A business associate and I roomed at an extended stay.  I was impressed with the facilities and service.  The hotel had breakfast every day and hors d’oeuvres, beer and wine Monday through Thursday.  I have to admit that one evening I ingested four hamburgers (what a pig) with vegetables (healthy).  This is in addition to lunch and occasional dinners that we were treated by our gracious hosts.

After a couple days in Irvine, I could feel my weight going up.  We decided to hit the exercise equipment forty-five minutes a day.  There was a weight scale, but we decided to skip on the reality check.  The exercise room had a large flat screen.  Most of the days the television set was tuned to CNN.

By now every Naive American knows that a considerable sum of taxpayer moneys, in the order of billions of Dollars has been, and will continue to be handed to bail out AIG (http://www.aig.com).  I am not going to cover in this blog if bailing out AIG is the right thing to do or not.  Will leave it for a separate entry.

The fact is that after the US government handed bail out funds to other financial institutions with few (if any) strings attached, AIG takes some of such funds and hands bonuses to many of their executives.  When the AIG bonus news hit the media, there was an outrage across America.  Apparently the AIG bonuses were authorized by a small clause (a sentence) in the law that was passed a few weeks ago.  CNN asked every single politician involved in generating the bailout law if they had added such phrase.  Believe it or not, not a single politician wanted to admit they had written such clause.  Senator Christopher Dodd (Democrat) of Connecticut was interviewed and he stated on camera that he did not know about the clause that mysteriously was added to the AIG bailout.  A couple days later he admitted that he authorized the clause, but he was not aware of the exact wording. 

We Naive Americans need to think about the actions of Senator Dodd.  First and foremost, he lied.  This is typical of most (if not all) politicians.  Second and most important, why would a politician do such an unethical and immoral thing?  The answer is simple yet disturbing.  The checks and balances in the US make it difficult (not impossible) for politicians to accept bribes.  Our political system allows for lobbyist and political contributions.  Most AIG executives live in mansions in the state of Connecticut.  Do you see the relationship?  Lobbyist for AIG pressed Senator Dodd to include such a ludicrous clause so their customer (AIG) could collect their bonuses not associated with performance, but in return for supporting Dodd’s political aspirations.  What is the saying that comes to mind “You scratch my back, I scratch yours”.  As most Naive Americans may realize by now, our electoral system is flawed.  Money paid by companies (i.e., AIG) to politicians (i.e., Senator Dodd) through lobbyists is what dictates US policy.  This is nothing new.  Has been in place for the past fifty years or so.

Now lets focus on the recipients of the AIG bonuses.  For starters, traditionally in our society, bonuses are given to people based on performance.  If the company is doing very well, then bonuses are in order to provide incentives to motivate hard work above and beyond the expected 40-hour week.  Two things come to mind.  [1] If the a company (i.e., AIG) is doing poorly as a result of bad and irrational decisions made by management, how in the world do they deserve a bonus?  [2] If a company (i.e., IAG) is doing poorly to the point of being in the verge of closing, how could the company get funds to pay bonuses?  The logical and simple answers are: no one deserves a bonus and there is no money for bonuses.  How in the world could lawyers and politicians come up with any valid concept or idea that would justify this absurdity?  Do not forget that the money at stake came from Naive American taxpayers.  I do not know about others, but this Naive American is completely against handing a portion of my taxes as some type of bonus to any company receiving bailout money, no mater what their situation is.

Naive Americans have heard people in Wall Street justifying that high-level executives need huge compensations to do what they do.  This sounds like royalty to me.  Upper management in the Financial System is incompetent and greedy.  They should all be fired and replaced by Naive Americans that are willing with a salary that cannot exceed by law the one paid to the president of the United States of America.  The majority of stockholders must approve any and all bonus to any and all executive.  Disband all board of directors.  Bonuses must always be paid in the form of stock options (not cash).  This proposal should not be taken as a suggestion by all types of companies, but should be made law in the US.  Please keep in mind that if the company is doing well, stock holders are collecting high dividends and would be willing to allow some shares to be purchased as options to compensate the hard work of executives.  If executives perform poorly, then dividends would be down.  The affected stockholders would not be willing to hand options to such individuals.  They would probably consider firing them.  This brings up the elimination of all “golden parachutes”.  If executives are fired for poor performance, then they should collect unemployment like a large percentage (currently about 10%) of Naive Americans are doing today.

