Saturday, October 25, 2008

Economic Meltdown Article and My Thoughts. Non Partisan views

In my Internet travels I came across an article by Waldon Bello. He's a foreign policy columnist, professor, author, etc. He talks about the recent meltdown and it's causes. The article can be seen here - http://www.fpif.org/fpiftxt/5560 - but I've included a few excerpts.

Is the worst over?
No. If anything is clear from the contradictory moves of the last week — allowing Lehman Brothers to collapse while taking over AIG, and engineering Bank of America's takeover of Merrill Lynch — there's no strategy to deal with the crisis, just tactical responses. It's like the fire department's response to a conflagration.The $700 billion buyout of banks' bad mortgaged-backed securities is mainly a desperate effort to shore up confidence in the system, preventing the erosion of trust in the banks and other financial institutions and avoiding a massive bank run such as the one that triggered the Great Depression of 1929.

Did greed cause the collapse of global capitalism's nerve center?
Good old-fashioned greed certainly played a part. This is what Klaus Schwab, the organizer of the World Economic Forum, the yearly global elite jamboree in the Swiss Alps, meant when he said in an interview earlier this year: "We have to pay for the sins of the past."

Was it lack of regulation?
Yes. Everyone acknowledges by now that Wall Street's capacity to innovate and turn out more and more sophisticated financial instruments had run far ahead of government's regulatory capability. This wasn't because the government was incapable of regulating but because the dominant neoliberal, laissez-faire attitude prevented government from devising effective regulatory mechanisms.


Click the link to see the rest.

I agree with pretty much everything he said. It's really a no-brainer that the current economic collapse stems from deregulation and greed. Those who promote deregulation believe the markets and financial institution will police themselves. Give me a break! Greed is that exact reason you must have regulation.

These so-called sophisticated (read as complicated & speculative), financial instruments are like Ponzi schemes because they are priced not on inherent value (like earnings), but on perceived future value. Think of the internet bubble. The price keeps going up because everyone wants into what seems like a good thing. The price ends up having no relationship to the value of the company. As soon as someone heads for the exit, everyone else scrambles. The average Joe (not the plumber) and their 401k's end up holding herman.

I don't understand it though when Bello says neoliberal, laissez-faire attitudes and aligns that with Reaganism and Thatcherism. Those guys were big on supply-side economics (known as voodoo economics by their detractors). It is and always has been a conservative Republican agenda to remove constraints to growth which ignores the greed factor and "redistribution of wealth" for a trickle down effect (Bush tax cuts). There's nothing liberal about it, neo or otherwise. I could have missed something. I haven't been paying close attention these past 5 years.

Interestingly, McCain now calls tax cuts to the middle class a "redistribution of wealth" and equates it to socialism. Supply-side is the chief factor for overproduction in the absence of either demand or disposable income. I never understood that policy, but this article helps me see it effects now.

He makes a very good point about how investing in the financial sector doesn't create new value. If you invest in GM, say, they can invest in a new plant in Kansas to build cars and trucks and create jobs. All of that interms of inventory and payroll adds to the economy. The financial sector just creates credit swaps and derivatives that they don't even understand and whose price is not quoted anywhere. Pretty scary and nobody was watching.Interesting guy, this Bello. He doesn't present a partisan ideology, but what he blames is all Rebublican policy since Reagan's time. Meanwhile, he validates free trade - NAFTA of the Clinton years - and quotes George Soros, not your average Wall Street guy.

Maybe this helped explain some things. Maybe it confused you further. Either way... there it is.

Wednesday, October 01, 2008

Thoughts before Tuesday (This is gonna be long)

Get ready for this. With Tuesday's Presidential vote right around the corner, I couldn't sit idly by and say nothing. Not when there is so much at stake. You may agree or disagree and you are welcome to do either in the comments below. I welcome all viewpoints, regardless of how closely they align with my own. However, let me lay down a disclaimer saying that I will not tolerate any disparaging comments in any way, shape, or form. Rude, belligerent, berating attacks or wanton disregard for basic human decency and courtesy will be met with repercussions; more than likely an affected friendship. This is a blog full of opinions and as such, is beyond contestation. I am staunch in my viewpoints and sales pitches are not welcome. Read, respond, editorialize but do it courteously. On with the show.

We have a unique election this year. Every 4 years the candidates are unique to a degree but this one brings several new facets to the table. We have a black man as a first time contender. A female on the vice presidential ticket. The differences between the candidates are staggering from a standpoint of age, background, and levels of experience.

You can guess from my personality or quite simply from the use of the word "staunch" earlier that I am a Republican and a conservative Republican, at that. Staunch only means "steadfast" but it is not often used with regard to Democrats, Liberals, Socialists or Communists (all being nearly one and the same). These folks, hereafter referred to as Liberals for the sake of brevity, can rarely apply the word staunch to their ideals since by definition and nature, they waver in them at any and all given moments. So yes... I'm a Republican, hereafter referred to as Conservative.

I'm not going to try to sway you toward my side of the spectrum. I'm much farther right than the average individual anyway (with an exception here and there). I'd like to try to reel people just far enough to land right of middle, but I won't do that either. It's not important. Electoral colleges tell us that each vote is not really an individual vote but that's a different story for a different time. My goal is to lay facts on the line so each person can make a decision that is, at the very least, informed, if not inspired. These are facts and my personal beliefs. They are not sensationalized, nor is it Yellow Journalism.

