Stagflation The Challenge of the New President

The US economy is slowly playing out the results of 30 years of Reaganomics. The excesses of the various bubbles created by irresponsible economic policy are wrung out of the system. Everyday brings new evidence of resource dislocations. The dollar trades at historic lows. Gold rises to historic highs. Salaries, adjusted for inflation, continue to slide. Core inflation, the one without food and energy, retains its upward bias. Real inflation, the one that acts on consumers buying power, rises to the highest levels in 50 years. Unemployment, even with the FAUX calculations of the Government, is above 5%. All this data reported by the FED while expectations of GDP are falling. Obviously the FED will not project negative GDP but recent real data is showing negative growth. This is the dreaded STAGFLATION!

The candidates for President of the United States range in their rhetoric from, “times are difficult” to “the economy is on a strong foundation, we need to confirm the tax cuts for the rich.” In some ways I feel sorry for the new President. The President will inherit a disaster that may or may not have become evident by the end of the year. To fix the problem the new President will have to get away from the Pollyannesque view of the US economy and take on business to restructure what and where we produce goods and services. Given the extreme pillaging of the US economy by corporations the fix will also need to be extreme. So many of the current Reaganomic structures will be influenced that it would be prudent to add extra security around the President as this individual will most likely not finish his term.

Many ask, “why so negative?” In reality I am not negative, simply realistic. If we refuse to see the problems we face we cannot fix them. Like a tumor they grow and fester. One day they are so powerful that the only hope of survival is radical surgery and aggressive attacks with radiation and chemicals. Many times the patient still dies. We are coming to the point when the symptoms of the illness will no longer be masked by band-aid type interventions. Interest rate cuts and stimulus packages will do little or nothing just as painkillers mitigate the pain but do not eliminate the cause.

Our new President will need WE THE PEOPLE for support. Sacrifices will be needed by all and public consensus will have to be unwavering to reform corporate and fiscal law.

Many still do not understand what I am talking about. Sure things are a bit tougher than times past but still pretty good. They are more interested in discussing whether or not gays should get married or if the appropriate drinking age is 21. These topics will become less important as the number of homeless increase. Those with homes will face the choices made in the 30s, pay the property taxes or eat dinner. The House Poor will be the new phrase. Times are changing. The data is clear. Save your money and pay down debt if you can. Cash will be king.

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US Values Special Interests more than Education

Why should the United States be concerned with providing education for its youth. The HB Visa program has taken care of America’s future. If we do not have enough Cheap University Graduates we can just import them from some country that provides free University Education to its citizens. Most Americans at this point are thinking this is crazy, he is just upset about something or that I am a Commie Pinko Fag (term from the 70s). Unfortunately, none of the above are true. The proof is in the legislation.

The Georgetown Voice writes:

The College Opportunity and Affordability Act of 2007, currently before both houses of Congress in different forms, would reform the corrupt student loan industry and make textbooks more affordable, among other admirable goals. Unfortunately, though, the bills also contain clauses that instruct universities to crack down on file-sharing on college campuses. While the Voice does not condone illegal file-sharing, Congress should not be roping universities into the fight against it, and Georgetown should not be diverting any of its limited resources into investigating students’ downloading habits.

If WE THE PEOPLE are interested in a strong and vibrant America then we must make education available to all no matter what one’s social status.

This is a bold statement. It sounds populous. It surely will upset those born into the Upper Class who enjoy a road less traveled. Thoughtful consideration instead leads us to believe that the strength of the United States in the future is best served by free University Education to all who desire it.

In any population there is a certain portion of a population that does well with manual tasks, others are thinkers, communicators, organizers or athletes. Rarely are the same genetic characteristics passed from parent to child instead they as the population mixes and mingles certain traits appear and go dormant skipping generations. Very complex children can be born to very simple parents and vice versa. Additionally science has found that mixing very different genetic characteristics produce better more adapt offspring.

The very mathematics of genetics teaches us that the best and the brightest will not come from the rich upper class. As a country interested in its future we should be facilitating the education of those least likely to fit the normal profile.

Our politicians are so corrupt and the collusion between business and politics is so great that our legislators have decided that it is more important to protect a corporation’s profits then to teach the greatest minds.

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Michael Jordan Supports Sweatshops with Child Labor

One of the ways professional athletes make big bucks is by lending their name and image to some company to sell products. These testimonials say, “I vouch for this product. It is good. If you use this product you can be like me.” In the advertising industry they call these endorsement contracts, “giving a face to the product.” Michael Jordan is the prime example. He has been so successful with Nike that Nike has split out the Jordan endorsement portion in a separate company called Jordan Productions.

We like Michael Jordan. We think he is a good guy. He made us feel good with his basketball prowess. He also seems to be a really nice individual. Any company Michael Jordan represents surely acts like Michael Jordan does. How could Michael Jordan endorse slave and child labor? The situation is so bad that the production facilities have been subjected to four strikes in the last 12 months. I thought Michael Jordan was a Christian guy. He has kids. Would he want his children working in sweatshops?

Nike, a true success story, makes profits by using sweatshops and child labor. Their human rights abuses have been well documented over the past four years. Currently Nike is in a major public relations campaign designed to clean its tainted image. They say they have made great progresses but have a strict policy of paying market wages instead of paying a living wage. They also admit that their facilities, in communist Vietnam, use child labor.

Michael Jordan therefore not only supports but, endorses the use of sweatshops and child labor.

What does Michael Jordan’s lack of moral fortitude have to do with American Politics?

Michael Jordan is the perfect example of why Reaganomics must be eliminated and government given back to the citizens of the United States of America. A person that we consider good, in the name of a corporation, does culturally unacceptable things for money. He convinces himself that he is separated from the actual wrongdoing and finds solace in “not knowing” or not having the capacity to change what is going on. If he does not accept the endorsement then someone else will and he will lose a lot of money.

