Thursday, April 30, 2015

"Hillary - Does Character Matter?"

                 Sydney M. Williams

Thought of the Day
“Hillary – Does Character Matter?”
April 30, 2015

Not wanting to leave the reader in suspense, the answer to the question is yes: character matters.

Fareed Zakaria recently wrote a column entitled, “Hillary Can Lift Her Campaign With Big Ideas.” His point: if Hillary talked of “big” ideas, such as investing in America and reducing inequality, people would stop asking about the burritos she ordered. No doubt she can talk about ideas, big and small. Anyone can do that. It is not “big ideas” that inform us about a person. It is small things; the way people conduct themselves on a day-to-day basis. That is what speaks to character. And there is nothing more important in a President (or, in fact, in anyone) than character – they comprise the moral qualities that determine who we are.

No experience can fully prepare one for President. Lincoln probably had less experience in the national arena before being elected than anyone before or since. It was his character – his principles, moral sense, honesty, judgment and wisdom – that allowed him to succeed when faced with the nation’s biggest crisis since 1787. While those character traits clung to Lincoln as though he were covered in Velcro, they slip off Hillary as though she were made of Teflon.

Hillary is ambitious and ambition is a positive trait. National politics attracts the ambitious. Any candidate who takes to the stump in a Presidential campaign assumes there is no one better qualified to lead than themselves. Victory is glorious; the job is stimulating, but it can also be inebriating. It is when ambition morphs into sublimity that we must worry; for such attitudes lead to arrogance and condescension.

The Clintons have become rich. The desire of individuals to make money is healthy. It is the fuel that drives a nation’s prosperity. But when people use their political careers and connections as a stepping-stone to wealth, it becomes cronyism and it is wrong. We have come a long way since Harry Truman was, with a pension of $25,000, offered lucrative corporate board seats. His response: “You don’t want me. You want the office of the President, and that doesn’t belong to me. It belongs to the American people and it’s not for sale.” We now have an ex-President who, during the time his wife was Secretary of State, made eleven speeches in foreign countries for which he was paid more than $500,000 each. Millions of dollars were paid into Mr. Clinton’s family foundation, again much of it by governments, the relationships for which Mrs. Clinton had responsibility as Secretary of State. Since Peter Schweizer, author of Clinton Cash, apparently found “no direct evidence” of any quid pro quo, Hillary supporters are bucked-up and the courts may be satisfied. But the Clinton’s behavior does not pass the “smell” test.

The Clinton Foundation is like most, in its eleemosynary concerns. But it has a higher expense and compensation ratio than most charities, and it had the dubious distinction of recently being added to Charity Navigator’s “watch list.” Unlike most family foundations, its funds have not come from moneys the family made. The money comes from a number of large donors, including individuals, corporations and governments. What makes the Clinton Foundation special is that the only reason to contribute is for political influence and access. To believe otherwise is naïve.

Hillary is a woman who years ago, under the guidance of her husband’s friend James Blair, counsel to Tyson Foods, turned a $1,000 investment into $100,000 in ten months. What are the odds of you or me being able to do that? The Whitewater scandal was so thoroughly whitewashed that it is only now mentioned by someone who must be a “right-wing conspiracist.” Subpoenaed billing records from her years at the Rose law firm in Little Rock disappeared and then mysteriously reappeared in the family’s quarters in the White House, but too late for the commission charged with investigating the transactions.

In more recent times, she lied about being under sniper fire on a 1996 visit to Bosnia. She lied about being broke when she and Bill left the White House in 2001. As Secretary of State, in contravention of normal behavior, she used a personal e-mail account for her official duties. And then, despite requests from House investigating committees, she decided on her own to not only delete thousands of e-mails, but to destroy the server as well. Had any of us, working in the private sector, done something similar we would have been fired. And she was (and wants to be) a public servant! This is the woman who lied about the chain of events in Benghazi that resulted in the deaths of four Americans. She lied to the families receiving the coffins at Andrews Air Force Base, and then she had the insensitive gall to tell the House Oversight Committee, regarding how the four men died, “What difference, at this time, does it make?” This is a woman who had the bravado last week to tell us she is running because trust is government is needed!

Mr. Zakaria is wrong. All politicians on the campaign trail promise any number of “big ideas,” knowing that most will never be realized. It is not “big” ideas that tell us about a person or how that individual will conduct himself or herself in office. We know what it means to elect a conservative or a liberal. We understand their policy differences. It is natural to support the one that most conforms to our beliefs. In a sense, the appeal of Hillary (as it is of President Obama and of Ted Cruz and Rand Paul) is a manifestation of James Madison’s concern about an “unfiltered” democracy, rather than a “layered” republic – that emotional, but ephemeral issues can sway an election. It is an appeal to special interests, not to the best interests of the nation.

Most politicians are decent people, trying to do what they can to make the country better. Most believe in the concept of public service; (though cronyism is a growing threat.) We may agree or disagree regarding respective policies. Getting policy right is important, but character is critical. Character knows no party. Will this individual put integrity ahead of personal gain? Can he or she be trusted? Do they have a moral sense? It isn’t what they say; it is how they live their lives. Consider two ex-Presidents and how they have lived their post-President lives: Bill Clinton and George W. Bush. And then think of which one the media adores…and despair for our country!


Democrats have placed all their eggs in one basket. Big money donors and the Democratic Party have a lot invested in Hillary, which makes it appear that Democrat primary voters will have no choice next year. That’s unfortunate. But I suspect that will change. The baggage Mrs. Clinton lugs around is, in my opinion, too heavy and will prove too damaging. That may reflect undue optimism on my part, but I suspect, as I’ve written before, she will concoct some excuse to quit the race. If she does, it will be because Americans have grown tired of an unprincipled charlatan.

Monday, April 27, 2015

"Greece - 'You Can Run, but You Can't Hide'"

                   Sydney M. Williams

Thought of the Day
Greece – ‘You Can Run, but You Can’t Hide’”
April 27, 2015

“Will she, or won’t she?” That is, will Greece, with a population of eleven million, abandon the Euro and strike out on her own, or will she just strike out? Will she default? Would there be collateral damage? It is not as though Greece is critical to Europe’s economy (her GDP represents less than 1.5% of the Eurozone’s GDP), but her exit could start a precedent – contagion is the word preferred by the cognoscenti. But the most important question: Why has this happened? Are Europe and the West also vulnerable?

Europe, along with much of the world, suffered a protracted recession in the wake of the 2008 credit crisis. Other than a brief interlude of little over a year, Europe’s recession lasted five years, from early 2008 through early 2013. (Greece’s GDP is still 30% below where it was in 2008.) But the troubles in Europe are more pestiferous than simply the aftershocks of a damaging recession. According to Eurostat, for the twenty years ending 2014 Europe’s GDP growth has compounded annually at a mere 0.35%. Europe’s problem is (and has been) a lack of economic growth.

