• Should Bailout Beneficiaries Be Outsourcing Offshore?

Congress and the White House have left a moral dilemma for American taxpayers to resolve for themselves. Government has not shown diligence enough to install common sense agreements onto the multibillion dollar bailouts. Should recipients of taxpayer favors continue to send jobs offshore?

In the past year thousands of jobs, some very high paying jobs, have been eliminated across the country in companies receiving bailout money. The jobs have been terminated for U.S. workers, but they have reappeared in other countries. The benefactors? Hundreds of thousands in the Philippines and India, for example. These are beyond the usual consumer service and support types of jobs. These jobs are in research, bill payment and collection, credit analysis, and investment banking.

Why would Citigroup and Bank of America, among others, be gifted tens of billions by American taxpayers, without restrictions or conditions on use of the funds through contracts? Who is really handing out bailouts with no requests for the repatriation of jobs, where possible, such as all those jobs these companies outsourced? Are these stalwarts of American capitalism also receiving “bailout cash,” to swaddle their failures, from India and the Philippines perhaps? Not a chance. Why are senior corporate executives complaining about not being able to find necessary expertise when the competence was fired and replaced with talent on the far side of the globe? Any chance that this is rationalization by CEOs for the hiring of cheap labor?

Companies should be allowed freedom to manage as they see fit, …unless. When the Administration and Legislature decide to put taxpayers on the hook for trillions of dollars to bolster failing businesses, it is NOT right that those very same taxpayers be sent to the unemployment lines by those very same companies.

This lack of interest, ethics, humility, inquisitiveness, attention and duty by the Obama White House and the Pelosi Congress is confusing. Is no-one paying attention? Is leadership delinquent? Is pomp and circumstance the new prevailing flavor in Washington, overriding any expectation of thoroughness over such significant decisions? This leads one to become extremely suspect of the rush to implement stimulus packages. Nothing ever receives proper attention, or is ever effectively implemented behind the leadership of panic. This is not a welcome sign for the onerous road ahead. And don’t bother looking for any other signs pointing to creativity.

Of course, emerging markets have a right to continue flourishing, but this is not a debate on protectionism. This is a questioning of common sense. Taxpayers are not served well with the continuing export of jobs by the very companies they are sinking into debt for. Is the creation of JOBS not the principal objective of a "stimulus package?" It appears the navigators are too unfamiliar with the terrain, and diligence over the cordial doling out of billions is under the administration of extremely poor negotiators.

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• Disrespecting Taxpayers & Shareholders

As CEOs beg for Troubled Asset Relief Program (TARP) handouts, the new corporate mantra is, “maintain shareholder trust,” … sorry, make that the new corporate mantra is not, but should be, …”maintain shareholder trust.”

All Congress and White House promises of oversight on the bailouts don’t seem to apply to financial institutions. Bank of America received $45 billion from trusting taxpayers, and after its sloppily structured acquisitions of Merrill Lynch and Countrywide Financial, taxpayers watched helplessly as hundreds of millions were paid out in bonuses to the failed company executives. $2 billion went to the senior talent at Merrill for delivering $15 billion in losses for the last quarter. The excuse from B. of A., the 100 year old largest financial services company in the world, was that it couldn’t legally challenge the previously made promises for absurd payouts and bonuses to people who destroyed the companies they managed. Truth likely resides closer to lack of due diligence prior to the acquisition, and forgetting to impose much needed conditions upon closing.

How do The White House, Congress and B. of A. CEO Ken Lewis forget to make the cancellation of these extraordinary payouts part of the negotiation when the acquisitions of Merrill and Countrywide were being so brilliantly conceived? Now the Bank is looking for more bailout money from taxpayers. That’s after destroying one quarter of a trillion dollars in shareholder value. Why are taxpayers continuing to be so generous? Why are Obama and Congress not refusing to provide more money? Why are they not demanding removal of B. of A.’s Board of Directors and CEO? What has been perpetrated on taxpayers and shareholders is well beyond the bounds of abusive, and certainly not within the definition of “trust.”

Leaks of Merrill CEO John Thain spending over a million dollars to renovate his office pales compared to the $83 million he paid himself, before his company imploded, receiving $10 billion from taxpayers last October. Is anyone really paying attention? Handing out bailout money appears to be very easily done. Could it be dished out a little less sloppily perhaps?

