When I started this blog I was "approaching" the ripe age of 59. Well today 59 landed and I can't say that writing about my point of view has changed anything about me. I have shared a lot of opinions and thoughts. I probably have more to share but I am not sure that these are revealing, particularly original or insightful. In fact most of my ideas and thoughts are learned from others and after living a certain amount of time, I have passed them on as ideas that have stood up under the test of my personal experience. I am not sure how much longer I will continue to "blog" as in a way it is sort of like belly button gazing with no real value to anyone except myself.
But today is my birthday and I am saying goodbye today to a wonderful colleague who started work the same time I did and we have been work survivors together. He is retiring at 62 and is looking forward to a new life with his wife down in Williamsburg, Virginia. I told him that he would enjoy becoming a true Virginian, and I hope that is the case. It seems fitting that he come to the state in the year it turned politically blue. I have been considering how to participate in this effort in the proper way. I will have to give that subject some more thought this year.
I still consider myself pretty typical of my age and time. I have the expected skepticism about these bailouts and I just don't see the tax payers benefiting. It makes you wonder if Rome burned because the tax payer got tired of footing the bill. I would have to have a better understanding of history to answer that question, but I think there is some truth to the saying that "history repeats itself." I bet we could find some parallels if we went back far enough. But I also think that the problems are complex and embedded into our social fabric deeply enough that it might require something pretty drastic to change direction.
Labor unions -- once these were a good thing. They served a very important purpose when we were a developing industrial nation, but I wonder if they have now become the problem instead of the solution. Some of the rules and benefits are absurd in the eyes of those of us who don't have the benefit of the "protections" that a union negotiates. How do we keep the good parts and get rid of the pork in these agreements? How do we return some of the control back to the companies that need to be able to be flexible in these trying times.
Here is a thought, are economic crisis points when something gets out of balance? For example, financially we became unbalanced because we lacked a check to the mortgage industry. The imbalance in the mortgage industry lead to cheap financing which lead people to feel that they could afford to buy housing, which lead to demand for housing which lead to builders building, which lead to --- well you get the idea. Everything is related, we do not exist in a vacuum and as a result there is a delicate balance that must be maintained. This balance is what the economists spend their lifetimes analyzing, sometimes they get it right and sometimes they get it wrong (Greenspan) at our expense.
Same with industry, labor power has become unbalanced. So if you look at your personal finances, what has become unbalanced? Too much debt for your income? Too little income for your lifestyle? Too much house, too little spending discipline, too much material things, too little faith, too much for any family to deal with. So how do we correct this mess? And how does the country get back on track?
Well first things first: before you can fix something you have to know how bad it is. As painful as it is to face the realities, get out your pencil and figure out what your income is and what your financial obligations are. Then figure out what you need and what is the difference between what you need and what you receive -- your income minus all expenses = a positive number (good) or a negative number (not so good). So this tells you to cut expenses or get more income. Now expenses can only be cut so much before there is pain (no food, no shelter, no transportation, etc.) so that means you need to find other sources of income or increase the income you get. BIG HINT HERE - you should not ask for a raise AND it is not the time to find a new job. So now you need to get creative. Work a second job, work a part time job, create a product that you can sell, find a service you can provide that people want, work overtime if it is available to you, or register with a temp agency.
From adversity you can create opportunity - I am basically optimistic so I have to toss this out there. Economic downturns turn up at some point and are temporary. So all you have to do is get through it. Sometimes, it will force you in a direction you would not have taken otherwise but which turns out to be a good one. Or sometimes you have to regroup and revisit your goals and aspirations in life. An economic crisis can become a personal crisis that makes you a better and stronger person. Take this and translate it to what the country needs to do.
So why am I spending my birthday writing this blog? Because, just because.
Monday, December 8, 2008
Monday, November 24, 2008
What Now?
"What that is I don't know but there is a next big thing coming and it might be related to energy or the global warming problem. I just sense that there is something and I don't know if it is good or bad, but I think it is big." --> a quote from my August 12th entry. I guess I know now what I was sensing.
I spend a lot of my time these days trying to not panic about the state of the economy and the country. Well panic is too strong a word but be comsumed with worry might be a better description. I think that I will take advice from the 12 step programs and realize that the only thing I can do is control MY actions, MY reactions, and MY thoughts. So I continue to do what I do, without getting too involved in things that have not yet hit me directly in an immediate way. Yes, the stock market has bitten into my retirement fund, yes, we don't know what is ahead of us, and yes, there is bound to be some major problems ahead....BUT I cannot do anything about those right now by any action I might take. So I need to focus on TODAY and what I can do right now to keep my job, keep my house, put food on the table, and pay my bills.
I am not unaware of the world around me, but I continue as NORMAL as much as possible. I cannot imagine making a big purchase and spending is definitely something I consider carefully, as it might be money I need in the future. So the economists need to come up with a different model other than encouraging us to spend-spend-spend. That is what got us in this mess. I have decided I don't like being a country of consumers as much as I like being a country of producers.
