Security or Challenge
The appeal of the Democratic Party to 80 per cent of journalists and academia has always intrigued me. Democrats foster and vigorously promote the idea that all Republicans are rich, selfish and don’t care about those that are less fortunate. That propaganda has been selling well for the Democrats ever since FDR’s promise of a ‘chicken in every pot’ speech in the 1930’s. Problem, who pays for the chicken and who decides who pays for the chicken?
In the coming months Americans will be asked by presidential and congressional candidates in a round about way, whether they prefer the government to expand to better direct their future, or you be left with the challenge to fend for yourselves. Choose Democrats and you will not have to fend for yourselves.
For hundreds of years people across the world have hoped and prayed for the all powerful benevolent king, or dictator, or president to provide financial security with freedom from want and worry. As desirable as that wish is, it’s a wonder all the past failures of kingly benevolence aren’t a required course in eight grade classrooms.
The Soviet Union tried to make a benevolent socialist dream work for eighty years. It failed miserably. Putin is now allowing the challenge of capitalism to flourish. China is following the same course. Result, vibrant economies.
On the other hand, and purely for the sake of power, liberal democracies are currently targeting capitalism, creativity, and ambition for unintended destruction. When governments choose professed benevolence at the expense of a vibrant economy by over taxing, over regulating, and otherwise dictating personal and business policy they undermine the chance of ever achieving their goals.
Security is capitalism’s end product.
Kill capitalism and you kill security.
China and Russia have learned this, why can’t America’s liberal left?
As for compassion and benevolence? Take that job away from the ineffective, inefficient central government. Let the private professionals, like insurance companies, clergy, Red Cross, Salvation Army, and cities and towns etc., do the job that they do so well, supported by the federal government.
Another lesson learned by the Russians.
Friday, April 04, 2008
Wednesday, March 26, 2008
The Economy and Politics
In the 1980’s the economy was growing strong enough that the average person was starting to interest himself in investments outside his home and savings accounts. Penny Stocks became the rage. Small start-up companies around the country were looking for capital without giving away half ownership in their companies to investment bankers. They found backers in small independent penny stock brokerage firms. These investment brokerage firms underwrote and merged small firms into public corporations with just a few millions capitalization. Everyone hoped the gamble would pay off against long odds. These small mining, manufacturing, drug, brewing companies, etc. would prove to be a big risk for the small investor. Many companies failed, and some stock brokerage firms were guilty of exploiting small investors by putting them into investments that were too risky. Consequently they lost money they couldn’t afford to. Many companies did go on to achieve great success earning their small investors huge returns like, Microsoft, Apple, etc.. These companies were too small originally to attract investment from the large brokerage firms like Merrill Lynch, Bear Stearns, etc.. These big firms do not generally bother with a few million dollar under writings.
Because of a few unscrupulous brokerage firms in the eighties the SEC had more than fifty percent of the small independent firms shut down by implementing a catch-all compliance rule that all investment houses must follow called, “The Suitability Clause” which asks, “Is the investment suitable for the investor?” The suitability clause was and is a government bureaucratic nightmare for all brokerage houses that pretty much closed the door for small companies going public with just a few million dollars capitalization.
In the 1990’s the stock market took off. 401K’s were suddenly making everyone rich share holders in the booming stock market. Stocks for corporations and investors were making money hand over fist and those 401k’s were making everyone look like over night millionaires. Then there was a scandal, and another one, and all of a sudden some people lost money and the stock market balloon burst. Those same retirement account’s were taking a big hit. The SEC catch-all-rule of suitability seemed to come into play again with the government stepping in and throwing a few people in jail and heavy handedly changing accounting rules for corporations and brokerage houses.
Next, in the late 1990’s, to the mid 2000’s, the housing market went crazy. Every year saw five to ten percent growth in housing prices. Everyone that had been renting was now buying. Builders were building like crazy, investment bankers were offering more and more types of loans with more and more creative financing to meet just about every type of credit buyer. Sub prime loans were the rage. Everyone was buying and refinancing a couple of years later at new lower rates. Everyone was suddenly finding equity in their home that just a few years before they had purchased for nothing down. Flipping houses was so popular it even got it’s own TV show.
Creative financing for housing moved up to the big investment bankers who provided money to smaller brokerage firms because the risk reward ratio seemed to attractive too pass up. Then, because of overbuilding, falling prices, and short term sub-prime adjustable rate mortgages of, one, two, and three years started becoming due or rates re-adjusted. Failures began appearing and in a vicious cycle, news of these failures began spreading, housing stocks began to fall, home prices began to fall, lenders began to require better and better credit ratings. Suddenly, there was no new money for mortgages and the housing bubble burst. Who cried the loudest, besides the media? The government. The media and government blamed the speculating investment bankers, the investment bankers blamed the mortgage companies for low lending standards and the mortgage bankers blamed the borrowers for lying about their credit, their ability to pay and not reading their contracts. Wall street and the investment bankers were suddenly conscious of their mortgage portfolios. They didn’t know what percent of their assets were quality assets so they started writing them off. Now they want the government to reimburse them for their losses with tax payer money.
So, because of the overall perceived economic crisis, and for political reasons, the government wants to appear that they are coming to the people’s rescue with a bailout. First to the general public, then next to the investment banking houses. Then as a penalty for causing the embarrassing problem, the government will implement new suitability rules for mortgage borrowers that will be enforced by some new law.
Every time more stringent government suitability rules are implemented it stifles the future economy. After every crisis the government steps in and slaps the capitalist’s hand and further quashes growth in the overall economy. The government has to let the people and corporations be responsible enough for failure. They take the risk, so long as it’s not fraudulent, and they must take the loss when they over speculate.
Many small companies got their start up capital in the eighties by going public until the government pretty much closed the door.
Many workers in the nineties became share holders for the first time in their lives then the Dot Com bubble burst. Investors are now more cautious, but the government not satisfied and not wanting further embarrassment, has imposed accounting rules that make 401k’s more conservative and less attractive for corporations to manage and offer it’s employees.
In the new millennium, ninety four percent of new mortgage holders are paying their mortgages on time. They own houses they never would have been able to buy with out sub-prime lenders. Some sub prime lenders are getting burnt so now they will be more discriminate with loans, but the government plans to step in suggesting we make laws that go back to self-imposed rules-by-lenders that were prevalent in the sixties when you needed twenty per cent down to buy a home.
When corporations and individuals make bad decisions, without breaking the law, it seems to be an excuse for the government to impose new rules. New government rules against creativity kill creative venture capital, the life blood of a healthy growing economy.
What happened to buyer beware and act responsibly?
Because of a few unscrupulous brokerage firms in the eighties the SEC had more than fifty percent of the small independent firms shut down by implementing a catch-all compliance rule that all investment houses must follow called, “The Suitability Clause” which asks, “Is the investment suitable for the investor?” The suitability clause was and is a government bureaucratic nightmare for all brokerage houses that pretty much closed the door for small companies going public with just a few million dollars capitalization.
In the 1990’s the stock market took off. 401K’s were suddenly making everyone rich share holders in the booming stock market. Stocks for corporations and investors were making money hand over fist and those 401k’s were making everyone look like over night millionaires. Then there was a scandal, and another one, and all of a sudden some people lost money and the stock market balloon burst. Those same retirement account’s were taking a big hit. The SEC catch-all-rule of suitability seemed to come into play again with the government stepping in and throwing a few people in jail and heavy handedly changing accounting rules for corporations and brokerage houses.
Next, in the late 1990’s, to the mid 2000’s, the housing market went crazy. Every year saw five to ten percent growth in housing prices. Everyone that had been renting was now buying. Builders were building like crazy, investment bankers were offering more and more types of loans with more and more creative financing to meet just about every type of credit buyer. Sub prime loans were the rage. Everyone was buying and refinancing a couple of years later at new lower rates. Everyone was suddenly finding equity in their home that just a few years before they had purchased for nothing down. Flipping houses was so popular it even got it’s own TV show.
Creative financing for housing moved up to the big investment bankers who provided money to smaller brokerage firms because the risk reward ratio seemed to attractive too pass up. Then, because of overbuilding, falling prices, and short term sub-prime adjustable rate mortgages of, one, two, and three years started becoming due or rates re-adjusted. Failures began appearing and in a vicious cycle, news of these failures began spreading, housing stocks began to fall, home prices began to fall, lenders began to require better and better credit ratings. Suddenly, there was no new money for mortgages and the housing bubble burst. Who cried the loudest, besides the media? The government. The media and government blamed the speculating investment bankers, the investment bankers blamed the mortgage companies for low lending standards and the mortgage bankers blamed the borrowers for lying about their credit, their ability to pay and not reading their contracts. Wall street and the investment bankers were suddenly conscious of their mortgage portfolios. They didn’t know what percent of their assets were quality assets so they started writing them off. Now they want the government to reimburse them for their losses with tax payer money.
So, because of the overall perceived economic crisis, and for political reasons, the government wants to appear that they are coming to the people’s rescue with a bailout. First to the general public, then next to the investment banking houses. Then as a penalty for causing the embarrassing problem, the government will implement new suitability rules for mortgage borrowers that will be enforced by some new law.
Every time more stringent government suitability rules are implemented it stifles the future economy. After every crisis the government steps in and slaps the capitalist’s hand and further quashes growth in the overall economy. The government has to let the people and corporations be responsible enough for failure. They take the risk, so long as it’s not fraudulent, and they must take the loss when they over speculate.
Many small companies got their start up capital in the eighties by going public until the government pretty much closed the door.
Many workers in the nineties became share holders for the first time in their lives then the Dot Com bubble burst. Investors are now more cautious, but the government not satisfied and not wanting further embarrassment, has imposed accounting rules that make 401k’s more conservative and less attractive for corporations to manage and offer it’s employees.
In the new millennium, ninety four percent of new mortgage holders are paying their mortgages on time. They own houses they never would have been able to buy with out sub-prime lenders. Some sub prime lenders are getting burnt so now they will be more discriminate with loans, but the government plans to step in suggesting we make laws that go back to self-imposed rules-by-lenders that were prevalent in the sixties when you needed twenty per cent down to buy a home.
When corporations and individuals make bad decisions, without breaking the law, it seems to be an excuse for the government to impose new rules. New government rules against creativity kill creative venture capital, the life blood of a healthy growing economy.
What happened to buyer beware and act responsibly?
Wednesday, March 19, 2008
Barack has a chance to make history
Barack has a chance to make history
Barack made and eloquent speech defending his relationship with Reverend Wright but he failed to change the perception that he is not from the same mold as many other black leaders across this country.
He has a chance, a very rare opportunity that only comes along once in a lifetime. That chance will still be there for just a little while longer but not much. This is his moment, in the midst of the hot campaign and while he still has his credibility, he has a chance to change the course of history.
He has the chance to end that deep seated fear that his grandma and many others have harbored since the black power movement of the sixties. Black and white people split in the sixties. Black Panthers, Malcolm X and some Olympic champions had given the black man a new powerful, black is beautiful, feeling, and it was good, initially. It must have been exhilarating, The white man, instead of respecting the black man for this new found inner pride, feared it because this new found pride was the in-your-face kind of pride. Newly emerging black leaders exploited this new black pride by spewing hate and vengeance on (Whitey). Jessie Jackson, Louis Farrakhan, Reverend Wright and many other black leaders old enough to have struggled in the sixties are still exploiting blacks today. They took advantage of this new found black power by using it for self aggrandizement, for power and out of genuine hate.
Martin Luther King went in a different direction, he gained the respect of the vast majority of the public by marching against injustices. He wanted to peacefully bring people together, blacks and whites, all people to share in his dream. He inspired inner pride , like Gandhi, rather than waste his time on fruitless hate. He told people that they were equal and as good as any other, rather than point fingers at whites and blame all the ills of America on the past.
Barack Obama has a unique chance to end race divisions in this country right now, forever, by simply saying, to the effect, 'Race prejudice ends right now, starting with me, a new beginning is right now. The negative past is over, put away, gone, forgotten. Anyone trying to keep it alive is wrong and I will denounce him as should everyone else in their Church, in their home, everywhere. Rev. Wright is wrong in his thinking and his hateful words and needs to repent and see that a new day has dawned, today, now. Jessie Jackson is wrong in perpetuating divisions in America among races and I call for him to join me in denouncing race divisions. There is simply no room in this country for preachers and politicians to spread anymore hate, fear, and blame on their fellow Americans. Complainers of past injustices need to stop whining and move on right now. We must fight injustice where ever we find it but do so it in a civil, peaceful and in and understanding manor. Injustice is everywhere and can be found among all races. Blacks no longer have a special corner on the market’.
