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.
Tuesday, September 30, 2008
Monday, September 29, 2008
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.
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.
Saturday, September 27, 2008
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.
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.
Friday, September 26, 2008
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!
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!
Thursday, September 25, 2008
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!
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!
Wednesday, September 24, 2008
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.
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.
Tuesday, September 23, 2008
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.
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.
Monday, September 22, 2008
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!
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!
Saturday, September 20, 2008
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.
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.
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.
Thursday, September 18, 2008
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.
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.
Wednesday, September 17, 2008
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!
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!
Tuesday, September 16, 2008
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!
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!
Saturday, September 13, 2008
Blink?
Blink. It's an interesting word. One little word can mean a lot. For example, Blink was the title of a best selling book by Malcomlm Gladwell. The subject of his book was decision making. He relates various examples about how we can make snap decisions based on our experience. His premise is that we can often make quick decisions based on our frame of reference. This is how emergency room doctors triage a mass casualty situation; it is how experienced police officers decide whether or not to use lethal force in a tense situation; and it is how fighter pilots decide whether a boggy is friend or foe while flying at Mach speed.
Blink also has another meaning. In the context of a confrontation, a mano on mano situation, the first one to blink, right or wrong, is the first one to back down. This definition reaches into our most basic primordial instincts. Every animal trainer knows that the alpha dog doesn't blink. If you blink, you signal that you are backing down, and certainly anyone who did so would be signaling weakness.
So how does this all relate to America First? Well let's start with Mr. Bush who didn't blink, but didn't think either, when he decided to get us into the "War on Terror" by invading Afghanistan. He didn't blink when he looked at Sadam and decided to invade Iraq. He hasn't blinked when facing down Congress on torture, FISA legislation, taxes and any number of issues. No matter whether it was foreign policy or the economy, let it be known that he never backed down no matter what.
Now we have John McCain, the old fighter pilot, who in a blink of an eye made the decision to put Sarah Palin on the Republican ticket as his VP. With little or no vetting he just pulled the trigger on the favored candidate of the far right "value voters" crowd. Did he blink or didn't he? When Sarah was asked by Charlie Gibson in her only interview with the press if she had any reservations about her qualifications, she emphatically told Charlie that she didn't blink when she was asked to be VP. She said that she was on a mission and couldn't afford to blink.
So now the question is "How will the voters blink in November?" Will voters make a snap decision to elect our next president and vice-president? Will they shoot from the hip like the old fighter pilot without much due diligence or thought, or will the experience of not blinking over the last eight years inform that split-second decision in the voting booth? Will voters simply resort to their animal instincts and not back down from ideology, or will they take a measured approach to size up the situation first like an experienced emergency room physician?
Fool me once, shame on you. Fool me twice, shame on me. Fool me three times, its just a blinking shame. It would be a blinking shame on all of us if we made the wrong decision this time.
Blink also has another meaning. In the context of a confrontation, a mano on mano situation, the first one to blink, right or wrong, is the first one to back down. This definition reaches into our most basic primordial instincts. Every animal trainer knows that the alpha dog doesn't blink. If you blink, you signal that you are backing down, and certainly anyone who did so would be signaling weakness.
So how does this all relate to America First? Well let's start with Mr. Bush who didn't blink, but didn't think either, when he decided to get us into the "War on Terror" by invading Afghanistan. He didn't blink when he looked at Sadam and decided to invade Iraq. He hasn't blinked when facing down Congress on torture, FISA legislation, taxes and any number of issues. No matter whether it was foreign policy or the economy, let it be known that he never backed down no matter what.
Now we have John McCain, the old fighter pilot, who in a blink of an eye made the decision to put Sarah Palin on the Republican ticket as his VP. With little or no vetting he just pulled the trigger on the favored candidate of the far right "value voters" crowd. Did he blink or didn't he? When Sarah was asked by Charlie Gibson in her only interview with the press if she had any reservations about her qualifications, she emphatically told Charlie that she didn't blink when she was asked to be VP. She said that she was on a mission and couldn't afford to blink.
