Setting the Record Straight

December 22, 2008

Gift Card From Your Government

Trickle-Up Bailout Card—Part II

     Instead of bailing out the economy by spreading government money at the top of the income pyramid, we suggest the government concentrate instead on the bottom of the pyramid, spread the bailout money there and let it trickle-up through the economy.

     But our proposal also relies on some social engineering attached to the funds. Since the ails of the domestic auto industry are front and center now, we will begin with that.

     Call it a bailout by gift card, the giver being the store of last resort, the federal government. The givees would be American households, each with a choice of which gift card to receive.

     Under the plan, the household would receive a huge amount of the equivalent of cash (huge having much more meaning at the bottom of the scale than at the top) they could not spend frivolously (except in the many instances of buying an unnecessary car), and that in turn would stimulate the neediest segments of the economy as well as benefit the societal problems of the environment, alternative fuels, credit, savings and many others.

     As we saisr-giftwrappedcar2jpegd in Part I, there may be many problems with the proposal, but the thinking in Washington has been nowhere near considering a new way of dealing with the financial crisis while at the same time steering the American public in the direction they as well as the U.S. automakers should have been moving before the economic bubble burst.

     1. Gift card for a car, $20,000 for one of the “big three,” $5,000 all others. The card would be good only for cars that meet government-set criteria, the social engineering part of the proposal. They must meet some combination of a minimum mileage standard, carbon footprint standard, reliance on alternative fuels, safety and a few other concerns. Those cars currently produced have been rated on most of those standards by the Environmental Protection Agency.
      The U.S. automakers were selling about 3.6 million cars a year in 2000 when they were riding high. In November of this year, the month they went begging for a bailout, they were selling about 2.1 million. Thus, if the $20,000 stimulus led to 1.5 million sales, presumably the automakers would be out of financial trouble with time to retool and begin making only cars that meet those government criteria. There is $30 billion of the $700 billion bailout funds, leaving $670 billion.
     2. Gift card to pay off credit card debt, but coupled with new usury laws at the federal level more stringent than new ones scheduled to take effect, perhaps limiting the cards to pay off debt capped at a certain interest rate. The average American household has $8,000 in credit card debt and 48 million spend more than they earn. That amounts to $384 billion, trimming the bailout fund to $286 billion if all 48 million took that option.
     3. Gift card to pay off student loans, recover mortgage stability, cover the cost of alternative energysr-foreclosurejpeg sources or a variety of other “green issues.” Recent figures put 2 million homes facing foreclosure because of the credit crisis, and at an average of $35,500 to save each household, the cost would be $71 billion. About 6 million outstanding student loans amount to $85 billion, or an average of $14,600 each. A $10,000 card would cost $60 billion. Those two programs would cost $157 billion, leaving $129 billion worth of cards for those who select from other government priorities.
     4. Subject the gift cards to taxes, but couple that onerous requirement with a supplementary card in the form of a certificate of deposit, treasury bill or federal bond that would not be redeemable for at least another year, to cover those who do not plan well for the extra tax burden of having thousands added to their tax bill the filing period after they receive the gift card. The forced savings also would be beneficial in introducing some people to the idea of the value of having savings to help them weather crises such as this one.

(from http://www.straightrecord.com)

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December 20, 2008

Bailout or Gift Card?

Bailout by Trickle-Up Gift Card—Part I

     The effort to correct the financial crisis in the United States has been largely ineffective, and for good reason. The people in charge, mostly at the top of the economic arm of the Bush administration, but aided and abetted by similarly minded people in Congress, continue to focus on the top of the pyramid instead of thesr-giftcardjpeg bottom.
     We continue to beat the drum here in favor of some “trickle-up” economic thinking instead of “trickle-down.” So here is a proposal for consideration that is outside the box of what everyone has been hearing from those in charge.
     This proposed solution, as with much of outside-the-box thinking, probably has some holes in it others will be quick to point out, but at least consider it as a possible point of departure for figuring out a solution.
     This proposal was inspired by one of a series of off-the-wall suggestions from largely uninformed and somewhat naïve people (and this proposal may give us membership in that group) in response to proposals from the top.
     Most are based on faulty math and false statistics, so let us begin with some true figures. The $700 billion bailout package the federal government currently is sitting on is equivalent to nearly $7,000 for each of the 111.2 million U.S. households. There are 138 million taxpayers, but millions who don’t earn enough to pay taxes.

