On the TSA, bailouts and needless economic interventions

The TSA (Transportation Security Administration) was a G.W. Bush bailout for the airlines because, after 9/11, there was a genuine fear of flying amongst the American public. So, the U.S. government stepped in to give Americans confidence to fly again.

However, all this action did was create a moral hazard for the airlines. Every time there is a failure in TSA's security, the airlines are not be held responsible, the U.S. government is. As a result, there is an ongoing degradation of liberty and the humiliation of the U.S. traveler at the hands of government officials.

If the airlines were responsible for security, there would be competition in security. That competition would drive toward maximum security with minimum damage to the travelers' liberties accompanied by minimum cost and inconvenience, as well.

Some airlines would do better than others. Prices might even be affected by how well airlines do in the security department. All-in-all, there would be improved security at a lower cost—and the travelers would bear all of the cost. The American taxpayer would not be held hostage as the payer of last resort in the event of ongoing failures or the need for new technologies.

Already the Obama administration has handed out favorable contracts for the production of the new x-ray machines and other TSA equipment to manufacturing firms strongly connected to unions. It is just one more way of intervening in the economy where the government need not be present at all.

The false economy of government “stimulus”

In its ongoing attempts to “stimulate” the economy, the government takes money out of the economy (in the form of cash through taxes or credit through deficits), consumes part of it in waste and administration, and then spends some part of it for a stadium, a bridge or whatever.

All the government can do, at best, is to move some jobs from that portion of the economy where the private sector would have used the money to that portion of the economy for which the politicians can take credit in hopes of reelection. Nevertheless, due to the manifest inefficiencies in government, more jobs would have been created in the private economy had the money not been unceremoniously extracted from the taxpayers' wallets in the first place.

Hence, while the politicians get to take credit for some job creation, the net number of jobs created will always be less than had the private sector been left with the money and regulation reduced.

Why they call it a 'BS' degree

On economic growth versus political control

Economic growth is radically unpredictable and, almost more than anything else, politicians want control and the power it brings to them.

The most important economic developments happen at the leading edge of the economy where innovations frequently cause things to be slightly out of control. Therefore, meaningful economic advance does not work well within the confines of so-called "scientific economics" or the "planned economy."

The economic activity that drives rapid growth, rapid increases in capital (production of profits) and the growth of new jobs cannot be foreseen in mechanistic terms or easily predicted using mathematical formulas.

This explains why so many of the economic interventions by politicians and government work against innovation and rapid economic growth. Instead, while seeking control, politicians and governments tend to preserve the old industries and firms that are not on the growing edge of the economy. Politicians are far more likely to waste taxpayer money trying to resuscitate dinosaur corporations and industries for the sake of the equally outdated and outmoded unions than to aid any truly innovative entrepreneurs. As a result, government actions actually damage the long-term prospects for the economy and this means the economy will take longer to recover than if government had not intervened at all.

On the power of corporations, unions and other special interest groups

Corporations, special interests (groups) and lobbyists—bad as they may be—have no authority nor power to coerce a Congressional Representative or Senator to do that which hurts the taxpayer, damages the economy, destroys jobs, prolongs unemployment, increases the size of government or add to our deficit and public debt.

Only our elected representatives—only the politicians in Washington and our State houses—have the power to do these damaging things. Sadly, our elected officeholders come quickly to sanctify every act in pursuit of re-election above the sanctity of our U.S. Constitution or the good of the people and the American economy. It is by this wrong priority that the politician becomes readily “hooked” on the dollars offered to him or her by the special interests and take actions that damage the American republic.

Only WE, THE PEOPLE, have the authority to remove from office—by our votes—those officeholders who succumb to the siren sound of special interest money and influence.

Yes! It is WE, THE PEOPLE, through our own lack of vigilance to our duty, that have allowed the evolution of a federal government that has forgotten our Constitution, forgotten limited government, and forgotten the need for sound money. And, it is WE, THE PEOPLE, who can and must fix it.

Change your politicians often! They easily dirty, and generally do so very quickly!

