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August 21, 2009

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As I wrote this morning I was heartened to see that America's Small Business Association hs voiced it's opposition to the healthcare bill. That follows America's large businesses. The tide is rising and the fued between Obama and the left should grow more fierce as Obama begins to twist and turn in an effort to compromise and save his Presidency already in danger after just 6 months in office.

Saturday as I drove down mainstreet in Fredericksburg there were 100 or so Americans with antihealthcare bill and anti big debt signs waving to the drivers passing by. And, am I seeing things or are there more McCain-Palin bumperstickers out there? Maybe they're just more prominant since the "clunkers" are off the roads.

Hey Bo, This one is complicated. But here's a comment:

Obama economically has taken the country in a direction no one has ever had the guts to try before. It would have been political suicide in years gone by to attack and work to dismantle the American capitalistic system in favor of a more liberal and socialistic approach to redistributing income and expanding government services. And it might still. What has made this environment right for such political boldness? Several things:

1. The balancing of America's ethnic groups from a predominantly white population to a more balanced white, Black and Hispanic mix.
This change that has been accellerated by the influx of illegal Hispanics (and the subsequent amnesty programs) has produced a more accepting voter base favoring minority oriented politics. This outcome was inevitable but it came faster than expected.

2. The erosion of the blue collar middle class with the decline of the manufacturing base of America. This 30 year development was the result of the USA political decisions to legislate higher costs of production into most of our industries to ensure that our workers were safe, paid minimum wage and that our environment was cleaner than those of under developed countries. It also didn't help that the US extracted little repayment for the recapitalization of the enemies of Germany and Japan allowing them to modernize all their industries at the expense of the American taxpayer. Meanwhile the American taxpayer (let's remember they were the blue collar workers--middle class that all politicians say they are helping) funded the defense of the new Free World for more than 40 years. This included the Wars in Korea, Vietnam, Iraq I, Iraq II and Afghanistan. The result was higher taxes to support this system on the middle class and American businesses. In the end American industries could not compete under the load and the jobs flowed overseas first to Europe and then to the Far East where these constraints didn't exist. Low wages, pollution, unsafe working conditions, poor product monitoring , etc still exist in these countries. To fund all this the Congress continued to tax Americans in a fraudulent way: in the name of Social Security. They took basically 8% of American workers salaries and then forced American businesses to match it. The idea was to "put away our retirement dollars" for the golden years. It was pure fraud. The dollars were used for the open treasury and operation of the government to continue to grow in size, defend the world and to spend on all kinds of idiotic programs to make politicians look good at home. The result: a poorer middle class, an over taxed middle class, an over taxed business base, hamstrung manufacturers, a declining base of blue collar jobs. All this resulted in a bigger disparity between the haves and the have nots in America. This perceived unfairness gives rise to the infatuation with socialistic solutions to problems. Where we are today.

3. Poor oversight by politiicans in both parties have resulted in the gross mismanagement of the banking, mortgage companies, brokerage firms and Wall Street specualtion that has created this feeling in America that the people who run our businesses are all hustlers exploiting the middle class. The appreciation for the opportunity to become an entrapranuer or to rise up in American industry if one pays the price has been deminished. It has been replaced with the feeling of desparation and distrust. Again the perfect setting for socialistic ideas.

4. One feeds on the other. As the middle class struggled to keep up economically we saw the two worker household emerge and the pressure on the latch key kids and marriages fell apart creating single head of households trying to earn a living and raise kids. The effects on kids of these changes are evident today. Kids today are more prone to change the way they grew up and the new y class has developed. They are focused on living conditions more than income and opportunity. They listen willingly to socialistic ideas.

5. Lower incomes creates a demand for lower priced products and therefore politicians lowered tarriffs and invited more lower priced products into America. The more that came in the more American companies fell to competition. Textiles were one of the great American industries to fall apart. And now the American car companies are going. The worker class is still getting poorer. And socialistic ideas look appealing. Just like cheap imports.

6. The flow of American dollars abroad. First we let the Europeans and Japanese amass huge supplies of US dollars. Then it was the Saudi's for oil. Then the Koreans. Now the Chinese and India. The amassing of US dollars takes the form of debt. And, debt requires we pay interest. Interest on the national debt is just another form of Tax on the middle class. Giving other countries our money to spend subsidizing their industreis or modernizing their factories is self defeating. And it will continue to make American workers poor.

And so what has Obama done to make it better?

1. He is pushing more constraints and taxes on America in the form of the "greening of America". he is forcing America to use more expensive alernative fuels raising the cost of everything in America.

2. He is taxing America to redo it's healthcare system.

3. He is subsidizing the auto industry to slow it's death spiral.

4. In his "stimulus" package he allowed thousands of earmarks to make his Democratic cronies look good at home adding billions to the national debt.

He has done nothing.
Poor people in America = acceptance of liberal social policies. And the conversion of blue collar workers to poor people skews the voter base in his favor. So if you import them and convert them your control over the government accellerates. So is it any wonder that Obama has given most of his attention to implementing social programs and ignored the economy? In fact it could be argued that the implementation of these programs has done to the American economy exactly what he wants: Create a cost basis that will ensure that the wealthy will pay a huge price for generations to come. And the middle class will never rise again.

Or, it could be that too much too soon will create the political backlash that we appear to be seeing. And that 2010 will see the taxpayers regain control over their lives that they deserve.

I agree with Bo that in his final moonths GWB had put in place most of what was necessary to turn the economy around. However, Obama has put in constaints and costs that are likely to supress or dampen any recovery after a short upturn fuelded by lower gas prices and a market rebound.

On a final note let me express my displeasure at the loan the Obama administration made last week to Brazil's oil producer for the exploration and development of offshore oil reserves. That's $2B of US taxpayers money going to Brazil while the US keeps it's wells capped. to make matters worse Brazil sells it's oil to Chana. So, indirectly Obama has just subsidized Chinese oil reserve development. Perhaps the media should look into who has holdings in this oil company tied to Obama. It smells like another political payoff.

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