The Redneck Lifestyle

The Redneck Lifestyle
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Thursday, October 30, 2008

Evagrius of Pontus

"One who worship in spirit and in truth no longer honors the Creator because of his works but praises him because of himself."

Wednesday, October 15, 2008

Paul B. Farrell

17 reasons America needs a recession

Think positive, this 'slow motion train wreck' is good for the U.S.

By Paul B. Farrell, MarketWatch
Last update: 6:53 p.m. EST Nov. 19, 2007

ARROYO GRANDE, Calif. (MarketWatch) -- Yes, America needs a recession. Bernanke and Paulson won't admit it. And investors hate them. We're all trapped in outdated 1990s wishful thinking about a "new economy" and "perpetual growth."

But the truth is, not only is a recession coming, America needs a recession. So think positive: Let's focus on 17 benefits from this recession.

To begin with, recession may be an understatement. Jeremy Grantham's GMO firm manages $150 billion. In his midyear report before the credit crisis hit he predicted: "In 5 years I expect that at least one major 'bank' (broadly defined) will have failed and that up to half the hedge funds and a substantial percentage of the private-equity firms in existence today will have simply ceased to exist."

He was "watching a very slow motion train wreck." By October, it was accelerating: "Train hits end of track at full speed."

Also back in August, The Economist took a hard look at the then emerging subprime/credit crisis: "The policy dilemma facing the Fed may not be a choice of recession or no recession. It may be between a mild recession now, and a nastier one later."

However, the publication did admit that "even if a recession were in America's long-term economic interest, it would be political suicide" for Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson to suggest it.

Then The Economist posed the big question: Yes, "central banks must stop recessions from turning into deep depressions. But it may be wrong to prevent them altogether."

Wrong to prevent a recession? Why? Because recessions are a natural and necessary part of the business cycle. Remember legendary economist Joseph Schumpeter, champion of innovation and entrepreneurship?

Economists love Schumpeter's "creative destruction:" Obsolete firms get destroyed and capital released, making way for new technologies, new businesses, like Google. And yet, nobody's willing to apply Schumpeter's theory to the entire economy ... and admit recessions are a natural part of the business cycle.

Instead, everyone persists in the childlike fairy tale that "all growth is good" and "all recessions are bad," a bad hangover of the '90s "new economy" ideology. So for the folks at the Fed, Treasury and Wall Street, "eternal growth" is still America's mantra.

Unfortunately, the American investors' brain has also developed this blind obsession with "growth-at-all-costs," coupled with a deadly fear of all recessions, as if recessions are a lethal super-bug more powerful than Iran with a bomb.

Our values are distorted: It's OK to be greedy and overshoot the market on the upside -- grab too many assets, take on too much debt, make consumer spending a religion, live beyond our means, ignite hyperinflation along the way. Growth is good, even in excess.

And yet, recessions are a no-no that drives politicians, economists and investors ballistic.
Well, folks, you can block all this from your mind, you can argue that recessions are not a part of Schumpeter's thinking, that they are inconsistent with your political ideology. But the fact is, we let the housing/credit boom become a massive bubble, it popped and a recession is coming. 

So think positive, consider some of the benefits of a recession:

1. Purge the excesses of the housing boom
No, it's not heartless. Not like wartime calculations of "acceptable collateral damage." Yes, The Economist admits "the economic and social costs of recession are painful: unemployment, lower wages and profits, and bankruptcy." But we can't reverse Greenspan's excessive rate cuts that created the housing/credit crisis. It'll be painful for everyone, especially millions of unlucky, mislead homeowners who must bear the brunt of Wall Street's greed and Washington's policy failures.

2. U.S. dollar wake-up call
Reverse the dollar's free fall and revive our global credibility. Warnings from China, France, Iran, Venezuela and supermodel Gisele haven't fazed Washington. Recession will.

3. Write-offs
Expose Wall Street's shadow-banking system. They're playing with $300 trillion in derivatives and still hiding over $100 billion of toxic off-balance sheet asset-backed securities, plus another $300 billion hidden worldwide. A lack of transparency is killing our international credibility. Write it all off, now!

4. Budgeting
Force fiscal restraint back into government. America has been living way beyond its means for years: A recession will cut back revenues at all levels of government and cutbacks will encourage balanced budgeting.

5. Overconfidence
A recession will wake up short-term investors playing the market. In bull markets traders ride the rising tide, gaining false confidence that they're financial geniuses. Downturns bruise egos but encourage rational long-term strategies.

6. Ratings
Rating agencies have massive conflicts of interest; they aren't doing their job. They're supposed to represent the investors, but favor Corporate America, which pays for the reports. Shake them up.

7. China
Trigger an internal recession in China. Make it realize America's not going into debt forever to finance China's domestic growth and military war machine. A recession will also slow recycling their reserves through sovereign funds to our equities.

8. Oil
Force the energy and auto industries to get serious about emission standards and reducing oil dependency.

9. Inflation
Expose the "core inflation" farce Washington uses to sugarcoat reality.

10. Moral hazard
Slow the Fed from cutting interest rates to bail out speculators.

11. War costs
Force Washington to get honest about how it's going to pay for our wars, other than supplemental bills that are worse than Enron-style debt financing.