Companies have only one purpose. That is: make money. They cannot be expected to do anything other than greedily chase the latest money making scheme. If they can find a way to game the system they will. They do not care about humanity or the long term viability of a country. They will just move somewhere else and continue exploiting the system. They will fight tooth and nail to keep their end user markets open to the new junk they produce in some undeveloped country where they can use child labor or employ dangerous materials without safeguards. They do not care if children receive an education. They do not care whether or not people die from starvation or lack of medical care. They do not take any responsibility when people die working, producing their products.

Companies cannot be expected to express a country’s values unless the country’s values are greed and world domination. If companies do not have the same values as the citizens of a country then companies have no role in government.

I want to believe that Michael Jordan has not consciously decided to sell out his image to a company that employs child and slave labor. Just as I want to think that Mr. Jordan just has not thought about the correlation of Nike’s actions and his image, I believe that most Americans do not realize that the actions of Coca Cola, Dow, GE, Exxon, and McDonalds represent America.

Extremist groups that hate America or plot against America are not really upset with Joe Worker. They are upset with the immorality and greed expressed by US corporations. Whether we like it or not, America defined by what these corporations do.

Our government talks about using the military to protect US interests across the world. Our soldiers die and the treasury is depleted to guarantee that Nike, Walmart or Exxon can exploit world poverty. I see no difference in the actions of companies moving production facilities to China than Sex tourists who travel the world to find places where they can indulge any desire that may be prohibited in the US.

Michael Jordan may offer his image to a sex tourist but I believe that a majority of Americans do not want to be associated with child prostitution, child labor, slavery, unsafe or deadly working environments.

Since companies, by their statute, cannot encompass these values it is our responsibility, as Americans, to conform corporations and their executives to the values of the nation. Companies must be regulated and controlled. They must be held responsible for their actions and their movements controlled and limited.

Perhaps the best response to a global unrest would be restricting US corporations instead of threatening military action.

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Are We There Yet – Recession and Reaganomics

The discussion continues:

Is the US economy in a recession?

Will the US economy enter a recession?

Generally economists agree that either we are in a recession or we will enter one soon. Federal Reserve Chairman Ben Bernanke indicates that we are not in a recession but the downside risks to the economy outweigh the risks of inflation. There are those who say that we are not in a recession and that if we were in a recession this would be the most announced recession ever known. Their reasoning is that a recession cannot occur when it is widely expected.

The changes made since Reagan in the calculation of GDP make it almost impossible for the US to register a recession, defined as 2 consecutive quarters of negative growth. I wonder what would happen to 2004 to 2007 GDP if we eliminate the excess valuation and earnings now being discounted from the Housing and Financial sectors. Perhaps we would find that the GDP has been negative 12% for the last four years. Politicians would be happy, they could blame it on “9/11”.

I suggest further that while a recession is discussed, it is difficult to enter recession. In fact we are in a depression. The difference between a recession and a depression is the strength of the declines. A Depression is called when GDP diminishes by 10% while any negativity is a recession. The Federal Government will wait many years before making the adjustments to 2004-2007 GDP. The new President will use the modified data to say how good of a job he/she is doing. All of this has little importance except to help us understand what we need to do to make sure 4 years of depression does not become “4 more years”, as the presidential candidates like to say.

There has only been one other major depression in the US. It occurred in the 1930s. Again it was due to what was called at that time “Corporatism”. “Corporatism” also took off in the 1930s in Europe and is known as “Italian Fascism” (most interestingly banned from European politics in the 50s). The US resurrected it in the 80s. It is called Reaganomics. We worked our way out of it by investing in the US with the greatest program of structural investment ever known. The Italians did the same and the version in Germany, which added nationalism to the mix under the Nazi party, came out through the Marshal plan. The common denominator of the recovery is national investment.

It is no longer a question of whether or not the US economy will contract. The degree may be discussed but it is hard to see where the US economy will find 12% of GDP to substitute the smoke and mirrors sector propagated by the financial institutions. FED rate cuts will do nothing. Emergency intervention plans will be nothing more than band-aids when the patient has its guts spewed all over the street. We can decide to limit the damages and attempt to avoid the birth of Hoovervilles in parks across America.

We need Leadership from our Politicians. Leadership does not mean doing what Americans do not want to favor Corporate America or special interest groups like Amnesty for Illegal Immigrants and open borders. Leadership means going against those who are foraging the politicians with perks. Leadership means doing the good of Americans even though it may mean fewer “political contributions.” Leadership means putting the good of the country before the good of the politicians family.

We ask our soldiers to sacrifice their lives for the good of the country. It only seems reasonable to expect politicians to give up a few extra bucks to save this great nation.

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Reaganomics causes Recessions – Economic Stimulus Needed

Secretary of Treasury Hank “Henry” Paulsen finally acknowledged that the US economy sucks. President Bush meekly accepted that there are mixed signals but the underlying economy remains strong. Perhaps he is talking about the Chinese or other third world economies that supply the 82% of US consumption because he cannot be talking about anywhere in the continental US. President Bush and Hank Paulsen spoke of stimulus packages for the US economy. In the spirit of no crisis is too grave to cut taxes on the rich, Mr. Bush talked about making permanent his tax cuts. Even if this would do anything other than make the rich, richer this would do nothing until 2010 when the current entitlements for the rich expire.

