I am truly disappointed with the Republican minority in Congress regarding the stimulus package being proposed by the Obama Administration. 100% opposition in the House and being proud of it is not a good sign of things to come.
With Republican Party leadership not yet clearly established (Bush is gone and McCain doesn’t seem able to assume that role), we have a fractured Republican Party whose only agreement is to disagree with everything being offered by the new administration - so much for bipartisanship. With the news media’s attempt to present both sides to the stimulus story, it has given media savvy Conservative Republicans their opportunity to individually step out and offer their own version of criticism of the proposal so that they can “beat their chest” with their “base” back home. One has to remember that Republicans in recent years have shown that they have a natural ability for the role of the “loyal opposition.” Their problem comes to the forefront when they win elections and must move from criticizing to governing. They are once again back in their comfort zone – offering constant criticism with no alternative solutions to solve problems.
Part of the problem is their archaic, over-simplified, and naive view of our economic system. It is like they read Ayn Rand’s great novels – Atlas Shrugged, The Fountainhead, etc.- back in 50’s and 60’s and forgot they were fiction. It helps them that their sound bites always include fears of higher taxes, more government spending, and government involvement somehow limiting individual initiative. These are always popular themes with some people and if they can figure out how to incorporate the big, bad bug-a-boo of “socialism” in their few seconds of fame on TV, they have a sure-fire way to raise big dollars for their next election.
Many of them do have a problem, they voted for the previous administration’s bail-out program which gave billions of dollars to big banks, powerful real estate corporations, insurance companies, and auto industry. Hopefully, these congressmen got thank you notes from these people for the undeserved bonuses they received last year. But, when the present administration starts talking about creating jobs, money for schools, money to support state service programs, investment in alternative energy programs, providing funds to move towards some sort of universal health care, re-building infrastructure, etc., they are opposed. Government money distributed to the people is unpalatable, whereas money to “well-healed” corporate America is OK!
I would love to see the Republicans put together a leadership team that would be willing to work in a bipartisan fashion where possible; and, if they disagree, provide well thought-out, reasonable, constructive criticism. This team should be prepared to offer alternative recommendations of how we can deal with massive unemployment, 2 wars, global economic crisis, collapsing infrastructure, declining middle class, deteriorating schools, inequality in medical care, reduction in dependence on foreign energy, etc.
I am fully aware that what Obama is doing holds a great risk. It will need to be modified and adjusted as we move forward. I am convinced that the only suggestion I’ve heard from Republican’s, significant reduction in taxes for businesses and the wealthy, is not a viable alternative – even though it has voter appeal. Most economists reject it as a bad idea, just as it was in 2001. Tax reduction and smaller government is not a cure-all for what ails us.
I have my own concerns with the stimulus package. For example, I’m not thrilled with the idea that the federal government might increase control over education through funding of “no-child-left-behind.” Although Obama has asked for an “earmark free” stimulus package, I don’t want to see special interest groups and a few powerful Congressmen/women getting questionable projects for their districts and states by “back dooring” the legislative process. I’m less than thrilled with massive amounts of money being spent on new roads (rebuilding of existing deteriorating ones excepted), when it is becoming clear that the time has come for a new generation of light rail and railroads to move people and goods.
I want the stimulus package to be just that – a short term boost to the economy not a permanent establishment of broadened government bureaucracy with an exception or two. Obama has promised that. In fact, he has promised a “house cleaning” of unneeded, over funded, ineffective programs. Unfortunately, it is Congress that controls the purse strings and I have been less than thrilled with the Congressional Democratic leadership up to this point. Hopefully, they will rise to the occasion.
As a private citizen, I really have little clout, just a small voice amongst many others. That is why I would like to see the development of a responsible opposition party that will work together in a bipartisan fashion where possible and offer well thought-out, reasonable alternatives when they disagree. If the Republican Party can’t accomplish that, they do not deserve much respect or support and certainly not the opportunity to govern in the future. If all they can accomplish is negative demagoguery, they are no better than their loud, obnoxious talk radio star – Rush Limbaugh.
Friday, January 30, 2009
Saturday, January 10, 2009
Less Frequent Posting in the Future
Not that it represents any significant loss to the world of political, economic, or educational writing, but I will be posting to this blog less frequently in the future. I have truly enjoyed it; but, I had hoped to stimulate more discussion on these issues than what has resulted. Thanks to those who have taken the time to read them and thanks to those who have commented orally that they have enjoyed reading them. I’m amazed that there haven’t been any who have taken issue with some of what was said. There undoubtedly are and maybe they are just being kind.
