"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27, 2010

Thursday, December 30, 2010

2010, a Perspective

From a far distance, say we were sitting on the moon, an observer would be looking at our earth and thinking, “Boy, it sure is pretty but not much happening.” We have all seen those NASA photos of the beautiful blue oceans and the white clouds. So, it could be said, that in the universal or natural scheme of things, things are pretty much the same. Our earth has spun, on its own axis, 365 full revolutions at a speed of approximately 1,000 miles per hour. So, that means we covered about 9,125,000 miles just spinning around, assuming you are hanging out somewhere near the equator. Of course, while we were spinning like a top, we were also making one big trip around the sun. Our elliptical orbit around the sun takes one year, as you know. Did you know that the speed at which the earth is moving around the sun is about 67,000 miles per hour? Now that’s really moving. And that a one year trip around the sun covers about 587 million miles (Note: keep this statistic in mind if your spouse says you never take me anywhere.) By the way, our solar system is also moving lickety split in our galaxy and our galaxy is moving at warp speed on a trip to where we are just not sure. But think of it this way. You’re a little kid, in the back seat of the car, and you ask Dad, “Are we there yet*?”

We don’t make this stuff up by the way, check out our facts at: http://imagine.gsfc.nasa.gov/docs/ask_astro/answers/970401c.html

Right about now, if you are a typical reader, you are asking yourself, assuming you have not clicked off this page, just where in the heck is this essay going? How, on earth, is this essay going to tie into fiscal responsibility and debt and dopes in Washington DC? Well, let’s continue on and see if there is a connection.

Okay, so we all know now that we are moving, spinning and we are scooting around the sun at one pretty darn good clip. Our British friend, Mr. Newton, who developed his laws of motion long before we were blessed with the brilliance of men and women like Bush, McCain, Greenspan, Obama, Pelosi and Bernanke, observed that a body in motion stays in motion unless acted upon by an external force. This is all available for your reading enjoyment in a publication entitled Philosophiæ Naturalis Principia Mathematica (aka Principia) dated 1687. We checked out amazon.com to see if it was available. It is. Costs a mere $13.42 and is eligible for free shipping if your order totals at least $25.00. Just go to: http://www.amazon.com/Principia-Mathematical-Principles-Natural-Philosophy/dp/1607962403/ref=sr_1_2?ie=UTF8&qid=1293716203&sr=8-2

So, back to our 2010 perspective. And here comes the tie in.

Congress is a body. A body politic. Say what you want, and we of course encourage you to do so vigorously and often, that body is in motion. It was in motion throughout 2010. It covered a lot of ground and produced at lot of paper and laws and bureaucrats and rules and encumbrances upon other bodies in motion. In other words, it was the external force that interfered with the motion of other bodies. And, we know only too well the painful consequences of that interference but let us recap quickly and succinctly: deficits = debt = destruction.

So, our perspective on 2010 is simply this. The body congress is in motion, was in motion all year, all 365 days, either directly or through its lingering bodies that it placed in motion. And so it will also be in 2011. And 2012. And so forth. Until it meets an external force!

* For our readers who want to have some real fun, ponder this quote from NASA: “Earth, along with the Solar System, is situated in the Milky Way galaxy, orbiting about 28,000 light years from the center of the galaxy. It is currently about 20 light years** above the galaxy's equatorial plane in the Orion spiral arm.”

** A light year in distance is about 6 trillion miles.  By the way, trillions in currency have become chump change for the boys and girls in congress.

Tuesday, December 28, 2010

God Bless the Levins

This story first appeared in the Philadelphia Daily News, December 22, 2005.  It was written by Ronnie Polaneczky, Daily News Columnist:

"AND NOW, in time for the holidays, I bring you the best Christmas story you never heard.

It started last Christmas, when Bennett and Vivian Levin were overwhelmed by sadness while listening to radio reports of injured American troops.

"We have to let them know we care," Vivian told Bennett.

So they organized a trip to bring soldiers from Walter Reed Army Medical Center and Bethesda Naval Hospital to the annual Army-Navy football game in Philly, on Dec. 3.

The cool part is, they created their own train line to do it.

Yes, there are people in this country who actually own real trains. Bennett Levin - native Philly guy, self-made millionaire and irascible former L&I commish - is one of them.

He has three luxury rail cars. Think mahogany paneling, plush seating and white-linen dining areas. He also has two locomotives, which he stores at his Juniata Park train yard.

One car, the elegant Pennsylvania, carried John F. Kennedy to the Army-Navy game in 1961 and '62. Later, it carried his brother Bobby's body to D.C. for burial.

"That's a lot of history for one car," says Bennett.

He and Vivian wanted to revive a tradition that endured from 1936 to 1975, during which trains carried Army-Navy spectators from around the country directly to the stadium where the annual game is played.

The Levins could think of no better passengers to reinstate the ceremonial ride than the wounded men and women recovering at Walter Reed in D.C. and Bethesda, in Maryland.

"We wanted to give them a first-class experience," says Bennett. "Gourmet meals on board, private transportation from the train to the stadium, perfect seats - real hero treatment. "

Through the Army War College Foundation, of which he is a trustee, Bennett met with Walter Reed's commanding general, who loved the idea.

But Bennett had some ground rules first, all designed to keep the focus on the troops alone:

No press on the trip, lest the soldiers' day of pampering devolve into a media circus.

No politicians either, because, says Bennett, "I didn't want some idiot making this trip into a campaign photo op. "

And no Pentagon suits on board, otherwise the soldiers would be too busy saluting superiors to relax.

The general agreed to the conditions, and Bennett realized he had a problem on his hands.

"I had to actually make this thing happen," he laughs.

Over the next months, he recruited owners of 15 other sumptuous rail cars from around the country - these people tend to know each other - into lending their vehicles for the day. The name of their temporary train?

The Liberty Limited .

Amtrak volunteered to transport the cars to D.C. - where they'd be coupled together for the round-trip ride to Philly - then back to their owners later.

Conrail offered to service the Liberty while it was in Philly. And SEPTA drivers would bus the disabled soldiers 200 yards from the train to Lincoln Financial Field, for the game.

A benefactor from the War College ponied up 100 seats to the game - on the 50-yard line - and lunch in a hospitality suite.

And corporate donors filled, for free and without asking for publicity, goodie bags for attendees:

From Woolrich, stadium blankets. From Wal-Mart, digital cameras. From Nikon, field glasses. From GEAR, down jackets.

There was booty not just for the soldiers, but for their guests, too, since each was allowed to bring a friend or family member.

The Marines, though, declined the offer. "They voted not to take guests with them, so they could take more Marines," says Levin, choking up at the memory.

Bennett's an emotional guy, so he was worried about how he'd react to meeting the 88 troops and guests at D.C.'s Union Station, where the trip originated. Some GIs were missing limbs. Others were wheelchair-bound or accompanied by medical personnel for the day.

"They made it easy to be with them," he says. "They were all smiles on the ride to Philly. Not an ounce of self-pity from any of them. They're so full of life and determination. "

At the stadium, the troops reveled in the game, recalls Bennett. Not even Army's lopsided loss to Navy could deflate the group's rollicking mood.

Afterward, it was back to the train and yet another gourmet meal - heroes get hungry, says Levin - before returning to Walter Reed and Bethesda.

"The day was spectacular," says Levin. "It was all about these kids. It was awesome to be part of it. "

The most poignant moment for the Levins was when 11 Marines hugged them goodbye, then sang them the Marine Hymn on the platform at Union Station.

"One of the guys was blind, but he said, 'I can't see you, but man, you must be f---ing beautiful!' " says Bennett. "I got a lump so big in my throat, I couldn't even answer him. "

It's been three weeks, but the Levins and their guests are still feeling the day's love.

"My Christmas came early," says Levin, who is Jewish and who loves the Christmas season. "I can't describe the feeling in the air. "

Maybe it was hope.

As one guest wrote in a thank-you note to Bennett and Vivian, "The fond memories generated last Saturday will sustain us all - whatever the future may bring. "

God bless the Levins.

And bless the troops, every one."

Read more:

Saturday, December 25, 2010

Good News of a Great Joy

In those days a decree went out from Caesar Augustus that all the world should be enrolled. This was the first enrollment, when Quirin'i-us was governor of Syria. And all went to be enrolled, each to his own city. And Joseph also went up from Galilee, from the city of Nazareth, to Judea, to the city of David, which is called Bethlehem, because he was of the house and lineage of David, to be enrolled with Mary, his betrothed, who was with child. And while they were there, the time came for her to be delivered. And she gave birth to her first-born son and wrapped him in swaddling cloths, and laid him in a manger, because there was no place for them in the inn.

