11/24/07
Until very recently, I was convinced that there was no way the Democrats could lose this election; given the hash President Bush has made of the country, I might have gone so far that we were on the precipice of a new Democrat era, akin to the Roosevelt/Truman years.
However, for a number of reasons, I am starting to think that there is a possibility that the Democrats, famous for fumbling favorable situations, could wind up losing this one.
First, despite some recent minor stumbles, it still looks like Hillary Clinton will be the Democratic nominee. As I have said before, given the compression of the primary calendar, the premium placed on money and organization is even greater, perhaps far greater, in 2008 than it has been in past elections. Even an early stumble in Iowa, New Hampshire, South Carolina, or any combination thereof (still far from a certain, even likely, outcome) will probably not result in Clinton’s losing the nomination. The big primaries on February 5 come too quickly for the early states to give their winners much of a boost, especially in fundraising; the money for the big fights will be in the bank long before the outcomes of the early states are known.
The problem for the Democrats is that if Clinton wins the nomination, the Dems will have forfeited their biggest advantage in this election: a clear alternative to George Bush on foreign policy, and especially in Iraq. Clinton, apparently assuming that the nomination is sewn up, has been sprinting to the center, which normally would be good politics in a country with a largely centrist electorate. However, she has been running hardest to the center in the one policy in which she should be staying as far “left” as possible: Iraq. Despite what the Democrats are trying to convince themselves of, they did not win big in 2006, and are not ahead in the polls in 2008, because people are clamoring for a 21st century version of the New Deal. The Democrats won in 2006 and are ahead in 2008 because people are repulsed by the Iraq war and the ruinous Bush foreign policy. Simply put, they want someone to get us out of Iraq. That someone is not Hillary Clinton. She has consistently hemmed and hawed on this issue, as she has on any number of others, in an attempt to bravely go in the direction of least political resistance.
Anybody who wins the Republican nomination, and it is starting to look like Giuliani, will win by pledging to the GOP primary electorate undying fealty to the foreign policy, Iraq, Iran, the whole shebang, of the Bush administration. None of the potential GOP nominees has the political skill, or the chutzpah, to do anything like a 180 on this issue once he wins the nomination. The best the Republicans can do is to point out, and correctly so, that they may be in favor of continuing the carnage in Iraq, but so are the Democrats. This will be remarkably easy if (when) Clinton is the nominee. After all, if one excludes Lieberman from consideration, it would be hard to find a Democratic senator who was more enthusiastic about the Iraq invasion than was Clinton. Furthermore, Clinton cannot constantly tell us how experienced and wise in the ways of Washington she is while at the same time arguing that she didn’t realize that the Iran resolution, which she recently voted for, was little more than a green light for George Bush to have his way in the former Persia.
Without a clear differentiation on the issue that will really count in 2008, the election will come down to personalities. With Clinton as their nominee, the Democrats will have a big problem in this department. Those who call Hillary Clinton polarizing are being charitable. If a person is polarizing, by definition she has large numbers of people who love her and large numbers of people who hate her. In the case of Hillary Clinton, she surely has large numbers of people who hate her and, curiously, fear her (See my earlier entry “An Inordinate Fear of Hillaryism.”), but the number of people who love her is dwindling as she deserts her base on the left in an attempt to seize the center from the Republicans. She is going to unite the disparate Republican constituencies behind the GOP nominee like no other Democratic nominee. Meanwhile, many of the true believers in the Democratic Party will be resentful of her apparent desertion of them on any number of issues, but especially on Iraq, and the great political center, with no clear choice on Iraq, will be put off by her, well, “Hillariness.”
A Democratic loss is by no means a foregone conclusion; a careful gambler who is not given odds would surely bet that Hillary Clinton will win the Democratic nomination and the presidency. And if the economy goes into the tank between now and election day (Regular readers of the Insightful Pontificator are well aware that I think this is a very distinct possibility.), Mike Gravel could be elected president as long as he kept the “D” after his name. But the legendary, and much clichéd, Democratic tendency to snatch defeat from the jaws of victory might just be rearing its head once again.
Saturday, November 24, 2007
Thursday, November 22, 2007
BLESSED AND GRATEFUL THANKSGIVING !!!
11/22/07
Here is a letter I sent to our local paper, The Naperville Sun, last Thanksgiving. Like most holiday messages, it is timeless:
11/19/06
The name of the national holiday we are about to celebrate is “Thanksgiving,” not “Turkey Day.”
Despite what modern American popular culture would have us believe, this holiday was not established in order to give us an excuse for gorging ourselves on turkey, watching football, and preparing for hyper-stressed Christmas shopping ordeals. It was established to give us a special opportunity to give thanks, to God if one is a believer, for the many blessings that have been rained down upon us, perhaps the most salient of which at Thanksgiving time is living in this great country, an island of prosperity, security, and freedom in a world in which poverty, danger, and oppression are often the norm.
Have a wonderful and blessed THANKSGIVNG day, year, and life.
Here is a letter I sent to our local paper, The Naperville Sun, last Thanksgiving. Like most holiday messages, it is timeless:
11/19/06
The name of the national holiday we are about to celebrate is “Thanksgiving,” not “Turkey Day.”
Despite what modern American popular culture would have us believe, this holiday was not established in order to give us an excuse for gorging ourselves on turkey, watching football, and preparing for hyper-stressed Christmas shopping ordeals. It was established to give us a special opportunity to give thanks, to God if one is a believer, for the many blessings that have been rained down upon us, perhaps the most salient of which at Thanksgiving time is living in this great country, an island of prosperity, security, and freedom in a world in which poverty, danger, and oppression are often the norm.
Have a wonderful and blessed THANKSGIVNG day, year, and life.
Wednesday, November 21, 2007
THE REAL CONSERVATIVE HAS STOOD UP
THE REAL CONSERVATIVE HAS STOOD UP
11/21/07
Today’s Wall Street Journal reports that Treasury Secretary Hank Paulson, a prominent member of the conservative, free market Bush administration, “is pressing the mortgage-service industry to help broad swaths of borrowers qualify for better loans instead of dealing with mortgage problems on a case by case basis.”
Mr. Paulson’s admonition is okay, I suppose, as far as it goes. But if it is good business to renegotiate terms of loans (We will leave discussion of the ability of mortgage servicers to renegotiate terms of loans that have been sliced and diced into pieces held by myriad unidentifiable ultimate lenders to another day.), why does the heavy hand of the federal government have to come into play? One wonders why, if the Bushmen really believe in the wisdom of the free markets, they suddenly feel the feds must tell the lenders how to conduct their business. If the best course of action is to adjust the terms of the loans, and write those loans down appropriately, surely the lenders will do so (if indeed the lenders can be found).
Mr. Paulson, the Journal reports,” faulted Congress for failing to pass several bills that could potentially provide relief for borrowers, and then took aim at a Republican senator who is holding up a piece of legislation that would allow the FHA to play a greater role in the cleanup.” It seems that Senator Tom Coburn, one of the few real conservatives remaining in the GOP, is concerned that such a scheme will result in the taxpayers’ being liable for risky loans that were, after all, freely negotiated by supposedly ready, willing, and able parties. He’s not all that enthusiastic, about putting the taxpayers on the hook for bad loans that they had nothing to do with in the first place. It appears that Senator Coburn has the crazy idea that frugal, financially conservative taxpayers who actually know something about managing money should not be forced to subsidize the often lavish lifestyles of people who insist on living over their heads and having other people pick up their bills when things don’t work out as well as they had supposed. What apostasy!
