Tag Archives: economy

2 Cents Worth On Life Its Ownself

We would stop doing these except for the fact that life and the headlines keep supplying fodder for the idle mind.

We are constantly reminded by the Fed and Geithner (the tax expert) that the percentage of US debt is less than it was during WWII and that we worked our way out of that debt without undue difficulty.  What they conveniently overlook is that all that debt then was owed to our own citizens.   We bought War Bonds.  We didn’t owe that money to the Chinese, Japs or the Europeans.  Take a look at the St. Louis Fed’s economic reports to see how much of that debt is held by foreigners today.  Remember debt comes with control and restrictions by your lenders.  We’re tied up in knots today and don’t even have a coherent plan to pay our debts. 

We are bombarded these days with information about a chronic obeisity problem in the US.  On the other hand we are told that we have all these millions of kids that are undernourished and go to bed hungry ever night.  Something about that picture doesn’t add up.  We have food stamp programs, free breakfast and lunch programs and of course the general welfare programs out the wazoo.  Olcranky would posit we might have a bad parenting problem of large proportions but doubts we have a food problem.  Methinks we are looking at the wrong problem.

We like to punish crime but we love our privacy.  The latest round of insider trading cases brings this dichotomy to the fore.  A couple of the accused apparently destroyed their computers.  You watch, they will be prosecuted for obstruction of justice rather than for the actual crime of insider trading.  Would you want someone to be able to come to your house and take your computer and look over everything on it based only upon an allegation that you did something wrong?   Does the info on a computer equate to hand written letters that have always been admissable as evidence?   With access to your computer and the ubiquitous surveillence camers everywhere just how much privacy do we have left?   If the government someday requires all transactions to be by debit or credit card will we have any privacy left.  The Feds already require in most instances that welfare payment and Social Security payments be made by direct deposit to your bank.  Someday we may have nostaligic feelings about the old days when we could use cash and do as we pleased without government looking over our shoulder into our lives.

There is only a year to go before the ban on incandescent bulbs takes effect.  Hope you are ready to begin paying three times as much for the LEDs and other fluourescent bulbs.   Of course you can’t just throw them into the trash either if you are following the rules.  Remember they are a harzardous waste.   Welcome to the brave new world of centrally controlled and planned economic life.  Is it any surprise that Emmelt of GE was appointed to the new economic team of the guy in the White House?  How many of those new bulbs will be sold each year and how many will be manufactured in the US?   But you can take pride in being a soldier in the “Green” fight against Global Warming.

Another Super Bowl and another mangling of the national anthem.  Why can’t they just sing it like it was written.  The song was not intended to be destroyed by some scat interpretation.  Of course that approach also eliminates the joining in by the audience.  It is inspiring when thousands join together to celebrate the nation but confusing or insulting to hear it become the platform for a performer to demonstrate their lack of singing ability.  I doubt Pavarotti would do it that way.

We’re told that inflation is not accelerating.  Of course the rise in prices doesn’t include food or gasoline.  You are reminded that food and gas was eliminated from the government calculations for inflation during the Carter years.  They argued that food and gas prices were too violatile and subject to swings and therefore were not a true indicator of the inflation rate.  So with just a little accounting gimickry the inflation rate looked better!   But of course even that didn’t work.  When Reagan took office the inflation was running about 13% which was and is destructive to any economy. 

We had snow last week and I got my rusty kister up into the attic to found the old sleds that haven’t been used in decades.  I took them over to my daughter’s house for the grandkids.  It was a pain to do but I was snowed in pretty much anyway.  But it was all worth it.  A couple of days later my daughter told me that the kids said to her that playing with the sleds in the snow was their “best day they ever had”.  The joys of being a grandparent can’t be matched by anything.

It was a better and happier world when the phrase QE 2 conjured up images of a luxurious cruise on that magnificent ship as opposed to the money and debt manipulations of the Fed.

How many old 16 and 8 millimeter cameras are sitting around in trunks in  attics?  Those old black and white films recorded events from a great time and recorded the happiest of family moments like trips, birthdays and weddings.  The films will slowly desintergrate into dust.  Let’s hope the memories they recorded don’t.

The US has always been the foremost proponent of multi-culturalism.  But then we were outdone by the Europeans after WWII.  Now Cameron has stated a major pullback from that view.  He offers that a nation must have a singular cultural identity and social purpose.  Multi-culturalism fragments that idea of of “nationhood” and results in elements of society working against the generally recognized core beliefs.  He is right of course and it will be interesting to see how Europe proceeds from here.  Will the US come to recognize that the new comers need to be “Americans” and not some ____- American?

God Bless from the road of life.  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

We take a back seat to no one including the New York Times or Wal-Mart for our cut-rate prices for opinions gleaned from the tomes of the ancients to the garbage heap of the daily news.