     Throwing that much money at every U.S. family without strings attached would only encourage more of the same reckless spending without solving the financial or any other problems. But the idea does suggest a trickle-up solution that inspires us to give some serious thought to the basic idea.
     We see a possibility of solving not only the financial crisis, but many other social crises in America with that $700 billion. Unfortunately the people in charge of those funds don’t see the little people way down there at the bottom of the pile have looked only at the top of the financial pyramid because of trickle-down groupthink. Even our suggestion begins with the classic Republican economic model of tax credits to be filtered back into the economy through private enterprise.
     The stimulus checks so far have been ineffective in overcoming the financial collapse, in part because they are too little at a maximum of $600 per taxpayer and totally unstructured. Even if those checks had stimulated anything, they would have had only a narrow impact.
     The incoming Obama administration faces many more problems than the financial crisis, although it currently takes first place in concern. The major issues include the climate crisis, the associated issue of U.S. dependency on both foreign and domestic oil, the individual-based credit crisis, the savings crisis, foreclosure crisis and on and on.

     So what if the government, instead of worrying about big business and those at the top of the financial pyramid, it focuses instead on a “trickle-up” plan, beginning at the bottom of that pyramid.
     That brings us to the proposal. Shoot holes in it as you will, but at least consider it as a takeoff point for considering a solution to the crises at hand. We can already see some problems with foreign trade agreements, political problems and other likely attacks on the proposal, but let us consider it as a new way of looking at the situation.
     Instead of bailing out anyone, give not a three-figure stimulus check to each American taxpayer, give each of the 111 million households (rather than each of the 138 million taxpayers, since the very bottom does not make enough to pay taxes) a gift card similar to those offered by stores and good only in that store, valued at $5,000 to $20,000.

Next: Part II–Gift cards for, cars, cards, loans and green 

(from http://www.straightrecord.com)

December 15, 2008

Bleeping the Bard for Blago

Macblago and Lady Macblago

     Illinois Gov. Rod Blagojevich’s wife has been tagged with the nickname Lady Macbeth for her role in his plots to extort a job from President-elect Obama and favorable treatment from the Chicago Tribune. That inspires an update of two Shakespeare speeches:

  

             Macblago, thane of Illinois:sr-macbethdaggerjpeg
        Is this a bleep’n phone which I see before me,
        The receiver in my hand? Let me extort thee.
        I have funds not, and so I phone thee still.
        Art thou not, bleep’N prez, sensible to my need     
        For secretary of health? Or art thou but   
        An honest man, a Chicago weirdo,
        And I a bleep’n gov, left without a brain. 
NY Times

 

                    Lady Macblago:
Now, damn’d Rod, now I say—one, two, three jobs.
Tis time to bribe. Hell with em. Bleep, my Rod, bleep, a prez and
A Trib? What need we fear who taps us, when it’s you who
Goes to jail? Yet, who would’ve thought those bleep’n men would bleep’n
Have none our bleep’n graft in them?                                

  

(from www.straightrecord.com)

