The Brian Gongol Show can be heard on WHO Radio in Des Moines, Iowa on 1040 AM or streaming online at WHORadio.com. The show airs from 2:00 pm to 4:00 pm Central Time on Saturday afternoons. Podcasts of show highlights are also available.
Take a listen to this week's podcast.
Congress will be working on the fate of the proposed bailout package tomorrow, deciding whether $700 billion in taxpayer dollars will be used to finance buyouts and loans to troubled companies. It's a huge proposal, and we simply haven't had time to even read it all. But there are some takeaway observations we can share:
- We shouldn't believe most promises that more regulation will solve the problem. The FBI is already investigating Fannie Mae, Freddie Mac, AIG, and Lehman Brothers. If laws were broken, people should go to jail. But it's not likely that the same government that's gotten us into a $9.8 trillion debt is going to be any good at getting business to run better.
- We should also be wary of over-regulation in response to the current situation, since that might just encourage flight to stock markets in Shanghai and Moscow, where the rule of law isn't nearly strong enough. We need just enough regulation to ensure the rule of law -- but no more than that.
- We have to start looking out for our own interests, rather than assuming that someone else will always be there to take care of us. Mutual-fund managers, corporate boards of directors, Federal regulators, Congress, and the Executive Branch have all dropped the ball in a big way...and all of them were invested in one way or another with watching out for the American public. If we think CEOs are over-compensated, we need to vote against their compensation packages and fire the boards of directors who hand those checks over. If we think Congress can't get its act together about our national spending priorities, we need to fire them and bring in new legislators. If we think that our mutual funds are encouraging businesses to behave irresponsibly, we should write and complain and maybe take our money elsewhere. If we think that a $9.8 trillion debt is completely irresponsible, then we should tell the Presidential candidates "Thanks, but no thanks" on their tax-cut promises and their new-spending promises.
- Every step that happens from here on out is going to make things more expensive. As the government borrows in order to fund the bailout, it's going to have to pay higher interest rates. We told you in January that the Federal credit rating was already on track to be downgraded. A lower credit rating means an even higher interest rate.
Business Week says that West Des Moines could be hit unusually hard by the financial troubles. That may or may not be true -- many of the metro area's financial companies are relatively conservative -- but it does call into question whether it was a smart idea for local officials to offer economic-development incentives to some of the companies that have shown up. We've talked about the trouble with economic-development incentive packages since at least 2006.
Checking in on our Future Scale, Chrysler has announced that it'll have an electric car for sale by 2010. That makes three companies -- GM and Toyota have promised to make plug-in electric cars by 2010.
An Iowan who is working on ways to feed astronauts on a long mission to Mars could very well end up saving a lot of lives here on Earth. One of our biggest challenges is getting food quickly and easily to people who need it. Some science and a little entrepreneurial initiative could make good things happen.
Keywords in this show: astronauts • automakers • bailouts • Chrysler • credit ratings • economic-development incentives • economics • electric cars • executive compensation • Fannie Mae • FBI • Federal debt • food • Freddie Mac • future • General Motors • inflation • Mars • mutual funds • regulation • science • tax cuts • taxes • Toyota • West Des Moines