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Opportunity Cost versus Losses

December 18, 2011

One of the things many people forget to factor into an equation is the Opportunity Cost of making one decision over another.  Nowhere is this lack more evident than in the way that government makes its decisions.  On balance, decisions are either solely or primarily for political expediency.  Unfortunately, the voting public has a short memory of such decisions and errors in favor of the politically expedient solution (On the other hand, if voters were more discerning, politically expedient would no longer be expedient to the politicians…)

It’ s hard to find a better example of this than in the way in which the Democratic Party approached the war in Iraq.  Initially, when broad internal and international support was engaged, the Democrats were supportive.  Over time, as they saw this would be a difficult fight, they became opposed (see the war in Libya for an example of why their “opposition” may have been political expediency rather than based on moral grounds..)

Bush, despite his many flaws, was a rare politician who would follow his convictions rather than taking the easy way out.   He, I believe, correctly saw Iraq as a key strategic location in the Middle East, a strategic location that could be used in great advantage for several different ends.  Without debating the endless question of whether or not Iraq was living up to their previous agreements and whether or not that (and their killing of civilians and the need for expensive and endless “no fly zone” coverage by the US, there were still many reasons for us to do what we did:

- Location, as seen by Gulf War I, Iraq is a country where we can launch and execute heavy armor maneuvers without getting bogged down in rugged terrain

- Iraq has a relatively educated populace and even a relatively recent history of women who are educated and part of the work force.  An economic and social success here could have longer term impact on other states.

- Iraq occupies a central position between Saudi Arabia and Iran along with access to the Persian Gulf and into Syria and Turkey — from a logistics and military staging standpoint, Iraq is a great piece of real estate

- Hussein had long been a strong supporter and advocate for terrorists – ones who worked directly with him and those who were only supported indirectly.  Whether or not he was directly involved in 9-11 (it appears he wasn’t), he had often and effectively worked with terrorists who were not from his Baath party and who were often Shia.  In other words, when it came to working against the U.S.  religious and political differences meant little.

So there were plenty of reasons for wanting to make this work with a large number of potential benefits to be gained.  Certainly, things did not always go as planned.  Fallujah was a gut check moment to many (and when I first came across the Belmont Club, as an aside).  The decision to let the State Department take over in the aftermath of the war was disastrous, in my opinion.  The wave of terrorist attacks and the disintegration of the effort even appeared to have turned the war/post-war into a lost cause. But amidst all of those things the military and Bush held firm.  I think it was fascinating that Bush stayed the course even with the very possible loss of reelection.  I think it is fascinating that he was the one who pushed the surge, even over opposition and disagreement in factions of the military leadership and over almost unanimous opposition in the State department.  But, recognizing the benefits, he held firm and pushed us to victory — not because of political expediency, but because of real tangible benefits to our country and our effort.

However, it has now been 3 years since Bush led our foreign policy, and the 2008 election was seen as an immediate and strong repudiation of his leadership.  Instead of embracing the benefits and making sure that those benefits were captured, our leadership switched to trying to exit as quickly as possible.  Now, with our troops on their way out what have we gained from the cost of blood and money we spent?

1. Hussein is gone.  This is obviously a victory, and a good thing for the citizens of Iraq.  One need only look at the examples of the “Arab Spring” to realize that too often the citizens of these countries end up going from the frying pan into the fire when they get change they want.

2. We have and are likely to continue to have deep ties with the Iraqi military.   HOWEVER, due to our inability to reach agreement with the Iraqi government over immunity for our troops (necessary because if endemic and factional corruption in their government officials), we will have to remove all of our troops by the end of the year.  While this may have the door open for some logistics teams and others who can quickly ramp up another effort if needed, it may not be as optimal it could have been.   Indeed, most Iraqis would like to see the US troops remain – for a couple of reasons.  Because they don’t yet trust their own security troops and to ward off a threat of invasion from Iran.

3.  A wealth of information.  While the Democrats were busy decrying anything and everything as a human rights violation, our troops and our agents were busy extracting and analyzing information from thousands of sources. While it made the effort difficult on the ground for our troops, the migration of fighters to Iraq for the other side brought many of our enemies into the same place at the same time allowing us to capture and interrogate them.

There are more things that can be mentioned including the prestige of the US in the area.  While this should not be confused with a popularity contest like an election for Prom Queen, this was nonetheless real.  We extracted huge benefits from this war in dealing with several countries in the middle east — Libya gave up a nuclear weapons program and Qaddafi was a near agent for us prior to his fall.  Syria and Lebanon both had changes due to our show of strength — In particular we may have been able to make larger gains in Lebanon had we had the necessary political will to make them stick.

