You are currently browsing the category archive for the ‘competition’ category.

The current party system is broken. Gridlock ties up DC, even to the point where the Republican Party will filibuster a bill that they themselves proposed when both houses were Republican. The filibuster is only pursued because if passed it will be considered by us, the public, to be a success for the standing president.

You can’t blame Republicans. They are just trying to survive. Tying up Washington so that nothing gets done, is the only option they have.

Which leaves us with a choice… Should WE the voters continue this same gridlock? Or shall we take matters into our own hands and do something about it?

If we split our votes, the Gridlock continues.

The only way to prevent future gridlock is to make the penalty for doing so, so severe that any future party treads very lightly if it dares try using gridlock as a political weapon again….

That penalty needs to be that the party obstructing all activity in Congress, not receive any votes to return.

Let’s examine this proposition…

Assume all Democrats and no Republicans return to Congress starting 2013. The House would be completely 100% Democratic, and the Senate Republicans would drop down to 36 if all 11 Republicans up this year lost and all Democrats won.

We would have a one party system… or would we?

The Democratic party would soon split. The Progressives from the Blue Dogs… We would continue to have two parties in Congress. It’s just that that they wouldn’t be jockeying around for political points against the other side.

Instead we’d have what Congress was supposed to do. Debate bills on their merits, and once all facts are on the table, vote them either up or down based on the personal convictions of each Senator or House Member…

We’d still have the same debates as the powerful lobbyists swirled around those who would most likely represent their interests…

But if would be as if America took one step to the left. As if the entire political tone of Congress, just shifted left.

Would the same thing work if the Republicans are put into all seats they run for?

No, and here is why. Republican policy is what got us in this mess. Phil Gramm deregulated derivatives. Eventually that caused the enitire markets to catch up to where Enron went earlier, and collapse. It was the Republicans who decided over Democrats objections, to not raise taxes on the wealthy in order to pay as we went for two wars. So now, we we have a bill coming titled “Payment Due,” for those two wars plus interest. It was Republicans who because we had a surplus, decided to stop that money coming into the Treasury that was paying off our debt. So under them, we added debt on, and stopped paying our payments. No wonder the deficit is so high.

They are the wrong person to put into unlimited power.. simply for when they were there, the got to exercise with impunity all their dreams. We are bankrupt now…

Harken back to the era of Clinton, and everyone was making money… whether you were poor, middle, or rich… You made money and had more left over to spend on yourself, than you do now…

That simple comparison is why we need to go to an all Democratic Congress and not an all Republican one.

We will always have divided government. It is just that when it becomse divided along party lines, and not along the lines of the American people, that we get the gridlock we see happening daily today…

Republicans are the cause.. Their elimination (no offense to the nice Republicans I know) will be the beginning of a new day for America.

The last time we eliminated Republicans was in 1932. It took 64 years for them to return. Those were the best years America has ever had.

Having recently seen the Harry Potter movie, it is scary. Ever since watching…. I now see giants everywhere. Before when I looked, I never knew they were there…

Two giants will be doing battle here in Delaware… (The recession is finally paying off for our little state.)

Papers were filed with the ITC (International Trade Commission) by the South Korean giant Samsung LED against a division of another giant this time from Germany, Siemens….. over 8 patient infringements.

Samsung LED also said it filed a lawsuit in the U.S. District Court in Delaware to seek damages and a permanent injunction to bar Siemen’s subsidary, Osram’s alleged patent infringement from entering this country.

At stake is the financial future of these two companies. One will win, and the other for lack of a better word, will be vanquished.

Since Siemens actually has a plant in Delaware, next to the Glasgow Park off Route 40 and 896, I’m putting my bets on that giant…. if they get hurt, it will cost jobs.

Hotels, restaurants, transportation companies all stand to be a little busier as this gigantic fight, gets under way…. It would be helpful to practice on the Korean and German dialects now, before the event gets under way…

Sprechen sie deutsch?

니미럴 개자식 ….

It should be an interesting fight.

First it was Donald Trump’s amateur fillies… now it’s the professionals… Delaware has lost twice to California…

In the Ms USA pagent, Delaware’s own Katie Hanson, lost to Ms California who naturally, took the crown… When it came to Thoroughbreds, Delaware did a little better……

Delaware’s Havre De Grace, took the lead and California’s blind luck, just came up in time for the wire.

Even when he drew even with Havre de Grace, Gomez said he was unsure Blind Luck was going to get past her.

“We came up to her and she fought back,” her rider, Gomez said. “I thought I might be in a little trouble. But with this filly, as soon as you pull her out and she pins her ears back, she accelerates in two jumps.”

It was all the horse…..
“My horse dragged me to the front, and turning for home she gave me all she had and really kept on digging,” said Dominguez, who was the dominant rider at Delaware Park when he rode there from 2003-2008. “It was just a head bob and the other filly got up just in time.”

The final time of 2:01.28 was the fastest running of the Del Cap since Unbridled Belle’s 2:01.16 in 2006.

It may seem unfair that “great big ole California” beats out the state with the fewest number of counties (only 3) … but, if you compare populations, the simple fact that quite often Delaware and California are pitted neck to neck just before the final wire, it is fair to say that with California’s population of 37,253,956 versus Delaware’s of 897,934 it takes roughly 41.49 Californians, to match up to and equal one Delawarean….. 🙂

We may be small, but we ARE tough!

Senator Hatch’s own words….

“We’ve been down this road before,” he said. “In 1990 Congress and the president struck a deficit reduction deal that combined spending cuts with tax increases. Unfortunately, while the tax hikes remained, the spending restraint did not, and our debt has marched higher.”

The Reality:

Graph showing Republicans are Sole Cause of Bad Government and ever since Bush we've been fucked
Courtesy of TPM

So if you knock off the 74% overspent on both wars, and knock off the 32% overspent on the Medicare Medical Profit Enhancement Act signed by Bush in 2003, spending is flat relative to GDP.

