This post is not meant as a call to arms or to justify a positions. It is merely a cry of frustration at a nation which is no longer unique in as many respects as its citizens feel it is (and some of its uniqueness is now undesirable). While some of the nuances below could be shifted to other words, and while some of the actions could be explained as "correct, under the circumstances", the constant shifting, hiding and camouflaging of the goalposts (or just pretending they no longer exist) makes our job of investing for fun, profit or simply survival subject to an increasingly risky environment.This is a group which monitors macroeconomic risks and trends. The following is not meant to be political in any way (though most of the actions are a function of political decisions). I am not justifying, nor arguing against these issues, just pointing out that, taken as a group there is grave danger in their inconsistency. We strive to live peacefully in a nation of laws and programs which we have been told are there to protect and care for us. Instead, we have a government which many don't trust, programs which are designed to benefit others or simply fit a budget at the expense of quality (or even value). While the following list is far from complete, they are a handful that come to mind:1) US government nixes bondholders in Chrysler Auto bankruptcy in 2009 and forces them to take haircut rather than allow Chrysler to go down the tubes.2) AIG eviscerated to transfer CDS funds in full to banks too big to fail (rather than a work out)3) We admit to having banks that are too big to fail and allow them periodically to rape/pillage/burn our economy, punishing them with a slap on the wrist. Banks are run by people, yet no person seems to have been brought up on charges for any matter having to do with the entire 2008/9 mess. 4) Medicare Part D prescription drug law allowed only as long as government can't negotiate drug prices.5) The US tax code has expanded to be larger than the Encyclopedia Britannica - most of which is assorted special provisions to help some special interest group or other. It is so complex that few, if any accountants have ever read it in full. The "oral" law of the IRS - it's interpretations - further complicates this warped web. This does not need revising - it should be completely discarded and the whole thing re-written to provide the tax laws needed (which should be able to fit in a spiral notebook).6) Our excuse of a national medical program is clearly written to benefit the insurance companies and it is currently cast in stone that our health care will be mediocre at best. This is an embarrassment for a country which thinks of itself as civilized.7) One of the main asset groups - one which has been depended on for generations - the "triple tax free" municipal bond has suddenly become vulnerable to the government arbitrarily moving the goalposts. This pits the federal government's tax interests against the ability of states, municipalities and the like getting funding at a reasonable price.8) Our Congress accuses the Fed of malfeasance when they provide currency swap facilities to other central banks to help smooth out global exchange rates. 9) When I went to school, it was explained to me that "the difference between our system and those of the Nazis and Commies" was that in their countries the secret police could come to your door in the middle of the night and arrest you without explanation and then hold you for trial for an extended length of time. Here, we have laws that prevent that from happening (or at least we did back then).10) Our politician are currently involved in adopting a series of arguing postures which would embarrass five year olds in a schoolyard. In a country which has previously been associated with dangling chads, supporting Ahmed Chalabi, redefining "working class" as "middle class", a higher education system which is too expensive for all but the very poor and where the poor are given cell phones, can afford plasma TV's, free health care and cars, we now hold the world's economic health hostage as our politicians play "chicken" with the Fiscal Cliff that they engineered in order to have an incentive to actually do something about our economic plight. I have doubted whether my fellow countrymen we awake during high school economics (or even history, for that matter). I have doubted our ability to act rationally. I have doubted our sanity. We remain smug, egotistic and chauvinistic - all as we become the laughing stock of the rest of the world. They treat us carefully and "respect" us in the fashion that any of us would respect a somewhat demented 350 pound schoolyard bully.We sit back surprised that other nations try to break their bonds with the US dollar and look for better arrangements.We still have time to clean up our act. We have vast resources and, regardless of the huge amount squandered trying to make friends in Iraq, Afghanistan and Pakistan, it will take a considerable time to burn through it (no matter how dumb we act). That said, we have made a pretty deep dent and we continue to pound away and continue to chip away relentlessly.I cannot conceive of how our nation can take a step back, reevaluate and repair the damage. Laws seem to be able to be ignored on an arbitrary basis (various examples above), under the guise of fighting a deficit - yet not paying taxes commensurate with decent service - we end up with programs which would be unacceptable in any other nation (we're just too insular to recognize that fact). Our elected representatives, in full view of any who bother to pay attention (apparently nearly none outside of government circles - or the lobbies who fund them) pass laws which, if actually read, clearly would upset most of their constituents.We are now forced to invest in a landscape (at least in the United States) that is full of unexpected opportunities to have rugs pulled out from under us.Sorry - once on the soapbox, it's rough to stop yelling :-)Jeff
1) US government nixes bondholders in Chrysler Auto bankruptcy in 2009 and forces them to take haircut rather than allow Chrysler to go down the tubes.If Chrysler had gone down the tubes in 2009, the bondholders would have likely been left with much less.Nobody was buying anything in 2009, and Chrysler's assets would have gone for a small fraction of their actual worth.
