The real question here is should we let the auto companies go under? Most people would say no but there is time to rethink this position. If the companies file a prepackaged bankruptcy the bankruptcy judge could accelerate the cost cutting that will be necessary for the industry to survive. In a prepackaged bankruptcy the companies cut deals with their creditors prior to the filing. When they file for chapter 11 reorganization, the deals are in place and the court can make the deals happen almost immediately. The auto union knows that a chapter 11 filing without pre-agreements would allow the companies to cancel the existing contracts with the union and there would be nothing the union could do about the situation except strike. After the filing, were the union to strike, the workers could be let go and the companies could hire any workers to fill the positions and pay the salary and benefits the companies wish to pay.

The prepackaged bankruptcy would mean the companies would have cut a deal with the union prior to the filing which would mean the union would have to give more than it normally would but it would still have a contract with the automakers. That would work with the rest of the creditors enabling everyone to take less but remain alive as wells as have a better shot at allowing the big three to survive and hopefully become global competitors once again.

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The Republican response to the President's speech last night was without a doubt a sorry Hodge Podge of mired old diatribe. I will not distinguish the speaker by using his name but I do think the Republican's are in a great deal of trouble if they were serious about this individual being possibly considered for the 2012 presidential race. Most everything he said was lame as well as contrived. However, the worst part of the program was that they believed that government is not good for the individual and in general is a hindrance to the populace in and of itself. The speech indicated that everything done by the government, and by default the other party, was wrong. At the same time he failed to provide any idea as to how to fix the many problems we have. I learned a long time ago that those who condemn everything but have no plan to correct the situation just like to here them selves talk. It makes them think they have something to say. The other side of that coin is they rarely have anything positive to give or add.

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China is a two handed game of poker to the U.S. On one hand China is a formidable opponent with great upside potential to challenge the U.S. in every respect. On the other hand it is a sometimes friend and trading partner who have a lot to loose and gain by the lessening of our economic might. The goal for the U.S. is to keep the balance on friendship and trading and stay ahead of the curve on military technology. That alone is a difficult task and one that makes the tricky balance of friendship a problem to master. At the present the Chinese can hold our feet to the fire simply because in our present financial position we need them to fund our debt. They still have the money to keep us out of harms way as long as they choose to. The question is what we will have to do over the next several years until our financial situation is over.

The U.S. will have to cut back the rhetoric directed toward China on many fronts. Most noted would be on human rights and also for their political aspirations over Taiwan. Chinese actions involving human rights are quite the sore point when the rhetoric is publicly addressed from the American bully pulpit. If we wish to have the favor of their funding we must act with a bit more respect and keep the discussions out of the public forum and relegate them to the behind the scenes meetings. The same respect should be put in place over the Taiwan issue. These are positions that should be addressed at the conference table which is where any breakthrough or deal will be made in the long run.

It should not have taken the financial problems of the U.S. to force our rhetoric to change. As a nation we were once told to talk softly and carry a big stick. It did not take long for us to speak loud and swing the stick with reckless abandon. The time has come when the big stick, in the form of Chinese money, is in someone else's hand. What we must now learn to do is to take our place on the world stage with the genuine humility that must be demonstrated by a world leader.


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There has been talk recently of Silicon Valley moving out of the confines of the U.S. There are two camps of opinion on this thought. The first is that it will never happen because the U.S. will change laws and assist where ever it is necessary to make sure that the center of profound development remains here. The other side of the thought feels the U.S. is already losing its edge and the companies will not move out in a mass exodus but in the long run they will move to more fertile ground. The fertile ground theory is part of the argument of both positions. The theory is based in the need for technology development requiring a localized area where most of the best brains gather to compete, exchange ideas and flourish as they pioneer the future.

Those who believe the U.S. will continue to command and control all of the elements of silicon valley feel the government will make the changes in policy that will let the best and brightest, around the world, come to these shores to create new ideas, companies and great wealth. This theory is based on the belief that the U.S. will always be wealthy and the money will attract the best minds. On the other side they believe the government will not act prudently policy wise. They cite the recent policy actions of the government which has already started to force some of the brightest, who would have settled here, to select other destinations. They also feel future policy changes will not shift from their current position and that will force potential newcomers to put down roots in places such as India and even China. Both of these emerging powerhouses will have the economic capacity to attract these necessary minds and create attractive political and material environments establishing the new Silicon Valley East.

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Out President has four years to put The U.S. on the road to a greener world. The question is will that happen if he does not demonstrate the Mean Joe Green of his personality? All areas of the business environment will be trying to find ways of obtaining funding from the government under the guise of a green commitment. The issue will soon become what is real and what is scam and how do we tell the difference between the two? In the long run of reality we will probably be able to identify the scams about four years out. The delay is based on the lack of green experts who could identify what will be beneficial to the end goal and what is purely well disguised window dressing.