And in that region there were shepherds out in the field, keeping watch over their flock by night. And an angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were filled with fear. And the angel said to them, "Be not afraid; for behold, I bring you good news of a great joy which will come to all the people; for to you is born this day in the city of David a Savior, who is Christ the Lord. And this will be a sign for you: you will find a babe wrapped in swaddling cloths and lying in a manger." And suddenly there was with the angel a multitude of the heavenly host praising God and saying, "Glory to God in the highest, and on earth peace among men with whom he is pleased!"

When the angels went away from them into heaven, the shepherds said to one another, "Let us go over to Bethlehem and see this thing that has happened, which the Lord has made known to us." And they went with haste, and found Mary and Joseph, and the babe lying in a manger. And when they saw it they made known the saying which had been told them concerning this child; and all who heard it wondered at what the shepherds told them. But Mary kept all these things, pondering them in her heart. And the shepherds returned, glorifying and praising God for all they had heard and seen, as it had been told them.

Luke 2:1-20

Friday, December 24, 2010

'Twas the Night Before Christmas

"'Twas the Night Before Christmas"
By Clement Clarke Moore

'Twas the night before Christmas, when all through the house
Not a creature was stirring, not even a mouse;
The stockings were hung by the chimney with care,
In hopes that St. Nicholas soon would be there;

The children were nestled all snug in their beds,
While visions of sugar-plums danced in their heads;
And mamma in her 'kerchief, and I in my cap,
Had just settled down for a long winter's nap,

When out on the lawn there arose such a clatter,
I sprang from the bed to see what was the matter,
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.

The moon on the breast of the new-fallen snow
Gave the lustre of mid-day to objects below,
When, what to my wondering eyes should appear,
But a miniature sleigh, and eight tiny reindeer,

With a little old driver, so lively and quick,
I knew in a moment it must be St. Nick.
More rapid than eagles his coursers they came,
And he whistled, and shouted, and called them by name;

"Now, DASHER! now, DANCER! now, PRANCER and VIXEN!
To the top of the porch! to the top of the wall!
Now dash away! dash away! dash away all!"

As dry leaves that before the wild hurricane fly,
When they meet with an obstacle, mount to the sky,
So up to the house-top the coursers they flew,
With the sleigh full of toys, and St. Nicholas too.

And then, in a twinkling, I heard on the roof
The prancing and pawing of each little hoof.
As I drew in my hand, and was turning around,
Down the chimney St. Nicholas came with a bound.

He was dressed all in fur, from his head to his foot,
And his clothes were all tarnished with ashes and soot;
A bundle of toys he had flung on his back,
And he looked like a peddler just opening his pack.

His eyes -- how they twinkled! his dimples how merry!
His cheeks were like roses, his nose like a cherry!
His droll little mouth was drawn up like a bow,
And the beard of his chin was as white as the snow;

The stump of a pipe he held tight in his teeth,
And the smoke it encircled his head like a wreath;
He had a broad face and a little round belly,
That shook, when he laughed like a bowlful of jelly.

He was chubby and plump, a right jolly old elf,
And I laughed when I saw him, in spite of myself;
A wink of his eye and a twist of his head,
Soon gave me to know I had nothing to dread;

He spoke not a word, but went straight to his work,
And filled all the stockings; then turned with a jerk,
And laying his finger aside of his nose,
And giving a nod, up the chimney he rose;

He sprang to his sleigh, to his team gave a whistle,
And away they all flew like the down of a thistle.
But I heard him exclaim, ere he drove out of sight,

Tuesday, December 21, 2010

The Nativity Story, Updated Version

The light is forming in the east; we know that something wonderful is about to happen.  We wish to share this updated version of our Savior's birth.  It was sent to us by one of our supporters who is a very good person.  Please click on:  http://www.youtube.com/watch?v=vZrf0PbAGSk

Friday, December 17, 2010

Where is Scrooge When We Need Him?

Maybe we took the lessons of Messrs. Dickens and Scrooge a bit too far. Perhaps there is some middle ground between being a nasty uncaring selfish old man and embracing the philosophy of the drunken sailor as our national financial psychosis. So, it got us to thinking about a favorite little Christmas ditty and how we might slightly modify the words to fit the present. Here goes.

With all due respect to Mr. Donald Gardner, we would like to offer our version of his song; best sung as if we were youngsters lisping through the toothless gap in our mouth.

All I Want for Christmas is…

Everybody Pauses and stares at me
Just because I borrow as long as you can see
I don't know just who to blame for this catastrophe!
But my one wish on Christmas Eve is as plain as it can be…

All I want for Christmas is a long shutdown,
A long shutdown.
Gee a real shutdown.

Gosh if I could only have a
long shutdown,
Then I would know there really is a Santa.

Its seems so long since I could even say,
“Borrowing Ben’s Banking Obanomics,”
Golly gee just how happy we could be
If we could just stop with the histrionics.

So, all I want for Christmas is a long shutdown,
A long shutdown.
Gee a real shutdown.

Gosh if I could only have a
long shutdown,
Then I would really know there is a Santa.

HO – HO – HO

Merry Christmas

Wednesday, December 15, 2010

How to Create Jobs

Well let’s see. Let’s just go over all the programs and the ideas and the efforts to create jobs.

We’ve had bailout programs.

And, we’ve had stimulus spending programs.

TARP programs. Banks borrow anytime with any collateral.

Stop the bankruptcies; takeover the automobile companies. 

And, we’ve extended unemployment benefits.

And we’ve kept paying top dollar to all the government employees.

Lots of green jobs, wind power, ethanol, Chevy volt. Jobs?

Built a battery plant in Michigan. Unemployment rate: 12%.

And, we’ve kept tax rates low, even for the rich. Doesn’t seem to be working.

And, we’ve eliminated the cola for social security recipients. That didn’t work.

And, we’ve passed equal pay laws. Not sure it's helping.

Big payouts to pharmaceuticals, universities, PBS and farmers. Not a lot of new jobs.

And we’ve paid really rich pensions to all the government employees. Probably good for them, huh?

And, we’ve passed lots of anti discrimination laws. Doesn’t seem to be creating jobs.

We’ve scrutinized every product for defects and flaws. But, where are the jobs?

Paid lots of big settlements to lots of people. That didn’t work.

Lots of laws and bureaucrats to make sure the environment is clean. Jobs?

And we’ve let almost anyone into the country who wants in. That’s a good idea, huh?

Minimum wage keeps going up. That didn’t work.

And we make darn sure anybody can sue anyone for anything. Didn’t work, but the lawyers like it.

And we’ve let almost every government employee join a union. That didn’t work.

And the Fed has lowered interest rates to zero. C’mon that’s gotta work but apparently not.

Heck the Fed will order up currency for any reason and spread it around. Jobs result?

We’ve borrowed more in the last two years than the entire debt was in 1990. That’s right folks; we have borrowed more in the last 24 months, $3.2 trillion, than the entire country owed, the outstanding amount of US treasury securities, just 20 years ago. That should work!

What else can we do?

What haven’t we tried? We mean, that’s quite a list of efforts up there.

We can’t think of anything else we can do. How about you? You got any ideas?

Hmmnn. Let’s just think about this. We should be able to figure it out, huh?

We could ask employers to build their products here in the United States and create the jobs right here? We could have an advertising campaign to point out all the things we've been doing for them? We could have suggestion boxes to get more good ideas like the ones above. We look at the list above and we think we have pretty much tried everything we can do to create jobs. We just need to work harder at all these things. Do more of them. This is not time to give up on all these efforts to create jobs. No sirree, Bob.

Can you think of anything else we can do?

Tuesday, December 14, 2010

Small Business Owner Speaks

TheFundamentals is presenting this interview to provide first hand input from an individual who has run his own business and who has dealt with the issues that face most small business owners as they compete for clients and revenue; try their best to be good employers and good community citizens as well as successful business operators.

We preface the interview with the following facts and reference: According to the government, 50% of private sector jobs are contained within companies that employ less than 500 employees. In 2006, 60 million people worked for companies with less than 500 employees and 60 million worked for companies with 500 or more employees. Source: http://www.sba.gov/advo/research/rs359tot.pdf   That is a remarkable statistic. But here is an even more compelling fact about jobs and business size: between 1993 and 2009, 65% of the net new private sector jobs in the United States took place in businesses with fewer than 500 employees.

