Tuesday, September 30, 2008


From President Bush’s push of the panic button, to an endless barrage of, “if-the-bailout-doesn’t-go-through-main-street-it-doomed” diatribe eminating from every media outlet available for main street’s consumption, a great perception bubble has been floated. So called main street America is resisting succumbing, but the rest of the world has bought into it. American taxpayers are being punished for having allowed their administration’s and legislature’s lax and sometimes corrupted behavior. The perception now awaits passing of the bailout.

Confidence of the world’s capitalist systems have been shaken, and from London to Tokyo and Hong Kong, the global economy awaits to hear if the American taxpayers will once again step up to the plate. In this case, borrow some more. Then, magically, with the perception of a looming calamity defused by a bailout, lenders will loosen their tight hold on cash, banks will lend to one another, and all will be well again on main street. Since credit availability is the real problem, then the FDIC should be used to strengthen guarantees, increase limits, and become the vehicle for a workout, rather than a bailout. The fact is that banks and lenders are in business to make money through interest from money lent out, and as dust settles, funds will flow, though hopefully not as loosely as they have in the past.

Regardless what form Congress’ bailout takes, America will not go over any precipice. It is hoped, however, that this shock to the system does not fade quickly. Taxpayers must demand a clean-out of Congress, and a clean-up of Congressional funding and modus operandi.

Taxpayers must exigently press each member of Congress to pay attention to the state of the Nation’s debt and future funding commitments. The $700 billion is dwarfed by the over $50 trillion committed, much of it to health care. Congress, along with either McCain or Obama, will have to make very dramatic cuts into the federal budget, in a time when tax increases will be virtually impossible.

Congress is already taking large leaps into socialization of some key elements of the economy, which is an overreaction resulting from its inaction in the past. Congress must be exceedingly careful not to destroy the financial system with over-regulation. It must also enact some muscle into government oversight, and take action against any of its members who took funds from any of the firms, such as Fannie Mae and Freddie Mac, involved in the abuse and abhorrent behavior that precipitated this mess.

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Thursday, September 25, 2008


American taxpayers should be upset at the amount of Congress directed cash from any corporation, private interest or organization. Whether such financial injection is in support of new drugs, insurance, medical services, or guns, corporate donations to Congress or even to election campaigns should be illegal. Entities with agenda currying favor for their products or causes should be run out Washington. Fannie Mae and Freddie Mac did much worse.

Fannie Mae and Freddie Mac senior executives have been supplying cash to Congressmen including Obama. Why? Why would organizations that were established by the Federal Government in the first place, and which serve the government and the U.S. taxpayers, be “lobbying” congress? Why would these two entities extend the largess of bundles of cash, sundry benefits and late afternoon caviar and champagne to legislators? Why should they care what a few handfuls of Senators think or do? The answer lies in the shadows that underlie the reasons for the financial “surprise” of this past century.

No-one knew. This disaster caught all experts and manipulators on Wall Street, off-guard. NOT A CHANCE. Don’t believe it.

The executives and all senior management at Fannie Mae and Freddie Mac, as well as management at numerous other financial institutions knew exactly what they were doing. Pay-offs to Congress maintained “friends” in the Legislative branch so that there would be no questions, and no oversight of their activities. The abuse continued unabated while personal bank accounts filled up quickly before the ships sank.

Discussions of implementing strict regulations or guidelines is simply a vacuous derailing of attention from the challenge. The strange attempt to instill panic into the minds of all Americans may be a slight-of-hand endeavoring to hide something underlying the mess. THIRTY to ONE leverage was no way to run a railroad, but that isn't what needed hiding since everyone was doing it. Misrepresentations in the books was rampant. Risks were hidden to ensure the packaging, flipping and re-flipping of bundled loans, thereby maximizing fees and bonuses.

Why is no-one digging into the credit rating agencies whose AAA ratings applied to securities riddled with risky loans or worse, injected confidence in undeserving investment vehicles, and minimalized capital requirements for too many lenders.

While Congress agrees to a $700 billion backstop which will provide ample confidence to the markets, it should pick and chose which bailouts to fund as they occur. Otherwise, who will be the final arbiter of good taste as to which tattered financial packages will receive the beneficence from the bailout bucket? Paulson? The long list of reasons against that suggestion starts with conflict of interest and lack of objectivity. Who will make sure the banks running to the trough aren’t coming with only their worst garbage bags after cashing in the good stuff they’ve picked over? How will Price for the decayed assets be decided on behalf of the taxpayers? Will the folks who either led or cheered the parade as it headed to the cliff be reliable decision makers in the process? No blank check should be provided to anyone, least of all any so called experts who had more than passing interest in the creation of the mess. Lets remember the, “burn me once, shame on you, burn me twice, shame on me” caution sign.

