Palin extended the debate over oil versus the environment to cost. She raised the question of oil imports versus oil exports. Worldwide oil discovery shatters the shortage myth. Could American technology develop enough oil at prices of $25-$40 per barrel? Will this bring infra-structure to revive the economy and bring jobs back to the United States. As a net exporter, will budget surpluses create a strong dollar? A return to Reagan’s “city on a hill.”
Can optimism replace pessimism? Can our immigration policy attract the world’s best educated and productive workers while protecting our borders from those who would use our economy to transfer wages back to a mother country. Welfare, medical and education costs fall instead of rising. Our military attains a competency sufficient to dissuade aggression. This is a Reagan-like spirit of can-do rather than “shall not.” Let the greenies compete to drive costs down, not up. Acknowledge that billions of years of a sun, billions of miles away, cannot be influenced by well-meaning reformers.
Tuesday, September 9, 2008
The Middle East & Russia
A decade after Reagan won the Cold War and sponsored supply side economics, a new voice threatened the free world. Environmentalists attacked dependence on carbon based energy. Saudi Arabia, with Aramco in the lead, created a defacto pro-western alliance. But when Iraq and Iran renewed their age old conflict, Sadaam Hussain ignited a Shia/Shiite conflict that had existed for centuries. Sadaam’s success against Iran caused the United States to suspend support. Saddam then turned on Kuwait with eyes on Saudi Arabia. Meanwhile the Soviet attack on Afghanistan re-ignited a modern version of the Crusades, Moslems against Christians, funded by the Saudi Arabian Wahabis. To make matters worse, the environmentalists’ ban on drilling forced the United States to choose Iraq as the killing field for access to the world’s carbon.
Other factors emerged. China rejected Mao’s agrarianism in favor of western industrialization. India rejected Ghandi’s pacifism for western industrialism. Both rejected environmentalism for low cost carbon.
Putin realized that with the greening of the democracies, gas and oil revenues from the “stans” could rebuild the Russian economy. Not ideological but the raw power of czarist Russia. For Putin, Georgia, the Ukraine, the Baltic states, Poland, Czechoslavakia, Yugoslavia and the middle east became his objective.
Believing environmentalist claims that it will take ten years for American-based carbons to meet the soaring influence of Russian based energy, Putin tested the waters in Georgia.
Will Europe choose Russian oil and gas or the blood, sweat and tears of war? Is NATO a paper tiger? Will Brazil dominate the Americas as the United States currency collapses? The stakes have never been higher. Our allies never more unreliable. Our political will must choose between the sternness of federalism or the excess of liberalism.
The next few years will tell the story. The outlook is not bright. There are nuclear states capable of igniting World War III.
If we reverse political direction and strive to be the largest producer of carbon-based oil, coal and gas at the lowest cost and determined to compete with the middle east and Russia on a cost basis, we will supply Europe and the rest of the world with American carbon—cleaner, safer and cheaper. The middle east will tremble. Russian influence may abate and NATO could find its backbone. India and China will welcome cheap carbon and the United States will re-emerge to our former position as world leader. Realization of Ronald Reagan’s vision of a shining city on a hill.
Other factors emerged. China rejected Mao’s agrarianism in favor of western industrialization. India rejected Ghandi’s pacifism for western industrialism. Both rejected environmentalism for low cost carbon.
Putin realized that with the greening of the democracies, gas and oil revenues from the “stans” could rebuild the Russian economy. Not ideological but the raw power of czarist Russia. For Putin, Georgia, the Ukraine, the Baltic states, Poland, Czechoslavakia, Yugoslavia and the middle east became his objective.
Believing environmentalist claims that it will take ten years for American-based carbons to meet the soaring influence of Russian based energy, Putin tested the waters in Georgia.
Will Europe choose Russian oil and gas or the blood, sweat and tears of war? Is NATO a paper tiger? Will Brazil dominate the Americas as the United States currency collapses? The stakes have never been higher. Our allies never more unreliable. Our political will must choose between the sternness of federalism or the excess of liberalism.
The next few years will tell the story. The outlook is not bright. There are nuclear states capable of igniting World War III.
