Greece – EU Bailout and Austerity

February 8, 2012

By Padmini Arhant

European contagion originated from the Mediterranean country – Greece.

Last year EU monetary assistance with €110 billion tied to untenable terms and obligations rendered the expectations beyond normal scope.

Accordingly, Greece is still struggling to overcome economic woes despite severe austerity and political reshuffle.

The earlier government under Prime Minister George Papandreou efforts to contain the rising debt and,

EU pressure to prioritize deficit trimming through rigorous spending cuts evidently led to GDP contraction by 6%, budget deficit at 10% and 18% unemployment respectively.

In the poor economic growth rate and looming financial liabilities, the creditors conditional offer demanding drastic expense reduction directly affects the core revenue base – consumers and taxpayers.

The attempt on deficit control without income is enforcing mandatory borrowing and,

Massive cuts in vital services cripples the economy to the point of diminishing return.

Tax hikes at any level could exacerbate the burgeoning crisis especially with unprecedented layoffs in both public and private sectors leading to industry workers as well as state employees nationwide strike.

Instead Greece and other economies like Spain, Portugal, Italy and Ireland in euro zone would enormously benefit from job-oriented investments incentivized with tax breaks, guaranteed dividends and equity enhancement to prospective investors.

European Central Bank, IMF and other international banks capital infusion with strict recommendations result in joblessness.

Funds directed towards economic sector for job creation would stimulate economy facilitating income source to meet budget and payments on borrowing.

Short term fund raising through treasury bills and bonds enables survival amid speculations on financial liquidity.

The propositions on Greek’s private debt write off up to 70 percent or more would provide relief in deficit management allowing appropriations towards economic recovery.

However, EU, ECB and IMF loan stipulations on €130 billion or ($171 billion) over and above cuts agreed to about 1.5 percent of GDP by current Prime Minister Lucas Papademos is the repeat of erroneous policy that precipitated economic and financial meltdown across Europe.

IMF’s similar strategy with Romania dependent on credit for state budget commitments contributed to economic downturn due to extreme lending criteria.

Financial institutions and monetary organizations purpose is useful in building economies applying generic and specific models to address individual requirements.

Greek economic surge and financial recuperation could be supported with job restoration via domestic and foreign investments qualifying the G-20 favored globalization concept.

Under same auspice, trade activities promoting exports would revive manufacturing, service and retail industry besides boosting small medium enterprise competitiveness.

Although financial assistance are necessary to restitute state solvency and credit rating,

Finance industry, corporations and wealthy entrepreneurs in Greece could ease the burden on the economy alongside government initiatives to salvage the situation.

The economic resurrection with prudent investments would need modification for a vibrant Market economy.

Market economy – 80% and Government managed programs – 20%

While the bulk of the economy would fall under free market system with oversight to prevent past mistakes responsible for the status quo,

Preserving core social programs under State purview are important for sustenance and they are –

Pensions, retirement savings or Social Security,

National Health Care with options

Veterans Affairs including rehabilitation and care,

State funding for affordable education, scientific research and technology,

Subsidized housing to accommodate non-qualifiers in the regular home finance.

Public services utilizing technology to the maximum potential and,

Environment protection agency to co-ordinate on national and international mandate.

Stringent laws against corruption within society beginning with government bureaucracy, finance sector and across the economic spectrum could yield financial savings.

Tax reform closing tax evasion loopholes and unaccounted funds or hidden assets retrieval from domestic and overseas bank accounts.

Market economy with life saving programs under government ambit could be a profitable and secure synergy complementing one another.

Greece in euro zone has shared gains and losses with euro fluctuation prior to economic recession.

The impact on Greek economy from euro volatility could not be discounted in the European trade.

The perception of Greece membership in euro zone as a liability could be transformed into an asset in reality with appropriate rescue package designed for economic progress than financial bailout.

Unlike the previous aid, EU approval of €130 billion to Greece in the interim could set the frail economy on trail with fiscal, trade and monetary policy restructuring for better economic performance.

With political elections on the horizon, Greece could experience economic productivity through local and foreign investors recognition of lucrative deals available at the present time.

Greek government relentless pursuits in energizing the economy would minimize ambivalence among creditors reversing the trend in capital provision.

EU, ECB, IMF and global finance to Greece on feasible conditions would deliver positive outcome strengthening euro zone and the member states economy.

The distinction between banks bailout and assistance to weak economy is the beneficiary with former was top 1% whereas the latter represented by 99% in the society.

Considering the predicament and inter-dependency in global economy,

Greece and other nations could not be abandoned or challenged with extraordinary conditions detrimental to euro zone and EU economy.

The leaderships and authorities at EU, ECB, IMF, International banks and euro zone are urged to kindly extend financial credit to Greece with a new opportunity to rebuild the economy and organize fiscal house in order.

Prime Minister Lucas Papademos , the opposition leader Antonis Samaras and all other elected members,

Notwithstanding, the economic leaderships in Greece are confronted with daunting tasks ahead.

The consensus in public and national interest would reflect the political will to resolve the persistent financial problem winning republic confidence and creditors trust in the capital market.

Good Luck! To citizens of Greece and the government in prevailing in financial and economic security.

Peace to all!

Thank you.

Padmini Arhant

Financial Reform with an Independent Consumer Protection Agency

March 6, 2010

By Padmini Arhant

The Wall Street bailout season commenced in 2008 and continued into 2009. Those corporations allied with the oligarchs not only survived but their CEO’s are thriving amid difficult economic times and some states experiencing a double-digit unemployment.

As stated earlier in numerous articles on the economy and the financial sector, the speculators’ reckless conduct together with greed led to the status quo. The sub-prime mortgage and credit card lending practices targeting the vulnerable population contributed to the housing market decline and the alarming bankruptcies.

In addition, the credit crunch has forced many small businesses to lay off employees and left the self-employed in a dire situation. The private sector have also been affected in the liquidity crisis triggering the 9.7 percent national unemployment rate and much higher when consolidated with the under employed statistics.

Evidently, a rigorous financial reform is necessary to revive the economy and avert future meltdown.

Although, an international consensus was reached during the G-20 meetings in 2009 at London and Pittsburgh to implement strong financial regulations, the domestic agenda in the United States is faltering due to the usual Senate gridlock and the lack of enthusiasm to push the issue forward.

However, the House of Congress is way ahead of Senate in passing legislations on many issues, reflecting the Speaker Nancy Pelosi and the House of Representatives’ commitment.

On the other hand, the Senate majority leader Harry Reid has a tough battle convincing the opposition, sworn to filibuster the legislations on any reform.

The Republican Senators and the democrat opponents believe in the market economy free of regulations and refuse to acknowledge the economic adversity brought upon by deregulations in the recent decades.

Failure to act now would be catastrophic for the global financial market and the economy.

There is no guarantee that the U.S economy and the rest of the world would not be subject to a similar scenario in the future with the hedge fund managers and the investment banks such as the Goldman Sachs…

Having set a precedence in wild speculations, high-risk exposure and fast track profiteering at the expense of millions of borrowers, investors and national economies like P.I.G.S, an acronym for Portugal, Iceland/Ireland, Greece and Spain, all of whom are currently dealing with insolvency.

Finance sector being the cradle of the economy, the benign symptoms would prompt the government bailouts of the default institutions. Thus, history repeating itself with the exponentially rising national debt remaining the constant factor in the non-regulatory environment.

Another attention worthy issue in this context is the establishment of an Independent Consumer Protection Agency.

Agency’s function would be fairly common and that being,

Protecting the consumer rights as the borrowers,

Creating awareness on the industry’s unethical practices apart from,

Preventing the banks in the systemic abuse of customers through inflated finance charges and interest rates on personal loans, credit card etc.

Further, it could also provide arbitration service to the borrower and the lender on financial disputes, thereby mitigating legal expenses for both parties.

Not surprisingly, there is resistance to the Independent Consumer Protection Agency.

As witnessed in the health care bill, the lobbyists are relentlessly engaged in ensuring the demise of the financial reform and the consumer protection agency.

The White House being suggested to nominate the Treasury Department in handling the Consumer Protection Agency affairs as opposed to a non-partisan and an independent committee, poses a conflict of interest stemming from the Treasury Department’s liaison with the financial institutions.

Likewise, the Federal Reserve maintaining control over the Consumer Protection Agency against the banking sector is an unrealistic expectation based on the Federal Reserve’s performance in the sub-prime mortgage debacle and the executives’ close ties with the finance sector.

Therefore, the consumer protection agency ought to be independent and focused on safeguarding consumer interest.

Financial reform cannot be delayed or relinquished especially with the Wall Street’s compulsive disorder to indulge in short term gains by acquiring toxic assets only to be transformed into a burgeoning liability.

Alternatively, the watered down legislation could fulfill a formality and not serve the purpose.

Hence, the requirement for a meaningful financial reform is absolutely vital to rein in on predatory traditions.

Finally, the U.S. economic recovery could be expedited through a robust financial regulation that would instantaneously restore the investor and consumer confidence.

Thank you.

Padmini Arhant

Congressional Conservatives’ Legislation Blockade

February 10, 2010

By Padmini Arhant

In the preceding article “Progressive Policy for National Progress and Prosperity,” I emphasized on the need to intercept the Congress gridlock by electing the ‘Progressives,’ in the Democratic Party.

Following news articles reaffirm such recommendation.

1. Congress trying to have it both ways on spending

Lawmakers lament rising deficits but fight for pet projects

By Carl Hulse – New York Times – February 7, 2010 – Thank you.

Washington – While Sen. Saxby Chambliss, R-Ga., said he was all for slowing federal spending , he has no appetite for the substantial cuts in farm programs proposed in President Barack Obama’s new budget.

Rep. Todd Akin, R-Mo, issued a news release simultaneously lamenting the deficit spending outlined in the new budget and protesting cuts in Pentagon projects important to his state.

And Sen. Jeff Sessions, R- Ala., a fiscal conservative and a senior Republican on the Budget Committee, vowed to resist reductions in space program spending that would flow back home.

The positions of these Republicans – and similar stances by dozens of other lawmakers of both parties – are a telling illustration of why it is so hard to control federal spending.

