3 Things America Needs to Do to Get the Economy Back on Track 47 comments
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The US trade deficit has grown to $US700 billion, which of course is money not spent on US goods and services. This has killed off well paying jobs, has slowed the economy and created unemployment.
Net imports from China and oil account for a large proportion of the US deficit and it is this that America simply must fix to rev up growth.
Yet the problem is greater than that. Even with those problems addressed, if America doesn't fix the banks, it won't get the economy going. Properly functioning credit markets and solvent banks are needed.
The trade deficit and banking crisis are interconnected however. The trade deficit pumps lots of dollars abroad that come back as purchases of US bonds and other securities. Foreign holdings are now about $US6.5 trillion – growing at about $US50 billion each month – and in recent years that has created cheap capital which in turn has encouraged over-leveraging from Main Street to Wall Street. It has affected homeowners and consumers from Peoria to Park Avenue.
The US economy is in crisis and to address that we need to look at three interconnected things: China, oil and the banks.
Jobs losses have been recorded every month since last December and nearly all the forecasters have the economy cycling down. Real incomes of average Americans have been falling and thousands of homeowners are going through foreclosure.
After Bear Stearns (BSC), Lehman (LEH), AIG (AIG), Fannie Mae (FNM) and Freddie Mac (FRE), money centre banks have scaled back or stopped securitising the loans of their regional peers. There is a chronic shortage of conventional mortgage financing and business loans. Regional banks don't have enough money to lend.
Over a week ago, credit markets seized up, prompting the Treasury to propose a $US700 billion bailout that we must implement. Yet, even as some of America's most venerable financial institutions fail, changes in management practices, compensation and corporate governance have been inadequate.
A week ago Monday, the foreign flight from Treasuries was almost a run on the dollar, and conditions for yet another crisis are ripe.
This is a reality of doom and gloom, but there are solutions. To dig out of this mess, America has to address the trade deficit and how the banks are run. And in addressing that trade deficit, first we must look at what is happening with China.
China
China maintains a 40 per cent undervalued yuan by buying dollars and other currencies with yuan. Those purchases come to more than $US600 billion a year, or about 17 per cent of China's GDP. This gives Chinese-based manufacturing a cost advantage having little to do with cheap abundant unskilled labour.
This also encourages US companies to move high productivity, well paying jobs to China, which in turn drives down US GDP and wages. Those job losses have little to do with China's "cheap labour advantage" or what economists call comparative advantage.
The cycle continues. Beijing trades the dollars it obtains through currency market intervention for Treasuries and other US securities. This suppresses long US interest rates and in recent years, this has also decoupled the federal funds rate from long rates, helping to create the cheap, easy credit that led to foolish mortgages and reckless leveraging. This can be seen as an inverted yield curve.
US diplomacy has failed to persuade China to change its currency practices, but the alternative to diplomatic measures is to tax dollar-yuan transactions in proportion to Beijing's intervention. That would reverse the effects of Chinese intervention in markets and encourage free trade based on comparative advantages. I believe the same should apply for other countries that manipulate their currencies.
Realigning currencies would raise US GDP by $US300 billion and bring back many well paying jobs. It would furthermore permit the Fed to effectively influence long-term interest rates once the present financial crisis is resolved.
Oil
The other big elephant in the trade deficit room is oil. The US spends over $US400 billion a year on imported oil, and a good deal of that goes into autos.
First and foremost, Americans have done too little to conserve on gasoline. CAFE standards (Congress's Corporate Average Fuel Economy regulations) were unchanged for 32 years, and significant breakthroughs in engine technology were used to boost horsepower instead of improving fuel economy.
Finally in 2007, Congress mandated fleet averages be raised to 35 mpg by 2030 but America can – and should – seek to accomplish much more. Simply put, America has the technologies but has not applied them. Lighter materials, advanced hybrids, natural gas and eventually hydrogen can all contribute to solutions.
The US needs a three-pronged strategy. The first part is easy: higher CAFE standards. The second part is to provide product development assistance for domestic-based manufacturers, conditioned on patent sharing and first production runs in the United States. The third is a clunker trade-in subsidy, which would be a tax credit or payment to buyers who trade-in and destroy cars based on their remaining years of useful life and the trade-in mpg gain.
These measures would provide incentives to develop world class alternatives in personal transportation, produce the vehicles and components in the US, and create a new export industry. America is not going to do this with mass transit or on bicycles.
