Random Toughts for the Domestic Debate

• Hammer on homeland security. Every time Bush talks about how he’d rather “fight them over there than here”, remind the audience that you’ve never seen a championship team that didn’t have a great defense. Also, you can’t outsource the jobs necessary to protect our homeland.
• If (when) he says something macho like “he can run but he can’t hide, remind the viewers that he’s always using macho talk and it does not help us. Remember, “Bring it on” (how do the families that lost loved ones when they “bought it on” feel about his invitation?) and “we’ll get him dead or alive”? Where is he? It’s all hat and no cattle.
• Point out that with the latest tax cuts, now that we are in serious deficit spending mode; only mean that we are spending our children’s money? The tax cuts were originally sold as a remedy for the exploding surpluses. They’re long gone. Now we are merely stealing from our kids. Drive home the point that our values don’t include sticking our kids with tremendous bills so that so people today can live higher on the hog.
• Hey, if a war is worth fighting, than it is worth paying for. If we stick our kids with the cost of our war, what kind of a jam will we leave them in if they have to fight a war of their own?
• Ask rhetorically; “Is it a surprise that with two oilmen as Pres and VP that oil prices are up 56% this year? Didn’t Bush promise to jawbone down the price in the 2000 cycle? “What do you think the prices will be if they get a second term?”
• Stem cell research is right ethically to prevent grandchildren from being afflicted with the same diseases as their grandparents, and, very importantly, if we don't do it here it will be done overseas by other countries and we will squander the opportunity to create another industry that we should have here. We cannot afford to keep ceding high paying industries to other countries.
• It was well reported that Tom Ridge will leave the DHS after the election. His reason; he can’t afford to send his children to college on the $175,000 he makes in that job. What chances to middle class families have? Then speak about your tuition tax credit plan. In fact, stress how important education is for our future and that we must get more of our population educated to be able to get the higher paying jobs.
  
  
  
  BTW, I’d love to see the Kerry campaign or the DNC use the video from Bush’s Press Club routine, the one where he is looking throughout the White House for weapons of mass destruction, in a commercial with a tag line that says something like “these times call for a serious leader, not for a frat boy” and hammer home that we don’t think this is an appropriate subject for levity.

An Economic Perfect Storm

No, that sub-4% Ten Year Treasury Note yield is not a misprint. If the current administration gets another four years to mismanage the economy, it is hard to tell whether the result will be a depression or wild inflation. My guess is depression. The massive current federal deficit combined with the administration's plan to make permanent the enacted tax breaks will lead to some ominous economic and political circumstances. We are now the world's largest debtor, with an increasing share of our debt being bought by the Chinese government. As time marches on, we will increasingly be held hostage to the demands and desires of our creditors. No, this is not like the old saw; "if you owe the bank $1,000 the bank has you by the short hairs, if you owe the bank $1,000,000 you have the bank by the short hairs." In this case, at any time we are not accommodating enough; our creditors can flood the market with dollars, depress the value of our currency, sell bonds (which forces up interest rates) and put us through tremendous pain. Already, the dollar has lost 35% of its value against the Euro in the last year. The dollar is in danger of losing its standing as the world’s reserve currency. All of this has occurred in four short years. What can this administration squander in another term?

(Speaking of the Chinese; did you know that they are graduating 600,000 PhDs a year in engineering and applied mathematics while we are graduating 60 thousand? This trend line will ultimately lead to them getting the high end jobs and Americans making trinkets. (See John Chambers, from Cisco Systems, comments from last week) It won’t happen right away, but unless we spend more resources educating our future workers, our prosperity is unsustainable.)

The increasing leverage used by Americans to buy homes has further eroded the stability of our economy. While candidates tout the increase of the percentage of home ownership as an indication of a healthy economy (it could be, under the right circumstances), the increasing use of leverage and new financial products (like interest only mortgages, no money down mortgages, and the increasing use of adjustable mortgages) increases the overall risk to the economy. Remember, it has been said that during the Depression of the 1930's, the owners envied the renters.

Imagine now, a couple of years hence, our creditors begin selling our debt into the market and that naturally increases the cost of capital to marginal mortgage holders. The cost of carry would increase to a level where these owners must dump their property (or walk away from it) and that would create a huge overhang of the real estate market. Suddenly, we would have a serious erosion in value of the place where most Americans have their wealth; their homes!

Security Moms

Much has been made about the Kerry campaign’s loss of traction with the so-called “security moms”. There is something to this and it has to do with the way the Senator has framed his choices. Instead of speaking about how he would spend the $200 billion being squandered in Iraq on health care and education (both worthwhile causes), Kerry should be talking about how that money should be spent securing our homeland. While the conversation has been hijacked into a “we’re better off fighting them over there then over here” model, it should be reframed into an “I’ve never seen a team win that didn’t have a good defense” version. Besides, most security moms are really concerned about their young children, the type who would be vulnerable to Beslan style horror. The Senator needs to hit home on how too little has been done to protect our population since 9/11.

An associated side benefit to reframing this discussion in this way is that almost all of the money spent on domestic defense will be spent on domestic recipients and have a stimulative effect on the economy. Also, you can’t really outsource jobs related to port security, plant security, and most other types of homeland defense.

Protecting this country is much more than some foreign misadventure; it should be a series of serious projects designed to protect people, property, and freedoms. Indeed, a proposal to increase first responders, address school security, port security, and other related homeland initiatives should be a centerpiece of the campaign.

Team Wahabi

Sen. Bob Graham's new book, Inteligence Matters, is a must read for anyone who truly cares about our country. The most damning insights (other than that of the President's mendacity) relate to the Saudi involvement and participation in 9/11. Indeed, while the Rather/CBS mess can dominate the news cycle for two weeks (and counting), who remembers that 27 pages of information about Saudi complicity was redacted from the Joint Congressional Inquiry. Why is no one asking why? The administration has taken pains to protect old Bandar Bush and Team Wahabi from appropriate scrutiny. Why? The Joint Inquiry found that Saudi inteligence (I used to think this was an oxymoron, but they've clearly attained deep penetration in our administration) had actively helped (at least) some of the hijackers. The administration allowed 140 Saudi nationals to leave immediately after 9/11 and before we could have possibly known what information they had, or even what information we wanted. And, of course, that Saudi Arabia was one of only three countries (interestingly, Pakistan was another) to establish relations with the Taliban.
Again, I ask, where is the media?