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Friday, July 30, 2010
Movie review - SALT
While I enjoyed it, there's no dispute that much was just plain implausible. And I'm not talking about the chase and fight scenes, I'm talking about plot holes and inconsistencies. Let's start with the scene where the Russian 'defector' comes in claiming that Jolie's character is a Russian mole who is going to kill the President of Russia. But it turns out he isn't a defector, at least if defectors aren't guys who attack and kill two guards. Why did the Russian come in in the first place? He couldn't have known he would be able to get away. Couldn't he have simply made a phone call to the CIA? Furthermore, since it turns out that Jolie's character is in fact not only a Russian sleeper but also controlled by the supposed defector, who in turn is very much not a defector, what was the point of him ratting her out? If her assignment was to assassinate the Russian President, why draw attention to her? It isn't as if that was supposed to make it any easier for her to complete her assignment. If she wasn't the assassin, why make the CIA aware that there was a plot? Granted security would have been high to begin with, but wouldn't the bad guys have figured it would have been tightened in light of the threat? I did sort of get the bad guys kidnapping her husband, but only if she was supposed to be the assassin and they thought she was getting cold feet. Indeed, if she was the assassin, she probably wouldn't have waited until the last moment to show up in New York City, so the fact she was still hanging around her DC-area office was perhaps a sign that she was having cold feet. But here again, I come back to the bad guy ratting her out, how was that supposed to make her want to complete her assignment? Another hole: why is her CIA boss in so many places that you wouldn't expect him to be? For example, when the President is hustled into the White House bunker, why let the CIA guy come along? Does the Secret Service just makes things up along the way as to who gets into the bunker? The President, sure. Same for his military attache and some other Defense Department biggies. Maybe a relative or two. Secret Service agents by the boatload. But someone who works for the CIA? I'd think the access to the bunker was on a need-to-get-in basis, and I didn't see how he'd ever get an invite. And, of course, he needs to be there to complete his plan.
I certainly don't view it as 'unexpected' that the economic "Recovery loses speed as consumers turn cautious"...
No kidding, "Consumers spent less, companies slowed their restocking of shelves..." and "the reports raise doubts about whether employers will hire enough and consumers will spend enough to invigorate the economy". And with Obama and Congress not having a clue as to why consumers are spending less and companies are reluctant to hire, they're looking to push more stimulus spending in an attempt to get things moving in the right direction. Like any ideologue, they believe in what they're pushing and if it hasn't worked yet, the answer is invariably more of the same. They never, and I mean never, will question whether they were pushing the right medicine in the first place. But if a HUGE part of the reason the economy is stuck is the previous stimulus and regulatory changes, then doing more of the same will only ensure a continuation of the status quo. And while the Republicans are to be commended for trying to block additional stimulus spending, they are sort off with their reasons. They shouldn't be blocking this because of concerns about federal deficit and debt, at least not per se, but rather because the Democratic proposals won't do anything to boost people's confidence, they do nothing to give the public assurances there is a light at the end of the tunnel. In a way, the Democratic proposals are similar to Bernanke's promise to pump even more money into the economy to get it going, both scream out that things are bad and not getting better... and that is a lousy way to lift people's confidence about the future. Sure, it is important to take actions to keep things from getting worse, no patient wants to hear their health is continuing to deteriorate. But the patient (milking the health care analogy for all it's worth) isn't getting sicker, the patient is stable, albeit in lousy shape, so it's time for taking steps to make us better. Unfortunately, for all their supposed brains, Obama and the Democrats (and to an extent, the Republicans) just can't see that their proposals aren't going over very well. Ask anyone, other than a die-hard Obama supporter, there's pretty much next to no one who reads or hears about the various proposals and comes away more confident than when they woke up that day. And people who aren't more confident than the day before don't show up to work ready to hire new staff, they don't go out at lunch and spend money on things they didn't need to buy. Tuesday, July 27, 2010
I am sure some reporter will spin this as 'unexpected' news, but I was totally expecting today's report that consumer confidence fell in July.