Incompetent group of executives in all types of companies believe they belong to some type of class (royalty) that is above the rest of Naive Americans.  The US government should pass legislation in order to eliminate such class.  Please read what has happened to royalty though the ages in different civilizations.  Hopefully the economic and political unrest in our country will not lead to such dramatic and permanent actions.  As unemployment and unrest grows, the US is at a high risk of making dramatic changes not spearheaded by politicians but by Naive Americans.  We are in desperate need of CHANGE.

The USA is in need of simple legislation to get us back on track.  Regrettably this falls in the hands of politicians that are being bribed by companies and entities via lobbyists.

I urge each and every Naive American to put pressure on their representatives to induce peaceful and gradual change.  The same holds true to management in all types of companies.  The US needs to wake up and smell the roses.  We have been living in a dream in the past fifty years.  It is time to wake up, make CHANGES and work together for a new USA.

I am sending you this letter in hopes you clarify how your stimulus package(s) are going to help Naive Americans that are or have worked in Wall Street and are loosing or already have lost their jobs.  I am also interested in finding out what your administration is doing or going to do to prevent the issues that caused the US economic meltdown not to repeat.

As I have stated on previous blogs, I am a computer scientist not associated in any way with Wall Street.  I have read several articles on Wall Street and watched several segments on the subject on national TV.

The financial system in the US is completely corrupt.  Greed had been the motivation for most people involved in the financial industry, which I will refer to in general as Wall Street.

The Oxford on-line dictionary defines Greed as follows:

Noun intense and selfish desire for food, wealth, or power.

All is well with being greedy as long as it does not compromise moral and ethical principles.  Given that you are a lawyer by trade, I assume that you are familiar with the base principle of morality (which has nothing to do with any religion):

Do not do to others what you do not want others to do to you.

Based on the news, it appears that some (very few in the opinion of most Naive Americans) Wall Street executives are under scrutiny by the US legal system to determine if they have committed crimes.  The issue with this is that many Naive Americans have become very good snake oil sales people (deceiving others) and like to walk on a thin gray line between what is criminal and what is not.  No matter what people in Wall Street say or how are they represented, they all knew what was going on and they did nothing to correct or stop earlier in the game.

As you well know, most of the economical issues the USA is currently experiencing were precipitated (not started) by a law passed towards the end of the Clinton administration (way before the 8 years of George W. Bush while you were a politician in the state of Illinois and the few months of your administration).  It appears that greed, lack of responsibility, lack of morals, etc, etc, etc was not only something found in Wall Street but it was (and still is) spread all over our society.

This Naive American fully understands that it is important to recognize the past, but it is a complete waste of time and resources to just complaint and not CHANGE.  Sounds familiar Mr. President?  We need legislation to be passed to address the issues that led a small set of Naive Americans to take advantage of the majority without any legal consequences.  We also need to make sure that checks and balances are in place in Wall Street so greedy Naive Americans are not able to repeat what they have done.

A few weeks ago I was watching the news on national TV.  A Wall Street analyst stated that executives in his business live a different reality.  They need to be greedy and get paid millions of Dollars a year.  I can assure you that you can fire all Wall Street executives and in less that 24-hours such positions would be filled by better qualified Naive Americans which would be eager to work for a reasonable salary (no more that $400,000 Dollars per year) and get stock options from stock holders to motivate them to excel in their jobs.  In America we do not believe in blue blood or monarchies.

Regarding the stimulus package, how is it going to help Naive Americans that used to work in Wall Street?  Building roads, making buildings green, getting healthcare and unemployment benefits are not going to the problem.  The caps on Dollar amounts and periods for unemployment benefits might be fine for Naive Americans that had very low incomes, but not for middle and upper middle class workers from Wall Street.  Most Naive Americans are part of the middle class (which sadly is shrinking and could / will bring serious problems down the line).  Middle class Naive Americans need well-paid jobs that produce goods and services that may be consumed in and outside the US.  Well-paid jobs that demand skills and know how have gradually been outsourced.  Manufacturing has been affected by globalization.