Two factors have been principally responsible for this depressed state: First, Europe’s population is in decline. The advent of the “pill” around 1960 brought freedom and relief to women, especially to those in the West. Family size could be controlled. Postponed marriages and fewer children became options of choice. As a result, Europe now has a fertility rate of 1.6. (A rate of 2.1 is needed for populations to grow.) In Greece, the fertility rate for 2013 was 1.3, one of the lowest in the Eurozone. This is a long-tail quandary, not easily reversed. It will have increasingly negative consequences for future economic growth, as the number of elderly, compared to those of working age, rises. Immigration can help. But, as we know from the expansion of Muslim communities and migrants crossing the Mediterranean from North Africa, such solutions do not come without complications of their own.

The second impediment to economic growth has been the expansion of the welfare state. In the aftermath of World War II, after a decade of Depression and six years of war, a benevolent, democratic state was seen by Western Europeans as a welcome antidote to the Nazi and Fascist governments that had brought Europe to its knees. (As an aside, the dictatorial nature and murderous brutality of the Soviet Union was downplayed because of the role the Soviets had played in the defeat of Hitler. Yet Stalin may well have killed more people than Hitler. In electing Alexis Tsipras as Prime Minister this past January, Greece elected a former Communist and leader of the far-Left party, Syriza. Are lessons never learned?)

Without claiming cause and effect, a changed population mix has been accompanied by declines in civility and cultural standards. We see the latter reflected in attitudes toward families and lifestyles, including glorification of the self and its unintended consequences – the Kardashian effect, if you will: A focus on narcissism, spectacle and money. It can be seen in the substitution of institutional responses to humanitarian needs, rather than community groups and individuals. It manifests in a people concerned more about safety and comfort than risk and reward. It is a society that has become less tolerant and less civil. We see it in a political class that has become isolated from the masses – politicians and bureaucrats attended by sycophants. Some of these factors have been discussed by Robert Putnam in his books, Bowling Alone and more recently, Our Kids: The American Dream in Crisis. While Professor Putnam writes about the United States, the problems and their causes have applicability across Western Europe.

The welfare state was intended to relieve people from threats of starvation, house those without shelter and help those who were ill and/or old. It blossomed in Europe, in part, because defense was largely relegated to the U. S. Ironically, it is a perversion of the rigidly stratified 19th Century European aristocracy, when a small number of nobles (today’s politicians) lorded over millions of serfs (today’s citizens). It is based on the demeaning assumption that a sanctimonious elite knows best. Over time, it has emasculated the people it was designed to help. From the provision of services to the few evolved a sense of entitlement by the many. As the power of political leaders increased, that of the people waned. Its founders saw it as utopian – they saw a state nearing their concept of perfection, and marketed it as such. But it is paternalistic, encourages sloth and it discourages individual creativity, aspiration, risk-taking and investment. It is anti-growth.

Debt and the burden of future obligations are a natural outgrowth of the welfare state. Europe’s (and especially Greece’s) economy has grown less rapidly than debt has accumulated. Entitlements are a “third-rail” problem not limited to Greece, or even Europe. According to charts in Martin Wolf’s last Wednesday’s column in the Financial Times, the expansion of government debt has greatly exceeded growth in GDP. It suggests each new Euro borrowed contributes correspondingly less to real growth. Following the credit crisis, Europe adopted austerity. By austerity, they meant a government that would raise taxes and reduce spending. That didn’t work. Recoveries come about when spending expands. But that would have meant both raising taxes and increasing state spending. On the other hand, they could have cut taxes and reduced regulation. That would have allowed the consumer to lead the way out of recession, but would have risked encouraging free market capitalism, an anathema to high priests of the welfare state.

When Mario Draghi and the European Central Bank (ECB) decided, as expected, to invoke the Bernanke principle of quantitative easing, Europe’s equity markets rallied, and so did bond prices. But has QE done naught but put a band aid on a wound gushing blood? Are investors playing the “greater fool” game? Have we become so focused on the short term, both in terms of obstacles as well as solutions, that we can no longer see the forest for the trees?


“You can run, but you can’t hide,” is the title of a song written by Tom Keene in 1979 and is the title of Duane Lee “Dog” Chapman’s 2007 autobiography. But the origin of the quote is usually attributed to Joe Louis, who, while being interviewed in 1946 about an up-coming fight with Billy Conn, said, “He can run, but he can’t hide.” What Mr. Louis said about Mr. Conn then is true about Greece today.  The problem is not just that Greece may go into default and be forced out of the Euro. Theirs is a story of the perfidious effects of cultural and political paradigm shifts gone wrong – too low birthrates, an unsustainable welfare state, soured civility and the rise of a narcissistic culture. What is needed is a massive change in thinking – the appearance of a Margaret Thatcher, someone who will return opportunity to the people, give them confidence in the future, to work, take risk and invest in plant, equipment and jobs. Unless those fundamentals are addressed, Greece will prove a prelude, not only for Europe, but also for America

Thursday, April 23, 2015

"Common Core & Common Sense"

                     Sydney M. Williams

Thought of the Day
“Common Core & Common Sense”
April 23, 2015

“Now, what I want is, Facts. Teach these boys and girls nothing but Facts. Facts alone are wanted in life. Plant nothing else and root out everything else. You can only form the minds of reasoning animals upon Facts: nothing else will ever be of any service to them.” The speaker is Thomas Gradgrind. He is talking to two adults, the school master and Josiah Bounderby and to a class of students, each known principally by a number. The quoted sentences form the first few lines of Charles Dickens’ novel Hard Times. Today’s focus on STEM programs, Common Core and standardized tests – the robotic production of students – suggest that the 160 years separating the publication of Mr. Dickens’ novel and today have brought only limited change in the desire for centralized control and the unpredictable whims that are fundamental to human behavior.

The brouhaha over Common Core, and especially the standardized tests that will not only measure students’ achievements but will also be used to evaluate teachers, has reached a fevered pitch. On the “affirmative” side, there are those, like David Coleman, Bill Gates and Thomas Reville who are personally or financially invested in its success. Secretary of Education Arne Duncan and Thomas Donahue, president of the U.S. Chamber of Commerce have endowed the “standards” with the imprimatur of their offices. On the “negative” side is a patchwork quilt of opponents: individuals who object to increasing federal control over what they consider a “local” issue; unionized teachers who object to being objectively evaluated, and parents who see their children being tested at the expense of getting an education. The consequence is an odd assortment of bedfellows: Barack Obama and Jeb Bush cuddle on one half of the bed, while Randi Weingarten and Rand Paul nestle on the other side.

