EnduringSense

“The price of apathy towards public affairs is to be ruled by evil men.” Plato

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Civil Rights Activist Andrew Young on the Confederate Flag

Posted by Steve Markowitz on July 1, 2015

After last week’s tragedy in Charleston, South Carolina, significant focus has been on Confederate Flag often visible in the South.  Many have expressed the strong opinion that the flag should be removed from both public and private venues.  While this Blog believes the Confederate Flag can be divisive, attacking inanimate objects and denigrating freedom of speech is a slippery slope that has potential negative consequences that far outstripped potential benefits.

Former Atlanta Mayor Andrew Young has impeccable Civil Rights credentials including marching with Dr. Martin Luther King.  He points out in the video below that; “The problems we face don’t have anything to do with the flag.  The fact is that 93 percent of the black people killed are killed by other black people.  So if black lives matter, let us start believing that we matter.”  Look for Mr. Young to be attacked by Progressives for not towing the Leftists line.

Today’s society often deflects from addressing complex problems.  When faced with significant challenges, society may seek simple solutions that include attacking symbols, rather than addressing underlying causes for the problems.  A high profile murder likely leads to the opportunity to promote gun-control.  The death of an African-American at the hands of the police will lead to an indictment of the entire police force.  A racist attack, such as occurred in Charleston, focuses on the Confederate Flag.  Similar to any of these simplistic solutions, banning the Confederate Flag will not eliminate racism.

Ambassador Andrew Young is to be commended for his desire to seek real solutions to social problems that affect various parts of our society.  President Obama would do well to bring in clear-thinking people like Young to his cabinet instead of the divisive radicals he has often brought into his Administration.

Posted in Racism | Tagged: , , , , , , , , | Leave a Comment »

Greek Banks Close for a Week as Crisis Grows

Posted by Steve Markowitz on June 29, 2015

The Wall Street Journal reported that Greece has ordered that its banks remain closed for the next week to the stem panicked cash withdrawals by depositors.  This drastic move indicates that the five year long Greek debt crisis is coming to an end game.

After the financial meltdown occurred in 2008, the economic folly of Europe’s single currency, the Euro, became apparent.  The European Union was created in an effort by Europeans to create a political climate that would lessen the likelihood of future wars on their continent.  This desire was a reaction to the carnage that inflicted on Europe during two world wars in the 20th century.  While the political idea was noble, little thought was given to the economic consequences that a central currency would lead to.  Those consequences are now playing out.

The Euro was destined to create an economic calamity because the political union was not accompanied by a truly economic union.  European countries maintain their own banking systems and Euro central bank was weak.

After the European Union and the Euro were created, the more efficient and stronger economies of North Europe, specifically Germany, obtained the lion share of benefit created by the Union. With nearly all European countries having a single currency, less efficient countries had their cost of labor increased in relation to more efficient ones.  As a result, the poorer countries had a artificially strong currency that enabled them to consume increased amounts of the more efficient countries’, i.e. Germany.  Through the Euro, Greece had to access to relatively cheap borrowing via an overall European credit rating that did not reflect the realities of individual countries.  As a result, Greece and other Southern European countries borrowed more funds than they could afford to pay back and use these funds to purchase imports from Germany and other exporting countries.

When the recession hit, Greece and other countries were unable to make payment on their debt.  This led to a battle between the creditor countries such as Germany and debtors like Greece.

For five years the Greece debt crisis has been a can kicked down the road.  Creditors including, Germany, have been unwilling to forgive Greece’s debt, even though Greece is not a position to repay it.  Had Greece continued to have its own currency, it would have devalued versus the German currency making its exports cheaper and more likely that it would have been able pay back its debt obligations.  The single currency has curtailed this natural rebalancing mechanism of sovereign debt.

Greece has been operating under an austerity program for some years in an effort to pay down its debt obligations.  That effort was doomed to fail since austerity does not address Greece’s uncompetitive position.  Its current efforts to stop the panicked withdrawals At the Greek banks will also fail since this radical step will only create more panic in Greece and other southern European countries.

