My Beauty Best Teacher

The President of the United States fills a lot of important roles in our political system- Commander-in-Chief, Chief Executive, Chief Legislator, Chief Jurist, Chief of State, Chief Diplomat, Head of Political Party, Popular Leader, etc- and to the list of these roles we now apparently must add 'Investor-in-Chief.'

Head of executive branches, whether at the state level as Governors or at the national level with our President, increasingly believe that it is part of their job description to take the money that taxpayers send to them to perform important government functions and instead gamble that money away on risky investments- the more risky and uncertain the investment, the more it seems that these executives are likely to dump precious taxpayer money into them.

Here in Michigan, we had a Governor that won a second term of office believing that she was a good Governor because she dumped taxpayer money into 'green energy' and 'cool cities' and the movie industry; upon further review and looked at with a true eye for costs and investment gains, these investments all turned out to range from bad to poor to horrible. Taxpayer money was distributed in a corrupt manner based more on political favors and little to no lasting gains came from these investments, certainly not enough to justify calling these schemes 'investment' in the private marketplace.

At the national level, Barack Obama believes that one of his major roles as President is to direct investments for the future, in spite of his lack of experience, training, or record of success in investing. No one would ever hire him to direct their personal investments, and yet as President he is doing just this with our public money at a time when public money is in short supply and needed ever more vitally. And the process that these investments are awarded are corrupt, filled with political considerations and backroom deals that would put any private businessman in prison for their actions.

The Washington Post writes about this role of the President in its article Barack Obama, investor-in-chief. From the article:

Would you buy a used car from Barack Obama? Or would you want him managing your 401(k) investment retirement plan at work? The president, of course, isn’t in that business specifically, but in a larger sense he’s been investing our money, picking the businesses he thinks will fuel economic expansion, new jobs and the technology of the future, and rebuild the nation’s fraying infrastructure.

All it takes is money - ours - he says, and he’s been spending it as fast as he can in a failed attempt to get the economy growing again. The economic policy term for this is “central planning,” wherein the government tries to pick the winners and losers and dumps hundreds of billions of dollars into various business sectors in the belief that it will pay off in the long run.

The government isn’t very good at this business, as we’ve seen in the disastrously ineffective $825 billion spending stimulus plan that President Obama and the Democrats shoved through Congress in 2009. Much of that money went into the budgets of countless federal departments, agencies and other programs that spent it. Still more went to states, counties, cities and towns for infrastructure programs or to keep public workers employed. A lot of the money was given to businesses that Mr. Obama thinks will be good for the environment, though his investment decisions didn’t always work out the way he hoped.

Consider the White House-backed solar energy firm Solyndra Inc., which declared bankruptcy this week after pocketing a $535 million loan guarantee from the U.S. Department of Energy. Critics called the deal a “stimulus black hole.”

When Mr. Obama visited the Solyndra factory in May 2010, he called the company a success story that was “leading the way toward a brighter and more prosperous future.”

He was quite proud of his investment, boasting at the time, “Less than a year ago, we were standing on what was an empty lot,” but now here was this shiny, new factory that “is the result of those loans” backed by his administration.
It was later learned that the White House fast-tracked Solyndra’s loan application, rushing Mr. Obama’s pet project through without a lot of serious checking. Federal investigators said that the administration had bypassed procedures to safeguard the taxpayers’ investment.

Mr. Obama is big on the solar-panel industry and under his policies, the government has dumped a lot of our money into it in the past three years. But it turns out that the U.S. industry has not turned out to be the bonanza that he sold to the country. Prices for solar panels have fallen because of strong competition from China, making the fledgling industry precarious at best without heavy federal subsidies.

Evergreen Solar Inc. filed for bankruptcy last month after being forced to close its plant in Massachusetts that was built with state and local government subsidies.

Senate Energy Committee Chairman Jeff Bingaman, New Mexico Democrat, says the loan guarantee program “has not worked as well as we had hoped.” Sounds like a Wall Street investment banker defending a fat bundle of subprime real estate securities that went bad.

The solar-panel industry is not the only “investment” Mr. Obama has sunk a lot of our money into. While the plants build with his loans make for great campaign photo ops, the costly reality is that government is trying to pick the winners and losers in our economy instead of the private sector.

But Mr. Obama thinks he’s good at this investment business and now he is trying to convince us to buy into to a new federal “infrastructure bank” that will make off-budget grants and loans to rebuild “roads, bridges and ports and broadband lines and smart grids” with $30 billion of our money.

The bank would put “all those [unemployed] construction workers” back to work, he said. And it would provide Mr. Obama with lots of photo ops at jobsites, saying “look what I’ve done for you.”

If this sounds familiar, it was sold to us in the guise of the 2009 job stimulus bill that was supposed to put the construction industry back to work. Some short-term jobs were created but when the building projects were completed, the jobs ended. The construction industry today is in a recession.

Making Mr. Obama the investor-in-chief, deciding how and where the nation’s capital resources should be spent, hasn’t worked and isn’t going to work. Ask Japan, which has gone on a public-works spending binge though its economy has been in a slump for two decades.

Better to shift federal public-works spending decisions to the states, along with the gas tax money for highways, and let them - not remote federal bureaucrats - set their own priorities. Broaden the tax base by eliminating dozens of loopholes, then cut business and individual tax rates, and slash the capital gains tax to unlock needed, job-creating investment capital.

Let the marketplace make the investment decisions that have made America the largest and most successful economy in the world. Mr. Obama has got better things to do with his time, like trying to figure out why his job approval polls have fallen to 39 percent.

U.S. Rep. Gary Peters’ campaign went on the offensive this past week, repeatedly questioning why it keeps voting to enlarge the size of government and empower it further when it obviously has trouble publishing something as simple as the mandatory financial disclosure statement that his Republican opponent, Andrew “Rocky” Raczkowski, filed twice.

Raczkowski said he submitted the statement disclosing his income and assets twice but he has no explanation as to why the Clerk of the House of the Representatives does not have it on file. The House is currently run by the Democrats, and Gary Peters is a Democrat, but apparently that does not explain the mysterious missing disclosure statement.

Some people feel that this utter lack of responsiveness and efficiency demonstrates once again why it is not very intelligent or wise to empower the federal government to make decisions about your personal life, such as healthcare, but others are so shocked that the government makes mistakes like this that they can not accept it- Dan Farough, campaign manager for Peters, a Bloomfield Township Democrat sputtered when asked about the situation “Rocky … needs to learn, just like the rest of us, that he is not above the law.”