Revenue isn’t… Hatch says it worked great then… As reality shows, the only difference between then and now, is we aren’t taxing enough… Any Republican who says we are taxing too much, is like Hatch, a big, fat liar….

Poor Roger Clemens: Apparently it’s more of a crime to lie before Congress, than it is for a member of Congress to blatantly lie on CNN to the American people?

Did he just say (1:00) “although the tax hikes remained (uhh, is he so old his memory skipped over the Bush tax cuts?) … our spending cuts (see above chart) did not?

Caught in the act, Big Fat Liar…. Got some water to pour on to your pants?
Republicans Now Scramble for Damage Control over All The Lies They've Told To The American People
Image Courtesy of Cape Cod Living

The significance of such is hard to fathom. Our grandchildren will one day be watching a movie about this event. ..

Not since Seabiscuit and War Admiral’s rivalry, has their been a horse event that tops this one…

Harve De Grace and Blind Luck will meet for the 6th time, right here at Delaware Park, where the rivalry began a year ago.

One of these horses is the best female in America… We’ll know after Saturday’s race, which one it is….

Here’s what I’ve found… a range of 65 to 80 percent answering in the affirmative.

In any group of people, ask this question. Do you favor a government option of health care, like Medicare and Medicaid, which can compete against your private insurance company, to help keep costs in line?

Get back to me with your answers… or even better… don’t… Tell someone else instead.

Times are hard for people. And there are two genetic strains of personalities reacting to those hard times.

The first is dominated by the selfish gene. They are the ones who say “hey, look at me! I’m doing just fine. If I could do it, you can too. I’m blessed. And don’t take anything of mine, unless you’re willing to pay me back a very high rate of return!”

The second is dominated by the selfless gene. They are the ones who say, “look, that could be me. Hey, I have something here I’m not using. Take this. Maybe you can find some use for it. And don’t worry about paying me back… When you get on your feet, return the favor to someone else who is down on their luck..”

We both know individuals and groups of individuals who follow these two pursuits…. To those of us who study history. a parallel can be drawn between the two camps. The selfish first stems from Old World philosophy. The selfless second originated in the New World.

The European nations were at that time founded upon the principals of mercantilism. Each nation used militaristic methods to acquire capital in the form of gold bullion. Stealing gold from South Americans was the principal cause of wealth formation throughout Europe during the colonial age. Those nations without territory in South America, stole their gold from those who had territory and were stealing South America blind. And then of course, you could trade some of your products for their gold if they were inclined to buy. That in a nutshell, was the European economic system existing at the time of this continent’s discovery.

You did not aid and abet your enemy. You charged, kept records, and used your military to collect, if those owing you money failed to meet their obligations. Needless to say, this mentality flowed downhill throughout each nation’s respective economies. If someone defaulted, you threw that person into prison where they could never acquire the means to pay you back.. You were vindictive, demanding, and cruel…. You had to be, so they feared you. Many of our early settlers were these poor locked up souls, filling up debtor’s prisons, only to be shipped over here, dumped and left to die..

Instead they prospered and from them, came the other line of treating those less fortunate: helping them get back on their feet by making them productive enough to earn money. The money then earned, was subsequently returned to those generous souls who gave them a break, by being spent in their stores on their own goods or services.

As the frontier expanded Westward, this philosophy spread with it. If a neighbor’s house burnt, you and your neighbors had a house raising party. If Indians stole their horses, you gave up some of yours. If your neighbor needed a plow, you lent him yours. The benefit was obvious. Should you befall poor circumstances, they would do the same for you, without asking. People were a rare asset as America’s frontier expanded; natural resources were abundant. So naturally, people gave up what they had, to help other’s if that meant they all had a better chance of surviving… After all, natural resources couldn’t come to your aid or load your weapon, should your family be attacked by a scalping party out on a raid.

This concept of banding together to help others is a very American trait. It would be one not so well widespread today, if it hadn’t been the greatest generation of Americans who brought it to the forefront. WWII drove home this idea to the rest of the world, It showed all that America was very different. Over here, people stood for something and because of that, they were willing to invest valuable resources to help right injustice, and even better, once winning? They packed up and went home. And one even better? They used their own precious resources to help their former enemies get back on their feet again… Gee what a great country..

Today we hear that same philosophy about helping others, being used across our health care debate This great debate of this decade is, at the core, a debate between helping people survive, or… helping people get rich off of helping people survive… All National Health Care arguments boil down to that one sentence… Whatever side you are on, whatever plank you hide behind, whatever argument you make, at its core is either the belief that we should be selfless, or selfish.

There is no way around it. If as a nation we should be selfless in our treatment to our unfortunate, our own citizens, then we need some form of governmental input. If as a nation we should be selfish in our treatment to our unfortunate, our own citizens, then we need to maintain the current status quo system of for profit private health care…

History has a funny way of playing tricks. We think of Socialism as a European tradition. However it was from America that socialism derived its inspiration during our nation’s growth over the 19th Century. Socialism was a contrived as a method calculated to achieve those values visible on the American frontier, by redirecting the wealth that for so long, had been locked down by a very few. Socialism was the way to pry open the coffers of one or two rich guys, thereby allowing help to flow outward to areas where it needed to go.. One should note, that the rise in Socialism was most prominent after WWII when the populations of broken nations looked to America as a model, and said we want to be like them… Combining the resources of government and business was their quickest avenue to achieve that goal.

It’s time we pool our resources over on this side of the ocean. Our financial system was stripped bare, and we need to grow our way back to prosperity. We also need to bring along the global economy with us..