So now the question is "How will the voters blink in November?" Will voters make a snap decision to elect our next president and vice-president? Will they shoot from the hip like the old fighter pilot without much due diligence or thought, or will the experience of not blinking over the last eight years inform that split-second decision in the voting booth? Will voters simply resort to their animal instincts and not back down from ideology, or will they take a measured approach to size up the situation first like an experienced emergency room physician?
Fool me once, shame on you. Fool me twice, shame on me. Fool me three times, its just a blinking shame. It would be a blinking shame on all of us if we made the wrong decision this time.
Friday, September 12, 2008
Peace Corps or Multi-National Corps?
Yesterday's forum on service featuring the two presidential candidates was refreshing. It was a great way to honor those who were killed or injured in the 9/11 attacks. Both candidates did a great job of speaking from their heart about the virtue of service to the nation whether in the form of military service or community service. It was also inspirational to see these two particular candidates who each represent the ideals of service through personal example. As a bonus each of them represents a different yet important aspect of service, either military or community, that makes a difference for our country. Either way, that certainly fits with America First.
I will add some additional commentary addressing how these different aspects of service can be used to help us abroad in our struggle against extremism. However, I want to preface my remarks by simply saying that I don't want them to be viewed as critical of anyone or any institution, especially our military people who serve honorably and put their lives at risk everyday for the rest of us. As a veteran myself, I have always honored and respected the brave men and women who put on a uniform for their country. Like many other Americans who have served, I was always moved on occasions when I was in uniform and saluted the flag at ceremonies as the national anthem was played. So here are a few additional comments for the 9/11 service discussion.
What if the ideas expressed by these two candidates were carried out more fully? How could this help us with our problem of restoring America's image around the world? Both candidates were largely in agreement on much of what was discussed. This included support for expanding the Peace Corps. Perhaps now more than even in the 1960's we need to leverage the good work that Peace Corps volunteers do around the world. This could help America's image very significantly for a modest investment.
If we look at the positive results achieved by the US military when they provided relief aid to victims in Indonesia when the tsunami struck the outlaw province of Aceh it was remarkable. In this province of the most populated Muslim country in the world, where rebels were actively fighting for control from the central government, the US military helped change things for the better. As the rebels changed their focus from fighting to survival, the US military was seen as a positive force for good. Today, even the CIA estimates that there is now more economic activity in this area than before the disaster in December of 2004. Significant progress has been made there with fewer incidents of violence. Although we also provided relief during the earthquake in Pakistan, perhaps we could have done more to help our reputation with additional disaster relief rather than giving $10 Billion in military assistance. Most of that aid was used to prepare their forces for a potential conflict with India over Kashmir rather than pursuing extremists. If we want to "win" the "War on Terror," then we have to "win" the hearts and minds of people around the world. This is a basic tenant of counterinsurgency doctrine that we seemed to have only rediscovered with the "surge" in Iraq.
What if we enlisted our NATO allies to provide volunteers for a Multi-National version of the Peace Corps? Could we be more effective in Afghanistan or even the tribal areas of Pakistan? What if we had a Muti-National relief force organized to respond to natural disasters around the world? What if, as the candidates have suggested, college assistance was provided for those who serve. We would be exposing the world to some of America's best and brightest in a positive way. This would replace the negative images some have of America for the misguided rendition and enhance interrogation programs. No amount of "PR" could be more effective than images of Americans and partners from our NATO Allies working together to help around the world. What if Americans who were trained as disaster volunteers at home were given opportunities to do "short tours" abroad in conjunction with our Allies? This could be a kind of "service sabbatical" and perhaps even sponsored by corporations or foundations. These are all potential great ideas and good investments for America.