Mr. Paulson replied that he understood Senator Coburn’s concern. However, he said “This is not business as usual. This is an extraordinary situation.”
Maybe so. But one gets the nagging impression that, by “extraordinary,” Mr. Paulson does not mean “has the potential to devastate the economy and cause recession, or worse,” though that is true. No. One gets the impression that, given the GOP’s worldview, especially with the Bushites in charge, that what Mr. Paulson means by “extraordinary,” is that this is one of those really not all that extraordinary situations in which the wealthy are looking for a handout and that, therefore, the government must hop to it, right away, sir.
The modern GOP has no room for people like Mr. Coburn, who seem to really believe in small government (Well, at least in domestic affairs; Mr. Coburn’s enthusiastic support for the abominable Bush “foreign policy” indicates that even his enthusiasm for limited government ends at the seashore, but I digress.). As Mr. Paulson’s enthusiasm for a government bailout for those who got into ARMS with the mistaken supposition that “We can always refinance” and found out that, “Gee whiz, I guess real estate can go both ways,” shows, all that claptrap about “limited government” from the GOP rapidly goes over the side when their constituency, the well-off who ceaselessly extol the virtues of small government, need to reach into the taxpayers’ pockets for their share.
11/21/07
Today’s Wall Street Journal reports that Treasury Secretary Hank Paulson, a prominent member of the conservative, free market Bush administration, “is pressing the mortgage-service industry to help broad swaths of borrowers qualify for better loans instead of dealing with mortgage problems on a case by case basis.”
Mr. Paulson’s admonition is okay, I suppose, as far as it goes. But if it is good business to renegotiate terms of loans (We will leave discussion of the ability of mortgage servicers to renegotiate terms of loans that have been sliced and diced into pieces held by myriad unidentifiable ultimate lenders to another day.), why does the heavy hand of the federal government have to come into play? One wonders why, if the Bushmen really believe in the wisdom of the free markets, they suddenly feel the feds must tell the lenders how to conduct their business. If the best course of action is to adjust the terms of the loans, and write those loans down appropriately, surely the lenders will do so (if indeed the lenders can be found).
Mr. Paulson, the Journal reports,” faulted Congress for failing to pass several bills that could potentially provide relief for borrowers, and then took aim at a Republican senator who is holding up a piece of legislation that would allow the FHA to play a greater role in the cleanup.” It seems that Senator Tom Coburn, one of the few real conservatives remaining in the GOP, is concerned that such a scheme will result in the taxpayers’ being liable for risky loans that were, after all, freely negotiated by supposedly ready, willing, and able parties. He’s not all that enthusiastic, about putting the taxpayers on the hook for bad loans that they had nothing to do with in the first place. It appears that Senator Coburn has the crazy idea that frugal, financially conservative taxpayers who actually know something about managing money should not be forced to subsidize the often lavish lifestyles of people who insist on living over their heads and having other people pick up their bills when things don’t work out as well as they had supposed. What apostasy!
Mr. Paulson replied that he understood Senator Coburn’s concern. However, he said “This is not business as usual. This is an extraordinary situation.”
Maybe so. But one gets the nagging impression that, by “extraordinary,” Mr. Paulson does not mean “has the potential to devastate the economy and cause recession, or worse,” though that is true. No. One gets the impression that, given the GOP’s worldview, especially with the Bushites in charge, that what Mr. Paulson means by “extraordinary,” is that this is one of those really not all that extraordinary situations in which the wealthy are looking for a handout and that, therefore, the government must hop to it, right away, sir.
The modern GOP has no room for people like Mr. Coburn, who seem to really believe in small government (Well, at least in domestic affairs; Mr. Coburn’s enthusiastic support for the abominable Bush “foreign policy” indicates that even his enthusiasm for limited government ends at the seashore, but I digress.). As Mr. Paulson’s enthusiasm for a government bailout for those who got into ARMS with the mistaken supposition that “We can always refinance” and found out that, “Gee whiz, I guess real estate can go both ways,” shows, all that claptrap about “limited government” from the GOP rapidly goes over the side when their constituency, the well-off who ceaselessly extol the virtues of small government, need to reach into the taxpayers’ pockets for their share.
Saturday, November 17, 2007
HAPPY HOLIDAYS!!!
11/17/07
The Christmas season is starting, ever earlier each year…damn.
Jesus came and preached peace, selflessness, trust in Him and in His Father, a disavowal of materialism and the shallow attractions of this world, and regard for one’s fellow person. So how do we celebrate His birthday?
With tension, pressure, anxiety, and exhaustion. With utter selfishness embodied by the “gimme, gimme” mentality ever present in our society but especially keen at Christmas. With an “I’m gonna get it and no one is gonna stop me” mentality that leads to the “trampling at WalMart” stories each year. With a trust not in God but in our ability to use our efforts to get what we want in order to make ourselves and our kids happy (“You’re gonna have a perfect Christmas, kid, whether you like it or not.”) and to manipulate people with the gifts we give (“Make clear to your kids’ teachers that ‘We gift.’” Not only does this egregiously nescient ad completely distort Christmas, it butchers the English language, but I digress.). With a race to get or to give the most expensive, meaningless, vacuous geegaws we can in order to impress somebody with either our ability to spend, our utter lack of taste, or both. With digging ourselves deeper into debt (“Put in on the card…we can always refinance the house!” Uh oh.) in utterly futile attempts at enjoying, or providing, mostly for our own selfish gratification (“You’re right…all this crass materialism is silly, but it’s for the kids, you know.”), that perfect Christmas. In responding to idiotic ads the point of which seems to be that Christ’s birthday is the perfect time to show everyone how much we’ve utterly rejected His message by shamelessly displaying our wealth, which may or may not have been amassed honestly, morally, or even legally. With a grossly misplaced sense of priorities. (“Can you believe how long Mass was on Christmas Eve? I had to leave early to finish my Christmas shopping!” “Boy, that ‘Silent Night’ and all that other religious crap is depressing; why can’t they play some real Christmas music, like ‘Jingle Bell Rock.’?”).
In short, in modern America, and throughout much of the world, we celebrate Christ’s birthday by taking the opportunity to spit in His face. The only person who can be pleased by the way we celebrate Christmas (besides the millions who take the opportunity of Jesus’ birthday to rake in enormous profits by exploiting amorality, immorality, and imbecility) is Satan. You can almost hear the fallen angel: “Hey, look at that, Jesus…look what all those people are doing on YOUR birthday!!! Aren’t you happy you gave it all for those people! I told you they were no good! I told you they didn’t deserve it! You are such a fool!” Our ever patient Savior pays no heed but continues to do what He does best: He loves all of us unceasingly and unreservedly, perhaps even more so those who use His birthday to join Satan in mocking Him and His message.
