Americans

If you are in a foreign country and meet an American, pretty much any American, you are likely to feel a sense of brotherhood.

The reason is that as Americans you have much more in common than you do with the people in a foreign country.

Of course in some cases this might not be true, but in general, especially for Americans that don't spend a lot of time in other countries, the sense of home permeates other Americans.

We share so much more than separates us that it becomes obvious in a place where they are, well, in-American.

We are also perceived that way in general by most foreigners, similar to how we tend to lump foreigners of specific nationalities together in our minds.

Growing up in a country imbues you with a set of values unique to that culture.

Consider Canada, which generally shares a lot with us both based on its origins and cultural background.

They still seem alien to our way of thinking, if less so than say a Russian.

Its obviously not insurmountable differences but a person from Ohio will generally have more in common with an American from South Carolina than with Canadians, even though Canada is closer to Ohio than many states.

To some extent you would expect these national differences to blur a bit with the internet and globalization, but if it is going to happen it is going pretty slowly.

Americans are in many way one big family and while families sometimes fight, they tend to band together when it matters.

Lets not forget who we are.

Dueling Banjos?

We saw something of dueling events yesterday.

The Washington press corps held its annual self congratulatory dinner.

The dontard, unable to tolerate criticism, even as satire, gathered up a few thousand people and had his own rally.

I can't decide which one actually was more satirical.

The press corps can have all the dinners it wants, but just because there are a lot of them covering the Washington area, doesn't make them particularly important or anyone we should care about.

They may even be fairly clever and the jokes may or may not be funny, but the point of it is really a self congratulatory night out which I think they get reimbursed for, pretty sweet!

The other event was funny it its own right as we saw the Orange Julius of presidents talk about what a great job he is doing.

The crowd cheered as he listed how he is draining the swamp and fighting that very press corps which was celebrating back in Washington.

I could be wrong, but I'm willing to bet that a lot of the people were there because, well it was free, it was a bit of a freak show and they might get on TV if they were outrageous or ostentatious enough.

Some might be his true believers, but its pretty clear that most Americans are seeing his true colors by now, even those who think he is for some reason the best alternative.

Of course the chants that rang out at times were pretty clearly prompted, but that is the way things are done now-a-days, so that's simply part of the show.

I guess the reporters who had to cover that rally missed out on their free dinner back in DC.

Ironic.

Interest Rates

We see some increase in interest rates and it gave the stock market a bit of a shock.  The rate on the US 10 year creeped over 3% but it has gone back below that threshold now.

These are still pretty low rates but there is a ripple effect of rate increases.

In general it makes money more expensive which makes debt more expensive and effectively has a negative impact on the money supply.

While the US Mint does in fact print currency, that is just a representation of the money in use.

The supply of money is determined by a number of fairly complex factors which simplistically can be equated to the value of all assets backed by US dollars.

Not all this money is readily available (liquid) but if I have a house (asset) with $50,000 of equity in it, I effectively have that much money to leverage.

Where it gets complex is in how that leverage works, and if credit gets more expensive it makes assets less valuable reducing equity and leverage reducing the money supply.

Now, it is in many ways more complex than that, but in the financial crises we saw credit become unavailable, equity crash, money virtually disappear and everyone felt the pain.

A firm can be valued in the billions one day and have effectively no value the next if they have high debt and declare bankruptcy.

This is why changes in interest rates that seem almost insignificant can have dramatic impacts.

Of course in rising interest environments, you might want to deleverage and put your money into instruments that benefit.

You might.

Respnsibility

A lot of times we `act like someone else is supposed to solve our problems.

Unfortunately we need to take control more often than not.

Society and governments have a role to play and of course when we are children our parents have responsibilities, but as we mature the burden is really ours.

Too many seem to shirk responsibility and blame someone else for their problems.

If you didn't study hard in school, you have no one to blame but yourself.

If you didn't save for retirement, even when money was tight, well its your own fault.

