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Tuesday, July 05, 2011

 

What does the 14th Amendment Actually Say?

As the debt limit issue heats up, we find progressives, and even Treasury Secretary Geithner floating the possibility that the 14th Amendment might provide the Administration the Constitutional authority to ignore Congress and issue new debt itself. To put it charitably, this represents an expansive reading of Article 14, Section 4, which I invite readers to review. To put it bluntly, it reflects on the illiteracy of those who would take this position, and invites the Administration to violate Article 1 of the Constitution (flagrantly, I might add) which reserves the authorization of federal debt to the Congress only.

One might ask what this subject is even doing in the 14th Amendment, the Civil War Amendment which made the former slaves citizens. The purpose of Section 4 was to clarify that Congress would see to it that Union debts incurred would be honored but debts of the Confederacy would not, including debts associated with the institution of slavery.

The fact is that the Administration and its allies are desperately seeking leverage because it is becoming increasingly clear that unlike past times, the GOP is showing little or no inclination to buckle. This is the salutary impact of Tea party freshmen.

This is not to say that we are going to solve our fiscal profligacy all at once. Merely, to say we are going to have what the Left considers draconian cuts in the budget, they are as inevitable as they are necessary.

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July 4th is the traditional halfway mark for the baseball season, yet, the Mets, Pirates, Indians, and Diamondbacks hang around the race and that means meaningful summer baseball even in Flushing by the Bay, at least for a little while. Several good races are shaping up, including competitive races for first place in each division, though the wild cards have clear leaders (whoever finishes second in each Eastern Division). I guess this is why Commissioner Selig is floating his trial balloon concerning a second wild card for each league.

He is also talking about some kind of realignment, that makes little sense to me (6 five team divisions so there are 15 teams in each league, necessitating interleague play throughout the season). My personal preference is that baseball go back to its original plan when expansion began - four 8 team divisions, two in each league, no wild cards. If we must have wild cards, let the second place team from each division play the first place team from the league's other division in the first round. Frankly, I could do without wild cards. We never missed them before we had them, I can tell you.

Where would I go for the two new teams? Outside the continental US probably. Maybe one team in San Juan, the other in Mexico City. If Juarez wasn't a drug infested mob run town, it could be a candidate.

But it will not be happening as long as myopic Bud is running things.
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More and more, Europe is looking like a lost cause to me economically. This does not bode well for us. In fact, it is hard to find a government not spending way beyond its means. That means there is no actual financing going on and leaves the world susceptible to inflation everywhere.

It seems that Man is no longer willing to admit that there are things beyond our means, at least temporarily. Look at the riots in Greece and demonstrations by unions in the UK. How did we get so spoiled to the point that we all demand things we haven't earned? And has our generation done enough to inculcate the work ethic in the next generation and the one after that? Answer - NO!

In short, something's gotta give. It may be sooner, it may be later, but someday, we have to produce as much as we consume. Or consume less. Not good for an economy that depends on growth to make the numbers work.

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On June 24, we bought 700 shares of FSI International (FSII) at 2.98, a value buy. FSI's stock had taken a hit after providing a subpar earnings report and outlook. On 6/27, we pounced on 200 shares of USA Trucking (USAK) at 10.08 a zero buy. Then with the market recovering, we went into profit taking mode. On 6/29, we sold 200 shares of Conrad (CNRD.PK) at 13.10. We had paid 2.25 for 100 on 2/19/05 and 1.30 for 100 on 4/26/05. Back then, the stock had been delisted by management to sidestep Sarbanes Oxley requirements, rare commom sense shown by public company management. You have to have a single minded success orientation to bury that much ego. Never have I made so much on a pink sheet stock. On 7/1, we sold 100 shares of Worthington (WOR) from the IRA for 22.85. We paid 14.27 on 5/19/03/ On 7/5, we sold 100 shares of Gulf island Fabrication (GIFI) for 32.06. We paid 7.04 on
3/6/09, a gain for which we owe thanks to our friends at Tulane University from where we got the recommendation.

Our periodic disclaimer: Neither redwavemusings nor its author are investment advisors and the securities mentioned on this site should not be considered recommendations since they may not be suitable for readers (or anyone else).

Comments:
Yes, cuts should be made. I do mean that. At the same time, an unwillingness to return tax rates to earlier/higher levels for those with high incomes makes the Republican Party look every bit as reasonable as the Israeli government and its insistence on West Bank settlements. Both U.S. parties take pride in being unreasonable to pander to the extreme, voting motivated ends of their constituencies. How do your musings move us away from that? That's correct, they don't. This posting of yours implies that digging in of the heels is the right thing to do. That just makes you part of the problem. Please use your considerable intellect to guide others to a sensible middle, instead of just being another voice for the supposed victimized right. The victimized right is actual a very funny notion, if you are prepared to get the joke. Warmest Regards,
 
Brilliant, touché Dr. C.
 
On a more positive note, it is great that you are kicking both Jeter's and Pete Rose's ass. 5,200 plus and counting.
 
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