The scams will most likely be perpetrated on the small businesses in most every community. There is presently no effective program, and unfortunately for the next few years there will not be an effective program, to filter and monitor for these scams. The large projects will be monitored but the little guy will be left to his own devices as the green movement takes hold. There is one possible answer to a major portion of this problem. There are consulting companies funded by federal and state government which are used to provide consulting services to small business in the manufacturing arena. They were certified and qualified to provide knowledge to any manufacturing operation wanting to streamline. There is no reason for these consulting operations not to pull together the appropriate people to develop programs and train the consultants to go out and help small companies get green. That will not happen if the President does not take a personal stand in this area and tell the public to ask for Congress to vote this type of operation into existence. The drawback issue as I see it is that the President knows it is not easy to be Mean Joe Green in Washington because there are many enemies to be made. Courage is needed Mr. President. A great deal of courage will be needed.

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Jobs and job growth are topics on the lips of most everyone these days. Clean energy is considered one of the most favored ways for developing a plethora of new jobs. I guess the question of the day is will the development of clean energy truly create new jobs, to be filled by those who have lost their job, or will they just replace jobs for those who will lose their jobs as new clean energy replaces the old energy? It takes time to think about that question and come up with a reasonable answer. I have thought about this for a while and the answer is both conditions will gain in the green endeavor. The caveat here is that it will take a lot of time.

As the green process builds momentum the number of jobs created to be filled will first serve many of the unemployed. As the program progresses those who lose their jobs from the old energy sector will be hired and trained to accommodate the new jobs created as the green programs go on line. These Programs will be several years in the process until most of the presently unemployed, which can enter into these positions in one way or another, will find a green opportunity. Fortunately this is not the only job creation program to be put into operation. In all, it will take at least four years for the lost jobs to be recovered by new positions using all the opportunities created by the various job creation programs presently scheduled to be set in motion.

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With all the protectionism talk rolling around Congress these days the question will come up as to how to define who an American auto maker is. Does the car have to be 100% made here in the U.S.? Perhaps we mean that it must be completely assembled in the U.S. If that is the case, there are foreign brand name cars which are built completely within the borders of the U.S. and therefore should be considered American autos. Then there is a possibility that all the parts have to be made in the U.S. If that is the case then our best trading partner, which is Canada, will get the short end of the stick. About 60% of the auto parts for assembly into cars are manufactured and or assembled in to assembly units that are then shipped to the U.S. for final assembly into cars. So the question is how does one define an American auto maker?

This is a point that can be labored over for years but it is just nonsense. We are in a world that trades and if we turn to protectionism then the rest of the world will do likewise. If that becomes the case we will loose much more than we will gain as the trade wars take hold. What Congress should be pushing for is the creation of incentives for the American manufacturer to find new ways to produce product at competitive prices. It can be done but it is not an easy process. The problem is the manufacturing industries have been taking the easy way out for the last thirty years. Now they will have to learn the reinvention process from the bottom up if they are to survive.

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On a daily basis I hear conversations and statements from people who almost always seem to be in the wrong place at the wrong time. In reality the comments I hear are the individual's dismissal of the seemingly bad luck moment that has befallen them. This brings us to the question as to these conditions being random acts of bad luck or perhaps they are part of something else. Hearing these little snippets of comment over time has caused me to believe these acts are not the result of bad luck but rather the results of doing stupid things or making stupid decisions. To those who have poured themselves into that mold there is nothing left to say other than the following comment which they should copy down and hang on their wall for future reference. It is the basis of a self help program that I created when I was fourteen and as long as I stayed with this basis concept I did very well.

"Of all things one can do to help themselves the most effective and productive of them, is simply not being stupid"


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By sending people back to the farms from the busy city life they have become accustomed to will surely leave many of those dispersed with a sour taste in their mouth. The Chinese government had to take this action which avoided confrontation in the streets. With the new city folks sent back to the farms the government defused a critical situation for a while. In the mean time the government is working diligently to get the factories that have been closed down back in operation. They are spending more money than the U.S. is to recover from this economic decline. The hope is that in a few weeks there will be a selective call for workers to come back to the cities to retake their jobs. The government hopes to continue this process until most of the workers are back.

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We all know that education is extremely important but there are two sides to that coin. Not all people will get a college education. For those who do not receive a higher education there should at least a required degree in common sense grounded with a strong dose of street smarts. To a substantial degree those who receive a college degree could use at least a second degree in common sense. I say this because people are being sold products via television commercials which do not make sense. Just off the top of my head I can think of fifteen products which have become new and improved at least once every three years over the past twenty years. Then of course there are the products that solve or resolve problems and issues around the house that can be resolved with some common household cleaner. The opportunities to use common sense are endless but it does take a little bit of time because the individual has to think about the information presented and not take the presentation of products on face value. In these difficult financial times thinking about the information presented and using a little common sense can save you more cash then you might think. It could not hurt to try.

