Hey, look at me on Friday night! I'm not at the gym, or recovering from another crazy week...
I've wanted to do this for a while. I'll call it "Take Aways from the Week-end News Shows":
Washington Week in Review:
Gwen Ifill, I love you.
Okay now that I got that out of the way, take aways:
1. House Healthcare Bill passes: Nancy Pelosi - beaming smile in red dress -- President Obama - standing solidly beside her in a white shirt and blue tie. BEAUTIFUL!
2. Pete Williams of NBC News: Khalid Sheikh Mohammed, mastermind of the 911 attacks
3. Peter Baker of the NY Times:
4. Tom Gjelten of NPR:
5. Naftali Bendavid of the Wall Street Journal
First, let me apologize for not writing sooner, as we all should. Yes my life has been very busy. The economy is picking up, and as a CPA consultant so has my work. The change has been very noticeable and profoundly encouraging. I know we're not out of the woods yet, but we seem to be heading in the right direction on the clear path we built out of this awful haze.
Secondly, I am very disappointed in Obama's apparent decision to concede the public option section of the health care plan. But I believe we've got to pick up the pieces quickly and realize that, since January 20th and before, this is the first time this administration has done anything I disagree with of significance. I'm sure President Obama is exhausted, and he's done amazing and superlative things to this point. I'm not ready to throw him under the bus because of this, and nor should anyone else in our camp, regardless of how strongly they feel about this event. He is our guy and our family. We should not simply forget how far we've come in just a few months, nor should we forget how much pressure and challenge Obama has had to endure to this point. The man is a study in seemingly superhuman endurance. We shouldn’t simply give up on him because he is a human being.
Another thing to consider is that to simply rail against the Obama administration now is to cause our own undoing. We need to take stock of what we have accomplished in this moment of frustration, because we will lose a lot of ground to break apart like a herd of cats. To do so emboldens the distortion makers and obstructionists. People like Sarah Palin and Rush Limbaugh. And like Dick Army.
Let's take a deep breath and catch our composure. Let's remember that we must stick together and stay together, even in tough times.
To President Obama, the only thing I would like to say, other than to express my continued support and respect, is that I believe it is better to go down fighting and lose the health care fight with dignity than to give in to the lying minority, even if they have touched a nerve in the general population. This time of emotionally charged criticism will pass, and when we are on the other side of these troubled economic times, people will see that we as Democrats are of integrity and strength. People respect that, even our detractors. That is what will carry us through 2010 and beyond as a governing majority. Please stay strong and resolute in your convictions and plans. I realize there is also the risk of becoming Bush/Chaney-like and completely disregarding new facts that come to light that indicate our direction is flat out wrong, but I strongly believe the decision to push to public option clause of the heath care plan overboard was premature.
Let's regroup and go forward as the team of which I have been so proud to be part. I know we can regain our momentum and strength of unity back again.
Well, I haven't written for a while. But that doesn't mean I haven't been paying attention. And I just have to say...
I'm proud. I'm Proud. I'm a white male. And I'm proud.
I was a Hillary Clinton supporter in the 2008 primaries, and.. I'm proud.
I've got tears in my eyes. I can't believe it.
I'm just.... so PROUD! don't.let.this.go.to.your.head...
but I'M SO Proud! Let's just keep on this same track. Let's not loose our heads. And please!!! let's be careful and not too confident.
It's good. Let's keep going. I'm there 100%.
According to a Jan. 6 study by Mark Zandi, chief economist at Moody's Economy.com, GDP grows by $1.59 for every dollar spent on infrastructure, while the increase from a corporate tax cut is only $0.30.
In other words, spending delivers more bang for the buck because each dollar paid to a worker building a wind turbine, for example, is then re-spent on groceries or clothing, causing a fiscal ripple-effect. Conversely, a worker might save a third of the money he is given in a tax cut, with some of the spending going toward imports, which would also reduce the stimulus to GDP.
September 15, 2008: the date John McCain, while on the campaign trail in Jacksonville, Florida, declared “the fundamentals of our economy are strong”, providing the American public with direct evidence that he is disturbingly out of touch with the tenets of basic economics. Yet all forty Republican senators unflinchingly fell in line to support his anemic, ill-conceived alternative plan based on the failed strategies of the past. Apparently his 26 years in Washington left him without the perspective to understand that the policies he supports created the economic crisis of epic proportions we are experiencing. He still appears to be in the mindset of Phil Gramm, McCain’s former economic advisor who six months ago dismissed the economic distress signals that portended our current economic deflationary spiral as the baseless cries of “a nation of whiners”.
At $421 Billion, McCain’s plan was roughly half that of the Democrats' in scale. Rehashing the Republican mantra of tax cuts and military spending, the McCain plan was comprised mainly of cutting the bottom two income tax brackets and on lowering corporate income taxes. Its feeble spending provisions would have provided money to repair and replace military equipment worn out in Iraq and Afghanistan, and extended unemployment benefits. Thankfully, and due to the Democratic majority in the Senate, the alternative bill was defeated, 57 to 40, strictly upon party lines.
What can the Republicans be thinking? Doesn’t the fact that we have entered into this nightmarish catch-22 of a devastated economy as the result of eight years of laize faire, tax cutting, and military spending government policies? Doesn’t anybody remember the fiasco of McCain’s pick of Phil Gramm for economic advice, his self-admission of economic ineptitude, and his claims that the economy was sound even as we were tumbling into an economic crisis of breathtaking scale? Don’t any of these Senators and Congresspeople want to look beyond their wounded feelings of loss from the November election, or their perception of powerlessness, or whatever is driving their… robotic behavior, and actually open their minds to help the nation and the world?
From my perspective, we have done everything we can not to paint Republicans into a corner. We have allowed them to be part of the conversation with dignity and respect. I am determined that we not allow their intractable response (with the exceptions of Senators Susan Collins and Olympia Snowe of Maine, Arlen Specter of Pennsylvania) to derail our hope of reforming the divisiveness and partisan bickering in Washington we have suffered for the last eight years. However, we obviously have a long way to go.
I am so proud of how President Obama has handled this difficult beginning to his administration.
Rule One: Don’t rush! The bill must be airtight and bullet-proof far into the future:
I realize there is great urgency to get this bill passed as soon as possible since each month we corkscrew deeper into an ever expanding economic vacuum. However, rushing to push an ill-conceived plan out the door is a guaranteed exercise in futility. What is the point of rushing to get a stimulus package passed by the Senate if the provisions of the bill won’t be implemented until well into the future, and even then may not be effective? We really need to take the time to get the composition and timing of the bill’s provisions right, even if it takes a few extra weeks, or even a month to do so. Not only will we pay a heavy price in terms of failing to right our upended economy if we don't produce an airtight and bullet-proof plan, we will pay a dear price politically. Let's keep our heads.
The delivered bill should have a solid singularity of purpose with the goal of job creation, either through increased consumer spending or direct investment in government sponsored projects. The goal shouldn't be simply “get a bill passed within the next two weeks comprised of previously authorized, but as yet unfunded, programs.” The only other related consideration should be to promote job creation in sustainable, environmentally friendly ways wherever possible.
Last week I attended Chapman University’s 2009 Economic Forecast breakfast, where Dr. Esmail Adibi gave the 10th annual Economic Outlook for the US and Southern California. His basic description of what’s going on can be summarized as an ever increasing circular pattern we have become trapped in:
Important note: Consumer spending is 70% of GDP
A caution about tax cuts: Darren Gersh, Washington correspondent for PBS’s Nightly Business Report made a good point about cutting taxes. He said, “Republicans want to see more tax cuts added to the program, although Congressional tax writers say the earliest the Treasury could adjust tax withholding tables would be June 2009. Economists at Macroeconomic Advisors believe families would save roughly 40 cents out of every dollar they receive in tax cuts, as consumers struggle with a deep recession.”
The building of infrastructure should look towards technology of the future, especially in terms of energy. For example, the building of solar and wind energy transmission lines comes to mind as a much needed electricity distribution component that could employ many people. This could be for solar thermal energy plants in the desert or wind farms all across the country.
