The first day

My university is celebrating 50 years of desegregation and asked me to supply them a vignette to be published along with others on the first years of desegregation. Here is what I sent.

The First Day
Harold A. Black
Growing up in the segregated south, I had never had a conversation with a white person until I arrived on the Georgia campus with my father for an interview. The university had insisted in its desegregation suit that it had never denied admission on the basis of race, it had just not received an application from a qualified black. We all knew that was a lie as evidenced by the academic and professional achievements of previous blacks who had been rejected for admission. The application form had race on it, called for a picture (as if they didn’t know the race of an applicant from Booker T. Washington High School in Atlanta) and an interview of instate applicants. My interview was in Athens because the Atlanta interview date on my letter had already passed before the postmark. So my Dad and I went to Athens where we were subjected to the most amazing interview (I won’t identify the administrator). He did not shake our hands or ask us to be seated. He asked why I wanted to come to the university since I was not wanted. He then used the “N” word. We got up and left. Dad said, “well I guess you will have to go somewhere else.” Instead, one week later I received a letter with a red and black border that said “Inside is your admission to the University of Georgia”. We never figured out why I was accepted.
When we arrived at Reed Hall where all freshmen men were housed, we walked into a crowded lobby and it was like Moses parting the Red Sea. When we arrived at the desk, the house mother said “You must be the Blacks.” Indeed we were. We were shown a room with a single bed. Mom said “Is he the only colored boy?” Yes ma’am. When we got back to the car Mom said “get in. We’ll come back for your stuff but you are not going back in there.” I told her that since I was there I might as well stay. Dad opined that perhaps the university had accepted only one black male and if he were harmed or left because of harassment, they could show that they were rejecting blacks for their own safety. In any event, I certainly was not made to feel welcome. The bookstore initially refused to sell me textbooks, I had to show an ID to be served in the cafeteria and the first time I went swimming on campus, they kicked everyone out the pool and drained it.
That night we had a dorm meeting and when I walked into the auditorium I was determined not to sit in the back (it was back of the bus days) so I walked down the aisle with growing silence behind me. I finally picked out a row and sat down. Everyone on the row got up and moved (this became a common experience since no one sat on the same row in my classes for the first two years). The four guys sitting directly in front of me, turned around to see what the commotion was all about and said “You are a freshman?” “Yes”. “Well we are too, can we sit with you?” These became my closest friends from the very first day. They introduced me to their other friends and Westminster House where I could study in peace. They encountered more harassment than I – even though my windows were broken every night and my room set on fire twice. Yet they never wavered in their friendship. It was as if God said “Harold sit there.”

Racist?

Speaking of racism, have you noticed how the charge of racism has become the last desperate charge of those devoid of ideas? Conservatives are charged of being racist by liberals because conservatives have won the battle of ideas. Liberals charge the Tea Party as racist in order to try to discredit their positions. MSNBC and the like say that Tea Partiers are racist because they are against Obama. Oh contraire, they are against Obama's policies. Consider: are the Obama supporters racist because they support him because he is black? Huh? My niece who is a liberal professor is encountering some difficulties within her department and says that "they are tea partiers with hoods". Actually my dear niece, they are liberal professors doing what liberal professors always do - practicing racism. Just because you are good at what you do is not enough. Liberal professors do not appreciate arrogant, smart, take it or leave it, abrasive, uppity black women (or black men for that reason) although they themselves are prima donas. I think it is ironic that the most racist institutions I know of are the most liberal - university faculties and Hollywood. Remember when Halle Berry won her oscar and stammered that she never thought she would live to see the day when a black actress won? And this is the liberal crowd. Everyone knows they are racist in front of and behind the cameras - yet few acknowledge it. They are liberal in all their views and positions except when it comes to their own personal and professional lives. The same is true with universities. I have encountered more racism at universities than I have outside. Faculties are generally lily white and if they hire blacks, typically it is at the lowest ranks with tenure and promotion forthcoming less often than similarly situated whites. Yet university faculties are 95 percent liberal. I know faculty who vote liberal, support liberal causes, spout liberal platitudes yet would not go into the ghetto to live, to tutor or send their kids to public schools if it means sending their kids to a majority black or hispanic school. All liberals I know and know of are statist. They want to impose their views on the masses and think they know what is best for everyone. Conservatives generally believe that the individual - regardless of status - know what is best for themselves. Personally, I hold most liberals in contempt. Do you?

Boo!

So who are you afraid of? Its always someone or something. Remember when we were afraid of the Japanese? They were supposed to out produce us, our innovate us, make better products, have a huge trade surplus to our huge trade deficit. Books were written comparing their industries to ours and what we should do to emulate them. They held our debt and owned us. They had a superior economic system. Soon our children would have to speak Japanese. So what happened? None of it turned out to be true. Now we have the Chinese boogyman. Just substitute "China" for "Japan" above. Boo! Should we emulate China? Hardly. It is a country with a population of 1.3 billion, yet its GDP is only $5 trillion. In contrast, US population is 307 million and US GDP is $13 trillion. China has serious problems with its economic growth being uneven, with the benefits mostly not reaching most of the population. It is statist which inhibits its growth. Want to really be afraid? Look around the world. In everywhere but China, the Chinese are capitalists and merchants. As I tell my Chinese students, if China got rid of that silly communist stuff, it would then really be a power to reckon with. Well what about China owns us? Yes I have seen that really stupid commercial about the Chinese lecturing an audience of students talking about the downfall of the US because the Chinese bought all the US debt. What utter nonsense. First off the Chinese are the third or fourth largest holder of US debt. They flip with the Japanese. Here is the top ten: 10. US insurance companies 9. US depositories 8. the UK 7. state and local governments 6. pension funds 5. mutual funds 4. Japan 3. China 2. US investors 1. The Fed. By the way the Fed holds over $5 trillion of the $14 trillion of debt and the Chinese (and Japanese) hold "only" $880 billion. These numbers do not frighten me. Own the US - hardly. Have you thought why the Chinese own US debt? Well what are they going to do with the money we pay them for their goods? Buy US goods? They are the world's second largest importer (behind the US). Those dollars that they hold must come back to the US either by buying goods and services or buying US stocks, bonds and debt. In any event, those dollars are used in the US and support US GDP. Only a fool (or xenophobe) or politician preying on racist fears would want this to stop. Fear the Chinese, how about fear the Fed? Boo!

Just say no

January 15 is Martin Luther King, Jr.'s birthday (and my son's as well as the anniversary of the first Super Bowl). I have been asked to keynote the celebration at the University of Tennessee as well as UT's observance of 50 years of desegregation. I have also been asked to speak at my alma mater's celebration at the University of Georgia. Speaking at Georgia is appropriate since I am that university's first black male freshman. I came late to appreciating Martin Luther King. Having grown up in that era and participating in its events, I looked upon King as just another civil rights leader. It was only when I read Taylor Branch's Parting the Waters did I began to grasp the singular importance of King. I had always wondered why the civil rights movement did not turn into an armed conflict. In the south, we all had guns so why didn't we use them? It was the power of King's personality and his devotion to Ghandi's nonviolence that resulted in blacks turning the other cheek and letting the spectacle of white violence shift national public opinion. In that spirit, I would like to see the same type of nonviolent protest on government mandated healthcare. To date 35 state legislatures have either passed resolutions or laws banning federal mandated healthcare. Also a judge in Virginia has ruled it unconstitutional. Moreover, AGs from 21 states have filed suit against the federal government over this provision. Polls show that the majority of Americans oppose the mandate. But what if the Supreme Court rules it is constitutional? Then I propose that we Americans just say no. Although we are law biding citizens, it does not necessarily follow that we must obey the law blindly. What if we opted not to buy the insurance and do so on a nationwide basis? Could the federal government dare enforce it? I think not. It would be helpful if the republicans in congress would also encourage massive civil disobedience. If they cannot defund the legislation or repeal it, then they should help lead the public to refuse to follow the mandate. In the absence of national leadership on this issue, what is needed is the rise of another Martin Luther King, Jr. to lead the way in just saying no.

The tax deal

Wasn't the president's tax deal with the Republicans one of the most curious bits of theater you've seen recently. He said at his press conference that he was being held hostage (presumably calling the Republicans terrorists) and had to cave in and give tax "cuts" to the "wealthy" in order to get tax "cuts" for everyone else. Wow. What a novel idea to actually give tax relief to those who actually pay most of the taxes! Anyway, it is not a tax "cut". Bush cut the taxes and Obama is not letting them rise to their old levels (for now). Along with the tax "cut" is a two percent cut in payroll taxes paid by the employee for two years. Supposedly this is to help jump start the economy. It won't rather it will just slow down the slide. Consumers in recessions pay down debt and so do businesses. Until they do so and until the housing market recovers we will be in a slow growth mode. Also no one is going to seriously consider altering buying and investing with just two years worth of relief. If Obama were truly serious, he would make all the changes permanent. Lastly, the president continues to amaze me in how he is such a bad politician. His performance belies the avowed intellectual superiority of an ivy league education. Heretofore, the only dolt we were told with degrees from Harvard and Yale was George Bush. Does Obama really think we believe that he caved because he did not have the votes because of Republican solidarity? Did he forget that he still has the lame duck congress with his super democrat majorities in both the house and the senate? Who is he kidding. Instead of being long faced, he should have been enthusiastic and embraced the ideas as his own. That would have been the first step into morphing into Bill Clinton and getting re-elected in 2012. Instead he continues to be Jimmy Carter, destined for a one term presidency.

Harold Black's Laws

Russ asked me for my laws. Here they are. Comments are always welcomed. Just like my axioms of the hunt, I would appreciate hearing what yours are.