One could argue that capitalism, free markets with no regulation, is exactly what collapsed our global financial system. AIG taking insurance payments and spending them, simply because they weren’t regulated, is exactly what capitalism calls for…

Americanism, on the other hand does just the opposite. Americanism is simply the pooling of resources for a short time only, to help a neighbor in need. It comes with no attachments, save the deep understanding that should the shoe be on the other foot, we would be the beneficiaries of their good fortune. We need Americanism if we are to continue our role as the greatest nation on earth. Our experimentation with the old world order these past eight years, led us to disaster… just like it has led European nations to disaster every twenty years, up until Americanism took over after 1945.

The wave of the future is not a free for all, money grabbing fiasco; it is an evolution. And evolution is at its most successful when the gene pool available is maximised. As for the healthcare debate, the more players allowed at the table, the better chance we have at evolving our healthcare system into the best option. That best option, will be determined not by plan or directive, but by individual purchases across every state of this nation…

Even if you have great distaste for a government entity entering itself into the health care insurance field, you can have no fear of letting it compete in the free market of health coverage… It is after all, a free market. If it can’t compete effectively, it will become extinct. On the other hand, if it is the better option and receives a much better reception than its private competitors do, it would be wrong to deny this nation’s citizens something that benefits them so greatly… It would be flat out wrong..

So the American thing to do, is to allow this governmental insurance entity to compete on the free market with private competitors. Americans helping Americans. It’s the only American thing we can possible do..

And as an aside, the next time you hear the word socialism patsied about, set them straight. It is Americanism they’re against.. Socialism died with fall of Lehman Brothers and Merrill Lynch. Now, its Americanism. Helping ones neighbor who can’t help themselves..

But then again… there are those with the selfish gene.

If we could owe this debt to ourselves instead of others, we’d be rich from all the compounded interest we’d be paying back… — kavips

There is nothing that a strong dose of morphine can’t cure…. at least to the person receiving the injection ….. Damn… No legs…. Ahhh… no problem…..

Obviously the long term plan is the one we need to tackle first, so short term fixes like the one above, are seen as steps in the right direction, and not random neural contractions found during a soon-to-be-eaten chicken’s last minute.

Long term:

1) We need to spend within our means, both personally and as a nation.

2) We need to pay down the deficit, reducing our national interest payment.

3) We need to control our spending on entitlements: Social Security and Medicare.

4) We need a better trade balance with our trading partners.

5) We will need more cash in order to do all of the above.

We have been lulled into believing that we can spend money that we do not have… Hell we’ve been doing it for 8 years now… We did it for twelve years before that, starting with Ronald Reagan. And it was working fine up until late September…. Why can’t we keep on the same path?

As we have now found out, there is a small problem with taking out loans…. It’s called paying them back. To pay back a loan, some of the money that you are currently making needs to go back to those who invested in you at the beginning. Wait you say… why can’t we get more people to invest in us, and use that money to pay off those who invested in us earlier?

It’s been tried. And someone Madoff (made off) with a lot of other people’s money by doing just that. But eventually somewhere along the line, one cannot find enough new people to pay off the old, and crash, the system collapses.. Sort of like our Social Security system today ….

So if we have a loan, we have to pay it back?

Yes, that seems to work best. Although often loans can be forgiven after it becomes clear that they will never be repaid, and that further attempts to repay will collapse the entire pyramid where everyone loses everything… In those cases, sharing the risk by writing off some of the debts, allows one to begin making money again at some point in the future…..

But choosing to default, or not paying off the loans, also makes it impossible to get loan money later when you really need it.

So how much do we owe?

That depends on how you want to count it.. When you get a loan, there is a price tag attached that is called interest. One pays back the loan plus the interest to the party that fronted the money. After all, that is why people lend money in the first place… to make more of it… So if you bought a loan for $100,000 dollars, you could pay $100,000 the next day and be done.. That is one way of counting how much you owe. But, over time, that house you are buying is going to cost you 2.15 times its amount, because of compounded interest. So saying that you owe $215,000 is also correct….

The current U.S. obligations as of September 30th..( before any of the bailouts were passed by Congress) stood at 56 Trillion dollars. Every man, women, and child now owes $184,000 dollars. If we pay that back over 10 years, that is $18,400 per year of our income going just to the Federal government. Which means that if your family is struggling on $60,000 a year right now, that you had better start planning on how you can survive on $41,600 over the next ten years.

It may not be as bad as it seems. If free health-care becomes a reality, a yearly out of pocket savings of $7800 is a step in the right direction. Now we have just $10,600 to make up…. And if we cancel further investments into our 401 K for ten years, depending on how much you put in yearly, that accounts for somewhere between another $2000 to $10,000 dollars of which you will soon be out of pocket.. One had better hope that Social Security is still there for you when you retire…..

This is not something we have options on. This is a reality that must happen. Of course we can choose to pay it out over a longer time frame and survive with less money leaving our household per year, but over the span of a long time, we will ultimately pay a lot more… It seems better to knock out the debt, learn to live within our means, and once that debt is paid, prosper again after hopefully having learned our lesson over not paying as you go…..

That means that any new money pouring in from the “tax to the max”, must all be designated toward paying down the debt, and not be split off to other much needed projects. That is a hard choice to say no to… but once all debt is gone, less money will be required to be collected to fund those projects on a pay as you go basis. Our tax burden will be much less, giving us more money to spend, yet we will have ample money to fund the projects being built. The economy will grow in that scenario.

Of course this $184,000 is a shock figure designed to wake America up with a dose of reality. A bulk of the repayment will be paid back in the form of corporate taxes… starting as high as 50% and climbing perhaps to 90%. But the American consumer eventually also pays for those in the higher cost of each item he buys, since that payment will be embedded in the price he pays at the cash register.

The corporate rates mentioned above, were the same levels applied to corporate incomes after WWII, which continued and were not relaxed until under John F Kennedy’s administration. Over this time frame, corporations will have to settle for just being in business. After all,… that is what most small businesses do; they are grateful each day they open their doors. There is going to be a new reality that permeates the American corporate business world.

