Op-Ed: Solutions for the President-Elect
Non-partisan fiscal wisdom is what's needed now.
Barack Obama is the President-Elect of the United States of America. I don't envy him. He must not let the extremists in his party push him to make hasty, short-sighted decisions. President-Elect Obama will need to realize that short-term stimulus packages are the last recourse of weak-minded politicians like George Bush and Nancy Pelosi. Long-term thinking is what's required at this juncture of history.
Barack Obama ran one of the best Presidential campaigns in history. At his first press conference after the victory, however, he looked a bit lost. It reminded me of the final scene in the movie The Candidate when Robert Redford's character has just surprisingly won his Senate campaign and says: "What do we do now?"
Hopefully, one of President Obama's brighter economic advisors, such as Paul Volcker, will sit him down before the inauguration and explain to him that the United States has no money. And not only are we broke, we currently owe $10.6 trillion, with $53 trillion of unfunded liabilities pending. He doesn't have to look back too far in history to see what happened the last time interest rates were at 1%, tax rebates were sent out to consumers, and government spending was ramped up. These actions -- taken after 9/11 -- led to the near-collapse of the system.
It's time for sacrifice, reduced expectations and some straight talk about the future.
The 5% Solution
Tax cuts for 95% of Americans was a great campaign slogan. Forget it. President-ElectObama cannot and should not follow through on this promise. I have no problem with a tax increase on the top 5% of earners. The American public is outraged at the immoral behavior of these greedy, corrupt gamblers -- CEOs of large banks, investment banks and mortgage companies -- who sacrificed thousands of employees and billions in shareholder wealth for their own enrichment.
A partial list of these excessive risk addicts, their compensation, and their impact on America follows:
One glance at this chart and you can see why the vast majority of Americans are furious. President-Elect Obama's populist pledge to increase taxes on only the top 5% of earners resonated with so many Americans because of the men listed above.
These 7 CEOs robbed $1.4 billion of compensation from their companies, while leading those companies to losses of $64 billion and inflicting 75% to 100% losses to shareholders. At least 123,000 workers with families & children have lost or will lose their jobs. Watching Dick Fuld tell Congress he deserved $354 million in compensation after he destroyed the lives of so many Lehman employees is beyond comprehension.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter