The United States Senate reads “George Washington’s Farewell Address” every year, alternating between the two parties. It was read by John Hoeven, R-ND on February 23, 2015. The House of Representatives last read it publicly in 1984. You can find a copy at http://www.senate.gov/artandhistory/history/resources/pdf/WashFarewell.pdf.
Whether Congress listens to the reading or not, I think they often forget what George Washington wrote, maybe within hours of the reading.
Washington warned again and again about faction. One example is:
“[The obstructions of constituted authorities] serve to organize faction; to give it an artificial and extraordinary force; to put in the place of the delegated will of the nation the will of a party, often a small but artful and enterprising minority of the community; and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill concerted and incongruous projects of faction, rather than the organ of consistent and wholesome plans digested by common councils and modified by mutual interests.” [page 14]
He went on about how unprincipled men could actually take over the government, subverting the will of the people.
In the same month that a Republican Senator read “Washington’s Farewell Address”, the Republicans went right back to factionalism, finding all kinds of fault with President Obama and pushing a corporate agenda.
As General of the Continental Army, Washington provided lessons that we have not learned about wars but “insurgents” in many countries know only to well.
Washington and the Continental Army knew the country; the British did not. Boxed in several times, Washington managed to escape with his army. For example, he was in Manhattan and Brooklyn when the British invaded Long Island. He commandeered every boat he could and took all his men, cannon, horses, and more to Manhattan on a foggy night and then on to White Plains..
"I am well convinced myself, that the enemy long ere this, are perfectly satisfied that the possession of our towns while we have an army in the field will avail them little.” Think Baghdad, Kabul.
He predated by almost two centuries Mao Zedong: “enemy advances, we retreat; enemy retreats, we pursue.”
George Washington also stuck to the task from 1775 until the British surrender at Yorktown in 1781. What is the average tour of duty of a general in Iraq or Afghanistan? And of course, every general has a different idea of what to do. Oh, yes! Washington would let himself be outvoted by his officers.
As President, George Washington was for efficient government, not necessarily for limited government: “for the efficient management of your common interests in a country so extensive as ours, a government of as much vigor as is consistent with the perfect security of liberty is indispensable… It is indeed little else than a name, where the government is too feeble to withstand the enterprises of faction, to confine each member of the society within the limits prescribed by the laws, and to maintain all in the secure and tranquil enjoyment of the rights of person and property.” [pages 15-16]
“[The spirit of party] opens the door to foreign influence and corruption, which find a facilitated access to the government itself through the channels of party passions.” [pages 17-18] Does this apply to the Congressional invitation for the prime minister of Israel to speak before it?
“And let us with caution indulge the supposition that morality can be maintained without religion.” [page 20] Note that he doesn’t specify what religion, one of the numerous Christian sects or one of the many non-Christian sects.
Washington wrote a section on the need for public credit and to use it sparingly by “cultivating peace”. If war is necessary, the burden should not be put on future generations. “[Y]ou should practically bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes…” He followed this with a discourse about the problem of selecting what to tax. I wonder what he would think of all the highways that we demand, the degree of safety oversight we want, and the research we want.
He wrote a couple pages about the necessity of treating all nations the same. “The nation which indulges toward another an habitual hatred, or an habitual fondness, in is some degree a slave.” What would Washington say about our relations with Cuba, Iran, North Korea, Israel, Saudi Arabia, or Egypt? All of them manipulate us more than we manipulate them. George Washington considered those who resist these entanglements as the “real patriots”.
He also extended this view to commerce: “our commercial policy should hold an equal hand: neither seeking nor granting exclusive favors or preferences…” [page 28]
As much as we have put Washington on a pedestal, he is more modest: “I am nevertheless too sensible of my defects not to think it probable that I may have committed many errors.”
He looked forward to enjoying “the benign influence of good laws under a free government…”
Sorry, Mr. President, but fools have rushed in where heroes fear to tread. We have many bad laws under a bought government.
Mel votes in almost every election, mostly in the hope of avoiding really bad laws.
