Monday, December 29, 2008

The Irony of Illegal Immigrants in Massachusetts

My great grandparents legally came here from Ireland. My husband’s grandparents legally immigrated here from Canada. My entire neighborhood legally came here from Italy (yes I call my neighborhood ‘Little Italy’). Why is it that millions of people have immigrated to our wonderful country legally yet millions today are illegally entering the country without a blink of an eye from the government?

They take our jobs.

They use our resources in emergency rooms.

They drive illegally so there is no re-course if they cause an accident. They simply disappear because they do not ‘technically’ exist in the United States.


Their children enter our classrooms unable to speak English, again taking valuable resources away from AMERICANS.

A recent article in the Boston Globe has me hot under the collar over the ‘sympathy’ that illegals are receiving. View the article in full here:

A recent lawsuit brought by an illegal immigrant regarding underpaid wages in the news today. The illegal won the lawsuit, using STATE laws. The laws that are meant to protect CITIZENS are now being used to protect ILLEGALS.

These people do not ‘exist’ nor pay taxes to ANY commonwealth. Then have the nerve to sue for underpaid wages??? I am not condoning abusing someone because they are illegal. They should not have been hired in the first place. The company involved should be fined for their own illegal behavior. I’m sure the company thought there would be no recourse since the illegal immigrant should not be working in the first place. HOWEVER, both the illegal immigrant and the company ripped us off by not paying taxes on the payroll or income or paying social security taxes. I’m sure any taxes on this income were NOT paid to the state or the federal government. Supposedly the man went to Boston Legal Services to pay taxes (which I find hard to believe), and that is how the complaint got started.

Why did this illegal sue? "I was just collecting what was rightfully owed to me," the fish man, who declined to use his name because he fears deportation, said in Spanish in his lawyer's offices at Greater Boston Legal Services. "They already pay us a miserable amount of money. Why do they have to rob us?" What the hell does he think he is doing to legal Americans??? HE is robbing us of resources that are meant for citizens. If he was truly concerned he would have taken the necessary steps to become a legal citizen, learn ENGLISH and get a job legally. HE robbed this country by not paying taxes yet the state turns around and sues on his behalf.

“As part of its investigations, the attorney general's office does not ask workers about their immigration status, saying it is enforcing state law and not federal immigration law.” So they are wasting MY taxpayer dollars on investigating and enforcing state laws for people who pay NO taxes and who are breaking the law by being here illegally??? This is completely outrageous!!! I find it ironic that our tax dollars support illegal immigrants who use valuable resources and now also have the State Attorney’s office wasting our taxpayers dollars without pursuing the illegality of the immigrant. This truly shows how defunct our system is in this country. Way to go Massachusetts!

Thursday, December 25, 2008

Monday, December 22, 2008

Thursday, December 18, 2008

The Governor of New York’s “Obesity Tax” – The Absence of Logic and Freedom

The age of credit, bizarre monetary policy and the power of the Federal Reserve have given way to incredible levels of fiscal irresponsibility in all levels of government. State governments now have huge budget deficits which have led to ridiculous proposals such as Governor David Paterson’s “obesity tax.” Bad economic policy has now allowed the government to broaden its horizon to levy taxes on “goodies.” The governor’s proposals also include higher taxes on gasoline, taxi rides, bridge tolls, cable and satellite TV services, cigars, beer, movie and sports event tickets, music downloads (aka the “Ipod" tax), health clubs and spas and much more.

While all these taxes are outrageous and quite indicative of classic liberal “tax and spend” policies, the focus of this column will be on the “obesity tax” because this type of tax leads to a problem far more perplexing than archetypal liberal fiscal policy.

Nutritionists’ efforts to increase awareness and encourage healthy lifestyles are praiseworthy. However, their efforts become misguided when suggestions of a tax are touted. The result leads to a loss of individual freedom and erroneous taxes, as taxes should not be levied to encourage or discourage certain kinds of behavior.

The governor’s proposal will levy an 18 percent tax on soda and other drinks that contain less than 70 percent of real fruit juice. What is next? A “French fry tax?” How about an overall fast food consumption tax? A processed food tax? Taxes on butter? Taxes on meat that is not 95 percent lean? Taxes on pork (a ham tax perhaps?) to offset “pork” barrel spending? The possibilities are endless.

Advocates of the soft drink tax say soft drinks have empty calories, which means there is no nutritional value. While this is a true statement, is it prudent for the government to remove one’s ability to make their own choices? What role do government bureaucrats have in determining what is considered nutrient dense? Where is that line drawn? These are questions that people who are in favor of a national healthcare system must ask themselves.

Crisis is a friend of the state and always comes at the loss of personal and individual freedoms. The Bush Administration has successfully nationalized the banking industry and has laid the groundwork for the largest artificial economic stimulation in America’s history that will be executed by the Obama Administration. One’s freedom to prosper will be in jeopardy when inflation reaches what could be a record high level and further erosion of the dollar sets in which weakens purchasing power.

We now have what is deemed as an “obesity” crisis which calls for the government to step in and levy taxes on unhealthy food products. If the government is going to provide healthcare, it is going to use taxes to discourage unhealthy behavior; and it will eventually extend far beyond a tax on soft drinks.

In conclusion, the government can take care of you for one small price: your freedom.

“Government never takes freedom in one swift move. It regulates and legislates it away, a little at a time– mostly in the name of 'protecting' you.”
–R. E. Bierce

Saturday, December 13, 2008

Christmas Under Attack…Again

As we ring in the holiday season, the air is filled with the smell of fresh pine needles. The grass is covered with new fallen snow. Children across the nation are huddled by their television screens watching Christmas specials in anticipation of the most celebrated holiday in the world. Kids around the world are adjusting their Christmas lists with last minute changes hoping the days following the holiday will catapult their minds with creative and imaginative play. Hundreds of people decorate their homes with bright and festive Christmas lights; some with enough lights that would make the Grizwald family envious. It is a wonderful time of year; the Christmas season is upon us.

