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This is my effort to share my thoughts with readers about concerns facing our country today.  I believe there is a good chance my grandchildren may be the first generation in the history of this great country not to have a better standard of living than their parents. If so, our generation is to blame. The clock is running out for damage control. .

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Thursday
Apr232009

Green Tea Parties

I recommend a second Tea Party called the Green Tea Party.I believe this is timely since Waxman is holding hearings in congress to move forward with a very aggressive energy bill.This bill would put a huge strain on an already strained economy.Some estimates say it would raise utility bills by as much as $3000 per household.This doesn't take into consideration that fact that costs for every product manufactured in this country would go up significantly. Supporters of this bill scoff at both suggestions.

There are examples, like Spain, where studies show huge jobs losses and unbearable costs for each new green job produced.

I don’t believe congress will present the truth.Too many are too dependent on the environmental vote.I don’t believe the president will seek the truth.

In addition, there are other questions I would like to have answered. When Drill Here, Drill Now presented millions of petitions to Washington last fall, candidate Obama went on record saying he favored drilling here.When do we start?

I want the EPA to measure the mercury in landfills. Enough CFL bulbs have gone there and been broken by now to determine whether this is doing significant damage. I want to know.

I want to know what the water conservationists are saying about a report that says it takes 1,000 gallons of water to produce one gallon of ethanol.

I want to know if there is any concern about the new round of refinery closings in the U.S.Just last year President Bush was suggesting we build refineries on military bases.

I think a Green Tea Party would bring out as many or more than the 1,000,000 who came to the Tea Parties. I believe many Democrats and Independents as well as Republicans and Libertarians are not on the same page as the President, Congress and Al Gore occupy when it comes to an energy strategy for America.

Let's try it and see how many show up. 

Tuesday
Apr212009

Czars and Cramdowns 

The official count is in. Over 1,000,000 Americans attended Tea Parties around the country. A non-event to mainstream media. Or, is being spun by mainstream media  part of the reason these folks were out there? As more mainstream media go broke, new options will emerge. 

 America is starting to feel more and more like the old USSR. Or, even the Russia that preceded that. They had TASS and we have MSNBC. But, not for long.

Speaking of Russia, what's with all the czars? The Obama administration now has more czars than the Romanov Dynasty had. The Romanov's ruled from 1613 to 1917. In that time, they had 18 czars. Obama has 18 with the announcement of Border Czar Alan Bersin. I won't name them all, but just a few. Carol Browner, energy czar, urban czar Aldolfo Carrion, Jr. Guantanamo closure czar Daniel Fried. I don't know whether to add car czar Steve Rattner, since he may be going to jail. But, if we add him, there are 19. Are the people who run things in this administration wanting us to think like Czarist Russia? Does it make it easier to finish the job?

Then we have the cramdown. At this time there is only one official cramdown. The one where judges who handle bankruptcy proceedings that include a house. The cramdown will force the bank to accept a mortgage set by the judge. This bill hasn't passed the Senate. If passed, it would authorize the judges to modify mortgages closer to the new market value of the house. The judge could reduce principal, lower the interest rate, change the maturity, or convert it to a fixed rate. The House version, which has passed, would apply this to all mortgages, not just sub prime.

So, is this the first of many cramdowns yet to come? A health care cramdown. A cap and tax cramdown. An education cram down that doesn't address the  systemic problems with education today. But, it will appease the teachers' union, throw more money at a bad system, and add entitlements and cost. A spend trillions cramdown. An already corrupt stimulus bill" expanded" cramdown. A government nationalization cramdown.

I'm starting to make a connection between the czars and the cramdowns. You need a lot of czars to do the cramming. If the Tea Party idea expands, we will need an anti-Tea Party czar to get names and find ways to punish the attendees. Will everyone who attends a Tea Party get a tax audit?

What is happening to my country? When did the use of "czars" become acceptable to a public that despised all that Russia stood for and wanted no part of their structure. What's next?

When government can force banks to take TARP money, what's next? When government can use the bank failures as a reason for bailouts and then pass a bill that will inflict serious damage on newly bailed banks, what's next? When Barney Frank can cramdown a student who asks him a reasonable question, what's next?

And, all these czars aren't free. Plus, we all know enough about Washington politics to know the more egos you add to the massive ego pile, the more infighting you get, and less, not more, gets done. 

Enough with the czars and the cramdowns. Let's get back to being a Republic.  

Monday
Apr202009

Spain's Green Energy Success is the Model for the USA

President Obama has cited on numerous occasions that he sees us following the lead of Spain in growing our Green Energy businesses. Billions of dollars are set-aside to do just that. We are doing no drilling, no nuclear, no clean coal, no fossil fuel projects because we want to be just like Spain.

Many of us have been concerned that green energy will kill jobs. We fear it will be another government loser. We shudder to think that years could be lost and little gained. But, our new president soldiers on touting Spain.

A new study from the Universidad Rey Juan Carlos in Spain makes for good reading. ( It's in English)

The report examines the cost to Spain of the massive commitment to green energy. The report substantiates that the U.S. could expect to lose 2.2 jobs for every new green job. Plus, green jobs are short-lived. When the project is done, the job is gone. Translated to the U.S. that would mean the green jobs program we are embarking on will lose up from 6.6 million to 11 million jobs to offset the 3-5 million new green jobs. 

The report also states that the cost of a new green job was 571,000 Euros each.

David Gertzmark at MasterResource put the pencil to government-side costs as well as private costs, and evaluating the Spain study concluded. "The arithmetic of green jobs is ineluctable and grim. For each utility worker who moves from conventional electricity generation to renewable generation, two jobs at a similar rate of pay must be foregone elsewhere in the economy, otherwise the funds to pay for the excess costs of renewable generation cannot be provided. Moreover by raising costs throughout the economy, high cost green energy will reduce the competitiveness of US exporter, thereby destroying(presumably Well-paying) jobs in such industries."