Also published in the Reader Weekly, 2015-03-05 at http://duluthreader.com/articles/2015/03/04/4899_george_washington_ignored_father_of_his_country
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Thursday, March 05, 2015
Wednesday, March 04, 2015
Party that wants government to live within its means doesn’t?
“Republican consulting firm demands Minn. GOP repay overdue bills”, Patrick Condon, Star Tribune, 2014-03-02
It took a call from the founder and chairman of Arena Communications to get the Minnesota Republican Party to promise to pay immediately for work done on political campaigns last year. The party had claimed "[w]e were able to support our endorsed candidates through the Primary and with a statewide victory program, while simultaneously meeting our financial obligations and paying down debt."
See also “Mills advisor: GOP activists ‘have been misled about party’s debt”, Michael Brodkorb.
It took a call from the founder and chairman of Arena Communications to get the Minnesota Republican Party to promise to pay immediately for work done on political campaigns last year. The party had claimed "[w]e were able to support our endorsed candidates through the Primary and with a statewide victory program, while simultaneously meeting our financial obligations and paying down debt."
See also “Mills advisor: GOP activists ‘have been misled about party’s debt”, Michael Brodkorb.
Wednesday, April 24, 2013
Quote of the day: We do not have grown-ups in Washington
Watch "The Economic Argument is Over – And Paul Krugman Won", Daily Ticker, Henry Blodget.
Tuesday, August 28, 2012
Can't corporations live within their means?
Many complain about government borrowing and say that government should live within its means. But few complain about corporate borrowing. Shouldn't corporations live within their means?
From the semi-annual report of the AllianceBernstein Income Fund (Ticker AWF):
AT&T, 6.50%, due 2037
Ford Motor Co., 7.45%, due 2031
Citigroup, 8.50%, due 2019
Pacific Life Insurance Co., 9.25%, due 2039
Weyerhauser Co., 7.375%, due 2032
Borrowing does have its purposes, among other things having the capital for expansion or to smooth out cash flows. But how much borrowing is too much?
For example, Citigroup as of June 2012 had a debt to equity ratio of 3.024, that is, it owed bondholders three times as much as the value of shareholders' stock. See http://ycharts.com/companies/C/debt_equity_ratio. On the better side, General Motors had a debt to equity ratio of 0.3555. See http://ycharts.com/companies/GM/debt_equity_ratio. On the worse side, Ferrellgas Partners has a debt to Equity Ratio of 25.36. See http://ycharts.com/companies/FGP.
But why is Citigroup paying bondholders 8.50% when it pays savers 2% or less? See "Taking a Look At Citigroup's Latest Fixed-Income Prospectus", Rajiv Tarigopula, Seeking Alpha, 2012-07-11. Remember when savings and loans were required to pay 5% by law (which they used to justify not paying more)? And this 2% is not being paid for demand deposits, but three-month notes.
It gets even a bit screwier. Citigroup does offer a fixed-rate 15-year mortgage at 4.375 percent. So, it is borrowing at 8.50% to finance mortgages returning 4.375%. That doesn't sound like it's living within its means! See "Who Are the Best Mortgage Lenders for Bad Credit", Beth Lytle, eHow Contributor, no date.
From the semi-annual report of the AllianceBernstein Income Fund (Ticker AWF):
AT&T, 6.50%, due 2037
Ford Motor Co., 7.45%, due 2031
Citigroup, 8.50%, due 2019
Pacific Life Insurance Co., 9.25%, due 2039
Weyerhauser Co., 7.375%, due 2032
Borrowing does have its purposes, among other things having the capital for expansion or to smooth out cash flows. But how much borrowing is too much?
For example, Citigroup as of June 2012 had a debt to equity ratio of 3.024, that is, it owed bondholders three times as much as the value of shareholders' stock. See http://ycharts.com/companies/C/debt_equity_ratio. On the better side, General Motors had a debt to equity ratio of 0.3555. See http://ycharts.com/companies/GM/debt_equity_ratio. On the worse side, Ferrellgas Partners has a debt to Equity Ratio of 25.36. See http://ycharts.com/companies/FGP.
