President Obama’s job creation program is short sighted

Today President Obama will be announcing that he wants to use bailout money to fund a new jobs program in order to stem the tide of unemployment rate that is still above 10%. The unemployment rate did decline over the past month, mainly due to people falling off the record. The national unemployment rate is "computed solely from the Current Population Survey (CPS) of about 60,000 households conducted by the Census Bureau. Residents of selected households are interviewed about their work experience. From these responses, the Bureau of Labor Statistics then estimates the size of the labor force and the number of people who are jobless" (http://dli.mt.gov/resources/howrate.asp). While statistics can be altered to establish the view one wants, we'd like to hope that our Government is not doing that as well. One thing the unemployment rate does not take into consideration is if people are working part-time or have taken a full-time temporary job.

That being said, President Obama is want to use the leftover Troubled Asset Relief Program (TARP) funds to go to new construction project and small business loans to assist main street America rebound. "It means that some of that [leftover] money can be devoted to deficit reduction. And the question is: Are there selective approaches that are consistent with the original goals of TARP," said President Obama (http://www.nydailynews.com/news/politics/2009/12/08/2009-12-08_bam_to_toss_tarp_on_jobless_woes.html). The trouble I see in this thought process is twofold. First, President Obama is trading a potential short-term gain (jobs) for long-term debt since new construction jobs will be temporary employment and will not be paid back thus the deficit continues to grow. Secondly, TARP is meant to be used as a slush fund; rather TARP was established to rescue the failing financial sector.

The door was opened though by using TARP funds to bailout the automotive industry. The door needs to be closed on TARP and the money needs to be applied to the deficit. If the president is serious about job growth and sustained job creation then it is time for the Obama Administration to look to nuclear power. Many detractors of nuclear power state it takes 8 to 10 years to get a plant fully functional. All the better I say then. That means that Americans can enjoy 8 to 10 years of constant construction work after which more jobs will be created; jobs that cannot be outsourced. Not only will the building of nuclear power plants bring sustainable, high paying jobs it will assist in the "Green" initiative going on.

As I wrote June 8^th in my blog entry "Obama short sighted on summer job program" that "According to the Nuclear Energy Institute (NEI), a nuclear power plant generates "approximately $430 M in sales of goods and services in the local community and nearly $40M in total labor income." Nuclear power plants employ between 400 to 700 permanent jobs while offering, according to NEI, "36 percent more than average salaries in the local area." NEI estimates that during the construction phase a new nuclear power plant will create "1,400 to 1,800" jobs with a peak of 2,400." Does it not make sense to kill two birds with one stone by ramping up the establishment of nuclear power plants? The data provided by the NEI is for just one plant; imagine the job creation if each state started the construction of two or three power plants tomorrow.

Again, my question is why is nuclear energy not being given higher priority when it comes to Obama's energy and job creation policies? Instead Obama wants to tap TARP, which has its own legal issues to start with, and establish a pattern with TARP as a slush fund. Sort of reminds me when Congress decided to bring SSN into the General Fund. President Obama needs to allow the unused TARP funds to go to the deficit and focus on real job creation; nuclear power.

Executive Pay today, Your pay tomorrow!!!

A dangerous undercurrent is flowing within the Obama Administration to the liberties of all Americans. Set aside your party affiliation, your ideologue, and your racial bias for a moment. A little over 200 years ago several colonials put their lives on the line to ensure we'd be able to live in a country free of tyranny. Those liberties firmly implanted by the Founding Fathers in the Declaration of Independence and the United States Constitution are under assault. The proof is in a headline I read as I pick up my morning paper: Pay Czar to drop hammer on execs. Since when does an advisor to the President of the United States dictate the terms of employment?

That is exactly what Kenneth Feinberg is about to do. Feinberg was appointed by President Obama to be the Treasury's special master for corporate pay this past June. The position did not go through Senate approval process and it appears that the position has wide latitude in handling affairs of corporate pay. According to the Politico "sources within the administration say the decision to cap corporate pay was Kenneth Feinberg's, and his alone." And that "…Obama did not sign off on the pay master's decision. Feinberg didn't even brief the White House on it, the official said, but he briefed Treasury officials instead." Did I miss something since our election last year where Americans voted to allow the Government to dictate pay terms for the private sector?

I understand that drastic measures were taken to right the financial market ship. TARP did nothing to address the root causes of the "financial meltdown"; rather it just threw dollars into the furnace. The plan put forth by Pay Czar Feinberg is to "slash the salaries of their top executives by an average of 90 percent and cut their total compensation in half" (www.startribune.com). Not all companies that received TARP funds will be affected. The companies in question are: Bank of America Crop, American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.

The Obama Administration is hiding behind TARP funds as the gateway for the Government to dictate executive pay terms. To agree with the decision of Feinberg is an acknowledgement of acceptance that Nationalization of the private sector is within the scope of Government. Our Founding Fathers fought against the tyranny of the King of England because of excessive taxation and control within the colony at risk of death. Americans wake up and shed the wool. The reckless independence given Feinberg is shredding the documents and principals our Founding Fathers risked their lives for.