It is difficult to determine how the next few days will play out with the Greek crisis.  There are basically two long-term solutions 1) Greece drops out of the European Union and reverts back to its own currency, while at the same time defaulting on its debt, or 2) Greece’s creditors, mainly Germany, writes off the loans.  Either scenario has very painful economic consequences.  Either would require a realignment of the Euro and the European Union to correct the economic deficiencies of this unnatural union.

Greece is a relatively small economy.  Had it not been for the Euro, its default would have had only minor consequences for the world economy.  However, similar to international banks that were allowed to become too big to fail, the European Union’s single currency has made the consequences of even smaller economies European countries defaulting too big to fail.

Given the hard choices for Europe, look for the politicians and bankers to do whatever is possible to kick the can down the road.  This means that it is likely they will give Greece more loans to continue the illusion that the country is not defaulting on its loan obligations.  However, that bit of alchemy would only push the crisis off for a short period of time.

Posted in Debt, Greece | Tagged: , , , , , | Leave a Comment »

UN’s Anti-Semitic/Anti-Democratic History

Posted by Steve Markowitz on June 25, 2015

The United Nations was founded in late 1945 to promote cooperation between countries worldwide order to inhibit future conflicts and wars.  Like the League of Nations before it, the UN has been ineffective.  With 193 member nations, the UN has become little more than a propaganda mouthpiece for special interests countries and a place for diplomats to get rich.

In 2006 the United Nations formed its Human Rights Council, supposedly to call out human rights violations worldwide.  Its track record is telling.  During its 10 year history, it has called Israel 61 times on human rights violations, while only calling all other countries in total for only 55 violations.

While Israel has likely committed human rights violations in its conflict with the Palestinians, the outrageous special treatment it has received from the United Nations strips the organization of any semblance of neutrality and real concern for human rights.  The UN’s track record in this area shows that worldwide anti-Semitism is alive and well.

Israel

Posted in Anti-Semitism, United Nations | Tagged: , , , , | 1 Comment »

Charleston SC Shows Courage and Grace in the Face of Adversity

Posted by Steve Markowitz on June 22, 2015

van jonesIt is difficult to contemplate even the smallest sign of something positive coming from last week’s tragedy in Charleston, South Carolina when a despicable human being, a racist, entered a church and killed nine innocents of African-American descent because of the color of their skin.  Yet there are some green shoots rising from the carnage, as expressed by Anthony Van Jones who said when interviewed by CNN’s Jake Tapper:

“The white community here is as heartbroken as the black community is here.  If they can come together here, if they can reach out to each other here, they can show justice and love and support here, then why can’t we do that in Washington, D.C., and across the country where, frankly, the reasons for the divisions are harder to understand.  Here you can understand division.  There’s none.  There’s none.  So something is happening here in Charleston, and I’m proud that we’re showing it.

You have an ideology of hatred and an ideology of love.  An ideology of blame that is about racial hatred — we have to say that.  But we also have ideology right here behind us of racial reconciliation.  You can’t appreciate the beauty of what you have behind you right now until you really name the hatred and the evil that happened just right behind us a few days ago.  It’s the ability to talk about both that gives us the ability to find meaning and to move forward truly together.

Those leaders in the country, both parties of all races who don’t want to deal with both — the fact of the racial hatred, but also the potential for racial reconciliation — I think are letting the country down.  But people on the street — white people on the street here — are showing more courage and more leadership and more honesty than I’ve seen in the halls of Washington, D.C., and they need to be given respect for that and hopefully we can take this spirit forward.”

While this Blog rarely agrees with Van Jones who veers strongly to the Left, his eloquent words concerning the aftermath of the Charleston tragedy are eloquent and from his heart.  The Country’s leadership in Washington could say it no better.

Today, South Carolina Gov. Nikki Haley called for the removal of the Confederate battle flag from that state’s Capitol grounds.  This is an appropriate gesture for the victims of the racist attack in that state.  Gov. Haley is to be congratulated for taking this direct response which certainly will be appreciated by the African-American community and others in the state.

