Our political system creates winners and it creates losers.  It has done that since there was a political system.  It does that no matter the party in power.  We are watching the reshuffling of the seats of power in Washington now, and that is a great thing to watch since it did not involve a military coup or the forceful overthrow of one regime in favor of another.

The winners and losers are being resorted as the result of the most recent election.  It is interesting to me that I see many of the same faces that I recall seeing over the course of time.  They seem to ebb and flow almost like the tides.  They may be "out of favor" for awhile and then they're back "in favor".  In their cases, there is relatively little difference between the two except that there may be more prestige when they're "in favor".  Money always seems to flow in their direction although it can be diminished when they are "in favor" if that means they hold an office in the government of our country.

We shouldn't anguish over their plight for too long since they seem to make up for any financial duress suffered when they 'retire' from the government position.

Government employees are adept at remaining winners.  Some in Milwaukee County walk away with a million dollars in their pocket at retirement.  Few are ever laid off even though that threat hovers every once in awhile.  All have solid benefit programs.  Few seem to be overworked.  It seems almost impossible to "privatize" any of these positions as we see from the trials and tribulations of Scott Walker as Milwaukee County Executive

Some winners seem adept at remaining winners almost without regard to the party in control.

Some losers seem adept at remaining losers, too.

The perennial losers of whom I am thinking are us...the taxpayers.  It seems we are always coming out on the 'short end of the stick', doesn't it?

Just over the course of three days in November, we learned why we are in the column called "losers".

MATC was given the seemingly perpetual right to tax us to the tune of at least $5.7 million every year since we are blessed to be part of that taxing district.  Us taxpayers took another one in the shorts!

Governor Doyle was quoted as saying "the pain must be shared" in speaking of the current $5.4 billion expected shortfall in the next biennial budget.  We know to whom he was speaking...us taxpayers!

Then to add insult to injury, three gentlemen wrote an article called "How to raise money for our state" that was published on JSOline on November 22nd.  I tote up the great ideas they espoused:

• the Doyle proposal to increase taxes on oil companies and hospitals to the tune of hundreds of millions of dollars
• a sales tax increase of 1% that would raise something on the order of $800 million per year
• the extension of the sales tax to non-medical professional services like tax preparation and accounting services that would raise some $300 million per year
• the extension of the sales tax to business services that would raise $230 million
• closing business tax "loopholes" for companies doing business in and out of Wisconsin (so-called "combined reporting") that would generate an estimated "several hundred" million dollars a year.
• elimination of something that is called the "domestic production deduction" that would 'only' impact companies with over $100 million in assets and that would yield "at least $40 million"
• changing the taxing of businesses from that of taxing profits to a system where business receipts would be taxed instead (so that a business not making a profit would still pay taxes) which would generate some $400 million
• increasing the top rate on personal income tax from 6.75% to 7.75% ( a nearly 15% increase) which would raise another $180 million
• taxing all capital gains thus adding some $280 million to the treasury
• restoring the tax on the first 50% of social security earnings to get another $100 million
• elimination of a thing called the "itemized deduction credit" that would 'only' hit people earning more than $100,000 per year thus generating $320 million
• bringing back the tax on inheritances that would generate another $95 million
• and, last but certainly not least, restoring the annual inflation indexing of our already highest in the nation tax on gasoline that would bring in another $32 million for every penny of gas tax (that would mean something in the range $1 billion annually if the gas tax is now $0.30 per gallon)

I certainly appreciate their attempt to be helpful but I doubt that our governor and the senate and the assembly majorities need any help to raise taxes.

What is forgotten, ALWAYS, is that it is us losers...us taxpayers...who pay every penny of every tax levied in the state in one form or another.

Taxes always find their way to the lowest rung on the economic ladder, and that is us, the consumer and the taxpayer.

There certainly are winners and losers.  Wouldn't it be wonderful if we could experience being a winner once in awhile?

And...isn't it amazing that we never learn how much could be saved if some of the jobs would be eliminated, and if some of the benefits would be reduced, and if some of the massive 'give-away' programs were curtailed?

Yup.  I'm hallucinating, all right!

Okay, I lied just to get you to look; because, not many people read when I write on this topic...even though it is critically important! 

This is really about Wisconsin and its plan to require all small businesses (50 or fewer employees) to have health insurance.

I am a small business person and I do provide health insurance.  I don't want to be forced to do that, since I might be unable to stay in business someday if that were to be a requirement.

It is bad enough that Wisconsin would tell me I have to do this, but it is also going to ultimately tell me what plan I have to subscribe to in order to provide the required coverage.  I will be forced to buy my health insurance through something called BadgerChoice and a new concept called a 'connector'.  Massachusetts has been using a 'connector' for a couple of years; that plan has exacerbated the shortage of primary care doctors, has driven many insurance brokers out of business and has been short of money since its inception (this leads to rationing of care, by the way).

As I drive through Germantown, I see a bunch of what are called 'small businesses'.  I recognize that there are more employees employed by small businesses in Wisconsin than are employed by big business.  I am among the roughly 50% of small businesses that are able to provide health insurance and I do that because it is good for my business and for my employees...and therefore for my customers.

There have been rumors circulating about a new small business health plan that was being touted in very quiet sessions using a power point show that had been designed by the Wisconsin Department of Health Services that is now run by Ms. Karen Timberlake who obviously gets her marching orders from Governor Jim Doyle.  The Business Journal published an article today that discusses this program.  I know enough people in the benefits industry to have heard about this several months ago, and dreaded the day that it gained enough steam to break out into the light of day...at least partially...since there are a lot of things that we're not yet being told.

By the way, Ms. Timberlake is quoted in this article as saying, "I would like to avoid having small businesses opt out if they already have a good deal.  Otherwise, the program will only have high-risk participants and insurance will still be unaffordable."  That is why I said that we'll be forced to join this plan.

This is one of the 'great benefits' of the new Democrat-controlled state government.  They can make this happen without regard for whether or not it is a good thing.  They have wanted this for a long time, and by golly, they're going to have it now that they are in absolute power.  They need some "Pass Go & Collect $200" cards from the Feds and that will happen, if not already in place, because the Dems control that level of government, as well.  We voted for change, and we're gonna' get it whether we like it or not.

What is worse is that this is being cobbled together in the new state budget so that it will not be a stand-alone bill that can be debated in public.  This is the same state budget that now has to find ways to handle a $5.4 billion funding shortfall.  Tell me what comes to mind when you see this great new program being foisted on the small businesses in Wisconsin at the same time we have a huge hole needing to be filled?

TAX INCREASES!

On top of tax increases, there will be more and more vacant store fronts and more and more people unemployed; and it will be able to be traced directly to this garbage.

How appropriate that this would surface just as we prepare to "stuff" our turkeys.  Those aren't the only things being "stuffed".

Hedged promises...

Promises are made in every election campaign, and especially in presidential election campaigns.  We're told that one candidate will do this for us and the other will do that for us.  We are made promise after promise, almost on the order of a 'can you top this' game.

Today, as the president-elect makes his preparations for the assumption of office, there is a decided 'tamping down' of his promises.  Those promises are said to have totaled some $135 billion per year.  Those are the promises that can be specifically identified.  There are another 'passel of promises' that we'll never be able to price because they were implied to special interest groups and/or made in somewhat more private settings as deals were cut.

Already, we see and hear that some are "shocked" that their pet things are being relegated to the back of the line so far as promises to be kept.  There is a very simple thing that all should remember, and that is this:  If you vote for a person on the basis of promises made that will favor you or your special interest group, you need to step back and reassess just how you'll make voting decisions in the future.  After the campaigning is done and reality begins to reestablish itself, we realize that not every promise will be kept, that some will but they won't resemble what you expected and that some will result in nothing like what you expected they would.

Today, there simply isn't $135 billion available for the grandiose promises made on the trail to the White House.  And, even the money that may be available will be allocated according to lobbying and the back-room deals in Congress.  Your needs and my needs be damned; there are more important things that have to be accomplished...such as the payoffs to those who got the next president to this point.  And that is the case no matter which ticket won the popular vote.

Character would be a much better barometer with which to gage decisions than promises which were probably only intended to gather a few more votes.  I hope all of us voted on that basis...but I am skeptical.

Bail-out expectations...

It is amazing to me, although it shouldn't be at my age, to see the length of the lines of those special interests seeking a government bail-out.  The Freddie Mac and Fannie Mae sub-prime mortgage debacle (Barney Frank, Christopher Dodd, and Charles Schumer continue to try to hide from their special culpability in all this) pointed out just how shaky the economy was.  That proved to be more than the economy could swallow without massive corrections.

And, it showed the truly global nature of the economy...every country was in a very tenuous position economically and all are now in the tank...except maybe for China and maybe for India.  Even the oil sheiks are pinching pennies or whatever it is they pinch.

Enter stage-left...

The likely actors were lined up before we knew the magnitude of the debacle to come.  The investment banks, the insurance companies, the commercial banking industry, the Wall Street stock barons, the hedge fund managers; all were waiting for their piece of the bail-out.  So some $700 billion was thrown into a thing called TARP and the Treasury Secretary, Paulson, was given the go ahead to steer us through.  Of course, Congress began almost immediately to try to seize the tiller and steer where it thought it could garner the greatest political gains.

Detroit has been in shambles, and that happened long before the most recent economic decline; and that is in no small part courtesy of both federal and state politics and excessive payroll costs, both labor and executive.  The auto makers were 'given' $25 billion for "green" manufacturing change-overs.  That money has yet to be dispensed, by the way, as is so often the case when Congress does something like this.

The Democrats are now working their behinds off to force the Bush administration to move ahead on the next major phase of the 'bail-out' by trying to get a new hand-out through in the coming "lame duck" session starting tomorrow.  The obvious reason behind this is simple, they can then point to one more "failure" on the part of 'Bush 43' when this all goes down the toilet...which is most likely where it'll go.

The Republicans, of course, are trying to sit this one out by saying that the $25 billion of "green" money ought be the bridge that Detroit is seeking, to force the Democrats to finally have to show some political courage of their own come January 20th.  It would make the Republicans happier if they were able to paint the Dems with the brush that had been reserved for President Bush and the Republicans.

Underlying all this action on the 'stage', to which I referred earlier, is the problem you and me are facing as members of the audience for this multiple act thriller/dark comedy.  Yet again, we see that politics trumps everything in Washington, D.C. 

Our representative democracy is the greatest form of government ever seen on this earth, but it sure has its seamy and vulgar sides...and we seem to be witnessing most of it today.

