Sunday, September 20, 2009

A strong economy is what I want

The recently passed stimulus bill is a symptom of our economic problems. Because we refuse to reduce government spending, we borrow money from foreign governments and inflate the money supply (and pretend there is low inflation) to fund our government, our illegitimate war and consumer spending. Instead of our government and citizens admitting their collective addiction to overspending, the government, at our urging, has decided to rain dollars down upon us to cure our economic ills. Of course, other spending will not be reduced; so, thank Communist China for your check.

Our economy and our federal, state and local governments are in trouble because we believe that we can base our economy on consumerism, and somehow believe that contrary to our past and every other emerging economy, we can prosper without having a vibrant manufacturing sector. In other words, we believe that saving, investment, capital formation and production can be replaced by borrowing, spending and importing. Meanwhile the dollar is sinking (meaning those foreign-made goods will no longer be as cheap) and our trade deficit grows ever larger as we pretend that the value of the dollar has no relationship to the cost of imported oil.

Of course, what was deemed to be a positive impact of these policies, the recent phony real estate bubble economy, is, in fact, a symptom of the problem. The policy of inflating the money supply by maintaining artificially low interest rates, combined with lax lending standards and the perverted use of ARMs, interest-only loans and negative amortization ARMs helped feed the hunger of slobbering speculators, while we either jealously watched or joined in. Now, all of those involved in the “party” want to be bailed out with principal reductions, interest-rate freezes and the like. So, we want to reward those who engaged in speculation and took a risk or who borrowed against equity that really didn’t exist, while those who saved for consumer purchases and purchased homes based on sound financial principles pay for it, like all unnecessary government debt, for years to come.

I have a dream that one day we will return to a “real” economy, instead of one based on the exploitation of illegal aliens, domestic and foreign sweatshops, ridiculous easy credit, massive personal and government debt, a devalued dollar, phony government inflation and employment data, financial machinations and trade deficits. I only hope that it happens by choice, otherwise, it will be a long painful transition back to sanity.

Water company - more legal theft -only in America

Government is full of self-dealing profiteers who look out for themselves and their friends under the guise of civic service. When you want to know why a financial disaster occurred, the old adage of "follow the money" will answer all of your questions all of the time.

Anyone with any sense knows that is not sound business practice to have 60%, more or less, of bond debt in variable rate bonds. The question is who benefited from having the Water Company carry this amount of variable rate debt. Well, just as with adjustable rate mortgages that homeowners were suckered into (or suckered themselves into), the lawyers, brokers and advisers rake in greater fees for these variable rate bonds. While the savings are always touted as the reason to use variable rate bond debt; the savings are illusionary because of the high risk involved. These advisers always indicate that it can always be refinanced, but of course sometimes it can not be refinanced. Additionally, in this instance, the water company always has the ratepayers to bail them out, so why should they worry.

Someone, besides the ratepayers, needs to be held accountable for this budgetary malfeasance. To find that someone, just “follow the money.”

Gas Prices - July 2008

The recent run-up in gas prices is a result of 1) increased demand 2) a crazy war, 3) inflationary monetary policies of the Federal Reserve and government generally, 4) the falling dollar and 5) commodity speculation. The most recent run-up in prices from $3+ to $4+ is mostly the work of speculators, as their speculative dollars have fled the phony housing market. Until the speculators are distracted by another bright, shiny object, gas prices will continue rising.

CIB - legal theft - only in America

Here we go again, the CIB, which plays a central role in the Downtown Ponzi scheme, needs a cash infusion from taxes and fees to keep the scheme going. Even before other elements of the scheme are fully realized (Convention Center expansion, J.W. Marriot), consideration is being given to sucking every forecasted dollar that can be shaken loose from these entities, by diverting any potential revenue to again prop up the financial machinations of the CIB and this Ponzi scheme. When will the insanity stop? Every dollar sucked into this bottomless pit for the amusement of some and the wealth of others is money diverted from either true needs of the public sector or potential growth and expansion of the “real economy” of the private sector. Tourism is a minor part of the overall economy. The idea that 66,000 jobs, as stated by some, will be severely impacted or disappear if we stop propping up the endless downtown boondoggle is ludicrous. First of all, those 66,000 jobs can not be and are not dependent on the downtown Ponzi scheme. In 2006, according to Stats Indiana (U.S Bureau of Economic Analysis), there are approximately 50,000 workers in Accommodations and Food Service in Marion County and 12,000 in Arts and Entertainment and Recreation, representing only 4% of the earnings of the Marion County workforce and 9% of the employees. The only result that would occur from not continuing to prop up the CIB would be the redistribution of any discretionary recreational dollars to other unsubsidized entities like our privately funded zoo.

