Advice to President Obama

Dear President Obama:

I want to first applaud you for some of the wonderful gestures made by you such as setting a timetable for troop withdrawal from Iraq, stopping DEA raids on medical marijuana dispensaries, and plans to sign the UN declaration on decriminalizing homosexuality.

However, there a few HUGE mistakes being made and I hope that whoever receives this message will make sure that you read it.

1. Buying toxic assets - The overwhelming majority of US citizens do NOT want their money spent on buying the bundles of defaulted mortgages, credit card, student, car and other loans that make up these "securities" which in and of itself is a misnomer. These loans are NOT assets (another misnomer), they are WORTHLESS. Banks must take their losses for these items instead of being re-capitalized with more citizen debt that will never be paid back to us. Toxic assets will ALWAYS remain toxic because the original borrowers are unable to pay back their debt, especially in this current economic climate. This plan was misguided when former Secretary Paulson suggested it and it remains so under Secretary Geithner for the above-mentioned reasons.

2. Recovery.gov Major Shortcomings - While I can appreciate you wanting to provide transparency and accountability through this website, the reporting guidelines contain the same type of hidden time bomb loophole as the Economic Recovery Act bill itself in regards to executive compensation. President Obama, you have said that the Recovery.gov website will show where EVERY dollar goes and the effect it has in recovery. Unfortunately, this will not occur due not only to the sheer volume of reports to be entered on the website but because there are NO reporting requirements for three-fifths of funding recipients. In the OMB Initial Implementation Guidance Memo M-9-10 dated 2/18/09, issued by Director Peter Orszag, Section 2.9, Page 14 it states:

The Recovery Act and this guidance require extensive reporting from recipients of Federal funding. The Recovery Act defines "recipient" as any entity that receives Recovery Act funds directly from the Federal Government (including Recovery Act funds received through grant, loan, or contract) other than an individual and includes a State that receives Recovery Act funds. See Section 1512 of the Recovery Act.
These requirements apply to:

Prime recipients. Reporting requirements only apply to the prime non-Federal recipients of Federal funding, and the subawards (i.e., subgrants, subcontracts, etc.) made by these prime recipients. They do not require each subsequent subrecipient to also report. For instance, a grant could be given from the Federal government to State A, which then gives a subgrant to City B (within State A), which hires a contractor to construct a bridge, which then hires a subcontractor to supply the concrete. In this case, State A is the prime recipient, and would be required to report the subgrant to City B. However, City B does not have any specific reporting obligations, nor does the contractor or subcontractor for the purposes of reporting for the Recovery.gov website. All recipients of Federal funds must continue to comply with existing agency and program reporting requirements.

Only recipients receiving awards funded through discretionary appropriations. These reporting requirements only apply to non-Federal recipients who receive funding provided through discretionary appropriations. The reporting requirements do not apply to funding received through entitlement or other mandatory programs, except as specifically required by OMB.

This is not transparency or accountability. You might want to check Mr. Orszag's reasoning for including this clause that is in direct contradiction to what you have told the American people.

3. Outlaw Credit Default Swaps (CDS) - There are many people who will tell you that there needs to be regulation on these fraudulent instruments when the truth of the matter is that they should be abolished. Their very nature creates false wealth (I was so happy to hear you mention "paper money" on Jay Leno though the brain-dead media didn't pick up on it!) from betting for or against assets/loans in which the holder of the CDS has no actual ownership. To make matters worse, most of the world is dealing in these instruments which have been given legitimacy since 1985 through the International Swaps and Derivatives Association. There are 820 financial institutions and 56 countries who are members of this organization that is supposed to regulate the CDS market. Why is no one tapping them for advice or closure?

President Obama, I know the difficult position in which you find yourself is the most challenging situation of your life thus far. I want to offer my spiritual support and advice. There are men and women around you caught up in self-interest and who will betray you while smiling in your face. Keep your counsel with the light I see in you for good karma.