Iraq

In 1926, Winston Churchill said: "I hate Iraq. I wish we had never gone to the place". The irony is that he had invented the country, along with British Petroleum - now BP, to ensure that the Royal Navy would have a reliable source of oil.

He also said that Americans can always be counted on to do the right thing...after they have exhausted all other possibilities.

Senator McCain's victory in the Florida primary bring us a little more hope that America will do the right thing in Iraq.

I don't believe that we should have invaded Iraq in the first place. Saddam Hussein was contained - at a reasonable cost - and, as it turned out, the intelligence claiming that there were weapons of mass destruction was wildly inaccurate if not fictional.

The problem is former Secretary of State Colin Powell's "Pottery Barn Rule". If you break it, you own it. We broke it, so now we own it.

While we are not going t0 be able to fix it, I do believe that we have a moral imperative to stay long enough to give the Iraqis the conditions under which they can develop a solution for themselves and the time to do so. Leaving abruptly is likely to result in chaos, ethnic cleansing, civil war, excessive Iranian influence or any combination of these things.

Senator McCain understands the issues and the others probably do. The others, however, are pandering to the "peace at any price" crowd. Just so long as that crowd understands that the price is likely to be very high: for the Iraqis and for us.

One more year...

Last night President George W. Bush made his last major scheduled speech (State of the Union) to the nation and the world.

That gives him a final year to act as President of all the people and offers him a chance to leave office with a better reputation than Jimmy Carter or Warren Harding.

Should he remember what he said when he took office, he - and we - are likely to be better off:

"America, at its best, matches a commitment to principle with a concern for civility. A civil society demands from each of us goodwill and respect, fair dealing and forgiveness....Civility is not a tactic or a sentiment. It is the determined choice of trust over cynicism, of community over chaos. And this commitment, if we keep it, is a way to shared accomplishment."

George W. Bush
Inaugural Address 2001

I was an enthusiastic supporter then. Now, I am greatly disappointed.

Economic stimulus... or something

Given the speed at which Congress and the President, Republicans and Democrats alike, have reached a consensus that the economy needs a stimulus to avoid recession, we must ask whether any of them know what they are talking about.

The last time that the government sent out random checks, nothing much useful happened. The time before that, in the Carter years, everyone laughed.

H. L. Mencken famously said: "For every complex problem, there is a solution that is simple, neat, and wrong." I strongly suspect that the politicians are living up to his expectations.

The first question is whether we are headed towards a recession in the first place. If we accept that a recession is on the horizon - or maybe even here - then the second question is whether we should be trying to avoid it.

There is an excellent argument that recessions serve a purpose: in this case to unwind some of the distortions and imbalances that have appeared in our economy. We have homeowners with no equity, and ugly looking loans, who would have been better off renting rather than speculating in real estate. We have consumers who spend like crazy and have no savings for a retirement that is likely to be longer than they have anticipated.

We have too many people who have forgotten that the advertisement said "buy now, pay later" not "buy now and refinance for ever."

And if the government is going to hand out checks to all, how much of this money will simply be spent on imports. That will hardly stimulate our economy but will certainly increase the debt that our children and grandchildren will have to pay.

I sympathize with those who will suffer through a recession. Some were deceived, not always intentionally, by the financial industry; others were just ugly greedy. Some were simply stupid and a fair few are going to be innocent victims. Whatever the reason, they will all suffer.

The problem is that trying to avoid a maybe recession now will only sow the seeds for worse later. Better, then, that we have a small and fairly short recession now (if that is what is facing us) than a deep and long one later.

Anyone remember the inflation of the 1970s and mortgage interest rates of 20%?

Introduction

As we head into a USA election year, I am feeling overwhelmed by the shouting and slogans which seem to substitute for thought.

This blog is my response.

I hope to have a reasoned and civilized dialogue with any who care to join in and are willing to accept that it is possible to disagree without being disagreeable. Ronald Reagan understood this well.

I intend to skewer hypocrisy and intellectual dishonesty. Living in the Washington DC area makes picking targets hard - there are so many.

I am a self described Liberal. But Liberal, using the 19th century definition, means that I believe in freedom but not license, the smallest possible government (more later on this subject) and social tolerance.

I also believe in a strong defense (Theodore Roosevelt had something when he said: "speak softly and carry a big stick") while attending to Dwight Eisenhower's warning about the military-industrial complex. Another description of my politics might be Goldwater Republican: strong defense, balanced budget, socially tolerant.

I have training as a scientist and as an economist. I am a business finance and general business consultant. I am a sceptic but not a cynic. I am totally curious and, when I was a kid, really wanted to know everything that could be known. Unfortunately I was born 200 years too late for that.

Remember that we are entitled to our own opinions but we are not entitled to our own "facts".

Let us begin...