A Crisis of Misunderstanding Economics

First and foremost,

both sides need to drop the rhetoric and political ideology. The Republicans want less regulation. The Democrats want program spending. Dropping earmarks is essential to address the core of the dilemma. President Obama is pushing down the earmarks and promoting responsibility. The legislative branch needs to work with the President to achieve this quickly.

Conservatives and liberals need to consider reason and become earnestly conservative… to actually conserve resources including dollars and commodities to achieve needed productivity with purpose, for the long-term health of the economy.

We must stop over-exploiting beyond reasonable sensibility, resources and capacity. We must stop giving away money without expectation of reasonable return and productivity that is meaningful in the long-term. We must not wallow or wade in the mire of short-term economic thinking.

We know the challenge is large.

In all centrist considerations we wish policy makers to keep these core ideas in mind:

1. We do not exist in an objective market, we exist in a regulated market. For anyone to claim that we need less regulation in a regulated market is patently insane. Such ideological views are not rational, they are the foundation of the economic turmoil we are now in.
2. Any form of earmark or bill stacking should be culled out of the bills. It is critical to precision target the essential problems of economic stability, ignore political agenda and keep the national and state interests of ‘the people’ at the center of attention.
3. All bailout funds must be connected with performance and productivity. No money should be given away without performance guarantees, limits, requirements and checks and balances.

As we stated last fall in a press release, without checks and balances, any effort will ultimately dig the hole deeper. We gave 800 billion dollars to bankers and instead of loaning out the money they hoarded it; some of them even went on vacation with it or redecorated their offices.

Let us not be lulled into complacency, or the false hope that throwing money at the system is a cure all. Everything must be tied to productive, responsible behavior. As has now been proven, the first bailout bill did nothing but pad the accounts of the banks.

To those that ‘believe’ we should reduce regulation…

on the bailout, please consider the fact that we are not in an objective market. If you make decisions based on that false assumption, your decisions will be wrong.

To those that believe money alone is the answer…

and that it is only about jobs, please consider that jobs that are not directly tied to long-term benefit of the needs of the nation, and the people, will weaken the system.

You can’t put band-aids on a cancer and expect it to get better. Covering up the problem only makes it worse. For the sake of all careers, even your own, look down the road and explain these facts to your constituencies. It is the bitter pill of reality we must now take.

The Centrist perspective is simple. Lack of responsibility, objectivity and [well-reasoned] regulation got us into a huge mess. This combined with consumerism, promoted to increase corporate profit at the expense of the people, created a disproportionate bubble based on artificial value rather than real market value based on consumer needs. This can also be seen as corporate profit at the expense of the health of our nation.

We have degenerated into a situation where we are promoting socialism for corporations to save our economy. Simply put if we feed the system that got us here in the first place, we can expect the system to fail in an even larger way in the future. It makes no sense to maintain the status quo of corporation ‘held higher’ than the long proven sustainability of small business as the market driver and engine of our economy.

Where should the money go?

The money should go directly into productive mechanisms that provide income more for the people and less for the corporations. We need to tighten our belts and get to work. if we fail to do so, expect further economic declines in the future due to unproductive capital usage out of balance with the global economy of resource capacity and resource usage.

The ‘Keynesian Model’ is inherently flawed

Simply put, you can’t have growth forever in a limited system. An unregulated, unconstrained fiat dollar system is the formula for bubbles. Exponential compounding interest has the potential to topple the entire economic system. To promote less regulation in this reality is to say, I liked this bubble, let’s make an even bigger one and watch that burst in a few years too. The only difference being that the (near) future bubble will be even bigger, based on the factual reality of compounding interest.

Regulation is required to tame the excesses that have infected corporate governance, the lack of which fostered corporate malfeasance. We must temper the market with value, utility, economy and reason considerate of short and long term needs.

We need to return to an objective market basis as able.

In the mean time, regulation is required to tame the excesses that have become profoundly prominent in the executive levels of corporate governance, which in turn have been the impetus for corporate malfeasance, which is contrary to the fiduciary trust placed in public corporations in the first place.

We remind all that public corporations are not people. They are entities given a trust by the states, a fiduciary agreement by the people and supposedly even the government. That trust has been abused. We have little time to squabble.

To policy makers,

do and promote these things in statements, deliberations, and actions on these important matters:

1. Increase regulation to ensure that transparency becomes your top priority. Since we are in a regulated non-objective market basis, largely due to over reliance on the Keynesian model with less than responsible attention to the regulation needs required to maintain a fair and healthy market.
2. Push no earmarks, seek balance in all policy between states and keep the national needs of the people rather than local needs at the center. Otherwise there is increased risk of delay and monies that may go to unnecessary infrastructure.
3. Set aside personal agenda as best as you are able. Sacrifice is needed to save the economy. In this case, the needs of the many must be held high in order for the needs of the one to even have a chance at a better future.

Let us hope that Congress and the Senate will work with President Obama in a well-reasoned approach to solve this crisis fostered by years of ignorance and greed.

To the American people:

Left, Right and Center, Write your representatives and senators, call their offices, demand reason and sensibility. Delay only raises the tax on every citizen. We encourage you to become active. Let us not leave this to the politicians. It is our country.

http://www.house.gov

http://www.senate.gov

This is a crisis with potentially devastating ramifications if decisive, responsible action is not taken quickly. We need to rally behind reason and our President and do difficult things. In doing so, we will put our country on a road to deal with other pressing challenges that are in dire need of attention as well. Let us begin.

With best regards,
John P. Reisman