Why not bankruptcy?

I was a strong supporter for Barack Obama for President, and am still extremely hopeful that he will bring the change we need right now in America; however, today I am finding myself in more agreement with some of the Republicans on current issues. Specifically on the economy.

The issue of the day is a bailout for the auto industry.* Led by Carl Levin this bailout is being pushed by the Michigan congressional delegation who are being squeezed by the auto executives and their union allies. These are the same people who crated the mess by lobbying against increased fuel efficiency standards while they sold gas gusseling SUVs, pickups and Hummers. They are now also in partnership with Wall Street big wigs like Cerberus Capital Management who have gambled billions and are likely to loose their investment unless the taxpayers bail them out. Like the war on Iraq, like the three-page $700 billion financially system bail out, the auto crisis is now being portrayed as an immediate and impending disaster that requires a bushel full of money without any debate. We have seen this movie before. What about the taxpayer? Why should the taxpayer bear the brunt of their mismanagement and incompetence? Why not utilize the existing market mechanisms to bring about the changes we need? Specifically, why not bankruptcy?

The framing of the argument used by Levin and his cohorts (remember Carl Levin was also a leader on the Senate Armed Services Committee when they pushed the authorization to use force that got us into the mess in Iraq so he knows how to make the argument) is that if the US automakers fail, then there will be a loss of three million jobs. This is a false argument. It is not an either/or choice. The choice is not to give them a loan or watch them go out of business. There is another choice and that is a bankruptcy reorganization under Chapter 11. Levin paints the possibility of a bankruptcy reorganization as if it means that they will shut down these companies. Not true! Lots of companies have been through bankruptcy and come out of it as stronger, leaner and more competitive operations. A bankruptcy reorganization would likely remove the existing management, restructure the financing by removing the current owners, and yes, perhaps closing some inefficient parts of their organizations.

So why not get rid of the existing management? They have already failed. They put these jobs in jeopardy with poor management decisions supported by overreaching union leadership that focused more on getting unrealistic benefit packages than the viability of the enterprises. They failed to engineer new fuel efficient vehicles while their competitors did so. They failed to modernize their plants while their competitors built new ones here in America. They chose to diversify into non-auto related businesses that squandered their resources into mortgage banking, computers, and data management. They don't have a restructuring plan now and all they can do is threaten disaster if they don't get a loan. I can just about guarantee you that they will be back for more because they don't intend to make any fundamental changes in their operations. This situation cries out for a new management team that will be willing to make changes in their organizational cultures, products and manufacturing practices. This needs to happen before they get a dime of taxpayer money.

Why not restructure the finances of these companies? In the past few years, the auto makers have attempted to deal with some of their financial woes by selling investors from the private equity market to gamble on them. Big shots with deep pockets decided to take a gamble. Cerberus bought 50% of GMAC which at the time was the crown jewel of GM because it made money and subsidized the inefficiencies of the parent GM auto company. Cerberus also bought 100% of Chrysler after the German auto maker, Daimler-Benz decided they they could not make this company work. Other large well know investors have been in and out of these stocks over the last few years trying to make a fast buck by playing the market. These gambles have not paid off. It is now time for these investors to pay the piper. A bankruptcy reorganization will essentially wipe out the current stockholders, and replace the ownership of the company with the creditors. This will lower the debt service for the companies while streamlining the capital structure, and eliminating the outside influence of a hedge fund that is not obligated to report its financial performance to the public.

Will bankruptcy result in some job losses. Absolutely. There are many inefficiencies in these organizations from the top to the bottom: product development, manufacturing and retail distribution. Will some manufacturing facilities need to be closed? Yes. Will some white collar jobs need to be eliminated? Yes. Will the unions need to make concessions? Perhaps. Will some dealers shut down? Perhaps that too. But you can't get leaner and meaner if you don't make some of these changes. Remember the definition of insanity: doing the same thing you are doing and expecting different results. Putting taxpayer dollars at risk without making changes is insane.

Is the auto industry a key factor in the economy? Absolutely. Should Congress and the public be concerned about the future of these companies? For sure. Should we try to save as many jobs as possible while making appropriate changes? Definitely. But making these changes is the only thing that makes sense before we taxpayers invest in these enterprises. And when we do, we should get preferred stock, just like we have done with the banks. Taxpayers should get paid back first when these companies recover.

For a campaign that was run on "change," it is time for the incoming administration to force the changes that are needed to turn these companies around. It may still not work, but not making any changes will just get us deeper into the hole. This will require a lot of courage, because the unions and the elected democratic officials from the Midwest supported Obama and are now calling in their chips. I hope the new administration will put America First and force the changes we need before we resort to business as usual and support the special interests. This is our first big chance to put America First!

*Also, by way of full disclsoure, I worked for a subsidary of GMAC for about 9 years up until a little over a year ago.

Strategy First

Now that the euphoria of the election is begining to subside, and the stock market is retreating again, it is time to consider the best way forward. With the weak economy, the new President-elect and the Congress are talking about another stimulus package. The automakers already have their hand out for another package on top of the 24 Billion they got when Congress passed the 700 Billion dollar fund just before the election. Congress will likely not wait for the new President to take office. They will do something during the lame duck session; however, if they don't have a better plan that is part of an overall strategy, they would simply be putting us further in the hole without having a positive impact on the economy. As a short term measure, they could simply extend unemployment benefits to tide over those who are actively looking for employment.

Giving the automakers another handout is a lot more questionable. GM is already suspending product development work on new vehicles for lack of cash, and GM alone has lost over 50 Billion dollars over the last three years. For one thing, they might not survive even with the handout. For another, both GM and Chryler are either owned by or closely aligned with the private equity group Cerberus. Investing in the banking system and regulated entities to keep capital flowing is one thing, but investing in companies owned by private equity groups who represent wealthy investors and play by their own rules is quite another. As a taxpayer, I am not excited about using federal funds to prop up investments that are owned by or feed the interests of a private equity firm. Knowing that Nancy Pelosi is meeting with the automaker executives today is a scary thought. People should also know that Cerberus is a very politically connected firm with people like former Secretary Treasury Snow and Vice-President Quayle among their high profile executives. They know how to work the system to their benefit which may not align with the rest of our national priorities.

What needs to happen right now is for the President-elect to define his strategic vision for the country. Many of these problems like energy, infrastructure, and the health of the economy are interrelated and also impact national security. The old Congressional approach of simply throwing some money at the problem of the day to those who speak loudest will not work anymore. We need Mr. Obama's leadership to set the priorities of our investments in the future in a more strategic way. Only by investing in accordance with a strategic vision will we be able to fix the problems and wisely use our limited resources. He has already outlined some priorities during the campaign: Energy, Health Care, Infrastructure Investment, and his tax plan for the middle class. He needs to be clear about where he wants to focus first so that Congress doesn't squander the available investment pool on pet projects or lobbied interests. This is the problem we are attempting to fix with the new Administration. So, lets not let Congress be stupid before the inauguration. We voted for change, so don't let them go back to doing business as usual. If we do that, then we will have lost our chance to put America First.

A New Day for America and the World

It is a new day for America and for the world! We will have change in Washington that will be reflected in new policies here at home and engagement with other nations abroad. As Barack himself said last night in a great speech after the election, it will not happen in a year or maybe even his first term, but change is coming. It will require a lot of work by lots of people, but we can be very hopeful for the future with Barack Obama's leadership.

In his first address to the nation and the world, President-elect Obama made the point to say that this is about you. He provided a compelling vision of the future like all great leaders do. However, we have a lot of work to do to help this new President. We all need to reach out to listen to those who have different views because it will also require help from all the people regardless of party affiliation. We need to understand where we have common ground and can work together. Help out where you can to make a difference in supporting solutions that work for all of us on energy independence, health care, and economic reform, because this is just the beginning - not the end. Hold your elected officials at all levels accountable to do what is in the best interest of our community, your state, and the nation.

What we witnessed last evening was a triumph for democracy. It was reflected with celebrations at home and around the world. The citizens of this country spoke loud and clear that they are tired of the politics of division and policies that don't put America First. The problems are too big and we don't have time to waste.

So enjoy this day and appreciate the historic significance represented by Barcak Obama's election. However, let's all be prepared to help take advantage of the opportunity that his presidency represents. Yes we can, finally put America First!

VOTE FOR CHANGE!

If you have not voted yet, go now! GO VOTE FOR CHANGE.

If you are not better off today than you were eight years ago, go to the polls now! GO VOTE FOR CHANGE!

If you are thinking about America First, GO VOTE FOR CHANGE.

If you have already voted, thanks for voting.

Editor, America First.

Closing Arguments

On the eve of the most important federal election in a generation, we now are provided with the closing arguments from both campaigns:

Senator Barack Obama offers an uplifting message of hope for the future. He has the advantage of a huge war chest of donations from small donors and has run a magnificent campaign. Several days ago, his campaign paid for a thirty minute "infomercial" to make its final closing arguments. It featured several middle class families who were dealing with the personal challenges, of jobs, health care, and a modest retirement that are all being eroded by the current economic challenges. He offered solutions not only to these economic challenges, but to rebuilding infrastructure, expanding educational opportunities, ending an endless and mindless war, and real energy independence based on investment in alternatives that would get us off foreign oil. If you were able to watch this, you would likely agree that this was a most positive and inspirational vision for the future. This is the starting point for all great leaders: A compelling vision of the future.

