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Showing posts from December, 2008

Our Nation: So where do we go from here? Part 3

In my humble opinion, the two most distinctive elements of the United States of America's economy are freedom and entrepreneurialism.

The First Amendment of the U.S. Constitution states, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." What is so striking about this, and quite frankly all of the U.S. Bill of Rights is the negative language. "Congress shall make no law;" or "shall not be infringed" (2nd); or "No Soldier shall" (3rd); all are written to limit or forbid the Federal Government from entering into the lives of its citizenry. This is one of the most profound statements of freedom in the history of politics, society and I will argue, economy.

The Declaration of Independence is more positive in its tone, calling o…

Our Nation: So where do we go from here? Part 2

U.S. Interest rates
Over the next two years, rates will be low by historical standards. This will be bad news for fixed income investors, and good news for borrowing costs. In the 5-10 year time frame, there will be pressure for U.S. interest rates to rise due to the size of the U.S. government budget deficit. In addition, as the economy rebounds (and trust me, it will rebound), then the Federal Reserve will raise interest rates to hold inflation in check.

So when the government spends more than it collects in taxes, who pays the difference? Today, the shortfall caused by taxes collected being less than government expenditures, has been funded by foreign government purchase of Treasury bonds of various durations. Indeed, of all of the "savings" in the world, the U.S. consumes 85% of it to finance its borrowing. Mind you, the shortfall could be funded by US citizens buying government bonds, and if investors become more risk averse over the next two decades, this may occur. But …

Our Nation: So where do we go from here? Part 1

I wanted to write optimistically about our nation's democracy and capitalism. But before I address what I see in the next 3-5 years, I should start with my underlying assumption, and why I believe it to be true:.

The United States of America is an incredibly unique social, economic and political construction, and it is the best the world has ever known. Not perfect, but perpetually driven towards auto-improvement.

Natural Resources: which other country has the vast amounts of natural resources, in quantity and diversity, as the United States? None.

The USA has 30% of the world's natural gas, 22% of its coal, 8% of its oil, copper 15%, Gold 15%, Silver 13%, Aluminium 17%, Magnesium 29%...

Go to www.allcountries.org/uscensus/natural_resources.html to see the entire data set.

Human Resources: which country has the size, scale and scope of the US education system? None.

The USA has 4,140 colleges and universities with 17,500,000 undergraduate and graduate students? No other count…

US Autos: whichever way we go, let's get this right

A sound plan from Tom Epley's Bold Exec Blog. I agree with this 10 point plan. Worth reading...

http://www.boldexec.com/boldexec/2008/11/show-me-the-plan-gm-part-i-items-15.html

The search for happiness Part 1

Perhaps it is a consequence of middle age, but more and more of my friends are pondering the meaning of life. To be fair, the terrible economy is also a causal factor, as far too many of my friends have lost jobs or fear losing them shortly.

I have friends who are atheists. I have friends who are agnostic. I have friends who are both committed and causal Christians, Jews, Hindus and Muslims. I find, however, that the questions are very much the same. What is the purpose to my life? Am I loved? Do I love others? Does my life matter? Can I be happy?

Today, I was reminded of words of wisdom from Mother Teresa. As we approach the second most important Christian holiday, Christmas, we find that one of the key lessons from Advent is the discovery and pursuit of JOY. First and foremost, I should clarify that joy is not pleasure. Pleasure is sensory-based. Joy is spiritual.

Due to the fact that I graduated from Kenyon, and majored in the history of ideas or philosophy, most of my friends tend to…

Big 3 Part 3 -- Closing in on the finish line

As we get closer to an agreement for supporting General Motors, Chrysler and Ford, I continue to press for structural reforms.

What concerns me is the lack of discussion around several issues:

1. Rationalization of brands and dealer networks: whoever becomes the Car Czar will rue the error of not being granted sweeping powers to supersede state franchise laws. GM had to pay millions to dealers when they retired Oldsmobile. This cannot be the case going forward. Furthermore, continued consolidation of GM, Chrysler and Ford dealer networks is required -- and speed and low cost is the key.

2. We need to incentivize consumers to "Buy American." I am perplexed by the failure to address this requirement. It should be a hallmark of the Obama-Biden stimulus program. I favor tax credits, like those for hybrid vehicles.

3. There are two meta-goals above this issue. President-elect Obama should use the U.S. auto industry crisis as a "laboratory" for fixingMedicaid/Medicare and So…