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| | The Small Business Think Tank Network is not currently active and cannot accept new posts | | Commonsense Approach To The Economy | Views: 1438 | | Jan 31, 2009 12:06 am | | Commonsense Approach To The Economy | # | 
Michael Lemm | | My apologies for the length of this ... but there's no link to refer ya'll to. I received this as an email newsletter from my Congressman today (Randy Forbes, VA)....so it has to be complete text.
Regardless of your political leanings ... what's your thoughts on what Rep Forbes says about commonsense? Particularly in regards to the impact/effect on your small business (e.g. current bailout package vs "something else" you'd recommend).
======================
....The Commonsense Approach....
Normally, you and I receive our daily dose of bad news by turning on our television, plugging in an internet connection, or walking to the end of our driveways to pick up a newspaper. However, these times are different. Today it is delivered by a best friend who has lost his job and can¡¯t sleep at night because he fears he will lose his home, or by one of our children graduating from college and quickly discovering there is no job market, or by someone with whom we work or attend church who has received the life transforming news of a major illness.
Last week, I received the news from my nephew that he had just watched his house burn to the ground. When I arrived, I looked into the eyes of a man who worked multiple jobs to keep his family going, and I watched as his children sifted through ashes to find the charred remains of memories they can never replace. No words were needed; it was a picture I will never forget. I stared in the face of a family I love, who was experiencing the realization that they had lost in a matter of moments every material item they had worked for, received as a gift, or built for over a lifetime.
Across America today there are families just like this who worry when the quietness overtakes them that this economic crisis burning across the globe could overwhelm them with a similar fate. Individuals expecting to retire see those hopes dashed in a moment. People working multiple jobs to keep their families afloat lose their jobs in an instant. Young people with their entire lives before them recognize that their hopes and dreams may be lost because they either cannot afford to attend college or cannot find a job once they graduate.
That is why we need a bold plan of action, perhaps initially led by government, but not totally dependent upon it. It has to be innovative, but most of all it has to be an effective solution ¨C not just effective rhetoric. In this effort, Americans have been far ahead of their politicians. They realize that a bold plan is not measured by its costs, but rather by the strength and wisdom of its ideas. They also know it is not measured by what the editorial writers or TV pundits say. And they know it is not measured by its complexity. Instead it is measured by a single criterion ¨C does it work?
In order to work, it must have accountability and transparency, and it must pass the simple commonsense test.
The simple questions we can all ask are these:
1. Have you received your check from any of the bailouts yet? I can assure you many of the CEOs on Wall Street have.
2. Are you able to borrow more easily today than you were six months ago before all of these bailouts began?
3. Are you less worried about your future now than you were before the bailouts began?
4. If the government asked you if you would feel better about your economic situation by keeping $6700 for your family, or sending it to the government and asking them to spend it however they would like, which one would make you feel better?
I am one of only 16 out of 435 Members of the House of Representatives who has voted against every single bailout and stimulus package in the last two years. I did so because the packages lacked those critical principles of accountability, transparency, and effectiveness. Unfortunately, even many of the original proponents of the programs admit that they have not worked and that they will not work. However, it is our grandchildren who will be paying for many of them, years after we are gone.
Commonsense tells us that if we are trapped in the woods with a wild animal attacking us and we have only one gun and five bullets, we have to act fast, but effectively. How foolish we would be to fire all five bullets in the air without aim, in our haste to act suddenly. We would soon be out of ammunition. Instead, we would carefully target our shots because we may not get a second chance.
These bailout programs have been more like randomly shooting in the air than a targeted attack.
This week we voted on the biggest stimulus package yet. It is the most expensive single piece of legislation Congress has considered, and the total cost of this one piece of legislation is almost as much as the annual discretionary budget for the entire federal government in 2007. I voted against the $819 billion stimulus package because it, like all of the others, failed to meet those three principles of accountability, transparency, and effectiveness. Here are some things you should know about the stimulus bill that came before Congress this week that your children and grandchildren will be paying for.
¡ñ It spends an average of $222,972 for every job it creates, with the average salary for those jobs in Virginia being just over $35,000.
¡ñ The legislation contained 152 separate spending lines. Only 34 of those spending lines went directly towards saving jobs for Americans, like highway construction projects. 117 had no job saving estimate associated with them at all, like $1 billion for the 2010 census or $800 million in funding for Amtrak.
¡ñ To impact our current recession, any spending must happen fast. However, the nonpartisan Congressional Budget Office has said only $26 billion of the spending approved in the package is capable of being spent in fiscal year 2009, hardly providing the amount economists say is necessary to have a meaningful impact on our economy.
¡ñ The total cost of this package per family in Virginia¡¯s Fourth District is nearly $6,700.
I will continue to work for the opportunity to develop a bipartisan solution for the families we all love, but this is not the time to shoot aimlessly in the air and hope we hit our target. America is too great for that ¨C our destiny too important. We must succeed, for the price of our failure is far too great.
=================
God Bless,
Michael Lemm
FreedomFire Communications
"Helping YOUR Business....DO Business"
http://Small-Business-Resources-Cafe.blogspot.com
Private Reply to Michael Lemm | | Jan 31, 2009 5:07 am | | re: Commonsense Approach To The Economy | # | 
Ashish Belagali | | Cool. What an eye-opener!
In India, post Satyam scam, one option being considered was govt bailout to help the company in trouble. The newly formed board of Satyam refused to consider it as a solution and finally it did not happen. The story is yet not over, but various good possibilities are already open. On a hindsight, one can see that just pouring taxpayers' money would not have been of any use.
The money is instead better spent in creating better infrastructure and employments.
I am not an economist, but this common sense approach appealed to me.
/Ashish
Private Reply to Ashish Belagali | | Jan 31, 2009 3:54 pm | | re: Commonsense Approach To The Economy | # | 
Althea Conklin | | I'd have to say I agree with him... Private Reply to Althea Conklin | | Jan 31, 2009 11:03 pm | | re: Commonsense Approach To The Economy | # | 
Kurt Schweitzer | | By the way, shooting into the air can frequently scare off the wolves, at least for a while.
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Feb 01, 2009 12:31 am | | re: Commonsense Approach To The Economy | # | 
Lindy Asimus | | Somebody wants to be re-elected.
I wonder what other actions he wants to distance himself from... and which ones he wants to be associated with having supported.
Lindy
Private Reply to Lindy Asimus | | Feb 01, 2009 3:03 pm | | re: re: Commonsense Approach To The Economy | # |
abbeboulah | | 'scaring off the wolves'...? Not if it was the wolves who told you where to shoot. Even if they circled you in the 'sheep skin' of trains or (normal-looking?) cars instead of corporate jets. Private Reply to abbeboulah | | Feb 01, 2009 3:28 pm | | re: re: Commonsense Approach To The Economy | # |
Kurt Schweitzer | | "1. Have you received your check from any of the bailouts yet?"
My understanding is that many (most?) members of Congress have a moral objection to actually sending money to people they don't know personally, which is the vast majority of the U.S. citizens. I think they are afraid that they might wind up sending money to "the wrong people", however that might be defined.
Perhaps more importantly, there is a cost associated with sending out a check that is independent of the dollar amount printed on the check. Sending money to 300 large corporations and trusting them to "redistribute the wealth" is a million times cheaper than sending the same money to 300,000,000 citizens.
Besides, a $3 billion check is more newsworthy than 300 million $10 checks.
(I think this same reasoning is why the Small Business Administration defines a "small business" as one that employs 500 or fewer workers - so that they can "help small business" by helping the small percentage of businesses that are than large.)
"2. Are you able to borrow more easily today than you were six months ago before all of these bailouts began?"
Please note that sending out checks as described in #1 would do nothing to the credit markets. The only thing that will make credit easier to obtain is the confidence of the risk-averse people and corporations who actually lend money to others. They want to KNOW that they will get their money back, and make a profit. They are very gun-shy right now since their latest creation for guaranteeing profits from their investments has blown up in their faces.
"3. Are you less worried about your future now than you were before the bailouts began?"
I'm a small business owner - I doubt my perceptions of the future match those of "Joe Sixpack", and mine are less colored by the economy in general than by when I think the snow will finally melt.
"4. If the government asked you if you would feel better about your economic situation by keeping $6700 for your family, or sending it to the government and asking them to spend it however they would like, which one would make you feel better?"
This is a non-question. Of course EVERYBODY would like to keep every penny they earn and not have to send ANY of it to the government. But somewhere we have to develop a balance between the individual good and the collective good.
If each individual got that $6,700, what would happen? How would it be spent? How would that spending impact the economy? What jobs would be created? How long would those jobs last?
Worse, suppose everyone got a $6,700 tax break. That would be an extra $128 in your paycheck every week, or more likely a reduction of your taxes by $6,700 next year. How would that help things?
Have you started seeing Tax Refund Sales in your area yet? The major companies around here used to pay out bonuses to all workers every year, in March, that powered "Bonus Sales" every year. Great for the restaurants and boat and car sellers, pretty much invisible to everyone else. This is what I think the $6,700 tax break might do.
I'm glad this Congressman has some criteria for evaluating how he should vote on a bill. I just wish they were a little less parochial.
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Feb 01, 2009 9:12 pm | | re: re: re: Commonsense Approach To The Economy | # | 
Sharon Petty | | Hello my name is Sharon I must say that I am very upset and distrubed that any one who would vote against the stimulus package.
I am old enough to have been an adult in the recession of the 80's and NO it did go away instanty,it took 2-3 years. 2 years for those who were better off
financially and three years for those who were bearly making it before the recession.
I see this package as a way to have our cake and eat it too. We have GOT to stop global warming or your job will be the LEAST of your problems Yes I said your
problem not your grandkids.The latest study says if we stop global warming TODAY it will be the year 3000 before the earth will heal
Ithas become distrubily clear tha too many of you have given no thought to your grandkids.Well here is your change to have a WIN WIN solution
Now the WIN WIN isto slow/stop global warming and produce jobs at the same time.
Remember We need to look at the big picture. If we were to stop global warming TODAY It would be the year 3000 before the earth would regenerate back to health
Wake up people there is no magic pill to JET us out
of this recession in less than 2 years GET over it .
Try everything you can to cut out the fat in your budget.
ie:out to dinner , bottled water , starbucks,clothes buying,need I go on.
For those who have lost your job. What are your skills? Start consulting using your skills. Think outside the box.
We wwwwwilll get out of this and if we do it by creating green jobs we get a double benefit. Ck out your job web site and notice the sharp incline in green jobs already. Why because everyone knows we have no choice but togo in this direction if we don't GAME OVER
Sharon Petty
energy consultant
healthyliving.sp@gmail.comPrivate Reply to Sharon Petty | | Feb 02, 2009 3:36 am | | re: re: re: re: Commonsense Approach To The Economy | # |
Kurt Schweitzer | | If I were the Congressman, these are the criteria I'd use to evaluate the stimulus package:
1) Does this bill create any jobs?
2) Does this bill put more confidence into the credit markets?
3) Does this bill solidify the housing market?
4) Assuming the economy recovers, will be be able to restore the budget in less than 20 years?
First we need to focus on jobs. Putting people to work, and keeping them earning money, is the key to any healthy economy. Many people complain that the stimulus efforts so far have spent lots of money but haven't done anything to reduce our unemployment (which, by the way, is only around 6%).
While jobs are the most important aspect, having credit available is also important, especially for businesses. (This is something I've been learning since starting my scooter shop. Prior to that I was a cash-only person.) I don't know what will restore confidence in the credit markets, but without it people who have lots of money will choose to stick it in a vault somewhere instead of lending it to those of us who need it.
Lest we forget, this whole economic crisis started when housing prices started to fall. There are now lots of foreclosed properties on the market, and lots of people debating whether they'd be better off walking away from their houses, or trying to make the mortgage payments. Some portion of the legislation needs to address this, too.