Stop blaming the CEO’s—it’s the way we invest that’s killing us!

Day by day, the leading corporations of the United States are growing more and more disconnected from the U.S. economy. Their interests are less and less attached to those of our workers and our consumers. Worse: they are becoming indifferent to our own nation’s economic future.

A decade ago, only 32 percent of income for firms listed in Standard & Poor’s index of the 500 largest publicly-traded U.S. firms (S&P 500) came from sources outside the United States. However, by 2008 that figure had grown to nearly half—48 percent.

A 2008 survey conducted by Duke University’s Fuqua School of Business in conjunction with the Conference Board uncovered the fact that 53 percent of the 1,600 companies surveyed had an “offshoring strategy”—compared to only 22 percent three years earlier. The survey drew the conclusion that “very few” of the companies had any “plan to relocate activities back to the United States.”

Many of the companies that have tried—usually driven by unions—to maintain a significant production presence in the U.S. (such as the automobile industry) have been “hollowed-out” by year-on-year losses. Many of these losses can be traced to bad decisions for profit-taking in earlier years or unwise concessions to unions that management must have known could not be sustained in the long run.

What’s driving this trend?

Of course, we all know the answer to this question: It’s “profits,” stupid!

But there is more than that. The whole of the blame cannot be laid on the shoulders of the CEOs and the corporate boards.

Here’s why.

A little history on investment

Prior to the year 1924, most people who invested in a corporation did so for one of two reasons:

1. Because they—or their advisor—believed the firm had opportunity for making profits. Not necessarily profits in the coming quarter, but in the long term.
   
2. Because they had a sincere “investment” in the firm itself. They had a heartfelt interest in what the firm produced or did for people or the economy as a whole.

So, what happened in 1924?

The first modern mutual fund was created in 1924 in Boston, Massachusetts. This began a dramatic shift in the way investors were connected—or, rather, disconnected—from the firms in which they made investments.

Mutual funds removed any sense of heart-felt investment in the long-term good of the firms in which the monetary investments reside. In fact, it removed the investor by one full step from his or her investments. Mutual funds are a dispassionate “yield” instrument only.

Paper entrepreneurs

Here’s how the picture has changed. In the pre-mutual fund days, most investors had a relatively direct connection with their investments and the companies in which they were invested.

Investor –> Corporation

In those days, larger investors took a personal interest in their investments and not infrequently attended stockholder meetings. They, more often than not, had a longer view of their investments and were looking out for the long-term profitability of the businesses in which they invested their funds.

However, as open-ended mutual funds grew from 19 in 1929 to more than 100 by 1954, Wall Street investment bankers began to see that the middle class could become a great source for new capital investment (and profits for the investment bankers, of course).

By the end of the 1960s, there were about 270 mutual funds supplying $48 billion in capital. The introduction of bank “money market” funds in the late 1970s boost growth even more. Then the real explosion came when Congress introduced tax-favored treatment for such investments through Individual Retirement Accounts (IRAs), 401(k)s and other defined-contribution plans.

Today, while a great number of middle class Americans are invested in the stock market, the vast, vast majority of them would be unable to name any single corporation in which they hold investments. They are entirely disconnected and interested in one and only one factor: the yield on their investments.

Today the picture looks like this:

Investor –> Fund Manager –> Mutual Fund –> Corporation

As I said, the investor has one and only one interest in his investment: yield—especially short-term yield. (Since this is the “McDonald’s generation,” everything is expected to happen fast or impatience sets in.) Between the investor and his money sits the fund manager. The fund manager also has only one interest: the short-term yield on the fund. His or her interest is driven by a couple of concerns:

• Short-term yield will attract new assets to the fund, likely contributing to the fund manager’s bonus
• Short-term yield will keep assets from leaving the fund, also contributing to higher bonuses in all likelihood
• Short-term yield will increase the earnings of the fund, which is also likely a metric by which the fund manager is measured and compensated

I think you get the picture. The fund manager will measure every investment in corporations by short-term returns on investment (ROI) and the likelihood of future short-term returns. This is why I inserted the “mutual fund” as an entity between the fund manager and the corporation in which the fund is invested. It is likely that the fund manager views the fund as a entity in and of itself and its individual corporate investments as only vehicles for yield on the fund. He has no real interest—beyond short-term yield estimates—in any of the corporations in which the fund is invested.