1. Any law worth circumventing will be.
2. Any law passed during crisis is a bad law.
3. Harold Black’s second law also applies to most laws passed when there is no crisis.
4. If something fails the market test and exists only because of the government, it is bad.
5. If it is mandated it is bad.
6. If it is subsidized, it is bad.
7. If it is protected, it is bad.
8. Any person desiring to hold public office can’t be trusted.
9. The only laws that politicians repeatedly seek to repeal are the laws of supply and demand.
10. The reason why politicians who are generally fairly intelligent people (with a few well known notable exceptions) make such stupid and harmful decisions is that they are not guided by the profit motive.
11. Politicians are smart enough to exempt themselves from many of their own laws.
12. Electing presidents who have never faced budget constraints seldom end well.
13. Regulators, faceless bureaucrats and congressional staffers are the most dangerous people in the country. They are seldom if ever held accountable. They write the legislation and the enabling regulations. They never get fired. They never answer to the consequences. Instead, they get pay raises, six figure salaries, lavish benefits and essentially tenure.
14. Bureaucracies create their on special interest groups and are self serving.
15. If government agencies were put to the market test, most would be out of business. Case in point: the Department of Education fails to increase educational achievement and is only a slush fund. The Department of Energy has failed to address energy independence and is only a slush fund for Al Gore and the greenie weenies.
16. If a law does not have unintended consequences, then it was not worth passing.
17. Ads that say hurry because the product is limited must think we are fools. If it were unlimited then we would all have been killed by it.
18. I never want to know whatever it is that ads that claim they are telling us that someone "does not want us to know" wants us to know.
19. Whoever favors term limits never has seen the California legislature.
20. The purpose of the tax code is to reward some and to punish others: the collection of revenue is of secondary imporantance.
21. Murphy was an optimist.

Why I hate basketball

Once I actually enjoyed basketball - professional and college. Now I don't watch either although I did suffer through my loved Georgia Bulldogs squeaking one out against the once hated Georgia Tech North Avenue Trade School. Did I say suffer a victory? Yes. It pains me to watch what now passes for basketball. It is mostly one on one clear out drive the lane try to dunk and get on Sports Center. I hate all the tattoos as well. Why these kids glorify prison culture is beyond me. Georgia and Georgia Tech both shot less than 30 percent from 3 point range - yet they kept shooting. Neither could shoot free throws - Georgia missing two at the end that could have put the game away. It was a parody of what was once a beautiful game - look at the old film of John Wooden's UCLA teams to see what I mean.I was wondering if you recruited a team that could actually shoot rather than just dunk would you have more success? The answer is obviously yes - as Butler and Duke in last year's championship game attests. Few few tattoos, great teamwork, no poster dunks and no beating one's own chest - another thing I hate about today's sports. Of course the pro game is worse. Virtually everyone is covered with tattoos, has pierced ears, goes one on one and can't shoot. By the way, would you please explain to me why a dark skinned black guy would get a tattoo? It looks like his arm is dirty and he just needs a bath. I bet Red Auerbach's Boston Celtics could beat any of today's teams. The only throwback team is the San Antonio Spurs. You have got to have loved David Robinson and now his somewhat fading successor Tim Duncan - although even Duncan has a tattoo peaking out of the back of his jersey. So if there is nothing better to do - and I mean nothing - I will turn on a game and pull for the team that looks the most human. However it is generally the case that I can't stand what is now a caricature of a once great game played by incredibly athletic people who somehow can only shoot 50 percent from the free throw line. One person I know and respect and his wife have left the men's game and have become huge Lady Vol fans buying season tickets, going to big road games and always going to the championship tournament. They say that the women's game is like basketball once was with passing, teamwork, team defense, few tattoos and less bravado. That may be true but even in the land of truly great women's basketball I cannot look at it. They may be better shooters but ironically they miss too many layups and are less athletic than the men. So I guess I will just suffer withdrawal until catchers and pitchers report for baseball's spring training.

OK so I was wrong

I am bitter about very few things. However, I am bitterly disappointed that one of my predictions made during the 1960s was wrong. I thought that as a product of voters rights that the educational achievement of black kids would increase dramatically. When I was growing up in Atlanta during the Civil Rights movement, blacks made up over 50 percent of the school age population but only had 6 of the 20 or so high schools in Atlanta. So our schools were big. We had horrible facilities, used textbooks with white school's names on them and no scientific equipment in the labs. However, we had terrific teachers. Back in those days, teaching was a well paying job for a black college graduate and we had tons of male teachers too. Now the colleges of education at our universities are the place where the poorest performing students matriculate and our public schools are loaded with incompetent, poorly educated teachers. I digress. I thought that once we got the vote, we would elect city officials and school boards who cared about educating our children. You see I thought that the reason why black kids got shafted was because white officials who got elected by running on a racist platform were actively discriminating against blacks. Well it was true. So we got the vote, the whites fled the city, we voted the bums out and put in place a black mayor, city council and school board. And what happened? Educational achievement went down! Why? First better jobs opened up for black college graduates. Teacher's standards eroded as well as accountability. My beloved mother who taught second grade for 40 years started complaining about the quality of the teachers - saying they just didn't care about the kids and were unprofessional in their dress and behavior. The teacher's unions became a political force and the politicians began to be manipulated and sometimes bribed.

What became ironic is that the only politicians who seemed to care were the Republicans at the time led by the late Jack Kemp who pushed for vouchers and now charter schools - both of which demonstrated higher achievements among black urban kids than the public schools. Of course both have been derided and panned by liberal democrats and their black lackeys. Well vouchers work. Charter schools work. What we need is a market solution to the problem of low achievements in education. The market would not tolerate a system that is so bankrupt, so corrupt and so poor that damages and destroys our children. Most urban parents are not equipped to home school their kids so that is not an option. However, charter schools like the Harlem Success Academy and like Chicago's Urban Prep show a startling juxtaposition of the same kids from the same environment having radically different academic results. It is a national shame that we have allowed our education system to become so woeful. In a market system, those schools would have be put out of business and their teachers and administrators fired or put in jail. Instead, they have been rewarded with ever increasing salaries, benefits, pensions and tenure. So in an earlier blog when I wrote "Why do democrats hate black kids?" I meant every word. I also include among that number the black leaders of the teacher's unions, Jesse Jackson - who sent his kids to ritzy prep schools - Al Sharpton and every so-called black leader and civil rights organization that remains silent rather than making this the number one issue in black America.

Only something this stupid could come from Washington

I have written before that burning our food as fuel was one of the world's dumbest ideas. The only reason we use ethanol is due to Iowa having one of the first presidential primaries. If that weren't the case, no national politician would care about Iowa. However, as it is now constructed the farm vote is vital early on. Ethanol confirms three of Harold Black's laws "If it is mandated, its bad". "If it is subsidized, it is bad" and "If it is protected, it is bad". That is, if it fails the market test, then it is simply wasteful. Ethanol is mandated to be mixed with gasoline by the government. Supposedly this is to reduce the dependency on foreign oil. But, ethanol is less efficient, burns hotter, damages engines, more expensive to use and to produce and is more harmful to the environment. On top of all that, we burn up our food raising food costs to boot. Studies have reported that US food prices have increased by over $15 billion annually due to ethanol consumption. That is because corn is feed to livestock as well as to people. There is even a report by the World Bank that said that US energy policy has led to food riots around the world by increasing the costs of our exported corn as more gets burned at the pump. We even impose tariffs on the importation of ethanol to make Brazilian ethanol too costly to use domestically - at least the Brazilians burn sugarcane. Let me digress for a second. One of my fondest memories is my parents bringing home sugarcane for us to chew. We loved it! I guess that was one of the casualties of the Cuban embargo. By the way, this was just another example of the bad policy actions taken by George Bush who signed the law mandating a five-fold increase in the amount of ethanol mixed with gasoline. Well now there is a bit of light at the end of the tunnel (and hopefully it is not a train). Where else would the right and the left agree on anything? But 17 Senators including Diane Feinstein and John Kyl have called ethanol (according to the Wall Street Journal) "economically unwise" and "fiscally indefensible". Even more revealing the aforementioned senators even cite in a sense the three Harold Black's laws when they point out that ethanol may be the only product that is mandated, subsidized and protected. Glory be! If Washington actually admits that a disaster of its own making is really a disaster, perhaps the November election is paying dividends even in this lame duck congress.

Random thoughts

1. This the holiday season and for some reason GMC is running a commercial in which it is advertising its truck as a "nutcracker". I don't know about you but I would never buy a truck - or any vehicle - touted as a nutcracker.

2. I have 5 words that students must spell correctly or I dock them extra points. They are principal, yield, receive, guarantee and separate. Students tend to spell these as "principle", "yeild", "recieve" "garantee" and "seperate". After three exams there was only one hold out. Yet I got "municiple" and "loose" instead of "lose". I have given up on affect versus effect.

3. I mute all movie trailers on tv. Have you noticed that they are either all shooting guns (and this from the Hollywood left) or some woman screaming. It must be a shame being in a generation where the only talent required to be in a movie is the ability to scream.

4. Driving down the interstate to the family farm in Georgia I noticed two billboards. The first was for a uniform outlet store. Since the merchandise in outlet stores are irregulars I was wondering how could a uniform be irregular? The second was for a Bible outlet store. Now I know where all these weird interpretations of the Bible come from - its all those irregular Bibles!

5. Also while driving I noticed that all the hybrids are ugly and little cars as well as expensive. Why anyone would want to pay a premium for one is beyond me.

6. Speaking of stupid - I guess the "Smart" car is called that because why would anyone buy a car that stupid? Have you noticed that all the drivers appear to be white middle aged hippies? Even Car and Driver agree saying that the Smart is "slow, has disappointing mpg and cargo room, and isn't cheap. Seems like Dumb to us." Amen.