Not so fast. For some time now, I have heard over and over again about how we shouldn't say the word "Christmas." Some have told me everyone doesn't celebrate Christmas. I have also been told to be careful, especially at work, where I may accidentally wish someone a Merry Christmas who doesn't celebrate the holiday. Saying Merry Christmas by mistake to the wrong person could lead to a lot of trouble if they happen to be an atheist or belong to a non Christian religion. A safe way to greet someone this holiday season would be "Happy Holidays." Even "Seasons Greetings" has been construed, by some, to be too "Christmassy." In reality, most people I have met who do not celebrate Christmas are fine with things the way they are and are not as sensitive as everyone would like you to believe. Instead, just like everything else, there are a small group of people and some small organizations that want to ruin it for everyone else.

Year after year I hear these tales. These lessons are continuously regurgitated over and over again by the media. Every year we hear about some extreme atheist groups and groups on the left who come out brutally attacking this holiday. Most recently an attack occurred in the Washington capitol, where an atheist group was allowed to place a sign explaining why there is no God next to a Christmas Nativity scene. I cannot turn on the television without seeing someone screaming about Christmas decorations that offended them. Does this seem right to anyone? Is all this really necessary? Should there be a better representation of all religious holidays everywhere we go?

The fact remains that 95 percent of all Americans celebrate Christmas. That leaves only 5 percent that do not celebrate the holiday, of which even less are offended by it. I see several stores and offices that do a tremendous job of honoring many of the religious holidays around us. I think that is fantastic, as long as they choose to do this out of their own free will and not out of fear. I do, however, see others that display only what most would refer to as Christmas decorations. Is that so bad? Should companies be forced to display decorations that show every feeling and belief that exists? Sounds like an opportunity for another liberal government mandate. Don't laugh! Something like this could be looming on the horizon. Many organizations would like to see legislation passed so their tiny group can get an "equal shake" this holiday season. Let me ask this question, if I were to visit the offices of these groups that are on the offense against Christmas, would I see a wide array of holidays being honored in their offices? My guess is I would not. One shouldn't criticize anyone until they choose to lead by example. If one of these groups chooses to do this, we need to ensure they include ALL religions no matter how minimal they may seem. A quick Google search will show there are thousands of alternative religions most people have never heard of. I hope they have plenty of room in their main lobbies so everyone is equally represented.

Last time I checked, the Pilgrims sailed here for the religious freedom to worship whatever God they chose. With 95 percent of the people celebrating Christmas it is safe to say we are still primarily a Judeo-Christian nation and that is not going to change anytime soon. This great country was founded on Christian principles and "In God We Trust" is stamped on all American currency, to the disliking of some atheist groups. That being said in a free society all religions are welcome to come here with the freedom to believe, or not to believe, in whatever they choose. However, one has to keep in mind this is and always will be a Christian nation. I would never expect to go to another country where 95 percent of the people celebrate another holiday and expect to see an equal amount of Christmas decorations there. If I celebrated something different, I would never expect, nor would I want to see my beliefs pushed on those in that country. Why should this be any different here in America?

For the record I am a conservative, but I do not consider myself a very spiritual person. I am not very religious and while I believe in God, I have more understanding for people who are atheist and those who celebrate other religions than one might think. I have never been offended by anyone else who has wished me a happy holiday for something I do not celebrate (yes it has happened before). I look at it as someone took a couple of seconds to wish me a good day for something they believe very strongly in. I cannot think if a higher compliment someone can give than that. I ask that you grant me, and most of the other people in this country, the same respect when my favorite holiday of the year comes around.

That being said let me wish everyone a Merry Christmas. For those of you who do not celebrate Christmas, but are still respectful of it, have a Happy Holiday. Those who are not respectful of Christmas, I wish you well. Demonizing and attacking Christmas is only empowering the people who celebrate it. Christmas is not going away any time soon and either are 95 percent of the American population who celebrate it.


Friday, December 12, 2008

George W. Bush: Czar or President?

Republicans in Congress, who are being closely watched by their constituents, stood their ground and killed the bailout bill for the “Big Three” automakers. Finally, a victory against corporate welfare; and Republicans are acting like conservatives again! Not so fast…

Until today, the Bush administration was opposed to using funds from the Troubled Asset Relief Program (TARP) to aid the ailing auto companies according to a Bloomberg report. “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.” This statement is indicative of the Bush administration’s position according to Treasury spokeswoman Brookly McLaughlin.

The last line of President Lincoln’s Gettysburg address states: “and that government of the people, by the people, for the people, shall not perish from the earth.” It seems that the people no longer have a voice in their government. Our elected officials spoke on our behalf, yet President Bush feels he has the power to override the decision.

Bush’s use of the term “czar” is very disconcerting. His administration has presided over government intervention at extraordinary levels in every aspect from national security to the most disturbing involvement in the economic sector. The administration’s intervention in the financial sector has led to forced partial nationalization of nine of America’s largest banks. Billions of dollars have been given to politically connected institutions to jumpstart and continue peculiar monetary policy along with the continued abuse of credit.

As for the auto industry, the government takes a stake by way of the bailout and will appoint the industry with a “car czar.” Why the term czar? Is there an advantage to using the governing style of former Russian emperors? Just who will this car czar be, and what gives him/her the expertise in overseeing such a transaction? A business does not have to look any further than the federal government for examples of gross mismanagement. With the federal debt approaching $11 trillion and deficits that are likely to surpass $1 trillion, the government isn’t the institution to seek cost structure advice. Therefore, how does a person appointed by a President who has presided over the worst monetary policy arguably since the Hoover and FDR administrations going to get the “Big Three” back on track again? Answer: It won’t happen.

We loan the industry the money so they can pay their bills, then what? Without the major changes that I and other writers have outlined in previous columns, the American taxpayers will be at a crossroads again shortly – this time with a $15 billion sunk cost.

