Business, Politics

Credit, Where Credit is Due

09.25.08 | Permalink | Comments Off on Credit, Where Credit is Due
Bush giving speech

Yes, the title is intended to be clever. This is about President Bush’s speech last night. Those of you who read this blog often will know I don’t have much good to say about our current chief executive. Surprisingly, I listened to his speech last night and found it cogent and coherent – something that has not often been said about Mr. Bush and certainly not by me.

Does this mean I’m comfortable and supportive of the $1T bailout ($85B for AIG, $200B for Freddie/Fannie, and this latest $700B handout) – in a word, no. But I do understand the rationale and provided that basic protection, adult supervision, prevention of repeat measures, executive compensation limits, and transfer of assets actually occurs for us tax payers, I will reluctantly support the plan because I do believe it’s better than the alternative.

So, Mr. Bush, while we still have many, many differences, your 22nd attempt at addressing the nation was not painful to listen to and made a great deal of sense. I tip my hat to you sir for stepping up in an untenable situation. That being said, I will not be sorry when you leave office next year.

Business, Politics

Burned by Bailout?

09.22.08 | Permalink | 1 Comment
Pile of cash, why hand $700B over to the morons who caused the crisis in the first place?

The more I think about this bailout, the more uncomfortable I become. Do we need to do something? Yes. Do we need to move with some pace? Yes. Do we need to do what the Bush Administration is pushing for? Not so fast my friend. Remember, this is the administration that has routinely screwed up two car parades. Perhaps a sober pause to consider options is in order?

First off, there’s the principle. We believe (and I certainly believe) in a market-based economy. So, we’re going to protect the financial institutions and home owners who made bad decisions from the market? How does this square with our system? What sort of precedent does it set? We’re simply going to raise a huge pile of money and hand it over to the very people who created this problem with their greed and bad judgment? Yeah, that sounds like a GREAT IDEA. Thank you sir, may I have another?

Here’s the key question: Why should we hand over a pile of cash to the same morons who created this crisis?

Perhaps there is another alternative we should consider? Let’s create a Resolution Trust Company-like entity and capitalize it with say $100B. Let’s put a trusted Financial expert in charge of the company with a Board of Directors representative of shareholders. Let’s have that company start buying the paper in a reverse auction like mechanism where other institutions can participate (if they’d like – and they won’t.) Let’s give each taxpayer stock in said company such that when the housing market does return from the brink, there is a possibility for recovering funds from the company (heck, put the returns in Social Security in trust for the public.) If $100B isn’t enough, authorize another capitalization round like any other company would.

Meanwhile, re-regulating some of the market activities might be a good idea since the industry has proven it is incapable of governing itself. While we’re at it, some accountability from the financial industry would be a good thing. The executives leading these companies shouldn’t profit from their malfeasance – perhaps even, criminal inquiries are in order. Golden parachutes shouldn’t be available to those who led the country into this mess. If we’re not going to help the individual home owner and we’re not going to help the employee who’s job is now gone, then those in charge should suffer the same consequences.

This preserves the transparency, accountability, and market economy we know and love. It doesn’t set any weird precedents. And it provides for some upside to the people who will fund this bailout, us. Let us not simply hand over another Trillion dollars to the idiots who got us into this mess in the first place, please!

Business, Politics

$6,900, May I Have A Receipt?

09.21.08 | Permalink | Comments Off on $6,900, May I Have A Receipt?

Well, I did the math on the bailout. IF it only costs $700,000,000,000 (that’s $700 billion) and there are 303,000,000 (303 million citizens – current census estimate) then each person’s share, child, woman, and man, is just north of $2,300. That means for a family of three like ours, the bill is $6,900. Now, I don’t believe for a moment it’s going to be $700B, I think if we get off for a Trillion dollars – think about that for a moment – a Trillion dollars – we will have done well.

