The country has been getting ransacked over the last couple of weeks. On August 4th 2008 both houses of congress (Rep. David Price included) sanctioned H.R. 3221 and the conservatorship of Fannie and Freddie essentially saddeling the U.S. government with 5.4 trillion in debt that it is now responsible for!!!
Had we had a debate and expressed the outrage over this back then, gone into the streets banging our pots and pans .... the latest outrage, the proposed bail-out bill, would now be something that our Congressman David Price might think twice about before voting ... we should have broken down his door back in August!
The very wise, prophetic, yet ignored, Catherine Austin Fitts has summed this bill up:
This bill gives the U.S. Secretary of the Treasury - the former chairman of one of the Wall Street firms most instrumental in creating the current financial “problem” (or opportunity, depending on whose team you are on) - the power to spend or donate $700 billion in whatever manner he chooses and to pay whomever he wants as much as he wants on whatever terms and conditions he wants to help him do so and give them access to any information he wants. Those who help are free to use that information without liability for any responsibilities related to governmental access.
Another commentator has illustrated an opportunity cos if we blankly bail out:
$700 billion divided by 5 million homebuyers who are underwater= $140k per homebuyer. But as George Bush said: “It’s not the government’s job to bail out speculators, or those who made the decision to buy a home they knew they could never afford.”
With the continual hemorrage of federal spending on war, tax cuts and continued bail-outs for corporate, and speculator thieves, the devaluation of the dollar will become unbearable and the cost of the many many imports that we depend upon will skyrocket.
It may be too late to take up on the slack that we have allowed over the years on our federal government's regulation over the financial system (Democrats included: Clinton allowed for the repeal of the 1933 Glass-Steagall act), but we may still be able to salvage a couple of hundred billions by assuring immediate oversight and demanding accountability over the actions of our 'representatives' in the coming months.
Most certainly though:
Carrboro, Chapel Hill, Orange County: we have to come together to become a resilient community quick! ... Local food, local energy, local economy, local resources.... local , local , local! ... after all these are ultimately the things that we have most control over! ... --though, this is our ultimate recourse we must also let Congressman Price know that the only way that he can represent us on the national scale is to not give away 700 billion dollars; contact him NOW:
| Washington, D.C. U.S. House of Representatives 2162 Rayburn Building Washington, DC 20515 Phone: 202.225.1784 Fax: 202.225.2014 |
Durham 411 W. Chapel Hill Street NC Mutual Building, 6th Floor Durham, NC 27701 Phone: 919.688.3004 Fax: 919.688.0940 |
Raleigh 5400 Trinity Road Suite 205 Raleigh, NC 27607 Phone: 919.859.5999 Fax: 919.859.5998 |
Chapel Hill 88 Vilcom Center Suite 140 Chapel Hill, NC 27514 Phone: 919.967.7924 Fax: 919.967.8324 |
Please check out Naomi Klein's clear analysis, synthesis and call for sane action.
Other RESOURCES: Any action must address our communities' needs. We have to uncover the roots of the meltdown, and impose guidelines make sure the solution will benefit average working Americans. For more information: Click here to read an interview with Columbia University Professor Joseph Stiglitz, Nobel Prize-winner in Economics and author of the The Three Trillion Dollar War. Click here for The Nation Magazine's William Greider's article on the bailout. See updates on the situation from respectable economic analysts at the Dollars & Sense blog. Read the Congressional Research Service's report on the costs of the war(s) here. Read bipartisan concerns about bailout in The Hill here.
Related OP article by 'Davepr': "What are potential local ramifications of current financial crisis to county and the towns"
Issues:
Comments
Congressman Price's unknowable stand
Just got off the phone with Congresman Price's Raleigh office. I was attempting to get an answer for how he is intending to represent his constituency on the bailout bill. I was reffered to CNN.com. I asked if CNN is currently reporting on Congessman Price's stand on the possible vote tommorow. Of course the answer was no.