Why is it that the good people of Charleston of all colors have responded so gracefully to an unfathomable tragedy?  Why is their reaction so different from Ferguson, MO and Baltimore, MD to their challenges?  These questions are significant, but must be sidelined until the victims can be appropriately mourned.

Posted in Racism | Tagged: , , , , | Leave a Comment »

House Nixes Obama’s Trade Bill

Posted by Steve Markowitz on June 14, 2015

The Wall Street Journal reported on the stunning defeat for President Obama with the US House of Representatives rejecting his request for fast tracking a trade deal.  This deal had the strong backing of the President, as well the Republican leadership in the House.  Obama expended significant capital on getting a positive vote, including a visit to the House Democratic Caucus the morning of the vote, but to no avail.  The final tally for a procedural vote required for passage of the bill showed only 126 in favor and 302 voting against it, including many Democrats.  Even his old buddy Nancy Pelosi voted against the bill.

The fact that President Obama and House Speaker John Boehner on trade bill might seem odd at first glance.  However, there are significant special-interest groups in favor of the bill, including large business interests.  These special interests have done quite well over the years, irrespective of whether the Democrats or Republicans control the White House.  This is further evidence that Beltway special-interests have no political affiliation.

Free trade in its most basic form is a good for economies, including America’s.  However, the positive effects only occur if all parties to the agreement play by the same rules.  That is not the case with the free trade recent decades.  The current bill backed by Obama and Boehner involves Asian countries including developing one’s such as Vietnam.  While most often disparities between countries focus on currency manipulations and wages, there are more significant impediments to real free trade, including differing regulatory environments.

The United States and many Western countries have added thousands of regulations on businesses and other parts of their societies that significantly increase their relative costs of exports.  Examples of the regulations include those related to climate change, worker safety, health issues, etc.  While in a vacuum it can be argued that these individual regulations are well intended, their affect is to significantly increase production costs in the developed world, including the United States.

Absent an equalization of the regulatory environment, free trade cannot exist without substantially penalizing those that are forced to operate in the overregulated environments.  The large business Interest that currently back the proposed free trade agreement in Asia understand this and use it to their advantage.  Large corporations are typically multinational in structure and can move their production to the least expensive regulatory environments.  Smaller and medium businesses typically do not have the resources required to make this type of move.  As a result, free trade agreements offer advantage to larger corporations and increase their competitiveness compared to smaller firms.  This lessens the chance of competition from startups.  As a result, jobs will move to the lowest cost labor environments, a reality that has been proven in the past 20 years.

So, why are Obama and Boehner so staunchly in favor of a free trade agreement with Asia?  As is often said, follow the money, and in this case the lobbyists.

Posted in Free Trade | Tagged: , , , , , | Leave a Comment »

Obama’s View of World Opinion Shows Extreme Narcissism

Posted by Steve Markowitz on June 9, 2015

President Obama has shown a detachment from reality when it comes to the public’s view of his policies and Presidency.  After receiving a stinging rebuke in the last mid-term elections, the President doubled down on his radical leftist policies.  For example, irrespective of the public’s dislike of Obamacare, the President claims it to be a success, showing disdain for those who elected him.  But last week Obama took this tone-deafness to the next level, reaching narcissism when he claimed that the United States is more respected today throughout the world than it was before he was elected.  Specifically, the President said:

“People don’t remember, but when I came into office, the United States in world opinion ranked below China and just barely above Russia, and today once again, the United States is the most respected country on earth, and part of that I think is because of the work we did to reengage the world and say that we want to work with you as partners with mutual interests and mutual respect.

It was on that basis we were able to end two wars while still focusing on the very real threat of terrorism and to try to work with our partners in Iraq and Afghanistan.  It’s the reason why we are moving in the direction of normalize relations with Cuba.  The nuclear deal that we are trying to negotiate with Iran.”

Wow!  Once again the President claims that the electorate is stupid, or at least lacking in memory skills from before he was anointed.   In addition, his claim of ending two wars seems delusional.  The war in Iraq is once again ratcheting up and the US’s involvement is growing.  As for Afghanistan, the Taliban do not seem to have agreed to that war’s conclusion.  It is slipping back into violent chaos as the United States draws down.

