You are currently browsing the monthly archive for December 2008.
What would New Year’s Eve be without a few predictions?
1. China begins to implode. I think this will be the year that things begin to unwind. The herculean task of uniting and keeping peaceful the masses in China hinges on keeping those masses busy. That means employed. With the downturn in the consumer driven world economy, fewer products will be made and there will be fewer jobs. Restless, unemployed and without female companionship, millions of young men will cause trouble. These young men are from some 50+ nationalities and they speak a multitude of languages from at least eight different language families. In the past, they were peaceful mainly because they had work, food, and basic necessities. Look for all that to start to change in 2009.
2. Major newspapers, and their influence on politics, the arts, and business, will begin to wither away. This will be the year (already begun last month with the bankruptcy filing for the Chicago Tribune group) that major newspapers either change radically or die. I see some changing to a new model – printed Sunday paper and daily email/internet subscription news. Others will just lower costs of content by severely cutting editorial staffs. Ad revenues will be down drastically. The biggest sources of revenue for most papers is local auto, real estate, and shopping ads. Local auto retail companies are in deep trouble and likely to slow expenditures on newspaper ads. Ditto local real estate agencies.
3. Mr. Obama and the Democrats in Congress will fight early and often. The new President will understand something that partisans in Congress never do. He has responsibility for the whole nation, not just his party. Many of the over-the-top pieces of legislation sent to him by the likes of Ms. Pelosi and Mr. Reid will be for the good of entrenching the paty and not for the good of the country. It is my hope and my belief that Mr. Obama will veto many and Congressional Democrats will not be unified enough to overturn the veto.
4. Mrs. Clinton will be a model citizen and will publicly support Mr. Obama in all the safe moves he makes. She will quietly distance herself from his bold decisions. Her main efforts for the next four years will be to position herself for a last run at the Presidency in 2012. She will play both sides always leaving herself room to say she only did “x” because she was being a good trooper. She will also be able to take credit for anything that goes right in foreign policy. I think that foreign affairs will define the 2012 election and she will be in the catbird seat.
5. The Republicans will not yet start to get their act together to work as a team. They will be pushed around by the Democrats in Congress and will lose ground further in midterm elections in 2010. In 2009, they will try to prepare Sarah Palin for bigger and better things but it will only exacerbate the rift between the religious right and the rest of the party. No dynamic new leader will emerge in the Grand Old Party in 2009.
6. The bottom of the housing market will be found in most areas of the country. By mid summer, bargain hunters will start picking up great opportunities before they lose the best chance in their lifetimes. The increased activity from these speculators will prop the market just enough to let normal people feel safe moving back into the housing market. Commercial and Industrial property values will take longer to recover, certainly not before the end of 2009 in most areas.
7. The price of gas will slowly rise back to over $2.50 per gallon by the end of the year. This will not be high enough to justify many of the alternative fuel projects and many will lose steam. It will also do great damage to the likes of Mr. Chavez in Venezuela and Mr. Ahmadinejad in Iran. Both countries have huge programs based on oil revenues that will suffer – read the people will suffer. Both will have their hands full keeping power. Don’t expect either to go quietly. Mexico will suffer from low gas prices more than any nation. With dwindling production, huge costs fighting (and currently losing) the battle with the drug lords, a low gas price could be the death knell to Mexico as we have known it for the past two decades.
8. Mr. Obama will make little progress on his Universal Healthcare initiative. I admit this prediction is based more on hope than data. I keep hoping that all those smart people in the field of medicine will take action. They will rise up and shake off the control of the insurance industry. They will take medicine back from the lawyers. Unfortunately that would require voters to allow liability limits. It will require Docs to police their own and drive out the quacks who prescribe rather than treat, who eschew prevention in favor of much more profitable curative medicine. These are tall orders. I am afraid we don’t have the stomach for such changes and will opt for the easy (and wrong) fix of socialized medicine. Like I said my prediction is based on hope.
9. Government spending and taxes will rise rapidly starting in 2009. Without a counterbalance in Congress and with a Community Organizer as President, I see the standard solution to all our problems will be to create new government programs and the taxes to pay for them. This in turn will start a cycle of inflation unlike any we have seen since Jimmy Carter’s days. It will start slowly but will be a huge issue by the time Mr. Obama wants us to reelect him.
I know that bad news sells. I know that newspapers would go broke if they only reported good news. (They may all go broke anyway with the advent of the new media)
Why is it that we see banner headlines like “Unemployment up to 6.7%” or ”Foreclosures up 57% in the past Year”? It seems to me that most people would think 93.3% employment is a sign of a successful economy. ”Foreclosures up 57%” sounds very ominous. But where did this happen? Kansas? Ohio? Nevada? The answers indicate just how important it must be to use the extremes to sell papers or TV ads. The location was Nevada which has the highest percentage of foreclosures in the nation, currently. The period in question was January 2007 to January 2008, probably the period of highest acceleration of the default rate in history, and, probably the most dramatic change in Nevada ever.
