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If you think we’ve seen the worst of it, think again. This economy is nowhere near its bottom, and nothing the federal government has done thus far has any chance of turning it around, or even softening the blow. We’ve spent decades building an economy based on easy credit, and now the inevitable correction has begun. It promises to be much more harsh than most people can bring themselves to admit.
One who can bring himself to face the music is Gerald Celente of Trends Research Institute (www.trendsresearch.com), who correctly predicted, among other things, the market correction of 1987 and the collapse of the Soviet empire. His latest commentary isn’t exactly optimistic, and with good reason. In addition to the commercial real estate crash he predicts, we have yet to feel the full effect of the residential collapse, owing to a rash of ARM defaults over the next few years. It’s not a pretty picture, and what makes it even uglier is that the Democrats in Washington are licking their chops.
Dems want federal control of the American economy, simple as that. The worse things get, the greater their justification for taking over, and the easier it will be to sell it to the destitute, brain-dead masses. FDR’s New Deal will seem mild by comparison. And it isn’t just a case of, as White House Chief of Staff Rahm Emmanuel put it, not letting “a good crisis go to waste.” It’s well within the moral boundaries (such as they are) of the Democratic Party and their “by any means necessary” philosophy of politics to not merely take advantage of a crisis, but to willingly make it worse, especially if it advances their ultimate goal, which is centralized control of our money and our lives.
Does anyone really expect the federal “stimulus” legislation to stimulate anything, except growth in government programs? And that’s the only growth Democrats are interested in, because in their worldview, everything should be a government program. Perhaps some of them truly believe that it’s the best, most humane, most moral way to govern, but at its core, it’s just simple lust for power. The essence of Democratic appeal to voters is their ability to spend other people’s money. That’s how they look out for the little guy. Not by giving them the knowledge and the means to succeed, but by playing Robin Hood. We’ll have a chance to slow them down at the ballot box in 2010 and 2012, but by then the country we love may be toast.
There is, however, a silver lining. When people start rioting in the streets because they can’t feed their families, chances are they won’t worry nearly as much about melting sea ice or endangered species. The only reason people are in a position to worry about those trivialities in our modern society is because life has been so damn easy for so long, but that’s all about to change. Things are going to get hard. Really hard.
What next? Could this president look any more inept? Last night on Leno, Barack Obama actually had the poor taste, and worse, the poor judgement to refer to his meager bowling skills as being ”like the Special Olympics or something.” Smooth one, Barrie.
I’ll give him credit for apologizing this morning, and hey, I’m a guy whose tolerance level for tasteless humor is higher than most, but come on. This wasn’t Larry The Cable Guy sitting next to Jay, or even Dennis Miller, this was The President of The United States, mocking the developmentally disabled on network television. Unbelievable! Tim Shriver, Special Olympics Chairman, called Obama’s apology “moving,” and appears to have gotten over it already, but what can you expect? Shriver is a Kennedy nephew, born into the family that seems to think even drowning a young girl in a drunken stupor is forgivable, as long as you’re Democratic enough. Besides, Obama now plans to invite some Special Olympics athletes to the White House for some basketball and bowling! What for, Mr. President? Just covering your ass, or are you looking for a good laugh? Those retards, after all, are so funny…
If a Republican had committed the same faux pas, the press would have had a field day, portraying it yet another example of conservative insensitivity. But again, Obama gets a pass from his media pals, the ones who shamelessly campaigned for him last year. They got their wish, now let’s see if they’ll ever have the guts to admit they were wrong, that their sycophantic hero-worship and devotion to vague promises of Hope and Change display a shocking lack of intellectual depth for which they should be embarrassed. I won’t hold my breath.
We shouldn’t really be too hard on President Obama, after all. He didn’t have his teleprompter.
The very sad, somewhat freakish death of actress Natasha Richardson has started a media discussion about ski slope safety, and the broader issue of just how far government should go to protect its citizenry from any and all harm. Do skiers need a new law to protect them from themselves?
