Monday, March 22, 2010

Is the U.S. Slowly Going Bankrupt?

At bloomberg today:

The bond market is saying that it’s safer to lend to Warren Buffett than Barack Obama.

Two-year notes sold by the billionaire’s Berkshire Hathaway Inc. in February yield 3.5 basis points less than Treasuries of similar maturity, according to data compiled by Bloomberg. Procter & Gamble Co., Johnson & Johnson and Lowe’s Cos. debt also traded at lower yields in recent weeks, a situation former Lehman Brothers Holdings Inc. chief fixed-income strategist Jack Malvey calls an “exceedingly rare” event in the history of the bond market.

If you know anything about financial mathematics, this really screw things up.  Many calculations are based on the underlying premise that the risk free rate is the U.S. Treasury rate.  By definition corporate bond rates are higher than Treasuries.

What is actually happening is that people no longer believe that the default risk for U.S. bonds is zero.  We are seen by the market increasingly as a credit risk.

If/when the "Obamacare" Health Bill becomes law, tack on another $500B in deficits over the next ten years.  The Medicare cuts alleged in the bill are politically unfeasible and will never happen.  One more heap of straw on the camel's back.

Tuesday, March 16, 2010

Status and Esteem, Old Enemies

In this post, I mentioned the link between status and depression.  That is, low status leads to depression.  After observing my own feelings, watching films, and watching other people, this link seems very strong and very common.  I had a brief e-mail exchange with Alvin Plantinga, a noted Christian philosopher at Notre Dame.  After his responses I fleshed out some of my thinking on this subject. 

There is a dichotomy to status in regards to relationships.  One side is power and the other I call esteem.  A perfect power relationship would be sociopathic, having no value in the person, only in what the person can do for them.  A perfect esteem relationship, would be one of perfect love, where the object is valued without regard to the power the relationship affords.  Neither exists for man in a pure form, only in tendencies.

"Real Friends" as they are referred to are those of esteem.  A friend, who is still your friend when you've lost your ability to provide status and power to those around you.  You lose your fortune, the power relationships end, the esteem relationships remain.  You lose your public image, the power relationships end, the esteem relationships remain.

The world of power relationships is unstable.  The vicissitudes of style, hipness, and good fortune, put us at the whim of forces outside of our control.  There can only be one "it-girl".  There can only be one alpha male.  There's only one Megan Fox, and only one Robert Pattison.  That is, until next week.  It is a zero sum game, where every win presupposes that someone else loses.

The world of esteem relationships is unbounded.  Choosing to trust, to value, appreciate, to love, is a game of mutual advantage.  Every win presupposes that someone else wins.  Our esteem, our status, is a function of our ability to create and maintain genuine relationships.

In that old post, I asked this question:

Are Christians susceptible to depression by avoiding status symbols, personal glory and power? Or is there some other route that supplants these losses with something more?

Choosing to eschew power and embrace esteem is the pathway for the Christian away from depression.  Love your neighbor as yourself.

Monday, March 1, 2010

Why We Fear Obama and the Left

From Stan Isaacs at the Philadelphia Inquirer today, speaking on Obama:

He should forget bipartisanship and work with congressional Democrats to name three new justices to the court to meet the challenges he faces.

The whole piece is dedicated to justifying Obama naming three new Supreme Court justices, to lift the total to 12.  Does this man not smell the brimstone on his own breath?  Isaacs even thinks that FDR got a raw deal when public opinion turned against him while trying to pack the court in the 1930's.  This is Hugo Chavez style thinking.  Checks and balances be damned, we need to pass our agenda.

Why are we afraid of Obama and the Left?  Is he a socialist, maybe not.  Is he a communist, maybe not.  The problem with the Left, though, is that they have no logical barriers between themselves and totalitarianism.  Hayek's  Road to Serfdom is the logical flow of their beliefs.