Thursday, November 25, 2010

Many thanks

With perhaps the exception of Meleagris gallopavo (Turkeys), most of us in this country have much to be grateful for.  Most of us will have time with our friends and loved ones today.  Most will be in an environment of friendship and affection.  Most will eat well, if not too much.  Most of us will go to sleep knowing we'll wake up the next day with pretty much the same blessings as we had when we went to sleep. 

We should all be thankful for this remarkable set of circumstances that we often take for granted.  I wonder some times at my good fortune to live as I do.  For whatever the cause, I'm grateful.

As I was thinking about writing my Thanksgiving article I realized that in the last 30 years that I have been working, I have not been required to work on Thanksgiving Day. The reason this came to me is because my son Jack is currently on duty in the Navy in Hawaii.  His ship, the USS Lake Erie, just returned from a cruise in the South Pacific and when I spoke with him last night he was returning to his duty station which would having him working on Thanksgiving Day.  Last year he was in Boot Camp on Thanksgiving but was able to spend it with a "host family" in Great Lakes.  

Anyway, it occurs to me that while I've had the great fortune to be able to over eat, watch football, drink coffee, read the paper, talk to my family and friends, nap, and generally do absolutely nothing, that there is a large segment of our nation who do not have that luxury.  The obvious ones are easy to spot.  We have soldiers on duty, some in combat situations right now as I write. We have medical professionals, whether doctors, nurses and administrative personnel staffing our hospitals to care for the sick.  We have police, fire-service personnel and other essential service providers working today.  We also have people working at our gas stations to help us get to our Thanksgiving turkey. We have people working at the grocery store so if we forgot the cranberry sauce we can run out and grab some.  We have airline pilots, flight attendants, bus drivers, train conductors, gate agents, TSA personnel who are all on duty Today.

We have thousands of people working today that will not be able to be with their families today because someone has to work. They are the ones who got the short straw this year.  

They are the ones I'm thanking first for my day of leisure.

I hope you all have a wonder Thanksgiving. Be Safe all.

regards,
Dennis

Monday, November 15, 2010

I Want It NOW! And with Zero Interest and Payments for 6 Months!

Remember this cartoon?  Two vultures, who as carrion eaters usually wait for something to die before eating.  One obviously has decided enough is enough and he's going to kill something versus waiting for it.

I think our political environment has become much like this cartoon.  We have become so impatient and disgusted with the status quo that we want to have things fixed overnight.  It's not an unreasonable feeling.  When something is going poorly we all want to correct or change it so it moves in the proper direction.  Certainly, our economy can stand to get much better more quickly can't it?  We'd all love the unemployment rate to go down tomorrow and the market to shoot back up to more than 14,000 on the Dow.   That would be terrific wouldn't it?  Yes it would.  But, in our haste to correct what we believe to be broken, we sometimes over look that age-old maxim "Good things come to those that wait".   We make sacrifices for expediency sake.  We've heard over and over,  "Don't make perfect the enemy of good" which implies that get it just good enough and it will be OK.  That works some times.  We know it doesn't in others.   

We've seen an acceleration of dissatisfaction among our electorate for some time.  Since the early '90's, with the ability to put snap-polls in place, and the advent of cable news with a 24 hour cycle that must be filled, we are constantly barraged with news of this poll or that.  In general, we respond to polls viscerally, that is, with emotion versus thought and reason.  Usually, poll respondents do not send in written answers, which would be the "saucer that cools the coffee" in that it would allow for the respondent to reflect and think before answering.  No, we do it on the Internet with a snap-poll, or over the phone with a young and eager poll taker throwing questions at us willy-nilly until we get done, hang up and wonder what in the hell we just responded to. 

We are a people of speed.  We like things now.  I remember becoming impatient waiting in the drive through at Starbucks the other day because it was taking me too damn long to get my uber-caffineated beverage that would make me think faster.  The reality was it took about 5 minutes.    Impatience is our ethos.  We must be satisfied quickly.  Whether it's consuming more bandwidth so we can download Halo faster, or it's a microwave pizza that only takes 3 minutes to make so you can have supper, our life has become one quickly done event after another.  Compare and contrast the taste of the 3-minute pizza with a leisurely meal at an Italian restaurant where the food was cooked to order and you didn't have to jump up and immediately do something else after having the last bite.   I was recently on a plane ride (too slow of course) to San Francisco last week and as usual thumbing through the Skymall catalog and came across an ad for book summaries.  Now this service summarizes the best of the business books and presents them in significantly shortened formats for the "busy executive".  This "Readers Digest Condensed Books" version of the business tomes got me thinking about life in general.  We have somehow moved away from appreciating the totality of the book, or movie, or song, or painting, or whatever to sound-bites, portions (of course the most relevant ones), you-tube clips, and computer wallpaper that can instantly provide you with the image of the Mona Lisa.  Why go to a museum when you can get a digitized version for your computer?  Now don't get me wrong,  providing digitized versions of the old masters to people who cannot afford to go to the museum in Paris (Louvre) or acquire the painting outright is terrific. It exposes art to people who might otherwise not know of its existence.  But tell me,  do you appreciate it more if you physically see it or if it is rendered via pixelated spots on a computer screen?

I'm meandering on this post purposefully.  It's taking me time to get to the points I want to make, so if you will stay with me (have patience), I'll eventually get to where I want to go. 

I think we have lost sight of one of the good gifts that being alive brings.  The gift I refer to is anticipation.  When I was a kid, I was moderately poor.  We had food, clothes, shelter and parents who loved us, but my brother and I were not sated with instant gratification on those things we wanted.  Certainly as I look back, the gifts I got that I appreciated the most were the ones I waited for.  I got a bicycle when I was ten that I had wanted for well over a year.  My Dad and I made an agreement that I would work for it and he'd help, but he would not get it for me when I wanted it and I had to wait until I had saved the requisite amount of money to get it.   For some reason, that bike meant more to me than all the other ones I had before or since.  It was worth the wait.  The anticipation of thinking about that bike was terrific, and when I was finally, with my Dad's help able to buy it, I was ecstatic.

Today, as a people (me included, as evidenced by the aforementioned Starbuck's incident) have become an impatient people. We have become a people who expect immediate gratification.  Don't have enough money to buy the flat screen? No, problem, we'll put it on credit.  Stores and dealers are most willing to allow you to buy on credit.  They will even allow you to defer payments, no money down, low interest rates all so you can have it now!  It is convenient, it's easy (some times too easy), it's gratifying, and like Chinese food, will leave you hungry for more in about an hour.  Our thirst for getting the stuff we want now has driven our economy from a production oriented economy to a consumption oriented economy.  This has all occurred in the last 60 or so years.  Understandably, we want things. It makes us feel good when we get them.  If we can get them faster, then that's OK too.  Or is it?  Debt is a tool, that can be leveraged for good things if managed properly.   If it is not managed properly, then it can quickly become a bad thing.   Mounting debt is a cancer that can demolish a life-time of good work in a short period of time.   Most of us carry as significant amount of debt in the form of a mortgage.  I have one, and most people who "own" their home also carry a mortgage.  It's the way we have spurred economic growth for many decades.  It's also the principal reason the economy melted down in 2008.  The mortgage crisis was precipitated by two primary actions:  1.  The efforts by Congress to spur home-ownership by passage in 1977 of the Community Reinvestment Act, which legislated protections against discrimination in housing by requiring lending institutions who received FDIC (Federal Deposit Insurance Corporation) insurance that they could not discriminate on who they were lending money too., and 2. The creation of a financial instrument called a Credit Default Swap (CDS) which, while not tied directly to mortgages, were basically a method of trading risk that allowed for mortgage backed securities along with other financial instruments to essentially be insured against loss thereby driving up the ability of the instruments to be sold over and over and over again with little regard to the underlying assets that supported this scheme.  It is kind of like that movie "The Producers", where the producers sell 100% interest over and over again in a film to get rich, hoping that the movie fails which would absolve them of any responsibility to pay the investors.  When the movie succeeded however, they were responsible for paying back percentages of the profits to the investors which got them in trouble.  When the CDS market fell, the insurance companies who insured the instruments had to pony up.  They couldn't, because they too had invested in the CDS market, which, as we all know the story of AIG, was a house of cards, meaning they were overleveraged and could not pay.  As a result, loans were called in, forclosures heated up, and we now have a busted housing - bubble.

