Have reported ”amazing grace” through the Amdontha bearing this name, according toBusiness Insider that she was working as an employee at the Central Bank sales, “LehmanBrothers”, which was declared bankrupt in 2008.

However some of the composition of relations and dismissing the bank about two monthsbefore the announcement of bankruptcy, Grace began to field a new and totally different, especially after becoming desperate to attain a job in the previous experience, I decided to respond to the announcement asked dancer defined. Accepted where it says it ismaintained in spite of all the deliberations of Commerce and Finance at Lehman Brotherson her diminutive height elongated.

Head Size Tells All

A group of scientists from the U.S. and Britain have concluded that not only can the shape of someone’s head determine how well his company will do, but it can also predict if the CEO will act immorally.  Where were these researchers when the likes of Bernie Madoff, Ken Lay and their ilk were running their respective companies – and a lot of other people’s lives and investments – into the ground?

The researchers say it’s all about a person’s facial width to height ratio – or what they call the “CEO Facial WHR.”  They say there are physical traits in a person that will predict if they will be successful in achieving organizational goals. They point to people like the very successful Southwest Airlines’ CEO whose WHR has always predicted success and Lehman Brothers CEO Dick Fuld, whose face should have predicted where that company went.

No Women Need Apply

Their research was based on their analyses of photos of 55 male CEOs of publicly traded Fortune 500 organizations. They only used men because this relationship between face shape and behavior has only been found to apply to men (they think it may have something to do with testosterone levels – sorry gals). They also gathered information on the companies’ financial performance and analyzed shareholder letters to get a sense of the kind of thinking that goes on at those companies.

CEOs with a wider face, relative to the face’s height, had much better financial performance than CEOs who had narrower faces. “In our sample, the CEOs with the higher facial ratios actually achieved significantly greater firm financial performance than CEOs with the lower facial ratios,” said the researchers.

So, would this work in determining the winner of an election.  Let’s see, President Obama has a long narrow face.  Herb Cain, on the other hand has a broad and short face. Mitt Romney and the other republican contenders?  Hm-m-m, hard to say.

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In a cyclical recession, the government can either stimulate spending, thus clearing inventory and stimulating purchases from manufacturers, or by assisting manufacturers directly so they weather the storm.   As many Americans are learning, our government has dramatically failed in the latter.  It’s hard for an economy to rebound when many manufacturers no longer have plants in the United States to rehire workers. 

Our government has done a great deal to change our economic structure, and the result of their mismanagement is a structural recession.  Ignore those who measure recovery by the stock market.  AIG, GM and Lehman Brothers are no longer part of the elite 30 measured by the Dow.  So those numbers don’t even show a comparison of the same companies.  Furthermore, since many of those companies are multinationals, their growth might not be a reflection of how they’re doing in the American market.  A falling dollar has also inflated the value of stocks.

The long term impact of normalizing trade relations with China, deregulation, the subtle conversion of America into a de facto police state, failure to achieve energy independence, the prolonged credit binge to artificially inflate our economy, and the cultural devaluation of education, have all caused structural damage to America’s economic future.  

When a maiden gives away her maidenhood, there’s no getting that back.  Political leaders in both parties failed to understand the value of America’s unique position.  We cannot recover what was lost simply by getting our GDP to rise.  For short term political and financial gain, our leaders destroyed the long term edge America should have had.  Pandora’s Box has been opened, and the resulting discord requires us to fight for our survival.

Most people know very little about economic policy and lacked interest until America’s economy took a dive in 2008.  Sadly, despite the macro economic ramifications of their policy decisions, most politicians don’t really understand economics either.  We are in desperate need of competent leaders in the field, but the public will not be able to identify them without learning about this subject.

Economies are always in transition, and therefore in a sense, new.  There have never been two years in which the economy was the same.  New discoveries, products, disasters, etc., create new variables that impact economic activity.  Rather than being called the dismal science, economics should be considered the adaptable science.  The idea of science is to establish facts that ring true no matter the circumstances.  However, economics are entirely dependent on the circumstances, and this is what makes it so dismal for an economist trying to establish their economic theory. 

The constant novelty of economics is why you find this cycle of booms and busts.  Investment is always a gamble on catching the upward trend of that cycle.  What has given Americans the confidence to make that gamble, which in part provided the capital that allowed our economy to maintain an upward trend over time, was the structural soundness of our economic system.  Damage that structure and the odds of that gamble paying off diminishes, causing investors to flee and decreasing the capital required for entrepreneurs to start new businesses.  Let us now consider some of the aforementioned policy decisions that have damaged America’s economic structure.

In 2000, the Senate voted 83-15 to extend permanent normal trading relations (PNTR) status to China.  If the middle class were a dam, our glorious leaders had just punched a giant hole in its base.  Clinton’s accomplishment of getting PNTR passed with “bipartisan” support, insured that the days of many middle class jobs in America were numbered.  Because of the values our economic system was based on, we had up until then refrained from having PNTR with China.  Today, we suffer the consequences of our leaders flushing those values down the toilet.

I will not go into the whole Chinagate scandal with Clinton getting money illegally from China, though people should read about this.  From an economic standpoint, a fraud was perpetrated that PNTR would benefit Americans.  Sure, we got a lot of cheap goods, and companies like Arkansas based Walmart did very well.  Walmart was is on the stock exchange, and mom and pop stores aren’t, the market rises when the big boys crush small businesses.  Their market dominance then allows them to buy more influence and tax breaks from our politicians.  Read “Free Lunch” by David Cay Johnston, to see numerous examples of this.  Is the purpose of our economy to make a few people extraordinarily rich and let politicians take credit for bigger GDP numbers, despite a dissolving middle class?  Where are our values?

The difference between those living under Chinese oppression today, and those who lived under communism in Eastern Europe prior to 1989, is that Eastern Europeans had hope.  They knew Americans wouldn’t compromise their values and there was reason to continue struggling internally until tyranny was overthrown and they were free.  Today, we provide China with technology that facilitates controlling dissidents.

We now hear Americans debate about which country is more dependent on the other.  Americans have forgotten their heritage.  For what do we distract ourselves to the point of forgetting who we are?  Some cheaply made trinkets!  Americans laugh about how Manhattan was bought from the Indians for some beads.  How ironic that we now sell our souls for flat screens and tennis shoes.  When Americans recall that our country was built on principles, not money, they will understand that politicians have damaged what democracy represents in the XXI century.

It is up to Americans to support the Chinese people by refusing to buy Chinese goods until the following take place.

1. Freedom of speech and religion.  It is sacrilege for a so called “Christian Nation” to keep a communist regime in business that denies fellow Christians freedom to worship.  Furthermore, the wall that fell in Berlin was as necessary then, as the need for the internet firewall to fall in China today. 

2. A minimum wage, child labor laws, and worker safety protections, must all be enacted.  Not doing so allows an unfair cost advantage in manufacturing, and it’s contrary to the human values democracy is predicated on.

3. China’s currency, the Yuan, must be allowed to float and can no longer be pegged to the dollar.  

4. Recognition of Tibet and Taiwan as sovereign nations.  Both countries have a far greater claim to independence than Kosovo, which the UN backed.  Furthermore, since China pressures African countries to sever ties with Taiwan in exchange for debt forgiveness, it’s time we put the pressure on China.

Our declaration of victory over communism was premature.  Chinese communism has metamorphosized into a threat to our entire capitalist system.  Until China is forced to trade fairly, we continue to damage the structural integrity of our system.  This will not be easy.  Standing on principle usually isn’t, but that’s who we are.  While past generations had to sacrifice lives on a battlefield, all we need to do is exercise self-control.  Start making conscious decisions on what you’re buying, and understand what you promote as a result of that purchase.  If it’s the demise of our own economy, that’s not a good deal, no matter how cheap it is.