What happens next time when a crisis hits? Yesterday President Obama sent forth a plan to open funds for small businesses. Beware small business owners and take note from the TARP fund recipients. What the Obama Administration giveth, the Obama Administration taketh.

TARP III: State Bailouts!!!!!

The other day Californians went to the polls to cast their vote of five measures. 4 of the measures were to divert or raise taxes while the one that passed restricted to Congressional pay raises to years without budget shortfalls. Now Gov. Schwarzenegger is faced with a government shutdown in the great state of California. Rumors on Capitol Hill are the National Government may bailout California. WHAT!!!

I do not pay federal taxes to help another state because their Governor and Legislature feel the need to over spend and spread socialistic programs. As Rep. Bachus of Alabama said, “Congress does not need to put the American taxpayer on the hook for more losses.” Rep. Bob Filner of Chula Vista, CA, feels a loan guarantee, “sounds like a good idea. We’re providing loan guarantees to everybody else.”

Treasury Secretary Geithner “made no commitment one way or the other” reported the LA Times to Rep. Culberson’s question,”Mr. Secretary, will you categorically rule out bailing out California or any other states with our tax dollars?” Too many states are over spending and realizing that increasing taxes are not the answer to budget woes. Now it will be interesting since California has 53 members of Congress; including House Speaker Nancy Pelosi.

States like Louisiana, South Carolina, Texas, and Alaska told President Obama to keep the stimulus money but have made a few exemptions since their original statements. With all the other socialistic ideals being touted by the Obama Administration, the concept of states throwing away their Constitutional rights for guarantee loans is right up President Obama’s alley. Every company that has been given TARP funds or other assistance has seen Chavez style takeovers.

If States start receiving TARP funds or similar assistance, we as American citizens might as well repeal the US Constitution and prepare ourselves for General Mao and the “Little Red Books”. Any Congressman (woman) that votes for a change in legislation will be casting a vote in direct violation of the US Constitution. The role of the Federal Government is not to provide funding to States that spend out of control and put themselves in fiscal quagmires.

Let California and Michigan be lessons to rest of the states in the Union. High taxes, unbalanced budgets, massive social programs, and over spending leads to unemployment, loss job creating business, civil unrest, and Federal Government takeover. At all levels of Government fiscal restraint is required. We can no longer look to increase taxes, no matter what form they take, to solve our budget owes. It is time for Government to be smaller, work smarter, and strike a balance.

LA Times article: “Federal officials unsure about California bailout” May 21, 2009. Peter Nicholas and Richard Simon.

AIG Outrage: Appropriate or Misguided?

American International Group (AIG) has been front and center over their contractual obligation to pay executive bonuses. President Obama questioned the merits of AIG paying executives a bonus due to questionable lending practices of AIG and the TARP funds accepted. President Obama was not alone in calling in question the payment of AIG executive bonuses. CEO Edward Liddy was brought before a Congressional hearing this past week to explain the bonuses paid to AIG executives and asked for the executive names. To CEO Liddy’s credit he refused to give names out of fear of the safety of the executives and their families. Since CEO Liddy’s appearance several executives have agreed to pay back their bonuses. Executive vice president at AIG’s financial products division saw Jake DeSantis resign and profess that he will donate $742,000 of after tax bonus money will be donated to charity in an Op-Ed column in the New York Times.

DeSantis and others executives at AIG were not obligated to pay back the bonus they contractually agreed to. The fact that many executives at AIG are “willingly giving” back the bonus money at the point of public outrage begs the question where was Congress oversight. Sen. Dodd had originally added a provision to the “Stimulus” Bill that would have prevented, proactively, the issuance of bonuses for companies taking bailout assistance. Sen. Dodd removed the language and why/who asked for the provision to be removed is still an unanswered question.

Why is the outrage not directed at Congress who passed a “Stimulus” Bill without holding a single committee hearing or taking the time to read the bill?

The House of Representative passed, 328 to 93, a measure that would levy a 90% tax on the bonuses for any company receiving more than $5B from TARP. Many contractual questions, ethical, moral, and common sense questions are raised by AIG actions. A bigger question looms.

Does the United States Government posses the ability to pass legislation of this nature?

According to Article 1, Section 9 of the United States Constitution prohibits Congress from enacting bill of attainder and ex post facto laws. A bill of attainder is any legislative act that singles out an individual or group for punishment without a trail per www.techlawjournal.com. Encarta.msn.com defines Ex Post Facto law as a law enacted or decreed after an act has been committed that may be illegal as a result of the new law but was not illegal at the time it was committed.

The measure passed by the House of Representatives, mentioned above, is a bill of attainder. Where is the outcry against the 328 House members that failed to live up their oath to uphold the US Constitution?