And you and me are the only people who can make that less a problem as we cast our future votes.  We must demand better...and we must punish those who disobey our demands by sending them home!

A few short weeks ago, our governor mentioned that we would be contending with as much as a $3 billion budget shortfall in the next biennium.

A few days ago, that number was escalated to as much as $4 billion.  At that time, the governor was quoted as saying that he would do everything possible to avoid having to increase taxes.

Today, we appear to be staring a $5 billion budget shortfall in the eye, and, while he says he will do everything possible to avoid tax increases, there is some mention of income tax and sales tax.

I am reminded of that age old 'frog in the water' story.  We're the frog and the State of Wisconsin is the water and the elected masses will prove to be the hand that turns the heat up so that we boil under the strain of tax increases.

In the intervening few weeks, there has been no talk about how the budget can be cut to accomplish the magic 'balancing' act.  The state budget has been rigged for this failure for awhile.  Handy dandy accounting games have been used to continually push a significant shortfall into the next biennium in order to help "balance" the current biennium. 

That and the use of funds 'stolen' from every little rainy day money pot the governor could find have, to mix metaphors, kept the wolf from the door; but the 'big, bad wolf' has just huffed and puffed and the door is about to cave in on top of us taxpayers.

There is no other money available.  There are only budgetary cuts or tax and fee increases.  Guess which will be used to get the majority of the shortfall covered.  Oh, there will be some marginal cuts for our consumption but nothing even approaching what is required.

What will they cut?  Education?  Are you joking?  The new health care program they're trying to foist on us?  Are you joking?

I'm sorry to tell you that I think we all better buckle our chinstraps; we've a rough ride ahead and the Democrats are in control.  They haven't been too anxious to reduce spending as I recall.

Maybe I'll be surprised; I certainly hope so.  I'd love to take a bite of that crow!

The voters in Wisconsin have decided that the Democrats are going to run the state for at least two years.  They control state government and can, if they choose, push their way past any Republican opposition.  That remains to be seen, however I suspect the power vested in the Democrats will be too much for them to resist.  Just as there is a 'pent-up demand' in the Democrat majority in Washington, there is also that same force at work in Madison.

Some of the things I expect we'll see include (in spite of my protestations):

• Smoking Bans that apply to all public buildings, and some outdoor public spaces across the state...
• These bans will follow the patterns set by some municipalities and counties that have taken action already.  The ban will probably include taverns and gaming establishments.  The ban will not attempt to outlaw tobacco products but could also include additional taxation above and beyond that we've seen in the recent past.
• These bans will, unfortunately, trample on the property rights of business owners.  Tavern owners should be given the right to determine if they will appeal to non-smokers or to smokers.  Cigar bars and retail smoking parlors should be permitted to continue to exist.  Second-hand smoke and its dangers to employees will be the mantra and "property rights be damned" will be the battle cry.
• Expansion of state-funded health care plans...
• There will be little or no opportunity for a rational discussion of those already existing programs where lessons could be learned because the controlling party members want no such 'light of day' to shine on their ideas.  That proved too damaging in the past, and they have the raw power to ram this through.
• We risk moving too far down this slippery slope so as to inhibit a return in the future as this behemoth proves to have been the wrong decision.  These incursions in the 'free marketplace' will carry a dastardly price tag.
• There will likely be more 'mandated benefits' than in the past in spite of the fact that a significant part of our cost issues can be laid at the feet of existing over-zealousness on this front.
• Education Economics...
• I am convinced that the QEO (qualifying economic offer) provisions in place now will be eliminated or significantly altered and that this will lead to higher taxes within a year.
• I expect that there will be a significant change in the manner in which education is funded and there is a present danger that, without adequate debate, those results will be skewed toward the establishment and not the students and taxpayers.
• I expect to see limitations on alternative forms of education such as home schooling, Internet Schools, school choice and on and on.  WEAC owns the Democrats and it will demand its payback.
• Increased Taxes...
• At the very time when our state should be cutting expense to reduce the tax burden, it will add expense.  The state budget is already some $3 to $4 billion underfunded.
• Mandated programs implemented at the state level are unlikely to be adequately funded, so localities will be forced to increase their taxes to comply.
• Caps on local tax increase rates will be lifted or significantly modified so that property taxes can and will increase more often and at higher amounts.  There is never 'enough' money and there are always 'good programs' that really need to be enacted.

My concern is that the controlling party will be unable to keep itself from making too many things on its 'wish list' reality, and we will all suffer as the result.

I really hope that I am wrong

Now that the dust of the election returns has begun to settle, the talk of the governance approach of our new president has taken flight.  I have read several pieces that discuss this subject and heard several discussions on the same subject.  The Wall Street Journal had an excellent editorial today titled Obama's Real Opposition.

The subject of that piece was the old line liberals who will be pushing and pulling President Obama as they wish, to make him decide as they wish him to decide.

There are many who believe that President Obama will actually move to the center left as he takes office and begins to face the daily decisions required of him.  There are also many who remind us of his very liberal voting record and suggest, therefore, that he'll govern from the left or far left.

We are reminded of those with whom President Obama will interact:

• David Obey from our own state who wants to slash the defense budget to get money for his social entitlements.
• Barney Frank who recently said that he thought defense could be reduced by 25%.
• Chuck Schumer who continues to push banks to lend more money even after being heavily involved in causing the Freddie Mac/Fannie Mae problems due to similar tactics.
• George Miller who heads the House Education and Labor Committee who is talking about 'nationalizing' 401K and other private pension plans to free up all that money for other purposes.
• Jim McDermott who chairs the House Ways and Means Committee and who seems to like Mr. Miller's ideas.
• John Conyers who loves the idea of the Europeans indicting President Bush and Bush officials for 'war crimes'.
• Henry Waxman who wants to grab the Chairmanship of the House Energy and Commerce Committee from Rep. John Dingell so that he can really push the global warming agenda.
• Pete Stark who believes that a Canadian-style single payer health care system is exactly right for us.
• Rep. Pelosi whom we presume will retain her leadership post will continue down the very liberal path she has trod to now.
• Sen. Reid whom we presume will continue in his leadership role, although he could find that a difficult task given his miscues so far.

These men are well-seasoned congressional combat veterans who know the inner workings much better than does the new President Obama.  They will stop short of nothing to take advantage of what they see as a 'significant mandate' from the United States electorate.  They are running short of time in which to make the country over into the image they believe is best for us all; they will not be anxious to slow their pace simply because a new president wants that to happen.

President-Elect Obama has seemed to recognize this in his appointment of Rep. Rahm Emanuel (D from Chicago) as his new Chief of Staff.  This is the single most powerful position in any White House.  The person in this role manages the President; he determines who the President will see and what he will hear; he selects those on the staff who will be granted limited access to the President; he will play a very large part in determining the programs the new president will pursue and the order in which various initiatives will occur.  Everything goes through the Chief of Staff.  Everything.

Emanuel is a rough and tumble Chicago-style politician.  He is liberal.  He is going to be a tough Chief of Staff.  The battles between him and those in Congress who believe they deserve the President's ear will be legend before this tour of duty is finished.

I suspect that our new president will be pushed to the left of center very quickly whether or not he wishes to be in that position.  The question in my mind is just how far left of center he'll end up after the first hundred days that seem to be so magical.

He will have inherited a terrible economy and a country with so much debt that it will be able to do only limited things in the way of new programs.  Against that backdrop stand the legions such as described above who simply don't care about this, that or the other.  They are intent on getting their way, on making their imprint seen.

This Congress has it within its power to limit this new president to a single term, as was the case with President Carter, if it forces the new president too far to the left and pushes too hard for what it thinks is now being demanded by a country they believe to be left-leaning like themselves.

First, thank goodness that the elections are essentially over this morning.  This seemed a particularly grueling election season although I don't quite understand why.

From a personal perspective, I won some and lost some; probably like many of you.  Now, I'm trying to determine what I think will be happening as the result of the votes made yesterday and earlier by absentee ballot.  I haven't even thought about the national implications, but have some ideas about our state and local implications.

The Democrats achieved the 'trifecta' they have desired by taking control of the Assembly, and keeping control of the Senate and statehouse.

Some of the results that I foresee are these...

• The state budget is in a three to four billion dollar shortfall situation,  I think we'll see an increase in the sales tax statewide, and that we could see an increase in our income taxes, as well.
• The municipalities have long complained about the limitations they face on local property tax increases.  I think those limits will either be removed or significantly increased so that we will almost certainly see property tax increases at our village level.
• The state teachers' union, WEAC, has long advocated the removal of the QEO (qualified economic offer) rules in Wisconsin.  I think we'll see QEOs gone and that will result in some very large increases in teacher compensation and benefits thus increasing our local property taxes on that score, as well.

Among the other hot button issues will be the discussions concerning a state run health care plan for virtually all citizens.  This has been happening incrementally in the various BadgerCare plans, but I expect to see a real push in the coming year.

Given the budget shortfall and the pain that will cause, I suspect that other programs will have to be put on the 'back burner'.

Other things, such as the ban smoking movement will be much more visible.

Some have wondered if our current governor might be selected to become part of President Obama's leadership team.  Governor Doyle is actually less liberal than is the lieutenant governor, Barbara Lawton.  I won't be surprised if Governor Doyle is tapped for a role in Washington, but I'll grit my teeth at the thought of a "Governor Lawton".

There is more and more speculation as to the potential that we'll see a 'clean sweep' by Democratic candidates on Tuesday, November 4th at both the state and federal levels.  I hope that isn't the way it turns out, but I'm tiring of being beaten about the head and shoulders every time I read a newspaper article or watch the bulk of the television news items.  Maybe that is the intent.  If us conservatives can be sufficiently demoralized, maybe we'll just stay home.  Not this conservative!

What do I mean by 'clean sweep'?  I refer to the potential that both the Assembly and the Senate in Wisconsin will see a sufficient Democratic majority that will be able to pass anything they wish in spite of the number of Republican votes that could be massed, with assurances on most such items that those will be signed into law by the Democratic Governor Doyle.

Similarly, I refer to Democratic victories in both the U.S. House and Senate that will be Republican-proof and that will likely find favor with a Democratic President Obama.

Jay Weber has done a good job on setting forth 23 items that could be part of the triumvirate of Sen. Harry Reid (D), Rep. Nancy Pelosi (D) and a President Obama and you can find those by clicking here.  Things included on Jay's list include renegotiating NAFTA, ending secret ballots in union organizing, government-run healthcare encroachments, reintroduction of the 'Fairness Doctrine' to control conservative access to the airways, and so on.

At the state level, we could easily see state-run health care, the increase in costs of education, ever larger portions of our income going to state and local taxes,  more and more loss of personal freedoms and so.

There has been, in most of our history, a certain "check and balance" relationship in most of our governments so that not everything that was proposed was ever likely to be passed.  That 'protection' could disappear for years if we see the 'clean sweep' at the state or federal levels, or both, as the result of our national election on November 4th.  Our country tends not to flourish well under such governments regardless of party in power.

Vote your conscience next Tuesday!

There is a very real sense that we have been placed in a new world of politics.  I'll call it Politics 2.0 signifying the coming of a new genre.

As I watched the debate last evening involving Barack Obama and John McCain, it was as if I was witnessing a battle between the old and the new politics.  And, that is exactly what we've been hearing during this twenty-month plus campaign.  Obama has been pointedly making himself the leader of Politics 2.0 so far as the race for the presidency.

Obama has appealed to those of us who are younger and has been successful.  He outlived his Democratic challengers and he appears poised, if we are to believe the pollsters and the mainstream media, to become our next President.  He is a masterful communicator so far as style points.  Too many of us are unable to, or don't feel the need to, dig beneath the smooth, suave surface to get at the underlying meat in his answers and in his speeches.  He has run a campaign of nearly two years in length and we are still waiting for some definition to his talking points; we'll wait until after November, 2008, too.

Obama has deployed one of the most effective campaigns I can recall, and I've been an active observer since Au H20 (Goldwater) days.  He has had an advantage in campaigning against one of the 'old' pols who can 'barely' communicate when viewed in the glow of Obama.  He has, in my opinion, had the advantage of having the mainstream press firmly in his pocket for well over a year, if not longer.  I have seen mainstream "journalism" largely trumped by Politics 2.0, and I have seen the Internet used to very nearly its current maximum potential by one candidate. 

As if this wasn't sufficient, we see our economy reeling and that almost always portends defeat for the party in the Whitehouse without regard to the cause or finding of true fault.

I have made no pretense as to my views of the final two candidates.  I am a fiscal and social conservative and there is but one place for my vote.

That having been said, I can say that I am fearful of a Democrat sweep that leads to control of the Congress and of the Whitehouse.  If that should occur, I will see much of which I disapprove happening in our country.  If there is nothing remaining but a vocal, versus meaningful, minority, the minority's voice will be silenced except for the Internet and talk radio for the next four years.

While our federal government usually takes a long time to get anything accomplished, that is usually because the two-party system is sufficiently active and potent to thwart some of the less-than-wise moves attempted by the majority.  If the Democrats sweep to the degree that they have absolute control in both the House and the Senate, and if they have Barack Obama in the Whitehouse, we'll see an activist government such as we've not before witnessed.

We will see Supreme Court justices that will re-interpret the constitution to their liking.  We will see congressional hearings into everyone who ever served in the Bush administration.  We'll witness the complete take-over of healthcare by the government.  We'll see 'progressive' taxation policies that will cripple the economy and stifle the growth of businesses.  We'll see states governed by liberal majorities creating laws recognizing same sex marriage.  We'll see attacks on our rights to keep and bear arms.  We'll see our education system subverted to become a political indoctrination tool beyond that which already exists.  We will see an inexorable slide toward socialism.

I hope that I am wrong...but I fear that I may be correct.

Kimberley Strassel of the Wall Street Journal has done a good job with her Obama's Magic opinion piece in today's Journal.

There will be a lot of "magic" required to accomplish all that he has promised us, but we're accustomed to 'rude awakenings' following  Presidential campaigns.

The story of five school districts that invested borrowed money in an attempt to earn larger returns is back in the news as the result of their court case against the two organizations that sold them the deal.

This is an up close and personal portrayal of the rather esoteric things referred to as CDOs...Collateralized Debt Obligations.  The CDOs that were purchased contained some of the Fannie Mae/Freddie Mac garbage that blew up a short time ago.  So, bad mortgage deals that some politicians wanted made so that their constituency would continue to vote for them have come home to roost in five school districts in Wisconsin.

Up until recently, we've listened to news and watched hearings on television and been somewhat removed from the whole discussion.  Now we watch the stock market lose something on the order of thirty percent of its value even after the "bailout" plan was enacted.  Those who have investments see their hopes being delayed, if not dashed.  People thinking of retiring within the next year to five years are probably re-thinking if they counted on their investments as part of the money they'd live on in their 'golden years'.

All that is bad enough, but now we learn that these school districts were owners of some of the 'crap' mortgages.  The districts have tried to portray themselves as 'innocents' but news articles today appear to destroy that position.  They were apparently told about the 'risk' but chose to ignore it for a greater return than otherwise available.

They seem to have known that they could lose their entire investment if the default rate rose above 4.95% but would remain whole if the default rate stayed beneath 3.95%.  They were also told, apparently, that the "highest historical default rate in the past 23 years" was 1.85%, so where was the risk?

The risk was in the Fannie Mae/Freddie Mac garbage loans that were a part of these 'great deals', and the default rate did exceed the 23 year high.  And some of our (the nation's) elected officials were pushing for even more.  100% mortgage loans to questionable credit risks is simply stupid.  These politicians wouldn't have lent their money in that manner, but they were really anxious to get our money into those deals!

This video collage is most informative as to the sub-prime problems we are dealing with today. 

It seems that there were attempts to rein these two quasi public/private entities in over the years but one party seemed to stand in the way.

You can watch it for yourself and form your own conclusions.

Our news is dominated by talk about the "bailout" that has been prompted by the collapse of the sub-prime mortgage market.  Even at its current value, the bailout supposedly carries a cost of nearly $2,400 for every man, woman and child in the country.

This hits us in the last 45 days or so of the race for the presidency of our country.  It hits when we face the election of those who will represent us in the House of Representatives for another two years. It is, as so much has been, being used as the proverbial "political football".  It also threatens to become the largest single "pork-barrel" conveyance we've seen in recent history.

Many will argue where the blame lies, but, at the moment, I am more concerned with how this 'package' will look when it finally emerges from the 'back rooms' on Capitol Hill.  Actually, I am more concerned with what will be included and obscured by political double-speak.

I must confess that I have little faith in too many of the politicians that will participate in this decision-making process to make me at all comfortable that we'll be best-served, as a nation, with the outcome.

I see the results of past such situations.  I see that, when the dust settles, we find too many gifts to too many people of our hard-earned money cloaked in fine language but smarmy nonetheless.  Our politcos cannot seem to help themselves when there is so much opportunity to grab so many dollars dangled in front of their eyes.  And, too many of those dollars may find their way back into the pockets of these decision-makers in the form of sweetheart deals.  It is too easy for the recipients of multi-million dollar 'gifts' to give a few hundred thousand of those dollars back to those who made it all possible.

I marvel at the millionaires that have been made on Capitol Hill.  I look back at a congressman who had taught grade school, was elected and served in congress, the vice-presidency and the presidency and who, somehow, ended up with ownership of a chain of television and radio stations.  I see a man elected to and serving as majority leader of the Senate who somehow managed to buy up property that sits perfectly in Nevada so as to now be worth many times the original price.

I suspect that Lyndon Johnson, were he alive, and Harry Reid, if pressed, could give answers to their respective 'breaks' that would seem proper...and that might, in fact, be true.  But, there just seems to be too much of this kind of thing to permit me to be other than suspicious.

Those are just two stories.  There must be hundreds or thousands of such stories.  These are people who were thought to be honorable servants of the people.  These were people to whom voters gave their trust only to learn years down the road that they had misplaced that trust.

Add to this, the recent revelations of favored mortgage deals that none of we mere taxpayers were ever given the opportunity to receive.  These deals were in the news only several weeks ago, and those people are now making the 'back room' deals using our money.  The news of tax payments not having been made by an official in charge of tax law was just in the headlines a week or so ago, and that man is playing in the big leagues of 'deal making' a few days later.

They make these deals as easily as we would make deals in a game of Monopoly...but they use real money...if there is such a thing.  And that real money comes from us...the 'us' who pay income taxes.  They make deals that protect them and that protect their large campaign donors.  They make deals that will attract even bigger donations in the future.

I dislike sounding like such a skeptic...but I am.  And, I don't think it is entirely my fault that I'm a skeptic; I've had a lot of help over the years from a lot of politicians.

So...Bailout or Boondoggle?  What's your guess?

I listened to Senator Joe Biden telling me and the rest of the country that those of us who pay income taxes needed to pay more.  He went on to tell me how patriotic that would make me feel.

Given that some 48% of Americans do not pay any income tax today, I guess they are being deprived of the patriotic feeling.

Given that some 5% of Americans pay 80% of the income taxes paid in America today, I can only imagine how patriotic they must feel every day as they awake to the knowledge that they'll be paying even more taxes.

Senator Biden has served more than three decades in the Senate, and has probably made nearly every gaffe possible over the course of those thirty-some years.  I don't know that this statement was a gaffe so much as it was testimony to the fact that he and many more of our politicians are so out of touch as to be laughable...if it didn't hurt so much when I laugh.

It was this ruling elite that aided and abetted those who led Freddie Mac and Fannie Mae.  It was this ruling elite that made it possible for those who had no business buying homes to become homeowners...for a few months until it caught up with them...so we all could bail them out without having learned a life lesson that most of us have come to understand.

Our scheme of income taxation began a long time ago.  It was well-intended then but has grown out of control.  Our tax laws today represent a gigantic tumor sucking the very lifeblood from the economy.

But...we'll all feel more patriotic if we'll just send a few more dollars on to Washington so that the grand old "income redistribution" scheme called the tax code can continue to dole out money to earn votes for those doing the doling.

And, contrary to the current elitist mantra, taxes are too high, and those taxes threaten our very existence.  Government does nothing to earn any money, but it is capable of spending ours as if there is no tomorrow.  And, they may succeed at the rate they're going...maybe there will someday be no tomorrow.

Interestingly enough, none of the elitists appear to be at all worried about where their next free meal is coming from. 

Even Rep. Charlie Rangel, head of the committee that oversees tax code, has to pay taxes...except he doesn't seem able to understand that as well as he ought.  But, that's okay.  He has hired a forensic tax accountant to help him obfuscate even further so that he can maintain his office and his appointment and thereby continue to devise new schemes to take more of our money from us to be given to those who haven't yet learned that we're all expected to work and contribute.

On the other hand, maybe they're the smart ones.

You and me are really great people.  Why is that?  Well, we seem to help bail out just about everything that bangs on Washington's door.

A short time ago, the sub-prime mortgage companies received their bail out; likely the first of their bail outs since Fannie Mae and Freddie Mac are still in the throes of that mess.

Now the automobile industry is in the queue for what yesterday was about $25 billion and today has already climbed to $40 billion according to the press.

Is this a proper use for the tax dollars that are extracted from each of us?  Should we be funding these bail outs for industries that essentially have gone bad because of their own doing?  If you or me were responsible for these 'disasters', we'd probably step up to the plate and take what was coming to us.  But we didn't force people to be too gullible and let people sell them homes they couldn't afford.  We didn't cause the oil price jump because we didn't approve new refineries for thirty years or drill for new fields of oil?

If any of us should be paying 'the price', it seems that the finger of blame needs to be pointed at Washington and the people we send there to represent us.  That group has caused these issues to surface through favors to those putting money into their campaign accounts.  That group has caved in to the environmental groups that are fanatical to the extreme in their pursuit of the ultimate goal they espouse.

Oh, that's right.  We are to blame because we continue to return the same people to Washington in spite of what they do and don't do.  We don't require any 'reparations' for their actions.

Maybe we all need to get a little more involved and a little more vocal starting with our upcoming local elections.  Too may of us simply shake our heads and fume; we really need to be more active in our precincts and districts and villages or cities, and in our counties and states.

I saw a quote in the past few days that went along these lines:  "Too many people have died for our freedoms for us to not vote."

The 'virtual fence' that was approved by Congress to extend across hundreds of miles of the border between the United States and Mexico has been been put on hold indefinitely.

Why?  Well, it seems that the Interior Department has not signed off on the use of its lands.  These officials have refused to accept an environmental assessment that the towers, cameras, etc. would have no appreciable effect on the lands.

Even though the Department of Homeland Security has the authority to waive environmental laws for border security projects, it apparently does not extend to the virtual fence projects.  Sounds like the typical governmental bull!

An employee of a Florida hospital testified recently about the costs of treating illegal immigrants in one hospital.  You can watch the testimony by clicking here.

The citizens of this country finally prevailed on border controls, and yet the government continues to thwart this solution.  It seems like someone is a bit confused on just how this country works.  The people in these various departments are employed because we pay taxes to support their employment.  I am tiring of those within the system who pervert it to their own will.

Is 'perversion' too strong a term?  I don't think so.

The EPA has turned down attempts by the State of Wisconsin to relax the ill-conceived S.E. Wisconsin requirement for 'reformulated' gasoline even as we are virtually in full attainment.  That was probably dwarfed by comparison to the decision it announced that it was denying the State of Texas' request for a cutback on the amount of ethanol required to be blended with gasoline.

There is a radio commercial playing in our market that is sponsored by the ethanol lobby that makes the case, in essence, that we, who question the use of corn to make ethanol, are over-reacting and need to check our facts.  I am angered every time I hear that commercial, including this morning as it played while I was shaving...with a blade.  That could've hurt!

The simple facts are being ignored by the EPA, Congress and the President.  And, these aren't stupid people.  This is intentional ignorance.  Our food prices are going up, and it is caused in part by the insistence that ethanol be blended with gasoline even as us taxpayers pay the price for the ethanol support being paid on every gallon.  The other part of the increase is obviously that caused by the fact that Democrats have so far refused to relax their stance against oil drilling here and now.

Back to ethanol.  It is causing many cattle ranchers to reduce their herd size because they can't afford the feed to grow them for market.  The prices for chicken and beef are rising at a rapid pace.  I looked at flank steak a few days ago since it always used to be a relatively lower priced cut of meat.  That is a thing of the past.  I bought chicken breasts a few days ago and was astounded at the prices I saw on the packages.

I know that my mileage with reformulated gas is less than it was before that edict; about 10% worse.  I know that ethanol is much less efficient in terms of the energy it generates than is gasoline.  So, I am burning more and getting less.  A double-whammy in our part of Wisconsin.

The EPA stated that there was "no compelling evidence" that the mandate for ethanol is causing "severe economic harm".  That had to have been spoken by a federal employee who is reimbursed for his or her mileage...from our tax dollars  These people simply have no contact with reality, or manage to suppress the lessons they really learn in order to be a "dutiful servant of the people".

As if all this isn't enough to put me into a deep funk, I am confronted with the idiocy that is called political campaigning where people talk about wind power, sun power, and bio-fuels while not mentioning oil or coal or nuclear power.  How in the world are we supposed to leap forward a decade or more when technology is not yet even available to soften our landing?

We are in real danger of becoming a third world nation if the current policies are not changed and changed quickly!  Our economy simply cannot withstand the political assault it is under.  And this is not a political assault from another country...it comes from within.

So, I don't think calling the EPA the Environmental Perversion Agency is much of a reach. 

And I, for one, am very, very tired of the elected people we all put into office forgetting who it is they represent, and what it is we want.

Barack Obama has now decided that he needs to promise another round of stimulus checks that are discussed as being in the range of $1,000 for every family and $500 for individuals.  Now, of course, even in the federal government, money does not grow on trees.  This 'reward' for electing Obama and the Democrats has to be paid for.  After all, they apparently hold to the approach that all things done within the government must be "revenue neutral".  So, if money is going to be given to one person, it must be taken from somewhere else.

The 'somewhere else' in this instance is destined today to be a take-away from "big oil" through what is artfully called a "windfall profit tax".  A Wall Street Journal editorial today takes an intriguing look at the concept of such taxes including some individuals that seem to have benefited from windfall profits.. 

There is a certain arbitrariness to all this posturing. 

First, from whom or what will such money be taken?  Well, why not target those nasty "big oil" companies.  They are, after all, socking money away at record levels.

Second, what is it that constitutes a "windfall" profit?  Well, this one seems to differ with the magnitude of "big oil's" profit, so it really becomes whatever the Congress thinks it is...and it can be different when applied to different entities and/or at different times.

Third, doesn't this become very much a form of nationalizing parts of companies?  How does this differ from Hugo Chavez' approach in Venezuela other than in degrees?  Chavez decrees that the company will be 'nationalized' and seizes whatever assets exist for which he doesn't feel obligated to pay stockholders.  So if, for example, "big oil" earns a combined $10 billion, and if government decrees that it should've only earned $5 billion, the windfall profit tax levied is essentially consuming half the industry.  

Fourth, from whom is this "windfall profit" being taken?  Why, from the stockholders of the companies...and those stockholders are individuals, mutual funds, pension funds and so on.  Too many people are seemingly unable to work through this.  This money comes from them, goes to Congress and is re-distributed to other 'thems' after, of course, a few dollars are siphoned off to go to this or that pet project that gets tacked on to the legislation as it wends it way through the voting process.

Fifth, the oil companies simply pass the lost profit on to their customers in the form of increased prices to cover this unanticipated 'cost' that was levied against them.  You and me pay this at the pumps, and when we turn on our lights and heat our homes and buy food and other necessities since virtually everything is dependent upon oil at one or another stage in the process.

Could it be that there really is nothing to which we can refer as a federal give-away?  The federal government doesn't earn dollar one; it only takes from you and me.  If it doesn't have any money of its own, then it really is only re-distributing our money like an inefficient Robin Hood.  Robin didn't have the need for large sums from his takings such as Congress seems to have.

This sure sounds very much like socialism doesn't it?

A week ago, I Blogged about Chrysler ending its leasing operations, and suggested that GM and Ford were close to the same decision.  All this due in major part to the declining residual value of the trucks on lease.

GM announced a major hit in the last quarter with the loss of over $15 billion.  It is very near the precipice, in my opinion, where it will need to actively consider bankruptcy.  It has a market value today that is a mere shadow of what it was just a year or two ago.

And now, foreign auto makers are facing similar pressures although certainly not yet to the degree that U.S. auto manufacturers are confronting.  BMW announced that it will raise prices and reduce production to stave off the problems faced by others.  Nissan has begun to show signs of problems.

Our worldwide vehicle companies are in the throes of a major set of problems that could very likely result in fire sales or outright closures of some old-line companies.

A significant part of these problems can be traced back to fuel prices that have impacted our economy and those of other countries around the world.  The costs of fuel have driven down auto and truck sales.  This drain on spendable dollars has also taken a huge toll on the rest of our economy.

And, against that backdrop, what has Congress done about these problems?  Through the stalling tactics employed by the Democrat-controlled House and Senate, NOTHING has been accomplished.  They continue to say NO to oil, NO to nuclear, NO to coal.  They feel that we need to suffer to the point that we'll roll over and let them take us where they have intended to take us for years.

We are facing some of the most serious economic issues of several generations and our government thinks this is the 'medicine' we need to get our heads more properly attuned to their 'vision' of what the U.S. and the world needs to look like in the coming half-century.

If there is any 'good news' coming from Washington, it is the fact that the law-makers have gone on their August 'vacation'.  The bad news is that our government will remain paralyzed until after the new government is sworn in in 2009.

We cannot afford to simply sit back and watch this mess play out.  We need to drill here and drill now!  That signal will further depress the price of crude oil on the world market and begin the process of our economic recovery in a big, big way!  As a pundit said in the last day or two, it is really hard to install a wind generator on your personal vehicle.  It is really hard to wean our country from its primary source of vehicle fuel overnight...and it is absolutely a crime to force us into the coming series of bankruptcies to try to prove some point that is unsupported by science.

I cannot fathom what goes on in the minds of Nancy Pelosi and Harry Reid.  I cannot believe that normal human beings have the kind of disregard for their brothers and sisters that these two seem to evidence.  I know that politics is referred to as a "blood sport", and I don't necessarily mind them spilling their own...

But I really have to draw the line when they metaphorically spill yours and mine and never even blink in the process.

Have I lost my mind?  I hope not.

My concern is this:  With gas prices dropping and now at the mid $3.80s per gallon, will we lose our impetus to keep the pressure on our elected officials to get more drilling going and to relax the myriad rules on new refineries?

We are a strange group, we humans.  We got used to paying $4.20 per gallon for regular for a week or two and now we're "saving" nearly $.40 a gallon.  We forget very quickly that only a year or so ago we were paying a dollar or more less for our gas.

We seem to forget that we were upset over ethanol and its impact on our mileage and on our food prices.

We seem to forget that reformulated gas is costing us more and causing lower miles per gallon.

Are we going to meekly go about our daily business now until prices go back up?  Are we going to give our politicians a 'free pass'? 

Are we going to let the presidential candidates avoid dealing with this issue...even though they'll make promises that'll probably be forgotten in a week or two?

Are we going to demand that our state representatives push hard to get the ethanol lobby off our backs?