Save the Planet

October 19, 2008

It is not merely a slogan. A grim reality dismissed as a myth by extreme political factions.

What is a slogan?

Drill baby Drill, Drill now, Drill here ” … until there is nothing left and the entire species vanish in a black hole .

Such political psychodrama far outweighs the speculation of similar outcome from The Large Hadron Collider as the "Big Bang " experiment, conducted to unravel the mysteries of the origin of the universe across the border between France and Switzerland.

The nation, as the pioneer in virtually most frontiers of humanitarian needs is advancing towards the dangerous zone with policies like “offshore” oil and gas drilling… rejecting the real consequences to the environment.

Political rhetoric to satisfy the humanity’s insatiable appetite for energy demands is sweeping across the nation without any rationale or logic.

In the process, the moderate thinkers in the political aisle are forfeiting their commitments to the environmental cause and denying the call from the reasoning faculties within.

The electoral process is a mechanism to promote irrational ideologies to justify victory by any means.

Even, if such radical platform is detrimental to the existence and survival of self and other species on the planet.

It makes one wonder! What is the driving force behind the extremism preventing the political power from exercising judgment for the benefit of all inhabitants on the planet?

The simple response is — the Special interests or the “lobbyists” , the active and most successful operatives in every election.

Their argument as purveyors of the elections from Congressional to “Presidential ” is, electoral process is an investment vehicle to promote Corporate agenda based on profiteering at all expense.

In essence, Corporations determined to maximize personal gains against all odds run the government, supposedly “democratic ”.

The real authority behind the entire management of elections especially in the United States is the Conglomerate operating across the Atlantic, and thus far highly successful in the nomination of their choice of “Presidential candidate ” to advance the personal agenda and devious modus operandi worldwide.

That is why, the recent fear mongering tactics… against a candidate in opposition to such policies, is stigmatized a Socialist and cast as a threat to “Capitalism”.

It is common knowledge that the free market or “Capitalism” is always healthier for the enrichment of ideas and competitiveness to benefit consumer based economies provided,

The monetary gains and welfare are widespread among the investors and consumers alike including the work force/ human Capital, the most important resource for “Capitalism” to succeed.

Therefore, a threshold is necessary to define the role of “Capitalism” in a democracy.

Both extremes — the extensive Corporate role in the legislation and government intervention in the micromanagement of free market system undermine the success of democratic market economies.

In the environmental front, there are serious challenges confronting the global community.

The solutions to the problems created by none other than human force for various economic reasons are within the realm of people power.

Every individual can make a difference in resolving the current environmental crises. The first and foremost strategy is to reflect on the cause and effect factor.

Simple actions like recycling, supply and purchase of environmental friendly products and services, cutting back on carbon emissions and recreating lifestyle would greatly contribute to the cause.

The lifestyle by an average household with modified energy consumption could help the humanity in general.

The recent article shed light on the impact of global warming on other living species.

Government declares beluga whale endangered

By DAN JOLING Associated Press Writer – Thank you.

Article Launched: 10/17/2008 07:38:33 AM PDT

Qannik, a 6-year-old beluga whale, swims in a tank at his new home at…

ANCHORAGE, Alaska—First, there were the polar bears. Now, beluga whales. Washington and Alaska Gov. Sarah Palin just don’t see eye to eye on wildlife protection.

The beluga whales of Alaska’s Cook Inlet are endangered and require additional protection to survive, the government declared Friday, contradicting Gov. Sarah Palin who has questioned whether the distinctive white whales are actually declining.

It was the Republican vice presidential candidate’s second environmental slap from Washington this year.

She has asked federal courts to overturn an Interior Department decision declaring polar bears threatened under the Endangered Species Act.

The government on Friday put a portion of the whales on the endangered list, rejecting Palin’s argument that it lacked scientific evidence to do so.

The National Oceanic and Atmospheric Administration said that a decade-long recovery program had failed to ensure the whales’ survival.

"In spite of protections already in place, Cook Inlet beluga whales are not recovering," said James Balsiger, NOAA acting assistant administrator.

The decision means that before federal agencies can issue a variety of commercial permits, they must first consult with the National Marine Fisheries Service to determine if there are potential harmful effects on the whales.

That has the potential to affect major Alaska projects including an expansion of the Port of Anchorage, additional offshore oil and gas drilling, a proposed $600 million bridge connecting Anchorage to Palin’s hometown of Wasilla and a massive coal mine 45 miles south of Anchorage.

The state does have serious concerns about the low population of beluga whales in Cook Inlet and has had those concerns for many years, Palin said in a statement.

"However, we believe that this endangered listing is premature," she said.

Palin in April successfully lobbied for a six-month delay in a listing decision until a count of the whales this summer could be included in deliberations.

That count showed no increase over 2007 numbers—375 whales, compared with a high of 653 in 1995.

Federal regulators and conservation groups said further delay would be harmful.

NOAA said Friday the Cook Inlet population declined by 50 percent between 1994 and 1998 and "is still not recovering" despite restrictions on the number of whales that Alaska’s native population can kill for subsistence.

It said recovery has been hindered by development and a range of economic and industrial activities including those related to oil and gas exploration.

The National Marine Fisheries Service "will identify habitat essential for the conservation of the Cook Inlet belugas in a separate rule-making within a year," the agency said.

The federal decision pleased environmentalists.

"We can finally focus now not on whether the belugas are endangered, but what we can do to protect them," said Brendan Cummings, an attorney for the Center for Biological Diversity, one of the groups that petitioned for the listing.

Cook Inlet stretches 180 miles from the Gulf of Alaska to Anchorage.

It is named for Capt. James Cook, the British explorer who sailed into the inlet in 1778 on a quest to find the Northwest Passage.

Beluga whales feed on salmon and smaller fish.

They can also eat crab, shrimp, squid and clams. During summers, the whales, which reach a length of up to 15 feet, often can be spotted from the highways leading away from Anchorage, gathered at river mouths, chasing salmon that have schooled before a run to spawning grounds.

Beluga whales’ natural enemies are killer whales, but something else has been keeping their numbers down in Alaska’s Cook Inlet.

Craig Matkin, an independent biologist who has worked in south central Alaska for 25 years, said the delay in the listing had held up a comprehensive research plan to find out why the population had not recovered after subsistence hunting was curtailed.

The concern is not just in numbers, he said, but in distribution. Whales in recent years have been staying in northern Cook Inlet near Anchorage.

"They’re just gone from these areas," he said of his own home near in Homer, near the tip of the Kenai Peninsula and about 100 miles from Anchorage.

"Why they aren’t coming down into this habitat is a question I’d like to answer."

Future development won’t be helpful to the recovery, Cummings said, starting with the noise and pollution associated with industrialization of the inlet, which includes oil rigs off the Kenai Peninsula.

Global warming, changing ocean conditions and higher temperatures in salmon streams may be another factor, Cummings said.

