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Rob Kall Headshot

Mr. Obama, Start Walking Your Bottom Up Talk

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President Obama cites his bottom up intentions and promises all the time, almost every day. Yesterday, he said, when he was admitting he screwed up, with Daschle, "Ultimately, I campaigned on changing Washington and bottom up politics."

But his gazillion dollar bailout plan is not even close to bottom up. He threw a third of the money away on tax breaks, hoping to assuage the Republicans. It didn't work. But I don't call tax breaks a bottom up solution. Sure it gets some more money to people, but it really doesn't funnel or distribute money. It lets you get away with not paying money.

Bottom up approaches work because they do something different than usual, or because they support bottom up community, cooperation, sharing and community.

I had a chance, at a recent conference, to talk with a dozen of the current crop of US democratic senators. These are the good guys -- liberal, socially conscious, well intentioned -- but I don't think they get bottom up. They talk about providing funds for jobs as being bottom up. But the way those funds are being provided-- in a very top-down way, to states, to governors -- there is so much opportunity for the top to prevent the funds from trickling down.

The talk is that three quarters of the fund will be expended within 18 months. If we have that much time we ought to work through some really smart, creative, out of the box ways to spend the trillion dollars, or whatever it turns out to be in ways that maximize the bottom up aspects.

We saw what happened when Hank Paulson used a totally top down approach, doling out the $350 billion in tens of billion dollar dollops. A bottom up approach would have meant creating a system that distributed the money in hundreds or thousands of dollars, to individuals.

Unemployment overall may be at 7% using the newer calculations that Clinton instituted, but throw in the people who have given up looking and the numbers are in the double digits. And look at specific groups, like blacks, Latinos or young people under 25 and things are much worse. They will also be the last ones to benefit from the infrastructure spending that Obama and the members of congress like to talk about. And how much will tax breaks help the unemployed?

I keep thinking we need to do what the government did during world war two and issue coupon books. People will have an opportunity to borrow money from banks. The banks will get the money as people use the money. I know one company with a great product line and orders. They can't get financing to create more product. They're going out of business. Maybe if the recovery plan included small business coupons, where people could show how they could use the money and have their loans guaranteed, and they could go to the bank of their choice with a government economic recovery "voucher" they could salvage their business. An awful lot of small businesses are hurting because they are having trouble collecting receivables. That's not very different than mortgage holders. Why should giant companies in the money business having trouble with receivables be treated better than small businesses with receivables.

I have a friend who's been in the jewelry business for 40 years, since he was a teen working for his father. Being a jeweler today is a dead end job. He survives by buying gold from people who are selling their heirlooms. He needs to change direction and that's a tough thing to do. He's smart, skilled and incredibly trustworthy and reliable, but scared sh*tless about changing from what he's been doing for so many years. There should be a big budget, scholarships and counseling, for helping people like him deal with the changes and figure out what else to do. I keep telling him, when he tells me he's too old to do something new that the first thing he needs to do is have the intention -- that it will all flow from there. A bottom up approach to healing this economic crisis will help the millions whose jobs are gone or dying to develop the intention to develop new options. And a bottom up approach to the crisis will make those options exist. Building bridges and roads won't do it. That may help 25 year-olds who can take lower paying construction jobs, but not unemployed or out of business jewelers, entrepreneurs and stock brokers over 45 or 55 or 65 -- who lost their life savings when their 401ks, if they even had them, collapsed.

Obama was talking about a buy American program until the European union threatened to retaliate and, apparently, he backed off. Our world trade deals suck. They were signed to make a handful of transnational companies happy and they have already destroyed too many of our home grown industries. The economists who keep flogging the simple minded globalization policies we've been embracing are the same ones who brought us to the economic black hole we're in the middle of being sucked into. Don't listen to them. Ignore Europe. They will do the same. We all have to do what we can for our industries. Cut a deal so they can help their industries without punishing us and we'll help our industries without punishing them. No living creature can survive without a skin and global trade deals like WTO, NAFTA, CAFTA, etc. are all deals that flay a nation's economic skin. We need smarter deals that allow open trade with some protections. Nature does this with membranes. We need a membrane global trade model. Meanwhile, withdraw from all our foreign trade deals -- WTO, NAFTA, etc. -- or put them on hold. We need to be able to use all our resources to save our nation's jobs.

