Posted by: Clayton Makepeace
January 19, 2009
Issue #592

Dear Mr. President-Elect …

(An open letter to Barack Obama)

Dear Mr. President-Elect,

For anyone who cares about racial equality, these are clearly the best of times; a time to celebrate how far we’ve come as a nation.

Today, we honor a man who, in my book, was one of the two greatest Americans of the 20th Century: Dr. Martin Luther King.

And tomorrow, we will celebrate your inauguration as the first African-American president in U.S. history … the most powerful man in America … and by extension, the most powerful man in the entire world.

When you, Michelle, Malia and Sasha move into the White House this week, you will be living a home that was built by slaves and in which slaves served for 60 years after its completion.

I must admit: The socially liberal half of my libertarian heart is already throwing confetti.

To me, this historic event is a testament to the miracle of America and to the goodness of our generation. It speaks volumes about our obsession with searching our national soul … with doing what we can to right history’s wrongs … and with becoming increasingly just.

Being older than dirt, I grew up in a segregated America. I actually remember my dad insisting I use “Whites-Only” drinking fountains and restrooms when I was a kid in Minneapolis in the ‘50s and also a teen in Tulsa in the ‘60s.

Later, as I began thinking for myself, I remember being blown away by the patriotism of generations of black Americans who were denied so many blessings of liberty here at home — and yet had never hesitated to give their lives for their country in every war beginning with The American Revolution.

I can’t help but believe that those good men and women will be celebrating in the heavenly grandstands tomorrow.

And I’d also be willing to bet that many of our founding fathers – many of whom considered human bondage a great evil but failed to muster the political courage and resources to oppose slavery and the British simultaneously — will join the celebration.

Is Mr. Lincoln, The Great Emancipator, flush with pride? Are FDR and Eleanor applauding? Are Jack, Bobby and LBJ choking back tears? Is Dr. King spiking the ball in the end zone and giving high-fives all-round?

I’ll bet you a year’s pay they are!

I also wonder how the handful of black radicals, hate-mongers and racists who get attention, build constituencies and make a living demonizing “Whitey” – are feeling right now.

How are they rationalizing the fact that the majority of “white devils” happily, even enthusiastically contributed to and voted for a black candidate?

How can they possibly continue to blame the black community’s ills on White America when your election proves conclusively that in America, any child – including any black child — can succeed wildly; even become president?

I can only imagine their bewilderment as they contemplate the official launch of post-racial America – and as they confront the horrifying prospect of maybe having to get a real job.

And of course, I’m taking an equal amount of satisfaction knowing that white supremacist pinheads everywhere are agonizing over this turn of events.

So congrats, prez-elect Obama, for shaking things up! I’ll be thankful that I lived to see a black man in the White House for the rest of my life.

The fiscally conservative half
of my libertarian heart
is surprisingly pleased, too …

I can’t imagine being more pleased with some of the people you’re bringing with you to Washington.

You’ve appointed Paul Volcker — Ronald Reagan’s legendary Fed Chief; the man credited with slaying the fearsome inflation dragon of the 70s and early 80s — to head your White House Office of Economic Recovery.

And, you appointed Tim Geithner — George Bush’s chief of the New York Fed and former associate of Richard Nixon’s Secretary of State, Henry Kissinger — as your new Treasury Secretary.

And then, just for good measure …

You appointed Robert Gates — George Bush’s hawkish Secretary of Defense – to stay on the job as your Secretary of Defense …
You appointed Arizona Governor Janet Napolitano – one of the most fiercely conservative opponents of illegal immigration in the nation – as your chief of Homeland Security …
You appointed Hillary – the woman you pilloried for her votes supporting the invasion of Iraq – as chief architect of your foreign policy in her new role as Secretary of State, and …
You appointed Leon Panetta as CIA chief – a glaringly obvious, “political payback” pick due to the man’s abject lack of intelligence experience. But by doing so, you gave Senator Diane Feinstein an ulcer and that makes you a great guy in my book!

Not only that; you’re now promising to do things that the hapless Bush II never did.

Like eliminating earmarks, attacking government waste and cutting spending on all the useless pork barrel crap that Congress is famous for.

My question is, WHY do you suddenly sound so much more like Ronald Reagan Republican than Bush or McCain ever did?

Why didn’t you install left-wing doves at the Pentagon and at State? Why didn’t you appoint left-leaning, collectivist functionaries at Treasury and the Fed?

And why, instead of bringing “change” to Washington have you appointed so many Reagan, Clinton and Bush retreads to your new administration?

Can I take a guess?

I think it’s because you’re smart. You’ve read your history books. You’ve surrounded yourself with some of the best economic minds on the planet.

You know that, while left-wing populist rhetoric will surely get you votes, actually implementing many of those policies would be so disastrous as to render you a one-term president.

I can’t believe it. I’ve been had! I actually bought your campaign rhetoric. Silly me — at my age, after witnessing some 48 years of presidential campaigns, I should have known better.

Heck: If I’d had any idea that you’d turn out to be this conservative on fiscal and defense matters, I might even have voted for you. In fact, if you keep this up, I actually may, next time around!

I can only imagine how left-wing supporters who also bought your campaign rap feel right now. Instead of the leftist ideologue they expected, they got, (thank GOD!) a pragmatist: A leader who’s clearly more interested in actual results than in left-wing political orthodoxy.

I can’t help smiling to myself; reveling in their disillusionment and rage. No wonder conservatives and neo-cons everywhere are starting to really, REALLY like you!

Now, if I may be so bold, may I please offer you a word of personal advice?

Have a great time on Inauguration Day.

Party your heart out. Soak up all the adulation.

Then first thing Wednesday morning,
pack your bags and RUN LIKE HELL!

Don’t get me wrong; I think you’ll probably turn out to be a fine president. And I sure wouldn’t want to see that partisan hack Joe Biden in the White House!

But on a personal level, this is likely to be the best it’s ever going to be for you. You’ve made your point. You’ve won and savored your victory. Your place in the history books is secure.

Sometimes, it just makes sense to go out on top; quit while you’re ahead.

Because it doesn’t get any better than this.

Bright and early Wednesday morning, all the problems Bush caused or failed to solve are yours; nobody else’s.

You and you alone will bear the sacred responsibility for our physical safety, our national sovereignty and our economy.

The cheap-shot tactics that served your party so well for the past four years — constantly sniping and bitching at the people who actually bear these solemn responsibilities — won’t cut it anymore.

Because come Wednesday, YOU are THEM. It’ll be time for your party to either put up or SHUT up!

These are now YOUR wars. Exiting Iraq in a way that honors the sacrifices made there and that locks in the democratic progress Iraqis now enjoy is your responsibility. Returning Bin Laden to room temperature and rendering Al Qaeda extinct is your responsibility.

It’s now you who must be 100% right, 100% of the time in combating terrorism. If, God forbid, a terrorist gets it right just once and even a single civilian is killed or maimed, it’s your responsibility.

If those who rail against us — North Korea, Iran, Venezuela and now, sadly, Russia — succeed in humbling us, it’s your responsibility.

And as millions more Americans lose their jobs in 2009 and beyond, each lost paycheck will be – you guessed it: YOUR responsibility.

Beginning at 12:01 AM Wednesday morning, rhetoric won’t matter anymore. Blaming “the other guy” won’t wash.

The actual results you produce will determine whether you’ll get a second chance in 2012 or whether you’ll be another … well, another one-term Jimmy.

You want the truth? I wouldn’t be in your shoes 48 hours from now for all the money or glory in the world.

Because the American people don’t just expect you to do a damn good job; they expect you to work foreign policy miracles … homeland security miracles … and especially, economic miracles.

… So what’s your plan,
Mr. President-Elect?

The American people expect you to do something to protect or restore their jobs and insulate them from bankruptcy.

But – no offense intended — from what I’ve seen so far, it looks like your economic plan is little more than the Bush plan in hipper clothes.

You’re going to throw trillions more dollars at the problem, just like Bush has. And maybe cut interest rates – just like Bush has.

Of course, since the Fed Funds rate is already about zero, what are you going to do? Cut them to less than zero like they did in Japan in the ‘90s?

But, that didn’t work, did it? Japan’s recession has lasted more than a decade despite sub-zero interest rates.

And despite the trillions Bush has thrown at this crisis, 2.6 million Americans have still lost their jobs since this time last year and the recession is still only growing worse.

I also hear you’re planning to take a few lessons from FDR — create new programs that put unemployed $70-an-hour auto workers to work digging ditches, paving roads and building bridges for $10 an hour.

But that didn’t really work either, did it?

