Op-Ed: What's the Price Of Toxic Assets?

Submitted by ASO member: Kimberly Wilcox

Treasury Secretary Timothy Geithner was busy writing his press release from the Treasury Department & editorial in the Wall Street Journal, while other members of the Obama administration chattered on the Sunday political talk shows. But, they all had one goal: going to extraordinary lengths to sell the Treasury Department's new program for "taking toxic assets off the books of the troubled banks." They make it sound like some sort of harmless construction project where the bulldozer will just come in as the private partner financed 95% by YOUR government money and moved these assets from the pile of dirt where they are now, and transform them on the journey into gemstones by the time they reach the books of the "private investor partners." The enormous failure of this entire plan is that no one has defined the PURCHASE PRICE to be agreed upon for the purchase of these assets. In addition, what have all these "private conversations" consisted of between potential investors in the forms of private equity firms, money managers, and hedge funds (the only firms left on Wall Street with capital to invest)? Why aren't the terms and promises being defined to the lenders in this situation...the American people who will be financing 95% of each of these transactions? Should we trust the Treasury Department to oversee the paperwork for these transactions just like they did with AIG? Citibank? Goldman Sachs? Morgan Stanley? All the others? NO is clearly the answer.

The investors are asking if they are going to be subjected to executive compensation limits, new taxes on bonuses, and other controls which they currently aren't governed by. After all, they want the financing & assets at a great price with no strings attached. Isn't it predictable that when something goes wrong with this program, it will be yet another bailout that the federal government will hand out even though it's once again a supposed risk transferred to the private sector? Where are the brilliant financial minds in America to find better solutions that this. I can foresee this debt being traded on a secondary market at pennies on the dollar which is all that some of it is worth.

The price setting of this purchase is THE QUINTESSENTIAL COMPONENT of this program and it is irresponsible NOT to focus on that first. How could any investor remotely express interest or not without a price? Everything on Wall Street is driven by price. There obviously are key parts of these private conversations between the Treasury Department and the potential investors that should be disclosed to the American public prior to the implementation of ANY program. Why isn't this purchase program open to all Americans? No one is rushing to put their shekels in the stock market or real estate and they may want to be part of the program. This program and its full terms should be ironed out and disclosed in a red herring for all to view and purchase & most importantly, the PRICE needs to be on the final copy distributed. After all, we will be lending $950,000,000,000 (that's nine-hundred fifty BILLION dollars for those of you who aren't accustomed to counting with so many zeros) out of the one trillion to purchase these diamonds in the rough that will be relocated from one balance sheet to another. I can only hope these purchasers aren't deemed too big to fail.

Are we calling it BonusGate yet?

Are we calling it BonusGate yet? Ugly, ugly stuff. Will the taxpayers ever know justice? So far, we’ve only gotten half-truths, lies, avoidance and finger pointing (the blaming of Treasury career civil servants by a Treasury spokesman yesterday was a particularly low point, don’t you agree?). Meanwhile, AIG executives – both those who have the gall to keep their bonuses and those who have the class to return them – are all wealthy. They were, they are and they will be.

Here’s an idea to get those executives closer to feeling the pain of being “one of us” – the rank and file taxpayers who don’t make millions of dollars a year. This might get the healing going once the last ounce of political and taxpayer blood has been drawn and dried on this terrible incident:

The Treasury department should put the executives of AIG on the federal government’s general schedule pay scale – the “GS Scale..” These folks are, after all, now government employees. They are paid by the taxpayers, just like the rest of the professionals at the Treasury Department.

Each executive can look up what their pay might be right here on the U.S. Office of Personnel Management website:
http://www.opm.gov/oca/09tables/indexGS.asp

Don’t be too discouraged, AIG guys and gals: the government also offers merit bonuses, known to sometimes be four figures for exemplary performance! Welcome to your life as a public servant. The joy of knowing that you serve the taxpayers will outweigh the pay-cut in due time, I am sure.

-Jean Card

AIG Stands for "ALL I Get"

As if the American public wasn't horrified enough when a huge number of AIG employees jaunted off to a posh California resort on the taxpayer dime the very weekend after they got their hands on TARP funds, they are now more horrified than ever. AIG employees got their mani/pedis and hot rock massages along with fine bottles of wine and cuisine with your dollar. AIG was the same firm that whined it couldn't meet its capitalization and payroll obligations without bailout number two and then most recently bailout number three. It cried that its employees would be on the street in days if it didn't get bailout money. All together, AIG has received a total of $170 Billion in bailout funds from the American taxpayers. I'm even more horrified by the executives dragged before Congress who assured our representative that they weren't using "taxpayer dollars" for those expenses. WHAT??? They wouldn't be in business if it weren't for "taxpayer dollars" and until and unless "taxpayer dollars" are paid back in full, there should not be another boondoggle, perquisite or bonus doled out at any of these firms that these supposed financial gurus have run into the ground. There aren't separate accounts. Are these chief executives truly so stupid or think that the American public and their Congressmen and Senators are so stupid that they are going to buy this line? Yep! After all, Americans never bothered to understand what hedge funds really were, they just trusted these same people to invest them in the ones making money in the boom market. Neither shareholders nor regulators nor Congressmen, nor Senators, nor taxpayers were asking questions in the good times, they took at face value whatever the financial gurus pedaled their way. Those days are over and the executives at AIG and other financial establishments on Wall Street have the dubious distinction of having run some of the oldest and finest financial institutions into the ground because they bilked them as their personal piggy bank for years all the while deceiving regulators, shareholders, and the American public. Congratulations! Now, are you ready to Speak Out and Speak On America?

So, now AIG declares that it has "contractual obligations" in the amount of $165 million to pay out enormous supposed "performance based" bonuses to the very personnel in the firm in the credit-default swaps department who are responsible for its ruination??? When you don't perform well, you don't get paid. What you haven't read is that this is in addition to $121 million in previously scheduled bonuses for the company's senior executives and another 6,400 employees across the organization. What's wrong with this picture? Run a firm into the ground and lose money and there is no way that you should get anything more than your salary. Before AIG employees go to bed each night, they should thank the GOD in whom we trust on our currency that pays them, along with the American taxpayer and ther future generations who provide that paycheck to them. Yet, we still hear from the bastions of AIG, "Is that All I Get?" They are so used to taking whatever they want at the expense of the firm that they just have continued it, even though the American taxpayers had to re-capitalize the firm.

Whether you are Republican or Democrat, you should be echoing the cries of House Financial Services Committee Chairman Barney Frank to put a moratorium on Wall Street bonuses period until taxpayer money is completely paid back and maybe even thereafter. In fact, Senator Christopher Dodd HAD submitted legislation that would have blocked this occurance but it was ignored at the time. Are you kidding me? Contractual obligations? Legalities? Bonuses? There would be no value whatsoever to these supposed bonus contracts with the collapse of the firm without taxpayer bailout money. No taxpayer money, no firm, no bonuses. The other issue here is that it is de riguer for employees of financial services firms to sign "employment at will" paperwork upon employment. While contracts are common in other industries, they are RARE on Wall Street. We can only hope that our representative will be smart enough to truly investigate the validity of these supposed pre-existing contracts. President Obama ordered the Treasury Department to "pursue every single legal avenue to block these bonuses," when he sensed the rage of the American voters. SOMEONE on Capital Hill or in the Treasury Department ought to be smart enough to foresee these types of shenanigans when drawing up paperwork to dispense these bailouts. The only enforcement that we've seen so far is the New York State Attorney General, Andrew Cuomo, who wants to issue subpoenas for AIG employee names, job descriptions and evaluations of employees receiving bonuses. AIG's Mr. Liddy defended these payments as contractual obligations and further added that this is what's needed to have the talented financial employees to run the business. I highly doubt it. I think some of the 10% of unemployed Americans have a whole lot more common and uncommon sense to run a business than the group that is continuing to rape and pillage AIG now. I hope that investigators continue to look at the fraud that was perpetrated on the AIG shareholders, policyholders and the American people and spare these derivative products "gurus" no mercy.