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Everyone is talking about transparency these days as the best way to prevent any and every organization from misrepresenting the facts that keep the public informed. This is a reasonably accurate assessment of the desired outcome of transparency rules. I would also suggest that in most instances the players in the game will be relatively honest. However, you can bet your last dollar that three percent of those providing information under any transparency rules will be less than faithful to those same rules. There may be some hedging of the truth and even perhaps some discrepancies where the fine line is blurred. Unfortunately there is always that three percent who feel they have little to loose and so much to gain if they cheat. Even if we were looking for the conscious errors or down right lies with the information they convey in their reports we will still have a hard time finding the truth.

The reason the truth will be so hard to find is that these crafty individuals have misdirected us by writing in code. It will not be in a secret code nor will the information appear to be tainted. The secret to the code is the confusion of the reporting and the activities being reported on. The code is the manner in which one goes about confusing the individual following the trail. If the trail is convoluted enough and the information within the trail appears to be reasonably correct the individual following the trial, if it is long and convoluted enough, will make the tracker give up half way to the goal. Just because information appears correct does not mean it is correct all the way to the last transaction. When transparency is required it is only the reading of the last line of the information and transaction trail that can tell if there is a non-transparent code or not.

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For the last thirty years most of the U.S. population has dedicated their life style to getting bigger and better and having more and getting more. Bigger is better seemed to be the mantra. Anything that was not big enough was thrown out with the bath water and replaced with the newer and grander option of the moment. The problem is that one day the baby was thrown out with the bath water. The baby was the manufacturing base of the country and the backbone of the middle class. As time went on both of these precious items diminished.

What was lost in that time period was the ability of the individual to stand up and fend for themselves. When the manufacturing base started to deteriorate there was nothing to replace the lost job in kind. The individual had to find work with out the benefit of a new skill and at a lower wage. In the beginning the problem did not seem to be that problematic. However, it did not take long for this non issue to become an issue. As more people became unemployed the government failed to effectively help the situation. In reality they went to the unemployment numbers and made some adjustments so a person who lost their factory job and could only find work at a fast food place would be considered fully employed. Having lost a job and most likely the health insurance that went with it the individual was no longer able to afford health insurance. If this scenario is multiplied many times over in a small town it has serious consequences.

What these individuals want is some fair play from the government and society. These people and their families want to work and feel they are of value to society. They wish to be able to care for their families as in the past. They wish to participate and contribute to society on a level playing field. They are willing to accept change and adjust but they also wish to be treated as honorable people so they can hold their head high and recapture their part of the American dream.

What they need is simply jobs, investment and their own self determination. They can self direct better than any outsider and surely better than any banker or Wall Street hot shot. That is because they know what they need and they know to run their own show. What they do not have is the investment opportunity necessary to provide the start up of programs. If there was ever a place for TARP money to be provided this is where it should start. An even better situation would be tax incentives for the cash flush capitalists among us to make the investment in small towns and the small people. Such investment would make small towns thrive and the people come alive and grow bigger.

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Has the U.S. economy closed in on an economic point of no return heading for a future that cannot be guided by past events? For the last twenty five years the U.S. economy has seen unprecedented growth even with its multiple recessions. The recessions were always treated by the economists as pesky blips on the screen of future growth and wealth. Now it seems as if the problems are bigger, more complex and highly convoluted to say the least. Many of the financial instruments that have participated in growing enormous wealth have now turned against us or so it appears. A significant part of the perception is the fact the international or global nature of finance has changed the rules of recovery. That is more than an inconvenience it most likely means the way things will be in the future will have changed from what we know making our biggest problem how to determine what the new rules of recovery are.

If indeed if we are at this great point of change the future could be much more difficult than our present understandings would project. That would mean that all of the old formulas for recovery may not work. It also gives the impression of a bottomless pit the likes of which no one has ever climbed out of. But that could just be fear that is gripping us. At present everyone has been running around in Henny Penny fashion and failing to stop and rethink the situation and then determine how to fix all the broken pieces on an individual basis. What we have seen in the past several months has been government officials and politicians playing at repair by continuing to function using both old approaches and formulas to acquire a quick fix. The problems are deeper than that.



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China has had six consecutive months of diminishing manufacturing production as well as diminishing demand for the production. It seems their plan to control a soft landing for their economic cutbacks is now officially out of control. At this point in time there are no indications as to what the next step in correcting the condition will be. The one thing that is for sure there are several upside as well as downside potentials that will come from this short fall.

The good or upside Potential is that China is now near a point where they will have to stop playing with the valuation of the Yen. More likely than not this condition will be cause for the Yen to start to seek its appropriate and natural level among the other global currencies. The other upside is they will have to think more effectively in capitalistic terms if they wish to get out of this situation as unscathed as they expected several months ago.

The bad or downside potential is that China Will be tightening its grip on the population as the possibility of civil unrest, which is a political situation the government is always facing, will rear its ugly head. That would cause the government to close off all avenues to external communication and use military force to control the movement of citizens and in general put the state in a lockdown condition. Over the last several months the military has been preparing for just such an event. No one knows if anything of this sort will happen but the potential is there for every aspect of this scenario to occur.

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