The Citigroup version of abuse after receiving its $45 billion bailout from taxpayers includes a very visible $50 million executive jet. No flying coach for these managerial failures. Is there someone coaching these folks on effective PR? Now that the public distaste has become an impossible pill to swallow, Citigroup announces a decision not to take delivery of the plane. And this incompetence requires that it be paid millions in compensation so that it does not leave the fold for greener pastures? Who would hire these decision makers? Another bank adept at taxpayer and shareholder abuse?

Are Obama and Congress making good on their promises? It appears that such lack of interest is as extreme in disrespect of taxpayers and shareholders, as the extent of transparency, control and disclosure is lacking. Their response to the public outrage is disheartening and rather pathetic. What category of oversight does, “… (Citigroup) should not be spending its precious greenbacks on frivolous luxuries,” represent? Getting a Treasury Department official to ask Citigroup to rescind the decision after the furor became deafening was proof of incompetence in the execution of the duties to represent taxpayer interests. Should parameters for use of funds not have been decided on and agreed to before the cash bags were delivered?

Where in the rainbow of possibilities contained in the term, “accountability,” does the taxpayer-funded influence peddling of politicians by these companies, get such interpretation? Should taxpayers be grateful that B. of A. has decided to curtail its visible lobbying for bailout money? It will do so more privately from now on, and the rest of its lobbying activities will advance unabated. Politicians will continue to be influenced with taxpayer bailout money, but the manner of this manipulation will be much less embarrassing to taxpayers. Whatever partial non-lobbying the bank is not participating in, seems to be working. It’s expected to receive another traunch of TARP funds as its own exotic and toxic securities ferment into further billion dollar losses.

All of this has nothing to do with tightening regulations on the banking industry, though some is required. This is about setting in place firm agreements and conditions under which the hundreds of billions are to be accepted and spent on behalf of the taxpayers who will be on the hook for the money. This is about establishing a government agency that would, on behalf of taxpayers, become the guiding body watching over the complex intricacies of the whole financial system and its ability to create derivatives no one understands or analyses. This is also about showing respect for sweat that America’s broad middle class will endure to pay back all of this bailout money.

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• You’re Fired. Now, Where’s My Raise?

Today Microsoft announced a shaving of 5,000 jobs internally and a reduction of thousands of external jobs with its contractors or suppliers. This is rationalized by “economic conditions.” Did we read anything about wholesale compensation cutbacks? Not much.

This is not a condemnation of Microsoft, but a statement on Executive responsibility and attitude. Management in companies across this continent, particularly senior management, holds meetings on how and where to cut back roll calls, and diminish hard, non-discretionary costs weighing on the cash flow statements. The purpose of these thousands of meetings in fluorescence filled rooms is first, to save the most senior jobs, and second, to save the most senior jobs. Why? Because they can. Why? Because they’re more senior than the rest. If you are a senior executive in this economic climate you would have to commit evident fraud to get fired. The economy gives you all the rationalization for failure you will ever need, “It’s not my fault, and the economy sucks.”

None of these meetings are discussing the extermination of options from compensation packages. Starting with the CEO on down the layers of each corporate pyramid, each individual has been convinced that options are the way to riches. Middle and lower ranks dream of the day when they will get a taste. Wall Street pulled all of corporate America into its game. Brokerages influence companies through their prejudice of CEOs and Boards of Directors, and as well as through their control of the public trading markets of the companies these executives manage. Employee options are one key to that control. There are other schemes used to control CEOs, however, for the manipulation of the senior crowd, options are a perfect and very effective tool. Corporately, options can be argued to be effective in up-markets. The effectiveness argument looses fervency when options are under water, as is the case for many in the markets we are now experiencing. So why is no one arguing against them as an effective tool in the motivation arsenal? Options don’t work in a down turn. So why use them? DON’T.

Employees, including CEOs, should not be preoccupied with stock markets. Doing their jobs effectively will strengthen the company and that will, or should, satisfy shareholders. Forget the broker. This employee option business is a Wall Street subterfuge and everyone is familiar with the refrains that attempt to legitimize the practice. Any executive hiring a consultant who sings the “equity compensation” song to his board or to the shareholders, should be fired. Their rhyming couplet about, “aligning executive interest with shareholder interest,” is a fraud. Throw them out.

Middle America has been lulled into accepting that those at the top of the corporate food chain know something it doesn’t. Middle America has come to accept that the lofty layer of American capitalism somehow deserves hundreds of millions in annual compensation. The practice should be stopped and all shareholders should demand an end to it. The senior ladder of success should be compensated with salaries and bonuses structured around objectives intended on building the business. Objectives such as growth and profitability. You don’t need a complex algorithm to establish actuals against quotas for sales or margins that could be employed to dictate an employee’s compensation.

