The Economic Philosophy of Gerald Spencer
I was fortunate to meet this fine gentleman the other day. Excellent reading material provided by a true Patriot.
spencerae.com
THE ECONOMIC PHILOSOPHY OF GERALD SPENCER
The International Trade Deficit must be corrected by any means possible!!!!
The USA is losing the Economic War!
The USA is losing the Technology leadership!
The USA is becoming Bankrupt!
The USA is Committing Economic Suicide!
1. Economic Principles: Economics, Trade Deficit, Government Spending Deficit, Jobs for Americans, and the Buying Power of the Dollar are all interrelated and very important. These subjects need to be understood by the General Public. Economics is not that complicated. It is interlocked with understandable cause and affect principals of various economic action options.
1.1. National economic wealth is created only when a country grows something in the earth, extracts something from the earth, or makes (manufactures or constructs) something that is consumable (or useful). Transportation, distribution, warehousing, taxes, sales, delivery, packaging and other similar costs are added to the value (or the cost) of the product that was initially created by these basic creative efforts. The USA has almost entirely ceased to generate wealth for future US generations.
1.2. Industrious nations like China, India, Brazil, Pakistan, and other foreign nations grow wealthy and secure the value of their currency by creating enough products to support their needs with their farms, factories and mines, plus they earn additional currency by creating additional wealth by exporting additional products that they manufactured. The health of every other business in that economic country depends upon these productive industries.
2. US Foreign Trade Deficit: The USA has created a situation that US gold; US currency; real estate title to US properties, businesses, stocks, and other US assets are leaving the USA to pay people in foreign countries to manufacture the things that US citizens consume in amounts of annual value that are greater than they would be if US citizens were manufacturing more of the things in the USA that US citizens consumed in the USA. We must change this situation or we will become a post WWI Germany economically. This could happen overnight when we have sold title to all of our real estate, farms, agri-businesses, food supplies, dairies, forests, industries, breweries, hotels, factories, casinos, financial institutions, retail businesses, and all of the other assets located in the USA for freshly printed US Bonds and T-Bills to foreigners in return for their US dollars they earned making things for us to consume.
2.1. A Trade Deficit is created when the USA importing, transportation, distributing and retail sales companies such as WalMart, Home Depot, NTB and etc. pay companies and individuals in foreign countries like China with US dollars to manufacture the things that these US businesses import, distribute, and then sell to the US consumers. Manufacturers such as GM, Ford, GE, Chrysler, GE, Westinghouse and etc. manufacture vehicles, appliances, and equipment made with imported parts that they paid the companies in the foreign countries with US currency to manufacture these parts for assembly of the finished product in the USA that is then sold to US consumers.
2.2. The US government also "borrows" US dollars (actually they sell freshly printed-paper T-Bills, US Government Bonds, and other US securities that can be redeemed for title to US real estate at public Federal Reserve auction to China, private individuals, and other industrialized countries that earned US dollars mostly by manufacturing things for international trade) to pay US government expenses including negative balance of trade, wars, military jets with active duty military USAF pilots for the personal use of specially privileged members of congress (Pelosi), employee payrolls, government retirement checks, courts, federal police, failed business bailouts, cash bonuses to the various Wall Street forgers of SEC documents that contributed to political campaigns, Las Vegas corporation junkets for failed corporation employees, foreclosed house mortgages for big spenders with bad credit, new multi-million dollar French manufactured personal corporate jets for political contributor's bankrupt corporations, pork barrel projects, research contracts, welfare, social security, Medicare, Medicaid, SSI, expensive corporate vacations, new infrastructure, wealth re-distribution, mental health, imported consumer goods and etc., and any other thing that congress and the president decides to use taxpayer money to acquire, build or just give to their political contributors and various other privileged individuals with borrowed US dollars. If taxes taken in each year are not sufficient to pay these expenses, then the government just prints more paper T-Bills, Government Bonds, etc. and sells them at auction for US dollars from people who are holding US dollars (foreign industrial manufacturers) in exchange for these freshly printed T-Bills, Government Bonds, etc.
3. The US government does not go to banks to "borrow" US dollars. The US government just buys some paper and cranks up the presses to print more T-Bills, Government Bonds, etc. The US government then conducts US Federal Reserve auctions to sell these securities for public bid sales in exchange for US dollars to deposit into banks and then pay for the various US government expenses.
3.1. The US government is selling freshly printed paper US Bonds (that can be exchanged for title to US real estate, farms, agri-businesses, food supplies, dairies, forests, industries, breweries, hotels, factories, casinos, financial institutions, retail businesses, and most other assets located in the USA that they do not already own) to China and other industrialized wealth generating nations in return for the US dollars that US importing companies paid them to make the things for US citizens to consume. The US government uses these US dollars to pay US citizens for raking leaves, environmental cleanup, mortgage bailout, union retirements, TARP, wars, business failures, government payrolls, social programs, and etc. to stimulate the economy, but this just makes the existing US dollars have less value and less buying power. These are cosmetic economic stimulation changes that do not correct the structural problem that is the Foreign Trade Deficit.
3.2. The US Federal Reserve publicly received bids of almost 4% interest for $100 billion of freshly printed paper US Treasury securities issued in May 2009 public auctions. This was about double the rate expected by the Treasury Department. The US government will need to "borrow" at least $6 trillion more US dollars from the industrial manufacturing countries before the end of 2009 by conducting more of these same US Federal Reserve auctions. Who knows how high the interest rates will be bid at these future auctions. China, and other wealth generating nations already hold a large portion of all US federal debt securities, and they are exchanging these instruments for title to US real estate, farms, agri-businesses, food supplies, dairies, forests, industries, breweries, hotels, factories, casinos, financial institutions, retail businesses, and most other assets located in the USA that they do not already own, since the US government does not redeem these dollars for gold.
3.3. Some US government sources estimate that the title to 25% of our assets with recorded deeds and titles are now listed as foreign owned (http://economyincrisis.org/articles/show/1072) and this percentage is increasing rapidly. Our payments to foreign oil, manufactured assembly parts, and foreign raw material suppliers are handled in essentially this same manner. What will we do when we have nothing of value to sell to the foreigners who work to make the things that we consume? I do not believe that they will work for free.
3.4. Why does any foreigner with US dollars earned by making things for US consumers buy these freshly printed-paper US securities if they cannot be redeemed for gold? Because these freshly printed-paper US securities can be redeemed by foreign entities for title to US real estate, farms, agri-businesses, food supplies, dairies, forests, industries, breweries, hotels, factories, casinos, financial institutions, retail businesses, and most other assets located in the USA, instead of redeeming these dollars for gold.
3.5. Why can't the US government just buy some paper and print more money (faster and faster) to pay our expenses like Mexico? Every time that we print dollars, the value and buying power of each printed dollar reduces proportionately. One US Dollar that would buy about 8 Mexican pesos in 1960 can now exchange for as much as 15,000 (1960) Mexican pesos today. This is equivalent to about 187,500% inflation over that period. A $2.00 loaf of bread would then cost $3,750.00 with Mexican economic monetary policies.
3.6. Why do we have to borrow money from the Chinese, and not our own financial institutions? The Chinese are the main people with a large stash of US paper dollars that they have available to purchase our freshly printed paper T-Bills, US Bonds, etc. at Federal Reserve auctions, for less and less than face value as the confidence of our economic system fails, and as we run out of property and other things in the USA to sell to those people in return for the wealth that they created by working to manufacture the things that US citizens consumed. Since the USA has de-industrialized, the USA has been sending title to US real estate to the people in industrialized countries that are making the things that US citizens are consuming. The USA is almost completely de-industrialized, and the public pressure is being applied to eliminate the remainder of our industries.
3.6.1. How did China and other foreign countries get so much of our US currency, Dollars, T-Bills, Bonds, and other government securities? The USA importers and distributors (WalMart, Home Depot, NTB, GM, Ford, GE, Chrysler, Dell, and etc.) paid the Chinese Companies with US currency to manufacture the things that they imported and then sold to the US consumers.
3.6.2. China already is the USA's biggest foreign lender (creditor) of US Dollars to the US Government to pay government expenses. China owns an estimated $1 trillion of this U.S. government debt consisting mostly of freshly printed paper US T-Bills, US bonds, US securities and etc. If China wants Gold instead of printed-paper currency, a weaker dollar will result. If China wants to only pay pennies on the dollar for any of our future freshly printed paper T-Bills, Bonds, Securities, currencies, etc., this will cause great inflation in the USA, and/or also cause great reduction of the buying power of the US dollar within the USA for imported products. If the foreigners will only pay 5 cents on the dollar for our freshly printed US T-Bills, US bonds, and other US securities, then the USA will have to print up twenty times as much paper money, and the inflation could then become astronomical, ala Mexico.