If people want to engage in a veritable orgy of debauchery and self-indulgence at year end, that is their business. Our economy seems to depend on it, as it does on so many other rickety, jerry-rigged mechanisms of self-delusion. But I hope those who insist on displaying their vulgarity and ignorance at this time of year will leave Jesus out of it. I hope, vainly, that they don’t profane the name of our Savior by calling their annual bouts of self-destructive over-indulgence and anxiety “Christmas.” I hope people save that holy name for the activities that honor our Savior: the efforts people make to help the needy and forgotten, to comfort the afflicted, to let the true spirit of Christmas, the eternal message of salvation through faith in and love of our Savior manifested through service to others and worship of Him, to shine through at this time of year and always. Real Christmas takes place in church and the other places we attempt to conform our lives to the wishes of our loving God, not at the mall, the car dealer, or at the bar.
If people are intent on making a mockery of Christ, I pray they don’t call their doing so “Christmas.” Let them call it “the holidays” or some such other innocuous piece of puff and leave Jesus out of it. Reserve the name “Christmas” for true Christmas, which is not confined even to our ever expanding “Holiday Season.”
God bless you all at this Christmas season, and may this celebration of God’s love coming into our world never end for you.
The Christmas season is starting, ever earlier each year…damn.
Jesus came and preached peace, selflessness, trust in Him and in His Father, a disavowal of materialism and the shallow attractions of this world, and regard for one’s fellow person. So how do we celebrate His birthday?
With tension, pressure, anxiety, and exhaustion. With utter selfishness embodied by the “gimme, gimme” mentality ever present in our society but especially keen at Christmas. With an “I’m gonna get it and no one is gonna stop me” mentality that leads to the “trampling at WalMart” stories each year. With a trust not in God but in our ability to use our efforts to get what we want in order to make ourselves and our kids happy (“You’re gonna have a perfect Christmas, kid, whether you like it or not.”) and to manipulate people with the gifts we give (“Make clear to your kids’ teachers that ‘We gift.’” Not only does this egregiously nescient ad completely distort Christmas, it butchers the English language, but I digress.). With a race to get or to give the most expensive, meaningless, vacuous geegaws we can in order to impress somebody with either our ability to spend, our utter lack of taste, or both. With digging ourselves deeper into debt (“Put in on the card…we can always refinance the house!” Uh oh.) in utterly futile attempts at enjoying, or providing, mostly for our own selfish gratification (“You’re right…all this crass materialism is silly, but it’s for the kids, you know.”), that perfect Christmas. In responding to idiotic ads the point of which seems to be that Christ’s birthday is the perfect time to show everyone how much we’ve utterly rejected His message by shamelessly displaying our wealth, which may or may not have been amassed honestly, morally, or even legally. With a grossly misplaced sense of priorities. (“Can you believe how long Mass was on Christmas Eve? I had to leave early to finish my Christmas shopping!” “Boy, that ‘Silent Night’ and all that other religious crap is depressing; why can’t they play some real Christmas music, like ‘Jingle Bell Rock.’?”).
In short, in modern America, and throughout much of the world, we celebrate Christ’s birthday by taking the opportunity to spit in His face. The only person who can be pleased by the way we celebrate Christmas (besides the millions who take the opportunity of Jesus’ birthday to rake in enormous profits by exploiting amorality, immorality, and imbecility) is Satan. You can almost hear the fallen angel: “Hey, look at that, Jesus…look what all those people are doing on YOUR birthday!!! Aren’t you happy you gave it all for those people! I told you they were no good! I told you they didn’t deserve it! You are such a fool!” Our ever patient Savior pays no heed but continues to do what He does best: He loves all of us unceasingly and unreservedly, perhaps even more so those who use His birthday to join Satan in mocking Him and His message.
If people want to engage in a veritable orgy of debauchery and self-indulgence at year end, that is their business. Our economy seems to depend on it, as it does on so many other rickety, jerry-rigged mechanisms of self-delusion. But I hope those who insist on displaying their vulgarity and ignorance at this time of year will leave Jesus out of it. I hope, vainly, that they don’t profane the name of our Savior by calling their annual bouts of self-destructive over-indulgence and anxiety “Christmas.” I hope people save that holy name for the activities that honor our Savior: the efforts people make to help the needy and forgotten, to comfort the afflicted, to let the true spirit of Christmas, the eternal message of salvation through faith in and love of our Savior manifested through service to others and worship of Him, to shine through at this time of year and always. Real Christmas takes place in church and the other places we attempt to conform our lives to the wishes of our loving God, not at the mall, the car dealer, or at the bar.
If people are intent on making a mockery of Christ, I pray they don’t call their doing so “Christmas.” Let them call it “the holidays” or some such other innocuous piece of puff and leave Jesus out of it. Reserve the name “Christmas” for true Christmas, which is not confined even to our ever expanding “Holiday Season.”
God bless you all at this Christmas season, and may this celebration of God’s love coming into our world never end for you.
Friday, November 16, 2007
“ELIHU, WOULD YOU LOOFAH MY STRETCH MARKS?”
11/16/07
The 11/16/07 edition of The Wall Street Journal featured an article on page C1 arguing that the problems in the credit market have percolated down (one might think up, but that is another matter) into the municipal markets. According the to the article, the municipal bond market is experiencing problems because municipal bond insurers (Ambac, FGIC, etc.) have, in recent years, gotten into the business of insuring mortgage backed securities and CMOs. Bad move, obviously. The result has been the stocks’ of the insurers going into virtual free-fall and the credit ratings’ of the insurers coming into question. The ramifications for insured municipal bonds have been obvious.
This argument is good as far as it goes, but looks like another manifestation of the financial press and the financial “community” missing the bigger picture, as with their now faltering certainty that the problems in the mortgage markets are purely a “sub-prime” problem, the wrong-headedness of which has yet to become fully manifest. Yes, the insurers are having difficulty, and this is affecting the municipal market. But the consequences of the mortgage/real estate/credit market troubles for the municipal bond market are far broader.
Municipalities, of course, derive much of their revenue from property taxes, which have come under pressure as property values have fallen, and will continue to do so. The politicians, of course, will futz with the fuliginous formulae used to determine property taxes in order to keep revenue up as real estate values fall, but they will encounter strong, if not overwhelming, political resistance to doing so, especially in a weakening economy.
An even more direct, but less debilitating, impact of the mortgage/real estate problem on municipals is being, and will continue to be, felt through in real estate transfer taxes. In most municipalities, when one sells a house or other piece of property, one must pay a fee, usually several hundred or thousand dollars, to the municipality in which the property sold or property bought is located. The politicians have long found this an easy source of revenue; when people are in the heat of transactions involving several hundred thousand dollars, they barely notice a fee of perhaps a thousand or so. This fee has grown into a major source of municipal revenue. As the real estate market, er, slows down, revenue from this fee has been dramatically reduced. In Chicago, the drastic reduction in such fees has been cited as a major reason for Mayor Daley’s huge property, and other, tax increase. No matter what the Mayor says, the tax increase had little if anything to do with libraries, but I digress.