Richardson, not an experienced skier, was taking a lesson when she fell on the beginner slope, striking her head. She got up, said she felt fine, and went about her business, but before the day was over she collapsed and was declared brain-dead. A day later she was gone. Autopsy results are pending, but one must assume that a subdural hematoma was the culprit. How tragic and strange that an otherwise healthy 45-year-old woman should perish from such a seemingly insignificant injury. Natasha Richardson’s celebrity has made this unfortunate anomaly front page news, and now the inevitable discussion has ensued (saw it on TWO local newscasts last night)– would she be alive today if she had been wearing a helmet? Should the law require skiers to wear helmets as a condition of hitting the slopes?
Skiing is, by nature, a rigorous and hazardous activity that regularly results in death and injury each ski season. You’re travelling at a high rate of speed with planks on your feet. It may be exhilarating and fun, but it’s not necessarily safe. Those who participate do so of their own free will, and are aware of the attendant risks when they get on the lift (which can also be dangerous) and the risks are many. Natasha Richardson fell and hit her head. Sonny Bono ran into a tree. Some folks blow out knees or break femurs. Some are buried in avalaches. Ya takes yer chances, as they say.
Taking part in any physically demanding sport involves weighing the risk to one’s physical safety with the pleasure one derives from participation, and for many, the risk is part of the pleasure. Mountain climbing, dirt biking, scuba diving, hell, even golfing or bowling involve some degree of risk. If the state passes laws requiring the reduction of that risk, where will it end? How safe must the government keep us from our own decisions?
Natasha Richardson might just as easily have fallen in her kitchen when she slipped on a spot of bacon grease (okay, my kitchen, maybe). Should we just wear helmets 24/7 to be sure? This is the hazard of believing in a nanny state that takes care of and looks out for us in every walk of life. Every new regulation designed to protect us limits our choices, erodes our freedom and sucks the joy out of our lives. Want to ride your hog without a helmet? Have at it, it’s your head. Feel like not wearing your seat belt? Not the choice I’d make, but whatever. In every case, the individual makes a choice that balances their relative pleasure and happiness with the inherent risks involved.
Which is where the nanny state has us under its thumb. They justify all their “safety” laws because if you get injured too badly, you’ll become a burden to the health care system, which costs us all. They care for us so much that they can’t allow us to suffer the consequences of our choices, no matter how stupid those choices may be. It’s not just helmets and seat belts, they criminalize most recreational drug use, they’re slowly but surely outlawing cigarettes, and now they want to ban reckless, unhealthy eating, for God’s sake.
Life is nothing more than a series of choices, each and every day. We can make good choices or bad ones, but they should be our choices to make. If we choose poorly, if we make a mistake, then we should, as the adage goes, learn from our mistake and choose better next time. At least we were free to choose. It’s too bad about Natasha Richardson, and we’re probably not going to require ski helmets any time soon. But the very fact that some of us are willing to discuss it is an indication of how much we’ve caved in to the concept of the all-caring nanny state. Soon, there won’t be any choices left for us to make. You might be safe, but ask yourself– will you be happy?
It’s difficult to blame all of the world’s economic woes on Jim Cramer of Mad Money, but as Jon Stewart pointed out to Cramer last night, he has become the face of a much broader and more insidious problem in today’s business world: the degree to which the market has been driven by speculators, rather than investors.
If you missed Stewart’s shredding of Cramer on The Daily Show, it was one of television’s golden moments, an opportunity for a regular schmo (no offense intended to Jon) to tell a high-profile market insider just how badly they’ve gotten it wrong, and screwed the average investor in the process. I had reservations going in about whether Stewart was the ideal guy for the job, but he was magnificent. He was measured, he was reasonable, and he was 100% correct. Where Stewart got it right was when he asked Cramer to reconcile how the stock market has always been sold to the average American as a long-term winner we could depend upon to build our wealth for retirement, while the titans of the financial markets invested like guys sitting in the casino sportsbook betting on horses, hoping to hit today’s trifecta. The two approaches simply cannot coexist.
