Monday, March 30, 2009

Episode 47: Guns Don’t Kill People


It’s true. Guns are tools. And it’s the people who spray innocent bystanders with rounds from automatic assault weapons who kill people.

After hearing the argument from the NRA that banning assault weapons only affects law abiding citizens, because a killer will kill whether or not there is a ban on assault guns is very ridiculous. I have believed for a long time that the 2nd amendment is outdated and needs to be refined for modern times, as an organized police force has eliminated the need to maintain a militia. Still, if there are some who want guns for hunting, isn’t the use of an AK-47 to kill an elk overkill? Or an M-16 to spray down a flock of geese? Police officers are generally not armed to the teeth like that; they carry 9mm pistols, and possibly a rifle or shotgun. There is absolutely no need for a civilian to require that much firepower. It only takes one round from even the most inaccurate pistol to kill someone for the sake of “protecting your home.”

I feel doubly strong about this after Secretary Hilary Clinton gave her thought on the drug war in Mexico. It is refreshing to see a government that acknowledges its part in creating the problem. My feelings on how to deal with the drug war is best left for another post, however, the banning of assault weapons in the US will play a part in reducing the access to deadly those weapons via smuggling.

Here is my proposal: if we *must* keep assault weapons on the streets, then the punishment for killing someone with one should be severe. I’m thinking 3 consecutive life sentences for each person killed by the assailant’s gun. Or, since the economy has tanked, perhaps we should issue an 85% tax on automatic rifle ammunition?

Monday, March 23, 2009

Episode 46: The American Loan Forgiveness Act


I had an idea on how to solve the financial crisis. It probably won’t work, but I figured I’d throw my plan out to the Blogosphere to get chewed up and torn apart!

As we all know, the large part of the financial problem stems from toxic sub-prime loans, an over-inflated housing market, and a home foreclosure epidemic. The plan that I propose will not cost the government a dime, and will allow the government to allocate the stimulus money for more infrastructure, education, green tech and healthcare projects. I call this bill the American Loan Forgiveness Act of 2009.

In this plan, we would have to put together an investigative committee to ascertain the average debt to income ratio for all loans that have been tainted in the risky sub-prime business, and determine the actual value of all homes in America. The latter can be done mathematically. First a sampling if home values in different neighborhoods of various socio-economic statuses can be surveyed. Say the current listed home value is $400,000 when it is determined to be worth $200,000, the appreciation would be valued at 100%. If we take an average of the inflated value of the houses in all 50 states, (let’s say the average rate of inflation is 75% in the whole country) then we can develop a formula that will be applied *across the board* to all homes in America. After calculating the aforementioned three factors, if the amount of inflation was rated at say 45% (housing may be over-inflated, but smaller debt to income ratios would close the gap for example) the value of ALL mortgages is forgiven by 45%. It would be as if the debt was completely erased off the books. Now this doesn’t erase the entire debt; if a person had $300,000 left on a mortgage, he’d now have $125,000.

The immediate reaction is this forgiveness comes at a steep loss to the banks. I don’t see it that way. In the current state of the economy, no one has money to pay the bills and mortgage payments, and as a result, homes go into foreclosure anyway. This plan effectively puts money into the pockets of Americans, because the bad debt is gone. Those who still cannot pay the monthly payment can renegotiate a longer term at higher interest. My plan effectively is a reset button for the market. However, it doesn’t carry the stigma of bankruptcy, which allows Americans to maintain or improve their credit score. With all the bad assets erased off the books, banks have no reason to keep credit lines frozen. Significantly reduced home prices will inspire Americans to shop and travel and get money moving again as they feel the weight of crushing mortgages lifted off their shoulders. I know the plan originally doesn’t call for any stimulus money, but as an incentive to banks, they can receive tax credits in exchange for participation in this program. With all the bad loans simply erased, investors will be anxious to invest in promising companies because they won’t be hampered with the day to day worries of layoffs and business closings.

There you have it. I bet there are a million reasons why this won’t work, and I’d love to hear what they are! And if it has a shot, I will PERSONALLY hand my plan to Obama and Geitner… they can use all the help they can get!

Friday, March 20, 2009

Episode 45: Torches and Pitchforks


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Stephen's Angry Mob Will Crush AIG
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I waited to weigh in on the AIG situation because I wanted to wait for all of the facts to come out before I had an opinion. As much as I’m infuriated by the actions of AIG, I fear there is little we can do at the moment to turn anger and outrage into action.

