Moonhowlings

That’s right, in 7 Legislative days the Sequestration will take place. The Sequestration calls for $500 Billion dollar cuts to Pentagon spending and $700 Billion dollar cuts to non-pentagon spending.

How did we get to such a point with something so dangerous? The truth of the matter is, everyone expected that no one would let it happen.

The road to Sequestration started in July, 2011, when tea party Republicans attempted to block raising the debt ceiling, something which is done under every presidency. That catalyst set a series of unfortunate events into motion. First off, S & P down-graded our credit rating. Not by much, but a little. The stock market took an adverse reaction and many of us lost tens of thousands of dollars.

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Over the weekend, former national security advisor Zbigniew Brzezinski spoke the following when he accepted the Jury du Prix Tocqueville Prize in France:

The foregoing observation is especially relevant to our understanding of the challenge facing contemporary America.  Though a democracy, it is becoming a country of socially ominous extremes between the few super rich and the increasingly many who are deprived.  In America today the top 1% of the richest families own around 35% of the entire nation’s wealth, while the bottom 90% own around 25%.   It should be a source of perhaps even greater concern that the majority of all currently serving Congressmen and Senators, and similarly most of the top officials in the executive branch, fall in the category of the very rich, the so-called top 1%.

At the same time, though still a unique super-power, America finds it difficult to cope with the consequences of the increasingly accelerating global changes that are spinning out of control, both on the socio-economic and on the geopolitical levels. Socio-economically, the world is becoming a single playing-field in which 3 dynamic realities increasingly prevail:  globalization, “internetization”, and deregulation. 

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Huffingtonpost.com:

 [T]he former speaker suggested that benefits were being abused by people who were more interested in living off the government dime than in finding actual work.

“It is fundamentally wrong to give people money for 99 weeks for doing nothing,” he said.

Most studies of unemployment insurance have showed that lethargy is not a side effect of providing help to the unemployed. The money that is being distributed simply doesn’t cover the salary lost from not having a job.

The Newster sticks his foot in his mouth again.  Since when do the jobless get accused of being lazy.  On the one hand there is much weeping, wailing and gnashing of teeth over joblessness and unemployment.  Then there is the Newster who suggests that people are abusing being unemployed.  Help me understand this. 

From the Boston Globe:

So why is President Obama the villain in all of this?    At what point are the Republicans going to admit their culpability in extreme debt over 8 years?  Any time it is brought up, Obama is accused of trying to blame Bush.  Well…we need to stop blaming anyone.  However, facts are facts. 

Financing 2 wars and a drug program and cutting taxes caused the problem.  There was more going out than coming in.  It is a relatively simple math problem.  I liked having a tax cut.  Who wouldn’t?  But it contributed largely to our current situation, given our expenditures during the Bush years.  Let’s all just be honest where it came from and come up with solutions to fix the problem rather that racing right up to the edge of the cliff over ideology. 

The S & P also needs the American people to collectively give it the finger.  Where was that agency before the Crash of 2008?  Obviously playing switch. 

The next steps are unclear for the deficit commission’s drastic debt reduction plan. Many people have simply said what has been proposed in the draft is unacceptable on many levels.

Perhaps a plan this draconian is a place to start discussion. Right now it seems that senior citizens and federal works are heavily targeted and that the wealthy will be impacted the least.

Ten Flash Points in the Fiscal Commission Chairmen’s Proposal

Interesting way to look at the debt, especially since debt rose under Saint Ronnie and decline under Bad-boy Bill. It seems to me if we cut the war business, the debt might not be such an issue.

It is difficult to balance 2 wars and pull out of an almost depression. Too bad Obama is getting all the blame. People that are placing all the blame on him really aren’t intellectually honest with themselves or with others.

According to the New York Times, factory jobs are returning but the skill level of those in the jobs pool do not match the skill level needed by those seeking employees for factories.  Often pools of workers simply do not produce a match because American workers are unable to perform the skills needed to do the job.

BEDFORD, Ohio — Factory owners have been adding jobs slowly but steadily since the beginning of the year, giving a lift to the fragile economic recovery. And because they laid off so many workers — more than two million since the end of 2007 — manufacturers now have a vast pool of people to choose from.

Yet some of these employers complain that they cannot fill their openings.

Plenty of people are applying for the jobs. The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.

Economists expect that Friday’s government employment report will show that manufacturers continued adding jobs last month, although the overall picture is likely to be bleak. With the government dismissing Census workers, more jobs might have been cut than added in June.

And concerns are growing that the recovery could be teetering, with some fresh signs of softer demand this week. A central index of consumer confidence dropped sharply in June, while auto sales declined from the previous month.

Pending home sales plunged by 30 percent in May from April as tax credits for home buyers expired. Fretting that global growth is slowing, investors have driven stock indexes in the United States down to their levels of last October, for losses as great as 8 percent for 2010.

As unlikely as it would seem against this backdrop, manufacturers who want to expand find that hiring is not always easy. During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.

Now they are looking to hire people who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math proficiency than was previously required of the typical assembly line worker.

Makers of innovative products like advanced medical devices and wind turbines are among those growing quickly and looking to hire, and they too need higher skills.

“That’s where you’re seeing the pain point,” said Baiju R. Shah, chief executive of BioEnterprise, a nonprofit group in Cleveland trying to turn the region into a center for medical innovation. “The people that are out of work just don’t match the types of jobs that are here, open and growing.”

The increasing emphasis on more advanced skills raises policy questions about how to help low-skilled job seekers who are being turned away at the factory door and increasingly becoming the long-term unemployed. This week, the Senate reconsidered but declined to extend unemployment benefits, after earlier extensions raised the maximum to 99 weeks.

So, who do we blame?  Bush?  Obama?  the schools?  the employers?    Seriously, what can be done to retrain?  Can factories get tax credits for training these new employees to fit their needs?  Corporate giants like IBM have always done a great deal towards training their own people.  Do we just pull in workers from overseas while Americans, millions of them, go unemployed?  How about partnerships with local schools to re-educate workers for current  jobs.  Obviously what was needed 20 years ago is not needed today. 

Reading this article reminded me of warning that were issued some 20 years ago.  We were told that workers needed to be retrofitted to do different math, different computer skills and those not making the transition would lose their jobs to overseas.  Have the chickens perhaps come hope to roost at the wrong time?  Perhaps our stimulus packages should contain much more directed at retrofitting and retraining the American worker.  The wages in discussed in this article were fairly low level wages.  No one is getting rich here.  What do we do?

Let’s re-examine what the experts say. 

Paulson on AIG and Lehman

Buffett a Year After the Crash

It makes more sense to hear what the experts say than it does for non experts to fight about the economy on the blogs. And if I am not mistaken, Paulson and Buffett are both Republicans. Both have forgotten more about money than I have ever learned. Paulson is also out of Goldman Sachs.  He is well respected and worth a fortune.  He stepped up to the plate to serve his country.  He had nothing to lose and everything to gain. 

Article on Why Lehman Brothers Failed

There is all sorts of scuttlebutt over getting rid of Ben Bernanke.  Two Democratic senators, Barbara Boxer and Russ Feingold both started stirring up things on Friday about not re-confirming the current Federal Reserve Chairman.  Before that, there were other democrats including Senate Leader Harry Reid who expressed doubts.  There are already Republicans who place the financial woes on the country onto Bernanke, saying he should have known before hand. 

While the Democrats and Republicans play political reindeer games, some of those who have forgotten more than most people know about all things financial seem horrified at the prospect of not having Bernanke at the helm.  Warren Buffett, the financial mogul, is one such person.  He has said if Bernanke is not reconfirmed he will immediately begin to sell off stock and put his money elsewhere. Wall Street dropped 4% last week over this fighting as well as Obama’s firmly administered bank spanking.

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Before everyone starts leaping and jumping for joy, it is a good idea to put everything in perspective.  Since March 2009, stocks have made a remarkable recovery.    The bottom had also fallen out of the stock market, so much recovery was needed. 

Several people have said they have broken even to where they were before the crash.  I offer up scenerios.  Those people either weren’t invested heavily in equities or they fed their accounts a lot this past year.  For those who have static accounts, the recovery doesn’t come near to breaking even. 

