So I listened to Obama's Speech Last Night...

What a good speaker. I have listened to him before, but I really wanted to hear what he had to say as he prepares to close the door on Hilliary Clinton, who has run the only political campaign worse than Senator George Allen in the modern political era. Since Barack is the likely democratic nominee, I wanted to hear directly from him what he is all about rather than listening to what others say he is all about.

First and foremost, Senator Obama is about presence. He has it and he uses his presence well. It comes naturally and is as genuine as homemade apple pie. He does not hide who is nor does he obfuscate issues to stake out multiple positions to please the audience at hand, while leaving enough wiggle room to stake out an alternate position for another time (like Hillairy does) No, I think Obama is who he says he is. Not Unlike George Bush, I believe that Obama believes in himself and his convictions enough that he will not stray from them to score political points.(Unlike either of the Clintons) Also, like George W. Bush, I think that Senator Obama is comfortable in his skin, he is satisfied with himself. I think he wants to be president very badly, just like President Bush did eight years ago. However I think that like president Bush, Obama does not have to be president of the United States to feel that he has led a successful life, it will not be the center of his being, but rather Barack's center will be reflected in his presidency should he win this November, or a November hence. Like president Bush and unlike the Clintons, I think Barack Obama wants to be president because he honestly feels that he can do some good for the country with his leadership and his ideas. I agree with him on his ability to help the country with his leadership skills, it is his ideas on what he wants to do that scare the crap out of me.

I am not convinced that anyone should be president of the United States if they have never held a job for a substantial period of time in the private sector (10 years sounds about right, so they will have seen boom and bust cycles...and depending on your area of practice, being an attorney may or may not count). Obama is a prime example of why this prerequisite should be in place. It is clear from his plans that he has no clue how the American economic system works and the potentially disasterous role govenrment can play when it becomes too heavy handed. As seen by the disasterous effects of FDR's new deal which deepened and prolonged the US economic malaise, the economy does best when left to the forces of the market and free will.

If you listened to Obama carefully, it seems that every American is an out of work factory worker whose job has been exported to China. It seems that every American does not have health care, cannot read (maybe this is why they are out of work), and is about to lose their home because someone tricked them into buying a house they could not afford. I don't know anyone who fits that description, but it makes us all want to reach out and help these people...where ever they might be. Everyone according to Obama is a victim of circumstance. It never occured to a factory worker that they might need to upgrade their skills or that their union might be selling them down the river trying to get above market wages for jobs that have long since been commoditized. Apparently someone held a gun to the heads of every family involved in the "housing crisis" and made them sign mortgage agreements for half a million dollar loans with payments that started out at only $ 500 per month. It does not take an MBA to do the math that shines the light of day on that deal. Obama will fix all of these problems, with government programs from the infinite funds apparently available to the US government.

What Obama does not understand is that in order for government to have any money to spend (or give away), something productive needs to have happened first. Someone needs to have made something and sold it, or provided a service, or grew something that was sold on the open market. The US economy frankly has been too good at generating funds that end up in Washington, so good to the point that seemingly bright and reasonable people like Obama assume that there is a never ending source of funds through the tax system or through the credit markets that can provide for every government social mandate under the sun.

Obama wants universal healthcare for everyone. Great thought, how are going to pay for it? In a world of fee for service world of compeitive markets, everyone would have universal access to any healthcare they could afford, and at market prices rather than inflated managed market prices. Catastrophic coverage would be affordable and manageable for everyone. However, this is not what Senator Obama is thinking. He wants the same system that supports congress and federal workers rolled out to 300M americans. Okay, but what will my tax rate be when this program rolls out, in 4 years as he claims? If it is anything like Canada's system, get ready to figrue out how to live off of .30 of every dollar you earn. How many jobs will that kill? How many more will need to live off the government dime when meteoric rises in taxes kill our economy?

Obama says he is a free market capitalist which is true, expect for when he isn't. He wants to make sure that good jobs remain here in the United States, and that he will make sure that the incentives are there for high paying manufacturing jobs to be created on US soil. Well, that sounds great, but what is the cost? What if those jobs belong elsewhere? What if market equilibrium states that the product design, architecture, and management belong here, but the actual production is best suited for Brazil, China, or Mexico? Are consumers going to pay more for the products that are 100% US made versus a Korean alternative that is just as good, but much cheaper? Market economics of the past 30 years says "no". So how many jobs will that cost us? How many more will need government healthcare because their company went belly up trying to compete with truly global alternatives?

