Milton Friedman educates Phil Donahue

Frankly, Phil Donahue’s lack of understanding of human nature makes me sick.  Unfortunately, most of the whiny, Pollyannaesque anti-American left, including 90% of Hollywood, and most media feel the same way as Donahue expresses in this short clip…

Thankfully, there are thinkers like Friedman who bring us back to reality.

Wisdom About Our Recession

After reviewing several books on our current recession, I discovered one that is spot on: "Contagion" by John R. Talbott publish in January 2009.

Mr. Talbott wrote three other books of note where his predictions were accurate at least a year before the events he predicted actually occurred:

"The Coming Crash in the Housing Market" - 10 Things You Can Do Now to Protect Your Most Valuable Investment: April 2003

"Sell Now" - The End of the Housing Bubble: January 2006

"Obamanomics" - How Bottom Up Economic Prosperity Will Replace Trickle Down Economics: July 2008

I don't concur with several of his philosophies and opinions, namely, that global warming is man-made and we can do something about it, we are wasting money on the war on terror, and seeking pro-life candidates results in unqualified legislators.

But when he remains in his zone of expertise, as opposed to his zone of unsubstantiated opinion, what is says is very compelling.

Here are several eye-opening observations discussed in Contagion which I believe are accurate:

* A corrupt alliance between big business and congress in the form of lobbying and campaign contributions created the lack of regulation and oversight that led to our economic debacle. Only sweeping reform to prohibit this self-serving relationship will correct the legislative and regulatory lapses that result.

* This recession will deepen over the next 3 to 5 years (2011 to 2013) - best case - if our government institutes major reforms ending the influence of big business over congress. If not, our problems will become deeper and last indefinitely. He is doubtful reforms will occur.

* A "perfect storm"-like scenario has been created by a myriad of events and circumstances that in many ways will cause our current economic problems to be worse than those during the Great Depression. Among them are:

- The retiring "productive and investing" segment of our population who will consume social security assets while producing nothing and saving and investing less.
- The younger, more productive, cheaper cost-of-production nations such as India and especially China who will continue to out produce us.
- Excessive per capita consumption in the form of over-sized housing and other consumer items that we haven't paid for and can't pay for.
- Our lack of savings and investing compared to other nations.
- The vast, unregulated morass of derivative markets and credit default swaps that were trillion dollar Ponzi schemes.
- Expected continuing incestuous relationship between big business, special interests, congress, and the regulators.

He concludes that we are a nation of self-absorbed folk compared to a generation or two ago. In part he blames this situation on the growing income disparity between the owner/executive class and the worker class. Yes, I know, he is beginning to sound like a socialist here. But the data bear this out. Income for most workers has been flat relative to the gross domestic product over the last four decades or so while income for the owner/executives has sky-rocketed. It is true that only since the 60's did most families feel the need for women to work outside the home to "make ends meet", or to consume what the ads convinced us we had to consume. In any event, he argues, we have felt less secure financially and less relevant psychologically to the point that we have drawn ourselves inward, refusing to be as altruistic as we were a few decades earlier. We have become more selfish, and obviously, less moral.

A word about Ayn Rand and "enlightened self interest." It doesn't work yet. We humans have not reached the required state of perfection needed for this concept to to be put into practice. In the meantime, "Atlas Shrugs" thinking only results in greed, corruption, screwed up government, and a screwed up economy.

A couple of other books on this topic I considered but declined to purchase were these:

"Meltdown": A Free Market Look at Why the Stock Market Collapsed, etc. by Thomas E. Woods, Jr. and Ron Paul. This is the libertarian perspective. This is the perspective that too much government interference was the cause of the meltdown. I don't buy it and I didn't buy it.

"The Great Depression Ahead": How to Prosper in the Crash Following the Greatest Boom in History by Harry S. Dent - January 2009. This book sounded promising until I learned that in 2005 Mr. Dent wrote "The Next Great Bubble Boom: How to Profit from the Greatest Boom in History: 2006-2010." His timing was way off with this earlier book. I couldn't trust his new one.

Government: Corporate America's Scapegoat

A recently published book "Meltdown: A Free Market Look at Why the Stock Market Collapsed, The Economy Tanked, and Government Bailout Will Make Things Worse" by Thomas Woods claims the following:

"...the current crisis was caused not by the free market but by the government's intervention in the market."

Having been professionally involved in local government for over 30 years, I claim that the current crisis was caused by corporate America's intervention in government.

The hierarchy of government, whether it be the City Council or Federal Legislature, the Mayor or the President, the City Manager or the Chief of Staff typically get their jobs by way of the most influential powers within their particular jurisdiction, whether it be city or nation. They are all influenced by or beholden to those who they perceive brought them into power and sustain their power.