7. Why are the vehicles most often speeding minivans? Could it be that the owners are so ashamed to be driving them trying to prove something like "it may be a minivan but it can go really fast (in a straight line). Pity all those poor kids.

8. Isn't it ironic that Miller Lite's new commercials feature rather well endowed women giving wimpy men grief for now asking for Miller lite - which is a girlie beer? When "light" beer was introduced by Miller it was to get women, especially college coeds to drink beer by making it low calorie. To get men to drink it, the first commercials featured ex-jocks who argued whether it was less filling. Now Miller is trying to shame men into drinking it by saying in essence "if you are a wimp you might as well drink our girlie beer.

9. Speaking of commercials, I hate the ones that have children advertising adult products. That includes the one with the obnoxious brat in the investing commercials and the one with adults speaking like children. What is the point? How does this motivate grownups is beyond me.

10. Isn't it ironic that our institutions of higher learning have license plates that are functionally illiterate saying "Alumni University of (fill in the blank)"? I always ask the driver if he and his wife both graduated from the university and the answer is invariably no. The only schools that I know of that get it right are Spelman College (Atlanta) a women's school that says "Alumna" and Morehouse College (also Atlanta) that says "Alumnus".

Why environmentalism is dangerous to the environment

Today's quiz is to identify the law that contains the following:

TRANSPARENCY FOR EXTRACTION INDUSTRY

Public Disclosure: Requires public disclosure to the SEC of payments made to the U.S. and foreign governments relating to the commercial development of oil, natural gas, and minerals.

SEC Filing Disclosure: The SEC must require those engaged in the commercial development of oil, natural gas, or minerals to include information about payments they or their subsidiaries, partners or affiliates have made to the U.S. or a foreign government for such development in an annual report and post this information online.
Congo Conflict Minerals:

Manufacturers Disclosure: Requires those who file with the SEC and use minerals originating in the Democratic Republic of Congo in manufacturing to disclose measures taken to exercise due diligence on the source and chain of custody of the materials and the products manufactured.

Illicit Minerals Trade Strategy: Requires the State Department to submit a strategy to address the illicit minerals trade in the region and a map to address links between conflict minerals and armed groups and establish a baseline against which to judge effectiveness.

If you guessed the Dodd-Frank Wall Street Reform and Consumer Protection Act you win the prize. Yes the act that reforms the financial industry that has nothing to do with the current financial crisis contains a provision on reporting of mineral purchased from the Congo! The reason that the provision appears is because minerals essential to the production of the batteries used in hybrid and electric cars come from Zambia and the Congo. Also cobalt is vital in lithium batteries used in ipods, iphones and laptops. Moreover the same is true with the materials used in making circuit boards. Over 80 percent of cobalt is from these countries where racial tensions have seen over 5 million deaths in the Rwandan genocide. Some concerned people (see Aaron Robinson's editorial in the November issue of Car and Driver) say that the demand for these vital minerals are fueling the murders. Moreover, the mining of the minerals are wreaking environmental devastation in the region. So isn't it ironic that the environmental do-gooders are helping to murder Rwandans and destroying their country? Not to mention that the whole notion of saving the planet by producing electric cars is simply stupid. How do you recharge the batteries? Electricity. And how do you produce electricity? Coal. And what fuel is absolutely abhored by the greenie weenies? Coal. Or of course you could use nuclear. Lastly, what about the replacement cost of the batteries? Try $5000 per battery for a Prius and $15,000 for the battery bank of a Chevy Volt. I for one am tired of this kabuki theatre.

On the entitlement generation

Excellence in higher education is hard to define. How can you tell if a professor is doing a good job? I've always said that so long as my students didn't run from the room with their hands over their mouths, I guess that I was doing ok. Or better still, I guess that I did ok when I get feedback in later years. I heard from a student who had my class 10 years ago and said how much he hated me and hated the class. Now he took the Series 7 exam and 85 percent of it was covered in my class. He scored among the top 5 percentile and wanted to thank me. I also heard from a student who had my first class taught at the University of Florida in 1972.
So if I am doing ok how do I know if the school is doing its job? At the undergraduate level I teach seniors. Many are functionally illiterate in that they cannot spell – and I take off for misspelled words. They do not know literature, history, geographic or politics. This semester I have asked “who is Joe Biden” and a fourth of the students had no idea. I got answers on an exam question that showed that the students thought that a state representative or a governor could introduce legislation in the congress. Many students had no idea how many senators did a state have. I said “what have you been taught all these years?” If I had the power I would flunk all of you – not because of what you know in finance but what you don’t know.” I would not want you to be a graduate of my university. I actually had a student who asked me a couple of years ago, “Why should I know anything?” Why should I know math when I have a calculator? Why should I know geography when I have mapquest? Why should I know English when I have a word processor with grammar and spell check?
So what should we do? For starters we at the university should demand that our students be at first educated. If we turn out graduates who do not read, lack writing and communication skills, are short sighted, not global, socially insensitive and not culturally attuned, then we should not be shocked when our business leaders turn out to be myopic. So I relate finance and economics to history and the text material to current events. Generally, students eye glaze over. Some students resent the fact that I expect them to read news reports and current periodica¬ls. I was once admonished in a student evaluation that “this is not a history class. This is not an English class. This is not a political science class.” I wish he had said that in class because I my response would have been “Yes it its.”
But we the faculty need to be insistent upon excellence from the time that the students walk in the door. Many professors have simply given up saying that this is the entitlement generation. Students expect to pass with minimal effort and professors figure its not worth it to resist. At our major universities, teaching is secondary to research anyway. So why get grief from your students when more rewards go to research success? I had a professor once who told me when I was complaining about a lousy teacher that “Bad teaching does not harm good students.” That may be true. I teach my class for the 10 percent who actually want to be there and actually want to learn. Students need to be intellectually aggressive. Students should expect to be challenged in the classroom to be encouraged to think about creative solutions to problems. Yet, we have got to find the synergy between good teaching, research, business experience, and classroom participation. We must spend less time on fact gathering and technique learning and more time thinking, analyzing and dealing with people, productivity, quality and product value.
This is my last year. I am retiring in August. As much as I love what I do – the research and the teaching – this generation has driven me to distraction. As I often tell them, the world is run by those between 50 and 65. Fortunately by the time they turn 50, I should be dead.

Truly stupid

Electric cars are truly stupid - almost as stupid as hybrids (but thats another story). I just saw the commercial of the polar bear hugging the owner of an electric car. First polar bears are not hugable creatures and are more likely to bite the guy's head off than to hug him. Secondly, the bear should be laughing at the dumb consumer. Electric cars have virtually no range and are only good for urban commuting - if that. Second, they take overnight to charge. So it makes sense to drive your electric car on your hot date because you won't be able to get back home and would have to stay overnight. Third, the cars look like little butt-ugly death traps. How in the world did they ever pass the crash tests? Fourth, the battery backs typically account for one third to one half of the vehicle costs. Did that salesman tell you that in around 5 years you will have to come up with $15,000 for new batteries. Fifth, in addition to not being able to take a trip in them due to limited range and no room for baggage, you can't tow anything. That rules out the boat, the camper or the motorcycle trailer. Rather you will have to tow it behind your motorhome or your Ford F350. So what's more stupid than electric cars? The Obama Administration's mandate that fleet mileage standards must move to 62 miles per gallon by 2025. That is not obtainable unless you eliminate all the trucks and fun to drive cars - even with anticipate increases in technology. I have said it before: Obama hates trucks, RVs and travel trailers. His rules will kill the industry. Also, conservative estimates are that the price of vehicles will rise by about %5,000 per car. All of this insanity is supposed to be necessary to save the planet - hence the grateful polar bear. Give me a break.

If not now - when?

Now with the public having spoken this time the same way it spoke last time, isn't it about time to do something about Federal spending? Recall that the current president was voted in and his party given power the previous election because of public outrage over how the ruling Republicans had mismanaged the budget. Well the Democrats, being Democrats, did even worse. The deficit as a percentage of GDP grew from 3.18 percent in 2008 to an astounding 10.64 percent in 2010. The total debt burden in the county grew to almost equal GDP at $14 trillion placing the United States among the top 10 debt burdened countries in the world along with Zimbabwe. Welcome to the third world. The CBO says that the Obama spending spree will add $9 trillion to the debt over the next decade. Everyone, including the president recognizes that this debt is unsustainable. Why? One reason is that the markets will have enough treasurys and will either stop or significantly slow down their purchase. In so doing, the government will then have to sell the stuff to themselves in order to keep on financing deficits. Well who owns the government debt right now? Most people would say China but China is either three or four now - trading places it seems daily with Japan. Actually the Fed is number one and is now saying that it is going to buy even more in $600 billion in long term treasurys. This is monetizing the national debt and is reckless and even fool hardy. What can be done? First, a balanced budget amendment is fool's gold. Congress will always move to balancing by raising taxes than cutting spending. Raising taxes is easy. Cutting spending is not. If budgets are going to be cut, it is not how senator elect Rand Paul claims by cutting Federal employment, wages by 10 percent and freezing federal payrolls. Nor is it by taking recommendations from places like the Heritage Institute which is pick and choose what's important and what's not. That's a value judgment. No. What has to be done is to cut the entire federal budget by 10 percent as a starting point. Tell all the agencies that they get 10 percent less - yes including defense. No sacred cows. Then let them cut without congressional interference and manipulation for selected constituencies. Then limit the growth in government to no more than than the growth rate of GDP the previous budget year never to exceed the long term growth rate in the economy (3.7 percent). Then let total federal spending never to exceed 20 percent of the previous year's GDP. This will get the deficit down and the budget will balance itself in 10 years. I too prefer a flat tax of 18 percent of all income and the removal of all other taxes period at the federal level to restore incentives and remove uncertainty.But first things first. Right now I believe we have the will to cut federal spending across the board if all have to share the burden. So let's get started.