Despite everything Roosevelt did, unemployment still hit 25% — more than three times higher than it is today. And despite the mountains of money he threw at his Great Depression, it still took ten, long years and a world war before the economy came back to life.

Do you really believe that repeating these failed policies will somehow produce better results?

I know – you think you have to do these things anyway. You can always count on the abysmal economic ignorance of the press and public to give you credit for trying.

And of course, the New York Times will only intensify its efforts to have you canonized no matter what you do.

The truth, though, is that not only will the tired old policies you’ve proposed so far fail to end this crisis …

Following the failed policies of FDR and Bush
will only make matters worse.

Let’s face it, Mr. President-Elect: The shrinking economy, plunging sales and profits and soaring unemployment are only the symptoms of the lethal economic disease now afflicting this country.

But the simple truth is, that by continuing these failed, old policies, everyone that you try to save …

From Fannie and Freddie …
To AIG, Bank of America and Citibank …
To GM, Ford and Chrysler …
And to every other company, taxpayer and voter who gets a handout …

… Will remain firmly attached to the public tit, sucking an endless amount of money out of the economy but never really getting the cure.

That means, following the failed FDR/Bush policy — giving weak companies and consumers money to make just a few more payments on debt that will eventually go bad anyway — only guarantees that this crisis will continue indefinitely.

And by prolonging the crisis, you’ll ensure that many companies that might otherwise have survived will fail – worn down over many years. And as a result, millions more jobs will be lost than would otherwise be necessary.

Worse: You’ll be replacing the business and consumer debt bubble that created this crisis …

With a FEDERAL debt bubble that can only trigger a far greater and far more devastating crisis in the years ahead.

But what if, instead of repeating the FDR policies that gave us ten, long years of depression … instead of emulating Bush — the man you so vehemently reviled during your campaign … what if you did the unthinkable?

What if you did something really new … something no other president has had the courage to do … something that would actually END this crisis in record time?

Why not treat the true CAUSE of this crisis
**– and NOT just the symptoms?**

Pretty much everyone agrees that the pathogen – the bug that caused this great economic infection is the “nimium debitum bacterium.” The “Too much debt germ.”

Too many mortgages, car loans, credit card balances and even business loans have been made to marginal and high-risk borrowers. And too much debt has been piled up even by people who could ordinarily handle it.

But now, as the economy slows, the symptoms caused by this vicious bacteria are killing us:

More and more of those debts are going bad, nicking banks and investors who own those loans for massive losses.
So those lenders and investors have stopped loaning and investing.
So companies can’t borrow to finance operations and consumers can’t borrow to buy stuff.
So corporate profits plunge and companies have to lay off workers to survive.
So consumers, faced with the specter of losing their paychecks, have to stop spending and instead begin socking away money for the rainy days ahead.
And so the vicious downward cycle repeats; intensifying over time.

As we’ve seen, Bush, Bernanke and Paulson have utterly failed to find the courage to administer the only antibiotic capable of killing the germ that caused this economic disease in the first place.

The miracle cure? A bitter but amazingly effective pill called “Tough Love.”

The success of clinical trials on this prescription are conclusive … a 100% cure ratio: Every case of nimium debitum disease in history has abruptly ended ONLY when the last shaky debtor defaulted on his loans.

Once all the bad debt has been flushed out of the system, the patient is quickly stabilized and begins to recover.

My suggestion: Use your formidable gift for persuasion to convince the American people that the only sensible, prudent, intelligent path is to …

Refuse to spend another penny in an attempt to save shaky borrowers …
Allow them to quickly break free of their debt through bankruptcy and only then …
If you like, offer these newly cleansed companies and consumers the tax breaks, loans, loan guarantees and grants they need to help them build the foundation for an explosive recovery.

Do that, and you’ll carve years off of this crisis.

You’ll restore faith in the system and end your recession in a fraction of the time it took FDR to end his.

You’ll almost surely wind up spending far less money than you would have by continuing Bush’s policies — and tax revenues generated by the accelerated recovery will almost surely help shrink these trillion-dollar federal deficits before they crush us.

And, you’ll convince me and millions of other business owners, consumers and investors to begin unlimbering our checkbooks in anticipation of the recovery.
So what’s it going to be, Mr. President-Elect?

Are you going to break ranks with Bush and do the courageous thing – the right thing to get us out of this mess?

Or was “Change We Can Believe In” just another cheap campaign slogan?

I’m counting on you to make what you know in your heart is the best decision for us.

And you can count on me to scream bloody murder when you don’t.

In the meantime, please be assured that you have our prayers for your safety, good health and wisdom in the difficult days ahead.

Sincerely,

Clayton Makepeace
Publisher & Editor,
THE TOTAL PACKAGE

P.S. FREE SWIPE FOR TTP READERS: Want to see a sales page that’s kicking butt for a financial product? Take a look: http://event.moneyandmarkets.com/reports/Event/CC.

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61 Comments »

Comment by Mike — January 19, 2009 @ 1:48 pm
Very good again.

Your best lines: “…continuing these failed, old policies, everyone that you try to save …

* From Fannie and Freddie …
* To AIG, Bank of America and Citibank …
* To GM, Ford and Chrysler …
* And to every other company, taxpayer and voter who gets a handout …

… Will remain firmly attached to the public tit, sucking an endless amount of money out of the economy but never really getting the cure.”

That’s the scary and too-true reality of most government fixes.

I’m passing your letter around.

Thanks.
Comment by Marc — January 19, 2009 @ 4:10 pm
Clayton,

I’ve been thinking about today’s post, and you know what? You might want to give this writing thing a shot; you just might have what it takes to do this for a living.

Seriously, well thought out piece and again, nuttin’ but da’ truth.

Best,

Marc
Comment by Leon Altman — January 19, 2009 @ 4:29 pm
Will you stop saying you’re older than dirt!!
You’re in your fifties. That’s practically
a young gun these days.
Comment by Alton Moore — January 19, 2009 @ 4:38 pm
Clayton,

If Mr. Obama follows your advice AND enacts the Fair Tax, this country will be back on its feet in a couple of years. With the Fair Tax in place, hundreds of American companies now operating offshore would return home, and foreign investment would flower as never before.

Alton
Comment by Jim Rosemary — January 19, 2009 @ 4:42 pm
Logical, common sense, grounded in reality — all characteristics that seem to escape the liberal elite. I’m amazed at those who attempt to shove the blame for this onto “Wall Street Fat Cats”. The real problem originated when government forced the banks to issue loans to people who would not otherwise qualify for them and would likely default. Business simply did what Business does — it tried to find a way to deal with the situation and make a profit at the same time. The whole sub-prime mortgage trading mess was caused by the government.

My favorite line of all time is one which applies here, and one which it appears you also believe: “Government isn’t the solution to our problems. Government IS the problem” — Ronald Reagan

Keep up the good fight and the excellent commentaries. We need more voices to represent rationality in an irrational world. Thank you!

- Jim
Comment by Rick — January 19, 2009 @ 4:42 pm
Right on the mark - as usual. Perhaps the government should reduce the number of bureaucrats and replace them with some salty, results-obsessed, marketing guys. You know, people who at the end of the day have to measure their success.

Perhaps the real solution is for business people to decide to step-up their level of promotion, track what works, repeat the winners, drop the losers, and do well despite the economy.

Thanks Clayton. You are my favorite curmudgeon/sage. OK Copy Sheriff…shall the posse mount-up and ride?
Comment by E Matthew — January 19, 2009 @ 4:43 pm
You are right - President-Elect Obama being the least insider, old boy network president we’ve ever had, is in the unique position to introduce some very bold moves that could actually make a difference.

And you are right also that the old FDR-style stuff just isn’t going to cut it at all.

Besides spending deficits we also have a TRADE deficit that isn’t going away but what IS going away is so many of our excellent businesses
- they are locating overseas to get away from the US’s ridiculously high corporate tax rates.

The one thing that Obama could do that would be the fastest way to turn this nation around would be to push for and get passed the Fair Tax - fairtax.org.

The US would instantly become the worlds’ biggest tax haven and businesses would start moving INTO the country instead of out, citizens would stop looking over their shoulders constantly to see what big brother thinks about every transaction,
and this country would take off like a rocket - and all our enemies would start shaking in their boots.

Trouble is, the FairTax makes it obvious that there’s a fair amount of tax for each transaction
- all the abysmally ignorant people who think they “get money back” from their tax returns would be very upset

- but guess what, they are going to be upset anyway because unless something radically changes for the good, things are going to get much worse before they get any better.