There was a time when I was a semi-regular watcher of Mad Money, even though my strategy since 2001 has been to invest in dividend yield. I still found Cramer entertaining, and mostly watched to see if I might glean an investment idea or two that I hadn’t previously considered. My interest in Cramer waned the day I saw him actually admit, when the subject of dividend yield came up, that it was the surest way to build real wealth– reinvest those dividends. This, from a guy whose daily investment advice was to buy equities with the intent of cashing in within six months or less. Quick money. Mad money. Problem is, it not only makes for unstable markets, it makes for bad business practices.
The markets today are largely controlled by players who have no interest in the long view. They want to make their money right away, an attitude that, sadly, seems to pervade the entire culture. Forget operating a company so that it makes a profit every year in perpetuity, they’re interested in today’s stock price, rarely looking beyond the current quarter, let alone thinking twenty or fifty years out. Too many publicly held companies aren’t controlled by businessmen, but by investor/speculators, who would rather sacrifice the long-term health of the company to achieve short-term gain. Sales flat? Down? Their answer is usually to cut expenses and enhance the bottom line now. Addressing the underlying problem might require some short-term pain, and speculators can’t abide that. After cutting expenses, their secondary strategy typically involves… cutting expenses some more… and then again, because it’s the only way they know to keep that profit figure afloat. In time, all the cost cutting begins to cannibalize the company’s core assets (usually its people– imagine that!) until there’s nothing left. After cutting the fat, they start in on the muscle, and then break out the bone saw. In short, it is an unsustainable business strategy.
Hence my devotion to dividend investing. Companies committed to paying regular dividends have to concern themselves with being profitable, and remaining profitable. It’s not going to make you rich overnight, but, as even Jim Cramer knows, it’s the most dependable path to building long-term wealth. That, however, doesn’t exactly make for exciting or entertaining television, which Cramer obviously values far more than offering sound investment advice. We should thank Jon Stewart for exposing him as the fraud that he is.
For any that had enjoyed this blog in the past, please allow me to apologize for my lack of activity. In October I started work on a stage production, which led to another, and I haven’t had the opportunity to post for a few months. Besides, I thought it might be best to let our new president settle in and get busy doing the people’s work before weighing in on his performance. I can’t contain myself any longer…
Any of you Barack Obama supporters starting to have buyer’s remorse yet? Is this really the change you hoped for? After two weeks in office, can anyone please explain what’s different? We have yet another president promising to be the most ethical we’ve ever seen, and failing miserably. His “no lobbyist” pledge went up in smoke, he can’t seem to find a cabinet nominee who isn’t in trouble with the I.R.S., and to a person, they’re all Washington insiders! Feels like a new day in America, don’t it?
His answer to our economic difficulties is to push for an earmark-laden spending bill that will suck almost a trillion dollars out of the economy and reposition it to pay for his party’s pet projects, which will slow, not stimulate our economy. Make no mistake, friends, when President Obama talks about doing “the people’s work,” what he really means is “the Democratic Party’s work.” The stimulus package is nothing more than a Democratic reelection effort, spreading the people’s money around in an attempt to buy votes. Sadly, most Dems are stupid enough to be taken in.
And that, really, is the most disturbing thing about today’s Democrats. They’re convinced that theirs is the smart party, and that Republicans are the party of white trailer trash Nazi cretins, people who could only believe what they believe because of 1) their stupidity; and 2) their inherent meanness. Here’s a newsflash for all the Democrats out there: yours is the party that is plagued by woefully low IQs. It wasn’t the economically dispossessed that elected Obama, it was the intellectually dispossessed. Voters who didn’t have the capacity to think beyond vague campaign promises like “hope” and “change.” Voters who really don’t read much, but tend to get their information from television, or from their equally brain-dead acquaintances. That is the face of today’s Democratic Party. Society’s dregs. After years of failed liberal education policies, and failed liberal social policies, now we know what the endgame was all along. An electorate that’s too stupid to know when it’s being duped.
A friend recently shared this group of photos. They’re Chicago P.D. mugshots…
The cop who compiled these couldn’t find a single mugshot with a perp wearing McCain or Bush shirts or stickers. Lift your heads in pride, Democrats, these are your political brethren! I used to think Republicans were bad (and they were). This Congress will redefine “dysfunction.”
