Impufficient – or Hijacked by Harvard in Central Oregon

Impufficient

By Bill Dahl

All Rights Reserved

During my lifetime, there have been more than a few occasions where I’ve felt the impulse to act to fix something. Typically, my wife recognizes this devious, uniquely intense, gleam in my eye as she observes me moving about rather deliberately, locating the tools I’ll require to address the task at hand. (She usually rolls her eyes and makes a barely audible, primal grunting sound indicating, oh boy… Here we go again). My family has learned over the years that when I act on these impulses, the consequences of my efforts are rarely sufficient to produce the desired results (especially if it involves electricity or plumbing). My family characterizes these episodes in my life as impufficient. Let me explain.

Martin Feldstein, Harvard’s George F. Baker Professor of Economics (and President Emeritus of the National Bureau of Economic Research) authored an article in the Washington Post on January 29th 2009 entitled “An $800 Billion Dollar Mistake.” As I read Dr. Feldstein’s piece, I couldn’t help visualizing the good Professor mimicking the reaction my wife displays when I act on impulse to fix something around the house. According to Feldstein, we need to take more time with this effort to create an economic stimulus plan. Feldstein’s argument is that we are succumbing to the impulse to fix the economy without incorporating the essential resources required to do so. Furthermore, Feldstein concludes that what is presently proposed is not sufficient…impufficient, if you will. It’s a unique moment in the history of our family that a concept that characterizes certain experiential moments in our family unit is unwittingly hijacked by a Harvard Economics Professor and finds its way into the Washington Post.

To make matters even worse, I was sitting on the couch in my living room on Friday evening January 30th channel surfing, when there he was — Martin Feldstein — on The Charlie Rose Show talking about his Washington Post article with the likes of Jack Welch, the former CEO of GE, Senator Chuck Schumer of New York, and journalist David Leonhardt of the New York Times. I was mesmerized. The whole conversation was focused on the issue that the impulse represented in the presently proposed economic stimulus legislation is not sufficient…impufficient. Not only did this fellow have the gall to incorporate our family’s sacred word into the conceptual framework of his written piece for the Post, he was now on national television touting it to anybody and everybody. He was in my living room!

Then – final straw of final straws – I went to my local coffee shop Sunday morning February 1st and settled in with the New York Times. On the front page, I began to read David Sanger’s piece entitled “Reinvention or Recovery.” I almost lost my coffee – there he was – Harvard’s Martin Feldstein, quoted on page one of the Sunday NY Times by Sanger, spinning my family’s impufficient concept again.

Honestly, to my knowledge, we’ve never met Martin Feldstein (who knows who my wife chats with on-line). However, Dr. Feldstein, if you ever read what I’m writing here, perhaps your use of our family’s term impufficient, might be further informed by the following:

Your suggestion that a tax credit of some 20% of the cost of a new automobile would stimulate American families like ours to step up and buy a new car — Well, that’s terribly impufficient of you. Do you realize that buyers must have a down payment (that would be some savings), a stable source of income (that’s a job they reasonably believe they will have throughout the term of the loan), a stellar credit score, a debt-to-income ratio acceptable to the lender and sufficient liquidity in the financial system to accomplish this effectively.

Our family’s bank is not Citigroup, Bank of America, Wells-Fargo/Wachovia or JP Morgan Chase/WAMU. Our 401K is not with Merrill-Lynch. We are not insured by AIG or any of its affiliates. We have a conventional mortgage on our home that is well-below the current $417,000 Freddie/Fannie limits at a market rate of interest (not one of those sub-prime or Alt-A mortgages everyone seems to refer to as toxic). We’ve lost 20% + in the value of our home over the past 18 months. Unemployment rates in the tri-county area where we live are the highest in the State of Oregon. This morning’s edition of our local paper (The Bend Bulletin February 1, 2009) said we have almost 2,400 people receiving food stamps in our city. Heck, the populations sign when you drive into town says 24,500. Translation Mr. Feldman: Whatever rescue or bailout that we taxpayers have shelled out the $700 billion for has not evidenced itself where we live. It’s been impufficient.

Mr. Feldstein, one of your central points in your “An $800 Billion Dollar Mistake” article is to provide incentives to households and businesses to increase current spending. Mr. Feldman — America is losing jobs. Those who have employment (as we do) are confronting the reality of having less income in 2009 than we did in 2008 (or 2007 for that matter) faced with rising healthcare, grocery and energy costs, coupled with our respective employers wage stagflation and slashes to their benefit plans. Your suggestion that our family should be provided with some sort of incentive to spend is impufficient, when you begin to recognize our primary concern is survival. We’re not alone: Our friends and neighbors feel the same way. We’re all quite concerned about the state of our economy, our community and our country. Some folks are downright scared. The trust and confidence of folks has been shaken. The American consumer is tapped out Dr. Feldstein. We can’t go on attempting to spend what we don’t have, particularly in light of the fact that real property values for homeowners like us continue to spiral downward, as well as the crisis of confidence that I’ve referred to.

