Return to Sherwood Forest...

For those long time readers, you’ll remember back in October I penned an entry titled Obama of Sherwood Forest talking about why socialism is the absolute wrong path for any society that values hard work and achievement. I’m the first to agree on the need for social programs to help those less fortunate get back on their feet but at what point do we (the responsible parties) say “Enough is enough!”

The economy's in the toilet…no eloquent way to state the obvious. The unbridled greed of the past few years has caught up with our society and now we pay the price…or do we? Depends on who you are…

President Obama has unveiled a new plan to help people keep their homes provided they weren’t speculators or people who borrowed amounts they could never repay. To that point, it seems the administration is at odds based on the following quote from Ben Bernanke:

Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it's important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed.

"I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed."

I’m horribly disturbed by the above statement as it basically says, “You were irresponsible but the taxpayers are going to save you and then make sure those evil banks/mortgage companies don’t do this to you or some other unsuspecting person ever again”. Where are the consequences for the people who were irresponsible? They will be rewarded with a mandatory rate reduction (as well as principle reduction) while every responsible homeowner will bear the burden of financing this program as will their children and possibly their children. The lesson to be learned is hard work and fiscal responsibility is the surest way to ensure you have nothing…except the bill for saving the irresponsible!

The common argument I hear about this stance is “People need a place to live so stopping foreclosures will ensure people aren’t on the street”. This position has little merit as people who are foreclosed on have the option of getting an apartment they can afford. It’s not their $800K house but it’s an affordable roof over their head. What if the person is unemployed and being foreclosed on? These are the situations where people do need help but not in the form of modifying their loan…they have NO money to pay the loan even if the terms are adjusted. Somewhere along the line, people began to believe homeownership was a right and not a privilege. It’s most certainly a privilege and should be reserved for those who’ve sacrificed, saved and live well within their means…not those who simply said “I deserve this” with no means to repay the loan.

There are plenty of bad guys in the economic meltdown so not letting bank/mortgage companies off the hook but if people had not signed up for loans they couldn’t afford then the banks wouldn’t have been able to leverage this enormous mountain of consumer debt in the form of CDO’s and CDS’. Banks were all too happy to write the loans with little more than a scrap of paper and wink to people who never had a chance of ever being able to afford the payments on the loan once the rates adjusted. The greed of the nation drove a short-term gain in the market at the expense of a generation’s wealth.

I’m also to blame for the economic meltdown…as are you if you’ve ever invested any money in the market. As an investor, my share of the blame comes in the form of the ever-increasing demands for greater profits from the corporations. The thought of continuous growth is a fallacy as all things have finite potential and corporate profits are not exempt. Every quarter the company has to show a “gain” or the stock is deemed stagnant and the price begins to fall (almost immediately). The only option for the corporation is to create new revenue streams which usually come with a trade-off in risk exposure. The old system of dividends for long-term, consistent management has been replaced by the need to see immediate, double digit returns by close of business which isn’t sustainable…a lesson we seem to forget every time the market takes us to school.

So what’s left for those of us who played by the rules? An interest rate reduction? Maybe a principle reduction? Not likely to happen as there is no incentive to help us because we’ll continue to pay and pay and pay holding onto the archaic concept of personal responsibility.

On the topic of responsibility, I’m also disturbed by the comment:

Abess demonstrates the kind of "responsibility" the president has called for from high-profile financial CEOs, the White House said. (Click here for the entire article).

The ‘responsibility’ mentioned in the article is actually a redistribution of wealth from the former CEO to people who worked for the company. Taken in the context of the recent infusion of government capital into financial institutions, the seeds are being planted for long-term government intervention in our financial systems with rewards being distributed from the company to the poor….at the expense of the taxpayer.

In this new, modern day Sherwood Forest, those who’ve played by the rules will get to see redistribution…only this time it will be the debt of the irresponsible redistributed to the responsible. Makes emigration to a small Caribbean nation look better every day!

Moment in History...

Last night's election ushered in a new chapter of American history at a time when people are clamoring for positive change and new direction. This need for change wasn't limited to just the highest office as we witnessed a historic transformation in my home state (NC) as Democrats won handily in almost all races. Elizabeth Dole was defeated by Kay Hagan as well as Pat McCrory being defeated by Bev Perdue. These are two notable races as one represents the lowest point in NC politics (Elizabeth Dole's ad declaring that Kay Hagan doesn't believe in God) and a new first with Bev Purdue becoming the first female governor of NC. The change was also felt at the local level as numerous offices once dominated by Republicans shifted to Democrats. It was a historic evening but now the real work begins...rebuilding public trust in our system, fixing our economy, fixing our immigration system, etc. These items have to be addressed and resolved or the promise of change becomes the promise of same.

One almost certain aspect of NC is a Republican win for President by popular (and Electoral) vote. This election has NC as the ONLY non-declared state due to the closeness of popular vote. This would have been unheard of just four years ago! Although it makes no difference how the state goes in Electoral votes, it may prove to be another important moment in history!


Now that the election has been decided, it's time for everyone to come together and start getting things done!

You've been warned...

As part of my work, I receive various security bulletins usually dealing with threat assessments, natural disasters and other assorted disruptions to daily life. Today's notice was particularly striking for it's depth of insight (hmmmm...) and also it's subtle undercurrent that large crowds of Obama supporters might be prone to violence in the Chicago area. Read the bulletin for yourself:

United States - U.S. to Hold Presidential Elections:

Today, Nov. 4, the U.S. is holding nationwide elections. Due to the historic and emotionally charged nature of the vote, authorities are preparing for possible localized security disturbances across the country in conjunction with potential post-election celebrations or protests. Serious violence appears unlikely but local and federal law enforcement agencies are tightening security in potential trouble spots as a precaution. These sites include several large metropolitan areas that have experienced unruly behavior and security problems in association with past sporting events, political rallies, court rulings and other tense events.

Rally in Chicago Tonight - Grant Park in downtown Chicago will host a large rally this evening. Authorities expect more than 70,000 people to gather in Hutchinson Field at the south end of the park for a ticketed event, while they anticipate that thousands of other participants will gather around the park. As many as 1 million people could attend the event. Security will be extremely tight, and police will block entry to the Hutchinson Field and Buckingham Fountain areas to anyone without a ticket. Expect severe travel disruptions in downtown Chicago. Heightened security measures are expected to be in place around the venue. As the rally has the potential to turn violent, particularly if Obama does not win, it is best to avoid all demonstration areas.

Maybe I'm reading too much into this but the most anger I've seen this election has been at Republican rallies! The Obama rallies have been about coming together and making a positive change with no mention or threat of anarchy and violence if he isn't elected. This bulletin makes inferences that sound stereotypical and potentially racist. Is the message that a "diverse" crowd is more likely to riot if they don't get their way as opposed to the predominantly white Republican audience? Maybe I'm making something out of nothing but the glaring lack of reference to the Republican rally raises my suspicions.

11/5/2008 Update: No scenes of violence amid the ocean of people gathered at Grant Park...black, white, hispanic, young, old...just people peacefully embracing a moment in American history. Last night's gathering was very different than the violent protests in Grant Park in 1968 but times, attitudes and opinions have truly changed in some respects...but, unfortunately, we are still short of the goal.

Get off the fence…then get out of my yard!

The unthinkable has happened…I've left my “neutral” status in the political race and cast my vote! After a mile and a half walk to the polling station and a two hour wait, I registered and voted my conscious. I’d tried to vote twice earlier in the week but the lines were so long and I (mistakenly) thought they would be shorter on Halloween only to discover the lines were constant no matter the time or day. This election has brought out many new voters and the previously apathetic (myself included) because the stakes are so high and the future of our country depends on the outcome.

This election is about more than the presidency…it is about shaping the future of the Supreme Court which will have greater impact long-term than the next President. Essentially, the balance of power will shift through the next appointments to the courts so America is deciding now if they want greater or less restrictions on personal freedom. The sides are clearly defined and each has their own agenda which leaves those of us in the middle with an interesting dilemma…which of my rights am I willing to sacrifice to ensure that other rights are retained? It’s a serious choice but it’s also indicative of the lack of true choices in our current political theater.

One of my major complaints about the current two party system is it doesn’t offer enough alternatives for the moderates. The Democratic Party has moved to the extreme left while the Republican Party has been hi-jacked by the ultra-conservative, religious wing nuts leaving no middle ground for the moderate, common sense American. It’s this extreme division that opens the door to a third party I’d like to call the “Common Sense” party…a place where all the moderates could go and elect other moderates who are strong enough to vote their conscious and not purely down political lines.

A great example of a once possible Common Sense Party candidate is John McCain…he was NOT a favorite of the conservatives and many outright refused to endorse him because he dared to employ common sense in some of his views. In order to secure a base, he abandoned his views and adopted the ultra-right wing views to secure the nomination. He also chose Palin as an obvious attempt to placate this group and garner their support knowing full well she was a ridiculous choice and totally unqualified for the role. He sacrificed his credibility, integrity and ultimately his chance to become President because he chose the extreme side of his party’s politics.

I’m also aware that Barack represents the extreme left view of the Democratic Party so not giving him a free pass. He will, however, be much more likely to strike a compromising position than McCain would if elected as the Democratic Party has a large base that is moderate. The Republican Party has less room for moderates and this idea is reinforced with the talk that Palin is the perfect choice for 2012 if McCain fails to win on Tuesday.

Regardless of which candidate you support for office, it’s critical to get out and vote in this election as much more than the highest office is at stake. If the lines are long, don’t complain as two hours in line every four years is a small price to pay for the freedoms you and I every single day. So get off the fence and vote your conscious!

Obama of Sherwood Forest

After carefully avoiding this pitfall for the entire campaign, Obama finally said the word that all conservatives have been patiently waiting to interject into the campaign. Ladies and Gentlemen, let’s talk about socialism. As my friends know, I am a fairly moderate to left leaning person even though I maintain no political affiliations but have no tolerance for socialistic policy in our current society. Here’s why…

Socialism (on paper) is designed to ensure that everyone shares in the wealth and that we all enjoy a better standard of living. The major flaw is that it assumes ALL people will work equally hard to achieve their goals and that’s just not true. There will always be people who want to do nothing (i.e. Welfare “lifers”, guests on Jerry Springer, etc.) which means a portion of the money you worked so hard to earn will be used to carry the slackers who are content to receive a handout. As a “producer”, I have a serious problem with this scenario! I’m all for helping out people when they need a hand (short term only) but do NOT believe in redistributing the wealth as it punishes those who took initiative and achieved success. The next step after socialist policy is the introduction of Marxist ideology and we all know how well Communism has worked out for Russia and China.

I’ve long held the belief of equilibrium in most aspects of life and the economic arena is no different. Think of it like this, if you are killing yourself to advance only to see a large portion of your success taken from you to be given to those who choose to do nothing then how long are you really going to continue down your current path? Probably not too long (and if you do then I have a rock that needs to be moved to the top of a hill…) so you start to slide closer to the center because you produce less. You might say that’s OK because the center is still pretty good but don’t forget that all of the other successful people are doing the same so the center begins to fall. As more people “give up” the center goes even lower and lower. The end condition is a welfare state where no one has a desire to innovate or produce anything because anyone who produces will be taxed at an obscene rate to cover the spread for those who do nothing. At this point, no one works and our civilization collapses under the weight of our own socialistic ideology.

I don’t think the introduction of the word “Socialism” into the campaign will cause any disruption to the Obama machine as the momentum is way too strong. On that point, I don’t think the Republicans are offering anything better…only a different strategy with the same ends of screwing the middle class over and leaving us with the hangover from their spending party. Socialism isn’t the answer in a free society because people have free will so it’s time to look for better answers than the Robin Hood mentality of taking from the rich to give to the poor.

Esc