The Routt Report

John and Johnson . . .

    "the people who take a shower before they go to work get bailed out, those who need to take a shower after work get thrown out"

-Leo Gerard

President, United Steelworkers

  Once, many years ago, my good friend Leslie remarked on my style with women, she said "you are like a wolf in sheep's clothing but your costume isn't very good you have fangs and claws hanging out". She was offering equal parts jest and friendly advice, but I offer that as a premise to this post in response to a comment on my previous offering, and events since then. My last post was a dance, being on two practical sides of similar ideological issues. I tried to appear rationale as opposed to a hypocritical. 

   Thanks to courage I oddly found watching Rachel Maddow's show last night, I will now own my hypocrisy.  In a segment comparing the hand-wringing over the "Big 3 bailout" to the weekend, cover of night cash injection to citigroup of roughly the same amount, she highlighted a concept that I have flirted with, and am now prepared to marry. The inherent societal inequity between the ease of white collar assistance and the aversion to blue collar aid.

  Quietly, while many were watching football, or finishing their shift at their second or third part time job to make ends meet, the Citigroup was offered 20 billion new dollars so that perhaps they would not have to layoff 52,000 employees. In our current climate I have no problem with spending money to keep people employed. 

  However, citigroup just got 25 billion to buy other failing banks, in which they failed, they also proceeded to spend 400 million for naming rights to the new home of the New York Mets. (I'm a diehard Met's fan, which I realize removes my last shreds of credibility and judgement). Saving 52 thousand jobs is laudable, the money citigroup received comes out of the previously dedicated T.A.R.P. funds, and to their credit citigroup did present a plan that is "workable" in the view of outside objective experts. But with that in mind how can our federal government swoop in to salvage 52 thousand white collar jobs without controversy yet stall at the prospect of saving millions of direct and ancillary jobs with the same price tag? If citigroup like the big 3 is in it's predicament because of mismanagement then clearly management is not the decision making standard. If 52 thousand medium to high paying jobs trump an untold amount of lower wage jobs then clearly maximizing employment salvage is not the trigger.

  For myriad reasons people of all walks of life have mused that this is a dangerous time in terms of the direction of the American Republic. To pile on to the paranoia I will submit my greatest fear. I offer that we are taking steps towards feudalism. We are on this path not due to malice but rather by the temptations of good intentions. Here is my case;

  1. People are born into an economic class, there is nothing to do about the accident of birth, but what happens thereafter is important. Generally speaking, those born into an economic class, are born into a community that shares that status. They attend schools with their peers, and absent external forces generally stay within their class, as they are only shown opportunities consistent with maintaining their status. In short, with rare exception the wealthy stay wealthy, and the not-wealthy stay that way. 

2. Those who do not have wealth make attempts through labor to gain it, those who do have wealth make attempts through policy to protect it.

3. Eventually the cultural cloistering of the have's and have not's creates a gap so large that one class has no means to empathize with what the life and needs of the other class truly are.

 That is the societal stage in which this drama unfolded;

1. Congress, as a result of their disconnect with their constituents fails to realize that borrowing 150 billion dollars to put $600 or less into the pockets of taxpayers does not meet the cost benefit analysis test. (Anyone in the mood for cake yet?)

2. A few months later Congress sees fit to spend billions of dollars to bolster individual investment firms, banking institutions and insurance companies.

3. A month later Congress finds the will to authorize the mortgage of our future to the tune of 810 billion dollars in loans, bailouts and pet projects, a double down on the voodoo philosophy of trickle down economics.

 While programs take time to work and doing nothing was clearly not a viable option, the actions of our leaders is consistent with the steady march towards feudalism. Wise or foolish, the economic recovery act of 2008 was born of good intentions, however with a population of roughly 300 million people, had we borrowed the combined 960 billion dollars and distributed those funds equally for every man woman and child in our nation, that would have equated to about $3,000 per individual, $6,000 per couple, $12,000 for a family of four. That unlike $600 or less, would have had a real impact on people's monthly overhead, for many that is several months of salary. This alongside aggressive debt restructuring (like we're doing now) would perhaps have returned liquidity to the financial markets using trickle up economics. If people spent the money recklessly it would have stimulated the economy through the demand side. If people used the money to become current on debts that would have stabilized the housing markets and avoided an untold amount of foreclosures while fortifying the balance sheets of lending institutions. Even if they only saved the money, banks would have had enough cash reserves to continue issuing both personal and commercial paper. And at the very least if all else failed, the lowest end of the economic spectrum would have had savings to ride out some unemployment (a lot of which would not have happened anyway).

 

   Our current situation has many causes, not limited to supply side, trickle down economic theory, and lack of financial education for our citizens. We attempted to correct this course by slowing down with half measures like the stimulus package instead of full throttle reverse by at least taking a shot at demand side, rising tides economic policy, and aggressive financial education efforts. I guess "for every action and equal but opposite reaction" never occurred to an administration so opposed to science.

