Tuesday, December 09, 2008

No strings attached.

Just want to say for the record, yea, I tend to harp on shit, in particular if it is what is on my mind. Butterah you know, such is just the way things are with me. Found out today against my dismay, that folk up on Capitol Hill finna give away some more of my loot. I was against it with Wall Street and I still maintain the same position respect to the automobile industry.

I still don’t get what the bailout will accomplish, but I won’t get into that. Let alone the massive number of Insurance companies purchasing Bank holding companies so they can get some of the loot too. I believe that one cannot rescue a person or institution that wont rescue they self. And a stock market that hit 89k mark over the past few days don’t mean jack to me for there is still no liquidity in the market, world borrowing is down nearly 80% and money still being withdrawn from Hedge fund accounts (1.5 trillion in Hedge funds world wide), tells me that these aint the average folks investing or making calls on stocks. Not to mention yesterday, from a few newspapers alone, I counted more than 12 thousand jobs lost (in one day). Just in Jan. this year the DOW was at 13k, and im posed to be happy with 8.9k?

So today, something new, instead of Alexander Onealing (critisizing), I am gonna offer a few suggestions that I would put in place if I was like a senator, a president or an economist. The first I know can’t occur, but may be used in the future when folks wanna give loot away all willy nilly.

  • If you give ANY loot out, don’t ask folks to bring you a plan, you give them your plan with a "take it or leave it” caveat.
  • For the Banks and wall street: Mandate they use the money to erase the balance of all outstanding student loans. This would be one way to foster consumer spending.
  • As opposed to buying toxic assets and injecting capital, for banks, next time you may consider really attempting to stop home foreclosure rates by buying 35% of are the mortgages in America. You don’t have to purchase the entire mortgage for that will only assist 4 to 5 million of the 50 million across the country. This would make payments manageable, improve equity in said homes. And please just don’t use Fannie Mae and Freddie Mac; make them for all home lenders. All one would need is a standard agreement (as the Treasury made with Banks) for people to apply. This would be the best foreclosure mitigation approach from my view.
  • Never let the Treasury department be in charge of stimulus or bail out programs because they don’t attach any strings. The Treasury “expects”, not know or has mandated, for banks to start lending and making credit available when in fact they did not state the manner in which funds received will be used. They say they “want” to work with congressional oversight committees and the Comptroller, but didn’t write it in so it is not a prerequisite for getting any of that massive sums of loot.
  • Instead of giving money, buy shares in exchange for my loot so these banks can own up to their share of the debt in actual cost.
  • If you are doing an infrastructure development/stimulus plan, don’t just focus on Urban areas. Be even handed with rural areas as well. It don’t sit right with me when I give money for Urban development and the bus stops at the end of the city boundary.
  • Try and structure economic preparedness in our budgetary policy like they do in India, where the work from the construct of deficit confinement. As such all the do from growth to stimulus to tax efforts are designed to manage deficit growth to 2.5% or less.
  • Study some these other stimulus packages being placed on the table around the world. I know China is putting one out worth $581 billion US/ And say study, not copy, because from what I can tell about the Chinese effort – it is lacking and don’t focus on human capital development – a no-no to me. So be sure to invest in human capital, this will increase social spending. One way would be to give 40 to 50 thousand dollar grants to people desiring to attend college for the next 4 to 5 years. Again this is an investment and not a give away. And I would be remised if I did not say jack up the investment in scientific research at the university level as well.

Now these are just a few ways I think we may see this economy swing around, it’s not about top down or trickle down - it is about bottom up. So Mr. Obama, I know your hands are tied, but you got to stop being so politically correct and think outside the box. Don’t be asking for no plans, or waiting for GM to give you no plans, make your own plan folks and tell them fools to break themselves or go home empty handed. Don’t be a pasty and stop shelling out our loot with no strings attached. Five to one the Big three gone roll through this loot and be out of business still before next Spring.

38 comments:

Urban Thought said...

The bailout will accomplish a delay in these companies folding. They need to fall on their asses, cut the salaries of the execs, cut their spending and start making sound business decisions.

If they aren't giving me any tax breaks then these corporations who've gone through billions of dollars don't deserve a hand out.

blackgirlthinking said...

I also don't agree with the bailout. These same companies will have their hands out again because they will in no way straighten up their finances.

Kayos said...

I happen to agree with the caveat. If you want this money it means you didn't know how to handle the management in the first place and you need some help. So if you want the money, you need to take this plan on how to spend it.

I also don't agree giving money you don't have. Why in the hell would you ask the government for more money when they were already in debt for a war that we shouldn't have even been fighting?!

Red Snapper said...

Well said king.

I'm in full support of your second point. I certainly need my student loan balance erased.And it's no different then kinfolk on the Westside.
>Yea Imma let you hold the stack BUT Imma need it back by this date, with this interest, point blank period. Or it's a NO GO!

Good read...........as usual.

KELSO'S NUTS said...

I think the whole thing top to bottom stinks but you know that already.

I thought I had a libertarian variant on Barney Frank and Ron Paul's first proposal on just the mortages and "toxic assets" part of it that made the world of sense.

All they had to do was present a "highly confident" letter signed by UK PM Brown averring to his being willing to extend the $1 TN credit line as needed and that a first use would be to set up an international two-way market based on the ICE in mortgage-backed US debt instruments. The market would be open the entire world with the normal "qualified investor" rules but no Homeland Security questionnaires so as to retard a deep market of willing and buying sellers.

I said that nobody in finance in South America that I knew would have any problem with a long, long foreclosure holiday on the properties -- maybe 5 years or more. I also said we'd be willing to accept very long foreclosure holidays on homes in the areas of highest unemployment or even a twinning of foreclosure-holiday grandfathered downscale property mortgage CDOs with the shorter foreclosure-holiday grandfathered upscale mortgage CDOs. EXAMPLE: If you want to buy $5 million worth of Marin and Atherton Bay Area Waterfront bonds at 37c, you have to take $5 million in Gary, Indiana, homes at 3c.

Nobody ENJOYS seeing homeless Americans. Especially not Hugo Chavez!

The construction of the secutities themselves provide some diversification protection anyway because the bonds are consructed of tiny pieces of 100s or 1000s of mortgages, so if there are a few defauts, they get covered by the majority of homeowners who DO pay.

We foreigners needed no collateral for as long a holiday as the US wanted, merely the ability to buy and sell at market prices.

That could have been done FREE to the US relying only on Brown's "letter of credit."

But the Treasury and Fed are just as bad as Al Capone and Dutch Schultz. They're greedy and sadistic.

RealHustla said...

I have no hope whatsoeva that there will ever be established any arrangement that will provide any kind of relief for me.

I'mma just have to keep living up to my name. That'll keep us fed.

ChocolateOrchid said...

Dammit, I need you to go to Washington cause these folks are clueless! I also disagree w/both bailouts. And I agree w/your points. Well said!

Glen Antoine Palmer said...

My man, erasing my student loan would be music to my ear. Not happening though.

rainywalker said...

Raw Dawg,
Who is going to stop them shelling out the money? Not Frank, Reed or any of the rest. I'm beginning to think crazy now, than greed. It's like open house at a bingo parlor. Forget the game and just take the cash.

Curious said...

Let me just take the 1st 2 points. The 1st one won't work because if you let the government draw up the plans and the compamnies still fail then who will take the blame? And who will the public turn against when they realize they will never see their money again, not like they were going to see it anyway. But who will lose their seat and actually have to work for a living when they are voted out.

The 2nd one, if you allow student loans to be completely covered by the bailout, what will stop colleges from raising the cost of education even more since they will almost be guaranteed that whatever they charge, their prices will be met now and in the future.

They say that they average cost per worker for the Big 3 is about $70/hr because of his salary and benefits and that costs of benefits to those that retired before him. This is opposed to the costs of about $40/hr to those who work for Toyota and VW and other automakers in the US.

I'm going to get back on my horse now and say, how about decreasing the costs of benefits for the Big 3 by saying "healthcare For all baby." That way, maybe GM can start making cars that cost less and maybe help bring them back to profitability.

I'm just saying that is the only industialized country in the world without universal healthcare and yet we compete with companies where healthcare is not a cost of production. How we are are still expected to remain competative is beyond me.

Jersey Girl said...

I agree. If these companies had a plan that would work to begin with, they wouldn't be in the hole they're in now. It's like giving the lunatics the keys to the asylum. How can you ask folks who had piss poor plans to give you plans that will actually work?! If they knew how to do that in the first place, they wouldn't need more money out of my pocket to fix their messes!!

I know people keep screaming about socialism, although most of them don't have any idea what it really means. Seems to me I got a big fat check from the government to stimulate the economy. I see the government bailing out private industry and buying banks. Seems suspiciously socialistic to me. But Curious is right - we are the only industrialized country without some sort of national health care system. It's each man for himself. We are beholden to lobbyists, special interest groups and any number of other groups whose business isn't healthcare, it's business, period. It's all about the money.

Linda said...

This has (almost) nothing to do with the post.. but I just wanted to say.... that dude is scary! :P

He looks like one of them boys on the corner of the street going 'psssst honey' to every girl that walks by.. *lol*

greetings from holland!

[Emeritus] said...

i saw the bailout plan for the big 3. i was so pissed. couldn't believe they were actually ever going to give them one. ugh!

Revvy Rev said...

Gov. P: Raw Dawg Buffalo for Senator of New York! Appoint him!

Brown English Muffin said...

" I believe that one cannot rescue a person or institution that wont rescue they self." AMEN!!!

Lovebabz said...

Execellent post.

It took me a few moments to digest it all. You laid it out beautifully. I certainly appreciate the attention to rural needs as well as urban needs. When I served on the the Transportation Committee for the National League of Cities, I truly was interested in this very notion. Linking jobs to rural areas with a real transportation system that went beyond just the outskirts of cities of towns.

Someone is paying attention to you Dr. Stephens...how closely, remains to been seen.

Maribel said...

i'll take bullet 2-- that would make my day!!

if only there were more ppl like you on Capitol Hill...

Waiting for Zufan! said...

So when is someone coming along to bail ME out?! I think I know that answer. Never. I better get bailing myself. Great idea to forgive the student loans. Wish that would happen, too.

BTW, if you're interested, I'd e-mail you the password to that post, but I think you've probably got more interesting stuff to read...

Christopher said...

These dumb-ass people who blog about staying up till 2AM to watch the Asian stock markets open and then sit glued to the TV and watch shit they don't understand.

It's as if they enjoy letting these Wall Street crooks and criminals put the fear of God in 'em.

How do you spell S.T.U.P.I.D?

I never for one, hot San Francisco minute believed we the taxpayer had to bailout Bush's friends and family members on Wall Street or the country would slip into a depression.

All of 'em: Paulson, Bernanke, Pelosi and Frank should be jailed for saddling us with $700 billion in additional debt and then lie to us and say the bailout would trickle down to Main Street and help you and me.

Meanwhile, the American auto industry is being kicked to the curb by the Congress (Dem and Repug alike) over asking for a damned $38 billion dollar loan.

It's all fucked up. How did we get to this point where it's cool to bailout the fat cats but the men and women who bath when they come home after working on the line for 10 hours don't matter?

Tera said...

Torrance, it's a mystery to me that the Govt doesn't consult with you before making major decisions! ;-)

P.S. I do love how you say, "Butterah..." it makes me giggle.

msladydeborah said...

Would you please post some of your comments directly to Obama. You can do that you know. And you should because they make sense.

I feel you on this one. I really do not get it. If I was failing at my business would I be considered for corporate welfare? Of course not. I also believe that since the CEO of GM feels he should get his 26 million dollar bonus, he should be ousted immediately without passing go and definitely without a check in hand.

This whole situation is no less than a hot damn mess.
And every day it seems to be getting messier.

What should we do at this point? Refuse to pay taxes? Bombard DC with millions of Hell No! emails?

As the late Bette Davis said, "Fasten your seat belts, it about to be a bumpy ride."

Melody.Darlene said...

instead of watching CNN... i just come to ur blog. ;)

R. Fitzgerald said...

Stop smoking that stuff, you are making too much sense.

In other news, the gas execs want a bailout package because the price of crude has fallen to record lows.

Mimi said...

All-Mi-T 2012!!

You got my vote for the presidency. You actually make sense.

I can't understand how they keep throwing money at the companies without holding them accountable. WTH?

I hope our goverment snaps out of this "money grows on trees" trance before we're all eating out of the garbage :/

Kofi said...

Word.

uglyblackjohn said...

The idea of paying down (off) student debt is a solid one. This would infuse money into banks while improving peoples' credit rating. We'd be helping those who invested in themselves.

Blog Queen said...

I like your ideas. I just don't think the government really gives a shit. When we end up BUTT-ASS BROKE...I guess they'll be satisfied

Kit (Keep It Trill) said...

A whole lotta folks gonna be out of business by the spring, probably including the Big Three as you said. I just wonder if pensions in the State and County governments will be safe.

The Socialite said...

This Big 3 thing is really hurting my people back at home! Someone please help... :(

CC said...

I'm loving your suggestions. Especaially the student loan forgiveness. That would change my world! I really think they need to look into helping those who aren't in major trouble (ie middle america that still has jobs etc). If we are eased of our financial woes we might be more inclined to not hold so tight to our money in fear of possibly becoming like those who lost homes and jobs (not that I'm against helping them too). We should also be currently penalizing those companies who got themsleves in bad perdicaments and taking their salaries (they'll probably still be doing really well).

Stephen Bess said...

There is much that I don't understand too, but I'm sure that it is intended to be that way. This post reminds me and many of us that we need to be made more aware of what this government is doing and why. This is a great place to start. Thanks, bro. I'll have to check you out the next time I visit Georgia. Peace~

no_slappz said...

The US has gone through booms and busts many times. Maybe this one is worse than a lot of others, but we're still facing the usual list of problems.


Detroit wants taxypayer money to sustain its unprofitable ways a little longer. Just say no. A government-backed Chapter 11 reorganization is all that's necessary.

Detroit management is nuts if it truly believes its own nonsense about car warranties. There's a huge market for used cars and they are often sold "as is".

The car industry would re-emerge in great shape after Chapter 11. Then we'd see Detroit vehicles advance like they were personal computers.

The Rescue of the US Economy must restart the credit machine. Credit equals consumption. Without consumption, we've got problems, along with the rest of the world.

We need Walmart everywhere.

We need to eliminate the Minimum Wage AND create a Guest-Worker Program for all the people who now sneak in and work illegally.

We have enough roads and bridges. They might need repair and maintenance. But we have little need for more major roadways.

We must end the Tariff on Imported Ethanol AND end the Subsidies to Domestic Ethanol Industry.

We must vastly increase the HB-1 Visa program to get as many hi-tech workers as possible working in the US, where their presence creates more jobs.

We must Eliminate the Home Mortgage Interest Deduction. It drains money from the Treasury and artificially increases housing prices.

Terminate the Student Loan Program. Kill any plans to offer Tax Credits for Education. Both lead to Higher Tuition Rates.

Give Vouchers to Public School Students. Catholic Schools get better results than Public Schools and they do it for half the cost. Public schools need Competition. Instead, they suffer from the same Union lunacy that is killing Detroit.

Open all US territory to oil drillers, especially off our coastal regions.

Remove all obstacles in the way of our Nuclear Power industry.

End the Embargo of Cuba. That one move will create substantial opportunities for the US and cause the head of Caesar Chavez to get fatter and fatter and finally explode.

Ignore the crackpots who believe Global Warming will kill us a century from now.

Burn the world's oil reserves until they are gone. When we really approach the true end of oil reserves we will have all the prodding needed to develop alternative energy sources. Of course it is estimated the US has a 400-year supply of coal. And we already know how to build safe nuclear plants.

The Navy operates them safely on combat vessels cruising the entire world every day of the year.

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