Random thoughts from a warped and fevered mind...
Monday is Memorial Day, the unofficial start to the summer. For most, school is out, vacations await, and it is an extra day to sleep in and enjoy a day without the rigors of the work environment. In the hustle of daily life, a day off is welcome. It is that same hectic pace that causes many to forget the significance of the day we celebrate. Declared as a federal holiday and named "Memorial Day" in 1967, this day has been set aside to honor those that made the ultimate sacrifice to defend our freedom. All of us that enjoy our freedoms in this country cognitively know that there is a cost to those freedoms. For families that have lost loved ones, that cost is all to real and painful. Thomas Jefferson said "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." This Monday, we honor the patriots that have secured our freedom by their willingness to lay down their life for us. In the midst of the barbecues and time with family and friends, pause for a moment and say a prayer of thanks for those men and women that have made our freedom possible.
A friend invested in a company that made revolving doors and toilet paper. Unfortunately, it went broke and he got wiped out before he could turn around.
In the first quarter of 2010, paychecks from private business shrank to their smallest percentage of total personal income in the United States in the history of this country. Simultaneously, government provided benefits from Social Security, food stamps, welfare, and other programs, grew to an all time high in the same period. The total personal income in the United States is the combination of what is earned by individuals from employers and the payment of income through government programs like those just mentioned. According to the Bureau of Economic Analysis, private wages fell to an all time low of 41.9% of total personal income. This trend cannot continue, because the government is dependent upon the growth of private wages to generate taxes for its growing and expensive entitlement programs. One has to look no further than Greece and the civil unrest there to get an idea of what happens when governments try to cut back on the government funded benefits. This level of spending is unsustainable without enormous tax increases, and most governments, ours included, have shown they do not have the political willpower to cut spending.
How many weeks are in a light year?
Congress is wrestling with a financial reform bill that will supposedly change the way that Wall St. does business (full disclosure- I work with those on Wall St. managing investments). Both houses of Congress have approved a bill but it must be reconciled because there are substantial differences in both the House and Senate version. Senator Judd Gregg, a New Hampshire Republican, on Monday of this week called the bill a "disaster" because it did not address the "underlining causes of the economic issue, which were real estate and underwriting." Amazingly, both the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Association (Freddie Mac) are excluded from the reform effort. To date, Fannie and Freddie have been bailed out to the tune of $300 BILLION dollars. and they continue to bleed red ink at a rate of $8 Billion per month. Yet Congress does not deem it necessary to include them in a financial reform package?! One reason is that both of these entities are closely intertwined with the very Congress men and women that should oversee their operation, funneling thousands of dollars back to their campaign coffers. Fannie and Freddie have become a cesspool, and any effort to clean up any financial mess and regulate the financial services industry must include these two entities as well.
In high school, I was in the French club. All we would ever do is surrender to the German club.
And that, my friends, is my view.