How hard would it be to have a headline saying “98+% of all U.S. mortgages are not in Default”?
It may be naive of me to think that a 93% employment rate is impressive. I continue to think that our economic condition will improve in the next year. I think it will do so because I don’t think everyone believes the gloom and doom. I think there are plenty of optimists out there who see the current economic dislocation more as an opportunity than a foretelling of the coming doomsday. Attitude and belief have much to do with success, and, with failure. I would think the papers and TV networks could continue to sell the coming disaster and at least editorialize with a slant toward the positive. I guess I really am naive.
I saw a great bumper sticker the other day that said, “Save the Earth. It’s the only planet with Chocolate.” Another good reason to be careful with our home.
Don’t get me wrong. I believe that we, the humans here on earth, can do great damage to our planet. I think it is wise of us to do what we can to mitigate those actions that cause harm to our planet.
I do wonder greatly, however, about the motives of the ‘leaders’ of the current, hottest (no pun intended) movement within the Environmental Movement at large, Global Warming. Have you noticed that of late they are referring to it as Global Climate Change? It is much easier that way to justify your position when the ‘facts’ change and a large body of evidence builds that debunks your theory of “Warming.”
Call me cynical but I am still finding it hard to believe that Al Gore is: 1. Not a hypocrite; 2. Not the leader of a movement that has spawned more ‘junk science’ than Willy Wonka; and 3. Not, at least, partly responsible for turning over the world lead in manufacturing to the Chinese by allowing them to compete unfettered by ‘environmental regulation’ while Western nations are hobbled by laws that often make little sense. Does it make sense to force most manufacturing activity away from the country over which we have some control to a country over which we have no control?
At least most of the good chocolate is still manufactured in the nations of the West.
If history is our guide, in one month, when Barack Obama is sworn in as the 44th President of the United States, a honeymoon period will begin.
Political opponents are loath to criticize a new President before they know well the later consequences of that criticism. Within a given period of time they will learn if it is safe to lob grenades in the President’s direction and if so how often and how heavy. Until critics are comfortable they will sit on the fence and watch as others are the first to stick their necks out. The press will report mostly the positive view of things until they have reason to turn against the new leader (the fact that good news doesn’t sell is usually reason enough).
That would have been the story in the past. A couple of months minimum and more likely 6 months would have passed before the boo-birds came out. Today, I think we have a very different situation. The honeymoon will be brief at best and likely will be almost nonexistent. Why do I feel this way?
First, is the matter of time. The recent Presidential Election Campaign lasted a full two years. For over 6 months, the smart money has been on an Obama Presidency. That is plenty of time to see who is in what camp, who is vulnerable, who must compromise and who has the strength to do what he or she wants to do.
Second, is the matter of information. With the maturation of the web and blogging, and the near 100% penetration of homes by television, enough information has been available to allow most people to have decided where they stand. I would argue that there are very few (influencial) people standing on the sidelines saying they will watch and not comment on the new President’s actions until they know more about him.
Third, is the lack of a transition. The financial crisis has made it imperative that the President-Elect weigh in on the issue and propose solutions. In the past, most Presidents-elect have had the luxury of spending the time between the election and inauguration building their teams.
President-Elect Obama has, in effect, been using up his honeymoon during the “transition.”
My prediction is that the Congress will almost immediately become a group that is less supportive and, in fact, a group that will go a long way to take power away from the new President. The prospect of a unified Congress and President accomplishing great things is, in my view, a very unlikely scenario. Democrats should lower there expectation of change in Washington. Republicans can breath easier in the knowledge that Mr. Obama will not get Congress to go along with all he promised to his constituents.
Just to become the candidate for the Democrats, Mr. Obama had to show amazing skill at manipulating his primary foes against one another. He will have to do an even more effective job of manipulating the myriad factions in Congress to retain half the power that he had on the day after his election.
Mr. Obama’s Honeymoon – How long will it last? About long enough to clean up after the Inaugural Balls in Washington.
I am basically conservative though more so fiscally than socially.
I believe in the dignity and value of work, whether it be digging ditches or working on a cure for cancer.
I was brought up to believe that charity begins in the home and that I should never accept the charity of others until all other avenues had been exhausted and without a plan to repay it.
I learned from my parents and grandparents that respect for others is an essential component of a civilized society.
I believe that the single defining feature of the American Society which has set it apart from all others is the level of individual freedom and, in particular, freedom from government intrusion and control, with which we are blessed. It is not our education system (now ranked near the bottom of developed nations). It is not our rule of law (many others have it). It is, in my opinion, the amazing innovations and efforts of people who can do their thing without (or in spite of) much interference from their government.