I still believe that agitation against the war on the homefront prevented us from holding firm in Lebanon. Indeed, that agitation and the political changes of ’08 have cheated us out of many of the benefits we should have earned from the war.  Not only is Iran now emboldened and  pushing their influence throughout the middle east, but we are seen as weaklings (or worse dupes) who can be used to support the opposition because of our silly policies (dump Mubarak and bring in more radical Muslim leadership for Egypt — “lead from behind” in Libya allowing Muslim organizations to seize power there and to take the credit, announce a timeline for withdrawal in Iraq and give our enemies a precise clock to know how long they have to hold out).

While the current President has not “lost” the war in Iraq and the Middle East, he’s put us in a position of paying the price without getting the full benefits of what we tried to do.  That opportunity cost will, as always, come back to haunt us at some point in the future (just as it did when we did nothing to stop the Shah of Iran from being deposed, for instance).  Does that mean that whatever group takes control in Egypt will be as bad as the Ayatollah?  No, but indications are that it will be much worse than Mubarak for us and for the citizens of that country.  In the end, no “losing” in the past 3 years will cost us a great deal more in the future.   The opportunity cost of Obama’s actions will only be addressed in the coming years, and I fear that those costs will be great.

Friday Stream of Consciousness

December 16, 2011

It’s Friday so I’m going to write about whatever comes into my head:

Christopher Hitchens passed away.  Although he wouldn’t appreciate the sentiment, God Bless him.  He was one of those people who lived by the sword of his brilliance, but carried with him all of his scars and flaws.

Republican Debate last night.  Apparently it was the final debate of the year and really the big one rolling into the Iowa Caucasus.  Once again the debate was ugly at times with Republicans fighting among themselves for the nomination, but as I’ve said before, they are having a real debate about what we should do as a country and who should lead that effort from the Republican side.  I think the Gingrich boomlet may be dissipating somewhat under attacks from Bachmann, who surprisingly continues to hang in the race and may do well in Iowa.  Romney was Romney (despite a made up controversy from press about his words and trying to link them to the KKK– funny, but Mormons don’t seem to be a hot bed of KKK agitation).  Perry seemed to have had his best debate so far.  With the stories about his early performances being affected by his back surgery and the hours of duty required for his day job (he is STILL Governor of the state of Texas), and his push for visibility in Iowa I can see him gaining ground.  Now, none of these guys have made the deal with the voters just yet,but they are getting there and I am happy that we have a long, sustained campaign on the Republican side.. We need someone who can stand up to the Obama war-chest and the cynical, last-gasp Verdunne strategy they are likely to employ in this election.

I am SORE.  Part of what I’ve most proud of this year is a real attempt to examine and improve my life.  I’d love to give credit to Elizabeth Warren and the “State”– Ha.. In seriousness, I’ve made the most improvement by doing the things the government tells us NOT to do.  From a health perspective, I follow a Paleo/Primal/Archevore diet that is high in saturated fats, avoids vegetable oils and all “healthy whole grains” (is that a trademark by the people who brought us the food pyramid or the food plate or whatever they call it now?), and is filled with plenty of hearty red meat, bacon and eggs.

Nor do I follow the standard advice to do plenty of cardio.  I walk a couple of miles a day with my German Shepherd, but the rest of my workout regimen is “to life heavy things” a couple of times a week.  To that end, I started using Mark Rippetoe’s “Starting Strength” program (well, a modified program, given that I don’t eat enough, don’t sleep enough and still have too much stress from work).  What it means in practice for me is lifting twice per week and doing a short list of very intense, full body lifts – Squats, Bench Press, Power Cleans, Deadlifts, Overhead Press and when I am not too fried at the end of the workout, pull ups and chin ups.   The program calls for 3 workouts a week while alternating deadlifts and cleans and alternating bench press and overhead press.  For the moment, I’ve been doing the full range twice a week — but now that my weights are moving up and getting higher, I’ll likely have to start alternating or at least varying the volume of work in those exercises.

