Where is the Change?

“You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew.” Albert Einstein

I would love to see the economic crisis end. I think we all would. However, I have little faith in President Obama’s economic leaders because they come from the same mindset that caused the problem. They are the consummate insiders trying to restart their broken system.

I believe the root cause can be traced back to Wall Street and financial speculation. As I’ve written before, the solution resides on Main Street, not Wall Street.

Federal Reserve Chairman Ben Bernanke is a fairly traditional economist whose thoughts, beliefs and training have all been from the consciousness that created the problem. The same is true of Secretary Timothy Geithner. Both come from the world of banking that is at the core of this mess and because of their history, have mental models that can only see a solution in that arena. I believe it would be impossible for them to envision a world without our current monetary system (private bank that creates and controls money) or the behemoth financial sector from where they emerged.

As I’ve stated before, much of our financial services sector does little to add real value to our economy. Trading paper is not economic output despite what we’ve been led to believe.

I wonder where we’d be if we stopped focusing on the banks and instead focused on the American people. How far would $9 trillion go towards fixing our economic problems if we targeted that money towards Main Street instead of Wall Street?

I suspect their solution (buying worthless assets with taxpayer money) will cause as many problems as it might solve. I have a real fear of hyperinflation as the government floods the economy with more money to purchase worthless assets from private banks and investors. They’ll get the money, we’ll get the bill and in the end, will have nothing real and tangible to show for it except little pieces of paper.

“Insanity: Doing the same thing over and over again and expecting different results.” Albert Einstein

Taxes, AIG bailout and more

I was going to blog about taxes so I started researching the federal budget and looking for an image to post.  

I really wanted to discuss the residential energy-efficient property credit, which was extended through 2016 and which generally covers solar electric, solar water heating, fuel cell property, small wind energy and geothermal heat pump property.  I also wanted to discuss the non-business energy property credit for insulation, exterior windows, exterior doors, furnaces, water heaters and other energy-saving improvements to a main home which was not available in 2008 but returns in 2009.

However, the AIG bonus hysteria got in the way of a deeper discussion on taxes. 

First, I don’t believe anyone is worthy of a multi-million dollar income and lifestyle while we have needy children in our midst.  That is one of my beliefs and values.  I think billionaires are evidence of a flawed system.

While I’m opposed to the whole Wall Street bailout and the more than $9 TRILLION spent on this fiasco to date, what gets me is the missing perspective on the AIG bonuses.

AIG Bonuses = $165,000,000 ($165 million)

Missing Cash in Iraq = $12,000,000,000 ($12 billion – 73x more)

Official cost of Iraq war to date = $656,100,000,000 ($656.1 billion – 3,977x more)

Wall Street bailout to date = $9,400,000,000,000 ($9.4 TRILLION – 56,970x more)

The AIG bonuses amount to 2/1000^th’s of the cost of the bailout!

FYI:  Missing from the "official" cost of the bailout is government guarantee and insurance programs like the FDIC ($1.5 trillion), FHA ($.3 trillion) and the Federal Reserve ($7 trillion).

A trillion here, a trillion there

While Congress debates the $700 billion Wall Street bailout, I've heard nothing in the press reminding us that this is coming on the heals of a $300 billion housing bill signed by the President back on July 30th. That is a staggering $1 trillion spent on this fiasco. Add to that the nearly $1 trillion we've spent in Iraq and it is no wonder our standard of living is declining.

I currently oppose the bailout for the following reasons:

1. It is being rushed through with little discussion, debate or analysis of alternatives. This is the Bush/Paulson plan.

2. It contains no reforms and simply gives the money to the same players who created the crisis.

3. It provides not a single dime to homeowners or want to be homeowners. What would $700 billion do for the economy if we targeted this money towards the housing needs of citizens?

4. I don't trust President Bush or his administration. I hate to say it but I'm also skeptical of both McCain and Obama here as well. Both are being advised by Wall Street insiders who will benefit from this bailout.

5. The negotiations have been secretive.

I've just been reading the latest news and the House is going to debate this massive bailout for a total of 3 hours before they vote.

I would love to see our country invest $700 billion in a green economy. That type of investment would go a long ways toward creating a post-carbon economy. Instead, I'm worried that we are doing nothing but temporarily propping up a decaying system.