  My feudalism fear is about as warranted as the socialism fear which is to say, not at all. As unfortunate and rife with human costs our situation is, it is simply a correction that was inevitable and all we can really do is not panic, not make too many mistakes and see this for what it is, a once in a generation opportunity to address issues of generational poverty, education inequity and climate change through public works projects while it will be politically popular.

   That said, now that the election is over it is safe to say I was originally a strong John Edwards supporter. I hope that his current personal foibles don't keep him out of public life for too long as he was absolutely right about "The two Americas". Lyndon Johnson spoke of this in his term as President and our war on poverty is one of the few places in American society where we have made significant negative progress. Lyndon Johnson, at heart a populist, warned of the costs of the rift between the poor and everybody else. John Edwards in his campaign rightly pointed out that now, the rift is between the Very Wealthy and everybody else. It is important to note that I think having wealthy people is a good thing, in fact I aspire to be wealthy myself at some point. I also do not believe that taking from the rich to give to the poor is a good idea. But it is vital to the continuance of the principles on which our nation was founded to have the tools in place where personal responsibility is rewarded with enduring self reliance. 

  Our founding documents provide for the right to the pursuit of prosperity, but not a guarantee. However if we do not address the issues of generational poverty and education inequity, we find ourselves in violation of our core constitutional obligations. Worse if we continue to pursue the above policies forged in ideological disconnect, and do not bridge the cultural divide between those who lead and those who are led, we will only ensure that the wealthy will gather more wealth at the expense of others instead of in concert with them. If we do not, if only temporarily redirect our focus the most benevolent actions of people of means will only result in long term dependency on the  wealthy by the poor.  Whether the relationship is based on employment or housing,  our current path without caution and re-prioritization will only cause those with means to consolidate tremendous wealth and further bifurcate our society. 

  Finally to speak to the criticism of my post "The Prius Problem", I'd first say, thanks for the comment and keep them coming! I am a product of conservatory training. My educational background is of the classical training where improvements come from criticism and deconstruction by the instructor. For me this blog is equal parts sharing my views and an educational exercise. You the reader are my instructor, without your comments I cannot know if my thoughts are being conveyed with clarity so I respect and encourage your comments on both the content and the style. In the classical training model it is the obligation of the student to also be self critical and defend their actions. 

 I will begin with self criticism. My greatest weakness is brevity. I attempt to make connections between opposing arguments, because I am a "big picture" thinker. I realize however that I am not alway efficient with language.  A lengthy thought process is no excuse for verbosity. Further, from my experiencing teaching I don't assume prior knowledge. Speaking to prerequisite information can clarify an argument, the liability however is that it can at best be redundant, and at worst appear smug. With the context that I intended to speak to a broad audience on complex issues, by all means offer critical analysis as to where I have added more than is necessary or  simply have stated something to prove that I know it.

     I strive to present the wisdom of the argument, not the author. 

  With acknowledgment of my deficiency in brevity, I defend my rhetorical style. I use "big" words. And I will continue to do so. I make bold statements and will continue to do so. I make bold statements because it is not my intention that the reader necessarily agree with me but rather to provoke thought and discussion. Without provoking argument how will I know when I am wrong?  My use of vocabulary is not in spite of my modest upbringing but rather in honor of it. My mother, my teachers, and my friends who have been sources of intellectual and personal nurture did not make financial and personal investments in me for me to sound uneducated. I may have come from a humble beginning, but my world view has been shaped by my formative years in the playground of a housing project as much as my  language was synthesized in the hallowed halls of our nations finest private institutions of higher learning. I have strong ties to, and my desire to work in public service is a result of, my relationship with working people. I do not believe that even the most common are incapable of understanding my words, and I further disagree that the case of the struggling can be made without the most eloquent of language. Common vernacular is too weak for uncommon challenges.

  And finally ahead of this Thanksgiving holiday I would like to share how thankful I am for the great people in my life, and diversity of experiences that have made me whole. I am eternally grateful for the opportunities that have been presented to me, particularly this year, but over the course of my life that have given me a rare understanding of our nation, our society and myself. With the challenges ahead both personal and public, I close this year with a profound sense of good will, a renewed sense of providence, and a reaffirmed belief that we do, for our challenges, live in a time that has the greatest level of opportunity afforded to people in the history of mankind. May you have a joyous holiday season.