Now, do we have a choice? No, I don’t think so. Should we put some controls around the bailout mechanism? You bet. That doesn’t seem to be in the proposal. In a continuation of the largest movement of public funds (our money) to a small number of Bush beneficiaries, you can bet that we’re going to see every kind of bad decision security banks hold take advantage of this bailout. Who can blame them?

Meanwhile, back at the campaign, neither Senator Obama nor Senator McCain have any sort of credible answer about what specifically they would do, or we should do. That’s likely a winning strategy for Obama, but not what I expect from a leader. Mr. McCain continues to do his dance about how he’s a reformer. Oh yeah, I remember, in 1989 in the shadow of the savings and loan fiasco, he was a part of removing the regulation from the banks that caused this in the first place. Any ownership from him? No. His idea? Combine Federal agencies for better supervision. In other words, rearrange the deck chairs on the Titanic.

Now, when we’re spending more than we take in on an annual basis, we’re signing up to take on nearly a Trillion dollars more debt, does either candidate have a sound fiscal plan? Check the chart out below on the revenue side of the equation (courtesy of

Comparison of Obama/McCain tax plans

Now, I’m not an economics expert, but I can add. If you continually spend more than you make, you have a problem. If you sign on to handle debts that you cannot pay, you have a problem. The problem has a solution, you spend less and try to make more. You don’t take on extra commitments when you can’t meet your current obligations. Our government is operating under the check theory of economics. “What do you mean I’m out of money, I still have checks?” And that’s bad for all of us.


Politics of Lying

09.20.08 | Permalink | Comments Off on Politics of Lying
How can you tell a politician is lying? Check to see if their lips are moving.

First a joke. How can you tell if a politician is lying? Answer: Check to see if their lips are moving.

One troubling trend this campaign season is the emergence of out and out lies. There are always half-truths and lies of omission (Obama pull a doozy with Carly Fiorina’s comment on McCain/Palin not being ready to lead a large corporation conveniently omitting that Fiorina said the same of he and Biden.) The one that really puzzles me is how this “bridge to nowhere” non-sense is playing out.

The claim: Palin is a maverick reformer who said no to earmarks and wasteful Federal spending.

The facts: Palin supported the project in question publicly during her campaign for governor. After elected, Federal support for the project was withdrawn. Palin and Alaska kept the money.

This isn’t a case of gilding the lilly, it’s an outright lie that has been propagated by the campaign and the media. When confronted with this subject, the campaign manager for McCain said “we’re in this to win” inferring they just don’t care, they’re going to say whatever it takes to get McCain in the White House. The Obama campaign hasn’t been nearly as blatant, there tack has been one more of omission and selective story telling, their campaign manager hasn’t indicated they’re willing to say anything, but is the pressure any less on that campaign?

What are the politics of lying? I can’t see that there is any downside for candidate A to claim that candidate B practices satanism backed by quotes from second and third-hand sources. It’s not as if anyone is being held accountable for what they’re saying. Doesn’t this bother anyone?

Humor, Politics

Market Manipulators will be Persecuted

09.19.08 | Permalink | Comments Off on Market Manipulators will be Persecuted
Bush mangles the English Language, Again!

You know, when Bush leaves office we’ll be losing a great source of humor and general mangulation of the English language. This morning I had the chance to hear the President’s speech on the corporate welfare being extended to large financial institutions and in a section discussing short sellers, Bush said, and I quote “You will be caught and persecuted.”

He likely meant prosecuted, in fact, it’s a safe bet the word prosecuted rolled across the teleprompter. But persecuted is the word that came out. An interesting Freudian slip to be sure…..It’s kind of like operation Enduring Freedom – did anyone think about that for a nano-second before moving forward? Lasting freedom was the intended meaning no doubt, but when I read it I interpreted it as putting up with freedom as long as we can.

In a year’s time when we have a more articulate administration, this sort of gaffe will be a thing of the past. But hopefully, there will be something else to poke fun at……

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