A Brave New World

Or, perhaps more appropriately, a new world for the brave. Only for the brave. You've gotta be brave, to face what's coming.

We seem to be re-defining things in Washington, and it's really confusing. I finally got the math side of things: trillion is the new billion, etc., as noted in a previous post. Now, I'm working on the new lexicon. There seem to be some new etymological equalities and other realities that need to be worked through. I'll do my best to help.

Hope=Fear
"We gather because we have chosen hope over fear." -President Barack Obama, in his inaugural speech.

"Endless delay and paralysis in Washington in the face of this crisis will bring only deepening disaster." -President Barack Obama, in a speech today in Elkhart, Indiana.

Gee, "deepening disaster" doesn't sound like hope to me. It sounds like fear-mongering. I guess it's only fear-mongering when we're talking about the threat of terrorism, not economic cataclysm.

Piecemeal does not equal piecemeal if it's done all at once
Former Treasury Secretary Hank Paulson has been criticized - rightly so - for trying first one thing, then another, then another, to un-freeze credit markets, save the banking system, and halt the recession.

New Treasury Secretary Timothy Geithner is going to roll out his bank-rescue plan to deploy the second tranche of the TARP tomorrow. His plan is widely expected to be a three-pronged approach. Isn't that the same thing Paulson did - throw several things at the wall and hope they work? The only difference is that Paulson waited to see whether the first thing worked before moving on to the next thing. Geithner's going to throw his things at the wall all at once. I guess the definition of "piecemeal" is a matter of timing.

Spending=Stimulus
"So then you get the argument, well, this is not a stimulus bill, this is a spending bill. What do you think a stimulus is? (Laughter and applause.) That's the whole point. No, seriously. (Laughter.) That's the point. (Applause.)" -President Barack Obama, speaking to Congress last Thursday.

Really, Mr. President? Spending is stimulus? Okay, thanks for the clarification. I'm going to try this out on my wife: "Honey, I need to buy a new Vox AC30 hand-wired amp to stimulate my guitar playing." I'll let you know how it works out.

How to jump-start a car
Some Democratic Congresswoman - I don't recall which one, but she was from somewhere up north where it gets cold and cars won't start - made the analogy that the economy is like a car that won't start, saying that when that happens, you have to jump-start the car.

Okay, fine. But when the "economic stimulus" component of the spending bill is only 10% of the trillion-dollar total to be spent, the analogy is like hooking the car up to a nuclear power plant. Or, more accurately, to a nuclear bomb, since most of the inherent power is designed to do something quite different than bring a dead battery to life, and risks blowing the car to smithereens.

A 70% chance of success is a good bet
"If we do everything right, if we do it with absolute certainty, there's still a 30% chance we're going to get it wrong." -Vice President Joe Biden, speaking to House Democrats at their spa retreat (more on that below).

My good friend and wealth manager Rick Maner of Aspen Wealth Management put it this way: "Can you imagine what would happen in my business if I told somebody ... "we gotta do something and there's a 30% chance you’ll lose everything ... but trust me."

A spa retreat in the middle of an economic crisis, using taxpayer money, is only wrong when private industry does it
CNN's Campbell Brown, in her "Cutting Through the Bull" piece, recently reported that Congressional Democrats and Republicans both went on retreats at posh DC-area spa resorts - something they do every year, and something that's only partly taxpayer-funded, but still. You can check out the story here: http://www.cnn.com/2009/POLITICS/02/05/campbell.brown.congress/index.html.

What don't these guys get that AIG, Citigroup and Wells Fargo got? Wells Fargo defended their planned Vegas boondoggle by saying it was part of their culture, for which they got slapped around in the media - rightly so. But Congress gets a pass.

Pay caps are only a good idea for private industry
Both Barney Frank and Tim Geithner recently said they want to extend the proposed $500,000 annual pay caps for executives of banks receiving bailout money to all US businesses. Can you say, "totalitarianism?" Yet, Barney recently voted himself a pay raise, even though he and his ilk contributed mightily to the current economic calamity.

Barney, let me make one thing perfectly clear: you work for me, dude. I pay your salary. And even though I don't make anywhere near a half-mil a year, you can cap my pay just as soon as you cap yours. And while you're at it, cancel your next spa retreat.