Those Green Green Shoots of Home...

A lot has been said and written in the business media about green shoots appearing in the economy. Translated: signs of life springing from the ruins. Well, maybe yes and maybe no. I hope they are right. I suspect they are wrong.

The stock market has been behaving, more or less. It is up from its March low approximately 30%. That’s great if you bought in March. On the other hand, if you bought a year ago, you are still a hurting puppy. The stock market always recovers before the economy. It did to a point, but has since leveled off. I think that is exactly what is going to happen in the economy. It will recover to a point, then level off.

Those hoping for a return of the boom boom days of Dow 14,000 may have to wait for a long time. That economy was driven by two things: 1) a rapid increase in productivity due to the computerization of our society; and 2) abnormally low interest rates implemented after 9/11, to which we and the Federal Reserve became addicted. The Fed increased the money supply and lowered rates, the government actually was running a surplus in 1999, and inflation was held in check by the rapid increase in productivity. Add to the mix an influx of cheaply made foreign goods and banking deregulation, it was goldilocks all the way.

Those days are long gone. The Fed has lowered interest rates again to almost zero, but corporate bond and mortgage interest rates have acted contra to the Fed’s wishes and have begun to move up. This is a result of the massive borrowing by the Obama administration. You see, government competes with business when borrowing money. If the Feds borrow all of the money, business is going to have to pay substantially higher rates to borrow whatever is left. It is the law of supply and demand.

Simultaneously, commodities and precious metals have begun to rise in price. This is not demand related, but rather related to anticipation of the coming inflation. Somehow, the government is going to have to pay back all of the money it has borrowed. It can do it two ways: it can increase taxes on business activity which will be stymied already by higher interest rates, or it can print money. Most likely, it will be some combination of the two. Either way, it spells bad news for us. Rising commodity prices in the face of no increased demand is a green shoot for inflation. Our currency has begun to be devalued.

Although the government reports that inflation is not a problem right now, and that in fact inflation is down, a trip to the grocery store will tell you the truth about what is going on. Things are going up in price, and rapidly. The inflation figures provided by the government heavily weigh the cost of housing, which right now is down and falling. The government figures need a good dose of reality.

Obama based pundits say the Federal Reserve has a handle on things, and this time it will be different. When you hear this time is different…run for the hills. IT IS NEVER DIFFERENT. This is not rocket science. It is the first day of Economics 101. Excessive government borrowing coupled with a massive increase in the money supply equals higher interest rates and inflation. I repeat, IT IS NEVER DIFFERENT.

The coup de grace killing the economy recovery would be Obama’s cap and trade bill. This bill would limit so called carbon emissions from everything we do…from raising cows to lawn mowers to heating our homes and making goods in our factories. China and India and Russia have refused to even consider similar measures, and China is the biggest carbon emissions country in the world.

Obama doesn’t care. His ideology requires he pound his fist on the phony concept of global warming. Here the rules are very simple. If a company can build a factory and worry about cap and trade, and build a factory in China and not worry about cap and trade, where do you think it will go?

This is disturbing stuff. I know there are green shoots. I just don’t know of what!!!

Mr. President: Stand up for Freedom!!

“But I do have an unyielding belief that all people yearn for certain things: the ability to speak your mind and have a say in how you are governed; confidence in the rule of law and the equal administration of justice; government that is transparent and doesn't steal from the people; the freedom to live as you choose. Those are not just American ideas, they are human rights, and that is why we will support them everywhere.”

Barack Obama, June 4, 2009; Cairo University

Barack Obama, for once, got it right. This is about as clear a statement of American principles and values as the President has made since becoming President and during the entire Presidential campaign last year. He should go back and re-read them. As has become his habit, he talks a good game, but the ideals get lost in the actions. As I have said over and over again, don’t look at what he says. Look at what he does.

Anyone watching the tragedy in Iran this past week saw people dying in the street for what Obama says we, as humans, yearn for. The pictures didn’t come from news organizations, but rather You Tube, Facebook, and Twitter. Unfiltered, the face of revolution is terrifying as people risk everything to achieve freedom. I am not sure I would have the courage to do what these folks were doing. God bless them.

And where was our President? Parsing words! It was outrageous. In a clear effort to hedge his bets, Obama said that he didn’t want to appear to be meddling in Iranian internal affairs. He was afraid of raising the specter of 1953 when the CIA reinstalled the Shah as ruler of Iran. After all, he made sitting down with the Iranian government thugs a centerpiece of his campaign. Perhaps he will learn a lesson.

When Obama spoke those stirring words back on June 4 in his message to Islam, he offered an olive branch to our enemies in the Arab world. Mahmoud Ahmadinejad , the Iranian president, returned the olive branch by shoving it right up Obama’s posterior. Did Obama really think that Ahmadinejad would “bend to his will” along with the rest of the world as stated in Newsweek Magazine several weeks ago? Here’s a rule of politics: never believe your own press.

I never understood modern day liberals’ obsession with dictators: Hugo Chavez, Fidel Castro, Ahmadinejad, and radical Islam generally with its oppression of women and gays along with torture and beheadings. Barack Obama’s tepid response to the Iranian uprising is in sync with this type of ideology that believes it is possible to reach some sort of accord and satisfaction with this people. It doesn’t work.

Mr. President! Stand up for freedom. Shout your words of June 4 back to Iran. Let those in the street fighting oppression know we support them. Let our ideals be known around the world. We are still that shining city on the hill the world looks towards to show the way of human dignity and liberty. Climb to the the mountaintop and stand with Martin Luther King for human rights, for human progress, for equality of the races and the sexes. We are America. There is no compromise with evil. We may be imperfect, but we continually strive for the ideals you so eloquently stated in Cairo.

That is the message the world yearns to hear. I say again, STAND UP FOR FREEDOM!!

For the Media, Time for the Jaws of Life

I wanted to write a column about bias in the mainstream media. I wanted it to be intelligent, and filled with thoughtful analysis. I wanted to be fair. I can’t. There is nothing to be fair about. NBC, CBS, ABC, and CNN have their noses so far up Obama’s posterior, it would take the jaws of life to pull them out. And that, my friends, is a sad day for the country.

1) David Letterman’s comments about Willow and/or Bristol Palin were beyond the pale, and absolutely echoed his disdain for conservative women specifically and Republicans generally. It took him days to finally apologize for those crass and uncalled for comments. His apology didn’t ring true. Truth be told, he would tell that joke again in a minute if he thought he could get away with it.

2) Brian Williams “news report” from the White House last week was a joke unto itself. He bowed to the President, and made comments like people weep when they leave Obama's presence. Even Bill Moyers had a problem with this one.

3) Matt Lauer was downright hostile to Sarah Palin when he interviewed her on the Today Show relating to the Letterman flack. He was rude. He was arrogant. And he should be ashamed.

4) ABC is doing a one hour “townhall” meeting from the East Room of the White House next week featuring His Holiness Obama, and refusing to allow any Republicans to participate in the event. And of course, the ABC Evening News will be broadcast from there also. It will be a one hour infomercial for Obama’s policies with no response allowed. The Republican National Committee is lodging a protest with the appropriate agencies…big woo. ABC has righteously proclaimed it is doing nothing wrong. Even Susan Estrich, one of the most liberal commentators around has a problem with this, stating that ABC could be as fair as it wants...but this looks bad. People remember what the see rather than what they hear.

5) CNN has apparently tried to stake out the middle ground in the debate, and failed miserably. Anderson Cooper used crass oral sex jokes about tax protestors. He later “apologized.” Of course, that doesn’t mean he didn’t believe what he said, because he wouldn’t have said it if he didn’t believe it. Anderson Cooper is openly gay, and so is his liberal agenda. His sexual orientation should be irrelevant. If he was a good reporter, he would be able to practice the "no bull/no bias" he to which he pays lip service.