John McCain offers the failed policies of the Republican right wing crowd, even though he opposed many of these same policies during his 25-year tenure as a senator. The McCain campaign does not have the financial resources like Obama because John McCain chose to elect federal funding for his campaign (remember he represents the party of choice and personal responsibility). Nevertheless, he has been strongly supported by the Republican National Committee and some private "527" groups funded by wealthy individuals who benefit from these Republican policies - policies that have been in effect not just over the last eight years, but arguably since Ronald Reagan came to office in 1980. Change comes hard to these folks since they have been the primary beneficiaries. Since these policies have not worked for the benefit of all the American people, they can not make a good case to stay with them. So instead, they are flooding the airwaves today with negative commercials and a drumbeat of false accusations, misleading messages, and divisive rhetoric. This is anything but a positive message for the future and forebodes another difficult four years if McCain and Palin should get elected.

The nation cannot afford another four years of disastrous policies that serve only the few and not the general good. It is not simply suffering through another four years, but the lost time that will be so tragic. The lost opportunity to solve these problems now will compound the issues facing America and the world. The problems grow geometrically larger each passing day. The choice for the country is clear. Make sure you get out to vote for Senator Barack Obama and his running mate Joe Biden. We don't have any time to waste if we want to truly put America First!

Election Reform

It is too late to do it now, but after this election, the Congress should take up a bill for comprehensive election reform for federal office elections. I hope that this election on November 4th will be without controversy. I would be pleasantly surprised. If the margin of victory is wide, then the underlying problems will be less visible. However make no mistake about it, the current system which is administered differently in each state and county is fraught with problems and open to mischief.

Early voting has already begun, and problems are already surfacing. As reported by CNN in Broward County, Florida yesterday, the lines were three hours long at one polling site where the two machines that printed ballots were broken for 45 minutes. A candidate for a judgeship was not on the ballot and someone else's name was put on it instead. I am afraid that this is just the tip of the iceberg of voting problems. It is eight years after the hanging chad issues of 2000, and we are still having issues about voter registrations, ballots, machines, no paper trails, purging voters from voter rolls, etc. This is disgraceful in a country that is supposed to be the beacon of democracy. Instead we look more like a third world country.

Recent allegations by Republicans about voter fraud by ACORN, the community activist group that registered over a million new voters, are headlines in the news. While under the radar are systematic efforts to purge voter rolls using tactics like purging names of anyone whose home was foreclosed and people with similar names as convicted criminals on the basis that these are aliases. The use of voting machines without paper trails or receipts only adds to the suspicion of foul play. Then there are the voter suppression efforts like telling certain people that the Democrats vote on Wednesday and the Republicans vote on Tuesday; or telling college students that if they register to vote, then their parents can not longer claim them as a dependent on their taxes. These are all problems that could be fixed. Certainly the technical problems could be prevented, and handled well in advance of an election so as not to taint the outcome.

Democracy depends on confidence of the voters that their vote counts, that all votes are counted, and that the candidates who get the most votes are the actual winners who are sworn into office. In a real democracy, there is no room for foul play, manipulation of the voting process, or intimidation of citizens who have a right to cast their vote. These are simple standards and they are fundamental to our system of government by the people, for the people. While I generally think that the federal government should not interfere with local elections which should be run by local officials, I believe federal elections are different. Whomever is elected to Congress and to be President and Vice-President will make a difference to everyone of us on the full range of national issues. Election rules for these federal offices should establish a national standard with minimum requirements for conducting these important elections in a fair and honest way. I would hope that both parties could agree on this fundamental concept. That would be putting America First.

Palin in the White House

Sarah Palin did her gig on Saturday Night Live this weekend. Some might call her a good sport while others will look at this and shake their head. If you liked her skit, perhaps you might also like this link: http://www.palinaspresident.us/
See what you can find in the Oval Office using your mouse to move the cursor over items in the office and the windows. This link is also available at the quick links section of the blog. Post a comment and let us know what ya think!

Gen Powell endorses Obama

This morning on Meet The Press, former Secretary of State and former Chairman of the Joint Chiefs of Staff, General Colin Powell announced his endorsement of Barack Obama. Among his reasons he cited the following: He viewed Barack Obama as a transformational figure who was the right person to lead the country at this time. He pointed to Obama's ability to inspire others both here at home and around the world. He also cited Obama's steady temperament and sound approach to problems as evidenced by his conduct during this financial crisis. In contrast, he characterized John McCain as being erratic and not as prepared to deal with the economy as Obama. Although he was quick to praise John McCain personally and cite their long friendship over 25 years, Powell was most critical of the Republican party and the McCain campaign strategy. He characterized the party as being narrow and non-inclusive. As for McCain's campaign,exhibit number one, the negative William Ayers campaign, Robo Calls associating Barack with terrorists, and spreading false claims about Barack being a Muslim. Powell even told a heart wrenching story about a young Muslim who died as a soldier for the American Army to further make the point that Republicans shouldn't be demonizing Muslims generally. Powell also stated very clearly that Sarah Palin was not prepared to be the Vice President. He also referenced the selection of Palin as evidence of less than sound judgement by McCain. I couldn't agree more. The recent Tina Fey skits on Saturday Night Live, while very funny, sadly speak the truth.

While partisan Republicans will discount Powell's endorsement as one black man supporting another, this will simply be another attempt to distort the truth and deflect attention from the real reasons for Powell's endorsement. When asked this question, Powell correctly pointed out that if Barack Obama is elected president it will be an historic event about which all Americans can be proud. We will find out in a few more weeks.

Who Won The Third and Final Debate?

Cast your vote at America First for Obama or McCain. The poll is now open.

Victory Bonds

With another tough day on Wall Street and another likely tomorrow if the Asian markets are an indication, perhaps the candidates might want to think about a program from the past: Victory Bonds. These are the bonds that were bought by average citizens to help finance World War II. A similar program now would help citizens save and invest for their retirement, but also help finance many of the imperatives necessary to put our country back on track while we weather the financial crisis.

Since George Bush initiated his pre-emptive wars in Afghanistan and Iraq, the funding has been all done outside of the budget. When combined with the Bush tax breaks and other increases in spending, the net result is another big deficit. As reported today in the New York Times the deficit for the fiscal year that ended on September 30th was $455 Billion. This is 3.2% of our Gross Domestic Product, and is up from 1.2% last year. What this means is that we have been living as a nation beyond our means. As I have mentioned before in this blog, this is irresponsible, unfair to future generations, and now unsustainable in the current global economy. What this also means is that both candidates are promising agendas that they can not deliver. They can't cut taxes, deliver all the current government services, and invest programs for the future.

That's where a 21st century "Victory Bond" program could be the key to the future. The silver lining in the current financial crisis is that Treasury bonds are costing the government less because people and international investors are taking money out of the stock market and putting it into US Treasury bonds because they feel that they are still safe. If the Treasury had a 21st century equivalent, perhaps "Freedom Bonds," we could finance programs for energy independence, rebuilding infrastructure like roads, bridges and the electrical grids, and also invest in education, health care, and jobs retraining. These bonds could also be "tax free" bonds so that ordinary citizens would be able to save for their retirement while investing in the country. Tune into the debate tonight to see if they can figure this out. That would be putting America First.

Fire The Campaign

This was the advice of arch-conservative, William Kristol, in a NY Times column that he writes on a weekly basis. You know..... that liberal NY Times that has given one of the most influential Republican mouthpieces a weekly platform? Anyway, "Fire The Campaign" was Kristol's solution for John McCain to win the election only three weeks away. In one sense, I agree with him for John McCain's sake, but it is likely too little and too late.

How the candidates run their campaigns is also the most likely indicator of their competence to govern. From the beginning, John McCain has been on a roller coaster. He hand picked known Republican operatives, mostly lobbyists or former lobbyists, and put them in key positions. He had to fire some or push them behind the scenes because they were either outright incompetent or had a conflict of interest with their lobbying gigs: Phil Graham, Charlie Black, and Carley Fiorina just to name a few. The ones that he still has running his campaign are only demonstrating their utter incompetence at running a large organization. They also demonstrate their total lack of any deceny and principles as they orchestrate the innuendos and false attacks against Barack Obama. Contrast this with the Obama campaign which has been a model campaign from the start. They amazed everyone by beating the well organized and well financed Clinton machine. Even William Kristol admits that McCain's campaign "is totally overmatched by Obama's. The Obama team is well organized, flush with resources and the candidate and the campaign are in sync." I couldn't have said it better. But what this all goes to show is that Obama has demonstrated the capacity to lead and manage a complex organization, while John McCain has only demonstrated incompetence. Who do you want running the country?

Kristol goes on to throw everything but the kitchen sink into his argument to "Fire the Campaign." He blames the media, which in my opinion has been very easy on both McCain and Sarah Palain, but this is a standard Republican tactic. He asserts that McCain isn't Bush, but McCain now fully embraces all of Bush's policies: tax cuts for the wealthy, deregulated health care, and an bellicose foreign policy. He also points to McCain' readiness to be Commander-in-Chief which may be true if you like the ultra conservative, neocon policies like pre-emptive war, no diplomacy, trash the UN, use military force to solve every international problem. The one thing that Kristol doesn't claim for the demise of the McCain campaign are these failed policy positions which got us into the mess we are in now. Perhaps Kristol should look in the mirror because it was Kristol and his peers who masterminded the same policies that John McCain has been forced to run on by the lunatic right wing. Then they topped it off by foisting a totally unqualified running mate on him: Sarah Palin. Having her and her husband anywhere near the seat of government is a very scary proposition. Now they are not so happy that this isn't working. Guess what? it's the policies stupid!

Obama is the best chance for America right now. It is becoming clearer to thinking Americans who objectively look at the policies and his demonstrated capacity for pure leadership and sound judgement. As someone who has voted many times for Republican presidential candidates in the past, I say we can no longer afford their self-serving and destructive policies. I will go one better than William Kristol: "Fire The Campaign and His Candidates!" You will get the opportunity to do that on November 4th. Mark your calendar. It is now time to put America First and elect Barack Obama and Joe Biden.

