I posted a while ago about making a micro loan via Kiva.com. Doing this has been very educational for me. It has helped me understand what microloans really do and what the misconception is. I have received a few repayments already, in fact, I have over half the loan amount repaid. I have to be honest, it has not been as fun or exciting to have this loan out as I thought. The web site is great and I even found a nice Windows Phone 7 app that helps me monitor and track my account. I was really hoping to get feedback from the person I loaned the money to but I have not heard anything.

During the time of having the loan out I was more attune with things I saw and heard about microfinance. I listen to a podcast called EconTalk which is a great educational podcast on economics. There was a recent podcast about microfinance that was interesting. The research currently doesn’t show that microfinance has any impact on lifting people out of poverty.

“However, there are surprisingly few credible estimates of the extent to which microcredit actually reduces poverty.”

“The most-cited source of evidence on the impacts of microfinance is the early set of studies collected by David Hulme and Paul Mosley (1996). The findings of these studies are provocative: poor households do not benefit from microfinance; it is only non-poor borrowers (with incomes above poverty lines) who can do well with microfinance and enjoy sizable positive impacts. More troubling is the finding that a vast majority of those with starting incomes below the poverty line actually ended up with less incremental income after getting micro-loans, as compared to a control group which did not get such loans.”

- UN : Microfinance as a Poverty Reduction Tool

This is interesting because people have called microfinance the cure to poverty. As in most problems in life, poverty is more complex than peoples access to money. Economics is not a very perspicuous issue. I am not saying it is an activity we should not engage in, and I am not ready to pull my money from Kiva yet. Microfinance may be a tool in helping but it alone cannot solve poverty. While the industry of microfinance may not be able to cure poverty it has at least helped us understand poverty a little better, and that helps us better understand the issue.

I really like history. When I was in high school I may not have said the same thing, but as I have grown older history and the lessons we can learn from it have become really interesting to me. I recently watched a show on the History Channel called “The Rise of the Third Reich.” It is important we as a people understand what the world and political system was like in Germany which allowed Hitler's Reich to rise to power.

Politics are complicated, that is one thing everyone can agree on. There are always people taking sides with arguments, normally pretty compelling arguments, on how they can solve a problem. Time Magazine’s man of the year once said ”the task of politics is not to represent just one faction. Rather the task of politics must be to overcome these divisions for a greater good.” That statement resonates with a lot of people, in a hope to overcome the endless struggle between political parties.

The quote noted above given by Time Magazine’s man of the year was actually given by Adolf Hitler! How does a man go from being Time Magazine’s man of the year to one of the most evil leaders in the history of the world? Maybe the detour in those roads is not as drastic or easy to see as we think.

Adolf Hitler started his raise to power in the wake of WWI and during the great depression that hit the world in the years leading up to WWII. Germany was hit as hard by the depression as any where else in the world. Hitler only ran for public office once. He ran for president of Germany and received 11 million votes. He lost. Within one year of losing he would be elected chancellor of Germany.

Nazi’s never captured more then 37% of a popular vote in Germany, yet they were the largest political party in Germany. Hitler gave the quote above in a speech to 20 million people after he was installed as chancellor. The speech roused so much emotion in people the Nazi party had such a huge level of membership requests it had to suspend admissions. This moment in history teaches us that words and popularity of a person or group don’t always reflect intensions for a greater good.

When Hitler gave his speech he did not control Germany, but in two weeks he would.  On February 28th, 1933 someone set fire to Germany’s parliament. To this day no one knows who started the fire. This was Hitler’s opportunity. He quickly blamed the communists ,even though there was no proof. He sold the people on a common enemy and within weeks the freedom of press, expression and public assembly were suspended. Within days thousands of communists were arrested. With the communists in jail there was no one left to stop the Nazi party. The party then voted to consolidate all power in Hitler. He had been chancellor for 52 days! Germany had more changes coming.

In 1934 Leni Reifenstahl would make the movie “Triumph of the Will” which chronicles the Nazi party’s yearly gathering in Nuremberg and Hitler as the one great leader of Germany. This rally was attended by 700,000 supporters The film was acclaimed and won awards around the world.

