My Tax Rant

I have to admit that I did not attend one of the many “tea” parties being held across the nation. Oh, I certainly agree with the main contentions, that our present tax system is not only absurd but allows government to act in a very reckless manner. While liberals and democrats might consider this mere whining at the moment, since the government is firmly in their hands, they might do well to consider how they felt when the other side ran things not so long ago, and both liberals and conservatives, democrats and republicans alike might do well to consider how seldom government is really accountable and responsible in its conduct. Should we accept threats from individuals elected to represent the people, who now do as they please with the warning that if we get in their way, things might get nasty? Is our best hope merely that we do not end up with ‘someone worse’, which has been the sub rosa message from both parties for quite a while now. The TEA is supposed to mean ‘Taxed Enough Already’, but for many of us I believe the real message was ‘Tricked Enough Already’, maybe taunted, maybe we should say our politicians are ‘Tainted Enough Already’. We are all of us sick of the hypocrisy, the blatant lies and backroom deals. Don’t tell me only party ‘x’ does this, we’ve seen it across the board for most of our lives. I do believe the republicans do this less often than the democrats, but that hardly means it’s something to tolerate, much less encourage, just because “our side” is doing it. I admire and respect George W. Bush because, mistakes and all, we had an honest man in the office. Democrats claim the same thing about Barack Obama (while denying it about Bush), which I do not see, but at least we can agree that what we seek is transparency and integrity. Once we start looking at Congress, it gets difficult to find integrity. It’s there all right with some members of the House and Senate, but it’s clearly an endangered species on the Hill.

And that brings us back to the Tea Parties. Whether or not you think the programs included in the Stimulus and the bailouts were good or not, the plain fact is we citizens were steamrolled by them; no one really asked the people what we thought or were willing to pay for. Now, trillions of dollars have been committed to things that, good or not, do not really do a single thing to help folks save their homes, help banks offer loans more freely, or save jobs at major companies. The plans were nothing more, in practice, than politicians using crisis to advance their personal ambition and help their buddies. And that fact should really make you angry. You’ve been lied to and robbed, and only a great fool would pretend otherwise. That’s what the protests were all about.

So why didn’t I join in? First off, I’m not one to waste time on spilled milk. That money is spent, its not coming back, and history tells me that there are better ways to work for effective change than hold a rally and make noise that the politicians will either ignore or pretend is aimed at someone else. Second, it will sound cynical to say so, but there are a great many fools in the world today, willing to fall for a shiny promise or a scary story. The only way to change things is to educate people, and that is a one-on-one thing, and it takes time, patience, and a willing student. Frankly, a lot of folks are not ready for that lesson. And third, the bad thing about these protests is that folks do them and then go home and think they’ve done something, that they can get back to normal. You can win football games that way, but you cannot change the nation that way. This is a long fight, and we’d better be ready for what it takes to win, because right now the other side has a powerful system and a lot of force at its disposal. How many politicians are serious about tax reform? How many Senators really grasp what it means to balance raising your family, paying for your home, your kids’ college, and still saving something significant for your retirement, in an environment where ‘job security’ is fiction, where ‘financial planning’ is a faraway ideal, and where ‘accountable government’ is an oxymoron.

My country, my money, my rights. I will defend them because I want them to be around for my children. What about you?

True Heroes

12:03 AM, Easter Sunday, Southeast Houston – The 911 call was like many that came before it and which would follow; a simple but dangerous house fire. Station 26 dispatched two trucks, as normal.

12:07 AM – A four-minute trip and the firemen arrive at a single-story brick home at Oak Vista and De Leon streets, among them Captain James Harlow and rookie firefighter Damion Hobbs, recently returned to the US from serving a tour in Iraq with the US Army.

12:15 AM - As firefighters battled the blaze, the flames subsided quickly and it appeared the fight would be an easy one. Captain Harlow, speaking with neighbors, learns that two elderly people live in the house and were not seen to leave, so he and some other firefighters enter the still-burning house to search for them.

12:25 AM – Winds suddenly become much stronger, and the flames revive, bursting through the roof and moving quickly across the frame. Witnesses later said the flames shot up as high as 50 feet. Because of the intense heat and unpredictable behavior, firefighters are ordered to fall back. As they emerge from the house, the firemen are counted.

12:30 AM – A second roll call confirms that Captain Harlow and Probationary Firefighter Hobbs are still in the house. The flames remain too intense and the winds too high for firefighters to re-enter the home to search for their comrades. The couple who live in the house are found safe outside, having escaped before the fire department arrived. They did not know that firemen had been looking for them.

1:10 AM – Firefighters are finally able to enter the home and search for the missing men.

1:20 AM – The bodies of James Harlow and Damion Hobbs are found and brought outside. CPR is attempted on the lawn, but is fruitless. Firemen form a ‘wall of honor’ as the bodies are carried to ambulances.

2:00 AM – Mayor Bill White arrives and speaks to firemen. The crew of Station 26 finishes clean-up of the area and works out the rst of their shift without incident.

You may notice the word ‘hero’ used a lot in various ways. It’s often used by politicians and media people to describe celebrities and sports figures. I submit that the word should be reserved for someone who daily puts everything on the line in order to make a difference for others. Medals and honors may be awarded for all sorts of actions, but there are few true heroes. Sadly, many real heroes are distinguished by the cost of their valor. A neighbor at the scene of the fire sadly observed that she never thought the firemen could be in danger, she said everyone ”sort of thought they were invincible … we never imagined this could happen”. Captain Harlow served nearly three decades as a fireman, and Firefighter Hobbs served his country in war before completing his fire academy training to serve his community in this most demanding vocation. These are true heroes, against whose example few men can measure. May God grant their families peace and comfort for their loss, and indeed we are poorer for having lost such men, though richer to have been blessed that such men would give their best talent and devotion to service.

Good Friday

God died today. We murdered Him.

Boundaries

There are many differences between Liberals and Conservatives, and frankly sometimes these differences are important to the health of Society. Traditionally, Conservatives speak for the rights of the majority and for mainstream values, while Liberals stand up for minority opinions and positions of social outcasts; both voices matter in a functioning civilization, especially in a leading culture in the world. There is, however, a limit to the range of opinions which may be held without cost. After a certain point, assuming certain things incurs a cost, even a penalty, and to some degree represents a growing threat to the society making the assumption. The present piracy problem off the coast of Somalia is an example where certain boundaries have been crossed, and conditions have changed under which effective measures may be utilized. In short, pirates are terrorists and should not be confused with common criminals, nor treated as such.

In yesterday’s discussion, some readers chose to describe the Somali pirates in distinctly gentle tones, trying to get readers to consider the lack of economic opportunity in Somalia, or the oppressive conditions in that part of the world which could induce young men to follow illicit courses of enterprise. These readers chose to portray the pirates as criminals, deserving of some punishment certainly, but also as individuals to be considered in the light of their circumstances. This is an argument seen commonly in sociology classrooms, as well as various opinion pieces on news channels. America, after all, is expected to be more restrained in the use of our force, and more considerate of the conditions and rationale of our enemies.

As you may have guessed, I regard these as specious arguments. While studying environmental influences in a life decision may be valid and useful in a forensic sense, the salient question is what to do to punish unacceptable acts and prevent their recurrence. To that question, the most effective strategy in history has been to bring overwhelming force against the perpetrator, to completely eradicate any group which acts in a manner outside tolerable boundaries. Therefore, boundaries need to be discussed here.

Suppose someone robs a business, and in that crime takes hostages. Clearly, this situation has escalated beyond common criminal behavior. Also, the situation has a series of thresholds. Weapons and their type, whether anyone has been injured, and whether anyone has been killed all factor into the way that authorities address the situation. That a crime has been committed is not in dispute; the question is the way the situation is addressed. A domestic dispute where a man holds his wife hostage with a handgun is dangerous, but on a much different level from a hostage situation involving a group of radicals using automatic weapons and bombs, who have already killed a hostage as a sign of their determination. When certain events happen, the situation irrevocably changes.

