Thursday, December 22, 2011

To create jobs, break up the too big to fail banks

It could well be that the most meaningful way to create jobs in America is to break up the too big to fail banks.

When even the conservative leaning New York Post's Charlie Gasparino calls for the too big to fail banks to be broken up, you know the time has come for a good idea to be implemented.

The monster banks are against this, of course.  They want to return to the good old days where they make scores of millions of dollars for themselves individually if their over-leveraged, hyper risky activities succeed, but stick the taxpayers with the losses if they fail.  

The regulators and rating agencies were unable to see inside the labyrinthine risky business models prior to the financial meltdown, and I have no doubt that they have the same problems today.

It seems to me that businesses that are too big to fail are also too big to manage and too big to regulate and too big to rate accurately.  

Gasparino offers the obvious recommendation: 

The obvious way to force the banks to get small and fast is to again split commercial from investment banking — that is, making it so that no bank can roll the dice in the securities markets if it wants its deposits backed up by federal insurance.

His analysis is that this would finally free up capital for making loans to small and medium sized businesses - which is where job creation comes from.

So, what can the Federal government do to create job?  Stimulus spending has only limited results, and reducing taxes adds to an out of control deficit, but breaking up the too big to fail banks might actually be very helpful.

Monday, December 19, 2011

Is Gingrich already fading?

It could be that the Gingrich surge is already over.  I hope so.  He is a very smart, articulate, persuasive, reasonable sounding (until you actually think about the consequences of some of what he says), inspiring ... lizard (who thinks he is a T-Rex).  

I think it was Bill Clinton (who has his own integrity issues) who said that people vote for whom they want to invite into their living rooms for the next four years.  I can't imagine having to watch this slimy reptile for the next four years on my living room TV.  Ultimately, it is not just issues and the glibness that elects a president.  Character counts - a lot.  And way too many people, conservative people as a matter of fact, are warning against the integrity and trustworthiness of this man.

I think the Republican primary voters are in the process of figuring that out.  

I expect that the Gingrich alternative to Romney is petering out.  I suppose we have to have a Ron Paul run up in the polls next.  

It will still probably come down to Romney, although I continue to hope that New Hampshire pushes Huntsman into the lead.

Friday, December 16, 2011

S.E.C. Charges Fannie and Freddie with Fraud

Finally, the S.E.C. is charging top Fannie and Freddie executives with fraud.  It seems pretty straightforward to me.  In 2007 Fannie told investigators that it had just 0.2 % of its portfolio in subprime loans, but it actually had 11% at the time.  Freddie told investigators in 2006 it had only $2 - $6 billion, but the S.E.C. says it was more like $141 billion, or 10% of its portfolio.

These lies were a big part of the story that led to the financial meltdown, and of course, the government had to seize control of them later to keep them from collapsing.  

I would like to see prosecutions and real consequences for these people as well as for the executives of the giant, too big to fail financial institutions.  Mainstreet has certainly paid the price for their mistakes in taking out loans they couldn't afford.  Many more in mainstreet paid even bigger prices in unemployment, lower wages, lost opportunities and the other punishments of the Great Recession.  It is time for the super powerful and politically connected in Wall Street and government to be held accountable for their creating this entire mess in the first place.

Thursday, December 15, 2011

The end of our war in Iraq

It is worth a moment to pause and be grateful that our war in Iraq is officially over. 

It looks like our objectives were met.  We drove al Qaeda out if Iraq.  We overthrew the dictator, Saddam Hussein.  We satisfied ourselves that they would not threaten the world with nuclear and other weapons of mass destruction.  And we kept the country together long enough for it to establish some form of representative government that has a chance of being able to keep relative peace in the country and stand on its own internationally.

I wish the people of Iraq the best of luck as they stumble along the path of democracy.  I hope that they present an inspiration to surrounding Muslim nations.  And, most of all, I strongly desire that they do not become the home of terrorist threats to the U.S. and the West.

I know that the Middle East has huge problems ahead, and the tangle of forces make things very complicated there, but this is a day to be grateful and hopeful.

Good luck to them and to all of us.

Wednesday, December 7, 2011

Can Obama be the new Teddy Roosevelt?

Over a month ago, I asked "Where is Teddy Roosevelt When We Need Him".  It looks like Obama has been thinking the same thing.  He just gave a speech in Osawatomie, Kansas, the same place TDR gave a defining speech 101 years ago.  Like TDR, Obama laid out a progressive message, which is at its essence that capitalism today has been stolen by the super powerful, just as it had back in TDR's day, who have eliminated the essence of capitalism itself - competition and the growing of the economy.  

Roosevelt was famously the "Trust Buster", who restored competition to the capitalist system.  But, Teddy Roosevelt was temperamentally suited to take on the oligarchy of his time.  He wasn't called the "Bull Moose" by accident.

Obama seems to understand that the country is in the grips of a new anti-capitalist oligarchy today.  He seems to have the right ideas about what is wrong.  I'm not sure he has the right ideas about what the solutions are, and I am even less sure that he has the temperament to confront and defeat today's oligarchy.

TDR wanted to give the people of America a "Square Deal", FDR wanted to give the people of America a "New Deal", Obama just said he wants to give the American people "Fair Play, a Fair Shot, and a Fair Share".  I expect this will morph into a campaign slogan of giving the American people a "Fair Deal".

I have been wondering how Obama could run for re-election.  He certainly can't run as a post-partisan, reach-across-the-isle president because he has proven that he is incapable of pulling that off.  The only thing left is for him to run as the president who can force the Republicans to buckle under to his will and leadership.  As a result, we have this excellent kick-off speech.  

He will have to follow up with actual, strong willed, confrontational executive action opposing the Republicans in 2012 to prove to the people that he is up to that job.  And he will have to convince more than just a slim majority to re-elect him.  He will have to win a substantial victory in November and create substantial increases in the House and the Senate.  

Of course, he may have an ally in this impossible task - the Republican Party - who may accommodate the president by running an un-electable nominee like Gingrich.

Tuesday, December 6, 2011

Gingrich and the re-election of Obama

As the Republican right wing activists continue their search for anybody-but-Romney, they have now landed on Newt Gingrich.  The Republican campaign so far has been ideal for Gingrich since it has been an endless parade of debates, and Gingrich's main strength is his ability to speak with apparent authority and expertise.  

But, there is so much more needed from a president, and from a presidential candidate, than good communication skills.

