A FISH TALE

The financial troubles in Europe bring back memories of the fairy tale about the starving people on an isolated Pacific island.

It seems that one government sent in a load of fish which the starving natives immediately consumed. Another government sent in a teacher or two. Their job was to teach the starving natives to fish.

Some of the natives stood by the pier and waited for their next arrival of free fish. No shipments ever came.

The natives who learned how to fish ate well and eventually ruled the island.


An analysis of the European situation is not off base.

A lot of voters in Europe want the rich nations to underwrite the losses of the big debtor nations so that life can go on as before. They remind you of the starving natives who stood by the pier waiting for a second gift of fish that never came.

The unpopular view that the nearly-bankrupt-nations must change their lifestyle and borrowing/ spending habits reminds you of the natives who opted to learn to fish.

Parallel to the fish story ends there because everybody gets one vote. Those who were at the pier outnumbered those who wanted to learn to fish. But each vote counted the same.

America, itself, is not absolved. Haven’t we really borrowed ourselves thin to support the “entitlements” that were given to us in the past partly to buy our vote (with our own tax money or credit) and partly out of good intentions but would allow unintended results for greed--by those who saw a chance to personally profit from a well intended idea.

Here’s to those in the world who elect to learn to fish. May they become the leaders of the future.

I have a Dream. Its a fun Dream

I am dressed in my Brooks Brother’s pinstriped suit wearing a rep necktie with my white button down Brooks Brother’s oxford shirt.

I am standing on a podium in front of 1500 demonstrators in Liberty Square who want to “Occupy Wall Street” and the demonstrators are giving me their full attention which is the fun part.

And I am asking them what they really want. SILENCE! All I ever heard is that they wanted was long jail terms for Wall Street and banking officials guilty of greed. No Problem. The country is full of potential scape goats.

What else do you want? I ask. SILENCE, AGAIN. There is some mumbling and waving of signs that talk about Wall Street lies and greed.

Do you want the government to run all big businesses, I ask? Like the post office? Or like the railroads and telephone companies in England before Maggie Thatcher? Or Fannie Mae and Freddie Mac in this country?

By the way, I ask whose idea was it that everybody deserves a house (or maybe two) even if they can’t afford one and was that the trigger that set off the current depression ? (correct).

Do you remember the ad for mortgages that read “No Docs” or “No Wage Checks”? Did these ads run in The Washington Post too? Was that a government program run by the same types of people that might run the banks if you had your way?

Or, are you really after forgiveness for your own $80,000 education loan because it took you five years to complete four years of college work in an institution whose tuition has increased at more than twice the inflation rate? (And by the way, have you ever checked out the standard of living of the tenured professors who are pretty adept at getting government grants and working the system)?

And I am glad to see that you have a lot of Union support here. I am still waiting for their apologies for being so successful in raising wages and benefits so that American businesses moved to low wage countries abroad. And this contributed to higher unemployment and discontent among their own membership. Maybe what you really want is more of my money so that you can continue your “entitled” living . Sorry, there is not much left. My house in Greenwich won’t sell. And to save money for your sisters’ private school and future college expenses I am living full time in the summer house which won’t sell either because of the housing bubble generated by two government run agencies and a lot of Congressmen.

My income tax has increased and will probably will go up again, because I am still considered rich which just isn’t so, since I am paying double real estate tax and 6.5% sales tax and tax on gas, telephones, etc. etc. And I am paying a high fee to my tax accountant because I can’t understand the IRS’s many directives.

Now quit throwing those eggs. I can’t afford $13 plus 6 ½ /% sales tax to get this Brooks Brother’s suit cleaned again and my girlfriend who lives on a beach in Florida is still complaining about the spots on my clothing.

Save the eggs, boil them and invite me for a lunch. Kindly invite my girlfriend too. That will save both of us money.

Great Thought (Maybe) in a few words (Maybe)

Thought Number 1

Perhaps the US should forbid the importation from Europe of social, financial, or banking ideas. They don't seem to work too well over there. And besides, we have enough "entitlement ideas" of our own and they don't work so swell either.

