Who knew?

Who knew we might have avoided this economic crisis with more bridges to nowhere. Or somewhere. There are certainly lots of places that need new bridges or repair of old bridges. It is called an investment in our infrastructure.And the United States has not been making any. Has not made any for the last eight years at least. Thirty if you look at our interstate freeway system.

We are all focused on instant gratification: the big screen TV, the new Hummer, the larger and bigger house, the war in Iraq. But our failed economy is not just the people with the bigger and better house they cannot afford without the fancy but vaguely illegal mortgage, or the huge credit card debt (some accumulated no doubt because of the instant gratification of Exxon). Who knew how quickly instant gratification would mean a tank of gas so we could get to work.

There is an ever dwindling middle class. Their incomes have not risen in proportion to prices. And not since 1928 has the United States seen such a huge concentration of wealth. The top 1% has a full 20% of the income. In 1980 that 1% only had 8% of the income. Incidentally, those are the people GW Bush and John McCain do not want to tax.

But it is not just the people (and politicians) that have been short sighted in this. The United States has made no "investments" in its schools, infrastructure, health care and alternate energy sources. Earmarks put people to work. And, said this one panel of economists, the oil companies have blown it too, choosing to try and force a relaxation of EPA standards on new refineries instead of taking the money they had (more than adequate) and just building. The same can be said for many industries.

I have made a huge investment in my infrastructure with the studio (admittedly because of a cheating contractor it was bigger than it should have been) and there is more I could do if I had the money - like stain the whole house, build that deck, etc. But at the moment I am more focused on the "immediate or intermediate gratification" like firewood for the winter and a shed to keep it out from under the snow because those top holders of wealth are holding back on spending (including art). Which points to the "emotional" and psychological reasons for the bailout which may be the whole reason on some level. Investment companies were in mid-panic. Sp is the government.

I think because of this bailout we are all being forced to "rethink" our economic plans. And the government needs to do that too. And not in pulling back and not moving forward on health care and infrastructure. To put people back to work it needs to invest in infrastructure. The $700 billion bailout would have built 4,500 bridges to nowhere. I am sure we could all think of places we would like to see those bridges - could use those bridges or a new road or an adequate school or a working train/rail system for transport. And friends in the construction industry that could use the work building them. Then we would have money to invest in our personal infrastructures.

So the key here for the fat cats and companies and for the government is not to pull in on your spending but refocus your instant gratification (the war in Iraq for GW) to investment in the United States. And the long term view of your company's and our countries needs.

Please Excuse Johnny from School

I, and all the late night comedians, cannot believe that John McCain has canceled his campaign because of the economic crisis. He asked for the meeting with Bush. He also only caused havoc with the bailout plan once he got involved. Currently it looks as if he is willing to deep six a bipartisan agreement in both houses just to prove he is not GW Bush. Or to take credit for the bill that is finally passed?

Or could Johnny just be totally unprepared for the debate? It was suppose to be on foreign policy his strong suit but when he canceled Obama maintained that this was the time Americans needed to see their future leaders. And any future leader ought to be able to walk and chew gum at the same time. So why not change the topic of the debate to economics? Something McCain knows little about per his statement but enough he has to run home to Washington to shape the discussion. Or protect his fat cat friends like he did Keating in the Savings and Loan debacle of the previous Bush?

He said he was canceling all campaigning because of this crisis but all his negative smear ads are still running. He canceled Letterman but did an interview with Katy Curic. He wanted Obama and him to make a joint announcement about the suspension and then jumped the gun and did one on his own without waiting for a reply. In that he said he would continue the debate if an agreement was in place by Friday and it could have been. It looked like it yesterday afternoon. McCain screwed the pooch.

If this whole thing is a campaign ploy or trick because of falling poll numbers it is ill conceived and even the Republicans don't understand what he is doing. And risking the world's financial stability because of a few points in the polls sounds very GW Bush. Very egotistic.

But could there be another explanation. Is Johnny sick? Walter Reed Hospital is in the DC area. I imagine his doctors are either there or in Arizona. Going back home during a crisis plays even less well then going to Washington where until he had Bush call the meeting he was not needed and not even wanted.

Given the concerns about his age and health he cannot call the campaign and the debate off just to stay home sick for a couple days. And while Obama can go to DC to meet with he President and leave Biden to his campaign appearances, John cannot let Palin off on her own. So he obviously does not have confidence in her stepping into his shoes on the campaign trail. How can we believe in her to step into the presidency?

And how is Johnny's health? I think not good.

What You Don't Know About Golden Parachutes

There is a lot of talk about Golden Parachutes these days in reference to the government's proposed bailout of the Wall Street Investment firms.

John McCain and others have suggested that to bailout these failed company bonuses should not go to the CEO's that put the companies into Chapter 11. I must wholeheartedly agree. I think what these men make is obscene to begin with and that is without the bonuses and golden parachutes.

