McCain Flub Political action e-mail

Critical mistake of John McCain on the economy.

In today's speech (9/19/2008) McCain said the fed should return to managing the purchasing power of the dollar.

What that means is he wants to strengthen the value of the dollar.

However, the one factor that is keeping our growth numbers from clearly showing recession - the one bright spot in our economy - is that exports are up.

When our dollar is weak, our products are cheaper to people around the world, and we export more.

So, if we had a strong dollar right now, as McCain proposes, we would extinguish the one strong area in our economy.

Sincerely,

Benjamin Feinblum
ps. I am independent, have voted both Republican and Democrat and am very specific on who I support. I have also met and spoken at length with John McCain in the past. I like the man, this is a disagreement of approach.

I've sent this to all the major producers of all the major news networks. Hopefully, this is caught and covered.

elaboration on economic crisis solution

Dear Dr. Reich,

I see a problem with your analysis and everyone else's on the economy and why certain things are occurring now.  As a magician, when people try to explain how a trick worked, they come up with these convoluted answers like, "He made it fly with magnets in his sleeves, that are charged with electricity..."  The answer is always far more simple.  My point is, everyone is looking with wide eyes at a failing housing industry and Leman brothers, and we are so baffled by these overt things that we miss the simplicity behind what has us tricked.  

Bottom line:  I am seeing that our country has a business cash flow problem.  At the root of the cash flow problem is an attitude problem that it is ok to send all of our money to other people and countries.  This is likely Bush's business attitude at work, if you look - it is the same attitude that says, "no matter what the economy will be better with tax cuts only.  Anything else will murder the economy."  One example of the attitude is that, while we have massive deficit - a negative cash flow nationally - Bush proposes reducing the positive cash flow into the accounts by cutting taxes.  Consider that this attitude is pervasive and a lack of balance characterizes the approach because the understanding of a need for balance does not exist.

A strong place where this exists is the trade deficit.  What I have determined is that we are funding our trade deficit with money we don't have in cash - American's are not saving.  So, where does the money come from?  Does it appear out of thin air?  Magicians?  

Theory:  We are deflating the prices and value that our markets can support by sending 700 billion dollars overseas.  

Housing prices:  The market began with single worker families.  Men were buying the houses, with their sole income.

Then, women entered workforce, the housing market saw room for expansion.  With two earners, the market would support larger, more expensive houses.

If you look - that is the root of the macroscale long term increase of prices of houses.  That is what supports prices going up.  

What if we had a two earners family, who was sending $5000 a year to their next door neighbors.  In 10 years, thats $50,000.  This one family doesn't have 50,000 that they would have been able to put towards a house.  

Blow this up to macro-scale and look at this structure in society.  The two earner family is every family.  The money sent to the neighbors is being sent when we buy things overseas.

What does this feel like?  It feels ok to people because the money scraped off the top is disposable income.  However, that family after sending that money overseas would only be in the market for a house that was $50,000 less, or in the market to buy $50,000 less in stocks.

That money going out, means that we cannot support our markets.  If the total value of American assets is roughly 50 trillion dollars and for 10 years we send out 700 billion.  Then in 10 years we sent out 14% of the total asset value of our economy.  

However, because our asset holders - Lehman bros, for example - were leveraged buyers.  The net worth of our country being sent overseas has calamitous effects earlier.  The same is true with Americans who have more on credit cards then ever.  

If we are reducing the money we have here, the impacts will be greater when the people are financially overstretched.  

My concept here is:  we are funding the trade deficit with the equity in our homes and assets in our stock market, not with cash.  

Remember, we had an internet bubble.  What occurred in that bubble is we spread communications globally via fiberoptics, business lost its borders, we lost the feeling of handing money, green cash to people, and began to feel free to spend electronic credits that we care less about losing.

So finding every solution that is the anti-thesis to this attitude that its okay to have a negative cash flow - I mean on the personal level, government level, and business level,   

A summary is below.

I have also been researching for charts, graphs, and others with similar beliefs.  Here is the clearest article:

 http://www.safehaven.com/article-3162.htm

Will you help Obama use this information to express an economic plan that will work with the immediate crisis?  Give him the upper hand by giving him the root of the problem?

For example:  1) buy American.  Stop buying everything from overseas until we get a grip on things.  Thats one things that would resolve the trade deficit.  Bush proposed higher consumption to improve the economy, but most consumables are now made in other countries, which compounds our current problem.

See how this all gets worse and we are digging a hole and seeing larger and larger results?

