I THINK THE ANSWER IS TERM LIMITS

30 12 2011

Authored by William Robert Barber

The polarized respondent to the query: What caused the 2008 financial crisis is intriguing. Admittedly, as a conservative, I am particularly interested in the liberal progressives’ deductions, inferences, and ultimate conclusion; however, the Republicans’ reasoning for not engaging their congressional counter-parts on the Fannie/Freddie issue more forcefully is also of quirkiest interest.

The Democrats accuse the greedy Wall Street personas, the reproachable bankers, insufficient regulation for the financial meltdown, and resolve that capitalism, the free enterprise system, and possibly even the private ownership of certain property is effectually an outdated economic methodology; one that requires an extensive European modeled upgrade.

For the Republicans, conservatives as well as Rhinos, the cause of the financial crisis is simple with most of the blame attributed to the score upon score of years the Democrats controlled Fannie and Freddie. This Democratic control of the means to finance coupled in with the idea, that home ownership (like healthcare) is a right, and the forcing of banks (by congress via legislation) to lend money to those that could not substantiate financial wherewithal was by any reasonable assessment a financial catastrophe awaiting opportunity. To add more wood to this fire, banks-broker-dealers, and mortgage lenders found an additional length of rope to hang everyone when they tied in the creative financial instruments of mortgage-interest securitization, asset-backed obligations, and mortgage derivatives pledged to underlying value. Naturally, there were warranted allies to fill in all of the blanks. Exampled by government created rating agencies who took a look at the transaction and rated them AAA or AA+. The downside was protected by the large, highly rated, multijurisdictional AIG insurance corporation; this was the ‘put’ surety to cover the outside chance of the real estate market imploding to the downside.      

Well, now that the blame has been assigned, rightfully or wrongfully, along ideological lines, and the blame-game considered passé, damage complete, the supposed rescue in place; now the Securities and Exchange Commission files a complaint. The charge is against former Fannie and Freddie executives. Claiming that the rascals held a lot more subprime loans than they publicly called subprime. Suggesting that they in collusion with private sector entities Fannie and Freddie drove down underwriting standards such as co-sponsoring in 1999 of Countrywide’s “Fast and Easy” program. A lending policy that gave buyers loans without proof of their income or assets. Interestingly, the lawsuit is prompted not by justice for the public but to protect the shareholders of Fannie and Freddie?

Imagine right up to the moment of seizure the Bush administration along with representatives Frank and Dodd were touting that Fannie Mae and Freddie Mac were well-capitalize and solvent.

In every trade there needs to be a buyer and a seller. The only real requirement is that parties agree on a price. On the option market there is a ‘call’ to the upside and a ‘put’ to the downside. Real estate is a commodity. Economies of all sorts ebb and tide; rise and fall, such is the natural order of a free market. Bets were made that favored an ever appreciating real estate value; surety to the downside was paid in the form of a premium to AIG to protect the depreciative possibility.

What went wrong? No one knew the magnitude of bets made to the upside; AIG did not charge enough of a premium to offset the risk. When the real estate market crashed there was a run on liquidity AIG ran out of cash/liquidity and could not pay off on the surety to the downside.

The bugle blasted. The government to the rescue, they printed the paper and saved the day, or did they?

Politicians protect the ideological values of their constituencies. They do so at the cost of fiscal discipline, prudence, and the logic of common deductive sense. Politicians strive to attain and retain power. If we citizen want government to function we must enact term limits. Term limits eliminate the possibility of professional politicians and therefore to a large degree we eliminate the reasoning of enacting stupid for the sake of reelection.

My fear of course is that Obama will be reelected, government consumes more of the private sector, and America declines into another European like country. I am not sure we can print enough paper to get us out of that jam.  





THE PAYROLL TAX STUFF

25 12 2011

Authored by William Robert Barber

This most recent controversy regarding the Obama two month continuance of the payroll tax cut is the perfect example of congress’ inability to prudently address issues of national importance. The supposed reason for adapting this initial one year decrease on the payroll tax was to stimulate job growth. The idea is or was that (for those that work) these persons would take home more money. The conclusion being, that if these persons take home more money they would spend more and thus stimulate the economy. Such a cash infusion would be discretionarily imputed directly into the   economy; resulting, as the reasoning follows, in an increase in consumer spending, which would eventually, force merchants to hire more people.  Well, it did not happen.

Whatever those that work did with the extra cash it was not to go out and purchase goods and services. There is some evidence that these working stiffs bought down existing debt instead of incurring more. A logical, I-now-know-better response to any effort that did not work is (in the first cause) not repeat the effort; well, not so it seems in the world of congressional politics.

