In 2008, in the wake of political apathy and discontent, Presidential candidate Barack Obama created an unprecedented wave of enthusiasm in America and around the world by running a technically sound campaign fueled by the principles of hope and change.   Three years later, discontent and dissatisfaction are re-emerging as people begin to realize that their hope that change would be led from the White House appears to be a distant illusion. Instead political expediency and pragmatism have come to characterize President Obama’s administration, which is not quite the hope and change that millions of people expected.  

Many people are now left with the empty feeling of disappointment and are searching to make sense out of what happened.  Some folks are taking to the streets to protest meanwhile tensions continue to mount as many people find their incomes dwindling and their costs going up.  Others folks continue to hold on to hope that a second term for President Obama will stimulate change.   Even President Obama admitted in a recent BET interview that prior to taking office he was not informed about the depth of America’s financial problems.  It appears the reality of change and the marketing of change are a far cry from one another.

Keep Hope Alive.

However, other would be Presidential candidates don’t seem able to catalyze and harness the collective will of the American people as President Obama can, so they would likely be even less effective.  As a result, American’s, including President Obama have to have a gut check moment. 

Each of us has to ask ourselves, “Who am I really?” and “Am I willing to personally pay a price for change?”  “Or do I even care?” Let’s face it.  None of us wants to make the tough decisions.  We all want it over simplified.  We want someone else to analyze the problems thoroughly and implement the solutions for us. We want things to work out without putting ourselves at risk.  We prefer slogans and facebook comments over personal responsibility and personal action.  We have leaders that mislead us because we absolve the responsibility of knowledge, action, and holding our leaders accountable.   Hence, in some respects we get what we deserve because they reflect us, and we reflect them. 

Now as the pain from years of indifference, irresponsibility, and naivety increases, we have to look in the mirror to admit to ourselves that as a nation we need to make some changes, our leaders included. 

Let’s Move.

If a movement of change in America is what people really want then there will have to be many conscientious steps taken by millions of people to bring about that change.  Many of us love to romanticize the civil rights movement and shift all the credit for it on the movement’s leaders, but the reality is that the civil rights movement was brought about by thousands of people willing to put themselves at risk for a principle in doing what was right.  A real movement is built upon a moral authority, which is derived from individuals having personal integrity and courage.   It is not simply a media spectacle, or a sound bite, or a slick marketing campaign. It is an unwillingness to go along with what is wrong and a corresponding shift in personal behavior and action.  

During the Montgomery bus boycott, a defining moment for Dr King’s leadership and the Civil Rights movement, it was hundreds of domestic workers and working poor black folks who made the personal sacrifice to walk everyday or carpool for months, in spite of weather or losing employment that  made the effort successful.  Dr. King inspired their efforts.  He was their spokesperson.  But they took the steps.  They kept on their marching shoes.  The challenge today is whether a leader will emerge to define actionable steps for people to take that truly create constructive change for all or will we fall for slick words and political marketing campaigns, and acquiesce to a dwindling status quo which is no longer delivering to a growing number of American people. 

This is a gut check moment for a nation that has marketed democracy all across the world and now must take inventory to determine whether or not we can deliver on our own ideals.

We are experiencing a public national reflection with dire consequences.  May God bless us to find the best that is within ourselves and have the courage, wisdom and strength to live it.  This is truly the face of change.

 Thank you for reading this blog. Subscribe and please share with others.

I’m watching the millions of protesters in Egypt rail about the removal of their long term leader President Hosni Mubarak and I can only be reminded of the American revolution and the civil rights movement in America.  The Egyptian protest which was inspired in part by the Tunisian protest a few weeks prior, is a public expression of the discontent of the people of Egypt.  They are very dissatisfied with their government.  But why?

Listen to the rhetoric and speeches and one would conclude that it is all about politics.  They call for democracy.  They call for regime change.  They call for a change in their political process. They call for civil rights.  All of which are legitimate gripes.  However, what is it that they really want?  Well if you haven’t heard yet, I will tell you what that is; they want a better quality of life. 

President Mubarak has led the nation of Egypt as a veritable autocrat for nearly 30 years.  Other nations around the world are also led under the same type of authority.  An authority, in which a leader holds near absolute power for long periods of time and who are usually outside of or control the political process.

The American revolution was inspired by people who felt that they paid tribute or taxes to the King of England but received no benefit or value for those taxes as they were no longer residents of England and on their own in North America.  So they challenged the king and won. 

The civil rights movement in the South in America was in part for equal rights under the law and social equality, well the unjust laws were challenged and over time social equality rights were won. 

