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April 22, 2010

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Not having any credentials whatsoever, I will try to briefly differentiate the basic themes I see being presenting by Democrats and Republicans. It is easy to get lost on the details in a particular issue.

1. A view that the USA has been bestowed (through God?) with individual rights [for example, a right to seek happiness, which should not be controvertial]. In this view, the state should not inpinge on individual rights.

2. A view that collective rights are paramount, wherein the state is obligated to meet the collective good. For example, the state should ensure that everyone has "adequate" housing, food, medical care, etc.

The first view place responsiblity on the individual, saying that the government should not interfer with the individual quest. The second view places the responsibility on the collective(government) to satisfy the entitlements of the individual.

This may be simplistic, but I believe that it defines the differences between the Repubican and Democratic Parties, once one sweeps aside the "Progressive" (i.e., elitist) element from both sides of the aisle.

Hope this helps, Alan Bowen

Bill Bowen, our leader, just emailed me some photo's of the oil spill. And, he commented that along with the Reid Veto of Yucca Mountain nuclear dump and the coal mine accidents that we will be doomed to use windmills and Saudi oil forever. Brings up my near favorite subject: Energy. And my thoughts are:

For America to continue to prosper we have to get a handle on our debt and our balance of payments problems. The number one problem is oil acquisition from overseas. So keep the solution simple and cheap. Use our resources here to lower our import needs.
1. So the Governor of Virginia, unlike the Governor of California, has initiated offshore drilling to develop economic resources for his state. Obama seeing the "political" merit of this immediately followed suit and announced vast new offshore territories for drilling. Forget that the wells are already drilled in California and they were not included in the new release. Then, BOOM. Almost as if the Saudi's blew it up a rig explodes killing people and polluting the gulf. Worse yet there is no quick way to shut it down. In my countries overseas offshore rigs have emergency shut off systems for emergencies. Not this one. Why? See my point has always been that environmentalists should spend their time and dollars improving things rather than fighting them. The US military will now be called in to shut it off. There is no logic to a rig drilling at 5000 feet in the ocean not having a shut off valve in the event of emergency. US technology is too good not to. And, oil is too economically viable for cost to make a difference in the equation. This is one irresponsible accident. Leislators, petroleum companies and environmentalists are all at fault here.
2. Why not be drilling on land where pollution and technology are much easier to control? The states have lots of oil under the ground --go get it and legislate and regulate the conditions under which it is discovered and produced. Don't fight it.
3. Coal mines are dangerous places to work. Coal is a great energy resource for our country. Above and below ground it produces many jobs and saves the US billions of dollars of imports. So, make it as safe as possible. Stop fighting clean coal and spend the time, energy and money making the job as safe as possible.
4. I asked where we will put the nuclear waste now that Yucca Mountain is suspended. And, I was told that there is now new technology that allows you to bury the waste where it is produced so no need to transport it to Nevada. OK --perhaps so. How do the people in Virginia going to feel about the Lake Anna waste being buried in their subdivision. After all, Obama just announced our new nuclear reactor initiave to build another 10 or so. And, he signed the Arms reduction treaty with Russia to eliminate 1500 of our nuclear arms. Where will we bury that nuclear waste? But there is no doubt that nuclear power is a safe and local form of fuel--everytime you look at the sun you marvel at it's capacity to produce seemingly endless power for billions of years. Let's get started and let's find a workable solution to disposing the waste.
5. In the NY times article of 4-26 on the burst of econimic activity the opening line depicted shipments of agricultural products heading overseas. Good for American jobs, balance of payments and good for the health of the world. So why every time I gas up is my gas 10% ethanol? Why would we want to use exportable commodities to supplement gas? Grow algea on wastetreatment sites if you want to but leave the grains of the US for the world to eat and US farmers to sell.
6. Windmills at sea? Even environmentalists long in favor of windmills returning from the middle ages are shaking their heads "no" to this one. The potential of windmill poser is so slim even T Pickens gave up on it.
7. Natural gas. Now there is a solution that deserves our full attention. It is plentiful here in America. It is technologically simple. It can be safe to produce and to use. It does not easily pollute. It is clean and it is easy to use. Exploit it now. Hear anyone talking about it except Mr Pickens?
Coming soon: Arizona and Iran. Plus Mr Bowen's article for the week.

correction to prior comment: Fannie and Freddie (not Sallie) courtesy of Bill Bowen --the brains behind this site where we are free to "rant".

WOW. Yesterday's testimony on the hill was some show. It appears Goldman Sachs caused the great meltdown of the economy. Simply by selling risky portfolio products that they knew were risky. And, then betting against the buyer being right. I grew up in Las Vegas. Harry Reid was the head of the Nevvada gaming commission. Isn't that exactly what the casino's do? Sell their customers looking for a big return a risky proposition that they advertise as being a 200-1 shot and then bet against them winning it? In fact don't most of the state governments sell lottery tickets with 100,000,000 to one odds of winning to mostly poor people with dreams of winning the American dream and then bet against them? And, the guys who were "outraged, sitting on the stage asking the questions and swearing like drunken sailors" had no idea these guys did that for a living? And none of them took any money from the GS boys? Please, please hand me the crying towel.