The Prius Problem

  I'm a used car salesman. A job does not necessarily define a person, as I am also Principal Clarinetist of the Wyoming Symphony, a Citizen at large member of the City of Boulder Downtown Management Commission, all the while I have degrees from Juilliard and the University of Colorado. I say all that not to down play that my "real job" is that I'm a used car salesman, because frankly I don't believe my profession needs defense. Like all professions there are the good and the bad actors. But I do present the breadth of my professional ties as a preface to this post because it will be obvious to the reader that my interest in the subject goes beyond simple desire for the best interest of our country.  

   My livelihood is directly dependent on the health of the credit markets and the auto industry. While my connection is direct, it should be noted that the jobs of many in our country are only a degree of separation or less from the health of these industries.

   I was opposed to the  economic recovery act of 2008. I was also opposed to the bailouts of individual firms that preceded it, and I saw only folly in the economic stimulus package. Most people can't even remember what happened to their stimulus check except they remember that it didn't solve any of their problems. 

   Perhaps the multiple bailouts forestalled economic tragedy before an election, but to the 6.5% of Americans unemployed and the untold amount that are under-employed our nations financial woes are real and the academic discussion of "it could have been worse" is uninteresting. 

   As congress and our president weigh options for a $25 billion rescue for our automakers, I struggle to see the logic. In defense of congressional democrats as well as the president, the plans do not involve new spending. The democrats want to include the big 3 in the $810 billion package (yes $700 billion is the amount marked for stimulus but the full price tag after pork was $810 billion and the media should not let the public forget it) while the president wants to expedite and re-direct a loan program already approved for auto  industry innovations. 

  However  GM, Ford, and Chrysler do not exclusively make up the American auto industry. Makers like Toyota, Nissan, Honda, Hyundai, and even BMW make plenty of cars right here in America. Walk out to your import right now and check the first digit of the VIN#. If it is not a W, J, 3 or Y, then your X5, Accord or Outback is made right here in the U.S.A. Some have argued that it would be unfair to the employees of those makers to tweak the market in favor of the Detroit boys. They question why these foreign makers who pay good wages can succeed where our domestic brands have failed?  More on that later . . .

 The reason why it is prudent to consider salvation for the big 3 is that the foreign makers rely on the same suppliers and the same basic retail infrastructure. With the failure of the American makers it does put in serious jeopardy the supply lines and sales mechanisms for the entire industry. The ripple effect of unemployment from the assembly line, to the sales floor, to the lunch counter is different than the financial markets in the sheer number of people and their unique unpreparedness for unemployment. Granted there were low level and ancillary jobs lost on wall street, but the majority of people on wall street did have personal saving safety nets. THIS IS A VERY DIFFERENT SCENARIO.

  The American auto industry has one unique problem. GM, Ford and Chrysler's biggest operating problem is legacy. While the leaders of industry have fought to maintain our current private, employer based health care and retirement system it is ironically crushing them. The big 3 are paying through the nose entitlements to people who have not worked a day in 20 years. That is not to forgive management excess and greed, but that is a drop in the bucket compared to legacy entitlements. (Not to mention those entitlements can't keep up with inflation anyway)  The long term fix is to change how we do health care and pension. In the short run, perhaps the best approach for federal intervention is to buy those health care and pension plans. Relieving the operating cost pressure may free up capital for innovation to spark demand for American cars.

  But aside from the political hot potato that would be, we all know that entitlement problem is not the entire problem. The American car companies have a Prius problem. 

   GM had the electric car. Let's assume that it was in fact a financial disaster. Okay fine. Let's further assume that the bigger the vehicle the more profitable it is. The issue is foresight and judgement.  While Honda built the insight, the first mass marketed Hybrid car, they also  built the Ridgeline. Volkswagen introduced the TDI while making a foray into SUV's with the Tourag, and Minivans with the Tiguan. Toyota cornered an entire market with the Prius while competing with the big 3 with models like the Tundra, the Sequoia, and the Highlander. And what did the American makers do? They made their fuel efficient cars bigger and less efficient, and doubled down on SUV's and trucks. Since when does it make business sense to have a less diversified portfolio?  It's not as if they did not have the example of the competition. It's not as if they did not see their market share fall and see who and what was replacing them. The imports where wise, not lucky. Even though fuel was cheap and credit was cheaper, they found market voids and filled them. They invented the alternative fuels market, they put a stranglehold on the efficiency market and just incase the SUV wasn't a fad of cheap oil, they competed with the American's on their own 10 yard line with high quality SUV's and Trucks built by American's in American factories from Mississippi to Kentucky.

   Now that the chickens have  come home to roost, GM is 2 years away from selling their most innovative product. If GM wants cash then fine, but they should use it to put the Volt in showrooms NOW and it needs to be the price of the Prius but they want to sell it for the price of 2! The American car makers failed at a fundamental of business. If your competitor is making money doing something, then do it better and cheaper. With the level of mismanagement it is hard to conclude that giving these firms any money is a good idea.

  So I, like many, struggle. If the government is going to step in, it has to do it now, GM and by extension, Ford, Chrysler as well as the American arms of import makes cannot survive until January, and they will not recover from bankruptcy. Aside from the fact that these companies will find it nearly impossible to raise capital in chapter 11, even if they could, the mass unemployment will make innovation unimportant when there are no customers to buy. After all, the auto industry at the end of the day is primarily in sales. Further as we approach the holiday season which is important for all retailers this uncertainty is causing people to hold their money crippling the broader economy. Even if our nations leaders finally throw up their hands and say that we're going to let the the big 3 fall, that would actually be better for consumer confidence as those who know they will be unemployed will likely spend to make this one last holiday season before the truly hard times hit rememberable for their kids and their families. But instead we wallow in partisanship. Nothing is worse than uncertainty.

    The democrats could wait until January and have it their way which will be too late for not just GM but for Toys R Us, Macy's and every shopping center and municipality that relies on those sales tax dollars across the country. Or they can cave, let the president have it his way and introduce new legislation for industry innovation next session when the man in the White House won't have an itchy veto pen. But as late as November 17th we are stalled in the exact partisan gridlock the American people voted against only 2 weeks ago.

  I am too torn between my personal best interests to decide if bailing out the big 3 is truly in the country's best interest or not, though as stated earlier this is different than wall street and I'm inclined to believe that there is nothing academic about what will happen if even one of the big 3 closes. We know that dealers big and small, franchise and independent, along with your neighborhood mechanic, parts store, and by distant extension perhaps diner and toy store will not be far behind in going under taking irreplaceable jobs with them. 

  Since we have already made so many fiscal mistakes, since we have shown sympathy to the top of the tax bracket at the expense and despite vocal opposition of the bottom, since any misdirection of funds can be corrected through legislation in 2 months. Whereas in these trying times it is more important to get something done than be "right" congress should either pass a bill or stop talking about it. We can't solve all of the auto industries problems with the stroke of a pen, But we can cure the uncertainty that is plaguing our retailers in some short measure and perhaps save their holiday season. With knowing their future perhaps people will even have the piece of mind to buy a ticket to their local orchestra's holiday concert . . .

   The question that needs to be asked from a point of dispassion is, What is the best way to protect American Jobs? The answer is pass legislation now. To the person on the receiving end of the paycheck, it doesn't matter who crafted the policy or what it might do. Our auto makers must solve the Prius problem, the Democrats are right about that, but let's talk about that in January, for now lets take action based on the path of least resistance. Democrats will be behind the wheel soon, if the republicans want to redirect fuel efficiency money, let them. It's a 9 week problem, 9 weeks working class Americans don't have to spare.

  

I'm either a romantic or a damn fool . . .

   Whenever I'm in Casper for a symphony concert, (yes I realize that from the first sentence I have betrayed my many disconnects from most of society and thereby discredited this post before it even begins) I like to have breakfast at this one dinner with a great breakfast special. It's one of those archetype establishments, just off the rail yards where young parents drink soda with breakfast and sit in the smoking section with their children. Where the tattoed waitstaff serve bacon and eggs to the parolee waiting for a ride to court, the unemployed waiting for their next big break, and the Juilliard grad waiting for his orange juice. This is a crossroad that doesn't exist in Boulder, Colorado, and existed only as romantic idea to the boy who grew up in Queens Village, New York who longed to gain a better understanding of this diverse nation.

    From the breadth of my experience what I have learned is that the folks in this resturant have more in common with the people I know in my otherwise elite proffesional life and the people I grew up with than any of those groups will ever know or admit. Yet because of assumptions confirmed by geographic but more importantly ideological distances, precious little flows between these distinct and similar worlds. The important differences are meerly semantics and scale. So while most people of the "blogging" class choose a coffe shop for their musing, I prefer the platte river diner in Casper, Wyoming. 

  

   One day a year however the apparent competing values are exchanged via a vote of the people. This is the opportunity for society to look in the mirror and truly see itself. However like the compulsive dieter, the denial of the image is at once a result of the distortion that we know but can't define, as the unwillingness to accept the truth. 

   As in our personal lives, we can only address what we know. Society in the same way is the only entity that truley knows itself. While any increase in voter turnout is to be applauded, it is important to pause the celebration breifly to confront the fact that if our democracy was a student in any public middle school, the 64% turnout would earn an F on the final exam of election day. Any percentage point below 100 is by definition a distortion of the image of society. With a historic 64% of opinions recorded, we lack the input of 34%. What do those people know that we don't? What mistakes will we make without their insight? How can politicians know what's best for society when society doesn't know itself? 

   The most troubling statements I heard from people as the results of this election came in was the shock by the intellectual elite that I live with, that our nation could elect a black man with such decisive margins. How can anyone be surprised? Is it possible that those who pride themselves the most with an enlightened lifestyle are actually woefully ignorant of the good nature of people who have less economic and academic means? Has the intellectual class proven it does not know what the majority has known all along? Perhaps this is our greatest political problem.

  

   I was not surprised. I have always observed that more people than not live without bias. More people than not, if given the opportunity prove themselves to be selfless. More people than not are of the opinion that rising tides economics makes more sense, not because a college professor told them so, or latent guilt of their generational wealth compels them, but because the circumstances of their life have demanded it. Americans chose Senator Obama not because of desire to make history, but rather because on his merits, they see Barack Obama as the best option to solve the problems they face. We have to give ourselves more credit as a society, but more importantly we have to find the silent 34% and get their input. 

    With our problems I have only known America to be a society that is actually better than it recognizes. This viewpoint has been viewed as naive by many, but it comes because through accident of my birth, my interests and my pursuits I have crossed the many bridges that span the rivers of ideological divide. Like Senator Obama I have seen and lived the myriad social strata and as a result have an insight if not true empathy to the logic of why we segregate ourselves. My life experiences may be unique, but rarity does not equal invalidity. My beliefs are always confirmed as voter turnout increases. Let's not forget that once and only once our scholar democracy did earn a solid B. Once with a voter turnout of 81% America elected a President with controversial social progressive values. An unknown legislator, the standard bearer of a new and unknown political party from a backwater state, the clearest image of our fundamental values showed us that we needed a leader like Abraham Lincoln. With that in mind I reject and dismiss out of hand any argument that modern America is not a tolerant and inclusive society.

    Let us not confuse imperfection with the lack of progress. Instead let's imagine a democracy with 100% participation. A society where the imperfect image we see in the mirror is at least accurate. In order to de-corrupt our elections we have condemned lobby groups, and corporate money. Some have even criticized the role of political parties, a critique that George Washington himself would concur. But as we have seen by the seemingly contradictory candidate and ballot measure returns, with an increase of individual participation, the influence of special interests groups in all forms is reduced. This is not to say that people should not organize based on common values. I rather believe that lobby groups, unions, special interest groups and political parties are a factor of efficiency in the public debate, however until we approach 100% individual participation, even the tools of organization will be distorted. 

   We know that people will vote their best interest when it is clear that those interests will be served. Rather than waste time and energy deconstructing tools of organization we should turn those efforts to creating a culture of participation. If everyone voted their best interests, society will know itself. When we know where we are, we can know where to go. The only way to perfect our union is to increase participation. Society knows itself better than any individual can. If we create a culture of participation we can elect politicians we can trust, because as many republicans learned in this election, like democrats did in 1994, elections have consequences, but those consequences are earned in a term of office. 

   I don't know if we will ever completely live in a society without broad ideological differences. I'm not even convinced that this is even a valid goal. As I have strived to define myself in the context of the worlds in which I live by accident and by choice. As I have struggled and failed to clearly explain the values, similarities, assets and liabilities of one world to another, I have come to the conclusion that it is perhaps best to accept the beauty of a society that can sustain these happily disconnected worlds. 

                But what is true, is that in order for us to live our separate lives in cooperation rather than competition we must reach a unified culture of participation.

What we now know . . .

 The results of this election told us more about America than just who the next President will be. 

  At the risk of sounding obvious the election of the first "non-white male" President is a big deal. What is less obvious is why exactly this event is a big deal. We habitually make a big deal of the first "non-white male" anything for good reason in our society. Let's not forget that our founding fathers, benevolent in the context of their era created a society that by design excluded anyone that wasn't a white male (or protestant and rich for good measure) so any milestone is a cause for celebration.  

  

What we too frequently forget however is in the interim, we should credit ourselves for making steady progress towards reconciling the spirit of equality  with the letter of our founding documents. 

   We live in a world where the disease of bias and intolerance does still plague far too many. Those who suffer from this illness as well as those who are afflicted by the symptoms should not be forgotten. But what the election of Barack Obama has shown us that this infection is no longer an epidemic. Senator Obama will rise to the Presidency with the confidence of Americans of all backgrounds, but like his predecessors he secured victory with the endorsement of the majority of white males who cast their ballot. There were many who as late as the announcement of the returns questioned whether this outcome would be possible. As late as the projections of the winner some held doubts that America was ready. Barack Obama, however, like so many successful people of color knew that not only was America ready, but this is  a place that America has been for quit sometime. We are not perfect but in the pursuit of the perfection of our union, leaders like Senator Obama, and to his credit Senator McCain as evidenced by his campaign understood that by and large Americans consider the content of the characters running for office in concert with the color of their skin.  