Jeff, somewhere on the Fool, in early 2004, I articulated the "General Rants". Even farther back, there is a post where Harmy took me to task for referring to the US as a "banana republic".I have yet to see anything that challenges those assessments. On the contrary, the last 8 years' events have only confirmed my ravings. Steve
Jeff,No doubt the current govt is totally and fiscally dysfunctional. I've done what I could by voting and sending nastygrams to my elected officials. MDH serves on our community's finance committee, which is equally screwed up. I've changed my investing asset allocation to hold a fair percentage of dividend paying funds/ETFs and hold whatever bonds I purchase until maturity.I remind myself that I have enough to retire on, which is good because I'm retired.Beyond that, I enjoy my family and working with my neighbors in our smallish subdivision (27 homes). I garden, make jewelry (latest piece is a "reconfiguration" of my great uncle's watch fob w/ some wire wrapped jade links) and revel in midwinter and other holidays.We had our first "snow", of maybe a half an inch w/ lots of wind. But I walked down to a neighborhood get together this evening and learned what they were doing, in part. One of the women will drop by in the morning and relieve us of some of the poinsettias #2 son produced in his plant propagation class.Take pleasure in the little things and don't sweat the stuff you can't change.Enjoy the holidays!PM <big fan of winter solstice>
Laws seem to be able to be ignored on an arbitrary basis Nice rant Jeff.You USians are not alone though in many respects. Big money interests rule over here too. Even the German Bundestag has to date refused to adopt anti-corruption rules for its MPs (you wonder why).Europe is bailing out countries and banks in violation of the Maastricht agreement. The initial excuse was 'these banks are too big to fail'. Now we are bailing out regional Spanish Cajas because... beats me... Oh hold on, Flyerboys said else some corrupt Spanish establishment would be toast. Now we are going to rescue the corrupt Cypriotic banking system and its creditors... widely known to be black money especially from Russians. All supposedly in the interest of European citizens and taxpayers.But perhaps its all our fault, too. While special interests corrupt our pols, all we do is writing flaming/ sarcastic/ resigned posts on Internet message boards. Who was it that said democracy had to fought for?SB
other than Steve......y'all are surprised? we get out of this by the skin of our teeth. And we look back a few years from now with no idea what as humans we were supposed to learn. btw Jeff, great rant, but when did you become a liberal? seriously the problems you are describing come from an over extension in time of supply side policies. I guess Mayor Bloomberg is rubbing off on you.To country and duty. We need the rich to get richer and take the country on the ride this time......demand side econ..........but lets not forget the mess we have made if we all get a tad richer.....we have a large clean up to do......Jeff you left out the environment.......that is the ultimate can of worms......RED and the pollution credits scheme are a very bad idea......poor countries lose out big time. They sell the right to pollute <so that the pollutions levels dont fall> to the richer countries and then buy goods with that cost baked in from the richer countries......Even China is probably signing up for this deal after all......Dave....joining PM in thanks for the winter solstice.....a huge burden in my life is lifting as I sit here......at four am.....
