DAVID GUILBAULT

BIG BUCKS FOR EARLY DEATHS

Good Lord.  Does anyone think that Wall Street has learned its lesson about risky, esoteric financial instruments?  Well, they haven't.  The investment industry is about greed, and nothing but greed.  The New York Times reports today that investment banks are looking to buy life insurance policies that the ill and elderly sell for cash.  They will then package thousands together into bonds and resell those to investors, who will receive payouts when the insured people die.  And here's the precious part:  The earlier the policyholder dies, the bigger the return.  So, Wall Street is hoping to make big bucks on early deaths.  Boy, do we need strong government regulation of the financial industry.

UNHEALTHY LIES

Congressional Republicans and health insurance lobbyists are lying to the American people - knowingly and cynically - to protect their greedy entrenched interests by killing health care reform.  That's the truth, pure and simple.

"The recent attacks by Republican leaders and their ideological fellow-travelers on the effort to reform the health-care system have been so misleading, so disingenuous, that they could only spring from a cynical effort to gain partisan political advantage. By poisoning the political well, they've given up any pretense of being the loyal opposition. They've become political terrorists, willing to say or do anything to prevent the country from reaching a consensus on one of its most serious domestic problems."

- Steven Pearlstein, The Washington Post

GUNS AND MACARONI

Which products' sales are up in these down times, according to Associated Press?  That would be guns, gold, chocolate, beef stew, chili, mac 'n' cheese, antacids, seeds, lipstick and condoms.

SHINE

Why did you start your business? What is the biggest challenge you've had to overcome? How do you define success?

On May 6, Biznik will undertake the largest collaborative social media film project Seattle has ever seen by bringing together a dozen professional videographers, scores of expert interviewers and hundreds of Seattle's small entrepreneurs in Seattle's largest film production facility, Fremont Studios.

Why? Because we want to tell your story. We believe that small business - not large business - will lead us out of the recession. The world needs to hear your story. And for one huge night, the cameras will be rolling for YOU. It's your chance to shine.

Make history with us in Seattle on May 6, 2009. Over the course of one evening, we're making a movie called SHINE. It will be shot and edited by a team of volunteer Biznik members, directed by Biznik filmmaker Ben Medina (the creative force behind the "I'm a Biznik" videos that now appear on the Biznik home page.

We'd like to see at least 500 attendees, and the venue can easily hold more than 1,000. We calculate that we will have time to interview about 240 people during this event, on a first-come, first-served basis (event volunteers will have preference).

If you're interviewed, you'll receive your 3-5 minute video clip for your use, which can be shared on YouTube, Facebook, Biznik or the social media of your choice. (You'll receive your clip as quickly as we can edit and cut the footage - a huge task. Our goal will be to post it online for you to download within three weeks of the event).

Like all Biznik events, this is also a networking event. A really really big one with lights, cameras and action. We believe that video is a huge opportunity to level the playing field between you and larger businesses, so part of the purpose of this event is to introduce you to videographers who can help you take your business use of video to the next level, should you choose.

Bring a bottle (this is a recession-friendly BYOB event). But most importantly, bring your story. There will be a $5 fee collected at the door to cover venue and production costs. All remaining proceeds will benefit Northwest Harvest. Looking ahead: The film will premier later in the spring/summer. Date TBA - watch the Biznik calendar for the SHINE premier. Who makes it into the film will be a closely guarded secret until the night of the premier.

- Dan McComb, Biznik Co-founder

INVEST IN AMERICA

I'm no economist.  In fact, I'm lousy with money.  But, I've been reading the expert opinion makers on our financial crisis and some common sense principles make sense to me:

Let behemoth companies who are hemorrhaging money go into bankruptcy and restructure.

Let the government audit failing financial institutions, making them transparent, subject to strict regulation and accountability.

Let the government take over failing banks, make them solvent and sell them back to private industry at a profit.

Invest government money in rebuilding our nation's school's, energy grids, health care system and infrastructure.

Simplify the tax code of the nation.

When using the taxpayers' money, make them stakeholders in return.

Use tax breaks to encourage investment in American businesses, American jobs and American workers.