Epic historical transformations in transportation – canals, railroads, and air travel – have often required a boost from government, because switching costs are too high for incumbent firms. Someone is going to make these cars and their components eventually. The US government needs to ask whether Americans make them or pay dearly for imports.
Banks
Banking has irrevocably changed. 30 years ago banks took in deposits and loaned out money, it was nice and easy. More recently however, regional banks or their brokers wrote loans, which were then sold to money centre banks and securities dealers, which were then securitised for sale to fixed income investors. It was called efficiency, but the origins of the subprime crisis are clear.
An overabundance of cheap funds from the flood of US dollars abroad, created by the trade deficit, came back as foreign purchases of US Treasuries and securities. Fragmentation of the lending process meanwhile separated those with a stake in loan performance from those who wrote and those who securitised loans.
So-called performance-based compensation on Wall Street – the "heads I win, tails shareholders lose" bonus schemes for bankers also encouraged the whole process to speed up. Excessively complex and poorly conceived collateralised debt obligations and credit default swaps were added to the mix.
Brokers and bankers bet the shareholders' and investors' money for personal and company gain. Performance based compensation schemes furthermore made writing "plain vanilla" bonds against good mortgages and business loans unattractive.
All this begot dodgy loans, misrepresented risk in securities, inadequate default insurance, loan and bond failures, and the subprime crisis.
Banks and securities dealers got stuck with lots of toxic paper that they created with subprime and Alt-A loans. Money centre banks and securities dealers backed off securitising even good loans and a shortage of conventional mortgages and business loans ensued, even for prime customers.
Housing prices are now down nearly 20 per cent, far more than they were during the S&L crisis of the early 1990s. Bear Stearns, Fannie and Freddie, Lehman Brothers and AIG have collapsed or are in trouble. And now there is a massive federal bailout proposed.
The bankers that created the crisis are meanwhile escaping with their huge bonuses. Some even continue to have big paydays. This is not capitalism – which functions on rewards for good decisions and penalties for bad ones – it's a recipe for repeated bank failures, government takeovers and the failure of our market economy.
Solutions
Cultural changes at our banks and securities firms are required. Into the trash bin should go performance based compensation schemes that encourage bankers to act for their own enrichment against the interest of shareholders and clients. The Wall Street culture of entitlement must be changed and compensation has to be aligned with other industries as well as shareholder interests.
Bankers have been betting house money in a strike-it-rich culture that simply has to end. It is a corporate governance issue and while the government can mandate change, even define broad outlines, Wall Street has to articulate the details.
To fix credit markets America has before it special Fed lending facilities and the newly proposed $US700 billion Treasury rescue program to restore liquidity. What America doesn't have, and needs, however are "pay-to-play" requirements for banks and securities dealers participating in rescue programs.
Money centre banks should be required to securitise regional bank mortgages and business loans – this time creating plain vanilla bonds. This would minimize the cost to taxpayers by raising housing prices and would reduce risk.
Principles-based banking reform is also necessary. Accountability for loans throughout the lending and securitisation chain is needed and as part of this there must be responsible credit marketing and consumer education.
America needs to stop consuming more than it produces. America needs to stop running huge trade deficits and borrowing so much from the rest of the world to pay for it.
America needs to stop encouraging manufacturers to leave the country with a dollar artificially overvalued against the yuan and other Asian currencies.
America needs to curb its oil imports by encouraging automakers and consumers to make and buy radically more fuel efficient vehicles.
America needs to require prudent and conservative banking practices and end the strike-it-rich, cowboy and bet-the-shareholders'-ranch culture on Wall Street.
The measures I am calling for are practicable and implementable: a tax on yuan-dollar transactions to achieve realignment in exchange rates; a three-pronged program to build fuel efficient vehicles; a linked participation in the Fed and Treasury programs for banks that provide vital commercial banking services; changes in bank leadership to affect reform and create a culture of service and accountability in the financial services industry.
Not too long ago, the management of the US economy and the resiliency and creativity of American capital markets were examples to the rest of the world. Now today these are things America can hardly be proud about.
America has the skills, the creativity and a magnificent work ethic to restore its vibrant economy. America can't dally however: the American model of democratic capitalism is increasingly challenged by China and other nations. Making tough choices – and abandoning ideology, dogma and partisanship – is the only way to accomplish the reforms needed to get the American economy back on track, and again earn respect around the globe.
More importantly, these tough choices are essential to ensure the legacy of a lasting prosperity for generations to come.