What is there that would make people confident? Or, if not confident, just less worried than they were in June? I'm afraid there isn't much. If people are worried about holding on to their own jobs, there isn't much that has happened that would let people relax. If they're worried about the effect Obama's budget deficits and regulatory attacks are going to have on business expansion, there's no good news on that front. There's no indication that the Democrats are backtracking on trying to do any of the destructive things they want to do. And while there has been some talk about not rolling back the Bush-era tax cuts, anybody paying attention knows that the Democratic leadership in Congress and the Obama White House are dead set in favor of letting at least a good chunk of those tax hikes take effect next year. No matter how much they think their policies are good for the country, Obama and his crowd ought to be smart enough to know that you don't make people happy by pushing stuff they don't want down their throats... so the relative merits of Obamacare and his fiscal and regulatory policies are less important to the economy than the public's perception of those policies. And as the public's perception of those policies is negative, the public's reaction to those policies is going to be negative. The public is desperate for some good news, for a sign that things are starting to turn in a positive direction. Unfortunately, as long as Obama keeps defending his policies (as he plans to do for the remainder of the summer), he is not only reminding people of those policies, he is telling them he thinks they are wrong (a terrible way to get on someone's good side), he is reinforcing their impression of him as someone who just doesn't get it, as someone who is woefully out of touch with what they see as reality, and, even worse, he is reminding them of the part they played in giving him the power to do so much bad. All in all, just not what the doctor ordered in the form of confidence boosting exercises. And as long as the public stays negative, their confidence will stay low... and low confidence manifests itself in the form of no spending, no hiring and no investment. Monday, July 26, 2010
Robert Samuelson never mentions the word
The rebound in corporate profits does allow companies to be more aggressive in hiring and expanding... but for the fact that they're not confident that the sales (and profits) will be there in the future. And contrary to Samuelson's theory, it isn't because there's a disconnect between capital and labor. There is, but that isn't the reason companies aren't hiring. They're not hiring because they're not confident that they can get a return on their outlay. Imagine you're the CEO of a company. You cut staff a year or so ago, if you were smart, in anticipation of trouble, or if you weren't so smart, you cut in response to a downtick in sales and profits. And sure enough, your customers cut back on their purchases of whatever it is that you sell (you weren't fortunate enough to be one of the few companies which sailed through unscathed). As the sky didn't completely fall, your customers have started to return and you've enjoyed an uptick in sales and profits. You're tempted to expand, whether it be by hiring additional workers, opening another location, buying a competitor or something along those lines. But... you're worried. You're worried that there might be a relapse into recession. You worry about the impact of all the government rules on your business. You worry that taxes are going up and that you'll have less money to put towards growth. Not being a government vendor, and thus not rolling in government contracts, you wonder about the impact of the government sucking that much money out of the private sector. So... you sit on your cash. You continue to run lean and bank your profits. You're not a mutual fund manager under pressure to invest all the funds in the account and you don't run a public company with shareholders demanding that you put your cash to work improving the stock price. You have the luxury to sit, so you sit. You sit and wait for a sign. Maybe the sign will come in November, when Republican gains signal that while things won't get better, at least they won't get worse. Or maybe you figure that Obama is the single biggest hit to market and consumer confidence so you are counting on having to wait until he gets turned out of office in 2012 before you can relax again. But either way, you're not going to do much in the way of hiring unless and until you start to think things are going to get better. Friday, July 23, 2010
According to the headline, pay czar Kenneth Feinberg claimed that "17 bailed-out banks overpaid executives" and the story goes on to say that "17 banks gave their top executives $1.6 billion in lavish payments while they were receiving billions of dollars in taxpayer-funded bailouts".
What a half-a**ed story. Not until the end does the story reveal that the 'overpayment' consisted of payments that were proper at the time they were made, they only became 'lavish' if you apply rules that were enacted in February 2009 to payments made before then... and that is improper, no one can be found guilty of violating a law that didn't exist at the time they committed whatever it was that they did. It also doesn't mention that 'excessive' exists only in Feinberg's mind. In fact, a good number of people feel Feinberg's caps were set for political purposes, have no relationship to the value of the employee and have actually hurt bank profitability. The reporter doesn't mention whether these payments were due contractually to the employee or whether they were somewhat discretionary. If the former, in implicitly criticizing the banks, is the reporter arguing that the banks should have violated employment contracts based on guidelines that weren't even in place at the time the payments were made? And this is probably beyond the reporter's grasp, but it is also misleading to suggest that these banks paid out this money at the same time they were begging for funds from the government. Very few of the banks receiving money were in need of the money, in fact, a good number of the banks were forced to take the money in order to allow the banks in trouble to hide among healthier banks. Rewriting the story, we have a relative handful of banks compensating their executives at a level that a government bureaucrat with limited banking experience later decides is more than he would pay them.