While for some strange reason, the zoo can survive without tax dollars and continue to expand; supposedly it is unthinkable for the downtown convention and tourism industry to build its own facilities for this minor segment of the economy. If a convention center is necessary to facilitate meetings within a city, there is no reason that a consortium of hotels could not build, own and manage such a facility. Taxes should play no role in creating such a facility. And, of course, the same applies to sports facilities whose prime purpose is to enrich the wealthy team owners and leagues who have held our cities and our elected officials hostage for decades. This is particularly important since every reputable study (not the propaganda offered by the entities stealing your money) indicates that pro sports have little or not economic impact because for many reasons, including the substitution effect (people just spend their discretionary recreational dollars elsewhere). If their business model supports building a facility to enhance their revenue, then they should do it, with the help of their respective monopolistic leagues; it should not occur by extorting money from taxpayers. When taxes rise to increase the amount of public funds used for non-essential items, there is a decrease in the amount of public money available for essential services (basic infrastructure) and a reduction of private money to invest or spend in other ways that strengthen the economy. What results is the never-ending funding of a slew of projects that becomes accepted as standard operating procedure instead of clear evidence of misplaced priorities. If a city really wants to attract people to its city (to live and visit), it has to become a better city, but to become a better city it has to know what it is and what it wants to be and what it can be. It can not pretend to be something it is not without forever paying the costs.

Gas prices

Here we go again. The speculators, likely using inflationary Obama money (our tax dollars - yes, we are getting reamed at least twice), are causing oil and gasoline prices to rise. The economy is not really recovering; in fact, any optimism is just a mirage and a prelude to a further collapse. Most assuredly, this ridiculous rise in gas prices while inventories are high, demand is still relatively low and unemployment is rising is not justifiable. Yet we are supposed to believe that the 35% rise in average gasoline prices in Indiana in the last month is reasonable. We are getting ripped off by the same speculators and easy money crowd who drove up gasoline prices and house prices in the last decade. Are we going to sit by and allow it to happen again, even temporarily? Of course, many people have put their faith in Obama to solve all of our problems, not realizing that his release of trillions of dollars into the economy will hurt more than it helps. We, as a nation, are engaging in the same behavior as the speculators, by believing that we can quickly return to those heady days of rapid asset gains (asset bubbles actually). Well, evidently the speculators are correct, because no one seems to be slowing them down.

Response to IBJ Editorial: It's time to crash incentive party

The subtitle to your editorials says it all - "Many deals would happen anyway." I have been saying that for years and no one listens. Real economic development results from attention to details like infrastructure improvements (police, fire, roads, schools, residential, commercial and industrial building stock) as well as a fair, even-handed regulatory environment. But that nuts and bolts stuff requires real work. Wouldn't it be much better if no abatements were granted, and the city focused on the tasks of encouraging real development instead of propping up downtown with a pyramid scheme of abatements and TIF's, with each abated project requiring a subsequent abated project to succeed. Or wouldn't it be better if an existing business didn't have to compete against a similar business that garners abatements only because it is new to the neighborhood? And it always seems that everyone forgets that development requires services and if taxes are abated, less money is available to provide those needed services.

Government perpetuates itself by always solving problems with solutions that are not really solutions. So, of course, either the problems persist or the "solutions" create new problems, which government proposes to solve with more half-baked solutions.

Government officials never want to concede that there are some problems that they can not solve.

So, in the downtown area, they have created a pyramid scheme that can only be maintained by successive subsidized projects designed to prop up, support and maintain the previous (and many times extended) subsidized businesses (Hoosier Dome, Convention Center, hotels, expanded convention center, hotels, mall, expanded convention center, hotels, new arena, hotels, new stadium, hotels, expanded convention center, hotels, etc.). It is all a house of cards that would eventually collapse without further subsidy. They know it, but won't admit it.

Of course, when government largess is made available, someone will always be available to take it, but willingness to participate in a pyramid scheme does not validate it as a viable or appropriate method of development.

Most pyramid schemes collapse. Unfortunately, government can levy additional taxes, borrow money and use all sort of financial voodoo to maintain the pyramid regardless of its long-term impact on the city's core mission or viability.

My question is whether you are going to just write one editorial or are you going to continually press this issue to the government officials in this region as well as with the state and federal government? They have no intention of changing their ways. There needs to be a revolution in the conduct and operation of government and not just a continuation of tired sound-bites about public-private partnerships.

Sign of decline, sign of the times

The laurel on Aug. 22 about the Elks Lodge demolition was one of the most mind-blowing things that I have ever read.