12. CEO pay
Further expose CEO compensation that's now about five hundred times the salaries of workers, compared with about 40 times a generation ago.

13. Privatization
Stop the privatization of our federal government to no-bid contractors and high-priced mercenary armies fighting our wars.

14. Entitlements
Force Congress to get serious about the coming Social Security/Medicare disaster. With boomers now retiring, this problem can only get worse: A recession now could avoid a depression later.

15. Consumers
Yes, we're all living way beyond our means, piling up excessive credit-card debt, encouraged by government leaders who tell us "deficits don't matter." Recessions will pressure individuals to reduce spending and increase savings.

16. Regulation
Lobbyists have replaced regulation. Extreme theories of unrestrained free trade plus zero regulation just don't work; proven by our credit crisis, hedge funds' nondisclosures, private-equity taxation, rating agencies failures, junk home mortgages, and more. Get real, folks.

17. Sacrifice
"We have not seen a nationwide decline in housing like this since the Great Depression, says Wells Fargo CEO John Stumpf. As individuals and as a nation Americans have always performed best in crises, like the Depression or WWII, times when we're all asked to make sacrifices. Pampering us with interest-rate cuts and tax cuts during the Iraq and Afghan wars may have stimulated the economy temporarily, but they delayed the real damage of the '90s stock bubble while setting the stage for this new subprime/credit crisis.

Wake up, the train wrecked. Time to think positive, find solutions, demand sacrifices.

Tuesday, October 7, 2008

Most Americans still believe in Angels




The Washington Post

Friday, September 19, 2008
Half of Americans Believe in Angels
by Julia Duin

Half of all Americans believe they are protected by guardian angels, one-fifth say they've heard God speak to them, one-quarter say they have witnessed miraculous healings, 16 percent say they've received one and 8 percent say they pray in tongues, according to a survey released Thursday by Baylor University.

The wide-ranging survey of 1,648 adults, who were asked 350 questions on their religious practices last fall, reveals a significant majority who are comfortable with the supernatural.

“Mystical experiences are widespread,” said Rodney Stark, co-director of Baylor University's Institute for Studies of Religion.

“I'd have guessed 15 percent instead of 55,” he added, referring to the 55 percent who claimed angelic protection. “This is the taboo subject in American religion. No one studies it, but there is a lot of it out there.”

The survey, which has a margin of error of four percentage points, also revealed that theological liberals are more apt to believe in the paranormal and the occult - haunted houses, UFOs, communicating with the dead and astrology - than do conservatives. Women (35 percent), blacks (41 percent), those younger than 30 (40 percent), Democrats (40 percent) and singles who are cohabitating (49 percent) were more likely to believe, the survey said.

Baylor researchers also criticized a much-ballyhooed “new atheism” as a barely discernable trend, saying the number of Americans who are atheists has stayed at 4 percent since 1944.

Why? Atheism is a “godless revolution that never happened,” the survey said, adding that irreligion often is not effectively transmitted to children who, when they reach adulthood, often join conservative religious denominations.

Moreover, atheism is hardly taking over the world. Europe does have more atheists than the U.S., the survey said, but no country has more than 7 percent except France, which is at 14 percent of the populace. Farther to the east, Japan is at 12 percent and China is at 14 percent.

Mr. Stark dismissed the popularity of several recent books on atheism, saying they are mostly the products of “angry” people who are largely ignored by theists.

“The religious people don't care about the irreligious people,” Mr. Stark said, “but the irreligious are prickly. I think they're just angry.”

The survey also ranked church attendance at 36 percent of the populace, about eight percentage points lower than similar surveys by pollster George Gallup but more than the low 20th percentile suggested by other polls.

“There was only one decline in church attendance and that was in the late 1960s,” Mr. Stark said, “when the Vatican said it was not a sin to miss Mass. They said Catholics could act like Protestants, and so they did.”

When asked at a press conference whether he was certain that one-third of the American populace is in church every week, he allowed that some of the respondents in the poll might have exaggerated their attendance.

“I'd say 30 percent,” he said, “but it's very high.”

The survey spoke highly of the American megachurch, congregations of more than 1,000 that are often criticized for their impersonal nature. People who attend megachurches are far more conservative in their theology than are attendees of smaller churches, it said.

Their members are also younger, they share their faith more with strangers, and they perform more volunteer work than do members of small churches.

“There are many critics who think the megachurches thrive on people who enjoy dramatic Sunday services with fine music but don't wish to become very 'religious' on a day-to-day basis - that the megachurch appeal is a mile wide and an inch deep,” said “What Americans Really Believe,” a companion book to the survey.

“But it is not true. Those who belong to megachurches display as high a level of personal commitment as do those who attend small congregations.”

Mr. Stark added, “Apparently they are preaching Jesus and that's why they get so big.”

Sunday, October 5, 2008

Preparation is Half the Fun!