Folks, we are in a global economy and we have to compete in a global economy - right now we aren’t competitive

- do a search for “economic freedom index” and we are down to #6, barely beating out Canada.
Ireland as you’ll see is at #4 and they are being called the “Celtic Tiger” - and how did they do it? Simply by cutting taxes.

You are right Clayton - without boldness and a new course of action, the US is in for a very rough ride. President-Elect Obama, if you start promoting the FairTax, I’ll be there 110% - I still love this country.
Comment by Gary — January 19, 2009 @ 4:45 pm
Spooky-original idea, Clayton. Virtually universal bankruptcy rises to about the same level as the Old-Testament “Jubilee Year” in distributing consequences among all parties to almost every bad debt decision.

I think your history needs a tune-up — the record* shows FDR, Jack, Bobby and LBJ were all unlikely to have cheered tomorrow’s event — but your economics is “on the money,” so to speak.

* http://www.humanevents.com/article.php?print=yes&id=16500
Comment by Brian Hayashi — January 19, 2009 @ 4:48 pm
Thank you for a well-informed, thoughtful suggestion. I can only hope President Obama reads it.

In today’s New York Times, Thomas Friedman suggested that the president have a “Come To Jesus” moment with the banks — because they have problems that they are not making public. These undisclosed problems are a major reason why banks are more likely to hold onto funds and NOT make loans…and without credit with reasonable terms of repayment, small business — the lifeblood of our country — grinds to a halt.

I’m sure *no one* wants this to happen!

Bankruptcy can be useful if a company in trouble uses it to reorganize its assets properly. The business is forced to identify less critical areas that are consuming a disproportionate amount of resources.

Likewise, if the banks were given an opportunity to come forward and reveal their sins, the worst offenders could “plea bargain” for a landing that would be safer than one that would inevitably be forced on them later, given the economic climate.

Most banks would have to reorganize and potentially be acquired by stronger banks. There will be write downs, and more than a little pain.

But here’s why it would be worth it: at the end of this process, banks would be better able to trust each other, both domestically and internationally. At that point, the government can offer American companies and consumers the tax breaks, loans, loan guarantees and grants they need to help them build the foundation for an explosive recovery.

Without the trust in and between banks in America’s financial system, all of the promises of TARP will look a lot like building a shiny new mall next to the old mall: a lot of construction, maybe some interesting headlines, but in a few years, the new mall will be largely vacant, a modern-day retelling of Ozymandias’ hubris.

No matter what, I pray that Obama will always find the strength to do what he believes to be right, no matter what the polls have to say.

Best wishes for a successful 2009!!

- Brian
Comment by Mike Estes — January 19, 2009 @ 4:58 pm
Great letter!! It is truly a historic day and for that I celebrate! But don’t sweat it Clayton, not that it would ever happen - but if TTP failed I’m sure the government would be right there to bail you out!

Mike
http://www.borntowin.com
Comment by allan — January 19, 2009 @ 4:58 pm
Clayton

Your letter makes my hart feel good.
I am not much at wrighting,but you said it all.

Thank you for this open letter.

allan
Comment by Bernie Malonson — January 19, 2009 @ 5:03 pm
Mr. Makepeace, nice article.

I enjoyed reading it and wanted to add my two cents. In order to really clear out the malaise, government needs to rethink its role. Luckily Mr. Obama IS a pragmatic person.

One of the key issues facing America is not too much regulation, but the fact that in many cases their is no regulation of any kind. Like giving the inmates (or bankers) the keys to the asylum.

I am a market based capitalist as much as the next guy, but the system we have evolved into is akin to anarchy! Even basketball and football have referees! The refs didn’t stop Michael Jordan nor did they stop Jerry Rice. Those two heroes epitomize the traits America needs most, hard work, determination, self-respect and the will to compete.

Government won’t save us, neither should it be the tool of big business.

Obama’s team will hopefully take the long view and begin to act in America’s interests, not the interests of multi-national business or banks.

B. Malonson

PS: Great writing by the way. (Cheers!)
Comment by Skip Nusbaum — January 19, 2009 @ 5:09 pm
You did it again Clayton! Whether you offer guaranteed seo services for a living or are an IT technician, being offered a ditch digging job will NOT become a cure for the vast number of professional white collared workers out there!
Comment by Doug Sowerbutts — January 19, 2009 @ 5:19 pm
Clayton you have shown us 3 important aspects with your letter….Guts….Common Sense….How to Write a Letter.

If nothing else, Barack Obama has brought real Hope to multitudes of people world wide and out of this world-wide economic storm of all storms Barack Obama may be the catalyst urgently needed to create and meld the greatness of humanity and break down many outdated structures that hinder the growth of human greatness. Doug
Comment by Kelley Eidem — January 19, 2009 @ 5:24 pm
I would not be so kind. One of the first things he promises to do is to make unfettered abortion the law of the land, overruling various state laws.

I hope he fails to institute the policies he has hinted at…such as he told Joe the plumber. But with the Congress behind him, and sometimes in front of him, the next four years will doubtlessly be disastrous because he will succeed.

You might not realize that Obama was at the center of training members of ACORN who harassed banks in Chicago that led to the fiasco at Fannie Mae. So how likely is Obama to to fix the problem when he was one of the key players responsible for it? Slim and none and Slim has left town.

Like you, I fully agree that it is private enterprise is the solution. This nation has solved its financial downturns for 200 years in this way.

When the other way…the government way…was tried, it failed.

The Founding Fathers were brilliant by putting bankruptcy in the Constitution but did not include bailouts. Bankruptcy works - printing monopoly money doesn’t.

Here is a prime example of how the private sector can turn the economy around.

We presently spend in excess of $1.6 TRILLION on illness in the US…it’s not health care, folks!

I know how half to three-fourths of that can be saved. For example, I cured my own stage 4 cancer for $10. I heard in the last week of a man who used the recipe and cured his stomach cancer in one week.

And that’s just the tip of the iceberg. There are cures for drug addiction and alcoholism, and a miriad of other illnesses.

Together we can cure cancer - one person at a time!
Comment by Jim — January 19, 2009 @ 5:41 pm
Clayton,

Your open letter to President-Elect is excellent.

I have 3 questions:

1) Will / has letter been sent?
2) Has Obama acknowledged receipt and read it?
3) Has Obama indicated whether his planned course of action will give consideration to your well-stated suggestions?

Keep up the drum beat for common sense, objective changes …to get our country back on track and moving forward guided by the spirit / intent of our founding fathers!

Jim
Comment by Dan — January 19, 2009 @ 5:46 pm
All I see right now is the democratic party in cahoots with Obama wanting to spend another 800 Billion + on more governemt programs. What is scares me the most is that while the economy has hit the dumps, illegal immigrants have been returning home. Now, pass this stimulus pagckage and start building roads and bridges and other infrastructure and guess what. Who is going to take these jobs? I am almost willing to bet my retirement that illegal immigrants will return in big numbers to fill these new jobs. How many individuals today even know how to do contruction work. How many illegal immigrants lost their jobs when the housing market collapsed? Quite a few. So they are poised now to return to work, working for all those contractors and subcontractors working on infrastruction. I personally think we need to scream loud and long, no more bailouts, no more stimulus packages. Quit spending money we don’t have on non solutions.
Comment by martin schultz — January 19, 2009 @ 5:55 pm
Your letter should be required reading for every elected representative. Could you help that along by having it sent to them by large numbers of their constituents. That would hit them where they really live. Worrying about being reelected.

It should also be required reading for every school girl or boy. If they understand the points you make, we may well end up with a better class of elected representative.
Comment by Geary - Milwaukee — January 19, 2009 @ 6:19 pm
Hey Clayton,

Thank-you so much - you’re indeed a true U.S. patriot.

God bless you mightily in 2009 and beyond for your words of wisdom and courage!

May the LORD have mercy on our nation in the days ahead!
Comment by Lydia — January 19, 2009 @ 6:19 pm
Clayton,

Too bad Obama will probably never read your letter. We do need someone who will stand up and do what is right instead of trying to appease the masses. And I agree with the other readers in support of the Fair Tax.

I would suggest that everyone take a good look at it and see how much sense it makes. What a relief it would be to get rid of the IRS.

And if you’re older than dirt - may I join the club?
Comment by Joe — January 19, 2009 @ 6:25 pm
Clatyon:

Where were you when we needed you. Let’s start a political campaign for 2010, 2012, and 2018.

I would love to read your take on copywriting and political.

Joe
Comment by Caleb Osborne — January 19, 2009 @ 6:40 pm
Clayton,

I would seriously vote for you for president. No lie.

You need to run

– Caleb

P.s. Save a little spot for me somewhere on your cabinet?
Comment by Clayton Makepeace — January 19, 2009 @ 7:12 pm
Thanks, guys!