If we reverse political direction and strive to be the largest producer of carbon-based oil, coal and gas at the lowest cost and determined to compete with the middle east and Russia on a cost basis, we will supply Europe and the rest of the world with American carbon—cleaner, safer and cheaper. The middle east will tremble. Russian influence may abate and NATO could find its backbone. India and China will welcome cheap carbon and the United States will re-emerge to our former position as world leader. Realization of Ronald Reagan’s vision of a shining city on a hill.
Gustav and Palin
Hurricanes have brought into contrast Governors Bush and Jindal who handled Gustav with competency and calm versus the entire political structure of Louisiana which panicked during Katrina with bad decisions frustrating an inexperienced Bush operative. No mandated evacuation. Utilization of a sports arena lacking conveniences as the storm hit the poorest ward in the city, media focused on the ninth ward, humiliating a president who mistakenly relied on the local government.
Gustav finds a government which learned its lesson. A young Republican governor with the president positioned in Texas to supervise and lead government. Private aid before locals could do any harm.
Enter Sarah Palin who demonstrated in an hour-long interview with Maria Bartolome that she knew more about oil and drilling at Anwar than Nancy Pelosi and all her congressional democrats. A two-thousand-acre footprint amid tens of millions of acres. A husband expert about the north slope. She tamed big oil and rewarded her taxpayers. She defined how government can bargain with Big Oil and benefit the taxpayer without new taxes.
The free choicers saw a mother of four choose to carry a Down syndrome baby to birth, accepting the financial and emotional cost for the love of a newborn child. Sending a son to Iraq to fight an unpopular war, stopping the construction of a bridge-to-nowhere, costing her Republican party two senators and a governor to establish her bona fides as a true reformer. Many Republicans and all of K Street tremble.
With her scoped rifle, this NRA supporter shoots caribou to enjoy her favorite stew while proudly showing a record of wildlife preservation vindicating the western population fighting for its right to hunt deer and quail.
Student, athlete, beauty queen—Palin contrasts with feminists who shudder at her reputation as point guard on her college basketball team.
Attacked for trying to fire an incompetent relative makes a Democrat attack on this competent Republicans seem ridiculous.
Against carefully choreographed Democrats, this freestyle Republican with her out-of-date hair-do is a refreshing look at what a McCain presidency stands for.
Perhaps the least qualified in foreign affairs president was Harry Truman. He drew his foreign affairs leadership from his heart. He responded to the needs of his people. His Berlin airlift and stand in Korea stemmed the tide of the Cold War. Palin would do no less.
Palin stands as a warning to unqualified Republicans. Neither Hillary nor the Obamas have such a standard bearer for ethics and reform. In debate, Biden will meet his match.
Gustav finds a government which learned its lesson. A young Republican governor with the president positioned in Texas to supervise and lead government. Private aid before locals could do any harm.
Enter Sarah Palin who demonstrated in an hour-long interview with Maria Bartolome that she knew more about oil and drilling at Anwar than Nancy Pelosi and all her congressional democrats. A two-thousand-acre footprint amid tens of millions of acres. A husband expert about the north slope. She tamed big oil and rewarded her taxpayers. She defined how government can bargain with Big Oil and benefit the taxpayer without new taxes.
The free choicers saw a mother of four choose to carry a Down syndrome baby to birth, accepting the financial and emotional cost for the love of a newborn child. Sending a son to Iraq to fight an unpopular war, stopping the construction of a bridge-to-nowhere, costing her Republican party two senators and a governor to establish her bona fides as a true reformer. Many Republicans and all of K Street tremble.
With her scoped rifle, this NRA supporter shoots caribou to enjoy her favorite stew while proudly showing a record of wildlife preservation vindicating the western population fighting for its right to hunt deer and quail.
Student, athlete, beauty queen—Palin contrasts with feminists who shudder at her reputation as point guard on her college basketball team.
Attacked for trying to fire an incompetent relative makes a Democrat attack on this competent Republicans seem ridiculous.
Against carefully choreographed Democrats, this freestyle Republican with her out-of-date hair-do is a refreshing look at what a McCain presidency stands for.
Perhaps the least qualified in foreign affairs president was Harry Truman. He drew his foreign affairs leadership from his heart. He responded to the needs of his people. His Berlin airlift and stand in Korea stemmed the tide of the Cold War. Palin would do no less.
Palin stands as a warning to unqualified Republicans. Neither Hillary nor the Obamas have such a standard bearer for ethics and reform. In debate, Biden will meet his match.
Why Drill, Drill, Drill Has Not Succeeded
Is our objective self-sufficiency? Should not the United States be the world’s largest oil producer? Environmentalists aside, the greatest opposition comes from international oil companies whose primary interest is to protect the value of their reserves at $100 per barrel.
Everyone seems to agree on natural gas as a substitute for oil. Not mentioned is drilling for natural gas which again accounts for the reticence of big oil.
Only a national demand for increased oil production will succeed. Even disincentives like excess profits taxes—whatever works. The enemies are big oil and the environmentalists—a strange alliance. Only McCain and Palin can square this circle. Supply breaks cartels whether headed by corporate giants or environmentalists.
Who owns the oil at the continental shelf? Any answers? If leases are granted on lands not owned by the United States, who gets the oil? The drillers, the oil marketers, the refiners? Who slices the melon? How big are the slices? Who knows?
My confidence stems from a New York Times editorial written in 1921. It proclaimed that the world would run out of oil in ten years. I believe there are tens of millions of barrels of oil within our grasp. We need a government with a will to find it. Only United States technology can succeed but only with a supportive government.
Everyone seems to agree on natural gas as a substitute for oil. Not mentioned is drilling for natural gas which again accounts for the reticence of big oil.
Only a national demand for increased oil production will succeed. Even disincentives like excess profits taxes—whatever works. The enemies are big oil and the environmentalists—a strange alliance. Only McCain and Palin can square this circle. Supply breaks cartels whether headed by corporate giants or environmentalists.
Who owns the oil at the continental shelf? Any answers? If leases are granted on lands not owned by the United States, who gets the oil? The drillers, the oil marketers, the refiners? Who slices the melon? How big are the slices? Who knows?
My confidence stems from a New York Times editorial written in 1921. It proclaimed that the world would run out of oil in ten years. I believe there are tens of millions of barrels of oil within our grasp. We need a government with a will to find it. Only United States technology can succeed but only with a supportive government.
The Conventions
The two national conventions profiled two totally opposite personalities. Obama’s skin was exposed as paper thin. His demeanor, while earnest, is totally without humor. Biden’s reaction to Palin was respectful and positive.
McCain’s profile in courage was examined and re-examined. There can be no doubt about his ability to lead. Palin proved she can handle big oil. Palin extended the debate over abortion from a matter of law to a matter of conscience.
McCain’s profile in courage was examined and re-examined. There can be no doubt about his ability to lead. Palin proved she can handle big oil. Palin extended the debate over abortion from a matter of law to a matter of conscience.
Monday, September 8, 2008
The Mortgage Mess
Memo to Ric Davis:
The winning economic strategy for John McCain is to emphasize the first Bush administration and Bush 2 including the two terms of Clinton. For twenty years the government pursued a soft money policy. It was dictated by Alan Greenspan. Wall Street was seduced and abetted by dozens of money managers. They borrowed from the Federal Reserve at 2% in order to lend at 6% or higher amid guarantees by the government. The mortgage collapse was only the outward sign of a deep-seated sickness supported by Fed Chair and Treasury go-alongs. Both rejected tough lending standards and tight money in favor of export markets which cost jobs in the United States.
All of Wall Street, most of the banks, and intermediaries benefited from this policy until someone asked, "where are the customer's yachts?" There weren't any! Jack Bogle has been the lonely expert asking this question on behalf of Vanguard investors. But, not even dollar averaging can stem a credit crisis.
Foreclosures will not wipe out our financial markets. The awakening of credit-worthy borrowers repaying their loans might! If money flows into the banking system, cashing out deadbeat loans, it will not create net cash, but shrink capital availability. It makes banks wary of lending--and increases the cost of borrowing. Only the fortitude of John McCain can withstand the pressure of special interests trying to protect their hindquarters. Only a dose of castor oil will solve the problem. Only John McCain and Sarah Palin have the stomaches to administer the remedy.
Give a three-year tax holiday to all credit worthy borrowers who repay their home equity loans which supported a lavish lifestyle unsupported by income. Let’s have a Reagan-like dose of reality. Mistakes: 1. Equitization of mortgages for the elderly. Robs capital from their progeny. 2. Equitization of homes--making non-tax deductible personal debt tax deductible. Credit card debt becomes riskier. Who is responsible?--the government. A disgraceful example of hypocrisy.
The winning economic strategy for John McCain is to emphasize the first Bush administration and Bush 2 including the two terms of Clinton. For twenty years the government pursued a soft money policy. It was dictated by Alan Greenspan. Wall Street was seduced and abetted by dozens of money managers. They borrowed from the Federal Reserve at 2% in order to lend at 6% or higher amid guarantees by the government. The mortgage collapse was only the outward sign of a deep-seated sickness supported by Fed Chair and Treasury go-alongs. Both rejected tough lending standards and tight money in favor of export markets which cost jobs in the United States.
All of Wall Street, most of the banks, and intermediaries benefited from this policy until someone asked, "where are the customer's yachts?" There weren't any! Jack Bogle has been the lonely expert asking this question on behalf of Vanguard investors. But, not even dollar averaging can stem a credit crisis.
Foreclosures will not wipe out our financial markets. The awakening of credit-worthy borrowers repaying their loans might! If money flows into the banking system, cashing out deadbeat loans, it will not create net cash, but shrink capital availability. It makes banks wary of lending--and increases the cost of borrowing. Only the fortitude of John McCain can withstand the pressure of special interests trying to protect their hindquarters. Only a dose of castor oil will solve the problem. Only John McCain and Sarah Palin have the stomaches to administer the remedy.
Give a three-year tax holiday to all credit worthy borrowers who repay their home equity loans which supported a lavish lifestyle unsupported by income. Let’s have a Reagan-like dose of reality. Mistakes: 1. Equitization of mortgages for the elderly. Robs capital from their progeny. 2. Equitization of homes--making non-tax deductible personal debt tax deductible. Credit card debt becomes riskier. Who is responsible?--the government. A disgraceful example of hypocrisy.
Pay Off Your Secondary Mortgage
As the stock market falls and economic news worsens and far-ranging explanations flood the airwaves, ONE explanation is absent—the de-equitization of housing. Clinton’s blessing of Greenspan’s easy money policy did not just encourage banks and financial intermediaries to leverage. It also encouraged middle Americans to leverage.
The elderly were encouraged to take the equity out of their homes to live a little better--equity that was normally reserved for their children.
Worse yet, young wage earners were urged to avoid taxes by hocking their houses for low-interest, tax deductible home loans (second mortgages) instead of paying non-tax deductible, outrageously high interest for credit card debt.
The middle class has learned the evils of debt. They are de-leveraging. That is what causes the stock market to falter as many good mortgages are paid off. As net debt recedes so does purchasing power, at least temporarily. This is a good sign, not a bad sign.
It helps banks absorb their sub-prime losses and shores up balance sheets. It also reduces the inclination to make bad loans. Banks with net cash returning will survive—let the others fail—but cut off bonuses for those responsible for the failures.
The elderly were encouraged to take the equity out of their homes to live a little better--equity that was normally reserved for their children.
Worse yet, young wage earners were urged to avoid taxes by hocking their houses for low-interest, tax deductible home loans (second mortgages) instead of paying non-tax deductible, outrageously high interest for credit card debt.
The middle class has learned the evils of debt. They are de-leveraging. That is what causes the stock market to falter as many good mortgages are paid off. As net debt recedes so does purchasing power, at least temporarily. This is a good sign, not a bad sign.
It helps banks absorb their sub-prime losses and shores up balance sheets. It also reduces the inclination to make bad loans. Banks with net cash returning will survive—let the others fail—but cut off bonuses for those responsible for the failures.
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