Monday, October 27, 2008

What's the next phase? Reinstate the Draft?

I'll save the preface for the novel. Since this is blogworld, I'll just give you the trailer.

I believe what Biden was referring to in his statement that the world will "test" Obama and it may not be immediately evident that his response is right, means they're planning on reinstating the draft. They have the solution. Now they just need a crisis. If I had to take a guess, I'd say center stage will be Indonesia (again, I'll save the why for the novel).

Why the draft? We've got to instill in the young'uns a sense of duty to country, a cause bigger than themselves, discipline, respect for authority, etc. You can't run an efficient collectivist state with everyone running around looking out for themselves all willy-nilly. But what about those who are opposed to violence and the military? No worries. They can sign up for mandatory community service. They'll still get uniforms and serve society as directed by their superiors.

It will be sold as an essential for national security as well as a jobs program to "get the economy back on track". Education credits will be part of the package as well as helping to re-establishing traditional values in the young people.

Think I'm nuts? Maybe, but just for yuks, bookmark this and check back around June of 2009.

Tuesday, October 14, 2008

RIP Capitalist America

I don't think I'm being melodramatic when I say we're witnessing the end of the United States of America as a capitalist country. The recent action of our government, lauded by both major parties, reveals a total lack of faith in the free market. They all say they hate to do it, as they drive the knife in deeper.

Instead of investigating and prosecuting the culprits in the sub-prime loan debacle, taxpayer money was used to bail them out. The government took control of the two largest mortgage companies in the country, the company that insured them and is now taking ownership in the banks. They already control your utilities, your access to information, in some places, even your trash disposal. No worries, you can still go to Walmart and buy something nice with the allowance you'll be left after taxes. Barak Obama is 14 points ahead in the polls with just 3 weeks to go and has made no secret of his plan for wealth redistribution. A liberal controlled House and Senate are chomping at the bit to help him implement it. Not that John McCain is any kind of champion of free enterprise. At best he may have slowed the train down a bit.

Next the government will take control of health care. Why? Because the American people are screaming for it. Once your neighbor's premiums and benefits are directly tied to your personal behavior (through nationalized health care) there is no limit to the regulation and restriction that can be justified in the name of the greater good.

Politicians have been dividing us into groups and buying our votes with more and more promises of free stuff. We've been lapping it up like faithful mutts. Now we will get our just deserts: A new world order. A system in which failure is not allowed is a system in which excellence is not possible, and for the foreseeable future, that is the new American way.

Tuesday, October 7, 2008

Second Presidential Debate - Who Won Debate '08 Belmont?

Belmont University's Debate on October 7th, 2008, held in Nashville, TN had a clear winner.

John McCain won this won handily in two catagories. On style points, he had Obama on his heels the whole time. McCain's answers were clear, concise and included plenty of jabs at Obama. Barak seemed like a politician trying to kill 90 minutes.

But McCain also won in another catagory: Most outlandish new economic proposal. He suggested that he will direct the treaury to buy up "bad mortgages" and renegotiate them with the home owner, or more accurately, the current resident. Merry Christmas!

This may well get him some votes. But lets look at the Freakonomics at play here. It would actually benefit you, if you believe that McCain will be elected to not only get behind on your mortgage and make as little money as you can get by on, but it would also behoove you to do whatever you can to diminish the perceived value of your property. After all the governments going to forgive your current mortgage in favor of one at the current appraised value. You want that appraisal to come in as low as possible. For Pete's sake don't fix anything! In fact, you might want to throw a baseball or two through your own windows, stop mowing the lawn, park a car on blocks in your driveway, or better yet front lawn, create a few paint chipped areas, whatever you can do to make your home less appealing.

Obama's policies of tax increase on higher incomes, mandated insurance programs and a wide assortment of spending initiatives will strangle an already struggling business community. McCain's Christmas in November to home buyers will decimate an already decimated real estate market. Choose your poison.

Monday, October 6, 2008

The health care solution. Are you pondering what I'm pondering?


Ladies and gentleman, I've asked you here today because opportunity is knocking once again. The public is clamoring for affordable health care and the politicians are pining to give to them. Everyone is looking for a system that will enable each participant to contribute $5 and draw out $500 and by golly we're going to give it to them.

First, we'll get legislation passed that requires everyone to purchase health insurance. We don't want to have the government provide the insurance directly. That would look too much like socialism. We've got to dress this thing up so it looks like a free market. We'll have private insurers sell the policies. They'll have to cover everyone, regardless of income or pre-existing condition. The government will provide subsidies to those who can't afford it. In order to reduce the risk to insurance companies we'll set up a Government Supported Private Entity, a Health Care Insurance Funding Authority. We'll give it a catchy name like Hannah Fay.

