The era of cheap imports is over

Frank Sinatra, in his comeback album in the early 1970s, sang "What is America to me?" a patriotic reading of everything that was great about America at a time when the U.S. was at the pinnacle of its military power and just before the Japanese became big enough to pose a credible challenge.

We don't have another Frank Sinatra to sing what must be an obvious sequel to that song: What is America to me on Labor Day 2010? Or, more specifically, "Quo vadis, American laborers?"

No doubt, the songwriter probably would extol the virtues of American labor, but while Sinatra clearly believed every single word he uttered in his 1970s song, the songwriter would be hard-pressed to craft together inspirational words that he himself could believe in.

What is American Labor to all of us? What are its strengths, if it has any left, and what are its weaknesses, decidedly many more than its strengths?

Until recently, why couldn't we build cars as well as the Japanese and Germans? Why do American-made cars break down after four, six or eight years while Japanese cars just keep on ticking, like the Eveready bunny?

Why have the leaders of industry abandoned American labor in favor of Chinese, Indian, Japanese, Korean, Taiwanese and other Asian laborers?

No doubt, the biggest reason for the exodus of jobs from America is the cheap labor elsewhere. The Chinese will work ten-hour days for $5 to $7 per day. The Indians for just a little bit more. Every Chinese factory, though outwardly modern with all the modern equipment, bells and whistles, is on close analysis a sweatshop.

Chinese laborers are so depressed about their lot in life, even as they see Shanghai's skyline rise inexorably to the heavens many of them end up depressed, needing therapy, which of course is unaffordable to most of them. This has led to numerous suicides.

There was a time, in America's inglorious past, when it was the U.S. that had a clear advantage over its European rivals. We had slaves whom we did not have to pay a dime to work our farms and our mills, who worked twelve hour days in construction projects, such as the construction of the White House on Pennsylvania Avenue in Washington, D.C. for peanuts, three square and a roof over their heads.

A book by Harriet Beecher Stowe, "Uncle Tom's Cabin," chronicled the lives of slaves in America and convulsed American society and was partly responsible for the Civil War.

Earlier, during the age of the Romantics in Europe, Charles Dickens' A Tale of Two Cities put the magnifying glass on the misery of the poor, the oppressed, the exploited workers in France. The book was an indictment on the Industrial Revolution and the exploitation of workers by owners of capital and by the nobility in France. It was a reminder to all Europeans, particularly the British, that the Industrial Revolution was failing the working poor.

The Romantics, through their literature, changed Europe, granting workers and the oppressed more civil rights and employee benefits. The dignity of the individual was the focus of all reformist movements, which eventually led to European romantics railing against slavery in the U.S. The Europeans' opposition to slavery in the U.S. was of course partly based on their desire to even the playing field. How could they compete against American industries when the Americans held the distinct advantage of employing workers who were paid virtually nothing except a roof over their heads and three square meals?

Now it is American Labor that is railing against the sweatshops in China and elsewhere because American industry has discovered that goods could be manufactured in China and other Asian countries at a fraction of the cost to produce them in the U.S.

Yesterday, President Obama extolled the contribution of the U.S. labor movement to the creation of millions of middle-class Americans who have become the backbone of our democracy. We must not fail the middle-class, the President warned, for this would mean the end of the American experiment as we know it.

President Obama, clearly miffed at his critics and his perceived enemies - the business elites and other powerful defenders of the status quo - issued a challenge to anyone who would dare to confront him and further underestimate him.

"They talk about me like a dog," Obama challenged. The gloves are clearly off. From now until November, President Obama will be swinging.

I applaud this change. Obama must confront those who belittle him and who are spreading lies about him - that he is a secret Muslim, that he was not born in America, that he is a communist - and must beat his enemies to a pulp. Figuratively, of course. He is the President. No one in America is more powerful than him. He must learn to use that power.

In addition, however, President Obama must go before the American people with a Checkers speech. He must say something like this:

"My fellow Americans, During the past 19 months I have worked hard to improve the lives of Americans by creating jobs, by preventing many private and public sector jobs from disappearing. By all statistical measures, we have been successful. The economy did not get worse, in fact it is getting better and is clearly on the mend.

"My policies, however, have not resulted in the immediate creation of the eight million jobs that we need to put every American who is looking for work back in their jobs or new jobs being created by this great job-creating engine known as the American economy.

"Clearly, all of the blame must be laid at my desk. I am your President, and the buck stops at my desk.

"I apologize to all Americans who are long-term unemployed, who have taken jobs that are way beneath their training and experience, their families, especially the children who feel the pain of their parents whose prospects for finding jobs are either non-existent or very remote. I too feel your pain. I have tried very hard, but apparently I haven't tried hard enough.

"I need Republicans to cooperate with me in passing a job-creation bill in Congress. The stimulus bill has been successful but it has not been successful enough. I have grown impatient over the slow pace of the bill's job creation. The bill simply has not created as many jobs as we have hoped.

"I need the cooperation of Republicans and I want you to call your Republican congressmen and senators to implore them, even beg them to set partisanship aside and work with us Democrats to pass the $50 billion job creation bill. The bill will rebuild our roads, bridges and railroads.

"We have a crumbling infra-structure. Many countries have overtaken the U.S. in terms of modern infrastucture. We need some catching up to do. We also need to put Americans back to work. We need to prime the pump once more, to get our economy moving at a fast clip once again.

"I have bent backwards, I have coaxed them, cajoled them, humored them, but to no avail. The Republicans refuse to work with me, specifically, and with us Democrats in general. Nothing has worked. So now I must turn to you and ask you to call your Republican congressmen and senators."

This is the way his speech should have started yesterday in Wisconsin, but I understand why he did not start it that way. He had a score to settle, plus he was speaking to leaders of the labor movement. He needed to offer them a lot of red meat. Now that he has settled that score and presumably has stated his case before the labor movement's leaders, he needs to make the speech I have laid out for him above.

He should go before the American people once more and apologize for his anemic job-creation policies. And then he has to tell us what his $50 billion job-creation bill will accomplish.

