"THE INVISIBLE HAND . . ."

"GOVERNMENT DOES NOT CREATE WEALTH . . . While Obama Swipes Flies 'W' SWATS OBAMA

"PRIVATE SECTOR NOT GOVERNMENT WILL FIX THE ECONOMY"

While the Amazing Barack Hussein the Multi-Tasker can kill a fly on CNBC, former President George W Bush took a swipe at Obama's agenda.  Speaking in Erie, Pennsylvania today W took a swipe at Obama's socialistic policies and in the process gave the business leaders listening to W, the political fly swatters needed to combat the Obama takeover of the U.S. economy.

The best quote which states the proper role of government by W was:

"Government does not create wealth.  The major role of government is to create an environment where people take risks to expand the job rate in the United States."

Notice W said nothing about saving jobs, but to expand the job market, this is what the private sector does best, create jobs.  Bush continued, "you (the people) can spend your money better than the government can spend your money."  While saying these words the U.S. Treasury announced that it will auction $104 Billion in debt next week, yes, that is a record.  The Obama administration and the greatest and most amazing economic team in history is not only killing flies, but is killing the U.S. Dollar and the entrepreneurial spirit that will produce risk takers who will create jobs.

 

-LEX REX

NOT THE END BUT THE BEGINNING OF THE END - - -

INFLATION:  IS THIS THE END OF THE US DOLLAR?

Terence Corcoran asks a simple question in his commentary piece for the Financial Post, "Is this the end of America?"  The article starts with "Helicopter Ben", a nickname of Bernanke's because he once referred to "Helicopters" full of money to rescue an economy from deflation, in an academic paper.  The article ends with the US dollar in decline and America the source of a new inflationary outburst because of the expansion of the money supply.  

U.S. law-making is riddled with slapdash, incompetence and gamesmanship

By Terence Corcoran 

Helicopter Ben Bernanke’s Federal Reserve is dropping trillions of fresh paper dollars on the world economy, the President of the United States is cracking jokes on late night comedy shows, his energy minister is threatening a trade war over carbon emissions, his treasury secretary is dithering over a banking reform program amid rising concerns over his competence and a monumentally dysfunctional U.S. Congress is launching another public jihad against corporations and bankers.

As an aghast world — from China to Chicago and Chihuahua — watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America?    READ FULL STORY

This week Russia is promoting that the world substitute the US Dollar for a basket of currencies as the standard for reserve, thus the US Dollar is in jeopardy of losing its Reserve Status.  READ FULL STORY

Also, this week the US Dollar had its biggest single week decline since 1985, Read full story.

Is this the beginning of the end?  For the US Dollar, the answer is yes.  Gold at $950 an ounce is a very good buy, because the way Helicopter Ben and Obama is dumping Cash into this economy, skyrocket inflation is just around the corner.

Lex Rex

THE ORACLE OF OMAHA SPEAKS . . . "It's fallen off a cliff . . . people have changed their behavior."

WARREN BUFFETT:  "It's FALLEN OFF A CLIFF."

Warren Buffett to CNBC: Economy Has 

"Fallen Off a Cliff"

Posted By: Tim Tompkins, Lex Rex The Invisible Hand.

Topics:Warren Buffett

Companies:American Express Co | 

Berkshire Hathaway Inc.

Warren Buffett tells CNBC's Becky Quick the U.S.

 economy has "fallen off a cliff."

During a three-hour appearance on Squawk Box this 

morning (Monday), Buffett said economic developments 

have been very "close to the worst case" 

that he had imagined, although conditions would be far 

worse if the Federal Reserve hadn't stepped 

in last September.

Other highlights:

The economy "can't turn around on a dime" and a 

turnaround "won't happen fast."

Predicts unemployment rate in U.S. will go well above 

its current levels before the downturn ends.

But, five years from now, the economy will be running 

fine.  The strength of the American system will pull it 

through, just as it has many times in the past.

Democrats and Republicans should work together and 

not try to take advantage of the economic situation 

to achieve partisan goals.Inflation has the "potential" to be 

worse than the 1970s.

Most banks are in "pretty good shape" and can

 "earn their way out" 

of the current problems given the low cost of funds.  

Banks, however, "need to get back to banking."

Extremely important that the government make clear 

depositors won't lose their money if banks fail.  

Obama needs to make a 

"clear statement" in support of the banking system. 

Berkshire is restricted from buying more American Express

AXP 10.64    0.38  (+3.7%)   ]stock, but that doesn't 

mean it is not a "hell of a buy" at $10 a share.

Wishes he had written the 

New York Times "Buy American" piece

 a few months later, but stands by the basic argument 

that you'll do better over a ten-year period with stocks 

that you will with Treasuries.  

He said in the article he wasn't calling the bottom of the stock market, 

and he still isn't.

Buffett says derivatives are not "evil" and to be avoided 

at all costs, but they are "dangerous" and should 

be used very carefully.  

He still expects to make money on the long-term "put option"

 equity derivative contracts Berkshire has written. 

Housing market could work through, or "sop up," its 

excess supply in as little as three years if new construction 

is reduced to a level below natural population growth.

The U.S. economy was not a "house of cards" over the 

past ten years, but mistakes were made when 

it came to borrowing money.

Mark-to-market accounting should be retained, 

but regulators shouldn't use it so much to require insitutions 

to increase their reserves.

"Probably the uptick rule" is a good idea.

Mistake to "demonize" corporate executives for using 

private jets.  Having a jet has helped Berkshire make deals 

in the past.

Praises Ben Bernanke's leadership as Federal Reserve Chairman.

The Oracle Speaks . . . is Obama listening, or 

do we really care?

-Posted by Lex Rex

CAN USA or DOW JONES SURVIVE AN OBAMA PRESIDENCY?

41 DAYS SINCE CHANGE TOOK OATH OF OFFICE

CAN DJI OR USA SURVIVE?

S&P 500 and Dow losses top 20% after two months

US stocks nosedived today in another grim Monday as shares were hit by bad news that brought equities to historic lows.

The S&P and the Dow Jones both fell more than 4 per cent, bringing their losses for the year to more than 20 per cent, the measure for a bear market.

The Dow traded below 6,800 points for the first time since October 1996 at 6,763.29, a fall of 4.2 per cent. The S&P briefly fell below 700 points and finished down 4.7 per cent at 700.82.

Clearly, the markets have no confidence in Obama or his team.

And now Obama wants to confiscate over a trillion dollars through his catastrophic tax hikes. What do you suppose a tax hike like that will do to the economy?

I do not believe the Dow Jones Industrials or the USA's economy can survive an Obama Presidency, just in 41 days Obama has turned the DJI into the CHA-CHA- SLIDE.  He is also giving high productive earners a chance to avert the tax hikes.

ABCNews.com in its article Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan

President Barack Obama's tax proposal – which promises to increase taxes for those families with incomes of $250,000 or more -- has some Americans brainstorming ways to decrease their pay, even if it's just by a dollar.

In the wake of Obama's tax proposal being unveiled, some Americans are doing everything they can think of to fall beneath the $250,000 mark so they don't have to pay more in taxes under the plan.

(ABC News/AP)

A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.

It has only been 41 days, how much can the DJI and the USA do when you have the President of the United States bailing more and more and more water into the already water filled ship of the USA economy.  I just pray that American's wake-up and at the mid-term elections, fill the house and senate with Conservative politicians, who will promise Grid-Lock to stop the Obama Socialism Train-Wreck.

-Lex Rex

DHARAVI SLUMDOG WINS BEST PICTURE, A STORY OF SURVIVAL WHERE HOPE EXISTS

SLUMS OF DHARAVI MUMBAI, INDIA

The rollicking wish-fulfillment film “Slumdog Millionaire,” nearly dumped into the marketplace last year as a direct-to-DVD offering, fulfilled its destiny Sunday at Hollywood’s Kodak Theatre, taking 8 out of 10 Academy Awards for which it was nominated, including best film, best director, best adapted screenplay, best cinematography and best score.