The Port of Anchorage, helped by congressional earmarks secured by Sen. Ted Stevens and Rep. Don Young, has embarked on a $500 million project to double the port’s size and replace its aging docks.

Environmental groups also have expressed concern about a planned coal mine 45 miles from Anchorage across Cook Inlet, where developers propose to mine 300 million metric tons of sub-bituminous coal, roughly equal to the energy of a billion barrels of oil, over 25 years.

That would mean noise and boat traffic associated with building and operating a mine, a potential effect on salmon streams and more warming.

The Cook Inlet beluga whales are one of five populations in Alaska waters and the only one endangered.

Other beluga populations off Alaska inhabit Bristol Bay, the eastern Bering Sea, the eastern Chukchi Sea and the Beaufort Sea.

——————————————————-

Reality CheckGov. Sarah Palin — Welcome to the National Political Arena!

Your performance on SNL last night may well be the cause for celebration as an “anti-environmentalist.

Even though, your judgment or the lack thereof, in the environmental matter is analogous to the rhetoric on your campaign trail invoking fear and Anti-American euphemism against your opponent, the Democratic Presidential Candidate, Senator Barack Obama.

As one among many advocates for the voiceless and defenseless species, I am obligated to pose the following questions to you:

1. What exactly is the issue you don’t understand about the environmental crises?

2. As a self proclaimed maverick , how do you propose to sustain the ecological balance, crucial for your present survival… against the cavalier offshore oil and gas exploration and other projects?

3. Please, explain to the American electorate your bizarre stance in the pivotal issues —

A. Your personal claim, highlighting the foreign policy experience equivalent to the panoramic view of the residence of Russian Prime Minister, Mr. Vladimir Putin from the convenience of your porch while,

B. You choose to remain oblivious to SOS calls from the native species of your home state Alaska.

Perhaps, this could be a revelation for you —

Global warming is real due to reckless policies and irresponsible human behavior.

Save the Planet , for Life matter .

Thank you.

Padmini Arhant

Globalization

October 16, 2008

By Padmini Arhant

The twenty first century paved way to a new era in trade and commerce.

In the economic sector, the twentieth century policies such as NAFTA, CAFTA, and MFN… implemented to benefit the trading nations.

The economic model carried out on trial and error basis with deficiencies within yielded the net outcome.

The long-term strategy was to promote mutual economic growth and development.

There are different views and opinions on these trade policies.

———————————————————————————————

Source: http://news.thomasnet.com/IMT/archives/2004/01/the_pros_and_co_1.html – Thank you.

The Pros and Cons of NAFTA

By Katrina C. Arabe -Thank you.

Here are both sides of this raging debate:

Supporters say:

? The accord has stimulated democratic reform and opened markets in Mexico.

? According to the Bush administration, the agreement has been “improving lives and reducing poverty in Mexico.”

? The administration also claims that NAFTA has led to income gains and tax cuts amounting to about $930 each year for the average U.S. household of four.

? Many of the 20 million new jobs the U.S. generated from 1993 to 2000 can be attributed to the free-trade bloc that NAFTA created, the administration continues.

And negatives such as the escalating U.S. trade deficit and three years of dwindling factory jobs should be pinned on feeble demand abroad and the U.S. recession, certainly not on NAFTA, the administration contends.

? NAFTA brought in a flood of foreign investment and contributed to a 24% rise in Mexico’s per capita income. “NAFTA gave us a big push,” Vicente Fox, President of Mexico, tells Business Week. “It gave us jobs. It gave us knowledge, experience, technological transfer.”

Detractors contend:

? The agreement has taken a toll on both U.S. and Mexican jobs, according to the Institute for Policy Studies (IPS). While real wages for Mexican manufacturing workers declined 13.5%, more than half a million U.S. employees have entered government retraining programs after their companies moved production south or north of the border, says IPS.

? NAFTA has wiped out Canadian social programs, purports IPS.

? The pact has also destroyed Mexico’s small farmers, says IPS, bringing in an influx of subsidized U.S. food imports. In fact, about 1.3 million farm jobs have been lost since 1993, indicates a recent report by the Carnegie Endowment for International Peace. “NAFTA has been a disaster for us,” remarks pig farmer Julian Aguilera to Business Week.

? The Carnegie report also concluded that the pact has generated few new jobs in Mexico and might only be credited for a “very small net gain” in jobs in the U.S.

? The new study also found that NAFTA has been ineffective in stemming the tide of illegal Mexican immigrants entering the U.S. to find jobs. In fact, according to most estimates, the number of Mexicans working illegally in the U.S. surged to 4.8 million in 2000, more than twice the 1990 total.

What’s the Verdict?

So is NAFTA a success or a failure? While its backers and bashers continue to take impassioned positions, many choose the middle ground. In a recent Business Week article, Jeffrey Garten writes,

“When it came to job generation vs. destruction in the U.S., NAFTA’s impact has been pretty much a wash.” And the Carnegie Endowment for International Peace comes to the same conclusion, calling the pact “neither the disaster its opponents predicted nor the savior hailed by supporters.”

————————————

The Pros and Cons of CAFTA –

Source: http://www.allbusiness.com/north-america/united-states-new-york/1057929-1.html
Thank you.

By Cantor, Martin – Thank you.

Publication: Long Island Business News

Now that the Central American Free Trade Agreement-Dominican Republic is law, the question that lingers is whether it benefits Long Islanders.

For certain, CAFTA benefited President George W. Bush and congressional Republicans, who are trying make the GOP the place for the growing and politically influential Hispanic community. This strategy has helped Bush with the regional Hispanic population, who believe that great economic and job growth will result from CAFTA.

There is no doubt that eliminating tariffs and removing trade barriers makes commerce efficient, less costly and more profitable while also bringing hope that the profits would result in better working conditions and higher worker wages. CAFTA will succeed for global businesses, many of which call Long Island home.

But it may not live up to the hype of creating jobs and safer workplaces.

For Hispanics, who are Long Island’s fastest growing minority group, the hope was that the savings generated from eliminating trade barriers would be reinvested in plant and equipment in their countries of birth. The belief was that this reinvestment would expand manufacturing capacity and create a demand for jobs, thus improving living standards for the families and friends left behind.

Supporters of CAFTA say jobs and higher wages would reduce the flow of the undocumented workers because there would be little reason to come to this region in search of better salaries. Additionally, since many of these individuals work on Long Island to send money back home, some of the wages earned on Long Island could now remain here and help the local economy.

However, the reality is that there’s skilled labor at lower costs in the Far East. All of those locations present stiff competition.

With Long Island’s growing Hispanic community becoming an important regional economic segment that desires goods from Central America, one benefit may be that regional Hispanic entrepreneurs can use free trade to import lower cost goods for this expanding consumer market.

This may be the lasting legacy of CAFTA. That the United States, Canada, Central America, Mexico and the Dominican Republic have united in a trading bloc offering Long Island and its Hispanic entrepreneurs an opportunity for new economic growth.

