Oh, I Wish I Could Find Something Other than Politics to write about

This is getting boring except for the fact that the stakes are so high if the Republicans win.

So, where is this going?  This is going to be a list of things that the Republicans stand for.

A failed Presidency.  I quote Senate Minority Leader.  "There is nothing more important than making Barack Obama's presidency a failed one."  What about the health of the economy requiring coherent government policy?

Repeal the Affordable Health Care Act.  What about the right of people with pre-existing conditions to get health insurance?  What about the cost of the uninsured who cannot pay bills that get added to the cost of those who can pay bills?  What about the $2000 bill for the uninsured that gets knocked down to $300 for the insured?

Allow anyone to own an automatic weapon.  Anyone noticed who seems to suffer when a crazy person gets their hands on an automatic weapon?  Innocent children, students and random adults like judges and congresswoman.

Ignore Science.  Evolution, Global Warming, and Vaccinations are theories that are optional to be believed.  I am sorry, I had trouble typing that because if there is one thing in this world that is proven over and over again and subject to reviews, it is scientific publications.  No one has more to win by disproving scientific theories than another scientist.  Galileo was proven right eventually, but ostracized from the church because the church did not believe the earth rotated around the sun.  But the fact that the Republicans want to promote themselves as being against things that the scientific community holds as valid and well proven does not stop Republicans from saying that what they believe is truth and science is the theoretical.  This was hard for me to write as it is foreign to my core education.  I am floored that no one in the Republican Party sees a winning line by supporting evolution as a truth.

Doubt Birth Certificates.  Well if it looks real then it might not be real.  See Ignore Science. or maybe it is See A Failed Presidency.  I don't know but there is no Republican candidate right now that is going to get me to vote for them over a ticket of Donald Duck and Goofy because they know more than this group of Republicans.

Reduce Tax Revenue.  Are we going to let the social safety net fail before we raise taxes to pay for the war on terror?  Which by the way President Obama is winning!

I am sure I could come up with more but I left my punch line two paragraphs up.  4 1/2 hours to play 14 holes today because the golf course was backed up so badly.  I gave up so I could walk the dog before dark.

What a Trade! Not sure which party is better off.

Rick Perry is a Democrat turned Republican because he thought the Democrats left his views unrepresented.

I am a Democrat turned Republican turned Democrat because the Republicans core values no longer represent my views.

What has happened to the middle in terms of elected officials?

Banker Must Be Part of the Solution

A common theme running through several news items should give bankers pause on their current tactics for arriving at a new regulatory world.

The country is clearly frustrated on any number of fronts with political economic environment. From the Tea Party, to the anti-Wall-Street crowd, to the silent majority that is hunkered down and fearful for the future, anger at The Establishment is higher than at any time since the Vietnam era.

Usually, I would defend the banks from having any obligation to help with the defeasance of such anger. After all, banks are private businesses that have an obligation to maximize returns for their shareholders.

But there is an obligation to insure the safety and soundness of the system for the allocation of credit and the smooth functioning of the financial markets. That is a critical underpinning for maximizing returns to shareholders.

I have no idea what either extreme really wants, but it is easy to identify the lack of employment and the inability to seemingly make progress on the housing front as interlinked issues that are frustrating the country and holding back progress.

Add to that a lack of contrition on the part of bankers and a failure to acknowledge, that whatever might be wrong with Dodd-Frank, an improved regulatory oversight function with transparency is a necessary part of the future. The "trust us" era is over. The "culture of risk management" that was supposed to protect everything broke down at Bear Stearns, Lehman Brothers, Merrill Lynch, Countrywide, Washington Mutual, and most astonishing of all, AIG.

So fighting regulation designed to reduce systemic risk places the industry in the position of being insiders undoing things that protect the average person. And it is average people who are angry.

I know this is too simple, but there are things the industry can do to help itself:

• By all means work to improve Dodd-Frank so that it is practical, but don't undermine the fact that strong regulation is needed to prevent another 2008. Right now the only thing people hear is the Republicans saying repeal Dodd-Frank. Working behind the scenes with the regulators to fine-tune regulation is the traditional manner, but the general population believes that the bankers are trying to pull a fast one on the general public. The industry needs to be clear what parts of Dodd-Frank are good policy that will avoid a repeat of 2008, and what parts need to be improved and what can be done to improve them.
• Work to get the GSEs to relax their rule forbidding people, who are current on their mortgage, but underwater on loan/value, from refinancing the entire current balance at current interest rates. The GSE risk is reduced because the payments are more affordable while the loan/value in unchanged. It would also help disposable income and should raise economic activity on the margin.
• Work with businesses that need bank credit to grow and hire employees. Do so in a prudent manner, but also do so with an attitude that is seen more commonly in a bullish economy.
• Provide any insights possible to regulators to try and reduce the volatility in the stock market from all this computerized trading. It is draining the average person’s confidence that they can be treated fairly with their investment plan for their savings.