Maybe the GOP is counting its chickens before they're hatched, as taking control of at least one chamber of Congress isn't a sure thing, but they're already starting to fret about post-election mischief Democrats, having lost their majorities, can do in a lame-duck Congress.
It's true that lame duck Democrats may not be averse to trying to ram through unpopular legislation such as card check or climate control, but don't the Republicans have a pretty easy way of making sure this doesn't happen? Aren't there 41 GOP Senators? Isn't that enough to mount a filibuster? If the GOP Senators agree that even if they personally agree with the legislation, they're not going to allow any legislation to move forward unless it enjoys support from a majority of the public, then doesn't this simple step keep the Democrats from doing anything? Wednesday, July 21, 2010
It's no secret that I consider confidence the magic elixir that makes the economy tick. And in light of the market's drop in the wake of Bernanke's comments today, I think it's safe to say that his comments didn't do much in terms of boosting investor confidence in the future.
And perhaps a good reason for this is that Bernanke, like so many others, just doesn't seem to grasp the simple (to me, at least) reality that the economy isn't stimulated by fiscal or monetary policy, the economy takes off when people are confident in the future and act accordingly. Fiscal and/or monetary policy are important only to the extent that they boost (or, conversely, dampen) business and consumer confidence in the future. Confident businesses hire new employees, they spend their cash hoards on things that will make them more money. Confident consumers spend money and they borrow to be able to spend even more. Confident banks make loans to businesses and consumers so they can borrow money to spend. Thus, the goal of government should be to push policies that make Americans more confident about the future... and to refrain from doing things that sap confidence. Unfortunately, for a number of reasons, our leaders aren't doing this. In fact, while destroying confidence may not be his goal, Obama seems determined to push policies that have that effect. Policies that raise health care costs, add litigation risk to financial transactions and employment decisions, raise taxes and grows the size of government and forces working Americans to subsidize the unemployed and those who are in houses they can't afford invariably make companies and people nervous about the future... and nervous people don't spend and nervous companies don't invest and don't hire. Add to that foreign and national security policies that make Americans fear for our safety and is it any reason that we're sticking our cash into mattresses? And the GOP isn't a whole lot better. While they're not pushing policies that have a negative effect on confidence, the policies they're pushing aren't such that would boost our confidence. Since nobody has it right, I will take it upon myself to advance what I humbly call '10 Steps to Boost Confidence'. Note that not every step will make everybody confident, there are some steps that will make certain people upset, but the goal is to increase the overall level of confidence in the marketplace. ** Put a hard freeze on government spending, especially the size of the government work force. Nothing saps confidence like the fear that government is going to continue to suck up an ever-increasing share of our paychecks. Freezing government expenditures would send a strong signal that people could relax, that things aren't going to get any worse. ** Positively affirm that while the United States may not be perfect, we are the greatest country on the planet, that any shortcomings are dwarfed by the good that we are and do. People need to feel good about where they live and with their friends and neighbors. It is only logical that confidence suffers when a President spends more time apologizing than talking up the good we do. ** Declare that the United States government will not accept other countries threatening or taking advantage of us. The United States government has to be America's most forceful advocate... and it has to be able and willing to defend America with whatever means are necessary. No country should be allowed to get away with badmouthing us or taking actions that are detrimental to our national interests. As the most powerful and most successful country, we have many tools to use against countries that line up against us, and it doesn't help if the American public feels their government is unwilling to stand up to defend us. ** Declare that the government is no longer in the business of bailing out those who screw up. This applies to both businesses and to individuals. While most Americans feel it is proper to give someone a hand to get back on their feet, our generosity doesn't extend to making the person whole. Nor do we feel that helping someone who is down on their luck obligates us to forever take care of them. Similar to the fear many Americans have of an ever-increasing government, we're not comfortable with government obligating us to take care of an ever-increasing group of supposed victims. We don't want our pockets picked to provide unemployment benefits on a never-ending basis. We don't want tax money to go to people who lost money participating in Ponzi schemes, to businesses that took on too much risk, home buyers who bought houses they couldn't afford