Is the Bailout Bill a Disaster?

I am concerned, very concerned, about the consequences of implementing the Bailout Bill.  The following are my opinions.  I would be very interested in yours.

I think it will create very high inflation which becomes a tax on all of us, especially those on fixed incomes.

I think it will allow politicians in power to buy a tremendous amount of influence and cement their power, keeping out all who do not support those who now have the power.

I think it will prop up many endeavors that should be allowed to fail or forced to face reality.  For example, it looks like over half of it will be doled out to states to spend, often just to balance their budgets.  In most cases that will allow state governments to continue to outspend their revenue and avoid making cutbacks that need to be made.  Many companies that have not served their customers and have not changed with the times should be allowed to fail.  Neither governments nor private companies should be paid by taxpayers to continue in the error of their ways.  

It is packed with earmarks.  Is it cynical of me to believe that groups who helped get the new government elected are getting more than the payback they feel they deserve?

I don’t believe this will hurt our economy in the long run and will do very little to help it in the short run.  

I think it is selling the myth that FDR’s huge government programs brought us out of the Depression and this will do the same for us now.  IMO, only the onset of WWII pulled us out of the Depression and we were left saddled with huge new government programs that we continue to feed today.

I think this will, above all, grow our government.  Every new tax, every new government program, every denial of the need for government to balance its expenses against its revenue is another burden that must be carried by our economy.  Is this just  rewarding those who do not add value by taking from those who do?

I am very disappointed with our elected leaders.  I actually expected this from the new Congress but was hopeful that our new President would be better than this.  I am saddened that he is not.  And I am worried.

If you want to know where these opinions come from, you should read my “About” page, here.

Fix the Economy-Promote Incumbency

Back in October, when I was just beginning to write this blog, my second post was “Fix the Mortgage Mess.”  See it here.

I still feel as I did then.  Now seeing that we have turned over billions to Congress and they have happily spent it to no effect, I am more concerned that we turned the chicken coop over to the fox to run it.  

Now what I see happening is a never ending stream of dollars being printed and distributed by our government.  I think it will have little effect on curing what ails our economy, but I do think it will accomplish two very significant things, both very negative in my opinion.

First, I see printing press money driving inflation dramatically.  It makes sense in one way.  The US Government issues treasury bonds in 2009 dollars with a rate of less than one percent interest.  They then pay them off, in the future with, say, 2010 dollars.  though they have had to pay the 1% interest, if inflation has risen by 2%, they end up coming out ahead by 1%.  Not bad.  You (or China or Belgium) lend your money to our Government and then pay for the privilege.  Now inflate our currency at 5% per year or 10% per year.  Pure and simple, the US Government pays back its debt with dollars that are worth a fraction of what they were when they were borrowed.  So printing money helps inflation (and decreases the value of the dollar) so that the Government pays its debt with 90¢ dollars or maybe less.  Only small problem is that an increasing portion of our population is retired and living on a fixed income.  Inflation hurts these people and many others, but not the government and Union employees who have contracts with cost of living allowances.

Second, I see at as yet another fantastic way to increase the power of the incumbency.  In other words, if I am right, everyone now in congress will have even more dollars with which to buy votes, thus making it even more difficult to defeat them.  You can even go further and say that the majority party will have more control of the use of the dollars and will therefore be better able to elect who they want, further increasing their majority.  

I would be very pleased to see President Obama put the brakes on the expenditure of all the “bailout” dollars that are being thrown around.  I would also love to see him understand that Roosevelt and his policies did not pull us out of the Depression.  Only WWII did that, and we have been saddled with many of the failed social programs that Roosevelt started to this day.

Congress Starts – On the Wrong Note.

With its first piece of legislation, the 111th Congress will send a message.  In my opinion, the message is unsettling, at best.

The Lilly Ledbetter Fair Pay Act will change the Civil Rights Act of 1964 to remove the 180 day statute of limitations on filing pay discrimination lawsuits.  The short, 180 day statute, was likely written into the Civil Rights law in 1964 to finally get enough Democrats to vote for it (that’s right – over 80% of Republicans voted for it but it took compromise like this to get 60% of Democrats to vote for Civil Rights).  It is probably an unfair provision that allowed for a fair amount of abuse.  Essentially eliminating a statute of limitations, as the new law will, is swinging too far in the opposite direction.  IMO a statute of limitations in the range of two years would have been a reasonable change.