December 12, 2008

Blago Seeking Bandits

Taking Hubris to the Max in Illinois

      It takes an ego as big as the moon to consider oneself a candidate for high public office such as U.S. senator or governor. A reporter who has spent a career rubbing shoulders with people of high office should be immune to such feelings, but it never ceases to amaze just how much hubris some of these people can have.sr-blagojpeg
     The prize, which we hope will remain his for generations, goes to Illinois Gov. Rod Blagojevich, a Democrat. His case is one of massive hubris overlain by extreme corruption and, most surprisingly, naivete.
     His case would be arrogance on a massive scale anywhere in the country, but in Illinois, he has got to be kidding. The FBI (unbleeped) affidavit summarizing the case showed he had been under investigation for corruption since the day he took the (ha-ha) oath of office in 2003. The U.S. attorney is from outside Illinois because a former senator with the same last name urged his nomination, believing someone from Illinois unlikely to fight corruption.
     His wife, Patti, is the daughter of a 32-year Chicago alderman and nobody needs to be reminded of what that means. Blagojevich succeeded a Republican governor who is now in jail for corruption, a two former governors who were indicted after they left office; and that was all since Chicago’s Al Capone days.
     Probably because of its long history of corruption problems, Illinois is unique in that it has the Better Government Association, formed as a result of the Capone-led corruption. And guess what; it often works with Illinois news outlets, including the Chicago Tribune, in its investigations. And the Tribune itself was investigating the U.S. attorney’s investigation of Blagojevich and in contact with that office.
     Blagojevich had to know he was under investigation and even said to a fundraiser (over the phone), “You gotta be careful how you express that and assume everybody’s listening, the whole world is listening. You hear me?” Turns out it was.
     And yet, with all that behind him, Blagojevich apparently was naïve enough to believe he could shake down the Chicago Tribune and the president-elect and get away with it. As one Chicago wag said, “he doesn’t need a lawyer; he needs a psychiatrist.”

    “Power tends to corrupt; absolute power corrupts absolutely.” Lord Acton  

(from www.straightrecord.com)

December 7, 2008

Obama’s Good First Move

Jobs and Infrastructure

 

     We may be accused of belaboring the subject, but our two main mantras on this site bear constant repeating—“those who don’t remember the past are condemned to repeat it,” and the theory of “trickle-up” economics should be applied to government as a whole. 

     President-Elect Barack Obama has given the first solid indicsr-obamainfrajpegation he may attempt to take this country down the path we believe to be the key to remaking America. He is beginning with a “killing two birds with one stone” solution to two of the country’s major domestic problems.
     A trickle-up view of economics sees the people at the bottom of the income scale as the starting point, lifting them up to enable them to contribute more to society and become the buyers who keep small and then ever-larger businesses in business.
     For too long, our economy has relied on the trickle-down theory of helping businesses expand in the belief they will then hire more workers and help the entire economy: the trickle-down theory. The main difference between the two major parties is the Republicans believe to serve that theory, all federal funds should be channeled through businesses, e.g., that health care should not be direct from the government to the citizen, but should be provided with tax credits to be spent buying health care from a provider, a business.
     The trickle-up theory says that if the money is given directly to a universal health-care system, more funds would be available because they would not be siphoned off by a corporate, for-profit bureaucracy.
     HMO stands for “health maintenance organization,” an entity that was supposed to lower health costs, by working to keep their members healthy before they can contract a more-costly disease or other ailment. The meaning of HMO has been lost almost since they day they were created.
     The current economic crisis resulted from the collapse of a house of cards built on the failed “trickle-down” theory taken to its lunatic zenith, creating a situation where the gap between the rich and poor in this country is now the largest it has ever been. Keeping the middle- and low-income in their status has meant fewer buyers for the goods in American commerce. The crisis adds to that by taking away disposable income from the middle-class and keeping the low-income in their place, both income classes increasing without a job.
     The lame-duck Republican administration, as with most administrations, relied on lagging statistics to decide whether to respond to inflation and recession that was felt first at the low-income level and left to trickle up to engulf the middle-class while the statisticians waiting for months on the numbers that would prove what the lower-income classes already saw. It should not have been a surprise that any increase in the cost of fuel and food is going to affect first those without disposable income.
     So it was not surprising that when the outgoing administration saw a credit crisis building towards collapse, it attempted to solve the problem at the top, believing the solution would trickle down to the bottom.

 sr-msbridgejpeg1    Ever since the 1970s, even before the first oil crisis led to an economic crisis almost as big as the current one, experts have been warning about our collapsing infrastructure, e.g., roads, pipes, wires, dams, bridges, tunnels, much of which needed to replaced decades ago. The infrastructure is a looming crisis almost as big as the financial one.

    So now, with an administration set to take charge with intelligence behind it instead of ideology, Obama has chosen to help out bottom half of American society by pumping money into finally dealing with the infrastructure, a huge task not seen since the Great Depression and one that would provide jobs for all the unemployed and the soon-to-be Under the trickle-up theory, the top half of the economy will benefit from having more people with money they have to spend, and in some cases some they do not have to spend.
     There are many other things that need to be done to get the nation back on track, but providing jobs while halting the deterioration of the infrastructure is an excellent start for the incoming Obama administration.

(from www.straightrecord.com)  

November 21, 2008

Guzzling From the Tin Cup

The Best Favor Detroit Did Not Want
     Doubtless, the U.S. auto industry won’t see it this way, sr-dingelljpegbut Congress did Chrysler, Ford and GM a huge favor as their CEOs testified elsewhere on Capitol Hill. House Democrats ousted John Dingell as chairman of the Energy and Commerce Committee.
     As we noted in Help the U.S. Auto Industry: Vote Against It, as chairman, and before that as a high-ranking member on the panel, the Michigan Democrat did grave harm to the auto industry by giving them what it asked for. What it asked for essentially boiled down to “help us fail to compete with foreign automakers.”
     Just before the gas crisis in the early 1970s, Congress wanted to require catalytic converters on all cars to reduce pollution. Dingell helped the automakers defeat the first measures, while foreign automakers began including them on their cars.
     Dingell also helped automakers defeat efforts in Congress to require cars to have low-impact bumpers as a safety feature and to reduce weight to reduce fuel consumption, again while foreign makers included them on their cars.
     He also helped the automakers prevent stronger CAFE standards governing fleet fuel-efficiency. Together, they wrangled an exemption of trucks and certain large cars from the standards and even gave them a business-tax advantage. Foreign automakers widened the gap between average miles per gallon on their cars versus domestic ones.
     After the gas crisis eased and energy-conscious President Jimmy Carter was ousted from the White House, lights were turned back on federal monuments and all the calls for alternative energy sources began being ignored. At the same time, U.S. automakers began promoting ever-larger behemoths for the road, spending billions on advertising to begin a new trend.
     An advertising pro once told us the mantra on Madison Avenue had become “you can sell a boomer anything,” and this was the age of the all-consuming boomers. The macho-vehicle rage began and Detroit reaped the higher profits on more-expensive machines exempt from the CAFÉ fleet averages. Toyota, Honda and others continued heavy research on greater fuel-efficiency, alternative propulsion techniques and alternative fuels, and churned out the high-quality cars that resulted from that work.
     When Detroit began seeing the flight to better-quality cars made abroad, its best response was from Lee Iacocca who claimed that at Ford, “quality is job 1” even before the company lifted a hand to try better quality.
     With all their congressional goodies in hand, Detroit-based automakers decided they did not have to compete with foreign-made cars and didn’t. So when the muck hit the fan with the latest fuel crisis, their downfall was secured.
     As far-sighted managers, foreign automakers bucked the effort by Detroit to paint them as home-wreckers by locating research and manu- facturing plants in the United States and hiring Americans to build their cars.
     Of course, members of Congress heard none of this explanation during the round of hearings on the industry’s request for a piece of the financial meltdown bailout, pleaded for by CEOs of the “Big 3” who had flown to Washington on private jets with huge expense accounts and tin cup in hand.
     But House Democrats, most of whom favor the bailout because of the union jobs they think would be saved, did the auto industry a favor and doubtless will put in back in condition to compete, if it survives.
SCENES FROM A COMMITTEE     The new chairman is Henry Waxman, a tireless and dogged California Democrat who wages war on behalf of the environment and consumers, a combination that is just what the auto industry needed lo these many years instead of the Democrat who helped them on their path to oblivion.

(from http://www.straightrecord.com)

November 18, 2008

Reconsidering the GOP

GOP = SOP: The Same Old Party

     The week after the devastating rejection of the Republican Party at American polling places, the Republican Party at all levels has been undergoing a self-assessment, a “what went wrong,” if you will.
     The upshot of what has been said by the congressional GOP leadership and would-be leadership, from the Republican Governors Association and from other party members across the country is: same old party.
     Apparently, they just don’t get it.sr-reaganjpeg
     It seems all they could come up with is something like, “We forgot to follow Reaganism.” That sounds just about it, except when one asks what “Reaganism” is, the response is all over the board.
     One may recall that Reagan ran on and championed in the early years of his eight-year administration, a balanced budget. He championed reduced spending and he championed lower taxes for businesses, and all the other stuff the anti-government clique supposedly holds so dear, and about which they complain when the government, at any level, fails to deliver.
     That is not a very good explanation of what Reaganism is, but then neither are any of the other definitions posited by its adherents. It supposedly covers “family values,” whatever they are, a Pavlovian response to the flag, motherhood and apple pie on the good-feeling side and to socialism, communism and the anti-Christ, whatever that is, on the “let’s go get ‘em side.”
     And therein lies the problem of the newly introspective Republican Party—“We forgot who we are, but who are we?” Unfortunately for the GOP, it is still the party of the cold war that no longer is, “support our troops” that amounts to little more than pasting a yellow-ribbon decal on the SUV, and give corporations and the elite what they want because the largesse will trickle down to the masses, eventually.
     All summed up, Reaganism, as amorphous as it is, is little more than “us versus them,” the them meaning anybody who doesn’t look and act like us, the us being the white upper-class in gated communities with enough money to send their kids to schools where the riff-raff are not bothersome.
     For some strange reason, Reaganism attracted a lot of blue-collar America in 1980 and for many years later, which meant it also attracted the immigrant-American, both segments that believed somehow that trickle-down economics would benefit them. They were the “Reagan Democrats.”
     Twelve years of Reagan and the elder Bush, an eight-year interregnum of the Clinton presidency and then eight years of the foolish Bush appears to have convinced “Reagan Democrats” the term applied to them was an oxymoron.
     Natural Democrats, blue-collar Americans, immigrants, all the people who do the real work that makes the nation run on time, largely saw the light this year and came home to the party that actually represents them and does not just repeat nice-sounding phrases.
     The Republican Party needs to decide what it really stands for. Sarah Palin currently is the darling of the party’s right wing, but the continued adulation of her suggests the party may be self-destructive if it does not jettison her and the rest of the far right and begin representing a larger segment of the population, one that is a bit brigsr-screamjpeghter and more sophisticated.
     That would leave the party unburdened by the right-wing fanatics and focused on the commercial sector and those who have disposable income and feel the GOP is better at protecting it for them—from taxes, the criminal class, other riff-raff and whatever. But that may not leave the party with enough adherents to win elections.
     The irony of the Bush years is that the financial crisis in the United States has reduced the number of well-off voters while increasing the number of poor, a mix that does not bode well for the future of the GOP—er, SOP.

 (from www.straightrecord.com)

November 16, 2008

Candidate for AG?

Specterlation About DOJsr-specterjpeg1

     This site did not intend to join all of the speculation about whom Barack Obama would or should choose to serve in his Cabinet, but we find one somewhat intriguing. It needs a lot of thought because it is fraught with danger, but it would be a twofer, perhaps a threefer.
     Largely overlooked in the heat of the presidential campaign was the extremely important need to retrieve the U.S. Constitution from the Bush administration’s shredder and begin pasting it back together.
     There are some who justifiably claim this is a matter so urgent and important, it should be at the top of Obama’s agenda instead of the economy or Iraq.

sr-spectergonzalesnprjpeg1     To bring the United States back under the aegis of the Constitution, Obama needs a dedicated attorney general already on record as one of the harshest critics of the Bush administration and its disastrous toady in the job, Alberto Gonzales, when it comes to constitutional matters.
     The selection we are talking about is Sen. Arlen Specter, R-Pa. He has been livid and unstinting in his criticism of the administration’s use of the Justice Department to run roughshod on the rights not only of detainees alleged to be terrorists, but also on its own citizens in the name of fighting terrorism.

     As a Republican, his appointment also would serve to provide someone who could act somewhat as an ombudsman to the White House to make sure it did not try to keep all the extralegal powers Bush grabbed for himself, a grab likely to be exposed when the details of all of his secret executive orders are learned. That would be Specter’s second value as the next AG.
     His third contribution would be to give up a Republican seat in the Senate and let a Democratic governor, Ed Rendell, appoint the next senator from Pennsylvania, possibly putting the Democratic majority in the Senate over the magic 60-vote line without needing turncoat Joe Lieberman to remain in the party.
     That is the positive side of this nomination. The negative is that Specter is as unpredictable as earthquakes and can sometimes go off on some gawdawful quests, none more so than his vicious behavior in the Judiciary Committee’s hearings on the Clarence Thomas nomination to the Supreme Court, who himself was a pitiful selection for the job. We don’t mean to be equally vicious here, but as a saving grace, that did occur before Specter’s brain cancer was discovered and treated.

(from http://www.straightrecord.com)

 

November 14, 2008

Same Court For 4 Years

Just a Placeholder, Not a Changer

     The decision by the U.S. Supreme Court in a case involving sonar damages to marine animals during military training is a reminder of what the election of Barack Obama really means.sr-justicesjpeg

     Anyone looking for a change on the court during his term is likely to be highly disappointed. Obama’s election only resulted in a placeholder in the White House, not someone with an ability to change the harshly conservative tone of the court.

     Chief Justice John Roberts delivered the opinion in the case that sided with the military, in which he suggests the military and its commander-in-chief should be taken at their word. Joining Roberts were Clarence Thomas, Anthony Kennedy, Antonin Scalia and Joseph Alito.

     Kennedy and Scalia are the only two of the five who are older than Thomas’s 60, Alito being 58 and Roberts a relatively young 53. The four who manage to temper the court when Kennedy swings their way are at least 70, the oldest being John Paul Stevens at 88. Ruth Bader Ginsberg is 75, Steven Breyer is 72 and David Souter 69.

     If any change is going to take place on the court in the next four years, it is likely to be one of those four, whom Obama can now place.

     But nothing is going to change the tone, so get used to it.

(from www.straightrecord.com)

November 11, 2008

Another Imperial Presidency?

 

The Dangerous Path of Executive Orders

      A disturbing juxtaposition of news items began the week as the United States began its transition of governments. The new government will behave as the old in at least one respect.sr-bushobamanxtjpeg
     And lay this one on the Democrats who took control of Congress and announced immediately (through the new House Speaker Nancy Pelosi) that there would be no attempt to impeach President Bush.
     The head of Barack Obama’s transition team, John Podesta, said, “There’s a lot that the president can do using his executive authority without waiting for congressional action, and I think we’ll see the president do that. I think that he feels he has a real mandate for change. We need to get off the course that the Bush administration has set.”
     But Podesta, and the Obama camp, apparently does not realize that course the Bush administration set was enabled to a great extent by broadening the use of executive orders way beyond its legal authority and is the basis of many of the impeachable offenses the Democrats declined to address.
     To wit, from the New York Times: The U.S. military was given authority through an executive order signed by Bush in 2004 to attack Al Queda anywhere in the world, even in countries not at war with the United States, a gross violation of international rights.
sr-bushsignjpeg     Before that, we learned executive orders were signed with impunity to violate constitutional rights, the Geneva Convention and all sorts of domestic and international laws as the Bush administration behaved as if it was above and beyond any and all laws.
     That behavior established a dangerous behavior that eventually could lead to an authoritarian state if the checks and balances embodied in the U.S. Constitution are not used to hold that behavior in check.
     The best way to do that would have been to begin impeachment proceedings against Bush, even if there was no real sentiment to take them to the ultimate and oust him from office. The great value of the proceedings would have been to let future presidents, including Obama, know they do not have this power, regardless of how powerful and regal they may feel in the Oval Office.
      That needed to be done because once a president, or anyone else for that matter, is given authority, regardless of how ill-gotten it is, is not likely to want to give it up, as we have warned on this site before.
      Our worst fears have been realized, in the person of John Podesta, who presumably is relaying the sentiment of the Obama presidency to be.sr-branchesjpeg
      Congress needs to step in say, “Hey, wait just a darn minute here. We are in the same party, but we didn’t support Obama to be elected as king, merely as a president. Back off or we’ll start tying your hands.”
      Beyond that, somebody needs to take the Bush executive orders to the Supreme Court, and get the judicial branch to do its part in bring- ing the executive branch back within the constraints of the Constitution. This might be a good activity for the Republicans while people biased for their party are still running the court.
      Obama assumption of Bush violations is not change we need. Legislative and judicial branches with the guts to rein back in the executive branch is the change we need.

(from www.straightrecord.com)

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