Obama says he wants the best education for all of the children in America (you know are are officially a politician when everything starts to boil down to "the children") Okay, that sounds great, how are you going to do that? Well, according to Obama, underperforming kids, needy kids today in the inner city, in rural america, and in ethnic neighborhoods are not "my problem" becuase they do not look like me. Well, not exactly. The kids aren't "my problem" rather they are their "parents responsibility" and parents who choose not to raise their kids in a safe and healthy environment, well those are the folks who are really "the problem" and that transcends race, religion, geography, ethnicity. So Obama wants to solve the "children problem" by rewarding teachers with pay inceases. He wants to especially reward the best teachers with big pay increases. Okay, that sounds fine. But what about the crummy teachers? How are we going to weed them out? Who is going to fire them? What about school choice? Why are kids in crappy schools doomed to stay there because teacher's unions and local school district employees want to keep their jobs and their district funding? If we really want better education for all kids (and I think we can agree that we all do) then let parents and students find the best schools (public, private, religious) and send them there. This is such an easy problem to solve, but the grip the teracher's union has on the democratic party reduce sincere smart people like Obama to spouting party-line drivel about teacher pay raises and "real accountability" (whatever that means) and throwing more money into a totally ineffective public school system without fixing the problem. Let kids go to good schools, and schools will get much better, and bad schools will go away which is the best thing that could ever happen to education in the United States.

Obama went on and on down similar paths. I truly beleive that Obama believes he is on the right path. I believe that he is a good, honorable, and decent man. I think he inspires many. I know it is anathema to the left but his belief and loyalty to his core is similar in many ways to George W Bush. I respect that in both men. However, please show me the details of how we get any of this done in the real world? How will we pay for all of the programs Obama wants to implement? How many jobs will be sucked from the private into the public sector? I wish I could talk some sense into Obama on these and other issues, but to his credit, this is who he is and what he believes. I would be disappointed if he moved off his worng headed positions.

BTW, I ddin't even meniton how off base Obama is on the war on terror and fundmentalist Islam, but these positions were so far off base, I really thought that adding this to the list would just be piling-on.

Cry Me a River

Virginia governor Tim Kaine reports that by the year 2010 Virginia may face a budget deficit to the tune of $ 1.4 billion dollars. We know two things about this predicament. First, the prediction will be wrong, and probably way wrong. These projections are always wrong and I see no reason for the budget prognosticators to get it right this time. The number could be bigger, it will likely be smaller, but it will not be $ 1.4 billion dollars. Second, the reason for this projected budget shortfall has nothing to do with the Commonwealth of Virginia not collecting enough tax revnues. Over the past decade, the Virginia tax revnue growth has outpaced inflation, out paced Virginia GDP growth, and outpaced Virginia's population growth. The only thing that the Virginia tax revenue growth has not out paced is the rate at which the General Assembly, in concert with Virginia governors, have spent tax payer dollars. Now we are facing a projected $ 1.4B budget shortfall and the state's delegates, senators, and governor might have to cut pet projects or layoff workers in the bloated state government...Cry me a river.

Is She Careless or Contemptible?

On Sunday February 10th in the Metro section of the Richmond Times Dispatch, reporter Melodie N. Martin covering a rally protesting immigration legislation before the General Assmebly writes "more than 100 people gathered in Monroe Park yesterday to protest anti-immigration legislation in the General Assmebly". I think Melodie N. Martin, staff reporter for the Times Dispatch ommitted one important word. That word is "illegal". The Virginia General Assembly is not considering anti-immigration legislation, they are considering anti-illegal-immigration legislation...as they should be.

This significant ommission by Melodie N. Martin, staff writer for the Times Dispatch can lead the reader to one of three conclusions. The first is that Melodie N. Martin, staff writer for the Times is not a very good reporter. She is at the very least careless and should have caught her error. The second conclusion a reader could draw is that Ms. Martin is not very bright, and that she does not really understand the difference between legal and illegal immigration. (actually a perceptive reader may combine both of these and conculde that Melodie N. Martin is both careless and obtuse) The third and more likely conclusion, is that Meoldie N. Martin, staff writer for the Times Dispatch let her leftwing compassion and her open boarders agenda get the best of her and she reported not the facts, but what she believes; that any legislation to restrict illegal immigration is in fact anti-immigration legislation.

