ONE THING I REALLY DON’T GET

How is AIG still in business? It’s not that I don’t know about the $170,000,000,000 plus that we’ve given them, I don’t understand who’s doing business with them anymore. For one thing, they sell insurance…what fool still holds a policy with them? They sell car insurance, homeowner’s insurance and the like. So do hundreds of other companies. Why hasn’t everybody switched to GIECO or whoever? Seriously, how can these guys even sell a single policy? Why hasn’t everybody switched? This company is proven to be poorly run and on the brink of disaster. Why does anybody hold an insurance policy of any kind associated with them?

I also know that that portion of the company is being represented as “fiscally sound”. So what? Believe that all you want. It could very well be true. But like I said, why do business with them? Everybody holding any kind of policy with them is directly supporting the entire operation. If you don’t think the entire operation is intertwined you really don’t understand how the world works.

They also have a whole variety of investment funds. Why hasn’t everybody taken all their money out of whatever fund and transferred it to a more stable and obviously better run company? I suppose there are some complicated funds that may make moving them prohibitive, but certainly not all of them. And most certainly not most of them. Who the hell is keeping their money in funds with this company? There are options, all of them better.

By maintaining accounts with this criminal empire, investors are not only encouraging continued government handouts but justifying them. Just take your money out of AIG and put it somewhere else. It’s that simple. It’s that smart.

THE BEST IDEA YET

A month or so ago (on another Blog) I proposed what, at the time, was the best stimulus idea out there. It was vastly superior to the plan that was being instituted at the time but wasn’t perfect (hey, it’s not my job to do that). There were a few flaws in it, but not nearly as many as in the current plan or any other proposal.

After getting some feedback from some very intelligent and rational people (obviously none of them involved in politics) I have developed a totally flawless plan. Here it is in a format that will allow you to copy and paste this and send it to your Congressmen and the President.

(Necessary note: Obviously the current plan has no chance of working, the debt will continue to increase, and even more money will be needed to not fix the current policies so, just like the government always thinks, the money doesn’t matter.)


1) My numbers are rough estimates, but they are based on past numbers thrown out by the government. I imagine they’re not all that reliable for that reason, but I’m using them. According to the US Department of Labor - Bureau of labor statistics, there are 154,650,000 people in the “civilian labor force” and out of that, 9,350,000 are currently unemployed (as of February, 2009). That means 145,300,000 are employed. I’m basing all the logical data on these numbers.
2) With 145,300,000 people in the work force I’m estimating not all them are in dire straits. I’ll guess at least the upper 25% of them are doing just fine. That leaves 108,975,000 working people who can use a little boost (and I’ll ignore those without jobs for the moment). Now, and this is basically arbitrary, I’m going to cut that number in half. If you don’t have a calculator, don’t worry, I’ll explain the numbers as I go. That’s it for explaining the numbers I’ll be using from here on.
3) There are 54,487,500 working people in the US that can use a hand (that’s 50% of the 108,975,000 I mentioned above). The government allows them a “stimulus credit” of $18,000 (tax free) for one year. That comes out to a cost of $980,775,000,000.
4) The other 50% divide up another $980,775,000,000 based on some kind of income scale. I don’t have enough relevant statistics to carve that up.
5) What about the other 25% I cut out? Well, basically, screw ‘em. They don’t fit into the plan.
6) That leaves 9,350,000 people unemployed. Increasing their benefits by 50% up to a maximum of $600/wk. The estimated cost of that for one year would be an additional $22,720,500,000 (at the most).
7) Total maximum cost of the only stimulus plan that could actually work: $1,984,270,500,000. WOW!!! That sounds like a lot, but it’s already cheaper then all the money that’s already been wasted…uh, spent already.

So, what’s all that mean? Sending $18,000 checks to 54,487,500 people? No. What it means is that that those people get a credit of $18,000 with the government. So to explain the “credit” here goes:

1) All those people with mortgages they can’t afford, their payments get made directly from the credit on a monthly basis. That means they don’t have to make a payment and don’t get a pile of money in to their questionable hands but their monthly payment is made. Meanwhile, they can attempt to restructure their mortgage with their bank. If eighteen grand isn’t enough to cover them for at least the next six months, well, screw ‘em, they’re in way over their head. In the meantime, they can save the money they’re not paying out on their mortgage, maybe learn to handle their finances a little better, and inject a few bucks in to the economy.
2) All the people that qualify for the $18,000 credit and aren’t in a position to default get a $1,000/month to pay down their credit cards and other debt. Those in really good shape get to go out and buy a new car or whatever. Again, there’s a good chunk of money being injected in to the economy.
3) Increasing unemployment benefits is just a plain, rational idea. Reforming the system so that a person can take a job and still be supplemented by unemployment insurance would encourage businesses to hire at reduced risk and encourage people to seek employment that they might otherwise avoid. That particular concept is a little too complicated to detail here but, to explain let’s look at this: Unemployment benefits are generally half a person’s gross income up to $405 (a very stupid and inane concept, I agree, but that’s the way it works). So, some guy making $1,000 a week collects $405 and would be a freaking idiot to accept a position paying less. But let’s say, assuming we’re in the real world, he finds a job that pays $600. Take it, or not? Well, if by accepting it, the benefits continue to make up the difference both he and his new employer would benefit. There’s a lot of “tweaking” that needs to be done here and it won’t be easy. It’ll be very, very effective, but it won’t be easy. You may not be able to grasp this concept but it’ll work.

This near perfect plan seems to initially cost $1,984,270,500,000, but that simply isn’t so. Since it’s based on monthly credits and will improve things immediately, it simply won’t cost that much overall. As you may have noticed, the spending occurs on a monthly basis. As things improve (which they surely will this plan) the costs will drop…radically. An initial appropriation of only 25 to 50% would be necessary. As the economy immediately improves it would only be a matter of how dramatically in order to determine if more borrowing would be necessary.

On the overtly positive side, massive amounts of capital won’t have to hand over to poorly run businesses to skim off their share, yet they’ll be getting the cash they think they deserve from their horrible investments. Enough public pressure will be focused on every single member of government so they’ll be forced to do something constructive, and it’ll be vastly harder to grab a piece of the taxpayer’s money for their own purposes. Much, much less money will be wasted and will actually go to the people that need (and deserve) it the most. Yeah, maybe that 25% that I excluded will be pissed, and maybe they are considered to be influential voters, but the Bush Depression has pushed us well beyond that kind of thinking (hasn’t it?). The overall, total effectiveness of, basically, crediting working Americans with $1500/month to aid in the recovery of the economy will reduce the current debt and actually be very constructive in stimulating economic growth.

On the negative side, the executives that run the companies benefiting from government handouts won’t be able to get their taste. In turn, the guys in Congress won’t get their perks. That’s the only roadblock to this vastly superior solution to the current Depression. What does that tell you?

AIG Whiz

I’m more then a little bit surprised about all the fuss being made over the bonuses being handed out at AIG. When ever the government hands out bags of cash I expect the biggest criminals to get their taste before making a show out of putting the dough to the use for which it was intended. Come on, let’s be real…the Federal government gave AIG $170,000,000,000 and less then 1% made in to the pockets of various executives. Not bad for government work I’d have to say.

Did you forget all about the very recently passed “omnibus spending bill”? Congress passed a budget of $410,000,000,000 riddle with some 9,000 “earmarks” totaling nearly $8,000,000,000 or almost 2% of the budget. Besides being blatant taxpayer rip-offs to insure the re-election of the pork’s “sponsors” you have to be severely detached from reality to think a few “crumbs” didn’t indirectly find their way in to somebody’s pocket (or campaign fund). Yeah, there was the requisite skirmish about it and then it all faded away. It faded away even faster then all the graft and corruption in the original stimulus bill.

Back when dinosaurs were still roaming the earth (at least as far as 99% of the general population is concerned) in September of 2008, the Federal government passed an $850,000,000,000 stimulus package. Oh, wait, you probably remember it as the $700,000,000,000 stimulus package that didn’t work. That’s because the extra $150,000,000,000 that was tacked on it were (drum roll please) “earmarks”! That’s right, they now refer to it as the $700,000,000,000 stimulus package because over 17 ½ % of the actual bill was once again more pork being spent by members of Congress to help insure their re-election and a few “crumbs” may have found their way in to somebody’s pocket (or campaign fund).

But that’s ancient history. Now the real problem is all those fat cats at AIG sucking off the public teat which is patently unfair since nobody voted for any of them. Unlike most members of Congress I own a calculator. Unlike all of them, I know how to use one. Right now, today, the only period of history that matters, the very people who bonused themselves $158,000,000,000 over the last five months are now hollering like banshees because $165,000,000 isn’t going in to their pocket or doing them any good.

