Let's fix these banks. Let's fix this economy.

I am not a professional policy maker and I am not an economist.

But, I am a thinker and have had enough education and experience that
I think I can fix this economy, at least better than our current leaders are doing.
Then again, I do not think at this point anyone can make it worse.

First, it is necessary to understand how this economy works. Yes, there are
things such as employment, national productivity (GDP), company earnings,
personal spending, commodity prices, etc. However, a lot of how this works
is behavioral. I think people need to be studying behavioral economics to fix this
situation.

There was a lot of hope with Obama coming into office. Even I was hopeful. After all,
Hope and Change is why he won, and what we heard for almost 3 years. Suddenly Obama
wins and is quiet until he takes office. Once he is in 'POWER' he comes out, not with Hope and Change, but with Doom and Gloom. Where is the positive President we were hoping for? Where is the Fearless Leader who will take us back to prosperity? He is nowhere to be seen.

The Stock Market is often a measure of confidence. There is a large group of people who invest, and they are considered a gauge of the confidence of the people. Right now it stinks. There is no confidence in our future. Each time policy makers speak, especially the President, the market goes down. Each time there is a bailout the market goes down. There is no end in sight.

Right now the Administration is lacking in credibility. Obama has not done yet what he promised, except threaten to raise taxes and spend gobs of money. Congress has no bi-partisanship. There is continued bickering among all the Congressmen and Senators, worrying more about their own projects then the people who voted them in.

It seems that half the nominees of Obama either have tax issues or withdraw their name before confirmation. I have never seen something like this before. The Treasury in particular cannot even fully staff themselves, amidst one of the greatest financial tragedies of American History. No one wants to work for Geitner or Obama.

So, with all this going on it seems no one has confidence that the people elected will save us from this awful mess we find ourselves in.

Here is what they can do.

1) Be Positive. Yes, things are bad, but look at history. Learn from history. Teach the history. Things are bad, but not that bad. We are not as bad even as we were in 1980 - 1981. Things are not as bad as during Vietnam or World War II. Things have far to go before we reach something like the Great Depression. Things are still okay. We are still watching cable T.V. while talking on our I-Phones. We are going to McDonald's and shopping at Walmart. Could you do that in the Great Depression? I think we over exaggerate our current plight.

2) Fix the banks.

How?

Temporarily hault the need for Mark-To-Market accounting. Right now a lot of the banks assets are marked to $0, even though they still have some value. After all, many of their toxic assets right now are homes that have value.

Because of the accounting system they much mark the asset to $0 because right now there is no market for these toxic financial instruments. If it is temporarily changed to Mark-To-Model it is possible to have the assets valued.

If the government creates a private/public capital fund, creates the model to be used for the accounting, and have the banks sell the assets to this fund at the model value these toxic assets could be taken off the banks books with a value above the current $0.

This will stop all the write-downs and in fact there could be write-ups. A stipulation can even be put in place to ensure that if the value years from now does not reach the model value that at that point the banks can cover the funds loss on that value. This will give a few years for the banks to recover before possibly having to pay for any value discrepancies between the market and model values.

In many cases the fund can make a large amount of money as the value of the assets increases. After all, it is not like 100% of houses will go in default or 100% of home owners will stop making their payments.

It is said that if this is done there could be bank stocks that could more than double in one trading day. That would be a boost of confidence in the market.

3) Stop unnecessary spending.

All this talk about fixing health care is going to kill this economy. The stocks of hospitals, HMO, and pharmaceuticals took a deep dive this past week as the fear of Obama's policy finally hit one of the so-called safety stocks (especially the drug stocks). It will cost $100 Billion a year to do what Obama wants. It will decrease profits for 100s of companies. It will hurt the economy in the short run. Yes, it will help in the long run, and I agree we need to overhaul the health care system in this country. However, not now. Talk about it after we have recovered and can afford it.

The current proposed 2010 budget is appalling. A $3.6 Billion budget is unacceptable especially when it will need an increase in tax of the wealthiest Americans to be successful. That announcement has increased the decrease in confidence of our economy. Last time I checked it is the wealthy and upper middle class that already shoulder the largest burden of the taxes, and many of these individuals are the ones that move the stock market, make the jobs, spend the money, and feed all the people who don't work in this country. Bad idea in a recession President Obama, but then again I guess you did not read what they did after the Stock Market crash of 1929 and during the Great Depression. I think he believes that FDR saved our country by spending money and doing all the projects we learn about in history. However, if you actually read the history things did not get better, but often got worse. It was World War II that saved us and kick started our economy. I hope it is not a war that saves us this time, but good prudent and intelligent policy.

A Whole Bunch of Money Spent

Can you fathom all this money the government is spending. I do not argue that
to some extent it is necessary due to the horrible economic situation we are in.
However, do we need to spend THIS much money? With so many "so-called" smart
people we have running our country is it not possible to find a more efficient way to
complete this successfully?

The over $800 stimulus plan is a virtually uncountable some of money. If you were to
spend $1 Million every day since the Birth of Christ you will still not have spent all of the
stimulus package.

The thought that these greedy and sleazy politicians reaction to the complaints of the 'pork'
in the bill is that it is only a couple of percent of the bill so it is okay. What in the world are these
greedy and spoiled politicians thinking? Yes, maybe one of the pork projects is only 0.01% of the bill, but that could still be $80 Million. Wait a second, last time I checked the total amount that my immediate family will ever make in our lives is probably going to be less than that. The total income of the apartment complex I live in (including the apartment complex corporation) will not make that much in one year (or even 5 years). Every dollar counts, and until the politicians in Washington realize this, our country will never be great.

All politicians need to be held accountable, and I would say that any politician still working for pork barrel spending should be impeached, for he/she is violating the responsibility and trust that they were elected to uphold. It is no better than Gov. Blago in Illinois. Something to think about next time you vote for any public official.