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Thursday, January 24, 2013

Anhiliating Republicans

So Obama is going to anhiliate the R’s.  That should come as no news.  This guy doesn’t govern, he just campaigns.  He didn’t negotiate with the R’s in Congress, he just uses rhetoric to scold and berate Congress. He proposes no serious budgets, but lambasts the Republican House which actually does have a budget.  If you want to work with somebody, you don’t insult them.  But he insults not just Republicans in Congress, but Netanyahu and everyone else who disagrees (you bitter clingers). 

            How then, do the R’s counter this rhetoric and avoid having Obama and the Pravda media parrots kill conservatism as an alternative? (What they are doing is swaying the minds of disinterested and low-information voters with catchy phrases and sound bites.) The answer has to be to fight back, put a label on the liberals.  First point: Congressmen won’t do this.  You get nowhere in a legislature by labeling and offending the other side. They are not of that nature.  Likewise governors and state legislatures have to get along with each other.  So it has to be done by the local party, opinion writers, Tea party, and talk radio.   They can speak their minds.  Point two: Obama is effective in speaking in phrases and sound bites.  He talks about, “Congress must pay our bills” as if he’s the only responsible person in the room.   Bipartisan to him means my-way-or-the-highway.  R’s must counter his effective sound bites and phrases.  Sarah Palin has this ability.  When she talks Death Panels, the phrase sticks and everyone knows how it aptly describes limited health care under Obamacare.  Rightfully the left fears her. She pre-empts their game. They are still trying to destroy her image, long after she has become a minor player in politics. 

            Opinion makers should start by calling Obama exactly what he is, a National Socialist or a fascist.  Most Americans don’t know what a fascist is but they know we fought a war against it.  Fascist is an incendiary term but needs definition. So you pose a question.  “What kind of government do we have that businesses have to be in cahoots with government if they want to succeed?  Dodd-Frank banks, GM, GE? What kind of governmental system do you call that?  When Schindler says he had to stop making pots and pans and do what the government wants or his business wouldn’t survive?  What do you call that? It’s fascism!” Fascism is when the government takes over or controls just enough businesses  to keep everyone under control.  When a company owes its soul to the government, like “you didn’t build that”, but has to be be a piglet sucking on the tits of the big sow government, what kind of system do you call that?  That’s fascism, National Socialism!

            When the leader of a country disregards the constitution, uses executive orders to govern rather than waiting for Congress to pass a law, when bureaucrats are instructed to re-imagine what old laws might mean and implement draconian regulations no one ever heard of, what kind of government is that? Isn’t that Fascist dictatorship! When people are required to buy something their faith forbids or hire someone whose beliefs make mockery of their organization’s beliefs?  When the leader talks school children and security, he wants gun control but won’t touch mental health issues, what is that? To possess a gun to defend yourself is empowerment.  To have your means of defense taken away is disempowerment.  To have local citizens unable to regulate mental health patients is to disempower the citizens and their safety. When people are disempowered and have only hope and security in government, what do you call that?  Fascism!

            When freedom means being able to wear a tee shirt with an obscene hand gesture, or freedom to print pornography, that’s only artistic freedom.  True and complete freedom means the chance to be whatever you want to be. Dinesh D’Souza says that people the world over recognize this true freedom as the precious thing America has had like no other nation.  But what do you call it when you’re a hog farmer who is forbidden to change to dairy by a government agency?  What do you call it when you want to sell soda pop in cups with lids and straws that people can carry around all day, but government tells you you can sell only a tiny cup?  That’s fascism! 

            What do you call it when the leader of a country seeks to demonize a small indefensible group as the scapegoat for all our problems? Jew bankers, Republicans in Congress? What system is it that puts draconian rules on all the people, but hands out exemptions to the ruling elite and political friends-- unions with ‘Cadillac medical plans’ and 1400 special groups getting exemptions from Obamacare? When the leader keeps a “shadow government” as Mussolini did with unapproved-by-congress czars? Fascism!

            If government uses highly questionable science to advance policy instead of waiting for the science to be settled—superior Aryan race theory, exterminating those with genetic weaknesses, global warming theories-- what system is that called? When leaders are chosen, not by the solutions they offer, but people blindly flock to an unknown (Peron, Mussolini, Hitler, Franco) charismatic leader by image and emotional appeal—he’s so German, he has klieg lights and parades of followers, he’s so cool, gives his speech in a huge stadium with Greek columns, the other guy mistreats dogs and puts women in binders—what kind of system is that?  Well, it is a system that sucks people in, and by the time they realize what it really is, it’s too late. Are we ready for fascism or do we speak truth to it?