The current Congress has shown little propensity for decisive leadership. Today it should not panic, and should not succumb to outrageous demands being made by those who had insufficient foresight to see the looming catastrophe that millions of others pointed to as inevitable. While implementing a solution, Congress should also demand answers to serious questions. Long prison sentences should await executives such as those running investment banks who broke laws, as well as those in Congress who received kickbacks to ignore the duplicitous activities. All cash, and assets accumulated with obscene bonuses extracted through cooked balance sheets should be handed to U.S. taxpayers on a silver platter.

Taxpayers should expect and demand diligence as well as responsibility from Congress, and a monumental blank check is neither diligent nor responsible.

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Monday, September 22, 2008


Ten days traveling up and down the West Coast proved to me that the intent of those controlling the Wall Street joystick, with help of many ever-so-willing media pundits, failed to instill Panic and Fear in minds of most Americans. Concerns? Yes. Panic? Not so much.

Taxpayers have been hit with a hurricane of bad news, and have even been threatened with promises that if trillion dollar bailouts were not implemented overnight, the whole financial system of the U.S. and possibly the world, might collapse. The American economy is not failing, and unemployment is at a rate most other countries are envious of.

Since the real problem rests with lenders or repackagers of home loans that can’t be repaid, is anyone telling America’s taxpayers how much these losses really represent in total? No. Is it really almost a trillion dollars, or is it really much, much less? Is anyone asking where all this money went? When a house sold, affordable or not, someone cashed that check. Why are taxpayers told that Treasury Secretary Hank Paulson needs to be given a blank check because only he will be able to do what is right, and he will know what backstops will be needed to provide a soft landing to this calamitous financial unraveling? Did he do what was right when he was head of Goldman Sacks for six years? Is it that he should be respected because he made almost a billion dollars as CEO of Goldman Sacks? His power and dominance continue their trajectory, and if he is given a carte blanche on access to taxpayer’s money, we can expect more abuse. Providing even more latitude to the likes of Goldman Sacks to become banks, is simply a knee-jerk reactive agreement to further consolidation of power.

Congress is not stepping up to the plate and neither are the two Presidential Candidates who are too busy flailing on the stump. If this is really the calamity we are all being led to fear, then all should be in Washington, coming up with immediate solutions. Bailouts are not solutions, just like band-aids are not a cure.

Don’t believe the panic-button pushers. Panic misleads, and it blinds those led to panic from seeing reality, or discerning appropriate action. Panic also leads to extreme swinging of pendulums that create new problems rather than resolve old ones.

It remains that America is a country that billions of people wish they could live in. America is the country that people have confidence in and whose environments they wish could be replicated. Its environment stimulates the entrepreneurial spirit that is further fueled by its creativity. It is also the only country that all capital gravitates toward when it is seeking security. The economic fluctuations, even those such as the ones we are currently witnessing or getting hurt by, caused by abuse or bad management, or even from errors in judgment, are risks accepted by those whose cash is seeking safe harbor. Transparency is one aspect favoring foreign investments in America, however, it is not the principal one. The overriding element is America’s power and international presence.

Whether you are a dictator in Africa, or an oil monarch pillaging your country’s wealth, or a foreign government fund, you will always place a significant portion of your cash where it is safe. America will print more dollars because it can, and it will have a market for them. The doomsayers all make money somehow, somewhere in the game, or just repeat nonsense they’re been fed. There are also those who feint left, then go right. Remember Goldman Sachs’ forecast that oil was heading to $200 a barrel when it was kissing $150? The price immediately caved in following their announcement. Were they looking for fish onto which to dispose of positions? This is no time to panic. Tighten up the belt a little, and save a few dollars. Middle America will ride this out in spite of its Wall Street leaders. However, American taxpayers should make sure their representatives in Washington take action on oversight, and implement some visible house cleaning, punishment on those responsible for the outlandish abuse.

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Thursday, September 11, 2008


CNN is repeating a story today of a Sacramento State grad who is auctioning off her virginity in order to fund her graduate studies. CNN talking heads present this as news, and are running a video of a young woman about to discover prostitution, though what the truth is, no one’s too sure – virgin or not, who knows. Who cares. CNN decided this was a great story so her pseudonym is revealed as well as where she plans to satisfy the highest bidder. Nice work CNN. Great story, and great decision-making.