The events that have transpired over the latter half of 2008 have fiscal conservatives and free-market advocates in frenzy. True conservatives know that crisis is a friend of the state. Crisis and people’s desperation give the government the power to overrule the will of the people in order to experiment – experiment with trillions of dollars as if it were pennies. As Herbert Hoover laid the groundwork for FDR, George Bush has laid the groundwork for Barack Obama. George Bush has set up the framework for the largest governmental intervention experiment in possibly all of America’s history, as I believe it will surpass the New Deal.

For those fiscal conservatives who still think they have representation in the Republican Party, it is unwise to have blind faith. Don’t be fooled by temporary victories such as the Senate’s. There is no need to be frustrated with Barack Obama or the Democratic Party. Obama will do what he was elected to do and execute the principles his party has always stood for and conservatives have always opposed. After all, it’s not his administration who is agreeing to appoint “car czars,” approved government handouts to select income groups passing it off as “fiscal stimulus” and handed out billions of dollars to irresponsible companies as if it were pocket change.

Sadly, the world will have to see the fallout first before it sees the light…

Thursday, December 11, 2008

Don't Take Money From Federals

They may want your job 'cause of it.

The U.S. Office of Special Counsel wants Ogden Police Chief Jon Greiner removed from his job for running for the state Senate two years ago, a race that he won.

The agency says Greiner violated the Hatch Act by running for the Utah Senate in 2006. The OSC threatened to file the complaint during the race, but Greiner appealed, saying his job does not violate the law.

The Hatch Act restricts the political activity of state, county or city employees connected with programs that take federal money. In a 2006 appeal letter, attorney Jim Bradshaw argued that Greiner does not directly administer the Ogden police department's federal grants.

"Weeks before the election, this allegation comes up for political purposes to drive him from the race," Bradshaw said Wednesday.

A Special Counsel attorney rejected Greiner's appeal, and in October the agency filed a complaint with the Merit Systems Protection Board.

Running as a Republican, Greiner beat Democrat Stuart Reid for state Senate District 18 and took office in January 2007. He has since further distanced himself from the city's federal grant money, Bradshaw said.

"No one is claiming there are ongoing violations," he said. "There's been a complete separation."

The case is scheduled for trial in front of a federal administrative law judge on June 2. If Greiner is found guilty of violating the act, Ogden could be forced to pay the federal government two years' worth of his salary, or about $210,000. Greiner could be barred from working in any state or local job for 18 months.

Tuesday, December 9, 2008

Ringing the Alarm Bell

Call me Cassandra, but I'd like to point to the new Cardinal law #1: Thou shalt not underestimate the political phenomenon better known as Obama. He is not the same ultra-liberal senator we strongly disagreed with. The people he has appointed to key economic positions, (look at Dr. Romer for CEA, Jason Furman, Larry Summers etc.) are in the middle of the political spectrum and certainly qualify as supporters of the free market. They are NOT progressives or any other ultra-liberal flavor! Don't take it from me though, Bush's ex head of the CEA Professor Mankiw writes,

What would you call a group of economists who are skeptical of regulating mortgage markets, who think unemployment insurance and unions increase unemployment, who say that tax hikes retard economic growth, and who believe that the recovery from the Great Depression was a monetary phenomenon rather than the result of New Deal fiscal policy?

No, it is not a right-wing cabal. It's Team Obama.

Here's the evidence:

When Senator Christopher J. Dodd, Democrat of Connecticut, gave his opening statement last week at the hearings lambasting the rise of “risky exotic and subprime mortgages,” he was actually tapping into a very old vein of suspicion against innovations in the mortgage market.....Congress is contemplating a serious tightening of regulations to make the new forms of lending more difficult. New research from some of the leading housing economists in the country, however, examines the long history of mortgage market innovations and suggests that regulators should be mindful of the potential downside in tightening too much.

--Austan Goolsbee

Unemployment insurance also extends the time a person stays off the job. Clark and I estimated that the existence of unemployment insurance almost doubles the number of unemployment spells lasting more than three months. If unemployment insurance were eliminated, the unemployment rate would drop by more than half a percentage point, which means that the number of unemployed people would fall by about 750,000. This is all the more significant in light of the fact that less than half of the unemployed receive insurance benefits, largely because many have not worked enough to qualify.

Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy. Also, those who lose high-wage union jobs are often reluctant to accept alternative low-wage employment. Between 1970 and 1985, for example, a state with a 20 percent unionization rate, approximately the average for the fifty states and the District of Columbia, experienced an unemployment rate that was 1.2 percentage points higher than that of a hypothetical state that had no unions.

--Larry Summers

Tax changes have very large effects on output. Our baseline specification suggests that an exogenous tax increase of one percent of GDP lowers real GDP by roughly three percent.

--Christina Romer (writing with husband David)

Given the key roles of monetary contraction and the gold standard in causing the Great Depression, it is not surprising that currency devaluations and monetary expansion became the leading sources of recovery throughout the world....the new spending programs initiated by the New Deal had little direct expansionary effect on the economy.

--Christina Romer

I'm sounding the alarm bell early here because the more centrist he is the better his/their chances are for 2010, 2012, etc... There are three types of policies/politics, economic, social/cultural, and foreign/national-security. He passed a CinC test already, or perhaps we failed ours. Interestingly enough, or perhaps with little surprise, he is already enraging the left because he is continuing Bush's national security policies, sans Gitmo. He already has come to the center with Israel. If he takes the center/center-right position for economics, what are we left with? Social and cultural politics? Forgive me for saying this but people are sick of Republican culture wars. Most of y'all aren't but now we're in the minority. I’m not saying the Dems are going to rule forever, their party is not competent enough for that. And we all know that the liberal Dems like Pelosi and Reid would be horrible for this country. But in the short run I don't think we've hit bottom. McCain was our best shot this year.
I’m not all doom and gloom though. In order to not have another Clinton we need to figure out how to fight back. I think we need to invent a completely new set of public policies we would pursue. Let me give you some examples: Education, income inequality, global warming, legal immigration… etc.
People want a party with solutions. And even though the do-nothing Dem Congress accomplished zilch from 06-08 who took the blame for that? We somehow did.
Newt Gingrich rebuilt the party by organization through the state level. If we accomplish our goal here we could see that same success. There is a caveat though. Gingrich was a man of ideas and our party became the party of ideas. We need to live up to that legacy as we rebuild.
Lastly let us not forget the lesson of Tony Blair - who snatched the Conservatives' clothes and wore them to victory in 1996. Obama campaigned as a center-left to center-right politician depending on the issue (some issues have no left or right, granted). He is now pivoting skillfully towards center-right. In other words he is browsing through our outfits and picking out what he likes. This is good for us as individuals but not good for our party. Later on I will type what we can learn from British Conservatives like David Cameron who was/is the remedy to the Blair//Brown dominance.