With that in mind, let’s consider the way the Royal Navy dealt with pirates. Summary execution, folks. The British, you may recall, are quite the paragon for order and respecting rights, and a long history of long court cases, but where pirates were concerned, the Brits wouldn’t mess about for a moment, it was get a rope and hang ‘em high. That’s even more striking when you consider what it did for future pirates considering surrender – why surrender if you’d be executed, anyway? The British hated piracy so much that they established a fierce rule for such acts. Regardless of what you may have seen in ’Pirates of the Caribbean’, pirates were considered the worst of the worst; even the Americans at the start of the Nineteenth Century regarded piracy as an evil to be obliterated; remember that line in the Marine Hym about the ‘shores of Tripoli’? That’s when President Jefferson sent them into Libya to rout out the pirates there. Even though relations between the U.S. and the U.K. were not nearly comfortable after the War of 1812, by 1823 American and British navies were cooperating in sweeps of Caribbean and Atlantic waters to find and destroy nests of pirates. It was that important to both nations, and it should be so today.

The argument has been made that the pirates from Somalia are just trying to survive their economic conditions. That argument ignores history – many places in the world and throughout the ages have endured deprivation and suffered from want, but their people did not turn to violent crime to support themselves. Chinese immigrants throughout history, for example, have been remarkable for both their industry and their ability to conform to local conditions. No less can be said for the Jews, who despite persecution for more than a thousand years in almost every nation where they settled, have flourished and grown everywhere. The same for Italians, the Irish, the Russians, et cetera – you don’t hear many pirates named O’Reilly or Battaglia, hmm? Come to that, the historical model for pirates is often men who have some education, ambition, and experience as sailors. Since Somalia does not have a navy or coast guard and no universities to speak of, the strongest likelihood is that the bozos carrying out these attacks are recruited by men from other parts of Africa who see the region as an enterprise zone of sorts. So, we see from this a need to address two levels of pirate activity, those who commit the direct attacks and those who plan and support them.

It comes down to making them choose life or death. That is, whenever a pirate attacks a vessel and crew, armed forces respond in force, killing anyone who resists. Those who wish to surrender will be given the opportunity to give up the identity and location of their sponsors. Refusal to do so will result in immediate execution, those few who agree will be given life sentences. The locations of the “mother ships” will be reconnoitered, and once confirmed will be destroyed without delay. Planners and organizers will be hunted down by Marines and confronted – those who resist will be killed, those who surrender will be given trial by military tribunal.

Sound harsh? That’s the idea. Piracy was nearly extirpated in the 19th century, because the message was made very clear that any pirate anywhere would be hunted down and killed, period. Make it that undesirable and no one will even think about it.

Pirates do not have civil rights. Pirates do not have a right to counsel, or a trial by jury or a plea bargain. Each and every one of them chose to commit violence on the open sea, and so brings upon himself the full fury of any authority with the backbone to defend its flag.

This Is A Test

About two hundred miles off the coast of Somalia, a U.S.-flagged freighter has been seized by pirates, in the fifteenth recorded instance of high seas piracy since March 1.

The situation would appear to be a simple one for the American commander in chief – the vessel and crew are American, they were attacked without provocation in international waters, and the attackers are non-aligned with any nation in the world. It would seem a simple matter for Obama to order the Navy and Marines into the area to do the world a favor and eliminate these pirates, and in so doing confirm the precedent that America will defend its own. Less than a week ago, President Obama clearly stated that rules exist for a reason, and North Korea’s launch of a ballistic missile required “severe consequences”. Certainly a direct attack on a U.S.-flagged vessel and American citizens deserves as much as a missile test which sent the rocket into the Sea of Japan.

It remains to be seen how President Obama will answer this test.

The American Right to Be Rich

I don’t know who first started the phrase ‘there’s two kinds of people …’, but it really gets on my nerves. It’s oversimplifying things, and what’s worse, it encourages people to generalize and broadbrush. And then these people are surprised when groups take such behavior further and begin acting like mobs, often racist and xenophobic in their mood.

Imagine that.

I start with that obnoxious twaddle, because it reflects a rather nasty sort of groupthink. And as happens all too often, that kind of mob mentality plays out in politics. It is the bane of democracy, when an emotional swell carries the people to a mad decision. And in the current climate, it’s that recurring poison of class warfare and hatred of success in others. In recent weeks we have seen public attacks of a most unreasonable vituperance against executives of public corporations, banks, and a wide range of successful individuals. While the targeting has been selective – no one seems to ask why it is reasonable to challenge AIG executives for receiving bonuses that they can prove they earned, while ignoring, say, the millions of dollars paid to Freddie Mac and Fannie executives. No one seems to consider it just a tad hypocritical for wealthy politicians like Ted Kennedy and Harry Reid to complain about the wealth of people who actually worked for their money.

And then there is our President, Barack Obama. Obama made $22 million dollars writing books, and somehow believes that qualifies him to tell the rest of us that we’re greedy. Madness is when people start telling us that this is an appropriate moral position, especially when the man telling us how bad it is to be rich, takes such pains to protect his own wealth and make sure his own comforts are provided. I wonder if he’s tweaked the thermometer at the White House down to the levels he told the rest of us to set, yet? Not likely.

Let’s be clear – the problem is not that Obama is rich, it’s that the President of the United States thinks its only OK for some people to be rich, and on that point he is not only wrong, but walking down a morally corrupt path. And he leads a mob of self-righteous morons, who neither comprehend nor care about the moral iniquity of their hatred.

I have a right to be rich. I am not rich, so far as money is concerned, but if I ever become rich, no one has the right to deny me my wealth. You have that same right, to have and hold what is your own, the same as every man. It has been played down as a mean source of motivation to say so, but the American Revolution was fought, in part, to protect wealth from being stolen by men who did nothing to earn it. ’No taxation without representation’, at its heart, is defense of individual wealth. To pretend that our nation’s forefathers fought and died for the right to create progressive tax rates, set a maximum wage, or for politicians to harass honest individuals simply for personal success is to lie, and there’s no denying it.

That is not to say that I should be miserly, or count it a virtue if I am cold to the needs of others. But virtue comes from choice, just as does evil. What you choose to do defines you, and your worth comes from your deliberate effort. Someone who claims another person should pay his debt is of no account, and so too a man who pays for his dreams with the work and wealth of other people compelled to pay against their will is a thief. It is necessary for government to levy taxes to pay for those needs to which the public has agreed, and to meet those responsibilities specified in the Constitution, but it is theft to take money for advancing a personal agenda and the special interests of one party. If it was even marginally valid to argue morally against the cost of the war in Iraq, then it is many times more imperative to stand against crippling our children’s future in order to give ACORN and the AFL-CIO a stranglehold on industry and the election system. And for government to even hint that someone is morally wrong for financial success is so foul in spirit that it beggars the imagination to come up with strong enough condemnation.

I started by condemning the stratification of whole demographics, and now I return to it. While there are legitimate means of studying group dynamics and cultural mores at work influencing behavior and social interactions, it must be understood that every person is an individual, and their personal condition is the result of both environment and choice; to deny one force is to invalidate the conclusion of your analysis before it starts. Polarization of wealth-hate is in like fashion an exercise of fascism, because the government is commonly brought to bear on a targeted class through no offense of their character. In practice such actions are no different from racially-based or religious persecution, and history offers an appalling record on how deep and vicious such pogroms can become.

“W was Right”, Says Obama

London – President Barack Obama stunned the convened heads of state at the G-20 conference today, by announcing that his predecessor, George W. Bush, was “right in just about every one of his major policy decisions”, and promised that U.S. military and economic policy would be “a continuation of Bush in all essentials”.

President Obama promised to continue the mission in Iraq and Afghanistan, and in an unexpected change of heart, not only plans to keep the Guantanamo base open but expand its operations. Obama promised to cut taxes “for all tax-payers”, to rescind his earlier budget proposals and pressed for an inquiry into the conduct of key Congressional leaders in allowing the Fannie Mae and Freddie Mac disasters.

A stunned Associated Press correspondent spoke for most media representatives, when he asked the President, “Didn’t you run on a promise of ‘change’? And didn’t you say electing John McCain would have led to ‘Bush III’?”

President Obama agreed. “Yes, I said those things, but” - he shrugged - “I was wrong. Now that I have had a chance to see how things are working and to see who truly understands the values and history of this nation, I would have to say – at least for now – that I respect the work of my predecessor, so much so that his administration will be my template for the forseeable future.”

























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april fool

Since You Asked ...