None of the above mentioned corporate meetings are having serious discussions on ethics, moral standards, sustaining the human community, or sustaining jobs through the recession by dramatic overall cuts in salaries and bonuses. Have any companies announced immediate 20% pay cuts to the top half of the employee spectrum? Is anyone making over $100,000 in total compensation getting chopped by 20%? Is anyone making over $250,000 getting a 25% haircut? As for anyone taking over $500,000, … hmm, OK, for you maybe we’ll, hang on, ... let’s talk about a loan back to the company, could we? You get the point. Implement major cut backs in salaries and bonuses, and save jobs. You can’t save all, but save as many as humanly possible. This will require an attitude shift in senior management.

Such a strategy would allow people to continue supporting their families, buy food, make car loan payments, and pay their rents or mortgages. I’m not suggesting that corporate America turn into Sally Ann, however, the whole economy needs creativity injected into its limbs if it is to by-pass a depression. Don’t keep positions that are not required or redundant, but most of the employees now being fired were hired for good reason. As markets shrink so too will payroll, but in these times of bailouts, the escalated compensations of senior staffs need revisiting. These senior levels must take compensation diet pills. Big ones. Such therapy can only be prescribed by those taking home the largest piece of the pie. All CEOs should make a visible and public effort to save the rank and file.

The economy does not need to read about any more cuts in work forces, as 3 million already lost their jobs last year, but it really needs to read that you, the CEOs, implemented drastic cuts in compensation. Even if you personally take one cut of $30,000 to save one job, that is a move in the right direction. Each company can do its part. The positive PR will do wonders for your frame of mind, for your company, and most importantly, you will be forever grateful. Really.

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• Bernie Madoff - A Letter Of Explanation?

The Editors of The Pacific Gate Post received an envelope from persons unknown, containing a letter apparently discarded in an alley behind an Upper East Side, Manhattan apartment building. The letter had been crumpled up into a ball and partially torn, possibly having been thrown out of a penthouse window. Its reconstruction was completed and we publish it hereunder, confident that even though it is a piece of fiction, it may contain shreds of clarification on recent economic events.

Dear Friends,

As I sit in my Upper East Side apartment living room, with nowhere to go, I watch the news and read as many publications as I can have sent up. It’s almost like I am observing some other person everyone is talking about. That characterization in the news is not the Bernie I know. I feel an urgent need to clear the air because, I’m not the person being portrayed. This whole thing has been completely contorted by the media. I am not so different from the rest of Wall Street. So please bear with me.

I am under house arrest, and the authorities are even searching my mail. I have more than enough time to contemplate the last 48 years. It’s been that long since Ruth and I formed this business of ours, and I feel bad that the downturn in the economy has been so destructive. I was always a very private man, have never liked public affairs and I’ve pretty well stayed to myself. Although my wife, Ruth, who is also my best friend, dragged me out to functions, I like peace and quiet. I’ve been accused by some of being antisocial, but that’s not the case. I just like being by myself. Just ask her. Even when we go out for dinner, it’s just the two of us. That’s it. She’s very patient with my mood swings, and she’s the best thing that’s happened to me. I prize privacy as much as I despise failure.

I also can’t stand blowhards and the investment business is full of them. Since in the past I did not wish to cast insult on anyone by excluding him or her, Ruth and I mostly stay by ourselves, or with our family. These people running hedge funds and investment banking companies have overinflated perceptions of themselves. Everyone worships them. Hard working Americans think these money managers know what they’re doing, because CNBC, or Barron’s, or the Wall Street Journal tells them they do. I’ve spent my life with these people. I’ll tell you what. They don’t know anything extraordinary, but they’re good at pretending. They don’t produce much, but they get paid more than anyone who actually works for a living.

Let me explain something here. For years I ran a successful business. I was a trader and my goal was to become the most successful fund manager on Wall Street and build the biggest fund on the planet. We did it all. Hedge fund, broker-dealer, trader. We had the latest and best technology, which gave us an edge. Technology was critical. Our software made it possible for me to manage the reports and payouts on the enormous amount of money that were thrown at me. I developed a reputation, a really outstanding reputation. No one could touch me. I had the Midas touch and from Miami to London every money manager running anything bigger than a bingo scurried energetically to attract my attention. I understood the big money boys, and I delivered exactly what they wanted, reasonable and steady returns.