Giving further airtime to this pathetic crossroad in this young woman’s life, CNN provides us with “live” interviews with other students for insight and perspective. The genius of the coverage comes in the stated purpose of this auction – furthering education. The CNN inquiring minds frame their questions so that the nobility of secondary education is such a splendid objective that disapproval for the means (prostitution) of paying for it becomes orthodoxy. Are we to understand that all students whose parents aren’t loaded, and can’t afford to pay their University bills, should consider it?

With CNN touting her auction to sell her body, it and its earnest hardnosed reporters are doing their best to make sure this woman’s auction is a smashing success. This will give legs to this story. Perhaps we will also be treated to on the scene video of the happy winner heading into the Nevada brothel to claim his prize. This will be another successful piece, bringing salivating advertisers fighting for 30 second spots on the reporting, and CNN will have established another journalistic milestone. Successful pimping in broad daylight, brought to your living room by talking twits whose objectivity was lost, or sold, long ago.

From the woman’s lips comes a quote that may well go down as one of the most absurd lip flappings, “Why shouldn’t I be allowed to capitalize on my virginity? I think this is empowering. I’m using what I have to better myself.”

Perhaps the editing rooms of Ted Turner’s creation believe that they have discovered a heterodox solution to the funding of higher education. Or perhaps CNN feels that prostitution is in need of some refurbishing, and education is as good a rationalization as any for promoting the oldest profession to the next generation. However presented, sex sells, and this story will get tongues wagging, and will continue to attract advertisers. Timing for so many young women coming of age would coincide with their burgeoning educational desires. Thanks CNN, and all the other media today, for providing names, videos, images and places on this absurd story. Thanks for lowering the bar. Thanks for providing this woman her 15 minutes of evidently much needed fame. What great examples you are presenting and setting for leadership, morals and principals. Our kids and grandkids will be forever grateful. And above all, thanks for presenting such a touching, poignant, and uplifting incarnation of self-confidence, and of human achievement.

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Monday, September 8, 2008


When your Secretary of the Treasury has to reassure foreign central banks that their holdings in Freddie Mac and Fannie Mae are sound, everyone should be concerned, particularly U.S. taxpayers. The “soundness” does not come from confidence in the underlying assets that have now significantly eroded, but in the reassurance and commitment that the U.S. taxpayers will stand behind those securities or loans. By agreement, the Treasury will be required to maintain positive net worth for both institutions.

U.S. taxpayers are now on the hook for exceedingly bad decisions made by lending institutions, brokers and borrowers. Dependence on foreign lenders such Japan’s and China’s central banks has enabled the funding of everything from second mortgages for the acquisition of the latest surround-sound 56 inch plasma screen TVs, to the bankrupting war in Iraq. While this move by Treasury may be receive positive responses from Asia, the size of the underlying problem is not known. For now everyone but U.S. taxpayers will sigh with some relief.

Neither the White House nor Congress (either Republican or Democrat led) had the good sense to implement effective regulation or oversight of financial institutions and markets. The U.S. dollar’s status and its prominence as the defacto international currency made the borrowing easier, and when you add the fact that many products consumed were made by the very willing creditor countries, we now have a debt balloon the world was unprepared for. Regardless the outcome for American taxpayers, the correction that may last a few years while the impact unravels, will inevitably change the global economic system, and impact all North American lifestyles, if not standards of living.

Freddie and Fannie were two major players that were managed by free-wheeling individuals whose agendas were dictated by egocentric priorities, and NOT by Doing The Right Thing Right. Unfortunately they are only two in a long list of institutions, including banks throughout the nation, whose executives should have been less self-serving, and who should have demonstrated more common sense. The Freddie and Fannie take over by the Treasury should ring alarm bells, and although it provides the appearance that things are under control, the announcements make no mention of the ominous possibilities that may await the Federal Deposit Insurance Corporation (FDIC). The supposed final bastion of deposit protection in the event of bank failures is only capable of covering sporadic failures, not a wholesale cave-in of the system.

Oversight and control of the past is impossible, and although measures must be implemented to prevent recurrence of the excess evidenced in the past decade, Congress should implement dramatic measures to reduce Federal spending. It should probably start with the military’s annual consumption of trillions of taxpayer dollars. Consumers and taxpayers have already begun their own reduction in spending, now the Federal and State governments must follow suit. Both candidates running for the Oval Office should make the economy the priority, and we should be hearing more of their plans for solutions to the current financial crisis.