As usual I cross posted this at another blog...

Rod Blagojevich: Windy City Politics at its Best

December 9, 2008 marks the day the world gets an inside look into Chicago politics. This is not to say that people are unaware of Chicago’s tainted political image, as history has painted that picture very well. However, in lieu of the fact that one of Chicago’s own has just been elected President, people’s memories will be refreshed. Illinois Governor Rod Blagojevich was taken into federal custody this morning apparently before he could go for his morning workout.

“Blago,” as he’s often referred to in Illinois, has left his state in sheer disgrace. For those who haven’t paid attention, below is a summary of the Governor’s corrupt and idiotic policies:

Economic Policy

Far left lunacy is actually a kind description. Perhaps the most famous was his idea of a “gross receipts tax.” For those who have studied basic accounting, yes, you read that correctly. To clarify for those who haven’t, our governor thought it would be a brilliant idea to tax Illinois businesses on revenue BEFORE expenses are deducted. If Blago had a modicum of economic knowledge, he would realize that this type of taxation would not only stifle economic growth, but also increase the price of products and slow job creation. How so? Taxes are a cost to business, which is ultimately passed onto the consumer. Just as materials and labor are factored into the cost of a product, so is a company’s tax burden. When costs increase, business is forced to do more with less, which eventually leads to layoffs, and takes away the ability to use capital to pursue opportunities that lead to growth. A tax of this nature would simply drive business out of the state of Illinois. Why not relocate to neighboring Indiana? In summary, the outcome of a gross receipts tax would mean higher prices for consumers, less jobs and would ultimately LOWER tax revenue for the government. After all, if business leaves, there will be no tax to levy. Perhaps politicians at the federal level will take note of this and rethink our federal corporate income tax rate.

More recently, Blago threatened Bank of America by saying that the state would halt its dealings with the bank because it recently canceled a credit line to Republic Windows & Doors, a local factory on the verge of bankruptcy. Seeing that the current credit crisis stemmed from banks being required to comply with federal mandates that forced them to loan money to people who could not afford to repay, it’s not exactly a stellar idea that politicians use this kind of leverage to force lending institutions into making unwise decisions. Some politicians never learn, do they? Does this sound like extortion?


Speaking of extortion, let’s move on to what has brought about the federal charges Blago is currently facing.

Instead of working on a plan to replace President-elect Obama’s vacant Senate seat with someone who is qualified, he thought it would be better to auction it off to the highest bidder. Why not enlist it on EBay?!

Blago also threatened to illegally withhold state aid to the currently ailing Chicago Tribune on the sole basis that the newspaper’s editorial writers weren’t saying very nice things about him. He demanded that these writers be fired in order to receive aid. Since I do not receive state aid, I’ll continue on…..

One of the most famous plays in Chicago’s corrupt political playbook is the famous “pay-to-play” politics. If you are a contractor looking to do business with the state government, Blago will throw work your way in exchange for a campaign donation. The deeper your pockets, the more business you receive.

One can only wonder what more will be uncovered as the Feds begin to build their case. Plenty has already been caught on tape.

Illinois residents are left to wonder if the corruption will ever end. As comical as is sounds, Blago was brought in with the intent to end corruption. He replaced former Governor George Ryan who is currently serving a six-year prison sentence (currently seeking a pardon) on charges of racketeering and fraud. Instead, the corruption continues, and Blago enjoys the lowest governor approval rating in over three decades according to Chicago Tribune polls.

Blago joins a long list of Illinois politicians who have been tied to scandals. While President-elect Obama has not been charged with any wrongdoing in the midst of this controversy, he is cut from the same cloth of the corrupt Chicago political machine and shares many of the same political connections (Rahm Emanuel and Tony Rezko, for example). It would be unfair to accuse one political party of corruption, as both Democrats and Republicans have been convicted of crimes; however, the media has done a very good job downplaying the depth of corruption that plagues Chicago politicians. Obama faces an uphill battle in the eyes of those all too familiar with “Windy City” politics.

Sunday, December 7, 2008

Asleep At The Wheel - Wake Up America

From this previous Presidential election we can conclude the following:

Approx 64 million people said yes to Barack Obama’s and no to John McCain’s campaign message.

Approx 57 million people said yes to John McCain’s message and no to Barack Obama’s message.

With approx 300 million people in the United States and 200 million being eligible to vote….we’re seeing 80 million people not saying anything.
Now I’m sure some of these did not see a message that resonated with them enough to support a candidate, but then there are so many who just do not vote.
Add on top of that the large amount of new voters who were drawn out and the number is rather staggering.

With the majority of the media this campaign season being so one sided and international media also being so one sided it is very tough to get a clear picture of each candidate without taking the time to do your own research.

When speaking with my brother who lives overseas after the election he stated he thought Barack Obama was the best candidate. When asked how he came to this decision from so far away he stated because ‘McCain is a finger on the trigger, ex war hero who has just towed the line with Bush’.

Naturally I was taken back by this so I delved a little further.

‘Have you ever heard of William (Bill) Ayers?’ I asked
‘Have you ever heard of Jeremiah Wright?’ I asked
‘No’ again was the answer.
‘How many planes has McCain crashed in his lifetime?’
‘Five’ was the answer
‘How much has Palin spent on clothes for the campaign?’
‘It was over $150,000’
‘Did you hear about her banning books in an Alaskan library?’
‘Oh yeah we heard about that’.

