McCain thinks Palin presidential, that says it all

October 7, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

I will not vote for a candidate who refuses to answer questions directly, and especially if they go off on to a different subject. If both candidates play that game tonight, then I will vote for a third party candidate or perhaps not vote at all. And I think if I hear one “talking point,” which as far as I am concerned is nothing more than a ready-to-go piece of propoganda candidates carry around, that is going to be one heck of a turn-off.

These are desperate times, and I just don’t have the patience for games as usual. I live in California, so my vote likely does ot count due to our electoral college system (which I feel should be abolished). The system was designed to help the smaller states. But California is the most populous state in the union and yet because it is winner take all and because it is believed to be solidly in the Obama camp (whether we support Obama or McCain) in essence it makes no difference because it’s a foregone conclusion (unless a whole lot of folks said what’s the use and failed to vote. Many are already voting, with absentee ballots going out now).

They say it’s going to take time for the $700 billion Wall Street bailout to work. Well with the nation’s economy and that of the world seemingly disintegrating around us, someone better step on it.

Certainly that should be the main topic at tonight’s debate. It’s a town hall format, so I guess it’s up to the folks there.

We know that Barack Obama has had some tenuous association with a guy involved with a 60s and 70s radical movement that bombed government buildings and did result in some deaths. But Obama was just a child when this guy was doing that. Later when Obama was grown up and got into politics their paths crossed (it’s been written about – I’ve mentioned it myself in two of my blogs). There is no evidence Obama talked or conspired with the man about anything subversive. The man, William “Bill” Ayers, is nowadays a college professor.

And we know John McCain has for three decades played footsie with his big money buddies in Washington because pretty much that is what Republican (and Democratic) lawmakers do. The big money folks are more fun to hang around with and they come in handy when you need campaign funds. We know the whole sordid story about McCain being part of the Keating five, going to bat for a guy (Charles Keating) who bilked oldsters out of millions of dollars. McCain has said it was a mistake on his part.

I have yet to read anything sinister about Obama’s connections with Ayers (since they came long after Ayers’ radical days). While I have nothing but contempt for Ayers, he is not running for president. And apparently there is no connection at all between the two these days. Yes and we know that Obama has had some involvement with some sleazy character named Tony Rezko, a land developer and slum lord who has been convicted of fraud and bribery of public officials. And we know Obama got some type of a sweetheart deal on land adjacent to his home through Rezko. Sounds like Chicago style politics to me.

But there has been months upon months of campaigning with nothing substantial (distasteful maybe) coming out of any of this. Some people are already voting and the official election day is less than a month off. It’s a little late to worry about any of this trash. As far as we know, either McCain or Obama is going to be the new president, no matter what anyone thinks about Ayers and Rezco and Keating.

I would think most folks want to know what each man proposes to do about the fact we are likely for the first time in my 59 years actually headed for the second Great Depression. We’ve had plenty of recessions and downturns, but this one is beginning to look ugly. The frightening thing is even the experts seem to be saying they don’t know exactly what can or should be done.

What we need from the candidates is some specifics and not platitudes or silly things like: “the Democrats just want to tax and spend,” or “The Republicans got us into this mess” (even if it’s partly true). How do we get out of this mess? Just tell us Mr. Candidate, and if we buy your ideas we just might vote for you.

But as I keep saying in this blog, the Democrats will probably emphasize bottom up measures (helping workers and their families and in so doing get folks buying things and thus stimulate consumer spending and getting the economy going). And the Republicans will concentrate on doing things to help big business, under the mantra of cutting taxes (but whose taxes?). Both candidates supported the bailout (I call the Wall Street extortion).

I would hope too that there are questions about the wars and I would hope those questions pin the candidates down (war, pin down, an inadvertent play on words). I really have not seen much difference in their war policies, even though McCain insists that he wants to win (whatever that is) and his opposition wants to “surrender.” Obama has pushed for a timetable (but not an immediate pullout) in Iraq and more or an emphasis on Afghanistan (and McCain now calls for the latter). I don’t see an anti-war or “surrender” candidate there.

McCain has been getting a lot meaner in his tone (I’m not sure how that plays at a town hall meeting).

