Tuesday, September 30, 2008

Do we really want this?

Ok folks, I would like you to indulge me. Please read the article below in full. The article is a rather long editorial from Investor's Business Daily and it is WORTH THE READ. I know many of you are Obama supporters, but I want you to think beyond the rhetoric of the parties and really ask yourself do we want the programs he is proposing?

My opinion...Obama's programs and words may sound good but it is a lot like a frog placed in a pot of water on the stove with the heat slowly turned up. The frog never realizes that he is being cooked alive until it is too late. We are the frogs.

Do we want to go into Socialism or remain in Capitalism? That is what this election is all about. It is as simple as that. America's growth and prosperity is a result of capitalism. There is not one country in history that has achieved as much under a socialistic economy. Every country that has experimented with socialism has resulted in misery and suffering for most of their population.

If you disagree, don't comment with hate or anything. Do what you must, vote your mind (but not your heart) and if the below doesn't change your mind then so be it...we'll just agree to disagree and talk about this decision in 20 years and see who is right. It will take that long for the water to get hot enough to cook us just like this financial crisis took that long to come to a boil.

Please do read the below and then decide...

If you do still decide to vote Obama, do me a favor, put all of your money into some trust or something. Hopefully it will grow to be large enough to pay for my portion of the bailout that will be needed when these programs blow up in a few decades. All this on top of the Social Security bubble that is going to burst.

--- From Investor's Business Daily Opinions - 30 September 2008 ---

During Friday night's debate in Mississippi, Obama disparaged what he called "this notion that the market can always solve everything and that the less regulation we have, the better off we're going to be."But the subprime crisis Washington is dealing with is the result of three decades of the federal government pressuring banks — via the regulatory demands of the Democrats' 1977 Community Reinvestment Act, which was expanded by Bill Clinton — to make tens of billions of dollars in bad loans to poor people with lousy credit ratings.

It was Democrats' regulatory and litigious assaults upon the mortgage market in pursuit of "social justice" that left our economy in its precarious position of today; indeed as an attorney, Obama himself in 1994 represented a client suing Citibank, accusing it of systematically denying mortgages to blacks.

But if the taxpayer rescue of Wall Street and Uncle Sam's taking over the banking system scares you, the broader socialism planned by the Democratic presidential nominee should leave you petrified.

Here are a few examples, with price tags provided by the National Taxpayers Union Foundation:

• Politicized financial regulation: Obama would establish a Financial Market Regulation and Oversight Commission to "end our balkanized framework of overlapping and competing regulatory agencies" and "which would meet regularly and report to the president, the president's financial working group and Congress on the state of our financial markets and the systemic risks that face them."
Translation: more centralized and heavy-handed regulatory power over businesses for Washington.

• Government-managed medicine: Even left-leaning health care experts concede that Obama's expanded coverage plan will cost $100 billion; with no real cost containment, that will mean a second wave of reform that could impose full socialized medicine on our country.
Obama declares that "governments at all levels should lead the effort to develop a national and regional strategy for public health, and align funding mechanisms to support its implementation."

His plan also presumes racial discrimination, "requiring hospitals and health plans to collect, analyze and report health care quality for disparity populations and holding them accountable for any differences found."

• Community health centers: Your local doctor may become obsolete in Obama's brave new world in which $6.7 billion will be spent over five years building "community health centers" featuring "preventive, diagnostic and other primary care services."

• Antitrust enforcement: Promising this "is how we ensure that capitalism works for consumers," a President Obama would "stop or restructure those mergers that are likely to harm consumer welfare, while quickly clearing those that do not" and "working with foreign governments to change unsound competition laws."

Behind this harmless-sounding rhetoric is the misguided belief that the government must shield companies of its choosing from their competitors' lower prices and innovative practices. Courts and government bureaucrats under Obama could be expected to use antitrust to claim the existence of imaginary monopolies and squash mergers and other business transactions.