Wednesday, January 16, 2013

Gun Control

I started hearing about the President’s gun control Executive Actions and I think a number of them are good.  F’instance, #11 sounds reasonable: “Hire an ATF director.”  It really would be nice to have one over at ATF. If nothing else, he could hand out desk calendars and make sure the coffee is made.  Making a DOJ report on stolen guns to local police would also be a good idea.  Why hasn’t anyone thought of that before?  But then there are some others that don’t make a lot of sense.  He wants the Center for Disease Control to study video games.  Why not FCC?  Maybe you can catch bubonic plague from a video game. At any rate, I wouldn’t be expecting anything too serious about video games—perhaps that is on purpose. I am hearing the experts on mass killings say that they are consistently the work of disturbed individuals who practice their atrocity with very violent video games and then use weaponry.  If so, why wouldn’t we consider the same thing for video games as we do for guns.  We could require registration, background checks, hefty fees and safety courses for purchase of violent video games. Actually, a realistic strategy might be to restrict certain violent video games and not let them be sold to people under 21.

            Okay, so I don’t know much about guns.  Is a potato gun a gun?  What about Obama’s #16 where Obamacare doctors will have to ask about what guns you possess?  I suppose I could tell the doc that I have several unregistered nail guns.  And the biggest one is an automatic one.  Set it on bump-fire and you can shoot nails like heck. Are you dubious that it can be used as a weapon?  My sons told about one summer they were both working on a carpenter crew and some scoundrel was sneaking between the pickup trucks at the jobsite seeing if there were any loose tools he could steal.  The boys were up on a roof and spotted him.  They had a piece of Styrofoam on the roof, used it compress the nose of the gun, then fired a series of 16d nails at the jerk.  He fled.

            But, you scoff, that doesn’t comprise a “gun” that Obama is talking about.  He means one that shoots bullets.  So then I have to ask what is the definition of an assault rifle?  When I first heard about them I thought it was A Salt Rifle, and I thought how painful to get shot with salt.  That stuff under your skin would burn for days.  No, they told me, an assault rifle has no clear definition except that it looks like a military weapon.  And some might try to define it as a weapon with a magazine larger than some size which is semi-automatic. This is what Obama wants Congress to ban.  “Then what if it’s not a rifle?  What if the barrel is smooth and it is a semi-automatic musket?”  They couldn’t answer that one but thought that would probably be outlawed too.  Or what if it’s not a gun at all but say, a semi-automatic crossbow.  I could see using an electric device to make it draw the bow again after each shot.  Well, no one could tell me how that might be covered.  Apparently, since there is no definition of assault weapons, specific marketed guns have to be outlawed and others allowed.  But what if I have a gunmaker make a custom gun which isn’t on any list?

            Am I the only one that thinks this Obama Gun Control might be hard to enforce?

            And why are we limiting ourselves to guns.  Didn’t Timothy McVeigh do more damage than some nut with a rifle?  He used fertilizer and diesel fuel.  So should we require licensing and permitting of diesel and fertilizer?  Worse, some government crime group noted this week that there were more deaths by hammers and clubs than guns.  Should we walk up to that carpenter and demand to see whether his Estwing framing hammer has an appropriate permit? (Is there open carry for  roofing hatchets?  Sledge hammers?)

            I know you think I  am being facetious.  I’m not very knowlegable about guns.  But I know some history.  I think if you will check, the reason for a 2nd Amendment right to bear arms is not to aid deer hunters or let you protect yourself from a mugging.  It is clearly about protection against tyrants.  Why doesn’t anyone say this on TV?  Which brings me to the reason I don’t own a gun.  I have no need for a hunting rifle since I don’t hunt.  I have no need for protection because I live in a safe area.  If you ever see me purchasing a gun, start worrying about revolts.

            And since the Constitution is about limits on the federal government, what if there is a part of said Constitution that forbids the federal government from something?  Doesn’t that then make that issue the exclusive jurisdiction of the states and the people while the federal government should butt out?  So if the right to keep and bear arms is not to be infringed, doesn’t that make it entirely a matter for the states and the people?  If the federal government somehow inserts itself, isn’t that borderline tyranny? Do I need to go shopping?

Monday, January 14, 2013

Fixing SS and MC

As a member of the boomer generation who watches the numbers, I have lived in a world of utter disgust over the last 40 years watching Congress play Least Greater Fool with the Social Security.  It was originally billed as a “savings plan” so that no one would go into retirement without savings.  In reality, it is a ponzi scheme on the current workers to pay for those already retired.  Nonetheless, people pay into SS and consider it their due.  As well they should.  Because even if the government had been putting away their ‘contributions’ (I love government-speak.  Jist dem good ol’ SS troopers passing the offering plate, ya’ know.) into federal bonds, it would have yielded at least 4 times as much upon retirement. 