I think it is pretty telling to watch government bailout solutions come and go -- daily -- it is pretty clear that the established theories are difficult to apply. Everyday on the news brings us a new direction -- which sends a message that nobody knows what the hell to do! Now that is confidence building --not!
One thing I have not changed and it is really creating a squeeze -- my year-end charitable giving. This might be the last year I can afford to support those causes that I embrace. That is where the country will begin to see the effect of the economic downturn first. As families hunkerdown, save their money because of the uncertainties ahead, charitable giving is going to take a major hit. The human services organizations will see it last, the arts and social non-profits will be on the front line. Governments looking for budget cuts will target cutting anything that does not have a strong vocal constituency.
Every indication is that this recession will be deep and recovery extended over a long period. No bell curve here, more like an "L" shape with a very gradual slope. The uncertainies of whether there will be deflation may become a self-fulfilling prophesy and create a spiral that would change our lives for a decade or more. Everyone is watching fingers crossed, not knowing what to do, hoping that government actions do not make it worse, hoping that someone -- a voice of reason -- will point the way out of this financial miasma.
So you can clearly tell that I am just as clueless as everyone else, the pundits included. But I think that I can give some practical, common sense advice. If money is tight and you are fearful of the future -- be calm, do not react in haste.
First -- keep the job you have. This is not the time to find a new job (unless you know your job is at risk) or change jobs. If you don't work or are a stay at home mom, consider a part time job in off times, so your partner can cover childcare. If you don't make enough money consider a second part time job to supplement your pay. There was one time in my life where I worked one full-time job and two part-time jobs at one time..
Second -- do not incur any new debt. If you are financially well off that is one thing, but if you are a regular middle-class worker-bee, this is not the time to put that HCTV on your credit card, which probably already has way too much on it already. Save up real money for that big purchase or spend the bucks for a digital converter box and wait. Because is is Christmastime, this is a really hard thing to do --- but remember that the small gifts mean just as much to the receiver as the big ones and if they don't then something is wrong with that relationship.
Kids need some honesty about your finances (look up how to teach your kids about money at http://www.kidsfinance.com/ ) and they can understand a lot -- you don't and shouldn't scare them with threats of losing a job or house, but they can understand that when money is scarce, everyone has to do their part.
Third -- as difficult as it sounds, do not stop putting money into your retirement account. It should be the last thing you cut. Now that does not mean, let your mortgage get into arrears because of this -- be practical not stupid.
Fourth -- if you are having trouble making any of your credit card payments, as embarrassing as it is, call the credit card company and ask for assistance such as a lower interest rate or payments. Think carefully about doing this because it will go on your credit record. But my guess is that there will be a lot of damaged credit records and hopefully along with that will be some understanding of the special times we live in.
Fifth -- do not let your mortgage get behind. This is the holy grail, the bill you must pay even before the car payment but not before feeding your family. There are many resources out there right now to help, call them BEFORE you get behind.
Sixth -- do a family budget of expenses and income so that you know what your real situation is and what you have to pay. Plan ahead for that quarterly payment and save up - do not rely on the ready credit that was there -- it is going to disappear fast. Start living within your means as much as possible. Most budgets will just allow you to make ends meet for the necessary things so you need to anticipate as much as possible those surprises. Car repairs, the unexpected bill you forgot about, car insurance, etc. Make sure the whole family helps you with this so that everyone knows what the obligations are.
Seventh -- look for ways you can save money. Is cable TV necessary? Do you need full coverage car insurance on the car that is paid off? Are you taking advantage of family discounts on your cell phone accounts, do you need a cell phone? Do you need a land phone line, can your cell phone suffice? Can you rent a movie and pop some corn instead of going to the movies? How about game night to play those board games and instead of going out to eat, order pizza in.
Now is a good time to stop smoking and drinking, yea I know it is hard. Walk instead of drive.
Eighth -- and yes I know that these are things you have heard before -- save on utilities by all the things you have heard before -- no I am not going to repeat them here.
Ninth -- if you have friends and/or family close by and affording food is a problem -- share the burden by having regular extended family pot luck dinners together.
Tenth -- give thanks to what ever greater power you recognize that you are healthy and have a family to support you in this time of crisis.
I hope this helps -- in the end the only thing you can depend on is yourself.
I spend a lot of my time these days trying to not panic about the state of the economy and the country. Well panic is too strong a word but be comsumed with worry might be a better description. I think that I will take advice from the 12 step programs and realize that the only thing I can do is control MY actions, MY reactions, and MY thoughts. So I continue to do what I do, without getting too involved in things that have not yet hit me directly in an immediate way. Yes, the stock market has bitten into my retirement fund, yes, we don't know what is ahead of us, and yes, there is bound to be some major problems ahead....BUT I cannot do anything about those right now by any action I might take. So I need to focus on TODAY and what I can do right now to keep my job, keep my house, put food on the table, and pay my bills.
