Economic Distortions

The Federal Reserve has once again cut its prime lending rate and to date this will be the seventh reduction since September all in the name of easing what is considered a severe credit crunch. The danger in all this is the devaluation of the dollar which has caused the price of gold to shoot up but more importantly the price of imports are becoming more expensive especially oil. It could be that the Federal Reserves proactive course in correcting a perceived economic anomaly is a mistake. Something had gone wrong in the financial markets when home mortgages were made easy to consumers with little ability to pay. Now that bad loans are working there way into the system banks and investors are waiting for loses to cross over from perceived to actual, in other words things can only settle down when the markets shed their uncertainty. Just what is the value of a home now or two months from now? If loans are tied to value and value is elusive, then credit markets will suffer. The Feds can cut rates all it wants but no one wants to invest in the dark. A case could be made that none of this should have happened in the first place if state and federal governments hadn't strong armed lenders into loosening up its lending practices and create mortgages to consumers with little ability to make good on a note.
Whenever external forces (ie: political) interfere with the mechanisms of markets it's no surprise that distortions in prices and ultimately hardship ensures. It is not natural for gas to shoot up to close to $4.00 a gallon or homes to lose %20 of value when people haven't been driving more then usual or given up on buying homes, when prices change without the change in behaviour of the consumer then we smell a rat.

Party Of Farce. Bad Week For The Candidates.

As the primary continues so does the circus. Hillary thought it necessary to embellish her credentials by saying on three separate occasions that she was under sniper fire in Bosnia during her husbands presidency. When the comedian Sinbad, who accompanied the first lady, said it wasn't true she noted well, he's a comedian after all, they say things that are laughable, can't count on what he says, c'mon. Soon after CBS News dug up a video of the event and sure enough it was a festive and relaxed affair showing Hillary with her daughter greeting troops and civilians alike including an 8 year old child. Far cry from running from sniper fire. She quickly retracted, "misspoke" as she called it giving new meaning to misspeaking. Weeks go by and husband Bill thought to add to the story, on the one hand giving credence to Hillary's account citing General Wesley Clark who said it was dangerous here and there and the president of Bosnia who also said it was dangerous in some places then completely undermining his own excuses by saying she was giving a speech in the end of a long day (she was "fatigued") only to find out her misspeaking was late morning. Taking Hillary's account post the CBS archives one has to wonder why husband Bill would send his wife to a spot with a lot of sniper fire in the first place? Knowing it wasn't what she described, it assuages our worst suspicions of husband Bill's possible motives. He may be a lying cad but he's not a creep. We think it was Christopher Hitchens who said of the Clintons that they tell a big lie when a small lie would do and tell a small lie when the truth would do. Bill Clinton on the same day of his defence of Hillary had to retract even his own recollection of events because Hillary, who by now has had time to think things over and get plenty of sleep, told him he doesn't remember either. Why it is anyone would support this crowd, liberalism we can understand, barley, but is this the second best they can do?

Barak Obama doesn't fair well this week either. In a speech to a San Francisco crowd Obama thought it necessary to tell his constituency just what is in the hearts and minds of simple folk in Pennsylvania saying they "..cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations." Now lets take these velcroniums one by one. Gun ownership is something people own out of fit of frustration? Hating immigrants and people "not like them" a common trait in small town America? They think protectionism is just the solution to their economic doldrums? Aside from the notion of what small town Pennsylvanians think, isn't stereotyping a big no no when attributed to people of color and those who want to redefine gender and sexuality? Why is it okay in this instance? But on his account one item sticks out in particular and that is religion. Is Obama telling us that a "clinging" to religion something other then a tradition of faith and, well, hope? Poor fools, can you believe they own guns and believe in God? Perhaps to Obama they believe in God when Jesus would do and believe in Jesus when the-government-is-drugging-African Americans-God-dam-America would do.

Waterbury's Dire State Of Affairs And Why It May Not Last

Every couple of years Waterbury will get a negative rating of best/worst towns in the country from a business or travel publication. This year Forbes magazine online edition rated Waterbury as a bad town to do business in calling it a dump and a corrupt one at that. What instigated all this was the appointment of former ex-con governor John Rowland to run economic development in an organization that does nothing of a kind. We extend compliments to Anita Bologna for sticking up for the city chastising Forbes and its columnist for its characterization in the Waterbury Observer also various commentaries on the Forbes web site, some of which are not native to Waterbury but happen to like our town.

Any politician that looks to the Waterbury Development Corp. to "develop" communities or to market the city ought to just come out and say that they are negligent, or incompetent as an elected official to do anything about the economic well being of Waterbury. It is the job of elected officials to improve the conditions the city finds itself. That they would look to John Rowland, or anyone for that matter, in an outside organization is washing their hands of the task. That Rowland is an ex-con detracts from the bigger picture and that is why is it that city hall can't do the economic development themselves? What brings the city in it's predicament, real or imagined, is the cost of government. High taxes (and they are) penalizes business and property owners.

We won't go over again just what it is that drives successful economies, previous posts have done that. Politicians like to think that "enterprise zones" and "tax abatement's" seem to work, and we agree, they do. We just can't understand why they have to be implemented in zones or for new business. If they see that these planes work then why do they have to be under special circumstances, why not extend the zone to everywhere and abatement's (we like to call this lower taxes, or outright elimination of some taxes) for everyone? If your outside the zone then your not in a very enterprising place are you, if you've been doing business for 35 years then your paying a business unfriendly tax. We're not saying it, the politicians are ADMITTING it. Just look at their solutions when it comes to business they want to attract or areas they want to enhance. As for the rest of us who've been here they scratch their heads and outsource the problem as if the problem is all of a sudden beyond their ability.

Waterbury is a beautiful city with alot going for it. It's greatest resource is not the highways, not it's medical services, manufacturing base, sports facilities, culture, shopping areas or it's housing prices. It's best resource is its people, enterprising, innovative and intelligent people. Waterbury may find its way higher on some list somewhere and we think it will improve because it has the talent to become the best town in the state. It isn't their yet, we want a hand in changing that.