Obama Seeks To Benefit From The Combustion!

What do Rosa Parks and Obama have in common? Nada, save for the color of their skin. Ms. Parks was courageous, courteous and refused to go to the back of the bus and thus began the end of an evil - segregation. In time her lone act united our nation.

Whereas, Obama is arrogant, motivated by self and believes he can lead from the back of a bus and his effort at class warfare is dividing our nation.
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Several memos ago I mentioned that I would expand on my thoughts about where Corporate America began to sink when I had the time.

Corporations reflect both the financial as well as the social environment.

Historically, corporations felt some moral obligation to their employees and vice versa. Then along came replacement of the 'prudent man rule' and codification of corporate pension responsibility so corporations got out of the benefit business to the extent they could. They brought in consultants, quit offering retirement benefits as in the past and began to offer employees various investment options - thus the employer-employee disconnect began.

Unions power grew and they began to press for increased wages and benefits that, in many cases, were overdue but eventually grew beyond affordable.

The consequence of all this was an adversarial relationship, which was always present, began to grow between the employer and employee. Any sense of loyalty between these competing entities began to be trashed.

While this was happening, boards of directors abdicated their own responsibility for determining executive salaries and allowed consultants to enter the picture. In order to earn their own fees consultants became creative and designed compensation packages that were outrageous in far too many cases. Self-serving boards, lamentably, went along. Even board compensation has reached unjustified levels with many board members now making over $250,000 to $1,000,000/year.

Finally, corporations came under the influence of Wall Street's intense examination of and focus on quarterly earnings. Corporate managers began to manipulate earnings to match and/or exceed, by a few cents, Wall Street Analyst's estimates. Thus short term stock performance was birthed and corporate managers began to take their eye off the long term ball. In order to maintain earnings growth many corporations began leveraging balance sheets, buying back their stock and making acquisitions for financial reasons. As benefits became onerous corporations eventually replaced permanent workers with contract employees and paid overtime rather than increase hiring.

Consultants eventually divided executive compensation between cash and stock performance payments and this had a lot to do with the decline in corporate morality in my opinion. Stock prices became the driving force rather than sound business practices.

The disparity between corporate managers and the employee compensation widened beyond all reason and consequently the accusation of corporate greed became a viable argument.

The final consultant coup de grace were compensation packages incorporating, what came to be known as, golden parachutes. This disconnect from any ethical sense of balance allowed executives to be paid fortunes even in the face of terrible performance. This egregious circumstance simply gave more ammunition to those who claim Wall Street was infected by greed.

As America's economic plight worsened, those impacted sought to lay blame on Wall Street and 'private plane owners.'

I am in no way excusing unethical Wall Street conduct and misguided corporate behaviour but, in far too many instances, government regulations, legislation, and outrageous tax laws drove corporations to seek loopholes and ways to avoid, and, in far too many instances, evade these onerous laws etc.

To defend against these events corporations got into the lobbying business with both feet and thus corruption of the political process was further exacerbated. The average citizen cannot buy or avail themselves of such access. Lacking advocacy comparable to that of corporate/business America understandably adds to public grievance.

Then along comes a president who seeks to benefit politically by pitting group against group (class warfare) and the vacuum created becomes filled by a variety of aggrieved types and thus we have the circus that is going on today in Wall Street and beyond.

Finally, add to the above porridge an irresponsible press and a vast part of the public which is totally ignorant and you have a combustible mixture. It is easy for politicians like Dodd, Frank and Schumer to duck responsibility for badgering bank lending during a low interest period.They have the unbridled power to haul people before their various committees,ask pointed questions that favor their own agenda and escape their share of the blame while an irresponsible press adds more heat than light. Ron Paul has written an article I am posting that I believe is closer to the truth of why the financial disaster occurred as it did.

In short, this is how The German Brown Shirt movement was born in Germany. The German economy was in shambles and Hitler was able to manipulate grievances and despair and the attacks spread to public institutions then to a prosperous segment of society and eventually more and more voices in opposition were stilled. The rest is history.

What Obama is about is dangerous and analogous and this, among other reasons, is why he needs to be thrown out on his radical ear. (See 1 and 1a below.)

Meanwhile The Misery Index suggests we are not a happy nation. (See 1b below.)
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Dick
------------------------------------------------------------------------------------------------------------------ 1)Blame the Fed for the Financial Crisis
The Fed fails to grasp that an interest rate is a price, the price of time. Attempting to manipulate that price is as destructive as any other government price control.
By RON PAUL

To know what is wrong with the Federal Reserve, one must first understand the nature of money. Money is like any other good in our economy that emerges from the market to satisfy the needs and wants of consumers. Its particular usefulness is that it helps facilitate indirect exchange, making it easier for us to buy and sell goods because there is a common way of measuring their value. Money is not a government phenomenon, and it need not and should not be managed by government. When central banks like the Fed manage money they are engaging in price fixing, which leads not to prosperity but to disaster.

The Federal Reserve has caused every single boom and bust that has occurred in this country since the bank's creation in 1913. It pumps new money into the financial system to lower interest rates and spur the economy. Adding new money increases the supply of money, making the price of money over time—the interest rate—lower than the market would make it. These lower interest rates affect the allocation of resources, causing capital to be malinvested throughout the economy. So certain projects and ventures that appear profitable when funded at artificially low interest rates are not in fact the best use of those resources.

Eventually, the economic boom created by the Fed's actions is found to be unsustainable, and the bust ensues as this malinvested capital manifests itself in a surplus of capital goods, inventory overhangs, etc. Until these misdirected resources are put to a more productive use—the uses the free market actually desires—the economy stagnates.

The great contribution of the Austrian school of economics to economic theory was in its description of this business cycle: the process of booms and busts, and their origins in monetary intervention by the government in cooperation with the banking system. Yet policy makers at the Federal Reserve still fail to understand the causes of our most recent financial crisis. So they find themselves unable to come up with an adequate solution.

In many respects the governors of the Federal Reserve System and the members of the Federal Open Market Committee are like all other high-ranking powerful officials. Because they make decisions that profoundly affect the workings of the economy and because they have hundreds of bright economists working for them doing research and collecting data, they buy into the pretense of knowledge—the illusion that because they have all these resources at their fingertips they therefore have the ability to guide the economy as they see fit.

Nothing could be further from the truth. No attitude could be more destructive. What the Austrian economists Ludwig von Mises and Friedrich von Hayek victoriously asserted in the socialist calculation debate of the 1920s and 1930s—the notion that the marketplace, where people freely decide what they need and want to pay for, is the only effective way to allocate resources—may be obvious to many ordinary Americans. But it has not influenced government leaders today, who do not seem to see the importance of prices to the functioning of a market economy.

The manner of thinking of the Federal Reserve now is no different than that of the former Soviet Union, which employed hundreds of thousands of people to perform research and provide calculations in an attempt to mimic the price system of the West's (relatively) free markets. Despite the obvious lesson to be drawn from the Soviet collapse, the U.S. still has not fully absorbed it.


The Fed fails to grasp that an interest rate is a price—the price of time—and that attempting to manipulate that price is as destructive as any other government price control. It fails to see that the price of housing was artificially inflated through the Fed's monetary pumping during the early 2000s, and that the only way to restore soundness to the housing sector is to allow prices to return to sustainable market levels. Instead, the Fed's actions have had one aim—to keep prices elevated at bubble levels—thus ensuring that bad debt remains on the books and failing firms remain in business, albatrosses around the market's neck.

The Fed's quantitative easing programs increased the national debt by trillions of dollars. The debt is now so large that if the central bank begins to move away from its zero interest-rate policy, the rise in interest rates will result in the U.S. government having to pay hundreds of billions of dollars in additional interest on the national debt each year. Thus there is significant political pressure being placed on the Fed to keep interest rates low. The Fed has painted itself so far into a corner now that even if it wanted to raise interest rates, as a practical matter it might not be able to do so. But it will do something, we know, because the pressure to "just do something" often outweighs all other considerations.

What exactly the Fed will do is anyone's guess, and it is no surprise that markets continue to founder as anticipation mounts. If the Fed would stop intervening and distorting the market, and would allow the functioning of a truly free market that deals with profit and loss, our economy could recover. The continued existence of an organization that can create trillions of dollars out of thin air to purchase financial assets and prop up a fundamentally insolvent banking system is a black mark on an economy that professes to be free.

Mr. Paul, a congressman from Texas, is seeking the Republican presidential nomination.


1a)The 99-Percent Solution
By Roger Kimball

I’ve always had a soft spot for Karl Marx’s famous mot about Hegel’s observation that history repeats itself. “He forgot to add,” said the Caliph of Communism, “the first time as tragedy, the second time as farce.” What happens, then, the third time around? The 1960s certainly had their tragic elements, and the passage of time, I suspect, mutes the bitterness of the many blighted lives and botched futures which that farcical repetition of earlier revolutionary idealism involved. Now, from our perch 40 years on, it all seems faintly ridiculous: the incense and love beads; the imbecilic pseudo-radicalism; the bad taste in haberdashery, heroes, and haircuts; the mindless mantras of indemnified insurrectionists whose “idealism” was little more than an alibi for unfettered selfishness and insatiable hedonism. “We’re permanent adolescents,” boasted Jerry Rubin, a high priest of the movement. What sort of society produces “permanent adolescents” in any number? Only a very rich and a very indulgent one.

Back in the day, folks like Jerry Rubin at least had (briefly) the attraction of novelty. What about his heirs, the motley assemblage staffing the entertainment known as “Occupy Wall Street”? Isn’t it, as the philosopher Yogi Berra observed in another context, déjà vu all over again? First tragedy. Then farce. Now, incoherent childishness and pathetic exhibitionism.

The media, natch, has gobbled it up: “Extra! Extra! Read all about it: Anarchists Occupy Wall Street! People with funny hair, unpleasant tattoos, and bad spelling demand revolution!” In one sense, the sideshow that is Occupy Wall Street has been a gift to copy-hungry publications. It’s always fun to quote the permanent adolescents. As Art Linkletter knew, they say the darndest things. You might be worried about paying the mortgage and junior’s tuition; they get to denounce “corporations,” embrace the “environment,” and declare that “Christopher Columbus was the first Zionist.” Who knew? “This is what democracy looks like,” read the banners. Actually, as Anne Applebaum wrote in a column for Slate, it is not what democracy looks like. It’s what free speech looks like in one of its more histrionic varieties. “Democracy,” Applebaum notes, “looks a lot more boring. Democracy requires institutions, elections, political parties, rules, laws, a judiciary, and many unglamorous time-consuming activities,” none of which is as enjoyable as shouting slogans and mugging for the camera.

There are two main streams of reporting on the downtown cabaret. One stresses the element of sociological reportage. A splendid example of the genre is Matt Labash’s amusing cover story for the Oct. 17 Weekly Standard, “Eyewitness to History!,” in which Mr. Labash spends some quality time with masked anarchists; young, pink-sweatered, beskirted Amy, who advocates the “very abolition of gender”; and Sid the Nazi, who advocates, um, well, I’m not too clear about that. “Satisfy our demands,” quoth Jerry Rubin back when the world was young, “and we’ve got twelve more. The more demands you satisfy, the more we got.” It was the process, not the product, he was after. It’s the same down in Zuccotti Park. “What exactly the OWS movement wants has been the source of great puzzlement,” Mr. Labash reports:

With all their talk of being nonhierarchical and having no official spokespeople, it’s difficult to get straight answers. Aside from the disparate responses I get from nearly every single person I ask (they want a millionaire’s tax, an end to capital punishment, modernized infrastructure, and so on), a single placard I see at the activists’ encampment perfectly illustrates the grab-bagginess of it all: “Close the Corporate Tax Loopholes, Tax Religious Groups, End the Wars, Legalize Weed, and Bring Back Arrested Development.”

Good news for that crowd! Arrested development is alive! Well, maybe not the TV show, but the thing itself is positively thriving—witness the exotic fauna interviewed by Matt Labash.

If sociological reportage describes one main stream of commentary about Occupy Wall Street, yearning nostalgia describes the other. It turns out that 1960s radicals never die, they just turn rancid and say ridiculous things. They may long ago have lost track of their love beads and peace pins, but somewhere deep down there lives an unextirpatable feeling of solidarity with the Age of Aquarius. The New York Times has been one reliable source of the phenomenon. The columnist Nicholas Kristof, for example, took one look at the spoiled children and social misfits cluttering up Zuccotti Park and declared that it was “reminiscent of Cairo’s Tahrir Square.” Here’s a question: How many things had to go wrong in Mr. Kristof’s brain for him to make that comparison with a straight face? “Reminiscent of” implies “analogous to.” In what sense is an aggregation of permanent adolescents in a park in downtown Manhattan analogous to the regime-changing tumult that exploded in Egypt last winter? In no sense. Mr. Kristof’s heady tweet was nonsense.

A more florid example of that yearning nostalgia is on view in “In Protest, the Power of Place,” Michael Kimmelman’s column for the Oct. 16 Sunday Review section of the Times. Mr. Kimmelman, the former chief art critic for the Times (we see from his byline that he is now architecture critic for the paper), is the fellow who once described Matthew Barney, the art world’s largest consumer of Vaseline, as the “greatest American artist of his generation.” His comments on Occupy Wall Street are even more embarrassing. Like Nicholas Kristof, he looks at the silliness in Zuccotti Park and sees Tahrir Square. “We tend to underestimate the political power of physical places,” Mr. Kimmelman writes. “Then Tahrir Square comes along. Now it’s Zuccotti Park.” But wait, he’s just getting started.

Kent State, Tiananmen Square, the Berlin Wall: we clearly use locales, edifices, architecture to house our memories and political energy. Politics troubles our consciences. But places haunt our imaginations.

So we check in on Facebook and Twitter, but make pilgrimages to Antietam, Auschwitz and to the Acropolis, to gaze at rubble from the days of Pericles and Aristotle.

I thought of Aristotle . . .

No, I am not making that up. Zuccotti Park and Antietam. Zuccotti Park and Ausch-
witz. Zuccotti Park and Aristotle, for heaven’s sake. What is he talking about? “Zuccotti Park,” writes Mr. K., “has in fact become a miniature polis, a little city in the making.” In fact, though, it hasn’t. It’s a city park currently overrun by mostly young, mostly unemployed layabouts and various opportunistic parasites. Michael Kimmelman, like Nicholas Kristof, has a bad case of 1960s envy. He is hoping against hope that the pathetic spectacle in downtown Manhattan will miraculously turn out to be something more than a nationally televised "Romper Room" for those permanent adolescents Jerry Rubin boasted of. He ends his sad little manifesto with the declaration that the “protestors” (but what, pray tell, are they protesting?) are “building an architecture of consciousness.” What do you suppose that means? Maybe Mr. Kimmelman’s contract as architecture critic requires him to include the word “architecture” at least once in every column. But we should have thought that his license as a journalist required at a bare minimum that his sentences be intelligible. Perhaps senior critics get to dispense with that qualification.


The one real curiosity about the Occupy Wall Street phenomenon is the breadth of its sponsorship. The labor unions have given it the nod. “Union leaders,” a piece in The Hill reported, “say they feel vindicated by the Occupy Wall Street protests and are doing all they can to keep the movement going.” Federal Reserve Chairman Ben Bernancke also inclined the coconut: “I can’t blame them,” he told the Joint Economic Committee. Various local politicians, Michael Bloomberg (the nanny in charge of New York) has complained, have put pressure on the owners of Zuccotti Park not to intimidate or evict the squatters cluttering up the park. And America’s politician in chief, President Obama, has smiled on the temporary denizens of the park, appropriating their slogan “99 percent.”

“Ninety-nine percent of what?” you ask. Good question! The idea, which the president obviously likes, is that the anarchists, Sid the Nazi, and all the other placard-waving folks down in Zuccotti Park represent 99 percent of the population while “Wall Street,” the “corporations” -- a.k.a. “Jewish financiers” (talk about déjà vu all over again, Adolf!) -- represent the rapacious 1 percent that controls the economy, the military industrial complex, the Amazonian rain forest, Bambi’s birth place, and God knows what else. What do you think of those percentages? While you’re thinking, here are a few more. The top 1 percent of tax filers pay nearly 40 percent of the income tax receipts. The top 5 percent, about 60 percent. Meanwhile, something north of 45 percent pay no income tax at all. That’s point one.

Point two involves that old story about the perils of riding the tiger. Unlike Messrs. Kimmelman, et al., we do not regard the menagerie squatting at Zuccotti Park as a serious revolutionary movement. It’s an ad hoc agglomeration of malcontents whose chief interest is in theater and notoriety, not politics. That’s not to say, however, that they cannot be egged on or that there are not some distinctly unsavory elements mixed in with the pink-sweatered Amys and her peers. The whole “movement,” such as it is, may well fizzle and die in another week or two. But perhaps it will soldier on. And perhaps the lawlessness evident there will escalate from widespread theft to violent confrontations with the police or those “millionaires and billionaires,” that the president, like the protestors, likes to invoke. We hope not.

But whatever happens, a large slice of that “99 percent” -- that would be me and you, dear reader -- is not going to like what it sees. The Democrats did some hasty political calculation and decided to throw their lot in with the rabble fomenting Occupy Wall Street. The Democrats own, as a matter of political if not fiscal reality, Zuccotti Park. It will be interesting to see how that investment turns out for them. It’s getting to be lunchtime. The noise you hear is the tiger growling.

Roger Kimball is co-Editor and Publisher of The New Criterion and President and Publisher of Encounter Books.

1b) US 'Misery Index' Soars to Highest Since 1983 on Inflation,High Unemployment


An unofficial gauge of human misery in the United States rose last month to a 28-year high as Americans struggled with rising inflation and high unemployment.
The misery index — which is simply the sum of the country's inflation and unemployment rates — rose to 13.0, pushed up by higher price data the government reported.

The data underscores the extent that Americans continue to suffer even two years after a deep recession ended, with a weak economic recovery imperiling President Barack Obama's hopes of winning re-election next year.

Inez Stallworth, an underwriting assistant for a financial services company, recently gave up her car, in part because of rising costs for gasoline and groceries.

"I can't fit it in," said the 27-year-old Chicago resident, who said most of her extended family was getting by "paycheck-to-paycheck."

Consumer prices rose 3.9 percent in the 12 months through September, the fastest pace in three years.

With gasoline prices high, consumers have less to spend on other things. Moreover, a rise in overall prices saps economic growth, which is typically measured in inflation-adjusted terms.

The last time the misery index was at current levels was in 1983. But in 1984 an improving economy probably helped President Ronald Reagan win reelection. This year, the index has risen more than 2 points.

INFLATION RESPITE

While the misery index rose in September, many economists expect some respite in coming months, driven by softer inflation.

Wednesday's price data showed inflation outside food and energy rose at the slowest pace in six months in September.

Weakness in the jobs markets also accounts for some factors that could push inflation lower in coming months, economists say.

"With households facing weak wage growth and tight budgets, it is difficult to see a sustained, broad-based increase in prices," said Bank of America Merrill Lynch economist Neil Dutta.

He said Wednesday's data showed that businesses' ability to raise prices on clothing, movies and toys was "hitting a wall." Weak incomes also will make it harder for building owners to raise rents, further dampening inflation, Dutta said.

Indeed, inflation could slow to below 2 percent by mid-2012, said Capital Economics economist Paul Ashworth.

But a decline in the misery index declines due to softer inflation might not help Obama's reelection chances much.

"Any lowering of inflation isn't going to have much effect. People are just focused like a laser on unemployment," said independent political analyst Stuart Rothenberg.

Analysts polled by Reuters last week saw the jobless rate — currently stuck at 9.1 percent — barely ticking down to 8.9 percent by the end of next year. With the election in November 2012, the expected decline looks unlikely to help Obama's job prospects much.

Harold Archie, a bus driver with the Chicago Transit Authority, knows well the toll that unemployment is taking on Americans. Higher food and gasoline prices have compounded the strain on his finances since his son lost his job. Archie, 57, has been helping him financially.

Archie said his son might have a shot at getting his job back, but with a pay cut: "And he was only making $13 an hour to start with."
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