Communist China, 1995— the dawn of capitalism.

The Hong Kong based guide talked about the free enterprise zones, building projects, golf courses, and roads with a chest full of pride and visible excitement. Capitalism was everywhere along the tour route, and judging from the advertisements on billboards and posters, the world was coming to China!

But although the government was embracing “for-profit” business for the first time, the train-ride out of the country evidenced the abject poverty of what would become a willing and able workforce. Another communist built wall was falling; another socialist society was moving closer to “The Force”.

Today, in the very birthplace of capitalism, an entrenched, arrogant, and incompetent congress equates greedy executives with the demise of capitalism while the economic force field it demeans catapults third world nations onto the leader board of global economic growth potential. Capitalism dead? Hardly.

As congressional fat cats lament the corruption of governments throughout the world, they line their pockets with favors from powerful lobbyists on Wall Street, within drug companies and insurers, and seek the bed of every conceivable public and private special interest group, ad nauseum.

Isn’t “lobbying” a euphemism for “corrupting”? Isn’t our government as corrupt as any of those that we so pompously criticize? Aren’t all business taxes passed on to consumers?

The failure of the grandiose Health Care Reform movement, or its transformation into a “we’ll just let the taxpayers continue to bite the bullet for spiraling costs” welfare program is a glaring example. Our eloquent President has changed his tag line from delivery system cost containment to “what the heck, we’ll just change the definition of insurance and move on”.

They just don’t get it — do you? Chinese and Indian economies are glowing because their businesses are growing. Emerging markets emerge through capitalism. Why? Because their governments nurture the job providors.

Here, we cut our entrepreneurs off at the knees and expect them to be globally competitive. We tax and abuse our creative best, allow power mongers to control the reins of government, and encourage our citizenry to ask: “what can my country do for me?” Career politicians who can’t remember their last private paycheck are voting American capitalism comatose.

Just as surely as major corporations breed corruption and greed in the executive suite, they also provide jobs, health insurance, and pension benefits to millions. Blaming capitalism is an easy non-answer to many questions— isn’t it clear that greed is a result and not a cause?

If it’s shareholder protection we want, lets empower regulatory bodies to insure it. Require shareholder advocates on boards of publicly traded companies, for example. Yes Madam Speaker, 401(k) investors and taxpayers are shareholders too, and they bleed directly and indirectly when congress kills companies.

What taxpayers want from their government is preventative action instead of post-disaster bailouts and blame deflection rhetoric.

There’s no mystery why sub-prime mortgages were allowed to run wild, or any doubt that derivative creators were encouraged to slither around the regulators with their too-complicated-to-understand-so-just-trust-me time bombs. Yet the financial product creativity factory continues to flourish.

Similarly, the financial “Weekend at Bernie’s” debacle was a regulatory blunder, a mirror image of Social Security funding, but definitely not evidence of problems with capitalism.

If we want to cut health care costs, nearly 90% of my survey respondents listed tort reform as an essential ingredient in any package— clearly not a topic that a lawyer-laden legislature would have an interest in considering. Talk about entrenched lobbyists!

Fear of frivolous legal action (and absurd jury awards) boosts costs for all businesses, all professionals, and all consumers. We need laws that prevent abuse of the system and which demand that people take responsibility for their own bad decisions and clumsy errors.

We need fresh new independent politicians who want to make things better for people, not for Republicans or Democrats, liberals or conservatives. You can’t get meaningful change from career politicians who pander for votes with every decision opportunity.

Class warfare politics is America’s shame. The majority of Americans want the opportunity to succeed at something, to become rich and famous, even. We don’t want free; we want affordable. We want to be in control of our own destinies. We want jobs, world-class education, and healthcare that doesn’t have to look over its shoulder for ambulance chasers.

Instead of the popular congressional “we can’t cut business income taxes, because that will benefit the rich”, let’s try “we have to use tax policy to encourage businesses to increase in the full-time, permanent employee, population, because that will benefit America.

For every 1% an employer increases permanent staff, it gets a 5% Federal, State, and Local income tax credit. For every year a more than 20% staff increase is maintained, all other taxes, levies, fees, charges, and miscellaneous assessments are decreased by 10%.

Audit the calculations and have strict penalties for those who become too creative; fine attorneys and accountants double who help businesses circumvent the spirit of the law. Keep the tax benefits out of CEO mansions.

Within a few years, the new, no-party, independent congress will be no-business-taxes-ever proponents and will be able to move on to a Flat-Fair personal income tax combination and a national pension plan that replaces the Social Security Ponzi scheme.

The cost of hiring and providing for new employees has made it a decision of last resort for most of us— the nostrils are just not wide enough. If we want more jobs, we need to encourage employers to hire additional workers.

Jobs, Permanent Jobs, Millions Of ‘Em— Make it so.

Author:
Steve Selengut
sanserve (at) aol.com

An employee of a south Phoenix social-services agency was arrested Monday on charges of embezzling nearly $200,000 in government checks intended to fund parenting programs.

Rosalie Magana was indicted on three counts of theft and one count of fraud after authorities say she stole the checks from Friendly House in December 2006 and January 2007.

Two other women were arrested and sentenced in 2007 for depositing the checks in a credit union, but investigators were unable to link the thefts to Magana until last week.

Friendly House is a 90-year-old social-services agency in south Phoenix. It offers a range of programs, including job training, adult education, family counseling, immigration-law assistance, elder care, a charter school and a food bank.

Magana, 60, has worked in the finance department for six years, according to agency CEO Luis Ibarra. She also picked up the mail.

Three checks totaling $198,000 from the Arizona Department of Economic Security went missing in early 2007.

Magana was indicted last week. Postal inspectors arrested her at Friendly House on Monday. Bond was set at $5,000.
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“The worst part is that the victim is a social-services agency trying to help people in need,” said Assistant Arizona Attorney General Andrei Cherny.

Source – Azentral

What is it that prevents America from righting herself? Stupid, blind, unthinking patriotism — willful idiots yelling “We’re number one!” while ignoring all evidence to the contrary.
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That Americas now have shorter lives than Bosnians, that our democracy is only slightly better than the Czech Republic’s, that we have more people in prison per capita than any other country in the world, and that a child born in Slovakia is more likely to survive than in America is pathetic.

Sources used for the above are from wikipedia.org

How is it that very few investors can make real profits, grow their net worth and consistently beat the market? That’s because it often takes one or more of the following rare traits…

The vision to identify breakthrough products, leaders, and brands.
The knowledge to spot an undervalued gem in a sea of glass
The courage to buy and hold when others are running scared

Occasionally, you’ll come across an investor with one of these valuable characteristics. And it’s likely that person does quite well. But I can’t imagine a person who can offer all three.

That would take two very different and even contradictory approaches…Fortune favors the brave only!!

The global economy looks set for a rocky ride in 2008. But for investors with enough cash in their portfolios this year will offer many opportunities to pick up undervalued assets. Equities in developed markets look particularly cheap.

While economists believe that the US is already in recession, other parts of the world are still enjoying good growth. Nonetheless, lower corporate profitability, inflationary pressure decreased liquidity in international markets and the slow pace of interest rate cuts are likely to spell modest returns across many asset classes.

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Opportunities will crop up for private investors to buy undervalued assets. The cheapest asset class is equities, raising the prospect of decent buying opportunities for investors with cash in their portfolios.

Nonetheless, even the best-performing equity markets are expected to offer modest returns. Developed market equities, however, are likely to outperform equities in emerging markets. This is underpinned by the expectation that interest rates will be cut sooner in developed markets. Valuations in developed markets look more compelling than in emerging markets.

Globally, opportunities are starting to crop up for brave investors. Value is emerging, for example, in the bonds and shares of companies in financial services and property companies. Some property firms, trading at a 40-50 per cent discount to net asset value, look attractive.

The whole world has experienced a major expansion in the availability of credit. This has been followed by a significant retraction in the availability of cheap loans. Banks have become more risk averse in an environment where $700 billion of sub-prime debt sits at the foot of a $10.7 trillion pyramid of debt.

Liquidity in international markets fell during the last quarter of 2007, slowing growth and limiting returns across asset classes. This weakness is likely to linger well into 2008 with inflationary pressure limiting the ability of central banks to aggressively cut interest rates.

Looking ahead, global economic growth will struggle to pick up steam without the support of broad interest rates cuts. The decision by the Federal Reserve to cut its federal funds rate by 75 basis points to 3.5 per cent delivered what the economy needed..

It is important to remember that cuts in interest rates take time to work. While cuts in interest rates will alleviate some of the economic pain, the huge amount of household debt in the country-region will take some time to unwind. The reality is that consumer debt has never been higher. Based on past experience, we should also expect further pain as a result of the housing crisis and sub-prime mortgage lending.

Our hope is that reasonable growth in other parts of the world will offset the recession in the country-region> to some degree.

All the benefits of interest rate cuts will be undone if the financial system suffers further stress. The markets will remain fearful of more bad news until the full earnings reporting season for financial companies has come to an end and they have identified their credit related write downs. Reduced liquidity in global financial markets could also put pressure on the value of property, metal prices and emerging market assets.

The dollar appears to have suffered its biggest decline in this economic cycle but sterling could be vulnerable. A downturn in the housing market could lead to slower growth and lower interest rates, in turn prompting sterling to fall against the dollar and the euro.

How events play out in the global economy in 2008 remains to be seen. Market concerns about a more significant slowdown outside the country are increasing. Even in China there is potential for a slowdown.

The “muddle through” scenario – in which in the recession is offset by good growth in other parts of the world – is still a favourite, with a probability of 45 per cent. Global recession is viewed as high as high as 35 per cent. The third scenario is one in which the Federal Reserve takes a risk with inflation and cuts rates aggressively to stimulate growth but stores up for the future by stoking inflation.

Be vigilant for such a moment.

Hi everyone, I will be moving this blog to a new host this week. Nothing will change, but it is possible there will be some downtime, surely not more than a few more hours.

As soon as this is over, I will return to the regular posting schedule. Stay tuned.

Thank you very much for all the support!

Cheers
Robin