President Obama has done a dismal job his first few weeks. His lack of executive experience and competence has become painfully obvious around the world, even to many of those people who elected him in the forlorn hope that Obama would make things better rather than worse. Because Denial is the first stage in the way many people deal with Obama’s true level of performance, many on the Left desperately hope that his idiocy will somehow work out, even prove to be brilliantly successful. As it becomes increasingly obvious that President Obama’s plans are ill-considered and frankly damaging to the nation, however, that dismal hope has shifted to bitter accusations that Obama’s critics have not submitted alternative suggestions; every post I publish which point out Obama’s blunders will be met with at least one challenge from the Left to present my own plan.

First off, it needs to be noted that Republicans in Congress have offered a number of substantive plans – the problem there, is that Pelosi and Reid have shut down the traditional lanes of dialogue between parties to debate bills and propose alternatives. The stimulus bill and bailout packages were essentially rammed through the chambers; debate was killed from the outset. Next, while I consider myself reasonably intelligent and informed on the issues, one would expect that the President of the United States, having a staff of economic experts convened for his benefit and advice and the faculties of his office, would be able to produce a far more detailed, effective, and comprehensive program than any individual citizen; it seems to admit the unfortunate limits of the man to match President Obama with an ordinary run of the mill blogger. That is to say, there is no downside for me to fail in matching up with President Obama, seeing as he is the one who promised solutions and answers, indeed he all but promised miracles and he has all the tools and resources to address the issue, while speaking for myself I made no promises and have only my own experience and intellect to answer the questions. Should I prove to be at least the equal to President Obama in my resolutions, the reader will be compelled either to grant that I am an ideal candidate for POTUS myself, or that the man occupying the office is not nearly equal to the task.

So, to the issues. My approach is simple; Economics boils down to two essential ingredients – contracts and confidence. Every financial action amounts to a contract, whether it is hiring an employee, buying supplies to make the product, a customer purchasing the product or service, or whatever. It involves at least two parties making an agreement satisfactory to them both. And the satisfaction of that agreement depends on confidence. When confidence is strong, a company, business, or worker sees more revenue and activity, but when confidence fails, business falls off and times get tough. Call it a downturn, recession, or even a depression, at the heart of it the rough times all involve a collapse of confidence by the public in the economy. Therefore, the first cause of recovery from such a condition is the rebuilding and restoration of confidence. This is also one of the few areas where the President can have direct and beneficial influence, or he can screw things up and make the situation worse. The president can recommend actions to Congress and the Federal Reserve which increase the flow of money and credit. This action risks increasing inflation, but most economists regard moderately higher inflation an acceptable cost for lowering unemployment and reviving consumer confidence. Therefore, tax breaks for companies which hire significant numbers of new employees, especially by returning core operations and headquarters to the United States, are the historically preferred means for rewarding desired behavior and improving the domestic economy and stabilizing long-term confidence. Actions which demoralize industry, such as punitive taxes or public antagonism by political leaders, deter growth and recovery, which is one reason why things have simply gotten worse under Obama.

It should be noted, at this point, that both parties are guilty of hyperbole in referring to the present economic condition in dire tones. Democrats have falsely compared the present condition to the Great Depression of the 1930s, in hopes of blaming the Bush Administration for the crisis, while Republicans have done so in hopes of blaming President Obama for turning a mild recession into a catastrophe. Neither comparison is valid, and the behavior only worsens the matter, since few sources in the media or the government are acting responsibly in describing the causes or effects of the situation. Whether inflation, unemployment, housing foreclosures, bank failures, or any other major metric of economic condition is considered, it is plainly dishonest to pretend that the current situation is at all comparable to the Great Depression. In this respect, what a President should do is call out the naysayers and pessimists, emphasizing the core strength of the nation and its workers, validating his own credentials by affirming the nation’s most essential treasure – it’s workers, investors, and yes it’s executives. Obama’s penchant for harassing the top brass at convenient target companies, even when the guys attacked came in to fix the problems caused by someone else, shows character and/or comprehension flaws that do him no credit and make the task of restoring confidence in the economy that much harder. I am not saying that I would lavish praise indiscriminately, but at the same time Obama’s habit of attacking whole demographic segments with general disdain is more characteristic of class warfare than sound understanding of economics. It may sound trite, but ‘praise in public, criticize in private’ also applies to public figures, as much or more so than anyone else.

In the matter of the AIG executive bonuses, for example, President Obama foolishly led a mob of outrage, only to be confronted with evidence that he had not bothered to find out the facts. It turns out that at least some of those AIG executives were brought in after things blew up there – they not only were not responsible for the company’s crisis, they were brought in specifically to set things right. Kind of like blaming firemen for the fire they are trying to put out. Next, it turns out that some of those AIG execs agreed to take only one dollar a year in salary; the “bonuses” were there to serve as actual compensation for their work, and those payments were tied to actual accomplishment of specified metrics. Once those facts became known, the moral thing for President Obama to do was to admit he was wrong and apologize, but being who and what he is, the President chose to switch gears and pretend he had never said what is plainly on the record.

With those AIG “bonuses” and executive compensation in mind, let’s take a look at the new trend among hystero-liberals like Barack “Panic” Obama – tossing out the idea of maximum pay for executives. To understand why this idea is incredibly stupid, let’s imagine for a minute that you buy a lotto ticket, and it wins. Let’s say you get a Cash Option ticket and after taxes it’s, hmm, let’s say 50 million dollars. Set for life, right? Well, there is talk about limiting pay under certain circumstances to a million dollars a year. Using that logic, the government would be telling you that you’d have to wait forty-nine more years to get all of your lottery winnings, even though the government would be sure to grab its take from the top. How many folks would buy lotto tickets if the payout was maximized per year? Not many, the whole system would collapse as demand folded, which is why no one has even suggested trying this stunt on state lotteries and scratch-off tickets. Lotto winners are just lucky, they don’t invest time in education and training and work to get where they are, like professional athletes, rock stars … and corporation executives. Not only that, lotto winnings are paid out of public money, while those executives everyone loves to hate so much are paid out of the company’s money. And yes, the government gave AIG more than a hundred billion dollars, but they not only did not prohibit bonuses which it turns out are both legal and appropriate, the bill which handed over the money specifically assured those payments. Once again, we have to decide whether President Obama is a lazy politician who does not understand economics, or a dishonest charlatan trying to create false outrage in order to advance an agenda he knows to be unconstitutional and which even his own party would shoot down in short order, were they to consider the submissions in clear and ordered debate. Had I been in Obama’s chair when the AIG story broke, I would have begun by getting my facts straight, and by protecting the fundamental priorities of the nation, in this case confidence in the corrections being exercised to right the ship. I would have used the influence that Obama so casually enjoys, to restrain members of my part from starting up witch-hunts or whipping up hysteria in the public forums.

Anyway, on to the core subjects – Economics, Trade, Finance, and Taxation. That’s what this all comes down to, you know, the fundamental forces and their effects on the public. I wrote earlier that consumer confidence is a critical component to recovering from this recession, so that’s our starting point. Any competent President knows better that to play on people’s fears, as Obama has done – it invariably causes greater long-term harm which does not justify the short-term political opportunities which Obama chose to pursue instead of the nation’s interests. I have said it before but it bears repeating; when Obama tries to sell his “stimulus” as virtuous and sure to spur the economy simply because he’s spending so many trillions of tax dollars, he betrays either a dishonest character or a horrible miscomprehension of economics. It is very much possible to simply be wasting money, no matter how much is spent, if the money is not spent in addressing the vital needs of the nation. To spend almost a trillion dollars without creating private-sector jobs, without assisting even one mortgage going through foreclosure at the moment, or establishing a method for restoring confidence in the finance industry, is the government equivalent of taking the mortgage money and spending it on hookers.

There is no painless solution; the key decision is who should pay, and how can the damage be controlled to affect the fewest innocent parties? Protecting jobs is paramount – wealth comes into companies because of working employees, wealth comes to families through wages, and taxes are paid through successful jobs and successful companies. Corporate taxes need to be lowered during a recession, because that rewards increased productivity which only happens by keeping employees and hiring more. Individuals should also not see taxes raised during a recession, because so many of them own and run companies and will lay off people if their taxes go up at a time when their revenues are already suffering. Also, investments in companies depend on individuals with the means and inclination to buy stock, fund ventures, and otherwise put their money where their confidence is. Raising taxes is necessary at time, but doing so during a recession is poisoning the patient.

