Thursday, October 23, 2008

Greenspan Shocks America

Today, in testimony before Congress, former chairman of the Federal Reserve Alan Greenspan said that he was "shocked" at the breakdown in U.S. credit markets and said he was "partially" wrong to resist regulation of some securities. Economists and others who had been predicting the current credit debacle were even more shocked that Greenspan said he was shocked. They were wondering what he thought would happen when he kept interest rates at 1% for so long.

Greenspan provided even more shocking testimony when he said, "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity -- myself especially -- are in a state of shocked disbelief." It's hard to imagine that someone with his knowledge of history of the way economic markets work could even be mildly surprised that lending institutions failed to protect shareholders equity. Perhaps he had forgotten about the savings-and-loan debacle of the late 1980s and early 1990s. This resulted in the failure of 2412 savings and loan associations. The ultimate cost of the crisis is estimated to have totaled around $560.1 billion, about $324.6 billion of which was directly paid for by the U.S. government—that is, the U.S. taxpayer.

The type of delusional thinking that Greenspan was engaging in was recently termed "market fundamentalism" by George Soros the famed investor and someone who could've provided better guidance for the supervision of the financial institutions than those who were actually in charge. Mr. Soros recently provided a stinging denouncement of the notion that financial and credit markets could be self-monitoring. When children play with money some grown-ups need to monitor them.

If only Greenspan had seen the movie "Wall Street" and heard the character of Gordon Gecko utter the famous words, "Greed is good." What did Greenspan think was going to happen in an environment where executives of financial institutions were rewarded tens of millions of dollars for their successes and had no penalties for their failures? This country needs people in charge of the Federal Reserve and Secretary of the Treasury who have a knowledge of the way people really are in addition to their credentials in finance and economics.

Tuesday, October 21, 2008

Presidential Polls Are Not Quite Useless

With two weeks to go in the election many people are carefully watching the presidential polls, particularly the state-by-state ones that will determine victory in the Electoral College. Political polls are based on models of people who will most likely vote, or people who voted in the last election, or some combination of both of them. This model has flaws that are becoming greater as time goes by. Foremost among them is that telephone polls don't include people who don't have telephones. Not many you say. Wrong! Many young adults, even professional ones don't own a landline. A significant number of "poor" people don't have landline to either. So these subpopulations cannot be included in telephone surveys.

Telephone polls also encounter the language problem. There are many American citizens who speak primarily or only Spanish, or another language. These people are excluded from telephone polls and become an important population subset that is not represented in the findings. The fact that these people tend to vote Democratic skew the results towards Republicans.

This year there is a special subpopulation that isn't accounted for in the sampling procedure used by telephone surveys. The Democratic Party has enrolled millions of new voters across the nation, and particularly in key so-called battleground states. If the Democratic Party enrolled these people, it is logical to assume that a significant majority of them will vote Democratic.

Telephone surveys never include people who refuse to talk to the pollsters. So by definition, telephone poles leave out a population subset that is hard to replicate.

If you are a McCain supporter hoping that he will close the gap, don't rely on poll information to support your belief that the race is getting closer. If you are an Obama supporter, you can't be sure whether all your supporters are included.

People have all too often said that bad data is better than no data at all. That is one of the most shortsighted, ignorant statements possible.

Saturday, October 18, 2008

Britney Spears Wrongfully Persecuted by Los Angeles

Forget about the world economic crisis. Put the presidential election on hold. The fate of the Western world hangs in the balance as a Los Angeles jury failed to reach a verdict after the first day of deliberation in the sensational trial of Britney Spears. The case involves charges against Ms. Spears that she was driving without a valid driver's license at the time she was in an auto accident in August of 2007. In fact, Ms. Spears had a valid Louisiana driver's license, but the merciless criminal justice system of the city of Los Angeles wants its pound of flesh, insisting that Ms. Spears should have had a valid California driver's license.

Given Ms. Spears state of mind at the time of the accident it's a miracle she had any kind of driver's license. Fortunately for her, at the time of the accident, her faithful following of paparazzi was right there to help extricate her from any danger. We all remember the Los Angeles city criminal justice system from its botched prosecution of the O.J. Simpson trial to its brutalization of Rodney King. In an apparent effort to rescue its tarnished reputation, the Los Angeles criminal justice system has focused its laser like vision on poor Ms. Spears. This comes at a time when Britney seems to have gotten her act together, at least for a few months. For the first time since 1999 she has a hit single that has gone to the top of the Billboard chart. What could be more important!