Yes, Jim, I sent this letter to the president-elect. Of course, we all know that it doesn’t have a snowball’s chance in hell of actually being read.

BTW: Did you all get as far as the P.S.? There’s a link to a swipe that may help you …

Cheers!
Comment by DaveC — January 19, 2009 @ 7:34 pm
“And why, instead of bringing “change” to Washington have you appointed so many Reagan, Clinton and Bush retreads to your new administration?”

Because Obamanation was vetted by those who actually wield power — the same folks who vetted previous presidents.

He’s no different.

There will be no change.

The debt and deficits will continue to increase, the US dollar will continue to lose purchasing power, the federal bureaucracy will grow, and citizens will continue to lose their rights.
Comment by Liz Monte — January 19, 2009 @ 7:40 pm
Clayton, what you’re saying makes a lot of sense. There’s just one dot I haven’t quite connected yet. How are we going to keep millions of people from literally starving to death during this correction? Your plan will get us out of the crisis faster, but in the meantime, people will still need to eat (and live somewhere, and get medical attention when necessary). If that one detail can be worked out, I’d be totally behind you.

I’m very interested to hear your thoughts on the subject.
Comment by Hank — January 19, 2009 @ 7:43 pm
First of all let me commend you on your writing ability. If I could write with your eloquence, I would do it for a living also.

Now let me begin with saying when I first started reading this letter, the further I read the more I had decided to unsubscribe from all of your emails and everything that I get from you. But being the open minded man that I am, I decided to read to the end and I am glad I did. You redeemed yourself with me about 80 to 90%. I agree with Kelly Eidem on most of his points. But I would go further than he. I can’t stand behind a man whether he be president or just a someone I know if he is dishonest. Mr Obama is fundamentally dishonest down to his every thought and core. The reason I feel this way is because he will not step up and give any kind of full disclosure on any questions that he was asked when he was running for president. If he was honest and had nothing to hide, why not tell every thing and put it out in the open? He would never had got a tenth of the votes he got if it wasn’t for the corrupt media and their love affair with him and all the foreign money from all over the world that poured into his campaign coffers. It sure wasn’t because we had an informed bunch of electorate voting for the right person. It was totally because the media lied and distorted the truth and he went along with them and preached change, change, change!!! Another reason I believe in his dishonesty.

I could go on but I really don’t know how much space I am allotted here. I will stay with you Mr. Makepeace because I enjoy most of your writings and hope to someday have the skills to write as good as you. Hope your 2009 is more than you hope for and all you wish for is far exceeded beyond your wildest dreams. God bless you but more than that GOD BLESS AMERICA!!!
Comment by Ken Windley — January 19, 2009 @ 7:58 pm
I agree with your comments, hope it is actually read by the President Elect.
Should be given to other world leaders especially Australia
Thanks
Comment by Neal Ashley — January 19, 2009 @ 8:04 pm
Clayton,

You mention Dr. King as one of the two greatest Americans of the 20th century.

Who is the other?

Thanks for such a well written and thought provoking letter.

Neal Ashley, CPA
Comment by jim rogers, sydney — January 19, 2009 @ 8:09 pm
Time will tell whether Barack Obama can always choose the truly moral path as a US President, at the head of a colossal economic juggernaut and self-interested Superpower. Hopefully his background, racial mix and decency will induce him to rise above the usual US self interest seen in world affairs. I won’t hold my breath though.

Stephen Kinzer’s book Overthrow (America’s century of regime change from Hawaii to Iraq) is a great addition to political history, along with Naomi Klein’s The Shock Doctrine, and the works of Noam Chomsky. Kinzer discusses the US penchant for selfishly following aggressive foreign policies that demand foreign countries open their markets to US corporate raiders, and allow US firms to buy their major industries, and support US foreign policy initiatives, to the detriment of the local populace. The alternative to caving in to economic blackmail has often been US initiated, enacted and/or supported regime change, by coup or invasion. He discusses many overthrows since Hawaii at the end of the 19th century, including Nicaragua, Honduras, The Philippines, Cuba, Costa Rica, Puerto Rico, Iran, Guatemala, Vietnam, Chile, Grenada, Panama, Afghanistan, and Iraq. He doesn’t discuss other coups supported by the US in Indonesia, Argentina, Brazil, the Congo, nor its invasions of Mexico, Haiti, Dominican Republic or the Balkans, nor the multiple other acts of international terrorism or blackmail or political interventions using bribes, misinformation, coercion and worse (as in Pakistan) over the last century and this one.

US policies have often smacked of paternalism sometimes mixed with racism. From Kinzer: “Speeches justifying American expansionism on the grounds of the white race’s presumed superiority were staples of political discourse in the 1890s. Senator Albert Beveridge described expansion as part of a natural process, “the disappearance of debased civilisations and decaying races before the higher civilisation of the nobler and more virile types of man”…Charles Cochrane spoke of “the onward march of the indomitable race that founded this Republic” and predicted “the conquest of the world by the Aryan races.” When he finished this speech, the House burst into applause.

“All that this country desires is that the other republics…shall be happy and prosperous,” Theodore Roosevelt declared, “and they cannot be happy and prosperous unless they maintain order within their boundaries and behave with a just regard for their obligations toward outsiders.” (That is, towards US business and policy interests).

“You’re either with us or against us in the fight against terror,” stressed U.S. President Bush in November 2001. This sort of black or white doctrine has been used by the US for over 100 years to define its allies and enemies. Those in any way opposed to US imperialism/neocolonialism are thus enemies, so the US politicians can justify any act against US opponents as part of a justifiable global policing role, that just happens to also serve US economic interests. Countries without resources may survive with their government left largely untouched and in power, for the US may see no benefit in deep involvement if there are no economic pickings or a market to snare, but if openly opposed to the US are likely to still be punished in some way, by economic blockade for example. Regardless of the negative human cost on the local people, other nations are graphically made aware that the US must be obeyed, or else.

US control of multiple global regions was and is seen as vital to US interests and prosperity. Allied to this was and is a sense in US politicians and their general public that what is good for the US is good for the world, and that the US is a crucial source of world goodness. The US sees itself as civilising the world, so any act of aggression, atrocity, political interference, or destructive mission is seen with rose-coloured glasses as a necessary unfortunate means to a greater end, which just happens to also suit US geopolitical needs. Even if this means actively supporting regimes that are going to or are known to already be suppressing freedom within a country, and holding on to power by use of force, torture, murder and undemocratic processes. So long as the US benefits, then God must be on their side. Too often they see themselves as the modern Chosen People.

I’m forever amazed that US politicians have such a self-righteous religious zeal in their pursuit of collective US self-interest. Dulles in the post war era and Rumsfeld more recently, along with their Presidents, highlight the narrow-minded, selfish American approach to world affairs, with scant regard for innocent casualties and deaths, nor any regard for the plight of the masses in other nations if US interests are crossed or threatened, actually or possibly.

Would JC really support these politicians in their actions? How do these two-faced politicians call themselves Christian? Isn’t it an abuse of the term? I’m sure Jesus would be turning over in his grave. Oh, sorry, I forgot…….
Comment by Rhoda — January 19, 2009 @ 9:13 pm
Great Writing.

My Questions are:

Did you actually mail this to our President Elect?

Have you received word that he has read it?

Will he apply the information so well written and true to history and take a stand that is going to offend many but may help our nation really be the Land of the Free and Home of the Brave?

Thanks for your courage to write this. I appreciated your expressing the Libertarian ideals. Rhoda
Comment by Jeff Atherton — January 19, 2009 @ 9:44 pm
Like I said on twitter today:

Throwing money at a problem that wasn’t caused by a lack of money is a special kind of stupid.

Blue Skies,
Jeff
Comment by Clayton Makepeace — January 19, 2009 @ 10:15 pm
TO JIM ROGERS (POST #29) …

Yep, Jim, you got us dead to rights. You caught our leaders red-handed working to promote their country’s security and prosperity.

What would you suggest our nation’s leaders do with their time instead?

In your diatribe, you of course, failed to mention that when we opened other markets for our products, we also opened our market for other countries’ products — at the cost of thousands of U.S. jobs.

Or the fact that “corporate raiders” from other countries now own huge chunks of the US economy. Like Mercedes’ acquisition of Chrysler — or the most notable recent example: Anheuser-Busch. Or the fact that Nissan and Toyota are eclipsing some American automakers in U.S. sales.

And of course, you forgot to say anything about the fact that when 250,000 people are killed by a tsunami, the US Navy is there within hours to begin helping the survivors and saving lives.

