What is Necessary To Rejuvenate the American Economy?

Bush, Pelosi, Reid, & Paulson Accelerate Corporate Socialism!
.....Obama vows to accelerate personal socialism!
..........McCain has a difficult time trying to clearly explain what
..........needs to be done!

THE BOTTOM LINE

Until the U.S. economy can regain its footing, it is going to be an ugly chapter of American history. Until American companies can successfully compete on an international basis, our economy will not reignite. People who are losing their jobs are not going to purchase a new house. Until people are finding jobs, buying cars, and purchasing new houses, the economy will remain in the tank. The government is sucking huge amounts of money out of the economy to bailout the Wall Street money meisters and the investment bank barons. Those hundreds of $billions will not create jobs. Instead, by removing the enormous weight of corporate taxes and healthcare costs from our corporations we could immediately change the dynamics of this financial stranglehold.

A GOLDEN OPPORTUNITY

Other countries have also stumbled because of lax lending standards, excessively low interest rates and unchecked greed. When a big country sneezes, many other countries catch a cold. While the rest of the world is also trying to revive their own economies, we need to make quick, intelligent and bold moves and take advantage of this moment of opportunity. Obama has a big box of band aids and McCain has a giant roll of duct tape. WHERE IS A REAL LEADER?

WHAT IS NECESSARY
TO REJUVINATE THE AMERICAN ECONOMY?

First and foremost, corporate and personal socialism, while sounding wonderful, have never been successful in practice – EVER - ANYWHERE! Why try something that has a 100% failure rate? This is not rocket science. The solutions are simple, obvious and necessary. While there are numerous items that need attention, there are three major issues that collectively can make a huge positive impact on our beleaguered economy and promote job creation:

1. REDUCE OR ELIMINATE CORPORATE TAXES. The U.S. has the 2nd highest corporate tax rate of all of the major developed countries. Companies pursue profits – not patriotism! If expenses (including taxes) are significantly less in another country, companies will build or relocate facilities in those countries. Companies do not pay taxes – they simply collect them for the government. The cost of the taxes is merely added to the price of the product that we purchase. We can not afford to ignore the fact that our companies are at a severe disadvantage because of our tax structure. Millions of American jobs are now in China, India, Korea and many other countries whose corporate taxes are much lower than ours. THAT MUST CHANGE IMMEDIATELY!
2. HEALTH CARE COSTS – same points as above on corporate taxes. America is the only major developed country that does not pay for healthcare through the government (that does not mean that the government has to take over healthcare – just provide the funding) WHY? Again, our companies are at a severe competitive disadvantage because none of their international competitors have that additional expense. General Motors and Ford each have more than $2,000 of extra costs (healthcare) that must be included in the price of a car – costs that their competitors do not have. That means Mercedes, BMW, and Honda etc. are selling more cars – and thus employing more workers! Hello!!!!
3. PURGE THE CLINTON/RUBIN FACTOR (OVER A $TRILLION OF FRAUDULENT LOANS) OUT OF THE ECONOMIC SYSTEM + REDIRECT THE BAILOUT $$$. Corporate bailouts + federal government partnership with American companies - are you kidding? Now even the worst run companies will not be allowed to fail – the very essence of capitalism (Remember Penn Central Railroad, Nash Rambler, Eastern Airlines and Pan Am?). The worst CEOs will be propped up with our taxes. All of the incompetent, greedy, big risk takers, who contributed to the financial meltdown, are being rescued with our money (corporate socialism). Mike and Mary Main Street (you and me), who had no potential upside in the financial orgy that ended up an economic disaster, are being robbed in order to cover the losses of the people who did have upside potential. That is immoral, probably unconstitutional and defies common sense.

Jimmy Carter cut the kindling wood (Community Reinvestment Act of 1977 – no need for a down payment, credit or a job – if you are still breathing you are qualified).

Bill Clinton and Robert Rubin lit the fire (manipulation of Fannie Mae and Freddie Mac in order to process enormous quantities of “sub prime loans”).

Alan Greenspan poured gas on a raging inferno of senseless and shameless borrowing (lowered interest rates and kept them low even when there was virtually no reason to do so).

