Wednesday, November 26, 2008

The Bailout's Cost in Perspective

Rush Limbaugh's site has a great piece putting the cost of the bailout against other great government expenditures over the years. It's definitely worth a look.

The point of the article is that today's bailout has been calculated only up to $4.6 trillion and has already cost more than all of the following government expenditures combined: The Marshall Plan. The Louisiana Purchase. The race to the moon. The S&L crisis. The Korean War. The New Deal. The invasion of Iraq. The Vietnam War. And NASA.

The new debt the government is taking on is eventually going to be crushing. We don't even have the funds to pay interest on the debt. The Russians are predicting a breakup of the union. The Chinese keep buying the debt to hold as leverage. Obama better be the miracle worker because things can't continue to spiral the way they are now. Everyone running to Washington with their hands out and there's not money to go around. Businesses need to go under and it will be a rough go. But by continuing to try to save everyone, the government is going to extend the pain for generations to come. Do you really trust the government to save the economy? I wouldn't...only free enterprise can right this ship.

Tuesday, November 25, 2008

Goodbye Fiscal Responsibility

Seven hundred billion dollars here, five hundred billion dollars there...what makes the difference? It's all just numbers, right? Well, sure...until someone has to pay for all those numbers.

The Obama economic team has already pledged to pick up where the Bush economic team left off and continue to throw more and more federal money at the current financial crisis. Obama today spoke of an economic rescue in the $500 billion range. Of course, this bailout would be offset by his promise "to scour our federal budget, line-by-line, and make meaningful cuts and sacrifices as well." Where do you think those cuts will be? Entitlement programs? Ha! More like national security cuts...right? Sure.

Nancy Pelosi said Bush should agree to a stimulus plan to "provide a down payment on new job-creating infrastructure investments, help states avoid deep cuts to health care and other essential services, and provide nutrition assistance to struggling families." So with Obama promising to make meaningful cuts, Pelosi is wanting to fund state programs that are in danger and create new federal assistance programs with "stimulus" money.

One of my favorite aspects of the Obama plan is the creation of jobs. Obama has embraced calls for a "green jobs" program that invests as much as $100 billion in projects to slash harmful emissions. This could include projects such as retrofitting buildings to make them more energy-efficient, upgrading the electrical grid and improving mass transit. Sure, the cut of emissions is far more important than maintaining the current transportation infrastructure, like bridges and roads.

This all sounds pretty troubling to me. Only time will tell but I don't look for an economic turnaround any time soon with this type of plan in place.

Monday, November 24, 2008

Random Nonsense

  • Before John Veasey can say it, I paid $1.69 per gallon for gas in Lexington. It was kinda cool to fill up the vehicle for like $20.00. I don't anticipate it lasting too long.
  • ESPN radio is difficult to find when you want it. I just wanted to hear the OU / TTU game coming back from Louisville. I found an ESPN station out of Chicago but they weren't airing the game but at least they gave updates. After hearing a few updates, I was glad I couldn't find the game.
  • Notre Dame is horrible. I can't believe they won't fire Jabba the Weis this season. They lost to Syracuse. And yet bowls are still going to be fighting it out to take them with their bowl eligible 6-6 record. It's really sad.
  • For all Mountaineer fans: Michigan's season is over. It's time to move on from the Rich Rodriguez hatred. One full year is enough time to hold the grudge. They went 3-9 and suffered a lot. He'll probably turn it around within 2 more years and start winning and everyone should just ignore it. Instead, focus on the 7-3 WVU team that started the season #8 but blew games to Colorado and Cincinnati and barely beat some other teams that we should have stomped.
  • The United States government continues to throw money at the current economic downturn. Let's see, the government throws money to fix education...not so good. The government throws money to fix the poor...not so good. The government throws money at health care...not so good. Do you see a trend? How could this bailout go wrong when it's run by these geniuses?

I think that's about it for the moment. I'm sure there's more but I gotta get back to work...there's a government relying on my tax dollars.

Sunday, November 23, 2008

To Louisville and Back

Good ol' Louisville. Last time I was there in 2006, it was a night game and Louisville was on their way to winning the Big East and the Orange Bowl. Two years later, they are barely hanging onto hopes for 6-6 and would be happy to make any bowl. Two years ago, fans flocked to and filled Papa Johns Stadium in an impressive blackout. Now, they were lucky to have over half the fans show up by kickoff and those fans left by 3 minutes left in the third quarter. Here's my Louisville story for 2008:

Left for Louisville on Friday afternoon and it's a pretty long haul really. Following the speed limits, which I tend to do, led to about 6-hours on the road. The GPS took us right to the hotel which was thankfully placed less than a half-mile from Papa Johns Stadium. After getting checked in, we tracked down a local Wal-Mart to get a few things and decided to grab some dinner. Since it was after midnight, the pickings were slim. Unfortunately there was a White Castle nearby and how do you pass that up? Seriously, I wish I knew how because White Castle is disgusting. Took it back to the hotel and ate 2 the time I took a bite of the third, I was sure I was going to throw up. That was the end of dinner.