Finally we need to consider the burdens we are placing on our children and later generations. History shows many civilizations that flourished until they consumed all their resources. Later generations were left in poverty, and those civilizations never recovered. We don't want this to happen to us.
So, while I'd love to see a stimulus check in my pocket, I'd much rather see a healthy economy around me. Should we also be trying to fight global warning, or pulling out of Iraq? Yes, but a collapsed economy trumps those issues.
(By the way, the simplest way to fight global warming is to let the global economy collapse! It lowers gasoline prices, too!)
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Feb 02, 2009 12:51 pm | | re: re: re: re: re: Commonsense Approach To The Economy | # | 
Kathy Buck | | Economic Stimulus Packages for Dummies
In order for a stimulus to work two things must be achieved
1 - generate quick economic recovery
2 - that recovery must lead to sustained economic growth
The idea behind any stimulus package is that increased spending will increase production, Walla - jobs.
Contrary to popular belief... the government spending programs implemented during the Hoover, Roosevelt, Ford, and George W. Bush administrations that intended to generate this kind of economic stimulus did NOT create sustained economic growth or reduce unemployment long-term. And now look at Japan during the 90's.....
So Joe Blow Construction gets a Gov't contract to fix the roads. Stimulus monies allow Joe Blow to hire workers...what happens when the road project complete? Loss of job. So it is not long term...
While I'm all for my wallet gaining some girth, I'd suspect I'd be like most middle class folks --monies will go to the heating bill and not that new flat screen TV I've had my eye on.
Stimulus packages IMO rob from us long term, It's like robbing from Peter to pay Paul. Or worse - like those people with multiple bank accounts that use to write bad checks for cash from one to another to keep from going negative...a very dizzy short term solution that comes back and costs loads in overdraft fees if one is not careful. Stimulus plans can cause inflation.
Will extra tax cuts for businesses work? Wicked circle - more tax breaks could see more employment - but if sales are down whats the point?
...and on a whacked note. I about spit out my chicken wing last night while watching the superbowl. WI economy and state debt in the crapper. Yet the WI lottery running regional ads during the most expensive run time known to mankind. Promotion of their own stimulus package, scratch off and win for extra cash...give me a break. On my agenda today? A letter to Gov Doyle.
Private Reply to Kathy Buck | | Feb 02, 2009 6:03 pm | | re: re: re: re: re: re: Commonsense Approach To The Economy | # | 
Reg Charie | | Give a man a fish and you will feed his hunger for the day.
Teach the man to fish and he will eat every day, (or until he over fishes and depletes his supply :(
With the huge amounts of layoffs occurring in just about every segment of industry, the US gov't should be setting up programs to teach people how to set up their own businesses.
Our Provincial Government has done this in the past.
Individuals are trained and each step of the process is monitored.
The two step process starts with the client being schooled in proper business functions, licensing, accounting, structure, marketing, and most importantly, the writing of a business plan.
When the plan is submitted for evaluation the client is either advanced into long term support while they structure and open their business, or told to go back and rewrite a better plan.
The plan can also be used to obtain other financing for equipment and start up.
The government only provides support in the neighborhood of about $1500 a month for about a year. Three months are taken for the first training section and then the rest of the year is for the actual business startup.
In all, approximately $18,000 is given as a grant and no deductions are made to this because of business generated revenue.
Reg - NEW DEMO!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Feb 02, 2009 10:47 pm | | re: re: re: re: re: re: re: Commonsense Approach To The Economy | # |
abbeboulah | | The discussion for and against the 'new' economic stimulus package is heating up in a somewhat disturbing pattern that does not bode well for the concerted, cooperative efforts that will be needed to overcome the crisis. The positions are exaggerated and simplified to the degree of caricature, yet not conducive to merriment but rather increasing divisiveness: shrill accusations by supporters, that opponents ignore the plight of those affected, thereby making things worse by delaying action, countered by the other side with wild statements about the measures to be preparations for the wholesale deliverance of the country to socialism, being full of pork, doing nothing to solve the problem in the long run, etc.
Trying to sort out some of the issues, I have a few questions.
Is anybody fundamentally against the notion that there is a problem and that something needs to be done about it?
Is anybody opposed to the notion that there is a need for quick action? But that whatever action is taken, the remedy will have to be sustainable in the long term?
I don't perceive that there is much disagreement there. So the contentious issues are about specifics. Some of these, about which I think there are legitimate questions, are :
1. Are the funds of the package going to the 'right' people and groups?
('Right' as in ensuring the desired effect, as well as: group 'deserving' or 'undeserving' -- e.g. because they may be the ones 'responsible' for the problem)
2. Will the funds be used for the appropriate activities, projects, programs?
(Other versions of this question will ask: Is there too much 'pork' in the package? And who will benefit versus who will suffer?)
3. Can and will the proper use of funds be effectively monitored?
4. Will the proposed measures 'gain traction' fast enough to prevent serious
damage until they do?
5. What are the expectations about how those funds
(which must be borrowed) can and will be repaid?
By whom? Over what period of time? At what cost?
Are those expectations reliable? realistic?
6. Will the package, and the programs to be funded with it, result in effective long term recovery? Or just in short term 'band-aid' fixes that
7. Are there viable alternatives to the proposed measures? What are they?
And are they being discussed? Considered? scrutinized?
It is interesting to note that so much of the 'discussion' is being conducted in rather simplifying and therefore divisive terms, and drawing from historical events that may be considered not entirely applicable to the current situation. The argument about the expected effectiveness, for example, uses almost exclusively material form the 1930's depression, with one side claiming that the 'New Deal' programs kept the country afloat, saved the lives of millions, and produced infrastructure that remained useful for many years, while the other contends that the taxation necessitated by the government spending unnecessarily prolonged the crisis. This is usually combined with the simplistic 'small government', individual freedom and personal responsibility versus 'big (bad) government and its 'tax-and spend' proclivities, welfare mothers and dependence (i.e. loss of freedom) on government handouts slogans. It can be argued, with ample recent evidence, that the reality of the current situation in many ways represents an effective inversion of many of these notions. So there is a legitimate need for in-depth scrutiny of these questions.