To the question of whether there would be any announcement on Congressman Price's website for when he makes a decision the expected answer was also 'no'. This is reminiscent to the lead up of when congress sanctioned the war with Iraq; the obvious answer --for his contituents-- that he should vote 'no,' did not become Congressman Price's stand until after he had protesters sit-in at his office until the very moment of the vote.
At this moment the Republicans are outflanking the Democrats as the Democrats seem to have reached consensus with Bush on the latest version of the bill. Democrats, being the majority in Congress and having the toxic president in their favor, allow the Republicans to not get exposure from the fall-out that this give away will create. This will serve to distance the Republicans from 1) their incompetent President ... and 2) the Democrats in their irresponsible choice to spend billions of tax payer money on worthless junk.
Then come along Republican candidates such as BJ Lawson more progressive than Dinosaur Democrats in their message and before we know it, Republicans, after 8 years of criminal record, are back in control...
Whom to bail out?
A much better solution than buying up bad mortgage-based securities from financial institutions is to bail out the borrowers. If the government set up a housing voucher system which paid the difference between what a family can afford, and what their mortgage payments are now, then the family would avoid foreclosure or cruel skimping on necessities, the value of the mortgage-based securities would be restored, and the problem would be solved without incredibly complicated issues of how much to pay for bad securities and how the government can renegotiate mortgage terms to avoid itself becoming the forecloser. The cost of this would be spread over the term of the mortgages and not hit the Treasury for a 700 billion outlay now. The housing subsidy would benefit low and moderate income families who need help. It could use the IRS income tax return data to estimate what is an "affordable" housing payment, so the lower income people would get the most benefit, moderate income people some help as needed, and higher income people would have to make their full payments. The housing voucher amount could be adjusted annually on the basis of each year's tax return. And the capital of the financial institutions would be restored to full value so they could carry on their essential credit-giving functions, with legal restrictions to prevent issuance of new "bad loans." See my letter in "Economists' Voice" - electronic journal at www.beprress.com/ev/ vol.5, issue 5, article 9, which you can open free as a "guest" on their site.
Allen Barton, Visiting Scholar, Sociology, UNC-Chapel Hill.
Bail-Out Real Value: Mainstreet! (i.e. Carrboro, Chapel Hill...)
Thanks Allen for your detailed recommendation on how to help out people who most need it.
Continuing on your refocus, away from the national discourse prescriptions of bailing out Wall Street, David Korten explains how and why mainstreet is where real value resides.
Our Representatives in Washington should take David Kortens sound advice and the current Financial Meltdown as the que for implementing Korten's recomendations (anything short of this will guarantee the loss of my vote! ...THIS COULD HAPPEN AS EARLY AS TODAY):
Timing
Great idea Allen, but isn't there a crunch due to timing? It's been my impression that the underlying rush to set up this deal was to act before any additional holding companies could go under, taking home owners with them. In other words, if the holding company fails and no one picks up the individual home owner loans, then the home owners loan balance comes due now, not later. So the government buy out is to protect home owners, and the unfortunate side effect is to rescue the greedy CEOs. Fortunately, it looks like everyone agrees that there should be a cap on anything CEOs and other execs can take out of this deal.
Status of the bailout in Washington
Republicans of the house assured that the bail-out talks last night failed. The difference arose as the House Republicans want (unlike the current plan where the government is to buy out and own the banks) the government to provide insurance for private investors who are to buy out the failing banks. The private capital is to be incentivized with breaks on taxes for these investments. In essence it is still a buy out but one that assures that if there is any chance of a benefit it will be enjoyed by the crooks and not the taxpayers. And if there is a risk, the tax-payer will take up the tab.
Also, it is interesting that the Republican plan calls for:
These are all commonsense safegurda that are proposed when there is an attempt at protecting oneself. The problem is that the 'oneself' to be protected in the Republican plan are the private investors who created the problem to begin with.