I’ve decided to take on another hopefully meaningful, creative, and certainly time consuming job of helping to home school our granddaughter. That is the advantage of retirement – doing what one wants to within reason. I taught school and coached at the secondary level for about 15 years some 30 years ago so I should have known what I was getting myself into – plus she is only a 2nd grader for crying out loud! However, it has been an eye opening experience already. Teaching is a tough job requiring all kinds of prep work, background educational reading, and serious thought. I have been truly amazed at the volume of information out there for education of young people. There are K-12 computer programs, supplemental computer programs, many studies on educational practices I’ve not been exposed to over the last 30 years, plus a wealth of curriculum information, exercises, games, etc. to peruse and/or include in one’s instruction.
You take a bright young girl and add in “a little” ADHD and you have a challenging experience that offers an interesting mix of joyful exhilaration in one lesson with a humbling one of failure in the next lesson. It is a roller coaster ride of emotion for both of us. I love it, so I intend to spend a disproportionate amount of time working one-on-one with this little girl I love so much and do my best to remain sane.
I’ve made it very clear to her that I will do my best to help her do well in math and, more importantly, she will learn to enjoy the problem solving challenges of the subject. And, I will do my best to study history with her so that she gains an appreciation and knowledge for a subject she already enjoys. I’ve signed on for as long as her parents want to pursue this educational option and want my involvement. Please wish both of us luck.
I’ve decided to take on another hopefully meaningful, creative, and certainly time consuming job of helping to home school our granddaughter. That is the advantage of retirement – doing what one wants to within reason. I taught school and coached at the secondary level for about 15 years some 30 years ago so I should have known what I was getting myself into – plus she is only a 2nd grader for crying out loud! However, it has been an eye opening experience already. Teaching is a tough job requiring all kinds of prep work, background educational reading, and serious thought. I have been truly amazed at the volume of information out there for education of young people. There are K-12 computer programs, supplemental computer programs, many studies on educational practices I’ve not been exposed to over the last 30 years, plus a wealth of curriculum information, exercises, games, etc. to peruse and/or include in one’s instruction.
You take a bright young girl and add in “a little” ADHD and you have a challenging experience that offers an interesting mix of joyful exhilaration in one lesson with a humbling one of failure in the next lesson. It is a roller coaster ride of emotion for both of us. I love it, so I intend to spend a disproportionate amount of time working one-on-one with this little girl I love so much and do my best to remain sane.
I’ve made it very clear to her that I will do my best to help her do well in math and, more importantly, she will learn to enjoy the problem solving challenges of the subject. And, I will do my best to study history with her so that she gains an appreciation and knowledge for a subject she already enjoys. I’ve signed on for as long as her parents want to pursue this educational option and want my involvement. Please wish both of us luck.
Sunday, January 4, 2009
What's up with Our Country's Financial Leaders?
Something that has always bothered me about the investment world is that it is run by a group of well-educated, intelligent people who seem too often to make terrible investment decisions. As I understand it, a good share of the “market” is controlled by a fairly small group usually identified as institutional money managers, mutual fund managers, investment brokers, corporate leaders, insurance company money managers, big bankers, etc. These are people who handle huge sums of money day-in-and-day-out and seemingly not too well sometimes – as in 2008. In addition to the above, we have well-educated, intelligent government financial people at Treasury Dep’t and Federal Reserve who have been seemingly caught by surprise and who appear to be stumbling around trying to belatedly correct the most recent recession by throwing money to some big banks, insurance companies, and corporations.
It is more than a little scary for lay people, having only a rudimentary understanding of “markets”, to see their life savings (like 401K’s) depreciate 20 to 40% in a few months, see family and friends suddenly unemployed (at 6.7% maybe heading to 10%), see property values decreasing rapidly (resulting in record mortgage defaults and up-side-down mortgage positions), reduction in government services (that many in our society rely on), etc.
Then we get the explanation for the recession. They tell us it started with sub-prime mortgages and the bundling of this paper to be sold around the world. Why would well-educated, smart people trade in these things when it is so obvious that it is a “house of cards” ready to fall apart? Also, we learn that huge, historical icons of American Corporations, like “Big Three Auto Companies”, are poorly managed, surviving on “smoke and mirrors” and are only a few weeks from being broke. We see large, highly respected investment houses like Bear Stearns and Lehman Brothers go under. We see big banks that have existed for generations going broke, being sold at auction, or being bailed out with infusion of massive amounts of government money.