According to USA Today:

Once it was clear a collapse wasn’t going to happen, the Standard & Poor’s 500 index roared back 64.8% from its early March low. For the full year, the index rose 23.5%, or 211.85 points, it’s best showing since 2003.

 The Dow Jones industrial average rose 1,651.66, or 18.8% for the year. From its March 9 close, the Dow jumped 59.3%. Powered by the recovery in high-tech stocks, the Nasdaq ended 2009 with a gain of 696.12, or 43.9%. Tthe Nasdaq has surged 78.9% from its March low.

 

Up until March of last year, many people were fearful of opening their statements.  If one lost 40% in the crash, and many of us did, it will take a lot more than 40% increase to bring you back even.  That’s the math of percentages.  I have a 401k that increased by 33.6% but I am not even close to being back to the fall 2007 high water mark.  Not even close.

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President Obama heads to Wall Street this Monday to urge financial reform. Financial regulatory systems need an overhaul to avoid the abuses and failures that led to near economic disaster last year.

Most of the focus this past summer has been on health care reform which is also part of our national financial woes. However, the banking, mortgage and insurance industries need to come back to being blips on the radar if serious reform is to take place and future disasters are to be avoided.

According the Washington Post:

He will urge members of the financial community “to take responsibility, not only to support reforming the regulatory system but also to avoid a return to the practices on Wall Street that led us to the financial crisis,” an administration official said Sunday.

Building up to that message, Treasury Secretary Timothy F. Geithner said recently that “greater urgency” is needed to push through regulatory reform and insisted that “fundamental change is necessary.” National economic adviser Lawrence H. Summers said in an interview that “this crisis will leave a legacy of strengthened regulation.”

Interestingly enough, while the job market hovers just under 10% unemployment, and retail spending is still flatlining, the stock market has gone up on average 45% since March. September which historically is the poorest month for stock gains hasn’t been that bad. Since September 1, the Dow has risen nearly 300 points. According to Bulls and Bears (Fox News) the average Joe 6 pack is just poking a toe back into the water and is investing in the stock market again after the melt down that began last September.

So who will howl about financial regulation? Probably those who are being regulated and need it the most. What are some reforms that contributors on anti see a need for?

[ UPDATE:  TEXT OF PRESIDENT OBAMA'S ADDRESS TO WALL STREET]

We have looked at enough stupid. Let’s look at SMART for a while.

I like Warren Buffett. Anyone that rich or who has a fund that functions like Berkshire Hathaway deserves to be listened to. I listened to him last fall when our country sat on the brink of financial disaster. Now he has posted some strong words in the op ed section of the NY Times. I don’t think Buffett is political–he is just old, wise and rich.

IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

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In a rather anticlimactic move yesterday, PWC supervisors locked in a $1.21 tax rate per hundred. The tax rate can always be lowered but cannot be raised. The vote was predictable. According to the Washington Post:

The spending plan County Executive Craig S. Gerhart proposed last month would reduce services, suspend road construction, freeze salaries and tap reserves to close a $190 million shortfall projected for the fiscal year that begins in July.

The $1.21 rate is the second highest in the metro area. However, looking at the bottom line, it certainly is not the most expensive real estate taxation. Plummeting property values have caused an overall reduction in property taxes. Most homes will find the real estate taxes cut by about $400.

Chairman Stewart, who opened the meeting by commenting on the federal stimulus package money, had this predictably partisan remark to say about the new tax rate:

“I believe the way to spur the economy is by cutting taxes, not raising them. It comes down to a philosophical divide,” board Chairman Corey A. Stewart (R-At Large) said. “Prince William is the only Republican-led jurisdiction in the D.C.-metro area. It shouldn’t be too much of a surprise we’re cutting taxes.”

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Stimulus money is beginning to arrive in Prince William County thanks to the efforts of Congressman Gerald Connolly. So far, $1.1 million dollars has been secured for the Greater Prince William Community Health center. $19.1 million has also been designated for Prince William County Schools. $530,000 in additional law enforcement funding is also slated to come our way.

