patrick.net

MST,

The problems with "throwing the bums out" every 4 years is that you are throwing the baby out with the bathwater. Besides, those of our representatives that make it as far as an election for congress have long since been corrupted (or never will be). Throwing out the bums every 4 years just means that we have a bunch of amateur choirboys running the country. Not good.

Not directed at MST, but in general: (I don't know how many times I have brought this point up in the last 3 years, it must be a dozen)

The problem of corruption in congress is a STRUCTURAL one, it has to do with how our election system is organized. If we have >2 parties that are electable then the parties will have to compete and stand their ground on GUIDING PRINCIPLES, not on "ISSUES", or else people will vote for another party. But as long as there is only 2 parties that can win representatives there is nowhere else to go.

SP Says:
"but her explanation for the strong dollar was that due to massive amounts of deleveraging, notional “dollars” were getting destroyed, which creates upward pressure on the actual dollars that are in the system

notional dollars are only in the imaginational of investors. the only thing they can affect is investor perception. current destruction of notional dollars only underscores how inflated the US assets were. Its should put downward pressure on the confidence on US assets and on US as a country. I don't think thats the reason for strong dollar.I believe , US dollar is getting strong due to increase in financial instability in the world ( not just US).
Since most investors are US based , they are hoarding cash and bringing home the dollars from foreign lands and US financial markets as well.basically , dollars are getting pulled out of markets and put under the matress ( banks) which is causing a deflation.

Bottomline : money supply (floating) in the world markets (including US ) is shrinking at an alarming pace causing value of dollar going up.

I agree with OO that this is temporary. Fed will fill up the void by printing money like crazy and filling the void. dollar can only go down after that if there is some stability in the finacial market.

'The Fed chief's more gloomy assessment appeared to open the door wider to an interest rate cut on or before Oct. 28-29"

http://biz.yahoo.com/ap/081007/bernanke_economy.html

The problem of corruption in congress is a STRUCTURAL one, it has to do with how our election system is organized.

The problem of corruption in congress is a STRUCTURAL one, it has to do with the nature of human and power.

Peter P,

Bullcrap. Other countries have much less corrupt legislatures than the US, and the reason is that they have properly democratic election systems. I don't think it is because human nature is better in Europe.

Other countries have much less corrupt legislatures than the US, and the reason is that they have properly democratic election systems.

Other countries are much less powerful than the US.

Can you say that Russia and China are less corrupt and/or less scary than the US?

Europe is DOOMED.

Peter P,

What, now you are saying they are less powerful BECAUSE they have more democratic election systems?

That reveals very clearly where you stand on democracy.

they==many European countries.

They are less powerful because they regulate their markets too much.

And, they care too much about political correctness.

And, they have too much welfare.

And, they are too heavily taxed.

The common denominator in a democracy is the voter.
Voters get what they want. Pure demand and supply. Assuming demand and supply are not manipulated.
US is powerful because
1)Demand and supply is "least manipulated" compared to other countries (free speech, fear of presecution..etc)
2)Voter's have been given the right script by founding fathers on what to demand ( again relative to other countries).This includes individual liberty, free markets..etc

As soon as 1 and 2 are gone, US will go downthe tubes ( again compared to other nations )

Also, the right to property is the absolute foundation of a successful society. It should be codified as the most basic human right. Without regard to property rights, we are just animals.

Peter P, stop changing the subject. European countries are weaker because they are too democratic, yes or no?

SNMR,

That's the problem. In the US, voters do NOT get what they want,. They only have two choices, both easily corruptible.

There are scores of democracies in the world that work better and are freer than the US.

Other countries have much less corrupt legislatures than the US

Sorry. That's just really funny. Not that I defend the US Leg., but to suggest that, say, the Italian, or French, or Indian, or Brazilian, or you name it legislative bodies aren't corrupt is hilarious. Corruption comes in several forms, and one of the biggest forms is maintenance of the status quo ante for the party in power through purchasing their constituents with their own money. This is rife in modern democracies. We just have a relatively uncontrolled media which shows all our dirty laundry, and we have an enormous budget which means the problems become proportionately larger. BTW, those lovely, non-corrupt Eruo-legislators have been running a scam so they get paid $100ks for traveling to the EU Parliment. Google it.

If we have >2 parties that are electable then the parties will have to compete and stand their ground on GUIDING PRINCIPLES, not on “ISSUES”,

Yep, that has worked so well in those multi-party places like Italy since the war, which mostly hadn't kept a government going for more than a few months for the first 40 years after the War. Or Germany, where the ability to play those small "principled" (hah!) factions off against each other gave Hitler the Chancellorship. And how do you make this multiparty system happen? By Decree? You want a party? Start one. Then convince 30 million Americans to sign up, and you might get somewhere. Really, there's nobody stopping you.

Throwing out the bums every 4 years just means that we have a bunch of amateur choirboys running the country.

And God knows we're so much better off with the Professional Bloodsuckers than we would be with the Amateur Choirboys.

you are throwing the baby out with the bathwater.

