Two Essays on Healthcare, Food, Energy, and America's Selective Needs For Choice

Healthcare and America's Selective Needs For Choice:


The recent media and political brawling regarding healthcare reform illuminates how selective Americans are regarding their right to choose. Intense lobbying by the healthcare industry has convinced many Americans that they will forfeit their right to choose their healthcare plans and that Obama will have us all on the public option. The fascinating part is that amidst all of this backlash against reform, there couldn’t be many Americans who have not felt intense fiscal impact from the skyrocketing premiums which rise seemingly endlessly on an annual basis.


Not even energy prices have risen at such a rapid rate yet when oil prices went through the proverbial roof two years ago, Americans were clamoring for opening up Alaskan Wildlife areas, offshore oil drilling, and any other type of reform that might even marginally bring down their energy bills. Yet they are adamantly against reforming healthcare even though such annual costs are rising 10-39% a year depending on where you live. No single other cost in my budget is escalating at that pace. And I know I am not alone: all business owners will tell you that increasing healthcare costs are a massive burden on their balance sheets.

Underlying all of this mass hysteria is the notion that Americans, especially rabid Republicans, simply don’t want Government telling them what choices to make. Yet this is hardly a universal decision.

When it comes to food consumption, the government not only tells us what to eat, it virtually forces us to consume the goods it, along with the whims of the clients of hords of lobbying firms, thinks you should consume. You might find this hard to believe but let’s examine the issue.


Every five years, the government announces a massive farm bill. It is the mother-load trough for agri-business firms to eat from: huge subsidies are in the offing. How does this work: factory-animal-production companies and big agri-business corporations higher lobbyists who in turn ‘convince’ our elected officials to shape the farm bill so that the lobbyists’ clients benefit the most. The government in effect takes large swaths of Americans’ tax dollars and says to big agri-companies “Produce more corn and we will give you a subsidy”. By taking dollars from all of us and giving it corn producers to grow cheap corn, the government is essentially saying we should all eat corn. Because corn is so cheap, it is now used in everything given scientists have figured out how to manipulate corn into endless food products.


Corn is also at the heart of why meat is so cheap in the supermarket: factory-animal farms figured out that feeding animals cheap corn was less costly and more efficient from a profit perspective than feeding those animals grass. Michael Pollan and Jonathan Saffran Foer have written excellent works on this issue so I won’t dive any deeper.


Suffice it to say, the right to choose what I eat has long since been stolen by the government. What if I want tax dollars to be spent bringing more farmer’s markets-type veggies and produce to where I live in Brooklyn? What if I don’t want my tax dollars being spent on so much corn and so much animal slaughter? When I go into the supermarket, I look around and I don’t see products on shelves but instead I vehicles for cheap corn and soybeans to be pumped into we Americans. Does the government think we will be healthier eating all of this petroleum-based corn and soy instead of on morally grown fruits, vegetables, and maybe humanely produced animal products if some of us have to eat meat?


Like with our forced spending of tax dollars to make certain foods cheaper, the government tells us what energy sources to use. The petroleum industry for years has reported record profits while at the same time receiving enormous amounts of tax payer dollars in many different forms. By offering the current energy market participants such incentives, the government is forcing us to consume more and more coal and oil because they are the less expensive energy sources. Clean energy companies face an unfair playing field against the ingrained normalcy of current policies. Yes, Arhcer Daniels Midland and other big agri-companies have benefited from tax subsidies for clean energy too. But the scales are still not inline given the many soft costs not incurred by big energy and food producers. These costs have been previously documented as well so I won’t go into them.


My larger point is why are Americans so outraged about potential changes to the obviously broken system of costs and premiums to their healthcare choices and yet they don’t care about such equally large choices regarding energy and food for which little debate occurs?


Personally, I am outraged that my government spends so much of our tax dollars recklessly supporting companies to bring corn, soy, crude oil, and coal into my world when I would like those very tax dollars to be spent on organic produce and animal products with humane production standards, biofuels, and clean electricity.