Melodie N. Martin, staff writer for the Times Dispatch slapped the face of every immigrant in the United States who followed the rules, came in according to the laws of this nation, and built a better life for themselves in this fabulous captialist society. Meodie N. Martin may be able to but may choose not to see the difference between legal and illegal immigration, however, the differnce is clear to most Americans. Immigrants can come to the United States according to our laws, or they can ignore our laws and come to the United States as outlaws. Any legislation that makes it harder for outlaws to steal from citizens of the United States and those here through legal process is needed legislation. Any legislation that cracks downs on employers exploiting illegal workers is a good for both the United States and those who chose to come here illegally. Legislation that enables local law enforcement officers to identify and hold illegal aliens who have committed a crime during their time in the US will help make our cities and towns safe for its legal residents. Melodie N. Martin, staff writer for the Times Dispatch may not think this is that case, but her reporting should not make her opinion on the issue so obvious. She is a reporter, not a blogger.

5 Points to Ponder

1. If the economy really is teetering on the brink of recession, make sure to vote for democrat candidates who will raise taxes this fall to guarantee that we will have a recession...and a longer and deeper one at that. Politicians have to understand this reality, so assuming they hold to their pledges to stick it to corprations and "the rich" (whatever that means) with tax increases, they must believe that their social redistributionist agenda is worth the price of a deep recession, because they will assuredly cause one.
2. Choking off the engine of econimic growth will do more societal damage to those in the "middle class" that democrats want so desperately to "help" by buying their votes with govenment handouts. Who will weather a democrat fueled recession better, the fat-cat with millions in the bank or the tax rebate recipient who just spent their $ 600 to pay their bills? Think about it before you vote this fall.
3. About the only thing that the government can do with 100% certainty to a thriving economy is screw it up. If left alone market forces will distribute resources and rewards to those who deliver value to the market. That is why our system works so well. When pols leave it alone everyone who chooses to participate in the economy is rewarded, when politicians try to jury-rig the system, they throw the entire system out of balance.
4. No matter how great the United States economy performs, with 300 million citizens in the US, there will always be someone down on their luck or who has washed out of the country's prosperity. The media will always find this person and present them as an example of pervasive problems that need to be fixed with government programs and regulation.
5. Virginia governor Tim Kaine seems to be a really nice guy who genuinely cares about people. However, he is the prototypical meddling politician. He firmly believes there is no problem in Virginia that cannot be solved with a government program. From second hand smoke to sub-prime lending practices to pay-day loans. Where ever a perceived problem exists, Kaine is there with a new program or regualtion...he is the consummate pointy-headed liberal who intends to protect everyone from themselves...according to his personal leftist view of what is best. Puh-lease...for being so smart, he sure acts dumb.

You Can't Cherry Pick Benefits of Global Trade

I saw a politcal commercial the other day bemoaning the loss of jobs in the United States. The message was basically that there are factory workers who have loyally worked for 30 years in a plant only to have it shut down, the work moved to China leaving the employee apparently penniless and lacking for all but but the most bare essentials of life. Not that facts are ever relevant in a political campaign, but how can we have penniless factory workers sitting around after their work was moved over seas when the United States has essentially been at full employment for the past 6 years and aliens are streaming over the boarder to do work that "Americans won't do". Well, if I were a penniless, unemployed factory worker with 30 years of experience wokring in a plant, there would be darned few jobs "I wouldn't do" in order to support myself. The net of the political message is anti-globaization and protectionism for American factory jobs.

The problem is, we can't have it both ways. We cannot cherry pick the benefits of global trade without the associated "costs". The United States has benefited greatly from global trade. Our standard of living is higher as we have far better and cheaper products that support our business and daily lives. We import goods that are far more price effective than if those goods were made in the US. We want the least expensive, highest quality products we can get as consumers. The cost of benefit is that labor needs to come from its most efficient and most cost effective source. As the market stands today, for low to moderate skill line-manufacturing, the best place to get that labor is not on American soil. That doesn't mean that there are no jobs in the US, jobs are plentiful...and benefits that go with them.