Other programs include bailing out the financial institutions. The push back from the general public was so strong that Countrywide, the poster boy of Corporate Greed and malfeasance, dropped another 30% today to begin trading at bankruptcy levels. In the true spirit of Reaganomics Financial Institutions continue to present vague and misleading information regarding their economic stability. Some institutions, like Countrywide Financial, are falsifying documents in court proceedings to inappropriately participate in the personal bankruptcies a direct result of their immoral practices.

There are stimulus packages that talk about rebates. This package would entail sending a refund check to taxpayers once their IRS return has been filed. While tax reductions are a great thing they would simply be a band-aid solution. This type of intervention is the only one guaranteed to get money into the system immediately but they leave the reasons for the economic problems in place. Unfortunately just the rebate, without further structural changes, will only increase our public debt.

There are stimulus packages that talk about eliminating corporate taxes. Obviously this comes from Corporate America. It does not merit discussion.

How about investing in America?

Inspect our ports for faulty and dangerous products.
Control our borders financing the fence.
Repair our bridges, levies and basic infrastructures.

These are not the superficial quick fix everyone seems to want but they will start America on a path to prosperity instead of the road to the poor house we are currently following. Every operation we undertake must be balanced. We must reduce our debt. We must create economic activity inside the US. We must reign in the power of Corporate America. Finally, we must legislate every aspect of the financial institutions operations. These things will create the greatest economic boom since the 1950s.

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Whining Babies do not make good FED Policy

I do not agree with the stance to reduce interest rates taken by the FED. I think they should have stayed pat. I do understand that with the current administration so close to corporate America they had to give something to the whining crybabies on CNBC. For some reason they associate Wall Street’s gains with Main Street economy. Unfortunately this is not true otherwise I would not have anything to write about on my blog. Wall Street is still at historical highs while the economy is in the tank due to the disastrous policies of Reaganomics forced on the American workers for the last 30 years.

I am impressed. The FED did not do exactly what the financial institutions wanted. The FED did cut rates in the face of skyrocketing inflation but it was not enough. The market sold off. We should remember that the market is within 5% of all time high levels. The problem is not the sell off. The problem is that these bubbleheads have euphoric predictions for 2007. If the market does not meet their forecasts they lose credibility. Poor babies!

The FED put together a worldwide program to increase liquidity to solve a problem created by bad speculative investments made by the greedy financial institutions. How else could they justify paying some Knumbnutt CEO $200 million? The FEDs program primarily creates a temporary bailout by worldwide governments to allow the financial institutions time to get their books in order and buy back this crap.

Wall Street is in an uproar! “THEY KNOW NOTHING!” is shouted by monkeys who think the FED’s job is to protect financial institutions from their bad investments. Traders across the board are calling for Bernanke to resign. How dare he not do exactly what they wanted? The financial institutions have criticized the timing of the announcements. This clearly indicated that the Fat Cats in Wall Street think that the FED is at their beckon call.

I think the FED was too lax and should not have eased. I have called for the elimination of the FED. I have done this because I do not think that the working Joe should be guaranteeing Wall Street’s $100 million dollar salaries. With this premise, if the FED must remain, we need a Bernanke who can think of ways to save Wall Street’s buttes without destroying the dollar and sending inflation to 1500% a year.

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Why Wall Street CEOs Earn Multimillion $ Salaries!

It should be a reasonable assumption that no single individual can bring the same value as what can be produced by 10,000 other people. This can be supported by the fact the great pyramids, the great wall and other truly major accomplishments were made by people who would have a hard time finding a dishwasher’s position here in the US today. So what makes some institutional investors believe that one man is worth more than 10,000, and in some cases 100,000, employees?

This week the FED has reiterated numerous times that it intends to bailout financial institutions with a move much stronger than the economically disastrous move it made it August. They ingenuously stated that the August move did not resolve the problem. It is comforting that our government employs individuals so astute. The new, and improved, bailout will be sold to the public as saving the poor homeowner.

This bailout will do the same as the last. The dollar will fall, inflation will exponentially explode, and the stock market, after a brief rally will tank again. All of this will occur and homeowners will still have the same problems as today. They will lose their homes. The banks rally on these proposed plans because the government will keep them from losing money on the foreclosures. Creating excess liquidity and low interest rates will create a new bubble in some other smoke and mirrors sector like Internet or Housing.

The FED knows it cannot fix the excesses created by institutional speculators who throw caution to the wind while playing the subprime roulette. The members of the FED have said as much. So why are members of the FED willing to throw away distinguished careers to be remembered in history as facilitators of the greatest depression in the US economy. A depression of this magnitude would most likely creep into the rest of the world and could trigger a deflationary period similar to the Dark Ages.

This is where the Wall Street CEO makes his pay. Only the best are employed in this activity. They must woo the regulator and convince the government that it is in the best interest of all that the interests of financial institutions are greater than the good of the country. He must engage his imagination and supply plausible mumbo jumbo talking points to make the pill edible. It takes a unique individual to play this role. Most Americans would puke their dinner every night as they consider the repercussions of their actions. Simply put, a normal human being could not live with himself. These superhuman CEOs are able to sleep at night knowing that while people are dying because we cannot afford health insurance, families are homeless and children have no hope for the future they will use public funds to enrich the coffers of financial institutions.

The result is simple. The losses from the speculative actions by financial institutions would cost the bottom line 1.5 trillion dollars. Through these gods of Wall Street the losses will be 1 or 2 billion. The 200 million dollar salary of the CEO is a cheap price to pay for the governmental bailout they can provide. Another example of Reaganomics at its best: A government of the corporations, by the corporations and for the corporations.