Saving the Elks Lodge building is not just about saving some old building; it is about saving infrastructure. Well-built and well-maintained buildings are an important segment of our infrastructure.

Just as it is a travesty to permit sound residential structures to deteriorate or structurally sound, aesthetically significant religious buildings within Johns-town’s neighborhoods to be demolished, it is also problematic to allow structurally sound commercial-institutional buildings, without a smidgen of regret, to be demolished for a parking lot.

The destruction of sound infrastructure for a parking lot is a sign of decline that sets a bleak precedent for the future of downtown Johnstown and its neighborhoods. There is no such thing as a future without a past.

Stop taxing interest income

Instead of a socialist bailout of the banking, consumer and Wall Street hedonists, the Congress should have taken small steps in restoring a sound, functional economy instead of trying to patch, like a blown tire, a public and private economy based on spending, borrowing and massive debt.

One small measure that could have been taken would have included the elimination of taxation on all types of interest income. Saving should not be discouraged, just as excessive debt should not be encouraged. However, excessive debt has been encouraged and arguably even celebrated over the last 40 years since the Federal Reserve began tracking credit card debt, with the lone exception being the elimination of consumer loan interest deductions in 1986. But, not to worry consumerists, that deduction was soon replaced by a rapid increase in home equity loans, whose interest is generally deductible, by the deliberate public and private policies and strategies to inflate housing prices and promote debt over the last two decades.

Why should someone who strives to save $20,000 for a down payment for a $100,000 house ($80,000 mortgage) be penalized by taxation, while someone else who saves nothing for a $100,000 house ($100,000 mortgage) can theoretically deduct all of their interest expense from their taxes? Isn't it about time we reverse strategies and encourage saving and thrift and discourage excessive debt and rampant consumerism?

Our economy does not need illegal aliens

Isn't it about time that the pro-illegal alien invasion advocates finally admit that they were lying when they claimed that illegal aliens were necessary for the economy? The illegal aliens were part of the low-grade fuel used to sustain the false economy and subvert the real economy by lowering the initial risks and raising the profits of those employers intent on profiting from our bogus economy. Meanwhile, billions of dollars, which otherwise would have circulated through our economy, were exported to foreign nations, leaving us with millions of unemployed illegal aliens and their illegal alien children who require, now more than ever, government services. Importing a large number of low-wage, poorly-educated, low-skilled illegal aliens was not and never will be the proper way to strengthen our nation. Those who support continued illegal immigration instead of demanding that, at a minimum, our existing system of laws be properly enforced, including federal laws prohibiting "sanctuary cities," and prohibiting in-state tuition to illegal immigrants, without the same being provided to all U.S. citizens regardless of residence (So, if there is an out-of-state college that you wish to attend that permits illegal aliens to have in-state tuition, you should be demanding that the same charge be applied to you). Ronald Reagan gave us the 1987 amnesty, as part of Comprehensive Immigration Reform, yet our nation has refused to enforce or update its provisions. Another amnesty would be disastrous for this country as it will be clear that we will allow anyone under any circumstances to enter this country. And what we always seem to forget is that many of the people who illegally enter this country have an occupation that is clearly not in our national interest – Crime. Just visit the gang-infested areas of Los Angeles, San Diego, Dallas, Phoenix, Houston and Atlanta if you want a preview of what to expect.

Obama sucks

Instead of a socialist bailout of the banking, consumer and Wall Street hedonists, the Congress should have taken small steps in restoring a sound, functional economy instead of trying to patch, like a blown tire, a public and private economy based on spending, borrowing and massive debt.

One small measure that could have been taken would have included the elimination of taxation on all types of interest income. Saving should not be discouraged, just as excessive debt should not be encouraged. However, excessive debt has been encouraged and arguably even celebrated over the last 40 years since the Federal Reserve began tracking credit card debt, with the lone exception being the elimination of consumer loan interest deductions in 1986. But, not to worry consumerists, that deduction was soon replaced by a rapid increase in home equity loans, whose interest is generally deductible, by the deliberate public and private policies and strategies to inflate housing prices and promote debt over the last two decades.

Why should someone who strives to save $20,000 for a down payment for a $100,000 house ($80,000 mortgage) be penalized by taxation, while someone else who saves nothing for a $100,000 house ($100,000 mortgage) can theoretically deduct all of their interest expense from their taxes? Isn't it about time we reverse strategies and encourage saving and thrift and discourage excessive debt and rampant consumerism?

