“It will have the power to set tough new rules so that companies compete by offering innovative products that consumers actually want and actually understand. Those ridiculous contracts — pages of fine print that no one can figure out — will be a thing of the past. You’ll be able to compare products, with descriptions in plain language, to see what is best for you.”

That’s President Obama promoting his Consumer Financial Protection Agency proposal. Now let’s see if he can apply that thinking ot the law that creates the agency. The recent attempt at providing better consumer protection for insurance, HR 1880, was over 20,000 words as introduced (ie, before all of Congress got to stamp their “buts” on it).

Tell your representatives at all levels of government you want plain language laws that citizens “actually want and actually understand”. “While I’m not spoiling for a fight, I’m ready for one. The most important thing we can do to put this era of irresponsibility in the past is to take responsibility now.” Tell your representatives that they are not just going to hear that from President Obama on one issue, but from you on all the issues.

We seem top have reached a point where everyone agrees that our health care system is in need of drastic reform. What we can’t seem to reach agreement on is which bureaucracy should be in charge. There are legislators representing the oligopoly known as the Insurance Industry using the FUD factor (fear, uncertainty and doubt) to claim that a government-run health care system would “put bureaucrats in charge of health care decisions that should be made by families and doctors” and “lead to rationed care”. (Quotes are from Rep. Charles Boustany of Louisiana in the Republican radio and Internet message.)

“Put bureaucrats in charge”?!?!?! How is this any different from what we have now? We currently have a bureaucracy making health care decisions FOR PROFIT, not based on creating the greatest good for the greatest number of people. That’s how Americans spend more on health care and get worse results than countries which have adopted a single-payer system. It is how inefficiencies run rampant, because those who cannot afford private medical insurance get their treatment in Emergency Rooms, the most expensive way to handle minor illnesses and injuries.

Yes, your taxes will go up if the government takes over health care. But you insurance bill will GO AWAY! You won’t have to make employment decisions based on fear of losing health care coverage. Small businesses, the engines of economic growth, won’t have to decide between cutting health care or cutting jobs. Are you really that enamored of insurance company profits to think that is a bad trade?

Arne Duncan, the new Education Secretary, is currently “on tour” to get input on reworking the No Child Left Behind education law. I see two basic flaws with the concepts in that law.

First of all, it assumes that standardized tests can measure education. There is only one test that matters for our public schools, and it is measured student by student, not with statistics. Did that student make it all the way through to graduating from high school and after graduating is that student ready to proceed either to college or to the workplace?

Spending 2-3 weeks per year taking standardized tests or sitting in busywork sessions because a large percentage of the school is taking standardized tests does nothing to educate anyone. Piling the stress on both our students and teachers does nothing to educate anyone. A test that the student never gets back to see what questions were answered incorrectly, so that the correct answer is learned, educates no one.

The second flawed assumption in No Child Left Behind is that fixing the mechanics of the education process will fix the problem. As shown by the fact that the “successes” recorded under the law fade as the grade level goes up, education is not rote memorization of a particular set of trivia needed to pass a test. Education is a process that continues for a lifetime. Grades K-12 exist as training so that you can continue that process on your own after that. A 25% high school dropout rate shows our system is failing miserably in that regard.

Yes, we have a problem in our schools, but that problem is a direct reflection of a problem in our society. When I was growing up, “intellectual” was not an insult, and even though Joe SixPack was a loser, not a hero, he wanted his kids to grow up with a better education than he had so they would have a better job than he had. Anyone could grow up to be President, if you were the smartest kid in the class. Nobody asked “Which candidate would you rather have a beer with?” Even candidates you would never in a million years vote for could not be called village idiots. Somewhere along the way, National Pride became National Arrogance, and the decline of our education system is the one symptom we seem to be willing to acknowledge publicly.

The trouble is, we are calling it a cause instead of a symptom. If we don’t define the problem correctly, solving it will only happen by accident. It’s not just educational standards that need to be raised; it is the standard of personal responsibility and pride in putting forth your best effort every day that needs to be restored.

The current incarnation of “No Child Left Behind” is guaranteed to fail us just on its face. “Adequate Yearly Progress” is not something to celebrate. If we only strive for Cs and Ds, our children will no longer be able to compete in a worldwide talent market with countries who push for As.

Several recent stories caught my attention as to why requiring a real “probable cause” to get a search warrant is a good idea, even if law enforcement thinks it’s just an evil plot to make their job harder.

A Boston College computer science major recently had his computer, disk drives, flash drives, iPod, cell phone, and Ubuntu Linux CD impounded by college police investigating whether he might have been the person who sent an email to a college email list claiming that another student is gay.  This seizure happened on March 30, and as of now he still does not have his possessions back.  First of all, why are the police involved at all?  At worst, this is a civil case involving some sort of defamation law.  It is not a criminal case.  The Electronic Frontier Foundation is assisting the “perp” in getting the ridiculous warrant quashed.  The student is suspected of criminal activity because he, among other normal activities for a computer science major, often tested and repaired computers for fellow students, and used Linux as well as the “official” operating system at Boston College.  I guess I need to stop fixing computers for family and friends and using Linux in some virtual machines before my computers get seized because the police and judiciary are so ignorant that they take the word of a disgruntled jerk as “probable cause”.

An even more serious matter (because this one is by design and not just incompetence) is the report by the New York Times April 16 that the NSA has routinely exceed even the ridiculously loose limits set by the Patroit Act and the FISA bill of 2008 in wiretapping Americans talking to Americans without a warrant or even any real suspicion of terrorist activity.  At some point in 2005 or 2006, they apparently came very close to wiretapping a member of Congress on an overseas trip.

We may have passed the year 1984, but George Orwell’s nightmare society where you are always under observation and the word of a neighbor is all it takes for law enforcement to totally disrupt your life is not as farfetched as we would like to believe.

In 2008, Candidate Obama promised to filibuster any FISA bill which included amnesty for the telcos assisting President Bush’s illegal spying on American citizens without a warrant or anything near the probable cause it should take to get one. He then turned around and not only did not filibuster it, but actually voted for the bill.

As President, Obama has promised only to “review” this activity and the use of the states secrets excuse to avoid having to face accountability in court to defend the shredding of the Fourth Amendment.

In arguments in the Jewel vs NSA case, the Obama Department of Justice has gone even further. Besides invoking the states secrets privilege claim, the DOJ argues that the Federal government is IMMUNE from ever being sued for violating privacy laws. They claim that the Patriot Act grants the government immunity from lawsuits filed over violations of the Wiretap Act and the Stored Communications Act.

Franklin Roosevelt said “the only thing we have to fear is fear itself”. Be afraid – be VERY afraid. The Hope and Change seem to be forgotten, but Fear Itself remains. We had to bail out the perps who wrecked our economy (and don’t stop to think about what we are doing, or Fear Itself, Banking Edition will catch you) and we have to give up our freedom and security or Fear Itself, the Terrorist Edition, will kill you.

“All this has happened before and will happen again.” Unless we do something differently (you know, actually Change).

Remember the days when it was legal to read a book to your kids? Apparently those days are gone, if you believe the position of the Authors Guild. They contend that if you buy a book to read with your eyes, you need to pay for it again if you want to turn it into a spoken word performance.  Amazon apparently believes it too.

April 7th, about 300 blind people, plus dogs and kids, gathered outside the Authors Guild headquarters in New York to protest their bogus copyright claim and the fact that Amazon caved into it and disabled the text-to-speech capability found in the original Kindle when they released the Kindle 2.

The Authors Guild is showing the usual short-sightedness typical of the media industry, as it will cost their authors sales in what could have been a way to open up the market without the expense of producing Braille books. Amazon’s willingness to throw their customers under the bus shows where their loyalty lies as well. I’ve worked in distribution much of my life, and siding with your vendor against your customer is just bad business.

By the way, you have my permission to read this article to your kids, and anybody else who will listen. Then email your Barnes and Noble receipts to Amazon along with a copy of it.

