It’s 3 A.M. and You Must Read This!

Rarely do I promote someone else’s column but this is one time I will. His column starts with this paragraph.

“It’s 3 a.m., a few months into 2009, and the phone in the White House rings. Several big hedge funds are about to fail, says the voice on the line, and there’s likely to be chaos when the market opens. Whom do you trust to take that call?”

Those are the words of Paul Krugman’s latest column. It you don’t want to read it all he ends the column with these words.

“The modern economy, it turns out, is a dangerous place — and it’s not the kind of danger you can deal with by talking tough and denouncing evildoers. Does Mr. McCain have the judgment and temperament to deal with that part of the job he seeks?”

Hold your nose if you must. The nominees for president aren’t the ones I would have made but the deed is done. Now we must choose.

No on Waxman

I am not voting to re-elect my congressman, Henry Waxman (30^th District of CA). I knew the man when he held no office and was a member of the Beverly Hills Young Democrats. I never thought his West Los Angeles district would ever include any part of the San Fernando Valley. Somehow re-districting in the year 2001 moved part of the west end of the Valley into his district.

There are a few reasons for not giving him my vote.

He lacks the will to take an independent position. The $700 billion Wall Street bailout is an excellent example. He voted for the bill after posting his objections on his web site. In part he wrote, “I have serious reservations about the Administration’s bailout proposal. The structure of the plan appears designed to maximize returns for Wall Street and minimize protections for the taxpayer.”
He is now holding hearing on the collapse of Lehman Brothers and AIG. Where was he in previous years?
After the biggest passenger train accident in California history he then co-sponsors legislation that requires railroads to install safety equipment. Where was he before the accident?
Ten years ago he passed legislation in Congress outlawing a subway in West Los Angeles that was based upon desire of the wealthy in that area, to the detriment of public transportation. He had the law canceled this past year when traffic became unbearable and his wealthy supporters relented.
He is now holding hearing on the collapse of Lehman Brothers and AIG. Where was he in previous years?
He has been in office so long he has become stale. He first went to Washington in 1975. He has lost the vigor to actively represent his district. It’s a combination of too comfortable and too old. He is 69 years old this month.

So who will receive my vote? It will not be the Republican. His confusing web site says “Vote November 2010” and rants against John McCain but does support Sarah Palin (“Palin si – McCain no”). My vote will go to any other party that has a clear vision.

The $700 Billion Give Away

The three page proposal by Henry Paulson was clearly written. There was no misunderstanding of the language. It was an improper proposal because the plan put too much authority in the hands of the Treasury Secretary. In just two weeks the House of Representatives rewrote the proposal into a 110 page law that is not understandable by most people. I have read 12 pages of this bill entitled ‘‘Emergency Economic Stabilization Act of 2008.’’ I know you have to write law in proper legal form but this law has been written to hide its true purpose and provide political coverage. Even the candidates for president (Obama is a Harvard law graduate) have given mediocre support for this law.

An example is the section on executive pay. This was written to obfuscate the issue. It obviously is not intended to prevent golden parachutes to incompetent executives. Apparently Chris Isidore of CNNMoney.com agrees.

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE

GOVERNANCE.

(a) APPLICABILITY.—Any financial institution that sells troubled assets to the Secretary under this Act shall be subject to the executive compensation requirements of subsections (b) and (c) and the provisions under the Internal Revenue Code of 1986, as provided under the amendment by section 302, as applicable.

(b) DIRECT PURCHASES.—

(1) IN GENERAL.—Where the Secretary determines that the purposes of this Act are best met through direct purchases of troubled assets from an individual financial institution where no bidding process or market prices are available, and the Secretary receives a meaningful equity or debt position in the financial institution as a result of the transaction, the Secretary shall require that the financial institution meet appropriate standards for executive compensation and corporate governance. The standards required under this subsection shall be effective for the duration of the period that the Secretary

holds an equity or debt position in the financial institution.

(2) CRITERIA.—The standards required under this subsection shall include—

(A) limits on compensation that exclude incentives for executive officers of a financial institution to take unnecessary and excessive

risks that threaten the value of the financial institution during the period that the Secretary holds an equity or debt position in the financial institution;

(B) a provision for the recovery by the financial institution of any bonus or incentive compensation paid to a senior executive officer

based on statements of earnings, gains, or other criteria that are later proven to be materially inaccurate; and

(C) a prohibition on the financial institution making any golden parachute payment to its senior executive officer during the period

that the Secretary holds an equity or debt position in the financial institution.

(3) DEFINITION.—For purposes of this section, the term ‘‘senior executive officer’’ means an individual who is one of the top 5 executives of a public company, whose compensated is required to be disclosed pursuant to the Securities Exchange Act of 1934, and any regulations issued thereunder, and non-public company counter parts.

