Alan Greenspan summed it up best. It's not whether or not the Stimulus effects short term GPD, it's whether it "primes the pump" for private demand.

Pretty sure you could take a trillion dollars and invest it in bubblegum factories and it'd have some sort of impact. But will the stimulus produce long standing results?

I'm doubtful.

I've mentioned it before, but I'm of the humble opinion that the wealth that was "lost" never really existed in the first place. The debt we're now faced with has to be met in one of three likely ways. 1) Inflation, 2) High taxes (at the expense of growth) or 3) defaulting (god forbid). If we want to achieve long term success, we have to get out of this consumer driven economy and get back to producing things. Unless we can come up with something to sell to folks outside our borders and not just to ourselves, we'll be faced with the same pyramid scheme economy. Subsidizing this system by way of the federal government just pushes off whatever needs to get done.

My biggest beef with the stimulus package (and I have many) is that it became a political dumping ground for party agenda. It's not completely without it's merits. We're putting money into R&D on energy, which is good, and we are spending money on improving infrastructure, which is also good (help increase efficiency via better transportation/communication/shipping/whatever). We have a decent amount of tax cuts to help give people immediate relief. Unfortunately, with all the other nonsense, the important things end up getting less than they probably should.

An example. I'm a big fan of infrastructure spending. Specifically right now in our country, I see the opportunity for a serious investment into mass transit. We had a chance to do something big and bold, perhaps a national light rail system, but instead we constructed legislation that will lend itself not just to fraud and misuse, but piecemeal initiatives state by state that run the risk of having no rhyme or reason at all. The chances of a nation wide light rail now seem even smaller. And even if we can standardize on an approach within state legislatures or an approach is dictated by the Feds, the stimulus bill appropriates only a tiny fraction of funds to transportation itself.

The other debatable aspects to this bill are largely matters of principal. President Obama's on record in 1998 as disagreeing with Clinton's 1996 welfare reform, something Clinton himself touts as a big success of his presidency. This legislation rolled it back. States will now be rewarded for adding people to its welfare payroll, not the other way around. The stimulus bill went on to stick its hands into health care and gun control as well. What on earth these things have to do with "priming the pumps of private demand," as Greenspan articulated, is anyone's guess.

That is, anyone's guess just as soon as they finish reading the dang thing. (Oooohhhh. AmIright?!)

The other, more gloomy, concern is whether or not we'll have enough credit left in the treasury to handle whatever geopolitical fallout comes from the "financial crisis". Iceland's government already fell, there are rumors of Mexico's being unstable and there are protests and uprisings taken place on the other side of the Atlantic. If this truly is a comparable event to the Great Depression, as our leaders love to suggest, we may want to think a couple steps ahead on this one.. Just.. you know.. saying.

I do have to say that I've enjoyed it all. It's history in the making. I'm also happy to see the GOP find it's conservative roots again. Whether or not they mean it this time, we'll have to wait and see. So far Michael Steele seems like a breath of fresh air.

I'm also humored by the amount of folks on the opposite side of the aisle tossing terms like "obstructionists" around. I saw one liberal professor on TV attacking a conservative talking head, asking where this outrage was while the patriot act was being debated. A fair point, but the real question is where was the Democrats outrage? For all the talk they do about the war and the patriot act, you'd assume that they voted against them. The job of the minority party is to balance out the majority. To slow down waves of emotion. To provide a counter argument. To, quite frankly, obstruct. There's a time and a place for bipartisanship but this, as well as the patriot act and the war votes, was simply not one of them. There's simply too much on the line. If the majority wants to pass sweeping legislation, it doesn't do much harm to make them earn it. If nothing else, we likely ended up with a 'better' bill because of it.

So there I was. A lonely decepticon in a sea of obamabots... ;)

Here's the good, the bad, and the ugly from my experiences during the 2009 Presidential Inauguration (from a somewhat political perspective this time, not a "omfg i saw the beastie boys!" perspective. That'll come later once I get things edited/uploaded/etc)

The Good

It's hard to explain the emotion on folks faces, specifically the older generation of blacks who made the pilgrimage to D.C. The civil rights storyline is obvious and certainly isn't a surprise to any one. However, seeing it face to face in such volume was incredibly powerful and largely the reason I wanted to attend in the first place.