It is far more important for the Democrats to position the Republicans (irrationally) as the party that favors millionaires, a party that is fundamentally unfair and will not give the average Joe a break.

It is far more important for liberal political strategist to point out that the extreme wing (Tea Partiers and the far-right) of the Republican Party will not compromise. That they are ideologues instead of fair mined; that their ideology is valued above the best interest of the nation.

Pundits of political persuasion, news-reporting-media, their opinion-makers, those that craft poll questions, Senators Reid and Schumer, and “the great campaigner” President Obama, have framed this issue as an economically sensible approach to the country’s current economic malaise. Really! The nation is burdened with a 15 trillion dollar debt and the good idea is to discount the specific tax revenue designed to fund social security? Hmm…interesting! If payroll tax abatement is a viable economic tonic, a tactic warranted by wonks and clever economist, if this is really a good idea, why then does President Obama, Reid, Schumer disbelieve that significantly discounting individual and corporate tax is a great idea? Why are they against broadening the tax base and actually have all the people who earn an income, regardless, of how much they earn, pay a share of the monies used to enable the benefits they partake of?  

The answer to the preceding question is simple: vote purchasing. They have promised and will continue to promise, all those many millions of voters that earn less than $45,000 per year with deductions, “no worries, your taxes will not go up, I and my Democratic friends will tax the rich. They will pay your share of the tax burden. Just remember to vote Democratic across the board.”

From a political gamesmanship prospective the Republicans foolishly managed this entire issue of payroll tax holiday. One reason was they thought that this particular issue was about fiscal governess they had no idea it was solely a political gesture designed to erode the ethos of Republicanism and favor the tax & spend Democrats. The Speaker of the House naively granted the Democrats and Obama a winning hand; of course, in two months this very issue comes up again. So the dealer will deal more cards and give each player another opportunity to make their bets.

Regretfully, the recent payroll tax melodrama as expressed by the political wheeler-dealers of the Democratic Party, the media’s reporters, and the pundits’ explanation of what’s happening is the result not really of the relevant particulars, but, with a blatant lack of strong, believable, vision persuasive, charismatically enhanced, forthwith style of political leadership. America is engrossed in the process and has abandoned leadership for ambivalent minimalism. Its senior management consults more than leads and is more by practice referenced as sophistic than stoic. Perception and attitude run together…we as a nation will never be any more than we believe ourselves to be. So if political gamesmanship is our preference rather than addressing the pressing issues of fiscal solvency…it is impossible to achieve sound prudent governess. 





WE ARE DRIFTING ONTO THE LAND OF NEVER-EVER

19 12 2011

Authored by William Robert Barber

Government just cannot keep its hands out of the marketplace…in my business credit card processing, the Dodd-Frank financial over-all law has, with the original intent of lowering debt-fee’s by establishing a cap on the fee amount has actually done nothing less than increase debt fees for the majority of these types of transactions. The IRS not to be outdone has mandated that credit card processing companies report all transactions, as a result, merchant pay an extra monthly fee for this service. Naturally, in the end of the end, it is consumer that pays the fees as merchants raise prices on goods and services.

I realize this government interference is a commonality with a very long history of constancy; nevertheless, one would think these Harvard and Yale graduates knew better, but every year they prove me wrong.

It was the federal government that created rating agencies; after the last economic turn-down, it was the federal government that turned their wrath on these very same agencies and the banks, investment-bankers, government entities, foreign and domestic, and broker-dealers that weighted their bets on the rating of a particular investment. Today the fed’s are haggling over the language of rules within the Dodd-Frank Bill so to diminish the reliance on rating agencies while still insisting on their use. So my assumption is that in the near future there will be a new rating system. Wherein the top tier of risk-free and therefore audit-valued investments will be U.S. Government debt, now isn’t this interesting? Domestic banks, insurance companies, broker-dealers, and traders of every description will be, in essence, induced into purchasing U.S. debt. In other words, to the disadvantage of corporate and securitized obligations it is the federal government that has, by rule and regulation, the competitive edge. Once again it is our government in a head to head contest for the available cash to invest in direct competition with the taxpaying private enterprise that pays the government’s debts.

One must ask: Is the amount of money spent in this Herculean effort to eliminate the risk of an economic downturn worth the effort and the cost?

Of course the issues addressed have more to do with political nonsense and ambition then it does to do with protecting the taxpayers form another bailout. My anxiety is that politics will triumph over the covenants of rational and reasonable, politicians will utilize the utility of fear to transcend prudence and the nation’s economy will suffer.