In conclusion, pouring money that will never be recovered into the economy is just going to postpone and / or stretch the symptoms.  If the stimulus is coming from taxes, loans, or printing currency, things will just get worse.  The USA needs massive and deep CHANGES in our economy and society in order to get us back on track and leave our children and generations to come a better place to live in.

Yours truly;

The Naive American

PS:           Mr. President, please read the About section in the www.naiveamerican.org site to get a better flavor of what has and is happening with the USA.  Then prove me wrong by inducing the proper CHANGES!!!

Hope this blog finds you and your family doing well in the White House.

First I want to thank you for taking into consideration the suggestion offered by the Naive American regarding capping compensation for upper management in entities that receive federal bailout moneys.

On the topic of compensation packages for upper management in corporate America, I wish to reiterate that, legislation should be enacted for all companies (not just the ones receiving federal aid) operating or based in the US to mandate a maximum salary cap of $400,000 Dollars for all CEOs and monotonically decrementing amounts for the rest of the upper management team.  There should be no other compensation perk (i.e., company car, company jet, company house, company boat, etc, etc, etc) with the exception of stock options granted with approval of the majority of stockholders.  By the way the idea of preferred and common stock should also be eliminated in conjunction with any type of severance package (golden parachutes).  This way, if company management teams do not perform, immoral tactics employed by incompetent and greedy upper managers would not affect employees, stockholders and as a consequence the US economy.  I will have more on this topic on a future blog.

After doing some research on the web I found out that the current compensation package of the US president includes a base salary of $400,000 per year plus a $50,000 expense account, $100,000 non taxable travel account plus $19,000 for entertainment, plus use of the company mansion (The White House) and the country home (Camp David).  Not sure how the $100,000 travel account works due to the fact that you have access to the company jet(s) (I believe they are called Air Force One).  Overall, given the amount of work, responsibilities and number of hours on the job, most (if not all) Naive Americans would agree that for an elected official your compensation package might be quite reasonable.

I will now address the main subject of this blog.  Naive Americans are used to the concept of top ten lists.  Just go to your favorite web search engine and type in the search box “top 10“.  You will be amazed how used Naive Americans are to this concept.  There appears to be a top 10 list for any imaginable class.  Apparently Naive Americans like to know about the top 10 in any category, but the question is, do we know how to select the most important list and the items that should be included?

Following is the top 10 list of threats to the American Way of Life:

Please note that the order in the top 10 is completely subjective.  As we discuss each entry in future blogs they might shift around.

President Obama, please note that the top 10 list of the Naive American does not include the common threats to the US like Osama bin Laden, Al-Qaeda, or Iran’s nuclear program.  In the opinion of the Naive American, all these threats could be minimized or even eliminated if we properly address the top 10 list presented in this blog.

In the next few weeks I will be posting blogs covering in more detail the threats and how they can be addressed.  Of course your comments and suggestions as well as the ones from any and all Naive Americans are always welcomed.

Yours truly;

The Naive American

I hope this letter finds you in good health and most importantly warm.  Not sure if you are still spending most (or some) of your time in the Windy City or have settled in warmer weather in anticipation to your change of address in January 2009, but here in Minneapolis, just four hundred miles west of Chicago, winter has arrived a few weeks early.

I admit I never watched any of your presidential campaign speeches, paid TV programs, radio or internet propaganda.  I did watch a few debates and read a few (okay more than a few) articles on the web.  Don’t be upset with me, I did the same for your competition which, earlier this year held their party convention in St. Paul (about twenty minutes from my home).

The purpose of this letter is to comment and suggest what Naive Americans might consider a better approach to solve the current economic crisis in the Unites States.  A few weeks ago I watched an interview of you  on 60 Minutes.  You said you read about past presidents in an attempt complement the courteous-yet-limited advice provided by the living presidents.  This Naive American applauds your intentions and was happy to hear that they chose not to share their thoughts with you.  Keep in mind that all of them were part of the problem that has dragged our country to the state it is in today.  I wish to remind you that your platform was based on CHANGE.  Trust me, we do not want more of the SAME.