In keeping with the spirit of the service discussion, I will simply say it was great to hear the candidates speak to the American public about concrete policies in a civil manner. The possibilities are great. I hope that whomever is elected president will follow through on their intentions to enhance the Peace Corps, AmeriCorps, and even use the military on more humanitarian missions that only they have the resources to bring in the case of severe disasters. This would really help put America First in the eyes of the world.
I will add some additional commentary addressing how these different aspects of service can be used to help us abroad in our struggle against extremism. However, I want to preface my remarks by simply saying that I don't want them to be viewed as critical of anyone or any institution, especially our military people who serve honorably and put their lives at risk everyday for the rest of us. As a veteran myself, I have always honored and respected the brave men and women who put on a uniform for their country. Like many other Americans who have served, I was always moved on occasions when I was in uniform and saluted the flag at ceremonies as the national anthem was played. So here are a few additional comments for the 9/11 service discussion.
What if the ideas expressed by these two candidates were carried out more fully? How could this help us with our problem of restoring America's image around the world? Both candidates were largely in agreement on much of what was discussed. This included support for expanding the Peace Corps. Perhaps now more than even in the 1960's we need to leverage the good work that Peace Corps volunteers do around the world. This could help America's image very significantly for a modest investment.
If we look at the positive results achieved by the US military when they provided relief aid to victims in Indonesia when the tsunami struck the outlaw province of Aceh it was remarkable. In this province of the most populated Muslim country in the world, where rebels were actively fighting for control from the central government, the US military helped change things for the better. As the rebels changed their focus from fighting to survival, the US military was seen as a positive force for good. Today, even the CIA estimates that there is now more economic activity in this area than before the disaster in December of 2004. Significant progress has been made there with fewer incidents of violence. Although we also provided relief during the earthquake in Pakistan, perhaps we could have done more to help our reputation with additional disaster relief rather than giving $10 Billion in military assistance. Most of that aid was used to prepare their forces for a potential conflict with India over Kashmir rather than pursuing extremists. If we want to "win" the "War on Terror," then we have to "win" the hearts and minds of people around the world. This is a basic tenant of counterinsurgency doctrine that we seemed to have only rediscovered with the "surge" in Iraq.
What if we enlisted our NATO allies to provide volunteers for a Multi-National version of the Peace Corps? Could we be more effective in Afghanistan or even the tribal areas of Pakistan? What if we had a Muti-National relief force organized to respond to natural disasters around the world? What if, as the candidates have suggested, college assistance was provided for those who serve. We would be exposing the world to some of America's best and brightest in a positive way. This would replace the negative images some have of America for the misguided rendition and enhance interrogation programs. No amount of "PR" could be more effective than images of Americans and partners from our NATO Allies working together to help around the world. What if Americans who were trained as disaster volunteers at home were given opportunities to do "short tours" abroad in conjunction with our Allies? This could be a kind of "service sabbatical" and perhaps even sponsored by corporations or foundations. These are all potential great ideas and good investments for America.
In keeping with the spirit of the service discussion, I will simply say it was great to hear the candidates speak to the American public about concrete policies in a civil manner. The possibilities are great. I hope that whomever is elected president will follow through on their intentions to enhance the Peace Corps, AmeriCorps, and even use the military on more humanitarian missions that only they have the resources to bring in the case of severe disasters. This would really help put America First in the eyes of the world.
Thursday, September 11, 2008
Post 9/11 is it still the economy stupid?
In 1992, Bill Clinton beat George H. Bush and became the first Democrat to occupy the White House in more than a decade. Bush was a popular president who had just orchestrated a victory in Desert Storm with relatively few American battle casualties. Nevertheless, the economy back home was weakening and he violated his campaign pledge of "no new taxes, read my lips!" Clinton was able to capitalize on this situation with a constant drumbeat about the weak economy and his prescription for the future. After Clinton's election, the country enjoyed an economic expansion related to investments in new technologies that enhanced worker productivity with personal computers and the Internet. Clinton also worked with the Congress to control spending. This was partially achieved through the "peace dividend" after the Cold War was over that allowed for a reduction in defense spending. The net result was budget surplus during the late 1990's that was passed off to the current administration of George W. Bush. The economic future looked bright, in fact so bright, that Bush pushed through enormous tax cuts that mostly favored high income and high net worth individuals.