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Steven Colbert withdraws Presidential Bid

Steven Colbert has decided not to run for president of the United States following the refusal of the State of North Carolina to put him on the Democratic Ballot. The Democratic Party lobbied the State adamantly to refuse Mr. Colbert’s nomination on the ballot. Their reasoning, “We do not want to make a mockery of this sacred institution.” Aside from the fact that Mr. Colbert would have received a tremendous number of votes the reasoning indicated by the Democratic Party is absurd. Mr. Colbert cannot make a mockery of our political process, THE POLITICIANS HAVE ALREADY DONE THAT. Votes for Mr. Colbert would have indicated the disdain that US citizens have for our politicians. Considering that a recent CNN Poll indicated that 87% are angry about how our country is being governed it is highly probable that Mr. Colbert would have won the State.

Mr. Colbert’s decision to run was a ray of hope in the tempest that is America’s immediate future. New blood without ties to corporate America is our best chance at mitigating the total economic collapse the direct result of thirty years of the disastrous economic policy known as Reaganomics. Mr. Colbert, please consider running as an independent. The Democrats and Republicans are all the same. They are simply corrupt members of the “Good ole boys club.”

Obviously all the “Good ole boys” are saying that we must not change things. We need the dynasties. We must favor corporate greed and ask more sacrifices of our working citizens. We need open borders. We must eliminate quality and safety controls on products from other countries. It may have been ok to attempt this new economic plan but after 30 years it is time that we take account of our economy and the status of the United States. Only an outsider can do this.

Please, Mr. Colbert, run as an Independent. We need change and our current political system will only allow for this to come from someone who has name recognition for other reasons.

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Gap Production facility buys children slaves as young as 10 to work sewing jeans

Authorities uncover Gap, the US retailer of jeans and young teen clothing, buying children from impoverished families in India to work as slave labour sewing jeans in their production facilities. As I read this article to my wife she fought back the tears and asked me to go on to something else. In a quiet and slightly trembling voice she asked me to talk about something else. We have travelled the world and lived in various countries. Both of us have run companies, not big by US standards, but big enough. We are not naïve. Poverty exists, human tragedies occur every day in every country in the world including the US. We cannot stop them.

We have always treated the employees of the companies we were responsible for, with respect and dignity. Many of these same employees would not agree and many did not give a fair return to the company but this is part of running a business. We understand the pressures a CEO and Board feel to secure returns for investors however there must be a line. There must be a boundary that no CEO will cross for financial gain.

The company responded on Sunday that it:

“launched an investigation after it was told earlier this week about an allegation of child labor at a factory in India that was working on one product for GapKids.
The company said a very small portion of a particular order placed with one of its vendors was given to an unauthorized subcontractor without its knowledge, which violated its agreement with the vendor.

The company said it stopped the work order as soon as it was alerted and prevented product from being sold in stores.

It said it strictly prohibits the use of child labor.”

This evokes memories of Mattel CEO whining before Congress about how they did not know about lead in all their toys for children and that it was limited to just a “few and isolated, unauthorized facilities” and that the company had no prior knowledge. All this just days before Mattel went to the Chinese government and apologized publicly for the outrage in the US over shoddy Chinese workmanship and unhealthy materials.

These Multimillion Dollar CEOs are lying to you, me and Congress. They know full well what is going on. They are willing to poison American children in the name of profits, why does it seem so strange that they would buy children slaves for profits. These CEOs cannot hide behind guise “Don’t look, Don’t tell”. They know full well what is going on, they just do not care. A prominent promoter of Reaganomics recently asked why CEOs are always portrayed as crooks, dishonest, lying bastards in films. The answer is simple, while there are exceptions, CEOS are mostly very bad people. How can you tell if a CEO is bad?

A CEO is bad when he makes millions of dollars a year and has people on his payroll who do not make more than the poverty level. A CEO is bad when he moves production facilities offshore so he can use child labour, not clean up the pollution generated by his production process, and/or utilize chemical, elements and materials banned from US production facilities. In other words just about every company listed on the US exchanges.

The American consumer is caught in the middle. Very few Americans approve of using child slavery. Americans have already banned dangerous pesticides, lead in paint, and created legislation requiring production facilities to clean up their pollutants but our corporations have found a way around it. Just move the facility to some poor country where these things are not prohibited. They indicate that Americans are not required to purchase their goods. No one is twisting the consumer’s arms. No one forces shoppers to go to Walmart or Target or to buy Mattel’s and Disney’s toys however when the US only produces 18% of what it consumes onshore there is little choice.

Unfortunately we must depend on our elected officials to regulate, control and verify what corporations do. We must trust the same politicians who receive millions of dollars in kick-backs and contributions to make corporations live up to US standards. This is a losing battle. All that remains is for each American to shed a silent tear as we enjoy that new pair of jeans our teenage daughter just had to have and remember, “there, but for the grace of God, go I.”

Tags: Government Politics Recession Corporate America Finance Child Labor Economy Reaganomics

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Comprehensive Immigration Reform before the End of 2007

I live in one of those states where half the channels are Spanish programming. This could be a good thing since Texas is one of those states where you can get by without speaking English but if you are not proficient in Spanish you cannot get a job no matter what your education. I often listen to the Spanish evening news to see what is important to the Spanish community and how that differs from the English speaking community. The obvious difference is that illegal aliens are never referred to as illegal immigrants or criminals instead they are the undocumented victims of their right to work in the lands that were stolen from them. The news about how to get around immigration laws and the rights of illegal aliens usually fills about 15 minutes of the 30 minute broadcasts.

This past week the rhetoric has changed a bit. One politician after another, Democrats and Republicans alike, are featured in specials with one message. Without an inkling of doubt, they all declare with wide smiles and gleeful chatter that comprehensive reform with amnesty for the “poor victims of xenophobia just trying to feed their families” will be enacted before the end of 2007.