As to who pays, there is no such thing as “too big to fail”. Take a look at the largest companies in America in 1850, 1900, and 1950. Some really big names went out of business, and harsh as it sounds that’s how the world works. No one gets to hang around just because they have a history. If there is anyplace where evolution works, its in business. Look at phone deregulation. Sure, it was a mess in places, but without it no one would have really developed cell phones, much less the variety of plans available today, in almost every country. Sorry GM, but your business model is a rotting corpse. Sorry AIG, but there is no right to make taxpayers keep you going. Bankruptcy courts exist for the same reasons you got into trouble.

Then there are the investment banks. No one can explain why speculation should be protected, because there is just no way to defend that argument. No one’s offering to pay me all the money my 401k lost in the last 6 months, no one has guaranteed my employer will stay in business, but these investment banks think they should be propped up for rotten judgment and a rather annoying lack of transparency about their practices and promises. Let the crooks go to prison, and let the bad banks fail. And make sure everyone knows which congressmen backed those banks.

Money should be spent, but wisely and with absolutely no sense or appearance of political gaming. Mortgages, for example, are a sound investment and it makes sense for the government to back problem areas provided it gets a take of the return. Enough good mortgages (mortgages with working families who want to keep and pay off their home) exist to cover the losses of the relatively few bad mortgages that will fail. And the return for the government could end up repaying a substantial portion of the program’s cost, in addition to preventing the mortgage company from being rewarded for risky behavior – if the government accepts risk, they must be paid according to the return.

As to trade, we must stop trying to solve everyone else’s problems, or deny that American businesses are the reasonable first focus of business. But protectionist policies do more harm than good, that’s the history of trade, and in any case protecting inefficiency and poor performance is plain stupid. Reward R&D, reward strategic industries, but stop pretending that a pickup truck will decide the fate of America’s economy.

Finance is a fancy word for figuring out how to pay for things. We had loans and credit as far back as the pharaohs, along with variations on bankruptcy, bad debt, and alternative payments. After several thousand years, we know the basics – everything has to be paid for, risk never completely goes away, and the possibility that something bad will happen means that sooner or later it will happen. There are laws on the books about transparency and accountability. Time to enforce them. Do that and folks will trust banks again.

As to taxes, it’s even more simple – reward people who pay taxes, not those who do not pay taxes. If you can’t handle that concept, there’s simply no hope you could understand anything more complex, and if you do understand that concept, you will also realize that tax reform has been overdue for more than a generation. Rates and specific deductions are symptoms, not the fundamental problem.

Two-Edged Corruption

I have been rough on President Obama’s clumsy and unethical job performance since he took office, and I have – quite reasonably – excoriated the Democrats on their unconscionable behavior since they seized power in 2006. Some people have taken heart from these scandals, though, believing that the American people will punish the Democrats for their corruption and re-install the Republicans into the House majority in 2010 and the White House in 2012. Unfortunately, that belief fails on two points. First, emotions of the moment do not necessarily carry over to political consequences, which is why politicians are reluctant to apologize or watch their steps in the early days after they are elected. But second, change is not automatically an improvement, something Republicans tried to warn voters in 2008 but which in this situation should warn us of a need for some serious housecleaning in both parties. An unfortunate example of the corruption prevailing across the aisles is Senator John Cornyn of Texas.

I got an email from Cornyn, basically asking for money but trying to play on Americans’ outrage over the AIG bonuses. It starts as follows:

“Those two words are what we've seen over the past few days as we learn more about the $165 million in bonuses offered to AIG executives.

Help me get that money back by signing the NRSC's "Take Back The Bonuses" petition. And then support the NRSC with a secure online donation of just $5 or more.

My constituents in Texas have been calling my office all week asking "what's going on up there?"

The answer is two other words: liberal Democrats.

They're the ones who are in charge and approved the money for the AIG bailout. And a couple of weeks ago when conservatives and moderates began asking questions, we were told - in not so many words - to mind our own business.
Well, the taxpayer's money is our business.

Frankly, it's unthinkable to me that a company American taxpayers bailed out would hand out bonuses to their executives. Where I come from - and pretty much everywhere except Washington, D.C. - you pay people to succeed - not to fail.”

Cornyn’s right that the bailout bill was largely a Democrat plan, and yes Americans – myself included – are appalled at the way top executives at AIG have acted. Cornyn’s dishonesty, however, comes from the fact that the bonuses were included in contracts signed long before AIG got into trouble. And while AIG should have tied bonuses to the company’s actual health and financial performance, and while the individual executives should have shown the moral fiber to turn down the bonuses, the fact remains that the bonuses were completely legal and in fact binding upon AIG; the company had little choice about paying out the bonuses. The contracts were legal, binding, and inflexible.

And by the way, that money does not belong to Senator Cornyn, you, me, or anyone else. If every person at AIG chose to return their bonus money, it would not be a case of "us" 'getting our money back' - it would just go to the government to be used on some other pork-heavy project blessed by the political mandarins of the Potomac.

So, we’re left with two possible judgments on Senator John Cornyn of Texas, Republican and purported conservative. Either he’s too stupid to understand what bill of attainder and ex post facto mean, and why such laws are unconstitutional (not to mention the devastating effect they would have on business, if it were to become the practice of government to abrogate contracts in order to coerce behavior to its whim no matter what is contractually stated), and too lazy to learn about the issue before declaring what he means to do about it; or John Cornyn is as corrupt as the Democrats, willing to ignore the Constitution in order to score a few cheap political points, to penalize a legal if inept business with taxes just to hurt them for obeying their contractual obligations, and to abandon the principles of conservatism and free enterprise in order to fit in with people who are America’s enemies. Lazy moron or America-hating crook, he’s one or the other.

Over eighty Republicans supported the attempt to break the Constitution in order to punish a company for a lawful act. So it’s not as if Senator Cornyn is an outlier here. He’s just a bad liar.

Obama vs The Job

During this recession, a lot of us are thinking about job-hunting. Even though most of us still have jobs and may even like our employers, it is perfectly reasonable to think about the possibility that we might have to find new positions, which in turn creates worries about finding a job quickly, and of course the worry that the job we get will be a bad one. What a lot of people do not realize, is that companies also dread the hiring process, and for many of the same reasons. The nightmare scenario for many companies, is finding someone who interviews well but when hired proves to be a waste, or worse to be someone who damages the company through negligence or fraud. Barack Obama is proving to be that sort of “hire”.

Granted, I have been arguing against the ‘hiring’ of Barack Obama, Chicago-style Lawyer, Activist and all-around Narcissist since he won the nomination of the Democratic Party (at war against America since 1970). So I have to admit that my opinion is colored by a certain tendency to see Barack Obama as a cancer rather than a savior. On the other hand, I made an effort last fall to give him a chance, when he was first elected President. Even though the present set of conditions is largely the result of the Democrat-controlled Congress of 2006-present, I felt that President-elect Obama deserved the chance to make his case and explain how his plans would work.

It’s pretty apparent by now, that Obama’s plans were limited to variations on a simple template:

1. Scare folks out of rational examination of an issue, sell it as the “worst since”, then append some emotionally-charged historical condition, no matter whether the comparison is valid or not;
2. Propose massive spending that does not directly address the causes or effects of the crisis, but which would be difficult to sell in any nominal political conditions. In short, use scare tactics to advance ideology as a primary goal, overriding all other imperatives;
3. When challenged on any proposed agenda, accuse the critic of obstruction, and claim that the critic is somehow making the crisis worse by demanding due diligence;
4. When public opinion begins to turn against the use of scare tactics, switch to a pretense of optimism and success, claim that your political agenda was somehow responsible, and if it becomes obvious that the plan has failed, blame your political enemies;
5. When all else fails, distract the public through persecution of high-profile individuals, scapegoat conveniently caricatured enemies, or just hide from the issues by focusing on absurd quirks like publishing your ‘Final Four’ picks instead of addressing the failure of your Treasury Secretary to comprehend even the most fundamental elements of finance, or appear on a talk show hosted by a comedian, rather than explain how sending billions of tax dollars to your favorite special interest groups will increase consumer confidence or rebuild the housing market.