Then came 9/11 in 2001. It was no doubt one of the darkest days of American History. But the consequences were much more far reaching than the tragedy of almost 3,000 dead Americans and the collapse of the twin towers. In the aftermath, President Bush made a series of decisions that would balloon spending and our national debt. He launched two wars, created a Department of Homeland Security, and set up the TSA employing thousands of new government workers to screen travelers at US airports. To support the wars, he let no bid contracts to companies like Haliburton, Kellog Brown and Root, and Blackwater for billions of dollars. Making matters worse, the war spending was off budget as it continues to be until the present day. The Congress also passed legislation for a costly drug program for seniors, a multi-billion dollar fence on the Mexican border, and increase in the size of the military. Now with another economic downturn they have authorized the Treasury to conduct some of the largest bail outs in history to support failing financial firms and prop up the anemic housing and credit markets. With the value of the dollar falling and a widening trade deficit linked to the skyrocketing price of oil, some expert observers conclude that this is the worst financial situation that the country has faced since the Great Depression.
So now we are at a crossroads with an election that will likely determine the future economic health of the nation for years to come. So once again "it's the economy stupid!" Only this time it is the economy and much more. It's our dependence on foreign oil, rising energy costs, rising health care costs, unsustainable and growing entitlement programs, and a drain of $10 Billion per month to support the War on Terror. These are all monumental problems in their own right, but unfortunately they are all inextricably linked to the economy. Our economy will not return to health unless we can solve this big problems too. That's why the choice we make in selecting the next president will be critical. Voters should be wary of simple solutions and campaign slogans that convey simple fixes. These are complex problems that will require smart people with strong political instincts to resolve them. We will need someone who can rally the American people and force Congressional leaders to do things that they have not shown the courage or willingness to do, even something as simple as extending tax credits for alternative energy while we are paying exorbitant prices for fossil fuels. We must faced the realities and make some hard choices. The next president will simply not be able to offer tax cuts, tighten up on a few earmark programs, and hope for the best. He will need to address these underlying problems while he crafts targeted stimulus and tax relief to support innovation on health care and the search for alternative sources of sustainable energy. We need to extricate ourselves from costly war and change course from a largely ineffective foreign policy.
We can no longer do business as usual and expect a different result. If we fail to make these changes now, the window of opportunity will close. Our debts will continue to grow and the value of the US Dollar will continue to decline. We will not be able to compete in the world economy with the rising economic powers of Europe, Asia and even South America. We will further transfer our wealth to the Middle East and perhaps Russia to support our addiction on oil. It will not be sufficient to simply "drill baby drill" either offshore or in Alaska. So listen carefully to what the candidates are offering and don't be fooled by the simple campaign sound bites.
As we remember the 9/11 tragedy and express our grief for the victims, let's not forget the consequences beyond just the attacks themselves. In 2001 President Bush squandered the chance to work together with the world and inspire our nation to pull together to address these difficult problems. The massive and largely unnecessary military response was equally tragic. What we needed then and what we urgently need now are smart solutions to tough problems. We don't need more tough talk and knee jerk solutions. Now more than ever, we need to put aside party and special interests and put America First.