The tail wags the dog

Formerly, CEOs at corporations were wise enough to not sacrifice a firm’s future for short-term profits. They were careful not to consume the company’s long-term future in pursuit of profits in the coming quarter.

But that was back in the days when the investors were invested in the firm with both their money and their hearts (and, sometimes, their souls). That was back in the days when an investor might show up in the CEOs office or at a board meeting and upbraid management for not taking a longer view toward the success of the firm.

Those days are gone for almost all publicly-held companies.

Mutual fund managers can make or break a company today by moving hundreds of millions of dollars from one company to another based solely on the prospect of short-term returns on investment. The fund managers care not one iota about the long-term success of the firms, and the investors in the mutual funds care even less.

So, what do CEOs do?

CEOs of publicly-held corporations seek only one thing: short-term profits. Boards of directors hire and compensate CEOs for this one objective because they know the dramatic loss of market capital that might be incurred if major fund managers decide to disinvest in their firms.

Local interests cannot play a part

It is America’s investment strategy that has driven this. It is because American investors are disconnected from their investments that CEOs are driven to this end.

It is America’s investment methods that have driven CEOs to lose interest in the American economy. The investors do not care whether the profits that bring yields to their 401(k) or IRA come from off-shoring or from selling products in South America or on the African continent.

Unlike prior American recessions—including the so-called “Great Depression—this recession is the first in American history from which corporate profits can rebound without rehiring of large numbers of American workers.

Politicians and the mainstream media blame the “greedy” capitalists and the capitalist system

The politicians ought to look at their own policies. It is the preferential tax treatment given by Congress to instruments like IRAs and similar investment vehicles that have made the mutual fund market explode. Politicians ought to consider revamping every market intervention that makes “paper entrepreneurs”—instead of old-fashioned “investors”—a primary source for capital in the markets.

Actually, corporations that are not publicly-held are more likely to have a local and regional interest in our American economy and the American worker.

In the past, downwardly-mobile American consumers would have created problems for U.S. corporations. Today, since more and more profits come to these corporations from markets in other nations, this is far less a concern to them. And, it should be noted, that the U.S. market emerging from the present recession is very much downwardly mobile. (I, personally, have taken a 29 percent pay-cut in the last two years.)

The German model

U.S. politicians could learn a lot by looking at the German model for business financing. In Germany, city-owned savings banks provide funds to enable enterprises, especially family-owned (read: passionately invested) mid-sized businesses, to grow and prosper. The same locally-based financing gives these businesses what they need to grow and become involved in exporting their products. Nearly two out of three of Germany’s small-to-mid-sized businesses get their funding from these local banks.

The funding links and limits these enterprises to doing business in the local markets, thus building both their local economies and the larger economy of Germany as a nation.

Sadly, no similar localism can be found in America’s investment model. Our brand of capitalism and dispassionate investment drives our corporations to move more and more of their part of economic growth and hiring away from the U.S.

The answer is not more regulation of corporations. The answer is a radical restructuring of our investment and financing model for American businesses.

What Obama said when he was a senator…

Remember this quote from Senator Barack Obama?

“The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the US Government cannot pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government's reckless fiscal policies. Increasing America 's debt weakens us domestically and internationally. Leadership means that, "the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.” ~ Senator Barack H. Obama, March 2006

If he was insincere then, what do you think he is now?!? Remember that quote in the coming election.

Stop blaming CEOs! It’s the way we invest that’s killing us.

Day by day, the leading corporations of the United States are growing more and more disconnected from the U.S. economy. Their interests are less and less attached to those of our workers and our consumers. Worse: they are becoming indifferent to our own nation’s economic future.

