Why is it that the average American has such a rabid fear of socialism without even the most basic understanding of what it means?
The media is full of anti-Obama comments all focused on some aspect of socialist conspiracy. This fear of socialism, appears to have taken the place of communism as the great satan now that we have "beaten" the soviets.
Perhaps I have been an ex-pat for too long so I am missing an understanding of the fears. To me there has always been a distinction between politics and economics, despite the efforts of members of the left and the right to merge the two.
Granted, at the extreme, communism presumes a "dictatorship of the proletariat" so the boundaries are blurred in that instance. But socialism is separate from communism. It is only the ignorant or those who prey and depend on the ignorant that hope to remove the differences between the two.
So now I hear that Obama's plan is to create such chaos that he and the Democratic Party can ride in and "save" America with a socialist/Marxist state.
This cry is followed rapidly by the charge that his goal is wealth re-distribution such that big government, voted in by the evil democrats will now force the wealthy Americans to pay for everything while the rest of the nation sits back and eats from the government trough.
It is ironic that the very people who are currently gorging themselves at the government trough, the nation's wealthy elite, after pushing through "moral hazard free" deregulation in almost every area but certainly in finance are now suddenly worried that their gravy train is going to end.
And their solution to the challenge-discredit Obama at every turn and twist his every act into some version of a socialist threat.
How they fail to see that Obama is the American Dream. Despite all the odds he has become president of the United States. Why does the right think he is not a capitalist?
Yes he wants liberty and justice for all. And he wants the freedom to fulfil the pursuit of happiness- for all of us. Not just the top 1%
This is not the time to be playing party politics. The U.S. has a number of serious problems to address. Energy, the value of the $, and how to manage the deficit at the same time as trying to instill growth into the economy.
The geopolitical aspects of our problems-energy resources, the value of our currency both outright and as "the" reserve currency in conjunction with a difficult economy require something other than business as usual.
The extreme commentators from the "true" left are busy adding fuel to the fire that the rabid populists of the right are busy stoking for their personal gain at the expense of our nation.
Tuesday 31 August 2010
Monday 30 August 2010
Through the Generations
There was an interesting article/editorial in last Friday's FT on the tension between youth and baby boomers. It left out the other "challenge" to baby boomers-taking care of their parents, but in a tongue-in-cheek sort of way addressed the very real friction between generations.
Of course there has always been a generational divide between parents and offspring so it is not as if the article had touched on anything truly earth shattering. It did try and address the sense that much of today's youth seems to feel that their parent's generation happily despoiled the environment in the course of becoming the "me" generation.
It is always interesting to me how we all seem to think that the degradation of the environment is a new phenomenon. Now I don't wish to get embroiled in a major discussion on the damage that humankind has done/is doing to the environment. The state of the environment is catastrophic.
But it is a result of human development. It is somewhat like warfare. We have been killing each other for ever. It is just that relatively recently we became much more technologically advanced and so now can kill much more efficiently. We aren't better or worse-just more competent.
That is where we are with our environment as well. We trash it in the name of progress-something we have always done, but now are much more "efficient" at so doing which is bringing us closer to a tipping point.
So it not strange that at many dinner tables there are discussions as to what we as baby boomers did, and how our children's generation will have to pay the butcher's bill, in almost every sense one would like to imagine. It is therefore not strange that there is resentment, even anger.
But here again it is not that new. Traditionally having many children was amongst other things a form of ensuring that one was cared for in infirmity. It was just part of the cycle. With changes in technology the concept of "caring" has changed, but not the need. The inter linkage of the generations is a fact, and where there is contact, there is abrasion.
And of course this is all happening as our children are becoming young adults themselves and looking at their futures, with all the hopes and fears that we have all had to endure as we were growing up.
It is a daunting prospect. And when the weight of environmentalism, the cost of "national debt" and the desire/need to forge one's position in the world all converge it creates stress and fissures.
As a parent one oscillates between trying to live one's own life as well as trying to support one's children morally, psychologically and yes, financially without either becoming too overbearing or too distant.
It is not easy. Nobody "asked" to be born, and yet here we all are.
Of course there has always been a generational divide between parents and offspring so it is not as if the article had touched on anything truly earth shattering. It did try and address the sense that much of today's youth seems to feel that their parent's generation happily despoiled the environment in the course of becoming the "me" generation.
It is always interesting to me how we all seem to think that the degradation of the environment is a new phenomenon. Now I don't wish to get embroiled in a major discussion on the damage that humankind has done/is doing to the environment. The state of the environment is catastrophic.
But it is a result of human development. It is somewhat like warfare. We have been killing each other for ever. It is just that relatively recently we became much more technologically advanced and so now can kill much more efficiently. We aren't better or worse-just more competent.
That is where we are with our environment as well. We trash it in the name of progress-something we have always done, but now are much more "efficient" at so doing which is bringing us closer to a tipping point.
So it not strange that at many dinner tables there are discussions as to what we as baby boomers did, and how our children's generation will have to pay the butcher's bill, in almost every sense one would like to imagine. It is therefore not strange that there is resentment, even anger.
But here again it is not that new. Traditionally having many children was amongst other things a form of ensuring that one was cared for in infirmity. It was just part of the cycle. With changes in technology the concept of "caring" has changed, but not the need. The inter linkage of the generations is a fact, and where there is contact, there is abrasion.
And of course this is all happening as our children are becoming young adults themselves and looking at their futures, with all the hopes and fears that we have all had to endure as we were growing up.
It is a daunting prospect. And when the weight of environmentalism, the cost of "national debt" and the desire/need to forge one's position in the world all converge it creates stress and fissures.
As a parent one oscillates between trying to live one's own life as well as trying to support one's children morally, psychologically and yes, financially without either becoming too overbearing or too distant.
It is not easy. Nobody "asked" to be born, and yet here we all are.
Tuesday 24 August 2010
Who is in Whose Pocket?
I am pleased to see that Paul Krugman continues to bang the drum against making the Bush Tax-cuts for the merely rich, the top 1% of Americans and for the super rich-the top 1/10th of 1%of the American population-permanent.