Startling Incompetence

Knoxville News-Sentinel November 7, 2010

John Maynard Keynes, commenting on the Federal Reserve after World War I, is reported to have called it a body of "startling incompetence."

Well, the current Fed carries on that tradition. After embarking on a policy of remarkable monetary ease, the Fed seems determined to continue that policy despite no indications it has done any good. What that policy has done is to accomplish little. It has pushed short-term interest rates close to zero and has punished savers and those who depend on their savings as a source of income, such as retirees.

It has resulted in dollars being borrowed at low rates and then shifted into countries such as Brazil to earn higher returns. It has relentlessly driven down the value of the dollar.

The low rates are a result of the Fed buying short-term Treasurys to support the dramatic increase in government spending over the past four years. In buying Treasurys from the banks, the Fed has created excess reserves of more than $1 trillion. These excess reserves basically have sat on the banks' balance sheets because of low loan demand by businesses and consumers. As long as the excess reserves are not lent, then no money is created and inflation stays low.

However, when the Fed buys Treasurys directly from the U.S. Treasury - monetizing the national debt - the result is an increase in the money supply and sets the stage for an inflationary recession. At its Open Market Committee meeting last week, the Fed announced it will start buying long-term Treasury bonds directly from the Treasury. The result will be to lower long-term rates to stimulate investment spending by businesses.

The immediate result, however, will be a further drop in the value of the dollar as more dollars are created by the Fed's purchases and an increase in inflation. There is no guarantee that businesses will invest unless the uncertainty about the future is resolved - something that is up to the Obama administration and Congress. Moreover, when the government is interfering in the market, the private sector knows that rates are being actively manipulated and less risks are taken because of increased uncertainty about the future. What rational person or business will make important decisions not knowing about future taxes, costs related to health care and energy policies as well as the ever-increasing costs of regulation?

What is intriguing about the Fed's new policy of buying long-term Treasurys is that I know of no monetary economist that supports this action. Indeed, after having created much of the economic problems through monetary ease in the first place, it now only compounds the problem. The blame lies not just with Chairman Ben Bernanke but with the entire Fed. Bernanke only has one vote on the Open Market Committee along with the other Fed governors and the presidents of the New York Fed and three other reserve banks.

However, to be fair, the presidents of Fed banks in Kansas City, Mo., Dallas, Minneapolis and Philadelphia have expressed opposition, with the Kansas City president calling the new Fed policy a "bargain with the devil."

Maybe the "startling incompetence" just radiates from Washington.

Dr. Harold Black is the James F. Smith Jr. Professor of Finance at the University of Tennessee. He may be reached at hblack@utk.edu.

Get Copyright Permissions © 2010, Knoxville News Sentinel Co.

Racist Tea Party?

That the left was afraid of the Tea Party gaining traction among mainstream America was evident by the constant use of the word “racist”. The NAACP got into the fray by asserting that only the white sheets were missing. However, nothing could be farther from the truth. Oh I am sure that there are some racists in amongst the Tea Partiers but there are racists in the Democrat party as well. The only qualifications to being in the Tea Party are a desire to have smaller less intrusive government, lower taxes and positive incentives for economic growth. I have spoken to Tea Party rallies and although there have not been a lot of black faces, there were always some – which is remarkable given the paucity of blacks in East Tennessee. I have yet to have heard mention of two black tea party candidates being elected to the House: Allen West in Florida and Tim Scott in South Carolina. West is the army colonel who was forced to retire because he held a gun to the head of an Iraqi to get him to talk. He is also from Atlanta and a UT graduate – so a little pride there. The election of West and Scott actually is a return to black roots where the first black congressmen were all Republicans (elected prior to 1900) and until Franklin Roosevelt, most blacks were Republicans. All in all there were 14 black GOP congressional nominees most of whom were supported by the Tea Party. Incidentally, how foolish is it to call tea partiers racist when an Indian-American republican woman is elected governor of South Carolina? Another Indian-American is the republican governor of Louisiana. Two republican Hispanic Americans were elected governor: Susana Martinez in New Mexico and Brian Santoval in Nevada (beating Harry Reid’s son Rory). Also don’t forget Marco Rubio a Cuban-American elected as a republican to the senate from Florida. Rubio is also one to watch for the national scene. He is charismatic, young, gives a great speech and has vision. If he stays true to his principles he may make a run for the White House either in two years or later. Right now, my dream ticket would be Chris Christie for president and Rubio for vice president. One can only hope.

Bernanke or Miller?

Ben Bernanke will likely go down as the least capable chairman of the Federal Reserve or at least tied with William Miller for that dubious honor. Bernanke has flooded the economy with liquidity in having the Fed support the spending spree started by George Bush and continued fourfold by Barack Obama. A continuing discussion at the Fed is from Bernanke continuing to press for monetizing the national debt by buying long term Treasuries after having bought the securities of Fannie Mae and Freddie Mac and creating a commercial paper facility to buy commercial paper. I wrote in a piece a couple of years ago that the Federal Reserve's policies were destabilizing and adding to the uncertainty in the economy. What the Fed needed to do if it wanted to ensure that the economy would be on the right track and start to grow without inflation would be to adopt a monetary rule and grow the money supply at a rate equal to long term economic growth. Well lately there has been a rash of articles saying the same thing. John Taylor at Standford and Allan Meltzer of Carneige-Mellon have written pieces saying the same thing. Adopt a monetary rule, quit the knee-jerk reaction to contemporary events and focus on the long run. Maybe they will be listen to since obviously someone writing here in fly-over land keeps getting ignored.

The New Revolution

Has anyone noticed that the recent election shows democracy in action? Voters are disgruntled with Washington's spending spree, new laws and fiscal irresponsibility. Now the voters are speaking and taking it out on the incumbents - most notable in the Republican primaries. Senator Bennett of Utah and Murkowski have lost. Charlie Crist once the odds on favorite for the Republican nomination to the Senate from Florida left the party to run as an independent due to Marco Rubio. In the Florida governor's race Rick Scott upset establishment's Bill McCollum. Even Arlen Spector who left the Republican party because he would have lost to Pat Toomey still lost as a democrat to Joe Sestak. Tea Party favorites beat establishment candidates in Kentucky (Rand Paul), Nevada (Sharon Angle), New Hampshsire (Kelly Ayotte) and stunningly in Delaware (Christine O'Donnell beat Mike Castle) and New York (Carl Paladino beat Rick Lazio).There are also at least 15 Tea Party endoreses who won House primaries. Many have pointed to the endorsements of Sarah Palin and Jim DeMint in all of this. But mere endorsements do not get people out to vote. Rather it is a general anger in the performance of establishment politicians and the appeal of electing citizens to replace the professional politicians who have done little in their lives except running for political office. The establishment has wrung its hands saying that these novices cannot win. The mainstream media has been running articles on many of the candidates on seemingly odd social statements or past happenings. However, not a word on what truly matters to voters: taxes, growth in federal spending, new legislation on health care, card check, cap and trade, national defense. Conveniently forgotten is the media's relative silence on past digressions by its elected favorites. However, keep in mind that calls to eliminate the departments of education and energy are no longer kooky in the eyes of the public. Ideas to freeze federal spending and roll it back to 2008 levels, to take a hard look at entitlements, to enact a flat tax now look reasonable. I can't hardly wait until November 3 to see if this ripple of a revolution becomes a tidal wave.

Congressional Reform?

I got this from a friend:
Congressional Reform Act of 2010
1. Term Limits -12 years only, one of the possible options below:
A. Two Six-year Senate terms
B. Six Two-year House terms
C. One Six-year Senate term and three Two-Year House terms

2. No Tenure / No Pension - a Congressman will collect a salary while in office but receives no pension when they are out of office.

3. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

4. Congress loses their current health care system and participates in the same health care system that they have imposed on the American people.

5. Congress must equally abide by all laws they impose on the American people.

Serving in Congress is an honor, not a career. The Founding Fathers envisioned that citizen legislators would serve their term(s), then go home and back to work.

The original message also contained the following: "Congress (past, present & future) participates in Social Security - all funds in the Congressional retirement fund move immediately to the Social Security system. All future funds flow into the Social Security system, and Congress members participate along with the American people."

Of course, Congress already participates in social security as well as the Federal retirement plan. So I am not including this in the list above. Moreover, as to pension, I have no objection if the pension is a 401K - which Congress can already purchase rather than a defined benefits pension plan that guarantees the pension amount regardless of market performance.

For Whom the Bell Tolls

When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain. - Napoleon Bonaparte

Inject "central" before "banker" and Bonaparte was right. A previous chairman of the Federal Reserve once famously said that the Fed's job was to take away the punch bowl when the party got good. Now Bernanke's Fed has been adding liquor to the bowl. Bernanke has been a major disappointment. Instead of independence, the Bernanke Fed has been the handmaiden of the administration. First, he continued the tradition started by Alan Greenspan in pursuing accommodative monetary policy. Like Greenspan who supported the runup in spending by George Bush, Bernanke did this with the first Bush stimulus package and then with Obama's. Even worse his Fed set up a commercial paper facility to "save" that market, then started buying mortgage backed securities to "save" Fannie Mae and Freddie Mac, and then buying Treasurys to "save" the Federal government. The result has be an explosion in excess reserves which would have caused an explosion in inflation had there not be a recession. Of course, all of this simply prolonged the recession and helped turn it into the Great Recession. I had previously said that hopefully Bernanke was doing all of this in order to get re-appointed and once that happened, he would grow a pair. Well unfortunately, he is still a eunuch. Instead of taking the central bank to being independent, he has kept it the lapdog of the administration pledging to keep buying mortgage backed and Treasurys. Big Ben is the big enabler. Milton Friedman once advocated establishing the "monetary rule" where the money supply would be set at the long run growth rate of the economy. Friedman knew that discretionary monetary policy was destabilizing and led to economic uncertainty. However, if money growth was set and kept on a steady path, then we could have steady economic growth without inflation. Well the Bernanke Fed has been the Great Destabilizer. It has pumped reserves into the system. It has monetized the national debt by buying Treasurys. It has bought paper that the market has spurned. It has kept short term rates close to zero. However, it has not aided the recovery. In fact it has kept the recovery from happening. Obama is actually right in blaming Bush for the bad economy but shares equally in the blame for Bush appointed Bernanke and Obama re-appointed him.

