[Rhodes22-list] Andrew, Elle & Herb, comments on your posts.

[Brad Haslett]

Ed,

Well, the chickens have come home to roost, so to speak. I don't envy
President-elect Obama and the problems he's been handed.  Perhaps Stan
is correct - is it too late to ask for a recount?  It's been a lot of
fun watching the far left get their panties in a wad the last two
weeks after suddenly realizing that their Chosen One can't possibly
deliver on 10% of what he promised. Like most incoming Presidents,
he's stuck with a lot of policies handed to him from the previous
administration.  He won't pull out of Iraq on his promised time
schedule, he won't find an easy solution to Afghanistan, and there is
no "magic bullet" for our current economic woes. There are no quick
solutions and my guess is that the current financial pain we're
suffering from will last a good bit longer.  Throwing money at the big
three automakers will only breathe a few months or years of life into
a broken business model.  Personally, I'd sure like a do-over on the
bank bailout. One can only hope that Obama is as smart as his
supporters have promised us he is - he'll need some smarts for sure.
So far he's picked some really good people, not all of them by any
means, but some.

Attached is an article from the Houston Chronicle that does a pretty
good job of outlining our problems.  It isn't easy being a
conservative these days, but I for one haven't given up hope.
Sometimes people need to be beaten about the head and shoulders for
the lessons to take hold, or as we say in flight training, "the
beatings will continue until morale improves".

Unlike the far left for the past eight years, I'm not going to berate
the President for his every little miss-step.  I sincerely hope he is
The One.  That said, I'm preparing just in case he isn't.

On an unrelated note, did you know that the turkeys we eat for
Thanksgiving are actually killed?  I've been laughing my ass off at
the "looney lefties" including the New York Times going berserk over
Sarah Palin giving an interview while turkeys were being processed in
the background.  For someone supposedly headed for the "dustbin of
history", they sure pay a lot of attention to her every move.

Brad



America's math problem yields no simple solutions
Much of the blame rests with government spending
By PAUL W. HOBBY
Nov. 21, 2008, 8:11PM


So America can still amaze the world.

Is the election of President-elect Barack Obama a blessed
self-correction or radical over-correction for the world's greatest
nation? We can't know just yet. But, no matter how you voted, we have
to close ranks as a nation at this moment in history, because the
tripod of American authority in the world is dangerously unstable.

The tripod consists of moral authority, economic authority and
military authority. For reasons I need not detail, each of these legs
is stressed as they haven't been in a very long while. In large part
whether we succeed or fail in restoring our balance is about simple
arithmetic. A serious math problem lurks in the shadows that
heretofore neither party has been willing to address in a serious way.

Succinctly stated, the math problem is that the federal government
spends too much — a lot too much. The current deficit is a record $455
billion (before the bailout). The national debt is $10.5 trillion.

The reason for the inattention is that politics doesn't like math
problems. Speeches are easier, symbols are safe and personal
criticisms are the very best, because those things don't require
anything of us, the people. They don't require introspection, or
sacrifice or sober prioritization of needs and wants. But maybe, if
there is a moment for hard reality to emerge, it is at the end of a
political season. Just as it took a Southerner in LBJ to pass civil
rights reform, real spending reform may have to come from a Democrat
(LBJ had a balanced budget in 1969).

Math problems are hard, but they undergird the universe. You cannot
outrun or outtalk or out organize the math problem any more than you
can outtalk or outrun physical gravity. This is a problem that
threatens the strength of our currency, inhibits the government's
ability to respond to the current fiscal crisis, and diverts precious
dollars from infrastructure, education and all forms of long-term
public investment.

How did we get here? You know the answer at some level. We are all
guilty of wanting to consume now and pay later. Politics is forever
the struggle between today (current services) and tomorrow (education
and physical infrastructure), and today usually gives tomorrow a solid
whipping. For the "values voter" the math problem also has a moral
dimension, because the practice of shipping the tab for our lifestyle
to our children and grandchildren is truly obscene. Ironically, the
best news for rich folks is that we can't tax our way out of a mess of
this proportion. In a global economy, high marginal tax rates will
cause capital and tax base to migrate elsewhere.

Democrats traditionally ignore the math problem. They just don't turn
in their homework and figure that it will all be OK as long as the tax
code is useful as a punitive device for administering social justice
rather than an equitable means for funding government. For their part,
the Republicans cheat on the math problem. They talk about fiscal
restraint and then spend on their contributors in a way that makes the
drunkest of sailors blush. They say that if we reduce revenue enough
we can eventually balance the budget. We have seen this "new" math
before when we were told that supply-side economics would magically
erase the deficit problem. It is true that tax cuts do act as economic
stimulus, but the temporary stimulus is ultimately empty without
spending restraint.

Beyond government spending for a moment, the monetary new math said
that $2.5 trillion in excess leverage (comparing the traditional
relationship of bank debt to GDP) was OK because the risk had been
securitized through asset-lite Enronomics, where the markets parse
derivative and speculative risk intelligently, and create wealth for
the most efficient market participants — in the absence of any
fundamental value creation in the underlying economy. It wasn't OK,
and a lot of people are getting hurt who never bargained for the risks
they now face.

