Not many people in the New Washington will be home today, most will be sequestered at the Treasury, the White house or Congress.
Let's reflex - bear in mind I look at the world from a European perspective - as you know I live in NY but my professional training, experience and culture setting is across the ocean.
If you're easily ticked off by opposing opinions, you might stop reading right here and get back to the blog on Monday - as I promise the subject will be back on non directional trading.
I read a lot of opposition against the "bail out" and government in general. I read a lot of about some kind of religious support for companies. I read about calls for a Reagan'esk kind of president and calls for another stimulant check and calls for lowering taxes.
In short I am truly confused when I read those comments - let's try to address my confusion and see we can come up with some kind of solution.
IMO
The term "bail out" is an Public Relations error of the past Treasure Sec. Even if it is a bail out never ever should that label have been used or should past government actions have come close to anything of a bail out. Bearn Stearns was not a bail out. LEH was not a bail out. C and AIG might have been bail out; and if they are we will regret them.
The religious support for companies and the as religious anti-support of government. The last decade has shown an enormous amount of very costly errors by companies; to jog your memory here is a handful (Enron, SYsco, Tyco, GM, Chrysler, BSC, LEH, AIG, Worldcom) - where is this trust that business will get us out of this carnage coming from?
The last decades corporate America has been full of corruption, scandals and personal greed. Accounting firms participating in fraud, Wall Street analyst tauting stock which they personally would short after the hype. Executives focused on the redesign of a bathroom while they were hired to clean up the mess. The examples won't stop.
Why would you = unconditionally, without laws and regulation = again give corporate American the keys to the economical car. If this was your eldest son - you would ground him for a couple of weeks and slowly ease the rules on him, right?
We agree on the fact that US Government is largely inefficient = but then what do you expect = when you have an organization in which you remove the top 5 management layers ever 4-8 years.
Could you imagine we run GE or XOM and fire everyone from CEO to the level of AVP every 4 years and appoint a new team based on their skills to raise money for political campaigns. Even if 'money raising skills' are a positive contribution to your managerial skill - then by the time you figure out what goes on in your part of government, your 4 year term is up. You fly back to Seattle and become head of the local library again. This is not a way to run a professional organization - and noway it become one if we don't allow for a model of senior level career civil servants similar to England, France, Holland or Germany.
Lower tax, stimulant check or 800BN stimulant package. My preference is the latter, if it is well designed. We get back to that in a bit. I don't see how lower tax and another stimulant check will help us in the long run. How will a $1200 check stimulate the economy for the long run. How can us buying a new Coach bag, or a new Iphone or a couple of Starbucks have a long term positive effect. The first check we got last year disappear completely in the big well of problems. For me the stimulant package should hold true investments in our economy. Adding a second Brooklyn bridge will not change the earnings possibilities of NY - we need to add to our future earning possibilities.
We need to reinvesting in education, we need to consider which technologies will be leading in the next 50yrs and make sure we are the leaders in those technologies.
Don't forget that some of the most profitable technologies we use today are developed with governmental vision and governmental money (Internet, computers, interstate highways etc). our communication infrastructure has to be improve all over the USA = everyone knows teams work globally - your most direct colleague will not sit next to you but in China or in Nevada - our communication infrastructure should support this in every corner of this empire.
Here is another reason I don't buy all the aversion against government. In the end government, companies, hospitals, school are not living and breathing organizations. They are us the people organizing ourselves to accomplish a task.
Government is us the people organizing ourselves to run a healthy society, set rules and to set the long term developments.Companies are us the people organizing ourselves to make a profit. Schools are us the people organizing ourselves to educate our children.
If you say I want small government - what do you say - I don't want long term planing, I don't want rules, I don't want a healthy society. Or do you say I want all that, but I want them to do that effectively and efficiently. I understand libertarians would like a world without rules - but I don't think extremism has ever solved a complex problem.
So what do I support;
. rules and regulations for business (so that not every 10 yrs we fall of a man made cliff)
. big investments now for USA 2035 (education, technology, health care)
. a complete assessment of all liabilities in public defined pension plans (the next upcoming train-wreck).
. reorganization of the tax rules and a complete overhaul of the IRS (the non payment of tax as we saw last week is just the tip of an enormous iceberg).
. professional government and improvement of the democratic values in the USA
. a realization that the original American dream was more than the right to a large bonus.
That is - I apologize for the rambling - Monday back to trading.
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