• Required IRAs: Under Obama, "employers who do not currently offer a retirement plan will be required to automatically enroll their employees in a direct deposit IRA account."
Costing $292 billion annually, according to the NTUF's latest analysis, Obama's plans are far more than just "change"; they would transfigure American society into full-blown socialism. With little more than a month to go before this most consequential election, voters seem not to appreciate the danger.

• Dictatorial energy policy: Obama would spend $150 billion over a decade "to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids" and create other ways to force uneconomical forms of energy on the auto and oil industry.

A Clean Technologies Deployment Venture Capital Fund would artificially finance the environmentalist pet projects in which private investors have little faith.
Negating the global labor market, the Illinois senator also promises to "provide specific tax assistance and loan guarantees to the domestic auto industry to ensure that new fuel-efficient cars and trucks" are built within the U.S.

• Bullying utilities: The Chicago Democrat would require that 25% of electricity consumed in the U.S. be "derived from clean, sustainable energy sources, like solar, wind and geothermal by 2025." Unless those alternative sources get cheap fast, that likely means a big escalation in consumers' electric bills.

Obama also proposes "to 'flip' incentives to state and local utilities by ensuring companies get increased profits for improving energy efficiency, rather than higher energy consumption."

• Billions for teachers unions: Instead of school choice for parents, in which competition would improve public educations and give the poor access to private education, Obama proposes "an accountability system that supports schools to improve, rather than focuses on punishments."
His five-year, $90 billion education plan would dole out "a $200 million grant program for states and districts that want to provide additional learning time for students in need," double federal funding for afterschool programs, provide "professional development and coaching to school leaders, teachers and other school personnel," "develop multi-tiered credentialing systems that encourage principals to grow professionally," and cook up other ways to keep public school teachers on the clock longer.

Uncle Sam would also "collect evidence about how prospective teachers plan and teach in the classroom" in an Obama administration.

• Required public service: In return for the federal government paying the first $4,000 of college tuition through a tax credit — which would be tough for most American families to turn down — Obama would require recipients "to conduct 100 hours of public service a year."

• Required sick leave: Spending $1.5 billion over five years, Obama would "encourage" the states to adopt paid-leave systems that "guarantee workers seven days of paid sick leave per year."

• Thought police: In what sounds like the outdated and unconstitutional Fairness Doctrine on steroids, Obama would "encourage diversity in the ownership of broadcast media, promote the development of new media outlets for expression of diverse viewpoints, and clarify the public interest obligations of broadcasters who occupy the nation's spectrum."

What would the "public interest obligations" of liberal Democrats' opponents within the media end up being in an Obama administration?

• Green Corps: Barack Obama would spend $390 million over five years to fund "an energy-focused Green Jobs Corps to engage disconnected and disadvantaged youth . . . to improve the energy efficiency of homes and buildings in their communities, while also providing them with practical skills and experience in important career fields of expected high-growth employment."
It's a quasi-paramilitary organization dedicated to environmentalism that promises inductees that they would be getting practical employment training for future "green jobs."

• Teaching parents parenting: The senator would spend $300 million over five years establishing "Promise Neighborhoods in cities that have high levels of poverty and crime and low levels of student academic achievement." A key feature would be "parenting schools for parents."

• Housebuilding army: the Youthbuild program would be expanded from 8,000 to 50,000 over eight years at a cost of $257 million to "construct and rehabilitate affordable housing for low-income and homeless families."

• Patent reform: Obama's idea of "opening up the patent process to citizen review" would make it much tougher for businesses to challenge the government's judgment on the ownership rights of an invention, which will have a negative effect on the incentives to innovate.

• Private parklands regulation: Obama would "do more to encourage private citizens to protect the open spaces and forests they own and the endangered species that live there . . . and encourage communities to enhance local greenspace, wildlife and conservation areas."
The Obama campaign uses the word "encourage" over and over in numerous areas of policy. Expect it to be the form of encouragement practiced by Don Corleone — making you an offer you can't refuse.

