, I take out a HELOC on my Iowa property and hire a gardener there.

9. The bank says the real problem is that I had reduced income in Illinois and became a bad risk for them. They imply its my responsibility to pay the gardener.

Folks, from what I understand, this is pretty much an analogy for the Republic Window and Door situation. One of the things that got us in the current economic mess was political interference in the process of making loans, requiring home loans be made to those who otherwise would be poor risks. Now, our soon to be government, is insisting that the lender, in this case Bank of America, take another risky move and lend more money to Republic in order to pay its employees.

If we are going to cure our economic ills, we must insist that our banks go back to firm risk assessment. The "solution" desired by the Democrats is a very, very bad one -- its a reason that politicians should not be involved in lending. But their solution is "populist induced economics" - and it shows us what "sharing the wealth" really means.
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Staggering Numbers

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The current administration has "created" $700 billion dollars to rescue the banking, insurance, and probably automotive industries. The new administration is proposing to "create" another $700 billion dollars in public works projects. The total debt "created" in the last few months will be $1.4 TRILLION dollars. So what?

Well, according to the Tax Foundation, there are just over 135 million Federal tax filers with a positive adjusted gross income (AGI) - those who will actually pay taxes to the Federal government. Their average AGI is a bit over $59,000 and average tax payment is $7,543. That means that on average the Federal tax rate is 12.6%. Yes we have a progressive tax, so those who earn more pay a higher percentage of AGI, but for our purposes in this post lets just discuss the average taxpayer.

This theoretically average taxpayer "owes" an additional $10,315 in taxes to pay off the total current bailout packages. In order to pay that off in one year, that taxpayer's average tax rate would have to increase by 137% or more than double. If we were to amortize the payback over ten years, the average tax rate would have to increase by about 14%.

Since those are averages, I think we can ignore the popular political rhetoric of just charging high income earners more, since the increase would be across the board. So an average earner would see his/her real rate go up about 1.8%, while a top bracket taxpayer would see a rate increase of over 4%. I know, its confusing: we are discussing a rate times a rate there. But the basic idea is that we can use averages here to understand the magnitude of the problem.

We are told that our total debt is now nearly $7 TRILLION, or $51,577 per average taxpayer with a positive AGI. We would have to pay over 98% of our income (average taxpayer) in one year to pay this off. If amortized over ten years, we would see an average tax increase of SIXTY EIGHT PERCENT.

This whole situation seems rather unmanageable to me. We need to reduce, not increase, government spending but neither the Republicans nor Democrats seem willing to do so. We cannot raise taxes enough to pay this debt and still keep a reasonably thriving country under our feet. No-one will risk popular unrest over super high tax increases which will affect all of us - not just some mythical group called "the wealthy."

How do we pay this debt? The value of our currency will decrease, which means we will see inflation perhaps on a scale we have never seen before. I hope each of you is prepared for that.

Atheists in the state of Washington

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The story from Olympia Washington is that an atheist group won the right to place a placard next to a traditional Christmas creche.

The placard reads:

At this season of the winter solstice may reason prevail. There are no gods, no devils, no angels, no heaven or hell. There is only our natural world. Religion is but myth and superstition that hardens hearts and enslaves minds.

Lets look at this statement by statement:

1. "At this season of the winter solstice may reason prevail." -- OK, that's fine. If there is a group who wants to celebrate the winter solstice so be it.

2. "There are no gods, no devils, no angels, no heaven or hell." -- Well now, I think there were gods of a sort honored during the winter solstice celebrations. Even Wiccan celebrates the holiday as the rebirth of the Great God, who is viewed as the newborn solstice sun. So the atheists are quite wrong on this statement in its connection to their first point.

3. "There is only our natural world." -- and cannot a sense of the Creator, as defined and understood by the individual, be part of the "natural world"?

4. "Religion is but a myth and superstition that hardens hearts and enslaves minds" -- Not much evidence here to show how minds are hardened and enslaved, or if they are always made so, or just sometimes. In short nothing much more than a direct attack on Islam, Judaism, Christianity, Shinto, etc. etc. Why would a government in the state of Washington permit this last point at all?

Oh yeah - its next to a creche -- the government must have wanted to permit a direct attack on Christianity.