6) CNBC, the NBC business channel, was ordered to lighten up on Obama criticism, and now offers Arianna Huffington and Howard Dean as regular guest commentators on its Squawk Box morning show.

What bothers me about all of the above is that these news networks are owned by conglomerates who have tacitly given their approval to the editorial content of their media outlets. Why? When things don’t add up, my general rule is to follow the money. If something doesn’t add up, it is usually money that is the missing in the equation.

GE is the most obvious of the culprits. Jeff Immelt is looking for huge government contracts relating to wind turbines and the medical information processing for General Electric, and he is willing to prostitute NBC news to get what he wants. I am a General Electric shareholder. And this is making me very angry.

As for Disney (ABC) or Viacom (CBS), who knows what’s in it for them. Time Warner owns CNN, and Ted Turner’s liberal bias apparently still remains at the news network he founded.

America has lost something in this near monopoly of liberal/progressive viewpoints in the most watched news broadcasts in the country. On the other hand, the American public isn’t stupid. Overall viewership for mainstream media news programs is down. The number of people watching Fox News is up. Rush Limbaugh’s listening audience has never been higher.

Sooner or later, the networks will have to wise up. As David Letterman has found out the hard way, you can’t afford to alienate half the population and keep your ratings up. Conservatives make up the largest ideological voting block in the United States. People know a snow job when they see it.

The Destruction of The Rule of Law

Richard Nixon, on his worst day, could not do the damage that Barack Obama has done to this nation by negating the Rule of Law. Nothing is more important for the survival of the nation as the Rule of Law. We are equal under the law. Justice is blind. That is sacrosanct and is the basis of our entire economic and political system. This is scary stuff, and the reasons for his trampling the Rule of Law and the Constitution sound so plausible, that when the inevitable abyss is reached, a fiddling public will wonder what happened.

The country certainly is in an economic quagmire. Economic upheaval is around us as old line industries collapse while technology companies are the cusp of another massive revival. The collapse of the Detroit, not the American, auto industry is having grave consequences for the entire Great Lakes region. Jobs being lost mean economic upheaval as factories shut down, and populations shift. It is painful. It is scary. And the government should be doing everything possible to assist those folks who have lost their jobs to feed their families, train for new jobs, and to move if necessary. What the government should not do is throw the foundation upon which this country has thrived out the window in the name of political expediency.

President Obama, in the name of saving jobs, has engineered the takeover of General Motors and Chrysler by the UAW and the Federal Government. It has done so with NO AUTHORIZATION OR AUTHORITY FROM CONGRESS OR ANY CONSTITUTIONAL BASIS. You have just witnessed a strong arm government muscle property rights away from private citizens by pure thuggery. Even the US Supreme Court has rolled over for what King Obama. There is no oversight. There is no checks and balances. He has acted as any dictator in a banana republic would act. Our system has collapsed.

Do you feel any different? Probably not. Do you see any difference in your daily life? Probably not. You will, though. You will wake up one morning when the government comes banging on your door to take what it thinks you shouldn't have. Private property as understood by this nation for over 200 years has been destroyed by fiat of an American dictator. Every check and balance to prevent this has failed.

From my days in high school, I have always believed that the danger to our democracy would come from the left rather than the right wing of he political spectrum. It is insidious, and creeps up when you aren't looking.

In the process of engineering his socialist coup, Obama has installed a complete shadow cabinet void of any and all congressional oversight. While the legislature confirms his official cabinet, Obama has developed a complete entity under the executive branch where the true power lies. The person in charge of the stolen auto industry, the car czar, is a 31 year old political hack with no business experience let alone car experience. Then there is the health care czar, and the newly appointed pay czar, who will regulate what TARP companies can pay their executives, and coming soon, what you are allowed to make.