Naturally I was shocked. Not because of the obvious one-sidedness of the British media but the fact my own brother had fallen victim.

Living in the US and being subject to all forms of media (TV, radio and Internet) with this campaign I’d been open to all sides. In the UK you only really have the news media to go on.

Again using the UK as an example I found a man online who was told to take down his Union Jack (British flag) because some minorities in the area were offended and had complained. Now I know the UK has changed with the incoming minorities and the traditional culture being severely diluted…..but this is just ridiculous.

How these people in the UK are not revolting over being told they cannot fly their own flag is beyond me.

This all boils down to change. We’ve heard it a lot in the last months in the good ol’ US of A….but what’s it all about.

Well obviously the UK has changed….and for the British people it appears this change is not good for them and their values and culture. But this change has not happened overnight…this has been small gradual change.

You get the occasional person who is upset at something but rarely speaks out so it seems, thus it continues. Tiptoeing onward and upward until you look back and cannot recognize what it used to be like.

Coming back across ‘the pond’ as we call it, the US is heading in the very same direction.

Granted the country is still much younger, change is still happening and I believe it is not for the better (regardless of what those elected officials say).

I asked someone (who shall remain nameless) during the primaries what they thought of Obama as he was a relative unknown.

‘He’s an Arab!’ was the response.

No matter what proof I stated the only response I got was ‘He’s still an Arab!’

It has been proven time and time again that a large portion of the population do not understand the basic functions of government and who was indeed running in the campaigns. This is either through a lack of active involvement or just a lack of caring as politics was something they were never involved in. They hear one rumor (regardless of its truth) and that’s their opinion.

However what is most troubling about this group of people is that the Obama campaign was able to draw them in, still without an understanding of the campaign and the government.

A fantastic study was done during the closing weeks of the election and details can be found at

Be it the Republicans or the Democrats who draw in these new voters it is very dangerous to vote while not fully understanding why you are doing it. Not dangerous to the individual, but dangerous to the country.

In the US you can live life, go to work and watch TV without coming across politics.
Not just Presidential politics either, but local and state politics as well.

Unless it’s a scandal worthy of regular news there is not much coverage on regular TV.

Too many Americans are (as I like to call it) ‘asleep at the wheel’. A voice is only heard when it effects them directly.

For years this country has not had an energy policy. The US continues to import more and more oil thus relying on foreign nations. This has not only been dangerous but damaging to the US economy by sending huge sums of money overseas.

However not until gas prices started hurting the average person were large amounts of voices heard.

Action could have been taken decades ago but the masses remained silent as they were not directly affected.

Now cries were heard, the offshore oil drilling ban was lifted and thanks to a looming recession the price of oil has plummeted from $150 to under $50 a barrel.
Still there are a huge majority of people who do not understand where the US gets its oil from. A poll conducted by shows that many people while upset over the recent high energy prices still do not have a firm grasp on the reasons for it and where the US in fact gets its oil.

And what do politicians want to do? Reinstate the offshore oil ban and put more taxes on the price of gasoline.

An energy policy would help solve this issue from returning in the future, but where have the majority of voices gone? Back to their lives as they are no longer being bled dry at the pumps. While the issue remains unresolved…..the ‘huge’ voice has been lost.

Come summer 2009….the prices will be back up and people will once again cry out.

Why is this?

Why do so many Americans not care until it’s too late?

Why does it take so much for the majority of people to act?

Are they just lazy? Do they not care? Are they so wrapped up in their lives to bother?

It’s a troubling and unanswered question which will affect the future of this great nation.

Another current issue is the economic crisis.

Money has been so readily available that in 2007 the US as a whole spent more than it earned. The traditional ‘if you can’t pay cash you can’t afford it’ has long since vanished.

People as young as 18 are able to borrow almost obscene amounts of money with very little proof of being able to pay it back.

Sign up for this credit card and get a free t-shirt.

It doesn’t matter that you have no income….we use your parents as backup.

It all comes down to not being able to afford the item itself, but to afford the payments.

Normally a $50,000 car is out of reach, you’d never have that kind of money laying around. But $400 a month for however many years…..that’s doable.

This then expanded in the 1990’s to lending for houses.

It’s OK that you can’t afford the house under the ‘conventional’ means of borrowing money. We’ll lend you more than the house is worth at a special rate because even if you default the government will back up the mortgage. Enter Fannie Mae and Freddie Mac.

What they either failed to tell the borrower or the borrower was so dazzled at the prosperity of owning a home that they didn’t care was that the payments will increase after 5 years.

To me its just common sense…..if they can’t afford the house by conventional means then what’s going to happen when the payments adjust?

And even with government backing, what’s going to happen when everyone or even a small majority who has these loans defaults?

Now this housing crisis can be traced back to the Democratic Party and the Community Reinvestment Act started by Carter and revitalized by Clinton.

Both Bush and McCain in the last 5 years signaled the warning bells of the coming disaster but nothing was done and now the Democrats are pointing the finger at ‘Bush’s failed economic policies’

Granted more could have been and should have been done, but once again the masses asleep at the wheel hear Bush being blamed and that’s it….its his fault.

Thus those uneducated people all fall on the side of Obama without knowing the truth and of course…..why should they tell them the truth?

Come back to less than a month ago and to ‘solve’ this economic crisis the government is bailing out private industries.

Investment companies with so many of these dodgy mortgages on the books – they need a bailout otherwise they’ll fail and cause more havoc.

The big 3 auto manufacturers who lost sales due to the high gas prices are on the verge of failing – they need a bailout otherwise they’ll fail and cause more havoc.
CITI Bank who has so many of these dodgy mortgages on their books is failing – they need a bailout otherwise they will collapse.

This bailout bill offering a total of $700 billion of tax payer money was signed in to avert this huge crisis. If this was not put through immediately the whole economy would collapse. Congress goes on a two day vacation between this speech and the votes however, figure that one out.

