Economic turn of events may not be so bad…

December 14, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

Let me get this straight: the government is giving (lending?) billions of dollars to the banks so that they will extend credit to businesses and consumers, but instead, the banks fearing that loaning money out in that fashion would be too risky right now, are buying Treasury bills, in essence, loaning it back to the government. And they’re in many instances getting either zero interest or even negative interest.

Well, that can’t be quite right or can it? but maybe someone will help me to understand this better.

Meanwhile, on Meet the Press this morning I heard the CEO of Walmart say that “Walmart moms” are being frugal and spending more money on food rather than consumer luxuries and are using leftovers for dinner more. He also said that restaurant owners are using yesterday’s receipts to go to Sam’s Club (a Walmart operation) to buy today’s restaurant dinners (as opposed to buying on credit, I suppose).

Consumers it is reported are holding off on big purchases and saving back to some extent – or maybe they lost their jobs and simply don’t have the money.

We already know that the drop in driving caused by that gigantic spike in fuel prices a few months back has led to a just as dramatic drop in fuel prices (although I read in today’s news that fuel has started to go back up in the last two days). That is good for the pocketbook and good for the environment.

Actually the only problem I see, and it is a big one, is that if things continue on the downward trend in our economy a huge number of folks (yours truly is not immune) could go without food and shelter.

But if we can keep roofs over the heads of folks and food in their stomachs, the overall economic picture is not so dire after all. I mean it seems like the realities of life and the market place and simple economics has injected some sense into the picture (giving money to the banks and talk of bailing out Detroit automakers as a result of their poor business decisions notwithstanding).

Decades ago I wrote a paper for one of the few economics courses I ever took in college. I don’t have it, but I recall something of what it was about and the fact that it was indeed a sophomoric approach to the subject. On the other hand, I am not so sure that I was too far off track. I disparaged the wide use of credit and opined that if people had to buy things cash and had to save back to do it, prices would be lower.

And now the part that hurts. At the time, my wife and I had just entered into a government subsidized mortgage that required very little down and I think our monthly house payment was something like $100 over 30 years and the principle was $28,000. Had we stuck with it, we’d be living in a paid-for house now. The CEO of Walmart said on Meet the Press that in the early 70s (the same time frame as us) he and his wife purchased a home through a government program for $30,000. Apparently he made better life decisions.

Give me a few moments to cry….. Okay, I’m over it.

Personally, I think everyone, individuals and businesses, needs to go back to the basic principles of economics, such as don’t spend more than you bring in and be wary of credit. And our government must enforce practical rules of businesses and strict oversight in the public interest.

In the meantime, the government will have to take unusual steps to avoid mass homelessness and starvation. But we actually do have the resources in land, raw materials, and even capital (the money is not actually gone – it’s just not being distributed in the normal way) to move forward.

If we really did believe in that higher power as so many of us profess, rather than worshiping at the alter of self-indulgence, things might not look so bleak.

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The socialization of America; a war loss…

October 14, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

I think our economy is fundamentally unsound and what we are doing now, the bailouts and what amounts to a partial nationalization or socialization of the economy by our government, will only act as a band-aid or a pill that at best will temporarily mask the symptoms of what ails us.

Admittedly I know little of economics, but like most of us, it has been so much in the news these past several weeks and in so much detail, I feel like after all these years I really do understand some of the fundamentals.

Before I go any further, I would suggest reading a piece by Harvard lecturer and economist and Libertarian Jeffrey Miron, now posted on CNN Politics.com. While I have never thoroughly bought into libertarianism, I think that they seem to be the only true conservatives (and they are liberal on social issues, although not government involvement in social issues).

Back to my thoughts: I will wander here, as I sometimes do. But last night while I was trying to read a novel, I had the TV on low and caught a portion of some finance commentators from Britain, I believe. They read an e-mail from someone who complained about the bailouts and also noted that he began his career as a gofer for some financial firm in 1969 at $129 (American) per week. “Now these guys come out of college and think they should start at $200,000 per year.”

