Shows on: Is it Obama and Biden or That 70's Show

Obama has made one of the better picks in Joe Biden the thoughtful if not very succinct orator, also known as foot in the mouth Biden. Biden actually brings many credentials to Obama which he lacks, most notably on foreign policy. If one can survive the length of his speeches he actually has good stuff to say.

After the Biden pick it all seemed downhill as the opening day of the Democratic convention was a borefest of people making promises to give everyone health care without any thought for who would pay for it. I guess that is the nature of conventions and politics in general. Promise the moon, deliver the dust.

This convention is all about hope and change, for all those [unfortunately] old enough to remember, this is looking more and more like a throwback to the 70s. We have all the hope and feel of Jimmy Carter, cleaning up the mess in Washington, while we will have more and more government to help us out. Just exchange Jimmy's cardigan sweater for Obama's Unicorn and its a wrap. Incidentally, I always felt Jimmy C meant well, it just did not turn out that way.

At least Obama is much more uplifting in his rhetoric, unfortunately there is nothing to be upbeat about right now. Each day more banks continue to flounder and fail, while Fannie and Freedie the biggest of all will have to turn over $223 billion in debt by the end of September with no buyers in sight. It will most likely be us - the US taxpayers that are going to pony up and nationalize them. The Chinese are queasy enough about their US exposure and are trying to go cold turkey so don't look to them. Will Citi go bust also? Slightly more positive the US balance of trade has improved a bit as consumers scaled back purchases while the worthless dollar has improved our exports. Too bad now the European market and our other export markets are starting to tank also. Meanwhile we are being tested by Iran and a resurgent Russia. The financial numbers showing the US going into receivership as the Social Security and Medicaid have been shown with mathematical precision to be on the verge of overwhelming and bankrupting us. Money for global warming remediation?

So Obama plans to raise taxes, lift the cap on Social Security contributions, increase corporate taxes and soak certain industries with targeted punative taxes. With this money he will do what, address the list of issues above? No he will throw more money at health care and new government programs.

Social security has always been a shell game, where half of your tax burden is hidden in the "employer contribution". Since the employer sheds this burden when they lay you off the reality is that this is your money that is deducted before it ever reaches your paycheck. For the poor self employed suckers paying 15.3% they at least looked forward to FICA top-out where they went back to 2.9%. For many people just above the $102K threshold, people the democrats assume to be rich Americans, this is referred to as their Christmas bonus, real bonus checks and wages have been non existent for years. This is where they get an extra $500 - $1000 to spend on the holidays. Wages have stagnated in these better paying professional jobs engineers, mid-level managers as they are outsourced or HIB visa'd to oblivion. Note that Obama does not consider this a tax increase, they just removed a cap costing people in the middle hundreds and thousands of dollars more. This money will not be saved in a rainy day fund to save Social Security, it will be spent. The real Social Security trust fund is our children who will be so indebted by the time the orgy of spending is done as to be unable to afford to raise a family of their own.

Obama also wants to raise corporate taxes. Democrats love employees who can vote them in, however they don't like employers that would give them a job. Eastern Europe and many places have been cutting corporate taxes and finding increased business activity. Here we have the highest corporate tax rates in the world. Who pays these taxes, the fat cigar chomping tycoon? Actually, we all do in higher costs for goods and services, less return on our 401K plans and other investments. Most Americans do not have the luxury of government pensions (double or triple dipped) with COLAS with full medical coverage. They have a 401K that is tanking. It is interesting to note that Obama's personal investments appear to avoid the equity markets where most of Americans pray they can make enough money to retire.

Taking up another populist hobbie horse, Obama also plans to impose special taxes on oil companies, a windfall profits tax. This was also tried in the 70s and proved a disaster. The end result then was decreased production and more money flowing to OPEC coffers. Notice now who are the really big oil companies on this planet. The holders of the oil are all state owned oil monopolies leaving our companies more as middle men who take a percentage of the oil profits that pass through their hands. We would like to encourage them to invest these profits into renewables and yes more oil exploration. Instead Obama will follow the lead of Venezuela's Hugo Chavez who uses the Venezuela oil company as his piggy bank. By siphoning off profits he has succeeded in curtailing investment in infrastructure and finding new fields. Despite high prices Venezuela's production has been falling. I could also mention that was Saddam Hussein's methodology as well.

Change, change, change. Baloney, this has been in reruns for years.

Nice going Chuck

Chuck Schumer has always been known as a grand stander and a big mouth, ready to pimp to the populist fashion in the eternal quest for votes. Always wanting to be seen fighting for the people against corporate and banking interests, Chuck can be a loose cannon. This time he has cost the treasury a few billion dollars and several hundred employees their jobs. I refer to Chuck's recent blabber mouthed letter that the set the stage for the fall of IndyMac bank on July 11th. Once depositors learned of this open letter questioning the banks solvency, depositors lined up and withdrew $1.3 billion in a spectacular run on a bank not seen since the 1930s.

We have recently been treated to a great many blasts from the past. We were treated to the first big run on a bank across the pond when the UK bank Northern Rock suffered a similar line up outside the teller windows as everyone queued up down the block for their funds. Of course this couldn't happen over here in America! Since then we have witnessed a major investment firm, Bear Sterns suffer a corporate run on the bank and now a good old fashioned depositor induced panic. All this despite deposit insurance!