Via The Oakland Press:

The disclosure law is designed to expose any conflicts of interest that a congressman may have, based on salaries, investments or other sources of income. Ironically, Peters’ disclosure statement provides far more potential conflicts of interest than the modest assets reported by his election opponent.


The incumbent’s most recent report, filed on May 15, indicates that his numerous assets — stocks, bonds, 401(k) accounts and other investments — are worth a combined value ranging from $147,000 to $2.2 million. A former stock broker, Peters’ congressional salary is $174,000.

Raczkowski provided a copy of a disclosure report, dated June 21 in his own handwriting, to The Macomb Daily. It indicates that he earned $161,300 in salary last year from Star Tickets and the Army. The federal documents provide a dollar range when reporting assets — not exact figures — and the Raczkowski report that was provided to the newspaper shows investments in the range of $165,000 to $400,000 and a bank account in the range of $50,000 to $100,000.

So, to sum up, Gary Peters has more conflicts of interest than his challenger, has voted to enlarge the size of government many times over, voted to spend billions of dollars and few know where it is going, supports a President who recently fired his "openness and transparency czar" when he got tired of pretending that the Democrats are even remotely open and transparent, and now is upset that government officials messed up and failed to report disclosure statements that were submitted twice. Gary Peters is now rumored to be thinking about giving more money to the government agencies that failed.

FYI: Shockingly, this post is more balanced that the stuff that passes for 'reporting' at the Oakland Press!

Peter Nwangu in 2007 on an alternate path for more entrepreneurial university financing, for the UNN he proposed:

...raising the investment capital of N14 billion, the management of University of Nigeria Research and Economic Development (UNRED) Foundation shall orchestrate several specific investment and industrial activities under the umbrella of several limited liability companies each headed by a seasoned managing director. Some of these investment and industrial activities are already well defined; others will be selected by consensus based on opportunities in the market place. Specific activities that have been selected and defined include:
UNRED Investment and Acquisition Company:
About 20 to 25 per cent of the N14 billion total capital raised by UNRED shall be allocated to sensible and carefully thought out investments and acquisitions. The managing director of UNRED Investment and Acquisition Company shall operate under the guidance of UNRED Investments Committee to span the national and International Investments market to select prime and profitable capital growth opportunities. This shall be characterized by a good mix of aggressive short-term, high yield capital growth opportunities, and long term stable prime instruments, designed to yield and secure a minimum of 60% annually as a mixed portfolio..."

A a recent article that Charles Moore wrote, I think he put his finger on exactly what is going on today- the success and advance of the twin threats of fear and doubt. Moore, who is a British journalist and former editor of The Daily Telegraph, in an article about Margaret Thatcher, wrote that after the long boom and success of capitalism and free market economics that "the worm of doubt entered the system":

You borrowed all the money needed for the price of a house. This made you, in your mind, though not in full fact, an owner. Because the value of the house was rising, it also made you, again in your mind, richer. The bank, which actually owned the house, found clever ways of mixing and selling on the loans it had granted so that it, too, felt richer. Governments, happy at rising revenues, thought it was their business to make sure that when the symptoms of high risk began to present themselves, they were suppressed.... (then) the roof fell in... (and now) when people now hear words like globalization or capitalism... they feel slightly sick.

Free market economics and capitalism did not lead our nation to failure- rather, during its wild success at making millions around the world more prosperous over the past centuries, communism and socialism and fascism latched on to it, sucking from its prosperity to feed its sick aims like parasites, and over time, many smart people began to become confused and unable to see the parasites from the concepts that they latched on.

Where free markets and capitalism created wealth and encouraged personal responsibility, governments and elites put in place rules and regulations which weakened the foundations of the system, subsidized risky behavior such as sub-prime mortgages and leveraging investments, and gave out handouts to favored industries and distorted the market by doing so. When banks, businesses, and corporations operated in a free market of capitalism, they could succeed or fail based on their own efforts and innovation; but in the new markets, which were no longer capitalistic or free, government subsidies and spending and lobbying and regulation and rules determined whether or not a business, corporation, or bank was successful or failed. And although this was no longer capitalism or free markets, but rather markets once free now twisted to the aims of elites and socialists and communists and fascists, many smart people became critical of the markets or capitalism because of the failures of the government bureaucrats who were twisting and corrupting the system.

And then the parasites of leftism began to weaken and kill the free market and capitalism, and the people cried out 'capitalism and free markets are failing us'- when it wasn't the free markets and capitalism that failed, but rather the people who failed the system.

They were led to this failure by fear and doubt- they did not believe in the hand of the God and the freedom of individuals and life, liberty, and the protection of private property.

The people (or The People, as leftists call them) feared that although they were becoming prosperous and their lives were rapidly improving, they were somehow falling behind others who were advancing more rapidly. Rather than looking at why they were successful in the free market capitalism- because of their hard work, innovation, and yes, luck- they instead demanded government policies to hold back others and help out themselves, corrupting the very system that had brought them so far. They doubted that if people were free and made free decisions, they would make 'the right decisions'- that is, the decisions that they would make if they controlled the other people and had power over them (their definition of 'right decisions').

Rather than just letting go and trusting that the unseen hand of God, trusting to the thousands and millions of individual decisions, and working to ensure that private property rights are strengthened and respected, they doubted that this giant experiment of capitalism and a free market would work, and feared that they would somehow fall behind others in material wealth if they didn't vote for and support people who promised to corrupt the system and abuse the system and circumvent the system. Many people trusted and believed in the power of men to control other men and redistribute property to other men, and in so doing rejected free markets and capitalism.

Fear and doubt came to the people's mind every time there was a recession, or even during periods when great wealth was created but wasn't immediately distributed evenly. The people reacted to the Great Depression by doubting that the free market would correct (as it had done in the 1920's and dozens of times before in the 1800's) and feared that he return to prosperity wouldn't come fast enough- and so they worked to destroy the system, corrupt the system, and make the market less free- and the results were a slight recession during into a decade long destruction of wealth.

And today, government policies and regulations and taxes and laws which corrupted the free market and corroded private property rights have let the worm of doubt creep once more into the people's minds, and in their fear that maybe they won't get to loot the dying Republic of its wealth they vote for Democrats who promise to manage the downfall and distribute the ever-decreasing wealth in the system to their supporters and voters and friends.