But why is Citigroup paying bondholders 8.50% when it pays savers 2% or less? See "Taking a Look At Citigroup's Latest Fixed-Income Prospectus", Rajiv Tarigopula, Seeking Alpha, 2012-07-11. Remember when savings and loans were required to pay 5% by law (which they used to justify not paying more)? And this 2% is not being paid for demand deposits, but three-month notes.
It gets even a bit screwier. Citigroup does offer a fixed-rate 15-year mortgage at 4.375 percent. So, it is borrowing at 8.50% to finance mortgages returning 4.375%. That doesn't sound like it's living within its means! See "Who Are the Best Mortgage Lenders for Bad Credit", Beth Lytle, eHow Contributor, no date.
Thursday, November 10, 2011
Having your cake and eating it too!
"For example, 53% of Americans believe the debt and deficits should be cut significantly... but the same percentage agrees that taxes should not be raised on anyone.
Similarly, 53% of Americans think that the influence of banks and corporations should be reined in... but that regulations on businesses should be pared back."
- "New Poll: Americans Now Think Economy Favors Super-Rich", Henry Blodget, Daily Ticker, 2011-11-08
Similarly, 53% of Americans think that the influence of banks and corporations should be reined in... but that regulations on businesses should be pared back."
- "New Poll: Americans Now Think Economy Favors Super-Rich", Henry Blodget, Daily Ticker, 2011-11-08
Wednesday, July 20, 2011
Businesses live within their means? Really?
Over and over again, letter writers and some politicians complain that governments should live within their means just like families and businesses. But do families and businesses really live within their means?
Consider that the current crisis was not caused by government overspending, but family and business overspending. Many people went in way over their heads with credit card and mortgage debt. Financial gurus created debt instruments of debt repackages over and over in a great Ponzi scheme, all in the name of free markets. The whole mess collapsed of its own weight and took down the guilty and the innocent alike. Unfortunately, the captains didn't go down with their ships, but were first in the lifeboats carrying their safes.
I got to thinking about what kind of corporate debt does exist. Well, I am a small beneficiary of corporate debt; we own shares of some market-traded bond funds that give us a few hundred dollars of income every month.
Now is the time that semi-annual shareholder reports come out, and I checked one fund's holdings. Below is a sample of some of the businesses whose bonds are held by DWS Global High Income Fund (LBF) with the rate and due date.
HCA Holdings, Inc. offers health care services in the United States. The company owns, manages, or operates hospitals, freestanding surgery centers, diagnostic and imaging centers, radiation and oncology therapy centers, rehabilitation and physical therapy centers, and various other facilities.
- From Yahoo! Finance, http://finance.yahoo.com/q/pr?s=HCA+Profile
No wonder health care costs are so high. Many health care conglomerates can't live within their means.
Of course, these rates are low compared to credit card rates. By comparison, home mortgage rates are around 4.50 percent for thirty years. Treasury bonds are currently about 1.50 percent for five years and 4.25 percent for thirty years. Either certainly beats current bank savings account rates of less than one percent.
I would say that families that have only fixed-rate mortgage debt and the federal government are living within their means far better than some large corporations.
Consider that the current crisis was not caused by government overspending, but family and business overspending. Many people went in way over their heads with credit card and mortgage debt. Financial gurus created debt instruments of debt repackages over and over in a great Ponzi scheme, all in the name of free markets. The whole mess collapsed of its own weight and took down the guilty and the innocent alike. Unfortunately, the captains didn't go down with their ships, but were first in the lifeboats carrying their safes.
I got to thinking about what kind of corporate debt does exist. Well, I am a small beneficiary of corporate debt; we own shares of some market-traded bond funds that give us a few hundred dollars of income every month.
Now is the time that semi-annual shareholder reports come out, and I checked one fund's holdings. Below is a sample of some of the businesses whose bonds are held by DWS Global High Income Fund (LBF) with the rate and due date.
HCA Holdings, Inc. offers health care services in the United States. The company owns, manages, or operates hospitals, freestanding surgery centers, diagnostic and imaging centers, radiation and oncology therapy centers, rehabilitation and physical therapy centers, and various other facilities.
