Tuesday, June 30, 2009

New Gallup poll says 'A pox on both your houses.'

A new poll posted on Gallup.com today states:

"A Gallup Poll finds a statistically significant increase since last year in the percentage of Americans who describe the Democratic Party's views as being "too liberal," from 39% to 46%. This is the largest percentage saying so since November 1994, after the party's losses in that year's midterm elections."

It goes on...

"Notably, there has been no change over the past year in the percentage of Americans who say the Republican Party is "too conservative," though the 43% who say the party leans too far to the right matches the historical high mark set last year."

So record high numbers of respondents believe the Democrats are too liberal and the Republicans are too conservative. So ideally, they move closer to each other and become "just right", right? Wrong.

We don't need Republicans to become more like Democrats or vice versa. The big lie is that solutions to the problems facing this country lie somewhere along a straight line between the two major parties. In reality, both parties agendas are more like a plate of spaghetti that occasionally intersects with the truth.

The common thread between most politicians of all persuasions is control. Republicans generally believe we should all adhere to Judeo-Christian values and that they should be institutionalized to a large extent. Democrats tend to believe that we are all each others keepers and the good of the community and society should be paramount. Both parties seem to believe that the preservation of the "too big to fail" trumps free market principals. Americans believe none of it.

Government's job is to enable us to freely associate in the absence of force. It is not to mold us into the people they want us to be. We don't have to all get on the same page. In fact, that is the antithesis of what this country is about. This is a nation where people of all kinds of beliefs, with all kinds of personalities and backgrounds find a way to live, work and play in relative peace. This is not accomplished through conformity. It's accomplished by eliminating the requirement for conformity except that we agree not to initiate force against one another.

We don't need Democrats to get more Republican or Republicans to become more like Democrats. We need both parties to get out of our face.

Sunday, June 21, 2009

Why I didn't buy a GM car

sumitted by Nathan Thompson

First, the United Auto Workers Union has strangled the life out of GM. There are too many unproductive people being kept on the payroll, and GM isn't permitted to lay any of them off unless they shell out a year or two's worth of income and benefits to the layed-off employee. Retirees receive almost full wages and benefits, even many years after having retired. The executives of GM paid themselves millions in bonuses even while the company lost money on every vehicle. They allowed the company to amass over $170 Billion in debt.

This debt was purchased by pension funds, insurance companies, and investors who believed in GM and were willing to trust their money and future incomes to this giant of American industry. Now, those investors have just had their money stolen from them, by way of the Obama administration and the bankruptcy court. Bondholders have always been first in line when a company goes bankrupt, and the bondholders get their money first. This has been true since the beginning of capitalism. But now, bondholders are toast. They were put at the END of the line (illegally), behind the UAW labor union and Uncle Sam himself. This massive theft from bondholders should be a warning to anyone who thinks free-market capitalism still works for the common man. GM ran itself just like our government does. It borrowed more and more, even while revenues and market share shrank and shrank. If you want to know how the government intends to pay off all of its treasury bond debt, look no further than how it just treated GM bondholders.

So, why didn't I buy a GM car instead of a new Kia this month? As an American shouldn't I have "rushed to the aid of fellow citizens" by supporting GM? Heck no, GM is toast, and so is the broken system of debt issuance for our government. I don't run MY business this way, and I DO NOT support a system where Peter is robbed so that Paul can continue to do the same ole' same ole'. No, in fact I'll NEVER buy another GM, even though I already own three. I'm pissed off at how they have enabled the biggest and best car company in the world to turn into a poorly run operation that doesn't honor its debts. I'm proud to be an American: I PAY my debts; all of them. If GM doesn't, then I will not support them by buying their vehicles. Nor will I continue to purchase T-Bills or treasury bonds from the US Treasury Dept. I will sell any I hold, and instead, send the money to KIA to pay for my new car, which incidentally, is thousands of dollars lower in cost than the GM, with twice the warranty. Besides the IRS, the only government agency I will voluntarily surrender my hard-earned dollars to is the US Mint. At least they will exchange your devalued currency for real money, silver and gold coins, that never lose their value and represent honest money unencumbered by debt. Wake up America! First, they screwed up the mortgage industry and housing. Then, they wrecked the banks. Then, they caused a stock market collapse. Then, they took over the auto industry. They have consistently strangled the domestic oil industry. Now, commercial real estate is collapsing, and the insurance industry is reeling. Now they want to screw up the health care industry. How much longer until they mess up the farming industry and decimate our food supply. I don't know about you, but I'm buying canned food as fast as I cash my paycheck, because I don't trust these guys anymore. I have lost faith in the ability of the American government to simply do what is right for tax-paying citizens.