Or the billions the Bush administration just spent helping people and fighting AIDS in Africa.

Or the American lives lost stopping genocide during the Clinton Administration in Bosnia.

Or the hundreds of billions in foreign aid we send to other countries every year.

Are these things conveniently ignored in the anti-American propaganda you seem to prefer? Or do the authors attribute evil ulterior motives to everything we do simply because we are America?

Paranoia is a disease, Jim. Do yourself a favor. See a shrink.
Comment by John Brandow — January 19, 2009 @ 11:01 pm
It is with amusement that we keep track of the Americans. It is with amazement that we notice the gullibility of the American people when it comes to election. It seems to us that they actually believe the politicians they vote for. The campaigns read like movie scripts.
We will just sit and watch again what your new president is going to do. Promises are easy to make. You have a terrible economic problem to solve and we will be watching.

I enjoy every single email that I receive from Clayton. But he must really make peace with his age. I am actually older than you but in my mind definitely 20 years younger.
John Brandow
SOUTH AFRICA
http://www.agingpassionately.iblog.co.za/
Comment by Olga — January 19, 2009 @ 11:11 pm
Dear Mr. Makepeace,

What a great, truthful and most caring letter it is. Wonderfully written with a lot of practical applications to be used for the President-Elect.

I admire you. You love your Country and you want to help and you are free to express your thoughts without fear for your life.

I could not help but draw parallel with the country I came from, which also had slaves by millions…

Those slaves were not imported and not of a different color of skin - they were just poor people and they were called “souls”. That country was old Russia under the rule of Moscow, under the Czar. The slaves in Czar’s Russia were freed about the same time as the American slaves.

Only the Russian slaves had a very difficult time to live on their own (adjust to a free life) and many returned or remained by their Masters for quite some time and continued to live in poverty.

This letter is out of context and I am expecting it to be “vaporized”, but while reading your letter it made me think of the Country I came from, which was the U.S.S.R. - the Union of Soviet Socialist Republic, which was considered in the West for quite some time (because of the false statements by the Communist Party, terrific propaganda and the secrecy) the Paradise of the Proletariat - the poor people…

There were many people (the Intelligentsia - the educated people), who wanted to bring changes, which did not materializes, but because of the WWI and the Russian Revolution it was thought that those wishes came true only Russian citizens did find themselves in a worse situation than before.

For writing an open letter to Stalin you, Mr. Makepeace, would have been eliminated, shot.

I grew up believing that I lived in the best Country of the whole world, that we were free. that other countries in the West lived much, much worse than we did. While we had shortage of so many things, it was justified because it was a young country, we were told, but we soon will live just as good as the people in America. The slogan was displayed everywhere: “We Are Going To Catch Up And Overtake America”, that is, the American Standard of Living, etc. (Dognat’ y peregnat’ Ameriku)

The U.S.S.R. disintegrated on its own, because the pressure that was put on its citizens just made burst the country to pieces, yet it’s being said by the newcomers to the West it’s the doing of the U.S.A.

As everyone knows, after the collapse the “Republics” (they are a concentration of ethnic groups, who did not want to belong to Moscow even under the Czar) promptly declared the Independence and they are doing OK.

My concern is about Ukraine (I am Ukrainian), which was taken under the Moscow “care” about 400 years ago, because of the River Dnieper, the only connection by water to the West from Russia and also because it’s quite a rich “Province” in many ways.

As you know what happened about the gas supply to Europe. It was mostly to discredit Ukraine to the West, so that they would oppose the admission of Ukraine (the “trouble maker”) to the UN.

Now Russia is beginning to act up to the United States as well, which reminds me of the salute we learned in Grade I in the Primary School and had to repeat it at least twice a day, that the Communism HAS to spread to all the Continents of the World and we, the young people, were the ones to bring the “good and happy life we enjoyed” to the rest of the World. We, the young “Pioneers”, (future Communists)were looking forward to do just that.

Many people and Statesmen of the West do not understand the Ukrainian situation, just like the American Soldiers could not understand why people did not want to return to the Soviet Union after the WWII.

It’s very difficult to grasp, to understand life in that country.

Another Nation that is not understood is Chechnya - it’s also a very rich patch of land, that is fighting for its independence.

Your letter gave me a thought to write to Mr. Omaba and explain the situation of Ukraine. I know he knows all about it, he knows the history of that country but not in too many details, but perhaps, just perhaps he gets to read the letter and it may help…

I am a great admirer of the U.S.A., I will never forget the help American people provided after the WWII to the Displaced Persons (the DPs as well as the whole population of Europe, that was in ruins) with clothing, food, coffee, chocolate and even personal grooming products!

Great People, Great Country! Thank You American People…

I am more than convinced American People will “dig” themselves out of the mess they are in now and will continue to be the leading, democratic and the most powerful country in the World - of this I am certain.

God Bless America and the American People - without their leadership the future of the World is bleak and uncertain.

Olga O’Mara, Canada
Comment by Ron Haley — January 19, 2009 @ 11:40 pm
I enjoyed your letter and I hope the President will make some of the needed changes that you spoke about. I doubt it will happen though.

I think the further up the political ladder one climbs, the greater the pressure from special interest groups and individuals.

Many of us know the ease with which Mr. Obama gave into such special interests within the Chicago political machine, and the guile and deceit he used to obtain his senate seat, as well as his presidential campaign’s questionable fund raising practices.

I don’t care if the man is black, white, or laurentian green, the machine called government is broken, and it’s probably time to reset.

Also, I don’t understand the whole concept of Obama as a black man. He had a white mother and a black father. How does that make him black? Can someone please explain?

Ron Haley
Comment by Clarke Echols (Resident scientist and rabble-rouser) — January 20, 2009 @ 12:29 am
Hell’s Bells, Clayton. You were barely a teenager
when I started my business and professional career
paths.

What do you mean, older than dirt?

And about the time Obama’s taking his oath, we’re
getting grand-kid #14. A girl. Our oldest daughter’s
eighth.

But otherwise, it’s a great piece!

Clarke
Comment by Clayton Makepeace — January 20, 2009 @ 6:25 am
You touched my heart, Olga …

It often takes a person who personally experienced the horrors of personal and political suppression to fully appreciate the blessings of liberty — or to be in awe of the courageous men and women who risked and often lost their lives to give them to us.

Thank you for your comments!
Comment by Clayton Makepeace — January 20, 2009 @ 7:22 am
TO LIZ MONTE (POST #25) …

You asked, “How are we going to keep millions of people from literally starving to death during this correction?”

Great question!

My answer is that once we allow badly managed companies to go bankrupt quickly instead of spending trillions in a doomed attempt to save them …

And once we allow debt-ridden consumers to go bankrupt quickly instead of spending hundreds of billions that only help them make a few more payments …

All that money could be used to help these newly debt-free companies build the foundation of a vigorous recovery …

And also help employed but debt-ridden consumers to save the money they’re now using to service their debt each month …

And ALSO to help unemployed workers keep body and soul together … acquire new skills for new careers … or even start their own businesses.

Right now, the trillions we’re spending to help these companies and consumers live hand to month for a few more months is money down a rathole.

It’s not solving the problem; only creating dependency on Washington — and by doing so, giving the blithering idiots in Congress greater control over our economy and our lives.

If we focused that money where it will do the most good, we’ll likely spend less and hasten the recovery — and rising tax revenues from the recovering economy will help offset a portion of what we spent to help people rebuild their lives.

See? Easy peasey.
Comment by Clayton Makepeace — January 20, 2009 @ 7:35 am
TO CLARKE ECHOLS (POST #36)

You’ll enjoy this article:

“At December’s U.N. Global Warming conference in Poznan, Poland, 650 of the world’s top climatologists stood up and said man-made global warming is a media generated myth without basis.

“Said climatologist Dr. David Gee, Chairman of the International Geological Congress, ‘For how many years must the planet cool before we begin to understand that the planet is not warming?’

http://www.mlive.com/opinion/flint/index.ssf/2009/01/its_time_to_pray_for_global_wa.html
Comment by Bill Haynes — January 20, 2009 @ 8:03 am
Dear Clayton,
I’m usually a bit left of center politically, but I’m with you on this one.
The worst thing that can happen with this economy is for the government to continue to try and “bail out” companies that have been languishing for years - and in some cases decades - under mountains of debt and moronic mismanagement.

I mean look, I feel mighty sorry for the local Ford dealer who may not survive this thing, but I don’t feel giving his company Treasury dollars is going to help the company avoid bankruptcy anyway. Corporate bankruptcy forces dillusional executives to finally tell themselves the truth! And to repent!

Of course, repentance strongly implies corrective action. If we get that far, I think we’ll be alright.