Everyone agrees that – with notable exceptions in wealthier communities – most public schools do not adequately prepare our youth for college and the job market. Twenty percent of high school graduates matriculating at prestigious colleges arrive in need of remedial courses in English and math. Silicon Valley has regularly complained that American high school job applicants do not measure up to their global competitors. Unionized teachers do not want to accept responsibility for educational inadequacies, nor do many parents choose to assume that behavioral problems of their children might have something to do with their home life. The federal government, always looking for tents under which to insert its nose, sees an opportunity. But Washington being Washington, they cannot do so in a straight forward manner. They disingenuously enshroud their real goal (increasing control and conformity) behind insidious veils of red herrings and euphemisms. They note that Common Core was designed by the National Governors Association (NGA) and is supported by the Chamber of Commerce, and (or at least it was once) by the two principal teachers’ unions – the NEA and the AFT. But the Feds have no objection to withhold moneys from states not in compliance, using a stick shaped like a carrot.

The federal government compounds the problem. In the interest of “fairness” and “equality” they want everyone to have the same education – a noble goal, but impossible unless schools become nothing more than manufacturing facilities where computerized instructors stamp out robotic-like students. Many politicians have never seen an inequality they didn’t want to quash. They make no allowance for differences in ability and aspiration. They ignore what George Will has called the effect of “curriculum conformity” on “parental empowerment.” They risk “extinguishing” what Mr. Will wrote is “federalism’s creativity.” Equal opportunities produce unequal outcomes.

There is, as mentioned, a problem with our public schools, but Common Core does not address its root causes, which are teachers’ unions. Unions play an important role. They allow workers to band for better pay, benefits and working conditions. But when bad teachers are protected at the expense of students, they do more harm than good. When seniority replaces meritocracy, good, young teachers tend to move on. When union rolls are fattened by administrators, expenses rise with little or no advantage to students and higher costs to taxpayers.

In free-market capitalism, supply side economics plays a critical role. It is how new products get developed. When Karl Benz produced the first automobile in 1888, he did not build it because there was a demand for cars. He did so because he made a bet that if he supplied such a product, buyers would come. When Steve Jobs announced the first iPhone in June 2007, he did not do so because of demand for iPhones. He did so because he gambled that innovative technology would create demand. Their successes were examples of Joseph Schumpeter’s “creative destruction.” But for every product that becomes successful, there are hundreds, if not thousands that fail. Most products that become successful are due to the creative spirit of people – individuals who are willing to bet their fortunes and their time on an idea. Apart from DARPA, the most important role government can play in product development is allowing people the freedom to garner success when it appears and to suffer disappointment and possibly bankruptcy when it does not.

Education is not that much different. It is funded, of necessity, by the people through taxes. There is persistent demand that grows with population. Innovation, however, evolves by responding to failure and to changes in knowledge and material. Competition takes advantage of such disjointedness. It is a driver toward change. Catholic schools once provided competition, but as their funding diminished so has their presence. Charter schools have become the new catalyst for change. However, like the first automobile it was not demand for Charters that caused the first to open; it was concern that the current system was not working. Today, demand exceeds supply, as the latter has been artificially retarded because of the financial and political clout of the AFT and NEA. Common Core is a bureaucratic response to the failure of traditional public schools.

I am a believer in good education. Success is based on meritocracy, not on one’s name, race, gender or creed. Students should be challenged and they should be tested. But first they must be taught. The amount of knowledge in the world doubles every year. There is no way any one person can learn all there is to know. Our youth must learn and understand the basics in English, mathematics, science, history, geography and the humanities. Common Core is a policy prescription forced on an unwilling buyer – one that makes little common sense. Teachers must impart the desire to learn – and to never stop learning. Education isn’t only about facts that Thomas Gradgrind was so intent on; it is teaching our youth how to access the information they will need for a productive career; but also for a life of learning – knowledge of our history, government and culture, and the joy that comes from an appreciation of art, music and literature.



Monday, April 20, 2015

"Remembering 1965"

                    Sydney M. Williams
                    April 20, 2015
                A Note from Old Lyme

“Remembering 1965”

“Without memory, there is no culture.
Without memory, there would be no civilization, no society, no future.”
                                                                                                                                Elie Wiesel (1928 - )

Several years ago, while selecting a telephone number for our home in Old Lyme, my wife was unable to obtain 1964, the year we were married. She was also not able to get 1966, 1968 or 1971, the years our children were born. So she settled on 1965 – the first full year of our marriage…and our last without children.

Our first wedding anniversary (April 11, 1965) was spent in Vienna. We had dinner that evening at Griechenbeisl, Vienna’s oldest restaurant, dating back to the 15th Century. About ten days ago, we had another Viennese weekend of sorts. Saturday we saw the movie, “The Woman in Gold,” a story of a woman living in Pasadena who, defying all odds, sues and wins back a portrait of her aunt (a painting considered the Mona Lisa of Austria). It had been stolen by the Nazis in 1939. The next day we saw Mona Golabek in her one-woman show, “The Pianist of Willesden Lane” in Hartford. Both the movie and the show are based on actual events; both worth seeing. The latter tells the story of Mona’s mother, Lisa Jura, a musical prodigy, who, at age fourteen in December 1938, was sent from Vienna to London. Her mother, whom she would never again see, said to her, as she put her on the train: “hold on to your music.” She traveled on the Kindertransport, by which 10,000 Jewish children were saved over a nine month period from almost certain death in Nazi prison camps. Lisa did, however, hang onto her music…and so has her daughter.

1965 began with us living in a small apartment in Durham, New Hampshire, with a bedroom so tiny that in order to get to the bathroom, one had to crawl across the bed. The year ended with us moving into a five-room cape in Glastonbury, Connecticut. My new job paid $6,500, about the median for a household that year. The house cost $19,000, about $5,400 above the national average, according to the U.S. Department of Commerce. Accounting for some of the inequality we read about, median household income has increased eight fold to $54,000, while home prices have risen eleven fold to $220,000. Adding fuel to the argument, stock prices, as measured by the Dow Jones Industrial Averages, are up twenty times, while GDP is higher by twenty-three times.

It was a year of protests that, while violent, had not reached the deadliness of the late 1960s and early 1970s. Civil Rights and Vietnam were the primary causes. While President Lyndon Johnson had signed the Civil Rights Act of 1964 the previous July that declared segregation illegal, Jim Crow laws remained in effect throughout much of the south. Voting rights were the reason for Martin Luther King’s January speech at Brown Chapel in Selma, Alabama, a speech given in defiance of an anti-meeting injunction. Two months later, 600 protesters marched east over the Edward Pettus Bridge. Their goal: a peaceful protest at Alabama’s capital in Montgomery. However, on the far side of the bridge, the marchers were attacked by state and local police, with nightsticks and tear gas. That same year race riots broke out in other cities, notably in Watts.