Even before its big night, Danny Boyle’s film had grossed more than $160 million worldwide, a little more than 10 times its modest production costs. And for the first time since “Oliver!” 40 years ago, a rags-to-riches crowd-pleaser about an orphan overcoming the worst sort of human venality, ending with a big dance number, left the Oscar ceremony with a best picture statuette.

So today off I went to view Slumdog Millionaire, just to see for myself, the best picture.  After viewing this film, and yes it was very good, I wanted to present to you the story of survival, because the slums, maybe unknown to Americans are stories of survival, as Slumdog Millionaire illustrates.  

What, exactly, are slums? Some, especially in the developed world, are once-affluent neighborhoods gone to ruin; others were once public housing. But most are gigantic, tightly packed concentrations of flimsy shacks and shanties that rural migrants have built on the outskirts of cities—what the UN calls “vast informal settlements that are quickly becoming the visual expression of urban poverty.”

Most of these settlements are in the developing world. Of the 924 million slum dwellers worldwide in 2001, 554 million lived in Asia, in such cities as Mumbai and Kolkata in India and Karachi in Pakistan. Another 187 million lived in Africa, in places like Cairo, Durban, Johannesburg, and Nairobi. And 128 million lived in Latin America and the Caribbean (famously, in the favelas of Rio de Janeiro and São Paulo). Only 54 million were in developed countries.

Here is a look into the Dharavi Slum in Mumbai, where the movie was filmed:

 

Capitalism, Free Trade, Private Property are all keys of hope for the inhabitants of the slums of Dharavi, just as Johnny Lever, the Bollywood Comic,  escaped the slums and as many others do as India's economy expands.For some, escape is still just a dream

Meantime, the slums encroach on the doorstep of one of Mumbai’s most wealthy suburbs, Andheri, sometimes referred to as Mumbai’s Beverly Hills. It is where Bollywood’s top actors and producers live, and where we met Johnny Lever, one the country’s most popular comedians, who has acted in more than 300 Bollywood movies.

Lever was born and raised in Dharavi, where as a child he scraped a living for his family by mimicking movie stars. He had no formal education and could not speak proper Hindi (he spoke the street slang of the slums), but his impersonations and song and dance routines eventually drew the attention of the real Bollywood.

"If you have talent, nothing can stop you," he told me. "You can get out of the slums."

Ahire isn’t so sure. "I realized my dream," he told me. "I became a doctor." But for most of those living in Mumbai’s teeming slums getting out of the slums remains just that – a dream.  The only key is CAPITALISM, FREE TRADE, EDUCATION, & PRIVATE PROPERTY RIGHTS, the same keys that developed the greatest nation and economy on earth, USA.

-Lex Rex

RONALD REAGAN ENJOYS A BIG MAC: INDIVIDUAL RESPONSIBILITY vs. STATE INTERVENTION

"BIG MAC" RONALD REAGAN THE REAL DEAL

Yesterday, marked a key date in American History, Obama signed into Law the biggest one time expansion of Government in USA's History.  It is also interesting to note, that on this day back in 1981 President Ronald Reagan addressed the nation in an address to the Joint Session of Congress, outlining His plan for economic recovery.  Today, Obama gives a speech about the Home Mortgage Crisis.  The two speeches talking about pressing economic times in America's History, and approaches to solve those problems, however, the dialog and solutions are much different.  

President Reagan's address speaks of hope, optimism, and individual responsibility, whereas Obama's address resonates a doom and gloom with nearly a Trillion in State Intervention.  

The Economic Picture under Reagan was bleak, He came into office with 13.58% Inflation, 7.6% unemployment rate with roughly 8,273,000 unemployed Americans,  the purchasing power of the Average American Salary was plunging faster than the Titanic.  This is how the Real Deal, Big Mac Ronald Reagan responded:

Can we, who man the ship of state, deny it is somewhat out of control? Our national debt is approaching $1 trillion. A few weeks ago I called such a figure, a trillion dollars, incomprehensible, and I've been trying ever since to think of a way to illustrate how big a trillion really is. And the best I could come up with is that if you had a stack of thousand-dollar bills in your hand only 4 inches high, you'd be a millionaire. A trillion dollars would be a stack of thousand-dollar bills 67 miles high. The interest on the public debt this year we know will be over $90 billion, and unless we change the proposed spending for the fiscal year beginning October 1st, we'll add another almost $80 billion to the debt.

Adding to our troubles is a mass of regulations imposed on the shopkeeper, the farmer, the craftsman, professionals, and major industry that is estimated to add $100 billion to the price of the things we buy, and it reduces our ability to produce. The rate of increase in American productivity, once one of the highest in the world, is among the lowest of all major industrial nations. Indeed, it has actually declined in the last 3 years.

Now, I've painted a pretty grim picture, but I think I've painted it accurately. It is within our power to change this picture, and we can act with hope. There's nothing wrong with our internal strengths. There has been no breakdown of the human, technological, and natural resources upon which the economy is built.

Based on this confidence in a system which has never failed us, but which we have failed through a lack of confidence and sometimes through a belief that we could fine-tune the economy and get it tuned to our liking, I am proposing a comprehensive four-point program. Now, let me outline in detail some of the principal parts of this program. You'll each be provided with a completely detailed copy of the entire program.

This plan is aimed at reducing the growth in government spending and taxing, reforming and eliminating regulations which are unnecessary and unproductive or counterproductive, and encouraging a consistent monetary policy aimed at maintaining the value of the currency. If enacted in full, this program can help America create 13 million new jobs, nearly 3 million more than we would have without these measures. It will also help us to gain control of inflation.

Out of that partial explanation of USA's troubles in 1981 is the power of the individual, not the collective or State.  Now, today, our unemployment is 5.8% with nearly 8,924,000 unemployed, our inflation is around 3.25% and President Obama is still prophesying DOOM & GLOOM even after the MASSIVE STATE INTERVENTION has become law:

"Our housing crisis was born of eroding home values, but also of the erosion of our common values. It was brought about by big banks that traded in risky mortgages in return for profits that were literally too good to be true; by lenders who knowingly took advantage of home buyers; by home buyers who knowingly borrowed too much from lenders; by speculators who gambled on rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.

"So solving this crisis will require more than resources -- it will require all of us to take responsibility. Government must take responsibility for setting rules of the road that are fair and fairly enforced. Banks and lenders must be held accountable for ending the practices that got us into this crisis in the first place. Individuals must take responsibility for their own actions. And all of us must learn to live within our means again.

"These are the values that have defined this nation. These are values that have given substance to our faith in the American Dream. And these are the values that we must restore now at this defining moment.

"It will not be easy. But if we move forward with purpose and resolve -- with a deepened appreciation for how fundamental the American Dream is and how fragile it can be when we fail in our collective responsibilities -- then I am confident we will overcome this crisis and once again secure that dream for ourselves and for generations to come."

Mr. Obama's tone focuses more on the State, the government, and the collective, why should the government step-in, when an individual does not manage his money in the right way?  Sometimes an individual learns from Bankruptcy, i.e. Walt Disney, Abraham Lincoln, sometimes the best course of action is to lose your home and start again, learning from your mistakes.   Individual Resilience  and self-reliance, individual responsibility is all lacking from Obama's initiative, unlike Reagan, the real deal, who provided us with the road map to the greatest economic expansion in the USA:

reduce the growth of government spending,

reduce marginal tax rates on income from labor and capital,

reduce government regulation of the economy,

control the money supply to reduce inflation.                

THE KEYS TO ECONOMIC RECOVERY FOCUSING ON INDIVIDUAL RESPONSIBILITY AND LESS GOVERNMENT,  thank you, President Ronald Reagan, and thank you for showing us we must buy our own BIG MAC.