3.6.3. Chinese Premier Wen Jerboa stated, "Of course we are concerned about the safety of our assets. To be honest, I'm a little bit worried." Wen said at a news conference Friday (13MAR09) after the closing of China's annual legislative session. "I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets." This message is unlikely to be misunderstood at the White House. The USA government is counting on Beijing to loan the US government US dollars to pay for our TARP and economic stimulus packages by buying our U.S. bonds (at hopefully close to face value) with the US dollars and other US currency that they earned from the USA population by manufacturing the things that the USA citizens imported and then consumed.
3.6.4. If I owe the bank $500,000.00 and cannot pay, I am in real trouble. If I owe the bank $50,000,000.00 and cannot pay, the bank is in real trouble. China is probably worried that the future generations of US citizens will not re-pay the T-Bills and US Government Bonds that finances our non-productive US lifestyle of today.
3.7. The US Government essentially became bankrupt when the US stopped redeeming our currency for gold from our gold reserves at Fort Knox in 1971 or 1972. The US government then declared that the dollar is backed by the "full faith and credit of the USA" instead of gold (aka Junk Bonds). We now allow the exchange of title to US property, instead of gold, to redeem foreign earned dollars and other currencies. If we stopped this exchange of US currency for US property, the buying value of the US dollar would diminish to the point that it might take a whole day's wages to buy one loaf of bread. Foreigners know that the US currencies that they earned by making the things that the USA population consumed can not redeemed in gold, so they are purchasing title to our real estate, farms, agri-businesses, food supplies, dairies, forests, industries, breweries, hotels, factories, casinos, financial institutions, retail businesses, and most all of the other valuable assets located in the USA with the hard earned US dollars that they acquired my manufacturing the things that US citizens consumed, instead of exchanging their dollars for gold.
3.8. The USA is committing economic suicide. When and if foreign individuals and governments stop buying our freshly printed US paper T-Bills, US paper bonds, and other paper US securities at Federal Reserve public auctions, and/or start buying these items at the foreign currency exchange equivalent of a few pennies on the dollar, the government checks, social security checks, government payroll checks, and private paychecks will then not buy very much food or anything else that we consume. Your life savings might only sustain you for a couple of weeks.
3.8.1. After we have sold title to all of our US real assets that have any value to foreigners as required to settle our foreign trade obligations, there will not be anything left for the foreigners will want to buy with their freshly printed paper US T-Bills, US bonds. The US government will then not be able to raise any funds for any future re-industrialization of the USA, and the US citizens will not have any possibility of employment in their future. The money passed out to the financial industries did nothing to create any jobs or to eliminate the foreign trade deficit problems with the US economy.
3.8.2. Foreign entities will very soon own everything of value in the USA and then become the major source of employment for US citizens. The USA population will then become employees; possibly indentured servants; or maybe even beg to become slaves owned by the foreign countries and/or foreign individuals that will own everything of value in the USA in the very near future.
3.8.3. US citizens might have no options if they want to feed their families? Our children and our grandchildren might also have to change to the religion (probably not Christian) of the business owner if they want a job.
3.8.4. We are selling of our children's legacy to foreign owners, and the US government calls it "Investing in America". We are racing to sell title to everything in the USA in order to keep from re-industrializing and/or working to produce the things that we consume. This is "sort-of like" US citi9zens selling our body parts to keep from working!
3.8.5. What will be the buying power of the US dollar when there are no remaining US assets that the foreigners want to exchange for the US dollars, T-Bills, and bonds that they earned by manufacturing the things that US citizens imported and consumed? The USA will very soon run out of title to any assets that foreign manufacturers will want to purchase with their freshly printed US government currencies and securities that they purchase at FED auctions with the US Dollars that they earned by making items for US consumers.
3.8.6. The USA needs to direct the remaining funds derived from the sale of the few remaining US real property assets toward investing in activities such as technical education and re-industrialization so that US citizens can get the Gold, property titles, and US dollars back from these foreign countries and into the USA economy via re-industrialization. Wall Street and Banking Business bailouts will not accomplish this. (Do you think that the Chinese buy title to Dogpatch? I think that the US government at one time declared Dogpatch to be the most worthless property in America!)
3.8.7. Science and Technology will not save the USA economy. Asian countries are now outdistancing the USA in producing competent scientists and engineers that are even more technically qualified than the US engineers, while the USA produces Historians, Poets, MBAs, Economists and etc. China is a source of enormous scientific talent because the "weeding out" process starts early and continues up the line to produce, at the end, a stream of highly qualified young people, small, of course, relative to the general population of China, but quite large compared to what comes out of US undergraduate programs. The problem is not "weeding out" but rather, the willingness of middle-class American kids to endure the hard work and intense focus that will enable one to avoid being weeded out. The USA idea that one is entitled to slide without effort or friction through the educational system on one's way to a high salaried job is endemic to the USA culture. The Asian countries produce very few non-technically educated students.
3.9. Other countries view the United States of America as borrowing and spending huge amounts of freshly printed paper money with the careless abandon of a drunken sailor on shore leave. This is very disturbing to those very same foreigners that the US government hopes will buy some more of our freshly printed US securities (hopefully at not too much of a discount and/or of high interest rates) to pay for our economic stimulation, trade deficit, and other various government expenses.
3.9.1. The discounts/interest rates offered at public bid for our freshly printed US securities by industrialized manufacturing nations that have acquired US dollars will depend and reflect upon the confidence that the USA instills these foreigners by our economic actions.
3.9.2. Many countries are losing confidence in the dollar as the benchmark for world trade and currency values. Other currencies, like the Chinese Yuan with a more stable value, are now being talked about as a replacement for the US Dollar as the benchmark for international currency values.
4. Free Trade: Free World Trade of products and commodities means that every US business must compete internationally based mainly upon price (and/or by bribing various government officials). Labor cost is normally the greatest cost component of most products and commodities. The country with the lowest labor cost normally gets the product sale, the manufacturing jobs, and the foreign exchange currency to manufacture these products. Free Trade does benefit the US importers and US distributors of foreign made products for US average citizen's consumption with less expensive products, but at the cost of losing jobs in the USA to make these products. If the USA had innovative products that foreigners did not have, then the USA could get higher prices for those products, until the foreigners copy the US inventions.
5. The only thing that will create/save US jobs, preserve/restore the buying power of the US Dollar is reversing the trade deficit, reducing government borrowing, and/or reducing government spending, to start re-building the USA gold reserves which is the basis of the value of the US dollar. Only a positive balance of trade will restore the value of the dollar, and we must accomplish this by any means possible, or accept third world poverty for the majority of our citizens. The only way to do this is to produce and export more (dollar value of) things than we import. The only way that we can accomplish exporting US made products is to re-industrialize and make these products, hopefully with mostly US materials & Labor. The only way that our products will be sold abroad is if these products are either technologically superior, or cheaper. US citizens must manufacture things to get currency from foreign nations in order to buy back the US assets owned by foreigners.
5.1. What is preventing the USA from re-industrializing? The US citizens do not want to work for the extremely low wages that are paid in foreign countries to manufacture the things that US citizens consume. This is the main reason why the US manufacturers have closed their US factories, and relocated the manufacturing facility to a country with less expensive labor.
5.1.1. US tire manufacturing companies have closed their plants in Ohio, sold the tire manufacturing equipment to foreign citizens who relocated this tire manufacturing equipment to their foreign countries where labor costs are very low compared to US labor costs. These foreigners then re-constructed and re-started these plants using foreign workers that are paid only a small fraction of the pay that US citizens would accept. As a result, these foreign companies now manufacture almost all of the tires that are consumed in the USA. There are not very many industries or jobs remaining in the USA. This is typical of how free trade affects all of our industries.
5.1.2. The USA importers and distributors pay the foreign manufacturers in foreign currencies with US currency (Dollars) for these products, and these foreign countries do not buy very much of anything from the USA because our products are much more expensive than foreign made products, and sometimes not as good. They continue buy the remaining US located businesses, natural resources, casinos, and the other things that they do not already own with the US dollare that we pay them for the producte that they make for our consumption.
5.2. Import Tariffs: Only import tariffs high enough to prohibit imported products from being sold in the USA will create re-industrialization, stop the flow of title to US assets from the USA, re-create the value of the US dollar, and also create manufacturing jobs for US citizens. Yes the consumers will have to pay many times the current price of each item if things are made in the USA, but maybe we can avert a bloody revolution.
6. Scientific & Technology Education Option: If US citizens are not willing to work for lower wages than the foreigner workers employed in foreign countries are paid, then the USA cannot compete based upon lower labor costs. If we cannot compete on lower labor costs, then maybe we could be competitive internationally through other areas such as superior technology, as we did in the few decades following WWII.
6.1. The USA is no longer the Technology leader that the USA was until the 1970's. Asian countries are now are the technology leaders. The best & brightest students in the USA have pursued careers as Financial Genius inventors of worthless financial products that no one will buy, instead of technically innovative products that foreign countries might purchase.