Solution to economic crisis. OBAMA will win this election if he has the answer to the root of our problems and builds solutions around them. This is the root of the problem.
#1 Understand the root of the crisis
#2 Create a solution

#1: Massive trade deficit is not being funded by savings, it is being funded by credit, the equity in our homes, and the value of our assets.

#2: Begin a shift in the attitude of American's and the leadership towards money and where we send it. We should keep it in our pockets.

Concept, if we send $700,000,000,000 overseas. Where is that money coming from? If American's are not saving their money, we don't have cash in our accounts, how are we funding that deficit.

My theory is that we feel ok with the deficit because we are pulling it out of our market place in ways that are not so visible. An economy losing that money, does not have the money in it to support increasing home prices.

If we send money overseas, we are removing money from all of our markets - stock markets - housing markets - auto markets. Thus, we are seeing massive crashes in all of these things.

Bottom Line: We have an attitude that all of this spending, sending money overseas this way with a massive trade deficit is killing our economy from the inside out.

When we spend money that we don't have, we later can't borrow that money for a home. We have borrowed it for consumption and sent the borrowed money overseas.

Please, consider my theory on the relationship between money attitudes that make it ok for us to send 700 billion dollars overseas and the resulting loss of ability for our country to support the prices we established in our markets.

Sincerely,

Benjamin Corey Feinblum

Funding trade deficit via home equity

I believe that we are funding the trade deficit with home equity, not cash, not credit, and now - assets like companies.

This article elaborates on the trade deficit/cliff

http://www.safehaven.com/article-3162.htm

Question:  What is the amount of money in the trade deficit?

What is the amount of money lost in value of our assetts?

Homes:

Stocks: 

Businesses:  

Here is a paragraph from the article that illustrates the connection:

This astounding amount is 40% of GDP and shows no signs of slowing. To put this $4 trillion in perspective, the comparable base of what the whole country is worth is only $48.5 trillion. This total value of the nation is the sum of all real estate, all equities and such personal possessions as cars and furniture. So we are approaching having given away 10% of our net worth as collateral for importing the oil, cars and computers we use for our life style.

If we sent all our money overseas, would we see companies buying assets with borrowed money?  Aka: Leveraged stock investment

Would we see that money all the sudden evaporate if the rest of the money was based on value our market had defined, but our 

economy could not support?

I found these charts.

All these pictures show that the deficit is big and growing.

The Trade Deficit links to the US housing bubble and government deficit
The most basic view of the economy is diagramed below. Households earn the wages they spend on the goods and services from the businesses:

The following chart adds that consumers spend a portion purchasing foreign goods. The foreigners then recycle the dollars they collect from this trade into the US government debt by buying Treasuries and into Agency debt of Government Sponsored Enterprises like Fannie Mae, which then provide money for housing.

Foreigners have funded our housing boom and provided enough credit that the growing Federal deficits have not driven interest rates up. Much is simplified out of the above explanation, but the value is that we can see the biggest and most important money flows.

The US credit market matches the amount borrowed and lent. The accumulated foreign contribution of $4 trillion of lending (investment) has provided the credit for the borrowing by the US government whose debt held by the public is now similar in size to the accumulated foreign loans to the US. The chart below shows the size of Federal government debt and the foreign accumulated current account debt to point out that foreigners are funding credit at comparable levels:

A comparison of Mortgage Debt and Current Account shows similar growth rates:

Subprime mortgages are a symptom of the same unweildy spending of money, I believe was influenced by the capacity to hand money off by computers and cards, rather than cash passing from hand to hand.  We couldn't see or feel how bad our transactions are.

$2333 a year going out.  Per person, this includes kids.  

Government needs to nationalize oil drilling where we made all the leasing available, but have not used it.

The core is actually an attitude towards money, resources, and assets that is all confused.  

So, let me repeat - trade deficit is a number one problem.

Trade deficit and other money issues are an expression of a core attitude problem about money.  

Rise up America - Countering the Palin Halo Effect

Social-psychology of persuassion communication analysis.

I am a social psychologist and communications expert and am e-mailing a concise analysis of the current challenge at hand an approach to overcoming it.

1) Palin is experiencing the "Halo Effect."  This is when a full range of positive attributes are given to a person who is very attractive and seems like a positive person.

2) Obama benefited from some of that before.

3) McCain's current method is to directly target Obama's "Halo Effect," by smearing as solidly and as rapidly as possible.  Believing that Obama was successful due to this effect, he is going straight after it and chose a candidate that could challenge that.