The essence of our nation’s problem is that we have lived off a credit card; one that will be paid by our children and grandchildren. And it has not just been our government that has done so.. Private debt, corporate debt, as well as government debt have all elevated our spending beyond where it should naturally be. This has been going on for so long that most investors thought that this debt/GDP ratio could continue rising indefinitely without ever overwhelming the economy and corporate earnings. In fact, the way it kept growing, we also started wondering if this could also go on forever. The total debt in round numbers is almost $52 trillion. This was not much changed this year due to the credit freeze, but rose $4.3 trillion in 2007, which was over 5 times the rise in GDP. The composition of the debt is $25 trillion in Corporate debt-both financial and non financial, $14 trillion in Household debt, and $13 trillion of Government debt-Federal and State & Local) and the GDP is $14.4 trillion. These debt composition numbers are rough estimates but all would agree that we currently owe 3.6 times our entire GDP….

This debt cycle really started in the early 1980’s when the U.S. savings rate peaked at over 10% and continued downward until this year when it troughed at a negative savings rate. People once again spent everything they made and then some last year, pushing the U.S. personal savings rate to the lowest level since the Great Depression more than seven decades ago.

As anyone who has been on the wrong side of debt can tell you, once the savings rate goes negative, it becomes a lot harder on the next round to change it. For then we have to pay charges on that amount which we spent beyond our means… So not only do we have to cut back to live within our means, but we need to further cut back in order to live within our means AND pay back those pesky charges…..

Under compounded interest any wait to pay back the cost is expensive; sooner is better than later. If we borrow a dollar and are charged with 3% interest, we pay back that dollar and the three cents of interest we owe… If we wait one year and are charged 3% on the dollar-and-three-cents we owed but did not pay back, we now owe a dollar and six cents. That may not sound like much, but when it comes to big numbers, that 3% on our national debt of 10.6 Trillion, becomes $318 billion dollars. One chuckles when Republicans find themselves up in arms over bailouts costing these amounts, but yet when the same figure is just interest, it is just considered the price we pay for living “la-de-da” beyond our means… At 3%, want to know how much interest we will pay on just that 3% interest itself, if we skip a year? $9.8 billion just to pay the interest, on the interest, that we are too broke to pay… “Deficits don’t matter” said Dick Cheney. When no one has money… where do we find that additional $9.8 billion to cough up?

But debt can be eradicated. Here is proof from a fellow posting his strategy.. It is a personal story to be sure, but it shows the proper mental attitude that must be created if one is about to embark on changing his lifestyle for the better….

Just the numbers of consumer debt are startling…. U.S. Household debt soared from 4.2 Trillion in 1990 (the first Bush president) to $13 trillion in 2008. During this period, the average American household dramatically increased its home mortgage debt, from almost $2.5 trillion in 1990 to nearly $10.5 trillion today. Similarly, consumer “revolving” or credit card debt quadrupled from $239 billion (B) to about $950B today. Moreover, the growth of U.S. credit card debt is substantially under-reported by the official U.S. Federal Reserve statistics, due to the tremendous volume of mortgage refinancings that were transacted between 2001 and 2005. At least $350B in consumer credit card debt was paid off through mortgage refinancings, home equity loans, and cash proceeds from the sale of real estate over this five- year period. This is consistent with the findings of Alan Greenspan and James Kennedy, who report that equity extraction was used to repay an average of about $50 billion of mortgage consumer debt between 1991 to 2005, about 3% of the outstanding balance of that debt at the beginning of the year.” Significantly, it averaged only $25.2B per year prior to 2001 (link to Manning’s work)

So how do we responsibly pay down our national consumer debt? Judging from the data provided above, it cannot be done. But a reasonable approach would be to isolate consumer debt into three categories: a) Chapter 7 Bankruptcy; b) substantial debt relief in the range of 60 to 80 percent; and c) repayment of the full balance over a 5 year credit management plan. The first category (a) is for those right on the edge; we know bankruptcy is inevitable, so we get it done and over so that they can start their ten years of rebuilding their credit as soon as possible. The second category (b), is a win win for both lenders and debtors. Just enough of their debt is forgiven allowing them to be debt free in 3 years.. The third category (c) is solvent enough to pay all their debts over a 5 year period on a managed plan. As is done with any bankruptcy, applicants for these programs are mean tested to determine into which category they fall … We can dream that all debts may someday be repaid. That is unrealistic. A practical approach moves forward, determining which debts are solvent and which are not, expeditiously processing those that are not, and in just a short time, all debt is secured and we know what our economy has to work with. No more surprises.

You can determine how your family finances can be resolved by using this calculator provided by the same Manning mentioned above.. I recommend that if you have unsecured debt, you play around with the credit card repayment section, seeing the differences that occur if you contributed your coffee fund, you movie allowance, your HBO bill towards paying down your credit card debt. Those little totals often taken for granted, can make years of a difference in pulling yourself out of debt.

We often hear pontificating towards our governments, local, state, and federal, end with the admonishment that since American consumers live within their means…. why can’t the federal government do so as well…

That is not exactly true. We do a lousy job compared to our parents.

They and their parents bought savings bonds… Which brings us back full circle to our best idea of paying down our national debt… What if a percentage of everyone’s pay check went toward buying themselves savings bonds. Unlike a tax, at the end of maturation, they get the entire bond returned to them with nominal interest tacked on.

Kind of like our parents and grandparents implemented for us growing up. A forced savings plan… “Oh but I want to spend it….” “No, we’re putting it in savings”… With this plan, like a tax, the government has access to increased funds, but unlike a tax, it pays us back. This has three things going for it.

One it helps us save. The American saving’s rate was negative last year. That means individuals spent more than they had… Obviously when the time comes to pay it back, it will not be good for the economy.

Two it provides a intermediate source of funding for our government. Instead of cutting taxes, this plan augments taxes… Since the money must be paid back upon maturation, the government needs to get a rate of return higher than what it is paying back..