Hannah will buy up policies from the insurers. The insurers will simply sell policies and administer claims, which will paid by Hannah, through them, to the providers. Hannah will bundle the policies together and sell bonds backed by the premiums to raise operating capital to pay claims and subsidize more low income policies. We'll sell the bonds to a new kind of financial institution, which we will help create: Health Care Investment Banks. These HCIB's will bundle the bonds and sell shares in them. We'll call those Health Care Backed Securities or HCBS's. These HCBS's will be sold to other financial institutions, pension funds, sovereign wealth funds and the like. The risk will be spread so thin, it'll hardly be noticible.

Our roles? Advisors, consultants, investors. Keep away from the cameras. Stay out of the news. I know what you're thinking. This can't possibly work. Well, that depends on your definition of work. There will be Congressional oversight, but don't worry about that. Politicians are elected on emotion. Most of them wouldn't know a proper balance sheet from the supply side of a mule. Just make sure they get their due in contributions. As for the Wall Street boys, the important ones know the game. They'll get out in plenty of time. Their replacements will be lulled in by huge salaries and bonuses. It's kind of like executive hot potato. It'll be many years before anyone figures out the HCBS's aren't worth the paper their printed on and the health care system doesn't actually have any money. I'll have you out well before then.

Alright, we've got work to do. Set up meetings with your respective politicians, activists and friendly media and let's start leaking this idea out there. Remember, don't attach your name to anything. Present it as something you heard from someone else that you think could be worth looking into. Let the camera junkies do the rest. This meeting never took place. Good luck everyone. This could be the greatest thing since Cap and Trade!

Sunday, October 5, 2008

What's Russia Up To?

Was Georgia just a test? The behavior of Russia in the aftermath of its invasion of that country is anything but conciliatory. Now Russian state television is airing a documentary promoting the idea that the U.S. government was behind 9/11. Why would they go the extra mile to stir up anti-American sentiment among their own and around the globe?

If Georgia was a test, the Russians have to be very encouraged at the results. The west made a lot of noise, but in the end, did nothing. The world is facing an economic slow down. US forces are spread thin, Russia has made a bundle on soaring oil, but prices are dropping and the whole world is looking for alternatives. If they were dumb enough to make some sort of outlandish land grab, now would be the time. I'm confident they're dumb enough.

I'm not well versed enough in the current geopolitical situation in their neighborhood to have any idea what they have their eyes on, but my "spider sense" is tingling. Maybe they'll just go after the rest of Georgia. Maybe something bigger. Ukraine? Poland? Alaska? I just hope our spooks are working over-time on this.

Wednesday, October 1, 2008

Bi-Partisan Robbery

A parade of senators, Republican and Democrat are congratulating themselves and each other tonight for passing the $700 billion giveaway to "save the economy". They did throw the common folk a bone in the form of some tax relief. I guess that makes it all okay.

You may be unfamiliar with the meaning of some of the terms and phrases being tossed around in reference to this crisis. Let me clarify some.

"Sub-prime mortgage" - Loans made to people for more than they could possibly pay back, secured by assets that are now worth much less than the loan.

"Mortgage Backed Securities" (MBS) - Essentially, shares of the above mortgages, sold to banks and investment institutions in large bundles.

"The credit markets are clogged" - The banks have no cash. They spent it on these MBS's which had been carried on the balance sheet as "cash equivalents". The problem is, nobody wants to buy them so they aren't really cash equivalents.

"We must free up the credit markets" - We're going to buy these shares of subprime mortgages at a price pulled out of thin air by Henry Paulson.

"We will sell these MBS's back to the open market to redeem the taxpayers' investment" - We're going to sit on these things until the heat is off.

"Doing nothing is not an option" - Doing nothing would cause the markets to take their natural course, exposing the whole convoluted scheme that caused this mess. Politicians would be voted out. Lawsuits would be filed. Voters would be very angry if the truth were to come to light. Best to let it fester for as long as possible.

Yes, Republicans and Democrats have come together in an unprecedented manner to cover their collective behinds. Some voted against the bill, but only after its passage was assured. No member of either party made a serious effort to put a stop to this. I for one will no longer vote for the most competent stooge or the lesser of two evils.

Let me make this absolutely clear for those of you who haven't yet caught on. Your money will be given to banks, so that they can loan it back to you. You will pay your money back to the bank with interest. After the shareholders, employees and execs get their cut, some of the remaining net will be paid back, not to you, but to the government who brokered the transaction. They are, at this moment, on national television praising themselves in the highest terms for pulling this thing off (assuming it passes the House) because they are now 100% convinced that we are indeed, just as stupid as they've always hoped.