Archive for January 2009

Rebuilding the Republican Party

January 31, 2009

The Republican National Committee named a new head yesterday.  The new leader is Michael Steele and he has inherited a job almost as difficult and important as President Obama.  To begin, it is hard to understand any path forward for the Republicans with spokesmen such as Rush Limbaugh or the memories of Rove, Cheney, and Bush fresh in people’s minds.

It turns out of course that this is a critically important assignment.  Our nation needs to have (at least) two parties that differ in some important ways, and therefore provide the diversity of healthy thinking necessary to assure our Country’s long term growth and prosperity.  Let’s begin with what they should not disagree about.

  • Up holding the constitution and the laws of the land for all Americans
  • Habeas corpus, due process, and the Geneva Convention
  • Respect for human dignity 
  • Commitment to passing on to the next generation a better world
  • Passion and respect for individual achievement

On each of these issues there is clearly more than one way to approach the issue and more than one way to claim achievement of the goal.  Over and above the protection of human rights and civil liberties, there is a wide range of bread and butter issues such as personal safety, roads, rivers, forests, air quality, communications, education, adequate utilities, and parks and recreation.  While each of us would like our civil rights protected, we also want a job, a decent road to drive on, food and fuel readily available, and parks and clean rivers and lakes to relax in.  These things just do not happen but are the results of wise government stewardship.

Lastly, if so inclined, everyone should have the opportunity to join a religious tradition of their choice.  For those, however, who join a particular religious tradition, they must remember that their beliefs and practices are for themselves and any other consenting adults.  Both the Democrats and the “new, refocused” Republican Party need to remember this principle and keep religion where it belongs and not as a block of votes to be courted like sailors do the girls in a port of call.  

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Steady As She Goes

January 30, 2009

There is a lot of hype about what will President Obama do next about the recession.  What will he do to get Americans working again.  The stimulus package is too big for some and too small for others.  My guess is it does not matter.

If you step back and think about the state of affairs in 2008 and the few days following Obama’s inauguration, the world has changed.  We have a President who works the whole day, and speaks in whole sentences while using centrist language.  He is a President who can clearly tell right from wrong and has the courage to avoid pandering so that he can make the right decisions.  Internationally, our new President is already projecting a new and more realistic image around the world.  The state is set.  Americans see all this and it is sinking in.

The end of this recession as well as the recovery of the financial services sector will take time.  The recovery, however, will not take forever.  As with a great ship that has run aground, it takes careful work to refloat and redirect the vessel.  President Obama, each day, is bringing the US ship of state little by little off the rocks and setting its course towards a better future, a future based upon hard (but honest) work.  There is no room for absurdly high remuneration packages for top executives nor can this society become one of entitlements.  I am confident that as President Obama eases the ship America into the channel, he will take it “steady as she goes” and in reasonable time we will all see our economy and the country getting better.  

The Republican Titanic?

January 29, 2009

House Republicans, standing four square behind their leader (Representative John Boehner) solidly voted against the House version of the stimulus package.  They voted on principle they all said but it did look a little partisan.  

Republican were for more tax cuts and more funding for infrastructure projects that were ready now.  Boehner pointed out that the cost of the stimulus package would be repaid by our children and grandchildren since every penny would need to be borrowed.  I wonder what he was thinking during the Bush years when the deficit roughly doubled in size?

While paying for this stimulus package should be a legitimate concern, “charge (read borrow) and play” marked the Bush years.  The “play” part refers to the absence of any meaningful oversight, and that enable the housing bubble to get so big it had to bust, and the financial services sector to pursue greed without limits only to ultimately implode.  Boehner had ever right to demand an explanation on how and when the package would be paid back (but did not) and it would have been an even more powerful request had he referred to the errors of the  Bush years.

There is no doubt that this package may not yield its advertised benefits quickly or maybe at all.  I think, however, the American people are looking for leadership and action.  The score card at this point is Democrats, yes, and Republicans, no.  This might be the first look at the Republican Titanic. 