The big problem in the muni market is just beginning to be felt and, admittedly, is not part of the market’s immediate difficulties but will be far greater as it comes to fruition. This problem is public sector pensions. Our local government employees get perhaps the most generous pensions, on a percentage basis, of anyone in the country. Just about anyone, for instance, knows a cop, teacher, fireman, or just a local bureaucrat who has retired in his or her early 50s on an astronomical percentage (70%-80%) of his or her salary. One of the less shocking aspects of the Drew Peterson story is that the scrofulous Mr. Peterson is now receiving a pension of $72,000 per year after “retiring” at the age of 53 from the Bolingbrook Police Department. And, for those readers not familiar with the Chicago area, Bolingbrook, while not Mayberry, is not exactly tough duty for a cop. These huge and growing pension obligations are consuming an ever greater share of municipal budgets and thus of residents’ property tax bills. Back in the days when local government workers were somewhat underpaid relative to their private sector colleagues and a large percentage of the taxpayers had defined benefit pension plans, the taxpayers, while never happy about paying taxes, were less hesitant to pay real estate taxes to support rich defined benefit plans for municipal workers. But now that local government workers salaries’ are getting higher, pensions are getting ever richer, and the defined benefit pension plan is going the way of the pterodactyl in the private sector, property taxpayers are getting more and more resistant to paying their growing real estate bills when an ever growing portion of those bills is going to fund pension benefits of which they can only dream. This resistance has the potential to turn into outright rebellion as property tax bills continue to skyrocket, local services deteriorate, or both. While not being the immediate source of problems in the muni bond market, this is going to result in a crisis in municipal budgets in the very near future.
So, yes, the problems with muni bond insurers are having a negative impact on the muni market. But the impact of the credit market debacle on the muni market is far wider and deeper, and far larger problems are looming.
The 11/16/07 edition of The Wall Street Journal featured an article on page C1 arguing that the problems in the credit market have percolated down (one might think up, but that is another matter) into the municipal markets. According the to the article, the municipal bond market is experiencing problems because municipal bond insurers (Ambac, FGIC, etc.) have, in recent years, gotten into the business of insuring mortgage backed securities and CMOs. Bad move, obviously. The result has been the stocks’ of the insurers going into virtual free-fall and the credit ratings’ of the insurers coming into question. The ramifications for insured municipal bonds have been obvious.
This argument is good as far as it goes, but looks like another manifestation of the financial press and the financial “community” missing the bigger picture, as with their now faltering certainty that the problems in the mortgage markets are purely a “sub-prime” problem, the wrong-headedness of which has yet to become fully manifest. Yes, the insurers are having difficulty, and this is affecting the municipal market. But the consequences of the mortgage/real estate/credit market troubles for the municipal bond market are far broader.
Municipalities, of course, derive much of their revenue from property taxes, which have come under pressure as property values have fallen, and will continue to do so. The politicians, of course, will futz with the fuliginous formulae used to determine property taxes in order to keep revenue up as real estate values fall, but they will encounter strong, if not overwhelming, political resistance to doing so, especially in a weakening economy.
An even more direct, but less debilitating, impact of the mortgage/real estate problem on municipals is being, and will continue to be, felt through in real estate transfer taxes. In most municipalities, when one sells a house or other piece of property, one must pay a fee, usually several hundred or thousand dollars, to the municipality in which the property sold or property bought is located. The politicians have long found this an easy source of revenue; when people are in the heat of transactions involving several hundred thousand dollars, they barely notice a fee of perhaps a thousand or so. This fee has grown into a major source of municipal revenue. As the real estate market, er, slows down, revenue from this fee has been dramatically reduced. In Chicago, the drastic reduction in such fees has been cited as a major reason for Mayor Daley’s huge property, and other, tax increase. No matter what the Mayor says, the tax increase had little if anything to do with libraries, but I digress.
The big problem in the muni market is just beginning to be felt and, admittedly, is not part of the market’s immediate difficulties but will be far greater as it comes to fruition. This problem is public sector pensions. Our local government employees get perhaps the most generous pensions, on a percentage basis, of anyone in the country. Just about anyone, for instance, knows a cop, teacher, fireman, or just a local bureaucrat who has retired in his or her early 50s on an astronomical percentage (70%-80%) of his or her salary. One of the less shocking aspects of the Drew Peterson story is that the scrofulous Mr. Peterson is now receiving a pension of $72,000 per year after “retiring” at the age of 53 from the Bolingbrook Police Department. And, for those readers not familiar with the Chicago area, Bolingbrook, while not Mayberry, is not exactly tough duty for a cop. These huge and growing pension obligations are consuming an ever greater share of municipal budgets and thus of residents’ property tax bills. Back in the days when local government workers were somewhat underpaid relative to their private sector colleagues and a large percentage of the taxpayers had defined benefit pension plans, the taxpayers, while never happy about paying taxes, were less hesitant to pay real estate taxes to support rich defined benefit plans for municipal workers. But now that local government workers salaries’ are getting higher, pensions are getting ever richer, and the defined benefit pension plan is going the way of the pterodactyl in the private sector, property taxpayers are getting more and more resistant to paying their growing real estate bills when an ever growing portion of those bills is going to fund pension benefits of which they can only dream. This resistance has the potential to turn into outright rebellion as property tax bills continue to skyrocket, local services deteriorate, or both. While not being the immediate source of problems in the muni bond market, this is going to result in a crisis in municipal budgets in the very near future.
So, yes, the problems with muni bond insurers are having a negative impact on the muni market. But the impact of the credit market debacle on the muni market is far wider and deeper, and far larger problems are looming.
Tuesday, November 13, 2007
BACK TO THE CARS…FOR A MOMENT
BACK TO THE CARS…FOR A MOMENT
11/13/07
A few days ago, a friend asked me what I thought of GM. I wrote the following reply. I realized later that it has been months since I have discussed the car business, formerly a regular feature of my blog, in the IP.
So here are my current thoughts on GM, as related to my buddy a few days ago:
11/9/07
No, I don’t like GM here. In fact, I just closed a put position yesterday at an enormous profit. I closed it not because I am enthusiastic about GM now, but only because I found it prudent to take a profit. I've hurt myself too many times in the past being a pig.
Why not GM?
--If we reach 16mm light vehicle sales in the U.S. this year, that will be a lot. That will make it very tough to make money in the car business.
--GM didn't get enough on the Jobs Bank in the new contract. They are coming at the problem in a different way; i.e., by reducing head count, but labor remains a fixed cost and thus there is too much incentive to overproduction, the bane of the Big 3. If GM can really limit production of the Enclave/Acadia/Outlook, I'll be impressed. But I'm not betting they will be able to do so.
--More problems will arise at ResCap.
--More auto credit problems will arise at GMAC.
--I hate the stock market, and the economy here.
--The mortgage problems, as I have said on my blog months ago, are not limited to sub-prime loans. Home equity loans have been a huge source of car financing, and that spigot has been shut. This will especially hurt GM in its expensive and big profit SUVs and Caddies.
All that having been said, when things shake out in the economy (a couple years), and I am looking for a car company to buy, GM will be near the top of the list, right after F. (I love the article in the WSJ today saying "no one" anticipated F's being closer to profitability than GM. Apparently, I am nobody. See my old IWCs, and note that I held onto a piece of F when I dumped GM at about $31 way back when. But I digress.) Product is very good. The contract, other than the Jobs Bank problem, was a good one. Its best feature may have been aligning the interests of the UAW with those of GM by putting so much stock in the VEBA. F, by the way, was able to fund its VEBA with an even greater proportion of stock.
GM is making a lot of progress, but not enough to counter some industry/economy/financial headwinds.
11/13/07
A few days ago, a friend asked me what I thought of GM. I wrote the following reply. I realized later that it has been months since I have discussed the car business, formerly a regular feature of my blog, in the IP.
