Risk Rap

Rapping About a World at Risk

We Deserve Better (2): The Damnation of the Democrats

A few days after President Obama took office I remember him emerging from a meeting at the Pentagon.  The summit was arranged to brief the Commander In Chief on the progress of the wars and to assure the nation that the new president was in-sync with his generals and admirals charged with running the war.  Emerging from the highly publicized meeting America’s new war time president stated “as long as the generals take care of what they have to do, we’ll take care of what we have to do.”  I found the statement to be unsettling.  It implied that  the new administration would not alter the course set by the previous administration insuring that the inertia of Bush’s policies and strategies would continue unabated.  On another level Obama’s statement also seemed to suggest an abdication.  I get nervous to think that the Commander in Chief  has ceded civilian control of the greatest military force the world has ever known.  The decision to pursue war or enjoy peace is too delicate a matter to be left to the decisions of an entrenched military-industrial bureaucracy.  The abdication of assertive control, weather its born from the desire to get along, build consensus or a deep seated need for acceptance has been a disturbing custom of Obama’s presidency and the prevailing characteristic of the Democratic Party.

Obama’s easy surrender to established protocols, processes, precedents has been a hallmark of his presidency.  It exemplifies the failure of the Democratic Party’s oppositional legacy to Republican rule during the two previous Bush Administrations.  At every turn, the Democrats gave in to the Republican conservative legislative agenda with little or no dissent.  The Patriot Act, the blind march to  two unnecessary wars, the dismantling of government oversight and regulatory controls on business, the slavish submission to Republican led expenditures or tax cuts in service to corporate welfare and the tepid lip service to the struggle for social justice made the democrats complicit accomplices in America’s dramatic conservative swing.

The democrats failure as an oppositional force to counter the reactionary juggernaut of neo-conservatism has emboldened the reactionary impulses of the ruthless power elites.  Threatened by economic distress and disintegration of our political institutions, Americas ruling  plutocracy has spawned a malevolent Tea Party movement to crush any progressive populism that may arise to counteract their social position, economic power and political sovereignty. The democrats adamant refusal to stand firmly against the destructive impulses of xenophobia and virulent nationalism has allowed an ugly chorus of fear to become our new national anthem.  The resentful voices of suspicion, intolerance and  exclusion grows ever louder each day as emboldened Falangists and neo-fascists take center stage on a surreal  commercial production of American political theater.

In defense of President Obama his presidential campaign and his administration have expressed a deep desire to pursue a political consensus.  This sentiment is admirable and the ability to form a consensus is an absolute and critical virtue to the health of a democratic society.  The freedom to express differing opinions, voice dissent, air grievances, petition, ability to listen, interest to hear, converse, change opinions and assimilate these competing impulses to form a consensus to express the common will are what makes democracies imperfect yet the fairest expression of governance.  Mr. Obama has sought to pursue and build consensus with an opposition Republican Party that has been nothing short of obstructionist since the democrats assumed control of the Executive office.  Rush “Country Firster” Limbaugh said it best “I hope he fails” set the tone and sealed the intractability of Republicans and any possibility of bipartisan cooperation to deal with the critical issues confronting the nation.

Last summers spectacle of town meetings designed to initiate a national conversation on Health Care Reform devolved into a partisan shouting match and an opportunity for the formation of the Tea Party galvanized by propaganda about a socialist takeover of the economy, death panels, and the idea that President Obama was a fascist dictator.  At this point President Obama still took the opportunity to sit down with the leadership of the GOP in a televised discussion to initiate a dialog.  The Consensus Builder in Chief was rebuffed again.  The democrats responded by killing single-payer and backing down on universal health coverage.  The watered down health care reform bill accomplished an extension of coverage for more, but not all Americans and eliminated preexisting conditions as a disqualification for coverage while also extending the power of insurance companies by making it mandatory that all tax payers purchase health insurance.