Vague terms cost taxpayers

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On a TV business news report this morning I heard an Obama staff person speak concerning how Obama is focused on the middle class. This was a non-answer in response to a specific question about whether or not the president-elect should publicly involve himself in the Detroit automotive industry quagmire.

It make me think: we have no real means of determining who or what is the "middle class." Do a definition look-up yourself then try to tell me how anyone would be able to look at an individual, their finances, or maybe their lifestyle and say 'Yes, there is a middle-class person."

We delude ourselves when we vote for politicians who will in some way or another provide tax cuts to the middle-class because, at best, we have no idea what group that politician is referring to. Are we in that class? Who knows.

The best I could find was that "working class" meant those who were either manual laborers, or who worked for wages (the last definition surely includes a whole lot of us). "Middle class" referred to skilled labor and professionals (OK teachers, do you work for wages, or are you professionals), but who lack political power, which certainly excludes the unionized educators in America. The "upper class" appears to be the monied elite who use their wealth to influence public policy.

There is not one of those definitions though which I would feel comfortable using to sort out the group of people I might meet in a day.

If we are going to use those terms, we need a more specific definition.

Au contraire, Mr. President

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Don't get me wrong; there is much I admire about George W. Bush. Even the errors made by his administration as I see them, are not at all the mistakes so routinely delineated by the drooling-left in lemming-like imitation of each other.

However, I take some exception to this report posted on the Breitbart website:

George W. Bush hopes history will see him as a president who liberated millions of Iraqis and Afghans, who worked towards peace and who never sold his soul for political ends.

"I'd like to be a president (known) as somebody who liberated 50 million people and helped achieve peace," Bush said in excerpts of a recent interview released by the White House Friday.

See, I think that it is the people of the United States who were willing to liberate the "millions of Iraqis and Afghans" mentioned in W's quote. While the Afghans seem to have had a large number of citizens who are willing to struggle for their own independence, like the current administration many of us were surprised that the Iraqis do not seem to have that sense of drive to achieve their own freedom, preferring until recently to succumb to the will of local religious clerics. That has changed within the past year, but it has taken a long time to get to this point.

So Mr. President - perhaps you should want to be known as the chief executive who led the American people as they expressed their willingness to spend their wealth and risk their lives to assist Afghans and Iraqis gain their freedom -- not as the president who personally liberated them.

Humility, Sir -- humility.

That's the solution?

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Unbelievably, Corporate America finds this the answer to public criticism over what appears to be a lavish lifestyle for executives.

Nov. 27 (Bloomberg) -- General Motors Corp., criticized by U.S. lawmakers for its use of corporate jets, asked aviation regulators to block the public’s ability to track a plane it uses.

“We availed ourselves of the option as others do to have the aircraft removed” from a Federal Aviation Administration tracking service, a GM spokesman, Greg Martin, said yesterday in an interview. He declined to discuss why GM made the request.

Flight data show that the leased Gulfstream Aerospace G-IV jet flew Nov. 18 from Detroit to Washington, where Chief Executive Officer Richard Wagoner Jr. spoke to a Senate committee that day and a House panel the next day on behalf of a $25 billion auto-industry rescue plan.

Now, as I see it, these are worldwide public corporations whose executives need to have convenient mobility so the use of a leased jet makes sense for business needs alone. Having spent my working career in a Dow30 industrial corporation, I can only say that there are a lot of middle managers who sit in airports waiting for their flights who could also benefit from the instantaneous mobility of use of the corporate jet fleet.

Even so, the ringing question is why do these corporate executives have such a tin ear when it comes to how this sort of personal service resonates with the average American worker? They are asking that worker to lend them money, or guarantee their loans, yet they see no reason to make things appear less extravagant. Why is keeping the information from the very public whose pockets they wish to tap the best answer to their corporate working styles?

We should demand a breakup of the big three auto companies into smaller, more manageable business entities - and put this kind of high flying (pun intended) style and cost behind us.

Why "Too big to fail?"

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I have always been fascinated with the connotation, the associated or suggested meanings behind words.

First we heard that mainstream banks were “too big to fail” and we handed them $700 million of our money (well we didn’t hand it to them; our elected representatives did). Now we hear that “Big Auto” is “too big to fail.” What does that mean?

It seems it means the corporations are so big that failure would create such financial hardships for people which would segue into political hardships for the very politicians who have the ability to hand out our money.

Has anyone considered that perhaps these companies are just simply “too big?”