6.2. If we had technically innovative products that foreigners did not have, then we could get high prices for those products with excessive profit, until the foreigners copy our inventions and infringe upon our patents. As we have purposefully reduced our human scientific and technology resporce bases, the USA has stopped beeing the country that is creating any new inventions or products.
6.3. The USA must create superior engineers, superior medical doctors, and superior scientists so that we can regain the technological edge that we have lost in the last few decades. This will not be easy, but it must be accomplished immediately. Resources should be spent on regaining the technological edge, rather than paying for Wall Street mistakes and larger US government pork barrel expenses.
6.4. We must somehow win the economic war in order to create funds to finance the fight to win the technology war.
6.5. We need to reverse course of our educational system and re-emphasize science and engineering to create many more medical doctors, engineers, scientists, and educators as they did prior to the 1970's. The USA scientists, medical doctors, engineers, and educators must also become much better educated, much more intelligent, and otherwise much more superior to any foreign educated engineer and/or scientist in order to design, create, innovate, and produce new technical products that foreigners do not have, so that the foreigners will then buy these new products from the USA, in exchange for their foreign gold and currency which could then be sent to the USA companies.
6.6. Only if our products are technically superior can we export these products in return for their foreign payment (gold and US dollars) to the USA, unless we can produce these products cheaper. We must also prevent foreign countries from pirating and/or copying our new innovative products. We might need to use the force of law and/or the force of our military might to prevent this pirating of our technology.
6.7. Our computer programming technology and expertise (ala Microsoft etc.) helped our balance of payments considerably in the past, but the lack of technical education in this country today has reduced and will soon totally destroy this export capability. The foreign countries have become better than the USA at creating new computer software programs, since the USA has chosen to de-emphasize technical and scientific education in our universities.
6.8. Visit the Texas Medical Center (mostly MD Anderson Cancer Center in Houston) and witness the percentage of women wearing Burkas to get a clue or to estimate the percentage of foreign medical service income currency that is received at the Texas Medical Center. I do not believe that any of these women wearing Burkas are US citizens. Foreign currency paid to our US located Medical Doctors, Laboratories and Hospitals improves our foreign trade balance. I think that most foreigners believe that US educated medical doctors are much superior to their own in-country educated medical doctors.
6.9. Engineers who are working in Foreign Countries and sending (most of) their dollars home to the USA improves our balance of trade. In the past, foreigners believed that US educated and trained Engineers were superior to their in-country educated Engineers. This advantage has almost disappeared since the USA stopped emphasizing engineering, science, and technical education in our Universities.
6.9.1. I have been the engineer of record for the construction of projects in Asia, Europe, Middle East, Caribbean, and South America. US citizens are unaware of the lifestyle advantage that we are accustomed to and take for granted. If our economy collapses, we can become a third world country overnight.
7. China is winning the War for Scientific and Technical Superiority! "China is going to achieve tremendous progress in the world science and technology in the next 30-40 years." This is a remark by eminent scientist and Nobel laureate Chen Ning Yang in his speech on "Science and Technology of the 21st Century" delivered at the opening ceremony of the 6th World Chinese Entrepreneurs Convention in Nanjing on September 17, 2008. In his speech, Yang said that modern science and technology were introduced into China only in the 20th century. Within a time span of just one century with efforts by merely several generations, China has started from scratch to having attained the level of being able to launch and recover its Shenzhou Spaceship, an incredibly rapid development with no precedence in history. So he believes China's scientific and technical level will surely reach the foremost front of the world advanced level by the year 2030 or 2040.
7.1. China is stepping up research of particle accelerator on its own, according to reports from the ongoing 2nd Asia Accelerator Conference. It is said that the Institute of High Energy Physics under the Chinese Academy of Sciences is making an active effort in design and research of positive-negative electron impinging machine in Beijing, and hopes for a 100-fold increase in the brightness of the machine.
7.2. As China increases their Nuclear Research, China will soon surpass the USA in Nuclear and other advanced scientific technologies and capabilities.
7.3. China is using their hard earned and newly created wealth to accelerate their scientific capabilities, including their nuclear and rocket delivery systems.
7.4. This is real scary. The Chinese nuclear capabilities will soon surpass the USA scientific technology. The Chinese have had the Rocket Guidance technology (purchased from Hughes Aircraft in the 1990's in return for a $100K political contribution) for intercontinental ballistic targeting anywhere in the USA, and anywhere else around the world.
7.5. The USA must fight and then win the war for Scientific and Technological Superiority! If we lose the scientific and technology lead to China or any other country, the USA will rapidly decline into a third world nation, and our citizens will have to work for the Yuan equivalent of US pennies per hour after the total economic collapse of the USA and the buying power of the US dollar goes to zero.
7.6. The US government elected to cease construction if the US super collider at Waxahachie, Texas a few decades ago, but to spend many times that cost to bailout various Wall Street financial failures. As China increases their Nuclear Research, China will soon surpass the USA in Nuclear and other advanced scientific technologies and capabilities.
7.7. The USA is no longer the scientific and technical world leader that it once was a few decades ago.
8. Science Educations in the USA are needed: There is very little economic incentive for US citizen college students to major in any of the science or engineering fields at this time, and this needs to change for the benefit of the US economy. I believe that most students today want to study business and/or economics to become one of the extremely wealthy Wall Street (master criminal) MBA tycoons. No person in his or her right mind would major in science or engineering since the pay scale has eroded so much in the last several decades and the study is so demanding compared to the less demanding major fields of study.
8.1. Asian countries are now outdistancing the USA in producing competent scientists and engineers that are even more creative and ruthlessly competitive than the US engineers.
8.2. China is a source of enormous scientific talent because the "weeding out" process starts early and continues up the line to produce, at the end, a stream of highly qualified young people. This is a small percentage of course, relative to the general population of China, but quite large compared to the total numbers that are produced by US undergraduate programs.
8.3. The US educational problem is not "weeding out" but rather, the unwillingness of middle-class American kids to endure the hard work and learn the intense focus required for technical and scientific educations. The USA citizens believe that one is entitled to slide through the educational system without effort or friction on the way to a high salaried Wall Street job after learning very little in college.
8.4. The USA must somehow create engineers, medical doctors, and scientists that are superior to and without equal to any others produced anywhere else in the world so that the USA can regain the technological edge that we lost and/or purposefully destroyed in the last few decades, or the USA will become a third world country. This will not be easy, but it must be accomplished immediately before the last remnants of our technological capabilities are gone.
8.5. This economic reward erosion is also due to the import of (H1-B visa) foreign engineers who will work for just slightly above minimum wages and a Green Card Visa. The Foreign Engineers might be much less as productive as US educated engineers, but they are willing to work for such a small fraction of the pay that US educated engineers are paid (or used to be paid) then it is much more economically effective to employ several foreign educated engineers when compared to the total cost of employing one U.S. educated engineer (except maybe for the additional legal liability of their design failures).
8.6. The USA needs to create a demand for and provide more financial incentive for US students to major in the medical, technical, mathematical, engineering and scientific subjects that are needed to create the technical human capability intelligence bases that will be required to re-industrialize the USA and re-create the US technology base. We need to demand a return to scientific and technical excellence in all levels of our education systems that we purposefully destroyed in the past few decades. It is necessary to re-create the technology bases that are necessary before re-industrialization can occur in order to correct the US balance of trade payments.
8.7. We can only export technology if our products and technology services available for export are superior (or cheaper) to the services available in that particular foreign country. This will first require that our best and brightest students study science instead of other subjects in our education system beginning in elementary school and continuing through graduate school.
8.8. According to the National Science Foundation and the National Society of Professional Engineers, only about 5% of the current college students in the USA studying for a degree in science, medicine, mathematics or engineering are US citizens. In the Asia the vast majority of the college students are majoring in science or engineering. We need to increase the percentage of USA citizen college students studying science and engineering from 5% to more than 60%, in order to emulate the economic industrial successes of the Asian countries. We must emulate the educational systems of China, India, Pakistan, and other Asian countries or the USA will die economically.
8.9. The USA needs to replace our current "dumbed" down "equal outcome" educational process with a "weeding out " process in order to select the best and the brightest to qualify for technical educations. We must provide financial incentives for these students to study science and technology instead of less difficult pursuits. The financial salary rewards in the 1950's made science students respected by other students, and this inducement/reward needs to be re-introduced. Resources should be spent on this endeavor rather than borrowing money for Wall Street bailouts and government payroll expenses which return almost nothing that benefits any of the US economy.