Three. Using this money to decrease the Federal deficit, is a win win for all. Essentially we are using this program to buy up our own stock. It will be us who have control over our nation’s destiny, and not…. it’s foreign creditors…. Applying the entire amount bought in this fashion, to paying down our National Debt, will give us lower taxes in the future. The legislation initiating this program could earmark all revenue from these mandatory bought savings bonds, go towards decreasing our National Debt.

It will take great leadership to change our behavior. The bully pulpit is needed now more than ever. Since the 1980’s, we have funded our economy by borrowing. Anyone can be given an unlimited credit card and then tell us he is living well. For a long time this nation has placed the acquisition of corporate profits as the prime gauge rating the welfare of our nation. Now, with acknowledgment that it will take 4 years of GDP to pay off all debt, private, corporate, and governmental, we understand our predicament.

Simply put: to survive, we need to acquire more money than we spend and use that extra amount to buy down debt. Once our debt is down, we can use that extra amount to spend again, exploding our economy through the roof of expectations.

All that I am giving you…. is the gift of time…. — kavips

What is a silver bullet? According to folklore it is the only thing that brings down a werewolf. Other bullets, indiscriminate of what weaponry they’re fired from, are ineffective against that monster who possesses an aura of impenetrable magic. Our collective wisdom of doing what we always done, of trying what has always worked before, bounces off the charging entity… As our ineffectiveness becomes apparent in face of our own annihilation, we find ourselves wishing for any magic item that could neutralize the evil about to devour us; something that could slip past, disable and kill it… To everyone’s surprise some unknown face steps out from the soon-to-be-annihilated crowd and fires one single silver bullet into the beast… The day is saved.

Today our global economy needs that silver bullet.

Appropriate measures must be taken to match the challenges set against us.

When one visits a physician to request his help against fighting a severe infection such as strep, staph, or even meningitis, one does not expect their doctor to limit the medicine’s dosage to a level that just barely keeps one from dying; one goes to get cured…

Here is an example of a conversation that one hopes never to hear in a hospital room:

Physician: “Your tests show us that your infection has now reached 99% of the lethal level… Untreated you cross the hundredth percentile in three days and die… We have determined that all you need is 2 micrograms of this antibiotic, which should just kill off 1% of the infection and keep it from growing any further.. As it grows a little, we will kill off a little, and thereby keep your total rate of infection from growing further and holding your lethal level at the mark of 99%. We are worried that if your body gets too much of this antibiotic, some of it may be wasted and pass through your system, and entering into your urine stream without being used effectively. Your insurance company, who I remind you is paying for your medicine, insists that we follow this procedure so they do not flush any of their future profits down your plumbing, if I may put it delicately.

Patient: “Nice meeting you. I’ll find a new doctor now.”

For those not clued in, the Physician represents those Republicans and conservative democrats more focused on waste than on survival. The patient is the global economy.

Survival makes mincemeat out of old priorities. Any paramedic who has pulled out a human being from a burning car, knows full well that there is a time and place to worry about a potential back injury. Burning the victim alive for fear one might damage his spinal cord, is a misappropriation of priorities. Any top gun pilot knows that when entering a dogfight with two boogies on one’s tail, it is not the appropriate time to worry about the taxpayer’s investment lying in each missile underneath his plane’s wings. Exiting the dogfight in order to save millions of dollars is a misappropriation of priorities. Every citizen should know a little about the Heimlich maneuver. When a guest sitting next to you is obviously chocking, and because of your indecision has begun to turn blue,… to not attempt to save him because your inexperienced pressure might break one of his ribs… is a misappropriation of priorities.

The global economy is in a desperate situation.. To not do what is necessary to fix it, because it may cause taxes to rise in our future, is likewise a misappropriation of priorities….

Here is a quick review of those points previously mentioned. 1) We need to appreciate the scale of our sickness: our economy from top to bottom is about stop working. 2) We need to understand that we, the American people as well as those scattered across the planet looking towards us for leadership, don’t care how; we just want the infection to go away… 3) If we don’t die, once healed we can deal with the costs down the road….

Just heal us.

It is no secret that our crises was aggregated by mortgages. Nor is it a secret that the American large banks are the ones responsible for leveraging-out our global economy on the junk of unpaid mortgages. The collapsing housing market itself is a small bump in the road. But basing our entire economic structure upon the marketability of those collapsed mortgages, with the premise that their value would always rise, is the real scam perpetuated by our domestic securities brokers.

What our securities industry did, today defies belief, logic, and common sense. What they did was market unpayable mortgages as being worth lots of money. Despite it’s insanity, those unpayable mortgages were further leveraged at rates 40 to 1 in some cases. As the “one” collapsed; so did the “40” loans which were collateralized with it…

Today people are out of work, because of the securities executive’s lapse of judgment. Today our automobile industry is expiring because of what these people did. Today most of Europe’s banks have been nationalized, because of what these people did… Tomorrow, our taxes are going to be out the roof…. because of what these people did…

As one looks at the facts of how we got here, one gets angry. As one gets angry one looks towards quick justice to punish those responsible. As one looks towards quick justice, lynchings of greedy financiers begin to look rather promising…. Make them pay with blood….

It wouldn’t be the first time. Heaven knows they deserve it.

But we can learn something from those societies who repaid years of poverty with the actual blood of those who financially raped them… Long after the bloodletting was accomplished, they were still in poverty… In fact, leaving no one left who was competent enough to run the finances of their nation, their poverty extended down to absolutely every one living within those borders, for generations after generations…

Recent memory of the Soviet and Chinese blood lettings are examples how such unfettered justice can bring any nation to its economic knees, forcing it into some form of totalitarianism just to maintain any sense of order. North Korea is another example of what happens when a nation is run on anger; as a result, living conditions there are deplorable.

