Naturally I disagree with much of the opposition and my well-meaning colleagues on the left in regards to Keynes and his school of economics. Many in this school of thought cannot accept the fact that Keynesian economics has never worked; it did not work in the depression nor has it worked any time since then. The only time stimulus has “worked” is after the economy has already recovered and then becomes overheated by the stimulus. Keynesian economics is an excuse for politicians to buy off special interest and voters with other peoples’ money. Let me address some of the opposition’s specific points:

Stimulus spending creates jobs

False, stimulus spending financed by taxes substitutes relatively inefficient government spending for private spending. In other words, government spending “crowds out” private spending. The opposition may disagree that public spending is less efficient but the recent analysis of the government spending does not support their point of view.

It is not taxation but debt that is financing the government spending

I maintain that government debt crowds out private borrowing and investment. Many of my anti-capitalist colleagues say that government spending is not crowding out private investment because interest rates are low. Therefore there is plenty of money to finance private investment. Unfortunately, in an attempt to protect depositors, and the government guarantee of such deposits, the bank regulators have increased the credit underwriting requirements on banks. Consequently, they are not lending to small and medium sized businesses.

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Is it possible to be pro-immigration in this country and still support the principles of the State of Alabama’s immigration laws, dubbed some of the strictest in the nation? Absolutely. Sound paradoxical?

Not at all.

Being pro-immigration shouldn’t mean that you are an advocate of illegal immigration. It just means that you are sympathetic to the needs, dreams, and goals of those who come to our country to make better lives for themselves and their families. Try looking at it from their perspective; imagine if all you were trying to do was make a better life for you and your family. You too would do whatever it takes to make that a reality, and that’s all they wish to achieve. People can have these dreams and come into our country the right way, coming up with solutions to stop or slow the influx of illegal’s will help allay the belief that illegal immigrants are stealing American jobs and degrading our society.

Yes, the state’s laws are tough, and in some cases, questionable, as in one provision that requires students to document their immigration status before enrolling in school. The fact that less than 10% of Hispanics failed to do so in recent weeks shouldn’t come as any surprise, if you believe that close to 10% of Alabama’s Hispanic population is here illegally. I don’t know the exact number in the state, but it’s not as if no one of Hispanic origin showed up to school that day.

I hate to continue laying America’s toughest social problems – the economy, moral compass, immigration, etc. – at the feet of this President and Congress, but it’s ultimately their fault. (more…)

We are one of the world’s leading brokers in markets for commodities and listed derivatives. We provide access to more than 70 exchanges globally and are a leader by volume on many of the world’s largest derivatives exchanges. We are also an active broker-dealer in markets for commodities, fixed income securities, equities, and foreign exchange. We are one of 20 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York.

This quote is what investors read in MF Global’s Prospectus Supplement in August 2011. MF Global issued $325 million of 6.250% 5-yr senior notes that month. The deal was led by Investment Bank Jefferies and co-managed by Investment Banks Bofa Merrill Lynch, BMO Capital Markets, COMMERZBANK, Natixis, Lebenthal & Co., LLC, Sandler O’Neill + Partners, L.P. and US Bancorp. I provide this backdrop because you have to see that, once again, those who have a fiduciary responsibility to protect investors failed.

The banks on this deal are underwriters of securities who are obligated to perform due diligence on the issuer (MF Global) to protect investors. I have no doubt that the bankers performed their due diligence on the objective facts about the company: e.g. financial statements, management background, market share, customers, etc. But did the bankers adequately assess the character of MF Global’s management? Is it possible for a banker to protect investors from managers with impeccable credentials who are willing to take reckless risks with other people’s money?

Rating agencies, rating agencies, rating agencies. Sounds familiar huh? Moody’s, Fitch, and S&P once again did not meet their fiduciary responsibility to investors. How can a bond deal be executed in August and the company file for bankruptcy shortly thereafter? Like the bankers, the rating agencies surely did their analysis on the objective data. However, can they warn investors about reckless management?

