To Nationalize or Not to Nationalize

In essense, we already have nationalized some of the world's largest banks. But I'm glad to see Congress finally stepping up to do something about the ongoing mismanagement of our financial credit system. When you bail out a company with funds, without which it would go bankrupt, there's a word for that. You just BOUGHT it.

The country owns these financial institutions and it should run it like it does.

I for one, think that the Bush Bailout Bill (BBB) was his last big F-U to the American public on his way out the door. His administration made SURE that executive bonuses would be paid at least one last time. On the other hand, I blame Obama for not canceling those bonus contracts the minute those funds hit the bank.

The way I look at it, I paid more than $30K in taxes this year in the form of lost retirement funds, and I'll be damned if that money should go to pay a $5000 bonus to a freakin' receptionist who had the dumb luck to get a job at a criminal enterprise. I don't care how big the crocodile tears are that she sheds.

Give me a freakin' break already.

On the promising news front, the Pope has stopped dispensing medical advice.

I KNEW it

See, I've been saying that deflation in the oil and gas department has everything to do with the economic slowdown and its effects directly on China and India. At last, the New York Times offers some corroboration. When Americans and Europeans no longer desire (or can afford) the largely cheap luxury goods (in the sense that we don't NEED them) that are produced in China and India, they close factories, transportation (read: export) dwindles, and global demand for fuel falls.

This is the ONLY explanation I can come up with to explain why I was able to purchase gas for $1.86 the other day.

The upside of a recession: a lesson from experience

I used to make a good living. I was an editor and a manager with a stable job and a mid-range salary. Probably could have finished out my career without much challenge. Sure, I was bored. Probably would have left that job for something a bit more challenging eventually. My great plans got sidetracked when my life fell apart. My husband went rogue, became erratic, and--dare I say--dangerous. Enter the lawyer. Got a divorce. Lost my house. Tried to hang onto my life, but harassment by the ex led me to the inescapable conclusion that the only thing to do was disappear.

So disappear I did.

Quit my job. Moved. Moved again. Moved yet again. I'm no gypsy, but I realized it was going to be more difficult to track me down if I kept on the go. Maybe it was overkill. At the time, I didn't think so. Went back to school. In three short months, I went from stable life, stable job, decent mid-class income in a city that I loved to no life, no job, and no income living in a place that I consider to be slightly better than a pig farm. I haven't really seen much improvement in any facet of my life in the past eight years. Granted, I have chosen to pursue this degree thing and so what has happened to me in the past decade is my own doing.

The point is, my life took on a very different economic reality when I went from earning an income, putting away money in a retirement fund (which is virtually non-existent given the events of the last year) with full health benefits, to scared to freakin' death that something terrible might pop up in my health before I finish, scared to death that my car is going to give out, scared to death about the repayment of these student loans. I can work myself into a real panic if I think about it too seriously.

There is an upside. I have learned that more than 50% of my spending in those days was unnecessary. I have learned to do without things I don't need. Oh, I do have my splurges, but they don't come daily. They come monthly. I don't need matching table linens and curtains, knick-knacks, collectibles, dinners out...the list goes on and on. I will never waste money the way I did back then. In reality, I won't ever be able to even if I wanted to. My life is cash-strapped to the end. And yet, I still choose to pursue this schooling. I must be insane. Or I'm just too afraid to allow those student loans kick in.

My point is this. America may actually find itself in my shoes. Americans may find themselves without that disposable income for long enough, spending patterns will change. Attitudes about spending will change. The average Joe will see the need for a healthy savings account. This cavalier attitude about carrying such great debt with an unfailing belief in our ability to meet the minimum payments will not be something that just I sweat, but that most American's sweat.

Is it Really Corruption on Wall Street

...when Wall Street is operating within the law? I haven't heard one expert accuse Wall Street professionals, as Sarah Palin did in the debate, of criminal activity. There was nothing illegal about anything they were doing. The only thing criminal here was that these businesses were given free reign without regulation or oversight that would have tempered the poor investment decisions and excessive risk that were packaged in these mortgage-backed derivative instruments.

But for Palin to call the pursuit of capital and profit in legal (if not poorly understood and ill-advised) investment instruments "corrupt" is ridiculous when it is the Republican/conservative approach to economics to get government out of the regulation/oversight business.

This economy is the most important issue in this election right now. It is the reason that no Republican deserves the vote they are asking you to give.

All Poltics Is Personal

I have a brother in prison. You probably wouldn't believe it if you met him before. He is charming, gregarious... a great storyteller. He was popular in school. He was successful at work. He is a family man. He made a mistake. One very big, life-altering mistake. My brother drove drunk and killed someone. When I explain to people how I came to have a brother in prison, no one feels sorry for him. Even I find it difficult to feel sorry for him. He rightly has to pay for his poor judgment.

