Democracy In Action

Democracy in Action 
By Phil Davis of Phil’s Stock World

The WSJ noted this morning, small business firms (the ones the Republicans claim to protect) want a strong dollar so that American Citizens, who live and work in America – can afford to own a heated home with enough left over to buy some food and, hopefully, even be able to purchase their goods and services.  Big Business wants a weak dollar, so they can sell their goods overseas and use those profits to buy land and capital equipment from struggling American individuals and firms at relatively bargain prices – maybe even in foreclosure!   

(Interesting MONOPOLY: The Koch Bros. Game – Infographic here >)

Who do you think is getting their way?  As Charlie Koch says in his featured Op-Ed piece in the Journal this morning: “Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favours and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors (i.e. Koch Industries) at bay.”  But don’t worry, the Koch Brothers are on the case, spending their Billions to support far-right and Tea Party causes looking to roll back the Progressive causes all the way to where we were before the Great Depression (the first one, not the one their idiocy is likely to bring about next).  Charlie says: 

“Because of our activism, we’ve been vilified by various groups. Despite this criticism, we’re determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.”

So that’s why we’re shorting small business.  The worst part is they are too stupid to know who their enemies are.  Small businesspeople are suffering every bit as much as Middle Class Americans yet they believe they are the same as the Koch Brothers and they look to get Government out of their lives and support Big Business causes, much like Hansel and Gretel moving into the Koch’s gingerbread house – not realising that they are the desert.  

One of the great jokes played on Small Business in America is the Chamber of Commerce, an organisation that claims to represents small business (and takes their money, letting them think they have representation) but is really just another mouthpiece for the top 1% (see “The Scam Chamber“).  The Chamber of Commerce has, in fact, swung so far to the right that responsible corporate citizens like Nike, Apple, Exelon Energy, PG&E quit the Chamber over its extremist positions.  

Small Business is dying in America from lack of representation and, even worse, those that claim to represent them are selling them down the river (when they are not stabbing them in the backs).  In fact, we can create a profitable investing premise buy simply investing in the people who do all the lobbying these days and shorting those who do the least – look how well this idea would have played out tracking 2010 Lobbying Spending by Sector.

See how defence needs to step it up?  Also, you can see why labour has no chance at all of having their voice heard. Consider for a moment that all this money is used to “influence” just 435 Congressmen, 100 Senators, 9 judges and one President in one year!  This matter came to our attention when one of our Conservative Members put up statistics from the National Review that “proved” that unions have plenty of influence in Washington.  In that article in that once-respected magazine, the author says: “Here are the 10 largest donors in U.S. politics as of February 7, according to OpenSecrets.Org:  ActBlue: $51 million,  AT&T: $46 million,  AFSCME: $43 million…”   

Wow, that sounds impressive doesn’t it.  Unless, of course you follow the link and notice that this represents the TOTAL spending of those groups since 1989 – $51M in 21 years vs. THIS CHART’S 2010 SPENDING.

I don’t know when the National Review turned into the National Enquirer but shame on them for misleading Conservatives like that!  Fortunately Kevin Williamson, who wrote this hack piece, is only the Deputy Managing Editor of the National Review and not the Managing Editor – now THAT would be embarrassing!  

Anyway, so where was I?  Oh yes, small businesses are being screwed over and likely to be slammed by the inflation that Big Businesses are pushing for and the Fed, of course, is 100% on the inflationary bandwagon.  As David Fry said yesterday

Last week it was Bullard, Lacker and Kohn throwing the spin around and today it was Dudley with a notable assist from Buffett. And, since it was month-end, headline writers got the green close they wanted with the third month of gains.  Kohn’s comments last week were incoherent overall while Dudley’s TV appearance consisted of misleading BS with comments like, “The Fed is keeping its mandate” and, “It’s unwise to overreact to rising commodity prices.”

Overreact?  I don’t see anyone reacting, other than speculators who are BUYBUYBUYing more and more commodities as the prices rise.  In fact, as of February 22nd, Hedge Funds had taken the largest speculative net long position on oil futures since June 2006, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report.  “Money managers are looking and seeing the Middle East situation is far from resolved,” said Carl Larry, president of Oil Outlooks & Opinions in Houston. “The upside is unlimited, depending on how bad things get.”    

Of course I mean no one in THIS country is reacting.  In more thoughtful nations, people are rioting. Although, did you know there are more people protesting in Madison, Wisconsin this week than in Tripoli, Libya?  No, you wouldn’t know that because that’s not the way the Corporate Media in this country reports things, is it? To be fair, in Libya, the Government is threatening the protesters with guns while Governor Walker is only threatening to fire the protesters in Wisconsin.  Makes you kind of proud we live in a Democracy, doesn’t it?  

Bad news that will be ignored this morning includes a 0.5% drop in ICSC Retail Store Sales (those pesky small businesses), who are losing consumer discretionary dollars to energy producing companies – like Koch Industries!  Chinese PMI fell again in February but still an expansionist 52.2 but a separate HSBC survey shows a more significant drop to 51.7, a 7 month low. I apologise for the link there to the Liberal rag-sheet NY Times but the WSJ apparently has no idea Chinese PMI went lower as their headline on the same subject is “Asian Factory Data Show Growth Intact.”  I must say I am proud to live in a country where we are free to choose the facts we want to hear from such a wide variety of media outlets.  Imagine how dull it would be if there was just one truth and we all read the same thing…

Ben Bernanke addresses Congress today and tomorrow and those people will hear the same thing and draw completely different conclusions from it but we’re playing the Dollar bullish as other countries are loosening their money to keep up with us and I do believe there will be enough anti-Fed noise made this week that QE3 begins to be called into question.  Of course, it’s budget showdown week as well and, as Paul Krugman points out: “While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.”  Krugman points to the “Texas Miracle” and it’s not-so-miraculous aftermath:  

in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 per cent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 per cent of Texas children are in excellent or very good health, significantly below the national average…   The really striking thing about all this isn’t the cruelty — at this point you expect that — but the shortsightedness. What’s supposed to happen when today’s neglected children become tomorrow’s work force?

Unfortunately, that’s not a question that concerns the Koch Brothers or President Obama’s Economic Adviser, Jeff Immelt of GE – they are outsourcing their labour and they can’t wait for the day when American schools begin to turn out graduates who will live 8 to a room in a factory dormitory and work 12-hour shifts at $2 per hour.  It’s called “Putting America Back to Work” and there are armies of lobbyists either lining the pockets or twisting the arms of each and every Congressman you’ll see on TV over the next two days. 

That’s Democracy in action!  

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