Ken's Comments

A big debate these days is Socialism versus Free Enterprise.  I say neither.  I say we need a new direction - Fair Enterprise. I'd say the failures of socialism are self evident.  You can look at the extremes like the experience of the Union of Soviet Socialist Republics (USSR), the various "republics" of Eastern Europe that were satellites of the USSR, or Venezuela, where socialism was accompanied by brutal totalitarian regimes.  Or you can look at the European socialism of France, Italy, and Greece, where the people would sooner bankrupt the country, paralyze the government, or commit acts of violence than give up the giveaways to which they have become accustomed. With a history like that to point to how can anyone advocate socialism in front of an audience and not leave the stage covered with fresh vegetables thrown at them from the seats?  The answer is that unfortunately big businesses in the US have corrupted free enterprise.  Large companies...

Want to get an understanding of what happened with the housing market and the financial meltdown of 2007 and 2008?  Go see the movie "The Big Short" or read the book of the same name on which the movie was based.  It's a brutal expose' of the games that were played in the financial markets to create the housing boom that led to the housing crash. We're far enough removed from the tragedy that the movie was entertaining and had a number of funny moments. At the same time the events of that time were tragic and it was criminal what people throughout major companies and the agencies - both public and private - created to monitor did. Some thoughts. 1. Why did it happen? The financial markets encourage greed.  The goal is quick money not steady, stable results.  Maximize profits, make money each quarter.  Money is lent based on numbers - what is your credit score.  Money is no longer lent based on evaluation of risk.  D...

A very interesting story from the NY Times about the crisis looming ahead thanks to the Bush / Obama economic recovery plan. http://www.nytimes.com/2009/11/23/business/23rates.html?th&emc=th Essentially, the Bush / Obama economic recovery plan is a lot like taking out an adjustable rate mortgage with really low teaser interest rates. When interest rates go up, the Federal government is going to be slammed. The NY Times - not what I'd call a conservative news outlet - article has a quote estimating that interest payments on the money we've borrowed will be as much as $700 billion per year in the future. That is as much as we spent this year on the economic stimulus bill and we will be paying that each year. Now, just to review, what is Bush / Obama economic recovery plan? It involves spending lots and lots of money that the Government does not have including: Economic stimulus - $400 billion under President Bush if I recall correctly, repeated by President Obama at a higher ...

I've been good at criticizing what is wrong with the economy, let me take a moment and say what I would have done differently to try to prevent us from getting to where we are right now. The answer starts in the approach - I would have attacked the problem from the bottom up, not the top down. There are a number of steps that could have been taken back when all this started to isolate the economic harm and create a gradual downturn instead of what did happen, which resulted in the economy falling off a cliff. This would not have been without pain, but a lot of the pain would have been absorbed by the lender, borrowers, and investors who took agreed to the risk of pain in the hope of financial reward. However, I think the result would have been fewer foreclosures and less people out of work. Ironically, both the Bush Administration and the Obama Administration have talked about trying to reduce foreclosures, but neither has any significant accomplishments. That's because th...

Denials by President Obama to the contrary, I have some real questions about this Administration's micromanagement of the businesses to whom they are lending taxpayer dollars. Some things they are doing make sense and are consistent with the way business normally operates. But there are a number of things this Administration is doing which exceed the boundaries of normal operations and some are both scary and can create further economic calamity. Unfortunately, no one in the "main stream media" (e.g. not labeled conservatives) are challenging the President on this. Let's start by giving credit, where credit is due - President Bush started us down this path with the bailout of AIG, the $700 million for banks under TARP, and the decision to lend money to the auto makers. President Obama is carrying on programs that President Bush started. Second, if the government is going to provide money to companies then the Government, like any lender, has the right to try to p...