I Just Solved All Our Problems

In response to the blog post of a friend who is understandably bemoaning the state of the nation, I got a wee bit windy.

I know, I know – it’s hard for anyone to believe that I – moi – would spew opinions unrestrained against the drums of ears attached to mouths that were asking rhetoricals, not practicals. Nevertheless, I have the answer, and if the president would only sit down and pay attention to me, all the country’s problems – yea, even all the world’s! – would be solved.

The economy is not going to be fixed overnight, and right now Obama is listening to the experts who advise throwing more money at the economy in all the wrong places – at least IMHO. But, in response to those who are nodding sagely, saying “We told you that Obama would bring socialism and liberalism to the country, but did you listen?  Nooooo,” I say that (ahem) this started on the Republican watch. Obama inherited this disaster; he did not create it. And since no one has ever dealt with such a staggering world-wide economic crisis before, that means he is inventing this wheel as he goes along.  Will he get it all right?  Of course not.  But he won’t be likely to get it all wrong, either.

From what I hear and read, the economy isn’t going to start upward on any consistent basis until at least next year, and maybe not until 2011. Whenever in history the economy has tanked as suddenly and as severely as it did last summer and fall, the recovery has always been slow. That’s why they call them “depressions.”

Consumer confidence is badly shaken, and as more and more jobs are lost and more and more foreclosure notices are mailed, it’s not as if Dick and Jane are suddenly going to decide to splurge on that vacation home, lavish gifts for their status-conscious kids, or a pricey new automobile. Their businesses aren’t going to be hell-bent to hire new employees, either, because if sales are down, and no one is getting the services they offer, the employers simply can’t justify it.

The economy is, believe it or not, depressed.  And Economic Abilify has not yet been invented.

My opinion (and one or two of you might possibly be aware that I have one or two opinions, even though I rarely mention them in polite company) is that Obama would be better off to give stimulus money to the people and entities that are best in a position to turn this thing around, i.e., all of us, but in different ways.

Money should go to the homeowners trying to stave off foreclosure as a condition of and part of the debt renegotiation with the lenders – that way the lenders get paid directly by the government on behalf of the homeowners, the homeowners and their children aren’t sleeping on the streets, and the banks don’t own homes they can’t sell.

If a home is undervalued for the debt the homeowner has against it, the government should pay the difference as soon as new terms for the remainder are worked out between the borrower and the lender. If the borrower can’t afford to continue making the original payments – not the juiced-up interest payments – then there can be a second tier of incentives for the lenders to extend the debts to a 40 year amortization as opposed to the customary 30 year schedule.

And NO MORE INTEREST-ONLY long term debt!  Whose idiotic notion was that, anyway?  “Here, Joe Bob and Sally Sue, take this money that you never have to pay back. Just pay us interest and we’ll all be happy.”  The hell, they say! Morons.

Next, apply stimulus funds to the remaking of the American infrastructure, especially rural and smaller urban areas without reasonable public transit. Make light rail, high speed rail, and buses reach more places and serve more people on better schedules. One of the worst things we ever did was allow our railroads to be dismantled in favor of three cars in every driveway and five lanes on every freeway. Refurbishing and improving our infrastructure will employ hundreds of thousands of people in various positions throughout the country. From engineers to draftsmen to laborers to porters, we can get this country moving at a much more economical rate, and faster, if we’ll commit the funds to do it. And those jobs won’t go away when the projects are complete – they will need to be maintained, too.

Simultaneously, pour money into scientific research and development of alternative energy as well as into to cleaning up and maintain the environment. I’m not talking about just reducing greenhouse gases, although that is certainly a big concern, but (for example) about making reasonable accommodations for heavy metals that are the by-product of mining and drilling. A rocket laden with nuclear waste, arsenic, mercury and lead headed for the dark side of the moon might not be a bad use of NASA’s funding.

Put people to work cleaning up the environmental damage we’ve done to the planet, and making sure we’ve still got a planet to leave to our great-grandchildren. Clean water, clean air, and fewer chemicals artificially enhancing the soil and crops will go a long way toward making us all healthier – not to mention the possibility that our grandchildren might be able to play with frogs in their back yards some day.

And while we’re at it, quit giving chickens and cows all those damn hormones!  I have yet to meet a teenage girl whose double-D’s don’t put my paltry gifts to shame.  Why are their adolescent mammaries the size of a Holstein’s udders? Hormones!

Reduce the employer’s share of employment taxes. With the matching amounts that employers pay for health insurance, medicaid, unemployment, and social security, the cost of hiring an employee is a lot more than just what the employee sees in his check. This would be a real, dollar amount of savings for employers and would probably allow businesses to hire more workers across the board and at all levels.

Nationalized health care? Bring it on. Insurance companies will always provide coverage to people who choose to pay more for less care.  Those of us who have survived cancer (twice, thankyouverymuch) or who are on certain costly medications can’t get health insurance without staggering pre-existing conditions clauses that make our health insurance worthless and excruciatingly expensive – if we can get it at all.

When health insurance benefits dictate whether a parent can open a business of his or her own or must stay with an employer who provides health coverage the family can’t get elsewhere, entrepreneurialism is stifled. This country is dependent on small business and entrepreneurs. We absolutely must break down the barriers that prevent people from making an attempt to achieve their dreams. I don’t know about you, but I work a lot harder for myself than I do for someone else. I don’t think failed businesses should be propped up by the government (Detroit, are you listening?), but when something like paying for childbirth determines whether a family can start a small business, there’s something desperately wrong.

Where, O Where will the money come from to do all this?

(clearing my throat)

The same place the last two trillion dollars came from.  And the next trillion will actually make a difference. It will put people to work, shore up the foundation of the country, and stabilize the economy. It will also have the added benefit of making the world a better place.  And if any of you out there are thinking there won’t be more stimulus money forthcoming, you just hide and watch. It’ll come, I promise, whether the president takes my incontrovertible advice or not.

Now that I have solved the problems of the environment, the economy, health care, and reliance on fossil fuels, are there any other problems you’d like me to take a look at?  My rates are reasonable, and I’m in a spewing mood.

Breaking Up

It’s all the talk.

At cocktail parties and in the small talk before business meetings, we’re all talking about that certain Russian prediction of the breakup of the American union and the new countries that will take its place.

With Governor Perry in Texas talking secession, and Japanese having bought up Hawaii, and the Northwest’s own secessionist movement, maybe professor Igor Panarin’s prediction isn’t all that far fetched.

In case you haven’t heard, the Wall Street Journal ran an article in late December 2008 in which Professor Panarin was quoted as saying that there was about a fifty percent chance that the United States of America would break up by July of 2010.  That’s fourteen months from now.

According to him, we won’t be able to hold together as a nation until the end of the world – or the new era – predicted by the Maya. Brash and impulsive, we’ll disintegrate into six different countries, each under the influence of a different foreign power.  The economy and unimpeded immigration will be major causes of our downfall.  Being Russian, Panarin also attributes the coming civil war to our “moral degradation.”

But those two words, “moral degradation,” are awfully subjective.  Our morals, which the Soviets never thought we had in the first place, have actually gotten worse?  This is the result of the rabidly conservative administration we had until January? George Bush’s administration was closer to Putin’s than any other administration in history – yet our morals are fatally degraded?

I’m just glad that Putin’s Evil Twin is no longer in the highest office in the land. That man scared me.  He left us with a constitution in tatters and a reputation sullied worldwide.  He left us with an economic disaster of pestilential proportions. Under his watch an unnecessary war was started and a war that maybe should have been over by now may never be.  We are indeed following in the footsteps of the Soviets in Afghanistan. There’s a reason that country cannot stay conquered.

Russia’s economy tanked – a solitary tank, by the way, and not as part of a worldwide economic downturn – because communism, while perhaps a lofty ideal, is just an ideal.  In practice it can never work because of the avarice of humans and the specialization of society.  Like it or not, capitalism started with the rise of the medieval merchant class, and capitalism is here to stay. China’s gradual embrace of capitalism is much better than the free-for-all Russia and its satellites endured, but that embrace is tantamount to an admission that as much as we might all like to be equal, some will always be more equal than others.

I don’t see the US breaking up.  I see a future in which some secessionist movements might succeed. Perhaps in the Northwest, where politics and civil rights are far more liberal than in, say, Arkansas, a new country could rise. I don’t see it becoming part of Russia or Japan or China.  The cultures are just too different, and the survivalists are just too adamant. Instead of this secessionist entity clinging to the coast like in Panarin’s notion, Montana will allow it to flex its muscle eastward.

Now, Texas has been an independent country before and, as a former resident of the only state with a school in the Southwest Conference that wasn’t located in Texas, I say let ’em be again.  (My ex-husband never mentions the University of Texas at Austin without an exaggerated spit of disgust.)  We don’t need Texas. If we built a fence around its borders, it might help a great deal with the illegal immigration issue. In fact, give Texas New Mexico and Arizona, too.

The South, as they have always said, will rise again.  The Southern economy, lifestyle, and outlook just doesn’t quite mesh with that of those folks up East. Atlanta can be our capital, or New Orleans, at least until it washes away again.  Now, despite Panarin’s model, I just don’t see West Virginia, Kentucky, Tennessee, or the Carolinas joining some urban Atlantic nation-state. We’ll keep them in the South, as well as the Southern two-thirds of Virginia. Washington D.C. is not a Southern city, and Maryland, despite its location south of the Mason-Dixon line, just doesn’t feel Southern. The damn Yankees can have them both.  The South will also take the Florida panhandle, because we need our “Redneck Riviera.” Disney can have the rest of the state and no one will miss it.

That city that stretches from the Chesapeake to Boston Harbor will become a country unto itself.  To give it arable farmland we’ll donate western Pennsylvania and Ohio to its holdings. It’ll eventually sort of have that “Escape From New York” feel to it.  With any luck it’ll turn into “I am Legend” and we can build a fence around it, too, to keep the zombies corralled.

New England will revert to its colonial status, with the exception of Western Massachusetts, which is part of that Atlantic city-state. Its capitol will be Hanover, New Hampshire, that venerable seat of learning that is crowned by Dartmouth University.

The twin capitals of the landlocked Midwest will be Chicago and port city of St. Louis. With the fall of the Atlantic city-state to zombies, Indiana, Illinois, and Michigan will become the industrial hub of the continent.

Wisconsin, the Dakotas, and Minnesota will join Canada.  People there sound like Canadians already, so the cultural assimilation won’t be difficult for them.  Likewise Alaska will become Canadian, just because Canada needs more tundra.  Although, come to think of it, with global warming, that tundra will turn into bog by the next century.

That takes care of every place except Hawaii.  Since Japan already owns Hawaii, we won’t be able to do much with it.  Vulcanism will render the Hawaii question moot in another few thousand years, anyway.

So, I guess I can see the US breaking up, but not the way that Russian Panarin conceives of it. I have to take the cultural inclinations into consideration, whereas he just looked at state lines.  And other than those northern states that defect to Canada, Japanese Hawaii, and maybe a Cuban or Bahamian Florida, I just don’t see any other country taking control of the nations that result.

And now that I have frittered away a couple of otherwise billable hours on these mental gymnastics, I really should get back to work.

Clueless

Not only is he likely to die by the end of his first term in office (see the actuarial tables if you think I’m kidding), he’s clueless.

Yes, the wars in central Asia are a problem.  But even bigger and more worrisome is our country’s fiscal well-being.  To quote James Carville’s “war room” reminder from 1992, “It’s the economy, stupid.”  Sixteen years later, it’s the economy again.  And that’s stupid.
As if it wasn’t bad enough before, the past two weeks have seen our economy positively reeling from blows repeatedly delivered to it over the past several years.

First, September 7 it was announced that Fannie Mae and Freddie Mac were insolvent and had to be taken over by the government.  These two publicly owned companies either own or guarantee fully half of the mortgages in America. That’s right: of the twelve trillion dollars – that’s 12 followed by a dozen zeroes, for those of you who don’t know –  in money borrowed to finance the American Dream, $6 trillion of it was, in one form or another, the ultimate responsibility of these two companies.

Fannie and Freddie are, according to Fortune’s listing of the “Global 500,” the 161st and 162nd largest companies in the world respectively. The ranking is based on their annual revenue, which for each company is a little over $43 billion. Their profits, however, are in the negatives.  Fannie Mae reports losses of $2.05 billion and Freddie Mac, even worse, reports losses of $3.094 billion. And together they were on the hook for six trillion dollars in debt, over one percent of which was delinquent. That’s a recipe for bankruptcy in anyone’s pocketbook.

Are these companies even the biggest losers on the scale of gargantuan companies posting gargantuan losses?  No.  General Motors (yes, another cornerstone of the American economy and a major employer worldwide) boasts that honor.  With revenues of more than $182 billion, GM is posting a loss of $38.732 billion.   Ford Motor Company isn’t quite as desperate.  It comes in at #10 on the list of losers at a loss of $1.8 billion.  A loss like that seems manageable in comparison to GM’s, doesn’t  it?

Another US company, Sprint/Nextel, which is the third largest among the telecom giants, is posting losses exceeding $26 trillion this year.  Staggering losses like these do more than cause a company to go bankrupt.  Companies vaporize due to losses like these.  Then there’s the domino effect of the fallout: lost jobs, unpaid debts to other companies, and a gap in the economy that no amount of politicking can fill.

Will the government rescue GM like it rescued the Chrysler Corporation in the 1970’s? Our automakers employ an awful lot of people.  It will be very hard for the United States, competing with Indian and Chinese workers who charge pennies to the dollars charged by American workers for their time, to fill a manufacturing hole of that size.

It’s a big jump from these staggering losses to the next bracket of the biggest losers on Fortune’s list.  A German bank, in the red because it helped bail out a German competitor that had tanked because it had invested heavily in American subprime mortgages, is next in line with losses of $8.4 billion, but then, when we look to the next giant losers, we’re back on American soil.

Merrill Lynch is the fourth biggest money loser worldwide right now. Merrill Lynch was in the news this weekend because Bank of America became its white knight, dashing in to rescue the failing investment giant, whose offices fill all 34 floors of the Four World Financial Center Building in Manhattan’s famous financial district.  We might note here that the same subprime lending crisis has led to the failure of this icon of investing.  We might also note that Merrill Lynch is one of the relative handful of investment companies that survived the Great Depression of the 1930’s.  News of its failure is ominous, indeed.

Four of the top five money losers in the world are American, and the one that isn’t had losses caused entirely by the American subprime crisis. And get this: one of the top five losers is an agency of the American government!  Did that sentence get your attention? It should have.  Yes, the United States Postal Service is number five on the list of losers.

Now, I could wax lyrical about the mismanagement of the postal service here, but I’ll save my rant for another time.  Maybe I’ll mention something in the comments to this blog about how much freaking money the USPS spends to advertise its monopoly. But for now I’ll pass.  There’s a lot of complex analysis that goes into that discussion, and I’m talking about the economy in general, here.  I’m talking about a certain presidential candidate’s understanding of the economy in particular.

You see, despite Fannie Mae and Freddie Mac, despite the subprime and credit crises, despite the failure of Merrill Lynch and AIG, which the Federal Reserve decided to help yesterday with an $85 billion bailout loan, despite the bankruptcy filing this weekend of Lehman Brothers, another huge investment firm, John McCain believes our economy is fundamentally sound.

Now, keep in mind that we have a federal budget deficit of $9 trillion that has grown by well over $400 billion a year since the current administration has been in control. We’re fighting two wars in central Asia at an annual cost of $200 billion, which we have borrowed from China – China! – to finance. The Federal Reserve just lent AIG $85 billion, and that money has to come from somewhere.  Internationally, our currency is weak.

When the wars started, President Bush expanded the government in an unprecedented move by creating a Department of Homeland Security.  (Excuse me, but wasn’t that what the already-existing National Security Agency for?  Wasn’t Homeland Security redundant?  I feel another rant coming on.  I’ll stop here.)

The biggest financial  losers globally are either American companies or driven to their staggering losses by American economic policies and practices, and John McCain thinks that the economy is fundamentally sound.

John McCain thinks that America’s big employers and investors can sustain staggering losses and the economy is still fundamentally sound.

Something in that jungle prison over there did more than make him unable to comprehend how to send an email.  Something in that jungle prison over there robbed him of his ability to see what is obviously an unfolding financial disaster on a scale with the Great Depression.

John McCain thinks the economy is fundamentally sound. He said so on Monday, the same day Lehman Brothers declared bankruptcy.

The emperor is wearing no clothes, and his consort is a redneck rodeo queen.

Tens of thousands of jobs on Wall Street are at risk, as are hundreds of thousands of jobs in the automotive industry.  Monday was the worst day for the stock market since the 9/11 terrorist attacks. The dollar is weak against foreign currencies. We’re fighting two wars. Oil, which we depend upon as much as we depend upon water, is three times as costly as it ought to be. Worker productivity has increased, but wages have not.

Our government isn’t financially sound.  It has debt it can’t possibly repay and it has pushed a pro-credit, pro-housing agenda among the populace until consumers no longer can pay for what they buy. Unemployment is rising, and job creation is ridiculously low, a dangerous situation when we look at the potential for both white collar and blue collar job losses.

McCain thinks the government is fundamentally sound? You’ve got to be kidding me.