Finance

Trickle down economics. A theory, of course, but its called exactly what it is – a trickle for most Americans.

Jim Hightower describes it as tinkle-down economics and though the visual might be objectionable, the essence is right on target.

Supporters of trickle down fondly remember the Reagan era (any administration would be fondly remembered at this point) but tricklers, like Larry Kudlow, can quote statistics. Well, there are lies, damn lies, and statistics. Many of us remember how hard the Reagan era was – its just true.

But trickle down’s time is now. Support banking; support Fannie, Freddie and foreclosure for millions of Americans. Support business and finance and eventually the “trickle” will get there – it’s a theory that has never trickled and never will.

As we see low interest loans and bailouts for banking and finance, we get empty words from the Paulsen/Bernanke road show. Don’t lose hope, we know what we need:

1. A moratorium on foreclosures.
2. Regulation to stop speculation in the in the oil futures markets.

Read the Sunday NY Times article about Fannie Mae and Freddie Mac, the influence they wield with Wall Street, how entrenched they are in our political machinery whose denizens continue to give them every thing they need. Freddie and Fannie own or guarantee half of our $12 trillion in mortgage debt, and now they’ve got us in big trouble.

I watched a seemingly tranquilized Jim Cramer trying to calm the markets; I couldn’t bear watching his American Dream special – mad money indeed.

An important letter went out from the Chief Executives of the major airlines to their frequent fliers about the impact of this outrageous oil speculation. A barrel of oil can be sold as many as 20 times prior to being taken for delivery. There may be $60 in the current cost of a barrel of oil due to nothing more than speculation.

Go to my website www.MarcSussman.com, we’ll be putting up the letter. If you want action, you have to take action. The airlines are asking for your help. They’re fighting for their lives, and so are we. It’s MarcSussman.com; help stop oil speculation – It’s an action you can take.

Solar power has taken a hit to the solar plexus.

The Federal Gov’t’s Bureau of Land Management, has placed a moratorium on solar projects on public land – until the environmental impact of these projects has been determined. This may take the better part of 2 years. Yesterday crude oil closed at almost $144 a barrel.

The Bureau of Land Management controls some of our greatest solar energy potential, in Arizona, Nevada, and Southern California. And while oil and gas development continues, nuclear expansion is proposed, aging coal-fired power remains in operation, renewable clean solar power is delayed in the name of environmental protection.

You’ve got to give them credit. It’s a brilliant strategy. How can clean energy advocates argue against environmental impact studies? They can’t. But not two years. We don’t have 2 years. Climate change, our strangled economy can’t wait two years.

The tragedy is that we’re responding. Solar project applications increased by 48% in 2007. 130 new projects are proposed, that would power 20 million homes.

But without access to public land, expenses will kill new projects. And if solar tax credits are allowed to expire the end of this year, energy independence may die with it.

So that’s it. Independence. We celebrate this Independence Day with a message. I know its not environmentally responsible, but maybe we dump coal in Boston Harbor. I’m open to suggestions. But we need to do something. Because we’re not only fighting for energy freedom… we’re fighting for our lives.

Repo Ahoy, Matey!

There are some jobs that must be tough on the old self-image.

Lately, I’ve had a hard time with the army of meter maids spreading joy on every street corner in New York. Its an alternative congestion pricing plan. There are other more objectionable lines of work, of course. There’s always the bails bondmen, ropin’ em up, and bringin’ em. But now, more prevalent than ever, is the repo man.

These days its not only the family car that we’re seeing hauled away in the wee hours, for non-payment. Its another casualty of the
free-wheeling lending spirit that is now a faded memory. Its our “Jersey Girl”, or “Aquaholic”, or “A Wave from it All”. Aye, captain. It’s the family boat.

The refinancing craze drove the recreational boating industry, and we saw a 40% rise in luxury cruisers, miniyachts and sailboats from 2000 – 2006. The average loan tripled to $141,000. Now, these “Chickens of the Sea” have come home to roost. Home equity has fallen off a cliff, boat sales with it. Gas prices pour fuel on the fire. Boats make Hummers look energy efficient.

And so these are the salad days for the repo men. Economic downturns always are, but this one especially. The leverage was unlike anything ever seen. Repo operators have expanded, some have grown to double or triple in size. I can’t wait until the boat
foreclosure ads start hitting late night TV.

The stories offer tragic human interest, riveting reality TV content for those of us who relate. Misery loves company, ya know. Some of the fools among us learn the hard way. Some repo men have actually repossessed the same boat, from the same owner, 3-4 times.

Thank you to Larry Kudlow for straightening us out.  

He’s finally gotten to the bottom of it, establishing the source of our economic instability. We were mistaken, when we thought it might be,  

    * oil at $125 a barrel, gas prices rising to over $4 a gallon;
    * a plummeting dollar;
    * food prices skyrocketing, worldwide starvation, riots;
    * 12 billion dollars a week spent on a War that no one wants;
    * a U.S. economy kept afloat by foreign investors, our distressed corporate and financial assets purchased by anonymous sovereign wealth funds;
    * actions of the Treasury/Fed/Investment Banking systematically destroy trillions in economic value;
    * foreclosures at record levels, housing market continues to contract…

Sure, 80% of Americans have lower relative household income than they did in 1973, but those folks are not Larry’s cup of tea. He’s a market guy.

Larry knows the real source of our dilemma. You see, he was an advisor to Ronald Reagan. He is the staunch supply-sider, the resident expert on tinkle - down economic theory. He knows our real problem is the mere possibility, the mere spectre of….

….Barack Obama.  

Larry describes the Obama administration’s enormous tax increases, bloated social programs, no-growth economy. But there’s a problem, Larry…we remember election rhetoric. We remember, “read my lips, no more new taxes.”    

So, thanks anyway, Larry. You serve an important purpose for us - clarity. When we want to identify the problem, we look to you.  

Thanks for the 411, Larry.

It becomes apparent as the green revolution evolves, that we have to be careful who we listen to.

The Motley Fool, the stockpicker / online blogger, is running a green investing series in advance of Earth Day on April 22. The MF perspective re: green investing focuses on long-term shareholder value, but so be it. Pretty one-dimensional, but we get a habitable planet in the process.

The companies that Motley Fool highlights boggle the noodle, though. Some of these companies, held up as progressive, have a checkered eco-past, some have troubling human rights records.

The Motley Fool articles applaud Coca-Cola (NYSE: KO) and its recycling campaigns, General Electric's (NYSE: GE) Ecomagination cornerstones, and Disney's (NYSE: DIS) environmental policies.

But Coke has a history of international anti-union activities including murders of union officials in Colombia; see www.killercoke.com or this Businessweek article