Tuesday, July 21, 2009

Wednesday, July 15, 2009

Delaware Civil Rights Icon, Littleton Mitchell passed away in an auto accident Monday. The AP had this as an obituary.

Littleton Mitchell, 90, a Delaware civil rights activist, died Monday.

Mr. Mitchell, who was killed in a crash near his Delaware City home, was pronounced dead during surgery at an area hospital, state police said.

The crash occurred around 3 p.m. Monday when Mitchell's Toyota Prius crossed the centerline and collided with a GMC Savana. The driver of the Savana was treated and released.

Mr. Mitchell, who served as a Tuskegee Airman, led the state NAACP chapter for more than 30 years and, along with his late wife, Jane, was a key figure in eliminating segregation in Delaware hospitals.

The Milford, Del., native was the first African American to teach white students in Delaware and labored to get the state police force to hire its first black trooper.

The AP obituary does not tell what made him special. Instead of merely being happy with being first, he wanted to ensure that he wasn't the last. Instead of allowing injustice to to embitter him, he led the way to marginalize the voices of anger and embrace the call of hope. Instead of trying to be a celebrity, he brought together a team and mentored others.

He served our country in War. He worked to advance it in peace. He is a true testament to the dignity that God allows the human spirit to reach. Sir, one final thank you for your service.

This interview says more about him than I ever could, please read it.


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Lessons from Japan's Lost Decade
What are the policy do's and don't's of which we need an awareness. I want to put a particular emphasis on lesson 5 of the Japanese scholars, "Until the focus of disease is removed by surgery, no macroeconomic medicine will be effective."

Do work with other nations to allow an increase in money supply without panicking them. Japan only came out of the "Lost Decade" by an aggressive monetary policy.

Only a comprehensive monetary policy which allows the market to clean up the bad assets and provides enough liquidity to do so will achieve it. The financial institutions need to be able to borrow at near zero rates from the Fed not at the rates in the TARP. Instead of merely tossing money at the banks, we need to reform the valuations of assets. Mark to market needs to be permanently buried and replaced with a more objective income based evaluation for income producing assets. Even though Americans hate to admit it, South Korea showed that aggressively dealing with troubled assets is vital. It had a rough couple of years, but it returned to strong growth while Japan remained mired in difficulty.

Keynes is dead. Lesson 4 of the Japanese scholars was that fiscal stimulus does not work in these circumstances. We have to make economic policy based first upon if it helps business to flourish not based upon some left wing social engineering. The Great Depression became long because "Others say government did not do enough to restore business confidence, or did too much to damage it, piling on taxes, regulation and labor unions," as Howard Jenkins put it. I believe that a good fiscal policy helps to blunt the trauma and is desirable. I believe that tax cuts, aid to states to prevent more unemployment, accelerating existing projects, increasing food stamps, unemployment, medicaid, tax credits for purchases like fuel efficient cars and first time home buyers, and other safety net programs are desirable. They help keep the economy from collapsing while we allow a couple of years for the monetary policy and the markets to work their magic. Otherwise the public panics. When that happens the sanity of the market could be endangered. What I do not believe is that we can spend our way into prosperity. The stimulus money should have been closer to the GOP version and less like the Democrat version. It could have been a little more than half what it was and the rest of the money should have addressed foreclosures which goes back to lesson 4.

We need to address foreclosures. We should have a window where no doc modifications of ARM's (adjustable rate mortgages) convert to fixed rates. Then we could give banks tax credits to compensate for the opportunity loss. Trying to deal with the bank balance sheets first without dealing with the problem which caused the balance sheets to be in trouble is backward. The second step seems to be bankruptcy reform. We have to allow bankruptcy judges to modify mortgages in Chapter 13. It used to be allowed until the Carter Administration as a trade off for the Community Investment Act and other bills. It also protected the banks when they were forced to give out 21% mortgages. The only way to save the banking industry is to allow real value to set the assets and income to start flowing on half of the non performing loans. That is by loan modification inside and outside the bankruptcy court. Those who won't take the second and third chances will just be foreclosed upon. We can allow big government to intervene and try to redo the balance sheets of 80 million people all of whom are different, or we can allow people to do it themselves. Not taking the former approach will lead to a decade's long reliance on the government by millions at a staggering cost.
A final difference between today’s bust and most other big banking crises is the importance of household debt. Historically, serious banking busts have mainly involved overborrowing by firms. In Japan, for instance, corporate borrowing soared in the 1980s against the collateral of rising share and property prices.

Today, however, household profligacy, which underpins much of the other debt, has been the problem. After the dotcom bust, American firms held back. Virtually all the rise in non-financial debt since 2000 was among households, as Americans tapped into the rising equity in their homes. Although troubled business debts, such as commercial property, are rising, households are the worst hit.

That has important implications. Household balance-sheets are more difficult to restructure than corporate ones, which involve far fewer people. Politically, the process raises questions of fairness. How far, for instance, should taxpayers bail out reckless homeowners who bought mortgages they could not afford? On the other hand, the economic dislocation from unwinding a household-debt binge may be less disruptive than restructuring swathes of firms. As Anil Kashyap of the University of Chicago points out, one reason Japan was so loth to acknowledge the depths of its banking problems was the knowledge that a banking clean-up would require a large-scale restructuring of Japanese firms which, in turn, would throw many people out of work. Restructuring household debts may be political dynamite, but it would not require a wholesale remaking of corporate America.
Nonetheless, the rebuilding of American households’ balance-sheets is likely to force a reliance on government demand that is bigger and longer-lasting than many now imagine.

The don't's are simple. Don't raise taxes as the Democrats plan to do when the Bush tax cuts expire. Instead let's have comprehensive tax reform (pt 3). The Japanese tried raising taxes twice and each time triggered real recessions. Don't keep Zombie businesses on the public dole. Don't pile up public debt in the vain hope of spending your way to prosperity. Don't discourage the markets from reshuffling resources to the efficient. Don't engage in anti-growth energy policies like Kyoto.

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Sunday, July 05, 2009

Saturday, July 04, 2009

No matter where we are, the GOD of creation (Nature's God) gave humans the ability to dream. No government, business, or any other person can steal your ability to dream In America, we are free to live our dreams.

The question that I have is will it be harder to live our dreams in post modern America. The President gave a well spoken address today. He spoke of remembering the indomitable spirit of our founders. The fact that throughout our history we have been able to face down any trial and live up to any challenges. Then he started rattling off a host of government programs that we needed. All of a sudden we are not up to meeting the challenges that face us by unleashing our dreams rather by unleashing our government.

I have a great deal of respect for our President. He is living the dream. I am concerned that the very policies that he advocates such as energy rationing and putting on the hook for 99 trillion dollars of unfunded liabilities risks discouraging Americans from reaching their dreams by undermining their ability to take risk.

The more failure regulators have, the more regulation we are told that we need. The truth is regulators rarely have the ability to keep up with the targets of their regulation. When they are pressured to prevent failures instead of catch criminals, they act as if everyone is a criminal. The result is that they preemptively punish everyone. Innovation becomes something to be feared instead something to be honored. Risk becomes a proverbial four letter word instead of a literal one. America ceases to be unique.

I don't believe this is the time to give up on liberty. Setbacks are opportunities for comebacks. If your child takes a spill on a bike, do you ban bikes? We do not need a nanny state rushing to take our bikes away. We need to understand that price of greatness is temporary pain. Your child doesn't give up bike riding because it will take him/her to more places in a faster and more efficient way. It is about fulfilling the dream of the wind in your face as you and your friends expand your world.

America, this Independence Day one little citizen says, let's cast aside the voices of doom which tell us that our best days are behind us. We need to reach down within ourselves and understand that the greatness of America is not found in expenditures of our government. It is found within our souls. When we allow each other to turn our dreams into reality, then we shall be better than our dreams.

Happy Independence Day.


Friday, July 03, 2009

It is almost Independence Day. Our Founders sought to give us a free nation rooted in Christian Principles. They succeeded. Now the secular mindset is undermining our heritage and threatening our freedoms. When a people no longer trust GOD, they look in vain to some other organizing force. The leftist fringe has made that an out of control, extra constitutional government.

It is why the Government is proposing to take over everything including our lives (health care), our liberty (CAFE, FACE, gun control, PC hate crimes restrictions, radical education, and more), and even our pursuit of happiness with its war on prosperity through higher taxes, energy restrictions, and neo-corporatism.

Rejecting this trend is vital. That is why I am intrigued with the 9/12 project. I am watching it to see if it goes in the right direction, but it sure has started with the right principles and values.