American labor efficiency is unequaled in the world, but this has not given us an advantage in the world markets. American labor is expensive, but if Americans want to bring back some of the jobs that have been lost, the rest of America must be willing to pay more for the goods that they buy in the department stores.

There are no two ways about it: If Americans want their jobs back, they must be willing to buy products that are made in the U.S. which cost more than those made in China and other Asian countries.

We need this slogan on every car bumper: The era of cheap imports is over.

Stunningly beautiful but language-challenged

There are language experts who will argue that language confusion leads to a life of confusion. We cannot, for example, count as part of our culture that which we have no word for. Since we do not have distinct words for "brother" or "sister" - we only have the unisex word "kapatid" when referring to a sibling - we often get confused about the use of "he" and "she."

Which brings us to the speech pattern of the Philippines' Miss Universe contestant, Venus Raj in the recently-held Miss Universe contest in Las Vegas. Because Venus obviously thinks in Tagalog but translates her thinking into spoken English, she came up with "major, major" in the most important short speech she had given in her young life in front of a global television audience.

In Tagalog, we often double up on a word to emphasize its meaning. For example, we say "maraming marami" to denote the existence of a humongous crowd, or a humongous collection. We also say "mahal na mahal kita," meaning "I love you so much." We say "ang ganda-ganda ni Tess," when we mean "Tess is so beautiful," or "ang itim-itim ni Popoy," meaning "Popoy is so dark-skinned."

Repetition of a word for emphasis is a distinct Filipino or Tagalog speech pattern. That pattern is the origin of Miss Venus Raj's "major, major" before a global television audience.

We Filipinos are a self-conscious race and I strongly suspect that a lot of Filipinos in the global audience cringed and wished they were elsewhere, drinking a pina colada instead of watching the Miss Universe contest on TV. I strongly suspect this because from the comments I have read on the Internet, that's exactly how a lot of Filipinos felt.

Venus Raj's slip-ups are an indictment on our government's schizophrenic policies towards language development. The Marcos and Aquino administrations' cockamamie decision to mandate the use of Tagalog as the medium of instruction in our schools raised two generations of Filipinos who are barely conversant in the English language. There was a time when you could tell the graduates of U.P. and the old NCAA schools and the exclusive girls academies by their flawless use of the English language. Not anymore. A lot of Filipinos who grew up in Marcos-era and Aquino-era elementary and high schools cannot construct a grammatically-correct sentence in English.

Marcos and Aquino mandated the use of Tagalog in schools, yet they did not mandate the use of Tagalog in business and the professions. This resulted in two generations of Filipinos who think in Tagalog but who speak English in formal company. The result is Tag-lish (a helter-skelter mixture of Tagalog and English) when Filipinos are talking to each other and excruciatingly difficult speech when speaking to foreigners in English. This is evident even among television broadcasters. There are, to be sure, television reporters and anchors who speak flawless English and with ease. There are many more, however, who struggle with the English language every time they open their mouths in front of the cameras.

The nationalistic ones speak Tagalog exclusively, even when answering questions that are put to them in English.

I sometimes watch television hosts interview the famous talking heads in English even though I find it difficult to watch the broadcasts. I sit in my sofa watching the hosts struggle with their questions, carefully framing their questions in a language that is obviously not the language that they think in.

After Venus Raj's unraveling on global television, I became more convinced than ever that Philippine educators must decide once and for all: are we an English-speaking country, which Koreans and others consider us to be, or are we a Tagalog-speaking country? One or the other. We cannot be half Filipino and half-English. If we try to be half and half, we end up with generations of Filipinos like our television commentators and hosts - confused and language-challenged.

(Those of us who live in America and other English-speaking countries are the exceptions. We can think in Tagalog when speaking that language, and think in English when using the English language.)

I don't want to further comment on Venus Raj. Her difficulties with the English language are apparently not of her own making. She is a victim of the schizophrenic policies of the Philippine government on language. In a perfect world, she would be suing the Philippine government for educational malpractice.

Existentialist nightmare in the Desert

In Franz Kafka's novel, The Trial, the main character is arrested and scheduled for an arraignment and an eventual trial. He sits inside a building that serves as the courthouse for a remote unnamed location. The authorities that are bringing the case against him are unknown. He has never seen them, nor talked to them. He doesn't know what the charges are against him. All he knows is that he is being arraigned and eventually tried for something.

The Trial is one of the best-known books written by Franz Kafka, acknowledged as one of the greatest existentialist writers of all time.

I thought of Kafka last Friday as I waited in line at the Department of Motor Vehicles office on Flamingo Road in Las Vegas. When you go to the DMV anywhere in Las Vegas, prepare to spend more than an hour in line just to talk to someone. After talking to one of the many DMV employees who sit in open windows, you are given a number and you're supposed to wait two to three hours so you can be helped by other employees with their own open windows.

Pray that the second employee you talk to will be able to help you. If that employee can't, or won't, you will be asked to come back and go through the process of falling in line and sitting for hours, awaiting your turn.

I thought of The Trial because of the absurdity of the Nevada system for the enforcement of its clean-air laws.

My daughter's car, a 2001 Ford Windstar, failed the smog test in Nevada a month ago because of an engine light on its dashboard and an indication that an oxygen sensor was not working. Since my daughter had to hastily go back to Los Angeles to attend her college classes, I instructed her to have the repair for the oxygen sensor done in LA.

On my trip to LA two weeks ago, I decided to drive the Windstar back to Nevada to have it smog-tested once more. It failed again, this time because another oxygen sensor was not working.

My mechanic in Vegas fixed the problem and reset the car's computer to remove the engine light on the dashboard. He told me to drive the car 50 to 80 miles before going for another smog test. I did, but this time, the car was rejected because the computer in the car had not re-set. I called my mechanic, who told me I had to drive the car another 100 miles and just keep driving it, waiting for the computer to re-set.

I took the car for a smog test a fourth time. It was rejected again.

Another mechanic suggested to me that I needed to drive the car at least 50 miles at speeds under 60 miles per hour and then bring it back to him. I did that yesterday. You ready for this? It was rejected a third time and with the two failed tests, that was the fifth time the car could not get past the smog-test station.