The night went by pretty quick and headed over to the stadium about 10:30. Since the hotel was close, they said we could leave the vehicle there and walk. It wasn't too bad but it was cold out. I'd say around 22-degrees at 10:30, so it was brisk walk. There were very few tailgaters out and about on this particular Saturday morning. And those few that dared to tailgate for Louisville were somewhat questionable. From one bonfire we could hear great tailgating music, such as "Forever and Ever, Amen" by Randy Travis. Not usually considered a tailgating song...but, hey, whatever gets a Louisville fan fired up.

Since there was an hour to kill before kickoff, we decided to take a brief sojourn around Papa Johns Stadium to look for other activities that had to exist. Other than an old, retired train that was turned into a sports bar and two blow-up games, there was nothing. We attempted to enter the Trager Center, only to be rebuffed by security. A similar fate befell us at the Johnny Unitas Football Museum. We did enter the upper area of the Johnny Unitas area and viewed the warmup facilities before being asked to vacate the premises. Apparently only recruits were allowed in the Johnny Unitas complex and the West Virginia apparel didn't quite mesh with the recruiting requirements.

Since it appeared we had exhausted all pre-game activities at Papa Johns Stadium (NOTE: none), we decided to venture into the stadium. Imagine the surprise when we saw that they sell Papa Johns pizza. We arrived to our seats just in time to watch a little scuffle between Louisville players and WVU players on the Louisville Cardinal at midfield. Apparently Louisville players don't take too kindly to people stomping on the cardinal. According to post-game scuttle, no team has (or had) ever beaten Louisville after taking out any agression on the cardinal. Despite having his face stomped by the Mountaineer football team, the Louisville mascot still went to the fifty and got his groove on.

Since it was Louisville's final home game, they introduced the seniors and the Louisville band performed their pre-game show. I'm not saying it was bad...but they're definitely no "Pride of West Virginia." Louisville entered to a few fireworks and stuff and was applauded heartily by the half-full stadium. Fans eventually showed up but it never approached full. To fire up the Mountaineer fans, none other than the governor was on hand. Somehow watching Joe Manchin attempt to lead the Mountaineers onto the field had the opposite effect on me. Regardless, he was there and Bill Stewart was there too.

The first half went by relatively quickly. We made friends with the ladies sitting in front of us. One got to meet Pat White's father before kickoff and was thrilled. She was also on TV...she received multiple phone calls informing her of this. It was her first football game of the season and it appeared she was enjoying it. The only true excitement of the first half was when WVU was stuffed on third and fourth down at the one. It appeared to me they scored on third down and they were short on fourth...but I was on the opposite side and had to rely on replay, just like the officials. Let me get this out of the way now: Louisville's scoreboard is superior to WVU's. So, we head into the lockerroom with a 7-7 tie and a lot of disgruntled Mountaineer fans.

Let me take this halftime to say that Louisville's PA people love rap music. Young Nitt, Code Red and B Simms, among others. I could go the rest of my life without hearing "Clic Clac, here come the red and black." Don't believe me, check it out for yourself. Clic clac, here come the red and black...clic clac, here come the red and black, repeat ad nauseum. Trust me, the Cardinals repeat this song nonstop throughout every break. R U READY???

Second half goes much better than the first. After a nice scoring drive and a couple turnovers by Louisville, it becomes obvious that WVU probably has the game well in hand. Bill Stewart tries his best to keep Louisville in the game with as many odd calls as possible but Pat White is determined to win and Hunter Cantwell can't seem to get the ball over the defensive line. By the end of the third quarter, the Cardinal fans have given up and leave Papa Johns Stadium and head back to listen to more Randy Travis. Not sure if they're leaving the game because they're losing or because they can't handle anymore B Simms.

At this point, my entertainment is coming from the group sitting in front of us, which includes Newman from Seinfeld:

And this guy who does enjoy Young Nitt and the crew:

35-21, the game drew to a close. The Louisville fans were cordial as we made our way back to the Ramada to retrieve the vehicle. Traffic patterns to depart the stadium area were poor and we sat in traffic for a brief time. Listening to local coverage of the game, fans were more upset with Kragthorpe than with Louisville's play. The commentators and fans agreed that it was a shame that Louisville didn't play with more intensity considering WVU stomped the cardinal. They also agreed that Pat White is classless with his taunting. And there was plenty of taunting going on. They're happy to see him move on. I'm not.

