San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Thursday, September 6, 2012

Bonus Posting: Public Apologies

I will be unable to post anything to this blog tomorrow so I am including a bonus posting to the blog today.  I hope you enjoy it.  (MW)

In recent times the issuance of a public apology has become a bit of an art form.  We all know the situations that come up.  Some sports star is caught sending naked pictures of himself to female reporters, or some politician is arrested for driving under the influence, or some Hollywood star says something bad about Jews, and the media is clamoring for an apology.  A bit of time passes while the embarrassed celebrity confers with his press agents and then the fateful announcement is released to the press.  They all follow the same general format.  It goes something like this.  "If I offended anyone by doing so and so, I apologize to them."  What a joke.
An article in the paper earlier this week recorded the public gaffe of the chairman of the California Democratic Party. Chairman John Burton was being interviewed on a San Francisco radio station when he made the point that "Republicans lie and don't care whether people know they lie."  He then went on to commit the ultimate sin when he connected his allegation about Republican lying with Nazi propaganda minister Joseph Goebbles.  He quoted Goebble's statement that "As long as you lie, lie the big lie and keep repeating it."  On cue, California Republicans immediately screamed out for an apology.  Of course, they alleged that they were horribly offended by Burton's remarks.  They conjured up images of the Holocaust.  They accused Burton of being a neo-Nazi.  The Republicans had a sound bite that they could use and they were going to use it to the maximum impact.  They were going to destroy Burton's reputation, if at all possible.
You could just see the frantic activity in the Burton camp.  What should we do to squelch this before it gets any bigger?  What should we do to perform damage control?  Ah yes....issue a public apology.  That always works.  That will diffuse the issue.  So, here is what Burton's handlers came up with.  It is a classic example of a public apology that says nothing.   Burton wrote, "If Mitt Romney, Paul Ryan or the Republicans are insulted by my describing their campaign tactic as the big lie, I most humbly apologize to them or anyone who might have been offended by that comment."  Let's consider this apology for a moment.
Under normal circumstances an apology is issued from a person who has sinned against another person.  The person who has committed the sin recognizes that he has sinned and desires to try and correct the situation.  In other words, the catalyst for the apology is found in the heart and mind of the person who has committed the offense.  The person who has committed the offense is convicted in his own mind that what he has done is wrong and needs to be corrected.  Even if the person who was offended does not do anything about the issue, the one who committed the offense is still bound to apologize in order to live with a clean conscience.  I think we all understand this principle.  It was the principle we were taught by our parents.  When you do something bad to somebody, go tell them you are sorry.  There is nothing hard to understand here, except for politicians.
In a public political apology everything changes.  Every public apology by a celebrity/politician that I have read in the last several years has begun with the conditional "If".  In other words, the one issuing the apology is not really admitting that he did anything wrong.  He is simply saying "if" somebody has decided to make a big deal out of something that he did, then he wants to say "I apologize" to him.  What a travesty.  This makes a mockery out of the apology.  Indeed, this is no apology at all.  The politician who is ostensibly apologizing has no conviction in his own soul that he has done anything wrong.  In fact, just the opposite is the case.  The offending politician actually believes that he was right and he is shifting the blame for the brouhaha to the person who had the audacity to take offense!  How does that ever constitute a real apology?  Clearly it does not.
Note that the "most humble apology" is delivered to "anyone who might have been offended" by what the politician said.  A subtle shift has taken place here.  We have gone from a politician actually giving offense to another person allegedly taking offense.  Burton's apology is not really an apology at all.  In fact, Burton's apology is an accusation.  He is accusing the Republicans of taking offense at something he has said that was not really offensive in his mind.  He is not admitting that what he said was objectively offensive.  This is a significant shift.  So Burton's public apology is not really an apology at all.  In his world, it is an accusation of sin against those who make the immoral decision to take offense at what he said.  It is the Republican's fault that this has become an issue, according to Burton.  If they had not willingly and maliciously taken offense this would have been a non-issue.  So, we can see, that the art of public apology is taking an offense given and turning it into an offense taken.  Only politicians and lawyers would be able to take something we all understood and learned to do as children and turn it into a mess like this.
Do we really want to be led by men of this class of moral character?  Do we really want our elected leaders to be men who do not understand the simple concept of saying, "I was wrong, forgive me"?  Do we really want our political representatives to be incapable of admitting that they ever do anything wrong?  Do we really believe we are better off as a nation when our rulers are men and women who are utterly incapable of taking responsibility for their own mistakes, much less even admitting that they made a mistake?  This is the situation we have come to in the SDA and it is not a good one.  Our political rulers are less intellectually and emotionally mature than most five year old children.  I guess we get what we deserve, once again.

Another Unintended Consequence Of Dodd/Frank

As I wrote in my May 9th posting to this blog, "The Dodd-Frank bill of 2010 is a staggering 2319 pages long. At roughly 3000% larger than Sarbanes-Oxley, the Dodd-Frank bill has the ability to create negative impacts upon the economy on an enormous scale. This bill, as most everyone knows, was created to punish the banks for causing the "financial crisis" of 2008-2009. The fact that the banks were the primary victims of the financial crisis of 2008-2009 does not matter. The fact that the government created the financial crisis does not matter. All that matters is the fact that there were votes available to be purchased and blame to be shifted by putting together a huge piece of legislation that blamed the banks for the government's deeds. Dodd-Frank has been signed and handed over to the bureaus for formulation."  Well, a couple of months have passed and the laws are being written by petty bureaucrats in smoke-filled back offices.  Let me tell you,  it ain't pretty.
Last week Fox News issued a report about an incident in which "Wells Fargo Home Mortgage fired a Des Moines worker over a 1963 incident at a Laundromat involving a fake dime in the wake of new employment guidelines."  This story is another in an endless list of stories that illustrate the unintended consequences of burdensome and downright stupid government regulations stemming from Dodd/Frank.  The report states that "Richard Eggers, 68, was fired in July from his job as a customer service representative for putting a cardboard cutout of a dime in a washing machine nearly 50 years ago."  Now being fired from his present job for plugging a washing machine fifty years ago seems like a pretty harsh sentence for a crime that had already been paid for.  Mr. Eggers paid his debt to society fifty years ago when he was jailed for two days for his crime.  Being a genuinely nice fellow, at least as far as I can tell, I suspect that Richard also paid a visit to the owner of the laundromat and paid him the dime he was owed.  Regardless, this is an issue that was resolved fifty years ago and should not impact Eggers present employment status with Wells Fargo Bank.  Enter Dodd/Frank.
In their rush to punish evil, profit-seeking bankers for their allegedly fraudulent activities, federal regulators penned a regulation making banks which knowingly employ people convicted of financial crimes subject to multimillion dollar fines.  As the Fox report said, "Big banks have been firing low-level employees like Eggers since new federal banking employment guidelines were enacted in May 2011 and new mortgage employment guidelines took hold in February. The tougher standards are meant to clear out executives and mid-level bank employees guilty of transactional crimes — such as identity theft and money laundering — but are being applied across the board because of possible fines for noncompliance."  Poor old Eggers.  He committed a "financial crime" fifty years ago.  He stole a dime from a business owner.  He served two days in jail.  Now, under new federal banking guidelines, he has been fired from his customer service position at Wells Fargo Bank because federal bank regulators consider him to be a risk to the banking public.  
Fox reports that "The regulatory rules forbid the employment of anyone convicted of a crime involving dishonesty, breach of trust or money laundering. Before the guidelines were changed, banks widely interpreted the rules to exclude minor traffic offenses and misdemeanors."  Under the new climate of regulatory intimidation and threat of serious fines, the banks are taking no risks, cutting loose anyone on the payroll who can even loosely be associated with a prior financial crime.  Most important to me in this situation, and generally ignored by everyone including the Fox news report, is the loss of individual constitutional rights involved in this new banking regulation.  According to the new rules coming out of Dodd/Frank, it is now a legal requirement that anybody formerly convicted of a financial crime must be fired from any bank position.  The question is screaming out for an answer.  Whatever happened to double jeopardy?  These poor souls have already paid their debts to society.  The people who have been convicted of financial crimes in the past have done their time.  After they served their sentences they were released from prison and that should have been the end of the matter.  It is totally unconstitutional and immoral to now hold them responsible for a crime for which they have served their punishment.  In essence, the new rules require banks to commit double jeopardy and punish the prior offenders a second time.  This is a gross violation of US law and it is being totally ignored by everyone.  Has our hatred for profit seeking banks become so extreme that we are now willing to suspend the laws against double jeopardy in order to punish the banks and their employees for  crimes they have been previously punished for?  It sure seems so to me.
Why are the banks taking this extreme measure?  Fox reports that "American Bankers Association spokeswoman Carol Kaplan said the 'public clamor for tighter regulation also is responsible for the stricter interpretation of the rules. The safest route is to fire the employee and let them pursue an FDIC waiver. There's no question that there was an appetite for tighter bank regulation as a result of the global financial crisis.'"  So there you have it.  The American public has spoken.  Evil banks must be controlled.  Tighter regulations must be written.  We will not sleep at night until no banker can so much as sneeze without prior government permission.  This situation exists because John Q. Public and John Q. Voter want it to be this way.  What a disaster.
Is this what you want?  Do you really want legions of bureaucrats delving into the day to day operations of independent businesses, telling them who to hire and who to fire?  Do you really believe that this has made us more safe and secure from the possibility of fraudulent banking activity?  Has canning Mr. Eggers made this a better world to live in?  Do you really believe that punishing someone twice for the same crime is a good thing to do?  Look at what has happened to us.  In our clamor for more and more government regulation to protect us from the alleged evils of the free market we have become slaves to a overbearing regulatory government.  We do not deserve to be free if we continue to think like this.  If we really believe we need an army of bureaucrats to protect us from a tiny number of unscrupulous businessmen we deserve to be slaves to government.


Wednesday, September 5, 2012

Immoral Fed Profits Continue To Roll In

With all the talk about how profit seeking corporations are immoral entities that need extreme levels of government regulation to prevent them from defrauding the general public, the proponents of government regulation of the financial markets are strangely silent when it comes to the financial activities of the Federal Reserve Bank.  I have written in the past about the many abuses foisted upon the American public by the Fed.  The Fed is largely responsible for most of the recessions we have all suffered through in the past one hundred years.  The Fed is largely responsible for the "Great Recession" of 2008-2009.  Fed propaganda has been largely successful in convincing the American public that it was profit seeking banks that caused the "Great Recession" rather than admitting it was their own immoral activities that brought about the crisis.  More recently the Federal Reserve Bank has become the most profitable company in the United States.  Does that surprise you?  It shouldn't.  The Fed took advantage of the panic that ensued in the 2008-2009 market meltdown and purchased assets at fire-sale prices.  Then, when the recession ended and stock prices bounced back, the Fed sold those shares for gigantic gains.  Those gains propelled the Fed to the top of the corporate profits list.  The example of the Fed takeover of AIG is telling.
An article from the Dow Jones Newswires published on August 25th told the largely ignored tale of the Fed's sale of the last of its shares of mortgage backed securities acquired from American International Group (AIG).  The headline stated, "N.Y. Fed Had $6.6 Billion Profit on AIG Maiden Lane Sales."  "Maiden Lane" is the Fed's name for its purchase of mortgage backed securities.  According to the article, "The Federal Reserve Bank of New York on Thursday profitably closed the book on its crisis-era seizure of American International Group Inc.'s (AIG) most toxic assets, selling the last of the complex securities that have evolved from being Exhibit A of the financial crisis into one of the hottest buys around....the New York Fed announced a profit of about $6.6 billion...The New York Fed since April has been selling off about $47 billion in face value of complex mortgage assets from Maiden Lane III, which in late 2008 paid about 47 cents on the dollar..."  Several of the phrases in the above paragraph are very interesting.
Note that the purchase of the mortgage backed securities from AIG is described as a "seizure".  AIG was not permitted to sell their mortgage backed securities to anyone other than the government.  Hence, the best word to describe the Fed's purchase of the securities is "seizure".  Also note that those "toxic" assets have turned into "one of the hottest buys around".  Now, how can it be that investment securities considered so dangerous by the US government and the Federal reserve that they had to be described as "toxic" can actually end up being one of the best investments of the past several years?  Could it be that the mortgage backed securities were never toxic in the first place?  Could it be that the Fed, Treasury and other ministers of propaganda in the federal government had a vested interest in lying about the nature of the securities so they could ride to the rescue and effectively nationalize an entire company?  Could it be that the various branches of government were being less than totally honest with the American people on this one?  May it never be!
The Federal Reserve Bank of New York was able to purchase mortgage backed securities for less than half of their original value.  We were told at the time that the Fed's purchase was bound to result in taxpayer losses because the securities were essentially worthless and that the Fed was doing this simply to keep AIG from going bankrupt.  All trading in the securities was halted and there was no free market mechanism that could properly value the shares.  We were basically left at the whim of the federal government and asked to trust them.  I specifically remember hearing that AIG was "dead in the water" and would soon go out of existence.  Now it turns out that the Fed essentially robbed AIG of its mortgage backed securities.  A couple of years later and the Fed is magnanimously agreeing to sell those securities at an extreme profit.  A couple of years later and those "toxic" assets look pretty good to a lot of people.  So we have to ask, was the Fed just stupid or were Fed officials lying to us?  Either way, all of those associated with the Fed who were involved in the purchase of the mortgage backed securities should be indicted for securities fraud.  Executives at publicly traded companies have been indicted, tried and imprisoned for securities fraud with far less evidence than what exists against the Fed.  Why is the Department of Justice not filing charges against the Fed?  Are they just protecting their own?  It sure seems like it to me.
Why is this story not being told?  Why are we not asking the following question:  if the government lied to us in this situation, why would government officials not lie to us again?  Why are we not asking for a new law that would prohibit government interference in the market place and other Federal Reserve abuses?  Why are we not removing all Congressmen from office who were in favor of the AIG bailout?  Why are we not electing Congressmen to office who promise to let the free market operate without government bailouts?  I know why.  Because we don't want a free market.  People do not like the volatility associated with the free market.  They prefer a market that is artificially stabilized by government intervention.  They want a government that will always be there to bail them out when things go bad.  It does not matter that government is incapable of doing what it claims.  It does not matter that government intervention in the marketplace only and always makes things worse.  It only matters that it can claim to makes things better and we believe them.  Rather than submitting to the rigorous discipline of the free market, where the consumer is king and companies come and go, we want a beneficent dictator to tell us what to do and protect us from all harmful things.  We really want to be the slaves that we are.  We really do deserve what we get.

Tuesday, September 4, 2012

Voting Is An Act Of Holy War

Roger Karny of Denver wrote a very interesting letter to the editor of the Denver Post last week.  His main point was that "sometimes its important to see that some political differences have been around a while and for good reason."  I am not really sure what his "good reason" might be but he is right on the mark with his assertion that political differences in this country have not changed for a long time.  Ever since the federal government abandoned the Constitution, there has been a war between those who would expropriate the property of their neighbors to fund the warfare state and those who would expropriate the property of their neighbors to fund the welfare state.  Both sides are in firm agreement that the majority of voters has the right to take what belongs to the minority of voters and use it for its own ends.  That explains, of course, why political battles have always been so vicious.  Like a gang of thieves fighting one another over how to divide up the stolen goods, so the political parties engage in verbal warfare over how to spend the dollars they have forcibly extracted from the taxpayers.
In 1835 Alexis de Tocqueville warned the citizens of the United States that their constitutional form of government would come to an abrupt end the moment the citizen voters realized they could vote money to themselves from the public treasury.  He predicted that governmental restrain would be abandoned as the citizens rushed to vote themselves a right to expropriate the property of their neighbors and give it to themselves under the guise of an entitlement.  His predictions have proven to be one hundred percent correct and we now live in the Socialist Democracy of America.  In the SDA, voting is an act of war against ones neighbor.  Those who make the voluntary decision to lay down their arms (not vote) are plundered by both sides (Democrats and Republicans).  Meanwhile, both sides savagely attack each other in an attempt to control the public purse.  He who accrues the most votes earns the right to plunder his neighbor for a couple of years.
Mr. Karney's point that political discourse has not changed for a long time is proven to be true when he quotes from William Jennings Bryan, speaking before the Democratic National Convention in 1896.  Bryan says, "There are two ideas of government.  There are those who believe that if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below.  The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests upon them."  Wow!  There is so much wrong with that quotation I find it hard to know where to start the vitriolic criticism.
Karney's view that political discourse has not changed in over a hundred years is dramatically illustrated in this quote from Bryan.  What Bryan said could easily be said on the floor of the DNC this week and nobody would bat an eye.  The "trickle down" theory that Bryan describes is a fairly precise description of Reaganomics.  The "trickle up" theory that Bryan describes is a fairly precise description of Obamaomics.  Things have not changed one bit in over one hundred years.  However, as it was the case in 1896, whether by accident, ignorance or choice, the Democrats are wrong on this point. 
Wealth is not created by those who work for others.  Wealth is created by those who start businesses that provide goods and services that consumers purchase.  As those businesses expand, the owners of those businesses hire people to work for them.  The workers are not creating wealth.  The wealth is being created by the entrepreneurial activities of the business owners.  That is an inescapable, eternally true economic fact.  It is therefore impossible for the middle class to be the primary source of wealth creation that then, magically, finds its way into the hands of the upper class.  Note the thinly veiled Marxism in Bryan's comment.  When he describes the upper class as "resting upon" the middle class, he repeats the same tired, old refrain of Marxist class exploitation.  He could not be more wrong. 
Despite Bryan's use of pejorative terminology to describe the economic "trickle down" (he calls it "leak through") effect, it is still the case that those who work for others are quite obviously dependent upon those who provide them the work.  It is also quite obvious that those who employ people make more money than those individuals they employ.  To deny this simple truth takes a gargantuan effort of economic reality denial.  Money does flow down from those who own the businesses to those who work for the businesses.  The money that flows down is called "wages".  I believe we have all heard about them, haven't we?  That being the case, credit must be put where credit is due.  The business owners deserve the credit for wealth creation in this land.  Those who are employed by the business owners do not deserve the credit for wealth creation in this land.  If not for the business owners, there would be no wealth in this land.  That is plain and simple economic truth.
Most disturbing in the quote from Bryan is not the fact that it illustrates that Republican/Democratic politcal warfare has been going on for a long time.  What is most disturbing is the fact that as early as 1896 it was already a foregone conclusion in the minds of politicians and most voters that government is the source of prosperity.  Look at the quotation again.  In both instances it is government legislation that brings about prosperity.  In one case the evil Republicans legislate that their rich buddies get even more rich.  In the other case good Democrats legislate that hard working middle class folks earn a living wage and everyone is made better off as a result of their efforts.  In both cases wealth creation and prosperity are assumed to be the result of government legislation!  That is astoundingly stupid and astoundingly wrong.  The quotation from Bryan serves as a dramatic illustration that men must worship something and, sadly, in the SDA, many men have made the decision to worship the all powerful, beneficent State.  Praised be its name.  Amen.

Monday, September 3, 2012

Let's Celebrate Buffet Day Rather Than Labor Day

I was shocked and appalled when I ventured out for breakfast this morning and discovered that my neighborhood had been inundated with American flags.  What possible reason, I thought to myself, could there be for such an overwhelming display?  Had we been invaded by Canada?  Mexico?  Had Obama issued an Executive Order mandating flag displays?  Had Obama decided to protect national security and invade Puerto Rico?  Then it occurred to me.  Today is Labor Day.  This is the day established by an old socialist president (FDR) to celebrate government employees.  I noticed that one flag was flying half-mast.  I wondered what that was for.  My best guess is it means that we are to recognize the death of labor.  Over the years I have had the misfortune of watching a lot of government employees at "work" and that seems like a good observation to me.  Still, everything about Labor Day is wrong.  Allow me to explain.
First, employees are not a class of citizens that should be celebrated.  Employees just do the work assigned to them by somebody else.  Although working as a laborer is an honorable career, it is not something that should be celebrated.  I have worked as a laborer and nothing I ever did was worthy of a national holiday to recognize it or me.  On the other hand, if not for the creative actions of entrepreneurs, there would be no jobs for laborers like me to perform.  If somebody is going to be celebrated, it should be the entrepreneurs. They are the ones who come up with the new ideas about things that can be made for the consumers.  They are the ones who come up with new ways to serve the public.  They are the real difference makers in the world.  They are the ones who give us what we want.  Laborers are just a cog in the wheel.  It seems to me that if we are going to have a day to celebrate the economic process, we should celebrate the inventor of the wheel rather than the wheel itself. 
Second, Labor Day has been molded into a holiday for unionized workers.  It is not really a celebration of the non-union worker that is in mind on Labor Day.  Unionized workers despise non-union workers.  That is probably an understatement. I don't know if I can come up a word that is strong enough to describe the way unionized labor thinks about non-union, or free, labor. Unionized labor considers non-unionized labor to be more of an enemy than management. "Scabs" they call them.  So let's get rid of any idea that might be in our minds that Labor Day is to celebrate the laborers of the land.  It isn't.   It is a celebration of the unionized worker that the day has in mind and, since the great majority of unionized workers today are workers for the government, it is really a day to celebrate government employees.   I think we all know that it is only in the highly cloistered realm of government jobs that unions still proliferate.  Given that the gross expansion of government, and government jobs, is harmful to the economy and the common man, I hardly see why it should be celebrated with a national holiday.
Third, what does the concept of labor, or in this case, unionized government labor, have to do with all the American flags I saw flying on my block?  I just don't get the connection.  Is the argument being made that it is a patriotic thing to believe in unions?  Am I being told I need to support government jobs in order to be a true patriot?  Am I less of a patriot if I believe in reducing the size of government and, thereby, reducing government labor?  Are union members claiming that they have a stronger claim to being patriotic citizens than I do?  If so, other than the fact that they are connected to the government, what makes them think they are more patriotic than me?  Now I think I am offended.  I need to stop thinking about this before I become personally offended.
If we are going to celebrate the economic process, and labor is a part of the economic process, we should celebrate those who create economic wealth.  In a free market the person who creates the most economic wealth is the one who is rewarded with the most income.  It is fair to assert that, provided there is no government hegemony (a very big provision), the wealthiest person in the land is the best servant of the people.  Warren Buffet is the second most wealthy person in the land and, therefore, the second best servant of the people.  I therefore recommend we change Labor Day into Buffet Day.  I have several very good reasons for this proposal.
First, Buffet is getting old (82) and will probably not be around much longer.  A national holiday will be a good way to remember him after he is gone.  Second, as the second wealthiest person in the Socialist Democracy of America, he has served the needs of more SDA citizens than everyone except Bill Gates. Third, as far as I am aware, Buffet has not attained any of his wealth by utilizing the apparatus of government coercion.  Many lawyers, doctors and other wrongly respected members of the economic community have attained their high degrees of wealth because they operate withing the privileged confines of government protected cartels.  Their "creative" efforts should never be recognized.  They should be treated as the government protected abusers of the populace that they are.  Buffet, on the other hand, is a true servant of the people and he has been richly rewarded for his activities.
There is another very important reason why Labor Day should be changed to Buffet Day.  Warren Buffet, despite his enormous success, is a socialist.  He fits in well with the SDA.  He believes that the government should increase the estate tax so that essentially no income or wealth can be transferred between the generations.  He believes that the inter-generational transfer of wealth is evil and needs to be prevented by government action.  He believes that most of what a man makes during his life should be taken by the government when he dies.  Now I have no problem if Warren wants to write his Last Will and Testament in such a way that he gives his vast wealth to the government when he dies.  He just should not be advocating a government law that would require me to do so as well.
The last time I checked Mr. Buffet was worth ~$47 billion.  The 2012 Federal Budget comes to $6.3 trillion.  Divide that figure by 365 days and you get roughly $17 billion per day.  Buffet's contribution to federal spending would be gone in less than three days.  Heh, that is nothing to sneeze at.  I would be willing to honor him with a national holiday if he would be willing to pay all of the expenses of the federal government for one three day period.  So, let's change Labor Day into Buffet Day.  Despite the fact he is a socialist, Mr. Buffet seems to be a genuinely good guy.  He likes to play bridge with Bill Gates.  He gives a lot of money away.  I would be a lot more willing to fire up my barbecue once per year to honor him that I am to honor some government employees who have allowed their work ethic to die.  Join the movement to abolish Labor Day and enshrine Buffet Day!