Over a month and over $1 trillion later the stock market is still in roller coaster mode, more industries are coming to Washington with their hands out and we the tax payer are on the hook for these enormous amounts of money.

Not only that, but congress has now pledged over $7 trillion to save the economy.

Where was the vote on that?

Where are the voices from the masses?
Well people are not directly being affected. Taxes have not gone up to cover this money and people are not being forced to spend much more in their day to day lives. Now when it comes to our children and our children’s children… loud will their voices be?

There are much more efficient ways to resolve this crisis created by government. But government appears to just be throwing money at the problem.

Its OK, it’s not their money…..they don’t have to pay it back…we do. They’re just printing more. Where are the voices?

When it comes to those asleep at the wheel losing their jobs….who will they blame?

Blame Bush…it happened on his watch.

Blame Obama…..but he just inherited it from Bush.

What do you think the one-sided media is telling those people?

If they knew the truth… you think they would have voted the way they did?

How are they going to learn the truth when all they get is one side?

What is going to happen if we all just sit back and let ‘someone else’ deal with the problem?

Well right now that someone else is the US government.

This economic crisis was caused by government, they are now being left to fix the problem they caused and they are grabbing power and nationalizing industries in the process.

If your house was burgled, your possessions stolen and you knew who stole them, would you let that person head up the investigation? Of course not.
But those who knew what was happening in the mortgage industry, said to the American people (many with their life savings invested in these companies) that everything is fine are the ones now saying they are solving the problem.

Frankly I don’t trust them and you shouldn’t either.

Once again government is not the answer.

The government manipulated the free market system, they have literally destroyed the free market system and they are now spending trillions on dollars to solve the problem they say is the fault of the free market system.

We need to wake up.
If you’re asleep at the wheel too long….the vehicle will crash.
...and we're already a long way off the road.

-Tony Leach

Thursday, December 4, 2008

Trouble in Canada

For those who follow Canadian politics (*crickets*), there is a massive political crisis brewing. The minority parties: the soft-leftist Liberals, the hard-leftist New Democratic Party and the leftist "separatist" Bloc Quebecois have agreed to attempt a backroom coup and take the Conservative Party of Canada and Prime Minister Stephen Harper out of power. The facade for this power grab by the shaky alliance is that Harper has done nothing to protect Canadians from the worldwide economic crisis.

Nothing like this has been attempted in recent history and, in all essence, is a political coup by the left wing in spite of the voters wishes. Considering only six-weeks ago the arrogant "natural governing" Liberals were slapped around like Tina, the voters wishes are pretty fresh.

The Liberals have run Canada for a majority of its existence, but in the last 15 years have ended up running it into the ground with spending scandals, nepotism, bipolar economic policy and anti-Americanism (aka the poor Canadian's patriotism). Harper, on the other hand, while being not immune from criticism, has yet to have his hometown magically get a federally funded golf course or attempt to hide taxpayer money going to friends of the party. The NDP and the BQ are just as out there.

Keep an eye on this. Having our neighbor (and my kin) enter chaos is never a good thing, especially if the Liberals are trying to override the voters' will.

Tuesday, December 2, 2008

Creative idea for a stimulus package:
Let me get this out of the way first: I completely agree with what Professor Greg Mankiw wrote about high yield public investments. He said it perfectly,
One thing all economists agree on: If there are public investment projects that pay a high rate of return, those are worth paying for, even if it means more borrowing. But that is always true. Even if we were at full employment and there were no possible employment effects of fiscal stimulus, we should undertake public investments that pass a cost-benefit test.
In this regard, two observations come to mind. First, since most infrastructure is used locally, the proper level of spending is best determined by state and local governments rather than by the federal government. Earlier, I suggested that fiscal stimulus could be decentralized. Each state governor could be allowed to determine whether to take federal money as state aid or have it paid directly to his or her state's citizens as tax relief. I still think that makes sense.

Second, more public projects would pass a cost-benefit test if we repealed the Davis-Bacon Act. This law requires contractors on these public projects to pay "prevailing wages," which are typically union wages well in excess of what would occur in a free market. If the government paid market-determined wages for infrastructure projects, we could have both more infrastructure and less government debt. Without doubt, that legacy would benefit future generations.

I asked Professor Mankiw about income inequality earlier this year and he was gracious enough to respond. Professor, if by some odd chance you reading this – thank you so much, you are an inspiration! He told me that the problem with income inequality is the gap between skilled workers and unskilled workers. The highly skilled workers get good jobs, keep them, and have high wages. The unskilled workers don’t get good jobs at the same rate as skilled workers, have trouble keeping them, and their real wages are either stagnant, barely rising with inflation, or decreasing. The problem is that our educational system is not producing enough skilled workers, or to say it a different way, our education system is not properly “skilling” our workers. (And here I thought they made Kosher laws to cover that)!

So here is my humble idea. Instead of throwing money at bridges to nowhere, or to bailout states that have been fiscally irresponsible, why not address the stimulus package to reform/strengthen the American educational system?

Here is how it would work. Create regional (I have not figured out the right size and number of institutions but for now my idea is as follows) massive hybrid technical and liberal arts universities. These universities work with corporations, small businesses, entrepreneurs, etc, to figure out what jobs are in the region, who is hiring, and most importantly what they what, skill wise, out of workers. Any donation to the school from a corporation, or person is 100% tax deductible… The universities also coordinate internship opportunities on a greater scale than what we are accustomed to or have seen. Government is supposed to serve the people – this is a way of helping the market get what it wants and at the same time create massive stimulus through hiring professors, instructors, creating new buildings, new roads, sales of technology etc. Everyone gets helped. You could also use the stimulus to help people pay for enrollment. Now… the problem is how do you fund these institutions in the long run?

