How ironic would it be if the bailout went unaccounted for

I was at the gym yesterday and I was watching CNBC or something like that and they were talking about how they contacted all the banks that got more than $2m from the bailout money and asked where it went. The guy at the bank basically said, they lent some, they kept some and that no one had told them to keep track of it. I find it highly entertaining and even more highly disturbing that with all the talk about how de-regulation was the cause of all these problems in the first place, it seems to me that the first thing that should have happened when we started handing out some of our hard earned tax dollars was that we actually learned from our mistakes and asked where it was going... doesn't look like that happened.

This is why making a hasty decision like the bailout wasn't and isn't right. If those banks were so far in the hole that they were going to go out of business in less than a month then they deserved to go out of business and we would be better off without them. But, I am guessing that most of them could have figured out a few ways to un-burden themselves long enough to give the Congress, House of Reps and even our President a month to figure out a constructive way to help them out, that might not have cost the tax payers as much, only to have no account as to where things are...

I struggle with my need as an American to get everything the minute that I need it. That's why so many people have made so much money on fad diet pills and, pyramid schemes in this country, because even though history tells us different, we want to believe that it's just that easy.

And if there's one thing that I've learned unless you are a billion dollar bank who begs the government for money and cries wolf the minute the interest rates drop, it's not that easy...

40 year old mouse?

Today is the 40th anniversary of the computer mouse. I would venture to say that 20 years ago upper middle class people had regular access to computers, 10 years ago I sat in my college dorm room and logged onto the internet via AOL. Today I store all my docs on google docs, I use facebook to keep in touch with friends, I do all my shopping online and spend more time emailing than I do on the phone.

I don't know about you, but I am a little scared but very excited about the next 40 years.

The status of our environment in 1961 via Steinbeck

Being unemployed, I am getting through some of the books that have been on my shelf for quite sometime and am uncovering things I never knew I would find. Last night for instance I started Travels with Charley by John Steinbeck. One passage I found quite insightful about the status of American consumption and what it does to the earth comes within the first 30 pages of the book.

"American cities are like badger holes, ringed with trash- all of them- surrounded by piles of wrecked and rusting automobiles, and almost smothered with rubbish. Everything we use comes in boxes, cartons, bins, the so-called packaging we love so much. The mountains of things we throw away are much greater than the things we use. In this, if in no other way, we can see the wild and reckless exuberance of our production, and waste seems to be the index...I do wonder whether there will come a time when we can no longer afford our wastefulness-chemical wastes in the rivers, metal wastes everywhere, and atomic wastes buried deep in the earth or sunk in sea."

Steinbeck wrote this book in 1961 and even then he knew what we were destined to become. I believe that we are probably better at hiding our trash, but it doesn't mean it's not there and it's not doing the same damage it was doing 40 years ago.

I need a bailout

I was joking with a girlfriend last night that we should be able to apply for the middle-class white girl bail out. I have been part of this plighted group since I was born, and after 29 years I am unemployed, overly-educated, and clearly not going to make it another day. ;-) I need someone to bail me out! But wait! I am competitive, I am agile, I like to learn new things, I always have fun new ideas, I have tons of business plans just waiting to be funded, I am able to support myself and I know that my highly expensive education won't go to waste... This is where "The Big Three" and I are different.

They, for the past 30 years, have tried so hard not to be competitive. Instead they have continued to pay lobbyists in order to make sure that they didn't have to spend R&D money on environmentally friendly, globally competitive cars. They continued to pay ridiculous pensions, which if I was getting one, I would be super happy about but most private companies did away with pensions decades ago. They were mis-guided, they took their eye off the ball, they "went with the status quo because that's what they know." (Great quote, heard from Kendra).

Our country should not bailout corporations like the "big three" who clearly don't want to help us grow. I think I have said it in this blog before, but we are a country that invents, we create, we develop, we figure out better ways to do old things. The big three don't do that. They need to go. We need to get another industry up in Detroit, and I know there are smart people up there who have great ideas probably like me, tons of business plans who can't get funded because they are surrounded by people who have tunnel vision that they need the auto industry to support them in everything they want...