Mazen Asabhi, was appointed to Barack Obama's campaign and left within 10 days. Asabhi had ties to Jamal Said who was involved in fundraising via racketeering for Hamas, a widely known Palestinian terrorist organization. Being tied, in any way, to a terrorist organization will preclude a job with two agencies - FBI and Secret Service. Mr. Obama is not qualified to be employed by the same agency sworn to protect his life. Additionally, these ties preclude the ability of one to hold a security clearance. Obama, as president, would also act as the commander-in-chief of our military. I'm not upset at him for his associations. It is how quickly the rules are thrown out for him. Of all the people he could have chosen for his campaign, was it really THAT hard to find someone that was never attached to Hamas?

The fact that he's ineligible to be president aside, let's examine some other issues. He has out-raised and out-spent McCain by an exorbitant amount. I wonder if he'd be open to applying a redistribution of wealth to campaign funding. Take some of Obama's money give it to McCain even though Obama earned it one way or another and let McCain spend it. I'd be hard pressed to see Obama go for that. But I don't blame him, I'm not a big fan of redistribution either. I work for my money. The guy on the corner that begs for a nickel doesn't deserve a dime of my hard earned cash. People fall on hard times, I understand that. Look at my rollercoaster ride of a financial life (for those of you who know me). I understand. But at the end of the day, I do, and always have done, what is necessary to make ends meet. Skip the Filet Mignon, get rid of the premium channels, pick up a part-time job. There are means to an end when it comes to financial well-being. If you choose to ignore available routes to monetary success, why should you be allowed to take cash off the folks who put forth 100% every day? Remember what Russia was a part of previously? The USSR. The 2nd S stood Socialist. Top dogs worked, middle management worked, the ditch diggers worked, the bums stood around. Everyone got a handout. Granted, the payments were not equal. It's not the same as tip sharing at closing time of a TGI Friday's. But people who did nothing, got something. And for those of you not really keeping up, I'll remind you what happened to the USSR... it failed and broke up into many little counties. Many of which have since struggled because the only foundation they have had as a political system was that same socialism/communism. So redistribution of wealth is a socialistic view which is contrary to our American way of life.

By American, I mean US. Canada is America. They give away healthcare. They are socialists. How do they afford that? With a minimum sales tax of 10% and income tax of 21.5% under the same terms that we pay 11.9% here. So even where socialism seems to work and is not oppressive, it's very expensive.

And the last thing we need is another expense in this country. The housing market went belly up and the stock market is lower than it's been in many years. Unemployment is up and we've yet to finish financing a major war and our involvement in a 2nd war. Let's not raise taxes to pay for a new concept.

But Barack Obama is a mere 47 without much experience. John McCain may be older than Mt. Rushmore and Chocolate Chip Cookies, as seen in ThingsYoungerThanJohnMcCain.com but with age comes experience. A junior senator has no place at the helm of an entire nation and one that is amidst turmoil within our borders as well as abroad.

The political climate of the world makes me nervous as well with North Korea being untrustworthy, Iraq and Afghanistan still a pair of messes, Iran run by the craziest son of a bitch on the planet and Israel getting fed up with all of it. India and Pakistan are itching for a fight. Maybe I'll blog about my vision for WWIII in the not too distant future. The point is that someone well seasoned in life, military strategies, and politics is what we need since many of the problems we're involved in are not truly our own.

As much as it sucks to say it, a good portion of this country may not be ready to introduce a black man to the oval office. I have no issues with the fact that he is black whatsoever, but rather, the ensuing problems we'll see in rural middle America. Those people are closed minded, yes, but they are closed minded Americans and as long as that remains true, they can be unhappy and cause potential issues. With all of the other tumultuous events around us, let's leave well enough alone I say.

My idea of a fun time is not strapping a dead panda to the front of a Lincoln Navigator and running over everyone in the Gay parade. I'm not a right wing extremist nutball. But I'm far from a bleeding heart. Democrats will change the world even if they have to spend every dollar of your money to do it. Al Gore flies, by himself, on a 20 person jet so he's not late for a speech on energy conservation.

Pulling the troops out of Iraq is something I'd love to see more than anything - especially since I am a veteran of foreign war myself. Does that mean it makes sense to do it immediately? Ever turn you computer off while it's doing things? Try taking your key out of the car while driving. There are steps to things. Procedures and policy and sometimes, just sometimes... it requires a little bit of finesse and grace. Jarring the Arab community will not make them like us any more, that's for sure. I want my military brothers and sisters home safe and sound. However, we are a volunteer force. I'll die for my country tomorrow if need be, as that is what I signed up to do. The innocent civilians on American soil should NEVER be put in harms way, but walking away from the middle east without warning will be jarring and will bring parts of the war here. Bring them home, but do it sensibly.

Barack Obama SEEMS charismatic, but YouTube search for "Barack without TelePrompTer" and see what you get - it's him stumbling over words, using the word breathalyzer and then inhalator when he means inhaler. He gets annoyed at the crowd, who are HIS supporters. His charisma is preprinted by a pro writer and when it fails, he loses his cool. That's during a speech. Imagine during a real crisis.

So if you like Barack Obama and want to vote for him for change then think about what changes need to be made. We don't need to share our wealth with people refusing to work in our own country. We don't need to take on values exhibited to be failed systems by many countries around the world. We don't need a Freshman lineman playing starting Quarterback at the championship game.

Maybe we need fresh blood after 8 incoherent years of Dubya. He's my commander-in-chief and in line with my political party but I think fresh blood is a good thing. John McCain's stale 72 year old blood is still fresh to the White House with a ton of experience to boot.

Please carefully consider your vote on Tuesday. Even in a democracy with electoral colleges, your vote can make a difference. The 2000 election was won with 537 votes after all was said and done. You do count. Vote... vote wisely.