All in all, a successful venture down into the heart of Kentucky. A win is a win...still not sure about some of the coaching decision but you can't argue against a victory. Unfortunately Pittsburgh couldn't do anything with Cincinnati last night so it appears Cincy is probably going to win the Big East and get the BCS bowl. WVU will probably end up in the Car Care Bowl in Charlotte. I'm just debating on whether I'm going to end up there as well. That pretty much covers the was fun and, if Coach Stewart doesn't drive us into the ground before, I may go back in 2010.

Thursday, November 20, 2008

Down, down, down

The stock market has fallen to a 5-year low and everyone is tightening their belts, just as I predicted. This has led to a major contraction of available money in the system for businesses and consumers. Credit is shrinking and the economy is joining in the contraction. As a result, deflation has taken hold. Wholesale consumer prices fell for the first time since 1982 and the contraction could continue into next year.

Only now, 2-3 months after the Fed should have seen the risks of deflation, do they acknowledge that deflation should be a concern. The obvious risks of deflation could have been anticipated months ago despite the passing of the government bailout. I'm not sure why Bernake and company didn't begin to develop a plan to stave off deflationary pressures at that point. It may be too late to stop deflation at this point.

Deflation tends to feed upon itself. A credit provider does not want to give a consumer credit for a product that is going to be worth less a month from now than it is now. And a consumer doesn't want to buy a product that is going to be less a month from now than it is now. Therefore, consumers stop spending and credit begins to dry up. As credit dries up and consumers stop spending, the economy continues to contract. And a contracting economy leads to increased deflation.

The next two months will set the trend. If the Fed doesn't immediately cut interest rates again and start spending the bailout money and encourage additional lending, deflation will take hold and it will be a long 2009. January 20, 2009 is too far away. The matters are pressing now and won't wait that long. If Congress and the Fed sit on the sideline much longer, the damage will be irreversible. And long lasting.

Monday, November 17, 2008

The Great American Bailout

As General Motors sits back and waits for the government to bail them out from years and years of mismanagement, I'm wondering what it must be like for other companies around the country that have worked hard and effectively managed to maintain profitability, even during difficult times. Companies that are going under are being aided by the federal government and are being given extraordinary breaks while successful companies have been guaranteed additional taxes and fees by the incoming administration.

Where's the incentive to be successful in today's business climate? A successful company is still having problems securing loans and the government won't encourage additional investment in companies that aren't billions upon billions of dollars in debt. And why should a company continue to excel when the government has promised to steal more of its money? It's really a remarkable series of events to watch unfold. Fidel Castro must be proud.

Friday, November 14, 2008

The Perfect Storm

I wasn't feeling well at all yesterday and ended up staying home taking a very rare sick day. Over the course of that day off, I watched a program called "Black Blizzard," which recounted the days of the Dust Bowl in the prairie lands of America during the 1930's. Since the pain of the Dust Bowl occurred in the middle of the Great Depression, the farmers of the Great Plains were largely ignored as the country instead focused on the economic woes it faced.

Two things struck me about the Dust Bowl. The first was that environmentalists don't give our planet nearly the credit it deserves. Farmers in the midwest had long abused the earth and the earth took it's revenge and fixed the problem. We live on a very resilient planet. The second was that the Dust Bowl occurred at perhaps the worst possible time for America. Had the earth struck it's revenge a decade earlier, the burgeoning American economy could have helped these poor farmers. Perhaps later, say in the middle of WWII would have been just as devastating but there would have been more efforts to save these people stuck in the middle of a natural disaster.

Despite the pain and suffering for nearly a decade, the Dust Bowl eventually subsided and the American farmer learned from the mistakes it had made previous to 1930 and has never experienced a problem on a similar scale since. Much the same can be said about the economy in a broad sense. While faltering at times, the United States has secured that the economy would not collapse since these dark days of the 1930s. That is until now.

Perhaps the perfect storm is brewing around the United States again. A collapse in the housing market, a serious contraction of available dollars, a crushing debt and a diminishing job sector are swirling around the United States. And with an incoming president promising additional regulation and increased taxes, you wonder whether the storm will claim more victims. Only time will tell how history will look at this time in the United States. I hope the new president can find a way to fix this broken system. FDR is given credit for fixing the Dust Bowl but it truly wasn't fixed until the rains returned. I just don't have faith that Obama can make it rain.