————————————
Source: http://www.fas.org/man/crs/92-094.htm#back – Vladimir N. Pregelj, Economics Division. –

CRS – Issue Brief – Thank you.

Most-Favored-Nation Status of the People’s Republic of China.

On May 31, 1996, President Clinton issued his determination to extend China’s waiver and most-favored-nation (MFN) status for another year; and, on June 21, 1996, he issued a determination renewing the trade agreement with China for another 3-year term (through January 31, 1998).

On June 27, 1996, the House failed to pass H.J.Res. 182, which would have disapproved the extension of China’s waiver and MFN status, thus allowing both to remain in force through July 2, 1997. The House did, however, adopt a resolution (H.Res. 461) calling on various committees to hold hearings and report out appropriate legislation to deal with China on a variety of issues, including trade, weapons proliferation, human rights, and military policy.

Effects of Withdrawing China’s MFN Status —

Termination of China’s MFN status would result in duty increases on about 95% of U.S. imports from China. The cost effect of the increases would vary among the various product groups, but would on the whole be substantial.

———————————–

Source: http://www.cyfuture.com/pro-and-cons-of-outsourcing.htm – Thank you.

Pro and Cons of Outsourcing

Outsourcing has many advantages but at the same time it has some disadvantages that cannot be ignored. So let us look at some outsourcing pros and cons.

Pros of Outsourcing

Outsourcing as a trend has come into major scrutiny by the workers and media alike in the developed countries.

But most economists are sure that this condition is just a temporary one and will die down as conditions develop and people start taking a mature outlook towards outsourcing.

The Outsourcing advantage lies in the fact that it helps companies cut costs and stay ahead in the competition.

Outsourcing also benefits the citizens in developed counties as it provides high quality products at a cheaper rate also with better customer service.

Advantages of Outsourcing

• Companies can save up on operational costs. In fact most companies can cut their operating costs to half by outsourcing

• Get access to cheaper and more efficient labor

• Cut up on labor training cost

• Get access to better technologies at a cheaper cost

• Increase productivity

• Concentrate on core competencies

Companies today want to make use of the outsourcing advantage in order to progress and stay abreast of the competition.

This is the reason why more and more companies irrespective of certain failures are entering the race of outsourcing.

Cons of Outsourcing

Outsourcing is seen by companies in developed countries and workers in developing countries as a boon. But is the situation really that green? Let us look at some disadvantage of outsourcing.

Disadvantages of Outsourcing

• The company that outsourcers can get into serious trouble if the service provider refuses to provide business due to bankruptcy, lack of funds, labor etc

• Outsourcing requires the control of the process being outsourced by transferred to the service provider. Thus the company may loose control over its process

• The service provider in developing countries generally services many companies. So there are many chances of partiality owing to more payment by other parties

• The current employees in the company that outsourcers may feel threat due to outsourcing and may not work properly

• The attitude of people in the developed countries against companies that outsource is generally bad

These disadvantages are the reasons why companies should think twice before outsourcing.
Companies should adopt a planned approach towards outsourcing taking into account the interests of employees and customers alike and come up with a balanced advance.

Outsourcing services simply to beat competition or to follow your competitors can lead to problems in the future.
—————————————–

Source:http://econpapers.repec.org/article/eeejpolmo/v_3A30_3Ay_3A2008_3Ai_3A5_3Ap_3A725-735.htm

GLOBALIZATION AND INCOME INEQUALITY: IMPLICATIONS FOR INTELLECTUAL PROPERTY RIGHTS

Samuel Adams – Thank you.

Journal of Policy Modeling, 2008, vol. 30, issue 5, pages 725-735

Abstract: This paper examines the impact of globalization on income inequality for a cross-section of 62 developing countries over a period of 17 years (1985-2001).

The results of the study indicate that globalization explains only 15% of the variance in income inequality.

More specifically, the results show that (1) strengthening intellectual property rights and openness are positively correlated with income inequality; (2) foreign direct investment is negative and significantly correlated with income inequality but this is not robust to different model specifications; (3) the institutional infrastructure is negatively correlated with income inequality.

The study’s findings and the review of the literature suggest that globalization has both costs and benefits and that the opportunity for economic gains can be best realized within an environment that supports and promotes sound and credible government institutions, education and technological development.
———————————————————————————————–

Review and Analysis: By Padmini Arhant

The current unemployment rate in the United States is 6.1 percent.

All of the above factors combined with the serious financial crises contribute to the decline in the job market.

The current Stock Market volatility is a reaction to the multifaceted problems surrounding the economic infrastructure.

With the interventional policies by the governments and the monetary authorities worldwide, the U.S. and global markets should stabilize slowly but steadily.

Meanwhile, the equity and liquidity markets with cash and lending instruments should facilitate the required rebound in the market.

It was determined that the credit markets’ resistance is from the weak sales projection by the Retail industry, which is related to reduced consumer spending resulting from high unemployment rate.

It is imperative for the business groups to focus on the employment situation now, hurting their operation and survival in the global economy. The depletion of capital resources and credit crunch is one of the factors for the massive layoffs at present.

Restoration of American jobs is paramount to the revival of the U.S economy.

The stabilizing of the U.S. economy will boost market confidence and the performance level.

This would also contribute to the strengthening of the U.S. dollar much required to offset Trade deficits.

The Corporations and the governments must coordinate their efforts to review,

1. Policies like NAFTA, CAFTA, MFN, Outsourcing … with fundamental flaws and reestablish a renewed structure to benefit the American workforce and the international competitive labor.

2. Renegotiate treaties and agreements with WTO members and other agencies…ILO at home and overseas to redesign models with fair trade policies, employment practices and environment laws.

3. Prioritize and protect American jobs and labor laws over shareholders interests and corporate profits. By doing so, the increased productivity would yield the desired stock value for the Corporations.

4. International labor force is equally important in the equation. Appropriate measures … required to curb the exploitation of cheap labor in poorer and under developed nations by the multinational corporations.

5. The developing nations currently benefiting from U.S corporate investments through outsourcing should reciprocate with return investments on U.S. goods and services. The general options are to purchase high-end products and engage U.S. companies for infrastructure projects.

The concern for the loss of American jobs is legitimate. Any frustration and anxiety by the American work force is also normal.

Since, U.S. economy is the foundation of the global economy; idle American work force is counter-productive for Corporations shipping jobs overseas in pursuit of market share of the emerging economies.

The sluggish U.S. economy will not serve well for the global economies dependent on U.S. trade.

On another serious note, the print press and media have an ethical and moral responsibility to portray the global economic environment and the activities in a fair and responsible manner.

Any rhetoric diminishing the economic progress/status and professional talent of other nations such as the one recently cited by the researcher specializing in globalization in San Jose Mercury News article, will hinder the new world order effort — aimed at providing prosperity for all.

Ironically, both the news organization and the consultants fail to identify the real beneficiary i.e. the Corporations in the outsourcing deals and other trade policies.