The Return of Voodoo Economics

"Voodoo Economics" was the term coined by George H. Bush when he was running in the Republican primary against Ronald Reagan. The term captured the idea that big tax reductions, deregulation, increased defense spending, and run away deficits makes no sense. If we didn't believe it then, we certainly have the proof now. We saw the resurgence of these policies over the last eight years under Geroge W. Bush. Rather than shift to sounder economic policies, John McCain wants to continue more of the same. What is his prescription for America's economic ills? Continuing the Bush tax cuts which are mostly for the wealthy; supposedly cut spending, but not defense spending; and a bizarre proposal to buy mortgages in default at face value only to turn around and lower the balance and interest rate for selected homeowners. None of these policies will have the intended effect.

First, continuing the Bush tax cuts simply rewards the most affluent while increasing the deficits. Without this revenue, we will simply need to continue to borrow money from China, Japan, and the Middle East to finance our debt. The first George Bush was right: this voodoo economics! We can no longer afford to borrow from abroad to finance our government operations. Common sense would tell you that you need to pay it back at some point. We will either pass this massive debt along to the next generation, or devalue the dollar more by printing money in the basement of the Treasury to pay it back. Neither is good choice for America, and frankly passing the buck to the next generation is immoral.

Second, he says that he will cut spending, but not defense spending. If you are going to cut the budget in any meaningful way, you need to cut defense. You will also need to deal with entitlement payments like Social Security, but more importantly Medicare. Neither candidate talks about this in any meaningful way. They simply make general assertions about cutting programs that don't work. What programs? How much? Perhaps we can get some answers in the next debate, but I wouldn't bet on it. The sad truth is that every spending category has its own special interests and congressional sponsors. It would be great if either of these candidates could deliver on spending cuts if elected, but not likely. Moreover, we need to make more investments in infrastructure, education, and energy. Where will they get the money for these imperatives? (I have an answer, but that's for tomorrow's post. Be sure to check it out.)

Third, the proposal to buy up and renegotiate mortgages from homes in foreclosure simply makes no sense. Why should taxpayers bail out irresponsible banks and people who entered into contractual arrangements that they all knew they shouldn't make? What about the vast majority of all homeowners who are making their payments or who saved the money and paid it off? Do they get a windfall bonus check from the government for being responsible citizens?

I have been hard on the McCain-Palin team over the last week, especially for their unrepentant negative personal attacks on Barack Obama. Even if you disagree with me that this was an orchestrated campaign exceeding the bounds of decency, I hope you take a real good look at the policies that John McCain is offering. Not only doesn't his economic policy make sense, but neither does his proposal on health care or his foreign policy. The idea that the Republican candidate will be a proponent for change away from the Republican policies of the last quarter century or more is simply preposterous on its face. To borrow the concept from George H. Bush, it is more than just voodoo economics, it is just voodoo (do I dare say doodoo?). Don't be taken under the spell, think about America First.

Sunday Morning Spin

This is a special Sunday post. Having watched the Sunday morning political talk shows today, I am still flabbergasted by the pundits and media that simply tip toe around the truth: the Republicans led by John McCain and Sarah Palin have been running a vicious smear campaign against Barack Obama. They are playng the race card and appealing to our inner daemons to pull out a victory in November. They are doing all this while the country is in the middle of a financial crisis largely triggered by failed Republican strategies.

Following a week of raucous rallies where McCain and Palin have been interrupted with shouts of "terrorists," "kill him," and "off with his head," these rallies and the race card were the topics of the morning political shows. Predictably the Republican spokespeople sang the chorus from their daily talking points to lament that both sides were making attacks and they regretted this type of discourse. Making sure that they were fair, the mainstream media hosts made a reference to various things that were said by the Democrats in an attempt to be fair. But the truth of the matter is that there is no moral equivalence. While the Republicans might legitimately question Barack Obama's prior associations, including William Ayers, they are not doing this to simply question his judgement. This is an orchestrated campaign to link Barack Obama to terrorists, insinuate by association that he condones terrorism, and by such association supports the Muslim fundamentalist terrorists. One of the recent hires of the McCain Campaign to "handle" Sarah Palin is the same Bush political operative who masterminded the South Carolina whisper campaign by Bush in the 2000 election against John McCain. They insinuated that McCain's adopted daughter was in fact a black child that he fathered out of wed lock. You would think John McCain would never speak with a guy like this, but instead he hires him to work for his campaign! How outrageous. This speaks to John McCain's real character more than any words he could utter about honor, integrity, and "Country First"!

Questioning John McCain's gross lack of judgement to influence government regulators for the benefit of the convicted felon and former bank executive, Charles Keating, is a fact for which he was censured and is relevant to the current financial mess. Questioning Barak Obama's judgement for serving with Ayers on the board of a Chicago charity fund is of minor consequence. Obama did not select Ayers, and Ayers, who was never convicted of any terrorism activities, is now a respected education professor at the University of Chicago. Furthermore when Ayers was allegedly plotting terrorist acts, Barack Obama was only eight years old! Ayers made a $200 political contribution to Obama's Illinois Senate re-election campaign in 2001. Compare this to Charles Keating who either made personal contributions or influenced his employees to make over $112,000 to the various Arizona political campaigns of John McCain. Out of the five lawmakers now known as the "Keating Five," Senator John McCain took the most contributions. These are the facts, so you decide whose judgment is questionable. You decide who is really putting America First.

Its about time

Its about time that John McCain finally asserted himself to tone down the unwarranted personal attacks on Senator Barack Obama. While campaigning in Lakeville, Minnesota on Friday, John McCain was asked a question by an older woman who read about Barack Obama being an "Arab." How sad. It is sad that a poor old woman would be mislead to believe that Barack Obama is an Arab and someone un-American.

For several weeks now, as predicted in this blog, the McCain Campaign has been openly attacking Obama as associating with domestic terrorists and painting the picture of a scary radical, "not one of us" candidate. These open attacks were initially led by Sarah Palin at rallies of Republican right wing supporters chanting "terrorist" and "kill him," echoed 24 x 7 by right wing hate mongers like Sean Hannity and Rush Limbaugh on radio and FOX news, and a carefully orchestrated Internet whisper campaign of outright lies. Terrorists? These nuts are the real terrorists. They should look in the mirror. It is disgusting. Even Cindy McCain is now complicit in lying about Obama's record. I was shocked and surprised when John McCain defended Barack to the woman who asked him the question. He praised Barack as a decent man and urged civility. Where the hell has McCain been for the last few weeks? He has definitely condoned this distasteful rhetoric and promoted it through his running mate and surrogates. Now finally he tried to put the lid on it. Perhaps he knew it was getting out of hand or did the Secret Service tell him to back off? Maybe he was he finally coming to the realization that if he looses the election, he would be ostracized by most of his Senate colleagues for his unbecoming behavior. Whatever the reason, it is about time John McCain spoke up to put the lid on this.

At the next debate, John McCain should take just a few minutes and set the record straight. The guy who wants to be know for his "straight talk" should apologize to Barack and tell America that despite their policy differences, Barack is not an Arab, not a terrorist, and not a pervert. He is a respectable member of the United States Senate. McCain would do more for his campaign by setting the record straight for older voters and less informed citizens who don't read the "liberal mainstream media" but rely on FOX News and the trash talking radio kooks. Uncommitted voters would have more respect for McCain if he did this. Voters would be able make their decision on policies instead of this crap. It was McCain who offered the hope of having a "clean" race with Obama when Reverend Wright dominated the news this Spring. Now McCain could in fact challenge his opponent to spend the remaining time before the election on real issues and real policies. They could both take the high road and marginalize the un-American nuts. Perhaps the candidates could finally agree on something that would put America First.

Bizarre Policies

On a day when the news is dominated by another free fall of the Dow (which is now as low as it was in 1995) policy prescriptions by both the Bush administration and the McCain campaign border on the bizarre.

Starting with McCain's idea to buy mortgages at face value from banks and then renegotiate them at a lower principle balance and interest rate is nothing short of bizarre. This is especially bizarre coming from the candidate who rails against wasteful government spending, earmarks, and regulation. To begin with, these are private contracts between the mortgagor and mortgagee who agreed to the original terms. Second, most of these mortgages are now pooled into securities, so the investors who own them also have an interest how these are negotiated; however most bizarre is why the taxpayer should pay the banks face value and then turn around and take a certain loss with no chance of recovery! There are lots of responsible taxpayers who are currently making their payments or people who were fortunate enough not to have a mortgage or home equity loan at all. All homeowners, regardless of how their home is financed, have suffered a loss of the value of our homes. Why should they not get some windfall as well? Couple this with the fact that the Congress has already incorporated homeowner relief in the recent emergency rescue bill which has some safeguards for the taxpayer and what you get is simply a blatant attempt by McCain to buy votes using our money. It demonstrates his total lack of understanding of the financial markets, the free enterprise system, and any responsible federal budget considerations.

Also in today's news (http://www.nytimes.com) was a report from American intelligence agencies that Afghanistan is in a "downward spiral" and that they doubt the ability of the Karzai government to deal with it. The US Commander, GEN McKiernan has been requesting additional troops, but since all of our available ground forces are tied up in Iraq, even the Chairman of the Joint Chiefs of Staff has lamented the fact that we have none to send. Defense Secretary Gates has been begging our reluctant NATO allies to contribute more troops. However,other than Britain, mostly they have reluctantly contributed to the effort, and even then, they put restrictions on how their troops could be used. So the Bush administration is sending their point man, LTG Douglas Lute, to see what should be done. How bizarre! First, we have a field commander on the ground, GEN McKiernan, who only as late as last week was in Washington to report to the Commander in Chief himself, Mr. Bush. Second, we have a new CENTCOM Commander, GEN David Petraus who is credited with turning around the situation in IRAQ. Although he certainly did what he needed to do to quell the violence in IRAQ, the primary reason for the turnaround was not the Surge, but the Sunni Awaking (FYI, the US government is paying their militia members $300 per month basically not to fight while Iraq itself socks its money away in the bank). Since Afghanistan now is part of his area of responsibility, wouldn't it make sense for him to figure out what needs to be done? What makes sense is to eliminate LTG Lute's unnecessary position and let the commanders do their job! So much for listening to the commanders on the ground.

