AAAAGH!
I was just flipp'n through the channels and I came across a Glen Beck rerun on CNN headline news!?!
I generally stop in when I surf past Glen's show, because I enjoy watching crazy people talk about interesting stuff, but I couldn't take it, a CNN news show re-run... And even worse, It was Glen whining about Romney dropping out. His gripe was that Romney was the only financial genius running for the President, and the only hope for the country. Oh what to do?
Well Glen, you've admitted to not being an economist on other shows and I have to agree with you, your no economist. There are plenty of economics genius's working for either camp, I know some of them personally. The cure for our economy's problem is not one of math or supply and demand, it's one of selling one of several unpleasant solutions to an American population that only wants good news.
With our current account balance dropping to record lows by last September, consumers taking advantage of an underrepresented increase in money supply through cheap loans with low buy-in thresholds we've been on an economic bender for several years. Economics is a lot like drinking, you can indulge a little and take little corrections along the way (the french say it its good for you) or you can have a real blow out and have a big hang over the next day. With any luck, while your blissfully intoxicated you don't break any laws and get picked up by the police and screw up the rest of your life. To get back to the analogy, the U.S. have been on a binge for several years with all of our favorite trading buddies and it's time to pay our tab.
The bottom line is that the solution to our economic problems are not hard to figure out, but they take some real political courage to implement. When the next administration chooses between holding our population accountable, or punishing our allies for irresponsibly throwing money at us while we were on our binge, someone is not going to be happy. Ideally there will be a compromise somewhere in there where neither group gets rolled in the alley, our economy needs both groups to be happy.
The next president has to be good at getting children to take their cod liver oil before bedtime. That skill will come in handy when he has to talk U.S. consumers into getting used to tighter money supply (less real money in their pockets), and trading partners used to a weaker dollar (they own so many dollars a weak dollar is last on their Christmas list). Its going to be a tough sell both ways.
We need a skilled politician to sell some hard choices, Romney couldn't even sell himself... what chances would he have had.
For another interesting rant on the sour grapes some in the republican party check out my friend KT Cat.
Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts
Saturday, February 09, 2008
Friday, February 08, 2008
I'm committed
I have been on the fence in this political race until last night when my kids asked me who I would support in the upcoming elections. I took account of the candidates positions and records and realized that the only candidate that I could support was John McCain. Just for fun (and so I can remember for next time), I'll go over my thought process.
First, National Security: If we pull out of Iraq before we have a chance to put the pieces back together, we will be facing a much more dire security risk from the Middle East than if we bail out because it has turned uncomfortable, and unpopular. It will take political courage to stick with Iraq until it is self sustaining (my estimate... 2 to 10 years).
The Economy: I have been playing with a couple of economic models over the past few months and if they are as comprehensive as they are advertised to be, the Medicare, Medicaid, and Social Security situation will become a real problem within the next ten years. If you don't believe me, just look at the growth projections from the Congressional Budget Office. We can't afford another large entitlement program that is going to increase exponentially as baby boomers retire.
Taxes: Targeted tax cuts act as incentives, to expand business. If you lower the burden on business they will respond by growing, more importantly growing businesses make more jobs than shrinking business. If you want to shrink business you tax it. The AMT is a very regressive tax, it is basically a success penalty, do we really want to dis-incentivize success?
Education: The democrats want to improve education, which I support, unfortunately, they want to increase taxs and re-allocate to tuition, which will increase the supply for educated adults but will decrease the demand for them. I personnally think that tax incentives could be created for companies to invest in the educational process, after all they are going to be the ultimate benefactor of an upgraded workforce.
Immigration: Immigration is one of the toughest problems we face today! Huge national security problem, but it is also a huge demographic and economic issue as well.
Developed countries have all had problems with a lower birthrate than required to maintain a vibrant workforce. Our illegal immigration is filling a vacuum caused by our low birth rates and hot economy; if we were to eliminate the illegal workforce our economy would have millions more jobs than workers. In that situation the only two options are to shrink our economy, or to export jobs to other countries; none of the options would be popular. Our illegal immigration problem has made our demographic crush much less painful that of Japan, Europe, or Russia who are going through a much more severe demographic problem than we are. China is going to see a real problem when their one child policy hits their workforce in 10-20 years.
Rule of Law: Rule of Law is the counterargument to the demographic/economic argument, how can a nation of laws (rule-of-law is to governments what opposable thumbs are to mammals) reward a large population of citizens for breaking the law? I don't believe you can! To make matters worse, amnesty would not fix the demographic/economic problem that caused the illegal behavior to begin with. The illegal immigration problem is tough, and I'm not sure anyone has it figured out.
Goning back to McCain, he demonstrates the courage and conviction that I think will make him a very good President. While he and I don't completely align on the issues, his principled approach to policy gives me some comfort that he will not stray far from the positions he has articulated during his campaign, and I can support that.
First, National Security: If we pull out of Iraq before we have a chance to put the pieces back together, we will be facing a much more dire security risk from the Middle East than if we bail out because it has turned uncomfortable, and unpopular. It will take political courage to stick with Iraq until it is self sustaining (my estimate... 2 to 10 years).
The Economy: I have been playing with a couple of economic models over the past few months and if they are as comprehensive as they are advertised to be, the Medicare, Medicaid, and Social Security situation will become a real problem within the next ten years. If you don't believe me, just look at the growth projections from the Congressional Budget Office. We can't afford another large entitlement program that is going to increase exponentially as baby boomers retire.
Taxes: Targeted tax cuts act as incentives, to expand business. If you lower the burden on business they will respond by growing, more importantly growing businesses make more jobs than shrinking business. If you want to shrink business you tax it. The AMT is a very regressive tax, it is basically a success penalty, do we really want to dis-incentivize success?
Education: The democrats want to improve education, which I support, unfortunately, they want to increase taxs and re-allocate to tuition, which will increase the supply for educated adults but will decrease the demand for them. I personnally think that tax incentives could be created for companies to invest in the educational process, after all they are going to be the ultimate benefactor of an upgraded workforce.
Immigration: Immigration is one of the toughest problems we face today! Huge national security problem, but it is also a huge demographic and economic issue as well.
Developed countries have all had problems with a lower birthrate than required to maintain a vibrant workforce. Our illegal immigration is filling a vacuum caused by our low birth rates and hot economy; if we were to eliminate the illegal workforce our economy would have millions more jobs than workers. In that situation the only two options are to shrink our economy, or to export jobs to other countries; none of the options would be popular. Our illegal immigration problem has made our demographic crush much less painful that of Japan, Europe, or Russia who are going through a much more severe demographic problem than we are. China is going to see a real problem when their one child policy hits their workforce in 10-20 years.
Rule of Law: Rule of Law is the counterargument to the demographic/economic argument, how can a nation of laws (rule-of-law is to governments what opposable thumbs are to mammals) reward a large population of citizens for breaking the law? I don't believe you can! To make matters worse, amnesty would not fix the demographic/economic problem that caused the illegal behavior to begin with. The illegal immigration problem is tough, and I'm not sure anyone has it figured out.
Goning back to McCain, he demonstrates the courage and conviction that I think will make him a very good President. While he and I don't completely align on the issues, his principled approach to policy gives me some comfort that he will not stray far from the positions he has articulated during his campaign, and I can support that.
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