So far in this plan we have already made any donations completely tax deductible. I would also suggest letting corporations take a tax deduction for any individual’s education they pay for or sponsor. Lastly, perhaps you could lower the corporate income tax and the small business income tax (I know two different categories) by 8% (or some other number), and allocate 2% of the corporate tax and business tax (I know it is IIT) income to pay for the schools. This way businesses have extra money to hire the workers they are partially paying for to train. You could also fund these programs through some sort of low rate consumption tax…

I’m not a Keynesian but I think this is an interesting idea that might work for three reasons: 1) it addresses long term growth and short term stimulus, 2) it creates market transparency, and 3) I think it would pass a cost – benefit test.

My thoughts on the GM bailout

These three graphs, HT: Carpe Diem of the great, magnanimous, and brilliant Dr. Mark Perry. For links to
the individual entries please see below...


Graph 1:

Graph 2:

Graph 3:

What can we take from these graphs? Firstly the Big 3 are not competitive with Toyota, Honda, Nissan, (not listed but also BMW). Next you might have some questions about why are the labor costs are so high for the Big 3.

Let me put forth the most pertinent reason why the Big 3 can’t compete: Ladies and gentlemen allow me to introduce you to the UAW – the United Auto Workers. They make car prices higher (or produce a car at the same price as the competition with hundreds or thousands of dollars of less “stuff”), cause GM to lose profits, and have handcuffed the direction that the Big 3 need to take to advance, survive, and thrive. The UAW do not work in the American Toyota plants, or the American BMW plants, or the American Honda or Nissan plants. Now I have a question for y’all? Who produces better quality cars with high resale values? The automakers who deal directly with the UAW, the union who is supposed to make great cars, or Toyota, Honda… et al? We all know the answer to that one – and that was just one of the many reasons my wife and I bought and LOVE our Toyota Rav 4. (First “foreign” car she purchased – Mrs. Econotics is a recovering Chevyholic.) I put foreign in quotation marks because like many other car manufacturers on the list that are foreign owned they actually build the cars here in the USA. Ironically enough it is the big 3 that are cutting jobs here and producing their cars out of the US and in places like Mexico where labor costs are much cheaper than the UAW. Our Toyota is more American than her old Equinox!

Let’s dig into how the UAW causes GM and the Big 3 so many ills. If you’ve been watching your local news you’ve probably heard the term “legacy costs” thrown around. Legacy costs are a company’s obligations towards their current and retired workers health care and/or retirement/pension. GM and the Big 3 pay their workers roughly the same hourly wage as any of the other auto makers, about 28-32 dollars per hour. However the Big 3 are so burdened by their legacy costs (just do the math 73 – 30) that they cannot compete with the non US owned auto-companies 73 avg per hour worker compensation versus mid to high 40’s average for non Big 3 competition. Lastly, and although it is diminishing, the UAW has something called a “job bank” which is basically a place for their workers to go and be paid not to work. And although many of the UAW workers recently accepted a Big 3/GM buyout there are still workers in the job banks (about 1,000 by 2010). But that’s not all… The workers who actually produce for the Big 3 support their retired brethren, and/or surviving spouses to the tune of (at GM) a 4.16 beneficiaries per 1 worker ratio(see graph 2). Social security in this country is considered a problem because our ratio will get down to 1 retiree per 1.15 active workers… in the 60’s the social security ratio was 1 per 4! In essence what GM and the Big 3 want us to do is to further subsidize their retirees with a big fat bailout check.

Has progress been made? In 2006 the UAW and the Big 3 sat down to address the impossibly high legacy costs. The UAW restructured their luxurious agreement and cut costs down for the Big 3. As you can see in graph 3 the compensation per worker will be 62 dollars! That’s like downgrading from a BMW M-5 to a Cadillac CTS when you should be driving a $20,000 dollar automobile! They still won’t be able to compete w/ other auto manufacturers! At this point you’re probably thinking why we should further subsidize this failure of an industry… Here’s more fuel for that fire.

The Big 3 Business Model was and is terrible. However it wasn’t just the executives to blame for the union didn’t help, although their incompetence can’t be questioned. It wasn’t solely the Big 3’s fault that they couldn’t produce small fuel efficient cars for a decent profit. Because the Big 3 already started in the hole per car produced to the tune of - $870.00 (big 3 industry average) their incentive was to produce big cars with a high price-tag. For example if you are an exec and you know that you can only produce 500 vehicles per day and that your costs are much higher than your competition would you produce and try to compete with them over small affordable cars that would sell for 8-15 thousand but that the difference in quality would be significant and obvious? Or would you try and compete over cars that sell for over 20 and 30 thousand dollars where the quality differences are less obvious and not as significant? If you chose option 2 you should apply for a Big 3 executive position because you’d be no different than what they have now. The smaller and cheaper the car produced the larger the profit loss for the Big 3. The Big 3 had to rely on larger profits from big gas guzzlers, and big gas guzzling expensive cars, trucks and SUVs. Only too late did they change their business strategy and shifted towards a smaller fleet. And even then they keep losing market share (which btw some economists argue is good because they have an unsustainable market share). But most importantly the quality per dollar (car price) of their competition > their own quality. And while other auto-makers correctly interpreted the market earlier and with greater success and went either fuel-efficient and bang-for-your-buck i.e. Toyota, and/or specialty high quality luxurious vehicles ala BMW + Mercedes, GM and the Big 3 didn’t adapt to the market until they were bleeding (cash burn) billions of dollars per month. They failed. Or as many young people would say, what we have here is an “Epic Failure”…Pardon an analogy but the Big 3 tried to be a jack of all trades, in a market where individuals demand support a master of one or two products.

The Big 3 have done nothing to ensure that they will be competitive in the future. Why should we as tax payers subsidize them? It would be like subsidizing the horse and buggy industry in the early 1900’s. Yes in the short run the jobs of the Big 3 and their suppliers won’t be lost but in the long run we would just be propping up an inefficient industry. The market can’t work if we try to imitate the success of the miracle of Lazarus so why reward a massive failure? The Big 3 are attempting to take your money – keep prices high and quality low, and keep producing cars no one wants… why bail them out? If we only do what’s good in the short run we are going to feel significant pain in the long run.

