Latest from the Grizz
THE GRIZZ IS BACK!
Posted Jan 13th, 2009
My fellow Americans we are in one hell of a mess. Since my last comments we have elected a new President. All of us have to hope President-Elect Obama will be a great President. We can disagree with him on issues, but no one should disagree unless they have a better solution to our problems.
Speaking of problems, the mess in the financial markets can be boiled down to dumb politicians, lazy government bureaucrats, Ivy League smart and greedy fools, and an American public that thinks some things are free. Looking back is fine for historians; however, we need to fix the mess we are currently in by first understanding what is broken. Following is what I believe we have to do as a country to get this economy moving.
We must understand that government creates nothing; therefore, we need to keep government as small as we can. This means Federal, State, County, City and Township. Let’s look at the Federal government first. How many agencies should we close down or shrink to a manageable size? Example: State Department. This was set up when there were no phones, faxes, etc. It took weeks, sometimes months, to communicate with other countries. Today all that is different. You can pick up the phone or do a video conference. There are many ways to communicate in person so we don’t need ambassadors or the so-called experts. Americans would save tens of billions of dollars.
Every American should understand that the Federal, State, County and City governments in this great country have the best retirement and medical plans for government workers. If this is not adjusted, everyone will go bankrupt. All Americans should look at each politician and ask a simple question, will this candidate cut the bureaucracy, yes or no?
The first thing we need to do is rescind the mark-to-market value SEC rule. This is where a bank has to write off or write down the value of a loan if the market currently values it lower, even though the loan is current and being paid. What should be done is only non-performing loans or assets should be written down and should be over a specific period of time, one to 10 years. The bank should also be required to show how much they have in non-performing loans each quarter.
The government should back banks that give 30-year mortgages, where the person getting the mortgage puts 20% down. These mortgages should be at 5% maximum. If someone wants to only put 10% down, they can get a 30-year mortgage, but interest would be 6.5% and maximum mortgage would be $200,000. No 100% financing, you must have a down payment.
Let’s look at the problems in the automotive industry. The first thing is all companies are made up of people, management and the hourly employees. I was hired as a young engineer by GMC right out of college. This was in 1968 or 69 and at that time all college graduates were hired as foremen. As time went on, an employee who wanted to be promoted to general foreman had to have an MBA. All of this is great, but there was no promotion from the hourly employees unless they had a college degree. No university or school has ever created a brain cell. You are born with them and college is fine, but it has done little for most jobs.
All large companies and government jobs do not promote from the bottom up. If you don’t have the correct degree, you are passed over which is why big business and government are screwed up. Small businesses still promote from the bottom up. The point I’m trying to make is that we need to get back to where we promote people because of their ability, not their resume.
In reference to the autoworkers union and auto companies, the big problem is guaranteed employment. UB time is the hours companies pay the union for their officers, which is pure nuts and another waste of money. There should only be five job classifications, and once you qualify for the highest grade that is your pay. The company should also be able to assign anyone to any job that he is qualified to do, as long as his or her pay is at their highest level of qualification. The auto companies need to cut their bureaucracy as well.
No public company should issue stock options to their management. The Japanese don’t. There should be a salary cap which should not be over 50 times the lowest paid employee for the CEO and the CEO’s bonus should never be over twice his salary.
There has never been a shortage of CEOs, just like politicians. There is always someone who wants the job.
To really move our economy and create jobs, here is what politicians should do:
1. Lower corporate income tax to 18% then you’ll see companies either spend the money for equipment or pay out dividend to shareholders.
2. Keep the depreciation at 50% for the next two years for all new equipment. Note: Make that for equipment purchased and made in the USA.
3. Allow companies not to pay the FICA match tax on all new employees and all employees who are brought back from layoff. Keep this for two years.
4. Make all dividends paid out to shareholders deductible to the company, tax at shareholder level only.
5. Let companies bring their profits from foreign countries back to the U.S., with a 5% tax, if they invest it in the U.S. or pay out dividends.
6. The Federal, State, and Local governments have to get their house in order by cutting their bureaucracies and cost. They must cut employees, lengthen retirement age and lower payout.
7. Stop giving banks money with no commitment to make loans. It’s crazy that banks use money to buy other banks (one in China for $9 billion). Also, make them get rid of private jets like the automotive industry did. AIG, to whom we gave $150 billion, has seven jets. While I’m thinking about it, speaker Nancy Pelosi flies on government jets. Hell she’s worth $400 million, let her buy her own. She’s the first speaker to have a private government jet furnished.
I will try to post more regularly in the future. ☺ The Grizz
Comments
Posted by Doris Mason on Jan 13th, 2009
Great article. Your opinion on how you would modernize/streamline the city government would be appreciated. Don't you think it is strange that when property values are going down, the city/county is raising assessed values of property? It is my opinion that most of city hall/county building occupants have been there too long. Give the voters some hints as to how we can turn things around. Your opinions are great!
Posted by Bill on Mar 30th, 2009
You make too much sense to be accepted in the current system, it would seem. But maybe you could replace Durbin in the next election, as outrage should be peaking by then. That might open the door for a new and more Grizzly president from Illinois in 2012. We will need a businessman to fix this mess. Do you have any thoughts on abolishing the Fed, and letting the government issue its own currency, instead of our current fractional reserve system? Franklin, Monroe, Lincoln and others seemed to think it was a good idea. Right now it appears the big bankers are being bailed out by the taxpayer, after creating the problems in the first place.
Posted by Sherwood MacRae on Jun 7th, 2009
I notice that you are not talking, publically, lately. Perhaps you have discovered that - occasionally, the "tooth fairy" does reward those with thepower of belief.
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