The recent news of the gas line explosion was tragic to be sure but it calls to mind the gas explosion of the New London School in East Texas in the depths of the Depression.  In the mid ’30’s the local school exploded one day with the deaths of over 200 kids.  The entire community was devastated as one can imagine.  This was in the days before they added methane to the gas lines so you could smell the odor and have some warning of a leak.  You can look up the old photos of the event. 

Military power and political goals have worked hand in glove since the dawn of recorded history.  The annals are replete with a big army showing up on someone’s doorstep and then the negotiations begin.  Without a battle the larger force more often than not got its desired object.  Military power doesn’t always have to be used, just visible and credible to serve the political purposes.  Read your Bible for many of these lessons.  With this in mind it is concerning to see the steady buildup of the Chinese military power both its land forces and especially its Naval power and the new missile systems it is deploying.  We are only a couple of decades away from the Chinese exerting influence over the entire Pacific area by the sheer force of its military power and the projection of that power.  Remember we never know for sure what they are spending on their military we only know what the Communist Party wishes to have published.  A real concern for our children.

The recent Turkish vote on their Constitutional amendments put the nail in the coffin for the foreseeable future for entry into the Common Market.  The vote was a victory for the Islamists pure and simple.  The Germans are already very worried about the number of Turks in their land and the influence of Islamists views spreading.  The Germans will not agree to their entry with this tilt to a more radical Islamist governing body.  France is nearly as repelled at the moment so the Turks will turn more to their Muslim neighbors for future development.  Good luck with that.  They missed a historical moment to truly join the modern world with that step back into the dark.

Many on the left in this country wish for more government involvement in our economy and a far larger role for government employment policies.  They want even more people working directly or indirectly for the government.  Big government, big control.  They like it that the slice of the GDP controlled by the Federal government is growing.  Curious that Cuba which has complete control of the economy by central planning is laying off 500,000 workers with the comment that the government payrolls are “bloated”.  And we are following their example?   Guess some believe we are nothing but lemmings who will follow any Pied Piper promising easy money, to mix some metaphors.

Is it just me but is professional football becoming more and more like the WWE?  These celebrations for the most routine of plays is very annoying and completely unsportsmanlike.  Play the game, do your assigned job and then get back to the huddle.  Those tattoos look like a Las Vegas strip gone wild.  Explain those to your grandchildren some day.

From Proverbs to Jefferson it has been noted that debt is slavery.  Is the US on the path to enslaving all its people?  Do the math and you will see the tens of thousands you owe for your share of the public debt, not counting of course the “trust” funds in the Social Security agency.  You didn’t put this on your credit card the politicians did it for you and in your name.  But we elected them.   Lots of us don’t like being enslaved by politicians from all over the country who don’t represent our views.  Why can Sanders and Schumer cause me to go into debt?  I didn’t even vote for or against them and can’t vote them out no matter how much I disagree with their views.   Pelosi and the others keep using my identity to charge on my credit card for things I don’t want.

One of the most peaceful places to spend a summer afternoon is high in the Jemez mountains just west of Los Alamos, New Mexico.  Going north from Santa Fe you take the turn off to Los Alamos.  A visit to the museum is well worth the stop.  Then proceed north and west on the state highway toward Farmington over the Jemez peaks.  A few miles down the road you will come to a very large valley high in the mountains.  Believe me you can’t miss it.  It is about a mile wide and probably three miles long.  It is ringed with the aspen and pine trees and the  mountain tops.  The valley is lush with high grass in the summer months.  The cattle will be chomping it.  You will see the ranch house off on the far side of the valley.  It is peaceful and very beautiful.  It is also very unknown.  It is off the beaten trail of tourists.  It is a wonderful place to spend a few hours and contemplate your life and journey.  You can also fly fish in the stream running down from the mountains into the valley.  If God didn’t make this place then I want to know who is Mother’s Nature’s decorator.

Just like FDR made farmers plow up their crops to increase demand and prices, the cash for clunkers program required that all the autos traded in had to be destroyed.  Of course that made the prices for the reduced number of used cars go up. You and or a friend tried buying one lately?   You tell me if that program on our credit card really helped the economy?  http://www.olcranky.wordpress.com

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2 Cents Worth On Politics, Economics And Life Its Ownself

As always the nod to Blackie Sherrod, the greatest sports writer ever, and a very good writer in general.  With that we offer the following pearls of wisdom for digestion or indigestion as the case may be.

When will the powers that be finally read the Constitution and formulate a plan to effectively punish those Somali pirates?  Our Constitution gives us power to regulate and impose penal sanctions on pirates; its in Article One, section 8 for the curious.  We can impose such sanctions as we deem appropriate without the approval of the UN or anyone else.  Historically that meant a drumhead court-martial at the nearest friendly port for surviving pirates and immediate execution.  All nations have taken action against pirates over the millenia with approval for the world community because they are a scourge on all mankind.   We should implement a shoot to kill policy, make that area a “free fire zone” as they say today after a warning.   Survivors will be tried and executed by the military unit that captures them.  They are entitled historically to any other form of justice.  They are a menace to everyone and cold-bloodied killers.

Does he or doesn’t he have something to hide?  That is the question for Mr. Sestak.  He openly states that he was offered a job to withdraw from a primary race.   If true it is a crime, if not then he is guilty of exaggeration at best or slander at worst.  Did he think he could make such a comment and then  walk away like it was of no matter.  He clearly thought the statement helped him in his race or else he never would have uttered it.  He blurted it out.   But once out, it was a come on of the worst kind.  Now whether he likes it or not he has to open his kimono for all to see.   His refusal to be forthcoming could be construed as obstruction of justice by an eager US attorney but for the fact they are all Democrats at the moment.  Come on, Joe, show us what you got.

Sestak has a fellow traveler in ignoring the advice of Proverbs about keeping your mouth shut.  Mr. Blumenthal couldn’t resist pumping up his resume with false claims.  Any veteran whether he served in a combat zone or not deserves our praise and those same vets would not demean those who served stateside during their service.   But, but, but no vet ever claims to have served in a foreign combat engagement when he didn’t.  That is not done.  Millions of men during WWII never left American shores but they did serve but they wouldn’t go around claiming to have been on the beaches at Normandy when they were stationed at Fort Dix.  But for the Blumenthal faithful there is hope, Clinton lied under oath and was never prosecuted for perjury, so maybe Blummy will get a pass.  It says a lot about us, none of it good, if he does.

Wind and solar power are great things and maybe will flourish and grow.  But giving them giant subsidies is ridiculous. If it is a good idea it should make it in the free market.  We have been giving billions every year for that idiocy of ethanol and now it is solar and wind.  The Europeans are bigger of the idea of solar than we are and have given even larger subsidies.   Not me saying it, but watch the news and you will see those subsidies are coming to a halt quickly.  The European sovereign debt crisis has put the kibosh on those programs. They are decided that it isn’t worth it to fund those programs when they have to seriously cut spending.  It is the low hanging fruit.  They already pay much higher prices for oil than we do and now they have a choice of some of their welfare programs and pensions or solar.   Guess which one those socialist government union members will be  wanting to cut?  It may come back but for at least a decade or more there will be no expansion of solar there except for projects already started.  I am just a parrot of the news reports out of Europe on this one; you can’t blame my climate change skepticism.

If you think air travel service by the air lines stinks today then you don’t recall the service in the days before deregulation.   Prior to Reagan and the changes they were protected with the charters and their fares.  They charged an arm and a leg.  If you adjusted for inflation it was much higher then than now and the service was mediocre at best.  After all it didn’t do you much good to complain to the airline, they didn’t have to please their customers only their regulators.  If the regulators were happy then they were good.  Pleasing passengers was only incidental.   Southwest Airlines broke the mold and showed the way of the future.  It only worked because it traveled strictly intrastate and didn’t fall under the jurisdiction of the Federal regulators except for safety matters.  They were fun to fly in those early days because they made an obvious and demonstrative effort to have happy passengers.  What a breath of fresh air that was.

One wonders if Greece will serve up the European euro on a shish kebab.  Those governments in Europe have finally run out of other people’s money.  They will have to go all in with communist regimes or allow free markets to operate.  The free markets can function and solve their problems over time, but the market when allowed to operate always extracts a price for stupid.   They belief that they can pay for an expansive welfare state on ever-mounting debt that will be paid by the Tooth Fairy is being put to the test.   Don’t bet on the Tooth Fairey coming to the rescue.

At this time in 1942 the Battle of the Coral Sea had just occurred and the US Navy was gearing up for the Battle of Midway which took place the first week in June.   Many, many fine young pilots lost their lives in those encounters but we blunted the Jap sword permanently.   http://www.olcranky.wordpress.com

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Honesty Is The Norm

When one peruses the headlines it is often quite easy to become discouraged and assume that the world is corrupt and filled with lying, cheating people.  You can take almost any aspect of our daily life and see those disturbing stories.  Politics, business, personal behavior and even sports are all infected with the negative and dark side stories that would lead to that conclusion.  Our news has been filled with crooked businessmen and politicians and lying sports figures–Madoff, Massa and Woods come to mind rather easily at the moment as poster children for this downbeat view of mankind.  All that lying makes one my skeptical and downright cynical about our fellow man.  But take heart brothers all is not lost and that behavior is not the norm. 

The fact is that most people most of the time are honest.  It is not even close.  Think about any aspect of life and you will realize this in spite of headlines filled with liars.  Our laws are based upon the concept of honesty.  Both our civil and criminal laws derive from the basic proposition of what is acceptable and the norm.  Lying can get you in trouble with the law and does on a regular basis for some but that does not make lying the norm.  We assume people will be honest; we reject lying as a society.  Liars get sued and liars are prosecuted if the lie involves the criminal law.  Businessmen are assumed to be honest and that they will fulfil their contractual obligations and when they don’t they are sued.  Our entire economy couldn’t function if there wasn’t a strong underlying belief and fact of honesty in actions.  Who would sell anything to anyone on credit if there wasn’t a fundamental belief they would pay the bill when it came due?  For every Madoff there are thousands of honest businessmen going about their affairs dealing with other honest business men.  Honesty leads to trust.  We must have trust for any economy to work.  If we truly believed everyone was crooked and a liar then no loans would ever be made and no products or services would be sold.

Lord knows we do have too many crooked politicians but the majority are honest; we just disagree with their ideology or sometimes the details of how they propose to enforce the law.  If there wasn’t that foundation of honesty in our body politic then we would have anarchy.  Government could not function if it and the people it was to serve completely distrusted one another.  That is why we are so disappointed when the political system is corrupted because the lie was not the expected norm.  In politics the culprit more often than not is the kissing cousin of lying and that is hypocrisy.  Boy, are they ever guilty of that. 

You couldn’t drive your car and shop at the grocery store unless you had a basic trust in the honesty of the police system and the merchants at the store and the providers of products to the market.  How could you buy cereal if you were constantly worried they were shorting the amount or lying about the contents of the box?  We expect honesty.  We don’t expect lying and that is why we get so angry when we are lied to about the affairs of the day. You assume the others drivers won’t cheat and will follow the rules of the road so you can drive safely; otherwise how could you even negotiate the red lights?  The stock market is built on trust and honesty.  Contrary to what we might feel in the heat of emotion it couldn’t exist without honest people making honest transactions the overwhelming majority of the time.   Honesty is the best policy and it is good business.  Those caught in lies usually don’t survive the exposure of their lies, i.e., Enron, MCI, Madoff, Lehman, etc. 

Even the military is based upon the concept of honesty.  Duty and honor only have relevance if there is a fundamental belief in honesty. The troops have to trust their commanders and the commanders have to believe their oath to defend the Constitution has meaning and meaning would be absent if the government wasn’t fundamentally honest.  The lack of honesty is what leads to revolutions. 

Lastly, the Good Book teaches that honesty is what is expected.  Remember the Jesus railed against hypocrisy more than anything else and that is another form of lying because of the deceptive front presented.  Proverbs is loaded with sayings about the sin of lying and the consequences of it. 

So, take heart, at least for now we are still an honest people.  If we truly lose that trait as a people we are doomed regardless of politics, international troubles or economic woes.  If we retain it then hope will abide.

How many other States will be joining Virginia and rejecting the health care mandate for coverage for its citizens?  Stay tuned there will be many others that will follow and it will set up a badly needed Constitutional confrontation with Congress and the States.  We all need to know if there are any limits to what Congress can do under Art. One, Section Eight and the prohibitions against Congress in the Tenth Amendment.  That is the major political issue before the nation now.   http://www.olcranky.wordpress.com

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Numbers have always played a significant role in the news of the day.  If there is a natural disaster we want to know how many people were injured or killed, how many homes were destroyed, etc.  If there is a war going on we like to have the casualty reports of dead and wounded.   The world of sports is nothing but filled with stats and numbers for every conceiveable aspect of every sport and each game and season.   Take a look at your typical daily paper or news source on the internet and pay attention to how much of each news item is related to a number.  Many times those numbers are mere curiousities and sometimes they are the very heart of the story and have a great bearing on our lives and futures.  The questions regarding our economy and the disputes about the reality or fiction of Global Warming are all about numbers.  Our economy is doing better if you believe certain numbers and the earth is perilously close to an extinction tipping point if you believe numbers of the Al Gore’s.  What is striking is that so many of the numbers are given with no supporting data and background as to their source or methodology of creation, yet they are accepted as the gospel truth by the average Joe.  Others are plain and true as the nose on your face yet we pass by them without every thinking through the implications of them.

Let’s review some of the numbers that recently have been in the headlines and ponder their impact on our lives.  First we had the AIG rescue.  We know that the number for that Government, Inc. mission is 180 billion give or take to date.  Are you convinced we are better off having advanced that money?  The insurance companies were  sound according to all reports.  No one would have lost their life insurance payments or health benefits or property damage claim reimbursement.  That is a lot of money going to investors, many overseas.  Second, we have the infamous TARP plan which was a smooth 700 billion.  Last report I saw all but 132 billion has been doled out to various banks, not to buy their toxic assets but to purchase preferred stock and warrants in the banks.  Last week we got back 68 billion from 9 of the banks and the Treasury said they would retain the funds for further use with other banks in need.  It has become a revolving line of credit for banks apparently.   Government, Inc. now owns 34 % of Citibank and controls everything that bank does as lender, regulator and majority owner.  Even after the return of the 68 billion Government, Inc. still owns the warrants to acquire common stock in those nine banks as of today.  Next we have the program announced by the Fed to buy over 500 billion of mortgage backed securities in the market to free up money for new lending.  I haven’t seen any accounting of how much of that money has been spent, have you?  What did we get for the money.  Don’t forget the TALF money which  is another reported 650 billion.  Some of that money was to be used to buy credit card debt, student loans and car loans.  Where did it go?  Of course we have lent about 10 billion from last I saw to GMAC for its financing pr0grams. 

Then there is the money for GM and Chrysler–to the tune of 50 billion and counting so far.  Does anyone believe it will top out at that number?   Both entities are now owned by Government, Inc. and the unions to the extent there is any difference between the two.  I am sure the unions believe they bought their politicians fair and square and are merely getting their due. 

Next up is the announced plans of the Treasury to sell notes and bills to support the almost 2 trillion in deficit spending for the current year.  That number alone is staggering when you consider the deficit for this year alone will be 1.7 trillion and counting.  Remember that it has already been reported that tax revenues are down some 44 billion from prior years to date.  Combined with this issuance of Treasury notes is the program of the Fed, in addition to all its other buying programs, to buy 300 billion in Treasury bills this year alone; additionally the Fed is buying as much as 1 trillion in mortgage securities, this is different from their earlier program and in addition to that.  The Fed Reserve has printed up at least 1 Trillion since last September in new money.  Just turned on the printing presses and let them run.   That money has been used to buy some of those Treasury bills.

We have a proposed cap and trade law that will raise taxes by 650 billion over ten years.  The tax will be on anything and everything that consumes energy in its manufacture, transport or use.   That is a tax added to the already existing taxes on gasoline and diesel fuel.  The latest number floated for the health care overhaul is 1 trillion and I believe the administration threw out that number with their fingers crossed behind their back.   

I will let you pick your own number about the unfunded debts for medicare, medicaid and the social security administration.  There have been so many estimates thrown around you have lots to choose from.   Lastly, we are projected to have as much as trillion dollar deficits as far as the eye can see.  When you read the fine print the talk about reducing the deficit is really an intention to reduce the growth of government programs, not a real dollar reduction in anything. The Federal budget will continue to grow.  Almost one in five Americans are now on some type of government payroll be it local, state or the Federal level. 

As an intellectual exercise I would love to know how this story will end.  Be nice to know exactly who is going to pay for all of this.  Won’t be me, I will be pulling on harp strings while others are dealing with this debt.  The short term answer is pretty clear.  The Fed is printing money fast enough to satisfy every drunken sailor in port, but how long can they do that before the drunken sailors destroy the port?

Another day we will talk envoirnmental numbers.   www.olcranky.wordpress.com

“In framing a government which is to be administered by men over men the great difficulty lies in this: You must first enable the government to control the governed, and in the next place, oblige it to control itself. ”  Alexander Hamilton.

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Annual predictions

It is that time of year again when the media will be filled with a host of predictions for all sorts of things from the ridiculous to the sublime and a little bit of everything in between.   It is the season that brings it out since we have this artificial timing event called a New Year.   The Sun and all the stars in the heavens don’t have a new year they just keep on moving along without reference to any clock.    But we humans like to mark the passage of our lives and the events in our lives and we have created the concept of time and years and seasons.  I am glad we have.  It gives some order to life and helps us put matters and events in some perspective.   I for one like it that we divide the passing of the Sun from east to west into hours and days and the orbit of the earth into years.   Mother Nature may not need a clock or calendar but I believe we do.   As I have written before I have always thought that September 1st would be a more logical time to have a new year because so much more changes at that time of year.  The crops come in, the kids start to school, vacation time is over and there is even a more dramatic change in the weather from summer to the fall.  But alack and alas I fear I am a lone voice in the wilderness on that one.

