A Non Economist Wonders Why?

Below is a record of the changing federal funds rate. That’s the rate most publicized on news broadcasts when there is a report about the Federal Reserve Board. It is the interest rate at which private depository institutions (mostly banks) lend balances (federal funds) at the Federal Reserve to other depository institutions. Changes in this rate frequenlty cause the stock markets to react in an extreme manner.

Going back to October 2001 the chart indicates how the Federal Reserve Board has changed rates too often and too steeply. The 5.25% rate was maintained for 10 months. It was reported that the reason was the Fed wanted to fight inflation. Overall inflation from 2005 to 2006 was 3.2% and from 2006 to 2007 was 2.8% (data from the Bureau of Labor Statistics).Now we face the consequences of the Feds focus on inflation. Obviously the radical movement was started during Alan Greenspan’s leadership at the Fed and has continued under the control of Ben Bernanke.Inflation (and deflation) ought to be the major concern of the Federal Reserve. Alan Greenspan voiced concern about this issue almost all the time that he was chairman of the Federal Reserve. Current Federal Reserve Chairman Ben Bernanke also voices the same concerns. The reality seems to be that Wall Street bankers are more of a concern than any other issue. Increasing inflation is obviously is occuring but at the same time Wall Street banks are taking a terrible hit due to their bad judegement in the sub-prime mortgage business. http://apnews.excite.com/article/20080227/D8V2QCCG0.htmlSo who is being bailed out? It certainly is not the average American.

Federal Funds Rate

Date	Change (Basis Points) Increase Decrease		Level (Percent)
2008 January 30 January 22	… …	50 75	3.00 3.50
2007 December 11 October 31 September 18 August 7 June 28 May 9 March 21 January 31	… … … … … … … …	25 25 50 … … … … …	4.25 4.50 4.75 5.25 5.25 5.25 5.25 5.25
2006 December 12 October 25 September 20 August 8 June 29 May 10 March 28 January 31	… … … … 25 25 25 25	… … … … … … … …	5.25 5.25 5.25 5.25 5.25 5.00 4.75 4.50
2005 December 13 November 1 September 20 August 9 June 30 May 3 March 22 February 2	25 25 25 25 25 25 25 25	… … … … … … … …	4.25 4.00 3.75 3.50 3.25 3.00 2.75 2.50
2004 December 14 November 11 September 21 August 11 June 30	25 25 25 25 25	… … … … …	2.25 2.00 1.75 1.50 1.25
2003 June 25	…	25	1.00
2002 November 6	…	50	1.25
2001 December 11 November 6 October 2	…	25 50 50	1.75 2.00 2.50

With Enough Military Might We Can Bring Peace to Iraq

The Associate Press reported “Rockets or mortars hit the U.S.-protected Green Zone early Saturday, just a day after powerful Shiite cleric Muqtada al-Sadr ordered his Mahdi Army militia to extend its cease-fire by another six months.”

The pathetic reality is that we still have not brought real peace to Iraq. We have all heard enough commentaries and evaluations from reporters visiting Baghdad to understand that country as if we had been there ourselves. George W. Bush will most likely respond to the latest violence by maintaining the current level of military manpower.

John McCain’s pledge to keep Americans in Iraq for a hundred years if necessary, are the words of a man who believes in an American empire. There is no proof that our army in Iraq has made the United States any safer. To the contrary Iraq has become the training ground for terrorists.

Military oriented people like John McCain support this “arms makes right” philosophy. Many Americans agree with this idea. Even if John McCain is correct in keeping troops there for the sake of peace is it worth the lost life and money spent?

Primary Madness

I am a political independent and a moderate. The California registration form asking your party designation calls it “decline to state” if you are not joining any party. Almost 20% of us Californians are in this category. The reason I changed to an independent is that I found myself disagreeing with many Democratic party views. That percentage “decline to state” people has doubled in the past ten years. It’s no wonder that this has happened. The state legislature has been incompetent for years. Our state has been mismanaged by both political parties.

Right wing members of the Republican party need to understand that this is a democracy. Americans accept the results of the ballot box. So James Dobson, Rush Limbaugh, Sean Hannity, and all the rest of you right wing leaders(?) get over it. The vote is in. Unless Mike Huckabee accomplishes an extraordinary rise in popularity John McCain will be your party’s candidate. That is a good thing because moderates like me will consider voting for him. In other words you have a chance at holding on to the presidency.

Democrats also need to accept the wishes of the voters in their primaries. Super delegates who can vote without regard to the wishes of the voting public should not have the power to determine the candidate. Where is the democracy in that process? Both Hillary Clinton and Barack Obama are viable candidates.

