Required Reading

If you want to truly understand how this nation and the world got to this terrible economic juncture, but more importantly if you want to contemplate where we are heading under the Obama Presidency you really, really need to read this long, but excellent report. Seriously, this could change the way you "feel" about what Obama is doing...

Here's the bottom-line: if we (the US, the world) are to avoid complete ruin - policies must be adopted that maximize economic growth since faster growth is the only way to generate those higher revenues needed to reduce mushrooming government deficits. Is Obama fostering pro-growth policies? Umm, no, not at all.

The following is the most important point made in the article and could spell the end of capitalism in the greatest country the world has ever known.

Lingering Doubts: Even longstanding Democratic Party liberals are now expressing shock at the staggering growth of long-term government debt the US now confronts. Nonetheless, the President's cheerful rhetoric suggests little concern with the growth of the numerator. To be sure, his administration's OMB budget projections blithely assume that very high growth rates will magically return after the next three years, and nothing solves fiscal problems as well as rapid growth. Yet everyone acknowledges that these projections are smoke-and-mirrors, constituting a leadership default of the first magnitude.

Yet could all of this be deliberate? Could the administration's choice to tax and spend ad infinitum have been politically strategic in nature? After all, haven't both President Obama and his chief of staff Rahm Emanuel openly admitted that "the new budget is a means to altering the very architecture of American life, with government playing a much larger role than before"? The likelihood that their new architecture would drive the growth of numerator of the Debt-to-GDP ratio ever-higher and the growth of the denominator lower was never mentioned.

Do financial commentators even understand this risk? While the press has expressed appropriate "concern" about the sea of red ink to come, there is little sense of the true End Game at stake:


So, I am not the only one who suspects that this administration is planning and executing the ruin of this capitalist republic (see my early blog piece called "Can We Possibly Be This Blind?").

Capitalism is the engine that drives all prosperity on Earth, that's it, simple as that. With this administration we are literally taking ourselves out of the game. The game is prosperity and financial well being. Is this what the people of America really want? Certainly not those fine Americans I saw at the TEA Party in St. Paul Minnesota on April 15th 2009.

To those who will inevitably ask what was Obama to do with this mess that George W. Bush left? This article that I have implored you to read points to a triad of conditions that constituted a "perfect storm" that dragged the US economy and then the global economy down.

That would be:
(i) A mistaken market forecast of some exogenous event that impacts security prices (in this case, a vastly higher than expected default rate on mortgages); (ii) A high level of Pricing Model Uncertainty bedeviling bank assets (the true cause of the "toxicity" of those complex securities that have clogged the arteries of the banking sector); and (iii) An unprecedentedly high degree of leverage in the financial sector (money center banks had off-and-on balance sheet leverage of about 40:1 in contrast to the socially optimal leverage of 10:1)

None of these conditions was set in motion by Bush era policies. In fact until the collapse of the credit market in late 2008 the Federal deficit as a percentage of the GDP was shrinking. Bush can be blamed or a lot of things - but he did not create the "perfect storm." We have never seen anything like it!

With Obama at the helm - we aint seen nothing yet!



CW

WolframAlpha... Still waiting

I was excited about the debut of a new Internet "tool" that had promised to enhance cyber life the way Google did. It is called WolframAlpha. You can check it out here. I am, sad to say, disappointed. I am not sure what I expected, but definately something more than this. It is new and it will undoubtedly get better. Right now I can't think of anything I will use it for.

I tried a couple of different queries and some produced no results at all and some produced useful information - but certainly nothing I couldn't get from Google or any online encyclopedia. It suggests some examples on the home page like putting in a date. I chose Jan. 28th 1986, a day that will live in infamy. It was the day after my first child was born, but you may remember it for some other event.
Under notable events it lists the death of two astronauts that oddly enough died on the same day, weird, huh. Well it might have noted that this was the day the space shuttle Challenger exploded during lift-off.

Needless to say right now I am underwhelmed by WolframAlpha. And I still wait for the day I can ask my computer a simple plain text question and get a simple answer as if we were having a conversation.


CW

The World According to Attenborough:Without You

I think we all have been touched by Sir David Attenborough's work. He is a world renown broadcaster and naturalist. His is the respected face and voice of British natural history programs that have graced our TV screens for more than 50 years. Through his BBC specials via PBS we have seen the many wonders of this world. His "Life" series, a trilogy: Life on Earth (1979), The Living Planet (1984) and The Trials of Life (1990) examined the world's organisms from the viewpoints of taxonomy, ecology and all the stages of life. But David has a problem...

You (and your children).

Mr. Attenborough thinks the world is over crowded with beasts we fondly know as humans. They are starting to get in the way of his enjoyment of the natural world. You see he and only he has the right to see nature up close and personal. Actually, I am being too hard on him. While he believes the planet is overpopulated he has shied away from advocating harsh and dictatorial presciptions for eradicating the problem. In a NewScientist.com article he declares that his perscription involves persuading people that their lives and the lives of their children would be better if they didn't exceed a certain number of births per family.