I am not unaware of the world around me, but I continue as NORMAL as much as possible. I cannot imagine making a big purchase and spending is definitely something I consider carefully, as it might be money I need in the future. So the economists need to come up with a different model other than encouraging us to spend-spend-spend. That is what got us in this mess. I have decided I don't like being a country of consumers as much as I like being a country of producers.
I think it is pretty telling to watch government bailout solutions come and go -- daily -- it is pretty clear that the established theories are difficult to apply. Everyday on the news brings us a new direction -- which sends a message that nobody knows what the hell to do! Now that is confidence building --not!
One thing I have not changed and it is really creating a squeeze -- my year-end charitable giving. This might be the last year I can afford to support those causes that I embrace. That is where the country will begin to see the effect of the economic downturn first. As families hunkerdown, save their money because of the uncertainties ahead, charitable giving is going to take a major hit. The human services organizations will see it last, the arts and social non-profits will be on the front line. Governments looking for budget cuts will target cutting anything that does not have a strong vocal constituency.
Every indication is that this recession will be deep and recovery extended over a long period. No bell curve here, more like an "L" shape with a very gradual slope. The uncertainies of whether there will be deflation may become a self-fulfilling prophesy and create a spiral that would change our lives for a decade or more. Everyone is watching fingers crossed, not knowing what to do, hoping that government actions do not make it worse, hoping that someone -- a voice of reason -- will point the way out of this financial miasma.
So you can clearly tell that I am just as clueless as everyone else, the pundits included. But I think that I can give some practical, common sense advice. If money is tight and you are fearful of the future -- be calm, do not react in haste.
First -- keep the job you have. This is not the time to find a new job (unless you know your job is at risk) or change jobs. If you don't work or are a stay at home mom, consider a part time job in off times, so your partner can cover childcare. If you don't make enough money consider a second part time job to supplement your pay. There was one time in my life where I worked one full-time job and two part-time jobs at one time..
Second -- do not incur any new debt. If you are financially well off that is one thing, but if you are a regular middle-class worker-bee, this is not the time to put that HCTV on your credit card, which probably already has way too much on it already. Save up real money for that big purchase or spend the bucks for a digital converter box and wait. Because is is Christmastime, this is a really hard thing to do --- but remember that the small gifts mean just as much to the receiver as the big ones and if they don't then something is wrong with that relationship.
Kids need some honesty about your finances (look up how to teach your kids about money at http://www.kidsfinance.com/ ) and they can understand a lot -- you don't and shouldn't scare them with threats of losing a job or house, but they can understand that when money is scarce, everyone has to do their part.
Third -- as difficult as it sounds, do not stop putting money into your retirement account. It should be the last thing you cut. Now that does not mean, let your mortgage get into arrears because of this -- be practical not stupid.
Fourth -- if you are having trouble making any of your credit card payments, as embarrassing as it is, call the credit card company and ask for assistance such as a lower interest rate or payments. Think carefully about doing this because it will go on your credit record. But my guess is that there will be a lot of damaged credit records and hopefully along with that will be some understanding of the special times we live in.
Fifth -- do not let your mortgage get behind. This is the holy grail, the bill you must pay even before the car payment but not before feeding your family. There are many resources out there right now to help, call them BEFORE you get behind.
Sixth -- do a family budget of expenses and income so that you know what your real situation is and what you have to pay. Plan ahead for that quarterly payment and save up - do not rely on the ready credit that was there -- it is going to disappear fast. Start living within your means as much as possible. Most budgets will just allow you to make ends meet for the necessary things so you need to anticipate as much as possible those surprises. Car repairs, the unexpected bill you forgot about, car insurance, etc. Make sure the whole family helps you with this so that everyone knows what the obligations are.
Seventh -- look for ways you can save money. Is cable TV necessary? Do you need full coverage car insurance on the car that is paid off? Are you taking advantage of family discounts on your cell phone accounts, do you need a cell phone? Do you need a land phone line, can your cell phone suffice? Can you rent a movie and pop some corn instead of going to the movies? How about game night to play those board games and instead of going out to eat, order pizza in.
Now is a good time to stop smoking and drinking, yea I know it is hard. Walk instead of drive.
Eighth -- and yes I know that these are things you have heard before -- save on utilities by all the things you have heard before -- no I am not going to repeat them here.
Ninth -- if you have friends and/or family close by and affording food is a problem -- share the burden by having regular extended family pot luck dinners together.
Tenth -- give thanks to what ever greater power you recognize that you are healthy and have a family to support you in this time of crisis.
I hope this helps -- in the end the only thing you can depend on is yourself.
Thursday, November 13, 2008
Deliver Me
Now that the elections are over we get to see if the Democrats can deliver on their promises. Don't get me wrong, I really want them to succeed, but they have a real tough job ahead of them. In my opinion, the real test is who Obama choses as his advisors, cabinet, staff and key appointees. These are the people he will depend on to get it done and if they are not the right people the whole country will suffer.
So now I am in a holding pattern, watching carefully and hoping that the promise becomes reality. This country and its people deserve transparency and honesty. Let's see if we get it.
