When one declares oneself to be a conservative, one is not, unfortunately, thereupon visited by tongues of fire that leave one omniscient. The acceptance of a series of premises is just the beginning. After that, we need constantly to inform ourselves, to analyze and to think through our premises and their ramifications. We need to ponder, in the light of the evidence, the strengths and the weaknesses, the consistencies and the inconsistencies, the glory and the frailty of our position, week in and week out. Otherwise, we will not hold our own in a world where informed dedication, not just dedication, is necessary for survival and growth.

William F. Buckley Jr., Feb 8, 1956, NR

Saturday, December 13, 2008

A Guest Post From TAO - Part I

Sometimes you have to look around at the world you find yourself in and you just cannot help but wonder, “...what is going on?”

Just a few short months ago our economy was just chugging along and now when you look around not much looks different but you are now seeing everything from a different perspective. In a matter of months our economy went from being strong and robust (Paulsen, July 2008) to today where we find out that the core of our economic system is rotten and that we are most likely on the verge of a depression. Oh, and it was announced this week that we have actually been in a recession for almost a year (I am not really sure what kind of data the Federal Reserve, the Treasury Department, and or all these economists study but it sure is out of date by the time they get to it if it takes them a year to figure out a recession!). The only real difference between a recession, which most of us are familiar with and, a depression, which very few of us has any experience with, is that the situation is similar except that during a depression you also have deflation.

There are homes empty on your street where once families lived and this is due to the economy. It is not something that affected certain communities but it is affecting all communities; it is just not as obvious of an event in some communities as it is in others.
Between the subprime mortgage fiasco, the absurd mortgages that were proposed, and or the economic downturn many more Americans will lose their homes.

Our children are also beginning to drop out of college because their parents cannot afford the cost of tuition. I am not real sure that our economy can truthfully generate enough jobs, even in the healthiest of times, to justify all the college graduates we turn out in a year but I do realize that without college graduates we sure are not going to be able to create anything.

If you really look at our middle class today, you see people who work very hard and are very capable. But they are fearful for their jobs. They are putting off having children just due to the sheer cost of raising children. They are taking part time jobs or working for temporary agencies just in an effort to stay economically viable. Yet, they cannot seem to achieve anything without credit. As I drive to the office everyday I cannot help but notice that most of the newest businesses that have opened up over the last five years are payday loan centers and rent to own stores.

None of which represents wealth but in actuality represents poverty. In the month of November we lost the most jobs in one month than we have lost in any one month in the last 34 years. Our only gains, in regards to jobs, occurred in schools, government, and health care. All of which are dependent on the government to a large degree for their income.

We need to realize that this economic meltdown began with the speculation in real estate. Ten years ago you could not find a home valued at $500,000 now we have gated communities where the lots alone cost $200,000. With the development of interest only loans any weekend handyman could begin to “flip” houses on the weekend and make big bucks. It’s no different than in the days of the internet bubble when anyone with a couple of hundred dollars could get on the internet and trade stocks during lunch time. You didn’t need to know anything about the stock market, you didn’t need to know anything about the companies whom you were trading their stock; the market always went up.

I was getting telephone service from WorldCom and every month the bill was getting less and less and every month there was another special to save me hundreds of dollars and every month their stock was hitting new levels.

Enron was breaking records with its income but yet under everything they were a utility company and for the most part utilities are a regulated sector.

If you are constantly building homes, remodeling homes, or selling homes for a higher and higher price you need to constantly find more people to sell to if the scheme is to continue.

Our automakers are on the ropes but do not fear, so are all the foreign automakers; I wonder how many millions of their cars are sitting on the docks at our ports. No one is selling cars right now.

Less than six months ago our economy was just fine. Now we have watched our stock market lose almost 50% of its value, we have watched real estate prices plunge and will continue to do so. Next we will see companies folding, those companies that need short term loans to make payroll every week, then those companies that used low interest rates to expand their facilities and then in a short time the REITS will begin to fold under the over leveraged positions they find themselves in.

Then it will be credit card debt that will fold and take down the very same banks that are being bailed out right now. In 2007 banks earned 18 billion dollars in late fees on credit cards debt alone. Trouble is they can call it income but it is only a fee until such time it is collected. In 2009 they will charge all the fees they want but until someone actually pays their bill that income is an uncollected receivable.

Now, conservatives can continue to point at government and blame them, the liberals can point at the rich and blame them but the reality is our government and our economy no longer represent the values of the people of this country. It is not about the values of our Founding Fathers, or of our religious beliefs, but rather the core values that have made this country great.

Our government and our economy lost those values because we lost sight of the importance of our values to our lives. We got wrapped up in dogma of the political parties, we got blinded by the reward of supply side economics, we got cocky about being the “winner” of the battle of superpowers, and we became distracted by issues such as abortion, and gay marriage. As the liberals watched “MSM” which discussed all of the negative news the conservatives hovered over Rush Limbaugh and Fox News who lambasted everyone else and glorified their listeners and viewers for being the “true” patriots.
Some place along the way we forgot what it meant to be Americans. We lost sight of the fact that Americans were liberals, and conservatives. That Americans were the rich and the poor, the gay and straight, the pro life and the pro choice. Someplace over the last 30 years we lost sight of the fact that society, government, and an economic system all exist for one purpose and one purpose only: “…of the people, by the people, for the people.”