The Open Hand vs. The Clinched Fist

President Obama's communications skills can't trump the theocratic leadership of the Iran. It is odd to me that Obama thinks of himself as so skilled or so effective in his ability to transcend years of hate, distrust, and cowardice that he feels he can win over the leadership of Iran with speeches and overtures of goodwill...that his open hand of negotiation and even friendship will somehow turn the tide of the fanatical Muslim world. How absurd. Does Obama understand with whom he is attempting to deal?

Maybe Obama should recognize that while his hand is extended and open the hand of the Iranian government would direct their agents in Al Qaeda or Hamas to saw off the head of every western "infidel" if they could and post the video of their vile actions on the Internet. Can Obama be so naive or so obtuse? These people hate him (though they may find his weakness quite useful) just as much as they hate any American. They would kill all of us, Obama included, if they could. These are people we want to reach out to with an open hand? To what end? How does one have a rational conversation with someone who would like to cut your head off? Why would you waste your time? Is this all for show? Is this part of the inner Obama hippie, make love not war, parading itself as foreign policy?

Maybe Obama will start to figure this out sooner rather than later. Ahmadinejad has already hurled a pretty big insult at Obama, charging him with being no different than George W Bush as he batted the Obama Cairo speech back over the net...I am sure that comparison with "W" is considered the lowest of low blows by the Obama people, but get used to it, the Iranians are just getting started.

This naive and unrealistic view of the world and how it works is why the president of the United States needs to have had a job before he or she takes office. This is why community organizers do not rise to great levels of success in business. The lens of community organizing apparently fogged by the haze of "Kumbya" and hubris - which is a dangerous mix when leading the only super power in the world. The world is nothing like the southside of Chicago. Skills developed organizing unemployed steel workers don't translate particularly well in dealing with soon-to-be- nuclear countries who would like nothing more than to detonate a bomb in an American population center.

Feeling good about that open hand? I hope Obama's other hand is drawn back ready to punch Ahmadinejad in the face, but I suspect it is holding a bunch of freshly picked wild flowers or it might have some more money for his friends at the UAW.

Climate Change Bill...I think not

Reuters breathless headline "House Passes Landmark Climate Change Bill" would be laughable were it not so dangerous. The headline should read "House Passes Economic Suicide Bill". Let's look at the reality of this idiotic legislation:

There is inconclusive evidence that 1) the earth is warming 2) man's activity impacts earth's warming or cooling. The data from the past 5 years shows that the earth and its oceans have actually cooled. This blip in time data is every bit as insignificant as the last cooling data from the 1970s and the warming data from the 1990s. The Earth marginally warms and cools. Got it. Let's go grill some burgers and and move on to issues that actually matter.

So the reality is that congress is addressing a problem that may or may not exist, that may or may not be caused by man's activities. Just to continue the illumination of the absurdity of of this "landmark" bill, let's assume that the problem exists and is caused by human activity. The effects of the activity of the United States is a small percentage of all human activity. The impact of this bill on the reduction of CO2 based emissions is a fractional impact of the United States' fractional contribution to the problem. Hence, the benefit will be a fraction of a small fraction and of no value whatsoever.

The economic impact however, will be an enormous boon to our economic competitors and an anchor around the neck of the United States economy. Energy is the foundation of any economy. This climate change bill will drive the cost of US energy through the roof. At the same time China and India will have unfettered access to the best, most reliable, and least expensive energy known to man. Therefore the United States will self impose an tremendous economic handicap upon itself....all in the name of solving a problem that may or may not exist with legislation that does not impact the "global" nature of the supposed problem.

This may be the stupidest idea ever to come out of Washington...and that is a low bar to get under. The only way the United States should inflict a cap and trade system upon itself is if India, China, Russia, and the entire European Union enact an identical system upon themselves as well. Otherwise the United States is the tree that falls inconsequentially in the forest and no one hears it, hence it is unnoticed, undetectable, and inconsequential in addressing the faux problem at hand.

I am not a big conspiracy guy, but this bill fails every test of sensible reason that there has to be something else going on. The bill will not have any impact on the global climate. The bill will levy a massive tax on the entire population of the United States. Finally, the bill will make the United States far less competitive in the global economy. Like water that seeks its lowest point, capital always seeks its highest return. Where do you think the highest returns for capital will be if the United States enacts this bill? Guess what, it will not be here and capital will migrate in massive quantities to countries whose leadership does not put an pistol to the heads of its economy and pull the trigger.

I know the day that president Obama signs this bill into law, which hopefully never happens, is the day all of my investments move into Asia, where capital is free to earn returns unfettered by the stupidity and/or subversive plans of US politicians.

Hypocrisy + Stupidity = Big Trouble

Remember when Obama woke up one morning in a rage because of the retention bonuses paid to AIG employees? While there was no doubt that his outrage was manufactured and his anger faked purely for stoking his populist fires of rich versus poor, it seems he either ran out of rage or forgot to muster that rage when the employees for Freddie Mac and Fannie Mae got their retention bonuses last week. While Freddie and Fannie are no less indebted to the government for their very existence, AIG is not the playground, or rather the honey pot, for former politicians to go and get rich. One can easily argue that Obama's feigned rage at the AIG bonuses was yet another example of his total ignorance of the business world. After all, if AIG is worth saving, and 165B "invested" to date suggests that someone in government feels that it is, then the task of saving AIG will require talented and motivated employees - who would stay if rewarded with a light at the end of the tunnel - retention bonuses being a standard tool for keeping talent in place when others are heading for the exits. So, while I understand the horrific public relations job AIG did justifying why they need to pay competitive packages to the talent they need to keep the doors open. The same argument could be made for Fannie and Freddie by anyone who has ever worked in the business world. However, why does Obama have selective rage? He clearly does not understand the "pay for performance" world in which most of us live, otherwise he would not have used the AIG bonuses to generate fake rage and score political points. I guess he scored all the points he needed or was oblivious to the fact that Fannie and Freddie employees got more in bonuses that did the AIG employees. Obama either needs to be consistent in his ignorance of business or own up to the utter hypocrisy of his actions. Neither bodes well for the future of our nation.

Shifting gears a bit, what would you do if a two-bit, pin headed despot had just demonstrated that he had a missile capable of reaching the shores of the United States...while members of the Iranian government, on the cusp of developing nuclear weapons watched the missile test with glee. There are a lot of things I would do in that scenario, but the stupidest thing that I could think of to do, and the absolutely last this I would do would be to cut funding for strategic, uniquely American missile defense systems. What in the world is Obama thinking? Does he think that by dumping on the United States in front of the rest of the world that everyone loves us now? Maybe this is how things work in community organizing circles, but when we are dealing with people who would love to detonate a nuclear device in Time Square, who cut people's heads off and post the video in the Internet, and who blow themselves up on crowded buses with school children on board, knocking the US down a few pegs in public will not mollify these people. Rather it will be seen as a demonstration of weakness and will drive further escalation of their fanatic fantasies. What a stupid move by Obama, no other way to call this one. The prestige of the Ivy League education is dropping like the stock market with every day in office. Makes me wonder whose papers Obama copied to get through school, because no one this obtuse can get through the day, much less graduate from Columbia and Harvard.

President Obama, What Comes After a Trillion?

If Barack Obama and his spend thrift pals in congress have their way, we may need to know what comes after a trillion because our debt will will past 1000 trillion in our life times and the Chinese will essentially own America and will do with it as they please.

It was interesting to me that Obama stated in his press conference that we cannot be a nation of individuals seeking our own self interest, but rather we have to be a collection of citizens as concerned with every one's welfare not just our own.

While that sounds great, it is not capitalism. The free market survives because everyone looks out for their own self interest and in doing so markets of free exchange form, value creation delivers wealth to those who best serve the needs of the market, and capital seeks it highest rate of return. This is how the United States has prospered and kicked economic butt for 200 years. It is hilarious to me that Obama is perplexed that capital does not run into the market he is defining...one of changing rules and punitive regualtions on success. He is a government man, through and through, one who knows not of the market, but wants the taxes it can deliver. He may kill it though, either unwittingly or by design.