I really should have made this number one. This is the place where we can have the biggest impact on economic growth, job creation, the environment, and national and international peace and security. Even if you think global warming is a myth and/or there really were WMDs in Iraq, there is still enough here that makes reducing fossil fuel usage and replacing it with clean renewable energy a good idea.

Last summer, I drove out to Arizona for business, stopping in Albuquerque to visit my sister on the way back. Along both I-20 and I-40, I saw some windmill farms, but I also saw lots of empty space where many more could be. As I got closer to my home, I really wanted to turn around and head back out West. Heading east through Mississippi and Alabama, on any part that is elevated, you see a nasty brown cloud in the sky. Welcome to Georgia Power, a Southern State. They don’t even bother with the delusion of “clean coal”. Only with action at the Federal government level is that ever going to get cleaned up. The Georgia Legislature point of view is “we’re keeping power as cheap as possible even if it kills you.”

That’s the problem, isn’t it? Changing our energy infrastructure means we have to pay more today to get a benefit in the future. It’s not just big corporations who are stuck on making this quarter’s financials look good at the expense of sustainability. We all do it. We have become a nation whose largest product is debt. Too many of us look at purchases not as “Do I have the money in the bank to pay for this?” but as “Do I have enough room under my credit limit to pay for this?”

The way to overcome this is to change the cost structure via taxes, tax credits, and government spending habits. The same Congressmen who decry bailouts as socialism had no problem giving Big Oil tax credits during the years they were making record profits. The US has the lowest gasoline taxes of any developed nation. Companies get special tax treatment for purchases of pickups and truck-based SUVs, the least fuel efficient vehicles out there. We sort of have tax incentives to buy hybrids, but there is a cap on the number of vehicles sold that qualify. All this is backwards!

When gas prices hit $4.00 a gallon last year, we finally started to see a change in car buying habits. Adding $1.00/gallon tax would raise $127 billion dollars in a year, based on Energy Information Administration statistics. Use this money to increase the tax credit for hybrid purchases. As hybrid production increases, the difference in price between hybrids and standard versions will decrease. (The research and development costs are the same whether you sell 1,000 or 1,000,000. The R&D cost per car changes drastically.)

The other piece of this is in the generation of electricity. The technology exists for large scale solar and wind generation. What is needed is the infrastructure to store and distribute power from areas where it can be generated most efficiently to areas where it cannot. We need large scale production and investment in a “smart grid” that can do efficient distribution.

This investment can come from the market, but only if there are clear and consistent policies that investors can rely on for years to come. You can’t expect people or companies to invest in something if they have to fight with Congress each year to keep the rules from changing. There is a company in Ohio that developed a cheaper solar panel suitable and economical for use on private houses. They are doing well and have built a new plant that created lots of new jobs. But it’s not in Ohio. It’s in Germany, where their customers are. Why is it there and not here? Because the German government requires utilities to buy back your excess power from your solar panels at the same rate it costs them to generate electricity.

These tax policy changes are not socialism. This is not “redistribution of wealth”. This is “We the People” acting in concert to prevent individuals from escaping paying for the environmental and health care costs of fossil fuel pollution. As oil usage decreases, the profits of oil producers decrease. On a national security level, this reduces terrorist capital. Oil money is what keeps the House of Saud in business, and splinters of the House of Saud form both the financial and ideological backbone of Al-Qaeda. Oil money funds Iran, which uses the same ideology to promote its national self-interest. If we didn’t need to meddle in the Middle East in the name of securing our energy supplies, we would further undercut terrorist propaganda and recruitment. This in turn would reduce our defense spending requirements, and let us use that money instead to pay down debt and invest in production, not destruction.

“All this has happened before and will happen again.” Unless we do something differently.

It used to be that the term “Bank Heist” meant a gun, a mask, and handing the teller a note that said “Your money or your life.” Now it means bank execs who have been totally reckless in their pursuit of this quarter’s income statement with no regard for what happens next quarter going to Washington and handing all of us a note that says “Your (bailout) money or your economy.” And like the bank robber of old, you still might get shot anyway.  In this case, it means that the banks who took our money under threat of imminent economic collapse by the extinction of credit will still refuse to lend money to the small businesses that drive the innovation that will create the next recovery.

