Same Old Pattern

I have spent the last two days examining the titles on 10 properties in a part of town I know reasonably well. It is also an area that I go to as seldom as possible. It has the reputation as a 'Bad' part of town.

But that reputation is fairly new. A few years ago it was considered declining, and a few years before that it was considered nice.

What happened?

I saw the exact same course of events in each of these ten exams. The timing varied a little, but each had the same chain. And all 10 are currently owned by the same couple.

I can't go into too many details, but I can share a few. All 10 properties are in the Western Cincinnati neighborhood of Price Hill; most are in Lower Price Hill.

All of these properties were purchased in the late 1950's/early 1960's by a couple who lived there 30 years or more, and raised a family there.

How can I tell that from a title exam? Because Mom and Dad both had that address when they died and when the kids inherited the property. And then sold it.

This is where the decline of the property, and, by extension, the neighborhood starts. None of the kids wanted the house in 9 cases and it was sold outright. They were all still owner occupied; I could tell by the address the court used during the foreclosure case. It was the purchase after the foreclosure where things went down hill. Usually purchased by a Trust, or LLC or even a husband and wife, sometimes years after the foreclosure, the first sign is when the tax bill is sent not to a lender or the house, but to the owners at a different address, usually in a much better part of town.

Price Hill was known for years as a working class haven. Mostly blue collar, mostly smaller, older homes (All of my 10 were built between 1900 and 1915), but a clean, well kept community. It has/had several well attended churches. Not a rich neighborhood by any means, but respectable.

I saw one house sell for over $150,000 one year, and for $75,000 at sheriff's sale 5 years later. Then $6000 to an absentee landlord 2 years after that. Do you seriously think that chain of events doesn't affect the rest of the housing values in the neighborhood?

But once the property become a rental things can go downhill fast; especially in a 90 or 100 year old house. And it only takes one house to start a slide. Two houses will accelerate it, and three on a street will guarantee it, especially in an older, less expensive neighborhood.

Because you will have two types of neighbors: elderly, been there forever and renters. The renters don't care and the elderly can't make their voices heard. And their kids won't do anything; moving Mom and/or Dad to a nursing home and selling- or renting- the house is much easier than dealing with the lousy absentee property owners and lousier neighbors.

And things decline anther notch.

Why is this important? because it may soon be coming to a neighborhood near you. Look around your block; how many old couples do you see? The ones who have lived there 20 years or more? How much sales activity do you see? For Sale signs sprout and then age, only to be replaced by another sign, from a different broker.

Or maybe it is the legal notices, and the couple up the street with the three kids have packed up and moved away, 2 steps ahead of the sheriff. It doesn't take much sometimes; a divorce and the wife can't afford the house on one income and child support. Or a layoff, and his salary can't make ends meet. Or a long term-illness; Wife; Husband, or God forbid one of the kids. Between doctors and medicines and hospitals and what insurance doesn't cover it doesn't take long.

Shortly nobody is cutting the yard. Then some punk breaks a window. Next thing you know its two houses on the block; then three-four-10. Each empty property is not an opportunity, but a sign; or a signpost to the families that are now buying in the suburbs.

Don't say it can't happen to your neighborhood; they once said that about Price Hill.

Gas Drops = Economy Sucks- Says Obama

On the way home tonight I saw gas for $2.99 a gallon; down almost a buck since the election.

Remember what Obama said during the second debate with Romney about why gas was so cheap before he was elected?

Maybe a refresher?

OBAMA: Well, think about what the governor -- think about what the governor just said. He said when I took office, the price of gasoline was $1.80, $1.86. Why is that? Because the economy was on the verge of collapse, because we were about to go through the worst recession since the Great Depression, as a consequence of some of the same policies that Governor Romney's now promoting.
So, it's conceivable that Governor Romney could bring down gas prices because with his policies, we might be back in that same mess.

Read more: http://www.foxnews.com/politics/2012/10/16/transcript-second-presidential-debate/#ixzz2FLzeEbTU

But if gas drops when the economy sucks; why is it dropping now, Mr. President?

Does your economy suck?

My guess is he doesn't think so.

And his probably doesn't.

It just that for the rest of the country the economy sucks, and has since 2008.

Schedule? We Don't Need No Stinkin' Schedule

Last night we turned on NCIS- which is just about the only show I watch on broadcast TV- and I wasn't on. Rudolph the Red Nosed Reindeer was instead.

And we turned it off.

A classic Christmas program, one I have enjoyed almost my entire life. And we turned it off. Why?

Because the shows that we once waited all year to see; the shows that defined and delineated the Christmas Season are all sitting on the library shelf; viewable any time, in High Def and without commercials.

Why sit through a program on someone else's schedule when you can view on your own?

In some respects, that is the most modern of TV metaphors, and the reason both broadcast TV and even cable TV is dying.

Yes; you can DVR a show and watch it later. And when you do, do you watch the commercials or zip through them? But cable is $80 a month; Netflix is $8. Save a few bucks and stop paying for channels you never watch; cut the cable. It's happening all over the country.

You can even watch most shows on your computer, at your convenience. No more rushing to meet that 9:00 PM on Thursday time slot. Kick back on Friday when the dishes are done at 6:39 and fire up the show you want to see.

How long until the cable channels get wise and stop distributing shows over cable, but have their channel available internet only? Would it be a successful business model for the History Channel to be available over the Wii? Shows that once were scheduled for Sunday night at 9:00 will now be available for viewing anytime after 9:00 on Sunday.

No more surfing through 90 channels of garbage to see what's on. 50 million homes at $1 a month is some pretty long green. Plus an ad or two at the beginning of the show.

I would go into more detail, but its 9:41PM; I think I'll go fire up something on the Wii; I feel like watching a Mythbusters episode.

BIG NEWS: Fast Food Doesn't Pay Much

I was emailed a link to an interesting article on companies that don't pay very well. The article has an blue chip pedigree- Wall Street Journal and Fox News- but seems to come off as the youngest half-wit brother.

I can't tell what the authors are trying to do. They lists twelve companies, and compare their profits, CEO compensation, gross receipts and average employee pay.

Guess what? Fast food and retail don't pay very well. There were a few surprises; Starbucks is on the list. Starbucks; the darling on the left; the epitome of responsible corporations; the purveyor of employees as partners. Yep. Starbucks is really an evil corporate fatcat. After verbally excoriating Sears because their website proclaims "Our associates are the heart of our company", and then asking them to work Black Friday, Starbucks appears on the Corporate Blackhearts list without a word of comment, except to note that Starbucks does have union employees.