Start Up the Risk-Takers

The Government and the Banks

Banking on the Brink

GOING MENTAL

As usual, David Brooks gives a thoughtful and cogent analysis of the financial situation in his column today in The New York Times.

WORKERS STIFFED

Let there be no doubt that the modern Republican Party has never been a friend to workers.  Their interests lay with management.  Businesses that they are beholding to have done all they can to keep wages and benefits low.  Now, they are trying to scuttle the commitments they have made to pensioners.

The Big Three auto companies, in particular, are whining that they need relief from their 'legacy costs', contractual obligations for the long term well-being of their longtime labor force.  They're trying to poor-mouth their way out of financial contracts with their retired workforce.

In an article on the USA website today by DeWayne Wickham, he says a memo reveals the real motive behind Senate Republicans' opposition to the bailout of Detroit.  An unsigned 'Action Alert' says: "Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it."

In the same edition a reader's letter to the editor notes that three of the senators opposing the bailout are from Southern states that are host to foreign automaker plants, Kentucky, Tennessee and Alabama, where workers have lower wages and fewer benefits than their counterparts at the Big-Three.

So, the message from the GOP continues to be clear - they are for higher profits for management, bigger dividends for stockholders and lower wages and benefits for workers.

DECENT WAGES

Union autoworkers in this country do NOT make too much money.  They DO however, make inferior products.  That's the trouble with Detroit.  It's not that they pay their workers too much, it's that they don't produce cars that people want to buy.  That's the fault of management.

David Leonhardt, writing in The New York Times, says that labor costs make up only about 10 percent of the cost of making a vehicle.   The chart below compares the costs between American and Japanese companies building cars in the United States.

 

American unions fought long and hard to get their members, who devoted most of their lives to working for the Big Three automakers, well-deserved benefits and pension plans.  Today, few companies, if any, provide that kind of long-term support for loyal employees.  The American workforce now is considered by most businesses as expendable.  Any decent wages or benefits are given grudgingly.

So, Detroit - stop whining about your labor and legacy costs and start designing and building the best cars in the world, with the skilled people who have labored well on your assembly lines for decades.

 

WALL STREET CASINO

CBS's '60 Minutes' has an excellent report on the unregulated betting that is bringing down our economy. Steve Kroft examines the complicated financial instruments known as credit default swaps and the central role they are playing in the unfolding economic crisis.

Watch CBS Videos Online

OOPS, MY BAD

Greenspan Concedes Error on Regulation

 

Facing a firing line of questions from Washington lawmakers, Alan Greenspan, the former Federal Reserve chairman once considered the infallible maestro of the financial system, admitted on Thursday that he “made a mistake” in trusting that free markets could regulate themselves without government oversight.

A fervent proponent of deregulation during his 18-year tenure at the Fed’s helm, Mr. Greenspan has faced mounting criticism this year for having refused to consider cracking down on credit derivatives, an unchecked market whose excesses partly led to the current financial crisis.

Although he defended the use of derivatives in general, Mr. Greenspan, who left his post in 2006, told members of the House Committee on Oversight and Government Reform that he was “partially” wrong in not having tried to regulate the market for credit-default swaps.

But in a tense exchange with Representative Henry A. Waxman, the California Democrat who is chairman of the committee, Mr. Greenspan conceded a more serious flaw in his own philosophy that unfettered free markets sit at the root of a superior economy.

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.

“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

- Michel M, Grynbaum, The New York Times

Photo Credit: Doug Mills/ The New York Times

LINCOLNIAN TRUTHS

Wise and relevant quotes from Abraham Lincoln, pertinent to the failings of today's journalism, the belligerence of the Bush administration, the greed of corporate America, the dangers of misgovernment and the cynicism of politics:

"I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts."

"Public sentiment is everything. With public sentiment, nothing can fail; without it nothing can succeed."

"I see in the near future a crisis approaching that unnerves me and causes me to  tremble for the safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the Country will  endeavor to prolong its reign by working upon the prejudices of the People, until  the wealth is aggregated in a few hands, and the Republic is destroyed."

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."

