Tag Archives: Obama

The Bloody Dance of the Red and the Green

I will remember 2016 for the times I outraged people when I said the biggest danger facing the world today is a flaw inherent in our most advanced stages of development. This affliction festers under the surface of Western countries that are centered in or moving into the Egalitarian Green Value system. While most of the virtues of Green seek harmony and the restoration of our ecology, its Achilles’ heel lies in its inability to see the murderous intent and the supersized ego of the Red system. Red is hell-bent on destruction if it doesn’t get its way. It stands tall and makes statements like “after me the deluge”, or “I alone can fix it’. Through field applications, we have seen not only the blind spot that Green has for Red, but its defense of it when it victimizes it and blames its misery on the current system of establishment rules. Today, much of the Western world is suffering from Green fatigue, and, sadly we still refuse to acknowledge our blindness to a Red menace that is taking hold of the world and placing it on a very dangerous path.

When it comes to Red, the Green pattern of thinking goes something like this: If choking societal rules and Global standards of behavior were removed, Red will stop its killing and other insolent behavior and express itself fully so we can all live in peace and harmony. After all, it’s all about unrestrained non-judgmental self-expression according to the Green worldview. It is in that view that I find the biggest danger facing the Western World today. In my opinion it is the primary reason why Western cultures are moving to the right. Green Egalitarian ego that sees no value system hierarchy is like a blind virus that destroys all Second Tier efforts and prevents cultural emergence at the highest levels possible.

The danger from Red is no longer a perceived threat. It has worked its way into the White House and made the world more vulnerable in part due to President Obama’s naïve Green underpinnings. One of the hallmarks of his legacy is his policies that wound down the US’s role as an interventionist world power. After the disastrous Bush policies, Liberals around the world hailed this as a new and evolved era in world diplomacy. So much so Obama was awarded the Nobel Peace Prize in 2009 barely 10 months into the job. This would’ve been a global evolutionary trajectory if the entire world was centered in both the strategic-scientific Orange system and the egalitarian-humanitarian Green system, but alas, Green sees no hierarchy and no evil. slide5Like the Europeans who granted him the award, the President understood that no more world police meant that competing powers around the world have the right to self-expression regardless what stage of development they were in and whether that stage poses a danger to world security. Military might was associated with our savage past and on to the Post American Century we marched. Dialogue and (perceived) mutual respect replaced sanctions and military threats. The signal to Red was clear: the US will no longer stop you from whatever savage activity you want to initiate.

Green mistakenly sees Blue as a foreboding and rigid hierarchy and a hurdle that unfairly stops Red. It doesn’t realize that more than 40% of the world lives under RED Life Conditions and that Blue is their next and most important stage of development. That is the power of institutions that form the cornerstone of modern culture, not the individual Red ego that leaves it vulnerable to destruction. Transition from Red to Blue has historically been the toughest transition in human history. Green doesn’t grasp that when you dialogue with Red and dangerously closed theocracies (False Blue) like Iran, the big stick, a militarized inspection task force, the Sixth Fleet, and a formidable military have to remain the ominous specter watching Red’s every move. These are the necessary conduits that keep Red on the straight and narrow path towards Blue. With Red, you can’t threaten with consequences, you promise punishment and the immediate delivery on that promise. You arrest Mullahs who prevent you from preforming inspections. You bomb Russian columns if they don’t heed the warning before they invade sovereign countries. Yes you have to be that tough with Red or the consequences will be frightening.

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In the absence of a big stick, Red leadership will immediately move to fill the vacuum created by Blue. It has a strong detector that immediately sniffs out weak Blue and propels it into action knowing there will be very little consequences. It acts impulsively without worrying about having to deal with the punishment. Immediate gratification, muscle flexing and acts of heroism are what matters. When the consequences come they are dealt with not through corrective evolutionary actions but with more coercive, Blue-busting lawlessness.

It is no secret that the biggest Red threat to world security today is Russian leader Vladimir Putin. Before you begin to angrily color him in higher value systems, pose the same questions that Dr. Graves posed to his subjects to determine their true value system center of gravity (COG). Ask WHY? Find that person’s most visible actions and the reason for taking them and you will quickly come to the answer. Mr. Putin’s COG is Red and all the other intelligences he possesses are in service of his Red system.

Putin’s quick and brazen invasion of Crimea was the first defiant act in the face of a NATO shifting to Green. After the invasion President Obama and Secretary of State Kerry were quick to label his actions in terms like: “this is not 21st century behavior”. Then economic sanctions were imposed on the Russian people in the hope that Putin changes. Well, the Russian economy tanked, and Putin became more popular. His support for defying NATO has increased. He found kinship with other murderous Reds like Assad who also has a good detector for weak Blue and knows the US in its Post American Century will be nothing more than a punching bag for Red of all shapes and sizes.