Now Mr Krugman's figures suggest that some 120,000 Americans will each save an average $3million over the next decade if these tax cuts are maintained.
He goes on to say that if all of the tax cuts are made permanent that will be over $680 billion over the next decade.
It seems so simple to me that the last thing we need with a massive deficit is to enshrine these subsidies to the very rich in law, and yet it would appear that Congress is working hard to do just that.
It would be extremely interesting to draw a graph of the top 120,000 political donors/lobbyists to Washington and cross-reference them to the top 120,000 rich Americans who have been and will continue to be the beneficiaries of this tax cut.
I do not have such a graph and so my point is admittedly conjecture. Despite that, it is true that growth of the role of finance in the U.S. GDP has been nothing short of phenomenal in the last 25 years, and there is indeed documentation to demonstrate the increased role of "Wall Street" in providing political funding. There is also an almost perfect correlation between the the list of the new "super-rich" and the movers and shakers of finance.
Perhaps Mr Krugman's concerns about the ability of Congress to do "the right thing" for the populace at large and of course to help combat the budget deficit is a reflection of the depths to which our politicians have fallen...
Now Mr Krugman's figures suggest that some 120,000 Americans will each save an average $3million over the next decade if these tax cuts are maintained.
He goes on to say that if all of the tax cuts are made permanent that will be over $680 billion over the next decade.
It seems so simple to me that the last thing we need with a massive deficit is to enshrine these subsidies to the very rich in law, and yet it would appear that Congress is working hard to do just that.
It would be extremely interesting to draw a graph of the top 120,000 political donors/lobbyists to Washington and cross-reference them to the top 120,000 rich Americans who have been and will continue to be the beneficiaries of this tax cut.
I do not have such a graph and so my point is admittedly conjecture. Despite that, it is true that growth of the role of finance in the U.S. GDP has been nothing short of phenomenal in the last 25 years, and there is indeed documentation to demonstrate the increased role of "Wall Street" in providing political funding. There is also an almost perfect correlation between the the list of the new "super-rich" and the movers and shakers of finance.
Perhaps Mr Krugman's concerns about the ability of Congress to do "the right thing" for the populace at large and of course to help combat the budget deficit is a reflection of the depths to which our politicians have fallen...
Monday 23 August 2010
Why Does The Fed Ignore Fraud?
Today there was an article discussing in a not yet published paper the ideas of two Fed economists, Wayne Passmore and Diana Hancock, and how they would like to create an FDIC-like entity to insure Asset-Backed Securities (ABS).
I think it admirable that they are trying to come up with ideas that will help revive the asset backed securitisation markets, but I believe they are focusing on the wrong problem.
Anyone who has ever been involved with the securitisation market, with the exception of black-box CDO's will tell you that if you have the patience you can go through every asset in the portfolio and make a rational decision as to the credit-worthiness of each underlying asset.
Unless there is fraud.
Most investors were either too lazy, or too greedy to do their own homework and so were "happy" to have the ratings agencies and the financial institutions offering the product provide the documentation ascertaining the credit quality of the security in question.
Of course if the purchasers are not willing-or claim to be unqualified to do the analysis themselves than it is also quite possible that they would not appreciate the true meaning of the disclaimers attached to every opinion, be they from a rating agency or a bank/broker dealer.
If a purchaser is truly not in the position to do the required analysis and they are acting as a fiduciary then they are failing in their mandate. If they are capable, but are too lazy to do the work required, then they are failing as a fiduciary, as well as deluding themselves.
The fact is that the majority of the Asset-Backed Securities which were either downgraded or outright failed were rife with fraud, beginning with the loan documentation, and in my opinion, amplified by the complicity of the rating agencies who applied statistical analysis in place of "traditional" credit analysis to determine the ratings they were granting.
So now we have a couple of Fed economists who have decided that the problem with the ABS market was the lack of an FDIC-like insurance fund to insure the credit quality of the ABS issues?
Try instead to have the regulators inspect the documentation on the underlying assets before they are put into a GSE. Change the wording of the rating agency mandate to include some language which holds them more to account, and prosecute fraud aggressively.
And reintroduce "moral hazard".
I think it admirable that they are trying to come up with ideas that will help revive the asset backed securitisation markets, but I believe they are focusing on the wrong problem.
Anyone who has ever been involved with the securitisation market, with the exception of black-box CDO's will tell you that if you have the patience you can go through every asset in the portfolio and make a rational decision as to the credit-worthiness of each underlying asset.
Unless there is fraud.
Most investors were either too lazy, or too greedy to do their own homework and so were "happy" to have the ratings agencies and the financial institutions offering the product provide the documentation ascertaining the credit quality of the security in question.
Of course if the purchasers are not willing-or claim to be unqualified to do the analysis themselves than it is also quite possible that they would not appreciate the true meaning of the disclaimers attached to every opinion, be they from a rating agency or a bank/broker dealer.
If a purchaser is truly not in the position to do the required analysis and they are acting as a fiduciary then they are failing in their mandate. If they are capable, but are too lazy to do the work required, then they are failing as a fiduciary, as well as deluding themselves.
The fact is that the majority of the Asset-Backed Securities which were either downgraded or outright failed were rife with fraud, beginning with the loan documentation, and in my opinion, amplified by the complicity of the rating agencies who applied statistical analysis in place of "traditional" credit analysis to determine the ratings they were granting.
So now we have a couple of Fed economists who have decided that the problem with the ABS market was the lack of an FDIC-like insurance fund to insure the credit quality of the ABS issues?
Try instead to have the regulators inspect the documentation on the underlying assets before they are put into a GSE. Change the wording of the rating agency mandate to include some language which holds them more to account, and prosecute fraud aggressively.
And reintroduce "moral hazard".
Friday 20 August 2010
Anti-Trust in Health Care and What is Non-Profit
I have just read a report* on health care costs in various regions of the U.S. outlining how the consolidation of hospitals and doctor's groups is allegedly resulting in monopoly pricing on the part of these groups in their negotiations with insurance companies.