Happy Inauguration Day, Clayton!

Bill Haynes.
Comment by MARKEAUX — January 20, 2009 @ 8:35 am
Thanks Dave C and Hank. Clayton, you are giving osama (oops, obama) way too much credit. The whole Reverend Wright, Ayers, Pfleger,Farrokan, Chavez, Soros, etc. etc. etc. connections tell a story so much greater than the shiny smile, often blind desire for change, and a seriously perverted media does. Yeah, we need change but not by this means. Change will indeed come….next time more freshly awakened Americans with a renewed desire for an oft forgotten concept called honesty will do a little thing called RESEARCH!
Comment by Ken Calhoun — January 20, 2009 @ 10:13 am
Very well written, Clayton! The best political dialogue I’ve seen published so far, immensely more insightful, specific and valid than the vapid stuff on cnn etc recently - thanks for contributing some thoughtful dialogue to current events.

Your piece is evaluative, celebratory, and makes solid responsibility-focused points that are well worth considering as well. Excellent read. A+… Let’s hope this year gets us back in shape, that consumer sentiment goes up and they start spending more, and jobs/economic recovery start building up sooner rather than later.

And let’s hope that Washington doesn’t become a big socialist robin hood “raise my taxes and give to the poor” type of pork-barrel machine that many of us are concerned may happen.

-Ken
Comment by Clayton Makepeace — January 20, 2009 @ 10:33 am
TO MARKEAUX (POST #41) — and the others who say I’m being too hopeful regarding Obama …

What can I say? I’m an optimist at heart.

I’m hoping the Obama campaign was a massive exercise in “bait and switch.” Democrats voted for “change” — and sure enough, Obama’s rhetoric has CHANGED!

Judging from the new prez’s cabinet appointments, his economic and defense programs may very well be closer to Reagan’s than to Pelosi’s and Reed’s.

Is “Pro-Business Democrat” an oxymoron? I hope not — at least in this case!
Comment by Clayton Makepeace — January 20, 2009 @ 11:20 am
Two million at the ceremony; one in every 150 Americans is there. Amazing.
Comment by Sharon B. — January 20, 2009 @ 6:16 pm
Hi Clayton–
I never could figure out why Washington keeps tossing good money after bad. Where do they think that’ll get ‘em?
When us “regular” people get into financial trouble, the only one to get us out is us. As long as the corporations keep getting billions, they’ll never suffer the consequences of their actions. I say it’s time to let them suffer! If they can’t manage money, they shouldn’t be in business anyway.
I think Obama is wise to hire people who know their stuff, regardless if they’re “recycled” or not. He’s not kissing anyone’s butt. He is smart enough to know what he doesn’t know, and that stands in his favor. As to actually fixing things, however–I am withholding my opinion until he proves himself one way or the other.
Like you, I’m an optimist. I know things will turn around because they always do. I also know that the results I get in my own life will be in direct proportion to the efforts that I put in. If I should need a bailout, I will have to create it myself.
Thanks as always for the post–have you ever thought of running for office yourself? You’d have all those corporate whiners shaking in their Gucci loafers.
Comment by Glen Kersten — January 20, 2009 @ 11:56 pm
Where were you before the election?
If the voters would have done some careful research instead of emotionally swept away by the left wing rhetoric, the outcome would have been vastly different.
But then, that is wishful thinking. Americans have very rarely exercised good judgement during elections and campaigns.
I was a child during FDR’s administration and saw through his phony speeches in spite of my youth. why can’t so-called mature voters be as smart as a child?

Keep following up until you are sure that the new Prez has read and digested your wisdom.

Good luck !
Comment by Clayton Makepeace — January 21, 2009 @ 3:22 am
TO GLEN (POST #46) …

I was quite vocal before the election. Check our our back issues.
Comment by Emre Yuce — January 21, 2009 @ 12:51 pm
Dear Clayton,

Your suggestions for fast economic recovery sound pretty reasonable (stilL only with the assumption of rationality and responsibility for the majority of the population in their economic actions).

Thus, I have a big proviso:

The U.S. Government must be very careful in their manners letting badly managed big companies (big banks, GM, Chrysler etc.) go bankrupt and allowing investors to restructure their assets, (like buying up successful brands like Jeep, Corvette etc.) and to build healthier profitable, sustainable companies.

Too-hard-an-action (i.e. too much tough love) letting big bankruptcies requires nerves of steel of the general population (including investors) as a whole. But neither the U.S. nor any country on Earth has that. Without that, the possibility of inducing general economic panic is very very HIGH.

So let’s see how hard a too harsh approach can go AWRY (instead of initiating a quick recovery):

. Out-of-control large corporation bankruptcies (inevitably leading to tons of small business bankruptcies). Given enough panic and depression, even the most productive companies will inevitably go bust.

. Those busts initiating huge BANK RUNS and stock-exchange runs while everyone’s trying to liquidate their plunging assets which makes the whole economy come to a standstill. (everyone seeking full and immediate liquidity, no liquidity, no credit whatsoever, no economic activity)

. Leading up to further bankruptcies (starting with banks and large public corporations), skyrocketing (like 25%) unemployment, plummeting demand, RAGING DEFLATION

. The Federal Reserve going out of ammunition with interest rates at 0% or lower (Japan in 1990s)

. With prices and incomes falling and the dollar amount of debts remaining the same, the total DEBT of the nation will MULTIPLY, making it even harder to handle it without large debt write-offs and major restructuring.

. With the economy in shambles, the Federal Government now out of ammunition in turn, with dismal tax revenues, and unable to print money without risking STAGFLATION.

That is pretty much what happened during the 1929-1933 time frame (except the fact that the U.S. didn’t even have a decent Central Bank (Federal Reserve) because of “Regulated-Over-My-Dead-Body Business Fetishists.”

In all, too much “TOUGH LOVE” could very well induce MASSIVE PANIC leading to a disaster outlined above.

I think transparency in decision-making and making sure the best bi-partisan economic minds are involved in the making and evaluation of the policies for economic recovery is a must in defusing a potential RUN.

I would suggest these:

1. Let only the few worst companies go bankrupt.

2. Form a bipartisan, very very transparent round-table team of recovery advisers who will work full time on it for at least a couple of years (like the 9-11 commission).

3. Appoint the best economic advisers to troubled companies surviving on public funds.

4. Appoint CEOs like Carlos Ghosn (who turned Nissan from the brink of collapse to make it excellently profitable again), and Lee Iacocca (who turned Chrysler around previously) to publicly funded companies and give them full authority.

5. Apply everything suggested in Business Management Textbooks to make them profitable once again.

6. Institute a very transparent REFEREEING system for banking and big businesses which can effectively prevent BAD lending practices (e.g. subprime mortgage lending during a price bubble) and ABUSE of BIG corporation POWER.

7. Loosen up the control but leave effective and efficient refereeing intact once the risk of ECONOMIC PANIC is overcome.

I’d love to hear your thoughts on that.

Best,

Emre Yuce from TURKEY
Comment by Don McKinnon — January 21, 2009 @ 1:00 pm
Great letter, great advice.

BTW your photo for this post is far better than the one you use in your emails. I have to get over your email photo to even read the email. You appear far more human, friendly, unstuffy and down right likable in this photo. Just my opinion. BTW Daniel Levis stuff is great.
Comment by Capt Phil — January 21, 2009 @ 5:10 pm
Excellent, balanced letter — too bad its unlikely to be given much attention by the Obama administration. And there are many thoughtful comments by other submitters. Taken all together, I’d say these exchanges represent the political Total Package. I LOVED the letter from Olga. She represents the real deal, and I’ve also heard similar thoughts from others who have experienced American courage and generosity. About all I can add is that if we want to truly strike at the roots of the problem, we must work to eliminate the Federal Reserve, which is neither federal nor a reserve: it is a private banking cartel of the sort that Andy Jackson kicked out of government — only worse, a parasite on the American economy.
Comment by Clayton Makepeace — January 22, 2009 @ 5:30 am
TO EMRE YUCE (POST #48) …

Very well-thought-out and well-written post, Emre!

My thoughts …

1. The longer this crisis lasts, the more mid-sized and smaller companies — our largest employers by far — will go bust, no matter what the government does.

Getting the bad blood out of the system quickly will save many companies and wage-earners that would otherwise have burned through their cash and gone bust in a longer crisis.

2. Bank runs are unlikely so long as the FDIC continues to guarantee depositors accounts. In the 1930s, the FDIC failed to do this and bank runs resulted.