8.10. We could export scientific and engineering services to foreign nations in return for the foreigner's currency, US dollars and gold in order to improve our balance of trade, except that both India and China have surpassed the USA in technological capability. US services would have to be provided by doctors, scientists and engineers who are very much superior to any foreign educated doctors, scientists and engineers, or the foreigners will use their home grown or some other more technically advanced foreign country's medical, scientific and engineering talent and not buy the services of US doctors, scientists and engineers. Foreign countries will always seek the most technically advanced scientific and engineering resources if they can afford those services for their needs.
8.11. Existing US Science and Technology will not save the USA economy. Asian countries are now outdistancing the USA in producing competent scientists and engineers that are even more technically qualified than the US engineers, while the USA produces MBA's and Economists. China is a source of enormous scientific talent because the "weeding out" process starts early and continues up the line to produce, at the end, a stream of highly qualified young people, small, of course, relative to the general population of China, but quite large compared to what comes out of US undergraduate programs. The problem is not "weeding out" but rather, the willingness of middle-class American kids to endure the hard work and intense focus that will enable one to avoid being weeded out. The USA idea that one is entitled to slide without effort or friction through the educational system on one's way to a high salaried job is endemic to the USA culture. The Asian countries produce very few non-technically educated students.
8.12. Student loans should be available for only those fields such as science, engineering, education, and medicine that do contribute to our industrial base that will help our international trade balance by re-creating our technical knowledge base necessary for re-industrialization.
8.13. Most of the large US engineering firms outsource the CADD drafting and the detailed engineering to India or Pakistan. There will no technical design capability when US recent graduate engineers are not trained as engineers by performing detailed engineering and CADD drafting under the direction of an older and experienced engineer. We need legislation to impose prohibitively high import duty tariffs to prohibit the import of technical engineering and CADD drafting services.
9. Knowledge Workers in a Post Industrial Society: Some "economic experts" think that we can become a "post-industrial" society of "knowledge workers" consisting of software developers, data analysts, technicians, editors, scientists, lab technicians, teachers, doctors, nurses, architects, accountants, engineers, inventors, lawyers, poets, musicians, historians, philosophers, etc, and still somehow continue to pay foreigners to manufacture the things that we consume. How do they think that US citizens can get foreigners to pay for (buy) the services of these "knowledge workers" so that we can stop the net foreign flow of US dollars, US gold and title to US properties out of this country? All of these US assets will all soon be foreign owned. How can US citizens earn enough money to pay for the import of the products from foreign countries that we consume unless our education system completely changes course and re-emphasizes science and engineering similar to the 1940's and 1950's, instead of other studies that do not contribute positively to our balance of trade? US citizens cannot stop consuming the things that foreigners manufacture for our consumption, unless US citizens start making these products in the USA. US citizens cannot make the products that we consume unless US citizens re-industrialize and manufacture these things ourselves, or just stop consuming these products.
9.1. Our US citizen "knowledge workers" would have to be much smarter and much more knowledgeable than foreign "knowledge workers" in other countries or the foreigners would hire their own local home grown "knowledge workers". Maybe in the future the USA could produce better "knowledge workers", but only if US citizens totally overhauled and changed our educational system to emphasize science, engineering, and technical education instead of the other various degree majors that most of the US citizen students study today.
9.2. We have lost the technology war to Asia and especially China. China will very soon become the predominant source for "knowledge workers" when other nations need technology, not the USA.
9.3. Nations grow wealthy and secure by making enough food and products to support their needs (real or perceived) on their farms, factories and mines, with an excess to sell abroad to pay for the imports we need or want. The health of every other aspect of our economy depends on these principals. It is silly to speak of a "service economy" without presuming some one else will work to create the food, clothing, energy, transportation, and other products that US citizens consume without just compensation.
9.4. I do not think that any foreign country would want to purchase any of the services of any US liberal arts graduates, MBA graduates, history graduates, philosophy graduates, English graduates, foreign language graduates, economics graduates, or any of the other similarly educated US citizens.
10. How could the USA re-industrialize and also pay decent wages to US citizens to manufacture the things that we consume? We could provide extremely high import tariffs on the products that we desire to begin manufacturing in the USA. The tariffs would be high enough to prohibit the import of these selected products. This would allow the US manufacturer to employ US citizens at some pay scale several times higher than foreign country citizens get paid. The US government could select one product at a time for prohibitive tariffs. The US government might start with steel, automobiles, auto parts, tires, washers, dryers, refrigerators, computer chips, building materials, computers, data processors, and then other selected manufacturing industries. The USA should repeal all free trade legislation and international trade treaties. Our consumable products will cost several times as much as they cost now, but this is necessary. Otherwise the USA will become a third world nation of unemployed street beggars ala India.
10.1. Is there anything made in the USA anymore? When you go to anywhere in the USA to buy anything, look to see where is it made? Nothing is made in the USA anymore. When you buy $1,000.00 tools, parts, materials, etc at Home Depot, they send a large part of that purchase money in cash to probably China in order to purchase these products from the people who actually worked to manufacture these items. This is how the US dollars leave the US economy, and essentially never return. The USA only makes a few things that people in other countries want to buy in order for the US to earn some of the US currency back into the US economy and banking system, but off hand, I cannot think of one single thing foreigners would buy from the USA.
10.2. How can we preserve the economic miracle that has given US citizens one of the highest living standards in the world? The Agricultural and Industrial Base that won WWII and then gave us today's bountiful way of life and created the standard of living that US citizens enjoy today. This industrial and agricultural base produced the food, goods, services and other items that we consumed, plus an excess of these goods & services that were produced and then sold to other foreign countries in order to accumulate the US gold reserves at Fort Knox through a positive balance of trade surplus payments has been purposefully destroyed in the last few decades. It must be re-created at any cost. Wall Street financial manipulations, innovative "financial products", Junk Bond Creations, did not contribute to this economic miracle. It was created by the agriculture, mining and manufacturing sectors of our economy during and after World War II.
10.3. Paying people to rake leaves, pave roads, build infrastructure, plant trees, dig holes then refill the same holes, write poems, paint pictures, clean up the environment, create financial investment failures, etc. with US dollars borrowed back from China is nice, but these jobs will not be useful or contribute anything to correcting the basic USA economic problem which is the foreign trade deficit.
11. US Economic Stimulation Plan: The current US government economic stimulation plan is to print up a bunch of new paper currencies, T-Bills, Bonds, and other similar paper US securities for payment to US contractors to re-build and expand the US infrastructure (Pork Barrel Projects) in order to reduce unemployment. This money will probably be spent on imported earth-moving machinery, imported materials (Steel, Cement, Equipment, Pipe & Wire), new imported private executive jet airplanes, illegal alien labor, outsourced engineering, outsourced CAD drafting, etc., and the US workers will still be mostly unemployed, and the foreign manufacturers will benefit greatly. Any Economic Stimulus Spending should also prohibit any imported products (even if we no longer manufacture those products) from being purchased with these funds, and also prohibit all outsourcing of the Labor Required. What happens after the project ends? Close the manufacturing facility? This is a short term solution that will only economically benefit foreign manufacturers of industrial and consumer goods, salesmen of the foreign manufactured equipment, materials, airplanes, etc., and the other people working in the distribution of the imported things for our infrastructure improvements, but the balance of trade will still require sending US dollars overseas to pay for these things that we import. The current US government plan will still require sending more and more US dollars and title to US assets overseas in exchange for purchase of the things that we import for our infrastructure rebuilding. After we have sold title to all of our US assets to foreigners as required to settle our foreign trade obligations, there will not be anything left for the foreigners to buy and then US government not be able to raise any funds for any re-industrialization of the USA, and the US citizens will not have any possibility of employment in their future. The money passed out to the financial industries does nothing to create any jobs or eliminate the problems with the US economy. Maybe it helps pay for the commissions of the US salesmen for the expensive new French manufactured private Jet Airplanes with the bailout funds. The French people making these multimillion dollar (Dasault Falcon 20-25) airplanes are probably very thankful for the US government's generosity.
12. Spencer's US Economic Stimulation Plan: Instead of just passing out free TARP money to the incompetent financial wizards at various inept and possibility criminal wall street organizations and hope that some of this free money will trickle down, maybe the US government should build manufacturing plants to make consumer products like refrigerators, washing machines, clothing, TV's, tires, auto parts, and eventually all of the consumer goods that we import with that money. We should then impose extremely high import taxes that are high enough so that these US made products are less expensive that the same imported product. Without extremely high tariffs, US workers must compete with foreign workers at foreign wage scales. These plants should periodically and/or constantly be for sale based upon periodic open public competitive bidding, but at a minimum sale price at least equal to as much as the government investment, and with terms of cash only.
12.1. There should not be any leveraged or other creative financing for purchase allowed by the government. Only cash sales should be allowed.
12.2. The management should know about making the products, not creative accounting and/or creative financing.
12.3. Yes, the consumer will pay several times the price for the particular US manufactiured product, but maybe this will avert a second American revolution.