Now I am not necessarily a believer that the insurance companies really are in need of federal protection-they tend to make a pretty dollar themselves. There is however something disturbing about the price differentials described in the article for the same procedures at hospitals/clinics in close proximity to one another and reimbursed by the same insurance company.
There are a few damning questions that arise for me in all of this.
First of all, the health care company highlighted in the article is a non-profit organisation which apparently is charging more, sometimes significantly more than other for-profit organisations. The charges being leveled at the non-profit group is that they are using their predominance in the region to command premium pricing from the insurance industry in a "take it or leave" negotiating style.
Now the concept of non-profit has always been a strange one for me. I understand that working in such an organisation doesn't mean that one has to work for minimum wage, but some how I thought that their was a community service aspect to the non-profit world and that in their corporate slogans they would put their clients first-and mean it.
Another aspect that disturbs me is the somewhat supine response of the insurance companies. In the U.K. for example, there is the National Health (NHS)choice, which is free; and then there is the private insurance route. The insurance companies offer various plans with correspondingly higher or lower premiums. They dictate what they believe a certain procedure should cost, and that is what they will pay.
The patient/client then has the choice to either go to a provider that will do the specified procedure at the insurance company's price, or they can decide to go to the hospital of their choice and pay the difference.
It would appear that many Americans are unaware of the price differentials for the same procedures, and perhaps more importantly, given that their insurance company pays the full price anyway, they have no incentive to find a cheaper provider, or to have to weigh the potential cost to themselves.
Of course the patient/client does end up picking up the higher cost to the extent that insurance premiums are rising.
Readers of these pages will know that I am a strong proponent of the need for regulation. It would appear to me that in President Obama's Health Care Plan there is a compelling need to look at pricing and competition and to either enforce existing regulation, or write new rules to ensure that health, which is essentially a public utility falls under the correct jurisdiction.
*(http://www.bloomberg.com/news/2010-08-20/hospital-monopolies-ruin-mri-bill-as-sutter-gets-price-it-wants.html)
Now I am not necessarily a believer that the insurance companies really are in need of federal protection-they tend to make a pretty dollar themselves. There is however something disturbing about the price differentials described in the article for the same procedures at hospitals/clinics in close proximity to one another and reimbursed by the same insurance company.
There are a few damning questions that arise for me in all of this.
First of all, the health care company highlighted in the article is a non-profit organisation which apparently is charging more, sometimes significantly more than other for-profit organisations. The charges being leveled at the non-profit group is that they are using their predominance in the region to command premium pricing from the insurance industry in a "take it or leave" negotiating style.
Now the concept of non-profit has always been a strange one for me. I understand that working in such an organisation doesn't mean that one has to work for minimum wage, but some how I thought that their was a community service aspect to the non-profit world and that in their corporate slogans they would put their clients first-and mean it.
Another aspect that disturbs me is the somewhat supine response of the insurance companies. In the U.K. for example, there is the National Health (NHS)choice, which is free; and then there is the private insurance route. The insurance companies offer various plans with correspondingly higher or lower premiums. They dictate what they believe a certain procedure should cost, and that is what they will pay.
The patient/client then has the choice to either go to a provider that will do the specified procedure at the insurance company's price, or they can decide to go to the hospital of their choice and pay the difference.
It would appear that many Americans are unaware of the price differentials for the same procedures, and perhaps more importantly, given that their insurance company pays the full price anyway, they have no incentive to find a cheaper provider, or to have to weigh the potential cost to themselves.
Of course the patient/client does end up picking up the higher cost to the extent that insurance premiums are rising.
Readers of these pages will know that I am a strong proponent of the need for regulation. It would appear to me that in President Obama's Health Care Plan there is a compelling need to look at pricing and competition and to either enforce existing regulation, or write new rules to ensure that health, which is essentially a public utility falls under the correct jurisdiction.
*(http://www.bloomberg.com/news/2010-08-20/hospital-monopolies-ruin-mri-bill-as-sutter-gets-price-it-wants.html)
Tuesday 17 August 2010
To Tell the Truth...
Yesterday I discussed my concerns of allowing populist commentators/politicians lead us into the abyss of a narrow-minded world view of the uneducated masses.
I made reference to H.L. Mencken and the paradoxical drive on the part of the masses to believe liars and despise those that tell the truth.
It has been brought to my attention that the "other demagogic leaders of the not-so-distant past" line was understood to mean GW. No, my connection was to the original mass-media demagogue Mr Hitler.
He was a major proponent of the the "Bigger Lie" school of political rhetoric. His experience was that the bigger, the more outrageous a lie, the more he was held in reverence.
This was my major concern in my post on the repeal of the Fairness Doctrine under President Reagan. I am convinced that FoxNews, and many (conservative- but not only conservative)commentators have studied Mr Hitler's electoral success and have gleaned aspects from it to suit their own purposes.
And in the event that anyone should think I am only criticising the U.S., let me remind you of the story of the former President of Germany Mr Horst Koehler.
He resigned recently after inadvertently speaking the truth about the use of the German military abroad. Specifically he said that the Bundeswehr was a tool of German foreign policy to protect and extend its economic interests. In Afghanistan for instance.
To be fair it is not entirely clear what the German public actually thought about Mr Koehler's comments. The media got a hold of them-they emanated from an interview on his official airplane returning from Afghanistan-and castigated him incessantly for having blundered so, resulting in his almost immediate resignation.
The message was that if you tell the truth you will get in trouble as a politician. I wish that we could return to a time-if that ever existed, where we expect our politicians to tell us the truth. We could listen to their electioneering and actually make decisions predicated on what they say, and what they intend to do.
Of course markets move and so there needs to be a reasonable amount of flexibility allowed our politicians to perhaps deviate from their stated paths. But in these instances a clear explanation is in order, and a realisation that we put faith in our initial vote, and then we have to allow our politicians the scope to try and fulfill their mandates.
I made reference to H.L. Mencken and the paradoxical drive on the part of the masses to believe liars and despise those that tell the truth.