If you're going to give billions to auto manufacturers, use a bottom up approach that gives the manufacturers access to billions that consumers can use to buy new, fuel-efficient cars and to trade in, for extra bonuses, old gas-guzzlers. But don't hand the money to the manufacturers. Require them to sell cars with consumers all getting coupons, for, say, $10,000 to buy a car and $5,000 to sell their gas-guzzler. Then, loan the banks money to finance the difference. Take an equity position in the companies. With that kind of selling program, they ought to be able to move a few million cars. Every citizen should get a coupon. They could even be traded. That will get money into the auto companies and into people's hands. If people don't want to buy cars, they can get a different kind of coupon when they discount sell their coupon to someone who wants a bigger car, which can be used to buy something else that's made in America.

The one thing we don't want to do is put out money that people can use to buy Chinese made goods at Walmart -- unless the Chinese offer a discount or kick in somehow. That could work. They have a stake in getting the American economy back up and running. It bothers me that currently, they are benefiting as Walmart is one of the few remaining profitable companies. Why? Because they use China's almost-slave wage labor to source products.

Here's a bottom up approach that will produce jobs -- offer to pay the salary and health benefits for new hires by small businesses. Better yet, start paying the health benefits of employees of small businesses that don't provide health care AND pay the salaries and provide health care, even if it's medicare, for new hires. I'd hire some for my two businesses.

Here's another bottom up approach. Take a look at the businesses that are in big trouble and see why. It is time for some of them to die. Circuit City, other big box stores, mall stores, print newspapers -- they are going to disappear anyway. Help the newly emerging businesses that are replacing them -- web stores, bloggers, online media sites. The world is changing and as we descend into the black hole of this economic crisis, we need to stretch the envelope, find new ways and smarter ways, innovative new approaches that will save us. Stupid, short-sighted economic experiments with derivatives and the like got us here. Smart, creative innovations will get us out -- if we do it bottom up.

The bottom line of bottom up is to put the money, in smaller amounts, through individuals and small businesses, not through top-down systems -- like governors and states or megacorporations. Trust he wisdom of the crowd to invest that money in the companies that deserve to survive and let some of the big companies die if they can't figure out how to attract the crowd.

Get smart with putting restrictions on how all the money is spent. Don't allow big expenditures -- to buy more companies, making more, bigger companies that are too big to fail. Don't allow grand parties or crazy ad campaigns. Even figure out how to get money to people by putting ads on their new cars or new solar panels on their houses.

We are not going to quickly get over this global economic crisis by doing what we've done before. We are absolutely not going to recover by depending upon a few eggheads, like the economists who got us into this. We really must trust the wisdom of the crowds to find the best solutions and the only way to do that is with truly bottom up solutions that funnel most of the money to the people -- and not through tax breaks which allow the money to be spent on anything. We need to channel the money in smart ways by using coupons and credit systems. If it works for ATT, giving out credit cards with money electronically recorded in them, maybe the same can be done for the bailout. I don't have the detailed answers. But they won't be hard to come up with. The first step in the bailout should be to get all of the people in the world submitting ideas and suggestions on new ways to use the hundreds of billions or trillions we'll be spending. How dare a few hundred members of congress and Summers, Geithner, et. al, think they are smart enough to solve the problem they created in the first place.

The solutions and the distribution of the money should be bottom up. Maybe, before the vote, the congress and your staff ought to have some training on just what bottom up is really all about, because it's clear so far that most just don't get it and you've forgotten it, except for the words. And President Obama, it's time for you to start walking your bottom up talk.

Crossposted from OpEdNews.com