-LEX REX 

I FEEL STIMULATED ALREADY, OBAMA IF YOU READ THIS I WILL BUY YOU A BIG MAC!!

1079 OF UNREAD PAGES SIGNED INTO LAW

Never sign a document you have never read, my law professor in contracts explained, hmm sounds like good practical advice.   So how does a Bill become a Law?  Well we have a massive law at this moment, the Stimulus (SUCCUBUS) Bill that no one has read, in the days, maybe even into the months ahead the veil will be lifted and will have a clear idea of all the little details that are inside this massive bill, the bill that is too big to read, but not too big to sign into law.  Read Full Story

You know this reminds me of the time in college, I had a professor that assigned weekly papers.  I knew deep in my heart he did not read them, so I devised a plan.  On my next paper, I put into the middle of the paper this sentence:  "If you read this, I will buy you a Big Mac!!!!!"  Guess what, I never had to buy that professor a Big Mac.  Maybe in this 1079 pages, all Americans will get a free Big Mac, or maybe free Health Care, or maybe free car insurance, or maybe free life insurance, or maybe a free lawyer, whenever you need one?  Who knows, but I am hoping for the Big Mac.  

I do know this, I feel stimulated already, hoping for my free BIG MAC, and so does Missouri, soon after Obama signed the Bill into law work began in Missouri on a bridge the first project under the stimulus bill.

READ FULL STORY

SO where is my free Big Mac?  I probably will not get a free Big Mac out of the deal, but we may get another stimulus, while signing the bill Obama hinted that this may not be enough, we may have to reverse, this may be a failure, so has the bill already failed?  In the WORDS OF OBAMA:

Today does not mark the end of our economic troubles. Nor does it constitute all of what we must do to turn our economy around. But it does mark the beginning of the end -- the beginning of what we need to do to create jobs for Americans scrambling in the wake of layoffs, to provide relief for families worried they won't be able to pay next month's bills and to set our economy on a firmer foundation, paving the way to long-term growth and prosperity.

SUCCUBUS II coming to the USA, soon, very soon  . . . . to be continued.

-LEX REX

THANKS TIM, DRUDGE REPORTS, BUT DON'T BLAME TIM HE IS JUST THE MESSENGER

THANKS TIM

This is the headline on Drudge Report, and it leads to this story on CNBC News, 

Stocks Tumble as Bailout Plan Is Unveiled

The Dow Jones Industrial Average was down nearly 300 points after Treasury 

Secretary Tim Geither revealed details of the bank-bailout plan. Earlier, the blue-chip 

index was down less than 100 points.

Some market pros said the market selloff was simply a case of 

buy on the rumor, sell on the news. Tony Crescenzi of Miller Tabak said 

Geithner spoke to the wrong street: Main Street instead of Wall Stree"The problem is that Geithner needed to speak more to Wall Street, where the problems lie, 

rather than stay at a distance as he did, and leave Wall Street with too few details 

with no roadmap by how it might find its way out of current difficulties," Crescenzi wrote 

in a note to clients.

The "Financial Stability Plan," as it's now called, consists of four main components:

1) It will set up a public-private fund to mop up to $500 billion of spoiled bank assets.

2) It will set up a consumer-lending facility to support up to $1 trillion in new lending.

3) It will devote up to $50 billion to help stem home foreclosures.

4) It will provide new funding to banks after a "stress test" to determine if the bank is healthy.

Some market watchers remain skeptical over the benefits of the plan and legendary 

investor Jim Rogers told CNBC it could even make things worse. 

The bailout will plunge the US further into debt and it is designed by 

the same people who failed to forecast the crisis in the first place, Rogers said.