Bonuses and golden parachutes are two different things. Bonuses are for doing well and usually given in some relationship to how well the company is doing. It is clear the CEO's did not do well so any bonus or stock dividend should be immediately nixed. But Golden Parachutes are severance packages negotiated at the time of hiring to cushion their transition to another company or retirement to the Bahamas to be close to their off-shore money. They are unfortunately a contractual obligation between the company and its chief executive officers. (yes, there are probably numerous employees in the upper ranks of the flow chart that qualify for this cushy landing.) Can these contracts be broken? Aren't they legally binding documents?

I have not read the fine print in any of these contracts. I sincerely doubt that the head hunters (highly rewarded people that find positions for these elites of industry) which procured these jobs originally for them allowed such language to be put in place. So can we, the US government as new owners, dump the CEO's out of the plane without that parachute? Somehow I doubt it and I think McCain knows that and he is just playing lip service to this concept to hoodwink us commoners that know nothing of such lofty matters.

At least in the Great Depression of the 1930's the CEO's had the grace to commit suicide by jumping out of their penthouse office windows. Without parachutes, golden or otherwise. But they haven't yet. Darn. Nor have we allowed these firms to go into Chapter 11 bankruptcy which would allow a renegotiation of all debts and contracts. Through mediation people holding contracts and bills would be asked to take a certain amount less - say 10 cents on the dollar.

But no, in the infinite wisdom of our government that never learns from its mistakes (see the savings and loan rescue of the previous Bush), to avoid a recession which would dearly hurt us little people we are going to bail them out before they sink (I think maybe that bailout is the name given to a Golden Parachute for an entire company) and bring down the world economy.

The truth is either way we (back to the little people here) are in deep dodo as we say. Because the price of this bailout in conjunction with the price we are paying for a war based on lies means any tax cuts or incentives to keep spending, any rescue from foreclosures on fraudulent mortgages, any hopes of universal health care, repair and replacement of our aging infrastructure system, or a comprehensive incentive plan for an ever greener country are down the drain regardless of who gets elected president.

So the bottom line here. Is that the GW Bush that has ruined the US economy (not to mention our faith in government) for the last eight years gets to do it for the foreseeable future.

What I Know about Lies

Actually I know a lot more about lying than I do about economics except in the current situation where lying may have been a key element of the economic collapse.

In Cider House Rules, John Irving advances the theory that orphans lie because it is the only control they have over their lives. As an Air Force brat I found that children of military people also lied and so when I read this it hit home. Lying was a means of reshaping reality in families where you were moved sometimes three or four times in a school year.

However, there are some major problems about lying. One is that you never want it generally known that you are lying. Lying depends on being believed. This is particularly true for financial organizations and politicians. Once it is known that you have been lying about your assets or your liabilities or both you are not a good investment risk. Get caught lying about your mistresses and you are not electable. Lying is not good for home mortgages and loans. Lie about your net worth and you risk qualifying for a loan you really cannot afford.

Two it has been my experience that lies work best when you are the only one telling them. When everyone is lying you get on very shaky ground very fast. It is my opinion all investment banks were built on a tissue of lies they tell to each other.

Three is that lying is very stressful. You have to remember your lies and who you told them too. You can only keep this up for a limited amount of time. When my father got out of the military I suddenly realized two years had gone by and we had not moved, I went to my parents and asked when we were moving and they said we weren't. "But we have to move," I pleaded to no avail. "I cannot remember who I told what to." The worst part of this was that only a percentage of my friends were military because I was no longer in base schools and these civilians would not understand. My military brat kids understood. (Did you know that McCain was a military brat raised by a military brat? So he comes from a long line of liars.)

Four is that it is difficult to lie with your entire body. We have tells. Like in the interview where John McCain is asked if Palin is ready to be president and he says definitely yes with his mouth while shaking his head no. You have to believe your lies with every fiber of your being.

Five is that lies seldom work about things that are truly important. Oh, it is easy to lie about how beautiful that new shocking pink hair color looks on your aging aunt because she wants to believe that lie. And who is hurt by it.

Six you cannot lie for long when all evidence is to the contrary. They have to be believable lies. Bush tried to tell us the economy was essentially sound and we knew that was not true. We were broke. We in the middle class, used to lying about how well off we were to impress our neighbors, had begun to not believe our lies, so we definitely did not believe Bush. And knowing that he was lying so very obviously made us nervous. (See previous blog on economics and nervousness.)

Seven is probably the worst. It eventually becomes easier to lie than tell the truth. You lie when the truth would be so simple. You start forgetting which is the lie and which is the truth. Nixon never told the truth in my estimation. And I have doubts about GW Bush. I definitely do not believe the investment banks or the oil companies.

What I Do Know About the Economy

I know very little about economics even though for several years I worked as a cost control engineer for a major construction management firm on projects ranging to two billion dollars. But I figured this experience would help me to understand what is currently going on. One thing is clear at this point: Money and economics seem to have little to do with each other. Economics and debt do have a close relationship unfortunately.