The belief of Obama that somehow one's self interest is subservient to the common good is the foundation of communism. Don't think so? Read the Communist Manifesto and try to discern the difference between the class warfare Karl Marx describes and the class warfare he has invoked. There isn't a lot of difference. Obama believes that people are stuck in their economic class and that it is up to the central authority to look after the exploited ones, the helpless ones, the ones who are victims of circumstance rather than the result of their abilities and their choices. In the Obama world, he and his Ivy League egg heads are smarter than markets of billions of independent decisions. In the Obama world the number that follows 999 trillion matters, because he is going to spend that much to make sure that everyone is "equal" no matter how much it costs us.

Questions for Obama...that in spite of his Ivy league Education He Can't Answer

Exactly how does one build an economy "from the bottom up"? Remember? This was Obama's claim on the campaign trail and has been repeated by talking heads in the media and the administration (although those lines are blurry at best) but what does it mean? In a functioning economy, albeit in recession, it is still functioning and allocating the resources that have not been usurped by the federal government. So, what does one do to build it from the ground up? Does it mean empowering the individual to do as they please with their time and their talents? Does it mean that individuals can invest, take risks, and reap the rewards or suffer the losses? We have this already. I think what Obama and his left leaning friends mean we build up the bottom (give money to the bottom earners) by taking it from the folks who in Obama's estimation can afford to give up much of what the earn. Based on what I have seen from our new president this is the only conclusion a fair minded individual could draw because no one ever bothered to explain what he meant...assuming he ever knew. I suspect it was really just a good sound bite that made middle and low income people think they would get something from the government. I bet those middle class folks are going to be surprised when all they get is a higher tax bill in a few years and hyper inflation.

My investments are no longer worth what I paid for them. They are "under water" This is no fault of mine, I could afford the investments when I bought them. Maybe that is the problem, maybe I should have bought them on margin. Then I bet Obama would come bail me out like the folks who bought houses they could not afford with loans they could not pay back. Those people can have my investments soon because if Obama and his Treasury secretary who was too talented to reject because he is a tax cheat keep running their yaps, my investments will be worthless and anyone who wants them can have them. Why don't I get a bailout? My investments are worth much less than I paid for them through no fault of mine.

Does anyone in the Obama camp ever stop to wonder what will happen if the world buyers for our debt decide that they need a better return to invest in the shaky economy of the United States? Does Obama understand that the goal of a corporation is to maximize the wealth of the shareholders, not to create jobs? Companies create jobs because they have a need for a particular skill or resource as part of their efforts to maximize their returns. Jobs are a consequence of working to make profits. If Obama had ever held a job he might understand this, but since he hasn't, he doesn't.

Post-Election America, Is this really Change We Can Believe In?

If I could unilaterally make a single change to the constitution, it would be that the president of the United States must have held a real job in the private sector for at least seven years. University professor doesn't count, community organizer doesn't count, life time politician definitely doesn't count. If this were that case, we would never again have a president who knows so little about business, economics, and how the real world works. If the president held a real, private sector job for at least seven years, he or she would understand how value is created, how revenues are driven, and what motivates regular people. A president, born of the business world would not view simply businesses as an endless source of funds that magically appear in the federal coffers. He or she would understand that companies hire employees because they have a specific need and the value of that employee's work is greater than the value of the salary and benefits they earn. I think if Barack Obama had ever held a real job, he wouldn't be making some of the uninformed, capricious, and contradictory moves he is making today. He might understand that the bane of capital markets is uncertainty and that student body left, student body right, and retroactive changes to the rules of the game are a recipe for financial disaster. He clearly has no idea. His performance the past month has demonstrated why the starting pitcher in the little league world series doesn't make his next start as the opening day pitcher for the New York Yankees.

So here we go, Obama, the person who can be all things to all people, is going to spend massively to fulfil the leftist dreams of every democratic lawmaker through the largest government money grab ever and at the same time is committing to cut the federal deficit in half. Which deficit is he going to cut, the deficit before or after he doubled it? If you believe Obama will be true to his word, then I think after he spends a trillion dollars, while cutting the deficit in half, that bats are going to fly out of his butt singing "Everything is Coming Up Roses".

The real problem we have is that Obama has no clue what he is doing. He is making this up as he goes along. In his heart of hearts he wants not only fairness of opportunity but "fairness" of outcomes. So given that he has never held a real job, he has no clue how the business world works or what it does, and that at his core he wants to take from those who have and give to those who have not....this is what we get...collapsing financial markets, capital fearfully sitting in the sidelines, and a little league caliber pitcher trying to strike out Vladimir Guerrero.