- From Yahoo! Finance, http://finance.yahoo.com/q/pr?s=HCA+Profile
No wonder health care costs are so high. Many health care conglomerates can't live within their means.
Of course, these rates are low compared to credit card rates. By comparison, home mortgage rates are around 4.50 percent for thirty years. Treasury bonds are currently about 1.50 percent for five years and 4.25 percent for thirty years. Either certainly beats current bank savings account rates of less than one percent.
I would say that families that have only fixed-rate mortgage debt and the federal government are living within their means far better than some large corporations.
Thursday, June 23, 2011
You can't argue with Tea Party supporters
Today's Duluth News Tribune had a rebuttal of my Tea Party Local View. See "United States on a fast track to tyranny". You can see it free for about seven days.
His first fixation is on taxes as being a sole driver of economic activity - "High taxes drive taxpayers out of high-tax states…" True if you consider only people who measure only taxes as a cost. These writers never consider that taxes buy us lots of things that drive economic activity. He ignores that many companies move to where skilled labor is available and that it takes taxes to educate and train people.
That bastion of free enterprise, the Wall Street Journal, published an opinion earlier this week that a company moving to the South (low taxes and anti-union) may be getting lower quality: "Boeing's Threat to American Enterprise: When major firms move to the South, it's usually a harbinger of quality decline. Why let that happen?", Thomas Geoghegan, Wall Street Journal, 2011-06-20. Sorry, you'll have to subscribe to see the whole article.
He gets on the tax and spend mantra and that much is paid for by borrowing. But why is the money borrowed? For two wars? For infra-structure investment? To bail out large corporations?
He claims that the "intent of our country's founders is obvious from their writings…" I guess he knows better than the Supreme Court, which over the decades has had difficulty discerning the intent. He completely missed my comment that first a slave was property and not a person and then property (a corporation) was a person. I didn't put in my article that these cases were Dred Scott and Citizens United.
He claims that we are on "the fast track to tyranny as we relinquish … our dollars and choices to government officials who supposedly know what is best for us." He ignores that we are still a republic and can vote these people out.
He missed my point about free markets being many players with sufficient information. He ignores that our free markets have devolved into a few players with the power to buy our government. Now that is tyranny!!
His first fixation is on taxes as being a sole driver of economic activity - "High taxes drive taxpayers out of high-tax states…" True if you consider only people who measure only taxes as a cost. These writers never consider that taxes buy us lots of things that drive economic activity. He ignores that many companies move to where skilled labor is available and that it takes taxes to educate and train people.
That bastion of free enterprise, the Wall Street Journal, published an opinion earlier this week that a company moving to the South (low taxes and anti-union) may be getting lower quality: "Boeing's Threat to American Enterprise: When major firms move to the South, it's usually a harbinger of quality decline. Why let that happen?", Thomas Geoghegan, Wall Street Journal, 2011-06-20. Sorry, you'll have to subscribe to see the whole article.
He gets on the tax and spend mantra and that much is paid for by borrowing. But why is the money borrowed? For two wars? For infra-structure investment? To bail out large corporations?
He claims that the "intent of our country's founders is obvious from their writings…" I guess he knows better than the Supreme Court, which over the decades has had difficulty discerning the intent. He completely missed my comment that first a slave was property and not a person and then property (a corporation) was a person. I didn't put in my article that these cases were Dred Scott and Citizens United.
He claims that we are on "the fast track to tyranny as we relinquish … our dollars and choices to government officials who supposedly know what is best for us." He ignores that we are still a republic and can vote these people out.
He missed my point about free markets being many players with sufficient information. He ignores that our free markets have devolved into a few players with the power to buy our government. Now that is tyranny!!
Wednesday, March 02, 2011
Of course our children and grandchildren will pay for…
…investments we make in their future. Just like we paid off the debt for some of the investments our parents and grandparents made in our future.
One of the big grumbles about government debt is that our children and grandchildren will have to pay. However, what many of these people are grumbling about assumes that all debt is wasteful.
In many cases this can be true, especially if it is borrowing for today's operating expenses. On the other hand, many things we need to borrow for to have in the future. All that paid cash for every house they ever owned, please raise your hand. Same for every car.