Gee, makes you wonder who controls AIG, especially in light of the fact that the majority shareholder now, with a whopping 80% of outstanding shares, is the U.S. Federal Government -ie the American people. The answer to this hoopla is found in one simple financial equation that I suggest all executives of investment banks use for 2008 year end Wall Street bonuses: nothing form nothing yields nothing...period.

Kimberly Wilcox

The Reluctant Optimist

This would all be the height of hilarity if it wasn’t actually happening. When the screaming in my head stops, I have quiet time to imagine all these budget-, policy-, and financial services-types in Washington running around like a hundred Charlie Chaplains: leaderless, directionless, and ridiculous. What are they doing?!?! I don’t at all claim to have the answers to these economic problems, but it certainly can’t be the death-by-a-thousand-cuts profligate spending of which we’re suddenly so fond.

Many seem to be saying (you know who you are: thank you) that we can’t simply resolve this situation by throwing money at it, but no one is closing the spending floodgates. I’m as scared as the next person of a prolonged recession, or (God forbid) a full-blown depression, but I’m more afraid of weathering this storm only to face 50 percent income taxes and so much government intervention and regulation that capitalists and entrepreneurs flee for the hills. We can’t afford for the engines of American ingenuity to decide to shut down to avoid conflict with our government.

I wrote last time about the importance of us learning our collective lessons from this crisis. The government is doing us no favors in that regard. We’re being scolded for having spent beyond our means and buying homes our incomes couldn’t support. We’re also being told that only our spending as consumers keeps the economy growing, and until we start doing that again, they’re going to do it for us. That causes me to wonder: when we start spending again, will they stop? And if they stop (or especially if they don’t), how much of our paychecks will be devoured by taxes to pay for it all (including the interest on our national debt)? It already feels like a vicious cycle, and it’s barely begun. Hilarious, huh?

Understanding the “Need” for the “Government” Stimulus

As a few easily-duped Senate Republicans were used like chips in a poker game on Friday evening to strike a deal to send this Nation $1.3 trillion (when considering all amendments to the bill) more in the hole, and to borrow from our children’s future to pay for our current “needs,” this irresponsible act should beg the question to all of us, how was this so-important bill written, and what is so magic about the number “$800 billion” set by the President and Vice President as necessary to stimulate the economy.

After spending eight years as staff in the U.S. Senate, it is beyond alarming how politics almost always trumps policy, and how thoughtless our policymakers have become. Make no mistake, this bill is random in its provisions and correlates little to the need for economic stimulus. It is a wish list of Nancy Pelosi, Harry Reid, and the committee chairmen from the Democratic Caucus across Capitol Hill. It is a purely partisan bill that was crafted by Congressional Democrats over a period of a month in secret staff meetings, and exclusive of any Republicans. It is the product of a backwards effort to “hit” the President’s randomly-selected target of $800 billion. It is merely a passing of the plate in search of pet projects, an effort designed to garner enough support and to fill the $800 billion tank. A target based not on analysis, but rather on an over-self-inflated bank account of political capital.

Why now? Why so fast? Because the President can get away with it. A month, six months, a year from now, he may no longer be able to jam a massive social welfare and union payoff bill down taxpayers’ throats. He must strike now and fast while the American drones that elected him still have their glazed eyes and hopeful hearts. After all, soon to come is another round of Troubled Assets Relief Program – or TARP to bailout irresponsible businesses, a huge Omnibus appropriations bill, then an enormous federal highway bill, and yet a third TARP bill right behind that. This Congress is on track to spend an amount equal to the entire U.S. gross domestic product ($14 trillion) – all in one year!!!

Let’s look at the warning signs for this bill. The Congressional Budget Office indicates in its February 4, 2009, report that this bill will create between roughly 1.3 and 3 million new jobs. On the low and high ends, that’s $600,000 and $200,000 per job, respectively. Sustainable jobs? No. But jobs that will exist long enough to get Mr. Obama and his Congressional leaders re-elected, and then start to disappear just in time for a new Administration to take the blame for the demise. Republicans and economists who are supportive of taking action argue aggressively that this bill will not stimulate the economy as its being sold. If the President truly is for small businesses, wouldn’t it be more of a stimulus to this economy to simply zero out taxes from small businesses for the next two years with tax incentives to hire new employees? Instead, by mortgaging the future, CBO indicates that this bill will have an adverse effect on these same businesses as taxes will have to be raised to support the future debt.

This bill is not “needed.” There is no doomsday around the corner for the economy if billions are not spent on painting school hallways, building a Frisbee golf park in Maine, or helping to prevent sexually-transmitted diseases. There is no doomsday if we fail to send billions to federal agencies to combat climate change, or buy more fuel-efficient vehicles. There is no doomsday if $650 million more federal dollars are not given to Americans to switch from analog to digital television. While some of these are things we should invest in for the long term, they are not things that will break our economy in the short term.

So, Mr. President, it’s time to hit the “start over” button on this process. If you truly are a figure that transcends politics and wants Washington to work in a new way, here is how you should work to stimulate the economy: First, take a breath. You control both Houses of Congress and the White House and have the luxury of a thoughtful process. Your race for passage of this bill screams that is not in the best interest of the Nation. While you have momentum from your election to implement your agenda, it is not your agenda that is being implemented with this bill. This Nation is $11 trillion in debt, and with future obligations to Social Security and Medicare, we are heading quickly toward bankruptcy. This is not the time to put politics before policy. It is time to come together as a People, and make the most effective and efficient investments. You won the election because of your temperament, mostly. Exercise it and slow down this process. TARP 1 was done as you are proceeding with this and Americans expect that you will learn from that.

Second, sit with leaders from both parties and talk through a list of priorities that directly stimulate the economy in the short term and long term. Be completely clear to them that the list should only include non-parochial priorities. You took a good first step by calling for no earmarks in the bill, but by ceding the drafting of the bill to a Congress with a 12 percent approval rating you lost control of the process and failed to lead. You should appear on television and walk through what is in the bill and why each provision is important enough to borrow from the future to pay for today. Talk about the Alternative Minimum Tax fix, explain your investment in new technologies, and other necessary provisions.

And, third, you should stop paying back constituencies that contributed to your election. You made it clear during your campaign that you were not beholden to lobbyists or special interests. Well, your words speak louder than your actions of late, and this needs to change.

We are a diminishing country, Mr. President, and there are major and very severe consequences for spending more into debt. Stop this. Government is not the engine that has made this country great. In fact, it was excessive government that served as the catalyst for the American Revolution and the formation of this great Land. We cannot spend ourselves to freedom and prosperity, but we can harness the power of the American people and let innovation and development take hold. But with crushing debt on our shoulders we cannot be anything but servants to your bureaucracy in perpetuity.