Meanwhile in Germany you could not speak against Hitler or the Nazi party or you would be arrested. If you were a Jew you were boycotted and eventually your  citizenship as a German was removed. It was mandatory for all youth to belong to the Hitler youth program.  If you had any type of genetic imperfection you were forcibly sterilized. Those deemed pure were encouraged to have lots of babies. Hitler was going to need them. Young girls while at Hitler youth camps where encouraged to get pregnant by the boys. Thousands came home pregnant.

One mom, who dared tell her daughter not to get pregnant, was to be turned in by her daughter and arrested. If you think a good parent can get their child to overcome or resist social pressure if they are a “good parent”, try telling this mom. While nothing can replace a parent, history has many examples of how parents need the support of the society around them.

The people in Germany gave way to the mentality that “It is better to howl with the wolves than be eaten by them.” Years later the entire world and millions of sons, daughters, moms and fathers would pay the price of removing the Nazis, or die waiting for that moment of freedom to arrive. 

It is imperative we know our history. In the words of George Santayana’s Reason for Common Sense, “Those who cannot remember the past are condemned to repeat it.”

WikilLeaks has been getting a lot of press as of late for the classified files of the U.S. government it has published on the internet. The site is publishing nearly a quarter million classified U.S. diplomatic cables. There has been a lot of talk in the past few years about having a transparent government. Is this really what the country was after? If it is, the full repercussions of this transparency have not been thought out.

The U.S. state department was sent out in a scramble this week to prepare the international community for leaked documents.

“The release of hundreds of thousands of State Department cables is expected this weekend, although WikiLeaks has not been specific about the timing. The cables are thought to include private, candid assessments of foreign leaders and governments and could erode trust in the U.S. as a diplomatic partner.” more

Is recording all the private calls between government leaders and their personal assessments of people really what we mean by transparent government? Can you image trying to run a government dealing with countries like Iran, North Korea, China and others where a third party tells those other leaders what your actually thinking behind close doors? You are basically left trying to win a chess match while having to tell your opponent why you are making each move. I am sure it is hard enough to build a rapport with some of these leaders, and it has to be impossible when someone is telling that person, behind your back, the concerns you have about trusting them. How do you continue to build relationships with leaders who now know you have called them "risk averse and rarely creative" or "feckless" and "vain." This leaders now now any conversation they have with the U.S. maybe read to the world. How likely do you think these leaders are to be honest with us now?

WikiLeaks says it is disclosing the information because the White House is trying to cover up "human rights abuse and other criminal behavior." It must take a lot of effort to find the connection between human rights violations and telling the world what has been said in private talks between the U.S. and the Saudi King about Iran.

The Secretary of State has spent her time this past week reaching out to our friends, and those we are trying to befriend, in order to soften the blow of what has been said in these private conversations. How is the U.S. expected to build relationships this way? The Italian PM has been scrambling this past week to explain the comments made about him in these documents.

The job of getting other countries to trust us just got A LOT harder.

If Roosevelt during World War II had to deal with this type of transparency  I think the outcome of WWII may have been different. How do you maintain fragile alliances and public support tif the press tells the world of every mistake or mishap.

I am all for government transparency but there are certain areas of the government where this applies to more then others. Certain things in the government need to be filtered so we can build relationships and handle explosive situation as gently as possible.

The most interesting part of this mess is the co-founder and editor-in-chief of WikiLeaks is an Australian. A person from outside the U.S. has created a website to expose all the secrets of the U.S. and destroy its standing in the world.

There is always a lot of talk about the nation debt and a lot of the talk can be hard to understand. The nation debt currently stands at 13 trillion. That is over 43k for every U.S. citizen. How is your savings account coming along for this? Click on this link for a break down of current running amounts. Depending on when you read this the numbers maybe a lot higher (hopefully years from now it is actually lower).

Ok so what does this really mean and how can I understand it. I recently found this video which greatly helps explain how the national debt has grown through out the years and how quickly it grew under different presidents.

http://www.youtube.com/watch?v=P5yxFtTwDcc&feature=player_embedded

Now that we know how fast the national debt has been growing why do we care? How does a large debt effect us? If there is any lesson this country and its citizens should have learned from the economic collapse of 2009, we should have learned why it is bad to be leveraged to high. Financial leverage is the degree to which one is utilizing borrowed money. The U.S. debt compared to the national GDP tells us how leveraged the U.S. is. The chart to the right shows the history of Debt .vs GDP since the 1800. The spike right after the 1940s was to fund World War II. You can see that in  2010 we are gaining quickly on that all time high spike in the 1940s.