The car's computer had not yet re-set.

While I was in line at the DMV last Friday, waiting to talk to an "Information" clerk, I thought of Franz Kafka and the Trial. Why was the full weight of the Nevada bureaucracy on my shoulders? Was I being accused of fouling up the air? I know this was not the case because the test results never mentioned toxic substance levels beyond the level of tolerance coming out of my car's tailpipe.

The car's computer actually works, it just did not work properly in one area - the monitoring of oxygen levels.

The car's registration expires today, August 22, which was the reason for my visit to the DMV. I needed to get a time extension for registering the car. And that I accomplished, easing the burden on my shoulders.

I stood there in line thinking of The Trial. No one is accusing my car of fouling up the air. The whole point of smog testing is to make sure that the car does not spew toxic substances into the atmosphere at levels beyond what are permissible.

The car is not being accused of that. What it is accused of is that the computer is taking too long to function in one area, and one area only - the monitoring of impurities. Because of that, the car cannot be registered. Everybody knows that it sometimes takes a long time before a car's computer starts to function properly again, yet I'm supposed to make the computer work by driving it around and around in the streets of Las Vegas to force its computer to kick in. How far I have to drive - and for how long - nobody knows.

I've already put in close to 500 miles, driving around, nowhere in particular to go. Meanwhile, I cannot register the car because it continues to be rejected for the smog test.

I thought the smog test measures the quality of the air that comes out of the car's tailpipe. In New Jersey, contractors for the Department of Motor Vehicles stick a metal rod into the car's tailpipe to measure the amount of toxic substances that are coming out. If those substances are within tolerable limits, the car passes inspection.

Of course, in New Jersey, they also look at the engine light. If the engine light is not on, the car passes. My car's engine light has been off since my Las Vegas mechanic fixed the oxygen sensor problem.

In New Jersey the Motor Vehicles people test for toxic substance levels, the whole point of keeping the environment clean.

In Nevada, it's an existentialist nightmare. You know that your car is not polluting the atmosphere. Yet your car cannot be registered. The whole weight of Nevada bureaucracy is on your shoulders. Your friends, neighbors, everybody tells you that at some point in their lives they too have found themselves face-to-face with Nevada' existentialist bureaucracy.

I am channeling Franz Kafka. Hey Franz, want to write another novel?

I was to meet with a Filipino mechanic this morning (Sunday, August 22) who would finally put a fix on the problem.

But before I meet with him, he said, I had to drive my car on the highway at 45 mph for ten miles, then drive it at 65 for another ten miles, then 45 again followed by another ten miles at 65.

I hopped on my car at 8:30 a.m., drove north on Highway 215 for ten miles at 45 mph, got off the highway, turned around and started driving at 65. I noticed that the car started to make funny noises as a I struggled to keep it running at 65 mph. The car kept decelerating. Luckily for me it was Sunday morning and there weren't many cars on the highway.

I kept pressing on the gas pedal as the car slowed down to a crawl. When I reached the off-ramp to Sahara Avenue, I took it and forced the car to climb up the ramp until I had to step on the brakes in front of the traffic light, which was red.

When the light turned green, I stepped on the gas and the car did not move.

I knew right away that I had blown the transmission. Maybe it was from driving the car at a constant speed of 45 mph on the highway, maybe it was a problem that was already brewing. Who knows? All I know is that I don't want to spend another $2000 to repair the car's transmission. The car is worth - perhaps - $750, why should I spend another $2000 on it, especially since I've been spending $2000 a year - easy - on the car since 2007.

Now I've got another set of problems. Would a car dealership accept the car as trade-in even though it is not running and the transmission has to be fixed? Will the charity organizations accept it as a tax-deductible donation? Failing all that, will the auto wreckers accept the car?

The nightmare has not ended. It, like in the movie "Inception" is a nightmare within a nightmare.

Hope for under-water houses and millions of unemployed Americans

My classmate in my dance class, Laura Emerson, who is on the staff of the Las Vegas Review Journal, recently wrote a piece on the historically low mortgage rates. The low mortgage rates are out there, beckoning homeowners in Las Vegas and elsewhere, she wrote. Nearly everyone who owns a house probably would refinance these days because of the bargain-basement interest rates. Except that most cannot take advantage of the low mortgage refinance rates.

Most homeowners in Las Vegas are not qualified for refinancing. Many have homes that are under water, i.e., with market values lower than their mortgage balances. No mortgage banker or broker would refinance such properties. Homeowners whose houses are not under water are also shut out of the refinance market because their houses are barely above water and their home equities are much less than the 20% that banks require. Banks would refinance houses that have less than 20% equity provided that the homeowner purchases mortgage insurance. The cost of the mortgage insurance effectively shuts most people out of the refinance market.

I was reflecting on Laura's front-page business section article the other day and may have stumbled on a solution to this conundrum.

Assume that a house owned by a Las Vegas couple - let's call them James and Eleanor Alfonso - has a mortgage balance of $300,000. Their house now has a market value of $270,000. That house is clearly under water, with a negative value of minus $30,000. The bank that holds the mortgage on the house is probably watching this loan with eagle eyes for any sign that the Alfonsos may be thinking of defaulting and skipping town, or buying a second house - a very cheap foreclosure - prior to defaulting on their $270,000 house.

It is the way of a lot of houses in Las Vegas. People are just walking away from their houses. The "responsible" debtors are the ones who buy a second home - a cheap foreclosure - move into that second house and then default on their first house.

It's a sad, sad tale of mortgage waywardness in Las Vegas and elsewhere in America.

But what if there is a way to make both the bank and the homeowner whole?

Obviously, the biggest housing crisis since the Great Depression calls for the most creative solutions.

What if the bank that holds the $300,000 mortgage is willing to set aside the $30,000 negative equity on the Alfonso house and freeze it? The $30,000 will not be forgiven, just set aside and frozen. What that would do is that the mortgage will suddenly be equal to the market value of the house. The equity on the house will be zero, but at least it will no longer be under water.

