Socialism Doesn't Work

ON BUSINESS IN JAMAICA

Jamaica, besides being strikingly beautiful, is really an outcrop of bauxite sticking out of the ocean. Bauxite is the main ore in aluminum. If you haven't noticed, over the last decade, we have been, until lately, in a commodity boom.

Naturally, Jamaica is an exporter of bauxite - the fifth largest in the world as a matter of fact. You would think that over the recent years, the Jamaican government would have a large sovereign wealth fund squirreled away from bauxite production. It is 60% of their GDP by the way.

Unfortunately that is not the case; as you see, the Bauxite producers are state owned. This causes huge inefficiencies in the system. The industry was also used as a jobs producer. Their cost of production is now thirty percent more than the price of bauxite on the open market.

I have seen with my own eyes the cost of this system - the economy is barely growing here and has been that way for a long time. This is going to be a very severe downturn for this island. It is not a pretty picture here as they face massive job losses - with the government running out of money themselves.

This reminds me of the failing economy of the Soviet Union.

I guess the trick is to manage capitalism so that its worst excesses are prevented.

More on that another time.

Thoughts After the Election

ON BUSINESS IN PANAMA

As I stared out over the Panama Canal last night (I was at a party thrown by a client at the Latin Federation of Banks Conference), watching the ships go by every 15 minutes, I was struck by the good the United States of America has done for the world. The canal is a marvel of engineering and quite impressive. The Panamanians are very proud of their canal as they should be - expansion of the locks is starting soon.

After the election, I am also struck by the problems this country has. The economy, terrorist threats, rise of competitive countries run by totalitarian thugs all are very troubling.

As a member of the loyal opposition, I believe it is our duty to support the duly elected President of the United States and give him a chance to put his policies in place; with the caveat that we should oppose the most onerous liberal initiatives.

We have to control our spending and rebuild our economy - once this crisis has passed obviously. These are very difficult and scary times. We have to come together as a country and celebrate the fact that only in America could a member of an historically oppressed minority become the Leader of the Free World. This is a good thing.

Lets hope he makes good decisions.

Europeans Ridicule America's Money Meltdown

This was the Drudge headline recently. I find it so interesting that the Europeans consistently underestimate the good ol' U.S. of A.

One of the basic tenants of capitalism is creative destruction. We are going through one of those periods now. You are witnessing no less than a complete revision of American capitalism - in conjunction with the spread of globalization. Firms have to have the capital and risk profile to compete in the world economy.

THIS IS A GOOD THING!

You will see the United States come out of this stronger and more capable to compete on the global stage.

As they have said in history - "The demise of the United States is greatly exaggerated."

I predict that in several years you will once again hear the Europeans complain about the hypersuccessful Americans.

Wallstreet to Mainstreet

Having an inside view of Wallstreet, I can definitely say that there are shady dealings happening on a regular basis. The goal on the street is to SELL whatever it is to whomever will buy. Therefore it should be easy to blame the culture of Wallstreet for the current credit crisis.

But not so fast - there is plenty of blame to go around. For years, the left pushed offering mortgages to people that were not qualified. There was no thought as to the consequences to giving a "subprime" mortgage to someone who could not afford it. For almost a decade, Republicans in Congress have been pushing to reform FNM and FRE; to reign in their power and balance sheet. They were thwarted by the Democrats in Congress. John Mccain several years ago pushed reform only to be denied.

It is interested to say the least to see now the "Chris Dodd's" of the world pontificate how outraged they are at the investment banks and CEOs of Wallstreet.

I am continually amazed at the untruths pushed by these people. Why can't they take responsibility for their actions? The rest of us have to.

All of us are going to suffer for the excesses of the last decade. I just hope that Congress gets out of their hearing rooms and into the mode of passing the legislation that needs to be passed.

The History of W

I remeber back in college the left railing against "Ronald Raygun" because he wanted to put nuclear missiles in Europe to counter the Soviet Union (or the Evil Empire as he called it).

They said he was stupid, out of touch, a cowboy, a right wing kook. Sound familiar?

There has not been another terrorist attack on the United States because of one reason and one reason only. George Bush has gone on the offensive and protected our country - and stuck to his principals.

THE LEFT CAN'T STAND THAT!

History will speak highly of the democritization of the Middle East - the protection of the homeland - and the aggressive prosecution of a just war.

Even Barack Obama now speaks fondly about Ronald Reagan. I think historians will speak the same way about George W. Bush.

Termination Dust

I spent three years flying out of Anchorage as an Air Force Rescue helicopter pilot.  The thing I most remember about Alaska, besides the obvious environment, is the people.  They are a hardy bunch.  Whether they are winter camping, landing on a sandbar of a river with a very small airplane, or combat fishing, they tend to be brave, self-reliant, and a little bit different.  Definitely not your right or left coast cocktail circuit crowd.

I am shocked, surprised, and elated that McCain has picked Palin.  I think they together could really do some good on the national stage for the country.  The Republican party has drifted too far into the big government camp and we need someone to return the party to its principals.  This is a game changer in my opinion.  Either she will make it work or she won't.  They both are not from the East coast Wall Street crowd or the Southern Bible Belt and don't carry the baggage from either sect.  They will promote freedom, opportunity and government for the people.  In short, they will be brave, self-reliant and a little bit different - a Western kind of different.  

I used to fish near Wasilla; its on the way to Talkeetna, the town that supports the base camp for climbing Mt McKinley.  When the snow starts coming down from the mountain peaks in the fall, getting a little closer to the valley everyday, they call it "termination dust."  

I think Palin has sprinkled a little on the Obama campaign.

Prediction

Now that the Russian tendency for imperial conquest has reasserted itself, the world remembers why they like having the United States around.  They don't want to admit to themselves or anyone else but its nice having a big brother who you can call to get you out of a jam.  

For decades, our European and Asian allies have been underfunding their defense requirements while relying on the U.S. defense umbrella; all the while, wailing about the war-mongering Americans.  

On the American side, we can little afford to allow other aggressive nations to overrun the free world or threaten it in any significant way.  

My prediction is that you will see many democracies on the periphery of Russia move closer to the American sphere.  You will also the new conservative governments on the continent rally around NATO and the common defense.

All of the members of NATO need to dedicate a greater share of their GDP towards rebuilding the alliance's joint capability.  I published a post earlier to this point regarding the need for advanced weapon systems and continued superiority in this area.

My bet is that they sleep a little better in Europe knowing they can always rely on the United States to defend them; but, there is a lot of work to do.

Ability to See Evil

This weekend Russia invaded Georgia.  Initial reactions are important as they show how an individual thinks and reacts.  

Lets look at what happened and see how the two candidates would react to a serious foreign policy crisis.

McCain immediately condemned and stated the Russian aggression was unacceptable.  Obama said, "Lets not jump to any conclusions."  He later modified his response to stiffen his response to Russia.  He must have taken a poll.

A consistent theme in my posts has been Obama's lack of principal and saying or doing whatever it takes to get elected.   This is more evidence.

There is value in McCain having seen evil and experienced over a long period of time.  Obama has avoided it and is now appeasing it.

I think the American people will see this in November.

We have to protect our way of life and stand up to aggression.

Self Destruction

IN TRINIDAD ON BUSINESS

I was meeting with a client today and during the elevator ride he asked are people interested in the election in the US. I told him that it was the big show and people were following it closely. His comment to me without request was, " I think Obama is self destructing."

This told me that what I have been saying about the arrogance and lack of principal from Obama was being sensed by others as well. If a financial professional in Trinidad can sense it - Joe Bag of Donuts in the US obviously can.

I hope McCain can continue to be more forceful on the campaign trail and more distinctly articulate his policies and solutions.  

European Superiority

IN THE BAHAMAS ON BUSINESS

I have to admit my feathers got ruffled after reading the last issue of the Economist. Basically, the lead article stated that America was once a great country and if she just admitted that the Europeans were right and followed their model, she could be great again. Socialism, appeasement, and impotence will take you down the righteous path.


That being said - there are some things we need to learn from. Such as, straying from your principals to maintain and benefit from power will only destroy your party as well as your country. The principals of self- reliance, limited government, peace through strength, low taxes, and entrepreneurship are the only way out of the fix we find ourselves in. The party that promotes that agenda is the only party that has a chance of restoring the greatness of this country.



I flew Ted Stevens around the Exxon Valdez oil spill in Prince William Sound in Alaska as a young Air Force helicopter pilot. I remember thinking he was arrogant. What a waste and what a disaster for our party.

Absolute power corrupts absolutely.

Worth Reading

I hate to give the NYT any publicity - but hiring Bill Kristol is the best thing they have done in a long time - this one is worth reading.

http://www.nytimes.com/2008/07/28/opinion/28kristol.html?_r=2&hp&oref=slogin&oref=slogin

I Don't Trust Him

So Obama returns from Europe and says that everyone now agrees with his position on withdrawal from Iraq - 16 months in 2010. But wait - not so fast - today he says the "Withdrawal will depend on conditions on the ground."

He must think (and maybe he's right) that the majority of Americans are uninformed and gullible.

He was against the surge to win the war - fought against it - now that it is successful and we can begin withdrawing troops - he says - "see everyone agrees with me."

And now he says it depends on conditions on the ground - WHICH HAS ALWAYS BEEN BUSH AND MCCAINS POSITION!

This guy is so wishy-washy I don't know what he stands for or believes in - it certainly is not victory for our country - it most certainly is his election to the presidency.

A citizen of the world? Probably

A proud patriotic strong leader of the free world? I don't think so.

I don't trust him.

Fighting the Last War

Surpisingly, I read something of interest the other day from the Obama campaign. The issue was preparing for the next threat to the United States and not the most recent. Obviously this possible threat would be a resurgent Russia or a rising China. The question is - are we spending all of our resources fighting the current low intensity conflict while ignoring the strategic and conventional threat from the mentioned tyrannical regimes?

I have to admit - in my previous life as a special operations helicopter pilot in an Air Force run by the fighter mafia, I had no love lost for arrogant fighter pilots that knew nothing that went on under 30,000 feet. In the last few decades, we prepared for the large strategic threat and ignored low intinsity conflict to our detrament; the results of which we have seen in Iraq. Now I fear we have gone too far the other way. We have an historical tendancy to train and support fighting current threats while ignoring the future.

I believe we need to maintain the capability to prosecute and win two wars on a global scale. One of those should be a conventional conflict against a large and possibly nuclear oponent.

This could mean devoting a larger share of our defense budget to buying F-22s, a larger navy and conventional army, in addition to fighting a low-intensity conflict in a place like Iraq.

This will take money and willpower that perhaps the United States does not have right now; however, not following this path could have disastrous consequences in the future.

Oil and the Markets

I get very frustrated when I hear people talk about those evil speculators in the oil markets supposedly driving the price of oil higher for no reason and ripping off poor unsuspecting consumers. There are several market truths that the public needs to be educated on.

1. Speculation is good - it provides liquidity in the market - you have to have someone to take the other side of your trade - the more people involved in the market the better.

2. The market is the best mechanism for setting the price of oil - not the government - the market is telling us the price needs to be higher - that the fundementals in the oil market have changed drastically.

3. Higher oil prices are actually forcing the development of alternative sources of energy which is a good thing.

4. The dependence of the U.S. on foreign sources of energy is bad - the sending of trillions of dollars to other nations and running an unsustainable current account deficit because of it is a national security issue.

Americans need to stop whining and save gas if they don't like the price - or find another mode of transporation. That will bring down the price and also help our national security situation.

I am hopeful that this fuel crisis (if it is one) will force the hand of the U.S. to use its intellectual capital to develop the next wave of innovation in the energy markets and make back some of those dollars.


By the way - McCain/Obama tied - that is good news - please contribute.

Change

IN BERMUDA ON BUSINESS

Being out of the country often gives you a different perspective on the American political landscape - you see the US from an outsider's point of view and you also see their reaction to events that unfold.

Although they may criticize and talk about the US with scorn, I believe most foreigners (at least the developed world) rely on the US to do the heavy work in the world for them. They expect that they can always count on Uncle Sam to solve the world's problems while they complain about the US doing that very thing. Secretly, at heart, they want America to be strong so they don't have to be.

I am starting to sense genuine concern overseas about Barak Obama. The world is already worried about his protectionist leanings. Today, I heard many comments from business colleagues here in Bermuda (mostly English, Canadians, and natives) about the Obama surrogates attempting to discredit McCain's military service. The main comment was, "How can his campaign say these things when Obama never served? It is so arrogant and dishonest." Or, "McCain was being tortured and was given an opportunity to leave - he stayed with his comrades for several more years! Obama sounds like he would do anything to get elected - you can't trust him."

Now I am hearing that Obama is laying the groundwork to flip on Iraq as well - in addition to FISA, campaign finance, town hall meetings, etc. etc.

Who would you want in the Oval Office - a person who while being tortured made the decision to stay? (go ahead and break my arms again for a few more years - I'm not leaving without my fellow prisoners).

Or a person who obviously will do anything, say anything and risk anything to further himself and get elected?

That is the change he is promising - he will change, flip flop, and do whatever it takes to get what he wants. Who cares what is the right thing to do.

I think Obama would have left the Hanoi Hilton in a heartbeat.

The Real Obama

Sometimes small things say a lot - they expose the inner thinking and workings of a person.  Thats why I was so shocked and disgusted when I saw the mutilation of the presidential seal by the Obama campaign.  This stupid action shows me several things.  

1.  He is very arrogant - he is not yet the President - he thinks there is no problem with him doing something like this

2.  He disrespects the United States of America - the history, importance, and the line of great men behind the Presidential seal, mean nothing to him

3.  He lacks judgement and is dangerous - doing something so silly, stupid, and disgusting scares me 

He is not a patriot - he has no respect for the men and woman throughout history who have died for our nation and symbols.  To mock this seal is ignorant and arrogant at best or very disturbing and scary at worst.  I think the latter.

Feeling Better

Welcome to my first post - Thanks for visiting!


I have to admit that I was wondering as of late. Could all the hype about the decline of America be true? The rise of China, a debtor nation, weaker military, falling dollar, credit crisis. These are all serious problems which require serious solutions. However, coming off a recent trip to Europe, I now actually feel fine.

Everywhere I saw the power and influence of the good ole U.S. of A. I stayed in a Hilton with a Starbucks - McDonalds, Burger King, UPS, Fords and IPods everywhere. Articles in the financial press - America breaking its dependence on foreign oil - can anyone say reducing the trade deficit? Dollar strengthening as Europe/Asia economies slow - London begging US presidential candidates to not stop free trade - what we do matters - US becoming first entrepreneurial nation - that is our new frontier.


Editorials in local press - Europe will never become a superpower because they would rather rely on the U.S. for their security and then criticize the U.S. for standing up to our global enemies. The solution in the Financial Times is for the U.S. to become more like them - just like Barak Obama their solution is to "RAISE TAXES." This is scary stuff. Lead the charge in raising taxes globally they say. Obviously this would kill the engine of productivity and revitalization of this country.


We go through waves of creative destruction and rebirth in this country - we are at the bottom of one of those cycles now. Out of the ashes of this downturn in American pride will be the next wave of productivity and invention.


Predictions - Iraq is a stable democracy and friend in the Middle East - trade deficit declining - U.S. leading in alternative fuel industry - next wave of high tech will happen here -for example, in aviation - tiltrotors will be a breakthrough in travel.


Freedom isn't free - we are the best human experiment in history. We have to teach our children to follow on in this tradition - study - work hard - take risk - keep a limited government - self reliance.


We are still the Shining City on the Hill!