No doubt millions of Americans will spend this weekend in prayer that justice is rightfully done for Ms. Spears. The fine young lady who has put a sordid past behind her, and become a role model for all young American women is no doubt biting her nails awaiting the jury's final verdict. Rumors that Paris Hilton has gone to support Britney in her hour of peril are unsubstantiated at this time.

Wednesday, October 15, 2008

Obama Wins Third Presidential Debate Handily

In baseball you get three strikes and you're out. There were three debates, and each time Senator McCain tried to get the best of Senator Obama. He didn't succeed in any instance and after three tries he too is out. McCain attacked early and often, but spent too much time attacking and too little time making his own case. McCain needed to make a case for why he would be the better candidate and what he could do that Obama couldn't. He failed to do this, and continued on what are his essential talking points which most of America could have recited with them.

The three debates gave Senator Obama a chance to display his stature and ability to assume command of this country, which has been leaderless for some time. Obama was cool, calm, and collect and responded to almost all of McCain's attacks and charges effortlessly. McCain did score a few points, but consolation points when you are behind in the polls don't matter very much. McCain initially seemed energized, but as the debate war on he appeared old and tired. 72 year old man has the wisdom and ability to run a country, but McCain is not one of them.

The attacks by Senator McCain were mostly tangential and the 700 plus point drop in the stock market only served to emphasize that there was one main issue, the economy. Trying to paint Obama as a tax-and-spend liberal is hard when the so-called conservative president for the last eight years has spent the economy into the ground while cutting taxes.

Senator McCain was clearly an angry man tonight. For much of the evening a frozen plastic smile covered his face. He sought to attack Obama whenever possible and make faces when Obama successfully countered his point. Do we need an angry man for our leader? Or do we need a leader with a more positive vision and a better sense of what America needs?

Presidential Polls: Virginia for Obama?

The latest CNN poll shows Obama with a 10 point lead over McCain in Virginia. What? Virginia goes Democratic? This hasn't happened since 1964 when Lyndon Johnson overwhelmed Barry Goldwater. Have too many Washington bureaucrats moved into Virginia and turned it against its rightful owners? That's certainly a possibility. It's also possible that independent Virginia voters have looked at the past eight years, looked at Senator McCain, and wondered if he was a solution to their problems.

Maybe Governor Palin was only speaking to large crowds of the faithful Joe six packers when she was in Virginia telling voters how dangerous it would be to vote for Obama. The most dangerous thing for the people of Virginia, and the rest of this country, is the state of the economy. You have to be a real Governor Palin zealot to not be frightened at the prospect of her being one heartbeat away from making decisions about an economy so badly damaged. Can anyone imagine her sitting down with Prime Minister Brown of England or any other European leader and being able to converse on equal terms about economic decisions? If you can, then your imagination has taken hold of you.

It seems that numbers of rural voters all across the so-called "key battleground states" have decided that they would rather take a chance with the supposedly unknown Senator Obama then with the tried-and-true Senator McCain. After what seems to be a decade of campaigning, what is it all about Obama that people really need to know that they haven't already seen. The people of Virginia and the rest of America have very little interest in the loose association that Senator Obama had with the former terrorist Bill Ayres. The McCain-Palin attack plan was a failure. Time is running out. Can Senator McCain still win? Yes, but the odds get longer each day. And clearly, the people of Virginia seem likely to give their electoral votes to the man Senator McCain tells them they can't trust.

Monday, October 13, 2008

Bush Legacy: America near Ruin

As the Bush (also known as the Joe six-pack) presidency in nears its end, its legacy has become very clear. The country is in a financial disaster that could possibly surpass that of the Great Depression. We are in the fifth year of the war in Iraq where things have gotten better, but no end is in sight. This was a war the Bush presidency took us to with lies, false information, and an ongoing agenda of fear mongering. At the same time, Afghanistan which was nearly won, is now nearly lost.