Bush, Pelosi, Reid and Paulson are throwing our furniture, economic framework and our futures into the financial flames. They have arranged a taxpayer heist that makes Al Capone, Bonnie and Clyde, and Jesse James look like choir boys (and girls). Bush, still suffering from the “Katrina effect – afraid of being accused of not taking action quick enough – is quite willing to sign off on anything – even total stupidity.

The money for corporate bailouts should be redirected to laying the foundation of new alternative energy industries. These new industries can employ millions of U.S. workers and help our country become energy independent. If the government is going to put our money in the private economy (first, the very concept should be debated vigorously) then at least put it where it would do the most good.

The pain that will be suffered because of the stupidity of lenders and borrowers should be borne by the people who acted foolishly – not everyone else! Let those companies sell, merge or fail! Their stronger competitors will buy their assets – just not at the price that the “gambled but lost” want to get. As long as there is over a $trillion of fraudulent assets occupying space on corporate balance sheets, the credit markets will not function properly. Fire Henry Paulson and let’s get on with realistically solving the problem.

THE FUTURE WILL HAPPEN TO US -
OR WE WILL CREATE IT.
THE CHOICE IS OURS!

Healthcare Is Bankrupting America AND Sending Our Jobs Overseas!

BAND AIDS & DUCT TAPE ARE NOT AN RX FOR HEALTHCARE!

The largest hole in our country’s financial bucket is our convoluted healthcare “system”. Of course it is not a system, but instead a conglomeration of an untold number of different programs that overlap, leave large gaps, cost double the worldwide rate, deliver below average healthcare, and that are the leading single cause of millions of American jobs moving overseas.

Six former U.S. presidents, both Republicans and Democrats, have attempted to solve this most critical political issue. All failed! Barrack Obama has a giant box of band aids and John McCain has a giant roll of duct tape. Both tell us that they are going to fix the system. Right!

A large portion of the $2 trillion (plus) a year that we spend on “healthcare” is siphoned off by special interest groups that have nothing to do with actual healthcare. For example, the hundreds of billions of “healthcare” dollars that go to trial lawyers and insurance companies every year do not provide even one aspirin of medical care.

The New England Journal of Medicine, the most respected source of information in America for healthcare reported in 2006, that U.S. patients receive proper medical care from doctors and nurses only 55% of the time! That is downright scary and it is nothing to cling to!

In 2004, The Commonwealth Fund compiled the first international report that compared the healthcare quality in 29 advanced countries, including the U.S. Two major findings demand our attention. First, numerous countries provide their citizens with much better healthcare. Second, they accomplish that with about half as much money as we spend per citizen. For those that argue vehemently that they don’t want the healthcare arrangements that exist in other countries, I ask “Why not?” If I can get better healthcare and cut my premiums in half, I want to explore that option. No plan is perfect, but theirs is a lot closer to perfect than ours! Let’s talk about it.

For those whose door to their mind is locked and they cannot find the key, perhaps knowing that we are losing millions of American jobs to the same countries that offer better healthcare will motivate them to look for the key. Our American companies are needlessly at a huge financial disadvantage in international competition. Our companies like General Motors have to add an extra $2,000+ to the cost of every automobile and truck that their international competitors do not have to include. In other countries, their government pays the cost of healthcare. In America we make our companies add it to the price of a car, washing machine or lawn mower. As a result, our products cost more than theirs. Is this a good strategy?

Because of the extra healthcare cost and the fact that America has the second highest corporate tax rate in the world, many companies logically elect to locate some or all of their facilities in other countries that provide healthcare for their workers and have low (or no) corporate tax. This is not rocket science. Would someone please explain it to Senator Obama and Senator McCain.

There is a major distinction between the government providing the premium and the government taking over national healthcare. Clearly it makes perfect sense for the government to dictate automobile pollution standards, like the requirement of catalytic converters. However, it would not make sense to suggest that the government should build the cars in order to achieve the standards.

And so it is with healthcare. Currently, we are like the man who has a pistol in both hands and then shoots himself in both feet. Hello! Business as usual will soon mean NO BUSINESS! We must adjust our strategies to the reality of the world marketplace – whether we like it or not.

The most important step is simply recognizing that we need a comprehensive evaluation of all of our many options for healthcare. Then we must decide what makes the most sense given our needs, our resources and the real consequences of continuing to ignore what all of our competitors are doing.

