bazman

A little brain storming for Mr. Obama and Mr. McCain.

October 20th, 2008

The world is a buzz with how the United States government will rescue the world form economic disaster. If only Paulson can get his hands on that $700B he needs, the world will be saved again and we can all go back to watching American Idol or Sara Palin on TV again.

Never mind the fact that this must be one of the largest $ appropriations in the history of the solar system, Mr. Bush is frustrated with congress who is taking more than their allotted Saturday and Sunday evenings, normally assigned to making such decisions.

Enough satire for now. This is serious stuff.

What I don’t hear from our politicians and presidents in waiting is a plan for fixing the problems that got us here in the first place AND exactly how to use the $700B Paulson is demanding from the American people. A list of banks they plan to save would be nice. I know it’s hard work, so maybe a top ten list will do for starters. Call me a stickler.

As far as the plan goes, I have a few brain storm ideas:

1. Create a new agency. I suggest the name Department of Bail Out My A** for Problems I Created in the First Place, DOBMAPICFP. Since it’s a little long, let’s go with Department of Organized Acquisitions, DOA for short. Not to be mistaken for Dead On Arrival. Since new agencies have been created for far less money than $700B, a new agency is in order.
2. Consolidate all regulatory agencies under DOA. This includes SEC, OCC, FDIC, etc, etc. This will insure that they actually start talking to each other and get a clue that something is not quite right when your main source of information is Mr. Bush’s economic speeches and the mortgage company’s D.C. mouth piece (read lobbyist).
3. Pass regulation banning all lobbying in the financial sector. I suggest a minimum 5 year term for individuals busted for lobbying, and a few million $ fine for the companies/organizations they represent. No more free Alaska fishing trips, insurance policies, lunches, pens, pencils, stickers, you get the idea. Zero, nothing, nada. If you’re caught, five years in the slammer.
4. Allocated the funds to the DOA and not to Paulson’s people.
5. Here’s the kicker. Paulson and his friends don’t get to manage the DOA. I suggest we recruit Mr. Buffet (CEO), Mr. Gross (VP of Acquisitions), and a few world experts in managing distressed assets. Their charter needs to be clear:

HERE IS $700B. I’LL BE BACK IN 10 YEARS AND I AM EXPECTING THE FUND TO BE AT $3000 B.

Adjust their pay so that they make $1million for every $1billion they make over $700B. That would be a total potential payout of $2.3B each if they make their $3000 B target. A nice payout for their efforts, and pocket change for the American people. And to keep them on their toes, they will each have to pay $1M for every $1B they lose of the original $700B. So, if they piss away the whole amount, they each owe $700 million.

I am quite sure I missed a few details in the plan, but it’s a good starting point. Maybe the newbies working so hard to inherit this colossal mess could do a little brain storming of their own, because right now it sounds more like brain farting than storming.

 

AIG and the Sleepy American, a story of love

October 20th, 2008

Imagine one day you get an unexpected phone call from your beloved insurance company. “Things are a little tough these days, but our relationships with you are of utmost importance, and we are calling to see how things are going,” they explain. You explain that things were just fine with you, but you don’t recall ever having a good relationship with you friendly caller. As a matter of fact you would classify your relationship over the last several years as problematic. Actually, you would describe it as a relationship where you feel victimized, taken advantage of, and frankly ripped-off.

You recount to your friendly caller the time they wouldn’t insure you because of that pre-existing condition. And the time they increased their quote by 25% because your credit score was below 750. And there was the time they cut your claim by 30% because you forgot to consult with then before it was submitted. Oh, and then there was the time you had to spend two hours a day talking to the claims agent for weeks to get them to pay your claim. And never mind the fact that your premiums have almost tripled in the last 3 years. And there was the time they asked you to leave the relationship because you actually filed a claim. You are finally interrupted by your caller.

“Water under the bridge,” your friendly caller explains. “I really need you to lend me some money. It’s probably more like give me some money, because I’m almost sure I’ll never pay you back. I’m looking for anywhere between $2000 and $2500.” After a few seconds of disbelief, you kindly tell them to kiss your you know what and hang up the phone. Next morning you check your retirement savings account and realize that $2,500 has actually been withdrawn. They did leave you a nice note however. The note says, “Dear friend, sorry to inconvenience you, but based on these extraordinary times of ultra greedy insurance companies, incompetent banks, and sleazy credit card companies, we have decided to commit your hard earned cash to help them out. We know you don’t mind and promise, double promise, hope to die promise to pay you back. We are fully aware of your great sense of confusion and general state of helplessness and have made the wiser choice on your behalf. Lots of love.” Signed, Super smart man Paulson, Genius Bush, and Big Brain Bernake. You shake your head in agreement and go on with your day feeling good about those really smart people making those tough calls, every single day.