The free-market system of banking and finance is in total shambles and countries around the world must work together to prevent a global meltdown. The initial cause started here with an absence of any regulation of the financial marketplace that led to systemic abuses ranging from fraudulent home loans to the major financial institutions on Wall Street lying to themselves, lying to their shareholders, lying to the government, and lying to the American public about their true financial state. In the end, the financial institution survivors had to be rescued by the taxpayers of this country. All this happened while the president was keeping us safe from unnamed horrors abroad.

Even the so-called "safe" giant insurance companies found themselves facing financial difficulties that few would have imagined. It all comes back to the commander-in-chief. What the president did, he did poorly. He mismanaged the war and ran up the biggest budget deficit in history. And this was supposed to be a conservative president? What he failed to do was legion, most importantly provide leadership and see to it that the country was better off at the end of his administration that it was at the beginning of his administration. In the end, when his leadership was needed, he had none to display and his credibility was gone. The reputation of this nation is a fraction of what it was when he took over.

Wednesday, October 8, 2008

Obama Finds His Voice as Professor and Pastor

The heat in a presidential campaign can bring out the best in a person or the worst in a person.

Senator Obama seems to have found his voice, especially in regard to the economy, as the campaign heads into the final weeks. It was remarkable that he was able to hold the attention of a crowd of 21,000 people in the rain in Indianapolis, Indiana. The people of this country need to understand what's at stake but they also need someone who can provide a strong positive vision so that we can believe we will survive this crisis.

Senator Obama Wins Second Presidential Debate

Senator Obama gave a sterling performance in the second presidential debate while Senator McCain seemed tired and old beyond his years. Senator Obama spoke crisply and emphasized his key points while making good eye contact with the audience. Senator McCain continued his ineffective attack on Obama and repeated most of his points from the previous debate. It is questionable as to whether Senator McCain actually reads the newspapers. He was still harping on the importance of the surge and victory in Iraq when today's papers carried statements from the outgoing British commander in Afghanistan that the war was unwinnable. Message to Senator McCain: we're losing in Afghanistan.

Senator McCain emphasized his experience but talking about events that occurred during the Reagan administration, and even referring to Teddy Roosevelt, made him look out of touch with the current economic crisis. Senator Obama made a point of emphasizing the need for a lead it to be able to "look around the corner" and think about what's going to happen next as opposed to always being in a reactive state. While Senator McCain appeared to be more cordial at first, he clearly has disdain for the younger man who is now increasingly being seen as a good more commanding leader despite his lesser experience. McCain fails to see that experience by itself is not a recommendation for leadership.

While Senator McCain saw the provision of health care as responsibility, Senator Obama saw it as a right of all Americans. Senator McCain's emphasis on turning to the private sector for health care seems ill chosen when the financial private sector has collapsed and the health-care private sector is best known for its attempts to deny or limit to policyholders. A woman in the audience had a good question when she wondered if we should make health care more like a public utility. Unfortunately neither senator chose to address this issue.

When Senator McCain referred to Senator Obama as, "That one," he lapsed to a level of disrespect heretofore not seen in presidential debates. Senator McCain's one attempt at a "new initiative" whereby the government would buy up mortgages, turns out to be in the plan that was passed by Congress last week. If Senator McCain can't be bothered to read, then he ought to have better staff members who read what he should and remind him of what he should know. This was an evening Senator McCain needed to win in a fashion that would turn around the campaign. Unfortunately for Senator McCain, the evening turned out the exact opposite of what he needed.

Tuesday, October 7, 2008

McCain to Cut Medicare

According to the Wall Street Journal, “John McCain would pay for his health plan with major reductions to Medicare and Medicaid, a top aide said, in a move that independent analysts estimate could result in cuts of $1.3 trillion over 10 years to the government programs. The Republican presidential nominee has said little about the proposed cuts, but they are needed to keep his health-care plan “budget neutral,” as he has promised. The McCain campaign hasn’t given a specific figure for the cuts, but didn’t dispute the analysts’ estimate.”

In a time when seniors are struggling to make ends meet, and retirement plans are unraveling, Senator McCain once again demonstrates how out of touch he is with the American people. With his excellent medical plan as a member of Congress Senator McCain doesn't have to worry about the details of Medicare, or reduced Medicare benefits. Is McCain actually trying to alienate America's senior citizens? Hard to know. Stay tuned for further announcements.

