Archive for February 5th, 2009

President Obama, continues to attempt to make his case for an economic stimulus package to both Congress and the American Public by warning of rougher seas ahead in the current economic storm. The economic stimulus bill passed by the house is under attack, by Republicans in the Senate over concern that it is a typical Democrat entitlement bill as opposed to a temporary spending package.

Obama in an example of  inexperience and naivete, ceded responsibility for drafting the economic package to Nancy Pelosi, Speaker of the House who proceeded to fill the bill with an array of Democrat favored spending programs. Ceo4aday believes the nation and the President would have been better served had he convened a bipartisan conference, of senior leaders in Congress to shape the bill and avoid the partisan rhetoric when one party has drafted the legislation.

We can ill afford the political two stepping that is currently taking place in Washington over the stimulus package, nor can this President afford to waste political capital by so quickly having appeared to succumbed to the whims of Nancy Pelosi and Harry Reid. It is time to act and provide a stimulus package that will assure an economic turnaround. Our plan for an economic stimulus follows:

  1.  Issue a merchandise voucher of $2,500. to every taxpayer in America. Vouchers are redeemable as currency for all purchases and must be spent within 180 days of issuance .
  2. Provide a 10% tax  credit for all home purchases through the end of 2009.
  3. Guarantee 4% mortgage rates on all conventional and jumbo mortgages on home purchases through 2010.
  4. Create United States Office of Entrepreneurship with $25 Billion capitalization to provide venture funds for qualified American entrepreneurs.
  5. Make the Bush Tax Cuts Permanent And Lower Corporate Income Taxes To 20%.       

An economic stimulus package is certain to be passed. The emphasis for any package should be to restore value to our housing market, create jobs and restore confidence in our markets. By placing merchandise vouchers in the hands of consumers the economy will get a $240 Billion of stimulus spending within a six month period. Our proposal for housing will restore confidence in the housing market.Our other proposals will assure risk taking and investment by American business. We need to make America work again and urge Congress and the President step up prudent action and limit unproductive political rhetoric.

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With the Obama administration fighting to keep a stimulus package afloat in Congress, despite waning support by the public and a vigorous debate in the Senate, the President offered a populist carrot to the masses by imposing a salary cap on those companies that elect to partake of bailout or TARP funds in the future. No doubt the expectation by the Obama administration will be that this measure will provide additional cover as they attempt to push through a rapidly evolving economic stimulus plan. 

The measure will have no effect on those executives at institutions that have already received funds as they are exempt from the measure. These are extraordinary times though and ceo4aday would expect that the visibility that executives of TARP affected funds receive during this crisis, will prevent them from executing a compensation plan that is inconsistent with the Obama administration’s wishes.

The very fact, that executive compensation will be limited, by federal regulation, in formerly free standing corporate entities, in the nation that has promoted the free enterprise system, since its birth, is alarming. The free enterprise engine has been fueled by entrepreneurship and innovation. It has prospered because of the ability of businesses and business leaders to be able to adapt to changing market conditions and because of the promise of wealth creation.

There have always been perceived abuses in the system, where executives have been deemed to have received excessive compensation. We often marvel at the level of excess reported, but as a nation, we are not disposed to imposing limits on such compensation, just as we would not want to impose limits on individual aspirations.

The fact that we are doing so now, may prove in time to be a transformational event in American business, as the class war, supported by the President and many members of the Democrat party, progresses and realigns our economic system, in favor of federal intervention and  bureaucratic solutions.

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