Archive for October 2010

The Dishonest Broker

October 30, 2010

Approaching two billion dollars and still climbing, that what the estimated spending will be for television political ads for this mid term.  With that outlay, we must have the best informed electorate in our history, one would think.  Not!

The commercials that are aired have little to do with truth and nothing at all to delivering an informed message.  They have more in common with the circus barker who tries to beckon the passerby-er into his tent with half but intriguing truths.  The TV industry, however, plays it both ways.  On one hand they point out the negative content and with the other they count their profits.

There can be only one way to characterize this waste of two billion.  It is a slap in the face of the American electorate.  It says “we think you (the public) are stupid and these political ads will prove it”.

But that’s not all.  If anyone thought that commercial TV had a public service bone in their bodies, that notion should be wiped clean from ones head.


Under Water

October 29, 2010

Again today I heard a pundit talk about voter dissatisfaction, and what caught my attention was the reference to those voters who were “underwater”.  The reference was to those who bought homes in the run up to the housing bubble, and now found themselves with mortgages larger than what they think they can sell their homes for.  Should I feel sorry?

Well clearly I do not and no else should either.

I can image these people saying “I had no idea the house would decrease in value”.  For sure, most of us only remember days of increasing house values.  In truth there have been periodically years when house prices did not rise much and even one or two years when prices fell.  The facts were price declines were short in duration and always erased quickly.  Why will that not be the case today?

Past performance is no guaranty of the future may apply here.  Never the less, I fully expect inherent housing values to rise again and in time make up for any lost appreciation.  There may be some who must wait a longer time and probably there are some who just blew it on the purchase and instead of a home got a dog.  That’s life.

Home owners should be being advised to stick it out.  Don’t walk away from your mortgage.  Don’t walk, that is, because of being underwater.

There were two phenomena, however, in play during these past few years.  One, house price were way over valued (and still people bought assuming they could sell if they wanted).  Second, interest rates were attractive but some were booby trapped.  These dangerous mortgages had reset options that put a prospective home owner into a house with a low interest rate (and therefore a low monthly payment).  After some period (like 1 or 2 years) these mortgage interest rates reset (to something much much higher).  Here’s double trouble looking at you.

So, from my perspective if you are dealing with a snake (short hand for the banks that peddled these “teaser” loans), and if you have the chance to choose freely, walk away and smile about it.  But anyone who walks because the house is underwater, I say you are a fool.  Negotiate with the bank about a reasonable interest rate and walk if they refuse to negotiate in good faith.

What is clear in all cases, however, is that ones vote in the mid term elections should be pure and free of any taint from underwater mortgages.  Each person who entered such a deal did so voluntarily.  It is fair to ask if your congress person has a person on unfair bank practices and whether they have acted to make things fair to the home owner.  My guess is that you have not seen any commercials saying anything like this.


The Real Tough Choice

October 28, 2010

I am in California today and have been blanketed with Meg and Jerry ads.  Which one should deserve a Californians’ vote?

Meg claims to be the business person who is untied to any private interest group.  She’s for reducing taxes, creating new jobs, and bringing back the good old days. Jerry counters with his decades of experience in politics (including having been California’s Governor once).  He says he will create new jobs and make California great again. How can a voter logically decide which one is best?

Well frankly speaking, there is no way.  Neither candidate has spoken of what issues California really faces and what specifically would they do to fix what ever ails California.  Picking the best choice is the same as putting your hand into a deep dark bag you have just received, and hoping to pull out a rabbit (and one with four legs besides).

This race is not unlike almost all others being run this year.  Republicans are going to cut taxes (amazing with the magnitude of the existing budget deficits).  They are simultaneously going to create new jobs (as if that can be done simply by wishing).  And best of all, they are going to get “Government off your back” (while they maintain social security, Medicare, homeland security etc.).  At the State level, “State” is just substituted for “Federal”.

But if it were so easy to just discount the Republicans as disingenuous, the choice of a Democrat would be easy.  But the fact remains there is no more of a clue as to how to provide current Government services and balance the budget.  There is, of course, a clear path to balancing the budget but it entails going to the source of the health care spending and attacking the costs sources.  There is also straight forward means to reduce the nearly $900 billion homeland security entitlement but no one wants to look soft on defense.

So how does one make a choice?

This year the vote for Governor, in any State, is about redistricting.  The party that controls the governorship, has a leg up on how the State is redistricted.  For Senator, the vote is all about ensuring the next Supreme Court appointee does not resemble Roberts, Alito, Thomas, or Scalia.

