You have nearly 10% official unemployment and roughly $3T added to the national debt over the next 2 years, you have AIG, Fannie Mae, Freddie Mac, GM/GMAC, and Chrysler taking the lion size of TARP and other funds, you have failures of credit raters, accountants, the SEC, the Fed, and what do the progressive Democrats get hot and bothered about? An email from one Goldman Sachs employee whom used the term "sh*tty" to talk about a deal presented by Goldman--not to the little old lady from Pasadena, but sophisticated buyers? In investing, timing means everything. Greenspan in the mid-1990's talked about "irrational exuberance" to the stock market. If you shorted the market at that point of time through the Nasdaq meltdown starting in the spring of 2000, you would have gotten killed. In a down market, risky mortgage, commercial paper or notes are discounted. So when you are making deals on notes with significant risk to them, one party (the seller) thinks there's additional downside, and the other believes that the bad news is behind them. When Goldman decided to sell this debt, they've taken a position that selling is better than buy-and-hold. They weren't hiding bad news from their clients; as others have noted, if the clients thought what Goldman was doing was wrong, they would have sued. I've lost money on stocks; clearly, the other party was right, and I was wrong in making the transaction. The people selling the stock may have thought I was taking a sh*tty deal. So what? Unless they were relying on some insider information, it's just their opinion. At the time, I thought they were making a mistake by selling.
I have been sorely tested about keeping the civility project pledge during almost two years of writing this blog. But when demagogues like Senator Levin (D-MI) and McCaskill (D-MO) deliberately used the word nearly a dozen times to mock Goldman executives during the Wall Street Inquisition hearing earlier this week, let us count the sh*tty deals made by this progressive Democratic Congress and President:
- what about the sh*tty broken promise made by Obama not to sign earmarks into law?
- what about the sh*tty Cornhusker Kickback deal (Reid/Nelson-NE)?
- what about the sh*tty Gator-Aid deal (Reid/Nelson-FL)?
- what about the sh*tty Louisiana Purchase deal (Reid/Landrieu)?
- what about the sh*tty Obama Administration auto bankruptcy deals ripping off bondholders?
- what about the sh*tty deal American voters got in terms of the $787B stimulus deal, sold on misleading promises of keeping unemployment capped at 8%?
- what about Obama's sh*tty empty promise of making Washington "post-partisan"?
- what about Obama's sh*tty scapegoating of every problem these last 15 months on George W. Bush?
- what about Obama's sh*tty international apology tours?
- what about Obama's sh*tty rationalization that the corrupt Democratic Party Healthcare Bill would reduce the deficit?
- what about the Democrats' sh*tty setting of priorities, putting climate change and health care reform above pro-business growth, entitlement solvency, and spending reform issues?
- what about the Democrats' sh*tty response to losing a high-profile election to underdog Scott Brown being to jam down the throats of the American people the very same bill Brown ran against, opposed by a majority of the American people and involving 17% of the American economy?
Some Comments About the Immigration Kerfuffle
Before discussing this issue further, I want to correct any misconception (which I'm sure that any progressive reader would advance) in my shorthand characterization of myself as a pro-business conservative. More precisely, I'm more of a neoclassical economic libertarian committed to fair competition and transactions and efficient, usable, fair taxation and regulation. It doesn't necessarily mean pro-management or anti-union. I certainly don't support what was done at Enron, Tyco, Fannie Mae or Freddie Mac or abusive practices against employees, competitors, vendors or customers.
When I look at the issue of immigration, I'm looking at labor as a resource. In some cases, work is seasonal (e.g., crop harvesting), and farmers lack local resources; in other cases, there may be labor shortages which are persistent in nature. Let me cite relevant examples: there are pipeline issues in terms of professional occupations like physicians, nurses, engineers, and software developers
Unions generally oppose immigration and temporary worker status; it's fairly easy to understand why. Given a limited supply of local talent, this tends to bid up the prices of labor. The problem is that labor costs are material to prices of goods and services, which can be constrained by the competition (including foreign-produced goods and services). Moreover, many of the labor supply problems are sticky: for instance, there may not be any physicians available locally at any price, assuming you could pay any price. For example, a physician who has lived his whole life in Massachusetts near friends and family and makes more than enough to make ends meet may not be willing to move to Alaska, even if Alaska offers to pay him 50% more. I was recently asked about whether I was interested in a contractor DBA opportunity in Iraq. We never got to the point of talking salary or benefits.