Why not force a managed restructuring in which the Big Three auto makers would be split up? Remember when AT&T was broken up because it was too big? Each share holder received shares of all the new companies which were created in the breakup, and then free market forces went to work on the components.

What if GM for example was broken into its parts (Chevrolet, Cadillac, GMC, etc,) and each smaller entity then would succeed or fail according to normal forces in the free market. If they were competitive they would succeed; if not, they would fail as they should. The same could be said for any company, like GE which also surfaces from time to time in the “too big to fail” argument.

Maybe when a company gets so big that its failure produces national political implications, it is just too big to operate under normal free market rules.

When government becomes the insurer of bad choices by the jet set corporate executives of the “too big to fail” companies, and when it becomes the safety valve for rescuing those companies from bad choices, poor strategic plans, and their market-driven accountability for failure, then government becomes too expensive.

Truth in Politics

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I'm just going to float an idea here. You know that I am quite upset at the spin, "dis-information," and mis-information that is part and parcel of our political system.

Why not have elected officials, candidates for office, and anyone speaking on behalf of the candidate or politician be required to swear to an oath of absolute honesty prior to any appearances before voters (TV, radio, in person, etc.).

Y'know the usual oath about swearing to tell the truth, the whole truth, and nothing but the truth.

Here's another way to look at it: the candidate, elected official, or their apologist swears to present to the American people at all times -

- nothing that is a lie;
- nothing that is composed of some known facts, but omits other known facts (oops, that would end the careers of the spin doctors); and,
- nothing that is composed of some facts coupled with some lies (which leads the American citizen to believe the lies are also true).

If any candidate or serving politician violates this oath, they could be immediately removed from office.

Just think about it - forced honesty from politicians. Sure, when pigs fly ... .

The Right to Impose Taxes

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We will certainly soon be facing more taxation, regardless of how it is spun to us in the press. With the recent, and upcoming, attempts to “rescue” the economy, whatever that means, our national debt is now so large that the National Debt clock ran out of digits to display it.

Does government have a right, (or stated in terms of our founding documents, did a Creator give government the right) to impose taxes? William Pitt thought not.

Taxation is no part of the governing or legislative power. The taxes are a voluntary gift and grant of the Commons alone. - - William Pitt, Earl of Chatham, in Parliament 1766

However our founders realized that our new government would need to collect taxes. Their definition limited the use of those taxes to common defense and general welfare of the nation.

U. S. Constitution, Section 8 The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

Amendment 16 - Status of Income Tax Clarified. Ratified 2/3/1913. The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

I am not a lawyer, but a quick glance through FindLaw seems to indicate that “general welfare” is usually interpreted to mean for the good of the people as a whole, rather than for the good of sub-groups within the population.

So I suggest we citizens who are being asked to provide this “gift” to the government ask ourselves some questions and think about some issues when the inevitable specter of taxation arises.

The new president campaigned on the issue of taxing the wealthy more in order to give tax breaks or credits to lower income citizens. It is difficult to see how taxation for the purpose of wealth redistribution fits within the definition of “for the good of the people as a whole." Nevertheless, this action will need to be considered in terms of our long standing acceptance of progressive tax rates (wealthy pay a higher percentage), and whether or not the new administration shows any effort to simplify the tax code.

The hardest thing in the world to understand is the income tax. -- Albert Einstein

Is it in the interest of the population as a whole to keep some banking centers afloat, and allow others to go bankrupt?

Is it in the interest of the population as a whole to financially rescue credit card operations like American Express?

Is it in the interest of the population as a whole to financially rescue auto makers, who are supposedly competing in an open and free market?

The list goes on. I do not wish to imply what your conclusion should be, but I urge you to at least ask yourself similar questions.

Big Corporations versus Big Government

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Some in Congress are roaring about a sales conference held by AIG at Pointe Hilton Squaw Peak in Phoenix Arizona last week. This happened at about the same time AIG was granted additional “bail out” money by the government.

View the AP Story


In its defense AIG says that the conference was for independent sales representatives - making them aware of AIG and other financial instruments and was vital to the company’s survival.


But that really doesn’t matter to the “Joe the plumbers” or “Jane the Walmart employees” out there, because the situation looks as if taxpayers money is being funneled by government through the company in order to provide expensive resort junkets for big business.