13. It is not the foreign manufacturer's fault that this economic condition exists: US citizens created this condition. US citizens elected legislators that purposefully destroyed most of our industries that then fired all of their employees that were located in the US for various economic and environmental reasons. Our recent leaders decided that we could get people in other countries to work and make these things for our consumption if we paid them with freshly printed-paper T-bills, US Bonds, and other types of freshly printed-paper securities that they could redeem for title to any of our assets. Our Stupid Legislators of both political parties, Importing Companies, consumers that purchase imported products including myself because these products are cheaper than US made products, Ignorant Government Employees, Self Serving Corporate Managers, Wall Street Financial Genius Master Criminals, Enron/Arthur Anderson type management, NAFTA, EPA, WTO, OSHA, and the buying public just to name a few, have created this situation. The Government needs to reverse the existing negative trade balance by any means possible.
14. Riots and insurrections are predictable, ala the French Revolution, when the people find their situations economically hopeless. Mass unemployment will foster mass civil unrest, crime, anger, riots, revolution, etc. Future federal nationalization of foreign owned assets, ala Mexico, Venezuela, etc., is another topic for discussion on another day.
14.1. If any future US revolution to overthrow the US government is successful (maybe to protest the economic situation), where will all of the food, fuel, water, sanitation, medicine, and other necessities to support the population come from after the revolution? These necessities will not exist.
14.2. Chaos and total lawlessness will prevail. Only the very meanest and the most evil will survive in this climate. We will have then totally destroyed our civilization. Will all of the city residents starve after a revolution? The US population probably cannot live off of the land anymore. Will the city dwellers foray into the country, kill the farmers, and steal the farmer's food to feed their own families?
14.3. Everything of value in the USA will very soon be owned by China and other industrialized nations. The purchasing value of the dollar will approach zero as the US government speeds up the printing presses to cover US government expenses and our bonds and T-Bills are sold for next to nothing. Our military, police, firemen, and etc will get paid in freshly printed US dollars that will be accepted in grocery stores and other retail venue, but at many times the number of dollars expected for each item. Public servants will probably walk off of the job, and try to find another way to feed their own families.
14.4. The USA population will then become employees; possibly indentured servants; or maybe even beg to become slaves owned by the foreign countries and/or foreign individuals that will then own everything of value in the USA in the very near future. US citizens might have no options if they want to feed their families? Our children and our grandchildren might also have to change to the religion (probably not Christian) of the business owner if they want a job.
14.5. The foreign buyers of US Bonds, US T-Bills, etc, at the FED auctions normally exchange most of these freshly printed paper US Treasury Bonds, T-Bills, etc, for ownership and/or title to USA located real estate, farms, agri-businesses, food supplies, dairies, forests, industries, breweries, hotels, factories, casinos, financial institutions, retail businesses, and most other assets located in the USA that they do not already own. We have to redeem these paper money instruments for title to US property, since the US government no longer redeems these US dollars for gold.
14.6. What will be the buying power of the US dollar when there are no remaining US assets that the foreigners want to exchange for the freshly printed T-Bills, US bonds and US dollars that these foreigners earned by manufacturing the things that US citizens imported and consumed? Foreigners now own title to 25% of the USA.
14.7. The US government needs these foreign US dollars to pay US citizens for raking leaves, negative balance of trade, wars, military jets with active duty military USAF pilots for the personal use of specially privileged members of congress (Pelosi), employee payrolls, government retirement checks, courts, federal police, failed business bailouts, cash bonuses to the various Wall Street forgers of SEC documents that contributed to political campaigns, Las Vegas corporation junkets for failed corporation employees, foreclosed house mortgages for big spenders with bad credit, new multi-million dollar French manufactured personal corporate jets for political contributor's bankrupt corporations, pork barrel projects, research contracts, welfare, social security, Medicare, Medicaid, SSI, expensive corporate vacations, new infrastructure, wealth re-distribution, mental health, imported consumer goods and etc., and any other thing that congress and the president decides to use taxpayer money to acquire, build or just give to their political contributors, and other things that stimulate the economy, but this activity just makes the existing US dollars have less value and less buying power. These economic expenditures do not correct the economic structural foundation problem that is the US Trade Deficit.
14.8. We are selling our children's legacy to foreign owners, and the US government calls it "Investing in America". We are racing to print currency and then sell title to everything in the USA in order to keep from re-industrializing and/or working to produce most of the things that we consume. This is sort-of like selling our body parts to keep from working!
14.9. Fixing the economy RIGHT NOW might prevent a future revolution.
15. The Chinese Yuan paid by Chinese business owners to their US employees might be the only currency with any value (to buy food or anything else) after the US dollar's buying power goes to zero due tio the US government policies. The Chinese business owners will probably be the only source of currency with any buying power to pay the US military to install and/or enforce some Chinese version of law and order upon the US citizens. If the unemployed and hungry US military are available and their families are hungry, they will accept food from any source.
15.1. "Power comes out of the barrel of a gun?" Mao was only partially correct because a strong economy is also necessary to arm, feed, support, house, pay and otherwise maintain a strong military. The soldiers need to be happy, or they might overthrow whatever government might be in power at that particular time. China now has the strong economy and is rapidly building their military technology and military might to surpass the military capability of the USA in the very near future.
15.2. If the USA decides to pirate (steal or nationalize) all foreign owned property, ala Mexico in the 1960's, China will be able to enforce their property rights with appropriate punitive military action against US citizens on US soil.
15.3. We are approaching that point of no return, which I will define as the point where we have sold all of our assets therefore have no economic and intellectual resources available for re-industrialization.
15.4. In the 1960's the USA was worried about surviving a Russian nuclear attack. I took a U S Army course called "Environmental Engineering". The Army course was not about the earth's ambient environmental quality, but about administrating the environment within a nuclear fallout shelter during and after an atomic war. This included foraging outside of the shelter after the radiation levels reduced to levels that would allow short duration forays out of the shelter, and how to re-establish civilization after radiation levels decayed to allowable levels.
15.4.1. The instructor taught us that the course material believed that human beings would compete with each other (like animals) for the scarce amount of remaining canned goods and the other few remaining resources, and that these competitions for resources would result in death struggle animal behavior between the remaining human beings for available remaining resources. The course material stated that only the strong and most resolute (the most evil, ruthless and determined) would ultimately survive.
15.4.2. The Army Officer teaching the course stated that his personal belief was that human beings would rise to the occasion and take care of each other, in lieu of the deathly competitive behavior predicted by the Behavioral Psychiatrists who wrote the course material. I also look for the best in human behavior, but I have deliberated over this question ever since, and have not really made up my mind as to who might be the most correct.
15.4.3. I believe that human behavior after an economic collapse might be similar to human behavior after emerging from a nuclear fallout shelter.
15.4.4. This was an era when people in Pasadena, Texas said that their refinery pollution smelled like jobs and money to them. They were thankful to have a job to pay for their children's college educations.
16. Re-Industrialize Now? How can we ever possibility restart our industries (re-industrialize) to generate a positive balance of trade that will restore our economy? Most of the people who knew how to operate the US basic industries and factories were fired decades ago and are probably now long dead and buried. There are no books that completely tell everything about how to do most of the things that we knew how to do years ago when we created the industries that won WWII and then gave us this bountiful way of life.
16.1. The USA needs more technical and science oriented citizens that will create many new innovative products and services that we can sell or exchange for foreign owned currency and/or Gold. We need to import foreign owned US dollars, foreign owned foreign currency, and foreign owned gold in return for purchase of the US produced products that future US manufactruers might export, instead of exporting our dollars and gold in exchange for foreign manufactured (imported) products. When the time comes that people in foreign nations no longer accept our freshly printed paper dollars to pay for our imported products (and our government activities), we will be in deep trouble with no quick way out. We must act now while we can still buy foreign made materials and foreign made equipment for the re-industrialization of the USA with the remaining purchasing power of the dollar before we have redeemed all of the exported currency for title to all of the remaining existing US assets. The buying power of the dollar will become zero when there is nothing left for the foreigners to buy with the dollars that they earned by making our consumer goods. I do not have confidence that the USA citizens still have the knowledge and technical capability to re-create our factories for manufacturing, innovating and designing any new products for export as required to reverse our trade balance and restore the value of the dollar.
16.2. After the American revolution, the USA instituted high import tariffs to encourage the industrialization of the USA, and it was successful in establishing a positive balance of trade, accumulating Gold reserves, creating a manufacturing base, creating a technical data base, and making the USA independent from England for technology. One way or another we must stop the selling of title to everything of value in America as required to pay for government expenditures plus things that we import and then consume. We must create a positive balance of trade by any means possible. If not, we will destroy the purchasing power of the US dollar. Without import tariffs, most all products will be purchased for less money if they are manufactured in foreign countries where labor costs are minimized. The US labor force has no future without high import tariffs to prohibit foreign imported products. Without high import tariffs, US workers must compete with foreign workers at or below foreign wage scales for employment in the USA. Most USA citizens do not want to work for wages that the same job in a foreign country would pay. Until we re-industrialize and correct our foreign trade imbalance, and eliminate our federal government borrowing to pay expenses, we cannot afford to have free trade because it will destroy the US Economy.
