Monday, January 19, 2009

The Great Depression of 2009

There, let’s say it. Let’s get the “D-word” out there. Now we can go on.

Critiquing my recent prediction success factor for the previous year means anything I predict will not happen, or it will happen, but not the way I predicted. Just so you know.

I kicking off a “Depression09” tagged series beginning with a post from last October about why we shouldn’t be so concerned about our recent economic unpleasantness. I’ll try not to chew my cabbage twice.

I keep hearing dire predictions of a sluggish economy stretching out over years. But it is by the same people that have to have something to report as news even when they have no news to report.

Just like I had to learn all about alligators, Sunnis, and Shia after we got ourselves up to our ass in Iraq, so too I’ve had to learn about how the current economic situation came about. While it has been proven tha a free market is the goose that lays the golden egg, we fear regulation may kill both.

However, our current bond rating system is like the fox hound is working for the fox. The rating system should be working for the buyer not the seller – which if I follow the news correctly, and there a good possibility I’m not, but anyway, we are doing just the opposite.

If the sub-prime mortgage-backed bonds had been rated accordingly, a lot of value would not have been put at so much risk. If the incentive for rating companies was to profit more from satisfying buyers than sellers then a concept with a self-defeating aspect could be remedied.

Keep the markets free and change the incentive for the rating companies. That seems doable.

The lion that ate Communism could continue to roam the savanna.


Liberal Bias, Oxymoron

A true liberal can no more be bias than a true conservative cannot. To be liberal is to be fair. Their bleeding-heart’s blood flows for every living thing no matter how insignificant. Everything and especially everybody have rights. It’s enough to make you want to puke, but that is what makes them liberal.

Truth, facts, and a just compromise when equal rights conflict are the ultimate goals of any and all liberals. If you are far enough to the right, the center looks left to you. Truth looks biased.

If you are far enough to the left, you are insufferably boring to everybody. Intellectual truths obscure basic truths, but liberals' misrepresentation of facts is not the subject of this post. 

For the basic missconception of Liberal Bias: 

Liberals will add millions of dollars to an election because even a minority of one is not properly represented, and liberals will prevent a million dollar construction project, which will mean jobs for thousands of workers, because some insignificant species existence is not being properly reviewed.  As insufferable as they may be, true liberals are fair to a fault. 

Anyone is who is truly liberal is not bias and anyone who is bias is not a true liberal.  Liberal bias is an oxymoron, but dammed fine Fox News spin – or is that spam?

Conservative bias is rewriting facts and history to fit today’s political prejudice, and term (meme) "Liberal Bias" has been as infamously popular as the "liberals'  war on Christmas".   

The term has be added to Red Word / Blue Word.

Sunday, January 11, 2009

Dealing with Russia in the 21st Century

What did you expect? In the latter half of the previous century, you confront Communism and win. Free markets beat planned economies. And what did you win? The winnings was the right to have the economies run by your way. Russia must play on your ball field by your rules.

If the US had not beaten Japan and force on it American capitalism, Japan’s economy would not be the behemoth of the Pacific. We bombed their steel mills and then rebuilt them after the war and put our old aging mills out of business. You win the war; your children lose their jobs. Hurray for us.

In winning, sometimes you sow the seeds of future conflict by being too harsh in terms of surrender as after WWI and sometimes future conflict arises by making your adversary adopt you system. They may have a knack for it. Given a new system, they out compete an old hand at competition.

Had we kept the USSR with its competitively disadvantaged planned economy, we would be living high on the hog today. Europe would be dictating terms to them, exploiting their natural resources to our advantage and not theirs.

But Noooo… We had to totally defeat Communism. We had to convince them their system was not as good as our and they had to become capitalist. And they did.

What did you expect? That we would all go to Disney World and live happily ever?

We have met the enemy and they are us.

Saturday, January 10, 2009

Predictions for 2009

Time once again for the prediction post. But before we get to next year’s predictions, let’s take a look at last year’s predictions and see how we did.

Review of last year’s predictions:

1. John McCain will be elected President of the United States overwhelmingly. It will not even be close. Hillary/Obama or Obama/Hillary or one of them with somebody else will somehow - as all good Democrats do - self-destruct.

Obviously, I got that one wrong, and I’m glad I did. To these old cynical eyes, this year’s event is unbelievable. In my defense as a fortuneteller, and as I have already noted, 2008 has been a year that just kept on giving. Who could have predicted that? 2008 was one of those years that will go down in the history books. Documentaries, dissertations, and all manner of books in general will be written about the year that was 2008.

As I stated in the linked post above, remember this year, like a fine meal, savor it, roll it over your tongue, realize all its nuances, and be a glutton for its fresh but nonetheless historic moments.

Obama’s election, and his selection of a cabinet that sends a message of inclusiveness and not divisiveness, portends another banner year, history-wise. Making a prediction for next year is really an exercise in uncertainty.

2. The Republicans will pick up on something that happened in the Democratic Primary that no one much noticed at the time it occurred and turn it into a major political issue during the general election.

That didn’t happen. Republicans so screwed up things, no matter how much finger pointing and liberal labeling they did, nothing seem to work. Has there been an identity shift in the general electorate? Has the term “liberal” lost its taint?

3. Castor will die. This year for sure.

Not so sure, after all.

4. Post Castor Cuba will be big in the news and draw the media's attention away from that old news story, the war in Iraq.

Since 3. didn’t happen, there wasn’t much chance of 4. happening either.

5. The Surge will prove a failure…the Surge will simply become an old fashion escalation − which is doomed to fail aso.

I got this one right. The Surge has become an escalation. The Surge is a failure on many levels, but the fact that the term meant something short-termed, it is a failure which is only waiting for us to admit it. We are still over there in large numbers. The military is over-stretch and under-supplied.

6. A major event or disaster in Iraq that will make the Surge appear meaningless.

This did not happen, but I’m sending it in again next year. Something big, bad, and politically devastating is going to happen over there.

7. The recession will be a short one. The economy is strong, it will weather the money crisis over bad loans, and the Christmas season will be a big one for retail sales.

Did I get this one wrong or what? I know many – Krugman for example – saw this coming and tried to warn us, but I didn’t see the extent of the collapse as others did.

On the hold, I did not do so good predicting what was going to happen. And if you look back at last year’s critique of 2006’s predictions, I did not do so well there either. It would seem that if I predict something, one thing you can be sure of, it will not happen, or it will happen but not in the way I predicted, but mostly, it will not happen.

With that in mind, let’s move on to this year’s predictions. This year is especially tough given a high water mark of notable events for this year, and to wring out this metaphor, after the flood waters go down nothing is the same.

The selection of Obama by voters and the building of a cabinet, teams for our current crises, and the transitional team in general seems a dream too good to be true. And like any place that looks like a good place for an ambush usually is, to my cynical mind, something must go wrong.

When it will go wrong and how it will go wrong, I don’t know, but wrong it will go, I have no doubt. So, that’s the prediction quandary I face.

Predictions for 2009:

1. Something will go wrong with the idealistic government that is being formed by the man selected because he offered hope for a change. It could be something brutal, extreme, and life ending for one or many, or it could be something slow, scandalous, and life ruining but a nonetheless end of what was hoped.

2. Although the full impact of the recession will be felt in the first half of this year, by the end of the year, recovery will appear.

3. Our involvement in Iraq will continue for another year as we prop up the current Iraqi government, that is unless one or both of the following does not happen:

a. Something big and bad is going to happen. It always has in the past. It could be like Tet in Vietnam, which by the way the Americans won, or like the Marine barracks in Lebanon, or something big, blooded, and laden with doom, gloom, and damnation.

b. A person or a group will feel they have enough power to take over Iraq and view the Americans as an interference, in which case the above action will be even more precipitous.

If this were to occur, the Americans may have to leave quickly. I hope our commanders over there have inventoried roof tops from which people can be hastily evacuated.

4. The current government in Afghanistan is so corrupted, that Afghanis will turn back to the Taliban because even though they are extremist in their government, they are at least not as corrupted as the current administration. This will reach a boiling point in Afghanistan and we will be invited to leave. I’m not sure this prediction will mature this year, but that this will occur is a foregone conclusion. It is as written in the terrain of the land and the faces of Afghanis as it is written in books.

5. The prison at GitMo will be closed, or at least closed for all practical purposes.

6. Alabama will win the college football BSC.

That's what I predict for 2009. I can't wait.