The one thing Congress could do is pass a bill requiring all products sold over the internet, or in catalogs, to show where they are made.  As a matter of free speech, consumers should know where their purchases originated.  I bought a “Clear Tech” TV and it doesn’t even say in the owner’s manual or on the TV where it was made!  Write your congressman and send a copy of this blog.

While PNTR with China is the worst policy decision, I will briefly cover a few others that have tremendously damaged our economic structure.  Deregulation is what allowed banks to engage in the high risk practices that resulted in taxpayers having to bail out that industry.  Obama’s top economic advisor, Larry Summers, was a staunch advocate of deregulation in 1999 when Congress, 90-8, repealed part of the 1933 Glass-Steagall Act.  So, the foxes remain in the chicken coop.  When politicians deregulate, they focus on the benefits to private entities who pay millions to lobbyists to push their agenda.  This comes at the expense of the general public.  Our politicians lack of understanding of how markets work, and their failure to protect the public interest, has been devastating.

As to the policy of turning America into a police state, it is ironic that one justification for opening trade with China was that we would spur democratic change.  Yet, in recent years, it is American institutions that have compromised their values and adopted a totalitarian perspective in social engineering.  More power to the state, with more laws and prisons, to promote public safety.  In a truly democratic state, education and hard work are the key mechanisms used to create peace and prosperity.

Since much of my website is dedicated to the crime issue, I will focus on one economic element I haven’t touched.  As our government has grown, we’ve taken a lot of very talented people out of the private sector.  They could have done a lot to stimulate growth in the economy.  While there is nothing wrong with the occupations of lawyer, prosecutor, correctional or police officer, public services can only grow while the private sector prospers.  The desire  to create the next business or product is dampened when so many find it much safer and easier to work in the public sector.  You can’t blame a high school kid who sees that with overtime they can make as much as the governor for being a correctional officer.  Why spend all that effort and money to get an education when you can get trained at an academy in less than a year and have a career?  This is why police states are economically unsustainable.  They waste too much talent.

Let’s sum all this up by reminding you that all this rubbish our politicians have handed us was done with “bipartisanship.”  Bipartisan is a metaphor for collusion and conspiracy.  Yet today we hear politicians call for the holy absolution of bipartisanship to fix our nation’s problems.  If both parties sell out America’s principles, how does a public who elected them to protect those interests benefit?  We have compromised our way into an abyss. Now the media and politicians try to talk up the economy and tell us the recession is over.  This is America!  Until we recapture our former standard of living, nothing is over.  Any leader that’s satisfied with some numbers getting better, isn’t worthy of representing Americans.

If you’d like to see more of my work, check out my website, www.politisandjustice.com.

“The impact of the crisis on financial analysis techniques and the profession of financial analyst” and “Corporate Governance: Effects and Realities”, two themes that were the subject of a conference-debate As part of monitoring the impact of the crisis on the global economy, organized at the Maison de l’Entreprise Saturday, November 14 by the Tunisian Association of Financial Analysis ATAF and held. 

The conference was attended by Mr. Ferid Ben Brahim, president of ATAF, members of IACE and leading financial experts, including Mr. Yann Le Fur, a professor at HEC Paris, emphasized in his speech on the importance of business financial analyst and the fact that the financial crisis was an indicator of the trade. 
Mr. Le Fur has defined financial analysis as a tool for decision support. Financial analysis is a recommendation to enter or not in a case whether at a bank or stock exchange. It is a study of the past that determines the expectation of future cash flows of the case. The Financial Analyst is an intermediate box, it simplifies and makes the information more accessible and easier to interpret. 
The elements of financial analysis can be: the financial structure of a business (balanced or not), the PER for the market analysis, the result, cash flow, … 
Thus, the financial crisis has revealed the interest of the profession of financial analyst: The financial analysis takes its power in banks (credit committees have proliferated in banks). 
A flash historic crisis and its effects 
The financial crisis that erupted in 2007 and did not end to end is a financial crisis marked by a crisis in interbank liquidity and credit crisis (credit crunch: Credit Crunch), which began around July 2007 . 
It has its origins in the bursting of bubbles Deployed Operations, financial institutions have suffered significant losses due to subprime crisis. It worsened in September 2008 with the collapse of several financial institutions including Lehman Brothers, causing a systemic crisis and the beginning of the implementation difficulties of multiple states. 
It led to the fall in equity markets and a general slowdown of the economy or a recession in several countries since 2008. 
The impact of the crisis in 2008 and 2009 is worse with a decline in earnings, a crisis characterized, according to Mr. Le Fur, by its violence compared to past crises. Specifically the night of September 15, 2008 – Lehman Brothers – there was more funding and the primary concern of businesses was the cash. 
In France especially, the political dividend (share of profit allocated to each share of a corporation) was of most concern during the crisis, was to add Mr. Le Fur. 
LBOs (financial arrangements based on the funding appropriation) is thus severely affected by the crisis: Sharp decline buying and almost no new operation in France.

     Just this evening, an american television channel reported that food allergies are often misdiagnosed. It turns out that far less people have such allergies than was previously thought. Millions of people have been living their whole lives avoiding perfectly ordinary, nutritious foods out of misplaced fear instilled in them by so-called experts.

     A nationally syndicated advice column for investors recently recommended a well-known retail stock, yet only six months earlier the same column advised against buying or even holding that stock. The many readers who undoubtedly followed the first advice, coming from an “expert” source, must be wondering what to make of this new, contrary advice. It is quite certain that many of them will simply buy the stock again, without reflecting too deeply on the details of the new recommendation, since it comes from an “expert.” Most notoriously in this category ranks the disastrous advice by Jeff Cramer to his television audience not to sell their Lehman Brothers stock the day before the company collapsed. His viewers blindly followed his advice because he was believed to be an expert on the stock market, and must have been more than a little surprised to learn, too late for them, that his “expertise” in Lehman Brothers’ stock value consisted of taking the word of his old friend, the CEO of Lehman Brothers, that the firm’s financial situation was solid.

     Distinguished economists and central bankers around the world routinely held that there was no housing “bubble,” until there was one. Some have acknowledged their error in that case, but continue to insist that there is no way to know that an economic “bubble” is forming until it bursts. This is accepted as gospel by the media and the public at large, because it is the consensus of “expert” opinion, even though the experts themselves have admitted errors of judgment in the past.

     All the “experts” agree that a college degree is necessary for economic success in the modern economy. In countries where third-level education is free, this presents no difficulty for students or their families. But in countries like the United States, where getting a college degree involves huge expenses for students and often for their parents too, blind acceptance of this “expert” opinion can lead to years of considerable hardship, yet no one stops to ask if all this burdensome expense is really necessary for all, if perhaps there may be – or at least should be – a much less expensive way for the average person to obtain the education needed for career success.

     Even in the Great Recession in the United States, government, with all its “expert” advisers, could only think of two major responses to soaring unemployment: ever-extending unemployment insurance benefits and educational grants, both of which added billions of dollars to the national debt. Necessary and helpful as those actions undoubtedly were, no one in government or the media even considered simple, commonsense, no-cost solutions, such as those that I have suggested in my article, “Cost-Free Ways to Reduce American Unemployment Quickly,” at http://www.socyberty.com/economics/cost-free.

     In future articles, similar to my effort on unemployment, cited above, I will offer commonsense alternatives to the received wisdom of the experts in these and other areas of widespread interest and concern.