and consumers who didn't bother to read the fine print on their credit card applications. ** Stop playing favorites. Americans hate the idea that their working hard can by trumped by someone with political connections. We hate it at work when the boss's pet gets the promotion we think we deserved. We hate it when politicians give money to their friends and campaign donors. Getting rid of what is called 'crony capitalism' would do a great bit to restoring the confidence that comes from knowing that one will reap the benefits of working hard and playing fair... and that those who don't work as hard won't get ahead. ** Enlarge the list of what is considered 'off limits' to government control. While there are always going to be groups who want this or that under government control, most people would prefer to live their lives without having to worry about someone else sticking their nose into what they consider to be private... and it is somewhat depressing to think that Big Brother is snooping on everything we do. Note: I know implementing this runs the risk of undermining efforts to keep us safe; the burden is on government to show that they're intruding into our private lives as little as possible. ** Along those lines, lessen government regulation of business. Focus government regulation on getting a few things right, instead of, as is the perception, of trying to do so much that it gets nothing right. Drop the pretense that the SEC can police every aspect of business finance and protect us; they can't, we don't believe they can and pretending otherwise is farcical. Get the FCC out of trying to regulate the Internet. Have the EPA limit themselves to the truly big and the truly risky sites and industries. Have OSHA stop focusing on whether a business has their safety posters on the wall. ** Lessen the fear of being sued. Being worried about getting sued, especially for something one doesn't think was wrong, is a great way to make people cocoon themselves. Businesses need to be able to hire workers without fearing getting sued if things don't work out to the worker's liking, they need to be able to introduce products without fearing lawsuits if people misuse the products. People and businesses need to know that it takes more than a $50 filing fee at the courthouse to throw our lives into turmoil. We need to know that we're not going to have to suffer financially should someone sue us and not be able to back up their allegations. Instituting a 'loser pays' rule and not letting plaintiff attorneys go fishing at our expense would do a lot to remove the fear that hangs over people and businesses. ** Start rolling back taxes and tax rates. Eliminating the inheritance tax would help, both for the employees of family owned businesses (who now worry about the turmoil that results from the owners having to sell) to the families of those who have built up sizable assets. Let people look forward to keeping an ever-increasing share of their paychecks. Note: freezing the size of government would keep the deficit from getting any worse ** Stop with all the multi-cultural hooey. America doesn't need a Black History month, a Jewish History month or whatever. We don't need national celebrations of foreign cultures. America needs to celebrate America, we need to emphasize the traits and characteristics that unite us, not those things that make us different. People can celebrate their culture by themselves and with others who choose, but official celebrations and proclamations and the like need to serve to remind us why it is so good to be an American. Not a hyphenated American but an American, period. We need government to stop being so focused on our race and sex and national origin. People need something to feel proud of in order to be confident, and focusing on our differences doesn't help. That's the top ten. Moving to implement them will certainly piss off some people, but all in all, there will be more people who applaud these steps than those who go off and sulk because, for example, they're going to lose their pet status with Congress. Tuesday, July 20, 2010
I can't understand why the people of any state would want their electoral votes to go any candidate other than the candidate preferred by a majority of the voters in that state.
And yet Massachusetts and a number of other states are proposing to award their state's electoral votes to a candidate based on how well that candidate did in attracting votes in the other 49 states? Suppose that a particular presidential candidate won 100% of the votes in Massachusetts... but according to the proposed rules, Massachusetts electors would disregard the Massachusetts vote and instead award their votes to whichever candidate had the most votes nationwide. There's nothing like telling the people of a state that their votes don't really count, right? Monday, July 19, 2010
The real issue is not whether cutting unemployment benefits (or, more accurately, not extending those benefits) will slow spending (it will, at least for those who no longer would receive checks) but rather the effect of not extending benefits will have on the millions upon millions of people who haven't been unemployed for so long that they're facing a cut off of benefits... and I could make a good case that the positive effects will more than offset the negative effects... in other words, the long term unemployed are the eggs that need to be broken in order to get the omelet (economy) cooking again.
