Thursday, May 28, 2009

The Great Depression: The Advanta House of Cards Collapses

Are you feeling depressed? Well, you should. That's why it's called The Great Depression.

What happened in the 1930's is repeating itself today in a virtually identical pattern. The names have changed and certain new industries have replaced the institution of the 1920's and 1930's, but the chain of events remains unbroken.

Students of The (first) Great Depression know that the Stock Market Crash neither caused nor even marked the beginning of the depression. It was more of an early warning system. In fact, many people in late 1929 and 1930 felt we had weathered the storm of the stock market collapse and were on the way to recovery. Sadly, they were wrong.

The cascade of business and institutional collapses and, especially the banking collapse happened slowly and over time. The worst of the crisis didn't hit until 1932. And then, as today, our government did virtually everything wrong.

Actually, today the actions of our government are much worse. We may well be looking down the barrel of a loaded gun that will actually destroy our country. We have the absolutely wrong leadership team in Washington. They do not see or understand the crisis that grips our country. Our leaders are literally fiddling while Rome burns.

I am especially distressed that, in spite of the daily warning bells, President Obama seems oblivious to the crisis at hand. But, as a friend mentioned to me earlier today, that might just be for the best. He would certainly prescribe the wrong medicine.

Today might just be the beginning of the final collapse. Yesterday Advanta Bank abruptly cancelled over one million business credit cards that have virtually kept small business in America afloat. With average credit limits of $25,000.00 to $40,000.00 these cards have been a lifeline as bank loans dried up and other credit card companies, like American Express, reduced lines and limits.

Unless you work with small businesses like I do, you cannot imagine the disaster happening today. Literally one million businesses are scrambling to replace a credit card in an economy where no new credit cards are being issued.

You can look for business payroll defaults as early as next week. You can look for layoffs as early as today. You can look for bankruptcies and store closures in the next few months.

Add this to the bankruptcies of Chrysler and General Motors, the bizarre closing of over 1,000 automobile dealerships and the general layoffs at factories and white collar businesses around the nation and you will soon see the death of many small towns. It is literally a house of cards. And the first card to fall was Advanta's.

If.... if..... if..... If only we had a real stimulus package instead of the pinata of death designed by Nancy Pelosi and the clueless Democrats in Congress. Dammit America. You should never let people who have done a day's work, managed a business, made a payroll, or worked and studied in economics design a "stimulus package."

You will note from the
government's own website that, 120 days later, almost no money has made it into the economy. As of 20 minutes ago the government has somehow managed to spend a whopping $31.1 billion dollars out of the$ 787 billion dollars in the stimulus package!!

Watch the House of Cards Fall:

Advanta Closes One Million Credit Card Accounts

Feel the pain in real time:
The Twitter Advanta Feed

Ask The Consumerists: Small Business Credit Cards

Advanta Freezing All Credit Card Accounts

NPR: The End of Advanta

Tuesday, May 26, 2009

Mechanical Issues

I want to apologize for the lengthy delay between posts and the very brief post today. The major reason for the delay is a very difficult work schedule primarily caused by our tough economic conditions. I am reminded daily just how pathetically poor the Obama/Pelosi stimulus package really is. Make no mistake about it, our government has failed us badly in this current crisis.

I also have some minor computer problems that have limited my ability to post. These will be corrected very soon. It is interesting to note that tonight's post is actually being made on an iPhone!

I have three short observations to make tonight. First, and by far the most important, is to simply note that the absolute greatest strength of our democracy was illustrated by last weeks back to back speeches by President Obama and former Vice President Dick Cheney. Such an open, honest, articulate debate couldn't happen anywhere else. And it was all so civil and peaceful and gentlemanly. Regardless of your position on the issues presented, it was a moment that should have made us all proud.

Second, I applaud and endorse President Obama's nomination of Judge Sotomayor to the Supreme Court. Republicans will bluster, but look for a speedy confirmation. By the way, if any of you happened to witness Rachel Maddow's silly Whiskey Sour analogy, it was spot on correct (but still silly).

Finally, President Obama's cuts in missile defense are stupid and extremely dangerous. It is moments like this that I wish Alaska Governor Sarah Palin were Vice President (or President). Not only would we have a stronger, better and more intelligent defense program, we would have had a real and effective stimulus program.

Monday, May 11, 2009

Looking the Other Way

President Barack Obama has an impressive and important agenda. And he has the ability to multitask, delegate and manage a complex process of proposals with apparent ease and competency. I am both impressed and pleased.

In addition, let me mention that I strongly approve of his foreign policy agenda and his first contacts with leaders on the world stage. President Obama is living up to our highest expectations. American is both better liked and more respected under President Obama.

I know many Republicans are busy picking nits. And I know many of my conservative readers disagree. I appreciate both their genuine beliefs and the role of the "loyal opposition."

Finally, I recognize that the major media, the press, is not doing their job and their very unhealthy love affair with the President continues. This romance does not serve our nation well. We need it to be over. Now.

And here's why. Flying beneath the radar is a deficit and spending/borrowing program that runs the risk of destroying President Obama's administration. Tragically, even if Obama somehow survives, the country will be left in ruins.