We must use caution as we inspect these predictions that will be made.  The economy rarely follows along a path as predicted in the beginning of the year.  Inevitably there are events that occur in the world or right here in our own backyard that turn things in a different direction than we anticipated at the start of the year.   A trend can be predicted but the individual spikes and lows are another matter.  The aging of the Boomers will continue and we can rely on that but every result of that fact is much foggier.   The bigger and more sweeping the prediction the more caution I advise you to employ.  Thankfully for example Rachel Carson’s predictions in the Silent Spring mostly did not come true.  If she was right we would already have a smaller population because of starvation in the world.  She missed the boat on all her predictions about the science of agriculture.   The Green revolution did occur and millions in the mid east and Asia are alive today and have a better standard of living than they would otherwise if that had not occurred.    We did not pollute ourselves to death either.  The world is a cleaner place than it was 40 years ago.   She forgot the one factor that is a constant–change.  Things do change and sometimes the outcomes of those changes are dramatic and can’t be forecast with precision.  Then of course there are the unintended consequences of our actions.  They are never predictiable other than to predict that there will be those consequences not envisioned.

The economy will move.  For some this will be a banner year and for others it will be a very rough year.   I have no idea if the Market will move up or down.  But regardless of direction there will be those who figure out how to profit from their business or idea in ’09.    I also predict that the politicians will be active in the coming year as they are bent to do.   New laws will be passed.   It will take years to determine if those new laws are efficacious or harmful.   Upon passage each new law will be hailed as a great advancement for Mankind.   Whether it is an advancement or a retreat will be evident later.  Never trust the initial announcement.   One way or another every new law passed cost money.   We are spending more than we take in now as a nation and the supply of money is finite.  Oh, I know the Government can always print up new money.    But that will diminish its worth.   There will be no net gain in the total value of goods and services we can provide except through greater productivity.   I believe we can achieve some of that increase in the years to come.  But the influx of “new” money might outstrip that value and thus the value will hold steady.   Even the politicians have not figured out how to get a free lunch.  They all know how to promise one but delivering one is another matter.

It is like Nostrodamus, if you say enough and use vague and arcane language then sooner or later something will match up but that is more likely mere coincidence rather than accurately forecasting the future.

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Soviets compared to Nazis–part II

I must add a footnote to yesterday’s comments about the Commies.  It was everyone’s paradise because you didn’t have to pay taxes.  There was no income tax, property tax, sales tax or estate tax under their system.  The Governmnet paid you what it thought you deserved.  It already had all the money, the property, the goods and controlled the services.   There were no estate taxes because you didn’t own anything to pass along to your heirs.  They had no federal system as we understand it because everything was centrally planned and controlled from Moscow; thus the only need for local control was administrators to carry out the directives from Moscow. 

Now the Nazis were not so much into controlling by state law as they were old fashioned bullies.  They were called socialist but the state didn’t take over all private enterprise like the Soviets.   Mom and pop operations continued throughout their reign along with large industries.  Unions existed but were dominated by the Nazis and their thugs to maintain compliance.   A steel mill was still privately owned and it operated for a profit for its owners and it mostly  paid wages that it negotiated with its workers.  But if the Nazis thought they needed more of a specific product they would order it done and the owners would comply or face the consequences.   The same held true throughout their economy.   Mostly they would coerce compliance with the contract and the profit it would bring, but there always lurked in the background a late night visit from the SA to persuade any reluctant parties.   They used extreme versions of the carrot and stick approach to run their society.

You could travel throughout Germany pretty much anywhere and anytime you had the fare to travel.  This was more restricted at the very end of the war due to military use of all facilities including transportation.   You could move from one part of the country to another and attend the school of your choice.  The churches were not closed.  The Nazi big wigs were all anti religion to a degree, but there was no blanket prohibition against religious worship.  You were just considered primitive for religious beliefs and not “modern”.  The German army had chaplains in  it and the Nazis even entered into a Concordat with the Vatican.   After the Nazis got control of the Government it wasn’t long before opposition parties were squashed not be law but by intimidation.  Then they used the old argument about the national emergency of the war to totally eliminate opposition.  

The German society remained pretty much as it had before the Nazis took power with the huge exception that if you ran afoul of the wrong individuals or party organizations you could be taken away in a heart beat.  The Germans, including even Hitler were sensitive to public opinion and tried to keep their thuggery to as low a minimum as possible till after the assassination attempt on Hitler in July  of ’44.   Rest assured Stalin never gave a thought to public opionion.  Germany didn’t even go on a full war time prodcution economy until the third year of the war because they worried about waning public support for the war.  They were like the Mafia it was “just business”.  Their violence and intimidation was random and deadly for those who got caught up in the net of that regime.   Jews, Gypsys and other banned groups like the Communists were systematically destroyed.   If you said the right things, associated with the right people and went along to get along, you didn’t have to worry about much except the end of the world as you knew it because of the war.   At the height of the Nazi influence in the late ’30’s the Nazis let their thugs loose on a rampage known as the Crystal Night when they smashed, burned and looted many Jewish stores and businesses across several German towns.   A fiendish thing to do.   Strange though that the German insurance companies would not buckle into the pressure from the Nazis.  Goebbels went nuts because the Insurance companies intended to pay off on claims by the Jews.  He put real pressure on them and made the usual implied threats but to no avail.  The insurance companies did pay the Jews with claims.  It was a real Alice in Wonderland existence in Nazi Germany never knowing when some danger would strike.  They were evil.  They wanted total control of everything, the economy, the armed forces, education and all social institutions but not through the same type of system as the Soviets.   It wasn’t really the Government as such that did the bad things as it was the thugs the Nazis utilized for their damnable dirty work.