Not long ago, people could buy houses with no money down. There were loans to first-time home buyers, to military people and others that the government was trying its best to put into houses. The mortgage industry can revive such programs, except that now the only people who would qualify for such programs are those who already are living in their own homes and have zero equity in them. The goal will not be to qualify as many Americans as possible for home ownership. Instead the goal will be to keep Americans in their current homes after years of proving that they can afford the mortgage payments.

The government will back the refinancing of mortgages that mortgage companies now hold on under-water houses. There could be a requirement that the homeowners who qualify for these zero-down, zero-equity mortgages have lived in their houses for two or more years. There could be an additional requirement that the homeowners have had a good payment record, that is, no more than one month in arrears in their mortgage payments.

With today's mortgage interest rates at about 4.5%, the Alfonsos' house, refinanced at a net loan amount of $270,000, will mean a monthly payment of $1368.05. Assume that the original mortgage amount on the Alfonso house was $350,000, with a mortgage interest rate of 7.5%. This means that the Alfonsos' monthly mortgage payment is currently $2497.25.

This means that the Alfonsos will see their mortgage payment (principal plus interest, not including real property tax and insurance) reduced by $1129.20. What this does for the Alfonsos is that they will do everything in their power to stay in their home and to continue making mortgage payments. Most Americans in a similar plight as the Alfonsos will welcome the decrease in their mortgage payments because a lot of them are hurting due to the Great Recession. A lot of them used to be double-income families but are now struggling with only one of the spouses working while the other spouse is receiving unemployment insurance compensation or not receiving anything at all.

The special refinancing arrangement, of course, would not be available to those who bought houses in 2006 and 2007 in Las Vegas. By 2006, home values had nearly tripled in the Las Vegas valley from a base year of 2002. Houses bought in early 2007, 2006 and some in 2005 had appreciated so much that when home values plummeted to 2002 levels those houses had lost up to 60% of their market values. At some point, the banks and the Obama administration will have to figure out what to do with those houses. The great majority of houses in Las Vegas and across the U.S., however, would qualify for the special refinancing arrangement.

Because of the help that can be provided to the Alfonsos in Las Vegas and millions of American families, the number of foreclosures and abandoned houses will slow to a trickle and the housing market will stabilize. At some point, the value of houses will start to climb and people who once owned homes that were under water, will see increases in their home equities. (In some parts of the country, the housing market has indeed stabilized and home values are starting to rise - even without much government intervention.)

This may even result in a mini-boom in the real estate market, as more people are encouraged to buy houses because of the expectation of increasing home values. The resultant mini-boom will encourage contractors to build again, causing a mini-boom in the construction industry.

Remember the $30,000 that the mortgage company set aside when the Alfonso house was under water by exactly that amount? Because the market value of the Alfonso house at some point will have increased to more than $300,000, the Alfonsos can refinance their house a second time, adding the $30,000 to their mortgage debt. This refinancing will divert $30,000 to the Alfonsos' original mortgage company, wiping out the amount that was set aside and frozen by that mortgage company.

It is important for mortgage rates to remain low, or even go lower, for this plan to work. The Alfonsos, after adding back the $30,000 to their mortgage balance, must not see a substantial increase in their monthly mortgage bill for this to work. If the government keeps mortgage interest rates low, or drives rates even lower, the Alfonsos and millions of refinancing homeowners will not be discouraged or inconvenienced.

If the $30,000 is added back to the Alfonsos' loan and the Alfonsos refinance a second time, assuming that the mortgage rate stays at 4.5%, their monthly mortgage payment will rise to $1520.06, still considerably less than what they are paying now.

The Obama administration is wracking its brains trying to figure out how to end the mortgage crisis in America. We may have stumbled on the way out of the conundrum.

If nothing is done, the economy will continue to be dragged down by a real estate market that is not just under water but is in the midst of a great flood. Banks will continue to suffer as more Americans walk away from their homes after defaulting on their loans. Banks and mortgage companies have every reason to embrace my plan, which will stop the bleeding from the foreclosures.

A second government initiative that must be pursued and announced in dramatic fashion immediately is the creation of millions of jobs. This is priority one for this administration.

This is my recommendation to the Obama administration:

1. We will offer every recipient of unemployment insurance payments, starting with the 99-ers, those who have been unemployed for 99 weeks or more, a chance to work and at the same time keep receiving unemployment insurance checks for another six months. The mechanism for doing this is the private sector, as explained in 2) below.

2. We will start with small businesses and gradually add larger businesses to the program. Small businesses with five or less employees typically are unwilling to hire additional employees even when work volumes increase because of possible harm to the bottom line. The government program will make it possible for a small business to add an employee it needs but cannot afford to hire. Assume that a small business needs an additional employee at a position that typically pays $15 an hour, $120 a day or $600 a week. An unemployed person who gets $450 a week from the government would probably want to take that job, which would pay her an extra $150 a week and put her in the ranks of the employed, rescuing her from her desperate straits.

What is the incentive for a small business owner to hire this additional person? The small business owner will only have to pay his additional employee $150 a week because his new employee will still get her $450 from the government.

This arrangement will put money in the pockets of unemployed Americans, resulting in increases in business activity. The resultant increases in business activity will mean more revenues for small businesses and eventually large companies, as small businesses start to increase orders of office supplies, equipment, plant, raw materials, machinery, etc. Restaurants will have a mini recovery as more people decide to eat out instead of eating at home. The increased business activity will ripple and echo into the larger economy.

With more people being employed again, tax collections will increase and local, state and - to a much more limited extent - federal government coffers will begin to fill up.

The federal government cannot afford to finance this program indefinitely for obvious reasons. The program may, however, over a six-month period be enough to jump-start the economy and get all its pistons humming again.

Many of the unemployed Americans who are hired by small businesses will probably stay on after the crash federal make-work program ends. An even larger number will find work in other companies, as the economy expands, causing the creation of millions of jobs in the private sector.

The third leg in this three-legged dance to the gods and goddesses of employment is the single-minded focus on the manufacturing sector. Small businesses in manufacturing industries would have the priority over other kinds of businesses in the creation of jobs that are partly paid for with unemployment insurance. The start-up businesses in the alternative energy sector would have high priority.