Goodbye GM. You had your moment in the sun. Goodbye American economy. You killed the golden goose. Now it is time for we citizens to stand on our own and protect our own families from the excesses of our government!
Respectfully submitted,

Nathan Thompson
citizen, Fountain, CO

Thursday, June 18, 2009

Obama Day on ABC

June 24th is going to be Obama Day on ABC. The network will team up with the White House to broadcast a "debate" on health care on four of their news programs: Good Morning America,” “World News,” “Primetime” and “Nightline.”

No Republicans were invited to participate, at least not any party leaders. There many be some grass roots types present in the audience at the town hall event on "Primetime", or perhaps in the audience or as pundits on the other shows. We'll have to wait and see what they dish up for us.

Politicians, media critics and even other media outlets have criticized the arrangement for being one-sided. Personally, I believe that if ABC or any other network wants to go on a full out Obama promotional campaign, they should be able to do so. My concern is that they promote it as "news". I believe that's deceptive advertising and smacks of Soviet style media. Also, while I don't believe in limiting free speech through campaign finance rules, if they are going to apply to one, they should apply to all. If the Obama administration is going to get hours of free advertising on a major network, it should come under the same scrutiny and regulation that it would for any other candidate or party.

I wont declare journalism dead, as others have. It just doesn't show up very often on the major broadcast networks anymore. If you look hard enough, you can find it elsewhere. I don't even mind entire networks being in the tank for a candidate or party, so long as their open about it. Instead of reigning in the broadcast networks, how about taking the shackles off completely? Do away with campaign finance "reform". Let the money go where it wants to go. Let everyone get their message out as far and wide as they are able. Instead of more government money for campaigns, zero government money for campaigns.

The caveats would be that although you can get as much funding as you're able from wherever you are able, you must fully disclose who and where it came from. If your network is going to support one candidate or party over another, you must clearly state such.

I don't believe that most people are so easily manipulated that they are going to change their vote or their opinion because one person or another had a poster in the right place at the right time or because a morning show host expressed his or her approval of an issue or candidate. As long as speech is free and honest and force and intimidation are kept out of the mix, Americans will get it right eventually.

As evidenced by the controversy generated over ABC's programming, this story is really more about presentation than health care. Regardless of where individuals stand on a particular issue or candidate, nobody likes to feel like they are being "played".

For more info: RBR.com

Saturday, June 13, 2009

The new American Civil War

Once again America finds itself in a war in which, like pre-9/11, one side is mostly unaware they are even engaged. It's a battle for control over the allocation of resources, human and otherwise. It pits the free market against big government and some of the biggest players on the free market side are actually aiding and abetting their rival.

Ideally, in the free market world, the allocation of resource is accomplished by the cumulative effect of billions of individual decisions made every day. Corporations are headed by boards and management which is directly accountable to shareholders, customers, suppliers and associates. They are graded with every purchase decision and their performance is measured in profits. The model is subject to a vote every business minute of every day.

In the big government world, resources are allocated by a select group of bureaucrats, appointed by leaders who are only periodically accountable to voters. The deck is stacked in favor of incumbents through constant and free exposure and they are supported by an underlying bureaucracy that is accountable only to itself. There is no instantaneous measure of efficiency in particular sectors, only the general measures of the economy, based on data compiled by the bureaucracy.

For a time, it looked like the free market had the upper hand. The largest corporations were getting larger. Companies like WalMart were actually able to roll out their own, private sector prescription drug programs. Companies like Google were able to turn the internet into a powerful means of information exchange and storage. If things continued down this path, private sector companies would eventually be more relevant than the government. Something had to be done.

The big victory for big government was in pressuring financial institutions to make loans to individuals based on neighborhoods and ethnicity rather than credit risk. They enabled them to re-package these high risk loans into derivatives and sell them to the taxpayers via Freddie Mac and Fannie Mae, who turned around and sold them to private institutions. Soon, even financial institutions that were not subject to government arm twisting were getting in on the free money orgy. It spread like a cancer, until the whole thing blew up. Of course, rather than let these now huge financial institutions fail, big government saved them. The financial industry surrendered before they even knew they were in a fight.