            The cash flow of the SS is now negative.  In the last ten years, the SS payout per working person has doubled, from $3000 to $6000 and will double in another 6 years.  Even so, the donkeys still claim that the fund is perfectly fine and totally solvent. Not true.  We must finally fix the system, or it will begin to rapidly gobble up the national budget. (even if Dingy Harry doesn’t pass one) An unfixed SS and MC will mean that within roughly 20 years, all the federal government will have money to do is pay seniors.  That’s a generational war I don’t want to be part of. We need to fix this thing.

            Here are several proposed solutions that could fix the SS.

1.    Raise retirement age—If you raise the age to 72 it will fix SS in perpetuity.

2.    Raise Taxes—if you triple payroll taxes it will fix SS in perpetuity.

3.    Raise the cap on payroll taxes—if you raise the cap (currently about $110K) to a million, it will fix about half the actuarial problem.

4.    Means test—Just paying SS to the poor could fix however much you wanted but to fix it for all times you’d have to deny SS to about 1/3 of the middle class plus the upper class.

5.    Cap and Gap—this means don’t change the current cap but start re-collecting 6.2% on those over $250,000, i.e. soak the rich.  This fixes about half the problem.

6.     Collect SS on all incomes—Cap gains, 401K distributions, dividends, etc.  This would come close to fixing the problem forever.

7.    Cut benefits—again, if you are willing to live with less than half the benefits, this could fix it.


Politically, these are all hard to do.  Dems bray like jackasses if you bring up raising retirement ages or cutting benefits.  They are keen on things like soaking the rich with 3,5 or 6 or making SS a welfare program with 4. Republicans might agree to a small portion of each of the above but would favor cutting COLA increases to benefits first.  I predict that Congress won’t do major changes.  They will just jigger the numbers to kick the can down the road by 5 years.  Thus the most likely fix is to raise the cap on payroll taxes again.  This pains the least number of voters.  (Same politics as Adolf Hitler: pick on some numerically small group that can’t defend itself, like Jew bankers, and put all the burden on them for failure. Or in this case, “the rich”)  The people who study the insolvency problem say that the logical fix is #1, raise the age since 65 was quite old when the system began.  This would also allow progressives to continue to say “this is your savings plan, your insurance against getting old and having no savings.”  That’s utterly logical, but it counters the progressive plan to make as many people beholden to government as possible. And both pols of both parties lament the squall of the citizenry.  I hate to say this, but if you’ve been working 50 years like I have, and haven’t planned for other income in retirement, am I supposed to feel sorry for you, Mr. Grasshopper? Well, okay, personally I might, but I don’t feel morally right in skewering the rest of the taxpayers to make them liable for your behavior.

            And considering all the solutions for the government to soak the rich, do you think the rich got that way by being stupid like the government?  Will they simply stand meekly to be fleeced or will they move accounts overseas, find ways to make assets grow without realizing income, and use corporations to expense things to support their lifestyle?  Hmm?  Failure to realize this gives rise to the story about Greece.  Greece spends $150 billion a year and collects taxes of $336 from the last remaining taxpaying businessman in Athens who is planning to retire in April.

            At least with SS there is a defined amount of benefits paid according to current law.  With Medicare, the outgo per patient keeps rising faster than inflation.   It is for this reason, I am convinced that Obama has folded MC into Obamacare and plans to just not pay the bills for old folks.  The costs of average health insurance policies have gone up $3000 as opposed to his prediction of $2500 savings from Obamacare.  And since 30 million new insurees will show up at insurance companies demanding insurance no matter what sickness they come with, costs of your insurance will approximately double in the next few years.  Thus, I agree with Rep. Joe Wilson.  There is no way Obama could have fooled himself into believing his own rhetoric. 

            Potential fixes for MC are

1.    Raise payroll taxes—maybe 5X as much as current 1.45% is needed, maybe more.

2.    Cut benefits which means not paying docs and hospitals or Death Panels ala Obamacare—“After age 65 you’ve had a full life and we don’t pay for gall bladder surgery.  Nor do we allow doctors to perform them.  Here’s a pill for your pain.” You’ll have to visit Malaysia to get that gall bladder removed.

