America! Is it too late?

“Should it really matter if some other country is richer and more militarily powerful? Who cares if some other country has economic supremacy as long as your country is prosperous and can manage its own internal affairs. For example the countries of Denmark, Sweden and Norway, each economically advanced, seem to have no qualms about who rules the world as long as they are left alone to be prosperous and peaceful, though their attitude might well change were whoever held the purse strings to start to curb their freedoms and encroach upon their way of life. But until that happens, whether the global financier is China, Russia or America seems, for them, largely irrelevant.” How the West Was Lost Dambisa Moyo

America is losing it and it will take drastic action for us to get back on course. Why has this happened?

  • We forgot, never learned, how to compete. 
  • Consumption 
  • We allowed our government to fail 
  • We put ourselves in too much debt and became over leveraged. 
  • We mortgaged the future. 
  • Education has taken a back seat and thus, so has our future.
Failing to Compete:  We were spoiled by the greatest generation. They won World War II and there was no competition standing after that horrific event. As a result we indeed did prosper;  however, we did not learn to compete globally because there was no one to compete against.

Consumption: We learned how to consume and became addicted to it. We consumed for the sake of consuming without paying attention to the economic progress that was being made by the rest of the world. Eventually we began to distribute our wealth to the rest of the world by our addiction to consumption.

Government Failure: Our Politicians, who in fact are us, also got intoxicated with consumption. They failed to look out for the general welfare of the Union. They have allowed the free markets’ power to create wealth and goods to be destroyed by oligopolies. Our representatives failed to create and enforce rules that would guarantee the freedom of “free markets”. Instead, these oligopolies have bought off our representatives as a result of their addiction to consumption.

Further the politicians bought off many voters by allowing the creation of expensive pension plans, both private and public, that are not totally funded. This shoe has yet to drop.

Over Leveraged:  We borrowed money from future generations and have no plans in place to pay them back. We have not used the money to invest; but rather, we used it it to feed our addition to consumption. The sub prime crisis brought it to a head, but the problem has existed for some time. The problem is further exasperated by the enormous amount of unfunded and hidden costs of future pension benefits that we are obligated to fund.

We are Squandering our Education System: When you have an addiction,  education is neglected. Our education system use to be the best in the world. We are slipping and parts of society do not look at dollars spent on education as an investment. Instead, it is looked at as something that limits our ability to consume even more.

To solve these problems, we must take drastic action; sooner rather than later. I don’t think we have the will to do it. Do You?

    Obama’s Personality Flaw.

    Barack Obama showed some weaknesses during the first debate that he needs to control if the country is to make headway on debt sequestration and other issues. In an article in the New York Times, referring to how badly Obama did in the first debate, it says,

    “He emerged newly combative, newly contrite and newly willing to recognize how his disdain for Mr. Romney had blinded him to his opponent’s strengths and ability to inflict damage.”, New York Times, How A Race In The Balance Went To Obama, November 8, 2012

    This kind of attitude does not sit well with members of the opposite party when you are trying to carve out a deal on debt reduction that will have an impact on generations. Compromise is in order and if you do not respect your opponents the attitude shows and you lose; just like he lost the first debate. In our country we have three branches of government and they share power.
    The President must reach out to John Boehner, Paul Ryan and Mickey Cantor. They must do the same or no deal will be made. The first order of  business is to push the sequestration date back to at least March 31, 2013. The decisions are too important to be rushed to meet a self imposed deadline. The country and our financial markets need to see a change in mood in Washington. They must gain confidence that we have leaders that can work together and get things done.

    Everyone has been saying that business is reluctant to invest because of the political uncertainty in Washington. Debt reconciliation is at the heart of this uncertainty. The solution is a balanced approach of spending cuts and revenue increases. Representative Boehner has already come out and indicated that he would be in favor of some revenue increase as long as they are reasonable and as long as there are also spending cuts.

    President Obama should also be willing to put his recently passed Health Care Plan on the table and be willing to look at common sense adjustments to it including allowing health insurance companies to compete across state lines and breaking up health care crony capitalists where they exists.

    Washington, get to work and do what is right for the country. Your year long paid leave of absence to campaign is officially over.

    Obama And Democratic Convention

    Here is what Barack Obama and the Democrats need to do at next weeks convention. They need to explain the contrast between the Democratic parties platform and the platform revealed by the Republicans last week. While doing this, major falsehoods expressed by Republicans must be addressed.