TF: Sir, thank you for agreeing to this interview. Were you aware of the significant impact of you and your fellow small business owners (SBO) in creating jobs?

SBO: You’re welcome. I was not. I knew that we were a factor but I was not aware of that level of importance. I wish, I hope, that more will learn about those statistics.

TF: We imagine that many small businesses have many fewer employees than 500 but they still provide many families with paychecks and insurance coverage and retirement plans.

SBO: Absolutely. We’re one of ‘em.

TF: How would you characterize the climate in America to positively promote small business?

SBO: Not good. I can only speak for the locale where we are located which is a Midwestern state. Small companies must be encouraged, supported and not encumbered with costs, taxes, fees, rules and regulations. We cannot afford to deal with the staff costs, the administration and paperwork, legal fees and lawyers going over rules and regulations, accountant and tax fees and the management time required to attend to these activities. I spend a lot of time on these matters. I am always worried about a law suit. The amount we pay to the state for unemployment insurance is a great concern. Health care costs are overwhelming. Most small companies cannot pay for all the burdens of an aggressive government setting policies and demands on their incomes and their management time and limited resources.

TF: Why don’t you move to a state with more favorable conditions?

SBO: I live here. My family is here. Most small companies are not mobile. We locate where we live. What happens is that small businesses will tend to thrive in a state that favors a pro small business climate and limits taxes, fees, rules and regulations and not thrive in another state that burdens small business with taxes, fees, rules and regulations? I guess I could move but I don’t really want to. And this state is not that much worse than others.

TF: What are the characteristics of small businesses that make it in the public interest to promote them?

SBO: Great question. First the employment numbers you just quoted. Also, smaller companies maintain fairly close relations with their customers. Customers know who to call if there is a problem or if something needs to be solved or expedited. Much more so than with large companies. How do we know this to be true? Think about your own situation. Think about when you deal with a small company like the local plumber or HVAC company and compare that experience to a call to the phone company or the cable company. Compare dealing with a local automobile repair shop with the large car dealer. Think about going to the neighborhood restaurant and compare that with a visit to a nationwide chain. Think about the continuity of employees; the likelihood of direct contact with another human; the telephone experience; the lower costs; the satisfaction of a job well done at a reasonable cost. We offer a lot.

TF: What’s it like to be a small business owner. Are you on the golf course a lot?

SBO: What’s a golf course? Let me tell you something. I’m involved in every aspect of the business. Clients and customers; with the creation and quality of the products and service we offer; with the client training and maintenance of the products and with the training of the staff. I have a couple of key employees I depend on but I know if something is working or not working. If an employee is performing or not performing. If the product or service has a quality problem. I don’t hold a lot of meetings or set up many committees. I know how much it costs to add an employee and how much the non productive cost for social security, Medicare, unemployment insurance; workmen’s compensation insurance; lawsuit exposure; IRA or 401k retirement program costs and medical premiums will be. I know this stuff cold. See how many large business managers know this. I worry about if we are vulnerable to law suits from disgruntled employees and what it will cost us if we have to let a poor performing employee go. All these factors influence the decision making of the small business owner. I worry all the time. I live with these matters 24/7.

TF: Do you make a lot of money?

SBO: On an hourly basis? I wonder if I am even getting paid the minimum wage. Seriously, I pay myself a salary at the same amount as the maximum amount for social security contributions. Any profits made by the business also go on my personal return because we file as an S corporation. So, I pay taxes on my salary and then pay increased marginal taxes on any profits made by their company. If these tax rates are 30 or 40% of the company’s profits, say we make $150,000.00, that means that $45,000 to $60,000 of the company’s profits that could be invested in the company or used to hire a new employee are not available. My company is growing. Profits that go to pay for taxes and all this other stuff are lost forever. I would put the money back in the business. That is the big drawback to high tax rates on the profits of growing small companies. The owners know this simple fact just as they know all the costs of their businesses. I don’t want to borrow from the bank to make up for the tax payments because they will want liens on my home and all other personal assets. I don’t want my family to risk losing our home.

TF: How do all these factors affect your decision to hire new employees?

SBO: One of the biggest encumbrances on growing small companies and their ability to hire new employees is the financial drain caused by increased costs for taxes, fees, social security, Medicare, numerous legal exposures, unemployment insurance, workmen’s compensation and retirement plan costs. I cannot emphasize this enough. Talk to other business owners. Growing small businesses need relief from these government decreed burdens to thrive. That relief has not been forthcoming from either the federal government or many state and local governments in the United States. That is simply why small business is not generating jobs. We need them to back off. It costs too much to add employees and there is too much risk.

TF: Thank you.

SBO: You’re welcome.

Thursday, December 9, 2010

$900 Billion Trap Portends Pending Problems

The president just negotiated a $900 billion tax cut and spending bill, all of which will add to the deficit and debt, with the republicans who said that they just won a majority in the house because the voters want less spending; no more deficits and, hopefully, a plan to start repaying the debt. Mr. Obama’s party members are pretentiously claiming a bad deal. Is anyone buying this charade? Does anyone give oscars to politicians for acting like they’re getting a bad deal when they can’t believe their lucky stars that they not only got this deal but they got it from the republicans who should be totally opposed to this deal? The same republicans who are going to have to explain to their supporters for the next two years why they passed a $900 billion dollar additional borrowing program a few weeks after they got the vote to do the exact opposite?

This is puerile, sophomoric and downright inexcusable DC drama that suggests a growing divide between the responsible citizenry and the irresponsible governance group. We don’t know what the founders meant when they said that elected officials could be thrown out of office for “high crimes and misdemeanors.” But if this kind of irresponsible behavior and fiscal promiscuity does not meet any reasonable persons definition of “misdemeanor” then just what the heck is a misdemeanor?

The democrats will ride this thing as far as they can railing against the tax cuts for the high earners and act as if they are looking out for the country and the middle class and so appear to be the real heroes and then, at the last minute, they will vote for it with just enough votes to pass it. Their follow-up comments will be that we really didn’t want this deal with all these high end tax cuts but we had to do it for you. A $900 billion boondoggle that the democrats don’t want? Who writes their bad scripts?

Now here is the other, and perhaps dominant, travesty of this phenomenally fiscally promiscuous deal for the country. Will someone point out one republican who says, “No” to this deal? “We can’t afford it. Already we have too much deficits; too much debt. Time to buck up and focus on spending cuts and not add to the deficits with tax cuts.” Where are the republicans who could not say enough about spending cuts and deficit reductions five weeks ago? Where did they go? Did they lose that script?

So, here is TheFundamentals bottom line. There is no way the democrats will let this bill not pass. What we can’t believe is that there should be no way that the republicans will let this bill pass. So, what you hear/see from the democrats is pure theatre; designed to reinvigorate a defeated party that has no record of accomplishment and has a spectacular record of financial failure. Horrible results from trillions wasted. Horrible jobs numbers. A horrible and still declining competitive record in commerce, education and health care. It is all smoke, mirrors and Hollywood digital effects. It portends poorly for the future.

What we want to know is where are the republicans who should be railing against this bad deal? Is this what we can expect from Mr. Boehner and Mr. McConnell? If so we are lost. It is exactly the opposite of what they should be fighting for. If the republicans would do their job, the one they just go elected majority to do, then the democrats would have to put on a real fight. Not a scripted fight. Then we could start to measure whether we will ever bring fiscal responsibility and sanity to this country. Then we could determine where the cuts will fall. How the burdens will be shared. Then we could see a favorable future.

The responsible citizenry want an end to this foolishness. The politicians and bureaucrats cannot push their bloated stomachs away from the table; they cannot remove the needle from their arm; they cannot empty the whisky bottle down the drain. They are hopelessly lost in the addiction of fiscal promiscuity.

If elections don’t break this addiction and these horrible consequences, what else is there?

Wednesday, December 8, 2010

Obama Springs $900 Billion Trap

And the party of smaller government takes the bait. Pretty masterful stuff when you examine it. Let’s give credit where credit is due. Here’s what he, Obama, did and here is what the republicans let him do to them:

• Obama gets a huge and costly extension of unemployment benefits on top of an already huge and costly long term extended period of unemployment benefits. In case you don’t know, unemployment benefits are high on his “redistribution” list. 2+ years of unemployment benefits is just plain crazy.

• Obama gets a continuation of the “Bush” tax rates for all the middle class and the low income gang; he will get credit for that, and all he pays for it is….