Monday, November 10, 2008

The Gosh Darn Mountaineers

West Virginia certainly showd their offensive the last 71-seconds of a game that was as important as any they have played this season. The total lack of offense for the first 58 minutes was totally inexcusable. Every play was predictable and, once again, the offense relied solely on the ability of Pat White to make plays. Unfortunately for WVU, White made as many poor decisions as good ones in a game that could cost WVU a shot at another Big East title. Just a few observations, that are obvious:
  • The special teams at West Virginia is ridiculous. The opening kickoff lost the Mountaineers the game. We are 9 games into the season and the kickoff coverage has not improved one iota. No team in their right mind would ever kneel a ball in the endzone against this team. And McAfee's leg can't get it through the endzone any longer. We're getting close to the point where it might be better just to kick out of bounds and give them the ball at the 40 considering:
  • The defense is playing amazing. The big question at the beginning of the season was whether the offense would be able to score enough points to overcome the poor defense. Well, guess what, it's the other way around. No matter how well the defense plays, it can't overcome the ineptitude of the offense. The defense gave up 260 total yards but were killed by a special teams touchdown and two offensive turnovers.
  • We're 9 games into the season and WVU still cannot figure out a way to pick up yards in short yardage situations. Third-and-one? Might as well just punt and get it over with. And despite numerous failures, the coaches continue to call the same plays to try to pick up the yard. Here's an idea: try something else. Play-action pass? Bootleg? Try something else.
  • The crowd booed again. They are booing the coaches, not the players. And I don't blame them. Fans say Don Nehlen was predictable. Well, guess what, Dandy Don might as well be back. There is no creativity on offense at all. At least Cincinnati tried a few different things.
  • For some reason the crowd cheered the decision of the Mountaineer Marching Band to play Brooks & Dunn's "Boot Scootin' Boogie". Oh, the humanity. And why is it that people like "Cotton Eye Joe"? It's horrible.

A week off and then it's down to Louisville. I think I'll go down and see the Cardinals live and in person on the 22nd. Should be an easy win...but when you don't score any points, nothing is easy. With a loss in conference play, there's nothing for this team to lose now so they should come out and play looser. This is the most uptight team ever. And will eventually go down with the 1998 team as most underachieving if things don't change in a hurry. A big hurry.

Thursday, November 06, 2008

Anthrax Scare at Michigan

Michigan football practice was delayed nearly two hours late this morning after a player reported finding an unknown white powdery substance on the practice field. Head coach Rich Rodriguez immediately suspended practice while police and federal agents were called to investigate. After a complete analysis, FBI forensic experts determined that the white substance, unknown to the players, was the goal line. Practice was resumed this afternoon after special agents decided the team was unlikely to encounter the substance again.

Wednesday, November 05, 2008

A New President

This morning we wake up after having democratically elected the 44th President of the United States, Barack Obama. In a campaign that seems to have been dragging on forever, it was a relief for this showdown to finally be over. And while I don't necessarily like the choice that was made, it was a choice by the American voters. Now we must move on. But, first, just a few observations:
  1. This wasn't the complete landslide that had been predicted. Considering the internal strife in the Republican party, Democrats should have rolled over the GOP nationwide. Instead, Obama wins the national vote by 6-points and Democrats will fall short of the 60-seats they wished for in the Senate.
  2. There is a major divide between "rural" areas and "urban" areas in the same state. Look at the country breakdown of Florida, Ohio, Pennsylvania, etc., and you will see that a majority of the state goes red but the few urban counties, which obviously hold more people, go blue. Columbus, Cincinnati and Cleveland flipped Ohio. Richmond, Arlington and Norfolk flipped Virginia. It's amazing to look at the state maps and see how red they are by land mass but blue by population.
  3. How can Obama possibly meet the lofty expectations that are on his shoulders? He is expected to unite the country and the world. World leaders from every sector of this planet are looking towards him to end strife. It is not possible. So, will his agenda or his popularity decide his future actions?
  4. Despite the full court press applied to Shelly Capito in District 2, she easily defeated her opponent. You have to think Capito could provide quite a race for the Senate when Byrd if no longer available to run.

There's a lot more I could say about this election but I'm sure it will be hashed over for months and I'll leave it to those people. My closing words on it are that I hope Obama does unite the country and succeeds in opening the American dream to everyone. That doesn't mean the distribution of wealth or more government assistance, that means removing the shackles of a government that punishes success and entrepreneurship. If Obama wants this country to prosper, he will encourage others to follow his lead and work hard and prosper and not wait for someone else to show you the way. His rhetoric doesn't show he will do this...but there's always the audacity of hope.

Saturday, November 01, 2008

North Marion Wins!!

I predicted it on Thursday and the long nightmare of North Marion has finally drawn to a close as they defeat the Elkins Tigers 36-35. Some people thought I might have been making fun of North Marion's misery but that is not the case at all. This is a high school that had been known for producing good football teams. They had won a state championship in football as recently as 1997. And to see them in the midst of a 28-game losing streak was somewhat painful.

The victory gives Coach Garry White his 99th career win. And maybe it elevates the program back to where it once stood, as kings of Marion County football. Of course, that may be a stretch. It was one win. Over Elkins. But it's a start and everyone must start somewhere. Their next game is against, cough, it's kinda unlikely they'll get a winning streak going this year. But at least they reset the losing streak counter back to zero for this week. Congratulations Huskies. Good win.