Unfortunately much of the reason for the deteriorating situation in Afghanistan can be explained by the lack of attention from the administration after they decided to pull resources from there to attack IRAQ in 2003. This fact has been pointed out by Mr. Obama who has been calling for more troops to support the commander on the ground. Johnny "come lately" McCain is now also calling for more troops. However, if he might have learned anything from his Vietnam experience it would have been that insurgencies can only be "won" by winning the "hearts and minds" of the population. Only when the population is on your side will they deny resources to the insurgents and provide the government forces with actionable intelligence. Unfortunately because we have not had adequate troops, they have been over relying on air strikes which have been killing more civilians than Taliban. Net result: We have alienated the population and Karzai is more like the mayor of Kabul than the leader of his country. Meanwhile the Taliban have been resurgent and the narcotics trade is the primary staple of the economy. Can this deteriorating narco-state be turn around? Perhaps. Will it take more troops? Maybe, but more likely it will take a reconstruction effort. Building schools and clinics might be a good idea, but they need to be built locally and provide jobs, and built to local construction standards. We don't need to outsource to Hailbourton and build western style buildings where there is no rural electricity or sewer service. They need simple buildings designed and built locally so that they people have a vested interest. The government might hire Greg Mortenson who is building schools on his own account in Pakistan rather than Dick Cheney's pals at KBR.

Now to end on a more positive note, the US Treasury also announced today that they may actually take an ownership position in some banks. Perhaps they have been reading this blog. In several recent posts, the editor has suggested that the Treasury make direct investments in banks to shore up their balance sheets and get preferred stock in exchange for the taxpayer. This will not only provide needed capital that will be more useful in the current crisis to unfreeze the credit markets, but also gives the taxpayer a priority security interest in the entire bank. A preferred stock investment gives us taxpayers a proportional interest in both the good assets as well as the bad assets held by the institution. They might further consider forming a holding company to take over insolvent institutions until they can find a buyer. These two actions together will do more to restore confidence in the system.It also protects the taxpayers more than some reverse auction mechanism for the Treasury to purchase non-performing securities. So I for one hope that they are seeing the benefits of a temporary partial nationalization of the banking system through stock ownership. They might as well do it now rather than suffer the drip, drip, drip, of ineffective solutions. As bizarre as this policy might seem, it just might be putting America First!

Gross Lack of Judgement

The continued antics of the McCain campaign to assassinate the character of Barack Obama by making charges of collusion between Obama and former radical William Ayers simply demonstrates the gross lack of judgement of John McCain and his totally unqualified running mate, Sarah Palin. The line was crossed at several recent rallies in Florida where a sheriff in uniform opened the event referring to Senator Obama as "Barack Husein Obama" followed by Palin using inflammatory rhetoric inciting the crowd to chant "terrorist" and "kill him." The sheriff is now being investigated for using his office to influence a political election, but even more disheartening, no despicable, is the knowledge that a law enforcement officer is participating in activities to incite a riot. This is illegal and a violation of federal law. I hope this sheriff will get some time to contemplate his actions sitting in his own jail cell. While all these smear tactics are being used,the country is embroiled in the worst financial crisis since the Great Depression. McCain and Palin don't have a clue.

What all this really demonstrates is the total lack of judgement and character of those who are initiating these assaults. Despite his protests about using these trash tactics, apparently McCain can't even control his own running mate. She apparently is either too stupid to take his lead or more likely a wacko who is an extremist in her own right. As a minimum she has no compunction about lying about either her own background and her credentials or those of her opponents. This alone is enough to disqualify her as a potential "Commander in Chief" even if she were otherwise qualified, which she is most certainly not.

We have seen this movie before. W and his cohorts led by Carl Rove employed similar tactics against none other than John McCain himself in the 2000 election. They alleged that he had fathered a black child out of wedlock when in fact McCain and his wife had adopted a child from India. How dare he turns around and now uses the same tactics against his opponent while trying to convince us that he is a man of honor, integrity, good judgement. No sir, this is a gross lack of judgment and in my view, he has disqualified himself from being the next president. We don't need another president like W who has sanctioned breaking the law, misleading the public, and allowing special interests to rip off the taxpayer. Let's think about America First on November 4th.

The Tidal Surge is Up

As predicted in my post yesterday, the political CAT 5 ***t Storm is upon us and the surf's up. The charges of Obama hanging out with terrorists are all over the airwaves today. First sparked by Palin over the weekend disorting a NY Times article, all the Republican talking heads got their own memo today, and were out and about spreading the word. They were supported by right wing commercials raising Obama's association with William Ayers, Tony Rezko, and Rev Wright. Meanwhile the stock market as measured by the Dow was down another 800 points before settling back to be down only 367 points by the end of the day. While the financial world is spinning out of control, all the Republicans want to do is launch personal attacks against Obama. After being attacked, the Democrats raised McCain's involvement with the Keating Five, the group of five lawmakers who were reprimanded for interfering with regulators who were investigating Charles Keating, an Arizona developer and CEO of the failed Lincoln S&L. The Republicans were outraged that this would be brought up, but they opened the door for the ***t to blow in. Unfortunately, we can only expect more of this ***t between now and the election.

All the misdirection by the Republicans can not change the facts:
>Republicans were the primary proponents of degregulation that is the root cause of the current financial crisis.
>It was a Republican administration the launched two unnecessary wars that continue to cost us over $10 Billion per month and additional killed and wounded.
>It was a Republican administration that recklessly reduced taxes for the wealthy and loaded up the Treasury with more debt than all other presidents combined to over $10 Trillion.
>It was Republicans who have brought us policies that have destroyed our reputation around the world and trampled on the Constitution here at home: torture, Guantanamo Bay, Abu Graib, illegal wire taps, improperly firing US Attorneys, domestic surveillance, etc.

For eight years the Republican administration has done nothing to solve the health care crisis, energy crisis, immigration, rebuilding after Katrina, or any other of the major problems facing the nation. If Americans now let the Republican zealots distract them from the facts to focus on ***T then we deserve what we get.

Brace yourself for a CAT5 Political *#&t Storm

Here it comes. The presidential campaign is about to make landfall. After picking up some hot air in the last week as the Congress dealt with the financial rescue, the fully fury of the spin machines will be released on television, radio and the press between now an the election. The current polls show Barack Obama trending upwards in many of the so called "swing states" and even some traditional Republican "red" states while John McCain is struggling in almost all of these same states. That puts the Republicans in a position where they need to have a game changer to blunt the trend and dial the needle back in their favor. They are the experts in the personal attack and my guess is that either at the debate or shortly thereafter that's what they will do.

You can already hear it in on the stump with Sarah Palin referencing the recent NY Times front page article about 1960's radical bomber, William Ayers, and a link to Barack Obama. Interesting how Sarah Palin now reads the newspaper when she couldn't tell Katie Couric last week about anything she reads. It reminds me of Dick Cheney going on the Sunday talk shows referencing NY Times articles about the "mushroom clouds" after his office leaked the info to the NY Times reporter. The fact is that when William Ayers was planning to bomb the Pentagon and the Capitol, Barack Obama was only eight years old. This article concludes that the Senator has only cross paths a few times with Ayers and that there is no relationship. Unfortunately the Times did not put that in their headline and you had to read the whole article most of which was continued on page A14. The CNN "truth squad" also says Palin's claim is false. Regardless of the truth of the charge, this will not stop the McCain team from using this and other similar charges to personally attack Obama. "Joe Sixpack" doesn't read the Times and even if he did, wouldn't likely turn to page A14 to get the whole story. He is more likely to listen to the "shout out" from Sarah.

I am keeping my fingers crossed however about the ultimate "October" surprise that might be orchestrated so that McCain can come to the rescue. I fervently hope that it will not happen, but do not put it past either the Bush administration or their allies to tacitly give Isreal the green light to bomb Iran's nuclear facilities. Both the neocons and the Israelis know that they will not get away with this if Obama is elected, and so with their window of opportunity closing, they might view this as the time to strike. Such a unwarranted attack would have far ranging implications, not the least of which would shift attention away from the economy to an international crisis benefiting McCain. I certainly hope that this would not happen, since it is not in anyone's interest including the US, Israel, or the Middle East region as a whole. However, the prospect of loosing power is frightening to the Republican operatives who have enjoyed insider dealing and self-serving politics for a long time. I don't put this beyond their reach, and the neocons around McCain would actually think they are doing something good for both America and Israel at the same time. If even a faint rumor about this emerges, all Americans should instantly get in the streets, light up the Congressional switch boards, and shout loud and clear that we will not tolerate political brinkmanship in the name of patriotism. This will be a time when we all need to shout LOUD AND CLEAR: "AMERICA FIRST"

Win, Loose, or Draw?

If you are reading this blog, I suspect you were interested enough in politics to watch the VP debate last night between Governor Sarah Palin and Senator Joe Biden. After the debate, the political spin machines went to work to proclaim a victory for their side. Those viewers who tuned in to see a game changer were disappointed. There were some minor gaffs, but nothing to derail either side. The Republicans had to be very happy about this outcome, given Palin's recent performances in several news interviews that made her a running joke on the late night circuit. She was "folksy" and well rehearsed. As for Biden, he didn't ramble and had good, crip answers. So from the standpoint of moving the needle for the average voters, Joe Sixpack as the Governor irreverently calls them, it seems this was much less dramatic than all the TV hype by the talking heads.