To return to success and advance again as a nation in wealth and happiness, we must reject doubt of the free market system and capitalism and trust the people- we need to trust and believe again that the thousands of decisions of free people will create more wealth and make more people happy, and reject those who suggest that having a smaller number of elites make those decisions for us is better. We need to let go of our fear that if we don't control the market and the system that you'll lose out, and instead work hard, innovate, save your money, and invest wisely.

UPDATE 12/7/11: President Obama delivered a major speech today on the economy, in which he expressed his doubt that the capitalist system could continue to provide wealth and prosperity for many and work to make society more equal, and from this place of fear he instead wants to trust himself and his fellow men to run a better system that will somehow do a better job of creating wealth and distributing it than having free people make free decisions.

Via memeorandum, in his Remarks by the President on the Economy in Osawatomie, Kansas, we read the following fear and doubt from US President Barack Obama, one-term Democrat. These are selections from the speech- (you can read the whole thing yourself here if you want):

My grandparents served during World War II. He was a soldier in Patton’s Army; she was a worker on a bomber assembly line. And together, they shared the optimism of a nation that triumphed over the Great Depression and over fascism. They believed in an America where hard work paid off, and responsibility was rewarded, and anyone could make it if they tried -- no matter who you were, no matter where you came from, no matter how you started out.

And these values gave rise to the largest middle class and the strongest economy that the world has ever known. It was here in America that the most productive workers, the most innovative companies turned out the best products on Earth. And you know what? Every American shared in that pride and in that success -- from those in the executive suites to those in middle management to those on the factory floor.

In this passage, Obama communicates to us that his parents believed in capitalism and free markets and personal responsibility and liberty and protection of property. And furthermore, Obama knows that this system worked. But yet, he has this nagging doubt and fear...

But for most Americans, the basic bargain that made this country great has eroded. Long before the recession hit, hard work stopped paying off for too many people. Fewer and fewer of the folks who contributed to the success of our economy actually benefited from that success. Those at the very top grew wealthier from their incomes and their investments -- wealthier than ever before. But everybody else struggled with costs that were growing and paychecks that weren’t -- and too many families found themselves racking up more and more debt just to keep up.

He doesn't BELIEVE in capitalism. He has no faith in people, freedom, liberty, and rights. It's clear he doesn't have any hope that people will make the 'right decisions' (the decisions he would make) and he wants to therefore control other people. He continues:

But Roosevelt also knew that the free market has never been a free license to take whatever you can from whomever you can. (Applause.) He understood the free market only works when there are rules of the road that ensure competition is fair and open and honest. And so he busted up monopolies, forcing those companies to compete for consumers with better services and better prices. And today, they still must. He fought to make sure businesses couldn’t profit by exploiting children or selling food or medicine that wasn’t safe. And today, they still can’t.

We simply cannot return to this brand of “you’re on your own” economics if we’re serious about rebuilding the middle class in this country.

And it is around here that we get to the heart of the matter- in the last quarter of his speech, after ripping on capitalism and freedom for 3/4's of the speech, that we finally here what he wants to do...

So what does that mean for restoring middle-class security in today’s economy? Well, it starts by making sure that everyone in America gets a fair shot at success. The truth is we’ll never be able to compete with other countries when it comes to who’s best at letting their businesses pay the lowest wages, who’s best at busting unions, who’s best at letting companies pollute as much as they want.

We need to remember that we can only do that together. It starts by making education a national mission -- a national mission. (Applause.) Government and businesses, parents and citizens. We need to remember that we can only do that together. It starts by making education a national mission -- a national mission. (Applause.) Government and businesses, parents and citizens. They should be rebuilding our roads and our bridges, laying down faster railroads and broadband, modernizing our schools. Of course, those productive investments cost money. They’re not free. And so we’ve also paid for these investments by asking everybody to do their fair share. And so we have to set priorities. If we want a strong middle class, then our tax code must reflect our values. We have to make choices.

So, in summary, here is Obama's alternative to free markets and capitalism- give him more power. Give him the power and authority to tell employers what to pay their employees, give him the power and authority to combine big government with big business and big labor (ie, fascism), give him and his cronies the power to give money to favored constituent groups to fund pet projects of vanity (palaces, statues, etc), and the power to demand that all of these decisions are paid for by someone else who does not want to pay for it- to use the power of guns to the head to make people give up cash to Obama and his people to feed their wrong ideas about the power of men to control others for their benefit.

Obama is wrong. He needs to be defeated- not just politically, but his ideas and beliefs need to be rejected by all good people and good citizens and patriots and he and his policies need to be forever rejected in decent society. We must instead look to capitalism and freedom and liberty and property protection to our future, and not look backward to the sort of tyranny that Obama is proposing.

Smart Youth Investments goals include:
-To enhance financial management skills among the Kenyan youth.
-To teach the Kenyan youth the practicality of stock trading concepts. This will include the risks and gains involved while trading at the Nairobi Stock Exchange.
-To popularize stock trading at the Nairobi Stock Exchange with the Kenyan youth.
-To encourage the culture of thrift or saving. In the Kenyan economy, there exists several licensed institutions where savers can invest their money and earn a return. These act as an incentive to have individuals spend less and save more.

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via Africaincorp

Richard Gnodde writes in the FT:

For the past five years we have seen a strong period of global growth and wealth creation driven by the opening of new markets, financial innovation, favourable credit conditions and disciplined corporate management. Perhaps more striking has been the breadth of this growth – across geographies, asset classes and industries. We have one global economy, but it is increasingly powered by multiple engines, with multiple sources of demand and liquidity.
The new flows go beyond the increased investment in emerging markets to include investments from those markets into mature economies, and cross-border investments between emerging economies. Since 1990, cross-border capital flows have grown more than 10 per cent annually. Over that period, capital inflows to emerging markets have grown twice as fast as inflows to developed countries. Investment flowing to developing countries now accounts for nearly half of world total FDI inflows, compared with only 20 per cent in 1990. Even excluding China, the share doubled to 32 per cent.

At the start of the 2011 model year, customers will look in vain for four well-known American car brands that were the victim of government policies. While many customers enjoyed these cars and many people had jobs making them, they were unable to withstand enviornmentalists who pushed for higher gas prices and arbitrary fuel standards or government bureucrats who pushed for fewer brands and smaller cars.