I’ve noticed that some people, who invested with us, now appear indignant and are claiming losses. Such hypocritical behavior is downright pathetic. Ask them how much they made with me, year after year. If they were fund managers or fund aggregators, here’s a hint, check their overseas travel schedules from past years. Check the files of travel agents. They’re full of good news for any investigator worth his salt. When you think of Geneva, what do you see? You probably envision an idyllic, very European city overlooking beautiful Lake Geneva surrounded by the Swiss Alps. For years when I saw Geneva, and a few other cities like it, they were deep wellsprings of cash exchanged for a piece of the action. I am using Geneva as a metaphor here. A metaphor suggesting mountains of cash sitting discreetly in banks and safety deposit boxes around the world from kickbacks or commissions.

Private bankers are guys who manage pools of capital. No one can check how much he or she gets in “kick backs” because there is usually no conspiracy. By that I mean, … there are only two people in the room. That’s not a conspiracy. Just check some of the feeder funds, or the funds of funds, and their deal-maker managers. Not all of them of course, but some. That’s where I started the game for crying out loud. I arranged for others to set up funds, and they fed that capital into my companies. Initially it was just small investment groups, but those snowballs grew, and grew and grew. I became bored with repeating the refrain about my split conversion strategy using both put and call options, but before you knew it, we were raising more money than anyone could invest intelligently.

So many money managers would come with their exasperating questions, and the pretence of due diligence. Some of the idiots who really took themselves seriously even came with forms, asking about trading strategies, governance, compensation and using terms like fiduciary standards or benchmark performance. Like these barnstormers had a shred of any moral standards. These were the same crackbrains who charged their clients millions for “reinvesting” the money elsewhere because they couldn’t run a fund themselves. They are the modern version of snake oil salesmen. Getting them out of my hair was easy. I just made myself unavailable. You want in, give me a check. If not, get out. It worked. They couldn’t wait to hand over money.

The principal key to success for me was “perception.” Great PR is absolutely everything. That’s something my father never had the privilege of understanding. He tried to get into the money game, but had little success. I somewhat fell into the character of the aloof and insulated investment banker by accident. I didn’t want to answer questions about my trading strategies, and even when I consented to meeting with potential investors directly, I kept all meetings short. My aversion to meet, worked wonders and the more I became unmeetable, the more people wanted access. This evolved to the point where people threw hundreds of millions at us, just so that they could get twenty minutes in my office, or so they could be seen having lunch with me. How weird is that? I made sure that I joined the right organizations, which provided me some credibility, but in fact they would end up bragging that I was on their board, or part of their group, or that I was an advisor. Through goodwill, I created a long series of what you might call recursive loops of gullibility that brought me an infinite source of investors.

The games in the investment business may have a few rules but these are just veneer. The complexities that have evolved are intended to circumvent or confuse oversight. How can anyone, even those intimately familiar with trading, catch a trader worth the name who’s front-running, or naked short selling, for example? Unless you’re sloppy, you can get around legal restrictions without detection. Investigators know the game, but they have insurmountable difficulties when it comes to getting hard evidence. Today, volume and technology make illicit trading difficult to detect, yet many people on Wall Street do it. You do what you have to do in order to remain ahead of the next guy. If you don’t believe me, do your own research on how many of the major firms have been fined over the last thirty years with timid slaps of the hand. What they were doing was illegal, but who went to jail?

Loyalty was critical to me, and a central part of my strategy was to make sure that all investors understood unambiguously, if they took their money out of my hands, they would never be allowed back in. As a result, most investors never asked for their principal. If someone invested, we also demanded that they not divulge anything about their investment, or our business. That guaranteed that they would spread the word in hushed voices, punctuating our image of exclusivity. No one can keep a secret, least of all an ego with a pressing need to brag of its admittance into the most exclusive investment club in the nation. They can’t now be accused of gullibility when greed was their motivation.

In the past decade or so our total volume under management created momentum. The size of our volume provided us a perceived ability to affect the markets. Investors assumed that we could manipulate market sectors to our financial advantage. They were willing opportunists and ardent participants, knowing full well that such manipulation would have been illegal. This was another critical element in my strategy. These deliberate and enthusiastic partners in my game asked no questions once they were in. Even people with serious money “don’t want to know” although they might suspect. No one is innocent. As I said, good, effective PR is everything. With the right image everything is overlooked, including what you have or have not done.

