Tuesday, January 02, 2007

Sizing up 2006

As I begin yet another year I can't seem to shake that tugging feeling to size up the year passed. Though not in the memory jogging, January to December tick-off of events kind of way. I find more interesting anything that seems to drive the behavior which the expression of, will be immortalized for 2006.
I think that the balance between the haves and the have-nots may ultimately decide the fate of the planet so it is naturally worth some attention each and every year.
Political systems that harnessed the power of the natural desire to improve ones own lot in life seemed to have had plenty of success.
The places with less of this struggled along with those with few resources and limited experience exploiting the resources they did have. Societies in these stages tend to "cut the tall flowers," so to speak, so the overall restraints to improvement are large.
In the U.S. where the gap has become a valley between the haves and have-nots, the poor don't starve and the society for the most part encourages success but, the shift toward the haves knowledge based economy creates a formidable barrier for entry for the have-nots.
The haves on the other hand seem to remain confounded as to why the have-nots don't simply recognize that the haves inched their way up and they can to. What the haves will never concede is that an ever increasing number of them never were have-nots in the first place. Strangely the ones that skipped the penniless origins, often tend to offer the most advice to the penniless on the subject.
All the while 40 million people have no health insurance and one trillion was spent on health care last year of which 500 billion was spent on the last 10 days of life. I'm no mathematician but for congress to carry on about where to start the negotiating for a minimum wage increase for less than two per cent of the population doesn't leave me all that hopeful
You know my feelings about Iraq. It was a mistake in a variety of ways but the ancillary issue of 2006 is Iran. We had to euphemistically describe what we thought Saddam Hussein had as "weapons of mass destruction," to invade Iraq. We won't have to do that in Iran. We'll know exactly what they have and if it's not good we likely won't be able to do anything about it because we are spent, both politically and financially. If the economy stays robust, the war in Iraq turned around and we made some progress repairing our image around the world it will be two years before we could do anything about Iran. On the positive side it may be a good thing because it will force this administration to work diplomatically for two years and then they'll all be gone.
Which brings me to my last issue for this post. Why does the U.S. Dollar continue to hit lows against all major currencies? This is another conundrum whose birthday was in 2006. Far be it from me to try to call the reason for currency fluctuations but given what appears to be guesswork by the economists I read, I'll share my opinion.
I've seen many periods over the years when the dollar remained strong when it shouldn't have, and had it explained that due to the perceived on balance strength of the U.S relative to the rest of the world, with risk being part of every investment equation, people simply preferred to hold U.S. dollars. Why would I not now believe that the opposite is the case.

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