Warning to President-Elect Barack Obama from a Convicted Felon: Beware of the Bait and Switch

President-Elect Barack Obama’s plans to jump start the economy by quickly providing "badly needed stimulus" through massive government spending. As the criminal CFO of Crazy Eddie, the most gullible victims of my crimes were those investors who ran to invest huge sums of money without careful due diligence on where their money was going and how it was used. It seems that the future Obama administration may end up following the same path of my countless victims – quick and ultimately wasteful spending because of little or no due diligence.

Obama’s upcoming inauguration is expected to cost over $150 million or more than triple the $42 million amount spent on President George W. Bush’s 2005 inauguration. That is quite an expensive wedding, especially during a recession.

As our next President, Obama's honeymoon plans are even more extravagant than the wedding. During his first one hundred days in office, President Obama plans to introduce legislation to quickly spend almost $1 trillion to jump-start the economy. We are told that such a quick and massive infusion of funds is necessary to avoid a possible economic meltdown.

Local governments and special interest groups are lining up with wish lists for pet projects from the future Obama administration aka Santa Clause. It reminds me of Crazy Eddie’s famous “Christmas in August Blow-out Blitz."

In the case of Crazy Eddie, consumers were baited by our “lowest price guaranteed” advertising and flocked to our stores only to be switched by our highly skilled sales people to high profit merchandise that saved them no money and provided them little value. However, this time it will be the local governments and special interest groups looking to bait and switch the federal government.

Local governments and special interest groups will bait the federal government with sales pitches of combating poverty, reducing unemployment, green technologies, and fixing crumbling infrastructure and instead use such funds to subsidize wasteful spending projects and line the pockets of their constituents. After all, the Bush administration has already subsidized bad, irresponsible, and in some cases criminal behavior by lenders, investors, and borrowers with its $700 billion “Troubled Assets Relief Program,” also known as “TARP.”

The Obama campaign spent $740.6 million to capture the presidency, or almost $100 million more than all of the candidates combined just four years ago. They may consider it money well spent, since they won the election.

However, a drunken businessman may consider throwing down wads of cash to a hooker that tells him, “me love you long time” money well spent, too. That is, until he wakes up with a hangover, an empty wallet, and his clothing and underwear missing.

Like drunken businessmen throwing money at hookers, the future Obama administration seems ready and eager to throw money at anyone that can talk the talk and dance the dance. When the baiting and switching is all said and done, will the taxpayers be left with any clothes to wear?

To be continued....

Written by:

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

Other Advice to Barack Obama:

Advice to President-Elect Barack Obama about Combating White Collar Crime From a Convicted Felon

Disclosure:

I am a registered Democrat in New York. Convicted felons have the right to vote in New York (but they don't serve on juries, which I don't mind). I have voted for both Democrats and Republicans and have written about questionable behavior by Democrats and Republicans.

A Crisis of Confidence: Some Small Steps We Can Take Now

The main pillar of our capitalist economic system is the integrity of financial information. When the markets loose faith in the integrity of financial information, the collective market capitalizations of all companies suffer. Today, we a suffering a loss of faith and confidence in the integrity of the financial information reported by public companies and the result has been a downward spiral in stock prices and a tightening of credit that threatens to destroy our economy.

There are some small steps we can do now to restore faith in our markets and get our economy back on track.

Continuity: We immediately need a new Treasury Secretary that both Democrats and Republicans can agree on now, to provide continuity no matter who wins the November election. That means that President George Bush, Democratic Party candidate Barack Obama, Republican Party candidate John McCain, Speaker of the U.S. House of Representatives Nancy Pelosi, and other leaders should stop their silly posturing and get together right now to select a mutually agreeable Treasury Secretary for the long haul to get us out of this mess.

Capital Formation: The government should declare a capital gains holiday for all new investments made during the next six months and held for at least three years. A capital gains holiday will result in a major infusion of badly needed capital and bolster our economy. It will reward risk taking during our uncertain times.

Bankruptcy Laws: Bankruptcy laws should be amended to allow financially responsible homeowners to regain their financial footing. Subject to certain guidelines, they should be permitted to make reduced payments on their mortgages and the amount of any reduction in payments can be added to their principal balances to be repaid over time.

I believe that the above steps will be better than the ill conceived $700 billion plus bail out plan offered. The current bail out plan should be scrapped. America requires a Sarbanes-Oxley II to enhance corporate financial disclosures, controls, and governance. For additional information about Sarbanes-Oxley, start here.

Blog Update

The Stupid Nation Blog adds:

Our allegedly "conservative" led government seems hell bent for leather to nationalize the U.S. economy, and in significant measure, dismantle capitalism (whether temporarily or permanently remains to be seen).

Later, the blog goes on to say:

We need calm, deliberate, thoughtful Congressional action consistent with capitalist principles to help right the markets. Throwing capitalism out with the rest of the bad debt trash is not the answer. The world is littered with failed socialist states, and the graveyards of Europe and Asia are chock full of the victims of socialism and it's hideous derivatives. Some deregulation may have played a part in this confluence of horrid events, but we maintain that it was big liberal government meddling in the mortgage market which is the epicenter of this calamity. Without disastrous Government intervention, the sub-prime market would never have been able to become the monster that swallowed the world.

I agree and the Stupid Nation Blog is recommended reading for every concerned voter looking for a well analyzed and informative view of events.

More to come in future blog posts.

To be continued....

Written by:

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

Disclosure: No preference in the election at this time. Just disgusted with the lack of leadership from both political parties and the pandering that is going on.