Beginning with the Clinton guys Fannie and Sallie began to loosen credit for mortgages. From then on things got looser and looser. No one looked at the risk. Those who sounded the warning bell were run off by Barney Franks and we were assured that all was well at Fannie and Sallie. Chris Dodd was busy getting his own mortgage deal. Proposed regulation was defeated in the interest of everyone owning a home. Loan packages laced with bad debt were sold openly with high yields to attract risk takers. Then Derivatives were sold however they might work. Banks who now won't loan a nickle were into the deals. So were foreign governemts. AIG insured the mess and gave out big bonuses so happy were they to have the business. And, GS paid out huge campaign contributions as insurance against either party regulating the market. Meanwhile GS bet on the mess falling apart and even though they had straddled the mess GS still had to be "bailed out" too. Obama got the most: $15M in contributions, I believe. And somehow this is all the fault of GS executives. What suckers the politicians play us to be. Let's vote on the "reform" every day so we can make the Republicans look bad. Let's swear at the GS executives so we can make them look like crooks. The reform package we vote on daily does not even include Fannie or Sallie in it. It does not even mention campaign contribution reform. Should politicians who are to regulate financial institutions even be allowed to take money from them? Isn't that the same as prison guards taking money from the families of the prisoners to watch them a little less carefully? Man oh man and these are the guys who have their own healthcare system and their own retirement system while we suckers pay them to do this to us? And now it is wrong for police in Arizona to ask a criminal for his papers?--oops--another subject for another day. Enjoy!! the show.

Yesterday April 26,2010, an article ran on the front page of the NY Times "From the Mall to the Docks, Signs of a Rebound". I was asked by a friend on capital hill what I thought of the somewhat rosy message. Below are some excerpts of my respnse. I could go a lot deeper on this subject but the basic thoughts are contained herein:

In general despite being from the NY times which tends to paint a rosy picture of most things I agree with much of this article. If you read it carefully you will see that it is saying everything is looking up except hiring. But, in truth as I've pointed out for the last 6 weeks employers are looking at people. Many of our clients are sensing an attitude change in the country. One of the reasons is the healthcare argument is suspended for a while. Also the economy has hit rock bottom. There is a minimum that occurs about 12-18 months in most down cycles where it doesn't get any worse. From there things begin to stabalize. Then if all goes well things pick up and we get a 4-7 year upturn. What concerns me here is that Obama doesn't understand the effect of his interference. Healthcare was major psychologically. As the article points out consumer confidence has dropped this month to 69.5 and I've seen surveys that are even lower. At it's worst this factor was 55.3. The underlying needs of employers to stimulate hiring is credit for businesses to expand, low inventories, and consumer credit. At the moment we have low inventories and that is what you are seeing prompt the spending. Consumers and businesses cannot go without forever. However, with savings dropping and banks still tightening it is unlikely that small business owners are going into the expansion mode. Perhaps they will go into the replenisment mode if consumers spend consistently. However, consumers are going to see the effects of several things: Healthcare costs are going to rise and impact them. Healthcare increases are going to cause businesses to raise prices. Increased taxes are going to impact businesses and consumers next year. Obama will try to pass an energy bill and the psychological trauma for the country will increase causing more hesitation. Unemployment benefits will be cut by the states reeling from red ink and those people will be unable to continue to spend. The first time home owner credit will expire and the miniscule housing sales increase will likely abate. And, worst of all the election cycle will begin. Campaigning and all it's negative debate always decreases eceonomic activity. This one will be worse than 2008 because Obama is now a known person and healthcare will be a major issue once again. The stimulus money will no longer bail out the unemployed and the states who refuse to be fiscally responsible. Long term the debt service will extract an enormous price on the economy whether it is solved with increased taxation or devaluation of the dollar. The census workers will go back into the unemployed in September. Unemployment is probably around 15% right now.

If somehow we could not have the election debates, if we could get Obama to put his program initiatives on hold while the country recovers then perhaps the economy could come back faster. But, in the end it will come back. Perhaps unemployment will remain higher among the lower middle class. America has destroyed it's ability to create jobs for the lower working class because it allows unrestricted immigration and creates it's own achilles heel. Someday I'll write a paper on how the US immigration policy of open borders destroys the wages, the entitlement programs and the lifestyle of the lower middle class. But not today.

Finally, as with all articles there is a rosy trick to this one. All figures are given as percentages. When you use percentages to describe increases after huge decreases you get misleading results. For example, if the stock market goes down 50% as it did then to get back to even you have to have a gain of 100%. So all these up 27%, up 7%, up 5% factors are totally misleading becasue they are measured against a much reduced base number. Housing increases of 27% over last year is meaningless if last year's number was down 90% from the year before. It means that housing increases were up 1 % compared to two years before.

On the GOOD news side employers start hiring about 2-3 quarters after interviews start up and we are reaching that point. SO if we can leave the economy alone for a while we should get hiring in the months ahead. Do you think we can get Obama to put things on hold for a while?

Doesn't it seem ironic that the people who are proposing the Wall Street reforms are all on the Wall Street payroll? the President and most of the major players in Congress from both parties openly court the wall Street firms for their contributions to get elected.
Is this pure BS or what? How can any of us ordinary people believe anything that either party has to say in this debate with both parties so deeply indebted to the parties they are trying to regulate? Is this any different than Chris Dodd and Barney Frank's relationships with Fannie and Sallie? This smacks of the 1930's when the politicians and police were all taking money from the mob in order to protect them from --the police! And guess where that was worst? Yep Illinois and NYC. The same political machine trying to make us believe they will get things right.

We just endured the worst financial scare since the 1929 crash. And, the primary culprits are now being chasitised by the people in bed with them. Can we believe that a man who got elected with the help of the Unions and has since delivered favor after favor to the Union leaders of America is really going to turn on his Wall Street financial backers? At a time when he is going to need their war chests again in only a few months to back his party once again. This is the same man and party who barely spoke a word when his ACORN machine was exposed as corrupt. I would certainly like to see Wall Street regulated. But not by the politicians. We need some clean people to figure it all out for us. Someone we can trust to make the recommendations. Any ideas who might do that job, Bo?

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