"These capitalists generally act harmoniously and in concert, to fleece the people."

"Allow the president to invade a neighboring nation, whenever he shall deem it necessary to repel an invasion, and you allow him to do so whenever he may choose to say he deems it necessary for such a purpose - and you allow him to make war at pleasure."

"Am I not destroying my enemies when I make friends of them?"

"The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew. We must disentrall ourselves, and then we shall save our country."

"What is conservatism? Is it not adherence to the old and tried, against the new and untried?"

"Let reverence for the laws, be breathed by every American mother, to the lisping babe, that prattles on her lap -- let it be taught in schools, in seminaries,  and in colleges; let it be written in Primers, spelling books, and in Almanacs;  -- let it be preached from the pulpit, proclaimed in legislative halls, and  enforced in courts of justice. And, in short, let it become the political religion of the nation; and let the old and the young, the rich and the poor, the grave  and the gay, of all sexes and tongues, and colors and conditions, sacrifice unceasingly upon its altars."

"America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves."

"Nearly all men can stand adversity, but if you want to test a man's character, give him power."

Photo Credit:  Matthew Brady

GOOD DAY TO BE POOR

Being of modest means, and having not a penny in the stock market, is it short-sighted and wrong of me to be taking such perverse pleasure in seeing all these rich people freaking out?  I'm sure it is because woe is to be us all.

'It was the Black Monday of 2008' - The New York Times

Bailout Fails; Stocks Plunge

FLY IN THE OINTMENT

John McCain, by forcing his and Barack Obama's unnecessary presences into the delicate, intense negotiations between the appropriate members of Congress and the Bush administration over what to do about our dire economic situation, has put a fly in the ointment.

It would be more helpful for him to keep in close consultation with the congressional leadership, as Barack Obama has done, and let them know where he stands on the various proposals as they are considered.

But, instead of taking a stand, John McCain is simply grandstanding.

McCain Leaps Into a Thicket

'Senator John McCain had intended to ride back into Washington on Thursday as a leader who had put aside presidential politics to help broker a solution to the financial crisis. Instead he found himself in the midst of a remarkable partisan showdown, lacking a clear public message for how to bring it to an end.

At the bipartisan White House meeting that Mr. McCain had called for a day earlier, he sat silently for more than 40 minutes, more observer than leader, and then offered only a vague sense of where he stood, said people in the meeting.

In subsequent television interviews, Mr. McCain suggested that he saw the bipartisan plan that came apart at the White House meeting as the proper basis for an eventual agreement, but he did not tip his hand as to whether he would give any support to the alternative put on the table by angry House Republicans, with whom he had met before going to the White House. ...

Still, by nightfall, the day provided the younger and less experienced Mr. Obama an opportunity to, in effect, shift roles with Mr. McCain. For a moment, at least, it was Mr. Obama presenting himself as the old hand at consensus building, and as the real face of bipartisan politics.

“What I’ve found, and I think it was confirmed today, is that when you inject presidential politics into delicate negotiations, it’s not necessarily as helpful as it needs to be,” Mr. Obama told reporters Thursday evening. “Just because there is a lot of glare of the spotlight, there’s the potential for posturing or suspicions.”

- Adam Nagourney & Elisabeth Bumiller/The New York Times

Talks Implode During Day of Chaos

'The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support. ...

When Congressional leaders and Senators John McCain and Barack Obama, the two major party presidential candidates, trooped to the White House on Thursday afternoon, most signs pointed toward a bipartisan agreement on a grand compromise that could be accepted by all sides and signed into law by the weekend. It was intended to pump billions of dollars into the financial system, restoring liquidity and keeping credit flowing to businesses and consumers. ...

But once the doors closed, the smooth-talking House Republican leader, John A. Boehner of Ohio, surprised many in the room by declaring that his caucus could not support the plan to allow the government to buy distressed mortgage assets from ailing financial companies.

Mr. Boehner pressed an alternative that involved a smaller role for the government, and Mr. McCain, whose support of the deal is critical if fellow Republicans are to sign on, declined to take a stand. ...

