Janus

Janus is the God of beginnings and endings after whom January is named. As January approaches and the old year winds down it seems appropriate to ponder our own endings and beginnings.

The end is thankfully near for the Bush Administration while, ever hopeful, the world awaits the begining of the Obama era. Seldom has there been such optimism surrounding an individual as that which surrounds Obama. This despite the early indications that rather than delivering change he is opting for continuity.

The end is at hand for 2008, yet the damage done to the markets over the past several decades appears likely to continue to arrive for the forseeable future. A recent prediction in the Wall Street Journal based on a mathmetical analysis of 27 million mortgages asserts that the 60 day deliquency rate for mortgages will almost double before the end of 2009, which has yet to begin.

The end appears to be beginning to arrive for the misadventure in Iraq, while the next surge is being launched into Afghanistan. The end of the war began on 9/11/01 appears illusive. Already this is the longest war in the history of America.

Each of us has our own endings and beginnings to ponder as 2008 withers and 2009 approaches. May your endings be happy ones and may your beginings bring you succdess as well as pleasure!

The Emperor Has No Clothes!

Butler Shaffer is a free man. He has also been called an anarchist. Butler Shaffer earns a living by teaching at a law school, where it is certain he is unlike few if any other law professors on the planet. Why, because he recognizes that the ultimate source of sovereign power is the individual, not the state.

In a recent essay published at Lew Rockwell's site, Butler Shaffer pointed out the intellectual and political bankruptcy of the Republican Party. According to Shaffer, the GOP, the "Grand Old Party," is now on a crusade to create "resistance to Obama's socialist agenda over the next four years," and to "stop Obama's plans to bring socialism to America."

Yet, Shaffer asks, where were the Republicans "when their GOP president, George W. Bush, was engaging in wars that put billions of dollars into the pockets of their corporate friends, and led the same president to state, to members of Congress, that he would declare martial law if they did not pass legislation bestowing hundreds of billions of dollars of largess upon Wall Street banking interests? Is the GOP so hopelessly bankrupt that some of its members must resort to a distinction without meaning that condemns state socialism while ignoring its own contributions to the state-sponsored economic destruction emanating from a Republican White House?" Shaffer asks is the Grand Old Party "henceforth to be known as the "Grasping Omnipotent Plutocracy?"

Shaffer points out the "fundamental distinction" between the mythical "free market" and the currently dominant "business system" is the "socializing the costs of doing business, while privatizing the profits." The Bailouts, projected to eventually cost in the neighborhood of $7.7 trillion are evidence. What makes a large financial institution or auto manufacturer for that matter worthy of a Bailout? This last question is being asked now that the Democrats are getting into the plunder and pillage mode to protect their power base funded in large measure by the precious union contracts that are bankrupting American car companies. What disqualifies individual home owners from a Bailout? Clearly the only meaningful distinction is membership in the Plutocracy.

And what pray tell does this really mean to each of us? Shaffer shows the math is simple. Each of us, every man, woman and child in the United States is now on the hook for about $25,000 in additional debt. Divide the cost of the bailout by the population of the country: $7,700,000,000,000 by 300,000,000 and you'll find The Rainmaker has understated the number a tad. Hopefully you enjoyed the party over the past few months.

The Rainmaker doesn't mean to quibble with Butler Shaffer, in fact we have no disagreement with him at all beyond the fact that he doesn't carry the analysis far enough.

In fact, Butler Shaffer is correct and the Republican Administration's actions are socializing risk while privatizing profit. But, Congressional Democrats have worked hand in glove with the Administration. Now, the same folks who designed and are executing the Bailout for the Bush Administration have been tapped by the incoming Democratic Administration to serve as our economic stewards for the at least the next four years. Clearly there is a consensus in Washington among the Republicrat and Demopublican factions of the Plutocracy to change nothing.

And, the hits just keep on coming. There will eventually be another $3 trillion of debt associated with the current wars. And, beginning in 2010 the Medicare system is cash flow negative, which is a $36.6 trillion problem. Then in 2017 Social Security goes under water at an unfunded cost of $7 trillion. There is also the nontrivial matter of unfunded pension liabilities guaranteed by the government and other miscellaneous obligations that add up to another $600 million. There is also the national debt accumulated over the past fifty or so years, which was about $8 trillion back in July. All those numbers on the entitlements and pensions are according to Fortune Magazine in their special report on the U.S. economy published November 24, 2003.

Thus the real financial fiasco is thought to total at least $55 trillion and, brace yourself, your share is in the neighborhood of $180,000 rather than the mere $25,000 suggested by Butler Shaffer for the fall follies in Washington. And, the politicians aren't done yet.

Neither are you. A few days ago we pointed out that government can't give anything to anyone without eventually taking it from someone else. That someone else is you, your children and your grandchildren. Where will you and each member of your family come up with that $180,000? Many of you will say tax the rich and of course to some degree that will happen, but the rich ways of gaming the system to limit their exposure. Others will say tax the corporations and that will happen. But ultimately those corporate taxes will be passed along to you as higher prices. One way or another the government is coming to your home and your family looking for that money.