The Bear Sterns announcement at prime time on a Sunday night demonstrates how these things are properly done - behind the scenes in quiet and announced when its a done deal. That way the institution does not implode and investor wealth and taxpayer dollars do not evaporate. In this case we had a grandstanding senator posturing as a protector of the people blowing the whistle before a salvage deal could be worked on. As the former, now unemployed employees of IndyMac wrote to the attorney general: "From the day (Schumer's) letter was made public on June 26 until the closure of the bank, a run on the bank took place and the failure became inevitable." Nice work Chuck!

Chuck presents himself as a person knowledgeable in financial affairs, this event should set them straight. Anyone familiar with these matters knows that investor confidences is paramount to success when an institutions suffers a liquidity crisis. The political machinations of a senator are at variance with what is needed in a time of financial crisis, when discretion is the better part of valor. That is why the Fed was created to get monetary policy away from the political process.

This isn't the first time our elected representatives lust for public appeal has boomeranged on them. During the depression while the banks were on the ropes and in need of the "lender of last resort", namely the Federal Reserve another bunch of well meaning senators and congressmen voted to require a list of the banks receiving loans from the Fed to be published in the best interests of the public. Of course being on that list was a death sentence with depositors queuing up to withdraw what they could as soon as the windows opened.

You would think someone like Chuck who prides himself on being an expert in these matters would know better. You would be wrong.

A Blast from the Past, the Russian Bear Awakens

We are certainly going back to the 70's with the economy in the dumpster, the specter of inflation, a war without end in progress and now the rumblings of the Russian Bear. We actually have US aircraft intercepting Russian bombers approaching US airspace a' la cold war! The attack on Georgia was certainly a long planned exercise that the Georgian president walked into. After handing out Russian passports by the truckload, conducting military exercises on the boarder and building up large military stores this campaign was very well planned. Unlike the Bush administration they seem to have put this one together pretty well. As the Georgians got spanked, everyone on the Russian periphery was warned - the Bear is back, the USA is powerless to help you. The more important question is what is the Russian objective? Is this limited to curtailing the Republic of Georgia which happens to have a nice oil pipeline running through it's territory, bypassing Russia, or does it portend larger objectives.

The Poles have already seen enough - they know the Russian routine and quickly inked a deal to deploy missile interceptors on their territory. Here, the Russian Bear again roars indignant and threatening - over a system that can only defend against perhaps ten missiles. Technically, this is a mere speed bump compared to what Russia could deliver to overwhelm this paltry defense. So, what gives with all the threats and hysteria from the Russians?

Essentially, the only logical conclusion is that it is the symbolic nature of the deal that offends the Russians. It certainly can't be the military capabilities of this system. Symbolically is shows the US in solidarity with Poland and possibly with other countries that have escaped the Russian orbit. Unlike many middle eastern countries (or the Bush administration for that matter) the use of logic will usually root out true Russian objectives. The overriding objective seems to be to regain Russian influence and prestige in the former Soviet Republics, while limiting the influence of western powers especially the USA. This may not be a return to the Moscovy empire of before, but the reduction of its neighbors to a vassal state seems to fit the plan.

Now that Russia is rested and ready, flush with oil cash and with a resurgent spirit and bold leadership they feel they should regain their rightful place as one of the preeminent powers in the world. Meanwhile, the USA has been fixated on Iraq where the action is certainly - Not! The USA is practically bankrupt anyway in need of Chinese support to pay its debts. The time is ripe for a Russian resurgence.

What's next? Ukraine is certainly on the target list, the Baltic states probably and of course Georgia. The expansion of Nato has put the US in a perilous position since it is now guarantor of several states that boarder on the Russian periphery but which would be difficult to support against a Russian onslaught. This onslaught would take the form of an application of soft power, economics and finally military power.

In supporting these states the US and NATO is in a similar position as the British and French who extended "protection" to the Poles in WWII even though they lacked a clear means of supporting them. Remember in 1939 Poland was far removed and shared no boarders with the Allied Powers and would not admit Russian troops on their soil. How could you give assurances to them? Based on what? What support is the US and NATO willing to spend to support some of these republics? Poland is one thing, but the Baltic States, Georgia and Ukraine are in a perilous position. Will they tack to Moscow or look for more empty assurances from the Americans?

The ball is back in Russia's court, try to guess where they go next.

Who is this guy?

Why Winston? It's not my real name, but its been my nom de guerre for quite some time in different blog posts. Winston is the character from George Orwell's 1984 that gets caught for having unapproved sex and other things and it brutally interrogated, broken and finally learns he loves big brother as the executioner's bullet pierces his skull. Winston is also Winston Churchill a playful sort that could be very creative, but who could certainly stir up quite a bit of trouble while stepping on big toes. So, Winston is a good pen name to use when you may stir up some trouble and do not want the repercussions to boomerang on you. Perhaps an unwelcome series of IRS audits, getting fired from a job, put on the airlines don't fly list and things of that nature. Of course the authorities can always track you down if you've gone too far, but the typical corporate bozo would have some trouble.

Is Winston a liberal democrat? Hell no! Winston is a realist, neither Republican nor Democrat; more Libertarian, but a realist about power, human nature and the nature of government. Good old Winston Churchill flip-flopped his party several times and thankfully he did. Blindly following some creed or ideology is a religious exercise best used when our brain is not working too diligently.

What does Winston have to say? He has plenty of things to scream about. Politics, corporate culture, world affairs. Winston has been a long student of history: Roman, Greek, and European not just the American flag waving stuff they give in school as though history began when America was discovered. I have interest in other cultures too. China has a very exciting history, Mezoamerica has some real funky stuff. Of course I live in the USA and primarily that is influenced by western culture, but when dealing with other cultures we can never assume they are "like us".