Mr. President, Wall Street IS Main Street

Let's not be naive....

For the past year, Barack Obama and the Democrats have been demonizing the U. S. Banking and Security institutions under the term 'Wall Street". Every issue related to a negative economic impact has been ascribed to the 'greedy' people on 'Wall Street'. Every social ill has been accredited to 'Wall Street'. Job losses are the fault of 'Wall Street'. Financial executives using an effective and legitimate business tool - a corporate jet, are excoriated as examples of 'Wall Street' greed and abuse. The focus on profits and increasing returns has been dubbed 'Wall Street' greed and excess.

But in reality, 'Wall Street' is virtually all American citizens. According to the National Center for Employee Ownership, about 25 million Americans own stock in their employer -- twice as many people as owned stock at all nearly 30 years ago. Meanwhile, roughly half of all Americans own stock -- through mutual funds and directly in brokerage accounts. When you add in the Pension Plan's investment's, Insurance Companies' investment's, Churches and Synagogue investment's, Savings & Loan investments, 401K and IRA investments, and even private trust fund investments, this country's probably close to 100% invested in the stock market - aka, 'Wall Street'.  And President Obama knows all of these things.

Those investments represent people's savings for their children's education; their plans for businesses; their retirement; their donations to charities; their bulwark against poverty and tragic illness; their freedom from government dependency.  Not greed.  

But President Obama appears to be completely blind to that intrinsic linkage between American citizens and the Trillions of dollars of capital that have been invested by those citizens in the equity of American businesses, and that has now become lost.  All he and the Democrats present as the bogeymen are a few high-paid executives who manage the operational engine of America's wealth and long term well-being.

In this morning's press briefing with the UK's PM Brown, here's how he addressed his concern with the massive 40-60 percent loss of our country's wealth these past few months:

"What I'm looking at is not the day-to-day gyrations of the stock market, but the long-term ability for the United States and the entire world economy to regain its footing. And, you know, the stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong.

Now, having said that, the banking system has been dealt a heavy blow. It has to do with many of the things that Prime Minister Brown alluded to: lax regulation, massive over-leverage, huge systemic risks taken by unregulated institutions, as well as regulated institutions. And so there are a lot of losses that are working their way through the system. "

He lay's the entire situation at the feet of 'Wall Street'. Not one mention of the culpability of the government in it's promotion of social policy via Fanny and Freddy; not one mention of Senator's and Representatives blocking legislation to halt those inane policies; not one mention of Senators and Representatives causing run's on banks and insurance companies; not one mention of the foreboding anti-capital and investment statement made by he and the other Democrats throughout the past two years; no mention of the anti-investment tax policies he has just announced; no mention of fixing one of the main causal issues of bank's ill-liquidity, the 'Mark to Market' regulation initiated by the Democrats.

He equates the stock market's catastrophic decline to the un-importance of a political poll, and then announces a reshaping of the nations health care system, and the establishment of an unnecessary tax on carbon, that will devastate the economy even further. Going further, he changes the tax code in a way that will make it less attractive for private capital to invest in the very 'troubled' assets that the banks need to shed.

It seems possible to deduce one of two explanations from these observations: President Obama is either a complete fool, or his agenda is other than fixing the economy.

I choose to believe the latter.

Car Commisars

Outside the box thinking....Literally

You'd think that if one were to enlist a task force to focus on developing a solution to a problem, such as the Detroit Auto manufacturers, some of the people selected would have familiarity with the subject; maybe own American-made cars; maybe even own cars. Apparently that's too colloquial an approach for the Obama White House.

The Auto Task Force established to save GM and Chrysler is filled with "know-nothing's" about the auto industry, except for one guy, and he's been a special advisor to the UAW.  What could go wrong here?

The Detroit News has some more insight on this issue:

Where are the car guys on U.S. auto task force?

It's bad enough that few of the White House auto task force members drive American cars. But the bigger concern is that task force members have little background in the auto industry, and the group seems staffed with people who may be out of touch with industry realities.

Just four of the auto team's 22 members own a domestic vehicle, an initial survey by The Detroit News found. And two of them weren't from the main group of 10 task force decision-makers, but the support staff. Two key members of the task force -- Energy Secretary Steven Chu and White House climate czar Carol Browner -- don't even own cars.

But the backgrounds of the task force members and their staffs and advisers are more troubling.

There is not one auto industry expert on the panel. The closest the task force comes is Ron Bloom, an adviser to Treasury Secretary Tim Geithner. Bloom, a former investment banker, used to be a special adviser to the United Steelworkers president. He may know a lot about labor and steel, but that comes from a supplier's perspective.

The task force is populated mostly with individuals from highly congested urban areas on the East and West coasts. Ten task force members hail from the Washington, D.C. area. Three more come from New York and New Jersey. Another four come from California and one from Washington state.

Only two members come from areas close to Middle America -- Transportation Secretary Ray LaHood of Illinois and Bloom of Pittsburgh. Commerce Department adviser Rick Wade comes from South Carolina. Not surprisingly, they all own Big Three cars.

The backgrounds of the task force members are important because they are supposed to be helping GM and Chrysler executives fix their finances and reconnect profitably with the driving public. Half of Americans still drive trucks. Most of the members of the task force and support staff don't.

Many Americans don't live in congested areas and need larger vehicles to haul their families. Workers and businesses need sport utility vehicles and other large vehicles for their jobs.

If task force members demand that the automakers produce vehicles that don't meet the needs of consumers, they are subjecting the automakers to a death sentence.

The Obama administration is fixated on driving fuel economy beyond the 35 miles-per-gallon standard Congress set to take effect in 2020. Very few vehicles get the 40 miles per gallon or more that the president is committed to achieving. No truck or SUV -- foreign or domestic -- now approaches that standard. Neither do most sedans. Only the smallest gasoline-electric hybrids do.

Tellingly, only one member of the Obama auto task force drives a hybrid -- Environmental Protection Agency Director Lisa Jackson. Perhaps this is a silver lining.

If small hybrids don't appeal to the great majority of the task force, maybe the members and their staffs will realize it is foolish to try to force the market for these vehicles. Hybrid sales have stalled because of the recession and $1.90-a-gallon gasoline, and comprise only 2 percent of all vehicle sales.

Guiding Chrysler and GM back to profitability is a daunting task. We hope the task force members show some humility about their backgrounds and lack of automotive expertise as they make loan extension decisions and determine conditions for any further government aid.