The contractors engaged in the erection of solar panels on rooftops. The sub-contractors engaged in the building of plants that will manufacture solar panels. The sub-contractors engaged in the erection of wind turbines. The manufacturers of futuristic cars - cars that can be driven in water and sprout wings, electric sports cars.

Small businesses that supply GM, Ford, Chrysler and the foreign manufacturers with plants in America will automatically qualify for this program that puts unemployed Americans in jobs while still receiving unemployment insurance.

Sub-contractors that install electric recharging stations all across America to power the electric cars that are now entering the American market.

Apparel manufacturers, electronics manufacturers who wish to add employees because Americans are becoming conscious again of the need for patronizing American-produced consumer items. The Made in America campaign of the Obama administration, if pursued with imagination and presidential resolve, will drive home the point that if Americans want jobs they must be willing to buy goods manufactured in America even if the goods cost more than the cheap imports.

In the past, our financial wizards and Federal Monetary Board poobahs fought inflation in a knee-jerk fashion. Recent experience tells us that some inflation is good because manufacturers are not afraid that they are producing goods at today's prices but may be selling these goods at tomorrow's lower, bargain-basement prices, killing their profits. Increasing prices mean that goods produced at today's low prices will be sold at tomorrow's higher prices, thereby assuring bonus profitability.

In other words, we want more inflation, not less. But not too much. Too much inflation will erode the value of our money too fast and the result will be an inflation spiral that could go out of control.

If I were Obama I would go before the American people and announce a plan that will dramatically reduce monthly mortgage payments for many Americans through a boom in refinancing. I would also announce a plan to put unemployed people back to work in small businesses, financed partly by a continuation of unemployment insurance payments to such people who find employment through such a program. Thirdly, I would announce that the first small businesses that will be helped by the make-work program are those engaged in manufacturing.

I would do it the day after Labor Day.

The Formative Years

I almost drowned when I was seven. My friends in that old neighborhood in Santa Ana, Manila all knew how to swim. Most swam doggie-style, but at least they stayed afloat. I didn't.

I remember diving into the pool after everyone else did and in an instant, all I could see were violent bubbles. I was gasping for air as I kept sinking on the steep incline of the pool's bottom surface. The more I tried to find air, the deeper I sank. I remember thinking that I would not get a chance to finally meet the child actress, Tessie Agana, who was my obsession in those days. I did not think of my parents, brothers and sisters. I thought of Tessie Agana and how I would not have a chance to ever meet her.

My life did not flash before my mind's eye, there was only surrender and a realization that my young life was about to be snuffed. Just then, there was a push against my back. Another push. Then another, and I could see the sky once more.

I had been saved by my friend Neto, who was probably two years older and very athletic even at that young age.

When I finally drown in the waters of my old age - which I am betting is still quite a ways from now - I don't expect to see my whole life unfolding before me either, contrary to what has been written about in books and movie scripts. I expect only an eerie silence, a cosmic resignation, a sublime acceptance.

Whatever parade and review of my life's icons, the nostalgic whispers of the real-life characters in my youth, the imagined giants who informed my moral and character building, those are happening now. Not at the point of death, but in moments such as now, when I wake up and spend a morning reflecting on my life.

My first class party (sophomore in high school) was an Elvis-filled night. One of my classmates, Jorge Bunag, shook his hips, stabbed his knees in a downward spiral, as his body gyrated to the tune of Blue Suede Shoes. It wasn't really my first party. That was a party at the home of my older brother's classmate, Gilbert Evaristo. I don't remember the music that was being played, though I'm willing to bet it was Frank Sinatra. Sinatra was all we listened and danced to in those days.

I remember dancing with a girl who may have been twelve - I was thirteen - and telling a joke which I considered particularly funny. I laughed so hard at my own joke that a bubble formed from my right nostril. I was so embarrassed I quickly turned around and left the girl in the middle of the dance floor. I glanced back at her to see that she was frozen in place, not knowing that she had just suffered the first trauma of her young life.

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I remember having a book of pictures of Brigitte Bardot. I don't know how I got to own that book. I might have gotten it from my father's collection of books and paperbacks. My dad was an avid reader of pulp fiction and an admirer of the female form.

Brigitte Bardot, or B.B., was to an average 14-year-old boy like me the ultimate pinup girl. She had a bronzed body, long legs, a bosom made for the gods, narrow hips, and full, sensual lips. The old woman who did our family's laundry often caught me glancing at B.B.'s pictures while doing what normal 14-year-olds normally do. I did not care that she saw me. I remember thinking she was old anyway, what did she know?

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The Beatles introduced me to the subtle intricacies of young adulthood. I was graduating from the unrequited love of Frank Sinatra ("If you are but a dream, I hope I'd never waken...") to the coy and complicated emotions of Beatle-land ("If I fell in love with you, would you promise to be true?" and "Something in the way she moves attracts me like no other lover").

I remember having a girl friend where I worked who spoke to me in Beatle-talk. Whenever she wanted to tell me anything, she quoted a line from one of the Beatles' songs.

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JFK was a huge influence on my political ideology. I am a Democrat now because Kennedy was a Democrat. I am a liberal-progressive despite the fact that where I grew up - La Salle - manufactured, and still does, religious conservatives. By the hundreds, by the thousands.

JFK also sent me subliminal signals that people who were borderline heroic were also sometimes immoral in their daily lives. I thought in those days that JFK was one of the exceptions, that he was one of the few heroic figures who were also immoral. Now I know that a person's personal morality has no connection with his heroism or lack thereof.

Marilyn's "Happy Birthday, Mr. President" before the world's TV cameras encapsulated the ill-fated romance between the world's greatest living man of the era and the world's most famous, most desirable woman.

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Marlon Brando was the first of the "method" actors who came out of a small acting school in New York. Founded and operated by the father of Geraldine Chaplin, Charlie Chaplin's wife and later widow - who appeared as the wife of Omar Shariff's Dr. Zhivago - the acting school produced James Dean, Paul Newman and many other actors and actresses who became giants on the movie screen.