But take a closer look. Although Palin was well rehearsed enough to string a few sentences together, it was also obvious to me that she was really only parroting back prepared scripts that she was coached to say. In fact, she often ignored the question asked by the moderator, Gwen Iffel, and proceeded to say something totally unrelated to the question. Further it was clear that she had certain "buzz words" to get out. You know most of them already: Maverick, lower taxes, jobs, job creation, I met with Henry Kissinger, change is coming, I am an energy expert, Maverick, there you go Joe, White Flag of Surrender, the Surge worked, Maverick, lower taxes,corruption on Wall Street, hockey mom, and need I say Maverick?

So do we really know anything more about her qualifications to be president in case something happened to McCain? Yes and No. We know she can take direction from handlers, but likely doesn't have a deep understanding of the facts or the policies. When asked by the moderator specifically what she would do if she had to assume the presidency, she gave a rather broad brush answer that spoke in vague generalities about change. Contrast her answer with Senator Biden's on the same question: his was crisp, and a well thought out series of policies that left no doubt about what he would actually do if he had to step into the Presidency.

So what do we really need in a VP? The simple answer is someone who would make a great president if needed. Joe passed this test. Sarah did not. She may be folksy, cute, and sassy, but the job is too important to make a decision based on these incidental criteria. We have had eight years with someone at the helm who people wanted to have a beer with, was a cheerleader, and did not have a real command of the issues, but could simply parrot some buzz words: cut and run, conditions on the ground, victory, we do not torture, axis of evil, the fundamentals are strong, mushroom cloud, and the list goes on. What we got was the worst eight years in our history and a failed government that will take years and a lot of money to fix. Let's let Sarah and Todd go back to Alaska and do some moose hunting while John and Cindy sell some more Budweiser beer to Joe Sixpack, so that Barack and Joe can get on with the job of fixing America. We don't have any more time or money to waste.

Preparation for the Great Debate

In less than 48 hours, Governor Sarah Palin will debate Senator Joseph Biden as the two VP candidates spar on the issues of the day. I for one can't wait. Sarah has been impressive in her interviews so far with Charlie Gibson and Katie Couric. Released today was a another clip with Katie where Sarah announced that she has been listening to Joe Biden's speeches since she was in the second grade! Wow! I am really impressed and she will undoubtedly be well prepared. McCain's team now has her sequestered at one of his homes in Arizona where she is practicing outdoors next to a creek. Imagine how relaxed she will be. She has been most impressive since she stepped onto the scene with her obvious command of the issues. She knows her stuff. Here is a preview of some of the quotes you might hear during the debate:

I can see Russia from my living room.
You know when Putin rears his ugly head, he flys over Alaska.
The troops in Iraq are on a mission from God.
Alaska has borders with Russia and Canada, and I am the Chief Executive thereof.
Most VP candidates in history have never met a head of state.
I am an energy expert, Alaska provides 20% of America's energy needs.
I am a maverick and reformer.
John McCain is a maverick and a reformer.
I am commander in chief of the Alaska National Guard.
And did you know that I can see Russia from my living room?
Regarding the bail out: You know its all about jobs
Did you know I went to five colleges?
Oh, and you know that bridge to nowhere, I told Congress thanks but no thanks and then spent the money on what we thought was worthwhile.

Perhaps you have been listening more closely to some of her appearances so if I have missed any good lines, please add your comment to this post. And be sure to watch the big debate to see if Sarah will blink. You know she doesn't blink.

Tell the Banker: "NO DEAL" Howie!

As I have written in my past few posts, all Americans have an interest in maintaining a sound banking and financial system. This is the intended objective of the "bail out" legislation which failed to pass the House vote today by only 12 votes. Subsequently, the DOW industrial stock market index dropped by almost 800 points, the worst one day drop in history. However, after having looked at the bill, I conclude that the that those who voted against the bill were correct today, despite the need for action. However, I don't agree with most of the House Republicans who are pushing a mortgage insurance program as a private sector solution as their alternative.

I think this is a bad bill because it appears to be a mishmash of policies from both the right and the left without a focus on the problem. First, the bill gives wide discretion to the Treasury Secretary to purchase the mortgage backed securities. The hope is that he will purchase these at "bargain basement" prices and after a holding period be able to sell them for a profit. There are several problems with this: First, the underlying assets, ie the houses in foreclosure are still falling in price and in many cases their value is difficult to determine. Hence the value for the security is hard hard to determine, making any price paid by the Treasury simply an arbitrary price. The second issue is that he can write regulations to determine what constitutes a "conflict of interest" which will allow him to potentially hire the same Wall Street firms or their successors to help structure the transactions and dump all the bad loans on the government. This is a prescription for foul play. Another reason that this is a bad bill is that in order to gain the Republican support, they give the Treasury Secretary the option to establish the insurance program. Buying insurance for non-performing securities or ones that were poorly underwritten in the first place is like buying insurance for your house after it is half burned to the ground. Further if the primary problem is liquidity, ie the banks don't have the capital to lend to one another and their customers, then they surely can not afford to pay insurance premiums out of their limited available capital.

Congressional leaders further compromised this bill with another Republican led provision by giving authority to the SEC Chairman to relax the accounting rules that require firms to mark to market the value for the securities on their books. This will only make the problems worse, because they will value these securities for more than their worth. Then, they don't have to raise additional capital to meet their capital requirements. Additionally there are other technical provisions in this bill that deserves further scrutiny than the compressed time frames that Congress was given to properly consider this legislation: Changes to Federal Truth-in-lending requirements and Good Faith Estimates, limits on executive compensation, provisions limiting judicial review, provisions for the Secretary to arbitrarily renegotiate the terms of existing loans, establishment of an Office of an Inspector General and penalties for anyone who misrepresents coverage of FDIC insurance. Some of these, particularly establishing an Inspector General are perhaps good, but others may have unintended consequences without undergoing a more through review. Some of these also seem like they may have been inserted for or by industry lobbyists.

Thus, this bill did not seem to provide the solution that are needed: inject liquidity into the system, isolate the non-performing mortgage assets problem, and protect the taxpayers for their investment. Meanwhile,while Congress wrestled with this bill, the market again took care of another major problem: Citbank bought the ailing Wachovia Bank which once again demonstrated how a solution could be structured.

I would go back to the drawing board and look at models that have worked: Recent transactions whereby private investors, including Warren Buffet, have purchased preferred stock and options for common stock in exchange for their capital investment in under capitalized institutions. Also, the recent liquidations of large financial institutions by the FDIC to healthy ones, could be a model. The government would set up a bank holding company to park failing institutions until they could dispose of their non-performing assets or be spun off to a healthy institution. Add in some reasonable oversight, an inspector general, and criminal sanctions for anyone who defrauds the government, and perhaps the problems could be addressed.

The credit problems are real, but everyone should also understand that even with a well structured bill, it should be the case that people and businesses who have poor credit should not be able to get a loan on favorable terms. This is precisely the problem that got us in this mess in the first place so we don't want to replicate it. The other reality is that we are likely headed, if we are not already there, into a recession. This bill should not be passed with the idea that it will reverse this natural part of an economic cycle. Some tightening of credit standards is a part of the solution to this systemic banking problem. There are no easy solutions, but sometimes Howie, you have to say "NO DEAL" and today was one of those times.

Special Weekend Post: Letter to Congress

Reading the news reports on the so-called bail out deal is quite frustrating for ordinary American taxpayers. While we all need a stable financial system, we don’t need a $700 Billion dollar bail out that rewards irresponsible corporate executives and stockholders as well as special interest groups at the same time. Nor should it bail out irresponsible homeowners who chose to overextend themselves financially. There are millions of responsible citizens who chose not to do this, and it is outrageous to expect them to bail out those who were imprudent with their own finances. We must draw the line somewhere. For far too long, both the government and individual citizens have been living beyond their means. It is time for everyone to assume responsibility for their actions. Don’t prescribe a medicine that is worse than the disease itself!

If the final deal involves providing money to the Treasury Secretary with the authority to “outsource” the solution to a Wall Street firm, or if it include special provisions for private interest groups, regardless of their intention, then I URGE YOU TO VOTE NO on this legislation. We don’t need another huge give away piled on top of our massive national debt for our children to pay off. It would also adversely restrict the next administration, whoever wins the election, so that we would not be able to address our critical needs for energy independence, rebuilding our infrastructure, or dealing with health care.

There are frustration news reports: These describe private interest groups, lobbyists on the right and left, already lining up to get their share of this massive pot of money. It has been reported that Rudy Giuliani is lining up his clients from the right for a drink at the trough, while on the left, ACORN is lobbying to get a share as well. These are likely only the vanguard of a variety of groups who will seek to profit at the taxpayers’ expense. We have already seen enough corporate greed and mismanagement that resulted in the current crisis. We have unfortunately also seen fraud, waste, and abuse of federal no-bid contracts in connection with the war, FEMA, and now the GSE’s, FNMA and Freddie Mac. We don’t need to open the vault for another stampede of self-serving and unethical patrons to fleece the taxpayers.

There is some good news: the failure and subsequent disposition of the insolvent Washington Mutual S&L on Thursday was evidence that the hysteria created by this crisis may be overblown. The FDIC and bank regulators who orchestrated the WAMU take over by JP Morgan Chase should be congratulated. They did more to restore confidence in the financial markets than all the clamor about the so-called “deal.” This transaction is also evidence that the system, if properly supported, is capable of handling the disposition of failed institutions if necessary while protecting the depositors and taxpayers. Perhaps Congress should give consideration to forming a federally chartered “bank holding” company to take over failed institutions until the assets can be disposed of properly or until a healthy financial institution can be identified. I would rather trust the FDIC and the bank regulators to handle this crisis than some scheme cooked up under duress over the weekend to outsource the clean up. Such a scheme would be fraught with conflict of interest.

