Politics and the Economy 07/22/2008 09:55:21 am by Dan Krohn

	It has often been said that small businesses are the growth engine of the U.S. economy. Frequently politicians cite the potential damage to small businesses as the reason for opposing a proposed bit of legislation or regulation. Yet, small businesses by their nature do not have as much to spend on lobbying and campaign donations as the very large. So what do we see happening? The federal government is increasingly bailing out big businesses, which means taxpayers will pick up the burden. First we have the subsidized takeover of Bear Stearns. Now we are watching the taxpayer being saddled with subsidizing Freddie Mac and Fannie Mae. And if you look carefully, you will find that investment banks are being given unprecedented access to the Federal Reserve window - a right previously available only to traditional banks. (Admittedly that line has been blurred for many over the last decade.) There are plenty of other financial institutions and corporations walking towards the federal bread line. So what is happening to small businesses? If a small business goes under, off it goes to bankruptcy where it is liquidated and where the owners get nothing. That is exactly what should be happening to big businesses that are insolvent. And while we're at it, maybe their top executives should be fired and not receive multimillion dollar severance packages. The laid off employees of many big companies certainly aren't seeing much in the way of severance. But the small businesses are being forced to contribute to the government's big business bailout efforts through their taxes. All of this federal activity, along with foolish economic practices (like record setting federal deficits) has clobbered the dollar. And now the Fed, citing concerns about inflation, is about to increase interest rates - that will clobber small business as their lines of credit and other loans will cost more - if they can get loans from struggling banks at all. This amounts to an additional hidden tax on small businesses to help finance the bailout of big ones. In this campaign year, don't pay too much attention to what the candidates say. Rather take a serious look at what they've done. And check out their primary advisors. As Don Miguel Ruiz wisely wrote many years ago, "If you choose to believe what a person says rather than what that person does, you are choosing to lie to yourself."

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Time for More Mortgage Euphemism 07/13/2008 01:50:40 pm by Dan Krohn

	There are experts on Wall Streed stating outright that Fannie Mae and Freddie Mac, the monster U.S. mortgage guarantors, are insolvent. If that is true, then one way or another the U.S. taxpayer will end up in their places. The loan guarantees by those two outfits exceed half the total national debt - hence the use of the word monster. Imagine the national debt up 50% in an instant. Since calling this as it is would be beyond our government's capability, you can be sure that all sorts of interesting terms and phrases will be bandied about. Only the politically blinded and ignorant will be buying the official line. If these outfits are ready to go, and if this amount of debt is suddently going to appear on the U.S. balance sheet (in reality even if some sort of off balance sheet razzle dazzle is tried) you can bet it will hurt. For one, this added federal debt will cause further weakening of the dollar. Foreign governments will not be fooled, and may start moving out of the dollar more quickly. And mortgages in the U.S. might become even harder to get - which will intensify the housing crisis. Keep an eye on this one, and read between the lines. The lines themselves will be less true than those lines tossed about in singles bars.

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eBay Ruling - Renewal of a Trend? 07/12/2008 12:24:21 pm by Dan Krohn

	For years certain brands have been doing their best to ensure that their products are sold only in retail outlets which they approve. Generally speaking these have been luxury goods trying their hardest to maintain an air of exclusivity by being available only to a select few wealthy customers. The classical approach has been to permit only exclusive boutiques and high end department stores to carry the items. Of course, there has been a nice history of lawsuits and legislation dealing with this technique. But now, the issues emerges on the Internet in a very big way. A French court has ruled that eBay has not been doing enough to prevent fake versions of these elite brands from being sold at auction. But the court's decision went further by upholding at least some brands' rights to require that their products be sold only in authorized stores. This blogger has some sympathy for the fake products problem. If a buyer decides not to like the Dior brand because of a bad experience with a product which was not Dior though labelled as such - Dior has a right to be annoyed. But what if this blogger gives some real Dior perfume to his wife, who decides it's just not her scent. Under this ruling, it is unlikely that I would be able to resell that bottle of perfume online. And this seems hardly fair. This represents one aspect of something the Internet has brought into focus in many arenas. What control should an original manufacturer have after the first sale? The performing arts are at the forefront, but ponder where this ruling could go. Imagine that you have bought a music CD and then decided that you don't like the music. Should you be legally prohibited from giving that CD to a sibling or friend who might like the music? You sneak - that's just what you claim to have done. Really you have put that music on your MP3 player and are ripping off the artist - or so it will be argued. Imagine the Christmas police, waiting with your family for the presents to emerge from under the tree. When the perfume is opened, they demand to see the receipt to assure it came from an authorized seller. The same thing happens when dad unwraps his designer tie. And imagine the turmoil erupting when someone unwraps a music CD which is not in its original shrinkwrap! A happy holiday indeed. Merry Christmas.

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