Remember Richard Nixon? You know, ‘enemies list’, blaming selected media individuals for his problems and pathetically trying to show he was somehow ‘cool’ by appearing on “Laugh-In”? You should, we’re seeing the same thing now with Obama’s recent behavior. The difference, of course, is not only that Nixon had a decent sense of how the economy worked and who America’s friends and enemies were in the world, it’s also that Tricky D managed to not drive off the cliff until six years into his presidency; President O managed to find the crash inside of six months of winning the Oval Office. Of course, there’s a couple other diff’s as well – Nixon’s own party was willing to impeach and convict him for what he did during Watergate, while the Democrats are hardly going to consider their leader in any moral balance, especially given the example of their own leadership. And last, when Nixon left the White House we at least had a competent if uninspired President in Gerald Ford; absolutely no one with a three-digit IQ and a working conscience would consider handing the keys over to Joe Biden.

Sounds extreme, I know, but look at the record so far. The 787-billion dollar “Stimulus” bill has twenty-three separate sections, addressing all kinds of federal projects on liberal wish lists, and yes some of them are reasonable, maybe even good for the country, but not a cent is spent to create any private-sector jobs except through unions, there is nothing to help working families who are facing foreclosure right now, or who have already lost their house, and there is nothing in the bill to restore the lost investments of people whose 401k’s were almost literally decimated in the last year. In fact, despite Obama’s shrill cries that it would be catastrophic to delay passing the bill (let alone dare to question or oppose it), most of the spending does not even take place until next year, a fact made all the more obvious by Obama’s delay in signing it. Obama can no longer spin his credentials; they are as paper-thin as his experience.

Barack Obama never understood the job; he wanted it as the pinnacle of additions to his resume. In so doing, Obama proved the limit to his scale, like the man who wanted to be a great composer, never understanding that the truly great compose because they love music, or the man who wanted to be known as a great athlete, rather than strive because he loves the game. President Obama loves competition, politics, and glory, but frankly none of those qualities are pertinent to the office of the President of the United States. Obama made gains in the election by deriding the sitting president during his campaign, but too late Obama has come to see the virtue of a tough hide, and the need for a president to be something more substantial than a mere provocateur. Obama is a master of the political assassination, but he is a rank amateur at the greater skill of building informed consensus. Obama conjured the image of a larger-than-life superhero for himself, but he never acquired the judgment or developed the humility needed to confront the scale of national tides and crisis.

Obama’s defenders complain that the president should not be criticized for his plans, because they take time to work. The problem is not the timing, however, but the character and application of the action. The Obama mandarins opine that the simple flood of spending alone will eventually produced the desired growth in the economy. Such thinking, of course, is deluded. One needs only to imagine the difference between a farmer who carefully prepares and plows his land, placing his seed in just the right places and amounts, and who irrigates his plot and watches to keep out birds and weeds, with the fool who just throws seed around with no organization; which farmer will legitimately produce a good harvest should be obvious to predict. Or compare a manager who carefully considers the employee skills he needs and how many people, who budgets his staff and considers the demographic and industry factors, before he carefully interviews, hires, then trains only the people who would be good additions and create growth for his company, to the idiot who hires without planning and according to his whim; which company will be out of business within a year is not hard to predict. In such cases there is no need to ‘wait for results’; the results are obvious by the manner in which resources are allocated and applied. To expect that spending hundreds of billions of dollars on special interest political projects (pork to most Americans) will produce an economic boom if we just wait long enough, is along the same lines as arguing that if we had just given Bernie Madoff more time, he’d have made enough money to pay back all his investors – it’s not only stupid, it’s criminally dishonest.

A Dying In The Family

A family member is dying. Of old age, near as I can tell, but I hate to see the fellow suffer. It’s particularly difficult for my daughter, Jagan. He’s her hamster, after all.

Some of you, admit it, immediately dropped the significance of the story when you read that I am talking about a hamster. Yes, Micho is a senior hamster, going through what appears to be the inevitable fate of us all, excepting that hamsters do not regularly enjoy the benefits of hospice care, so the poor fellow is having a rough go of it. he might survive, but I doubt it. Judging by the spasms and cries of pain, Micho is in a bad way and there’s nothing we can do for him but try to keep him comfortable.

We took Micho about a year and a half ago from a family which had gotten bored with their old hamster. They were talking as if they would simply throw the animal away after about three years, now that they no longer wanted it. When I first saw Micho, he looked unhappy and listless, and no wonder – his cage was filthy and his food nothing but suet pellets. I cleaned his cage out and he imemdiately began running on his wheel, and some fresh lettuce and carrots brightened him up no end. I looked up on the internet about hamsters, and whatever Micho’s age was, he appeared to be a senior but healthy hamster. He cleared four and a half years old with no apparent problems.

Micho is principally active at night, so I noticed when he started moving around briskly Sunday morning. Trouble is, he was jerky, seemed spasmodic, as if he was having a seizure. By afternoon, his seizures were obvious and clearly causing him great pain. He would jump and throw himself onto his back, then cry, sometimes loudly and sometimes loudly while he twitched his left legs and waved his right legs in circles in the air. That’s when my wife and I had the discussion about what to do.

Now, I’d like to write out some noble tale of solid ethics and the perfect example of how a father and head-of-household should act. But the fact is, I could not justify extreme measures to save a rodent that was a bit older than the books say hamsters usually live. Also, I did not know any veterinarians open on Sunday, and neither my wife or I could take off work Monday. At the same time, as odd as it may sound to some, even ‘New Age’, I accepted Micho as family when I took him into my house and I accepted responsibility for him. I do not for a moment confuse a hamster for equal importance to my dogs, let alone my blood kin, but for all of that he is family. So I owe him the dignity and comfort I can provide, as little as it turns out I could do. He had let go of his bladder, so I cleaned him and his cage up again. I got him some choice lettuce and carrots and vegetable chips. I thought about getting him some apple bits, but I worried he might have become diabetic. I also changed his water bottle. I moved him to a quiet part of the house where he would not be startled by light or noise. I also figured this would make Jagan less likely to worry about him, and for all I like Micho, keeping my daughter happy is always a priority.

So here we are. Micho appears to have slept some, and he was a little better this morning, but he is still in obvious pain and will not eat. He’s still lying on his back, and he’s obviously been sweating a lot, something I had never seen a hamster do before; his fur is matted and damp. I hate to see him in pain, but I am not about to kill him on the assumption that he can’t get better. I want to make him comfortable, but I can’t justify spending hundreds of dollars to keep him alive, maybe, a few more weeks. Part of me thinks I’m being reasonable, but I hate to see him suffer. Part of me says he’s not much different than a mouse, but on the other hand I accepted responsibility for him as part of my household.

This situation reminds me that we sometimes do not have good alternatives, and no easy solution.

The Distance MBA – Revisiting the Decision

Spring is the season of new beginnings and renewal, and that includes consideration of continuing education. High school juniors begin to plan for college, high school seniors eagerly (or anxiously) wait for word from the school of their choice, and many adults examine the merits of going after a degree or an advanced degree. I noticed that a fair number of my readers here when I post articles on the MBA degree get here by way of a search engine that hit on the letters ‘MBA’, and no wonder – there is basically an urban myth that earning yourself an MBA is the ticket to a solid job with good money. So I have to start by shooting that meme down.

An MBA, no matter where you receive yours, does not guarantee you anything. You might be able to parley the degree and school name into an interview for a position, but if the company is even half what it should be, you will still have to prove your credentials to win the job, let alone keep it and succeed in the company. Getting your MBA is not the focus you should have, nor should you get too proud or worried about your school – you should focus on earning your MBA, as in learning, claiming, and installing the tools that a good program offers for the students willing to do the work and grow in skills and maturity. Consequently, anyone earning an MBA should, when considering the school, focus on what tools and opportunity for development that school offers. Take a look at the backgrounds of the biggest crooks and failures in business, and you will see that some of them went to top-reputation schools, while some of the sharpest and most savvy businessmen do not always come from Stanford, Wharton, or Kellogg.