So now I am in a holding pattern, watching carefully and hoping that the promise becomes reality. This country and its people deserve transparency and honesty. Let's see if we get it.
Tuesday, October 28, 2008
Rescue Me
I have been hearing nothing but gloom and doom bailout stories on the airwaves -- so much that I just don't believe anyone really knows what will work. Remember that old song "Rescue Me" - that has been going through my head so much when I hear the news that it should be a theme song for the times we are going through.
You know there are a lot of people who would like to be rescued. And there are a lot of people who used to live with the optimism that if anything went wrong, someone would rescue them from disaster. So tell me, why should corporate America be rescued? Why shouldn't they, like us, suffer the results of their excesses, their greed, their poor judgments, their disappointments, etc.?
Are we just feeding the monster by not letting everything hit a natural bottom. Who is to say we would not rebuild a better system? We will never know because "bailout money" is flowing like a river of American blood. I don't see any rhyme or reason to the approach being taken. It seems like everything we are doing is a knee-jerk reaction to another leak in the dam. We have not had time to take any proactive preventative steps because in my opinion everyone is guessing at the solutions and throwing good money after bad. Even Greenspan admitted that his long held beliefs were wrong. I am not a total Grinch because I do see the importance of shoring up our banking system and some of the other basic systems, but as a country, we can not continue to support these failing companies with unlimited funds.
I remember when I went through what I call my "down-to-earth" moment when I was a Junior in college. I realized that yes you can do anything you put your mind to but you have to put your mind to it 100%, you have to be focused and this is important -- you have to sacrifice. That was when I realized that life was not a fairy tale and that happy endings were not guaranteed. I also realized that sometimes an individual's dreams did not match their talents or their passion. I learned to live with my own imperfections as well as those of others. I accepted that I was never going to succeed at the level I wanted to succeed. But I also took responsibility for this choice. I chose not to sacrifice, I was materialistic and I required more security than I could expect if I followed my dream.
Today, I feel satisfied with my life and the direction I took. I have reached a level of success that allows me to have very few regrets. I tried to make careful decisions, I took few risks, but I did pursue some things that required I commit to a life changing direction. None of these choices were more than I could handle and some required a little sacrifice on my part. None of my goals were unattainable, but all of them could have been derailed for a variety of reasons, and some were due to my own actions. The point is that I picked myself up from every disappointment or failure and kept on. Most of us do that, giving up is not an option. Unlike a corporation we can't just shut down operations.
So by rescuing these corporations we are saying take any risk because we will save you if it turns sour. I just think that is wrong. In the meantime, the real suffering is at the lowest level, the working "joe" who is struggling to make ends meet to pay the bills and to raise his family.
There is no doubt that unpleasant things will happen to good people. It is how they handle themselves that means the most to me. Do they turn bitter, angry and resentful? Or do they start again and take responsibility and not let the disappointments turn them into blamers, complainers, and negative people. I confess that there are often reasons to be bitter and angry, but if you don't move beyond that, how can you make things better?
I realize that this may sound like I don't care if the country goes into a deep recession. But that is not why I am wondering out loud about this. I almost sound like a Republican on this subject, but no I do believe in regulation and that as a nation we have social responsibilities to help with things like heathcare, security in our old age, and care for those who cannot care for themselves. But for the most part I do not believe in permanent federal subsidies. I do believe that the government is an agent for good not evil. But I also believe that there are some people in the government who do not serve the public good.
It is easy to see how the Libertarian ideas strike a cord on some points. But then so does Hucklebee (fair tax) and so does John Cain. It is still a matter of finding balance. I still think Obama will bring us a more balanced goverment.
So that is my point of view in this posting. Until my next thought strikes, so long for now.
You know there are a lot of people who would like to be rescued. And there are a lot of people who used to live with the optimism that if anything went wrong, someone would rescue them from disaster. So tell me, why should corporate America be rescued? Why shouldn't they, like us, suffer the results of their excesses, their greed, their poor judgments, their disappointments, etc.?
Are we just feeding the monster by not letting everything hit a natural bottom. Who is to say we would not rebuild a better system? We will never know because "bailout money" is flowing like a river of American blood. I don't see any rhyme or reason to the approach being taken. It seems like everything we are doing is a knee-jerk reaction to another leak in the dam. We have not had time to take any proactive preventative steps because in my opinion everyone is guessing at the solutions and throwing good money after bad. Even Greenspan admitted that his long held beliefs were wrong. I am not a total Grinch because I do see the importance of shoring up our banking system and some of the other basic systems, but as a country, we can not continue to support these failing companies with unlimited funds.
I remember when I went through what I call my "down-to-earth" moment when I was a Junior in college. I realized that yes you can do anything you put your mind to but you have to put your mind to it 100%, you have to be focused and this is important -- you have to sacrifice. That was when I realized that life was not a fairy tale and that happy endings were not guaranteed. I also realized that sometimes an individual's dreams did not match their talents or their passion. I learned to live with my own imperfections as well as those of others. I accepted that I was never going to succeed at the level I wanted to succeed. But I also took responsibility for this choice. I chose not to sacrifice, I was materialistic and I required more security than I could expect if I followed my dream.
