Monday, November 16, 2009

Obama Takes the Enron Approach to Fix the Economy.

I was joking around with a couple of friends on using Obama’s strategy on the economy as a way to stimulate growth in his own line of business. I said that to bridge the gap between actual and projection, the larger division of the company should buy product from the smaller division as a means of stimulus. Sure, it would show up on the books as a positive for the one division and a negative on the other, but that doesn’t matter. Then, there should be a cash for clunkers type of program. The larger division will provide a substantial discount, that will be applied directly to the smaller one, to clients that want to trade in their old stock and purchase new. Very important here too is that the old stock must be destroyed, even if it is considered an asset that could be resold for profit. The result again would be a bump in the profit of the smaller division, how bet it temporary. Now, it is the 3rd quarter. Both of the previous measures have only resulted in temporary spikes with no long lasting impact. The small division had to hire about 5 people to deal with the new business spawned by the larger division. In the 3rd quarter, the smaller division had to let the 5 people go, plus one additional person that already existed. The larger division now gets to get credit for saving 6 jobs in the first half of the year. 4th quarter looks bleak again. All customers are still in a freeze, waiting to see what direction the larger division will go to support the smaller division. To add to the problem, investors in the larger division are starting to sell their stock and put their money in Gold because the solvency of the larger division has been compromised by bailing out the smaller division. The president of the company says that to solve the jobs issue at the company as a whole, he will hold a job’s summit. Customer’s will laugh and decide to move the rest of their money to gold or a Chinese company.
Anyway, isn’t Obama’s strategy the same as Enron. Didn’t Enron just bail itself out the same way as our government. Right now, you have all of Asia saying that they don’t want to end up like Enron Stockholders. If they sell, watch out.


Troy said...


jrchaard said...

Other ones I've heard that I like, Obamunism and chairman Maobama