The millionaires will still get their bonuses and their new luxury box offices. The best and brightest whose greedy fraud started this whole mess and wrecked the balance sheets of not only their own companies but every homeowner and everyone with a 401k or IRA as well won’t suffer at all.

The current economic downturn is largely tied to the bubble in the mortgage and housing industries. It started innocently enough. Washington felt that mortgage companies were refusing to lend to blacks based on race, not on statistics. Fannie Mae and Freddie Mac were set up to back up and insure the banks for mortgages they would not have made otherwise. The banks still weren’t comfortable with the idea. So an industry evolved where new companies originated the mortgages and then sold them to other companies who had to actually collect the payments. The originating companies worked on ways to get creative and making people appear to be qualified, and didn’t care if they went too far because they wouldn’t have to collect the payments. The banks were happy to buy the mortgages because they could honestly tell Washington that they had no say in who got approved and who didn’t, and there was insurance for the defaults anyway.

So for awhile, everyone was happy. Since more people than ever were being qualified to get a mortgage, housing prices were rising fast. Builders were in heaven, because the price of housing is not a function of the cost of construction. The same leaky, energy-inefficient piece of crap that was profitable to build at $150,000 was now immensely profitable at $300,000.

Competition in the mortgage industry led to ever more creative ways to get less qualified people into ever more expensive homes lead to even more creativity on the banking side. Subprime mortgages (read: “We know there’s no way in hell these people will be able to keep up with what these payments will be in year two, but they believed us when we told them they could afford it.”) were packaged into derivative securities so opaque even financial professionals had a hard time figuring out what they were buying, but everybody else was making money off of them, so we might as well too. The came the “credit default swaps” designed to protect against the first derivatives being the 2000’s answer to junk bonds. Except that they were ultra junk bonds, because a huge percentage of the gimmicky mortgages either are or will be in default. They are loans that should never have been made.

This grand pyramid scheme started to unravel as early as 2006. But the builders kept building, and those local banks that had most of their business in loans to those builders didn’t adjust quickly enough either. Eventually, the credit default swaps started to be called in, and AIG and other companies could not make their payments either.

Congress and state legislatures keep talking about “stimulating the housing industry” as though we could go back to January 2006 just by throwing dollars at the problem. The problem is that just about every house purchased in the last five years was NEVER worth what was paid for it. The mortgage and mortgage-backed securities scams created an artificially high demand that created artificially high prices.

As for builders: if you didn’t put away anything from the glorious profit years, then you’re as dumb as Congress was during that time running deficits during an economic boom. Tip: use your down time to figure out how your company can make energy efficiency improvements to existing structures a better investment than with anyone else. That’s going to be the next bubble. If you get there before it becomes a commodity, you can become very profitable and make the world a better place.

As for the banks: “Too big to fail”? No, too big to succeed. “The best and brightest”? Not likely. More like the greediest and most selfish. By propping up the dinosaurs, we are making it harder for smaller companies with innovative ideas to get the space they need to grow the right way: by helping to create real wealth, not just paper gains.

So who should we help? The companies that invested heavily in instruments they did not understand? The companies that created those instruments precisely because no one could understand them because anyone who did understand them would never buy them? The people who bought homes they should have known they could not afford? The mortgage “professionals” who told them they could afford them?

Personally, I am tired of bailing out the perps and not the victims. There is a group that is not talked about in all this – the people who bought houses in the past five years who can afford them (even though the scams did make them pay more than they should have) who can’t refinance now at the low interest rates because they owe more than the current market price of the house. These people should be able to have their current mortgage holder adjust the rate/terms on their mortgage without going through thousand of dollars in fees. You should just have to document current employment, and not have ever been behind on your payments. If you have been keeping up current payments, then obviously you can afford LOWER ones. Banks could go a long way toward earning their citizenship back by doing this on their own rather than waiting for Congress to drag this out of them kicking and screaming. This savings for middle class families would then go back into the economy in other ways, like art classes for talented child or seed money to start a new business.