How do you think all those salaries and bonuses on Wall Street are justified? Their image. They don’t call it Ponzi, but what’s the difference? Money is vanishing. Why do you think no one is getting any accounting of where the bailout money of the banking industry has really gone? Well over a trillion dollars has mysteriously disappeared into a giant black hole. Bailout money is being used to pay hundreds of millions in bonuses? Is anyone accountable? Oh, sure, Congress pretends it is going to ask questions. That will be about as effective as those questions I was asked by those investors who wanted to understand my bookkeeping. Why so much complacency when there is so much anger at me? Am I just a scapegoat, and the object of venting, that is a necessary relief valve absolving all of Wall Street? All cameras are focused on my front door while taxpayer bailout money is siphoned off to distant islands and yachts not registered in the U.S.?

There has been an assumption about my sons, Andy and Mark, and other family members having participated in my schemes. They worked with me but had nothing to do with it. Nothing. I needed them to take care of our private family interests and our charitable work. That was a central component of the family’s communal focus. My kids turned me in. I asked them to. They just pulled the trigger a little early though, I had some plans for a few days before the authorities showed up at the door. Same goes for my brother, Peter, who has been a loyal associate taking his instructions from me, overseeing our trading operation, but leaving all of the senior fund management alone. He is a lawyer by training, confused by investment strategy as most people are, and he knew nothing about trading and money management.

You will read of endless “trusting” investors having been swindled and you’ll hear their rationalizations. Most of them were just greedy. I also predict that you will read about the closing of hedge funds, and funds of funds over the next couple of years. Their leadership will not be questioned, although their actions were not much different from mine. They will simply slip away into the night. I am proud that I have at least had the decency to step up and take the blame. I decided to plead guilty in order to end the stress on everyone around me. I have taken a giant leap onto my sword, and I have instructed my lawyers to make sure any deal they conclude with the District Attorney is final, and all-inclusive.

People are told, “don’t manage your own money, hire a professional.” Think about that statement. Why is it that money is such an enigma to so many people? Why do they listen to the so-called experts? Why do they persist in asking to get ripped off? Investors continue to place their money in the hands of people they don’t really know. Do you really know an acquaintance? Do you truly know a friend? We barely know ourselves, yet we trust others with our hard earned cash?

I am not like Wall Street, I am Wall Street. Today I will ask my lawyers to see if I can do consulting for the investigators and legislators. I know this game. I could be the best thing that’s happened to cleaning up The Street in a hundred years.

Sincerely,
Bernie

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• Consumers And Volatile Oil Prices

Consumers across North America daily check the wildly fluctuating prices of gasoline at their favorite neighborhood stations. Magically, prices change at all pumps in unison. Just as strangely, pump prices have not dropped in step with the currently defeated price of crude.

Price of crude oil today floats around USD$35 per barrel, down severely from a high of over $147 only months ago. You don’t require a calculator to realize that the current price is now at approximately 24% of it’s high which is not reflected in your wallet’s hemorrhage as you fill-up. You drive off disillusioned and frustrated, but you feel less anxious than you did following your recent summer fill-ups during the oil speculation frenzy. You hear rationalizations like, “OPEC is contracting its output by 2.2 million barrels per day,” or you read, "... global demand is expected to shrink by about, …" well it doesn’t matter, you just know that you and millions of gasoline consumers are at the front line of this commodity’s implications on the future. What can you do? What will you do?

It would be easy to blame oil industry conspiracies for the wild ride of oil pricing. Reality is that stakeholders directly or indirectly connected to the industry are simply doing what is necessary to extract as much money as possible out of their respective positions. Each is being human. Expectations of high returns currently includes “hoarding.” At least this is the prevailing clairvoyance of astute speculative bets. Keep that one in mind.

To shatter more assumptions and agitate matters further, hoarding has exacerbated the impact of refinery output reduction. Refiners had curtailed operations, contemplating drops in demand. The resulting confusion ignited volatility in prices to frenetic levels. Such volatility is not constructive to the overall long-term health of the exploration and refining sectors of the industry. Uncertainty in oil prices is also not therapeutic to an ailing economy.

Crude reserves are bursting the capacities to contain them onshore to the point where storage availability has become scarce, and oil filled tankers are sitting afloat offshore, awaiting a more favorable price day. This is a calculated measure to apply pressure on the outcome of pricing speculation. This strategy expects a global economic recovery. Should that not occur, the tactic hopes that a depletion in refined oil might eventually bring back prices of $60 or even $70 per barrel. These are the price levels that many oil resource dependent economies require if they are to escape overwhelming deficits. How can a Middle East monarch possibly retain power over a semi-suppliant population, building palaces, ordering 400-foot yachts, and over-fitting Airbus A380s on $35 oil? Can’t do it. Something or someone has to give.