Name a retailer: Target; Sears; K-mart; Wal-Mart. Yep; they're on the list. Name a fast food joint: McDonalds; Wendys; Taco Bell; KFC. Yep; Yep and Yep; all on the list, as well as parent company of Red Lobster and Longhorn.

They also don't break down the salaries into entry-level and career jobs. Face it; most of the jobs on this list are entry level. The 'I-worked-there- will-going-to-school' jobs. Yes they do have career positions in any of these companies, but for the most part their positions are in-work a few years- out to the real job.

And I say that with respect. Our country needs jobs like this; jobs that have a certain amount of responsibility and the ability to train workers on the basics of what work is. Showing up on time; giving a good measure while your there and getting along with others whose company you may or may not enjoy.

Who wants to pay $20 an hour so they can train you to earn a living?

The second point the authors are trying to make is that the CEO's are grossly overpaid. Take Wendy's for example; The CEO made $16,537,725 last year. Sounds like a chunk of change, don't it? But that amount is less that the average beginning Powerball jackpot.

Wendy's also has 168,672 employees. Our overpaid CEO makes less than $100 per employee; $98.05, after rounding. Cut out his salary completely and you can give each employee less than 2 bucks a week. I'm sure they would jump for joy.

And then blow it all on a small tea and a 5 piece nugget. I know that's how I'd spend it.

Read more: The 12 Companies Paying Americans the Least - 24/7 Wall St. http://247wallst.com/2012/11/21/the-12-companies-paying-americans-the-least/#ixzz2DTHLehFu

“Our associates are at the heart of our company and we value teamwork, integrity, and positive energy,”

Read more: The 12 Companies Paying Americans the Least - 24/7 Wall St. http://247wallst.com/2012/11/21/the-12-companies-paying-americans-the-least/#ixzz2DTHLehFu

“Our associates are at the heart of our company and we value teamwork, integrity, and positive energy,”

Read more: The 12 Companies Paying Americans the Least - 24/7 Wall St. http://247wallst.com/2012/11/21/the-12-companies-paying-americans-the-least/#ixzz2DTHLehFu

“Our associates are at the heart of our company and we value teamwork, integrity, and positive energy,”

Read more: The 12 Companies Paying Americans the Least - 24/7 Wall St. http://247wallst.com/2012/11/21/the-12-companies-paying-americans-the-least/#ixzz2DTHLehFu

Are You Voting Tommorow?

Friends, tomorrow is important.

Although there are several Presidential Candidates on the ballot, only two really matter; Mitt Romney and Barack Obama. If you have read my blog you know how I feel about each of them. You also know how I feel about this country, and the personal liberty the Constitution provides us.

If you are a supporter of Obama, you probably have very good reasons. I hope those reasons have been arrived at by a careful review of the facts, a consultation with your conscience and some thought on where your choice will lead us in the next four years.

In Obama's case, you have the last four years as a guide. For Romney, all we have is his word. He does have a record as Governor of Massachusetts, and as a leader of the Olympics and at Bain Capital. Are those jobs any indication of his ability to lead this country?

Who knows? We'll have to elect him to find out.

But we know how Obama has lead this country; deeper into debt. And save your breath on Bush and his 'off the books wars'; at lest he was ABLE TO PASS A BUDGET. Something Obama has not done, although it is Constitutionally required, for 3 and a half years.

We know how Obama has lead this nation in Foreign Policy; Egypt, once our second strongest ally in the Middle East and the only predominately Moslem nation to have a treaty with Israel, our strongest ally in the Middle East, is now, for all practical purposes, in the hands of Al-Qaeda. The hard won peace in Iraq is disintegrating, because Obama failed to negotiate a Status of Forces Agreement with the country of Iraq and our stabilizing forces are being forces out, again by an arm of Al-Qaeda.

And Libya. Where Obama fought an undeclared war for a year to "LIBERATE" the country, and turn it into another Al-Qaeda partner. Where a faction of Al-Qaeda stormed an American Consulate and killed 4 Americans, including our Libyan Ambassador.

If that isn't bad enough, for two weeks every member of the Obama administration to address the attack blamed it on a 'spontaneous demonstration' because of a YouTube video critical of Mohammed. Really? and this 'spontaneous demonstration' just happened to occur on September 11th? Ah; but Obama had wiggle room. He happened to mention the word terrorism in his speech on September 12th.

But it couldn't have been Al-Qaeda; they disappeared when Osama Bin-Laden was killed, right?

It was only after the pressure from the New Media became overwhelming that their story was corrected, and it was acknowledged that the demonstration was actually a terrorist attack.

Then of course there was the comment Obama made to the Russians that he would have "More freedom after the election". What was that supposed to mean?

Do I even need to mention the list of long time allies, like England and Israel, that Obama has treated poorly? Queen Elizabeth has worked with every US President since Truman. Obama gave her an iPod. Or the disrespectful way Obama treated the Prime Minister of Israel?

Obama also has not treated the military well. His statement that we need fewer bayonets at the last debate displays his ignorance of the military and its weaponry. Each Marine is still issued a bayonet. But I guess someone who fails to recognize the pronunciation of the word corpsman when it appears on his teleprompter can't be bother to understand how the men under his command are armed.

Our power and influence has been diminished in every corner of the globe.

And then we have Gay Rights, Abortion and Illegal Immigration. Obama manages to fall on the wrong side of each of these issues. This election though I am considering these issues minor. Yes, it is good news that Romney has a (currently) pro-life stance, but right now it is our budget that is most important.

We need to get our spending under control. Yes, it means cutting Welfare, Medicaid and Food Stamps. Yes it means changes to FUTURE beneficiaries of Social Security and Medicare. Yes it means cuts to military spending. And it may mean tax increases.

But I doubt it. Once we get at least some of the 47% who are not producers back into producing and paying taxes we should have an increase in revenue that will offset the need for an increase in the rates.

Or we can once again lease timber, oil and gas and mining rights on Federal land. The income from these sources will also help offset both the debt and the deficit.

And easing EPA requires on coal will lead to cheaper energy, again boosting the economy and manufacturing, creating jobs and taxpayers, not tax burdens.

You will note I haven't linked to any articles, blog posts or reports to back up any of my assertions. I did that on purpose. If you are concerned about any of these topics then you have done the research yourself; hopefully with more than a quick search of MSNBC or CNN (because 'Faux News' lies so much). If you aren't interested, then you wouldn't follow the links anyway, and adding them would be a waste of my time. Or you already know the facts as I have presented them, and the links would be superfluous.