Every federal program has a constituency, and even lawmakers who profess to be alarmed by rising deficits will go to the mat to preserve money that provides jobs and benefits to their constituents.

“I am not a hypocrite,” Sessions said in reconciling his fiscally conservative credentials with his outrage over the administration’s proposal to essentially end the human space flight program and allow private enterprise to take on some of the load – an approach that Republicans typically favor.

Sessions said money taken from NASA would not be saved but would instead be directed to other Obama administration priorities that he did not support.

Others said that the annual tableau in which members of Congress criticize the spread of red ink even as they reassure voters back home of protection for popular subsidies and Pentagon projects exposed the high degree of cynicism and lack of conviction that colors the fight over congressional spending.

“It shows that in Washington, you can be firm on your opinions; it is your principles you can be flexible on,” said Rahm Emanuel, the White House chief of staff.

The Republican juggling act on spending comes after a legislative proposal for an independent commission to study ways to cut the deficit stalled in the Senate, partly because some Republicans who had originally backed the idea balked.

“There are not enough statesmen who will stand up and say, “Cut it even when it is in my district,” said Rep. Jeff Flake, R-Ariz., who has crusaded against spending by both parties on pet projects known as earmarks.

It is not only Republicans who are trying to have it both ways.

Conservative and moderate Democrats who have pushed against deficit spending also quickly protested the cuts in NASA, military and farm spending.

2. GOP hammers Obama over jobs

Republicans oppose giving leftover bailout money to small banks

By Phillip Elliott – Associated Press, February 7, 2010 – Thank you.

Republicans sparred with President Barack Obama in their Saturday media addresses over proposals to create jobs, further evidence of the difficulty of bipartisan solutions to the nation’s pressing problems.

Obama pushed Congress to use $30 billion that had been set aside to bail out Wall Street to start a new program that provides loans to small businesses, which the White House calls the engine for job growth.

Republicans, meanwhile, taunted Obama with a familiar refrain:

Where are the jobs the president promised in exchange for the billions of dollars already spent?

The barb came a day after the government reported an unexpected decline in the unemployment rate, from 10 percent to 9.7 percent.

It was the first drop in seven months but offered little consolation for the 8.4 million jobs that have vanished since the recessions began.

“Even though our economy is growing again, these are still tough times for America,” Obama said.

“Too many businesses are still shuttered. Too many families can’t make ends meet.

And while yesterday, we learned that the unemployment rate has dropped below 10 percent for the first time since summer, it is still unacceptably high – and too many Americans still can’t find work.”

To help the recovery, Obama asked Congress to use leftover money from the Troubled Asset Relief Program, or TARP, to provide to small banks so they can make more loans to small businesses.

Republicans have criticized the move, arguing any money left over from the bailout should be used to reduce the budget deficit.

In the weekly GOP address, Rep. Jeb Hensarling of Texas chided Obama for proposing a 2011 budget last week that would increase spending, taxes and the national debt.

“Americans are still asking, ‘Where are the jobs?’ but all they are getting from Washington is more spending, more taxes, more debt and more bailouts,” Hensarling said.

The Republicans attack came even as key Democrats and Republicans in the Senate are working on a bipartisan jobs bill.

The senators hope to unveil legislation as early as Monday.”


3. Obama seeks boost in business lending

Proposals draw fire from Democratic leader in House

By Christine Simmons and Marcy Gordon – Associated Press – February 6, 2010

Seeking to create more jobs, President Barack Obama on Friday asked Congress to temporarily expand two lending programs for the owners of small businesses.

But a Democratic House leader slammed the president’s proposals, saying they’re the wrong approach to creating jobs.

Obama said Friday he wants to bolster the impact of the businesses that are the chief creators of new jobs in a struggling economy.

Just hours before he spoke, the nation’s jobless rate finally dipped below 10 percent – to a stubborn high 9.7 percent – in the latest government figures.

The president said he wants businesses to be able to refinance their commercial real estate loans under the Small Business Administration and he wants that government agency to increase loans used for lines of credit and capital.

The truth is, the economy can be growing like gangbusters for years on end and it’s still not easy to run a small business,” Obama said as he visited a heating and air conditioning company in a Maryland suburb of the capital.

The White House said Obama’s plan would temporarily raise the cap on Small Business Administration Express loans from the current maximum of $350,000 to $1 million.

Obama’s plan would also expand the SBA’s program to support refinancing for owner-occupied commercial real-estate loans.

But even the Democratic head of a House committee wasn’t pleased about the plan to expand SBA lending.

Rep. Nydia M. Velazquez, D-N.Y., chair of the House Small Business Committee, said the SBA Express program has been criticized for underwriting loans that banks would have made without government backing and for carrying the highest default rate of any SBA program.

“With loan defaults on the rise, we should not base our strategy on increasing the size of the least stable SBA lending program,” Velazquez said.

The initiative to refinance commercial real estate debt may dilute it and draw away too many resources, she said.

Food for Thought – By Padmini Arhant Feburary 10, 2010

It’s clear from the listed articles that, the priorities for the congressional conservatives’ on both sides are not the people i.e. the working class, the middle class and the small businesses.

If they were, they would not try to have it both ways as suggested in the article.

Evidently, the national interest is not the primary concern for the Congressional conservatives and moderates in both parties.

They are preoccupied in their faultfinding against President Barack Obama, instead of cooperating with the rest of the Congress in passing legislations especially,

The health care and health insurance reform where a staggering 46 million Americans are reportedly dying due to these lawmakers’ unwillingness to pass the much-required legislations to heal every American.

Notwithstanding, the credit crunch experienced by the small businesses from the ‘bailed out’ banks’ reluctance to facilitate lending.

Again the finance sector’s default in containing the worsening real estate crisis in both residential and commercial markets calls for immediate action through finance reform – conveniently rejected by the conservatives’ and moderates on both sides.

These legislators positioning them to be ‘fiscal conservatives’ and rebuking President Obama on the rising national debt that, they are contributing with their ambitious pet projects over the ‘average’ American plight, speaks volume on their lack of commitment to the people electing them to the office.

With respect to President Obama’s strategy on SBA lending to the small businesses, the Democrat House Committee response is irrational and confirms the legislator’s ‘out-of-touch’ with reality.

The President’s justification on this issue is right on target.

Since the bailed out finance sector is back in the game with “business as usual,” motto and focused on self-promotion with multi-million dollar bonuses culminated by their Washington representatives’ successful blocking of the finance reform,

The President’s proposal is the only viable option to stimulate the job growth in the most desperate segment of the economy – the small business.

Besides, in the absence of the banking industry long overdue lending activity, the investment risks in the small business is blown out of proportion compared to the risk exposure in the multi-trillion dollar bailouts to the banks still withholding credit to their creditors-cum-taxpayers and consequently restraining the economic recovery.

Time is running out for the conservatives on both sides in correlation with patience among the suffering millions in the economy.

If the Republican members are counting on their rebellious attitude towards the democrat President and the Congress to win elections in November 2010,

They are in for a serious disappointment for the American electorate would not reward the party with a victory in the face of their deteriorating economic conditions resulting from the Republican members’ blockade.

Somehow, if this were to happen, then it would be at the democracy’s peril.

Perhaps, it’s something, the American electorate ought to think about because they are responsible for the stalemate in Washington.

Having elected the ideological representatives for whom the people seem irrelevant – transparent in their obstinacy on legislative matter, the people are the ones who can undo the wrongdoing by voting the redundant representations out of power this November or even sooner.

Democracy is held hostage by the recalcitrant congress members defying the constitutional responsibility to serve the people and the nation as an elected official.

Washington hue shines through in these issues.

How can any President possibly achieve anything in such a hostile environment?

You decide.

Thank you.

Padmini Arhant

California Public Education Crisis

November 23, 2009

By Padmini Arhant

The world-renowned budget fiasco in California has led to its recognition as the ‘failed’ state in the nation. Through drastic budget cuts targeting the nerve of the economic system such as education, health care and other essential programs for children and elderly, the legislators and the Governor in Sacramento have successfully desecrated the Golden State into a bankrupt state.

As a result, the Californians are forced to bear the brunt of the ideology driven governance steadfast in prolonging the crisis rather than accepting pragmatic solutions offered to the elected officials least concerned or affected by their disastrous performance.

In the past week, the students in California were compelled to protest the atrocious 32 percent increase in undergraduate educational fees costing above $10,000 a year in the next fall, comparatively triple the cost a decade ago. Apparently, the UC Regents’ callous decision made after a 10 percent hike earlier this year.

Further, the authorities are wasting no time in salting the wound with employee furloughs, laying off non-tenured faculty leaving the students to attend virtual instructions, alternatively increased class size and slashing courses to the detriment of quality education.

Amid the health care reform characterized by the opposition as the ‘government take over’ of the private industry, the pitfalls from the privatization of public education cannot possibly be ignored.

The reasons provided for the appalling measures by the UC President Mark Yudof and campus leaders are the 20 percent decline in the state funding towards the UC budget. Whereas according to the UC faculty it’s been a phenomenal year of income for the UC System with revenue flowing in from various sources such as the federal stimulus funds, research grants, medical profits, proceeds via sale of parking, housing and medical services throughout California.

Another noteworthy issue being the massive recruitment of administrators at the expense of the teaching faculty and the students exacerbated the victims’ plight. In adherence to the corporate policy, the top hierarchy with earnings above $200,000 to $500,000 in the administration compensated with excessive salary packages and extravagant bonuses apart from discreetly sharing a small percentage of profits with senior administrators, athletic coaches and star faculty.

Yet in a new revelation, the UC seemingly lost $23 billion in the past two years due to investments in toxic assets and real estate mimicking the short-term gain strategy in the Wall Street. Subsequently, the most vulnerable members i.e. the students and faculty are mandatorily bailing out the institution from the financial mismanagement.

Firing non-tenure track faculty that teach over half of the university enrolment, substantial student fees, work overload with simultaneous salary reduction on workers, refusal to negotiate with unions are reported to be taking place.