A decade ago, only 32 percent of income for firms listed in Standard & Poor’s index of the 500 largest publicly-traded U.S. firms came from sources outside the United States. However, by 2008 that figure had grown to nearly half—48 percent.

A 2008 survey conducted by Duke University’s Fuqua School of Business in conjunction with the Conference Board uncovered the fact that 53 percent of the 1,600 companies surveyed had an “offshoring strategy”—compared to only 22 percent three years earlier. The survey drew the conclusion that “very few” of the companies had any “plan to relocate activities back to the United States.”

Many of the companies that have tried—usually driven by unions—to maintain a significant production presence in the U.S. (such as the automobile industry) have been “hollowed-out” by year-on-year losses. Many of these losses can be traced to bad decisions for profit-taking in earlier years or unwise concessions to unions that management must have known could not be sustained in the long run.

What’s driving this trend?

Of course, we all know the answer to this question: It’s “profits,” stupid!

But there is more than that. The whole of the blame cannot be laid on the shoulders of the CEOs and the corporate boards.

Here’s why:

 

A little history on investment

Prior to the year 1924, most people who invested in a corporation did so for one of two reasons:

1. Because they—or their advisor—believed the firm had opportunity for making profits. Not necessarily profits in the coming quarter, but in the long term.
   
2. Because they had a sincere “investment” in the firm itself. They had a heartfelt interest in what the firm produced or did for people or the economy as a whole.

So, what happened in 1924?

The first modern mutual fund was created in 1924 in Boston, Massachusetts. This began a dramatic shift in the way investors were connected—or, rather, disconnected—from the firms in which they made investments.

Mutual funds removed any sense of heart-felt investment in the long-term good of the firms in which the monetary investments reside. In fact, it removed the investor by one full step from his or her investments. Mutual funds are a dispassionate “yield” instrument only.

 

Paper entrepreneurs

Here’s how the picture has changed. In the pre-mutual fund days, most investors had a relatively direct connection with their investments and the companies in which they were invested.

Investor –> Corporation

In those days, larger investors took a personal interest in their investments and not infrequently attended stockholder meetings. They, more often than not, had a longer view of their investments and were looking out for the long-term profitability of the businesses in which they invested their funds.

However, as open-ended mutual funds grew from 19 in 1929 to more than 100 by 1954, Wall Street investment bankers began to see that the middle class could become a great source for new capital investment (and profits for the investment bankers, of course).

By the end of the 1960s, there were about 270 mutual funds supplying $48 billion in capital. The introduction of bank “money market” funds in the late 1970s boost growth even more. Then the real explosion came when Congress introduced tax-favored treatment for such investments through IRAs, 401(k)s and other defined-contribution plans.

Today, while a great number of middle class Americans are invested in the stock market, the vast, vast majority of them would be unable to name any single corporation in which they hold investments. They are entirely disconnected and interested in one and only one factor: the yield on their investments.

Today the picture looks like this:

Investor –> Fund Manager –> Mutual Fund –> Corporation

As I said, the investor has one and only one interest in his investment: yield—especially short-term yield. (Since this is the “McDonald’s generation,” everything is expected to happen fast or impatience sets in.) Between the investor and his money sits the fund manager. The fund manager also has only one interest: the short-term yield on the fund. His or her interest is driven by a couple of concerns:

• Short-term yield will attract new assets to the fund, likely contributing to the fund manager’s bonus
• Short-term yield will keep assets from leaving the fund, also contributing to higher bonuses in all likelihood
• Short-term yield will increase the earnings of the fund, which is also likely a metric by which the fund manager is measured and compensated

I think you get the picture. The fund manager will measure every investment in corporations by short-term returns on investment (ROI) and the likelihood of future short-term returns. This is why I inserted the “mutual fund” as an entity between the fund manager and the corporation in which the fund is invested. It is likely that the fund manager views the fund as a entity in and of itself and its individual corporate investments as only vehicles for yield on the fund. He has no real interest—beyond short-term yield estimates—in any of the corporations in which the fund is invested.

