Fool Me Thrice?

We Are Not Fans, generally speaking, of Speaker of the House Nancy Pelosi. In particular, we remember her untimely partisan remarks during the first vote on what ultimately became the Troubled Assets Relief Program [TARP].

But:

We Would like to Offer up Our Compliments for her leadership at yesterday’s press conference concerning a proposed additional bailout of America’s Big 3 automakers. (These automakers, as you probably know, have come to Congress asking for another $3,000,000,000 of taxpayer money, with a promise that this time, the solvency-rescue deal might possibly work.)

Following Treasury Secretary Henry Paulson’s two previous and powerfully urgent appeals for taxpayer handouts—the “bazooka versus squirt gun” incident and the recent TARP “rescue”—Congress now is finally getting wise.

“Until They Show Us the Plan,” said Speaker Pelosi at the press conference, “We cannot show them the money.”

What a Relief It Was to Hear That.

This Congressional Recalcitrance Harkens Back to the early days of the Bush administration, of course, when President George W. Bush famously said, “Fool me once: shame on you. You fool me: we can’t get fooled again.”

You Really Ought to Look at This, which sheds a lighter humor on the currently dark economic situation:

Some Foolish George Bush Moments

It Is Never Clear Whether our lame-duck president has learned any such “fool me twice” lessons. But at least someone apparently has....

America Currently Has a Lame-Duck Presidency, a lame-duck Congress, and a lame balance in the Treasury. The auto industry will probably get its money—and probably it should, if only to retard our downward economic spiral for a while. Maybe by slowing things a bit, the recession heading down may be passed by the next economy recovery, going up.

And If That Next Recovery Doesn’t Come Soon-Enough, then the American auto industry, as well as the general American public, may descend into insolvency anyway.

So: the Auto Industry and We, the People, may be inherently broke. But at least for now—

We’ve Still Got Our Hands on That Three-Billion Dollars!

And We Can Say Thanks to Nancy Pelosi and Harry Reid and the rest of the American Congress for that.

ASP: The American Shareholder Plan

The News out of Washington, D.C., Today came from Secretary of the Treasury Henry Paulson. Among other information contained in the Secretary’s report on coming government actions related to the troubled international crisis, one thing stood out:

The American Taxpayer Is about to Become a Major Shareholder in the securities of troubled financial institutions. According to Secretary Paulson, in the appropriate or necessary circumstances, the taxpayers, through the agency of the national government, will receive actual shares of stock in the troubled banks and other institutions.

The Distribution of These Shares was not mentioned in the Secretary’s press conference, but we would like to suggest once again the possibility of an actual distribution of these shares into individual accounts for each individual shareholder.

Under the American Shareholder Plan (“ASP”), accounts can be opened for each American citizen and taxpayer, using the information on record with the Social Security Administration. These shares can then grow in the individual’s ASP account, for a wide range of purposes, such as home purchase, college tuition, health care, or retirement.

So Long as the Shares Are Kept in the ASP Account, their value will not be taxed, and nor will any dividends or other distributions be taxed. Just as with IRAs and Health Savings Accounts and other tax-advantaged investment plans, the ASP beomes the individual’s private investment acocunt, to use as he or she sees fit.

Under the Prospects of the ASP, the American taxpayer, currently bailing out Wall Street with tremendous sums of money, at a time of great financial duress, will stand to benefit completely from the eventual recovery of the financial markets. Whether the companies involved are banks or other types of businesses, the variety of income and capital return that each citizen might earn may eventually compensate the American taxpayers for the economic pain and suffering and risk that is currently underway.

Democratic Candidates Barack Obama and Joe Biden ask for your vote on November 4, 2008. Please help make exciting new programs such as the American Shareholders Program become reality.



[DISCLAIMER: The ASP is not currently endorsed by Barack Obama or Joe Biden, who have not yet read this post.]

NEWS FLASH! America’s Financial Crisis: Fortune 500 CEOs Respond

Channeling Barack Obama™ has received the following open letter to the American people:

Dear Fellow Americans:

We, the Undersigned CEOs of Companies on Fortune Magazine’s list of the 500 largest American companies, have stood quietly on the sidelines while Congress and the American people debate the solutions to the overwhelming crisis of our national economy. We understand that many citizens do not fully understand the exact nature the crisis, nor how we—each of whom makes a salary of tens of millions of dollars—screwed it up.

But That’s Just What We’ve Done. We’ve screwed it up.

And Now We Come to the American People with our hats in our hand. We need your help.

Treasury Secretary Henry Paulson, on Our Behalf, has asked Congress to put together a plan to take away the obstacles that are shutting down the credit markets and making it impossible for businesses to continue doing business, and for citizens to buy houses or cars, or to use credit cards.