The push by environmentalists to make cars smaller and more fuel-efficient is based on the desire for clearner air and to fight global warming. Cleaner air is a worthy goal and speaks to the failures of firm property rights with regards to air, but global warming is a passing fad that is based on religion more so than any real science. And yet in spite of the evidence regarding global warming, the evidence that it is purely harmful, the evidence that humans are the cause of this global warming, or the evidence that government policies will have a meaningful positive effect, the government has acted and put in place 'fuel efficiency' standards that are arbitrary numbers made up by some bureaucrats. In addition to forcing car manufactures to use lighter materials which have led to increases in automobile deaths, for some car brands these government standards are too difficult or challenging to reach.

The second assault on traditional American car brands was waged by government bureaucrats who took advantage of a downswing in finances for GM and Chrysler (caused by government attacks on them through regulation, taxes, cap-and-trade, and other government policies) to seize these formerly private companies, steal the wealth and investments by private investors, and then use the power of government to transfer that power and wealth and investments to government officials and politically-connected unions. Then these government officials, most lacking experience in business in general and almost all lacking experience running automotive companies in particular, decided that these companies they had seized needed 'fewer brands' and 'smaller cars.'

But for the 2011 model year—thanks largely to the huge economic downturn that began in late 2008—four well-known American nameplates have gone the way of the Edsel, so to speak.

And so this year we say goodbye to good American brands such as Hummer, Pontiac, Mercury, and Saturn.
Via Yahoo Auto's:

Of these four, the Hummer brand was the most short-lived. The original Hummer H1 (or Hum-Vee) was a celebrity of the Persian Gulf War. In 2002 came a smaller and (slightly) more manageable version, the Hummer H2. Exactly what made suburbanites decide they needed a four-wheeled facsimile of a machine-gun toting, troop-hauling war machine parked in their driveway is best left to future generations to explain. Perhaps the supersized and fuel-guzzling excess of the Hummer brand will someday look as quaint as towering tailfins from the late-1950s? Or perhaps not.

Pontiac and Mercury always maintained a far more balanced product portfolio during their much longer life-spans. Founded in 1939, Pontiac was introduced as a companion make to prop up sales at GM’s Oakland division. Pontiac immediately outsold, and eventually far outlived, its parent brand. Oakland faded away in 1931. Pontiac’s historical highlights include the 1964 Pontiac GTO (the car that defined the muscle-car era) and the Firebird sports coupe.

Mercury was introduced in 1939, not to boost another brand’s sales, but to fill the price gap that had emerged between Ford and its upscale sibling, Lincoln. Cars like the 1949 Mercury Coupe driven by James Dean in Rebel Without a Cause all but guarantees the brand immortality – even if the nameplate itself has finally driven into the sunset. Years of badge engineering eventually dissolved Mercury’s identity, squeezing the brand out of the Ford Motor Company family tree.

Perhaps the biggest surprise – at least in terms of positive automotive karma – is the loss of Saturn. Created by GM to take the fight to imports, Saturn was marketed as “a different kind of car company,” thanks to a lineup of fuel-sipping small cars and no-haggle pricing policy. If only the cars lived up to the feel good dealership experience. A lack of development and new models left Saturn spinning out of orbit. A list ditch effort to market vehicles built by GM’s German-based Opel division as Saturns proved too little too late.

Fredrik Segerfeldt makes the case for water privitization "...Ninety-seven per cent of all water distribution in poor countries is managed by the public sector, which is largely responsible for more than a billion people being without water. Some governments of impoverished nations have turned to business for help, usually with good results. In poor countries with private investments in the water sector, more people have access to water than in those without such investments. Moreover, there are many examples of local businesses improving water distribution. Superior competence, better incentives and better access to capital for investment have allowed private distributors to enhance both the quality of the water and the scope of its distribution. Millions of people who lacked water mains within reach are now getting clean and safe water delivered within a convenient distance..."the argument against it being that"...privatization increases prices, making water unaffordable for millions of poor people. In some cases, it is true that prices have gone up after privatization; in others not. But the price of water for those already connected to a mains network should not be the immediate concern. Instead, we should focus on those who lack access to mains water, usually the poorest in poor countries. It is primarily those people who die, suffer from disease and are trapped in poverty.They usually purchase their lower-quality water from small-time vendors, paying on average 12 times more than for water from regular mains, and often more than that. When the price of water for those already connected goes up, the distributor gets both the resources to enlarge the network and the incentives to reach as many new customers as possible. When prices are too low to cover the costs of laying new pipes, each new customer entails a loss rather than a profit, which makes the distributor unwilling to extend the network. Therefore, even a doubling of the price of mains water could actually give poor people access to cheaper water than before..."
Via Cato.org

Over at The Futurist, they have a pretty good track record of predicting bubbles, busts, and recessions long before they happen. So it is with interest that I pass on information from the following post called The Next Two US Recessions:

1) 2011 : The tax cuts enacted by President Bush are set to expire at the end of 2010, returning tax brackets to what they were in 2000. Most middle class brackets will rise by 3%, and the top bracket will rise 4.6% from 35% to 39.6%. This is effectively a tax increase that will be upon us in 14 months. At the same time, the Fed Funds rate is at a record low near 0%, and has been for several months. This low interest rate has ended the current recession, but virtually guarantees future inflation. As the Federal Reserve is forced to raise interest rates, liquidity contracts again, the housing prices continue on the correction that was not allowed to complete itself in 2009. A mere rise in the rate back up to 3% could push housing prices down another leg, battering household wealth yet again, and driving yet more people into negative net worth. The housing correction is not fully complete until we have sustained a Fed Funds rate over 3% for at least a year. The timing of this could combine with the tax increase, which would create a joint burden too heavy for the economy to bear, causing a new recession in 2011.

This situation could be avoided easily, by reducing the budget deficit through the quaint notion of spending cuts instead of tax increases that stifle incentives and encumber small businesses. However, barring a seismic shift in the 2010 congressional elections that dispose of many Democrats and replace them with fiscally conservative Republicans (themselves an endangered group within the Republican Party), I do not see the government taking prudent preventive action.

I agree with this assessment. It does not take a genius to recognize the effects of the Democrats push to end the Bush Tax Cuts and raise our taxes. Businesses that can move profits and investments to 2010 will do so, and this shifting will artificially lower profits and investments in 2011, causing an already weak economy to drop into a double-dip recession.

