The unabated collision course with our national debt marches on, with vigor. The figures last week show the 2009 budget deficit at 10% of the whole economy. A 1.4 trillion deficit for fiscal 2009. This deficit is about 3 times what economists feel is healthy. Yet, no surprises. These figures have been pre-announced by most projections.
Wall Street, for one, seems oblivious to all this bad news. No lifestyle changes there since Paulsen’s blood transfusion in the fall of 2008. Now, Wall Street is able to get money cheaper and with some government protection they didn’t have before the meltdown. Also, there is less competition for the big banks. Less competition always pleases well-positioned businesses. And, the big bonuses are already back. Wall Street Party II officially began with Goldman’s profit reporting
But it is not party time for everybody. Foreclosures are up; bankruphies are up; and youth unemployment now exceeds 25%. In some demographics unemployment is up considerably more than 25%. For others, unemployment compensation is running out. You would think Wall Street would have the decency, at minimum, to forgo displays of good fortune, not to say, their rare privileges, in the context of these hard-time realities.
Remember, while Wall Street was tanking the economy with their excesses, Mr Paulsen decided his friends were too important to fail. The same people who are now raking in the big profits and seeing their stock price recover where just months ago receiving government hand-outs. They are living off the largess of government, the loyalty of their well-positioned friends, like Mr Paulsen, and many politicians they own stock in.
Investing in politicians is a cornerstone to the Wall Street business model. Owning stock in politicians is good liability insurance. When the big bubbles started bursting in 2008 they filed their insurance claims. The result was the claims were honored by a 700 billion dollar pay out. Wall Street bankers know you can take a lot more risks if the government indemnifies you. Being too big fail has its advantages. Unfortunately, the rest of the country did not have the same insurance policy as Wall Street. The American people are still struggling and many are losing.
Money is the mothers milk of politics; or so they say. No doubt, the lobbyists believe that to be true. Wall Street lobbyists have a good feel for what works best. But, time will reveal that the milk from the selfish interests was really sour milk. It was the milk that directed public policy in the wrong direction. It directed policy away from the common interest of American society, American business, American families, American prosterity, American decency, and American competitiveness in the world.
The sour milk, perversely, directed government largess to the selfish, the greedy, the degenerate, the gamblers, and a thousand other misfits.
Politicians are going to be coming home next summer saying they were against all the deficit spending and Wall Street favors. The will produce a voting record, maybe on something obscure, to help prove their point. The reality is these “opponents” to bad policy are not potent enough to stop it. Anyone can cast a vote. The good politicians, so called, cannot influence events. They get returned to office by merit of their good intentions. Of course, that is a recipe for failure.
I am fearful the public will not catch up with what is going on in the broadest sense. Too few big picture looks. A growing number catch on to some media would-be demagogue, who has skills in taping their emotions and fears. The public does need to become aroused, but it needs to be accompanied by a broader understanding of the forces at play in our changing country.
Economies have vital signs just like the human body. These indicators are beginning to show our economic body is not so well. Not sick yet, but not robust.
The most visible sign, for now, of our economic health is the value of the currency. I watch it every day and I see that relative to the euro, as an example, the dollar is weakening. Same with the index of currencies. Not very long ago you could trade a dollar for euro. Now, it takes almost a dollar and a half to buy a euro.
Some say there is advantage to a weak dollar. It helps our exporters and helps re-balance our trade. Maybe. There is also some deception that goes with a weakening dollar. The positive earnings that Wall Street has been enjoying lately would not be there with a strong or even stable dollar. As an example, information technology companies do most of their business overseas. So, the currency fluctuation distorts the real performance of these companies.
The bottom line is the strength of currency reflex’s the confidence other countries and business have in America.
If our economy was a human body we might say it had a low grade fever.
The New York Times is threatening the Constitution with today’s editorial. Regularly, the Constitution gets threatened by those who would extract an enhanced meaning into what is written in the pages of the document. They do this according to what they see and understand as right, fair, and equitable.
In order to make the Constitution conform to their idea of justice they are willing to do a semantic tap dance on this revered document.
The case of a Cross being constructed and maintained on federal property is again the question. This time from San Bernardino, Calif.
The Times thinks the Cross should come down. It sends the wrong message. They suggest the court should consider that the Cross runs afoul of the establishment clause. They go on to invoke the Danbury Letter.
If I put my pencil into the pencil sharpenter and sharpen it to the maximum; at my first use the sharpened point will always break off. The pencil point was not to be defined that exact. Same with our Constitution. The Constitution is a dull instrument.
The people who live at the time of the Constitution, and in fact, the people who wrote the document knew we were a Christian nation. Of course, they did not codify that reality into the Constitution. To do so would have invalidated the rest of the document. For those who did not practice the Christian faith, like the celebrated deists, they observed the teachings of the Bible. Both the Old Testament and the New Testament was the fundamental guide book.