Wandering still: I note that Barack Obama has the political guts or maybe savvy to concede in his stump speech that although a lot of our problems are caused by greed and malfeasance on Wall Street, there is also blame to those on Main Street, so to speak, who knew they were getting in over their heads and did it anyway. I think he is being honest there and is also trying to appeal to the centrists, much as I believe Bill Clinton often did. I recall that at one time during his presidency Clinton was referred to as a centrist or maybe even a slightly conservative or “new” Democrat.

Whatever, he supposedly balanced the budget and left office with a surplus. Actually I think that is a lot of accounting trickery that both the major parties engage in, such as when they propose new spending, then cut that proposed new spending slightly and claim they have reduced government spending. This charade is aided and abetted by the news media, which in some cases does not understand what is going on and in others just settles for it because to do otherwise takes too many paragraphs of explanation.

All that aside, Clinton was aided by a robust economy, the Dot Com bubble, as I recall, was a big part of it. But under Clinton the federal budget was balanced (in governmentspeak anyway) and Welfare reform was enacted, something you would have expected Republicans to do.

Bush came into office promising to keep taxes low (especially for folks who could most afford to pay them in the first place) and to loosen government control on free enterprise. He now prepares to leave office while presiding over the biggest socialization of government since Franklin Delano Roosevelt (maybe bigger).

It seems that a lot of the laissez faire free enterprise folks, to include George W., don’t have the courage of their convictions. To be sure, this bailout and nationalization stuff has caused a split in the GOP, which will in part to be blamed for John McCain losing the election, as he at this time seems destined to do. I still think he could win if the stock market were to stay up and gasoline prices kept falling, and if there were to be some attack on the nation or if as I read in another blog that the Bush Administration is able to announce that Osama Bin Laden has been caught. Now this does not make sense. But the voting record of the American electorate is often driven by fear and emotion. This time around it does seem,though, that folks – the Palin contingent aside – seem to be looking at things more thoughtfully and more people are taking part.

What I meant to say in this blog and did not get around to, is that our economy is fundamentally unsound because we (as a nation) have spent too much time consuming and not enough time making. When we get back to the making, which we are quite capable of doing, conditions will improve greatly, I feel. When we get back to investing in our own nation and not industry elsewhere and not in nation building in the Middle East, things will turn around.

Still wandering, but I fear that all of this government infusion into the economy is going to lead to wild inflation. I just heard an economic pundit on TV say that he thinks we are in danger of going into something worse than the Great Depression. We’ll have high unemployment but unlike the Great Depression, we’ll also have inflation.

Wouldn’t it have been better to let the investment banks and other banks fail and be replaced by new bankers who would operate like the bankers of old, prudently?

And finally, I want to jump to the subject of war. In all of this economic upheaval we have forgotten about the wars we are fighting.

Unlike Vietnam (something a couple of generations now have no memory of), there is no draft and the numbers of casualties and troops involved are much smaller (but no less important). But people are dying and being gravely wounded and none of us really know what for, beyond the jingoistic phrases of “fighting terror” or “fighting for freedom”, that have no thought behind them.

I want to mention this because I was thinking about a boyhood acquaintance that dates back to first through fifth grade. He had a stutter, and beyond that I can only describe him as the typical all-American boy. He probably did not do well in school (I don’t know. Our family moved after fifth grade). I recall going over to his house and a bunch of us kids playing on the slip and slide he had just got. I often think back to those kids because it was a time when we were all so happy, free and easy, with no responsibilities (at least I didn’t have any).

I had just got through entertaining my youngest daughter with my memories of that kid who stuttered (not about his stutter, just the fun) and went back into the house to go on the computer. Quite by chance I ran across his name. He died as a Marine in Vietnam from enemy fire.

None of us knew what that war was all about either, except something about fighting for the cause of freedom, and yet no one was freed, except from life on earth.


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.


Bush as Hoover, our army, our beer…

July 15, 2008

 

(copyright)

The WALTHER REPORT

By Tony Walther

Here’s some observations on the news and trends of the day:

– President Bush says we’re going through trying times, but basically our economy is sound. Kind of sounds like Herbert Hoover to me.

– Barack Obama says that we should have been paying more attention to Afghanistan in the first place, instead of Iraq. He may well be right, but his most recent statements involving the war over there should be instructive to anyone who might vote for him thinking he will get us out of war. More than likely, he’ll just move it over a little.