However, the Drudge Report is incorrect, Tim Geithner is only the messenger, the real culprit and benefactor of our praise should be President Barack Obama and all the Euopean Socialists in Congress who back the Stimulus, I mean SUCCUBUS bill.   Meanwhile GOLD went up 1.87% as Tim was being the message boy.  You know I feel like I am watching one of those movies, that by the first 10 minutes I know how it is going to end and You hate the ending.  Well the USA is in one of those movies and the American People are going to hate the ending.

-LEX REX

TO SUCCUBUS OR TO DO NOTHING, THE BEST RESPONSE IS TO DO NOTHING

Rahn Emmanuel is on  record saying that, "Never let a serious crisis go to waste. What I mean by that is it's an opportunity to do things you couldn't do before."   President Barak Obama is using the economic downturn to bring an EUROPEAN SOCIALISM TO THE USA, through his STIMULUS BILL.  The REPUBLICANS in the House and many economists, business owners and fiscal responsible Americans are saying enough is enough.  However, there is a strong case for doing nothing, let the recession play out its course.  In fact the POLITICO reported, THE CASE FOR DOING NOTHING  Instead of fighting over what should go in the economic stimulus bill, pitting infrastructure spending against tax cuts and contractors against contraceptives, they say lawmakers should be fighting against the very idea of any economic stimulus at all. Call them the Do-Nothing Crowd. 

“The economy was too big. It was all phantom wealth borrowed from abroad,” says Andrew Schiff, an investment consultant at Euro Pacific Capital and a card-carrying member of the stand-tall-against-the-stimulus lobby. “All this stimulus money is geared toward getting consumers spending and borrowing again. But spending and borrowing were the problem in the first place.” 

Washington has a habit of passing legislation in a crisis and suffering from morning-after regrets — the Iraq war, the Patriot Act and last year’s original bank bailout plan come to mind. So we thought it would be wise to air the views of the naysayers toward Washington’s latest consensus approach.   READ FULL STORY

The best name for this stimulus bill was coined by the Mike Church show on Sirius Patriot 144, he is calling the Stimulus bill SUCCUBUS, you ask what is a SUCCUBUS, well you can watch the SOUTHPARK video after you read this, but SUCCUBUS is this stimulus bill, because it sucks the life out of our free-market economy and it brings about a tyranny that controls every aspect of our lives, just like this bill would do.  Here is Mike Church:  "Once again, don’t you – I don’t want to ever catch you people calling this stimulus “stimulus” any longer.  It’s succubus.  It sucks the life out of the economy, just like the succubus.  And so an alternative was offered here.  Now, I’m not completely sold on the alternative.  I’ve already given you – [whiny voice] well, Mike Church, what makes you so smart?  Give us your economic recovery plan.  I’ve already given it to you.  I’ve already told – I’ll reiterate it again.  Let me give you the alternative plan, bipartisan plan here.  Bipartisan because it’ll save you liberals’ asses, too.

One, cut the capital gains tax rate to 0.0.  Did you hear me?  Zero point – no capital gains tax.  This will encourage people to cash in assets that they have and to invest them in productive measures because they don’t believe they’re going to get a return in the market.  So they’re just holding right now.  And they don’t...."

I do not know if the Republicans in the Senate can defeat the SUCCUBUS, but our very existence as a free-market capitalism depends on that, so lets DO NOTHING AND DEFEAT THE SUCCUBUS.

South Park Succubus
 

-LEX REX

GRANDMA'S TV ANOTHER EXAMPLE OF GOVERNMENT INTERVENTION GONE AWRY

This just in Senate votes to delay the February 17, 2009 date for 4 months.  

WASHINGTON POST STORY

Obama wants a delay on Digital TV transition.  MSNBC STORY

TV Converter Box Runs Out of Money.  Read Story

According to Nielsen 6 Million Households Not Ready for Digital TV Transition. 