 

The tail wags the dog

Formerly, CEOs at corporations were wise enough to not sacrifice a firm’s future for short-term profits. They were careful not to consume the company’s long-term future in pursuit of profits in the coming quarter.

But that was back in the days when the investors were invested in the firm with both their money and their hearts (and, sometimes, their souls). That was back in the days when an investor might show up in the CEOs office or at a board meeting and upbraid management for not taking a longer view toward the success of the firm.

Those days are gone for almost all publicly-held companies.

Mutual fund managers can make or break a company today by moving hundreds of millions of dollars from one company to another based solely on the prospect of short-term returns on investment. The fund managers care not one iota about the long-term success of the firms, and the investors in the mutual funds care even less.

So, what do CEOs do?

CEOs of publicly-held corporations seek only one thing: short-term profits. Boards of directors hire and compensate CEOs for this one objective because they know the dramatic loss of market capital that might be incurred if major fund managers decide to disinvest in their firms.

 

Local interests cannot play a part

It is America’s investment strategy that has driven this. It is because American investors are disconnected from their investments that CEOs are driven to this end.

It is America’s investment methods that have driven CEOs to lose interest in the American economy. The investors do not care whether the profits that bring yields to their 401(k) or IRA come from off-shoring or from selling products in South America or on the African continent.

Unlike prior American recessions—including the so-called “Great Depression—this recession is the first in American history from which corporate profits can rebound without rehiring of large numbers of American workers.

 

Politicians blame the “greedy” capitalists and the capitalist system

The politicians ought to look at their own policies. It is the preferential tax treatment given by Congress to instruments like IRAs and similar investment vehicles that have made the mutual fund market explode. Politicians ought to consider revamping every market intervention that makes “paper entrepreneurs”—instead of old-fashioned “investors”—a primary source for capital in the markets.

Actually, corporations that are not publicly-held are more likely to have a local and regional interest in our American economy and the American worker.

In the past, downwardly-mobile American consumers would have created problems for U.S. corporations. Today, since more and more profits come to these corporations from markets in other nations, this is far less a concern to them. And, it should be noted, that the U.S. market emerging from the present recession is very much downwardly mobile. (I, personally, have taken a 29 percent pay-cut in the last two years.)

 

The German model

U.S. politicians could learn a lot by looking at the German model for business financing. In Germany, city-owned savings banks provide funds to enable enterprises, especially family-owned (read: passionately invested) mid-sized businesses, to grow and prosper. The same locally-based financing gives these businesses what they need to grow and become involved in exporting their products. Nearly two out of three of Germany’s small-to-mid-sized businesses get their funding from these local banks.

The funding links and limits these enterprises to doing business in the local markets, thus building both their local economies and the larger economy of Germany as a nation.
Sadly, no similar localism can be found in America’s investment model. Our brand of capitalism and dispassionate investment drives our corporations to move more and more of their part of economic growth and hiring away from the U.S.

The answer is not more regulation of corporations. The answer is a radical restructuring of our investment and financing model for corporations.

A Turning Point

"It's time to recognize that we've come to a turning point. We're threatened with an economic calamity of tremendous proportions, and the old business-as-usual treatment can't save us. Together, we must chart a different course.

"We must increase productivity. That means making it possible for industry to modernize and make use of the technology which we ourselves invented. That means putting Americans back to work. And that means above all bringing government spending back within government revenues, which is the only way, together with increased productivity, that we can reduce and, yes, eliminate inflation." -- Ronald Reagan (1981)

Work together... act responsibly... a little common sense

"[M]y fellow citizens, let us join in a new determination to rebuild the foundation of our society, to work together, to act responsibly. Let us do so with the most profound respect for that which we preserved as well as with sensitive understanding and compassion for those who must be protected.

"We can leave our children with an unrepayable massive debt and a shattered economy, or we can leave them liberty in a land where every individual has the opportunity to be whatever God intended us to be. All it takes is a little common sense and recognition of our own ability. Together we can forge a new beginning for America." -- Ronald Reagan (1981)

Together, we must chart a different course

"[G]overnment policies... [are] responsible for our economic troubles. We forgot or just overlooked the fact that government -- any government -- has a built-in tendency to grow. Now, we all had a hand in looking to government for benefits as if government had some source of revenue other than our earnings. Many, if not most, of the things we thought of or that government offered to us seemed attractive.