Unfortunately, this new law was a very high priority for trial lawyers, the National Organization of Women, and most Unions.  I can only assume that passage of this law was part of the political dealing that brought complete support and lots of dollars for Mr. Obama’s campaign from these groups.  

Only time will tell, but I fear little will change except the increase of plaintiff’s attorney’s bank accounts.  Bad people will do bad things.  Those who would have discriminated before this change will still do so.  Many will do it, not by paying less to those against whom they discriminate, but by not hiring them in the first place.  

I wonder if any of those who voted for this law were aware of the state of our competitiveness on the world economic stage.  I don’t wonder that this will make us less competitive.

Congress has now set a tone and I can only hear it through my left ear.  I hope it is just one early false step but, it now looks like Mr. Obama may have to be the moderating influence in our government.

Guantanamo – Is Today’s Solution Tomorrow’s Problem?

President Obama today issued executive orders to make good on campaign promises regarding the Guantanamo Bay detention center.

He has given a 12 month time period for the action to be completed.

Politically, this will help with his far left base that wants all prisoners released and the facility closed.  That is today.  What about tomorrow?

Where do we send the 245 detainees?  Do we give them free airfare back to their own countries? Do we move them to other facilities in the US?

My guess is that the complex problem of what to do with these 245 people (many still very dangerous, others sure to be persecuted or slain upon arrival back home) will haunt Mr. Obama in a year’s time.  Quick and simplistic solutions make for successful political campaigns.  They do not make for wise decisions.

He has extended his honeymoon with his actions today. Has he set himself up for a harder fall a year from now when he has to explain the complexities of the situation as he extends the life of the Guantanamo Bay Detention Center?

Jobs and Government Spending

One of the reasons for our current economic malaise is that we have become an economy of Government.  Today, in the United States, there are more government jobs than there are construction and manufacturing jobs combined.  

Government creates no jobs except by taking from the production of those in our private sector.  Manufacturing creates jobs.  Agriculture creates jobs.  Mining creates jobs.  Construction creates jobs.  All these things add value.  Government protects value and coordinates the activities of those who add value.  

How do we believe that we can remain a powerful economic force if we produce nothing?  Since when does our government create wealth?  Can someone explain to me why spending money on government services will improve our economy but that taxing production will not hurt it?

There are certain things that are done best through government action.  There are not many, but they are important – things like National Defense, coordination of interstate commerce, certain parts of our justice system, etc.  Most things, however, are done with more efficiency when done by private parties with incentives.  Each time we kill a private sector job with taxes to pay for another Government job, we take one more step toward becoming a second class economy.

I have high hopes for Mr. Obama and his new Administration, but, I have high fears, too. My hopes are that Mr. Obama will bring optimism and pride in America and its products back to the majority of us.  We have been down at the mouth for too long and have not supported our own people and products.  I fear, however, that Mr. Obama will be like Congress and see no problem that can’t be fixed by Government Spending.  If he finances his new government programs (read Universal Health Care) by increasing taxes on the productive sector of our economy, we will all suffer for it in the long run.

Senator Caroline Kennedy?

I have been reading a number of blogs with posts regarding the replacement of Hillary Clinton for New York’s junior Senate seat.  

Almost without exception, the question is raised about whether or not the seat should go to a woman.  There is more talk on the more liberal blogs than the conservative ones.  That makes sense.  Conservatives have much bigger fish to fry and except for the opportunity to  badmouth  anyone for even considering Caroline Kennedy for the job, there just isn’t much interest in this issue.

I guess my disappointment is that, especially since they call themselves progressives, many liberal bloggers actually think that this seat should be set aside for a woman.  They quote facts and figures about underrepresentation.  They make lots of excuses for their highly bigoted views like, “…it is a political necessity…,” or “not choosing a woman would be further proof of the old white men’s club at work….”

I’m not surprised that there is consideration being given to Caroline Kennedy despite her near complete lack of qualification.  Her resume is only slightly worse than Hillary’s was when she was elected.  Her number one asset is her star power.

It would be encouraging to hear names considered and true qualifications but I guess we will have to wait for that.

Mr. Obama’s Inaugural Speech

Dear Mr. Obama,

I know you have a lot on your plate right now.  In an effort to help in every way I can, I have done you a favor.  I have written your Inauguration Speech so you can spend the time on more important issues like Pakistan/India, our National Infrastructure, Energy Dependence, the Economy, etc.  It is not fancy.  Your excellent delivery will help it greatly.  