Here's the rationale: The money that would leave the system by those no longer receiving checks is minuscule compared to the money not being spent by those with jobs. These people are holding off spending in no small part because they see government as taking actions that prolong the troubles. Pressuring banks to hold off foreclosures doesn't make the housing problems go away, it only delays the day of reckoning. An endless stream of unemployment benefits doesn't force the unemployed to do what is necessary, whether it be accept lower paying jobs or moving to a better environment. And these non-spenders aren't going to start spending as long as they think government is doing more of the same, they want to see a sign that things are different.... and not extending unemployment benefits would definitely be a step in the right direction. The amount of new spending by those who are now sitting on their hands would dwarf the cutbacks in spending by those not getting extended benefits. In fact, it isn't the spending that is critical to recovery, it is the confidence that is key. Spending follows an uptick in confidence. Do things that make people more confident about the future and they'll go out and spend, they'll go out and borrow, they'll go out and hire people. But keep doing things that make people worry and you're not going to help.
Time Magazines' Mark Halprin writes: " ...public and private polling suggests that anxiety over the lack of jobs and anger over the big-spending ways of the (Obama) Administration will trump the merits of the stimulus spending, health care reform and the financial regulation bill in voters' minds".
But Mark, maybe the issue is that the public doesn't think there are merits to the stimulus spending, health care reform and the financial regulation bill? The public thinks the stimulus was a big waste of money, a sop to government workers and unions and counterproductive to ending the recession. They think Obamacare is going to cost them more and provide them with less. They see the financial reform bill as not only giving even more power to the regulators who screwed up the first time but as something that will result in less and more expensive credit and cost of doing business.
Not that they'll listen... but the GOP needs to get its act together to better respond to Obama.
With voters deciding they don't like what Obama and the Democrats are doing, we can expect to see Obama attempt to persuade voters that the GOP is worse... and to do so by whatever means necessary. This can include making things up, twisting words, etc., etc. For example, Obama challenged the GOP to stop playing politics and to support extending unemployment benefits. And taken in isolation, Obama makes a good case. But under closer examination, Obama's arguments are shown as thin. The GOP in Congress needs to designate someone (one from each chamber) to respond to Obama on a given issue. Pick XX and YY to respond to Obama on this issue, pick a couple of others to respond on immigration and so on. The people they pick need to be coherent and conversant on the issue they are tasked with defending the GOP position. They need to be quick on their feet in order to avoid saying something that can be taken out of context. They need to emphasize the reasons for opposition in terms that resonate with the public at large (and not just the radical right). And everybody else in the GOP needs to STFU on the issue (this includes you Michael Steele). This keeps the clumsy and the ideologues from saying something that can - and will be - easily twisted to make the GOP look bad. Given the media bias, the GOP can't afford to botch the message by having someone run off at the mouth. Thursday, July 01, 2010
Stipulating that confidence is the magic ingredient that makes the world go round, is there a single area in which Obama has made America more confident that when he took office?
Is anyone more confident about the economy? That the unemployed will be hired anytime soon? That housing prices will climb? That their taxes aren't going to go up? That their jobs are safer now than they were? What about health care? Who thinks their costs aren't going to go up? Who thinks there aren't going to be longer waits to get appointments? What about in foreign affairs? Does anyone think Iran poses less of a threat than it did? That Afghanistan is any closer to being 'won' than it was? That we're safer from terrorist attack? What about the oil mess, who thinks Obama is making things better? How about the stock market, who thinks the market is more likely to go up than go down? One of the biggest responsibilities a leader has is to make people confident that following him and his policies will lead to things being better... and to the extent a President is a leader, he needs to make the country feel more optimistic about the future. Without confidence, nothing good happens. Countries don't win wars if they're not confident of doing so, teams don't win if they're not confident they can beat their opponent, businesses don't hire if they're not confident that times will be good and people don't spend if they're not confident they'll still have a job when the bills come due. And on this critical measurement of leadership, Obama comes up far, far short. He doesn't exude confidence, he doesn't instill it in others. I can't imagine who would look at him and the job he is doing and come away thinking the future is bright. And to the extent that Obama comes up short, so does the country... we have no confidence in him, we have no confidence that he will help make things better... and as a result, the economy is in lousy shape, not getting a whole lot better and, according to some, is even poised for another downturn. Actually, there is one group that is encouraged by what Obama is doing: our enemies. The Taliban in Afghanistan is confident that Obama will blink before the job is done. Countries such as China and Russia are confident Obama will do nothing to upset them. Not only is Iran confident Obama will do nothing to stop them from developing nuclear weapons, they're pretty confident Obama will do what he can to keep Israel from attacking. The Palestinians are confident that Obama has no interest in helping Israel. As I've said, it is all about confidence and with Obama in the White House, the good guys don't have it, the bad guys do.
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