Other things are also clear to me. ONE - The first President Bush presided over the savings and loan debacle and bail out. And now GW, son of Bush, is presiding over the investment bank debacle and bail out. Coincidence? I think not. Both of them were against regulation of corporations (including credit cards companies, mortgage lenders, investment banks, and savings and loans) and both said the economy was substantially sound until we were all treading water in debt.

TWO: Continuing to do the same thing and expecting different results is a really good definition of insanity - AND unstable economic policy.

THREE: You cannot plan for just two years. I found this out with cash flowing a three year construction project. And it had a beginning, middle and end. The economy of the world does not. It goes on. And decisions made today effect the future 10, 20 or 30 years down the road. Economic policies don't fare well in quick change mode. It makes investors uneasy and that makes them do stupid things as we have seen in the last week.

FOUR: Presidents are elected for four years and begin running for re-election in two if we are lucky so we could say that 50% of their job is running for office. Senators are elected for six and Representatives (the US House of Representatives is where all money bills originate) are elected for only two. Ergo they are always running for office ant it can be said that is their job.

FIVE: Only economists understand the economy and get four of them in a room and you will get at least eight opinions. They spend lifetimes understanding this stuff so what chance does any of the above in number four have of getting a handle on it when it is at most 50% of their job.

SIX: You cannot fire the SEC head Senator McCain. He does not serve at the pleasure of the president. If you are running for the office you might at least learn that much about it. The Presidency does have control of the Secretary of Treasury but maybe it shouldn't. Maybe that ought to be independent too so we can go for the long view needed in economics and not the short view needed in politics.

SEVEN: It is tax and spend. Not spend and tax. That, like credit cards for us lowly citizens in these perilous times, is doomed to failure.

EIGHT: No problem, be it economics or citizen unrest or an infection in your foot, goes away by ignoring it. In fact, continuing to say,"the underpinnings of the economy are strong," just makes people nervous. (see number three).

NINE: We are in a global economy and so what is bad for the United States is bad for everyone around the world. Supposedly the G8 meet and discuss some of these things yearly (or more) but there is not an economist among them. They make decisions for the world based on their view and interests.

And last but not least, TEN: WE ARE IN THE DEEP SHIT. And all in the same boat, up a creek without a paddle. With only a hoped for quick fix and no long range plan. (see two and three).

I think this says it all

I generally avoid MSNBC because they are very conservative and I am not. But a friend recommended this commentary by Keith Olberman. I think this says it all.

Back on Track

I would like to get back on track here and in the campaign for President of the United States. I was going to opt for an image of a train heading down the track and that didn't seem quite fitting so then I downloaded one of a train going down one of four tracks winding through the hills. Still did not seem to fit.

It is a mess out there. It has been so long since we have stayed on track in a campaign that basically nobody really knows where the track is. Ergo my roller coaster image. I think this says it. Even Carl Rove admitted in an interview that while dirty politics work you can get to far off into lies and dirt that you lose the message (and hopefully the campaign) and he openly admitted McCain has gone into that no-man's land with his warm up act: Sarah Palin.

But there are some very important issues facing us these days (one major one of which is the economy) and if we don't address them it could spell the end for the United States of America as we know it. Alaska is not the only state where rumblings of separation from the US can be heard. The mountain west certainly feels often that it is short changed by Washington and only used an abused for nuclear waste disposal, toxic chemical dumps and exploitation of hydro-electric energy and mineral reserves.

I an not an economist. All I know about that is that my carefully laid aside retirement funds are gone. That what I was depending upon to augment my Social Security - Art - is going through a crash because people no longer have the money to spend anywhere but the pump or on groceries. So I am going to leave the economy for others and try to focus my next few blogs on issues important to my neck of the woods.

In the early days of this country there seemed more land then we knew what to do with. And when we wanted more we just moved on over the next ridge. And actually railroads and the robber barons that ran them was how we got effectively to the West Coast. Congress signed away huge right aways including 10 and 20 miles on either side of the track as incentive for the competing companies to keep clear cutting forests for ties, open pit mining of coal to fire the boilers, and damming streams to provide water for steam.

The robber barons today are the oil companies with their oil leases on "public lands" and the open seas off-shore. When people complained about the abuses of the railroads in their westward expansion they received the answer that it was good for our country. And now when we complain of oil exploration in our national parks or pristine sea coasts we are told it is good for America. Maybe, but an alternative source of energy would be better. And it is wise for the oil companies to realize that even the railroad barons realized the error of their ways and were behind the preservation of these pristine areas we now call the National Parks and which the oil companies want to decimate.

Why don't we reopen some of the thousands of capped off wells before we drill more? Yes, some of them were shut down because they were not economical to continue to pump when oil was below $50 a barrel. But guess what folks, it isn't anymore. Development of oil shale was explored and found not economical below $50 a barrel. But guess what? It is double that now.

Before we go off an authorize the raping of what we will never be able to replace let's take a reasoned view and explore the possibilities. This is the only planet we have that can sustain life as we know it at this moment. Even animals don't mess the nest they sleep in.

Let us pause and think before we get off on one of those side loops of track to nowhere but our own ruin.