The auto industry take-over has been in the works for decades. While pundits argue over whether the demise was due to the unions or poor management, few ask the real relevant question: Why has there been no competitive new car company established since around 1935? It's been about 75 years since a newcomer has appeared on the scene. Again, the industry was complicit in its own demise. They went along with ever increasing regulation in the name of safety, fuel efficiency and workers rights. They made compliance so expensive and time consuming that starting a new American car company became a fiscal impossibility. In ensuring that they'd have no competition, they made a deal with the Devil. The Devil won.

Doctors are beginning to wake up to the fact that they too are in a fight for their own survival. But it may already be too late. They were all for third party pay because it ensured that they would be compensated for their work. Everyone would pay and they wouldn't have to spend time on collections. They could negotiate with a few insurance companies rather than individual patients. It would be great! Now the demands on their time are cutting into their income generating capacity. The need to order tests for everything to avoid liability, has vast resources tied up in CYA activities rather than actual health care. Malpractice insurance has gone through the roof. The insurance companies that they negotiate with fund the campaigns of the big government folks who set the rules. Game over.

The FDA has taken control of the tobacco industry, to thunderous applause. There's talk of new regulation of the food we eat, the beverages we drink and of course, big government is going to save us from global warming by taxing us all on carbon emissions, even as global temperatures are falling. Of course, they can show data to the contrary, but as the now infamous fraud known as the "hockey stick" graph demonstrates, they can produce data to demonstrate that the moon is made of green cheese if they want to.

We have the capacity to fight back. Nothing stirs a politician more than an angry mob. The people can demand their freedom back and if they put up a united front, defeat big government. The problem for free market proponents is that either the people and the corporations are unaware that they are under attack, or individuals and individual corporations still believe that they can personally benefit from big government somehow. If it's the latter, the war is over.

Tuesday, June 2, 2009

How to Play Inflation

The federal government is going to need to borrow at least $1.8 trillion by October of this year. The national debt is growing and there seems no end in sight. Many people believe that this will lead to inflation as the value of the dollar drops. There are those who believe this will not happen. They point to Japan, where the supply of money increased, but since economic activity remained depressed, inflation never took hold. Inflation is actually the more optimistic view, so I'm going to go with that one. What strategies can one employ to navigate an inflationary environment?

I'm not a financial advisor, so I wont get into specific investment advice, but there are some general approaches one can take that make sense when the value of the dollar is falling. The most obvious is, if you have variable rate debt, fix it. Certainty may come at a bit of a premium, but it's tough to manage your cash flow when your debt payments are continually on the rise. Whether it's a revolving balance on your credit cards or an adjustable rate mortgage, talk to your lender of choice and see about taking some of that risk out of the equation.

Invest in yourself. If you've been considering making home improvements "someday", today might be a good day. If you believe the value of a dollar is going to drop faster than the value of a new deck, and you were going to get a deck anyway, you may as well make the swap. After all, you can't barbecue on pile of dollars. One great home improvement idea is the creation of a pantry, if you don't already have one. It can be as simple as putting up some shelves and it gives you the capacity to take advantage of "loss leaders" or specials on non-perishable items. Education is always a great investment. To get the most bang for your buck, choose an educational path that you're really interested in and can get passionate about. Tools also make good sense. Having the means to build, fix and maintain things on your own can save you a lot of money in the long run. Home improvement stores often offer free classes in construction, installation and repair techniques.

Invest in your business. If you're a business owner, an inflationary period can be a good time to get at that paint job you've been putting off, upgrade signage, shelves and equipment. Again, you're swapping cash for something you expect to hold its value longer. The government is inevitably going to attack its deficit with higher taxes, so investing in tax deductible improvements makes good sense. Also, we are going to come out of this situation at some point. Making improvements now will put you in a stronger position when the economy rights itself. If you believe inflation is coming and will be around for a while you may also want to get away from "just-in-time" inventory management. If you're only carrying a few weeks inventory, you'll just barely be able to keep up with rising prices. If you have the space and fairly consistent demand, going to a several month inventory strategy can help you stay ahead of the game.

Obviously you don't want to blow your life savings just because the dollar is falling. As I said, I'm not going to offer specific advice as to what to do with your long-term wealth. I will say, however, that if you believe that inflation is inevitable and your financial advisor doesn't, you need a new advisor. I could be wrong of course. Ultimately, it's your money and your call. Just be sure you and your fiduciary partners are on the same page.

Railing against the powers that be for financial mismanagement is your right as an American. It can make you feel better and it makes for good water-cooler conversation, but you still have to deal with the reality of the situation. Generally speaking, the keyword for our times is Value. Don't just spend. Spend wisely.