Let's get real about the 'stimulus'

Knoxville News Sentinel

Sunday, September 5, 2010

As the president once famously said, "This is a teachable moment." The economy is in the doldrums. Despite all of the pronouncements of recovery, "green shoots" and upturns touted by the administration, the simple truth is what most of us know - the economy stinks.

Most of the growth numbers now are around 2 percent and are not enough to prompt job creation. The "green shoots" of recovery were all transitory, reflecting job growth and spending growth in the government but not the private sector.

Markets and people are not stupid. Temporary stimulus packages and tax cuts do not have a measurable impact on the economy because all parties know that it is temporary. Economic theory tells us that no rational person would alter their spending, consuming or investing behavior because of transitory changes. The empirical evidence bears it out.

Consumers and businesses all know that they must improve their balance sheets by paying off debt, and that is what they are doing. So what is the "teachable moment"? It is that big government spending does not work in taking an economy out of a recession. Call this the death of Keynesianism. As Anatole Kaletsky has said, we now recognize that both governments and markets make catastrophic mistakes, and we don't trust either of them. The only difference is that markets will correct their mistakes while governments will just compound them.

There are still economists like Paul Krugman who say the government needs to spend more to get us out of the Great Recession. But we all know better. The evidence is to the contrary - increased government spending makes matters worse and Americans know it. Two-thirds of us do not support another stimulus package. Stimulus does not work because the government has got to get the money from somewhere to spend. If it gets the money by borrowing in financial markets, then "crowding out" takes place - private investment falls because of the government borrowing. If the money comes from printing it, then the value of money falls in international markets and the potential for inflation rises. In neither instance will private investment spending increase, without which there is no job creation, capital or economic growth.

So how can we end the Great Recession?

It's actually rather simple - enact permanent incentives rather than disincentives. Let's call the program "Liberate to Stimulate." The regulatory burden of government has been estimated to be $1.4 trillion annually, which ironically is the size of the government deficit. Stop the uncertainty and reduce government's reach. Eliminate the capital gains tax and the corporate income tax. Permanently reduce the burden of regulation on business. Roll back health care "reform." Kill cap and trade. Decrease the rate of growth in government spending back to 18 percent of GDP. Simplify the tax code - I prefer the flat tax.

Yes, it is a teachable moment, but it is lost on a president who would rather transform the economy than fix it, and all of us as a result will suffer the consequences.

Poor Christina Romer, Part II

Christina Romer has resigned as chairman of the president's Council of Economic Advisors and now will be on his Economic Recovery Advisory Board - whatever that is. As chairman of the CEA, she took a back seat to Larry Summers, the president's economic advisor. Now why the chairman of the CEA isn't the president's economic advisor is a mystery to me but so be it. As chairman of the CEA, Romer was forced to advocate policies that were contrary to her economic research, stand before cameras putting on a happy face and lying through her teeth. Consider this, her research shows that Roosevelt's sharp rising of taxes and increased government spending prolonged and deepened the Great Depression. Now while we are in the Great Recession, she has been smilingly advocating positions of the administration that raise taxes and increase spending. Her work on taxation shows that increases in taxes lower GDP - not a position exactly in concert with the administration. Lastly her work with the so-called Keynesian multiplier (where somehow increases in government spending lead to a greater increase in GDP) were always less than the CEA forecasts and of course much less than the multipliers found by Bob Barro (which are negative). Now that she is leaving the administration, I wonder if she will start speaking the truth in the Economic Recovery Advisory Board and leave the lying to Jared Bernstein who remains on the CEA?

American-American

When I landed in Johannesburg I did not feel like I was returning to his homeland (since my homeland is Gray, Ga). It was not like I feel when I land in Knoxville and say to myself “home”. Go back to my things, to my house, to my dogs, where I belong. No here in Africa, no one looks remotely like me. The only people who thought I was a native were a couple from Charlotte (naturally) who asked me for directions (speaking very slowly) at the Johannesburg airport. I told them I was from South Atlanta not South Africa. There was one ticket agent for South African Air that was sufficiently mixed race that she could have passed for an American. No one was going to run up to me and speak Xhosa and welcome me home as a fellow tribesman. Of course my African tribes are much farther north. They were only one of at least 100 tribal groups taken to America where they were broken up and sold and dispersed with loss of language and cultural identity. When you arrive in Johannesburg, there is a sign that says “11 Languages one Country.” In the airport you could see distinctly different tribes. Although the color was fairly uniform, there were very distinct differences in the features from broad noses and lips to rather thin ones and all sorts of differences in cheekbones and brows. There was not nearly the variety that we see among American blacks. However when I landed in Polokwane where most of the blacks are Lesotho, you could see the similarities. At home it is rare to see two black people that could be identified as being from the same tribe unless they were from the same family. Do you think that Andy Young, Clarence Thomas, Vanessa Williams, Byonce, Jay Z, Michael Jordan, Patrick Ewing, Aretha Franklin, Al Jarreau, Thomas Sowell, and Keb Mo look even remotely alike? Even if you go to one region – like Knoxville – its hard to see tribal similarities. I guess in America since the blacks came from all over central and east Africa from literally hundreds of tribes, then got split up when sold and then mixed with whites and Native Americans the result is me. I have resisted calling myself an African-American. To me that’s silly. I even read a scholarly paper where the author referred to “European-Americans” a term that radical blacks have tried without success to pin on whites. Those are the people who want to segregate us with hyphens: African-Americans, Hispanic-Americans, Asian Americans, Native American-Americans, and European-but-not- of-Hispanic descent-Americans. Enough already, I have long contended that the hodge podge that makes American blacks American like me with my Scotch Irish and Cherokee ancestors the result is truly Mongrel-American. For some reason, that has not gained much traction. So what am I? I am an American-American.

HB’s Axioms of the Hunt

1. The wind will always be at your back (this is different from running where the wind is always in your face).
2. If by some miracle the wind is in your face and you suddenly hear a deer, the wind will shift to your back.
3. Murphy says that “if it can go wrong, it will”. Harold Black says “Murphy was an optimist.”
4. Deer will always pick the least assessable place to die.
5. If your gun (or bow) breaks, your 42 blade leatherman’s tool will not have a tool that fixes it.
6. When you take it go get it fixed, the repairman will say “In my 30 years I have never seen this happen.”
7. In bow season the deer will be in muzzleloader range. In muzzleloader season the deer will be in gun range. In gun season, the deer will be no where to be found.
8. If you can shoot a doe you will only see does with fawns.
9. If you can only shoot a buck, you will be overrun with does.
10. Deer calls never work. However, the best way to call a deer call is to take a leak.
11. Anyone who claims to have success grunting and rattling is lying.
12. If you see the buck of a lifetime walking down a path, you will only have a lefthanded shot (if you are righthanded and vice versa).
13. If you see the buck of a lifetime and you are bow hunting, the arrow will fall off the rest when you draw.
14. If you hunt a road where deer always cross, they will only cross when you are looking in the other direction.
15. If the outfitter has a success rate of 100%, it will be lower when you leave.
16. Animals shrink if you shoot them.
17. If you only shoot deer 8 points or better, you will only see six pointers and spikes.
18. Deer only look up if you are in a tree stand.
19. A turkey always struts one foot past the exact distance that number 6 shot can travel.
20. Camo is about as effective as a deer with a sofa painted on its side can hide in your living room.
21. Hunting clothing billed as no-scents makes no sense.
22. Buck lures only to attract hunters to buy them.
23. The only hunters who swear by grunting and rattling for bucks are the ones who sell them.
24. Primos calls if they work at all must only work on Mississippi deer and turkeys.
25. If you decide to leave your stand at noon, the deer will walk by at 12:01.
26. The only purpose of scouting before the season is to find out where the deer were.
27. A person who looks down their nose and sneers “You kill bambi!” isn’t worth knowing.
28. If you go on a hunting trip with a group, expect to be the only one who doesn’t kill anything.
29. If you are hunting your own land without seeing anything all day and suddenly you hear something coming down a path, it will be your dog.
30. No woman is worth your time unless she thinks you look cute in camo.
31. Do you have more success stalking or still hunting? Neither.
32. Is the best time to hunt early, midday or late? None of the above.
33. Deer will always walk down the path you are not hunting.
34. The only camo that works is absence.
35. Anyone who tells you that a deer smells better than a person is obviously European.
36. Anyone who asks you why do you own so many different caliber rifles is obviously stupid because it doesn’t make sense to own ten rifles of the same caliber.
37. Since camo wearers look like trees and grass, I guess this makes them environmentalists.
38. Most muzzleloaders were designed to hangfire only when a big deer shows up.
39. That Al Gore rather than the inventor of the Loggy Bayou climbing stand was awarded a Nobel prize is a travesty.
40. My favorite t-shirt is from Cabela’s and says “Conservation through incompetence.”
41. If God didn’t want you to kill deer he wouldn’t have invented the pickup truck.
42. If God didn’t want you to hunt in the cold rain, he wouldn’t have invented GoreTex.
43. If Al Gore got the Nobel prize for inventing GoreTex, then I guess I am ok with it.
44. Since I have never seen a woman who looks like a Victoria Secret’s model, I presume that all about those women are fakes, the product of many plastic surgeries. Similarly, videos that show bucks grunted and rattled in are fake.
45. Those who can smoke in a tree stand and deer will walk by even though the wind is wrong and seem to kill big deer every time are the chosen few of which I am not one.
46. A person who claims not to like venison has never eaten my cooking.
47. Jerky is not a food since it cannot be broken down by saliva and chewing. It must be swallowed whole.
48. That jerky is not a food was proven when after I tried to eat it, I gave it to my dogs – who also refused to eat it.
49. Just like when I fish I only catch small fish (I’m a small fish specialist), I only see immature deer (which I let walk).
50. Anyone who says that if you kill a trophy animal every time you hunt then it would not be fun is a fool.
51. The hunter the outfitter describes as being “the luckiest hunter I have ever seen” will always be a person in camp. That person will not be you.
52. Recurve bowhunters are snobs and are hunting’s equivalents of fly fishermen.
53. The longest week I ever spent in my life was in a camp in Alberta hunting for bear and all the other hunters shot recurves.
54. There are 6 things that every bow hunter must do in order to shoot accurately. When a trophy deer approaches you will do five of them.
55. If you believe that nonsense about buying all that expensive no scents gear so you can “Forget the Wind – Just Hunt”, let someone release your dogs one hour after you go in the woods.
56. Game cameras tell you where to hunt at 2:03 in the morning.
57. The one hour before sunup is the longest time of the hunt – much longer than the 5 hours or so that follow.
58. Nothing is more satisfying than being able to furnish your own food.
59. Sure you can kill just as many deer sitting at your kitchen table as you usually do in the woods, but coming home even empty handed to your dogs makes it all worthwhile.

