All of the craziness

While I have been out of the blogosphere for a while, I have not dropped off the map entirely. I have been busy. Crazy busy. Work, home, church… busy. Good busy, but busy none the less. Considering the current economic state of my company, I have recently taken to several job boards and joined linkedin, a career networking site.

With so many things to occupy my mind I have chosen not to listen to too much political commentary, although I have been following the news. I have paid vague attention to Obama’s cabinet selections so far and I have to say that for the most part they are a) not much of a change from past administrations or leadership positions, b) they aren’t quite as representative of the far left as I would have expected in fact some are even pretty moderate, and finally c) many of the positions seem to have been selected because of their prominence in the (Dem) party or for their faithfulness as supporters, rather than for their acumen for the position. Interesting move on Obama’s part. I’m not sure if this is an attempt to solidify his position as the head of the Dem Party and so shore up his influence in the rest of the Dem led government or if this is an attempt at a throw back to what Lincoln did in selecting his cabinet positions. Either way, it is pretty interesting.

The thing that concerns me most about the actions of the current, as well as the incoming administration is the handling of the financial mess. You would think that in any ‘crisis’ of this sort, the first thing that you would do is identify the real source of the problem and address it appropriately. Unfortunately that is not the course of action that Pres. Bush has selected and certainly not the one that the incoming Obama administration will continue. Instead of addressing the problem of political meddling in the mortgage industry and negligence by the SEC, the Bush administration pulled out a trillion dollar box of band aids and started applying as needed. The Obama administration, combined with the Dem congress has indicated that they will super size that box and add in a few rolls of gauze and maybe even some duct tape if things don’t improve (which they are already warning us that they won’t). In the process they are going to show the country that although the Bush administration and their compassionate conservatism (read NON-conservatism) spent money like drunken sailors and increased spending to unrealistically manageable levels in almost every area, the Democrats are the REAL money wasters and government interventionists.

Right now the solution to every financial problem that we have faced is to throw money at it. And if that doesn’t work, artificially lower interest rates and try and get the private sector to throw money at it. At best this will create a temporary and false bubble. The answer is that companies that are not operating in a solvent and efficient manner need to be shaken up. GM needs to go into bankruptcy. The UAW needs to be dismantled or at least completely reformed. If the TARP program is really going to be used it needs to be used in the manner that was intended. If it is just going to turn into a goodie bag for bad companies it needs to be stopped entirely. After the ‘TARP Junk Real Estate Gov. Coorporation’ buys up all of the ‘toxic debt’ that the government originally guaranteed through Fannie and Freddie, then it needs to transition and facilitate the break up and elimination of Fannie and Freddie.

Government needs to get out of the mortgage business. The shares of different industries that we have acquired during this ‘bailout fiasco’ need to be sold off as quickly as possible. Government should maintain the fair practice of business. They should prevent companies from behaving in a way that limits or endangers the free market, but they should have no vested interest in any part of the market. That is not the job of the government.

What we are looking at his a huge deficit that has no hope of turning around. Revenue to the government is going to plummet while the government just increases in size and cost. The answer is to DRASTICALLY cut spending while simultaneously making huge cuts in the tax rates. Yes, this will run a short term deficit, but it will light a fire in the private sector that will be the fuel for a sustained and healthy rebound.

As things turn around continue to cut government spending. Nancy Pelosi recently said that the congress is where businesses come to get a ‘hair cut’. I think congress needs to pull out the Bic and adopt my style of haircut on the federal government.