Now, just to keep everyone up to speed. Last week the Big Three Automakers went to Washington D.C. asking for $25 billion to get their companies through the ‘economic crisis’. Instead of help they got spanked on CSPAN and sent back to Detroit to redo their homework. They are required to present a compressive plan for recovery to Congress by Dec. 2nd before anyone will consider giving them any money. Then over the weekend Citigroup (a fine financial institution) got approved for another $20 billion hand out (on top of their previous $40) PLUS the government is guaranteeing over $300 billion in assets. No questions. No public spanking.
Anyone else think this is odd? Apparently Rachel Maddow (Cable news Superhero) does. And she is much more articulate than I am.
“The tale of two Bailouts”
Rachel Maddow on MSNBC is my new favorite. She’s funny, witty, and just sarcastic enough to hold my attention.
However, to prove I am not getting ALL my news from late night cable here is an article in the Economist about Hank Paulson and Friends latest attempts to stop the sky from falling. These guys are handing out money faster than the Federal Reserve can print it. And that is exactly what they are doing. Printing money. Now I’m not an expert, but doesn’t just printing more money make it all worth a little bit less? I can’t help but remember reading about bread lines in the Soviet Union before it fell of people showing up with a bushel basket of rubles to buy one loaf of bread. But that couldn’t happen here in America… right?
I do have a question for myself though… why do I keep following all this depressing news?
You know why people watch car racing? To see an accident.
You know why people watch hockey? To see a fight.
You know why I keep watching the economic news? To see a disaster.
I can have no more hope to effect the economy than I do to prevent a car crash or a hockey smack down. It is out of my hands. The next year or so is going to be a mess so I’m popping a big bowl of popcorn and sitting back to watch the show. I just hope this isn’t one of those Art House films where everyone dies in the end…
Okay, the election is over. Its time to focus on other things… and right now the biggest issue is the economy. The stock market is fluctuating everyday with the DOW hovering in the mid 8000’s. Jobless rates are going up. Sales in the retail market are tanking and expected to go down further. Home foreclosures are up and home values are down. And of course the Big Three automakers here in Michigan are about to tank if they don’t get a little help from their friends in D.C. (lucky for them Washington has set a precedent of tossing lots of cash around just recently).
Arianna Huffington has a good post about the current economic situation at her site. It is short and I recommend it for a quick recap of things as they are.
Want a little more info? How about the big G20 summit taking place in Washington DC this weekend. World leaders from 20 different countries have gathered here in the United States to attempt to formulate a united strategy to deal with what is a global economic crisis. Anyone feel better knowing it isn’t just America in trouble? Yeah, me neither. If I were a paranoid person I would start shouting things like New World Order and Illuminati agenda! But there is so much disagreement about HOW they should handle things that it is doubtful (to me) they will figure out a solution to the current situation let alone redraw the globe into a new Fascist Utopia. Some countries however, like China, may actually come out of this situation more powerful than ever before bringing global changes as yet unimagined.
Now for something a little closer to home… Detroit and the Automakers. Living in Michigan this is an in your face issue. Absolutly everyone knows someone that will be effected by whatever eventually happens to Ford, GM, and Chrysler. All three automakers have made bad management decisions that have lead them to be extremely vulnerable to the larger economic crisis. Of course this is a situation of their own making, but the consiquences of denying them the $50 billion they’ve asked for from the Government is far reaching. Estimates of 2 to 5 million jobs could be lost. The loss of tax revenue alone would be devistating. As much as I’d love these companies to have to eat crow for their bad decisions and let the “Free Market” wipe them out it may be a case of cutting off our nose to spite our face.
For anyone paying attention though none of this should come as a surprise. The housing bubble, easy credit, and stagnant wages are just a few of the warning signs that have been creeping up on us for years. Much like a cat creeping up on its not so unsuspecting prey…
November 4th 2008! Its finally here! All I can say is thank f*cking god!
We just need to get through election day and night. I will be watching the news and checking online for updates all day. Here are a few sites I will be frequenting plus obsessively watching any and all television coverage (I intend to watch MSNBC, Fox, CNBC, and CNN like a hawk).
With all the chaos in the world over the economy and the election and who knows what else, people are confused about what to do. Cash in my 401k? Vote for Obama or McCain? Buy those cool new shoes I saw at the store last week?
Worry not fair blog reader. Decision making help is here from Ask a Ninja!
