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Thursday, March 25, 2010

Fall Politics: Better Not Be Business As Usual

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I was in the area, so I stopped in at Mike Cox's campaign headquarters. Mike [photo with family at right] is running for the Republican nomination for Michigan Governor. Because he is presently busy as Michigan's Attorney General, Mike was not at the HQ, but I did get to meet with his PR chairman, Nick DeLeeuw [photo at left from his Facebook page].

Nick showed me around the cavernous and empty offices, but it is obvious that they are planning to gear up fairly rapidly. Nick was active at RightMichigan.com for quite awhile and I had established a casual email relationship with him and Jack McHugh of the Mackinac Center for Public Policy. I met Jack for the first time a couple of weeks ago, so I took a chance that Nick might be hanging around the campaign offices.

Nick had sent out a link to Mike's 92-point plan for Michigan which I scanned. My reaction was that it reminded me of Obama's plan for everyone and everything on the presidential campaign website. I wanted to have a clear statement of Cox's goals, priorities and strategies before wading through the details. This could have come from Obama's website, but it didn't:

Today I am releasing the first steps on changing Michigan. The time for small changes and timid acts is past; we must make bold and revolutionary changes.
I understand perfectly that Mike's positions are quite different from President Obama's, but the point was that a lot of "things to do" around the theme of change just doesn't excite me like it should... for some odd reason. I want a businesslike approach ... something that Alan Mulally might do if he were running the state... not more slogans. That's not to say that the individual 92 points don't have merit. It is to say that if you are going to "make bold and revolutionary changes" you damn well better have a clear vision of what that is and where it is going to take you... something akin to Mulally's One Ford.

How about a One Michigan approach? That might be asking too much of any politician in this state. The residents probably are not ready for that much unity... red, blue, upper, lower. Fragmentation is the law of this political jungle with the promise of more favors to the winners.

I didn't grill him too hard, but said that I hope that the primary battle with Peter Hoekstra, whose district is centered around Muskegon and Ludington along the eastern Lake Michigan shores, would be gentlemanly. Don't blow up your bridges tossing grenades back and forth in the primary. Nick assured me that although the primary would be hotly contested, the real target is the Democratic party and both Mike and Pete know that. That's presuming that Pete will opt out of Congress for a chance at being Michigan's governor. The odds are quite high.

It ought to be an interesting battle. These are two heavyweights in Michigan, despite this being a big union state. There is a very strong possibility that whoever of these two wins the Republican primary will ultimately be Michigan's next governor. There simply isn't enough pork coming out of Washington to salvage the governor's office for the Democratic Party given the horrendous job the current governor has done and the general anger of the residents over the perceived sleazy dealings in Washington.

2010 is here... and

2012 IS GETTING CLOSER

..

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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

FEDERAL RESERVE & HOUSING

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."
November 28, 2007 FED VICE CHAIRMAN DONALD KOHN
"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."
http://www.reuters.com/

December 11, 2007 Somehow the Fed misses the obvious.
fed_rate_moves_425_small.gif
[Image from: CNNMoney.com]
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 Economy.com. "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)