Tomorrow we have a clear choice. We can continue down the road we are on (as one quick wit said: Re-electing Obama is like backing up the Titanic to hit the iceberg a second time), knowing how Obama leads and where he is leading us, or we can (hopefully) change direction by electing Romney.

I can't guarantee where Romney will lead us. We may be running him out of office faster that we ran Obama. But I do know he offers a chance at a change, and that is a chance I am willing to take.

The Obama supporters in the crowd may not still be reading, but if you are, thanks for taking the time to consider a position other than your own. Please consider your choice for President carefully. I don't say lightly that the future of the country is at stake in this election. If, after very careful consideration, you are still voting Democrat, then by all means do us all a favor and sleep through tomorrow. Yes; I'm kidding. But only vote once.

Yes, I'm kidding again.

Romney supporters: VOTE!!!!!!!

Conversations

I had several conversations with different folks about the Wednesday Night debate. All of them were interesting, but one point came up that I think needs more thought and exposition.

Romney's 47% comment.

The remark did not come up at the debate in actuality, but it was the reason, I think, behind Romney's comments on the poor. And that is what started me to thinking.

Who, or what, ARE The Poor?

We each will probably have a different definition and a different set of criteria to determine who is Poor, and even those definitions have change over the years.

Take for instance this woman. At what point was she poor? The article mentions no children, and she apparently was well off enough, prior to her lottery win, to enjoy both a drug habit and purchasing lottery tickets.

And yet the state of Michigan was paying her food and medical benefits; both prior to and after her win, approximately $550 dollars a month or so.

This is not to say that every person collecting government benefits is doing so fraudulently, but stories like this are not uncommon enough.

So; what is poor and at what level of poverty should you be entitled to some of my tax money?

The proverbial Welfare Queen; multiple children from multiple partners, second or third generation on the government dole? That's and easy one.

What about the young mother of 4 whose husband was recently killed in a car accident? That too is an easy one.

But from a statutory viewpoint, these two women are identical; single mother of preschool children. And that is where the problem starts. We can't ask how they became single mothers with children; that would involve 'value judgments'. We are not allowed to pass judgment on someone else's life style.

Yet poor is a lifestyle. Anyone who is collecting a government check is a non-producer, and it is that non-production that has created their poverty status. Although there are obvious exceptions, the people collecting those checks prefer that non-production status. The exceptions are those folks forced into non-production by age, medical reasons, or other circumstances beyond their control. They are also the ones working toward leaving that non-productive status; not creating another dependent generation.

So; what determines being poor? Is it lack of money? There are plenty of folks who lack money, but still work for a living. Maybe its a lack of assets? Lots of folks who are collecting government money own cars, game systems and flat screen TVs.

I have known folks who were collecting a small amount of money from a government check, but that amount was enough to support the lifestyle they wanted; a room with a TV, snacks and enough left over for illegal intoxicants. Working was not an option, as it would not have provided anything additional to their lifestyle, and actually would have cut into the amount of time they had to enjoy their TV and snacks.

That's not to say they wouldn't have enjoyed a bigger TV or better snacks; they just weren't willing to work for them.

The problem becomes how do we end Welfare for the never married mother of four, without ending it for the young widow with four children?  How do we make someone who has never sought to be a producer want to become a producer?

I don't think we have anyone in this country who doesn't want to do their part to support folks who need it. But how many of us are willing to support people who are just unwilling to become producers on their own?

Those people who want to be a part of the 47%, and not the 53%.

Convenieeeent; Ain't It?

Am I the only one to notice the how convenient the new Unemployment numbers were?

I didn't think so. I don't think Obama is even fooling his choir in the Lame Stream Media this time.

Just how much more can we accept? These numbers are supposed to be facts; not partisan playthings that the President can shuffle around as he pleases.

How far are we from a puppet regime when the facts and figures we trust to be honest, and are drivers of the economy, are used as political toys?

This will come back to bite Obama in the ass. People, even the sycophantic lefties in the Lame Stream Media don't like being used.

The real numbers will come out. We will have our 44th month of over 8% unemployment.

And Obama will be left mumbling, with egg on his face.

Hopefully all this will happen before November 6th, but if we depend on the LSM to make it happen, I have my doubts.

Gold Is HOT; Why?

I just heard on the radio that Facebook stock has dropped again. As far as I know I don't own any stock in Facebook, unless it is in a Mutual Fund somewhere, but here is why I find this interesting.

The Facebook IPO (Initial Public Offering) was the only- or one of a very few IPOs- that the insiders shared with the real public.

And it tanked.

Here is the question: is it cause and effect or effect and cause?

What I mean is, did the stock tank because the general public was allowed access, or was the public allowed access because the insiders KNEW it would tank?

Interesting question, ain't it?

I have the same question about gold. I know you've heard the ads; Gold is set to explode; Gold is set to double in value; Hurry- Buy Now!.

If there is such a fortune to be made in gold, why are the insiders sharing the information?

Or is it, as I suspect, that the bottom is about to drop out of gold and the insiders want out?

That puts a different spin on the issue, doesn't it?

I could be wrong. Maybe gold is ready to explode. But how many other investments that are ready to double have we been let in on?

Or how many other IPOs that skyrocketed from their original price? Doesn't it seem strange that we are only allowed in on the ground floor of those investment products that have then proceeded to the basement, and not the penthouse?

But maybe I'm just cynical.

A Target Rich Environment

This morning the news was full of blogging material. I couldn't turn around without hearing something that set my teeth on edge and my blood pressure soaring.

There was some woman on the radio this morning talking about suing a local park district because she doesn't like the rules at the park; it seems that a rule against 'Garbage Picking' is code for 'We don't want the homeless in our park'. Who knew?

And then there was Obama and his speech today in Cincinnati. Apparently he feels there is too much government support of automakers.

Not in this country; in CHINA! apparently having your government actually, you know, OWN an automaker is not problem. But just financially supporting them is against the rules.

But the winner?

The Fed is going to print money to buy MORTGAGES!

Here is how this will help (allegedly):

By printing money to buy mortgages they will keep interest rates low (lower than 0%!?!?!?) by keeping the banks flush with cash (you mean more than the Trillions they are already sitting on from TARP and the other 'Quantitative Easing' programs?!?!?!?), so more people will be able to get a loan (based on WHAT JOB!?!?!?) and buy a house, increasing demand and raising housing.