The war on Freddie Mac and Fannie Mae

The one-two punch of Freddie Mac and Fannie Mae was the accelerant at the core of the recession of 2008. This recession will spill over into 2009 and could get pretty ugly before things turn around. Freddie and Fannie were the vehicles for the largess in the home mortgage business. They socialized the risk of private investments and removed a fundamental tentent of capitalism - the penalty for a poor or undervalued assessment of risk. Freddie and Fannie operated with the full credit of the US Government and facilitated the house of cards, backing mortgages that should not have been made to people who could not pay them back. They fostered the credit default swaps that have essentially imploded and left banks and investors with assets of dubious or at least almost indiscernible value in an arms-length transaction.

In the midst of this economic turmoil, I wonder...what is George W Bush had fought for reform and oversight of Freddie Mac and Fannie Mae five years ago with the same resolve he fought the war on terror? I can imagine two conflicting results, one which may have overwhelmed and the other and rendered it moot.

First, if Fannie and Freddie had been out of the business of guaranteeing loans of questionable value, we would likely have avoided the recession of 2008 or at least would be looking at another brief and shallow recession. Now, I also understand that if the excess in the housing market facilitated by Freddie and Fannie had been curtailed, we would likely have seen less strength in the economy of the past 5 years. The excesses of the housing bubble, fueled by Freddie and Fannie clearly provided an unsustainable and fundamentally unjustified economic stimulus. Cracking down on the actions of Freddie and Fannie would have kept a lid on some of our economic growth, however, the growth we realized would have been sound, justifiable, and sustainable growth - the kind that makes for long economic expansions and shallow recessions.

I also am certain that if George W had gone after the activity of Freddie Mac and Fannie Mae as well as the housing legislation that pushed bankers to make loans to customers who could not pay them back, he would have been branded a cold hearted, out of touch wealthy fraternity boy standing in the way of average citizens trying to realize the American Dream. He would have been deemed a racist who only cared about his rich buddies from Yale and Texas oil barons. He would have been beaten to a pulp by the economically illiterate mainstream media for giving tax cuts to the rich and denying home ownership to the poor. One can only speculate about the economic ramifications of an aggressive and successful crusade to reign in Freddie and Fannie, but there is no question that President Bush would have been crucified by the media for his actions...it would have been a unmitigated open season on the President....as if it wasn't already.

It is possible that the media circus around a reform effort would have over whelmed the president and the economic benefits he could have delivered. However, President Bush took a beating for the war on terror, the war in Iraq and has been steely in his resolve. Maybe he could have weathered the storm and kept us out of this economic mess. If he had, it would have been a project that turned him into an already strong media headwind. The President has his critics, and some of his criticism is justified. However, I believe if he had committed himself to the reform of Freddie Mac and Fannie Mae the way he has to the war on terror, we might be handing over a far more robust economy to the Obama administration.

Al Groh - Help Us Help You

The state of UVa Football seemingly has been one of transition for the past several years. We are yet again in a true transition as members of the current staff exit and are replaced for the 2009 season. Maybe if for the same reasons that Barack Obama won the election I suspect that these moves will be well received. They represent significant change for a fan base was ready for change, any change that will give us hope that we can be consistently competitive with the top programs in the ACC. I am a hopeless Cavalier fan, no matter how frustrated I get, no matter how many times I am left with hanging expectations, I will always come back for more. There is always next year and with it hope for a better outcome. However I am worried about empty seats at Scott Stadium. I am concerned that the home field advantage is not what is was just a few years ago. I am worried about apathy setting in on this program like a thick fog.

So here are some suggestions Al Groh, help us help you improve the state of UVa football. The first point is going to be cathartic for me and seemingly negative, but a constructive suggestion nonetheless. It has to happen, this way there is too much pent up frustration that has to diffuse into space. Then we can move on with other more ideas that have nothing to do with the past but are all about the future of this program we love.

