Welfare or Recession

What would most Americans choose when they are faced with a shortage of finances? The new U.S. president, Obama, has introduced an economic stimulus plan marked for $825 billion that will:

• provide relief for families, by cutting taxes, increasing benefits for the unemployed and the poor.
• modernize federal infrastructure
• double alternative energy production in 3 years
• expand health care by providing subsidies for the uninsured unemployed, helping states with Medicaid, and modernizing health care information systems
• improve education
• invest in science research and technology

It is well worth noting, at this point, that Republicans in Congress are wholeheartedly in opposition to this plan, and the only plan they bring to the table is through businesses, by lowering taxes on payrolls and overall business taxes.

Setting these plans aside, looking at the concepts included in this policy, for one, the Republicans are simply griping about a more government-driven economic plan that Obama's administration has instituted and that will be more long-term, filling in the huge hole that has been produced by big businesses, that have no regulation, and are in Republican minds, receiving some more benefits via tax breaks. The Republican argument states that business tax cuts will place more money back into the economy, but for whom, if it is a tax cut? It will go right back into businesses, who are currently laying off people who can't afford to pay taxes, or their mortgages. So we get more recession, because these businesses are not getting effective loans, due to financing freezes, and so in turn these businesses will simply keep the tax money saved. The money train stops there.

The Obama administration has given the American people a lot to chew on. If there is not just long term intentions here, but also a plan that was analyzed to instill long term growth, then it would seem a lot of the items proposed could promote a stabilized economy, and soon. It would be great to see this plan approach government infrastructure in the same way it plans to renovate the health care information systems. If government can go back to limited regulation, and use information technology to enhance transparency of the corporate sector, then there would be more effective oversight of potential corporate financial abuses, which were most likely the root cause of the current failing economy. This would also enhance national security by creating more open sharing of information between agencies. Lastly, there is so much job creation potential deriving from the implementation of this policy.

Taxes are such a limited approach by government. Both Democrats and Republicans are too focused on this issue. In short, taxes only get the American people through the next election cycle, and for Republicans this issue will cater to their lobbying cronies on Capitol Hill. As for Democrats, they are just seeking more votes by the American public, which most likely had a hand in giving them a majority hold. What the Republicans fail to see, is that American businesses have become a political minority in a slow economy, and by reaching out to them, their party could potentially create an even larger rift between party members and loyal voters. The American people will fight this, because it does not foster, what in their minds is individual economic stabilization. Big businesses, are normalizing the economy, and as a result small businesses are being devoured by this. There needs to be a line drawn between the two, and both parties need to provide an opportunity for individuals and small businesses to climb out of a system of handouts and tax breaks.

Instead of resisting each other, both political parties should take the approach of providing the opportunity for Americans to produce and provide growth for themselves, instead of offering us politicized welfare or stimulus handouts. None of this bickering occurred when Congress moved to pass stimulus actions for General Motors or the investment banks. Congress is simply abusing its power when it comes to the interests of the people, but when they need to keep their lobbyists happy, they don't hesitate to pass legislation. Why keep creating this constant system of monetary flow control, instilling a bottomless recession, and only offering the public a limited solution to a much larger problem? Government, stop wasting our time and our dime. Get to work, and work for the people!

Confusion is Abuse in the U.S. Economy.

One Guy Who Has Seen It All Doesn't Like What He Sees Now - WSJ.com

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In recent past articles, I've discussed deregulation, by our U.S. government, as the primary factor in the economic mess we're in now. In the article linked above, Mr. Bernstein has stated that the major contributing factor of our economic state, and the potential for this to turn into the next best thing to the 1939 Depression, is borrowing, and the investment rabbles that went unregulated by our government. In my opinion Bernstein is getting at a point in this article, that investors and the lending industry knew that if they could race to some undetermined finish line (the precursor to a market crash) with fattened funds, then they could sell off and come off the bull with a lot of money. This seems to be a fixed market in all senses. Take the risks up front, sell off the risk, and then walk away without worry of being anchored down by worthless stock.
Basically, the government was not watching the markets. The economy to me, represents pirates pillaging and looting large cruise ships of consumers. Bernstein even goes onto note that houses cost so much, that you can't buy anything in real estate with cash anymore. It all gets filtered down through the lending market, and this is where consumers represent the looted cruise ship, because a bulk of the real estate market are homeowners or buyers, who don't borrow, they are held under the pirate saber of loans. There are no other options. There's no protection for consumers in this current market, and this holds true in other realms of the market too, not just real estate. The Fed, now, is taking a top down approach, and funneling more money into a system that has way too much of it, and seeking more and more. Instead they should, what Bernstein states, "underpin the consumer". Start from the bottom, and in conjunction to this start sheparding big business lenders into fair loan practices.

Financial Wimps or Scared of the Bull?

When it comes to facing up to financial big boys, I can't decide if they're just plain wussies, or they can't run with the bull market. Seems to me a little of both, which has gotten the U.S. investors into our current market mess in the first place. I'd say that lack of knowledgeable and skilled financial staffers is the one reason, along with political bureaucracy, and these staffers having enough guts to relinguish there overweight wallets, and standing up to these companies who are relentlessly ripping off the American people.
The treasury secretary, yesterday, spoke on regulation yesterday, stating to the New York Times, "I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every 5 to 10 years". Well Mr. Secretary, here's some news for you! First off, it's not financial stress, it's called a crisis, and it just doesn't appear every 5 to 10 years, but has been substantial throughout the past decade. It started with deregulation by our good ol' faithful, Alan Greenspan, who "engineered the wholesale deregulation of the U.S. banking and financial system" (1). If the Fed is going to take such a soft stance on regulation, then you better be aware of your past actions, before conning the American public into giving them security.
Now, you have the U.S. Housing Secretary resigning, to dedicate more time to his family?! Wrong answer, buddy. Now he's under investigation by the FBI, due to a possible extortion of Philadephia's housing authority, forcing it to turn over property to a politically connected developer (2). What is going on here?!? We've come to find ourselves and our government running from the problems it's created, and instead of rushing to patch up the holes, our leaders have decided to do little if not nothing to patch up the damage, and steer this economic ship in its true direction. If their explanation for all of this is that they were wrong and are cleaning house, then I hope for once in my lifetime, our leaders can find competent, and apt staff members, that can do the without being hindered by politics and money.

1. Financial Market Deregulation Under Greenspan: Did It Go Too Far?
2. Top U.S. Housing Official Resigns
3. Treasury Rolls Out Overhaul of Financial Regulators

Confusion is Confusion

Reading about a possible cause for the recent recession in the U.S. markets, a thought struck me that unearthed a clear explanation for why so much turmoil is arising not only in the economy, but also, the psychological security, the American people caught in this rabble, are lacking. It's outright people misleading people! I thought, "Hey, it's plain as day". In the New York Times an economic columnist was baffled at a potential trigger to the recent market recession, known as "liquidity puts". I'm no economist, but if an individual who writes about economy for the New York Times, cannot understand a certain market tactic, then it seems to me there's an inside to the markets that is generally unknown to the Fed, and the public investors for the most part. What we have here, is a market being driven by corporate entities, and not the investors. Corporations who funneled money into the housing market, expecting higher returns, drove the prices through the roof, in order to double their returns. Now, we left floating in a financial limbo, waiting for the market to either bottom out, or be rescued by the Fed.
I'm all about high risk, for a high return, but everyone was doing it! Everyone put all their bets on one thing, which to me is an unspoken scam by Wall Street. They invested, and they drove to the information highways a promise of profit to be made. Why? Because a corporate investor knows it's a sure thing, if they advertise to the public that investing in their investment is the right move. Sounds like a scam to me. As with all else that's been going on since 2000, including the Enron scandal, Arthur Andersen, and the list goes on.
If you're not catching my drift, so to speak, then let's lay it out. In my opinion, these corporate entities are pretty much running the investment show: what they say (invest in), goes (public investors invest in). And when the market gets a little shaky or tight, they hedge their losses, and take the money and run. All the while, once caught, years of litigation, and a slap on the hand, and the big-wig executives walk off with a lot of money. Your money!
Investment, these days has turned into a scam artists dream. I have investments all over the place, and with the latest news, I don't feel I can trust these companies with my money anymore, because they treat it like it's theirs, and not mine, and it's really hurting the security of the world in general, not just its wallet.

Sited articles:

• New York Times: Business, March 19, 2008 Can't Grasp Credit Crisis? Join the Club
  
• CNN: Money, March 20, 2008 9:12am Brokers who lie, and more subprime nightmares