Supervisor Frank Principi elaborated that the center treated 4,000 patients in 2008, 75% of whom were uninsured. This year, if trends continue, the clinic will see 7,000 patients. Principi is executive director of the clinic.

Officials in Prince William County have a long laundry list of needs drawn up to help offset the economic crunch which threatens to cripple the county. County legislative affairs director Dana Fenton indicated that his office has a list of priorities totaling $371 million. This wish list contains requests for money for law enforcement, roads, and neighborhoods impacted by foreclosure issues, to name a few projects that will go unfunded without stimulus money.

Chairman of the BOS, Corey Steward, has dismissed the incoming money according to the Washington Post:

But Board of County Supervisors Chairman Corey A. Stewart (R-At Large) said he wasn’t impressed, dismissing the stimulus money allocated so far as “a drop in the bucket.” Residents will be shortchanged if Connolly, who entered Congress two months ago, doesn’t secure at least $50 million for county schools, he said.

“Our county is the ninth wealthiest in the country and pays a lot of income tax,” Stewart said. “This is going to be a test as to how much pull Gerry Connolly has inside his own party.”

Stewart didn’t spare Connolly criticism for the allocation to Principi’s health center, either. “It looks suspicious that his friend and ally has been given $1.1 million in federal money to help pay his salary,” he said.

But Connolly said Stewart “can’t have it both ways.” His office provided a copy of a Feb. 9 letter from Stewart thanking Connolly for working to relieve traffic congestion through stimulus funding.

“I think Mr. Stewart’s time would be better spent writing my Republican colleagues and urging them to vote for a stimulus bill he now wants me to bring home the bacon from,” Connolly said. The former Fairfax County chairman was the only Prince William representative to vote for the stimulus, as Reps. Frank R. Wolf, Robert J. Wittman and every other House Republican opposed it.

A “drop in the bucket?” Is Stewart serious? Stewart has always shown himself to be the quintessential opportunistic politician but this is a bit much. That cool $19.1 million to the schools will provide just under 300 new teachers, just as an example of what Stewart thinks is a drop in the bucket is.

He also implies that Frank Principi is profiting from the federal money. This is the first time I have ever heard of obtaining what is the equivalent of grant money being a bad thing. Perhaps Corey Stewart should consider that every penny that comes into the country from the state of federal level pays HIS salary. Wasn’t he looking for grant money this time last year? Let’s see…something about dashboard cameras?

Prince William County needs to grab up every penny of federal stimulus money it possibly can. Corey Stewart needs to stop with the political shenanigans and just act like an adult without political motive every time a microphone is shoved in his face. He appears to be rude and ungrateful. Congressman Connolly needs to be thanked both in writing and in general conversation. He is dismissing this money much the same way he dismissed the millions he planned to spend on the Immigration Resolution.

Someone just sent me that latest from Virginia Education Association Director of Government Relations Robley Jones. Good news for the schools:

The significance of President Obama’s American Recovery and Reinvestment Act (ARRA) is just beginning to sink in. Bush bailed out the banks and Obama has bailed out the schools! U.S. Department of Education ARRA funding for the 2009-2010 school year for Virginia includes the following:

State Fiscal Stabilization $1,202,770,052
Title I – $165,311,666
Ed. Technology – $10,801,292
IDEA Part B – $261,415,033
IDEA Part B, Pre-School – $9,470,492
Grand Total – $1,696,587,551

Dr. Frank Barham, the Executive Director of the Virginia School Board Association wisely sent a message to school board members across the state last night offering that, “Our [VSBA] advice is that you implement no RIF policies, amend or adopt new budgets until you get the printout from the state in the next few weeks.”

Please urge your superintendent and school board to follow Dr. Barham’s advice.

I am not sure what all this means but it tells school boards and superintendents to hold off on major decisions until the ink dries.

It looks like almost $1.7 billion dollars is being pumped into Virginia schools. I suppose what would be critical is when and how the money will be divvied up. PWC Schools are short $57 million. Will our notoriety for having the most foreclosures in the state give us a bigger piece of the pie?