So which is it, do we want the most cost effective products and the most robust economy or do we want to keep jobs that belong over seas in the United States and pay the price at the cash register everytime we shop& Do we want to pay the price in the growth of our overall economy? We cannot have it both ways, we cannot cherry pick the benefits we want in the global economy. If you want to pay $ 2,000 for a laptop instead of $ 600, then let's keep those manufacturing jobs on US soil. Think long and hard before you answer, because the actions, those implied in the political ad, will have dramtic consequences on your life and mine. Think about it before you decide who to support this November.

If you have lost confidence in your Federal Government, this should help...

For those worried that the federal government is full of inefficient bureaucrats spinning in endless loops of paperwork, never really getting anything done, you may now rest easy. The agencies of government really are able to come through when the chips are down and make a decision of crushing importance when needed. For instance, the Federal Communications Commission has decided to fine ABC for indecency on one of its premier prime time television series. With a thumb of the pulse of American decency, the FCC has decided that a nude scene in ABC's prime time series NYPD Blue has crossed the line and ABC will have to pay a fine of $ 1.4M for their lapse in judgement.

Wait a minute, what is wrong with this picture? What is wrong is that the NYPD Blue episode in question ran in 2003, during the first George W Bush Administration, when Donald Rumesfeld was still Secretary of Defense and the Atlanta Braves still were contenders to win a world series. Well, that is impressive. The FCC has finally passed judgement on the decency of television episode that ran 4 years ago, in a series that ended 3 years ago. If that is not effective, good government, then what is? I wonder how many man-hours were spent on this monumental decision? Did they start contemplating "action" right after ABC ran the episode or did they have to ponder their next move, for a year or two before mounting their crusade to save American culture, from a television episode that everyone forgot about, like 3 and a half years ago.

Relevant, good government like this really inspires me, makes me want to serve the best interests of humanity. I mean, if the FCC come come to this kind of a blockbuster decision in 4 short years, imagine what each and everyone of us could do to better mankind over that same period of time. Besides the inspirational value of this decision, this also makes me wonder, what are these same people working on right now? What other obscure, long since forgotten television tidbit is under review?

I also wonder, are the action-oriented FCC employees getting a tax rebate? The reason I ask is that if the goal of the stimulus package is to get money back into the economy, the FCC circus clowns should have a decision about how to spend their rebate checks by the end of the decade. Of course by then, they probably will have lost the checks anyway.

I have a Question

I know nothing about celebrities, but I will pose the question anyway. Why did the Olsen twin who was friends with the Brokeback Mountain actor who died last week feel like she had to make a statement to clarify their relationship? I think it is sad that she had to make a public statement to clear up rumors that were swirling. I feel bad for these folks that live their lives under a microscope. Why should she have to explain her relationship with this guy to anyone?

So, people who did not pay any taxes are getting a rebate. I would like to know, what was the total in taxes paid in tax year 2006 by people who will be getting rebates. How much money did they send to Uncle Sam in federal income taxes. I would then like to know how much in "rebate" money is being sent out. Then, I would like to see which sum is greater. Finally, since so many Americans are getting tax rebates, whether they actually paid any payroll taxes or not and since the rebates are phased out as income levels increase to people who pay the bulk of the taxes in the United States, won't the rebate further skew the percentage of the tax revenues provided by the upper income brackets? BTW, the answer is "yes".

So when the tax-raising ninnies who are running for president talk about soaking "the rich", just remember, they are already soaking wet and they just got a little wetter.

Big Oil Boys, How dumb can they be?

You know you are doing a bad job of public relations when Hugo Chavez makes you look bad. The big oil companies are recording record profits while we are all living with $ 3.00 a gallon gas prices. I can understand the arguments on both sides of the equation in terms of whether the oil companies are simply reaping the rewards of their investments and leveraging the laws of supply and demand or whether they are greedily gouging the public and taking advantage of the current market conditions that are for the moment tilted strongly in their favor.

