March 2010

The Good Old Days

The Good Old Days

In my lifetime I never thought I would refer to “when times were good”, or “the good old days,” terms I always thought were left to my grandparents. Of course, some life experience is required before such a reference can be made and this might also mean I am getting older. Without a doubt we can now have conversations that start with the statement, “when times were good” and instantly pinpoint a reference we all understand. Curiously, when riding the euphoria of economic success it is easy to ignore the impending potential crash. Although the one year anniversary of the stock market low was just last week, it was the peak of November 2007 that defines the tombstone of good times. Since then personal experience through home loss, job loss, bankruptcy, asset sales, and moving have defined America. Most of us know someone touched by the recession and we will forever be influenced by what is happening around us.

Just recently I have been in several conversations where the words “when times were good” were stated. The first time I paused momentarily, but everyone present understood what was said. The next day the same scenario similarly repeated itself and I realized something important had happened. Essentially, the most recent economic downturn has cemented in our minds a change and we are living through a time which only the rearview mirror of history will provide a true opinion. Unlike Pearl Harbor Day or September 11th, it will take years to understand the Great Recession of 2008-2010. Although hardships are upon many Americans, a theme of ignoring mainstreet has developed. Looking at history of the Great Depression of the 1930s brings similar observations. For example, 1930 and 1931 provide numerous examples of President Hoover and Treasury Secretary Andrew Mellon assuring the people the worst was over and prosperity was right around the corner. In a May 1, 1930 statement, Hoover said, “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”

History has an uncanny ability to repeat itself, but yet we fail to learn from our experiences. At one level those living in the government and financial centers of our country seem to enjoy uncontrolled spending, record deficits, market highs, profits, and record bonuses. For the rest of us, business closings, vacant office space, abandoned homes, increasing food and fuel costs, and unemployment seem to be the norm. “I see no reason why 1931 should not be an extremely good year.” – Alfred P. Sloan, Jr. of General Motors Co. stated in November 1930. Week after week we see conflicting economic news streaming at us, reports of increased consumer spending for February indicate despite snowstorms we reached in our pockets to spend money, but contradictorily consumer sentiment dropped.

My point is we have to wonder how the current economic environment will shape our own lives and futures. Our children may never know “when times were good” if our economy stagnates like the 1930s. My confidence in massive spending at levels never before seen is low, because there are always consequences to every action. Future generations will have to pay for this administration’s actions either through taxes or inflation as there is no other way to slow the velocity of increase in the money supply. A cloud hangs over our economy and future; I wish things were like “the good old days.”

March 20, 2010 by Capitalism Depression Great Recession

Incremental Destruction

Never underestimate the power of incrementalism or “shock” negotiation, effective methods to promote an agenda, even when fully opposed. Generally this seems too far-fetched for people to believe because they fall victim to the idea certain changes could never take place in America. For years I have asserted this is an effective method for change and destructive to our lifestyle and freedoms. Currently we are confronted with a plethora of assaults on our liberties, and when faced with a full assault, gaining any concessions makes it feel like a battle has been won, although loss occurred.

Examples of this incremental assault are obvious, our banks and automakers have been nationalized. You may be tempted to cry foul on this assertion, but we know the stories over the past year with the CEO of General Motors having been fired by the POTUS and the American taxpayer becoming the largest stockholder of GM. We have watched votes in Congress pushed through under cover of night, in contradiction to the President’s claim to make bills available online for five days before signing. Last week Democrats reiterated plans to move forward with healthcare, regardless of support from the minority party, or the people. The latest Rasmussen Poll, March 1, 2010, shows “52% of U.S. voters continue to oppose the plan proposed by the president and congressional Democrats.” When President Obama won the election by 53% of the popular vote he claimed he had a “clear mandate” from the people. By the same thought process, I would claim Congress and the President have a “clear mandate” from the people to stop healthcare.

In the early 1980’s proposals for a national identity system were proposed. Quickly this idea was squashed by public opinion and concerns over “1984” becoming the norm. Something else happened though and a national identity system slowly materialized. Today, you can not apply for insurance, attend college, get a loan, apply for a credit card, or apply for a gun license without providing a social security number. Incrementally, a national identity system successfully came into our lives. It took about fifteen years to become normal, with citizens willfully providing this information, “many medical providers are using the SSN as a patient identifier, thus hardening the number as a de facto national identifier,” testified by David Miller before the National Committee on Vital Health Statistics in a hearing in Chicago, Jul. 21, 1998.

I have previously discussed the intrusion of video cameras into all aspects of our lives. I personally noted this during the last week: at an intersection where I counted six cameras atop traffic lights, and a Wal-Mart where 17 separate cameras monitored the parking lot. Reiterating this concern further was a March 3, 2010 USA Today article, “Police partner with license plate readers.” In this article many municipalities are identified with the technology promoting claims to stop stolen vehicles and monitor crimes. Arguably, these governments have an opportunity to first increase revenue in these dire economic times, but more importantly they may track and save vehicle movements for potential misuse at a later date.

