Wednesday, February 4, 2009

Dick Cheney's Comments

Dick Cheney was quoted in an interview with on his views on terrorism and the Obama administration;

"The choice, he alleged, reflects a naive mindset among the new team in Washington: “The United States needs to be not so much loved as it needs to be respected.”

Mr. Cheney is at least partly right but I don't believe he's using the words he really means. I think he has conflated respect with fear and really means we must be feared if we are to be safe from a terrorist attack. Fear results from displaying power and military strength, being ruthless and flexing muscle.

Mr. Cheney, respect has to be earned by our deeds and principles. When we have once again regained the respect that we once had we will indeed be safer than we are now. On the other hand, fear spawns mistrust and even hatred which is exactly what the last eight years have given us.

So, Mr. Cheney, you are right. We need to be respected. If only you understood the difference between respect and fear.

When is investing not investing?

Most everyone is affected by the recent financial meltdown in the stock market and the economy in general. Millions have seen their investments in their retirement plans lose a huge part of their value and they are justifiably worried.

Since you have no influence on stock prices once you purchase them, are they really investments or should it more accurately be called gambling?

Some definitions of gambling include:

1) anything involving risk or uncertainty

2) take a risk in the hope of a favorable outcome

This sounds much more like what we do when we "invest" in the stock market. In fact when we buy a house with the goal of making a profit when we sell it aren't we doing the same thing? Indeed, we are gambling.

On the other hand if one buys a house to live in while raising a family or to enjoy retirement, we are more like the business owner who invests in his business. We too, maintain value by keeping our home well cared for and updated. We even may increase its value and if and when we decide to sell the home it may even be at a profit. So much the better.

But if our home is worth a little more or even less when it comes time to sell, have we not enjoyed our 'investment' all the years we have owned it and lived in it? This is a true investment.

We need to rethink our notions of investments and gambling. When we buy stocks and lose money on them we need to understand that we have lost a gamble; we made a bet and lost. If the price goes up our bet has paid off. It's a gamble not an investment. Our so called investment is actually a crap shoot and the most we can expect is that the dice aren't loaded.

If our pension plans 'invest' in the market and lose value we can be disappointed but don't whine about it. We lost a bet. If you don't want risk, don't gamble.

It's an ugly truth that transparency, oversight and basic honesty have been in short supply, and those in charge on Wall Street and in Congress need to be taken behind the woodshed. Despicable, greedy, dishonest behavior needs to be stopped, and punished and soon.

But the bottom line is that our economy has been built on gambling, and as any good gambler knows, you have to "know when to hold 'em and know when to fold 'em".

And let's not be stupid - always keep some 'real' money in the bank for emergencies. (preferably a bank that isn't getting a bailout)

But maybe it's just me.