Warren Buffett has gone over to the dark side, calling the crisis our "economic Pearl Harbor." Really?! Who attacked us? Bankers did not do this to themselves? No, as George Bush said in his speech, it is the foreignors fault for investing too much in American and forcing down the interest rates. Well, one thing is for sure, they will no longer invest here. China has ordered their banks not to lend USA banks any more money.
Slowly but surely, we will blame our problems on foreignors. A slow-motion disaster.
Thursday, September 25, 2008
Buffet Picks Up Xenophobic Theme
The Olympics Are Over
And there is no longer any reason to support USA fiscal irresponsibility. The Chinese will no longer pay for our war in Iraq.
Wednesday, September 24, 2008
It's The Foreigners Fault!
According to our president, the foreigners invested too much money in our country. This is an astonishing assertion, but it lays the groundwork for the war that will need to come, since congress will eventually pass this, and our economy will be all the worse. At some point, they will just have to change the subject. Americans are rightfully resisting this. But our politicians will pass this if wee do not object enough.
Something I Like About Obama
Obama would eliminate capital gains taxes on start-up and small businesses, and a credit (a tax cut) on employee taxes for the same. Given that the Republicans are dedicated to war, violence, theft, etc, this might be enough to get me to vote for Obama. The rest of his plans are nuts, as far as I can tell, but I sure like a tax cut for small business.
But it begs the question... if good for small business, isn't it good to cut all taxes? Of course, yet they won't, but any tax cut is a good tax cut, and since the burden of restoring American will fall on the shoulders of small business, then cut our taxes first.
Wonderful, If True
One of my themes is we talk Jeffersonian but act Hamiltonian. All of the difficulties you now see are teh expected results of Hamiltonian policies. If we revert to our principles, and apply Jeffersonian solutions to these issues, we'll see our way out.
I was worried China was going to mistakenly adopt the Hamiltonian ethic in their restoration of their place in the world. Happily, it appears they are learning from our mistakes. I guess it is we in Jeffersonian small business who must save America. And show China a better way.
Liability
Anthony said...
Hi John,
I have a question with information in your book. The question is regarding the liability spread of responsibility for a product.
The designer has some liability. The importer has some liability that is countered by product liability insurance and perhaps corporate or LLC protection.
What are the legal ramifications?
Thanks John,
Anthony
Answer follows...
Anthony,
Anybody can be sued for anything anytime. Changing the legal base from caveat emptor to the anything goes system we have now introduced chaos to the system.
Even if you comply with all Consumer Product safety Commission guidelines, you can be sued. Even if you are a corporation, you can lose your personal assets. Ultimately, there are no protections.
Then why does anyone start a business? Well, most people do not start a business, and very many who would are dissuaded from starting a business for these among very many other reasons.
If you wish to join the self-employed, you minimize your risk by using the measn I have laid out. Frequency: your first order is minimum, and you make your money on frequently as possible doing minimum transactions. This gives you intense market feedback which gives you early warning of any problems.
Also, you are so small you are not worth suing. (Do you have one million dollars in ready cash sitting at hand? Then you are not worth suing.)
As you grow and have a track record, you might get liability insurance, or have your supplier cover you under theirs if they have usa liability insurance. There are many ways to manage this situation, once you are in the business.
There are a few hundred stories of small businesses being wiped out for liability issues, and so it happens. But most businesses do not. if you are looking for protection from this, it does not exist. People get run over by trucks, too. If that fear keeps you in the home, it is irrational. So is fear of liability.
Rush In: Patriot Act, Iraq, Bailout
Here we go again - the politicians so thoroughly befoul the situation that we need emergency measures. There is no real emergency for we the people, it is only an emergency for big biz/govt who see another oppty to rip us off as they have with Iraq, patriot act and now the bailout.
Quote:
"I am convinced that this bold approach will cost American families far less than the alternative — a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," Paulson. "The financial security of all Americans ... depends on our ability to restore our financial institutions to a sound footing."
All nonsense, but the proper cover for McCain and Obama to support it eventually.
Vote third party.
When In Dubai, Do as They Do...
If you move to another country, it's a good idea to be sensitive to your hosts ethics. here is an article about a couple who did not...
Tuesday, September 23, 2008
Anthony Wants Some Answers
How is it that the French can build the Millau viaduct for only $600 +- million, while Seattle/WA state et al want to spend $4 billion?
http://www.roadtraffic-technology.com/projects/millau_viaduct/
This person really wants to build it....
http://www.seattleskyway.com/index.html
Somehow, We'll get screwed, pay for the most expensive least usable option.
Anthony
Our Communist Future?
Hi John,
I am sending a link to an interesting article. I hope I am doing this right.