Energy Balance of Food vs Ethanol: Rethinking Human Energy Needs


I would like to explore another oddity about the American mind regarding food and energy specifically. I often am asked a very nuanced question by ‘average’ folks when I tell them I develop clean fuel projects: They ask, “Ethanol, doesn’t it take more units of energy to produce ethanol than the amount of energy produced when the ethanol is used?” I am always amazed at how self-congratulatory they are to themselves because they think they’ve got me. My rebuttal, however, often causes them to pause instead: “How much energy does it take to produce unit of energy from petroleum?”, I ask, to which they generally have no idea. So how can they ask me about the energy balance of ethanol when they have nothing to compare that to? I mean, for all they know, it could take twenty units of energy to produce one unit of oil energy! When they realize they don’t have a clue, the absurdity of their question becomes clear, even without me answering their initial question.


This got me thinking about how selective Americans are about when they care to be inquisitive about the energy balance for the energy they consume. And then it clicked: my entire life, I have always separated food and energy into two separate categories. But they should be viewed in such a way at all!

Food and fuel for your cars or electricity for your home are all what we could consider to be total energy inputs that we need throughout each day, each month, each year of our life in order for our lives to be what they were. Think about it: you wake up, you put food in your stomach to get the body moving (along with coffee maybe?), you then get in a car which needs fuel to move you to where you need to go, and eventually return home which needs electricity and other key inputs to keep you with shelter. Throughout our day, we consume water endlessly, and more food doubtlessly, etc.


What I realized is that only ask this question about energy balance when it comes to ethanol! Why don’t people care that the pineapple from Costa Rica which they just bought at Whole Foods required 57 units of energy to produce every one unit of fuel for their stomach.


I argue that a massive shift needs to take place about how we view the ‘fuel’ we need to survive. It comes in myriad forms from gas to apples to water. Our consciousness needs to view energy efficiency uniformly across all of those different fuels for living that we consume each and every day. Instead of holding ethanol to higher standard than petroleum, let’s compare how much energy went into the production of units of energy across various products. I think Americans will be shocked to learn that the energy balance of most of what I am calling our overall ‘fuel’ sources (meaning food and energy combined) is actually quite abysmal and definitely much worse than ethanol! Start thinking about the energy balance of bringing you that cheese from France or that Mango from India or that artichoke from California. Mostly likely, it took way more fuel to make that life fuel than that life fuel gave you when you consumed it.

Healthcare Debate, Cash-for-Clunkers Truth, Congress, and Investing Overview

As I look back over the past three months since my last writing, the major themes resounding in the public seem to be anger over apparent Obamanomic Socialism and the headwinds surrounding it.

Firstly, it is very alarming that so many liberals have so much anger towards Obama. The other day, a friend told me about a conversation they had with a die-hard liberal who, when my friend brought up Obama, simply stated forcefully "Don't talk to me about Obama!" Where does this vehemence swell from? It's as if pent-up anger that had been suppressed through fear tactics during the Bush era is erupting against a President who actually encourages debate.

This general malaise of rabid critique affecting the country is best seen through the lens of healthcare reform. Citizens across the country view this reform as government doing some massive disservice to the country. Yet, I suggest that EVERY American has seen their costs for healthcare skyrocket in the past decade, well beyond the costs for almost every good and service! I can attest that at my last employer, the best deal the business manager at the school could land each year was an 18% cost hike for our coverage as teachers. To put that into perspective, at that rate, my costs would have doubled ever 4.5 years roughly! That is insane. What's even worse, now that I work for myself, my private health policy monthly premium shot up an astounding 37% in year for similar if not reduced benefits! As a small-business owner, healthcare costs are one of largest costs on the balance sheet with no end in sight to escalating costs. In light of this, it is difficult to understand how Americans can be so opposed to some form of overhaul.

I also feel the anger towards Obama is misplaced: remember, our elected representatives in Congress VOTE on every proposal that passes! This was true with Bush's war in Iraq, this was true on Bush's bank bailout freebies, and this was true with Obama's stimulus package. Our collective frustration should be with the very members of Congress whom we voted to office and not directed at the President. In the end, the bill that Democrat Bauccus put forward today does NOT include key components of Obama's plan and the final bill that passes after the Republicans have their way will probably look very unlike the plan from the White House.

On the other hand, there is misguided support for the Cash-For-Clunkers program, which is by far the most socialist policy thusfar, and one that was voted in support of by Congress. The market and the government wanted to spur the economy so they gave people $4500 to buy a new car. To do so, however, they had to kill the perfectly good car (even if slightly less fuel-efficient) they already owned. Because of the recession, I just had to sell my car, yet now my tax dollars are being given to someone else to buy a new one? In this line of inquiry, my laptop just died which is integral to me doing my job: why isn't the government giving me $500 to buy a new laptop and scrap the old one (instead of simply having me spend a mere $250 for a new hard-drive)? And now we read that the government will unveil a Cash-For-Old-Appliances program to spur new purchases of fridges and ovens. What occurs is that these subsidies fast-forward purchases by consumers who would otherwise push off big-ticket items until the future when they might be able to afford them on their own. If people buy cars and appliances in 2009 that they would have bought in 2010 or beyond given they already had working solutions, who is going to buy in 2010?

The markets cheer these subsidies because "coincidentally" retail sales exploded this past month, based on the jump in auto sales, go figure. This allows the cheerleading squad of Ben Bernanke and media to declare the economy is on the mend. Yet, the consumer is retrenching, savings rates are soaring, debt is being paid down rather than seeing new goods purchased, the unemployment rate continues to rise, foreclosures on adjustable rate mortgages are still occuring at significant rates, banks aren't lending but instead hoarding cash, and the purchasing power of the dollar has been getting killed precisely because of the policies of elected and non-elected (Federal Reserve). So where is the evidence that the consumer is going to be able to spend to pull the economy out of the down-trend given consumer spending is a whopping 70% of our economy?

It is laughable that Obama is pegged as a socialist when it is Congress who votes on these policies. It is Congress who established the policy of spending our tax dollars to help buy new cars, it is Congress who enacted the stimulus bill and bailouts (along with the Fed), and it is Congress that will end up overhauling healthcare.

Finally, on the investing side of this synopsis:

As I said, gold and silver have been racheting higher (on inflation concerns), commodities like oil have rebounded. I was incorrect on the dollar over the past three months as I thought it would strengthen from near-term deflation, but I am still betting that. I also argue that although the markets might continue to rise in the near-term, it has risen to far too fast and should correct down to at least take a breather. I am shorting the euro and the major indexes. I am also shorting gold and silver in the near-term although I think the longterm outlook for both is still very strong.

Please take action either politically or economically to ensure the next generation of Americans is protected and given room to follow their dreams. Good day.

Mid-Year Global Financial Overview

I want to update on many of the positions I have been developing over the past 18 months: 

The media and officials from the Fed and US Government have been goading investors to believe the worst of the financial crisis has come and gone. I am far from convinced about that hypothesis for myriad reasons. Although residential real estate prices have been falling less quickly than in previous months, many of the purchases being recorded are foreclosures and much of the mortgage activity has been refinancing at artificially low rates. Furthermore, there has been significant deterioration in the commercial and industrial real estate markets as job losses and facility closures have lead to low occupancy rates, mall closures, and manufacturing declines. The loans backing those markets have been bundled precisely like what was done in the residential markets and I foresee further bank write-offs coming in the next 6-12 months. Likewise, the American consumer is beginning to default on credit card loans, auto loans, and to some degree student loans, many of what have also been packaged and sold to investors. The ramifications of rising delinquencies could lead to increased pressure on the banking system. 

In past posts, I argued that the US Government rescue would merely lead to a reflation in asset prices of homes and the stock market because of Quantitative Easing which is flooding the market with dollars. As it has played out, the stock market has surged, led by banking stocks which have benefited from a FASB rule change which effectively allows them to hide potential loan losses from the balance sheet if the bank itself deems those write-downs to be 'temporary'. Consequently, banks announced record earnings and their stocks soared. 

Against this backdrop of collective elation is the reality that as I argued, the US dollar has reversed course from its rise as a 'safe haven' asset and has plunged to recent lows against the Euro and the Pound. Commodities have rebounded, especially crude oil which I had said was grossly under valued at $33/barrel and now stands above $60/barrel. Gold has been consistently staying strong and has been approaching highs above $1000/ounce. Silver has been performing even better. These markets are indicating that fiat currencies are being debased by central banks world wide and that hard assets continue to be valued given long term projections of demands from increased populations. 

Although the US Government has committed unprecedented funding to quell this crisis, I am not of the opinion that the March 9 lows won't be revisited. The stock market may continue its rise into the coming months but I would position yourself to benefit from upcoming corrections back towards the lows. 

I have been long: gold silver, the Brazilian Real, the Swiss Franc, the Australian dollar, short the dollar, long oil and other commodities, emerging market funds like EMF and TDF, closed end income funds like EFR for their dividends. 

In the short term, I think the dollar will find some strength, treasuries might rebound from increased Fed purchases, the Brazilian Real might take a breather from its massive rally, oil should correct down after moving too quickly, and emerging markets should drop at least temporarily. Commodities should run into some Resistance when future bad news about the banking sector re-emerge later this year. 

But the long term picture seems clear: inflation-protected bonds (TIP), floating rate bond funds, commodities, gold/silver/copper, dollar short, US treasuries fall leading to increased interest rates are where I will be positioned. 

The toughest call will be timing when inflation begins to set in here in the US from the Quantitative Easing policies. Deflation may persist for longer than expected. But my bet is that our Central Bank will not know when to increase interest rates in order to decrease the money supply which has been so inflated now. 

Good luck.

Potential in China for The Largest Single Write-Down in History

I am writing today regarding the ongoing debate about the US dollar as the reserve currency of the world, quantitative easing, and a thought I have been developing about a potentially devastating move China could make. 

There has been growing concern from Central Bankers around the globe about the safety of their investments in US Treasuries. China alone holds almost $700bn in such investments and has been very vocal about a) their dissatisfaction with US monetary policy which is viewed as debasing the dollar along with the value of China's US bond holdings and b) proposed a new global currency which wouldn't be affected by any changes in individual countries' policies. (See Article)

To reiterate the cause for concern: although the media is not spelling out the problem, it is evident to the substantial players: when the US Fed announces it will 'purchase' ~$1 Trillion in US Government bonds and other types of mortgage loans, what it is really saying is "The Fed will print dollars out of thin air which it will use to buy real assets". That is how they 'expand the money supply. Those freshly invented dollars are given to sellers of the assets, who then have more dollars to invest with. This is what is called Quantitative Easing. England, Switzerland, and Japan are doing it too. Just today, the Treasury of England announced that in a federal bond sale today, not enough buyers came to the table to buy all of the bonds England was offering (See Article). If that begins to happen in the US, the Fed will have no choice but to turn the printing presses on full tilt. 

This brings me to China's huge potential move: it is no secret that China feels boxed in when it comes to US Treasuries. If it stops buying US debt in the form of Treasuries, the US consumer won't have credit to buy cheap Chinese goods which would hurt China's exports further and it would cause the value of Treasuries to drop, from less demand. That would hurt China's own reserves, given, as noted above, China owns such a large pile of such US debt. China, however, also realizes that the US is indeed using quantitative easing which is devaluing the value of those holdings anyway. 

For some perspective, though, realize that of China's total reserves of ~$1.9 Trillion, only $694 Billion is in US Treasuries, or roughly 33%. What if, in one fell swoop, China made the decision to free itself from the bonds of its holdings in US Treasuries and did one MASSIVE write-off, just like banks do when they sustain losses which then allow the bank to move forward. 

