Alright folks, that’s enough. President Obama’s whole economic stimulus/bail out plan is imploding, and we need to stop it now. The plan is not going to work. Itâ€™s not going to stimulate anything.
Letâ€™s take a step back though; I want to start by getting my biggest gripe off my chest. President Obama did not â€œinheritâ€ anything. He keeps using that word â€œinheritâ€ when he talks about the economy, as if to wash his hands clean and make clear that â€œthis isnâ€™t my mess, I didnâ€™t create it, and if I canâ€™t fix it during my 4 years in office, itâ€™s not my fault.â€ Letâ€™s just look at one specific speech, his Address to a Joint Session of Congress on February 24, 2009. Here are a few quotes from that speech:
â€œthe massive debt weâ€™ve inheritedâ€
â€œmy budgetâ€¦reflects the stark reality of what weâ€™ve inherited â€“ a trillion dollar deficit, a financial crisis, and a costly recessionâ€
â€œwith the deficit weâ€™ve inheritedâ€
In supporting Obamaâ€™s economic plan, Rep. Steve Kagen (D-Appleton) said just today, â€œWe have to clean up the economic mess left over by the previous administrationâ€¦â€
Whatâ€™s with these democrats? If you think that all of our countryâ€™s problems today were caused by the â€œprevious administrationâ€, youâ€™re quite ignorant. Likewise, if you think that all thatâ€™s good in our country today (and there is indeed a lot of good) was caused by the â€œprevious administrationâ€, youâ€™re even more ignorant. Thatâ€™s not how our country works people. The United States is a republic. We elect our representatives, and they go to work for us. Yes, there’s a presidential administration, but there’s also this other institution called Congress that has a role to play. Come on, donâ€™t tell me you havenâ€™t heard of â€œgovernment of the people, by theâ€¦â€ Do I have to spell it out?
Think back to the presidential campaign. Then Senator Obama slammed Washington so much that it became offensive. Thatâ€™s my Washington that youâ€™re slamming. Those are my representativesâ€¦our representatives. We elected them. We put them there. When you slam Washington, you slam Americans.
But I digress. Listen folks. Not only did President Obama not inherit the economy, he created it. Thatâ€™s right. Heâ€™s an American, just like me. This is our economy and we created it! We all created it, we all need to accept responsibility and we all need to fix it.
Now, to the plan. Iâ€™ve said in this blog before that we need to let failing companies fail. I stand by that philosophy, now more than ever. Hereâ€™s the problem with Obamaâ€™s plan. He thinks that by giving a financial handout to a company, our government in turn has the right to tell that company how to spend its money. After all, if youâ€™re getting stimulus money, you surely canâ€™t give your executives a bonus. Well, thatâ€™s just a load of crap.
The big story today is that AIG received almost $180 billion in â€œbail outâ€ money, and is giving $165 million in executive bonuses. President Obama and many other elected officials are upset at this, so much so that if AIG doesnâ€™t give that money back to the government, congress is considering enacting an emergency taxation rule that taxes those bonuses at 100%, thereby getting all the money back anyway. What a mess!
Why would any of us want our government to have the right to pry into private business operations and tell a company how to run their company? I know, I know, itâ€™s ridiculous. We need to stay out of such dealings.
If youâ€™re not familiar with recent northeast Wisconsin news, let me tell you about one such local story. Two situations happened at Associated Bank, situations that seemed to collide. The first was a planned trip to Puerto Rico for its top sales people, an incentive quite common in corporate America. The second was an offer of financial help from the U.S. Treasury Dept as part of its Troubled Asset Relief Program to help keep Americaâ€™s banks afloat. In a nutshell, people complained that if a bank receives financial help from the federal government, it should not send its employees to Puerto Rico.
There are a couple of problems with such a complaint. First, the money is not a hand-out. Associated sold $525 million in preferred stock to the U.S. Treasury. Associated will pay a 5 percent dividend for 5 years, then 9 percent after that. The second problem is that Associated is not in trouble. It turned a profit last year and CEO Paul Beideman said that they didnâ€™t need the money. Yes folks, there are indeed profitable, well-run banks in America, and Associated is one of them. But they were offered the help, and they took it as an act of â€œcaution in what is a challenging environment.â€ Sounds to me like a CEO who knows what heâ€™s doing. Itâ€™s no wonder the bank is profitable.
But then something happened. Beideman caved and the trip was cancelled after all. Incentives like this are part of employee compensation. They are planned and budgeted for well in advance. There was no need to cancel it. What do you naysayers think happened? Beideman got off the phone after closing the deal with the Treasury Dept, and hollered â€œwoo hoo, pack your bags, weâ€™re all going to Puerto Rico!?â€ Geez. I must assume that a guy as smart as him is still going to take good care of his top sales people.
So what are we getting ourselves into here? Iâ€™ll tell you what. If you receive any benefit as part of President Obamaâ€™s economic recovery plan, youâ€™d better watch your back. Yep, yep, if you know me, you know where Iâ€™m going with this.
As a direct result of the American Recovery and Reinvestment Act of 2009, my wife and I will receive about $800 in benefits by reduced income taxes on our paychecks. Itâ€™s certainly no $180 billion like AIG got, but $800 is a lot of money in this household. The reduced income tax withholdings will start as early as next month. So, what are we going to do with the money? Something to stimulate the economy maybe? College for our daughters (2 in college next fall)? Home repairs? Save for retirement? Absolutely not. Weâ€™re buying Green Bay Packers season tickets.
Yep. I just got the invoice in the mail today. $1,012 for two tickets for the 2009 season, and weâ€™re buying them. So, there it is. Let the public outcry begin. The Crevier household in De Pere, Wisconsin is receiving $800 in economic stimulus money, and weâ€™re blowing it all on Packers tickets!
I hope Congress doesnâ€™t enact any special laws to tax my $800 credit at 100% so that Iâ€™ll have to give it all back. We really need that money for Packers tickets.
All sarcasm aside, Iâ€™m not expecting any official communication from the government about how Iâ€™m spending my money. And thatâ€™s my point. If weâ€™re going to have any kind of government help in this crazy economy, letâ€™s just put the money in the pockets of ordinary Americans where it belongs.
I will give President Obama credit for one thing here. I like the fact that any money going directly to American taxpayers gets to us via our paychecks. Thatâ€™s a payment mechanism thatâ€™s already in place. We donâ€™t need to spend even more money by making a separate payment like President Bush did a couple of times.
Remember the automakersâ€™ private jet/capitol hill fiasco back on November 16, 2008? After all the complaints from the public, Ford CEO Alan Mulally pulled his company out of consideration for the auto industry bail out. Suddenly he seems like a genius. He gets to pull his company through these tough times on his own terms.
(DISCLAIMER: Iâ€™ve been driving a Ford truck for 14 years, and three out of our four family vehicles are Fords.)