To read between the lines between the Democrat and Republican proposal one understands that:
Republicans seem to have some guiding values: continuation of the ransacking of the system to the detriment of the everyday person and the benefit of wall street.
The Democrats on the other hand are like chickens with no head, suicidal for everyone. It would benefit them to take up valuing Main Street as opposed to incompetently attempting to salvage Wall Street for no ones benefit.
Bail-out Rejected by the House!
The bill that elicited skepticism, caution and reluctance except by the Administration, mainsream media, Wall-street and the people who continue to have faith in these credibility-bankrupted institutions, has failed in the House.
This failed resolutions was a Band-aid attempt to resolve the crises and would have only postponed the moment of the crises to a later date; with the taxpayers poorer and less capable of instituting the policies that will guarantee real change and a true solution for the benefit of most people.
More work is to be done and the locus for the problem should hone in on the sources; unregulated speculative markets that have spiraled out of control to the point that they now pose a danger to the whole world. Unfortunately, with the help of the propaganda machine, it may be all to easy to mis-direct blame (and consequently the energy needed for actual solutions) toward the fact that this Bill failed and that the crises is consequently Congress's fault. Let us view congress's action today as an action of courage, one that needs our support. Hopefully Congress may build some credibility capital hereafter.
Congress can follow Dennnis Kucinich's lead as he implies a direction toward a real solution:
Call representative Price and support him if he voted against the bill!! Support him to makea real solution!
Price supported the bailout
Why Price supported the bailout
Senate Vote Tonight! House Vote Tommorow!: Vote NO!
The same bill that was rejected by the House on Monday is up for vote by the Senate tonight. There have been some small changes but nothing significant when measured against the 700 billion that is to be given away to Wall Street. Something does have to get done, but not like this!
I've been calling Senator Dole's office (she is up for re-election) and it has been busy busy! Her offices are:
555 Dirksen Office Building
Washington, DC 20510
Ph: 202.224.6342
Fax: 202.224.1100
Raleigh Office:
310 New Bern Avenue
Suite 122
Raleigh, NC 27601
Ph: 919.856.4630
Toll Free: 866.420.6083
Fax: 919.856.4053
Check out the Neighborhood Assistance Corporation of America, they point out that "I'ts the Foreclosures - Stupid" .
House progressives are promoting:
http://www.seiu.org/2008/09/seiu-endorses-defazio-bill-to-address-financial-crisis.php
Tommorow the House will be considering the Wall Street Bail-out again. This may be an opportunity for Representative David Price to redeem himself on his aweful vote on Monday in Favor of gambling 700 billion dollars on the psychologic effect that it may have on the markets.
Call him tommorow! Call DoleTODAY!
Sammy, either you don't understand this bill....
As if
...there can only be one way to understand a complex issue like this? I don't think so, and I think that attitude is unproductive at best, Paul.
Well,
The Senate Bill:From the Claim, to the Actual, to an Alternative
Fred, in an attempt to make the bill more palatable to the voters (and by consequence safer for Representatives to support right before the upcoming election), the Senate version of the bill, as passed, includes some 'sweetners' in the shape of tax breaks.
According to estimates from the joint committee on taxation, these tax breaks may reduce federal tax revenue by $110 billion over 10 years. Specifically, these tax breaks are:
Some of the 100 billion worth in tax cuts will go toward boosting the real economy ( i.e. 18 billion worth for the green economy). Compare these 100 billion to the 700 billion to be used for buying up failing bank's toxic, abstract and unvaluable loans.
The point is that 700 billion for Wall Street will not go far as the amount of bad loans far exceeds this amount. The only value in providing these 700 billion to Wall Street is to postpone the inevitable bursting of the unsustainable bubble that the opaque, over-leveraged financial markets are. 700 billion towards creating a positive psychology for the markets could buy a brief, -fleeting- stabilization of stocks. Alternatively, this money could instead be invested in the real economy by investment in the green economy, creating jobs, providing money to the states and towns for infrastructure projects, developing local economies, etc...
I can understand how my one sentence, attempting to encapsulate the concept as elaborated above, could appear to be a 'clear [sign that I] don't understand what the bill does.' It takes more than the information as provided by NPR, CNN, Fox, Representative David Price, or Paul to serve as background to understand lonely sentences outside of the corporate norm.
Investing
"Alternatively, this money could instead be invested in the real economy by investment in the green economy, creating jobs, providing money to the states and towns for infrastructure projects, developing local economies, etc..."
The sad truth is that new green and/or sustainable businesses are no more likely to start up without loan or investment money than non-green businesses. The issue on the table isn't what kind of economy do we want to move to--it's how to rescue the banks and investment companies so that new businesses of any sort can start up. You can't penalize the people who've made all the bad decisions without hurting the rest of us.
Thank you. That's it in a
An informativet article
Anita, Terri,
Don't take my word for it read Joseph Stiglitz.
Joseph E. Stiglitz, a professor at Columbia University, was awarded the Nobel Prize in economics in 2001 and served as chairman of President Clinton’s Council of Economic Advisers. He is co-author, with Linda Bilmes, of The Three Trillion Dollar War: The True Cost of the Iraq Conflict.
You just don't get it, or choose not to
This may have started as a Wall Street problem, but "Wall Street" as we know it is gone. All the major investment banks have been aborbed by others or become regulated bank holding companies.
The sytem is frozen: when even muni bonds can't be sold (see Anita Badrock's post below) we have a big problem. Our economy depends on credit, for good or bad and it is not changing anytime soon. These credit market is frozen and it is this market, not the stock (equity) market that is the focus of this bill. The stock market may go up and down, but it is just a reflection of what investors see Congress doing (or not doing), it is a barometer of confidence at this point, but otherwise irrelevant in this debate.
This is not the best alternative, but often our in system choosing the best of bad alternatives is the best we can do now.
If we don't do this, all those programs you speak of that should be done won't be done because there will be no money for them at all. And that will be the least of our problems.
You are so blinded by your hatred of "Wall Street" that you are willing to let Main Street go under to prove your point.
Fortunatly, at least judging from comments on this board, you don't have very much support.
My position is driven by pragmatism not hatred toward any entity
800 Billion dollars (700 for buying bad loans + 100 billion in tax cuts) is the same amount as has been spent on the war up until now. This is a lot of money! This is not the best of bad alternatives, it has been the only alternative considered, though, by the mainstream.
The reluctance to use 700 billion toward taking bad assets off the books of selected banks stems from the fact that the problem is so out of control that this measure is not enough and ultimately a waste of a lot of money that could be instead used in better ways.
If 700 billion is not enough as is the case, then the 700 billion will have been spent in vane and then we really will be left without anything with which to do anything with.
Through the banking system exists mosts of the power to excercise control. We are at a point where the banks must be taken over by the banking regulators. The regulators would then have the opportunity to go through the banks one by one. They could identify the actual state that each bank is in and accordingly either put them in a workout plan that forces them to shed some of their liabilities and also start behaving properly or shut them down and force them to sell.
Alongside the take over of the banks, the 700 billion could be spent on big spending projects to stimulate the economy.
Pragmatic?
You are being pragmatic? Really? Where? You are being ideological and that is your right, but don't call what you advocate "pragmatism" because if you think Congress or the Administration would go along with nationalizing the banks, you are really out there in the ozone.
Now, it may come to government ownership of the banks if things get bad enough. If not this, then the government may take some (voting) equity shares, perhaps even controlling interest in some. I hope we can stave that off with this rescue plan. It may not work at all, we don't know, but we DO know what is very likely to happen if we do nothing: global economic collapse.
To his credit, David Price knows this. Thankfully, he is our rep and he'll do the right thing for the country, despite the political heat from the far left and far right.
Yes, pragmatic in understanding the best use of 700 billion
Pragmatic in understanding that things are bad enough that 700 billion towards the Paulson plan is at best a gamble with the odds against us.