Full disclosure here; I am finishing up my degree at the University of Houston – Victoria, and I chose that school for reasons that suited my case better than they might suit someone else. I like the school and would certainly recommend the prospective student give UHV a look, but even so my first recommendation is to know what it is that you need. It would be impossible to list everything, but as an example students just finishing their bachelor’s have little real-world business experience, and so need a program which offers interneship opportunities and brings in lecturers who run their own business, while students pursuing their MBA after working in management will want to find programs which offer tools they do not already have; in my case I wanted more work in marketing strategy, as that is an area where my resume was relatively weak. I needed a school that was not excessive in cost or difficulty; raising a family and working a full-time management job meant that a distance degree might be the most suitable vector for my studies. That said, I did some research and found that for business schools, the AACSB accreditation is critically important. The AACSB is the Association to Advance Collegiate Schools of Business, an international accrediting body that focuses on management and accounting schools. Founded in 1916, the AACSB is the most recognized body which distinguishes first-rate business and accounting schools; schools like theHarvard Business School and Rice and the University of Texas (and UHV) are accredited by the AACSB; schools like the University of Phoenix and Kaplan are not. This does not mean that every AACSB school is the same in stature, but I would recommend against earning an MBA at a school which is not an AACSB member.

There are three chief differences between the traditional on-campus schools and distance curriculums. First, let’s be clear that there is a lot of prejudice out there – there are companies which judge education by whether the school is prominent, especially for higher-level positions. There is a kind of cowardice in such thinking, the notion that simply going to a certain school produces a more qualified candidate, and such thinking – like all prejudice – demonstrates a weakness in the target company’s organizational mindset, but you’d better understand that such thinking does exist, and many students go to obscenely expensive schools in the hope that they can mke that factor work for them. While choosing your school on the basis of what it can actually teach you, and performing your own cost-benefit analysis in that decision, means that you will miss the chance to join some of these companies, it should be recognized that you probably would be miserable working at a company where thinking was so hide-bound that where you went to school somehow limited your abilities as a manager or accountant; I speak with some experience here, and such companies do odd things like imagine that working inflexible M-F 8-5 hours and requiring a full suit at all times were necessary ingredients for success in business. Claiming the tools and honing the skills that make you as effective as possible in your work will not only make you more marketable in the long term, they also lead to a great deal more satisfaction in your career.

The second difference of note between the on-campus and distance schools, is the way you take your classes. In an on-campus class, you show up for the class when scheduled, take notes and participate in live discussion, complete and turn in your assignments when due and take tests in person. For the online class, you take tests and complete assignments, but your attendance is virtual, which some people take to mean something easier than attending a physical class. First off, just like an on-campus class, you will sometimes need to log in at a certain time for a lecture or seminar. But what’s more, you can’t just hide in the back of the room when you’re unprepared for an online class, the way you can in a campus classroom; the system notes not only how many times you answer questions or comment in a discussion, it also records the actual answer or comment, so its quality and context are there for everyone, including the professor, to see. Online class discussions therefore tend to be more substantive and relevant to the subject matter and instructional themes than the more traditional classes. Similarly, an online exam may require security measures to prevent cheating or misuse of resources, but physical separation of students from each other and the presence of a proctor work to create better security than some campus examinations can boast. And just in case someone has it in mind to try to get around the security in an online class, don’t forget that in the end the class is designed to teach tools and develop critical thinking skills that you will want to call upon when you are a working professional years later. Think long-term, and apply every opportunity to developing ways to be your best in every respect. In the online class, that means a lot of reading, a need to be very self-disciplined, especially in time management, and to thoroughly follow-up on every chance to answer questions or dig a little deeper than you have to to set yourself apart from the ordinary student.

The third way in which distance learning is different, is the cost in money and time. Now again, I have to be blunt – there are various levels of schools you can go to, and the value of your degree will depend on how well that school suits your abilities and goals. If you have it in mind to become a Fortune 500 CEO within ten years of getting your MBA, the only schools worth considering that can help you in any real sense will be those mentioned in publications like BusinessWeek, Forbes, or the Princeton Review. You will spend upwards of a quarter-million dollars, and even then you get no guarantee that the degree will be worth what it costs you. Before anyone dives into such a program, however, I would recommend they consider their personal profile. In my own case, for example, UHV was a much more appropriate choice because of my work history and my bachelor’s degree from Baylor. That is, my profile is solid but not a top-tier CEO, while on the other hand my previous degree gave me some school recognotion, so that my first need in an MBA program was one which was AACSB-accredited, offered real-world applicability, and was cost-effective. I would frankly recommend students take courses at schools which have physical campuses; this allows you a way to take face-to-face courses when that is more appropriate to the subject matter, it avoids the apparent stigma of the online-only schools, and it raises the profile of the school in the nominal opinion.

The MBA in Modern Business

As I near the completion of my MBA studies, I am naturally interested in my prospects to make something of my accomplishment, besides the opportunity to cover my wall with some tasteful calligraphy. The news of late – say for the last year or so – has been increasingly dismal, especially for those about to graduate from school. I’ve been fortunate in that regard, since I have a job right now, but I do admit that it bothers me to think that all my work to earn an MBA might not result in any substantive improvement in my career profile. Then again, a few initials on a resume do not change the person carrying them. At best, they open the door to discussions with people who might be interested in the person who accomplished the degree. I have to say that some of the people in my class who are about to graduate with me, are not worth an interview in my opinion for any important position. This is because while they have collected the degree, they have neglected to incorporate the tools that make the salient difference in their qualifications to lead employees. This is sadly too common; far too many managers seem to think that management is about giving orders to someone else, who then is expected to do the real work. Such people are corporate vampires and they kill businesses. Obviously, a good interviewer should be able to screen them out and keep them far away from any position involving decision-making or course-setting. I have not only applied for many positions in my life, I have also done a lot of the hiring and interviewing, and I would say that overall, the ratio of qualified applicants to unqualified contenders is about 1 in 4. With higher-profile positions, that ratio becomes more acute, so that executive positions are likely to attract a candidate pool that is at least 95% unsuitable.
A lot of my classmates are, to be blunt, coasting as they see graduation approaching, and they do not understand that they need to make themselves valuable to the companies they wish to impress. The suit and the crisp paper for the resume are details, not the substance. The first mission of the MBA graduate is to make himself valuable for a company that agrees to take him aboard, then to work constantly to improve that value for the company. In short, be worth more than you cost, and exceed expectations as you progress in the company. This not only is what the company expects when they hire someone with an MBA, it’s also the best way to improve your profile for promotion. This should be obvious to everyone, yet sadly I see over and over again that many would-be executives place their personal responsibility and commitment to go beyond expectations as low priorities.
I made one ‘B’ my first semester at UHV, the same semester when I had emergency surgery and was diagnosed with cancer. Even so, I was disappointed in that ‘B’, and I worked hard to make sure everything since then was an ‘A’. My initial 3.66 GPA for the first semester has steadily climbed to 3.93 as I earned nothing but A’s. This was not because it would matter to anyone but me; so far as I know there are no rewards for a high GPA beyond knowing you met the grade. But I have made sure to learn every concept and acquire every tool that was possible, so that when I leave with my MBA I will be much more capable as a manager. That, when everything is said and done, is the value of a Masters in Business Administration, no matter the time or place.

The Case Competition

This post may not interest that many people, but I am enjoying this final stretch of my MBA pursuit. The Strategic MBA at the University of Houston – Victoria culminates in a capstone course which includes a case competition. As you might expect, I mean for my team to win that competition.

There are basically three reasons why I want to win the MBA Case Competition. First, the practical point – there is no ‘Dean’s List’ for MBA candidates, we do not graduate cum laude, magna cum laude, or summa cum laude, and while a strong GPA is nice, no employer really cares about it; since the necessary GPA to graduate is 3.0 or better, everyone should have a nice result for their efforts (mine so far is 3.933, if I get A’s in both classes this spring I can finish with a GPA of 3.9412). The only way to stand out in the graduating class of MBAs, is to place in the competition.

The second reason is personal motivation. I think I am one of the smartest and hardest-working students at UHV, so I’d better do my best to show that in my results. Besides, who doesn’t want to finish strong? And third, you never know when you need to look for work, and adding honors to your resume is always a good idea.