I think that every time we ask our government to do something for us we are ceding some of our freedom. For this reason, I believe in far less government than we currently have.
I am convinced that with every freedom comes responsibility.
To maintain our freedoms, we must cede certain smaller freedoms to our government to allow it to do one of the few things we probably cannot do privately, protect ourselves from enemies to our society.
I think the Constitution of the United States was a brilliant work that has served as an excellent guide for our governmental activity for over 200 years. I believe it is still valid and useful today. It is not a document that should be subject to change depending on the views of those in power.
I can appreciate that many people are single issue voters. Personally, I look at a much broader perspective. I see our current national debate as the argument between “fair” and “free” and between change and more of the same. The definition of “fair” is depends of the position of the definer. A socialist feels it is fair to take from the rich to give to the poor. A capitalist feels it is fair to reward a person for his results. My definition of freedom is the ability to swing my arms as much as I want, up to the point of the other guy’s nose.
The purpose of this blog is to reflect, in public, about the state of our Union. I hope to ask more questions than I answer. I hope to show an open mind. I will attempt to assume nothing without mentioning that assumption. I will attempt to check the facts of anything I pass on but will often ask you to do that for me, in which case I will state I have not checked and would appreciate any links to organic documents that can confirm or deny anything that I post.
I hope to be humble but that is a tall task when you have a wonderful wife, two great sons, two beautiful and brilliant daughters-in-law, and to date, one granddaughter who defies my ability to use sufficient superlatives.
I hope you will read with interest, comment often, straighten me out when needed, and help promote civilized debate.
I am the original baby boomer having been born 9 months to the day after Hiroshima. I lead the life of most people’s dreams in that I am surrounded by the best friends and family a person could choose and have the health to enjoy the happiness that comes from doing what I want and doing it well (I hope).
For those who care, I was born in California, went to high school in Hawaii, graduated from the U.S.Air Force Academy and have worked in manufacturing for over 30 years. I currently live in Oregon where I still work in manufacturing and, with my wife am growing wine grapes and olives for fun (see www.calamityhill.com)
Last night, 60 Minutes (the CBS News Magazine) had an interesting piece on Barney Frank. It showed once-again why CBS (and the other major networks) have lost credibility in the News Arena.
The piece basically portrayed Mr. Frank as: 1. the brightest guy in the Congress; 2. an out-of-the-closet gay man who was being discriminated against and could therefore never have any job more important than his banking committee job; 3. a person whom we are very fortunate to have running the banking committee; and 4. the person who is going to save our country from its financial problems within the next year or two.
Unless I missed it, there was not a word about Mr. Frank’s involvement with the creation of our financial crisis. Mr. Frank’s involvement with the Community Reinvestment Act in the 1995 expansion of that act, and his strong defense of both Freddie Mac and Fannie Mae is clear. Also clear is the amazing effect that the CRA and Fannie/Freddie on the loosening of responsible credit administration. Probably, as much as any individual, the finger of blame for our financial crisis could be pointed to Barney Frank. There are many others, including literally millions who borrowed unwisely, but Mr. Frank had more influence than almost all others. He was in a position to help stop the mess before it got out of hand. Instead, he pushed the liberalization of lending as pushed by ACORN and others. Now he wants to show that he is the guy who can rebuild the house he helped burn down. He has no shame.
This was just plain sloppy, slanted reporting. Like most of 60 Minutes, and I dare say most of the major networks’ news reports, this story seems to have started with a goal and found facts to support that goal. The fact that telling just one side of the story is highly misleading never seems to bother these people.
Yesterday, the Senate voted against approving the $14 Billion bailout of the Auto Industry. I am pleased. I don’t want any industry in our country nationalized. I am, however, somewhat baffled as to why this happened.
Surely it was not because of the Republicans. Only 31 of them voted against the bill. Both Independents voted for it. The Democrats had 10 Republican votes and all of theirs – plenty to do the job. Only 87 votes were cast. With 52 votes for the measure, the 4 “not voting” Democrats plus the 4 who voted against it could have done the job. Why did Ted Kennedy, Joe Biden, John Kerry and Oregon’s Wyden not vote at all? Why did Harry Reid and 3 other Democrats vote against the measure?
Did the Democrats not want to pass the measure????
Are they providing cover for their Union Boss friends? Seeing the bailout measure defeated, the Union Bosses can now go back to their troops and say, “We fought for you all the way. We didn’t budge on wages and benefits. But now the Senate has killed it. Maybe we should consider giving them something to work with like no wage increases for a year or two?”