Observationally, after 4 years or so you are at a ratio of about 530 to 6 bathwater to baby. An entire congressional class of Amateur Choirboys may bring that up to 10%. "Choirboys," you see, suggests that they might be principled. Or you can keep your current gasbag pork barrel power broker, just like 98% of the rest of the country.

Justme,

Until we get that parlamentary system with a coalition based government, I say vote out anyone who voted for the bailout.

Democracy is the means, not the ends. Liberty is what we really want.

Europeans do not enjoy nearly the same level of liberty as Americans. That is the problem. They have a culture that stifles freedom. That is the problem.

Is that the result of being "too democratic?" I do not know.

(Wasn't it an European country that _voted_ Hitler into power?)

The Founding Fathers were brilliant. The Constitution protects the people not only from the tyranny of dictatorship but also from the tyranny of the majority.

By the way, JUSTME:

stand their ground on GUIDING PRINCIPLES, not on “ISSUES”

This is a false dichotomy. Guiding Principles are theory. Issues are application.

Guiding Principle: Killing Human Beings is wrong. Issue: Pro Life vs. Anti-Death Penalty.

Guiding Principle: Racial Equality before the Law. Issue: Pro- vs. Anti- Affirmative Action.

GP: The Bill of Rights is Sacrosanct. I: Except for the ones we say aren't vs. No Exceptions.

See how that works?

MST,

How about we fire the CEOs every 2 years, because they are all corrupt bloodsuckers, too.

And, no, I do not agree with your analysis. Most Western European countries have democracies that are superior in their intended function (namely, to enact the people's will) than is the US.

I would like to correct a misconception. You should be aware that Germany has since the post-war constitution (1949) a rule that says that any party must have >5% of the popular vote in order to get a seat in parliament. This law was enacted exactly to avoid that extremists get to play a significant role.

Headset,

I wish it were that simple. I'm afraid if we all become single-issue voters we will end up with a dictatorship (and I have an issue with that :)).

Thanks for remembering my previous lecture on the topic :-). Really! :-)

Gold is looking more and more interesting.....

If I wanted to buy gold--would you guys suggest IAU or GLD?

THX--will look nto it--

Right--AIG is managed by Barclays--How strong is Barclays? Didn't it drop 30% today?

Sorry-meant AIU

Gold is looking more and more interesting…..

That's called a bubble, LILLL. If you want to play that deja vu, make sure you time it right.

Justme:

Fire the CEOs? Fine by be. Fill in your proxy ballot that you get by being a stockholder. Throw the bums out.

And as for Western European democracies? take a look at what they've done with the vote on the European Constitution. It has been defeated in France, the Netherlands, Ireland, but still they forge ahead. EU President Junckers before the French/Netherland vote: "If it's a yes, we will say, 'on we go,' and if it's a no we will say, 'we continue.'" That's EU Democracy! Tony Blair wouldn't even let a referendum be held on the total transferral of British Sovreignty. He knows the answer, and it isn't the one he wanted. So much for listening to the will of the people.

And the 1930 election was the first time the NAZIs had any influence, and that was with 19% of the vote. Your 5% popular vote limit wouldn't have made a difference: it was window dressing in 1949.

In the past, I've had a knack. I sold my house in LA Aug of 2005--rented for almost 3 years.
Picked up a SFH at around 1/4 of what I sold the last house for.
I'm feeling gold right now---A little hedgie never hurt.

I'm holding off opening my brick and mortar store until the tide passes. I actually make things--unlike most Americans-so I'll be okay--I hope.

MST,

Wonderful. You understand the difference between PRINCIPLE and ISSUE, and how PRINCIPLE is applied to resolve "issues".

Now understand this: In US politics, "issues" are blown out of proportion in order to create electoral advantage. Scheming politicians (and parties) create false and over-emphasized "issues" that give them electoral advantage.

For example, Republicans are blowing the "issue" of the financial bailout out of of proportion and trying to make it into The Only Thing That Matters (TM) in the upcoming election.

This is done to exploit the groundswell of resistance against the bailout, in both parties. But it is to the Republicans' advantage, because fewer of their up-for-election incumbents voted in favor of it.

Make no mistake, if you are a democrat in principle, and vote republican or independent in this election because of bailout anger, you are being exploited, and the republicans are laughing all the way to the bank (literally, the bank).

The bailout was necessitated by the bad 28 year regime of republican de-regulation. The democrats that dis-proportionally voted for the bailout were just trying (perhaps in futility) to contain the damage.

If you are a Democrat by heart, for God's sake, do not vote against your own party just because of your bailout. You are just punishing yourself by setting yourself up for 4 more years of the same failed policies that got us here.

And that is how the whole discussion on election systems started, this time around.

If I wanted to buy gold–would you guys suggest IAU or GLD?
Yes -- diversify. I believe the overhead for both is around .4% a year (see prospectus). I hold them in retirement accounts, but if you are looking at more than 10 oz. that is not in a tax-deferred/free account, you might want to try a safety deposit box.

MST,

On that note, perhaps everyone should be be made to re-apply for their own job every two years, I mean, you might grow complacent or lazy or too tight with the customers or vendors.