Here we are in the middle of a cold winter, yet consumer demand for oil continues to drop. Diligence with home thermostat settings has had a direct impact on consumption. “Travel” reduction has also cut a deep gouge into supplier assumptions. Overall reduction in consumption of all goods affects the price of oil negatively, and consumers should remain vigilant. We should all maintain our current frugal attitudes toward accumulation of all things not grown in soil. The speculative bets made against the consumer, may turn to bite the hands that placed them.

The OPEC cartel and other oil producing nations will continue to be conflicted. They are each competing for a piece of the consumer’s oil dollar. Since each barrel of oil finds its own independent path to market, the Saudi barrel will always seek a position on the delivery system ahead of the Venezuelan barrel, which will itself attempt end-runs on the Nigerian barrel coming across the ocean. Current prices have also macerated attitudes like those of Venezuelan Strongman and part-time Latin American hero Hugo Chavez, who is now soliciting help (read begging) from the major oil companies he not so long ago demonized and seized assets from. Evidently there is no persuasive Spanish translation of the adage about “burning bridges” he is familiar with.

The outlook on oil prices may be uncertain, however, there is one enduring certainty world markets can rely on, … the consumer will persist as the arbiter of good taste on conscientious consumption. The consumer will continue to command oil price trend direction. Should current tendencies persevere, and consumers stay the course, chance will be infinitely more accommodating to the reality of an economic recovery within the next eighteen months.

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• Is Obama Right To Ignore Bush Transgressions?

President Bush has cloaked his term in the White House with a singular distinction of secrecy that would give Richard Nixon a case of acute envy. President Elect Obama has just indicated that he does not want to be, “looking backwards.” Is this an appropriate deflection for an incoming administration?

The eight-year imperial Presidency that George W. Bush and Dick Cheney have enjoyed, has been one long sequence of questionable and unexplained, but massively expensive events. Taxpayers have been patient as they watched an administration mislead them into a war whose astronomical costs may never be audited, and through which much questionable siphoning of cash has been deftly executed. Bush and Cheney friends, along with their companies including Halliburton Co. were seen to be taking advantage of hundreds of thousands of contracts. Taxpayers were not surprised when Halliburton’s Chairman announced he was moving headquarters offshore to Dubai. The endless fomenting suspicions were not appeased, they were irritated. Repeatedly, questionable corporate ethics were given a pass.

Obscene pictures taken in a prison they had never heard of also confused Americans. They were further conflicted in how they should feel with the detention of prisoners in Guantanamo, held indefinitely without due process. The discomfort was not really for the prisoners, but was due to a certain malaise stirring in the knowledge that while laws provide us protection against imprisonment without at least having had the benefit of due process, the Administration had managed to somehow circumvent the rules. Who might be next?

America was provided detailed explanations on the extraction of information from extrajudicial prisoners, through a particularly aggressive method, and “waterboarding” joined the English language. We have more recently wondered about the extent to which spying on our lives has actually occurred. Although we have moved through anxiety regarding terrorism, and then passed into annoyance on the invasion of our privacy, we are now slipping into a tunnel of suspicion that government attitude has shifted to an assumption that everyone is suspect until proven otherwise.

The Iraq war, the Iraqi reconstruction, and the countless available accesses to financial abuse and corruption, continue to make headlines. These reports do not exhaust our patience as much as they might have done prior to the current financial crisis overtaking our lives. The bombardment of bad news has to be prioritized. A $15 trillion debt trench has been dug by corporate and political mismanagement, with enabling help from very suspicious Congressional oversight.

Whatever Obama’s motives for not being emphatic or specific on digging out any wrong doing, the decision appears to be the right path for him to take, and his Presidency can be given a pass on this one. The problem is deep and wide, but it is not his. This conundrum is endemic across too many levels of the system from the White House to the Capitol, from the Pentagon to Wall Street, and from Iraq to Dubai. Taxpayers will have to pressure their elected Congress and the hired bureaucracy to deal vigorously with those who have trampled on laws, if accordant evidence of wrongdoing surfaces. The current administration and legislature cannot be given a pass. The country does not need a witch hunt, however, taxpayer outrage deserves a relief valve and the American Democracy can withstand the heat.