The closest comparison I can think of would be when the WWII memorial first opened. It's a look of pride, sadness, hope, struggle, relief, fear, joy all wrapped up into one. I had a friend point out after my last post that he was sure there was pride on other peoples faces as well. No doubt, but it very clearly wasn't the same. Nor should it have been. The t-shirts with "the dream has become reality" summarize it probably the best way possible. I saw a man, probably pushing 80, leaning over in tears in the lobby of our hotel. That's some real stuff and it was the type of thing that was all over the city.

These folks are members of a time period that many of us in younger generations cannot fully relate. I saw folks trying to pretend that they do, a couple of trendy white kids with a "We have overcome" sign for instance. But there's simply no possible way that they have any true sense of what it all means. Segregation, lynchings, race riots -- all part of a chapter in our history books or maybe a part of family lore. The battles of their generation, while not totally resolved, are things that the majority have never had to actually live with. It was an incredibly moving experience and is an incredibly beneficial thing for this country as a whole. I hope it serves as the start of another chapter focused on healing. We shall see.

The Bad

You'll often hear members of either party talk about the other side of the aisle as if they're some sort of homogeneous group that all walk, talk and think the same. Of course that's not the case. Each party consists of a bunch of mini-factions that unite under a common view of what the role of government should be. Within the Democrat party (ic purposely left off. Google it. All in fun.), there's the aging lady who looks like the 60s left her behind. She's pissed off about seemingly everything and views "Republicans" as some sort of evil conspiracy to take away her right for whatever it is she's so damn angry about (I've never been 100% sure what it was, but I'm guessing something to do with soy products...). I've seen this persona plenty over the years (cough-pelosi-cough), we all have, but man oh man, did I hear some truly venomous things about Republicans.

My favorite part wasn't so much the seemingly bottomless reserves of hate and anger that they carry around, but the fact that many of them truly believe that "republicans are extinct". It's as if they've never read a single page of American history. The ebb & flow of our political system has forced compromises that have created the most self correcting, most self aware, most successful self ruling form of government in the history of our world. The rise of one party and the retreat of another represents nothing more than the cyclical political tides.

Not to mention that McCain lacked the proverbial "coat tails" that would have helped the party defend congressional seats. If Pelosi and her ilk aren't careful, the push back from the conservatives in this country will be fierce (many of whom kept their checkbooks packed away this past cycle).

And again, this wouldn't be something new. In fact, that tends to be the course of things. If you've followed Obama long enough, you'd know that the "change" he's written about is exactly that sort of thing. The desire to move away from politics as usual and towards politics that are prudent. (IMO, it wasn't until the campaign that it seemed to become something so incredibly vague that everyone attached their own personal meaning to it. For some its the war, for some its housing, or maybe it's abortion or health care or gay rights or whatever. "Change" became personally defined making it that much more powerful of a slogan).

For all the talk about brushing aside petty politics, I've yet to see Obama chastise the nonsense taking place over in Congress (the changing of rules to limit the power of the minority, etc. The same rules the Republicans removed to help the minority party back in the 90s.). It's early enough in his Presidency to let it slide for now, but left unchecked, the bounce back from the conservatives will happen sooner rather than later and they'll likely work to repeat the trend all over again.

I'd suspect it was a lot of these overly-angry folks who were leading the "hey hey goodbye" sports style chanting towards President Bush during the ceremony. You don't need to like the guy, but it'd be nice if we could all respect the system of government that put him in power. The swearing in ceremony simply isn't the place for that sort of thing. Stick to throwing shoes on the lawn.

The Ugly

What a horrible way to respond to the various calls of unification by our new President than to have a benediction praying that white people stop being so damn evil. Seriously, the more I think about that last line ("that the white accept what is right."), the more annoyed I am over it. I'm trying to remind myself that this was a person with racial memories far more detailed than my own, but talk about being 100% inappropriate for the occasion.

There's also this growing mentality that to disagree with Obama means you're a "cynic". I use quotes because I think their definition is a bit different than the popular one and certainly different from my own. I see a cynic as nothing more than a disappointed idealist, not an "obstructionist" and not someone who simply disagrees on the "how's."