Submitted by ASO member: Ken Nahigian

WHY PASSING STIMULUS BILL #2 IN AMERICA WILL BREAK THE FINANCIAL SYSTEM JUST LIKE THE HEALTHCARE SYSTEM

Remember in November when politicians were scrambling with a gun to their head to pass BAILOUT #1 (now sometimes referred to as TARP) that the original problem was the collapse of the housing sector in the U.S.? It is a little hard to remember at this point, because no one is talking any more about what needs to be cured as the genesis of this financial cancer, they are just giving a pill for every symptom while the disease spreads because no one is addressing the underlying problems that would indeed if addressed, cure the cancer in our financial sector. American "standard" medicine is a failure because it spends more time and money than any other country "ruling out" all the diagnoses that you don't have before it even comes close to diagnosing what you do have. It's wasteful of resources, inefficient & expensive for society and most importantly, time-consuming, painful & costly for patients. No common sense is used any more in just cutting to the chase of the problem either in medicine or bailouts these days and both are running up a tab on American taxpayer's backs that will likely never be paid off. Politicians are selling the future generations of Americans mostly off to foreigners (whichever countries national treasuries and individual investors or corporate investors will still have them) via Treasury securities. All politicians and heads of Wall Street are thinking about now is, "Get the band-aid, get the band-aid, get the band-aid and put it on ME!" They want an instantaneous solution to a cancer that has been growing since the Clinton administration with the relaxation of Federal Housing policies. These policies were fed by G.W. Bush's dream and corresponding relaxation of policies so that every American could own a home. The cancer grew.

Obviously given this diseased state of the U.S. economy, you cannot cure the cancer without attacking it at its origin and cutting that off first. By doing that you will have the exponential uptick in the economy just as we have lived through the erosion these last several months as it fell out in many ways.
We've been hearing a lot of talk and analysis over the past several weeks both from President Obama and the Democrats as well as their Republican counterparts. Essentially the differences in the two perspective simply boil down to this: the Republicans want to continue the Bu-sh-it policies of cutting taxes as a way to stimulate the economy & the American financial sector while the Democrats want to finance government projects, jobs and programs to stimulate the economy. Neither will achieve any of the goals of truly making the economy & financial sector fundamentally any different NOR DO THEY AT ALL ADDRESS THE ORIGINAL PROBLEM FOR WHICH WE WERE CALLED UPON TO FORK OVER CURRENT AND FUTURE GENERATIONS OF MONEY.

I assure you that forking over a trillion more dollars to the Baby Boomers in charge who mismanaged and ruined our economy and finances in the first place is by no means worthy period. They failed in the first place as they disregarded the balance sheets and shareholders of the very institutions they were charged with a fiduciary duty to run. They failed in the second chance with the first bailout by misusing American taxpayer funds for their own personal gain. Now, Americans at the hands of our Congressmen and Senators and President Obama and his staff are about to sell out countless future American generations underneath the Baby Boomers financially by endebting them endlessly for yet another foreseeable unsuccessful set of partisan programs that benefit the same captain of industry who RAPED AND PILLAGED AMERICAN SOCIETY IN THE FIRST PLACE UNDER THE BUSH REGIME? Grow up! Even with the best of intentions on their side, this BAILOUT #2 is ill conceived, rushed, and misdirected piece of legislation that should die now!

What needs to happen now is what needed to happen before, those who wrote bad mortgages and profited from them, need to write the interest rates down to current levels and the homeowners and investors who bought the homes at artificially inflated prices need to suck up their personal losses, not socialize these losses on society while they keep all the profits when they make winning financial bets. It's very simple. This is a private problem that needs a private solution between the two parties involved. The FBI should investigate and prosecute all those involved in the LIAR LOANS who took enormous fees on the front side of those mortgages just for origination and seize their personal assets to pay for the costs. This is theivery pure and simple. So is using taxpayer money by Wall Street executives for boondoggles as they are called in finance. Pay for your own offsite golfing. Pay for your own AIG spa treatments. Pay for your own transportation to work just like the rest of America does-we'll see how many executives commute from Chicago to NYC on private jets at that point. Pay for your own meals, don't charge the firm for the after-tax cost & the American people for the tax deduction. Pay for your own escorts. Wall Street attitude of entitlement has grown well beyond cancer and the propsed new legislation for bailout #2 doesn't address it. Fair tax and other regulation of the financial services sector and enforcement will go along way. Let the institutions fail-no one is lending anyway. Get a huge clawback clause and seize the assets of all the employees involved not just the top 5 executives and give the money back to the American taxpayer to who it belongs. Why is it that we have such a hard time in America calling a crime a crime and seeing right from wrong when using other people's money? Cure the cancer and stop the bailout package. We need to rebuild an economy based on fundamentals, not try to sustain or reach again to the height of the illusions of where our economy was before. So any package that tries to restore America to what it was before the crisis is going to fail. We need to treat the cause, and the symptoms will then dissipate. If we go forward with bailout #2 amd treat only the symptoms, you might see some illusory improvement in some areas where the economy is hurting, but the fundamental erosion will still continue to proceed underneath the illusion. Let's start practicing medicine and finances in America that make sense.

Submitted by ASO member: Kimberly Wilcox

"Where's the Hope?"

It was just 21 days ago that our newly inaugurated President spoke the following words: "On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord." Apparently, memory is the first attribute to go after entering the Oval Office, as President Obama contradicted himself just days later with another dramatic quotation in the face of Senate defeat: "A failure to act, and act now [on the bill], will turn crisis into a catastrophe." If you ask me, it is time our Commander in Chief makes up his mind. The position he has earned and embraced within the last month does not take kindly to playing both sides of the aisle. You cannot promote hope to get elected then swiftly drop the hammer of fear once colleagues begin to show they disagree with your proposals.

If the President was more focused on promoting the good things that this bill will produce (if any) instead of saying how bad things will get if we don't pass it, the American people and the stock market might be more willing to embrace it. Regardless, it looks like this bill will pass, and hopefully it will help. My concern (beyond the likelihood of the bill actually working) is how often will President Obama stray from the path that got him elected and got so many Americans excited about voting again -- i.e., change, hope, etc.

Submitted by ASO members: The Philadelphians

Tax Cuts: Not the Problem

Okay. I have an issue with the ongoing implication by the president that it was tax cuts that got us “where we are today.” Here’s what he said in his weekly address over the weekend:

“Let's be clear: We can't expect relief from the tired old theories that, in eight short years, doubled the national debt, threw our economy into a tailspin, and led us into this mess in the first place. We can't rely on a losing formula that offers only tax cuts as the answer to all our problems…"

In contrast, I’ll just offer what I think is a better explanation of “how we got here” from the president’s own Treasury secretary, Tim Geithner, in his speech yesterday..

“I want to explain how we got here. The causes of the crisis are many and complex. They accumulated over time, and will take time to resolve.Governments and central banks around the world pursued policies that, with the benefit of hindsight, caused a huge global boom in credit, pushing up housing prices and financial markets to levels that defied gravity.

Investors and banks took risks they did not understand. Individuals, businesses, and governments borrowed beyond their means. The rewards that went to financial executives departed from any realistic appreciation of risk.

There were systematic failures in the checks and balances in the system, by Boards of Directors, by credit rating agencies, and by government regulators. Our financial system operated with large gaps in meaningful oversight, and without sufficient constraints to limit risk. Even institutions that were overseen by our complicated, overlapping system of multiple regulators put themselves in a position of extreme vulnerability.

These failures helped lay the foundation for the worst economic crisis in generations.

When the crisis began, governments around the world were too slow to act... When action came, it was late and inadequate. Policy was always behind the curve, always chasing the escalating crisis. As the crisis intensified and more dramatic government action was required, the emergency actions meant to provide confidence and reassurance too often added to public anxiety and to investor uncertainty.

The dramatic failure or near-failure of some of the world's largest financial institutions, and the lack of clear criteria and conditions applied to government interventions caused investors to pull back from taking risk.”

This is complicated, yes, but more accurate and therefore more responsible than the cheap-shot implication that tax cuts caused the current recession.

I think that Geithner stayed away from the Obama implication that tax cuts are to blame because he knows that our current situation has nothing to do with tax cuts – because tax cuts aren’t bad. They are good. They help stimulate the economy, especially when they are given to job creators like small businesses!

I give Geithner credit for mentioning small business several times in his speech, too. I’m glad they are being remembered when it comes to access to credit.