• …the best campaign issue (tax cuts for the rich) anyone could possibly ask for in two years when he runs for reelection, because…

• …in two years he can force the republicans to either support a continuation of tax cuts for the high wage earners which is a guaranteed win for him with both his base and the many moderates who are sick of the lower tax rates on the high earners or the republicans can abandon that position and, in the process give Obama a big political win right during his reelection campaign.

• And, as hard as it is to believe, in this entire process there is not one penny of spending cuts or government agency cutbacks or government employment reductions or a reasonable facsimile thereof. The republicans had a chance to get something real from Obama and the democrats and what did they do?

• They abandoned entirely the spending reduction trading card and played the low tax rates for the high earners card. They completely ignored the message they just received from the voters and demanded a continuation of low tax rates for high earners without even a small spending reduction. And, they say Obama doesn’t get it?

We elect people to these elevated positions and give them high salaries and lots of benefits; rich pensions so that they shall never want. What we ask of them is to spend our money wisely and carefully and frugally. We don’t ask for bailouts and subsidies and unearned benefits. All we ask is that they control spending; balance the budget and pay down the debt.

Here is a brief reminder for the republicans. The reason you got the majority in the house a month ago has nothing to do with low tax rates for the high earners. It has everything to do with too much government; too much spending; too much debt; just plain too much involvement of government in everything we do. This message can’t be that hard to grasp, can it? So, every time the party in power wants your support, you can demand something in return. If that is too difficult to grasp, read and reread these few words – too much spending, too much debt, too many employees, too many agencies, too many bureaucrats and too many laws. And you trade giving Obama votes for his misguided plans for what the people voted for – less government, less spending, less debt, less almost everything. Do you get it? You get reductions in everything or you don’t go along. It is just not that hard to grasp.

We placed our trust in you and you failed us. The other guy outplayed you. When will you grasp that you must cutback to affordable expenditure levels? If he wants even $1 in tax cuts you get $4 in spending reductions. When will you grasp that you must fight Mr. Obama if you wish to even accomplish minor reductions in his expanded spending and redistribution plans? He wanted to keep the tax cuts for all but the high earners. Fine. Make the deal. All you had to do was say, “Okay, cut the department of education 20% (heck, it should be cut 100%) and reduce all other federal discretionary spending by 15% and we will okay the lower tax rates for the middle class. And by the way, get used to it. Government spending reductions are what the people want and will be the price for compromise (our votes) with us.”

Folks, were sorry to have to tell you but that ain’t no city upon a hill on the banks of the Potomac.

Tuesday, December 7, 2010

Leadership Series: Competition Works

The departing head of the New York City public school system, Mr. Joel Klein, posted a commentary in the Wall Street Journal dealing with his experience and lessons learned on this job. It is way too important to not be read. You can read the entire, brief article at: http://online.wsj.com/article/SB10001424052748704104104575622800493796156.html?mod=WSJ_Opinion_LEADTop

You may have noticed that TheFundamentals is directing some attention to the needed and long overdue changes in our poor performing public schools. This is not to diminish our focus on fiscal, personal and financial responsibility matters. However, the horror show that has now become commonplace in major urban areas involving politicians, teacher unions and poor performing public schools has a profound impact on America’s competitiveness and deficit/debt situation. But those are symptoms; the problem is the failure of these schools for the urban youngsters who don’t have choices. TheFundamentals remains committed to its theme of personal and financial responsibility and fiscal sanity. It just so happens that there is profound linkage between these two principles: the fundamentals of all children getting an opportunity to improve their general Welfare and balanced budgets, wealth and job creation.

Misguided policies that are now accepted wisdom by a large portion of the population and are used by one of America's two major political parties to encourage, promote and tolerate the appropriateness of teachers forming unions to advance their self serving agenda over the very purpose of their being; coupled with their blaring and continual demand for more public money to finance their self serving agenda, needs to be fully disclosed and then discarded once and for all.

It appears that there is a chance that America can grasp this opportunity to do away with these misguided policies. Teachers unions must be dissolved where education outcomes are not attained. Competition into school districts must be implemented where kids are now forced to settle for a crappy education. The competition comes from parents being able to use public moneys to send their kids to performing schools.

There is nothing in this world like the contagion of good competition. It seems to terrify many (AFT, AFL-CIO and NEA) but it sure develops the human spirit and the human condition. What do you think the Chinese would do with nonperforming teachers demanding more pay, more pensions and more days off?

Here are a few straight forward comments, taken from the above article, written by Mr. Klein (TheFundamentals comments are in the parentheses):

• It's now proven that a child who does poorly with one teacher could have done very well with another. (So much for the teachers blaming the parents)

• …we were told that education isn't a business. Maybe so, but whether it's health care, education or any other service, poorly-structured, non accountable delivery systems cost a fortune and don't work (In a few concise words, Mr. Klein has just described the entire causal relationship that is the backing for the all the remedial themes of TheFundamentals)

• Competition works (no one could say it more concisely; competition is the answer to Americas horrific bubbles in government spending, health care and education. Competition terrifies government employees and teachers and the unions they form to keep competition away)

• We must stop protecting ineffective teachers….(Why is this just not done?)

• Every school has to be one to which we'd send our own kids. We are not remotely close to that today. (Not much more to say after digesting this indictment of large portions of America’s education system)

Mr. Klein is 64 years old. He’s a lawyer. He is also a Democrat (we think) and a refugee from Clinton’s white house. We are in absolute awe of his ability to overcome these obstacles. (Aside: we are, of course, just kidding.)

What is he? Well, after reading his comments, he is the hope of tens of thousands of kids who are ignored every day of every week by the NEA, the AFT and the political party that caters to them.

He is also a leader. May we say it again with emphasis. MR. KLEIN IS A LEADER. And that is why we dedicate this Leadership Series essay to him.

TheFundamentals hopes that Mr. Klein will take on all these miscreants in his new job. He has the credentials, the moxie, the cojones and, hopefully, the will to save these kids. If that is his mission, and we sure hope it is, he deserves our support in a big way!

Thursday, December 2, 2010

Dick and Jane: School, Yes; Unions, No

It is time to outlaw, as in make illegal, teachers unions and to do away with all non performing public schools. It is simply time to make available to students and their parents alternatives for education that is paid for with public funds. Everyone agrees that education is the fundamental basis; the foundation for the development of the individual and the progress and safety of the community. In too many school districts parents do not have the choice of a good school with good teachers and good performance results. They are forced to place their children in schools with inadequate leadership; inadequate teachers and performance records that contradict the fundamental need to advance both the individual and the community.

How long is America prepared to let a sizable portion of its youth go un and under educated because of the political power of greedy teachers and administrators and union personnel? How many more children will never experience the joy of educational accomplishment? How many more children will never learn the basic fundamental lesson of competing through study and hard work to attain the satisfaction of a high grade and other recognitions for a job well done?

There is nothing in the United States Constitution about the right to an education. There is nothing in the constitution about being able to go to a school with an established record of accomplishment. Nothing about students being able to read and write and think and examine and analyze and conclude about decisions that will determine a good portion of their future and their ability to pursue opportunity.

But guess what? There is nothing in the United States Constitution about the right of teachers to join a union and to negotiate with the threat of strike and work reductions for time limitations, limited work schedules and high paychecks and pensions. Nothing at all.

But the constitution does state that it is about promoting the “general Welfare” of the people and Welfare does not mean handouts or work stoppages or competition limits. It means opportunity and well being and prosperity for the people. It means a chance to do better.

So, if you were asked to make a decision as to which right is more important: The right to a good education and the right to be able to prepare yourself to your maximum potential versus the right of the teacher to negotiate a large paycheck with lots of work restrictions and days off, which right would you prioritize?

TheFundamentals chooses the right to an education and the right to opportunity and the right to compete. TheFundamentals rejects the right of teachers to unionize; to threaten or implement work stoppages and to restrict their efforts and not be measured and either promoted or terminated based on performance. To us it is a no brainer!

Education is no place for unions; for work limitations or for non performers. Education is about promoting the general Welfare and that means competition and accomplishment and performance. It means opportunity for everyone who wishes a chance.

Please read this article and then let us know how you would vote. http://www.chicagotribune.com/news/education/ct-met-cps-admissions-dance-20101129,0,3374642.story

It is time to outlaw teachers unions and it is time to open up public education to competition. If the rich and the middle class and the suburbanites wish to participate, so be it. They are not our concern. Oh no. They have it figured out. Just like the politicians and bureaucrats who get their kids in the good private schools. It is time to do it for the kids who would like the opportunity to compete and show their stuff. We, at TheFundamentals, happen to believe that the future of this country rests with those who want a chance to participate and to compete for the opportunities that either exist or will be created by the very act of getting an education and creating opportunities. We believe that the future lies with those who are being short circuited right now by a bad system. This country can no longer afford to discard its bright but disadvantaged youngsters in crappy schools so that a coddled group of protected non performers can keep their jobs.

