We seem to be missing the larger picture somewhere in the middle of the debate about income inequality and minimum wage. Chief Executive Officers,  whose pay has traditionally been measured by the truckload, have forgotten who their clients are. Henry Ford knew. Henry was in favor of higher wages for his workers and a shorter work week - both of which would be considered heresy by today's standards. Why, because Henry was selling cars and he wanted his workers to not only be able to buy his product but have the time to use it thereby increasing the demand. Is this rocket science? No. Why is this too complicated a concept for Walmart or McDonalds? For the record I am not in favor of a government mandated minimum wage however; I think paying the workers the absolute lowest possible amount is short sighted and bad business in the long run.

One of the lingering hangovers from the financial meltdown is the litigation concerning interest rate swaps. Wall Street sold these complicated instruments to everybody they could find and the havoc these swaps have caused is enormous. The story of this is still under the radar but countless school districts, colleges, towns, states etc. have experienced real monetary pain because of this product. What the banks did borders on the criminal. Somebody once said that if a banker ever comes to you to sell you a product it is time to lock up your wallet and hide the livestock. Good advice. Take it.

Things I expect for 2014:

Interest rates will rise slightly under their own power, the Fed will continue to reduce QE monthly bond purchases but there is enough liquidity in the world to absorb the extra supply.

The economy will slow down in certain sectors like housing in response to higher rates. I expect the housing sector to cool off a little as people adjust to higher mortgage rates, this should be a pause nothing more.

The dollar should strengthen and the US economy will see a slight erosion of the competitive edge it has enjoyed due to the weak currency. This will be most notable in areas like New York City which benefit from tourism.

Stock market should continue to march but not at an annual 30% clip like last year.

It might be too much to wish for, but it seems like some of the mean spirited, nasty, partisan gridlock in Washington might be easing. Fingers crossed.

Today Senator Patty Murray and Rep Paul Ryan are touting a new "bipartisan" budget deal. A better name for the deal would be "business as usual". We are witnessing the triumph of the military industrial complex as they have successfully reinstated spending to pet defense contractors while promising that we will save some money in the future on something or other.  Murray who represents Washington state where I believe every other person works for Boeing and Ryan, who receives significant campaign contributions from defense contractors, have returned to business as usual in our nation's capital. Their bill is being strongly defended by John Boehner who hails from Ohio where we manufacture the Abrams tank which is then driven to Nevada and stored in the desert because nobody needs all the vehicles we are producing. The sequester is not an ideal choice for fiscal policy but at least the spending cuts were across all sectors. This current "deal" signals that nothing is changed.

Pope Francis has made numerous statements recently about economic inequality. I think this is a good thing. Some commentators took exception to this (i.e. Larry Kudlow) as if economics exists in a vacuum. Larry seemed to be outraged that the Pope didn't say you should make all the money you can all the time with little regard for the consequences. I don't think basic human concern for the impact of economic events on the lives of people is off limits. Life has to be about more than money. In New Jersey, the state  recently gave approval for on line gambling . At the same time, in response to the Affordable Care Act, the state took no steps to make health care available on line..  I am not endorsing the Affordable Care Act nor condemning gambling, I just think is sad that the state has these priorities.

"Alan Greenspan, won't you please go home"

The only thing worse than the policies pursued by the former Fed chairman is the current book tour he has embarked upon to try to convince somebody he wasn't at fault for the 2008 financial crises. Alan has appeared everywhere recently to tout his book "The Map and the Territory". Greenspan is trying to justify the enormous mistakes he committed by implementing a deeply flawed monetary policy. Like all "experts" who are found to have feet of clay Alan acts like nobody could have foreseen the crash or everybody thought alike. This is 100% wrong. He was head of the Federal Reserve for god's sake! He is equating his knowledge with the average cab driver in NYC as to what is going on in the economy. Personally I think this is unfair to the cabbies who I believe had a clearer picture than Greenspan. Alan was too busy lapping up adulation from Congress to pay much attention to his real job.