I wish there could be a better measuring stick but the current “system” is so out of whack that trying to determine who will be the most effective executive or representative (House or Senate) is simply not possible.  Without third parties and/or complete redefinitions of the existing parties, voters are not going to know what any specific candidate is likely to try to implement.

This year it is a real tough choice.


How Did We Get Here?

October 26, 2010

The question that serious people should be asking themselves now is, how did the US get to a situation where our elected officials cannot agree on what problems face America?  Republicans are stuck on the theme of cutting taxes (with a clear view that there are massive budget deficits as far as one can see) combined with deep cuts in government spending (oh, yes the largest expenditure, defense, is off the table).  Democrats see many injustices (like the increasing spread between the rich and poor, or availability of health care, or regulations that protect workers retirement funds), propose solutions, yet look the other way on rectifying the budget deficits.

One is left with the distinct feeling that both parties have something else in mind than preparing the US to compete successfully in the 21st century global economy.

Cynically, the explanation is straight forward.  Our elected officials’ first and foremost priority is to get elected and return as much government spending as possible to those who will share some part of that money with the official.  This takes on all forms, ranging from campaign contributions to awarding contracts to businesses that in turn will obtain supplier services from designated companies (like cement contractors or law firms) which have direct ties to the official).

But that may be too simplistic an answer.  (It is for sure true and happens routinely but there may be a more basic explanation).

I would look to large sources of money.  (Surprise, surprise).  More specifically, I would look to people who want to maintain their current financial wealth advantage.  These people fund “thinkers” who in turn construct more sophisticated arguments on what is the best path forward.

One side believes future success will result from private sector leadership.  Its enemy is a large and influential government.  The other side believes also in private sector leadership but believes by feeding money to the poor and middle class, they can better control the government and the future through their preferred legislation.  This has lead to an amazing conundrum.

The “less government” private sector leadership wants to “stave the beast”, that is cut off funding for the government (through reduced taxes) and by the consequences, reduce the size and influence of government.  The “more government” private sector leadership wants use the power of government (that means larger and more expansive government) to stay ahead of economic problems.

Both of these positions fail to recognize the nature of global markets, nor the profound environmental impact that will result as these poorer nations become wealthier.    It is idiotic to assume private businesses will make decision that are best for America if those choices do not maximize their profits.  Just as idiotic is the idea that we can continue to support or expand social programs for ever.  There simply is not enough money to go around.

So, how did we get here?

We stopped talking to each other about what the problems really were (with data).  We have assumed that America (who won WWI and WWII) would continue, as if divinely ordained, and would continue as a leader forever.

Our ship is sinking.  We can watch it go down.  Trust me, the rich are on the top decks and will be the last to go under.  Or, we can begin to insist on a clearer definition of what ails America and what steps specifically are necessary to bring these issues under control.

The political discussion needs to go to listening and asking questions to better understand.  Actions needs to emerge with rationales and metrics to monitor solutions.  Key to this will be complete transparency on all political speech (who’s paying for the ad or research).

Politicians who will not follow this path should be singled out and not renominated, and if nominated should not be elected.

There is undoubtably a necessary tension between big government and small, and high taxes and low.  But if no one is listening and no one is proposing logical steps forward, why should we expect good results?


Face Time

October 25, 2010

With the midterm elections a week away, there is no let up in campaign ads.  This has traditionally been the time when each opponent puts forth their most outlandish claims in hopes their opponent cannot counter in time.

In Pennsylvania, there is a group who call themselves the “Republican-Jewish” committee who introduced an ad that tests the IQ of voters.  The ad claims that Congressman Sestak (3 star Admiral) favors going easy on al Qaeda terrorists.  Their proof… that Sestak supported criminal trials in US Courts.  Instead the Republican-Jewish group called for military courts.  So let me understand this, Jews and Republicans are for secret, military trials?  When in the past have we heard of secret trials?  Try Nazi Germany, Soviet Union, and just about every 3rd rate dictatorship.

But this will make no difference.  It is too late in the campaign for any ads requiring thinking.  Most voters have made up their minds and they are just waiting until November 2 (if they actually vote).

For now both sides must spend money just to keep “face time” in front of voters.  Both campaigns must know that no one is listening.  Voters’ memories are pretty much like a revolving door.  When something new comes in, something old goes out.  Face time is the best last week strategy.



Too Much?