For beginners, even beginners of  my age (full disclosure, I am 44), this overall  program WORKS.  First of all, Paleo works.  I started at 200 lbs with about 25% body fat and in 3-4 months dropped 20 lbs and to about 16% body fat while working out very minimally… And the benefits go beyond the weight loss.  I’m not hungry, I feel more focused, I sleep better.  Really, it makes me wonder what the Hell the government is thinking in advising people to eat a diet that is so far separated from the traditional diets of our ancestors…

Second of all, Rippetoe’s program works.  As noted, I’m hardly a great candidate for big weight lifting gains.  44, married, stressed at work and at home, too little sleep and with a marginal ability to recover in time for my next workouts.  Yet in about 4 months I’ve taken my working sets in squats from 85lbs to 175 lbs, my deadlift from 135 to 210 and my bench press from 85 to 170.  My wife and others have noticed (never a bad thing), and the BF machine has noticed.  Although I never trust it to be entirely accurate, it says I’ve gained somewhere between 5-10 lbs of muscle while in the lifting program putting me at 190 lbs now with people telling me I look thinner than I did when I weighed 180.

 http://www.archevore.com/get-started/

http://www.marksdailyapple.com/primal-blueprint-101/#axzz1ghqcTdYk

http://startingstrength.wikia.com/wiki/Starting_Strength_Wiki 

 http://startingstrength.com/

In my world, everyone should get to make their own decisions about what is best for themselves.  So, obviously, read and make your own decisions.  That said, I think anyone who is skeptical of the government should think hard about the advice that is peddled from that government regarding your health.  Personally, I think it is inconceivable that the afflictions of our modern age (diabetes, obesity, cancer and the general malaise of moder life) are things that are hardwired into our DNA, and I refuse to take advice that I believe will lead me directly into those afflictions.

A Matter of Trust

December 14, 2011

One of the things I continually come back to in my view of the world is the question of who do I trust to make decisions?  That alone might be the biggest differentiator in politics.  Yet, it is something that not everyone clearly understands.  When you strip away all the trappings of government programs that seek to couch them in compassionate terms or the s usual “save the children” platitudes, they generally come down to a question of trust.  Do you trust individuals or government to make key decisions about peoples’ lives.

Earlier this year I reached an age at which I realized that I had to make changes to the way I lived, or to surrender to the inevitable decline of middle age.  As is my habit, I did a great deal of research in trying to decide what to do.  My health, although not dire, was not good.  I was exhausted all the time, didn’t sleep well, under constant stress from a variety of sources, and overall not as strong, vibrant, smart or content as I’d been in the not so distant past.  All of that is to say nothing about the decline in sheer athleticism.  I certainly was nowhere near as healthy as I’d been in high school,  or in college for that matter.

Having a history of high cholesterol and diabetes in my family, I was particularly interested in understanding what was happening around diet as it pertained to those two things.  After a great deal of time reading the conventional wisdom about those things, I started to become skeptical.  Was it true that the best way to control diabetes was a low fat diet emphasizing foods with tons of carbs?  Was it true that saturated fat was a evil villain dead set on killing everyone who at anything with fat in it?

To be fair, I started off somewhat skeptical.  I spent nearly a year working in Europe as a consultant, and spent a good bit of that time enjoying  both German and French cooking.  That experience sparked a deeper interest in cooking, and I quickly found that dishes made with “real” butter tasted better than ones made with whatever substitute people wanted to try.  My wife and I joked that Bacon, Butter and Booze made all recipes taste better.  Bit by bit, we started to cook more in that manner, but I didn’t start to piece it all together until later after I started to research the origins of the conventional wisdom.

One of the things that I read was an analysis of Ancel Keys’s 7 country study.  At the U of Chicago we learned to always look at the source texts to make your own judgments.  In this case, the source text wasn’t as revealing as the information that had been left out:

http://high-fat-nutrition.blogspot.com/2009/02/cholesterol-presentation-between.html

While he may have been able to make the case that cardiovascular disease has been driven by saturated fat with only 7 countries, the expanded data set that he discarded for the purposes of saving his hypothesis call into question his theory.. in fact, the data refuses to support the theory.

Why is this so important?  From a health perspective, the Saturated fat hypothesis is what really leads to the cholesterol theory of cardiovascular disease — another hypothesis that has struggled under scrutiny.

What does it mean in terms of government and trust? In a sense, government programs and expanded government are asking you to trust a cadre of people who are likely less capable and less scrupulous than Mr. Keys to make decisions about your life.   I, for one, chose to not trust those people.  I prefer to make my own decisions about my health and my life.  In the case of my diet, I have chosen to eat a Primal or Paleo diet that includes dairy products.  However, I have no intention of forcing others to eat that diet by decree.  It is my individual choice and if I discuss it on this blog, readers are free to disagree and to eat what they want free from any worries of me trying to advocate for taxes or other means to force them into any diet choice I may advocate.

