Congress Needs a Course in Remedial Finance 29 comments
February 10, 2009
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I’m as upset at the Fed, Treasury, and Wall Street as the next semi-sane person, but Congress pisses me off too. Just try to watch today’s hearings with too many House and Senate members getting basic terminology wrong (“default credit swaps”?); implying that people without money in a brokerage account aren’t dependent on financial markets; confusing income statements and balance sheets; babbling in a fact-free way about a return to the gold standard; and so on.
It’s so, so, so discouraging that these politicians are on the signing side of centi-billion dollar checks flowing into the financial system. We need emergency remedial financial training for all these elected lawyers before they make the current mess much, much worse.
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After all, they are the ones who are suppose to have a degree in economics or at least taken a course in it. So far, they have proven they have only learned the skills of a elementary school kid. If there's a problem lower interest rates. If there's a bigger problem give away free money. If there's a bigger problem scream the sky is falling, support me, and please give me more powers so I can screw things up even more.
On Feb 10 04:26 PM Machiavelli999 wrote:
> Paul,
>
> Some don't want to learn. Like the proverbial Gold Bug, Ron Paul.
> Idealogy is so much better than facts.
On Feb 10 04:51 PM Aalan wrote:
> All true, but whose fault is it? We elect politicians, not economists.
Except for all the others.
On Feb 10 09:13 PM Rokjok777 wrote:
> I think the grand experiment that is called Democracy may be reaching
> its final stages. When the people select their own rulers, it becomes
> a popularity contest. So instead of doing what's right for the country,
> but painful, politicians do what's popular....like borrow trillions
> more to keep the party going.
On Feb 10 10:21 PM otbricki wrote:
> Democracy is the WORST form of government.
>
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>
>
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> Except for all the others.
got me there. I'll be that guy wearing the 'pedantic jerk' sticker if you happen to see me on the street.
On Feb 10 08:02 PM mikebrah wrote:
> centi actually means both; it can be 1/100th or 100 as in a centipede.
>
>
> MM
Though a degree of some kind (such as law) will help one to be a capable lawmaker, There is a way around even this - hire yourself an advisor who has a degree. No secondary education, no business background, no professional qualifications are required whatever... its all done with personal aids who perform all of the tasks that require this.
However, changes to our system are possible. and we can attract more qualified individuals while actively discouraging those that are not suited for it - too many seem to think they are as for example Mr Blagojevich. He kept insisting he was eminently suitable to be illinois governor even after impeachment - never mind how he got into office!
We do have to do is change this situation. Its called pre-qualifications and it must include rigorous tests before one is allowed to file campaign registration. And we test on everything from familiarity with culture and history to the way governments and business works to understanding of civics, economics, law and technology - and it must be tough!
Yep, no exaggerating when I say that many unqualified commoners fill the ranks of of both state and federal legislatures and often these actually cause the really good ones to leave early - as often happens in the US congress.
How few have the character, education and personal qualities to serve as competent lawmakers. About all many seem to know how to do is pick up a paycheck.
Lets get this changed ASAP!
Are you sure it is the candidates that need to be "qualified"? I am thinking it might be the voters.
Forget economic recovery based on this Stimulus package. Corporations will keep on laying off workers to save themselves from going bankcrupt. Consumers will keep on tightening their belts as more and more people lose their jobs. The vicious cycle will become more vicious.
What is needed is a grassroot level employment generation programs since employment is not going to be generated by big corporations. Something the politicians will understand with clarity.
Use the hated ABS securitization process; this time not by big corporations who abused their benefits but by individuals who have lost their jobs with no over-leveraging allowed.
For example:
- - A person who have lost job can securitize his/r experience thru an ABS and sell the ABS to the bank(s) in order to start a small business such as a restaurant or a pest control truck and small office. The gov't will have to guarantee the ABS in order for the banks to buy the ABSs from the individuals.
- - A group of individuals with diverse skills can monetize their experience thru ABS and raise needed capital for a small scale company such as a solar panel installation company or a home energy conservation retrofit project team company or a consultancy
firm specializing in specific area of the economy. Again, the gov't will have to provide the guarantee for the ABSs and the banks will have to buy them and sell those ABSs to prospective private investors if they so desire. Investors who know the benefits of MBSs and ABSs will be more willing to purchase such securities as long-term investments guaranteed by the gov't with equal rating as gov't bond securities but generating higher annual interest.
- - Even communities can leverage their tax base 1:1 by using their tax base as a "collateral" in order for them to be able to originate an ABS and start-up a wind power farm or solar power farm for their community.
- - For individuals with limited experience but with bright ideas and determination to make the American dream; h/she have to use available hard assets such as house and lot properties they own as collateral for an ABS in order for them to be able to raise
capital for a single person business. The gov't may even give a premium of 20% to 50% to the value of the hard assets as incentive for daring individuals to risk their remaining assets for a venture business. Individuals with sufficient experience can also use their hard assets as collateral in order to be able to take advantage of the govt premium.
Goverment will in turn generate more tax revenues as the grass-root level business entrepreneurs multiple across all America.
Why isn't there a qualifying exam or board certificate that must be earned by our political leaders? We could then consider voting for the smartest, most experienced, most talented candidate rather than one who "shares our values" or "feels our pain." Why don't voters have to take an exam to demonstrate that they have a fundamental grasp of the issues?
The Congress is just one big jury of fools making decisions based on blather dispensed by the two opposing counsels (Dems & Repubs).
If the banks and wall street firms hadn't screwed up royally, their fates would not be in the hands of congress, a mixed bag of almost 500 people with varying degrees of education.
Obama will get his bailout. Will it work? I would have preferred that use his trillion as a sovereign wealth fund. He could develop partnerships with the top venture capital firms and give them a half trillion to invest in the new Googles and Apples of the 21st century. Take the other half trillion and make it available via the Small Business Administration to small sized businesses across the country for investment purposes.
Jobs come from small business and new startups. Invest the money in those sectors.
> jack
Sadly, their political decisions have economic consequences.
It is not about the economy for them, it is about being seen as "doing something".
That would just grow the economy. But it wouldn't grow the size of government enough, therefore the idea is a non-starter.
Remember: Congress always does the right thing- but only after it has exhausted all other possibilities!
I would probably have added a few more things like Amtrak, Social Security, Medicare, the Post Office, and the IRS, but that might have been a bit too much for one who might desire to remain on friendly terms with his co-conspirators in Congress.
What a monumental waste of time for some of the brightest and best corporate execs.