My curiosity is aroused. I have researched diligently. I do not claim to have any special knowledge about the workings of Washington but I have not found any indication that public sentiment has changed. This can only mean that the politicians who heeded the desires of citizens of the US have sold out to the promoters of slave labor and open borders. Perhaps it is was the veto of health insurance funding for children of legal residents that gives them the confidence that congress and the Whitehouse sell out the American people and defy WE THE PEOPLE. The fact is that congress and corporate America are dead set on passing this legislation.

If amnesty for criminal illegal aliens and open borders are not your idea of the way America should be going into the future then it could be important to remind your elected representative of your thoughts on the matter.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Decision of the Century –Crossroad Choice Centralized Communist or Distributed Economy

For some reason Ronald Reagan is given credit for tearing down the Berlin wall. Nothing could be farther from the truth. The fall of Communism and the breakup of the USSR was solely due to Mikhail Gorbachev’s vision of a better future and the total economic failure of the centralized economy. The Centralized economy is based on the belief that goods and services should be produced freely in places where labor is less expensive. It also is based on the belief that big structures are more efficient than smaller structures. It only took about 50 years for this economic structure to destroy Russia’s infrastructures and dilapidate their country’s wealth.

The nation is terribly divided about what political party is better than the other. There is also a new group of citizens, like myself, who think that both are corrupt and decadent and should be eliminated. The politicians have been successful convincing many Americans that the problem is with the other party but America is strong. I sustain that we should completely forget the politicians and look at what our economic and political structure has become. A comparison between the US and the falling USSR could be valuable.

The USSR controlled the people by making the government more important than the people. They played on national pride to justify the actions of the KGB. Today we have a very similar situation with all law enforcement but exaggerated with Homeland Security. District Attorneys use their position to steamroll the justice process for their own personal ambitions. One such example could be Elliot Spitzer who prosecuted Martha Stewart for lying to the government. Another could be the Pro Mexican Attorney General who successfully prosecuted two border agents for doing their job when the clear indications from the central government were to allow Illegal Aliens to freely cross the US border with drugs.

The invasion of personal privacy by the citizens of the USSR would have been tolerated if the economy had been good. Unfortunately centralized production facilities are just bad business. Whenever an event affects anyone of these structures then the entire nation suffers. It is like playing the lottery with your entire paycheck every month. Who knows you may win but if you lose there is little to eat over the next weeks. Reaganomics introduced the concept that it was acceptable to have monopolistic structures that use size and financial capabilities to destroy small businesses. It is now acceptable to hear companies indicate that their growth strategy is, “Growth through Acquisition.” In other words if you cannot build a better product at a reasonable price buy them and eliminate the competition.

The USSR further compounded their problems by not investing in the distributed economy. It was only important to protect their major production facilities. Roads, bridges, utilities, telecommunications, and other basic infrastructures did not receive sufficient funding. There just was not enough money. We are seeing the same problems across the US. Hurricanes break levies in New Orleans, bridges collapse in Minnesota, pipes explode in New York, and roads are engulfed in huge sink holds in Texas, just to name a few.

As the corruption of Russia’s political scene progressed the entire economy became less efficient. Unemployment grew, inflation raged, meanwhile the government continued with their talking points, “We are the greatest nation on the face of the Earth.” Perhaps we can find some similarities with our politicians telling us that the economy is strong while we see GDP fall, public debt increases, and the government is no longer able to maintain its contractual agreements with the citizens of the US.

If we continue down the current path we can only expect to realize a future like the USSR’s past. Unfortunately with the current group of crooks running for office nothing will change no matter how we vote. We need new blood. People who are actually interested in “Public Service” and doing the good of the nation. We need to mitigate the mega corporation’s capability to destroy small businesses. We need change. Real Change.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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The Bailout of Speculative Investments continues - The Mafia is Alive and Well

Recently I suggested it would be less expensive for the US government to give $1 trillion to the financial institutions to cover their speculative losses than to play the games with interest rates and liquidity which will have long term negative effects on the US economy. It seems that someone, who actually counts, had the same idea. The Treasury, yes Mr. Wall Street now Treasury Secretary, is sponsoring the creation of a bailout fund between Bank of America (BAC) and JP Morgan (JPM). The fund of $ 100 billion would buy distressed bad loans allowing the banks to not write off the bad loans.

These loans would then be packaged again and sold “avoiding fire sale pricing.” Where have we heard this before? Rumors are circulating, “the fund is guaranteed by the government”. It is so sad that we live in a country that will spend its money protecting the financial gains of speculators and “cannot afford to insure poor children!”

The examples of collusion and corruption are too numerous to list. Politicians are using our tax dollars to repay the favors from corporate America. We often think that the mafia has been eliminated in the US. I suggest that the mafia is alive and well. It has changed form. Now they call it Corporate America. The ills of corruption are the same. The economy suffers. The citizens are intimidated and freedoms are lost. So at the risk of finding a dead fish on my doorstep, this is CORRUPTION. Stop Collusion between business and government. Prosecute politicians receiving corporate bribes.

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Tell me again, What does the FDA do?

The Food and Drug Administration should verify the quality and safety of food and drugs for human consumption. In the light of scandalous recalls, E.Coli and Salmonella infections the FDA told a congressional panel that they were not able to guarantee the food source. In fact the extent of their controls were more procedural than operative. This week’s testimony before Congress evidenced something more interesting. More than 50% of drugs consumed in the US actually come from China. The FDA has no oversight authority on foreign suppliers. They can request that the Chinese government accompany them to inspect a producer if the producer agrees to receive a visit from the FDA. In any case the supplier must be given 30days advanced notice.

