March 2011

I am Angry

I am angry because it appears no one knows what is going on around them with deficits, rising fuel prices, Islamic radicalization, and Middle East uprising. The most twisted issue is an American society willing to tax food, clothing, and shelter, at the same time as supporting 44-million Americans on food stamps all while watching media celebrities like Charlie Sheen make fools of themselves. It cost an extra “Andrew Jackson” to fill my car today and the mainstream blames fuel prices on the Middle East, but that’s far from the truth. A middle-school look at the readily available data shows a more fundamental reason for the rise, one destroying our lifestyle and future.

Rising fuel prices are simply attributed to three factors: monetary supply, supply and demand, and speculation. Speculation is based on fear in the market which is driven by political unrest around the world. Supply and demand is a direct consequence of emerging economies, hurricanes in the Gulf, or destruction of Middle East oil assets. Although the Middle East uprisings are dominating news reports daily, the current rising prices are truly a function of monetary supply. Fed Chairman Ben Bernanke speculated on QE2 in August 2010 and it was officially announced November 4, 2010. Each week I graph crude oil prices and up until August prices were relatively stable, but immediately following QE2’s speculation fuel prices started to rise, increasing more after the official announcement. With the devaluation of our currency, OPEC announced a desire for higher fuel prices to effectively capture the same income. Today’s Middle Eastern uprising is a secondary issue exacerbating the underlying cause of rising fuel prices. Blame our government and central bank, not those fighting for civil liberties.

The solutions being thrown around by political pundits from both sides make no sense and demonstrate politics’ need-to-please, not realistic solutions. Opening strategic reserves is anecdotal to a giving a cancer patient a band-aid. “The Long Emergency,” as James Howard Kunstler writes, has begun and political unrest, failed monetary policies, and a third-world desirous of the same excesses we enjoy will continue to drive oil prices upward. I am angry pop-culture nonsense Tom Brady’s hair and Gaga’s breast milk ice cream exploits resonates more importantly than the collapse of our currency. On November 10, 2010 I wrote, “Gasoline should easily reach $3.40/gallon by April as OPEC is demanding a minimum $100/gallon.” I am angry no one listens.

March 25, 2011 by Big Government Muslim Obama sheep Stupid People

Left – I agree more than you think

I rarely read the columns to my Left and Right on this page, but recently was made aware of a comment asserting I had a “Right” bias. Although probably not far off at first glance, due to my fear of tyranny through larger government, I thought I might take on the challenge and clarify many of my positions for all who read. I compiled a list of my columns for the last 80 weeks and saw a common theme emerging, one that distances me from most on the Right and those on the Left, but more so defining a tolerant middle-ground. Let me proceed.

We should not have a death penalty, in my opinion to put one innocent man to death is far more grievous an error than all the guilty men “legally” killed. In contrast I would argue the same applies to abortion and we should not terminate those who cannot speak for themselves. I do not support school sponsored prayer, or even prayer at a public event. At the same time I feel it is wrong to tell someone they cannot pray or express themselves religiously, both positions fail to respect the individual. I do believe the environment should be protected at all costs, to not be a conservationist is only destroying the world for future generations. However I am of the opinion Global Warming is complete hogwash. Regarding health care, as dutiful men we need to care for the indigent and infirmed, but government is least likely the right mechanism to transfer such wealth whereas charity and selflessness will more efficiently provide.

I move far from the left on the concept of income redistribution and sincerely believe all men are created equal, and therefore have an equal chance of success. However, I do believe some amount of government regulation is necessary as many men will choose cheating and scheming over honesty. Like many on the Left I believe the Patriot Act was the most abusive attack on our civil rights ever made and it should be immediately abolished. Unlike those on the Left I believe the Founding Fathers did not see the Constitution as a living document, fearing tyranny, and wanted to give liberty from government to future generations.

I can state my position succinctly: I love my country, but fear my government. “When the people fear their government, there is tyranny; when the government fears the people, there is liberty.” – Thomas Jefferson.