Now that we’ve relinquished control of the nation to the least intelligent, least moral, and least productive among us, let’s just sit back and watch how the next four years play out, shall we? If we survive that long…
The State of California is in serious trouble, and the projected budget shortfall of nearly $30 billion over the next two years is only half the problem. Coming up with enough revenue to survive the next two years is a short term, resolvable issue. Of much greater concern is how the state will fare over the next ten or twenty years. Unless we see a major, systemic shift in the way California is governed, expect to see this fiscal management nightmare repeated again and again.
Thanks to a law stipulating that a tax increase must be approved by a two-thirds majority, the minority Republicans have managed to stave off the enactment of higher tax rates. Dems would like to raise the state sales tax, and increase vehicle license fees (neither of which will boost a slumping economy), but they need some Republican votes to get it done. The Republicans won’t sign off on the increases without some spending concessions, like cuts in some programs and a proposed spending cap, measures to which the Democrats are profoundly opposed.
Governor Arnold Schwarzenegger, who has given up any resemblance to a fiscal conservative, is showing little leadership in the face of this crisis, avoiding hard decisions for fear that he might incur the wrath of the mighty public employee unions who slapped him down back in 2005 when he tried to hold his ill-fated special election. Either that or he’s just afraid of his wife. Whatever the case, it’s becoming obvious that he doesn’t direct much public policy these days. It’s enough to make one wish for the bold decisiveness of Gray Davis.
California will continue to face almost certain budget disaster year after year because of the Democratic philosophy of governance that prevails in the capital. In the Democrats’ view, spending less money, even when revenue shrinks, is simply not an option. To them, government is a growth industry. To be successful, government must do more. Spend more. “Improving services” is the way they like to put it. Giving more people more stuff. The problem is that giving more means taking more, and there isn’t nearly as much to take when the economy slows. Taking more also slows the rate at which the economy can recover. Any time a politician touts a plan to spend public revenues in an effort to “kick-start” or “stimulate” an economy or “create jobs,” we can expect complete and miserable failure, for this simple reason: money in the hands of government will never– never– be as productive as money left in the marketplace.
Democrats don’t get that. By redirecting monies, not only do they curry favor with low-income voters, they move a little closer to their ultimate goal, which is income equality. Because it’s so terribly unfair for the productive among us to make all the money, while the unproductive have to get by with a used Nissan Sentra and basic cable with no Tivo. So they suck at the economy like parasites, giving money away as if it were the only thing they knew how to do. That’s what government has become in the U.S., a provider of services, mostly financial. It’s primary role, especially at the state and local level, is as a redistributor of revenue. We pay for health care. We pay for day care. We pay to feed people at home and at school. We pay for college tuition. Increasingly, government is willing to pay for almost anything, and rarely is there a return on the investment, except at the ballot box.
The California legislature is unable to come to an agreement on the budget because the party that controls it has the wrong idea about what government should be. An article about the partisan wrangling in Saturday’s Sacramento Bee included this telling tidbit about the Democrats’ unwillingness to budge from their stance on spending.
Labor unions and education groups oppose deep spending cuts and contend that a hard spending cap would perpetuate mediocrity by barring the state from improving services once the economy improves.
“It would be imposing today’s priorities on tomorrow’s Californians,” said Rick Pratt, assistant executive director of the California School Boards Association.
As if the cap couldn’t be lifted at a later date, or the tax increases repealed when the economy improved… aside from that piece of idiocy, the greater tragedy is the underlying political philosophy at work here. Shouldn’t the ultimate goal of government be to not have to provide all these services? Wouldn’t we prefer to see an economy where a greater number of us is financially secure and productive, and didn’t need state assistance? In an improved economy, shouldn’t the need to “improve services” abate? That’s what should be driving economic policy, a concerted effort to make us all self-sufficient. But our elected leaders can’t have that, because to not need the state is to not need them, and at the end of the day that’s the essence of their authority, the power to take and spend other people’s money. The parasites have already made the host weak and sickly. Now they’re on the verge of killing it off.