O.k., so credit if allowed to run amok can do terrible things to most of us and great things for a few of us.  If you are US Bancorp, Bank of America, Wells Fargo, Chase, etc.  then it works well for you because all of us "hungry for having it now" people will gladly not read the fine print on our credit card applications and get the platinum card because it has a higher credit limit so we can by the LG flat screen instead of the off-brand or waiting on the purchase altogether.  Then, as Claude Rains in Casablanca, we are "Shocked!" to find the minimum payment carries more than 30% interest and if we miss a payment, oh, my, we get socked with even greater fees.  Now, the banks love this because credit card fees are the single most profitable revenue stream a bank has.  Interest rates on Credit Cards are more than 25-30% greater than the prime lending rate that banks charge each other for loans.  So, one dollar in credit extended to you or I in the form of a credit card transaction, that is not paid for within 30 days, is equal to one dollar and thirty cents on day 31.  There used to be restrictions against the amount of interest paid on credit and those restrictions were called usury laws.  The reason they were in place is because people could find themselves in so much hock to the creditors that they would have to go bankrupt.  Usury laws were a firewall that restricted credit lenders from charging the clients so much they would never, ever pay the principal on the loan down and therefore would always be a client.  In the 1980's the usury laws were effectively eliminated by Congress in order to stimulate the economy. We were after all a consumer oriented society and people should be able to manage their own money and finances. It's a personal responsibility thing you know.  Well, as could be imagined, if there is an opportunity somewhere to make money someone will figure out how to do it.  Here come the banks, the stores, the off bank money lenders (pay-day loans, etc) offering a service.  All you have to do is sign up. We'll put the contract in  3 point type so you'll need the Hubble Telescope to read it, but don't worry, just pay your bill on time and nothing bad will happen.  We've seen the fruits of this.  What is more disheartening, is that it typically affects the people who can least afford it.  The lower-income people, not just the poor, but middle class as well are constantly hammered with "you have to get the new stuff" if you have value, are cajoled by Madison Avenue into making a choice that they probably shouldn't make.  Put it on credit.  Some can manage it. Some cannot.  The most insidious of these institutions are the Pay Day Lenders, some of which charge as much as 150% interest on short-term "bridge" loans that poor and lower income use to make their rent or mortgage payments while waiting on their paychecks. 

Now of course, no one is holding a gun to any one's head and making them by the big screen TV when they can't afford it.  Most of us who are older than 50 know what it is like to wait until we can afford to buy it. It is a lesson handed down from our parents who many of which lived through the Depression and definitely had to "wait" on those good things to come.  However, this is not an issue that can be simply laid at the feet of those who purchase on credit.  There are predatory institutions focused on nothing more than profit who will gladly allow their "clients" the easiest path they can take to become addicted to "getting the new stuff".  They are as bad as the drug dealers.  Offer a little for free or no-interest, get them hooked, then jack up the price.  Caveat Emptor indeed.

Carry this ethos forward to our political environment and you find the same behavior just at a larger scale.  The elections of 2010 told us nothing if not that we are impatient.  We, as a nation overwhelmingly elected a young, charismatic, optimistic (Yes We Can) man as president in 2008 and have just recently repudiated him and his policies through sweeping the Republicans back into office in 2010, to take over the House of Representatives.  Now, was this election because the Republicans have better ideas and methods and practices that since the election of 2008 they have shared with us that are better ways to get what we want?  No, they have done absolutely nothing but obstruct for the past 2 years.  It is not better ideas that carried the day.  It is however that the things Obama promised he hasn't delivered in the less than 2 years he has been in office.  We want good health care. We want to be secure. We want jobs. We want financial stewardship that won't drive our grand-children to the poor-house and dammit! We Want It Now!