It now seems that McCain showed reckless judgment when he chose Sarah Palin to be vice president (an office that has the same demand for qualifications as the presidency). So far she has put on one hell of an act, and I have said she definitely has Reagan tendencies that way, but when you examine what exactly she has said and how she has said it (hardly as elegant as Reagan) you see that so far she has only proven that she is qualified to be a head cheerleader, mayor of a small town (probably better suited to be head of the chamber of commerce), governor of Alaska (only because, well she is). Leader of the free world? No.

That pretty well only leaves Obama. He does not have a long record. But he is a U.S. senator, and we pretty much know his life story. It’s been written about and there have been documentaries on TV. And we know he is a thinking man and capable of putting sentences together (that would be refreshing). And he seems willing to listen to others and consider their ideas (that would really be refreshing).

While I can hardly say I have an open mind going into this debate. I certainly will listen. I don’t know which man will win yet and I want to get an indication of what we are in for.


Shouldn’t lend money just to make money…

September 23, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

So I suppose it’s all but a done deal with only some haggling to be done on the details. The federal government will assume a trillion dollars or more worth of bad debt and it will be unfair in that the big shots will be bailed out and the individual will be left to slog it out on his own or actually will do his part to finance the whole thing via taxes and an economy drug down by government debt.

Somehow as unfair and bad as it is, I think the country will get along and it may actually be an opportunity to reassess and get it right.

I know so little about economics it’s not worth me wasting words on this screen, but that won’t stop me.

Just saw former president Bill Clinton on Dave Letterman, and while I will always resent what Mr. Clinton did to bring shame to the cause of good government by his own personal actions, I have to admit he is a highly intelligent and perceptive and articulate person and we would have been no doubt better off if he could have served past a second term.

He said a lot about the economy and gave I think a reasonable explanation of what has gone wrong, and believe it or not he did not do a lot of finger pointing. He did say that the government has to step in but he also called for a program to help stem the tide of foreclosures. He said if that doesn’t happen the problem that caused the collapse of lending markets will persist – people reneging on their mortgages which in turn makes the mortgage-based securities used in the financial trade worthless (now I just kind of paraphrased there and added some elements of what I got in an earlier conversation from someone who understands this all better than I, plus what I have read over the past week).

Clinton, as is his wont, said a lot, but one thing I took away loud and clear, something that has occurred to me before all of this: “we have to quit loaning money just to make more money.”

Clinton said that there was an over investment in real estate. He suggested that government incentives could make other investments, such as so-called “green energy”, attractive and would create jobs that would in turn, among other things, help people buy homes and make good on their mortgages.

And my position is that while the money traders on Wall Street no doubt provide a necessary element in the economy – they help in the free flow of capital – at some point we have to be producing things and employing people in the effort to produce things. We can’t sustain a high standard of living for the broader public on an economy based solely on importing products made elsewhere and low level service jobs to provide comfort for just part of society.

On principle, I am against the bailouts that have taken place. But I am not the one that makes the decisions. I would rather see the nation move forward than come to a standstill and point the fingers of blame. Let’s learn from the mistakes and move on.

There needs to be more regulation on lending and borrowing and financing with complex instruments that may represent no or little real equity.

Above all, there needs to be more savings, and it seems such cannot come about until there is more incentive to save. Lower interest rates may be good for borrowing and business investments, but they don’t provide the motivation to save. On the other hand, if interests rates are too high that stifles business, but the more money folks make on savings the more they are liable to save and the more capital that will be available to borrow, and that in itself brings down interest rates somewhat, almost a vicious cycle to be sure. And that may be why there needs to be sound government involvement to keep things on an as even a keel as possible without upsetting the whole system.

It seems strange that after the tragedy of 9/11 the nation was urged to go out and spend money. Most of that money, due to our import-driven economy, goes overseas. We’d have been better off to put more of that money in savings and investments in our own country. We are now fighting wars in the Middle East and having to buy a huge amount of oil from the Mid East to do that. A lot of that oil money no doubt inadvertently goes to fund the very forces we are fighting. A lot of our money also goes to China, from which we borrow, and to which we pay so much for imports. While we try to maintain good relations with China, it is our main rival in the world today.

In my last blog, I wrote that I was beginning to like Ron Paul’s Libertarian ideas. I do. But I know he is not going to be elected. He’s not even on the ballot. Besides, he’s too old. So is John McCain. In addition, McCain has admitted economics is not his strong point. I fear that anyone he would have advise him would be like the advisers Bush has had, ones who have an agenda, an agenda that is aimed more at their own ability to make money than the overall economic health of the nation.

Barack Obama puts off the aura that says he is intelligent, wants to listen to others, and can reason things out.

I want to think that McCain means well, but he does not inspire the feeling in me that he has the patience or even the ability to weigh the complex issues that the next president faces.

There is a chance that the government will in the end come out ahead in this debt assumption because it would eventually be able to sell off assets after things stabilize. That is hard to get one’s arms around – how you make good on worthless paper.

I’ve always read about how cheap things were in the Great Depression, because since few had money to buy things, demand was low, prices were low.

But I recall the 1970s. Wages for many were stagnant, the whole economy was stagnant. And yet, prices went up and up. It was called “stagflation.” I hope we are not headed for that again, but with the current mess, it seems ever more possible. If markets remain in turmoil the flow of capital will be shut off and without that there will be little business activity and high unemployment. But the cost of things like food and oil, according to current conditions, will continue to rise. Yup, stagflation.

I suppose the cost of doing nothing could be long years of suffering, maybe even a depression bigger than the Great Depression.

Let’s hope the cost of doing something does not cause similar pain.


No help for Lehman Brothers a good thing…

September 15, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

And the mighty and greedy keep falling. On the heels of the federal government bailing out investment house Bear Stearns, and then taking over the two mortgage giants, Fannie Mae and Freddie Mac (and banks, including IndyMac, failing), I’ve just read (Sunday) in the online New York Times that Merrill-Lynch, in the hole over bad deals in mortgage securities, is selling itself to Bank of America and the hapless Lehman Brothers, also caught in the mortgage crisis, is filing bankruptcy and headed toward liquidation because it could not find a buyer and the government refused to bail it out (thank goodness for that).

The economy really is the number one issue, or should be, in this presidential election, rather than the current popular attractions, “Lipstick on a Hockey Mom”, starring Sarah Palin, Queen of the Klondike, and “Escape From Hanoi”, starring aging playboy, Every time-I-Think-About-Being Held-Five-Years-in-a-Hole-I-Buy-Another-House John McCain.

It seems just like yesterday that I was listening to that smooth-talking stock broker-radio show host on KFBK in Sacramento with the tone of “greed is good” and if you make money you must be doing something right. And when he mentioned names such as Merrill-Lynch and Bear Stearns and Lehman Brothers there was that tone of reverence. And the message always was that if the government would just get out of the way, even more money could be made and we would all be the better for it under the God Ronald Reagan’s philosophy of trickle down economics (if my stocks are up, boy you can give me a shine). And the only French you need to know is “laissez faire”.

I’m sure that if he’s yet on the air he is still an apologist for the greed- is-good crowd, but I think it has been proven that all those money worshipers were not so clever as had been put forward. I mean basically they ran up a mountain of bad debt in the mortgage industry in the biggest Ponzi scheme ever perpetrated. Well maybe it was clever, but it was dishonest. But now their houses of cards have fallen, but they threaten to take down the country with it all.

I’m pleased at least that the government has decided not to come to the rescue of Lehman Brothers. I think there will have to be some failures and some lessons learned.

The danger, of course, is that our whole economy will collapse (and I guess 401Ks tied to investments are somewhat in danger), but really how strong is an economy built on deception? (we already know the answer to that.) And what good will it do to keep propping up a corrupt economy that will in the end bankrupt the nation?

As dire as things are, I think the economy will or can heal itself, if we let it, and if the conservatives, most of whom seem to call themselves Republicans, really believed in what they say, they would let it do just that with a minimum of government intervention, preserving the existing and limited federal bank deposit protections, of course.

And while I know nearly nothing of investment and securities law, it would not surprise me if existing laws on the books could go a long way toward protecting us from such imprudent and fraudulent investment schemes if only they were enforced by the regulating agencies.

P.S.  With Bank of America already buying out the failed mortgage lender Countrywide Financial and now this, it is the largest brokerage house and consumer banking franchise in the nation, according to the Times. I wonder how vulnerable all this makes Bank of America.