This reform is not a significant ground breaking legislative event.  President Obama and the democrats should have recognized early on the inability to work a compromise with the obstructionists in the Republican Party.  As is the case with Cap and Trade legislation, rescinding  Don’t Ask Don’t Tell, ending the Iraq and Afghanistan war, financial services reform, TARP and the economic stimulus bill;  the GOP, “Party of No” has done everything in its power to derail the efforts of the democratic party to address the deep problems confronting America.  The Democratic Party should have leveraged its control of the legislative and executive branch of the Federal Government to push through a program for a new America.  The pressing circumstances of history required decisive leadership and bold ideas to address the complex problems confronting America.  FDR’s “New Deal” or Johnson’s “Great Society” were ideas accompanied by innovative legislation to solve systemic problems.  The democrats tepid response acquiesced to the conservative demands of the GOP.   The Blue Dog Democrats yelped and barked louder then any rabid GOP hound subverting a robust game changing legislative response to the problems confronting America.

The democrats would again demonstrate their timidity in how they responded to the Gulf Oil Spill.  If the free falling economy was the equivalent of economic Armageddon the Horizon Deep Water catastrophic oil spill was its environmental equivalent.  In each case President Obama fashioned piece meal responses designed not to offend “free market evangelists” for fear of being accused of over reaching.  Both instances provided opportunities to mobilize the nation and its significant resources in these titanic tests of national resolve.  In both instances the cojones challenged donkeys failed to seize the reins of state to wield its power.  I am still shocked by images of Jamie Dimon and Lloyd Blankfein pulling the strings on Timothy Geithner like a marionette to exact concessions during the banking crisis.  Or consider the high profile of BP CEO,  Tony “I want my life back” Hayward mounting a $50 million PR campaign to quell any concerns that the benevolence of corporate capitalism will eventually “set things right.”    The Republicans turned this into President Obama’s Katrina with Bobby “don’t spend no stim in Louisiana” Jindal taking the EPA to court for declaring a moratorium on deep water drilling.  And the fattest of fat cats Republican Mississippi Governor Haley “rebuild the casinos first” Barbour shaming Obama to spend a portion of his non- Martha Vineyard family vacation swimming in the pristine waters of the Gulf of Mexico.  It was a PR disaster for President Obama because he failed to act with the resolve or manner of a strong decisive leader.

But now as the midterms approach the democrats must answer to a crumbling alliance of constituencies that they have taken for granted and failed to help.  They are unable to see  constituents as anything other then a demographic voting block devoid of a face, personality or soul.  The democrats see stereotypes not people.  Labor unions are blue collar voters that now approximate 7% of registered voters.  This year the democratic controlled legislature failed to act on Card Check legislation that would protect the right of labor unions to vote and organize non-union companies.  Another important constituency of the Democratic Party is the LGBT community.  The military said it would comply with the decision of a California District Court  that overturned Don’t Ask, Don’t Tell.  Incredibly, President Obama’s Attorney General appealed the decision and asked the court to reinstate Don’t Ask, Don’t Tell.  Teacher unions are also big supporters of the Democratic Party, but many democrats support school vouchers and Charter Schools and seem unconcerned that financial and institutional support of public schools continues to erode.  Working class families and woman  are under severe distress as unemployment rates approach 10%, home foreclosures rise , spiraling cost of living increases spike, the cost of sending kids to college slip out of reach and a marked erosion in quality of life and expectations for a secure future and comfortable retirement evaporate.    The democrats did little to solve these pressing problems save the offer of cheap lip service that they understand their pain.  Charlie Rangel secure in the refuge of his four rent controlled apartments will not feel the cold experienced by a homeless mother and her children this winter;  nor will Hillary Clinton lose any sleep worrying about  deploying Chelsea to fight an incomprehensible war in Afghanistan.

This mid term election democratic candidates are running away from their unpopular president.  They will run on a platform of tax cuts and appear as local election district manifestations of gun toting patriotic Christophanies.  The poverty of a party with no conviction of principle is made plain.  Having no principles, Democrats have not offered a true alternative to reactionary Republicanism.  Nearsightedness has robbed them of a vision for a new republic.  They offer no demarcation with the broken policies that preceded their rule.  The hallmark of their governance has been the complete compromise with an recalcitrant opposition; content to administer a broken and corrupt apparatus rather then chart a new path.  The democrats remain shining examples of self serving politicians retuning to office  on mythical inertia to secure rent controlled apartments while public housing remains an endangered and dear want for many.  They believe themselves to be righteously led by the presiding shame of a president made possible by an epic civil rights struggle who cannot muster the fortitude or conviction to extend the equal right of marriage for one of his liberal constituencies.

