Bad Bankers, Bad Bad Bankers.

President Barack Obama appears to be a little irritated. First, it appears that the major lending institutions that took TARP money are paying it back faster than expected. Those institutions, such as Goldman Sachs, JP Morgan and Morgan Stanley now find themselves newly liberated from the onerous and vindictive eye of the Federal government, specifically the glaring spotlight from the U.S. "Pay Czar" Kenneth Feinberg.

This means that these same institutions that were literally saved by the American tax-payer can now get on with the business of paying effusive bonuses to their beleagured and misunderstood executives. Last report: $22 billion. Yes, that's a "b", not an "m".

Considering that over seven million American workers are out of work right now, the populist view is that these "fat cat" bonuses seem to be out of synch with the struggles of the American common laborer and that this money would be better directed towards programs that will funnel money towards the unwashed masses.

As offended as I am by these bonuses (have these people no shame?) I am equally offended by the tone of President Obama's current rhetoric with regards to our financial sector.

"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street", said the Presdident in a CBS "60 Minutes" interview. Senior White House Advisor David Axelrod further stated "What the president is going to say to the bankers is, you guys were part of the problem, you helped create an economic crisis here that cost 7 million Americans their jobs and now you have to be part of the solution."

There is a growing resistance movement among the bankers, especially with regards to the creation of a government office called the "Consumer Financial Protection Agency". "He can say what he wants, but we're not going back to the kind of lending that put us in this mess" said a person who is helping to prepare the bankers for the meeting but who spoke anonymously because of lack of authority to discuss the plans.

We are told that executives at the highest levels of the mega corporations justify their enormous compensation because they "risk the most". But we've seen that they feel no pain in bad times. They keep making enormous salaries and receive extravagant even as they send pink slips to thousands of employees who watch as their pension funds shrink or disappear entirely.

But the US financial ship of state has been victimized in two ways. First, it was helmed by executives that were willing to pursue imprudent strategies because there was (is?) no perception of personal risk of loss if things went wrong. If you are looking for a poster-child for this kind of executive, look no further than Dick Fuld, the "Gorilla of Wall Street". Second, it foundered into a storm was of our government's own making. Many of those squalls and icebergs that disabled our hypothetical ship were the result of Federal politicians literally FORCING them to relax the very lending standards and practices that would have avoided much of the pain we have seen in the last four years.

The government insisted that banks lend to people that could not be reasonably expected to pay back the loans that they were taking out. The reasoning behind this was two-fold: First, loaning money to a poor family to buy a house so they can move out of a project not only feels good but also looks good on your political resume, especially on the first Tuesday in November. But good financial policy conflicts with touchy-feely politics. Secondly, by making loans available to a larger pool of borrowers, the residential housing manufacturing industry remained white-hot when much of the rest of the economy had cooled or even reversed. Even back in 2003-2004, many U.S. Senators and Representatives were beginning to discern the threat on the horizon and tried to get somebody, anybody, to take a real interest in the risk and IRRESPONSIBLE lending practices at Fannie Mae and Freddie Mac. But with the housing sector the only bright spot in a gloomy economy, nobody really wanted to look at it too closely.

And just like the Titanic, by the time anybody realized the danger, it was too late. Give President Bush credit, he tried to get Congress to look at it early in his administration. Then give him a whack on the head because he failed.

Now President Obama is insisting that the lending institutions, especially those that took taxpayer assistance TARP monies, needs to help by boosting lending to small businesses. The problem is that President Obama and his advisors seem to think that if they make money easily available to small businesses that they will just rush in to take advantage of it and begin creating new jobs.

Uh, did ANYBODY in the administration take Economics 101?

Manufacturing and services are always a waterfall economic indicator. Increases in production, which will spur increased employment, won't happen until AFTER there are clear signs that consumers will open their wallets again. News flash to Congress and the Administration, we have 10.2% unemployment (estimated by some organizations to be closer to 17% when you include those who are seriously underemployed). Further, for the first time in 40 years, the American consumer is starting to cut debt and save their earnings instead. In 1982 the average American had 60% of their annual income in some form of debt, much of it revolving. In 2007, the most recent reporting year) Americans were carrying 130% of their annual income in debt. So it will take TIME for us to get out of the hole we're in.

It seems that President Obama and staff seems to think that the US economy is going to swiftly return to the heady levels of 2004. Don't count on it. All indications are that down economy has handed the American consumer harsh lesson about high levels of personal debt. And regardless of all of the hippies that voted for "hope and change" in 2008, the traditional American wants to live a freer life. Debt is a shackle we put on ourselves.

If I'm right, American consumers will not start spending more soon. If true, then all of President Obama's ideas are barking up the wrong tree. He's focusing on getting more jobs by making it easier for small business to borrow. But no sane small business man is going to borrow money when he has no evidence that he can sell the increased capacity. Instead, he needs to keep more of the money that he currently makes now, so that he can invest it into his company or better yet, avoid becoming an additional statistic in the unemployment report.

CBS Airs "Dirty Frosty the Snowman" ads.

I'm not going to link to anything. Look it up if you don't believe me. Simply put, CBS ad executives have aired a couple of voice-overs of snippets of the beloved Christmas classic cartoon "Frosty the Snowman" that are ads for their child-inappropriate comedies Two and A-half Men" and "How I Met Your Mother".

Millions of children will now have to be shielded from YouTube searches for "Frosty" that have him talking about his "Porn stash" and other inappropriate topics.

Thanks CBS. As much as I love "CSI", I'll catch it on reruns now. You won't see another minute of my viewer time.

HR-4191: Speaker Pelosi and Prime Minister Brown have Never Met a New Tax They Didn't Like.

http://www.cnsnews.com/news/article/58099

Considering the number of reports indicating that "stimulus spending" is actually not very stimulating, the job creation is being reported in districts that don't exist, or that job creation can't be actually verified or in fact job creation is being reported when the money allocated for the jobs hasn't been actually received or spent yet. In other words, there is little or no accountability for the current stimulus spending and strong questions as to whether or not there has been any effect at all.

At every turn, as more and more Americans are yelling at their Federal Government to stop the spending their elected representatives and Senators continue to suffer electoral deafness.

In this legislative silence comes Rep. Pete DeFazio (D-OR) who has proposed HR-4191, which would levy a separate tax on all stock trades, futures contracts, swaps, credit default swaps and stock options. These revenues would be used to fund another stimulus spending program, even though we're not even sure that TARP and TARPII are working. At .025 percent, the potential revenues generated are estimated to be $150 billion every year.

"To restore Main Street America, a small securities tax on Wall Street should be invested in job creation on 'Main Street'. This transfer tax would be assessed on the sale and purchase of financial instruments such as stocks, options and futures."

It did not take long, however, for other Democratic representatives to raise opposition. Notably, Reps Michael McMahon (D-NY), Carolyn Maloney (D-NY) and Debbie Halvorsen (D-IL) circulated a "Dear Colleague" letter that stated, in part: "A $150 billion tax on financial transactions will fall on millions of hardworking Americans who are saving for their future through their 401k plans, mutual funds, pensions and others savings vehicles." They correctly note that mutual fund and money market fund transactions are also purchases and sales of securities and bonds. They further note that the American version of the proposal would not exempt middle-class Americans because while the tax would be paid by major stock brokers. The brokers would almost assuredly pass the cost down to the investors, be they individuals or pension and retirement fund managers.

And wait a minute... the American version? That's right! This is part of a coordinated plan to make sure that this tax is global. The genesis of this idea comes from the embattled British Prime Minister, Mr. Gordon Brown. As part of his proposal all major financial centers - Asia, the EU, the U.S. and the U.K. - would also have to pass similar transaction taxes to avoid "disadvantaging" any single country's stock exchange. Nancy Pelosi apparently thinks that this "idea" might be popular amongst a public eager to see "Wall Street" firms "pitching in" to help the government grow the economy. Ms. Pelosi, how in the hell would Wall Street be "pitching in" to "help" when these taxes are being forced upon them by the bayonet point of the various law enforcement agencies of "all major financial centers"? The courts have a word for actions like this: Extortion.

To summarize, there is now a movement in the Democratically controlled U.S. House of Representatives to now levy a tax on most of all financial instrument transactions in order to create a new pool of money that can be used for additional "stimulus spending", even though there are convincing arguments that neither TARP or stimulus are having an actual positive effect and in fact are drowning our people in unimaginable levels of debt?

A warning to most of you Generation X and Y people. If you think that your 401(k) contributions will be affected, you'd be RIGHT.

How's that HOPE and CHANGE working for ya? For myself, I think it SUCKS.

Here's one more tidbit of information for you: http://blogs.reuters.com/james-pethokoukis/2009/12/07/cost-benefit-analysis-of-jobs-stimulus/. Summary: Since the Obama administration says that about 640,000 jobs have been created with the $157 billion already spent, that works out to roughly a quarter million dollars annual salary per job created. Since the average payroll employee made roughly $57,000 last year, had the government just paid for the labor, they could have created over 2.7 million jobs. But they want to create another tax (HR-4191) so we can enjoy the similar benefits of our highly efficient, honest, transparent and honest government.

Wind Power and the Threat of Eminent Domain

Wind Power and the Threat of Eminent Domain

No American citizen who turns on a TV, radio or reads the news can be unaware of the current push by the Obama Administration to fast track “green” energy projects. Further, in light of the questions raised by the possibility of man-caused global warming, it is prudent that we continue to develop these technologies. But a news item that I recently scanned causes me to be even more deeply concerned over the continued loss of individual freedom and abuse of government power for the “greater good”.

Most Americans are somewhat familiar with property rights. In rural areas, landowners not only own the surface of the land, but they also own the air above it and whatever is below it, all the way to the core of the earth (although for obvious practical reasons, nobody really enforces that ownership beyond man’s ability to reach downward into the earth’s crust). Simply put, if water, oil, natural gas are found under private land it belongs to the landowner and any company or city wanting to develop that resource must either buy the land or buy the rights to the resource from the landowner.

Similarly, if somebody were to build a structure near the property line that overhung private property, the landowner could force the owner of the structure to modify it so that it does not extend over his property.

Enter the city of New Ulm, Minnesota, which has proposed to construct a 237 acre, 8 megawatt wind farm. The city has already acquired the easements for the installation of the wind turbines. However, the State of Minnesota compels wind farm operators to obtain the “wind” rights from the landowners of a nearly equal amount of acreage in the direction of the prevailing winds. These landowners have so far refused to grant the easement, which has stalled the $16-18 million project.

The city of New Ulm has applied for a variance in order to proceed with the project without getting the easement from these recalcitrant landowners. If we were talking about water, this would be unthinkable. Instead, the developers of the project would be forced to buy the water rights from those that lived upstream to their project.

The New Ulm city attorney, Hugh Nierengarten, stated that “it will be necessary for the City of New Ulm to exercise its powers of eminent domain to secure such rights and move this vital project forward.”

The sticky wicket in this whole situation is the fact that the wind farm site isn’t located in the same county. This means that the objecting landowners have no way to hold the politicians and their legal representatives at bay. Jeff Franta, one of the farmers refusing to sign the easement and chief organizer of the opposition stated that it is within their right to refuse to grant easements to a project that could have a potential negative effect on the value of their property. He further stated “Wind rights are property rights like oil, water or a gravel pit. Wind is like oil in the sky so to speak. How can you use eminent domain to get something that can produce profit?”

The use of eminent domain is an important but volatile concept in American politics. Eminent domain gives a municipality the right to seize privately held land if the land will be used for "public use", and even then the landowner must be compensated fairly. This concept is based primarily on the following clause of the fifth amendment to the Constitution of the United States, which says: “…nor be deprived of life, liberty or property without the due process of law; nor shall private property be taken for public use, without just compensation.”

The most prominent recent case of eminent domain was Kelo vs. the City of New London, which was decided by the United State Supreme Court in June of 2005. The majority opinion, which decided in favor of the City of New London, chose to interpret the fifth amendment term “public use” to mean “public purpose”, citing the 1984 case of Hawaii Housing Authority v. Midkiff.

The dissenting opinion held that by using the “public purpose” interpretation this would enable a sort of reverse Robin Hood scheme whereby wealthy developers with political influence would be able to take property from the poor and middle-classes at below-market values. Further the distinction between private and public use of property would be so blurred as to effectively render inconsequential any protection provided by the fifth amendment with regards to usurpation by the government of private land rights.

To illustrate the difference, public use would imply the construction of a facility that would be run by the municipality that would be actually USED by the public. Examples include public schools and libraries, court buildings, city halls, and roadways. Public purpose has a much broader definition and implies any project that could benefit the public, usually financially. An example would be condemning a depressed urban area (homeowners) in order to develop an economic project (like a shopping mall or a factory) because it would bring increased tax revenues or provide new jobs, which would benefit the community (public purpose).

In conclusion, were the City of New Ulm to successfully either a) execute eminent domain on the farmers or b) get a waiver on the requirement to get the wind rights easement from the farmers, the City of New Ulm would then stand to profit from the new wind power farm while the farmers would derive no benefit as they do not live in the same county as the City of New Ulm.

Which leads me to ask two closing questions, the first of which is “Have you tried offering the farmers royalties or subsidies for the use of the wind that flows over their private property?” The second question would only need to be asked if the farmers lose their fight. “Will the Kennedy’s then be forced to accept the wind farm proposal on the Massachusetts coastline that they fought because it would ‘lower property values’?”

57% of American's Want Tort Reform for Medical Malpractice Suits

Read the Rasmussen poll report here.

On August 12, August 18 and August 27 I bloviated expansively about the House version of the United States National Health Care act (USNHC). Specifically, I wondered how any act put before Congress that does not make any effort whatsoever to set limits on malpractice lawsuits, commonly called "tort" reform could actually claim to be a comprehensive plan to reduce the cost of health care to America's citizens.

Apparently I am now one of a clear majority of polled voters who feel the same way. According to a Rasmussen poll published on December 2nd, 2009 57% of voters favor limiting monetary rewards to medical lawsuit plaintiffs, with 29% disagreeing and 14% not sure. 47% of voter respondents to the poll believe that limiting monetary awards would "significantly reduce the cost of health care in the United States", with 28% disagreeing and 25% unsure.

Finally, 60% of the respondents believe USNHC will increase the Federal deficit and a larger number believe it will result in higher taxes on the middle-class.

As I've said many times before, I believe that dramatic changes need to be made in our health care system.

Here's some of my list of items that need to be addressed by USNHC. Note that I'm not saying that we should abandon USNHC, only that if we truly want to believe that it will be a comprehensive bill to control the cost of health care to the U.S. consumer, then I think these issues need to be considered and added:

Have you talked to a health-care professional recently? A surgical doctor? A registered nurse? An emergency room technician? Did you ask them about the hours they work? I know very few health-care professionals that work LESS than 50 hours a week, and I know some that work over 80 hours a week. The old market rule applies in this case. If demand is high and supply is low, cost increases. How does USNHC plan to add more people to the medical profession? And if you think those resources are scarce now imagine when we add the so-called 47 million (I say so-called because it's been proven that there are not that many people with no medical insurance at any one time) to the insurance rolls? Now that somebody else (you and I) will be helping to pay for their care, you can bet that they will flood the system with requests for care.

The FDA approval process for pharmaceuticals adds exorbitant costs to the process of bringing new drugs to market. By itself, I don't have a problem with that. I like the fact that my government is trying to ensure that only high quality medicines make it to the consumer. But if the FDA is going to justify the hoops, the red-tape and the cost associated, then how come drugs keep getting pulled from the shelf and we keep seeing class-action lawsuits against drug manufacturers for drugs that were approved by the FDA? It's gotta be either one way or the other. Either the FDA stands by their approval and accepts some of the risk for their stamp of approval, or they need to admit that there's no way to test for all possible factors associated with drug use, in which case lawsuits against manufacturers for claims against FDA approved drugs should not be admitted to court.

Tort reform. All levels of the health care profession pay a LOT of money to insurers to protect themselves against lawsuits. But with America being the most litigious society on Earth, and there being nearly non-existent controls on both the validity of lawsuits and the rewards being sought, insurance premiums have skyrocketed. Reduce the cost of lawsuits and you reduce the cost of insurance paid by providers, the savings which can be passed on to the consumer. This is not to say that lawsuits aren't necessary. But a plaintiff shouldn't expect to profit from a mistake made or even malfeasance made by a provider. However, neither should they bear the loss. Basic market principle here is that if costs associated with a service or product can be reduced in a competitive market, the provider will reduce the cost to the consumer in order to remain competitive.

Increase competition between insurance companies by allowing consumers (businesses and individuals) to purchase insurance plans from across state lines. Basic market principle. Increased competition reduces cost as competitors seek to gain advantages on price through reduced profitability or improved efficiencies in doing business.

Provide incentives for the formation of benefit cooperatives that can cater to people employed by small businesses that cannot afford to provide health care from traditional insurance companies. Kind of like a medical version of a credit union. These coops, if run well, could really give traditional insurance companies a run for their money, and in so doing create an environment that would force insurance companies to compete or go out of business. Have you noticed that very few credit unions have been caught up in the current financial crisis? This is because they are run for the benefit of their shareholders, not stock holders. There is little incentive for credit unions to engage in risky and speculative financial practices. The same should be true for health care benefit coops, since their primary focus is to provide health care benefits at the lowest possible cost to their shareholders. How many hundreds of thousands (millions?) of Americans would take advantage of health care coops if they existed?

