When words die, so to speak, because of overuse or misuse, this can provide an important view into what we feel and think. When I hear someone of advanced years, say something is "cool" a harsh wrong note is struck. At some point, certain words must be dispatched for sanity's sake. Otherwise, the whole individual demeanor becomes pathetic. Moving on can be tough, but one must. Language moves on too.
When I see politicians, Barrack Obama is simply the latest, spouting the joys of "investment" in education, health care etc . . . I feel that "investment" is the latest candidate for euthanasia. It must die.
Ponder this, investing is putting your money in a financial instrument and getting your money back plus some sort of return or profit. If I buy a stock, it appreciates (hopefully) and I sell it, get my money back and a profit on top of that. Bonds do it differently, but the result is the same. (again hopefully) I'll forgo the list of investments like real estate, art, gold, baseball cards etc . . . because the concept is rather obvious. However, now, politicians of all stripes extol the virtues of "investment". You'd think after the Internet Bubble, this term would have been ditched. Enron, World Com, Global Crossing should have damaged this one, but words die slowly.
We interrupt this blog for a disclosure announcement.
Yes, I once did own Enron. No, I didn't lose everything. I lost 10 percent. The thing that saved me was something I read in this book, The Battle for Investment Survival by Gerald Loeb It's called the ever-liquid account. I won't explain it here because if you are interested, I want you to read the book and learn. What's so special about this book? I could say Barton Biggs loves it, but then I'd have to admit I'm just using his name cause I like the sound of it. (like something from Dickens) The real reason is because this book lays out exactly what we do when we "invest." We are speculating. Our money may vanish in a flash. This is risk. Like the ocean, speculation holds no mercy in her. You adapt to her, ride her or suffer the consequences.
If this were exactly 10 years ago. I might have gotten a lot of hearty laughs. In 1999 stocks simply went up, they didn't go down and they certainly didn't disappear, presto-chango. Now, sounding like the AP, some of America's most trusted companies are gone or on the rocks. Still, the word "investment" endures.
For years, politicians have been borrowing words from other occupations, they feel engender trust. The use of the word "investment" could follow this path. Or it could be that many of the pols have been hanging (can we get rid of this word too?) with the financial companies that use this word everyday in the course of business like AIG.
How would I know who "hangs" with AIG? Well, I only know who got money from AIG. In 2008 alone, Senator Chris Dodd got $103,000, President Barack Obama got $101,000, Senator John McCain got $59,000, Secretary of State Hilary Clinton got $36,000 and Senator Max Baucus got $25,000. That's only the top five AIG beneficiaries.
So when some pol talks about "investment" in education in failing schools or "investment" in an unproven health care system or "investment" in uneconomic energy, reflect on it. Think about what investment really is. It's speculation pure and simple. Or as Barney Frank would say "it's a roll of the dice." Unless, of course, you're being paid like the aforementioned pols to speculate, I mean, "invest" with other peoples' money. That's not risk. That's a layup and I think we can still use that word. Let that one live.
Saturday, March 28, 2009
Sunday, March 15, 2009
The More Times Change . . .
Last Friday at the Brookings Institution, Lawrence Summers, an Obama economic advisor repeated the phrase "in the coming weeks." Both times it referred to struggling Treasury Secretary Timothy Geithner, rolling out new plans for an economic resurrection. The usual stalling by Team Obama with their economic recovery plan was spiced with a dash of cheer. With little detail as to how banks and the financial system would be fixed, Summers tried push the glass half-full picture of the economy. In time, things will get better.
This shift of tone by Summers and others comes as El Presidentes' poll numbers have started to slide. The honeymoon is clearly over and Bush bashing carries little weight now. Decades ago, the slower news cycle might have given Obama six months or a year of breathing space. The instantaneous news cycle that worked to his advantage during the campaign, now demands not just actions, but results. The feel good offensive attempts to get the spending train rolling so the economy picks up, so Obama can pass stimulus 2.0, health care ( a meager $600 billion down payment ), more money for Detroit, more money for banks etc . . .
However, time is not an ally of Obama. Unemployment in the U.S. has already hit the level the Obama folks felt it would hit at the end of the year. Clearly, things are getting worse faster than the pr folks can plug the holes in the propaganda dike. The Bush Recession is fast becoming the Obama Depression. More spending must be rammed through fast and taxes must be raised now, before people start digging in their heels. The health care plan is now seen as needing more funds. Obama minion Peter Orzag has floated the idea of taxing private health benefits, something Candidate Obama skewered John McCain for proposing.