All the other fixes like SS has don’t work in the case of MC-- like giving benefits only to the poor or soaking the rich (Rich are already taxed).  Stunningly, the Dems favored cutting benefits stealthily in Obamacare rather than raising taxes. This has consequences. Simply not paying docs (in order to cut benefits) will only cause mass retirements from medicine.  Not paying hospitals will kill hospital economics, especially in rural areas. And that means fewer docs practicing in the hinterlands.  Thus most people will be forced to visit “urban clinics” with lesser skilled PA’s and others dispensing medical care.

            The way to fix MC and healthcare in general is to repeal Obamacare and simply set up a healthcare assistance program to partially subsidize healthcare for those with medical conditions while using payroll deductions to mandate that they must purchase insurance.  Annual cost of this would be $200 billion but far less than Obamacare. The costs might go down to $130 billion if several Republican initiatives could be enacted such as purchase of medical insurance across state boundaries.

            Whether this could happen remains to be seen.  So long as we have our present medical system intact, it could be done.  Once half the docs retire and hospitals close, and Obamacare system gets entrenched, it’s too late.  Based on all those years of watching SS, I’m not optimistic.  It will probably be just like the opportunity to easily fix SS years ago--by allowing employees to designate a portion (20%) into a savings plan of government bonds—has now gone by. It’s too late once the cash flow goes negative.

            The real fix is to have pols who are satisfied with just one term and vow to do the RIGHT thing for our country’s future, not the thing that gets them re-elected. 

            If you are young, I seriously suggest that you learn to live on about 2/3 of your income and save the other third in good investments.  Thus you won’t be dependent on Uncle Sugar.  Because one of these days the national credit rating will be downgraded from A to B to horse manure upon discovery that the Grand Canyon and Yellowstone have been repossessed by China.  I averaged Lower-Middle Income earnings for 20 years before retirement and managed to live on almost poverty level expenses.  Subsequent investments promise a modest retirement at least. If I can do it so can you.

            I know, I’m like that old cowpoke who had to testify before Congress and they found him in Contempt of Congress.  He just said, “Wull, yeah.”

Saturday, January 12, 2013

Basher and baseball

Obama keeps avoiding Syria because Basher Assad is alive and well here in the USA and rented from me. He left very suddenly, in the dead of night 3 days ago -- bashed 4 holes in the sheetrock, two windows, one door, and a hole in the wall of the garage.  The furniture rental company got back two bashed and smashed chairs.  The corner of the dining table was bashed down like someone had taken a baseball bat to it.  Basher Assad, no?

Now I’m remodeling.  Maybe I will turn that house into a Second  Baseball Hall of Fame—the players that should have been noted but never got in.  They didn’t make it because the baseball writers elect HOF members.  Those famously alcoholic writers now refuse to recognize players who might have used steroids. And they know little of the significance of history.  Here’s who I would put in.

The writers seem only able to read statistics. “Old Hoss” Radbourne is in the Hall.  He won 60 and lost 12 games pitching for Providence in the National League in 1884, the most games ever won. But his career was very much shortened because he fought with everyone and went from team to team.  Ed Delahanty also had a shortened career.  He hit over 400 twice and had a lifetime .346 but he was a drunk.  Playing for the Washington Senators in 1903 he had a .333 going when he got in a drunken brawl on the team train. They kicked him off the train, he tried to re-board, fell in the Erie River and was swept over Niagara Falls. His body was found a week later.  Just thought you’d like to know what wonderful, “non-drug using” guys are in the current Hall of Fame.

Cap Anson is already in the HOF but no note is made of “the Grand Old Man of Baseball’s” most significant and awfulest contribution.  He was a superstar in the 1880’s, player coach who first innovated spring training. But his worst contribution was that he was a blatant racist who refused to let his team play any team that had a player of African ancestry. That forced black players into a negro league that segregated baseball for 70 years. By the way, Anson changed the name of the Chicago team to the Chicago White Stockings.

So perhaps you’ll forgive some of my nominees to the true history of baseball hall of fame.  How about Andrew Freedman, owner of the Giants in the 1890’s and a big wheel.  He advocated ‘syndicate baseball’, that is, all the teams in the league should be in a trust and teams would then become franchises, players salaries would be capped, and players would be jointly pooled, shifted around as profit opportunity was found.   His system was not wholly adopted, but you can see parts of it still today, and players salaries were once capped.  Not until Curt Flood, one of the better defensive center fielders to play and still not in HOF, sued MLB and won rights of players to become free agents, did player servitude end.  Flood’s contractual free agency changed the game profoundly.