But perhaps its all our fault, too. While special interests corrupt our pols, all we do is writing flaming/ sarcastic/ resigned posts on Internet message boards. Who was it that said democracy had to fought for?SBAre we talking bar fight or heavy weapons here? }};-()**** not signed ****
Sorry - once on the soapbox, it's rough to stop yelling :-)No reason to be sorry. I'm sorry Americans as a whole aren't outraged.http://blogs.marketwatch.com/election/2012/12/20/the-trivial...Nice chart.There really isn’t much difference between President Barack Obama’s and House Speaker John Boehner’s respective plans to cut the deficit, when put into perspective. And remember, this chart doesn’t even factor in existing debt of over $16 trillion — only on the new debt that’s expected to accumulate.The election in 2012 was MERELY DECIDING THE PACE AT WHICH THE US REACHES BANKRUPTCY.My apology for interjecting politics. But unless Americans take back the government from the lobbyists & special interests; the Macro Economic Trend of the US is downward. I don't see how we can ignore the political influence on the economy.
This post deserves like 100 recs. If Americans can stop watching Real Housewives long enough to see whats REALLY going on maybe we could get something done. Its frustrates me the amount of foolishness I have to endure on a regular basis. Studies say we as humans use about 10% of our brain. At this point I think we as a country have reduced our brain usage down to 5%. Something is going to give...soon...and it won't be pretty. It will be the biggest wake up call we've ever had and I hope I'm able to insulate myself. It would suck to have to suffer at the hands of corrupt politicians and a clueless public.
"But perhaps its all our fault, too. While special interests corrupt our pols, all we do is writing flaming/ sarcastic/ resigned posts on Internet message boards. Who was it that said democracy had to fought for?"When you are being outvoted by a bunch of clueless drones and every normal method of fighting back is being hindered by corporations, the government, and the media, where else can you voice your opinion other than internet message boards? At the rate our country is going I'm HAPPY we are STILL ABLE to voice our opinion on message boards. This is probably the only place left where our freedom of speech is truly free. Social networks aren't even safe anymore.
This post deserves like 100 recs. If Americans can stop watching Real Housewives long enough to see whats REALLY going on maybe we could get something done.Deserves 100 recs too.Mindless Entertainment is the opiate that will be our downfall.People used to read and write instead of marinate their brains in front of a tv/video display, engage in sports rather than spending fortunes supporting pro sports. Mindless marshmallows cannot be saved by guns.
Jeff, great rant, but when did you become a liberal?Jeff and I are old enough to remember when the US' ideals were equal rights, equal opportunity and the rule of law, a general idea that, if you were an American, you could get a fair deal. We were not really there yet, but we made progress wrt racism in the late 60s, and made progress wrt gender equality in the 70s.Since then the US has started to revert, to the point where the country is starting to look like a plantation. Money, law, power and government authority is increasingly aligned with the interests of the massah, while the vast majority find themselves increasingly powerless. Their pay and benefits cut at the massah's whim. Their property siezed by the government for the massah's profit.Meanwhile, the media is used to play the mob, turning people against their neighbors with hate speech Goebels would instantly recongnize, so the mob is so preoccupied with what that person down the street is doing, that they don't see what is really going on.Steve
While I would probably have chosen a different analog, Steve's assessment is pretty much accurate. What I wrote is not an indication of being either liberal or conservative, but rather an observation (for which I guess age is a prerequisite) that things have changed over the past couple of generations to an extent that our social and belief structure structure are completely different.Not all of those changes have been bad. As Steve has pointed out, progress towards erasing racism, gender discrimination, religious bias and so forth has in many cases reduced those social (or more correctly anti-social) actions to mere background noise. On the other hand, while our vocabulary hasn't changed, the meaning of our words has. It's like talking about learning how to write, but meaning on a computer, or about how well we add, but meaning using a calculator. We have phones that "ring", yet emit electronic tones (needless to say, we regularly "dial" phone numbers without a dial). When we discuss current events and the effects of our nation's actions, the vocabulary we use is a comfortable one, one that has been used for generations, but the meaning that we attribute to those words has the same import as "doublespeak" in George Orwell's 1984. On one level, we "know" what we are