It's also necessary to buy some time by attacking the critics. Mouth off any doubts about Obama economics or a plummeting stock market and you might wind up in front of jokester Jon Stewart and his video editing steamroller. Since his chief prop W has departed, Stewart has to make ends meet by staging a Soviet-style show trial complete with a remorseful stooge. And he's rather good at it. As the volume goes up on the criticism of Obama and the flaccid economy, look for this comedic Robespierre to swing into action again all in the name of the public good, of course.
Speaking of jokes, Lawrence Summers had one in his speech. With a subdued wistfulness, he recounted how in 2000, at the end of the Clinton Administration, he had joked with colleagues about how the government would issue debt since the government was running a surplus. The laughter quickly evaporated as each audience member grasped the real punchline. We will be living with deficits and massive debt for our lives and generations to come. The Obama spending behemoth guarantees that fact. Additionally, the liberal playbook states taxes must be raised and raised again. The result will be slower growth, a longer recovery and a lower standard of living for all.
Liberals made the same mistakes in the Great Depression. Funny thing is they were copying Republicans initially and then wanted to outdo them. Required reading for today must include Amity Shlaes now eerily prescient history of the Great Depression, The Forgotten Man. Here, you find a fascinating parallel between that depression and this one. Under Hoover as the Depression set in, Republicans raised taxes and funded massive new public works projects, like Hoover Dam to stimulate the economy. This time around Bush pumped out billions in checks last spring and then followed with TARP and the Detroit bailout in the fall. Substituting this time for a tax increase was a rocketing up of the price of oil during the summer of 2008. The wealth sapping effect effect was very similar.
FDR arrived and not only continued the massive spending of Hoover, but he cranked it up and raised taxes some more. Obama has outdone imitation here. He's seriously ratcheting up spending to a level well in excess of FDR and he's raising taxes. We can't really say the parallel works with Smoot-Hawley tariff act because Bush was mostly for free trade. However, Obama seems more inclined to go the protectionist route and made noises to that effect during the campaign.
The chilling big difference between then and now: the government then wasn't running a huge deficit and fighting two wars. Another difference is the role of the states. States in the 30's didn't provide near the number of programs they fund now, so they didn't mightily tax the way the do now. Big states like California and New York are planning massive tax increases along with smaller fry like Utah, New Hampshire and, of course, Massachusetts. As an example, the Bay State is planning to raise the gas tax 19 cents, raise the sales tax by 20%, raise the meals tax, and my favorite put a tax on candy. How these guys missed taxing a constituency (children) that can't vote all these years is beyond me. Obama can brag all he wants about not raising taxes on 95% of Americans, but the states will do the job for him and then some. And when the stimulus runs out in two years, the states will have to raise taxes again to fund their programs once again.
And one last parallel, between the Great Depression and today's the Roosevelt Administration was very active in pursuing a list of enemies. Whether they were people from the Hoover Administration or those who could frustrate their current plans, people like Andrew Mellon and Sam Insull were attacked via the media and the courts. The Obama crew hasn't gotten to the court just yet, but the media take downs are just beginning. As the pie shrinks, the divisions in America are about to get nasty. No amount of cheerleading or pr hit jobs can stop that. Let's just hope somebody else besides comedic inquisitor Jon Stewart and Obama, with the inevitable multimillion dollar book deal waiting, prosper in the next three years. Or else the obvious question of 2012 will be, are you better off than you were four years ago?
This shift of tone by Summers and others comes as El Presidentes' poll numbers have started to slide. The honeymoon is clearly over and Bush bashing carries little weight now. Decades ago, the slower news cycle might have given Obama six months or a year of breathing space. The instantaneous news cycle that worked to his advantage during the campaign, now demands not just actions, but results. The feel good offensive attempts to get the spending train rolling so the economy picks up, so Obama can pass stimulus 2.0, health care ( a meager $600 billion down payment ), more money for Detroit, more money for banks etc . . .
However, time is not an ally of Obama. Unemployment in the U.S. has already hit the level the Obama folks felt it would hit at the end of the year. Clearly, things are getting worse faster than the pr folks can plug the holes in the propaganda dike. The Bush Recession is fast becoming the Obama Depression. More spending must be rammed through fast and taxes must be raised now, before people start digging in their heels. The health care plan is now seen as needing more funds. Obama minion Peter Orzag has floated the idea of taxing private health benefits, something Candidate Obama skewered John McCain for proposing.