My hometown newspaper, McClatchy’s Sacramento Bee, has officially taken leave of its senses. With all that is going on in the world and in the nation– a presidential election, two wars, a floundering global economy, tonight’s opening game of The World Series, for God’s sake– this morning they chose to devote most of their front page, above-the-fold space to a story about… environmentally friendly sushi.
No, that isn’t a joke. It was the focus of this morning’s front page! It featured a large graphic with three lists– sushi ingredients that are safe to order, sushi that’s just OK to order, and then the list of items that should be strictly verboten, because their continued production is simply not sustainable. Oh, and there was also a picture of a sushi roll, in the event the reader wasn’t sure what one looked like.
Look, I realize that sushi is enormously popular today. There seems to be a new sushi restaurant opening roughly every three or four minutes, and there’s not a strip center anywhere (at least in California) that doesn’t have at least one. I tripped over a sushi bar on my way out to the car this morning. Americans are apparently wolfing down sushi in such ever-increasing quantities that, according to The Bee, sushi diners are in danger of eating up all the planet’s seafood, leaving our oceans and waterways empty of everything but… water, I guess.
What I like about this whole controversy is that I can’t be blamed. I don’t really care that much for sushi, so I rarely eat it. It’s not my least favorite cuisine, but given the choice between succulent corn-fed beef or chicken, seasoned just right and cooked over an open flame, or a piece of raw octopus wrapped in seaweed, I opt in favor of preserving our ocean’s natural bounty. Crispy bacon? Or blowfish livers? Save the blowfish! So at least on this particular pressing envionmental issue, I’m not the conspicuous American consumer who needs to be bludgeoned with the blunt instrument of guilt.
Which is nice, since most of my sushi-eating friends give me just a bit of the stink-eye when I order tempura or teriyaki off the menu, as if my lack of culinary sophistication and general un-hipness were something to be scorned. Imagine their dismay when they realize, thanks to some crackerjack news reporting by The Bee, that they’re destroying the environment as surely as coal-fired power plants and the people who continue to use those evil plastic grocery bags (at least in the cities and counties where the law still allows such heinous digressions).
But should any of us lose a moment’s rest over the danger of uncontrolled sushi consumption? If we reach the point that we’re running out of stuff to make sushi, we’ll find something else to make it from, or we’ll find something else to eat. Or more efficient farming methods will be developed, allowing us to raise all the salmon, crab and squid necessary to fill our bellies with fishy goodness as much as we like.
But then the animal rights people will cry out against the cruelty of raising fishes and crustaceans in tanks, denying them the natural right of all seagoing creatures to live a free life in open water. One thing’s for sure… when that happens, The Sacramento Bee will put it on the front page, where it belongs.
After watching last night’s presidential debate, admittedly in a sour mood because of the Dodgers performance in the NLCS, I’ve come to the conclusion that the results of this election really don’t matter all that much. I’d prefer to see McCain win instead of Senator Hippie McFlowerChild, but both candidates are such economic dimwits that it will be some time before this economy is healthy again.
Short term, the pain is likely to be more acute with a child of the Sixties at the helm, doing his level best to remake our economy in the European mold, but as I pointed out in a previous post, the Democratic stranglehold wouldn’t last long. The Dems will fall victim to their socialist excesses and get dumped by 2012. The discouraging part about the whole economic debate is that the Republican solution to our problem is essentially the same. They’re advocating increased government intervention in the marketplace, which is the worst possible thing that could happen.
Both candidates like to refer to “Wall St. greed” when discussing the credit market meltdown, but notice they never explain what that means, exactly. If one of the moderators in any of the debates had bothered to ask either candidate to explain specifically how it was that “Wall St. greed” resulted in the credit crisis, they’d have been answered with blank stares. At best we might have gotten a Nancy Pelosi-caliber response like, “Well, you know… those guys on Wall St…. they’re just so greedy!” “Wall St. greed” has become nothing more than a catch phrase both candidates have been coached to use so as to show their undying support for “the little guy.” For all the meaning the phrase conveys, they might just as well have used “robber barons.”