It would be more appropriate for these individuals to be part of the solutions rather than a problem.

Inevitably, U.S. prosperity is vital for global progress.

Thank you.

Padmini Arhant

Stock Market Stability

October 15, 2008

The Federal Reserve Chairman Ben Bernanke laid out the plans and policies currently adopted as interventional measures to stabilize the stock market.

The comprehensive proposals have the necessary means and strategies to protect the taxpayers’ interests as well as restore investor confidence.

It is important to recognize that the current overhauling of the financial infrastructure that was long overdue, is taking place in complete coordination with monetary authorities and political leadership worldwide.

Although, the necessary steps may not bring immediate recovery to the current crisis, the entire financial system has to collaborate and function both psychologically and physiologically to revive the economy and mobilize the equity and liquidity markets.

It is a consolidated effort and requires all parties concerned to come forward not only in their self-interest but also to ensure long term market security that would promote the economic growth and development.

The Retail industries are projecting sluggish sales around this time of the year due to anticipated reduced consumer spending triggered by high unemployment rate.

This in part is contributing to the lack of enthusiasm from the investors in their active participation in the market.

Again, the domino effect permeates due to resistance from the financial sectors withholding cash and confidence that could otherwise energize the market.

Please stand by for an elaborated version of these circumstances like unemployment and reduced consumer spending with the presentation of expert opinions and solutions to the current crises.

Thank you.

Padmini Arhant

Stock Market Performance

October 14, 2008

The Stock Market came roaring back on October 13, 2008 and was a major cause for celebration across the globe.

The collective and collaborative effort by the “Heads of Government” through G7 and G20 meetings, in coordination with the global monetary authorities like the World Bank and the International Monetary Fund yielded the much-required morale boost in the financial markets. Their immediate action to respond to the crisis is praiseworthy.

Despite the consolidated action to jumpstart the markets, the stock market is struggling to sustain the momentum gained on the previous day. Obviously, the indication is that the measures in the past hours and days to guarantee the smooth functioning of the financial system is not adequate.

A selective opinion highlighting the reasons for the problems currently experienced in the credit markets –

Source – http://www.americaneconomicalert.org – Thank you.

Why Federal Reserve Policy is Failing

Monday, October 06, 2008

Commentary by Thomas I. Paley, Ph.D.

The Federal Reserve and U.S. Treasury continue to fail in their attempts to stabilize the U.S. financial system. That is due to failure to grasp the nature of the problem, which concerns the parallel banking system. Rescue policy remains stuck in the past, focused on the traditional banking system while ignoring the parallel unregulated system that was permitted to develop over the past twenty-five years.

This parallel banking system financed vast amounts of real estate lending and consumer borrowing. The system (which included the likes of Thornburg Mortgage, Bear Stearns and Lehman Brothers) made loans but had no deposit base. Instead, it relied on roll-over funding obtained through money markets. Additionally, it operated with little capital and extremely high leverage ratios, which was critical to its tremendous profitability. Finally, loans were often securitized and traded among financial firms.

This business model has now proven extremely fragile. First, the model created a fundamental maturity mismatch, whereby loans were of a long term nature but funding was short-term. That left firms vulnerable to disruptions of money market funding, as has now occurred.

Second, securitization converted loans into financial instruments that could be priced according to market conditions. That was fine when prices were rising, but when they started falling firms had to take large mark-to-market losses. Given their low capital ratios, those losses quickly wiped out firms’ capital bases, thereby freezing roll-over funding.

In effect, the parallel banking business model completely lacked shock absorbers, and it has now imploded in a vicious cycle. Lack of roll-over financing has compelled asset sales, which has driven down prices. That has further eroded capital, triggering margin calls that have caused more asset sales and even lower prices, making financing impossible for even the best firms.

Though the parallel banking system engaged in riskier lending than the traditional banking system, those differences were a matter of degree. Traditional banks like Washington Mutual, Wachovia, and Citigroup have also all lost huge sums. However, the traditional banking system is more protected for two reasons.

First, traditional banks are significantly funded by customer deposits. Ironically, such deposits can be withdrawn on demand and are in principle even more insecure than short term roll-over funding. However, they stay in place because of federally provided deposit insurance.

Second, traditional banks are significantly shielded from mark-to-market accounting because they hold on to many of their loans. These loans are therefore priced by auditors on a mark-to-realization basis. However, if they were securitized their market value would be significantly lower owing to current disruptive market conditions.

The bottom line is that the banking system is in better shape not because of its virtues, but because of policy. Deposit funding is safe because of deposit insurance. Banks are spared mark-to market losses because of different accounting rules. And the Federal Reserve is providing banks with massive liquidity infusions through its discount window and its various emergency auction facilities.

Policy has therefore ring-fenced traditional banks. But in the meantime it has left the parallel system in the cold, leaving a gaping hole in the policy dyke.

This policy stance reflects the Fed’s continuing attachment to an antiquated view of the system whereby it takes responsibility for traditional banks and nothing else. Such a policy makes no sense and will fail. The Fed encouraged development of the parallel system, and that system undertakes many of the same activities as traditional banks. Meanwhile, failure of the parallel banking system will continue putting downward pressure on asset prices and lender confidence.

The Treasury’s proposed seven hundred billion dollar asset purchase program will help put a needed floor under asset prices. However, it does nothing to tackle the parallel banking system’s roll-over funding crisis that is crimping lending and pushing firms into bankruptcy. That is causing distress to spread far beyond the mortgage market, undermining the ability of any asset purchase program to put a floor under asset prices.

The urgent implication is the Fed (and other central banks) must extend its safety network to include the parallel banking system. Just as the traditional banking system needs liquidity assistance, so too does the parallel system. That assistance can be provided through such vehicles as the discount window and Federal Reserve auction facilities, and it should be allocated to qualified firms able to post appropriate collateral.

A credit based system is a chain, and a chain is only as strong as its weakest link. The Federal Reserve’s antiquated view has it protecting links connected to the traditional banking system while neglecting everything else. That is a recipe for failure.

Dr. Thomas Palley is a widely published economist and was formerly Chief Economist at the US-China Economic and Security Review Commission.
____________________________

Analysis: Certainly, the emphasis is on the oversight with effective policies for the entire financial structure to alleviate stagnation in the liquidity markets. The investor confidence overall is marred with concerns and skepticism despite stunning performance on October 13, 2008.

The resistance from the free market system towards proposed measures is one of the factors for the current trend. However, the necessary action could eliminate many underlying problems surrounding the entire financial infrastructure, contributing to the volatility in the markets.

Meanwhile, the investors’ active participation to restore momentum and strengthening market gains across all sectors is important for the common good and benefit in the short and long run.

An optimistic approach to the crisis with an absolute integrity in the implementation of policies will assist the markets to rebound now and in the future.

Thank you.

Padmini Arhant

Separation of Church and State

October 12, 2008

This is a hot button topic leading to the polarization of views.

