Yayyy! I was wrong

One minute before the stock market closes and thankfully no crash. (Been very cloudy and gloomy today in NYC so I was sort of right - it was a "dark day on Wall Street"). While I'm on a roll, let me add my voice to those speculating on where the stock market will eventually "bottom out" before it rebounds. Obviously, this is just a hunch - I'm not an economist, but I predict the Dow will bottom out in the mid to upper 5000's somewhere between 5,380 and 5,830.

CHART: Dow Jones performance over the past 12 months.

Hope I'm Wrong

The stock market opens in 1 minute and I have a sinking feeling that the market will crash hard today. Was listening to Bloomberg (financial) radio while taking a shower and I have never heard them sound so frantic. I hope I'm wrong, but this could be a real bad day on Wall Street. Again.

My Auto Industry Bail Out Plan

Among the many financial problems we are having is the imminent failure of the U.S. auto industry. Some argue that we should not do anything and let the auto makers fail. After all, the argument goes, they were responsible for getting themselves into this mess. Why should the taxpayers just hand over billions to them?

I agree with those sentiments. However, I am persuaded that to let the U.S. Auto Industry fail would have repercussions so far ranging and hurtful to the overall economy that we cannot let it occur. But, rather than just hand the money over, I have an idea.

Instead of just handing over billions of taxpaying dollars to the auto industry and hoping for the best why not attach some strings. How about all tax payers get "shares" in the amount for the loan. For instance, if the bailout equals $2,500 per taxpayer, each of us would get a certificate for our portion of the loan. This is not stock in the company, rather it is a voucher for our "share" of the loan.

We would all have to understand that these certificates may never have any value. But, if the auto industry does rebound, the original $2,500 value of the shares would appear and possibly grow. There would have to be a time limit before anyone could even hope to redeem them - 10, 20 years? But after that those shares could be used to get our money back at that time. The industry would have to stow away a portion of their profits (with the proportion growing over time) to be earmarked specifically for paying back the taxpayer. After the 10 or 20 year time period - we could cash in these vouchers for at least the face value.

Also as a bonus, since we all have a financial stake in this, Americans would be more likely to buy American over the next couple of decades, knowing that have a literal share in the success of the companies. If things go very well, Americans will put free market pressure on our auto industry to create better cars, we will all be motivated to purchase them, American jobs will stay here and we all profit from it. Sound like a great plan to me!!

Meltdown - What We Have Learned, What We Should Do

1. President Bush is not respected - by anyone.
It took 7 and 1/2 years for Conservatives to finally figure this out but even they have come to realize that their poster boy for Conservatism is a complete screw up. Of course their timing could not have been worse. Republican Bush put forward his plan, with the approval of his economic advisers and could not get his party to fall in line. Now, and only now, the Conservatives say that Bush can't be trusted. So you let your man drive us off the cliff and now try to distance yourself from him? Gimme a break! Where were you for the past 7 1/2 years?

2. Conservative Economics has failed & Conservatives don't care about America.
Let's face it - Reganomics has run it's course. Like all economic ideologies, the weaknesses eventually overwhelm the strengths. Trickle down / Supply Side economics has brought us to this mess. Some may argue that it gave us 20-25 good years (I don't think so, but that is an argument that can be made). But it's over. The fact that Conservatives in the House cling to this theory despite all the evidence proves that they are blinded by ideology and put their misguided embrace of supply side economics over the good of the country. Again.

3. You can't negotiated with Conservatives.
Never have been able to, never will be. Remember, the credo of the "Republican Revolution" was that "compromise is weakness". These people are rigid ideologues detached from reality. Look over the past 30 years and I predict you will see failure everywhere Democrats tried to appease or compromise with Conservatives. It can't be done. We should all know by now that Conservatives see only what they want to see and stick with their foolish ideology no matter what the facts on the ground are. My God, this should be clear to everyone by now! Don't bother trying to negotiate with these people - they don't play well with others and they will only bring you down.

4. Holiday shows others who don't put country first.
OK, so it is a big Jewish holiday. If the Jewish members of Congress say they can't work because of it - that's fine. It's their right. But make no mistake they are putting their religion over the good of the country. Don't tell me the world is coming to an end in the morning and then take a holiday break in the evening! No person taking time off in this crisis, Jew or non-Jew (even worse because they are doing it to pander rather than for their own personally held beliefs), should be allowed to put "Country First" on any campaign literature. It's not true. You are putting your religion first. That's fine - but just admit it.

5. Pelosi has bad timing.
Her speech yesterday was a brilliant explanation of how Reaganomics and now, Bushonomics failed the American people. But she should have given that speech everyday before yesterday and everyday after. The fact that Republican policies and ideology are to blame for our current disaster needs to be understood by all Americans. Pelosi should have made that clear by now and certainly should continue to hammer that point home in the months and even years to come. However, yesterday afternoon was not a good time to do it.

6. Democrats need to go it alone.
The Democrats should now start from scratch and write a plan that will get nearly unanimous Democrat support and not worry about the Conservatives, Bush or Paulson. When Conservatives in Congress walked away from responsibility yesterday because of harsh words and a blind allegiance to a failed economic theory, it became apparent that it's time to just leave them out of the process. Their input mostly favored the wealthy anyway so to Hell with them. They had their chance yesterday and could not muster the courage to do what was necessary. They blew their last chance to cooperate. The Democrats should now put together a bill on their own that reflect their values and those, increasingly, of the majority of their country.