If the Clinton presidency taught us anything, it is that character counts.  And Gingrich's character is highly suspect.

One thing the Obama/McCain campaign taught us is that managing a campaign organization matters.  It matters as to how well the campaign progresses, and it shows something about how the candidate will run the executive branch when elected.  And, by all accounts, management and organizational skills are pretty low on Gingrich's talent list.

Ultimately, though, it comes down to a question of what the campaign in 2012 will be about.  If the campaign ends up being a referendum on Obama's performance in the White House, Obama loses.  But, if it becomes about the Republican challenger, then Obama wins.  And if Gingrich runs, the vast majority of the campaign will be about Gingrich:  his character, his opportunism, his insincerity, his lack of moral substance, his inevitably exaggerated claims of importance, his predictably ideologically extreme and unrealistic proposals, etc. etc. etc.  I believe Gingrich is much like Trump in that they are both narcissistic megalomaniacs too filled with their own grandiosity to be anything but off-putting to a very large majority of voters.

So, ultimately, I think it will come down to Romney, although I really do hope that Hunstsman can do well enough in New Hampshire that he can ultimately take the nomination.  Then I think we would have a real campaign between two substantive candidates who are not extremists. 

And, beyond that, I have real hopes that Americans Elect can offer a third party centrist candidate that can take the election away from the extremist wings of each party and give the country a new way of getting good candidates on the ballots of all the states.

Wednesday, November 30, 2011

Scarcity Consciousness and Overindulgence

The developed world is going through a terrible financial collapse and economic  crisis, and I think it is no coincidence that we are also in the midst of an obesity epidemic.  I think that part of the cause of these problems is that so many people live in a scarcity consciousness.  But it manifested in strange ways.  If we think that there isn't enough, then whatever we have may not last, and we think that we need to gorge now out of fear of famine later - on food, drugs, material goods, homes, cars, planes, yachts, all kinds of stuff.  Voila: housing bubbles, Wall Street uber-greed, obesity.

Even more central, I think, we overindulge when we try to fill empty holes within our sense of ourselves.  These types of holes are bottomless and can never be filled with material stuff. However, if we think that a true sense of abundance comes from a sense of being full and sufficient as we are, with no need to stuff stuff into ourselves in order to feel safe, or prosperous, or enough, then we have no need to live a life of overindulgence.  This is no small task, of course, but it could be the real task we face as a part of growing ourselves into mature adults, being enough as we are, without being trapped inside a scarcity consciousness that is always trying to fill ever empty holes within.

At the heart of the housing bubble and obesity crisis in America and the West may be a psychological and spiritual crisis.  Psychologically, if we can be filled with a regard for ourselves based upon internal character strengths and qualities, we can sense ourselves as full rather than empty, and we won't be needing things from the outside.  Spiritually, if we sense that we are filled with the love of the Divine and have access to the Transcendent, we can know that we are complete and do not need to prop ourselves up with stuff to feel like we are enough.

Ultimately, I believe that the crises that the developed world faces are not political, but psychological and spiritual.  And as such, political solutions won't be able to get to the heart of the matter.  But, this might be really good news, because rather than having to rely on the political system to elect the right politicians, we can solve our own problems by growing psychologically and spiritually as individuals.  I expect that the real change we are seeing in the world is that we are in the midst of that process.

Sunday, November 27, 2011

The Fall of Giants

I recently finished Ken Follett's historical novel "The Fall of Giants."  It is the first of a trilogy that he is writing on the twentieth century.  It is, as expected, completely absorbing and it brings the history of WWI alive. 

I think we are at a time similar to a hundred years ago, when WWI was looming on the horizon.  Big changes are coming as institution after institution fails, the "Giants" falling today go from the tyrannies of the Middle East, to Berlosconi in Italy, to some of the financial giants of Wall Street (more to follow I am afraid as their over-leveraged, high risk ways have still not ended), to the legitimacy of government regulatory agencies, to so many things.  I actually think that in America both political parties are at risk of committing suicide and may fade into oblivion.  

The change that happened as a result of WWI was the end of the rule of aristocracy in Europe.  The Communist revolution overthrew the aristocracy in Russia, of course, but I think that the days of the aristocrats was over for the rest of Europe as well by the end of the war, especially after the terrible mismanagement and bumbling of the aristocratic leadership had propelled the European nations into the war in the first place, and the management of the war was so inept in the second place, and the negotiated peace was so destructive in the end.  The aristocracy lost their ruling power as a result of their demonstrated incompetence and inhumanity.  

And the world was never the same.

The terrible price that the world paid for this liberation from the inherited, landed aristocracy was 37,446,904 casualties, with total deaths of 8,528,831. It's hard to even imagine.

Now, we are in the grips of another group of aristocracies that are badly mismanaging their responsibilities and are causing real hardships for the people of the world.  The financial collapse has put millions out of work, and entered the developed world into an era of financial pessimism.  

The left blames Wall Street and the financial institutions of the world for their reckless risk taking and seemingly bottomless greed, and they are right.  The right blames government for their being in bed with political benefactors and they are also right.

The entrenched aristocracy has become the unholy marriage between finance and government, and the result is fortunes for the super wealthy, power for the politicians, and hardship for the majority.  Both the Tea Party, who rail against the overpowerful government, and the Occupy Wall Streeters, who rail against the 1% are expressing pre-revolutionary angers.

I hope and pray that we don't end up with millions dead and economies that are totally destroyed by the time that the institutions that are being overthrown are finally finished.  I don't think massive wars are needed, but big changes are coming.  

The end of corrupt aristocracies is ultimately a good thing.  Let's have it be fairly smooth and elegant.

Tuesday, November 15, 2011

The political crisis in Europe

George Friedman of Stratfor points out that the economic crisis of Europe is really underpinned by a political crisis.  The European elite have dedicated themselves to a united and peaceful Europe ever since WWI and WWII's terrible devastation.  They concluded that the way to a peaceful Europe was to create a prosperity zone of Europe, where all of the nations had it in their own economic interests to be intertwined and dependent upon each other for their own prosperity.  They adopted a Europeanist ideology.

The Europeanist ideology promised prosperity and peace.  There has not been some form of unifying identity to Europe beyond these two promises made by the elite leadership of Europe.  

But, the financial crisis looks like it it ending both prosperity and peace.  The financial crisis has shown the structural inadequacies of the Eurozone and the common Euro - one currency - but many governments and many fiscal policies.  So, when Greece and Italy owe huge debts that they can't pay, the solution offered by Germany is deep cuts and dramatic austerities for the Southern European countries.  