For a constituent of a democratic representative system, when talking about the relation between constituency and representative, pragmatism as applied to what is to be the most likely stand of a politician is less significant then the wishes that the constituency might have. In a democracy, it is the politician who should be pragmatic with respect to the wishes of the constituency not the other way around. Understanding this, the constituency should take a stand relative to what is best and not necessarily for what is possible. The politician should work within the parameters as set by the constituency, not the other way around.
Last Monday, in a rare example of democracy, due to the significance of this legislation and the fact that all members of the house are up for re-election very soon, there was bi-partisan support against the bail-out. Most Representatives were wanting to vote for the bill but couldn't because there was a real threat to their getting re-elected.
I'm all for democracy...
....if folks want to follow your lead and punish David Price for his vote, so be it. I am certainly glad we have a rep who is willing to lead and not follow. By your logic, the members of congress who supported segregation and denying voting rights to blacks in the 1960s were doing the right thing, because that is what the majority of their constituents wanted them to do.
Of course a rep needs to listen and consider all views, but in the end, he or she has to do what he or she thinks is right, no matter what the public opinion. And I might also point out that public opinion shifted pretty quickly from "no way" into believing we needed to do something; losing 8% or so of your nest egg in one day has a way of doing that and most folks, well over half, have some sort of investment fund, either individually or collectively, mostly invested stocks and bonds.
You continue to mischaracterize this economic recovery plan. The way you explain it, Paulson will open the government checkbook and write a check for $700 billion to "Wall Street." First of all, it is now $350 billion, secondly, it is not just money given away, we are BUYING ASSETS and despite the conventional wisdom, it is not all, or even mostly, "toxic junk." At the very least, most mortgaged properties have a land value, even if the improvements to that land are now worthless. Secondly, many of these troubled mortgages are newer homes which have lost some, but not all or even most of their value. So someone may have say, a $400,000 mortgage on a home now worth $300,000 on the market. Maybe the government buys it from the bank for $350,000. So the bank is out $50,000 but they are $50,000 better off than if they sold it privately. More important, they have $350,000 they didn't before. The government is out $50000 now, but several years from now, it may be worth what was paid or even more, possibly less, but it isn't likely to be worthless or even close to worthless. So, in the end, we might acutally lose say $100 billion of that $350 billion plus the interest to carry the borrowed $350 billion (about $15 billion per year). We MIGHT even make money, although most economists appear to doubt that, but it is possible.
This plan is like a self-fulfilling prophecy: if we buy these assets now at more than their depressed price, but less than the original value of the mortgage, this will by itself cause property values to rise again, not to levels they were before, but somewhat higher.
Might none of this work? Of course. But at the risk of less than 1% of GDP, it is a chance we have to take because just about everyone who is an expert here, public or private sector, says we need to do something like this, and the Senate bill is what passed. So the choice of the House is up or down on this vote, no need to debate what might have been.
The next President and Congress have a huge job to do sorting out how we got here and making sure we don't do it again. Same with Iraq. But now, at this point, we need to put out the fire, we can find out later who caused it.
which is why I said one Democrat's opinion, Ruby
Furthermore it appears to be Sammy is not making an effort to understand it, he's demogoging it. And strange you say nothing about the "productivity" of Sammy's "Price bashing."
A Better Alternative and Ten Reasons Not To Bail Out Wall Street
There is an alternative to the bill that has already been rejected by the House (but was passed by the Senate last night): The No BAILOUTS Act
Please consider these Ten Reasons Not To Bail Out Wall Street
Call Your Representative. Vote Happens Today 12:30p.m.'VOTE NO!'
The house is at this moment debating the bill on the House floor. Call Representative David Price and ask that he vote 'NO'.
Tell him any or all of these reasons to vote against this bill.