The passing of this milestone does have significant ramifications for our society that are enduring. For example, like my academic understanding which falls short of empathetic connection to the civil rights challenges of my grand-parent's generation, my grand-children will not have a context of what "it was really like" to assume that only white males can hold the highest office in the land. This disconnect from history, the movement from painful wound, to abstract historical fact is to be celebrated as it is society's way of healing. It is important, but it is however not a big deal.

The closing of the chapter in our history where we believed that our racial divide was insurmountable is to be applauded. Likewise, the assumption that those who do not share our level of education, wealth, geography or whichever self selecting demographic we choose to define ourselves are incapable of considering the public good, as we suspect or they evidence the symptoms of bias  is a step towards bridging our intellectual and ideological divide. This is noteworthy and laudable, but it is no big deal.

What is a big deal is that we no longer have an excuse to not address our biggest social ill. While we have aggressively treated the crisis of bias, curing some, soothing the symptoms for many, another tragic illness has infected our society and is now at epidemic portions. Poverty demands our full and undivided attention, but for too long we have confused this new disease alternatively as a symptom of racial bias or side effect of the treatment. Now that we have proven to liberal and conservative alike that when it truly matters, that when it's a question of the direction of our country, that we are capable of bridging consensus  across the river of race, is it not now the time to give ourselves credit for reliving the crisis of racial inequity? Is it possible that we can now recognize the crisis that is the epidemic of poverty?

Poverty is a self perpetuating disease. It is also pervasive and a woefully inefficient aspect of society. All of society's ills from crime, to violence, corruption and greed and yes even racial bias itself stem from the competition for limited resources that poverty compels. The good news is that many of the treatments for bias are also effective in treating poverty. Also like the crisis of bias, we will get to a tipping point  where the cure will become self perpetuating. For example one very effective treatment for poverty is education. An effective dose of education includes more than simple academic instruction but also includes vocational and practical training. Investments in education and the resulting reduction of poverty reduces the need to finance  mitigation like jails and social assistance programs. As those resources are required less, the capitol can be diverted to education and other programs that promote self reliance.

So at this juncture where we have seen our society in the mirror, where we have viewed the improved,if imperfect image, the question is will we accept the lesson and redirect our focus accordingly, or should we continue to sooth the symptoms of a waning crisis because the realities of the emerging epidemic are too daunting. Where the crisis of bias challenged our souls, the epidemic of poverty will challenge our conscious and fundamental self interest. 

America's struggle with bias is unique to our history. Since it is a problem we invented we can invent the solutions. What the election of Barack Obama has reminded us is that the only known cure for bias, is the example that the premise of racism is unfounded. President elect Obama, along with Condolezza Rice, Colin Powell, Oprah Winfrey and the  list of successful black Americans who proceed them set the stage for the extension of that list beyond them, not because they were able to rise above the disadvantage of historical bias, but because their unquestionable excellence forever dispelled the concept of genetic disparity. Poverty on the other hand is a social disorder as old as society itself born of the underlying human nature of self interest. Like the example of successful women and minorities that have broken the myths of bias, exposure inoculation is the only cure for poverty. The virus is self interest, but it is self interest itself that will immunize future generations. 

What we know of self interest is that it is reliable. In order to reform our economic framework to reduce poverty the case will have to be made that it is in the best interest of the wealthy to reduce the plight of the poor. We have tried with limited success mechanisms to encourage philanthropy but to move to a culture of economic opportunity we will need leaders who can speak to every social class in their language. As a person who has lived in black america as well as white, working class as well as elite, President Obama will be uniquely prepared to play interpreter. If we can frame the debate of poverty as not a crisis of conscious  but a practical matter of efficiency we can make progress to break the epidemic of poverty using the very self interest that is the root cause.

The results of this election have told us that America is a better place than most of us realize. The charge that it has left us is to take head on the greatest social challenge of our day, which has been greatest challenge of society since there has been society.

   Armed with the tool of self interest and the knowledge of the good nature of Americans confirmed by these poll numbers, we can inspire the innovation to reduce poverty, rather than cajole results with guilt. As a practical matter we will need to reform the finance of education. If we do not ensure that all children have equal access to quality primary education, the scourge of poverty will erase our progress and destroy our union. We cannot concern ourselves with the "how" of education. The "if" is what matters. It does not matter "how" we fund schools, it matters "if" all of our schools are modern with excellent teachers in every classroom. It does not matter whether the school is public, private, charter, or the result of a voucher because we can no longer afford to have a marriage to a specific mean, but rather commit ourselves with the end. We live in diverse states in a big country and the funding mechanisms and practical delivery as a result will vary. What matters is if we are funding our children's education in a way that is egalitarian rather than equitable because we have learned that equitable is inherently unequal across the socio-economic spectrum. We achieve these goals by the example of why the investment in education is simply more cost effective than the costs of mitigating the consequences of generational poverty. 