So here are my current thoughts on GM, as related to my buddy a few days ago:
11/9/07
No, I don’t like GM here. In fact, I just closed a put position yesterday at an enormous profit. I closed it not because I am enthusiastic about GM now, but only because I found it prudent to take a profit. I've hurt myself too many times in the past being a pig.
Why not GM?
--If we reach 16mm light vehicle sales in the U.S. this year, that will be a lot. That will make it very tough to make money in the car business.
--GM didn't get enough on the Jobs Bank in the new contract. They are coming at the problem in a different way; i.e., by reducing head count, but labor remains a fixed cost and thus there is too much incentive to overproduction, the bane of the Big 3. If GM can really limit production of the Enclave/Acadia/Outlook, I'll be impressed. But I'm not betting they will be able to do so.
--More problems will arise at ResCap.
--More auto credit problems will arise at GMAC.
--I hate the stock market, and the economy here.
--The mortgage problems, as I have said on my blog months ago, are not limited to sub-prime loans. Home equity loans have been a huge source of car financing, and that spigot has been shut. This will especially hurt GM in its expensive and big profit SUVs and Caddies.
All that having been said, when things shake out in the economy (a couple years), and I am looking for a car company to buy, GM will be near the top of the list, right after F. (I love the article in the WSJ today saying "no one" anticipated F's being closer to profitability than GM. Apparently, I am nobody. See my old IWCs, and note that I held onto a piece of F when I dumped GM at about $31 way back when. But I digress.) Product is very good. The contract, other than the Jobs Bank problem, was a good one. Its best feature may have been aligning the interests of the UAW with those of GM by putting so much stock in the VEBA. F, by the way, was able to fund its VEBA with an even greater proportion of stock.
GM is making a lot of progress, but not enough to counter some industry/economy/financial headwinds.
Sunday, November 11, 2007
SHORT AMERICA!
11/7/07
This is an excerpted (and slightly enhanced) note I sent to a good friend in response to his inquiries and FASB 157 and my outlook on the market and on things in general:
11/11/07
I know very little about FASB 157, other than that it's going to cause a lot of write-downs and mandate a lot of transparency in areas that he financial guys would rather leave opaque. I just wonder how these guys are going to come up with defensible values, especially for Level 3 assets. I would suppose the FASB would look askance at marking to model.
People have forgotten how bad bear markets, and recessions, can be. I saw an older guy at a party last night who swears by Bob Brinker, and Brinker says things are going to be just fine, that we still have plenty of upside. The guy told me he's sticking with Brinker and staying just about fully invested; he's in his late 60s. I told him that, despite Brinker's phenomenal record, there's a first time for everything. I just don't press things any more. People can ask for my advice, I give them my opinion, and leave it at that. There isn't any percentage in doing any more.
It seems like all the "experts" are telling us the same old story, that everything will be fine in the long run, that you just "have to be in stocks for the long run." I, on the other hand, simply don't believe in this country any more, its corporate leaders, its financial leaders, its political leaders, and, most sadly, its people. Further, even if we had all the best people in the right places, we have a lot of years of profligacy and decadent overspending to work our way out of, and it's going to be a long, hard slog. As a people, I don't think we have the heart for it any more. So after the coming crash, when I am going to look to put some money back in the equity markets, I am going to be heavily invested overseas. As an American who loves his country, or at least loves what his country once was, it's hard to say that. But we've become a nation of mind-addled, consumption driven, irresponsible nihilists. Those in charge are there not because they have transcended the rot that has permeated our society, but because they have abetted it. There's no future in that.
I know the old expression: don't sell America short. It's practically a sacrilege to say this, but I think it's well past time to get very short this once great country. The role we play on the world economic stage, that of consumer of first, last, and always resort, whose chief industries are financial services (i.e., figuring out a way to get other people to pay our bills) and entertainment (i.e., poisoning everyone else’s culture with the jejune excerebrosity we call movies and television) can easily be filled by just about anyone else with a surfeit of pomposity, a shortage of shame, and an ample bankroll, built up by the thrift, virtue, and wisdom of our ancestors, to squander on stultifying self-indulgence. It’s over for this once greatest of all nations, and we have no one but ourselves to blame.
This is an excerpted (and slightly enhanced) note I sent to a good friend in response to his inquiries and FASB 157 and my outlook on the market and on things in general:
11/11/07
I know very little about FASB 157, other than that it's going to cause a lot of write-downs and mandate a lot of transparency in areas that he financial guys would rather leave opaque. I just wonder how these guys are going to come up with defensible values, especially for Level 3 assets. I would suppose the FASB would look askance at marking to model.
People have forgotten how bad bear markets, and recessions, can be. I saw an older guy at a party last night who swears by Bob Brinker, and Brinker says things are going to be just fine, that we still have plenty of upside. The guy told me he's sticking with Brinker and staying just about fully invested; he's in his late 60s. I told him that, despite Brinker's phenomenal record, there's a first time for everything. I just don't press things any more. People can ask for my advice, I give them my opinion, and leave it at that. There isn't any percentage in doing any more.
It seems like all the "experts" are telling us the same old story, that everything will be fine in the long run, that you just "have to be in stocks for the long run." I, on the other hand, simply don't believe in this country any more, its corporate leaders, its financial leaders, its political leaders, and, most sadly, its people. Further, even if we had all the best people in the right places, we have a lot of years of profligacy and decadent overspending to work our way out of, and it's going to be a long, hard slog. As a people, I don't think we have the heart for it any more. So after the coming crash, when I am going to look to put some money back in the equity markets, I am going to be heavily invested overseas. As an American who loves his country, or at least loves what his country once was, it's hard to say that. But we've become a nation of mind-addled, consumption driven, irresponsible nihilists. Those in charge are there not because they have transcended the rot that has permeated our society, but because they have abetted it. There's no future in that.
I know the old expression: don't sell America short. It's practically a sacrilege to say this, but I think it's well past time to get very short this once great country. The role we play on the world economic stage, that of consumer of first, last, and always resort, whose chief industries are financial services (i.e., figuring out a way to get other people to pay our bills) and entertainment (i.e., poisoning everyone else’s culture with the jejune excerebrosity we call movies and television) can easily be filled by just about anyone else with a surfeit of pomposity, a shortage of shame, and an ample bankroll, built up by the thrift, virtue, and wisdom of our ancestors, to squander on stultifying self-indulgence. It’s over for this once greatest of all nations, and we have no one but ourselves to blame.
Saturday, November 10, 2007
NO ONE (?) SAW THIS ONE COMING
11/10/07
Today’s Wall Street Journal contained reports on third quarter losses at Fannie Mae (page A2) and at Wachovia (page A3). Both institutions, obviously, attribute most of their problems to “unforeseen” bogeymen.
Fannie, the Journal reports, had modest holdings of sub-prime loans. However, the Journal goes on to report
“While defaults on subprime loans, those to people with weak credit records, are soaring, delayed payments and foreclosures on prime loans also have started to rise from the unusually low levels of recent years.”
