Friday, February 27, 2009

Obama's War.

This week President Obama ended his rope-a-dope of the Center-Right and launched an attack against American capitalism. He is: (i) repealing the Bush tax cuts and raising the highest Federal tax rate to 40%, (ii) increasing taxes on the energy industry, (iii) limiting tax relief from mortgage interest, (iv) reinstating the Death Tax, (v) raising capital gains taxes, (vi) raising taxes on successful small businesses*, (vii) increasing federal intervention in the health care industry, (viii) instituting a carbon cap and trade program on American industries, and (viii) dismantling private enterprise student loans. He capped off the week with the destruction of private capital investments in banks.

Wall Street, the source of investment capital needed for recovery, aborted productive uses of finance in favor of "Obama-proof" portfolios: more treasuries, gold, cash, and international stocks poised to benefit from an unfettered Chinese recovery and protected from Obama wealth-redistribution.

The Administration and Congers are fanatically devoted to the notion that The Government will grow us out of this mess, as if they have discovered a perpetual-motion machine.

*Example of such a small business: owner of three convienience stores. A good store will, after expenses, net the owner about $100K per year in profits. Such a store also pays two additional employees $85K in wages and benefits.

Elie Weisel has been wiped out by Bernard Madoff.

Wednesday, February 25, 2009

What is the Truth About the Banks?

The fear on bank nationalization is rampant, and threatens to become a self-fueling conflagration. Yet two interesting articles caught our eye that questions whether such a step is necessary at all. First, the staff at Miyanville note that banks are more than capable of writing down - over time- their current large losses against future revenues.Second, the IBD editorial board reminds us that 90% of all banks are sound, and that lending rates are not catastrophic.
Obama Revealed.

President Obama spoke to the Congers last night, and made it very clear that the spending has only just begun. In this first year of his tenure he intends to tackle (universal) health care, expanded federal support for education, and a plunge into "green" energy production. This last objective is of particular concern: the WSJ noted this morning that White House green gurus indicate that the Administration will regulate CO2 as an atmospheric pollutant under the Clean Air Act . In which we reply, in the words of Cromwell: "I beseech you in the bowels of Christ think it possible you may be mistaken". As we have learned with the declarations of vague schemes by the Treasury for the next stanza of financial reconstruction, now is not the time to further paralyze private capital investments in our economy because of fear of brave new regulations. And the President's call to action on energy conspicuously dodged a mention of nuclear power. If we are going to supplant coal-fired electricity generation, we need to find sources that can efficiently produce several hundred thousand megawatts of energy. A wind plan as ambitious as that envisioned by Boone Pickens would produce 200,000 MW. While that's a very respectable number, it's less than a quarter of our current electricity demand. Our fear is that the White House greenies will prevail in ideological purity and America's aversion to nuclear power will continue.

Tuesday, February 24, 2009

Town Hall Meeting with Congerscritter Schauer.

Last Friday we attended a town hall meeting, in our fair burg, with freshman congerscritter Mark Schauer (D). There were around two dozen constituents in attendance. There was a palpable tension in the coffee shop; many families in our town have their financial fortunes tied to the Big Three. In the past week the mammoth "Stimulus" Bill had been whisked through both houses of Congress and signed by the President. The pre-meeting conversations around the tables expressed frustration of citizens unable to slow or alter the course of the massive spending juggernaut. It was a clear sentiment eager to be expressed to the new representative, and hoped he would listen.

Mr. Schauer's priority, however, was not to listen, but to talk. And talk, and talk, and talk. After nearly forty-five minutes of a nearly uninterrupted monologue, some of the attendees began to shoehorn comments into what seemed to be a soliloquy.After a long lecture into the minutiae of a proposed high-speed rail in Michigan, time had run out, and many left extremely frustrated, including this correspondent.

We hope that Mr. Schauer's deafness toward the people he represents will pass with time and experience.

Monday, February 23, 2009

Why Bipartisanship?

On CNBC this morning, Senate Majority Leader Harry Reid revealed the real reason for the of GOP votes for the "Stimulus" bill: Republicans have "bet on failure". Please, Mr. Reid, don't insult our intelligence. This is not a matter of whether your opponents want the country to live or die, it's about what is the best course of action to save the greatest economic system in the history of the world.

Chris Matthews continued the (MS)NBC attacks against Rick Santelli, calling his attitude that of "Ebenezer Scrooge". Be careful, Comrade Santelli, your attitude has been noticed. You don't wan't to be called a counterrevolutionary; they shoot counterrevolutionaries.