Putting aside the fact that there are better ways of spending 700 billion dollars (in the real economy) instead of through a broken and corrupt system, in this bill; 1)the supposed oversight aspect has no teeth, 2)the recouping of the money spent is left open for weakening and lobbying against when the President is supposed to creat a solution to this loss of money if a loss is assesed in 5 years time.
Ask him to vote for the saner alternative the No BAILOUTS Act.
Phone: 202.225.1784
Phone: 919.688.3004
Phone: 919.859.5999
Phone: 919.967.7924
Sammy, where is this other bill?
Correct Link to information about the No BAILOUT Act
Sorry, the link above is incorrect.
The No BAILOUTS Act
http://www.seiu.org/2008/09/seiu-endorses-defazio-bill-to-address-financial-crisis.php
The House passed the bill!
And ...
The measure passed the House by 92 votes, 263 to 171.
... Representative Price voted for it again.
... Representative David Price voted for it again! Stocks drop as concerns linger.
How they voted:
YEAS NAYS
DEMOCRATIC 172 63
REPUBLICAN 91 108
INDEPENDENT
TOTALS 263 171
There is a better than slim chance this will work
We will be buying securities tied to mortgages, these aren't worthless but no one will buy them at any price now and only the government is big enough to buy this bad debt and hold it. By doing so, the government will likely recoup much, if not all of the money laid out. We may even make a profit and also should be able to help homeowners still there (and many are not, many of these homes are likely vacant and the owner is long gone) since we taxpayers will own the mortgages underlying these securities. Unfortunatly, the relief may come through bankruptcy, with judges allowed to modify mortgages, but we may have to live with that, there certainly will be lots of pain, no way around that.
I trust Barney Frank here and he and the other Dems, including David Price I am sure, have forced Paulson to accept warrants, oversight and limits on excessive exec compensation.
This is not a manufactured crisis, nor will it save Wall Street, Wall Street died this week. It might save the global economy from collapse. If we do not do something similar to what Paulson proposed and the Democrats improved, we could see a meltdown.
Concuring with what Paul
Concuring with what Paul said. There is an international component to this situation that has to be addressed. It's isn't just about mortgages anymore. We rely on and cannot do without cash investments from other countries who finance our debt for us. If they start pulling out their money because they do not have confidence in our economy, it would be a catastrophe.
Looking beyond today's news
It seems clear that our economy is on shaky ground and we will continue to feel the ill effects. The rising cost of energy & fuel will compound the screwed-up banking & financial sectors.
We need to fully commit to locally-based sustainable business growth, with a special emphasis on agriculture and local energy-efficiency & renewable energy. Self-sufficient communities will weather the uncertain future better than those who continue to embrace the traditional bigger-is- better grand economic schemes.
This means rethinking big box shopping centers, Carolina North, and a new airport.
Mark Marcoplos
This is not a bailout of Wall Street
It is an economic rescue plan, but it was not presented as such until too late. Folks on both the left and the right got riled up and focused only on "bailing out Wall Street" not hearing, I guess, from people as diverse as Barney Frank, Hank Paulson, George Bush and Ben Bernanke that this was necessary and very very soon. We see from the stock market decline yesterday how hard this hit Main Street in just one day, a lot of that over $1 trillion in lost market value is contained in pension, insurance and other investments held by the broad middle class. Wall Street execs have plenty of money already in their personal accounts, I'll bet, they can ride out a depression, Main Street can't.
From a political perspective, Bush bungled this terribly, and let's us remember it was an administration bill, Democrats didn't lean on their members, the GOP leadership promised more votes and didn't deliver, enough blame to go around for why it failed.
But something like it must pass and it can't be so punative that banks and other financial institutions will not participate. That doesn't mean there will not be oversight, or does it mean that there will not be some caps on exec compenstation, or some (limited) assistance for those facing foreclosure, but these conditions can't be so burdensome that these shaky financial institutions just throw in the towel rather than particpating in the program. Wachovia was just sold for $1 per share, it might more economic sense to go belly-up at that value if conditions are too burdensome and the institution doesn't feel it can turn it around.