… wear a hat because pigs are flying and you just KNOW they will eventually crap on us all.
Where to begin? There is so much going on right now that Willow has begun hitting the catnip to cope. Presidential Campaigns on hold. Gigantic financial bail outs for people who already have more money than the rest of us. Washington Mutual taken over by the FDIC. Bush gave a speech and nobody cared. The Democratic party rushing to push through Paulson’s Bail Out plan with only a few modifications, but the Republicans are stalling.
My head is spinning.
What I do know for certain is that this sort of debate, mostly open to the public, is great for our democracy. I think I’m just in shock though because I don’t remember ever seeing it before.
And if debate slows this process down and gives us a little more time to think maybe more idea’s could be brought to the table instead of just going forward with Paulson’s original plan. In fact here is a link to an article where the author, Robert Kuttner, makes a suggestion that is in line with some of my earlier thoughts. Instead of using that $700 Billion to buy bad debt from Wall Street why not buy up the original mortgages?
Here is an excerpt:
Paulson’s approach is top-down-rescue the banks. But it’s actually more efficient to rescue the homeowners by stopping the foreclosures. Refinancing the mortgages would allow the bondholders to recoup some percentage of their investments. For a lot less than $700 billion, we could refinance every mortgage in America that is at risk of foreclosure. Along the way, we could keep people in their homes and shore up the collapse in housing prices. Paulson’s plan does neither. Markets would begin loosening up, as in Paulson’s plan, but the route would be bottom-up rather than top-down. Homeowners would be the primary beneficiaries rather than the incidental ones. With Paulson’s approach, the wave of foreclosures continues, reducing the likelihood that the government gets its money back.
With all this going on here in America I wonder what the rest of the world is doing?
Time seems to be of the essence here and even George Bush is addressing the nation tonight about this situation. (I’ll be commenting on THAT tomorrow for sure) And McCain has suspended his campaign during this crisis (think he knows something we don’t?).
Whatever your take on this issue is I think it is important that people make sure their voice is heard.
Here are links for the Senate and House of Representatives where you can look up the name and contact information for your representatives. Don’t forget they work for you.
The biggest current event still making the news is The Economy. Just in case you’ve given up watching the news, yep, its still bad.
If the Wall Street shocks of last week weren’t shocking enough this week we have the proposed “cure” I had been fearing. The head of the U.S. Treasury, Henry Paulson, is proposing that he and his department be given an open account of $700 Billion of tax payer money to buy up bad debt from Wall Street in order to stabilize the economy. (Here is a link to a ‘fact sheet’ available on the Treasury departments web sight that explains what he proposes.)
This will supposedly free up banks to keep lending money to each other just like they have been and life as we know it will continue like this was all a bad dream. Unless of course this DOESN’T fix it. Or if the Treasury can’t ever make the money back on all the bad debt they buy. In which case they will have gambled away America’s future. Call me a chicken, but I doubt I would put the cash from my checking account on the line to buy the junkiest stocks on the market. But I’m frugal that way.
As of this afternoon though it is looking like Congress will approve the proposal. There are a few people in congress who seem to be keeping their heads on enough to at least ask a few good questions before rubber stamping this thing. Rep. Defazio (D-Oregon) spoke today about the issue. Maybe this bail out has to happen but I am glad to know that at least one of our representatives is asking serious questions now before it is too late. I hope that Congress doesn’t cave to the pressures of Wall Street and the White House to let this bill pass without putting in place a few restrictions rather than letting one man go on a $700 billion shopping spree at Wall Streets Dollar Store.
At this point everyone is screaming it doesn’t matter HOW we got to this place we just have to FIX IT! For me I would really like to know how it happened and how to keep it from happening in the future. And just maybe in a perfect world some of the people and companies that committed the most outrageously bad deals will get their come comeuppance. For now though I’ll settle for more information. There is a good interview from BIll Moyers Journal on PBS with Kevin Phillips. His book is BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM. I haven’t had a chance to read it but would like to. From the interview it seems he is very honest and clear that this is not a case of the Dem’s are at fault or the Rep’s are at fault. BOTH parties have laid the groundwork for our current crisis over the past 30 years as we shifted from a Industrial based economy to a Financial based one. Just as soon as I get a library card I will be picking this one up… goodness knows I can’t afford to BUY a book and I’m afraid of credit! Oh no! Maybe I’m at fault for the failing economy?