Before 1900 there were numerous leagues, the National League being the biggest, but American Association and Players League being rivals. In 1900 baseball drew fewer fans than did polo, another popular sport.  It was a rough game of men who brawled and cheated.  The National’s Baltimore Orioles of the 1890’s have 5 Hall members.  Skipping a base if the umpire wasn’t looking was routine.  Honus Wagner of the Pirates explained how he didn’t get a home run because he was roughed up by Orioles as he rounded the bases, “the first baseman gave me the hip as I rounded the base, the second baseman slugged me, Jennings tripped me at shortstop and when I got around 3rd, McGraw was waiting with a shotgun, I think.”

So what made baseball grow and polo die off?  Baseball could be a family sport. You could play baseball at a picnic.  Women in long skirts could bat with a child as designated runner.  For the honor of making baseball civilized, I would nominate Mr. and Mrs. Frank Robison who bought the St. Louis Browns in 1899.  His wife thought the uniforms were hideous and had a new set of bright red uniforms tailored with red striped socks.  The wild colors caused quite a stir in the press, the team was jokingly nicknamed ‘Cardinals’ when Willie McHale of the “St. Louis Republic” overheard a woman say “what a lovely shade of cardinal!”, and game attendance by families soared with special discounts for families to attend.  The red uniforms were scrapped, but not the new nickname and the team logo now became two birds on a bat, the first truly recognizable logo (rather than just a letter or town name). Cardinals sold their “Browns” name to another team in the city.

Most of the original MLB teams were in a narrow eastern belt from Chicago to Boston.  But baseball grew to be enormously popular in the west.  And the guy who helped fund many minor league teams was the oil tycoon Harry Sinclair.  In 1914, he formed the last rival league to challenge MLB with the Federal League.  They raided players from the American and National Leagues and sued MLB (quite correctly) under Sherman Anti-trust Law.  The judge who presided was Kenesaw Mountain Landis who dallied and delayed not wanting to make the obvious decision in favor of the Federals.  Eventually MLB negotiated a settlement with Sinclair and changed some of its monopolistic rules to allow owners to have greater autonomy.  For this, Sinclair is nowhere near the HOF but Landis, the opportunistic judge who secretly favored the established leagues, was awarded “Commissioner of Baseball” and became a dictator for 26 years at the head of Major League Baseball.

Since HOF recognizes guys who fell off the wagon, like Delahanty, why don’t they have “Shoeless” Joe Jackson?  In 1919, the overwhelming favorite Chicago White Sox lost to the upstart Cincinnati Reds.  Big shots lost money they had bet on the Series and brought pressure on Landis.  Commissioner Landis determined after interviews, that 8 White Sox players had consorted with gamblers to “throw the series”.  Jackson was the poor country kid who was completely intimidated by his audience with Landis, the bullying prosecutor.  But most historians now believe that Jackson was innocent.  After all, he hit .385 during the Series and made several sensational plays—not exactly behavior expected of a guy throwing a game.  Considered the greatest hitter in baseball, he was banished from the sport. By the way, a jury acquitted all 8 players in 1921. None were ever allowed to play again and none are in the HOF.

There are weird deletions from the HOF.  Why didn’t Heinie Zimmerman, the great third baseman of the early Chicago Cubs get included?  In 1912 he hit .372 and led his team to the championship.  Ken Boyer of the 1950’s Cardinals? Pete Rose?

This brings me to players unlikely to ever be inducted because of steroid use.  MLB had no anti-steroid sanctions until the 21st century, but they sure had a big problem after 1995.  Those were the years of the baseball strikes in which the Players Union demanded a larger share of gross profits and nearly destroyed MLB when fans went on strike.  Attendance by 1997 had dropped by half—drawing fewer fans than hockey that year.  All the rosy predictions of how the national sport would come back after the strikes went horrifyingly wrong.  20 teams were bleeding money and the Montreal Expos had attendance of 8000 people per game.  But in 1998 Sammy Sosa and Mark McGwire got into a home run hitting contest that the game had not seen since Mantle vs. Maris, 35 years before.  The publicity and excitement saved the game.  Baseball made a big comeback in 1998.  Well, then it turned out that not just Sosa and McGwire, but also another 50 or so players were juicing themselves with a variety of drugs--all legal at the time.  Keeping McGwire, Sosa,Clemens and Bonds out of the Hall seems to me equivalent of saying that Picasso’s or Van Gogh’s art was illegitimate since they both had mental problems and drank.  Worse still, is the treatment of players who “seemed to play as if on something” and are now shunned by the Hall of Fame via rumor.  All this from dopey sportswriters who are electing nobody to the Hall. Perhaps they can’t find somebody who wasn’t suspicious in the 90’s.