Originally published in the American Banker "Bank Think" on October 13th.

It's a Global Economy and We are in Adjustment

Thomas Friedman presented today in his NYT column two contesting intellectual views of where the world is.

I did not spend the time to be able to critique them from my vantage point which I will present here.  I believe that we are in a period of economic adjustment and there is only so much that the government can do to help people and there has been much that the government could do to harm people.  Unfortunately, the latter has happened and we are in this current state.

My number one (and only) son will recognize that I have held this view for some time and have urged him to be sure his career is in the global economy so he can be on the more fortunate side of things that are yet to come.

40 years ago when I graduated from high school, the U.S. economic activity was primarily focused on US domestic activity with some exports.  Multinationals were the dominant firms but in each country they primarily manufactured for that country and export only within that continent.

Since then we have had a great transition to the point where companies manufacture with fewer people in larger plants in the place where the combination of labor cost and transportation cost are lowest to the greatest point of sales.  Global trade volumes as a result have exploded and those people who have the skills to work in this global economy are in the highest demand and garner the highest wages.

The domestic economy is proportionately smaller, but unfortunately, that is where the largest number of people work and therefore wages there are depressed by the basic laws of supply and demand.  There is little the government can do to help people transition from the domestic economy to the global economy as they must do this themselves through education and networking.  Or find a skill that is in demand in the domestic economy.

The downsizing of manufacturing has been the primary location of decline in domestic incomes.  Over time, foreign incomes will rise and some of these jobs will transition back to the US to overcome unfavorable costs of transportation.  However, this will take many years to happen in size.

This is where the government did a lot of harm.  It was not apparent at the time, but cutting taxes and borrowing the war on terror, combined with an insufficiently regulated banking system, created a housing bubble that when it burst crushed the domestic economy and those who work in it.  Now the government has little flexibility to improve the domestic economy.  In fact, the only policy that would have any impact beyond marginal impact on growth is massive repair of infrastructure over a 5 to 10 year period so projects can be planned and worked on.

Where does this leave people in the domestic economy?  Well angry as shown by the Tea Party, the 99%'ers demonstrating in the major cities, and the 53%'ers on Facebook who are angry at the 99%'ers.  Republicans are mad at the Obama Administration and Democrats are mad at the Republicans for not compromising and allowing policies to improve.  Almost everybody is angry with somebody and I am not excepted from this as my regular readers know.

But I digress.  My point is to make a good living you need to be in the global economy or in a part of the domestic economy where there is demand for your skills.  The private sector has gone through an enormous contraction and no longer provides enough revenue for the public sector to continue without reducing costs.  People will need to migrate from the public sector to the private sector in the aggregate.

And lastly on this point, the cost of health care is burying the economy hurting employment in both the private and public sector.  Not implementing the Affordable Health Care Act, Not working to control Medicare and Medicaid expenditures through compromise on various issues is the biggest obstacle, after housing, to improving the domestic economy.

Someone Agrees with me

From a Bloomberg.com series of excerpts on the different nations within the boundaries of the U.S. written by Colin Woodard.

His Conclusion:

"One thing is certain: If Americans want the U.S. to continue to exist in something like its current form, they will need to respect the fundamental tenets of our unlikely union. It can’t survive if we end the separation of church and state or ban the expression (or criticism) of offensive ideas. We won’t hold together if presidents appoint political ideologues to the Supreme Court, or if party loyalists try to win elections by trying to stop people from voting. The union can’t function if national coalitions continue to use House and Senate rules to prevent decision-making on important issues."

"Other sovereign democratic states have central governments more dysfunctional than our own, but most can fall back on unifying elements we lack: common ethnicity, a shared religion or near-universal consensus on many fundamental political issues. Our constitutional order -- an arrangement negotiated among the regional cultures -- assumes and requires compromise in order to function at all."

"And the U.S. needs its central government to function cleanly, openly and efficiently because it’s one of the few important things that bind us together."

Musings on a Tuesday Night

All from the Newshour on PBS which is now in winter mode up here in Vermont.  That means I watch 48 seconds, have to flip to another channel and then back again.  I guess I should explain that we are still watching a White Plains feed rather than a Burlington feed and why that matters is a complicated story about the tilt of the planet and the satellite and where they aim Channel 13 from NYC.  Not to mention why we watch NYC TV rather than BTV TV on Direct TV.

1st.  Why aren't the Republicans renouncing the Koch Brothers for making $$$ off of trade with Iran?

2nd.  The Physics guys who won  the Nobel Prize today understand why the universe is expanding and proved it.  I hope they find other great insights and are rewarded for it.  I sure do not understand but I do try to understand.  Jason Wyman please call me.

