A National Rant
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Board: Macro Economics
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 :-)