Mr. McCain was at one end of the long conference table, Mr. Obama at the other, with the president and senior Congressional leaders between them. Participants said Mr. Obama peppered Mr. Paulson with questions, while Mr. McCain said little. ...

The talks broke up in angry recriminations, according to accounts provided by a participant and others who were briefed on the session, and were followed by dueling news conferences and interviews rife with partisan finger-pointing.'

- Herszenhorn, Hulse & Stolberg/The New York Times

Watch McCain's interview with Katie Couric. He keeps telling us this is a severe situation, as if any of us doesn't already know that, while just a week ago he described the economy as fundamentally sound. The man is clueless.

Watch CBS Videos Online

MAN WITH A PLAN

Barack Obama has outlined core principles for the legislation being considered to address the current economic crisis (see below), which he urges Senator McCain to support.  They seem pretty sound.  And you can read the highlights of his overall economic plan on his website.

'I believe that several core principles should guide this legislation.

First, there must be oversight. We should not hand over a blank check to the discretion of one man. We support an independent, bipartisan board to ensure accountability and complete transparency.

Second, we need to protect taxpayers. There should be a path for taxpayers to recover their money, and to turn a profit if Wall Street prospers.

Third, no Wall Street executive should profit from taxpayer dollars. This plan cannot be a welfare program for CEOs whose greed and irresponsibility has contributed to this crisis.

Fourth, we must help families who are struggling to stay in their homes. We cannot bail out Wall Street without helping millions of families facing foreclosure on Main Street.

Fifth, we both agree that this financial rescue package should move on its own without any earmarks or other measures.

We have different views about the need for other action, but this must be a clean bill.

This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. This is not a Democratic problem or a Republican problem – this is an American problem. Now, we must find an American solution.'

- Barack Obama

JOHNNIES-COME-LATELY

I'll admit that I have limited understanding of how money markets work.  To me, the stock market has always been akin to a gambling casino.  I do, however, understand the powerful motivation of greed and the cost of unregulated money grabbing.

So, here we are, the poor taxpaying citizens of this rich country, being forced to pay off the bad debts of the money managers - outrageous bills run up by poor judgments, fiscal incompetence, unregulated speculation, dishonest loan sharking and unbridled profiteering.

I've been away from the news for the past few weeks, so I have a lot of reading and studying and listening to do as this administration pushes Congress to take quick and dirty action now.

Seems to me they all need to take a deep breath and take pause.  I applaud anyone who is counseling caution and careful deliberation before enacting panicky legislation.

Tonight, George W. Buffoon went on the airwaves to sell his drastic recovery plan to the American people, and more importantly, those in Congress who are worried about sending our economy over the precipice.

This president, the most incompetent of my lifetime, looked and sounded like a frightened little boy who finally realized that he is in way over his head and is scared to death about what might happen, now that he has totally screwed up.

Meanwhile, as everyone involved from both ends of Pennsylvania Avenue have been meeting for days, conducting hearings and clearly doing the best they can to come together to forge a bipartisan solution, Johnny-come-lately McSame makes a ridiculous announcement that he is suspending his campaigning (thus avoiding a Friday night debate appearance with Barack Obama) and is riding in to Washington to save the world from economic collapse.

The smart and right thing to do at a time like this, for both candidates, is to outline broad statements of principle about their economic philosophies for the future, and then to work together and in concert with the administration and our congressional lawmakers to come up with what is best for the country in this current crisis.

Instead, this buffoon thinks he is going to set us all straight and right the economic ship of state by his very presence in the nation's Capitol.  He forgets that he is part of the political party that got us in this trouble in the first place.  He's starting to believe his own bogus reformist revisionism.  He talks bipartisanship and then takes an obvious political gambit.  He is no leader and he needs to be cast aside.

I most definitely do not want McCain and Palin to be in charge in Washington.  It's time for these two bogus Western mavericks to get the hell out of Dodge.

While Obama has always had all his positions specifically outlined on his website, John McCain has been vague about what he would do in almost any situation.  You can, however, now read his speech about the economy from September 17th on his website.

Photo Credit: Brendan Smialowski & Todd Heisler/The New York Times