about Jim Scott

My June Market Report is available. This month I wanted to take a step back from this recession and take a deep breath. I am not ready to jump off that bridge just yet.

My wife and I, by sheer happenstance, ended up staying in Normandy just two days after President Reagan spoke commemorating the 40th anniversary of D-Day. In the summer of 1984 Mr. Reagan and Americans were very popular in Europe, even in France. The mood amongst the locals was positively euphoric and at 10 to 1, the dollar was king in France.

Mr. Reagan’s speech was given to mark the end of a period of American funk, starting with the Vietnam aftermath and ending with a bout with colossal inflation rates.  His was a victory lap, a coronation recognizing a new era of American ascendancy in the West.

Mr. Obama’s appearance was about the future. The last administration throughly trashed America’s reputation abroad. His purpose was deliberate; to position himself as not of the past 25 years but as a new direction forward, but yet still linked to some of Mr.Reagan’s legacy in Europe.

The setting above Omaha Beach is more than the sum of its parts. You cannot be anything but in awe of what happened there and to feel an immense weight about you. There is no way to be on that beach or on the bluffs and not feel the experience in a transcendent and tragic sense.  You will ask yourself from what wellspring of personal courage and will did this collective effort come from?

Watching the speech I thought back to my own experience and found it diminished, not in a negative way, but by what it must have taken to endure that day.

Paul Krugman writes on economic affairs for The New York Times   and this week he wrote an interesting piece on our 40th President. It is topical because it relates to the current budget crisis in California. Without getting into too many specifics, Mr. Krugman’s thesis is that under Mr. Reagan the nation steered away from fiscal responsibility. Citing the explosion of the federal deficit and the dramatic decrease in personal savings, he argues that the era of getting something for nothing started in earnest in 1981.

Today in California the state must make 25 billion or so in immediate cuts to avoid running out of money next month. Nowhere is the debate is the dreaded “T” word mentioned. I suppose, at 9.3%, the income tax rate is fairly high. The problem is that, going back to Mr. Krugman’s argument, the citizenry has been conditioned to always want something for nothing. We want services but do not want to pay for them.

 The drama in Sacramento has got my attention. Ordinarily I avoid state politics as dull but today there is a real story being played out. How this gets resolved will impact our state dramatically over the next generation.