And then all of the unicorns will fart a hundred rainbows and everybody will sing Happy Days are Here Again! and the economy will instantly recover. I made up a part of that. I'll let you guess which part.

They are completely missing that housing prices are a SYMPTOM, not a cause. The cause is TOO MUCH MONEY SUPPLY.

Which printing more money will not help, will it?

50 more days until we can get rid of these idiots.

Romney and Ryan

Sounds like two brothers-in-law in a small town law firm doesn't it?

Romney's VP Pick is, in my opinion, the most important thing Romney will do in this election season. Done right, it will reunite the party and energize the base.

Done wrong, and a lot of voters will stay at home and sit on their hands instead of voting with them.

So, how did Romney do?

Well; I'm not sure.

Ryan is an asset, in that he is a budget driven. The cost of government is hurting the economy, and the bad economy is not creating jobs. Shrink the government and its tax and regulatory burdens, and the economy will create jobs. To those of us of a certain political leaning, these things are as basic as ABC/123.

The question is the independents. Will they see a shrinking of government as a good thing or a bad thing? Based on the polls I have seen, I think they will. Ryan is a plus here.

Typically, the VP is the insider; the one who knows there way around the Capital building and its denizens. Why do you think Obama saddled himself with Biden, or JFK with LBJ? Or even Reagan with Bush? McCain didn't need an insider; he was the insider. The insider won't help you get elected; the insider helps you get things done. Is Ryan enough of an insider to help Romney get things done?

He may be. He has been in positions of power in the Republican House, so it's possible. But with only 14 years in the House; is that enough time to have earned the control he will need? Well, Romney needs to win first; this point is a wait and see.

Usually the VP pick is an electoral strengthener; again, see Reagan and the Texan Bush. Ryan is from Wisconsin, which has been reliably Democratic in the past, but is seen as being 'in play' this election cycle.

Wisconsin's 10 electoral votes may not seem like much, but remember; Bush only beat Gore by 5 electoral votes. And making Wisconsin Red instead of Blue is a 20 vote shift. Will Wisconsin go Romney/Ryan? I think with Ryan on the ticket we can call Wisconsin for the Republicans. Definite Plus.

The Two White Guys Ticket. It sounds like a bad skit from the depths of SNL's worst years. Obama has already been hammering Romney with a charge of wanting to take the country back to the 1950's; there could be points for him in caricaturing Romney/Ryan as stuck in the past, or failing to see America is now fully integrated, and has millions of citizens who are people of color.

And Obama may do just that. It will play well to his base, but how well will it sit with the independents? Especially when Ryan is hammering home the need for a budget- HIS Budget- in the Federal government? It is the independents who will decide this election, just like 95% of the time. Unless we can create some Romney Democrats. Anything is possible; there are some Democrats who are waking to just how bad Obama has been. But will they vote for Romney? At this point I think they won't. But maybe Ryan can energize them?

Romney's team obviously has access to a lot of information I don't. Polling data in particular. They looked hard at quite a few capable individuals, prior to picking Paul Ryan. They would have considered all of the points I have talked about (plus a hundred more I could only guess at), and came up with Ryan as the best candidate.

I also think Paul Ryan has the Conservative 'street cred'  to cause the Conservative wing of the party to return to the fold by choice, and not by default. That will make a difference with fund raising and campaigning. Folks may have to vote for Romney- Obama ain't much as a real choice- but Ryan may make them WANT to vote for Romney. It may not seem like a big difference, but it is.

We'll all find out if Romney was right or not in 86 days.

So Many Options

I had an email exchange with a friend today about the upcoming election, and Obama's chances of re-election.

An interesting fly in the ointment we discussed was Bill Clinton; the keynote speaker at the Democratic Convention.

First; nobody will watch the convention. Hell, even the elected officials with that capital "D" after their names are finding ways to avoid getting photographed with President Death Knell. So all we will get from the speech are the highlights.

So the first question: Whose side is Bill Clinton on? The obvious answer is of course, Bill Clinton's What does he care more about; Bill Clinton or the Democrats keeping the White House?

Before you answer that, think about this.

The next four years will be interesting in a lot of respects. Economically, politically, foreign affairs, the Middle East, domestically- I can't think of a single area that will not require massive effort just to control, much less put right.

Assume Obama wins. Also assume he will continue through the next four years doing what he has done for the last four. Unless the Sunshine Fairy rains her good blessing down on us because a unicorn smiled at her, I don't see us being in any better position in 2016 than I do now. I also think that even the last few Obama sycophants will be tired of the condition of the country.

If we don't go Republican in 2012, we will definitely in 2016. Which means the earliest Hillary can expect to win is 2020. How will that work out for Bill?

Assume Romney wins, and again assume that the Unicorn doesn't smile for the Sunshine Fairy. Romney is no Reagan, and the world economy is just as bad off- or worse- than ours. I have heard that a recession is usually caused by over production, while a depression is caused by excessive cash flow. It is easier to clear the excess cars and appliances from the system than it is to clear a hundred trillion dollars.

Chances are we will still be working our way out of the slump, even if Romney does everything 100% right. And I have no faith that he will do everything 100% right.

Which means we may be ready to switch back to a Democrat in 2016. How will that work out for Bill?

Also, Bill Clinton is the Only Democratic President to win re-election since FDR in 1944; a status he will lose if Obama wins four more years.

You see why a lot of pundits don't think Bill Clinton actually has Obama's back this year.

And still Obama chose him for the keynote address.

There is another possibility.

Obama knows what the next four years will be like, and wants to lose; knowing he cannot do anything that will make the slightest change, or he is bored with the idea of being president. Hell, four years is the longest he has ever held a "job" in his life.

Either way, we only have a few more weeks until we know for sure.

Is anybody really ready for the "Hillary in '16" bumper stickers?

Pssst; Wanna Buy a Cheap House?

The housing market is the last economic driver in this country.

Why? Because it is the only one they cannot ship offshore (although I am sure plans are in the works for Mexican house builders to ship completed sections north).

And why is that a problem?

Housing has not hit bottom yet, and may not for 3-5 more years.

Housing will soon only have the value that cash money can buy, as lenders will not lend long term on a depreciating asset, will they?

And housing is still depreciating; a fall that will only accelerate when the Federal money from Freddie and Fannie dries up completely.