All the while, the media has completely failed in challenging this economic system restructuring unprecedented in American history, and the complete neutering of the legislative branch in favor a centralized executive with unlimited and unchecked power.

In the meantime, Rule of Law is being trampled on. Who, in their right mine, would loan the "new" Chrysler and General Motors a dime knowing that Obama and his thugs are lurking in the wings to change the rules of the game if things don't go the way Obama wants. And one day soon, all of this will effect you. Right now, bonds and priorities and percentage ownerships sounds foreign. But the goal of these folks is power and control to force on you their vision of utopia. BECAUSE IF HE CAN DO IT TO THEM, HE CAN DO IT TO YOU... AND HE WILL!!!

If the Rule of Law is displaced by empathy or political expediency or ideology or just plain arrogance of a power hungry president, we are finished as a nation. While we are attempting to jump start credit, we are undermining the very foundation on which credit is built, reliance on the Rule of Law. Short term pain is better than long term disaster.

An Uncertain Future; GM's Bankruptcy

The General Motors and Chrysler sagas have been interesting if nothing else. The truth is that these mid 20th Century industrial titans have been shadows of their former selves for years. So what does one do with this mess? I can give you any number of reasons for justifying what the government did. On its face, these types of things are always rooted in good intentions. Saving Detroit, saving jobs, and saving a critical industry are top on the list, and are all worthy goals.

There may be another reason. GM may sell Hummer for $500,000,000.00 to a Chinese heavy equipment manufacturing company (a substantial chunk of which is owned by the Chinese government). That is like giving it away. Apparently GM is going to continue making the Hummers in the United States for shipment overseas. Hummer never really made it here in the States, but is popular in other countries. Notwithstanding, it has given the Chinese a foothold into the American automobile market. Could it be that the government and GM sensed that the Chinese would make a play for General Motors or Chrysler in a standard bankruptcy? If the Chinese took over General Motors or any of its primary brands, it would have caused a political storm in this country the likes of which we have never seen. Who knows what the big fish know whilst us minnows swimmingly speculate.

Most Americans wish General Motors and Chrysler well. We want them to succeed. Why am I so uneasy? President Obama has said he does not want to be in the automobile business. Then why is he in the automobile business? He says the government will be a hands-off shareholder. Yet he fired the GM’s CEO. He cut Chrysler’s advertising budget by half. He assisted in determining which independent dealerships should stay open and which should close, many of the forced dealership closings being owned by members of and contributors to the Republican Party. He has destroyed the integrity of our secured bond financial system by shredding the statutory debt payment priority system. He denigrated the bondholders, many of which are pension funds and retired seniors. These aren’t the big, bad Wall Street types. If folks can’t rely on our own government's compliance with our investment laws, who is going to invest? The answer is: nobody. Contrary to what government officials are saying, this is very hands on.

Here are some questions:

If it is more efficient to make cars in China than the United States, will Obama let GM do it?

If it is more profitable to make a muscle car than a green tinker toy, will Obama let GM do it?

If it is in GM’s interest to shut down a factory in an Obama crony congressional district, will Obama let GM do it?

If GM needs a certain part and goes for the best bid, will Obama let GM do it, or direct it to a more politically correct supplier?

If GM wants to advertise on the Sean Hannity Radio Show, will Obama let GM do it?

If GMAC doesn’t want to loan money to subprime car buyers, will Obama let GMAC refuse the loans, or force GMAC into the loans to achieve fairness?

And none of this takes into consideration what will happen when Charlie Wrangle, Nancy Pelosi, and Barney Frank get into the act. It will be a disaster.

And none of this takes into consideration what will happen to the viable automobile industry in American like Ford, Honda, and Toyota, when faced with a competitor with unlimited access to capital.

If you don't like the answers you came up with for the above questions, then what you, the taxpayer has bought, is the largest social engineering and political patronage machine this country has ever seen. As my friend told me today, the only way it can succeed is if everybody else fails. And that is a big problem. We will paying for this for a long, long time.