In the current economic crisis, the bankers and financiers claim they are ‘too big to fail’ because, if they do, they will bring down with them all those people whose savings will be lost or whose contracts or banking details they hold. As was demonstrated by the collapse of Lehman Brothers, this multiplier effect is genuine and if companies are allowed to fail, there can be enormous collateral damage throughout all aspects of the economy and, in a globalised world, in many other countries around the world. Inevitably, it is the poor and vulnerable who suffer the most.

So is ‘too big to fail’ a good thing or an inevitable thing? It seems clear that it is not – if an organization must for genuine reasons be of such a size that it cannot be allowed to fail then the taxpayer will be obliged to pay its bills from time to time. Consequently, it would be better to find ways to prevent firms from attaining such a size and such a position of power – this need not be seen as punishing success, since the executives concerned are free to make their money in many different ways, so long as they do not attain such size and power. Quite how this might be done will vary from country to country since the institutional and societal arrangements in each also varies considerably. So too does the ability of the political executive actually to effect change mandated by democratic victories also vary.

She got the job back in December 07 to the surprise of nearly everyone. The angle was that Lehman President Joe Gregory was looking to improve the company image by promoting more women and ethnic minorities. But did he have another agenda, knowing that big trouble was waiting in the new year? From Ms Callan’s point of view this was too good an opportunity to pass by, whatever happened. The worst happened as a financial hurricane broke in March and Wall Street bank Bear Stearns went broke. Speculators lined up a vulnerable looking Lehman as the next fat, sitting, target. 

Not a good time to be sitting in that seat and the question is, was she set up to take the fall? Lehman had been using an accounting strategy to disguise its true financial position. This was known as Repo 105 and the simplest way to describe it is to say that bank borrowings were not disclosed. This allowed the balance sheet to be boosted by up to $50 billion. It is alleged that Erin Callan ignored warnings about the situation and instead went on TV to reassure the world that Lehman was sound. She used words like ‘incredible’ and ’strong’ in a hard-sell of the bank’s performance. She said the bank was ‘ready to open the kimono and reveal the story’. Speculators were not impressed and the bank was allowed to collapse under the weight of toxic debts.

The event set off the world wide credit crunch as the money tap was turned off, companies collapsed and millions of jobs were lost. It’s easy to argue that she simply made a disastrous situation worse. Yet the financial world is such a gambling casino you could just as easily argue that by fronting it out she might have kept her bet alive and eventually retrieved the situation. In reality the odds against that were way too big, but did she know that? Even Lehman Chief Executive Dick Fuld has claimed has claimed that he too did not understand fully what was going on. Yet isn’t that what Chief Executive’s are for?  

What if it had been Lehman Sisters?

Erin Callan left Lehman and the case for promoting women into the very top jobs took a massive hit. She might have broken through the glass ceiling but then she fell off a cliff. Harriet Harman, a Minister in the British Government and a keen promoter of women in top jobs said that if Lehman Brothers had been Lehman Sisters this would not have happened. We will never know, the strategy will not be tested any time soon.

Vicky Ward has written a book about Lehman called the Devil’s Casino and says she was greatly helped by a ‘Deep Throat’ employee who gave her the inside story of the company’s activities. She says there was an atmosphere of intimidation with staff afraid to speak out about what they knew was going on. Her view of Erin Callan is that she should never have taken the job, she wasn’t qualified.

Erin herself now has plenty of time to think about all that. She has retreated to a Greta Garbo style seclusion in the luxurious and secure beach haven of New Hampton, well away from Manhatten. But she doesn’t want to be ‘all alone’, a New York fireman is a close friend. Perhaps he can help her with some crisis management.     

