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REQUIRED LISTENING: Financial Crisis

OR: How We Got Here…

This American Life has a great episode on the financial crisis. This is required listening, and easily explains the entire situation. HIGHLY RECOMMENDED.

Podcast Download Here, from NPR’s This American Life

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How to Save Volvo

In light of political/bailout fatigue, I’m forcing myself to think of other things. Namely, my favorite car company: Volvo.

A 1970’s Volvo 244 DL saved my life when I drove about 50 MPH into a tree. I didn’t walk away, but survived with no lasting injuries. Car people have said that the car literally kept my legs intact (which many cars do not do at such high speeds, especially old cars like that), and therefore saved my life. I’m hoping to return the favor.

RECENT HISTORY

In 1998, the Ford Motor Company bought Volvo to round out its “Premier Automotive Group“, a set of distinctive higher-market brands which were managed somewhat independently of FoMoCo. The other PAG companies were Land Rover, Jaguar, and Aston Martin. Lincoln, in fact, was shifted into this group. The whole idea was that upscale cars have high margins, and Ford could make money on efficiencies while these companies maintained unique brand images. Ford, incidentally, also owns a significant portion of Mazda, as well.

Volvo was the key piece of this group…

Read the rest of this entry »

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Commentary: Team of Rivals

Doris Kearns Goodwin is zeitgeist right now. The very notion of a “team of rivals” is hot stuff.

But what is best to enable policy? And is Obama actively looking for a team of rivals, or not? AND, most importantly, in the contemporary media era, where many of these supposed rivals are themselves limelight-seekers, how can a President Obama manage the situation?

First: Enabling the Best Policy

Good mangers want the best people in the right positions that enable a smooth flow of work and information. In fact, with all the talk of Bush running the country like a CEO, I wonder if Obama is going to out-CEO him. It looks like it. The best CEOs lay out a vision, get the best possible people to enable the vision, and  With McCain over here, Clinton there, and rumors of Hagel and Lugar flying around, there appears to be no qualified person considered off-limits. By eliminating the “ideology litmus test”, Obama is opening the door for more people.

Chances are, no “heckuva job, Brownie”s this time around.

Second: An ACTUAL Team of Rivals?

Maybe. In his 60 Minutes interview, he implied that he is, he read the book, and sees division as a major problem in this country. I don’t know if this is possible. There is a careful line between creative dissonance and just dissonance, between constructive chaos and simply chaos. Without clear lines of control, and the power to assert authority, and Obama White House could look inept.

The Rahm Emanuel appointment as Chief of Staff is something of a relief, in this matter. Emanuel is an enforcer, by most accounts, and can help manage big egos…

Third: Managing Egos

President-elect Obama’s ego is well-managed by his poise, cool thoughtfulness, warm family narrative, and obvious intellectual abilities. In other words, so far, he wears the robes of power, and they do not wear him (see Bush, George W). This is important: including McCain, Clinton, and various “rivals” (who themselves have and had clear presidential aspriations) in the administration means finding ways to check their personal self-aggrandizement against the success of policy-making and peace-making.

McCain seems the most willing to play the role of constructive thorn, local expert, and general statesman. Clinton has two things that work against her, politically and polciy-wise: 1) Bill Clinton cares a LOT about his legacy; and 2) Hillary Clinton wants to be President someday. Playing second-chair to Obama may be difficult for her/them. Not because of personal character flaws, per se, but because the Clintons know how to use the media to serve their agenda (which is sometimes a personal one, and sometimes a public one). The key here, then, is to make sure the Clinton agenda is brought in line with the Obama agenda. Or, more accurately, that the Clinton agenda is not in conflict with the Obama agenda.

In typical times, this would not be easy. The 2008 Financial Tornado provides an opportunity for a future President Obama to ask EVERYONE to subordinate personal agendas for the greater good. When he was saying this to the DNC in 2004, it sounded, to steal his phrase, “like happy talk.” During his nomination acceptance speech in 2008, it sounded like the talk of someone earnestly trying to recall, and recapture, a time when great people strode the earth with positive purpose. But as 2009 approaches, it’s looking more and more like “the only option.”