3. Since bankruptcies from bank runs can’t happen under our present system, bank runs cannot cause new bankruptcies.

4. The Fed can’t run out of money. Unlike companies and consumers, when it needs more it can simply borrow or print as much as it needs. And in the event that all that money-printing triggered inflation, it could simply devalue the dollar which would enable debtors to repay with cheaper money.

5. Falling prices and income don’t cause debt; let alone multiply it. They only make debt harder to repay — and bankruptcy is the time-honored remedy for companies and consumers who can’t repay their debt.

6. What we have already is the polar opposite of stagflation — and far worse. We have deflation and a recession that is steadily transmogrifying into a full-fledged depression.

7. Comparing this crisis with the Great Depression doesn’t reveals more differences than similarities.

>> Back then, Washington passed Smoot-Hawley, which killed global trade.

>> Today, we have GATT and NAFTA, the World Bank and the G-20 which guarantee open international trade.

** Back then, a sudden stock market crash wiped out just about everyone at the beginning of the crisis.

** Today, the slow-motion stock decline has allowed millions of investors to move an estimated $50 trillion to the sidelines. That money is now available to move back into the market as soon as confidence is restored, which, if Washington would simply step out of the way, should cause the recovery to be far sharper than in the ’30s.

>> Back then, the FDIC failed to fulfill its role in guaranteeing depositors’ money, which wiped out savers and triggered bank runs.

>> Today, the FDIC has more than doubled its insurance to $250,000 per account and is paying off like a slot machine. The cause of bank runs has been eliminated.

** Back then, a “great communicator” — FDR — took control and began his efforts to avert further panic AFTER the great crash that caused the crisis and the bank runs that worsened it.

** Today, another “great communicator” — Obama — as taken control IN THE MIDDLE of the downturn; giving him the opportunity to quell public concerns about his use of tough love to end it.

Finally, government is not and has never been the solution; it’s the problem.

Washington caused this crisis by passing idiotic “fair housing” legislation which increased the number of loans made to unqualified borrowers … causing Fannie & Freddie to buy those bad loans, giving many the impression that they were government-guaranteed investments … slashing interest rates which encouraged rampant real estate speculation … failing to use existing laws to regulate big banks.

As a rule, I trust the government far LESS than I trust companies and consumers.

The vast majority of companies and family budgets are managed effectively and efficiently and profitably. Our government is without question the worst-managed entity on the globe; utterly incapable of ending waste or corruption — let alone turning a profit.

I see no historical evidence that giving self-obsessed politicians and bumbling bureaucrats greater power over our companies and our personal finances would help in any way.

Allowing them to cause millions of companies and consumers to become addicted to public money would prove to be the height of folly.

– Clayton
Comment by Clayton Makepeace — January 22, 2009 @ 5:48 am
MORE FOR EMRE …

I do agree, however, that no government has ever demonstrated the courage to do the sensible thing — to allow badly managed companies and families to go bankrupt.

Politicians must be seen as doing something to fight the crisis. So they do something — and that something invariably makes the crisis last longer and hurt more people than it needed to.

Judging from Obama’s statements and cabinet selections so far, it seems clear that his plan is NO CHANGE — to merely continue and even intensify the Bush bail-out policy.

There’s no question that Obama is an extremely intelligent man. There’s no question that he’s surrounded by very intelligent economic advisors who know full well that these bail-outs and hand-outs only make matters worse over the long term.

The only question is, is the Obama administration continuing Bush’s failed policies merely for political reasons — appearing to be “doing something” in order to garner votes in the next election cycle?

Or does he have a more sinister long-term agenda that involves using this crisis as an excuse socialize our economy?

Only time will tell …
Comment by Emre Yuce — January 22, 2009 @ 8:51 am
Dear Clayton,

I always learned from your wisdom and experience. I think you’re a great communicator too And one with very solid logic and clarity of thinking. That’s why I follow your blog anyway (and also aspiring to a career similar to yours)

Anyway, back to my thoughts on the issue:

I totally agree the Fair Housing legislation was a TIME BOMB. If the government wants to provide decent housing for the poorest (I think it morally must), it needs to have a very well designed Public Housing Program, building very efficient, cheap but sturdy and functional, small apartment-style housing. This way, those poor subprime borrowers would be indebted to a Federal Government agency, on favorable (decades for repayment + low interest rates) terms with NO POSSIBILITY of sup-prime lending induced housing price bubble.

Turkey is a very good example in that. There’s a public agency (TOKI) responsible to make sure enough small-sized apartment-style efficient housing is built and sold to the poorest segments of society through subsidized lending backed directly by the government.

When the government requires markets to address an issue that can’t be possibly addressed without causing a massive disequilibrium (e.g. providing decent home ownership for the poorest segments of the society), it amounts to SAPPING the decent functioning of free markets.

You’re totally right in trusting companies and consumers more than the government in economic decisions since enough bad decisions means bankruptcy for individuals while the government can’t go bust without taking the whole economy down with itself.

And the government can very very easily go corrupt. To prevent that we have guaranteed freedoms, elections, transparency etc.

Still, BIG companies can also very easily go corrupt. Mainly because they’ve got huge market shares, people’s habits (like buying GM no matter what), and ample financing (up to a point when they are on the brink of collapse). And they are able to run without making a profit for years and years (look at GM )

So those BIG companies do not have the same checks and balances that small companies have since they can go corrupt much longer without going bankrupt

And when they go corrupt, they go corrupt in groups (”my competitor has all these lavish perks with no impunity whatsoever, why shouldn’t I have the same lavish perks and wastes?”)

And when they go bust, they have a VERY DISPROPORTIONATE effect on the economy that sends deep shock waves. (e.g. GM and all its supporting industries + dealers)

So in a way, those BIG companies are like SMALLER STATES run by Politburos (board of majority stakeholders). They need as transparency, as checks and balances as the Federal Government needs.

The government certainly CAN’T MICROMANAGE… We agree 100% on that. But it must:

1. Check big companies very effectively and efficiently, since they aren’t checked as efficiently as small firms by the specter of bankruptcy. And their BLUNDERS have a disproportionate huge adverse effect for the whole economy.

2. Institute a very EFFECTIVE AND EFFICIENT Refereeing system that will call a very loud “FOUL PLAY!” when sinister economic actors attempt to hoodwink honorable, effective, efficient, reasonable economic actors. And make it especially effective on Big Companies run by virtual Politburos..

3. Remedy Negative Market Externalities

4. Address Moral and Public Good issues that free markets can’t possibly address (they aren’t evolved to do so. they’re evolved for efficient management. for effective management, we need competent leadership though)

I think the Government is the solution more often than is the problem. It evolved because of people’s problems in the first place. Remember a quote by the founding fathers? “If people were angels, we wouldn’t need government. If the government were made up by angels, we wouldn’t need politics. Since we don’t have either, we need to have lots of transparency, and checks and balances on power.”

… And, checks and balances on unrestrained economic power as well.

I think the worst possible situation would be an ALLIANCE of corrupt political leadership and corrupt big companies. And we had plenty of it during the two Bush terms.

It’s possible to administer a strict Tough Love pill for the corporate mismanagement and too much debt illnesses. But the transition could be very very painful and risky. And given enough panic, no amount of FDIC guarantee can prevent a bank and stock exchange run without effective political leadership. So we’re lucky to have Obama in White House in this respect. We had tons of Tough Love medicine during Hoover’s term. Still the economy kept spiraling down till 1933 when FDR’s leadership restored confidence slowly in an economy in shambles. I wonder what would happen if Hoover won in 1932. The precipitous economic decline still had very high negative slope and the U.S. economy still hadn’t hit the rock bottom…

I still think an effective political leadership can still make a surgical intervention (without trying to micromanage) to grossly mismanaged Behemoth companies to provide a much smoother transition and recovery.

Remember, the only thing that stood between Nissan and collapse was the appointment of Carlos Ghosn as CEO. Same thing with Chrysler and Lee Iacocca.

Effective leadership and surgical intervention, can carve years in recovery and restoring general confidence.

The problem then is to find the righteous and effective leaders, which I think is a bit easier in the information age. Now there are hordes of whistle blowers for sinister manipulators.

In all, don’t trust the government. But don’t trust those smaller governments (giant companies) that can run for years without making a penny in profits… Try to find out good leaders that can establish effective and efficient institutions and make surgical interventions.

PS: Thank God for the Founding Fathers The institutions they established were way ahead of their time. Hence the current power of the U.S.
Comment by Andrew L. Foss — January 22, 2009 @ 9:12 am
Clayton,

God did I have to think about this letter of yours a long time. I have not read the responses. I only have to say, you have written another winner and proved that it is possible to sell ice cubes to eskimos even during an arctic blast!