Around late 2001, the United States housing market was experiencing an uptrend due to the surplus of home financing options that could get almost any person with any financial history into a house. The increase in buying sparked home values to generally rise, and to seem attractive as investments to those that still did not own homes of their own. This especially caught the eyes of those with bad credit that could use a home that generated interest income simply by ownership, resulting in the creation of what is known as the Sub-Prime mortgage industry. Sub-prime mortgaging involves banks and other firms taking risks by lending funds to those with bad credit and a history of defaulting on loans or filing for bankruptcy. Their credit scores did not meet the standards set by mortgage giants Fannie May and Freddy Mac, but the loans were given out anyway. Because the demand for loans from these individuals with bad credit was so high, the risk could be offset with the chance of a large return for the firms due to a fixed high percentage interest rate, or a variable interest rate that could increase over time. This impulse in home buying only furthered the inflation of home values, which was beginning to seem like a rapidly inflating bubble. These sub-prime mortgages with outrageous potential returns seemed like amazing investments, and led to investment banking firms such as Bear Sterns and Lehman Brothers purchasing up all these mortgages from the lenders that had created them. Then as one can guess, problems began occurring similar to bombs with timers.

After being traded from bank to bank with each firm taking a slight cut of the interest, one bank or another would end up being the proud owner of these overvalued, toxic investments. These mortgages with mouth watering returns began to rapidly go bad in early 2008, as individuals tricked into variable rate mortgages ended up with monthly payments that had doubled and outpaced their earnings. People began to default on loans, and had difficulty refinancing for a different rate due to fine print in the loan agreements they had signed. At the same time, a downtrend in house purchasing began. So many foreclosures occurred that some investment giants were put out of business. When these giants toppled, it drastically affected other businesses and their ability to obtain credit and operate due to heightened restrictions, seizing up the credit market. Then layoffs occurred, leading to increased unemployment, and a further decrease in the real estate market, and leading to where we are today. President Obama deemed the situation a national emergency not safe to leave alone to correct itself.

As of February 17th, 2009, President Obama’s economic stimulus package was passed, with Senate and House versions of the bill merging to create a plan costing about $789,000,000,000. Obama’s administration has described the package as an investment in our country’s transportation and infrastructure. The strategy behind this outlook is to use government deficit spending to get men and women back to work. In the process, the goal is to also repair or replace aging infrastructure such as roads and bridges that will improve the overall flow of goods and services throughout the economy as a whole. The system also places some emphasis on updating America’s general technology, information systems, and industrial buildings to upgrade to a faster, greener nation. Some of the various allotments of funding in these categories include: $176 million for renovating Agricultural Research Buildings, $200 million for public computer centers at community colleges and libraries, $300 million for “green” cars for federal employees, and 5.5 billion for “green” federal buildings.

The stimulus package also intends to provide immediate relief to desperate individuals and families through various tax credits on homes and new vehicles, basic tax cuts, and increasing aid to the unemployed. One addition is first time home purchasers will now be eligible for a tax credit up to $8,000 depending on the value of the home purchased. The credit will not need to be repaid provided the ownership of the home is retained by the purchaser for three years. This is designed to curb the current downtrend of home values by building demand. Car purchases will also help stimulate the economy by aiding struggling automotive giants while providing incentives. Buyers of new cars in 2009 are eligible to deduct the sales tax from the purchase from their taxable income during the following tax season. We will even see aid as simple as reductions in income taxes implemented into our paychecks. The average worker can expect to see $400-800 added to his/her paycheck in increments over the next year. Lastly, the unemployed will receive benefits such as a lengthening in the period in which you can apply for aid, and making up to the first $2,400 of unemployment aid exempt from taxes. These three cuts and implementations encourage spending to boost the economy instead of hording cash for whatever turn the economy may take in the future, as well as sparking hope to search for new jobs. They also instill a sense of safety for those worried that they won’t be able to make it paycheck to paycheck.

Now that we have established an understanding of how this economic recession came into being, and have analyzed the solution being put into action by President Obama, the positive side of the situation draws to a close. The solution that has been drawn for this situation seems to be the only choice we have, according to President Obama. In some ways, his ideas will have a positive impact on the country, but in other ways, his ideas being implemented in this package will do more bad than good. Financial analysts complain that the choice shouldn’t be this bill or nothing. We deserve to have an alternate choice. The situation is like a person ill with pneumonia and is being diagnosed by a doctor. The doctor looks at the patient and says, “Well, he seems to be rather sick. Doing nothing isn’t really an option here, I think we should amputate.” Not only is the stimulus the only choice we have been presented with, but it has many fatal flaws.