It's also necessary to buy some time by attacking the critics. Mouth off any doubts about Obama economics or a plummeting stock market and you might wind up in front of jokester Jon Stewart and his video editing steamroller. Since his chief prop W has departed, Stewart has to make ends meet by staging a Soviet-style show trial complete with a remorseful stooge. And he's rather good at it. As the volume goes up on the criticism of Obama and the flaccid economy, look for this comedic Robespierre to swing into action again all in the name of the public good, of course.
Speaking of jokes, Lawrence Summers had one in his speech. With a subdued wistfulness, he recounted how in 2000, at the end of the Clinton Administration, he had joked with colleagues about how the government would issue debt since the government was running a surplus. The laughter quickly evaporated as each audience member grasped the real punchline. We will be living with deficits and massive debt for our lives and generations to come. The Obama spending behemoth guarantees that fact. Additionally, the liberal playbook states taxes must be raised and raised again. The result will be slower growth, a longer recovery and a lower standard of living for all.
Liberals made the same mistakes in the Great Depression. Funny thing is they were copying Republicans initially and then wanted to outdo them. Required reading for today must include Amity Shlaes now eerily prescient history of the Great Depression, The Forgotten Man. Here, you find a fascinating parallel between that depression and this one. Under Hoover as the Depression set in, Republicans raised taxes and funded massive new public works projects, like Hoover Dam to stimulate the economy. This time around Bush pumped out billions in checks last spring and then followed with TARP and the Detroit bailout in the fall. Substituting this time for a tax increase was a rocketing up of the price of oil during the summer of 2008. The wealth sapping effect effect was very similar.
FDR arrived and not only continued the massive spending of Hoover, but he cranked it up and raised taxes some more. Obama has outdone imitation here. He's seriously ratcheting up spending to a level well in excess of FDR and he's raising taxes. We can't really say the parallel works with Smoot-Hawley tariff act because Bush was mostly for free trade. However, Obama seems more inclined to go the protectionist route and made noises to that effect during the campaign.
The chilling big difference between then and now: the government then wasn't running a huge deficit and fighting two wars. Another difference is the role of the states. States in the 30's didn't provide near the number of programs they fund now, so they didn't mightily tax the way the do now. Big states like California and New York are planning massive tax increases along with smaller fry like Utah, New Hampshire and, of course, Massachusetts. As an example, the Bay State is planning to raise the gas tax 19 cents, raise the sales tax by 20%, raise the meals tax, and my favorite put a tax on candy. How these guys missed taxing a constituency (children) that can't vote all these years is beyond me. Obama can brag all he wants about not raising taxes on 95% of Americans, but the states will do the job for him and then some. And when the stimulus runs out in two years, the states will have to raise taxes again to fund their programs once again.
And one last parallel, between the Great Depression and today's the Roosevelt Administration was very active in pursuing a list of enemies. Whether they were people from the Hoover Administration or those who could frustrate their current plans, people like Andrew Mellon and Sam Insull were attacked via the media and the courts. The Obama crew hasn't gotten to the court just yet, but the media take downs are just beginning. As the pie shrinks, the divisions in America are about to get nasty. No amount of cheerleading or pr hit jobs can stop that. Let's just hope somebody else besides comedic inquisitor Jon Stewart and Obama, with the inevitable multimillion dollar book deal waiting, prosper in the next three years. Or else the obvious question of 2012 will be, are you better off than you were four years ago?
Sunday, March 1, 2009
Look no further
Sometimes, I shudder when I see the economic news these days. The wrenching monetary disaster has shattered lives, dumped dreams and tied a lead weight to so many other tasks great and small. It seems everywhere. As Neill Young sang "There's a shadow running though my life, like a beggar goin' door to door." And this doesn't look to be over any time soon. Like the Depression or Japan's Lost Decade, this could go on indeed ten years. For most, it's so hard and heartbreaking because as Bill Clinton used to patronizingly intone, they played by the rules. The powerful few, whether in business or government, who have abused the system, have added massive insult to the massive injury. We have been collectively kicked in the teeth. We may get new teeth, but that promises to be a long arduous process for the national body.