Which brings me to my last point. Today the talking heads on the financial news channel CNBC have begun shifting in tone. It was subtle, but today it seemed as if they were trying to move some of the blame for this problem to the American people. That the public enjoyed the booming economy by taking such outrageous advantage of the unprecedented glut of easy credit by, gasp, buying houses and cars that run. Or taking their family’s to Disney Land. And dare I say that the selfish citizenry believed it when they were told they could have a bigger limit on their credit card to buy into the vaulted American Dream we have all been told is ours for the taking. But now the credit is drying up and we have no right to just blame the powerful Wall Street movers and shakers who have made MILLIONS of dollars, bought dozens of homes, and flown in private jets to private islands. The American Public and the New Super Rich finally have something in common: a gigantic reality check.
I was going to change the title of this blog to Eileen and Willow’s Political Blog but I’ve decided that is too limiting. Instead it is going to be a Current Events blog. Over the past few days the much bigger news story has been our ‘economic meltdown’ not the inadequacies of our future leaders (although one is directly tied to the other).
As most know, unless you live under a rock, there have been huge shake ups on Wall Street with large corporations doing so poorly they are either filing for bankruptcy or being bailed out by the Federal Government. The causes of all this have been years in the making. Deregulation deemed necessary for American business to stay globally competitive have systematically loosened the rules under which Companies could operate. With fewer rules to constrain them large banks went out and created new and better ways to make money. And we have ALL benefited from it. Unfortunately the new way was also very risky. And now we are ALL paying for it. (See Joseph Palermo’s article at the Huffington Post for a good, if leftist, article on the history of the deregulation).
So, on Sunday, Fanny and Freddy were taken back over by the Government (don’t forget the were originally publicly owned till some genius decided the private sector could do a better job running these companies the government could). Then on Monday Lehman Brothers was allowed to fail and filled the largest bankruptcy case in history because the Government said they had to draw a line. A day later the Government once again helped out another company, AIG, by giving them a large loan. All this activity has made the stock markets around the world very nervous (Russia is so nervous they closed their markets, and India has taken a beating that makes Wall Street’s problems look like a walk in the park). Various international banks (including our own Federal Reserve) have gotten together to pump billions of dollars into the banking system in order to keep enough cash flowing so the system can continue to operate.
Will this band aid keep us afloat till the markets can stabilize? Maybe. But what if there is another agenda out there that involves kicking the legs out from under the richest countries in the world and devaluing the U.S. dollar? China has already made the suggestion that maybe the world shouldn’t be using a financial standard set by the United States Dollar and instead should switch to a gold standard. Yesterday after China made that statement gold was traded at its highest level in history.
There is no doubt we are living in interesting times. But big profits and power plays can happen under such circumstances. This situation is having a direct effect on the current race for the White house with both sides suddenly turning from the very important issues, such as pregnant 17 year old’s, to focus on the economy.
I for one am keeping my eyes open for who is gaining from all this. Because I sure as heck am not. Nor is anyone I know. There is a book called The Shock Doctrine by Naomi Klein that discusses how when a “shock” is administered to a group, a government, a country then those people or institutions are much more vulnerable to being manipulated into making bad choices by supposedly benevolent helpers/leaders offering a “Cure” (think post 9/11 and the Patriot Act). Are we as a country being “shocked” right now? The talking heads on the cable news have actually used those words to describe the past few days. What will the “Cure” be? And will it be worse than the illness?
I will be keeping my eyes and ears open and so will Willow …Just as soon as she finishes burying her gold bars in her litter box.
Willow and I have landed in Michigan where we are resting and recovering from our journey. Most importanly we are figuring out the all important “what next?”. For Willow she seems to think the big question is should she eat a little bite of food or take another nap in the window. I am a little more focused on how will I buy Willow food and afford a nice window for her to sleep in. For now though we are enjoying the hospitality of my brother and his family.
Now that we are done traveling though we need to figure out what to blog about! And what better topic that politics? I have been thinking about switching the title of our blog to Eileen and Willow’s Political Blog (Willow wants Palin for Prez and is advocating for a Palin/Clinton ticket).
For today though I think the best political comentary was done on this weekends season premier of Saturday Night Live. So enjoy the clip and check for new blog updates with a new focus coming soon.
Posted by esryck8 
Posted by esryck8 
Posted by esryck8 
