Friday, March 31, 2006

Excessive Spending - One Size Fits All

The Federal Reserve is a good example of the government's one-size-fits-all approach to governing:

  • All women's shoes must be size 6 narrow; all men's size 10 EEEE
  • All infections must be treated with aspirin and penicillin; all cuts require stitches
  • All children must take music education; all children must play the piano
  • All sectors of the economy must be treated as equal; the prime lending rate must be the same, nationally.

Michigan Unemployment Rate
(Seasonally Adjusted)

February 2006

6.6 %

Florida unemployment rate of 3.3 percent lowest in 30 years (fastest job growth, too)
NJOnline ^ | Jan. 20, 2006 | AP

National Unemployment Rate:
4.8% in Feb 2006

  • buy womens' size 6 narrow and mens' size 10 EEEE shoes in bulk to get better prices;
  • take two aspirins and get the wounded employment stitched up;
  • have all of your children play happy music on paper piano keys (no real pianos needed); and
  • get in line to help fight an overheated economy by paying higher interest rates.

Thursday, March 23, 2006

Ethnic Divisiveness - A Good Christian is a Dead Christian

Apparently that's the thinking in Afghanistan where a man who converted to Christianity from Islam about 16 years ago is now facing beheading as is proper under Islamic code.

So American Christians can die for Afghan Muslims' freedom and Afghan Christians can just die.

Tell me again about Islam being a tolerant and peaceful religion... no, really, tell me again.

Thursday, March 16, 2006

Environmental Extremism - The "Idles" of March

A little play on words to recognize the doldrums of mid-March in Michigan.

Winter is getting old and the warm weekend only made going back into the 30s a real downer. Windy, cold, grey, blah. A forecast of a week or so below average temperatures. Of course, that's just what I need for that bathroom fix-up project. Nothing like a really crummy day outside to make scraping old caulk seem like a worthwhile endeavor.

I finally got my taxes done... another benefit of crummy weather. Overpaid the estimated taxes because the business was down a bit... nothing like $3.00 gasoline to shut down RV rentals... so the governement can give me back the money I didn't earn.

My wife really cleaned up the house... another benefit of crummy weather. Amazing how those dust bunnies can multiply.

Maybe we're not so idle after all. Maybe we're just bored with what we're doing. I keep looking at the golf courses, but they aren't looking back yet. Hey, April is almost here.

Oh, yeah, that's when yard work begins.

Sunday, March 12, 2006

An open letter to Congressman Knollenberg

Congressman Knollenberg:

As you know, Michigan is in a unique situation relative to the rest of the U.S. economy. As I walked around the neighborhood today, I saw homes for sale that have been standing vacant for months, even years... and this is a good, middle-class neighborhood.

One only needs to read the headlines to understand that this is not a temporary situation for Michigan. Nevertheless, Michigan is lumped together with the rest of the nation when it comes to economic policies, particularly that of the Federal Reserve.

In the past, when disaster struck other parts of the nation, Michigan was quick to respond with aid... both financial and volunteers. Michigan is not a physical disaster area, but it is rapidly becoming a financial disaster zone; especially southeastern Michigan.

As the auto manufacturers, suppliers and support industries lay off thousands of people, the Federal government continues to proclaim the strength of the economy. These statements are akin to a doctor saying you are in perfect health so enjoy life... while your hand is gangrenous.

Michigan business and the state's economy has been struck by a convergence of forces that threaten a malaise for the next decade. Part of the problem lies in the history of union excess and poor business management. Another contributor has been the foundering of Detroit and it's weighing down economic growth in the area. Still another part is the government's willingness to let Japan and China manipulate their currencies to the benefit of their exporters and the detriment of our producers... a particularly vexing problem for the auto industry.

Perhaps it is time for our economic policies to reflect the disaster that Michigan faces. For example, rather than penalize Michigan for the inflationary pressure of the Florida real estate prices, perhaps Michigan should be given a lower prime rate to at least stabilize its business and housing situation. Applying the same prime rate to Michigan as Florida is creating a depression, not just a recession. That's just an example. The federal government has always treated disaster areas with a different set of rules than the rest of the nation. Perhaps it is time to apply those different rules to Michigan until the state is whole again.

Best regards.

Thursday, March 09, 2006

Ethnic Divisiveness - What's Really Happening?

Received this in an email and found it appeared in the New York Post:

March 5, 2006 -- BAGHDAD

I'M trying. I've been trying all week. The other day, I drove another 30 miles or so on the streets and alleys of Baghdad. I'm looking for the civil war that The New York Times declared. And I just can't find it.

Maybe actually being on the ground in Iraq prevents me from seeing it. Perhaps the view's clearer from Manhattan. It could be that my background as an intelligence officer didn't give me the right skills.

And riding around with the U.S. Army, looking at things first-hand, is certainly a technique to which The New York Times wouldn't stoop in such an hour of crisis.

Let me tell you what I saw anyway. Rolling with the "instant Infantry" gunners of the 1st Platoon of Bravo Battery, 4-320 Field Artillery, I saw children and teenagers in a Shia slum jumping up and down and cheering our troops as they drove by. Cheering our troops.

All day - and it was a long day - we drove through Shia and Sunni neighborhoods. Everywhere, the reception was warm. No violence. None.

And no hostility toward our troops. Iraqis went out of their way to tell us we were welcome.

Instead of a civil war, something very different happened because of the bombing of the Golden Mosque in Samarra. The fanatic attempt to stir up Sunni-vs.-Shia strife, and the subsequent spate of violent attacks, caused popular support for the U.S. presence to spike upward.

Think Abu Musab al-Zarqawi intended that?

In place of the civil war that elements in our media declared, I saw full streets, open shops, traffic jams, donkey carts, Muslim holiday flags - and children everywhere, waving as our Humvees passed. Even the clouds of dust we stirred up didn't deter them. And the presence of children in the streets is the best possible indicator of a low threat level.

Southeast Baghdad, at least, was happy to see our troops.

And we didn't just drive past them. First Lt. Clenn Frost, the platoon leader, took every opportunity to dismount and mingle with the people. Women brought their children out of their compound gates to say hello. A local sheik spontaneously invited us into his garden for colas and sesame biscuits.

It wasn't the Age of Aquarius. The people had serious concerns. And security was No. 1. They wanted the Americans to crack down harder on the foreign terrorists and to disarm the local militias. Iraqis don't like and don't support the militias, Shia or Sunni, which are nothing more than armed gangs.

Help's on the way, if slowly. The Iraqi Army has confounded its Western critics, performing extremely well last week. And the people trust their new army to an encouraging degree. The Iraqi police aren't all the way there yet, and the population doesn't yet have much confidence in them. But all of this takes time.

And even the police are making progress. We took a team of them with us so they could train beside our troops. We visited a Public Order Battalion - a gendarmerie outfit - that reeked of sloth and carelessness. But the regular Iraqi Police outfit down the road proved surprisingly enthusiastic and professional. It's just an uneven, difficult, frustrating process.

So what did I learn from a day in the dust and muck of Baghdad's less-desirable boroughs? As the long winter twilight faded into haze and the fires of the busy shawarma stands blazed in the fresh night, I felt that Iraq was headed, however awkwardly, in the right direction.

The country may still see a civil war one day. But not just yet, thanks. Violence continues. A roadside bomb was found in the next sector to the west. There will be more deaths, including some of our own troops. But Baghdad's vibrant life has not been killed. And the people of Iraq just might surprise us all.

So why were we told that Iraq was irreversibly in the throes of civil war when it wasn't remotely true? I think the answers are straightforward. First, of course, some parties in the West are anxious to believe the worst about Iraq. They've staked their reputations on Iraq's failure.

But there's no way we can let irresponsible journalists off the hook - or their parent organizations. Many journalists are, indeed, brave and conscientious; yet some in Baghdad - working for "prestigious" publications - aren't out on the city streets the way they pretend to be.

They're safe in their enclaves, protected by hired guns, complaining that it's too dangerous out on the streets. They're only in Baghdad for the byline, and they might as well let their Iraqi employees phone it in to the States. Whenever you see a column filed from Baghdad by a semi-celeb journalist with a "contribution" by a local Iraqi, it means this: The Iraqi went out and got the story, while the journalist stayed in his or her room.

And the Iraqi stringers have cracked the code: The Americans don't pay for good news. So they exaggerate the bad.

And some of them have agendas of their own.

A few days ago, a wild claim that the Baghdad morgue held 1,300 bodies was treated as Gospel truth. Yet Iraqis exaggerate madly and often have partisan interests. Did any Western reporter go to that morgue and count the bodies - a rough count would have done it - before telling the world the news?

I doubt it.

If reporters really care, it's easy to get out on the streets of Baghdad. The 506th Infantry Regiment - and other great military units - will take journalists on their patrols virtually anywhere in the city. Our troops are great to work with. (Of course, there's the danger of becoming infected with patriot- ism . . .)

I'm just afraid that some of our journalists don't want to know the truth anymore.

For me, though, memories of Baghdad will be the cannoneers of the 1st Platoon walking the dusty, reeking alleys of Baghdad. I'll recall 1st Lt. Frost conducting diplomacy with the locals and leading his men through a date-palm grove in a search for insurgent mortar sites.

I'll remember that lieutenant investigating the murder of a Sunni mullah during last week's disturbances, cracking down on black-marketers, checking up on sewer construction, reassuring citizens - and generally doing the job of a lieutenant-colonel in peacetime.

Oh, and I'll remember those "radical Shias" cheering our patrol as we passed by.

Ralph Peters is reporting from Forward Operating Base Loyalty, where he's been riding with the 506th Infantry Regiment, 101st Airborne Division.

Excessive Spending - Ignore the Man Behind the Curtain

I have written about currency manipulation several times... last May and most recently in January.

Today's Detroit Free Press has another article regarding the debate about currency manipulation and the benefits it bestows on foreign competitors doing business in the U.S.

The "free traders" at Cafe Hayek and elsewhere, think it's a good thing that prices are kept low... even if it kills U.S. based businesses... as long as consumers reap the benefits. The question is: how long will artificially low prices continue when U.S. businesses aren't there to compete with the manipulators?

But there are doubters that the currency manipulators exist. Yes, there are doubters that Jews were slaughtered by Nazis.

Tuesday, March 07, 2006

Excessive Spending - Prices Don't Compute 2nd Verse

After my post last Wednesday regarding gasoline prices, The Detroit News followed up today with an even larger article.

It just takes a large organization a little longer to get the news out.

Saturday, March 04, 2006

Environmental Extremism - Get The Lead Out

Recently, manufacturers of paint containing lead lost a lawsuit brought by the state of Rhode Island, but the state was denied punitive damages. The manufacturers, however, must removed all of their paint that was used.

Before all of you computer users get all sanctimonious about the results, you need to think this through. The paint was manufactured and used during a time when it was legal and the paint was deemed superior because of its durability and color stability. It is now being judged by a different set of standards and laws ... ex post facto.

Well, somebody has to pay!

Okay, remember that when Intel and IBM and Dell and every other chip and computer manufacturer has to go to every landfill in the U.S. and remove all of the electronic junk that was dumped there. Remember than when the television and component manufacturers have to do the same thing.

Yeah, they all used lead-base solder which can leach into the environment and potentially poison our drinking water.

Hey, lead is lead. Of course, all of the computer users might object to having all of their computer manufacturers go bankrupt cleaning up their mess. But, those manufacturers know the facts and are choosing to ignore them. So let's litigate! We can go back to using calculators and telephones.

Oh, wait! We can't! Those have lead circuits, too!

Hey, let's just pick on the paint manufacturers. Nobody really cares about them.

Thursday, March 02, 2006

Ethnic Divisiveness - Empty Pockets, Empty Minds

With a tip of the hat to Thomas Friedman who wrote about "empty pockets, angry minds" as an explanation about why Muslims are reacting so violently to every perceived insult by the West.

Mr. Friedman wrote:

Nearly 60 percent of the Arab world is under the age of 25. With limited job growth to absorb them, the ILO estimates, the region is spinning out about 500,000 more unemployed people each year. At a time when India and China are focused on getting their children to be more scientific, innovative thinkers, educational standards in much of the Muslim world -- particularly when it comes to science and critical inquiry -- are not keeping pace.

Pervez Hoodbhoy, a professor of nuclear physics at Quaid-i-Azam University in Islamabad, Pakistan, bluntly wrote the following in Global Agenda 2006, the journal of the recent Davos World Economic Forum:

"Pakistan's public (and all but a handful of private) universities are intellectual rubble, their degrees of little consequence. According to the Pakistan Council for Science and Technology, Pakistanis have succeeded in registering only eight patents internationally in 57 years.

"[Today] you seldom encounter a Muslim name in scientific journals. Muslim contributions to pure and applied science -- measured in terms of discoveries, publications, patents and processes -- are marginal. The harsh truth is that science and Islam parted ways many centuries ago. In a nutshell, the Muslim experience consists of a golden age of science from the ninth to the 14th centuries, subsequent collapse, modest rebirth in the 19th century, and a profound reversal from science and modernity, beginning in the last decades of the 20th century. This reversal appears, if anything, to be gaining speed."

No wonder so many young people in this part of the world are unprepared, and therefore easily enraged, as they encounter modernity. And no wonder backward religious leaders and dictators in places like Syria and Iran -- who have miserably failed their youth -- are so quick to turn their young people's anger against an insulting cartoon and away from themselves and the rot they have wrought.
It goes back to the notion that if you have the "truth" you need look no further for knowledge.
We will have a holy war to show the world that our belief is right. We will become the opposite of what our belief professes to show that we are right. Our religion says do this and we do the opposite and justify our actions with the notion that it is for the "greater good".
Sunday, October 24, 2004

Wednesday, March 01, 2006

Excessive Spending - Prices Don't Compute

It's good to be back from vacation. The weather was great in Florida, but "there's no place like home."

I noticed something about gas prices: Michigan manages to stay outside of the competitive circle.

Florida gas prices were higher than Georgia by about 20¢. That's consistent with the 18¢ difference in gasoline taxes. Our last fill in northern Ohio was $209.9 (about the same in Dayton). In southeastern Michigan, prices are around $2.35 - 2.40. That's not consistent with the 4¢ difference in taxes.

So, who is gouging Michigan? And don't give the "special summer blend" excuse.


2.49 Mobil Click here to find out more information about this station Northville Wed
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6 Mile Rd & Haggerty Rd
2.49 BP Click here to find out more information about this station Livonia Wed
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2.49 BP Click here to find out more information about this station Birmingham Wed
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2.49 Shell Click here to find out more information about this station Canton Wed
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Ford & Haggerty
2.49 BP Click here to find out more information about this station Canton Wed
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Ford & Haggerty
2.49 Speedway Click here to find out more information about this station Detroit Wed
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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)