Wachovia, the Journal reports, attributed much of its latest write down to deterioration in the value of “super senior” CDOs. (Note here that the seniority of tranches in a CDO has little or nothing to do with the credit quality of the collateral in that CDO, lest anyone think I am trying to equate the “sudden, unexpected” super senior problem with the “sudden, unexpected” deterioration in prime loans. But the deterioration of both super senior CDOs and prime loans are obviously part of the same problem.) The Journal then goes on to quote Amy Brinkley, Bank of America’s chief risk officer, as saying
“There are some aspects of what are (sic) going on that we fully expected in terms of correction (sic). But I don’t know that anyone expected the degree to which liquidity would lock up.”
No one expected this? Well, we all know what Ms. Brinkley and her fellow highly paid Wall Streeters weren’t reading. Below are citations from the Insightful Pontificator from earlier, in one case much earlier, in the year:
3/14/07
(from a note I sent to a friend with whom I share ideas in response to a post in a newsletter he receives):
As you might guess, I don’t share the writer’s sanguinity. As I say in the body of this letter, wait until the market discovers (It will, of course, be shocked to learn this because “nobody” could have foreseen such a development.) that the problems in our nation’s mortgage portfolio are not limited to SUB-PRIME mortgages.
We have only begun to see the difficulties that permeate our “don’t worry, be happy” financial system.
Yeah, the model portfolios outperformed a lousy market, which is cold consolation. I understand relative performance; I made my living on it back when I almost was somebody and even now use it as an excuse when people with whom I work don't do as well as they expected, but it makes little sense to the average person. I had a great day yesterday, owing to my put positions, my short positions, and my TIPs positions. Making money, and not losing money, is what matters to most people.
I'll be interested to see how this guy contorts himself as the crap REALLY hits the fan with this market. Wait 'til the market finds out (I can predict what the "experts" will say: "No one could have seen this coming." Well, someone did, and now you know who.) that it is not only sub-prime mortgages that are a problem, but that the "high quality" paper isn't as high quality as the deep thinkers supposed. Meanwhile, it looks like we MIGHT get a day's reprieve today.
8/19/07
Like anyone else, I could be wrong here, but this problem appears to be far from over. As I said in my 3/14/07 post, wait until it becomes apparent to the financial wunderkinds who have seized control of our economy that this problem is by no means limited to sub-prime mortgages. The truly exotic mortgage products (the interest only loans, negative amortization loans, etc.) were almost exclusively prime, or at least Alt-A, loans. Look around your neighborhood and at your neighbors’ spending habits and tell me with assurance that all these loans are just fine. And if the Fed continues to do the wrong thing, attempting to continue the decades long practice of socializing the risk while privatizing the profits, things could get worse…a LOT worse.
No one indeed. Well, at least no one outside the myopic club of financial insiders.
Today’s Wall Street Journal contained reports on third quarter losses at Fannie Mae (page A2) and at Wachovia (page A3). Both institutions, obviously, attribute most of their problems to “unforeseen” bogeymen.
Fannie, the Journal reports, had modest holdings of sub-prime loans. However, the Journal goes on to report
“While defaults on subprime loans, those to people with weak credit records, are soaring, delayed payments and foreclosures on prime loans also have started to rise from the unusually low levels of recent years.”
Wachovia, the Journal reports, attributed much of its latest write down to deterioration in the value of “super senior” CDOs. (Note here that the seniority of tranches in a CDO has little or nothing to do with the credit quality of the collateral in that CDO, lest anyone think I am trying to equate the “sudden, unexpected” super senior problem with the “sudden, unexpected” deterioration in prime loans. But the deterioration of both super senior CDOs and prime loans are obviously part of the same problem.) The Journal then goes on to quote Amy Brinkley, Bank of America’s chief risk officer, as saying
“There are some aspects of what are (sic) going on that we fully expected in terms of correction (sic). But I don’t know that anyone expected the degree to which liquidity would lock up.”
No one expected this? Well, we all know what Ms. Brinkley and her fellow highly paid Wall Streeters weren’t reading. Below are citations from the Insightful Pontificator from earlier, in one case much earlier, in the year:
3/14/07
(from a note I sent to a friend with whom I share ideas in response to a post in a newsletter he receives):
As you might guess, I don’t share the writer’s sanguinity. As I say in the body of this letter, wait until the market discovers (It will, of course, be shocked to learn this because “nobody” could have foreseen such a development.) that the problems in our nation’s mortgage portfolio are not limited to SUB-PRIME mortgages.
We have only begun to see the difficulties that permeate our “don’t worry, be happy” financial system.
Yeah, the model portfolios outperformed a lousy market, which is cold consolation. I understand relative performance; I made my living on it back when I almost was somebody and even now use it as an excuse when people with whom I work don't do as well as they expected, but it makes little sense to the average person. I had a great day yesterday, owing to my put positions, my short positions, and my TIPs positions. Making money, and not losing money, is what matters to most people.
I'll be interested to see how this guy contorts himself as the crap REALLY hits the fan with this market. Wait 'til the market finds out (I can predict what the "experts" will say: "No one could have seen this coming." Well, someone did, and now you know who.) that it is not only sub-prime mortgages that are a problem, but that the "high quality" paper isn't as high quality as the deep thinkers supposed. Meanwhile, it looks like we MIGHT get a day's reprieve today.
8/19/07
Like anyone else, I could be wrong here, but this problem appears to be far from over. As I said in my 3/14/07 post, wait until it becomes apparent to the financial wunderkinds who have seized control of our economy that this problem is by no means limited to sub-prime mortgages. The truly exotic mortgage products (the interest only loans, negative amortization loans, etc.) were almost exclusively prime, or at least Alt-A, loans. Look around your neighborhood and at your neighbors’ spending habits and tell me with assurance that all these loans are just fine. And if the Fed continues to do the wrong thing, attempting to continue the decades long practice of socializing the risk while privatizing the profits, things could get worse…a LOT worse.
No one indeed. Well, at least no one outside the myopic club of financial insiders.
Friday, November 9, 2007
THESE POOR PEOPLE NEED OUR HELP!!!
11/9/07
So Ben the Nursemaid of Wall Street is not satisfied providing ample supplies of mother’s milk to his tough guy sucklings in the form of ample credit. Yesterday, he proposed, get this, having the federal government (for a fee—a market based fee, I’m sure) guarantee mortgages of up to $1mm (One million dollars!!!) so that those mortgages can be packaged into securities (by Fannie and Freddie) and sold to investors. Why? Because Fannie and Freddie are currently not allowed to buy and package mortgages over $417,000.
So…
We as taxpayers are supposed to guarantee mortgages of up to $1mm. It seems that those who are (or were) wealthy enough to qualify for $1mm mortgages somehow were misled, planned poorly, or otherwise miscalculated, turning these mortgages into toxic waste. (Those of you who continue to argue that we still live in a free market society in which people generate wealth and make money because they are smart and work hard, not because they are in “the club” or are able to hornswoggle an increasingly bewildered and idiotic consuming and voting public, please explain this to me. Oh, I get it…these masters of the universe were misled by slick mortgage “consultants”…yeah, that’s the ticket! It’s the salesman’s fault! Why, these “affluent homeowners” are mere innocents, putty in the hands of slick salesmen (who were selling shoes, or fast food, a week before becoming mortgage “consultants”)! But I digress.) The Wall Street types who bought the paper backing the mortgages (and who laughingly dismissed the warnings of us alarmist types “Ha! These aren’t sub-prime loans; these are loans to the good people, the wealthy people, the people who make America work! And, with the bustling economy, they can’t miss!!! Ha! Ha! Ha!” But I digress again.) are seeing (sniff!) losses from their bad positions. So Ben must ride to the rescue!!! After all, his job is to protect the Masters of the Universe, who make our economy work.