Brando was only one of the many actors who graduated from the famous "method" acting school with a mission to transform acting into an art form. To be sure, there were great actors who had preceded Brando. Those actors, however, were not products of any school. They were great because they were great natural talents. Recall Lawrence Olivier, Orson Welles, Charlie Chaplin, Clark Gable, Henry Fonda.

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I'm willing to bet that the generations that came after my generation have their own set of memories that make them feel that theirs have been lives worth living. But I just don't see how their wonder years could have the same sense of discovery that people of my generation enjoyed in our formative years.

Society allowed us to grow and become our individual selves. We roamed the streets and came home in time for dinner, our parents all the while knowing that wherever we were, we were safely discovering our ever-expanding world. Today, kids are forbidden from venturing out into the streets because so many kids disappear only to be found later in ditches, lifeless and covered with mud.

There are so many crazies, perverts and all kinds and degrees of social deviants that kids are locked up in houses out of necessity. Thank God for video and computer games kids can stay home and not end up wrecking the furniture.

When they are in their sixties, seventies, eighties and beyond, are the kids going to have memories of their adventures and misadventures, or are they going to have memories of their degree of expertise in Warcraft III? Will they remember how good they had become in Halo 3?

The generations born since the turn of the 20th century probably worried about the generations coming after them. The world was shrinking and becoming more dangerous. I imagine, however, that the older generations living at the end of the 19th century envied the younger generations because the kids in those days were beginning to discover the wonders of indoor plumbing. The world was also starting to eschew war as their countries' primary foreign policy strategy.

The 20th century brought us sanity and sanitary living. The 20th century enshrined the value of human life, human rights and civil rights.

The 21st century is threatening to dismantle all that we accomplished in the past 100 years, as the world moves towards the clash of civilizations (Islam versus the rest of the world), the imprisonment of our young (fear of perverts, rapists, serial murderers and such who prey on children and women), the rise of the counter-culture (tattoos, body jewelry, drugs, four-letter words) and the institutionalization of long-term unemployment.

What will the memories of today's digital generation look like?

We need an all-out ideological civil war

We need an all-out ideological civil war. Without the blood-letting of course, but just short of it. We need to pit right wing versus left wing. Progressive ideas versus conservative ideas. Not in the realm of politics, but in our daily lives.

Americans have to be told that this is necessary. We face an uncertain future that is getting more and more uncertain every day. We can no longer pretend that the day of reckoning is not at hand, because it is staring us in our faces every morning, as we brush our teeth.

The Democrats are thinking of introducing next year legislation that will amend the recently enacted health care legislation to include a public option. Should they succeed in doing that, there will be an uproarious national debate on the role of government in this country that will make last year's dysfunctional town hall meetings seem like a picnic.

America needs this. If the left, progressives and students mobilize to support the public option and the right, the chambers of commerce, the old conservative folks mobilize in opposition, the resultant gut-wrenching shouting match will determine the country's permanent direction.

I believe in the public option. I believe in progressive ideas. I believe that most of the problems we are seeing today - economic, societal, lack of political will - are a result of years, even decades of conservative neglect. From Reagan, to Bush I to Bush II, the Republicans have neglected the erection of defenses against the Japanese, the Koreans, the Chinese, the Indians who have systematically dismantled American manufacturing and other business sectors.

They looked the other way as country after country took advantage of the U.S.'s commitment to laissez-faire economics. Reagan, after his second term ended, had no idea why the Japanese gave him a one million dollar gift during his visit to Japan in 1989. The Japanese loved Reagan. He never once entertained thoughts of protecting American manufacturers of television sets and other electronic products from the cheap Japanese products that were being dumped in the U.S. market. By the time Reagan's second term ended, the radio, television, non-high tech consumer electronic products industries had been buried in Arlington cemetery. All in the name of American military superiority.

Bush II - the younger Bush - looked the other way as China consolidated its position as chief night burglar of U.S. manufacturing jobs. He looked the other way, because China was financing Bush's ill-advised war in Iraq. He looked the other way, because China was financing the massive Bush tax cuts for wealthy Americans, many of whom were and still are Bush's friends. He looked the other way, because China financed the expensive flexing of world power muscles that Bush extolled when he proclaimed "Mission Accomplished" on the U.S.S. Lincoln.

We became like the Russians, as the Russians became like Americans. Recall that Russia was a third-world economic power even as it assumed the role of the second military superpower, a menacing knife at the throat of the world's number one superpower, the United States of America.

With China and India leading the way, other countries have taken over manufacturing and back office operations for American business. It started with Reagan during the Japanese miracle, continued under Bush I and to a certain extent under Clinton - though Clinton must be credited with the explosion of high-tech jobs in Silicon Valley and other technology centers all over the U.S. - and reached a crescendo during the Bush II years, when China and India systematically relocated a sizable chunk of American business into those two countries' cities.

The Russianization of America is nearly complete. Like most third-world countries, we struggle to find jobs for our people. We promise ourselves that we will develop alternative energy - solar, wind, thermal, nuclear, etc. - yet in the back of our heads we know that China and other countries are so far ahead of us in these fields that we may already be an also-ran in them.

We delight in being the sole military superpower in the world, an empty distinction since we know that a devastating terrorist attack on American soil is not a question of "If" but of "when."

In the end, we really have inherited nothing, just the wind. We are fast becoming third-world economically, even as we cling on to our military might. Just as the Soviet Union did during the Cold War.

The most important, most valuable resource owned by Americans - their houses - have lost so much value that now people can't wait to get rid of their houses instead of treasuring them. People are fleeing their upside-down houses (houses that owe more money than they are worth) as though those houses had the germs that cause the Black Plague.

Americans expect the worst of their Social Security system, their Medicare and Medicaid, which they consider already bankrupt as we speak. Americans are wrong on this, because the Social Security system is decades away from insolvency, even if the U.S. Congress does nothing. But the dim prospects are real. If America cannot find future public financing for the continuation of Social Security and Medicare, those two entitlement programs will eventually become insolvent.

For the first time perhaps in its history, the American nation fears its future. Are we equal to the challenges? Do we have the talent? Is it true Chinese and other Asians are born smarter than Americans? Why do Asians outperform most American kids academically?