....

"It's time to recognize that we've come to a turning point. We're threatened with an economic calamity of tremendous proportions, and the old business-as-usual treatment can't save us. Together, we must chart a different course." -- Ronald Reagan (1981)

Over-regulated and over-taxed

"Regulations adopted by government with the best of intentions have added $666 [in 1980, that is $1,745.57 in 2009 dollars] to the cost of an automobile. It is estimated that altogether regulations of every kind, on shopkeepers, farmers, and major industries, add $100 billion [in 1980, that is $262.1 billion in 2009 dollars] or more the cost of goods and services we buy. And then another $20 billion [in 1980, or $52.4 billion in 2009 dollars] is [taxed away from you and me and] spent by government handling the paperwork created by those regulations." -- Ronald Reagan (1981)

This strategy depends on the will of the people to regain control of their government

"[W]hat I am proposing is a strategy which encompasses many elements -- none of which can do the job alone, but all of which together can get it done. This strategy [depends] on the will of the people to regain control of their government.

"[T]he economy concerns more than mere statistics -- it concerns people, families, human hopes, and human suffering." -- Ronald Reagan (1980)

Not to dream as we once dreamed

"[Some] say we must cut our expectations, conserve and withdraw, that we must tell our children… not to dream as we once dreamed." -- Ronald Reagan (1980)

American economic progress... silenced

"[T]he mighty music of American economic progress has been all but silenced by [what has gone on in Washington]. [Elections] will determine whether the nation and the world will ever hear that great sound; will determine if the dinner table of your home and the supermarkets of your neighborhood will ever again be places where plans can be made and necessities purchased without the gnawing doubt and, yes, fear, brought by… inflation and unemployment." -- Ronald Reagan (1980)

We'll never build a lasting economic recovery...

"The fact is, we'll never build a lasting economic recovery by going deeper into debt at a faster rate than we ever have before." -- Ronald Reagan (1976)

This is the issue... self-government

"This is the issue…: Whether we believe in our capacity for self-government or whether we abandon the American revolution and confess that a little intellectual elite in a far-distant capitol can plan our lives for us better than we can plan them ourselves." -- Ronald Reagan (1964)

Please listen to the WARNINGS!

Here's a message I just sent to many members of Congress:

Recently, an essay published by the governor of the People's Bank of China appeared to favor the creation of an IMF currency to replace the U.S. dollar as the world's reserve currency. This, of course, is a tragic sign as the U.S. has been the safe haven for investors from around the world for the greater part of the last century.

In Europe, the outgoing president of the European Union, the Czech Prime Minister Mirek Topolanek, described America's current plan to fight the widening global recession as the "road to hell." Then British Member of the European Parliament Daniel Hannan made worldwide news headlines by rebuking the UK's own inflationary and debt-focused policies.

Meanwhile, Pres'ent Obama's administration carried on an effective public relations campaign to convince the U.S. citizenry and the rest of the world that if the world just worked together, everything would be "okay" -- even if they worked together mostly doing the WRONG things. That seemed to pretty much put most everyone back to sleep.

The Washington drumbeat is that our economic woes result from a lack of consumer spending. Therefore, Pres'ent Obama and the Democrat-controlled Congress seem intent on making up for all the U.S. citizens by spending money the government does not have. It hardly seems reasonable that the cure for the sick man's disease is to drain blood from his leg while trying to inject it back in his arm.

To postpone inevitable (formal) tax increases, it seems the Obama administration is content with a strategy of printing money. Of course, printing money is just another form of taxation. Rather than taking money out of the citizens' pockets, the administration is satisfied with simply robbing the currency itself of its purchasing power.

