Government

I am concerned that the “success” of healthcare has empowered policy wonks to think government is all about policy. It took a year to hatch healthcare, in that same year closing Guantanimo failed, fixing the securitized mortgages at the banks failed and the big savings from removing waste in government failed.

I am sorry for all the family dairy farms that have closed. Pig farmers got to big because they are too greedy, but it’s sad to see farmers suffer.

Is it possible that you can only deal with one issue at a time? Everything was on hold while you dealt with Afghanistan and then Healthcare.

Do you ever spend time thinking that Treasury, Justice or Agriculture could do with improved leadership? If the answer is never, let me remind you of the greatest one-liner on the failure of management “Heck of a job, Brownie.”

You and your people love policy and basketball. What you need is a Chief Operating Officer who looks after the day to day business of good government. Women are especially good at this, Hilary Clinton and Nancy Pelosi come to mind.

Things you can do to improve is to find team players. Emnual, Pelosi, Clinton, Gates get things done through teamwork. The economy suffers partly because there is no teamwork from the members of your government.

Because of the tough political climate, everyone is thin skinned when it comes to hearing criticism. I suggest you have someone schedule a half hour a week to give you highlights of Inspector General Reports from various departments. Obviously Justice, Treasury and Defense come to mind.

I told you so.

Basic Justice

I perceive a wide gap between the theory of justice as viewed by an Academic and the practice of justice by an elected official. I have no expertise in law.

I am most disturbed by the failure of the People to present an acceptable case to the Courts regarding the Blackwater affair. Incompetence in the Justice Department is a serious failure to Society. This happened on your watch. What’s the point of teaching the theory of Justice, if the People cannot present credible cases?

The other clearly legal failure is providing KSM a fair trial. I don’t understand news reports suggesting that the White House is deciding the forum for KSM’s trial. The mere suggesting of meddling and delay is justice denied.

Another issue is more a failure in management but deals with a legal matter. There was a promise to close Guantanimo in one year. The reason for the closing was on principle. This should not be an empty campaign promise nor false rhetoric. It turns out to be just that. The Academic did not understand the real world issues in practicing justice.

The final issue is pure management. Why are you so behind in nominating judges in to the various courts? This is surely justice denied.

Let’s get real about Justice! That means the mundane matter of managing, making sure people are doing their jobs well. You are not minding the store, and you are supposed to know something about justice never mind the economy.

Basic Economics

To Christina Romer

I wrote you September 5, 2009 about the rising price of peanut butter and jam sandwiches with a glass of milk. I wrote to you because the President doesn’t listen to me. Believe it or not, I think you listen. It helps that you have been right, there hasn’t been any inflation, I’m waiting for the Yuan to rise (you will see a real bump in consumer prices because so much of consumer goods is made in China) and interest rates to rise because of the national debt.

Geithner has pressed on the gas pedal (gas = people’s money) with a heavy foot, oblivious of the amount of gas in the tank (the national debt). He has not fixed the engine (securitized mortgages in the banks) so we use more gas than we need to and we risk to have another breakdown. The cars’ owners took out insurance from AIG for engine troubles, and Geithner paid AIG to payoff the insurance policies without an engine change. Geithner will use the people’s money to pay the owners to fix the engine. I tried to keep it simple for the President to understand, may be he doesn't understand the car analogy either.

Some consider housing as the backbone of the American economy. The
mortgage modification program has provided 17 revised mortgages. Reset
mortgages will continue to trigger for a year. The number of
homes whose mortgage exceeds market value is unsustainably high.
Unemployment contributes to more foreclosures. The administration
has only provided band-aid fixes. They have never defined the problem
and this makes it difficult to arrive at a solution.

The following suggestion was sent to the President, March 8, 2009. I felt it was better than Geithner's plan, 13 months later, we know Geithner's plan hasn't worked.

The government consolidates all bundled securitized mortgages, uses a
task force of Audit firms to re-value them, then re-distributes the
actual mortgages back to eligible holders.
The banks will properly show mortgages in their long-term assets
instead of current assets when they held the securitized slices (An
improper accounting shift to enhance executive bonus's).
We will end up with a mortgage market true to capitalism.