I wish I could find a viable haven to invest with absolute confidence my citizenry time and energy; but, all I can really do is choose the least harmful political party. And today that is the Republicans. I do understand there are many intelligent, smart, patriotic, and cool Americans who defiantly disagree with my political ideology and that such disagreements are accepted and expected. But I do think that we can no longer tax and fee our way out of our economic predicament. I do realize there are those that consider differently, however, just as they have their intrinsic values and their particular interpretive of global events, I have mine. I think all us Americans are seeking a solution to our profound disagreements. If the nation is fortunate the election will settle all such differing and abate befuddlement. But, more than likely, this forthcoming election will not resolve our disagreement; it will however set a vector while we all wait for the next election.   

I do wish I could believe that government is sanguine, righteous, wise, above the chaos of politics and prudent in legislation, spending of the taxpayers funds, noble, and lawful; the truth is I cannot. Well, what to do, what to do, I just found out that Santa Claus is funded by the fed’s and all the elves are joining the public employees union.

Merry Christmas to all and I wish the very best for 2012!





AMERICA THE SUPERPOWER

17 12 2011

Authored by William Robert Barber

The Spanish American and the subsequent Philippine American War launched America onto the global stage of martial intervention. For preemptive reasons or a defensive reply to aggression, for causes misplaced or misinterpreted, the United States have expended its blood and treasure virtually all over the world. Subsequent to the experience of over hill and dale expeditionary forays, two world wars, and numerous police actions the aggregation of which equates into thousands of casualties, trillions of dollars, and oceans of tears; the nation is now obliged as the world’s super power.

Interestingly, it was the winning of WWII that initiated the coming out of America as a superpower. For America, super-power status was not a choice but a result. In the current concerns of nation state rivalry, it is America’s multi-venue worldwide disbursement of commercial, as well as, deployed, technically superior, combat experienced martial forces that offer the warranted-alternative to disagreeable possibilities.  As such, America is a force of and for consideration in regards to any Russian or Chinese transnational exploitive ambitions.

Nevertheless, America is stymied. As if weighted down by an anvil and tossed into the sea, the nation fights to tread water. Its debt threatens its quality of international respect. Its armed forces engage in wars that effectually fiscally divest out of America so to invest in Afghanistan and Iraq. Its population divided by two diametrically different political ideologies and its government spending excessively more than it receives.      

As if entrapped within the nexus of it’s on making America has arrived at its self-imposed reality; if America wants to protect its homeland the traditional policy is that it must provide protection for all of its allies.  Inclusively, with rare exception, America must not only shoulder-alone the expense of such protection but, in addition, the nation finds it necessary in the case of Pakistan for example to payout billions of dollars to other nation states to bolster their armaments. It is as if America has positioned itself to extort from its taxpayers the ransom of an excessively expensive defense budget.  

After years of warfare America is now poised to withdraw from the battlefields of Iraq and Afghanistan; all the same there will be no melting of swords into plowshares. The world is acknowledged, even by the marginally naïve, as dangerous and tenuous. The nation’s duty roster calls for a stratagem that is focused not only on the reality of the moment but one that demands strategies that also provide a surety of national continuum into the foreseeable future.  

The God-awful truth is that peace is never secured. History has recorded the negligible effect of pretty words coupled with diplomatic niceties. Evidence documents that polite persuasion and social niceties will not stand alone to secure the future. Diplomacy is best advantaged by not having to trust in one’s best of intentions.

The threat in a nutshell is the pretensions of the strong, the unpredictable propensity of the weak, the often-foolish acts of the audaciously bold, the stupid, and the behaviorally dysfunctional is the combination that creates catastrophe. This combination, with devastating effect, has congregated many times in the past; it’s amassing is as inevitable as death being the result of life. The prevailing idea of war is that it has an end. It does not. War is as constant as commerce. Intensity may vary; indeed, one may find a time when the major powers were not actively trying to destroy the other, but, that time is usually made up by other then major powers actively engaged in trying to destroy the other.  

One may ask, “Well, what is the alternative?” How about not to believe in fairytales? Is it not in the interest of this nation to understand its reality? Living as if in a Pepsi Cola commercial will not deter aggression nor facilitate the continuance of overwhelming force. Have we Americans not wasted enough blood and treasure?

We have the inventory within our arsenal but we lack the will to act. We have the means to effectively engage the marketplace but we deny the movers and shakers the necessary risk-reward opportunity. We clearly understand that the legislative process is more than simply cumbersome it is a Byzantine structure coupled with purposeful ambiguity administered by professional politicians, unions, and their faithful bureaucrats.   

If blood, and treasure is the price of superpower status then let’s at least invoice all the beneficiaries.