Barack needs to say, with deep conviction that he was wrong for not stopping Wright from preaching his hateful sermons years ago, but that he was weak and could not quit the church. America forgives as easily as it forgets. He must say that he realizes now more that ever in this defining moment of his life that negative preaching is counterproductive for blacks and whites and it must stop. Wounds among races will never heal so long as someone is pouring acid in the sore.
If Barack truly wants ‘Change, a New Beginning’ as his campaign slogans continually call for, then he has a unique opportunity to show his presidential leadership skills while campaigning and while he has the nations attention. He has the talent and has shown himself to be a brilliant orator and statesman. He has a chance to make history. He has a chance to turn the negative race issue into a positive.
But maybe Barack does not feel the way I've described at all. Maybe he doesn’t see that this is his defining moment in his life. If he doesn’t see it than he is just another pretender to the throne and he will lose the presidential race. Maybe Rev. Wright was sucessful over the past twenty years, in ingraining in Barack some resentment for whites and in America .
Barack made and eloquent speech defending his relationship with Reverend Wright but he failed to change the perception that he is not from the same mold as many other black leaders across this country.
He has a chance, a very rare opportunity that only comes along once in a lifetime. That chance will still be there for just a little while longer but not much. This is his moment, in the midst of the hot campaign and while he still has his credibility, he has a chance to change the course of history.
He has the chance to end that deep seated fear that his grandma and many others have harbored since the black power movement of the sixties. Black and white people split in the sixties. Black Panthers, Malcolm X and some Olympic champions had given the black man a new powerful, black is beautiful, feeling, and it was good, initially. It must have been exhilarating, The white man, instead of respecting the black man for this new found inner pride, feared it because this new found pride was the in-your-face kind of pride. Newly emerging black leaders exploited this new black pride by spewing hate and vengeance on (Whitey). Jessie Jackson, Louis Farrakhan, Reverend Wright and many other black leaders old enough to have struggled in the sixties are still exploiting blacks today. They took advantage of this new found black power by using it for self aggrandizement, for power and out of genuine hate.
Martin Luther King went in a different direction, he gained the respect of the vast majority of the public by marching against injustices. He wanted to peacefully bring people together, blacks and whites, all people to share in his dream. He inspired inner pride , like Gandhi, rather than waste his time on fruitless hate. He told people that they were equal and as good as any other, rather than point fingers at whites and blame all the ills of America on the past.
Barack Obama has a unique chance to end race divisions in this country right now, forever, by simply saying, to the effect, 'Race prejudice ends right now, starting with me, a new beginning is right now. The negative past is over, put away, gone, forgotten. Anyone trying to keep it alive is wrong and I will denounce him as should everyone else in their Church, in their home, everywhere. Rev. Wright is wrong in his thinking and his hateful words and needs to repent and see that a new day has dawned, today, now. Jessie Jackson is wrong in perpetuating divisions in America among races and I call for him to join me in denouncing race divisions. There is simply no room in this country for preachers and politicians to spread anymore hate, fear, and blame on their fellow Americans. Complainers of past injustices need to stop whining and move on right now. We must fight injustice where ever we find it but do so it in a civil, peaceful and in and understanding manor. Injustice is everywhere and can be found among all races. Blacks no longer have a special corner on the market’.
Barack needs to say, with deep conviction that he was wrong for not stopping Wright from preaching his hateful sermons years ago, but that he was weak and could not quit the church. America forgives as easily as it forgets. He must say that he realizes now more that ever in this defining moment of his life that negative preaching is counterproductive for blacks and whites and it must stop. Wounds among races will never heal so long as someone is pouring acid in the sore.
If Barack truly wants ‘Change, a New Beginning’ as his campaign slogans continually call for, then he has a unique opportunity to show his presidential leadership skills while campaigning and while he has the nations attention. He has the talent and has shown himself to be a brilliant orator and statesman. He has a chance to make history. He has a chance to turn the negative race issue into a positive.
But maybe Barack does not feel the way I've described at all. Maybe he doesn’t see that this is his defining moment in his life. If he doesn’t see it than he is just another pretender to the throne and he will lose the presidential race. Maybe Rev. Wright was sucessful over the past twenty years, in ingraining in Barack some resentment for whites and in America .
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