What I cannot understand is how the big oil companies are letting a 2-bit despot like Hugo Chavez make them look bad. While the US oil companies are busy tallying their current quarterly earnings, Chavez has, with the help of several empty-headed US celebrities, won a public relations coup by being the only big oil company giving away heating oil to low income citizens of the United States! How bad must one be at public relations to get body slammed by a money grabbing, property seizing, election fixing commie?

I do not think that anyone is "owed" heating oil and I certainly do not want the US government in the oil distribution business even if it is for low income families. However, just how obtuse are the executives at Texaco, Exxon-Mobil, and Aamaco for missing an opportunity to make their companies look good, help some people who need it, and create a general image of big oil as a good corporate citizen at a time when everyone and their Aunt Tillie is pissed about the price of gasoline? If anyone ever had an underhanded beach ball pitched to them just waiting to be knocked out of the park this is the chance. All I see is the big oil fat cats getting fatter, while Hugo Chavez takes a handoff from dumb-ass Sean Penn and does an end-run on them. Sometimes I wonder how these guys ever find their way to the office in the morning.

Thoughts on the Economic Slowdown

So everyone is nervous that the economy is slipping into a recession if it has not already. Now everyone, including the democrats are suggesting economic stimulus packages that put more money into the hands of US citizens through tax rebates, tax cuts, or both. Hmmm, when we want to get the economy rolling we lower taxes, we get money into private hands...why is this a good idea now, versus always? If we placed a perpetual bet on growing the economy through lower taxes and more money in the pockets of the consumers, wouldn't we be better off? Seems too easy. Maybe that is why it is so difficult for those in Washington to comprehend.

I had a very good client of mine give me some excellent advice early in my career. He said "bring me projects that are financial no-brainers, because I can usually get those right". Lower taxes is a no-brainer, but Washington rarely gets it right.

BTW, if someone didn't pay any taxes, how can they get a rebate? What is being rebated? I guess a rebate to someone who never paid into the system to begin with is Washington's term for a gift.

As lower taxes seem to be the universal remedy for a slowing economy, it seems to me that higher taxes, like big corporate spending during the economic boom cycle, is simple government over spending. In the private sector that is called corporate mismanagement and greed. In government circles it is called "investing in our future". However, if we were really investing we would see a return once in a while?

Can Anyone really Survive...a Recession?!?!

World stocks routed on fears for economy – This was a Yahoo Finance headline today

I guess everyone in the news media is cognizant that if a recession hits (versus slow growth) that every human will be instantly vaporized….or at least we will all be destitute for years to come. Holy mackerel, has anyone in the media ever heard of a recession before? I can distinctly recall 3 in my working career. Does any business writer understand that we have endured recessions in each of the last decades and that after each recession, the economic output and market valuations of the United States roared past the previous record highs? Does anyone get it that recession is a normal, albeit unpleasant, aspect of the business cycle?

Maybe there are too many reporters who cut their teeth during the run up to the Y2K spending frenzy and the internet bubble who have read about realistic expected rates of return, but secretly, in their heart of hearts they really do think the 19% returns year after year is the norm. While no one looks forward to a recession, and I was not convinced there would be one in 2008 until every media outlet jumped on the doom and gloom bandwagon, the reality is that recessions are a time for economic and corporate cleansing. Companies that grew too fast and too fat over the last expansion trim their excesses and refocus on activity that yields the highest return. Prices of “things” that had gotten out of balance reset such that any given market is closer to a state of equilibrium.

Recessions happen, no one likes them, but smart business make good investments during recessions and come out much stronger. I am not sure I can stand the media run up to this self fulfilling prophesy of Recession 2008. I almost wish that we could declare it started, so we can be done with the headlines about the world coming to an end.

By the way...I am not big on predictions (though my LSU wins the National Championship was totally on the money) I predict that if we do slide into recession, thanks in part to the media frenzy, that if a democrat wins the presidential election, the economic news will shift dramatically until we can declare that Hilliary or Obama has pulled us out of the republican economic quagmire. I further predict that if one of the democratic hopefuls makes it to the White House and raises taxes and increases entitlements as much as they are promising on the campaign stump, we will have yet another recession and a nasty one at that. Economies work better when they are left alone. Hilliary and Obama seemed determined to "level the playing field" by making everyone poorer through a smaller and less efficient private sector. Talk about a headline for Yahoo Finance...that will never be written.