We deserve better.

You tube Music Video: Les McCann, Eddie Harris, Compared to What

Risk: democracy, two party political system, liberalism

 

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October 28, 2010 Posted by | Bush, conservatism, culture, democracy, democrats, environment, labor, LGBT, Obama, politics, recession, republicans, social justice, TARP, taxation, Tea Party, unemployment | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Can You Dig It?

Shovel Ready

Shovel Ready

In the first great act of his Presidency, Barack Obama signed the economic recovery package into law today at a jubilant signing ceremony in Denver Colorado. President Obama’s selection of Denver as the location for the signing ceremony was a symbolic gesture that places the focus of the recovery act outside of the political swamp of Washington DC. President Obama is committed to depoliticalizing the recovery initiatives as much as possible. The CEO of Namaste, a small business dedicated to developing technologies to support renewable energy initiatives spoke on how this bill will stimulate small business growth in his introduction of President Obama.

The recovery bill is constructed of a number of tranches designed to stabilize the economy by stimulating growth and creating jobs in much needed infrastructure development projects. Specifically the package includes tax cuts, aid to state governments, funding of emergency social services programs, a project to digitize medical records, alternative energy program funding and a large infrastructure spending program. The aid to state governments and the funding of social service programs like food stamps and unemployment insurance will keep people employed, fed and housed. This will also infuse money and direct spending to help the ailing retail sector of the economy.

The package totals $780bn is a significant infusion of money into the moribund economy but some fear it is not enough. Paul Krugman believes that the stimulus package is not large enough. The Nobel Laureate economist estimates that the economic downturn will shave almost $2tr from the GDP over the next two years. Mr. Krugman believes that a recovery plan needs to approximate that scale to be an effective stimulus package.

In an effort to provide taxpayers with a degree of transparency for the stimulus program, the Administration has created a website Recovery.Gov where all citizens and concerned taxpayers can monitor the progress of the program.

The stimulus package will immediately provide aid to state budgets that are reeling in deficits. States like California have declared a state of emergency to deal with the revenue shortfalls and gaping budget deficits. Without the cash infusion, state governments will be forced to layoff thousands of workers and shut down vital government services that the middle class, working poor and marginalized groups depend on to subsist. The program will also immediately fund shovel ready infrastructure projects are already in process and potentially could have shut down without the passage of the stimulus package.

We applaud President Obama’s initiative and leadership to get this bill passed. We continue to support our President’s efforts to bind the political and economic wounds of our country.

You Tube Video: Section Gang Song

February 19, 2009 Posted by | goverment, recession, Uncategorized | , , , , , , | Leave a comment

Meet Joe the Plumber

The GOP has injected another populist caricature into the election campaign. Joe the Plumber joins Hockey Moms and Joe Six Pack as the holy trinity on whose rocks the Republican Party will make its stand.

Joe the Plumber from the swing state Ohio sounds like he could be from Jersey. Joe the Plumber said he wants to buy his bosses plumbing business. But Joe the Plumber doesn’t like Obama’s tax plan because he thinks it will force him to pay higher taxes on a $250,000 salary he hopes to earn someday. I don’t know of many plumbers that are making $250K a year. Many small business owners don’t have to take a salary or pay themselves a distribution from the profits of the business if it pushes them into a higher tax bracket. Joe the Plumber should see an accountant.

But that is not the point. Joe the Plumber wants to start a business and hire Joe Six Pack. Joe Six Pack needs a job so he can make car payments on the Chrysler minivan that his Hockey Mom wife drives to get the kids to practice.

Every four years The GOP seems to rediscover the common folk with a slew of populist rhetoric to run cover for their trickle down economics. The trickle down economics that have been practiced for the past 8 years have led to the abysmal economic mess we are now fighting to overcome.

McCain’s disingenuous socialist insinuation of wealth redistribution belies the fact that generous unfunded tax cuts, entitlement giveaways and unbridled corporate welfare have all been hallmarks of the recent GOP legacy. A kind of socialism for the rich.