On the other side of the globe, the United States was becoming embroiled in what would become a twelve-year war in the jungles of Vietnam. The U.S. had been involved in Vietnam in a minor way since the defeat of the French in 1954 at Dien Bien Phu by Ho Chi Minh. But it was the White House-approved assassination of Vietnam’s president Ngo Dinh Diem in 1963 that caused the dye to be cast. It was not until February 1965, though, that America’s participation in the war intensified, when Lyndon Johnson approved Operation Rolling Thunder. This was an aerial attack on Hanoi and Haiphong, which began in June and had the objectives of destroying the North’s industrial and transportation base, halting the flow of men and material into the south, and raising the morale of the people in Saigon. It failed on all accounts. In November, the Battle of La Drang Valley in South Vietnam’s central highlands was the first major conflict involving U.S. troops, a battle that saw American soldiers facing an enemy as committed and as idealistic as were they. It is a story movingly told by Lieutenant General Harold G. Moore and Joseph Galloway in “We Were Soldiers Once…And Young.” The outcome was unclear, but by the end of the year, there were 125,000 U.S. troops in Vietnam. Anti-war protests intensified.

Those of us who lived through it will never forget the Northeast blackout, which occurred on November 9 and affected 30 million people. Oil was discovered in the U.K. portion of the North Sea. Rhodesia declared independence from Great Britain and became Zimbabwe. Malcolm X was shot and killed in New York City. In an act whose ramifications are being felt today, the Higher Education Act of 1965, which provided low-interest loans for students, was enacted into law. Warren Buffett gained control of Berkshire-Hathaway at $18.00 a share. (Today’s price of $212,982 represents a compounded annual return of 20.6%!) The Beatle’s, who had first appeared on the Ed Sullivan Show the year before, were, with the Rolling Stones, the year’s most popular musicians. Jerry Garcia and the Grateful Dead played their inaugural concert in San Francisco. The “Sound of Music” and “Goldfinger” were two of the top films. The Los Angeles Dodgers won the World Series, beating the Minnesota Twins in seven games. “Lucky Debonair” won the Kentucky Derby. And, hard to believe, Charles de Gaulle was then President of France.

As for my wife and me – I finished college in February. After lining up a job with Eastman Kodak, my wife and I, with $2,000, took off for eleven weeks in Europe. We had no plans other than a rented VW bug, and hotel rooms in Paris for the night we arrived and the evening before we were to return home. With Arthur Frommer’s book, “Europe on $5 a Day” and sleeping bags, we drove the VW throughout Europe. It was a delightful, belated honeymoon that neither of us will ever forget. Back home, following a four-week-long training session with Kodak’s Recordak Division I was assigned to the World’s Fair for two months. We lived at my in-law’s apartment in New York, until I was transferred to an office in Hartford.  There, we rented a room in an old-fashioned boarding house for about a month, until we moved into our cape. I was still in the U.S. Army reserves, but with traveling and moving, they didn’t catch up with me until the next year.


Thinking of those days half a century ago brings to mind Tennessee Williams’ observation: “Life is all memory, except for the present moment that goes by so quickly you hardly catch it going.” It is a message that resonates: when we allow each day to slip by unappreciated, we have no one to blame, but ourselves.

Monday, April 13, 2015

"Debt, Interest Rates, Price Fixing & Fear"

                  Sydney M. Williams

Thought of the Day
“Debt, Interest Rates, Price Fixing & Fear”
April 13, 2015

In a speech to business executives, shortly before he resigned as Chairman of the Joint Chiefs of Staff in September 2011, Admiral Michael Mullen was quoted: “I’ve said many times before that I believe the greatest threat to our national security is our debt…”

In his most recent “Grant’s Interest Rate Observer,” Jim Grant noted that for nine years, 1942 to 1951, the Federal Reserve kept the Treasury Bill yield at 0.375% and the Long Bond yield at 2.5%. “The object,” as he wrote, “was not to stimulate the economy, but to cheapen the cost of wartime…government borrowing.”

Excessive debt, as Admiral Mullen suggested, places a burden on future generations and limits our abilities to be proactive, whether it is fighting terrorists, educating our youth, feeding the poor or retrofitting bridges. Normalized interest rates would considerably burden an over-burdened federal budget. Projected borrowing costs on public debt are projected to be $250 billion in 2015, or 6% of the federal budget. Should rates return to their average of the last two decades, interest costs would more than double, putting pressure on such non-mandatory spending categories as defense and education.  For the five years through 2008 Fed Funds averaged just under 3.0%. Today they are one twelfth that number. A conundrum facing the Fed: Will they ever be able to release the controls they now have over the cost of money?

Since the end of 2008, the Federal Reserve has kept Fed Funds at 0.25%. During that time, the Three-Month Treasury Bill has never risen above 0.25%, and has spent most of the time under 0.10%. On Friday, it closed at 0.02%. By the end of 2009, the Ten-Year Treasury was yielding 3.8%, up from 2.2% at the end of 2008. In the midst of the credit crisis, in November 2008, the Federal Reserve began buying mortgage backed securities, easing the burden of homeowners. By June of 2010, with $2.1 trillion having been purchased and the economy looking a little better, the program was halted. In August, however, with the economy once again stumbling and deficits exploding, the Fed began its first round of quantitative easing, with a program to purchase $30 billion of Two-to-Ten Year Treasuries every month. Since then, the yield on the Ten-Year has averaged 2.5%. It closed Friday at just under 2.0%. The Fed’s balance sheet, which went into the crisis with about $900 billion in assets, now stands at $4.4 trillion.

Mr. Grant’s explanation for war-time price controls on interest rates has a familiar ring. We have, of course, been involved in a war against Islamic terrorism for almost fifteen years. While that has caused spending to increase, this war – unlike World War II – has not been the main cause of our ballooning debt. That explanation has to do with our welfare state, its growth and the costs it entails. The real reason for extraordinarily low interest rates, as it was seventy years ago, is more about easing annual federal deficits than helping the economy. Despite low interest rates, GDP growth, since the economy began its recovery in June 2009, has been the slowest in post-War history.

The price of any commodity has a number of components, the most important of which is supply and demand. Money is no different. Typically (and classically) when borrowing demand increases, prices (interest rates) rise. “Price fixing” can mediate those swings, which accounts for one of the Fed’s mandates – maintaining stable pricing. The price of money, however, is also subject to other factors, like fear. The fear of a credit collapse, for example, will send investors into the safest of all assets – very short term government bills. Borrowing costs for the U.S. government are low, while in places like Japan and Switzerland they are negative. Just imagine, lenders to the Swiss government will be receiving an annual negative return of 0.055% for ten-year paper! One has to ask, with returns so low, why are sophisticated investors willing to accept little or negative returns? The obvious answer seems fear – perhaps of the debt to which Admiral Mullen alluded; perhaps because banks too big to fail have become even bigger; perhaps, as Jamie Dimon recently suggested, new bank regulations encourage banks to rush to cover at the first sign of trouble; and perhaps because governments have allowed monetary responses to substitute for fiscal ones, suggesting administrative and legislative bodies have abandoned their responsibilities.

The obvious, but unsung victims of central banks’ easing policies have been savers – generally low and moderate-income seniors living on fixed annuities and the like, who cannot afford to speculate, and who have seen substantial declines in income.

