Here is an open letter I wrote to President Obama when he first took office, but never got around to sending it.  For what it is worth, I share it with you now.

Dear President Obama,

Congratulations on a well run, improbable, yet successful campaign for President of The United States.  I along with millions of others have been inspired and transformed by your victory.

Now the difficult part has begun.  You have been handed a US economy, which is in far worst shape than people can imagine, the equivalent of stage 4 cancer.  The condition of the US financial system and economy is the result of years of abuses, poor decision making, selfishness, greed, payoffs, and deregulation.  Now you are responsible for it.  A little unfair, but you did run for office. So here are some friendly reminders to help in the process of delineating a course of action. 

When I was a child my parents took me on a field trip to Washington DC and one stop during that trip was to the US Mint.  There I saw millions of dollars being printed on these huge sheets of paper.  Over the years that image confused me because I always wondered why we couldn’t just print money to give financial help to the poor and to create jobs for the poor and unemployed.  Later I learned that printing money without production or real economic activity eventually lowers the value of the currency.  I learned that more cash in circulation drives up the prices of everything and hence the dollar is worth less.  Commonly referred to as inflation. 

This is most evident in Zimbabwe, where things are so out of hand that they actually put in circulation a 50 billion dollar bill, each of which is less than 1 US dollar. Outrageous. 

Unfortunately, we are on that course now.  Several nations have experienced economic collapse, notably Iceland and Bulgaria, and Greece is a few days from economic collapse. What can America do to avoid an economic collapse?

Here are some guiding principles and since I am not an economist, your team can translate these principles into detailed action steps and policy.

1.  Do not insure bad business deals. You can’t entangle the government in bad private investments. Whether banks, companies, or mortgages you can’t devalue the currency & remaining financial solvency of the entire federal government to protect the investments of a few very wealthy people.  This means less bailouts of failed entities and more new entities. Create new banks & credit unions, new companies, & new industries. Don’t hand out free cash, which ultimately enslaves future generations to protect what was essentially bad business.  Despite the cries, of doom and gloom, commerce will not cease without bailouts.

2.   Protect American commerce.  If you can’t stop US companies from moving overseas then maybe you should consider imposing tariffs on all manufactured products imported to the US or require some sort of profit sharing with the US or its companies thru a distribution fee, or licensing fee. In other words find some way to make foreign manufacturers pay to sell their goods in the US, even if it is done thru US companies.  China does this shamelessly.  I went there and saw it first hand.  We need production and markets.  We can’t simply be easy access markets only.

3. Invest in and expand new and emerging industries and technology.  We have to create new jobs, new industries, and new markets.  New markets are key. Someone has to really pay for what is created or rendered as a service. The federal government can’t be the only one’s writing checks because that will not last. If the tax base is not expanded through expanding commerce, then the Federal government is printing cash that is essentially as unreal as the credit swaps and derivatives that triggered the crisis.  Which means Wall Street will have shifted its financial problem on the Federal government and tax payers.

4.  Help the American people directly.  Try to insulate the American people by creating more tax incentives, reducing the tax burdens, providing more small business loans, providing money for re education, re-training and for college loans.  This will prime the well for future prosperity and transition the workforce into sustainable jobs.

5. Control the evolution of the economy. Put in place a new regulatory team that understands and follows the fundamentals of economics. Increase production and productivity. Make capital available. Invest in infrastructure. Invest in technology. Invest in people. Limit tax increases, particularly on small businesses. Restrict and regulate the “creation” of imaginary cash (credit swaps, IOUs, derivatives, etc)

6.  Realize you can’t please everyone.  In the end, people are fickle.  They are quick to blame and slow to take responsibility.  Don’t fall for the trap of trying to satisfy everyone because you could wind up pleasing no one. Consider all the options. Consider the consequences. And set the course. Also don’t fall for the trap of trying to accomplish too much to prove yourself. This is still people pleasing in another face.

These are early recommendations, but as your first term evolves, rest assured things will morph into a new and quite possibly more challenging reality.  Keep the faith, maintain your well being, and simply do the best you can.  May God bless you with safety and success.

Thank you for your example, sincerity, and dedication to the people of the Untied States and the world

Sincerely your friend,

Michael Billion

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Tags: American people, Obama advisor, President Obama, US Financial system, US Policy, Wall Street

This entry was posted on Thursday, August 27th, 2009 at 4:04 pm and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.