This coming recession, like the one that we are in today, will be directly caused by policy decisions made by Democratic Congressman, Senators, and our Democratic President, helped along by Democrats in state governments around the nation. There is no way to avoid it. Jobs will be lost, our standard of living will drop, long-term prospects for our nation will suffer as our federal government piles up more debt, and our children and grand-children will pay for our mistakes today.

Roben Farzad writes in Businessweek:

In many ways, Africa's economic situation seems hopeless. While $625 billion in foreign aid has poured in since 1960, there has been no rise in the region's per capita gross domestic product, notes William R. Easterly, economics professor at New York University. What's more, from 1976 to 2000, Africa's share of global trade dropped to 1%, from an already negligible 3%. The U.N.'s scale of human development, which considers health, education, and economic well-being, ranks 34 African nations among the world's 40 lowest. Thus far, foreign aid hasn't made a dent.
Greed, however, might. Thanks to the global commodities boom of the past few years, sub-Saharan Africa's economies, after decades of stagnation, are expanding by an average of 6% annually—twice the U.S. pace. And like bees to honey, investors are swarming into the region in search of the enormous returns that ultra-early-stage investments can bring. Blue Financial, for example, has already netted its early private equity backers a ninefold gain thanks to the 385% rise in its stock since its October, 2006, initial public offering in Johannesburg. Emerging Capital Partners has bought all or part of 42 African companies this decade and cashed out of 18, with gains on their investments averaging 300%. "The money we can make is matchless," says Emerging Capital Partners CEO Thomas R. Gibian, a former Goldman Sachs (GS) banker.

Often overlooked on this blog and others is foreign policy. Those who follow the War on Terror in Iraq and Afghanistan usually only do so as a reflection on US domestic policy. Events in North Korea or Georgia serve only to give citizens of the United States a chance to test responses by political actors. Few really truly appreciate that importance of foreign policy, but it was foreign affairs that dragged our nation into the War on Terror, the Cold War, Vietnam, Korea, WWII, WWI, etc. It was foreign policy that led to crisis in the Balkans, Rwanda, Somalia, etc. It was foreign policy that opened up markets to our products.

Walter Russell Mead never losses sight of foreign policy and its importance and today put together an excellent article that surveys the major challenges facing the world. Here are some highlights from his article Things Fall Apart, via The American Interest:

...There are times when the ideas of the world’s rulers and the institutions through which they govern are adequate to the needs of the era, and there are times–like the present–when they are not. It is not just the Obama administration that seems mentally and even culturally unprepared to understand much less to guide the events now sweeping through the world. In Brussels, Beijing, Moscow, Tokyo and Delhi — to say nothing of Washington – leaders seem equally clueless, equally committed to outmoded, inaccurate approaches to the issues of our time...

Europe

...The European Union is perhaps the most feckless of the world’s power centers. Its currency is built on a foundation of hopeful assumptions that haven’t panned out: for example that countries as disparate in culture and situation as Greece, Germany, Finland, Ireland and Italy can all live happily under a common currency. There has been no shortage of warning signs for the last decade: there was no secret about the housing bubbles in Ireland and Spain. The falsity of Greek statistics was well known, as were the imprudent habits of its governments and the dysfunctional nature of its economic culture....

...Meanwhile, Europe continues its relentless failure to manage urgent challenges at home and abroad. The Europeans are unwilling (and in some cases, unable) to make the investments that would keep NATO strong; the continuing refusal to take Turkey’s application for EU membership seriously further and decisively marginalizes Europe in the Middle East. Wishful thinking cannot substitute for policy when it comes to the question of immigration, and Europe’s deepening demographic crisis ensures not only a future of population decline but of economic decline and welfare state bankruptcy as well...

China

...Europe is not the only place where leaders don’t measure up to the problems. Although China is not as democratically governed as Europe, on the whole the technocrats of Beijing have handled the last twenty years better than the bureaucrats of the EU. Nevertheless Beijing is confronting a confluence of economic, environmental and social challenges that pose problems which even China’s leadership is unlikely to overcome. Arguments about China’s currency undervaluation, while real, miss the main point: Whether China revalues the renminbi or not, its model of rapid growth based on manufactured exports is reaching fundamental limits... Rising raw material prices combined with consumer fatigue in the malls is squeezing the profitability of Chinese industry just as workers are demanding higher wages. Meanwhile, food price inflation in China is triggering mass anxiety and the financial system appears vulnerable to the kind of bubbles that have wreaked such havoc in the West....

China’s problems go beyond economics. Chinese public opinion, smarting from what it sees as two centuries of humiliation, and now elated by (overblown) press reports of China’s rise, wants its government to follow a more assertive and even aggressive foreign policy. Disputes with Japan, Korea and Vietnam over offshore islands stir deep currents of emotion, and public opinion judges the Chinese government by its ability to prevail in these disputes.

...Looming environmental disasters threaten China’s future, with issues of water, air quality and the usual environmental devastation that accompanies communist governance on a massive scale already taking a toll. The consequences of the one-child policy threaten a demographic disaster as an aging Chinese population will place a growing burden on a society not yet affluent enough to support it...

Russia

Emerging from the sordid shadows of the Soviet Union, Russia faced four great challenges. It needed to come to terms with the horrors and failures of the past, recognizing the enormous evil that Russia both suffered and inflicted during the Soviet period... It has failed, and Russian life and culture remain poisoned by the residue of unrepented horrors and uncomprehended crimes.

...Second, Russia needed to build a modern and competent state that in turn could provide the framework for a new economy and a new society... but with every passing year the critical failure of the Putin presidency to build the stable institutions and solidify the rule of law that a genuinely strong Russian state would require becomes more clear — and more costly....

...The third task, of building the kind of capitalist economy that could provide its citizens with dignity and affluence, has also been left undone. There is no one who thinks that the rule of law is secure in Russia, or that investors (foreign or domestic) have any real security for their investments....

...The fourth task, of finding a suitable world role for a new Russia, has also been decisively botched. Russia has no real friends anywhere in the world; there are those it can bully and those (a much greater number) that it can’t...

Mead also touches on Japan ("a pale shadow of its former self"), India (scandals, poverty, political chaos), Israel, Turkey, etc. His conclusion is one that I also echo:

I hope and pray that the generations of today will not know the sick despair of September 1939; if we are to avoid that kind of fate under even uglier circumstances, we need to start demanding more of our leaders — and of ourselves.

