Sunday, March 27, 2011

that damn Obama !

Whenever you hear a sentence that starts out with “that damn _________”, you can be fairly certain that you are about to get an earful of distorted facts.

Case in point:

The other day, I was having a phone conversation with an old friend (at my age, ALL my friends are old) and he commented that he had heard that the Obama administration has printed more money in the last two years than the government has printed since the time of George Washington.

Although the “fact” sounded a little unrealistic, I “humped” a few words of agreement so that I could hear the rest of the story. After we ended our conversation, though, I went to my trusty computer to do some research , and found some very interesting information.

I wasn’t able to determine WHO came up with this story originally, even after researching “the usual suspects”. The closest that I could come up with were some comments made on the air by Glen Beck on October 28, 2009. On that program, he stated that our ACTUAL national debt is really $105 trillion, and that we have increased the money supply by 120% in the last year.

I was an Economics major in college. While attending the University of Minnesota, I passed 11 Economics courses, and I took 2 more additional post graduate courses before I taught college level Economics classes for 7 more years.

Glenn Beck barely graduated from high school, and NEVER attended college. For some reason, though, there’s a large number of people who think that he knows what he is talking about when he gives his opinion about Economic theory.

I will have to admit, though, that Glen Beck knows more about money than I do.

He made $32,000,000 last year ..

and I didn’t.

If you look at the chart below, you’d probably conclude that the Democrats have REALLY gone nuts in the last two years.

chart of the U.S. money supply

If you dig deeper, though, you’ll also discover that there are SEVERAL kinds of money. MO (the chart represented in the link above) is simply money in circulation AND bank reserves. It has “spiked” in the last two years due to the fact that banks have been hoarding money during the credit crises and the real estate collapse. Another REALLY big reason that banks apparently started “hoarding” money is that the Federal Reserve started paying interest on depository institutions’ required and excess reserve balances on October 6, 2008.

If we, as individuals, were suddenly offered a higher interest rate on our savings accounts, isn’t it logical that we’d put more money into our savings accounts, and less into consumption?

That’s exactly what lending institutions have been doing since October 6, 2008.

The Federal Reserve uses TWO money supply measures.M1 measures currency, travelers checks, and checking account deposits. M2 includes M1, savings accounts, time deposits under $100,000, and money market mutual funds.

Glen Beck IS right about a couple of things:

(1) the supply of money in circulation HAS increased since Obama took office.

(2) the national debt has ALSO increased since Obama took office.

However, he IS a little off on his numbers. According to the Federal Reserve (on March 24, 2011), M1 has increased roughly 10% since a year ago, and M2 has increased about 4%.

The LAST time that there was a Democratic President (Bill Clinton) , the outstanding public debt was on track to have been ELIMINATED by the year 2010. That grand plan got sidetracked by the Bush Administration, who used the projected budget surpluses to fund tax cuts for the wealthy, and then added to the financial hemorrhaging by invading Afghanistan in 2001and Iraq in 2003.

As of March 27, 2011, the U.S. public debt is $14,221,945,669,739.50, which works out to a total debt for each man, woman , and child of $45,836.07, and an estimated 90% of that debt is due to the policies of the Bush Administration.

Thanks a lot, George.

Does an increase in the money supply automatically lead to more inflation? WeIl, it sure did in Germany in 1923, when people needed wheelbarrows to haul around their nearly worthless Deutschemarks:

To determine whether that is still true today, I went to the Federal Reserve website, and found the following opinion If you have trouble reading it, I’d suggest that you jump ahead to the conclusion on page 59. If it STILL doesn’t make any sense to you, I’m afraid that Glenn Beck isn’t going to be of much help either.

Most of us remember the rampant inflation of the late 1970’s and early 1980’s (when prices increased more than 10% each year), and none of us want to see a repeat of that.

Concerns have been expressed that policies of the Obama administration will lead to runaway inflation. However, the fact remains that the first year of the Obama administration (2009) was the first time since the Eisenhower administration that the CPI (Consumer Price Index) went DOWN from the prior year.