Talk show hosts need to “calm down” as John McCain has stated. The also should control their sentiments and provide more “fair and balanced” coverage of the political races. The could attract for more listeners and viewers if they followed this advise.

Rabbis, ministers, and preachers and their groups should stay out of politics. Religious differences can destroy a nation. Iraq is a good example of the strife that those differences can bring. Separation of church and state ought to be honored by everyone.

Too Many Bad Choices for President

I am disappointed that both Rudy Giuliani and John Edwards have left the race for president. Both would have done a very good job. The remaining candidates have too many flaws. I will be forced to make an unenthusiastic choice.

John McCain is almost the moderate Republican that I could support. He has three serious flaws. He is opposed to any form of universal health care. That is an issue that is very personal for me. My son has no health care plan. My wife and daughter have plans that are very expensive. Second he says, if it is necessary, he will keep troops in Iraq for a hundred years to win the war. The third issue is his age. He will be 72 years old on inauguration day. The job of president is very demanding and one that really requires the attention of a younger and healthier person. Whomever he selects as vice president has to be someone that really can step into the presidency. Is that the way we want to select the next president?

Mitt Romney has a history of changing positions on too many issues. I do not know his real views on any major issue. His flip flopping and turning and twisting tell me nothing about what he would do as president.

Barack Obama stands for “change we can believe in” and has a poster reading “stand up for change.” I do not know what that means. He has no administrative experience and has had a very short time in the senate. He does have chutzpah. Many younger voters are supporting him because they find him inspiring. My question is, “where’s the beef?”

Hillary Clinton has experience and knowledge of the working of government. She also has Bill Clinton and both of them are too much the manipulators. Her campaign methods make me uncomfortable. It’s her “know it all” attitude that bothers me. We need a president that can bring our nation together. She alienates people. Who would agree to be vice president or secretary of state for Hillary Clinton?

Hate Can Hurt

“there is, perhaps, one large American political figure who could cause depressed, fractious Republicans to bind their wounds, downplay their divisions, renew their purpose, and join hands in blissful unity at the Minneapolis-St. Paul Republican convention. And that figure is Hillary Clinton.” Michael Gerson, Former Bush speechwriter in a Newsweek article. That was so apparent in the January 24 GOP debate in Boca Raton, Florida.

If the only thing uniting Republicans is their common hatred for Hillary Clinton the party will most definitely lose. John Kerry was not a good candidate for the Democrats in 2004 but they rallied around him because they hated George W. Bush. The GOP needs more than hatred to win in November. They need an inspiring candidate with a vision.

Who Thinks China Is Important?

“The World Is Flat is the timely and essential update on globalization, its successes and discontents, powerfully illuminated by one of our most respected journalists.” That would be Thomas L. Friedman. His book is an eye opener.

Despite the recent recalls of Chinese made toys and other products distributed in the United States, China is the booming nation of the world. It’s not a new phenomena.

BusinessWeek ran an article last January (January 25, 2007) entitled “China Growth Blows Past Forecasts” which reported China’s 2006 growth was at the rate of 10.7%. That growth followed a 2005 grwoth rate of 10.4%. Reports for 2007 have not yet appeared in the media but forecasts for last year ranged from 8% to 10%. Newsweek’s January 7, 2008 cover story is titled “CHINA NOW.” That Newsweek section consisted of separate articles. One of them was written by New York City’s mayor, Michael Bloomberg.

Reports of ever growing oil consumption, manufacturing, building and highway construction, etc. in China can only lead to one conclusion. China is quickly becoming the second most economically powerful nation in the world. Perhaps the most economically powerful nation in the world.
China does not have to become an enemy of the United States if this does occur. Economically sucessful natons can work together for the betterment of all. Mayor Bloomberg article, A Race We Can All Win”, isn’t about beating China. It is about a competitive race that will make the world a better place.
I believe it is important to look at the views of our presidential candidates regarding this topic. So I looked at their web sites and here is what I found. It’s all very disappointing.– Barack Obama wants to “work to ensure that China plays by international rules.”

– John Edwards has no positions on foreign affairs.

– Hillary Clinton says “The United States will face a resurgent Russia whose future orientation is uncertain and a rapidly growing China that must be integrated into the international system.”

– Mike Huckabee has no position on China. He does have a page titled “National Security/Foreign Policy: War On Terror” on which he says “With a focus on renewed diplomacy and inclusion, we can accomplish the goals of our nation without having to go it alone.”

– Mitt Romney: “China and the rapidly developing nations of Asia are growing into stronger economic competitors.”

