Troubles for new administration

President-elect Obama is still two weeks away from his inauguration and already embarassing events are beginning to pile up for him. Problems range from Illinois Governor Blagojevich and Obama's replacement in the Senate, to New Mexico Governor Richardson's withdrawal from his nomination to Obama's cabinet, to his appointment of Norman Panetta to become the head of the CIA, to the likely election of Al Franken to the Senate over Norm Coleman in Minnesota.

The Blagojevich matter adds to my concern about Obama and the influence of people like Jeremiah Wright, Tony Rezko, Bill Ayers, Pleger and others of their ilk. Richardson did the right thing in view of his troubles with certain supporters but it still detracts from Obama' s image. Norman Panetta is no doubt a decent man but he has no experience in the intel community and the CIA directorship should always go to an intel professional. Al Franken is a joke in every sense of the word and his election sets back honesty in the election process a very long way.

The Madoff Securities Scandal

Ponzi schemes are not new. Our Social Security program is a good example. I sympathize with those investors who have lost their money with Madoff, but they should not be bailed out with taxpayer funds. Their failure was two-fold; not doing due diligence, and plain ordinary greed. Some blame the SEC for not discovering the Madoff scheme, but that's a stretch at best. Whatever happened to personal responsibility? A gambler learns to accept responsibility for his actions and so should investors. Madoff's assurances to his investors promising a minimum 8% annual return especially in shakey economic times was deserving of at least some second thoughts.

Economic Turnaround in 2009?

A few economists are cautiously optimistic about a possible turnaround of the economy this year. Others say that won't happen until 2010 or even further down the road. So much depends on jobs and consumer confidence, and the two are obviously tied together. Right now unemployment continues to rise and consumer confidence is still down around the floor.

I like Obama's interest in repairing the nation's infrastructure but it would be months before such projects would be felt in the economy even if we started now. The money for infrastructure projects is also a problem because of competing needs in righting the economy. Outright gifts of money to middle and lower income folks will help momentarily, but once the stimulus money is spent, what happens next? We need to work off a huge surplus in the inventory of private residential units and the same must be done in the case of automobiles. The same applies to recreational boats. That's not going to be easy even at low interest rates on mortgages, auto and boat loans because of the confidence and jobs factors.

Experience in past down periods in the economy would indicate that everything has to improve in tandem in order to achieve full recovery. Even then inflation will be a serious possibility which will force up interest rates on all lending.