WTF?!? This is another example of the stupidity of Reaganomics and greed of corporate America. If a company were to produce drugs in the US, producers would be subject to regulations, documentation, and surprise inspections. Needless to say the FDA indicated that no drugs are produced in America. I wonder how this all plays into the hoopla about how Canada’s drugs were less safe and lower quality than US drugs. Sounds like lobbies buying the congress, corrupt politicians and outright lies to me.

I guess we are as stupid as the politicians think we are. I believed that our pharmaceutical industry actually produced something. Why wasn’t the opposition out there telling us this instead of their stupid “talking points”. We have abandoned by our government. It is not “all Mr. Bush’s fault.” This is the direct result of Reaganomics. It began thirty years ago and has gone unchecked. Think about our economy as a brand new Cadillac. Reagan and his cronies figured out that if they use a lower grade of oil instead of the synthetic their maintenance costs would decrease. Then they figured out that they could change the air filter every 12 months instead of at six months. Then the oil changes came every 15,000 miles instead of every 5,000. The next plausible solution was to eliminate the 40,000 review and adjustments. The new tires were retreads from China. The garage was sold and the car left out in the hot Texas sun.

Our economy, like that Cadillac, now clicks, leaks a bit of oil here and there and strangely enough the car jumps when the automatic transmission shifts from first to second. It still starts in the morning but it sure has a hard time and a black plume of smoke funnels out the tail pipe. Strangely when we push the accelerator the engine floods and almost dies. It is still a Cadillac but it needs some serious TLC.

Our country and our economy needs a full check-up. It may need a valve job and the head gasket may be gone. The tires may explode on the expressway but we can fix that with a little preventative care. Who knows, the transmission my only need a new flywheel or a simple cable adjustment.

Unfortunately our technicians are wiping down the leather and polishing the body instead of making sure this economy will take us from point A to point B. The process of Reaganomics must be stopped. We must tell our politicians to fight against Reaganomics in all its forms. This can be the power train of the world once again but we must eliminate corporate influence in government and hang corrupt politicians. If goods are not produced under the same regulations, including inspections that US corporations would be subject to, they must not be allowed to cross the US borders.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Another Day, Another Recall of Children’s Toys

Numerous toy recalls, Mattel, Disney, Target and now Dollar stores are just a few examples of the unscrupulous outsourcing by Corporate America and the ineptitude of our Government. Children have died, been poisoned by lead, and this is just in the toy sector. There is not enough space or time to talk about food poisoning, tires blowing apart and other design and manufacturing infractions of US law. One might say that Corporate America is trying to clean up its act. I believe that the number of products that do not conform to US law is so great that shelves in US stores would be empty should we actually control everything.

Who cares if Americans die? We can always get new ones through illegal immigration. Long live the donkey, oops, I mean the consumer! Our government and Corporate America is working very hard to return the US to the days of the cowboy. No regulations, no respect for laws, and no advancement of society are the common goals. Many seem to like this scenario. I think they believe that they have sufficient money to enforce their lifestyle. A return to the days of the cowboys would strengthen the class structure in the US. Those who have and then everyone else. Working Joe must take responsibility. He must work 3 jobs, live in poverty and succumb to the whims of the haves.

Perhaps this is not a bad idea. The days of the cowboy meant small government and primarily no laws. If a company ripped you off, you could get immediate retribution. Your six shooter and rifle in hand you could walk up to the CEO of the scam company and shoot him in honor. Just think about how the financial markets would look today under that scenario. If your elected official lied to you he lost his word, the only thing of value, and you could give him a good lickin’. Perhaps people would think more about the consequences of their decisions.

The fact is that what is called globalization is not true free market. It simply moves the costs to produce goods from one segment to another. We have banned lead in paint for a good reason. It is a poison. Lead paint will last much longer than non lead based paint. It is cheaper purchase. Under today’s Free Trade concepts Americans are stupid for not using lead based paint. So what does corporate America do? It shifts production to a place that can used lead based paint and then sells the products to the dumb Americans. They then tell Americans that they have lost their jobs because Americans are stupid, unkempt and do not want to work. Americans are surely stupid for banning lead in paint. The production of toys would still be here in the US if a bunch of left winged radicals had not pushed to eliminate lead from paint.

Your congress and corporate America do not want you informed about where the products are made and the safety of those products. They are spending Billions of Dollars fighting labeling requirements indicating point of origin (where the product is made). An informed consumer is most likely going to purchase a product made where health and safety regulation are followed. This would mean that the $ 100 million CEOs could no longer get there bonuses because they know their products are not safe. Informing the consumer is a direct attack on their scams, I mean business model.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Walmart Fights in the court of Consumer Opinion

I have long sustained that business models based on the cheapest price are failed models. Walmart has long touted this model although it was not part of the original model. Walmart was created with a model based on offering local products at a reasonable price. Their differentiating factor was that they would eliminate the middleman and allow local producers and farmers to sell their products directly in the store without having to share their earnings with distributors and wholesalers. This model allowed the producer and Walmart to have greater margins. Somewhere along the path to becoming the largest retailer in the world, most likely when Wall Street became involved, Walmart modified its business model and went for low prices at any cost.

Walmart began expanding and decided that its business was to offer the lowest price. They forgot the premise of their success, quality products at a reasonable price by eliminating middleman and transportation costs. They embraced the traditional distribution and wholesale model and decided that the low price was their model. This was the beginning of the end of Walmart. As soon as Walmart started down this road they became the Kmart, Sears, and so many other low cost retailer who first grow and then die.