The Fed, along with the Administration and Congress use the excuse that the economy needs stimulating and therefore rates need to remain low. They claim that the risk of current deflation out-weighs that of future inflation. Perhaps that is true, but the price of education and healthcare continue to rise. In Connecticut, we were hit with a 26% increase in electric rates at the beginning of the year. And, as mentioned above, low rates have done little to boost economic growth. One reason for anemic growth has been that demographically we are an aging population, with fewer people working relative to those that are retired. Another reason has to do with the deleveraging of the consumer from mortgage debt incurred in the run-up to the 2008 credit and housing collapse. But perhaps most important is the fact that both Congress and the Administration have largely stayed on the sidelines, in the sense that neither has addressed the complexities in our tax codes, nor the burdens in a regulatory process that is good for lawyers, but not for many others.

It is true that deficits have been declining, but they are doing so from high levels. The last seven years have seen the seven highest deficits in our history. The deficit for 2015 will likely rank as the eighth. In the meantime, total federal debt is approaching $19 trillion.


The real problem facing Americans has been a loss of confidence in the future. People see the country moving in the “wrong direction,” with neither Party providing an upbeat message for economic growth. In my opinion, the time in which we are living is reminiscent of the late 1970s, when we sensed the United States was on a downward trajectory. It took the sunny outlook of Ronald Reagan to shake the nation free of despondency – to bring “morning to America” again. In 2016, we must seek the candidate that can best restore faith in America – that the future is bright if we honestly face the debt problem that confronts us.

Thursday, April 9, 2015

"RFRA and Hypocrisy of the Left"

                    Sydney M. Williams

Thought of the Day
“RFRA and Hypocrisy of the Left”
April 6, 2015

The first thing about RFRAs (Religious Freedom Restoration Acts) is that they should be unnecessary. The First Amendment is clear: “Congress shall make no law respecting the establishment of religion, or prohibiting the exercise thereof.” The First Amendment has never been amended. How does one restore something that was never taken a way? Yet more than twenty states (including Connecticut where I live) felt the necessity to pass such legislation. One assumes it must be part of the American Bar Association’s “Full Employment Act.”

The real reason for RFRA, however, has to do with the ascendancy of other rights, some of which are incompatible with existing ones. Most of the time our rights live together harmoniously, but there are times when they conflict. Gay rights, for example, have increased in prominence, while religion (or at least the practice of it in the United States) has been in decline[1]. When a photographer refuses to photograph a gay wedding because her religion believes that marriage should be between a man and a woman, she is demonized by the media and political elitists, and is subject to law suits. The photographer is assumed to be acting in a discriminatory fashion. But we live in a pluralistic society where photographers should not be coerced to photograph a function they would rather not. Photographers do not have monopoly status. They compete for their business. And the couple has alternatives. If a photographer is persistently biased, his or her business will likely fail. Tolerance is, after all, (or should be) a two-way street.

Our rights were laid out in the Bill of Rights. The First Amendment protects our religious rights, as well as our freedoms to speak and assemble. The 14th, 15th, 20th and 24th Amendments protect us against discrimination based on race, creed or sex. In a majority of states, the rights of gays, including marriage, are the same as anyone else. Underlying our rights as individuals, however, is a foundation of communal social responsibility, decency and respect that can abrogate individual rights. For example, the right to speak out does not extend to yelling “Fire!” in a crowded theater. We can assemble, but we cannot block a fire engine from reaching its target. We have a right to petition government and the right to demonstrate, but that does not make it okay to injure someone because we are offended by his or her race, creed or sexual orientation.

If an action taken does not directly infringe on another’s rights, should that person be required to participate in a practice objectionable to their religious beliefs? If a lesbian baker refuses to make a cake for the wedding of heterosexuals because she finds one of them to be chauvinistic, is that a civil rights violation? Or is she exercising her fundamental right to serve whom she chooses? The history of this country is replete with examples of people freely exercising their religious beliefs, even when doing so risks harming the greater good. During World War II pacifists were allowed not to serve in a capacity where they would be required to take up arms against an enemy, even though they benefitted to the extent that their freedom to do so was defended by one who gave his life. Discrimination is wrong, but denying one’s right to practice his or her religion is also wrong?

The Left’s fixation on equality is too often underscored by political correctness. It is manifested in an intolerance that is at odds with their declared vow for tolerance. A Christian fundamentalist is automatically seen as a racist. Some, I am sure, are, but so is the accuser. Based on a fabricated story Rolling Stone found a University of Virginia fraternity guilty of sex crimes. The reporter, editors and magazine officers walked away unaffected. Too bad the same could not be said for those falsely accused. The Left did the same thing to Duke lacrosse players a few years ago, and more recently to a West Coast venture capital firm that was accused of sex-discrimination – a case that got tossed out of court as baseless. There was no remorse on the part of the accusers; they justified their actions based on the claim that their accusations brought attention to a problem deemed to be pervasive. That innocents got hurt was irrelevant.

Discrimination takes many forms, apart from the ones we normally associate with such behavior like race, creed, sex and sexual orientation. The Left has a tendency to categorize people by what they represent, rather than by who they are. Old white men are conservatives, as are Christian fundamentalists, high school graduates, gun-loving members of the bourgeoisie and anybody deemed to be stupid. According to their definition, the media, single women, African-Americans, the hip and young, minorities, teachers, college graduates and public sector union employees must be liberals.

It is why the Left cannot abide articulate Black conservatives like Ben Carson, Tim Scott, Thomas Sowell or Jason Riley. It is why they don’t like women governors such as Susan Martinez, Jan Brewer, Nikki Haley or Mary Fallin. It is why they never speak of gays like Ken Mehlman, Richard Tisei or Paul Babeu. The media largely ignored it when 300 Republican lawmakers and operatives filed a friend of the court brief at the Supreme Court in support of gay marriage. Reading or watching mainstream media sources, one would never know that Log Cabin Republicans is celebrating its 38th year. These people and groups do not conform to the narrative spun by the Left as what defines Blacks, women and gays. Conservative Blacks, women and gays do not campaign or write columns as victims, but as individuals with ideas. Their opinions are based on empirical evidence, not on tales told as they would wish them to be. Theirs is a belief in freedom; it is the realm of ideas that drives them.

The hypocrisy of the Left can be seen in their infatuation with polls. Four years ago, neither Barack Obama nor Hillary Clinton publically supported same-sex marriage. (In keeping in character however, they both claim to have done so privately.) Was it a messenger from God that informed them they were wrong? Or did their public persona catch up to a changing culture expressed in polls? From being intolerant of such ceremonies, they are now intolerant of those who hold the same views they did a few years ago.

The whole episode in Indiana is a sorry example of the decline in morality, not because gay marriage is wrong, but because of the persistence of intolerance among those who would preach tolerance. It is hypocrisy of the worst kind.