THE RUBICON IS BEFORE US

11 12 2011

Authored by William Robert Barber

This next election will either reject the liberal progressive philosophy or sustain and confirm its continuum. The legislation enacted by the Obama administration will be validated, upon his reelection, or it will be annulled by his loosing. The heretofore power of the federal government will be curtailed and the tenth amendment to the constitution reaffirmed or the rights and sovereignty of States is denied. Public employee unions will prevail with as much or more influence or such will abate. The federal deficit will be decreased by real cuts in spending or marginally decreased by tax increases. The national economy will reconfirm capitalism or vector in the direction of more central planning and socialistic notions.

This next election will define America’s ethos, its capitalistic resolve or its insistence on striving to enable a European style system of economic, social, and cultural governing. This election is the most important clearly defining vote any citizen will make in its lifetime.

The mainstay issue is the definition of government’s role in a free society; there are citizens who have a belief that encourages greater government involvement and those, in bold contrast, that prefer limited governance. Many citizens find solace and surety in government assurances and are willing to trade-in potions of their individual liberty and freedom for such warrants. Others reject the entire conceptual of such a trade and indeed consider increased government intervention as unconstitutional, a threat to their Americanism, and downright tyrannical.

Each of us must choose. We must pose the question and answer; we must adapt a belief of certain governing principles. I have done so. 

I do believe government (another word for society) should provide for the mentally challenged, encourage the blind to cope with their handicap, materially support the insane, financially sustain the disabled thus unemployable, facilitate the needs of the elderly poor, and shield children from abuse.

I also reason that the coercive force of governmental agencies, departments, and offices should enforce the constitutionally lawful laws of the land. The primary objective of enforcement is so to insure that this nation is one of laws not of men. Additionally, the armed forces must, in the broadest context of meaningfulness, protect the nation and its people from martial aggression, sanction its sovereignty, and render by any means applicable unflinching surety for its future. 

I do not believe politicians should utilize the facilities of government to enhance their lives; this prohibiting would include the profitable facilitating of special knowledge to advance their person, family, or friends. These very same should be barred from pledging and promising to those that pay no federal income taxes a promise: ‘if you vote for me and my political party I and my party will insure not only your continuance of exception from federal income taxes; but, the richer than you will pay more in taxes to pay for beneficial federal programs.’

Presently, there are hundreds of thousands of jobs available in this country. Those that want to work can work. The issue for the intractable unemployed is more a manner of job position/description and pay then a matter that there are no jobs available. And as long as the government gives the unemployed money for not working, well, they will not work.

Of course the Obama administration and their sympathizers contend that well-known economist suggest that paying people not to work is the best bang-for-the-stimulus-buck and a darn good investment. If that is so then why not put the unemployed on a five-year unemployment agreement and pay them $100,000.00 per year? It is absurd to assert that paying people for not working is going create a functioning economy. The policy may not positively stimulate the economy but it will buy votes.

What the liberal progressives are saying is that if the government gives people money they will spend it and when that spending occurs the economy benefits. Hmm…I wonder (after unemployment insurance is exhausted) where the money from the government to the unemployed comes from. Oh yes, the government prints it or taxes the people to pay those that do not work.

Nevertheless, such wrongheaded illogically inspired nonsense will generate empathy and emotionally founded simpatico for the political party that endorses such payments. As for the politician or party that endorses a counter-argument, the politician that challenges the sense of it all, well, they will be defamed, belittled, and cast as a Charles Dickens Mr. Scrooge.

Because there will always be a distance between perception and reality all decision makers are professional guessers. Withstanding the enormity of the issue, these decision makers, by the virtue of their being are everlastingly striving to cast the illusion of propriety, prudence, and diligent sobriety on the outside while on the inside insecurity prevails.

But when the problem and answer is evidenced; doubt eliminated and the decision makers still cannot make a decision, the workingman’s definition of politics or incompetence has just been explained.

Here’s the deal. After spending hundreds of billions if not trillions of dollars, respectful of the merit of one’s political ideology, government cannot effectively, efficiently, or even with the bare rudimental of requirements service the desires, needs, or wants of it citizenry no matter how much it taxes, decrees, or resolves to facilitate. History has documented volumes of failed governable attempts to right a wrong, correct an injustice, enable a moral good, or interject its power where it should not have.

The Obama interpretive of fairness as exampled in his governance is not an economic policy, and if it was a policy it will not work; such, at its roots nothing less than campaign exuberance, has never worked. Government promises of surety are taken at the price of one’s liberty. In addition, one must resign oneself to the loss of individual choice. If one votes for a liberal progressive government one must as a consequence forsaken individualism and by deduction one has chosen collectivism; upon such an occurrence, eventually, the ethos of Americanism will be extinguished. This next election is critical…