Sunday, February 15, 2009

Too much stimulus; too little reform

The first rule in examining government is that one must expect the lie and then dissect the lie.  In dissecting the lie, the old adage of “follow the money,” will lead one to the correct answer; of course, assuming that one can sort through the maze of subterfuge. The previous and current administrations, as well as congress have been continuously lying about the need for stimulus spending.  We have had three stimulus bills within the last year. Should not we be stimulated by now?  It has not worked because it can not work.  Excessive spending, credit and debt, combined with financial machinations and basic greed and gluttony was and is the problem.  How can the solution be the same as the problem? 

 

Only in the bizarre world of government that must always pretend to solve problems even when government officials admit that they do not know how to solve the problem.  So, they do what they do best, spend taxpayer’s money.  President Obama is not guaranteeing that this stimulus will work, because he doesn’t care if it works as long as he and Congress can keep bribing the American people with more pork-laden “stimulus” bills funded by borrowing and printing money, while dangerously inflating the money supply.  Because he has been anointed as our savior, by himself and others, he has been able to deceive us more easily.  It was fairly obvious that trickery and lies would rule the day when his tax-cheat treasury selection, Mr. Geithner, supported wholeheartedly by President Obama and confirmed by the Senate, evidently, because Geithner is the only person intelligent enough to rescue us from our financial morass. 

 

Well, it is pretty clear to me, not that it was not before, that all the talk about hope and change is a smokescreen for more of the same.  The only change occurring is the temporary (hopefully) reestablishment of the Democratic Party’s power; instead of change that would eliminate our corrupt, nonsensical borrow and spend economy.  President Obama is continuing to follow and expand on the previous policies of the last several decades that will eventually lead to the economic collapse of this country. We will continue to borrow and spend, import cheap illegal labor (assured without the extension of E-verify) and export jobs, causing a continued devolution of the country’s economy to the lowest common global denominator.  We will end up being no more than a second-rate country, if we are lucky, with the majority of citizens being dependent sycophants.  Yes, our country will be an Abomination unless we realize that the Emperor has no clothes!

 

The Chamber of Commerce of ?

Well, it is really interesting that the Chamber of Commerce thinks that it would be too burdensome for employers to follow the law and ensure only citizens or those non-citizens with authorized work permits are hired.  It appears that the Chamber would rather have the residents of Indiana and citizens of the United States of America to continue to be burdened by illegal alien workers.  These illegal alien workers were encouraged to come here to work in the false economy that expanded to its unsustainable limit until it crashed under the weight of the massive debt powering it.  The illegal alien workers recruited by unethical, criminal employers were the fuel powering this false economy that unfortunately is trying to be resurrected by President Obama and the phony stimulus package proffered by the silly men and women of Congress. The Chamber of Commerce should realize that the Legislature is actually empowering employers by requiring them to use E-Verify to reestablish a real economy instead of continuing to pretend that illegal aliens were, are or will be a necessary part of our economy.  If we do not understand that all of the gains made in the last six years were essentially a mirage, we will never understand that without the labor of the illegal aliens, our national Ponzi scheme would have not been possible.  Let’s not let the few who profited from this Ponzi scheme try to refuel it with illegal alien labor to the long-term detriment of us all.

California Love!

Many of the laws do need to be fixed because our legal immigration process has been bastardized into a plethora of special favors that do not constitute a lucid policy. But first, I reject the premise that illegal immigrants were, are or will ever be needed for the economy; now they may have been desired, by some, for the false economies that have been constructed and expanded (and destroyed) over the last two decades, but they were not necessary for steady appropriate growth. Our existing immigration process, with modifications, if appropriately staffed and enforced would easily accommodate any of our economic or general societal needs, if necessary. Now, since I don't trust our government to follow through on anything they say (other than invading sovereign countries under false pretenses), I will not accept any sort of comprehensive immigration reform proposal until the legal immigration system is reformed in a manner that clearly indicates to immigrants and citizens that the United States is serious about immigration standards and penalties for noncompliance. Twenty years ago, despite the problems related to illegal immigration, I came to love California, particularly Belmont Shores in Long Beach (despite the gang signs flashed at me by a supermarket worker because I drove around the block twice and made eye contact), because of the diversity (a term I don't use to describe anywhere today because of how it has been co-opted by namby-pamby multi-culturists). During my most recent visit (to Oakland of all places), that same feeling of contentment swept over me as I renewed my love affair because of my interactions with the diverse peoples of California. But I would submit that California's pluses are due to legal immigration and its many minuses are mainly due to illegal immigration. Illegal immigration creates economic mercenaries who are only here for the money and not for the love of the U.S. and what it represents. If we do allow people to flood into our country as economic mercenaries, we will reap what we sow.