3rd.  The people of Liberia are trying to improve their selves after a horrendous era.  I wish them success.

Let's Get Real

I will hold both Republicans and Democrats responsible for this type of unwillingness to deal with the hard reality that we need shared sacrifice to balance the budget.

Seriously, do energy companies, beer brewers and horse farms need tax breaks?

http://www.nytimes.com/2011/10/03/us/lawmakers-want-to-end-tax-breaks-if-they-can-agree-what-they-are.html?src=recg

The E.P.A. and Texas

Governor Perry wants to abolish the E.P.A.  Well then who would look after air, water and soil quality i's n the wake of yesterday's chemical fire south of Dallas?

The E.P.A. was on the scene in a matter of hours starting their gathering of facts.  Would Governor Perry prefer that each state maintain such expertise?  That is not a way in which to gain economies of scale and efficiency in government!

Where Does the War on Terror Go From Here ? Part II

Post Script:  Christiane Amanpour put out a piece indicating that what I believe cannot work until Pakistan is no longer supporting the Taliban and other Terrorist groups.  Furthermore she suggested that we might have to invade Pakistan to do so.  Well, we have shown limited ability to facilitate nation building to date and I do not believe that we should proceed down that path as Pakistan is limited in its ability to govern itself already.  It would be prohibitively expensive for the U.S. in both $$$, troops and fostering more Muslims to take us on in the form of Jihad.  Not to mention that Pakistan has nuclear weapons that it could use on us.  I am shocked that Ms. Amanpour could suggest something like this without putting some caveat in there.

News Flash

Thank you Al Hunt for this.

The Heritage Foundation, a conservative think tank, helped Mitt Romney design the current Massachusetts Health Care Framework.  Since this is the base for the Affordable Health Care Act (derisively known as "ObamaCare" by the current group of Republicans), the Heritage Foundation designed the Affordable Health Care Act.

Yet, somehow a conservative designed health care framework aimed at reducing costs is a socialist design according to today's Republicans.

Where Does the War on Terror Go From Here ?

Unfortunately, due to the fact that the Bush II administration did not pay for the War on Terror with current revenue during their time in office, then answer to this question cannot be divorced from the current fiscal dilemma.

Fortunately, the success of the military and the CIA with the blessing of the Obama administration has had great success in achieving our primary post 9/11 goal of keeping the country as safe as possible.  With yesterday's elimination of Anwar al-Awlaki and two of his key lieutenants the world is a safer place today. This now brings the near total elimination of experienced leadership to Al-Qaeda.  If only we could find Zwahari (sp?  The Egyptian hiding in Pakistan).  I note the use of drones, airpower and covert people in this success.

This does not mean we can let our guard down, but it does mean we need to reexamine what we can and cannot achieve with military might and our intelligence capabilities.  Monitoring bad guys is necessary.  Killing them is necessary since they want to kill us.  Nation building appears not to be necessary and is perhaps beyond our means both in capability and cost.

Now I do not mean we should simply abandon Iraq and Afghanistan in a matter of weeks or months.  We should leave them with as much capability to govern themselves effectively as we can, but we need to recognize what they are truly capable of becoming.  Iraq has a shot at being a Federated state with a national military.  But they will be a violent place while the politics of all this are being worked out.  We are on a path out of there that the Iraqi government approves of and I don't think we can aim for much more.  They are a sovereign state and not likely a source of terror plots upon the U.S..

Our use of drones successfully in Yemen, Pakistan and Afghanistan show that we do not need troops on the ground to fight terrorists.  So what should be our goal in Afghanistan?  It no longer is the War on Terror.  It is to somehow leave them as a functioning nation-state.

However, there is a series of article on Bloomberg that started Thursday that shows even the U.S. in not a nation-state but rather a federation of nations within the United State of America.  The key distinction between nations and states is that the former is a set of common culture and values while the latter has clear borders and the powers of government.

Well Afghanistan has multiple nations within their state and the nations do not get along.  Furthermore, Afghanistan does not have a natural source of revenues for the country except for Opium Poppies.  They do have mining potential but you need some semblance of law & order for that to be achieved.  I am not an expert on how to achieve law & order in Afghanistan but I do believe our military has the best insights in how to achieve what can be achieved.  What they need to be held accountable for what is the best way to achieve this, how much will it cost and reminded that we cannot be there for as many years as we have been in Korea.  Our troops are basically safe when in Korea.  They are not safe patrolling Afghanistan.   Leaving our troops in a position to be attacked through Acts of Terror does not constitute attacks on us in the manner that 9/11, the Underpants bomber or any of the other Al-Qaeda methods did.

We need to declare victory for the War on Terror in Afghanistan and leave in a defined manner.  Our troops safety and our national finances depend on that.