This is good, not only for him, but for all of us. We ALL must subordinate our personal good for the greater good. There is an inherent Kennedy-esque equality that Obama has called for. Selfishness and greed wounded us, and this helps “We, the people” to be willing to sign up for his cause of service. Being a a “media whore” looks worse today than it did a year ago, because the limelight now asks for seriousness, and for results. Sarah Palin’s name being increasingly used as a punchline is evidence of this fact.

In the end, the Team of Rivals works as long as there is a cause to fight for together. And that is President Obama’s greatest challenge – to keep us called to causes of greater good, and make us believe the cause is worth fighting for. The moment things get too easy, too black-and-white, and we get too complacent, that is the moment when the team of rivals is no longer helpful.

Filed under: Culture, Philosophy, Politics, , , , , , , , , , ,

On the Financial Crisis, II – the Bailout

http://jtaplin.wordpress.com/2008/09/22/democratic-spine/

I think this says a lot. Thomas Jefferson’s hypocrisy aside (the man was a serial debtor, and the opposite of a “common man”), there is value in looking at government’s complicity in this. Connect that to this:

http://joejolly.wordpress.com/2008/09/22/dems-no-blank-check/

And now we have a funny money party. Simply put, yay.

Here’s the thing, if there is a thing at all: the POINT of government is not to protect the economic system first. It is to protect the people first. Economic well-being of the people happens to be a part of that, but not the only part. The Federal Reserve system is good for the people as long as the robber barons are held in check. The moment we start financing the wealthy is the moment that the system falls apart.

And Paulson wants more cash? To the tune of $700 billion? What have you done for me lately, Henry?

I’ve said this several times, and I’ll say it again: trickle-down economics is a spectacular failure. Giving money to the rich, whether they be rich corporations or wealthy individuals, is equivalent to mortgaging the future for temporary instant benefit.

The point of representative government is to protect the powerless from the powerful, no matter what. Government is the intermediary that says, “I don’t care who you are or think you are, you are equal in my eyes.”

Why is it, then, that someone who represents one of the most polarizing aspects of the wealth-creation industry, can simply demand from Congress $700 billion dollars, no strings attached? Meanwhile, my poor homeless neighbors have to fill out cumbersome government paperwork to get food stamps?

This is absurdity at its best. The Depression is coming, and it will come at the hands of the wealthy attempting to maintain centers of wealth rather than making sure the wealth pays for something better. Like schools, universal healthcare, solving the homeless problem, more police, protecting the environment… For starters.

UPDATE (15:10 EDT)

Says Paulson: “I hate the fact that we have to do it, but it’s better than the alternative.”

I disagree. The alternative – financial firms collapsing under their own egotist weight, is not a bad thing. If you want a free market, with unfettered access to profits, you deserve the consequences of the greed. We do not have to do it.

Plus, Mr. Paulson, here’s the alternative: Since THE PEOPLE are buying out these companies, we should own them. Each American – men, women, and children – is footing approximately $2300 of the bill, we should each be given 23 shares valued at $100 apiece of the government holding company which owns the companies affected by the crisis. Let’s call the government holding company “Baily Hank” (named for Paulson, and with an eye to government naming conventions). Now for a few rules:

  1. Instituting “Baily Hank” means restoring reasonable bankruptcy rules for individuals, and making corporate bankruptcy harder to declare.
  2. Baily Hank will operate like a special mutual fund, owned by the people.
  3. The amount of bailout funds received versus market value is equivalent to the number of seats on the Board of every company THE PEOPLE have. This percentage will then stay constant. For instance, if a company is valued $1 billion, and received $750 million from Baily Hank, then 3/4ths of the seats are controlled by we, the people of the United States.
  4. Companies under Baily Hank must pay out dividends to its shareholders, us.
  5. A company under Baily Hank can buy itself out of the government holding company, but only for equal or more REAL value than it received to be “saved” by Baily Hank. So, if Baily Hank gave $400 million in 2008 dollars to the company, that company’s board must pay that amount or more (in 2008 dollars) to us, the people of the United States.
  6. Certain special rules apply to any company receiving funds out of Baily Hank, like CEO pay rules mentioned in my previous post.
Alternatively, Baily Hank can be a special high-interest loan (prime + 10%). If the companies really want to be bailed out, they need to pay it back. I prefer the above plan better, though. I may be missing some important rules, though. Thoughts?

Filed under: Culture, Philosophy, Politics, , , , , , , , ,

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Idealink by vijtable is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
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