We as a society need to borrow for school buildings, government buildings, streets, sewers, and other infra-structure. Do you think our great-grandparents had a bake sale to build the sewers we take for granted?
My persistent cold is making me thankful for all that has been made possible by past generations.
I don't have to go out in the cold to get wood to keep warm. The gas keeps coming and the furnace ignites automatically as needed to keep our house at the temperature we selected.
I don't have to go out in the cold to well to get water. Whenever I wash or want to make coffee, I just turn on the faucet. I think on our street those waterlines were laid in the 40s or even before.
I don't have to go out in the cold to the outhouse. I just go to the bathroom, push the little handle when I'm done, and all that stuff goes out of sight and out of mind.
We are all better off for these investments made by generations gone by.
We are also healthier and longer-lived because of those investments. Even as ambulatory as I am with this cold that will probably be gone in another week, what would it be like if I had to go outside frequently for wood, for water, and for the toilet? What would be the chances of my developing pneumonia and not being able to get help because there was no telephone?
It is true that we should pause now and then and be thankful for our blessings, especially those given to us by people long-gone.
One of the big grumbles about government debt is that our children and grandchildren will have to pay. However, what many of these people are grumbling about assumes that all debt is wasteful.
In many cases this can be true, especially if it is borrowing for today's operating expenses. On the other hand, many things we need to borrow for to have in the future. All that paid cash for every house they ever owned, please raise your hand. Same for every car.
We as a society need to borrow for school buildings, government buildings, streets, sewers, and other infra-structure. Do you think our great-grandparents had a bake sale to build the sewers we take for granted?
My persistent cold is making me thankful for all that has been made possible by past generations.
I don't have to go out in the cold to get wood to keep warm. The gas keeps coming and the furnace ignites automatically as needed to keep our house at the temperature we selected.
I don't have to go out in the cold to well to get water. Whenever I wash or want to make coffee, I just turn on the faucet. I think on our street those waterlines were laid in the 40s or even before.
I don't have to go out in the cold to the outhouse. I just go to the bathroom, push the little handle when I'm done, and all that stuff goes out of sight and out of mind.
We are all better off for these investments made by generations gone by.
We are also healthier and longer-lived because of those investments. Even as ambulatory as I am with this cold that will probably be gone in another week, what would it be like if I had to go outside frequently for wood, for water, and for the toilet? What would be the chances of my developing pneumonia and not being able to get help because there was no telephone?
It is true that we should pause now and then and be thankful for our blessings, especially those given to us by people long-gone.
Monday, March 03, 2008
Spend or pay off debt, money still goes into the economy
One of the criticisms of the stimulus package that Congress passed and the President signed is that many people will save it or use it to pay off debt. However, the money still "goes" into the economy. Those who save it will be providing capital to financial institutions; they don't put it into a lock box but lend it to others. Those who pay off debt are similarly making more money available to lend.
What the rebate does mean is that the government will have less money to either spend or pay down its debt. That means at some time more taxes will be needed to pay for needed projects or to reduce the debt. In other words, the government is doing what many people did to get us into this mess - living on tomorrow's income.
What the rebate does mean is that the government will have less money to either spend or pay down its debt. That means at some time more taxes will be needed to pay for needed projects or to reduce the debt. In other words, the government is doing what many people did to get us into this mess - living on tomorrow's income.
Thursday, January 24, 2008
Coincidence or campaign
Today I submitted an op-ed piece on "borrowing from our grandchildren" to the Star Tribune. This evening at dinnertime I received a call from the Star Tribune. I thought it was to verify that I sent the piece. No, it was a solicitation for home delivery of the Star Tribune.
I first said that I walked to the corner to get the papers because we were away too much for home delivery. The caller clarified that the special was for the Sunday Star Tribune. I declined saying that we had enough trying to read all the Sunday Duluth News Tribune.
Coincidence or what?
I first said that I walked to the corner to get the papers because we were away too much for home delivery. The caller clarified that the special was for the Sunday Star Tribune. I declined saying that we had enough trying to read all the Sunday Duluth News Tribune.
Coincidence or what?
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