I would have a lot more respect for the left if they chose to live their lives without use of compulsion to get others to live the way they do.  However, especially the last 3 years, we have seen that they simply cannot avoid the more authoritarian impulses in their nature.

2012 Coming Up Soon

December 13, 2011

By historical standards the campaign for the Presidency has started much earlier than in the past.  Reagan famously got into the race for 1980 on November 13, 1979, but this campaign has been much different:

President Obama has seemingly been running for re-election since the day he took office by taking deliberate attempts to shore up support with key constituencies (e.g., auto bailouts for union benefit, etc., passing a health care bill that his core supporters have wanted for the past 50 years, etc., etc.).  In that sense, he’s been successful – Unions OWE him and have sought to repay that debt through money, organization and through strong arm tactics when needed.  The radical left has been less appreciative, and perhaps Obama has found that enough is never enough with them.  Indeed, the most energetic movement on the left in the past three years has been the “Occupy Wall Street” (along with accompanying protests in other major cities and locales).  While not hugely successful in terms of numbers (Tea Party gatherings were much larger and with a much larger cross section of the country, for instance), these movements garnered a great deal of press — at least to the extent that we knew that there was a movement.  It was the underlying support of the OWS movement that seemed to remain a secret to the press.  Never mind that any cursory examination of the movement showed support from communist groups, anarchist groups and other such unsavory agencies.  Once those supporters came to the forefront and once the movement started to implode due to it’s own intrinsic values (If an organization is made up of anarchists and communists is it surprising that it degenerates under it’s own fascist tendencies and descends into general anarchy?)

In any case,  this remains Obama’s “Core Support” – Unions and the radical left.  One can already see his campaign pivoting away from the 2008 campaign themes to ones designed to rachet of the level of passion among these groups.  His themes (always centered around class warfare but coded in ways that don’t offend the “non-believers” among independents, for instance) are now more sharply worded and clearly stated attacks on significant portions of the population.  If some commentary is to be believed, Obama has already dismissed the possibility of winning white working class voters this time around and will instead double down on the hard left that remains in his camp.  Given the numbers that are available to vote within that constituency, he will have little chance of winning unless he is able to demoralize vast numbers of voters to keep them away from the polls.  It promises to be a brutal election — one resembling the  Meuse Mill of Verdun.

In that context, the Republican primaries start to make sense.  The system was changed this year to make the primary less of a coronation and more of a long marathon designed to separate the strong from the weak by splitting up delegates differently (until April 1, all primaries will delegate proportionally rather than winner take all).  Under the old system a candidate like Romney might have been able to pull in a couple of large wins early and put the other candidates into a situation of having to spend a huge amount of money to just stay in the race with little chance of catching up.  In the new system, we are unlikely to see a winner until later than we’ve seen since, well, maybe 1976.

The “type” of candidate is also different this year.  Perfectly acceptable candidates such as Pawlenty have fallen by the wayside.  My opinion is that the Republican voters know that they need a ‘wartime’ candidate and not a business as usual candidate.   Due to his having run for almost 8 years, Romney has the money, organization and support to hang in and keep himself near or at the top of the polls.  Beyond that, there have been bubbles of types of candidates – the Tea Party seemed to jump on the Herman Cain bandwagon before his flaws came to light more vividly, and now they are searching for someone to support in this race.  Perry had a burst and then fumbled the ball, but he’s a tenacious and tough candidate who has experience at running tough races – I suspect he’ll be in this for the long haul, and there’s already evidence that he’s pulling his poll numbers back up in Iowa.

The biggest anomaly, though, has to be Gingrich.  Once thought to be forever through in politics, he’s surged into the lead in many polls.   How could have this happened?  I remember a conversation I had about Newt back in the ’90’s with someone who thought he was done forever.  I reminded them of Nixon’s “Checkers” speech and of his loss to Kennedy.  Despite the many obituaries for his political career (including his own “You won’t have Nixon to kick around anymore because, gentlemen, this is my last press conference”), it took him less than a decade to win the Presidency.  How is that situation like Gingrich’s?  Once again we have a President who has engaged in a political, cultural and economic war against his “enemies” (e.g., political opponents) within the country.  Once again, we have a radical left that is willing to use strong arm tactics to undermine the functioning of government, and once again we have a brutal campaign that will require someone who wins to go beyond the normal press outlets and appeal directly to people while being quick-witted and capable enough to fend off direct media attacks.