The government sells its debt by selling U.S. treasury bonds. Almost anyone can buy U.S. treasuries. They basically give the government money for a promise the money will be paid back with interest over a certain number of years. The U.S. government itself owns about 52% of these treasuries. This is where most of Social Security and Medicare savings account money is. After that China ($846 billion), Japan ($821 billion) and the U.K. ($374 billion) hold most the rest of the debt.

Some how the world’s richest nation has got in a position where it has to borrow form some of the world’s poorest. Just like in 2009 when banks ran out of money, or decided it was to risky to lend money anymore, the bubble popped. When countries like China and Japan stop lending us money it will drive up interest rates, cause home prices to drop more then they already have any could cause a run on the dollar. “If foreign central banks become net sellers of Treasurys, the demand for dollars needed to buy them would plummet.” If there is one rule most people remember from economy class, it is supply and demand.

Foreign countries have already started raising the risk level associated with lending to the U.S. It is time to get our spending under control.

Bumper stickers seem to be a good business these days and there are all different kinds out there. I saw this bumper sticker on a car the other day. It really got me thinking. To me this is a statement against immigration reform and the fight to get our immigration problem under control, or maybe even a denial that there is a problem. On the surface this may seem like a valid statement. After all the United States was founded on the idea of mass immigration. Why should we change from this principle and fight immigration. On the surface this all sounds and feels good. There are three big connection here that are not being made.

First, this argument has to be broken up to legal and illegal immigration. We the people were not all illegal immigrants. The fight in America right now is illegal immigration not legal immigration and not immigration in general.

Second, at the start of this country when millions on people flocked to its shores it was not a welfare state. It was far from being a welfare state. If you came to America back then you had to fend for yourself and make your live here as there was no welfare to lean on. No free education and no free meals. It was a harsh land the immigrant had to be ready to make their own way in. This is not the case any more. America has a welfare system that will help feed you, provide healthcare (as no ER can turn people away) and provide you any education. A 2004 estimate had states spending over 28 billion a year on education for illegal immigrants. Education is great, but this is a drain on the US education system that is already falling behind and struggling to find funding to keep up.

Third, illegal immigration causes more crime and raises crime rates.

“violent crime and drug distribution and possession is also prevalent among illegal aliens. Over 25% of today's federal prison population are illegal aliens. In some areas of the country, 12% of felonies, 25% of burglaries and 34% of thefts are committed by illegal aliens.” source

There is a huge drug problem on our boarders with drug cartels getting stronger in Mexico and more daring when it comes to the US Mexico border. Gangs in the US are getting more formally engaged with drug cartels to care out their needs on the US side of the boarder.

Here are a few more statics from that same source.

• In Los Angeles, 95% of some 1,500 outstanding warrants for homicides are for illegal aliens. About 67% of the 17,000 outstanding fugitive felony warrants are for illegal aliens.
• 80,000 to 100,000 illegal aliens who have been convicted of serious crimes are walking the streets. Based on studies they will commit an average of 13 serious crimes per perpetrator
• Illegal aliens are involved in criminal activities at a rate that is 2-5 times their representative proportion of the population.
• Illegal aliens commit between 700,000 to 1,289,000 or more crimes per year.
• Illegal aliens commit at least 2,158 murders each year – a number that represents three times greater participation than their proportion of the population.
• Illegal alien sexual predators commit an estimated 130,909 sexual crimes each year.
  • Nearly 63% of illegal alien sex offenders had been deported on another offense prior to committing the sex crime.
• The very brutal MS-13 gang has over 15,000 members and associates in at least 115 different cliques in 33 states.

I am not against legal immigration at all. I do believe that illegal immigration is a huge problem in this country and a drain on our society. The flow of illegal immigrants needs to be faced and at least slowed. The problem is not a simple as a bumper sicker.