We vote for kids who want a chance. We vote for youth; education; hard work; accomplishment and opportunity. Throw the unions out. Dick and Jane want to go to school to learn then three R’s not union rules.

How do you vote?

Wednesday, December 1, 2010

America,The Face of Your Fear

The face of fear:  a nineteen year old kid from Somalia (average life expectancy – 50 years; religion – Sunni Muslim.) We let him in to our country and we made him a citizen. Doesn’t that warm the very depths of your “melting pot” heart? Aren’t you grateful for the government that is constantly telling you about their needed services to the public and their “looking out for you” mentality and how all that they do is for your safety; whether it’s at the airport or conducting the 9:00 pm roadblock to check your insurance card and breath; or the labels on your pillows, toys, soup cans and cigarette packages? The cameras all over the place. The locked down buildings that contain the millions of their employees.

Here is what it comes down to. The very government that removes thousands of dollars from your pocket every year in every conceivable way while justifying the removal of your money for all these fancy services and tests and processes and rules and laws and bureaucrats and union rules ad nauseum gives entry and then citizenship to a Muslim kid from Somalia, actually encourages him to become a citizen, and then when it finds out he didn’t really mean the oath he took, the one that says…

"I hereby declare, on oath,

that I absolutely and entirely renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty of whom or which I have heretofore been a subject or citizen;

that I will support and defend the Constitution and laws of the United States of America against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same;

that I will bear arms on behalf of the United States when required by the law;

that I will perform noncombatant service in the Armed Forces of the United States when required by the law;

that I will perform work of national importance under civilian direction when required by the law; and that I take this obligation freely without any mental reservation or purpose of evasion; so help me God."

…they set him up with phony explosives so that they could look like heroes when the stupid kid bought into the whole package. Is America great or what? Well, America here is the face of your fear:

This kid is who you should fear according to the gun toting bureaucrats who worked with the kid and then saved us all from his misadventures. Tremble in your shoes America. This threat is the justification for spending trillions of dollars on homeland security and foreign wars. Of building bureaucracies that do not have a clue what each other is doing. Of creating destructive debt burdens that outweigh in reality and certainty any possible level of damage this kid and his ilk could possibly do.

America, if you are afraid of this kid, you are getting exactly what you deserve!

Tuesday, November 30, 2010

Leadership Series: Carry a Big Stick

On Thanksgiving Day, TheFundamentals expressed its appreciation to those who fight and die for our freedom in distant lands. As our readers know, we are quite critical of the military leadership in choosing its strategies for battle locations and plans as well as strategic balance of power issues. For example, how does it help the United States to invade Iraq which was a power balance against Iran? The US now is an occupier of Iraq; completely stretched in terms of finances and personnel and unable to provide the same balance against Iran that Iraq provided both geographically and politically. It makes no sense. In Afghanistan, all one need do is study, briefly, its history. We now fight the very same folk that we armed in their successful battle with the Soviet invaders. These successful warriors, who eat sand for lunch, will tell you that they were the ones who brought down the Soviet empire. We don’t argue that position but we do question what the heck we think we are going to accomplish in that geography when we also must ultimately leave just as the Soviets did?

We would suggest a different approach including strong ties with India (which Mr. Obama is pursuing) and the Chinese (which means quit borrowing so much from them) and the Russians (who have their hands full with neighboring Muslims) and let them worry about Afghanistan and Pakistan, their neighbors, and the other Stan’s. In the meantime, it is just plain time to put an end to emigration and visitation from folks from those countries. If and when they decide to become tolerant societies with openness for other religious beliefs we would, of course, reconsider the restrictive policy on their citizens. Harsh? Hardly. More like common sense.

Listen to Lt. Colonel Allen B. West, brand new congressman from FL: http://www.youtube.com/watch?v=Eu8dRfgNxGM&feature=related  

And, some simpler, basic logic from the Colonel: http://www.youtube.com/watch?v=TkGQmCZjJ0k&feature=related

Instead we invade their lands; kill some of their combatants of which they have an endless supply of recruits; kill many innocent civilians and thereby guarantee a building hatred for our country and couple those accomplishments with an open, welcome border policy for their angry citizens. Not a smart combination. Not a winning strategy. Not good tactics.

Americans are proud of their military. The men and women of the United States have a noble record of great accomplishments in fighting despots and tyrants and killers in many locations. But our civilian led military complex with its insatiable appetite for spending has also done some things that others have not. Four very significant military adventures in the last 65 years stand out:

• Monday, August 6, 1945 the atomic bombing of Hiroshima resulting in the immediate and subsequent death of an estimated 90,000 to 166,000 civilians
• Thursday, August 9, 1945 the atomic bombing of Nagasaki resulting in the immediate and subsequent death of an estimated 60,000 to 80,000 civilians
• Thursday, March 20, 2003 the invasion of Republic of Iraq, population: 31 million; a Muslim (97%) country (Shia 65% and Sunni 35%) resulting in the death of 100,000 Iraqi civilians with estimates of additional civilian deaths as high as 500,000
• Sunday, October 7, 2001 the invasion of the Islamic Republic of Afghanistan, population: 29 million; a Muslim (99%) country (85% Sunni and 15% Shia) resulting in the death of an estimated 34,000 Afghan civilians

The United States cannot plead innocence in the killing of foreign civilians. We go to great lengths to justify these acts but others do not forget.

There are many patient people in the world. The Muslamic peoples are not going to go away. They do not play a short term game. We must learn to match their long term strategy of perseverance with a winning long term strategy of our own. It will certainly not be easy but the combination of debt and invasions and civilian deaths are neither winning strategies nor winning tactics.

Thursday, November 25, 2010

Thanksgiving 2010

We are thankful for......

We love our country.  We will always be grateful that we were born American.  We will never turn our back on our country particularly now in its time of need for good leadership.  We are committed to a free and thriving America.   We will always be thankful to those many individuals who sacrifice so that we may be free.  It is time for our leaders to require sacrifice from all of us.  It is time to return to American fundamentals.

Afghanistan War (October 7, 2001 to present)  -    1,077  Americans Killed in Action

Iraq War (March 20, 2003 to present)               -     3,492  Americans Killed in Action

Source:   http://www.defense.gov/news/casualty.pdf

Thursday, November 18, 2010

Decision points?

Bush II has been pretty good about staying home and keeping quiet. But, alas, the allure of the easy memoir dollar has pulled him out of the shadows and the Oprah’s of the world are only too happy to accommodate even while deprecating. We haven’t read it; don’t need to; don’t plan to. We lived it.

There is little doubt but that the current administration is beset with a myriad of problems that either began or were enthusiastically enhanced by both Mr. Bush II and Mr. Clinton. Clinton gets a break in the current viewpoint for several reasons, including; one, the basic media machine is pro Clinton and anti Bush, and; two, Bush overextended the US military in two unnecessary adventures as they were designed and executed. Third, the housing bubble that began under Clinton and the congressional mishandling of FHLMC and FNMA as well as the feds politically motivated monetary ease policies and disregard for fundamental regulation all burst wide open on Bush’s watch. Frankly Bush deserves the attributed blame for this mess because he did nothing to step in and mitigate it. And debt rose almost $5 trillion during Bush; about $1.5 trillion during Clinton.

Bush had many other troubled and bad “decision points.” He did nothing to rein in the spending of the federal government. The federal debt rise on his watch is tough to pass off as someone else’s responsibility. Of course, he is not responsible for the promiscuous spending in states such as California, New York and Illinois; Connecticut and New Jersey. But his policies supported the flow of federally collected and borrowed moneys to these spending machines and that is unforgivable. On the other hand the same promiscuity occurred under Clinton. To this day, few grasp the significance of the federal government’s support of America’s most insolvent states.

So what else could Bush have done? Could he have pressured the fed to raise interest rates and regulate bad housing lending? Enforce lending standards such as documents and earnings and down payment requirements? Of course he could. He didn’t. And the fed will quickly respond that he could have vetoed spending legislation (fiscal policy) which he completely failed to do. He gave lip service, perhaps, to Fannie and Freddie silliness but he really didn’t mean it. He enjoyed laying claim to responsibility for expanding housing ownership, particularly among minority groups. Some leadership, huh? Decisions? Hardly. More like take credit for whatever spin you can get out of the situation and avoid responsibility for the unanticipated negative consequences. But, alas, not too many memoirs entitled, “Avoiding Responsibility.”