It has been brought to my attention that the "other demagogic leaders of the not-so-distant past" line was understood to mean GW. No, my connection was to the original mass-media demagogue Mr Hitler.
He was a major proponent of the the "Bigger Lie" school of political rhetoric. His experience was that the bigger, the more outrageous a lie, the more he was held in reverence.
This was my major concern in my post on the repeal of the Fairness Doctrine under President Reagan. I am convinced that FoxNews, and many (conservative- but not only conservative)commentators have studied Mr Hitler's electoral success and have gleaned aspects from it to suit their own purposes.
And in the event that anyone should think I am only criticising the U.S., let me remind you of the story of the former President of Germany Mr Horst Koehler.
He resigned recently after inadvertently speaking the truth about the use of the German military abroad. Specifically he said that the Bundeswehr was a tool of German foreign policy to protect and extend its economic interests. In Afghanistan for instance.
To be fair it is not entirely clear what the German public actually thought about Mr Koehler's comments. The media got a hold of them-they emanated from an interview on his official airplane returning from Afghanistan-and castigated him incessantly for having blundered so, resulting in his almost immediate resignation.
The message was that if you tell the truth you will get in trouble as a politician. I wish that we could return to a time-if that ever existed, where we expect our politicians to tell us the truth. We could listen to their electioneering and actually make decisions predicated on what they say, and what they intend to do.
Of course markets move and so there needs to be a reasonable amount of flexibility allowed our politicians to perhaps deviate from their stated paths. But in these instances a clear explanation is in order, and a realisation that we put faith in our initial vote, and then we have to allow our politicians the scope to try and fulfill their mandates.
He's Right on Principle, But.....
I have already written twice about the discussion to build what is actually an "Islamic Center" as opposed to a mosque in downtown New York but the story just won't die.
My title is taken from a quote by an anonymous Republican consultant commenting on President Obama's decision to enter the fray. He goes on to say "but he'll get slaughtered on the politics". The same consultant continues with "A curious mix of ego and self-aggrandizement, albeit for the right cause."
I think we have the quintessence of the problem right there in this consultant's statement who interestingly but not surprisingly was adamant about maintaining his anonymity.
I had mentioned how the "mosque" discussion was crossing party lines and now I see more and more Democrats lining up behind the populist rhetoric of "yeah I get the First Amendment thing, but not on Ground Zero".
Our politicians are supposed to be leaders. They have to pay a certain amount of lip-service to the public mood in getting elected, but they are also required to stand up for what is correct and to make difficult decisions which are in the interest of the public at large.
Commentators are lining up to criticise Obama for (again) demonstrating that he represents an Eastern "elite", not the "average American". I could draw from a myriad of quotes from H.L. Mencken to highlight how dangerous this line of reasoning can be, but will suffice with one, which clearly links the political extremism these voices are advocating with that of other demagogic leaders of the not-so-distant past.
"The men the American public admires the most are the most daring liars; The men they detest most violently are those that try and tell them the truth."
Rather than praise Mr Obama for standing up and adding a voice where his advisers are certainly suggesting to him to keep quiet, they choose to highlight that he should be kowtowing to the mass of the American people, who I would maintain tend to be narrow-minded individuals who cite watered-down understandings of the Constitution to support whatever cause they deem to be important at the time.
We are fighting FoxNews at every corner. The thinly veiled racism and religious bigotry to be found in the comments isolating Obama from the "rest of Americans"-remember an outrageous percentage of Americans still maintain he is a Muslim-forget why so many Americans emigrated to the U.S. in the first place.
This "average" American voted for Mr Bush who has single-handledly done more to destroy America's standing in the world politically and economically then any other single individual in my lifetime.
Mr Bush failed to understand that oil as the energy source of the 20th Century-a domestic U.S. energy source-would become an external energy source in the 21st Century. He, and by extension the American people also failed to see how oil was also what kept our currency as the reserve currency. And he failed to comprehend that the tacit agreement for American support for pricing oil in US$ looked good in the 70's, but a lot less safe in the noughties as the levers of powere shifted.
Finally, he helped complete the degradation of manufacturing in the U.S. turning us into a nation in which almost 30% of our GDP is generated on Wall Street, leveraging America's public and private debt to totally unsustainable levels.
And yet all the commentators are screaming that it is this American public that needs to be heard, even followed, despite the fact that they are provincial to the extreme and are completley oblivious to the nadir that they have helped create in their willingness to close their eyes to anything that does not fit into their isolationist framework.
We are in need of leadership. From the Presidency, our lawmakers, our commentators, and yes, from an educated public. Then we will have a chance to reverse the decline of our fortunes and look forward to the future.
My title is taken from a quote by an anonymous Republican consultant commenting on President Obama's decision to enter the fray. He goes on to say "but he'll get slaughtered on the politics". The same consultant continues with "A curious mix of ego and self-aggrandizement, albeit for the right cause."
I think we have the quintessence of the problem right there in this consultant's statement who interestingly but not surprisingly was adamant about maintaining his anonymity.
I had mentioned how the "mosque" discussion was crossing party lines and now I see more and more Democrats lining up behind the populist rhetoric of "yeah I get the First Amendment thing, but not on Ground Zero".
Our politicians are supposed to be leaders. They have to pay a certain amount of lip-service to the public mood in getting elected, but they are also required to stand up for what is correct and to make difficult decisions which are in the interest of the public at large.
Commentators are lining up to criticise Obama for (again) demonstrating that he represents an Eastern "elite", not the "average American". I could draw from a myriad of quotes from H.L. Mencken to highlight how dangerous this line of reasoning can be, but will suffice with one, which clearly links the political extremism these voices are advocating with that of other demagogic leaders of the not-so-distant past.
"The men the American public admires the most are the most daring liars; The men they detest most violently are those that try and tell them the truth."
Rather than praise Mr Obama for standing up and adding a voice where his advisers are certainly suggesting to him to keep quiet, they choose to highlight that he should be kowtowing to the mass of the American people, who I would maintain tend to be narrow-minded individuals who cite watered-down understandings of the Constitution to support whatever cause they deem to be important at the time.
