Saturday, August 29, 2009

Liberalism: Not Seeing The Obvious


Living in Michigan is not that different from other north-central states. Cold winters, cool summers, and liberal politics. Having spent my first 21 years in Wisconsin, I was pretty much used to political activism as the norm. Being raised in Milwaukee, my world-view was pretty much hard work, hard fun, and a strong sense of community.

Milwaukee had a socialist mayor name Frank Zeidler. He ended his last term while I was still in high school. It may have been his particular brand of socialism or it may have simply been the post-WWII boom, but Milwaukee was a pretty prosperous and provincial town that seemed to be a pretty nice place to live.

My dad wasn't necessarily enamored with the mayor's approach to things... especially the high taxes. But it seemed as if the taxes went toward efforts that made the community a better place for everyone... not just this or that group. There was a fine park system. Public transportation ran pretty well and was ubiquitous. There didn't seem to be charges of corruption hitting the papers every week. It was a socialist government that did redistribute wealth, but for the things that seemed to make the community a better place for everyone.

Things change. Milwaukee became more like other large northern cities. The practical socialism of Mayor Zeidler morphed into the liberalism of the 60s and 70s. Instead of government focusing on the larger needs of the city, the politicians began focusing on groups that ensured a continuing voter base. People began to move outward to smaller communities that felt like communities rather than staying in a city that was divided into zones of interests. Milwaukee started to resemble Detroit and Chicago in its politics and its problems.

I moved to Michigan in the early 70s after a stint in the Air Force. It was a few years after the infamous riots in Detroit and that gave me significant pause before accepting the job I had been offered. It was only because we would be living and working in a community some distance from Detroit that I felt comfortable moving there. We were not disappointed. We found an area of homes built in the 1920s and 30s that had the charm of a small town and access to all of the amenities of a larger city. Government worked for all of the people and the people made their voices known to the government to be sure it stayed that way.

In the almost 40 years since moving to this area, I've seen the city of Detroit become the poster child for big, bad, liberalism. Government officials worked for their own power, not the welfare of the community. Special interests connived with the government officials to gain wealth and benefits at the expense of the city. People only saw the government as a source of handouts; they didn't see themselves as responsible for contributing to the betterment of the community.

The conservative socialism [yes, that sounds like an oxymoron] of Frank Zeidler was much closer to the community spirit of the pilgrims and the Founding Fathers than the corrupt liberalism that followed. Yet we think of socialists as farther "left" than liberals. The big difference is that the socialism practiced by Zeidler was more of a partnership with the people. It was a two-way street of cooperation and common goals. It depended on a high degree of ethical behavior by the governing and a high degree of responsibility by the governed.

Today, Detroit is a city that represents the nadir of social evolution in America.

Nearly 30% of the people are unemployed. Nearly 40% of the geography of the city is abandoned or derelict. The last mayor was sent to jail. The city council was a combination of has-been entertainers and slightly psychotic frauds. The people have little sense of community or responsibility as evidence by the repeated election of the idiots they elected... by the small percentage of people that actually bothered to vote. Crime is rampant and schools are warehouses for the ineducable.

The liberalism of Kennedy and Carter and Johnson and Clinton and Obama is a dead end for our nation. It is divisive and corrupting. The laissez faire approach of Reagan and Ford and the Bushes simply added big business and big military to big government. There are few models among big cities or federal government administrations that I find admirable today. Certainly the socialism that was practiced in eastern Europe isn't the answer either.

In Michigan, the state government is chaotic and contentious. A few counties such as Oakland County are generally well-run fiscally, but that reflects the wealth and education and constant involvement of its residents, not necessarily the party affiliation of government officials.

What is obvious to me is that we get the government we deserve. If our goal is for government to provide us with handouts and appeal to our group with special favors, we get the kind of government that creates a modern-day Detroit... or a Cuba... or a Venezuela... or perhaps a future U.S.

It takes two to tango: the government and the governed. Sometimes the dance can look pretty ugly. I find a ray of hope in the "Tea Parties" that have been so roundly denounced by the party in power... and the gray-haired "thugs" who, at Town Hall meetings, stand up and say they don't like what Congress is doing... even if they do get physically abused by certain special interest groups. People are standing up and telling their representatives that they expect to be represented ethically, responsibly, and within the bounds of the intentions of our Founding Fathers. The process is disturbing and antagonizing, but necessary for the future health of our nation.

Unfortunately, that doesn't seem obvious to too many people...

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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
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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)