Here’s my opinion.  Sportswriters make a living spinning mostly candy-coated versions of the game.  Their version of history is not always accurate because of their biases.  When confronted with a controversy, like steroids use, or gambling, or anti-trust law they scapegoat the problem. See, I should remodel my old house and make a museum.

Thursday, January 10, 2013

Gentlemen prefer blondes

“Gentlemen prefer bonds,” Secretary of Treasury Andrew Mellon told a reporter when asked whether one should invest in stocks or bonds in the 1920’s.  As many lost their fortunes in the stock crash of 1929-32, Mellon’s words looked very wise.  The market lost 87% ($8 became $1) but bonds came out ahead.

At the age of 13, my grandfather died unexpectedly and my dad sent me to live with grandma on the other ranch.  My mission was twofold—do the chores and keep grandma company.  I remember her getting out the picture albums and reminiscing about the 20’s and 30’s.  Her take on the 30’s wasn’t the kind of gloom you hear so often.  It was an age of rediscovery, she said.  Men rediscovered faith and family and women rediscovered their curves and the joy of home.  In other words, hard times made people return to reality and values.  I was especially amused at her take on women.  They forsook gin and jazz and fast car driving and got married, she was saying.  And from 1928-1935 there were significant practical improvements in fashions—short sleeves, bras, hair barrettes and zippers.  Hence the remark about the rediscovery of the curves.  And with this refocusing on things other than money and fast times, comedian Henny Youngman seized on the spirit of the times and twisted Mellon’s words. “Gentlemen prefer blondes.” Everybody laughed.

I was talking to my trusted financial advisor last night and he noted that all the old guys my age who are in his company are worried spitless over the coming inflation. The young guys are all going, “what’s inflation?” The bond market is roaring and is 5 times as large as the stock market these days.  Every day he interviews clients who fear investing in stocks.  And yet the interest rates are historically low, as low as they can possibly get.  Any rise means a disaster in the bond markets. The company keeps advising people to stay very limited in bond exposures.  “I even worry,” he mused, “ about what might happen if bonds were to crash very hard.  Would it take down stocks too?”  Suddenly my memory was awakened.  That’s exactly what happened in 1978-1982, that double dip recession that came on the heels of the Carter administration trashing the dollar in attempt to lower the real cost of government debt.  Before that time it was always considered that stocks rise and bonds fall or vice versa.  But in the late seventies, inflation rose, and both stocks and bonds went down. Then to fight inflation, the Fed artificially raised interest rates again.  There was practically nothing you could invest in that would make money.  The rich, like Ted Kennedy, fled to Swiss bank accounts which paid a half percent interest but the Swiss currency rose 6% a year compared to the dollar. 

It’s déjà vu all over again, Yogi said.  This time it probably won’t be the Fed that increases interest rates, but the world’s investors who fear getting a full dollar back after lending it to the US Treasury.  So Obama wants to simply mint a $1 trillion coin?  Wow!  That ought to inspire confidence about like a carnival token.  Does the trillion dollar coin have chocolate inside?  Think about the movie possibilities for a Pink Panther heist of the trillion dollar coin.  No fear.  Cleuseau got it back.  Whoops, he laid it on his beach chair and a sea gull came along and swallowed it and flew off!

If a corporation has need to borrow a lot of money and interest rises they get hit by a double whammy.  First interest costs skyrocket.  Second, bonds nosedive leaving investors/lenders extremely leery of ever lending again.  With the company’s borrowing ability in question, the stock will crash and burn.  Have this happen over an entire economy and you get the sad situation where there is no safe investment.  It happens at most once a generation.  

Obama is planning on people fleeing to the government for aid when they lose their life savings via inflation.  He may be benign and mean no harm but history is not comforting in times when people are in dire straits.  Hitler used the Weimar hyperinflation to rise to power.  Peron used Argentine inflation to destroy the economy, turning“United States of South America” into a third world country.  The French Revolution and guillotines followed the famine of 1788-89.

Many are stocking up on guns and ammunition.  I am better at solving problems in humbler ways.  Those of us who see this crisis coming need to invest in hard assets that probably won’t increase but will at least hold value.  We need to help organize our families, churches and communities in ways that care for those who don’t have the ability to earn.  In other words, rediscover our values, home and what really counts in life.  No one remembers Mellon’s advice on investing.  But Youngman’s little joke turned into a pithy saying that lasted considerably longer.   