– John McCain: under the National Security issue, “potential strategic competitors like China and Russia mean that America requires a larger and more capable military to protect our country’s vital interests and deter challenges to our security.”

– Rudy Giuliani: has no positions on foreign affairs beyond the fight against terrorists.

Now Children, Let’s Stop the Fighting

The January 22 Democratic Debate on CNN was a real Donnybrook. The arguing between Hillary Clinton and Barak Obama was more like two children fighting over nothing of consequence. It made both of them look foolish. Bill Clinton wading into the melee added nothing but another child like behavior. I believe Hillary won the arguments but she made herself look foolish. The outcome was that John Edwards came through as the adult with real issues.

It is possible that John Edwards could win large numbers of delegates on February 5. He could win as the “dark horse” candidate because everyone could rally around him. I can only hope.

The Theme is “Change”

It’s been driving me just a little nutty. The word is “change.” I thought perhaps I am the only one noticing this almost drum beat use of the word. So, I avoided writing about it. I was wrong. The cover article on today’s Los Angeles Times Opinion page is The Empty Promise < http://www.latimes.com/news/opinion/commentary/la-op-noah13jan13,1,1572050.story?ctrack=1&cset=true> by Timothy Noah. He too questions the use of this word.

The primary user of this word is Barak Obama. His slogan is “Change we can believe in.” The problem is he does not explain those changes. He has had signs printed with this slogan and many people at his campaign speaking sites are waving them vigorously. He is asking us to believe in him without giving us any of the detail. This has prompted me and many pundits to ask the question “where is the beef?”

If any candidate wants my vote he/she will have to tell me their plans. Selecting a president on faith is not good enough. The current and previous president is proof enough that faith is not enough.

China Is Important To Everyone

Despite the recent recalls of Chinese made toys and other products distributed in the United States, China is the booming nation of the world. It’s not a new phenomena.

China does not have to become an enemy of the United States if this does occur. Economically sucessful natons can work together for the betterment of all. Mayor Bloomberg article, A Race We Can All Win”, isn’t about beating China. It is about a competitive race that will make the world a better place.

I believe it is important to look at the views of our presidential candidates regarding this topic. So I looked at their web sites and here is what I found. It’s all very disappointing.

– Barak Obama wants to “work to ensure that China plays by international rules.”
– John Edwards has no positions on foreign affairs.
– Hilary Clinton says “The United States will face a resurgent Russia whose future orientation is uncertain and a rapidly growing China that must be integrated into the international system.”
– Mike Huckabee has no position on China. He does have a page titled “National Security/Foreign Policy: War On Terror” on which he says “With a focus on renewed diplomacy and inclusion, we can accomplish the goals of our nation without having to go it alone.”
– Mitt Romney: “China and the rapidly developing nations of Asia are growing into stronger economic competitors.”
– John McCain: under the National Security issue, “potential strategic competitors like China and Russia mean that America requires a larger and more capable military to protect our country’s vital interests and deter challenges to our security.”
– Rudy Giuliani: has no positions on foreign affairs beyond the fight against terrorists.

New Hampshire is Just The Beginning

The first three election caucuses and primary elections represent less than ½ of 1% of the total population of our nation. Despite this small number, the pundits and talk show hosts have delivered the final results. They have almost told us who the next president will be.

I disagree with the idea that they know any more than me or any of my friends and acquaintances. Everyone seemed to believe that Barak Obama would win today’s New Hampshire Democratic primary well ahead of Hillary Clinton. Now that we know the results it will be difficult to believe anything those pundits say.

I changed my political party affiliation after voting for Arnold Schwarzenegger for governor in October of 2003. I had been a Democrat during all of my previous adult life. The reality was that the previous governor, Gray Davis (D), was doing an incompetent job. It was obvious that a change was necessary. Now that I am not part of either political party I can really evaluate the pros and cons of all the candidates. It has been a refreshing experience.

The following entry was posted on a news blog in a response to a news item about Barak Obama’s growing popularity in the polls. The writing may not be perfect but the thought could be a worthwhile guide to America’s thought processes.

Talk is cheap. Obama is inexperienced and America is less intelligent than I even thought if we buy into this man who does not have any new ideas or specifics about what he will do as President other than to say lets change and hope for better things. To me this shows that he is naive and this is the real world.

He speaks in generalities and as the law professor that he was in the past. America is basically an optimistic country, but it does no good when it can not be enacted. Obama is a talker and not a doer.

I hope (good huh?) that America sends him back to the U.S. Senate and let him vote and take a stand on issues and work through what he really believes in, then come back and try again from President. Times are too serious for his rookie status and the impression that he is God come back to save us all. dmw, roeland park,ks