The rise of the Tea Party is a collective example of our impatience as a country.  Forget how long it took to get our financial house in the mess it is in.  That socialist Obama is making it worse.  He promised! Jobs would come in by the millions when we passed the stimulus package.  They haven't!  Throw the bums out.  We Want it Now!  The anger and demand for instant gratification has accelerated to the point where we are losing sight of reasonableness and rational thought.  Of course, if you don't have a job and haven't been able to get one, then you definitely have a beef.  It is understandable to be impatient in this context.  I certainly understand the desire to try something new.  I think the desire, while correct in thought, is an error in practice.  Our country has been severely wounded.  We have to treat this like someone going through re-hab.  If one has major surgery such as a knee or hip replacement, then there is a long time of rehabilitation and therapy before the patient can run or dance again.  Same with our economic situation. We will be in for a long haul, and we must prepare for it and part of that preparation must be learning to be patient.  Pay down your debt where you can. Save for the things you want and pay cash.  Give up something you want but do not need.  Demand the same from your politicians.  Demand they give up their pet projects or earmarks but focus on what must be done now.  Beware the politician who doesn't give a damn about the deficit when his party is spending the money, only to decry the deficit when the other party is in power.  They are wolves in sheep's clothing.    It is vitally important that we set a course for remediation of our collective habits.  Remember, it is easy to blame someone else for our own problems.  Blaming Washington is easy but we must remember our government is a product of our behavior and desire.  We get what we pay for and what we want, especially when we want it now.

Tell me what you think,

Dennis

Thursday, November 04, 2010

Here We Go Again

So, one of the by-products of the Republican gains in the Senate and House (and Governships which will affect re-districting), is the increased level of acrimony that will occur and the associated name calling that goes with it between the Democrats and Republicans.  The Democrats will accuse the Republicans of being the lackey's for the rich and being mean and spiteful to the poor.  The Republicans will accuse the Democrats of being lackey's for the labor unions and trying start class warfare by going after the wealth.  We'll throw terms like Liberal and Conservative around with impunity.  It will get ugly before it gets better. 

So to provide some perspective on the name calling that will come down, I've stepped into the Way-back machine and traveled all the way back to 2005 to get this article I wrote then to try and describe the terms Liberal and Conservative in a context greater than the typical political definition.  Like most terms in the English Language, there are multiple meanings to many different words and indeed, there are multiple definitions of Liberal and Conservative that actually add color to the terms and the definitions and can help us realize that we are all Liberal and Conservative in some respect.  So, the point of this post is to point out that we are closer together than we think and if we just talk about this in a broader context, perhaps we can avoid some of the mud wrestling that seems to be coming given the results of the election.  So, here's the rerun,  please review and tell me what you think.

Liberal and Conservative - Let's Define the Terms

Political hegemony aside, let's talk about the definitions of the terms Conservative and Liberal. We (the populace at large, meaning you and me) are assaulted daily by relative use of these terms. Are you a Conservative or a Liberal? Politically, these terms are loaded with presumption and mis-direction. From each side of the political spectrum the terms mean different things. I think it is a appropriate to talk about the words from an objective point of view and then we can discuss the relativism on the meanings that pervades our political process.


First, a recitation from the dictionary. For this, I'm citing my antiquated volume from 1975, The Random House College Dictionary, revised edition, unabridged version published by Random House, Inc. ISBN- 0-394-43600-8 thumb-indexed edition.


Conservative: adj. 1. disposed to preserve existing conditions, institutions, etc. and to resist change. 2. cautious; moderate: a conservative estimate. 3. traditional in style or manner; avoiding showiness: a suit of conservative cut. 4. (cap.) of or pertaining to the Conservative party. 5. of or pertaining to political conservatism. 6. having the power or tendency to conserve; preservative. 7. of or pertaining to Conservative Judaism or Conservative Jews. - n 8. a person who is conservative in principles, actions, habits, etc. 9. a member of a conservative political party. 10. a preservative.