And it doesn’t matter to big government either, because the Democrat side can use what the incident looks like as just one more example of how the Republican side is in the pockets of those rich and wealthy CEOs.


As a boss of mine used to say: “Its all about optics.” And the current environment is that somehow all big businesses and their CEOs are responsible for the entire economic mess we are in. Just think of the last tirade you heard about “Big Oil.” Pretty soon Congress will come after “Big Cola” and “Big Software.”


Maybe it isn’t so much about sharing the wealth as it is showing a decent respect for sharing the pain.

Watch for 401K legislation

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Friends - you need to watch very carefully what Congress may do with your 401K. If the legislation follows the testimony, your 401K will be confiscated and substituted with a special type of Social Security payment.

Here is some of the testimony:

The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

The full article here:

http://www.carolinajournal.com/articles/display_story.html?id=5081

Liberal politicians are lawyers

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I really don't want to pick on liberals with this, but a fact of life is they (as compared to conservatives) are more often lawyers.

Our legal system is adversarial -- that means there are at least two sides to an issue. The lawyer for one side does not feel compelled to state the complete truth, but rather select a subset of all facts which, when presented, lead to a specific conclusion favorable to the side of the issue they represent. The theory being, it seems, that the opposing side will do the same -- and that whatever is "truth" will be determined by a judge, jury, or in this case the electorate as a whole.

Certainly one factor of the adversarial system is to also cast doubt upon the oppositions subset of facts and its conclusion. In the political arena I guess we call that 'mudslinging.'

Roll those thoughts forward to politics. The opposition is not really "lying" - they are presenting a few facts which then lead to the conclusion they wish to promote, and pointing out that their opponents are dangerously wrong in their conclusion.

Both sides of the political spectrum do this, of course, but my view is that liberals do it better.

Couple that thought with the reality that the media is largely inclined to support the liberal position and the result is that the American voter only hears one side of the policy argument.

A good example of this is the recent AP story that President-elect Obama is considering using executive orders to quickly reverse what is described as the Bush opposition to funding stem cell research because that was the position of the anti-abortion groups.

What we voters are actually reading here is a subset of fact and a summation, coupled with a dig at the religious right.

The facts are that George W. Bush's administration was the first presidential administration to fund embryonic stem cell research - hardly opposition to funding. The administration did however halt the creation of new stem cell lines on the grounds it was unethical to do so. In fact, not long after that, science found other ways to create stem cells for the same purpose of embryonic cells. And it should be pointed out that according to the National Institute of Health, embryonic stem cells are created from human material left over as a result of artificial fertilization procedures, and are grown in vitro (think: in a test tube) for five days before they are ready for use in research.

Now - putting all the facts together, we can see the bias in the media and that the issue may indeed be a "tempest in a teapot." More on the Right to Life, versus the Right to Abortion controversy at another time.

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And another which shows how cleverly the liberal-lawyer makes his case to pillory the Bush administration in front of an accommodating press.

Actual text from HR 5501 (from Thomas.gov): `Section II 45(C) Research indicates that many youth benefit from full disclosure of medically accurate, age-appropriate information about abstinence, partner reduction, and condoms. Providing comprehensive information about HIV, including delay of sexual debut and the ABC model: `Abstain, Be faithful, use Condoms', and linking such information to health care can help improve awareness of safe sex practices and address the fact that only 1 in 3 young men and 1 in 5 young women ages 15 to 24 can correctly identify ways to prevent HIV infection.

And today's report from Bloomberg News link
http://www.bloomberg.com/apps/news?pid=20601070&sid=aKrIK33ovrk8&refer=politics

Public-health policies of President George W. Bush's $45- billion PEPFAR program have brought AIDS drugs to almost 3 million people in poor countries such as Rwanda and Uganda, more than under any other president. Still, requirements that health workers emphasize abstinence from sex and monogamy over condom use have set back sexually transmitted disease prevention and family planning globally, said Susan F. Wood, co-chairman of Obama's advisory committee for women's health.

``We have been going in the wrong direction and we need to turn it around and be promoting prevention and family-planning services and strengthening public health,'' said Wood, a research professor at George Washington University School of Public Health in Washington.

The liberal-lawyer inverted the order of the clause so that 'condoms' comes first, and then argued his summation that this somehow proves that the Bush administration, and by implied extension any moderate or conservative is moving in the wrong direction and - tah dah - Obama and the far left fixed that!.

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