The competition, for good and bad, is relatively simple. Each 4-person team will prepare a paper for the target company, in our case PetSmart. We started working last month on the project, so everyone will have three full months to get their project show-ready. Of course, that lets the slackers catch up so our team will just have to be better in depth and in quality of analysis. That’s the second major part; the presentation. A lot of folks won’t rehearse enough, or will assume that their paper is enough to work on. Fact is, however, a good presentation may use the same data, but selling it to judges (or in real life, clients and superiors) means preparing the information to be easy to understand and compellingly persuasive. And of course, we can’t forget the Question and Answer session after the presentation, which can make all the difference between a good team and a winner.

Since it’s such a big deal for me, I will be writing more about the case competition this Spring. Hope it’s worth the read!

A Fool and His Influence

Barack Obama once again showed why he is not up to the job, when he decided to personally antagonize radio talk show host Rush Limbaugh. This latest decision, consistent with most of Obama’s judgment calls since winning the White House, has once again shown President Obama to be the most paranoid and divisive President since Nixon.

Let’s start with the mechanics of Obama deciding to attack Limbaugh. Yes, Limbaugh mocked Obama’s stimulus plan and said he hoped Obama would fail, since in Limbaugh’s opinion Obama is a socialist who is a threat to the United States. That, however, is Limbaugh’s right as a private citizen, to hold his opinion and speak it freely, even into a microphone on a popular radio talk show. It is not appropriate for government officials to appear to be oppressing free speech, but that is precisely the move Obama chose. On January 23, President Obama demanded that Republicans not even listen to Limbaugh’s show if they wanted any chance of participating in the stimulus bill discussion.

For all the false claims that President Bush was a fascist, this action by Obama comes far closer to actual fascism than anything even imagined in the last decade. President Obama not only painted his administration in the colors of suppressing free speech and attempting to stifle open debate on critical legislation, he inadvertently raised Limbaugh’s influence profile to that of the national government. Rush Limbaugh’s identity went overnight from ‘annoying self-righteous individual’ to ‘legitimate opposition leader’, because in his attack the president chose to treat Limbaugh as someone as worthy of his attention as any head of state or political faction. Obama could have ignored him as a no-account nuisance, the way most presidents ignore the noisy jibes from wanna-be populists, but instead he accomplished the exact opposite of his intent.

The secondary effect of Obama’s latest blunder was a further bullet in his façade of bipartisan leadership. The Telegraph in England, for example, noted that “after less than a week in office, Mr Obama's presidency is already encountering the very partisan bickering he had pledged to stamp out during his first 100 days.” The Telegraph further noted the dishonesty of Obama’s pretense by noting that “the president responded with a clear signal that he is prepared to ram the bill through without the bipartisan consensus he promised to construct, telling Republican leaders from the House of Representatives: "I won. I'm the president."

Barack Obama somehow fooled himself into imagining that no one would say bad things about him once he was president, that he would face no mockery or ridicule as the highest-profile figurehead in the world. He somehow believed that he could pass himself off as ‘post-partisan’ while simultaneously demanding that everything be done his way. Anyone familiar with American politics, let alone recent events, would have known better, but Obama bought into his own spin too far to accept reality when it did not march in his parade. As a result he diluted the value of his own brand, and tacitly granted equal merit to an unelected entertainer. At this point the best course for the Obama Administration would be to quietly back away and pretend the dustup never happened.

The second major reason that Obama’s attacks on Limbaugh were unwise, is the effect that action had on the debate surrounding Obama’s plans. Loading a trillion dollars more debt onto the taxpayers for a bill which guaranteed not even one private-sector job, did not save one house already facing foreclosure, and which made no effort at all to save even one private industry company in crisis, is more than controversial on its own merit; the Obama Administration needed to lead the debate on its merits, not allow itself to lose focus and create doubt as to how well it planned its policies. Reacting emotionally to a talk show host sends out the signal that Obama is worried about anyone looking closely at his proposals. Certainly the apparent contradictions are causing people to wonder about the plans, and not just talk show hosts:

In the midst of signing and proposing massive spending bills, the president announces his plans to cut the deficit in half

The president urged the Congress to pass his massive ‘stimulus’ package with admonitions that delay could be catastrophic, yet the bulk of the bill’s effects won’t occur until late 2010 at the earliest

The president has repeatedly promised that 95% of “working families” will see a tax cut, but only 66% of working Americans actually pay any taxes to begin with
The president has announced plans to close the terrorist incarceration facility at Guantanamo, on the basis that the site was inhumane, yet investigators have determined that the Guantanamo site was not inhumane, indeed was superior to many places the inmates would be transferred to. Yet the shut-down is still scheduled to occur, even as the Obama Administration admits that in some cases it considers rendition to be an appropriate option

Given the lack of civil discussion on the issues, a reasonable observer might well conclude that the Obama Administration is not able to defend its policies on a rational basis. The juvenile spat between the president and the radio host only adds support to that belief.

Genuine Trumps Gimmick

The failure of Barack Obama to comprehend the financial crisis, let alone deal with it effectively, is crumbling the façade of his competence as President. His minions, as a result, are going through the classic first stage of grief and loss, the stage of denial. That denial is performed through their ludicrous comparisons of Obama to Ronald Reagan, as if the blundering and desperate moves by the present President can be said to be reasonable and prudent, let alone considered the equal of Reagan’s leadership. To understand why the comparison is not valid in any sense, we must consider the nature and causes of the two presidents’ economic environments.

Ronald Reagan and Barack Obama each inherited a recession when they came to office. That’s not unusual, though – Presidents Kennedy, Ford, and Bush also inherited recessions when they arrived at the White House, and in fact Presidents Taft, Cleveland, Buchanan, Van Buren, and Washington were also greeted with recessions upon their arrival (in Cleveland’s case it was upon his return to the White House). Recessions are cyclical, and so far no one has been able to prevent them from happening, although a bad president can make things worse if he bungles the job. The point here, is that recessions are not ‘republican’ or ‘democrat’ in their cause per se, but should be examined in the specific causes of each and their conditions created upon the nation.

The recession which greeted Barack Obama was caused by three forces – the burst of the housing bubble, the credit crunch brought about by bank speculation, and the liquidity crisis in the domestic auto industry. The initial symptoms were an unemployment of 7.2% in December 2008 (7.6% in January 2009) and a 3.85% inflation rate.

When Ronald Reagan took office, the recession he faced was more profound, because of the heretofore unimagined combination of unemployment and inflation rising at the same time. The chief causes of that recession were the rising price of oil and instability in the Middle East. The initial symptoms were an unemployment rate of 7.2% in December 1980 (7.5% in January 1981) and a 15.81% inflation rate.

You cannot change what you cannot control. This is the essence of why Reagan’s economics were so radical. Reagan established four general goals he believed were essential to setting a sound economic course:

1 - Reduce the growth of government spending
2 - Reduce the marginal tax rates on income from both labor and capital
3 - Reduce regulation, and
4 - Reduce inflation by controlling the growth of the money supply.

While not perfect in its results, Reagan accomplished all four goals and established conditions for an unprecedented boom in business and prosperity.

Obama’s plan is far less complete, and in spirit opposes every one of Reagan’s goals, by massively increasing government spending, raising taxes on both individuals and corporations, drastically increasing regulation and driving inflation upward, deliberately so in the case of energy and finance costs. Essentially, President Obama is rolling the dice on some old notions of Keynes, hoping that simply spending massive amounts on his pet projects will renew economic prosperity by simply spending money. Any parent with a teenager knows the flaws in such thinking; spending is not desirable in itself, but only when it creates the necessary results. In the individual case, this means you pay the rent or mortgage and you buy your food, before you ever entertain the idea of buying that SUV or investing in that can’t-miss IPO. When a teenager wastes his money, he is depending on his parents to cover his needs, but the parents have to be responsible themselves for keeping sound priorities and enforcing discipline. In the case of the government, it’s necessary for government to be cautious about spending and to think through its goals and abilities before engaging on a new bout of projects. It’s catastrophic, nothing less, when a government becomes reckless in spending and in committing its resources without consideration of the critical needs. Obama’s “stimulus” package spent almost eight hundred billion dollars – before interest – without creating even one private-sector job, without addressing even one home foreclosure in process, and without even addressing consumer confidence. This is the government version of trying to justify spending mortgage money on a hooker.