Not long ago, the former Speaker of the House, Hon. Newt Gingrich approached me for my viewpoint and support on the above topic.

The original transcript from the former Speaker of the House —

To: Padmini Arhant

Hon. Newt Gingrich
Speaker of the House (1995-1999)

Dear Friend,

I’m sending you this invitation today because I’ve been told that you are an American who agrees
with me that God should not be driven from the public square.

The Founding Fathers wanted it that way, too.

Yet for the last 50 years, ACLU lawyers and left-wing judges have been outlawing God in our
culture.

They insist that “separation of church and state” means that “under God” must be removed from
the Pledge of Allegiance… “In God We Trust” taken off U.S. currency… and all references to God erased from American history textbooks.

Any they’ll get away with this scheme unless people of faith like you and me stop them.

That’s why I need your help to make a vital documentary film called Rediscovering God in America.

This full-length film takes you on a walking tour through our Nation’s Capital — where evidence of God’s role in America’s history can be found on nearly every monument, memorial, and building.

In a moment I will tell you how you can receive a FREE copy of Rediscovering God in America.

But first, let me quickly explain why it’s so crucial that you and I get this movie made, into theaters, and into the hands of citizens across the country.

Over the last 50 years, radical secularist judges have slowly and steadily outlawed references to
God, religious symbols, and public prayer.

For instance, public prayer at high school graduations is no longer allowed.

And the Ten Commandments can’t be displayed in a public school.

These radical secularists don’t want our children to know that the Founding Fathers built this nation on a faith in God.

Worst of all, they’ve just about convinced an entire generation of Americans that even mentioning
God in public is against the law.

But they’ve got it backwards.

The U.S. Constitution guarantees our right to worship God at home… at work… and even at school.

It’s exactly what our Founding Fathers intended.

In fact, Benjamin Franklin proposed that the Constitutional Convention of 1787 begin each day with
a prayer.

George Washington hoped that all nations would “acknowledge the providence of Almighty God and
obey His will.”

And Thomas Jefferson himself warned the new United States to never forget that their “liberties are
the gift of God.”

These words of our Founding Fathers are a testimony to the role of God in America’s history.

But even more evidence can be found on the buildings right here in our Nation’s Capital.

Did you know that “Praise be to God” is inscribed in the capstone of the Washington Monument?

Or that “In God We Trust” is written over the southern entrance of the U.S. Capitol?

Or that an image of the Ten Commandments is engraved in bronze on the floor of the National Archives, where the Declaration of Independence and the U.S. Constitution are displayed?

It’s true. But the ACLU doesn’t want you to know.

They don’t want Americans to see just how much evidence of God’s role in our history is written
in stone here in the buildings of our Nation’s Capital.

When I was Speaker of the House, I saw these monuments and memorials every day on the way
to my office.

But not every American can make a trip to Washington to see these truths for themselves.

Meanwhile, atheists like Michael Newdow — who filed the lawsuit to strip “under God” from the
Pledge of Allegiance — are winning battles in court rooms across the nation.

Clearly, more Americans need to know what’s at stake here.

We can either sit back and let Michael Newdow and the radical secularists remove God from the
public square.

Or we can get Rediscovering God in America into the hands of citizens across the country and prove
once and for all that our Founding Fathers intended for God to be the backbone of our nation.

This documentary is our best defense against the attacks on God in our culture.

But I don’t have the financial resources myself to make such an important film.

And you can bet that liberal Hollywood doesn’t want anything to do with a movie that pays
tribute to God’s role in America’s history.

That’s why I’ve teamed up with the patriots at Citizens United Foundation (CUF) to produce
Rediscovering God in America and get it distributed across the nation.

Now we need your help to get this movie made and ensure that millions of Americans see it.

Only then will we expose and stop the radical secularists’ scheme to erase God from our history.

Will you make your very best contribution to Citizens United Foundation today to support this
vital movie?

We simply can’t do it without you.

Consider the fact that 91% of Americans think that the words “under God” should stay in the
Pledge of Allegiance.

Unfortunately, not enough of those 91% are doing anything to protect the Pledge.

Meanwhile, atheist Michael Newdow is working on more lawsuits, including one to erase “In God We
Trust” from U.S. currency.

I can’t sit idly by and let Michael Newdow, the ACLU, and liberal judges outlaw God from our nation.

And from what I’ve been told, you care too much about America to let this happen either.

That’s why I’m hoping you will make the most generous gift you can to Citizens United Foundation
today for their Rediscovering God in America movie campaign.

If you’ve heard of Citizens United Foundation, then you know this patriotic group has made many
other important documentaries, including:

** Border War — which exposed the war raging on our nation’s border as illegal immigrants and drug
smugglers swarm unchecked into America.

** ACLU: At War with America — an eye-opening look at the ACLU’s war on religion, patriotism, and
old-fashioned family values.

** And Broken Promises — which chronicles how the U.S. has been forced to finance 60 years
of scandal, waste and greed in the United Nations.

Now will you help me and Citizens United Foundation keep God in the public square — where the
Founding Fathers clearly wanted Him — by sending an urgent gift today to help produce and
distribute Rediscovering God in America?

CUF can’t get this important movie out without the help of you and other patriotic Americans.

I’m specifically asking you for a gift of $35, $50, $75, $100, $250, $500, or even $1,000.

If you can give as much as $35, you will receive a copy of Rediscovering God in America in DVD
format free for you and your family.

Not only will you enjoy this walking tour of our Nation’s Capital (hosted by me and my wife, Callista),
it will give you a chance to share the truth about God’s role in America with your children and
grandchildren.

Citizens United Foundation is run by my good friend David Bossie, who I’m proud to say is making
documentaries that the Hollywood elites refuse to.

Citizens United Foundation is funded wholly by American patriots like you and me. They don’t receive
one dime of federal funding.

Are you willing to give at least $25 or $35 to help make this important film — before the liberals erase
God completely from our public square?

You can understand why I am so committed to getting this movie made and into the hands of folks
across the country.

So won’t you please accept my invitation to be a part of this special movie — and refute the liberals?

I need to know right away. Production is already underway and we need to know if we have the
budget necessary to finish.

I’ll be watching for your reply in the next few days.l

Thank you for helping keep America a nation under God!

Your friend,

Newt Gingrich
Speaker of the House
(1995-1999)

P.S. Remember, if you can send a generous gift of at least $35, you’ll receive your very own copy of
Rediscovering God in America in DVD format.

And the next time someone tells you that God doesn’t belong in the public square, you can show them
a copy of this movie and proudly say, “Yes He does! ”

Thank you again for your prompt reply and for sending whatever amount you can today.

———————————

My response to the above request.

Hon. Newt Gingrich
Speaker of the House
(1995-1999)
Citizens United Foundation
P.O. Box 96408
Washington, DC 20090-6408

Dear Mr. Speaker,

Subject: “Separation of Church and State”

It is an honor to receive your invitation to discuss on the above subject.