This Naive American is not a political or history buff.  But as my parent would say, you need a rounded education.  I also found out that talking about computer science and electrical engineering does not get too many people excited; politics does since everyone has an opinion seldom based on logic and facts.  Apparently you have read about past presidents.  Given the state of the economy you mentioned President Franklin Delano Roosevelt (FDR).  He as you will in a few weeks had to deal with tough economic times.  I have also read a couple books about the life of FDR.  I am not too interested in the character or for that matter the actual individual.  What awakens my interest is what people do and how they accomplish it.

FDR was in office during the Great Depression.  One of the mechanisms used by FDR to provide Naive Americans with jobs was road construction.  It was in recent news that you are planning on spent billions of US Dollars in upgrading our transportation infrastructure.  It is a fact that many of our highways and bridges are in need of maintenance.  I live in the Twin Cities and a couple years ago a bridge on Interstate 35W over the Mississippi river collapsed killing and injuring several children, men and women.  America needs to take care of this issue but we need to put it in perspective.

At the time of FDR new roads were constructed with a double purpose.  First construction provided relative low paying jobs for blue-collar workers.  The point is that having a job is much better than not having one.  Back then building a mile of highway required more than three (3) times the amount of manual labor it requires today.  This implies that the number of Naive American that would benefit from such projects will be few.  I can see the hand of lobbyist for construction companies pushing for a “proven solution” (for their pockets).  Roads encourage people to drive.  I am not going to suggest that US has all the roads we will ever need, but at this point in time it appears to be enough highways which promote consumption of enormous amounts of foreign oil which in turn exacerbates the current economic problem.  Besides, people are driving less.  In conclusion, road construction / repairs benefit few and should not be considered a priority.  Another thing to consider is how is this highway / road project going to be funded and what is most important what is it going to produce sustainable revenues?  Is the plan going to be to increase taxes to pay for roads or are most highways going to be toll roads?  Chicago has many toll roads and the roads and highways are in no better shape than other parts of the country.  Not only that but most of the moneys collected in tolls are funneled for other uses (same hold true in the state of New York).  The Naive American is a little confused because highway tolls in the Chicago area (a city in your home State president elect Obama) appears to be just another tax.

Not sure about the qualifications or interests of your diverse advisors.  It appears that you are doing what is useless but “politically correct” surrounding yourself with Democrats and Republicans to justify failure.  Perhaps you have in mind four (4) terms in office and FDR?  Such approach is not CHANGE it just represents more of the SAME.

As I mentioned in this correspondence, I am a computer scientist.  In my line of work we use two (2) terms very often:  fixes and solutions.  A fix is something you do quickly to computer software to get the customer up and running.  In most cases a fix would address on a temporary base the issue at hand but may bring side effects, which might not affect the particular customer at the time.  The solution (some people believes there are many solutions to a problem, but in actuality only one is best), which typically takes a little longer to develop and test but permanently, solves the problem.  Road construction should be considered as an attempt for a fix not a solution.

Allow this Naive American to propose an actual solution.  The Federal Government should provide funds (if you wish to consider them a form of bailout) to all small, medium and large companies in need that develop and manufacture products and goods in the USA employing legal US residents and citizens.  By doing so jobs existing jobs would be maintained and new ones would be created.  Aid should be transparent in such a manner that it cannot be used to pay high salaries of executives, which the only thing they do is to contribute, to the high costs of goods.  Companies should pass a simple evaluation in order to qualify them for help.  The names and amounts should be posted on the WWW for all Naive Americans to see were the moneys are going.  All companies receiving aid should pay back the funds they receive in different periods of time.  Each period should be associated with a very small but increasing simple interest rate.

The Naive American does not wish to see the US government bail out companies that were doomed long before this recession started.  Keep in mind that the US is not able to afford huge government and wars.  By printing more Dollars we are just increasing the issues not only in the US but also in the world.  Sooner or later we will not be the leaders we are so accustomed to and the US Dollars might be replaced for a more stable currency accepted around the world.

Yours truly;

The Naive American

Banks and other financial institutions provide capital to businesses that actually work to create products/services used all over the world. If financial institutions stop lending money -fearing borrowers will not be able to repay their loans- it is obvious that production of goods of everything will be affected. Companies are forced to layoff workers. The laid off workers buy less products and services and the companies are forced to make more layoffs. The process spirals and could easily lead the US (and possibly the entire world) to a massive recession. In a nutshell our elected officials need to come up with a well though out plan that has a main approach and several alternates to quickly fall back on to assure success (perhaps I should become a politician).