Do we have enough money to support our military? Shouldn't we slash the Pentagon budget in half and bring our troops home where they can protect the country from Al Qaeda and other terrorists who are plotting to one day launch a terrorist attack that will rival 9/11?

American ingenuity, which used to be our source of pride and the promise of a prosperous future, is now being rivaled by other countries. While we still dominate new patents, our lead over the rest of the world is fast shrinking.

Our Ivy League universities are the greatest, but they have become so expensive that our own children are shunning them. Nowadays, our elite universities are educating Chinese, Indian, South Korean, Taiwanese, HongKong and other scholars so that those scholars can go back to their home countries and accelerate the pace of dismantling American-based businesses.

Besides that "minor" inconvenience, the current Great Recession has rendered diplomas earned in those great universities useless as more and more of their graduates find difficulty finding jobs upon graduation.

Americans do not dare to dream of the nice juicy jobs, they are fighting each other for jobs, any old jobs. And the prospects are more of the same over much of this decade. Will it ever improve? What happens to all these kids who are graduating from college and are spending the next chapter of their lives doing odd jobs because there are no permanent, career-making jobs that are available?

Is the solution another "Go west, young man" epochal episode, with west being China and points in Asia, where American jobs have immigrated to? Citizens of third-world countries have to expatriate themselves to find work. Are Americans destined to do the same in the not-too-distant future?

And what do we do about those who are in this country illegally? We can't deport them all, even if we could find them. What would King Solomon do? Is America sufficiently Solomonic to tackle the illegal immigration problem smartly and logically, not through their gut reactions?

America must go through a soul-wrenching national debate that explores a multitude of issues confronting American society. We can start with a debate on the public option. Such a debate will necessarily answer the question: Is America entering a welfare state phase, similar to the phase Europe had to live through as it struggled to take care of Europeans' needs after the Second World War, when Europeans were dependent on the good graces of Uncle Sam?

If America can no longer afford to solve most, let alone all of its problems, then the correct prescription would be a welfare state similar to the European welfare states.

That is what a national debate on the public option will accomplish. I believe - even as I favor the public option - that if the U.S. Congress successfully introduces the public option, it will be only a matter of time before the country adopts a health care system that mimics the Canadian, Australian, British and other European systems. I think those are great prospects. Health insurance for all, administered and financed by the U.S. government. With money collected from the people through higher tax rates.

America will look more like Canada. But is that such a bad thing? In the Time-Life documentary, "Auschwitz," reference is made to a section of the Auschwitz concentration camp as "Canada." That section was known as Canada because it was run like heaven. Corrupt - because German soldiers routinely pilfered Jewish prisoners' private belongings - but nonetheless run like heaven. The German soldiers in Auschwitz believed that Canada was the land of milk and honey, where all things good and beautiful awaited the people who were fortunate to have landed there as immigrants.

More and more Americans are turning their envious eyes to the north. Canadians have their future and their present mapped out for them. The government does all the planning, the people do all the enjoying. Canadians pay a whole lot for the privilege of living in that section of heaven they have carved for themselves, but they gladly pay. They look at their neighbors below them and tsk-tsk their way to the realization that the Americans expend a lot of energy rejecting the one lifesaver that can save them.

I'm all for a welfare state. Let us entrust the government with more of our money so that it can take care of our needs - basic and sophisticated needs. Most Americans live paycheck-to-paycheck. After they get done with the bills, all they have left is their paltry disposable income that they use to buy clothes, go to movies, party with their friends, etc. Then they work for another month so at the end of the month they have the money to pay their bills.

We Americans save very little of what we earn. Most of the citizens of countries that we dismiss as welfare states - or socialist states, if we believe the Republicans - save more money than we do. They take longer vacations, they enjoy life more, while we Americans work our fingers to the bone for the privilege of paying our creditors.

All the while, we are trusting in Uncle Sam. We think that Uncle Sam will protect us when we get old, or if we become disabled. But how can Uncle Sam do that if we are constantly questioning why we even pay taxes to the Federal government?

As a nation, we Americans must dialogue the question: if the government can promise us the security that Canadians, Australians and Europeans enjoy, are we willing to pay more in taxes? Are we willing to give up some of our freedoms for the greater good? Those are the questions confronting us today.

The sooner we answer that question, the sooner we can go on the road and meet our destiny as a nation.

A speech Obama must deliver

My fellow Americans,

A week ago, I told some of my most passionate supporters in Nevada that I found it hard to believe that the Republicans, who ditched the American economy not too long ago, now are demanding that you give them back the keys.

While I got a few laughs and some positive comments from that remark, I now realize that I may have erred in comparing the American economy to a ditched car. It was never my intention to make light of the earth-shaking events that clobbered the American economy the year I was running for the Presidency.

The American economy in 2008 in many respects looked like the economy did in the years leading up to the Great Depression. Banks, insurance companies, investment houses were all sinking. They had taken in water, the turbulent waters of the mortgage meltdown, the houses whose values were falling like rocks to the bottom of the sea. Americans had lost their jobs - 8 million of them. For the first time in a long time, American optimism had been replaced by a sense of impending doom. A foreboding sense that a huge comet from outer space was on a collision course with our planet earth.

Thus, to compare the American economy to a ditched car was wrong - utterly wrong.

What really happened in 2008 was that an earthquake - the mortgage meltdown - had so violently shaken the American economy that a side of a Rocky Mountain had broken away and had been sliding down a snow packed slope. It was a wayward mountain side the size of Rhode Island that was fast slipping down that slope. At the end of that slope was a drop no less than 100 miles deep. It was a straight drop.

I remember being in the heat of the campaign in 2008 and being briefed by my advisers about the meltdown in the financial markets that was threatening the whole American economy and eventually the world's economy.

I watched with horror as news filtered in that the American economy was headed for a steep fall. I, like millions of Americans, was relieved when I learned that Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson took the near-desperate step of sponsoring a bank bailout plan that promised to end the dangerous slide of the American economy.

It would cost close to a trillion dollars, but at least the economy could be saved. There were still danger signs everywhere, but the bailout of Wall Street would at least buy time for our economic planners to permanently halt that slide towards that ravine that was a straight drop 100 miles deep.