“All this has happened before and will happen again.” Unless we do something differently.

There is much debate at the moment over President Obama’s budget proposal and what it would do to the budget deficit.

First off, some basic economic theory that I haven’t seen mentioned by politicians of either party or any of the alleged “news” media. Capitalism has up and down cycles. It always has, and it always will, because each cycle gets exaggerated by a different bubble or bubbles.  The Cylons have a saying:  “All this has happened before and will happen again.”

So how do these bubbles start?

They start with a new idea that works, which then gets copied enough to become mainstream, at which point it is no longer wildly profitable unless you come up with a marketing twist that adds no actual value to the world other than to move money around. Eventually enough people realize that the emperor has no clothes, and the bubble bursts. It happened with the dotComs, it happened with the Enrons and MCIs. Those were traumatic to a few people and industries, but the economy as a whole recovered quickly enough because the middle class in general was not threatened by those scams. When it happened with gimmicky mortgages, the whole world got screwed. This will be a whole article on its own very soon.

What should government’s role be?

Government’s role in these cycles should be to move “anti-spinward” to try to keep the cycles from going too far off center. When the economy is booming, government should be running at a surplus, so that when a down part of the cycle is reached, there is money available to pump into the recovery. At that point, government runs at a deficit until the economy recovers, at which point government should then pay down any overall deficit incurred and resume building a surplus for the next cycle.

The problem we face now is that during the prosperity of the mid 2000’s our government ran at a deficit instead of a surplus. Never before in history has a country fought two wars while cutting taxes. We gave tax breaks to oil companies while they were recording record profits on historically high oil prices in part caused by the wars we were fighting with borrowed money.

So we are now faced with a situation where the government should be running at a deficit to alleviate the worst economic downturn in a long time. We should be coming together to fix things. Instead we have politicians who would rather things got worse as long as they can’t get credit for fixing them. And a media and public who can’t seem to tell the truth from the blame game (I am referring to the Republican response of “See, he’s being partisan” to Obama stating “I inherited this mess”.)

So we bail out the “too big to fail” corporate perps who got us here, and debate moving forward vs business as usual under the guise of people vs small business. That’s the biggest PR lie since “trickle down economics”.  Senator Judd Gregg (R-NH) said “It is the individual American who creates prosperity and good jobs, not the government.” What he should have said was “It is the individual American who creates prosperity and good jobs, not the government or the large corporations it works for.” Because the rest of his platform calls for business as usual, which means people and small business get to keep subsidizing bonuses for committing fraud.

The Georgia Legislature continued to show its contempt for its citizens and support for its corporate sponsors by passing HB 480.  This bill will eliminate the sales tax and the annual ad valorem tax on cars purchased in Georgia after the end of 2009.  In its place, a 7% fee will be charged for titling the vehicle, with a cap set at $2000.

What’s wrong with this?  For one thing, it means that cars costing $28,571 and up all pay the same fee.  So the biggest tax breaks go to the most expensive cars, and luxury cars and SUVs are the worst offenders in terms of gas mileage and pollution.  Great public policy!  Of course this should be expected from one of the states where the Governor is considering rejecting Federal stimulus money because he doesn’t want the state to be held accountable for how it is spent.

Secondly, this new title fee would apply to private sales of used cars.  Currently no sales tax is charged. Who benefits from this?  Car dealers, and only car dealers.  When you sell a used car to a dealer, you pay less than it is worth.  When you buy a used car from a dealer, you pay more than it is worth.  Private sales benefit both parties involved,  but they rarely involve anyone in a position to buy votes, so guess who’s side the Georgia Legislature is on?

Some have expressed concern that this will cause more dealerships to fail because people wait until 2010 to buy new cars.  Probably part of the plan.  The largest dealerships will have the best chance of riding out the year, and in 2010 there will be less competition and higher prices for everyone.

One law for the rich is alive and well in the state of  Georgia Power.