In this scenario: China's reserves would instantly lower to $1.2 Trillion, not a paltry sum by any measure, the dollar would get crushed pushing up the value of other currencies measured against dollars, the US would be on sale because the value of US assets would be dirt cheap in Chinese currency terms. I argue that China could easily make up its $700bn loss in treasuries a) because the value of the remaining $1.2 trillion would probably increase given it is in other assets and b) China could then scoop up US assets at pennies on the yuan (their currency). They would be free from the burden of holding depreciating US debt and could instead invest directly in consumption and production in their own country, rather than be held hostage by the US consumer-based economy. If they coupled this will allowing the yuan to float freely and rise probably 40%, China would find itself in the drivers seat of global consumption and purchasing power. 

I recognize this is a very out-of-the-box idea which I have not read in any media outlets. But given the climate of global write-downs, it is an idea I think the Chinese could consider, although it would have devastating consequences on the US. The world's largest single write-down could be in the offing. I certainly don't want to be a Treasury bond holder these days. 

Foreigners Might Not Want Our Debt

There is more evidence that foreigners increasingly are skittish at best about buying US debt. I have been following this story because of its pertinence to the structural problems I have been commenting on: the US issues debt in the form of Treasuries which US and foreign investors buy for 'safe haven' shelter from the tumultuous asset markets world-wide. Those borrowings allow the United States to fund the difference between what it spends and what it earns via taxes and other mechanisms. We have been living on the world's largest credit card and we are seeing the world's appetite to extend us more and more credit lines begin to decrease. 

See article

What does it mean when foreigners are net-SELLERS of our debt? For years, foreigners have been net-buyers of our debt, meaning as a whole in a given month or year, more treasuries were purchases than sold by foreign investors. We have relied heavily on their net-buying, especially from China and Japan, to fund our wars, our budgets, and our 'way of life' through access to cheap credit in the form of auto loans, credit cards, mortgages, and school loans. 

As we foreigners shift gears and begin to be net-sellers of our IOU's, it means that there is growing discomfort with the attractiveness of the seemingly 'safe' status of US Treasuries and therefore US dollars as well. The Bush and Obama Administrations combined will have issued a flood of Treasuries into an already flooded market. It seems inevitable that eventually countries will seek to use their flows of capital to invest in their own countries rather than lend it to US citizens and government who eventually, if not already, will be tapped out. 

Please see my last post regarding another measurement from the market which shows cracks in the US's credit integrity. It is not about conspiracy theories. More so, I am merely following the empirical data that are publicly available. 

Many will point to the recent strength of the US dollar as being a reasoning that reaffirms the world's belief in the dollar as the Reserve Currency. And yes, the fact is it still is, but the arguments in currency circles for dollar strength are certainly not based on glowing reviews of the US economy. As one article put it, the dollar is the least ugly of the bunch, when comparing it to the Yen, the Euro, the Pound, and others. It is true that Europe has significant problems and the UK is "done" in the words of Jim Rogers, the famed investor. In the end, however, the issues of US debt sales running into resistance is akin to a sliver of a crack in the Hoover Dam and must be monitored. Why? Because all of the hard-earned dollars and assets held in dollars like homes which your family has worked tirelessly to accumulate stand in the balance. Understand in no plain terms, over the last 100 years, the value of each dollar has lost 92% of its value. Please make decisions accordingly. 

Thank you. 

Protection Against a US Default on Its Debt Got More Expensive

Read Article

An article today detailed the rise in the costs to protect one's US Government issued bonds. It was once inconceivable that the United States government might default on its debt, like Russia, Argentina, and countries in Asia have in the past. Yet, there is a growing bet in the derivatives market that is pointing towards exactly that. It now costs $97,000 to protect $10mm in US debt which may not sound like a lot. But also realize that amount is 7 times or 700% more than what it cost to protect $10mm of US debt just one year ago. 