The astonishing aspect is the privatization of the public education leading the UC President Yudof to lend $200 million to the state in an effort to earn profit from the interest, declaring such options ‘profitable’ compared to the institutional core academic activity. Again, UC is reportedly on a comfortable $20 billion budget with no requirement for draconian methods adopted against the struggling students and other members, the victims in the greed driven racket.

Source: The above-mentioned accounts partly cited from Bob Samuels, president of the University of California, American Federation of Teachers. He runs the blog Changing Universities. during the interview on by the host Amy Goodman – Friday, November 20, 2009.

Similarly, Zen Dochterman, UCLA student taking part in the protests made the following plea:

“I’m a student representing no one.

We are under no illusions. The UC Regents will vote the budget cuts and raise student fees. The profoundly undemocratic nature of their decision making process and their indifference to the plight of those who struggle to afford an education or keep their jobs can come as no surprise. We know that the crisis is systematic. It reaches beyond the regents, beyond the criminal budget cuts in Sacramento, beyond the economic crisis, to the very foundations of our society.

But we also know that the enormity of the problem is just as often an excuse for doing nothing. We choose to fight back, to resist where we find ourselves, the place we live and work, our university. We therefore ask that those who share in our struggle lend us not only their sympathy, but their active support.

For those students who work two or three jobs while going to school, to those parents for whom the violation of the UC charter means the prospect of affordable education remains out of reach, to laid-off teachers, lecturers, to students turned away, to workers who have seen the value of their diplomas evaporate in an economy that grows without producing jobs, we say that our struggle is your struggle, that alternative is possible if you have the courage to seize it. We are determined that the struggle should spread. That is the condition in which the realization of our demands becomes possible.”

True Perspective – By Padmini Arhant

Unarguably, the state of California is in shambles. The dilemma is the structural damage caused by the lack of leadership in Sacramento. In addition, the obstinacy NOT to resolve the burgeoning budget deficit with result-oriented actions is having a pronounced impact on the residents across the spectrum.

On the other hand, the public educational institutions run as a private enterprise entrenched in the philosophy that regards ‘Profit as Prophet’ is widespread in the growing culture based on – “All for me and none for you.”

There is urgency for California and the nation to address the serious educational demands directly linked to the economy and the future. Undergraduate education is the stepping-stone for any individual to survive leave alone attaining a decent life in the competitive global economy.

These students are the immediate valuable resources for the American business and work force in the human capital criteria. It’s a travesty to deny them an affordable education in the dire economy with staggering unemployment widening the gap between the ‘haves’ and the ‘have-nots.’ Obviously, the priority among the head of the institutions is to safeguard their personal interest over that of the nation.

It’s no rocket science to figure out that nations cannot exist or sustain without the prolific academic environment focused on providing least expensive and high quality education for all. Any compromises as noted in the latest event appropriately calls for the removal of the entities responsible for the embarrassing distressful situation brought upon the students and the teaching faculty expected to be learning in the classrooms rather than imploring to the oblivious authorities at the institutions and the state assembly.

Recently, civil disobedience for various legitimate causes mired by unnecessary arrests and extreme use of force undermining democracy. It’s imperative to release the students in custody and instead divert attention on those appointed as the head of the institutions viz. UC President Mark Yudof and the Governor of California along with the legislators for failing to fulfill the constitutional duties towards the citizens of California. Perhaps, it might be worth considering a recall given the deliberate negligence of legislative responsibility.

The students, teaching faculty and the workers should not be subject to monstrosity demonstrated in the worst educational battle. Ironically, the students and teaching faculty as taxpayers are denied fair opportunities in the backdrop of Wall Street bailouts, bureaucracy and sheer incompetence prevalent in Sacramento and the UC system.

Hence, it’s incumbent on the UC regents to repeal the proposal and undemocratic action with respect to student fees, staff layoffs and other activities inevitably hampering the economic recovery.

Congress should approve federal grants and educational stimulus with a stipulation that funds to be explicitly used for better and cost effective academic purpose, and simultaneously restrict educational institutions from squandering the funds in speculative Wall Street investments.

Finally, Students should continue their education and defy the unfair fee imposition by maintaining the peaceful dissent until the issue is resolved in their favor.

Thank you.

Padmini Arhant

National Unemployment and the Economic Status

July 23, 2009

By Padmini Arhant

The ravenous economy has absorbed about $3.7 trillion dollars via bailouts and stimulus plans, (please refer to individual stimulus package topics for breakdown) yet the nation’s jobless rate rising like a tidal wave rather than settling along the shores. Several arguments mounting regarding the precarious job situation across the nation with some fifteen states like California, Michigan, Indiana, Ohio and others experiencing double digit in job losses accumulated over a period of time.

Not surprisingly, criticisms with an ominous prediction such as a possible return of the ‘Great Depression’ from various political and economic factions pouring against the current administration’s level of action and apparent inaction in averting the precipitous decline of the job market.

The irony being, President Obama’s opponents and fierce critics expressing deep concerns over the present generation’s children and grandchildren burdened with the burgeoning multi-trillion dollars national deficit from the ‘supposedly’ bizarre and revolutionary health care reform.

Unfortunately, the pervasive selective memory among the cynics forbids anyone from reminding the junkyard legacy by the previous administration. Nevertheless, it’s important to revisit the situation in order to find a pragmatic and an effective cure for the epidemic unlike a band-aid treatment tactic by the prior administration.

As detailed earlier on many occasions, the wild adventures in the past eight years eroded the fundamentals of the capitalist system. Immediately following the 9/11 attacks, the widespread panic about the United States economic and national security surely had an impact on the American investments ranging from housing to stock market including the exodus of some expatriates selling homes combined with the withdrawal of their investments.

The Bush-Cheney administration laid out the extravagant scheme to trump the situation with yet another war by invading Iraq when the mission in Afghanistan had barely begun. Conservative ideology dictates that wars promote prosperity. Actually, the notion might not be far-fetched because wars are highly beneficial to the nexus group gambling with others’ life and nation’s wealth.

When the administration inheriting a surplus economy engaged in a dubious agenda at the most improper and inconvenient time, the market conditions in 2002 and onwards became more volatile due to enormous speculations surrounding the United States affordability to wage another war.

The Bush-Cheney administration sailed through the storm with false assurances and blatant lies that Iraq war would be self-funded through oil revenues expected to be reaped exclusively by the United States in return for the establishment of democracy.

One must also not forget the administrations’ prophesy on the premature valentine’s day celebration by the cheering Iraqis handing out rose bouquets to the U.S. occupying forces at the expense of their blood and national treasury.

The excessive borrowing commenced at the dawn of the Iraq war with the fiscal conservatives now objecting to their constituents’ health care benefits, then turning a blind eye and signing a blank check to an unarguably a corrupt administration.

Funding two simultaneous wars converted the national surplus to national deficit adversely affecting the Treasury Notes and subsequently the U.S. currency in the international market. In the backdrop of the weakening Bond market, the stock market performance accelerated with investors’ confidence in the growth of different sectors specifically the oil and defense stocks due to the on-going wars, technology sector and the financial sector with hyperbolic balance sheets.

Above all, during that time the Federal Reserve and the Treasury’s overly cautious inflationary measure by reducing the interest rates beyond market conditions and unleashing the free market from necessary regulations in an utter conflict of interest essentially provided a fertile ground for the financial sector to exploit the unique opportunity in the lending activity.

In addition, the conglomerate like AIG and major investment banks extending towards the commercial bank’s activities risking long-term investments for short-term gains induced further competition for the traditional banking sector adopting strategies detrimental to the key components of the economy viz. the housing market, retail and commercial lending.

The financial sector’s unethical and unscrupulous practices in every aspect of lending targeting the nerve of the economic system i.e. the consumer, exacerbated the economic recession.

From the notorious sub-prime mortgages in the housing market now appropriately defined as ‘toxic assets’ bundled into the mortgage backed securities exchanged through international trading, to teaser rates offered on credit card later escalating to atrocious interest rates exceeding market affordability…are primarily responsible for the chronic ailments of the current real estate and the liquidity crisis.

Unequivocally the present woes of the economy are attributable to the overwhelming greed by the financial sector and the defiance for any rule of law until date. As clarified by President Obama during the press conference on date, the financial regulatory reforms are in order.

Since some prominent economists have been recently pushing for more stimulus over and above the total $3.7 trillion dollars, it’s necessary to obtain the facts and details on earlier investments to evaluate the methods applied as a result of the negative economic growth and dismal unemployment rate.

Please refer to stimulus package details followed by careful analysis in the subsequent segments.

Meanwhile, it’s imperative and incumbent on all bailout recipients and the previous administration officials regardless of hierarchy to come forward, testify under oath to Congress as the representatives of the American electorate, and explain exactly where and how the trillions of dollars have been invested.

Is it a coincidence that Goldman Sachs after being assisted by the former Treasury Secretary Henry Paulson in gobbling Bear Stearns and Lehman Brothers, emerges with a bumper profit rewarding its every employee with a despicable amount $700,000 bonus the past week ? – Absolutely not.

It’s about time the criminals of the financial world are brought to justice in order to avoid a twenty first century revolution in the world’s modern democracy.

Congress must act in the interest of the people and abide by the constitutional rule of law with an honest and thorough investigation of the massive bailouts carried out at the expense of the hard working American taxpayers.

Thank you.

Padmini Arhant

Pulse of the Economy

June 11, 2009

By Padmini Arhant

With a finger on the pulse of the economy, the recent reports on employment, housing, financial and stock market post stimulus funding worth $787 billion approved by Congress in February 2009, has drawn both praise and criticism from different quarters. The praise is always welcome and encouraging for any administration and the Obama administration is no exception to the rule, particularly when they are relentlessly engaged in stabilizing the economy as the top priority.

Whereas, the criticism aimed at the President is no revelation considering the partisan Washington atmosphere. The results thus far, indicate the current national unemployment rate at 9.2% against 8% in the pre-approval stimulus package forecast. Further, the reports reveal the economy shed 1.6 million jobs with the White House claiming 150,000 jobs saved since the passing of the stimulus measure. Obviously, it’s a contentious issue for all Americans receiving pink slips for paychecks and IOU’s in the state of California respectively.