We are fighting FoxNews at every corner. The thinly veiled racism and religious bigotry to be found in the comments isolating Obama from the "rest of Americans"-remember an outrageous percentage of Americans still maintain he is a Muslim-forget why so many Americans emigrated to the U.S. in the first place.
This "average" American voted for Mr Bush who has single-handledly done more to destroy America's standing in the world politically and economically then any other single individual in my lifetime.
Mr Bush failed to understand that oil as the energy source of the 20th Century-a domestic U.S. energy source-would become an external energy source in the 21st Century. He, and by extension the American people also failed to see how oil was also what kept our currency as the reserve currency. And he failed to comprehend that the tacit agreement for American support for pricing oil in US$ looked good in the 70's, but a lot less safe in the noughties as the levers of powere shifted.
Finally, he helped complete the degradation of manufacturing in the U.S. turning us into a nation in which almost 30% of our GDP is generated on Wall Street, leveraging America's public and private debt to totally unsustainable levels.
And yet all the commentators are screaming that it is this American public that needs to be heard, even followed, despite the fact that they are provincial to the extreme and are completley oblivious to the nadir that they have helped create in their willingness to close their eyes to anything that does not fit into their isolationist framework.
We are in need of leadership. From the Presidency, our lawmakers, our commentators, and yes, from an educated public. Then we will have a chance to reverse the decline of our fortunes and look forward to the future.
Wednesday 11 August 2010
The Interestings Thoughts of David Stockman
"Balanced budgets, sound money and financial discipline." These are the tenants which Mr Stockman, former Director of Reagan's Office of Budget Management claims have been lost by traditional Republicans in a column in the New York Times.
He goes on to lambast the Republican Party in its current form for having failed to stay true to its roots. Starting with Nixon's decision, on the advice of none other than Milton Friedman to drop the Gold Standard, thus opening the doors to printing money on the part of the Fed, as well as every other Central Bank.
He takes a nice swipe at Mr Friedman's contention that the free-market will be able to set exchange rates and thus balance trade deficits. No Mr Friedman, not if everyone just prints whatever money they need, or not until a currency has inflated its way to oblivion.
He then moves on to hammer domestic spending, and military spending. As it turns out GW actually increased social spending from $260 Billion to $420 Billion-a 65% increase! Add the costs of two unfunded wars-also stemming from Mr Bush, and you begin to have a real problem on your hands.
Now kill everything that Mr Stockman says real Republicans stand for- only cutting taxes if they are matched with spending cuts. He is totally flummoxed by the fact that in the face of all the problems we have today's Republicans can't find it within their ideological framework to accept a 3% increase to the nation's wealthiest elite.
The basis of this ideological framework-a misguided belief "that the economy will outgrow the deficit if plied with enough tax cuts".
My favourite however is how he blames Republicans for fostering the "vast, unproductive expansion of our financial sector". I don't intend to be partisan here. In the UK Brown's Labour government was held equally responsible.
The truth is, deregulation is the culprit here, regardless from which direction it comes.
As an ex-pat American I occasionally take the liberty to use sports metaphors. In this case I would suggest to anyone who doesn't like Regulations why are there rules and and referees to police them in any organised sport?
Imagine hockey or American Football without rules and money is the only motivation.
Mr Stockman finishes in expressing his belief that unless we, and our politicians stand up and get back to basics-his basics admittedly, but still basics, then we are riding into an apocalypse which spells the end of the American Dream.
He goes on to lambast the Republican Party in its current form for having failed to stay true to its roots. Starting with Nixon's decision, on the advice of none other than Milton Friedman to drop the Gold Standard, thus opening the doors to printing money on the part of the Fed, as well as every other Central Bank.
He takes a nice swipe at Mr Friedman's contention that the free-market will be able to set exchange rates and thus balance trade deficits. No Mr Friedman, not if everyone just prints whatever money they need, or not until a currency has inflated its way to oblivion.
He then moves on to hammer domestic spending, and military spending. As it turns out GW actually increased social spending from $260 Billion to $420 Billion-a 65% increase! Add the costs of two unfunded wars-also stemming from Mr Bush, and you begin to have a real problem on your hands.
Now kill everything that Mr Stockman says real Republicans stand for- only cutting taxes if they are matched with spending cuts. He is totally flummoxed by the fact that in the face of all the problems we have today's Republicans can't find it within their ideological framework to accept a 3% increase to the nation's wealthiest elite.
The basis of this ideological framework-a misguided belief "that the economy will outgrow the deficit if plied with enough tax cuts".
My favourite however is how he blames Republicans for fostering the "vast, unproductive expansion of our financial sector". I don't intend to be partisan here. In the UK Brown's Labour government was held equally responsible.
The truth is, deregulation is the culprit here, regardless from which direction it comes.
As an ex-pat American I occasionally take the liberty to use sports metaphors. In this case I would suggest to anyone who doesn't like Regulations why are there rules and and referees to police them in any organised sport?
Imagine hockey or American Football without rules and money is the only motivation.
Mr Stockman finishes in expressing his belief that unless we, and our politicians stand up and get back to basics-his basics admittedly, but still basics, then we are riding into an apocalypse which spells the end of the American Dream.
Monday 9 August 2010
A Second Look at the Mosque
After many discussions about my posting last Friday I have had time to reflect and re access some of my thoughts.
The first rational response to my dislike of building a mosque that close to Ground Zero was given to me in the simplest of terms. There is no mosque downtown. There is a Muslim workforce, primarily in the back offices of the big downtown institutions who have to pray 6 time a day. The location of this new mosque would provide a religious center for these workers which they currently do not have.
I have to agree with the logic although I am not sure that this is the only location downtown available.
I stand by my statement that Freedom of Religion is one of our most treasured Constitutional Rights and so I repeat my support of the mosque. There are a number of churches downtown so why not a mosque?
