U.S. Economy: Not A Rocket Science

It is no longer a secret that, when elected officials get entangled with personal interests and corporate corruption, tax-payers pick up the tab for the damages and the economy shrinks.

American citizens have been hit so many times by the effects of greed and the self-serving attitudes in Congress that a rippling crisis was imminent. I believe we needed a collapse in order to pause and reflect on the price of conspicuous consumption and complacency.

Americans, on the whole, are the world's most prolific consumers. That's because our incomes are higher than anywhere else, and merchants have found highly sophisticated techniques for getting us to spend our money. Unfortunately credit has been abused in three major markets - housing, automobiles and credit cards. The result of rampant consumer spending is the current global financial crisis.

So, what else is new?

If you are a TV channel surfer, you are aware of the focus on the economy from every popular financial talk show. I am amused by some of these forums because they are repetitive and often confrontational. The problem I have with the media, which I have expressed boldly over the past decade, is that the commentators hardly get it right when presenting their views on solutions to our economic dilemma. I am convinced that they are more interested in being photogenic.

That doesn't deter me from espousing on the way our nation's plight is being treated. Economic growth is measured by one thing only: how businesses and consumers spend money, in that order. Layoffs are infectious and they must be stopped.

Strategic capitalization is the answer to that problem. Since banks are in business to finance corporate America, a remedial program must be activated to help restore this basic principle. Apparently, the only source for available capital, at this juncture, is the United States government, in which case, a commission should be set up to safeguard all capital that is earmarked for America's struggling corporations. If anyone ever asked me, I would propose a standardized business plan that would be implemented when companies receive new bank loans.

Corporations and large institutions have been left alone to treat money as if it grew on trees. The sad truth is that these groups will continue their monetary practices until something really bad happens, such as total insolvency and bankruptcy. While these robber barons are enjoying their spoils, the rest of the public has been enthralled in repetitious conundrums about the solution to our national financial crisis. It bothers me, and possible some of you, that so much time is spent on talk and criticism.

I gave our situation a lot of thought. Naturally, I consider myself to be just as reasonable as any of the so-called gurus on television. It has been my view that the solution to the nasty mess we are in is not very complicated. I believe the more we argue about it, the more indiscernible the solution will become.

Looking at a problem from the bottom upward is most often an efficient way to solve a problem. In my opinion, the economy would begin to grow again if consumers had job security and money to spend. Ok. If small businesses had sufficient cash flow they would not have to layoff employees. Instead, they might even be able to increase their human resources. If that were true, banks should be able to provide business loans to businesses to make all this happen. There are no arguments to refute these principles.

So, how does the grand scheme of finance come to life? The answer to this question is not so simple, but it's also not a rocket science. Given, there extenuating circumstances involved with stimulating the economy, an extremely well planned, simplified funding program (no, it's not TARP!) should be designed to provide liquidity in the credit markets. It would be systematic, measurable and accounted for by the Federal Reserve Board. The FOMC meetings would include a thorough monitoring and evaluation of the funding program periodically, as needed.

The Fed has the money. Why don't we bypass as much governmental posturing as possible, commit to a $500 billion guarantee to commercial banks and get on with it? The GDP could grow by 10% in the second half of 2009 if consumer spending increased by 15-20%. Yes, I am aware that I'm too late and missed the congressional invitation that was sent to the wrong address. I believe springs eternal.

God bless America. Cheers to President Obama!

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WLH COMMUNICATIONS INC NEW YORK

Wall Street, Both Goldmine and Carnival

There is no other place on this planet as sophisticated and resourceful where you can make big money and get fleeced without leaving your armchair. The money craze on Wall Street has called attention to a new era for investors.

"Yessiree, step right up and play the game everybody loves! You sir, yes you with the big bear tee shirt. This is your lucky day! I'll tell you what I'm going to do for you. Give me a half million dollars and I will guarantee that your investment earns twenty percent per year EVERY YEAR for the next five years and longer. Trust me.

(Pitch continued...) "This investment is one of a kind and we only offer it to special investors who seek above average returns. I'm giving you our confidential brochure documenting the returns over the past ten years. As you can clearly see from the charts and the sincere look in my eye (doesn't matter which one), this is a phenomenal opportunity backed by our proven history of outperforming the markets."Now, who in their right mind would fall for a scam like the one described above. You? If not you, who?

The shell game on Wall Street has been marketed in various forms.If you didn't quite like the cologne worn by the scam artist offering you twenty percent on your money, you probably gave a huge fraction of your assets to a giant institution brandishing a recognizable logo for the last fifty years. I'm referring to Merrill Lynch. You sounded like a bug snug in a rug when you told your house guests or close friends (OR ME), "I'm with Merrill."

For decades, Merrill Lynch posed as a monolith owning a legacy of strength and integrity.Who knew the benchmark of investment banking was so reckless while strutting its bullish messages in more tabloids than any financial institution in the world? I had only a small clue, going back twenty years; but I had no idea the company was casting a shadow across the markets that ten times larger than its true size. Imagine, a global investment bank being swallowed up by a bank (Bank Of America, NYSE: BAC)! Think about that for a couple of minutes.

Being Rich Has New Meaning

"The rich get richer" is an old adage that we have all heard for most of our lives. Forget it. These days the rich are becoming more corrupt by the hour, losing their integrity to the lure of money an preying on investors that need the money the most. It's about time we all learned that any service or series of transactions that require new capital to be successful is a virtual Ponzi scheme!

Roughly three decades ago, Woody Allen described a stockbroker as someone who invested your money until there was none left. In the past decade, distributions of wealth have been a one-way system that benefits corporate executives more than any other class in the United States; and we taxpayers are now asked to take a flying leap of faith in hopes that our government will put the brakes on the inequities of Wall Street. Unfortunately, it hasn't happened, yet.

While Democrats and Republicans debate who's right and who's wrong, the swindler's beat goes on. Unjustifiable use of company jets, lavish junkets to softer climes and additional perks to the best dressed executives will continue until President Obama finds a way to pull the plug. In my view, he is somewhat intimidated by the likes of Nancy Pelosi and Barney Frank. Who wouldn't be? Those two bureaucrats began hobnobbing on Capitol Hill before Mr. Obama left law school. In my opinion, they represent the monkey wrench (think pork) in the recovery program.

About Hope

I believe no one doubts that our greatest commodity is hope.

Government, being what it is, will grind through waste to achieve the economic restoration this country needs, albeit in a much longer time frame than actually necessary. Supposedly, the buck will stop at the Oval Office, and hard-nosed decisions from the top will be exercised.I think of the solution to our financial crisis can be characterized a a gigantic jigsaw puzzle.

The banks have to be reclassified and refurbished, jobs must be secured and looting of investors' pockets must cease, all within a singe time frame. Progress in these areas has to be achieved quickly in order to keep the glimmer of hope alive around the world.

If there was ever an opportunity for a U.S. President to be lionized as a the champion of America's future, now is the time - a feat that would be registered as one more magnificent moment in history.

Hudster