So, now we get Obama and his new carping campaign. The State of the Union, the Budget and the surrogates all decry how "irresponsible" we've all been. More than 90% of people with mortgages pay them on time. Yet, now, 10% renege on their payments and we're all to blame? Obama insisted on wagging his finger during the State of the Union as if the nation were some wayward child, not someone in need of, dare I say, hope. We all know full well the honesty and fairness of the last famous finger wagger. The phrase "I did not have sex with that woman . . ." accompanied by the pointing index finger was effective . . . for a time. In time, though, it became a joke. The words and attitude were found not match reality. A product of the sixties, the credibility gap had arisen and the Clinton presidency was effectively over.
Now that we're hurting, we get David Axelrod, Obama minion, doling out the healing salve of tough talk because "sternness is appropriate." What absolute rot. Like a cheesy ad for Ronco, there's more. In pushing the budget, Axelrod says the budget is "a candid call to return to ethics and responsibility." If this isn't the usual cheap cynical play, I've got a good place to start this return movement for ethics. Let's look no further than Barrack Obama's old Senate seat. Why not flush the liar holding Obama's seat? Roland Burris said he had no contact with the Blago camp, but he did. His son got a job from Blago. His consulting company (a politician with a consulting company-now there's a licence to steal literally) got state contracts. This guy couldn't get any dirtier.
Everyday that crook occupies Obama's old seat is a day the Obama administration has zero credibility calling anyone on ethics or responsibility. If you want to return to something, why not make it what actually has worked in this country, like say, the Constitution. John Adams said "A government of laws, not men." When the laws do not apply to leaders like Roland Burris because he's a buddy of Obama, there's no incentive for the people to follow the rules. Forget about the economic turmoil, the fabric of the democracy is now threatened.
Obama seems determined to flirt with the infamous credibility gap. Besides William Clinton, that trap caught and destroyed one of the most able politicians in U.S. history: LBJ. Obama and his lackeys would be wise to avoid that trap, but, as with LBJ, hubris may prevent such action.
Who knows? Maybe the application of laws to some of the openly crooked in our political class like Roland Burris, Barney Frank, Chris Dodd etc . . . might spur a return to confidence in government. Perhaps, this might even buck up the sagging confidence in the economy. Perhaps, this could happen, but then, I've always been far too much of a dreamer.
So, now we get Obama and his new carping campaign. The State of the Union, the Budget and the surrogates all decry how "irresponsible" we've all been. More than 90% of people with mortgages pay them on time. Yet, now, 10% renege on their payments and we're all to blame? Obama insisted on wagging his finger during the State of the Union as if the nation were some wayward child, not someone in need of, dare I say, hope. We all know full well the honesty and fairness of the last famous finger wagger. The phrase "I did not have sex with that woman . . ." accompanied by the pointing index finger was effective . . . for a time. In time, though, it became a joke. The words and attitude were found not match reality. A product of the sixties, the credibility gap had arisen and the Clinton presidency was effectively over.
Now that we're hurting, we get David Axelrod, Obama minion, doling out the healing salve of tough talk because "sternness is appropriate." What absolute rot. Like a cheesy ad for Ronco, there's more. In pushing the budget, Axelrod says the budget is "a candid call to return to ethics and responsibility." If this isn't the usual cheap cynical play, I've got a good place to start this return movement for ethics. Let's look no further than Barrack Obama's old Senate seat. Why not flush the liar holding Obama's seat? Roland Burris said he had no contact with the Blago camp, but he did. His son got a job from Blago. His consulting company (a politician with a consulting company-now there's a licence to steal literally) got state contracts. This guy couldn't get any dirtier.
Everyday that crook occupies Obama's old seat is a day the Obama administration has zero credibility calling anyone on ethics or responsibility. If you want to return to something, why not make it what actually has worked in this country, like say, the Constitution. John Adams said "A government of laws, not men." When the laws do not apply to leaders like Roland Burris because he's a buddy of Obama, there's no incentive for the people to follow the rules. Forget about the economic turmoil, the fabric of the democracy is now threatened.
Obama seems determined to flirt with the infamous credibility gap. Besides William Clinton, that trap caught and destroyed one of the most able politicians in U.S. history: LBJ. Obama and his lackeys would be wise to avoid that trap, but, as with LBJ, hubris may prevent such action.
Who knows? Maybe the application of laws to some of the openly crooked in our political class like Roland Burris, Barney Frank, Chris Dodd etc . . . might spur a return to confidence in government. Perhaps, this might even buck up the sagging confidence in the economy. Perhaps, this could happen, but then, I've always been far too much of a dreamer.
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