[1] A recent survey by the Pew Forum on Religion and Public Life showed the number of Americans unaffiliated with any particular faith to be 16.1%, more than double the number who say they were not affiliated with any religion as children.

Monday, April 6, 2015

"A Powder Keg and the Bomb"

                                                                                                                               Sydney M. Williams

Thought of the Day
“A Powder Keg and the Bomb”
April 6, 2015

“The short, bewildering war had followed, the war of which no history had been written or ever could be written now, that had flared all around the northern hemisphere and had died away with the last seismic record of explosion on the thirty-seventh day.” That sentence appears in the opening chapter of Nevil Shute’s alarmist 1957 novel, On the Beach. The story tells of a nuclear war that had destroyed the northern hemisphere. It takes place in southern Australia, about a year after that fictional 1961 war. Radioactive dust drifts slowly, but steadily south. In the end, all die.

Horrifying memories of Hiroshima and Nagasaki were still vivid a dozen years later when Shute’s novel was published. Those memories were kept alive by John Hersey’s telling of what happened in Hiroshima in his eponymous and best-selling book, published in 1946. Shute’s novel reminds us that the consequences of a nuclear war would not be confined to the participating parties. The book tells us that events can overwhelm expectations and that hope based on a misreading of human behavior can lead to disaster. Mr. Shute wrote: “No one knows how the war started or how it escalated.” In his desire for a deal, at seemingly any price, with a rogue nation known for exporting terrorism and for lying about their assets and capabilities, Mr. Obama may have put the world at great risk.

War with Germany, as Winston Churchill knew during the mid 1930s, was not the only alternative. He knew that bullies had to be confronted and, when done so early and firmly, tended to back down. Giving into their demands makes them bolder. Mr. Obama has always presented his proposal with Iran as a Hobson’s choice, or, as the Wall Street Journal put it on Friday, with “his usual false dilemma gambit” – that the only other option is war. That is not true. Current sanctions are hurting. They could be further tightened. Given our recent increases in oil production, we and the Saudis can continue to put downward pressure on crude prices, a major source of revenues for the regime. Iranian demographics are the mirror image of much of the west. More than 70% of its population is under 30. How long, as K.T. McFarland recently asked, will the youth of Iran tolerate 80-year-old mullahs who restrict their liberties?

That the Iranians were the victors in this negotiation was noted in the report of Thomas Erdbrink, the New York Times’ man in Tehran. He wrote after the agreement was signed: “…but the Iranians seem to have gotten their way, for the most part.” Demonstrators in Tehran that evening shouted the name of Iran’s Foreign Minister Mohammad Javad Zarif: “Zarif! Zarif is the one who beats the U.S.!” There were no such demonstrations for John Kerry.

The principal risk to the deal does not lie in the number of asterisks, or even whether Iran will cheat (which seems certain), but in the reaction of Iran’s Middle East neighbors, none of whom participated in the negotiations. While not all details of the pact have been made public, what concerns many of those in the region (and should those within range of Iran’s ICBMs!) is the inevitability that the country will, at some point, get nuclear weapons – perhaps ten years from now, maybe fifteen years, but possibly less. And that will lead to an arms race. Pakistan already has the bomb. Saudi Arabia will not wait to see how things play out. Turkey will not want a nuclear-empowered Iran on her border, without having her own nukes. Israel, we can be sure, is a nuclear power. Egypt and the UAE will follow. Libya will likely re-start her program. As game theorists know, the greater the number of players, the greater the risk. The Middle East is unsettled, and violence created by volatility is spreading, On Tuesday, the same day Mr. Obama announced the Iran deal at a White House Rose Garden ceremony, a small band of Islamic militants, led by the Somalia-based, Shia-inspired al-Shabaab, shot and killed 148 Christian students at Garissa University College in Kenya.

A Financial Times editorial praising the “historic deal,” quoted Mr. Obama as having mentioned that Richard Nixon and Ronald Reagan had made “imperfect deals with more dangerous antagonists during the cold war.” The premise is dubious. Certainly China and the Soviet Union were larger than Iran, but their leaders were not zealots in the way Iran’s mullahs are. A smaller but crazier adversary is more dangerous. Additionally, the agreement adds a mantle of legitimacy to a rogue regime, providing the accoutrements of a regional hegemon.

The Balkan states, in the early years of the 20th Century, were known as the “powder keg” of Europe. That proved to be true, when one fine late June morning in 1914 Gavrilo Princip lit the fuse that burst Europe into flames. He shot and killed the Archduke Ferdinand, heir presumptive to the Austro-Hungarian Empire, and his wife Sophie, Duchess of Hohenberg while traveling in a motor car in Sarajevo. No one can say for sure whether the deal signed this week will work or not. But making nice to bullies does not work, especially when the consequence could be a nuclear arms race. England and France did nothing to stop Hitler when it was still possible. The result was a war that took the lives of 60 million people. President Ronald Reagan, who had spent six years making the U.S. militarily stronger, defied Soviet Union leader Mikhail Gorbachev when he spoke at Berlin’s Brandenburg Gate on June 12, 1987: “Mr. Gorbachev, tear down this wall.” Four and a half years later the Soviet Union collapsed without a shot being fired, and a few hundred million people became free.

Once, when asked by Franklin Roosevelt during World War II, what should the war be called, Winston Churchill replied, “The unnecessary war.” In the mid-1930s, England and France were exhausted from the Great War, which had ended less than two decades earlier. They were reluctant to go to war again; thus they pandered to Hitler: They allowed him to rearm in the early ‘30s, permitted him to annex the Sudetenland in 1938, and then let him take over the rest of Czechoslovakia in the summer of 1939.

Let us hope that Mr. Obama does not become the Neville Chamberlain of our time. As I wrote, it is too soon to know whether the agreement will be a success or failure. We do know that Libya’s Muammar Gadaffi gave up his search for nuclear weapons without any negotiations. He saw what happened to his buddy Saddam Hussein and that was enough. But this agreement seems risky because of the possibility it will initiate a nuclear arms race in a part of the world that has all the characteristics of a powder keg.





Thursday, April 2, 2015

"Ted Cruz, Barack Obama and Needs for 2016"

                        Sydney M. Williams

Thought of the Day
“Ted Cruz, Barack Obama and Needs for 2016”
April 2, 2015

The two men are different: They represent opposite ends of the political spectrum: Barack Obama was raised in Indonesia and Hawaii. Ted Cruz was reared in Texas. Unlike Mr. Obama, Mr. Cruz speaks flawlessly without notes or a teleprompter; we know more about Mr. Cruz’s years at Princeton than we do about Mr. Obama’s at Occidental and Columbia; while Mr. Cruz was described by Alan Dershowitz as one of the smartest students he ever taught at Harvard Law School, Mr. Obama’s transcripts have been kept under wraps.

