"I'm focusing on Barack Obama..."

"...and the people he is associating with, and I'm very worried." 

Yeah, so "worried" that the stupid smirk never leaves her face.









Nut.    Job. 

She needs to go back to Minnesota and leave the governing to people without mental illness.

I have never before sent money to a candidate for whom I could not vote, until now. Her opponent is Elwyn Tinklenberg and he got my contribution. Bachmann was once comfortably in the lead, now it's a dead heat.

Elizabeth Hasselbeck

I don't usually watch The View, but with a morning off, rainy day and the stock market too depressing to watch...

Two observations:

The comedians: Whoopi Goldberg is smart.. and wise.  Behar is more abrasive, but I like her passion.

The blonde chick: The reason Elisabeth Hassleback is confident enough to give her opinions is that over the years people have listened to her because she is good looking.  If she were ugly, people would have ignored her, she would have maybe read a book or something and perhaps she would be smarter.  Wow, she is really a dumb girl.

Okay, now back to CNBC, or better yet, maybe I'll re-read some of the Meditations of Marcus Aurelius.

Young people go for Johnny Mac ?

Odd.  For 18-24 year-olds now we have 74% intending to vote for John McCain versus 22% for Barack Obama.  Surprise?  The explanation given is a small sample size and inherent error, but that doesn't really explain it.

This race will go down to the last minute and we'll be counting ballots into the night.  As yet, nobody has offered any good reason to vote for McCain, maybe his health care plan which is the better among two terrible plans.

(h/t Eric)

3.72 million !!!

That's the continuous claims for unemployment released this morning.  The new claims for unemployment reached almost 500,000.  

This is evidence that the recession is in full tilt and, of course, the stock market is responding negatively.  

The next big shoe to drop will be downward revisions in earnings as numbers coming out this Christmas season will show that buyers of consumer goods will be down as well.

All the devastation in the employment market is occurring despite the federal government having pumped hundreds of billions of dollars into the economy and provided hundreds more to backstop bad debt.    

This is acting very similarly to the Great Depression is many respects, notably, it is a function of deflation with housing and now commodity prices dropping significantly.  In such times, cash is king, and we are indeed seeing the value of the US dollar climbing relative to foreign currencies, gold and silver.

Another similarity to the Great Depression is the staggering unemployment as evidenced by the headline number of several million of continuous claims on unemployment.

With this number, the handwriting is on the wall: monetary policy is not enough.  We need a fiscal stimulus passed by Congress, and it should be done as a Keynesian infrastructure program to re-build roads and bridges and employ more folks.

Joe the Plumber... one last comment

Someone at work today was talking about Joe the Plumber and mentioned that I have been too hard on him because after all he's just a simple working guy who's been thrust into the spotlight.  First of all, I don't buy it.  He was seeking out Senator Obama to ask him a gotcha question... and it worked.  He got his 15 minutes of fame and has made the rounds on all the morning shows.  

But none of that is the issue.  Joe the Plumber is a publicity seeking idiot, no question... but the world is chock full of morons like him... that's not the story.  The real story is that John McCain miscalculated Joe's story and did not bother to vet him for veracity. He brings this guy into the conversation, mentions him 20-odd times in the debate, and it turns out Joe misrepresented himself, and even worse from a strategic standpoint, Joe's story is actually an endorsement of Obama's tax plan!

John McCain is showing signs that he either does not understand the differences between his tax plan and that of his opponent or he's too uncareful to vet his debate props. Either way, McCain is not fit for the job.  Joe the Plumber may be just a humorous side-show, but I do find it disconcerting that McCain has shown so little discipline in his tactics and strategy, and is so quick to lower the discourse to a cynical appeal to his warped perception of "the working man", as if he would have a clue as to what that is.  Very telling... that's the real story.

The surreal thing is that McCain is still invoking Joe at rallies.  Furthermore, he does not even understand teh Obama tax cuts as evidenced by his characterization of it.  Is McCain stable?

Don't waste my money...

Which presidential candidate would be better for the economy?

The positives about a potential McCain presidency are his desire to "cut spending" and keep taxes low.  Who likes to pay taxes?  Nobody, especially those of us in the higher tax brackets.  McCain says he would like to cut spending on unnecesary social programs and entitlements in order to pay for the tax cuts.  On the surface that sounds great.  The problem I see with this scenario is that the largest single expense in our federal budget is the military and John McCain has never mentioned any intention of decreasing our war financing.  On the contrary, he seems intent on staying in Iraq indefinitely and even has sung songs about bombing Iran.