Mr. Bernanke and Mr. Paulson, aided by the U.S. Congress, was able to come up with a huge tree. Imagine a tree so huge it is almost as big as the state of Rhode Island. This was the $1 trillion tree that stopped the descent of the American economy into the ravine.

When I assumed the presidency in 2008, though the economy was no longer sliding, the weight of that rock the size of Rhode Island was proving to be too much for even that gargantuan tree. It appeared that the tree would eventually break and the rock would continue down that snow-packed slope and into that ravine.

Though the slide had been stopped, the lack of economic activity threatened to crush that huge tree. Nobody in America was buying. Nobody was buying cars, houses, durable goods, investments, shopping mall goods. Economic activity had come to a dead stop. If that condition went on too long, most people in America would lose their jobs, because if nobody was buying anything, there would be no need for American and foreign companies to produce anything.

It was clear that the solution lay in the government itself providing the spark that would create the energy that would make the American economy spring back to life. Every responsible person in America agreed that a stimulus bill costing at least a trillion dollars was needed. Some economists argued that the stimulus bill should be bigger than one trillion. We in America propose, but the U.S. Congress disposes. Congress would pass a stimulus bill that was a shade under a trillion dollars.

With our stimulus bill, the bailout of the American car industry, the cash-for-clunkers, the full-scale immersion into solar, wind and turbine energy industry, my administration, the Monetary Board, the U.S. Congress and the American business community all working together, we were able to jump-start the American economy so that now we are in the midst of an economic expansion that is on a trajectory to an eventual full economic recovery.

We are pulling that huge rock back up the slope, inch by precious inch. But, it is an activity that is historic and epochal in its challenges. Those old enough to remember the Great Depression perhaps can remember that the recovery from it took more than ten years. The final piece of the puzzle came when the U.S. entered the war in Europe and Asia and American industry went into full-employment.

While the American economy did not go into a Great Depression in 2008 and 2009, the enormous challenges before us were clear for everyone to see. We had lost 8 million jobs during the Bush years, we were still losing 750,000 jobs a month when I took over, and many of the jobs already lost and we were continuing to lose we knew would never come back - because they were manufacturing jobs in industries that had fled America for China, South Korea, Japan, Taiwan and other Asian countries.

My biggest challenge was how to put people back to work. That was the only way the country could slowly pull that rock back up that slope and reconnect it to that Rocky Mountain side from which it had broken off.

Thanks to American ingenuity and the heroes of Main Street - the small employers, the big multinationals that are now hiring again - we are gradually seeing the rebirth of American optimism. The economy has added jobs again, though the jobs that are being added have not been enough. We need to do much, much better in this area. We cannot let a whole generation of Americans - today's college graduates - spend the best years of their young lives unemployed and uncertain of their future.

We need to create jobs by the hundreds of thousands and eventually by the millions. We need to accelerate the pace that that big rock goes up that slope. We must push harder, and pull with more force. I believe that I have been leading in this effort. I've had my focus on the economy from Day One. People in America may not know this, because I did not constantly remind them of it, but since I got my initial briefings on the state of the American economy at the beginning of my term in 2009, I've had my eye on that rock. I knew it was going to be very difficult, one of the most difficult things that any American president would ever be challenged to accomplish.

I believe in my heart that we are on the right track, even though there are times when I am tempted to be discouraged. The pace of our recovery is so slow and I know there are millions of Americans who are having an incredibly tough time making ends meet. And the generation that just graduated from college must be wondering if they will ever find meaningful jobs in their lifetime.

But we must not allow the few among us who want a return to the policies that got us into this mess to prevail in the ongoing national debate. We are making progress, we are pushing that rock back up that slippery slope slowly but surely.

If we turn the U.S. Congress back to the Republicans, who along with the previous administration caused the earthquake that broke the side of that Rocky Mountain to split apart and go on that downhill slide, we are making a big, big mistake. The Republicans threaten to undo what we have already done. They want to return to the policies that caused the economic mess we're in.

They are not just saying NO to everything that my administration is proposing, they are also trying to convince us that their old policies of no regulation, of every man for himself, of low taxes for the rich, of hundreds of billions in tax breaks for the oil industry, of artificially generating economic activity by going to war in countries like Iraq will work. Even though we still have the memory of how the previous administration dragged our country to an economic collapse.

We Americans are a patient people, as long as we are given the facts. Just the facts.

I hope you, my fellow Americans, will not lose faith, that you will see that though the American recovery is probably the most difficult undertaking of our lives, we can get the job done. We are Americans. We never give up.

It will be tantamount to giving up if we give the reins of our economy back to the same people in Congress - the Republicans - who got us into our mess in the first place. If America must replace the Democrats in Congress, please do not replace them with the same people who ruined our economy through bad policy decisions. Can't think of any others who could do a better job than the Democratic legislators? That's because there are none. Despite the presence of Tea Party activists who at best have only muddied thoughts to offer about the American economy.

I appeal to the American people to stay the course. I need the help of a Democrat-controlled U.S. Congress to pull that huge rock back up that slope. We don't need a Congress that is pulling in the opposite direction - back towards the profligate policies of the past.

My fellow Americans, I appeal to your reason. I know it is difficult for you not to blame the party that is in power while you continue to suffer through the worst economic times since the Great Depression. I thoroughly understand your frustration. But it would be a much bigger mistake to hand Congress back to the same legislators who doubled the national debt in the 8 years of the Bush administration, who presided over the loss of 8 million jobs many of which will never come back, who refused to regulate the industries that sorely needed regulation.

It took us many years, nearly ten years to get us into this economic mess. Please do not give up on us after 18 months. We must redouble our efforts, but most of all, we must work together. The Democrats in Congress are wracking their brains, figuring out how best to generate more economic activity in this country. I need their help. Don't give me a Congress that will work against me in the coming years. You elected me to at least four years to get our country back on track. I need a Congress that will work with me and not against me.

A Republican Congress - which is saying NO to everything I propose - will surely say NO in the future.

If you will not do it for me, do it for yourselves. You need an administration and a Congress that are working together and not against each other.

Good night, and God bless America.