There are some serious questions that have not been raised, to my knowledge, much less received any in-depth discussion (I don't count the screams about 'turning the country over to socialism' which has been 'proven to fail everywhere esp. in the demise of the USSR, nor on the other side, the gleeful or anxious cries about the imminent 'demise of capitalism' as evidenced by its failure to solve the world's problems since the collapse of socialism, and its recent crisis, as serious discussion). These are questions about the underlying structural reasons and mechanisms for the failures of both, that should be examined, remedied, or replaced with something better.
8. One of these issues is the effect of power in large systems. It applies to both forms of socio-political governance as well as large 'private enterprise' entities. It is ironic that defenders of US capitalism boast of the US being able to send folks to the moon but don't seem to credit Americans with being able to develop a viable government. Some respectable efforts have been made to control and limit the unconstrained abuse of power in 'democratic' forms of government (term limits, checks and balances between several branches of government), which arguably are in need of improvement. The possibility that temptations to abuse of power also can occur in private enterprise, especially when these grow to near monopoly and global dimensions, has not been effectively discussed, except with sanctimonious deference to the power of shareholders and the 'invisible hand' of the markets as the only needed controls, on one side, and denigrations of 'big corporations' pointing to the evidence of the white collar Enron-style crime on the other. Which are dismissed by the defenders of capitalism as just the misdeeds of a few 'bad apples' which are justly being prosecuted -- "see, they are serving jail time..." And therefore do not need consideration of structural change.
(I have discussed the relationship between freedom and power elsewhere, the temptation to realize freedom made possible by power (empowerment) consisting precisely in the ability to break or bend the rules: am I truly 'free' if I have to abide by the rules?)
9. Another fundamental question that also is not part of the current discussion is the role of growth in the economy. It is almost as impossible to even raise the question as it is to question motherhood and apple pie: the unquestioned mantra of governmental economics from the smallest municipalities to international trade and finance. It is manifested in the phenomenon of compound interest, and the associated expectation of profit and return on investment at all levels of economic activity. The concept, in its basic form as taught in the schools, is hard to argue with -- the various warnings and prohibitions in religions throughout history notwithstanding. Did they know something we have forgotten? Might there be some good reasons for rethinking the way we deal with this?
One reason might be the indiscriminate application of growth-oriented policy (and growth-based criteria for economic decisions) to areas that are meaningfully capable of growth, and to resources that cannot grow, alike. The fact that some resources are limited by nature -- land, shorelines, fresh water, even the fish in the ocean -- but are treated just like phenomena that can more easily accommodate indefinite growth (might even those have some limits?) will result in imbalances in the economic system, to say the very least.
Another reason, I submit, might be the fact that the way growth and compound interest operate in the economic system will inevitably result in systemic shift in income and wealth distribution over time -- regardless or even in conflict with the actual merit, productivity, innovation and hard work. It is no secret that small investment -- the savings accounts of the low-income worker -- will earn interest at very low rates in the banking systems of most countries today. Even if one were to invest $1000,- and $100,000 at the same interest rate, the ratio of the resulting fortunes after ten or twenty years will be quite disproprotionate. But in reality, the higher the deposits, the higher the earnings rate. So without any controls and assuming equal 'merit' of depositors, the one starting with the higher deposit will gain an ever-increasing advantage over the small investor.
To then suggest that e.g. taxes diminishing this handicap amount to 'socialistic redistribution of wealth and the undisciplined, lazy masses just sponging off the rich' is sounding a bit disingenuous. To attack institutions of 'insurance' such as Social Security or National health insurance ideas as concepts violating the American values of rugged individualism and individual responsibility is no less than adding insult to injury: the idea of insurance is based on the very responsible insight that accidents, illness, other calamities can strike anybody without regard to merit, and that we might reduce the painfulness for anyone hit by such might be lessened by our setting aside small funds that collectively can help out those who have suffered an event. Is this denial of individual responsibility, or the very embodiment of responsible stewardship of our families' future well-being? By comparison, the notion that there should now be private enterprise agencies who should compete with one another in making profits from this -- in effect, making profits from our misfortunes and our efforts to remedy them, this is supposed to be an American virtue and value? And the callousness of my home insurance to whom I have paid insurance premiums for decades, with which they have built gleaming office buildings and paid great CEO benefits and bonuses and parachutes, to suddenly cancel my insurance because they are no longer insuring properties in Florida - that is not just tolerated but praised as responsible business policy -- so I should buy their stock for my retirement?
10. There is, finally an aspect to the interest / profit / growth conundrum that arguably has contributed more to the current crisis e.g. in the housing market than the alleged irresponsibility of homeowners buying more home than they can afford, of the few dishonest and even criminal 'bad apples' in the mortgage industry. It is the 'pyramid' effect of the financing system. Consider the building and financing of a house. Even before it is built, every contractor and subcontractor is taking out loans with their banks, to be able to buy the materials and equipment for their businesses, hire workers, etc. The general contractor, developer or owner takes out a construction loan to pay the contractors as the work is being completed. This means that even before the house is built, the bank will earn its interest -- at a slightly higher than usual interest rate since the collateral is 'just a hole in the ground'. In fact it has already, in, say, a year of construction period, earned, say 10 or 12% of the cost of the house. Then it finances the mortgage proper, with points and fees etc. And starts collecting interest on the owner's loan. Another 5 or 6% a year. Of course, this may be too much trouble, so it 'sells' the mortgage to another company, a mortgage finance entity. The bank wouldn't do this unless it could make some profit on that, would it? so that gets added to the 'value' of the thing it sells to the next higher entity. Which wouldn't buy it unless they too could make a profit on it: one, by not having to go through the work involved with the initiation of the mortgage that your local bank had to do, but mostly because the mortgage is either so long-term that is expects to get safe income for a long time -- income whose 'present value' is higher than what it paid for it -- or because the mortgage is on whose interest rate can be jacked up in a year or two. If the sale and the expected profit have added another percentage for the bank and some more for the mortgage company, this will be charged as interest to the homeowner. But the owner's income has not changed at the same rate in the meantime; he can't pay the new mortgage payment. Fine, we'll force him to sell the house. Only now so many people have gotten into the same fix that there aren't enough folks around to buy the house at the price that now should cover all the profits added to it through the trades, plus of course the realtor's 6% fee for finding a new buyer and organizing the sale. This means that someone is going to take a hit here: prices are forced down, the profit expectations are not met: bailout time. Who is getting blamed? The irresponsible homeowner, the bankers who sold those mortgages to people who couldn't pay (how could they have foreseen that they would be laid off by their own bank in order to cover its losses?).