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This article has 47 comments:
Please, input from more knowlegable people?
The Drop Of IN Commodities, especially OIL, was the final straw that broke the Money Banks/WS Firms...hence the run on the dollar and "THE CRISIS" that went beyond normail rescue channels...
China and the Saudis are pissed at us for the high price of oil and the deteriorating dollar and signalled they were through buying them...so nobody to purchase Gov. Notes starting this Wed.
And we continue to let those that have been steering this our of control ship to still tell us they should be the ones to pilot it.
I feel sorry for O as he is going to have his hands full...this is just a one-year band-aid!
Its not about "culture" -- its about "structure". If they're permitted to sell risky debt, they _will_ sell risky debt. Think of hospitals. There's long been a problem of people hooking up the the wrong hose to the wrong plug-- if the Oxygen mask gets plugged into the CO2 outlet, you have a problem.
There are two approaches to the solution: training-- get everyone to recognize the deadly danger.
Or design: make sure the Oxygen tube connector doesn't fit into the CO2 port.
Solutions that affect design, which make it impossible to make mistakes, are preferable. That's what we did after the crash: created three categories of banking institutions
investment banks
commercial banks
savings banks
Each was permitted to engage in a limited range of transactions, with a limited leverage, and limited counter-parties.
There were efficiency costs to this arrangement, but "by design" it prevented the nightmare chimeras we're trying to control today.
Caught you on the tube the other day... Good stuff
jegan ;-)
Go Terrapins!
how about the hundreds of billions left in the ground from not drilling for gas and oil over 20 years! No mention. It is a strategy that every nation has taken on - drilling in every conceivable area looking for sucker nations that believe in preelection fabricated polar bear sitings.
They even enrich uranium in oil rich nations since it is cheaper and export the rest for hard cash.
Norway with a pop of 5 million awards the Nobel Peace to a carbon credit politician and then accumulates close to 400 billion in it's piggy (polar) bank.
If people are sincere about energy they would restrict the 15 million illegal which would burden our roads and infrastructure. They would tax second homes that need to maintained year round. None of this would happen because it is not a real issue but fake.
China trade is a joke they don't have nor does any other exporter have significant capital yet to import from us - therefore our trade deficit would not be impacted.
China currency has been manipulated but it's the same game as many other nations all trying to export. We are so burdened with debt, regulation and litigation - we need to eliminate the corp interest expense deduction and replace it with dividend payment deduction. But of course this will never pass because both banks and shareholders are now evil - so we will end up probably just chasing private capital out so that we end up like all the liberal states of NY Calif - request federal assistance.
Banking reform gets at a few 20-100 million in bonuses and compensation - a total red herring. You conveniently forget to mention that almost half the mortgages in America are now controlled by politicians - 4 trillion. This was inherited from an out of control politician sponsored agency. Now what? I guess we vote on each foreclosure. This is the elephant in the room. No one is losing sleep that a bunch of clowns got overpaid for a few years. How about this 4 trillion that doubled the national debt in a weekend. Who held up reforms and scrutinty on the politically inspired Fannie Mae agency - who kept the campaign contributions going, who wants to distract people from an investigation?
Peter - Don't you mean:
1. Buy
2. Buy
3. Buy
??? Who cares if we have no homes, no jobs, no schools, no health care, no insurance, no gas, no electricity... Not our government... I'm not going to buy a damn thing. Now I'm going to save.
How long did you think you could run an economy building houses for each other?
All those people you laughed at when they said "buy American", they were right. You shot your self in the foot with that Toyota.
Now suffer the consequences.
Tax credit for those who save more than 10% of their income, and tax all consumption related debt for the rich and middle class. This is what is really necessary to turn things around, and we won;t have to sell treasury bonds to foreigners to finance our debt, and the trade deficits will be eliminated automatically no matter how other countries try to manipulate their currencies.
taxing forex??? just please tell me how to do that? you can exchange money all over the world. and i fail to see how taxing is not conterproductive. japan has artificially maintained their rate for years at the detriment of the balance of trade,
your solution about cars would take 10 years or more to even start seeing a small effect on imports. you can immediately effect imports with natural gas as existing cars can be back fitted to cars already on the road.
i do not want to start taking each point you raised and debunk it. read this article at your own risk.
crocodil - redesign - you are describing Murphy's Law (he worked for lockheed aircraft in 1948) - 'if an aircraft part can be installed upside down some wall street banker will do so'.
