Economic Stability

War destabilizes a nation’s economy. That instability creates jobs in some sectors related to military supplies, weaponry and defense/offense weapon systems. Budget support for military expenses diverts funds from other government programs, mainly health and family services, education and other social services.


Labor is diverted from some industries as the military industrial complex goes into high gear to meet national defense needs. Consumer prices warp to fit circumstances and then eventually settle down.


That’s war time. What we have now is not war, but the threat of war. In times of peace, we have routine military defense preparedness. During times of threat, we have jiggles of demand for tweaked defense systems, and a build up of supplies. Each ‘jiggle’ creates supply and demand distortions to our economy. Some distortions are short-lived; others are longer term. Some distortions are good while others are bad. Like rampant inflation.


That’s the nature of destabilization. It upsets the equilibrium of markets.


Add to that context the national muddle over immigration and Congress’ inability to address that issue. For 40 years they have kicked that can down the road without serious effort to address it fully. I guess this issue is just too good a political campaign matter that can be raised from time to time to help otherwise hapless candidates for public office. Something to blame that is bigger than themselves?


The context also includes economic debris caused by major dislocations of the 2008 recession. That debris includes perhaps as many as 5 million displaced career workers shoved out of jobs that are now obsolete. Employers and governments have done little to nothing in helping them recover and find new employment and careers. No retooling of their skills. Just permanent hiatus in underemployed jobs with no future. Demeaning work, really. Surely, we can find meaningful assignments for these good people?


Another context addition: politically charged attacks on the Federal Reserve. The institution’s job is to monitor and control interest rates and currency values. It is not a political job pool at the direction of any elected office; not the president, the Senate, or House of Representatives. It is independent by virtue of the US Constitution. It does its job based on its own analysis, expertise and professional judgment. No other influence.


A strong economy usually brings higher interest rates. Money is used to invest in successful industries in need of expanded facilities, labor pools and supplies. New technology demands investment funds to create whole new industries. The reason interest rates are low currently is the supply of idle cash is still enormous. Cash not being used for other purposes is stacked in the treasuries of corporations world wide, especially in the USA. Until those cash hoards are drawn down by investment activity, loans will not be needed to spike interest rates.


A friend asked me the other day, what exactly are negative interest rates?  Well, simply put, we the consumer would pay a banking/investment firm money to safeguard our unused cash. In many ways we already do this in fees. But negative interest rates mean we pay the institution based on the amount of money we have on deposit for their services. It is a fee. Some would say a tax. It is negative because we are not earning that fee, the bank is. If anyone thinks this is the way to stimulate investment, I think they have a few screws loose.


So, saying the economy is successful is an oxymoron. The economy is successful in some ways, and weak in others. What is of major concern are the pockets of unused capital in people, talents and cash that lie about waiting for a new tomorrow. The real question is: What will the ‘new tomorrow’ bring?


September 18, 2019

Order in the House!

Let’s see, what’s going off the rails now? These will do for starters:

1.      Foreign affairs not smooth at all; at all. Allies are distanced by our own rhetoric and broken promises. Being the leader of the Free World has responsibilities and a price tag. It is not a fiefdom to do with as you please. It is a relationship for adults only.

2.      Reducing taxes because that’s easy, is a cheap trick to bankrupt the government. Give away your income sources so you can plead poverty later and reduce human services spending. Your giveaways, Donald, have added over a trillion dollars in debt. We are still spending a trillion on military adventures in the Middle East. 

3.      And now you are begging for war in Iran?  Another trillion or so, then what?

4.      Who bombed Saudi Arabia’s oil fields? Who cares? We are responsible for the outcomes caused by our own stupid relations with known enemies and oil czars. Was this your plan, Donald? Or just a whim? An accident?

The convergence of these issues is not all by accident. Nor is it by pure design. A little of both is my fear. Fear, because, this portends lack of control over action and the cause of future actions. The stage appears to be set for serious military involvement. People concerned about the size of their sword usually are intent to prove the unprovable and start fights because that’s what bullies like: the action and to see fear in the other person’s eyes.


Electing the wrong person to the highest position in our nation has consequences. Or any nation. Intended or not, many lives will be lost here and at home. Families will be destroyed. Fortunes, too, will be derailed. And all for the ego of one person along with his ‘friends’ who smell profit for themselves.


Many of us have warned that the trump administration is a clear and present danger to the United States and the world community. Each day that passes without regime change in Washington DC is another day closer to the Armageddon of foolishness.


But hey! That’s what bullies do. Shame on the American people for allowing this crap to go on this long.


The most potent resolution is invoking the 25^th Amendment of the US Constitution. The current chief executive is incapable of handling the job. He is incompetent. Now is the time to take charge by people who are well-informed and trusted to do the right thing. Maintaining the status quo will destroy the nation. That point is quite clear to me. Perhaps to you as well?


Kindly remember that political party mechanisms allowed this to happen. They define and control the election machinery nationwide. The time to replace that with a government managed system is now.

We have allowed the inmates of the asylum to run the institution for too long.


Heed this warning well, my friends.


September 17, 2019

Legacy Moment Report

Well, I must say Friday unfolded beautifully! Although a stormy night, dawn arrived with the storms moving east and I was about to head west and south 170 miles. By the time I got on the road clear skies were visible on the horizon. Puffy clouds dissipated and stark blue skies of Autumn reigned supreme.


The drive was uneventful but pleasant and quiet. Rolling Illinois farmlands swept past my windows. As Galesburg approached, the hilly, creek filled landscape returned to my view and memory. I had forgotten what a beautiful area of the state Galesburg inhabited.


New roads and Interstates lengthened the drive by 20 miles but whisked us along at 75 miles an hour. I made the trip in 2 hours and 44 minutes, complete with unloading the car at the dorm, and parking the car.


Next followed an inspection of the new dorm room with all the stuff two young women can cram into it! Wow. They should pursue an engineering degree, primarily in the space industry. They managed to bring order from the chaos and it all made for a neat, tidy environment in which to live, study and survive the next four years.


Then we explored some of the old haunts of the campus, remembering what each of the facilities looked like in our day, and how lovely they now were with new function and design. Legacy photos were taken by the college. There were 26 of us involving 7 new students. Three generations of legacies were present. What fun!


Then to the Student Union and food. As remembered, the food was excellent (beef stroganoff), the camaraderie terrific, and the dining hall spinning with life and laughter. Just like the old days. That would be 58 years ago for me, 56 years ago for Ann. So much was different at the same time that so much was the same. The spirit of the students remains whole and similar to ours back in the 60’s. Hope was ever present. Curiosity, too.


Heartfelt wishes for a successful learning experience for grandaughter Lindsay soon were replaced with the tears of farewell. Those are two required emotions at times such as these. Happy tears. And for good cause.

Our memories of the old days are now refreshed with the new and the dramas of the next generation. All is good in the world of Knox College and Galesburg, Illinois. May the Knox Idea and Experience continue to sow brilliant new outcomes for the world’s benefit.


September 16, 2019

PS: This morning Lindsay starts classes. I wonder if she is excited or nervous or both?  Probably both!

Legacy Moment

Today I drive to Galesburg, Illinois, to Knox College campus. My oldest grandchild – Lindsay – is moving into the college and enrolling as a freshman. At 11:45 am photos will be taken of the legacy families. Those are the kids entering Knox with relatives who have graduated from Knox. Ann Deardorff Safford Huneke is Lindsay’s grandmother. She graduated in 1967. George Safford, me, is Lindsay’s grandfather who graduated in 1965.


In my case – a native Californian displaced to both Massachusetts and New York before moving to Knox – I haven’t visited the campus since 1970. That’s 49 years if your are counting. I graduated 54 years ago. That doesn’t even seem possible.  Ann and I married in 1968 and divorced nearly 26 years later. Both remained in Illinois following graduation and never lived outside the state. We made meaningful lives in Illinois that Knox was instrumental in making happen.


The legacy is now passed on to Lindsay who is a talented student in theater, music, English and more. Knox is the liberal arts institution that will help her discover what she will do with the rest of her life. Just like her grandparents.


Higher education is in our family blood. Most of us have college degrees, many have post graduate degrees. One even made a career working for the University of Illinois at Chicago. Volunteer work and nonprofit organizations filled in the years to magnify the outcomes of a Knox experience. And that is what happens when acorns grow into mature oak trees. The outcomes cannot be forecast. Nor can they be defined well. They just are, and that’s a good thing.


I’ll have captured thoughts of this day for some time to come. I’ll share them soon in this space if they seem noteworthy.


September 13, 2019

Remembering September 11, 2001

It was a day to remember. Still is. More than 3000 lives were lost, mostly American, some foreign visitors or workers on special visas. All innocent. All with private lives. All part of the world. And now the next one.


We marshalled our resolve, cleaned up the sites of the violence. We rebuilt where once buildings stood. We repaired the Pentagon facility as though nothing happened. A field in Ohio now has a somber memorial. The Twin Trade Towers were replaced with a monumental single tower. A memorial now rests on the site of the downed towers.


Yes, we remember. That day. And what has happened since that day.


Our nation responded with resolve. We did not cower and faced the world community as one.

Emotions affected us then and now. In government circles emotions created new programs, new defenses, new protocols, stricter travel screening, and many international policies were altered as a direct result.


A war was begun. In Afghanistan to root out Osama Bin Laden, and his stalwart crew of desert rats. It took years, but we finally found him in Pakistan and killed him. We waged war in Afghanistan and found much to do there, not much of which had anything to do with 9/11. But Americans took on tasks not included in the original call to action and made hash out of the entire mission. Sad but true.

The legitimate government proved illegitimate to the max and greedily absorbed our 100’s of billions of dollars in aid for the wrong purposes. The Taliban grew and prospered and remains today the primary power of the land. We lost the war. France lost it’s war there too, many years ago. Just as Russia lost its horrendous war more recently. Egotists to the core, America thought it could do better but never understood – still doesn’t – what the culture of the place has as power to trump our extravagant military might. Sometimes missiles and guns don’t make much of a difference.

Sometimes the little things of daily routine change the course of history. Very true in Afghanistan.

Derailing those efforts was the nonsense mission of toppling Haddam Hussein in Iraq. We made a mess there and still don’t understand the political power of triple headed religious culture in the region. So, that effort was a failure as well. There is more to show for our money, lost military lives and horrendous disabled bodies of our military force, but remember that maybe a million or more Iraqi’s lost there lives, their homes, their families, there everything.


At least $2 trillion of our taxpayer money was spent for very little. There are those who argue a third trillion dollars should be added to the total. And still the infamy of our policies live on in the region accomplishing very little.


Yes, I remember 9/11. There are two events to recall. First is the hideous attack on 9/11/2001; second are the costly follies good people mistakenly authorized for world peace. They didn’t succeed. Neither did we. World peace seems more elusive these days.


Time to try a different approach, don’t you think?


September 12, 2019

Economics

Trade between one person and another is commerce. The value of the thing traded – whether a thing or a service – matters little. Something is traded or swapped between two parties. The value in the instant is what is traded for it. Perhaps a pig for slaughter is worth a month of cleaning a home, perhaps two months. Or maybe, a wagon wheel needs replacement, or your transmission on the car; how much you trade for the repair establishes the value of the service or thing at that moment in time.


At another time/moment, the value of the transaction will likely change. What a person agrees to give up in order to gain the service or ownership of the thing is how prices are created. Multiply this by thousands or millions and pricing becomes fairly well known and observed. Modern communication shares such information quickly and accurately, thus a prevailing understanding of value and price becomes known. We call that the marketplace, and the pricing of it.


Such transactions among households in a community makes up the local economy. Expand that to several communities in a region and a county or regional economy takes shape. Same with larger regions like states, multiples of states, and then the nation as a whole. Regional differences will present themselves but on a national scale, the economy truly does take on mighty proportions. Rules of engagement are formed to handle the logistics and protocols of all of this.  Thus banking, currency values, contract law and much more become observed routines. This becomes the infrastructure of the economy.


This is called microeconomics. It begins with transactions between two people and expands to cover an entire nation.


Macroeconomics studies economics based on a nation taken as a whole; it quickly matters then, what happens between nations. Before getting into international economics, however, understand that macroeconomics is all about understanding how a nation can and does manage its national economy for sustainable health, of it and its people.