The blame game here is missing the point that the expectation of profit at every level was such an intrinsic part of the system that everybody involved had to buy into it. It wasn't just the few bad apples: at every level, the economic agent had to comply with the requirement that a quarterly profit had to be demonstrated. Otherwise, the company would lose its standing on Wall street, lose its ability to borrow money cheap enough to finance more such deals. The pressure to divest themselves of questionable instruments, leading to the invention of 'derivatives' in which nobody could even begin to assess the true value of the basic commodity it represented, became ever greater. One did not have to be a dishonest banker to succumb to it -- it was everyday practice, everybody had to play the game -- anymore than every defaulting homeowner is an irresponsible bum.
I do not see in the proposed stimulus package nor in the discussion surrounding it much of an attempt to identify much less develop remedies for these intrinsic flaws in the system. I would love to be proven wrong on this; I am afraid that without such fundamental rethinking and corrections, we are just going to see more trouble of the same kind ahead. Private Reply to abbeboulah | | Feb 03, 2009 12:02 am | | re: Commonsense Approach To The Economy | # | 
James Booth | | .
Already we are reading suicide notes from individuals taking out their entire family for inability to find work.
"Americans have been far ahead of their politicians. They realize that a bold plan
is not measured by its costs, but rather by the strength and wisdom of its ideas.
They also know it is not measured by what the editorial writers or TV pundits say.
And they know it is not measured by its complexity. Instead it is measured by a
single criterion ¨C does it work?"
I like that.
Of the four questions asked, I wonder ...
1. Have you received your check from any of the bailouts yet? I can assure you many of the CEOs on Wall Street have.
> Are we expecting someone to send us a "magic" check that will bail us out ?
2. Are you able to borrow more easily today than you were six months ago before all of these bailouts began?
> Why would I have a focus on ability to borrow and continue to support those who rip off my community ?
3. Are you less worried about your future now than you were before the bailouts began?
> What good is worrying about future in any case - especially when forming "a bold plan ... not measured by its costs"
4. If the government asked you if you would feel better about your economic situation by keeping $6700 for your family, or sending it to the government and asking them to spend it however they would like, which one would make you feel better?
> duh
If I wanted to ask four questions, maybe I would ask:
1. What can I do to help keep more of the wealth generated within my community IN my community working where we need it ?
2. What can I and my community do to reduce the real costs of delivering needed services ?
3. What can I do to help the youngest generation to be educated to survive regardless of "economic downturns" ?
4. What can I do to help my family and community meet their own basic needs at least cost ?
On a national level right now what needs done is going to cost an as-yet unborn generation dearly, and yet doing that "what needs done" is only a step toward finding any real solutions for the future of our world - it is only a "temporary fix" to help us bridge the gap while we put something in the way of real long term solutions in place, and one of the *goals* of any "real long term solution" ought to be reducing the effect on ALL future generations of the harm our "bridge" solution will do along with the harm already done to them by our arrogant and greedy practices we, as a nation, have allowed or engaged in through the past several decades.
So far, in my view, the real challenges we face are not even being mentioned, much less addressed or considered as part of any "plan"
JBPrivate Reply to James Booth | | Feb 03, 2009 1:26 am | | re: re: Commonsense Approach To The Economy | # |
James Booth | | .
"Somebody wants to be re-elected.
I wonder what other actions he wants to distance himself from
... and which ones he wants to be associated with having supported."
I would laugh at that, Lindy
... if it were not so true : )
JBPrivate Reply to James Booth | | Feb 03, 2009 4:44 am | | re: re: re: Commonsense Approach To The Economy | # |
abbeboulah | | Approach or Retreat?
Interim summary, after re-reading the posts so far:
The original Forbes article -- (was its headline 'common sense approach..." or was that Michael Lemm's heading?) offered a number of serious questions about the stimulus package and what it tries or should try to achieve. Questions. No answers. Others, including myself, added more questions. This all sounds more like a commonsense 'retreat' from the stimulus package than a constructive 'approach' to improving the economy, does it not?
There were few if any suggestions for what else might be done -- from Reg, citing some things Canada has tried. These were rather small scale solutions; perhaps they should be discussed in more detail, if we really don't have anything better to suggest. Or dig up from elsewhere. Which is a somewhat sobering status report -- and even more disappointing if it were to be the end of the discussion here. Approach? One conclusion to that would be: if there isn't anything better we can think of, maybe we should stop griping, get with the program and try to make the best of it?Private Reply to abbeboulah | | Feb 03, 2009 4:35 pm | | re: re: re: re: Commonsense Approach To The Economy | # |
Kurt Schweitzer | | TM,
The approach I take to an issue like The Economic Crisis starts by setting priorities:
1) Get people back to work.
2) Loosen up the credit markets.
3) Clean up the mortgage mess.
4) Recover the costs within 20 years.
When the issue is one largely within my control I then start brainstorming actions to address the issue.
Once I have a large number of possible actions identified, I try to evaluate each one to see how it helps or hinders achieving the priorities. The actions that best achieve ALL the priorities are the ones I attempt to execute.
In the case of The Economic Crisis I have neither the training nor the experience to propose meaningful actions. I'm hesitant to propose simplistic "solutions" because I realize that I don't know enough to properly evaluate the unintended consequences.
For example, I've heard people complain about the $18 billion in bonuses given to Wall Street "executives" (actually many of them are simply employees). If those bonuses were somehow forfeited one unintended consequence would be that the State of New York's budget deficit would increase by something like $8 billion, due to the loss of tax revenue.
I generally don't comment one way or the other about things like The Economic Crisis. The last "economic crisis" I lived through (early 80s) I noticed mostly because inflation was so high that I was receiving 25% annual pay increases. To me that was a great time!
I'm focusing on the portion of the economy I CAN affect - my own business. Bad weather (snow) affects me much more than a downturn in the global economy. I would be trying to cut costs regardless of what's happening elsewhere. My short business history makes getting credit tough regardless of the overall credit market. I live in NY were taxes are ALWAYS a problem. And so on.
I will comment on people's decision making processes. I won't comment on whether a stimulus package is good or bad.
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Feb 03, 2009 5:26 pm | | re: re: re: re: re: Commonsense Approach To The Economy | # |
James Booth | | .
The original message, or post, here is on the Internet as:
"Here is an email that I just received from my Congressman:"
- http://mortgagegrapevine.com/thread/?thread=554200
Others may have received it in their e-mail
Lindy I think came closest to what the message was really about.
"There were few if any suggestions for what else might be done
-- from Reg, citing some things Canada has tried."
The grants Reg mentioned are a good plan, I think
- keeping in mind they are also a "short term fix"
- essentially start up capital, and those new businesses have to "fly" on their own
... for that program to be truly successful.
Again, those grants come at "taxpayer" expense, a form of socialism
- something well-known in the U. S. even as some deny it (Social Security for example)
Kurt probably comes closest to "solutions" anyone can effect:
"I'm focusing on the portion of the economy I CAN affect - my own business."
(my apologies if I missed someone else's idea)
Bottom line is that every community has wealth: the wealth of its PEOPLE
- their knowledge and experience, collective skills, and will, determination and ingenuity.
An *economic crisis* is primarily a lack, or loss, of needed *income*
- in the form of "jobs" (there is still plenty of work to be done) and *income*
(there is still plenty of need someone is willing to pay to have satisfied)
When money is in short supply, one of the first things done is *budgeting*
Part of any good budget is reducing *outgo* - money going out
... and any community which continues to pay in the range of 20% for *credit* to Wall Street
- money which never comes back to that community, that community will not survive.
Large chain retailers closing up opens opportunities locally.
We can form local alliances to do the same things we are now being "bled" to do
- like growing our own food
... and we can do them locally, and at less overall cost.
JB
Private Reply to James Booth | | Feb 03, 2009 6:43 pm | | re: re: re: re: Commonsense Approach To The Economy | # |
Reg Charie | | Well, one of the things you said Thor, was "the gleeful or anxious cries about the imminent 'demise of capitalism' as evidenced by its failure to solve the world's problems since the collapse of socialism".
I think you guys, and us too here in the Great White North, need to really sit down and look at what is happening..
It is not a simple solution as the problem is spread to all corners of your economy, in your government, and the private sector.
It runs from immigration to race to organizations and indeed into the top levels of the people that run your country.
I think you need to introduce a bit more socialism and cut back on the capitalism.
I see it is three distinct problems.
Lack of ethics.
Greed.
Being locked into an inflexible system.
Of the people, for the people is now "Of the business, for the business" Screw the people.
If a company needs a major bailout, the current management should ALL be turfed.. Never mind cutting inordinate amounts of cannon fodder employees but get rid of the top, high priced deadwood.
How many billions have been spent on war?
How much has this cost every taxpayer?
I'll give you one statistic that I gleaned from the movie "Smoke" narrated by Woody Harrelson.
Between 1986 and 1998 the US spent over $214 Billion and this does not include the costs of incarceration for the multitude of convicted "criminals".
However, being on a war footing and the tooling does create jobs and stimulate the economy. So much so that pretty much since WWII it has been a priority (for your government) to create conflicts.
Some of it was to keep you all safe, but a lot I would have to say was for the almighty dollar.
To address your economy I think you will have to reconstruct yourselves. This would have to start with an honest evaluation of the problems, and given the scope of this... welll.....
I see that IMO, you will have to restructure taxes, health care, finance, unemployment, social services, and the way your government passes laws.
I find it abhorrent that non related laws and regulations can be tacked onto major bills.
I think there should be a maximum set for income.
Everything after $x,xxx,xxx to be taxed at 100%.
All this income should be targeted only for the public good, such as health plans and unemployment/self employment.
Reg - NEW DEMO!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Feb 03, 2009 6:44 pm | | re: Commonsense Approach To The Economy | # |
Althea Conklin | | IMO, you cannot fix any of this mess truly until you fix the underlying problems which are you have representatives who aren't representing, executives who have taken that name to mean they should be executing their own business while putting their heels up on their proverbial (and sometimes, literal) desks while eating their cheese and wine...the old adage "you can't make money if you don't spend it" has been taken to the extreme.
To say that some have oversimplified is an overcomplication. Cut out all the crap that isn't worth the money being spent on it, the pet projects, spend money on the needs. I'm not just talking about short term. Yes, we need to go green; it is an enormous undertaking with a huge payoff...and a temporary boost to our unemployment dilemna and a way to retrain the workforce in sectors that could be internationally competitve...something we sorely lack nowadays. We need to fix our infrastructure...of course no one is talking about alternatives and advances made in transportation and technology since Hoover.
Think forward, think responsibly, plan and be prudent. What is so complicated about that?
If you throw money at the problem, you continue the dilemnas that brought us to this point and devalue our monetary value. If you re-evaluate, reduce, cut and restructure...not to mention the NEED for accountability...you will ultimately increase the value of our currency by strengthing the influence of our society.
The blame game has got to stop, and we have to start being personally responsible for our action/inaction which has contributed to this mess. That means going beyond our personal responsibilities, our business impact and on to our responsibilities as citizens to uphold our representatives to the highest standards looking at what they do and not what they say and removing them if they do not live up to their responsibilities.
We need to hold one another accountable to our actions. That is what we really lack...accountability.Private Reply to Althea Conklin | | Feb 03, 2009 8:41 pm | | re: re: re: re: re: Commonsense Approach To The Economy | # |
abbeboulah | | There is an understandable temptation to look for big, even radical solutions. Such a big move is what we see is the big bailout approach -- all the questions notwithstanding. This is dangerous because it further destabilizes everything -- and leads to everybody running to the through whether they 'need' it or not. The wholesale call for firing the whole management team of companies that are asking for bailout is another -- very understandable -- big sledgehammer solution, cause by the big bailout itself as much as any mistakes the company may have been guilty of. Seriously: if there is 'free money' to be had somewhere, wouldn't any management that did NOT try to ask for soem of it probably be considered rather negligent by its stockholders and employees -- especially the ones that are going to lose their jobs? Which bring me to another counterproductive sledgehammer solution: the big layoffs. Yes, I know that 'cutting costs' is the responsible and necessary thing to do, and some consider low-paid workforce lazy bums in the first place that deserve to be fired. But then calling for tax cuts -- those taxes that are needed to pay those folks' unemployment support -- at the same time, that's just not looking around the next corner. I repeat my suggestion that I made earlier somewhere: Instead of all the haggling about budget cuts, that will hurt some while leaving others untouched, whether in governments or business, why not simply declare that as a starting point, all budget items will be allocated a percentage of the actual tax revenue (for government) or profit (for business) that WILL actually be realized during the next budget period, and leave it to all departments to make their own predictions and allocations, while encouraging them to not just lay people off, but just reduce everybody's salaries or sub-budget allocations, look for other ways to reduce costs, and spend any achieved savings as 'bonuses' to those who actually helped achieve them. The salary reduction will no doubt prompt some to leave on their own account -- but only after having found another job. This reduces the disruptive effect of those 'big bold' ax-wielding heroics (that always seem to spare the ax-wielder) and allows for a much more flexible adaptation of all the system parts.
In other words, maybe smaller, more flexible measures would be more useful for many aspects of our problems.
By the same token, the radical conversion of the whole system -- especially with measures that haven't been tried before -- might do more damage than good. Here to, the introduction of 'new rules' often would be better if applied to small subsystems on the periphery of existing big structures, allowing for experimentation and fine-tuning until everybody is comfortable that they will work better for the overall system as well.
The 'more socialism, less capitalism' recommendations -- as well as the opposite claims -- "it wasn't capitalism that failed, but the (socialist) regulations that forced e.g. banks to write those toxic loans that weren't covered by the borrowr's ability to pay" both are not addressing what I consider an essential underlying problems -- the inbuilt assumptions about growth and profit, and the temptations of power that exist in both kinds of systems. Private Reply to abbeboulah | | Feb 04, 2009 5:41 pm | | re: re: re: re: re: re: Commonsense Approach To The Economy | # |
Reg Charie | | WASHINGTON — President Obama on Wednesday imposed a $500,000 cap on executive pay for companies that get federal bailout money.
http://www.usatoday.com/news/washington/2009-02-04-obama-executives-cap_N.htm?csp=34
Reg - NEW DEMO!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Feb 06, 2009 3:47 pm | | re: re: Commonsense Approach To The Economy | # |
abbeboulah | | Althea Conklin:
"...what we really lack...accountability"
I agree -- who wouldn't? But here's a problem: what are the accountants (Who are they? Us?) looking for? What if it's the wrong criterion? Arguably, those folks we are griping about now HAVE been accountable: to the stockholders looking for quarterly profits, to the unquestioned (- STILL unquestioned!) mantra of continuing growth as the main goal of a viable economy, and to the popular notion that success (in reaching and staying at the top) must be rewarded with equally evergrowing salaries and bonuses, that such pursuit of executive happiness should never be interfered with by government. Those were the accountability criteria they were looking at. Supported by popular opinion and attention, fueled by the media: Who wants to be a millionaire? (Not"who wants to be the most ingenious unrecognized inventor?" -- but of course, being unrecognized can't be recognized, can it?)
My point is: don't just blame those guys for their greediness; they were just being more American than the rest of US. We need to look at the accountablity criteria. Private Reply to abbeboulah | | Feb 07, 2009 7:51 pm | | re: Commonsense Approach To The Economy | # | 
Patricia Allen | | The White House has a website which I assume most of you read regularly. But just in case, http://www.whitehouse.GOV
Love and Light,
Pat
Creator of fine wood pens.
http://www.PatsPensAndTreasures.com
http://PatriciaAJAllen.com/myblogPrivate Reply to Patricia Allen | | Feb 08, 2009 4:01 am | | re: re: Commonsense Approach To The Economy | # |
abbeboulah | | That site has been hacked, looks like. Should somebody tell the President? Private Reply to abbeboulah | | Feb 08, 2009 5:06 am | | re: re: re: Commonsense Approach To The Economy | # |
Kurt Schweitzer | | Looks all right to me - or at least the way it looked on inauguration day after Obama was sworn in. Which is a MUCH nicer design than the Bush version, in my opinion.
Kurt Schweitzer
Urban Village ScootersPrivate Reply to Kurt Schweitzer | | Feb 08, 2009 3:50 pm | | re: re: re: re: Commonsense Approach To The Economy | # |
abbeboulah | | I tried to click on the link again, and got to the site, and yes, the first page looks OK. But when I clicked on any of the links in it -- e.g. the details of the agenda, the videos etc, all I got was a blank off-white page with a ghostly white presidential seal on it. There is no button to scroll down to see if there's something further down the page. So either they haven't gotten around to posting anything on the site yet, or something else is going haywire. Private Reply to abbeboulah | | Feb 08, 2009 7:14 pm | | re: re: re: re: re: Commonsense Approach To The Economy | # |
Reg Charie | | Everything on the site looks ok to me Thor.
Links all seem to work.