Now we see in Egypt, a country of immense historic and cultural importance as well as geopolitical value, similar cries for civil rights and an ouster of in essence, their king.  So what is it that Americans can share with Egyptians after having had both the American revolution and the civil rights movement?  If you haven’t already guessed it, it the title of my blog posting; Cash is the King! $$$$$$$$$

To the people of Egypt, what you want is a better quality of life.  This is achieved through economic development as a result of quite a few factors which include, small business activity, ingenuity, education, investment, legal fairness and freedom to earn.  These are only a few of the factors needed for economic activity.  To call for political change alone, I can tell you, will not satisfy you in the long run, even after Hosni Mubarak is no longer President.

After the civil rights movement, economics became the visible dividing line in America, because in truth, it always had been.  As a result, the people who participated in and benefited from the civil rights movement remain somewhat disssappointed to this day because after 40 years they have learned that what they actually wanted was a better quality of life and that it comes in large part from having money.

The false assumption they made is that the collective quality of life of Black Americans would improve with social equality or political change.  This is similar to the false assumption being made now in Egypt, that political change will improve the Egyptian people’s collective quality of life. 

However here is a little caveat for consideration, politics changes quality of life only to a very limited extent.  To the extent that conditions are made fair and ripe for economic development through law and government, and that investment is made in education, infrastructure, and research, then to that extent can politics actually in real terms improve it’s citizens collective quality of life.

Unfortunately here in America, many if not most people still believe improving the quality of life of people is the role of government and that quality of life is an outgrowth of the political process, democracy, and even more ludicrous, a byproduct of voting itself! 

You vote for the right person and your quality of life will improve.  The leader lottery!

Well everyone is going to have to learn together.  The protest in Egypt is but a symptom of the global economic crisis that became public in 2009-2010.  There are other countries whose citizens’ quality of life will also suffer and who may, in the coming months and years, take to the streets blaming government; but everyone will have to learn together.  It is not your voting.  It is not your leaders.  It is not your political process which determines whether or not you are satisfied with your society or govermnent.  It is your quality of life.  A better quality of life is what everyone wants and this is what we must alll learn to build and protect.  

In reality, there is one king that everyone pays homage to and his name is not Obama, or Mubarak, or Queen Elizabeth, or Castro.  The Kings name is Cash and he is the representative of our real economic activity.  And until we increase our collective real economic activity as nation of people then there will always be a political problem.  The fact is, since a better quality of life is what we we all want, then cash will remain the king. 

Thank you for reading these words. Please share with others.

Subscribe by placing your email in the feedburner box in the left column.

   .

I’m back on the blog trail. Expect more from me in the future, including video blogs and a redesigned website. And don’t forget, my book is coming.  In the meantime, I just listened to President Obama deliver an education/back to school speech to school age children in Philadelphia and I thought the message was on target.  He mentioned the role of teachers, administrators, government, and parents in the successful education of children, but he also stressed to the children the responsibility they have for their own education and success.  A message which is often overlooked in the conversation on education in America.

The children need to know what America is actually like as a society.  In America, you are responsible for yourself and you will experience the results of your actions, whether good or bad.  It’s tough love in this country and though there is a strong charitable and philanthropic impulse in the nation, it is not the way the society generally works.  Giving is a personal decision, while personal responsibility for your life, education, family, finances, and business etc. is the culture of the nation as a whole.  A reality which cannot be stressed enough. 

However, the truth be told, that message delivered today by President Obama is more suited for adults than children.  Children are by nature dependant on others for everything from guidance, to resources, to encouragement, to protection, to food, clothing, and shelter.  While adults on the other hand should be held almost wholely responsible for their condition and state of affairs.   

Ironically, we find in the popular American discourse that the message of personal responsibility is often only limited to folks who are at a disadvantage from the start.  And here is where I take exception. 

I am notorious for advocating taking personal responsibiltiy for one’s condition because ultimately it’s your condition.  It is a discipline that I live by, however the difference is that I include everyone in that equation.  I include small business owners, big business, wall street, banks, special interest groups etc..  All are responsible for their outcomes.

If personal responsibility, accountability, and consequences are the messages delivered to the poor, the young, and the disadvantaged then then those messages have to be delivered across the board to everyone.   

It is disingenuous to offer one group billions of dollars in aid, subsidies, bailouts, and tax benefits and then say to the another group “take responsibility for yourself and get up on your own two feet”.  It is inconsistent.  If everyone is responsible for their fate and condition then that includes everyone; even the banks.   I told you this was tough love. 

But if you help one, then you can help the other.  

And to President Obama’s credit or detriment depending upon how you view it, he has been pretty fair and liberal in his distribution of checks to the various segments of the country. 

I just wonder if that approach square’s well with the message of personal responsibilty for all. 

Because saying it and having the discipline to watch people and institutions feel the impact of their actions are two different things. 