The facts are on October 25th, Jon Corzine stated he was confident that MF Global would successfully manage its $6.3 billion exposure to European debt (Spain, Portugal, Belgium and Italy). Yet one week after a failed attempt to sell the company, MF Global filed for Chapter 11 bankruptcy on October 31st 2011.

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Novembers during off-election years in Washington, D. C. are typically pretty serene. The autumn colors stream up and down Georgetown by the Potomac, while lawmakers gingerly ease into the holidays, knowing full well the next year will have them in complete campaign mode — not so for 2011. In their infinite wisdom following a contentious budget showdown just a few months prior, Congress and the White House silently swore they didn’t want to face that political debacle again. So 523 elected “responsible” lawmakers surrendered their roles as committee chairs, appropriations cardinals and oversight hawks to an intrepid 12 colleagues to begin the work they so eagerly avoided. That shifting sound you hear is our Founding Fathers turning over in their graves.

The die is cast, and for reasons I will explain, there is ample evidence that leads to but one conclusion: For the good of the Congress, the President, and the nation writ large, this band of 12 can not fail. To be clear, it’s entirely possible the Joint Committee on Deficit Reduction can fail to meet its mandated purpose of recommending reductions from $1.2 trillion to $1.5 trillion from the federal budget by Thanksgiving. That’s a tall order. But they must not fail if we expect our governing institutions to retain what little credibility that remains among them.

The first casualty of an empty Super Committee is our nation’s economic health. Set aside for the moment the sheer need for austerity. If the panel were to miss its mark, economic chaos could ensue. Moody’s Investor Service has already lowered our nation’s stellar credit rating. And just last week, the credit house said that, while no downgrade is automatic, the Super Committee would serve it and Congress well by tackling big budget busters such as entitlement reform. Put another way, Congress should get out of its own way. Not long ago, Democrats led by the President blamed consumer demand as the key inhibitor to economic growth in 2011. Then Republicans piled on and said it was looming uncertainty that paralyzed investors and businesses alike, freezing precious capital. Even Obama later subscribed to that reasoning. So why is it now, when they are singularly responsible for that very uncertainty, they refuse to execute the steps to end it?

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If you haven’t already, take a gander at a column authored by former Treasury Secretary and Clinton economic adviser Larry Summers in yesterday’s Washington Post.

In it, Summers contends that to truly turn around the nation’s housing market – a key economic indicator and driver – one must, in effect, double down on the sector, spending more in both public and private dollars.

“The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending,” argues Summers, “it can be resolved only with more confidence, borrowing and lending, and spending. This is true, above all, of housing policies.”

That’s just dandy. True to the dogma of his former boss, Summers apparently believes we haven’t done enough damage to the housing market through Freddie Mac and Fannie Mae, and Uncle Sam needs to be more involved in driving home construction and sales.

That is best carried out through financing, he posits. “[C]redit standards for those seeking to buy homes are too high and too rigorous,” Summers argues. Uhh, can someone quickly get him a history book and turn to the chapters from a few years ago where the housing market began to collapse? The reason wasn’t tightened credit but the exact opposite. Our lending institutions sponsored by the feds such as Freddie and Fannie were practically giving loans to anyone who asked for them – senseless amounts of money with little-to-no credit backing to vouch for the security of the loans. (more…)

Last week’s GOP presidential debate hosted by Bloomberg and The Washington Post at Dartmouth College continued to reveal an emerging storyline of this election cycle. A few observations:

Herman Cain continues to impress. This guy has moxie, folks. He knows what he believes and why he believes it. One attendee in the audience last week told me Cain has a presence when in the room, and there’s something refreshing (if cavalier) about his approach and the way he argues his points. There were a few slip-ups, but overall, it was a solid performance, and his trajectory continues to rise.