The mistake McCain makes is in believing that government policies can solve this problem. He wants to use our tax dollars to buy up bad mortgage paper, and renegotiate the terms of those loans to keep people in their houses. Gee, that sounds helpful, but how about letting the lenders renegotiate those terms? If they only altered the terms of the repayment, not the actual principal liability, they could at least keep some folks in their houses and maintain some acceptable level of cash flow while, hopefully, the market recovered and values once again covered the original debt. But why would they ever do such a thing when guys like McCrusty and Eugene Debs, Jr. want to completely relieve them of the responsibility with your money?
When Obama pooh-poohs McCain’s proposal to “give tax breaks to big corporations” (since, as we all know, corporations, especially big ones, are pure evil), someone needs to point out the simple truth that corporations do not ultimately pay taxes!! They pass that cost on to the end user, you the consumer. How can that be so unclear to people?
Whenever they talk about “job creation,” “getting this economy moving again,” or any of the other doltish proclamations they make about how their ideas are going to make the nation more prosperous, understand this, my friends: government policies don’t create jobs or move economies, markets do, and markets work most efficiently when government stays the hell out of the way. The only policies that work are the ones that remove The State from the equation. Lower taxes (particularly capital gains and dividend taxes, which drive more capital into the market). Less regulation. The bedrock upon which this great nation was founded is comprised of two very simple concepts: free people, and free markets. Both candidates, and their respective parties seem to have lost sight of that. We’re the ones paying the price.
It appears likely that Barack Obama will be our next president, and that both houses of Congress will become increasingly Democratic in January, but don’t expect it to last. In fact, I predict that one or both of those branches of government will revert to Republican control, if not in 2010, then certainly by 2012, and for this simple reason: whenever one party controls both branches, they implode. They just can’t help but blow it, and this time won’t be any different. If there is a political party capable of smoothly running both Congress and The White House without gagging on its gluttony for power and your tax dollars, it has yet to be invented. One need only look at recent history. Whenever one party has “the whole enchilada,” as Bob Dole so quaintly put it in 1992, the result has been a party (take your pick) unable to control itself, and voters have not hesitated to make the necessary change.
Our most successful presidential administrations have clearly been the ones that served with hostile legislatures, keeping the power balanced between the parties. Eisenhower had two years of a Republican Congress, but the excesses of Joe McCarthy wrecked that in a hurry, and he went on to lead the country through one our greatest periods of prosperity and social change. Nixon, who made the grave mistake of covering for people he should have thrown under the bus, by any objective standard had a very successful first term, winning reelection by historic margins in 1972, in spite of the Vietnam War, which made the entire Watergate affair so utterly senseless. Reagan, even though the Senate swung Republican, had a smashing eight years, marked by historic economic growth and the fall of the Soviet Union. Bill Clinton was headed for the rocks until voters rousted Democrats from Congress in ’94, and went on to have a damn good six years.
On the other hand, look at our least successful presidents. They had everything they needed to get the job done and still failed. The Kennedy-Johnson years were nothing to write home about, much as Dems want to romanticize JFK. The Bay of Pigs. Vietnam. The Great Society. Eight years of failed policies and tremendous cost, not to mention a massive increase in the size and scope of government. Jimmy Carter? What didn’t go wrong? Bad monetary policy resulting in interest rates in the 15-17% range. Bad energy policy resulting in high gas prices. A pathetic response to the challenge of Islamic terrorism, resulting, in large part, in the problem we still face today. Finally, six years of the Bush administration with a compliant Republican legislature led us to a Democratic Congressional sweep in 2006, but not before disaster struck. Ridiculous deficits. Two wars we’re not sure how to extract ourselves from.
It seems that whenever one party or the other seizes complete control, they become out-of-control drunken frat boys, unable to resist their nobler impulses and occasionally do the smart or right thing. But that’s the beauty of a democratic republic. Every couple of years we have a chance to correct our mistakes. We’re about to make a huge one, but I have faith that within the next four years people will come to realize that mistake and rectify it.