Reg - NEW DEMO!! Turn photos into paintings http://FantasticMachines.com
All You Need is Dotcom-Productions and a Dream. http://dotcom-productions.com
0Grief http://0grief.com/special_hosting_accounts_for_my_ryze_friends.htm
CRELoaded websites http://RegCharie.com - SBTT http://thinktank-network.ryze.comPrivate Reply to Reg Charie | | Mar 07, 2009 2:31 am | | re: re: re: re: re: re: Commonsense Approach To The Economy | # |
Michael Lemm | | Last year, Americans lost $14 trillion in net worth. That number is painful no matter who you are – it touches everyone from families, to college students, to small business owners, to family farms, to retirees. After such significant loss in our economy and the impact that is having on our lives, there is no question that we must act to restore faith in the credit markets, instill confidence among consumers, and reignite the economic engine of our nation.
However, the most dangerous principle we can assume as a nation is to say that because something needs to be done, that anything should be done even if it is wrong. When Washington has a knee-jerk reaction to major crises, each “fix” that is a misstep causes the situation to be worse than it was before, or permanently eliminates opportunities to take a second or third effort to restore our economy.
As we look back over the past few months, many of us recognize that our actions have made matters worse rather than making them better. In short, we’ve taken a bad situation and made it an extremely bad situation. Consider the following examples.
For the past several months President Bush, Chairman Bernanke, Secretary Paulson, and, until recently, President Obama continually told the American people that we would face “catastrophic meltdown”, “virtual shutdown”, or “irreversible recession” if hundreds of billions of dollars were not spent by the federal government in a matter of days and weeks. In doing so, they created a self-fulfilling prophesy. In response to this sky-is-falling approach, consumers across the country locked-down on their spending, severely hurting businesses and retail companies. We saw straight months of record decline in consumer spending, triggering businesses to cut down on employee work hours, reduce payrolls and many individuals lost jobs. When consumer spending makes up 70% of our gross domestic product, claiming that the end of the world was around the corner was not something we could afford to do. Consumer confidence was shattered.
Additionally, we passed billions of dollars in bailout after bailout, without basic principles of accountability, transparency, and effectiveness. I am one of only 17 Members of Congress who has consistently voted against all of the bailout and stimulus packages – under both Presidents Bush and Obama – for the simple reason that I wasn’t convinced they would work. We gave money to banks, which never got to consumers for loans to buy cars, homes, and any other goods and services that keep our economy going. The most recent economic stimulus package was a $790 billion package that primarily redistributed what is left of our economy rather than seeking to rebuild our economy. On top of that, the new federal budget released last week by the White House projects a deficit of $1.75 trillion for just 2009, a shortfall for one year we have not seen since the years of World War II.
As a result of these actions, the American people have lost confidence in their government and we’ve saddled our future generations with enormous debt that will put great pressure on us in terms of global competitiveness years down the road. However, we cannot allow the situations of the past year to prevent us from continuing to seek the best course of action for our economic situation.
First, we must apply the same confident and resilient attitude that has made our nation great towards our current economic situation. During his presidential address last week, President Obama finally began to provide a message of optimism towards our economy. His message that “we will recover” was drastically different from the end-of-the-world catastrophe message we have been hearing each time a President has sought congressional support for his particular bailout plan. It provided a hopeful expectation that while our economic situation is a very difficult and significant challenge to overcome, we as Americans can prevail.
Second, at the very least we must make sure that our rhetoric is matching up with our actions. Right now, the American people do not see this happening with their elected officials in federal government. We hear calls for balancing the budget, yet we still see more “stimulus” spending that will postpone any serious effort to balance the budget for a decade. The President has talked about cutting the deficit in half, but we just increased our deficit to one of the highest amounts it has been in the history of our nation. The federal government continues to ask families and businesses to sacrifice their tax dollars for legislation that no one is sure will work, while each new spending proposal expands federal budgets more and more. But where is government sacrificing? Fixing the economy will require shared sacrifice, and it is time the government started fulfilling its share by eliminating wasteful spending and inefficient programs that are not working or have no place in the federal government.
Finally, we must take an objective look at the economic situations in front of us. If ever there was a time that we needed an objective point of view, it is now. Unfortunately, the 24/7 sound-bite driven media – in an effort to drive up ratings – is providing deliberate spin instead of the doing the fact-checking the American people need and deserve. This means it is up to ordinary citizens to ask the tough questions about whether or not we are making the right decisions as we are mortgaging the future of our children and our grandchildren - whether it is in their barber shops, in their Sunday school classes, at Little League games, at work or in their grocery stores. Americans need to be asking for and demanding the facts and figures that lie behind the proposals, agendas, and budgets coming out of Washington.
We must rise as a nation with unity of purpose to protect our jobs, protect our homes, and provide health care for our families. Right now, there are two views of America’s future. Some place their hope for the future in Washington; others place theirs in the work and ideas of the American people who realize that we cannot borrow and spend our way to the American Dream, we must earn it. And it is up to you and me to determine which direction we will go.
[above from Rep. Randy Forbes]
God Bless,
Michael Lemm
FreedomFire Communications
"Helping YOUR Business....DO Business"
http://Small-Business-Resources-Cafe.blogspot.comPrivate Reply to Michael Lemm | | Mar 10, 2009 11:49 pm | | re: re: re: re: re: re: re: Commonsense Approach To The Economy | # |
William J | | We are on a wide rollercoaster ride Michael and its not going to end soon. Analizing what the Religous talking heads are discussing and comparing it to conservative talk show hosts. I see some simular points made and the current events in the middle east are sending alarm bells across the land that we are headed for rough waters.
The politics of fear is still being played on a daily basis. Thats only causing people to pull money out of the bank with many cashing out their investments. Its sad to say our media is mostly one sided catering to hatefilled ideals with no solutions in sight.
Are we headed for tyranny or utopia?
Now I hear talk of tea parties and protests, States seceding from the union with many people discussing food storage and survival. April 3, 2007. Vermont was making plans to seperate from the U.S. The only thing that might save us is people returning to positive resolve of unity.
William J
Healthy approach to todays fraud reporting
http://www.dumbexperts.com/Private Reply to William J | | |
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