Ultimately, the early returns on Bush cannot help but to question the very title of this premature memoir. His decision points, today, with little time passed for aging and perspective suggest that much of his presidency was not based on “decision points” but was characterized by panicking in lieu of thoughtful consideration and decision making. It seems that Mr. Bush followed a fairly consistent pattern of what we at TheFundamentals have observed personally from other leaders who lack history, perspective and patience. They believe they must do something even when they don’t know what to do. So they send subordinates on missions that frequently find them bouncing off walls and returning to their starting point with nothing to show for their efforts except the appearance of motion and activity and huge expenditure records. They believe you can’t sit still. People expect you to do something. Or, they believe doing something is better than doing nothing because you can be deemed disengaged for doing nothing. Nothing worse than having to justify patience and forbearance, huh?

We have said it before. America needs a big and lengthy time out. A period of quiet introspection that would also be characterized by sacrifice and frugality. But, what could possibly be more un-American than doing nothing? And slowing down our borrowing and spending? And lecturing to everyone but the fellow/gal in the mirror?

So, the Bush nonsense continues with the replacement kid who thinks that strategically government is the answer and spending is the tactic by which to implement the strategy. He now lectures the world that American economic recovery is critical to the well being of the world. A few years ago he was dodging roll calls in Springfield, Illinois and now he knows what’s best for the world? Implicit in that thinking is that you had better help get our spending/consuming/borrowing machine back on track or your gonna be sorry. Without us to buy your stuff, you won’t be making as much of it would appear to be the logic of this argument. In the meantime one of his hands reaches out to the Muslim world while the other gropes your privates at the airport screening designed to prevent bad Muslims from blowing up American planes. We often wonder how much of this goofy behavior would occur if they and their families were subject daily to their solutions imposed on the rest of us? (Aside: Does Obama shop at Wal-Mart? Answer: Not in Chicago.)

Back to George II. We had eight years of this leader (liberal use of term) who displayed his lack of history, lack of knowledge about limitations and lack of foundation in fundamentals by panicking whenever a thoughtful process was required. We think history will characterize these eight years as “Panic Points” not decision points.

Monday, November 15, 2010

Harpooning the American Whale

Well, we got a sneak preview of what the fancy commission thinks we might need to do to cut the deficits and stop the ballooning debt rise. Most of their early notice/sneak peak/trial balloon seems quite tame to us at TheFundamentals but let’s quickly recap some of the suggestions:

• Cut the federal workforce by 10% (not much but, just like the busload of lawyers going over the cliff, a start)
• Increase social security full benefit qualifying age to 69 (grandpa goes back to work; we’re kidding of course, these changes are so far out in the future as to be meaningless)
• 15 cent a gallon gasoline tax (there should be no tax increases, none, before all the spending cuts are implemented)
• Eliminate mortgage interest deduction (not good timing for a crappy real estate market)
• 3 year federal pay freeze (what? How about a pay reduction first of, say, 33 %)
• Means testing for social security recipients (soak the rich; sounds familiar; expect to see a lot of this thinking)
• Medicare cuts (we would encourage starting with benefit reductions for fatties)
• Lower income tax rates (yeah baby)

We support all these suggestions but they will need to be strengthened (cuts implemented and measured before any tax changes; adhere to a strict 3:1 ratio of $3 in realized spending cuts for each $1 in revenues added) in order to accomplish the goal of deficit reduction. None will deal with America’s inability to compete in the world marketplace (see below.) In the meantime, we are not optimistic about the deficit reductions given these early reactions. First, from the lovely NPelosi, who said, “Simply unacceptable.” She sure got the message a few days ago, huh? Now do you see why term limits are an absolute necessity for this republic of ours to survive?

And, from the biggest, fattest whale of them all, Richard Trumka, AFL-CIO president and Obama buddy, “…the deficit commission just told working Americans to “drop dead.” Funny thing about this Trumka guy. His union has been telling American employers and taxpayers to drop dead for decades. Hey Richard, would you accept pay equity between the private and public sector? You union guys are big on pay equity, huh?

We didn’t see some of our earlier suggestions like sell the Grand Canyon and auction off California to the highest (well, any) bidder. If we could merge Mexico and California forming a separate country, we could solve two problems quickly. Doesn’t solve Illinois and New York but it would be a boon for the fence builders. Not as farfetched as you may think. More to the point, here are the things the commission missed that are needed to make America competitive and create lots of jobs:

• Tort reform; litigation and settlement limitations, loser pays; sunset on all legislation with legal penalty provisions. Does not cost a thing; makes America much more competitive; creates a pro business atmosphere which is badly needed for wealth and jobs creation
• Peel back the following protected classes: disability laws; equal pay laws; discrimination laws and any other laws, rules and reporting imposed on employers with less than 1000 employees, going to 5000 employees in three years (we would call this legislation, “Get America back to work law”)
• Eliminate all legislative and bureaucratic support (yes, Arne, that means the department of education) for the following special interest groups: teachers unions and all other public employee unions
• Eliminate all defined benefit pension plans for public employees
• Eliminate all federal funds going to states that do not follow the above guidelines (this small change coupled with the “Get America back to work law” would go a long way to solving America’s job creations problem. We would, however, need to establish a work permit program for the Mexifornia immigrants to work here)
• Reduce by 50% all subsidies to all federal subsidy recipients; follow up with second 50% reduction in 60 days

Do you notice that these changes don't cost anything?  They are cutbacks that would send the message to American employers that we want you to build your products here; expand your businesses here, not in Asia or elsewhere; create new jobs, lots of new, good jobs here.  Where is the commission to make America competitive?  Create jobs?  Do you really think Pelosi or Trumka have one clue about how to be competitive or create real jobs?

So, now what? Tune in. Don’t know that much will come from all this bluster. The proposed cuts and changes are minimal, but you can bet the fur will be flying; the lobbyists will be lobbying and the special interests will be buying lots of fancy meals for congress people at those overpriced restaurants. Hey, how about a tax on fancy meals at overpriced restaurants? Their lobby can’t be that strong can it? Richard probably wouldn’t go for that suggestion either.

Thursday, November 11, 2010

The Soldier: - By Charles M. Province

It is the soldier, not the reporter, who has given us freedom of the press.
It is the soldier, not the poet, who has given us freedom of speech.
If you can read this message thank a teacher, If you are reading it in English of your own free will THANK A SOLDIER!
It is the soldier, not the campus organizer, who has given us the freedom to demonstrate.
It is the soldier, not the lawyer, who has given us the right to a fair trial.
It is the soldier, who salutes the flag, who serves under the flag, and whose coffin is draped by the flag,who allows the protester to burn the flag.
To all the brave men and women who have dedicated or given their lives to protecting this country and it's freedoms: Thank you.

Wednesday, November 10, 2010

America, the spoiled brat of the world

Last week we presented a discussion of the feds ongoing plans to goose the American spending machine by printing and distributing currency. As we all know, there has been substantial deficit spending by both the previous and, at quite an accelerated rate, the current administration. This is simply promiscuous fiscal expansion policy (F E) that has no basis in sound, fundamental economic policy. There has been lengthy attribution of this approach to the British economist John Maynard Keynes. It should both be noted and recognized that England has now rejected such spending programs and is instituting significant spending reductions. We would encourage any interested reader of these essays to watch a recent “prime minister” question period. It is a remarkable display of good leadership dealing with past mistakes, deficit spending and a prior administration with leadership that is locked on failed policies of subsidies, protected classes, special interests and massive deficit spending. If you want a quick primer on the future of Obama’s PIP, dwindling in its obliviousness, watch the labor party representative during the question and answers period. Just click on: http://www.cspan.org/Watch/Media/2010/10/27/HP/A/39987/British+House+of+Commons+Prime+Ministers+Questions.aspx

Now to continue our review of America’s fiscal and monetary promiscuity and Mr. Bernanke’s policy of Quantitative Easing (Q E.)

Indiscriminate printing and distributing a national currency, much less the world’s reserve currency, is not only an act of desperation, it is unsound monetary policy and it is deserving of complete censure and rejection from any financially responsible citizen of the US and any debt holder of any US obligation. At an absolute minimum, the direct devaluation of a nation’s currency by its central bank should be censured by the citizens of that country and should lead to an immediate termination of all connected with such act. Further, in a representative democracy the elected officials representing the people should be called upon to take a position – aye or nay on such a proposal. And the elected president should be called upon to either accept or veto such a desperate act. Let the elected representative’s stand one way or the other for two reasons: one, it is their job and; two, they can either stand or fall at the next election based on the end results and end consequences of such a horrible policy.