If Glenn Beck does not renew his contract with Fox News at the end of 2011, I’d recommend that the network play the following clip in the closing minutes of his program:

However, as nutty as he is, Glenn Beck isn’t a guy that we need to worry about.

Wisconsin Representative Paul Davis Ryan Jr is really the ONE person who has the ability to create havoc in the American economy, largely due to the fact that he is the chairman of the House Budget Committee.

Prior to his first election to office, in 1999, Ryan worked as an economic adviser to Empower America, one of the many conservative organizations (including the Tea Party) that have been founded and funded by the billionaire Koch brothers. Ryan, like Scott Walker, has received a substantial amount of money from the Koch brothers since being elected to office.

Ryan is one of the three co-founders of the Young Guns program, an organization dedicated to helping Republicans gain and retain offices. He also created the Roadmap for America.

In brief, the Roadmap for America advocates:

reduction of income tax for the wealthy
reduction of the capital gains tax -
elimination of the corporate income tax -
elimination of the estate tax -
elimination of the alternative minimum tax =
privatizing Social security -
the elimination of traditional Medicare and Medicaid programs -

Like his fellow “cheesehead", Scott Walker, he'll be a person to watch in the future.

For most us, Ryan has been "under the radar", and he definitely is not a household name. However, if enough people (especially voters in Wisconsin) start saying "that damn Paul Ryan", our country will be a lot better off.

Thursday, March 10, 2011

Ghostbusters !!

One of the more memorable lines from the 1984 movie “Ghostbusters” was when Bill Murray said, “I’ve been slimed”.

That line came to mind on the morning of Ash Wednesday as I walked to work. Contrary to what you might think, ethereal apparitions didn’t suddenly slide out of the railroad overpass on Main Street into my line of vision.

To be totally accurate, I wasn’t “slimed” this morning. I was “ashed”.

Evanston is definitely a town of churches. I visited 65 different congregations between January 1 of 2006 and January 1 of 2008, but I didn’t get to all of them. Altogether, there are 103 churches, which seems like a lot for a town of 70,000 people.

One of the churches that I DID visit was St. Luke’s Episcopal Church, which is located less than two blocks from where I work.

On Ash Wednesday morning, two female priests from the congregation were administering ashes to whatever passersby wanted to accept them. Since I wasn’t sure what my schedule would be like that evening, I decided to take them up on their offer.

In addition to the ashes, I also received a postcard with some additional information about the congregation, and about the season of Lent.

One of the paragraphs on the card that they passed out really struck a chord. The exact words used were as follows:

“The ashes we receive here are to remind us throughout the day of our need for God, and of God’s call to us. There is much more to the beginning of Lent than ashes alone, and we encourage you to make time for worship with a community of faith, for the support of others and of the great traditions of faith in our work of repentance and renewal. This is the season when old worries and hurts may be released and healed.”

To rephrase that last sentence, Lent is a time that we can get rid of our old ghosts, and prepare for a new beginning.

Because of some of the life experiences that I've had, I've become more open-minded as I've gotten older, which is contrary to what happens to most people as they start to get grayer. As a result, I was delighted to receive ashes from an Episcopal priest this morning, for a couple of reasons:

(1) Not all mainline churches recognize female priests. Although the Roman Catholic Church has not permitted female priests since the 4th Century, there are other churches that follow the same philosophy.

The “liberal” arm of the American Lutheran Church, the ELCA, DOES allow female priests, and recently decided to permit non-celibate gay priests to lead congregations. The “traditional” Lutherans (the Missouri and Wisconsin synods) do not permit female priests.

As a general rule, Muslims also do not allow women to lead congregations in prayer.