There goes the prosperity for Southern Europe.

And, there goes the peace as well between Southern Europe and Northern Europe.  The North blames the South for their prodigal irresponsibility, and the South blames the North for setting up a financial system that created huge exports into the rest of Europe by creating a free trade zone and a relatively inexpensive Euro.

The question that arises is what happens to the leadership in Europe?  Do the people continue to elect the same kind of elites who are committed to a united Europe, even if it means drastic cuts in their governments?  Or do they go for more populist and more angry leaders who want to overturn the existing political and financial system that seems to see solutions to the debt crisis in terms of austerity and pain for the people, while leaving the elites quite comfortable, thank you very much.

Big changes are likely to be coming in Europe.

Friday, November 11, 2011

Greece started Democracy, is it showing the way it ends?

 Is Greece showing the world the inevitable, tragic fate of Democracies?  Are we all doomed to follow Greece's corrupt footsteps? 

It seems to me that the cancer at the heart of the Greek crisis is the personal corruption and entitlement of the people themselves that is almost beyond imagination.  Apparently, in Greece it is culturally acceptable to pay little or no taxes, and at the same time demand that the government employs a huge majority of the people and provides an amazingly generous benefits system.  This is not a failure of government so much as a failure of the character of the Greek people.

The great Alexis de Tocqueville wrote his masterpiece "Democracy in America" in  1831 when he visited America to see for himself how Democracy worked in America.  He was mightily impressed, but he had a couple of very key warnings about the weaknesses of democracy.  

The first warning is when the people figure out that they can use the government to get goodies:

 “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.” 
Alexis de Tocqueville

America is a little over the 200 year mark already.

The second warning points out that a democracy is only as good as the people who make it up:

“America is great because she is good. If America ceases to be good, America will cease to be great.” 
― Alexis de Tocqueville

It looks to me like Greece has fallen prey to both cancers:  the people voted in governments that promised and delivered more services than they could pay for, and the character of the people themselves became dishonorable, as they seem to feel totally entitled to very generous entitlements and are offended by the notion that they should pay for them with taxes.

Is democracy in Greece and the PIIGS of Europe about to collapse because the people will only elect governments that give them stuff?  Is their democracy doomed because of a crisis of character of the people themselves?  Is the U.S. following in those dishonorable footsteps?

I think America will rise again, just as it did from the Great Depression and WWII.  I deeply hope and pray that the ashes won't be as devastating now as they were then.  I have faith in the young Millennial Generation coming of age today to create a world anew, as did the Greatest Generation a cycle of generations ago.  I trust that the Boomer Generation can and will provide vision and meaning to this younger, powerful, creative, energetic, cooperative, and productive generation to create our economy and politics anew. I expect America will find itself and take its lead in the world in a new, not yet imagined way.  I have hope and faith in the power of the very idea of America and democracy.

I think that we don't curse the darkness, but light a candle, one spark at a time, starting with ourselves - creating a light of integrity, responsibility, honesty, and character.  We each can be a spark of kindling that sets aflame the renewal of America, democracy, and the world.

Tuesday, November 8, 2011

Landslide in Mississippi

I have reason to be optimistic that the grip of the Tea Party, the Evangelicals, and the more extreme wing of the Republican Party is starting to slip.  Mississippi just rejected the "Personhood" amendment by a landslide, 59% to 41%.  Issue 26 would have defined a fertilized egg as a person, thus, of course, making abortion illegal.  

If you can't get abortion outlawed in Mississippi, which I presume is a state pretty much on the more extreme end of the conservative spectrum, I would say that a woman's right to choose is still quite safe, and will stay so in perpetuity.  

The ideological extremes always over-interpret political trends.  When the country turned against Obama and the Democrats in 2010, the far right thought it was the Tea Party that caused the turn.  In fact, the far left thought so too, out of fear that their opposite extreme would take over the country that they had thought they had captured just two years earlier.  

But, if fact, the Tea Party cost the Republicans control of the Senate, it seemed to me.  Because of radical Tea Party candidates in Delaware, Nevada, Alaska, and New York, all of whom lost, the Senate stayed in Democrats' hands.

Now, the far right continues to believe that the tide has turned and the country is ready for a new revolution and embrace a tax-cutting, deregulating, abortion-ending, anti-gay, government slashing new reality.  But, I think that quite the opposite is happening.  I think that the country is getting a taste of their righteous and inflexible despotism and is being turned off by it.

Good for the good people of Mississippi for showing, once again, that even though the far right is very passionate and very loud, they do not get to dictate people's choices and lives.   

Sunday, November 6, 2011

The 1%

The Occupy Wall Street movement, or the We are the 99% movement, speaks to a real issue in the country and the world, but it's violence and nutty fringe puts me off.  It is no surprise that the Loony Left has joined the protests in Oakland, Wall Street, etc.  It seems to me that they live in a paranoid fantasy world with Good Guys and Bad Guys, and they give their personal lives meaning by hating and fighting the Bad Guys.  It has been said that the movement has no coherent agenda, but that is primarily because the agendas that are spoken by the protesters are old fashioned far left revolutionary rhetoric that has long ago been dismissed by America and the world.  The failure of Communism never seemed to reach into the brains of some of the loonier elements of the protesters.  

I have no problem with how much money anyone makes.  The more the merrier. Good for them.  It is part of the freedom of America and the freedom of the capitalist economy.  People are free to make fortunes.  That is a good thing.

The only problem I have with people making fortunes is if they do so by damaging others.  I clearly have a problem with meth and heroin dealers making their fortunes because they do so by the ruination of millions of lives.  I have a problem with criminals of all types who create their wealth by hurting others.  I have a problem with the fortunes made by the reckless financial industry who found ways to pull vast sums of money out of the middle class's pension funds, homes, and lives by creating financial casinos that generated personal fortunes for them, but ended up creating the Great Recession and scores of millions of unemployed in America and the developed world.   

But, do I have a problem with the 1% per se?  No.

The left wing Mother Jones magazine published an interesting chart showing the makeup of the upper 1%.  The top category is non-financial executives, managers, and supervisors - 31%.  Next is the medical profession at 15.7%.  Only then does the financial sector show up at 13.9%.  Then you get lawyers, engineers, scientists, real estate, entrepreneurs, arts, government, farmers, teachers.  