The role of the "loyal opposition" in this country is a necessary one. We're staring down unprecedented times. There is no blue print or manual stating what the right course of action will be. Naturally and logically, that suggests that much of what will be attempted will be trial and error. To suggest that those who disagree with policy or those that view the socialization of certain aspects of our lives in the midst of all of these current threats, are to ignored because the "ground has shifted from underneath them", is simply irresponsible. It serves this country little purpose. There is significant danger in allowing one party to assume so much control. It's a lesson we find ourselves somehow forced to learn repeatedly. An executive branch with extremely high approval ratings and a Congress willing to fall in line mixed with the inability for open discourse and debate is surely a recipe for disaster. After the last 8 years, I'd hope the other side of the aisle would be able to recognize and purposely avoid this sort of situation. Alas, here we are yet again. The Democrats are looking to travel down the same path as the Republicans, who were traveling down the same path as the Democrats, who were traveling down... You get the point. For all the talk going around, I was hoping we might see it mellow out for a little while so we can fix the things that we all agree on.

The final thing I couldn't help but notice is the amazing amounts of patriotism shown by people who I'd suspect were making threats to move to Canada four short years ago. Look up the definition of "allegiance" next time you're thinking about saying the pledge. If your patriotism is tied to a temporary leader it's 100% false. Country First. ;)

All signs seem to point to us being in a period of that which can not be spoken. Time for another economics rant ;)

The funny thing about wealth is, in an overly simplistic explanation, it's kind of like water energy [note: yeah, yeah.. i was tired as heck when i wrote it] -- its not really created or destroyed. It moves. People often say that building roads and infrastructure creates a better economy, and often, they're 'correct' for that particular area. But that doesn't mean wealth was created. The taxes to pay for the project came from other consumers who would have spent the money on other things -- the jobs created by the new infrastructure hurt the unseen profits of someone else (and probably a few unseen jobs because of it). The money spent in that new area came from money elsewhere, and hurt the unseen profits of where ever else it would have been spent instead.

I'm sure there are caveats to it, but most of the wealth creation that people reference are simply cases of inflation or speculation, mixed with cheaper products available from better production methods. The middle class, for example, has way more now than it did 200 years ago. Are they richer? Or has the quality of life provided by what would have been considered luxury items simply become more affordable? Having air conditioning doesn't really mean your rich these days, does it? And remember, inflation's a bitch. A millionaire in Rockefeller's day would probably need 7m+ to maintain that title today.

Housing is such a pressing issue because its effects on consumer confidence is immediate. Tons of "wealth" was created on the books over the course of the housing boom. In a more liquid market, that wealth would simply evaporate (i.e., the tech stock boom). In housing, people are a whole lot more slow to sell and the numbers are a heck of a lot larger than individual stocks. No matter how you slice it, that wealth absolutely has to come off the books. Price reductions remove the wealth from the books, and so does inflation. Inflate the dollar through tax rebates and federally back buy outs. The overall purchasing power of consumers is lowered, some more than others depending on the region (the numbers don't have to be adjusted in all regions equally, after all), but housing prices stabilize because in real terms, they become fair market.

The traditional scape goat, the federal debt, is another thing that I find troubling. The way we as a country become "richer" is by taking in more money than we're sending out. If other countries are moving their wealth to our country, and we're not moving that wealth to anyone else, we end up with a bigger piece of the world's pie. Right now we're not only spending more money internally than we're collecting in taxes, causing us to take loans from China and pay them interest, we are also importing more than we're exporting. Wealth is leaving the country at a fairly fast pace. Now, you can borrow money if the money is being used to expand the economy (and thus bringing in more foreign wealth/etc, at that point, it's an investment).. But borrowing money in a stagnant economy and not selling enough to cover our purchases?

All the sudden we find ourselves in a situation with increasing inflation with little to no economic growth -- aka, stagflation. (shh!)

While it's not a good thing, it's not necessarily "omg the worst thing ever!!1" either (at least, over the long run). It's certainly not the doom and gloom that the media makes it out to be. You may have seen the headline yesterday of "The worst June since the Great Depression!". That's technically true, but it seems to imply that bad months are unheard of. They're not. It was simply the worst June, and things aren't nearly as bad as they were in the early part of this century. Regardless, where the doom and gloom theories fall flat is that they make the assumption that people will refuse to change habits in the face of economic pressure. That, of course, is bullshit. We're the most adaptable creatures on the planet. Something tells me we'll drive smaller cars if we really, absolutely, have to.