Are they posturing to show the American Public that they really do care about what is best for the people? While voting the auto bailout bill down for $14 Billion, they can easily funnel ‘chump change’ like that to the auto industry in other ways: purchases, maintenance and R&D contracts, military support contracts, etc.
Are the Democrats going to be wimps like the Republicans were when they had the majority? Time will tell.
Today, Patrick Fitzgerald, Attorney General for the Northern District of Illinois announced the arrest of Illinois Governor Rod Blagojevich on corruption charges.
Attorney General Fitzgerald is the same Patrick Fitzgerald who conducted the Scooter Libby investigation and trial. Fitzgerald left that investigation open for months after he had the evidence that he needed, in hopes of finding more people involved in the “Valerie Plame Leak” scandal. Most conservative observers assumed that he was hoping to land a bigger fish, e.g. Vice President Chaney.
Does it seem strange that in this case Fitzgerald made the arrest as soon as he had the taped telephone conversations that will condemn Mr. Blagojevich? Why didn’t he wait in hopes of reeling in more and bigger fish. We are talking about Chicago here. It is hard to believe that Mr. Fitzpatrick and the FBI didn’t want to catch Mayor Daley or someone very close to him. And then there is the fact that President-Elect Obama is from Chicago political roots. Think of the Obama associates who might fall if this investigation had been held open for another month or two.
The excuse for stopping the investigation now is that they wanted to stop Mr. Blagojevich before he could sell the Senate Seat he was shopping around. Is that the reason? They say they did it now so it would cast a pal over the Inauguration. Is that the reason? Could it be they wanted to stop before more or bigger fish were caught? What about the people from Chicago who are stacking the West Wing and who will be Mr. Obama’s closest advisors? Would it not have made sense for the FBI to look just a little further to ensure Mr. Blagojevich was not dealing with presidential advisors in his attempt to get the highest prize?
I also find it interesting, if not surprising, that the major media missed the opportunity in almost every article I read today to point out that Mr. Blagojevich is a Democrat. I’m guessing there would have been no doubt of the Governor’s party affiliation had he been a Republican.
You would think after two years of campaigning, Mr. Obama would have an understanding of the power of the words of a President-Elect. You would think he would have an idea of the measure of scrutiny his words will receive from this time forward. Evidently he still has a few lessons to learn. Let’s hope that lesson one is to measure his words.
On Sunday morning on Meet The Press, Mr. Obama told Tom Brokaw that our economy is in a recession that “is a big problem, and it’s going to get worse.”
I find it impossible to believe that he does not understand that a person in his position saying something like that will have a big negative effect. Where do you think the Dow will go tomorrow?
I believe that either Mr. Obama wants to lower expectations prior to his taking office, or he wants cover when he doesn’t succeed in turning around the economy. Am I being too cynical?
Is it too much to ask for our President-Elect to be at least a bit optimistic?
“People panic in herds and recover one by one.” (Dr. William Moskal)
Mr. Obama would do well to recognize that he can create the panic. He should start the recovery with optimistic leadership.
Like any good congressman, the automakers are just going to the trough to get their fair share. Like with congressmen, this “get mine, too” attitude makes for a weak Congress and a weak auto industry.
If congressmen and women were given incentives to do what was right instead of what will get them reelected, they would make far better decisions for our country. If automakers were given incentives to build better cars, instead of incentives to keep union members employed and shareholders happy every quarter, they might just make better and more commercially successful cars.
Here’s what we should do to create the right incentives:
- Don’t even think of a handout. If you have shown poor judgment and purchased a house beyond your means or bought a boat you could not afford, your government will not and should not bail you out. This is no different.
- Offer a line of credit to each company in line with their needs and their ability to pay it back, just like a bank would if you or I asked for a line of credit. It would have to be backed by assets like real estate or equipment or receivables or inventory. If it is not as much or as easy to get as the automakers hoped for, they will just have to make cuts and change plans.
- Contract equally with each of the three automakers to purchase 60 % of the vehicles needed by the federal government for the year. Based on cost of operation data, place the remaining orders with the company that provides the best efficiency.
- Offer a $5,000,000,000 prize for the first US automaker to prove they have a ready-to-manufacture-and-sell electric vehicle that will charge 75% or more in 15 minutes, run 200 miles on a charge, and carry 4 passengers plus their luggage.
- Offer a $2,000,000,000 prize for the first US battery manufacturer to meet a standard that will allow the automakers to achieve the above ranges and charge times.
In other words, I think we should pay the automakers for doing something as opposed to giving them money for having done something poorly.
Much like the way the War on Poverty created more dependent poor, handouts to automakers will just make them weaker, less competitive and more dependent upon the government.
Did I mention that I think we should not even consider giving a handout to the automakers (or the financial companies or any other for-profit venture)?
Latest comments: