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What Greece and the US Need to do

May 23, 2011 1:38 PM
Peter Morici writes a contributed column at The Street which explains that Greece must abandon the euro and go to another currency like the drachma it used to have in order to allow it to devalue its currency against the euro and other currencies. It is worth noting one interesting benefit to strong exporters in Europe such as Germany is that a common currency allows them to sell to weaker countries like Greece through subsidized monetary policy. Basically, because of the euro, the Greeks can buy a BMW more inexpensively.

In other words, Greece consumers benefit from the euro the same way the German manufacturers do. The challenge of course is that Greece does not have as productive an economy, they have more tax evasion than they should and since their currency isn't dropping in value commensurate with their financial situation, they aren't able to boost tourism or the value of their exports.

The sad reality for Greece and the US is in the following paragraph:

The only real solutions are for Greece to restructure its debt -- both sovereign and private creditors should take haircuts; abandon the euro and reinstate the drachma; and rethink its welfare state.

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Who can argue with Herman Cain's comments about eliminating debt and Obamacare? Now this is hope and change the fiscally responsible can believe in. While I know little about Cain, I am impressed with his matter of fact style and he seems to resonate with many. As a businessman, I think he would do wonders for the country because he understands what business needs to get the economy going and to start hiring.

The one challenge is as a non-politician he may not be what America is used to. Continue Reading...

Greece Enters Krugman Death Spiral

May 20, 2011 12:51 PM
Greece is facing another  - and this time major downgrade to its debt by Fitch and the continent's liberal policies may indeed bankrupt the EU. In the US - the Obama administration in partnership with Pelosi, Reid and liberal Democrats are not only modeling US policy on Europe they are trying to get to insolvency first. Paul Krugman of the New York Times is the biggest proponent in the media of spending well beyond our means and many use his writings as cover to behave financially in a way they wouldn't and can't in their personal or corporate lives.

I hope those who believe in fiscal responsibility and hope to leave a better country to their children will join me in utilizing the new and infinitely accurate term "Krugman Death Spiral" when referring to any country which spends beyond its means and subsequently spirals downward.

Obama Death Spiral works as well - or Reid or Pelosi - your call really. Continue Reading...


He explains Obama’s populist rhetoric is carefully designed to hide the truth

This week I discussed why US politicians are more responsible for job losses than the iPad as some politicians would suggest. But today I thought it made great sense to explain what one of the most successful US businesspersons and employers has to say about the current political environment and moreover, how it is hurting US workers.

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Interesting thing about politicians... They spend your money and the money your children will someday earn and often borrow from regimes which aren't friendly to our interests and with this cash they give you things which seem like they are free. Other times the spending comes from increased taxes on businesses which decreases salaries and reduces money which a company could use to train workers for a future career change.

America is slowly waking up to this political trick and its why I think this ad promoting Mitch Daniels for President is very effective. Not because I don't believe everyone in society doesn't deserve to have a great life - but because I believe individuals and corporations and a free market system with minimal government intrusion and regulation are the best path to helping the most people while keeping them motivated to be productive as the US competes in a global economy.

Rich Tehrani Continue Reading...
Sure, keep trusting those “experts”

I am not a financial expert nor am I an economist – but considering they all have missed virtually every significant financial event from the dotcom bubble to the telecom bubble and the housing bubble let’s just say not being an economist or financial expert probably is a distinct advantage.

Having said this, I would like to discuss a few issues which need to be out in the open and discussed before the new Congress begins.

Bank runs are bad

Banks do not keep all of their assets in cash meaning if the majority of a bank’s customers decide to withdraw all of their money at the same time, the bank collapses. Think about it – they loan much of the money they have to others and don’t have access to it all. When one bank collapses there is a chance other investors will get spooked and create a cascade of bank failures. When not stopped, you have the potential for another Great Depression.

Bank runs are currently stoppable because governments can stop them

To date, bank runs have been stopped because governments around the world have been able to stop them by assuming the bad loans the banks have made.

Soon, global governments may not be able to stop the bank runs
With all the debt global governments have amassed, there is a possibility at some point that investors will start a global bank run meaning county after country will see their banks collapse because the confidence in the ability of a country to pay back its debt has plummeted.

Ireland may kick off a worldwide panic

If you follow financial news you may know much of Europe is in trouble because in general they work less hours than they should and produce far less than they need to in order to sustain the lifestyle they live. Continue Reading...

Washington Elite Disconnect

December 15, 2010 10:52 AM
If you graduated college and live in the DC area you are less than half as likely to think Sarah Palin is qualified to be President. So says a Politco poll which is full of useful information which shows fairly consistently that Washington elites are somewhat if not totally disconnected from the rest of the population.

Consider that this month, 38% of the DC elites think the economy is headed in the right direction but only 26% of the general population believes this is the case.

The poll itself shows why the disconnect is taking place. We know that the Obama administration is responsible for the largest federal payroll in history so we would assume that government workers and those who feed off them are very happy. Moreover, the average government worker makes twice what the typical non-government worker makes. Continue Reading...

Obama Tax Position Analysis

December 10, 2010 3:20 PM
The recent press conference where President Obama tried to sell tax cuts for those making over $250k while extending unemployment benefits for 13 months struck me as being odd but until I read Peggy Noonan's article titled From Audacity to Animosity, I couldn't understand what was so perplexing.

This portion of the article is most important:

President Obama was supposed to be announcing an important compromise, as he put it, on tax policy. Normally a president, having agreed with the opposition on something big, would go through certain expected motions. He would laud the specific virtues of the plan, show graciousness toward the negotiators on the other side—graciousness implies that you won—and refer respectfully to potential critics as people who'll surely come around once they are fully exposed to the deep merits of the plan.

Instead Mr. Obama said, essentially, that he hates the deal he just agreed to, hates the people he made the deal with, and hates even more the people who'll criticize it.

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Reagan is Right, Keynes is Wrong

December 1, 2010 1:33 PM
If each of us individually cannot borrow our way to prosperity, is it logical to believe that collectively we can do the same? Absolutely not. But that doesn't stop politicians from borrowing massive amounts of money from potentially hostile regimes to finance a virtual Ponzi scheme of promised entitlements.

Ronald Reagan said the following during his inauguration - "You and I as individuals, by borrowing, can live beyond our means but for only a limited period of time. Why then should we think that collectively, as a nation, we're not bound by that same limitation?"

He continued, "We must act today, in order to preserve tomorrow. Continue Reading...

Shakedown Socialism

November 30, 2010 10:18 AM

Oleg Atbashian of joined Alexis Garcia of PJTV to discuss his childhood in Russia where communism was painted as an ideal way to live. He later realized it wasn't - unless of course you like to stand in line for hours to get a loaf of bread - or be slaughtered by your dictator (benevolent comrade communist party leader).

As a Russian immigrant, he is ideally suited to write a book called Shakedown Socialism which details his concerns that the US is headed down the path towards socialism.

He says he can't believe he would have to write anti-socialist and anti-communist documents here in America - and frankly we are pretty surprised that the country has gotten to this point as well.

One of his points is that journalists seem to be obsessed by how much other people make.

Moreover he equates unions with communism - as they both espouse redistribution of wealth and "fairness". Not surprisingly, President Obama has been on record time and time again as a huge proponent of the idea and his policies are in lockstep with his words.

At one point in his interview he mentions the famous Margaret Thatcher quote, " The problem with socialism is that eventually you run out of other people's money." This quote is especially relevant as country after country in Europe is really running out of other people's money before our eyes.

Other important topics in the book include all the red flags (pun intended) which are going off as a result of analysis of Obama's foreign and domestic policy.

You can buy the book here.
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Recent Comments

  • Musing: I say cut the salaries of the house and senate read more
  • Anonymous - Government worker: Obama reaches out and makes a decision to cut government read more
  • Rich Tehrani: It is surprising that your pay is lower than what read more
  • anonymous: As a federal worker I wish I was paid what read more
  • Peter: Unless you live in Florida and watched the drama unfold, read more
  • Tom Keating: Ok, that's just freaky, cuz I watched this like 15 read more

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