So Where is Buckwheat?

Back in Africa after four years I was struck by seeing only two African men with the Buckwheat style hairdos and none with the earrings affected by our black American men (and boys). Not one in Johannesburg, Polokwane or Alldays. Now the women’s hairstyles range from weaves to intricate braids to jerri-curls to straight to buzzcuts to shaved. I even complimented the customs agent about her hair. It would have made all the women at home envious with the skill it took to fashion. But the men? It’s all close to the scalp. There are relatively few shaved heads and virtually no big Afros either. I would have thought that given the adoption of most things American that I would see tattoos, buckwheat dos and earrings. But no, none of the above. I’ve always wondered if it is difficult to be manly with earrings? I have a theory: since 70 percent of all black kids are born to unwed mothers, it is only natural that the boys would want to identify with and look like their role models – their mothers. Hence, the girly look that is so prevalent among black males. Of course the only reason the men look like they do is because the women think its attractive. So why do women want to be with men that look so feminine? It says something about black women that is interesting. The Wall Street Journal some time ago reported a study that showed that women from developed rich countries preferred men who looked feminine while women in less developed poorer countries preferred more masculine looking men. The Journal postulated that this had something to do with protection and hunting and gathering which still had some importance in poorer countries. So that many black women in America seem to be attracted to girly men (in Schwarzenegger’s words) should come as no surprise. They are like their white sisters who also have a preference for more feminine men (metrosexuals?). The only difference is that whereas there is a growing affinity for earrings among young white males and many of those affect long hair, bouffant hair has yet to take hold.

Avatar

Avatar: n., means “Good visuals but bad movie”
I don’t go to movies. I have been in Knoxville for 24 years and have been dragged into the theatre to see Lord of the Rings, Star Wars, and Saving Private Ryan. I guess once every decade is about right for me. The reason is that I won’t buy what Hollywood is selling. Why give my money to support people with whose philosophy I disagree with, whose values I deplore and whose message is against my fundamental beliefs? Have you seen a movie trailer on TV that made you want to see the movie? I haven’t. All the trailers either have someone running around shooting people or some poor soul screaming. I told my students “it must be awful being in a generation where the main attribute to be an actor is the ability to scream.” On my trip to Africa, after listening to the ipod and working the NY Times Sunday puzzle (the only reason for that newspaper’s existence), I watched Avatar. It’s a terrible movie. Although it is an action movie there is virtually no blood or guts. Only Sigourney Weaver’s foul mouth keeps it from being acceptable for young kids. I know people have raved about its visuals but has anyone you know actually talked about the movie itself? The plot is infantile obviously written by some Birkenstock shod greenie weenie who hates capitalism and wants to return to nature. It is the typical Hollywood tripe about the evil corporation trying to rip out the hearts of an idyllic bucolic one-with-nature lovely blue very tall humanoids with long tails by stealing some precious metal underneath the mother tree. I kid you not. From the first scene you know its going to be hero meets girl goes nature abandons evil kin fights own kind to help the otherwise helpless souls defeat technology gets the girl and lives happily ever after in the mother tree. There were absolutely no surprises in the plot line. Why does every Hollywood story when it features a corporation, must feature an evil one? Do you know of an evil corporation? Yeah, I know: Walmart – if you are a hippie- back- to- the- family- store- with- high- prices -and -lousy –selection-where everyone makes subsistence wages type. Well that is apparently the only type of corporation that Hollywood knows because I looked at the info on the other movies on the plane and there were five others featuring evil corporations. How about a movie on the evil propaganda machine that lies to the people so it can manipulate opinions and turn gullible children into mind numbed robots? How about a Hollywood movie about Hollywood?

Back to Africa

I have come back to South Africa for the third time in 10 years. I was asked if I were coming to the World Cup. Hardly, I am here to hunt. I want a zebra and a gemsbuck. The PH (professional hunter) had me take a warthog last time that had a broken tusk. This time was different as I took a bushpig that the PH insisted was a true trophy and got the zebra and gemsbuck as well. I like South Africa. It has its problems but it is trying really hard to work as a nation. It has 11 official languages and where I am in the Northern Province of Limpopo, it seems that most people speak Afrikaans, Northern Lesotho and English. The products say “Made in South Africa” and it looks like a developed country to me. The agriculture is impressive. They can feed themselves. The potatoes are the best I’ve eaten – sorry Idaho.. One of the hunters just got back from hunting cape buffalo in Mozambique and says “now that’s a primitive place.” He got hit up for bribes everywhere he turned and would have had to pay more if it had not been for his PH who had told him what to expect.
Before I left people asked me if I was going to be living in the bush in a tent roughing it. I don’t think you can call a fairly new brick and stone duplex, with laundry done everyday, three meals, all you want to eat and drink, “roughing it”. However, the accommodations here and at the bed and breakfast the first night in Johannesburg lack heat. I have spent three of the coldest nights of my life on this trip. I have slept with socks and gloves on as well as PJ bottoms and my Under Armour tops and was still cold. Next time I will bring a space heater.
What has been interesting is being quiet and listening to what others have to say about America while at the bed and breakfast. A doctor from Nigeria who had practiced in the states for the past twenty years and who was going to hunt elephant in Mozambique said that America was a fading state. It was being crushed under the burden of its debt. Its medical system was broke and too expensive. It prescribed all those unnecessary tests not because of the fear of being sued but because it enriched the doctors and the labs (which the docs either owned or got a kickback from). He said the system need fixing but that Obamacare was not the solution because it could not contain costs. He predicted that the American medical system would collapse and be taken over by the Indians. Well they have provided an alternative to European healthcare so why not American as well? Another person at the B&B said that South Africa should not align itself with America. He sounded strangely like Thomas P.M. Barrett when he said alliances should be made with countries like Brazil and India not fading ones like the US and the EU. I said “what about China?” He (and the doctor agreed) said that China was too closely tied to America. Anyway, China was having enough problems with trying to reconcile its dismal human rights record with the demands of its surging middleclass. He thought that China would too eventually collapse and would be split into several countries. What was interesting was that both of these people were capitalists saying that only capitalism had the productive power to lift people out of poverty. Yet they were unabashed liberals socially – your basic Joe Biden spread the wealth types. I needed more time with them than just that one night. I need to ask them how social redistribution could keep from dampening the incentives of the productive as well as the unproductive. This has always been the downfall of socialism – and always will be. As to the rest of Africa, the doctor said that Mugabe was a blessing. By transforming a vibrant Rhodesia into the hell that is Zimbabwe, he set an example for what not to do for the rest of the continent. He thought that South Africa and Ghana were the continent’s best hope with Botswana and his Nigeria a possibility if somehow Nigeria would end all the government corruption. Botswana was a possibility simply because its people are industrious and are one tribe and not split by all the tribal strife engendered by the Brits when they drew up the boundaries so as to pit the tribes against each other rather than their colonial rulers. We will see. I remain optimistic about America’s future. I am hopeful that this dalliance with Obama will lessen our appetite for socialism for a while.