My brother has in him both the best that we look for in ourselves and the worst. He worked hard his whole life, and I do mean hard. He was ambitious. He did everything he was supposed to do, right up until the day he went to prison. He worked the last week before he went in to provide as best he could for his family. A family that hates him now, I might add. A family that thinks he did this to them. On purpose. They think they are the victims. I find them quite laughable, actually. There is only one person in a casket. The rest of us are pretty damn lucky if you ask me. But I digress. He pled guilty. He accepted his sentence and is doing every day of it.

But this isn't a story about my brother. Not really. This is a story about all of us.

I am not ashamed of my brother. I tell his story often as a lesson and a warning to others. Because few of us are without sin. If we are honest with ourselves, I think most of us should be reminding ourselves: there but for the grace of God, go I. Who hasn't stretched the limits of sobriety and driven? Who hasn't engaged in risky sexual behavior and breathed a sigh of relief to learn you weren't: 1) pregnant or 2) going to die from some awful STD? Who hasn't done something, sometime, that could have resulted in disaster? and most of the time, we get off scott-free. There's that big Whew! moment when you realize that fate was denied. But there is a difference between my brother and most people. My brother did this behavior over and over again.

I hope my telling of my brother's story teaches others the same lesson it taught me. The law of averages works. If you engage in risky behavior often enough for long enough, something bad is going to happen.

Which brings me to our current economic woes. Whaaaaa, you say? Well, as I see it, members of the financial community engaged in very risky behavior for a very long time and they did so not to feed an addiction (such as alcoholism) or for sexual pleasure, but rather for the love of money. And they got away with it once. Then twice. And then their confidence turned to cockiness. Just like my brother, they gambled with other people's safety for their own selfishness. And they did it long enough and often enough, until the bad times came home to roost.

Most people who gamble short eventually meet up with a fella named Fingers or The Nose, or Crazy Vinny. Men who remind gamblers that there is no free ride. I guess because these short-sellers are Wall Street elite, we are supposed to feel sorry for them and call off the dogs? Instead of paying for their own sins, we are going to pay for them.

What makes these people so different than my brother? By what rights do they walk away without consequence? By whose authority do we not only forgive their bad behavior, but also reward them with more money for f***ing the rest of us to hell?

George W. Bush's authority, that's who. He's got brass ones, I'll give him that. The same man who brought us non-existent WMDs as an excuse for an open-ended, unprovoked, illegitimate and ultimately immoral war in Iraq. The same man who has failed in 8 years to bring the money behind the 9/11 attacks to justice. The man with a C average in history at Yale.

Earlier, I made allusion to the fact that Wall Street elite seem to be acting like the robber barons of days of old. I don't think this is an exageration. Concentrating decision-making in the hands of a few (or in this case, one!) individuals is a risk that I am not just uncomfortable with, but that I think is a threat to the republic. There can be no good to come of this.

Now I don't claim to be an economist. I don't understand the larger ramifications of a bailout or lack of a bailout, but I am a pretty astute judge of human behavior every once in a while. It makes no sense to punish some and reward others for what is ultimately the same behavior. I don't think you trust the coyote to run the hen house. There are good people left in America. Trustworthy people. People who have proven their worth. Can we really afford to put our fate in the hands of a man and his cronies who knowingly lied to us about so many things? Oh no. Hell to the no.

It is absurd. We can't afford absurdities in a crisis. I will believe in this bailout when George W. Bush steps back from it. When he doesn't have a single ounce of influence in it.

There can be no blank check. Not ever. Not with this man.

Open Thread on Bailouts of the Securities Industry

The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities.

Allan Greenspan in The New York Times

All this recent huggabaloo about the bailouts of Freddie Mac, Fannie Mae, Lehmann Bros, and now a broader bailout that assumes that the industry is about to collapse.

I have to admit, I believe that the economic problems are a national crisis, and I am not above spreading the damage around. We all benefit if the economy turns around. However, I am concerned about the enormity of it. I worry about the long-term implications. And I'm not the only one. more than a bit miffed about things like CEO salaries, especially when they do things like run companies in the ground and leave in disgrace (well as much as one can with a disgustingly large golden parachute package). I am pissed that those with the funds to invest in companies are reaping ALL the benefits on the backs of the workers who are receiving declining benefits and real wages. This is a lop-sided arrangement that has been perpetuated since the gilded age following the Industrial Revolution and has only been slightly modified (through civil unrest) to be slightly more favorable to American workers.

But I suspect that this bailout is far more reaching. And once again, it is disproportionately going to be shouldered by the American working class. It's a classic case of privatizing profits and socializing risk.

I am a biologist. I know embarrassingly little about economics.

I did hear an interesting idea wherein the banking industry is required to pay into an "insurance policy" against failure. I wonder what people with some understanding of economics think about some of these kinds of ideas. And so, I am opening up the discussion to you. Here is your chance to educate me. Spout off about your concerns. Invite your economist friends. Invite your CEO friends. Invite your political friends. Invite a Republican or two. Spread a little education around.

No fist fights, please.