Our next blog will address critical factors, options and opportunities that are inherent in the $2 trillion healthcare issue.

Clintonomics Has Devastated Our Economy - AGAIN!

SO WHAT DO WE DO NOW?

Few would argue that it would wise to put an alcoholic in charge of a bar. So why did Bush put Henry Paulson, the former CEO of Goldman Sachs and one of Wall Street’s $38,000,000 a year hotshots and a definite insider, in charge of the financial meltdown? Paulson recently asked for $700,000,000 of taxpayer’s money, with no restrictions – just let him decide how much and when to hand our money over to any firm of his choosing. Bush should have fired him on the spot for requesting such a ridiculous arrangement. Yet Paulson is still suggesting and executing reckless blunders that are costing the American taxpayers hundreds of billions of dollars.

For example, Paulson foolishly put $85 billion of taxpayer money into AIG, and incredibly cited a warrant to purchase AIG shares as our protection. PROTECTION? You’ve got to be kidding! The bigwigs at AIG knew they had snookered Paulsen and went on a $400,000 vacation – at our expense. They knew that they would need more money AND that under the warrant arrangement, Paulsen would have to give them more of our money in order to protect the $85 billion down payment. And so it went; another $38 billion of our taxes was forked over to the AIG honchos who had just come back from their extravagant vacation.

Where is common sense? What Paulson should have done, and what he (or hopefully someone else) should do with the rest of these big lenders and investment firms, who bet wrong and lost a lot of money, is quite simple. Yes, the market must have liquidity and it must come quickly. Everyone can agree on that. However, the big question is: What is the best method of accomplishing that necessity?

There are six major factors that must be part of any proposed solution:

1. Lenders must have a dependable source of capital.
2. The American taxpayer must have total protection.
3. Any pain (there will be much) should be experienced by those who are responsible for the poor decisions and greed that caused the problem.
4. All of the Clintonomics BS factor must be squeezed out of the system in order for us to regain a sound financial foundation and return confidence to the markets. The phony subprime equity that has been pumped into the financial networks because of the repeal of the Glass Steagall Act and the gross (possibly criminal) misuse of Fannie Mae and Freddie Mac, must be pumped back out of the system. Until reality, accountability, and common sense are discernibly restored, the vast majority of American investors will not consider putting their money in the stock market, which is one of the main sources of new capital for the companies that make up our economy. As long as there is the perception of pockets of Clintonomics still in the financial markets the economy will not run on all cylinders.
5. Like the former blue chip stock and that was once a part of the Dow Jones Industrial Average, Penn Central Railroad ceased to make wise business decisions and went out of business. Good! That is how capitalism works; the best companies survive and prosper, and the poorly run companies fall by the wayside. The consumer wins. Other railroads bought their tracks and trains. Penn Central’s former employees went to work elsewhere. Good! Remember Pan Am, Eastern Airlines, and Nash Rambler cars? Those companies ceased to exist, but the market place filled the void. Well the same basic theory must be applied to this current chapter of the American business book. Some of these lenders and investment firms should not be “saved” by the American taxpayer.
6. The markets – not Obama’s socialism - must be the major part of the solution. The main culprit in this financial nightmare was an abuse of power by the Clinton administration – the government. Suggesting that a take over by the government of large segments of our economy is the best solution is absurd. George W. Bush is still reeling from the “Katrina effect” and is paranoid about once again being accused of not taking action quick enough. He is now ready to agree to anything and sign it as fast as he can – “Mr. Paulson, please tell me where to sign and take the $700 billion.”

THE SOLUTION

If an American citizen was in financial trouble, and he or she went to a bank for a loan, the banker would probably not lend them any money. However if a loan was offered, you know that every asset that person owned would be required as collateral, and that the loan would be for considerably less that the actual value of the pledges assets. The banker would want adequate security – and rightfully so - because the banker needs to protect the interests of his other clients.

Well now the bankers are in trouble and they want money from the taxpayers to bail them out of their poor decisions and greedy lending habits. Incredibly, with the help of Henry Paulson, George Bush, Nancy Pelosi and a long list of recipients of campaign contributions from the lenders in question, these risk takers who gambled and lost want handouts and expect us (the taxpayers) to pay good money for their worthless subprime loan “portfolios”. Thanks, but no thanks.

Here is the deal – take it or leave it! The lenders need liquidity. OK! We (the taxpayers) need protection. Say yes! OK! Our message to any lender who needs liquidity, but who can not get a loan through normal channels can come to the U.S. Taxpayer Bank. Bring the title, deed and certificates to all of your assets. We will lend 50% of the value of your hard assets (not the Clintonomics BS factor – subprime loans) as a line of credit. You will agree to forgo any protection from the bankruptcy courts. If you default, we will seize your operations and liquidate all of the hard assets. Like Penn Central some of our current financial institutions need to be given the chance to succeed or fail, and if they fail – OK! Other companies will buy their assets and their employees will work somewhere else. The taxpayers will get their money back, maybe make a little money, and one more pocket of the Clintonomics BS factor will have been purged from the system.

If the lenders don’t like this arrangement (they won’t – they like the idea of uncle Paulson’s handouts much more), then they need to call Warren Buffet, a competitor, or another hard lender other than the U.S. Taxpayer Bank. That should be their first choice. The U.S. taxpayer should be the lender of last resort and the toughest to bargain with. Squeezing the Clintonomics BS factor out of the market needs to be done quickly and completely. It will not be pretty and it will be painful for many. There is no shortcut or painless way to save a severely infected limb in order to avoid amputation. It must be done, and it must be done immediately! Our future depends on it!

As long as these lenders think that George Bush, Henry Paulson and Nancy Pelosi and their cronies will bail them out, they will not take the necessary action. We need leadership! Let’s get on with it and rebuild our national wealth, rebuild trust in the system and rebuild the confidence of the American people. Where is Ronald Kennedy?

Today, Paulson, Bush, Pelosi and their anti-American taxpayer buddies lifted another $250 billion out of our wallets and INCREDIBLY agreed to “invest” our money in these poorly run companies. Have they already forgotten the $85 billion and the additional $38 billion boondoggle at AIG? Why are they such slow learners? It wouldn’t matter if they were wasting their own money, but of course Henry Paulson’s Wall Street buddies wanted our money – not their own. Where can we hide our wallets? Barrack, George, Nancy, Henry and their friends are just getting started.

The Financial Meltdown of 2008 – Clintonomic’s Second Recession!

WHY DID IT HAPPEN?

Jimmy Carter built the bomb, Bill Clinton detonated it, and Congressmen Barney Frank, Chris Dodd and Charles Schumer tried to deny its existence and thus delayed rescue attempts that could have prevented much of the damage. Barrack Obama who either doesn’t understand or doesn’t care, is promoting a trillion dollar spending plan that would undermine any attempt to resurrect our economy.

In 1977 newly elected President Jimmy Carter, along with an overwhelming Democratic majority in both the House and the Senate, proceeded to throw the economic checks and balances of America’s mortgage industry out of the window. The Community Reinvestment Act replaced the time tested requirements of home buyers having to document credit worthiness, make a down payment and be employed, with merely being able to breathe. Now anyone would be able to borrow large sums of money to purchase a house – whether they could afford it or not.

Because of this and other poor government decisions, the Savings and Loan collapse in the late 1980’s and the early 1990’s, resulted in a $160 billion bailout – funded by the American taxpayer. Having learned virtually nothing from this expensive learning opportunity, the Clinton administration decided to expand on the prior errors - and GO BIG! He knew that a large infusion of unqualified new home buyers, who had a wallet full of easy-to-get credit cards, would also be buying appliances, furniture, and other amenities for their new house. This would certainly fire up the economy – for awhile – until reality finally took over. The plan of course was that reality would not arrive until Bill Clinton had left the White House. Sorry George!

In order to pull off this clever but demented plan, Clinton would have to get the federal government to make two major moves. First, the risk of a mortgage default had to be moved away from the original lenders, so that they would agree to make a large number of these essentially fraudulent loans. Hello Fannie Mae and Freddie Mac (and the American taxpayer), as well as a batch of new financial instruments that allowed lenders to sell their mortgages (and the risk) to some sucker who assumed that there was at least a little common sense being used to qualify the new army of borrowers! Unfortunately however, Clintonomics contained no element of common sense.

Along with Fannie and Freddie, who are quasi-governmental agencies, a new – but unregulated and unsupervised – $60 trillion mortgage buying and trading industry grew and began to feed on the mortgage industry like vultures on road kill. To make this possible and to provide the political cover, Clintonomics called for and obtained the repeal of the Glass-Steagall Act of 1933. This consumer protection act was created after the Great Depression. It required the separation of commercial banks, investment banks, securities firms and insurance companies. For six decades, this restriction of the various industries helped to avoid the kinds of conflict of interest that have recently undermined the very foundation of our financial institutions.

Second, Clintonomics required that Fannie and Freddie invest up to half of their funds into the phony baloney, “subprime” worthless blocks of mortgages. In order for Clintonomics to continue running this high stakes Ponzi scheme, a continuous flow of new money and new suckers were required. The only way to accomplish that was to force Freddie and Fannie, (who guaranteed these phony loans with taxpayer money), to keep the charade going. As former Fannie Mae Chairman, Franklin Raines said, he was “under increasing pressure from the Clinton administration to expand mortgage loans among low and moderate-income people.”

When the real estate market experienced a pull back, the game was over. People who had no money in the deal simply refused to make payments on millions of these phony loans. The mainstream media’s former love affair with the Clintons had precluded any serious discussion about or scrutiny of the fancy financial footwork of the Clinton administration. However, Bill Clinton’s recent preemptive attack and assignment of blame against the Democratic Congress for the current crisis, highlights his concern that the media’s current infatuation with Obama will no longer allow the real truth to be suppressed any longer.

CLINTONOMICS FIRST RECESSION

Not content to merely sow the seeds for the current financial meltdown, the Clintonomics playbook also created the 2000-2002 recession. After Bill Gates inspired the tech boom of the late 1990’s, unexpectedly federal tax revenues spiked upward. Bill Clinton was as surprised as everyone else. The first year of the new monstrous tax revenues, which were due to the taxes produced by the unforeseen prosperity, the Clinton administration had projected a $200 billion deficit! Merry Christmas Bill.

This however, is where it all began to fall apart. To his credit, Bill Clinton was dedicated to reducing or eliminating the federal deficit. Unfortunately, he and his administration were like little kids who could not stop eating candy. They did not understand that moderation is important. The federal deficits had been accumulating for over 30 years. Changing that formula in one fell swoop was akin to attempting to jump across the Grand Canyon, instead of walking the entire one day journey.

From the second quarter of 1999 to the second quarter of 2000, federal tax revenue rose 11.4% while personal income only grew by half as much (5.7%). The net effect was that the federal government revenues sucked all of the oxygen out of the economy. A tax cut at that point was called for and it would have probably avoided the three-year recession. Income tax rates were still high because George Bush I (Read my lips – no new taxes), had in a “spirit of bi-partisanship” joined forces with the Democrats and raised our taxes. Those high rates were still in effect when the tech boom arrived.

One full year before George W. Bush even took office the stock market began to plunge. On January 14, 2000, the Dow Jones hit a high and then spiraled downward for three years. Not until George W. Bush passed a huge tax reduction did the economy respond. This is the tax cut that should have been passed in 1999!

The economy can only carry so much in tax weight. When the tipping point is reached recessions ensue. While that is not the only cause – (Clintonomics caused this recession by pumping who knows how many billions of dollars of phony loans into our economy) – it is a rule that can be counted on and must be obeyed. Would someone please explain that to Obama!

Last Night's Debate - Where was John McCain?

Senator Obama repeatedly criticized Senator McCain for supporting a reduction in corporate income taxes. Incredibly, McCain never responded, defended or explained why corporate tax relief is so important, and thus left viewers to assume that Obama was correct in chastising the silent McCain. Hello John McCain! Where were you?

The U.S. has one of the highest corporate tax rates in the world. Guess why many companies are electing to locate their operations (and the jobs that go with them) in other countries? This is economics 101. Obama does not understand that concept, and McCain does not understand that he needs to explain this to the American voters. Where is common sense?

Many countries that are our competitors do not have a corporate tax. They are actively attracting corporations to provide employment for their citizens. America is deliberately driving jobs away, and Obama said that we must continue that self-defeating strategy. McCain did not respond! Somebody get to John McCain!

Sarah Palin should explain that corporation do not pay taxes in America; they simply collect them for the government and add that expense to the cost their products. We – the American consumer – pay the corporate tax when we purchase a product.

Obama is stoking class warfare against the “rich and corporations,” and McCain passively allows him to get away with it. Obama’s quote was correct. A wheel has fallen off of the “straight talk express.” We need a “common sense” bullet train from now to the election that can shed some light and understanding on this and many other critical issues. Sarah Palin, where are you?

The Carter & Clinton Subprime Crisis!

HOW IT HAPPENED & WHAT

WE NEED TO DO ABOUT IT!

America and many Americans are now paying (literally) a heavy price because Jimmy Carter, Bill Clinton and many inept congressmen and women injected a mega dose of socialism into what was suppose to be a capitalistic society.

It used to be that if a couple or an individual wanted to purchase a home, it would require saving up for a down payment and building a worthy credit history. Buying a house was a major event that demanded forethought, planning and commitment. These requirements for personal discipline and personal responsibility were part of the cultural fabric that defined who we were as a society.

For many years however, until Lyndon Johnson became president, legalized discrimination was a real barrier for many qualified minorities who were ready, willing and able to qualify for a mortgage. Fortunately, that wrong was “righted.” Since the 1960’s, equal opportunity was available to all that were willing to do all of the things that were required to borrow large sums of money. Common sense was still a factor in our political and business affairs. President Johnson, who is reviled by many because of a tainted revisionist history that portrays him as the father of the welfare society, was actually a fiscal conservative. He proclaimed that we should turn millions of marginalized minority citizens “into taxpayers instead of taxeaters.”

The beginning of this current economic “subprime” financial debacle began with Jimmy Carter. He felt that personal responsibility, normal down payments and a worthy credit report were no longer necessary, and neither did his Democratic congressmen who enjoyed an overwhelming majority in both the House and the Senate. The 1977 Community Reinvestment Act required banks to make loans to people who by normal standards would not have met the test of being a qualified buyer. “Equal outcomes” not “equal opportunities” became the new paradigm for the Democratic Party. This is the same notorious group of congressmen that voted to defeat a comprehensive national energy policy. These were perhaps the two most damaging congressional actions in the past 50 years. The solid foundation of our financial markets was now being seriously undermined and our historic opportunity to shed our dependence on foreign oil was also lost.

Both problems continued to fester and continued to become even larger problems. Unfortunately, the Clinton administration decided to throw gas on a raging fire that was already growing out of control. Fannie Mae and Freddie Mac are quasi-governmental agencies that buy packages of mortgages from lenders (and guarantee payment of those mortgages by the federal government – “we the taxpayers”). Expanding on Carter’s cultural philosophy of no personal responsibilities, the Clinton administration took it up a notch. Former Fannie Mae Chairman, Franklin Raines said that he was “under increasing pressure from the Clinton administration to expand mortgage loans among low and moderate-income people.” Thousands and thousands of “subprime loans” made to formerly unqualified borrowers were now becoming an ever increasing percentage of the national pool of mortgages.

With no down payment, no credit, and sometimes not even a job, millions of unqualified home buyers were obtaining hundreds of billions of dollars of mortgages (guaranteed by the federal government) that would eventually undermine the framework of our nation’s financial institutions. When the prices of homes began to pull back two years ago, these people who had none of their own money in the deal, and who were struggling to make payments on a house that they could not afford to begin with began to simply walk away. Millions of these houses, whose mortgages were now larger than the actual value of the house itself, went into default. The house of cards was collapsing. Jimmy Carter and Bill Clinton are now looking the other way, Barrack Obama says that it was George Bushes fault, and John McCain keeps looking for a bigger box of band aids to “fix” the problem. Last night the Federal Reserve announced that it will begin lending money directly to corporations AND of course require that “We the taxpapyers” guarantee the loans. Stop gap measures will only make the problem worse and delay the implementation of permanent solutions.

Our video blog http://www.youtube.com/watch?v=SufDCJtsckg offers a realistic solution to this debacle. The two criteria that must be met are: Does the plan provide adequate liquidity to grease the wheels of our financial institutions, AND are the American taxpayers protected? If both of those lights do not blink, it is not a workable plan. Our plan would work. If you have a better plan or know a way to improve our suggestion, SHARE IT NOW! Our country needs your ideas. Please use our blog to participate in this crucial national discussion.