There are different views and claims regarding the “Separation of Church and State”.

I think the diverse opinion is important to reflect “democracy.”

My understanding of “The Founding Fathers” approach to every issue in the “Constitution” is to emphasize the role of democracy then, and in the future.

Strong principles, values and ethics form the foundation of this great nation, “The United States of America.”

Having pioneered “Democracy”, the democratic values such as the “freedom of speech” is one of the fundamental rights of every citizen.

It is common for any democratic society to represent views from religious groups, atheists and agnostics alike. Therefore, it is not surprising to witness the political discourse about religion.

However, it appears that “The Founding Fathers” had a purpose behind the references to God in the Pledge of Allegiance and “In God We Trust” on U.S. currency and similar evidence in public focus.

The great minds and visionaries were thoughtful in preserving the rights of both believers and non-believers while drafting the Constitution.

The elimination of the references to God deprives the believers of the “individual right” to practice faith any time.

Thus, granting non-believers exclusive right to their belief, typically in direct contradiction to the definition of democracy in the U.S. Constitution.

The “Separation of Church and State” is vital to curb the strong imposition of religious views and traditions against others will.

Such provision, effectively protects the non-believers’ rights.

At the same time, the prohibition of the reference to God in the public square is an infringement upon individuals of faith since,

The non-believers have a choice to ignore the reference both in the Pledge of Allegiance as well as on the U.S. currency.

Choices signify core democratic value.

In this particular instance, the absence of it does not serve any logic.

Even when applying the mathematical concept to this issue, the desirable solution for value is to have a variable rather than a constant especially if the constant is “Zero” or “nothing”.

Hence, adherence to the “status quo”, provides probability and flexibility in the most sensitive matter.

In conclusion, as a secular spiritualist and a patriotic American, I support the democratic cause to protect the believers’ right of all faith and denomination.

I appreciate the opportunity to present my views in this regard.

Thank you.

Sincerely,

Padmini Arhant

Investment Prospects

October 8, 2008

Existing and potential investors should view the current stock market situation as an excellent opportunity for investments in different sectors. They range from blue chips to housing and manufacturing industry. All sectors are bound to get a major boost from innovative technology and major breakthroughs in science this year alone.

With the energy crisis, there is great enthusiasm and capital infusion into manufacturing clean and green energy products. The automotive and energy companies are involved in research and development in deriving energy independent solutions to the global problem.

The recent legislation of the “rescue” plan involving tax credits for solar and wind based manufacturing companies is a window to promote renewable energy products and services. This is one of the best measures by Congress and deserves praise for the action. It must also ensure that the tax credit benefit trickles down to retail consumers as well. More is required in addressing serious environmental issues at both national and global front.

Despite the doom and gloom in the housing sector, all those investors with surplus cash have enormous opportunity to invest in real estate for long-term gains and perhaps contribute to the revival of the housing market. The energy sector is involved in alternative energy programs to combat the global energy crisis. Therefore, there are opportunities in this industry as well.

The technology sector is robust with a wide range of activities throughout the industry. The high tech companies are competing with one another in the innovative technology areas such as high -end microprocessors other hardware and software products challenging the technological pace more than ever.

There is never a dull moment in the biotech industry with major breakthroughs in modern medicine like “sequencing DNA and Human Genome Project”. The stem cell research is another area drawing deserving attention and investments. The pharmaceutical companies’ progress in research and development of new drugs is in synchronization with the biotech advancement.

The finance sector is not going to fall apart as they are the “gateway” to the flourishing of “commercial sectors”. The financial institutions with necessary regulations and stopgap measures are attractive in many ways. It must address the foreclosures effectively and cooperate with the government in expediting the financial liquidity in the housing and commercial sectors.

Investors must get into a buying frenzy and not the other way around, as the prospects are far greater in the near future and an opportunity for people of the United States to own their assets rather than leaving it for foreign venture capital.

The United States as a nation has never failed in its endeavors and will never fail now or in the future. It is important for the people of the United States to restore confidence in their ability to rebuild a great nation that has accepted a great many challenges in the past, emerged successful in all frontiers and shared the progress and prosperity with the rest of the world.

The present time may appear to be tough but this nation has sailed through rough seas and the “Superpower” status is testimony to the resilience and intellectual power of the people.

The United States has every reason to be proud of all its achievements. The future ahead of us is bright, with a remarkable work force prepared to overcome all obstacles in their path to success and glory.

Thank you.

Padmini Arhant

Foreclosures

October 7, 2008

The stock market performance particularly on October 6 and 7, 2008 is a strong indication of the lack of effective measures to address the problems that triggered the financial crisis and subsequently the economic meltdown. The tumbling of the stocks due to aggressive selling day after day is from panic and deep concern among investors across the globe.

The “Treasury” has secured the financial package for the “rescue” plan as an instant relief to the current crisis. However, in preparation to relieve the financial institutions from “bad debts” and “toxic assets”, it has failed to look beyond the “Corporate” horizon. The immediate priority is to lift the nation from the burgeoning “housing market” crisis i.e. “foreclosures” and provide relief to the “homeowners”.

The Congress must act now on bipartisan basis to implement “Moratorium” on the “foreclosures”, and vigorously re-enact the “Bankruptcy provision” to relieve homeowners across the nation. It should not be at the discretion of the financial institutions that are primarily responsible for the mortgage crisis to resolve on their own terms and conditions. As stated earlier, the “foreclosures” are the result of the multi-tiered structures in the financial and real estate industry engaging in unethical practices and reckless conduct with no oversight.

If the “rescue” package does not involve the solutions to the problems of the current economic and stock market turbulence, the entire effort by the Congress is futile. Therefore, it is necessary for government intervention to relieve all homeowners dealing with “foreclosures” and delinquency on their mortgage payments due to the sudden increase in interest rates initially offered as “teaser” rates on the subprime mortgage loans.

The urgent and direct focus on the “housing market” is the only prudent economic strategy available to revive the “housing sector”, one of the structural foundations of the economy. The consistent decline of “home values” is a major factor for the “economic stress” with a ripple effect on the entire financial and commercial sectors.

The “housing” and “energy” industry are fundamental components of the economic infrastructure. Hence, the rescue plan must address the “cause” of the current financial crisis i.e. the “foreclosures” besides facilitating financial liquidity in the commercial sector to stimulate economic growth and development. In terms of the economic stimulus package under consideration, the “energy” subsidies would highly benefit the economy and ease the burden on the “main street” anticipating high “energy” costs in winter.

The impending purchase of the mortgage-backed securities under the “rescue” plan must follow the guidelines to benefit the investor i.e. the taxpayers in both the short and long run. It is important to address effectively any concern by experts such as “The HOPE for Homeowners Act needs to pay less than 36.5 % of the face value of the subprime mortgage backed securities. If more is paid the government loses money in the long run and owners of the securities profit now” and any loopholes that might hamper the deal in the investor i.e. taxpayer’s favor must be eliminated as a safety measure.