16.2.1. There were probably shopkeepers that imported goods from England that probably objected to having to deal in more expensive US manufacturer goods. The WalMart, Home Depot, NTB, GM, Ford, GE, Chrysler, GE, Westinghouse and etc. would probably object violently
16.3. Until the USA can re-industrialize and correct our foreign trade imbalance, and eliminate our federal government borrowing to pay government expenses, maybe we cannot afford to have free trade because it will continue to totally destroy the US economy.
17. Many Services are Required to support Agriculture, Mining and Industrial Production: Civilized nations have always taxed the productive (agricultural and industrial) population to pay for providing National Security, Armed Forces, Crime Prevention, Education, Police, Fire Protection, and other similar items that are necessary to assist, support and protect the agricultural and the industrial production bases that supplied the things that the population consumed.
17.1. Our Industrial and Agricultural Bases could not exist with foreign invasion, crime, protection rackets, corruption, sabotage, etc., so a portion of the money earned by this producing base has always been taken by taxation by all civilizations to pay for federal, state, and local governments to prevent these occurrences that would interrupt the production of the things that the citizens need to consume.
17.2. Maybe we can no longer afford to spend our hard earned taxes and borrowed money on National Service, social entitlements, welfare, environmental clean-up, pork barrel projects, free education, free medicine, subsidized housing, humanities, art, writing poems, make-work schemes, entertainment, digging holes then re-filling the same hole, etc., and/or anything similar that does not help or support our balance fo trade until we re-establish our economic strength.
18. Recently created financial products such as CDOs, SIVs, ABSs, SPVs, VIEs, CPDOs, SiVs, derivatives, and other similar new products created by financial master business administration geniuses that create paper securities out of the thin air should require separate application and license by the SEC for their existence, and the SEC should grant license only to any of them that have intrinsic collateral value, are easily understood, transparent, forthright, and not deceptive in their sworn financial statements. Most of the recent financial innovations are similar to cancer, because they grow and destroy the economic foundations of the economy as if it were destroying your body. The SEC should also require a study to justify the need and safety of any new derivative type instrument created, similar to an Environmental Impact Statement. When the investment risks are several generations or several layers removed from the instrument that has the actual collateral value (like a mortgage), and this instrument is insured from most of the investment risk, how much due diligence will an investor perform before he will commit to purchase, as compared to the investing into a primary mortgage or similar instrument that is collateralized for the event of failure? If I were driving a car without insurance, I would probably drive more carefully than if I had insurance since my exposure for loss is lessened with insurance. Maybe we would be better off without any of these recently created new financial products.
19. Financial Institution Bailouts: The industries that employ people to produce actual products and commodities for consumption and plus an excess of these products for foreign export in exchange for foreign currency contribute to the basis of the National Wealth as reflected in the purchasing power of the US dollar should have government support. Wealth that should be created for future US generations, and not sold to foreigners so that we can not work. The US government policy is apparently to destroy the manufacturing of consumer goods in the USA through Free Trade. There is not much industry left.
19.1. These Wall Street financial genius failures are spending the TARP bailout money so that they can continue their reckless behavior without any penalty for any of their past or future financial mistakes and/or failures. The federal government TARP economic bailout money is currently being wasted to pay for the golden parachutes, private parties, expensive vacations, new jet airplanes and bonuses to these same highly paid incompetent (maybe criminal) executives that caused these problems. These incompetent, arrogant, stupid, and selfish executives took so much personal money from the financial markets that they caused the systems to fail. The lowly paid US citizens is paying his hard earned taxes to them to continue their bad, inept, stupid, and maybe criminal business policies that caused this crisis? Should taxpayer money pay off the bank loans that occurred when these financial geniuses borrowed money to pay stock dividends, in order to artificially drive up the stock prices, which personally enriched themselves through their stock option plans? How can we get rid of these financial geniuses that caused these problems without costing the taxpayer any more of his/her hard-earned tax money? They are still on the job when they should be unemployed and living under a bridge.
19.2. The financially astute and highly successful Arthur Anderson/Enron groups here in Houston, with Jeff Skilling, Ken Lay, and Fastow as their leaders filed false financial statements with the SEC that they swore to represent the truth. They perjured themselves when testifying about financial facts, and generally lied about almost every document that they created. They have suffered very little penalty when they finally did get caught and subsequently convicted. They all need to rot in prison until they die as a deterrent to other future prospective Financial Geniuses. Their prison sentences should be somehow proportionate to the amount of money stolen and the number of lives wrecked. I am sure that these Enron and Arthur Anderson type Master Criminals are studied and emulated by the current crop of Wall Street Financial Geniuses who have studied their successes, and also studied how they got caught. I believe that they will learn how to avoid themselves from getting caught while creating their own new financial empires. The financial practices of Bernard Madoff, Allen Stanford, and the other subsequent financial wizzards are also examples for the current and future Wall Street Financial Geniuses to study in order to avoid betting caught, and then emulate in their own careers.
19.3. The AIG management should mostly all be fired, especially their CEO and leaders. This bailout is rewarding these incompetent managers with continued employment and even large cash bonuses to the managers that caused the failures. Why should these managers work hard to investigate anything to do with their financial decisions and/or investments if the US taxpayer will pay for their mistakes? Did their friends get commissions for selling these bad investments to AIG? Were there any kickbacks to AIG employees who approved these transactions? Why are the AIG personnel that made these bad decisions still employed at AIG? Why is it necessary for AIG not to become bankrupt? Why does the taxpayer have to pay for these bad judgments and stupid actions? If they went bankrupt and all of these managers were out of work, it would be an incentive for managers of other companies and other future managers (and individual investors) to become more cautious of what they buy in the way of mortgages, securities, bonds and other investments.
19.4. TARP and other bailouts using taxpayer money should not have ever been paid to anybody, as AIG apparently did with some of their TARP money. The amount of TARP money should not have depended upon how many dollars in political contributions AIG and others gave to either and/or to both political parties. Some of these political contributions were even "donated" to various politicians after these same companies received TARP money.
19.5. None of the other Wall Street financial firms should have ever gotten any of the free taxpayer bailout money. The US government rewarded their irresponsible, stupid, inept, careless, and maybe criminal actions with free taxpayer money. A financial failure and loss of investment would be an incentive for these and other future investors to become more cautious of what they buy in the way of mortgages and other investments. A financial failure would cause the investors to become more skeptical concerning anything that the financial experts have to say (usually lies). We need for this financial penalty to happen. A financial failure would cause investors to be wary of and question anything that any stockbroker or any other financial genius has to say. They are spending the TARP bailout money on bonuses for themselves and new larger (foreign manufactured) private jet airplanes so that they can continue their reckless behavior without any penalty for failure.
19.6. The Stock Markets are just gambling Venues for the public to make gambling wagers (investments) in ownership of publicly traded companies, securities, loans, and other investment vehicles. Investors just lost some of value of their investments, and there is nothing wrong with this loss since the value was speculation over and above the Balance sheet value of the companies. The investors should not have believed anything that their brokers told them about those or any other investments. If you review almost any of the SEC filings (on the EDGAR database) you will find almost all of the sworn information filed with the SEC is extremely false, most especially when you get away from the "Blue Chip" stocks.
19.7. It irritates me when someone refers to Banking, Stock Trading, Insurance and other financial businesses as industries, since they do not create anything, except worthless financial "products". The Wall Street Stock Exchanges and Banks are essentially corrupt and should be allowed to close in Bankruptcy. Wall street is too corrupt and inept to be salvaged. Stocks should be delivered to the registered owners.
19.8. US Corporations should abandon Wall Street, trade their company stocks themselves, and allow new stock brokerage firms to be created and evolve with tighter regulation and more penalties to prevent future criminal activities.
19.8.1. The various public traded corporations could buy, sell and/or trade their own stocks until new trading exchanges evolve, preferably in cities other than New York City with less of the prevalent criminal culture of New York City.
19.8.2. Houston, Atlanta, Dallas, or some other different location might be a clean new location for a clean new start. New stock trading exchanges could evolve in some other city with new and different rules and regulations that would prohibit the criminal excesses of the Wall Street Master Criminals.
19.8.3. We also need to new federal legislation to make one single individual (President, CEO, Chairman, etc.) in each corporation criminally responsible for any false or misleading company financial statements that are filed with the SEC whether intentional or not intentional. This person needs to go to jail if there are any intentional or un-intentional false statements sworn to as a part of any SEC filing. Many more crooked CEOs need to be in prison for long periods of time. Stating that the CEO did not know should not be a "get out of jail free" card.
19.8.4. We also need to new legislation to re-create the Glass-Steagall Act (GSA). The Glass-Steagall Act (GSA) was enacted during the Great Depression in 1933. It protected bank depositors from the additional risks associated with security transactions. This act was repealed in 1999 by congress and approved into law by President Clinton. (If George Bush was president, he probably would have also repealed the GSA if his political campaign contributors had also requested that he repeal GSA). Consequently, the distinction between commercial banks and brokerage firms is not distinct, and many banks own brokerage firms and provide investment services to their customers. The Gramm-Leach-Bliley Act repeal eliminated the restrictions against affiliations between commercial and investment banks. This country does not need more Enron Type Master Criminals and Arthur Anderson type criminal accounting firms that will submit more perjured SEC filings to create more economic miracles. Furthermore, the Gramm-Leach-Bliley Act allows banking institutions to provide a broader range of services, including underwriting and other dealing activities.
19.9. Accounting Standards: Incidentally, why does the US Accounting standards allow "Goodwill & other Intangibles" to be placed onto a financial balance sheet. These are almost as bad as listing Enron (un-audited LLP's) as assets on their balance sheet that was certified by a CPA that is supposedly stating the financial value of that particular company. Of course it was later discovered to be fiction. Maybe a company whose customers tattoo company logos onto their bodies (ala Harley-Davidson) could claim some Goodwill, but I cannot think of any other situation where brand name or goodwill has any monetary value at all. (well maybe Coca Cola, Tide, and a couple of others).
20. General Motors Bailout: I believe that GM should have gone bankrupt last fall before their previous gifts of free money from the public money taxpayer. I guess that GM will not give back any of the money that the US Government took from me previously and gave to GM. Is there anything of value going to be left after the auto industry executives and the auto union members have bled their companies to death (bankruptcy)? The banks probably have mortgage lien on the title to most of the remaining factories and other assets anyway. If they are allowed to continue to go to the public feed trough again and again, they will never stand on their own two feet.
20.1. Should we continue Auto Industry bad behavior and outright theft of company money with taxpayer funds? Who is going to buy a vehicle from a bankrupt auto manufacturer when the bankruptcy court will allow the manufacturer out of their warranty contracts with the vehicle purchaser? It is too late for Chapter 11 reorganization. The additional $50billion of Taxpayer funds proposed to be given to the US Auto Industry will only encourage the continuation of the arrogant, stupid, and selfish bad business policies of both the US Auto Industry executives and the UAW members. Why are these same highly paid incompetent executives and the overpaid union workers continue their featherbed deals, job banks, perks, private jet airplanes, stupid business decisions, and etc. with taxpayer money.
20.2. These are the same selfish people that are responsible and should be fired, unless they know something about making cars instead of finance. Let other parties buy their assembly plants and re-start these plants. Maybe we have to let the GM Executives disappear with the large amounts of money that they took from the US Auto Industry, but do not let them have another $50billion of Taxpayer Funding to continue their bad business practices and personal thievery. GM is probably already in debt up to their ears. Let GM disappear, especially as a lesson to all of the other financial geniuses that caused these problems. If these financial geniuses that caused these problems disappear then the UAW feather beds that they created will also disappear with them.
20.3. Are these Taxpayer Billions for the Auto Industry going to fund the golden parachutes and bonuses of the auto industry executives that caused the crisis? Should taxpayer money pay off the bank loans that occurred when these financial geniuses borrowed money to pay stock dividends, in order to artificially drive up the stock prices, which personally enriched themselves through their stock option plans? How can we get rid of these financial geniuses and the UAW feather beds that caused these problems without costing the taxpayer some of his/her hard earned tax money?
20.4. They do not need any more Financial Genius Master Type Criminals to manage their affairs. Are there any more Lee Iacocca type people in that industry that could revive these sick Auto Manufacturing companies from their impending deaths? Is Lee Iacocca still alive? Can Lee Iacocca be drafted into the military and be assigned to head GM by the Government? Lee Iacocca was a mechanical engineer that knew how to design, market, and manufacture automobiles. He supposedly fought the Ford financial management tooth and nail to let him build the financially successful Ford Mustang. Later in his career he was credited with saving Chrysler from their financial geniuses. I believe that GM is managed financial geniuses that know how to drain company assets into their own pockets, and know very little about making automobiles.
20.5. I guess that the US Government will not get the previous taxpayer billions of money out of the GM assets before all other creditors. The US taxpayer should have had priority over union retirement contracts, union benefits, union medical plans, bank mortgages, bond holders, preferred stock, medical benefits, etc. and other claims. But maybe it is like the financial institutions and banks that got TARP money depending upon their political contributions to the congressmen controlling the distribution of who gets the free taxpayer earned money.
21. Home Mortgages: Many people got loans for houses they could not afford, and these people should lose their houses in foreclosure. The Federal Government might have pressured the Mortgage Markets to give mortgages to people with bad credit histories. Financial Managers combined multiple numbers of these low quality loans into packages (of low quality loans) and sold them to investors at (almost) face value. These Financial Managers got multi-million dollar (non-refundable) bonuses for their efforts. As more and more of these sub-prime non-credit worthy mortgagees defaulted, the value of these packages of multiple mortgages diminished drastically. The US Taxpayer is now being asked to pay for these financial mistakes.
21.1. The California real estate values should plummet to a fraction of their present sales prices. The $500,000.00 South LA crack house with a $495,000.00 mortgage, roof leaks, no air conditioning, and no plumbing owned by an unemployed person (i.e. crack cocaine supplier) might now sale for $15,000.00 and that might be closer to the actual retail market sale value. No more "Flipping Houses". No more real estate financial geniuses. No more get-rich-quick real estate seminars.
22. Our Future: We have met the enemy and it is ourselves. There is nothing more saddening or devastating than mass unemployment such as existed in countries such as Mexico or Asia in the last century. I have visited Asia many times on Business in the part of that century. Crime, family abandonment, divorce, selling your 12 year old (and younger) daughters for the equivalent of about $45 in the 1980's for 10 years of indentured servitude to brothels, selling your 12 year old sons to rug weavers, and other bad things increase during these periods of economic difficulty. Our basic industries such as steel, computer chip manufacturing, petrochemical refining, appliance manufacturing, tire manufacturing, automobile parts manufacturing, aircraft manufacturing, textiles, and etc. have been decimated and/or totally eliminated from this country by government laws and treaties. The North American Free Trade Agreement has almost eliminated the remainder of the basic industrial manufacturing jobs from the USA.
22.1. The USA must re-industrialize. Even if we started to re-industrialize today, it would take many decades to re-create the scientific, engineering, manufacturing and industrial production bases that we destroyed in the past few decades. New environmental cleanup jobs created by the EPA are nice, but they are about as economically useful to our negative trade balance of payments and our industrial base as paying people for raking leaves, digging holes and re-filling the same holes, flipping hamburgers, selling insurance, etc. since they do not produce anything economically useful that we can consume or export.
22.2. The arts are less important than food & shelter. The arts are less important than security (Army & Police). The arts are less important that the balance of trade that affects our value of our dollars. The arts are less important than manufacturing products for export that will improve our balance of trade position. The arts must take a back seat to necessities. We must set our spending priorities upon the basis of what is necessary, not what is nice to have.
23. Selecting our political leaders: I remember a guy named Ross Perot that looked like Alfred E Newman from Mad Magazine and talked through his nose. He ran as a third party candidate against President Bush 41 and president Bill Clinton, I think that it was 1992 and he got almost as many votes as either of the major party candidates. He had the right message but he was the wrong messenger. He was also not attractive, and I sadly believe that a lot of the American people vote based upon looks more than intelligence or policy. He had a lot of graphs and charts to indicate his points. I remember him saying that "NAFTA will suck the remaining jobs out of the USA". He might have been the last chance to preserve the US economy.
23.1. I remember presidential candidate McCain stating something to the effect that he was not interested in economics during the first part of the 2008 presidential campaign shortly after he was nominated, so I voted for President Obama, I respected McCain, but there was no other choice for the country.
23.2. Both political parties are responsible for the enormous foreign trade deficit, the even larger federal spending deficit, and for the Wall Street creation of our economic business mess. Neither of the major political parties seems to understand the problem, and the solutions are so simple.
23.3. Years ago engineers, medical doctors, farmers, and people other than lawyers also became politicians. Jimmy Carter was probably the last engineer president. Ron Paul is a MD.
24. Trade Balance: It does not matter how we reverse the balance of trade as long as we stop the flow of gold, dollars, T-bills, Government Bonds, title to US located properties, and other US assets from the USA to other countries, in payment for the things that they make for us to consume, and stop borrowing additional quantities of their US dollars to pay for our government operational expenses.
