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This will be the fourth time that I’ve written about this (12/3/08, 12/11/08 and 3/17/09) and I’m thrilled to see it on the pages of the Wall St. Journal.  Senator John Thune of SD, wrote (emphasis mine):

Our financial markets are no longer in free fall and the crisis has receded. Yet we now find ourselves in a troubling situation where the federal government is a major owner of more than 600 U.S. financial institutions and banks, as well as two auto makers, an international insurance conglomerate, and numerous other businesses…It is time to bring an end to the TARP emergency measures and come up with an exit strategy to get government out of the business of running businesses.”

Hear, hear.  The US Government has no authority to own parts of private businesses.  It did what it had to do (even if I was uncomfortable with it at the time) to keep the economic system afloat, but now that time has passed.  It’s time to divest.

It’s all over the news these days, even CNN.  Obama’s popularity is falling and his unfavorable numbers are rising.  He’s facing large problems ranging from unemployment, war in Afghanistan, his health care initiatives, and a plodding economy.  If he doesn’t change course soon, I wouldn’t be surprised to see his favorability ratings slide further.

Here’s how I think we got here.  First, Obama came in to office with huge momentum, hope and an overall belief that change was good.  He immediately went about campaigning for his stimulus program.  Since it was so large and so controversial, he had a difficult job to sell it.  He did so by talking down the economy.  In an op-ed back in February, 2009, Obama wrote:

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

Translation:  pass the stimulus or we’re screwed.  Essentially, his comments added to the overall belief in a poor economy and violated his campaign trademark:  Hope.  One thing I learned from my economics classes back at ol’ Skidmore was that the economy is heavily influenced by opinion and psychology.  If you feel things are good, they probably are.  Same thing for a bad outlook.  As head cheerleader, the president didn’t help.  So, once the stimulus passed, Obama moved on to health care and started pushing massive changes to the system.  The issue at hand, however, is still the economy.  That’s the biggest problem the country is facing.  Obama hurt himself by firmly establishing the belief that things were so bad that it’s taking a long time for things to get better.  Perhaps unwittingly, he destroyed hope.

So here we are in September, 6 months after the stimulus and the numbers don’t lie.  Things are, by far, worse than they were. The economy may be a turning a corner but it hasn’t yet.  I just got a news update via email saying that back-t0-school sales across the country fell flat and that sales numbers are down.  Not good.

Today’s WSJ has a column by Karl Rove in which he writes:

Mr. Obama’s problems are legion. To start with, the president is focusing on health care when the economy and jobs are nearly everyone’s top issue. Voters increasingly believe Mr. Obama took his eye off the ball.

In addition, Mr. Obama is trying to overhaul health care without being able to tap into widespread public unhappiness. Nearly nine out of 10 Americans say they have coverage—and large majorities of them are happy with it.

That’s exactly right.  The biggest issue at hand is the economy and jobs should be the number one priority.  Yet, Obama is seemingly 100% focused on health care reform.  Guess what?  If someone unemployed gets a job, they typically get health care and as the polls show, they’re typically happy with it.  This puts Obama in a catch-22.  If the economy gets better, jobs will follow and health care will become less of an issue.  If the economy doesn’t get better, Obama can push health care, but his favorability ratings will continue to fall because the unemployed can’t get jobs.

In the end, this tells me that there has been a strategic error made in pursuing health care reform.  I don’t want to write about the pros and cons of the various proposals out there (at least in this post), but would suggest that it should be shelved temporarily so that he can turn the economy around.  He needs to start being the head cheerleader and be relentlessly optimistic.  Use the bully pulpit to start highlighting economic success around the country.  If he does that, he’ll be seen as the leader of the economic turnaround and you’ll see his popularity rise.

The health care debate is raging in this country and a key part is how to pay for it all.  President Obama believes a big chunk of the cost savings can be achieved through “cutting wasteful spending“.

“The President is dedicated to restoring a sense of fiscal responsibility in Washington, which is why his plan will be deficit-neutral. He explained that by simply cutting wasteful spending, we can pay for 2/3 of health reform right there.”

Color me skeptical.  There have been various cost estimates bandied about, but for the sake of argument, let’s use $150 billion annually.  Two-thirds of that is $100 billion, which is not a small sum.  How can we get to that much savings?  Today’s Wall St. Journal has an article about the $102 million in savings that the entire government has found through such exercises as:

• Emailing daily press clips rather than printing
• Not immediately repainting cars upon purchase
• Deleting unused email accounts
• Turning off unused telephone lines
• Putting more people on flights
• Printing on both sides of a piece of paper
• Getting news online for free rather than print subscriptions

Is this a joke?  Our government hasn’t ALREADY implemented things like this?  So, the same massive organization that just figured out that unused telephones and immediately painting new cars is costly will be able to save $100,000,000,000.00 annually in health care?  Can you seriously tell me that and keep a straight face?  It doesn’t make any sense to believe that we’re going to see massive savings in spending by bringing in millions of more people under the government’s health care umbrella.  Obama just said, “The biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid.”  If that’s the case, prove that costs can be cut there BEFORE tinkering with the health care of millions of other Americans.

As everyone knows, today is April 15, Tax Day here in the States.  This year we have the grassroots phenomenon known as The Tea Parties.  There is a ton of news and criticism about these events happening around the country and I thought I’d add my two cents to the conversation.

• The Boston Tea Party – The modern day Tea Parties have the symbolism all wrong.  The actual event in Boston was a seminal event in American history and the culmination of anger against “taxation without representation”.  The British monarchy was taxing tea and the colonists had no one to represent their interests.  Today’s events are about taxes, the deficit and the national debt all being too high.  The 2009 version is completely different, has very little to do with the original and has a confusing message.  It also comes across as being anti-Obama for the sake of being anti-Obama rather than a principled disagreement with the policies.  The symbolism that it does highlight is that oh so unfortunate tea bagging visual.  It’s crude and allows those on the opposite side of the debate to have a very effective and humorous counter.
• Fox News – I’m a fan of Fox News.  I honestly feel that they are fair and balanced.  Yes, they do come at most everything with a tilt to the right (everyone else except C-SPAN comes with a leftward tilt), however, they almost always show both sides.  Conservatives are balanced with liberals and that’s how it should be.  Well, lately, I think they’ve lost their way.  They’re still much more equitable than other news outlets, but their standard has dropped.  Not replacing Colmes when he left Hannity and Colmes was the first step.  What happened to the balance?  Now it’s just one-sided.  As for the Tea Parties, I really feel Fox News has promoted rather than cover them.  By hawking the appearance of various folks at events around the country and shilling that they would be happening, they’ve taken a side.  This is different from having the anchor approach a situation from the right.  Everyone brings some kind of bias to the table.  In this case, they advocated for the Tea Parties.  In my opinion, that’s wrong and they should go back to being truly fair and balanced.
• MSNBC – Their biggest celebrities have made lots of on air jokes about tea bagging and I don’t mean the parties.  Isn’t there a line that shouldn’t be crossed?  Isn’t this phrase something that doesn’t belong in mainstream news?  It’s not appropriate.  I’m not a prude, but I tend to think that I have a sense of civility and boundaries on what should be discussed in the public arena.  Leave this kind of trash to the Daily Show or late night comedians.

Frankly, I hope these Tea Parties don’t became an annual event.

Before I lost my job, I had been saying, “I’m choosing not to participate in the recession.”  It was working out OK for a while, but it seems to have caught up with me.  Now that I have a lot of free time on my hands, I’ve had the opportunity to do more thinking.  One item that’s been in the news a lot lately has been the “stimulus package” being touted by the Obama administration.  Should we do it or not?  I decided to take a critical business perspective by reviewing the White House’s cheat sheet.

First, what’s the goal of a stimulus?  My interpretation is the immediate creation of jobs to halt the tide of rising unemployment.  With that goal in mind, here are the cheat sheet bullet points (taken verbatim from here).  The italics are from the document, plain type is mine.

• Creating or saving 111,300 jobs over the next two years. Jobs created will be in a range of industries from clean energy to health care, with over 90% in the private sector. The document doesn’t say how this would be accomplished.  If someone came to me with a new product idea and said, this will sell 100,000 units, yet they didn’t provide any evidence or back up, I would have politely asked them for more information.  This strikes me as an empty promise.  I’m not saying it’s not possible, but, to borrow a phrase, “where’s the beef?”
• Providing a making work pay tax cut of up to $1,000 for 3,230,000 workers and their families. The plan will make a down payment on the President’s Making Work Pay tax cut for 95% of workers and their families, designed to pay out immediately into workers’ paychecks. This has the potential to be stimulative.  Anytime you put more money into people’s pockets, they’re more likely to spend it.  That said, it’s not a ton of money and it’s “up to $1,000″ which means not everyone will get that much.  It’s not even a month’s mortgage payment for most middle class families.  But, a little is better than nothing.  At least it’s immediate.  This should be done.
• Making 118,000 families eligible for a new American Opportunity Tax Credit to make college affordable. By creating a new $2,500 partially refundable tax credit for four years of college, this plan will give 3.8 million families nationwide – and 118,000 families in North Carolina – new assistance to put college within their reach. This is only stimulative if you fall into a particular category.  Basically, if you have kids in college and you’re paying for it, you’ll get a break.  By the administration’s own figures, it will be stimulative for  3.7% of NC families (118,000 / 3,230,000).  If the goal of “stimulus” is to jump start economic activity, and therefore increase employment, in the short term, this certainly won’t do it.  The refundable tax credit wouldn’t arrive until taxes are filed in 2010.  This certainly is a worthy concept, it just won’t provide an economic boost when it’s most needed.
• Offering an additional $100 per month in unemployment insurance benefits to 604,000 workers in North Carolina who have lost their jobs in this recession, and providing extended unemployment benefits to an additional 128,000 laid-off workers. Here’s something that would have a direct positive effect on me.  As someone who has lost his job in this recession, certainly I wouldn’t be opposed to this, would I?  Actually, yes.  Here’s why.  If I have another $100 each month from unemployment, I’m going to buy a few things that I need.  I’m not buying a new car.  I’m not going on vacation.  I’m not buying new clothes.  I’m not replacing plants in my yard.  I’m going to watch those pennies very carefully and only spend what I really have to spend.  My consumption won’t significantly increase.  In other words, this won’t have a stimulative effect.  Having another $100 while out of work will not cause one new job to be created.  It’s a nice gesture, but I’d rather the money went to someone that would use that money to create a job.
• Providing funding sufficient to modernize at least 263 schools in North Carolina so our children have the labs, classrooms and libraries they need to compete in the 21st century economy. It’s hard to argue against things like classrooms and libraries because they are feel good items.  The question at hand is, “Is this stimulative?”  Well, it will create jobs in engineering and construction.  But when?  By the time the decision is made on which schools will get this funding, which firms will do the work, the purchase of materials is made, the new people are hired, etc., we’re looking at 6-9-12 months or longer down the road.  Frankly, that’s too late.  One might also argue that since the construction industry is so slow right now, this may simply take the place of home construction.  In other words, will this spending crowd out private construction?  I don’t know but it’s clear this isn’t stimulative in the short-term.