 Read Full Story

In the EIGHTIES the Battle Cry was I want my MTV, and with Ronald Reagan, it was "THE GOVERNMENT IS THE PROBLEM, NOT THE SOLUTION."  Now some 28 years later, the American people have just elected a President who believes all problems can be solved by the Government.  If the February 17, 2009 the hard date to switch from analog broadcasts to digital is any indication, the Government is the problem.  By the way in what part of the Constitution is the authority given for the U.S. Government to provide TV converter boxes?  Oh yea the ever present Commerce Clause, as I speak this all the founders of these United States are rolling in their graves, but that is a whole other issue.  This whole Digital TV transition mandated by the US government reinforces the idea that the government is the problem,some things are better served by the private sector, that is about everything under the sun except maybe, National Defense (Army), police, and the courts.  Obama has a stake in this transition and he wants it delayed, which it probably will be if the House goes along with the Senate.  You see President Obama will get the blame if the American People wake-up on February 17, 2009 and their TV does not work, that is probably enough to get George Bush like approval ratings, so Obama wants to delay until all are covered.  Here, is an editorial that explains how Governmental Intervention creates more problems than it solves. 

Feds fumbling digital TV transition

Switch from analog signals deemed too important to leave in private hands, with predictable results

If you watch TV for more than a few minutes a day, you have probably seen ads and public service announcements about the Feb. 17 changeover from analog to digital television broadcasting. During the other transition, several officials of the incoming Obama administration have suggested pushing back the transition date three months, and West Virginia Democratic Sen. Jay Rockefeller has submitted a bill to push back the date to June 12.

Why the fumbling and confusion? The short answer is that the government, beginning as far back as 1988, decided that the transition from analog to digital TV, unlike the transition from analog to digital sound recording, which took place during the 1980s (though some audiophiles still swear that analog was better), was too important to be left to the "anarchy" of the marketplace. So the Federal Communications Commission, under legislation passed in 1996, has handled this transition. Not surprisingly, it has been driven more by political than by technological or economic considerations.

The cellular telephone industry has made the transition from analog to digital. Did you read articles about the problems? Were you even aware of it? Probably not, because it was handled in the competitive marketplace with a minimum of fuss and feathers.

The advantages of digital TV broadcasting are essentially twofold. Digital broadcasting permits sharper resolution of the picture using a smaller portion of the broadcast spectrum and more efficient broadcasting of high-definition signals. Conversion will also free up the frequency spectrum to allow for more uses of the increasingly popular hand-held devices like BlackBerries, iPhones and the like.

There are other reasons for TV broadcast stations to go digital. Because it takes up less bandwidth, a station can use the same space in the spectrum for several signals, including interactive services. Digital signals react less to interference than analog signals; so, there is no "ghosting."

So there are solid market-related reasons for TV stations to switch. But instead of permitting them to do so at their own convenience or when they would alienate the fewest number of customers, the FCC has handled the conversion through mandates.

All television sets sold in the past four or five years are equipped to receive digital signals, and cable and satellite systems also use digital technology. But people with older analog sets – who tend to be older or lower-income people – or those who use their old analog TV sets in secondary household locations, will need a converter box. There's a government (i.e., taxpayer-funded) program that provides a $40 coupon to help pay for converter boxes. But John Podesta, co-chairman of President Obama's transition team, says the program has not kept pace with demand, and some 2 million people are now on a waiting list for coupons. Thus the pressure to delay the conversion date.

In addition, the characteristics of analog and digital signals are different. Most people will get better reception and more channels with converter boxes and digital signals. But a small percentage of people, mostly in rural areas (the FCC estimates that 11 percent of stations will have a signal that reaches 2 percent fewer viewers) will actually get fewer channels with digital transmission.

It only takes a small number of people negatively affected by a technological change managed and mandated by the government to get politicians posturing and introducing legislation.

Given that the conversion date has been delayed several times already, and it costs TV stations to send out both analog and digital signals, which they are doing now, the best bet, despite the fact that there will be a few problems, is probably not to delay the conversion date again. But the experience demonstrates that although technological changes always involve some friction, expense and inconvenience (what did you do with all your old vinyl records?), they generally are better handled in the private marketplace than through government management.

-LEX REX