Beyond the large number of candidates who are likely to remain in the race, we also have a large number of Republican constituencies who are looking for their place within the process.  The Ron Paul wing with it’s libertarian views occupies a large and passionate part of the party.  Moderates to more independent minded Republicans have long been aligned with Romney.  The Tea Party has no favored candidate at the moment and some of their support appears to have been given to Gingrich after Cain suspended his campaign.  Social conservatives seemed to initially support Bachmann, but now appear to have no apparent candidate to support.  The positive is that there will be plenty of time for someone to forge a coalition to pull these constituencies together.

My view, as it has long been, is that Federalism is the best way for candidates to pull together the disparate wings of the party.  In that social conservatives can be protected from the intrusions of the federal government, even if they can’t project their views upon others.  Libertarians get control over their own lives on a local level while government remains small.  And even the moderate/independent voters get to lead their lives as they wish on a local level. It isn’t a perfect answer, but it is a workable answer to the complexities and difficulties of government.   As the campaign goes on, if Perry wishes to win, I suspect he’ll have to be able to make a compelling case for federalism as a way of governing what many consider to be an ungovernable country.   In any case, it’s going to be a long haul to the nomination.  Enjoy the fact that Republicans are actually having a debate about how the country should be governed and not just going through the motions and having a coronation for the front runner.

 

Apologies

August 14, 2009

For those who have been visiting and looking for new posts, I apologize.  I have been busy with work related issues and travel, but hope to resume normal posting this weekend.

cheers

A deliberate error?

July 25, 2009

Much has been said about Obama’s Health Care press conference this past week.  I have had several reactions to it from a content standpoint and have gone back and forth on the meaning and depth of damage Obama did to himself by getting into the Gates arrest issue.  However, I have come to the viewpoint that he stepped into this error deliberately, knowing that it would cause controversy.

One of the beliefs I have about Obama is that despite his age, he remains an “untested” person.  In other words, he has not had great traumas or failures by which to guage how he will react in a time of crisis.  By his age, most adults have had several failures and crisis by which to judge how they react when faced with the difficult times that inevitably find all of us at some point in our lives.  Yet, when looking at his past, one sees a series of coincidences and happenstance that have protected this man from harsh reality.

- Poor grades at Occidental (I am supposing that if he were a world-class scholar, that transcript would have been available long ago), no problem, he has well positioned supporters and easily meets the “affirmative action” standards for Harvard law.

- Lack of legal genius, no problem, he’s well liked enough to be the first African American president of the Harvard law review — are we still looking for a single article from the man during his term there?

- tough primary challange in Illinois, find your opponents divorce records.  tough senate race against a republican.. open the divorce records again.

- running as the most leftward of any Presidential candidate ever?  rely on a compliant and supplicant press, while blaming the previous President.

etc. etc.

So now he’s in the Whitehouse, and for the first time finding his poll numbers slipping.  While this man may be many things, he is no immune to being thin-skinned about being “liked”.  Add in the primary two initiatives in his domestic  agenda and a bit of desparation can be seen to be awakening in the man.  Yet, this former community activist (agitator) sees an opportunity.  Exactly the kind of thing that used to galvanize his support back in Chicago, and a situation fitting with his pre-existing beliefs about African Americans and police officers in this country.

So he sets up a queston about it with one of his pet journalists and after a lackluster performance (you know he could tell it wasn’t his best night in front of the cameras) he called on that journalist and tried to change the direction.  Yes, he knew this question was out there, and he deliberately called on the question as his way of trying to outflank the opposition (as we know, anyone who opposes him must be racist.. what better way to expose the real reason for their opposition to his health care plan?).

In the course of anwering the question he deftly avoids directly calling the police officer “racist”, but does call him stupid in the course of tying the officers actions to what he sees as racist treatment of blacks by police officers.  It’s a safe situation, or so he assumes.. it ALWAYS worked in Chicago, and it’s a he-said, she-said situation with facts that could be bent according to the right political shading and according to the emotions of the moment.  Sure he was a bit glib and lacked care in his words, but that was never a problem before.

Yet, dear president forgot or didn’t realize, a couple things.