The things that are lacking in the current worldwide recession are PRODUCTION and CAPITAL (trillions of dollars of capital having been destroyed in the bursting of the "bubble"). It is PRODUCTION, not spending, that will building capital and restore purchasing power -- not the printing of currency that is ever more diluted in value. Besides, if the government simply prints more money, it won't allow Americans to buy more things because the things. They will just be able to buy less stuff at higher prices.

Obama's economic advisers seem to have convinced themselves -- and Congress -- that more debt and government spending will restore growth and ultimately allow the repayment of the huge debt. However, when all of the entitlement obligations come due over the next decade (i.e., Social Security, Medicare and other welfare), these obligations will amount to TENS OF TRILLIONS OF DOLLARS and the federal government will have NO ALTERNATIVE but to repudiate much of the debt (perhaps through hyper-inflation as other nations have done).

But, even if that were not true, Pres'ent Obama's assumption that additional borrowing and spending will restore growth is wrong on the face of it. IN FACT, MORE CONSUMER DEBT AND GOVERNMENT SPENDING WILL UNDERMINE OUR ECONOMY AND KEEP IT FROM GROWING. We borrowed and spent ourselves INTO this current situation. We must now SAVE AND PRODUCE ourselves OUT of the recession.

However, as long as the Pres'ent Obama administration and Congress are intent on propping up the FALSE ECONOMY, rather than letting it COLLAPSE, their CAN BE NO REBUILDING of a GENUINE ECONOMY.

Calls from other nations that actually see things clearer than do we will simply get LOUDER AND LOUDER until we are willing to FACE THE UGLY TRUTH.

What are YOU going to tell them?

My latest message to Congressional leaders

Here's a message I just sent to some in Congress:

This if from a fund-raising message I received from Sen. John Cornyn:

"Frankly, it's unthinkable to me that a company American taxpayers bailed out would hand out bonuses to their executives. Where I come from - and pretty much everywhere except Washington, D.C. - you pay people to succeed - not to fail."

Since we "pay people to succeed -- not to fail," why are we paying anyone in Congress?

Remember, there have been lots and lots of opportunities for Republicans to stand up and ACT LIKE REPUBLICANS over more than THREE DECADES to address what was happening with the Fed's management of credit and the actions of FNMA and FHLMC. Far too many Republicans did NOTHING or, worse, VOTED with the Democrats.

It was a REPUBLICAN PRESIDENT, George W. Bush, that promoted the AIG bailout. It was NOT a Republican thing to do, however. Republicans are supposed to believe in FREE MARKETS and LIMITED GOVERNMENT. This is NOT a FAILURE of capitalism or the free market principles. This is yet another FAILURE of GOVERNMENT INTERVENTION in free markets and Republican actions have merely allowed the DEMOCRATS to cover over the FAILURE of such policies.

If REPUBLICANS WOULD ACT LIKE REPUBLICANS all the time, you would NOT be forced to put out SCHIZOPHRENIC FUND RAISING MATERIALS like the one I just received -- On the one hand blaming LIBERAL DEMOCRATS while, on the other hand, saying WE NEED MORE GOVERNMENT INTERVENTION in the affairs of the free market.

QUIT IT -- and ACT LIKE MEN OF INTEGRITY.

What are YOU going to tell them?

Preserve Common Law

Here's a message I just sent to dozens of U.S. Senators:

Why is it that The White House, the House of Representatives and the Senate are relying on the same dopes that did NOT see the financial crisis coming, and said everything was fine, to tell us how to fix it? Maybe, just maybe, you ought to be looking to some of those who ACTUALLY DID SEE the crisis headed our way for ideas about how to fix the problems.

If the U.S. Congress grants power to bankruptcy judges to modify the terms of troubled mortgages, that single action will UNDO the precedent of 500 years of common law. Contracts will be a matter of question for centuries to come.

The FREE MARKET and LIMITED GOVERNMENT can resolve ALL OF THESE PROBLEMS. The kind of actions Congress is proposing will lead to PERMANENT and IRREVERSIBLE DAMAGE to the U.S. economy.

Please OPPOSE THIS ACTION and any further BAILOUTS! Thank you.

What are YOU going to tell them?