First off Al, stop with all the NFL program crap. We have heard it over and over and it does not resonate with the UVa fans. While there is less NFL-like garbage revolving around the program there is still too much. We are finally over the fiasco of building an NFL-type of defense around "jumbo athletes" who are too slow to keep pace with our competitors from VT, FSU, and others. The college game is a speed game. 6-7 270 pound kids are defensive ends in college not OLB's. I love watching Florida and LSU play football, they are all about speed. Get speed into the program and get it on the field in the right position. Always have someone on offense who is the fastest player on the field. Florida, LSU, WVa have won lot of games with this as part of their program. Also, dump the "one voice of the program" garbage let the fans see and hear from the staff. Help up build a relationship with these people. Help us like them and support them. These folks are professionals and if they cannot have a relationship with the media and the fans, then they are in the wrong job. As mentioned before, speed kills in this game, and if you do not have it, you get killed. Quit slotting players based on NFL potential. Vic Hall was a better high School QB than Ron Curry. He has been a pretty good CB for the past three years, which is a travesty. The fans want to win games at Scott stadium much more than they want to watch UVa graduates in the NFL. This is not an NFL program, don't run it like one, don't slot players like one. The fans hate it when you do and the results have not been stellar to date. I feel better, and hopefully that was was a constructive rant, though I know a rant when a write one.

Second, Al, I know you are a tireless worker. I suspect your staff is as well. Please spend great time and effort creating a visceral relationship between the fans and the program. That includes everyone in the program. We have some great coaches and great personalities that no one knows. We have some fantastic talent coming back next year. I want to hear about it. Go out on a limb, risk some locker room bulletin board material for next season, but tell us why we should be pumped about next year's team. Tell me how good of a defensive backfield we will have with Ras-I Dowling, Chase Minnefield, Chris Cook, Corey Mosely, Mike Parker etc. There is scary good talent back there. I want to hear just how freaking good they are. I want to hear that the staff is giddy about two total stud shutdown corners with a potential third all in the same backfield. I want to hear how good our running backs, and WR's can be next year. We all know the talent is there. Beat the drum, let us know that this is a program that can go places in 2009. Quit with the milk toast comments. Quit worrying about saying anything that could be construed as over the top. Go over the top, the fans are dying to support you and this program, just light the fuse and I promise we will make the noise for you.

I know you understand this about our fan base and out University. We have to run things differently at UVa. We do not want Apparel Management majors at UVa. We want student athletes. We want kids who will represent us and the University well. We understand that there are kids that are high academic risks at UVa. If you have to pass on those kids, pass on them. In fact, when in doubt, pass. We understand. We want it that way. However, if we are going to be the college football program that has kids who belong at UVa, make a big deal about it. Talk about it, sell it to the fans and the media. I think that when a players picture and bio is posted on the jumbotron, his major should be listed in bold and if he has a 3.0 gpa or better, that would be posted as well. If we are going to be the university of real student athletes, let's point it out every chance we get. It will not take long for the fan base to figure out that if only 3.0 gpa's are posted, and your GPA is not posted, then you must have one below 3.0. Who is going to want that known to the fan base? Create some competition on the team to go with public acknowledgment of how well these kids are doing in the classroom as well as the football field. Make a big deal about this. I want to hear about kids who graduate from this team who go to graduate school, become coaches/teachers, or go to work on Wall Street. Connect us with what UVa does especially well - graduate smart kids who do well in professioanl life.

Similar to the second point, tell us the stories of the kids in this program. I am not talking about stuff that is personal that should not be discussed, but I would bet that there are a dozen stories of kids on this team over coming obstacles, gutting out injuries, persevering through a family crisis that would warm the hearts of the fan base. Tell us the stories about these kids. Tell us why we should pack the stadium to cheer them on to victory, even against the longest of odds. Don't be so distant with your team and so closed with every tidbit of information. I promise that any bit of competitive advantage you may give up with this information will be returned many times over with loyalty and commitment from the fan base.