With all due respect sir, you’re obviously a very bright guy and make some other points in your recent media barrage that deserve consideration. However, I just don’t think you live in the same hemisphere as we do. I understand that the ivory tower of academia has a tendency to pull folks like you away from the reality lived by folks like us. Having said that, my wife and I would like to invite you to come out west and spend a week here with us in Redmond, Oregon USA. We have a spare bedroom and Jacki is a great cook. We’re told by others that we’re nice people. I’m sure you’ll find us the same.

One thing we seem to have lost over the last eighteen months enduring this economic crisis is very simple: We wonder aloud if smart folks like you, who are empowered with influencing the content of the dialogue, intended to provide a solution to this mess – truly understand the reality of our lives. What we’ve seen, read and heard thus far is distinctly impufficient.

We’ll leave the light on for ya.

Echonomics

Echonomics

Echonomics

By Bill Dahl

All Rights reserved

Echo – A Refresher for Context

You need a couple of things to produce an echo:

1.      A sound – for humans, a sound that is audible.

2.      A reflector – a surface or substance for the sound to bounce off of.

3.      A sound lag – the reflection of the sound must be composed of a time lag to be distinguished from the original sound.

4.      A receptor – an ability to hear the sound reflected.

When you think about it, echoes have something in common with our other senses:

  • An echo can be heard by the person creating it, as well as others. Yet, what everyone hears is basically the same sound.
  • The same is true for taste. The taste buds of the chef baking an apple pie receive the same delightful sensations as all those sampling it. Apple pie tastes like apple pie.
  • Touch the red coils glowing on a stove top and you understand immediately what hot is – whether or not you were the one who turned the burner on.
  • The sight of chocolate pudding appears brown whether you made it, purchased it at a store, or enjoyed it at a restaurant.
  • Smoke smells like smoke whether you started the combustion or not.

What’s the point?

Let’s imagine that you awakened tomorrow and the following had occurred: Your ability to taste took a minute or so for food to register with your taste buds. The entire process of eating would be rearranged. (We would probably eat less too). What if you laid your hand on the red hot coils of your stove but it took fifteen seconds to register hot with your sense of touch? What if your eyes required ten seconds to recognize color? If you couldn’t recognize the smell of smoke for ten minutes after it initially hit your nostrils, the effects from the delayed ability to react to the impending danger would be catastrophic. The point is that we humans are designed with an array of sophisticated sensory equipment. We hear, taste, touch, see and smell in distinctly similar ways. This magnificent engineering allows us to share and celebrate common sensory experiences in life – together.

Echonomics – Recognizing the Role of Memory

The current global economic conundrum has illuminated two, often overlooked, additional dimensions of the role of the echo. The first is that our minds have the ability to recall the sensory experiences of the past. Memory is an echo. The echoes of previous U.S. economic crises have an uncanny tendency to continue to ricochet throughout the corridors of time. These echoes impact our cognitive ability, as we attempt to comprehend and deal with various dimensions of the current economic crises. Today in the U.S., we hear the most immediate, resounding echoes of our economic infrastructure creaking; Lehman Brothers crashing, the pounding of another foreclosure notice or for sale sign on the front lawn of another neighborhood home, AIG, Freddie and Fannie bellowing for capital infusions, IndyMac and Washington Mutual collapsing, the flow of capital throughout the financial system becoming an annoying drip, government loans to address the cries in the ward of the ailing American auto industry, and the breaking apart of Merrill and Citigroup, to name only a few. These current day echoes send our minds searching for similar sounds within the recesses of the history of our nations economic system – The Great Depression, downturns in the 70’s, 80’s, 1990 – 91 and 2001. Yet, as we process the echoes from our past, we quickly realize that our past does not equip us adequately to deal with these unprecedented times. At best, these memories echo the fact that the lessons learned during previous, comparable, economic eras in our history, require the immediate development and implementation of new forms of fiscal policy to address our current predicament.