See this link for more specifics (i.e. a payroll tax holiday and increased expensing) on how to help the economy by helping small business.

Submitted by ASO member: Jean Card

Orson Swindle: Featured Blogger

Remember the tale about the Pied Piper?

In 1284, the town of Hamelin is suffering from a terrible plague of rats. The town council tries everything to get rid of them -- without success. At last, the Mayor promises 1000 florins to the one who can put an end to the plague.

A stranger dressed in bright red and yellow clothes shows up and says he can rid Hamelin of the rats. At night, the stranger starts to play a soft tune on a flute, luring all the rats out of the houses and barns towards the river Weser, where they drown.

The Mayor refuses to pay the piper: "Playing a tune on a flute is not worth 1000 florins. Get out of Hamelin!"

But the piper returns on a Sunday morning, when all the grown-ups are at church. Again he starts to play a tune on his flute. This time, all the children follow him, as he walks out of the gate to the mountains. Suddenly, a cave opens in the mountain. The piper walks into the mountain, still followed by the children, and the cave closes again.

The children were never seen again in Hamelin. Read here:(http://www.pitt.edu/~dash/hameln.html#grimm245 )

In the Robert Browning poem, to which many of us were introduced, the Pied Piper is selling his talents to the Hamelin city council,

``Please your honours,'' said he, ``I'm able, ``By means of a secret charm, to draw ``All creatures living beneath the sun, ``That creep or swim or fly or run, ``After me so as you never saw! ``And I chiefly use my charm …”

Beware of charmers!

Combine difficult times, a sense among many (stoked by the President and the media) of impending doom, an incredibly effective orator, a swooning press and deceit and you have a formula for the disaster with which we are being threatened. Ever the charming Pied Piper, Obama lied to the Country last night. Just a few examples:

No pork in the stimulus package --- click here and draw your own conclusion --- he lied.

(A friend of mine, a financial businessman in NY, offered this upon seeing one piece of the largess granted to NY --

"An ‘earmark’ requires a member of congress to make a specific request for funds. So, this plan to bail out a developer's failing plan to build a new arena to house the New Jersey Nets isn't technically an "earmark" because the funds will be directed by Democrat Governor Patterson and Democrat Brooklyn Borough President Marty Markowitz. (There might be more pork than (at) a South Carolina BBQ, but don't you DARE call it an earmark!) Doesn't it give you a nice feeling to know that "yes we can" uses eminent domain and government debt to deprive citizens of their private property so that "we" can advance the private interests of the politically connected? After all, that's what "change" was all about, wasn't it."

Worst economic situation since the Great Depression -- I guess Obama has forgotten the Carter Administration conditions of inflation over 12%, 21% interest rates and unemployment topping 11% -- he lied.

No willingness by Republicans to work with Dems on a consensus bill -- he lied.

Bush policies led to the mess we are in -- We know there is plenty of blame to go around to the greedy, arrogant and deceitful operatives of the banking, investment and finance crowd; to the Congress for failing to enforce regulations; and to consumers and lenders for abandoning prudent home purchase and mortgage decisions -- he lied.

4 million new or saved jobs --- there is not a person living who can detail how or predict whether that will be accomplished --- he lied.

Most economist support his economic stimulus plan -- many, many do not (read here) -- he lied.

But, he does it so smoothly. Hope you heard MSNBC's Chris Mathews and his expressions of ecstasy over last night's performance by Obama. America, we are in deep trouble.

Elections have consequences and like the children of Hamelin, many are hearing the Siren's Song, that enticing and deceptively alluring plea from The One.

This “economic stimulus” package of the Democrats (and only three Republicans) is loaded with ineffective spending to accomplish the stated goal of jump starting the economy and creating (or saving) 3-4 million jobs

The Senate Republicans offered an alternative for half the price with tax cuts and spending mechanisms far more likely to stimulate the economy right now. But, so much for negotiations with those hell bent for socializing our government and economy.

Consider the list below of one attempt to put the details on the table -- an updated list of wasteful and non-stimulative spending contained in the text of the Nelson-Collins (amendment to the Senate Bill) “stimulus” compromise.

The list contains more than $15 billion worth of spending that would exclusively benefit federal employees, such as renovations for new offices, hybrid cars and workplace safety.
One of the more egregious provisions in the bill would be a $1,500 tax credit to anyone that purchases “neighborhood electric vehicles,” which are actually golf carts. Additional benefits are available for motorcycles and three-wheeler purchases. (Section 1151 of the Nelson-Collins amendment) hybrid cars

$3 million for purchasing “neighborhood electric vehicles” (golf carts)
$5.5 billion for making federal buildings "green" (including $448 million for DHS HQ)
$650 million for the Digital Television (DTV) transition coupon program
$1.2 billion for summer jobs for youth
$200 million for workplace safety in USDA facilities
$200 million for public computer centers at community colleges and libraries
$75 million for the Smithsonian Institution
$750 earmark for the National Computer Center in MD
$224 million for International Boundary and Water Commission – U.S. and Mexico
$198 million to design and furnish the DHS headquarters
$10 million to fight Mexican gunrunners
$850 million for Amtrak
$100 million for lead paint hazard reduction
$39 billion slush fund for "state fiscal stabilization" bailout
$275 million for flood prevention
$65 million for watershed rehabilitation
$255 million for "priority procurements" at Coast Guard (polar ice breaker)$650 million for abandoned mine sites
$1.3 billion for NASA (including $450 million for "science" at NASA)
$100 million to clean up sites used in early U.S. atomic energy program
$10 million for urban canals
$1.5 billion for carbon capture projects under sec. 703 of P.L. 110-140 (though the original section only authorizes $1 billion for five years)
$300 million for hybrid and electric cars for federal employees
$500 million for State and local fire stations
$180 million for construction of Bureau of Land Management facilities
$500 million for wild land fire management
$110 million for construction for the U.S. Fish and Wildlife Service
$522 million for construction for the Bureau of Indian Affairs
$412 million for CDC headquarters
$500 million earmark for NIH facilities in Bethesda, MD
$100 million for constructing U.S. Marshalls office buildings
$300 million for constructing Federal Bureau of Investigation (FBI) office buildings
$800 million for constructing Federal Prison System buildings and facilities
$307 million for constructing National Institute for Standards and Technology (NIST) office buildings
$1 billion for administrative costs and construction of National Oceanic and Atmospheric Administration (NOAA) office buildings
$160 million for "volunteers" at the Corp. for National and Community Service

Submitted by ASO member: Orson Swindle

Orson Swindle served for eight years with the Reagan Administration, the last four as Assistant Secretary of Commerce, and recently, over seven years as a Commissioner at the Federal Trade Commission. A career Marine Corps officer and fighter pilot, he was a prisoner of war in Hanoi, Vietnam for over six years.

Stimulus Clears Hurdle

From CNN....

The Obama administration's $827 billion economic stimulus plan survived a key vote in the Senate, putting a compromise version of the bill on track for passage Tuesday.

With the help of Republican Sens. Susan Collins, Olympia Snowe and Arlen Specter, the Democrats locked in the votes needed to end debate on the bill.

The final vote was 61 in favor, 36 opposed.

The bill is expected to survive a full vote in the Senate on Tuesday, setting up a battle with the House as the two chambers try to iron out differences between their versions of the bill.

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ARE YOU MAD YET AMERICA???