This legacy has contributed to the broken down minivan in Ms. Hockey Mom’s driveway and the inability to afford the kids participation in the way too expensive hockey league. All this has left Joe Six Pack crying in his beer over his lost job and his resetting mortgage rate that he won’t be able to make payments on.

Obama’s tax plan will not discourage small business capital formation. On the contrary, Obama’s plan will reduce the tax burden on the middle class so they can hire Joe the Plumber to replace the old hot water heater and repair the leaky pipes under the kitchen sink. Duct tape just ain’t doing it anymore.

So with all the extra income in the hands of Joe Six Pack and Ms. Hockey Mom they will have the money to spend with Joe the Plumber and he will finally be able to buy that business from his boss.

Joe the Plumber should really be in the tank for Obama. Another GOP administration may forever flush away the possibility of Joe the Plumber’s dream of owning his own business.

Music Video: Plumbing Song, Weird Al Yankovich

Risk: small business taxation, capital formation, tax policy

October 16, 2008 Posted by | elections, McCain, Obama, Palin, politics, pop, republicans | , , , , , , , , , , , | Leave a comment

SME Development Bank

Over the Labor Day Weekend Sum2 announced The Hamilton Plan. The Hamilton Plan is a ten point program to foster the development of manufacturing in the United States by tapping the entrepreneurial energy of small and mid-size enterprises (SME). The plan’s 10 points address sustainable business models, GRC best practices, capital formation initiatives, SME banking, labor union stakeholder empowerment, association syndication, cooperative formation, support for public education and cooperative learning.

This is an introduction to The Hamilton Plan, why it’s needed and the call for the creation of an SME Development Bank (SDB) to facilitate capital formation to achieve the goals of the program.

The Hamilton Plan, named after the first Secretary of the Treasury of the United States, proposes a ten point program to develop small and mid-size enterprise (SME) manufactures. The Hamilton Plan invites business owners and executives, industry associations, chambers of commerce, banks, capital market participants, labor unions, academia, non-profit organizations and governmental institutions to join forces in a concerted effort to support the reestablishment of the manufacturing infrastructure of the United States.

The vital national interest can be served by institutions representing business, labor, local communities and government to join together to foster optimal conditions to incubate and develop SME manufactures. SMEs are a natural strength of the US economy. SME represent largest most vibrant sector of the economy and by combining the entrepreneurial drive and creative energy of SME’s with the pressing need for innovative manufactures; America can reestablish its ascendancy as a preeminent power in the global economy. The Hamilton Plan is designed to provide incentives and encourage the formation of support clusters to develop SME manufacturing.

The Hamilton Plan:

1. Adoption of World Business Council Standards for Sustainable Business

2. Establish Incubators for Targeted Growth Industries

3. Adopt Sound Governance, Risk, Compliance Practices (GRC)

4. Formation of SME Development Bank / Capital Formation Initiatives

5. Partnership Lyceums for Government / Business / Academic Institutions

6. Labor Unions as Preferred Stakeholder / Association Syndication Unions

7. Establish Cooperatives for Technology / Licensing / Commodities / Energy

8. Superfund for Progressive Tax Code / Universal Health & Benefits

Infrastructure Investment / Brownfield Remediation and Reclamation

9. Expand Public Education Funding & SME COOP Program

10. Support Millennium Development Goals

Capital Formation Key to Success

The Hamilton Plan in its entirety is designed to respond to the compounding economic and political crisis that is confronting the United States. The credit crisis, energy dependence, industrial stasis, trade deficits, geo-political instabilities, aging infrastructure and climate change are the result of long term systemic problems that government and industry has failed to address effectively. The Hamilton Plan advocates the adoption of the program to squarely address these pressing issues with the full understanding that it will require the concerted cooperation of all stakeholders to assure the continued development, security and prosperity of America.

The Hamilton Plan requires concerted focus of investment capital to fund development and to make sure that assets are allocated to channels that will assure optimal returns and that equity participation of stakeholders is protected and rewarded. The establishment of an SME Development Bank (SDB) is a structured investment vehicle and corporate institution that will focus, manage and administer capital formation initiatives to incubate and develop SME manufactures.