The main criticism being the Obama administration’s optimistic approach in selling the stimulus plan not correlating with the job market results, a fair analysis is due to clarify doubts and speculations on the stimulus plan prospects and its effect on the economy.

According to the White House and other reports, only $44 billion i.e. 5.6% spent from the $787 billion stimulus funds with an accelerated investment committed this summer. In light of the above scenario, the 150,000 jobs rescued towards 5.6% funding is a confirmation of President Obama’s cautious and calculated expectation from the economy.

Even at the present conservative trend, the job market results for the remaining 94.4% of the stimulus fund upon targeted investment should adequately restore the employment rate from the growing underemployment and unemployment status with a combined saved and created job ratio yielding approximately 2,528,571jobs in a similar environment.

It is not uncommon for the critics and analysts to focus on the dismal job market figures affected since the onset of the economic recession in December 2007. The skeptics’ myopic view neglecting economic progress in other areas is attention worthy. Various reliable sources confirmed the financial sector strengthening with the bailout funds interjection in an effort to amortize the toxic assets from the sub-prime mortgage debacle. The leading financial institutions such as Bank of America, J P Morgan and Chase and other banks in the top ten range enabled capital management viability proven in the balance sheets.

The rapid foreclosures primarily responsible for the declining housing prices nationwide conversely contributing to the median home prices plateau with the 47 percent foreclosed homes resold in the entire Bay Area in April 2009 compared to 52 percent in February 2009 – indicating the desirous regress in foreclosures and signs of early recovery in the housing market.

The reports also confirm the home sales and value up for month and down for the year attributing to the Obama administration’s strategy of “the combination of lower prices, average mortgage rates of 5 percent or less for smaller loans, and a new $8,000 federal tax credit for first-time buyers” in the anemic housing market.

When the foreclosures pervasively diminished or extinguished nationwide with the stimulus programs, the housing market rebound will be visible motivating the lenders to participate in the melting liquidity market. However, caution required with the rising bond market’s pressure on interest rates imperative in alleviating the housing market crisis.

In the stock market – the significant gains by the commodity market and technology sector reflected in the recent rally is invigorating. Other industries lagging behind in performance likely to benefit from the steadily easing financial market credit crunch, promoting private sector investments directly related to boosting the job market, housing market and consumer spending essential for speedy economic recovery.

As for the quasi investment deals in the GM takeover causing pandemonium among the well-wishers across the aisle, the taxpayers’ financial commitment to rescue jobs slighted for political bickering. The ‘bankruptcy’ triggered cynicism about the government imprudence in investment goals with taxpayer dollars, while conveniently ignoring the fact that the auto industry problem originated during the former administration’s era and their $17 billion initial investment in the corporation set for failure.

Ironically, the temporary and modest government intervention in the free market characterized as ‘nationalization’ of industries necessitating required action from colossal mismanagement.

Meanwhile, the Obama administration’s objective in the GM deal to avert the deepening crisis in the frail industry challenged by the competitive global market is a thoughtful approach. Now with taxpayers as the majority shareholder in the once iconic corporation the management goals anticipated to synchronize with the twenty first century demands ensuring excellence in purpose, productivity and profitability.

Moving on to the other pertinent and popular health care issue debated and discussed to reject rather than embrace the premise of the President Obama’s health care plan – choice, affordability and quality, the perfect remedy to relieve the economy from the health care burden costing the nation in trillions while leaving the uninsured in millions.

Despite the innuendoes and insinuations about the mounting debt, the investments miscategorized as ‘squandering’ in the national economy ranging from health care, education, energy, environment, housing to financial sector and other industries is a pledge towards substantial economic security for the present and future generation.

The controversy surrounding the diverse investments costs applied to two particular sources viz. borrowing from China and tax hikes on the corporations and wealthy groups. Contrarily, the tax breaks to the top ten percent in the highest income bracket and corporations evading tax through tax havens with limited free market regulation or deregulation in the past eight years aside from being counterproductive resulted in approximately $9.5trillion dollars national debt with a cumulative effect on the status quo of the economy.

There was no clamor over the increasing liabilities on the baby boomers and the younger generation in the extravagant spending on illegal wars with a guarantee to fund itself from oil revenues in Iraq…an unequivocal myth until date.

Then the financial sector bailout with respect to AIG and oligarchs to a tune of $700 billion and more in 2008 with no accountability or transparency exacerbated the liquidity crisis against the intended proposal. Interestingly, the past events currently dismissed as irrelevant claiming that Obama administration disavow the incidents pertaining to the prior administration yet owe an explanation for the phenomenal deficit, the previous administration’s legacy to its successor.

Only if the opposition’s present vigilance on fiscal responsibility existed from 2000-2008, perhaps the People’s Republic of China and The Kingdom of Saudi Arabia would be vigorous competitors to the world financier ‘The United States.’

The demands from the conservative right exceedingly high launched with rhetorical comments and negative attacks such as “false Prophet’s failed Presidency.”

In the absence of any ideas and solutions to the burgeoning crises created by the previous administration’s historical blunders serving testimony to the beacon of incompetence and failures in Presidential history, the political posturing is paradoxical.

With respect to the economy in the ‘Golden State of California’, the clock is ticking for the state and the local government authorities to resolve the budget crisis and close the $24 billion deficit in the state budget and $73 million in the San Jose City budget.

Even though the strategy in both situations is scrambling to wipe the deficit by any means with mostly eliminating the vital services and benefits to the weak, the poor and the vulnerable, the repercussions of draconian cuts with no tax increases will far outweigh the immediate illusory results not barring the political risks in the 2010 gubernatorial elections.

Following the special election results on May 19, 2009, it’s incumbent on the state legislature to adopt several guidelines and viable options provided by concerned citizens through many sources in resolving the fiscal crisis. There is no patent right on the thoughts in the matter affecting the entire state and the community at large. It is a patriotic and civic duty of every citizen volunteering suggestions to deal with the stalemate confronting the California state legislature.

Governor Arnold Schwarzenegger’s recent comments on undocumented workers and their plight aptly placed the sensitive immigration issue in perspective. It’s time for the Governor to translate into action by issuing drivers license to the undocumented workers in the State of California that would not only aid the budget but also enhance the opportunity as the preliminary step towards legalization of the Californian residents.

More often, the leadership is subject to test the will, wisdom and courage against the odds exclusively the unpopular decision eventually ending in greater good for all.

I wish Governor Arnold Schwarzenegger and Mayor Chuck Reed of San Jose ‘Good Luck’ in their decisions appropriate to defend many but might offend few in the process.

Thank you.

Padmini Arhant

The Scapegoat

March 31, 2009

Lately, there has been an unwarranted verbal assault on caring and concerned individuals for their thoughtful views, analysis and significant contribution towards the welfare of the nation and the society in general. There are comments igniting sparks in the backyard as well as the nation’s capital.

Therefore, it is necessary to set the records straight once and for all as silence is often misunderstood for confession and similarly kindness frequently mistaken for weakness.

In a democracy functioning as the convergence of diverse talent, it is not uncommon to be selective in the recognition and acknowledgement of some while others targeted for blame, vilification and partisan political debate. In the past decade, the whistle blowers in the Corporate world brought many camouflaged issues to public focus out of concern for the people. These honorable citizens may or may not have continued employment with the organization they were reporting about; however, the community and society at least heard them through media and other channels. They are also provided protection by law.

There is no such consideration for fresh voices participating in public discourse about the direction the government and corporations are heading in the most trying times in recent history. Contrarily they are continually attacked as miscreants disrupting the business and politics as usual motto in Washington and Wall Street.

It appears that certain members assert their entitlement to the “Bill of Rights” while depriving others of the same rights particularly with reference to the first amendment. Any suggestion for fairness whether it relates to Proposition 8 where the gay community is singled out against same-sex marriage or the overhauling of the corrupt prison system in California, the critics otherwise the hypocrites in the society distort the content and disseminate the message out of context to suit their ideology.

A word of caution. This blogpost might well be an epic as it is time to clarify and clear the static in the air due to contaminants and pollution.

It is important to reiterate the Bill of Rights for better understanding.


Bill of Rights

Amendment 1 – Freedom of Religion, Press, Expression. Ratified 12/15/1791. Note

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.


redress v. 1. To set right, remedy or rectify. 2. To make amends for. n. 1. Satisfaction for wrong done; reparation. 2. Correction. [

When the government in the state of California failed to balance the budget on time and the state workers and other employees were subject to furloughs (forced to take time off without pay) along with several community services being shut down,

The following proposal was made on this website titled Balancing California Budget, February 12, 2009 that included a segment:

“Costs Reduction:

Criminal Justice System:

A thorough examination of the Criminal Justice system is necessary from the analysis and news reports.

The State must devise a mechanism to reduce prison population through major social reforms at all levels beginning with the juvenile detention center.

Further, the parole system, three strikes law and other misdemeanor charges reassessed and offenders deployed in monitored community services rather than crowding prisons is the ideal strategy to cutback spending.”

This was later confirmed by Public Policy Institute in California as one of the effective social reforms and cost saving strategy in dealing with the economic and budget crisis.

According to local news and cable networks, recently there has been a horrific incident in the Bay Area involving the slaying of four white police officers by an African American gunman with a long criminal history. The news agencies reported that the gunman was a convicted felon with several murder and rape charges against him and was let out on parole.

Any incident involving loss of innocent lives is a huge human tragedy regardless of the source of violence — war, terrorism or domestic homicide. As the past contributor towards San Jose Police Officers’ family fund and National Law Enforcement Officers Protection Fund, it was intriguing to note a local resident’s outburst unfairly aiming at “The liberal bleeding hearts in California” for not expressing remorse on this particular incident and accused of being responsible for the occurrence. The need for parole system review stated as the reason behind such senseless violence.

First of all, in this blogpost ‘Balancing California Budget,’ many ideas and practical solutions to the various issues confronting the State of California and the nation were earnestly made to help resolve the prolonged budget crisis and several matter relevant to the national economy. In fact, those who are fair minded should observe that many were adapted into the national and a state policy even though, the personal experience thus far…credit is never attributed where credit is due.