How does it become such a wide range of people?  They get their wealth via investments, primarily.  Their money makes them money.  

So, I hate to see this political movement call upon the old, tired and toxic appeals to envy and jealousy. I think the financial industry still is in need of reform by regulation and oversight because their unfettered actions and greed have crashed the economies of the developed world, not because they are making too much money.  The outsized fortunes that the financial people are making come from an incentive system that rewards financial transactions that put the economies of the world at risk rather than do what the financial industry is supposed to do, which is support and spur the economy.  It has become out of balance.

The key question in my mind back in the '80s when the Left Wing was so upset by the spirit of Reaganism was this.  Which is better, a system that allows the top end to grow its wealth 300% and also allows the lower and middle classes to grow their incomes 2, 3, 5% - or a system that has the upper end stay the same or lose wealth, but the lower and middle classes also stay the same or lose income.  I think that describes the difference between Capitalism (everyone grows but the top grows faster) and Socialism (everyone stays about the same but slowly declines in a stagnant system).

We ended up with an overly deregulated capitalistic system where the top end grew by leaps and bounds, and the lower and middle stayed very much the same.  The expanding economy didn't lift all boats, as it turned out.  

Finding the balance is always the result of competing ideas and political forces.  We had nearly thirty years of Reaganomics which crashed into the wall in 2008.  We are experimenting with Obamanomics now with his attempt to grow the government and control the markets.  The angers on the Left and Right today are largely inchoate, naive, and fairly stupid.  But they speak to real issues to balance the need for growth and freedom to innovate and create, and the need for the society as a whole to feel they are operating in a fair world that isn't stacked against them.

Friday, November 4, 2011

Corzine never learned a thing

In an amazing display of total unwillingness to learn the bitter lessons of the financial collapse of Wall Street in 2008, Jon Corzine has bankrupted a company that he recently took over:  MF GLobal Holdings Ltd.  

He did the same things that Lehman and Bear Sterns had done not long ago.  He leveraged his company to the hilt and beyond, taking massive and reckless risks, on the bet that he could become fabulously wealthy (which he already was anyhow) and make his new company one of the Big Boys of Wall Street.  His company was smaller than the Too Big to Fail financial giants, so he apparently slipped under the radar of the new regulatory system and found the unsupervised license to risk it all.  

He failed.  In fact, it looks like he may have done more than risk it all, he may have risked more than he was legally allowed to, as there are hundreds of millions of dollars of clients' moneys missing, and the suspicion is that he used clients' money for the companies proprietary trading.  Jail time?  

The story is the same as in 2008.  An out-sized, hyper-ego, testosterone crazed, super macho superstar thought his own brains and instincts were infallible, and he Bet the Farm expecting to generate billions of profits for the company and hundreds of millions for his own personal wealth.  And nobody had the courage to stop him.  The company founder, the institutional shareholders, the board of directors, the auditors, all of them were mute or powerless to oppose the super-aggressive Corzine.  

Corzine had been the top dog at Goldman Sachs (and was forced out in 1999 by Hank Paulson, apparently), then he became the Senator and then the Governor of New Jersey.  But the voters apparently were less that overwhelmed by his brilliance, and they fired him from both jobs.  He decided to make his comeback in Wall Street.  Fortunes were lost, as well as 3000 jobs.  

The bad news is that the Jon Corzines of the world are still crashing through china shops in Wall Street.  The good news is that it is harder for them to make the kinds of fortunes that they did prior to the Lehman Brothers collapse, as it appears that the new regulations are actually dampening the risk taking of the financial giants on Wall Street.  Thus, Corzine was forced to lower himself to take over a smaller player on the promise he would turn them into the next Goldman Sachs.

I think the point is that there is never going to be an end to hyper arrogant, ego-maniacal, super risk taking men who think they are the exceptions and who are confident that they alone will discover the keys to the financial kingdom.  To me the solution is to create a legal and regulatory system that can work to keep the damage that they do contained to themselves without cratering companies and countries with their reckless arrogance.

Thursday, November 3, 2011

Hope for debt reduction?

In a miracle of bipartisan sanity, a group of 40 House Republicans asked the Supercommittee of 12 to consider raising revenue, and a group of 60 House Democrats asked the Supercommittee to explore entitlement cuts.  

It is blindingly obvious to me, when we are borrowing 40 cents of every dollar that we spend, the we must do both - raise revenues and cut spending.  The Republicans have been locked in a death spiral of tax-increase-avoiding ideology, and the Democrats have been locked in a death spiral of entitlement-decrease-avoiding ideology, and the country careens toward financial disaster.

I was also very pleased to see that the Supercommittee had both Simpson and Bowles, and Rivlin and Dominici testify before it.  They were very clear.  The Supercommittee should NOT cut the deficit by the $1.2 trillion over ten years as they had been tasked by Congress.  They need to cut at lease $4 trillion instead. 

If the Supercommittee takes these messages to heart and offers a major, bold program that includes revenue increases and entitlement cuts and saves $4 trillion over ten years, and the 40 Republicans and 60 Democrats break ranks with their ideological masters, this country has reason to hope after all.

I send them my prayers.

Sunday, October 30, 2011

Where is Teddy Roosevelt when we need him?

Thomas Friedman  writes today about a $285 million dollar fine against Citibank for fraudulent derivative trading.  Like Goldman Sachs, Citi put together a billion dollar package of toxic mortgage-backed securities and collateral debt obligations, half of which were specifically chosen as likely to fail.  They sold this dreck to others while at the same time they shorted their own product so as to make money as its value collapsed.  They were being soooooo smart.  They made money off of fools dumb enough to trust them, and they made money off of the toxic assets that they were dumping as their value disappeared.  

I certainly don't care how wealthy anyone becomes in America.  What I very much care about, however, is when people become wealthy as a result of damaging others.  The financial industry management became wealthy beyond imagination at the expense of their clients, and at the expense of all of us who are now living in a world of near Depression created by their recklessness and avaricious greed.

The Occupy Wall Street protests are fairly incoherent and populated in part by fringe elements that are pretty ridiculous.  But the object of their anger is legitimate.  Arguments by the ruling financial oligarchy that increasing taxes on them won't solve the country's terrible debt problems is true, but not particularly meaningful.  Pretty much everyone knows that a terrible injustice has been done to the middle class of America and the world.  The lack of graciousness and remorse by the perpetrators of that injustice is very grating to many.   A couple of centuries ago the French turned to guillotines as their expression of anger towards their ruling aristocracy.  America won't go to that extreme, I am sure, but I think we need to see a government that can bring some justice and closure to this very dark chapter of history. 