$1.6 billion of your taxpayer bailout money has gone to failed bank executive's pockets this year. In mid-December 2008, well before "normal" bonus time on Wall Street, the Associated Press reported that "$1.6 billion of YOUR TAXPAYER BAILOUT MONEY went to bailed-out bank executives." This $1.6 billion was in salaries, bonuses and other benefits an Associated Press analysis reveals and hurried along to be paid out before Congress could actually wake up and act to limit the executive compensation in the TARP (Troubled Assets Relief Program). Remember, originally, TARP was designed to buy up the bad debts from the balance sheets of these banks, so according to some, "it wasn't foreseeable that this compensation abuse issue would arise." I wrote about it for another publication in detail in the early FALL of 2008 when the whole issue first arose and warned each of my Congressmen, Senators and their staffers that the first thing that would happen with out taxpayer bailout money is that the executives would pay themselves royally. Yet, still, no safeguards were put in place for your FEDERAL REPRESENTATIVES to act in a good fiduciary role with regards to YOUR money. And, so NOW, in February 2009, we have a new president, Obama, who has shown the light after the fact on the situation and chastised these greedy executives on Wall Street.

I hope that the American people, Red or Blue, Black or White or Brown, all have a problem with this. Let me explain. The fundamental issue at hand initially was that Wall Street was crying after the failure of Bear, Sterns and Lehman Brothers that URGENTLY they were going to be out of funds for operation and go belly up within seconds, hours, days...if they didn't get their share of TARP money ASAP. So, they threatened that ALL of Wall Street would be unemployed imminently and America would be in further financial crisis PLUS an unemployment level unprecedented in the last 20 years. OK, so Congress and the Senate let the then Treasury Secretary dole out funds to these Wall Street Guru Lobbyists who told us that giving them this bailout money would start lending in the USA again, preserve jobs across the board of industries in America because lending would again be free flowing, and that would be the end of the need for bailout money and the solution to the Holy Grail.

DID YOU BUY THAT LIE??? Our then Secretary of the Treasury, himself a former Goldman Sachs senior executive, INSISTED that this would be the answer. And so it was......the first bailout tranches have all been spent. So, do YOU have a clue where that money went? Below are some details provided by AP researchers from Federal Documents about how the first bailout was spent.

The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. Some trimmed their executive compensation due to lagging bank performance, but still forked over multimillion-dollar executive pay packages. The AP review of federal securities documents found that these benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, health club benefits, and, get this, FINANCIAL PLANNING!

"The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines. The AP compiled total compensation based on annual reports that the banks file with the Securities and Exchange Commission. The 116 banks have so far received $188 billion in taxpayer help. Among the findings:

The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

Lloyd Blankfein, president and chief executive officer of Goldman Sachs, took home nearly $54 million in compensation last year. The company's top five executives received a total of $242 million."

The AP also reported that this year, Goldman will forgo cash and stock bonuses for its seven top-paid executives. They will work for their base salaries of $600,000, the company said. Facing increasing concern by its own shareholders on executive payments, the company described its pay plan last spring as essential to retain and motivate executives "whose efforts and judgments are vital to our continued success, by setting their compensation at appropriate and competitive levels." Goldman spokesman Ed Canaday declined to comment beyond that written report. Goldman, a New York-based company on Dec. 16 reported its first quarterly loss since it went public in 1999. It received $10 billion in taxpayer money on Oct. 28.

Even where banks cut back on pay, some executives were left with seven- or eight-figure compensation that most people can only dream about. Richard D. Fairbank, the chairman of Capital One Financial Corp., took a $1 million hit in compensation after his company had a disappointing year, but still got $17 million in stock options. The McLean, Va.-based company received $3.56 billion in bailout money on Nov. 14.

John A. Thain, chief executive officer of Merrill Lynch, topped all corporate bank bosses with $83 million in earnings last year. Thain, a former chief operating officer for Goldman Sachs, took the reins of the company in December 2007, avoiding the blame for a year in which Merrill lost $7.8 billion. Since he began work late in the year, he earned $57,692 in salary, a $15 million signing bonus and an additional $68 million in stock options. Like Goldman, Merrill got $10 billion from taxpayers on Oct. 28. Oh, let me add that John Thain was recently thrown out on the "Street" by his new boss, Bank of America and because of Thain and other Merrill executives' compensation packages which were quickly dished out prior to the close of the B of A merger. Merrill sucked so much out of the company that they drove into the ground that Bank of America came back to the taxpayers and got another $20 billion dollars worth of rescue money from YOUR TAXPAYER PIGGYBANK to make up for Thain's boys payout day. We won't even talk about the close to $100,000 renovations Thain did recently to his Merrill executive office as that is old news by now. According to press sources, he now says he'll now pay back the renovation costs. Show us the check, we'd love to see it!

The AP review comes amid sharp questions about the banks' commitment to the goals of the Troubled Assets Relief Program (TARP), a law designed to buy bad mortgages and other troubled assets. Last month, the Bush administration changed the program's goals, instructing the Treasury Department to pump tax dollars directly into banks in a bid to prevent wholesale economic collapse.

The program set restrictions on some executive compensation for participating banks, but did not limit salaries and bonuses unless they had the effect of encouraging excessive risk to the institution. Banks were barred from giving golden parachutes to departing executives and deducting some executive pay for tax purposes. The AP reports that, "Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners." AP also reports that, "at Bank of New York Mellon Corp., chief executive Robert P. Kelly's stipend for financial planning services came to $66,748, on top of his $975,000 salary and $7.5 million bonus. His car and driver cost $178,879. Kelly also received $846,000 in relocation expenses, including help selling his home in Pittsburgh and purchasing one in Manhattan, the company said." Further review of the federal documents showed the AP that, "Goldman Sachs' tab for leased cars and drivers ran as high as $233,000 per executive. The firm told its shareholders this year that financial counseling and chauffeurs are important in giving executives more time to focus on their jobs. And, JPMorgan Chase chairman James Dimon ran up a $211,182 private jet travel tab last year when his family lived in Chicago and he was commuting to New York. The company got $25 billion in bailout funds. Banks cite security to justify personal use of company aircraft for some executives."

ARE YOU MAD YET AMERICA? WHAT HAPPENED TO THE RESULTS PROMISED TO YOU IN THE JOINT STATEMENT FROM BOTH PARTIES ANNOUNCING THE DISHING OUT OF YOUR FUNDS??? WHAT HAPPENED TO THE RESULTS THAT SECRETARY OF THE TREASURY, HENRY PAULSON, THE FINANCE GURU, PROMISED YOU WOULD RIGHT THE FINANCIAL WOES OF AMERICA??? ALLOW ME TO TELL YOU WHY IT FAILED. I'LL GIVE YOU THE SAME REASONS NOW THAT I GAVE MY REPRESENTATIVES IN THEIR LETTERS LAST FALL:

1. You have the financiers from Wall Street who bought up pooled bad assets without questioning them and traded and bought for their own accounts, derivative products that few of their employees even truly understand without ever analyzing the underlying assets, as the ones dictating to the Treasury what exactly it will take to get everything back on course? Do you allow a candy thief back into the candy store to be in charge of it and dictate its policies?

2. Americans should seriously question whether our Treasury Secretary, Paulson, and his assistant in charge of executing the program, both former Goldman employees can have "clean hands" and "unbiased intentions" while handing out ENORMOUS chunks of money to their former, and perhaps again future, colleagues as they quickly execute this free-for-all at the end of the Bush administration without many if any Congressional guidelines within which to operate.

3. Without guidelines for use of these bailout proceeds, it was obvious to me that the Wall Street "save me first" mentality would be predominant, and was. So, the shored up the capitalization of their firms and overcompensated their executives yet again. After all, wouldn't it have been reasonable to expect that EVERY employee left on Wall Street at a firm that received bailout funds would have the grace and pleasure of getting paid ONLY his/her regular salary in light of the fact that they came with hats in hand begging to the taxpayers for money?? Gee, there's a thought. After all, Wall Street Lobbyists came begging saying that if they didn't get the bailout funds, ALL these gurus would be unemployed. So, seems reasonable that having a job and having a salary and using the bailout funds for LENDING again would have been very clearly the MANDATE in this situation, right? How come, Joe Average is the only one who sees it this way??? Ethics are so warped in this entitlement atmosphere of Washington and New York City that without very clear guidelines, no money should have been given in this bailout.

4. What's the worst case scenario if these banking institutions failed? Your bailout money would have been used to pay the new $250,000 level of FDIC claims on individual banking deposits. In addition, money would have been left over to be lent to those needing working capital in QUALIFYING small and medium businesses that really need it to legitimately stay in business to turn a profit. Money would have been there to lend to QUALIFIED homebuyers, not to LIARS with LIAR LOANS NINA's).

THE REALITY IS THAT AMERICA NEEDS A NEW PARADIGM FOR ITS ECONOMY. BAILOUT NUMBER ONE WAS A PREDICTABLE FAILURE. BAILOUT NUMBER TWO IS SO FAR OFF THE MARK OF ANYTHING THAT CAN KEEP YOU OFF THE UMEMPLOYMENT LINE OR OFF WELFARE OR FROM BEING WITHOUT HEALTH INSURANCE THAT IT IS A FORESEEABLE, MORE EXPENSIVE FAILURE. WE CANNOT ASPIRE TO GO BACK TO THE IMAGINARY LEVEL OF DRUNKEN PROSPERITY THAT WAS PURCHASED WITH DEBT AND THEREFORE NEVER A REALITY! BUYING WORTHLESS ASSETS AND MAKING THE AMERICAN PEOPLE RESPONSIBLE FOR THEM STILL SHOULD NOT HAPPEN. LET THE LOSING BANK BUSINESSES FAIL -if these Wall Street executives are so knowledgeable and so capitalistic, they would not be CAPITALIZING ALL THE PROFITS AND THEN SOCIALIZING ALL THEIR LOSSES UNTO THE AMERICAN PEOPLE. SORRY BOYS, YOU CAN'T HAVE IT BOTH WAYS. Either you are a capitalist, in which case you should receive no bailouts and fail on your own merits according to Adam Smith's doctrine, or be socialized and let the Federal Government lend the money directly so at least it doesn't line the undeserving failed guru pockets while leaving Americans worse off. As a capitalist, I think they should fail. Capitalist doctrine is Darwinistic in its belief that successful economic paradigms will sustain themselves without government intervention. If they fail, I predict that many of the Wall Street gurus will form their own firms and market the next new capital markets product to the unaware just like they did when they left major firms to start hedge funds. While it is simply wrong to reward failure according to American work ethic, but it is criminal to do it with taxpayer money and all funds that were awarded personally to these failed employees, not just executives, should ALL be clawed back into the American people's Treasury.

Submitted by ASO member: Kimberly Wilcox

Leader Boehner: Featured Blogger

“Stimulus” Should Unleash America’s Potential – Not Government’s Appetite for Pork

On Friday, the Bureau of Labor Statistics reported more troubling news that the American economy is falling deeper into recession. In January, nearly 600,000 Americans lost their jobs, bringing the unemployment rate to 7.6% and the total number of jobs lost since the recession began to 3.6 million. These are troubling numbers. American families are hurting, businesses are closing, and more jobs are in jeopardy. The American people are looking to Washington for leadership to get the economy moving again – and so far, Congress has let them down.

When President Obama called on Congress to produce bipartisan legislation focused on immediate job creation and fast-acting tax relief, the Democratic controlled Congress responded by passing a trillion-dollar spending bill focused on slow and wasteful spending that won’t create jobs. In the end, the only thing bipartisan about the bill the House passed was the opposition to it. All 177 Republicans and 11 of our Democratic colleagues voted against the “stimulus” package.

Republicans and Democrats have asked questions about the “stimulus” package that the Democratic leadership has been unable to answer:

How is $50 million for the National Endowment for the Arts or $650 million for digital-TV coupons going to move Americans out of the unemployment line?

How will spending $20 million for the removal of fish passage barriers, or $85 million for polar icebreakers, or millions of dollars for global warming research put struggling workers back to work?

Some estimate that nearly three-fourths (70 percent) of the spending in the House-passed bill is “non-stimulative” and won’t create jobs. The Congressional Budget Office says that most of the money in the $1 trillion bill won’t be spent until after 2010, when many economists believe the economy will already be on the road to recovery.

And of course there’s a more fundamental question: how are we going to PAY for all this new spending?

The metric that the President’s Director of the National Economic Council, Larry Summers, has used to describe what a successful economic recovery package would look like is one House Republicans agree with: it should be “timely, targeted, and temporary.” Congressional Democrats have failed on all three counts. In baseball, that would be a strikeout.

Between the “stimulus” spending package and other spending ambitions held by the Democratic Party, “it seems likely that the deficit for this year will approach $1.7 trillion,” American Enterprise Institute scholar Kevin Hassett notes. “If your family income in 2006 was between $75,000 and $100,000, the extra taxes that you will have to pay at some point in the future [as a result of the additional borrowing by Congress] add up to about $14,000,” Mr. Hassett says.

The hundreds of billions of dollars Washington is borrowing to finance this pork-barrel monstrosity will come from our children and grandchildren. This is not “stimulus” – it’s generational theft.

On the opening day of the 111th Congress, I pledged that the House Republicans wouldn’t just be the party of “opposition,” but the party of “better solutions.” The President asked for Republican input on his proposed “stimulus” initiative. In response, I asked Rep. Eric Cantor (R-VA), the House Republican Whip, to convene a “solutions group” on the economic recovery effort to craft some recommendations that could be considered by the President.

The Cantor-led solutions group came up with a “smarter, simpler” plan. Our plan would create twice the jobs at half the cost as the Democrats’ “stimulus.” It has five components: 1) Immediate Tax Relief for Working Families, 2) Help for America’s Small Businesses, 3) No Tax Increases to Pay for Spending, 4) Assistance for the Unemployed, and 5) Stabilizing Home Values.

Our solution is quite different from the plan written by Congressional Democrats. It recognizes that the engine that drives the American economy is the American people – not government spending. Freeing up Americans to invest, save, and spend more of their own money is at the core of our proposal.

As I said on the opening day of the current Congress, America’s potential is unlimited; government’s potential is not. We must not confuse the two. We can’t simply spend our way back to prosperity. Our responsibility as elected leaders in a flagging economy is to craft policies that allow our country’s potential to be unleashed. America runs on freedom. It’s the fuel of our economy and the fuel of our democracy. The more we spend and borrow, the less freedom we and our children and grandchildren will have left.

Our nation is in recession. Families are struggling. We owe the American people a responsible, bipartisan bill that will protect and create American jobs. To date, Congress has failed to get the job done.

“Buy American” Could Buy Trouble

The $825 billion stimulus bill making its way through Congress includes certain “Buy American” requirements that may jeopardize the stated purpose of the legislation by exposing the United States to retaliatory trade actions that could further aggravate our economic malaise.

Provisions of the House bill (the “American Recovery and Reinvestment Tax Act of 2009”), which passed 244-188 on Wednesday, obligate public works infrastructure projects funded by the stimulus legislation to use only American-made iron and steel. The House Buy American measures specifically include projects involving airports, bridges, canals, dams, dikes, pipelines, railroads, multiline mass transit systems, roads, tunnels, harbors, and piers. A Senate version reportedly goes further, requiring most stimulus-funded projects include only American-made equipment and goods.

At first glance, the concept seems attractive. All things being equal, why wouldn’t one naturally choose U.S.-sourced goods and inputs? Wouldn’t such an attitude also present an attractive means of helping along our faltering economy? After all, government procurement represents a very significant portion of the economy, often 10-15 percent of GDP.