In spite of some local opposition, there ARE places in America where female Roman Catholic priests celebrate mass, and there ARE places in the world where female imams are allowed to lead mixed congregations. To protect their privacy, I won’t tell you how many female priests there are in America, or where they are, but you can learn more about them by watching the movie “Pink Smoke Over the Vatican”, which will be released this spring

(2) the Episcopal Church is the only mainstream congregation (so far) to permit an openly gay man (Gene Robinson) to serve as a bishop. Before you pull out your Bible, and start flipping through Leviticus, I’d STRONGLY recommend that you go to and BUY the movie about his life.

You can watch a preview of the movie at the link below:

For the Bible tells me so

The mission statement of St. Luke’s Episcopal Church is as follows:

“St. Luke’s Episcopal Church is an inclusive, progressive Christian community. The congregation that gathers for worship reflects the diversity of our surrounding urban/suburban community. Celebrating the image of God in every person, we gladly welcome all individuals - regardless of gender, race, ethnicity, sexual orientation, socioeconomic class, martial and familial status, mental and physical abilities, and religious background”.

Although I enjoy diversity, I don’t expect that all the churches in America should be as open and progressive as this church or the ELCA Lutheran church that I attend on a regular basis. However, I would like a lot fewer congregations like the homophobic Westboro Baptist Church, which is officially listed as a hate group by many internet watchdog sites.

The first clear evidence of the commemoration of Ash Wednesday is around 960 A.D., and in the 12th Century, people began using palm branches from the previous Palm Sunday for ashes. Traditionally, the season of Lent that Ash Wednesday inaugurates is a time for reflection and sacrifice, and the season is considered to be a preparation for the renewal of the baptismal promises at Easter. Although Catholics can now eat meat on Fridays throughout most of the year, the season of Lent removes that privilege. Often forsaken during Lent are the little pleasures of life (candy, smoking, alcohol etc.) but modern society has created some interesting twists. I’ve recently heard about people giving up Facebook for Lent. Although it might seem a little silly at first, the reality is that most of us spend a little more time than we should in front of our computers, and I have to admit that I started going through withdrawal symptoms when my internet service went away a few weeks ago for three days. Yikes!

Although I really didn’t feel any physical change come over me after I got the smudge on my forehead on Ash Wednesday, I DID feel a stronger sense of calm. Even though they were the same ashes that I've always received, they somehow gave me a different attitude this year. Now that I’ve got my ashes , I ain’t afraid of no ghosts

Sunday, March 6, 2011

The man behind the curtain

When we were kids, the “Wizard of Oz” taught us that people aren’t always who they pretend to be:

who are those guys?

The most recent example of that ancient wisdom is Governor Scott Walker of Wisconsin. On the surface, he is rightfully concerned about Wisconsin’s operating budget. Like many states, Wisconsin has more going out then coming in, so measures need to be taken to bring the budget in balance. According to pension expert Joshua Rauh of Northwestern University, Wisconsin currently has more than $45 billion in unfunded obligations. Sadly, Wisconsin really isn’t much worse than most other states. Taken as a total, state and local governments across America have unfunded obligations totaling $3 trillion!

With a strong dose of courage on the part of elected officials, the financial conditions of the states could be improved dramatically if all 50 states legalized the possession of minor amounts of marijuana and eliminated the death penalty.

In 2008, America had 2.4 million people behind bars. 1,000,000 of those people were locked up for non violent crimes, like marijuana possession. Individual states spend between $18,000 and $31,000 a year per prisoner. If you do the math, that’s $18 to $31 BILLION a year that's literally "going up in smoke".

It is estimated California could save $200,000,000 a year by
replacing the death penalty
with permanent imprisonment, and similar savings could be achieved in other states that still have the death penalty.

For now, neither of these entirely logical solutions are likely, so we're going to be doomed to "politics as usual" for a while yet.

What’s not widely known is that the Political Action Committee of Koch Industries contributed $43,000 to Walker’s gubernatorial campaign, and an estimated $320,000 came from a related group called Americans for Prosperity (which has an annual budget of $40,000,000). Since you never want to “bite the hand that feeds you”, Governor Walker recently spent 20 minutes on the phone with a man who he thought was his benefactor, David Koch, and he discussed pending layoffs and plans to publish lawmakers who had fled the state to Illinois.