Just like our leaders want to model our economy after California, they want to model our energy future after Spain. They are quick to tell you that Spain now gets 60% of it's power from green energy, mostly wind. But, if they even know the cost, they don't want you to know.

Seems like logic just goes out the window. When you know green power costs seven times the current cost of conventional power, you just know it can't be good. With all the taxpayer money going into the construction of green energy and so much of the windmills and solar panels coming form foreign countries, it takes a big chunk out of the economy. Then mandate that utility companies have to produce fixed percentages of their power from green energy, and you have the same formula that is killing Spain. Power costs go up for all manufacturing, and they close plants. More jobs go away than you gain. 

Here's what is coming down the road for us. Good luck.   

Sunday
Apr192009

Disenfranchised Democrats

A recent Pew Research Center Poll shows environmental concerns dropping in 2009 vs. 2008. In 2008, the environment was 10th of  20 concerns ranked by those polled, with 56% rating it high.  Global warming was 20th, with 35% rating it high. This year the environment was 16th, with 41% rating it a high concern. The economy was tops with 85% rating it high, up from 75% last year. Global warming came in 20th and dead last again this year, 30% rating it high vs. 35% last year. So, as Americans get poorer, saving the planet becomes less important that finding a job, protecting their homes, educating their kids, Etc. Energy went from 8th last year with 59% rating it high, to 5th this year with 60% rating it high. 

Ignoring the polls, the administration, through the EPA, issued a new regulation identifying carbon dioxide as a toxic substance. Along with every other substance that could possibly be emitted into the air, or found in any chemistry textbook. With the recent Supreme Court decision that gave the EPA the right to establish limits on things like carbon, the EPA is telling Congress, pass Cap and Tax or we will set new limits that will force businesses to restrict carbon or close. Good choices there, right?

This  could be a bipartisan effort to restrict carbon, but Al Gore has made it a Democratic issue. Hence, the Dems will get the credit or the blame. Being poll conscious, some Dems may take a pass on Cap and Tax. If the EPA pulls the trigger on restrictions without Congress, they will all get the credit or the blame, thanks to Al Gore.

If only 41% consider the environment a top issue, and since global warming gets 30%, there are one hell of a lot of Democrats not supporting carbon restrictions or Cap and Tax. 

This is just one area where the current administration ignores the majority of their party and goes its own way. Unionizing Walmart is another. The poorest Americans shop at Walmart to stretch a stretched budget. Unionizing Walmart will add cost to their shopping basket. 

Taking school vouchers from the kids in Washington DC is another example. Patronizing the Teacher's Union is more important than giving poor kids in Washington DC a chance for a  good education. 

Not drilling offshore and in Alaska and utilizing domestic sources of energy will cost the poorer Americans millions of dollars down the road. 

Dick Durbin is double dealing on the cram down mortgage deal. Congress has the votes to deep six the unpopular idea. This is where the bankruptcy judge can tell the bank what they have to do to give the bankruptcy filer a chance to keep their house. Durbin is telling congress if you don't pass Cramdown, he will withhold billions of dollars from the FDIC. 

Put the people who have historically supported the Democratic Party in a room and ask them if the party still supports them. The answer will be yes. But, the truth, of late, is no.  Given a choice of supporting hard core environmentalists who are largely comprised of elitists, academia, Hollywood, and professional protesters, and the party will support them if they have to hurt the working man. Given the choice of supporting a union ,which might not be in the best interest of the working man , the tip goes to the union. 

How does the party get away with this? The abject stupidity of the Republican Party lets it work. There are no leaders in the party who can recognize what the Dems are doing or articulate it clearly. And, if they could, there would be few media sources that would air the story. 

So, the myth lives on. The Democratic Party is the Party of Joe Six Pack. But, it's really the party of Gloria Vanderbilt and all the lesser Vanderbilt's who would let Joe off with a slap on the wrist if he killed someone, but would hang him high if he urinated in the Charles River. 

Saturday
Apr182009

The Next Bubble Breaks

It's been coming. Most of us knew it was. This week it broke. The commercial mortgage bubble.

General Growth went into Chapter 11. Their debt is estimated to be $24 billion. Familiar firms hold the paper. Citigroup and Goldman Sachs ring a bell?

Just look around your neighborhood. How many retail stores have closed in the malls and strip shopping centers? How many new shopping centers are done and empty? Landlords are renegotiating rents down to keep tenants in business. Vacant office space is prevalent. Cash flow has to be negative in many cases. The big and the small will go first. The medium sized developers may hang in there longer. Depending on how long the economic slump continues, they will eventually be in trouble too. 

It's amazing how much of this is just common sense. You see the problems every day. Then, you see the result and we all act surprised. Consumers are not spending. Layoffs are announced every day. The auto industry is in shambles. Until hiring starts and consumer spending follows, the commercial mortgage business is in trouble.  

You don't need Wall Street to tell you it's not over. The Fat Lady has not sung on this mess.

So how much will the banks be buffeted by this wave? I believe they have tens of billions of dollars in write-offs in the next few quarters as the commercial real estate market craters. 

Get out your checkbook. You will need to pay for this just like you are going to pay for the subprime mortgage mess. Banks giving back TARP money will be right back at the pay window asking for a different version of TARP to cover these write-offs. 

There is one big bubble still roiling. The credit card bubble. As the unemployment rolls grow, the credit card problem will magnify.

Until these issues are over and done, don't expect much good news in the financial world.

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