So, should we do it?  There were 5 bullets specific to North Carolina.  One of the five would have short-term stimulus and that would only provide “up to $1,000″ for families.  I would say that this stimulus effort is a waste of time and money.

What would a proper stimulus look like?  How about rewards for creating jobs?  Offer a tax cut to every company that creates a new job.  You hire someone, you get 25% of their salary in tax reduction.  It needs to be substantial to provide the incentive to reduce unemployment.  Now, someone that costs $50,000 in salary can be hired for $37,500.  Again, the goal is to create jobs immediately.  Put the appropriate incentives in place, it will happen.

Something that this country is really lacking is civility.   January 20, 2009, was an incredible day for the United States, regardless of your politics.  The peaceful transfer of power, the breaking of a racial barrier, the pride that a large portion of our population felt, and more made the day memorable and historic.

Yet, as I cruise the internets, I’m disappointed at the images and comments that I see about Bush.  Add in the news that he was taunted with jeers and goodbye songs during today’s ceremony, and it is disappointing.

I’m not going to argue for or against Bush’s positions and record over the past 8 years, but I do believe that he is entitled, (yes entitled) to a certain amount of respect, as is EVERY ex-president, Republican or Democrat.

UPDATE:  More of the same.

One thing that has been bugging me since the announcement of the federal bailout has been “how does it end?”  Even if I’m uncomfortable with the idea of the government buying toxic assets taking equity stakes in private companies, I can appreciate that desperate times require desperate measures.  I’ve done a lot of reading about what’s happening and have tried to understand why the decisions are being made.  Not once have I seen ANY mention of an the exit strategy.

The US Government now owns equity stakes in the biggest banks and insurance companies in the country.  This has been done with the supposed intent of stabilizing the market and restoring confidence.  So what happens two years from now if the economy has turned around and things are headed in the right direction?   What does the government do with those equity stakes?  Do we cash in our chips?  If so, will the money simply be used to increase spending?  Will we retire some of the national debt?  Isn’t debt what got us into the mess we’re in now?  Maybe it would be a good idea to shrink our collective IOU.  What about a big fat check to all taxpayers?  I’d gladly pay capital gains taxes on that.

Here we are spending ungodly sums of money with no apparent end in sight.  But, for the first time, I’ve seen someone else asking the same question.  It’s good to see someone thinking straight.

When I read the first quote on Thursday, I was skeptical. By Friday, my suspicions were confirmed.

“No issue in our country is more important than finding an end to this intractable war. Completing the mission in Iraq is the president’s job, and we will do everything in our power to ensure he fulfills it.” Sen. Harry Reid, January 4, 2007.

“Rather than deploy additional forces to Iraq, we believe the way forward is to begin the phased redeployment of our forces in the next four to six months, while shifting the principal mission of our forces there from combat to training, logistics, force protection and counter-terror.” Sen. Harry Reid and Rep. Nancy Pelosi, January 5, 2007.

Why do such inane things as “macaca” and whether or not Britney Spears wore underwear dominate our news when truly unbelievable and outrageous stories get completely buried?  Sandy Berger was the National Security Advisor under Clinton and he can get away with hiding stolen classified papers under a trailer and storing these documents in his socks?

Seriously, what the f**k?

The detainment camp at Guantanamo is clearly an awful place and there is no question that the soldiers and jailers there torture its prisoners. It is a barbaric facility that serves no purpose but to harm the United States’ international interests.

Everything I wrote above has to be true. If it wasn’t, why else would the prisoners have access to books and one of their favorites be Harry Potter.