The mortgage backed security insurance scheme offered by the House Republicans now under discussion is also not very attractive and is likely not a workable solution. Putting insurance on these “bad loans” now is like insuring a house after it has already burned down. While it is intended to have the private sector shoulder the burden of the bail out instead of the taxpayer, it will not address the problem of institutions that need operating capital to make loans and free up credit. Any cash infusions by the Treasury should be done like a commercial transaction whereby the taxpayer gets a secured preferred position in the stock of any institution that takes advantage of the capital infusion. Additionally other conditions such as limits on executive compensation, warrants or options for the benefit of the taxpayer, and mandatory underwriting guidelines for federally related mortgage loans should apply. Any bail should also include a provision to establish a special inspector general’s office to investigate allegations of fraud, waste and abuse. Further, there should be a criminal felony provision for anyone convicted of such activities with stiff mandatory sentencing guidelines so that there is a deterrent in place to make it clear that such activity will be prosecuted to the fullest extent possible.

I know that this is a difficult task; however, it would be better to have no deal rather than a bad deal. That would simply be throwing good money after bad. Please don’t let that happen.

What are they thinking?

This is going to be short post in anticipation of the big debate tonight between McCain and Obama. After dropping into the middle of the big bail out negotiations yesterday, you have to wonder what everyone is thinking? First, with all McCain's antics, he accomplished little to advance the discussion, and some will say he blew up the deal. I for one don't think they really had a deal, since the House Republicans simply aren't buying the "bail-out" as proposed by Treasury even with tweaks from the Democrats. But what are the House Republicans thinking? They oppose the deal based on the principles that in a market economy a bail out shouldn't be required, or if so then do it in a way that leverages the market. Sounds good until to look at the details. Their proposal consists of some kind of mortgage insurance for the "bad loans." This is a non starter. Anyone who knows anything about mortgage insurance knows you would only put this on at the time of loan origination using rigorous underwriting standards. Putting insurance on bad loans makes no more sense than insuring a house after it has burned down. What are they thinking?

Meanwhile McCain has now agreed to show up at the debate. After grandstanding about not showing up until a deal was cut, he now caved. Perhaps he should have listened to his running mate, Sarah Palin, when she was interviewed by Charlie Gibson: "You know Charlie, you can't blink." But guess what, that's just what he did. So what was he thinking? While all this was going on, she had an appalling interview with Katie Couric on CBS. The political right mouthpieces immediately took issue with Katie's questioning; however, if you haven't seen it you need to watch. Remember Miss South Carolina's answer to the question about "education and such,like that, and such as...?" I shudder at the thought that she could be the vice-president, much less the president if McCain has another relapse with his cancer. What the heck was he thinking when he picked her?

Then there was the exactly two minute address by the current president, Bush, to the nation this morning about the financial crisis and the bail out deal. The only thing more pitiful was Sarah Palin's interview. Rather than updating the public in a meaningful way, he simply mumbled his way through a prepared very very short statement that gave less information than his press secretary. What the hell is he thinking?

The only good news today is the outcome of the failed Washington Mutual Saving and Loan which was taken over by JP Morgan/Chase. Normally the largest bank failure in history would crash the market, but here we see the FDIC doing something positive. By orchestrating this deal, they protected the shareholders and employees, and the new reorganization will expand the reach of a well managed bank into new markets. The rightful people left holding the bag were the stockholders, including a private equity fund who made a play to profit from this distressed institution, and the executives who grossly mismanaged this bank. Meanwhile the markets reacted well by closing in positive territory for the day. So what are the investors thinking?

Tune in tonight and find out what McCain and Obama are thinking. I hope someone is putting America First!

Make your vote count

Election Day is approaching fast. We have heard from many voices that this is the most important election in history. Whatever your political persuasion, you cannot deny that this country and the world are facing serious challenges, economically and environmentally. Around the globe, people’s safety is threatened by wars, terrorism, hunger, poverty, and disease. The decision we make on November 4th is going to affect our futures as well as our children’s and grandchildren’s future. Don’t forget about them when you go into the voting booth.

The job of President of the United States is the most important and most difficult job in the entire world. As American voters, we have the privilege of deciding who will be hired to fill this awesome responsibility.. It is critical that we hire the best qualified and well rounded candidate. Strong consideration should be given to intelligence, education, and temperament as in any hiring decision. Look at each of the candidates:

John McCain graduated fifth from the bottom of his class at the Naval Academy and probably would not have been qualified to receive an appointment had it not been for his father and grandfather being Admirals. He has no advanced degree. He has a reputation for making impulsive decisions which was evident when he chose his running mate, Gov. Sarah Palin, with minimal due diligence. Since her selection, her appearances have been carefully choreographed with minimal access by the press. This is a reflection of John McCain’s unwillingness to be transparent with the American people. His penchant for impulsive action was also evident this week: On Monday he pronounced that the “fundamentals of the economy were sound.” By Wednesday afternoon, he was suspending his campaign and canceling his debate appearances to deal with the impending financial crisis. He went from “sound fundamentals” to ‘crisis” in 72 hours! Is this really the kind of temperament we want in the next president?

Now consider the qualifications of Barack Obama who graduated from Columbia University with a degree in political science and with a concentration in International Relations. He received a law degree from Harvard University where he was president of the Harvard Law Review. In contrast to John McCain’s shoot from the hip approach to decisions, Barack Obama has run a model campaign without changing key members of his team. He deliberately made his choice of a running mate to pick someone who has experience and has been available to the press as well as the public. More importantly, throughout the grueling primary and now general election campaigns, he has maintained his cool and positive demeanor even in the face of sometimes outlandish personal attacks. His thoughtful approach to the current financial crisis stands in stark contrast to McCain.

I believe we not only need, but that it is imperative, that we have someone in the White House who will make careful decisions on important issues after weighing all the facts. He must be able to make sound judgements and remain cool under fire. The stakes on the major challenges facing the nation and the world demand no less.

The vote we make on November 4th can not be taken lightly. Anyone who casts their vote by considering with whom they would rather have a beer or hangout, or who is the most congenial or most like us, needs to think about the consequences. If you were hiring a brain surgeon to remove a tumor or an attorney to represent you in court, you wouldn’t be looking for someone to hang out with or a hunting buddy, you would naturally want the most highly skilled professional for the job. We must approach the selection of our next president with the same seriousness as hiring a doctor or any other professional. Cast your vote for the best qualified candidate to get our country back on track. That's putting America First!

To debate or not debate? That's the question.

Today's announcement by Senator McCain to cancel the debate on Friday while he meets with the President and Congressional leaders and Senator Obama about the bail out of our financial markets is definitely an interesting development. Is this politics or is this statemanship? I am not sure, but I am sure that the debate should go on. Precisely because of the financial crisis, it is now more important than ever to hear from these two candidates. With the election close at hand, the American public needs to see these two candidates together on stage debating the issues and their policies so we can make an informed choice about who should be the next leader of the United States for the next four years. While some will argue as Mr. McCain that the crisis to too important to hold the debate, others will argue that this is simply a political ploy on his part to change the dynamics of the campaign which of late has not been going in his direction. I will give him the benefit of the doubt about his intentions, but still make the case that taking a few hours out on Friday to hear from these two candidates is just as important to the future of the country as the financial rescue plan. As Senator Obama has said, a president also needs to be able to do more than one thing at a time. So a few hours on Friday will not detract from them working all weekend on the crisis if they are needed.

What I do agree with McCain about is that the current Treasury proposal is not likely to pass the Congress. It is interesting that one of the most savvy investors in American history, Warren Buffet, just invested $5 Billion of his own money in Goldman Sachs. In exchange for his investment, he will get perpetual preferred stock and an additional $5 Billion in options to buy additional common stock at a specified price. Goldman recently announced that it was also restructuring itself from an investment bank to a bank holding company. In addition to being eligible to now participate in getting loans from the Federal Reserve, this may also be a move to set them up to buy distressed banks in the future. Warren Buffet is a shrewd investor so perhaps the Congress should follow his lead.

Instead of writing a blank check to Secretary Paulson for $700 Billion to do as he pleases without any oversight and no recourse, perhaps the Congress should consider setting up a bank holding company owned by the taxpayers since they are planning to use our money anyway. Setting up such a holding company could be a place to park distressed institutions while they clean up the mess. Additionally they could also attract additional capital from other central banks from around the world who are holding US Treasury bonds. They also have a vested interest in helping the US get through this crisis. Additionally, they could use money raised to invest as Warren Buffet has in preferred stock with options for the taxpayers' benefit to help recapitalize some of the banks. Meanwhile depositors will still be protected by the FDIC and the taxpayers have a chance at making some money when these institutions recover. Why should the taxpayers take over the distressed assests so private investors can run the recaptialized banks and make all the profit? You may wonder why the Federal Reserve recently relaxed regualtions to allow private equity firms to invest in banks? Could it be that these big investment funds smell an opportunity?