If you bought things you couldn't really afford because you really wanted them, it was your own fault.

Its not like you weren't warned or told.

Our society has become one where personal responsibility is becoming a lost concept.

Everything is because we have an addiction, or some mental flaw that prevents us from doing what we should.

There is acceptable behavior and actions and unacceptable ones, and we are responsible to do the former.

Most of us are able to spot flaws in other people but ignore our own.

Take responsibility and things will get better.

We used to blame the devil for temptation, now we don't blame anyone.

Not sure that's progress.

France

We seem to be developing a new relationship with the French, who not so long ago we considered barely friends.

Americans seem to have a somewhat distorted view of the French and admittedly, in this century they haven't been a truly dominant power.

Still they are a major economy and one of the leaders of the EU, especially with the departure of the UK.

Its a bit odd though that this president, considering his policies and followers would cozy up the French president.

This became sort of apparent when the speech he gave to congress pretty much was promoting policies this administration has opposed.

Still the thing with out dontard is that policy is secondary to him.

The fact that a foreign leader was willing to give him so much good press will go a long way with him.

It remains to be seen if this has much impact on the policies related to the Iranian Nuclear Deal or the trade agreements.

Still it might and maybe it will lead to a different policy related to the climate agreement which we withdrew from.

Probably not but making a vain man look good has a history of success.

Especially in France.

Dreamers

Right now the Dreamers are in a state of limbo, seemingly forgotten about, at least in the media.

Of course the people live with the uncertainty and fears of not knowing if they can plan a future or if they have to face possible deportation to a place they probably don't remember and certainly don't know.

Imagine grabbing a teenage American and sending him to live in a foreign country, possibly with relatives, but no real roots.

Of course they would probably figure out something, we are as a species pretty adaptable, but it would be a cruel and inhumane thing to do.

There was a court decision that challenged the order abolishing the DACA program and said it was unconstitutional because it was vague.

Its not final and the thing about rulings like that is that they can be altered by reissuing the executive order with more rationale.

Still, we can't forget about the Dreamers or in fact about any of the undocumented people who are living in our country.

They aren't citizens but they still people trying to live their lives, support their families and be secure and happy.

I saw some interviews of voters in Arizona who speak as if the immigrants are stealing American jobs.

First, who are these unemployed Americans?

Second, do they even want the jobs performed by the undocumented immigrants?

Its a campaign message that doesn't stand up to scrutiny, but it apparently resonates with certain Americans who are either heartless or out of touch with economic reality.

Sad really.

Jobs?

In the bible is the story of Joseph who interpreted Pharaoh's dream and advised him to store up grain during the 7 years of plenty to be used during the 7 years of famine.

It worked.

Its pretty sound economics.

Unfortunately it isn't followed frequently by many individuals and even fewer Governments.

The economy started to recover after the financial crisis and we saw the deficit shrink for a couple of years.

 We then elected the bankruptcy king who wants to spend more than we have while reducing income via tax cuts.

It sort of explains his numerous bankruptcies.

Now for most of my life the Democrats have been described as the tax and spend party, whether warranted or not.

The Republicans are now the don't tax but spend party apparently.

Its a degree of fiscal irresponsibility that is hard to fathom.

One of the things they pretend to believe is that big corporations or small businesses will create jobs if they get to keep more of the money they make.

That's not how the economy works.  You create jobs if the job is going to create more value than it costs you.  Just getting a windfall might allow you to do some projects that might create some jobs, but you aren't going to create jobs just because you have some extra cash.

Now you could create jobs with infrastructure projects and because the Government cut taxes they don't have the money to pay for them.  They are talking about public private partnerships, which have never worked tremendously well.

Its hard for a business owner to justify spending significant amounts of money on projects that benefit his competitors as much or more than they do his company.  Its poor money management.

Of course jobs are being created in areas where there are customers, like health care and some other service industries, but those were being created anyways.

Jobs would have been created if the tax cuts went to consumers who would have spent it creating demand.

We didn't do that.