And on the subject of war, my wife and I were watching a television saga called “Army Wives” and in it there were these dedicated soldiers who fought in Iraq and wanted to go back for more. Now of course this was fiction, but I think we were both thinking of how in real life we constantly see and hear reports of military personnel who suffer terrible injuries wanting to go back and fight again. We sometimes wonder if the media doesn’t cherry pick (my term) who they interview, but whatever, most of these military people seem a reasonably intelligent and dedicated lot. Anyway, with that in mind, I made a comment on how dedicated they are (mixing fact and fiction, entertainment land with real world, kind of like Ronald Reagan used to do), and she looked at me and said: “yeah, they’re not a bunch of whiners.”

It got me to thinking about our all-volunteer military. I have had my doubts about whether we should have what I think of as something akin to a mercenary force (although my dictionary tells me mercenary only refers to fighting for a foreign country). I still do have concerns. But I have to say, from what I have seen of them, they are indeed the best fighting force we’ve ever had. Of course, that’s just an off-the-cuff opinion with nothing really to go by other than perception and comparison of news reports, newsreels, reading of history, and so on (and we also have seen the reports of the high suicide rate among soldiers and of complaints about unending deployments).

But, assuming that we do have this highly skilled and motivated military, we should use them to our best advantage. I still believe that the basic strategy of throwing everything we’ve got at the enemy would be the way to go. The other options seem to be endless stalemate, or to quit. If we were to just quit we have to realize the likely consequences: years of recriminations (who lost the Middle East?), emboldened enemies who will see the USA as what communist China used to call a “Paper Tiger,” and a demoralization of our military like we saw post-Vietnam (but also a much lesser drain on our economy).

Now I have just written something that makes me seem pro-war, militant, jingoistic, whatever. But I maintain that I am not. I would rather see the U.S. avoid conflict whenever it can. I actually like to the idea of neutrality, within limits. But when you pick a fight, you should be able to carry it off.

It’s a little late to conclude we just made a mistake –- where was the mass outcry from the public?

It still rings in my ears when pre-Iraq war it was pointed out that there seemed no logical reason to attack Iraq. The believers kept saying: “the president knows things we don’t.” I’ll just shake my head and leave that alone, well except:

In a recent letter to the editor in my local newspaper the writer implied nuclear weapons material was found in Iraq after all and that we shipped it to Canada. Looked that one up on the web and found that the U.S. did recently secretly ship 500 tons of low grade uranium, reportedly not weapons grade, to a private concern in Canada at a cost to the taxpayers of $70 million. Obviously it’s not a secret anymore. The Iraqi government had asked us to get rid of the stuff. If that was what Bush knew way back when, I think he’d be crowing about it now. And they didn’t throw rose petals at us when we “liberated” them either.

Moving on:

– Budweiser, the all-American beer, has been bought out by a Belgium-based brewing conglomerate. Ho hum I say. If you really enjoy beer, Budweiser is about as close to real beer as bottled water. Just don’t take over Sierra Nevada or Anchor Steam, to name a couple.

– Recently while waiting to get a blood draw, I thumbed through a copy of U.S. News and World Report. What a good weekly news magazine, I thought. I had been disappointed with Time and Newsweek these past many years. Now I read on the web today that U.S. News is dropping down to a once every other week cycle, a victim of online. Of course it is touting its online edition, but I can see the handwriting on the wall. Traditional print is dying, and it makes me sad.

As I was waiting in the doctor’s office today, I thumbed through the printed version of U.S. News and World Report and spotted an item that suggested that if elected Obama might consider a Supreme Court nomination (when the chance arose) for Hillary Clinton. I check the web every day and I hadn’t seen that one.

– Last Thanksgiving or Christmas I was talking politics with the family and I prognosticated that Mitt Romney would win the Republican presidential nomination, not because I like him, but because I thought he had the smoothness, the business tone, the look. I was surprised when he fell out of the race so soon. Well, He’s baaaack, maybe. The web tells me he’s high on the list for VP picks for John McCain. With the economy in the dumper, I’ll bet he would really strengthen McCain’s chances. Again, that is not an endorsement from me, just an observation. And with my track record on such prognostications, well, sorry Mr. McCain.