Green doesn’t understand that the verbal reprimand given to Putin is a sign of weakness. It doesn’t understand that people like him Assad and the Ayatollah’s of Iran do not value the lives and the civil liberties of the people they govern as much as Green thinks. Sanctions are nothing but a hurdle to overcome through any means possible. Global Blue changing to Green means the disappearance of rules to them, especially when it shows signs of weakness.

Red never forgets and it will always look for revenge. The greater the channels and the resources, the deeper the damage will be. In addition to helping Assad flex his bloody muscles against his own people, Putin is taking his own revenge on Chechen Muslims who occupy the highest ranks in ISIS. He hasn’t forgotten 2004, the worst domestic terrorism attack in Russian history by separatists Muslim Chechens. Is the destruction of the entire city of Aleppo enough revenge for Red? Is a quarter of a million dead Syrians a fair price to pay to erase an ugly memory of insolence the Syrian people had nothing to do with?

We shouldn’t ponder these foreign policy questions too long, because Putin’s Red made it all the way into the White House and made things exponentially more dangerous. Driven by “never forgetting” and “seeking revenge” Putin set his eyes on someone from the old guard when it comes to US foreign policy, Hillary Clinton. Obama’s sanctions against Russia were never enough for her, which put her squarely in Putin’s crosshairs. Like the kinship he found with Assad, Putin found kinship with Trump. It was a venture to crush their common enemy regardless of cost because a Trump win will give both men unimaginable spoils.

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While a divided America continues to fight over whether or not the Russian hacking effected the election, we are forgetting something far bigger. The undermining of American democracy by a foreign power. Why has this issue been trampled over by both parties? Why is this cyber Pearl Harbor not causing bipartisan anger and street demonstrations against the evils of Russia? Why aren’t countermeasures being put in place to cripple Russian hacking once and forever? The answer is quite simple. To the Liberals President Obama’s statement “I told Putin to knock it off” is enough. It is as laughable to Putin as the President’s previous statement about Red not being a 21st century behavior.

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The Republicans on the other hand had all but acknowledged the party’s disarray in the Presidential election. In the party’s downshift to oblivion they have become Red obstructionists in Congress and were getting ready to perform another autopsy that will help them see the light when Trump The Redeemer appeared. There will be no further inward reflection for the Republican Party. It seems that it will stabilize at a COG of RED-to-outdated Blue with a special orientation towards corporate interest. Russian meddling didn’t just give Trump the Presidency; it gave the Republican Party a new lease on life. For that, Putin gets a free pass.

Speaking softly without the big stick has become a symptom of the disease that plagues the Democratic Party and allows for dangerous politicians like Trump and Putin to rise.

How long would Red leadership around the world continue to rise? Well, if the Trump-Putin ego flexing doesn’t get us into World War III the answer might lie in how quickly Liberals own their own Red and accept the notion that blind disregard to the developmental hierarchy is far more dangerous that the biggest thing Red can deliver.

The coming four years will give us an unprecedented opportunity to see if the Democratic Party can evolve. Not necessarily into Second Tier, but enough to realize that in a world that moves forward, its ideologies have become outdated. Blind Egalitarianism without accountability gives us Trump and the Tea Party. The new Democrats need to be as angry as Senator Elizabeth Warren. They need to see through the entire First Tier and articulate the corrosive effects of the values of the last 40 years when only money mattered. This will be an uphill battle that requires the meticulous building of a new Blue system that regulates smartly while awakening Orange’s conscious side that cares for its greater community and the planet, but above all, it needs to let Green know that it’s blindness to Red will no longer be tolerated.

 

 

 

 

 

 

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Zombie Banks and the Lessons of Japan

Japan’s “lost decade” has been a perpetual case study for economists and business schools alike. Keynes’ monetary policies, which have to do with the supply and the cost of money, never envisioned a decade of prosperity predicated on historically low interest rates.  As we entered this recession, that whole side of monetary policy should have been declared dead on arrival as the Fed lending rate had been very close to zero and money supply had been at unprecedented levels for many years. If the economic expansion leading up to 2008 happened while mortgage rates were at 8-9% in a reasonably chastened lending environment, then monetary policy would have been a very powerful tool for the Obama administration to use. The fact that the Obama team ignored this fact and gave banks more money at  0-.25% and not much borrowing or lending has taken place confirms the we are heading into the same trap as the Japanese.