The Obama’s claim that America is viewed more positively worldwide since he took office is too incredible to be that of a misinformed President.  It is a statement from a man who has allowed his own narcissism to block out reality.

Posted in President Obama | Tagged: , , , | Leave a Comment »

US GDP Figures Go Negative

Posted by Steve Markowitz on May 29, 2015

The New York Times reported that the US Commerce Department has revised downward the country’s first quarter Gross Domestic Product (GDP) from a paltry plus 0.2% to a minus 0.7%.  Downward revisions have become too common in recent years and bring into question the science behind the government’s numbers.

In an attempt to soften the bad news the government and some economists blame the winter weather and other one-time factors for the decline.  However, given history and the trajectory of the GDP figures in recent quarters these explanations are not credible.

Some of the causes of the economic slowdown are obvious.  The significantly increased value of the US dollar hurts exports by American companies.  In addition, the energy market has become an important part of the US economy with the increased oil and gas production.  Depressed prices have curtailed exploration and other activities in this market.

Digging deeper into the figures indicate more systemic reasons behind the slowdown.  For example the Times reported that while personal consumption, a key ingredient in the US economy, increased by nearly 4.5 half percent in late 2014, it has since dropped down to less than 2%.  GDP growth was near 5% in mid-2014, but has gone negative in last quarter.

Economists generally agree that GDP must grow by a minimum of 3% annually to have a reasonably healthy economy.  The latest figures make this unlikely for 2015, the second consecutive year with less than 3% growth.  History and current trends indicate that a recession is a strong possibility.

The latest GDP figures bring into question another governmental statistic, the unemployment rate, which is reported to be currently less than 5.5%.  This figure is bogus as the government does not count those that are unemployed, but have stopped looking for employment.  Preposterous!

The government’s reaction to the 2008 financial meltdown started during the Bush Administration with bailouts and the TARP Program.  Obama’s economic programs have since included more bailouts and record deficits in order to implement stimulus spending programs.  During both administrations the Federal Reserve fostered historically low interest rates.  Given the anemic recovery of the past seven years and the current economic data it is clear that these policies have failed.  It is now reasonable to question whether the policies themselves have hindered economic growth.

One accepted definition of insanity is repeating actions, but expecting different results.  That is precisely what the US government and Federal Reserve are doing for economic policy.  The Obama Administration suggests still more governmental spending and the Federal Reserve continues to promote low interest rates.  Both must now accept responsibility for the ongoing economic malaise.

Posted in economy | Tagged: , , , | Leave a Comment »

US Congressman Alcee Hastings Asked for a Raise

Posted by Steve Markowitz on May 22, 2015

Currently, United States Congressmen receive a salary of $174,000 per year.  In addition, their offices receive an expense budget of $1 million annually.  However, that’s not enough for at least one congressman, Alcee Hastings, Democrat from Illinois who earlier this week said:

“We are entering our seventh year without a pay raise.  Now I think we’ve proven to the American people that we are responsible.  And I know that it has impacted me personally.

Hastings takes delusional Washington behavior to the next level.  Forgetting for a moment that Congressmen, supposed servants of the people make nearly three times that of average Americans, does Hastings actually believe that the politicians have “proven to the American people that we are responsible”?

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North Korean Nukes Demonstrate Fallacy of Obama’s Iran Strategy

Posted by Steve Markowitz on May 21, 2015

The advancement of North Korea’s nuclear capabilities demonstrates the likely outcome of negotiations with any rogue nation determined to obtain nuclear weapons.

In December 1985 North Korea signed the Non-Proliferation of Nuclear Weapons Treaty (NPT).  That treaty required signatories to submit to International Atomic Energy Agency (IAEA) by 1992 reports on their nuclear activity.  The IAEA found North Korea out of compliance, which resulted in it withdrawal from NPT the following year.