Latinos in the Democratic Party find themselves at odds with the traditional labor base in the sense that the Kennedy Administration agreed to gutting of existing temporary worker programs from south of the border. The Democrats in 2007 kept reducing the size of temporary workers to an insignificant proportion of undocumented workers in the US. The partisan Democrats (notably Senator Obama in particular) wanted to make existing workers legal for purposes of establishing a higher wage base (remember what I said in terms of wages constrained by competitive factors). If you allow, say, adding millions of workers to minimum wage status, you are simply glutting the market of minimum wage-eligible workers. (This underscores the dysfunctional nature of misguided progressive concepts like the minimum wage or a "living wage". If I own a restaurant with a $500 budget for labor and the minimum wage is raised, I now can only afford a lower number of hours, translating to fewer workers; I may reassign or limit workers to peak time periods. But in no case can the government force me to operate at a loss; I will simply close the restaurant, and all the labor unions and their progressive political allies have managed to do is force me to fire labor I can no longer afford.)
So what does this have to do with the current immigration kerfuffle? I am frankly concerned about the blatant political exploitation of the issue by progressives; all Latino voters need to know is that Obama, Reid and others have fought temporary worker programs which would essentially make the illegal immigration problem go away by bringing the illegal/black market into the open. I don't speak for other conservatives necessarily, but I would be willing to grandfather existing foreign-born undocumented workers in good standing (no criminal record) a legal status but legal status would expire within a specified travel time period after documented last labor date, and government-sponsored subsidies and labor policies would not be applicable to these temporary workers (for obvious reasons). New temporary workers would be processed through some labor exchange mechanism with relevant quotas, subject to business requirements. All legal temporary workers would be required to carry tamper-proof, immediately-verifiable identification (e.g., biometric markers, like fingerprints, retina scans, DNA, etc.)
I do not believe in rewarding people whom entered the country through unofficial procedures with preferential treatment for immigration; this is moral hazard. If undocumented workers want to immigrate to the US, they should apply from their host country--at the back of the line, treated no better or worse than their fellow citizens.
I've made it clear that I do not support the Arizona immigration bill. I believe, like Senator Graham (R-SC), that it is unconstitutional, and I think a number of conservatives are being inconsistent. In terms of the corrupt Democratic Party Healthcare Bill, other conservatives talk about violations of certain traditional state responsibilities. Why isn't it true in the other direction, i.e., states preempting traditional federal responsibilities? I think it's bad law; in essence, Arizona is subsidizing the rest of the country for immigration enforcement, but in effect it has become a vigilante state, deciding if it doesn't like the way the federal government is doing its business, it can arbitrarily substitute its own efforts, not necessarily in compliance with federal operating procedures. I mean, where does it stop? If California doesn't like the way the US Coast Guard is performing, it'll create its own competing coast guard? If South Dakota doesn't like the number of Army bases it has, it can create its own army bases?
Let's be clear: most undocumented workers entering Arizona from Mexico are Latino. A significant number of Latinos in Arizona are undocumented. There are distinctive characteristics related to undocumented visitors (e.g., travel patterns, vehicle utilization, destinations, etc.) Putting aside constitutionality issues, what the Arizona law, which I have not reviewed in detail, should have done is reference existing federal operating procedures, which excludes ethnic profiling activities or arbitrary, subjective activities. I personally do not believe that the Arizona law was created to justify a different standard than federal standards; I think it was in response to a perceived negligence by an incompetent, unresponsive Obama Administration to fulfill its constitutional mandate of border protection. I personally think it would be prudent to work with federal personnel when feasible.
Political Cartoon
Glenn McCoy points out the moral hazard behind today's excessively progressive
Quote of the Day
Do not go where the path may lead; go instead where there is no path and leave a trail.
Ralph Waldo Emerson
Musical Interlude: "Believe" Songs
The Lettermen, "I Believe"
Cher, "Believe"
Elton John, "Believe"
Mariah Carey and Whitney Houston, "When You Believe"