Everything has to be paid for. That’s as basic as economics gets, yet somehow it gets ignored when government is putting together a budget. Literally trillions of dollars are being committed with no reasonable explanation of how it will be paid. When anyone, even the President, tells you that “only the rich” will see their taxes go up, do the math. There are simply not enough “rich” people to pay all these costs and bear these new taxes.

The historical record warns that the massive tax hikes envisioned by the Obama Administration will result in less revenue than they intend to collect. This is because what gets rewarded gets repeated, and what gets punished stops. And in practical terms, this means that when people and corporations are punished for succeeding financially under US tax law, they will find alternatives to paying taxes. They will move business off-shore, they will stop spending money on goodwill initiatives, they will hire fewer people and pay less to their employees, because the government is destroying their effective business models. Obama’s heavy-handed plan for tax and spending with government in control of every major initiative, has no successful model in practice in the world.

Comparing Barack Obama to Ronald Reagan is pathetic and arrogant, to say the least. While it must be admitted that Obama is a far better actor than Reagan ever was, he cannot hope to be even half the leader that Reagan was.

The Trust Deficit

Perhaps the most immoral choice made by democrats in the last ten years was the decision to attack Republicans solely on the basis of partisan goals. Consequently, the hundreds of democrats in the House and Senate who voted for the Iraq War feigned indignation at the war’s costs, ignoring success and the threat of terrorism in order to gain political leverage. Pleas by Bush to address Social Security and Medicare reform went unheeded, although democrats would later blame the President for their own dishonesty. Democrats nominated a man they knew to be unprepared for the office, simply because their lust for power was far greater than their last few glimmers of love for their country. Nine of every ten democrats has sold his soul for power, and could not care less how many Americans he hurts, so long as he gets re-elected.

Republicans see the rising anger in the eyes and voices of Americans, and many of them think they can turn this to their advantage in 2010 or 2012. But they forget how far they have left the road of moral leadership. The GOP tolerated Larry Craig, they resisted President Bush when he led like a conservative but rode along when he proposed liberal budgets and found no voice to oppose earmarks or corruption in politics. The GOP likes to imagine they are the party of Reagan, but not one of them evokes comparison with the Gipper. True, John McCain would have been a significantly better choice for President than Barack Obama, but that is only because Obama is so horribly incompetent and dishonest; there was no real conservative among the leading candidates, partly because none of the GOP leadership wanted one. America has not yet forgotten how few of its promises the republican party kept during the years it held power. So only a great fool, which is to say a politician, would imagine that incompetency and dishonesty by democrats would mean a return to the pachyderm’s glory days. It’s just not going to play out that way.

Ronald Reagan was probably the greatest President of the twentieth century, not least because he was the only president to rebuild much of the public trust in the office. But since he left office, the brand has quickly eroded. Some of that comes from character assassination, especially by the mainstream media, but it was also spurred by an incredibly clumsy history of bad judgment, personal arrogance, and rejection of common-sense thinking. It’s difficult to imagine a president counting terrorists and despots as moral equals to democratically-elected leaders, or imagining that Moscow would hold a worldview comparable to that of the average American, or promoting laws to essentially cause banks to ignore risk evaluations in mortgages, or to ignore radical terrorist groups which publicly declare their desire to kill Americans, or that massive government programs would result in effective improvements in education and medicine, or that terrorists should enjoy the same civil rights as decent citizens, or that the best way to create new employment would be to punish the people who create and run companies, but all of those things have happened.

To put it plainly, the American people do not trust the politicians. Democrats grabbed power in 2006 and the White House in 2008 largely by lying about the situation and what they promised to do, but they will only be voted out if the public sees a more trustworthy alternative. If republicans truly want to regain the power they had before, they will have to show that they have reformed and are worthy of the responsibility. As for the democrats, they can and will play on fear and prejudice to hold onto their seats, but in the end this will kill their party unless the few democrats with scruples left, the ones who remember what their party once stood for, reform their party as well. It has become difficult to kill off an obsolete party, but the Whigs died because they became completely useless to the nation; the republicans and democrats had better learn from that history. If things continue as they are now, then no matter who hold office, the public will treat the federal government with all the contempt it has richly earned, and eventually no policy or program will have a chance of success, because its source is an illegitimate government, a bastard set of dictators.

Apology for Poor Post Production

I have a cold, an 8-year-old preparing for her first TAKS tests, and I am also working on my presentation for my MBA Case Competition later this semester. As a result, what blog posts I have attempted to produce have generally been below acceptable, and as a result I have been slow in posting this month. I hope to improve production as circumstances improve.

The Lord of Business

People are scared, really scared. The US economy is enduring a recession at a time of multiple crises, the Administration which took office less than a month ago has shown no grasp of even the fundamental facts and forces at work, and the Congress has added a massive spending bill which has no direct effect at all on any of the root causes. Europe is also in trouble, with rising unemployment and its own financial crisis. Japan has lost more than twelve percent of its GDP in the last year, and China has laid off more than twenty million workers because of the global crisis. There is fear in the finance sector, in housing, in retail, manufacturing, and in government. Unemployment is rising in every industrialized nation and concerns about the future heighten almost daily. Some folks are even saying that the debt is so great, that all the money in the world cannot pay it.

And it is at that point of worry and doubt, that the pressure in my mind is abruptly relieved, and I realize we are trying to control too much. Money, after all, is an artificial construct, a human device used to describe and direct an intangible force. For all our formulae, theories, and even our experience, it must be understood that money is not something we can completely control; at best we can influence it, and we are not at our best just now.

That’s not to say that the effects of mistakes are not real. Indeed they are, but when seeking to address large-scale problems, even multiple crises as we see here, we must understand our limits, and more to the point remember that there is one who controls the Reality beyond our comprehension. Yes, I am talking about God.

God and Finance are not often paired together, and most of the time that they are, it is by a speaker who holds commerce in rather strong contempt. But we should know better. Abraham was beloved of God, and God made Abraham a wealthy man. God made Job wealthy, and David, Solomon, and countless other righteous men. It’s a sin to love money, but not to succeed in business. It’s wrong to ignore the needs of others, but no sin to provide for your family and community. Further, if biblical accounts are to be believed, the Lord has often shown favor to individuals, in business as well as other endeavors. The book of Genesis notes the rise of Joseph on the strength of business acumen, the same for Abraham, Job, and so on. Details are not given, so I am not about to try to sell the notion that the Bible has a blueprint that anyone can use to get rich, but I am saying that there seem to be forces at work that we can only partly comprehend, let alone control. The Bible contained the instruction for the year of jubilee, in which all debts were forgiven. It may seem simplistic to us, but such a model allows for people to look forward to a point in time when they can put mistakes and bad fortune behind them. Without such a model, it becomes difficult for a person to recover from even a single bad event, if it should be large or long enough in severity or duration. The careful reader may even note aspects of the modern bankruptcy code in the ‘jubilee’ concept.

So what concrete advice would I give to our leaders, as we wrestle with this present situation? Millions of families are in danger of poverty, or losing their homes, and of seeing their life savings disappear, and these are real, undeniable problems which demand effective, immediate answers. Is it as simple as praying to the Lord and trusting Him? Essentially, yes.

I do not mean pray and wait for the Lord to make it happen while we sit around and do nothing. Sorry folks, but we are here to work, and work we must, but I will surely say it’s a far sight better to know we have a patron who cares for our welfare, who wants us to do well, and who hears our prayers – and answers. We may not understand the answer, we may well not like the answer, but we shall be answered, and we shall find our way according to His grace. Those who refuse to ask His help will do as they choose, but I would not invest my money with anyone who thinks he can out-think God.

It also helps, I think, to consider whether what we are doing is pleasing to the Lord. I don’t think many of us would be foolish enough to imagine that the Lord considers alcohol and immoral entertainment to be as worthy a place for our investment as construction and manufacturing, much less spending money to help protect children from disease and support farms. Don’t spend money that is not yours, make sure you are honest and complete in reporting to investors what you do with their money. Old-fashioned values, those, but that’s what made us a strong country in the first place.

Pray to God, and get to work. And don’t worry about the politicians, in the end they will either get right with God or they just won’t matter.

Can You Read This?

Google has blocked me from seeing my own blog. I can post, but I cannot read my own blog.

Just out of curiosity, can you read this? Just curious about what's going on.

Thanks.