Thought Number 2

What more proof do we required about the basic need for personal incentives in the national financial mix? Just look at what's happened to the Chinese and Russian living standards since they included more personal incentives in their finances. Or look at the difference in life between South Korea and their northern brothers. Or study East Berlin since they joined the west. Why, then, do some people in the U.S. want to de-incentivize those who seek to better their lives???

Thought Number 3

Is it true that, deep down, those who borrow dislike those who lend? Or that those who receive unearned largess dislike or suspect those who gave it?

Thought Number 4

Because of the economic demise of 2008 many many tax payers have carryover capital losses that can only be used against capital gains (except for $ 3,000 per year). With no capital gains to be had in the current year, why doesn't Washington decree that taxpayers can deduct 1/3 of their total carry-forward loss (versus the $ 3,000 allowed now) provided all carry-forward losses are completely used up in say 3 years? The tax savings would increase consumer spending and confidence almost immediately. The funds would go into consumption, savings, debt reduction or investment -- all stimulating job growth and/or real estate values. Just what we need.

Those are my thoughts for today. Steve Jobs 'thought differently'. We need a Steve Jobs in Washington.

Now Here's an Idea.

History has shown us that our Nation, eventually, meets every crisis with creative new ideas and bold action.

Here is an idea that will reduce the national debt while stimulating the economy, creating jobs and helping banks get their house in order. And yes, it is possible to achieve both.

The Idea: Government encourages home mortgage owners to take advantage of historically low interest rates by refinancing existing mortgages to cut monthly outflows of personal cash. The Government encourages this with a Cash-for-Cash 2011 Tax Credit or, a government direct Grant for the closing costs up to a fixed percent (so banks can’t raise fees to extract the value of the program).

How to pay for it: The mortgage owner would re-pay the grant (or tax credit) over a ten-year period plus a small interest payment.

Protecting against unintended consequences: This program would be limited to the remaining balance on the mortgage. No leveraging up or using it to speculate.

Who wins:

• The homeowner wins: They don’t have to come up with the capital to re-finance and they get lower monthly costs. This gives them more money to spend which drives the economy.
• The Government: We (the government) get lower defaults because people don’t walk away from homes. We get our Grant or Tax Credit back over time, with interest secured by homes with people actually living in them.
• The Banks win: They get fees (fairly priced), and the mortgage now on the books (probably shortly sold) is of higher quality because the payment is lower

There ARE things we can do to navigate this crisis. We need new ideas and clear thinking in lieu of career politicians maneuvering for advantage. If you have ideas, let your elected officials hear them. Push them into thinking about the power of new ideas. When leaders aren’t leading, the population must come forward…..

Shocking?

Here’s a shocking idea for those who think none of the current Republican candidates for U.S. President are likely to beat President Obama in 2012.

How about the retiring Secretary of Defense Bob Gates? Shocking?

Yes, shocking until you see him being interviewed by a somewhat hostile press.

Yes, shocking until you think about Eisenhower defeating Senator Bob Taft for the Republican Presidential nomination in 1952.

Yes, Shocking until you look at the results of Eisenhower’s defeat of Democrat Adali Stevenson in 1952 and being re-elected four years later.

And shocking until you think that IKE negotiated us out of Korea and then went on to get a bunch of roads built that still serve us well today – more or less.

This doesn’t’ suggest that Gates isn’t’ without faults. Perhaps the current politicians don’t like him. But maybe that is an asset. Remember, the Old Guard Republican politicians wanted Taft in 1952 over Eisenhower. IKE was not perceived as a politician. Neither is gates.

Perhaps his personal life won’t stand up to the usual bright lights. We’ll, lets see for sure.

The interviews to-date indicate he is experienced in handling congress on bi-partisan matters. Also he’s a Republican appointed by a Republican and re-appointed by a Democratic president.

So – shocking as the idea may seem, perhaps its worth an objective look, by objective Republicans. After all, maybe what this nation needs right now is to get a shock – or to say in military terms -- a hard kick in the butt.