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• Cell Phone Invasion Of Thought

There exists a space of about six feet in diameter around each of us that has long been considered our very personal and intimate domain. We become uncomfortable when someone invades that space uninvited, yet cell phones invade more than our personal space. They intrude on the moment.

Whether cell phones have become an addiction can be debated, however, what has become an incontrovertible event of daily life is the cell phone’s ability to vexingly override everything and anything that might be momentarily adventuring in the minds of hundreds of millions of us. Elevators, for example, bundle others into our small unconcealed air space, but these invaders don’t generally intrude on our cerebral deliberations and consciousness. Our personal spaces are intruded on unusually when we are in motion. Thought, on the other hand, is invaded by untimely surprises of cell phone rings. Sudden appearance of a call, forces a diversion, even a dismissal, of whatever is preoccupying our minds in the moment.

When in a conversation with an acquaintance or friend, and the person’s phone rings, their attention is instantly diverted. Even if they don’t automatically answer the call, they will check who is calling, then perhaps provide an accommodating gesture indicating the caller is less important in their lives. The gesture is not reassuring. Their glance returns to the phone, there is a hesitation, then the decision becomes final. Your discussion is to continue. The sequence of the moment has been broken. The discussion, intimate or business, received a decisive insinuation. Whether you were more important than the intruder, you might never know. A phone’s ring barged in on your fellow traveler’s thoughts, as well as your own. You can’t help but be irritated. All of us feel that irritation daily.

The rudeness, or selfish behavior that intrudes on our lives by those who must share loud cell phone conversations with crowds, are not the most disturbing trend impacting our cultures. The most troubling reality is the cell phone’s random intrusion willingly allowed into our minds, striking rudely into the heart of our thinking, deliberating, pondering, creating, considering, or reading, and writing. We accede to the most invasive trespassing when we are alone, yet that is when we do much of our more important thinking. It would treat mankind to preferential treatment and would nurture humanity’s advancement if we implored our cell phones to provide us some long disconnections from the ring. Our common consciousness would be grateful.

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• Democrat Responsibility For The Economic Crisis

On their road to domination of Congress and The White House, the Democrats clamorously and successfully, accused the Republicans of engineering the current economic crisis gripping the nation. Today Democrats control the country. Now what?

As dust settles on reality, the evidence of responsibility now points backwards in large degree to the Democrats, not just Republicans. At least to a much greater degree than the MSM ever pretended. The following piece of video shows segments that cannot be repudiated. Democrats were the biggest beneficiaries of Fannie Mae and Freddie Mac generosity, yet their leaders were at the frontlines of defense for those who were at the heart of the mortgage financing bubble. Democrats not only prevented oversight and restraint, they enthusiastically applauded the abuse.

One can put spin in the retelling of most events, however, the high culpability level of Democrats for the financial disaster that has been inflicted on the Nation is difficult to deny. For example, the words of the bombastic Barney Frank, the Harvard educated Democratic Attorney from Newton, Massachusetts, cannot be spun, twisted or camouflaged. As you watch the video on the following link, you might wonder why no one has asked Barney Frank or the Democrats to explain his unambiguously stated position. Don't get too hung up on the fact that the video is from Fox News archives. They didn't force Frank to fabricate the Democratic position.
YouTube Fox News Video - Barney Frank & Co.

Apologists for Mr. Frank, including the NYT, steadfastly refuse to assign him responsibility for a questionable lack of interest or awareness in organizations under his aegis, while they suggest he is the smartest guy in Congress, and that he has been bold enough to “take on” Paulson. Has everyone forgotten that Mr. Frank is Chairman of The House Financial Services Committee? I rather think that this is more substantiation of his capacity to outwit and out-shout his detractors. And he does it with such compassion.

Mr. Frank has proven the most gifted Congressional deflector. He very successfully diverted attention away from his and Ms. Pelosi’s negligence, and from the role of Democratic policies and tendencies in the creation of a social experiment in utopia where everyone with or without income would own a home. Of all people to whom Barak Obama now owes infinite gratitude for his Presidency, Barney Frank is at the top of that list. Mr. Frank should have a bedroom in the Obama White House named after him. Well, … at least for four years.

Republicans can take some heat for not having been more vocal, however, leadership out of the current economic quagmire is now squarely in the hands of those who fuelled the fire that destroyed value across all markets burning trillions of dollars. We will be witnessing Mr. Frank and his associates parade the SEC through an artificial inquisition, knowing nothing will come of the performance. Questions will be asked and answered with equally tempered determination, resulting in nothing. Retaliations will be minimal, nor will they serve the public good, and restitutions will be impossible. While Democrats have won control of the nation, their motives and their capacities to steer America out of the recession with diligent concern for taxpayer interests, are in serious doubt and will continue to remain so.