4) To counter this, Barack needs to use the contrast principle, destroy Palin's halo ASAP, and rebuild his Halo Effect at the same time.

Method of Attack:

1) Demonstrate a pattern of calculating public deception

- listing of all deceptive elements.

a.  McCain on Obama's Tax plan

b. Palin bridge to nowhere

c.  The advertisement about sex ed for kindergardners

- and the full list, you are aware of what they are.

2) Put your version of the facts right next to theirs.

- Reality of Palin on the bridge + Your history on earmarks good vs. bad - 

-McCain's statements on taxes.  His history and real plan.  Your real plan.

Contrast these 100% right next to eachother.  

3) Focus on painting this as a pattern of deception.

4) Once the pattern is revealed bring up the question - if you see this deception, and don't question it now.  Where do you think we will be in one year.  Bush used lies and smears against Kerry, complete fabrications, and even used them against John McCain in 2000.  Here is the kicker - 

If we accept lies and distortions now - what will we if he is allowed to take office?

Bush smeared, swiftboated, and fooled America about John Kerry.  Then he fooled the entire country and tried to fool the world on WMD's.  It started before the campaign and continued when he got into office.

5) Shift your change message to a call for change today, now, rather than in two months or a year.

6) Call American's and the News Media to change by "rising up."  Do you think McCain and Palin will lie and distort now, and continue to do so, even after being discredited on issues - and then stop if they get to Washington.  Rise up America.

Do you think all those lies will just stop in November, it didn't happen with Bush - he just kept on lying - "Rise up America."

We may be seeing how McCain and Palin truly want to run this country in the future, if this is not what you want, "Rise up America."

Bring your change message, to be a message of rising up against the current lies.  

Frame this as a bigger issue. 

If you accept these huge lies now, what will America look like for the future, possibly the next 100 years?  Political attack engines, will lie and decieve their way into office.  And those who are best at lying, smearing, and deceiving will always end up being your President. 

Housing is tied to the trade deficit.

I have never heard someone say this.  I came up with this by myself.  

Concept:  Sending money away - Iraq, Trade Deficit - it is no longer in our country

Concept:  Housing is a market driven by what the market will bare.

Postulation:  If we send our money over sees then there will not be money available to sustain the same housing market.

Theory:  Saving is down in the US.  So, if we are wealthy, where is our wealth?  In our house.

If we are sending our wealth overseas, where will we lose our wealth?

Where our money is, in our house.

Mechanism:  Wages down, wealth in the country down, cash on hand for buying homes down, credit down, housing market down.

Basically, we sent all the money out of the country, the money is not here to sustain price levels in the housing market, so housing prices are dropping.

New concept:  What we are spending overseas is essentially coming out of our home value, not cash.

Home value dropping is the impact of the trade deficit.

Correction:  Fix the trade deficit, we bounce more money around in this country, and bring more money into this country, employ more people, then housing values go up.  

Compounding problem:  When people expected growth in their income and it did not arrive, interest only and adjustable rate mortgages killed people adn put them into foreclosure.

I want to repeat this:

We are sustaining a massive trade deficit by pouring money out of the wealth source, our home, not the wealth source our bank accounts.

How housing prices are set:  

When single worker families in the past, only men working - homes were priced to what that market would bare.  Homes were built to what that market would bear.

Challenges, and women began to work.  Suddenly, there was enough extra money that the market would bare bigger houses.  They were built, prices were raised on existing homes.

Women work full time to afford even larger houses.  Keeping up with the Joneses takes off and we buy astronomical houses.

We buy in risky ways, interest only loans, and by spending more money on credit cards for other goods when we spent too much on homes and perhaps cars.

The money we were spending, we were sending overseas.  So, it was giving us products to put in our homes to feel wealthier and feel like we have a higher standard of living.  Then, we sent too much money away.  We borrowed too much on homes.  We borrowed too much on credit cards.

The standard of living bubble is upon us.  

I conclude:  Our home prices are dropping because we send so much money overseas, there is not enough money here to sustain the prices that were set on homes.

I predict:  a major expansion of the depth and breadth of the problem before it gets better.

Recovery = when trade deficit turns around enough that money is pouring into our economy and we are flush again.  

Flush people can afford bigger better homes, and will.  Then prices will begin their climb again.

Trending - trade deficit seems to be slowly moving in the right direction.  If this accelerates - we will correct in this country.