Al, everyone that supports this program is hungry for winning program. However, unlike many programs, style matters to UVa fans. We want to win the right way. Help us help you bring the results we all want by connecting yourself and your program with the fans. George W Bush is not the worst president in United States history. He is a man of deep convictions who has, by an objective measure, done many things right. However, he is one of the worst salesmen on the planet. He has no clue that packaging the message matters and that being right does not guarantee success. Don't make the same mistakes that "W" has made. The message and how it is packaged matters. Selling the program and all the personalities in it matters, especially to those who support this program with their checkbooks in addition to their time. Spend time letting us know that you care about the fans and how they feel. Make the connection between all this program has to offer and the fans. You do not have to change who you are, you do not have to be a back-slapper, joke telling glad hander. However, become outward facing. Let us know why you are as committed to these players as you clearly are. Help us be just as committed.

Back when the UVa program was giving FSU all it could handle at Scott Stadium, Bobby Bowden commented on time that no one talks about the game day atmosphere at UVa, but that when he was in town, UVa was as tough a place to play as any. Help us make that game day excitement the norm. Make us feel part of the program, part of the advantage, and part of what makes UVa special. You can do it, I am certain, but we need you out here creating those connections. We aren't watching the NFL because we don't care about it like we care about UVa.

Republicans Got What They Deserved

Now that the election results have settled in, one thing is clear as a bell, the Republicans got exactly what they deserved, especially those in congress. The republicans are supposed to be the party of small government and fiscal restraint. Let's just cut through that clutter and state that they failed miserably on both counts, and when performance is that bad, why should the Republicans have felt that they deserved more time to do what...more big government and big spending? Compounding their performance problem is an ethics hangover from the midterm elections. My expectation is that all elected officials should be of high character, not easily led astray by greed. Those expectations generally go unmet by representatives of both parties, however, the republicans, it seems to me, got fat and lazy in their short stay as the congressional majority. They exuded the type of cronyism that regular Americans detest. Several got caught with their hand in the cookie jar. Their place as leaders of this nation, representing conservative, maybe ever libertarian values will have to be re-earned over time before they can be trusted with the car keys again.

To their credit, and most of this falls to President Bush, there has not been a terrorist attack since 9/11/01. This is no small feat. Many have tried and all have failed to bring terror back to our shores. Al Quaeda is a mess, almost all of their top brass are dead or in prison. Iraq is on the cusp of total victory, representing a toehold of democracy in a highly unstable region. Kudos to President Bush and the leadership in Congress for this success over time. Anyone who denies this success is simply a leftist zealot beyond reason.

However, as the economy crumbled, as the government largess grew, as cronyism became part of republican politics as usual, the victory of defending the country has become obscured. The republicans have only themselves to blame. The good will and political capital they could have banked over the past 4 years was vastly over drawn. Repairing the damage will take time. It will take years of doing the right thing. Barney Frank and Chris Dodd have given the republicans a nice start on the way back to good health through their "anyone but me" finger pointing on the Freddie and Fannie scandals. Obama and his gang have a pile of good will to spend over the next four years. It will be interesting to see if he can leverage it, or if Pelosi and Reid burn through it like....well, like republicans.

The New New Economy

Whatever happened to risk/reward? Assume some risk, take some chances, put up some capital, and reap the benefits, if they come. The higher the risk the greater the reward. That used to be the deal. Apparently not anymore. I think the equation is now something like, the more irresponsible the decision, the bigger the bailout.

If the government is going to backstop every failing business in the United States, then why do we need an equity market?

Is anyone else worried about the sustainability of the bailout frenzy? We are bailing out most large banks and strategic insurers. We are discussing a bailout for the US automakers, homeowners who borrowed too much money and credit card holders who cannot pay their bills. Just about everyone who is strapped for cash is apparently bailout-eligible. We can print all the money we want, it doesn't mean it will be worth anything. We can float all the bonds we want, but it does not mean that anyone will buy them. Anyone remember stag-flation?

Why can Toyota and Honda make money selling small cars and the Big 3 can't? Maybe the UAW has something to do with it. Maybe artificially high wages and rich benefits for life have something to do with it. The Big 3 will never be competitive until they get the UAW monkey off their backs, which means they will never be competitive.

Remember Eastern Airlines? Remember when the Union decided it would rather take the airline down rather than give in to management? When was the last time anyone was on an Eastern flight? The Union got their way and everyone lost. Organized labor has outlived its usefulness. It has been reduced to being a drag on the real economy and the icon of the new, new economy, where no one can fail, and and guarantees of guarantees result mediocrity at best and implosion at worst. Feel better? Me either.