I have long been quite conservative in financial matters, believing that the free market was the goose that laid the golden egg of prosperity and created the middle class in America and the developed world.  That belief has had to be re-evaluated after 9/15/2008 when Lehman went bankrupt and the financial industry's rape of its customers and extraction of billions from the middle classes for its own private fortunes became exposed.

Where is Teddy Roosevelt when we need him?  The Bull Moose was the trust buster.  We need a similar force to break up the too-big-to-fail financial institutions.  I think Bush and Obama were right to rescue the financial industry, but it is angering to me that they didn't break them up and strip them of their enormous, policy controlling powers while they rescued them.  On a human level I want to see scores of greed-bags put in jail.  But much more important to me is to see the size and power of the financial industry reduced to their proper size and function.  The financial industry is supposed to be a support for business and industry, not an end unto itself.  I want to see future MIT engineer and science graduates go on to become engineers and scientists, not continue to go to Wall Street to play the game of creating massive wealth for themselves at the expense of others too stupid to see how they are being raped by them.

I am still a firm believer in free markets, but the financial markets are no longer free.  They have been taken over by a criminal element who have so much influence over our government that even their criminal activity is legally sanctioned.  

It is time for the new generation of youth, which I believe to be similar in nature to the Greatest Generation of the '30s and '40s, to rise up and clean up the mess they have been given.  It is in them that our hopes for the future lie.  If all they want to do is follow in the footsteps of the gen-xers who put making money above all else, then the future of America is not a happy one.  But, if they can take their enormous talents and cooperative, collaborative instincts and turn them into real creativity and real wealth creation, as did their similar Greatest Generation cohort, America will be reborn once again and rise from the ashes and soar as the Phoenix.

Friday, October 28, 2011

Queens welcomed

You know that something has officially arrived when the British Royalty sanction it.  The leaders of the British Commonwealth (16 countries) have just unanimously approved the rights of daughters of British monarcha to be the next monarch.  This is kind of a formal recognition of what is obvious, that women are the equals of men in the law, even the laws of succession of the British throne.  

Given that three of the longest lived monarchs in England's and Britain's history are women:  Queen Elizabeth, Queen Victoria, and Queen Elizabeth II, this doesn't seem too radical even for the Britain.


Friday, October 21, 2011

Power and Immaturity - a metaphor

I am struck by the connection between power and immaturity in the world today.  I see immaturity in the exercise of power in so many places.  Perhaps it is a metaphor that can tell us something about ourselves and where we put our own power.

It seems to me that the power in the Islamic countries had been in the hands of two groups:  the fundamentalist Islamic religious fanatics and the governmental  brutal dictators.  Neither of these groups have been exactly paragons of maturity.  

The religious fundamentalists perceived the world in strictly black and white terms, good and evil, the Islamist purists vs. the devils of the West.  This seems to me to be one of the defining traits of adolescence, living in a black and white universe with no room for nuances and grays.  Keep things simple, easy to understand, just know the dogmas in order to avoid the need to think and feel each situation newly.  Just decide long ago on the rigid rules and wage holy wars to promulgate the Truth, capital "T."

The dictators created a pretty black and white world as well.  Keep it simple, whatever brutality and domination that is needed to get and keep power is all that matters.  The needs of others only meant anything as it related to the need, demands, desires of the rulers.  In other words, the dictators were and are self centered to levels that are hard to comprehend.  This seems to me to be one of the defining traits of children and adolescents:  self-centeredness and self importance.

But we can look closer to home to find immaturity and power linked together.  Certainly, the self-centerdness and lack of caring for others was pretty much the defining characteristic of the Financial Industry as it inflated the housing bubble in order to extract vast fortunes from the middle classes of the developed world.  The smartest of our youth went to Wall Street to make their fortunes rather than to be engineers or scientists like the older generations had that created NASA and built the industrial miracle that empowered and enriched and grew a vast middle class after WWII.  

Unfortunately for us, creating lots of money for themselves had very little to do with actually creating a growing economy, and had so much more to do with creating insider games that rewarded super risky financial behavior that  eventually blew up in all of our faces.

And, of course, immaturity was the hallmark of the millions of homebuyers who saw a chance to "move on up" into bigger and grander homes, beyond what they had any reason to think that they could actually afford.  It was all just going to work out because real estate would always increase in value, or so thought the home buyers and mortgage sellers and politicians and almost everyone.  The immaturity of following the crowd and believing what everyone else believed, especially if it made you feel richer. 

Fortunately, of course, not everyone in the world has been immature, and I really do expect that there has been a lot of growing up in the last three years since the financial bubble collapsed.  I expect that there has been a lot of re-evaluation by people as to what is important to them and as to what really matters in their lives.  I expect that as people who have been self centered, short sighted, and immature in so many ways see how they have hurt themselves and others, people are choosing to grow up, and mature, and find themselves in ways they hadn't before.

In another way, perhaps the Arab Awakening is another metaphor - a metaphor of a new kind of power, the power of taking charge of our own lives,  of taking our power back.  The Arabs are taking their power back from their dictators, and perhaps in similar ways Westerners are taking our power back from the demands of success and ever-climbing wealth and external symbols of "making it." Maybe America can finally stop being driven by the need to "keep up with the Jones's."

Maybe the Arab Awakening is a metaphor of an awakening for all of us, by saying no to being ruled by others, whether obviously and directly by dictators, or being ruled in more indirect ways of trying to live the lives dictated to us through cultural expectations.

Or maybe I'm just talking about myself.

Thursday, October 20, 2011

Qaddafi is dead

Qaddafi is dead.  This is a good thing.  I send my hopes and prayers to the Libyan people as they take the long road to building a country from scratch.  Ding Dong, the Witch is Dead.

Tuesday, October 18, 2011

The mismanagement of institutions we rely on

The lives of ordinary people in America and the world have been affected by mismanagement of institutions that they rely on.

The failure of management in the financial industry was, and still is, dramatic and nearly catastrophic (catastrophe is still a possibility, however).  By creating opaque and impossibly complex financial instruments that grossly inflated the housing bubble, the wizards of Wall Street created two things:  massive fortunes for themselves and massive unemployment and underemployment for their societies.