To violate the establishment clause of Article I the offense has to be more established than what we now know of the pending case. The man in California who was offended by the Cross did not have the exercise of his own faith seriously obstructed by this display of the Cross.
Is everything equal, fair, and just at the Mojave National Preserve? No, but neither has the establishment clause been violated! The establishment clause infers some kind of written or acknowledged code. Jefferson said the same! The Times almost said this in the last paragraph of their editorial.
The Times is worried that if you give the Bible thumpers an inch they will take a mile. Where have we heard that before?
The current Supreme Court, in it’s wisdom, should continue to interpret some of these cases on a very narrow basis. That should take care of some of the Times fears.
Our health care system is plagued my monopoly profits. Without competitive discipline, that you have in most businesses, profits are bound to rise, sometimes to great heights. Also, efficiencies become slack. That may explain why hospitals get into trouble with staph infections, surgical errors etc.
Much of the health care dispute has revolved around the “public option.” The public option would provide an insurance source for purchasers, other than a private carrier. Opponents to the public option say they will be driven out of business by the unfair advantages of the government insurance. There are doubters to their position.
I would perfer an option that did not involve the government, if one can be found. However, monopolies cannot be tolerated. monopolies choke off our free enterprise system.
Local and regional power companies are monopolies. Yet, they are operated and regulated by governments. Although they have private owners or investors, each community has a board to set policy. Of course, this does not work as efficiently as a true competitive system. Electrical power is what is deemed a “natural monopoly”. A true competitive system for electric power generation is logistically unworkable!
During the depression the Tennessee Valley Authority, a government owned power enity, covering parts of 7 states was created by Congress. People in our region justified the socialistic TVA for flood control, as well as economic development. A less recognized selling point for Congress was that TVA would provide a “measuring stick” to find out the true cost of electric power generation. President Roosevelt distrusted the charges that private monopoly power companies were inflicting on their customers.
Does health care, a functional monopoly, not need a “measuring stick? ”
Currently, in our health care debate, the health providers are pouring money into legislative-writing committees. Committees, such as the Senate Finance are deluged with lobby’s and money, to head off a meaningful solution.
If politicians allow insurance companies and health providers to write the health legislation, prepare for an unaffordable mess. A mess that will have to be scrapped, maybe in short order.
Now that health care reform has got so messy in the Congress it makes you wonder if our approach was correct. Health care money has virtually froze everything. The Senate Finance Committee bill,when it comes, will reveal just how politicians can make a bad situation worse.
Rather than a comprehensive bill, it might be better to approach health care reform incrementally. That might prove to be the only way. First, do the repair. Start with Medicare. Cleaning up Medicare abuses is a major undertaking. Next, we could create competition in the insurance business. Also, the health insurance business is in desperate need of behavior regulation.
Properly dealing with Medicare and the insurance business will make health care remarkably more affordable.
Whether we stick to the comprehensive plan of the administration or take a common sense approach to health care the lobby’s will have to go. What is going on now is the insurance lobbyists are writing the legislation. They bring the big money to the table and they call the shots. What kind of policy is it to allow those with a vested interest to write the reform legislation? That can only make sense to corrupt politicians and the lobby’s.
It is better to stay stuck in the mud.
When the financials fell I predicted an eventual 15% unemployment. Some states exceed that already. The unemployment figures have steadily increased. I fear they might dramatically increase. Maybe, I should revise me predictions upward. For now, the unemployment figures seem to be taken seriously only by those who have lost jobs. Wide scale lifestyle changes don’t seem evident. Maybe, lifestyles will be the last to go. The boat and the Italian restaurants could outlast the house and the car.
Our recent economic values are not inconsistent with our other values. Statistics bear out a substantive change in the way Americans look at life. Say, from the 1950’s until now. But, what is showing up is symptomatic of a deeper illness.
We are not the same people! We are a nation adrift, and without a compass.
David Brooks of the New York Times wrote an article recently citing the recklessness of our economic values. We spend like there is no tomorrow and build generational debt. He lists personal debt rising two and a half times since 1960 and talks about the Wall Street abuses. Brooks seems to think we have spent too much time on other social values i.e. traditional Christian values. Although, he did not use the word Christian. That is my interpretation.
Well, those “other” values were deteriorating as well, in the same time frame, as the economic values. Look at anything! Look at divorce, white-collar crime, alcohol abuse, etc.
Christianity provides internal restraints, the absence of which, calls for external restraints. External restraints restricts freedom. You have to be moral to be free. It’s an old lesson that our founders understood real well. Madison said, ” if men were angels, no government would be necessary.”
Do you really believe the Congress would be straining to write restrictive legislation for bankers if the bankers had an abundance of internal restraint or “morality”.