Newspaper logo

ECONOMIC AND POLITICAL ANALYSIS:

Thinking About the Presidency

by Fred Cederholm

Cutting interest rates to promote more debt is no solution to a solvency-based problem. This only weakens the U.S. dollar.
I’ve been thinking about the Presidency. Actually I’ve been thinking about Super Tuesday, “the six,” messes, the U.S. Dollar, banking, energy, debt, deficits, and choices. Tuesday, February 5 marks our first real “national” primary election, when voters in 22 states cast their ballots/caucus in the selection of candidates for the 2008 Presidential race. On the Demo side there are two choices, and on the Repub side there are four. All of the candidates want the office and are spending fortunes to get it, but the desire(s) leading their quest run the gamut—greed, power, ego, money, vision, a permanent place in history, agenda, service to self, and service to others.

Why would anyone subject themselves to this process?

You see, there is more to being President than living in an incredibly historic home, having an army (literally and figuratively) at your beck and call, and traveling in a style unimagined by mere mortals. Also, there are quirky titles of honor: “Mr.” President, Commander-in-Chief, and Leader of the Free World. Our next President faces challenges, crises, and messes literally unseen since 1776. Our future, our way of life, and our Constitutional liberties are under assault like never before—and that includes the darkest days of either the Great Depression of the 1930s or those of WWII.

Why would any rational (sane) individual want to assume such a huge leadership burden? Because whoever wins this Election of 2008, loses... and they (with their families) will pay a huge price.

Since August 2007, the economy has surpassed the stagnating military actions in Afghanistan and Iraq as the hot-button campaign issue of 2008. There is good reason for this. The U.S. economy has been fluffed/hyped beyond all rational recognition. Daily revelations of some new crisis are, one by one, undercutting the smoke, lights, and mirrors behind the illusion that all is well. Our mythical GDP (Gross Domestic Product) has at its core increased consumption, not increased production. The “real growth” has been triggered by cheap money, plastic money, increased debt, and the illusory paper profits from bubbles. All seems fine—only as long as minimum payments are being made and foreign $ugar daddies continue their willingness to hold the U.S. debt and continue to assume more.

The weakening U.S. dollar continues its hegemony as the world’s reserve currency only because no other currency is “big” enough to replace it. Besides... what is truly gained merely by substituting one fiat (debt-based) currency with another? Cutting interest rates to promote more debt is no solution to a solvency-based problem. This only weakens the U.S. dollar and makes it less desirable to hold as a store of value. Which of “the six” candidates holds the answer/solution?

With hats in hand, investment banks now go begging for bailout capital in the Middle and Far East—not to fix problems mind you, but merely to buy more time before the ultimate day of reckoning.
The worldwide financial network is tottering on the brink of collapse. What is the real value of what they hold, or continue to market, as “assets?” Investment banks and financial advisors have sold a bill of goods that is unraveling before our very eyes. With hats in hand, they now go begging for bailout capital in the Middle and Far East—not to fix problems mind you, but merely to buy more time before the ultimate day of reckoning. Which of “the six” candidates holds the answer/ solution?

Our debt/deficits now project themselves out into infinity. This will continue (and escalate) as long as we as a nation buy more than we sell in the global markets, depend on ever-increasingly-costly imported energy to fuel our toys and our economy, and pursue a profligate and bellicose foreign policy to police the entire planet. Which of “the six” candidates holds the answer/solution?

The Tuesday primaries are about change and choice. But... change for change alone is no solution. Have candidates even identified the problems, much less addressed them in plans? They all claim to have “ideas,” but what are they? Talk and clichés are cheap! Which of “the six” candidates holds the answer/solution?With hats in hand, they now go begging for bailout capital in the Middle and Far East—not to fix problems mind you, but merely to buy more time before the ultimate day of reckoning. I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.


Copyright 2008 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.


Copyright © 2008 The Baltimore News Network. All rights reserved.

Republication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent.

Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.

This story was published on February 4, 2008.