     My hope for our next President and prayer for our people is that we have the courage to tackle this problem and the patience to see it through. In January if we choose to begin this journey we need to understand that it will take longer than 8 years. It has taken more than a century to heal the wounds of centuries of oppression that yet still occasionally bleed. Economic inequity is a cancer that has festered for and epoch so we cannot reasonably expect to send it into remission in a generation, let alone the term of office of an American President. But along the way we must acknowledge our progress as it is made. As we travel this path we can recognize failure and set back but we must never concede that we are incapable of doing better. This election has confirmed the long held position of many who have long known that America is indeed a more perfect union, and for those for whom this event has for the first time caused belief that in America all is possible, let's now join together, set aside the points we disagree and move with deliberate speed  to eject the tumor of poverty. It will not be easy, but what we now know for fact certain is that regardless of race or sex, in America all is possible if a child is given the tools of education. The only barrier that is universal is poverty. This election only removed a brick, it is now incumbent upon us to tear down the wall and allow the flood of prosperity to flow border to border and sea to sea.

This is what we now know, and it is a very big deal.

Rum, Racetracks and Arrows . . .

  I  have never been so hopeful that I'm wrong. I hope that my views that a bailout bill's undermining of fiscal discipline and exacerbating effect on the fundamental cause of our financial crisis will be proven a naive and ignorant viewpoint by history.  

   I hope that what started as an unprecedented 700 billion dollar devaluation of our currency that has bloated to 810 billion will introduce liquidity that will in fact reverse the decades of damage in mere months. 

   I hope that financial markets and individuals will somehow learn despite evidence to the contrary, that fiscal responsibility is a requirement in society as there will not be endless offsets to gross mismanagement.    

   And finally I deeply hope that by adding 110 Billion dollars of special interest give-aways for Rum, Racetracks, and Wooden Arrows, we do not teach our elected representatives that if you dig in your heels in the name of representing public will, the reward will be fantastic sums of cash for your project du-jour, public will be damned.   

  I truly hope that in ten years when total financial collapse was avoided, fiscal responsibility returns to Wall street, Main street, the Side streets and Pennsylvania avenue, I will have to accept for responsibility for my reckless, and irresponsible, viewpoints against the economic recovery act of 2008. I look forward to the apologies I will offer to those who were simply wiser than me. I cannot wait to admit how woefully wrong I was and thank those who truly saw the scale and scope this problem in ways I was clearly incapable of understanding.  It is curious however that a bill that was not good enough, that was to expensive, has apparently become palatable with the adornment of 110 billion worth of lard. I hope that a body that finds a steady diet of pork so irresistible in the face of self described cardiac arrest will survive long enough to prove me wrong and accept that apology.

Do not resuscitate

 In an unexpected and welcome display of leadership under duress, the people's house rejected a fool hardy scheme to borrow extraordinary sums of money to forestall an inevitable market correction. The economic stabilization act, otherwise known as a bailout was destined for failure because it was based on the same failed economic policies that set the stage for this economic crisis without addressing the behaviors in the public that exacerbated the philosophical flaws.  Let's for a moment assume that this situation is completely the fault of one sector of the economy, for the sake of argument let's say realtors are 100% solely responsible for this market meltdown. If it weren't for those awful realtors tricking innocent consumers into buying houses outside of their budgets, then all of this could have been avoided . . .

   

NOT TRUE, the evil scheme of this malicious industry would have actually worked out just fine by and large had there not been a perfect storm. And no matter who you choose to blame for this collapse (HINT it's pretty much everybody's fault)  the malfeasance would have sorted itself out in an organized fashion had not the following things all happened at the same time.
 

 1. Stagnant to declining wages

  2. Skyrocketing consumer price index, particularly in the energy sector 

  3. Devaluation of the dollar  

  4. Stagnant to declining property values
  

   The economic stabilization act sought to return liquidity to the market by introducing large sums of cash. Sure the government would be "buying assets" of which no one is truly sure about the value, but the point is that there would be a lot more cash in the system. This would have only exacerbated the devaluation of the dollar issue, thus driving up the consumer price index, effectively offsetting any increases of wages, forcing more foreclosures, which adds to the housing stocks and devalues  property. This bailout effectively hits everyone of the problems and makes them 700 billion dollars worse. Of course there are other externalities such as those who defaulted on their mortgages because health care issues, student loans, bad luck . . . However the market simply cannot survive this perfect storm. The bailout does not address the fundamental flaw of deregulated markets, financial illiteracy. If Americans were financially literate they simply would not have entered into bad mortgages, (or car loans, or credit card agreements) in the first place.

