Are Obama and the Democrats fair?

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I see many folks consider the BHO Democrat administration to be more "fair" and "equitable."

Here's wordnet's definition of "equitable": fair to all parties as dictated by reason and conscience; "equitable treatment of all citizens."

And their definition of "fair": free from favoritism or self-interest or bias or deception.

The BHO administration wants to raise taxes on FAMILIES making more than $250,000 in spite of his campaign promise that it would be on INDIVIDUALS making more than this amount -- the so-called "rich."

Is that action "fair"? Are those who support the administration's position being "fair."? Are they "free from deception" in this position? Free from favoritism?

Is it "equitable" by this administration to treat one class of citizens, a group they describe as "rich," differently from the rest of the citizens? Are those who support the administration's position on this issue being "equitable"?

Unintended Consequences

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This is part of a short article in the Boston Herald online.

Fidelity’s Edward “Ned” Johnson jumped into the controversial debate over President Obama’s “New Deal II” and what Johnson called government “make-work projects.”

Without naming names, Johnson praised the administration’s effort to make economic recovery its top priority, saying it was “admirable.”

But Johnson, sounding like he’s never been a big fan of the original New Dealers from the 1930s, warned of too much government involvement in the economy and indicated Fidelity is beefing up its government-affairs unit to fend off possibly burdensome new regulations.

“We can only hope that the government’s cure doesn’t further sicken the patient,” Johnson wrote in his annual update on Fidelity’s performance over the past year.

“During the ’30s, Congress - with guidance from the president and the same kind of good intentions - shifted the country’s cash flow away from productive businesses to government make-work projects, which most likely prolonged the Great Depression,” wrote Johnson, arguably Boston’s most powerful business executive.

As for the financial-system crisis, Johnson also took a somewhat anti-government conservative view toward its causes, saying “this climate was caused by many well-intentioned policies - stimulated by individuals at high levels in government and sanctioned by regulatory structures.”

Those policies helped make “money ridiculously easy to obtain and business people eager to comply with the policies,” Johnson wrote.

Perhaps we should all contemplate this a little. Congress and the Executive branch are unable to see much beyond the next election - thus the actions our government take initiate a kind of "law of unintended consequences."

Can there be a better rationale for firm, enforceable term limits?

Heard 'round the world?

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Have your heard CNBC reporter Rick Santelli's heartfelt blow-up?

Santelli clip.

Based upon the response - after 24 hours over 1.5 million hits on the CNBC website, over 100,000 views on YouTube, coverage by Matt Drudge, coverage by Rush Limbaugh, just to name a few - Santelli's comments struck a blow. It was about fairness by the current government which is using our money - reaching into our pockets and taking our money - to pay off mortgages for those who could not afford them in the first place (largely under rules established by the Clinton administration by the way).

Was it well-intentioned? Maybe.

“It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds."
- Patriot Samuel Adams

Perhaps it is time for the people who paid off their mortgages, or were very careful to only take mortgages they could afford, to stand up and be heard. Has the fire against socialism been set in your mind? Are you one of the water carriers? Or do you just want to sit back and drink the water others carry for you?

Is this the shot of the 21st century which will be heard around the world?

Mortgage Subsidized

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Lets see if I have this straight.

One of the reasons we are in this mess is because irrational mortgages (interest only, or no credit check) were made, mostly because of pressure on lenders from the Clinton administration. So we had a lot of people buying homes they could not afford under any kind of prudent lending policies.

These mortgages were repackaged at several levels into financial instruments that are now called "toxic." People cannot pay their mortgages which should not have been made to them in the first place. Houses go into foreclosure, thus depressing the entire housing market.

As a result, banks and other buyers of these derivative instruments, hold assets which they cannot sell at anywhere near the price they paid for them. Consequently, these institutions have to reserve money for "bad debt," thus reducing the amount of money they have available to lend for any reason (commercial loans for example).

The tie-up of liquidity in bad debt reserves causes at best a reduction in economic growth and at worst - since the institutions do not have sufficient funds for reserves - causes the failure of the bank.

So the solution being pushed by Democrats is to use taxpayer funds -- my money, your money -- to subsidize the payments (via interest rate subsidies) to these people who should not have been granted a loan in the first place.

Consequently, those of us who figure out how to live within our means must pay for those who do not or cannot prudently manage their personal finances.

This is a bad deal and a slap in the face by Democrats. It must be stopped.