The fact that the two systems were very different is best illustrated by the actual words of the leaders of the Soviets and Nazis themselves.    They were the bitterest of enemies.  Each hated  the other system and those operating the systems.   The record is there for you to read yourself and make your own conclusions.  You should read about both.   They both existed within the last two generations.  That is the blink of an eye historically.  You can learn much about what can go wrong with a society that allows either system to gain a foothold anywhere.   Remember that these were not knuckle dragging cave men who succombed to these two systems but sophisticated Europeans.   To me the overriding lesson is allowing too much power to ever be accumulated in any central government.  Soon it will come to believe it is the source of power, not the people it is supposed to serve.  One of our best governmental strengths here in the good old USA is our Federalist system and its diversion of power and the dilution of power.  

Read the letters of William Travis from the Alamo.  They are quite remarkable documents when you consider the circumstances under which they were written.  I believe I would have whined and  carped about what I raw deal I had and why in hell wasn’t someone coming now to help me.  He managed the noble.  A good example for us all.

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Give me a dollar’s worth

The US dollar is not backed by gold any longer since FDR outlawed that in the early ’30’s.  All those old gold backed notes had to be turned in for the new ones.   William Jennings Bryan would have finally been so pleased.  You recall his famous speech about not punishing the American public on this “cross of gold”.   It was thought by he and his populists supportors that any financial system or markert system was more or less criminal because it was used to trick and cheat the average Joe.   That is a paraphrase of course but I believe it pretty accurate.  I invite you to do your own reading and disagree if you like.

The US dollar is backed not by gold or anything else of a tangible nature but by the “full faith and credit” of the US.   Exactly what the hell does that mean?  It is a fair and necessary question.   After all when you pay for something with a dollar you want to be sure that the merchant or seller is willing to accept it for the good or service you want.   Now put on your thinking cap and don’t shy away from where the logic takes you in the examination.   At heart what that phrase means is that we are a big dog.   We have lots of what not only we want here within the confines of our border but also that many people around the world want what we have to offer.  Microsoft sells primarily services; we used to sell lots of steel, autos and other manufactured goods that everyone wanted.   We don’t sell much of those overseas any more but we do still have an export business think goodness.   We continue to sell manufactured machines, agricultural products, airplanes, services (oil and gas development and production skill for example) and hi tech equipment.  It is a shame we don’t also sell  TV, radios, Ipods and all those other products we formerly made right here.   Our textile, shoe , auto, furniture, and applicance industries are shells of their former selves.

We also have had stability in our economy, banking  and governmental systems for most of the last century.  Those are huge advantages for us.  But at the heart and soul of the backing for the dollar is a combination of several factors.   First is miliatry might.  You might not like to think of this one but it is a fact.   Every country can make demands, invoke sanctions against other nations, put tariffs on imports or exports or appeal to the United Nations but in the end if there is no muscle behind the rhetoric the world won’t pay much attention to you.   We have the power to enforce our will on others when push comes to shove.   Study your history and you will see that the US did not emerge as a true international power and player on the world stage until WWI and that was because we shipped a few million men to Europe along with the material to help defeat Germany.   Until then we were a important but nevertheless second rate power.   England was the big dog and had been for a century after its defeat  of Napolean.

Second, we have so many things the world still wants–even our real estate.   Surely you have noticed the foreigners buying American buildings and land for development.   This has been an accelerating trend for about 3 decades now.   We are the epicenter of marketing and merchandising.   The global markets love getting into the American market.   The Chinese love us.  Their sales to us are making them rich and building their nation.    You think the Chinese economy would grow the way it has without those billions in sales each year to the US?   They may not like us, but they love our consumers.  For those foreigners to do business here or to buy goods or services here they have to pay in dollars–hence value for the dollar.

Lastly, I submit it is the moral authority of the US and respect for our beliefs–yes, those corny beliefs set out in the Delcaration of Indendence and the
Constitution.   In the long haul that is what counts the most.   Even if we make mistakes on occasions we usually right the ship after a while.  We  survived the moral ignominy of being allies with Stalin after all.  We were truely in bed with the devil there.   We fought a war of ideas with the Communists for decades and held our own militarily and ultimately prevailed by having the better ideas for human advancement and hope.