America has chosen neither path. The central bank announces a massive monetary expansion program on top of a previous massive spending and monetary expansion program and not a peep out of congress and not a peep out of the president. The people spoke and devastated the party responsible for the spending. Just think about that simple consequence. The people, who will make the sacrifices and engage in a period of frugality, are begging for leadership that will enact such policies.

The Obama presidency is doomed unless the divided PIP in congress saves it. The Bernanke gamble of monetary promiscuity will only pay off, and briefly at that, for Wall Street, the banks and large corporations with pricing power. It will keep the wolf away from the public employee’s union door for a short period of time but these people only live for today. Apparently, Mr. Obama and what remains of his PIP have fully embraced this short term view. The rest of the world, that group that the immature candidate Obama rallied to his cause during his campaign against Bush and McCain, now judges Obama as a failure.

The publication Financial Times is not anywhere near as bashful in printing its observations about the Bernanke “quick and easy” boom plans. Here is their article: http://www.ft.com/cms/s/0/981ca8f4-e83e-11df-8995-00144feab49a.html#axzz14MQ2O700

And their editorial comments, on the same action, are must reading:

We repeat out previous observation about Bush II and Greenspan. They failed America greatly. Obama spared no adjectives in so describing Bush’ actions. And now the world looks at Obama with the same critical eye. Obama responds cluelessly. He has redefined the obliviousness of “not getting it.” Together with the singularly focused Bernanke, these four individuals are determined to enter the history books as the destroyers of America. They do not and did not understand what they did and are doing.

Instead of dealing with the fundamental economic burdens that have destroyed America’s competitiveness in world markets, they revert to easy programs of spending, borrowing and currency devaluation (F E and Q E.) The United States is getting its fat behind handed to itself everyday in the world’s competitive marketplace

The German Finance Minister opined as follows about Bernanke and Obama’s foolishness, “With all due respect, US policy is clueless,” Wolfgang Schäuble, told reporters. “It’s not that the Americans haven’t pumped enough liquidity into the market,” he said. “Now to say let’s pump more into the market is not going to solve their problems.”  Herr Schäuble provided a direct perspective on these issues in an interview available at http://www.spiegel.de/international/world/0,1518,727801,00.html .  It is worth reading.

In a recent editorial in the Washington Post (see: http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html  ), Bernanke made the following statement: “The Federal Reserve cannot solve all the economy's problems on its own. That will take time and the combined efforts of many parties, including the central bank, Congress, the administration, regulators and the private sector.” Bernanke has got the players and the order of things quite wrong. The central bank, congress, the administration and the regulators caused and are now exacerbating the problem. The private sector must fix it. But, they need help. Unfortunately the help they need is the diminution of the other four Bernanke players in his order of things. Bernanke sees the four government players as a solution. Until they are seen as the real problem, the problem will continue. Herr Schäuble, the Financial Times, David Cameron and other world leaders understand the real problem. They see America as a "clueless" spoiled brat.  When will Obama and Bernanke?

Monday, November 8, 2010

Leadership Series: in loco parentis

We can write about leadership. We can complain about a lack of leadership. We can acknowledge it when it occurs.

It occurred on Friday in South Bend, Indiana and Saturday in a place called Beaver Stadium in Happy Valley, Pennsylvania. We would like to acknowledge it on these pages.

Here are the opening three paragraphs of the statement from the president of University of Notre Dame on accepting responsibility for the tragic accident that took the life of a young Notre Dame student:

November 5, 2010

Dear Notre Dame students, faculty, staff, alumni, parents and friends,

The tragic accident that took Declan Sullivan’s life just over a week ago, the Mass of Remembrance in the Basilica, and his family’s faith-filled funeral for him this week have given each of us the chance to grieve, remember and pray. Declan was a bright and energetic young man who lived his life with passion. We will miss him, and we believe that he is in the loving embrace of our Lord.

Over this past week, I have had the great privilege of meeting with and trying to provide some measure of support to Declan’s parents, sister, brother and other members of his family. Many Notre Dame faculty, staff and students also have reached out to offer their assistance. Yet the Sullivan family, through their incredible grace and courage, has given us support and an example of how to respond. They ministered to us as we tried to minister to them.

There is no greater sadness for a university community than the death of one of its students under any circumstances. Yet this loss is more devastating, for Declan died in a tragic accident while in our care. For that, I am profoundly sorry. We are conducting an investigation and we must be careful not to pre-judge its results, but I will say this: Declan Sullivan was entrusted to our care, and we failed to keep him safe. We at Notre Dame — and ultimately I, as President — are responsible. Words cannot express our sorrow to the Sullivan family and to all involved.

(for the remainder of the letter, please go to http://newsinfo.nd.edu/news/17375/  )

In Notre Dame,

Rev. John I. Jenkins, C.S.C.
University of Notre Dame

On Saturday, an older fellow accomplished quite the feat – 400 college football wins. His reluctant interview following the game is a treat and renders a valuable lesson about humility and perseverance. It is offered at:


Accepting responsibility. Humility. Perseverance. Three leadership traits.

Thursday, November 4, 2010


If you follow monetary policy (who doesn’t besides John Stewart, John McCain and the last two white house occupants?) you know that the letters Q E stand for quantitative expansion or quantitative easing. Now that sounds pretty important doesn’t it? Quantitative expansion. What on earth is quantitative expansion? Sounds like something Albert Einstein could explain.

Here’s how Q E works. First some background. Federal reserve banks distribute currency where ever it is required. For example, let’s say your local bank has been the recipient of a large deposit of old raggedy-edged one, five and ten dollar bills. They have guidelines as to whether those bills should remain in circulation or be turned in for new bills. So, the local bank bundles up the old bills and sends them to the local fed and gets new bills in return. And that way when you go to the store you don’t get handed too many bills that make you wish you were carrying hand sanitizer.

Now here’s how else the fed distributes currency. This is the Q E part. It buys US securities. You know, the ones issued by the US government every time it does something but there is no cash in the till to pay for it. There hasn't been much money in the till for the better part of 30 years. But the crazy spending (which technically is not Q E but F E or fiscal expansion) has really taken off ever since Bush II and Obama II got their jobs at 1600 Pennsylvania Avenue NW, Washington, DC 20500.

The fed can buy US government securities from the treasury department or just go into the marketplace and buy them from member banks or the teachers’ pension fund or Mr. and Mrs. Smith. Usually when they buy, they buy a lot; like hundreds of billions. But, of course, the banks or the pension fund or Ma and Pa Smith want to get paid if they sell their bonds to anyone, including the fed. So, how does the fed get the cash to pay for the bonds? Two ways. They order it up from the bureau of engraving. In 2009 they asked for and received hundreds of billions of dollars worth of federal reserve notes. Each note (those pieces of paper in your pocket) costs about 7.5 cents to print. The pennies the fed pays covers the engraving, printing and related costs and put a few bucks in the till to cover the costs of the Christmas party (just kidding.) But that is peanuts compared to the trillions they create with electronic debits and credits in the banking system. No paper involved.

If the fed thinks that things need to be goosed up a little, they buy up securities and put cash (paper and electronic entries) in the system. And that folks is what quantitative easing (expansion) is all about. Did anyone do anything, like make a product or provide a service? Nope. Did anyone paint the house or fix the road or build a better mousetrap? Nope. Not necessary with Q E. You don’t need real economic transactions. You just create US dollars out of thin paper or thinner air and buy treasury securities. Eureka. You’ve got Bernanke Boom times.  (Aside:  When the financial history of American is written, the Monday morning quarterbacks (aka historians) will define the perfect storm as the unfortunate alignment, in a 12 year time span, in Washington DC, of Messrs. Bush II, Greenspan, Obama II and Bernanke.  Let's just call them the four equestrians of the apocalypse.  If TheFundamentals had any graphical skills, we would design a new federal reserve note with these idiots riding rampant across a background of the constitution and the front page of TheFundamentals website!)

What do we at TheFundamentals call this kind of activity? Well we believe, as we have said many times, in not reinventing the wheel. If someone else can say or do or demonstrate or even describe something better than we can we like to copy them, with accurate and appropriate attribution of course? So, we are going to answer our own question, “What do we at TheFundamentals call this kind of activity?” We’re okay with using the feds own letters; slightly modified. We call it Q and E.

