Monday, January 19, 2009

U.S. Seeks Rest of Bailout Cash


The definition of insanity

We have to be insane. We keep doing the same things over and over again and expecting different results. Maybe if we just keep dumping money that we do not have into a poorly run organization that has overpaid their executive teams for years, things will get better. In their Wall Street Journal article, Deborah Solomon and Damian Paletta write that, our president “on behalf” of the incoming president has kept alive a program that most seem to believe is a failure. http://online.wsj.com/article/SB123177778175873781.html

In my non-scientific polling and based on the results of the wall street journal poll most would give the program a failing grade. Why? The government is continuing upon its standard course of a poorly defined vision (clear ones alienate some constituents), a complete lack of accountability (someone may not get voted in next term), and a completely missing objective (other than fix the economy). Our objectives are so vague is it any wonder that we cannot seem to get our arms around the problems, and we cannot seem to make difficult choices because they are painful. Wait, isn’t what everyone is enduring now painful?

Lack of a clearly defined objective

What do you want for lunch? Most people struggle with this very simple question every day. If you really want to get confused, ask a consultant what to do for lunch and you will get 5 different options. It’s not the consultant’s fault, it is his/her job to offer options and not express strong opinions either way. If lunch is an issue, then what to do when things get a little more interesting? If there are 50 people offering 50 different solutions to your financial problem and 15 of them even sound like they could offer a solution, what do you do? The mistake is not being specific enough. The more specific something is defined the better the likelihood of a solution. We keep refusing to go below the “fix the economy”, or “fix mortgages”. Politicians are experts at redirecting us back up so they can offer solutions that are both nebulous and undefined. This method allows for when something does not go as expected it is not their fault, and if anything goes right they can take credit.

What does this have to do with the current economic and geo political situation? Everything. There are no clearly defined issues, therefore no clearly defined solutions. We wander through a morass of nebulous thinking and feel-good solutions. As long as everyone feels good about the solution then everything is fine. This is why we have not found Bin Laden, addressed a crumbling infrastructure, not funded some programs such as “no child left behind” and over funded others such as the war in Iraq. Individual members of the House and Senate are not accountable for granting themselves pay raises and only stop when they think the American people would not “feel good” about giving them a raise, like right now. The vote to not allow a raise had nothing to do with fiscal responsibility but how they feel we will feel about the situation. There is not an objective to balance the budget, control spending, or invest in industries that will take America into the future. Short term thinking and plans allow this behavior to continue.

We need clearly defined objectives; this means that we have included clearly defined measures for success. You get what you measure and compensate. People (that includes Senators, Representatives, Presidents, and business leaders) behave accordingly. Unfortunately if you measure and compensate differently, then you get what you reward. This is has been proven by behaviorists for decades. We have been rewarding our leaders on only single measures. In politics, how much money can you generate for the party committees? In business how much stock price gain? These measures are not balanced with anything. Until that changes we will continue to complain.

Lack of a well defined plan

Problem Solving 101 requires you to clearly identify the problem BEFORE the solution is contemplated. Right now there is 350 billion dollars of a solution looking for the problem. Bush and Obama are demanding that congress release those funds, but to whom? How will these funds be dispersed? How will they be accounted for? Will these funds be paid back or are they a gift? If a gift, I would like some of my money gifted back to me. I digress, the problem has not been clearly identified, and we are throwing money at an area we know is problematic and hoping that something miraculously solves our dilemma. Hope has never been a good strategy. It is a fundamental ingredient for success by providing the drive to identify the problem and a solution. The problem of the banks not lending is a banking problem. While getting to play with someone else’s money is a great thing, they are playing with our money and lending it back to us. This is smart for the bank, not so much for the American people. Where is the 50 billion that went to Bank of America? It was for loans. We could have paid off all of the mortgages between the Appalachian and Rocky Mountains. I think that would have been a better use of the money than the black hole things are flowing into today.

Let the American people figure out how to spend this money. Invest in them, pay off the mortgage, and see where the extra money is invested. I bet we start doing amazing things such as going into space, fixing the bridges and roads, or even correcting the educational crisis that is affecting millions. I am sure that it would even create a few jobs.

Lack of accountability

Obama’s choice for the Secretary of the Treasury, Timothy Geithner, has many concerned. They should be. Why would you put someone who will be heading the IRS in place who is in trouble for not paying his taxes? While I am for the abolition of the IRS as much as anyone, the arrogance in choosing the highest ranking individual to oversee the department of the Treasury reflects the lack of thought to the repercussions of the choice. At this time we need people who can think of solutions, understand the impacts of those choices, and be able to look in the mirror afterwards. At this time we are lead by committee, and no one individual (with the exception of the president) is called to task. It is always Congress (which side, the House or the Senate?), and is it one, several or all of the members? If a democrat has a good idea, must all republicans automatically reject it publicly and then vote for it as if ashamed? There are serious problems facing this country, and thus creating serious problems for all who live and work here.

The lack of accountability is prevalent in the spending bills that, by the time the pork is finished, the bill that would actually have done something positive becomes unrecognizable. We do not make projects stand on their own merit, nor do we hold those managing them to be accountable. That does not mean that if someone makes a mistake that they are immediately crucified, which is too often the case today. People make mistakes. We must be accountable to the solution as well. Did we contribute to the situation, and what is our level of accountability? The American people are responsible for the situation today. Our votes and lack of participation have allowed the current environment to flourish. We can fix it. It will be difficult and we must come together in order to affect real change. If we want control in our lives we must first take responsibility for ourselves and then hold others to the same standard.

What can we do?

Each individual must understand their role in the overall situation. I find many interesting corollaries in history that tie today to the periods before the French, American and Russian revolutions. The excessive taxation of the populous contributed to all three revolutions. These did not happen overnight and each would have been avoided with different choices by the leaders. Today, many disillusioned individuals are joining more radical parties such as the National Socialist Movement. This dangerous trend is demonstrating the key problem of letting something other than reason govern actions. These parties play on the fears of individuals with key topics much like the democratic and republic parties have done in the past.

Make a study of a particular problem that is important to you. Study it, read for 1 hour a day and gather information on that problem. At the end of a month you will know more enough about the situation to make a meaningful choice for action. Develop a personal plan for affecting others into building a group plan. Then take things one step further and assign tasks and hold people accountable for executing the plan. Lastly don’t quit. Things will go wrong, the situation will change, be willing to adapt and know when your objectives are being met. This is not rocket science, but it can be difficult. Keep on track and measure your success. We can fix everything, one step at a time.

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