Sunday, October 5, 2008

Palin Damned Mixed Up Over Coffee Cup

At a rally on Saturday in California Governor Palin, whose reading habits are known to be very light, misquoted something she claimed to have read on a Starbucks coffee cup. (Source: LA Times)

“It’s like kind of providential yesterday what happened to me,” Palin said. “I am reading on my Starbucks mocha cup the quote of the day. You’ll never believe what the quote was! It was Madeleine Albright, former secretary of state and U.N. ambassador, and Madeleine has as her quote of the day for Starbucks — now she said it, I didn’t say it — ‘There is a place in hell reserved for women who don’t support other women.’ OK now, thank you so much for receiving that well, I didn’t know how that was gonna go over. And now California, let’s see what a comment like I just made, let’s see what it will be turned into . . . newspaper.”

Unfortunately for Governor Palin, she put her foot in her mouth way past her epiglottis. Albright didn't say that. The accurate quote is, "There's a place in Hell reserved for women who don't help other women." This is what happens when Governor Palin is turned loose and speaks what's on her alleged mind. It now seems that the McCain campaign was quite correct in keeping Governor Palin under tight control. The governor is far worse than a loose canon; she's a loose thermonuclear verbal bomb.

Based on the stories coming out of Alaska, I suspect that behind Governor Palin's charming political smile lies a very dark heart. With thirty days to go in the campaign, there are plenty of opportunities for Governor Palin to show us who and what she really is. And many more opportunities for Tina Fay to immortalize her on Saturday Night Live.

Thursday, October 2, 2008

McCain: Life Isn't Fair

John McCain's astonishing discovery that life isn't fair, which he shared on Fox and Friends, can be viewed as one of the revelatory discoveries of this presidential campaign (see below). Gee John, if life isn't fair for someone who has more houses than he can remember and more cars than he can count, can you imagine how it is for the rest of us who live on a mere pittance compared to what you. McCain was referring to the fact that Obama has greatly benefited in the polls from the economic crisis. That isn't fair to you? Seems to me this economic crisis occurred under a Republican administration which had all but abandoned the concept of regulating the financial markets.

If life doesn't seem fair to you, then can you imagine how it might seem to a single mother raising two children earning less than $20,000 a year. Might you imagine how it seems to a couple with two children earning $50,000 a year between them but spending $2000 a month for health insurance. Better yet, how unfair would life be for a working person with a chronic medical condition who doesn't have any health insurance and cannot obtain necessary and appropriate medical care.

John McCain: Losing in Every Possible Way

Recent CNN polls indicate that Senator Obama has taken the lead in key battleground states such as Florida, Minnesota, Virginia, Nevada, and Missouri. This represents a significant shift in the last two weeks. At the same time, a video of a meeting between John McCain and the staff of the Des Moines register shows an irate John McCain losing his temper, and at times sounding a bit unstrung (see below). When an unseen member of the newspaper stated that Republican conservatives had criticized Governor Palin’s fitness as a candidate, McCain challenged the staff to name someone without giving them the opportunity to do so.

Almost all the polls show that the majority of the independent voters believe that Senator Obama had won the first debate. While Obama talked directly to McCain, and agreed with him on occasion, McCain did not make eye contact with Obama and had a frozen smile on his face whenever Obama said he was wrong about some issue. McCain's tactic of constantly saying that, "Obama doesn't understand" did not have the desired effect. McCain displayed a consistently truculent attitude in relations with Russia, Iran, and North Korea. Starting wars is not the best way of protecting the American people as we have found out with our current president.

McCain's lack of understanding of economic issues and the current crisis facing us has been evident for some time, highlighted by his statement that the, "the economy was fundamentally strong." Recent polls reveal that the voters with the most at stake in the financial crisis, persons with incomes of $75,000 or more and in the age category of 50 through 64 had made a significant in shift in their support of Obama from McCain. McCain is losing and he knows it. As much as Hillary Clinton wanted to become president, McCain needs to become president even more. By becoming president McCain can finally attain a higher rank than his father the Admiral who McCain feared and hated at the same time. This is an opinion, not a fact, but by training I am more than an amateur psychologist.