  1. He’s not in Chicago anymore.  whereas 75% of Chicagoans might agree or not care enough about an issue like this, the rest of the country is not nearly so compliant.  yet, even here Obama may have calculated this into his equation.  There remains enough yuppie, white-guilt to support him on this issue in many neighborhoods whether or not the facts seemed different, and his hard core supporters routinely believe any sort of feverish conspiracy theory – so long as conservatives, the police, the military, etc are the authors of whatever atrocity they want to believe.
  2. The officer had a mic on during the exchange….

This last point is likely the most important of them in the aftermath.  Obama’s half apology would never have come, whatever the outcry from the right if the mic and a tape of the exchange did not exist.  My guess is that the mic tipped the balance, leading the fool to issue his half apology.

So here’s the situation now.  A deliberate error to change the subject led to a bigger unforced error that makes the press conference an utter wasteland for Obama.  No greater support for the health care package, lower support for the “post-racial” President who can’t seem to stop viewing everything with a racial lense.

For the opposition, well, the real lesson is to keep up the heat – and, indeed, to intensify it.  This is not a man who deals with pressure well.  Put the pressure on now and make it clear that Congress has to begin treating him as the lame duck in the equation -sooner rather than later.  In any case, I’d rather the crisis of confidence for this empty shell of a man come now from domestic battles rather than later in the context of a foreign policy crisis.

Watch the inventories

July 22, 2009

I disagree with the NBER’s statement that the recession began in 2007.  While it’s true that there were recessionary indications (high price of oil, a weakening employment situation, and an inverted yield curve), the economy continued to grow.  In large part because of the dollar’s decline, a change that fueled exports and gave an incentive for foreign manufacturers to build plants in the United States.  Because of this growth was fairly robust, especially in Q2, it’s hard to justify calling the positive GDP in the first two quarters of ’08 a “recessionary” period.  I wouldn’t be surprised to see this changed at some point in the future.

The problem with them getting that wrong is that it is indicative of how people have misinterpreted much of this recession.  I believe that a key area where people lack understanding is in how important Inventory control has become in the economy.  When a few people decide to stay home and not buy a VCR at Best Buy that has a ripple effect that reaches across the world.  Last fall when a LOT of people were freaked out and decided not to buy things it had a huge impact.  How does this work?

1.  today’s businesses want to keep as little inventory around as possible – for finished goods that is the VCR on the shelf at Best Buy, for instance.  For all of the suppliers that make that work, it is the boxes the logistics company uses, or the components that come together to make the VCR.  Behind that it is the raw goods that go into making the components.  It’s a long, interconnected chain most of which has been converted to Just-in-Time thinking.  What this means is that when an item is sold at the end, it initiates a chain reaction that tells the VCR maker that they need to make another VCR, and the component makers they need to make more compenents, and so on back to the raw good producers.

2.  What happened is that this interconnected system allowed businesses to cut back and “unwind” faster than at any time in the past.  Instead of seeing a decline in GDP and employment over a 6-12 month period, we saw deeper and harder cuts in a 3-4 month period.  Because this happened quickly the GDP took a double-effect from this.  Inventory declines are treated as a negative go GDP – so even if people are buying things, those purchases are a negative to the GDP – because they were produced in a previous period.

3.  And Inventories have been cut at an unprecedented rate.  When people started to shop again starting really pretty early in ’09, inventories started to decline.  While these numbers are seen in the consumption reports, they remain a negative in GDP.  Indeed, in some areas companies cut too far and too fast – Best Buy had items that they ran out of during upturns in sales on particular weekends.

I don’t know that this type of interconnected system always reacts to big, unexpected events.  To be fair, at the end of ’08 there was a lot of fear in the air (much of it produced by the campaign), so  it’s hard to cast blame at a company who cuts deeper than needed – it was a panic and they were trying to do their best to protect their companies.  Now that inventories are being drawn down, companies will have to go back to the business of making and delivering goods again.  It doesn’t mean that we are back on easy street, but it does mean that some of the doomsday scenarios haven’t come true.

However, while the economy was busy recovering, the government was busy creating additional, future hurdles for the economy to overcome – the stimulus package, the likelihood of higher taxes, the possibility of inflation or an overly tight fed and the fear and uncertainty around Cap&Trade and National Health Care are all things that this economy is now prepared to absorb.    If people want a robust recovery, they should push to kill all of these things – even the unspent money from the stimulus could be returned without great harm.  In my mind, these things are the difference between a 3-4% growth and a 1.5% GDP growth.. which is what I expect to see if Obama gets his way on the economy

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