And the bank owned homes will be the first to fall. A house to the owner is not an asset to be liquidated; it has a value as shelter that creates it's primary value. When the cost of that shelter becomes more than its worth, it becomes a drag on the budget, but never should it be considered an asset.

But the bank has to liquify the asset; they deal in liquidity, not in real estate.

And when the banks own a sizable percentage of the real estate, that liquidation will be costly to home values.

It was the idea of the last ten years to make your home an asset to be liquidated.

Re-fi and take the cash, right? Home Equity lines to pay for the trip to Disney World or pay off the credit cards that were run up at The Gap and Target; turn your Home into CASH.

And then interest rates rise a little, and housing values fall a little, and now your cash cow has dried up. Instead of being able to take another 10k out of your home to pay off the Visa, the bank is calling in your credit limit.

And so the bust began. To many leaks in the credit dike, and not enough fingers. Everybody who was strung out at the end of their credit line went bust.

Which was apparently quite a sizable percentage of the country.

If you have ever seen video of a sinkhole beginning and developing, that is the exact way the housing values are progressing. The houses that seemed safe at first are now starring down the abyss, and the guy next door is planning on taking a hit as well.

Home value is about two things; what someone will pay, and what someone will lend. A bank doesn't care what you are paying for the place; they will tell you what they will lend. if you can make up the difference, then everybody goes home happy. When you can't...

And values fall again.

You want to know when housing has hit bottom?

When the banks stop sitting on piles of liquidity, and start investing in mortgages.

Without Fannie and Freddie (READ: US Taxpayer) to bail them out.

What Does The FUTURE Hold?

Saying we are screwed doesn't cover the half of it.

This crash should have happened in the 1960's, but was avoided by the Federal Government borrowing money and giving it away, as well as military and space race spending. That money went not just to Federal spending, but state, county and municipal grants to allow those entities, which, in most cases by law must have balanced budgets, to spend with a reckless abandon as well.

When it comes to employment in this country have you ever wonder where all of the jobs are? Right now we are looking at between 9% and 20% unemployment, based on whose figures you quote.

But between 1975 and 2005 how many women entered the workforce? The creation of the two income family also meant the creation of 25% more jobs than were available in the 1960's.

Where were almost all of these jobs created? Government. In 1975 1 person in 10 worked for a government at some level. Today it is closer to 1 in 4.

And government is paying for these jobs with taxes and borrowed money.

In one way I feel sorry for Obama. This crisis has been in the making for 70 years. The standard of living we have enjoyed has, for at least the last 50 years, been a product of government borrowing. And the hot potato that has been passed from administration to administration has now burned Obama's hands.

Well, I'd like to say tough S*%#.

But Obama isn't going to suffer; we are. Until this country can bring the cost of its labor into line with its worth, comparative to the rest of the world, we are not going to come out of this hole.

Wages are already stagnating and dropping. New hires are earning less than what similar positions were paid a year ago, and folks are happy to accept these lower amounts.

Housing prices are still dropping. Talk about a vicious cycle; Lenders aren't lending money on homes because the value of those homes still has not bottomed out, and housing prices are still falling because of the tight lending market. And lenders are slowing foreclosures because they already have massive portfolios of homes, some of which have not been marketed yet because to do so will only depress the market further.

The Feds have to stop borrowing.

But once they do, where will the money come from to pay for local civic improvements, wages for the multiple useless federal entities, or even pay the Social Security benefits seniors have earned?

And once those jobs dry up, what happens to the economy? As a libertarian I am waiting for the day I can celebrate the end of the EPA, the Department of Energy or the Department of Education. Right now would be a good time for ending the EPA; we need the freedom to create jobs that would allow and it would be a way to cut the federal budget.

Except we now have 18,000 more people out of work, defaulting on credit cards and mortgages and collecting unemployment and probably food stamps.

And that is just one example. What about the Department of Education (5,000 employees), or the Department of Energy (110,000 employees); want to see those folks added to the unemployment rolls?

YES!

And no.

We didn't get into this hole overnight. It took 70 years of incremental expansion of government to get where we are. And God help us it will take at least 30 years to resolve the mess.

And it ain't gonna be pretty.

Freddie Mac and Fannie Mae need to be severely restricted. They can become a lender of last resort, limited to maybe a guarantor of loans similar to what a VA loan is for veterans, and only if there is a surplus in the federal budget.

That will probably collapse the housing market further. But until housing finds it's bottom, the economy is not going to recover. And adding to the federal debt is just artificially creating a bottom. Government money distorts any market it is in.

The minimum wage needs to rescinded. Even if housing finds a bottom, unless wages are similarly returned to market rates without an artificial floor, jobs cannot return to this country.

Life is going to suck for quite a while.

I'm not looking forward to it.

but I am preparing for it just the same.

What To Do About Egypt?

The current uprising in Egypt is in some ways fascinating, and others frightening.

The Egyptians are unhappy with their current government, and are seeking to change the rules. That's their right. They can choose any style or form of government the majority wants. They don't need our approval, right?

That's what my Libertarian side says.

But then there is the more practical side of me. George Washington warned us against getting involved in foreign wars, but the world was a lot larger in his day; Egypt could go to hell in a hand-basket and it wouldn't have effected us for months, if ever.

Today, if 6 people gather on a street corner in Cairo at 9 am and wave 2 signs and a burning American Flag, by 10:30 gas has jumped 15 cents.

One of the basic tenets of Libertarianism is that your rights stop at the end of my nose. Or maybe at my gas pump. Do we have the right to tell the majority of Egyptians that they may or may not choose their own style of government so I can enjoy a consistent price for my gasoline?

What if that style of government is radical, Sharia Islam? A style that could threaten to start a war between Egypt and Israel, one that may eventually involve the whole region?

Has this reached the end of my nose yet?

What about the American troops in Iraq that may suddenly get pitched into this ancient battle?

Not to mention that Egypt has been completely outfitted over the last 30 years with tons of American military equipment; equipment that radical Islamists would not hesitate to use against Israel. Or us.

How's that nose feel?

Sometimes we have to make hard choices about where to allow free will- that doesn't affect our interests- and not to allow irrational decisions that do.

This is one of those times. I just wish I had more faith in the current administration to do the right and competent thing.

Just like the last time that region blew up and we were stuck with Carter. 30 years later we are still living that nightmare.

Are we going to be living with what may become an Egyptian nightmare for 30 more?

New Players, Same Game

I spent yesterday morning sharpening my wood chisels. It has been a while since I have been able to get into the workshop and they were in poor shape.