Money and banking deals with interest rates, interest setting protocols, banking safety reserves and requirements, lending and long-term saving mechanisms. Controlling the decision making in any of these many parts, and outcomes change. Do this enough and outcomes become quite predictable.
Thus economic theory is constructed to identify desired outcomes of economic activity and how to make those actually happen. How, when and to what extent become subsidiary concerns, but still much a part of the discussion and management process.


Tariffs are a national unilateral policy mechanism. If we do not want another nation’s goods to enter our markets to compete against our local/national products, then we place an artificial price barrier to such trade. It makes buying and selling that product much more costly to the end consumer and theoretically they choose to buy local goods instead. They won’t do that, however, if the local goods are inferior and the foreign goods are much more desirable. Price helps define marginal value of anything for sale in the marketplace. Clearly, however, if a foreign good is the standard for the specific product, then the consumer will pay the difference and that becomes the price. Tariff be damned. The customer pays the price of it. Simple as that.


And that is inflationary if other savings are not provided for. This is especially so if other goods are not available to replace the product barred by tariff.


That’s enough for one posting. Variables of the above are plentiful and each can be discussed separately. But only if there is interest. We shall look at those another day.


September 11, 2019

Use of Political Parties?

I know we have Republican and Democrat parties. Others as well, like Libertarian, Green, and maybe even the Socialist? But what it comes down to is ideology, not party.


There are party mechanisms adopted through the years that give life to the political parties. That is normal for any organization: it begins focused on a mission or principle, then morphs into this larger organism that accommodates differing points of view until it isn’t what it started out being.


Most organizations end up this way unless they remain focused on mission and vision accompanied by strong strategic planning along the way.


The organizations that do not do this disappear in time. The Whigs is an example. Also the Know Nothings. Surely there are other such examples. Studebaker, certainly.


Today, I think the republican party is nothing like its original organization. Please recall that Abe Lincoln was the first Republican President. Many years of success followed. Somewhere along the way they lost their way. Today they are nothing like their past.


Democrats are doing much better but if they were studied in detail they, too, would be found far from their original path.

The point is: it is not party that matters. Rather it is ideology.


In 2019 America we have conservative, liberal and centrist ideologies. There are several other splinters from these three – like libertarian – but then libertarians can’t agree on what defines them so why should we worry about them?


Issue groups do not count. Those are merely time-focused efforts around a single issue that resonates with voters at that time in history. So let us focus on the three ideologies and not the parties.


Doing that, we soon discover that party affiliation is a lot of baloney and has been overplayed by structural politicians for large spans of history. The republican party is nothing more than a modern day conservative cult. It hangs onto power for that sake alone – power – and that yields vast sums of wealth into the hands of greedy people and ideologues.


Soon the focus is on them and not the country. And that’s the real point.


America has lost its bearing in my view. In the main, America is not conservative or liberal. It is something in between. I call that centrist or ‘middle of the road.’ Over time the lines between the ideologies become blurred only because of specific focal points that pop up at particular times; but those are temporary diversions.


The primary purpose of government is to maintain basic services and safety of the people, all while working for the common good of the people. Military preparedness pops readily to mind. Educated public does as well. Health and human services arise as worthy tasks as long as it is kept in balance with the needs of those who cannot provide for themselves. That boundary definition will always be a struggle.


Ideology can warp government far from its founding principles. For example, conservative defines what about government? Liberal defines the function of government in what way? And what exactly is the centrist definition of government? Then again, are we discussing central national government, or regional, state government?


Lots of questions. One thing not in question is fairness and decision making. Hegemony over government process is not government. That would be autocracy, monarchy or dictatorship.


No; government is all about compromise in finding a common point upon which consensus can be found. That means one side or the other does not hold sway. Does this reflect the reality of today?

No. Today’s government process is all about conservative beating everything else to a pulp. That is not only anti-government, it is anti-American.


Perhaps it is time we did away with parties and their self-serving fiefdoms and inner monarchies?

Well, at least we would get back to arguing the basics of conservative, liberal and the in-betweens.  Anyone have a good suggestion on how we can proceed?


September 10, 2019