Wednesday, January 2, 2013

Fiscal Clifford

Sitting around with my friend, Fiscal Clifford, and discussing the vote.  What I want to know is how these guys can vote so fast.  A bill is written in normal English first, but a staff of experts have to put together the actual code of the bill.  This may include thousands of changes to the law in obscure places.  A bill that extends unemployment benefits may, for example change the coffee-break times of union contract workers in the unemployment office.  It may require a cost of living adjustment in certain locales and not in others.  Net result is that a bill cannot be completely written for days. Steve has shown me bills that were a page long in normal English versions that wound up being an inch thick once written as law.  And the codified entire bill is what counts and must be available for reading.  Lest some weird unintended side effect on the law occur.  "What! They are closing all the post offices in 4 counties!!"

Clifford smiled at me and answered, "You are right to be suspicious.  In fact the Senate got to look at the codified bill 3 minutes before they voted at 1:39 am.  You can find that on Drudge Report.  But, don't think that the bill was really complete.  By a parliamentary trick, the Senate reserved conference committee time for the bill when it came back from the House, so that staffers could complete their research of the legal codes and make all the changes they deemed necessary.  In other words, they didn't really know what the hell they were voting on--even if Harry Reid could speed read it.  Hare just waved his arms and said, 'Let's vote'.  Gives new meaning to the statement by Pelosi about Obamacare that we would have to pass it to find out what's in it."

Okay so they passed more than the tax stuff in the form of Puerto Rican Rum subsidies and so forth.  I thought the House had a moratorium on earmarks.  How did that get passed?  I did note that all sorts of earmarks had cluttered the Sandy Relief Bill.  So how did HR8, the Fiscal Cliff Avoidance bill get passed?  Clifford smiled again.  It just slipped through, he noted.  Now Charlie Wrangle and Harry Reid can dance around while drinking cheap rum.  I thought of the old cheer of St. Johns College I had to learn as a freshman, "Ashoo, ashoo, ashoo, laroo, ishabakka, ishabakka, boo!  Pass me a legislator, half-past an alligator, RUM, BUM BOLLIGATOR, Chicasaw a dog! St. Johns Seniors, Rah! Rah! Rah!"  Does this not fit?

Well, the Dems certainly got the upper hand in this, I lamented.  But Clifford just laughed.  "After arguing for ten years that the Bush tax cuts were bad and that the Clinton tax rates made business boom, they are now saying that a return to Clinton rates would have been a disaster and did what the R's could never achieve--made several tax fixes permanent.  The alternative min tax will be indexed to inflation.  And the ultimate irony is that they decried middle class tax cuts while demanding justice that the upper class pay their fair share.  In other words, if you make $449,999 they are your friend, but if you make $450,001, you are one of the evil rich.  Worse, the number of tax returns above $450,000 represents only 0.7% of all returns, and 6 days of revenue which could run the government."

But the wealthy didn't come out unscathed, I offered.  Most people who manage to accumulate assets do so by tax  strategies that utilize the lower capital gains rates--which have gone up.  "Yep," Clifford responded.  "And nobody is going to scrap their trusts and estate planning with a 40% tax on assets either."

But doesn't this mean that the Republican congress is neutered?  They will barely have a majority in a couple weeks and the leadership is split,  I asked.  Plus, Obama got all the credit.  Clifford chuckled.  "Well, the R's shot themselves in the foot expecting that the mandatory taxation and defense spending cuts would be so onerous that the D's would look for a compromise.  What we all see plainly is that Obama doesn't care a fig about deficits.  He scoffs at deficits.  And of course, so do a lot of Americans.  They have heard about deficits for so long they are jaded and don't care.  They won't know what hit them when the debt bomb explodes.  The next round is over the debt ceiling.  I would like to see the Congress just hang tough and talk about how Obama needs to live on his means.   But it will never happen," Clifford insists.  "They will make a show, but ultimately don't want to be blamed for a recession."  Which prompted me to laugh.  I recently read Paul Krugman, that leftist economist say forebodingly that this year we might get a recession started by politics 'for the first time'.  Ha! He finally admitted that recessions are not normally caused by politics.  The Dems have blamed every recession since Hoover on Republican politics.  Now Krugman let his hand slip.

"But by being the big spender when the bomb explodes," Clifford mused, "Obama and the Democrats have shot themselves in the foot for a long long time.  There are a lot of people who will be cussing them when the bills come due and America becomes a weaker country.

Tuesday, January 1, 2013

Jan.2, Naval Act and nickels

I was watching the bowls and the announcers were bragging about the quarterbacks and a lineman, how they had such cerebral grade point averages.  So why, I asked myself, does the median NFL player retire with a net worth of under half a million dollars.  I guess they all buy fast cars and don’t watch their nickels. 