If Congress refuses to go along with this bill I will totally understand. If this law is adopted I fear that it may be a wasted effort.

$700 Billion, California Democrats Have Major Misgivings

The news reports indicate that it’s the Republicans who have concerns about the bailout package but look at my Democratic representatives. They too are voicing their concerns.

I called my congressman and both senators to voice my objections to the bailout.

Henry Waxman a leading congressman and I am in his district:

“I have serious reservations about the Administration’s bailout proposal. The structure of the plan appears designed to maximize returns for Wall Street and minimize protections for the taxpayer.” This was part of a one page press release.

Dianne Feinstein, Senior California Senator

On September 26, 2008, Senator Feinstein speaks on the Senate floor about the national economic crisis and Congressional efforts to negotiate an economic rescue bill. Click here to watch the video.

Nancy Pelosi, Speaker of the House and San Francisco congresswoman

“We’re very pleased that the President acknowledged last night in his remarks four of the principles that we had been looking for, which was oversight, forbearance for homeowners, CEO compensation, and equity for the American taxpayer. We think in making this large of investment, the taxpayer should have sole ownership, some upside to it, get some of the benefit of the investment.” This was part of her statement this past Thursday.

McCain to Media, “I’ve got a partner that’s a good maverick”

Wow! What a statement. What’s important? Well McCain calls himself a “maverick” so it all fits. Despite Sarah Palin’s gaffs, John McCain is not likely to drop her from his ticket. If you missed the Katie Couric interviews here is part of the transcript. James Rainy’s Los Angeles Times column tells you what she said. Her responses clearly showed her lack of understanding. This was the really mind blowing part.

” . . . where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the healthcare reform that is needed to help shore up our economy. Um, helping, oh — it’s got to be all about job creation too. Shoring up our economy, and putting it back on the right track. So healthcare reform and reducing taxes and reining in spending has got to accompany tax reductions, and tax relief for Americans, and trade, we’ve got to see trade as opportunity, not as a competitive, um, scary thing, but 1 in 5 jobs being created in the trade sector today. We’ve got to look at that as more opportunity. All of those things under the umbrella of job creation. This bailout is a part of that.”

CNN reports that even conservative columnist Kathleen Parker, who was an early supporter of Palin says “out of her league.” David Brooks, George Will, and David Frum have all publicly questioned Palin’s readiness to be vice president. All of these columnists are conservatives.

Can you imagine Sarah Palin as president of the United States? I cannot. It is one more reason to vote for Obama.

The Sky Is Falling!

Like a cartoon character John McCain is running around in circles. Not knowing what to do he keeps running in circles. He reminds me of the story of Chicken Little. Could Foxy Woxy really be Henry Paulson?

Let me retell the story as posted on http://www.geocities.com/mjloundy/.

One day Chicken Little was walking in the woods when —KERPLUNK — an acorn fell on her head

“Oh my goodness!” said Chicken Little. “The sky is falling! I must go and tell the king.”

On her way to the king’s palace, Chicken Little met Henny Penny. Henny Penny said that she was going into the woods to hunt for worms.

“Oh no, don’t go!” said Chicken Little. “I was there and the sky fell on my head! Come with me to tell the king.”

So Henny Penny joined Chicken Little and they went along and went along as fast as they could.

Soon they met Cocky Locky, who said, “I’m going to the woods to hunt for seeds.”“Oh no, don’t go!” said Henny Penny. “The sky is falling there! Come with us to tell the king.”

So Cocky Locky joined Henny Penny and Chicken Little, and they went along and went along as fast as they could.

Soon they met Goosey Poosey, who was planning to go to the woods to look for berries.

“Oh no, don’t go!” said Cocky Locky. “The sky is falling there! Come with us to tell the king.” So Goosey Poosey joined Cocky Locky, Henny Penny and Chicken Little, and they went along as fast as they could.

Then who should appear on the path but sly old Foxy Woxy.

“Where are you going, my fine feathered friends?” asked Foxy Woxy. He spoke in a polite manner, so as not to frighten them.

“The sky is falling!” cried Chicken Little. “We must tell the king.”

“I know a shortcut to the palace,” said Foxy woxy sweetly. “Come and follow me.”

But wicked Foxy Woxy did not lead the others to the palace. He led them right up to the entrance of his foxhole. Once they were inside, Foxy Woxy was planning to gobble them up!

Just as Chicken Little and the others were about to go into the fox’s hole, they heard a strange sound and stopped.

It was the king’s hunting dogs, growling and howling.

How Foxy Woxy ran, across the meadows and through the forests, with the hounds close behind. He ran until he was far, far away and never dared to come back again.

After that day, Chicken Little always carried an umbrella with her when she walked in the woods. The umbrella was a present from the king. And if — KERPLUNK — an acorn fell, Chicken Little didn’t mind a bit. In fact, she didn’t notice it at all.

The End