The reasons that the companies who are selling the protection (akin to an insurance policy on your bonds) for higher premiums is that the market is perceiving a growing risk that the US government might default on its debt obligations. Although a default is still semi-unlikely, it is apparent that the actions of the US Government to take on the risks of the private sector are shifting the debtload onto the US tax payer's account. 

A default by the US Government on its debt would be disastorous for the value of our hard-earned dollars. I will continue to follow this story line. 

An Update on AIG, Pensions, Quantative Easing, Mark-to-Market Accounting, and the Fear of Bank Nationalization

Today's piece is an update on the US Government's continued bailout of AIG, the deterioration in US pensions, the use of Quantitative Easing by an increasing number of governments globally, and a potential rule change that could allow banks to further manipulate numbers to falsely inflate the prospects of their viability as ongoing concerns. This analysis is part of my ongoing interest in the substantial structural problems facing the US economy. My final conclusion, while inflammatory, is that US citizens such as bank executives and government officials have done more to destroy the livelihoods of American taxpayers via excessive risk-taking and deregulation than any terrorist organization has thus far via attacks on the US, including 911. 

The US Government recently announced an increase in its bailout of AIG for a current total of $170+ billion so as to ensure that taxpayers have a greater shot at being paid back by keeping AIG afloat. The real reason is the fear of the tremors that will reverberate through the financial system should AIG fall. Why? As noted in a recent article, AIG had an unregulated 'Financial Products' unit that was run basically as a hedgefund. It participated in what is known as the Credit Default Swaps market and took bets totalling over $300bn, in which companies could buy protection from AIG against other companies defaulting on their bonds. If the latter companies did indeed default, AIG promised to pay the original companies the equivalent values of the bonds insured in return for premiums paid by those original companies to AIG. In turn, AIG paid massive bonuses to the executives running this unit and profits at AIG grew immensely. Those executives are now gone, after pocketing immense sums in salary and bonuses, leaving the taxpayer responsible for preventing mass contagion and deterioration in the system at large. The threat is that if AIG goes bankrupt and can't stand behind those CDS agreements, countless numbers of those 'original' companies that paid AIG for protection would have to book further losses on their own balance sheets, exacerbating the deterioration in perceived health of many already ailing banks and other institutions. Therefore, endless taxpayer dollars will be pumped into this 'zombie' institution to prevent this, even after AIG announced a $60bn quarterly loss! That is staggering that a company can lose that much, and a total of $100bn+ over five quarters and still be standing. (See Senate article)

The most recent comedic aspect of the AIG fiasco is that the megalomaniac ex-CEO of AIG is now suing the 80% US taxpayer owned company which he built over 40 years, claiming that AIG inflated its stock price and fraudulently inflated the value of his deferred retirement compensation package in which case he is due the difference between the inflated price and 'fair value' for the shares. Does he truly believe he had nothing to do with the rogue actions of his 'baby'? If he is successful, where does the litigation end? Can all ex employees of companies like Bear Sterns, Lehman, and others sue the companies on like terms, even after years of said employees pocketing enormous bonuses and salaries? The US taxpayer should have to pay not a dime in such circumstances; as it is, we are paying handily for bets gone wrong. There is not an entity in the world that would bail out a gambler for going to a casino and making huge bets that went sour in the same way as the taxpayer is being forced to do now. (See article) 

Another major issue that has surfaced again this week is the shortfall of private and public pension funds. I first wrote about this topic a couple of years back in relation to the fiscal deterioration of the Pension Beneficiary Guarantee Corporation which is an agency that picks up the tab, again with taxpayer dollars, when a company fails to meet its pension obligations. A recent Bloomberg article exposes the accounting tactics utilized by pension funds to artificially hide their shortfalls on their obligations and estimates that there could be a further need for up to $1 TRILLION in taxpayer dollars to bailout the pensions in the US.