European Constitution: Tony Blair did not have the power to decide, as prime minister, whether to hold a referendum or not. Parliament does. I can totally agree that the EU converts are a sneaky bunch who will keep trying to fool the majority, but what does that have to do with election systems or democracy? When the Union of the US happened, do you think it happened with or without the consent of those "unionzed". At least the europeans are not having any "civil" wars about it. This stuff in this contect is a perfect example of a false issue. (also known as a red herring).

Nazis and 19% in 1930: Yes, any democracy can fail under the extreme duress of lost wars and depression. That is not a good argument for not having REAL democracy,.

By the way, here is an interesting article about the rise and fall of the Weimar Republic, 1919-1933.

http://www.crf-usa.org/bria/bria21_3b.htm

It is quite interesting to see how Hitler used a mixture of nominally legal means and illegal underground activities to force the Reichstag to give him dictatorial power in the end. This is a history lesson we should not forget.

Bap33, yeah, see you in November.

Justme:
Issues blown out of proportion? Like Global Warming, maybe? Yeah, I know what you're saying. What then do you think are the "true" issues people *should be* concerned about? Corporate Greed? Like the government priveledged and protected Fannie Mae and Freddie Mac CEOs who provided the secondary marketfor crappy loans that the rest of the financial industry then turned into this mess? Why the F were they created in the first place? And it was the CRA Regulation (not de-regulation) that forced all banks to start loaning to people who basically couldn't pay them back. That's the foundation of the problem. I remember that 1990s MSM campaign against "red-lining" and "racist lending practices," (otherwise known as "responsible lending.") Talk about manufactured issues.

I was against the bail-out long before I knew how "my party" would vote. I'm still against it. I think there should be fraud investigations, and anybody, CEO, GSE officer, or Congressional Member who aided and abbeted should be held responsible to the fullest extent of the law.

I'm not a single-issue voter, but you think our Reps. handing over control of a third of our Federal budget to a single man is *not* something that should guide decisions? Really?

Not that my vote will help: I live in Massachusetts.

Maybe it is not the political system that sucks, may be it is the public that sucks. I agree with George Carlin, and I think he is very insightful on this one, funny but real, where do these corrupt and evil politicians come from? The American system.

Where are the visionary politicians with conscience? They are NOT wanted by the voters, look at what the American public is like today. 1/3 obese, not just fat, but obese (and I have the same thought when I see obese couples together wondering how they structurally achieve penetration). I don't know about literacy but I have met so many home grown Americans who cannot spell properly, without spell check they are doomed. Then look at American TV, how many mainstream inspiring programs of high morals and educational value have you seen lately? It's all about get rich fast, get famous fast.

These corrupt politicians are exactly what the American public desire. How do you explain that American voted for Bush twice? Even till now he still has 25% approval rating, who are these idiots that still approve of him? In any other European country or a developed country, he would have been impeached long time ago, and I am going out on a limb to say even for countries like China and Russia, the politburo will never allow a person of such low IQ to be the head of the state, he doesn't have the clout to "settle" things internally.

So folks, let's face the reality, until the public is pushed to the brink and there is some kind of revolution from within, we will stay the course for many years to come. In the meantime we will just enjoy these puppet shows every 4 years.

OO,

Exactly. But the public sucks partly because the powers that be want them to suck, and feed them mindless TV and propaganda.

MST,

Global Warming as an "issue" is deeply unpopular. Most people would rather forget about it and go on their merry way. So again a false issue on your part.

FNM/FRE: Don't you think that the FIC (FInancial Industry Complex) where more than happy to have FNM and FRE? FIC is the ones that really wanted them to "guarantee" the mortgages. The whole thing about "affordability" and such was just a convenient ruse tfor them.

CRA: another red herring. Then why did this blowup not happen in 1994-1996? Wall St did not need any encouragement to make bad loans, once they figured out how to CDO and CDS the loans. Community Reinvestment Act had nothing to do with.

Any iother false issues you want to bring up while you are at it?

So when will Uncle Ben give us the rate cut we want? Let's cut a straight 1%, stop dicking around with stealth rate cuts, whatever facilities, be direct, trash the USD faster (and save me some waiting time) and we can all live a happy life ever after.

Man oh man am I realizing I'm playing for the wrong team....

http://voices.washingtonpost.com/livecoverage/2008/10/after_bailout_aig_executives_h.html

Justme:

AGW: deeply unpopular? Not for want of trying.

FNM/FRE: Of course the FIC loves them. Government Guarantees are great for huge firms. Government intervention in the marketplace skews things, large corporations love things to be skewed their way. That's where lobbyists come from. In another context, it's called fascism. The government has been skewing the housing market more and more toward people who can't quite pay since FDR. The CDS FIC stuff should live or die on its own merits, and would *except for the stupid "implied" guarantee of the GSEs.* When corporations get to write their own regulations (as has been the case since Wilson and FDR) they'll screw anybody in their way.

CRA regulations were "eased" (meaning enabling FNM/FRE to take on even worse paper) by Franklin Raines in 1999. Over Conservative objections, and predictions of financial meltdown. That's when sub-prime really started to roll. I can cite the NYT article again, if you want.