Government procurement is a significant aspect of international trade. Open, transparent and non-discriminatory procurement is generally considered the most economically efficient model for government procurement since it bolsters competition among potential suppliers, regardless of their location. However, it seems that little consideration is given to the potential free market efficiencies that will be lost through the proposed legislation.

More importantly, legislators have included the Buy American language despite the objections of the U.S. Chamber of Commerce and other business groups which rightly note it would set a bad example for other countries considering their own economic stimulus plans. In other words, the proposed Buy American legislation in the stimulus bill could spark a global trade war with consequences not unlike the give-and-take protectionism that prevailed in the 1930s, and which had a cascading effect that crushed global trade and turned a one-year recession into the Great Depression. As the Chamber notes, “Since 95% of the world’s consumers live outside the United States, American workers would be the first to suffer as “Buy American” provisions trigger retaliation by other countries (that is, “Buy German,” “Buy Chinese,” and so on).”

The Buy American requirements may also be inconsistent with respect to U.S. commitments on government procurement within the World Trade Organization (WTO). European Union officials have already signaled a likely challenge of the provisions if they ever become law. The WTO dispute settlement system includes provisions for compensation and retaliatory measures to counter market access restrictions like the proposed Buy American provisions that would only intensify the protectionist tendencies underscoring them.

Congress should reconsider its options before committing itself to a course of action that previously sparked a global trade war that devastated our economy for a decade or more. Congress must eliminate the Buy American requirements from the stimulus bill.

Submitted by ASO member: John Kalitka

Mark Salter: Featured Blogger

Bipartisanship and Its Pretenders.

The growing center of American political opinion disdains, and rightly so, the puerile bluster and incivility often employed in the practice of politics. That sentiment stongly influences the new President's governing style, expressed in his prudential inaugural address, and his graceful moves to woo the opposition and impress the voters by paying a friendly respect to the station, if not always the views, of Republican office holders and conservative opinion leaders.

President Obama has a wily -- and I use that adjective admiringly -- sense of how to appear in perfect accord with the sentiment of a majority of the public that perceives in partisanship a root cause of the various economic ailments afflicting the country, and the lack of progress toward remedying them. He has done so by being genuinely agreeable in the company of Republicans and appearing patient with their assertions of honest policy differences, without yet hazarding the more complicated work of incorporating any Republican prescriptions into the current fiscal policies of his administration as written into law by Democrats in Congress. Although, it’s fair to note, he has managed to dissuade House Democrats from persisting in a couple of their more politically maladroit maneuvers, recognizing the jeopardy they posed to passage of his stimulus bill. (Taxpayer funded birth control may indeed stimulate activity but, alas, not much in the nature of immediate economic activity beyond, perhaps, the purchase of flowers and a nice meal.)

We are not yet two weeks into his administration, but President Obama has swiftly exercised the enormous political talent that won the presidency by using his considerable charm and graciousness to aggrandize an economic stimulus bill that is unique only for its immense size and otherwise quite common in its appetite for unproductive and, in many respects, injurious government spending and policymaking, into a much desired break with those dreaded “failed policies of the past” (would that America might live to see the day when any failed government spending policy is consigned forever to the past). He understands that if you can’t have bipartisanship in the realm of policymaking a spirit of civility and an advertising wizard’s creativity in marketing the old as new will do in a pinch.

In the hands of clumsier politicians, of course, such attempts at stylistic camouflage can come off quite comically. Witness Speaker Pelosi bumptious entrance into the new spirit of “partisan ambitions be damned; let’s get on with the people’s business.” After ramming through the House of Representatives without a single Republican vote a stimulus bill that harbored a great many objects of liberals’ pent up desire for government command of our economy, she protested her complete innocence as a Democratic party leader:

“I didn’t come here to be partisan. I didn’t come here to be bipartisan. I came here, as did my colleagues, to be nonpartisan, to work for the American people, to do what is in their interest.”

This news that the Speaker has risen above not only the implied vice of partisanship but the assumed virtue of bipartisanship will come as a surprise not only to Republicans in Congress, but to her liberal constituents, residing, as they do, in one of the more strenuously partisan congressional districts in the country.

Obviously, few in Washington, in either party, share the President’s adroitness at helping bad medicine go down tastefully by making civility appetizing enough for a public that thinks it’s hungry for bipartisanship, though many give it their earnest all. Even some of the keenest preachers of bipartisanship have abandoned their fondness for the notion in favor of the “being nice is good enough” school of advancing their governing agenda. The genial E.J. Dionne regularly used his perch on the op-ed page of the Washington Post to beseech Republicans in the years of their ascendancy to show more respect when tackling big national problems for the ideas and patriotism of the Democratic minority. Lately, he prefers a more tactical approach to cross-aisle comity. He laments the President, having treated Republicans nicely, received not a single one of their votes for the House passed stimulus bill, and, henceforth, he argues – and I’m putting it more vulgarly than E.J. ever would – the President should say “screw em,” and get on with the urgent task of expanding the welfare state.

There is confusion, in Washington and in the country at large, at the heart of this discordant and antique reality that remains lodged so firmly in the new era of hope and change.

Bipartisanship requires, irreducibly, a giving in and a standing by. That is the obvious nature of political compromise. Each side must bend their principles a little to accommodate those of the other side in exchange for preserving in whatever compromise policy results a respectable measure of those principles. It is tricky work that consumes enormous effort, to say the least. Naturally, given their possession of the White House and majorities in Congress, Democrats rightly expect to give in less and stand by their principles more than Republicans will, but give in to some extent they must if the President is, in fact, to employ bipartisan problem-solving in this our “winter of hardship,” as he aptly put it in his inaugural address.

Incivility has been one of the drearier qualities of political debate in the last twenty years or so, and it breeds personal animosities that bedevil even the sincerest efforts at political compromise. Both parties share in the blame for its occurrences, but it is not a partisan or institutional failing. Discourtesy never is. It is an entirely personal vice, which, when committed frequently by many individuals in a given profession, can falsely appear to be a flaw in that profession. The President’s genuine efforts to summon the better angels of our personal nature and his recognition that in this argumentative, heterogeneous society we are still bound closely together by the self-evident truths that are the basis of our political kinship are admirable. But civility is not now nor has it ever been a substitute for bipartisan policy accomplishment and the giving in and standing by it requires. It is simply good manners, and like good manners in any profession it smoothes the path to cooperation, but does not provide the hoped for product of that cooperation.

Republicans should never have been expected to endorse a free-for-all spending bill that substitutes the appropriators’ instinct for achieving occupational security at great public expense and Democrats’ faith in the virtues of big government for the most efficacious laws of free markets and free people. A truly bipartisan economic stimulus bill might have included more spending on public works than fiscal conservatives usually find advisable, given the inflation and higher interests rates it causes, in exchange for ensuring that the spending is, as some wise Democratic economists have urged, of reasonably short duration and actually stimulative. Or it might have permitted some of what Republicans judged nonsensical long term spending, and Democrats see as farsighted “investments in the future” in exchange for embracing the politically inconvenient but provably true conviction that reducing taxes on American businesses will do infinitely more good for the American people than handing them a check for $500.

Those are the kind of hard to swallow compromises that bipartisanship in deed and not just in name demands. Without it, we can surely still treat one another sociably, politely, respectfully as President Obama and Democratic majorities in Congress impose on the country a great many ineffectual or potentially ruinous fiscal policies. But button up your overcoat. This winter of hardship could last a while.

Submitted by ASO member: Mark Salter

Orson Swindle: Featured Blogger

"It's like deja vu all over again"
...Yogi Berra New York Yankee
Baseball Hall of Fame

The Obama and House Democrat "economic stimulus" package is a train wreck looking for a place to happen. Should it be passed by the Senate and signed by the President, that "place" will be on the shoulders of future generations of Americans.