I realize some of you are worried about potential job losses. As I pointed out in 1 out of 10 jobs in the US won’t evaporate if the Big 3 go under. For those who need some hard analysis read this article and here. Regardless of that though there are public policy alternatives to Chapter 7 bankruptcy! Chapter 11 bankruptcy let’s the Big 3 restructure their contracts, debt, and obligations, which means they can get out of bad contracts with labor, parts suppliers etc. The government can help them in Chapter 11 bankruptcy if need be, but at that point we would be helping those who are trying to help themselves – which ethically and economically is better for you and your tax dollars. If they don’t come out Chapter 11 (a possibility albeit imo an infinitesimally small one) then the other US auto industries who are foreign owned will increase production and partially save the former Big 3 suppliers. Job losses will occur, but it will not be as catastrophic as some shrill economic forecasters have predicted. In the long run we shouldn’t subsidize an industry that is not efficient. Why pay a worker to make rotary phones when he could be making cell phones? Long run importance has to trump short run implications.

What troubles me the most is that a bailout of the Big 3 is a bailout of the UAW and corporate management all of whom have underperformed, to say the least. Do they deserve our tax dollars? Not a chance. Would Chapter 11 be better for everyone in the long run? Yes. Would Chapter 11 be catastrophic in the short run? Not likely. It is part of the creative destruction process of capitalism. A process that is in dire threat due to possible government intervention.

So call your rep today and tell them NO BAILOUT – only prepackaged government aided bankruptcy which is the Chapter 11 option… and that is assuming the Chapter 11 will be executed properly.

I cross posted this on my other blog:

New Year’s Resolution for Consumers: Add a “Credit” Diet to a Weight Loss Commitment

The government has been non-stop in rewarding irresponsibility. A recession is the perfect excuse for the government to spend trillions of dollars propping up politically connected institutions. Capitalism goes further and further down the drain as the government continues to buy ownership in failed financial institutions. There is no end in sight to reckless government spending as more and more “needy” institutions line up for some cash. Currently, the government has not drawn the line on bailouts. In fact, there are plans for another $500 billion in spending. With China (one of our biggest buyers of Treasury bonds) enacting an enormous stimulus package of its own to the tune of $586 billion, one has to wonder if they will sell their Treasury bonds to finance their own government spending. Investors have turned to the U.S. dollar during these turbulent times, which can induce China to sell. However, upon sale of said securities coupled with insane amounts of government spending, it is very likely that the U.S. dollar will suffer a worse fate than it did in 2007. Don’t get used to those low gas prices just yet…..

The government refuses to learn from history. Government-injected spending has always prolonged the agony and has paved the way for bigger and more costly problems in the future. Over the years, “funny money” has severely weakened consumer purchasing power. What ever happened to the days of buying cars for cash, and a $20,000 mortgage? Answer: the Fed, World Bank and the International Monetary Fund (IMF) bailouts. In addition, these institutions were only interested in protecting large commercial banks. After decades of protection, now they are too big to fail! There’s a reason why small banks are virtually non-existent in your local neighborhood.

The IMF has been bailing out entire countries since the 1940’s. From Mexico to Hungary, Iceland, Pakistan, Tanzania, South Korea, Ukraine … the list goes on. As a result, the world has all of this “funny money” floating around. Currencies are devalued, global inflation sets in; and nations are riddled with debt. With each “crisis,” the price tag for bailouts grows. The Fed dealt with million-dollar crises in the early part of the 20th century. Today, the Fed is dealing with trillion-dollar crises, and the more artificial money the Fed injects into the economy, the more costly bailouts will be in the future.

Some economists are predicting a global financial apocalypse. I don’t believe the future is that dismal, but something does need to change because there will be a point in time where the Fed, IMF and World Bank will no longer be able to supply money to crashing economic sectors and nations. That time is coming soon – possibly in the next 20 to 30 years.

What is the solution? It’s certainly not the government. Rather than treat the disease, the government treats the symptoms. The remedy starts with the consumer. In the coming months, our new President and government officials are going to tell you, the consumer, to SPEND SPEND SPEND! Help is on the way. People in lower-income brackets may even get another $600 check from the government to spend away in order to “boost” the economy. It worked wonders last time, didn’t it? My condolences to all who thought Obama wouldn’t continue Bush’s economic policies.

There IS a solution. Consumers must go on a credit diet. People must learn to exercise some fiscal discipline. The government won’t do it, but consumers can lead the way. People have always been the solution to our nation’s problems, and that will not change. Consumer contractions in spending will force the market to react. Short-term deflation will pale in comparison to the long-term problems that lie ahead if consumers do not force the government to change its economic policy.

For those who have read my columns for some time, there is one message that is constant: BAD ECONOMIC POLICY. You, the consumer, can reverse course by changing your household economic policy:

1) Minimize credit card debt with an ultimate goal of paying off everything that is charged on a monthly basis. All credit cards charge a higher rate of interest depending on the type of card and individual risk. It is impossible to forge ahead when minimum payments comprise a portion of your monthly expenses.

2) Don’t buy too much house! The mentality that a big house = wealthy cannot continue. A home is NOT an investment when you will repay 3 to 4 times what it is worth in mortgage interest alone. In addition, state governments have raised property taxes to the point where one is basically “renting” their house from the government. Owning a home is still the best option. After all, why pay the landlord’s taxes through rent and forego a tax deduction? However, the key is to own a smaller home and avoid a huge tax burden and mortgage.

3) Take advantage of easy-to-use software programs that help with budgeting. Do not live beyond your means. If you are borrowing money for the family vacation, something is severely wrong.

In summary, the consumer needs to kick their addiction to credit. The government will continue to feed into the problem by propping up failed institutions for appeasing the hunger for credit. The only way to reverse course is for the consumer to overcome their addiction. It is a fallacy to believe that the supply of “funny money” is endless. What’s next? Quadrillion dollar bailouts? The government may have killed capitalism, but it cannot destroy the will of the consumer to prosper by making smart credit decisions. Opportunity will always be out there even in the most precarious situations.