Then came 9/11 in 2001. It was no doubt one of the darkest days of American History. But the consequences were much more far reaching than the tragedy of almost 3,000 dead Americans and the collapse of the twin towers. In the aftermath, President Bush made a series of decisions that would balloon spending and our national debt. He launched two wars, created a Department of Homeland Security, and set up the TSA employing thousands of new government workers to screen travelers at US airports. To support the wars, he let no bid contracts to companies like Haliburton, Kellog Brown and Root, and Blackwater for billions of dollars. Making matters worse, the war spending was off budget as it continues to be until the present day. The Congress also passed legislation for a costly drug program for seniors, a multi-billion dollar fence on the Mexican border, and increase in the size of the military. Now with another economic downturn they have authorized the Treasury to conduct some of the largest bail outs in history to support failing financial firms and prop up the anemic housing and credit markets. With the value of the dollar falling and a widening trade deficit linked to the skyrocketing price of oil, some expert observers conclude that this is the worst financial situation that the country has faced since the Great Depression.
So now we are at a crossroads with an election that will likely determine the future economic health of the nation for years to come. So once again "it's the economy stupid!" Only this time it is the economy and much more. It's our dependence on foreign oil, rising energy costs, rising health care costs, unsustainable and growing entitlement programs, and a drain of $10 Billion per month to support the War on Terror. These are all monumental problems in their own right, but unfortunately they are all inextricably linked to the economy. Our economy will not return to health unless we can solve this big problems too. That's why the choice we make in selecting the next president will be critical. Voters should be wary of simple solutions and campaign slogans that convey simple fixes. These are complex problems that will require smart people with strong political instincts to resolve them. We will need someone who can rally the American people and force Congressional leaders to do things that they have not shown the courage or willingness to do, even something as simple as extending tax credits for alternative energy while we are paying exorbitant prices for fossil fuels. We must faced the realities and make some hard choices. The next president will simply not be able to offer tax cuts, tighten up on a few earmark programs, and hope for the best. He will need to address these underlying problems while he crafts targeted stimulus and tax relief to support innovation on health care and the search for alternative sources of sustainable energy. We need to extricate ourselves from costly war and change course from a largely ineffective foreign policy.
We can no longer do business as usual and expect a different result. If we fail to make these changes now, the window of opportunity will close. Our debts will continue to grow and the value of the US Dollar will continue to decline. We will not be able to compete in the world economy with the rising economic powers of Europe, Asia and even South America. We will further transfer our wealth to the Middle East and perhaps Russia to support our addiction on oil. It will not be sufficient to simply "drill baby drill" either offshore or in Alaska. So listen carefully to what the candidates are offering and don't be fooled by the simple campaign sound bites.
As we remember the 9/11 tragedy and express our grief for the victims, let's not forget the consequences beyond just the attacks themselves. In 2001 President Bush squandered the chance to work together with the world and inspire our nation to pull together to address these difficult problems. The massive and largely unnecessary military response was equally tragic. What we needed then and what we urgently need now are smart solutions to tough problems. We don't need more tough talk and knee jerk solutions. Now more than ever, we need to put aside party and special interests and put America First.
Wednesday, September 10, 2008
Are we on Offense or Defense?
Yesterday President Bush announced some troop reductions for Iraq during a speech at the National Defense University. He touted the success of the "surge" and decrease in violence. Yet, the facts are such that even after these announced reductions, the troop strength is still above the "pre-surge" level. The bulk of these reductions will come in February 2009, conveniently after the next president takes office.
I continue to be baffled about this for several reasons: First the Iraqi government has expressed their support for troop reductions and a time frame for withdrawal by 2011; Secondly, the US can not continue to spend $10 Billion per month especially when our economy is in shambles and our infrastructure is crumbling at home; Thirdly, most observers who tout about the success of the "surge" and decrease in violence are the same ones who now oppose further troop withdrawals. Finally, to the extent that we need to put more troops into Afghanistan, we cannot because the Army and Marines have been stretched to the breaking point.
