Mr. Obama, it is time for change

BHObama has taken to describing the economic situation as an inheritance from the prior administration. This use of the word inherit takes a bit of license as the most common use of inherit is to describe something acquired or received through legal or physical succession. He is also using the same terminology and phrases from his candidacy speeches in describing what his administration is doing or contemplating to do with respect to the economic situation. These are clues, really good clues. We got even better clues from Messrs. Geithner and Bernanke yesterday. I think we can posit that the banking problem is rather large and that the economic growth machine or consumer society that produces real wealth and adequate government revenue flows to pay for the programs and employees and their perquisites is badly broken.

So, BHO wants you all to know that he is not responsible for making the mess – Georgie did it. So, what does he not know or knows and doesn’t want us to know that he knows?

Well, back to the clues. The diversion of responsibility suggests that they don’t know what to do. If that is the case, it is probably based on two conditions: one, they can’t measure or quantify it and, two, therefore they don’t know where to start to do something and there is probably some fear that they will do the wrong thing. So, we still should ask why are they starting by spending billions that don’t address the problem?

Geithner and Bernanke provided some clues to the problem. We have obviously permitted a number of banks to reach the point of no return (i.e. too big to fail (TBTF.) In the good ole days the bank regulators would show up on a Friday afternoon with a bunch of papers, take the place over and assure the insured depositors that their deposits are safe and then deal with the assets – usually sell them to another bank. It appears that the other banks are in equally crappy shape. They are probably insolvent meaning their liabilities exceed their assets? So, are there no good banks to take over the crappy banks? And, if that’s the case, then the government has to take over all the crappy banks and that could be most of the banking assets and deposits in the country? And now I know maybe why they aren’t too sure where to start.

So what does this mean to us regular folk? Well, I think it means be careful, save your money, find a safe place to put it, pay down your debts, don’t incur more debts and cut back in all ways possible. It also means that all governmental entities need to do the same. We are indeed in for change. It’s just not the form or type that BHO was describing. Mr. Obama, please get rid of your campaign speech rhetoric, study this problem carefully (believe me you don’t grasp it,) do not rely on politicians (here’s a simple suggestion – do not listen to anything said by Charles Schumer of NY) and academics for guidance (find some good regular folk who have to earn their money and balance their budgets) and only spend available (no more borrowing) government resources on programs providing necessities for folk in difficulty. Pass a one year tax increase on the top ten percent of taxpayers. Layoff government workers and shut down unneeded bureaucracies. Last, constantly encourage all of us to donate cash and goods to charities so that they can help folks in difficulty.

Government has to cut back and do it immediately. At every level. These wasteful spending programs are akin to running out to the local store and buying a carton of cigarettes on the day you are diagnosed with lung cancer. It is either massive stupidity or resignation and acceptance that you are in a terminal state.

Mr. Obama, describe it how you wish. If you are not up to the job you owe it to us all to turn it over to someone who is. If you believe it is Georgie’s problem you need to resign. We have all been in situations where we recognize that the new leader or boss is just not the right person for the job. The early clues are not good for you. If need be, take a month or two to learn more and then pick a starting point, perhaps one of the big banks and take it over with the existing mechanism and work it through. Then do two more and so on. Do not worry about making a mistake. Do not worry about triggering a bigger problem. The people you are listening to are not people who take measured risks in order to accomplish goals. You need smart people who are risk takers and who know how to work through problems and not worry about reelection.

Thank you.