But of course we as taxpayers will be getting a fee. And if the borrowers default, we will be able to seize the collateral. So the taxpayers are fine, right? But if this were such a good deal, why is a government guarantee necessary? If the collateral is so good, why aren’t traders, distressed or otherwise, all over these troubled loans? Oh, I forgot. The distressed guys will only do a deal with a backstop. As Zay N. Smith (“QT” in the Chicago Sun-Times) might say, add “distressed investing” to the list of things that isn’t what it used to be. The Bernanke “plan” is a subsidy both to wealthy (and overextended) homeowners and to the “bold and swashbuckling” traders who got caught in increasingly malodorous positions and are now scrambling to hide behind Mother Ben’s apron.
Further, let us assume this scheme passes a financially and economically illiterate Congress. The federal government (i.e., you and I) end up guaranteeing $1mm mortgage loans. Borrowers default. The government honors its guarantee and assumes the mortgages (properly understood, i.e., the security interests in the homes). Does anyone think that the government will be able to foreclose? Can you imagine the pressure on the government to renegotiate with “troubled homeowners” (with $1mm mortgages)?
The Democrats, of course, think this is a fine idea. Chucky Schumer says he will introduce a bill incorporating Breanne’s suggestion very soon. “I think it’s a good idea,” Chucky said. Rep. Caroline Maloney, a Democrat from that bastion of poverty, Long Island, who chairs the relevant subcommittee in the House, is also hopping on this bandwagon. So the next time the Democrats tell you they are the party of the working person, throw this back in their face. They are at least as meretricious as the Republicans, looking for any excuse to expand government and mollify anyone who can write a check for a “campaign contribution.”
So Ben the Nursemaid of Wall Street is not satisfied providing ample supplies of mother’s milk to his tough guy sucklings in the form of ample credit. Yesterday, he proposed, get this, having the federal government (for a fee—a market based fee, I’m sure) guarantee mortgages of up to $1mm (One million dollars!!!) so that those mortgages can be packaged into securities (by Fannie and Freddie) and sold to investors. Why? Because Fannie and Freddie are currently not allowed to buy and package mortgages over $417,000.
So…
We as taxpayers are supposed to guarantee mortgages of up to $1mm. It seems that those who are (or were) wealthy enough to qualify for $1mm mortgages somehow were misled, planned poorly, or otherwise miscalculated, turning these mortgages into toxic waste. (Those of you who continue to argue that we still live in a free market society in which people generate wealth and make money because they are smart and work hard, not because they are in “the club” or are able to hornswoggle an increasingly bewildered and idiotic consuming and voting public, please explain this to me. Oh, I get it…these masters of the universe were misled by slick mortgage “consultants”…yeah, that’s the ticket! It’s the salesman’s fault! Why, these “affluent homeowners” are mere innocents, putty in the hands of slick salesmen (who were selling shoes, or fast food, a week before becoming mortgage “consultants”)! But I digress.) The Wall Street types who bought the paper backing the mortgages (and who laughingly dismissed the warnings of us alarmist types “Ha! These aren’t sub-prime loans; these are loans to the good people, the wealthy people, the people who make America work! And, with the bustling economy, they can’t miss!!! Ha! Ha! Ha!” But I digress again.) are seeing (sniff!) losses from their bad positions. So Ben must ride to the rescue!!! After all, his job is to protect the Masters of the Universe, who make our economy work.
But of course we as taxpayers will be getting a fee. And if the borrowers default, we will be able to seize the collateral. So the taxpayers are fine, right? But if this were such a good deal, why is a government guarantee necessary? If the collateral is so good, why aren’t traders, distressed or otherwise, all over these troubled loans? Oh, I forgot. The distressed guys will only do a deal with a backstop. As Zay N. Smith (“QT” in the Chicago Sun-Times) might say, add “distressed investing” to the list of things that isn’t what it used to be. The Bernanke “plan” is a subsidy both to wealthy (and overextended) homeowners and to the “bold and swashbuckling” traders who got caught in increasingly malodorous positions and are now scrambling to hide behind Mother Ben’s apron.
Further, let us assume this scheme passes a financially and economically illiterate Congress. The federal government (i.e., you and I) end up guaranteeing $1mm mortgage loans. Borrowers default. The government honors its guarantee and assumes the mortgages (properly understood, i.e., the security interests in the homes). Does anyone think that the government will be able to foreclose? Can you imagine the pressure on the government to renegotiate with “troubled homeowners” (with $1mm mortgages)?
The Democrats, of course, think this is a fine idea. Chucky Schumer says he will introduce a bill incorporating Breanne’s suggestion very soon. “I think it’s a good idea,” Chucky said. Rep. Caroline Maloney, a Democrat from that bastion of poverty, Long Island, who chairs the relevant subcommittee in the House, is also hopping on this bandwagon. So the next time the Democrats tell you they are the party of the working person, throw this back in their face. They are at least as meretricious as the Republicans, looking for any excuse to expand government and mollify anyone who can write a check for a “campaign contribution.”
Thursday, November 8, 2007
AN EVER VIGILANT CENTRAL BANK
11/8/07
While reading the otherwise decent page A1 article in today’s Wall Street Journal concerning the sources and origins of yesterday’s (i.e., 11/7’s) stock market debacle, I ran across a curious sentence:
“Central banks are acutely aware of the danger posed by inflation, and declare their readiness to move quickly to combat it.”
Huh? Perhaps this argument could be made of the ECB, or even the BOJ, but the Fed? Lately, every time the legion of stentorian mouthpieces for Wall Street that inhabit our financial media begin to wail that the tough guy traders are suffering so much as a hangnail (These are the same bold free marketeers that tell the blue collar guys (but never to their faces) who lose their jobs to globalization that they ought to suck it up; it’s the wondrous “free market” at work. Besides, these seven and eight figure wise men tell us, the working types deserve it because they are asking too much money for their 8-12 hours of back breaking labor per day. They ought to learn to do something more productive, like putting on ill-advised positions that cripple major financial institutions. But I digress.), the Bernanke Fed has stood ready to provide generous succor in the form of an endless supply of credit in order to “stabilize the markets.”
The Bernanke Fed says it is sensitive to the dangers posed by incipient inflation and a falling dollar. But, by what it does, it demonstrates that it is far more sensitive to the human suffering that will result from Wall Street bigwigs’ having to suffer the ignominy of losing their jobs with seven or eight figure exit packages due to their boneheaded trades, which suddenly have become the responsibility of all of us. Think of the fallout! What, by God, will happen to sales at Neiman Marcus, Tiffany’s, and Mikimoto? We have to act!
The Fed (and the “free market” Republican administration) sees its job as follows: Socialize the risk, privatize the profit, and prop up the wise men who “make our economy work.” Let the working stiff deal with the rising prices of food and gasoline (They don’t count anyway.) and the consequences for the economy of the games Wall Street plays.
And people wonder why the markets, our economy, and our society are in trouble.