Incentives to buy certain things (like energy efficient cars, home improvement projects) should be included in the plan. This will encourage people to actually spend money in the economy to offset the urge to simply save any tax cuts or other stimulus plan cash benefits they receive.
Lastly, I would like to emphasize that we should keep the plan as simple as possible and not try to cover too much ground. We should definitely include some "sure things" that we can point to as successes down the road when the opposition tries to obstruct our efforts.
The bottom line is that we want this plan to have some tangible results, both within six months and in the long-term. We need this plan to succeed. It may not be the silver bullet for all of our economic woes, (which scale to great heights), but it should be something that we can refer to as having had a positive, major impact on getting out of this deep recession.
Just wanted to share a letter I sent early last week to my state's Senators, Barbara Boxer and Diane Feinstein, and to all the Democrats on the Senate Banking Committee:
With regard to the Automobile Industry emergency loans, I would like to express two main concerns:
Now that fuel prices have dropped to a fraction of what they were during the summer, and if history is any indication of the automakers’ (and the American publics’) shortsighted habits, the auto makers are going to resist moving toward fuel efficient and alternative energy driven vehicles. They will reapply lobby pressure to resist imposition of efficiency and technology regulations. Their ties with big oil will be renewed and we will face far greater crises in the future than the “depression” the auto makers are fear mongering about in the news today if they aren’t bailed out.
Congressional leaders rightly insisted that the automakers must develop a credible restructuring plan that results in a viable industry with quality jobs and economic opportunity for the 21st century while protecting taxpayer investments.
I believe the kind of detail they need to provide in their business plan includes:
These loan stipulations should be baked into the loan documentation in the form of loan covenants that can be tracked on a regular (quarterly, annual) basis. Confidentiality of all such information should be ensured, and should be shared only with certain members of Congress and relevant auditors who will oversee administration of any funding disbursed.
Requiring specifics from the auto makers should not be viewed as overkill. Per a recent NPR article, the three companies went through nearly $18 billion in cash reserves during the last quarter, and GM and Chrysler have warned of their imminent collapse. The only reason Ford has a bit more cushion is because they had arranged billions of dollars in financing before the financial crisis took hold, not because of their successful business model.
One more point on a claim the auto makers and others have made recently regarding the auto makers’ bailout that it is unfair to withhold financial help to them when over $700 billion has been pledged or disbursed to the financial institutions of this country. It’s comparing apples to oranges. The financial system is the backbone of all economic sectors. Without the ability for all businesses to borrow money and to do banking, all sectors of the economy would fail. The auto industry is but one sector of our economy. Granted, it is huge in terms of the U.S. manufacturing base, but its collapse would have nowhere near the devastating impact that a collapse of the financial system would have.
At the time the initial funding was infused into the financial sector, banks and lending institutions were failing in a domino effect at an alarming rate, unprecedented since the great depression. Unfortunately, we didn't have time to put together an air-tight loan covenant strategy as outlined above for the auto industry. However, I do believe that we did what we had to do to stop the hemorrhaging that would have opened up much greater problems than we face now.
I want to thank you again for all your efforts and thoughtful consideration in this most challenging and pivotal of crises.
After nearly eight years of incredulous outrage, on November fourth of this year, I and many others converted, literally overnight, from an “anti’s” to a “pro’s”. Since November fourth, my hopes have been strengthened by President Elect Obama’s choices for his cabinet and other appointed positions and by the rigorous process he has used to make those choices. He has been consistent with his campaign vision to surround himself with stellar thinkers and strategists instead of cronies with preconceived, shortsighted agendas. He is comfortable to be the leader of such a high powered group. I’m sure there will be challenges, but I believe as Obama does that he has the intellectual ability and strength of personality to keep them focused for the greater good. He has chosen men and women of divergent viewpoints and backgrounds, and the solutions to our problems will be the product of their collective thought processes and disagreements. They will bring to the table their vision, analytical skills, experience, composure in the face of extreme challenge, as well as their humility.
Yet during the same few weeks I have been watching with horrified fascination the erosion of the future of the American dream. First because of the mortgage industry debacle, now because of our own collective implosion of confidence in the American financial system and economy.
I have no answer to the problems facing our economy and financial system but I do have one idea I’d like to propose:
We need to build and sustain a positive belief system foundation from the ground up to complement what the government is doing. We need to use our belief system for good, and not to propel us to our own demise.
There have been comments made on news shows, talk shows and blogs that the United States may not come out of this crisis situation as the world leader that it has been. In years past, especially after 911 when our leaders in the White House lead us to ill informed decisions based in arrogance and hubris, some of my friends and family were of a mind to allow the U.S. to fall down the ranks of world leadership. Our own nation had become so distasteful in its arrogance and saber rattling that we were willing to clip our own wings to bring us back down to earth.
But today is a new day. We are looking at the assemblage of possibly the most inspired and competent White House Administration, Senate and Congress in history.
And we need it. Not only because of the economic and financial system meltdown, but because of a problem we are already bumping up against that is working on its own timetable, namely Global Warming/Climate Destabilization. We need to move from the last row in the global problem solvers on this issue to head of the class.
However, we are going to be incapacitated and unable to fight such problems if we don’t resolve our current economic crisis. Treasury Secretary Paulson has made a valiant effort to reverse our course and keep us from sliding toward years, if not a decade, of economic woe. His decisions, in my opinion, have been well founded. We must first save the financial system sector, i.e. banks and other lending institutions, which support all other sectors of the economy by offering critical financial services. Otherwise no economic sector will be able to function. His plan to stabilize the financial system seemed to be working for a moment, but now has again started to erode.
What’s happening? Again, the main culprit may be that our belief system has become our own worst enemy. We need to pick ourselves up, dust ourselves off, scrape up whatever amount we can possibly afford, no matter how small, and spend it in our economy. Not everyone will be able to participate, but those of us who can in even the most modest of ways must rise up to do so. People need to be rallied to avoid panic. We need to stay calm, cool and collected. We need to be forward thinkers, like the example set by President Elect Obama.
Perhaps the most cogent visual I can think of that rivals this situation is just after September 11th. People of both genders, all races, religions, political affiliations, sexual orientations and stripes of any sort were lining the streets waving American flags. It was overwhelming to drive home from work on September 12th and 13th and see the preponderance of people on the street in solidarity. I remember that my teeth were on edge because of it, but I supported our President 110% at that time because I believed we had to have that kind of cohesiveness to get through the crisis we were experiencing. Of course what the President at that time did with our outpouring of support is viewed by many as tragic and ill conceived. But now is the time to use that American spirit to stop the hemorrhaging of our economic and financial systems.
I just watched the November 16th 60 minutes interview of President Elect Obama, and listened with great attention to what he said about the bailout of the auto industry. Before listening to the interview, I had composed a letter to my senatorial and congressional representatives to express my view on this subject. President Elect Obama made the point that to have a total collapse of the automobile industry in our current dire economic environment would be disastrous. That rings true to me. I do, however, want to share my thoughts on this issue, current economic conditions notwithstanding.
The major U.S. auto manufacturers are riddled with entrenched bad management and have been hamstrung by their own political will. They have been absolutely resolute in their rejection of retooling to more efficient cars, and have grossly mismanaged their corporate mission to focus solely on making money at the expense of the big picture. They are failing strictly because of their own company-wide shortsightedness and inability to see profit in progressive thinking. Let them extinguish naturally and be assured that a smarter, more innovative car industry will rise out of the ashes here in the U.S. It is time for us to recognize that the car industry as we know it has failed, and has inherent, fatal flaws baked into its structure that will not go away.
I realize that the auto industry is directly or indirectly associated with millions of jobs in this country. However, to prop up the existing car companies would be an exercise in throwing good money after bad. I believe the industry will fail at a later date due to its proven intractability. The billions of dollars we would spend now would be lost and the confidence of the American people in Democrats’ ability to navigate troubled waters severely eroded.
The country can survive, at least temporarily, without American major car manufacturers like GM, Ford and Chrysler. Let the market run its course on these companies so that we may release the entrepreneurial and progressive spirit of the startup companies, such as Phoenix Motors, Fisker Automotive and Tesla Motors, who are waiting in the wings to expand into markets abandoned by the big three manufacturers. Unlike, GM, Ford and Chrysler, these new companies and others like them are not beholden to the oil companies. They are not entrenched in incompetent industry management and misguided lobby groups that are helping to lead us to our own environmental and economic ruin.
If we are to allocate billions of dollars, why not allocate it towards such companies as Phoenix, Fisker, Tesla and others like them to create jobs and produce lower tier high-efficiency product lines?
Per Robert Kaufman, Director of the Boston University's non-partisan Center for Energy and Environmental Studies, "The question for this country for policy is 'How will we ensure that we have energy over the next twenty years?'. To do that we have a finite amount of capital that we can invest in the energy industry. It's highly unlikely that investing that money in offshore oil and gas drilling will ensure that we have sufficient supplies of energy ten and twenty years from now. We've tried that experiment in the past. Despite all those wells drilled, domestic oil and gas production continued to decline. So in hindsight, that money was not effectively spent." To hear the entire four minute interview, please go to http://www.npr.org/templates/story/story.php?storyId=94415403.
It is well past time that we break ourselves of our addiction to petroleum and other nonrenewable fossil fuels. Because the U.S. owns less 3% of the world’s proven oil reserves per the Energy Information Administration (please see www.eia.doe.gov/pub/international/iealf/crudeoilreserves.xls), there is no way we can drill ourselves out of the problem of dependency on hostile foreign countries for oil. More importantly, Global Warming is a true phenomenon, and it’s accelerating every year. Let’s not wait until we are in a crisis situation like the financial meltdown we are experiencing now as we stumble over ourselves as things spiral out of control. Per the scientific experts, by the time Global Warming becomes a crisis, it will truly be irreversible, and no amount of government bailout will be able to resolve it. We simply can’t afford to put off moving toward rogue state independent, cost effective, job creating alternative energy. It will prove to save much more money than it will cost in its initial investment of tax credits. It will be the foundation to build a sustainable quality of life and a stronger economy.
I urge Senators Obama and Biden to continue their passion with regard to breaking our dependence on fossil fuels and to support research, development and implementation of alternative energy!
In today's WSJ, there was an article about McCain and Obama’s campaign approach to the current US Financial System debacle (link = http://online.wsj.com/article_email/SB122160943366545595-lMyQjAxMDI4MjExNzYxMDc5Wj.html). It describes McCain as creating confusion about what he really thinks by "Flip-flopping between assertions that the economy is fundamentally strong and populist promises to rip apart its financial plumbing.” Obama is characterized as "staying on message, explaining Monday's events with the sort of dogged persistence reflected in the headline across the front page of yesterday's New York Times: "Wall St. in Worst Loss Since '01 Despite Reassurances by Bush."
The opinion piece at least gives Obama credit for offering an explanation to the current crisis as the result of McCain-Bush "economic philosophy" and also a solution, although the author dismisses the solution as “France, but with a higher corporate tax rate”.
The main thrust of the article is to point out that the problem with Senator McCain's “blustery Wall Street broadsides” is that they don't offer an explanation for what is happening. The author wants to help him by suggesting how he should focus his message by offering an explanation (easy money from low interest rates and greed) and a companion solution, which, big surprise, is to bring about more tax cuts.
Here's what I don't understand about the conservative viewpoint on cutting taxes: Bush cut taxes several times during his eight years, yet here we are eight years later with staggering financial system problems and a spiraling national debt. The Feds just bailed out Fannie Mac/Freddie Mac, Bear Sterns and now AIG. Those hundreds of $billions, maybe a $trillion bailouts will have to be paid with tax dollars. The conservatives want to stay in Iraq for as long as it takes to achieve “victory”. That effort, including not only the military and third party providers like Halliburton, are paid for with tax dollars.
If our economy is deepening further into recession every month after eight years of Bush tax cuts, where does the confidence that more tax cuts will stimulate the economy come from?
I just don't get their viewpoint. I know they're not stupid in all cases.