So what to do about "mainstreet?" How can we help the little guys who like the banks have extended themselves with mortgage loans that they couldn't afford, credit card debt, and gas guzzling SUVs? Well one idea is to offer a creative financing device for those who choose to take it. Perhaps something like a government shared equity loan whereby the lender has a share of the ownership in the house in exchange for a lower mortgage amount. Homeowners would have to repay the government out of the proceeds when they sell, but meanwhile this would lower the monthly payments. If they choose to, the government could add various provisions like a call provision after 10 years so that as the market recovers, people would have to refinance and repay the government. These loans would only be available for owner occupied residences and not speculators or investors. If people moved out of their house, it would automatically trigger a call forcing a sale. We could use our newly acquired Fannie Mae or Freddie Mac institutions that we already own, since they were taken over by the government. If borrowers tried to pull one over on the government, there could be an automatic loan provision to collect any deficiency though the IRS or a garnishment action. Anyway, the point is that there are creative ways to do this. Will people like these alternatives with some onerous provisions? Perhaps not, and nor should they. They won't like it anymore than a condition of the preferred stock investment that limits CEO compensation if a bank chooses to seek capital from the government owned bank holding company or rescue fund. However if the choice is between a shared equity loan or foreclosure, then it is their choice to make. We shouldn't make it easy for people who were irresponsible in fairness to the many taxpayers who are responsible. Responsible people didn't buy more house than they needed, they don't run up credit card debt, and they don't have expensive toys sitting in their driveway. Any rescue plan either for homeowners or businesses should not be an easy ride and it should have teeth in it to protect the taxpayers.

I don't pretend to have all the answers, but I know some people who might: the sage from Omaha, Warren Buffet, or legendary bond investor Bill Gross, or retired Fed Chairman, Paul Volker. In fact, if the Congress was to form a holding company as I suggested, these guys would be great to have on the board of directors. They should be asked to serve as a form of public service. My guess is that they would do it and as a taxpayer, I am reasonably certain that these guys would watch out for our interests. They would put America First.

Continuing Economic Saga

I hope you are following the news about the proposed Treasury bail-out. After listening to Secretary Paulson today, I am even less inclined to give him the benefit of the doubt. Making me even more skeptical was seeing VP Dick Cheney visiting Capitol Hill today to twist some Republican arms. We have seen this movie before: run up to a portending crisis, inflammatory rhetoric to force quick Congressional action with minimal consultation, arm twisting by the VP, and tough talk to push through the legislation without reading the fine print: not subject to oversight, no court review and a waiver from prosecution, all decisions of the executive branch are final. Sound familiar?

While there is no question that there is an economic crisis that needs to be addressed, as Senator Dodd stated today, "It is important to get this right the first time. There will be no chance for a redo." So I hope the rest of his colleagues heed this advice. So how can they address the crisis? They should just merge under capitalized financial institutions with good ones using their existing authority and FDIC insurance to protect the depositors. Perhaps they could just make secured loans to banks who need liquidity. The terms of the loan could limit executive compensation until the loan was repaid. If they intend to buy non-performing assets or "bad loans," I for one would like to see something more similar to what was set up for the S&L crisis with an agency like the RTC with government employees rather than outsourcing to Morgan Stanley or Goldman Sachs. At least that would eliminate the obvious conflict of interest. The idea that the government will buy the non-performing assets at a reasonable price is fiction. The reason the banks are in trouble is because these securities can't be priced right now since there is no market for them. Further it will be difficult to determine their value in the short term when the values of the underlying assets continue to fall. Thus there is a huge risk that the government will overpay for these assets and the taxpayer will be left holding the bag while the bankers clean their books and go on to make a lot of money for themselves and their stockholders. This would be a great American travesty. So as the carpenter says: Measure twice and cut once. We will only get one bite at this apple.

Contact Your Congressman Now

Dear Senator or Congressman:

Like all Americans, I have a vested interest in the stability of our banking system and the financial markets; however I am deeply concerned about the proposed government rescue legislation that the Bush Administration is now seeking. Albeit with perhaps good intentions, any legislation that grants unfettered authority to the Treasury Secretary with minimal oversight and accountability and no recourse to the courts is simply unacceptable on its face. Furthermore, the crisis is primarily related to housing and any widening of the scope to include other asset classes like credit card debt is nothing less than rewarding companies for their irresponsible behavior. If banks are insolvent, then they should be forced to merge with another bank that is run responsibly. The shareholders and executives of the failed institution should be held accountable and not rewarded with an infusion of taxpayer capital. The forced bank liquidation process has served us well in the past and can do so now.

As a taxpayer, I am not interested in writing a blank check to the Treasury whereby they outsource their unprecedented new authority to a Wall Street firm with no oversight, no reciprocity, and no regulation. It was the Wall Street gurus and the lack of regulation which got us in this mess in the first place, so why should they be given all the tools to help their buddies and profit from this crisis at the expense of the taxpayers. Talk about conflict of interest? Such a scheme defies common sense.

What is also especially disturbing about this proposal is the speed at which this is being rammed through the Congress. Problems this complex deserve some deliberation and well thought out solutions. We should be very careful about what authority is granted to this administration especially after they misled us on the war, and most recently about the need for the authority to bail out FNMA and Freddie Mac. It was only a mere few weeks ago that Secretary Paulson told Congress that if he was granted the authority to bail out these agencies that it was unlikely he would need to use it. Then in a matter of weeks, he quickly moved to orchestrate the largest bail out in history. Simply put, I don’t trust the Bush Administration to tell the truth about anything. Their track record is simply too fraught with misinformation if not outright lies to get whatever they are seeking on whatever the topic of the day happens to be: authority to use force, torture, wiretaps, and now the largest bail outs in history.

Reading this letter, you might conclude that I don’t fully understand the banking system or the housing market. Please know that I have made my career in housing and mortgage banking for thirty years. I have worked as an executive for both publicly owned banks and non-regulated financial institutions. Furthermore, I am a stockholder who wants to see the markets stabilized, but I am first and foremost an American and a taxpayer. I am simply tired of seeing our tax dollars squandered with little regard for the national debt, deficit spending, or our crumbling infrastructure. I am most upset with no-bid contracts and the outright greed and corruption with no oversight or accountability.

In summary please have the courage to do what is right for Americans and not get caught up in the hysteria of the moment. Yes we need a stable financial system, but we don’t need to reward incompetence and self-dealing. As a federal official sworn to uphold the constitution, we need you to stand up now for America and not a unitary executive. We expect you to think about America First!

Advisors tell the real story

When we are deciding who to elect for our next president, just look at the senior advisers to get some perspective:

John McCain has surrounded himself with all the foreign policy hawks like Graham, Leiberman, Kyle, and General Keane. Some commentators have even speculated that Joe Leiberman would be his Secretary of State so McCain can claim bi-partisan leadership. If you tuned in for Lieberman's speech at the Republican convention, it was anything but bi-partisan. Lieberman has been on the forefront of the fight for military action against Iran and blindly supports the Israeli government no matter what it does. I for one would be seriously disappointed with Lieberman at the helm of State. However, if you look at how McCain selected his running mate, one should not be surprised if he shot from the hip with a Leiberman pick. An even scarier thought is Phil Graham as Treasury Secretary. He has been sidelined for now since his comments about the economic problems as a figment of our imagination, but don't be surprised to see him show up at the inaugural ball if McCain is elected. Then there is General Keane, the former Army Vice-Chief of Staff. Along with the neocon think tank crowd led by his pal, Fred Kagan, they were the architects of the Bush "surge" which has been passed off as an overwhelming success. The facts are that the reduction in violence in Iraq is much more related to the "Sunni Awakening" which simply is a program to pay every Sunni militiaman $300 bucks per month not to shoot at the Americans. (PS, we pay while Iraq draws interest on its $79 billion budget surplus sitting in NY banks.) We could have paid them off back when Pro-Counsel Jerry Bremmer was in charge and saved a lot of lives and been out of there by now if he hadn't summarily fired the Iraqi Army and banned Sunnis from participating in the government. This doesn't take away from the brave American soldiers and Marines who have been risking their lives, but they are not the ones who make the strategy. Back to advisers, another economic advisor on the McCain staff is Carly Fiorina, the fired CEO from HP who collected millions on her way out the door. Is this really someone who we want as senior advisor? She has also been benched for comments about Gov. Palin and subsequently McCain not being capable of running a company like HP. So how are they supposed to run the country? Then look at the raft of lobbyists on the McCain staff. From his campaign manager, Rick Davis, who until last month was a paid lobbyist for Freddie Mac ($15,000 per month since 2005), his senior foreign policy advisor who was a paid lobbyist for the country of Georgia, and the infamous Charlie Black who is a well known lobbyist for a variety of organization and foreign interests. These are not people that I would like to see running America. Despite the rhetoric, they have no intention of putting America First.

Now lets look at Obama's team: His economic advisers includes Laura Tyson former chair of the President's Council of Economic Advisor for President Clinton whose economic policies were largely judged as successful. He also has two former Treasury Secretaries, Robert Rubin who help orchestrate the successful rescue for the Mexican government and Larry Summers, both of who managed the economy to produce the only budget surpluses in recent memory. His foreign policy advisers include the former National Security Advisor, Zbignew Brzezinski, Madeline Albright, and Susan Rice. While I don't agree with all their policy position, particularly on the membership for Georgia and other former Soviet states into NATO, they on balance take a more measured approach to foreign policy with an emphasis on diplomacy instead of military action. We can no longer afford to be the world's policeman and run around the globe doing nation-building. Although I don't favor isolation, we sorely need to do some nation-building right here in America.

So before you cast your vote, think about these advisers. They will be in the key positions after the election. Check my facts. If you disagree with my analysis, post a comment. If you agree, you can post a comment too.

Reform or Revision?

McCain and Palin would like to have you believe that they are the champions of reform. The facts would indicate otherwise:

McCain who has been a loyal Republican for over 25 years in Congress is hardly a reformer. He has consistently voted over 90% of the time with the Bush Administration. From his early days in Congress when he supported Charles Keating, the corrupt leader of the failed Lincoln Savings and Loan during the S&L crisis, to his latest support for big oil interests, McCain has championed special interests. His top campaign officials are all well known lobbyists with NeoCon affiliations. They will continue to passionately pursue the same Bush Republican strategies and policies that have brought us war, deficits, and an economic crisis the likes of which we have not seen since the great depression. Despite their rhetoric, they could care less about health care, real energy independence, or a different world view for America.

