Friday, January 30, 2009

The View from Fly-over County: Panic of 2008 >> Depression of 2009-2016

Today, for the seventh time in my career, I survived a corporate layoff (actually the 8th if you include the 1975 episode, but those were transfers to avoid layoffs). Today we went from a firm of 140 or so people to a firm of 105 people, plus or minus a couple. I will have another 10 percent pay cut (after the 10 percent pay cut I took last April), the three upper managers are taking another 15 percent pay cut after the 30 percent cut they took last April.

These cuts are deep. A couple of single moms are now gone. A couple of promising non-professional-level staff are gone. Our CFO will have to pick up her accountant's tools again. I will have to be more involved in projects and try to bill time, rather than being 100 percent overhead.

I have news for my senators and congressmen, for Pelosi and Reid, and for Barrack: The stimulus package you all are mindlessly shepherding through a glazed-over Congress is not going to work. It is pork, pure and simple. It is money for every failed plan from the last six decades.

What we need now is tax relief, not in 2009 but in 2008. Immediately Congress should pass a tax cut retroactive to January 1, 2008. Every tax bracket, every income level, corporate and personal. Cut rates, increment brackets. Index exemptions. That will put money back in people's hands in a jolt, and do more than all these programs.

How can this be done retroactively? Especially after all the tax packets for 2008 have been mailed? Easy: Clinton rammed a retroactive tax increase through Congress in 1993, so the precedent has been set. Just do it, and let the bloated bureaucrat bags at the IRS figure out how best to disseminate the information.

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Sunday, January 25, 2009

Overturning Bush's Abortion Restrictions Help What?

How in the world does reinstating government supported abortion assist in the financial crisis? (HT: The Corner)

To wit (from This Week on ABC):

STEPHANOPOULOS: We also heard from Congressman Boehner coming out of the meeting today that again a lot of that spending doesn't even meet the same test you just talked about right now. Hundreds of millions of dollars to expand family planning services. How is that stimulus?

PELOSI: Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children's health, education and some of those elements are to help the states meet their financial needs. One of those - one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government.

STEPHANOPOULOS: So no apologies for that?

PELOSI: No apologies. No. we have to deal with the consequences of the downturn in our economy


Tuesday, January 20, 2009

A Depression---Right on Schedule

I am getting so sick of people blaming the current financial situation on Bush. He is no more responsible for this than Clinton was for the minor recession Bush inherited, or the elder Bush was for the recession in the latter years of his term, or even than Carter was for the multiple economic problems during his term.

Economic booms and the following panics/depressions/recessions/slowdowns--call them what you will--happen mainly because of demographics. This fact was explained in Harry S. Dent’s book The Great Boom Ahead. This book explained how the rise and fall of birth rate throughout American history coincided very nicely with economic cycles 45 years later. Dent attributed this to the fact that a family reaches it's peak spending years about when the parents reach 45, or maybe 47 for a generation that began their families a little later. At that point, families break up and new families start. New families don’t yet have the buying power their parents have, and so spend less. Since consumer spending accounts for at least two-thirds (if not three-fourths) of the economy, by tracking the number of births, you can track the number of 45-47 year olds, and you can tell when your economic peaks and valleys will be. That is Dent’s theory. Other factors may drive the severity, or hasten or delay the event, but demographics is the main driver.

In The Great Boom Ahead, Dent showed charts of birth rates, and the peak of the baby boomers happened in 1961. Using 47 as the peak spending year for a generation that tended to marry later, he showed that 2008 was a possible start of an economic downturn, a severe one, that would last until 2016, corresponding to 47 years after the uptick in births when the youngest wave of boomers began having children.

Could all this be true? Consider the severe depression we had in 1973-74. The Arab oil embargo and corresponding spike in gasoline prices probably had something to do with that. But 45 years before that was 1928, right before the start of the Great Depression, before dads and moms might have decided they couldn’t afford to have more kids, and at the end of a lesser baby boom that followed World War 1. What about the 1980-82 recession? Forty-five years before was 1935, the darkest part of the Depression, when the birth rate was fairly low.

I'd need charts in front of me to do more correlation, but Dent has convinced me. Now, I know that he fell out of favor in the '00 decade, when he tried to apply his theories of economic booms and busts to specific target amounts for stock indices. Shame on him for not sticking to what he knew best. Events have turned out to prove him correct on his basic assessments.