What we hear from the past does not always equip us adequately to deal with today. However, in this sense, echonomics provides us with an inescapable component of our ability to evaluate and attempt to comprehend the current crises. Echonomics supplies a terribly valuable capability; it allows us to exclude attempts to apply old approaches to the distinctly unique economic challenges confronting us today. As one publication confirms: “America’s GDP may have fallen by an annualized 6% in the fourth quarter of 2008, but most economists dismiss the likelihood of a 1930s-style depression or a repeat of Japan in the 1990s, because policymakers are unlikely to repeat the mistakes of the past.” [i]

Echonomics – The Sonar Scenario

The second most often overlooked dimension of echonomics is that it leads us to look beyond the obvious. Echoes are invisible to the human sense of sight. The loudest, most prominent echoes garner and dominate our attention. A shotgun blast discharged at the bottom of the Grand Canyon obscures the echo of a young boy shouting at the same moment the round was fired. Yet, science has harnessed the use of the echo as a measurement tool. This is basically how sonar works; by electronically analyzing the echo time lag of sound waves. Sonar determines the existence, distance and location of objects beneath the surface of the sea that we cannot ascertain with our human senses alone. In this sense, echonomics implores us to become aware of the existence of conditions beneath the surface of the most apparent, easily recognizable attributes of the current economic crisis. How do we do this?

We rely upon measures like consumer confidence[ii], unemployment figures[iii], the consumer debt index[iv], and foreclosure data[v]. Interestingly enough, these are measurements that were developed in the distant past. Yet, as London School of Economics Professor Charles Handy once wrote:

“The first step is to measure whatever can be easily counted. This is OK as far as it goes. The second step is to disregard that which can’t be easily measured or to give it an arbitrary quantitative value. This is artificial and misleading. The third step is to presume that which can’t be measured easily really isn’t important. This is blindness. The fourth step is to say that which can’t be easily measured really doesn’t exist. This is suicide.”[vi]

I find it very interesting that the awareness of the depth, breadth and complexity of current U.S. economic crises did not come from interviews with families who were losing their homes to foreclosure, broadcast by the major U.S. media outlets. When we experienced the thundering crash of Lehman Brothers, Fannie and Freddie reverberating through the economic headlines, the government U.S. became deafened to the distress signals of individuals, families and small business – I refer to this as echollateral damage: the echo from significant organizational/institutional failures in the economic sector drown out the distress signals of the smaller units within the overall economy – particularly the U.S. consumer and small business.

Clearly, the most immediate and tangible attempts to address the current crisis by the Federal Reserve, the U.S. Treasury and the U.S. Congress have been targeted at repairing the prop in the financial services sector of the economy. At the same time, the sonar readings indicate that the pain of the U.S. consumer has risen precariously close to the hull of the good ship USS Economy.

Is the U.S. economy in danger of running aground or do we remain capable of navigating away from the ever encroaching possibility of a hull breach?

Summary:

It’s time to pay attention to the rapidly increasing frequency of the bleep, bleep, bleep emanating from the echonomics sonar. There has been a seismic shift on the sea floor of the U.S. economy whose shock waves have created the tsunami we are presently dealing with on the surface. The depth charts we have used to guide our navigation during previous voyages through these types of rough seas have changed materially. The rise in unemployment, the systemic depletion in the asset values of 401K, savings and brokerage accounts, the rise in default rates on mortgages and other consumer credit related obligations, and the fact that for millions of American consumers, the value of their primary personal residence now exceeds the mortgage(s) due; well — this factual reality has risen to such a level that trillions of gallons of liquidity have evaporated from the oceans of capital in this economy. Draft is a term that can be used to describe the depth of water a vessel requires when loaded to navigate safely. Presently, the USS Economy is heavily burdened and the sea floor has risen to create a situation where our vessel is precariously close to running aground and breaching the hull.

The purchasing power, employment stability, creditworthiness and liquidity of the U.S. consumer have always contributed mightily to the essential depth and buoyancy the USS Economy requires to sail safely and effectively. These factors enhance our ability to prosperously and confidently navigate into the future.

It has been said that “social crises…become apparent only when those who bear the scars of the crises speak out, insisting that their stories become part of the public dialogue.”[vii] Perhaps it’s time that we garner a renewed appreciation for the practical reality of the concept of echonomics that has been illuminated herein: The voices of those whose lives who have been substantively overlooked in the current economic crisis require our public policy makers to listen differently…to not only attend to the thundering echoes of institutional and infrastructure failures, but turn their attention to those whose cries remain muted as they attempt to call attention to their plight, amidst the rubble. Let’s not overlook the power in the fact that “courage is contagious. It overcomes the silence and fear that estrange people from one another.”[viii] Let’s not underestimate the constructive possibilities for truly recognizing the presently muted voice of the American consumer, the American homeowner, the American small business community, and the American family.