If Congress Does Not Act—and Quickly—the entire credit system of the United States will stop. What we will have is a major disaster. And so we need Congress’s help, and the resources of the United States Treasury—which money ultimately belongs to you.

To Show Our Understanding of What the American Taxpayer Faces with such a large plan, we would like to make the following accommodation, out of respect for your great sacrifice:

Effective with the Signing of the Economic Rescue Package, we, the undersigned CEOs, will voluntarily reduce our own salaries to a number that is 14 times the average pay of each company’s salaried employees.

Whole Foods, Inc., the Nation’s Largest Organic-Grocery Market, has used this salary cap for years. It has served Whole Foods well. This cap serves as an ideal guideline for how American corporate leaders should be compensated in the future.

In the Meantime, All Salary Above This Cap, until our salaries are renegotiated, we will give to the United States Treasury, to be used as will best serve America’s financial needs right now.

America Is in Crisis. We, the undersigned CEOs, appreciate the willingness of the American people to step up. The extra millions of dollars that we CEOs have at our disposal are the least we can offer, in gratitude for the generosity of the American people.

To Our Fellow American Citizens, we say:

Thank you, and God Bless America.

(Signed)

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A Man Rushes Out of a Burning Building.....

.....Carrying a Five-Gallon Can of Gasoline and a Lighted Match. He screams to the gathering crowd, “Quick! Quick! The barn is on fire! Everybody, quick! Give me all of your money so that I can go buy some water to put it out!”

Somebody Steps Forward and Asks, “But it's a fireproof barn. How can this be happening?”

The Man Shouts Backs, “Will nobody listen to reason? There's no time to waste! Hurry! Hurry! We've no time for mistakes!”

Someone Else Asks, “How about if we all bring our hoses and buckets out and put out the fire ourselves?”

“No, No, No!” Screams the Man. “I want to buy all your hoses and buckets. Then everybody turn around, and I'll put out the fire. But hurry! There's no time to waste!”

“But Why Should We Give You All Our Money, to buy our hoses and our buckets from us, so that you can go put out the fire......that you just started?”

Don't You Wish That All Analogies Were Better Than This One? The details don't match the current economic crisis facing the United States. And certainly neither Treasury Secretary Henry Paulson nor Federal Reserve Chairman Ben Bernanke created this "barn fire."

It Was “Free-Market” Ideology that failed in this situation. According to Republican testimony, the only way that Freddie Mac and Fannie Mae could get mortgages to poor people was to get rid of regulations that governed mortgages, and then sell to poor people mortgages that they could not afford.

Plenty of Ways Exist to Make Mortgages Available to low-income borrowers. But we took advantage of ignorance and greed, and put the entire American economy at risk.

As Chairman Bernanke Himself Has Not Said, “The American barn is on fire.” And we know who lit the match.

So Now What Do We Do?

What If We Guaranteed Troubled Mortgages by taking a shared equity position and extending the mortgage payments to compensate the Treasury's contribution? What could be simpler, and fairer both to the troubled homeowner and the underwriting American taxpayers?

Meanwhile, Back at the Burning Barn, government representatives of the folks that set the thing on fire are still out there, shouting:

“Hurry, Hurry, Hurry, Before the Barn Burns to the Ground, and There Is Nothing Left for Us to Sell.”

Treasury Testimony Baffles the Nation

In Secretary of the Treasury Henry Paulson's testimony before the Senate Banking Committee yesterday, he directly contradicted his “simple proposal”:

Secretary's Testimony Before the Senate Banking Committee on Tuesday:
“We gave you a simple, three-page legislative outline and I thought it would have been presumptuous for us on that outline to come up with an oversight mechanism.”

Secretary Paulson, Again in Yesterday's Testimony:
“If any of you [Senate Banking Committee members] felt that I didn’t believe that we needed oversight, I believe we need oversight. We need protection. We need transparency. I want it. We all want it.”

BUT:
Secretary Paulson’s Text of the Three-page Bailout Bill Presented on Friday, Just Four Days Earlier:

“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency...”

No Wonder So Many Americans Are Confused. What do we make of such contradictory statements? We don't like to believe that people lie, and yet such contradictory statements as Secretary Paulson made within a few days of each other represent either:

Lies or Senility or Merely Incompetence

How Can This Man Be Trusted? Whether the Secretary is senile or dishonest or merely incompetent, the contents of the United States Treasury should not be put at his disposal. We must not place our trust in this self-discrediting man.

Better Thinking Must Prevail. In terms of additional "bailouts" or other solutions to the current economic crisis, clearer thinking and more-responsible options must be examined—by more creditable people—and then pursued.

Congress Must Not Rushed Into Foolhardiness Yet Another Time.

As President Bush Himself Once Put It So Well, “Fool me once; shame on you. Fool me twice.....and you won't fool me again.”