The failure of management in government was to lower the standards for loans for home-buyers, and to reduce the financial regulations and government oversight of the financial industry.  This started the housing bubble and gave the financial industry the ability, and even permission, to transform itself from a service industry, designed to help business and the economy grow, into becoming an end unto itself whose nearly sole purpose was, and still is, to create Pharaoh-like wealth for themselves and their progeny.

These two very badly managed institutions teamed up in a negative synergy that has threatened the way of life in America and the developed world.  It looks like we are in a long period of struggling and perhaps even failing economies.  

I am just starting to read the brilliant Michael Lewis's latest book "Boomerang." At this point it looks like his main point is that the financial crisis in the world is a series of financial crises country by country, and each country's crisis is a function of its national character.  In addition, David Brooks writes in today's New York Times that America is turning inward to restore more prudent and thrifty values to their own lives and thus are in the process of a culture change that hopes to create a zeitgeist that obstructs such greed driven excesses in the future. 

In the famous old words of Pogo "We have met the enemy and he is us."  But we can change, and we are doing just that. This is an internal process, individual by individual, that creates real change from the ground up.  It is not a political movement, but a look-in-the-mirror-come-to-your-senses moment for individuals that end up in a value shift of a country.

It is going to work, and we are going to transform our world into a better place to live, one person at a time, I believe.

Friday, October 14, 2011

How the government can stimulate the economy

Conservative economist, Milton Feldstein, has proposed a solution to falling home prices that would stimulate the economy.

Since most people's form of wealth is in their homes, and since home prices continue to fall because so many are in homes where their mortgages are greater than the home values, the economy is at the mercy of home prices and we all live in a prolonged era of high unemployment, limited consumer demand, and a stagnant economy.

Feldstein's solution is to stimulate spending by stopping the decline in home prices caused by floods of mortgage defaults which are driving prices down.  His suggestion is for the government to reduce mortgage principle when it exceeds 110% of the home value.  He calculates that this would be a one time cost of $350 billion, and would be shared 50 - 50 by the government (taxpayers) and the banks (who created the housing bubble for their own ludicrous bonuses in the first place).  In addition, the borrowers would also pay a price, and that would be a price of risk.  The borrowers would get the lower mortgage, but the terms of the new mortgages would be different. If they defaulted on their mortgage, all of their assets would be available for collection, i.e their loans would become full recourse loans, rather than nonrecourse loans they currently have where only the house is taken in case of default.

This arrangement would have both borrowers and lenders making sacrifices to refinance at lower principles, and the government makes a one time payment in order to stop the housing slide and allow people the economic breathing room to spend more rather than be crushed under housing debt they can't handle.  And the banks finally would get to clean their balance sheets with honest loans with high probabilities of payment.

Like other Martin Feldstein proposals, this makes a lot of sense to me, and will likely be ignored.  I think it would work.

Thursday, October 13, 2011

Occupy Wall Street has changed the dialogue

Eliot Spitzer writes that the Occupy Wall Street demonstrations may not morph into a full blown left wing Tea Party Movement, but in a very important way it has already won.  What it has done is change the political debate in the country.  The issues now in dialog are income distribution, fairness, justice, and accountability for the economic disaster we are all affected by.

I think if one can step back from the political partisanship, where the left demonizes the right and the right demonizes the left, both the Occupy Wall Street and the Tea Party people speak to legitimate issues that should concern us all.  

Occupy Wall Street is passionately decrying the oligarchical control of the government and income disparities that are so large they haven't been seen in this country until just before the Great Depression of the '30s.  The Tea Party is passionately decrying the growing power of the faceless bureaucracies of government as they extended their reach into the health care of every American.  

Both of these are legitimate concerns.  As Spitzer points out, the passion comes from unsophisticated, emotional naifs, but these passions can turn into real political movements as more traditional politicians get involved and create agendas and programs to address the issues raised by the passionate.

Monday, October 10, 2011

Arab Awakening obstacles

The Coptic Christians in Egypt are being attacked and killed while they try to demonstrate for rights.  I am not following it real closely, but it appears that the army is the oppressive force here, including anti-demonstrator propaganda and the use of armed personnel carriers and bullets. At least 24 were killed and hundreds wounded.  

In addition to the army, it appears that ultra-conservative Islamists are also being violent against the Coptic Christians in Egypt, who comprise about ten percent of the population.

Key quote from the story:

" Christians also complain of long-standing discrimination, and of an Islamist discourse that is increasingly aggressive and denigrating of Christians. Ultra-conservative Islamist groups have been emboldened since the revolution, demanding the full application of Islamic law."

It looks like the generals in charge of the government are fomenting sectarian discord and violence as a pretense to reassert their brutal control over the population.  The Arab Awakening was never going to be smooth and easy, but here it is hitting some pretty tough roadblocks even in Egypt, the heart of the movement and the world's best hope for establishing a some form of at least moderately workable democracy in the Middle East.

I always thought that the new Middle East would be quite a bit more Islamic than the more secular tyrannies that it replaces, but I have been hoping and expecting that it would not be dominated by the Islamist extremists.  These clashes are an attempt, I am afraid, of the Islamists to overwhelm the process and keep the people under the boot of their form of tyranny.  

But, I guess this was predictable and all part of the very messy process of reinvention of a country.

Thursday, October 6, 2011


My condolences to all those who are grieving the loss of Steve Jobs, a genius whose impact on the world brought us into the Information Age.  So many who bought his products felt that they had a personal relationship with him, and feel his loss in a personal way.  

A grateful world will miss him.

Wednesday, October 5, 2011

Why California is the Greece of the U.S.

The brilliant Michael Lewis writes in Vanity Fair about the terrible budget problems of California.  He makes three main points.

First, California is set up to destroy itself financially because the politicians have rigged the electoral process so that they only run in highly partisan districts.  They have done this through the politically corrupt practice of gerrymandering the districts to make them safe seats for one party or the other.  In addition, California has a referendum process designed so that the ideologues of either side can bypass the legislation altogether and craft ballots to get their way.  

That means that the Democrats get to add services and the Republicans get to block spending increases, with the inevitable result that the state spends more than it takes in.  Greece, here we come!