Since Walmart now had the same cost structure as other retailers they had to cut costs from other areas. They went in two directions. They massacred their employee compensation and started buying products produced in other parts of the world. The result was the complete abandonment of the original successful business model. Since quality and price at the point of production are relatively stable the only way to compensate for higher distribution and transportation costs was to reduce quality. Today, over 70% of products in Walmart come from Chinese producers. The shipping costs now account for almost 30% of the price of anything found on the shelves. Walmart sales are now stagnating. Since they no longer are quality products at a reasonable price they have no loyalty from their customers, just like what happened in Kmart with the blue light special.

Walmart realizes they have a problem. In the last year, under vicious attacks from employees and labor advocates, they began paying their employees better. In fact the typical employee, in any geographical area, makes 10% more money than a Target employee. They have eliminated their slogan about low prices at all costs. They have also begun an institutional advertising campaign to tell the US market how they are involved in giving their employees health insurance. These are not things a company does because they have had a prophetic vision. They have finally realized the fallacy of the low cost model. They have seen the light; there is always someone else who can find a way to sell your product at a lower price.

Walmart attempted to go after the high end market but failed. It is almost impossible for the crappy low price leader to sell into the quality conscious segment. They have no credibility. If Walmart wants to survive it needs to go back to the original model. Eliminate shipping costs, pay their employees a reasonable amount and sell a quality product at a reasonable price. This is the only model that will be successful. It should not be difficult for Walmart to do this; it is part of their DNA. They will have to go against the grain but their future depends on it. If they do not there will always be an Eddie Lambert out there looking to pick up retail locations.

Tags: Walmart Politics Recession Corporate America Economy Reaganomics

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How to fix the Mexican Problem!

Yes, the MEXICAN PROBLEM. The Mexican government is interfering in US politics creating political parties and lobbying congress for amnesty for illegal immigrants. The translation is that the Mexican government believes that Mexican citizens will be the primary beneficiaries of amnesty. This is part of globalization. This also means that Mexico is now fair game for interference from US entities. Since our political system is so corrupt our best opportunity to fix the now clearly defined Mexican problem is to fix Mexico.

Mexico is an extremely rich nation. Mexico’s oil resources are significant yet controlled by the rich ruling class. This ruling class created and maintains the poverty that encourages the Mexican population to leave their heritage and their culture to immigrate to the US. Immigration usually results in a life of menial labor. These oil resources could easily maintain the population for many years without having to work but more importantly taken out of the hands of the ruling class would encourage entrepreneurship and the development of small businesses. Mexicans do not want to leave their family and country but are forced to do so because of the extreme poverty they must endure in their home country.

Mexico is extremely corrupt; perhaps more corrupt than New Orleans. Anything can be bought. The solution to the US illegal immigration problem is to take the Mexican national oil companies. We must give oil production to private companies and pay royalty checks directly to Mexican citizens who actually live in the country.

We can do this by getting actively involved in Mexican politics. If politicians can raise $1 billion for the presidential election it should be a “no brainer” to raise the same amount of money to execute this plan. For those who support amnesty this would be a more humane approach allowing families to live together in their traditional lands and maintaining their culture without being bothered with integration into a different language and culture.

For those who want America’s laws to be enforced perhaps this is the cheapest way to accomplish the objective without creating a maze of laws and loopholes enriching only our politicians.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Ex-Chairman of the FED Greenspan proposes that the war in Iraq is about oil

Ex FED Chairman Alan Greenspan is making the rounds on the television circuits to promote his new book. In one of these interviews he stated that he was not against the war in Iraq. He did not feel that it had anything to do with Weapons of Mass Destruction instead it was about the expansion of radical regimes and the control of the straights of Hormutz. Paraphrasing, a country could shut off 11 billion barrels a day of oil to the western world changing the world as we know it.

He felt that this was the real reason for the war. He also stated that the Administration could not present a case for war based on this premise because of the President’s and the Vice President’s ties to the oil industry. I have always believed that the war had nothing to do with WMD. I felt it was highly improbable that we could have been so wrong about their capabilities. I did not believe however that this had anything to do with oil because any reasonable man would have understood that the cost in blood and treasure would have been significantly higher than any losses suffered by the oil industry.

Mr. Greenspan may believe that war is worth protecting America’s future. Perhaps Russia and China feel the same way. I do not believe that taking away someone’s free will to act over their own resources can be excused with our future economic survival. I guess the lives of thousands of Iraq’s citizens and thousands of US soldier’s is less important than EXXON’s profit margin. While we cannot change what has been done we can tax the oil companies to pay for their war.

Our economic way of life could easily have been protected without going to war. We have not made significant progress in energy generation because oil has been so cheap and corporations have lobbied against alternative energy development. It is time that we make energy independence a primary goal. Independence can only come from non-petroleum based solutions.

This is our country. It must represent who we are. We have delegated the management of our image and culture to corrupt politicians and corporate America for too long. If we allow the decadence to continue we will lose our place in history and become relegated to obscurity of a nation that squandered its inheritance. We must be the best nation in the world based on principles not because we have better missiles. Remember every day there is someone bigger, stronger and more intelligent. We must be great because we work hard, are honest and can gain consensus.

Tags: Government Politics Iraq Corporate America Finance Illegal Immigration Economy Reaganomics

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US-China Trade War is on – Are you ready to fight?

Have you heard? Not only does your government think that Americans lazy, unkempt and uneducated but China says that we complain too much. Endless recalls of products produced in China that violate US consumer protection laws have pissed off China’s government. In retaliation, China is slowing the flow through of goods. The US retailers are desperate! The very reasons why I have been suggesting that America needs to produce more of its goods locally are coming to pass. Ludicrous you say. China cannot afford not to export to the US.