Health Care in Stimulus Package

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There are a lot of troubling items being shoved through Congress in the name of "Economic Crisis." One of most concern is the National Healthcare Information Technology Chief, who will be granted the right to determine if physicians and hospitals are "meaningful users" of the Federal Government's health information about you. From Bloomberg News (page numbers refer to the pdf version of HR 1):

Hospitals and doctors that are not “meaningful users” of the new system will face penalties. “Meaningful user” isn’t defined in the bill. That will be left to the HHS secretary, who will be empowered to impose “more stringent measures of meaningful use over time” (511, 518, 540-541)

What penalties will deter your doctor from going beyond the electronically delivered protocols when your condition is atypical or you need an experimental treatment? The vagueness is intentional.

A key word here is "atypical." It is my observation that most healthcare is delivered on a probability basis. Your symptoms are analyzed and compared to a curve of probable distribution regarding what the appropriate treatment should be. For sake of argument, lets say the recommended care will result in medical correction about 2/3 of the time. If your medical problem falls outside of the normal distribution central area (maybe plus or minus two standard deviations), your medical case is considered "atypical."

In a case of an atypical medical problem, your physician (or dentist for that matter), will have to take the time to delve into your symptoms much more thoroughly. That will consume more time - and cost more money. I have experienced just such a situation personally.

It looks like what the government is telling us is that some bureaucrat in Washington will insist that your physicians, surgeons, and dental practitioners stop your care (under the rationale that it will be "costly" as they define it) if your medical situation cannot be resolved using some middle ground on the curve of likely results distribution.

We need to make sure this is removed from the Economic Stimulus package for many reasons, not the least of which is that you - the American citizen - deserve the right to have your medical condition thoroughly diagnosed should you choose to have it done.

Does stimulus money really exist?

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Today, in Elkhart Indiana, President Obama said something along the lines of: If people don't have money, people can't spend money.

Assuming for a moment that is a correct statement, it begs the question to be asked: can government spend money it does not have?

He did not answer that, to my knowledge.

The President votes "Present"

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One of the campaign issues raised concerning Barack Hussein Obama was that his record, both as a junior Illinois legislator and as a junior Illinois senator, was his overwhelming record of voting "present."

We learn today that with his version of an economic "stimulus" in some trouble in Washington (as you read in a previous entry, he defines stimulus as government spending, whether it has the money or not), Barack Hussein has decided it was imperative - after a mere two weeks in DC, to head to Camp David.

This was a NYT headline reported on Google: 'Put This Plan in Motion,’ Obama Urges Lawmakers.

Let them do it, he seems to be saying. I will vote 'present' - but from a distance.

Given his rapidly diminishing poll approvals - it looks like America is beginning to realize they were sold a pig in a poke regarding "Hope and Change."

Too bad.

Obama and McCain clash?

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George Bernard Shaw wrote that "England and America are two countries separated by a common language."

In my working career I found that what appeared to be disagreements over an issue almost always ended up sourced in the definition of terms. I would joke that I failed to understand how anyone understood anyone else because we were separated by a common language.

Yesterday Sen. John McCain spoke out against the Obama administration stimulus, arguing for tax incentives to stimulate the economy, Obama, on the other hand, dissed Republican criticism of his plan being nothing more than spending by arguing that spending was the definition of stimulus.

So there we go again -- using the same terms to describe different things.

To conservatives, the less intrusive government is - especially in terms of taxation - the more business, notably small business which is the largest employer in aggregate, flourishes.

To liberals, nothing but the right the spend taxpayers money - in today's case wealth that the government does not have - will stimulate "the economy."

The discussion will no doubt continue ad nauseum. When you listen to it, remember that each side is defining terms differently.

Stimulus Projections

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As many of you have read, the Congressional Budget Office (theoretically non-partisan) states that the Obama stimulus will have a negative effect on the gross domestic product. Others report that over 50% of the $800 billion Obama package is solely for the benefit of unions, although I do not know the details of that assertion.

Nevertheless -- is this what we are in for?

Unemployment

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The labor department just released unemployment figures. The media outlets scream: MORE UNEMPLOYED SINCE 1992, NEARLY 598,000 JOBS LOST.

So I looked at the Department of Labor's website.

Sure enough: their press release lead paragraph is:

THE EMPLOYMENT SITUATION: JANUARY 2009


Nonfarm payroll employment fell sharply in January (-598,000) and the unem-
ployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of
the U.S. Department of Labor reported today. Payroll employment has declined
by 3.6 million since the start of the recession in December 2007; about one-
half of this decline occurred in the past 3 months. In January, job losses
were large and widespread across nearly all major industry sectors.