His second point is more general.  The human brain was designed to survive in the wilderness, a place of scarcity, or at least a place that required a lot of energy to tame, manage, and survive. But the human race has now entered a time of enormous abundance, and it is no accident that we are living in times of internet bubbles, housing bubbles, drug addiction, and rampant obesity.  The parts of our brains that say "grab all that you can while you can" was not designed for times where all the food, drugs, and credit that you want is just there for the taking.  So, we have been taking, and taking, and taking without much in the way of restraint, and the result is the average Californian has debts of $78,000 against an income of $43,000. The levels of addictions have become epidemic - shopping, drugs, sex, overeating, etc.  Whatever we want is available, especially if you have a nice collection of credit cards to buy now and not think about until, well...maybe never think about it at all, just keep shopping, consuming, eating.

He made a very interesting point in the article that is a corollary to why we are prone to overspending.  Many of us live next to rich people.  Or we see rich people in the media.  And we think we are rich too, or at least we think we should be entitled to the same things that the rich people can afford, but we can't, and we buy it anyway...on credit.  

The state of California is a reflection of the people of California: we are spending more than we can pay for.  

His final point is that we are all like a fat pheasant who finds itself with no other competition for food and eats itself to a point where it is too fat to fly, and finally is eaten by a fox.  That is, the environment provides the restraint that responsible action and self discipline fails to provide.  

The message is pretty clear from his article.  He ends up quite hopeful that Americans will figure this out and become responsible and adopt the kinds of personal character and restraint needed to keep from becoming the pheasants too fat to fly that get eaten by the foxes.

Monday, October 3, 2011

The left wing Tea Party?

The Occupy Wall Street demonstrations probably won't become the left wing version of the right wing Tea Party movement.  But they are both pretty angry at an elite that seems to them to be taking away America as they know it.  

The fear of the right wing is the ruin of America by an immensely powerful socialist government, and Obama's massive stimulus package and the massive overhaul of health care were proofs of their worst fears.  So, the Tea Party rose up in anger and became an unsophisticated but important political force.  

The fear of the left wing is the ruin of America by an immensely powerful corporate oligarchy, and the Wall Street created housing bubble and subsequent financial disaster, creating high unemployment and a long term "Great Recession", while Wall Street itself remains unpunished and ever more wealthy are proofs of their worst fears.  So, Occupy Wall Street demonstrations are rising up in anger and could become an angry and important political force similar to the Tea Party.

The left is afraid of corporate greed, i.e. the super wealthy amassing enormous fortunes while the nation becomes more and more poor; and right is afraid of government greed, i.e. government amassing more and more power and taking more and more control over individual's lives. Both are afraid of becoming helpless at the expense of those in power.

Both have a point.  But, we do have a system that can overcome excesses of power, the Constitution and elected officials are designed to give us the tools needed to break up excess power when it accumulates.  Teddy Roosevelt was the Trust Buster and diminished the powers of the corporate oligarchies of his day, and Ronald Reagan dismantled the overly powerful government of his day. 

But today, we may have both a government that is too powerful and an oligarchy that is too powerful at the same time.  Now what?  Those who want to dismantle the oligarchy want to make government more powerful, which may be a step in the wrong direction.  And those who want to dismantle the government could end up making the oligarchy more powerful, which may be a step in the wrong direction also.

I have some hope for a new centrist movement embodied in the Americans' Elect movement which is trying to put centrist names on the presidential ballots.  Rather than be stuck with Tea Party influenced Republicans or Occupy Wall Street influenced Democrats, we may get some pragmatic but powerful forces in the middle getting elected.  People like Simpson and Bowles, who put together the Simpson-Bowles report on reducing the deficit by raising revenues and reforming entitlements - things that need to be done but which our extremes driven politics forbid.

Friday, September 30, 2011

Congrtatulations to Obama

I have been critical of Obama about how he has been dealing with the economy,  wishing he had, or would, take significant tax reform and entitlement cutting to the Congress and the country.  However, I say congratulations to him and his administration for their killing of a major player in the war on the terrorists - the significant propagandist, Anwar al-Awlaki, plus another major propagandist in his company, Samir Khan.

It is certainly true that this is the result of very intelligent hard work on the part of our outstanding military, and they should get the bulk of our gratitude.  But, Obama has supported our efforts in terrorist wars pretty full heartedly, taking out Osama bin Laden, and now al Awlaki as well.  Next up, I expect that bin Laden's number two, al Zawahiri, will be a headline before too much time passes.  

Obama came into the presidency on promises of getting the U.S. out of Iraq and Afghanistan as soon as he could.  He was contrasted to McCain who said he wouldn't leave until the job was finished.  At the time of the campaign, I thought those two positions were very much the same, just worded differently.  Once Obama took office and became debriefed on the actual situation in our war  against the terrorists, he pretty much continued W's policies at home and abroad.  Which I think just shows what any responsible president would have to do, given the realities of the threats he sees.

So, a very major defeat for the bad guys, and a success for our president.  Congratulations!

Wednesday, September 28, 2011

It's not just the Republicans

Even though it is certainly true (as liberals believe it to be) that the Republicans have been totally obstructionist to just about anything that Obama and the Democrats have wanted to do about the economy, it is not true (even though liberals want to believe it to be) that the Republicans just decided to do this out of the blue for reasons primarily based on their attempts to take over the government and do anything to stop the Obama administration from succeeding even if it means that they hurt America in the process of stopping Obama.

In other words, Obama and the Democrats aren't the poor little innocent victims being bullied by the nasty old Republicans that they want to pretend to be.  

Or, another way to say it is, Obama and the Democrats are reaping what they sowed, or so it seems to me. 

When Obama and the Democrats were swept into power in 2008 after having been frustratedly and furiously out of power for the eight years of W, they over-read their mandate.  Parties that win often over-read their mandates and decide that they have finally won an argument that has spanned decades and the country has decided that their side was right all along, and that the country is eager to go along with the winners' sweeping programs and totally change the face of the country.  To the Democrats, it seemed like a new era of liberalism, and they were going to create a change in the country that would rival the watershed presidencies of FDR and LBJ.  

So, the first thing that Obama did was create a $900 billion Keynesian stimulus plan (which is more money than has been spent on the war in Iraq!).  There were three problems with this bold move.  First, the Republicans didn't believe in Keynesian economics and thought it was a disastrous idea.  Second, Obama turned the thing over to the Democrats in congress who, in turn, pretty much ignored, and certainly did not invite, Republican input to the stimulus package.  And third, the huge quantities of money spent were not smartly targeted to stimulate the economy, but had far too much of the odor of sending vast sums to liberal fellow travelers and long treasured liberal pet causes.