The thing about sharpening chisels is that it’s a low mental function kind of a job, so my mind gets to wander. So, it’s a win-win deal; I get sharp tools, and a sharper mind.

Yesterday I started with an interview I heard with Speaker-elect John Boehner on the radio recently, where he was talking about one of the first things the 112th Congress will need to do is raise the debt ceiling.

SAY WHAT??!?

Didn’t we just elect this new crop of fools to PREVENT something like this?

Speaker Boehner was asked about maybe some spending cuts, and replied that right now we can’t afford to cut anything, or words to that effect.

Well, I can think of a lot of things we can cut. Just take any random collection of letters from the alphabet: NPR; EPA or TSA for starters.

But you have to remember what I’ve said in previous posts, and think about the difference between long term and short term solutions. A long term solution to a problem will not get you reelected. The whole point of the last 45 years was to solve a problem short term, by borrowing money, and then kick the real solution to the problem, and the new problem of massive debt, down the road.

Guess what? Now the massive debt is the problem.

Well, one of them anyway.

As I have noted before, war is the historical method for dealing with over-capacity. A people will attempt to take over the lands of another and it has a two-fold impact. First, more land means more room for the people to settle, and it also costs in production of war-making equipment and lives, ending a reason for the over-capacity. For example, look at the two worldwide booms that followed the two world wars in the last century; the Roaring Twenties and the Fabulous Fifties.

Government is then forced to come up with a way to establish this prosperity without killing people and breaking things. One of those methods was Unemployment Compensation, because statistics prove that when 5% of the workforce is unemployed, labor does not become a scarce commodity, and wages can be more competently controlled. So to ease the burden on that 5%, they pay them not to work. Just like they pay farmers not to grow certain crops, to avoid the overabundance that could lead to a reduction in the price those crops can command.

Then in 1965 the Johnson Administration went one step further with the Great Society; why worry about extra capacity, if we can just make sure this over abundance of people is feed, clothed, medicated and housed on the government dime?

So what if we have to borrow the money; somebody else will need to pay it back.

Of course, as the years went by, more and more people could not find a place in the workforce, especially as the Environmental Laws and high workforce compensation costs started driving manufacturing overseas. Coupled with the massive entry into the workforce of women in the 1970’s meant that just to maintain a 5% unemployment rate, millions of new jobs would need to be created, something government controls made difficult for the private market.

So government picked up the slack.

And borrowed more money to pay the bill. But since only the Federal Government can consistently run at a deficit, the Feds were borrowing money and transferring it to the states, counties and cities, which are now very dependent on the federal largesse.

So this is where we’re at; the Federal Government is broke, but risks total collapse if they stop paying Unemployment Compensation, Welfare, Food Stamps, Medicare and Medicaid, and the transfer payments to the states, counties and cities. They also risk collapse if they stop paying the interest on the debt (something like 40% of the annual budget; a lot of which goes to the Social Security fund they have been-and continue to- raid), or worse, since a substantial portion of our debt is owed to China.

Everyone in Washington knows this; which is why Donkeys or Elephants in control the government grows bigger, the debt grows larger and nothing changes.

Now comes the hard part; fixing it.

First and foremost, we need jobs. Only individuals pay taxes, basically because we have nowhere else to pass them onto. Corporations don’t pay taxes; they add the cost of the tax into the product, and as long as all producers of good pay the same amount of tax, it doesn’t affect the final cost of the product in a way that makes it unsalable. And the tax is then paid by whoever purchases the product. Thus is why Value Added Taxes are so popular with governments; when the cost if your Pepsi goes up, you don’t blame the government, you blame Pepsi.

We need jobs so the individuals can pay taxes. In order to create these jobs we need to drop the minimum wage laws and curtail the EPA to 1968 levels. Yep; it will be painful, but it has to be done.

Why will people take these jobs? Because Food Stamps, Welfare and Medicaid are gone. It’s work or starve. Yep; it will be painful, but it has to be done.

Nationally our standard of living will drop. It has to. There are only two ways to make manufacturing in this country pay: Our production technology has to be capable of making our wage rate worth it as a business cost, or our wage rate has to be competitive on a world market.

We were able to live on number one for years. Our ability to have one man produce what it took 6 elsewhere could support our wages. Now the rest of the world, including China, has caught up with us. We have not been able to maintain our technological edge. We either need a massive production technology leap, akin to Henry Ford’s production line, or we need to lower our wages to an internationally competitive point. Yep; it will be painful, but it has to be done.

This will cause an across the board wage reduction. Probably not all at once, or immediately, but over the course of several years positions will start to pay less, as someone qualified and making $4.00 an hour moves into what was a $15.00 hour job to get a raise to $10.00. Or $7.00. Yep; it will be painful.

The decrease in wages will lead to a decrease in the cost of certain goods and services, in a deflationary spiral. Less money chasing an abundance of housing means housing values will decrease. Personally, I see housing at 1980 prices. Not adjusted for inflation, but actual dollar values. People will be making 1980 wages after all.

Food will remain high for a while, and certain things will become luxuries that are now commonplace in the diet. Meat for instance, and fresh fruits and vegetables. Are you ready, as a middle class American to have the same diet as your average 2nd world country? Yep; it will be painful.

And Washington knows all of this. They know that if half of what I have described comes to pass there will be violence in every corner of the nation. The chances of anyone involved getting reelected to anything will be gone.

So Congress will raise the debt ceiling, borrow more money from the Chinese and pass it around like always. Kick the issue another year or two down the road.

But just like any other problem, the further the issue is kicked down the pike, the harder it will be to fix, and the more painful the cure.

All to avoid another world war. One where both sides, and some renegades, are armed with nuclear weapons.

I’m going back to sharpening chisels. At least that has an endgame.

When they cut wood, your done.

More of my Thinking on Production and Taxation

Back in August I did a post on the causes of war called We Need A Way Out. I have been doing some more thinking on the subject, and thought I'd share my thoughts, whether you want them or not.

Ever since the era when we lived in caves and swung stone tools man has had to meet certain basic needs (Food; Clothing; Shelter- we started to worry about entertainment when we finally had enough of the other three) not enough of these needs, you were poor; an overabundance meant you were rich. You went from poor to rich by being good at something- hunting; gathering; hut building, tool making (career choices were rather limited in those early days; I’ll bet nobody earned a living as a ‘consultant’); take your pick.