Detailed explanation.

Securitized mortgages means mortgages were bundled then tranches of
the bundle were sold off. Every mortgage is local so this instrument
is invalid.

1)Collect all bundled mortgages.

2)Classify the Mortgages
Within each bundle is a list of mortgages.
All the mortgages must be placed on a master list.
This list must be sub-divided in the following order:
Region/city New England, Rust belt, New York, East coast,
Florida, Nevada etc
Interest rate Standard prime, escalating interest rates including subprime
Current market value divided by mortgage
Mortgagee income to mortgage amount -ability to repay

Within each region you will be able to determine three categories
Low, medium and high risk.

3)Calculate the write down.

4)Collect all holders of bundled mortgages

5)Pro-rate the write down according the portion of the bundled mortgage holding.

6)Classify holders
Banks allowed to issue Mortgages in US and those not allowed.

7)Re-distribute the gathered mortgages to the banks allowed to issue
mortgages in the US.
The US government only has jurisdiction over banks allowed to issue
mortgages in
the US. The other holders will get no mortgages, it's a risk they
took. If this is too severe offer silent partner relationships with
the banks with title.

The redistribution will have to depend on what the data looks like.
Redistribution must be as fair as possible so should be done before a
Judge (We want justice). Ideally regions would be distributed to a
regional bank but markets may have to be tranched among several banks
to fairly spread the risk

Govern

I am not a pundit. My life’s experience guides me. You have to admit that I predicted Massachusetts and Volcker’s big bank restrictions when your people were in denial over both. I have noted many times that my messages don’t connect with you.

Show me you can effectively govern.

Get a hold of the banking crisis. Geithner has pressed on the gas pedal (gas = people’s money) with a heavy foot, oblivious of the amount of gas in the tank (the national debt). He has not fixed the engine (toxic assets in the banks) so we use more gas than we need to and we risk to have another breakdown. The cars’ owners took out insurance from AIG for engine troubles, and Geithner paid AIG to payoff the insurance policies without an engine change. Geithner then uses the people’s money to pay the owners to fix the engine.

The executive branch of government has no duty to admonish judges, just change the law to say corporations do not have first amendment rights. By the way, I am concerned that you are not concerned at the bad press the Justice Department is attracting. The failure to establish a case in the Blackwater affair. The failure to close Guantanamo in one year as promised. The Justice Departments judgment to hold KSM’s trial in New York City. FBI breakdowns in the Christmas bomber affair.

If you don’t know history you risk to repeat it. You sound like Jimmy Carter when you say there is loss of trust. At least, make some plans for a legacy if you have one term. Do something for the downtrodden. Fill the courts with your choice of judges. Do something to make Blacks proud, don’t be an Alberto Gonzales, bringing ignominy to Hispanics. You come across as a coconut – black on the outside, white on the inside who hangs out with white spin masters Axelrod and Gibbs. After one term, Jimmy Carter left no legacy.

I can’t predict 2012 because I don’t know who the Republicans will nominate. An attractive candidate like Michael Bloomberg could handily beat you. A bland candidate could give you a real race (Who ever heard of Scott Brown?) because of your record of public failures and desertion of minority groups and middle class. You are now whining about the Republicans yet overlook your own failures in management.

Good on you

I have admired your humility in victory and your effective counter-punching. Your townhall meeting at the Republican gathering in Baltimore was the finest display of statesmanship I have seen in my life. Good on you.

I have taken my swings at you. I lookout for your counterpunch, on each swing. You haven’t deflected the force of my hits and I consider the Massachusetts’ result a knockdown.

Your townhall performance reminded me of the 2008 election battle.
This is meant as a joke. What do I call your healthcare plan? …. “Lipstick on a pig.”
Ok, in Washington speak, it’s not a joke.

I told you so.

May you live in interesting times

All things considered, you must admit that the Massachusetts’ Senate result really makes my disparaging emails look good. I TOLD YOU SO. My reasoning was that with so many public failures and no wins, you gave the independents cause to look for change.