Don’t waste any time on this.  Just get up there and read this after you are sworn in and then get on with your job.

Good luck.  I’m rooting for you.

Respectfully,

Tom

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The Inaugural Speech:

Thank you.

I appreciate your time, your efforts, and your participation in our wonderful democratic system.  I am honored and humbled to have been elected to be your President.  I will work every day to make this country a better place: a better place in which to live;  a better place in which to raise your family; a better place in which to do what you choose to do to contribute to our society.

My remarks today will be brief and to the point.  There is much work to be done and it is my plan talk less and do more.

We are a great country.  We have done great things in the past and have great tasks before us.  We will accomplish these tasks if we work together.

Our Federal Government is bogged down with minutiae right now.  I will press for changes that will free up the many talented people and the large sums of money that we now misspend duplicating efforts of State and Local Governments.  From today, Our Federal Government will concentrate on those things that can be done best only by the Federal Government, things like national defense, our interstate highway system, setting education standards, investigating interstate criminal activity, guiding interstate commerce, etc.   All other government activities should be relegated to State and local governments where, according to our Constitution, they should be accomplished.  I will use the veto power of my office where necessary to remind Congress to write bills for a specific purpose, not as vehicles to waste Federal funds on every local project that will gain more votes in the next election.

Next, our People are bogged down with minutiae right now.  I will press for changes that will free our people from the tyranny of an overly complex tax system and excessive government forms and filings.  From today, our Federal Government will concentrate on getting its work done while reducing the paperwork burden on government employees and all other citizens.  We will remember that our government serves us.  We do not serve our government.

We have lost our focus on what makes America great and we will move to regain both that focus and the greatness.  

What are those things that have made America great?  First, each of us, as an individual, has the freedom to choose his or her own direction.  We will, as your government, do what must be done to protect that freedom by protecting our borders, protecting our citizens overseas, and by recommitting to our freedom of speech.   Second, we have a dynamic capitalistic economic system based on markets.  Our government, your government, will commit to not manipulate markets as was done with the mortgage industry.  Where possible, Government will get its nose out of business, as long as businesses act responsibly.   Third, we are a compassionate people.  As your government, we will stop creating disincentives to the natural ‘good samaritan’ tendencies of our people.  We will work to cap liabilities of helpers like nurses, firemen, doctors, police, and border patrolmen.   Forth, we have been guided for over 200 years by a Constitution that is not a living document but a set of standards.  I will appoint men and women of wisdom to our courts and my only litmus test will be that they uphold our Constitution, not work to degrade it.  Fifth, we are an optimistic people who see the good in all that is around us.  I will encourage our government agencies and our people to do what is best for both our citizens and our land.  Environmentalism is a good thing.  Like Doctors, who are asked to do no harm, we should always choose the path that least harms our planet.  Unfortunately, much of the environmental movement has been hijacked by extremists, causing it to be discredited, largely ineffective in achieving its goals, and a great competitive disadvantage for many of our companies and their workers.  We will work to both remain competitive and show respect for our land and our planet.

For the past 16 years, our public debate has been marked by extreme views and extreme intolerance.  It is our job, yours and mine, to lead us back to the time when we could debate and reason with one another without loss of friendship, without loss of sight of the greater good for the majority.  If you see problems, I ask that you use your energy, not to complain, but, to become part of the solution.  Pitch in and join with your neighbors to make this a better place.    

I believe we are blessed to live in the greatest nation at the most exciting time in the history of our earth.  We are a group of people gathered from all over the globe.  We have different backgrounds, different beliefs, we even look different.  Yet, we are one nation.  I believe that we can accomplish almost any task, if we work as one.  Please join with me and we can accomplish together more than any of us can imagine to accomplish as individuals. 

As we begin this new chapter in our country’s history, I ask that you join me in the pledge to our Flag.  “I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands: one Nation under God, indivisible, With Liberty and Justice for all.”  Thank you.  

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I know.  I wrote it quickly, wasn’t all that eloquent, and didn’t touch on lots of important issues.  The thing is, nobody will remember any of this after the 21st of January.  I would just like to see our new President say those things, and mean them.  A guy can dream, can’t he?