It has been suggested that “When economics is the main model for our common life, we are more and more tempted to put ourselves in the hands of the manager and the expert.”[ix] This treatment of the concept of echonomics is a reminder to those so empowered, to turn their attention to the plight of those American voices that remain muted by the more prominent echoes of institutional and infrastructure crashes.

As Professor Handy said above, to fail to adequately measure and address these concerns is a form of blindness we cannot afford to avoid any longer. May this wisdom echo across our land.

blindness we cannot afford to avoid any longer.

blindness we cannot afford to avoid any longer.

blindness we cannot afford to avoid any longer.

NOTES:


1 http://www.economist.com/finance/displaystory.cfm?story_id=12852043

2 http://www.conference-board.org/economics/ConsumerConfidence.cfm This index is now at historic low as of January 2009. This measure has been in use since 1967.

3 See http://www.bls.gov/

4 See http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/11-28-2008/0004933422&EDATE=

5 See RealtyTrac at: http://www.realtytrac.com/ContentManagement/PressRelease.aspx?template=nonmemb_cm

6 Handy, Charles The Age of Paradox, Harvard Business School Press © 1994 p. 221

7 Rogat Loeb, Paul Soul of A Citizen – Living With Conviction In Cynical Times, Copyright © 1999 by Paul Rogat Loeb, St. Martin’s Press, NY,NY p. 131.

8 Rogat Loeb, Paul The Impossible Will Take A Little While – A Citizen’s Guide To Hope In A Time of Fear Copyright © 2004 by Paul Rogat Loeb, Basic Books – Perseus Books Group, NY,NY p. 11

9 Bellah, Robert N et al.  Habits of The Heart- Individualism and Commitment in American Life, University of California Press Berkeley, CA © 1985 and 1996 by The Regents of The University of California, p. 271

Vertigonomics

Vertigonomics

Communicable Disease Center

34 Econo Drive

Washington, D.C. USA

January 16, 2009

Bulletin: ETD Epidemic AlertVertigonomics:

It’s spreading — fast.

Lobbies of banks, credit unions, mortgage companies, hedge funds, brokerage firms, law firms, physicians and the emergency rooms of hospitals throughout the U.S. have been inundated over the past week with American consumers afflicted with what is believed to be a highly contagious, life-as-you-knew-it threatening malady. At the time of this writing, public health officials remain somewhat baffled. Although current details are sketchy, the only common characteristic identified among the afflicted is that all claim to be suffering from Economically Transmitted Diseases. Based upon this fact, the following is hereby communicated to the public:

Infectious Disease Alert – CDC #2009-10-4 C:

The CDC confirms that an outbreak of Economically Transmitted Diseases has reached epidemic levels in the United States. According to CDC Director Dr. E. Conomy;  “We have confirmed that this uniquely contagious disease has now infected unprecedented numbers of American families, companies and the financial infrastructure of the United States. It is airborne. Presently referred to as Vertigonomics, officials at every level of both the public and private sector are working feverishly to develop a vaccine to stop the spread of this malady. Unfortunately, our collective attempts to halt the ongoing infection rate have not met with the results we had hoped for. However, we remain dedicated to developing and distribute the essential protocols required to address this national public health priority.”

Epidemiology:

Demographically, there are no identifiable persons, families, companies who have immunity.

Symptoms – Vertigonomics:

· Distinctly elevated levels of anxiety and insecurity.

· Persistent and unrelenting fears and worries about the current state of ones financial situation.

· An overwhelming sense of uncertainty about the future for yourself, your job, family, your employer, community, country, and the world around you.

· A deeply held gut feeling that these are unprecedented times.

· An almost complete loss of confidence that “government actions will get us out of this mess.”

· Rage and a horrifying feeling of exclusion when you hear terms like bailout, rescue plan, TARP, and stimulus.

· You feel that your life has become unbalanced and you suffer from a recurring sense of economic dizziness, unable to regain your previously held financial foothold.

· A cosmic sense that the sky is falling or that life’s rug has been ripped out from beneath you.

· The hopes, dreams and expectations that you held for you and yours have been somehow dismembered by forces outside your control.

· A distinct, paralyzing feeling of helplessness.

· You’ve heard yourself say or think incessantly, “This sucks!”

· You have spoken to a representative of your mortgage holder and have come to the realization that the help they say they are authorized to provide you and yours is woefully inadequate.