Today, I feel satisfied with my life and the direction I took. I have reached a level of success that allows me to have very few regrets. I tried to make careful decisions, I took few risks, but I did pursue some things that required I commit to a life changing direction. None of these choices were more than I could handle and some required a little sacrifice on my part. None of my goals were unattainable, but all of them could have been derailed for a variety of reasons, and some were due to my own actions. The point is that I picked myself up from every disappointment or failure and kept on. Most of us do that, giving up is not an option. Unlike a corporation we can't just shut down operations.
So by rescuing these corporations we are saying take any risk because we will save you if it turns sour. I just think that is wrong. In the meantime, the real suffering is at the lowest level, the working "joe" who is struggling to make ends meet to pay the bills and to raise his family.
There is no doubt that unpleasant things will happen to good people. It is how they handle themselves that means the most to me. Do they turn bitter, angry and resentful? Or do they start again and take responsibility and not let the disappointments turn them into blamers, complainers, and negative people. I confess that there are often reasons to be bitter and angry, but if you don't move beyond that, how can you make things better?
I realize that this may sound like I don't care if the country goes into a deep recession. But that is not why I am wondering out loud about this. I almost sound like a Republican on this subject, but no I do believe in regulation and that as a nation we have social responsibilities to help with things like heathcare, security in our old age, and care for those who cannot care for themselves. But for the most part I do not believe in permanent federal subsidies. I do believe that the government is an agent for good not evil. But I also believe that there are some people in the government who do not serve the public good.
It is easy to see how the Libertarian ideas strike a cord on some points. But then so does Hucklebee (fair tax) and so does John Cain. It is still a matter of finding balance. I still think Obama will bring us a more balanced goverment.
So that is my point of view in this posting. Until my next thought strikes, so long for now.
Friday, October 17, 2008
Trickle Down Should Not be the Only Policy
First let me put in my disclaimer: I am not an economist and my theories and opinions are just that, my own.
I do not believe in the Trickle Down economic theory as a stand alone policy. My reasons are purely observational. Not much seems to trickle down and certainly not quickly. After everyone along the way has taken their "cut" there is not much left over for the guy or gal at the bottom. I think this is illustrated a little by the failure of banks to work with borrowers to rework mortgages for those in trouble.... the corporations just will not voluntarily give up any profit to help keep a loan viable. Instead of thinking that something is better than nothing, they take an all or nothing stand and in my opinion this is just stupid. Even if I were a shareholder of the bank, I think I would rather see adjusted earnings forecasts go down than a complete failure of the bank because of its inflexibility. Remember what I said about how banks used to operate, it was a person in the community that the bank knew personally and he would make a judgment based on what he knew about the person -- and that is not always numbers on an application.
Now an example of Trickle Up economics can be illustrated but it too has its flaws, especially if excess funds are put in savings instead of being spent. But even that would have its benefits, since it is savings that become the basis for bank funds available. My example is the last stimulation refund/tax rebate that was done. That hit the retail numbers pretty quickly and it was clear that it was needed (or a lot of it would have disappeared into savings accounts.) So this is the basis for my belief that Trickle Up needs to be combined with Trickle Down for a more balanced approach to resolving our economic woes.
Loan workouts need to become a priority and soon. People can not wait for the bailout money to trickle down and there is no pressure on the lenders to do anything but wait for the government to bail them out once again. Foreclosures are bad, finding solutions that avoid foreclosures whenever possible are good. We need to break the cycle and that requires interference -- a bold step and bound to be unpopular with corporate America but it is the morally right thing to do. Forget about blame -- so what if someone got into debt too deeply. Let's do what America does so well -- lend a hand and help your neighbor get back up.
You know, the attitude that everyone is responsible for themselves is not bad but it should not be absolute. Circumstances, luck, etc. -- think of the Nationwide Insurance advertisment "Life comes at you.." -- we need to be more compassionate, forgiving, tolerant and less judgmental, and that is not being gullible. Who knows, one day you or I might need that helping hand. Let's stop turning our backs on the less fortunate. One person at a time we can change the country.
Republican policies are not all bad and Democratic policies are not all good. Compromise, the willingness to work together to solve problems - what both candidates have promised to do -- is what we need. The give and take of good discourse is necessary but at the end of the day, be willing to give something a try.
We have a responsibility as citizens to be active participants in our government. This can be as simple as voting, not just in the national elections but in the local ones too. Tip O'Neill said it best: "All politics is local" so write that letter, attend a town council meeting and don't be afraid to speak up, go to that school board meeting, make an appointment to just chat with your county elected official, meet candidates and talk to them about what is important to you. Teach your children the importance of the freedoms that we have and voting is the most important. Don't be the silent majority about things that matter to you.
You know we are so fortunate here in America, there are two very decent individuals running for the top elected office in our country. Let's honor them by voting on November 4th!