And finally, thank you David Price for your courageous vote to support this, despite the popular opinion.
Funding the library is pretty main street to me
Comment moved
Agreeing with Paul's analysis
Agreeing with Paul has been rare for me. But he has got it right. Nobody wants to do this but not doing it is worse. My parents told me about 1929 and living through the 30's. We could be going there again if we do not act. What we have here is a much more pervasive problem than the S&L crisis which ended up to be a pretty good bet in the end.
Let me also point out that while Wall Street has been criminal in their actions and this administration complicit, we do not talk about the bad financial habits of much of main street. Although enticed by clever marketing and lose credit, much of the public still bears the responsibility of amassing mountains of debt, spending their future on over the top life styles that they could not afford.
The passage of this bill will soften the blow but no eliminate it. Credit will be there but in no way like it was. There is too much consumer debt for the consumer driven economy to return to its recent past nor should it. The trade deficit can not continue on its current path and the huge increase in National debt will slow down the fulfilling of most campaign promises. It is going to be a tough road for the next President and America.
However, good times do not last and bad times don't last forever either. With some sane leadership and some changes in behavior we will recover. It will take some time.
consumer debt
According to Elizabeth Warren, law professor, and Amelia Tynagi Warren, economist the average two income family in America is spending 75% of their income on the mortgage, health insurance, transportation, taxes and child care.
That was health insurance. That does not include health care - co-pays, deductibles, uncovered dental and vision, the percentage of which people pay is ever increasing along with insurance premiums. It does not cover college savings or retirement savings or life insurance or student loans. That along with groceries, household maintenance and repairs, car seats, clothing and shoes, classroom supplies, field trip fees and anything else has to come out of the other 25%.
We also just had a recession during which many families lost one of their incomes temporarily or permanently that covered part of those 75% of expenses.
Given that information, I get a little tired of hearing about the prolifigate spending of "Main Street" and how if we put every barrista in America out of work no one would have any debt. I know working mothers with small children who feel guilty about getting root canals because obviously if you can't pay for it out of that 25% it's an indulgence.
I am no way downplaying tough times.
I am in no way downplaying the tough times lots of folks have had just making the basic bills. I am in 100% agreement that our current health care system in this country could end up bankrupting all of us. However the facts are that we have huge consumer credit card debt out there. In lots of those cases it was the only way to meet necessities. Unforeseen circumstances e.g. medical expenses, family crises, create unexpected massive expenses. A real helping hand is required. Lots of folks are hurting to no fault of their own. Bankruptcy laws are too tight.
However far too often for far too many people,(not all people) that spending has been on items that have more to do with life style choices than necessities. By the way this applies to people at many different income levels including 6 figure incomes. (The 5000 sq ft house instead of the 3000 sq ft house. The BMW instead of Honda, multiple flat panels, over flowing walk in closets, etc...) Wealth should not measured by what one owns but by ones ability to live and save within their means and the ability to survive a crisis with out going under. Just because your neighbor appears wealthy by what you see in their driveway does not mean they are on solid financial ground
Again, Wall Street, the banks and Madison Avenue pushed the "high life". People were scammed and manipulated. Credit card companies set traps. And none of us is totally immune from marketing.
We do not provide for basic life financial training in our high schools. It should be mandatory. And maybe available to anyone for free. Denying this problem exists does not help anyone.
We can agree here--we've had
We can agree here--we've had a voracious appetite for consumption, and we are paying. But life financial training starts at home. We are entirely too willing to let other people teach our kids the things we should teach them ourselves. Of course, if the adults never learned basic skills, or if they have no self control, then it's hard to impart those things to their kids. Call me old fashioned, but I think looking at institutions to teach basic life skills is a sad commentary on how easily parents have ceded their responsibilities to others.