This brings me to the main point: We are on defense and not offense, contrary to what Bush would like us to believe.Even when speaking to the Republican convention in an 11 minute satellite broadcast from the White House, Mr. Bush again articulated what he calls the central lesson from 9/11: We must stay on offense and take the fight to the enemy before he can strike us. This same idea is also expressed in the mantra that we need to fight them over there rather than fight them here. But the fact is that we are on the strategic DEFENSE and not offense. How is this the case when we still have over 150,000 troops deployed to Iraq and Afghanistan, not to mention another 100,000 contractors as well as significant numbers of our Army, Marines, Air Force and Navy station as support in places like Kuwait, Bahrain, and the Persian Gulf?
The answer is simple: We are on the strategic defense precisely because all those troops are mired in the Middle East. We have lost the global initative and our freedom of action. The enemy can hit us at the time and place of his choosing and we can only hope that we can respond. We have lost our ability to effectively respond to any global crisis unless it just happened to be in Iraq or Afghanistan. Even there we need to resort to bombing just to hold our own. So by definition, we are on the strategic defense.
There could be no better example than the recent trouble in Georgia when all we could really do is make bellicose statements against Russia and send Condi and the VP for a highly visible yet unproductive road shows. Even the Chairman of the Joint Chiefs of Staff laments not having a sufficient reserve to put additional troops into Afghanistan as requested by the field commander. If we can't even reinforce our troops there with more than with simply a Marine battalion, then we are on defense. No amount of happy talk can change the facts that our ground forces are at their limit, their equipment is worn out, and our treasury is empty. Thus we are limited in our ability to go on offense if we need to around the world. If we are having trouble going on offense, then by definition we must be on defense. This situation is obvious to our friends and foes alike. It is also a contributing factor to embolden regimes in North Korea, Iran, Venezuela, and yes even Russia. Instead of delivering a speech at the National Defense University, Mr. Bush might want to sit in on a few of the classes.
I continue to be baffled about this for several reasons: First the Iraqi government has expressed their support for troop reductions and a time frame for withdrawal by 2011; Secondly, the US can not continue to spend $10 Billion per month especially when our economy is in shambles and our infrastructure is crumbling at home; Thirdly, most observers who tout about the success of the "surge" and decrease in violence are the same ones who now oppose further troop withdrawals. Finally, to the extent that we need to put more troops into Afghanistan, we cannot because the Army and Marines have been stretched to the breaking point.
This brings me to the main point: We are on defense and not offense, contrary to what Bush would like us to believe.Even when speaking to the Republican convention in an 11 minute satellite broadcast from the White House, Mr. Bush again articulated what he calls the central lesson from 9/11: We must stay on offense and take the fight to the enemy before he can strike us. This same idea is also expressed in the mantra that we need to fight them over there rather than fight them here. But the fact is that we are on the strategic DEFENSE and not offense. How is this the case when we still have over 150,000 troops deployed to Iraq and Afghanistan, not to mention another 100,000 contractors as well as significant numbers of our Army, Marines, Air Force and Navy station as support in places like Kuwait, Bahrain, and the Persian Gulf?
The answer is simple: We are on the strategic defense precisely because all those troops are mired in the Middle East. We have lost the global initative and our freedom of action. The enemy can hit us at the time and place of his choosing and we can only hope that we can respond. We have lost our ability to effectively respond to any global crisis unless it just happened to be in Iraq or Afghanistan. Even there we need to resort to bombing just to hold our own. So by definition, we are on the strategic defense.
There could be no better example than the recent trouble in Georgia when all we could really do is make bellicose statements against Russia and send Condi and the VP for a highly visible yet unproductive road shows. Even the Chairman of the Joint Chiefs of Staff laments not having a sufficient reserve to put additional troops into Afghanistan as requested by the field commander. If we can't even reinforce our troops there with more than with simply a Marine battalion, then we are on defense. No amount of happy talk can change the facts that our ground forces are at their limit, their equipment is worn out, and our treasury is empty. Thus we are limited in our ability to go on offense if we need to around the world. If we are having trouble going on offense, then by definition we must be on defense. This situation is obvious to our friends and foes alike. It is also a contributing factor to embolden regimes in North Korea, Iran, Venezuela, and yes even Russia. Instead of delivering a speech at the National Defense University, Mr. Bush might want to sit in on a few of the classes.