The first major flaw of the stimulus package is that the plan falsely assumes that the government itself can create more wealth. The government does not create wealth; it merely moves it around, spending other people’s money less efficiently than they could spend it themselves. According to George Mason University Professor Richard Wagner, “The government can increase its spending only by reducing private spending equivalently. Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending.”(Freerepublic.com). What is essential here is that we understand that this $789 billion is not going to simply appear. For now, the funding will be tacked on to the national deficit. The current national deficit is over $11 trillion dollars, and is climbing an average of $3.67 billion dollars per day. Obama plans to avoid adding excessive amounts to the deficit by inflating the currency, or printing more cash. Any excess debt otherwise will be piled onto the average citizen in taxes over the next few decades until we end up back where we started. This massive inflating of the currency, or printing billions upon billions of dollars backed up by nothing but ink on paper, creates a flaw within a flaw;  that being artificial demand.

Throughout history, many economies have been documented as following the “Boom and Bust” cycle. This cycle involves gradually increasing demand for products as the economy endures an uptrend in many aspects. Prices inflate as businesses succeed, and wages rise accordingly. This segment is known as the economic “Boom”. Eventually however, businesses get too big for the population of consumers, and overproduce, leading to the overstocking of products, and less sales. This activity results in layoffs, price cuts, and wage cuts to cope with the decreasing demand known as the “Bust” part of the cycle. Afterwards, the cycle repeats itself again and demand begins to rise. The recession is not solely a dramatic version of this cycle, as other factors such as the sub-prime mortgage industry are to blame, but it is partly responsible. The sub-prime mortgage crisis simply occurred at or around the time that the “Bust” segment of the cycle occurred, resulting in the deepest recession since the Great Depression of 1929. Obama’s stimulus package is attempting to speed the turnaround time in this cycle, and to get us going in the positive, inflationary direction once again. This is a decent idea, but the problem with using freshly printed money or deficit spending is that the economy could get artificially turned around. Although this is the President’s purpose, he doesn’t realize that the bottom of the demand will soon fall out, as demand for products and services will have, in fact, not turned around, but will simply appear that way. In some cases, nobody may actually be buying any of these products and services! Just because money is being injected into the system does not mean people are spending again. This is a consumer driven economy, and the stimulus simulates the effects of consumers spending the cash that they are currently hording in fear of whatever may happen next. The creation of an artificial “Boom” can only lead to a devastating and unexpected “Bust”.  This will happen due to the prices being artificially raised on any product or service the bill decides to dictate funding to, and will only hurt companies in the long term when the stimulus stops and businesses with government contracts realize they don’t have any customers.

Not only does Obama fail to realize the flaw of creating artificial demand in the economy, he has also overlooked that this idea has even been attempted before! The Great Depression of 1929 caused unemployment to run so rampant (25% of the population), that an emergency plan was absolutely necessary. President Franklin Roosevelt attempted to solve this problem by introducing what he called the “First New Deal” of 1933. This new plan involved the use of government spending to implement banking reform laws, work relief programs, agricultural programs, and industrial reformations to create new jobs and aid the jobless. When this plan failed to produce major change, the “Second New Deal” of 1935 was then introduced. This time, the plan once again used government spending to create programs such as the Works Progress Administration, and the Social Security Act to protect the elderly that had lost their shirts in the stock market. Unfortunately, both phases of the “New Deal” ended up being failures, give or take one or two programs that still exist today such as the FDIC.