I do not believe in the Trickle Down economic theory as a stand alone policy. My reasons are purely observational. Not much seems to trickle down and certainly not quickly. After everyone along the way has taken their "cut" there is not much left over for the guy or gal at the bottom. I think this is illustrated a little by the failure of banks to work with borrowers to rework mortgages for those in trouble.... the corporations just will not voluntarily give up any profit to help keep a loan viable. Instead of thinking that something is better than nothing, they take an all or nothing stand and in my opinion this is just stupid. Even if I were a shareholder of the bank, I think I would rather see adjusted earnings forecasts go down than a complete failure of the bank because of its inflexibility. Remember what I said about how banks used to operate, it was a person in the community that the bank knew personally and he would make a judgment based on what he knew about the person -- and that is not always numbers on an application.
Now an example of Trickle Up economics can be illustrated but it too has its flaws, especially if excess funds are put in savings instead of being spent. But even that would have its benefits, since it is savings that become the basis for bank funds available. My example is the last stimulation refund/tax rebate that was done. That hit the retail numbers pretty quickly and it was clear that it was needed (or a lot of it would have disappeared into savings accounts.) So this is the basis for my belief that Trickle Up needs to be combined with Trickle Down for a more balanced approach to resolving our economic woes.
Loan workouts need to become a priority and soon. People can not wait for the bailout money to trickle down and there is no pressure on the lenders to do anything but wait for the government to bail them out once again. Foreclosures are bad, finding solutions that avoid foreclosures whenever possible are good. We need to break the cycle and that requires interference -- a bold step and bound to be unpopular with corporate America but it is the morally right thing to do. Forget about blame -- so what if someone got into debt too deeply. Let's do what America does so well -- lend a hand and help your neighbor get back up.
You know, the attitude that everyone is responsible for themselves is not bad but it should not be absolute. Circumstances, luck, etc. -- think of the Nationwide Insurance advertisment "Life comes at you.." -- we need to be more compassionate, forgiving, tolerant and less judgmental, and that is not being gullible. Who knows, one day you or I might need that helping hand. Let's stop turning our backs on the less fortunate. One person at a time we can change the country.
Republican policies are not all bad and Democratic policies are not all good. Compromise, the willingness to work together to solve problems - what both candidates have promised to do -- is what we need. The give and take of good discourse is necessary but at the end of the day, be willing to give something a try.
We have a responsibility as citizens to be active participants in our government. This can be as simple as voting, not just in the national elections but in the local ones too. Tip O'Neill said it best: "All politics is local" so write that letter, attend a town council meeting and don't be afraid to speak up, go to that school board meeting, make an appointment to just chat with your county elected official, meet candidates and talk to them about what is important to you. Teach your children the importance of the freedoms that we have and voting is the most important. Don't be the silent majority about things that matter to you.
You know we are so fortunate here in America, there are two very decent individuals running for the top elected office in our country. Let's honor them by voting on November 4th!
Friday, October 10, 2008
Hunkering Down
Remember back when I said something big was coming but I did not know what? Well I guess we all know what it was ... a huge economic crisis that is a once in a lifetime (we hope) event. When combined with the political campaign, I am sure that a lot of people are conflicted about what to do. I have always thought that there is some truth to history repeating itself. But more than that, I think that history informs us on how to go forward.
I have always been fascinated by economic theory. When I took my introductory course in economics we covered both macro and micro economics and I never missed a lecture. I probably would have taken more classes in economics if I had the luxury of unlimited time. But instead I have to rely on the talking heads to give me glimpses into current theories, sometimes conflicting opinons on what is happening and how to fix it. And what I have gathered from everything I have heard is that there are a lot of theories but no one really knows for sure what the real fix is. The reason is that there may be the right option embedded in all those theories but we can't agree on the path.
I have spoken with a lot of really smart and savvy people and some have really, really sharp minds and all of them say that we need to be prepared for an extended recovery period of several years. But the real question is whether the right theories are being followed by those who are trying to chart our path out of this mess. The wrong choice could extend the recovery timeline. And we are not just talking about national policy but international policy. It is possible that this is going to propel the paradym shift in international power.
So now that brings me back to politics. In the big scheme of things the economic policies of the two major political parties are far apart. Forget the people running for office and focus on the policies and try to make a judgement whether the current policy is working or whether a change in policy is needed. That is what will guide my vote in November. The individuals are both going to have a hard time their first few years in office and this crisis will resolve itself regardless of who is in office, with the benefit of reflecting favorably on the person in office if the recovery goes well. So the question I ask myself is what policy do I buy into and do I think the individual will implement it properly and can they implement it with the congress that they will have to work with. So there -- that is the big decision we all have to make. Of course there are other things that I am interested in and which also will effect my decision, but this is the big one, the deal breaker, the elephant in the room.
I have to say something about social conservatism and the Christian right. The republican party is not well served by the extremes of these philosophies. In fact the converse is also true, the democratic party is not well served by the extreme liberal philosophies. I believe that the majority of US citizens are much more moderate and tolerant in their opinions than either of these extremes. There are some things that act as lightning rods such as abortion and illegal immigration -- but on the majority of governance issues I think that there is more accord than not. What I am saying is that compromises could and should be made on the majority of goverment actions and that there should be an acceptance of agreement to disagree on the more difficult issues -- but that the majority rule needs to be honored. The problem as I see it is that there may not be a clear majority opinion, which implies that there is a real schizm in the country.