Now, let's see what Random house says about the term Liberal:



Liberal: adj. 1. favorable to progress or reform, as in religious political affairs. 2 (often cap.) noting or pertaining to a political party advocating measures of progressive political reform. 3. of or pertaining to representational forms of government that aristocracy and monarchies 4. of, pertaining to, based on, or advocating liberalism. 5. favorable to or in accord with concepts of maximum individual freedom possible, esp. as guaranteed by law and secured by governmental protection of civil liberties. 6. favoring or permitting freedom of action, esp. with respect to matters of personal belief or expression. 7. free from prejudice or bigotry; tolerant. 8. open-minded or tolerant, esp. free of or not bound by traditional or conventional ideas, values, etc. 9. characterized by generosity and willingness to give in large amounts. 10. given freely or abundantly. 11. not strict or rigorous; free; not literal. 12. of, pertaining to, or befitting a freeman. - n. 13. a person of liberal principles or views. 14. (often cap.) a member of a liberal party in politics, esp. of the Liberal party in Great Britain.



Ok, now we've got the academic definitions out of the way, which definition would you apply to yourself? Interestingly enough, if you are a member of the National Rifle Association, you would have to assume the "Liberal" label for your beliefs regarding the individual freedom as defined in the Liberal definition above. But we know from our current circumstances that most people who are advocates for unrestricted gun ownership align with the Conservatives which in most people's eyes are represented within the Republican party. I'm an avowed and confirmed Liberal, but the clothes I wear are extremely conservative in cut and description. The point of this is that we make the words fit the definitions we want. Relativism abounds with these words, as we all have a tendency of defining the terms in varying their meaning to meet our requirements or circumstances.

Why then, do we have these strong, visceral responses to the terms? Politicians today will run as fast as they can away from the term Liberal. The meaning of the word has become synonymous with anti-god, gay loving, tree-hugging pussies that hate America and all she stands for. During the recent presidential election, Senator John Kerry refused to be "labeled" a Liberal because he knew that if he aligned himself with the term it would cost him votes. Since the Reagan Revolution in the early 1980's, Conservative has become closely associated with the iconic "John Wayne" type of American. This person is god-fearing, fair, individualistic, self-made, and all around righteous. Compound this with the influence of fundamentalist Christianity, and Conservative basically means that you are part of the community of the blessed. You believe in God and that He has chosen America as his beacon for the rest of the world. Conservative as a term used to be scorned not so long ago, as it was associated with those out of touch, out of step, older generations of people who hated that "hippie music", and all that "free love" that was pervasive in the 1960's.



Attributed (although probably falsely) to Winston Churchill, this phrase has another view of portraying the differences in the terms: "If you're not a liberal when you're 25, you have no heart. If you're not a conservative by the time you're 35, you have no brain." The point of this is that when we are young, we are idealistic, open-minded and tolerant of other people, but when we get wiser and older, we become more convinced of our views and less tolerant of others.
I believe we all have liberal and conservative traits that we carry. I'm very conservative when it comes to what my 14 year old daughter watches on TV or listens to on the radio. This music today. Jeez! I'm pretty liberal though when she asks me to explain matters of religion. Most of us probably have similar characteristics.
Politically, the terms are very relative when applied to the entire world. Would you consider the former Soviet Union "Liberal" or "Conservative"? Characteristics of the U.S.S.R. included an atheistic credo disavowing religion. Afghanistan, under the Taliban, by contrast was a fundamentalist Islamic theocracy whose legal system was a particularly conservative interpretation of the Koran. The former U.S.S.R. was a communist country, led by a few well-heeled dictators whose enforced autocracy was incredibly restrictive. Both examples in my view are an example of an extreme form of conservatism. Liberal countries are generally more closely associated with democracies. England, France, the United States, Australia, Canada, Spain, Italy, Japan, etc. etc. could be classified as Liberal because of their general tolerance for other points of view and for their relatively progressive political approaches. We, as a society hold dear the term Liberty and indeed, have fought wars to attempt to bring it to those that are held hostage by a dictator (see recent adventure in Iraq).

Bring the terms back to America and we have to ask ourselves a few questions. What does it mean to be conservative or liberal? If you go by the strict definition supplied above (I, by the way have absolutely no idea whether or not the publishers are liberal or conservative) then the term conservative means resistant to change. If one agrees with that, then you conservatives by all means should believe we should still have segregated schools, women shouldn't be allowed to vote or own property, and we should still be burning witches in the public square. I would contend that we have no true conservatives. I think instead, we have different degrees of liberalism. No one wants to go back to the days of Dred Scott or Jim Crow. We like our scientific progress. Anyone want to give up their cell-phone or their microwave?