· You are seriously considering the cessation of payments to your mortgage holder(s) so you might qualify for federal homeowner foreclosure relief programs that are being debated.

· When you hear the term recession it confirms your own depression.

· When you see the most recent poll on declining consumer confidence in the U.S., you feel good about being included in something.

· Your world today seems upside-down.

Diagnosis – Vertigonomics:

· You do not have enough money to make ends meet.

· Your 401K has lost 30% + of its former value.

· You may have been laid off or legitimately fear the same.

· You have witnessed a distinct increase in the rate of business failures in your community.

· The value of your primary personal residence has declined below what you owe your mortgage holder(s).

· Your company is slashing expenses, has frozen new hires, and reduced employee benefits significantly for 2009.

· When you watch the evening news surf the net or read you daily newspaper, you say “Holy crap!” at least once.

· You read the foreclosure notice section of your newspaper on a daily basis just as you have read the obituary section routinely in the past. You’ve seen the names of people you know in there as well.

· You see ‘For Sale’ signs when you close your eyes in bed at night.

· Foreclosure notices seem to outnumber paid advertising placement in your local newspaper.

· You can’t remember what you spent the last federal stimulus check on that you received in 2008. You certainly didn’t purchase anything that is visible in your current living environment.

Status of Treatment/Immunization/Innoculation/Vaccination

Vertigonomics is a uniquely resistant strain of ETD. As stated by the CDC’s Dr. Fed: “We’ve never seen anything remotely close to this malady before. Our current efforts to contain this contagion have been – well, we’ll see.”

Laboratory trials of the “green jobs” vaccine indicate that this may be an essential and viable part of the treatment protocol. However, the healing realized may take several years. Capital injections into major money-center banks to spur both stabilization and an increase in liquidity in the U.S. financial system have yet to produce the desired results. The merit of continuing these injections is an ongoing debate. A transfusion of funds directed at shovel-ready public works infrastructure improvements is promising; again, as a component of the required formula. The effects of grafting federal funds into the body of the ailing auto industry is considered to be “too soon to tell.” However, common sense suggests that additional taxpayer dollars will be required.

Conclusion:

If you feel forgotten as a law abiding, tax-paying citizen of this country, you’re not alone. Millions of Americans are infected with the same malady that you’re currently suffering from. We realize that there is little, tangible solace in the fact that your misery has tons of company.

However, it is our hope that the American consumer, as an individual and familial unit, will receive what you require; the immediate, direct and deliberate injection of a form of relief that may stimulate and restore the balance and confidence that is fundamental to a return to stability, accompanied by a cessation of the staggering sense of dizziness that this affliction continues to perpetrate upon the innocent citizens of this country. The following are pertinent considerations:

  • Cessation of Federal payroll taxes for two years. BOTH companies and employees will have additional cash flow.
  • Extend unemployment benefits for 12 months beyond their current expiration.
  • Fund shovel-ready public works projects designed to address legitimate infrastructure restoration and public education projects in the U.S.
  • Provide residential home builders with tax incentives to design and build smaller, high density primary personal residences that are both affordable for the workforce.
  • Provide tax incentives toencourage enrollment in higher education.
  • Provide federal incentives to spur volunteerism in our society.
  • Re-engineer the healthcare component of the conundrum.
  • Federal Incentives to companies who create new jobs in the U.S.
  • Tangible tax relief for small business and new start-ups.
  • Use TARP funds allowing community banks to swap their impaired real-property related assets and boost their liquidity allowing them to return to lending to the citizens and businesses within which they reside.
  • Stem the swelling tide of foreclosures and the ongoing spiral of residential real property valuations with tangible, systemic relief. Allow lenders to re-appraise residential properties and adjust mortgages down to current market value. Provide tax credits in an amount commensurate to the mortgage relief they provide, allowing them to shield future profits against this sum, while not requiring the loan loss reserves to further deplete their balance sheets and federally mandated capitalization ratios.

Honestly, what has been missing in all our recent attempts to develop a treatment modality for Vertigonomics is the courage to confront the entire spectrum of this malady with the boldness and courage required. As of the date of this writing, the CDC will boldly advocate for the essential political support to enact the measures described above.

We hope you will join us. Call your elected representatives and bring their attention to this bulletin. Perhaps, they might garner a deeper appreciation for the effects that Vertigonomics is having on Main Street vs. the attention they have been providing to Wall Street.

Yes, In God We Trust — the other part of this equation is that God expects us to do something constructive about the circumstances that confront us — together.

"How might words, images and ideas open minds, warm hearts and inspire imagination? May you find them refreshing and share them among your people."

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