Tuesday, September 9, 2008
Georgia on My Mind
This was the title of a recent Tom Friedman editorial in the New York Times. His basic question was "Why are we borrowing $1 Billion dollars from the Chinese to send it to the country of Georgia and not the state of Georgia?" I would also like to ask "Where does Bush and Condi Rice get the $1 Billion to send?" I thought Congress controlled the purse strings? As a taxpayer, I am continually dismayed about a militaristic foreign policy that seeks to provoke Russia and carelessly spreads money from the US Treasury around like it was peanut butter. What happened to the Republican notion which Bush often cites that this is the taxpayer's money and not the government's? What could be the purpose of sending the Vice President and his expensive entourage to visit the region except for the deliberate provocation of Russia when he fails to visit Russia to negotiate anything? Perhaps they forget that Russia still has a nuclear arsenal and if the world is to be safe in the 21st century, we must collaborate with the Russians to secure loose nukes. Or maybe they forgot about the fact that Russia is a prime energy provider to our friends in Western Europe? Further, their call to include Georgia and other former Soviet Republics in NATO is not only needlessly provocative, but reckless. A little known provision of the NATO Charter requires all members to come to the defense of any member that is attacked. While these former Soviet states are perhaps nascent democracies, they are very unstable. Do they intend to have America and Western Europe sucked into a thermonuclear war on the whim of someone like the Georgian president or even Putin if he decides to make another a border incursion? I am by no means condoning the Russian incursion, but do we really want to surrender our foreign policy to an autopilot response mechanism? And what about the missiles in Poland to protect us against an imaginary threat from Iran who currently has no nuclear weapons or missiles with the range to reach Poland let alone the United States. Could it be that this is only another needless provocation spurred on by the Military-Industrial complex to line their pockets with money from the US Treasury? More money that we have to borrow from China? For the US to compete and thrive in the 21st century, we need something more than a throw-back to Cold War era confrontation. We need a well thought out global strategy that puts the real interests of the US and our global partners ahead of knee jerk confrontation and the special interests. Let's invest in the state of Georgia first. That's putting America First.
Monday, September 8, 2008
America First
I set this blog up to challenge people to think about America First. I am tired of politicians of all stripes who promise to deliver programs and policies that defy common sense and who act in their own self interest. It is time to put America First.
When we have two unnecessary wars in progress, failing educational systems, an economy in the ditch, and a national debt beyond belief, it is time for Americans to demand policies that make sense for America. Let's look beyond the party rhetoric and get real. It is simply foolish to continue to borrow money from the Chinese and then run up deficits for our children and grandchildren to pay. It is doubly foolish when the government spends our money on wasteful no-bid contracts and unnecessary foreign adventures while is pays little heed to our needs at home to rebuild our infrastructure and invest in alternative energy programs.
America is at a crossroads. Both parties acknowledge this; however, we simply can no longer afford to pursue the policies that favor the special interests over the interests of America. This is why I will be writing about specific actions we must take now to get America back on track. I will also call out the politicians and policies that don't put America's interest first.
When we have two unnecessary wars in progress, failing educational systems, an economy in the ditch, and a national debt beyond belief, it is time for Americans to demand policies that make sense for America. Let's look beyond the party rhetoric and get real. It is simply foolish to continue to borrow money from the Chinese and then run up deficits for our children and grandchildren to pay. It is doubly foolish when the government spends our money on wasteful no-bid contracts and unnecessary foreign adventures while is pays little heed to our needs at home to rebuild our infrastructure and invest in alternative energy programs.
America is at a crossroads. Both parties acknowledge this; however, we simply can no longer afford to pursue the policies that favor the special interests over the interests of America. This is why I will be writing about specific actions we must take now to get America back on track. I will also call out the politicians and policies that don't put America's interest first.
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