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• Myths Of Debt To Be Corrected For 2009

The year 2008 brought a rude awakening to a population enthralled by a bottomless availability of cash. Mesmerized into debt accumulation we now wonder how we could possibly have overdone it.

As we launch into a new year, it might bode well to be reminded of some of the myths we enjoyed so much these past two decades.

• Debt is your key to achieving the lifestyle you deserve.
This well-oiled refrain was repeated ad nauseum throughout the past quarter century, to the point where the affirmation morphed into an accepted assertion. I borrow, I spend, and therefore I am. The Fed, Congress and the White House have historically presented a united front to convince taxpayers that they should seize all opportunities to consume. It has been the patriotic duty of all citizens to consume impulsively and with abandon, taking absolute custody of the title Consumer.
• Spend yourself into economic recovery.
It appears that all media has bought into this myth. Abundance of noise from economists and pundits has been particularly effective for too long on this one. The economy needs you. Business needs you. There are bonuses to be paid out at the top that will trickle down and stimulate all corners of your economy. Your guilt will get you if you don’t spend everything you can borrow. Forget saving for a rainy day. Forget budgeting, and absolutely reject the concept of finding balance between funding your needs and setting aside money for your future unanticipated emergencies. You don’t want this recession to devolve into a depression, do you?
• The Debt you are drowning in is not your fault.
How could you possibly have known that buying your first home for $500,000 with nothing down and a variable rate mortgage would launch a perfect storm through your future, ravaging your state of mind?
• Wall Street, The Fed, and the World Bank know what they’re doing and they know best what is good for you.
This one requires little delineation here. Dissecting it might even be a little too depressing, and might dissipate the joy of a brand new year. We'll save it for a future article.
• Becoming highly leveraged is a right of passage into nether regions of society.
Leverage’s modern redefinition is imbued with notions of achievement beyond simple debt. It embodies an ultra-modern conversion of water to wine. Wall Street was able to stretch the boundaries of debt with the creation of derivatives, those unfathomable, little understood but outrageously leveraged vehicles that were so effective in creating billion dollar bonuses. With government advocacy, the banking industry distended debt to the extreme boundaries of leverage, inventing unfathomably creative debt instruments hiding behind ambiguous terms such as "derivatives." The beauty of this myth rests in its apparent ability to have magically enchanted the top of the economic intellectual food-chain.
• You should not wait until tomorrow to acquire what you can get today through debt.
Instant gratification has become a firmly entrenched affliction. Capricious satisfaction of wants has transplanted patient and planned fulfillment of needs or considerations for the future. It is almost as if there has been a very deep shift across a broad swath of consciousness, and now the thrill of the chase no longer provides the joy it once did. Have indulgence and consumption become the voyage?

Intuitively we have all known for over a generation that we were living a great paradox. Lifestyles were better than ever, yet in the core of our beings, we all felt an unmistakable angst. Since the mid eighties, each one of us sensed that very conflicting dichotomy between what we were doing, and what we knew was right. We were over-borrowing ourselves into the highest standard of living known to any society in history. Political leadership cynically applauded.

2008 slapped us into acknowledging that our intuitions were right, and that long-term health of an economy requires savings and also requires investments. It has been years since it made any sense to leave money in a savings account to collect interest. Inflation deducted from the interest left a shrunk balance at year-end. Bernanke’s interest rate cut to a half percent, will have little impact on borrowers’ access to loans. Panic set-in, and attitude shift will be slow process. Congress and The Fed should revisit the government's interest rate policies. Taxpayers should be looking forward to making money on their "savings," … in the bank.

We are thinkers, inventors, creators, producers, nurturers, and spiritual beings, who can enjoy a material abundance we ourselves define and frame. We decide the nature and scope of our intellectual and spiritual sufficiency. Rather than giving in to external strafing of our decision making, it is high time each of us gave a little more room to our own individual Intuitive Knowers, abating the consequences of our overwhelming egos and intellects. Human satisfaction and progress should not be measured in GNP growth, or intoxicating accumulation of possessions. The voyage has become exhausting. It is time to sweep aside the myths. It is time for living with less anguish, and acquiescing to the truly profound joys life offers far from the sirens of debt.

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