The consensus on the legislation of the bill “HOPE” for The Homeowners Act, 2008 is promising and expected to provide relief to an estimated 400,000 families. It is important to follow through the process and ensure transformation of “HOPE” into reality for “homeowners” severely hit in the “housing” market crisis due to massive “foreclosures”.

“Congress” and the financial institutions could reverse the current stock market decline through diligence and prudent economic strategy combined with robust fiscal policy and financial measures to boost investor confidence. Meanwhile, domestic and foreign investors must restrain short selling in the wake of current crisis that is contributing to the pandemonium in the stock market.

The stock market turmoil will cease upon following all of the above measures with no further procrastination to protect the interests of all i.e. the “main street”, the “wall street” and the global market.

Thank you.

Padmini Arhant

Congress Adjournment

September 29, 2008

Review of the current article on;

Congress moves to adjourn with no deal on AMT

By JIM ABRAMS, Associated Press Writer 25 minutes ago – Thank you.

WASHINGTON – The House prepared to adjourn for the year Monday with no deal on a major tax relief package, increasing the odds that businesses will lose out on critical tax breaks and millions could get hit by the alternative minimum tax this year.

House Majority Leader Steny Hoyer, D-Md., suggested that it might be next year before consensus can be reached on a tax initiative that includes adjusting the AMT, providing tax relief to disaster victims and extending tax credits for renewable energy development, business investment and individual education and child care costs.

Lawmakers in both the House and Senate stressed that the bill would create tens of thousands of jobs and contribute to the nation’s energy independence. But House Democrats insisted that more of the package, totaling $138 billion in House bills, be paid for so as not to increase the deficit. Senate Republicans, averse to new taxes, said any changes in the Senate-passed tax bill would kill the entire package.

The House “has taken the morally and fiscally responsible position,” said Rep. Mike Ross, D-Ark., a leader of the 49-member Blue Dogs, a group of fiscally conservative Democrats. Meanwhile, “Republicans in the Senate continue to hold up this important legislation,” he said.

As Ross spoke, across the Capitol Senate Majority Leader Harry Reid, D-Nev., tried to bring up a House-passed bill dealing with renewable energy and extension of business and individual tax breaks that expired last year or will lapse at the end of this year. Republicans objected to consideration of the bill.

Reid acknowledged that “we can’t get it done” because Senate Democrats don’t have the votes to move the bill without GOP cooperation. He said he hoped the Blue Dogs “would understand we are not trying to embarrass them or anyone else.”

Hoyer, joining the Blue Dogs at a news conference, said “there’s not an intention” to return to Washington after the House votes on the financial bailout bill and adjourns Monday afternoon.
“I’m going to continue to work with Sen. Reid to see what can be done even if it is next year,” he said.

That delay would be a blow, at least temporarily, to a wide group of business and individual taxpayers. Without congressional action, those affected by the AMT, originally aimed at just a few very rich tax dodgers, would grow from around 4 million to up to 26 million. Those hit by the tax, most earning less than $200,000, would pay an average extra tax of $2,000.

The solar industry alone has estimated that it could create more than 400,000 jobs if it receives an eight-year extension of its investment tax credit.

“With hundreds of thousands of American jobs and billions of dollars in clean energy investment at risk, we urge congressional leaders not to leave for the election recess” until reaching an agreement, the CEOs of national hydropower, geothermal, solar and wind energy associations said in a statement.

Business groups have warned of serious repercussions if Congress does not renew the R&D credit, which expired at the end of last year, and various advocacy groups have pleaded for renewals of individual tax breaks affecting those paying college tuition, those from states with state and local sales taxes and teachers with out-of-pocket expenses.

The Senate last week, on a 93-2 vote, passed a massive package that included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewal energy incentives and extensions of expiring tax breaks. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.

That wasn’t enough for the House, which insisted that there be complete offsets for the energy and extension part of the package.

Fiscal irresponsibility was a major factor in Wall Street’s meltdown and the need for Congress to step in with a bailout plan, said Rep. Dennis Cardoza, D-Calif. “It’s time for us to say no more.”
The House included steps to boost tax revenues from the oil and gas industries and close loopholes used by hedge fund managers and corporations to avoid taxes on their overseas incomes.
Senators also included in their bill a far-reaching measure to ensure parity in insurance benefits for mental health problems.
______________________________

Review and Analysis: The democratic society exercise voting rights to elect a representative in Congress and Senate to address issues affecting their daily lives and pass necessary legislation to primarily benefit the people through businesses and other economic infrastructure.

The legislators’ “priorities” from the above article should be of concern to the constituents. Their decision to leave for the election recess “after having returned from a long recess in August”, without reaching an agreement on issues like energy independence, tax relief to millions in small businesses, education and childcare costs reflects minimal importance to major economic crisis.

With election around the corner, it is important for legislators to recognize their obligations to the electorate and fulfill the commitments in restoring the nation back on track. In a gloomy economic climate, that is saddled with multi-trillion dollar debt conveniently passed on to the hard working lower and middle income groups struggling to meet ends, vacation should be the last thing on the mind of the lawmakers.

The electorate should demand that their elected officials resolve all of the above issues related to tax initiative that includes adjusting the AMT, providing tax relief to disaster victims and extending tax credits for renewable energy development, business investment and individual education and childcare costs with no further procrastination.

To quote the House Speaker “Nancy Pelosi” at the announcement of bailout deal “The Party is over” not just for the “Wall Street” but the entire “Power” specifically elected for policymaking and solving problems confronting the nation at all fronts.

When the “Presidential candidates” are advocating “performance based” salaries for “teachers” and others , the same principle should apply to “Washington” and “Wall Street” that are primarily responsible for the current economic mess.

The voter frustration and disappointment with “Washington” and “Wall Street” should be clearly demonstrated in the forthcoming electoral process.

Thank you.

Padmini Arhant

Economic Security

September 28, 2008

The legislators are currently addressing the financial crisis confronting our nation and it appears that a consensus has been reached to bailout the Corporations from the burden of bad debts. According to the lawmakers, the “bill” is structured to largely benefit the taxpayers and assist with the stabilization of the financial market.

It is important to recognize the fact that the twenty first century economy is a global economy and the investments are tied to one another directly or indirectly and traded in the global markets. Therefore, it is vital for the U.S. economy to remain stable and provide necessary market assurance to both domestic and foreign investors with stakes in U.S. investments.

The other important factor for the unprecedented government intervention in a “free market” environment is to eliminate loopholes to avert such catastrophe in the future. When the actual agreement proposal is presented to the taxpayers, it should reflect the absolute protection of the taxpayer’s funds and profitable return on any investments.

At the same time, politics should not take precedence over “American taxpayers” interest in terms of “Appropriation of funds” for a certain political faction like “ACORN” or for that matter a “private sector” from the “Wall Street” with any misrepresentation to provide insurance on the “mortgage backed” securities with no prospective buyer in sight.

