“Taper” and “Sequester” both Wall of Strength?

“Taper” may be easier to define (and spell) than “sequester” but both caused the same headache for financial markets.

“Taper” is the latest buzzword that describes the Federal Reserve’s pledge to gradually drawdown the ultra-loose borrowing conditions fueled by its bond buying (the Fed’s demand drives up bond prices and drives down borrowing rates pinned to those bonds). “Sequester” you’ll remember was the S-word that emerged from federal budget-balancing attempts. It had investors bracing, however briefly, for an expensive and inconvenient government service disruption. Words can be potent once they’ve entered the investing vernacular. We get it. It’s noise that can be hard to tune out. And who wants to turn a deaf ear when our portfolios are at stake? Frankly, the negative use of the word “tapering” has muddled the fact that the Fed is simply readying for actions that most investors have expected for some time—which ironically, are tailored responses to an improving economy.

The formidable line here is an uptrend. The S&P 500 closed at an all-time high 1,669.16 on May 21, 2013, up over 130% from its financial-crisis low of 676.53 reached March 9, 2009, but it wasn’t a straight path to that high. From election uncertainty to fiscal-cliff vertigo to rumblings from Europe, and now, intense focus on the Fed–we’ve been here before. Data source: TD Ameritrade/Standard & Poors.

Of course there are no guarantees. Today panic seems to be in the air.

A Growing Welfare Class in the United States

I hear the constant drum beat that 47 million Americans pay no taxes. That those people are on the dole. All those people don’t really want to work. The argument goes they are happy sitting in their homes doing nothing.

Is this all really true? If so, how did this happen?

A Google search [percentage of Americans paying income taxes] confirms that about one half of all Americans do not pay income taxes. The sites How Stuff Works, Fox News, The Washington Post, Reuters, and others all offer their take on why this is fact and some offer arguments about changing the taxing system. All the postings do affirm that everyone pays Social Security and Medicare taxes.

From How Stuff Works: So who are the 49 percent of Americans who don’t pay income taxes? The vast majority are the lowest income households, the elderly and young working families with children.

The reason this situation exists and is becoming worse was clearly defined in a Market Watch article posted on April 24, 2012.

Manufacturing employment as a fraction of total employment has been declining for the past half century in the United States and the great majority of other developed countries. A 1968 book about developments in the American economy by Victor Fuchs was already entitled “The Service Economy.”

Although the absolute number of jobs in American manufacturing was rather constant at about 17 million from 1969 to 2002, manufacturing’s share of jobs continued to decline from about 28% in 1962 to only 9% in 2011.

From CNN: A very large portion of U.S. apparel imports comes from Bangladesh. Many companies have been shifting orders there, because labor costs in the country are so low. Bangladesh is on track to surpass China within the next seven years as the largest apparel manufacturer in the world.

It is already the third biggest exporter of apparel to the U.S., behind China and Vietnam. The value of clothing imported from Bangladesh into the U.S. has quadrupled over the last decade to $4.5 billion annually, according to the apparel group.

Go into any store in the United States and you will find most products have been made in another country. Talking to a lady at Trader Joe’s just yesterday and she complained that the fresh produce is primarily from Mexico.

Back in 2007 the total unemployed that included part time workers and those who have given up searching for a job was below 8.5% of the likely working population. Today that number is 13.9%. That is the BLS number referred to as U6 on the monthly reports. It’s an improvement from the maximum number of 17.1% reached in October 2009.

I can’t prove it but I believe no one wants to live poorly when they see the things they can have with an income. Unfortunately the poor are also the least educated. That condition of poor education is partially lack of opportunity and partially lack of capability. Not all of us are capable of working in Silicon Valley or performing surgery at the Mayo Clinic. Those less technical jobs have been sent to the places where labor costs less. Every company has the right to lower their costs. Middle class and blue collar America has paid the price for those off shored jobs.

So the wealthy of America (they pay most of the taxes) have concluded that welfare is a cheap price to pay to keep peace in the United States. It’s the thing the royalty of France and Russia did not understand. We all know how that worked out. There is no royalty in the United States but there is a wealthy class that is the equivalent of royalty. Once again the U.S. leads the list with 442 billionaires the most of any nation in the world says Forbes magazine. The New York Daily News reports that there are 9 million members of the millionaires club in the U.S.

My prediction is that the welfare class will continue to exist in the United States and is likely to grow throughout the 21st century. This is not negative. It is reality.

Equality is something for Everyone!

Some of the people in my family are devoutly religious. None are in my immediate family. I am quite certain that they believe marriage is between a man and a woman. They believe it cannot be any other way. Homosexuality is, in their view, something to be hidden and something to be ashamed of. It must have been VERY difficult for Senator Rob Portman, who had taken a strong stand against gay marriage to learn that his 21 year old son is gay.

I personally find sexual relations between two people of the same sex to be revolting. Especially sex between two men. There was nothing funny about “I Love You Phillip Morris” starring Jim Carrey. To me it was horrifying.

Despite my feelings, I recognize that there are people in this world who are attracted to others of the same sex. They have the right to live their lives as happily as does the rest of society. Homosexual marriages will not impact my marriage in any way. The religious may believe that homosexual marriage will demean the basic principles of marriage. Those that have that belief probably also find all deviations from orthodox religion as unacceptable behavior too.

No one makes you associate with those you find an anathema to your views or beliefs. You are not required to associate with people of another religion, race, political party, etc. that you consider unacceptable.

“Modern Family” really is a profile on the early 21^st century as “The Jeffersons” were in the last part of the 20^th century.

I have no idea how the Supreme Court will rule on California’s Proposition 8 or DOMA. I would recommend the justices re-read the American Declaration of Independence and the preamble to the Constitution.

Equality is something for Everyone! No law should limit that right!