For those interested, check out some books by Walter Russell Mead such as Special Providence: American Foreign Policy and How It Changed the World, God and Gold: Britain, America, and the Making of the Modern World (Vintage), or Walter Russell Mead.

The following are my impressions from Democrat Barack Obama's 2011 State of the Union (SOTU) address. As a social studies teacher, perhaps I will have some comment or analysis that you might think is interesting...

• Before the President even speaks, I was flipping around the various channels listening to their comments, and what I heard over and over is that this speech will continue Obama's attempt to portray himself as a moderate, or that this would speech would help make it look like he was moving more to the center, or that this speech would help him to court independents... he's been in office for 2 years and is still in campaign mode trying to fake people out and disguise who he really is. I can't believe that voters might fall for it- he is who he has always been, a committed leftist liberal Democrat who believes in government control over our lives, less individual freedom and liberty to you, and abortion on demand to correct for the mistakes of humanity.
• His first several minutes were pretty good- hopeful, uplifting, and commenting on how great America was and how we were a tough, innovative country. Then he started lecturing me about how he knows better than me about how to innovate and about how I'm so weak so I need a bunch of help- that was less good.
• About 15 minutes in, and most of this has been some pretty general language about why education is important and why it is important to be smart. I guess this was all to set up that RTTT was a good law (which I disagree with, see earlier post). That's a pretty weak lead-off.
• Around 20 minutes in, I guess in the spirit of 'bipartianship', he re-proposes amnesty to illegal immigrants and pushing for the DREAM Act, which just was shot down by both parties in Congress.
• About 25 minutes in, Obama time-travels back to his childhood in Indonesia, when a nation's prosperity was based on the amount of railroads and roads that the nation had. He suggested that this will be done by having the government coerce private investment and then form a Big Government-Big Business-Big Labor partnership to force us to travel on railroads. I'm not a big fan of fascist proposals from the 1930's myself.
• About 30 minutes in, he begins to lecture Republicans on cutting deficits that he says started "a little over a decade ago" (the election of Bush in 2000?) and lectures the GOP on reforming massive entitlement programs that he has vastly expanded and enlarged and added to over the past 2 years. Is this some sort of Cloven-Piven strategy- wreck everything beyond repair and then talk a good game about unwrecking things? Will voters buy this sort of garbage?
• About 40 minutes in, Obama brags about a series of successful foreign policy initiatives that were begun under Republican President George Bush and that Obama bitterly opposed and fought against. He then talks about his foreign policy ideas that haven't quite worked out yet (but that is not to say that they won't eventually).
• About 45 minutes in, Obama gave a good statement of support for Tunisia. Perhaps he read my blog post criticizing him of being too weak on this issue? Although I wouldn't read too much into this statement- he said something last week of a similar nature and then turned around and called another Middle East dictator and said he really didn't mean it, so we'll see.
• He had a lot of good lines and well-written stuff in there- I really liked the criticism he had for central governments and the defense for our democratic process- that was nice and really jumped out as new and different. I think someone other than him wrote the beginning and end of his speech, but the middle was all his usual liberal hope-and-change nonsense.
• I really liked the fact that there was not a lot of applause and few delays. He delivered a good summary of what he saw as the 'state of our union', which is still strong, with a few problems he needs addressed. Overall, I generally liked it.
• Listening to the commentary, a couple things I heard- 1) Obama still picked enemies- oil companies, Wall Street, the rich, etc; 2) Obama really didn't feel like focusing on foreign policy, showing that he is still mainly a 'Legislator-in-Chief'; 3) Obama spoke about a lot of new 'investments', but there is no money for that; 4) Obama seemed to be going 'small-ball'- talking about 'big things' but really proposing only small little tweaks and nothing big, and this likely indicates that he is just going to play defensive from now until the election, simply sitting in the weeds and criticizing any solutions to the problems that he created, rejecting proposals to deal with any of the long-term issues in favor of winning short term political points. Just imagine if this guy gets a second-term and how unrestrained he will be.
• Republican response thoughts: Ryan delivered one of the best 'reponses' that I have seen. He approached it from the perspective of a calm parent who was non-partisan, and dissected and destroyed Obama's policy responses over the past two years the the challenges that he confronted, from discussing Obama's failed stimulus plan, failed Obamacare, and failed regulations. He was a sound and reasonable voice in response to the empty hope-and-change of Obama. He quoted the wisdom of the Founding Fathers and translated it to the times of today- so sweet! He delivered a fantastic speech that spoke to what makes our nation great- our freedom and liberty and capitalism and businesses and property protection and limited government and free enterprise- that compares favorably to Obama's speech which was about all the things that government can do (poorly). Congressman Paul Ryan for President!
• Comments from the media about Ryan's response were that he didn't deliver any specifics (neither did Obama), that he didn't show leadership (neither did Obama), and that he wasn't serious enough (neither was Obama).

UPDATE: Comments from Sean Hannity's panel- "I feel like I was taking crazy pills while watching that," "he wants to cut spending and proposed more spending on investments and freezing spending on other items- that isn't 'cutting spending'," "let's look at the facts," and "he's doing his best" (this is a key phrase- his best isn't good enough to be President).

UPDATE II: Saw former Speaker-of-the-House Congresswomen Democrat Nancy Pelosi give her thoughts, and she just said that Obama has created more jobs in our nation in his two years than George W. Bush did his entire eight years as President. She just said that. Really. I think she believes it too. If this is true, give me Bush's unjob creation and unemployment of 4% instead of Obama's job creation and unemployment of 10%- at least under Bush jobs weren't created but we all had them, rather than Obama who creates jobs that no one has (it makes no sense Pelosi- I just ingested crazy pills listening to her).

Pelosi followed this with some Kennedy quote about how it isn't about GOP and Democrat and how it is about rising above differences, but those darn GOPers need to be crushed first and only Democratic policies should be passed (crazy pills).

Via GayPatriot, I realized that I hadn't even been following the latest corruption charges coming out of Washington. Turns out the Republicans didn't have a monopoly on corruption, ethics violations, and illegal activities- in fact, the Democrats apparently do more of these things than the GOP ever did!