AIG is a sad manifestation of all that is wrong with the corporate elite culture. A culture marked by greed, excess, and arrogance. The bubble several decades in the making has burst, and America is at a crossroads: we can return to a culture of rules and law, or fail to learn from the Great American Mistake, wait for the mob crowds to lose interest, and return to business as usual. AIG serves as the best example of what happens when the economic, cultural, and class gaps widens to the degree it has. America has over the past 25 years, and especially during the Bush administration, moved away from democracy, and is slowly transforming into an oligarchy. This case is more evident if we consider how the Bush administration has patently ignored the constitution and created arguably the largest expansion of executive power in American history.

Americans have every right to be angry. AIG has severely lessened, and in some cases, wiped out retirement savings. They wove the company into the fabric of the international economic community, becoming so inextricably intertwined, that their failure would have disastrous effects on the global economy – all based on a falsified assessment of corporate strength. And in the words of the villain’s in Scooby Doo, they “would have gotten away with it too” if the personal growth of wealth was commensurate with inflation and the rate of appreciation of home values.

Still, as angry as we are, the Democrats have to be very careful about how they exact retaliation. A 90% tax on the bonus money employees (and ex-employees) of AIG received is, by my account unconstitutional, when considering the Bill of Attainder article, or the ex post facto article that states we cannot punish an individuals, or group of individuals without a trial, or retroactively enforce laws, respectively.

The problem is the stimulus package as written, defended the bonuses of AIG executives. The verdict is still out on Senator Chris Dodd’s involvement in rewriting the part of the bill that allowed this AIG spectacle to transpire. Thus, we must find a workaround solution to get our money back that is constitutional, or Democrats will be no better than the republicans that flushed our constitution down the toilet these past eight years.

Friday, March 13, 2009

Episode 44: The Puppet Broke the Strings?


Something pretty amazing happened recently. RNC Puppet Michael Steele has been all over the press for these little “slip ups.” I wrote a pretty damning entry about his role as the chairman of the RNC. A week later, I mentioned that he was one of a handful that had the courage to challenge Rush Limbaugh, and then displayed extreme cowardice in apologizing for disagreeing with him. This story begins a couple days ago when Steele made a remark about abortion rights with GQ magazine. He stated that he was pro-life, but insinuated that the ultimate right to choose lies with the “individual.” The GOP were pretty upset with his stance, and he quickly revised his statement to mean individual states have the right to choose. I may be putting words in his mouth here, but after reading that interview, I really think Steele may pro-life, but he doesn't believe everyone has to subscribe to that idea – it is an individual choice. Therefore, he would not be in favor in overturning Roe V. Wade; Steele was trying to recover from a tailspin that he knew was going to get him in big trouble.

I give Michael Steele a lot of credit for speaking his mind. It is very apparent now why the GOP chose him to be the RNC chairman, and it is even more apparent that Steele was indeed a puppet. There was a momentary glimmer of hope that a republican could speak what he feels and not be told what to say. It was a glimmer as fleeting as a desert wind in July. Now Steele is on the chopping block for a vote of no confidence. The racial gambit employed to attract “the new GOP” will be considered a failure, and the person who was supposed to chair the RNC all along will take his place. The true leaders of the Republican Party will emerge, their manipulative tactics will be exposed, and they will sink further into the depths of irrelevancy. There is absolutely zero political and intellectual discourse going on in the Republican Party right now, and they will continue to be irrelevant so long as they cling to obsolete ideologies and fail to reconfigure their ideas for the 21st century.

I did my homework on Michael Steele. He is rather moderate. Some of his ideas are not that bad. If he wants to be a leader of the party, he had best say what’s on his mind while he still has a political forum to do so. Less “yo son! The GOP be my homies baby!” and more real politics – more creative thinking. The clock is ticking…

Wednesday, March 11, 2009

Episode 43: The New Economy


Lately I have been reading lots of blogs and news sites from both left and right leaning critics. Though democrats and republicans have wildly different views on how to handle to economy, both critics have been using the DOW index as a barometer to measure the success President Obama’s policies. I think that is a big mistake.

The economic crisis is so big in scope that just about everyone has no idea what is going on. We have to take our leaders at their word when they have a steady hand on the tiller. However, the one part of the crisis that everyone can site as a major contributor to the economic disaster is the incredible amount of toxic assets on the market. I suspect that the bailout money, particularly the TARP money from the initial bailout before Obama’s inauguration is aimed at paying those assets down. However, if there are that many bad assets on the market, then it stands to reasonable logic that most every business wasn’t worth the money CEOs reported in their fiscal reports. I can’t help but think that the DOW was never really worth 14,000 points as it was in August.