While being concerned about the US financial system, which is typically represented by Wall Street with all its irregularities, immense greed, little accountability and in the minds of many Naive Americans with an ever growing touch of criminal activity, we are faced with the problems of a public company by the name of General Motors (GM).

GM is one of the three largest US automobile manufacturers. Among their products are brands like Cadillac, GMC, Hummer, and Saab. Most vehicles in the US are concentrated in metropolitan areas. The mix of cars and trucks varies by location. I happen to reside in a Minneapolis suburb. Due to car-pooling I head out of home no later that 07:00 AM and get to work between 07:30 AM and 07:45 AM. In the evenings I leave the office around 05:30 PM and arrive home shortly after 06:00 PM. I fight rush hour traffic during both commutes. Crawling through rush hour gives me the opportunity to observe vehicles on the road. After removing from the mix Asian and European models, it appears domestic makes combined account for less than half of cars, Sport Utility Vehicles (SUVs), trucks and mini-vans. After removing Chryslers and Fords from the mix it becomes obvious that the Naive American is not buying too many GM vehicles.

There are different reasons why consumers buy a vehicle. Some like the image portrayed by owning the largest, heaviest, gas-guzzler, off-road vehicle. As you may imagine this type of vehicle is quite useful if you reside in a metropolitan area were paved roads are properly maintained. Some of us go for the myriad of options and colors. In the past decade or so, the Naive American has been gravitating towards quality vehicles at an affordable price. Perhaps GM has not been offering the right product at the right price. GM wishes to portray itself as an innocent victim of the recent Wall Street fiasco. The savvy Naive American just needs to go to the Internet and use their favorite stock tracking / investing tool and display a five (5) year graph of historical values of GM stock. Perhaps GM’s current state is the result of poor management, poor marketing and poor products

When the price of gasoline was at an all-time high, GM started advertising the Chevy Volt. The Volt is an hybrid car designed to allow the American commuter to use electricity more than fossil fuel; an appealing offer. This is especially true when the advertised base price for the two-seat car was under $20,000 US Dollars. The TV commercial is gone. The main reason is that the car is just a concept vehicle and the price is closer to $40,000. This information comes directly from GM’s well-compensated CEO. By the way, GM’s stock is currently under $5.00. Main stock exchanges typically require higher prices or the company may be de listed.

A few days ago the three largest US automobile manufactures met in Washington, DC with representatives of our government. The envoys of the car manufacturers flew in for the meeting in their private jets. When was the last time the Naive American flew in a private jet? For the publicity alone, they could all have driven their American cars from Detroit. The CEOs aren’t even using their own cars, but they need our help to continue to produce.

So the big question for the Naive American is should we bail out GM? At least our “career politicians” in Washington, DC (led by Speaker of the House, Nancy Pelosi and the Senate majority leader Harry Reid) said they want to put the bailout on hold until December to allow the car manufacturer to come up with a “viable” plan. The Democrats wish to convince the Naive American that Washington is on their side by playing hard to get

Should the US (and all Naive Americans) decide to bail out GM? Naive Americans believe our elected “career politicians” will come up with the proper answer to address the state of GM. Keep in mind, that these elected officials lack accountability and generally rely on popularity/good looks to get elected. Additionally, lobbyists (esp. those representing car manufactures, oil companies, and union autoworkers) will have more to say about the final approach than the Naive American.

GM, the other car manufacturers, oil companies, and for that matter any other business in the US should be treated the same. One of the myths the Naive American has been led to believe is that capitalism always triumphs and the USA is the bastion for it. The US government, however, provides subsidies in the form of aid and help to several countries, industries and special groups.

In conclusion, when a business is no longer viable it should cease operations. This is capitalism, correct? The Naive American can bail out GM by purchasing their products. If the Naive American wants to purchase Chrysler and Ford and not GM so be it. If the Naive American wants to purchase Asian or European vehicles instead of Chrysler, GM or Ford so be it.

What the US government needs to do is understand the real reasons that led to the current state of GM. If it was greedy management, poor designs, low quality, union autoworkers, high costs and lack of accountability (to name a few) then let GM disappear. Chrysler and Ford will need to change their business or follow in the footsteps of other poorly managed companies.