Some seem surprised that Herman Cain is now the frontrunner, but it make perfect sense. What Cain represents is something that has been severely lacking in political leadership, and that is common sense. Interestingly enough, the vast majority of people in this country still have a modicum of common sense, which explains why his poll numbers continue to rise as more people become aware of him. Many politicians appear to have some common sense when they first go to Washington and than rapidly lose it due to the influence of special interest groups, including organized political parties. If Mr. Cain can resist contamination by traditional Washington influences, he may prove to be just what our nation needs for restoration to greatness. (more…)

Every five years, the National Agriculture Statistics Service (NASS) conducts a “Census of Agriculture” that includes a snapshot of America’s black farmers–how many, average farm size, sales, etc. Since 2007 was the last year the census was conducted, election year 2012 will give us our next best picture of how agricultural communities generally and black farmers in particular are managing through the economic downturn.

Because the 2007 agriculture census was conducted before the economy began to slide, it is probably safe to say that what we think we know today may not necessarily be true when fresh data becomes available. At the time of the census, there was plenty of room for optimism, though.

The numbers showed that the U.S. farming and ranching population was becoming much more diverse and the number of black farmers and ranchers was on the upswing. Blacks have a history of small business entrepreneurialism in this country, and farming and ranching represent a natural entry point for them. Because their enterprises are smaller, however, economic shocks put them in a more precarious position financially.

Having grown up on a tobacco farm and worked at the U.S. Department of Agriculture, I can tell you that the concerns that keep black farmers up at night are not unique and are shared by farmers of all stripes. Aside from some specific issues of discrimination, black farmers worry about access to capital, pray for a little luck with the weather, and wish for a more predictable regulatory environment. High levels of uncertainty translate into a lack of investments and lack of jobs on the farm, just as on Wall Street. (more…)

Regarding our country’s current fiscal issues, Republicans are right to draw a line in the sand. We have an obligation to say “no” to tax increases that do nothing to either stem or support the profligate, big-government spending favored by the Democrats. Unchecked government spending is a road that, if traveled, will further plunge our nation into economic anemia due to massive debt and uncontrollable entitlements. This malaise, Democrats will argue, may only be solved by “redistributing wealth” through back-breaking tax increases that will erode the spirit and principles that distinguish our country, leaving only a shadow of its past greatness. That is what is at stake; the stakes have never been higher.

Conservatives cannot allow Republican lawmakers to soften or defect on the party’s fundamental principles, or worse, align with those who are diametrically opposed to everything the GOP stands for:  free enterprise, reasonable taxes, limited government and tort reform. Yes, tort reform — and here’s why.

Ignoring tort reform has been devastating to taxpayers, the economy and American business. The U.S. is the most litigious nation in the world; it weakens us competitively and lessens respect for America’s legal system in the eyes of the world. The question isn’t how this critical issue fell from our sightlines to the sidelines. The question is: Why have we permitted trial lawyers to worm their way into our ranks to undermine GOP priorities and the party itself?

In state capitols across the country, there are legislators who proclaim to be conservatives yet block lawsuit reform. A look at just a few states quickly reveals several examples of Republicans who align with personal injury lawyers. (more…)

There were a lot of things wrong with the presidency of Bill Clinton. I would have much rather preferred a second term of Bush 41. But comparing the Obama presidency to Clinton’s accomplishments of the 1990s, and it’s easy to see why the travails of President Clinton were good “problems” to have.

I never thought it would come to this. I never imagined a time post 2000 when I would actually lament a return to the past. But here we are, facing a recession as deep and even longer than the one in the early 1990s. A recession that ushered in none other than the Comeback Kid – President William Jefferson Clinton.

His was a presidency that brought us DNA samples; Don’t ask, Don’t tell; school uniforms; and wagging fingers regarding a certain intern.

But set all that aside (if you can), and recall some of the fiscal successes of his presidency, and it’s easy to long for those days again.