> jack
The basic ideas of what you're saying looks correct, but your math seems to be off. Remember that percentages are multiplicative not additive. (i.e. 50% gain + 50% loss is not back to even)
(1) Increase taxes on the rich to lower our budget deficit.
(2) Eliminate the payroll tax and the corporate income tax and replace it with a value added tax / national sales tax. This will end our penalties on labor and replace it with a penalty on consumption. It will have much the same effect as the exchange rate manipulation he suggests, without the trade war overtones. And it will improve the competitiveness of our companies. Combined with the tax change in (1) it will leave us with a tax system that is less regressive than the one we have now.
(3) Produce more oil and natural gas here now.
(4) Adopt the "Pickens plan" to go after renewables in a big way, use natural gas for our transportation, and improve our electric system transmission capability.
(5) Add subsidies and incentives for anything that will reduce our dependence on oil - community based agriculture, mass transportation, a reinvigorated intercity bus and train network, indeed improved mileage standards, and hybrid/electric, natural gas, and hydrogen vehicles.
(6) Do what it takes to allow a resurgence of nuclear power.
> jack
Print more money. This will have the effect of undervaluing the dollar and propping up Oil /Commodity prices.
This will hurt us but it will keep the jobs here in the US.
Chinese have kept their currency undervalued and are benefitting because
a) since the US is not printing money -- this is causing recssion in US (harming US business) but keeping the oil/commodity prices down
b) this help the Chinese because of lower commodity prices and they can inflate their currency (get more business from the US)
I do think you oversimplified the China solution. Do you think the Chinese would simply stand by while we taxed their currency conversion transactions?
China is in the catbird seat due to lame US economic policies and they know it. We are fundamentally at their mercy for the forseeable future.
I agree humble, that is the underlying problem. Also, salaries haven't increased, so it takes more of the paycheck to make a housing payment. In the 70's my dad paid 25% of his salary to housing, but now it would take me 60-70% of my salary (I have a graduate degree).
Also, if everyone has a home (or bought in times of great prices/interest rates), where will the demand be to the glut of supply?
Agreed! Structural problems are what cause the symptoms we deal with now.
Stock option compensation:
Encouraged short-term stock boosting behavior by executives, regardless of the long-term cost or risk. Pay them well in cash, then give them a bonus based on the performance 5-10 years out, not next quarter! This compensation fad has crippled many American companies, most recently banks and mortgage firms. The short-term execs walk away with their millions.
No Legal Limits on Govt. Deficits:
What ever happened to the balanced budget amendment? Congress has all the incentives to pass on the burden of current govt. spending to the next generation. They'll win voters with their spending plans and not lose any votes due to taxes. Meanwhile, the US's financial strength and flexibility continues to deteriorate as the debt piles up. 25% of our federal taxes go to paying interest. That's money spent that doesn't benefit us a bit. Welfare does more for the economy than paying interest to foreigners, so why don't interest payments get people worked up?
Taxing income but not consumption:
Want to be energy independent? Raise the tax on gasoline to European levels and then cut individual income taxes a matching amount. Results: economic growth thanks to lower income taxes, fewer dollars sent to OPEC, revitalized cities as professionals move back, cleaner air, not having our recessions scheduled by OPEC.
Worshiping the car:
Why are we such fans of a transportation method that costs us several thousand dollars per year in depreciation, interest, taxes, insurance, maint., fuel, repairs, etc. AND wastes hundreds of hours of our time in congestion. How much wealthier and healthier would we be if we were riding light rail to work instead of financing, fueling, insuring, maintaining, and wearing out $30k cars every 5 years? Do we honestly believe that oil will be cheap in 20 years? Do we even care about the future?
That is why if we are ever going to change the decadent, acquisition fixated, spiritually shallow, and irresponsible culture we have created, we need to let the current financial crisis play out. Here are my reasons:
. Those who have been most responsible will lose the most $. There is a fairness in this which resonates with many people, even those who would also be hurt by the fallout.
. The weakest banks and businesses will fail.
. While jobs will be lost, the purchasing power of unemployment insurance will go up because prices will go down. Lower prices will especially help people most hurt by inflation --those below the poverty level who are getting food stamps and live in subsidized housing, and retired people on Social Security
. Interest rates will go up, discouraging discretionary borrowing and encouraging savings which increases liquidity.
. There is plenty of capital in our country seeking returns greater than government bonds that will tend to seek out sound investments in favor of risky, arcane financial instruments.