Over many objections our government continues to defy the wants of its citizens. Incrementally, through legislation, systems abuses of social security, monitoring citizens with cameras, and using the courts to re-interpret legislation and constitutionality, my children will never know what freedom is. Their lives will be changed by constant monitoring, national identity, and nanny-state mandates more akin to movies like “1984” and “Brazil”. Incrementally, tyranny is becoming the new normal, but yet we feel relief to have any freedom left.

March 13, 2010 by Big Government sheep

Redux

Redux

The last few weeks I have touched on three key topics and want to revisit them today as each has made headlines, reiterating my concerns, or in one case giving hope and contradicting my thoughts. Last week I touched on energy policy, the failure of the Department of Energy to meet its mandate by President Carter, and cornucopian ignorance by conservatives. The prior week I alerted you to my concern over failing state governments. Three weeks ago I hit on the issue of entertainment and sports prevailing as the interest to Americans instead of citizenship. I typically write this column on the weekend preceding publication so it has been fascinating to watch thoughts, predictions, and trends materialize.

Snowstorms battered the mid-Atlantic and northeast again this past week reiterating my focus on state governments running budget deficits and the upcoming economic malaise. The same week I wrote my column the governors of the states met and voiced concern over impending shortfalls. In world headlines, Greece continues to make the news, but the state of California is the eighth largest economy in the world and remains on the brink of failure. On the U.S. east coast snowstorms may bankrupt individual states. For example, Georgia has no budget for snow removal but has spent $5 million. Virginia has suffered; outspending its $79 million snow removal budget by another $70 million. Those are critical monies ordinarily available for social services, schools, libraries, and road maintenance. In Virginia, the state Continue reading…

March 3, 2010 by Big Government Peak Oil

Energy Policy

America’s energy policy over the last 40 years has been lacking direction, but President Obama took a big step forward last week. Prior to 1972 America was an exporter of oil, not only supplying all of our own needs but exporting oil to other countries. It is hard to imagine, but in the early 20th century oil literally flowed to the top of the ground in places like Pennsylvania, no wells, no deep sea drilling; it could be had by scraping it off the ground. In 1956 a geophysicist, Dr. M. King Hubbert predicted by 1970 America would reach its “peak”, the point where U.S. oil production would peak. However, the concept of “Peak Oil” is scoffed at since we continue to discover more oil reserves, dismissing that every new barrel costs more to obtain than the previous. In 1973 the OPEC crisis catalyzed our country’s quest for energy independence; seven presidents since influenced America’s energy policies, but yet we remain hostage to foreign sources.

In 1977 President Carter created the Department of Energy; a bloated bureaucracy failing to meet its original mandate. Specifically, the DOE was created to ensure “the U.S. will never again import as much oil as it did in 1977.” At its creation, America imported 8.6 million bbls/day, now we import 10.4 million bbls/day. The DOE has grown from zero employees and zero budget to over 16,000 taxpayer paid civil servants, 100,000 contractors and an annual budget of $28 billion. Today America remains as dependent on foreign sources of energy as in 1977. Contrastingly, President Reagan brought a different view to office regarding energy. Sadly, his view is one that has stayed with Republicans during the last 25 years. Regan, a cornucopian, believed an innovative, technological solution, would appear in time to save us from the tragedy of our misdeeds. Of course, President Reagan, and his British counterpart Margaret Thatcher, were saved by the huge North Sea oil discoveries in the 1980s. Thus, the UK had a thriving economy and postponed energy policy decisions and likewise America did the same.

In the summer of 2008 every American received a wake-up call to energy policy. Stunned, we watched the price of gasoline at the pump soar past $4.00/gallon, considered buying “Smart” cars and left the SUV in the garage. Of course, this brought out the charlatans and snake-oil salesmen seeking government monies and investors for wind farms, off-shore wave generators, battery powered cars, oil sands recovery, and the now famous food-for-fuel, or ethanol disaster. However, grabbing a calculator and doing some math will show many of these methods require more energy than produced, do more environmental damage, or are just silly when considering large-scale implementation.

This past week President Obama made an excellent decision regarding energy policy; announcing $8.3 billion in loan guarantees to build two nuclear reactors in Georgia, the first in the U.S. in 30 years. Ironically, it is a decision that defies his party’s typical philosophy regarding nuclear energy and I am certain the likes of Jane Fonda, and the rest of the anti-nuke crowd, are troubled by this. However, the Hollywood crowd driving Toyota Prius automobiles must understand their energy requirements will come from the “grid”. President Obama, as a Senator and candidate, has consistently supported nuclear power. I would suggest the President add geo-thermal energy to the quest for clean-energy independence. With the unspent stimulus monies President Obama could focus a moonwalk like quest on energy and lead us out of recession and away from dependence on our enemies in the middle-east and South America.

March 3, 2010 by Big Government Peak Oil