Conservatism and Liberalism alike have been polluted by special interests. The Liberals are co-opted by PETA and the Sierra Club, the Conservatives by the Moral Majority and John Birch society. I think very few people would align themselves with these groups. So, why do we get so worked up when someone calls someone else a Liberal, or Conservative? I think these terms have been Madison Avenued by a small group of people to really confuse and irritate the rest of us. Let's stop this. If you want to be conservative on some things fine, just recognize the word means that you don't want things to change. If you want to be liberal on some things fine, just recognize that the word means you are open and tolerant of other ideas and opinions (including conservatives, so stop whining).



Tell me what you think,



Best Regards,



Dennis

Wednesday, November 03, 2010

America Sees Red

Well, it's all over except a few races so tight we'll need to see the final returns. But, the message is clear.  America has decided it needs a change of direction and has cast its collective lot with the Republicans.  The Republicans scored a huge victory in the House of Representatives, closed the gap considerably in the Senate and had big wins in the Statehouse races winning almost all the contested governorships.  So, we have had enough of Obama and his side?  Evidently.  It seems as I watch these elections over the years we as a people get more and more impatient.  In less than two years, the majority that swept Obama and his party into complete control of the legislative and executive branches of government have decided to go the other way.  There are of course many reasons for this and many of them are legitimate.  This post won't go into a detailed loss analysis as I'm too busy, tired and hung-over to do it right now.  Hung-over not from a celebratory stand-point but from one of those depression induced hangovers.  I'm literally a sore loser this morning.

Anyway,  it is interesting to see how fast the Americans have decided to go toward the new Bright Shiny Object.  The Tea Party energy was real, it was angry and it was effective in accomplishing the task of taking legislative power away from the Democrats.  It's not like they did anything with it to begin with, but it has been wrenched from their hands nonetheless.  Mr. Boehner is the likely Speaker of the House now, unless he receives a challenge from someone in the Tea Party faction (Michelle Bachmann perhaps?) who wants to wield the big hammer.  We'll see what they propose.  So far, at least since 2006, the Republican House leadership under Mr. Boehner and Mr. Cantor have been woefully short on substance and incredibly prolific on rhetoric.  It's now time for them to do something useful. 

My concern is this.  They will focus their efforts on repeal and moving backward.  We've spent two years getting a health care bill that actually helps people.  The Republicans have vowed repeal.  We've spent significant political capital and time on attempting to reform Wall Street and support small business through a Jobs Aid bill and Financial Reform.  The Republicans blocked the small business bill and have vowed to repeal the Financial Reform bill.  Okay, let's say for some reason they accomplish this.  What happens?  Let's revert back to exactly where we were on January 19, 2009 by eliminating all the legislation that has been passed.  Let's extend the tax cuts before they expire at the end of this year. 

Now, what has been done?  Nothing helpful I can assure you.  The market will still be at 7-8k on the Dow.  Unemployment would be significantly worse than it is (analysis from various sources say 15% or higher) and we'd have a health care system still denying coverage, rescinding coverage and raising rates 3 times the rate of inflation.

Let's do all that the Republicans have suggested and I still don't know what they are for.  They have offered up nothing as an alternative to legislation that has been passed.  Nothing.  So, Mr. Boehner, governing is much more than saying no.  Your party now must deal with issues that still face this country:  depressed economic growth, high unemployment, continued foreclosures, lack of capital in the markets.  How are you going to fix this?

It's time for you (Republicans) to celebrate.  You've won your victory and I must say congratulations.  However, when the new Congress begins, the celebration has to stop and the work must begin. You need to explain what you will do, when it will occur and what the benefit of your efforts will be to the country and those who voted you in.  To do otherwise would be at your peril.  The American people are nothing if not impatient.  You have by my calculations less than 2 years to get it right or face the fate of your opponents from your recent victory.

Tell me what you think, (but not too loudly as I have a headache)

Regards,
Dennis