The common global culprit that started in Japan in the 90’s ; call it the atrophy of Freidman’s free-market ENTERPRISE value system (Click here for an earlier value systems  blog explaining what investment means to the different value systems) was the shift from having monetary Keynesian policy (ORDER-value system economic tools for policy makers) being completely marginalized by populist consumer-spending policies. When that happened, interest rates had to be reduced to close to zero to maximize consumer spending. (Give money to all regardless of their value systems and see what happens). This process created unprecedented wealth as the consumer’s purchasing power almost doubled by the shear drop in interest rates. To the housing market, this caused meteoric rise of property values and achieved its intended goal of transforming homes into ATM’s. Japanese bankers exhausted the heck out of this model and created things like 40 and 50 year mortgages till there was nothing left to create. By the time the Japanese property bubble burst, the Imperial Palace in Tokyo was worth more than all property valuations in the state of California (now that’s what I call a bubble).

Japan’s banking sector suffers from what’s known as “Zombie Banks”. A phe.nomenon where there are lots of lenders but few borrowers. I’m afraid that’s where the US will be in another 2 years. The speculative FUEDAL/UNHEALTHY ENTERPRISE value system is still alive and well and is still driving much of the activity on Wall Street and at property auctions all over the country.  We won’t get a full picture of the damage, a stage called price discovery, till most of this speculative activity stops. Consumers falling into the HEALTHY version of the ORDER-to-ENTERPRISE value system on the other hand, are a wise and powerful bunch and have taken corrective measures to reel in their spending. This has been the only meaningful bright spot in a minefield of otherwise useless economic data in the past 18 months, AND THE BANKS HATE IT!

Homes need to become ATM’s again to bring banks out of their zombie state and that will not happen any time soon simply because property values haven’t bottomed out yet. As of the date of this blog, the total number banks that have failed in 2009 in the US stands at 140 and at the cost of tens of billions to the tax payer.  Once the dust settles, and the taxpayer’s thresh hold for FDIC-style bailouts is fully exhausted, public opinion will not support the role of banks being anything more than a utility.  Only when banks are sidelined in such manner through necessity will homes be used as places of residence again and not as a speculative investment vehicle and that will spell the end of a nasty adventure into ill-conceived economic policies.

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This is the Way US Manufacturing Ends…Not with a Bang but a Whimper

If President Obama were anything like FDR, he would have urgently taken to the airwaves today with his address to America sounding something like this:

“June 1, 2009 – A date which will live in infamy- Yesterday, the Nation buried an American Giant which alone is responsible for pioneering the modern industrial era…. But in the day where financial engineering has long taken over from industrial engineering, there will be little lamenting on the streets of America. Instead, there’s an eerily devilish dance taking place upon the grave of General Motors by its bondholders, for their derivative bets have paid off by sending this giant to its grave. These  out of control charlatans will soon announce record profits for themselves with the blood of tens of thousands of families on their hands…”

If you would indulge me a bit further, an FDR-like Obama would conclude….

“Today, America has lost its moral compass. On Wall Street, the rich hires the intelligent to export the job of the poor.  Then turns these same toxic tools against that very ladder that got us here. Today, I’m announcing the end of Wall Street as we know it. There will be no more flooding of America with cheap money and watching it become complaisant and bet on its failure. Today, I’m outlawing the entire practice of option trading from all stock exchanges and placing hedge funds under heavy regulation. The creation of financial derivatives of all kinds will be outlawed as well. There will be no more betting that urges us to fail so the few can collect Trillions from the hard earned wages of the many.  How many more American Icons would have to fall before Wall Street wakes up to its evil ways…..”

Much more would have been said, but this is 2009, and leaders fear the consequences of straight talk and the media that would have covered the event suffers from 2 things: 1. It is owned by Wall Street, and 2. It suffers from the worst case of Attention Deficit Disorder.

The legacy of GM is so intertwined with that of its founder Alfred P. Sloan, a genius MIT engineer and one of the pioneers of the American Industrial business model. So much so that MIT, Stanford and The London School of Business created their business programs based on his teachings. He is also known for having pioneered modern corporate finance. Things like rate of return (ROR) and return on investment (ROI)  are  standard parts of Finance 101 in every business school in the world today. But,what made Mr. Sloan unique, in my opinion, was that he never boasted about any of his accomplishments. For years he lived in the same apartment in NYC just a few blocks away from his office. When he’d visit Detroit, he would stay in a “sleeping room” upstairs at GM’s corporate offices. This is how good leaders are made to be great.  When GM filed for bankruptcy yesterday, the legend of Alfred P. Sloan and the story of American industrial innovation came to an end.

Yes, on this day after we buried what once was the biggest industrial giant in the world, the streets were eerily quiet. America has slowly been lulled to its own industrial death, and we’re too numb or too dumb to do anything about it.

Yes, on the day we buried GM, The Dow Jones went up 221 points and two Giants who shaped America’s twentieth century; Franklin Delano Roosevelt, and Alfred P. Sloan were turning in their graves. This is the way America’s manufacturing world ends. Not with bang but a whimper.

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