Check out this article- it goes through and talks about taxpayer-paid extra-marital affairs by Democrat Tim Mahoney. Or Congressman Barney Frank, who was romantically involved for years with a high-ranking executive at Fannie Mae while serving on House Banking Committee, where he coddled and helped expand the lending practices that, in part, brought about the mortgage crisis. Or Democratic Rep. Charlie Rangel, who didn't pay taxes on many of his houses and investments, and is accused of breaking laws related to his many rent-controlled apartment buildings.

Many people wonder at why these scandals are not receiving more attention in the news. After all, the number one reason why the Republicans lost control of Congress in 2006 was not the War in Iraq, but the perception that they were corrupt. Probably it is because the media is run by leftists. But also, it's probably because everyone assumes the Republicans are a good and decent party, and are shocked when it turns out they are human and corrupted by power- whereas everyone knows the Democrats are slimy and shady, and are not at all surprised when they get caught.

Jeffery Sachs contends that:

Proper risk management is critical to the farmers' well-being and their financial viability since it increases their creditworthiness and thus allows them to make investments in high-yield activities such as higher value-added farming (using fertilizer to plant their crops). Engaging in these activities greatly diminishes the likelihood that a farmer will fall into poverty.
Citing the success of other financial schemes like micro-finance in boosting the lives of destitute farmers, Sachs raises the concept of micro-insurance as an instrument to further the progress already made. Micro-insurance as he envisions it, unlike traditional crop insurance, would have the effect of improving the fortunes of both the farmers and the companies involved and carry little risk.

via TreeHugger

Public school districts are facing a major budget crisis in Michigan after almost a decade of disastrous fiscal management and poor policy decisions and school budgets are now facing considerable pressure. Almost every school district in the state is looking at cutting teachers salaries and benefits and many are also considering outsourcing or privatizing support services including custodial, food service, or transportation. Although these options likely do need to be considered, very few districts are looking at another potential source of savings- outsourcing school administration services.

In our district, our administration building supports teachers in many important ways, including budgeting and financial reporting, taking care of accounts payable and accounts receivable, managing the payroll, taking care of grant reporting, keeping track of banking and investments, and service the debt in the district. Administration runs the human resources office, which hires employees, keeps their paperwork current so they remain highly qualified, manages benefits, and provides other services to employees in the district. We have a purchasing office which oversees purchases in the district, whether they be big or small, and we have a technology department to provide technical support to teachers and staff. This whole operation is managed by an expensive and highly paid Superintendent, who works with the community and school board and manages the whole operation.

All of these jobs can easily be provided by private businesses that may possibly cost the district less money or provide them with better services.

Private management firms are out there, providing these sort of purchasing, payroll, HR, and management services to small businesses in our nation so that those businesses can focus on doing what they know best. These firms have many clients and because of the large numbers of clients they can provide more efficiency based on economies-of-scale, lowering the costs of providing these services to a district. They also can draw on substantially more experience and resources than found in school districts, potentially providing better services than would be found in-house. And because these firms would be hired by the district, they would always fear losing their contract and thus be more responsive to the concerns and pressures of the district, perhaps more so than the districts own employees, many whom view their jobs as virtual lifetime guarantees.

If teachers and custodians and bus drivers are being asked by administration to consider all options and are being looked at to see if they can be outsourced, administration also needs to know that there are companies out there that can do what they do and that they do not have some sort of monopoly on job security and pay. If I were a union official in a tough bargaining fight, I'd make sure that I brought to the table this line of thinking, because perhaps a district could save vital dollars by privatizing or outsourcing its school administration and spare cuts to teachers and other support staff who actually work with students.

This post was inspired by something that I read on Pamela Hornberger's blog, Pamela Hornberger for L'Anse Creuse School Board, which itself was inspired by a report from the Mackinac Center. One possible company that I found that may provide the sort of services I imagine is The Leona Group.

Julius Court and Toru Yanagihara suggest strategy alternatives for African countries in a world of globalisation "...Most countries in Africa are small and poor, making an inward looking strategy unattractive. Significant advances in economic development in Africa in the future will depend in no small part on the success with which countries can exploit the opportunities and avoid the risks presented by globalisation. A viable outward oriented strategy for countries in Africa will have to reflect the structure of the economy and endowments relative to other parts of the world. On the first point, the primary sector dominates most economies in Africa. On the second, Africa has low levels of human capital in comparison to other regions. The familiar proposition seems to hold – for most countries in Africa comparative advantage lies in primary production and unskilled labour-intensive primary processing...Given the long gestation period of investments in human capital, this is likely to remain the situation for many years to come..."

Steve Brenan of the Washington Monthly (which I found via memeorandum) begins his blog post 'None Dare Call it Sabotage' this way...

Consider a thought experiment. Imagine you actively disliked the United States, and wanted to deliberately undermine its economy. What kind of positions would you take to do the most damage?

Let's play the game! Close your eyes and take a minute to think about the policies you would put in place if you disliked America- the kind that would really do the most damage. What did you come up with?

In my mind, those positions that you would take to do the most damage to America would be those positions that damaged our long-term economic strength, eroded our historical values, weakened our security, opened up our borders to invasion, piled up debt, moved people from jobs to welfare, and granted other nations power over our domestic and foreign affairs. To be honest, the stimulus bill might have helped provide employment for people in favored union industries, but long-term, it is a policy designed to do considerable damage to America. Obamacare appears nice to some groups and rewards those who don't take care of themselves, but in the long term will be costly for the government to provide and will encourage structural irresponsibility, and includes death panels and money for abortions, both of which I also consider damaging positions for America. Letting pot be legalized, letting illegal immigrants flow into America, suing states that try to close the borders, encouraging gay marriage, doing little to stop the breakdown of the traditional family structure, funneling more money to killing unborn babies, working to remove firearms from law-abiding citizens, stealing money from my children and grandchildren to give higher salaries to government employees today, and letting Iran get nuclear weapons I would also consider positions taken to harm America by those who dislike our nation.

The funny thing is, after much thought (for a liberal), Steve arrived at a much different conclusion than I did. This is what he imagined:

You might start with rejecting the advice of economists and oppose any kind of stimulus investments. You'd also want to cut spending and take money out of the economy, while blocking funds to states and municipalities, forcing them to lay off more workers. You'd no doubt want to cut off stimulative unemployment benefits, and identify the single most effective jobs program of the last two years (the TANF Emergency Fund) so you could kill it.