The government spending resulted in many poorly organized programs that had little effect on boosting the economy or creating many new jobs. Towards the end of the Great Depression, Henry Morgenthau, Roosevelt’s Secretary of Treasury stated, “We are spending more money than we have ever spent before, and it does not work. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started and an enormous debt, to boot.”(Freerepublic.com). As sad as it sounds, the Great Depression was not escaped until the United States entered World War 2. The huge need for war materials resulted in such a surge in the building of factories to produce tanks, aircraft, and supplies that America was put back to work, and jobs became easy to come by. Clearly, stimulus via government spending was ineffective.

We already are attempting an idea that has been tried and failed before. Add to that the fact that we are not even attempting it quickly. Although the stimulus itself was thrown together in a couple months within Obama’s team, little effect of the package will actually be seen until next year. Only $26 billion, just over three percent, will be spent this year. Another $110 billion, or 13 percent, will be spent next year. This means that by the time our new president is halfway through his term; just 16% of his plan will have been implemented. If Obama plans to slowly unleash this plan over time, then why was the writing of it rushed instead of revised and perfected before its release?

President Obama has claimed that one of the supporting arguments for the bill is that it relies partially on improving infrastructure to speed the economy and flow of goods and services in general. Why would he place so much emphasis on a topic that occupies less than 5% of the spending? Only $30 billion out of the $789 billion is being implemented for repairing and replacing bridges and other infrastructure applications. Obama’s Budget Director, Peter Orszag, states “Even those (public works) that are “on the shelf” generally cannot be undertaken quickly enough to provide timely stimulus to the economy.” It does seem rather contradictive that someone on Obama’s own budget team would admit that 5% of the bill is somewhat ineffective in an area that Obama has stressed so much.

Lastly, people need to realize what else this bill can do to them. With our current national deficit, each citizen has roughly $36,687.43 of the debt to carry as a citizen. It is already crazy that aside from credit cards you haven’t paid, mortgage payments, car payments, or whatever else you may have indulged upon, you are also in debt as part of this country. The new stimulus bill adds an extra $11,000 in debt to the average family of four that will be paid slowly over the next few decades until the stimulus is paid off by hardworking taxpayers. This added tax weight doesn’t even include the fact that this stimulus spending will accrue interest over the decades that it may take to pay it off. This $789 billion is estimated to rise with interest to over $1.1 trillion by the time it is paid off (which would require the national deficit to reverse itself in the first place).

After all is said and done, this stimulus begins to sound like it may not be the best deal. With that being stated, the situation deserves some alternate solutions. Right now it’s seemingly the “Obama” way, or ceaseless economic turmoil and chaos. If you are a company that is struggling, now is absolutely not the time to cut back on advertising. Advertising should become your priority because even during the Great Depression, some companies did manage to prosper such as Kellogg’s cereal. Those companies that seem well enough to advertise during desperate times instill confidence in consumers. If and when we emerge from the recession, consumers can only treat your brand as more reliable and respectable for staying strong, earning you possible lifelong customers. As far as solutions to turning the economy around, we could start with a slashing of our marginal corporate tax rate which is second highest in the world. Allowing large corporations to prosper and enjoy a larger portion of their profits can benefit everyone. Lightening up on their taxes prevents them from firing workers, cutting pay, and decreasing advertising expenses. Allowing corporations to prosper leads to growth and expansion, which will surely create the need for workers. And who knows how to create jobs better than the companies we end up working at?

Unfortunately, it is too late to turn back and select an alternate way to approach this major economic recession, as Obama’s Rescue and Recovery plan has been hailed as the only choice, and has already begun its implementation phase. The money is being spent, the taxpayers will pay, and nothing that is said or done will change that scenario. If this plan indeed proves itself one of the biggest blunders ever made by the United States government, at least it will be understandable as to how it came about. Obama’s plan goes against the natural cycle of economics with artificial demand, raises the national deficit while straddling Americans with more debt to be paid in taxes, suffers from poor organization and ineffective implementation, and most importantly is a repeat of an idea that has been tried and failed. May God help us all.