If past is prologue, our experiences tell us the package will do far more harm than good by growing government, raising taxes and wasting money. Once in place, a larger government will be difficult to trim.

The Pelosi-Obama package is primarily a huge expansion of government and Democrat control of that government. There is little immediate stimulus in the package. It is a payoff to many who supported Obama and the Democrats in last year’s election. Unions, special interest groups and existing government programs will benefit, not to mention a thinly veiled list of non-stimulus and wasteful earmarked appropriations for Democrat members of Congress. Didn’t Obama tell us that earmarks would be resisted in his new world of “hope and change”?

Hundreds of economists have attempted to remind the President that this kind of spending does not work. It did not work to pull the country (and the world) out of the Great Depression in the 1930s, nor did it work for Japan in the 1990s. The New Deal of President Franklin Roosevelt and The Great Society of President Johnson gave us much larger government, higher taxes and government controlling more and more of our lives.

In their well-propagandized pledge to listen, to welcome Republican ideas and work together, House Speaker Nancy Pelosi and the President have deceived the public. It sounded good; but apparently, they really did not want to hear nor did they want the input if it differed from theirs. As the President said recently, “I won.” So much for working together. The obscene House stimulus bill received no Republican votes for good reason.

As Assistant Secretary of Commerce for Economic Development for President Reagan in the late 1980s, I dealt with the aftermath of a dreadful “ economic stimulus” package by another Democrat Congress and President of the late 1970s. The Economic Development Administration, a creation of the Great Society programs of President Johnson, was expanded during the Carter Administration from a relatively small (hundreds of millions), highly questionable agency to one of over $6.5 billion under the “Local Public Works” economic stimulus program. It was a disaster, an enormous and shameful waste of millions of dollars.

That experience three decades ago ought to serve as a painful reminder of what government should and should not do. This kind of stimulus does not work. Overcoming the Carter Recession and ineffective economic policies required tax cuts, downsizing government and a strong leader and president wise enough to do it, and that was President Ronald Reagan.

Yogi Berra’s quip is so appropriate today. Have we learned nothing?

Each day the President speaks of dire consequences if Congress does not quickly approve the Democrat stimulus package (perhaps before we all figure it out.) The familiar Obama talent for appealing to emotions rather than reality is in full swing.

For certain, we have economic problems as credit tightens, consumers trim spending habits and hunker down in fear. Under the cover of addressing these serious problems, Obama and the Democrat congressional leadership seek to change the economic and social structure of our country, a structure that will be more socialistic with them in charge. They want to overpower wisdom and experience with the emotions of fear and their promised “hope and change”. Those who elected Obama are now being asked to pressure Senators for quick passage.

If Obama succeeds in this charade, be very concerned.

No Republican Senator should vote for this stimulus bill. You can help them to understand the lessons of yesterday’s experiences and be steadfast rather than give in to the emotional ploy of today. They need courage. America, speak on!

Submitted by ASO member: Orson Swindle

Orson Swindle served for eight years with the Reagan Administration, the last four as Assistant Secretary of Commerce, and recently, over seven years as a Commissioner at the Federal Trade Commission. A career Marine Corps officer and fighter pilot, he was a prisoner of war in Hanoi, Vietnam for over six years.

The Government's Role in the Economic Recovery: A Partner, Not a Sponsor

The Washington Post reported last week that the President hasn't ventured beyond a four mile radius outside the White House since January 20th and the opponents of the economic stimulus bill couldn't be happier about it. By staying inside of Washington since his inaugural, the President has missed an opportunity to create public support for his stimulus package. There's one honeymoon per marriage, and he's blown his by relying on Beltway insiders to move the stimulus bill ahead

The new White House photographer, Pete Souza, should put his camera down and provide the President with some advice from another President that Souza worked for – Ronald Reagan. Reagan and company – Deaver, Meese, Rollins, Nofzinger et al understood all too well that public acceptance of legislation or public policy debuts had to happen beyond the opposite ends of Pennsylvania Avenue.

There are a multitude of “sets” President Obama could have visited to connect with the American voter on why the stimulus bill should be passed, and many of these locations are demonstrative of how jobs can be created when the private and public sectors work together. On second thought, perhaps that’s the reason the President didn’t visit these spots – because they represent Government as a partner, not a sponsor, of job growth.

Some of the best examples of public-private economic development partnerships can be found in University Research Parks. The parks have been around for years and have paid huge dividends to the regions where they are located. Economic cross pollination between graduates, entrepreneurs and venture capitalists combined with the intellectual horse power of the university scientists and professors create an environment where small businesses are created and thrive. Government money provided to the parks has been spent wisely and evenly – with outcomes and deliverables clearly measured.

Speaking of the Gipper, he would have loved the New Orleans Bio Innovation Center as a speech backdrop. A consortium of LSU, Tulane, the University of New Orleans and Xavier University, the center’s Technology Business Incubator has successfully stimulated entrepreneurial bio science companies in an area devastated by Katrina. The bio sciences field is growing at a pace comparable to the health care industry and higher skilled, higher paying jobs are being created right along with the growth.

Another Reagan-esque speech site is the University of Toledo’s Science and Technology Corridor project. Research, development and business generation in the corridor has focused on exploring alternative energy development. Toledo, long swaying in the economic doldrums, is coming alive again with young entrepreneurs creating spin-offs that support research into alternative methods of powering the United States well into the next century, without the need for foreign oil.

Both sites are excellent examples of long term, coordinated economic development collaboration between Universities and their surrounding regions, primed by well managed government funding seen as seed capital, not a bottomless pit of funding. Greenhouses of innovation and competitiveness, these parks are helping regional economies co-exist and thrive in the broader, world-wide economy.

The President had some tailor made examples of economic stimulus projects he could have spotlighted with a personal visit had he chose to. The facts and pictures would have spoken for themselves, and voters would see what public/private partnerships are capable of. The fact that he didn’t take advantage of pre-existing and successful models could signal a vision for economic recovery that trades sheer volumes of unfettered taxpayer money rained upon programs (and yet to be created programs) with little practical thought.

Submitted by ASO member: Matthew E. Crow

The Stimulus Package – designed by worshippers of government

Check out this editorial from the Wall Street Journal on the so-called stimulus package: http://online.wsj.com/article/SB123310466514522309.html

I don’t know about you, but reading this kind of breakdown of what’s in that beast made me a little sick to my stomach. It looks to me like this bill was written by people who really love government, who think government solves all problems, and don’t have a clue about how the free-market economy works.

We are still a free-market economy, right? Gulp. Right?

Submitted by ASO member: Jean Card

The Bailout

247 to 188; these are two numbers we should keep in mind over the upcoming months and years.

Other than immediately attempting to remedy our Nation's current financial challenges, one of President Obama's most sought after goals as our new leader is to bridge the ever growing partisan divide. Say what you may about the new Administration's economic stimulus package, but I believe its secondary mission to begin the healing process between the left and right missed the target altogether. The aforementioned tally paints an ugly yet clear picture; on top of 11 Democrats, not one Republican Congressperson voted for the stimulus plan. It seems that these 188 Representatives see that the truth lies in the bill's attempt to cement the Democratic stranglehold on Washington D.C. for the next generation.

So, what's next? If this attempt doesn't turn around the struggling economy in the near future, what will President Obama and his allies present as their next solution? History tells us that they will come back with a second similar bill, with an even higher price tag. And, if this pattern continues, the real question we as American citizens need to ask ourselves is "Is this the change we believed in or is this just FDR reincarnated?" Personally, I hope this is just me playing devil's advocate, but any student of history should know that the Great Depression did not end as a result of huge government outlays.

Submitted by ASO member: The Philadelphians