Out right losers, Geithner, Holder, Goolsbee.
Treading water, Biden, Axelrod, Rouse.

So here are the big changes to be made.

Joint-chiefs of staff James Baker, Rahm Emnual.
It will be the good cop, bad cop tag team, Baker, all things Economic, Emnual everything else. Each, have their own faults, but as a team they can get a lot done. Emnual can learn a lot about getting things done through the side door from Baker but the ideology will be Democratic. Emnual needs family time.

It will be announced that Biden withdraws from the VP slot for 2012 and Clinton will be it. She then comes into the White House. She brings great energy and is passionate about main stream matters, the perfect counter-party to the frat-boy Obama who only works out and shoots hoops. She really knows how to fix things… all things and now she is a proven team player.

Another Republican, Patrick J. Fitzgerald will replace Holder. He is the people’s choice, at least my choice.

I think Geithner should be replaced, if you had listened to me months ago, you will be ready.

Axelrod is having too much fun with the details and lost the strategic focus, lose the moustache and he’s a new man.

Change in character

I’m surprised by you haughty posture in the face of public failures.

Let us start with the Treasury Department.
In February 2009 you said that Geithner would announce in March, your government’s solution to the banking crisis – the questionable value of securitized mortgages in the banks which had frozen credit markets. There was considerable consternation at the long delay because Geithner had been appointed in December. His March presentation was inadequate. I am on record as presenting an alternative in March. A year has passed and there has been no change in the questionable value of securitized mortgages in the banks. I would consider this a public failure.
Newpapers have reported that Geithner authorized public funds to AIG to be passed through to Goldman Sachs before the CDS were valued, for at least 2.5 billion dollars. I submit this is a public failure of fiduciary responsibility.

The government has used public money to help AIG pay banks the CDS claims by the banks on the declining values of the securitized mortgages that they, the banks own. The banks have been paid the insurance policies they placed on their mortgages yet they have not removed these mortgages from their books. Geithner has budgeted taxpayer money to pay for devalued assets to remove them from the banks’ books. Your government has paid the banks twice, once through the CDS payments from AIG and the second time when you relieve the banks of the securitized mortgages. This double payment is a public failure of fiduciary responsibility.

The Justice Department.
The prosecution failed to present a case in the Blackwater affair.
Your promise to close Guantanamo by the end of the year failed and looks like a totally false promise.
Both are embarrassing public failures from an institution meant to protect the public.

My perceived Injustices
I think that it is unjust that milk has to compete against soft drink products because the fructose in the soft drinks, is from sugar beet and corn farmers who are subsidized by the government. The short term benefits MacDonald’s, Wendy’s and Burger King because they buy the cows from dairy farmers who are going out of business. In the long-term, fewer dairy farmers mean the price of cheese will rise, raising the price of pizza. Some suggest milk is healthy for children and the rising cost of milk may impact the health of children. It takes years to re-establish a herd.

I perceive a failure by the Anti-trust Division of the Justice Department to prosecute banks such a Goldman Sachs and J.P. Morgan Chase for anti-trust practices.

I respect Rahm Emnual’s untiring efforts in Government. For every minute of family life you enjoy he has given up an hour of family life with his family. He has been successful. I do not wish to diminish his accomplishment and sacrifice but you must acknowledge that healthcare is a limited success. You can fully celebrate the effort and historic breakthrough. You will be exasperating your haughty posture if you overplay the significance of the bill.

I thought you were a person of character who celebrates with humility and who responds to criticisms with effective counter-punches. We longer see these traits. In my frustration, I am accusing you of haughty behavior in the face of public failure. For me, a wage czar and tax on bank bailout profits are signs of thin-skinned attitudes and sticking with Geithner and Holder are signs of stubbornness. These pettinesses remind me of a G. W. Bush.

PS I keep telling you how the price of bread goes up. The price of breadcrumbs for Christmas stuffing was the price of a loaf of bread two years ago. Are you watching the standard of living index?