It is titled; Wall Street Bailouts Mean 'Socialism,' 'Communists'
http://www.businessandmedia.org/articles/2008/20080917115834.aspx
I particularly like the part that states, “Well, everyone’s in favor of a free market until it doesn’t work to their advantage,” Haines said. “And then, they’re in favor of socialism and that’s where we are right now."
Although I tend to believe that there are some of us who favor a free market even when it is not working to our advantage at a moment in time, it seems to me that the only time it does not work is when greed takes over and a few want it to work to their exclusive advantage, leaving the rest behind in the dust, but then is that really a truly free market environment?
. I am interested to hear your comments
~~Cherie
Cherie,
What we’ve had over the years is not a free market. We’ll probably never see a true free market, what we do see is this: as markets are relatively more free, good things happen, and as they are relatively less free, bad things happen. Telephones litely deregulated in 1980, everyone has internet access and cellphones in 2000. This was good. Medicine is more and more regulated, bad things happen.
In a free market there would not be the mortgage mess. The mess was created by a monopoly on money and an interest rate, the mess is just another failed socialist policy. Regulations caused the problem.
My sources for information are www.lewrockwell.com and Mish Shedlock at http://globaleconomicanalysis.blogspot.com/. Aside form being knowledgable themselves, these fellows are a kind of clearing house for the news you need.
I agree with them and countless others that say this is the most raw, cruel, criminal, stupid, reckless and dangerous move this country has ever seen. And it won’t work. So although I have been making money off this crisis (becuase it was so very predictable) I will make much more when the plan is put in place (the failure is guaranteed).
One reason they have outlawed shortselling and other means to protect yourself from their plan is they know it will fail (so far it appears we who are presently shortselling will not have to unwind our position, therefore our profits will be exponential).
A couple of points I would make that I do not think people are emphasizing enough. The plan is supposed to save “wall street.” Well, Wall Street has failed, why save it? We have A system in place, not THE system. If an when this system fails, and only until this system fails, can we move on to a better system. One that does not reward the rich and punish the poor. One more of a free market variety, not this rip-off carnival we have now.
Paulson said that "it pains me tremendously to have the American taxpayer put in this position but it is better than the alternative."
Well, congress is abiding his action, but I doubt it pains him since his once and future employer stands to earn the most (and of course were the heaviest shortsellers on Lehman’s way down); the alternative is he and his cronies pay for this mess, and it is true it is better for Paulson that taxpayers cover his mess than the alternative, that he and his friends do so.
The other part that people miss is the utter diversion going on. The problem is being cast as a “mortgage mess.” The 700 billion is not real the problem, it is the other 10 trillion in our national debt. We are busted because of our criminal invasion of the country of Iraq and the countless other adventures we pay for, for the bridges to no where and the domed stadiums paid for with bonds, for the airports built to move countless people to meetings for businesses that are not sustainable, (and of course travel industries #1 paying customer, the government worker on a junket),.
I was teaching at a college in California. They pay me in warrants because they have no money. I walked through this one building, trying to find marker pens for the whiteboard. As I went from classroom to classroom, I noted the high tech equipment in each room, something no teacher uses, but there it is installed and paid for with bonds, taxpayers on the hook My guess was there was about $5000 in equipment per room, and 30 rooms in this one building. One small sliver: $150,000 of useless equipment in one building in one school... Multiply that by dozens of building in 1300 community coleges alone and you are at about 4.5 billion right there. Where did the money come from to buy all this? Bonds! Taxpayers owe it. Money was made cheap and plentiful, so schools could not resist spending what they were offered. The picture of a economic depression is where each classroom has $5000 worth of useless electronic equipment, but the schools cannot afford marker pens for the whiteboard.
Take that and multiply it by countless other instances of malinvestment and misallocation, through every level of every part of the economy, and you have the tip of the iceberg we see now.
This is the system we want to bail out, this is the system you want your great grandchildren doing without so it can be saved?
It does not mater whether they approve the 700 billion or not. It may buy some time, but the damage was done during the boom when those fancy overhead projectors and servers and speakers were boufght on credit and charged off to the taxpayers. The damage is far greater than merely home mortgages. By focussing on the mortgage mess, you are diverted from war, profligacy, government waste, big biz big govt waste, and so on. And vaguely, since your home and job are on the line, and gas is $4, somehow you feel you are responsible.
No, there are a few thousand people responsible for this mess, ones who have gone along to get along and benefitted greatly. The politicians you trusted are responsible, and there is no politician who can get elected that will begin the reapirs. The crash is inevitable. But it is too late to protect yourself now, they have outlawed protections such as short selling
But it is not going to matter much. China has called for a new world currency. When americans find out the fruits of their labors go to pay foreign owners of american companies, we will become less productive,and a downward spiral will set in. If you plan to stay in USA (and those who brought us this mess will be leaving for their overseas homes) about the only wy life will be tolerable will be as one self-employed..
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