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Thursday, September 4, 2008


Why is it that former politicians, after having spent years on the stump appearing serious and straightjacketed living off the bus, seeking perpetual approval, seem to flower once they’ve left their political posts? Giuliani gave one of the best, and no doubt funniest speeches of his career at the Republican Convention, moments before the landmark speech delivered by Sarah Palin. Where was this Giuliani and what happened to the one who tentatively dropped his hat into the Republican leadership race not so many months ago?

Rudolph Giuliani delivered a confident address with uncanny use of timing that would have been the envy of even the best comedians. Even some of his straight lines were delivered with humor. Where was this talent for timing and delivery when his back-of-the-pack-behind-Ron-Paul position in the primaries, and Florida no-show, needed him? Where was this currently surfacing capacity hiding during those lengthy boring attempts to sway listeners, and voters? His Convention speech was so entertaining that we can excuse him bringing up 9/11 once again to remind America of his leadership role during its darkest moment in recent history.

Whoever wrote his lines, “change is not a destination … just as hope is not a strategy,” may have given him the words, but Giuliani delivered them, again, with perfect timing and intonation. These comments addressed a concern no doubt present in the minds of most viewers, even those in support of the Democratic candidate. Obama has done a masterful job crafting his own image and presentation, ensuring that along the way he offended as few as possible. Giuliani threw a dart on Obama’s limited voting record and career with, “it’s not good enough to be present; you have to make a decision.” Like or dislike Giuliani, his point was made, succinctly, seriously, but with a smile, and difficult to deny.

Giuliani’s natural ability blossomed at what may have been the most important moment of the Republican Convention, the coming out of the Party’s V.P. candidate. Perhaps ego stifled Giuliani’s abilities in the past, when he personally had too much to lose or gain from a misstep or misspeak. Is it that now he has no high-risk puddles to step into that might really be bottomless pits? It is very likely that we did not really witness a new Giuliani, but simply the same old one with some objectionable veneers removed.

The extreme need or want of a political position seems to strangle the ability to be natural, honest, straightforward, humorous, or human. Perhaps more politicians could shed those restrictive shackles tightening their abilities at any podium, and choking their personalities. Thanks Mr. Giuliani for reminding us of what to look for, and what really resonates.

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Wednesday, September 3, 2008


The news coverage of the race for the White House in the U.S. circumnavigates the globe and pulls the world’s attention. The results will not only impact all Americans, it will affect lives around the world for the next four years. In this context, how does one reconcile with the current panoply of coverage we are subjected to that has long faded from thoughtful observation and conscientious reporting, or assessment, and dissolved into a disorienting carnival? Emotions rule the day, each side saddled with leadership it now has to sell.

Serious publications print articles, the content of which wouldn’t get traction in a discussion with the kids over dinner. A parent would be too embarrassed to allow such pettiness or rancor to be overheard by the kids such as some of the commentary the world is being subjected to by the mainstream press. At the root of this phenomenon lies the fact that whatever your political inclination, and in the U.S. your choice is really limited to Democratic or Republican, you now sell whatever leadership you have been given. Like it or not.

The hard sell has taken ridiculously emotional paths that have included philippic retaliating rants on Sarah Palin’s soon to be born out of wedlock grandchild, and the possibility that a former beauty pageant contestant might become Vice President. Other swirling invectives such as observations on Biden’s hair plugs have strained common sense. The most consistent pummeling addresses the expectation of on the job training that to be anticipated particularly for Obama and Palin, as if that has historically been relevant in past elections which catapulted Reagan, Cinton or Bush into the oval office.

Through the haze of subjective thrashing and personal attacks, today’s elections are about personalities, and the relative ability to sell them. They are hardly about confronting and addressing the challenges facing American taxpayers. On the personality front, Obama has been a better salesman, and the persona he has dedicated a lifetime creating has been able to resonate with enough of the audience, providing him support from half the electorate. McCain can’t give a compelling speech, so it will remain to Palin later today to rise to the greatest test of her life. Her delivery will inevitably be measured against Obama’s fluid talent with rhetoric, and she will have to bring the house down – not the Republican house but the viewers sitting at home seeking to make a purchase on who will lead them for the next four years.

Unfortunately the electoral decision won’t have much to do with content so much as delivery of and by the package, regardless what accusations or recriminations of sexism, feminism or racism might be floated by either selling group. The larger media outlets have done a deplorable job of presenting balanced perspectives, and have failed in the critical responsibility of the fourth estate to provoke debate on the core concerns of the taxpaying electorate.

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