Inauguration Day 2013

President Barack Obama offered an inaugural speech calling for unification of purpose regardless of political party. This is the sort of speech we all expect in an inaugural presentation. Sadly political divisions in the nation are more like chasms. He knows that there are major differences between the political parties and other groups in the country. Listen to Bill O’Reilly or Sean Hannity and there is affirmation of the split between the political parties.

Thus he tried to put the best face on a country that is seriously broken by geographic, religious, and racial disagreements. Never mind the breach between rich and poor or the labor unions battling the employers. When state leaders voice intentions to nullify or just plain ignore federal law and many who voice desires to succeed from the union, the president’s job will be about holding the nation together.

This may seem as all too negative. The president’s speech about one purpose was an “A” effort towards healing our differences.

Fiscal Cliff Soap Opera Episode 2 – Standby

Just like “As the World Turns,” The Fiscal Cliff is a soap opera and it’s never over. With that thought in mind a television network ought to provide daily updates with clips of the latest foolish words from the president and the congressional leaders of both parties. This is evident by the news items that the next fiscal events to be confronted are sequestration and the debt ceiling with a backdrop of over spending. However, we know that the settling of those issues will not be the end of the story. Our elected officials seem to take a delight in providing the rolls of the devious, the treacherous, and the good guys. Like a good soap opera you never know what the next installment will bring.

“We are here for you. And we will not forget. We will follow up to make sure that you get all the help you need until you’ve rebuilt,” Obama said at an afternoon news conference.

Sixty Billion Dollars was the proposed federal aid for Sandy Super storm victims. Somehow the Speaker of the House overlooked that spending bill on New Year’s day. N.J.’s governor Chris Christie went on the attack against Speaker John Boehner and the G.O.P. After hugs and hand holding with the president and now this attack is Gov. Christie about to change political parties? To me he seems more like a moderate Democrat than a Republican.

The facts:

Sequestration is $110 Billion out of a Federal budget spending plan of $3.8 Trillion. That would be 110/3800 and that equals less that 3%. The 2013 United States federal budget is the budget to fund government operations for the fiscal year 2013, which is October 2012–September 2013. The sequestration is scheduled to take effect March 1.
The debt limit ceiling will be reached at about the same time as the sequestration. The Federal government borrows approximately 31¢ of every dollar spent. The fiscally responsible are asking how long can America continue this borrowing pattern. I am one of them.
The political parties fight each other even when they know the other group is correct. When the speaker of the House tells the leader of the Senate “Go f*** yourself” you know the political system is in failure mode.

Abraham Lincoln and the Never Ending Civil War

Perhaps the title of this post should be “Is this the and of the United States?”

The American Civil War, also called War Between the States , fratricidal four-year war (1861–65) between the federal government of the United States and 11 Southern states that asserted their right to secede from the Union. The war ended 147 years ago.

After all of these years since the end of the Civil War the South is still re-fighting every battle and every event connected with the confederacy. Steven Spielberg’s new movie simply titled Lincoln says we have not gotten over the war or the events that led up to the war.

The new Steven Spielberg movie is based upon the book Team of Rivals by Doris Kearns Goodwin. It’s an enthralling book. Even someone who is not particularly interested in reading history books will find this biography a compelling read.

The troubling part of this story is that citizens of all 50 states have submitted petitions to secede from the United States and that happened just this year. Seven southern state petitions have collected significant number of signatures. The leading is Texas with over 101,000. Major numbers of petition signers are residence of Texas, Louisiana, Tennessee, Alabama, North Carolina, Georgia, and Florida.

Happily Anti-Secession Petitions are Gaining Clicks, Too! The thought is that those wanting to secede should be stripped of their citizenship and deported. I would agree with that thought. Perhaps Mexico will take them.

Obama Wins in a Divided Nation

“Oh, somewhere in this favored land the sun is shining bright;

The band is playing somewhere, and somewhere hearts are light,

And somewhere men are laughing, and somewhere children shout;

But there is no joy in Mudville — mighty Casey has struck out.”

It appears that Barack Obama has won a second term as president of the United States. While the final counts have not been recorded the popular vote is very close. Barack Obama may have won the electoral count by a large majority the POTUS does not have a mandate to do anything. In the popular vote count he won by a nose in a country of 311 million people. It tells me how divided our nation is on so many issues.

Even as I write this post Mitt Romney has not agreed to concede defeat. Perhaps his staff is looking for irregularities in the vote counts that could change the outcome. Then again he came so close he may be having a difficult time accepting defeat. It’s got to hurt.

So assuming the networks are correct the question remains; where will the president take this country in the next four years?

Republican Party Opposes All Abortions

As time passes more and more Republican politicians oppose all abortions no matter how the woman became pregnant. Rape, incest or a woman’s health are no longer reasons to permit an abortion. It is an idea pulled from another century along time ago.

I am mystified by the idea that any woman would vote to elect Mitt Romney for president. The GOP Party platform includes these words: “We call on the government to permanently ban all federal funding and subsidies for abortion and healthcare plans that include abortion coverage.”

Three candidates for U.S. Senator or U.S. Congressman have spoken against the idea of abortion even in the case of rape. Todd Akin in Missouri, Richard Mourdock in Indiana, and now John Koster in Washington. Romney running mate, Paul Ryan, holds the same view.

Free access to birth control could prevent up to two thirds of U.S. abortions. This was the results of a research study conducted at the Washington University School of Medicine. However this is useless information to people who do not want to prevent unwanted pregnancy.

Mitt Romney is now trying to convince women that he does not subscribe to the idea that life begins at conception. Then why is this thought part of the GOP platform? Why did he select Paul Ryan as his running mate?

A Mitt Romney presidency will take this nation back to the middle ages. The Taliban couldn’t be happier.