We're going to see a ton of innovation come out of this economy. We're going to see housing stabilize and consumer confidence rebuild (stable prices at the expense of reduced purchasing power is still probably a good thing, given the circumstances). We're going to see alternative fuels and synthetic gasoline start pushing their way to the forefront like never before (it looks like OPEC can't get in the way this time, suckers). We're going to see out of work engineers put their heads together and create truly amazing technology and all sorts of derivative applications of that technology. This country is full of talented folks, we just sometimes have to be pushed a little bit. Things are ugly right now, but adversity may be the kick in the pants this country needs.

For me, all of this is fascinating. I love trying to figure this out and learning. If anyone thinks I'm wrong on any of this, share in the comments below, because, well.. let's just say it happens from time to time ;)

I've been thinking a lot lately on various investments that would be able to handle the pending recession. There are the obvious answers (gold, basic materials, etc.), but I'm trying to round things out a bit.

It seems to me that when money is tight, people certainly cut back their spending, but the need for entertainment and pleasantry still exists. Cheap entertainment and thrills seem like a decent bet. Movies used to fall into this category I'd think, but that's just not the case anymore. I wonder if Netflix/blockbuster and other rental outlets would fit? Video games actually work out to be cheaper than most forms of entertainment, but they have such a high barrier to entry. Gamestop might be an answer to that, being that they sell a great deal of pre-owned (cheaper) games.

My sister pointed out makeup companies. That might sound a little funny, but truthfully if a $10 thing of lip gloss makes someone feel better, then it might match up perfectly. Never under estimate the feel good powers of vanity. That would suggest who, Proctor & Gamble?

Costco, BJ's, Walmart, Target, Dollar Tree, Big Lots -- big box stores and discount chains are a likely candidate. I started wondering about home depot. Normally, I'd say probably not, but given that much of this is caused by housing, maybe. People aren't going to be able to sell like they used to and will probably be planning on staying around a little longer. There might be a decent amount of home improvement going on, it's just whether or not that amount of home improvement is greater than the home improvement that was taking place during the housing boom. Probably not, but might be worth keeping an eye on.

Vacations are likely to be cut back on as well, but that doesn't mean families still won't try to go places and it doesn't mean that business will stop sending folks to different cities. Cheap destinations, discount travel outlets, discount airlines and discount hotel chains might be worth looking into (I think I'll pass on Spirit, though ;). When Kat and I were visiting family up in Ohio, we went to an indoor water park. I remember it as being a bit more pricey than I would have suspected, but I wouldn't be surprised if there were cheaper alternatives. It wasn't a water park like oh-my-god-a-water-park!, but more of an indoor pool with a bunch of neat slides attached to a hotel/destination type of place.

I've already been researching and following along with the alternative fuels world. I think given our economic situation, national politics and the general pulse of things, alternative energy will become even bigger in all this. A big part of our economic situation is oil. China isn't going to slow down their growth anytime soon, so oil demands aren't going to go down anytime soon. High oil creates higher inflation. The best way for us to reduce this added inflation may very well be alternative energy sources (combined with some clever Fed moves, of course). If the next president of the United States is a Democrat or one of the few Republicans pushing for massive energy reform, this sector will blow up.

Am I missing anything? Is my head in the right place or am I off base? I wasn't quite "investing age" during the last real recession we had, so I'm kinda basing this all off of logic. ;)

I've been watching the "fascinating" Iowa Caucus coverage. The Iowa Caucus is an event that comes before their nomination convention, and winning it carries no immediate delegates. Basically, everyone shows up to a public place, stands next to the fold out table of their favorite candidate, and raises their hand. It comes across as one step above a straw poll, just held at a much more crucial time. I guess its a little more formal than that, but.. I feel sorry for the people who had to work tonight and couldn't attend -- basically, they get no voice.

We sure do put a lot of stock into it though. It's seen as the ultimate spring board into the New Hampshire primary (the first actual primary).

