The GM Affect

Interest rates have gone haywire the last couple of days. You won’t hear it reported in the media though. Why? Because it would look bad for certain economic positions and actions taken by the current Administration …at least that’s my take on it…

The problem is that the bond markets are upset about the way the Obama Administration has handled the bond holders for Chrysler and fear the same will happen with GM. At the administrations urging, the judge in the Chrysler bankruptcy case forced the bond holder to take on more risk.

Usually bond holders are the first to be protected in a bankruptcy but this time it was other interests that were protected first. (think Unions) The bond holders took a back seat to almost every other concern.

Before you go saying those ‘evil’ bond holders (lenders) deserve it, think about this. Bond holders invest in companies by making loans to them because they are risk adverse. Investing in normal stocks is to risky for these investors. There reason? They are investing money from pension funds and insurance companies. This money needs to be invested in areas with very little volatility and steady returns with low risk to the money. (think about your pension, you want safety right?)

The way these bond holders are being treated is a huge change from how large restructuring like this normally takes place. And this sets a dangerous precedent going forward. So with a bankruptcy from GM looming on the horizon, the bond market got very, very nervous and everyone backed out of the market in one day!

I’m calling this The GM Affect because it was so awful. We saw rates jump 1% in less than 24 hours ….by the way… That is completely unheard of!

Rates have come back down today, but I don’t know how long that will last. Rates jumped up to 5.5% from a low the previous day of 4.5%. Rates today are back down to 5% but no one knows for how long.

With a very scary economic report just out about a 5.7% decline in GDP the first quarter of this year and about companies slashing inventories and jobs (approximately 2,000,000 more jobs lost) I’m not sure how much longer rates can stay this low.

So while the Administration rolls our their latest campaign touting the ‘good’ that the stimulus package has done and while they roll out the parties for the supposed 150,000 jobs that were created, our economy has had the second largest contraction since 1981. (By-the-way, only about $11 million of the $45 Billion that has hit the economy was for worthwhile make- work projects. The rest was for one-time payments for welfare and Medicare and for the extension of unemployment benefits.)

I know that this sounds like political commentary and I apologize because it is truly not meant to be a political view point. I'm commenting on my concern about the numbers The numbers don’t lie, and since they don't lie, then someone or something else is lying. Could that something be the government, maybe both parties? Some will point back to the Bush administration as an excuse to support Obama’s actions. Guess what? Bush was wrong as well!

All the economic tricks and gimmicks being tried today have been attempted before. We did here in the late 70's to early 80's. and it didn't work. Heck countries all around the world have tried what we are doing and they will tell you it doesn’t work.

Call it Keynesian Theory, call it Social Democratization, call it whatever you want but understand this. If it is illegal for you to 'kite' checks to cover your debt, then why do we allow the government to do it? (Kiting a check is when you deposit a check from one of your own checking accounts into another and then from that account back into the original account in a never ending circle just to cover checks that you right elsewhere, at some point it will catch up to you.

So why are we allowing our government to do a thing that we would be put in jail for doing? Because of some ‘theory’? Does this make sense to anyone?

At some point we will not be able to print enough money to buy our own bonds to fund our bloated and bureaucratic government. I’m hoping for the best and preparing for the worst. Here’s a link to a great article with the bad news/good news that can help you make up you own mind. http://www.marketwatch.com/story/us-gdp-revised-to-57-decline-in-first-quarter

Contradiction & Accountability

As I watch the swirling controversy over Nancy Pelosi and her constant changing of positions about what she knew about water boarding and other interrogation techniques used on the animals that committed the horrible act on 9/11, I am struck by the level of contradiction in her statements.

Another thing that strikes me as odd is that her colleagues don’t seem to be willing to hold her accountable for her obfuscations. Also, I think it is interesting that many (some in the press even) want to talk about former VP Cheney and attempt to take the focus off of what Speaker Pelosi is doing.

It seems that history has proven one thing time and again. Those who can be defined as Liberal have a close political resemblance to many of the worst actors on the world’s political stage when it comes to double standards.

What I mean here is that those that espouse a belief in conservative values appear to be lambasted for the same hypocrisies committed by those that embrace liberal views. The liberal appears to be able to contradict themselves while avoiding accountability for their hypocrisy.

The Cult of Personality

I’ve come to understand why this is so. I once heard a song by the band Living Color. The song was Cult of Personality and it talked about how ordinary people would blindly follow leaders with dynamic personalities.

What history has shown us is that Dictators, Communist and Socialist use the Cult of Personality to cover their own contradictions and to avoid accountability. They force the populous (you and I) and their political opponents to adhere to one standard while they adhere to another.