The “bill” must include provisions for full disclosure of the deals regardless of the nature and size of the bailout amount.

Further, it is essential for the “impending bill” to fund the bailout in “installments” rather than a lump sum settlement as it would indicate the initial results on the venture carried out on a “trial and error” basis. This would also allow public opinion to analyze the “pros and cons” of such investment and facilitate the required liquidity in the financial market with a “majority” approval.

The task ahead of our nation is to restore economic security with the revival of the “housing” and “job” market. As stated earlier, the “housing market” crisis is directly related to the “credit crunch” and “subprime mortgage” failure leading to “foreclosures” and that could be resolved by overhauling the lending practices and assisting the “homeowners” with affordable revised mortgage package. The foreclosed homes should be made available for sale to potential investors with verifiable income and credit history.

Commercial lending should resume freely yet carefully to promote and revitalize the small businesses and Corporations relying on credit for the growth and development in the job market. The flow of goods and services without any disruption will contribute to the anticipated growth and help the nation in reducing the multi-trillion dollar debt due to trade and budget deficit which otherwise will be the inevitable burden on the next and future generation.

It is time to focus on this crisis as “national” rather than “individual” and collectively deal with the issue for a better future of all.

Thank you.

Padmini Arhant

Economic Crisis

September 25, 2008

Our nation is currently experiencing a deep financial crisis due to major financial institutions, investment banks and insurance industry failure.

It all started crumbling like the house of cards beginning with Fannie Mae and Freddie Mac, Lehman Brothers, AIG and others in line with bad loans from the sub-prime mortgage crisis.

The economic meltdown in late 2006 precipitated nationwide housing market decline with saturated equity borrowing.

The entire network in the real estate and financial sector with hedge fund managers, underwriters, financial institutions processing the mortgage applications, mortgage brokers, realtors, homebuyers and sellers were primarily interested and vigorously involved in promoting and wrapping the deal with minimal and/or non-compliance of the standard rules and regulations that are specifically set up to avert such catastrophe.

The housing market bubble eventually burst contributing to credit crunch and massive foreclosures across the nation.

The commercial sectors were also hit in the process due to lenders streamlining measures and Congress legislation in an effort to slow down the escalating credit crisis.

Subsequently the ripple effect was felt in the job market with small businesses and medium size corporations struggling to maintain their credit limit from the sharp increase in interest rates on the borrowings and capital depletion essential for survival in the highly competitive market economy.

Meanwhile, some investors diverted their attention from real estate to stock market for short-term gains and as a result certain stocks earned the preferred status in stock value despite any performance history.

The stock market was warming up with superficially inflated stock prices along with futures trade speculation on oil stocks mostly responsible for the crude oil price elevation triggering the sensitive energy crisis.

At the top level, the monetary authority and incumbent administration as the economic growth and development oversight implemented policies including lowering of prime rates to an unprecedented level in recent times creating opportunities for financial institutions to outreach borrowers with no solid credit history.

The executive branch euphemism to display patriotism through home ownership factored for unscrupulous practices in the housing market debacle.

It has further come to light that some legislators are beneficiaries of personal financial deals as VIP PATRONS of the failed financial institutions such as Fannie Mae and Freddie Mac, Lehman Brothers and more.

However, it does not exclude Presidential contenders’ campaign advisors confirmed to be the financial institutions’ lobbyists/former executives enlarging the oversight conflict of interest.

Hence proving the theory….corruption and cronyism thrives in economic and political systems.

Strategy:

The government proposal to bail out these Corporations indulging in reckless undertakings with staggering $700 billion of American taxpayer’s money is currently debated in the House of Congress.

There is also anxiety over the executive branch cavalier approach for the clean bill immediate approval without tax payer investment protection or oversight for an unprecedented and historic venture.

The irony is the Treasury Department and the Federal Reserve Bank with the primary responsibility to monitor and recommend any regulation in the financial sector is experiencing labor pain after nearly twenty two months gestation and demanding Congress to deliver regardless.

With current Presidential race in process, one has to hope that this situation does not lead to the controversial Pro-Life vs. Pro-Choice debate on the financial crisis.

Congress favoring Pro-Choice to ensure the bearers safety and security would be prudent particularly with taxpayers bankrolling Corporations bailout and their erroneous decisions.

The urgency to regulate the financial sector granting unilateral authority to an individual – the Treasury Secretary with a sum approximately equivalent to Argentina and Chile’s combined GDP arouses legitimate skepticism among legislators on both sides of the aisle.

Some of them reminisce the current administration’s similar demand prior to invasion and occupation of Iraq.

Remedy:

Since the bailout is imminent and crucial for the stabilization of the financial markets, it is imperative for legislators to secure investments with conditional offers.

Several economists and experts have come forward and presented their thoughts and strategies for the existing national crisis.

1. The consensus among all of them is to establish an Independent Oversight with no Special Interests or Lobbyists infiltration posing conflict of interest.

2. Oversight Committee to approve after reviewing the proposal to invest in mortgage-backed securities to relieve the remaining financial institutions from the bad debts burden.

3. These securities purchase price carefully taken into consideration with a set profitable return upon instruments sale would be beneficial. It is also important to identify the buyers and sellers.

4. Open Bid transparency during investments’ sale or purchase is vital for investor confidence and value enhancement.

5. Corporate Executives pay off for poor judgment and weak performance eliminated as a precedence to existing and future Corporations heading in that direction would prevent repeat mistakes.

6. The hedge fund managers subjected to strict scrutiny and ethical standards is vital in addition to management fees and asset allocation determined in a manner to yield nothing less than profitable return to the investors i.e. the taxpayers.

7. Moratorium on foreclosures in bipartisanship agreement would relieve homeowners across the nation.

At the same time, the home owners to be evaluated on individual basis by the lenders with Oversight Committee alongside and encouraged to make payments equivalent to rental payments or interest only on revised mortgage package whatever is affordable.

Again, this offer made available only to the first home buyers dealing with foreclosures.

Successful sales and marketing of foreclosed homes to potential investors could expedite the housing market revival besides helping communities restore social and economic security through property taxes used for funding public school education and other services.

8. External audit on financial institutions listed as risky and brought to public focus would restrict undesirable activities.

9. The firewall resurrected between the commercial and investment banks protects public funds.

10. Sound and solid lending practices in both private and public sector would energize markets.

United States economy has proven record of accomplishments to rebound following crisis throughout the twentieth century.

The United States economy is resilient with a highly productive work force that has risen to the occasion and challenged the market forces acting against it.

The economic boom will resume and prosperity shared by the global markets.

The temporary turmoil in the market will be settled with prudent economic strategy, robust fiscal policy, leadership and confidence of the people of the United States of America.

Thank you.

Padmini Arhant

« Previous PageNext Page »

PadminiArhant.com