This schizm may be the warning canary of the gap developing in our society between the haves and the have-nots. I will have to think about this a little more.
I don't know the answer to how we resolve the abortion issue as a country, but I believe it is a personal choice up to a certain time in the pregnancy. I also believe that easily available abortions have changed our society -- and I have no religious issue here -- for the worse, making casual sex more acceptable because the consequences can be eliminated. This does erode our culture and our family unit. But I also believe that to totally prohibit abortions have costs both to individuals and to society, the burden of teenage pregnancies, the unwanted children, the health risks, illegal abortion clinics, etc. So as a result I believe that sex education is the absolutely right thing to do and that preventing unwanted pregnancies is important. In this role our religious institutions provide an important service. I do not agree that abortion should be legislated beyond where it is now. I also believe that we have a long way to go to reconcile the extremes on this issue and I would be alarmed if Roe v. Wade were reversed. Honestly, I want my granddaughter to have a choice and not to be trapped into a situation that was the result of immature and poor judgement on her part. Life's lessons are hard enough and the long term effect could ruin her future irrepairably.
Now the current mortgage crisis is a real problem which I am sure is very complex and will take a long time to resolve. But I was thinking that maybe it could be simplified. The big challenge is the loan workouts that need to happen. The banks did not get this done because they were so focused on their profits. They sort of bit off their nose to spite their face, don't you think?
I am sure there are a lot of solutions being considered but let me put my solution out there, it may be just too simple to take into consideration everything but here it is: Establish a nationwide mortgage interest rate and impose that rate on all mortgages made since 2005. The rate would have to be really low -- I am thinking maybe 3.5% or lower. Convert all the mortgages to this fixed rate and then base the term of the mortgage on the individual income of the mortgage holder. This means establish a standard percentage of total individual income -- say 30% --that is allocated to housing debt and this would then determine the length of the loan. Right now the conventional length is a 30 year mortgage. In this case the mortgages might actually have to be 50 year mortgages to get the payments low enough. This should stabilize the market enough to allow people to stay in their current homes. It would definitely change the real estate market - making it harder to actually sell a home because the built up equity would not be there -- so some thought should be put into that problem too. Then going forward re-confirm the lending practices -- how much of the value of a home would be financed, how much of someone's income should be available for housing debt, the term of the mortgage, limit the flexibility for a few years of the interest rates charged. Then provide assistance programs for first time home buyers to help them come up with downpayments. That is my plan with a going forward plan for tightening up on predatory lending practices.
I should also give you another opinion about how to solve this crisis. Rather than bail out all the corporations and financial institutions, my husband believes that instead of bailing out we should just give every tax paying American citizen $1 million dollars to pay on their mortgage or to buy a home.... would probably cost the same as the bailout.
So there you have my thinking today. It may change next week or next month. And yes I am thinking that I will vote for Obama.
I have always been fascinated by economic theory. When I took my introductory course in economics we covered both macro and micro economics and I never missed a lecture. I probably would have taken more classes in economics if I had the luxury of unlimited time. But instead I have to rely on the talking heads to give me glimpses into current theories, sometimes conflicting opinons on what is happening and how to fix it. And what I have gathered from everything I have heard is that there are a lot of theories but no one really knows for sure what the real fix is. The reason is that there may be the right option embedded in all those theories but we can't agree on the path.
I have spoken with a lot of really smart and savvy people and some have really, really sharp minds and all of them say that we need to be prepared for an extended recovery period of several years. But the real question is whether the right theories are being followed by those who are trying to chart our path out of this mess. The wrong choice could extend the recovery timeline. And we are not just talking about national policy but international policy. It is possible that this is going to propel the paradym shift in international power.
So now that brings me back to politics. In the big scheme of things the economic policies of the two major political parties are far apart. Forget the people running for office and focus on the policies and try to make a judgement whether the current policy is working or whether a change in policy is needed. That is what will guide my vote in November. The individuals are both going to have a hard time their first few years in office and this crisis will resolve itself regardless of who is in office, with the benefit of reflecting favorably on the person in office if the recovery goes well. So the question I ask myself is what policy do I buy into and do I think the individual will implement it properly and can they implement it with the congress that they will have to work with. So there -- that is the big decision we all have to make. Of course there are other things that I am interested in and which also will effect my decision, but this is the big one, the deal breaker, the elephant in the room.
I have to say something about social conservatism and the Christian right. The republican party is not well served by the extremes of these philosophies. In fact the converse is also true, the democratic party is not well served by the extreme liberal philosophies. I believe that the majority of US citizens are much more moderate and tolerant in their opinions than either of these extremes. There are some things that act as lightning rods such as abortion and illegal immigration -- but on the majority of governance issues I think that there is more accord than not. What I am saying is that compromises could and should be made on the majority of goverment actions and that there should be an acceptance of agreement to disagree on the more difficult issues -- but that the majority rule needs to be honored. The problem as I see it is that there may not be a clear majority opinion, which implies that there is a real schizm in the country.
