Just Some Current Political Thoughts

On occasion I feel really bad for President Obama. While I do disagree with him on his methods and I definitely don’t agree with him philosophically, overall, I think he truly does want to make things better. I am not with that small group that thinks President Obama is out to "get" America. I think that he feels he is doing what is right for the country.

I think that the discussion about how to reform Health Care is one of those areas that I do feel bad for the President, to an extent. Where I don’t feel bad for him, or the other Democrats, is how they have gone about trying to pass this Health Care bill. I think this quote I saw on CNBC epitomizes where they have been doing wrong:

"There is only one guarantee -- that if we don't pass something the notion of trying to put Humpty Dumpty together again is a real long shot," said Rep. Patrick Kennedy, D-R.I., son of Edward Kennedy. "It's a lot easier to pass something and fix it later."

They have been pushing so hard to just pass something, as if they didn’t really care what the bill said (honestly there is no way any of them actually did know since it was over 2,000 pages of legaleze). As long as it had something to do with health care and looked big then it should fix things right? I don't believe any of them actually spent the time to really figure out what would be best for the American people and what the American people would want.

Every time I hear anyone say, this is just what needs to pass and if we could just pass it then the American people will understand that it is in their best interest (President Obama has been quoted as saying something along these lines), I can’t help but think – Then explain it now so that we understand before passing it into law. If lack of knowledge is truly the problem then help us understand. If, after all efforts to educate us, the majority of Americans are still opposed to the plan then go back to the drawing board to work on something we would like. You are our representative, not our parent.

If passing health care reform is as critical as they have been trying to sell it as being (Personally I think it is important but not more pressing than some of the other issues we are facing), then spend the time necessary to get it right. I am 100% against the notion of “Let’s pass it now and fix it later.” How often has that worked out before?

On a different, but related note. After reading the following article, I couldn’t help but think that this is the route we are taking as a nation if we continue with the notion that the government should bail us out and ensure that no company fails.



China: Lending Restrictions and Beijing's Predicament
Stratfor Today January 20, 2010 1808 GMT

Liu Mingkang, head of the China Banking Regulatory Commission (CBRC), said in an interview Jan. 20 that several Chinese banks had been asked to restrain their lending after proving to have inadequate capital reserves. Chinese media reports claimed that new bank loans so far in January have risen to as high as 1 and 1.5 trillion yuan ($146-$220 billion) — approaching or equaling the massive hike in January 2009. As a result, several major Chinese commercial banks (whose names were not given) were given oral commands to stop new lending for the rest of the month.

While the regulators will strive to control credit flows, the broader Chinese imperative to maintain growth at any cost contradicts the ability to preserve loan quality and allocate capital efficiently.

Under the guidance of the central government, bank lending — the dominant form of financing in China — has skyrocketed in the past year to spur growth, fend off the effects of slower global trade and thereby maintain social order. Amid the loan boom, Chinese authorities have at times sought to restrain banks, fearing a massive buildup of bad loans. In February, April, July and October 2009, Beijing restrained the banks, only to see lending spike again in March, June and September 2009 — and now again in January 2010. Essentially, Beijing was caught in a cycle of speeding up and slowing down credit expansion. With each deceleration, China's loan-dependent businesses, mostly state-owned and state-controlled, cry out in pain, resulting in another acceleration to make sure they do not grind to a halt.

2010 is expected to be another year of high lending, with Beijing projecting 7.5 trillion yuan ($1 trillion) in new loans — a smaller sum than the 9.6 trillion yuan ($1.4 trillion) lent in 2009, but indicative of a glut of credit consumption. In order to achieve even a mild reduction in lending in 2010 (not to mention the roughly 28 percent reduction target), the Chinese authorities know they will have to take some serious actions to restrict the banks. Hence, the demands for banks to increase their capital bases beginning in late 2009, and the raising of reserve ratio requirements on Jan. 12, forced banks to set more cash aside that would otherwise be lent out.

The Jan. 20 demand that certain commercial banks stop lending for the rest of the month is another such move.

The problem for China is that the entire economy depends on extremely loose lending policies, and when credit slows, companies in the critical manufacturing and trade sectors get squeezed. A great many Chinese companies rely on external consumers for their profits, but while exports showed growth for the first time in December, they face the usually slow months of January and February; only when spring comes around will it really be clear whether global demand has recovered sufficiently to support China's exporters. Thus, exports are no refuge yet, and since Beijing has no intention of knocking the legs out of growth, it will continue shoving credit into the system.