A fairy is a term for a supposed race of supernatural beings that magically intermeddle in human affairs (1911 Encyclopedia Britannica). A fairy tale is a traditional story written for children which usually involves imaginary creatures and magic (Cambridge International Dictionary). Please forgive me for the references to historical fiction, but the FED doublespeak leaves me no alternative.
First, focus your attention to the top chart. The evidence would suggest the rising demand for funds is the prime mover of short term interest rates; and if anything, the FED remains well behind the curve. There is a tried and true relationship between Short Term Debt growth and the rhythm of the inventory cycle. But something is amiss and it is a BIG miss for the FED. The demand for short term borrowing is accelerating during the down leg of an inventory cycle, largely due to the lack of longer term debt issuance and the decline of depreciation allowances after the recent tax cut expired.
Given that loan demand accelerates when business rebuilds inventories, one could reasonably assume that the demand for short term credit is at a low point relative to the 2H of 2006. The new head of the FED, a.k.a., Helicopter Ben, is well known for his study of the linkage of the credit creation process and nominal economic activity. That being the case, as the U.S. economy enters into 2006, the Balance Sheet condition of the largest intermediary of short term credit, the banking industry, bears review.
The second chart reflects the behavior of banks bidding for funds versus the liquidity position of the asset side of their balance sheet. The Banking industry will make new lows in liquidity before it is “loaned up” as it was coincidentally with the “peak” of the inventory cycle of 1999-2000. The behavior/expectations of businessmen engaged in profit maximizing activities is the real world; the FED is left to telling stories.
Carole StrayhornWayne Slater of the Dallas Morning News has an interesting story today on Carole Strayhorn’s possible candidacy for Governor as an independent. She had been expected to run as a Republican in the primary race against incumbent Governor Rick Perry. Carolyn Barta wrote about the race recently for the Dallas Blog, citing a new Texas poll which has Perry with a wide lead over Strayhorn among Republican primary voters – 55% to 24%. It is difficult to see how Strayhorn can make up that much ground between now and the March primary.
As Slater notes, much of Strayhorn’s financial backing is coming from well-known Democrats and plaintiff trial lawyers, a traditional Democratic constituency. Slater states that, among the hosts for an upcoming Austin fund-raiser for Strayhorn are "former Democratic Lt. Gov. Ben Barnes and Houston attorney Arthur Schecter, who served as U.S. Ambassador to the Bahamas under President Bill Clinton." Slater reports that some of her financial backers are encouraging Strayhorn to run as an independent.
People tend to forget that Carole Strayhorn is a fairly recent "convert" to the Republican party having previously been elected Mayor of Austin, generally acknowledged to be the most liberal city in Texas, as a Democrat.
Strayhorn’s campaign reportedly is polling voters as to whether they would support her for Governor if she ran as an independent. Kinky Friedman already has announced his candidacy as an independent, and Mrs. Strayhorn’s decision to do likewise would change the dynamics of the Governor’s race. Assuming that she could siphon off a significant minority of Republicans to support her in a general election, Carole Strayhorn has significant appeal among independents and Democrats to make her a far more serious contender as an independent than someone like Kinky Friedman. Moreover, were Strayhorn to switch and run as an independent, it might cause a more formidable Democratic candidate to jump into the race for Governor next year as well.
Well, here we go again... “And now a holiday song -- ‘God Rest You Merry, Gentlemen..’.” This from my favorite classical music station. Shall we listen in? “God rest you merry, gentlemen, let nothing you dismay. Remember Christ our Savior was born on Christmas Day; to save us all from Satan’s power when we were gone astray....” Etc., etc., etc. Oh, boy, didn't we cover up that dogmatic theological treatise by billing the musical selection in question as a “holiday song” and not a “Christmas carol”? I guess its fine (by the standards of the time) to launch on the airwaves an affirmation of Jesus Christ’s salvational power -- just so long as we call it something else. As I said: Oh, boy. This isn’t one more disquisition on the emergence of “Happy Holidays” as a politically correct substitute for a quasi-theological salute like “Merry Christmas.” This is a puzzled look at the puzzled state of the American mind and conscience in the Year of Our Lord -- excuse me, excuse me -- 2005. Just what do we do with God in a society led for 40 years, by the U. S. Supreme Court and the American Civil Liberties Union, to at least seasonal rethinking of what might be called our public theology? We’ve gotten so picky and prissy about religion in the public square that no one really knows what to say and do at times like Christmas. Our paper currency informs us that “In God We Trust,” but try affirming that proposition at, say, a high school commencement. Or try praying it, if you want to see how long it takes an ACLU lawyer to get to the courthouse. On the scientific front, we find things equally disordered and disputed. Courts these days seem designed for the purpose of adjudicating controversies between supporters of Darwinian evolution and pleaders for the teaching of intelligent design -- the proposition that life didn’t just "happen." Good old generic "religion" -- the kind President Eisenhower commended to us without reproof from the New York Times (oh, but if Ike were alive to try it now...!) -- is today a reliable fight-starter. Even in these times of comfort and joy -- whatever we elect to call them. When last I heard, Target was defending itself against an outcry over the in-store downgrading of “Christmas": and the upgrading of "holiday." The dispute makes no objective sense, of course... "Holiday" means "holy day." Holy for what reason? For the reason that Christ was born: absent which occasion the stores wouldn't be bidding you, come max out your credit cards. You'd think we could have sailed on another 40 or 50 years serene in our Christian pan-denominationalism. On the other hand...