Perhaps a better tack would be to take a conquered population, and use them to help ourselves from out from our quagmire.. To do so would require forgiveness, a trait often associated with America by others living on this planet…. Proof of the effectiveness of forgiveness can today be seen in the rebuilt economies of both Germany and Japan, and to some extent… South Korea. As we saw from our earlier chapter, helping these nations achieve and regain their former prosperity, was one of the best investments and execution of policy ever made by this nation.

Today, we now apply that same tact and wisdom to our own financial internal problem.. It is to our mortgage brokers who we must now turn to bail out our nation; forget our congressional delegations.

It starts with this simple question. What would it take to cause a household to spend again?

Basically it would take a breather… a collective sigh of relief by everyone out there who is behind on their payments. What if ….. they were allowed to skip maybe a payment or two? Just to get some utility bills paid down, some credit card debt back under their cut-off lines, perhaps pay off the new heater, or new stove they were forced to buy. What if….. they were given 3 months with no mortgage payment and could then use that amount to catch up on their personal finances?

Then after three months, with their entire debt portfolio restructured, they could begin resuming payments and finally with sufficient money at their disposal, continue to pay off the entire loan including the added interest which accrued over those three months perhaps tacked on to one last payment at the loan’s end….

There is a surreal beauty in this arrangement. The homeowner who has fallen behind three months, can now catch up.. The homeowner who is out of work, can survive hand to mouth for at least three months without worrying about his mortgage. The homeowner who is still current on his payments, can take care of other financial matters, and pay off his unsecured (credit card) debt currently robbing him blind with its high interest rates. Those doing rather well, suddenly have an opportunity equivalent to a tax refund they weren’t expecting.. They can spend it pumping much needed money into the economy. Those investors (banks or mortgage brokers) who put up the money, actually turn out to make more off of the original loan than was ever anticipated due to the compounding of the three month’s interest,… giving them a much higher margin on their return… The economy of the United States of America, after 90 days, has completely emerged out of its recession.

More details…. please.

The idea was simple. Instead of solving the economic crises by looking at the macro scale, we went to the other end and asked this simple question to a number of families… What do you need to get back on track? Our moment of truth came when one family head said: ” Really, as long as my job holds out, all I need is to skip a couple of mortgage payments… After two months, I’ll be caught up” Naturally everyone in the room looked at each other and thought, “Damn, that would work for me too.” The more we thought about it and explored it from different angles, the better it looked from every perspective.

1) It frees up a large chunk of monthly family income.

2) It does not add to the national deficit.

3) It does not require any new investment.

4) It actually makes more money for those holding on to the titles.

5) It increases spending where we need it… on the household level

6) That spending can begin immediately, in most cases on the first day of each month.

7) It rewards those who have kept up on their payments; and brings back to neutral those who are behind; and freezes foreclosures.

8 ) Once put in place, it immediately reinstates confidence in America’s banking system.

This is almost too good to be true. In fact it took a lot of probing to find any negatives that might arise from this action.. The only negative impact which we could discover was that some small mortgage companies rely on monthly payments to meet their payroll.. If that action was counteracted by part of the $900 billion dollar stimulus package, there would be …. no negatives.

So we began to estimate the impact… to see whether its glowing results would hold up….

We should remind ourselves just how important the US economy is to the economic function of the global economy. To put it into perspective, the Federal government guarantees roughly half of the $12 trillion dollar US mortgage market through Fannie and Freddy: roughly $6 trillion. For comparison purposes only, the entire 27 member states of the European Union in 2006 had an annual GDP of slightly more than $12 trillion, so the $6 trillion already guaranteed by the Fed, would be half the GDP of the combined European Union economies, and almost three times the GDP of the Federal Republic of Germany.

So if our nation’s total mortgage amount is $12 trillion, the Federal Reserve reports roughly $500 billion per month is listed in this nation as a receivable from real estate…. Percentage wise, that is only 1/4th the consumer debt of this country which is almost $2 trillion dollars per month…

So let’s play: “what if” just as an intellectual exercise and see how a one month mortgage holiday pans out….

As of last summer, 11.46% percent of our personal income was tied up feeding our mortgages. If we were to establish a mortgage holiday, what we are discussing is the release of ten percent of our personal income, or roughly half a trillion dollars into the economy each month. There is no way the US Government with its annual intake of $2 trillion, could finance something so massive. But, just by extending everyone’s mortgage for just one month, presto, we suddenly have it in our financial system. Since the monthly GDP jumps between four and five trillion, we are speaking of a substantial jolt to our economy, sort of like an economic Heimlich maneuver with no serious side effects. And if we do this three month in a row, …. 1, 2, 3,…. the recession is gone.

How does this affect the mortgage industry? For one, they lose $500 billion each month for three, for a dip of 1.5 trillion… But, under this plan, all we did was just postpone the payments, not…eliminate them… That same 1.5 trillion WILL BE PAID at the end of the loan as well as the interest that accrued upon it.. Which means that an extra payment will probably be added… Instead of catching up on three payments, we will at the end of our loan’s original expiration date , probably pay four.. an affordable sacrifice to be sure… At a .5% monthly rate (6% annually), the interest on that 1.5 trillion amounts to $7.5 billion a month.

How does this impact financial brokers?

As we saw above each month the mortgage payments make up one fourth of financial brokers income.. The other three fourths are represented by loans to consumers and business. Therefore this action will put them 25% down for just three months… Too high of a cost, perhaps?

Perhaps not. All across this country most businesses are down between 25% and 40% percent as a result of the derivative scam perpetuated by these financial institutions. And now that we have an option to pull ourselves out of the recession in as little as three months, with a $1.5 trillion boost to our economy that affects no one really and actually makes money over the long term of those loans still outstanding, and we fail to exercise that option because the whiners who brought us here, don’t want to suffer their share of the 25% of pain felt across this country?

Well? No pity from this quarter.

Today we are misguided in how we are dealing with the toxic mortgage crises… The U.S. Census chart 1152 shows us the problem, its cause and its solution.

Home Mortgage Holders of Outstanding Debt
Courtesy of US Dept of Census pub.1152 (Right click for full image)

Notice only a $2 billion dollar difference in the household sector between 1990 and 2007….Next look at commercial banks and the jump in their mortgage income from 2002 to 2007.. Notice how the heavily regulated savings institution sector was much more conservative. Next notice the GSE’s ( Fannie and Freddie) jumped 186% in one year between 02 and 03 and since have been cutting back.. Notice how the private pools and security issuers have swelled the market.. All the while the household sector remained constant.

This chart shows that the debt held by these pools is not real debt but was arbitrarily bid up by financial institutions over the past four years… In other words if I have $10 dollars of bad debt that I’m stuck with, that at maturation might be worth $20 someday, and I sell it to you for $15 dollars, after which you then bundle ten separate $20 dollars bundles of debt together that will be worth $200 dollars someday, and sell them for $175 to someone who buys ten $200 bundles and conglomerates them into a bundle worth $2000 but sells them for $1850….. well, you get the idea… and the product being sold is worthless by itself. We discover that fact rapidly when we finally reach the point where no one wants it…

So we are now at the point of discussing whether to bail out banks that bought much more then $1850 of that bad debt…and now that they know it is worthless, they want to sell it to the government (future taxpayers) at their costs….$1850…. Originally the number of $10 debts we used should have fetched $1000, but the bidding war has them now priced at $1850… Which means that: the $850 has already been pocketed as profit by those along the process.. So in the large perspective of things financial, all that this bank bailout amounts to is: …. taxpayers borrowing money at interest, to pay for the previous profits made by financiers…

Bottom line… since we need those financiers, we may have no choice… The alternative scenario, that of “The Great(est) Depression”, scares us even more….. For when 57.6% percent of home mortgages suddenly go into default, that creates a massive shock for our economic system to handle… No civilization ever studied, has remained intact after suffering an aftershock of that magnitude….

The problem and causes of this crises are now hardwired into those financial institutions. But embedded in this chart is not only the magnitude of the problem…. but a clue towards its solution as well. As one sees in this chart, the outstanding debt up to now has climbed… But getting an extension-of-three-months does nothing to alleviate or increase that amount of outstanding debt… For if no payments are forthcoming, and no additional loans are written across that time frame, the aggregate amount remains constant over the entire span of the three month holiday. The level of outstanding debt is not impacted by the policy of “not-paying-of-one’s-mortgage”, except of course by the interest that accrues over that additional amount of time… If you owe me $500 dollars and don’t make a scheduled payment, you still owe me $500 dollars, plus the interest. At the loan’s end, after all the principal is paid off and the additional interest is pocketed by the lender….. There is no overall negative impact.

So let’s review. If we give ourselves a mortgage holiday for three months, we put a stimulus amounting to $500 billion dollars per month into the hands of households. In three months, $1.5 trillion will have flowed though the consumer side of our economy. Jobs will need to be quickly added to accommodate that large influx of money into our system… Those earning money with these new jobs will of course be able to buy more, and the economy begins growing… This stimulus begins instantly on the first day of the month.. Everyone’s checking account is not deducted by their usual mortgage amount, and that money is instantly available to be spent towards other things.

Why three months? If two are necessary?

Again based on interviews with families, the data was presented in this fashion. During the first month, the most pressing bills, including utilities and collection agencies’ unpaid medical and credit card bills would be paid. As per the Bush tax stimulus check, the first month would show little spending. The second month would allow further catching up of other bills, and provide a little excess left over which could then be spent…. The third month, that entire extra amount would be available for spending… By the end of that third month, the economy would be roaring again…

I’m curious as to whether or not you the reader feel the same… In our interviews we came across no one who was not excited by this prospect… Further controlled studies can be done by others who want to compare the enthusiasm between receiving a stimulus check for $500 to that of not paying one’s mortgage for three months. Our results showed skepticism towards the tax check, and popular enthusiasm towards skipping one’s mortgage….

Would not paying your mortgage for three months get you back on your feet? And would you mind tacking on one more month’s payment at the end of your loan, for the privilege of getting your head above the financial flood swirling around us all?

As we looked at all the data and perused all of the options we could anticipate, this model became the closest thing in recent memory to that metaphor commonly used by today’s politicians: a win, win, win situation… And it pulls the economy out of its doldrums without that tremendous amount of government borrowing that percentage-wise, rivals our nation’s indebtedness during and after WWII…..

The concept is new when used on this scale, but it is really based on ancient tried and true principals found at the heart of our financial markets. It’s simple.. If one is bankrupt, it is better to get a little breather, than lose everything… Our global economy is bankrupt. Getting a loan extension on the U. S. Home Mortgage debt for everyone at the same time is unheard of, but can, if chosen, be accomplished rather easily. Extensions are processed daily for individual loans around the country. Even Donald Trump’s empire would not be here if this type of extension had been forbidden during the late 80’s. We are just extending the loan for three months, and making every financial institution more money by doing so…

So who is out there who might oppose this?

Our best guess? Moralists, idiots, and bigots. The rest will see this opportunity as being beneficial to themselves, to their unemployed neighbors, to the stability of our financial institutions, to the country of the United States of America and eventually to the global economy as this nation pulls its head out from under the cloud of recession far faster than anyone ever imagined was possible…

All by just postponing three months of everyone’s mortgage.

How do we do this then?

We came up with three ways, each dominated by a branch of the Federal Government.

Congress could briefly debate and vote overwhelmingly to postpone all single family mortgages for three months. But there may be some bogging down on some of the details.

Or the President could sign an Executive order and issue a directive that his Justice Department would not pursue and would overturn any lower court case punishing non payment of mortgages that occurred during the three month holiday… Effectively no one could collect from an unpaid mortgage, because under US Commerce laws any state ruling contrary against the three month mortgage holiday, could be overturned by Federal Court…

Finally the courts themselves could take it upon themselves, case by case, through either a judge’s or juries’ decision, that not paying one’s mortgage payment during the declared mortgage holiday was not only legal, but one’s patriotic duty.