   There is no doubt that without a bailout our economic climate will continue to deteriorate however congress should not attempt to rescue this bill. The only possible benefit of this bill passing would have been the psychological effect on the markets. However that ship has now sailed as well. Congress had no good options but they made the wise choice. Trickle down economic policy, coupled with financial illiteracy in the public has finally born it's fruit and the only practical solution is to let the cards fall where they may.   

  That is not to say there is no role or responsibility for government intervention, but the financial markets need to learn consequence. Free markets can work provided there is not the distortion of a government bailout should we get too greedy. This will be a painful lesson but one that must be taught. This financial bailout was simply more trickle down economics, pouring 700 billion taxpayer dollars into the top of the financial market with the hope that it would free up credit and bolster jobs. If there is a role for a socialized rescue it would make more sense to bailout individuals. I would not support that plan either but the rising tides model could actually work. If we offered qualified distressed homeowners a mortgage buy down, that would also return liquidity to the market, while keeping people in their homes. However with the assistance would come mandatory financial training. It's easy to blame someone else but any financial mistake requires a seller and a buyer. It's too difficult and not even necessarily wise to overly regulate the sellers. When rules are too stringent it removes the ability of folks, particularly in the lower economic classes to take a calculated risk on themselves. The reason why prosperity follows depressions is because through hard knocks an entire generation learns the hard way about personal fiscal responsibility.

   Let's take the opportunity of this crisis to return financial education to schools, and relearn the concepts of saving and living within our means at all ages. In terms of our economic crisis now, the blame game will not help. There are very few if any innocent players in this drama. That message is not one you're likely to hear from leadership in an election year because no one wants to hear about what part of their problem is their fault, particularly the electorate, however without every sector of the economy owning their responsibility, any "solution" will be a band aid on a cancer.

Election year bribe, round two . . . FIGHT!

  Democrats are wrong and so are the Republicans. I could use and extra couple hundred bucks, I don't know anybody who couldn't but when a play doesn't work, it's not a good idea to run it again. A second economic stimulus package is akin to bribing voters. It would be a bribe if Democrats push it through congress, and a bribe if the President signs it.   The last go around, the billions of dollars borrowed from future generations, brokered by China did not meet it's stated goal. Since the last package, our economy continues to struggle, and has hemorrhaged jobs, while the decline in buying power as a result of the devaluation of the dollar has offset whatever meager stimulation the American family received.   The plan didn't work the last time because of but not limited to the following reasons.
1. People don't have $600 problems. Folks have $6000 dollar problems, $60,000 problems, but $600 is simply not enough to right the average persons economic ship.
2. A plan based on responsible consumer spending only works if people . . . SPEND RESPONSIBLY. Those with personal responsibility put their bribe money directly into savings, or applied it against personal debt. 
3. $600 doesn't really buy anything. Those who did "go shopping" quickly realized that the new T.V. or car or whatever product they craved cost more than $600. Many people used the check as a launch pad to further extend their personal debt exacerbating the very problem it was trying to solve . Let's just forget that most of the products people did buy were made abroad.
4. Most people didn't even get $600 dollars. At less than 30k in income I only got $340 dollars. The amount was based on the taxes you paid. If you got the full $600 it probably means you paid WAY too much in taxes to begin with. If you got the full $600/$1200, then might I recommend that you either get an accountant, of fire the one you have.     If we are going to mortgage our future then why not an amount that could really help people. Give everybody $10,000, I'd actually go shopping at those numbers. Or how about a national mortgage buy down at $10,000 per primary residence, we are having a housing crisis right? That would stabilize mortgage  companies and reduce folks monthly payments. How about a $5000 buy down on car notes for those driving an American car (I own a VW outright so that wouldn't help me), A gas card? an home energy rebate?. . .   
  Now please know, especially any member of congress that might read this that I AM JOKING. I am being sarcastic, PLEASE DO NOT DO ANY OF THOSE PLANS!!! PLEASE!!!   The correct thing to do is nothing. Do not give international financiers another handsome brokers fee to borrow money from the unborn. Do not further devalue the dollar. Do not spend millions on the administrative costs to bribe the American people, the election is going to be close either way. You were elected to lead, not to pander. And while your at it, stop bailing out wall street  too.   If you have to throw money out of the treasury, throw it at a school, or a bridge, or a road. The fact that our elected leaders believe that in the cost benefit analysis, that $600 is a big enough impact on individuals to warrant extending national debt by $150 Billion dollars, while ignoring our nations infrastructure, and then decide to do it again is another indication of the dangerous disconnect between elected leaders and the finances of their constituents. What's next, should we just eat cake?   Shared responsibility is a fundamental of a functional society. However spreading around failure is not what was meant by shared responsibility. Giving away borrowed money, and absorbing the failure of lending institutions is a double whammy that the taxpayer did not ask for, nor need. That said If this irresponsible plan becomes a reality . . . Well I guess I do have a few bills that could use paying.