US Trade Deficit Widens

The US trade deficit widened more than the expected $31.7B to $36.5B, an 18.2% increase in September.  That is the biggest deficit since January when Barack Obama took office.  It is %15 worse than most economists expected.

Part of the reason is the greater demand for imported energy (i.e., oil) and foreign cars.  What?  People are buying foreign cars after Obama and the Socialist/Democrats made everything all better for the US auto industry by bailing them out with tens of billions of dollars?  Yep

US exports have been rising since May.  Is this good news?  Well, that must mean that there is more productivity and jobs abroad so the rest of the world must be getting better.  The US of course just lost another 502,000 jobs last week to bring the Obama tally to 4 million lost jobs despite his Socialist Stimulus.

Also, Obama’s Socialist Stimulus and monetary policy have destroyed the value of the dollar.  The result is that American goods are cheaper for the rest of the world to buy which also factors into explaining why exports were up.

So the trade deficit is huge and the rest of the world is pulling out of the Chris Dodd – Barney Frank recession and Americans continue to lose millions of jobs and see the value of their money race towards zero.

Great work Barack!

Barney Frank’s Credit Card Solution

The Democrats of the socialist government are clammoring for tougher credit card rules.

Barney Frank, the chair of the House Financial Services Committee says he will fix everything. 

Does it strike anyone as sadly ironic if not angering that the government who has bankrupted Americans to the tune of $10T and decided that the solution was to spend more than they have ever spent before by miles and run the debt to $12T, is telling Americans how they should manage their finances?

Fix everything for who?  For the people who are good and responsible Americans and pay their debts and bills on time?  Of course not, these people do not need “protection”.

Who is being protected?  Barney Frank and the Democrats.  Of course.  They are pursuing all of these socialists programs because they steal from a few and bribe the many with it, minus a percentage for themselves of course.

And how is Frank going to steal from responsible Americans with this regulation of banks?  If banks are told how much money they can charge for one kind of service which in this case is extending credit to people who do not honor their obligations by paying their bills, the banks will be forced to charge more for other things.  The banks will then do things like forcing everyone to pay fees for their credit cards and introducing other fees for services. 

And why not believe him when his list of accomplishments includes presiding over the total collapse of Fannie and Freddie and dragging down the US and other national economies into the worst recession in 80 years.

The socialists solution to the problems they create is always the same: more socialism.

The net effect of this is similar to all other socialist programs: responsible Americans are being forced to pay for people who don’t honor their obligations. 

Perhaps that another reason why Democrats like Frank and the socialists feel such a kinship for each other: neither one honors their obligations and both demand that you pick up the check.

Why Executive Pay Is What It Is

Goldman Sachs has emerged from the government-created financial catastrophe doing quite well.  On the other hand, financial institutions that the government was going to save through its socialist TARP program like AIG and CIT have lost billions and gone bankrupt.

There are three lessons to be learned from this

1. The government cannot run anything efficiently or even effectively.
2. Free markets are always a better choice than government-run socialist programs of wealth redistribution.
3. Running a bank successfully is not easy, not everyone can do it and that is why it is important to share holders to hire good people and good people cost good money.

The reason executive pay is what it is, is becacause that is what the board of directors, the agents of the share holders, say it should be.  And why do they say that?  For the most part, that is what the market requires it to be.  If the share holders did not want to pay it they would either sell their shares or vote in new board members who would cut the compensation packages.  Everyone has their own free choice in what to do. 

That is exactly the opposite of what happened with the government where you had no choice in anything.  You were told you were going to pay and who you were going to pay it to.  You could not sell your shares and then when the government had ridden it all the way to the bottom on your dime they made you give them another dollar.

So if you decide to take the risk of investing your hard-earned money in a company do you want someone who is good or someone who is government?

Consider what was more expensive, the billions that were seized from you and lost lost by the government in their socialist bailout program on companies like AIG and CIT or the compensation to people like those at Goldman Sachs. 

Think about that now in the context of health care because if Obamacare or anything like it goes through, the failures that you see in the banking industry are going to be what you see in health care.

Some people will complain that leading into the meltdown that executive compensation was too high.  First it must be made clear that was not the cause.  The cause was the government regulations in the banking industry.  Keep in mind too that Fannie and Freddie were government-run lenders headded by the Democrats Chris Dodd and Barney Frank.  Obama was on the take from both and Obama’s chief of staff was on the board of directors.  The Democrats had also been in control of Congress for years. 

So the cause was not the banks nor the people running them nor what they were being paid.  The cause was the government.  The executive compensation was not too high, it was what people of their own free will were willing to pay with their own money.  And nobody was complaining when they were all making great gains on their investments as stock prices went higher and higher. 

The bottom line is that people were fine with everything while they were doing well but when they were not it becames sour grapes.  Instead of looking at the entire picture the leftist media chose to focus only on the executive compensation and the socialist government who was the real culprit was only too happy to jump on the bandwagon and make all the noise they could in the hopes of distracting people from really looking into things and seeing that they were responsible.

The best thing that can be done for banking is to let the bad banks go under and the good banks will survive.  New banks may open to fill markets that have been vacated.  A free market will sort everything out in the best possible fashion; free markets always have in the past.

So if you don’t think a corporate executive should be paid what they are being paid the answer is simple: don’t invest in that company and don’t buy the products of that company.  As the stock price suffers from lack of interest and depressed sales the company will either cut costs, hire new people or continue to suffer.  And for all the people that don’t own stock and have put nothing at risk?  Well, they really don’t have anything to say about what those people who took the risk chose to do with their money.

It really is that simple.  What not to do is exactly what has been and is continuing to be done: government interference.