What the American Economy needs

I just read a great article by Michael Porter, a Harvard Business school Professor. He talks about the seven competitive strengths, and then discusses what we need to do as a country in order to get ourselves back on track and to help regain our position as a world power. If I were an incoming President I would take his suggestions to heart.

Some of the better points that I completely agree with are that:
1. We have ignored our educational institutions and this is critical if we want to regain our global economic position
2. We have over-regulated in some industries and under-regulated in others and the imbalance has left us without the advantage that was once the "American Way."

There are many more great points in this article that resonated with me. Please read it and tell your friends to read it...

Tired

I have just started Ultimate Bootcamp, and I am tired. I was reading two other blog posts today that talked about tired in a slightly different light and I think they are both relevant and pretty illustrative of where we are headed as a country and a culture.

The first, by Seth Godin, who I read at least three times a week. He is a straight shooter the way our politicians dream they could be. He calls it like it is and most of the time has some really interesting insight about how you can make your business better. Today, his post was titled, "Is Effort a Myth?" He talked about how people tend to cling to being lucky and just talented and claim that's the reason they haven't gotten ahead. He challenges that theory by suggesting that it's up to each of us to do something new everyday in order to learn and grow, actually put some effort in. We can't do that if we are tired.

In another blog that I follow: Dave Taylor from the Business Blog at Intuitive writes about sloppy PR pitches. He wrote about one from Bloomingdales and another from Disney most recently. PR gets a bad wrap because I know some really great PR people out there that develop relationships with journalists and clients and are able to clearly communicate stories that are relevant. They don't blast pitch every journalist in New England when only one of those journalists cares about the story. They search and search for that one person and read what they have been writing and make sure that the journalist knows about their story. They pitch it to the one most relevant person. It's not a job for the weak or tired.

Basically, the way I see it, it's coming down to work. I feel like our country was super excited about the computer because it allowed them to do things so much faster. Then came Email, the Internet, Web Conferencing, iPhones, etc. Now it's easy, but it requires more work. We have to be more diligent. We have to find what we love and do it well and completely and that's the only way we will make it. As the politicians said in the debate tonight, our country is full of smart inventive people, now we need to actually work at it. It's no longer about luck but about hard work. A little Protestant Ethic that hopefully will remind us it's not about being at the right place at the right time, but about making your own right place and right time with hard work, there is no place for tired here.

A logical response to all that is the " crazy state of the economy"

Uncle Tom is a huge Dave Ramsey fan. And after reading his book I am a fan as well, I don't know why I didn't look for Dave's perspective earlier, but Uncle Tom came through again! Here is a link to what Dave thinks we should do, and below you will find the text from his assessment!

The Common Sense Fix

Years of bad decisions and stupid mistakes have created an economic nightmare in this country,
but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following three stepCommon Sense Plan.

I. INSURANCE
a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance.
Government-insured and backed loans would have an instant market all over the world, creating immediate and needed liquidity.
b. In order for a company to accept the government-backed insurance, they must do two things:
1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.
a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.
b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower—again limiting foreclosures and ruined lives.
2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.
c. This backstop will cost less than $50 billion—a small fraction of the current proposal.

II. MARK TO MARKET
a. Remove mark to market accounting rules for two years on only subprime Tier III bonds/mortgages. This keeps companies from being forced to artificially mark down bonds/mortgages below the value of the underlying mortgages and real estate.
b. This move creates patience in the market and has an immediate stabilizing effect on failing and ailing banks—and it costs the taxpayer nothing.

III. CAPITAL GAINS TAX
a. Remove the capital gains tax completely. Investors will flood the real estate and stock
market in search of tax-free profits, creating tremendous—and immediate—liquidity in the markets. Again, this costs the taxpayer nothing.
b. This move will be seen as a lightning rod politically because many will say it is helping the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.

This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to stand up, speak out, and fix this mess.