This Financial Thing
It was interesting being in New York last week shooting Web 2.0 Expo NY 2008 while Wall Street was completely blowing out. The news of it was broadcast throughout each day at the Javits center through their extensive network of flat panel televisions mounted everywhere. It occupied all the space of newspapers on the sidewalks. And it affected everyone to some degree, even if most people were completely confused as to what was really going on.
Lots of things have gone through my mind the last year or so as this all has unfolded. I've tried to make sure my financial footing is solid and I'm currently preparing for a slowdown in my business that I hope doesn't happen, but could come at any time. I've counted my blessings thirty different ways that I insisted on a fixed-rate mortgage when I bought my home even though every so-called financial adviser in the process was trying to push adjustable-rate notes. I'm so very glad that I have skills in multiple areas so that I can adjust my career path as needed. And, most of all, I keep reminding myself that chaos and instability often creates opportunity if you look carefully and are prepared.
Last week in New York as the scope of the bailout plan came to light, all those thoughts faded and were replaced by simple anger. I tried for a while to figure out a way of putting the thoughts into a coherent enough order to write about, but I couldn't. Today I was glad to see John Gruber link to a quote by Senator Bernie Sanders of Vermont on the matter:
For years now, they've told us that we can't afford—that the government providing healthcare to all people is just unimaginable; it can't be done. We don't have the money to rebuild our infrastructure. We don't have the money to wipe out poverty. We can't do it. But all of a sudden, yeah, we do have $700 billion for a bailout of Wall Street.
Yeah. That's exactly what I was thinking. Well, that mixed in with a good dose of Whiskey Tango Foxtrot??? In what reality does all of this make sense? Certainly not my reality.
In the end, as easy as would be to blame the brokers making the deals, they were acting within the scope of what was allowed. I don't really harbor much ill will in their direction. Instead, most of my ire is solidly focused on the people of both political parties currently running around Washington DC right now trying to work on a solution for a problem that they helped to create in the first place. After all, it's not like this was unexpected or unprecedented. One of the major causes of the S&L crisis in the late 80's was insufficient oversight as a direct result of deregulation. Sound familiar?
I don't know what else to do right now but shake my head. I can tell you one thing for sure, however. I'll be checking up on the people I vote for in this next election on how they stand on all of this. I will be voting accordingly, regardless of party affiliation or personality. I hope you do as well. After all, politics are all always about the issues at hand. And this is a big one.
11 Comments
Ok, let it be OpenID does not work, so let's post as anonymous coward.
I'm fully on your side. I wrote about that
here:
http://fdominicus.blogspot.com/
and before I put some points here:
http://www.q-software-solutions.de/hiki/?Friedrich
It's even more galling because of the sums the "bankers" have taken home on the last years. They have sucked out all the gains to themselves. Now they've messed up and no-one has the courage, to step in an say: "Hey I've made up so much money I'd put back 90 %" and will even have more money than 90 % of the others. No, now they are running for making an extra share of money out of this mess they have started. They have no idea that they messed up, sucked out all what is needed these days to their own good. And now they get subsedies to go on like that.
Anger is a much to weak word, hatred would be more exact....
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Not to make too fine a point about it, but google for McCain "S&L" or "Keating Five"...
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And, most of all, I keep reminding myself that chaos and instability often creates opportunity if you look carefully and are prepared.
Amen, brother.
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Yeah I'm on your side about this, too. I don't get how the race can be so close. What have the republicans done for america in the last 3 decades? Every time they get to power, they fuck it all up (Reganomics? Are you freaking KIDDING ME!??! Hasn't worked, EVER, quit trying it). Inflation, deregulated markets crashing left & right, and poor people footing the bill so the rich people can play games with our money, and go home to their cushy mansions... ?
That it's not Obama 89%, McCain 1%, Other 10%, scares the living piss out of me. I'm neither famous nor important in the scheme of things, but you might enjoy this read of mine:
http://www.randombob.net/files/voterepublicanandgodwillsmiteyou.html
And since you're on the subject of Daring Fireball, have you seen THIS? Wow, the 5DMII's biggest selling point might just be its video capability... :-O
http://www.usa.canon.com/dlc/controller?act=GetArticleAct&articleID=2086
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@fazal ++1. No need or use for subtlety this season.
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Friedrich, OpenID is such a pain in the ass sometimes. It's working for me with myopenid.com. I'll try to go back though the logs and see if there's something.
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@fazal & Eugene Chan:
I did Google it and the first link (to Wikipedia) reminded me that McCain was cleared of any wrongdoing and reprimanded for exercising "poor judgment". He is on record as saying that his involvement was "the worst mistake of my life."
I can respect someone who has learned from their mistakes.
However, the bailout is the absolute wrong solution to this crisis. I agree that we don't have the money for it. It's time to let these people reap what they have sown and deal with their losses. There are better ways to handle the crisis (regulation isn't one of them) - this link (also from Gruber) lays out some ideas:
http://corner.nationalreview.com/post/?q=ZGE5MmE0YmRiODA3YTRiNzFlN2FmNDU5N2I0ZDc3YTE=
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Ready for a dose of paranoia?
Consider that the next president of the US will possibly be the next Herbert Hoover. Hoover. who had only been President for about 6 months when the stock market crashed in 1929 , took all of the blame for the following "Great Depression" of the 1930's.
There are paranoid Democrats out there that are certain the Republicans are working hard to lose this election in a manner that is not obvious. Why? The party that wins an election that causes a depression probably will lose the next few elections.
Tedhimself
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The fact is, we can't afford socialized medicine, and we can't afford to bail out failed mortgage lenders, either.
Henry Paulsen is a Wall Street lifer. His stint at the treasury is a brief diversion in his career, so naturally his interest is in helping out his colleagues, rather than letting them take their own goddamned losses.
Besides the obvious moral issue of robbing one person to pay another, bailouts are not, and can never be cost-effective. People like to point to the chrysler bailout as an example that worked, but that's only looking at the most superficial criteria. Yes, Chrysler paid back the loans, but the money that was lent to Chrysler pursuant to the government loan guarantee wasn't available to lend to businesses who hadn't fucked up and put their hand out.
If Chrysler had failed, so what? Their shareholders would have learned to take better care in choosing companies to invest in, and their physical assets would have been bought by someone who knew how to run a car company.
I'd also like to point out, that every partisan of one wing or the other of the Ruling Party is being thoroughly disingenuous. The mortgage bubble is a symptom of inflation, and inflation happens because the Ruling Party likes to spend a lot of money, and it's a lot easier to counterfeit the currency than to put a gun to our heads and make us write a bigger check on April 15.
-jcr
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Let me also point out that we can't afford the existing commitments for Social Security or Medicare. That tab already comes to $330K per man, woman, and child over the next 30 years.
Something's got to give, and soon. I would advocate that first, we withdraw all US troops from rest of the world. Second, cut the military budget by 2/3 (which would still leave the USA very far ahead of the rest of the world in military spending.) Third, abolish every agency whose function is not authorized by the constitution (and stretching the commerce clause to include anything and everything doesn't count.)
-jcr
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@ jcr
Spoken like a true libertarian. And I'm not being facetious - we need some radical steps like those you espoused to be taken.
--Mark
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