Korean NukeIn 1993 North Korea proposed direct negotiations with the United States on the nuclear issue, which the Clinton Administration accepted.  Negotiations led to the US accepting some North Korean demands with North Korea accepting limited IAEA inspections.  In 1994 North Korea and the United States signed the Agreed Framework between the United States of America and the Democratic People’s RepublicThis agreement supposedly eliminated weapons grade fuel from North Korea’s power plant, replacing it with the harder to weaponize light water reactors.  This agreement remained in place for a few years during which North Korea did some sable rattling, which was quieted down by the United States offering financial and agricultural assistance.

By 2003 the Agreed Framework between the United States of America and the Democratic People’s Republic broke down.  In 2006 North Korea tested its first nuclear bomb followed by other tests.

This week CNN reported that North Korea claimed significant advances in its nuclear weapons including the creation of miniaturized warheads, improved missile accuracy and firing a rocket capable of carrying nuclear warheads from a submarine.  These are ominous developments, especially the capability of producing smaller weapons that can be more easily sold to terrorists or other rogue nations.

The history of the negotiations and North Korea then becoming a nuclear nation after breaching the agreements made should surprise no one except the elitists in the State Department.  A country determined to obtain nuclear weapons cannot be stopped through negotiations.  The power and prestige these rouge nations gain by entering the nuclear club is perhaps the most valuable asset they can seek. Given this reality, negotiations are a charade.  Those who believe that the current negotiations with Iran can lead to any more successful results have a juvenile understanding of history and the drive for sovereign power.

Posted in Nuclear Weapons | Tagged: , , , , , | 1 Comment »

Government Again Pushing Mortgages to Those Who Cannot Afford Them

Posted by Steve Markowitz on May 18, 2015

In 2008 the world economies encountered the worst financial crisis since the Great Depression.  In a supposedly effort to repair the economies, governments transformed them through huge stimulus spending, low interest rate policies and bailouts.  These interventions have contributed to the ongoing weakness in economic recovery since.

The main cause of the 2008 meltdown was the subprime mortgage lending practices that led to loans being hustled to millions who could not afford to pay them back.  When the housing market slowed leading to depreciated housing values, homeowners could no longer refinance, further eroding housing demand that led to many homeowners owing more on the homes than they were worth.  Many walked away from the loans leading to the meltdown, putting at risk nearly most of the world’s largest financial institutions.

Given 2008 is only eight years ago, logic would dictate that we learned a lesson about imprudent financial behavior, at least for a generation.  However, once governments intervene, logic and economic reality take a backseat.  In fact, we are currently traveling down the same road, again fermented by governmental policies.

News.investors.com reported that the US government is again cajoling financial institutions to give mortgages to those that cannot afford them.  Specifically, the Consumer Financial Protection Bureau warned (threatened) lenders that they would be investigated for discriminatory practices if they do not count government assistance payments to lower income individuals as real income.  In announcing this policy, Bureau Director Richard Cordray used the following incredible logic:

The bureau has become aware of one or more institutions excluding or refusing to consider income derived from the Section 8 HCV Homeownership Program during mortgage loan application and underwriting processes.”  …. “Consumers should not be put at a disadvantage just because they receive public assistance.”

So, using the government’s logic, individuals who need governmental payment assistance are worthy of obtaining mortgages.

Once again politicians and bureaucrats are manipulating economic practices and reality in order to further social goals.  Prudent financial practices not only protect financial institutions, but also borrowers.  Instead, the government is placing people in mortgages they are unlikely to be able to repay.  In addition, this policy leads to bad investments decisions for some consumers when housing prices depreciated in the future.  If this occurs on a large enough scale, it will create another housing bubble and melt down mirroring that which occurred in 2008.

There is a flaw in the premise used by the Consumer Financial Protection Bureau.  Inherent in this policy is the view that lending institutions discriminate on people based on noneconomic factors, which is economic lunacy.  Those in the mortgage industry make money offering mortgages.  The more they write the higher the profits, assuming that the mortgages are prudent.  Forcing lenders to make imprudent mortgages will improve the short-term profitability of the mortgage industry, but ultimately hurt those that invest in buying these assets on the secondary market; i.e. pension funds, etc.   That is precisely what in the meltdown of 2008.

Posted in Debt, Mortgages | Tagged: , , , | 1 Comment »

 
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