Wuzzardo Plan will fix economy

It’s been a couple of weeks since Election Day, and I’m just now getting around to writing another blog. Part of it is that I needed a break from politics, not to mention a few extra naps. But it’s also been because I’ve been waiting to see how things began to shake out in the transition from George W. Bush to Barack Obama. So far so good, I guess, except for one thing: Barack Obama’s noticeable absence from this weekend’s economic summit in Washington.

Look, I understand he doesn’t want to step on anyone’s toes or confuse the issue of leadership, and that’s admirable. But President-elect Obama also has to realize that the American people elected him because they wanted the change he promised. And even though he’s not president yet, that change needs to start as soon as possible, and he needs to be involved in major things like solving this economic crisis, even if only as a quiet spectator or to be there just to meet the leaders he will work with the next several year. I’ll bet anything if John McCain had won, he would’ve been there. I do NOT mean that as a criticism of Obama, rather a criticism of American politics in general. In a time of needed cooperation, we let partisanship get in the way of even this most important of fights to fix our financial systems. Even as Mr. Obama said he did not want to be part of the summit, President Bush and the other world leaders who attended should have insisted that Mr. Obama be there. Imagine the spirit of cooperation it would have created if George W. Bush and Barack Obama had met fellow leaders with a united sense of urgency.

Alas, that did not happen. Instead a lame-duck president hosted a meeting to discuss ideas he won’t be around to implement while the man who is the elected leader charged with cleaning up this massive dumpster fire was at home in Chicago. I mark that a failure by all parties at all levels. So I will stand up and offer some help. Here, my fellow Americans, is the Wuzzardo Plan for Economic Rescue:

Mortgage Crisis: The federal government has already pledged to bail out financial institutions that recklessly and stupidly tried to cash in on sub-prime mortgages. Of course, we no longer know how that will work after Treasury Secretary Henry Paulson decided the original plan to buy up bad mortgages won’t work. The solution, though, is simple: All mortgages on primary residences in place as of October 1 will be refinanced to a maximum, fixed interest rate of 6.5 percent. Period. No questions. This is a reasonable rate that is slightly above the current market rate. That means that anyone truly qualified to own a home should be able to afford this. What about those who can’t? Sorry. Despite what Congress tried to sell us on a few years ago, there is no right to owning a home. Some people have to rent. I did until I married a homeowner. There is no shame.

This 6.5 percent maximum rate is designed to give people caught in those adjustable rate mortgages (which will now be illegal, as will credit-default swaps) certainty on home costs. It will surely be better than what they were paying, especially if they were headed for foreclosure. The banks will also benefit on a couple of levels. First of all, they’ll have people paying for their homes instead of just having to give them up at auction or have them sit empty generating no revenue for the banks. Secondly, with the rate above market, it will help give the banks some capital to help defrost the credit market, which is the real problem right now. And if you’re one of the vast majority of people who make their mortgage payment on time each month, you may benefit, too. If your mortgage rate is currently higher than 6.5 percent, it will be lowered to that threshold immediately. If your rate was lower, well, not all of us can win all the time. Just be thankful for the greater good.

Executive Compensation: Golden parachutes will cease to exist in their current form. Instead, the heads of companies that accept government assistance will be paid like most of the rest of us: based on performance. That means if your company does well, you may be eligible for a bonus. But if the company’s stock price, dividend or net value drop, or if you have to implement staff cuts larger than seven percent of your workforce under your leadership, you won’t be paid extra. Regulations to force these standard on all investment banks, other financial institutions, oil companies and other industries that disproportionately affect the global economy will also be strongly considered.

Auto Industry Bailout: You want money, Detroit? Fine. But we’re gonna dictate a few things you and only you have failed to figure out on your own for at least 30 years now as the rest of scratched our heads in dumfounding amazement. Let’s start with fuel efficiency. Each and every passenger vehicle, from compact cars to luxury SUVS, off the assembly line in the model year 2012 will get at least 40 miles per gallon. By the year 2020, at least 33 percent of your passenger vehicles must use an alternative fuel source that does not include petroleum. The percentage grows to 65 percent by 2030 and 100 percent by 2040. To help with this, five percent of the revenues for each company accepting the government bailout will be placed in a national trust to fund alternative fuel research at colleges and universities around the country. Oh, and the money we loan you will be repaid in full by 2025 with credit given for the money that goes to the research trust fund. If the loans are not paid off by 2025, the federal government will take a controlling stake in your company and immediately begin selling off assets.

I considered implementing price controls, but that’s too much for a free market. So charge what you want, but realize that if you start charging more for these fuel-efficient vehicles, companies like Toyota, Nissan and BMW will continue to kick the crap out of you in the market. And there will be no second bailout.

Food Prices: Boy, making fuel out of corn sounded like a good idea five or ten years ago, huh? Then we started doing it and realized just about everything we eat and drink has corn in it. The growing demand meant a shrinking supply, and that meant increased costs for just about everything. So, no more using food crops as fuel and no more government subsidies for growing non-food crops for fuel. Why? Because those fuel crops start taking farm space usually reserved for food crops, which then creates the same supply and demand problem that drives up costs. Plus, a lot of agrifuels prove not to be very efficient and do little to reduce our carbon footprint. Instead, we need to focus on hydrogen, nuclear, wind, solar and other forms of renewable energy, including recycling things like used vegetable oil and other byproducts and garbage, that won’t adversely effect other markets. What about states like Iowa that rely on those corn subsidies? Guess where a big chunk of change from the National Alternative Fuel Research Trust Fund (explained above) is gonna wind up. I can see it now: The Alternative Fuel Research and Development Center at the University of Iowa.

Those are just a few idea by someone who does not have a degree in economics. I think it proves that it does not always take a Nobel laureate to come up with common sense ideas. I’m sure someone will attack my ideas, and that’s fine. It’s an open discourse that we need, but we need it quickly. So what do you think? Do you have any ideas you think would help? Do you love or hate my ideas? Post a comment and share your thoughts.