Since birth data is available in the USA only since 1911, that can't be used to assess the cause of the Great Depression. Or can it? If data isn't available, at least we know history and can speculate with some reasonable accuracy what events did to the birth rate. The Wall Street collapse was in 1929, the depression began probably in 1930. Count back 45 years before 1930 and you have 1885--twenty years after the end of the Civil War, and probably at the peak of the baby boom that surely must have happened after that war ended, the war that had the highest percentage of our population off on the battlefield. The Civil War boomers, if I may call them that, probably had their peak birth rate around 1885; I bet this was followed by a number of years, perhaps as long as a decade, of reduced birth rate, until their children began having a lot of children. Hence the number of 45 year olds must have greatly diminished around 1930. And voila, a depression that last a decade, ending as much from the increasing number of adults approaching age 45 as the outbreak of war, and less to do with New Deal meddling, possibly even overcoming New Deal meddling.

So, the current economic situation is not due to anything George Bush did or did not do. It is due to the end of peak spending by the largest wave of Baby Boomers. And it is right on schedule. Look for the USA to climb out of it around 2016, again right on schedule. And all the tinkering that GWB has fallen into, and that Paulson is wrecking with relish, and that Obama plans to expand with glee, will have no positive impact.

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Sunday, January 18, 2009

And What of this Comparison to Abraham Lincoln, Doris?

Do not, under any circumstances, bother to catch the replay of today’s session of Meet the Press.

Tim Russert has got to be spinning in his grave like a rotisserie on steroids over the pick of David Gregory to replace him.  Egad!

You know there is a theory in business that the average enterprise lasts roughly 40 years. Some exceptional ones make it to 60 or even 80. The really rare ones beyond that. How old is Meet the Press? 50? I guess it really doesn’t matter, but with the new reign of Gregory the Lost, MTP is about to begin its final gargle.

Right after David Brooks, former conservative intellectual who had been, at one time, worth listening to, and now is probably attending too many cocktail hours at the homes of PBS, NPR, NYT and MTP bigwigs, and has now taken on a slight patina of hyper-liberalism, ventured into the concept of how Obama might best ask us all to sacrifice our pensions (easy for him to say),…that Gregory the Lost tosses this moronic softball question to, guess who: Doris Kearns Goodwin. “And what of the comparison to Abraham Lincoln?” 

Wait.  Stop.

Let me answer that one, because the MSM, the insanely liberal Press, they keep alluding to this. Frankly, I will grant that Obama has a lot common with one former, young, liberal, literate and articulate former president: John Kennedy. Not all things, but some things. But with Abraham Lincoln who presided over a torn nation in civil war, who experienced deep personal human tragedy, who originated, i.e., not repeated or quoted, great language, remarkable and memorable statements, a sincere and religious man tested beyond what most men have been – he, I submit, was a very different man.  So CUT IT OUT!

Yes, yes, celebrate the inaugural. But I also say consider Obama as any other man taking on a new job.  And regardless of his ethnicity, race or creed, give him, I say, a chance to preside over the nation. And let’s not attribute to him too soon great and wonderful messianic action. Give him some time. Let’s see what he can really do for the nation.

Saturday, January 17, 2009

Obama on Bush

Obama on CNN:

I can't say I disagree with this:

Asked if there was anything he wanted to take back, now that he has spent more time with the president, Obama praised Bush's team for helping with a smooth transition and said part of what America is about is being able to have "disagreements politically and yet treat each other civilly."

Obama also said he thought Bush made "the best decisions that he could at times under some very difficult circumstances."


Tuesday, January 13, 2009

Are you a risk taker? Check your hands

A new study published today in the Proceedings of the National Academy of Science indicates that your level of risk tolerance and financial success may be related to your tolerance for Testosterone, and amazingly can be measured by the ratio of the length of your ring finger to your index finger!

Read the story Here, and then take a look at your hand to measure your future success!

Saturday, January 10, 2009

Are the Israelis Targeting Children at Hospitals and Schools in Gaza??


Thursday, January 08, 2009

Missile reportedly kills top al-Qaida operatives

This item is not being reported very extensively on the wires, but, via MSNBC:

A New Year's CIA strike in northern Pakistan killed two top al-Qaeda terrorists long sought by the United States, including the man believed to be behind September's deadly suicide bombing at a Marriott hotel in the Pakistani capital, U.S. counterterrorism officials told The Washington Post Thursday.

Agency officials determined in recent days that among the dead in the Jan. 1 missile strike were a Kenyan national who used the name Usama al-Kini and who was described as al-Qaeda's chief of operations in Pakistan and his lieutenant, identified as Sheikh Ahmed Salim Swedan, the sources said. Both men were associated with a string of suicide attacks in Pakistan in recent months and were also on the FBI's most-wanted list for ties to the 1998 bombings of U.S. embassies in East Africa.