To give you an idea of just how small the Iowa Caucus actually is -- the total state wide turnout is less than just the Republican turnout in Miami Dade County in '06. Or try this -- there have been more absentee ballots requested in the state of florida by Republicans already for '08, than the entire turn out of both parties in Iowa. (I use republican numbers just because that's what I have access to, serves as an illustration for both parties).

Here's where it gets even crazier -- over $50 million was spent in Iowa just on T.V. ads. Compare that to 2004, when $9 million was spent on TV ads in Iowa. Most of the campaigns have hundreds of people on the ground in Iowa. Hillary Clinton's camp said they had 5,000 people just to drive people to the polls (I'm sure they were volunteers, but.. just pointing out the amount of focus put into it).

So much attention, and so much money, for absolutely zero delegates, with New Hampshire right around the corner (the 8th?). Only one candidate rejected the notion of Iowa outright -- Rudy. He spent today campaigning in New Hampshire and Florida instead of Iowa. In years past, this would have been seen as completely crazy. This year the primaries are so close together, it's only a little crazy. If it works, will Iowa start losing importance? I mean, the entire thing seems incredibly silly. Why are we still doing this in 2008? Isn't it supposed to be the future?

Anyway, the biggest story of today is that a black man won an Iowa Caucus. He didn't just win. He spanked Clinton and Edwards. Iowa is a state thats something like 95% white. We're not a perfect nation, we have our share of problems, but it would seem to me that we're certainly making progress.

The next story is Huckabee. Huck was outspent 10:1 in Iowa by the Romney campaign. Romney has been on the ground for over a year in Iowa and has spent the most money there. Losing after that much effort seems like it speaks volumes. We'll see if voters in New Hampshire agree.

Speaking of Huckabee -- Anyone see Chris Wallace call Ed Rollins (Huck's chariman) out onto the carpet? Ed went on about how Huck didn't go negative and how that helped him win, then Chris asked him if the blog post on townhall.com was true and that they were planning on going negative in south carolina but making it look like they weren't (sneaky politician crap). Ed admitted that the blog post was true, and then man, I thought Ed's head was going to explode. Chris basically proved that Huck's campaign wasn't all that innocent in how they went about the whole pulling-the-negative-ad-but-we're-still-going-to-give-it-to-the-press-anyway thing. As far as politics go, thats about as good of TV as it gets. I'm sure a dozen people will post it on YouTube tomorrow.

UPDATE: That was quick.

Digital Music
Some of you may know that I'm a fan of Stephen Wolfram. Every since "A New Kind of Science" was published, I've used "rulethirty" on many of the various forums I'm on, in IRC, etc. (which I thought was fairly unique until I just google searched it and find some creepy looking dude using it on a porn network... fantastic..) When I was young, we had a copy of Mathematica. Even though I didn't understand much of its power at the time, it still was a pretty fascinating piece of software. I still don't fully comprehend its power, of course.. but.. I can appreciate it ;)

Anyway.. Marc Andreessen posted something on Stephen Wolfram talking about starting companies. It's a great read, but more interesting was the link at the end to this. Behold, the power of math.

Orlando Magic
The magic are looking good. I know, I know.. "Fool me once.." But for real, we're looking like we got us a squad down here in Orlando. Over the off season, it was really tough to see how it was all going to come together. The billy d thing, the paying rashard 1.4 billion thing, etc. So far so good, and I think SVG was the right man for the coaching position after all.

Billy D was the good looking girl, while SVG is the girl who's good at cooking and cleaning. You just have to decide what you're looking for. Magic fans have been hungry long enough. Cook us a championship Stan!

Okay, okay.. I'll stop.

Kevin Smith
Robbed, as all non-bcs conference athletes usually are, from the doak walker award. 24k told Florida Today that he was planning on coming back for his senior season though, so there's always next year.

We have a more favorable schedule, we're only losing 18 seniors, we have some great talent coming out of of their redshirts, and Conference USA will be just as awful as it was this year. I smell an outside chance of a bcs busting opportunity, with kevin leading the way. Can't wait.

Thanksgiving
We're heading to Ohio this year to spend time with Kat's family. It'll be the second time I've been away for thanksgiving, and my first time in Ohio outside of spring/summer months. Gotta go figure out what box my jacket is in.... ;)

Happy thanksgiving!