While reading the otherwise decent page A1 article in today’s Wall Street Journal concerning the sources and origins of yesterday’s (i.e., 11/7’s) stock market debacle, I ran across a curious sentence:
“Central banks are acutely aware of the danger posed by inflation, and declare their readiness to move quickly to combat it.”
Huh? Perhaps this argument could be made of the ECB, or even the BOJ, but the Fed? Lately, every time the legion of stentorian mouthpieces for Wall Street that inhabit our financial media begin to wail that the tough guy traders are suffering so much as a hangnail (These are the same bold free marketeers that tell the blue collar guys (but never to their faces) who lose their jobs to globalization that they ought to suck it up; it’s the wondrous “free market” at work. Besides, these seven and eight figure wise men tell us, the working types deserve it because they are asking too much money for their 8-12 hours of back breaking labor per day. They ought to learn to do something more productive, like putting on ill-advised positions that cripple major financial institutions. But I digress.), the Bernanke Fed has stood ready to provide generous succor in the form of an endless supply of credit in order to “stabilize the markets.”
The Bernanke Fed says it is sensitive to the dangers posed by incipient inflation and a falling dollar. But, by what it does, it demonstrates that it is far more sensitive to the human suffering that will result from Wall Street bigwigs’ having to suffer the ignominy of losing their jobs with seven or eight figure exit packages due to their boneheaded trades, which suddenly have become the responsibility of all of us. Think of the fallout! What, by God, will happen to sales at Neiman Marcus, Tiffany’s, and Mikimoto? We have to act!
The Fed (and the “free market” Republican administration) sees its job as follows: Socialize the risk, privatize the profit, and prop up the wise men who “make our economy work.” Let the working stiff deal with the rising prices of food and gasoline (They don’t count anyway.) and the consequences for the economy of the games Wall Street plays.
And people wonder why the markets, our economy, and our society are in trouble.
Tuesday, November 6, 2007
DON’T VOTE!!!
11/6/07
Traditionally, the presidential election season would be starting about now, with the first few candidates putting out feelers and testing the waters, trying to decide whether to set up shop in Iowa and New Hampshire. With the “new and improved” professional politics of the last few elections, and especially of the upcoming race, we have been at it for at least a year now. Political junkies exult; normal people with lives to lead grow tired. I digress.
With the expedited Iowa caucuses and New Hampshire primary upon us, and the very high probability that the nominations will be decided by early February, we will soon be hit with the incessant pleas to “Get out and vote!” We should do our “patriotic duty,” our bit for self-government, we are told. But I am telling people not to vote.
Most of the American electorate, or potential electorate, is pathetically ill-equipped to vote intelligently. Most Americans of voting age should not vote. People who spend hours anesthisizing their brains with network prime time television, even network news, which is little more than a treacly amalgam of puff pieces, should stay home on election day. Those who never pick up a newspaper, or never read beyond the sport or “living” sections, should not vote. Those who consider being informed keeping abreast of Brittany Spears’ latest child custody battles should not vote. Those who can’t be bothered to know the names of their U.S. senators, let alone their Congressperson, should not vote. Those who select their candidates based on the likeability of their spouses should not vote.
I liken self-government (not “democracy;” those who think we live in a democracy should not vote) to a household job, say cutting one’s lawn. One can hire someone to do it for him and leave it at that. Or one can elect to do it one’s self, to tune up the mower each year and go out at least weekly and keep the lawn looking good. The former is easy, the latter is hard. The same can be said of self-government. The Founding Fathers decided, and the electorate at the time agreed, that government should be a do-it-yourself proposition. Like any do-it-yourself proposition, self-government involved some work. What was that work? Keeping informed. Following the issues. Knowing something about history and civics. Knowing something about the structure of our government and society and the struggles involved in bringing it about. Self-government involves a lot more than the seemingly backbreaking task of spending fifteen minutes at the voting booth on election day casting one’s ballots for candidates based on the mellifluousness of their names. We could have someone else do it for us; throughout most of history, that is how it has been done, with decidedly mixed results. Our founding fathers, however, thought self-government would be better. Modern Americans have decided that self-government, sans the effort involved, would be the best.
If you are a regular reader of the Insightful Pontificator, you are by definition better informed than at least 90% of the electorate. Even your desire to read such blogs indicates the kind of curiosity that self-government demands. You should vote. But please don’t get caught up in these banausic efforts to get those whose idea of news is Paris Hilton’s efforts to adopt blonde babies in Nigeria or some such vacuous nonsense to vote. Tell those hebetudinous types in your circle of acquaintances to do their bit for the country they take for granted and stay home on election day. Their doing otherwise merely dilutes the votes of those of us who care.
Traditionally, the presidential election season would be starting about now, with the first few candidates putting out feelers and testing the waters, trying to decide whether to set up shop in Iowa and New Hampshire. With the “new and improved” professional politics of the last few elections, and especially of the upcoming race, we have been at it for at least a year now. Political junkies exult; normal people with lives to lead grow tired. I digress.
With the expedited Iowa caucuses and New Hampshire primary upon us, and the very high probability that the nominations will be decided by early February, we will soon be hit with the incessant pleas to “Get out and vote!” We should do our “patriotic duty,” our bit for self-government, we are told. But I am telling people not to vote.
Most of the American electorate, or potential electorate, is pathetically ill-equipped to vote intelligently. Most Americans of voting age should not vote. People who spend hours anesthisizing their brains with network prime time television, even network news, which is little more than a treacly amalgam of puff pieces, should stay home on election day. Those who never pick up a newspaper, or never read beyond the sport or “living” sections, should not vote. Those who consider being informed keeping abreast of Brittany Spears’ latest child custody battles should not vote. Those who can’t be bothered to know the names of their U.S. senators, let alone their Congressperson, should not vote. Those who select their candidates based on the likeability of their spouses should not vote.
I liken self-government (not “democracy;” those who think we live in a democracy should not vote) to a household job, say cutting one’s lawn. One can hire someone to do it for him and leave it at that. Or one can elect to do it one’s self, to tune up the mower each year and go out at least weekly and keep the lawn looking good. The former is easy, the latter is hard. The same can be said of self-government. The Founding Fathers decided, and the electorate at the time agreed, that government should be a do-it-yourself proposition. Like any do-it-yourself proposition, self-government involved some work. What was that work? Keeping informed. Following the issues. Knowing something about history and civics. Knowing something about the structure of our government and society and the struggles involved in bringing it about. Self-government involves a lot more than the seemingly backbreaking task of spending fifteen minutes at the voting booth on election day casting one’s ballots for candidates based on the mellifluousness of their names. We could have someone else do it for us; throughout most of history, that is how it has been done, with decidedly mixed results. Our founding fathers, however, thought self-government would be better. Modern Americans have decided that self-government, sans the effort involved, would be the best.
If you are a regular reader of the Insightful Pontificator, you are by definition better informed than at least 90% of the electorate. Even your desire to read such blogs indicates the kind of curiosity that self-government demands. You should vote. But please don’t get caught up in these banausic efforts to get those whose idea of news is Paris Hilton’s efforts to adopt blonde babies in Nigeria or some such vacuous nonsense to vote. Tell those hebetudinous types in your circle of acquaintances to do their bit for the country they take for granted and stay home on election day. Their doing otherwise merely dilutes the votes of those of us who care.
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