But, it is similarities that are striking. Both men were born outside the continental United States: Mr. Cruz in Calgary, Canada and Mr. Obama in Honolulu, Hawaii. Both had emigrant fathers: Mr. Obama’s was born in Kenya and Mr. Cruz’s in Cuba. Both fathers abandoned their sons in their youth, Mr. Cruz’s temporarily and Mr. Obama’s permanently. They were both raised, at least for a time, by their mothers. Barack Obama’s mother found solace in the communist beliefs of her father, while Ted Cruz’s mother got comfort from religion. Neither appears to have a sense of humor. Both taught at law school; Ted Cruz at the University of Texas School of Law in Austin and Barack Obama at the University of Chicago. Both were first term Senators, with limited experience, when they announced their candidacies. They were also similar in age: Barack Obama was 45 and Ted Cruz, 44. Both are populists who represent the extremes of their respective Parties, but perhaps most important, both are notable loners and partisans.

Partisanship has become so vocal and divisive that, in an inversion of the metaphor, trees have been lost for focus on the forest. Consider some of the issues facing the Country: The magnitude of our national debt that has been masked by extraordinarily low interest rates, rates which will, at some point, rise; entitlements which will, given current growth rates, consume more than 100% of the federal budget in a few years; tax codes and regulations that have been designed by special interests and favor crony capitalism; an immigration system that keeps out the most promising, while providing little control over the flow of the less desirable; government unions, like entitlements, that threaten the viability of federal and state budgets, and which function without regard to the needs or wants of taxpayers; a foreign policy that has alienated our allies, emboldened our enemies, cost us respect and influence, and which threatens the safety and security of the world; and over the years, a civility that has given way to arrogance.

On March 23, Ted Cruz became the first candidate of either Party to formally declare for the Presidency. His speech at Liberty University in Virginia was eloquent, pitch-perfect and smooth, perhaps a little too much so according to Peggy Noonan. Like the current President he can speak, but will he work with those whose opinions differ from his own? Will he invite contrary opinions? Can a man of his arrogance unite people, or would he divide them further? Would he mimic Mr. Obama – refuse to listen, reason or negotiate? It is not a lack of experience I worry about – after all, Abraham Lincoln came to the Presidency with only two years in the House – it is a concern for his judgment and an Obama-like divisiveness, a “my way or the highway” attitude.

The electorate is already divided and uncertain. The media is as biased as is the political class. Yet we are all in this together. What is needed is a man or a woman who understands the straits the nation faces, the fortitude to confront its challenges, yet who has the character and charisma to convince those who differ of the necessity for reform before events overtake us. For example, what will happen to federal deficits if interest rates were normalized? What happens to our future if our school children continue to underperform? For the first time in our history more small businesses – the engines of economic and job growth – are closing than opening. How to we reverse that trend? What would be the price of gasoline and home heating fuel if the privately financed fracking revolution had never taken place? How can we talk about inequality without speaking of the salaries and benefits of government unionized employees in virtually guaranteed lifetime employment? Will a nuclear arms race among a half dozen Middle East nations prove as harmless as the one between the Soviet Union and the United States during the Cold War?

Unilateralism does not work in a liberal democracy. We have spent six years experimenting with Mr. Obama who came with great expectations. He appeared bright, reasonable and open to ideas. He was the first African-American President. As such, he had an opportunity to lead us into a post-racial world. He failed. Like Jesus and the money lenders in the temple, he promised to dispatch lobbyists from Washington. Instead, they have grown in numbers and influence. He promised to heal the rift between the Parties. That gulf has widened. He promised to restore America’s image abroad. It has become worse. Voters overlooked his prior associations with men and women that would have denied the Office to most. Voters saw what they wanted to see, not what was there. He was elected because people bet on a promise, a vision – what they hoped would prove true – not on the man, his history or experience.

A President needs to be principled and forceful, but also genial and accommodative. A sense of humor is critical, as it disarms opponents and helps mitigate the awesome responsibilities of the Office. While all candidates need publicity, he or she should be open and consistent. There is no need to pander to the media, pundits and talk show hosts, all of whom are partisan. Keep in mind, as their numbers proliferate, their individual influence wanes.


The question for voters, as they consider the future, is which candidate can achieve a future that is best for the nation, and does so while maintaining the integrity of our legal and legislative processes. Otto von Bismarck, not a man remembered as warm and fuzzy (and not the leader of a liberal democracy), yet a man who accomplished a great deal, once said, “Politics is the art of the possible, the attainable – the art of the next best.” It is a lesson Barack Obama never learned. It is a lesson voters need to consider, as they look toward 2016.

Wednesday, April 1, 2015

"The Month That Was - March 2015"

                     Sydney M. Williams
                                                                                                                                 April 1, 2015
                                                                                                             
The Month That Was
March 2015

“One swallow does not make a summer,
but one skein of geese, cleaving the murk of March thaw, does make a spring.”
                                                                                                                                Aldo Leopold (1887-1948)
                                                                                                                                Conservationist

March madness, which we in America associate with basketball and which became popularized around the world by Lewis Carroll’s character the March Hare in “Alice’s Adventures in Wonderland,” is derived from the observed mating habits of the Hare. Like most of the world’s species, mating seasons are known for emotion replacing reason. Among the human variety, December babies are often the consequence.

There was much during the past month beyond basketball that would qualify as madness: Vladimir Putin disappeared for a week, perhaps to be with his girlfriend who allegedly was giving birth? Andreas Lubitz, co-pilot of a Germanwings Airbus A320 jetliner, deliberately crashed the plane he was flying into the French Alps, killing all 150 aboard, taking murder-suicide to a new level. The U.S. Ambassador to South Korea, Mark Lippert, was slashed with a razor by an assailant known to be a political extremist. Former New York Mayor Rudy Giuliano questioned President Obama’s love for America. Harrison Ford was hospitalized after he crash-landed his vintage World War II plane on the Penmar Golf Course outside of Los Angeles. And Starbucks’ CEO Howard Schultz began and ended a campaign to improve race relations by having the company’s coffee cups read, “Race Together.” With a majority of the servers being African-American, while most of the patrons are Caucasian the idea, while noble, was doomed. 

The most important event of the month, however, was the nuclear agreement being negotiated between the Obama Administartion and Iran, with its myriad tentacles affecting most of the Middle East and, consequently, much of the free (and not so free) world. The proposed agreement also highlighted the widening gap in domestic politics between the two Parties in Washington. The agreement, which theoretically would ban for ten years Iran’s ability to develop nuclear weapons, is supposed to be signed by the end of the month. It is difficult for an American politician whose furthest horizon is the next election to think decades out, as do so many in the Middle East. The potential for a nuclear arms race in the region seems a likely consequence.