January 2, Naval Act of 1794, is the day that Congress approved money for 6 ships for the first US Navy.  There was no Dept. of the Navy at the time, it was just a defensive move by Congress because the Barbary pirates were intercepting our shipping.  In anticipation, a certain William Brabb, a shipbuilder’s purchasing agent, had immigrated from Hull, England to Boston in 1792 at the invitation of George Claghorn, shipbuilder.  I know Bill Brabb.  He was my great grandfather 7 generations ago. Hull, on the coast north of London was the center for the shipbuilding industry of the British Empire.  The enterprise takes a lot of different materials, specialist builders and careful watching of the nickels. Brabb was a minor player, but he had an important job. And my gang still watches its nickels.

                Claghorn was the shipbuilder hired to build the USS Constitution.  6 frigates were authorized by the Naval Act, most with 44 guns and designed by Joshua Humphries.  Humphries was a genius.  America was a small player.  England had 800 navy ships and France had 250.  Our ships had to be rugged enough to withstand a hard fight but also fast enough to avoid an encounter with a British Ship of Line which might have 80-100 cannons.  (An old French saying, “He who fights and runs away, lives to fight another day.”) The French built fast blockade-avoiding ships to get past the British, but they were made of pine.  British ships were pine also, but had white oak masts.  Humphries called for ships of smaller beam (width) and longer keel like the French ships, but made of live oak and white oak primarily.  Southern Live oak was used for the ribs of the hull.  It is extremely hard and waterproof.  The upper sides were also made of oak.  And then the Constitution was fitted with very large ship-of-line type bombardment cannons shooting 24 lb. balls. Most ships carried guns for 12 or 18 lb. balls.  The heavy use of oak became famous for the Constitution in the war of 1812 when it demolished the HMS Guerriere and the sailors gleefully reported that British cannonballs literally bounced off the sides.  I’m no authority on 18th century naval warfare, but I have heard it said that tactics were multiple.  You could shoot for the rigging and masts using either chainshot or balls.  This disabled the craft.  You could use balls to try to blast holes near the waterline for a sinking, but the best idea was to blast the sides.  This caused a spray of deadly splinters into the opponent’s crew.  It took a dozen men to arm and fire each cannon so by killing/injuring the manpower, this was the most effective technique. 

            Apparently defense spending was the same then as now.  The 6 frigates Humphries designed were built in 6 different seaports since Congress wanted to spread the money around—or had to for enactment. They authorized $688,888, a big number for the day.  Building low volume, specialized military weaponry costs real bucks.  There was a year-long delay when a crew sent to Georgia to cut live oaks all came down with malaria. Congress was informed there were cost overruns, and at least twice had to appropriate more money, making the total tab over $1 million.  By autumn of 1797 only 3 ships were built and Congress was in a terrific argument, Democrats claiming this was money down a rat hole.  A big investigation ensued, 3 shipbuilders were fired, and Congress decided April 30, 1798 to create a Department of the Navy in order to get a handle on costs in the future.    But in Boston, Constitution was launched in October, 1797.  And several of the folks who had been instrumental in getting costs down and schedules done in Boston were asked to help organize the new Navy department. 

            It is not clear what William Brabb had to do with this, but we do know that one of his grandkids married a granddaughter of General and Congressman Dan Morgan of New Jersey. Morgan was the ultimate redneck who rarely wore a uniform and had founded a group called the Virginia Sharpshooters.  They had accurate rifles and long-barrel muskets that could pick off British officers instead of just firing generally into the crowd of the opponent’s line.  At Saratoga he got frontier women to work as sharpshooters which confused the Hessians and Brits who felt it was dishonorable to shoot at a woman. His victory at Cowpens, North Carolina was instrumental in defeating the British in the Revolutionary War.  A couple generations later, the Brabbs founded a small town, Romeo, Michigan (now a suburb of Detroit).  They were the bankers and accountants, naturally.  A great, great aunt was the first woman to graduate as a medical doctor at the University of Michigan.  My great grandfather, Bill Brabb (Same name again) dreamed of being a cowboy and came to the Flint Hills north of here.

            The War of 1812 could have turned out so differently had it not been for the hurricane that destroyed the British invasion in 1814.  But some historians hold that an important reason the British decided ultimately to sue for peace was the US Navy, though tiny, had ship-for-ship beat the stuffing out of the greatest navy in the world. They reasoned that the Americans, acting as pirates, would forever harm shipping, even if the Brits recaptured the American colonies. Constitution became famous for its exploits with the public and thus it was preserved time and again, and now sits in Charleston Naval Yard at Boston as a floating museum.  It is the oldest commissioned vessel afloat in the world, has been used to promote the Navy and many other causes.  Now that’s a well-spent nickel.