You might then take steps to stop the Federal Reserve from trying to lower the unemployment rate. You'd also no doubt want to create massive economic uncertainty by vowing to gut the national health care system, promising to re-write the rules overseeing the financial industry, vowing re-write business regulations in general, considering a government shutdown, and even weighing the possibly of sending the United States into default.

You might want to cover your tracks a bit, and say you have an economic plan that would help -- a tax policy that's already been tried -- but you'd do so knowing that such a plan has already proven not to work.

It's almost as if there really is a bizzaro world out there, where up is down, left is right, and wrong is right. Every liberal program that I said was bad (because it was paid for by debt, encouraged unemployment, discouraged private initiative and hard work and responsibility, and was contrary to the historical values on which our nation was founded) he said was good. Every policy item that he pointed as something that would be good for America I saw as being bad for America.

I guess there is only one way to really test this stuff out. Let's let the Republicans run things for a couple years and then compare that to when Democrats ran things.... oh my word, we've done that (2000-2006 vs 2008 to 2010 is the only real comparison, although if you want to compare Michigan's growth from 1990 to 2002 vs 2002 to 2010, that'd be fair too) and based on that evidence, liberals like Steve are wrong and conservatives like me are right. See my posts Graph Comparing Unemployment Rate For GOP and Democrat Senators, Democrats=Higher Poverty, or my lengthy personal statistical analysis post Employment-Population Ratio Drops to 58.5%.

The data don't lie. Steve doesn't like America. I imagined it so.

UPDATE: For more of my thoughts about bizzaro world, please check out my earlier post 100 Years of Trying- Communism Wins in the End Though or my more indepth analysis of bizzaroness Bizarro World and the Israeli-Hamas Conflict.

UPDATE II: Some quick numbers... I'm bad with math so feel free to check them... between 1945 and 2008 (63 years), Democratic Presidents have been in charge for 28 years and added 2.05 trillon to the debt. From 2009 to 2011 (3 years), Democratic President Barack Obama added another 5.2 trillion in debt, bringing the total to 7.25. Projected debts for next year (2012) are over a trillion by quite a bit. Republican Presidents have been in charge 35 years, and from 1945 to 2009 added 7.75 trillion in debt. So, is the record clear on who adds more debt? Before Bush, it was Democrats. After Obama, it is going to be the Democrats again. And if Obama wins in 2012 and Democrats take back control of Congress, deficits will be several trillion a year for another 4 years, and not only will that be the end of our nation, but the record for which party is worse at adding debt will be conclusive. Foolish comments from liberals with no idea what they are talking about is always welcome though.

One of the great things about teaching social studies is helping students to make connections between things that they are learning about and the world around them. In my classes, it isn't just 'economics,' 'us history,' 'world history,' or 'government'- it is how their knowledge of economics, history, or political science can help them better understand the world around them and make better choices with their lives.

For example, another teacher friend of mine just gave this article to her students and had them read it, and I think it is a great example of good teaching. Sadly, I don't teach world history this year, so I can't use it, but what this teacher did is give her students the following article and have them discuss it. The article is called U.S. Decline, Sloth Look a Lot Like End of Rome and makes connections between the end of Rome and the fall of the United States.

Is the United States falling apart like Rome? I happen to think that there are some similarities, but that since the US is exceptional and different it can still be saved, but the point is, it doesn't matter what I think- the goal of the exercise is to get students thinking and have them start realizing that it is important to learn about the fall of Rome because it may provide lessons for our nation, real lessons about what types of politicians to elect into office, what types of policies to lobby in support of, what types of ballot resolutions to vote down, or what types of investments to put their hard-earned money into. The fall of Rome teaches us, and teaches students, and we need to learn from the wisdom of the past, and once students get that, once they understand that, it opens up a whole new world to them.

U.S. Decline, Sloth Look a Lot Like End of Rome is the article that that other teacher used in her classroom- if you are a teacher, you may also want to use it, and then afterwards pose questions to your students that asks them about the history of Rome, the recent policy decisions in the US, how those might be similar or different, and if the results will be similar or different. Enjoy the fun discussion that results and watch the learning occur!

This isn't the whole thing- I recommend you read the whole thing- but here are a couple teasers from it:

Historians cite the late second century as the turning point of the Roman Empire, when the once- proud, feared society began its descent into infamy. As the ruling class was undermined by civil wars and attacks by outsiders, the Romans’ respect for law and social institutions began to erode. In the end, a combination of political and economic mistakes led to the empire’s downfall.

The U.S. today is a mirror image of the Roman Empire as it tipped into chaos. Whether we blame our bloated government, a greedy elite or a lethargic population, the similarities between the two foreshadow a gruesome future.

The Roman economy grew fat from the plunder of conquered territories and the added productivity offered by new lands. The waning of expansionism didn’t bode well for the empire.

While the U.S. ascended quite differently, it also used its position as a superpower to fuel economic expansion. Because the country had the strongest military and economy in the post-World War II era, the U.S. dollar became the de facto global reserve currency, ensuring endless competitive advantages -- which have vanished in the last decade.

Americans have become less productive while relying more on social safety-net programs such as Medicare, Medicaid and Social Security -- and now expanded health-care insurance. Worse, like the ancient Romans, a sense of entitlement has replaced the drive and motivation we once championed. With easy access to abundant government handouts, it’s no wonder so many jobless people have stopped looking for work....

Warrick Smith writes(PDF) about the potential of entrepreneurship in the developing world. "...Today, few informed commentators question that the private sector plays a critical role in growth and poverty reduction. The ideological debates of the past are giving way to more pragmatic discussions about how best to unleash and expand that contribution while preserving other social values. New research is also providing fresh insights into what works and what doesn’t...when assessing the contribution of entrepreneurship to development,we need a more encompassing view. We need to include peasant farmers toiling in their fields in Uganda and Bangladesh; street vendors peddling their wares in La Paz and Manila; and microenterprises in Cairo and Istanbul...The private sector is the principal source of investment, with domestic private investment substantially overshadowing foreign investment across the developing world...The private sector accounts for about 90 percent of jobs in developing countries, .and poor people rate self-employment and jobs as the two most promising ways to improve their situation. But employment is not the only mechanism. A vibrant private sector expands the availability and reduces the prices of goods in society, including goods consumed by poor people. And firms and commercial transactions are the main source of taxes from which governments can empower the poor through investments in health, education and other public goods, as well as through direct income transfers..."