There is an important and virtually unreported story happening on the world stage. While the American Government is embarking on a massive experiment in Keynesian economics, the European continent is stridently against duplicating the policies America is taking to ease the Great Recession.

The Keynesian economic prescription I am referring to is a gigantic enlargement of government as a vehicle for lifting the country out of economic malaise. As America is embarking on a course of massive deficit spending and creating new government programs, people such as European Union President Mirek Topolanek are calling Obama’s proposals a “road to hell”. German Prime Minister Angela Merkel said “I will not let anyone tell me that we have to spend more money” and has been a vocal critic of the idea that spending borrowed money is the way to get the economy moving forward.

The divergence of thought regarding the the way to stave off global depression is a very important story. It is a sad commentary on the bias of the main stream media that there has been almost no mention of Europe’s disagreement with the Obama Administration’s economic policy prescriptions. I say this because so much press was given to Europe’s disagreement with the Bush Administration’s Middle East foreign policy.

Now that Europe has recently elected right-of-center leaders in Germany, France, Italy and other major European countries, the main stream American press no longer feels it necessary to inform the American public that the policies of its government are out of favor in European capitals.  Though our President still has enormous popularity in the European “street”, the economic policies of our current President are markedly different than those policies preferred by Europe’s leaders.

The one major European country that shares Obama’s view that deficit spending, larger government, and more centralized involvement is the path to economic recovery is England. One example of the two countries following similar courses regards the plan to rescue the banks.  When TARP was originally passed, it was supposed to buy up toxic assets from the banks.  However Bush’s U.S. Treasury Secretary ultimately deployed much of TARP’s money by investing it in the banks themselves—-as British Prime Minister Gordon Brown was doing in England.

This brief Youtube clip shows a conservative English politican speaking towards English Prime Minister Gordon Brown  3/26/09 in the European Parliament. (Brown was the equivalent of our Treasury Secretary in the Blair Government)   You may be shocked by the frankness of the eloquent rhetoric.

So this morning I was listening to Air America, the struggling far left radio station.  I rarely find it interesting or funny—let alone informative. However,  I am very interested in knowing what people who are informed from only one political perspective are hearing—and thus believing.

For the umpteempth time I listened to one of their hosts sarcastically snide Sarah Palin. Then I listened to several callers who climbed on the bandwagon to chime in on how stupid Governor Palin is.

In the next segment, the show moved on to talk about how terrible George Bush was. This was followed by several callers who all agreed that George Bush was terrible and did nothing right.  If I didn’t know better, I’d have thought that the program was a replay of a show from prior to the November 2008 elections.

The third segment was about something that is currently in the headlines. The host was telling the audience how it was good that the country is planning on running trillion dollar deficits for the next decade because big problems demand big solutions. At no time did the host mention that the President’s budget included an 11% increase in discretionary spending. There was then a series of callers who all agreed with the host that huge deficit spending was a good thing.

The point of this writing is that the Air America host praised Obama’s deficits after having spent the past four years ranting how the deficits Bush ran up were bad—and why this is a perfect example of why left-of -center radio shows have such small audiences.

You see, I believe the lack of a consistent ideology on liberal talk radio is the main reason the left does so poorly over the airwaves. Whether one agrees or disagrees with conservative talk radio, it is successful because ideas are often discussed in ideological terms rather than in purely partisan terms. In other words, on conservative talk radio, budget deficits are bad whether the President is a Republican or a Democratic.

Secondly, on conservative talk radio, at least 50% of the callers disagree with the opinions of the host. This leads to conversations about the topic in question. (Or at least what poses for a conversation when a host has the ability to shut off a caller at will) Very rarely does one hear on Air America a caller  who disagree with the host. In the odd instance a disagreeing caller is put on the air, the host contemptuously makes sure listeners understand that the caller was a complete idiot.

The result is the type of boring liberal talk radio I described above—with caller after caller agreeing with the host that Republicans are indeed stupid—or agreeing with the host that “XYZ” policy is good because a Democrat is prescribing it, or that the same “XYZ” policy is terrible if a Republican is advocating it.

The question then is begged, why do left wing websites do well while left wing radio shows do poorly?  My hypothesis is that website are measured by the number of visitors it gets.  Radio shows are judged by the size of their audience.

Thus,  left-of-center websites like the Daily Kos are judged as doing very well because it receives lots of visitors.  The Daily Kos has high traffic, but my guess is the average ”stay” is for only a few minutes to read the headlines or commentary.  Reinforcing partisan rants and perspectives seem to be what online readers are looking for.

However, those same partisan rants/perspectives just aren’t entertaining enough to sustain a large radio audience for longer periods of time for people commuting in their cars.  In order for a radio show to keep its audience from changing the station, a host needs to talk about more than the stupidity of the ”other team”.  Radio hosts need to discuss WHY those with a different belief system are wrong.  Otherwise the show isn’t interesting enough for a person to spend their longish commute listening to it.

Thus I believe political radio shows thrive when the reasons behind a perspective are discussed. Because listeners find hearing different viewpoints  interesting, they are willing to stay with a radio show for long periods of time.  Visitors to left-wing blogs are quite satisfied reviewing one dimensional rants because reading blog headlines requires much less time than listening to a radio show.

The markets are moving and you’re on the sideline watching them. Hmm, admit it. You’ve had this fantasy.

You’ve been following a stock that has been going down and down. The moment arrives when the darn thing just can’t go any lower. Like a gambler in Vegas you push your chips into the pot and magic—the stock turns upwards and happy days are here again. You wait and wait, then decide to sell, just before the stock takes a nosedive.

You pulled off the ultimate investment trick—buying at the bottom and selling at the top. Feeling like a pro eh? Get over it. Your strategy is for amateurs.

Ask any professional investor and he’ll tell you that buying a stock that has been plunging, thinking it can go no lower, is like trying to catch a falling knife. Better to wait until it lands and then pick it up.

What does that mean? Simple: wait until your plunging stock has moved up 5-10% from its lowest price. Anything less than that and you may be witnessing a “dead cat bounce”. (Even a dead cat pushed from a height has some bounce when it first lands)

Oh no! Does that mean that I shouldn’t try to sell at the top too? Sorry to burst your fantasy of being a master interpreter of market movements, but the answer is…. Wait.

When a winning stock has moved off its winning ways for a while, it is then time to part with it.

If the above mentioned advice seems counterintuitive, that is because it is. Most people invest intuitively which is one reason the masses aren’t wildly successful stock market investors. The reality is that the vast majority of folks do what seems obvious rather than what works.

After all, when one of history’s greatest investors, the legendary Baron Von Rothschild, was asked the secret of his investment success—-he famously replied “I never buy at the bottom and absolutely never sell at the top”.

Recently there were incidents of sexually charged hazing at a couple of local High Schools. The particulars were quite nasty. Guess what happened.  It was way way worse. In case you’re curious, school authorities are obligated by law to report incidents of child abuse.

I am NOT writing because the school authorities were apparently aware of the hazing activities and not only didn’t take steps to stop it, but seem to be involved in trying to sweep the incident “under the rug”.  My rant regards the “punishment” melted out to school authorities.

While students involved in the activities were rightly suspended, the school’s principal, a coach, a trainer, a couple of principal assistants and a security guard were simply reassigned.  Jeez!  Reassigned?  Shouldn’t these people be fired?

The Catholic Church paid out over $2 billion dollars in settlements partly for not doing more than reassigning negligent authorities.

Hollywood has fed the public an idealized myth of labor unions

So, why were the school employees only reassigned? In my opinion, the answer is the teacher’s union. While we can all pretend that the union exists to help the educational development of our children, the real focus of a union is first and foremost creating bureaucratic strength, then doing whatever is necessary to protect its members, and only then giving attention to the enterprise the union’s members are engaged in.

Let’s be honest. If a principal at a private school had knowledge of sexual abuse hazing, do you think that person would still have their job if the police had to take over because the internal investigation was not proceeding appropriately?

Hey,  I understand that unions were necessary back in the 1900’s when robber barons sent their private security guards to physically beat up workers. But does anyone outside of Detroit think that America today is better off because UAW workers are paid triple what they’d make without a union?

I live in Los Angeles and have dealings with the Board of Supervisors and the Planning Commission.  Twice I have proposed to public officials during meetings innovative solutions to problems only to be told that “the unions would never let us do it.”  Politically speaking, Los Angeles is a wholly owned subsidiary of the labor unions. We all know how that is working out.  With all due respect to the Governator, California is a one-party state that is dominated by the labor unions.  We all know how that is working out.

I am very concerned that Congress will pass the Card Check initiative that labor unions have been salivating over for years. Card Check is an idea whereby workers would no longer vote in private for or against being in a union.  (The very basis of American Democracy is built upon anonymous voting)   Instead workers would be lobbied/pressured by union proponents to sign a card publicly stating they want a union. The Unions believe that without anonymous voting their “lobbying” efforts will be much more successful.

When I was in 2nd grade my family moved to California from the east coast.  My father had to tutor me because the school system in Los Angeles was so advanced. Today, many estimate that the dropout rate at schools in Los Angeles approaches 50%.

I’d think this would cause serious people to worry about the future and put forth innovative solutions. 

Perhaps though, I am over-reacting.  Afterall, the unions and authorities will take care of things.  I guess that means sooner or later, the people in charge of overseeing the destruction of our school system will be reassigned.

Are you noticing that people you’ve known for a long time seem to be getting stranger as the years pass?

Do you find yourself thinking “Oh yeah, suchabuddy was always a bit unusual, but now they are just plain weird.  Heck, if I didn’t know them, who knows what I’d think if we met for the first time?”

I have a theory for why this situation isn’t unusual. In fact, if my theory has any merit, it virtually demands that everyone gets a bit stranger over time…including this author 

The essence of my theory is that people all deviate from the “norm” to some degree. Some deviate just a tad, while the uniqueness of other people is more pronounced.

Here is a graph. Let’s assume that “normal” behavior is a vertical line along the y axis and ”weird” behavior is the plotted horizontally line along the x axis .

My theory holds that a person’s quirks can be thought of as behaviors along a point in time. When a person is young, their odd behavior is only a little bit off the vertical line that represents normal behavior.  Over time, the angle of that person’s odd behavior gets wider—-and thus further from the line that represents normal.

For example, a graph of someone’s behavior at ten years old might show them only 3% off the vertical line representing “normal” behavior. At 20 years old the trajectory of the same person’s graph would show their behavior 6% off the graph of “normal”.  By the time this person reaches 50 years old, they are 15% away from the vertical line representing “normal”.  At this point, it is hard to classify their uniqueness as anything other than weird.

Thus when you ponder whether your friends are getting weirder, or are you just getting older, the answer is yes—-to both questions.  Your friends are indeed getting weirder.  The reason is because both of you are getting older.

I believe there is a terrible misunderstanding about the essential goals of the two political ideologies in this country. The Left looks at the Right and thinks they’re selfish, greedy, bloodthirsty and perhaps even evil. The Right looks at the Left and thinks they’re naïve, foolish and just plain wrong.

Do you see a Vase or Two Faces, or can you see both?

My first belief when it comes to politics is—-whether you are a Democrat or a Republican,  liberal or conservative, a left wing “wacko” or right wing “extremist”……both sides of the political spectrum basically have the same overarching goals.  They just believe in very different solutions to the same set of problems.

It seems to me that virtually all Americans want a better future for their children, safer neighborhoods and improved schools. They want justice and prosperity. They want to be protected from foreign threats and not  rely on outsiders for energy needs. They want the laws of the land to be moral and for elected representatives to put the nation’s goals before their own personal interests. They want their government to be efficient and for everyone to have a reasonable chance at obtaining the American Dream.

My second belief regarding politics concerns what I call the “highest ideals” of the society.

On one side are people who believe the highest ideals are COMMUNITY and FAIRNESS.  People on this side of the political equation (Democrats, liberals, left of center) believe citizens have a duty to work together and create a balanced society. This political philosophy wants an active government to enact laws addressing inequalities of results and to use the power of the state to create a more perfect union.

On the other side are people who believe that the highest ideals are the INDIVIDUAL and LIBERTY. (Republicans, conservatives, right of center) These people believe it is the relative equality of opportunity that matters, not its results.  This political philosophy wants the state to have a smaller role and to narrowily interpet its duties delineated in the preamble to the Constitution. (Establish Justice, Insure Domestic Tranquility, Provide for the Common Defense, Promote the General Welfare, and Secure the Blessings of Liberty)

The most famous economic example of the different approaches each sides take to a common problem is “fish or fishing”.

Those left of center see a hungry person and think it unfair they he/she is wanting.  They believe the community should chip in and give this person a fish a day to eat.   They feel it only fair that  taxes be raised upon those who can afford it so as to give more social services to citizens in need. They want a robust government that is morally obligated to improve society.

Those right of center see the same hungry person and believe using government’s power to give him/her a daily fish ultimately makes individuals reliant upon the state. They argue higher taxes and an expanded state restricts liberty and that government distorts the entrprenuerial spirit of the economy.  They believe in an approach which creates incentives that leads hungry individuals to learn to fish for themselves.

As for me, I look at the issues and weigh the merits of each side’s case.  I believe that neither side is 100% right or 100% wrong. The political belief system whose viewpoints seems strongest to me is the side that gains my support.

My grievance with American politics is that political discussions often are nothing more than meaningless mudslinging rather than ideologically based conversations about the merits of opposing viewpoints.  I am thoroughly bored by the rhetorical discourse of partisanship which views everyone on “their” team as good and honorable and everyone on the other side as stupid and disingenuous.

In my opinion, citizens need to understand that policy issues almost always have two sides, and that both camps have points that make some sense. I believe that depending whether you find the Community or the Individual a greater ideal— whether you believe Fairness or Liberty is a greater ideal—will lead you to cast your lot with one side or the other.

That is as it should be—-until the other camp has a case so strong that its arguments weigh more heavily for you than the opposition’s—and then you reconsider your political beliefs.

As a curious person, learning for me is not a destination but rather an essential part of the journey.  I’ve spent my fair share of time in the classroom, having gone through graduate school.  I once took it upon myself to read 50 books from the classic section of the book store in a single year.

My various experiences, from guiding a small business to growing up in the Valley during the 70’s,  allowed me to accrue a healthy amount of what I’ll call street smarts. However, as much as I learned from the usual sources, in many ways my best instructor was a board game called Diplomacy.

Invented in 1954 by Alan Calhamer, Diplomacy is said to have been John Kennedy and Henry Kissinger’s favorite game. Like chess it has but thirty-odd pieces. The Diplomacy board, a map of Europe, has about the same number of spaces as a chessboard.

However, unlike chess or any game I know of, all pieces move simultaneously and there is no element of luck. To me, the game’s most interesting element is that it is played in a state of anarchy,  which means players don’t have to honor their agreements. There is no official punishment for ill behavior other than other players learning that your promises are cheap.

Diplomacy is a great teacher because it illuminates human nature and the battles we all face trying to make our way forward in life. In short, the game provides a microcosm of how people behave in varied circumstances.

I’ve seen people be extraordinarily resilient when facing challenges while witnessing other people crumble. I’ve watched some players handle pressure well, be innovative in their thinking and use socially interactive diplomacy to improve their position. I’ve seen other people become insulated and greedy when they’re ahead and quit when they are set back.

Diplomacy has taught me to think of the interests of others and to work to find ways to cooperate.  I’ve learned the value of thinking ahead and in making contingency plans.  I’ve learned to protect against worst case scenarios and to discover what motivates people.  I have seen first hand that not everybody is interested in the same goals.

Probably the biggest lesson I internalized is that when plans don’t go as hoped, keep faith and search for other solutions.  I’ve learned to look at problems from all angles and that doing the unexpected often pays dividends.  I’ve learned that as long as you stay in the game, there is hope you can turn things around.  I’ve discovered that people and events are wildy unpredictable.

We all know that some of the most important things to be learned in life are not formally taught in any class or training program. Diplomacy taught me the truth in Louis L’Amour’s saying “there will come a time when you believe everything is finished, and that moment will become a new beginning.” Not bad for a $23.95 board game.

Ah, remember when attending a baseball game at Dodger Stadium was something Joe Sixpack could afford?

How sporting, buy a dog and a beer and get change back from your $20

Well, these days, I think we’re going to see a lot fewer people who go to sporting events shell out the kind of crazy money for concessions anymore.

Let’s take a look at some prices. A tall beer ($12.00) and a hot dog ($4.50) barely gives you change back from a $20 bill. Want a drink of water….$5.00. Oh, did I mention that to park your car is $15.00.

Jeez, the Dodgers are charging up to $45 to watch Spring Training games—that don’t even count!

Thank goodness Manny settled for $45,000,000. Else who knows what the prices at a baseball game would be.

Sorry Dodgers, I don’t mean to just bag on you. Back in the 1980’s when I was in my 20’s I used to go to lot’s of Laker games and playoffs. Now that I’m in my 40’s and making a lot more money, there is only one way I watch the purple and gold….on TV. The prices of tickets and are just too stupidly high.

It will be interesting to see what happens to concession sales at sporting events this year. Because a lot of ticket sales here in Los Angeles are corporate bought, attendance probably will remain really high. People want an escape, as witnessed by the great quarter the movie industry is having. However, at the margins, I’m pretty sure a lot of people are going to pass on going to that extra game due to ever higher ticket prices and a precarious economy.

However, when it comes to over priced popcorn, hot dogs, cokes and beer, I think the average person is going to eat before and after, and save themselves the embarrassment of being ripped off on food prices.

“We need earmark reform,” Obama said in September during a presidential debate in Oxford, Miss. “And when I’m president, I will go line by line to make sure that we are not spending money unwisely.”

Well, with the Congress about to pass a $410 billion budget, an 8% increase, the whole bluff about earmark reform is just that. Let’s look at what some of those 9,000 earmarks are for:

$2.2 million for the Center for Grape Genetics, $1.8 million for a honey bee lab, $200,000 for tattoo removal, $1.8 million for Swine Odor and Manure Management Research, $2.9 million for Shrimp Aquaculture, $443,000 for Beaver Management and Control, $1 million for Corn and Soybean Research, $657,000 for Brown Tree Snake Management and on and on it goes. Almost $8,000,000,000 for various Congressional pet projects.

Excuse me, but we don’t have $8 billion for those projects. We are borrowing this money. Then we’re going to pay interest on it, and then we’re going to have to pay it back. Heck, we don’t have the $410 billion either, so why is the budget growing when it should be shrinking?

Our elected representatives don’t get that the world has changed. This country, our planet, is on the verge of a potential depression. Wasting precious resources on absurd pet projects is something that needs to stop.

Unfortunately, just as CEO’s at financial institutions had an incentive to rationally act in a negligent manner, our politicians think themselves rational and reasonable “buying” votes back home with pork barrel spending. Do we have to wait until there is a total collapse of the economic system for the government of the people and by the people to start legislating for the people?

Mr. President, when you told the nation to believe in hope and that change was on the way, it was music to the ears of so many people.  When you sign this pork laden bill, all I’ll be hearing is the same old song.

The incentives were perverse

One can hardly look at the wreckage on Wall Street without wondering—-what led top paid CEO’s at financial institutions to behave in a manner that allowed so much carnage?

I say this not because CEO’s thought this day of reckoning would someday be upon us, but because they knew it possible and yet did not insure that their institution wouldn’t be destroyed.

I believe a main reason CEO’s didn’t make protection of their organization their top priority was because incentives pushed them strongly in other directions.

If Lehman Brothers, or Citigroup, or AIG had been owned by the CEO, do you think the OWNER would have kept in place an amount of risk which could theoretically explode the entire company?

But, if you are a temporary steward, a CEO who is compensated annually and judged quarterly, there is a rational reason to get a little more aggressive. After all, your compensation is structured so that you receive a large payoff when there are immediate gains. In addition, not only do you personally receive a great benefit from immediate gains, but stockholders cheer.

The following year, it is rationally reasonable for a CEO to be a bit more aggressive, and then a bit more aggressive, and then a bit more aggressive.

After all, bonuses are paid every year. As we’ve now witnessed, this pattern continues until a rare something comes along and causes the overleveraged machine to crumble. After all, if the risk factor keeps increasing, eventually the cycle comes to its inevitable end.

You see, CEO’s of large companies generally don’t actually OWN the company they are controlling.  Thus they can be blinded by the immediate benefit of ever larger profits—which leads to ever larger bonuses. Creating long term financial security for “their” company doesn’t lead to outsized pay packages.

I believe that far too many Wall Street CEO’s reasoned that their decisions were rational because incentives rewarded them so heavily for acting negligently. The temptation to achieve ever greater short term profits was too great. For a non-owner CEO, the incentives to manage conservatively so as to assure long term financial security was simply too small.

Look at the many medium to smaller privately held regional banks that are in solid financial shape today. They were small businesses that grew to larger institutions due to the good management of their owners. Smaller banks are generally owned by people that actually run their bank. Multinational institutions are “owned” by thousands of stock holders.

One of the reforms that needs to be instituted by Board of Directors is structuring CEO compensation so that it agrees fully with the long term financial health of the business.