For centuries the Middle East has been a cauldron of turmoil. Tensions, always tight, have worsened between the Shiites represented by Iran and the Sunnis by Saudi Arabia. Both have as partners secular governments and both incorporate terrorists and aspects of Sharia Law, which are an anathema to freedom loving Westerners. Standing alone, and loved by neither, is Israel. Iran, which is one of the world’s foremost supporters of terrorism, took advantage of the turmoil caused first by the invasion of Iraq by George W. Bush that was without adequate post-invasion plans and then second by the premature removal of troops by Barack Obama that left no peace keeping apparatus in place. Apart from Iraq, Iran has extended her reach within the region, in Syria, Lebanon and especially in Yemen, with her support for the Houthis. Iran has become our ally in Iraq against ISIS, because it is a way for Iran to support Bashar al-Assad and because it provides a foothold in a country she has long seen as an enemy. In Yemen, Iraq is our enemy in the battle against the Houthi. Both the Houthi and ISIS are Islamic terrorists, with the ISIS being Sunnis and the Houthi, Shiites.

As for the U.S. nuclear negotiations with Iraq, the talks have sent Secretary of State John Kerry careening around the world like a kid in a souped-up kiddy car at a bumper car rally on the Bonneville Salt Flats. Foreign policy has not fared well under Mr. Obama. The peripatetic Mr. Kerry seems to be following the lead of his predecessor whose greatest accomplishments were miles flown and countries visited. His pontificating pronouncements, accented with his Long Island “lock jaw,” add an element of absurdity to what is his ability to say nothing, while sounding superior. As for the Administration, any deal is better than no deal. It would be amusing were the stakes not so serious. Of course, for Mr. Obama’s political opponents – which now include, besides most Republicans and some Democrats, Israel and Saudi Arabia – the reverse is true: no deal is better than a bad deal.

Elsewhere overseas, Benjamin Netanyahu won re-election in spite of a poor economy and despite Mr. Obama’s efforts on behalf of his opponent, Isaac Herzog. An attack by Islamic extremists, backed by ISIS, killed 23 tourists in Tunisia, while in Yemen suicide bombers killed 123 and wounded 350 at two mosques. Tunisia had been considered a success story from the “Arab Spring” of 2012, while Yemen had been mentioned by Mr. Obama as one of our strongest allies. As Houthi rebels advanced, Yemen President Abd Rabbuh Mansūr Hādī had to flee the country and the U.S pulled out its troops. Indicative of deteriorating relations, the Saudis flew bombing missions against Houthi positions in Yemen without first notifying the Americans. The elections in Nigeria, Africa’s largest nation and home to the Islamic terrorist group Boko Haram, suggest that former military ruler Muhammadu Buhari defeated incumbent Goodluck Jonathon.

While taking questions at the City Club of Cleveland, President Obama indicated it may be time to consider compulsory voting. While such a law does exist in Australia, it seems odd for a free and democratic people. While I personally feel we should vote, making it mandatory is wrong. There are times when thinking Americans prefer to sit-out an election. Mr. Obama said it “would take care of the ‘money thing’,” but gave no hint as to why candidates having to reach more people would be cheaper. Hillary Clinton’s scandals got deeper when she announced that not only had she used exclusively a non-government email system when serving as Secretary of State, but that she had her own server – or rather one she shared with the Clinton Foundation – and that she had deleted more than 32,000 e-mails, e-mails that she alone determined were not relevant to her years at State. Showing that the wheels of justice do turn, albeit slowly, the Justice Department decided there was no case – neither criminal nor civil – against former Ferguson police officer Darren Wilson in the shooting death of Michael Brown last August. This was despite the use of overwhelming legal force on the part of Attorney General Eric Holder.

Ted Cruz became the first to declare his candidacy for President at a speech at Liberty University in Virginia. On the Republican side, the field will be crowded. Democrats would prefer to anoint Ms. Clinton with the crown and scepter that represent the Democratic nomination, thereby avoiding the costs of a primary and depriving 40% of the population of a choice. Sergeant Bowe Bergdahl, who was exchanged for five al Qaeda fighters and who received a hero’s welcome at the White House, was charged with desertion, further embarrassing Mr. Obama in illuminating his naïveté. A Religious Freedom Restoration Act (RFRA) was passed in Indiana – designed to provide a legal framework for those who claim that government rules or requirements impinge on their rights to exercise religious freedom – generated unintended (and unexpected) reactions from gay and lesbians who claim they are being targeted. The reaction from Leftist states like Connecticut and Washington was swift: state employees will not be able to travel to Indiana at state expense. Since 19 states, including Connecticut, have enacted RFRAs, the attacks are hypocritical and politically motivated, aimed at a popular Republican governor, Michael Pence.

Financial markets were busy. Janet Yellen, Chair of the Federal Reserve dropped, as expected the word “patience” from her commentary, but she did not, as she emphasized, substitute “impatience.” Fed Funds have now been at 25 basis points since the fourth quarter of 2008, the longest spell, I believe, of such abnormally low rates. It is enough to make one believe that the Fed is more interested in accommodating the heavy borrowing by the Federal government than working in the best interest of the American economy. The yield on the Ten-Year declined modestly, as money came out of equities. The Dollar continued higher, while oil and gold fell. Despite the cold weather in the Northeast, cocoa prices fell almost 10% during the month. On the first trading day of the month the NASDAQ Composite closed above 5000 for the first time since March of 2000. It did so on two other occasions during the month, but closed at 4900.88. European stocks have outperformed their American cousins, as they have done year-to-date.

In sports, March “madness” dominated the news. As the month ended, we were down to the final four in the NCAA tournament: Wisconsin will play Kentucky and Duke will play Michigan State next weekend, both games to be in Indianapolis. Peyton Manning, who turned 39 this month, re-signed with the Denver Broncos, but at a $4 million reduction in salary. For the second time in its history, Alaska’s Iditarod Race was moved from Anchorage to Fairbanks because of snow conditions. Dallas Seavey won for the third time, beating his father, Mitch, in a time of 8 days, 18 hours, 13 minutes and 6 seconds. His prize: $70,000 and a new pickup truck!

Besides being the 15th Anniversary of the NASDAQ trading above 5,000, March was the 50th Anniversary of “Bloody” Sunday, the Civil Rights March from Selma to Montgomery, Alabama across the Edmund Pettis Bridge. Five years ago this month, President Obama signed into law the Affordable Care Act, and one year ago Malaysian Flight 370 disappeared in what remains one of air travels’ biggest mysteries. Also, in March 2014, Russia invaded Crimea, where they remain.

Death, as its wont, made its entrance. Edward Cardinal Egan, former Bishop of the Archdiocese of New York and who helped console a grieving city after 9/11, died March 5th, a month shy of his 83rd birthday. Lew Kuan Yew, the man who took the British colonial backwater of Singapore and transformed it into a thriving financial and trading power house of a city-state, died at age 91. While he was authoritarian, he was also principled, forward looking and pragmatic. Irving Kahn, a Wall Street legend who made his first trade in June 1929, died at age 109[1]. He once said, “The important thing is to keep that brain going.” Amen.












[1] Mr. Kahn actually died on February 24th, but I first saw the obituary in the March 6th edition of the Financial Times.