So, the value of the dollar is an abstraction.   You can line up all the Phd. economists you want and let them lecture about bell curves, GDP, supply  side or demand economics but those things don’t really define what the dollar is worth.  The value of the dollar is like one’s reputation it can move up or down depending on how others perceive you.   The value of the dollar is based on ideals, principles, might and tenets of behavoir as a nation that will win the approbation of its own citizens and those around the world.   We, Americans, are the value of the dollar.   If we will be worthy of our heritage then the dollar will remain strong.

You can have your own ideas about this and no doubt some of you will have thoughts superior to mine.   I enjoy thoughtful reflection about fundamental questions of our time.  The value of the dollar is very fundamental. If its value diminshes so does ours and our lifestyles.

The pound sterling was 20 shillings and was made of silver.   Just like the sterling silver set on your hutch.   At the time silver was valued more than gold.  A guinea was 21 shillings.   A quid was a pound but of gold.

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Bailouts–what’s the dog and what’s the tail?

Well, dear friend, Mother Government has come to the rescue again with the recent legislation for just about everyone to “save” the mortgage business and home ownership.   At least so they assure us.   No one loses we are told by the Kings of Capitol Hill.   I submit to you that there are millions  of losers and that the problem has been mis-stated and the solution shaped to benefit the political fortunes of those seeking votes.   Was it done to help you?   There are millions of people who own their homes outright and millions more who are current on their mortgages and will remain so until it is paid in full as per the terms of the original agreement between the owner and the mortage lender.   Other than higher taxes what are all these millions of people getting  out of this deal except to aid politicians in winning  reelection.

Remember our heritgage.  People came here and built their home with their own hands.  We were individuals and that stalwart attitude toward life with all its joys and trials is what has made us a great nation.   If we lose that “soul” of America then we will diminish as a people.

No one is forced to buy a home. No one is forced to go into the mortgage lending business.   The negative consequences of greed should always be punished the same as punishment should apply for those who broke any laws.   This legislation helps homebuilders, the mortgage lenders, those who buy and sell mortgages, mortgage brokers and the irresponsible homebuyer who bought more than they could afford and no doubt knew they were buying more than they could afford.  

Mortgages are a safe long term investment.  They are not spectacular like Google or Microsoft but you can make a good return on your money if you loan to repsonsible people and loan an amount appropriate to the value of the house.  They pay off like a slot machine for years.   Why else do you think there was such a market for them in the first place.   We have plenty of money in the private sector to fund mortgage lending.  We Americans have over 3 trillion dollars in ready cash in Money Markets and savings accounts right now.   That doesn’t count the trillions additional held by pension funds, unions and private investment houses.  businesses and assets.  Our economy is still the world leader.    Would you rather own assets in Indonesia or the US?   Well, those folks around the world feel exactly the same way.  There are millions more worldwide who love investing in US. Exactly what has a 25 year old done to deserve a $7500.00 tax CREDIT to buy a new house that I didn’t do 35 years ago?  I would have liked a tax credit when I bought my house.   I had to pay 15% down in cash, real money.  It wasn’t easy and there were years when it was a struggle to make the payments.   But I felt like I was in the same boat with everyone else and it seemed fair enough to me.  What is going to be fair about doling out money to people who won’t work long enough and save enough to own their home?   Those people with sub prime loans moved in with no money down.   They had no investment in their home.  Talk about believing in the free lunch concept.

I am afraid this is just another example of how we are becoming a nation of victims and one where no one will accept blame for their own actions.   There are those who even take the position that they don’t want to pay for anything personally but they will let the Government pay for it!   They somehow can’t seem to get the picture that the Government only takes from us.   We blow so many things out of proportion to the delight of the media and the politicians because that sells newspapers and makes people think they need to rely on Government for everything.  Losing to the Nazis or losing the Cold War would have been the end of the world as we know it.  Having our American culture Balkanized would be the end of the world.   Letting Fannie/Freddie fail would not be the end of the world.   Do you want the Government to be in control of mortgage lending with all its rules and regulations and bureaucrats running that vital part of our economy?   I much prefer private entreprise with all its diversity and competition and the choices  it provides to us as consumers.   Think  about your dealings with any branch of the Government.   How flexible have you found it to be?  Did they people at the SSA or the IRS even use common sense when dealing with your problem?   I don’t want people like that making those future loans to my grandchildren.

The politicians have grabbed the tail and sure won’t let go.  It makes for too many wonderful sound bites during a campaign season.   Let’s show them though that the dog still has a bark and a bite when necessary.

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