Common Sense Solution to Corporate Bailout!

If you watched our video blog at http://www.youtube.com/watch?v=SufDCJtsckg on corporate bailouts on September 30, 2008, I warned that every industry that has a block of bad loans will be trying to get in line for the government handouts. As expected, the auto industry announced yesterday that they have a giant stack of bad car loans. They want to cut the same deal for themselves, that the troubled banks and mismanaged investment firms are about to receive from Congress – trade their bad debts for taxpayer cash.

This corporate welfare is an outrage and it will undermine the very foundation of our economic system - that people and companies are responsible for their own financial decisions. Instead, the new paradigm that appears to be developing in Congress and with both presidential candidates is – if I make money I keep it, if I lose money the American taxpayers should bail me out! Call or email your member of Congress and your Senators and tell them to vote no on bailouts, and instead to pass a bill that reflects the plan outlined on yesterday’s video blog.

A fully collateralized line of credit that is secured by virtually every asset that these firms own (not just their stack of bad debts), can provide them with the liquidity that they need which will solve this financial crisis AND also protect the American taxpayer.

IT IS TIME FOR COMMON SENSE – LET’S MAKE A DIFFERENCE!

Energy Policy

Senator McCain has memorized all of energy bullet points. Solar, wind, wave, geothermal, hydrogen fuel cells, off shore drilling, natural gas, clean coal technology and nuclear power roll off of the lips of many politicians. The good news is that McCain has a bullet point for every possible source of energy. Senator Obama has memorized some of the energy bullet points but has forgotten (on purpose) nuclear power, off shore drilling and clean coal technology.

However, these bullet points are merely a list – not a plan! Neither candidate has offered a comprehensive plan than can make America energy independent. Senator Obama has told us that he will spend $150 billion on energy. Unfortunately, raising taxes $150 billion is as far as he has gotten. Senator McCain says he will explore all options, but does not know what that means yet. Where is a leader?

I will offer one option that would work. Washington can not regulate our consumption levels, but we can. When we do, the marketplace will adjust accordingly. Clearly the recent surge in gasoline prices has made many Americans reassess their driving habits and their choices when buying a new car. If there were ever any doubt that supply and demand were directly related, they should erased by this recent energy crisis. The American people will react to existing energy conditions – whatever they are.

A large majority of our oil is obtained from U.S. sources, Canada and Mexico. Much less oil is imported from unstable sources around the globe. We (America) produce 5 million barrels of oil every day. We import 10 million barrels every day. Mexico and Canada supply 3.3 million of the 10 million of imports.

Here is a plan. We cap the imported oil from outside of the northern hemisphere to the existing rate of 6.7 million barrels a day. Then every year for the next ten years, the amount would be reduced by 10%. All Americans would know that we would be making a gradual – but definite- withdrawal from our foreign oil addiction. It is a long enough time period so that everyone would have time to adjust without incurring any significant hardships. However, it is short enough to actually affect the energy choices that we would make as citizens. Automobile purchases, the proximity of a new home and one’s job location, and numerous other choices would be affected by the evolving reality of a society that will be using less petroleum.

This new dynamic would spur the market place to offer alternative sources of energy. The auto industry would become much more motivated to produce cars and trucks that ran on hydrogen, batteries, solar and other new technologies. If there was a general understanding by the American people, that significant changes in our use and production of energy were underway, we would alter our cultural attitudes and behavior. That would also change the behavior of the markets.

The government can not solve our energy problems. However, the government can (and must) create the social environment that will cause the American people to make intelligent personal decisions that are in their own best interests, as well as in the best interest of our country. Catalytic converters were mandated by the federal government in order to insure the quality of the air that we breathe. The government did not need to build the cars – just set the rules of engagement. The marketplace adjusted accordingly. The same will be true for oil and other forms of energy. This is a common sense solution. Certainly other elements of an overall solution will surface, however this plan will set the framework for additional ideas and solutions.

America is the most resourceful country in the history of the world. If our president will set the stage, our citizens will rise to the occasion. We need a president who is willing to trust the American people.