This schizm may be the warning canary of the gap developing in our society between the haves and the have-nots. I will have to think about this a little more.
I don't know the answer to how we resolve the abortion issue as a country, but I believe it is a personal choice up to a certain time in the pregnancy. I also believe that easily available abortions have changed our society -- and I have no religious issue here -- for the worse, making casual sex more acceptable because the consequences can be eliminated. This does erode our culture and our family unit. But I also believe that to totally prohibit abortions have costs both to individuals and to society, the burden of teenage pregnancies, the unwanted children, the health risks, illegal abortion clinics, etc. So as a result I believe that sex education is the absolutely right thing to do and that preventing unwanted pregnancies is important. In this role our religious institutions provide an important service. I do not agree that abortion should be legislated beyond where it is now. I also believe that we have a long way to go to reconcile the extremes on this issue and I would be alarmed if Roe v. Wade were reversed. Honestly, I want my granddaughter to have a choice and not to be trapped into a situation that was the result of immature and poor judgement on her part. Life's lessons are hard enough and the long term effect could ruin her future irrepairably.
Now the current mortgage crisis is a real problem which I am sure is very complex and will take a long time to resolve. But I was thinking that maybe it could be simplified. The big challenge is the loan workouts that need to happen. The banks did not get this done because they were so focused on their profits. They sort of bit off their nose to spite their face, don't you think?
I am sure there are a lot of solutions being considered but let me put my solution out there, it may be just too simple to take into consideration everything but here it is: Establish a nationwide mortgage interest rate and impose that rate on all mortgages made since 2005. The rate would have to be really low -- I am thinking maybe 3.5% or lower. Convert all the mortgages to this fixed rate and then base the term of the mortgage on the individual income of the mortgage holder. This means establish a standard percentage of total individual income -- say 30% --that is allocated to housing debt and this would then determine the length of the loan. Right now the conventional length is a 30 year mortgage. In this case the mortgages might actually have to be 50 year mortgages to get the payments low enough. This should stabilize the market enough to allow people to stay in their current homes. It would definitely change the real estate market - making it harder to actually sell a home because the built up equity would not be there -- so some thought should be put into that problem too. Then going forward re-confirm the lending practices -- how much of the value of a home would be financed, how much of someone's income should be available for housing debt, the term of the mortgage, limit the flexibility for a few years of the interest rates charged. Then provide assistance programs for first time home buyers to help them come up with downpayments. That is my plan with a going forward plan for tightening up on predatory lending practices.
I should also give you another opinion about how to solve this crisis. Rather than bail out all the corporations and financial institutions, my husband believes that instead of bailing out we should just give every tax paying American citizen $1 million dollars to pay on their mortgage or to buy a home.... would probably cost the same as the bailout.
So there you have my thinking today. It may change next week or next month. And yes I am thinking that I will vote for Obama.
Wednesday, September 17, 2008
Act Locally - VOTE
New subject for a quick comment. Why are there so few actual voters that vote in local elections? I think we are going to see an enormous turnout for this coming election but where will they go when the town or the state holds their next elections.
I can not believe that the little town of Herndon has less than 2,500 active voters in local elections. Are we all so complacent and comfortable that we can't make the effort to get out to vote? Do we not think that these smaller arenas of politics are important? Please think again, voting is one of the very few ways that we as citizens have a voice. Don't you feel it is important to be heard to effect the character and fabric of your own community. No matter what party you are affiliated with, no matter whether you don't see the results or like me are always on the losing side, it is still so very important to vote. Don't abdicate your opportunity or your rights as a citizen by a laisse-faire, it will all work out kind of attitude. Don't wait for something bad to emerge before you wake up and think, I should have voted. History proves that when a population does not exert its ability to make choices and decisions, the more organized and sometimes intolerant fringe groups can impose their will on the majority before they know what hit them. So my message is VOTE!! VOTE!!! VOTE!!!
I can not believe that the little town of Herndon has less than 2,500 active voters in local elections. Are we all so complacent and comfortable that we can't make the effort to get out to vote? Do we not think that these smaller arenas of politics are important? Please think again, voting is one of the very few ways that we as citizens have a voice. Don't you feel it is important to be heard to effect the character and fabric of your own community. No matter what party you are affiliated with, no matter whether you don't see the results or like me are always on the losing side, it is still so very important to vote. Don't abdicate your opportunity or your rights as a citizen by a laisse-faire, it will all work out kind of attitude. Don't wait for something bad to emerge before you wake up and think, I should have voted. History proves that when a population does not exert its ability to make choices and decisions, the more organized and sometimes intolerant fringe groups can impose their will on the majority before they know what hit them. So my message is VOTE!! VOTE!!! VOTE!!!
Subscribe to:
Posts (Atom)