This sounds crazy right? But it’s not just the ramblings of a right wing blogger (which I’m not by the way, more of a libertarian/independent thinker type)….anyway, I digress… The way that Liberals use Contradiction and Accountability (or the lack of it as it applies to themselves and application of it as it applies to their political opponents) is spelled out in a strategy written back in the 60’s and 70’s by a political organizer and author named Saul Alinsky.

Rules for Radicals

Alinsky was quite a fellow. His most famous book; Rules for Radicals is basically a play book for causing political change. What is interesting is that the book itself is filled with contradictions, rules for accountability and rules for hiding ones true purpose in order to reach political change.

According to Wikipedia ( http://en.wikipedia.org/wiki/Saul_Alinsky ) Alinsky begins his book with this tribute: “From all our legends, mythology, and history (and who is to know where mythology leaves off and history begins – or which is which), the first radical known to man who rebelled against the establishment and did it so effectively that he at least won his own kingdom – Lucifer.” That’s right, his book uses the Devil as one of it’s sources for how to rebel.

Not withstanding any religious beliefs, let’s not go down that slippery slope; let’s say we believe the bible to be a book of mythology. As in intellectual observation, it is odd that this author would choose to emulate the ‘evil’ force rather than use the ‘good’ forces for his examples.

He goes on to say; “Organization for action will now and in the decade ahead center upon America's white middle class. That is where the power is. ... Our rebels have contemptuously rejected the values and the way of life of the middle class. They have stigmatized it as materialistic, decadent, bourgeois, degenerate, imperialistic, war-mongering, brutalized and corrupt. They are right; but we must begin from where we are if we are to build power for change, and the power and the people are in the middle class majority.”

The Middle Class as a Pawn

It’s not hard to miss the hypocrisy here. Essentially what Alinsky is saying is that he doesn’t like the middle class. However, the political power lies with these masses and if the rebels want to succeed, then the middle classes must be convinced to align with the rebels.

The reference to ‘our rebels’ is to the rebels that have brought about populist social justice themes and are adherents to socialist democracies or so-called Democratic Socialism which in and of itself is another contradiction in terms. How can one have a Democracy aligned with Socialism, it doesn’t work…

Alinsky also felt that the Liberalism of his time was a farce. He saw that movement as docile and weak. His goal was to radicalize the movement in order to bring about his definition of social change ….Socialism…

Examples of his Words in Action

When we look around the world and delve into mankind’s history we see the works and words of Alinsky in practice. Some practiced his words before he even wrote them. Just look at the movements headed by Stalin, Hitler, Mao Tse-tung. Some practiced his words even while he wrote them, look at Ches Guevara, Castro, Qaddafi, Pol Pot and some practice his words today. Just look at Kim Jong-il, Chavez and other Socialist Dictators.

Now comes the billion dollar statement, the one that will get me in a huge amount of trouble with many who read my blogs. The power structures that currently run the Democrat party were educated in the principles of Alinsky and while they may not actively refer to the writings of Alinsky, they instinctively use his teachings to control the political spectrum whether they realize it or not.

Proof is All Around Us

My proof is evidenced in the way that Contradictions and Accountability are handled by many Liberals and some in the media. There is one standard for those perceived to be Liberal and a completely different standard for those perceived to be anything else.

Right or wrong is not the question here, the facts are the facts and they are visible for anyone who chooses to ‘un-bias’ themselves so that they can see clearly. The truth is that Liberalism today has been hijacked by the activist-rebellious-Socialist of the late 60’s and early 70’s and the truth is that they despise the middle class and look down upon them.

The elites who head the Democrat party see their continuants as dupes and morons. They revel in the realization that they (the leaders of the party) have finally learned how to control this vast and powerful middle class bastion and now the party will use this control to completely change the face of America.

So what are you? A dupe and a moron? Or are you a free thinker, an independent citizen? How do you view your own contradictions and how do you hold yourself accountable. Shouldn’t our politicians be held to the same standards we hold ourselves?

Alinsky didn’t think so. Contradictions were to be used to frame debate in a way that would not allow for rebutal and Accountability was to be used as a club to bludgeon opponents with, requiring them to hold fast to a standard which nobody could meet.

Think about it… and while you do, here’s a short list of the current day politicians that learned and actively used Alinsky’s teachings to organize communities and run campaigns.
Obama; Clinton (Hillary); Carville; (there are others, simply watch their actions and see how they deal with Contradictions and Accountability). Can we add Pelosi and Reid to the bunch? I don’t think that would be a stretch.

These are not the ramblings of a right-wing zealot, moreover they are the thoughts and research of a center-right realist. After you’ve done the research, I’d love not know your thoughts. Respectfully, thank you for reading.

In Wonderland

Sometimes when I watch the news I feel as if I’m Alice and I just fell through the rabbit hole.

As I arrived home from another stressful day of barely scratching out a living and working 12-14 hour days just to do it, I was greeted with our President and Secretary “Dodgy The Tax Dodger” Geihtner announcing a new corporate tax program.

As I watched …in disbelief I might add… Secretary Geihtner actually had the gall to admonish corporations who use LEGAL tax loopholes to lower their taxes. He then had the unmitigated nerve to state that the new law would give government the ability to collect back taxes owed by these corporations and wealthy individuals.

Now wait just one cotton pickin’ minute! Is this the same guy that didn’t pay his fair share until he was caught? Isn’t this the same guy that didn’t pay all of his back taxes owed because the statutes of limitation had run out on some of it?

Do we really live in a world where the Sec. Treasury who is supposedly the ‘brightest financial mind’ of our nation can’t even use Turbo Tax to properly file his taxes but is the one lecturing others on the tax responsibilities? Will the hypocrisy never end?

Making American Companies Less Competitive

But let’s look beyond the hypocrisy to the stupidity. While this idea seems to be a good one on its surface and will play well with the ‘class warfare’ types, you know the ones that want to crush the rich and curse the evil corporations, the whole thing will never work.

Here’s why. The rework of the tax code is supposed to ‘punish’ corporations that ship jobs over seas and ‘reward’ companies that create jobs at home. However the tax rate on corporations in our country is confiscatory. We have one of the highest corporate tax rates in the world.

Companies will just choose to move their operations completely out of the U.S. rather than be subjected to further government interference. On top of the regulations on CEO pay and other socialistic policies, more capital and more companies will leave our shores not stay here!

We Pay Anyway

But that’s not the real point is it? In my usual fashion I’d like to take the conversation to where it belongs and it’s a direction that you are not likely to hear from any normal news cast.

No matter how much corporation is taxed they never pay it. The cost of the tax is just reflected in the retail cost of the goods when they are brought to market. That’s right; we pay the tax, not the corporation.
Higher taxes and tightening loopholes will only lead to more companies leaving our shores. It will lead to less jobs here and it will lead to higher prices on everything. We pay anyway.

Evil Corporations!

Now I know that many of you know that I am self employed and as such I am ‘part of the problem’ in this country. After all, I don’t conform, I’m ambitious, I work hard and I’m independent. You can’t fit me a box so I must be ‘dealt’ with.

That’s right, I’m a CEO and I own an evil corporation. But I’d like to say something here. As a dumb hick from the Southside of Atlanta with a high school education, I’ve worked hard. I’ve taught myself and I’ve put a lot of sweat into what I do.

Over the past two years I’ve endured a huge amount of sacrifice and worked 60, 70 and 80 hour weeks without earning a single dime! I’m barely holding on, but I’m holding on. And when things turn around I deserve to make an unlimited amount of money because of my sacrifice. Who has the right to tell me otherwise?

The IRS and The Hospital

Well it seems that the IRS has the right to tell me otherwise. After years of paying my taxes on time, paying 7.5% of other peoples taxes (BTW – that’s what employers do, they pay 7.5% of someone’s wages to the Federal government for the privilege of having an employee, oh yeah, and don’t forget the additional 15% we pay on ourselves. Sound crazy? It is!)

….sorry, I digress…. I received a letter form the IRS saying that I owed back taxes called FUTA taxes for employee payroll from 2005. When I called I found out there was more, they believed that I operated my business out of California even though I’ve only been to that state once in my life, I could not get them to understand otherwise.

So what’s my point? My point is that the way I was treated was so unprofessional and so harsh that the stress sent me into a tail spin and I ended up in the hospital (that story will come soon, I’m writing it now so stay tuned).

You see, I am to be ‘dealt’ with as far as this administration is concerned. So for those of you who think I’m some conservative hack and guys like me need to be dealt with, watch what you wish for. I’m sure that when the government is finished with guys like me, they’ll turn on you.

Remember, government does not create wealth and at some point those that wish to redistribute wealth will run out of other people’s money, that’s when they’ll come after yours.

BTW – I don’t owe the tax and I have proof. Do you think that matters to the IRS? The answer was and is a resounding …NO!...

Stay tuned for the unbelievable TRUE story of what happened when I called into IRS Customer Svc…. “Coming Soon”