    Obama must debunk the fallacy that the country is worse off than it was four years ago. The events causing the collapse of housing and stock markets did not happen in the fall of 2008. The fall of 2008 was when the market, and thus the country, acknowledged the devastation of home values brought about by sub-prime lending throughout the first eight years of this century. It is like you opened a $50,000 savings account in the year 2000 and someone went online in 2004 and stole it; however, you did not discover it until 2008. When were you actually out the $50,000; in 2004 or 2008?

    In the normal course of banking and finance, holders of financial assets are required to establish a reserve for losses against assets acquired. When a bank makes a car loan they immediately set up a loss reserve. No lender expects a specific loan to default on the day the loan is made.  However, an experienced lender knows that a certain percentage of loans made will end up in default. He just does not know which specific loans will fail.

    If proper loss reserves were established as sub prime loans were originated, the housing bubble would not have occurred. Wall Street pulled a bait and switch on the American economy and so far has paid no retribution for their greed. The bad news is the economy would have been in recession much earlier and unemployment would have been much higher during the middle of the last decade. The recession however, would never have gotten out of hand and turned into a near depression.

    President Obama is being blamed for the depression-like recession that we are experiencing when in fact the seeds were sown long before he took office. Further, a downturn of this magnitude does not turn around quickly. When he took office we were losing 700,000 jobs each month. We are now adding approximately 200,000 jobs monthly. This is a big turnaround; however, there is still much pain and suffering occurring.

    Obama then needs to state his objectives for the next four years which should include the following:

    1. Continue the process of pulling out of Afghanistan.
    2. Enforce anti-trust legislation in those industries controlled by oligopolies.
    3. Invoke the Volcker Rule and break-up banks that are too big to fail.
    4. Develop and implement a long term plan that will resolve our debt issue. This includes raising taxes on the wealthy and making cuts to expenditures, including entitlement programs, if necessary.
    5. Further stimulate the economy, thus creating jobs, by making sound investments in our future including infrastructure, internet upgrades, education, transportation, energy exploration and rebuilding some inner cities that make sense.
    6. Aggressively seek retribution, whether in criminal or civil courts, from entities causing the sub prime meltdown using the proceeds to assist homeowners damaged to get relief. This, in affect, will be a stimulus costing the taxpayers very little.
    7. Commit to improving education for it is the surest road out of poverty and low wages.
    8. Enforce anti-trust legislation in those industries controlled by oligopolies.
    9. Fight to repeal the Supreme Courts decision on Citizens United by amending the constitution.

    The Republicans spent their convention touting the wonderful job small business does to create jobs. They are correct and acknowledge it. However, make very clear that the republicans sold out small business to crony capitalists by accepting egregious contributions, bribes, from their chums that Paul Ryan spoke of in the Financial Times in July of this year.

    “Both political parties have fallen victim to “partnership” with large and well-connected companies, especially in energy, housing, finance and healthcare. Republicans have been guilty of confusing our pro-market principles with pro-entrenched business policies…. A growing coalition of reformers … reject this pernicious crony capitalism. Our solutions promote an opportunity society, one that is rooted in the US commitment to free enterprise.”

    The GOP is going to find it difficult to break-up the oligarchs that control wall street, banking, broadcasting, the internet and many other industries that are in the way of small businesses being able to compete. These oligarchs are also in position to hold down wages because they need to compete less for labor as they drive their competitors out of business.

    Right to Life Vs. Right to VP

    Ryan appears to have borrowed Romney’s Etch-A-Sketch.

    Per news reports Romney believes abortion should be legal in cases of rape or incest, or when the mother’s life is in danger. Ryan’s position is all abortions, except if the mother’s life is in danger, should be illegal.

    Paul Ryan believes that getting an abortion is taking of a human life and is wrong. Ryan has effectively stated that he will overlook the taking of “innocent lives” because his running mate has deemed it to be OK and Romney is after all the head of the Republican ticket.
    How can Ryan remain part of a ticket if it is going against one of his core beliefs? If he is not willing to take a stance on “life” on what other core beliefs is he willing to sacrifice to become Vice President?

    Obama Getting Groove Back

    This is best news I heard in some time. Per Walter Shapiro on Yahoo! News today titled, Barack is not impressed: The president’s reluctance to kowtow to the very rich

    “The New Yorker succinctly summarizes the Democratic problem in its headline: “SCHMOOZE OR LOSE–Obama doesn’t like cozying up to billionaires. Will it cost him the election?” The Politico e-book, “Obama’s Last Stand,” by Glenn Thrush makes the identical point about the President: “He was also hurt by his own aversion to massaging demanding Democratic donors–many of them Clinton Democrats who never liked him in the first place.””

    This compares to Paul Ryan and his running mate making statements about crony capitalism, but taking action showing they are part of the cronies.

    Obama, if you keep acting like that you might just get elected.