October 24, 2010

The constant barrage of campaign ads, particularly those from unnamed but well financed sources, has made an intellectual common sense desert out of the television and radio media.  Whether from progressive, or more commonly from conservative, the intended message is to damn the opposition without offering any substantive solution to the problem addressed.  Have we had too much of this?

There should be no confusion that the current state of the economy is not robust.  Jobs are more difficult to find than most people can remember.  Health care costs are skyrocketing and no one seems to have an idea how to get control.  More and more people are beginning to think that the next generation will not be as well off as this generation.  These are genuine and real concerns.

But stop right there.  These conditions have not resulted from the past two years.

Most people do not articulate the issues facing America.  Instead they experience a feeling (or sense of confidence) about the direction the Country is heading.  These negative (and misleading) political ads at first tended to reaffirm the voter’s suspicions.  The more these ads played, the more it seemed that it was time for a change.  But sometimes more does not produce the intended results.

The large independent voting group were initially taken in by these negative ads.  As time has passed and each new ad offered no believable ideas on how to fix anything, independent voters have begun to wonder whether bringing back the party that was in power for 8 of the last 10 years is a good idea.  (This of course is damning the Democrats with faint praise.)  Never the less, it appears that slowly voters are beginning to think “why change horses in the middle of the stream”.

We will know the extent of this mood change on November 2.  It will be ironic if the misguided Supreme Court decision allowing these unlimited and unidentified campaign contributions actually produce results quite the opposite of what conservatives had intended.


Stealing The Election

October 22, 2010

If you have been living in the US for the past few months, especially the past few weeks, you have been witnessing a theft in broad daylight.  The airwaves have been filled (interestingly not the newsprint) with advertisements that can only be describe as mean spirited, dishonest, and fear based.  But what else is new?

Harkened by the recent Supreme Court (read Roberts, Scalia, Alito, Thomas, and Kennedy) decision to consider corporations the same as you and me, and allow unlimited and unidentified political advertisement spending, there is no way a car company can get air time to sell us a new car, or a soap maker to push his products.  All there is is one illogical or irrelevant ad after another.

You can understand the television stations desire to make hay while the sun shines.  Yet these are public airwaves and there is a duty (if not a requirement) for the stewards of these airwaves to perform civic duty.   For example, the claim that candidate X served during record deficits, while true, needs to also say something like, “during the last Administration, a budget surplus went to a negative one and at the end of 8 years, the national debt doubled ($4.5 trillion to $11 trillion).  In addition, the Bush Administration left a proposed budget for President Obama with over $1 trillion deficit”. This type of public service announcement could run side by side with those that money can buy.

If there is any more evidence needed that there is a larceny underway, simply dwell on the notion that Karl Rove is central to the myriad of entities dumping huge sums of money into these content-less ads.



Is The Tide Turning?

October 21, 2010

There are some faint signs (positive poll results) that suggest some Democratic candidates may fare better than earlier polls predicted. Could it be that voters are seeing through the deluge of negative and misleading political ads that have swamped the airwaves?

Could it be that voters now realize that unemployment today is the result of events that took place during George W Bush’s watch and not due to what any specific Democrat did or did not do in the last two years?

Could it be that voters also realize you can’t have it both ways? You can’t vote against a spending stimulus program aimed at trying to restart a growing economy and then blame the person who voted for it saying he voted wastefully, when you have no plan yourself.

Could it be that voters do not understand how health care is hurting the creation of small businesses when they also hear that credit is tight and banks are not lending to small businesses?

Could it be that those who think health care reform has not gone far enough (that is health care still costs too much) and are disappointed that the Democrat reform bill did not attack costs, also recognize that Republicans had and still have no plan?

Do not mistake these recent poll numbers for the beginning of a new Democratic mandate. Control of the House may still pass to Republicans. One thing is virtually certain and that is none of these big problems will be solved in the next two years. Sadly, voters will witness a Congress (Democrat and Republican) uninterested in tackling these tough problems but preferring instead to paint their opposition with a black hat.

Did I See the Future?

October 20, 2010

I returned yesterday from a week in France. This social democracy is often held up as what is in store for the US if we elect Democrats. Great food, good wine, clean subways, and a simply pleasant experience, not a bad future.

France along with Germany developed Airbus which makes planes that compete favorably with Boing. Peugeot and Renault build cars every bit as good as GM or Ford. And not much has to be said about French fashion in terms of how good it is. What have I forgotten?

Oh, yes, it is health care. France has a national system which produce health outcomes (life expectancy) superior to the US and a health care delivery system that ranks in the top three worldwide (US ranks number 16). In France everyone is covered for health care and never denied medical care for lack of insurance or pre-existing conditions. And let me not forget, France’s health care cost per capita about 60% of what it costs in the US. So, what so bad about this social democracy?

Well, I saw another aspect of French life this week also. There were nationwide demonstrations against government programs to “roll back” a key social benefit. The Government has determined that it must delay the age at which French citizens can retire and collect their retirement payments. This is the same situation that the US faces with social security and Medicare/Medicaid. In the case of France, current law defines retirement age as 60, and the Government wants to move it to 62.

The result has been street protests and disruption of fuel deliveries and train service. Much can be said about the dark side of unions and looking at the situation in France, you can find validation of ones fears. Union leaders have sought to involve student groups (both university and high school) in demonstrations. This calculated move hopes to scare the government into reversing its intentions. (Students are known to be unpredictable and can easily turn a demonstration from peaceful to violent.) French unions are just as prone to short sighted actions as any in the US.

But just looking at the basic issue is amazing to an American. Retirement at age 62 with a life expectancy of over 80, what is so bad about that?

The answer is nothing, of course.  The 60 and out appeals to many but not most. The French have fought recently over the length of the work week too. In the 90’s, the French reduced the work week to 37 and 1/2 hours with cumbersome restrictions on overtime. As the country’s economy began to fall behind others, compromises were made to provide more flexibility, but not without similar demonstrations.

Some things are neither Democrat or Republican, they are common sense instead. Retiring at 60 is neither right or wrong, but it must be paid for. The change to 62 does not deny French citizens the right to retire with a social plan, it just changes the timing. Health care where private, for profit, companies can raise premiums or deny coverage creates situations where one day a person gets coverage and the next he/she does not.

The French way of resolving these policy differences makes no sense to me, but then no one asked me about my opinion. What I do admire is that France is just the same a pleasant place with a reasonably diverse population (not as diverse as the US).  France works quite well and offers a living experience worthy of study. No one should be fooled into thinking we should strive to look just like France, but to understand how their worldclass systems operate, is free for the look.

The Narrative

October 12, 2010

As we approach the November elections, what only 18 months ago seemed impossible, is very probable. Republicans, lead by right wing elements will sweep again into power, What has gone so wrong to produce results that failed miserable from 2000 to 2008, and are sure to fail again?

Last evening Tom Friedman laid the blame squarely on President Obama’s failure to lay out a national narrative. Without this national narrative, voters did not know where the President wanted to take the Country, why he wanted to take the Country there, and what was destine to happen if he did not take the Country there.

The situation was dark when President Obama took office. The Country was on the verge of a depression with the prospects of huge unemployment and a world locked into negative economic growth for the foreseeable future. Instead of speaking frankly to the American people and telling them that jobs would be slow to return (because they had been outsourced and current law encourages employers to outsource) and that fundamentals like the size of the defense budget, the outlays for social security, and the cost of health care were figures the Country could not afford. Even more unless we did something about them, these government expenditures would only get larger.

The President could have said that social security and health care are individual responsibilities and should be paid for by each of us on as equal a basis as possible. (The poor, disabled, or institutionalized would as always have to be covered by the general society.) Defense as well as the rest of the federal budget should also be paid by each tax payer but in a progressive system. (The rational is that those who benefit more should pay more.)

To underscore the importance and urgency of needing to get both the budget and more importantly, the output of those programs working for us, the President could have “benchmarked” certain aspect of American life with other Countries. Education (compare the rate of graduation, quality of education, cost of education), defense budget (mission, cost, and expected benefits), social security (how to fund, why to fund), and health care (compare cost and outcomes with other modern Countries).

This message would have been eye opening and compelling. To be sure, the President would not have had a clear path. Vested special interests such as defense contractors, doctors (AMA), hospitals, drug companies, and of course insurance companies would have declared open season and filled the airways will doom and gloom. But if the President remained strong and kept forcefully and practically explaining to Americans that there is no free lunch. In order to rejuvenate our economy, America had to fix some growing cancers. If left unchecked, these cancers would take more and more of both Americans’ personal budgets as well as the national budget.  Both us individually and the government as a whole, would have no money to invest in the future, and you can fill in the rest of this story…

The narrative is real and will be written, but sadly not in time for this election.