Then, you add to this the rather cavalier attitude that many financial people have regarding these market swings. It is like, “Sure we are going to have these from time to time, it will correct itself, and we’ll be up and running in no time. Just hang on, don’t panic and cash in, maybe carefully move some money around to reposition yourself; but mostly, just relax.” I’m sitting here thinking, why is this normal, why is it so readily acceptable, and why does it happen at all with well-educated, intelligent people managing these financial affairs and these corporations?
Then the real kicker is that if one questions the functionality of our “free-market/capitalistic” system it is like you are committing blasphemy! Suggestions of regulations for the financial/corporate world is a really big, “NO-NO”. These people who have been responsible in large measure for this mess have never seen a regulation they like; and given the choice, they will applaud most deregulation. They insist that regulations will stifle the “free-market/capitalistic” system and its wonderfully self-regulating ability to create wealth for us all. The amazing thing is that they can say this with a straight face while “bellying up to the bar” with their open palm extended for government bail-outs. Then when it is suggested that they be held accountable for it, they are aghast, “What do you mean we have to tell you how we spend the money, how unreasonable. We know how to run our businesses and the worst thing that can be done is to get the government involved. And, by the way, if this isn’t enough money, we’ll be back to you when we need more.” Why do they hold to the archaic view of preserving a “pure capitalistic/free-market” economy? We haven’t had this system, other than in name, for about a century. We have a “mixed economy” with heavy government involvement that experience has shown us is needed to prevent illegal, unethical, ill-conceived, and abusive practices. Unfortunately, we evidently don’t have it quite right yet.
I’m sorry that I have no definitive answers to the questions I’ve asked throughout this column. I think they are worth some contemplation. But, in the mean time, our best choice might be to rely on carefully crafted government regulations that establish a delicate balance between freedom and controls that don’t unreasonably hinder the market system. That is the challenge moving forward with our “mixed economy”. We will have to constantly adjust the ‘rules-of-the-game”. Our aim should not be to eliminate risk, without risk you stifle innovation, creativity, and growth. But, maybe we can curtail the “lemminglike psychology” that overwhelms the entire market too frequently.
It is more than a little scary for lay people, having only a rudimentary understanding of “markets”, to see their life savings (like 401K’s) depreciate 20 to 40% in a few months, see family and friends suddenly unemployed (at 6.7% maybe heading to 10%), see property values decreasing rapidly (resulting in record mortgage defaults and up-side-down mortgage positions), reduction in government services (that many in our society rely on), etc.
Then we get the explanation for the recession. They tell us it started with sub-prime mortgages and the bundling of this paper to be sold around the world. Why would well-educated, smart people trade in these things when it is so obvious that it is a “house of cards” ready to fall apart? Also, we learn that huge, historical icons of American Corporations, like “Big Three Auto Companies”, are poorly managed, surviving on “smoke and mirrors” and are only a few weeks from being broke. We see large, highly respected investment houses like Bear Stearns and Lehman Brothers go under. We see big banks that have existed for generations going broke, being sold at auction, or being bailed out with infusion of massive amounts of government money.
Then, you add to this the rather cavalier attitude that many financial people have regarding these market swings. It is like, “Sure we are going to have these from time to time, it will correct itself, and we’ll be up and running in no time. Just hang on, don’t panic and cash in, maybe carefully move some money around to reposition yourself; but mostly, just relax.” I’m sitting here thinking, why is this normal, why is it so readily acceptable, and why does it happen at all with well-educated, intelligent people managing these financial affairs and these corporations?
Then the real kicker is that if one questions the functionality of our “free-market/capitalistic” system it is like you are committing blasphemy! Suggestions of regulations for the financial/corporate world is a really big, “NO-NO”. These people who have been responsible in large measure for this mess have never seen a regulation they like; and given the choice, they will applaud most deregulation. They insist that regulations will stifle the “free-market/capitalistic” system and its wonderfully self-regulating ability to create wealth for us all. The amazing thing is that they can say this with a straight face while “bellying up to the bar” with their open palm extended for government bail-outs. Then when it is suggested that they be held accountable for it, they are aghast, “What do you mean we have to tell you how we spend the money, how unreasonable. We know how to run our businesses and the worst thing that can be done is to get the government involved. And, by the way, if this isn’t enough money, we’ll be back to you when we need more.” Why do they hold to the archaic view of preserving a “pure capitalistic/free-market” economy? We haven’t had this system, other than in name, for about a century. We have a “mixed economy” with heavy government involvement that experience has shown us is needed to prevent illegal, unethical, ill-conceived, and abusive practices. Unfortunately, we evidently don’t have it quite right yet.