A strong purge, yes, that might be the cure.
The current condition might actually force us to stop spending and start saving. Even if we put the cash in a mattress because we dont trust the banks. Folks, the government must stop its rediculous spending but so do we.
If we all stopped spending the economy would tank. If we took this time to save and pay off our credit cards and pay down other bills, in time this country and us individually would immerge a financial power house.
After this afternoon... no one it taking that bet. Becareful of throwing good money after bad. Just recall Nikki at 25,000 was only a few decades ago. Look where it is now and how that culture has learned a costly lesson regarding savings. Good chance Asia will eventually pull us out of it but not till the entire system has reversed and corrected itself... that could take several years in the equity markets as the BEAR will be around for quite some time. Bailout or No Bailout.
The observations about China and oil are appropriate. The Chinese have cleverly put themselves in a position where they are soaking up all our debt with consumption trade. Anybody catch the thinly veiled threats for their SWF to be made whole in the GSE bailout?
seekingalpha.com/artic...
If they refuse to suffer the consequences of poor investment choices and lack of diversity, i.e. share the pain, it will be the economic equivalent of mutually assured destruction, except we have more to lose than they do. Possibly construed as an act of war by either side.
Regarding oil, it's no coincidence that lately there is a strong negative correlation between oil and the USD. Oil exporting nations with huge dollar surpluses at least are hedged.
This is less about Wall St and Main St and more about The Hill and Penn. Ave, who stand to get tossed out on their ears if they don't keep this foreign extortion hushed up or anything abrupt happens to the dollar.
Yes, BUT you need the WHOLE PACKAGE here...INCLUDING drilling at home, and an alternative energy push.
But speaking of fuel efficient cars, Ford has a great one they sell in Europe (and maybe others too) BUT THEY CANNOT SELL IT HERE because of fed. regulations!
Three things America should do to fix this situation are:
1. Cowards holding gold in their home should invest in stocks now.
2. Cowards holding cash in bank CDs should invest in stocks now.
3. BUY AMERICA now with $500, $1,000 and $2,000.
If US citizens do not have confidence in the strongest financial system in the world, who the heck in the world would have confidence in our system? If you do not have confidence in yourself, who the heck will have confidence in you? We, as US citizens, must have confidence in our system first by BUY AMERICA NOW. Only after this self-confidence will come back the world's confidence in us!
On Sep 30 09:46 AM sdcougar wrote:
> "America needs to curb its oil imports by encouraging automakers
> and consumers to make and buy radically more fuel efficient vehicles."
>
>
> Yes, BUT you need the WHOLE PACKAGE here...INCLUDING drilling at
> home, and an alternative energy push.
>
> But speaking of fuel efficient cars, Ford has a great one they sell
> in Europe (and maybe others too) BUT THEY CANNOT SELL IT HERE because
> of fed. regulations!
Dear US citizens
Do not run away from this FEAR of LOSS from yesterday's historical drop of Dow in a single day in US history. Shortly, you guys will experience the biggest gain in US history If you guys overcome the FEAR of LOSS like the Oracle did, buy the long-surviving Down Jones jewels now and hold them for your life, we can achieve our dream in 30 to 50 years. BUY AMERICA NOW. OWN YOUR AMERICA NOW. Pumping our own cash into our system is the only solution to fix our problem - Regaining self-confidence in ourselves. This problem happened because we lost confidence in ourselves and our strongest system. GOD will help America stand up again in less than 2 - 3 years. BUY AMERICA NOW. OWN YOUR AMERICA NOW before the super rich gobble up all these low-priced jewels of Dow.
On Sep 30 01:38 PM tshk1221 wrote:
> Dear sdcougar:
>
> Three things America should do to fix this situation are:
>
> 1. Cowards holding gold in their home should invest in stocks now.
>
> 2. Cowards holding cash in bank CDs should invest in stocks now.
>
> 3. BUY AMERICA now with $500, $1,000 and $2,000.
>
> If US citizens do not have confidence in the strongest financial
> system in the world, who the heck in the world would have confidence
> in our system? If you do not have confidence in yourself, who the
> heck will have confidence in you? We, as US citizens, must have confidence
> in our system first by BUY AMERICA NOW. Only after this self-confidence
> will come back the world's confidence in us!
