On Inflation

The Feds recent proposal has many people concerned about inflation. While for others it just revives the debate of hyper inflation vs deflation. Minyanville brought about some greater perspective for me however this quote:

Inflation, like other economic entities, is controlled by supply and demand. The velocity of money is one way to represent the demand for “stuff” - when it goes up, prices tend to follow.

From Minyanville

I'm not sure this plays out in the real world but the idea makes sense. We're already maxed out and over leveraged. That's why the global economy is contracting. So it's only producers that can borrow, not spenders, not the banks.

Our American Challenge

Today we witnessed the inauguration of our nation's 44th president and yesterday we honored someone who helped make that possible.  

Dr. Martin Luther King Jr. was a citizen who worked against powerful forces to expand liberty, justice and equality.  When my grandfather fought in the second world war, and when this nation's founders fought the British in The American Revolution, it was those same ideals that stood at the forefront of our national consciousness.

We enjoy the hard fought gifts of liberty,and justice, for all as a result of the sacrifices of many.  With that freedom comes our own individual burden of responsibility for the condition of our democracy. 

And while we vote in an exercise of our democratic ideals, that act alone does not satisfy our democratic obligations.

In the aftermath of the September 11th attacks, our nation was asked to open up our wallets and spend for the sake of the economy.  Consumerism became synonymous with patriotism.

It is a popular idea, that the economic decisions we make, can be a force for good in this world.  Undoubtedly the tactic of "voting with your dollar" can effect change, but it still cannot satisfy our obligations as citizens.  

Today this country faces tremendous challenges.  In the face of these challenges we must bring individuals to account for their actions, however we must not be victims.  

Consumerism cannot be allowed to replace citizenship. Our responsibility to does not end once our representatives are in office. And we must not simply surrender our freedom to victimhood. As citizens of this democracy we are responsible for our own fates and the fate of this nation. Our biggest challenges are not terrorism, or economic calamity, rather they are apathy and dogmatism.

Yesterdays celebration of Dr. King and today's presidential inauguration serve as inspiration, as we each take up action defending against the apathetic and dogmatic tendencies within ourselves.

It is on each of us to take up a cause.  It is on each of us to improve our communities. It is on each of us to listen with humility and empathy to those with whom we disagree.  It is on each of us to be critical and to petition our media and our elected representatives on a frequent basis.  It is on each of us to accept the responsibility of our freedom and to take on the task of making this nation better.

Yes We Can.

Porn Industry Bailout: A line in the sand?

Excellent publicity play:

The porn industry has been hurt by the downturn like everyone else and they are going to ask for the $5 billion. Owen Moogan speaking for Hustler Publisher Larry Flynt. CNN

As Mish Shedlock points out "once you cross the line and start picking favorites, it is hard to stop."

CNN Political Ticker via Mish's Global Economic Trend Analysis.

It's Simple Economics.

Matt Bors @ Comics.com Via Campaign for Liberty Blog

Cameras At War

Korean TV via RFK Action Front

Kroszner: "It's not the CRA."

"we found essentially no difference in the performance of subprime loans in Zip codes that were just below or just above the income threshold for the CRA."

I've seen quite a bit of writing in the blogosphere, pointing to the Community Reinvestment Act (CRA) as the, if not one of the, causes of our current financial crisis. Ridiculous as it may seem, some are very adamant about the impacts of the CRA. Fed Govenor Randall Kroszner, today, spoke on the results of a study by the fed to investigate those allegations.

The findings clearly show that the CRA could not have had a significant impact.

"First, only a small portion of subprime mortgage originations are related to the CRA. Second, CRA- related loans appear to perform comparably to other types of subprime loans. Taken..."

Given the stories about lenders giving loans to whom ever they could without regard to standards, affirmed in my personal experience in mortgage origination, it's hard to see how anyone could blame a program like the CRA as been the root of the problem.

Our nation has been experiencing an economic decline since some time in 2002. We've shipped many of our jobs over seas to locations with lower, if non existent, labor and environmental quality practices. An expansion of credit made possible through accelerated regulatory liberalization in our financial industry masked a decline. We've now reached a point where the benefits of industry and production are exceeded by the levels of debt we've incurred.

This strong debt contraction is a necessary reaction to correct potentially 30 years of financial abuse. The idea that bailing out lending institutions so they can continue lending in the face of an already over leveraged economy makes little or no sense.

Given this idea, that we are facing the consequences of over-leveraging (or that we're just bankrupt) it seems impossible to point to something the size of the CRA, especially in light of the comparison of CRA eligible loans in default to non CRA loans, as the source of our current financial troubles.

[Kroszner's Speech]

Palin Bashing From Republican Insiders

From the Financial Times

even as the Alaska governor tried to keep her options open, some allies of Mr McCain were busy trying to trash her reputation with a series of allegations about her conduct during the campaign.

Perhaps the most startling involved fresh claims about Ms Palin’s shaky grasp of geography, with unnamed McCain aides telling Fox News that during preparations for the vice-presidential debate, it emerged that she did not know Africa was a continent rather than a country.

This is a very interesting turn of events. It seems as if there is some feeling that she seriously pulled the campaign down in the end. Palin still has strong support from a part of the party.

It's become clear that Palin has the potential to continue to be a phenomenon to follow, on the other hand she may not be able to garner support beyond some of the more diehard social conservatives.