Last year I “appeared” on the Jan Mickelson show to discuss the economic mess and its’ root causes.  I mentioned that one of the main factors was the errant monetary policy of the Federal Reserve.  Both Greenspan and then Bernanke kept interest rates down too low for too long.

Why would this create a problem?  There was too much money chasing assets considered to be the least risky.  Exactly what does that mean??  After the stock market crash of 2000 and 911 in 2001, the Federal Reserve kept interest down as low as possible to stimulate the economy.  Granted they caused the stock and tech bubble to collapse by  raising interest rates too high,too rapidly, but who’s counting.  

People thought the stock market was too risky after the significant losses and the bond market yield was miniscule.  This was also true of other safe investments such as certificates of deposits.  What was an investor, retiree, pensioner to do to make enough gain to beat inflation?  They invested in real estate (or took equity out of their houses through refinancing).

With low interest rates and the historical increase in housing prices, people felt real estate was a safer bet and began to invest in housing.  This fueled the housing boom and the notion that housing prices would continue to rise and that one couldn’t miss out on this safe investment with great returns!

Finally, someone in government has acknowledged their complicity in the events that unfolded last summer!  Timothy Geithner stated as much during an interview with PBS’s Charlie Rose last week.  Geithner admitted that loose monetary policy was true both in the U.S. as well as globally.  He is too quick to pass this problem off onto other central bankers globally, but at least owned up to the Fed’s responsibility for creating another bubble.

However, no accountability for the actions of the Federal Reserve will be undertaken.  Instead they will be granted more authority and power over the banking system they helped to decimate.  The government and the public have villified the bankers for their greed, and rightfully so.  The financial and mortgage industry abrogated their stewardship over other people’s money, but so did government agencies, regulators and individuals themselves. 

It brings to mind that during the Clinton administration it seemed that character did not matter, it was the economy, stupid.  I would remark  that character and values are always important.  When we raise a generation of citizens who believe that the ends always justify the means, the result is unchastened arrogance.  There is nothing wrong with enlightened self-interest which can benefit a great many by elevating the prospects of others.

But enlightened self-interest that has no moorings in ethics, leads to greed.  When we have lost our connectedness to others with whom we are engaged, we lack empathy and responsibility for our actions upon others.  More regulations and laws will not make up for the lack of internalized boundaries when the potential gain is significant.  

In this economic crises, gains were significant and  promoted by government policies to mitigate social inequities and monetary policy instituted by a non-partisan creation of the government.  The remoteness from those affected by their lack of stewardship and removal of risk by government sponsored enterprises and new financial products enhanced the notion of infallibility.  But we are all fallible and bubbles are meant to burst.

It is a shame that it sometimes takes the death of someone, for us to begin to know them.  I am, of course,  speaking of the passing of Jack Kemp last Saturday.

His death permitted me a look into the man that was and that I wish I had had the opportunity to know.  But I was not interested in politics then, was finishing medical school and beginning residency in Iowa with a 9 month old son and husband in tow and concerned about massive school debt.  However I wish I had paid more attention.

It is not just that Jack Kemp did what I am now attempting to do, but it is because I find so much about him to be admirable.  He too was a staunch fiscal conservative, but was very much concerned about the plight of the underprivileged and minorities.  He had an insatiable appetite for learning and reading.  And he delighted in sharing his new findings with his staff and those around him.

He remained solidly inline with his principles, but was able to articulate clearly his message and the idea that the republican party offered solutions to the issues facing our nation at the time (post Carter era).  Last night at the Johnson County Republican Meeting I stated that the free market capitalist system had brought more people out of poverty than any other economic or political system on the planet.  Jack Kemp would have echoed this statement and punctuated it with an exclamation point!

As I read about his life, I find a kindred soul.  You see, whatever our political ideology, the goal should be to make the lives of our citizens better.  By a smaller, more limited government, I do not mean we abandon all regulations.  By reducing government spending, I don’t mean that the poor and middle income average person pay an unfair tax burden or be unable to access those resources necessary to fulfil their potential.  

I strongly believe that a larger, more centralized federal government means that we will have less liberty!  Less liberty to fail and then succeed, less liberty to come from poverty to become a doctor, or opera diva, or truck driver or a stay at home Mom.  Less need to challenge ourselves intellectually and motivate ourselves to be better individuals within the collective whole.  Less ability to reclaim the dream.

So through the passing of Jack Kemp, I have been inspired and motivated to keep working for the American values that will bring thousands out of poverty, will create new jobs and grow our economy and dignifies each human’s right to be free.  Hope does not come from the government, it comes from the foot soldiers.

On April 17, the EPA ruled that CO2 is a hazardous substance to our health.  For some, this has been long in coming.  For those of us who value both the environment and freedom, this is an atrocious ruling.

Does that sound bipolar?.  By this ruling, the EPA can now establish regulations and penalties without any oversight.  Because the EPA is not composed of elected officials, they are not accountable.  The director cannot be voted out of office, there is no appeal process and whatever harm is created instantaneously will take decades to undo given the pace of congress.  However, I am not implying that we should not be environmental stewards. 

But what harm could possibly occur and what are the repercussions?  In Iowa, farmers could be severely affected.  The EPA could place restrictions on fertilizer use, planting, livestock, manure management, water run-off and a host of other aspects of farming that would dramatically increase the cost of production.  Now some may think that’s no big deal because farmers are “rich”.  

This is a price all of us would pay.  Increased production costs would reduce the number of smaller farms and less competition with higher input costs, would create shortages and higher prices.  Middle class and low-income consumers would bear the brunt on increased food prices, especially when it comes to labor intensive crops such as fruits and vegetables.

What about the cost to produce energy to run equipment?  What about bio-fuels?  Has anyone considered impact to agricultural research such as that which occurs at Iowa State University?  Years of crop yield research and ongoing studies could be lost.  Iowa as a state could be profoundly impacted and its’ economy dampened.

Just as important is a body of people making regulations over which we have no recourse.  Consider again the unintended consequences of the Consumer Protection Agency regulations put in place to reduce toys imported from China that may contain lead.  This has constrained numerous industries to include home based businesses and resale shops such as Goodwill and the Salvation Army.  These type of regulations should be debated, discussed, open to the public and available on C-Span and then a ruling made and implemented.  

We have rapidly moved into a society which tyrannizes the public, rather than responding to it.  The EPA can rule by fiat, not by the voice of the people through their elected representatives.