Looking at it this way the problem actually seems simple to me (keeping in mind I am no economist by any means). America for the past six to eight years was like a teenager with an American Express card – we engaged in no limit spending for far too long, sporting Dolce&Gabbana sunglasses, Prada bags, and a $10,000 watch with a $20,000/yr salary, pretending we were richer than we actually were. It was the culture of the time, and most every one of us is guilty of biting more than we could chew. Now the credit card is maxed out, and we are paying interest on interest.

Our system is completely deflated now. The 7000ish marker where the DOW currently stands is probably closer to where the market was supposed to be all along. It is sad that 700 Starbucks closed and something like 2,100 of those workers lost their jobs, but is the closing of these stores an indicator of a failing economy, or rather a company that way over extended itself? I kid you not that the Third St. Promenade in Santa Monica has at least 2 Starbucks on the same street – not even 2000 ft of each other!

So the solution as I see it is twofold. First, we need to directly help homeowners who got caught in the bad assets game, as they have the most affected by this crisis. Fixing that problem would seem to simultaneously repair the bank system as well. We need to create and enforce very strict regulations to ensure everyone is playing by the same rules, and enforce strict punishment for rule breakers. Second, we have to let the infection bleed out. I have a suspicion that after we stop the bleeding (helping home owners, fixing the healthcare system, and revitalizing manufacturing in America and not rely so much on imports, and in the long term, fix education in American), the markets will begin to heal itself. Investors, CEOs and the American publics have to realize that the top 2% wealthiest Americans are in denial. As Jon Stewarts piece on CNBC indicates, I think (to give the benefit of the doubt) these financial news commentators were operating on bad intel or (not giving them the benefit of the doubt) there was a great deal of cronyism going on behind the scenes, and they thought they could pull up from a nosedive before we realized we were crashing. They refuse to believe that their companies are not worth as much as the ledger indicates, and they damn well know that government regulations mean a few of them are going to jail. These people are the proverbial puss, and we need to squeeze it out of the wound. When these people are gone and businesspeople with integrity replace them, the market will heal on its own. I am endlessly confident in American ingenuity and resiliency. What the American people have to realize that the infection is deep, and its going to take a pretty long time to see a “return to normalcy.” If we want to watch the DOW to measure our economic prosperity, we’ll have to wait at least 9 months for to deliver a remotely accurate reading. Still, the DOW surged 349 points today… Obama had a good day. =)

Wednesday, March 4, 2009

Episode 42: Who the HELL is Rush Limbaugh?!


What does Eric Cantor, Michael Steele, and every republican congressman to appear on left-leaning cable news shows have in common? They are ALL afraid of Rush Limbaugh! Rush is easily the third most irrelevant voice in the Republican Party (with Ann Coulter and Sean Hannity at the #2 and #1 spot respectively). There are some things that he says that are flat out incorrect: “democrats put the recovery bill in .pdf format so it is unsearchable” or anything to do with ACORN. And he said the worst thing a person can say especially in tough times – “I hope President Obama fails.”

People on the right with good sense know that he is fully of crap (or more accurately from their point of view can be full of crap sometimes). And really, that’s ok. Rush is an entertainer – a radio personality. He has to say incendiary things to get people all riled up because that’s how he keeps his job. It’s working! He even got President Obama’s attention! God forbid a republican disagrees with him though; poppa Limbaugh gives his republican critics an on-air spanking and then he gets an apology. For goodness sake, Steele apologized to Rush 51 minutes after comments he made on D.L. Hugeley’s show. Where are their backbones? Why can’t they stand up for what they truly believe in?

The answer is very easy. The republicans don’t want to upset the base – the only people who give credence to Rush’s illegitimacy. The base which primarily consists of the outer reaches of the far, ultra conservative, super pro-gun, super duper anti-abortion-or-God-will-destroy-you right. The SAME base for which 100% of the constituency voted for McCain! Are they crazy???? Republicans listen, just do the right thing. Disagree with Rush and call him out on it when he’s wrong. They can lose 100% of the “base” (who will otherwise vote libertarian) and STILL can win an election by focusing center right and “Regan democrats.” Some say that their unceasing veneration of Rush Limbaugh is the best present a liberal can ask for. That may be true, but personally, I’d rather see good politics than a left vs. right ideological power struggle. Lofty ideals? Probably.