September is here!

Hi folks,


Well September is here and the Republican and Democrat Party are going to start in earnest. The Republican Party must choose a standard barer to run against Mr. Obama. Party politics suggests that to beat Mr. Obama they will need a good quality candidate and must get there without giving the competition too much free ammunition in the process. In other words, they must campaign for the nomination based on why they are the best not why the others are flawed. If only they do that it will be so refreshing that the American public of all stripes may find the candidate appealing.

That said, it is unlikely that they will and it is likely that they may shoot themselves in the foot. Unseating an incumbent President is never easy but the tide is running in the right direction right now.

The economy is stalled and may slip back into recession. Never good for the ruling party. Unemployment remains stubbornly above 9%. Never good for the ruling party. Housing and construction still in a major funk. Never good for the ruling party. Lots of other headline news makers not looking so good. Never good for the ruling party. If the Republicans blow this, they may not get a better opportunity in my lifetime.

Expect talk but no real action from either party on taxes. As much as we hate it, we will need to generate more revenues (temporary tax increases across the board) in the short term to help bridge the gap as we continue to trim fat and waste from the bloated budget. Much of the reduction will come in the future, some of the softening of the economic decent is needed in the present tense to keep the economy from regressing into recession. But nothing meaningful is likely to happen until 2013, after the election so expect that the second half of 2011 is likely to be at near zero growth…or worse.

AT&T’s attempt to take over T-mobile was nixed by the FTC. I don’t think that is a done deal just yet but I do think that it was a good sign.

Hewlett-Packard (HP) is abandoning its interest in PC’s much like IBM did a few years ago. They have recognized that PC’s are a commodity like gasoline. The public really doesn’t care whose name is on it. They care about what it can do and price. As a result gross margins have been squeezed to the point that it has become very difficult to justify remaining in that business. HP management saw it and thought about how much more profitable they could be without the PC albatross. Then they took the obvious decision.

2012 may just be more of the same. Europe will either get its act together or fall apart. Either one would create a degree of certainty where none exists. We will continue to be directionless while campaigning for the November 2012 election. Leadership is needed but I fear none will be forth coming. This will add yet another year to the economic malaise that has gripped us since December 1999 when the Dow Jones Industrial Average was $11452.86. The Dow closed Friday 9/2/2011 at $11240.26. That is 10 years and 8 months to gain nothing. Glad I wasn’t invested in a DOW tracking fund all these years. Are we in for another extended period of this malaise? Has USA world leadership really begun its decent into the annals of history. As Lincoln said at Gettysburg, “our fathers brought forth, upon this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived, and so dedicated, can long endure.” “It is for us, the living, rather to be dedicated here to the unfinished work which they have, thus far, so nobly carried on. It is rather for us to be here dedicated to the great task remaining before us - that from these honored dead we take increased devotion to that cause for which they here gave the last full measure of devotion - that we here highly resolve that these dead shall not have died in vain; that this nation shall have a new birth of freedom; and that this government of the people, by the people, for the people, shall not perish from the earth.”

As Mr. Lincoln said, we are still engaged in a civil war, a struggle to define what this country stands for and what it will be in the future. Fortunately, we no longer use guns and waste young lives as the tools of struggle. We use words and laws and regulations to achieve the goals of each side in the struggle (and there are many more than two sides now).

Each time we go to the polls to vote (or fail to), we are engaging in our own battle in this great civil experiment and we are helping to determine whether this nation, so conceived, and so dedicated, can long endure.

Remember that no other country has ever come to be as this one has and no other country has achieved the greatness that this one has without the subrogation of others. Rome, Greece, the Ottoman Empire all invaded other countries, enslaved their peoples and pillaged their natural resources for their own betterment. Even our allies the French, British and Spanish along with others of Europe, conquered and pillaged foreign lands creating empires. The results are seen close by in Haiti where the French raped the country of its natural resources and then gave them their “freedom” to avoid cleaning up the social mess they created. The citizens of Haiti are still struggling in poverty.

We are unique and we need to understand that our survival is not a given. We must regain our world leadership position by leading the world economy out of this recession. We can do it but all parties must use sound business judgment and work together without letting rigid ideology stop the progress. On the other hand, the stupidity of the past pushing costs off onto future generations has to stop. We must live within our means as a country just as we must as citizens. Debt is fine when it is used to support growth and gets paid back some day…soon. Part of each dollar of surplus (and we have had them as recently as the 1990’s) should be used to assure future growth just as businesses do. Part should be used to pay down old debt and part saved. When that policy is followed, we have sustainable growth that provides the dollars needed to provide for increased services. We can then pay for the health care we want all citizens to have. We can then pay for a strong national defense. But until then, we must get the spending down to the level that income supports and the income up to where spending needs to be to fulfill our societies requirements.