talking about, yet on another we know that there is something wrong. We can't put our finger on it because all the words have new meanings. While it is easy for an Inuit to absorb a change in snow because of the depth of their vocabulary on that phenomenon, our usage of words only allows us to assign one set of viewpoints at a time. Not wanting to make a big deal about it (it's been beaten to death in the past), the current usage of "middle class", a generation ago would have been "those striving to achieve middle class" and a generation earlier would have been "working class". While the economic tranche involved has not changed their relative position or their proportion of the population, the shift in semantics has allowed a confusion of historical and current meanings which arguably contributed to the fragile economic position this group was in when they were mauled in the 2008/9 economic debacle. Being saddened by the gullibility and naivety of the vast majority of our population (exacerbated by a combination of dubious education and a lifetime of propaganda) is not a function of being either liberal or conservative.In fact, come to think of it, I doubt if the terms have nearly the same meaning as they did a decade or two ago. We are defined in our mind by sundry things. Our name is of great importance, our keys on our key chain speak volumes. To many, their hair (its color, thickness, length, coif, etc.) have great importance. Our shoes (or lack of them) - yes all sorts of knick knacks which define us are deemed to be important. So too are the titles which we give ourselves (yes, liberal and conservative could be included in this group). That said, it is important for us to differentiate between what we self-appraise our selves as and what others use as the definitions of those words. It is all too easy to admit to being something that you are not because of a flux of definitions.Jeff(Feels that he's a middle of the roader and a political independent, but I guess that depends which road we're on. As the great Yogi Berra was supposed to have said: "when you reach the fork in the road, take it)
On the other hand, while our vocabulary hasn't changed, the meaning of our words has.I think it's deeper than that. Language evolves over time, always has. I see a deeper change in the American mind. We who are pushing, or pulling, 60, grew up with role models like Superman "truth, justice and the American way"http://www.youtube.com/watch?v=Q2l4bz1FT8UWe had westerns, where justice was sure and evil was met with swift retribution. But now westerns are rare, and regarded as quaint throwbacks, and the biggest criminals walk free.http://www.youtube.com/watch?v=o3343LUHNb4http://www.youtube.com/watch?v=wdAXjMj6mfUI once took an oath to defend the Constitution. Today, seems like I am the only one that took it seriously.I hear people saying things today, on any topic, as bigoted and hate filled as you would have heard from a Klansman 50 years ago. But today, it's regarded as mainstream thought, rather than the ravings of a racist fringe.I don't recongnize America today.Steve
At a point like this--it is good to take a news and computer fast for at least 2 weeks (14 days). Upon your return you will Awake, Refreshed Feeling Fine and in Perfect Health.An added bonus is you will notice nothing happened of note that you didn't see in the course of daily walking about doing other things.This is a feature , not a bug.Happy Holidays!
Mindless Entertainment is the opiate that will be our downfall. People used to read and write instead of marinate their brains in front of a tv/video display, engage in sports rather than spending fortunes supporting pro sports. Mindless marshmallows cannot be saved by guns.TV - the magic box that changes people into vegetables.
I don't recognize America today. I do I think. Germany, in the 20's and early 30's. Different of course, history rhymes, but does not repeat... but in the ways you are mentioning. I expect changes in the way the USA governs itself. Not changes for the better... I don't recognize it as a real democracy anymore. It was something like a democracy when I was younger, but the warning from Eisenhower fell on deaf ears, and the end game belonged to the banks. Given time it might heal itself... but I regard both chances as unlikely. The confluence of climate change and fiscal decline mean that there will be little time, and the control exerted by television programming and news distortions already in place means that healing is not likely even with sufficient time. What will happen? I cannot be sure but I am sure it cannot be good.respectfully BJ
Of course I agree with nearly everything in your post. Just a note on AGI. The government is now out of it. Note only did they get back their $180 billion to prevent it from going under, but have made quite a profit in addition - $22.7 billion. It is amazing that we hear so little of this. I for one never thought we would get our money back, but it turned out to be a huge success.http://stopcontinentaldrift.blogspot.com/2012/09/the-aig-bai...http://www.econbrowser.com/archives/2012/12/us_government_p....