I’m sorry that I have no definitive answers to the questions I’ve asked throughout this column. I think they are worth some contemplation. But, in the mean time, our best choice might be to rely on carefully crafted government regulations that establish a delicate balance between freedom and controls that don’t unreasonably hinder the market system. That is the challenge moving forward with our “mixed economy”. We will have to constantly adjust the ‘rules-of-the-game”. Our aim should not be to eliminate risk, without risk you stifle innovation, creativity, and growth. But, maybe we can curtail the “lemminglike psychology” that overwhelms the entire market too frequently.
What History Teaches Us
History has always fascinated me. I think a deep understanding of history is a pre-requisite for success in many areas including business, local/state/national government, and foreign affairs, just to mention a few. I think what history does, is to teach us what mistakes not to repeat in making current and future decisions. However, it should not dictate what course of action to take with these decisions.
The War in Afghanistan might be a good example. We had good reason to militarily go after al-Qaeda – 9-11. But, history from the time of Alexander the Great, through British occupation, and the most recent Russian debacle in Afghanistan should have taught us not to make the mistake of moving into this country with what they would perceive as an occupying force. History clearly shows that they have the willingness to fight, even against what most would think are insurmountable odds, to resist that perception. They won’t accept defeat – they will choose death; they won’t welcome “nation building” – they will hold to their tribal system; they will not accept “puppet” governments set up by an occupier – they will bide their time and eradicate them as soon as possible; they will stay faithful to their religion and culture – in fact, the more pressure exerted to alter it will simply radicalize it even more. We should have known these things from history.
Understanding these things could have kept us from making the mistakes we made and are still making. A “surge” of more troops will result in having more control of Afghanistan. If you put more “feet on the ground” and more sophisticated military muscle in the country, you will kill more people and destroy more infrastructure; and for the time being, curtail insurgency and opposition because you will simply over-power them. We did it in Iraq. But, will it accomplish any long term goals like: establish a democracy, a peaceful and settled nation, promote human rights (for example, equality of women), create an appreciative ally for us in the region, etc.? I don’t think so!
That doesn’t mean we back away from confrontation with enemies dedicated in destroying us. My choice would have been to punish al-Qaeda with quick, overwhelming, devastating destruction and then get out – no occupation, no nation building, and no rebuilding. True “shock and awe” with no apologies; but, a promise that we will be back if need be. But, the time has passed for this. The Taliban has experienced a resurgence, al-Qaeda is linked closer than ever to them, and the conflict has broadened beyond the tribal areas in Pakistan to possible instability in all of Pakistan which is much more dangerous and complicated. I have confidence that the new administration has the necessary knowledge of history to avoid past mistakes; but, the solution is not to be found in history. It will take an innovative approach which may in the short run cost us more in lives lost and expenditure of money not readily available. In the end, our ego-defense may have to “take a hit” as it did in Korean War, Vietnam War, failed Iran Crisis Rescue Mission Attempt, and Mogadishu (of the tragic Black Hawk Down incident). The only consolation is that history has shown us that backing away from an ill-conceived and conducted military action doesn’t permanently damage our nation, just our ego. It does teach us that we do have limitations.
Another example is our recent economic crisis. Why are we caught by surprise and appalled by the newest “boom and bust?” They aren’t new, history has documented quite well one after another going back to our country’s beginning. We’ve had land speculation busts several times; technological inspired booms and busts like railroads, oil, and the 2001 “.com” one; numerous bank panics; investment speculation bubbles bursting like in 1929 and again in 2008, etc. How much evidence do we have to compile that a “free market” system, left to run amuck on its own, will create yet another “correction”, “down cycle”, recession”, and maybe a “depression”?
We should have learned enough from history to maturely accept the need for our government to balance responsible regulation with economic freedom to make our markets work. We certainly should have learned from history that we can’t expect anything but dire consequences if we retract regulations that were intended to protect us from obviously careless and/or unethical practices. Regulation needs to be carefully crafted and constantly adjusted to meet our needs, but seldom should we even consider deregulation. In addition to the above needed balance, there needs to be the acceptance of the necessity of maintaining a strong middle class which is required for prosperity and successful democracy.