Nevertheless, the rapid finger pointing on an incident that is absolutely unrelated to the content is nothing but trash politics.

The parole system review was recommended only for minor traffic and other offenses that sometimes results in misdemeanor charges and not intended to lobby for convicted felons with criminal history involving rape, murder and serial killings.

It reinforces the message on the blogpost for a thorough investigation of the parole board obviously lacking in prudence, diligence and judgment in the handling of criminal and non-criminal activities. Furthermore, at no point in time there was any advice to let the inmates out on the loose with assault weapons in their possession preying on police officers and civilians, when it was clearly indicated that the eligible paroles (non-criminal offenders) be monitored and deployed in community projects as opposed to overcrowding the prison systems.

It is no secret that the congested penitentiaries across the state of California costing the taxpayers’ horrendously and has been a major cause of revenue divestment for the state economy.

Of course, the NRA and the requirement to ban assault weapons is off limit despite the fact that the local newspaper reported several homicides by new offenders to join the herd, (reference to the manner the inmates are held) i.e. the prison population in California and elsewhere.

Wonder why the critics have not demanded such reaction from prominent members with fancy titles in Washington!

Yet, another incident in the past week is attention worthy.

A celebrity and a confirmed democrat opponent visiting the White House to promote personal agenda appeared on a major cable news network during prime time and asserted the following:
“Defending the President against critics;

The President has a mandate but he does not have a mandate from the left wing of the Democratic Party.

The celebrity’s message was “layoff and mind your own business.”

The conflicting message from the celebrity is noteworthy. The complaint is, "The President does not have the mandate from the left wing party, i.e. the liberals," in the same breath delivering the contradictory statement – “layoff and mind your own business.”

Synonymously, the instruction is once you cast the ballot, the voters hurting the most from economic and other catastrophes become puppets and disenfranchised for obvious purpose. Each and every one of them will be appropriately remembered during electoral process.

It is gratifying to see that all the hard work and chronic sleep deprivation during the historic Presidential campaign paid off with the bipartisanship overflowing in Washington and visitors from elsewhere. Interestingly enough, these defenders were conspicuously missing in action (MIA) when the President, the then Senator was fighting the most tenacious and contentious battle in recent Presidential history.

It is worth traveling down the memory lane since the event was not that long ago. Having short or selective memory is the trend nowadays for it benefits the individuals to maintain the balance to fit in with the personality.

The Illinois Senator Barack Obama enters the Presidential race 2008. Comments and rhetoric flying across all available mass communication channels ranging from;

“He is not Black enough, hence not considered an African American”

“The Senator is a rookie democrat”,

“Senator John McCain and I are abundantly qualified to be the Commander in Chief, whereas Senator Barack Obama is not… due to his lack of experience”,

It was not short of a somber moment when the assassination of former Presidential candidate Robert Kennedy Sr. was revisited as a subtle reminder that life is full of surprises and anything could happen to anyone.

This one is from the immediate beneficiary – “With a name like Obama, it was conclusive that he had no chance of winning the nomination leave alone the Presidency,”

When the Presidential campaign progressed to general election, the rhetoric gotten worse with vitriolic attacks like –

“Terrorist, Socialist and Marxist”

Where were all the current saviors within and across the aisle during that time?

Perhaps, minding their business, whatever that was!

Alternatively, gathered with the crowd on the shores betting whether the then Senator caught in the whirlpool would drown or stay afloat. When the Senator made a heroic comeback, the courageous team parked on the shores was delighted and jubilant for their prosperous future.

A guest during his appearance on CNN’s Larry King Live remarked that “President Obama’s name is substituted for Lord Jesus” in certain African American churches.

The local newspaper reported in the business section that some business leaders in the Silicon Valley think of President Obama as a “Kindred Spirit” in the White House.

It is truly heartwarming to view all these selfless well wishers now united as one big happy family and cheer leaders for the President in whom they had no confidence then but now having secured their respective positions will not tolerate any genuine concerns viewed otherwise as opposition from anyone representing themselves or certain members of the community or society.

In their defense, such stance is presented as respect for the office of “Presidency.”

Again, when the same office of Presidency was subject to a mockery and ridicule in rich vocabulary by them during the Presidential battle.

Time is truly the essence for everything.

It is no surprise that the talking points safeguarding their interests in Washington, believe it is appropriate for them to chide those representing the forlorn segment in the society. Little they realize that White House doors flare open for people in Tux with a partner in flowing evening gowns predominantly for easy and privileged access to share their grievances and ideas alike.

Meanwhile, those whose lives are affected by policy decisions or the lack thereof by Washington and Wall Street do not have the luxury to mind their own business. If they could, they would as nothing more matter to an average citizen than living their life and letting others live in peace.

The only available avenue to vent their frustration is cyberspace or public protests in the streets of Washington D.C., New York and San Francisco where such emotional display is routinely tolerated regardless of reasons.

Moving forward with other events where citizens are told to hold on to their thoughts and views for family kitchen table conversations only and reminded that they are not helpful to the leaders in Washington and Wall Street because they are completely disruptive to their creative thinking process and careful planning to rescue the nation from the pit.

In the wake of disproportionate AIG bonuses, there were more rebukes against citizens for their legitimate views and comments from different quarters such as:

“It is not proper to demonize private entrepreneurs seeking profit as this nation is built upon wealth amassment.”

“If the vilifying of the government/public officials continues, it would hurt their morale because they are struggling hard to pull this economy out of crisis and further it will discourage others from enlisting in government jobs.”

Fair enough! Then, why are these reports on the surface and not discussed by all mainstream media and print press?

So, who is responsible for the painful, agonizing economic slump? Is it the entire fault of none other than the overstretching, spendthrift, day dreaming average citizens?

Will Obama, McCain, Dodd Return Contributions From AIG Employees?

AIG Gave More Than $630,000 During the 2008 Political Cycle
By JONATHAN KARL, March 18, 2009

AIG employees kept doling out donations to politicians, including presidential candidate Barack Obama, after getting bailed out with federal funds last year, raising the question of whether those politicians will now return the money.

Will politicians who received AIG cash during the 2008 political cycle give the money back?
(ABC News Photo Illustration)

AIG executives gave more than $630,000 during the 2008 political cycle even as the company was falling apart

According to the Center for Responsive Politics, which tracks campaign finance reports, more than $120,000 of that money was donated after AIG received its first $85 billion in federal bailout funds in September. The company has since received a total of $170 billion in taxpayer cash to prevent its collapse.

Their generosity included more than $23,000 to Obama’s campaign.

Both Obama and Republican presidential candidate John McCain raked in much larger sums from AIG earlier in the year. Obama collected a total of $130,000 from AIG in 2008, while McCain accepted a total of $59,499.

WATCH: AIG Too Big to Fail?

This raises two key questions: Was any bailout money used to make political contributions? And will the politicians who received AIG cash give the money back?

ABC News has asked the question of the big recipients of AIG cash on Capitol Hill, including Rep. Paul Kanjorski, D-Pa., the guy chairing today’s AIG hearing. Kanjorski received $12,000 in AIG contributions during the 2008 political cycle.

AIG’s CEO Edward Liddy said he imposed new rules when he took over the struggling insurance giant six months ago, banning further lobbying of politicians and ending political donations from AIG’s two political action committees.

Records indicate that AIG’s PACs stopped making donations, but contributions from AIG executives continued right up to the presidential election.

One suggestion: Perhaps the money could be paid back not to AIG but to the U.S. Treasury.

Here’s the list of top AIG recipients for the 2008 campaign:
1. Sen. Chris Dodd, D-Conn., $103,100
2. Sen. Barack Obama, D-Ill., $101,332
3. Sen. John McCain, R-Ariz., $59,499
4. Sen. Hillary Clinton, D-N.Y., $35,965
5. Sen. Max Baucus, D-Mont., $24,750
6. Former Gov. Mitt Romney, (R) Pres $20,850
7. Sen. Joe Biden, D-Del., $19,975
8. Rep. John Larson, D-Conn, $19,750
9. Sen. John Sununu, R-N.H., $18,500
10. Former Mayor Rudolph Giuliani (R) Pres $13,200
11. Rep. Paul Kanjorski, D-Pa., $12,000
12. Sen. Dick Durbin, D-Ill., $11,000”

Latest Development: On March 30, 2009, the Fox news channel reported during their late night show that Sen. Chris Dodd has decided to donate any money received from TARP funds through AIG executives to charities.
Just prior to the Presidential Inauguration, the following email arrived.

“Your call to service

Michelle Obama

View Monday, January 12, 2009 2:27:38 PM

To: Padmini Arhant

Monday, January 19th, is also Martin Luther King Jr. Day. Dr. King taught us to live a life of service, and he led by example. He once said:

"If you want to be important — wonderful. If you want to be recognized — wonderful. If you want to be great — wonderful. But, recognize that he who is greatest among you shall be your servant. That’s a new definition of greatness."

Barack and I will be volunteering in Washington, D.C., our new home. I hope you’ll join us by taking part in this national call to service in your community:”

Face the Truth:

As mentioned earlier in the blogpost titled Bailout Debacle the narcissistic culture is widespread and will not miraculously disappear anytime soon.

Ironically, anything offered free is not respected, honored, cherished and regularly taken for granted. The demand for freely available resources increases as a sense of entitlement rather than appreciation for its quality. It is analogous to clean air and water that were once abundantly available on planet earth. The importance and value of this gift from nature was never recognized up until such time when these natural elements became scarce forcing environmental awareness a priority for humans. The end result of such behavior is one has to pay for a bottle of spring water presently and clean air through carbon tax in the immediate future.

At the same time, those who offer advice, ideas and consultancy work with a premium price tag are treated with prestige, praise and due credit irrespective of the substance.

The famous line in “The Dark Knight” “If you are good at something, never offer for free.” aptly describes the subject matter.

Typically, there are two types of people in the world:

One who lives for others and the one who lives of others. Unfortunately, the majority belongs to the latter and those making true sacrifices for their own people and others in the society tagged ‘The Scapegoat.’ They are conveniently associated with doom and failures and alienated from boom and success.