As far as AIG goes, I’m with the rest of you. I don’t like the fact that taxpayer money is going to the very people directly responsible for igniting the Bush Depression. But I have a whole different problem with them. Well, I have another problem with them. Upon further review it seems that AIG actually was following the Bernie Madoff Business Model. Like it or not, it certainly is starting to look like AIG (and probably dozens of other such companies) are pretty much nothing more then very intricate Ponzi schemes.

Know what part of AIG’s business failed the worst? The part that insured mortgages, hedge funds and other financial investments. When things started falling apart and investors started calling in their policies…lo and behold… AIG didn’t have the cash to cover the losses! Essentially they went out, sold insurance, collected premiums, and paid off with the money they collected. Well and good. That’s the way it works in the insurance world. If you know your stuff, those premiums are where you make your money after the expenses. I get that. But I’m pretty sure (at least I hope it’s so) you have to have the assets to cover the losses you’re insuring. Other wise that would be like collecting money from investors and paying out interest based on the money you collect from other investors. Even more irritating to me is the fact without any such regulation anybody (like me) could start their own insurance business.

It’s starting to appear like AIG isn’t just “too big to fail” but apparently they’re too big to prosecute. No wonder a number of the execs that received bonuses are willing to return them or accept less. They may just want to let sleeping dogs lie.

MORE PROOF YOU'VE COME TO THE RIGHT PLACE

(“If you get four economists together and ask their views on the economy you’ll end up with five different opinions.”-I didn’t make that up, I heard it some where and paraphrased, but it’s one of the most accurate statements you’ll ever read.)

The stock market closed today at 6,926.49, or up about 5.8% and investors are relieved and economists and news pundits are beginning to look even more foolish and ignorant then ever. All the talking heads on television and every other media outlet are now epitomizing how useless and, let’s face it, stupid they are. The “dramatic” increase in the Dow Jones today means absolutely nothing. It means absolutely nothing at all. It signifies nothing. And you have to be completely oblivious to reality to think otherwise. Attempting to read any significance in to this one day only event should be ample cause for ridicule and humiliation for any person idiotic enough to try and do so.

What I’m really trying to say here is the obvious: ever since the on set on the Bush Depression every supposed economic expert has said nothing of significance or consequence. None of them has done any better then say,” the economy is tanking, things will get worse before they get better” and the exact same blathering the guy sitting at the bar two stools down from you has been moaning on and on about all night.

The very same self-proclaimed and/or anointed experts simply don’t know what they’re talking about. And now, I will boldly proclaim that I know more about the current economy then any of them and I will prove it. Here’s a fact concerning the recent rise in the stock market that not one of these morons has observed: the 5.8% increase in the Dow Jones means absolutely nothing to the millions of Americans who have already lost over half their money in their various retirement accounts. It will have zero effect. None. Nobody will get any benefit at all from this increase. And, if tomorrow the market once again “jumps” another 300 or so points, it will have no impact whatsoever on those very same people or 99% of the American public, for that matter. The previous statement now demonstrates my clear superiority on the current situation since it is the only conclusion that can be drawn.

Any one attempting to read any more in to one day’s activity is an idiot. And, while I’m at it, not one of these “experts” saw any of this coming. They all took a beating, probably not as bad as the people they advise and make money off of, but they got hammered, too. So where’s the expertise? Obviously, there isn’t any. And is there a point to ridiculing and shaming all these “experts”? Besides being fun and proving my superiority? Of course there is.

You now have all the proof you need to know that these blowhards are useless. They have nothing concrete or intelligent to say. It is a fact. Therefore, one any one of these incompetents opens their mouth and starts farting with it to “evaluate” the current stimulus package, you now know enough not to listen to them. They simply don’t know what they are talking about.

I make no bones about it. I want the President’s stimulus plan to succeed. Since I’m not a Republican and there’s no advantage in it for me if the country fails, I’d really like to see things get better. Frankly, I know there’s much better ways to inject nearly $1,000,000,000,000 in to the system to rapidly improve things. My plan would actually work but this isn’t the time or place for it (a rough outline of the solution to the Bush Depression is here). But, then again, I’m not foolish enough to detract from the current attempt this early in the game. Just like I’m not stupid enough to find anything significant about today’s stock market rise.