Category Archives: politics

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Is A Better Bubble Inflating the Stock Market?

Many trillions of dollars have been invested by the United States in the financial industry during the last 15 months.  And the pace of the bailout continues to increase.  A lot of real money has been put into the economy.  But it seems to have disappeared.

Except for maintaining the lifestyles of upper management, the financial industry has not done what it is supposed to do with their economic stimulus monies.  It has hoarded all of that money.  And why not?  When prices for everything is falling, stagnating cash is a good investment.  But moving money is what drives the financial industry.  Rest assured that those managers are brow-beating the few employees they have not yet laid off to find a place to invest the real money given to them by the treasury and Congress.

Now a trend spearheaded by US stock markets is forming in stock markets around the world.  The values of stock markets in the Untied States are experiencing the most spectacular rises in their history.  That would be an inviting investment, at least in the short term, for the big bailed out financial industry.

Imagine all of those trillions of dollars of bailout and stimulus money suddenly being invested in stock markets again.  The value of US markets alone would rise at least several trillion dollars.  Financial institutions are leading the charge.  There is no other place, except T-bills…, for them to invest their bailout money.  Could this rise in stock market values simply be another bubble?

Unlike the previous bubble, this rush for stocks is backed by the US Treasury’s bailout funds.  The previous economic bubble, spanning several industries, has been funded by what is known as ‘leveraged’ investments.  That basically means the borrowed money is invested in hopes of making that money back and then some more.  Often money has been borrowed from a source that borrowed money from a source that borrowed money from a source… you get the idea.  The financial industry is at the top of that pyramid.  They can invest at least 9 dollars for every dollar deposited, or invested…, in their institution.  Many, such as Lehman Bros., have leveraged their investment by more than 100 to 1!  Now these financial institutions have real government money to invest.  Now they won’t need to sell to satisfy a calling creditor.

The market’s current inflation is due to the mutual investment of the Treasury’s cash by financial institutions in each-other.  But that money will do the rest of the economy little good.  Manufacturers don’t have customers.  So  they won’t get loans.  Higher stock prices in times like these only help companies that are willing to sell their own stocks for capital.  And that does not help their stock’s price.  The only stable increase in stock prices will be with financial companies that are investing in each-other.

Those of us who cannot afford to take advantage of this new bubble must be content to cheer on the financial superstars that can until this bubble pops too.  The government is going to be compelled to do it to satisfy fearful politicians.  Growing resentment combined with unemployment and a poor shopping experience is stirring up the voters.  Eventually the government is going to take back the bailout and stimulus money.  If that happens before the rest of the economy grows enough to support big financial companies again, then the bubble pops.

(Imagine the insider trading knowledge that federal politicians can peddle in that situation.  They are going to make a killing!)

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Democrats Eager To Rekindle Republican Revolution

A revolutionary change is needed to fix our broken democracy.  But don’t expect either of the two major political parties to provide that change.  The Republicans really protect the rich and powerful’s freedom to dominate everyone else.  (They are probably fans of the Marquis de Sade).  Their record while they had control of our government here in the United States has demonstrated that.  Yet the Democrats seem to have forgotten what inspired that so called Republican Revolution.

Can you remember why Newt Gingrich was able to rally the nation behind the Republican Party?  The answer is that people were tired of the secret deal making and favortism of the Democratic Party’s ‘good-ol-boy’ network.  Their way of spending federal money has been based on a racket administered by senior lawmakers.  Democrats have rewarded junior lawmakers for passing special interest legislation that benefits senior lawmaker’s campaign contributors.  In return for their cooperation, junior lawmakers would be given ‘pork’.  That ‘pork’ is essentially a bribe disguised as funding for local projects and public services.  The Republican Revolution’s ‘Contract With America’ has promised to stop that kind of corruption.

Unfortunately the Republicans are at least as intoxicated by power as the Democrats.  During the time they controlled our government, they have created a ‘Pay to Play’ system for lobbyists.  That system allowed powerful special interests a way to bypass the formal leadership structure of Congress and go directly to the Republican’s rank and file members of Congress.  (This system became known in the media as ‘K-Street’, for the name of the street where the most influential lobbyists kept their offices.)  Rather than reducing corrupting influences over Congress, the Republican Pary hid under the bedsheets with them.

Now, instead of a revolution, the wheel of progress has rolled backwards.  This is not referring to the election of Barack Obama.  This is about Congress.  The Democrats have taken back their control.  And they are on a mission to save America’s economy.  But like the Republican Party’s use of the ‘War On Terror’ as an excuse to help the clients of influencial lobbyists hoard wealth, the Democrats are using the resulting financial crisis as an excuse to create a pork barrel bonanza.

The very smug faces on leading Senate Democrats during passage of the most recent bailout package are suspicious.  Those are the looks of people enjoying a feast; they are not sacrificing.  And they know that despite America’s overwhelming disgust with Congress, voters usually support their local representatives.  So, they will probably not be held accountable for their contribution to this financial fiasco.  President Barack Obama will probably take the blame for Congressional dysfunction.  And then Congress is going to welcome back a member of their inner circle.

If history is an indicator of what the future will bring, then we cannot depend on either of the two dominant political parties to correct the way our nation’s government is changing.  The Great Depression and more recent economic downturns demonstrat that both Democrats and Republicans allow greedy market manipulators to undermine our economy.  And we know that both Republicans and Democrats eagerly use government to create for themselves influence pedeling rackets.  The Democratic and Republican Parties have a proven recornd of corruption.

We, that is us individual voters, don’t need to wonder about who the Republican Party or the Democratic Party really represent.  It is obvious that both Political Parties represent very elite groups of very wealthy people.  And those groups have more wealth invested in this rut we are in to leave it behind.  Only a fool believes that wealthy people represent the best interests of regular Americans.  They care about their wealth.  For a full revolution of the wheel of progress, the dominant political parties need to be replaced.

Replace them by voting only for candidates from established political parties that are not one of the two dominant parties.  Do this for each election.  After only six years, there won’t be a Republican or Democrat left in office.  And after only four years, a new decentralized political establishent will begin to run our country as our founders intended.

Oh… Please bless America again.

Obama Improves Hillary Clinton’s Prospects

If you are one of the women bitter about Barack Obama being the next President of the USA, then here is some comforting news for you.  Hillary may be President in eight years.

If America can elect Barack Obama to be the President, then it certainly can elect a woman to be one too.  Discrimination against women in American society is not more severe than it is against African Americans.  Women are the majority of the electorate.  Male African Americans don’t have that advantage.  But an African American male has competed directly with a white female and has won the race for President.  Discrimination against women cannot be why that happened.

But American culture can be blamed for having an important role in Hillary Clinton’s defeat this year.  Traditionally in America women have enjoyed being considered the kinder gender.  Even today women are expected to be more kind and nurturing than men.  But it is difficult to imagine nice people surviving in the mean and dirty world of traditional American politics.  Voters have been skeptical of candidates that may not be mean enough.

There are at least two ways to help women and nice people in general overcome the electorate’s doubts about kind people being effective in politics.  Either kind people must give up being nice and become as mean and dirty as the men who have traditionally been political leaders in America.  Or people’s perception of American politics as a domain only for the mean must change.

Americans seem to be losing their tolerance for mean politicians.  That is why Barack Obama’s campaign theme about ‘Change’ and ‘Hope’ has been so important for his victory and Hillary Clinton’s defeat.  He concentrated on giving voters the impression that he is a peaceful, clever, and thoughtful candidate.  That is a stark contrast with the macho rhetoric of Republicans.  Barack Obama portrays himself as a ‘nice’ guy who is capable of making government nice too.

Hillary Clinton’s primary campaign has concentrated on proving to voters that she can be brutal enough to fight fire with fire.  She portrays herself as ‘experienced’ with politics as usual.  She would have given the Republicans a strong dose of their own medicine.  Americans are not hoping for that.

Fortunately for Hillary Clinton, Barack Obama has offered her an opportunity to redeem herself by becoming Secretary of State.  She can remain in the national spotlight while her persona is transformed for the better.  Rather than merely being just another ambitious mean person, Hillary Clinton can show that she is someone who can really help make the world a better place for Americans.

Barack Obama has given many people the hope that he can transform American politics from being a mean process into one that welcomes kind people.  If that happens, then women and other people associated with kindness may have a better opportunity to succeed in politics than they could have hoped for otherwise.  And Barack Obama may helped Hillary Clinton become a better champion.

Bryant Arms