Bloomberg Link to this story

Finally, as the US continues to expand its policy of Quantitative Easing, or simply printing dollars, Japan and Britain have announced similar measures in an effort to battle deflation, or the fall in prices of assets because of lack of liquidity for buyers. The end result of these policies is the potential for governments to excessively print their currencies to flood the system with liquidity which would temporarily artificially push the prices of those assets back up. This is another crack in the structural problems with the global fiat currency system. I ask the question again: How do we value one currency v.s. another currency if we don't know how much of each currency is in circulation? (see article)

Finally, a congressional panel will review easing the current 'mark to market' accounting rules which govern financial institutions (see article). These rules require that financial companies once a year state the value of their assets based on current market prices and are intended to give the public an accurate view of what the values of the banks assets are if they had to be sold today as opposed to simply relying on models produced by the banks themselves estimating the value of assets on the balance sheets. The fear was that those institutions might announce values that were optimistically inflated beyond their actual worth. Banks and other large financial concerns have been arguing that it is this very set of rules that has increased the veracity of the financial hailstorm facing the US and the global economy, and that banks should again be allowed to value their assets based on internal models of what the assets will be worth in the future and not what they could be sold for today. I agree that many of these institutions' assets would be worth more in the future than the zero offered by the market, given there are no buyers for the toxic portions of many institutions balance sheets. But I am far from encouraged by the prospect that banks can be trusted to  to value their assets properly given their executives' predispositions for greed and balance sheet manipulation to extract excessive bonuses. 

If the government does announce an ease to mark-to-market rules, financial institutions will leap for joy as they won't have to post further collateral against the currently falling values of their assets, making their balance sheets look far healthier than they really are. It will be a victory for the very sector that is holding the US taxpayer hostage and take away one of the only tools for transparency into those institutions balance sheets. This lack of transparency will only delay the inevitable structural challenges from coming to fruition, which is in line with the other actions taken by government to 'stem the crisis'. 

This final point raises the issue of nationalization: fiscal conservatives are chattering that Obama wants to nationalize banks, and fear the slippery slope of 'what will the government take over next?' and 'is this a Hugo Chavez Venezuela?'. Let's be clear, these institutions would simply have exploded into oblivion with every worker fired and bankruptcy courts' dockets filled to the brim. Is that really what free-marketers want? Is that truly the better alternative? For all of the employees of Citibank, the prospect of nationalization is far better than simply being fired en masse. Ask them. There is no way these entities could have survived through the very disaster they helped create and benefited from over many years. Simply put, any claptrap about Nationalization is unwarranted and inappropriate when it is the taxpayer bearing the brunt of the carnage. 

I will continue to post essays in attempts to demystify the processes afoot in the US and around the world. It is my belief that many of the structural problems are a result of deregulation to the detriment of the taxpaying public and are leading to the deterioration of the US economy. Underfunded pensions, taxpayer bailouts, printing of dollars, job losses (which rose to just shy of 700,000 in Feb) are highlighting gross mismanagement of funds as some would view it, or negligence derived by greed as others see it. Either way, the systemic challenges the US faces are the results of actions by US citizens primarily (executives in tandem with government officials) and are doing far greater damage to the 300 million American taxpayers than any act thus far by terrorist groups. The internal greed that has greased the wheels of the US is doing the dirty work for Osama Bin Laden and other terrorists. What need do they have for another 911 when forces within the US are doing it for them? The Dow is currently at lower levels then after September 11, 2001 and the subsequent stock market crash. No terrorist group could destroy the value of the US dollars that have been saved by hard-working Americans as effectively or efficiently as the officials in the US government itself. Yet, it is those very officials who want the American public to believe that the main threat to the American way of life is terrorists seeking to harm Americans through violent means. Although it could be argued that the actions of our government aren't actually killing Americans (although more US citizens have been sent to their deaths in Iraq than perished in 911), I am sure there are hundreds of thousands of Americans who have lost their jobs as a result of the financial crisis who would tell you they are suffering far worse now than after 911.