Having said that, there are unsung geniuses in remote corners of the world making phenomenal differences to the people and environment. They are the true heroes and remain so in the eyes of the ultimate authority of the universe.

What really matters in life is,

What you give to others and not what you gain from them?

Human beings best legacy is their virtues and not material value.

Thank you.

Padmini Arhant

Bailout Débācle

March 22, 2009

By Padmini Arhant

The past two weeks dominated with AIG and oligarchs debating over the controversial $165 million and now increased to $218 million bonuses to executives instrumental in driving the insurance giant to the brink of collapse along with the financial markets of the world.

As usual, Washington vs. Wall Street dispute contributed to media frenzy and aptly reflected in the roller coaster performance of the stock market. The interesting factor in the blame game is those pointing fingers at others fail to acknowledge that remaining fingers are pointing towards them as they are equal partners in this charade.

By now, well-educated American taxpayers upon the quest to secure their future convinced that both Wall Street and Washington have serious credibility issues in wealth management and nation governance.

The back and forth allegations in the political crossfire reveals the true sense of Washington politics and Wall Street free market systemic corporate management failure. Again, the beneficiaries in this deal are the legislators responsible for the bailout approval and the corporations rewarded with taxpayer’s funds for unprecedented incompetence in modern economic times.

They are the beneficiaries because the legislators secured their emoluments by rushing the operating budget $410 billion omnibus bill ladened with pork projects to the tune of $8 billion to curb ‘government shut down’ rather than passing the required operating budget and isolating the earmarks spending for individual scrutiny through separate legislation.

The Corporate executives in due diligence spared no opportunities to collect remuneration, bonuses retrospectively and in the foreseeable future to maintain their status among the top 10% wealthiest hierarchy.

Let’s not forget in the Darwinian "Survival of the fittest contest" the weak, fragile and frail average taxpayer doesn’t stand a chance against the ferocious Corporate executives (compared to sharks) and Capitol Hill crusaders.

Events unfolding in the entire scenario deserves attention from every citizen involuntarily pledged to carry the burden of national debt currently projected at $9.3 trillion i.e. $1 trillion budget deficits every year for a decade, 2010-2019.

It is worth examining the role of legislators, corporations and lobbyists in securing taxpayer bailouts more prevalent in the past year 2008 and continuation of it in 2009. Prior to the diagnostic procedure, it is essential to shed light on the alliances forged by the key cabinet members and Wall Street merchants.

According to – Thank you.

Published by the International Committee of the Fourth International (ICFI)

Who is Henry Paulson?

By Tom Eley, 23 September 2008

Henry Paulson rose through the ranks of Goldman Sachs, becoming a partner in 1982, co-head of investment banking in 1990, chief operating officer in 1994. In 1998, he forced out his co-chairman Jon Corzine “in what amounted to a coup,” according to New York Times economics correspondent Floyd Norris, and took over the post of CEO.

Goldman Sachs is perhaps the single best-connected Wall Street firm. Its executives routinely go in and out of top government posts. Corzine went on to become US senator from New Jersey and is now the state’s governor. Corzine’s predecessor, Stephen Friedman, served in the Bush administration as assistant to the president for economic policy and as chairman of the National Economic Council (NEC). Friedman’s predecessor as Goldman Sachs CEO, Robert Rubin, served as chairman of the NEC and later treasury secretary under Bill Clinton.

Agence France Press, in a 2006 article on Paulson’s appointment, “Has Goldman Sachs Taken Over the Bush Administration?” noted that, in addition to Paulson, “[t]he president’s chief of staff, Josh Bolten, and the chairman of the Commodity Futures Trading Commission, Jeffery Reuben, are Goldman alumni.”

Prior to being selected as treasury secretary, Paulson was a major individual campaign contributor to Republican candidates, giving over $336,000 of his own money between 1998 and 2006.

Since taking office, Paulson has overseen the destruction of three of Goldman Sachs’ rivals. In March,

Paulson helped arrange the fire sale of Bear Stearns to JPMorgan Chase. Then, a little more than a week ago, he allowed Lehman Brothers to collapse, while simultaneously organizing the absorption of Merrill Lynch by Bank of America. This left only Goldman Sachs and Morgan Stanley as major investment banks, both of which were converted on Sunday into bank holding companies, a move that effectively ended the existence of the investment bank as a distinct economic form.

In the months leading up to his proposed $700 billion bailout of the financial industry, Paulson had already used his office to dole out hundreds of billions of dollars. After his July 2008 proposal for $70 billion to resolve the insolvency of Fannie Mae and Freddie Mac failed, Paulson organized the government takeover of the two mortgage-lending giants for an immediate $200 billion price tag, while making the government potentially liable for hundreds of billions more in bad debt. He then organized a federal purchase of an 80 percent stake in the giant insurer American International Group (AIG) at a cost of $85 billion.

These bailouts have been designed to prevent a chain reaction collapse of the world economy, but more importantly, they aimed to insulate and even reward the wealthy shareholders, like Paulson, primarily responsible for the financial collapse.

Paulson bears a considerable amount of personal responsibility for the crisis.

Paulson, according to a celebratory 2006 Business Week article entitled “Mr. Risk Goes to Washington,” was “one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in their pursuit of profits.” Under Paulson’s watch, that meant “taking on more debt: $100 billion in long-term debt in 2005, compared with about $20 billion in 1999. It means placing big bets on all sorts of exotic derivatives and other securities.”

According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert[ed] Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”

Paulson then handsomely benefited from the speculative boom. This wealth was based on financial manipulation and did nothing to create real value in the economy. On the contrary, the extraordinary enrichment of individuals like Paulson was the corollary to the dismantling of the real economy, the bankrupting of the government, and the impoverishment of masses the world over.

Paulson was compensated to the tune of $30 million in 2004 and took home $37 million in 2005. In his career at Goldman Sachs he built up a personal net worth of over $700 million, according to estimates.
Washington and Wall Street Analysis:

By Padmini Arhant

The beginning of the chain link usually found on the campaign trail, when corporations fund election campaigns through donation loopholes despite contribution limits by electoral commission and reign in on the successful candidate for the entire term.

After all, in the contemporary world focused on “What’s in it for me” deals, there is no free lunch with the exception of debt-consumed public yearning for believable change and better future offer available resources in terms of time, energy and money during the electoral process and beyond.

Who gets preference by the elected officials in the so-called democracy?

Indeed the Corporations due to the inter-dependency of sweetheart deals and brokering that take place throughout the election campaign. The deafening noise in the Capitol Hill about identifying the guilty party and pursuing disastrous course of action such as 90% tax on AIG bonuses after having approved without any stipulations predictably backfired at the victims none other than the average American taxpayers, presumably the majority shareholder at 80% of the multinational conglomerate.

In a bizarre development, more appropriately deterioration of the bailout fiasco, the headlines, news across the nation reverberate…
AIG sues its biggest shareholder – us

By David S. Hilzenrath, Washington Post – March 21, 2009. Thank you.

As AIG takes billions of dollars from the federal government to stay afloat, it is suing the government for millions more.

The big insurer is trying to recover $306.1 million of taxes, interest and penalties from the Internal Revenue Service. Among other things, AIG is contesting an IRS determination last year that the company improperly claimed $61.9 million of tax credits associated with complex international transactions.

AIG has also asked a court to make the government reimburse it for money spent suing the government.

Given that the government owns 79.9 percent of AIG and has been using taxpayer money to fill a seemingly bottomless hole at the company, the lawsuit might seem like a case of biting the hand that feeds it. But an

AIG spokesman said the company has an obligation to press its case.

AIG believes it overpaid the IRS, and it “has a duty to its shareholders, including the government and other shareholders, to insure that it pays the proper amount of taxes,” spokesman Mark Herr said by e-mail.
Washington tax lawyer Martin Lobel agreed with that assessment.

‘If in fact they honestly believe that they’re entitled to a refund of those taxes, it would be a breach of their fiduciary duty not to” sue, Lobel said.

“On the other hand, the sense of entitlement from AIG is awesome,” Lobel said.

Because the dispute pits the government against a company that has essentially become a ward of the government, the only clear winners are likely to be lawyers, legal experts said. The legal expenses could consume millions of dollars, they said.

Lawyers at the firm Sutherland Asbill & Brenan, which is representing AIG, did not respond to an interview request.

For partners of similar stature to those representing AIG, fees can run $700 to $900 an hour, said Dan Binstock, managing director of BCG Attorney Search, a legal recruiter.

AIG’s dispute with the IRS focuses on taxes for 1997 and dates at least as far back as March 2008.”

L.A. congresswoman defends actions

Husband Linked to Bank that got AID

By Richard Simon – Los Angeles Times – March 14, 2009 – Thank you.

Excerpts from the article:

Rep. Maxine Waters, D-Los Angeles, on Friday defended her efforts to help minority-owned banks – including one with ties to her husband – scoffing at the notion that she, a liberal Democrat, could influence George W. Bush’s presidential administration in deciding what financial institutions would receive bailout funds.

Waters, a senior member of the congressional committee that, oversees banking, has come under scrutiny because OneUnited Bank, on which her husband Sidney Williams had been a board member and stockholder, received $12 million in bailout funds. The money was provided in December, three months after Waters helped arrange a meeting between officials from the bank and other minority-owned institutions and Treasury representatives.

“I followed up on the association’s request by asking Treasury Secretary (Henry) Paulson to schedule such a meeting, as did other members of Congress,” she said.

She said she did not attend the meeting. She released letters by the National Bankers Association requesting the meeting and following up on it – signed by the group’s incoming Chairman Robert Patrick Cooper an officer with OneUnited.

Waters said the decision to provide bailout funds to OneUnited was “based on the merits of the bank’s request, not based on anything said at the September meeting and not based on political influence.”

She said that she has fully disclosed her husband’s ties to the bank. Williams served on the bank board until early last year and held at least $500,000 in investments in the bank in 2007, the most recent year for which public financial disclosure statements are available.

Waters could not be reached for an interview Friday. OneUnited Chief Executive Kevin Cohee said Friday he didn’t have time to speak with a reporter.

Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, said she found Waters’ behavior “inappropriate and certainly has the appearance of impropriety, even if it doesn’t rise to the level of an actual conflict-of-interest under House rules.”

Sloan said Waters’ comments that the meeting focused on the general problems of minority-owned banks “don’t seem credible” in light of statements from Treasury officials that the session became a discussion of one bank’s troubles. “At a minimum, Treasury officials should have been apprised of her interest in the bank before the meeting took place.”

Waters’ efforts, she said, raise a question: “How many members of Congress are having meetings with the Treasury Department pleading for funds for certain banks?”

“Treasury has said they’re going to list the lobbying contacts,” Sloan said.”
Voice of the Electorate:

San Jose Mercury News – Readers’ Letters – March 18, 2009

Obama’s earmarks stance disappoints

I am disappointed that President Barack Obama backed off his campaign pledge to eliminate earmarks. The process subverts democratic government by avoiding votes on specific issues. It encourages our representatives to compete to spend more—if they fail to “bring home the bacon,” they may be seen as ineffective and not be re-elected. The further we move from specific votes for specific programs, the less inclined people are to support the government and the more inclined to resist taxes.

We must promote responsible stewardship. While many of the projects are meritorious, that hardly means they should be funded. Tax dollars are a scarce resource and every expenditure should be carefully scrutinized. Obama was right on this issue during the campaign; he is sliding off track now.

Christopher K. Payne


Ethical Lapse

By Padmini Arhant

The sparring political factions, the far left and the far right along with the centrists is in a strange dilemma today as they witness their reflection in the image of the accused parties in the most expensive soap opera entertainment.

As more Washington and Wall Street scandals are exposed, the more disingenuous the legislators appear to be in their pledge to turn the nation around.

An average citizen struggling to make ends meet asked the following questions –

“Why should I vote for anyone in the next election when I see politics as usual prevailing over the promised inevitable change?

Can the elected officials with public housing, guaranteed regular and several other sources of income, supreme health care, and free transportation relate to the suffering population dealing with job loss, foreclosure and other miseries?”

Unfortunately, the Washington atmosphere is secluded as elitist not making connection with the plight of the populist. The deepening of the recession combined with the multi-trillion dollar national debt forecast is a matter of great concern for the vast majority of population in precarious economic conditions due to job insecurity and declining prospects all around.

The American electorate enthusiastically elected the new administration with the hope to experience the “change” they deserve and the recent events are adversarial to the optimism built during the campaign.

Campaign promises involved Accountability, Transparency and changing Washington by eliminating corruption, cronyism and conventionalism. The passing of the $787 billion stimulus bill and subsequently the $410 billion omnibus spending bill loaded with earmarks confirms the status quo in Washington.

The pet projects, however meritorious they might be, cannot be more important than supplementing K-12 educational funding by retaining qualified teaching professionals and providing after school sports activities for students from lower income families and scores of other important social services for the constituents in California and other states.

It is obvious throughout the legislative process from the authorization of illegal invasion of Iraq war to Wall Street bailouts that lawmakers as representatives of the electorate in a democracy no longer consider it important to peruse the budget and other legislative bills because of the voluminous content. Hence, hastily resort to wasteful spending at taxpayers’ expense.

With the national debt projection in multi-trillion dollars, the wasteful spending in billions doesn’t seem to matter to the sponsors of the pet projects. Apparently, $8 billion added to the national debt for projects experimenting swine odor, road to nowhere, monuments ‘supposedly creating jobs’ when the industries are crumbling apart clearly signifies misplaced priorities by the legislators expected to be in touch with reality of their respective constituency.

The people are hurting and their mere existence is challenged by the hour while Washington and Wall Street continue to engage the nation in burgeoning financial crisis through legal and constitutional confrontations of the bailout débācle.

Perhaps it is time for the victims and the lame duck, the average taxpayers to rise to the occasion and execute power in the mid-term election to restore democratic values, ethical and moral standards desperately lacking in the corporate and political system.

It is best to eradicate the narcissistic culture that permeates the surroundings like weeds destroying the grassland and fertile grounds.

Evidently change is necessary and necessity is the mother of invention.

Thank you.

Padmini Arhant

Senate Debate on Economic Recovery Plan

February 7, 2009

The Senate is engaged in vigorous debate over the economic stimulus package from President Barack Obama.

It appears there is massive confusion in the determination of priorities on this bill. The honorable Senators are concerned about the effectiveness of this bill given the magnitude and the urgency to address serious challenges facing our nation.

Individual viewpoints during debate are healthy and sometimes serve the purpose to remain objective.

However, in this particular process overindulgence could lead to distraction and become counter-productive.

After viewing the Senate discussion of the bill, it is apparent that Senators are yet to configure the policies and programs to achieve the pertinent goals.

For instance, there is mix up between creating jobs and dealing with foreclosures. In order to target the specifics of the current economic recession, let us breakdown the various components in requirement of stimulus and revival.

The consensus is to have a stimulus plan that yields the desired result of averting further economic meltdown by setting the pace for recovery.

As stated earlier in the economic recovery plan posted on February 3, 2009 the culminating factors of the economic crises are;

Housing market, Job market and Stock market.

Housing market – It is important that foreclosures are dealt with effectively and refinancing opportunities made available to homeowners in dire state.

Current plan has $15,000 in tax credits for new homebuyers in an effort to improve the housing prices through home sales. Unless and until the existing homeowners rescued from losing homes through foreclosures and others with affordable mortgage payments to adjust the deficiency in home value, any measures in this sector will be futile.

At the same time, an amendment to the debated stimulus bill to handle foreclosures saving approximately 1.5 million families from this crisis is a repetitive exercise as claimed by those Senators in opposition to this amendment.

The reason being, as articulated by the Senators against the amendment, The Troubled Assets Relief Program (TARP) worth $700 billion was committed for this purpose along with bailout of financial institutions.

Accordingly, $50 billion was allocated towards foreclosures and restructuring of mortgage programs.

Therefore, it is imperative to derive that $50 billion from the previous TARP fund and apply towards the revival of housing market crisis. It is quite possible that $50 billion will not be adequate to provide instant relief but action recommended than inaction.

More reason to verify the exact distribution of the previous TARP fund i.e. $700 billion bailout and redirect any unused portion towards challenges such as housing market and consumer spending.


Objectives of the Stimulus/Recovery Plan:

The primary focus of the current stimulus package must be job creation, aid consumer spending and investments with safe returns.

Job creation: President Barack Obama’s proposal aims for creation of 3 million jobs through various avenues such as

Direct investments in public works projects i.e. repair and reconstruction of infrastructure across the nation.

Tax incentives and financial assistance to small businesses and corporations with limited resources.

Minimize payroll tax to curb mass layoffs.

Restore manufacturing jobs with necessary financial assistance and modified tax structure.

Consumer spending: The stimulus package offers relief to consumers with tax credit of $500 for individuals and $1000 for couples. It is essential for consumers to utilize the credits towards consumption of goods and services rather than reducing personal debts as again that would be beneficial to the financial institutions, the major contributor of the economic recession.

It is worth remembering that the Bush administration experimented with this stimulus strategy last summer, i.e. 2008 with $300 rebate per child and a cap on annual income of the family. Obviously, the trial and error method did not payoff due to neglect of other crisis like housing, stock and financial markets.

The lesson learned is to treat housing, job, financial and stock market crisis individually and isolate them from one another even though they comprise the entire cause of the economic recession.

Other ways to trigger consumer spending is to ease the burden on families with energy costs i.e. heating homes around this time of the year is significantly high and reduction of surcharges and taxes on the energy bill will provide relief to population in the worst affected regions of the country.

Consumers represented across the social and economic spectrum in a society range from youth population to families, senior citizens and self-employed individuals…

Any tax benefits and financial assistance should be inclusive of all potential consumers to obtain maximum gains.

Investments with safe returns: All investments must produce optimum returns, secured with viable collaterals and subject to rigorous oversight. Most importantly, the investment must generate jobs and/or income for taxpayers as well as create opportunities to tackle other issues like health care, energy and education.


Partisan Politics vs. National Interest

It is common knowledge that the two major political parties have unique positions on fiscal policies.

The Republican Party is vehemently opposed to tax increases to reaffirm the political platform of the party, while scouring for wasteful spending.

Fiscal responsibility is necessary for a nation saddled with alarming deficit. Nevertheless, desperate times call for desperate measures. Now is the moment to rescue the nation with prudent investments and techniques to revitalize growth in all sectors.

During elimination of costs proven liabilities, diligence is required from legislators to distinguish investments from wasteful spending. Funding National Endowment for Arts is a worthy cause as it promotes creative and Performing arts besides employment opportunities for a significant population who are ultimately taxpayers in the economy.

Sometimes, political debates overshadow the ambition to resolve major national crises.

The Democratic Party must be committed towards immediate mission to revive the economy and therefore abstain from elaborate spending spree on frivolous projects that form the basis for unnecessary political debates.

Compromise on both sides by finding common ground to restore consumer and investor confidence is vital for economic recovery.

With mass layoffs, collapse of housing, financial and manufacturing sectors… partisan politics is symbolic of Washington and it is time to get past conventional ways to demonstrate that representatives in the House and Senate care for their constituents, the real victims of the economic catastrophe.

Conciliatory effort and collective action from all sides is what required to helping our nation survive the worst economic period in recent times.

The Senators can confirm their willingness to work together for national interest by approving the President’s recovery plan.

Taxpayers as electorate are viewing the situation with the hope that policy makers will put aside their differences and reject political scores by pledging support to the job creation proposal from President Barack Obama.

Thank you.

Padmini Arhant

Economic Recovery Plan (ERP)

February 3, 2009

It is obvious from the headlines and news editorials across the nation that the economy is in deep recession.

San Jose Mercury News January 31, 2009 – Thank you.

GDP plunges at 3.8%, worst slide in quarter century

Autos – Valley car sales hit 15-year low – and 2009 looks worse

Wall Street – Worst January ever as Dow drops 8.8% this month

Washington – bruising battle over stimulus, Obama acts to bolster labor

Mortgage crisis spreading to affluent areas.