In any of the three scenarios anyone attempting to collect upon a holiday mortgage payment, would be guaranteed to ultimately wind up paying all court costs, making the attempt to collect, pragmatically fruitless.

Secondly, there is precedent for closing financial down financial institutions and stock markets, whenever the market is spiraling out of control… Upon his inauguration, FDR promptly closed all banks until further notice. Surprisingly none of those closed banks lost money while they were closed… Only open banks facing runs, lost money.. Likewise, we remember the closing for several days of the New York Stock Exchange after 9/11…. While the market was closed, no stocks lost value… The same principal holds forth in putting mortgage lenders on holiday… Ultimately, as it did with banks and the markets, it restores confidence in the entire financial sector.

The moratorium placed on three months of home mortgage payments will get the attention of every financial markets. Coupled with other parts of the stimulus package, and with forecasts that in three months the entire American economy will be back to normal, as well as knowledge that financial institutions stand to make an additional month’s income on all outstanding mortgages, our lending institutions will appear well positioned to reap any future profits… People will certainly be less skittish about dealing with commercial banks, as the money begins to cycle around and around… once again…. If you had the choice of investing either in the US or China, after that $1.5 trillion began flowing….. the United States, would certainly appear the safer bet…..

One additional benefit from arising from a three month mortgage holiday, is that it forces banks into more lending to both businesses and automobile purchases… If no income is incoming from mortgage payments for three months, then all new loans default to becoming the primary method of generating income. Every bank would be forced to scramble in order to find those new customers who were trustworthy, willing and able to borrow its money…. Those who simply sat on their assets for three months while doing nothing, would fail.

So even though the description itself has become a cliche, if there ever was a “silver bullet” developed that would kill a recession dead, it would be this one… : a three month holiday on paying one’s mortgage….. Just try thinking of what you could do if you didn’t have three months of mortgage, and you can plainly see… it would boot up the economy without swamping our children with governmental debt.

I wanted to give a shout out to Kilroy and Fix Red Clay who have done an amazing job at energizing Red Clay’s school district and who have applied direct pressure to force their school board to get their act together.  Probably the most impressive endorsement which any gubernatorial candidate could have earned this season, would be that one from Kilroy, for if anyone knows what Delaware educational needs are, it is him. Likewise to go from bad to good in Kilroy’s view, shows all just what a great person we have in our new Chief of State.

There are millions of causes out there needing attention.  The one offering the greatest bang for the buck, would be that one which persuades Afro Americans to take education seriously and rise to their potential.  The challenges are multiple, requiring changes within the black community towards appreciating education. requiring changes within inner city schools, as well as requiring changes in our funding apparatus.  The one thing that should not change, is the qualifications needed to graduate.  They should be set in stone……

There are many obstacles to overcome.  Parents who have no time to parent. Uneducated parents incapable of challenging their children…. A curriculum that is interesting. schools financially strapped. bullies. All of these issues involve changes in parenting.

Now there are two ways of acting when meeting an obstacle. The first is to blame or shift blame away from oneself. The second is to own the problem…

This second course is the road little traveled…

The title of this post may imply to some, that black children are the prime problem within our schools… That’s not the title’s intention… Instead it distills into the simplest statement that which we need to do to make our state’s education become world class. For if we can figure out how to turn inner city black children into world class students, we can do for others as well.. Or put another way, if we focus our efforts upon this one segment of our population, and motivate those students to want to learn within our school system, we can do it for all…

The opposite approach, figuring out the “how” for the “all”, has proven far too complex, broad, and controversial to accomplish any of its intended results. That broad approach has burnt up so much money, and has had little to show for all its efforts…

Therefore I am promoting a paradigm shift, if nothing else… I am proposing that we continue to do some things exactly as we are, but instead,… just this time, we measure this one segment as our benchmark on whether we succeed or fail… If we can define the problem to a level where we can manage it…. we can fix it. For if we can succeed at raising the graduation level among inner city blacks, for if we succeed at increasing the numbers of their group entering college, and above all, for if we succeed at instilling in them the hope that education is truly their opportunity to a better life… then we have something to show for our efforts…

Here is a rough draft of what needs to happen in Delaware.

A) We make the SAT the standard on which we base our results..

B) We begin training to that standard from the beginning of our educational process.

C) We focus tremendous effort on the 9th grade: allowing none to slip by that critical marker.

D) We redesign our districts and return to neighborhood schools, re-engaging bonding between schools and their local community. We recognized shuffling of money may be required for impoverished areas.

E) We drop Black History Month and other ridiculously mandated curriculum that do little to improve our student’s competitive edge. Instead we focus on the basics: math, science, reading, writing. (Social Studies: what a fricken waste) If children are knowledgeable in the basics, they can do the research of extra curricular topics on their own…

F) We make being a geek socially acceptable, by establishing an ample rewards system for those who perform well; not something one feels forced to hide in order to maintain social acceptance among one’s peers.

G) We reward improvement… The simple goal of shortening the school year if SAT scores go out the roof… would be a powerful incentive upon those involved, students, teachers, parents, and administrators, to scratch a little deeper and find solutions that work, which then move them (and us) toward our goal of a world class education… And something that simple, wouldn’t cost a penny more. It would actually cost less.

The last segment holds the key… There have been many times when I have needed something done, and my admonitions have fallen upon deaf ears.. But attach an incentive to an impossible proposition? Nine times out of ten, it gets done… And even on the tenth time…it comes damn close….

In tough financial times, all of these propositions cut back millions on what we spend today. If we start, then in six years… those in sixth grade now, can be world class by 2015. It can be done if we just focus on those problems which interfere with a black child’s right to learn.

Just keepin’ it simple.