Then I took a look at Table A-1. Table A1

If I read it correctly, 5.643,000 people would like a job out of a non-institutional labor force of 153,716,000 workers.

I make that to be just under 3.7% of the workforce is seeking employment.

A year ago 3.3% of the non-institutional workforce was seeking a job.

It seems to me there is a difference between not choosing to work, and wanting to work.

Why does the DoL want to dramatize the higher number?

Something about the "Lying liars that lead them" maybe?

Obama Popularity

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The February 5th Rasmussen poll website reports that Obama's approval rating is slipping, and in fact is lower than George W. Bush's was at the same point in his presidency.

What is striking to me is not the high approval among people who consider themselves Democrats, nor the low approval among those who self-identify as Republicans ... it is his surprising low rating of about 30% among the non-aligned.

Obama likes to throw his weight around by telling those who oppose his ideas "I won," implying of course that somehow all American voters totally support any cockamamie idea he comes up with. While his attitude shows his arrogance, and hints at the totalitarian approach the left wants to take (Sen. Harry Reid and Speaker Nancy Pelosi are also good models of this attitude), it simply does not "play in Peoria" with common Americans who still seem to be slightly right of center in outlook.

Remember this is a president who as a legislator built a reputation on voting "Present" - and accumulating political power through associations with former radicals.

U. S. Economy

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Yesterday's business news coverage was about the Madoff situation - and it certainly sounds like a Ponzi scheme. That's where the principal invested by new buyers is used to pay previous owners a "return on investment." Obviously at some point there are not enough new investors to keep the scheme going. If you ever thought your bank was a conservative place for storing your wealth, just notice that some of the big names who bought into the Madoff scheme were UBS, and Bank of America.

Hidden somewhat in the day's coverage were reports that the housing price collapse may have more distance to travel. I found this chart on the internet and added some trend lines.



With Congress in a mood to toss money at the problem, $900 billion in addition to the previous $700 billion, with all of the attendant pork Washington infamously adds to such legislation, its hard to see how we can work ourselves out of this problem in less than a year. Precious metals trader James Sinclair has written that Obama will very soon realize he has been "had" -- that there is no easy way out of the economic collapse and with the added "stimulus" he will "own the problem" politically. That may mean he is - at best - a one term president.

That will still leave the question open of 'where was the SEC during the Bush administration.' Many of us prefer a minimum of government interference in finances, but that does not mean we expect the regulatory arm in Washington to be asleep while predators like Madoff roam the markets. As one person told me: that's like having a room full of three-year olds without any discipline. Free markets should not be undisciplined markets.

Just how big is the $1.6 trillion dollars we have created from whole cloth to toss into the fray as stimulus? As Sen. Mitch Connell said, if one spent a million dollars a year since the birth of Jesus, we would only have totaled something just over $770 billion through 2,009 years. In short, the size of the so-called stimulus is mind-boggling.

U. K. Prime Minister Gordon Brown during Parliament's question time slipped and probably accurately said that the entire world is entering a depression. The scary thing is that with all the world-wide money being thrown out to solve the crisis, we may also be facing a period of hyperinflation similar to that of the Weimar Republic.

I'm making no investment suggestions here - I'm not qualified to do so - but I would suggest we all hang on to our hats for this ride over the next few years. As the Cole Porter tune goes "now I suppose, anything goes."

Why Not Buy American?

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A clip from the San Francisco Examiner:

House Democrats insisted on including “Buy American” provisions in the $825 billion economic stimulus bill. The provisions — which are mirrored in the Senate Democrats’ version of the legislation — require that federal funds for stimulus projects can be spent on steel and iron only from domestic producers.

That’s another way of telling foreign producers to keep out. Such trade barriers damage economic growth just like tariffs that make goods imported from overseas cost more

"Buy American" is one of those phrases that sound right, but the world's Free Traders don't like it at all.

Lets face it - Free Trade means finding the lowest cost producer in many cases. Its why we no longer have a textile industry in the United States. Labor was cheaper elsewhere in the world. So we put Americans out of work, in order that other Americans buy products which has a greater profit margin to corporations.

Instead of a open-ended free trade policy, why wouldn't we say that those countries who support our political objectives world-wide are automatically free trade partners, and those who oppose it are not. Oh yeah, we want Hugo Chavez's oil and gas.

We in the United States are allowing these policies to weaken our superpower status.