Meanwhile – Exxon Mobil sets U.S. record; $45.2 billion annual profit.

World Economic Forum in Davos, Switzerland concludes that the world is dealing with financial crisis with no solutions.


Optimistic View

Despite such gloom and doom, there is light at the end of the tunnel.

A thorough review and analysis of the problems that primarily contributed to the current economic crisis is essential in understanding the fundamental cause of the present economic recession.

Then addressing each issue on priority basis including the failure of various stimulus packages by the previous administration must be an integral part of the remedial measures for the economic recovery.

It is common knowledge that the origin of the current recession stems from various sources,

1. Subprime mortgage crisis contributed to housing market decline.

2. The major components attributing to the decline in housing prices are foreclosures due to default homeowners and delinquencies in mortgage payments.

3. Financial institutions holding high-risk mortgage backed securities sought bailout of their insolvency with taxpayers’ generosity.

4. Banks and other financial institutions decided to stranglehold the credit market leading to liquidity freeze with an adverse effect on consumer based industry represented by small businesses, retail outlets, medium corporations and homeowners alike.

5. Small businesses, Retail industry and medium corporations as the foundations of the economic infrastructure could not survive or sustain growth in the absence of credit facilities blocked by the financial institutions.

6. As stated earlier on numerous occasions, the collapse of small businesses, retail industry and medium corporations have a domino effect on wholesale manufacturers ultimately owned by major corporations in any industry.

7. Hence, the layoffs triggered from the bottom of the economic pyramid spread across the aisle and all the way to the top affecting emerging and viable corporations in many sectors.

8. As a result, the unemployment rate went soaring up to 7.8% with most states reporting double digit in this respect.

9. The credit crunch combined with housing market crisis significantly hurt investor confidence and led to the selling frenzy of stocks and investments by short term and new investors in the stock market. In addition, the current static in the credit market and the general economy has forced average consumers to live off their investments and savings.

10. Despite, capital infusion through bailouts and consistent productivity by all industries, the dismal stock market performance is related to poor earnings from the sluggish consumer spending in the competitive market and globalized economy.

Therefore, Consumer spending is the catalyst for revival of the job sector and corporate growth with desired earnings eventually reflecting in the stock market performance.


Primary Cause and Effect

Housing market crisis – Decline in housing prices due to Foreclosures, Delinquency in Mortgage Payments with no refinancing opportunities.

Liquidity freeze or Credit Crunch – Small businesses, Retail industry and Medium Corporations deprived of cash flow by banks and financial institutions declared bankruptcy and subsequently the manufacturing sectors as well as the large Corporations producing mass layoffs.

Inadequate Consumer spending – Because of rising unemployment and scarce financial resources with no access to home equity other than dwindling investments in savings and stock holdings.

Lack of Accountability and Transparency from previous bailouts – Wall Street bailout of $700 billion have not been followed through with Corporate executives rewarding themselves to a tune of $20 billion in extravagant bonuses and perks.

Inaction and dormant role by the Congressional Oversight Committee set up for overseeing the purpose of bailout i.e. activate lending to the deserving and qualified business sectors and homeowners has further exacerbated the credit crunch.

Alarming Deficit – Multi-trillion dollar deficit accumulated by the previous administration from excessive borrowings predominantly from China, Saudi Arabia and Japan precipitously diminished the dollar value in the international market.

GDP plunges because of trade imbalances and culmination of all of the above factors in the domestic front of the frail economy.

Financial Commitments – Funding two major wars in Iraq and Afghanistan exhausted the national treasury and reserves besides overshadowing the onset of economic recession at home.

Wasteful Spending – Some legislators’ penchant for pet projects aka pork barrel spending or earmarks to oblige excessive lobbying from campaign donors led to misappropriation of budget replacing funding for essential services benefiting children, disabled and mentally ill patients, senior citizens, veterans, youth population, retirees and all those at the bottom of the socio economic strata.

Ironically, budget is vigorously debated over matters that are counter-productive while ignoring the myopic view of issues…

Universal health care

Energy efficient programs

Overhauling of educational system particularly public schools, state and community colleges through adequate funding.

Effective environmental policies.

Investments in science and technology to advance research and development in the areas of stem cells, regenerative medicine and Genomics.

Creative Arts and learning with a broad perspective of cultural exchanges between nations.

Space exploration in search of knowledge and facts for humanitarian cause.

Channeling appropriation of funds towards Peace Corps to promote peace and diplomacy for national security as opposed to defense spending and proliferation of nuclear technology.

Veteran Affairs involving care and rehabilitation of combat forces during and post war period as well as extending housing, education and health care for their dependents.

Expansion of Sports and recreational activities for public schools and communities through federal funding to States as a measure to keep health care costs down.

An elaborate version will be presented on what federal and state governments can do for the citizens who are taxpayers, consumers and most importantly electorate in a democracy.


Time for Action – Effective Strategies

Since the cause of the economic crises have been identified, it is time to address the problems with effective solutions i.e. strategies.

The nation desperately needs relief from the burgeoning crises:

Housing market crisis – Immediate measures required with a moratorium on foreclosures for two years supplemented with refinancing for default and delinquent mortgagees at the existing market rate or lower to adjust the deficiency in home value.

Liquidity Crisis or Credit Crunch – It is incumbent on the Treasury Secretary Timothy Geithner and the Federal Reserve Chairman Ben Bernanke along with Congress and the Congressional Oversight Committee to hold Wall Street accountable for the $700 billion taxpayers’ funds and demand they facilitate liquidity and honor the commitment to the taxpayers.

Failure to comply with the requirement should have implications such as sale of all those beneficiaries’ assets and financial instruments withheld as collateral during borrowing assuming the previous administration adhered to the regular lending practices particularly a bailout of this magnitude.

Corporations and legislators alike must be held accountable for their actions and inactions to demonstrate that no one is held above the law in the land of republic.

Consumer Spending President Barack Obama’s economic stimulus package for $819 billion passed by Congress and now the proposed package worth $867 billion for Senate approval deserves attention and action.

As discussed above, consumer spending is vital and instrumental to stimulate economy.

Again, consumers as victims of mass layoffs, debilitating job market, volatile stock market, and declining housing market have nothing to rely upon for income normally used in purchase of goods and services.

The cash strapped economy has evolved into a stagnant quagmire with disastrous consequences. It is imperative to relieve the economy with necessary tools that are contained in President Obama’s stimulus package.

President Barack Obama has unveiled the American Recovery and Reinvestment Act to revive the economy by easing the burden on consumers with debts, failing small businesses as well as Corporations in requirement of capital investment.

President Barack Obama during his weekly radio address acknowledged the urgency to get credit flowing again to families and businesses. The President further promised to help lower mortgage costs and extend loans to small businesses so they can create jobs.

The administration, the president said, would ensure that chief executives “are not draining funds that should be advancing our recovery,” and the assistance to the financial system would be accompanied by “unprecedented transparency, rigorous oversight and clear accountability, so taxpayers know how their money is being spent and whether it is achieving results.”

The President was empathetic towards homeowners, students and small businesses in need of loans but left to fend on their own while Banks have been extended a hand with a bailout.

There is obviously a stark contrast in the objectives between the stimulus package of last year and the current one by President Barack Obama.

According to an article by New York Times on this issue – “The previous administration’s The Troubled Asset Relief Program (TARP) was supposed to be used up to buy the banks’ troubled mortgage-related assets. But, the Bush administration’s Treasury Department shifted gears, using the program instead to shore up the banks by injecting them with capital.

But instead of being inspired to lend more, too many banks hoarded their new capital, critics of the financial industry say.”

President Obama is seriously committed towards alleviating the suffering of ordinary citizens with necessary tax breaks of $500 for individuals and $1000 per family and tax incentives to small businesses including corporations with limited resources.

The Obama administration’s economic stimulus package has specific targets to bolster the economy and welcome sharing of public concerns on issues related to jobs, business, mortgage situation…

Since the commencement of his Presidency, the President has pledged support for the victims of the worst economic crisis. It is apparent from the actions taken within short period of the President assuming office.

The new millennium has brought series of disasters on our nation with the economy hitting rock bottom. There are undeniable challenges ahead and it requires the entire nation to come together in resolving every crisis.

Even though, a new President was elected on the message of hope and change , it is the responsibility of every citizen and particularly the legislators as representatives of their constituents to act immediately in the approval of the proposed stimulus package.

Any procrastination will only lead to further deterioration of the worsening economy. It is not the time for partisan politics as the stakes are high with too many unfortunate events unfolding as time goes by.

The victims are none other than the electorate entrusting power to their legislators for action on normalization of job, stock and housing market.


Summary of Economic Recovery Plan

President Barack Obama’s stimulus package is essential to revive consumer spending, housing market, job market and corporate growth directly influencing stock market performance.

It is important to ensure that pork barrel spending does not find its way in this stimulus package during deliberation by reluctant policymakers.

Economic recovery is inevitable with discipline, determination and drive –

To eliminate or minimize costs proven liabilities.

Strategic planning and monitoring through rigorous oversight.

Implementation of effective policies with guaranteed results.

Targeting problems with efficient programs.

Restoration and preservation of jobs through investments benefiting the workforce.

Reviewing tax structures to create incentives for business sectors dealing with liquidity crisis.

At the same time closing any gaps or loopholes for tax evasions by corporations and legislators.

Relieving homeowners with appropriate measures as suggested above.

Reform of institutions lacking in ethics and moral conduct.

Enforcement of law and order with consequences for non-compliance regardless of hierarchy.

Conscientious effort to reduce deficit by restraining overseas borrowing and commitment towards domestic economic growth within a specified timeframe.

Pursuit of common goals and objectives via collective action is important reflecting every individual’s desire to succeed in all endeavors.

Our nation provided opportunities, prosperity and happiness during economic boom and now it is the moment for all citizens to collaborate and help our newly elected President Barack Obama execute the tasks required for speedy economic recovery.

The fate of our nation is hanging in balance from the monumental crises and legislators in the Senate have an awesome responsibility to move forward and approve the economic stimulus package proposed by President Barack Obama to avert more calamities.

Thank you.

Padmini Arhant

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