So why don't progressives want to talk about these ideas? Because none of them give the government more control over your individual liberty.

Chris Matthews' Characterizes West Point Academy as "Enemy Camp" to President Obama.

Follow the weblink to a video of the relevant excerpt of Chris Matthews' commentary after President Obama's Afghanistan strategy speech of December 1, 2009:



Now... I'm a former Marine. My son is currently serving in the U.S. Marine Corps. I have a fair number of friends who either are serving or who have served in the U.S. armed forces. And I don't think it's news that these people are generally not friends of members of the Democratic party or persons who lean towards liberal/progressive ideology.

However, I think it is safe to say that neither the regular military establishment, or the military academies such as West Point (Army), Annapolis (Navy) or Colorado Springs (Air Force) have ever taken any action that would make it fair to label them as "enemies" of any President of the Unite States.

Just as the rhetoric against George Bush during his administration was way over the top, we still continue to see extreme partisan invective from both sides in this administration. Chris Matthews' rhetoric will continue to reinforce in the minds of his devotees that the military is openly antagonistic of the President and his policies, which is patently untrue.

If we look at recent American history, we can see that the U.S. Military establishment has reasons for being suspicious of Democratic presidents. President Carter canceled more military programs than any U.S. President since Harry Truman. While President Lyndon Johnson increased our commitment of troops in Vietnam, he purposefully did not try to build public support for the conflict because of his fear that support for our Vietnam commitments would take support from his "Great Society" social programs. Because of this, service personnel returning from duty in Vietnam were literally spit upon by anti-war protesters that Johnson did very little to control (although when he did, such as at Kent State, the result was disastrous). President Clinton, exulting in the Reagan-caused collapse of the Soviet Union, tried to leverage the so-called "peace dividend". The Soviet invasion of Afghanistan, the fall of the Shah of Iran and rise of militant fundamentalist Islam in Iran and elsewhere, the 1993 bombing of the World Trade Center and the 1998 bombing of the U.S.S. Cole in Yemen all occurred during Democratic administrations. Many in the military believe that these relatively unpunished acts encouraged the greatest act of terrorism ever experienced, which were the September 11, 2001 assaults on the World Trade Center, Pentagon and possibly the Capitol building or the White House.

Only during the American Civil War did large elements of the regular military establishment openly defy the President of the United States. Otherwise, the U.S. military has been a devoted and faithful servant of the American people, directed by the legal orders of their President. To characterize West Point or any other military establishment as the camp of the enemy is absurd and an unwarranted accusation against the honorable men and women who learn the trade of war in order to preserve the peace and security of our people.

Tiger Woods Gives the Press the Finger (Metaphor). Good For Him.

Unless you are living in a dark cave somewhere in Tennessee or Southern Utah, you probably are aware that golfing legend Tiger Woods, the most successful athlete in the history of modern sports, had a little one-car automobile accident last week in the wee early morning hours not far from his home.

According to Woods' agent, Mark Steinberg, Florida law requires the driver of a vehicle involved in an accident to provide the police his driver's license, the registration for his vehicle, and proof of insurance.

And Tiger has decided that that is all he is going to give the police and the press. This is probably the backlash from the revelation in the tabloids that Tiger has been seen in the presence of a New York party girl. It is noteworthy that the accident investigation has already determined that Tiger was travelling away from his house when the accident occurred, not far from his home.

Tiger has decided he is not going to give the police, and thereby, the press and paparazzi, any details that would further compromise his family situation. One can only guess why Tiger was driving from his home, apparently out of control, in the middle of the night, but not under the influence of alcohol or medications. And it's going to stay that way. Tiger has no intention of feeding the ravenous beast any salacious tidbits. And if he is interviewed by the police, we darn well know that six hours later that the information would be on the front page of every tabloid from LA to London.

Tiger will be cited, probably with something like "failure to maintain control of a motor vehicle" and pay his fine. He'll then call up GM and ask them to ship them another Cadillac CTS-V and he'll knock a few thousand off the fee for the next commercial he does for Buick.

America (and the world), get over it. Tiger's private life and foibles is none of your business, and his family problems (if there are any, that's only alleged) should be allowed to be worked out in private.