Anyone watching the Republican convention in St. Paul only a few weeks ago listened to one speaker after the other address the cheering crowd about "Islmo-Facism", "Drill Baby Drill," and continued tax cuts for corporations and the most wealthy Americans. Meanwhile, the crowd roared wildly in support. Someone please tell me where is the reform in all this? Did they talk about ending the war? Did they talk about regualtion for Wall Street? Did they talk about renewable energy? No! But, by conveniently cancelling the visit from Bush and Cheney while wrapping themselves in community service and the fan-fare over new right wing superstar pick for VP, they simply changed the dialogue away from the reckless Republican agenda of the last eight years. They then cleverly recast John McCain into a reformer. Reformer? I call this what it is: "Revision not Reform."

Here is some Republican Straight Talk: If you want to ship your jobs overseas, ship your money to the Middle East, ship your kids off to war, and then charge the nine trillion dollar national debt off to your grand kids, then vote Republican. They have the track record to prove it.

Straight Talking Maverick?

John McCain likes to use the by line "straight talk" when he wants to let everyone know that he is telling it like it really is, despite the political consequences. He also uses the nickname "Maverick" to distinguish himself from his Republican cohorts who have held the White House and ran the government in a ditch for the last eight years. He also wants to hide from the fact that his Republican Congressional colleagues ran the Congress for the better part of the last thirty years and ran up our national debt while catering to special interests. But what does he really stand for? Let's look at his "straight talk" from this self-proclaimed maverick:

Is it straight talk when he was against the Bush tax cuts, but now offers them as a major part of his plan?
Is it straight talk to champion deregulation for over 25 years, but now support regulation only when the financial markets are crashing?
Is it straight talk to champion comprehensive immigration policy, but now support border security and the multi-billion dollar wall?
Is it straight talk to say the surge worked when we still can't bring home the troops? In fact, even with Bush's most recent announcements of withdrawals there will still be more troops left in Iraq than before the surge began.
Is it straight talk to have his running mate constantly say she was against the "bridge to nowhere" when she actually supported it and then kept the money when she said she was against it? "You know Charlie, I told the Congress, thanks, but no thanks."
Is it straight talk when she says Alaska supplies 20% of America's energy which makes her an expert, but in fact it is merely 3.5%? Do we really want her in charge of our energy future? Some expert!
Is it straight talk to claim that John McCain was responsible for my Blackberry? Blackberrys are manufactured by RIM, a Canadian company.
Is it straight talk to deliberately advertise misinformation about your opponent on TV and then admit that "I approve this message?" Hundreds of well informed newspaper editors and political commentators don't think so. This even includes the likes of Karl Rove who while commenting on FOX news stated that the McCain campaign has crossed the line on truthfulness. He above all others should know.

So what about his maverick solutions for America? More tax breaks for the wealthy, Tax breaks for Oil companies, "Drill Baby Drill" instead of a real alternative energy policy, Health Savings Accounts instead of real health care solutions, privatizing social security, cutting a few pork programs instead of real spending cuts,and picking a right wing running mate with little experience. These may indeed sound like maverick solutions to some, but they are what the Republican hard right has been supporting all along. The notion that John McCain is somehow a Republican "Maverick" is purely a sham. Don't forget to notice the (R) next to his name on the ballot.

Don't be fooled by the rhetoric. Just saying that something is "straight talk" while you twist the facts doesn't make it "straight talk!" The real straight talk on the McCain campaign is that it is led by entrenched lobbyists and Republican political operatives who will stoop at nothing to retain their power. The John McCain who might have had some "maverick" tendencies years ago, has compromised his principles to fall in line with the hard right faction of the Republican party. He will say anything simply to get elected. America doesn't need another chief executive who will deceive us while pursuing the agenda of the special interests. Slogans will not put America First. Only you can put America First. Make your vote count in November.

Banana Republic

Yesterday, I warned that if we didn't get a handle on the fundamentals of the economy that America might turn into a Banana Republic. One day later, I am wondering if I wasn't wrong? Perhaps we have already slipped on the banana peel? Today the government announced an $85 Billion bailout of the insurance company AIG in exchange for 80% of the stock. Now thems a lot of bananas! Where do they get the authority to use taxpayer money to bail out a private firm? Bad enough that they had the authority from Congress to use the "bazooka" that they gave the Treasury to bail out FNMA and Freddie Mac, but at least they had gone to Congress to get the authority. These were also businesses that were chartered by Congress so there was a least a rational argument that they had a responsibility to deal with them. However, when did anyone ask about lending money to a private firm? I wasn't aware the the US government started a sovereign wealth fund. When they offered government guarantees for the Bear Sterns takeover by JP Morgan, they slipped on the banana.

Now they are all going bananas! Every large company that has gotten itself into trouble because of bad management is now up to some monkey business. While all this was going on, GM's Chairman, Rick Waggoner, was making his pitch for a bailout for GM? What about Ford? Will Chrysler be next, perhaps, but they are owned by the private equity firm Cerberus? Will taxpayers then bailout the Cerberus private equity fund with a cast of characters including former VP Dan Quale and former Treasury Secretary John Snow? If these were small businesses there wouldn't even be any thought of loans or bail outs. They all got themselves into trouble pushing SUV's, pickup trucks, and luxury muscle cars while their paid lobbyists convinced the Reagan administration to relax fuel efficiency standards. Interestingly our current president, Bush, has maintained a low profile by visiting the hurricane devastation in Texas where he is promising to pick up the lodging expenses for people evacuated from Galveston who built their home blocks away from the beach a few feet above sea level. Why isn't he addressing the country when we are facing perhaps the worst financial crisis since the Great Depression?


Now I am going bananas just thinking about this whole mess. Unfortunately all the monkey business has gotten us into trouble. With the unitary executive aka, the Decider, just giving our money away to Georgia (not the state, but the country), Iraq, AIG, Fannie and Freddie, and people who choose to live a few hundred yards away from the sea in an area known for violent hurricanes, perhaps we are already living in a Banana Republic. Bring it on!

Free markets, deregulation, small government, low taxes, control spending, and no pork

If I understand the tenants of the Republican party, these are their values. They are also John McCain's reform prescriptions for change. The problem is that these are the same prescriptions that they have been giving us for over thirty years since Ronald Reagan was president. The problem also is that they don't seem be be working very well in practice. Exhibit number one is the current crisis in the financial markets. Failure to provide a reasonable level of government regulation for security firms and non-bank mortgage lenders has led the way into our current financial mess. The same can be said about the problems with the government sponsored entities: FNMA and Freddie Mac. The irony is that the same proponents for these policies and their Wall Street benefactors are the very same ones who now seek government assistance to bail out failed institutions. What ever happened to the notion of "free markets?" The proposed solutions to prop up these companies or to facilitate a fire sale through government guarantees are anything but "free" to the taxpayers. So much for deregulation and unfettered markets.

Well, one could say that we are just in one of those economic downturns perhaps even a recession, but according to McCain, the fundamentals of the economy are good. Is he looking at the rising unemployment rates, the falling value of the US dollar, our exploding trade deficit, the mushrooming budget deficit, our national debt, or the cost of health care? What about wages, cost of education, and the sharp decline in home valuations. And now with the recent events on Wall Street,yesterday's market decline was biggest one day retreat on the DOW since 9/11! What about the declining value of retirement funds?

John McCain is right about one thing: America desperately needs reform. Unfortunately, he and his running mate are very unlikely to be able to deliver. By his own admission, he doesn't view himself as steeped in understanding the economy. His running mate has even less experience with the macro economy. Even more sadly he relies on a team of advisers that includes lobbyists for special interests. Chief among them is the lobbyist for USB, former Senator Phil Gramm, who characterizes Americans as "whiners" while his fingerprints are all over much of the financial deregulation that has got us where we are today. Just imagine Phil Gramm as the likely Secretary of the Treasury under McCain. I don't want my investments dependent on their prescriptions. They will simply mimic the current administration's approach over the last eight years that has run us into a ditch.

America needs to reform its financial system and put regulatory safeguards in place to prevent market excesses created by totally unfettered markets. Free markets yes, but with appropriate regulation. We need to get America on a sound financial footing by critically evaluating all government spending including defense to eliminate unnecessary spending. No longer can we afford deficit spending which is simply a tax on future generations if it is to be repaid responsibly. Otherwise, the Treasury will simply print a few more dollars while the value of our currency declines against other major currencies like the Euro and the Yen. Without reform and fiscal responsibility, we are destined to become the financial equivalent of a "Banana Republic" with inflation to boot. Already we see a massive transfer of our wealth abroad while the US Treasury sells bonds to sovereign funds and international investors. As our economic woes continue, these investors will loose confidence in our ability to repay, and the interest rates will correspondingly go up to attract the capital. This will only compound the problem with a larger share of our discretionary budget going to debt service.

The choice in this election is quite clear. We need change. Although John McCain has cleverly cast himself as a Maverick, the fact remains that his staff and supporters are the same ones that have pushed the these same Republican principles for most of the last thirty years. Continued tax cuts for the wealthy, mismanaged government that caters to special interests, and failure to invest in critical infrastructure at home will only make the problem worse. The elimination of a few pork programs will simply not be enough. I fully agree that the earmark process should be shut down, but this is simply a drop in the proverbial bucket when looking at the whole scheme of things.

The Democrats and Barak Obama may not have all the answers, but one thing is for sure: They do legitimately represent change from what we have been doing and they have the only successful track record of sound fiscal policy from the Clinton Administration. If we expect to get different results in the future, then we must do something different now from what we have done for the last eight, or for most of the last thirty years. Putting America First is not about supporting either of the parties, but America can not take a risk on the possibility of change. We can do this America, but we must change NOW!