• Autism czar: If you weren't convinced that the Democratic nominee intends to use the federal government's powers to solve every known problem, consider his promise to spend $2.5 billion over four years on appointment of an "Autism Czar" to "ensure that all federal funds are being spent in a manner that prioritizes results."

Sunday, September 21, 2008

The fat lady has not yet sung

My friends we are going to feel the effects of the bailouts this year for a very long time to come. I think I am going to quit my job and start another business and make it big enough -- there is no risk -- the government will back me up I'm sure...

There are many lessons that need to be learned from the financial crissis. One is that we have to realize there is not an endless supply of money. It was so easy for the Washington nimrods to bail out companies...$85B here, $100B there...no worries...like I always joked about in college...we have plenty of checks. But when you add up numbers with that many zeros it eventually gets to a point of no return.

Remember, it was OUR money that just bailed out these businesses...

If you were paying attention this week you no doubt had a moment when you thought all was going to end from a financial perspective. It really was that scary.

Now, are you ready? Are you sitting down? This is not over yet.

We have a coming crash that is going to make this week look like child's play. Social security. Just as with Fannie Mae and Freddie Mac, the Social Security warning bells have rung over and over, but no one has been able to deal with it due to politics and lack of courage. The amount of money that will be needed to fix Social Security will be significantly more then that poured into the bail outs this week. Can you say 80% tax rate?

I was reminded of Social Security this week when I heard something Joe Biden said. I do try not to listen to him but this one stuck. He said "Imagine if all the money that he [John McCain] wanted to put in the market were in the market today," Biden said. "Tens of thousands of elderly women would be in a worse situation than they are in today."

So this blow hard would want Government to do something and not the private market. Just like the Government did such a wonderful job overseeing the housing and financial markets...right?

Friday, September 12, 2008

Citizen government?

Ok, try to forget any political bias while you read this and I will try to do the same as I write.

The reaction to the Sarah Palin selection for Vice President has been interesting to watch. Again, stay out of the political argument and sit back and re-assess what we have heard and seen over the last few weeks.

Here is what I see...

The established political class reacting to a new comer. Our government was supposed to be based on the idea of service. Meaning, citizen's taking a break from their normal lives and serving in government temporarily. When the service was concluded, they are supposed to return to their normal lives and let another take his/her place (ok it was "his" for the longest time). We are so far from this vision...we now have mainly established, career politicians who view their main job as getting re-elected. Actually, I may take up a mini research project to find out how many of the 535 nimrods on the Hill are career politicians versus serving citizens.

So back to Palin...

It is simple, the establishment is threatened. If Palin is successful in becoming VP, then a non-elite, rube, ordinary, gun toting, motorcycle riding, beauty queen will be second in command. How can that happen when so many ivy league educated people are "smarter" then her? It is that very arrogance that has led to her popularity and the establishment still doesn't get it.

She is a regular joe citizen intending to serve...

Friday, September 5, 2008

Can we put the government on the South Beach Diet?

We are so far from the original vision of a small government. The evidence is everywhere and it was crystalized with an article I read in Investor's Business Day. It was depressing. The article discussed A. Gary Shilling's, an economist, research on government dependency. Mr. Shilling dove into data about how involved government is with our daily lives. He found that as of 2004 over half of the country (52.6%) depended on the government in one form or another.

Intentional pause.

Think about that for a moment.

Over HALF of the country depend on government. Consider this:
  • 20% of Americans hold a government job or a job reliant on federal spending
  • 20% receive Social Security or a government pension
  • ~19 million others get food stamps
  • 2 million receive subsidized housing
  • 5 million receive education grants.
This dependency has been growing steadily from the 1950's when it was 28.3% until Ronald Reagan took office when it hovered around 55%. It then declined with Reagan's smaller government push to about 49% in 2000 and has once again crept up. The expectation is that we'll return to 55% in the next 10 years if the current trends continue.

God do we need change...save us from this socialistic trend and to a freer life...