There's more...


Which Side Are You On?

In case you're wondering why I side with Israel in this recent conflict with Hamas in Gaza, I reefer you to this video courtesy of LGF:


Monday, January 05, 2009

A "self-help project that takes forever"

The NY Times just named Groundhog Day, a Bill Murray movie, as among the top ten movies ever, among such greats as Vertigo, Shane, Red River and Meet Me in St. Louis (among others).  Here's why:

Groundhog Day (1993), directed by Harold Ramis. Another Pygmalion story, but this time the material the sculptor works on is himself. Phil Connors (Bill Murray) is a jaded, dyspeptic, arrogant, cynical and obnoxious TV weatherman who on Feb. 2 finds himself covering the emergence of the groundhog in Puxatawney, Pa. When he wakes up the next morning, he finds that it is not the next morning, but Groundhog Day all over again and all over again and all over again. (His own spring will be late.)

His responses to being trapped eternally in the same day include disbelief, despair, excess and hedonism before he settles down to make the best of the situation, which, it turns out, means making the best of himself — a self-help project that takes forever, but forever is what he has. (It is as if he were at once the ghosts of Christmas past, present and future and the object of their tutelary attention.). By bits and pieces, fits and starts, he makes himself into the most popular fellow in town and wins the love of his producer, the beautiful Rita (a perfectly cast Andie MacDowell). The miracle is that as the movie becomes more serious, it becomes funnier. The comedy and the philosophy (how shall one live?) do not sit side by side, but inhabit each other in a unity that is incredibly satisfying. This is a “feel-good” movie in at least two senses of the word “good.”

I think there is definitely a Judeo-Christian ethic in there somewhere, and it is likely why I make a habit of watching this moving once a year, right around the second of February, which is about to come around again in the nearer future.

To read about the other nine, go here.

Friday, January 02, 2009

Senator Claiborne Pell, RIP

My recollection isn’t very keen these days, but I too have a “story” about the now deceased Senator Claiborne Pell from Rhode Island. I recall his visiting the University of Rhode Island in those not so halcyon days of the 70's surrounded by an entourage of Left and liberal leaning students and aides. He was a conventional Democrat from a Democrat ruled US Senate who was highly revered particularly in education circles due to  his now famous Pell grants for poorer college students, among which I was one at the time.

Ingrate that I was, I headed up the college Republicans at that time, and considered it a duty (correction: a delight) to cause him some trouble – but there was no way for me to accomplish this with ease. So I accosted him outside one of the dining halls with a question or two about some inconsistency in his voting record, I think, on the war in Vietnam, and he politely asked me to “send” him “a post card,” and one of his aides would send me the facts and figures. A pretty good and fast put down. 

I was none too pleased with that answer, of course, and on another occasion, an entourage of my right leaning buddies showed up at Edwards auditorium to accost him again. We were lined up pretty much in the last few rows, and one of my close friends hollered out him a question which wasn’t heard too well from the front stage. My friend retorted, “I SAID…” which sounded more like a scold than a question, and we were all the more gratified at the jeering and heckling that ensued.

But Senator Pell was a worthy representative of the other cause; a man well bred in culture and education, and who appeared to have been, at the time, much better mannered, conscientious and, yes, even honorable than most US Senators of his day, but particularly US Senators of these more recent days.

We wish him a safe journey to the other side of the Jordan.

Thursday, January 01, 2009

In the New Year, a Past Remembered and to be Avoided

From an April 1933 Time Magazine article on the emergence of Hitler and the Nazi's.  Warning about the text.  It does not contain language which today would be considered more sensitive to various constituencies.  In other words, there is no modern day political correctness applied in the language of the text.  But there are some interesting parallels for our times about which we would be wise to take heed to guard against what Santayana admonished that "those who ignore history are condemned to repeat it":

1924. Barbed wire entanglements thrown up around Munich's former Military Academy to keep back a mob which roars, "Hail Ludendorff! Hail Hitler!" Stiffly in full uniform & medals, Prisoner Ludendorff poses with Prisoner Hitler who wears his raincoat with an air of defiance. Together ex-General Ludendorff and ex-Corporal Hitler, tried on charges of high treason for having led together the .famed Munich Beer Hall putsch which failed, cost 18 lives. Prisoner Hitler, as leader of the party of seven men which by this time has become the National Socialist (Nazi) Party of 30,000, shouts at his judges: "I know your sentence! But that high court above will not ask us, 'have you committed high treason?' That court will judge us all: the Quartermaster General [Ludendorff] of the old Army, his officers and soldiers, who have wanted to do their duty as Germans for the people and the Fatherland, who wanted to fight and die! You may doom us a thousand times and yet the Goddess of the Eternal Court of History will tear to pieces the indictment of the State prosecutor and the sentence of this Court! Her verdict will be acquittal!"