Thank you for reading these words. Please share with others.  Subscribe by placing your email address in the feedburner box in the left margin.

Michael Billion.

Late in the evening on Saturday November 7, 2009, the United States House of Representatives passed the new healthcare reform legistlation.  The bill, which has to meet approval in the United States Senate, is one of the most substantial bills ever passed in US history, in both scope and costs.  The 2,000 pages of legalese, has roughly 400,00 words and is the size of a major metropolitan city’s phone book, both yellow and white pages.   

Fortunately for everyone, House members, who are known not to read bills before taking a vote, had a whole week to read it carefully and decide.  Thank goodness they can read so fast. 

Anyhow, Am I my brother’s keeper?  These are the famous lines from the Old Testament uttered by Cain when speaking to his father about the whereabouts of his brother, Able.  Of course Cain had secretly slain his brother but kept the truth from their father.  These are also the words spoken by the character Nino Brown, a drug kingpin in the 1991 classic urban film, New Jack City.  Whenever Nino Brown wanted to reaffirm his fairness and generosity to the community and his organization, sometimes by giving away goods or help, he would ask rhetorically, ”Am I my brother’s keeper?”.  Strangely, Nino couldn’t see the impact he was having on the community.  People were strung out on drugs and increasingly poor.  His own organization was rife with corruption, but he was too blinded by greed and the bundles of cash rolling in.  What does any of this have to do with the healthcare legistlation?

Well I asked myself, where is the good in this plan?  Expanding a system that is already dysfunctional and overly expensive?  Expanding health insurance costs to everyone whether they want it or not?  Whether they can afford to pay it or not?  And the only thing that came to mind was the line, asked by Nino, ”Am I my brother’s keeper?”  It’s good politics to appear to look out for the poor and the sick.  It’s good politics to force the healthy or wealthy to pay for treatment of the sick and the poor.  But how about reducing illness thru education, good nutrition, and healthy alternatives?  How about helping the poor get jobs or raising their income at a time when inflation is rising and unemployment is at 10% and rising? Unfortunately, that isn’t the plan.

It is all about perception?  How do I look? The same Nino who sells the drugs gives away free turkeys to the community at Thanksgiving to keep up a good image.   What are we really talking about here with health care reform?  Are we really talking about helping the poor?  The same poor who are given sub standard education?  The same poor who are unemployed and underemployed?  The same poor with little to no income?  The same poor who are a majority of America’s prison population?  Or is this thanksgiving and Nino is handing out the turkeys to the poor? 

The problem with health care is largely that it isn’t about health.  It is mostly about the sale of prescription drugs and vaccines.  Massive, unconscionable amounts of toxic drugs.  Which brings me back to Nino Brown and the famous lines “Am I my brother’s keeper”?  The reality is that Nino Brown wasn’t his brother’s keeper. He sold drugs and lots of them.

The gigantic pharmaceutical companies who fund politicians stand to benefit most by expanding the number of participants in this massive, nationalized forced health insurance plan, ie drug game.  Worst of all the costs are passed on to those who are healthier and younger, who will be forced to pay for what they won’t often use.  And to those who are wealthier, through a mandatory additional 5% tax on their income.  And to unborn citizens, who will inherit the ballooning federal deficit. 

These folks really are their brother’s keeper, only not by choice, by force.  I’m sure Nino, who only had an aparment complex (The Carter) on lock down, would be envious of this operation, which locks down the entire United States. Wow! 

Are there any benefits to the national health insurance plan? Sure, if it was made available by choice. If it was actually affordable.  But to compel participation?  That is wrong, even if it comes with the distribution of the ”free insurance” for the poor.  And look, it is right around Thanksgiving.  Am I my brother’s keeper?

Thank you for reading this blog. Share with others. Subscribe by placing your email address in the feedburner box in the left column.

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

Thank you for reading this blog.  Share with others. Place your email in the feedburner column on the left to receive updates.

With news reports mounting every day about the economy, job loss, the stimulus bills, the auto industry, wall street, US bank failures, the mortgage crisis etc, people are left disoriented and confused about the economic future of this nation.  Well right here and right now I  will begin to share with my readers some things you can know for sure about the economic future of this nation.  I will start with an analysis of how we got here next I will move to what strategies will and will not work, then I will end with some likely solutions. But rest assured, you can take these truths to the bank.   So here we go. 

First, the basic principle that most folks don’t fully realize. Credit and debt are the same thing. They are two sides of the same coin.  This means when one person issues credit then another person receives debt.   In accounting, its called double entry bookkeeping.   This is a key factor in the current economic problem. Remember that principle, you will see how it affected the crisis.