Ilegal is illegal

Just because government abdicated its responsibility doesn't mean that behavior that violated the law should be forgiven. People get cited for violating the law all the time regardless of how long their illegal activity has occurred. It is patently unfair to American citizens to force them to accept that people of all types, including some of the most virulent criminals will become legal citizens and a permanent scourge on our society. I for one don't engage in criminal behavior just because government turns a blind eye to it or doesn't have the resources to enforce these laws. Frankly, I have no sympathy for citizens who married illegal aliens and had children with them. As far as I am concerned the entire family can all take a hike across the border. No one made them marry an illegal alien. And Congress could clarify that an illegal alien child is an illegal alien and not a citizen. Clearly the children of foreign diplomats who enter the country legally are not citizens, so how in the hell are children of illegal aliens citizens. It makes no sense. There is no other country that interprets or includes in its constitution a provision for citizenship for anyone who happens to fall across the border. Furthermore, when the need for these workers was based on the illegitimate, fraudulent economy of the last two decades, the last thing this country needs is the permanent legalization of poorly educated illegal aliens in addition to the existing mass of the those wholly uninterested in improving themselves. When many of these illegal aliens have children who go to schools in environments that are not conducive to learning, resulting in an unnecessary expansion of the underclass, you have a recipe for disaster. A party that panders to Whites, Hispanics, Blacks or Gays, etc. is not a party that interests me. Only a party that relies on real conservative principles instead of phony symbolism will draw my interest.

Iraq War

Although, I am not familiar with some of the particulars included in the letter written by Mary J. Callahan, published on October 10, 2008, I totally agree with its general theme. Regardless of the obscene reason(s) this administration had for invading Iraq, the fact remains that over 4,000 of our young men and women have died, with many more thousands being severely injured and maimed. This is a tragedy that never should have occurred. Meanwhile, from the very beginning, besides providing lip service, it does not appear that any real effort was made (or is being made) to catch Osama Bin Laden, supposedly Public Enemy Number One. And for some reason we have tolerated this behavior as we take partisan sides and react to fear-mongering. Meanwhile, we happily went shopping (until recently) as if nothing has happened. At a minimum, Bush should have been impeached for his lies, and in some way everyone involved should have to pay for their horrendous crimes against the people of this country.

War

War is a failure of humanity to achieve its goals by other means.

Sage of Omaha

Despite all of the love showered on the Sage from Omaha by the media etc., he manipulates federal, state and local regulations and officials for his benefit. Of course, he is not alone. Despite all of the blather about fair and free markets, no such animal exists, and most extreme riches have resulted from immoral and unethical behavior if not downright fraud and thievery. Don't get me wrong, intelligence and hard work is involved, as it takes a lot of effort to continuously engage in this type of behavior every day of one's life.

Stop taxing interest income

Instead of a socialist bailout of the banking, consumer and Wall Street hedonists, the Congress should have taken small steps in restoring a sound, functional economy instead of trying to patch, like a blown tire, a public and private economy based on spending, borrowing and massive debt.

 

One small measure that could have been taken would have included the elimination of taxation on all types of interest income.  Saving should not be discouraged, just as excessive debt should not be encouraged.  However, excessive debt has been encouraged and arguably even celebrated over the last 40 years since the Federal Reserve began tracking credit card debt, with the lone exception being the elimination of consumer loan interest deductions in 1986.  But, not to worry consumerists, that deduction was soon replaced by a rapid increase in home equity loans, whose interest is generally deductible, by the deliberate public and private policies and strategies to inflate housing prices and promote debt over the last two decades. 

 

Why should someone who strives to save $20,000 for a down payment for a $100,000 house ($80,000 mortgage) be penalized by taxation, while someone else who saves nothing for a $100,000 house ($100,000 mortgage) can theoretically deduct all of their interest expense from their taxes?  Isn’t it about time we reverse strategies and encourage saving and thrift and discourage excessive debt and rampant consumerism?

 

 

Support restrictions on employers of illegal aliens

Our government is a nightmare. Despite the fact that are borrow and spend economy and dysfunctional regulatory scheme created a false, unsustainable economy, our so-called leaders persist in creating more public debt and encouraging more of the same ridiculous private spending and borrowing. The last thing we need is a tax credit to buy houses or to encourage the construction of more houses. The housing industry does not need to be revived. It needs to rest until the existing inventory can be absorbed. But that takes patience. Yes, the government should extend unemployment benefits, etc. But anything beyond that, including the current past and future stimulus bills are recipes for disaster. We naively believe that we can't go the way of Argentina, but with the current entitlement mindset, it is not a matter of if, but when.