At some point we began to specialize, in as much that I would sew the skins for your tent in exchange for fresh meat. I didn’t have to hunt; you didn’t have to make your own shelter. When I became better at making tent skins than what most people could produce themselves, I would have more work than I could do. Then I could raise my prices, as I became better and faster at my job, so I was making money two ways; I was receiving more for my labor, and I was spending less time doing it. I would have an over abundance of fresh meat and berries, and whatever else my clients could forage. Then, instead of only being able to trade my tent skins for what I needed, now I could trade my excess. I didn’t need to worry if the tool maker needed a tent so I could get a new flint scraper; I could trade my berries.

When each member of my tribe was able to specialize we were able to become richer than the tribes around us, and we could afford to have our toolmaker experiment with new methods and materials for tools, making us even more productive. When we had food in abundance, our population grew, and had the technology to force the neighboring tribes off of land we wanted for our offspring. Our ability to produce did not make us greedy; it was Darwin in action.

This scheme has survived 50,000 years. If your tribe had it, and my tribe needed it, we tried to take it. If we did, we became the dominant culture. If we couldn’t; you became the dominant culture. The Romans, The Persians, The Egyptians, The Mayans, The Inca; history is littered with the remnants of various tribes that thrived until they ran into a more dominant culture. Well, except for the Romans; their culture didn’t run into a more dominant tribe; their society just disintegrated from within.

Our technology to wage war became more and more deadly. We weren’t just one-on-one with a stone axe anymore; we had battles where 30,000 were lost at one time. We were able to use technology to destroy 50,000 with one bomb. War over production had to stop.

I’m not going to say the United Nations has done a good job, but it does allow the sham of saber rattling without actual bloodshed. The Cuban Missile Crisis is a good example. The USA, instead of starting a shooting war, was able to take an international stage and declare we were ready to start shooting. The Russians saw the end game and backed down. It was the same old story; they needed the production resources Cuba provided, and were afraid we would use our weapons to deny them those resources. The entire Cold War was fought this way, as the West and the East fought to become the dominant culture.

There are only two types of people in a society; producers and consumers. A producer adds to the tribes riches; a consumer deducts from those riches. That is a little over-simplified, but for my purposes today that will work. Producers want to produce. They want to create wealth, and their production of wealth usually benefits us all. As a Stone Age tent maker I would eventually need to have help, spreading my wealth. Today the busy rich man still hires help to accomplish the work he has been hired to do. Recently we have been expanding the consumer class, as an effort to limit production. As more and more people are moved from producer to consumer we have been able to produce less, limiting both our need for more resources and markets, and limiting our ability to expand, because we lack the necessary resources.

The way to stop fighting over production, resources and markets is to limit the ability to produce. When production is lowered we have less use of resources and less need for markets. The American government has been limiting production for 40 years by taxation, the welfare state and environmental controls. The American public has adapted and become more productive as a result; the opposite of what was intended.

So now what? First it was the resources they are starting to limit, by controlling things like oil production. Oil is not a finite commodity; “Experts” have been predicting the end of the oil supply since the 1920’s. (See here for more detail.) It is the monopoly on oil production that has increased the price, not its scarcity.

Now the governments are starting to tax the producers more heavily becaus ethey produce, hoping to limit their production. The Kyoto Protocols and the Cap and Trade legislation is how this is to be accomplished. It is practically impossible to produce anything without waste, and in an age when 90% of what we do produces carbon waste, taxing carbon by-product production is seen as an easy way to limit production.

But the people are beginning to see through the sham. Producing is what makes us able to earn our living, and limiting that ability makes us poorer, both as individuals and as a culture/society. We don’t want to be poor- struggling for our crumbs; we want to be rich- having enough to store some of our riches; just like our Stone Age ancestors.

Government was meant to be an aid to production, not a restriction. Government does not produce, it consumes. Except for very, very limited examples, government workers in a none Collective Societal setup do not produce a product that could be considered viable for a private company (the Parks systems are one of the few) and most of those few are the result of government regulation (think Bureau of Motor Vehicles). How long will we accept such poor help from what should be an aid to our goals? Not much longer, if the Tea Parties are any indication.

What The Hell Is the Gold Standard?

I got into a discussion a week or so back about the gold standard, and I think at that time I did a very poor job of explaining my position and why the gold standard is important. Hopefully I can do better today.

First the basics. The Gold Standard is when a country’s monetary supply is tied to the value of an asset, typically gold. I guess a little monetary history is in order as well.

Did you know that the only legitimate United States money is gold or silver coins? Paper currency has come about from the early days of the country, when actual Federal money was basically non-existent. In order to conduct commerce wealthy men would issue letters of credit, which could be redeemed for a specific amount of a commodity. In the South, it was usually tobacco. These letters were traded both locally and country wide (in the 1700’s) just as Federal Reserve notes are now. The face value of the letter was sometimes accepted, but if the maker was relatively unknown, or was widely known as bankrupt, the letter could be traded at a discount.

These letters gave way to banks issuing similar letters, but printed in specific denominations and in bulk. Each of these letters of credit was as valuable as the deposits of gold that were held by the individual bank. If the bank printed more certificates than actual deposits, they could be in trouble. A lot of early bankers were wealthy men, not because of the bank, but because you needed inordinate wealth to start one.

There were several attempts at a National Bank early on, the second National Bank was disbanded by Jackson in 1828 I believe, but it wasn’t until the early part of the last century that the Federal Reserve was created. Basically, the United States of America has deposited all of its money in one specific bank, which it controls. This bank issues, under the auspices of its largest depositor, all of our paper currency.

As long as we limit the amount of currency in circulation to what the government can back up with real money, we have a finite amount of currency available. This means currency will maintain its value. We also need to draw a distinction between money and currency. Money is gold or silver; hard assets that have an intrinsic value. Currency is the non-asset we trade instead of money.

For years the value of our currency was fixed to a certain amount of gold, and a silver coin was made from the exact amount of silver the denomination of the coin was worth. Silver started to become more expensive in the 1960’s, and in 1965 the US started to ‘sandwich’ a piece of copper between two sheets of silver to enable the coins to remain the same size (because of vending machines), yet not be worth more than its face value. The ratio of copper to silver has constantly increased until today we have just a skin of silver on a copper coin. Coins, originally a face value commodity, are now more currency than actual money.