A short way of saying that is that Obama and the Democrats did pretty much  what they wanted to do with this gigantic fortune of taxpayer money and pretty much told the Republicans to shove it.  

Indeed, it may have saved some jobs along the way, but certainly didn't have the impact on jobs that the liberals thought it would.

Then, the second thing that Obama did was create a massive reform of the health care system.  There were three things wrong with this bold move as well.  First, the Republicans didn't believe in a national health care system and thought it was a disastrous idea.  Second, Obama again turned it over to the Democrats of congress who, in turn pretty much ignored and certainly did not invite, Republican input to the Orwellian named "Affordable Care Act".  Republicans screeched in protest, but it was mostly conservative Democrats that acted as a moderating influence on the final law.  And third, the final product never had a large support from the general public despite the avid enthusiasm of liberals.  Obamacare did not come to life as a result of a uprising of popular will, but rather was passed by hard core political action that ran roughshod over the opposition - the Republicans.

A short way of saying that is that Obama and the Democrats did pretty much  what they wanted to do with this massive overhaul of a major portion of the economy and pretty much told the Republicans to shove it.

Indeed, it may actually be an improvement over the old health care system, if it survives a constitutional challenge in the Supreme Court, but the health care costs and system will continue to be a terrible problem in the country for a long time to come.

So, guess what happened?  The Republicans won a major electoral victory in 2010, and they... over-read their mandate.

The Republicans decided that they would do pretty much what they wanted to do and would tell the Democrats to shove it.  So, they came up with the terrible tactics of holding the government hostage by refusing to pay its bills by extending the debt ceiling until they got what they wanted on budget cutting without raising taxes.  

So, let's see what the score is:  Democrats got $900 billion stimulus spending and massive health care reform, and Republicans got a small amount of budget cutting without increasing taxes.

Now, who have been the bullies?

Tuesday, September 27, 2011

Back from vacation

I'm back from a week long vacation, and I see that not too much has changed.  Although I think that the bloom is going off the Rick Perry rose.  Even conservative editorialist Peggy Noonan is criticizing Perry as being too extreme, incendiary, and un-nuanced.  He seems to play to the far right, and does so in a way that alienates pretty much everybody else.  

As she pointed out, Obama can't win re-election, but the Republicans can lose it.  At this late date, only Romney or Huntsman have any chance of becoming Republican presidents, it seems to me.  The rest would make a fairly unpopular, and pretty much failed president, look pretty good in comparison.

Monday, September 19, 2011

Time to get the Federal house in order

Obama has found something to run on.  I was stumped as to what he was going to do.  Run as the guy who could reach across the isle and create a post-partisan era of government?  He kind of ran on that in 2008, and he failed miserably, to put the kindest light on it.  Run as the guy who would take it to the Republicans and force good government down their throats?  He didn't seem to have the temperament to engage in the battle.

Well, he seems to have decided to try option B, run as the guy with the good ideas and fight the obstructionist Republicans and take it to the people to back him and win the fight of good vs evil.  That seems to me to be his only hope.  

Bill Clinton was interviewed this week and made an excellent political point.  Right now Obama is running against himself, and people are scared, angry, and frustrated, and they are taking it out on the president.  Just looking at his presidency, he looks bad, especially if you ignore foreign policy and focus on the economy.  As we all know, the economy is in bad shape and looking worse all the time.  So, if the election were only about re-electing Obama, he loses.

Fortunately for him, he has only one chance of winning, and that is if he runs against a Republican.  Especially if he runs against a right wing Republican like say, Perry.  Then, he starts to look better.  If he runs against a RINO, Republican in Name Only, like say, Romney or Huntsman, he will have a very tough time being re-elected.  

His biggest weakness seems to me to be competence.  It is strange that a man we all believe to be so smart's biggest weakness seems to be making mental mistakes, mistakes of choices, mistakes of strategy, mistakes of thinking.  

I believe he made a terrible mistake on the first massive stimulus bill that ceded strategy and power to congress, meaning he gave the government over to the Pelosi Democrats, i.e. the left wing of the Democratic Party, who turned the stimulus into a boondoggle of left wing goodies that had been waiting in the wings for decades, rather than targeted, temporary, job creating investments in the future.  Or, to say it another way, he didn't spend the money smartly.

I believe he then made another terrible decision, a not very smart decision, when he decided that he was done with creating jobs and reviving the economy after a catastrophic financial crisis, and he decided to go for another left wing fantasy of decades - massive health reform.  And he did so by pointing the direction and handing it over to Congress again. Back came the Pelosi Democrats while he seemed to be mostly watching on the sidelines and giving fairly meaningless speeches along the way. He seemed to be mostly helplessly watching the terrible people doing terrible things to his lovely ideas without any real notion of how to take charge of the situation himself.

His last very not smart decision came when the Simpson-Bowles commission came out with their report as to how to revive the catastrophically damaged economy with a combination of spending cuts and revenue increases for the Federal Government.  He took that powerful document, and the powerful proponents of the thinking behind it, and ... made a nice little speech, offering a few fairly meaningless tidbits out of it, none of it amounting to much at all.

Well, now he has at least come up with an actual bill, his "jobs bill", that he is actually promoting.  Too bad it is so transparently a campaign strategy rather than an actual bill that he is trying to pass through Congress. It is pretty obvious to me that he has decided that he cannot get anything passed through a congress that has any Republicans in it and has decided that what he must do is put forward a pretend bill that the Republicans will obstruct so that he will have something to campaign on over the next fourteen months.  

I think his bill is actually a pretty good one.  It has the basic approach that I think is obvious and necessary, i.e. it cuts spending and raises revenues.  But it just doesn't seem to be serious to me.  What would be serious would be a major tax reform, that raises revenues, and entitlement reform that cuts the real spending in government, the entitlements, and oh, yes, by the way, cut the massive defense spending that neither party wants to touch while you are at it.    

We are becoming Greece, or at least becoming Europe.  We need to come to grips with the obvious notion that we need less government and need to pay more for it.  As it is, we are borrowing forty cents of every dollar that the government is spending.  So many of us have tried that in our personal lives and have found out what it means to have our credit cards, mortgages, and other debts eat up all of our financial, mental, emotional, and spiritual energies. 

The American people have already made the adjustment to get their own houses in order, i.e. cut spending and raise revenues if they can.  It seems to me that if a leader were to step forward to lead the country in doing that same thing on a national level, the response would be very favorable indeed.