Saturday, April 28, 2012

Obama's College Loan Interest Strategy

This past week, Obama, the President, was on on road visiting college campuses as a Presidential candidate. He was trying to relive part of his successful 2008 run to the White House by appealing to the youngest voters.

As strategy would have it, back in 2007, the Pelosi Congress cut the interest rate on student loans down to 3.4%. The political kicker was that in the middle of the 2012 campaign, the rate would double. It would, like most government subsidies, become a "they said / we said" discussion that would appeal to the less-than-informed.

Listening to the President, he made it sound like that if Congress did nothing, on 1 July, all outstanding student loans would go up to the new rate. He did not state that it would be for all new government-backed loans. A politician should never miss an opportunity to mislead his constituency.

The problem with most government programs is that they pick winners and losers, at the taxpayer's expense. They could subsidize hamburgers and drive up the demand for hamburgers. Eventually the hamburger subsidy will end and hamburger joints will go out of business. Same thing with government-back student loans. 3.4%, barely above the 3.1% rate the Treasury is paying on the 30-year bond, is a great deal for the individual student but not for the taxpayer.

The problem with student loans, regardless of the interest rate, is students need to re-pay them. With poor job prospects and most starting incomes at rates that fail to enable normal life, the loan default rate is increasing. With the government being the main lender, it will be the taxpayers that will cover the defaults. It is very similar to the housing debacle.

Obama's rhetoric is just that. The problem is that his policies fail to incentivize a critical mass of entrepreneurs and business risk-takers to move the economy forward. You can't "Huey Long" the federal government, despite his best attempts.

Saturday, April 21, 2012

Babe Ruth: Life, Times and Some Thoughts

Leigh Monteville's The Big Bam is a good read. Published in 2006, one would question, as he does, as why we need another biography on America's most well-know baseball player? As baseball fans, we all like to step by in time and wonder what it would have been like to have lived during that era. Was George Herman "Babe" Ruth really the greatest?

Babe was almost larger than life. Raised in less-than-ideal circumstances, he lacked a real family experience. His uneducated father seems to have earned his living in bars and taverns. Little is known about his mother. He was molded by his years in St. Mary's Industrial School in Baltimore. When he was through with school, his baseball skills were good enough to get him a job as a pro ball player.

A great pitcher for the Red Sox, he loved to hit. Because he could hit so well, he was able to transition away from pitching to hitting. If he would have stayed a pitcher, he probably would have been a Hall of Famer.

His transition to a position player changed baseball forever. From singles hitters, he introduced the long ball. Timing was good because the ball became tighter and could be hit much harder and further. People thrill in things they cannot do and no one could hit a ball higher and further than Babe. That ability brought him fame. And it was the fame that made him a very unlikable person.

His baseball statistics are undeniable. He was one of if not the best hitter of all time. But his off-the-field life was a disaster.

He was an extremely selfish man. He was a terrible husband, twice. He was a terrible father. He was a terrible friend -- he did not really have any. He was a slave to his vices, namely unhealthy food, alcohol, gambling and women. It appears that he had sex with thousands of women, while married. He only signed balls and visited boys because of a prudent PR man.

Of all of the famous baseball players, he would be low on my list of people I'd like to meet.

Tuesday, April 03, 2012

Obama Panicing and Posturing Over Court'sPotential Affordable Care Act Ruling

Only hours after the Supreme Court hearing on the Constitutionality of Obama's and the Congressional Democrat's Affordable Care Act, the Obama re-election team is posturing against a potential Supreme Court invalidation of "his baby."

Obama stated yesterday: "I'm confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress." Unprecedented?

Obviously the Constitutional lawyer has decided that over the past 2oo plus years, the Supreme Court has never invalidated parts or all of countless laws on grounds that they violated the Constitution. Likewise, he seems to have ignored that
all of those laws were passed by a "democratically elected" legislature of some kind, either Congress or in one of the states. And no doubt many of them were passed by "strong" majorities.

As my long-standing Senator Orin Hatch stated:
It must be nice living in a fantasy world where every law you like is constitutional and every Supreme Court decision you don’t is "activist."
The Obama team's reaction is bordering on panic. They will never admit to a law that was rushed through Congress with only hours for the members to read (which they didn't); a law that was and is disliked by the majority; a law that will create a financial nightmare and stifling entitlement; a law that rang unconstitutional from the get-go.

If the Court rules against the Affordable Care Act all or in parts, it will be an anvil around Obama's neck during his re-election bid. Could not happen to a more egotistical human being.