The problem with the Gold Standard (for governments) is that it limits the currency available for circulation. If I borrow 30 dollars for 30 years plus interest, I am paying back 30 dollars, plus interest, in real money. If I borrow 30 dollars for 30 years without a fixed standard, as the money supply increases each dollar is worth less, and I am paying back less than 30 dollars, including interest, in real money. A gold standard favors a creditor; floating currency favors a debtor. A floating currency also favors the government; because they can control the supply of money easily.

You have hard news reports where they reference the Federal Reserve Board meeting to increase the money supply? What they are actually doing is devaluing the dollar. They don’t actually print more dollars (although sometimes they do), what they have done is increased the amount of money on that is available for loans.

Think about all of the money that changes hands daily with a single piece of currency having changed hands. Checks and bank wires are just two ways that billions of dollars move around the country daily; dollars that are available because of the size of the money supply, if not actual currency.

Remember back in February when Congress voted to spend $787,000,000,000.00? If we were on a gold standard this expenditure would have been impossible, as the money would not have existed, and could not have been created out of thin air.

Well, out of thin air is not exactly correct. The government voted to spend the money, so te Federal Reserve had to create it. Which they did by borrowing the money, which we have to repay with interest. It’s not that governments couldn’t borrow while on a gold standard; it’s just that he standard made the repayment expensive. As long as we were a creditor nation having a standard was a good thing.

But now we are a debtor nation; we want to make the money cheaper so we can repay less than we actually borrowed, over time. Before we can go back to being on the gold standard, we need to repay our massive debt. I don’t see that happening in my grandchildren’s lifetimes.

We Need a Way Out- Cash for Clunkers

I forgot to mention in the post below about how Cash for Clunkers fits in.

Well, it should be obvious. They are removing around three quarters of a million cars from the road, not only immediately increasing the demand for new cars, but also taking these vehicles from the used car pool, lowering the supply of used cars and again increasing the demand for new cars, especially the fuel efficient ones.

Japan has had a device for years to get their older cars off the road and spur demand for new ones. It is called Sha’ken, a process of inspection that gets increasingly more expensive as a car gets older. If you think about not just the automobile manufacturers, but all of their suppliers as well, and the suppliers to the suppliers and the service industry that surrounds all of this, you can see how car sales are a serious economic engine, and why the push to make cars disposable, especially in this country. There are almost 251 million vehicles in this country. Can you imagine the economic impact if we replaces just 10 percent of them a year?

We Need a Way Out

A few years ago I read an article about the causes of war, and the author boiled it down to one basic issue: over capacity.

The cause of the Great Depression was a world-wide excess capacity; there were more goods and more labor than anybody needed. Goods were not sold and people were out of work. WWII came along and production soared, as every industrialized nation made things for the sole purpose of destroying them, and destroyed a huge chunk of the labor force as well. After the war it took probably 10 years for that excess capacity to reemerge, and by then we were fighting the Cold War. We weren’t actively blowing things up, but the rapid technological advances made weapons systems obsolete before they were used up, demanding replacement.

The conflicts in Korea and Vietnam (which basically kept us in an active shooting war for much of the 1960’s) didn’t hurt on the excess capacity front either.

It was also in the 1960’s that government started its massive expansion with LBJ’s Great Society, using government to expand the demand for labor, trying to control the unemployment rate through government spending. Nixon, Ford and Carter kept the program, as did Reagan, although Reagan also added military spending, increasing the growth rate of the deficit at the same time. Bush, Clinton and Bush also kept increasing the size of government, at all levels, keeping unemployment low and absorbing the increasing amount of women entering the workforce, as two income families became the norm instead of the exception, to deal with the higher levels of taxation.

Three things I could go into right now are how Reagan’s defeat of the Soviet Union decreased the risk of all out war, especially a war that we would have spent generations recovering from, instead of a decade. And why the Chinese (and other countries) are so readily buying our debt- it’s to keep the American consumer buying and the world production going. The third thing is the irreparability of modern goods; it also keeps over capacity down as more goods are made to replace goods that have ceased to function. Think about too, why we have gotten away from returnable bottles- because more labor is required to recycle and reproduce a bottle than is required to wash and reuse one, again reducing over-capacity by requiring more labor and production for the same end result.

This also lead to governments trying to limit manufacturing, usually through environmental laws, and in the US we saw a push towards a service economy, as government tried to push us out of manufacturing completely. This made us even more dependent on consumer spending as our sole economic engine; and right now the engine is sputtering.

Here is the crux of the matter: it has always been war that has dissipated the excess capacity, and we are suffering now from a world-wide excess capacity, particularly as military spending falls. How can we dissipate the excess capacity without a war?

Think about it this way. The manufacture of a plane or tank for the sole purpose of having it destroyed is a waste. It also eases over capacity. So, we need more waste in the system in order to dissipate over capacity, which means more government involvement. More regulation in manufacturing and service professions; more Federal and State regulations that will need individuals at each employer to assure compliance, and more federal employees to monitor the regulations. This is how we have been dealing with excess capability for 50 years.

And now that method is starting to fail. Debt has increased to a point where it is unsustainable, and borders on unrepayable. Governments cannot increase in size anymore, as the funds are starting to dry up that were used to pay the workforce. What options do we have left?

It was inevitable that we would reach this point. No one has dealt with the excess capacity issue in 50 years. We just kept kicking the can 4 years further down the road. Although I do think some attempts were made to burn off our excess without the world-wide war it took to solve the problem in 1915 and 1945. The reunification of Germany was one attempt, and a percentage of world product went into bringing the former East Germany up to Western standards. The first gulf war was another, as large portions of production went to rebuild Kuwait. Now we are burning excess capacity in Iraq, and maybe Iran soon.

We aren’t so much destroying goods as we are rebuilding the world to modern standards, one country at a time; kind of like we used the Marshall Plan in Europe in the ‘40’s and ‘50’s. Will it be successful?

Maybe, if we can get the government out of the process. If we can get Iraq (and Afghanistan) rebuilt without too much additional government debt it may work. The secret is not taking funds out of the economy that individuals can use to restart the consumption engine. As long as government is confiscating wealth, both through excessive taxes and excessive debt, then the individual doesn’t have the wherewithal to become a consumer.

I for one hope we can do what every other generation has failed to do; find a way to reduce over capacity without a world-wide devastating war. History doesn’t show us a way; we have always fought our way out of a depression. So although I hope we can do it this time, I’m not holding my breath.

ADDED- I hope this doesn't come off as some tinfoil hat conspiracy post, but think about this. Which would you prefer: that I am a tinfoil hat idiot, or that the world leaders ARE working together to avoid another world war?