When Herr Hitler has been convicted, the crowd cheers him so fiercely that he has to be shown on a balcony, take several bows. When General Ludendorff is acquitted (obviously in tribute to his War-time service), he sneers at his judges: "My acquittal is a humiliation which this uniform and these decorations have not deserved!"

Convict Hitler and eight others receive the light sentence of detention in a fortress where they have connecting rooms. During his ten-month sojourn there, Prisoner Hitler pens the 800 bombastic pages of Mein Kampf ("My Struggle"). Says the warden as they part: "I too, Herr Hitler, am now a Nazi."

1932. In his presidential study 85-year-old Paul von Hindenburg disdainfully refuses 43-year-old Adolf Hitler's plea that he, as leader of the Nazi Party (largest in the Reichstag) be made Chancellor with "precisely the powers" of Benito Mussolini (TIME, Aug. 22). Less than six months after this rebuff, the Goddess of the Eternal Court of History—as Orator Hitler so fetchingly calls her—makes him Chancellor of the Reich by assent of Old Paul von Hindenburg (TIME, Feb. 6).

Last week his Goddess seemed to fling all Germany prostrate before Conqueror Hitler's triumphal car.

Hitlerism, In what sign does the pudgy little vegetarian with the Charlie Chaplin mustache conquer?

Today most Germans are agreed that Hitlerism, with its bombastic counsels of violence, treaty-breaking and Jew-baiting, would have swept their country years ago had not Germans been lulled by a false, post-War prosperity induced in the Fatherland by a flood of U. S. loans. These loans enabled Germany to pay Reparations with borrowed money, turned the shackles riveted on her by the Treaty of Versailles almost into golden bracelets. When Depression showed the bracelets to be iron, Germany-in-chains was ready to break them by turning to the doctrines of Messiah Hitler who had been preaching repudiation from the first. [my emphasis]

Basically Hitlerism is a doctrine of confused tenets, further confused by Orator Hitler as he goes along. Take, for example, the plain, basic word capital. No thinker himself, Herr Hitler has confessed that Hitlerism's tenets about capital are borrowed from a onetime building engineer, Herr Gottfried Feder, recently appointed by Chancellor Hitler to the Reichstag Finance Committee. According to Feder there are two kinds of capital: 1) raffendes or "grasping capital" hoarded in banks, from which interest or dividends is received by such 'rascals' as Jews; and 2) schaffendes or "creative capital" which is the life blood of German enterprise and therefore good, even though paying interest or dividends. Thanks to this masterly though absurd "distinction," a Hitlerite can preach expropriation of capital to factory hands, then walk into the directors' room and promise protection of capital, remaining all the while "consistent." "National Socialism." the name of the Hitler Party, is another piece of intentional confusion, useful in catching both Nationalist and Socialist votes— votes which had meant exactly opposite things until stirred into Hitlerism. [my emphasis]

Finally certain Jews—who contribute to Nazi funds—are supposed to be outside the application of Hitlerism's most if not only definite tenet: antiSemitism. In their Jew baiting (and in every Communist, Nazis see a "tainted" German, probably Jewish if his ancestry were known) the Hitler Storm Troopers take real pleasure. True Germans, they feel, are instinctively Jew-baiters. To prove this Nazis quote:

Frederick the Great: "We command that the Jews in the smaller towns, especially those which lie in the country, and which can be harmed most by Jews, be sent away."

Bismarck: "I will give the Jews every right, except that of holding a high office in a Christian state."

Wagner: "The Jew is the plastic demon of the decline of mankind."

Up to last week Adolf Hitler, who dotes on Wagnerian music and surrounds himself with portraits and busts of Bismarck and Frederick the Great, had set forth nothing which could be called a program of what his Government intends to do for and with Germany. From now until April Fool's Day (on which the new Reichstag will convene) Chancellor Hitler intends to rule virtually as a dictator. According to Nazi henchmen, the Reichstag will transact only two pieces of business: it will give Germany a new national flag, will then "adjourn indefinitely."

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