"What's for Dinner?"

In September, 1982, I was part of a U.S. Navy Task Force that was taking part in a large amphibious operation in Northern Europe. Ahh, the good old days when the Russkies were the bad guys and the thought of tanks crashing through the Fulda Gap kept everyone awake at night down at the Pentagon. The task force pulled into Portsmouth, England for a few days and it coincided with a good chunk of the Royal Navy's Falkland Islands Battle Group coming home.

The Battle for the Falklands was a dust-up between Argentina (which called the islands the Maldives) and the British. The Argentinians had siezed the islands which were little more than sheep-herders outposts, claiming them to be Argentine in April, 1981. England had other thoughts. It was early in the days of Maggie Thatcher and the UK was, like us across the pond, re-building her military. That a 3rd rate Navy could so blatantly swat at the English Lion was enormously embarrassing. It took almost 18 months for the British to respond. It was not without cost, either. The Argentine pilots, flying American made A-4 Skyhawks and French Etendard's would send the HMS Sheffield, the HMS Coventry and a huge supply ship, the Conveyor to the briny deep. In the end the Royal Navy and Marines prevailed though and the islands flew under the Union Jack again.

So here I was that fall, a sailor who had been at sea for some three months roaming around Portsmouth, England at the same time that their heroes were returning...oh well. I ended up in a couple of diplomatic exchange efforts with the Royal Navy and toured several of their returning vessels, including the HMS Broadsword. The Broadsword had been in the thick of it outside the Battle of San Carlos Bay in the Falklands.

One of the Broadsword's officers relayed a story to me about that day that has stuck with me ever since. Apparently, in the thick of battle, with the planes buzzing all around them...popping up off the wave tops to fire missiles or shoot cannon blasts at them, the Captain emerged on the bridge. Scared and worried faces met him as a report came in that the forward gun mount was not functioning. Nervous orders were being yelled to the helmsman to try to position the ship in such a way that the aft mount would be engaged to maximum effectiveness. "We were genuinely frightened that we were not going to make it out alive," my friend related. The Captain strode calmly to the center window of the bridge, surveyed the foredeck and asked for the Wardroom mess cook to come up to the bridge. "He looked bored, " I was told. A couple of tense moments passed, including another strafing by an Argentine aircraft. When the mess cook came on the bridge, the Captain turned around and in a voice just loud enough to be heard asked "What is for dinner this evening?" "We all knew at that moment that we were going to get by," my host related, "it was extraordinary courage and leadership."

This is an incredible and true tale of courage under fire. The Captain accurately gauged the temperament of his crew, knew the danger they were in and carefully chose the right words and actions to calm his team and compel them to perform great deeds. This Captain had no doubt been in the Royal Navy for at least 15-20 years. He had risen through the ranks learning all aspects of seamanship, engineering, weapons, intelligence, tactics and leadership so that at the point in time he was needed most, far away from any support system, he could perform in such a way that benefited his ship, his crew, his fleet and his mission. Now the HMS Broadsword is about 430 feet long and displaces 4,400 tons with a crew of about 220 men. The leader of this highly compact unit had more years of experience on just this one piece of the Royal Navy than Obama has on anything...ANYTHING. Just like the Royal Navy, no one assumes command of a United States Navy warship without YEARS of experience, and yet we have voted into power a man who has less experience than a Seaman Deuce in the U.S. Fleet and he is in charge of a whole lot more than a 430 foot long frigate!

Contrast the behaviour of this fine Naval Officer with what we are seeing coming out of the White House right now as they attempt to pass a "stimulus bill." Remember the opening scene in "The Big Chill," where the minister is talking about Alex's suicide and he asks "Where did Alex's hope go?" Well, where did Obama's "hope" go? Now, we are being told that if the House and Senate don't pass this bill by the end of this week, that the results will be "catastrophic?" "A failure to act and act now will turn a crisis into a catastrophe?" says Mr. Hopeandchange.

We're getting ready to spend ANOTHER $1,000,000,000,000 and we can't even debate it or hold a hearing or two to discuss what might work. This is not leadership, it is intimidation. We didn't get into this mess overnight, nor are we going to get out of it overnight. Prudent leadership would call for some bi-partisan analysis of the roots of the problem so that a sane piece of legislation can be crafted that addresses those roots and builds a stronger economy for us to go forward with. Democrats blithely throw around the accusation that it was George Bush's fault and that there was no regulation! Republicans, just as blithely throw out that it was Carter and Clinton's fault and there was no regulation of Fannie and Freddie. But what is before the Congress right now is a bill that addresses NEITHER! It simply tosses about a "quadrapillion" dollars in the air and hopes they land in the hands of future Democrat voters. These people have clearly forgotten where the money comes from...you either tax the people or you print it. Both options are bad.

But back to this leadership issue. Barry and his team have so little experience, so little knowledge of how to get things done in Washington that they are relying on the Democrat leadership in the House and Senate to do it for them. The result is a liberal get-even measure for all the budgets since 1994. It is insane. If you have the constitution for it, you can download a copy of the House version here. Don't take my word for it, read it...read about the "Weatherization Assistance Program" - that's on page 641, where you get to pay to get someone else's attic insulated. On pages 9-11 you will find how much each of the existing Departments are going to get for "oversight" of the money they will be spending...it totals over $225 MILLION - just for the oversight...and that doesn't include the establishment of the "Recovery Act Accountability and Trasparency Board." This will make your blood boil, which is a big part of the reason for the haste. Obama's vaunted "transparency" is showing that he is not ready to lead and is terrified that the general public is starting to figure this out...thus the panic.

We have put in office someone who is far more comfortable (and highly gifted) on the campaign trail. He was at it again today, giving stump speeches to "town hall meetings," that featured such great questions as "when is the money allocated for Elkhart going to get to us?" These poor dupes think that somewhere in this 700-page beast is a line item that says "Elkhart, Indiana....$40 gajillion." And there is Barry O selling it..."if they will just pass this bill, it won't be long." Further, he KNOWS it's not going to work. If it was so wonderful please answer the following questions:

1. What do you need Republican votes for? Pass it, watch the economy fly and have the Dems take all the credit!
2. Why is it "going to get worse, a lot worse?" Umm, err...gotcha!
3. Why not slow the process down, open up the books and demonstrate to the American people that this is the greatest thing since vinyl records.

This is a scam. Barry O is not leading, because he doesn't know how to lead. He lacks the experience, the know how and the vision to see what is good for the economy and the country. He has his teleprompter and his basic belief system. Preeminent in the latter is the fundamental, down to the innards of his gut belief that government is the solution and that he as government is the best solution. He is the philosophical negative of Ronald Reagan. Reagan knew how to lead and how to inspire a nation. He also famously knew that government WAS the problem...it still is, and its about to get worse.

I picture Barry O onboard the HMS Broadsword at the height of the battle...running around in circles, feverishly pointing at the next Argentine jet to pop up over the waves....his shipmates would have been appalled then. His countrymen, outside of the cult members, are now.

Rumble on!

KRISIS!!!

There's an old saying, I think I learned it in the Navy, that goes like this: "When in danger or in doubt, run in circles scream and shout." This very much resembles the behavior of politicians in Washington these days.

There are some metrics in this that are pretty scary. Take a look at the following chart:

The "adjusted monetary base" is "the total amount of a currency that is either circulated in the hands of the public or in the commercial bank deposits held in the central bank's reserves. This measure of the money supply typically only includes the most liquid currencies." Now according to this chart, from before the Great Depression, to about 1972, the AMB stayed in a range of $1-30 Billion Dollars. In 1971, Nixon took the U.S. Dollar off the gold standard...you know, "In God We Trust," and from that point till September 2008, it grew from about $30 billion up to about $850 billion in September, 2008. Some quick math here...hang on, my shoes are still on...about $22 billion per year on average. Now...from September, 2008 till today, it has grown from just under $900 Billion to about $1750 Billion...hmm, that's $850 BILLION in less than six months. Well, surely something that dramatic must have had a profound impact on financial futures in our country right? Let's see...the Dow Jones Industrial Average stood at 11,020. Today it closed at 8,001. Well that's good isn't it?? Lower is better?

Umm, no. So while our money supply has increased almost 95%, the Dow has lost 27%. Bear in mind that the Dow is a forward thinking index...while it reacts to day-to-day news, in the aggregate it reflects the sentiment of investors for where they think this thing is going. By this rationale, if we assume that some version of the $900+ BILLION "Stimulus" bill does make it to Obama's desk and he signs it...after all, he has to do something!!!! It's a crisis!!! We can expect our 401K's to fall in a similar proportion...$900 Billion represents another 51% increase in the money supply, therefore, applying our ratio the Dow should go down another 15% to 6,800. Now I know there is not a DIRECT correlation, but these things are related and should not be ignored.

This is not a "bash Barry" piece. The panic began under Bush when he cried "fire" in a crowded theater. Without going into too much detail, because I've covered a lot of this in previous posts, this is a ten step anatomy of the abyss we find ourselves in:

1. Lousy policy that encouraged those that could not afford homes to buy them.
2. Lousy policy that encouraged banks to lend that money.
3. Lousy policy that created "public/private" entities (Fannie and Freddie) to insure said bad loans.
4. Lousy policy that allowed the practice to go on unabated despite warnings from every sector.
5. Human greed that figured out how to securitize these bad loans and sell them off as "mortgage backed securities."
6. Human greed that figured out how to re-securitize these bad securities into "collaterized debt obligations."
7. An excessive influx of capital into the United States and into real estate in particular.
a. China and India emerging with purchasing power wanting to put the money in a safe place.
b. The crash on Wall Street of 2000 - the "tech wreck" - led everyone to believe real estate
was safe.
8. Lousy governance and cronyism that constantly swept the warning signs under the rug.
a. Barney Frank
b. Christopher Dodd
9. Lousy leadership that led to a panic.
a. George W. Bush
b. Hank Paulson
10. Cynical leadership that sees opportunity in fanning the flames of a crisis for political gain.
a. Barry O.
b. Rahm "Knuckles" Emmanuel

Now in Barry's defense, he feels he has to do...ummm, something. The Hill Democrats see a special moment in time where they can ride off of Barry's popularity and the sense of panic in the country and ladel in some heavy doses of social engineering. Their clear aim is to add to their patchwork quilt of constituencies in the hopes of creating a permanent class that is beholding to them for their well-being. Please notice that in the above menu of ten items, six of them - 60% for those of you fascinated with numbers - are attributable to Democrats. The very same people who account for 60% of the problem are now the ones with their hands on the tiller steering the boat. (In case you need help, put a check by numbers 1,2,3,4,8 and 10.)

The money has to come from somewhere to pay this tab. Or, alternatively, you could just print it. Weimar Germany tried that and it didn't work out too well. Their panic led to a tyrant...you know one that everyone loved to chant slogans to. It's that or taxation and didn't we fight one war already for "taxation without representation?" These folks up on Capital Hill are spending money on their pet projects without even pausing to catch their breath and consider that it it not their money.

Sadly, the other impact of this Katrina of Money hitting the system is two-fold. First, once it makes its way out of the bank vaults and onto the street, it could cause hyper-inflation and to stem that, the Fed would have no choice but to raise interest rates dramatically, killing off any chance of a recovery in the cradle. Secondly, the dollar will lose its stature as the global market setter. The type of irresponsible policy with no thought to unintended consequences that is being exhibited today in D.C. should make you nauseous.

There is hope though. The House Republicans and 11 Democrats votes in opposition to this bill. And the more people that know about the guts of the bill, the more they are going to realize that this is nothing more than a grab bag for favorite Democrat projects. This from the Wall Street Journal:

So then what’s the multiplier for the $50 million for the National Endowment of Arts? How about the $400 million for global warming research, the $335 million for STD prevention, the $650 million for digital conversion coupons, the $81 billion for Medicaid, the $20 billion for food stamps, the $30 billion for Cobra insurance extensions, the $4.1 billion for neighborhood activist groups like ACORN, the $83 billion for the earned income credit to give tax refunds to people who don’t pay income tax, and the $6 billion to subsidize university building projects just to name a few.

Does that really say $4.1 BILLION for "neighborhood activist groups like ACORN???" Yup. And how does that stimulate anything productive? Well, it doesn't. If the word can get out that this is nothing more than a pork barrel of nonsense, there is a chance it can be stopped.

The teachings of Hippocrates should apply to public policy as it does to medicine - first do no harm. (It's not in the Oath, but it is in his writings.) Obama has inherited a terrible problem. One caused in large part by his fellow party members, though compounded by a rush to solution by the outgoing Bushies. And he faces the true test of leadership. He has pledged that he is going to do "something." The best possible "something" he can do right now is "nothing," but that is not in the cards. Further, he has surrounded himself with neo-Keynesians who ignore the lessons of history in the belief that they are the "best and the brightest" sprung from Mt. Olympus for our salvation. It's a toxic mix. Ironically, Barry O's best chance at salvation right now may well lie in the Republican party. If they can stop this bill...filibuster it to death if need be...or raise enough public awareness that the pollsters in the West Wing get the message, they may buy Barry another term. If.

Rumble on!