The simple facts are that Greenspan was appointed by Ronald Reagan in August 1987. This was just in time to reap the whirlwind from the stock market crash in October and the Saving & Loans crises following the implosion of the junk bond market (not his fault). That economic set back was a mini 2008 and all the lessons that remained unlearned about unregulated lending activity by financial institutions came back to bite us in 2008. He had firsthand knowledge of how these events unfolded but now wants to believe that somehow people have changed the way they behave and "nobody" could have known.

In a larger sense it is time for many of our "leaders" to move on. Just because a guy has a dark suit and speaks in a deep voice the media acts as if everything he says is solid gold. This is regardless of the abysmal record of the individual's performance. So in addition to Mr. Greenspan, Larry Summers, Robert Rubin, Dick Cheney, John Bolton etc. should have the decency to exit stage left and be heard no more. This is based on their record of being wrong in most of their decisions and policies. It clearly transcends party affiliation.

The Government shutdown / debt ceiling breach is behind us for now. The "leaders " in Congress indicate they get the message that this type of brinkmanship is unacceptable to the business community and the saner of their constituents. The news media is acting as if the problem has been solved and reason and compromise have prevailed. Fat chance. During the government shut down more obscure Congressmen were on national news broadcasts than ever before. This is free money as far as a politician is concerned. First term Representatives from small states were sought after by CNN, Fox, NBC, etc. to recite their party's talking points as if they actually understood what they were saying. The only thing we can be sure of is that the "shutdown" taught Congress how wonderful all the media attention is for Congressmen. The economic incentives are now aligned to motivate Congress to keep doing what they are doing.

The history of the US is filled with demigods and charlatans who make a lot of noise and are dismissed by rational people as a mere annoyance. These people are dangerous and should not be dismissed lightly. They can cause serious harm to the country or the economy. We all need to remember politicians like Senator Joseph McCarthy and Senator Huey Long.

The silly season is upon us. Apparently the House of Representatives flunked 6th grade civics and doesn't really understand how our system of government works. If you want to get rid of a law you need to pass the new law in both houses and send it to the President to sign and if the President vetoes it you need a super majority to overturn it. This would entail making a coherent case for the new law and working hard to convince people that this is in their best interest. It is much easier to keep shouting to people who agree with you and avoid the messy process of actually doing something constructive. I guess we get the Congress we deserve. As an aside I do not know whether the Affordable Health Care Act will be good or bad, I do know as a business owner for 30 years that the current system is too expensive and inefficient.

I think if Congress is willing to "shut" the Government they should go all the way. Close the airports, the ports, the interstate, stop funding for Congress including pay for members, don't send Social Security checks, turn out the lights in the Capitol, tell the soldiers to go home, stop the defense plants in the congressional districts, etc. The current shut down has all the sincerity of a TV "reality" show. Just when you think Congress can't sink any lower they manage to lower the bar, again.

Wall Street is constantly changing. If you listen to the news media you would think that everything remains the same until Congress or the SEC decides to increase regulation or get more involved. That is not the case. Recent volatility in the financial markets have an very important lesson for the immediate future and provide an insight into the state of the US markets. This lesson is lost on most bond fund managers, which is why if you are invested in a bond mutual fund you have been getting killed recently. Wall Street has been quietly cutting their risk profile,not in response to the hue and cry of Congress but because a lower risk profile make better economic sense in terms of profitability. The fact that the big trading firms are less willing to carry inventory means that when institutional investors want to sell large blocks of bonds the price will drop farther and quicker than expected. A study of the corporate bond market in the late spring / early summer or the municipal bond market this summer will illustrate this point.

Wall Street firms have learned lessons from the financial crash of 2008, mutual fund managers have not.

Congress, who never cease to amaze, is warming up for another bogus discussion of the debt ceiling. Since all revenue bills must originate from the House the fact that the House is now considering not authorizing the funds to pay for the laws they have enacted makes less sense that usual. It is the equivalent of holding a gun to their own head and threatening to shoot themselves unless you stop them from doing what they just did. This is not fiscally responsible, it is just stupid.