1. A "Bail-Out" does not save "fat cats". "fat cats" have their pay, their homes, their cars, and their retirements. Even if their buisinesses fail. A "Bail Out" saves the middle class. It frees credit at the bank, it keeps stocks from going to ZERO, it creates a pool of assets bought for pennies on the dollar that will have REAL VALUE at maturity. The FED is the only organization in the world with the capital and the patience to hold to maturity. A bond bought for $1 worth $10 in 20 years returns 90% or 12.2% annual return (Compounded). Even if 1/3 of the paper becomes worthless between now and then, and no interest is paid on the pater, then the government is still looking at a return of 9% at a cost of the current T-Bill rate on the 30 year treasury. If the govt wants to make this democratic and return VALUE to the Citizen then provide each individual with a "grant" of a 25 year Savings Bond valued at their "Share" of the $700 BLN collateral (the purchased paper). The bond could be guaranteed at the face value in 25 years and pay out a share of whatever profits are returned from holding the paper collateral to maturity. If the paper "transforms" itself into stock or other equity, then hold it in TRUST in individual accounts for each individual citizen.
BY THE WAY: No bailout and a PURGE of the financial system only hurts SAVERS and the middle class.
1. Education IRAS, Roth IRAs, Traditional IRAs, 401Ks, Health Savings Accounts. I have been a net saver of 20% for the last five years (and I make around 70K a year with a PHD and 16 years of experience) and have seen my SAVINGS shrunk between 20 and 25% over the last 18 months (depending on the day).
2. Ok, so SMART savers use money market accounts and certificates of deposits and not dividend paying blue chip stocks. So have you looked at the difference between CD interest rates 18 months ago and today. All you CD savers should be redoing your ladders now and have converted all your 4-5% CDs to the current 2.5-3.5% CDs.
3. What about those of us that can still afford our mortgage and want to take advantage of the low housing prices and upgrade? Can't trade a 5.75% mortgage for a 6.75% mortgage and pay more... Mortgage rates are high because of fear and a lack of a market for securities.
4. A 20% foreclosure rate and a reduction by half in the value of collateral mortgages are made against... lets do the math.... $4 TRLN after 20% foreclosure means now only $3.2 TRLN that is only worth $1.6 TRLN after a fall of 50% in collateral value. So lets say the GOV pays $.50 for every dollar and spends around $800 BLN (look familiar) dollars for $1.6 TRLN in stuff... I think that is a GREAT DEAL.
5. A consumption tax is regressive. Poor and middle class CONSUME a greater proportion of their income and debt than do rich. A tax that kicks in at different levels based on the amount spent may work.. i.e. 1% below $500 then an additional 1% sales tax for every $500 the purchase costs and this would exclude vehicles of course which would be taxed based on the distance between a national MPG "GOAL" of say 40MPG and the rated MPG of say a Jaguar X-type which is 18MPG... so a 22 MPG difference would equate to an 11% sales tax.
6. You want U.S. debt to stay in America... make it easier for people to buy it. Advertise it... at banks, brokerages, everywhere.
So talk all you like about "bailing out wall street", but unless you have spent the last 10 years putting pennies in a jar and hiding dollar bills under your matress maybe you should take a real look at who hurts and who benefits when financials are healthy, when worthless paper comes to maturity and is worth something again, when financials can pay their dividends, when someone with a 750 credit score can get a mortgage for below 7%.
As to the next President, I see little difference between McCain and Obama. Both are career politicians whose primary goal is to be re-elected. I quote our Declaration of Independance:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
People, we are living under such a governement that has failed miserably to promote, protect, and respect the rights of its citizens. Obama talks change, so does McCain. It is not Obama's or McCain's duty to institute change, it is ours. It is our duty to throw off an oppressive governement.
Lets have REAL change this November by removing from office every single incumbent from Washington. You may say that the next bunch may be worse. Then throw them out too. Recall them, impeach them, until they understand that their non-sensical, partisan bickering, and gridlock will no longer be tolerated. Only those who truly put America and it's citizens first should be fit to govern.
My two cents... (now worth about a penny)
dw
There are alternatives which would help individual and corporations but not the flawed banks which should be liquidated and sold to banks that are well managed. Listen to Congressman Peter DeFazio's for instance.
This bailout plan is writing a blank check to people who have shown their incompetence at banking and who have encouraged mad credit policies. This plan is like entrusting to fix the chicken pen to the fox.
There are alternatives which would help individuals and corporations but not the flawed banks which should be liquidated and sold to banks that are well managed. Listen to Congressman Peter DeFazio for instance.
www.contrarianprofits....