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How to Fix the Economy, Reduce Global Warming and End the War

November 13, 2008 · Posted in Corporate Finance, Government, Human Rights, Political, Rants 
Shoring Up the Economy

Shoring Up the Economy

Experts are predicting that there will be somewhere between 3 and 5 million foreclosures next year alone. These figures amount to somewhere between 8,000 and 14,000 people evicted from their home every day. This is obviously not a small problem and with the continued acceleration of foreclosures it is very unlikely that it’s going to get better any time soon.  Something has to be done; the situation has gone from bad to worse and the world economy is now free-falling into a global recession unlike anything imagined before.

I’ve already expressed that Henry Paulsen is not able to help the economy and I believe that time will show he prolonged and worsened the problems that he/Goldman Sachs helped create.  I’m hopeful about Barack Obama coming into office because I believe that the world needs change and hope to empower the average citizen to help with improving the economy – to help the consumer believe.  Unfortunately, I don’t think that Barack Obama will be enough and that’s where I believe the United States (and the world as an extension of the US) needs a bailout/stimulus plan that helps stabilize the markets while simultaneously improving consumer confidence.  Some components should include:

  • Clear, sustainable leadership. The Treasury Secretary of the United States will make a great point position for the foundation of these improvements, but ultimately I believe that the solutions will include a multi-faceted approach to solving this problem.  What we’ve learned from Paulsen is that one person is not enough – a team of experts with real world experience should be brought in to help resolve these problems.  This team should include citizens to articulate the problem, experts to analyze the information, and businesspeople that have shown they have the experience, perseverance and strength to enact and stick with their policies.  This team may or may include international members, because we’ve already shown this is a world problem, it’s going to take the world to correct and rebound.  This team will need have the power to act and consistently provide a uniform front.  This team must not put the interests of the banks and financial institutions ahead of the interests of the country and its citizens.
  • The ability to let companies fail. I believe that many of the problems we are facing today stem from the fact that we, as Americans, believed were told that AIG was too big to fail.  The world has to accept that no company is too big to fail, and some companies should fail.  Those failures will bring pain, discomfort and financial losses, but, they will be controllable, calculable losses of investor’s dollars and not carried on the shoulders of the American public.  If AIG had filed for bankruptcy when this all began, would the situation be better or worse today?  I sincerely doubt they would be worse.
  • The ability to succeed. One of the issues that keeps playing into this bailout/stimulus package is an unjustified urgency.  The original $700 billion was decided on virtually overnight – obviously without any foresight and based on the numbe of times Paulsen has changed his plan – without a real plan, either.  A plan needs to be created, enacted and allowed to succeed.  It took a long time to get into this mess, it’s going to take a long time to get out.  Let the experts and people selected to do this job do their job and then give their solutions time to work.  Too many people are looking/hoping for an overnight answer, some sign of the bottom, or an explaination – that’s not going to come without a plan and some time.
  • Help for the consumer/homeowner. It’s obvious that many of the problems that exist today started with what are being called toxic investment or sub-prime home loans.  This is a small part of the problem – a very small part actually – but they show that the market didn’t deteriorate on its own – it had help.  Some of that help can in the form of fraud, but the majority came from greed, ignorance, and deceipt.  To change this, we are going to have to back up, start over and solve the problems within the foundation first.  This may mean letting some sub-prime borrowers who really can’t afford their home under any revised plan know the truth – they shouldn’t own their home.  At the same time help those people that are able to pay their home but can’t because they’ve lost their job, can’t refinance their loan, or are in a situation that was partially caused by the very banks that are now looking to take their home.  Let these owners recoup some of their losses from depressed home values from the companies that helped create the sub-prime mess.  Start there, do something quickly and shore up the foundation.
  • A New Deal. The government is spending a lot of money, but unlike in previous times of crisis the money is only going to reduce the financial exposure some companies have created by making risky investments that they didn’t understand.  Some of that money needs to go to infrastructure projects, state projects, and other places that will create new opportunities, money and jobs.  This will include putting some money back into the states, propping up education nationally, and making sure that our cities and states aren’t going in bankruptcy in this volatile and unforgiving.
  • Reduce government spending on frivolous projects and start reducing the deficit. At some point even the United States is going to feel the pinch of trillions of dollars in outstanding loans.  The consumers and  “average Americans” are already feeling that pinch as social services continue to decline nationwide.  If the government looked closely at “pork barrel spending” and reduced the unnecessary projects, the savings would be immense.  Even working through normal business efficiencies it’s obvious the government could save tens of millions.  I’d encourage our new administration to really look to business leaders to help so that it’s not simply politicians guessing what needs to be done.  Find someone that knows what it’s like to hit rock bottom and dig their way out and put that person on the team – they’ll tell you what’s frivolous, unnecessary or unlike to improve the situation.
  • Stop the war. While reducing waste and frivolous spending is important, it’s also time to start looking at the two wars that we’re fighting and consider reducing our exposure to something more manageable, both logistically and financially.  It’s not up to America alone to defend democracy and at some point it’s time our country and government starts seeing the facts.  It costs approximately $341.4 million dollars each day we are at war in Iraq.  To put that into perspective – we’ve spent enough money on this war to provide health-care to 289,177,337 children for a year.  Where would you rather see that money go?  These costs do not include the 4,196 casualties that have been suffered since the war began – an incalculable cost by any measure.
  • Pursue renewable energy and a reduction in global warming at all costs. I’m constantly amazed at how much talk goes into the arguments surrounding global warming and renewable energy while preaching “drill baby drill” comes from politicians looking to get into office.  Drilling for new oil is not the answer for anything other than how to deplete the worlds natural resources.  These things aren’t coming back and if we as a country and humans as a species don’t join together to protect our fragile ecology, it will not be their for our future.  Too many people seem to think that because this happens so slowly it doesn’t impact them or there’s nothing that they can do about it.  Absolutely untrue.  It does impact you.  It affects your life, your health, and your children.  The future is not about tomorrow, the future is about what we do today.

Obviously, I am not an economist.  I am not a statistician.  I’m barely an environmentalist.  I do not govern, fight wars, or influence great number of people.  I am a father.  I am an American.  I am concerned.  I want to know what’s going to be left for my children and theirs.  I want to know that the country and freedoms that I believe in so strongly will sustain in spite of the disregard that we have given them.  I want to know that people will care – about their rights, their country, and their future.

These words aren’t an answer to the ails of this world or even the problems that we’re facing today.  There is little more than my business and life experience to tell me that these ideas might have a hope of changing the economy or world for anyone.  These ideas are simply a starting point – an open dialogue for the readers of this blog and anyone who cares to share them with others.  It’s also my expression that we, as a country and through our government need to start somewhere.  We need to act.  Henry Paulsen’s 15 minutes of fame are up – it’s time to get moving – do something.  Now is a time for action.  From Paulsen, Obama and us as Citizens of this country.  Now is the time to act.



One Response to “How to Fix the Economy, Reduce Global Warming and End the War”

  1. […] voiced my opinions about what needs to be done for the economy, and now I would like to talk about what needs to be done for the auto-industry to succeed.  My […]

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