It is no secret that in this nation, corporate America is America. Corporate America has the resources to do the lobbying, the expertise to critique and redraft proposed legislation, the influence to get its' way. And "its' way" is not always best for America as the current state of affairs starkly and painfully reveal.

The review of "Meltdown" goes further, claiming "busy-body bureaucrats [were allowed] to pull the strings on our financial sectors and the value of the very money we use." It is more accurate to claim that "busy-body" corporate interest lobbyists "pulled the strings" of the bureaucrats to craft policies that favored their greedy and loose business practices. It is very likely that the so-called "busy-body" bureaucrats did not always want to go along with the string pulling and policy manipulation of corporate interests. These bureaucrats do have bosses who are typically politically motivated or in various ways influenced or coerced to achieve certain policy objectives the "bureaucrats" did not believe best.

So, with the combination of corporate lobbyists "advising" the bureaucrats and the bureacrats bosses reinforcing the "advice" of the corporate lobbyists, what we get is the preferred corporate agenda translated into public policy via our political process. The bureaucrats are merely pawns.

Scapegoating the "bureaucrats" is not the answer. Strengthening public disclosure, doing a better job at balancing public interests and corporate influence in government (now that's a challenge!), and looking past the hype promoted by corporate interests will give better results.

Wall Street: Greed is the Motivating Factor

Wall Street is whining already. But I have to defend Obama on this one. Companies who participate in the bailout (the bailout wasn't forced on them - they begged for it) should not allow their leaders the accustomed compensation.

But, Oppenheimer & Co. analyst Meredith Whitney argues on behalf of rip-off salaries, “No one goes into Wall Street to save the world,” Whitney said today in an interview on Bloomberg Television. “Compensation is the motivating factor.”

Yeah, that's right, Whitney, compensation = greed IS the motivating factor.

The salary caps Obama is talking about are a mere $500,000 per year. Oh, poor deprived money sucking corporate America, you will be deprived of your $2,000,000 salary plus benefits for your crappy performance. Gosh, you didn't "save the world." You not only didn't save the world, you screwed up the world while screwing up your company. And you want to be compensated how much? And obviously most of the analysts on Wall Street are in bed with their greed-hound buddies.

Jealous at their wealth? No, just pissed at the irony and outrageousness of their unbridled greed.

More appropriate would be for remaining corporate execs whose firms receive the government dole to give back last years compensation to the federal government AND agree to limit next years' to $100,000 for every 10 per cent of the taxpayer dole that isn't paid back. If nothing is paid back, they get nothing. If 10% is paid back, they get $100,000, of 60% is paid back, they get $600,000, etc.

I like it.

500-Year Flood every 50 years - Isn't It Strange?

Ask almost any civil engineer why 10-year rain events seem to occur every 3 years; why 50-year rain events seem to occur every 10 years; why 100-year rain events seem to occur every 20 years and they will tell you something that makes absolutely no sense.

Isn't it strange that June's "500-year rain event" in the midwest occurs every 50 years or so? And levees designed for a 100-year storm seem to get breached every 20 years?

Could it be that the same civil engineering mindset that designs the levees also defines and establishes the flood zone categories for FEMA?

Enough of a sense of [false] security is established to lead the trusting souls who buy property to declare: "Hey, flooding over here won't occur but once in 100 years! Over there flooding won't occur but once in 500 years. Great - we don't need to get flood insurance." What special interest gains by this scenario?

Something is wrong with this picture. The only thing that makes sense to me is that there is a blatant conflict of interest when the engineers who establish the flood zones are the same ones who design the levees. Obviously this combination does not work. And who established and administers this system? FEMA. What special interest group likely controls this aspect of FEMA oversight? Civil engineers.

When we blame government for its failures, look to the private sector special interest group that often controls and manipulates that "oversight". Oh, and of course, the realtors, developers, contractors, bankers and many others who profit by the development and sale of land also lend their special interest influence on government to make sure "evil and oppressive" government standards do not interfere with their business practices and bottom line.

A Spirit of "No Can Do"

China. This is rough terrain, okay. And they didn't have tractors or bulldozers. They did it with sweat and blood. Oh and the weather, not blistering hot but bone chillingly cold (high winds and heavy snow). And the length: 3,946 miles. Built during the 14th century. They built this wall for defensive purposes, and you know what? IT WORKED!!

.

Contrast the United States. The US/Mexico border is only about 1,400 miles long. We need to build a wall for "defensive" purposes, too. And you know what? IT WILL WORK. We won't keep everyone out, but we will stop the great majority. Let's say 10% make it over. 100,000 is a lot better than 1 million. But we hear excuses: It won't keep everyone out so don't do it, they say. From our President and from our Senate, both Republicans and Democrats. I'm surprised we have the political will to get up in the morning. What is driving our political stupor? Oh, I remember. Greed!