I mention the location only because in Northern Ireland where the battle lines between Catholics and Protestants have be drawn in blood one of the biggest problems every year is whether or not to allow the Orangemen to parade through Catholic neighbourhoods to celebrate the Protestant victory over the Catholics at the Battle of the Boyne-in 1690.
The Catholics look upon it as provocation. The Protestants as their Right. The result is often bloody with both sides more than willing to riot with the police left holding both ends of the string.
So although I support the mosque, I would like to know if there were any other downtown locations which would be less provocative, but I have to assume there were not.
Another comment I made was that the discussion seemed to be quickly breaking down into Republicans on one side and Democrats on the other. I have to retract that statement. Perhaps in the media this is the case. But in the discussions I have had,at dinner, at the beach or on the golf course, I have been completely surprised at the views I have heard.
If for no other reason then this is breaking down party lines then maybe it is really a good thing.
I have heard right-wing Republicans bordering on the Tea Party standing up for the mosque. Freedom of Religion is a much more powerful theme than I would have imagined.
I have also heard liberal Democrats who in their criticism of the mosque find themselves falling into the "they tried to kill us" camp.
In fact I backed out of the discussion and watched as a staunch liberal and a rock hard conservative took what one would have thought were each other's sides.
I think that might be what makes America.
The first rational response to my dislike of building a mosque that close to Ground Zero was given to me in the simplest of terms. There is no mosque downtown. There is a Muslim workforce, primarily in the back offices of the big downtown institutions who have to pray 6 time a day. The location of this new mosque would provide a religious center for these workers which they currently do not have.
I have to agree with the logic although I am not sure that this is the only location downtown available.
I stand by my statement that Freedom of Religion is one of our most treasured Constitutional Rights and so I repeat my support of the mosque. There are a number of churches downtown so why not a mosque?
I mention the location only because in Northern Ireland where the battle lines between Catholics and Protestants have be drawn in blood one of the biggest problems every year is whether or not to allow the Orangemen to parade through Catholic neighbourhoods to celebrate the Protestant victory over the Catholics at the Battle of the Boyne-in 1690.
The Catholics look upon it as provocation. The Protestants as their Right. The result is often bloody with both sides more than willing to riot with the police left holding both ends of the string.
So although I support the mosque, I would like to know if there were any other downtown locations which would be less provocative, but I have to assume there were not.
Another comment I made was that the discussion seemed to be quickly breaking down into Republicans on one side and Democrats on the other. I have to retract that statement. Perhaps in the media this is the case. But in the discussions I have had,at dinner, at the beach or on the golf course, I have been completely surprised at the views I have heard.
If for no other reason then this is breaking down party lines then maybe it is really a good thing.
I have heard right-wing Republicans bordering on the Tea Party standing up for the mosque. Freedom of Religion is a much more powerful theme than I would have imagined.
I have also heard liberal Democrats who in their criticism of the mosque find themselves falling into the "they tried to kill us" camp.
In fact I backed out of the discussion and watched as a staunch liberal and a rock hard conservative took what one would have thought were each other's sides.
I think that might be what makes America.
Thursday 5 August 2010
Freedom of Religion
I usually avoid religion as a topic due to its emotive as opposed to its rational nature. I already break the other taboos usually associated with it by talking about politics and finance and that gives me more than enough opportunities to shoot myself in the foot.
So despite my reservations I have a few comments on the plans to build a mosque near "Ground Zero".
My first reaction to the response of the New York City Landmarks Preservation Commission to turn down an application to "save" a questionable building as a means of blocking a group intending to build a mosque near "Ground Zero" was emotional and frankly very negative.
My negative response was initially aimed at the Commission because I incorrectly thought that they were making a decision on the mosque. That misperception on my part might be because the article I was reading wanted me to blame the commission. It is after all a traditional albeit liberal organisation. The press was quick to blame them for the mosque.
Now the Commission was asked to give a ruling on the architectural merit of the old Burlington Coat Factory building. They didn't okay the mosque. They d-kayed the request to save an old 19th century structure because it did not meet their criteria.
The fact is that a group intending to block the construction of a mosque chose the Landmark Commission as their path to obstruction can't be blamed on the Commission. Granted, this mosque is to be built on a very sensitive location, chosen in my opinion to push as many buttons as possible on the right and on the left. But the permission to build the mosque is not the responsibility of the Commission.
What really annoys me is that this discussion has immediately turned into a Republican (anti) and Democrat (pro) confrontation. Either our right to freedom of religion exists or it doesn't. If it does, than even though I deplore the idea of a mosque being built at this location, there is no legal and certainly no constitutional justification that I know of as to why it should be prohibited.
Or is there? I don't know but somewhere we as citizens all have a form of social contract with our way of government which sometimes explicitly, but always implicitly requires us to uphold our constitution which I understand to mean that although we may seek to make amendments to the Constitution, we are not allowed to plan let alone undertake to overthrow it by violent means.
Now I understand that this is very treacherous ground that I am treading and I realise that for those on the left I am suddenly a religious bigot and for those on the right, well who knows.
What I do know is that I believe that the real responsibility of American citizens is to know that we have a separation of church and state and that the rule of law is civil, not religious. Many people may find it difficult to understand this and allow themselves to get caught up with the fact that we swear on a bible and the name of god is invoked in many instances-the pledge, oaths etc.
It doesn't really matter. It is almost a figure of speech. What we are swearing is to uphold the constitution or to tell the truth. Our Freedoms are designed to live and let live.
I would contend that proselytising, be it of a religion, or a political belief with no room to allow two religions/beliefs to exist concurrently is the real problem.
The sooner we get that message across the better-regardless of the religion, and regardless of the political belief.
So despite my reservations I have a few comments on the plans to build a mosque near "Ground Zero".
My first reaction to the response of the New York City Landmarks Preservation Commission to turn down an application to "save" a questionable building as a means of blocking a group intending to build a mosque near "Ground Zero" was emotional and frankly very negative.