At its core, The Hamilton Plan seeks to preserve the free flow of investment capital to finance national economic development and empower SME manufactures. The Hamilton Plan is not a substitution nor in any way seeks to supplant the American free market system. The Plan is designed to unleash, pool and focus investment capital. The Plan leverages regulatory capital, compliance and governance. The Plan seeks to achieve strategic economic goals, build wealth and prosperity in US and realize broader goals and objectives to assure sustainable economic growth, nurture innovation,  ecological balance and global competitiveness.

SME Development Bank (SDB)

The SDB would be chartered to assure that capital is deployed to meet appropriate program projects and assure effective stewardship of shareholders capital. The SDB would be the repository for economic and regulatory capital. It would maintain capital adequacy ratios in conformance with Basel II directives. The SDB would serve as a fiduciary to distribute capital through local community banking channels. SDB governance would assure that program objectives, ownership equity, credit requirements, capital allocations, shareholder rights and income distributions are made to SDB shareholders.

Government funding of the SDB would consist of share purchases financed by capital from a national development Superfund. The Superfund would receive tax receipts from a progressive national tax program, budget allocations, licensing and royalty receipts, dividend reinvestment’s and capital gains proceeds from the sale of assets.

Shareholders in the SDB would be community banks, institutional fund managers, state/local/federal government, private equity firms, business owners, company management, associations, labor unions, employees, academic institutions, non-profits organizations. Different forms of capital would be recognized and used to purchase shares in the SDB. For example, local governments can purchase shares in the SDB with tax credits or land grants or infrastructure improvement projects; labor can purchase shares with sweat equity, academic institutions with intellectual capital etc.

Securitization of SDB shares can be created to trade on public exchanges. Any secondary market listings would occur after underlying assets have been properly seasoned. Shares in the SDB would offer terms of extended time frames for investment lockup and share redemption.

Community Bankers as Risk Managers and Distribution Conduits

Community Banks have a critical role as an SDB equity partner. The community bank is the primary channel by which equity and credit capital is provided to the SME. They are front line risk managers and advisors for portfolio companies. Community banks are astute relationship managers. Community banks understand local market conditions and can link assets and service providers to build support clusters and expanded value chains for SMEs. Community bankers will help SMEs focus on capital allocation strategies and support efforts in encourage growth and profitability.

They will provide help in the following areas:

Corporate Governance
Risk Management
Business Promotion, Acceleration and Development
Corporate Advisory Services
Information Services
Performance Evaluation Services

Community banks will be offered regulatory capital relief through its equity participation in the SDB. Community banks will form a joint back office (JBO) to address regulatory capital requirements for its participation and share ownership in the SDB. Community banks must continue fulfill capital requirements for retail banking and other lines of business in accordance with regulatory requirements of its governing agency. State regulatory agencies relating to SME banking regulation, enforcement and inspection would conform to a unified national banking regulatory agency.

Community banks will share in the equity appreciation of the SME and any distributions, dividends or corporate actions the Board of the SDB effects. The differentiation of credit and equity capital participation will be accounted for at the SDB level. Administrators for hedge funds and other Alternative Investment Vehicles have developed sophisticated partnership and shareholding accounting capabilities that can address questions of share class ownership, tranche construction and attributes, asset valuation, distributions and returns.

The community bank in working in conjunction with the SDB will help SME’s effectively manage risk, improve stakeholder communication, implement effective corporate governance that create sustainable business practices to assure long term profitability and growth.

The Hamilton Plan lays the foundation for SMEs to seize market opportunities. SMEs in partnership with community bankers must assess products and markets, business functions and critical success factors. Sufficiently capitalized by the SDB, the SME and local bankers will execute an action plan to support the corporate mission in line with the larger goals of The Hamilton Plan to build wealth for its shareholders and assure the future prosperity of America.

Song: Average White Band: Work To Do

Risk: manufacturing, small and mid-size business, global competitiveness, middle class, national prosperity

September 3, 2008 Posted by | Hamilton Plan, hedge funds, manufacturing, Millennium Development Goals, pop, recession, SME | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | 2 Comments