The second principle can be a bit tricky to follow. It is that an investment is in actually a loan that someone makes to another entity and as a loan it carries risk.  Meaning, the money invested is on loan to some one or some company that will use that (borrowed) money to make money, but at a risk that the money may not come back to the investor (lender) if the the entity invested in is unsuccessful at making money.  The investor gets paid (interest) for loaning the money at a risk. 

Now, with those two things in mind consider the setup of the problem.  Most businesses use credit (debt) to keep their business afloat and to expand.  Also, most people have their retirement money invested (loaned out) whether in mutual funds, cds, or other investment vehicles, or as savings in banks that loan it out to others.  Consider as well that most major purchases, including houses, cars, college education,  etc., are made by consumers thru borrowed money (loans). 

Lastly, keep in mind that State and Local government municipalities invest (loan) tax revenue out to banks and investment firms.  So credit (debt) is being loaned out everywhere and people are counting IOU’s or (debt) as income or “actual money”.  For example, people say things like “my retirement is X dollars” (IOU), “my house is worth y dollars” (debt), ”my mutual funds or stock are worth z dollars” (IOU). The State govermnment has W dollars in investment money (IOU).  All of which is actually true only when you cash out and have the cash in hand or another tangible asset.

Also keep in mind that all this activity runs through the banks and is a very substantial segment of the U.S. economy.  All of this is relatively fine until someone hits the first domino in a long chain of dominos.

Many mortgages (housing loans) were issued on a false pretense that housing values always go up steadily over time regardless of the cost of the house and that the price increase is always greater than the cost of the loan for the house.  Which is not true. Why?  Because salaries have to increase relative to the housing cost in order for the houses to sell.  

As a result people purchased loans (yes loans! not houses) that were way too expensive for them and also at a cost that would go up when their interest rates were reset.  Many soon discovered that they couldn’t afford to pay the loan and that they owned the debt not the house.  So the banks kicked them out the house and  the borrower still owed the loan (foreclosure).

Banks issue loans and sell investments all the time, this is how they make their money.  Remember one persons loan (debt) is another persons investment (credit). How many ways will a bank issue credit or sell investments?  As many ways as they can?  This became the setup for the current crisis because banks repackaged and sold risky loans as investments to other people.  Then sold what amounts to insurance on the risky loans, as another investment offering. This placed risk (the original risky loan) on top of risk (the investment offering) on top of risk (the insurance investments).                 

So in essence you have investments offered on top of investments.                               Or another way of looking at it, you have debt, piled on top of debt, piled on top of debt. This continued unregulated indefinitely until you had a mountain of debt piled up.                                                    

So once the people begain to default on their housing loans then it meant the creditor (bank) couldn’t collect so every investment built on that loan was now bad. Once that string of investments went bad then the banks couldn’t guarantee other investments because they didn’t have the money, so they also went bad, and so on and so on.  Down came the house of cards.

Worst of all, now that the banks had bad loans and debt piled up everywhere that no one could pay back, then the banks could not issue new loans because there was no money to give, only debt.  This paralyzed the economy by freezing major consumer spending which triggered job loss and slowed the housing market and increased foreclosures.  It also dried up the investment market as investments went bad and crippled businesses who could no longer get (credit) loans.  What a mess!

Who can solve it. Republicans? Democrats? President Obama? Doubtful.   

Here is the bitter truth folks that we will have to swallow.  The days of excessive free flowing money (credit & debt) are over.  People will have to really work.  People will have to create and innovate. P eople will have to become globally competitive. People will have to produce in order to have money.  There is no way around it.

Why?  Because the debt is piled everywhere and you can’t print US treasury notes (money) to solve it because those notes are also backed by credit (U.S. debt) extended by foreign investors to the Federal government.  Nor can the banks simply hit the reset button and all of the bad investments (debt) simply vanishes so that they can be back in business loaning money freely.  Neither is a viable solution.  Also with global markets and competition continuing to rise there is no entitlement to market share and business success.  Oh what a tangled web we weave …

So we can’t print (money) our way out of it. The ink toner solution won’t work.  Nor can we go back in time and erase all the debt and all the bad investments and loans.  And it is unlikely that just because the U.S. banks and investment firms ”crapped out at the investment casino table” that we can clean up their books by giving them money or by taking them over because the extent of their indebtedness is not known.  

It is like throwing good money into a black hole, not to mention that giving a private entitiy huge sums of taxpayer money is completely unethical.  Oh and easing taxes? My dear Republicans, will help out a few, a bit, but it also falls way short of bringing us back to where we were or setting the nation back on track.

So what can we do? 

Well you can start by sharing this blog with everyone you know because over the next few posts you will continue to get real answers.                                                   

Thank you for reading. Subcribe to the blog!