Let’s look at this in a different light. During the bubonic plague there was a great change in the economic system and the powerful fell to poverty while the working man became the new lord. Before the plague there was too much labor and too little work. The plague reduced the labor force by about 30%. The rich dudes, much like our $100 million CEOs, who could not screw in a light bulb if their life depended on it, no longer could find slave labor to work their lands. They began selling their properties to buy food and those who actually produced something became the new landowners. In less than two decades the face of the economic world had changed.

We can see ourselves as the rich dudes. We only produce 18% of what we consume. Everything else is dependent on slave labor. This is why Corporate America and the traditional politicians all want amnesty. The Chinese are the poor laborers. A Trade War is the plague. The Chinese will do just fine. They may grow at a slower pace but the people without goods, services and food are the US citizens.

It is shameful for our government to talk about national security when it clearly does not give a rat’s ass about the security of our nation. We are in the weakest position we have ever been. We are simply hoping that somehow things will blow over. That everyone in the world will understand that it is in their best interest to make US corporations richer.

The war we should be fighting is not about capitalism. It is about survival. This is our Alamo. We must defend our nation from the real enemies not those that Corporate America says are our enemies. We must fight against outsourcing of the production of goods and services necessary to our survival. We must fight against open borders and amnesty for those who have broken the law. We must fight Collusion and Corruption between our politicians and Corporate America.

If we think that China, North Korea, and/or Iran are our enemies we must see Corporate America as their facilitators. Let these countries do what they will. We can resolve this problem by eliminating the power of the facilitators. Stop Corporate Lobbying now!

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Politicians Do Not Want to Bailout Financial Institutions?

I heard a comment this morning from one of the political experts, “A bailout of financial America by Congress places on Congress the role of choosing which companies win and which companies lose. The result is that while politicians will make some friends they will also make enemies. Politicians do not want corporate America’s CEOs as enemies.”

On the surface these seems to be a reasonable comment. A moment’s thought should create rage in every US citizen. This statement expresses the general acceptance that politicians are corrupt and that the government will use our tax dollars to make friends or avoid enemies to their personal benefit. I thought I had come to peace with corruption, that I could no be disillusioned and that nothing could make me lose more faith in the US economy. I found that my principles, taught to me in my youth, even after 47 years on this earth are still too lofty. These politicians are not concerned with alienating their constituents. They are worried about powerful enemies.

I grew up in a religious family, where service to others and the common good were important. Public service was a good thing. Sure there are some bad apples but generally Americans are supposed to be charitable, basically honest, and hard working.

How have we fallen so far?

More importantly, how can we expect to have a bright future when corruption is not only rampant, but widely accepted?

We must change. Our children’s America will be very different from the copious wealth that we have enjoyed if we do not make changes. The two party system must go. We must eliminate al incumbent politicians, we must open our intellectual horizons, not our borders, and allow the best and the brightest to truly excel. Perhaps some of them will chose public service. Just think, a President who commands respect when he speaks. You may not like his ideas, you may not agree with his plans but someone who you know is acting with your best interest at heart.

Instead we have an actor whose persona on television is like that. We have the wife of a previous president. We have a financier who openly says that corporations are more important than the well being of WE THE PEOPLE. We have a candidate who thinks that the solution to America’s problems is unlimited slave labor and many others. All are variations of the themes of corruption. We need new blood. We need working men and women to represent us. I believe that the simplest of working Americans will do a better job in politics than our current political elite.

Tags: Government Politics Recession Corporate America Finance Illegal Immigration Economy Reaganomics

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Reaganomics has made America Less Productive

The California Agricultural Industry believes that there will be less illegal immigrants to pick their fruits and vegetables. Strangely enough wages are rising for California farm workers. I could go on for several articles talking about how the California example relates to the rest of America’s workers and how the government has sold out Joe Citizen but there is something even more interesting emerging from the California experiment. The unintended consequences of California’s rising farm wages clearly evidences that Reaganomics has made America less competitive on the world’s stage. All economies following the Cowboy Capitalism model should take note.

As a short premise I was somewhat amazed at how technologically backward the United States was when compared to everyday business in Europe. A simple example is the digital cell phone network just implemented this year in the US. Something Europe did with GSM back in the middle 90s, a good 15 years before the US.

The California farmers are investing millions of dollars in technology to improve food safety and time to market. A $ 1 million investment reduces the number of laborers from 30 to 18 with a payback, even with slave labor wages, of just 3 years. The addiction to low cost labor resulted in loss of productivity. The predictions of 1000 percent cost increases were exaggerated. Simply put, Reaganomics and the open border policy kept the California farmers from implementing modern technology solutions that will result in better quality controls, fresher products and lower costs.

It is obvious that necessity is the mother of invention. Take away the need and there is no reason for companies to innovate. Reaganomics has seriously impeded the United States innovation favoring outdated production methods and processing and costing the US economy in both productivity and social distress. The same concepts are true across all sectors of our economy. We have favored outsourcing for short-term gains instead of investing in the infrastructures necessary for a competitive America. Our roads and bridges are failing. The US has one of the lowest broadband penetration rates of the free world. Our best and brightest, because they are poor, never get the formal training to allow them to express their full potential. Our craftsmen and artisans are making telemarketing calls because they cannot compete with contractors using illegal immigrants.

These are the fruits of Reaganomics. The supporters will scream and shout. There are many these days who vehemently defend the stupidity of Reaganomics and risk coronary failure to express their discontent with the Federal Reserves position to fight inflation. Do not listen to the verbiage. Opinions are like assholes… Take a look at the results. Reaganism and Cowboy Capitalism weaken America’s capacity to compete on global markets. Savage immigration policies like open borders reduce the number of qualified, experienced workers necessary to avoid little things like the Subprime Tsunami.

Tags: Government Politics China Corporate America Finance Illegal Immigration Economy Reaganomics

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