24.1. After industrial nations and foreigners own everything of value in the USA, the USA will become a third world nation of unemployed beggars.
25. China will conquer the USA without firing a shot. We will soon have given foreigners title to all of our property and businesses in return for making things for us to consume. US citizens will keep busy cleaning up our environment, suing each other, and inventing new (worthless) financial products until the very end, and then the US citizens will ask each other, "What happened?" when there is no food or gasoline available.
25.1. When the Chinese misslies would not fly on track, the USA government (early 1990's) allowed them to purchase the (Hughes Aircraft) software and then their misslies became operational instead of being destructed in flight when they veered off course. The Chinese will soon be able to enforce their will onto the US government with their ICBM capabilities.
25.2. Everything of value in the USA will very soon be owned by China and other industrialized nations. The purchasing value of the dollar will go to zero as the US government speeds up the printing presses to cover US government expenses. Our military, police, firemen, and etc will get paid in freshly printed US dollars that will not be accepted in grocery stores or any other retail venue. These public servants will probably walk off of the job, and somehow try to feed their own families. Chaos and total lawlessness will prevail. Only the meanest and the most evil will survive in this climate. We will have then totally destroyed our country.
25.3. The Chinese Yuan paid by Chinese business owners to their US employees might be the only currency with any purchasing value (to buy food or anything else) when the dollar's buying power goes to nothing.
25.4. "Power comes out of the barrel of a gun?" I think that Mao was only partially correct because a strong economy is also necessary to support and maintain a strong military. The soldiers need to be fed and paid, or they might overthrow whatever government might be in power. China now has the strong economy and is rapidly building their military technology and military might to surpass military capability of the USA in the very near future. If the USA decides to pirate (steal or nationalize) all foreign owned property, ala Mexico in the 1960's, China will be able to enforce their property rights with appropriate punitive military action onto US citizens on US soil.
25.5. We are approaching that point of no return, which I define as the point where we have lost the capability to re-industrialize.
25.6. If any future US revolution to overthrow the US government is successful and occurs for some valid reason (maybe to protest the economic situation), where will all of the food, fuel, water, sanitation, medicine, and other necessities to support the population come from after the revolution? After a revolution will we all starve if we are in a city? The US population cannot live off of the land anymore. Will the city dwellers foray into the country, kill the farmers, and steal the farmer's food to feed the city dweller's family? Will China hire the unemployed military (and maybe police) to keep the US population under control, or to regain control, or to re-establish law & order?
25.7. Fixing the economy RIGHT NOW might prevent a future revolution.
26. New World Intellectual Order: How does any silly intellectual New World Intellectual Order think that they can rule without economic and military might? If there is a great social upheaval, ala French Revolution, there will be anarchy, and only the evil, the strong, the unscrupulous, and the unmerciful will survive. If these NWO, Illuminati, Bilderbergs, etc., are not personally armed, or protected by heavily armed mercenaries, they will probably become some of the first casualties of such a revolution. Europe is becoming more impotent than the USA, and both will very soon be of no consequence in world affairs. Why would China care anything about the NWO, Illuminiati, Bilderbergs, and/or any of the other silly intellectual conspirators if these conspirators are not backed by an armed force? Would the Chinese even return their telephone calls? I think that most intellectuals believe that they can reason with an angry rebel and/or bandit who wants the intellectual's food, weapons, house, wife, daughter, or etc. These intellectuals will be killed at the very first contact with an anarchist.
27. Many of my (college educated) friends tell me that this modern economy needs the consumers who do not produce anything but sit idle and consume the things that the workers produce. They believe that a slave needs an owner to sit idle and consume the things that the slave works hard and produces for the slave owner's consumption. I believe that a slave does not need an owner.
27.1. I thought that US citizens were special and that other people in other countries would happily work to make the things that we consume while we sit idle and consume the things that they made for us!
27.2. We have killed and eaten our cow, and we are now complaining that we no longer have any milk available for our children. We now have to borrow money to pay our neighbors for his milk from his cow, and our family is running out of things to pawn and/or sell for money so we can continue to eat. I really do not want to work in some dirty factory and make something to sell in return for money to buy milk for my family.
27.3. Why can't we just print more paper US T-Bills, bonds and other paper securities and sell them to people in other countries to get the US dollars back that we paid these foreigners for working to manufacture the things that US citizens consume? We can remain idle and refrain from working while our children can then work hard when they grow up and pay off these bonds, T-bills and other paper debt instruments at some later date when payment becomes due to various foreigners. Our children should be happy to work hard when they grow up and then pay for our privilege of consuming and not working.
28. If we want to rebuild our industries, we will need the funding to do it. Do you really think that China and Japan (our leading creditors) or any one else will really give us any additional loans to re-build our manufacturing capability and compete with them? Will Asian entities become loan sharks after we sell all of our assets to the foreigners in return for our trade imports of the products that we consumed? I just hope it is not too late already.
29. Religion, superstition and other supernatural beliefs have very little to do with whether or not the USA survives. Remember that Rome was strong and mighty until Constantine made Christianity the preferred (tax supported) religion of Rome. I am a christian and I believe that God has blessed the USA. I believe that the US citizens elected rulers to sell our assets to foreigners in order to keep US citizens from working in some dirty factory, for us to be lazy, and to let our children to fend for themselves later when they must repay our debts.
29.1. We no longer believe that we are our brother's keeper. We have become a mobile society that has no permanent neighborhood roots or sense of community relation to one another.
30. Is the good life in America gone forever? Both parties act in the interests companies such as WalMart, Home Depot, NTB and etc. who represent importing, transportation, distributing and retail sales of imported foreign manufactured products. These US importing companies pay companies and individuals in foreign countries with US dollars to manufacture the things that these US businesses import, distribute, and then sell to the US consumers. Manufacturers such as GM, Ford, GE, Chrysler, GE, Westinghouse and etc. manufacture vehicles, appliances, and equipment made with imported parts that they paid the companies in the foreign countries with US currency to manufacture these parts for assembly of the finished product in the USA that is then sold to US consumers. A very high dollar value (percentage) of USA assembled products are made with imported foreign manufactured parts and/or sub-assemblies. The consumer is also guilty of destroying US manufacturing.
30.1. We need a bigger economic pie, not a bigger piece of the remaining economic pie that is shrinking daily. The US government is selling title to everything of value in our country to foreign manufacturers and their governments, and the US government is calling this "Investing in America".
30.2. Taxes on overseas earnings might be just the incentive needed for more US corporations to relocate their headquarters overseas. (It is not really that simple)
31. The USA needs to withdraw from all international trade treaties and place a high (maybe 500%) import duty tariff on all imported products in order to re-create the manufacturing industries and the jobs that these trade treaties and our government destroyed over the last few decades. Yes, everything will cost the consumer seven times as much, but this might prevent another revolution.
31.1. The US government has allowed, and maybe encouraged, US Importing Companies, US Corporations, Wall Street Financial Geniuses, Master Business Manipulators, Enron-Arthur Anderson type Master Business Administrators, and others to out-source most US jobs to foreign countries where labor costs are a small tiny fraction of US citizen wage and benefit expectations.
31.2. Both of the major political parties are responsible for this unemployment rate. Maybe it is time for a third party if the two parties believe that unemployment and re-industrialization are not important to the USA.
31.3. Our political Leaders must lobby loudly and become persistent in their quest for implementing at least an extremely high import tariff on all imported goods, and repeal of the NAFTA, WTO, and IMF treaties. We might also consider and threaten complete withdrawal from the United Nations.
32. I have never participated in journalism, except for an occasional letter to the editor. I am concerned that the political leaders of both (maybe all) political parties are leading this country to become a third world economy, if action is not taken rapidly. Journalists must learn about economic principals and then become the saviors of this nation by publicizing, educating and/or preaching sound economic principals to the general public. Who else has the capability to disseminate this information to the general public? Our political leaders are talking as if they never studied or read anything about economics. It is not that complicated. It is only interlocked with understandable causes and affects of various economic actions.
I believe that the US government should borrow back some of the US dollars from the same foreigners that US citizens paid with their US Dollars to make the things that US citizens consumed, and then throw these same US dollars at these same incompetent wall street financial master geniuses that created this financial disaster. That should stimulate the economy! Are you telling me that this is what President Obama has been doing for the last few months? Why is it not working?
I am a 70 year old engineer still working because I think that engineering is fun. I have always been interested in economics since Texas A&M required this course for engineers, along with business law and accounting in the 1950's. The Economics lecturer taught preposterous lessons to the effect that no one had to work as long as long as we just manipulated the economy. The business law and accounting courses also benefited me greatly in by career. I also cashed in my investments in the spring of 2008 and avoided the loss of assets that most folks endured when they listened to their professional financial advisors.
To restore the USA to economic health and prosperity, huge changes are needed in the very political economic structural system that created these problems.
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