Financial "Reform"

Now that Olympia Snowe has joined Susan Collins and Scott Brown, it looks like the financial "reform" bill will pass the Senate. Dear Sen. Snowe opined that the bill "wasn't perfect" but she did not want to see another financial collapse happen. Excuse me? Has she read the bill? It says nothing about the causes of the financial collapse and offers no reforms that are remotely relevant. But I have gone down that road before. Consider this: the bill has a provision in it that requires originators of mortgages to keep 5% of them in their own portfolios. Supposedly this will lessen risk since the originators cannot sell it to a bunch of dupes who have no idea about the quality of the loans. Well in the real world, the market prices the loans based on historical defaults - which is why they all were in trouble when the default rates exceed what was anticipated. However, the buyers have always tracked defaults to see if originators were not doing their jobs. There are early put back clauses in all the contracts so if a loan defaults within a set number of days, it is returned to the originator. Also buyers who have loans default often sue the originator for violating the reps and warranties that come with each deal. Lastly, the buyers will either stop buying from originators with high default rate or will price their loans accordingly. Holding back 5% means that the buyers will assume - unless assured otherwise - that the originator will retain the best loans and sell the rest. This will result in lower prices being offered for loans unless the originator demonstrates that the loans are randomly chosen for the portfolio. And one last item: New Century Financial, the leading originator of subprime mortgages was organized as an REIT which meant it was required by law to hold a certain percentage of its loans in its own portfolio. Has anyone used New Century as an example of how originators will underwrite less risky loans if they have to hold them? Quite to the contrary. New Century was the press' favorite whipping boy during the implosion of the subprime market. So this one little part of the financial "reform" bill will result in lower prices paid for whole mortgages and for packaged mortgages, will do nothing to lessen risk-taking in strong markets and will do nothing to prevent the bursting of the next asset bubble.

Our anti-business president

I have often commented on the president's ignorance relating to business. He seems to think profits is a four-letter word and sneers every time he utters it. Now the sneering part may just be my imagination but I do not think so. As I have written before, anyone with a modicum of sense can tell you how to get out of this recession - and its not increase taxes, increase government spending, increase regulatory burdens, increase uncertainty, increase labor costs, increase business costs and yet the administration has done all of these and more. This is why some observers say that the destruction of American business, the blunting of American initiative, the policies that push American businesses off shore are all deliberate on the part of the Administration. Yet this makes no sense at all to me because these policies virtually guarantee that the democrats will lose control of the congress and that Obama will be a one term president. I know they all say you cannot beat nothing with nothing but that was disproven in this last election where in many districts the incumbent lost strictly because the incumbent was a republican and McCain lost because he was a woefully inferior candidate than Obama. However, just in case you want to see what this administration has done that is clearly antibusiness in taxes, regulatory "reform", trade, labor, energy, the environment, health care, education and immigration (whew! what's left?) then go read the Business Roundtable's "Policy Burdens Inhibiting Economic Growth" (http://www.businessroundtable.org/news/business_roundtable_letter_honorable_peter_r_orszag_policy_burdens_inhibiting_economic_growth). Its all laid out there. Of course this will have no impact on changing the direction of the administration simply because the president is an ideologue. He is pursuing those policies that he is convinced are right and no evidence to the contrary will change his mind.

Who Dat?

The Senate is having hearings on Elena Kagan for a seat on the Supreme Court. She has been prominent in the news and the topic of discussion on all the talk shows just like the previous nominee Sonia Sotomayor. There was a poll about whether Americans could identify the justices of the Supreme Court. Hardly anyone could. However, more named Clarence Thomas than any other justice. So here is a test. Who are Peter Diamond, Sarah Raskin, and Janet Yellen? They too have been nominated by Obama and will have hearings before the Senate. They are in some ways just as important and maybe more important that Kagan and Sotomayor but hardly a word has been written on their confirmation hearings. No talk show host has been ranting and railing about them. No lobbying group has organized a campaign against them. The senate has not threatened a filibuster. Talk about being under the radar! So who are they? They are nominees to the Federal Reserve's Board of Governors!

So what is that in your glass?

Light beer sales are down. Miller Lite is off 7.5% and Bud Light is off 5.3% this year. I thought beer was recession proof? I know that the American beer consuming public has not suddenly discovered taste. "Light" beer was invented to get college coeds to drink beer. To make it acceptable to college males, Miller ran adds of ex-jocks arguing whether it was "less filling" or whether it "tastes great". If truth be told, it was neither. When I met my beloved Connie fifteen years ago, she said with horror "You don't like wine? You drink beer?" I thought that was the end of a promising relationship. What cultured person didn't like bordeaux or chardonnay and preferred beer? Obvious I had inferior genes. Then she tried porter (I drink mainly porters and stouts and an occasional IPA) and said "That's beer?" Then after her first IPA she was hooked. You know after I first tasted light beer I sent it to the lab for analysis. The report said "Dr Black, We are afraid your horse has diabetes."

Only one piece of toliet paper please!

After classes ended the campus was overrun with hundreds of young kids - something called Destination Knoxville. I don't know what they were being taught but one day when I went into the student union, there were the kids milling around. Most were dressed in lime green t-shirts while others were in costumes looking like trees, the sun and flowers. One was yelling "I can save the rain forest!" Oh boy - indoctrination. I doubt very seriously if they were given a balanced view of the environment. But of course I doubt if their teachers know anything about science or even the scientific method. As a matter of fact, one of my pet peeves is the existence of colleges of education within the universities. Unless things have changed, traditionally education majors are the poorest academic students at the university by any quantitative measure. Do you realize that after I retire, if I wanted to go to some inner city high school and teach economics, I would be unqualified? That's because I have never had a class in education and have not gotten the proper certification to teach in the public schools. My feeling has always been that education should not be an undergraduate major. It should be only for graduate education. If you want to teach math, then you should be a math major as an undergraduate. If you want to teach economics, you should be an economics major. Surely you can't expect someone who could not get a degree in math to teach math to our kids, could you? Now don't get me wrong, for a number of years I have been asked to guest lecture in a doctoral seminar in education. I have always been impressed by the quality of the students. However, I have been just as unimpressed by the quality of the majority of the undergraduate education majors. So for that kid who said that he could save the rain forest? No he can't nor can his teachers. Yet neither have a clue about the environment and the impact of humans on it.

Are the left Bosnians?

To celebrate my 50th and 60th birthdays I took my ST-1100 and did a 4 corners ride. You leave home and go to the southernmost city in Florida (Key West) to the southernmost city in California (San Ysidro) to the northernmost city in Washington (Blaine) to the northernmost city in Maine (Madawaska) and go home. Not only are you struck by the beauty of the country and just how massive it is, you are also struck by the differences in the people. The first thing you notice is that at every stop in the south and the southwest, someone would ask you where were you from and where you were going. The second stop for gas was in Enoree, SC. At the gas station, a man asked me “long trip or short trip”? I said “long trip” and told him about the 4 corners. He went inside to pay and when he came out he said “be safe”. When I went inside the woman behind the counter said “You are going around the country?” I told her yes. She said “it must be expensive living in all those hotels”. I said that most of the time I would stay with friends. She said “You mean you know people all over the country?" She shook her head and said “I don’t know anyone outside of Enoree.” When I rode off, I looked back and she had her face pressed up against the window. However, from California through the northwest, upper midwest and Canada no one even spoke to me. I was expecting the cold shoulder from those in Maine but they were as open and friendly as southerners. When I got back someone asked what was my lasting impression of the trip. After thinking about all the different people, I wondered why we are not Bosnia? What binds us Americans together? We are so different. I truly felt like an alien after leaving Texas, into California and through New England (but not including Maine) and New York. The upper far west was weird. Imagine speaking to people and being ignored. Imagine not being served at a restaurant in South Dakota (was it because of my color or because they didn’t like motorcyclists?). The only thing that we obviously have in common is our nationality. Why is that enough? Or is it enough? During the presidential campaign there was a guest column in JazzTimes that linked jazz to liberal causes and listed the left's favorite heroes - murderers all (Che, Mao and the like). The author pleaded for the election of Obama because he said it would heal all of the divisions created by George Bush. I replied and said that I bet him that the election of Obama would cause greater divisions than had existed during Bush. It would be because the divisions he felt were only felt by the far left fringe while an Obama administration would alienate not only the far right fringe but everyday mainstream Americans. I won the bet but he has yet to pay (typical of his ilk). My worry is that Obama is causing such a rift that we may be in danger of becoming Bosnia. I can envision the less liberal states resisting the additional federal mandates to support socialized medicine, the destructive cap and trade legislation, card check, and all the rest of the Obama agenda. They realize that they are simply subsidizing New York and California. The suit of the AGs against the feds over healthcare may only be the beginning. There is even serious talk of succession by those who are not loons. I am starting to conclude that whatever it is that has linked us together despite our differences is now being threatened. It is not a good feeling. Hopefully, we will once again be united in what unites us (freedom, individual liberty, free markets, the profit motive, individual responsibility) and keep Bosnia at bay.

A Revelation!

Sometimes you get a revelation. The heavens open up, the angels sing and you now know the truth. I have always wondered why the Obama Administration is full of smart people giving bad advice. This seems true in every area - now highlighted with the missteps on the Gulf oil spill - but is especially true regarding the economy. Few would doubt the brain power of Larry Summers, Christina Romer and their team. Yet they appear to be ignorant of basic economic principles and especially micro economics. It is if they have never heard of Adam Smith or if they have do not believe in him or economic principles. Then I heard an interview with a "democratic strategist" who said that we (meaning the administration) need to get the budget under control. There was way too much spending. But now was the wrong time to decrease spending. What was needed was to keep spending and even increase it while we were in the recession. I went Hallelujah! That explains it! You see I - and those like me - believe that government spending makes matters worse. The other side believes that it makes things better - or at least keeps things from getting worse. The other side does not believe in "crowding out". That is where government spending substitutes for private spending rather than augments it. When the government goes into the markets to borrow money in order to increase spending, it drives out private investment and borrowing. This reduces capital expenditures and translates into slower economic growth. This crowding out is highlighted by a recent study by Harvard economists who found that earmarks increased government spending but reduce sales, payrolls and capital expenditures by local companies. This means that government spending substitutes rather an complements local private expenditures. I have pointed out before how stimulus packages have failed to stimulate, how the trillion dollar increase in government spending has prolonged the recession, how government inhibits economic growth through disincentives and increases uncertainties. However, these are facts. Getting the economists on the other side to accept facts when it impinges on their faith has proved futile in the past. I doubt seriously if a study even by a bunch from Harvard is likely to change their minds.