The Rainmaker thanks Roger for the following thought provoking observation written by Scottish history professor Alexander Tyler in the late 18th century on the subject of the end of the Athenian Republic:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship. The average age of the world's greatest civilizations from the beginning of history has been about 200 years. During these 200 years, those nations always progressed through the following sequence:

1. From bondage to spiritual faith;
2. From spiritual Faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence; and,
8. From dependence back into bondage."

If you have any doubts about what is happening in these United States, read "Dependent on DC," by Charlotte Twight.

Can the American Republic be the exception Tyler's theory? That is up to us. Do your really expect to get the change you can believe in from the Obama Administration? If so there is also a bridge you might be interested in buying.

Or, is it perhaps time to follow the example of John Galt and vote with our feet before it is too late?

Continuity We Can Believe In

Thanks to Margrit for the headline and the idea. Although the President elect campaigned on the basis of "Change We Can Believe In," his initial appointments appear to be calculated to give the impression of stability, experience, competence and confidence.

Of course the President elect does have one thing in common with his predecessor the President select in that both made it perfectly clear early on that, in the immortal fractured syntax of the President select, "I am the decider." Can the new Administration deliver real and meaningful change?

Stay tuned.

Words of Wisdom

The following observations are true although the author is unknown to the Rainmaker. Please read, consider and share them as you see fit.

First, it is impossible to legislate the poor into financial freedom by legislating the wealthy out of financial freedom or even into poverty.

Second, what one person receives without working for, another person must work for without receiving.

Third, the government cannot give anybody anything that the government does not first take from somebody else.

Fourth, when half the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody is going to get what they work for, that is about the end of any nation.

Fifth, it is simply impossible to multiply wealth by dividing it.

Finally, it is simply impossible to legislate morality.

The Rainmaker thanks Peter Poranski for inspiring this post.

Obama's Opportunity

This is a unique moment and expectations for change are soaring.

Yet the early warning signals seem to indicate that Obama is likely to "stay the course" in too many respects. The President Elect tapped a member of the Clinton Old Guard to become Chief of Staff. The Vice President Elect is a member of the foreign policy establishment. Plans appear in place to increase the troop levels in Afghanistan and maintain the current Administration's Secretary of Defense.

Although it seems that real change could come if the new President has the will and imagination to think outside the box.

Imagine he ends "race, sex and ethnicity" based preference programs. With a Black man in the Presidency does affirmative action really have a place in American society?

Imagine he brings home the troops stationed in Japan and Germany. After all the war they won ended almost 65 years ago and the Soviet threat evaporated about eighteen years ago. Is it really appropriate to enforce a "Pax Americana" on the world any more?

Imagine he endorses a National Initiative to actually give the people the right to decide important policies rather than allowing the current corrupt system to continue without a check and balance. My personal favorite or all the possible forms of National Initiative is at "http://www.ni4d.org" and you can vote for it today. What if the President Elect were to endorse this concept?

These are just a few ideas. You no doubt have others equally outside the box and perhaps better than those offered by The Rainmaker. And, the new Administration has invited us to participate in suggesting audacious ideas. They have created a web site at "http://change.gov" where you can offer your suggestions. Although skepticism is tempting, what do you have to lose by offering a suggestion or several?

Take a Deep Breath

All too often, each of us is confronted with stressful situations, feelings of guilt, health problems, work hassles, nasty-rude people, fear, political conflict and the odd and assorted financial problem. We tend to take this personally, feeling victimized and put upon. Although the problem is ultimately that we are suffering the consequences of previous decisions we made.

We usually hate to admit that we create our own reality but we do whether we intend to or not. The fact is we do create our own reality and the present is our point of power. Once the present is past our leverage evaporates. When we focus on past decisions with regret we guilt ourselves. When we worry about the future we experience fear. But all we can control is the present. Guilt is useless. Fear is the mind killer. When we choose to remain in the present we experience peace.

So why not take a deep breath, slow down and think about the choices we are making each day as we make them. Actually, we are either typically obsessive in our guilt about the past or fear of the future. Tragically, we choose to feel guilt over the consequences of our choices after the fact, hopelessly attempting to clean up the debris. Or, we fearfully obsess about the future, helplessly anticipating the worst.

The alternative is to live in the present and be at peace.

The Rainmaker believes it is better to think about the choices we make as we are making them in the present. The alternative is to wander through life in an oblivious fog; alternating our focus between guilt and fear, while dealing with an endless stream of unintended consequences.

Expect a Miracle

Too often we expect the worst and that's exactly what we experience. A business deal doesn't go right. We lose faith and patience. Our trust in the transaction is lost. Then, a partner says let's give it one more chance. There is no need to rush to litigation according to our partner. Against our better judgment we wait just a little longer.

Then out of the blue the unexpected happens. The other party to the transaction actually performs as mandated by the contract. And, rather than spending the next 18 months and who knows how much in legal fees pursuing inadequate remedies, the deal works.

So the lesson is have a little faith, have a lot of patience and choose to expect a miracle. Sometimes the outcome is positive.

How much time and energy to we waste day to day choosing to expect the worst?

Why not choose to expect to be pleasantly surprised. Why not expect a miracle?

What really do we have to lose?