As a physician I see many young people without health insurance.  By most estimates, up to one-fifth of the population is without insurance at any given time, and that number is sure to rise as the economy falters.  These people still need medical care and we all still pay for it eventually, whether McCain has this as a line item in his budget or not.  Without timely care, the costs are usually higher than they would be normally since delays in seeking care often lead to more expense.

As the baby boomers age, the payouts for Medicare and Social Security will continue to rise, so McCain's dream of decreasing entitlements seems unreasonable, especially with the new Republican-sponsored Medicare Part D drug benefit that is hitting high gear.

On these issues, Obama is not without his faults.  He really has no better plan for insuring the uninsured and he will likely expand welfare type health insurance (SCHIP) for the middle class which will reimburse health care workers 18 cents on the dollar.  One positive is that at least these kids will have insurance and such care is cost-effective in the long run.  Obama does not call for a mandate for citizens who can afford it to purcahse health insurance, and thus the invincible young adult population will continue to forgo such coverage until it's necessary.

Conclusion: McCain is delusional if he thinks that he can wage endless war and reduce taxes and balance the budget all at the same time.  Deficits would increase under such governance and our foreign policy would become increasingly tenuous.  Obama would save a ton just by getting us out of Iraq and keeping us out of other needless wars.  Furthermore, Obama seems to be surrounding himself with an elite economic brain trust which includes Paul Volcker, Robert Rubin, Lawrence Summers, Eric Schmidt, Warren Buffett and his official campaign adviser, the University of Chicago conservative, Austin Goolsbee.   McCain's bench is laughable by comparison, and McCain has admitted that economics is not his strong suit.

Bottom line: Obama 

The Plumber who won't shut up

Joe the Plumber is a fount of wisdom that seems to never run dry.  (BTW, he's fair game for ridicule as loing as he keeps showing up on the morning shows.)

The Rude Pundit is priceless on this topic of Joe "the Plumber" Wurzelbacher bemoaning what he calls "socialism" and then a moment later admitting that his own family was on welfare.  Duh.

Wurzelbacher never even realized the brutal irony and self-contradiction of his answer: "I grew up poor. You know I actually have been on welfare, you know, my parents, you know, a couple different times, and we'd, you know, worked harder and got off of it and then, you know, actually did fairly well."

Read the whole column.

Ed Rollins, the Republican strategist, said it best this weekend.  He said that if Joe the Plumber were smart he would shut up and get a truck with a logo and 1-800-J-O-E-P-L-U-M-B-E-R printed on  the side and start his business.  He'd be busy immediately and be hiring employees and making money doing what he does.  Instead he persists on relishing in evoking his inane opinions and destroying this image of the average working guy.

$154,000!!!

One question:

Was this $154,000 wardrobe and make-up shopping spree done with tax-free donations?*  I really don't know.  My accountant tells me that my work wardrobe (about $600 spent at Macy's and Eddie Bauer last year) is not tax deductible.

Another thing: $5000 was spent at men's and children's stores!!  That's a lot of snow machine suits and maternity dresses.

But it's okay, according to an RNC spokesman, all the clothing will be donated to charity after the campaign.  I suppose street people in Wasilla, Alaska will be wearing $3,000 skirt suits this winter.  Craven.  For this spokesman to even try to excuse this type of spending is cynical and condescending.  Are we all fools? 

I guess I do not live in "real America" and I have no concept how "real Americans" like Governor Palin spend money.  The Republican National Committee can dress up their real-life Barbie doll what ever way they desire; I wonder what the average Republican voter spends on their wardrobe.

Just make sure it's after tax dollars.

UPDATE: 

According to the RNC website: 

Contributions or gifts to the Republican National Committee are not deductible as charitable contributions for federal income tax purposes.

So I have no beef; they can spend their money on whatever they please, it just seems a bit hypocritical to me.

Whether you're bullish or not, try these...

As the market gyrates it may be difficult to keep focus on saving and investing for retirement.  Keep disciplined.

Try the Lazy Portfolios for retirement funds.  Low cost, excellent diversification, outperformance.  My favorite is the Margaritaville selection consisting of three mutual funds with domestic stocks, international stocks and government bonds.

Or the Permanent Portfolio which allocates funds among five asset classes thus giving it very steady performance in good and bad markets.  This replicates the Harvard and Yale endowments.

One recommendation would be to put half allotment into the Margaritaville funds, and the other half in Permanent Fund.  Any additional funds could be dollar-cost averaged into the four separate mutual funds.

McCain (barely) wins the health care debate over Obama

This space has been critical of the policies and campaign of John S. McCain over the past several weeks, except for one.  McCain's health care plan, while not sufficient, is leagues better than the one proposed by Senator Obama.  Economist Greg Mankiw, while not choosing sides necessarily, begins a wonderful discussion here.

Obama is in favor of expanding the employer-based health insurance scheme which has grown up since World War II.  This has not been beneficial to the delivery and payment of medical care in the United States, has led to the skyrocketing costs and has acted as a drag on economic growth.  McCain is on the right track in his attempt to move away from the employer-based model.  My complaint with McCain's proposal is only that it lacks a mandate that all people pay for coverage.  If emergency care is mandatorily provided by health care workers and institutions, then payment for such services should be mandated as well.  Also, McCain is loathe to regulate the insurance industry and health insurance should be be tightly regulated, ie, comprehensive things need to be covered and not left to the whim of the insurer.

Obama, on the other hand, plans to tax employers who do not provide coverage for their employees, and also Obama would not mandate that citizens have coverage.  Furthermore, Obama has been in favor of expanding SCHIP, a form of welfare, to middle class families, which would only exacerbate the issue of increasing costs by having government instead of the consumer pay.  Each of Obama's proposals is completely, 180 degrees, reverse of the trend and incentives that should be put in place if access as well as affordability are to be addressed.

Hillary Clinton actually had the basic tenets of the debate down cold. Priorities should be 1) everyone is covered regardless of pre-exiting illness, 2) everyone pays something, to the best of their economic ability, into the medical system, 3) market forces be added to control costs and 4) employers are not responsible for providing insurance.

My auto and life and even disability insurance are not provided by my employer, so why is my health insurance?  By detaching health insurance from employers, the work force would become empowered with greater mobility which would act to allocate labor and intellectual resources in a more efficient manner.  No more would employees be shackled to a certain job because of health insurance or the presence of a pre-existing illness.  Could you imagine if the occurrence of two speeding tickets precluded someone from taking a job in another town for fear of not getting auto insurance?

Overall, both presidential candidates' health plans are severely and fundamentally lacking, however, McCain is closer to the desired goal of separating one's health insurance from one's employer.

SNL's Sarah Palin Rap

There's a not-so-fine line between self-deprecation and emabarassment. This crosses it:

Please tell me her 15 minutes is almost up, so she and Joe the Plumber can slink back into the 

respective backwaters from which they emerged.

Too late, General Powell (or not... see UPDATE)

On Meet the Press today, Colin Powell graced us with his endorsement of Barack Obama for President of the United States of America.  A daring move, I suppose, for a Republican and career politician.  He will vote for Senator Obama, although he will not actively campaign for him.

Gen Powell praised Obama for the intellectual vigor and curiosity to handle the daunting challenges we face at home and abroad.  Powell took issue with Obama's arbitrary deadline for withdrawal from Iraq, but noted that the current administration is now conducting negotiations to do just that.

On McCain, Powell took issue with his erratic campaign and the prospect of more conservative judges.  Powell did not feel that Bill Ayers' "very casual" relationship with Barack Obama was material to the campaign, and bringing it up "smacks of demagogery."  He said point-blank that Sarah Palin is not ready to be president.

Brokaw noted Barack Obama had had a problem with Powell's support for the war in Iraq in 2002 as well as his speech to the United Nations leading up to the invasion.  Powell defended his stance on the war, but claims that only the conduct of the war was terrible and he had privately voiced his opposition to some of those decisions at the time.  The threat of weapons of mass destruction was a valid rationale for the war and there was nothing that Powell could have done to prevent the war even if he had wanted to do so.

"The United States is still the leader of the world that wants to be free.. and we can come back."  Powell intimated that the current administration for which he had campaigned eight years ago and served as a cabinet member has set us back as a nation.

My take is that many of these observations were readily apparent 3, 6, 12 months ago.  Powell's strength-- and weakness-- has always been his loyalty to the hierarchy and he has exhibited too little personal judgment in his duty, especially as Secretary of State under Bush in 2002.  When he should have stood up for what was right, he did not.  As perhaps the only rational member of an administration that was completely off the rail, he did not sound the alarm for fear of damaging his persona of the loyal soldier.  

Powell has spent his entire life making decisions based on political expediency, which has served him well as he got his card punched through Vietnam and rose through the ranks all the way to Chairman of the Joint Chiefs of Staff and onto a White House cabinet position.  The probelm is that he never gave up his undue respect for the power structure-- a quality that serves well as a soldier, but is devistating as a civilian leader.  One cannot help but think that this loyalty in Powell is the prime reason Cheney had chosen him to be Secretary of State in 2001.

Too late, Gen Powell.  Yes, Obama would make a much better president than John McCain.  Some of us realized that many months ago.  Since so many of your life decisions have been made in order to advance your career, my first thought is that this latest gambit is made to hitch your wagon to the soaring star of Barack Obama, perhaps to secure another cabinet position-- and you would now be endorsing Senator McCain if he were ahead in the polls.  Where were you when the race was still up for grabs?  Where were you when your nation needed leadership on this issue?

UPDATE ( 03:19hrs October 20, 2008)

Co-workers know that I am famous for being grumpy until 10:oo am, and that trait carries over even on a lazy Sunday morning.  After reviewing General Powell's remarks and giving it more thought, I will admit that his endorsement of Senator Obama was heartfelt, thoughtful and well-timed.  In short, It was powerful; it was perfect.  My mind changed perhaps because of  the dismissive calls by Pat Buchanan and George Will that Powell was merely endorsing a fellow black man.  Perhaps it was the follwing video of jeering and angry white people hurling epithets without conscience.  Perhaps it was the image of a mother mourning the loss of her 20 year-old Muslim son who gave his life in the voluntary military service of my country.  We desperately need change in this country and we must demand it by any means possible and accept whoever will join the fray.  

McCain has his very own terrorist connection

G. Gordon Liddy (professional right-wing nutjob, pictured at right) was every bit the terrorist that William Ayers was, only worse.  Liddy served in the Nixon White House, threatened the life of justice department officials and journalists, was warehoused for four years in the federal penitentiary for his crimes, and upon his release and as recently as the 1990's has called for the shooting of government agents.

Liddy has been a fundraiser for McCain's various campaigns and McCain accepts that Liddy is his "old friend", something Obama has never called William Ayers.  The other difference is that Liddy committed his heinous crimes while serving as a Constitutional officer of the United States, his salary paid with your tax money.  Furthermore, Liddy has voiced no valid remorse and, unlike Ayers, has not been rehabilitated and has never contributed to the greater good of society. 

A lot can be said of the nefarious tactics of William Ayers, and certainly nobody commends them, but his overall mission of ending the war in Vietnam was certainly intended to be in the national interest.  Liddy's criminal tactics, on the other hand, were intended to serve not the national interest, but the interests of his demented drug-addled overlord: Dick Nixon.

Congratulations, Mr. McCain, you have your very own terrorist!

US General forced to apologize to Iraqi leader

Wow.  The highly regarded US General in charge of operations in Iraq, Gen Ray Odierno (at right), has been forced to back down on accusations he has made regarding the conduct of the Iraqi parliament.   The US is in the midst of negotiations with Iraq Prime Minister Maliki about the occupation and Odierno accused the Iranian government of bribing Iraqi parliamentarians to vote against the negotiated settlement.

Maybe it's just me, but since when do US military generals apologize to foreign political leaders?  Somehow I cannot imagine Ike or Douglas MacArthur kow-towing to their Japanese or German counterparts during our post-World War II occupation.  Could you see Pershing apologizing to the leader of the Weimar Republic in 1921?

I cannot argue the merits of General Odierno's accusation and, frankly, the truthfulness of his remarks matters little to the situation.  Perhaps he should not have said them, true; but he damn well doesn't have to apologize for making them.  If they are true: if Iran is insinuating itself into the operation of the Iraqi Parliament, then the taxpayers of the United States who are paying for this charade and the citizens of the United States who have mandated this military operation certainly are entitled to know the details of General Odierno's allegations.

Where is John McCain's banner of "Country First" now?

This Iraq business is like nothing I could ever imagine.  In the agreement being negotiated, US soldiers and contractors will be subject to Iraqi law and Iraqi courts if accused of certain heinous crimes.  Iraq, a nation that has no history of any distinguishable form of justice, will now have tha ability to try, convict and imprison our soldiers.  Unbelieveable.

This is not to say that General Odierno may have been out of bounds with his comments about Iran, and this is not to say that US soldiers do not commit crimes from time to time.  Such a negotiated agreement begs the question that if Iraq has such national civic pride that could insulted by such a remark, and if Iraq has such a stable justice system that can determine the guilt or innocence of foreign nationals, then certainly they have the tools to defend their own borders and police their own streets.  How do they benefit from having the Leviathan military of the US in their country if we are such a distraction to their civic structure and their relations with their neighbor?

I am not being facetious or rhetorical.  This type of story emphasizes the fact that the US military has become an impediment to the normal conduct of the Iraqi government, as normal as such a nascent government's conduct can be, and it is indeed time for us to leave.

The US military is not serving the national interests of the US, if they ever were; and now it has become abundantly clear that we are not serving in the best interests of the Iraq nation either.

Time to get out.  Now.

Joe the Plumber falls for the fear-based B.S.

The third debate between Seantors Obama and McCain had one of the strangest interchanges I ahve seen ina political discourse.  Apparently in a last ditch effort to shore up the small business community, John McCain invoked the plight of Joe the Plumber (at right).  Very odd.

It turns out that Joe the Plumber is 1) not a plumber, 2) not planning to buy any business, 3) does not fall into the highest income bracket, and  4) the business that he is not buying does not even net $250,000 income.  Furthermore, Joe is in arears for his own state income tax and may have a problem with his voter registration.  Also, once the economic facts are examined, guys like Joe would benefit under Barack Obama's tax plan versus McCain's.  Where does McCain come up with his strategy?

Joe has intimated that he has voted for McCain in the primary and is leaning toward voting for him again now.  Joe favors our military endeavors that McCain supports and is a strong admirer of the warrior ethos.   Joe holds some trepidation for Obama's tax policy because "some day" he "hopes" to be in the higher tax bracket.  This "hope" is likely present in a lot of McCain voters.

I have some advice for Joe.  Number one, don't worry about maybe some day down the road being among the top 4% earners.  The reality is that this probably won't happen,  but even if you are fortunate enough  to achieve such a goal, then the couple thousand dollars in extra income taxes will not be as significant as you might think, and besides, you can always defer income or invest in your business if needed to avoid the tax hit.  The greater concern should be for the reality of today.  The reality is that you're broke and you are in a vulnerable profession just as we head into a recession, so don't worry about all the potential pitfalls of being a millionaire some day.

Another thing: all this military adventurism that Joe and his candidate favor costs money.  If our small nation, totaling a mere 5% of the world's population, plans to embark on a democratization of the entire planet, then we better also plan on ponying up a large sum to the military-industrial complex.  Guns, tanks and rehab for wounded soldiers does not come cheap.  Joe and his  kids and grandkids will be giving up their Social Security to pay for it all.

I realize Joe is not a sophisticate, and he seems like an honest enough guy, and probably a hard- worker, which makes his political views all the more heartbreaking.  This white male blue-collar demographic seems especially susceptible to all the standard fear-based themes put forth by the current Republican leadership, and this leads to Joe voting against his actual self-interests and, I would argue, against the common interest of the entire nation.

Joe's interests should be for more fiscal restraint, and nothing costs more than military adventures without end.  Caring for all the welfare families and funding all the dreaded earmarks would not cost us as much as one-tenth the expense of the ongoing Iraq war.  Joe probably fears that our national pride would be hurt if we pulled out of Iraq, or maybe that the bogeyman will come get us, but the real concern should be for the runaway military expense while we ignore the social ills here at home.

Joe's interests should be for universal health care, which is one of the most cost-effective uses of resources, especially since he has had a lien against him for unpaid medical expenses (see reference cited above).  Instead, Joe has been suckered into believing that it's okay to go into debt for necessary medical care, or to avoid timely medical care due to a perceived inability to pay.  Such delays are costly to him and our nation.

Joe fears that some day he'll be wealthy and the taxman will come and take it all away.  He voiced concern about the US becoming "socialist instead of a democracy."  I won't go into Joe's confusion about political and economic terms, but only recognize that again Joe expresses fears that have been stoked in nearly every election during my lifetime.  The irony is that we are indeed crashing toward socialism as our private banks are being nationalized by the current administration in order to save our economic system from runaway laissez-faire deregulated capitalism. Does Joe understand this?

The fact that McCain has plummeted in the polls and found it necessary to bring up Joe's plight may be evidence that these cynical time-worn themes are finally coming into public view in the starkest display possible.  We could only hope.  This episode has served to highlight the reality that McCain either does not understand the issues (my guess), or he fully understands the issues but thinks that the electorate is too stupid to see all the ironies.  

The greatest irony is that McCain brought up the example of Joe the Plumber and, once the facts are examined, Joe should actually be the poster boy for the Obama candidacy.

UPDATE (Oct 18, 2008):

It turns out Joe is a bit of a nutjob.  Here's the video.  Natural Law Party?  Okay.  Watch the last minute or so where he goes off on the warrior ethos bullshit.  Somebody please explain how wasting our precious treasue in Iraq is in our national interest...  because it concerns our pride?  Joe doesn't want to pay taxes, but wants to prosecute wars that we taxpayers need to finance.   Please.  McCain jumped the shark by bringing this guy into the debate.

Long term investors: Time to BUY

If you are wondering what to do with your retirement accounts, or perhaps chastising yourself for listening to that yahoo financial adviser who put you into an aggressive small cap growth fund two years ago... fear not.  

Warren Buffett, opining in today's NYT, thinks it's time to get back into the stock market.  I won't bore you with charts, but suffice it to say that hedge funds are blowing up, the economy is recessing, too many houses have been built, federal budget deficits are profligate and there's no end in sight.  

Blood in the streets.  I had a similar sentiment last Wednesday and have begun putting cash back to work that had been sitting idle since last November.  If it's good enough for the Oracle of Omaha, who is 30 years my senior, then it's good enough for me.  

Johnny Maverick?

Just for fun, let's go to the tape (2005):

From ABC today:

Given the global economic crisis, a record 90 percent of registered voters say the country is seriously off on the wrong track, the most since this question first was asked in 1973. At 23 percent, Bush's job approval rating has fallen below Nixon's lowest...Bush's disapproval, meanwhile, is at an all-time record – 73 percent.

Four more years?    Please no

ENOUGH! Governor Palin needs to go

Sarah Palin abuses her power of office... and then has the bile to lie about what the report actually says!!  Unbelievable.  Does she actually think voters are that stupid (don't answer that.)  I can understand taking issue with the findings, but the report actually does say that she abused her power.  (See page 8 of the report):

This is really beyond the pale.  She needs to slink back to her Arctic backwater and face the charges.  Here's Palin's quote:

“I’m thankful that the report has shown that there was no illegal or unethical activity there in my choice to replace our commissioner, a partisan kind of process [note--LIAR] that had been undertaken by some of the legislators who haven’t been real happy with anything that I’ve done along the way as governor, that process is now over, with that finding that I haven’t done anything unlawful in replacing the commissioner.”

"There was no abuse of authority at all in trying to get Officer Wooten fired. "

This was not about a personal indiscretion, this was about her conduct in office.  The legislative body that called for the investigation voted unanimously and they were three-quarters Republican.  The independent investigator was not a partisan (unlike Ken Starr in the Clinton investigation), but rather a well-respected counsel.

Governor Palin is not only an embarassment to Mr. McCain and the Republican party, she is also an embarassment to her family, the state of Alaska and the public school system that could produce such a cretinous intellect.

Keep her out of my government.  If she is elected, I will refuse to pay her salary.

As a further affront, John McCain's campaign manager is floating the same bullshit, see Glenn Greenwald.

These folks truly have no conscience.

(If there are any family and friends out there still planning to vote for McCain/ Palin, I would deeply appreciate letting me know the specific reasons.  I'm not being argumentative, I just really want to hear the reasons so that when I look back four years from now to do the post-mortem on our country, I will have more information.  It seems I can find hardly anybody today who will cop to having voted for Bush in 2004, let alone give me reasons for that vote.)

The son of William F. Buckley has decided—shock!—to vote for a Democrat.

A priceless appraisal of the current election from an effete libertarian and fiscal conservative.  Read it.

On the good McCain:

McCain rose to power on his personality and biography. He was authentic. He spoke truth to power. He told the media they were “jerks” (a sure sign of authenticity, to say nothing of good taste; we are jerks). He was real. He was unconventional. He embraced former anti-war leaders. He brought resolution to the awful missing-POW business. He brought about normalization with Vietnam—his former torturers! Yes, he erred in accepting plane rides and vacations from Charles Keating, but then, having been cleared on technicalities, groveled in apology before the nation. He told me across a lunch table, “The Keating business was much worse than my five and a half years in Hanoi, because I at least walked away from that with my honor.” Your heart went out to the guy. I thought at the time, God, this guy should be president someday.

On the bad McCain:

But that was—sigh—then. John McCain has changed. He said, famously, apropos the Republican debacle post-1994, “We came to Washington to change it, and Washington changed us.” This campaign has changed John McCain. It has made him inauthentic. A once-first class temperament has become irascible and snarly; his positions change, and lack coherence; he makes unrealistic promises, such as balancing the federal budget “by the end of my first term.” Who, really, believes that? Then there was the self-dramatizing and feckless suspension of his campaign over the financial crisis. His ninth-inning attack ads are mean-spirited and pointless. And finally, not to belabor it, there was the Palin nomination. What on earth can he have been thinking?

All this is genuinely saddening, and for the country is perhaps even tragic, for America ought, really, to be governed by men like John McCain—who have spent their entire lives in its service, even willing to give the last full measure of their devotion to it. If he goes out losing ugly, it will be beyond tragic, graffiti on a marble bust.

On Obama:

He has exhibited throughout a “first-class temperament,”pace Oliver Wendell Holmes, Jr.’s famous comment about FDR.

I’ve read Obama’s books, and they are first-rate. He is that rara avis, the politician who writes his own books. Imagine. He is also a lefty. I am not. I am a small-government conservative who clings tenaciously and old-fashionedly to the idea that one ought to have balanced budgets. On abortion, gay marriage, et al, I’m libertarian. I believe with my sage and epigrammatic friend P.J. O’Rourke that a government big enough to give you everything you want is also big enough to take it all away.

But having a first-class temperament and a first-class intellect, President Obama will (I pray, secularly) surely understand that traditional left-politics aren’t going to get us out of this pit we’ve dug for ourselves.

Obama has in him—I think, despite his sometimes airy-fairy “We are the people we have been waiting for” silly rhetoric—the potential to be a good, perhaps even great leader. He is, it seems clear enough, what the historical moment seems to be calling for.

So, I wish him all the best. We are all in this together. Necessity is the mother of bipartisanship. And so, for the first time in my life, I’ll be pulling the Democratic lever in November. As the saying goes, God save the United States of America.

George Soros on Bill Moyers

Watch the video:  (here is my paraphrased transcript, emphasis mine):

The ideological excess of market fundamentalism has created this crisis and now it will be corrected.  Markets can adjust, but they are also prone to be mistaken because there is always a prevailing bias and those moods can be self-reinforcing and leads to bubbles.

The market got too cocky using leverage and the financial system is teetering on the edge of disaster, but it only rarely goes over the edge.  This is the most serious one since the 1930's.

Unfortunately the leaders are reacting and not prempting the problems.  This is because of this ideologic belief in market fundamentalism and that the markets are self-correcting, so the leaders have not been pro-active.

Banks give credit based on the value of the houses, but they fail to understand that the value of the house is contingent on the amount of credit the bank gives.  It's circular, and house prices appreciate and banks give more credit and then house prices increase more, in a virtuous circle. This is exacerbated by leverage.

Ratings agencies gave AAA ratings to mortgage backed securities and the system failed to factor in the risk.  This is a failure of regulation with new financial instruments, not only in the housing market, but also in other markets.  The super-bubble is the 25 years of constantly expanding credit, growing 3X faster than the economy itself.

Sec'y Paulson and the government are coming around and doing what Soros recommended, but unfortunately they are behind the curve.  The actions are coming too late, and he hopes they will catch up as the amounts of capital get bigger and bigger.  Buying toxic paper is a nonstarter.

Hopefully we are not heading toward 1930, but we are definitely heading to an end of an era.  We are now at the height of the financial crisis, and then we will have the fall-out in the real economy.  

If we do the right things, the pain will be less.  So far, we have been doing the wrong things and hopefully we will have a new government in a few months.  Mortgages need to be renegotiated to avoid a correction to price to the downside.  Ten million homes now have negative equity,  and that will be 20 million if no action is taken.

Paulson represents the very kind of financial engineering that got into this mess.  He should go.  

The bailout money should be put into the capital of the bank, so that the capital of the bank can sustain 12X the capital in the bank.  Government needs to play a small role, but it is necessary, as little as possible.

Our ability to govern ouselves does not keep pace with our ability to exercise power to overcome nature.  We could actually destroy our civilization because of our inability to govern ourselves.

There is a common interest... and this belief that everyone pursuing their self-interest will maximize the common interest or take care of the common interest is a false idea.  It is a suitable idea for those who are rich, successful and powerful; it allows them to enjoy the fruits of society without paying taxes.  

For example, we should have a tax on carbon emissions, so instead we will ahve a cap-and-trade and that will have loopholes and will not solve the problem.

We need to deal with the mortgage problem, prevent foreclosures, recapitailze banks... and then we need to work on a better world order to confront world problems-- like global warming-- that will take a lot of capital.  The US consumer was the motor that drove the world economy, and now we need a new motor.  Global warming is a new motor that will need a big investment.

Market fundamentlists are making the same mistake that Karl Marx did.  If these guys had the best interests of the people in mind, they would have succeeded.  The mortgage agent was involved only with his own self-interest, just like the false ideology of Karl Marx.  

I think the only ideology that is not false is the one that I'm proposing; namely, the recognition that all our ideas, all our human constructs have a flaw in it. And perfection is not attainable. And we must engage in critical thinking and correct our mistakes.

As a child, I experienced Fascism, the Nazi occupation and then Communism, two false ideologies. And I learned that both of those ideologies are false.Both are false ideologies.  I was shocked that even in a democracy people can be mis-lead like they have been mis-lead these past few years.

Volcker: "The last god of central banking"

(Paraphrased transcript, highlights mine):

We have the tools in place, now we just leadership to fix the problems.

The problem has been handled piecemeal up to now, bailing out individual firms like Bear Stearns, AIG, etc, now it has to be co-ordinated better.

Europe has learned that they have a problem too, but they have to work together to protect the major international banks.  

Monetary policy is not the heart of the problem, but it is important that the central banks co-ordinate their approach.

The approach has been mainly a reaction up to this point, and the criticisms will be the lack of credibility up until now.  We can do better than that.  

We've got to deal with the financial problem, but also the threat to the real economy such as employment.  We should not fear that this will another Great Depression.

In February 2005, Volcker said that a crisis will come more likely than a whimper, but the financial situation is poor.

Implementing the bailout program is a difficult technical problem.  We also have to deal with home mortgages with people who got in over their heads and needs to be dealt with on an individual basis.  Perhaps judges could be used as arbitrators and mediators of these cases.

Reconstruction Finance Corp from 1932, as proposed by Warren Buffett, is the same thing Volcker is saying.  Jesse Jones was the trustee who administered the RFC, and the same thing today would add capital and liquidity.

Where is the liquidity in banks going?  It's sitting idle in short term securities and gold die to a lack of trust in fellow banks.  The government must step in to ensure trust, which is unfortunate.

The five great investment banks are gone.  The marketplace is changing itself.  Large banks add stability, but we need more players to diversify the competition.  Hedge funds will need to be regulated, especially on leverage and short-selling.  Regulation of large commercial banks will be increased, and the conflicts of interests need to be addressed.  Glass-Steagal repeal was inevitible, but adaptation to this change was too slow in reference to the the fast paced change in technology.

Nobody listens when things are going well.  But it was unsustainable.  China and Japan will continue to lend us money because they have a lack of alternatives.  The US is still the greatest strongest most vital economy.

These crises do not "just work themselves out."  The Mexican Crises in the 1980's and 1990's were resolved only with intervention.  A lot of money was made available and they went through a recession, but the recovery was fairly quick.

We need the specific tools and leadership as I said before, but the basic economy is strong and we are still the leaders in high tech and we still do well in manufacturing.  We need less financial engineers and more mechanical engineers and electrical engineers.

The outcome of this will be that we will be left with a stronger financial system.  We will restore our savings and reduce our consumption and reduce our dependence on foreign capital-- and these are good things.  This kind of agony focuses you on what we need to do.

This crisis will force the political will to enforce reduced consumption through taxes, etc, because now we know it's necessary.  That's leadership.  FDR's fireside chat after he was inaugurated explained the crisis.  People had confidence that FDR had fixed things and bank runs and failures did not happen because they had confidence that the probem was fixed even though nothing was substantively different.  Leadership.

We want to avoid the effects on the real economy that would weaken us over time as had happened in the 1930's. 

Jimmy Rogers' comments

(paraphrased from CNBC Europe Television):

"The stabilization techniques are absurd.  Of course there is no confidence.  The people in charge have been wrong, so why would we listen to them now?

My holdings now are Cash, Japanese Yen , Swiss Franc.  I covered some shorts today.  Equities won't come out on top.  Buy commodities because they will come out unimpaired.. and Yen and Franc.

It's outrageous that anybody needs to bail out the incompetents on Wall Street, the guys driving Maseratis.  The way to solve this is to let people go bankrupt.  The unsound people should go out of business.

We're going to have to take some pain.  Be realistic.  Nobody has confidence in our leadership, the same guys who missed all the signs.

The G7 needs to let us who are sound alone and the system will be rebuilt.  If they act too much, they will unleash an inflationary holocaust on the world.

Why should China, Singapore and Japan jump into the breach to risk their reserves to save those countries who took too much risk with too much leverage.  They have reserves and they should save themselves.

US fed policies and fiscal policies... they will ease and they will devalue their own currency and while it looks deflationary now, it will be inflationary eventually.

Everything is being liquidated now in the US and the way to profit is to own the things that have not been impaired... commodities."