Unfortunately, his opposition to high speed rail service resulted in the Obama administration taking back more $800 million that had been awarded to the state. To quote an old phrase, he is being “penny wise and pound foolish”.

Three days after the prank call to Governor Walker, the
Wisconsin legislature passed legislation designed to curb public sector union power.

Other states have been paying attention to the news in Wisconsin. A day or so before the Wisconsin legislature proposed their recent plan to curb union power,the school board of Providence, Rhode Island FIRED all 1926 teachers that worked in the city. Although the newly-elected mayor, Angel Taveras, tried to calm the uproar by publicly stating that “the overwhelming majority” would not actually lose their jobs, very few teachers felt comfortable about his statement. To curb its $40,000,000 operating deficit, the school board will need to close 40 of its schools by September.

The school situation is even more dire in Detroit, which will need to close 50% of its 140 schools by September. The schools that remain open will have as many as 60 students in each room.

I spent 7 years of my life as a teacher (either full time or part time) and 4 years of my life as a financial advisor, so the
punishment being aimed at teachers across the country leaves me a little conflicted.

If you’ve ever read “The Jungle”, by Sinclair Lewis, you’ll understand that unbridled capitalism can be a very dangerous thing. His book was instrumental in the passage of the Food and Drug Act in 1906, but working conditions in the factories of America didn’t start to improve until the 1930’s. OSHA didn’t get passed until 1970.

When I was growing up, a lot of the dads in the neighborhood (including my own) had union jobs. The peak year for unions was 1954, when 36% of the work force was union. Today, less than 7% of the workers in the private sector are union workers, but 32% of the public employees carry union cards.

Democracy needs a system of checks and balances to operate successfully.

By the late 1970’s , the contract terms imposed by the UAW made the Big 3 automakers less competitive than the guys from overseas. Although the vast majority of the foreign auto manufacturers now have plants in this country, most of them are non-union plants in the south.

The financial mess at the state level exists at the federal level, which is the root cause of the success of the infamous Tea Party in the 2010 election year.

When George W. Bush was in office, he first used the term
“compassionate conservative”
to describe the Republican Party.Let’s listen for a few minutes to a compassionate conservative discussing health care reform with a caller on a talk radio show program:

Glenn Beck made $32 million last year Although “only” $2,000,000 came from Fox News (which is owned by Rupert Murdoch) , it provided the platform that allowed him to promote the rest of his broadcasting empire.

Another conservative broadcaster, Rush Limbaugh, made $28,000,000 last year. Due to the number of years he has been in the broadcasting industry, it is estimate that his net worthis close to $1 billion.

To quote the late Illinois senator, Everett Dirksen, “a billion here and a billion there, pretty soon you’re talking real money”.

Both Glenn Beck and Rush Limbaugh have been featured speakers at the annual conferences sponsored by Americans for Prosperity (see above). The annual meetings have occasionally attracted unwanted attention from opposition groups. In January of this year, 25 people were arrested outside the conference center in a resort area near Palm Springs, California.

According to the Republican Party website, the list of the potential 2012 Republican presidential candidates is listed below:

The Grand Old Party

At the moment, former Governor Mike Huckabee is considered to be the leading candidate, but he is closely followed by Mitt Romney and Sarah Palin. Like Sarah Palin,John Bolton,and Newt Gingrich, Mr. Huckabee is currently an employee of Fox News, a division of News Corporation, which is owned by Australian-American media magnate Rupert Murdoch.

When Saddam Hussein was in power, he TOLD people how to vote.
It was either vote for Hussein - or else! Since I’m not a believer in telling people how to vote (or think) I won’t. However, I’m a lot more comfortable having an eloquent retired law professor running the country than a politician who has received donations from either the Koch brothers or Rupert Murdoch, who are the modern day “men behind the curtain”.