SteveActually we may be a disaster but not yet a Banana Republic. Banana Republics are typified by very high inflation rates (1,000% or so), not low ones.brucedoe
"I don't recognize America today"Sounds like we have become our fathers...Doesn't that sound like what they were telling US back in the '60s?And, they were right and you are right - America wasn't the same as it was in their youth, and it is not the same today as it was in ours.Just as we didn't aspire to their America, today's generation does not aspire to ours.'twas ever thus...Regards,Les
Doesn't that sound like what they were telling US back in the '60s?Not really. I see where you are coming from, that people that are getting around 60 realise that things aren't like they used to be. The difference is, our parent's memories were of the depression and war. None of the preceeding generation of my family wanted to go back to that.Yes, the race riots of the 60s were upsetting. My Dad saw Army armored cars and trucks heading into Detroit, during the riot, from his office window. Yes, it was upsetting to see our guys being killed in Nam on the evening news. Yes, they complained about rock music and the loose morals of my generation...like parents of every generation said since the beginning of time.What the survivors of the preceeding generation of my family really comment on, are not the changes seen in the 60s, but the changes seen now. Both of my 80+ year old Aunts, college educated, were pretty content through the 60s and 70s. What upset them the most have been the changes over the last 10 years or so. Both of them, raised in conservative small town west Michigan, asked "when did I turn into a liberal?" They both hold the opinions they have had for decades, and are shocked by the enviornment around them. My Aunt in Ohio has said she has to watch what she says, because the people around her are so much more extreme in their attitudes, then they were when she moved into that town 30 years ago.It's not just typical generational friction. There is something different going on.Steve
Sounds like we have become our fathers...Doesn't that sound like what they were telling US back in the '60s?And, they were right and you are right - America wasn't the same as it was in their youth, and it is not the same today as it was in ours.Just as we didn't aspire to their America, today's generation does not aspire to ours.Just one problem. Their America wasn't out of money. Ours is.
I just read the entire thread ... pretty closely. And I'm a little surprised that everyone is only discussing symptoms and not one person (that I could see) even mentioned the root cause, not even tangentially.What we are witnessing has only a little to do with politics, and only a little to do with rich versus poor, and only a little to do with tax policy (certainly not petty things like whether or not muni bond interest has income tax or not). What we are witnessing has its roots in a country comprising 5% of the people consuming (and producing) 40%* of the "stuff" in the 50s, then 30% (consuming and producing) in the 60s, then down to 25% in the 70s, and now heading even lower. And we've tried to keep up on the "consuming" side, and have fallen back on the "producing" side, hence we have what we call "debt" (aka the difference between "consuming" and "producing").And to add zero comfort, and even a little distress, it's going to continue and perhaps even get worse. It's a kind of reversion to the mean. As the rest of the world advances (except for a bunch of countries here and there) and gets closer and closer to us in the USA, the share of world product of the USA by necessity will decrease. In theory, if all eventually becomes equal**, the 5% in the USA should comprise 5% of the worlds product. That would mean that we have about another 75% to fall relative to the rest of the world.* Partially due to great industriousness on the part of the people of the USA, and partially due to a world war on other continents that destroyed the vast majority of their industrial capability.** and who doesn't want that? We as a country espouse equality in all our dealings and aspirations!
Just one problem. Their America wasn't out of money. Ours is. there is the proper mortgage on the house. What Steve in part was alluding to is the ignorance of the American public to see decent people as Liberuls......instead of decent folks. The birthers have their heads up their arses. And are trying to drown this country in some very backward crap. Dave