March 25, 2011 by Big Government General Rant

Destroying Futures

Imagine earning $30,000 (3 Trillion) per year but having bills and obligations of $42,000 (4.2 Trillion) per year. Additionally, let’s assume you have a spouse and two children with wants and desires. With your income falling short you would know radical changes in your lifestyle must be made and if you are a Dave Ramsey fan you know every expenditure would have to be considered and nearly one-fourth must be cut. However, the kids will complain if you cut their movies, food, school activities, clothes and even iTunes budget (government spending). Your spouse does not want to discuss the issue because she feels the problem will go away, as if by magic, and there is no reason to upset the kids (political debate).

However, there is an answer: debt. Of course, a loan to create a source of “income” can be created (deficit spending). For instance, a second mortgage on your home could fund the shortfall and maybe allow you to buy a new big-screen television or car, a hugely popular decision at home. But this only works for a while, quickly you discover the interest only payments add another $500 per month to your obligations, thus you are now using the debt taken on to pay for the original shortfall and the new debt (treasury auctions)! You have looked for ways to increase income, but the economy isn’t growing and no one is hiring (tax revenue). Your anxiety increases because you know this cannot keep going and bankruptcy may be the only way out.

One day however, your neighbor Fred (Federal Reserve) knocks on your door and explains his multi-level marketing business is doing well and as long as he keeps getting new people involved his success will grow and he would like to help you. Hesitantly you agree to his proposal: he will paper over your debt (purchase bonds), and you can repay him in 30-years. Thoughtfully you think his proposed near zero interest rate and 30-year offer has to work. At age 50 it is even unlikely you will be here in 30 years to deal with the repercussions. With a wink, Fred explains your children will assume the entire debt, with interest. After contemplation you feel it is better to risk your children’s future than to reign in your lifestyle today, and hurt their feelings, and since they do not get an opinion (can’t vote) they will never know. Like a deal with the devil, you know there is no way out.

March 4, 2011 by Capitalism Depression Great Recession preparedness taxes

Wisconsin

I debated whether to offer an opinion regarding Wisconsin, but knew I could not let go of this protest. I am impressed with the 65,000 plus protesters that believe in something strong enough to brave the cold. More important to see debate with such passion engaging on our own soil gives me hope toward future revolution against our government and the tyranny we face. It appears the press – from the left and right, have managed to blur the issue at hand as there only appears two possible opposing views when tapping MSNBC or Fox News. I hypothesize three parties are now at war in this country: Public Servants, the Ruling Elite (executive pay), and the Private Sector. Thus, a two pointed perspective does not work and furthermore the issue at hand is not about trimming union rights, but re-aligning public servant compensation.

Austerity measures will generate class warfare and in this Great Recession the compensation of the three parties has diverged greatly. Executive pay remained safe and increased greatly and Public Service payrolls have increased far greater than private payrolls. On the other hand, the Private Sector has suffered irreplaceable job losses, flat wages and lives in fear of a pink slip delivery tomorrow. At the same time the Private Sector is asked to pay more income tax, more sales tax, more property tax, and more fees to pay for the perpetuation of Public Service compensation programs and to bailout reckless executives who lost gambling bets against the masses during the debt fueled frenzy.

Ancient Rome succeeded through an ever expanding territorial economy fueling the wants and desires of Caesar. The masses found relief through entertainment at the Coliseum and a sense of safety, but yet traded liberty for trite compensation. Similarly, America is like Rome; rich Senators, a small ruling class, and wealth obtained for a few due to the destruction of others. Our masses are entertained by media and sports, not taking time to understand the reason behind the need for change. Like Rome our public servants are protected by a never ending spigot of tax dollars and turn against the working class and income earners for whom they supposedly serve.

It is forgotten that our children will ultimately pay the price. Something is happening in America right now, and it started with the bursting of the debt bubble three years ago. Denial has not worked and protests will become more common, maybe leading to revolution. I am concerned for my children’s future and cannot imagine the tax burden, inflation, and tyranny they will face if we do not stop opposing the protesters in Wisconsin.

March 4, 2011 by Big Government Depression Great Recession Health care taxes