Anyone For Blue Chips?

January 28, 2009

In the olden days, everyone recognized the allure of “blue chip stocks and bonds”.  These were securities where your money was safe (or so most thought).  Blue chips paid a steady but not excessive dividend or for bonds, a coupon payment, and you could expect that the stock price would increase steadily, about the rate of general inflation.  If you invested in a company, you were assured a fair return and almost 100% sure to get your original money back.

What was it about these “blue chip companies”?  Well it seems they made things that others wanted, or they provided necessary services, usually under protection of government regulations.  The point here is that blue chip companies provided value and did not make business decisions to try and tweak their stock price higher.  

In more recent times the world has gotten (falsely) much smarter.  Demands for quarter after quarter higher earnings have driven corporations to mortgage the future for the mild applause of making this quarter’s earnings numbers.  For the most part those owning shares of stock do not care at all about the company that represents these shares.  “Institutional” investors make up the largest ownership block for most companies and these investors normal trade electronically removing themselves even more from the company whose stock they are purchasing.

Over time, most large companies have developed costly methods to “provide guidance” to Wall Street analysts who in turn sell their advice to these institutional investors.  It has become a game (not unlike a Ponzi scheme).  Companies try to fool analysts and analysts, in turn, try to influence the market so that the demand for a particular stock drives its price up.  As long as there is someone who will pay the higher share price, everyone seems happy.  But what happens when this sequence stops?

If one is honest, one will see the following:

  • Too many highly thought of companies will be revealed to be lacking in next generation profit generators.  This can be seen in todays announced acquisition of Wyeth by Pfeizer.  You must be kidding me that if Pfeizer had a great product pipe line, it could not use the $ 68 billion acquisition price better to grow its own business rather than to acquire more revenue.
  • Science and engineering again will emerge as critical ingredients in creating value.  Companies that invest prudently and do not waiver under quarterly earnings pressure will out produce other companies over a five year period.
  • Excessive executive remuneration goes hand in hand with capital destruction.  Top executives must keep their eye first on creating value and sharing its earnings through steady dividends.
  • Everyone will benefit from a much more cooperative and shared understanding relationship between government and business.  Steady, sound, and fair businesses can be depended upon for jobs and tax revenues.  In a global economy, our government must play an informed role in setting foreign policy and ensuring it is compatible with domestic policy.

In summary, the magic wand would do us all much good if we could go back to the days where one bought shares of common stock because one could count upon receiving a fair dividend.  Rapid appreciation of stock prices is a sure sign that something is astray.  With the world pretty much in the same shape (for different reasons), it is time to put the US back on the right track.

What Does Specter Want?

January 27, 2009

Senator Arlen Specter continues to delay the vote (and presumed approval) of Eric Holder as US Attorney General.  Specter, who was pretty much cast aside during the Bush Administration and who must run for reelection in 2010, is making much about old information.  I wonder why?   Could it be:

  • Specter is getting a bit old and has forgotten that all the issues he has brought up violated no US law and have been know for quite some time?
  • Specter has begun his reelection campaign early and wants as much press and air time as possible?
  • Specter is truly repentant about his previous votes for John Roberts, Anthony Scalia, Clarence Thomas, John Ashcroft, and Alberto Gonzales and is simply being overly cautious?
  • Specter sees a Republican Party with virtually no leaders or leadership and sees this as a chance to reestablish that the “Specter Lion” still has teeth?

Any of these reasons or all of them could be true.  What is certainly true is that Eric Holder will be approved and Senator Specter will be sent back to his corner to wait for the phone call (that will not come) soliciting his bi-partisan help.  