Quick and Easy. Remember the advertisement that used that expression, "We make money the old fashioned way. We earn it.” The fed has revised it. They make money the old fashioned way all right. The same way banana republics have been making it since someone came up with the idea of coin and currency to replace gold, diamonds, wheat, oil and real wealth created products. The fed says, “We make money the quick and easy way. We print it.”

There are only two questions you need to ask anyone who will take your call. One, if this scheme backfires on us, what happens? And, two, if it’s so easy, why doesn’t everyone do it?

Monday, November 1, 2010

The Calling of Our Time

Lying to the government. If you are either arrogant or stupid enough to answer any question posed to you by any defined authority figure without the benefit of legal counsel, you may be able to answer this question, “What form of law abiding, citizen responsive legal system would establish the principle that the authority figure can lie to the citizen without any consequence but an otherwise innocent citizen can be punished for lying to an authority figure?” A monarchy perhaps?  A dictatorship for sure.  Some form of communist tyranny?  The premise of the question is simple. If the citizen is not guilty of any crime, then how can they become guilty of a crime by simply not either responding adequately or accurately to an authority figure who is not similarly disciplined?  By the way, this issue is not just the arrogance of gun toting bureaucrats.  The 22 million other government employees without guns are not regularly reminded that they work for the taxpayer.  Their unions sure don't perform this task.  How can we remind them?  Regular reductions in force would be a good start.

Fiscal responsibility. It seems only reasonable that a person who conducts their private financial affairs with sensibility and frugality should be able to not have a third party or presence deny them the same form of conduct with respect to the activities of the state or any form of government that can lay a claim on that individual. You could argue that there would be extenuating circumstances that would be exceptions to that rule. For example, if a community is under invasion from without and they enter into a defensive compact, logic and reason would suggest that the cost of that defense should be borne by all, regardless of personal inclination. Alas, we now have now started down the slippery slope. Soon, the process by which this communal obligation is distributed can now be distorted to other activities based on decisions for reasons that may not be as compelling as common defense. If you’ve read this far, you now understand the reason for the 18 enumerated powers to the national congress in the US Constitution.  Repelling invasions happens to be one of them.  These constitution drafting fellows were pretty darn smart.  Let's get back to EIGHTEEN.  EIGHTEEN IS ENOUGH!

Privacy. The right to be left alone. As defined by the party that wishes to be left alone. Let us remember that a defined fundamental is that we are not all alike. We do not think alike; worship alike; dress alike; behave similarly or seek similar objectives in the choices we make. Notwithstanding the power of Madison Avenue to define us quite homogeneously, it is just the case that many of us do hear different drum beats and many of us do choose very different paths. Even Madison Avenue acknowledges these unique characteristics by going after segments of the consuming audience with so-called targeted messages. So, the question is, “Must you conform?” In 60+ years of observation and many firsthand experiences that answer is quite simply, “YES.” The undisciplined power of the government has stripped away the simple need for knowing and being oneself. George Orwell saw it coming. As did Henry Thoreau. The founding fathers were not just telling George III and his minions to back off and withdraw their arbitrary impositions; they were saying we can take care of ourselves, thank you very much. Butt out. We don’t need you and we don’t want you.

So, TheFundamentals is quite certain that you, our readers and supporters, can add to these few examples of unnecessary contradiction between human fundamentals and the practices of today’s authorities. The change most people seek is not more of their external involvement and more of their definitions and futile excursions with other people’s money. It is simply the opposite. Go away. You have become an unwelcome and nonproductive factor in our existence. Regardless of your tactics and your constant fear based messaging we would prefer to proceed without your presence. It does not escape any of us that the money flow to all these forms of intrusion – unreasonable rules, indiscriminate and promiscuous spending and warring and constant requirements in private matters can be mitigated with the simple elimination of funding. Without the funds, they just go away. There is no greater or effective weapon to correct the mess that we are in than the simple elimination of funding. This is our message to you who get to determine the future of this country of ours. If you wish change, you must insist on the elimination of funding of the intrusions defined above. That is our message to you. Unless you convey it by using this criterion in selecting your representatives at all levels of government on November 2, 2010, there will be no change.

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

America is greatly in need of “new Guards for their future security.” The old Guards have lost their way. They are no longer fulfilling the role of securing the unalienable rights endowed to us by our Creator including Life, Liberty, Privacy, Fiscal Responsibility, the Pursuit of Happiness and no lying government agents. So it is. It is now up to us to "institute new Government."  It is our right and our duty.  It is the calling of our time.

Thursday, October 28, 2010

Leadership Series: Political Parties

The operative theme of today’s essay is captured by a quote from one of our founding fathers (Ms. Palin, please note the name for future Q and A purposes):

“In my many years I have come to a conclusion that one useless man is a shame, two is a law firm, and three or more is a congress.”

John Adams
US diplomat & politician (1735 - 1826)

As you know, in the United States, a “congress” is the term used to encompass both the house of representatives and the senate. And, as you also know, those two bodies are made up of elected individuals who belong almost entirely to one of two political parties. So what Mr. Adams was really saying is that three or more useless men make up a political party. What is it about our political parties that cause them to fit Mr. Adams conclusion so perfectly? Why are political parties so unable to provide leadership? Why are they totally useless in any form of crisis or difficulty? Why do they always revert to the same solution(s) regardless of issue or crisis?

To wit. The Party out of Power (POOP) with their limited IQ leaders (think Bush II, Delay and Hastert) engaged in two basic activities during their regime. These two activities were spend, spend and spend and war, war and war. For eight years they borrowed massive quantities of cash from everyone with cash to lend and used it to spend, spend, spend and war, war, war. What’s wrong with that you ask? Well, the people wanted them to stop spending and stop the warring; that’s what was wrong with that. Why were the people opposed to the spending and the wars you ask? Because after a while the people realized that the efficacy of the spending and the wars was not determinable. That’s why. What do you mean by efficacy one may ask? Efficacy means no measurable results for the dollars and lives spent. We repeat no measurable results for the money or, in the case of war, lives spent.

So, PIP (Party in Power) got tossed and became POOP. The POOP at the time then became PIP. Because we only have two of these gatherings of useless fools making up our congress, one has to be PIP and the other has to be POOP or vice versa.

Now, wouldn’t you think that the new PIP, formerly POOP, would recognize that the people tossed the old PIP because all they did was spend, spend, spend and war, war, war when the people wanted them to stop the spending and stop with the wars? Of course, any intelligent person would say yes the new PIP would make the changes to stop with the spending and stop with the wars. So what did the new PIP do, you ask?

Spend more and war more. That’s right. Turns out the new PIP leaders were as shameful as the previous group (think Obama, Reid and Pelosi.) They increased spending and increased warring. And now they face the same consequence that POOP faced two and four years ago. The people are fed up because their message is not being received and the wasteful spending and wasteful warring keep on just like the Energizer bunny rabbit keeps running.

As the song says, ‘When will they ever learn?” Well, they won’t. John Adams knew it over 200 years ago. And that is why we at TheFundamentals keep referring back to the fundamentals. The useless fools who are a congress and the useless fools who are a political party are not the answer to our problems. They are the problem. They create the problem and transfer it back and forth between themselves ad infinitum. And, in so doing, they perpetuate their nonsense while perpetuating their employment, their benefits, their pensions and their self importance.

They will seize any opportunity and call it a crisis. Planes attacking buildings – a crisis. Wall Street lenders getting caught up with crappy loans – a crisis. Petty dictators puffing about their intentions – a crisis. Whacked out scientists bemoaning a pending rise in temperatures – a crisis. Lazy over fed citizens procreating undereducated spawn – a crisis. Kids puffing on weeds growing in the forest preserve – a crisis. Aberrant behavior from the neighborhood pervert – a crisis. Low wage countries seeking to build an economic base – a crisis. Two boys thwarted in seeking recognition via matrimony vows – a crisis. Someone can’t get every possible health care procedure they may need or want – a crisis. Foreclosure rising – a crisis. Unemployment up - a crisis. And every crisis warrants more spending and, sometimes, more warring.

Here’s what they don’t call a crisis – Excessive spending and excessive warring. Excessive government employment, wages, benefits and pensions. Excessive contracts going to the military industrial complex.

America is facing two crises’: Excessive government spending and excessive government warring. All the debt incurred and all the lives lost have still not changed the thinking of the useless and shameful congress. So back and forth we go; and the debt rises and the wars go on.

John Adams saw the problem years ago. Unfortunately, he didn’t see the solution. Just think how many elections have come and gone since John Adams was president (1797-1801.) Is there any possible government solution that does not involve spending or warring?