First - it is obvious it had nothing to do with politics, and everything to do with you showing your incredible ability to sell the sizzle. You have crafted a well thought out letter, with mounds of proof and tons of credibility.

BUT

You are selling dog meat to a crowd looking for filet mignon.

Barack Obama is a socialist. His appointments (Leon Paneta just to piss off Dianne Feinstein being the possible exception) are designed sink us into a governmental morass that will sink our Economy lower than even its present state.

PLEASE try to explain his part in their new labor law that is trying to usher in a NEW generation of Labor union power in the United States. And with a Senate as stacked as it is, likely to get it passed. Just the first (in addition to the Upcoming Money Printing Act of 2009) that will cement us into the Great Repression of 2009.

If this was in order to justify your “Socially Liberal” side, hope it all makes you happy. But I would be more please to hear that you were trying to show that you are truly one of the best salesmen ever.

It is easy to sell socialism to Hollywood. You are selling to Libertarians, Conservatives and business people. I just don’t buy it.

Good Luck
Comment by Glen Kohlenberg — January 22, 2009 @ 11:59 am
Great job Clayton! When the banks or the auto clowns go calling with there hand out, are they given a loan application to fill out like I had to when I bought my home?

Until everyone comes clean with the true debt they owe, how in the hell will this ever end.

I think back when I bought my home they run me threw the ringer with paper work and bank statements and tax records that I could not have hidden one red cent.

So before we make more handouts how about some real soul searching and getting down to the real deal.

Only time will tell but the rich will get his first I am sure.
Comment by Chris McMorrow — January 22, 2009 @ 11:36 pm
Thank you, Clayton, for standing up to be counted. You’re not only a good American … you’re a TRUE American. What is a true American? Well, one of my definitions is any able-bodied person (or business entity) who doesn’t look to Uncle Sam for handouts … or … suck the public tit - something that millions upon millions upon MILLIONS of “Americans” and illegal aliens now routinely do. God’s Word says that if a man will not work, he is not to eat. (2nd Thessalonians 3:10) Government socialist policies that clash with the clear teachings of the Bible are DOOMED TO FAILURE.

Unfortunately, I fear this President is just another dyed-in-the-wool brain-dead socialist (an empty suit)- someone who is only going to throw more wrenches into America’s now rusty capitalist machinery. President Obama is already FOOLISHLY trying to push through an $800 billion FDR-style pork-barrel “recovery” bill. America is fast becomming the “Land of the Liberals and the Home of the Slaves.”

As I see it, ONLY the combination of unbridled capitalism … a virtuous citizenry … respect for law and order and private property rights … and … LIMITED GOVERNMENT, can save our once-great Republic. This could only happen if we were to return to our Protestant heritage and, unless God sends repentance and revival, this is NOT going to happen. (Perhaps we have become too sinful and wicked a nation. The only thing likely coming our way is JUDGEMENT.)

The sun is now fast setting upon America. Still, I do hope someone passes your letter on to President Obama. Thanks again for your insights.

Sincerely yours,

Chris H. McMorrow
Comment by Gary Gile — January 23, 2009 @ 9:17 am
Clayton, as always I enjoy reading your articles. In fact I told a friend you are one of my two favorite online writers.

That doesn’t mean that I always agree with you thou. You just get me to thinking and your open letter to the new Prez did just that.

I skimmed through the many comments and noted that no one questioned your statement about the “I also hear you’re planning to take a few lessons from FDR — create new programs that put unemployed $70-an-hour auto workers to work digging ditches, paving roads and building bridges for $10 an hour.”

I did some research on the $70-an-hour part and learned some interesting things. Mainly that the $70 is very misleading. (Shame on you and/or your staff for not catching that.)

The $70 per hour actually refers to what it cost per hour to build a car. This includes wages (average of about $28/hr) and benefits of a current worker PLUS the pension and benefits of the retired workers which is substantial considering the number of retired auto workers.

Another thing I noticed (and I haven’t actually researched this yet) is your comment about the FDIC now being $250,000 instead of $100,000 and that you implied that was a good thing. My question is: “Where will the FDIC get all the money to cover that insurance guarantee if 50% of the banks failed?” Hmmm. I guess they will just have to have the US Mint print up more money. I hope those printing presses are insured because they will be “smokin”.

Anyway, time will tell what the new Prez will do. I did not vote for him or his Republican counter part because I felt they both represented the same old problem, that of big government getting in the way of natural laws and doing what the big and poorly run businesses want instead of what is best for everyone.
Comment by Clayton Makepeace — January 24, 2009 @ 7:42 am
FOR GARY GALE (POST #57)

I pulled the $70 out of thin air to make a point — not to slam autoworkers for getting a good deal. Whether they’re autoworkers or not, the Obama solution of paying formerly high-income management and skilled technicians to dig ditches is just silly.

I referred to the FDIC simply to make the point that bank runs aren’t likely to happen this time around — not to infer that the increase in insurance was a good thing.

It’s obvious where the government will get money to cover the $250k insurance:

1) They’ll borrow it; which will slaughter bond investors and drive interest rates sky-high …

2) When they can’t sell any more treasuries, they’ll print it, which in the long run will gut the value of the dollar … and

3) When interest rates and inflation are at sky-high levels, they’ll have no choice but to devalue the dollar, which will break everybody except gold investors.
Comment by Clayton Makepeace — January 24, 2009 @ 7:46 am
TO ANDREW FOSS (POST #54)

I don’t know if Obama is a socialist or not.

I do know that Obama, like Bush II, Clinton and Bush I, seems to believe that, whatever the problem, government is the solution.

I, of course believe that government is the problem and that smaller government, low taxes, less regulation and free enterprise are the solution.
Comment by Silverio — January 24, 2009 @ 12:59 pm
Dear Clayton, the medicine you’re proposing is just the adequate for a fast recovery of our economy [personal & national]
Congratulations for having the clarity & guts to express it so incisively & brilliant.
Leading a simple life for all of us would even be marvelous for liberating the real causes of the disastrous economy. Lack of concience, to much silly pride, Over consumism and Obesity in all orders of life.
And WELL SOMETHING ELSE AS THE MOST IMPORTANT FOREIGN POLICY, stop being an EMPIRE AMERICA empires extinguish themselves by finishing financing all stupid acts of bigotry. WE MUST LEARN TO AVOID THINKING WITH OUR ROYAL EGOS.
The best for all of us Silver
Comment by Emre Yuce — January 24, 2009 @ 5:47 pm
One last comment:

Sooner or later, the American middle and lower classes will totally find out how better their counterparts live in a Western European style (France, Germany etc.) welfare-capitalist-democracy.

And they will ask them same thing from the U.S. government (both federal and state). And they will get the same perks: a strict 40 hour work week, much better universal health care (including better dental care), much better unemployment benefits, much better retirement plans etc. etc.

It’s just a matter of time. People never betray their material interest when they can clearly see them

Join the Discussion!

Let us know what you think. Or ask us anything. Or offer your own sage advice.

The only rule: RESPECT THIS HOUSE! Postings that contain abusive language and/or personal attacks will be cheerfully VAPORIZED. One cross word and – POOF! – your well-thought-out post will be gone in a puff of smoke.

– Clayton

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Dear Mr. President-Elect …

The fiscally conservative half
of my libertarian heart
is surprisingly pleased, too …

Have a great time on Inauguration Day.

Party your heart out. Soak up all the adulation.

Then first thing Wednesday morning,
pack your bags and RUN LIKE HELL!

… So what’s your plan,
Mr. President-Elect?

Following the failed policies of FDR and Bush
will only make matters worse.

Why not treat the true CAUSE of this crisis
**– and NOT just the symptoms?**

61 Comments »

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Dear Mr. President-Elect …

The fiscally conservative half of my libertarian heart is surprisingly pleased, too …

Have a great time on Inauguration Day.

Party your heart out. Soak up all the adulation.

Then first thing Wednesday morning, pack your bags and RUN LIKE HELL!

… So what’s your plan, Mr. President-Elect?

Following the failed policies of FDR and Bush will only make matters worse.

Why not treat the true CAUSE of this crisis – and NOT just the symptoms?

61 Comments »

Join the Discussion!

Navigation

Most Popular Posts

View Posts by Author

View Posts by Subject

Search

The fiscally conservative half
of my libertarian heart
is surprisingly pleased, too …

Then first thing Wednesday morning,
pack your bags and RUN LIKE HELL!

… So what’s your plan,
Mr. President-Elect?

Following the failed policies of FDR and Bush
will only make matters worse.

Why not treat the true CAUSE of this crisis
**– and NOT just the symptoms?**