I've listened to all the Obama administration spokespersons and the left wing talking heads and I've read many of the important left wing blogs, so I know all the official explanations. I also recognize that at least 50% of the apologists don't believe a single word they are saying. Under the cloak of false confidence, they are secretly praying that somehow Obama can pull it off.

He can't.

Meanwhile I know that Republicans are attacking the deficit because they think it's their job. However, since Republicans have little to no credibility on deficit spending, no one is paying any attention.

As a result a time bomb that will have the power of 100 atomic explosions remains ticking beneath the surface. It will explode unless credible economists and Democrat leaders wake up and immediately sound the alarm. We cannot support this level of debt. It is economically not possible.

By the end of Obama's first term we run the risk of both interest rates and unemployment exploding to double digits. I want to emphasize again that President Obama's Stimulus Package (actually it is Nancy Pelosi's Stimulus Package) will not work. It's not that I don't want it to work. I do. It just won't. It was nothing more than a badly conceived waste of taxpayer's money.

Meanwhile here is the news,
White House Boosts Deficit Projections:

WASHINGTON -- The federal budget deficit will widen to a record $1.841 trillion this fiscal year, $89 billion wider than previously expected, because of the weak economy and expensive financial rescue, the White House said Monday.

The Obama administration expects the deficit to be $1.258 trillion in fiscal 2010, which begins in October. In its February budget overview, the White House predicted a $1.752 trillion budget gap in 2009 and a $1.171 trillion deficit next year.

Changes in a host of tax and spending projections are propelling the deficit higher in the near term, primarily the result of the continued woes of the U.S. economy.

"The change in the deficit estimates reflects upward technical revisions in light of new information regarding the collection of receipts, financial stabilization efforts, and other federal programs," Mr. Orszag said in a blog posting.

OMB now expects total government receipts to decline nearly 15%, or $368 billion, this year. As a percentage of gross domestic product, receipts are seen sinking to their lowest level since 1950, 15.1%.

Since February, the estimate for this year's corporate tax receipts has fallen $18 billion, while projected individual tax revenue has declined $5 billion.

The deficit is now expected to reach 12.9% of GDP this year -- a level not seen since World War II. Over the next decade, the White House expects accumulated deficits of $7.1 trillion.

The White House still says it can halve the deficit by the end of President Barack Obama's four-year term. Yet the new figures are likely to trigger more Republican criticism that the administration isn't doing enough to tackle runaway government spending.

While the White House has updated its top-line deficit figures, it hasn't changed the economic assumptions that underpin the budget, which are based on information available at the end of January. The economy appears to have worsened since then, potentially foreshadowing even wider deficits.

The administration's forecast calls for a recovery to begin by the end of this year and gain momentum in 2010. Specifically, the White House expects the economy to contract 1.2% this year before rebounding and growing 3.2% in 2010 and 4% in 2011. After miserable first-quarter growth data, the White House's figures look even more optimistic now than they did in February.

The White House expects the unemployment rate to average 8.1% this year. Last month, though, the rate surged to 8.9%, the highest level since 1983.

In summary, we must all stop looking the other way. The deficit is the 800 pound gorilla in the room. It will destroy us all.

We can only accomplish President Obama's important agenda with a realistic outlook and with common sense spending and control of the deficits. We must begin today.

Tuesday, May 05, 2009

Feminists or Fascists

For my last forty years I have fought for the rights of women. And even more importantly I've fought for the RESPECT of women. This has meant a never ending fight for equal pay, equal treatment, equal opportunity and equal rights. Whether it was a fight for equal and full funding of women's sports in high school or college or a fight for women's right to control their own bodies, each step forward was tough and opposed by a dizzying array of religious zealots and misogynists.

Especially tough has been the on going fight for abortion rights. And even tougher is the continuing fight for gay marriage (which is both a women's issue and a gay rights issue).

And I'm sorry to say that for all the progress we've made here in the United States, the clock has wound backwards in many parts of the world, where rape is now a common part of war, and child prostitution is condoned and even assisted by dictators in the some third world countries.

We are a long way from victory.

Tragically, we are not being helped by many so-called feminists and progressives who have decided that a full frontal assault on Carrie Prejean, Miss California who was attacked unmercifully by the world famous Perez Hilton, is the most important issue of the day.

My problem is that there is only one liberal, liberated woman in the mix and that is Carrie Prejean herself. She had the courage to speak truth to power. And she did so with grace and candor without ever condemning those whose beliefs differ from hers.

That she echoed President Barack Obama's exact position on gay marriage almost word for word simply adds to the irony.

We love Barack. We hate Carrie. It's a tough line of thought to follow. Barack is a hero, a liberator, a voice of reason. Carries is a c---, a bitch, a whore, and much, much worse.

As I listen to the totally pathetic Keith Olbermann and dozens of pseudo liberals and false feminists parade across MSNBC and many other programs, I am sickened.

These people aren't feminists, they are fascists who demand strict adherence to a narrow set of highly specific positions and activities. Dare to cross the line and you will be raped on public television with joy, glee and reckless abandon.

For another, but generally supportive viewpoint, read B. Daniel Blatt's excellent blog post
On the “Need” of All Too Many on the Left to Hate at Gay Patriot.