Our approach to the public sector over the last eight years has been
if you disparage government long enough it will get better. Clearly
that hasn't worked. Obama thinks that government is important and that
it can help people, but it can only do so if it is fiscally strong.
His budget cuts, therefore, would spring from a different motivation.
Will that be enough to make them palatable? I don't know, but I do
know that the math problem demands that he try.

Perhaps the ultimate fiscal blunt instrument, a balanced budget
amendment (with appropriate exceptions for war or fiscal emergency),
may be the bad idea whose time has come. Congress under both parties
has been unable to discipline itself without it. Make no mistake, this
mathematical exercise will be painful; all spending, not just domestic
discretionary spending, (38 percent of the total) must be on the
table. The only spending that is truly nondiscretionary is interest on
the national debt.

Obama is very smart, and he gives a very good speech. If he simply
allows the latter gift to overcome the former gift, we may temporarily
restore some moral authority in the world, and at least the folks who
hate us will have to come up with a whole new set of reasons to do so.

But this won't last; the math problem will ultimately impoverish us,
and beggars don't retain their moral authority very long. Real change
demands that the political conversation begins to track the fiscal
reality for the first time in a long time.

When I first met Obama in June 2007, I found him, as millions of
others have, to be a special person. Is he special enough to lead us
into the math problem with the kind of aspirational tone that got him
elected? I think so.

I hope so.

I pray so.

Hobby is a Houston businessman with extensive experience in private
and public finance.


On Sun, Nov 23, 2008 at 6:46 AM, Tootle <ekroposki at charter.net> wrote:
>
> Andrew,
>
> I am sorry about your loss of being able to use credit to conduct your
> business.  Actually, use of credit has little to do with capitalism but
> rather economics Keynesianism and manipulated market theory.
>
> Understand the biggest single cause of the current economic 'Bubble'
> bursting was the manipulation of mortgage market by National Democrats,
> specifically Sen. Dodd of Connecticut and Barney Frank of Massachusetts.
> These two induced Fanny Mae and Freddie Mac to push mortgages without
> historical safeguards.
>
> Specifically they pushed giving mortgages without sufficient down payments
> to assist mortgage lenders in recovering from default and pushed giving
> mortgages with balloon payments to those who would not be able to meet the
> ballooning payment.  Read the information available and you will find that
> the Bush administration requested better oversight and stricter lending
> requirement.  Those two National Democrats and their associates hindered or
> stopped better control.  That is a big part of the current credit crises.
>
> This as Stan would say, according to Cindy Spitzer, was a 'Bubble'.  The
> bursting of this bubble crippled the historically reliable mortgage market
> by making all mortgages credit suspect.  This included all the packages of
> credit made from those mortgages.
>
> This has 'mortally' harmed the credit industry.  This has harmed not only
> getting credit but those who historically have used it to smooth contact
> payments out to pay routine business expenses. This harm caused by Fanny Mae
> and Freddie Mac will last 50 years or more.  Thank those in the U. S.
> Congress who wanted to use the credit industry to finance social aims.
> Thank you for supporting those candidates.
>
> So how is above this any different from Obama's other 'Progressive Goals?'
> Unfortunately, those who understand economics understand the problems that
> an Obama administration will have and cause.  Maybe the stock market will
> stabilize?  However, the harm inflicted on U. S. credit will linger.
>
> I am sorry that this will cause you great personal harm.  What were Warren
> Buffett's remarks the other day about future inflation and devaluation of
> the U. S dollar?  Thank Barney and Chris and fellow travelers, and your
> support of those policies and the policies advocates.
>
> Elle said, "Educators haven't 'turned over' discipline; it has been ripped
> out of their control by laws and regulations and lawsuits."  Yes thank
> plaintiff's attorneys for over zealous advocacy of minor issues and nominal
> harms.  We have at least one of those guys, on this forum.  Actually, we
> have several but they lay low least they hear about their activities.
>
> Herb said, "At the same time, if we as parents were more involved in the
> educational process of our children, most of us would be surprised at
> exactly what we can do. However, in the relative vacuum of parental
> involvement, the bureaucracies have thrived like a fungus, and we've ended
> up where we are now."
>
> The simple truth is not all parents have time to be involved.  When both
> parents work, as is needed in today's times to make ends meet, they do not
> have time to attend PTA and other activities.
>
> Discipline was integral when I attended school.  It has been hamstrung by
> bureaucracies and sociopaths and those wanting schools to develop socially
> conscious students.  Just read about the themes advocated by Obama's friend
> Bill Ayers.  He disregards schools to build basic math and communication
> skills for social purposes. Yet, we have so many who follow the sheep
> herder…
>
> Ed K
>
>
>
>
>
> --
> View this message in context: http://www.nabble.com/Andrew%2C-Elle---Herb%2C-comments-on-your-posts.-tp20645864p20645864.html
> Sent from the Rhodes 22 mailing list archive at Nabble.com.
>
>
> __________________________________________________
> To subscribe/unsubscribe or for help with using the mailing list go to http://www.rhodes22.org/list
> __________________________________________________
>