Yes, the United States enjoyed years of growing surpluses during the Clinton presidency – many of which could be attributed equally to the Republican Congress – but pair them together, and it’s easy to see why the country could use another Bill Clinton in place of the current Oval Office occupant. Here’s why:

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One of the virtues I discuss at length in my new book, Reawakening Virtues: Restoring What Makes America Great is the virtue of saving. It’s interesting these days to see the ongoing debate over the Federal Budget deficit and debt. On the one hand, some are calling for cuts in what many consider to be essential social programs: Social Security and Medicare. On the other hand, some believe that the Government should either go deeper in debt to cover the rising costs of these programs, increase taxes on the wealthy and business, or make cuts to other parts of the budget such as defense. All of these approaches have their supporters and detractors but the fact remains that the underfunding of social security starts and ends with the problem of saving.

Let’s be clear. Social security is not an entitlement program. That is, unlike welfare and food stamps, the people who receive social security have contributed to the program over the course of their working career through payroll taxes specifically designated for the purpose of saving for retirement. They are therefore owed at least the amount of money they contributed.

However, problems started to arise when the Federal government, under both parties, began borrowing from the so-called Social Security trust funds to spend on other items in the budget. The trust funds are not like your traditional private trust funds that are fully funded. In fact these trust funds are empty. The government has borrowed every single dime that comes into the trust funds to spend on current expenditures. We have a problem now because our total national debt is approaching (and may have exceeded) our yearly gross domestic product. Most countries that have this level of debt do not enjoy the high credit rating and low borrowing costs that America currently does.

If we continue to use short term borrowing to fund long term investments we will soon run into trouble. Just look at what happened with the investment banks Lehman Brothers and Bear Stearns. They borrowed in the overnight markets to fund their investments in highly illiquid long term securities. When some of those securities plummeted in value, so did the value of their collateral. Thus, they were faced with a situation in which they needed to borrow money just to stay afloat – but they did not have the asset values to back them up. Each firm collapsed within a week of this situation becoming public.

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I’ve always wondered what makes Jews so successful.  Always a minority in each country they’ve inhabited (with the recent exception of Israel), Jews are disproportionately represented among the most wealthy, powerful and accomplished citizens in the world today.   They’ve done this despite a millennia’s long history of persecution and oppression.  Why have they achieved so much, while other groups facing similar conditions have failed to raise themselves out of poverty?

Many American blacks point to the election of Barak Obama to the highest political office in the land as a triumph of the civil rights movement.  And in many respect it is.  The eradication of de jure discrimination has opened unprecedented opportunities for middle class blacks to achieve their highest aspirations.  On the other hand, the majority of blacks in America have succumbed to the worst social pathologies: high poverty, unemployment, crime, broken families, and incarceration rates that greatly exceed other races – even controlling for education and income.  When these statistics are pointed out, black intellectuals and activists usually blame the persistent effects of racism for the plight of the masses.

But is this really true?  Both Asians and Jews – who have achieved disproportionate success in this country – also share a history of racial discrimination.  Many of them came to this country with nothing, and have managed to dig themselves out of poverty.  The difference really comes down to values.

One episode that brought this home was when I was lounging on my couch late one night and flipping through the cable channels. It’s remarkable that with so many channels these days – there’s never really anything worth watching.  But I happened to turn to a program documenting Jewish mobsters in America.  Some of these guys were ruthless killers and degenerate thieves.  But the thing that stood out about them is that they never raised their children to grow up to be mobsters.  Some of their families had absolutely idea what they did for a living, and assumed that they were just legitimate businessmen.  Others helped out the more legitimate members of their family by paying for their education and investing in real estate and other legal businesses.

Right after the show on Jewish mobsters ended, another program began.  It was about a black family from Arkansas that took over the drug trade in Detroit.  Like the Jewish mobsters, the black criminals displayed a similar level of violence and cunning.  Like the Jews, they started out dirt poor; they also preyed upon their own kind.  However, there was one striking difference.  The black mobsters stayed in the ghetto where they peddled drugs.  They never invested in the education of their other family members.  In fact, when it became obvious to them that the law was closing in, they didn’t leave.  They stayed and ultimately got arrested, even though they had amassed millions and could have gone anywhere in the world.

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