The same cannot be said for the numerous self-loathing denizens of Western Civilzation who have some notion that the sweet life is as far away from this modern high-tech world as they can get. Except they don't really want to go anywhere or give up anything - they think you and I should.

First, they want you to give up any notion of having children. Children are the problem you see. There are just too darn many of them. They want to force China's population control program on you. Then it's forced sterilization if you insist on breaking the rules. See for yourself - read a few of the comments from the aforementioned NewScientist.com article...

It sort of makes me laugh when I think about these people spouting off from the basement of their Mum and Pop's house in suburban London on their powerful home computer over their broadband Internet connection. Sitting there in their designer clothes with a belly full of Shepard's Pie they can't see the contradiction in their irrational diatribe against everything that they are. How do they think that computer got there? What about the wonderously powerful Internet. For that matter how was David Attenborough able to produce such fine TV programs? It wasn't Soviet civililzation or sub-Saharan African civilzation that created a world in which these wannabe dictators thrive, it was Western Civilization.

One commenter put his finger on the reason the population has exploded over the last 100 years(and also why there has never been mass global starvation). Oil. The availability and means to have the energy in oil do massive amounts of work for us has transformed our western world from one of endless toil into a pleasant, prosperous existence. A life where we have the time and the luxury to spout off about how awful we truly are to be so presumptuous to actually enjoy this life. I can state with peace of mind that the fact that others in this world suffer is not my direct responsibility. The resources that I use are bought and paid for, which may actually help bring a better life to those who make them available to me. The mistaken notion that the resources of the planet are a fixed pie that dwindles with each birth is an existential problem. The resources are whatever we can make of them. It takes the work of human beings to take raw materials and energy and create useful things like computers and modems and beer and food. Humans are not a liability, but the most precious resource.

We ought not to be apologetic for what we have built for ourselves but mindful that we need to be good stewards of the environment and well behaved global citizens - of course we have work to do...

Why even Attenborough understands this: excerpt For all his love of wild animals and places, Attenborough does not want to be immersed in them full-time. That's why he has chosen to live in London for more than 50 years. "I would go mad if I lived in the rainforest," he laughs. "I like what human beings do, I'm fascinated by them, and if you want to know any of those things, a big city is the place." He would miss libraries, concerts, theatre - and the chance to wander into the British Museum "just to have a look at something". end excerpt

The solution to overpopulation and resource decimation is and always has been prosperity. Prosperity relies on energy - or making energy do work for us. For the time being that energy source is oil, in the future who knows... This flies in the face of what the self-loathing want for us and the rest of the world. Carbon credits or energy taxation will be a disaster. Population control is already a disaster. As practiced today it is racist as well.

For one minute examine the sorry state of Western-funded population control programs throughout the world - the funding that Barack Obama has just restored. Seventy percent of these "family planning" clinics are located in minority neighborhoods in the U.S. Consider also that American foreign aid for so-called "health programs" still target the black, brown, and yellow populations of the world. And why do we continue to disallow dirt cheap malaria control measures by restricting access to them for third world countries? Hundreds of thousands of children die every year due to malaria. Is this not racist population control?

The facts look frightening considering acceleration of human expansion. We can see it very dramatically in the time it took for each milestone of a billion people to be reached. Our first billion, passed around 1804, took perhaps 200,000 years to reach. The second billion took only 123 years and the third, reached in 1960, a mere 33 years. Since then we have been in overdrive, adding a billion every 13 or 14 years. We passed the 6.6 billion mark late in 2007. -source-

Strangely we have not seen mass starvation or any global plague in the nearly 50 years that the population of the Earth has doubled from 3 billion to 6 billion. There have been local incidences of starvation but all of them can be attributed to government abuse and not the lack of resources available to feed them. In fact until the recent economic downturn global poverty and starvation was declining. This should be impossible if we are running out of resources. Well, we're not.

If the global economy rights itself again this trend toward greater prosperity will continue and birth rates will fall naturally without China-like forced abortion policies. At some point population growth will top out and these same ass wipes who want to deprive children of life will wonder who is going to take care of them in their old age. My kids will be there for me.




CW

What's Your Name, Baby?

I stumbled across this list of the most popular baby names for 2008. What struck me was that the boys names very easily could've been from the 1960's era when I was born.

1. Jacob
2. Michael
3. Ethan
4. Joshua
5. Daniel
6. Alexander
7. Anthony
8. William
9. Christopher
10. Matthew

With exception of Ethan and Alexander all of these mostly Biblical names were popular in the 60's. Throw in perennial favorites John and David and this could've been the list for 1961.

The girls list, however, would have been unthinkable in 1961.

1. Emma
2. Isabella
3. Emily
4. Madison
5. Ava
6. Olivia
7. Sophia
8. Abigail
9. Elizabeth
10. Chloe

Other than Elizabeth (shortened to Beth in those days) none of these names were popular in the 60's. Most of these names were "grandma" names when I was growing up. That being said, it would be strange for a mother to name a daughter Debra or Sharon these days.

As for naming a son Craig... Child abuse!


CW

Does Anybody Really Know What Time it Is?

It's about time for a computer to cough up an answer to a simple question. Since the dawn of the Internet age I have been griping about how hard it is to get a straight answer out of a computer. Don't get me wrong Google and Yahoo are great tools and even that annoying Clippy dude from Microsoft Office will eventually help you stumble into and answer, but how long can we go on being this frustrated? They can put a man on the moon but they can't get a computer to answer a simple question like "is it raining in Seattle right now?" (OK, that's a silly question, of course it is...) I've been waiting to be able ask my computer simple questions just like those guys on Star Trek did.

Well, the wait may finally be over - WolframAlpha is coming!




What's the big deal? We have Google what more do we need? Yes, Google helps us find the answer, but WolframAlpha will tell us the answer. It is technology that has the ability to compute the answer on a case by case basis, only when asked, indeed, a more efficient way getting to what we need rather than trying to tap into reams of data that we have to then wade through.

I for one am excited. There hasn't been a lot of hype so I am sure not to be too disappointed if this turns out to be nothing. Some are saying , however, that this could be bigger than Google and that's saying something.

Keep your ears open for this one.



CW

Obama's Tax Pains

At first blush there seems to be something to like about the business tax law changes the President will be proposing. For one companies will no longer be able to write-off domestic expenses for generating profits abroad. So, work performed in New York for a Dublin office would not be tax deductible in the United States. This change is a way to close unfair tax loopholes that have long encouraged companies to send thousands of jobs overseas. Obama would characterize the move as a way to keep jobs in the United States and fight a system that is rigged against U.S. companies who keep their entire business operation domestic.

This sounds downright reasonable, huh? Hold on...

Administration officials said they will close a Clinton-era provision that let U.S. companies "check the box" and treat international subsidiaries as mere branch offices. What was meant as a paperwork shortcut is now a widely used and perfectly legal way to avoid paying billions in taxes on international operations.

OK... Next.

Obama plans to ask Congress to crack down on tax havens creating a major shift in the way courts view guilt. Under this proposal, Americans would have to prove they were not breaking U.S. tax laws when they send money to banks that don't cooperate with tax officials. It essentially would reverse a long-held assumption of innocence in U.S. courts. Umm, Americans having to prove they are innocent - in other words - presumed guilty???

On principle alone this has an ominous quality to it.

Why do I get the feeling that this administration is more interested in collecting revenue than truly changing bad tax laws into something that works for the American people? The people need jobs more than the government needs revenue and yet his tax proposals seems 180 degree's out of phase with job promotion. Raising taxes on capital gains and dividends will be counter productive for job creation. In all truth it is all this uncertainty about what this bunch in the White House is going to do that is holding down business investment and job creation.

This much is certain, Congress and the Administration are going to allow the Bush tax cuts to expire next year. That, my friends, equals a significant tax increase across a wide band of the tax paying public. Contrary to popular belief the Bush tax cuts benefited more the just "the rich". The notion that Obama is going to recoup the trillions in spending by getting the rich to pay their "fair share" is ludicrous. There just aren't that many rich people. (Unless, of course the criteria for being considered rich is $70,000 a year in income. Don't laugh.)

Raising the taxes significantly for those "rich people" earning over $250,000 a year is likely to decrease revenues in the long term. Many of these so-called rich are small business owners who report their business income are personal income - in other words they are not rich.

Recently, the nonpartisan Joint Committee on Taxation, which evaluates tax policy for Congress, projected that a significant percent of filers with business profits -- about 750,000 taxpayers -- were likely to face far higher taxes in 2011 under Obama's proposal.

Republicans have argued that those who fall into the upper brackets tend to be firms with the greatest capacity for job creation. In a 2007 survey, the National Federation of Independent Business found that about 15 percent of small-business owners -- and half of those with at least 20 employees -- said they expected their household income to exceed $200,000. That's perilously close to being rich. If increasing the size of their business - which means hiring more workers - would also push their personal income over the limit then many will choose not to expand. Bye bye jobs.

To the majority of us who earn less than $200,000, raising taxes on higher earners might not sound so bad. A lot of small businesses fall into that category. So, if you are telling these business owners their taxes will go up; odds are, they'll cut spending . . . stop hiring or even lay off people.

Add to the fact that their tax bill stands to grow dramatically if Obama were to revive a plan to apply Social Security tax to income over $250,000 instead of capping it at the current $106,800. Where the businessman is an employee and an employer, he would have to pay both portions of the tax thus tacking 10's of thousands onto his overall tax bill. Many small business owners will consider scaling back operations.

Punish the rich is the mantra of the populist politician. Never mind that the rich are the ones who create jobs. Funny thing about populist politicians when they finally leave office they themselves become the very thing they pretend to loathe - Filthy rich!


CW