Anita, I agree that home is
Revenge
Interesting story on Marketplace this afternoon. They interviewed a behavioral economist who explained that getting revenge is perceived as a "reward" for the average human. That was his explaination of why so many are willing to vote against their own best financial interests in order to punish the people on Wall Street:
Any local colleges?
Does the sun rise in the east?
Forgive me but I just have to share what the republicans are putting out on emails about the economic crisis.....enjoy:
"Written by Jerry Teasley of Pine Mountain , GA former Banker
Most of my friends know, I have tried to stop thinking, but I can't help it in the wake of all the recent economic news.
My banking career started in 1970 and ended in 1993, but I still keep close ties to the industry. During my banking years I did learn one or two things along the way. The problem with our economy today is from a liberal thinking congress, senators, and presidents, as well as greed and dishonesty. When you put these together it spells disaster in any area of our life.
Ask any banker (just walk in and ask one that has been there for 15 or 20 years) and they will tell you these are the FACTS:
* Under Jimmy Carter we received the Community Reinvestment act. This law says banks have to make loans in low income areas and it has forced many lending institutions to seek to make loans to people in areas that lenders would not normally go because of the risk and low property values. (Sub Prime Loans). This was in 1977. In 1980 president Carter and a Democratic controlled congress passed the Depositor y Institutions Deregulation and Monetary Control Act-- The law also removed the power of the Federal Reserve Board of Governors under the Glass-Steagall Act and Regulation to set the interest rates of
savings accounts. A Sad fact is we are all still feeling the effects of his policies and decisions 30 years later.
<http://en.wikipedia.org/wiki/Glass-Steagall_Act
<http://en.wikipedia.org/wiki/Regulation_Q
* Then in 1995, Bill Clinton, (in between interns) made changes to the Community Reinvestment Act, that forced an increase in the number of loans to these people and the aggregate dollar amounts loaned.-- Larger loans to people with less income in areas where the collateral value would go down instead of up. ( Clinton should have had his mind on the long range effects of this instead of Monica and a good cigar.) This was in response to pressure from "community organizer." Can you think of a former Community organizer running for president? Hint - he's a Democrat
* In 1999 Mr. Clinton signed to repeal the Glass-Steagall act which had protected taxpayers since the Great Depression.
* In 2003 President Bush tried to propose a change in regulatory control over Freddie Mac and Fannie Mae and place both companies under the control of the Department of the Treasury, but was voted down by the liberal democrats led by Barney Frank. Remember the name Barney Frank, he is one of Obama’s top two economic advisors the other is Jim Johnson who was the head of Freddie Mac and walked away with $24,000,000.
* Now, Mr. Obama and his liberal cronies are spinning the facts so you will believe that all our financial problems are because of Bush's failed economic policy. However, OBAMA’S two MOST TRUSTED ECONOMIC ADVISERS TO HIS CAMPAIGN are the very people that were in control of Freddie Mac- Jim Johnson $24,000,000 and Fannie Mae - Franklin Raines $90,000,000 in 6 years). In addition, since 1989 their have been several politicians who have received 0D campaign donations and kick backs from these two failed institutions. The #1 recipient is Senator Chris Dodd-D RI and the runner up is none other than Senator Barrack Obama who received the second largest amount of donations (over $500,000) which is phenomenal because he has only been in the Senate for 3 years.
When Enron went belly up,20we demanded Senate hearings and investigations. Why aren't the Democrats demanding the same with these companies?
But, oh yeah, I forgot. It is Bush's fault! (Yeah, Right, Sure it is). Just ask a Banker."
Another Opinion
Great read!
Thanks Fred, sent url off to my email sender of the above trash but think I'm just wasting time. The Rove machine never stops, even if Rove is slumbering.
Thanks Fred. The real
Thanks Fred. The real problem is these crazy investment instruments that people just make up and sell. When a company like AIG cannot accurately assess the risk of a credit default wrap or the traunches they're cut up into, how can a small investor possibly understand the risk?
It's time for those cowboys in Washington to take their guns and go home. They have just about hunted the American dollar to extinction.