My negative response was initially aimed at the Commission because I incorrectly thought that they were making a decision on the mosque. That misperception on my part might be because the article I was reading wanted me to blame the commission. It is after all a traditional albeit liberal organisation. The press was quick to blame them for the mosque.
Now the Commission was asked to give a ruling on the architectural merit of the old Burlington Coat Factory building. They didn't okay the mosque. They d-kayed the request to save an old 19th century structure because it did not meet their criteria.
The fact is that a group intending to block the construction of a mosque chose the Landmark Commission as their path to obstruction can't be blamed on the Commission. Granted, this mosque is to be built on a very sensitive location, chosen in my opinion to push as many buttons as possible on the right and on the left. But the permission to build the mosque is not the responsibility of the Commission.
What really annoys me is that this discussion has immediately turned into a Republican (anti) and Democrat (pro) confrontation. Either our right to freedom of religion exists or it doesn't. If it does, than even though I deplore the idea of a mosque being built at this location, there is no legal and certainly no constitutional justification that I know of as to why it should be prohibited.
Or is there? I don't know but somewhere we as citizens all have a form of social contract with our way of government which sometimes explicitly, but always implicitly requires us to uphold our constitution which I understand to mean that although we may seek to make amendments to the Constitution, we are not allowed to plan let alone undertake to overthrow it by violent means.
Now I understand that this is very treacherous ground that I am treading and I realise that for those on the left I am suddenly a religious bigot and for those on the right, well who knows.
What I do know is that I believe that the real responsibility of American citizens is to know that we have a separation of church and state and that the rule of law is civil, not religious. Many people may find it difficult to understand this and allow themselves to get caught up with the fact that we swear on a bible and the name of god is invoked in many instances-the pledge, oaths etc.
It doesn't really matter. It is almost a figure of speech. What we are swearing is to uphold the constitution or to tell the truth. Our Freedoms are designed to live and let live.
I would contend that proselytising, be it of a religion, or a political belief with no room to allow two religions/beliefs to exist concurrently is the real problem.
The sooner we get that message across the better-regardless of the religion, and regardless of the political belief.
Wednesday 4 August 2010
Energy Technology-The New Frontier?
I recently went to hear Tom Friedman give what turned out to be his standard speech extolling the virtues of Yankee ingenuity and the massive potential available to the U.S. if we as a nation are just willing to engage in the energy revolution.
It was extremely interesting to see how the audience-if my and friend's "young adult" children are a fair sampling-was split much less on political grounds but rather on a generational divide.
A Nantucket audience tends to be Republican except for when a speaker-this is part of the Geschke Lecture Series-happens to be a Democrat. Still, Mr Friedman has enough of a draw to get some crossovers and his pitch was less political than economical, and was trying to (re)-awaken the beast of American economic global leadership.
His theme was based on his new book which can be quickly summarised that the world is: hot-global warming is happening and it is influenced by man; flat by which he means global; and it is crowded-especially in the third world.
The "youth" with whom I discussed the lecture were universally annoyed with him. Their main complaint was that they have been told of the damage we have done and are still doing to the planet since they were born-if not by their parents then by their teachers, and frankly they were tired of hearing how bad it was going to be. They were more interested to hear if anyone had any solutions other than that they are essentially screwed.
The adults were much more positive given that he spoke about the challenges that we as a nation face and rather simplistically stated that all we have to do is embrace the fact that there is an energy revolution taking place, we need to lead it, and everything will be all right.
Personally I have some reservations. All of his examples were of how American technology gets manufactured in China. First of all I am unhappy to see those jobs be outsourced to China and secondly, I believe the idea that only the Americans can innovate is rapidly becoming outdated and is even dangerous.
I appreciate that he was trying to engage his audience and that he thinks the revolution coming is in the world of energy, not politics, and therefore is a question of economic revival leading to "saving the planet". He also seemed to think that the change would entail some very short term pain and then everything would be good.
I don't think it is that simple.
It was extremely interesting to see how the audience-if my and friend's "young adult" children are a fair sampling-was split much less on political grounds but rather on a generational divide.
A Nantucket audience tends to be Republican except for when a speaker-this is part of the Geschke Lecture Series-happens to be a Democrat. Still, Mr Friedman has enough of a draw to get some crossovers and his pitch was less political than economical, and was trying to (re)-awaken the beast of American economic global leadership.
His theme was based on his new book which can be quickly summarised that the world is: hot-global warming is happening and it is influenced by man; flat by which he means global; and it is crowded-especially in the third world.
The "youth" with whom I discussed the lecture were universally annoyed with him. Their main complaint was that they have been told of the damage we have done and are still doing to the planet since they were born-if not by their parents then by their teachers, and frankly they were tired of hearing how bad it was going to be. They were more interested to hear if anyone had any solutions other than that they are essentially screwed.
The adults were much more positive given that he spoke about the challenges that we as a nation face and rather simplistically stated that all we have to do is embrace the fact that there is an energy revolution taking place, we need to lead it, and everything will be all right.
Personally I have some reservations. All of his examples were of how American technology gets manufactured in China. First of all I am unhappy to see those jobs be outsourced to China and secondly, I believe the idea that only the Americans can innovate is rapidly becoming outdated and is even dangerous.
I appreciate that he was trying to engage his audience and that he thinks the revolution coming is in the world of energy, not politics, and therefore is a question of economic revival leading to "saving the planet". He also seemed to think that the change would entail some very short term pain and then everything would be good.
I don't think it is that simple.
Tuesday 3 August 2010
But What's the Solution?
The other night we were guests of a self-made multi-millionaire octogenarian on his new 120 foot power yacht where we sat in the lap of Republican power. I was on my best behaviour so side-stepped many conversations until dinner when it became much more difficult.
One of the guests runs a major medical clinic and was very factual and somewhat severe as the discussion turned to "Obamacare". He and I had discussed this in private many times previously and although he recited the same statistics that a distinguished friend of mine has concerning the extreme concentration of health spending in the final stages of our lives-85% of our total outlay comes in the last 6months-they had very different solutions.
The former focuses on the fact that Americans are lethargic and either overweight or outright obese, and that they are crushing our medical infrastructure with their ill-health. His focus was on getting the public to recognise that they are literally eating themselves to death and the sooner they address this fact and stop "protecting" the individuals "right to be fat" the sooner we can reverse the crippling growth in the cost of health care.
The latter, a leading voice in the Hospice end of our medical infrastructure is much more focused on having the public come to terms with the fact that death is a natural event and that we will all die despite all the medical intervention money can buy. He would maintain that the interpretation of the Hippocratic oath will have to be and is being addressed under Obamacare and that this will allow/force doctors to stop making invasive procedures that only serve to prolong the inevitable and to discuss the alternatives.
Both of these individuals are passionate in their work and in their desire to see health care transformed into a sustainable format capable of delivering care to all.
Yet their focus is completely different.
I believe both are on the right track. The U.S. has to address the nation's obsession with food, and has to come to embrace a different approach to end-of-life care.
I fear like much in this country that despite the common cause and even common ground, they will find it very difficult to find a compromise.
One of the guests runs a major medical clinic and was very factual and somewhat severe as the discussion turned to "Obamacare". He and I had discussed this in private many times previously and although he recited the same statistics that a distinguished friend of mine has concerning the extreme concentration of health spending in the final stages of our lives-85% of our total outlay comes in the last 6months-they had very different solutions.
The former focuses on the fact that Americans are lethargic and either overweight or outright obese, and that they are crushing our medical infrastructure with their ill-health. His focus was on getting the public to recognise that they are literally eating themselves to death and the sooner they address this fact and stop "protecting" the individuals "right to be fat" the sooner we can reverse the crippling growth in the cost of health care.
The latter, a leading voice in the Hospice end of our medical infrastructure is much more focused on having the public come to terms with the fact that death is a natural event and that we will all die despite all the medical intervention money can buy. He would maintain that the interpretation of the Hippocratic oath will have to be and is being addressed under Obamacare and that this will allow/force doctors to stop making invasive procedures that only serve to prolong the inevitable and to discuss the alternatives.
Both of these individuals are passionate in their work and in their desire to see health care transformed into a sustainable format capable of delivering care to all.
Yet their focus is completely different.
I believe both are on the right track. The U.S. has to address the nation's obsession with food, and has to come to embrace a different approach to end-of-life care.
I fear like much in this country that despite the common cause and even common ground, they will find it very difficult to find a compromise.
Sunday 1 August 2010
The Fear of Wealth Transfer
I have recently arrived for my summer vacation on the island of Nantucket.
One of the most striking first impressions in the couple of days I've been here is the extent to which society has been polarised. The warring camps carry on two ideological monologues essentially not listening to one another and blaming the other side for the deadlock.
I am equally taken aback at the vehemence with which Obama is attacked. The Right ranting that he is anti everything they stand for, and the Left whinging that he is not being aggressive enough and not achieving the miracles they expected of him.
Yesterday I heard him being chastised for being a "real Socialist" although I am not quite sure what the tag socialist entails but I think it has to do with the concept of wealth transference.
Wealth transfer seems to be the chant of the day, or more clearly stated, chants against wealth transfer appear to be the current theme. In a discussion today with an acquaintance he explained to me that there was a wealth transfer taking place all over the U.S. and then gave as his prime example the situation at private American Universities.
His rationale was that (apparently) 50% of the students at private universities receive some sort of financial aid and the funding for such aid comes out of the "excess" tuition being paid by students who pay the full rate.
He did go on to say that a wealth universities such as Princeton the tuition charged is actually about a third of what the university actually spends per student so I was left a little confused just where he was going with the example. I think the message was that there was already enough wealth transfer taking place and we didn't need the government to manage/increase the transfer.
I guess this is sort of a case of perspective. The basis of profit is essentially a question of a transfer of wealth from the buyer to the seller. I know my friend is all for profit- for the record so am I. I think however that he would have difficulty in describing profit as a form of wealth transfer-he is much more in the wealth accumulation camp.
I know he would defend his view that he wasn't really against wealth transfer as long as he got to make the choice of how much and to whom. Yesterday I received a phone call looking for money to support the Nantucket Firefighters. Today I got a call from the Massachusetts Fraternal Order of Police, also looking for money.
I guess those tax cuts have an effect on our basic public services.
One of the most striking first impressions in the couple of days I've been here is the extent to which society has been polarised. The warring camps carry on two ideological monologues essentially not listening to one another and blaming the other side for the deadlock.
I am equally taken aback at the vehemence with which Obama is attacked. The Right ranting that he is anti everything they stand for, and the Left whinging that he is not being aggressive enough and not achieving the miracles they expected of him.
Yesterday I heard him being chastised for being a "real Socialist" although I am not quite sure what the tag socialist entails but I think it has to do with the concept of wealth transference.
Wealth transfer seems to be the chant of the day, or more clearly stated, chants against wealth transfer appear to be the current theme. In a discussion today with an acquaintance he explained to me that there was a wealth transfer taking place all over the U.S. and then gave as his prime example the situation at private American Universities.
His rationale was that (apparently) 50% of the students at private universities receive some sort of financial aid and the funding for such aid comes out of the "excess" tuition being paid by students who pay the full rate.
He did go on to say that a wealth universities such as Princeton the tuition charged is actually about a third of what the university actually spends per student so I was left a little confused just where he was going with the example. I think the message was that there was already enough wealth transfer taking place and we didn't need the government to manage/increase the transfer.
I guess this is sort of a case of perspective. The basis of profit is essentially a question of a transfer of wealth from the buyer to the seller. I know my friend is all for profit- for the record so am I. I think however that he would have difficulty in describing profit as a form of wealth transfer-he is much more in the wealth accumulation camp.
I know he would defend his view that he wasn't really against wealth transfer as long as he got to make the choice of how much and to whom. Yesterday I received a phone call looking for money to support the Nantucket Firefighters. Today I got a call from the Massachusetts Fraternal Order of Police, also looking for money.
I guess those tax cuts have an effect on our basic public services.
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