Even pan-denominationalism isn’t a good fit in a world wary of spiritual entanglements. Free-market capitalism, God bless it (there I go again!) not only maximizes prosperity but encourages the personal autonomy and fragmentation that have become our moral hallmarks. In other words, our popular creed, instead of "Jesus Saves!" Seems to be “Lemme Alone, Hear?"
Tom PaukenOn Monday, the Dallas Morning News ran a front page story by Robert Dodge entitled "Budget cuts may hit poor". Scott McCown is quoted extensively in Dodge’s article as decrying the attempt by some members of Congress to reduce the growth in spending on entitlements. McCown is the Judge who forced the "Robin Hood" school finance scheme on Texas when he was a state district judge in Travis County. He now heads up a liberal think tank in Austin called the Center for Public Policy Priorities. McCown blames the federal budget deficits not on spending increases, but on the Bush tax cuts in 2001 and 2003.
The problem with McCown’s analysis is that federal spending on the Medicaid and Food Stamps programs has exploded over the past four years. Medicaid spending is up nearly 50% since 2000 while the Wall St. Journal reports in Monday’s edition that the "federal government’s food stamps tab rose to $27 billion in 2004 from $17.1 billion in 2000." That’s nearly a 60% increase over the past four years. All that fiscal conservatives in the House like Jeb Hensarling are trying to do is slow down the growth in federal spending.
The U.S. budget deficit for fiscal year 2005 is $319 billion, and Congress is seeking to identify $35 billion in spending cuts to offset hurricane recovery costs associated with the Katrina disaster. Congressman Jeb Hensarling has it right when he says it is necessary to slow down spending on entitlement programs which account for two-thirds of the federal budge. The "guns and butter" spending polices of the Administration and the Congress over the past four years are reminiscent of the spending excesses of the Lyndon Johnson Administration in the late 1960s. The American economy paid a heavy price for those excesses in the 1970s. Rep. Hensarling and other fiscal conservatives like him in Congress should be praised – not condemned by the likes of Scott McCown – for trying to rein in an out-of control federal budget.
Since I am a big fan of Michael Irvin’s, I was disappointed as many folks South of the Trinity were when Mr. Irvin found himself once again in the negative glare of the media spotlight. Many of us South of the Trinity are still somewhat baffled over the fact that there were no drugs found in this case and the drug even hinted at was marijuana, a drug that is legal in 11 states. Yet, those facts withstanding, Irvin was crucified and I am not surprised. Little has been reported about Irvin’s own victimization by the culture of privilege that envelops African-American star athletes literally from the moment their athletic exploits become noteworthy.
I admire Michael Irvin as much for his ability to become successful after leaving the playing field then I admire his exploits on the field. His ascension to media stardom is even more remarkable when you consider he overcame drug addiction, near financial ruin, and massive legal problems. Unfortunately, very few former Black professional athletes maintain even a semblance of financial well being after they leave the game. My good friend, the late Bullet Bob Hayes, comes to mind. A great athlete and a great guy but Bob was never able to do what Michael Irvin has done even though their circumstances were similar.
In African-American communities all over America, aspiring child athletes who show promise of greatness are ushered into a special sub culture of privilege where the rules are different and the notion of right and wrong as others outside of the culture are taught are simply not the same. That does not mean the members of this privilege culture are bad people or criminals in the making. This is no truer then whites who are members of the upper class are automatically considered Enron clones in the making. But it does mean we do not see the world the way the average person commenting on Michael Irvin’s life was taught to see the world. I was somewhat successful as a high school and college athlete, though I never achieved the success of Michael Irvin; I was still a member of that sub-culture of privilege that exists in the Black community, a sub-culture that almost guarantees its members’ failure in society at large.
Professional athletics is the only profession where African-American people are universally accepted and respected by powerful whites. Irvin’s fans are Republicans and Democrats alike. Even the President hugged Muhammad Ali during a recent awards ceremony. Young Black kids growing up in the worst urban conditions can see their way out via professional athletes and so can their non-athletic peers. Thus the rules for existence in society no longer apply to one who has the athletic ability to possibly “go pro”. Maybe that explains why Michael Irvin did not pay his traffic ticket in a timely manner like most citizens are taught to do. Why should he?
Those of us who are from that very special culture of privilege have never been really forced to follow all of the rules. Just like those white folks from the wealthiest enclaves of American society probably do not follow all of the rules like the average Joe. African-American star athletes are erroneously taught from an early age, we are maybe so special that all of the rules don’t apply. The problem is we are never really forced to understand even though we are indeed special we are not white and thus not as privileged as we were taught to believe. That’s how it is South Of The Trinity.