The larger tragedy of this matter is that Specter did speak out against Gonzales, warrant-less wire tapping, and torture.  These were courageous (although patently obvious duties) acts.  Could there be another reason for blocking Holder?  One reason offered is that Holder has written extensively about the criminal nature of many actions emanating from the Bush Administration.  The Republican fear is that Holder might be willing to appoint a special prosecutor who in turn would expose the wholesale violation of US and International law undertaken by the senior members of the Bush Team.  I wonder when Specter will ask that question?

The Un-loyal Opposition

January 26, 2009

Today begins a new week and we will once more see how the Democrats and the Republicans work together in Congress.  That the country faces huge problems certainly can not be denied.  That these problems arose on the Republican watch is also undeniable.  You would never, however, know that from the tone and substance of the debate that is taking place over President Obama’s proposed stimulus package, the closing of Guantanamo detention facility, and the exit from Iraq.

  • Stimulus Package.  Republicans claim the package is simply too big.  Since it is debatable that it may not be big enough, I would grant the argument that “it is too big” is a fair argument.  The Republicans, however, want to shrink everything but the tax cuts as a way to make the package smaller.  What are they thinking?  The national budget President Obama is inheriting is already $1.2 trillion in the red and the Republicans want more tax cuts.  Spending goes away but tax cuts linger and become obscene political propaganda  when a responsible government raises taxes to cover its cost.
  • Guantanamo.  President Obama’s announcement that he would close Guantanamo within a year has drawn some of the best “two faced” political rhetoric.  “I would not announce closure until I knew where I would put the prisoners”, or words to that effect have been the Republican’s anthem.  If you didn’t know it already, the Republican Party still does not understand that American values, laws, and history demand habeas corpus, due process, and strict compliance to the Geneva Convention.  After holding detainees for over 6 years without charges, does anyone think that suddenly there will be a reason that will come to light to justify a continuance of that policy?  It is a reasonable assumption that some of these detainees, when released, will return as soon as possible and join some extremists activity.  What would you do if you were held 6 years against your will?  If the evidence exists, try these men in US Courts.  Otherwise return them to whoever will take them.  And the next time we capture any of these men, be prepared with what charges apply.
  • Iraq Exit.  It is now almost 7 years since the US initiated an unnecessary invasion and occupation.  American made a mess of things and has paid heavily to put the broken Iraq back together.  It is now time to turn the country back to the Iraqis and let them decide their future.  As painful as it may be should sectarian violence re-emerge, this is not our country and our presence only makes it worse.  There is still some time (since it will require at least 16 months to exit) for the US to switch emphasis to regional diplomatic initiatives.  Regional diplomacy can go a long way to easing the sectarian tensions that are bound to arise.

The Republicans are playing with fire with their current rhetoric.  They were soundly rejected by the electorate for many reasons, but fundamentally because too many things had gone wrong on their watch.  It is only a few months until the mid-terms elections in 2010 and if the Republicans are viewed as not contributing to the solution, they may end up with less that 40 Senate seats and lose their filibuster option, and then become truly irrelevant.    

What Happened to Caroline?

January 25, 2009

This past week we were treated to the conclusion of the “Caroline Kennedy for US Senator” campaign and witnessed its hero-less death.  So many questions remain unanswered that one wonders whether there are more revelations to soon pour out?

  • Why did Caroline ever agree to the possible appointment in the first place? 
  • Why was her initial public appearances so seemingly unprepared?
  • Why did Governor Patterson delay so long in reaching his decision, and try to make his ultimate choice such a guessing game?
  • Why did Caroline withdraw, issue a post midnight withdrawal announcement, and not have her reasons coordinated with Governor Patterson’s office?
  • Why has Caroline not held a press conference since to explain her view of the situation?

These are just some of the questions that have surfaced.  Answers to these questions, undoubtedly would raise another round of questions.  It would appear that Caroline would be a better candidate for a sort of “House of Lords” rather than the snake pit we call Congress.  She appears to have neither the temperament nor ego to lay out what is necessary to hold national office.  In the end she has probably made the best decision for all parties by deciding to withdraw.  I wonder why she is not secure enough to say that?