However, history can’t teach us how to handle the most recent crisis. That has to be day-and-age specific problem solving. Hopefully, it will come as a result of much well thought-out public debate on a reasonably level playing field. This is where a democracy becomes so important - where large numbers of a wide variety of citizens take it upon themselves to offer their views. This is why it is so important that our government is not controlled by a few powerful special interest groups.
So, let’s learn and use our history to avoid mistakes of the past; but, let’s use our knowledge, intuition, and creativity to deal with current and future issues.
The War in Afghanistan might be a good example. We had good reason to militarily go after al-Qaeda – 9-11. But, history from the time of Alexander the Great, through British occupation, and the most recent Russian debacle in Afghanistan should have taught us not to make the mistake of moving into this country with what they would perceive as an occupying force. History clearly shows that they have the willingness to fight, even against what most would think are insurmountable odds, to resist that perception. They won’t accept defeat – they will choose death; they won’t welcome “nation building” – they will hold to their tribal system; they will not accept “puppet” governments set up by an occupier – they will bide their time and eradicate them as soon as possible; they will stay faithful to their religion and culture – in fact, the more pressure exerted to alter it will simply radicalize it even more. We should have known these things from history.
Understanding these things could have kept us from making the mistakes we made and are still making. A “surge” of more troops will result in having more control of Afghanistan. If you put more “feet on the ground” and more sophisticated military muscle in the country, you will kill more people and destroy more infrastructure; and for the time being, curtail insurgency and opposition because you will simply over-power them. We did it in Iraq. But, will it accomplish any long term goals like: establish a democracy, a peaceful and settled nation, promote human rights (for example, equality of women), create an appreciative ally for us in the region, etc.? I don’t think so!
That doesn’t mean we back away from confrontation with enemies dedicated in destroying us. My choice would have been to punish al-Qaeda with quick, overwhelming, devastating destruction and then get out – no occupation, no nation building, and no rebuilding. True “shock and awe” with no apologies; but, a promise that we will be back if need be. But, the time has passed for this. The Taliban has experienced a resurgence, al-Qaeda is linked closer than ever to them, and the conflict has broadened beyond the tribal areas in Pakistan to possible instability in all of Pakistan which is much more dangerous and complicated. I have confidence that the new administration has the necessary knowledge of history to avoid past mistakes; but, the solution is not to be found in history. It will take an innovative approach which may in the short run cost us more in lives lost and expenditure of money not readily available. In the end, our ego-defense may have to “take a hit” as it did in Korean War, Vietnam War, failed Iran Crisis Rescue Mission Attempt, and Mogadishu (of the tragic Black Hawk Down incident). The only consolation is that history has shown us that backing away from an ill-conceived and conducted military action doesn’t permanently damage our nation, just our ego. It does teach us that we do have limitations.
Another example is our recent economic crisis. Why are we caught by surprise and appalled by the newest “boom and bust?” They aren’t new, history has documented quite well one after another going back to our country’s beginning. We’ve had land speculation busts several times; technological inspired booms and busts like railroads, oil, and the 2001 “.com” one; numerous bank panics; investment speculation bubbles bursting like in 1929 and again in 2008, etc. How much evidence do we have to compile that a “free market” system, left to run amuck on its own, will create yet another “correction”, “down cycle”, recession”, and maybe a “depression”?
We should have learned enough from history to maturely accept the need for our government to balance responsible regulation with economic freedom to make our markets work. We certainly should have learned from history that we can’t expect anything but dire consequences if we retract regulations that were intended to protect us from obviously careless and/or unethical practices. Regulation needs to be carefully crafted and constantly adjusted to meet our needs, but seldom should we even consider deregulation. In addition to the above needed balance, there needs to be the acceptance of the necessity of maintaining a strong middle class which is required for prosperity and successful democracy.
However, history can’t teach us how to handle the most recent crisis. That has to be day-and-age specific problem solving. Hopefully, it will come as a result of much well thought-out public debate on a reasonably level playing field. This is where a democracy becomes so important - where large numbers of a wide variety of citizens take it upon themselves to offer their views. This is why it is so important that our government is not controlled by a few powerful special interest groups.
So, let’s learn and use our history to avoid mistakes of the past; but, let’s use our knowledge, intuition, and creativity to deal with current and future issues.
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