More Doozy?

Due to the space limitations imposed on me by the News-Sentinel I was not able to talk about the other odious provisions of the Dodd bill. One is that it will kill angel investors and those companies that depend upon them. As you know, an angel investor is typically a wealthy person or persons who provide funds for business startups or young businesses who are capital-starved. The Dodd bill would require startups wanting funding to register with the SEC and wait for an SEC review that could take up to 120 days. Then any investor must need assets of $2.3 million and an income of $450,000. I was reminded of this provision by the CEO of a successful California firm that I met in Hilo while on vacation. He said in a letter to Sen. Feinstein that if this provision were in effect, he would have never gotten his company off the ground. I am tempted to say that this is consistent with the anti-business attitude of the current party leaders in power but I though that they were champions of the little guy? Other provisions call for the President of the New York Fed to be a political appointee. This is actually nothing new. Some members of congress have been trying to politicize the Fed presidents for years. It was a bad idea when proposed annually by Henry Gonzalez (D-TX) and it remains a bad idea today. Another bad idea is in an amendment welcomed by Sen. Dodd to audit the Fed. As I have written before I am not opposed to an annual audit. What I oppose is the audit being public information. If disclosed at a hearing closed to the public - much like the CIA - then I have no objection. However a public audit would act to again politicize monetary policy. Another bad idea.

One more to go

I am retiring at the end of the next academic year and none too soon. Even though there is no requirement age at UT its time for me to go. I don't like this generation - and yes I told them that and why. The reason has nothing to do with their bad taste in clothes , music, or propensity to mutilate their bodies with assorted piercings and ink. That is nothing new. I can get quotes from Aristotle to John Stuart Mill to my father and it would sound like they all are talking about today's youth. No it is because of something else. I believe that each generation has about the same percentage of people who are really smart, those who are competent, and those who are mediocre. What makes this generation the absolute worse is that they have at their disposal virtually unlimited cheap information and they do not use it. When I was young, I could not ask my parents "why?" We had an encyclopedia britannica and I had to look up the answer and then go discuss it with my parents. When I was a young assistant professor, I had a carel in the library and in it were tons of books. I would read one, then go into the stacks to get another and the process was seemingly endless. It would take months to research a paper. I then had to get the data put on IBM cards, eventually get the output, write it, get it typed in the typing pool and then circulate for comments and then the process would begin again on the revision. I was lucky to get a publication every other year. Now the basic research can be done in a week and a draft can be out in a month. If I had today's technology when I was 25 there would be no reason why I shouldn't have won a nobel prize by now. In my class I gave an assignment on today's yield curve compared with last week's and last month's. The answer I got was right out of the text book and was wrong. That is because the yield curve's steepness made explanations regarding upward sloping curves problematic. I then told the class that the answer could be found on the internet. The next group of answers were also wrong since most of the students went to Wikipedia or stopped at the first hit instead of doing an in-depth search. So the reason I don't like this generation is because it is the first one where the merely competent and the mediocre have the opportunity to be as informed as the smart ones but aren't because they are intellectually lazy and uncurious. What a waste. I can't wait to retire.

Dodd's financial bill is a doozy

From the Knoxville News-Sentinel

Sunday, May 2, 2010

The Dodd bill on financial reform is a doozy.

In the bill's summary it says the failures that led to the financial crisis require bold action. Reading that you think the reason why the financial system teetered - the bursting of the asset bubble in housing - would be attacked in the legislation. But lo and behold, in its almost 2,000 pages there is hardly a mention of housing and Fannie Mae or Freddie Mac.

Indeed, there is nothing in the bill remotely connected with the causes of the financial crisis. Instead, Dodd's financial reform bill is another power grab by this bunch of politicians. It creates a single regulator of consumer protection regulations even though there is no evidence that consumer protection has anything to do with the financial crisis. This new agency will be headed by a single political appointee of the president. All consumer lenders, including those only regulated by the states such as small consumer installment lenders, now would be subject to federal oversight.

The new, powerful regulatory czar would be certain to enact rules that would limit credit granting to poorer households and small businesses. There will be a new agency for "financial stability" with another single politically appointed czar. This czar would have the power to shut down a company that might pose a risk to the financial system.

This unprecedented stunning power would leave all large organizations operating at the sole behest of the shutdown czar. Now how this czar would have any idea of who to shut down escapes me. If this czar existed during the tech bubble, companies like Google and Amazon probably would have been shut down as they grew in excess of their valuations. Heaven help us. Within this new agency will be a $50 billion slush fund paid for by all financial institutions that will allow for the orderly failure of big institutions. In essence, the $50 billion would be used to pay out the creditors of the firm being shut down.

This is moral hazard on steroids and ensures bailouts forever.

There is the new single bank regulator that rolls the supervisory functions of the Fed, the FDIC, the Comptroller of the Currency and the Office of Thrift Supervision (S&Ls) into one agency headed again by a single political appointee - do you see a pattern here? There is regulation of hedge funds by the SEC. Well at least it did not create a hedge fund czar. Over-the-counter derivatives are to be regulated by the SEC. Firms that sell instruments that are packaged and sold (securitization) must retain a portion to bear some of the risk usually passed forward into the market.

Such a provision is probably unnecessary since the market will now enforce on the originator the early put back provisions of early defaults and the representations and warranties in each contract. It creates an office of insurance within the Treasury department and an office of credit ratings at the SEC. Now I am certain that Dodd's bill, which is aiming at everything moving in the financial market except the ones most intimately involved in the financial crisis, has nothing to do with the fact the major recipients of lobbying funds from Fannie Mae and Freddie Mac were Sen. Dodd and then Sen. Barack Obama.

But then of course, I am probably naive.

Dr. Harold Black is the James F. Smith Jr. Professor of Finance at the University of Tennessee. He can be reached at hblack@utk.edu.
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Is this what they call an incongruous juxtaposition of inconsistencies?

My 91 year old mother is unique. She is probably the only person in the world who likes both George Bush and Barack Obama. She likes George Bush because she was a lifelong Republican. She likes Barack Obama because he is black. I said she was a lifelong Republican but now she is neither a Republican nor a Democrat. She left the Republican party despite harboring years of resentment for the party accepting racist democrats with open arms. As she puts it Strom Thurman, Jesse Helms and all their ilk polluted her party. Of course other racists democrats remained in that party, issued false mea culpas like George Wallace and promptly got re-elected with the black vote.
However, that was 40 years ago and to ascribe racism to the Republican party and especially to the Tea party is a sign of desperation on the part of the democrats. As I told her, “who cares what they say or write? They are only saying it to themselves and writing it for themselves. People who know the truth know they are lying.”
The reason my mother left the Republican party is because of Barack Obama. She told me that this was her only opportunity to see a black president so she was going to support him. Now that he is president she supports him fully. I told her that if Obama was white, she would be railing against all of his policies. She told me recently, like she has in the past, that her grandfather preached self-reliance and despised handouts and those who took them rather than working to get what they needed. That attitude was my grandfather’s and my parents. Now my mother supports those whose entire political agenda is predicated on expropriating income from other’s hard work and handing it out to buy votes. Somehow she sees no problem if Obama is doing the handing out but if it were Bill Clinton, well that is different.
It has been enlightening for me to see. There is no use for me trying to discuss this with her. She has not paid any attention to my opinions for 65 years so there is no reason for her to start now. She can read something I said and then will perhaps accept it as fact because someone else corroborated it. She read me a piece from an anti-tea party Obama apologist asserting that tea partiers were racist as if it were truth. Although it was completely wrong, she would not entertain contradiction – especially since it was coming from me. But we know that cries of racism are the last refuge of desperation.
She is also addicted to talk radio. She listens to everyone from the left to the right. She says that the conservative hosts must send each other emails everyday on what to talk about – since they all talk about the same thing and have no difference of opinion about the subject at hand. She listens to people that I cannot abide. I keep saying to her, if you hate them so then why listen to them? Yet she does. What she really hates are all the disparaging comments made toward Obama. Calling him “incompetent”, “unqualified”, “inept”, “naïve” , “gangster politics” or a “thug” to her are disrespectful of the man and the office and are racist. Ironically, she felt the same way about the left’s comments on George Bush – but of course she did not consider them as racist because they were being uttered by white people against a white person.
And that is the crux of the matter. My mother basically considers any criticism of Obama as racist. She considers the Tea party as racist too. How she is able to reconcile these views with the fact that I am one of Obama’s severest critics and have keynoted two Tea party rallies is a mystery. It does not matter if I point out that the dramatic increase in spending will impoverish her great grandchildren, it does not matter that the projected tax increases of personal taxes, corporate taxes and capital gains taxes plus the dividend tax hike and the increased marriage tax will deplete initiative, drive investment and capital out of the country, and give us permanent double digit unemployment. It does not matter that 50 percent of all wage earners now pay no federal income taxes yet can vote to expropriate the earnings of others. It does not matter that democrats vehemently oppose vouchers that are the only hope for millions of black kids held captive to a nonproductive public education system. It does not matter that Barack Obama is silent on the devastation of the black community arising from 70 percent (and rising) of black kids being born out of wedlock. It does not matter that health care “reform” is a power grab by the government that will deliver poorer quality yet more expensive healthcare with rationing imposed by some government bureaucrat. It doesn’t matter that cap and trade will dramatically raise the cost of energy, increase the power of government which chooses winners and losers, without appreciably affecting the environment. There is much more to oppose and all of this is sanctioned by Barack Obama. Yet if we oppose it, we oppose him. And because he happens to be black, my mother will call us racist. So be it.