Monday, September 15, 2008
Open Invite: This Wednesday
Here is a fundraiser I am cohosting, with proceeds going to local Democratic candidates and their Get Out the Vote Campaigns. This is an event for the "young" voters in Sarasota, so if you have been feeling as though your voice isn't heard because you're young, here is a great opportunity to speak up! There will be local candidates available for Q&A, along with live music, voter registration and volunteer information. Please let me know if you have questions.
Opinion Post
So Lehman Brothers has been forced into bankruptcy, with Henry Paulsen having declined any government bailout whatsoever. As a result, Merrill Lynch sought refuge in Bank of America, making BOA the largest bank in the world (meaning my depressingly small checking account is safe for now, thank you very much.)
So what? Why do I care?
I see all political issues as stemming from economic ones. The basic principles of our political parties are economic: Democrats favor larger, more centralized government, meaning a more interventionist government, which calls for stricter regulations and more economic involvement. Republicans traditionally favor smaller government, more states and individual rights, and less government intervention in all affairs, including economic. More economic intervention and bigger government translates to higher taxes and more social services coming from those funds. Less government intervention means more ups and downs into economy, translating in the ability to buy low and sell high. Investors profit from market fluctuation, whereas the middle class suffers.
Full disclosure: I am a registered Democrat, I work on the campaign for a local Democratic candidate, and I sit on the board of the Sarasota Young Democrats. I do not, however, believe in disparaging other parties. I respect the economic tenants and the ideology of the Republican party wholeheartedly, if their tactics and Giuliani's speech at the RNC made me puke.
So, back to Lehman brothers, and why I care. I support Paulsen's decision to let them fall. I also support Merrill Lynch's foresight to sacrifice itself to BOA. I believe in personal responsibility and the effect of consequences. Often, helping those who behave irresponsibly or recklessly(might I even add addictively? I mean, how can you deny the similarity between the rush of using and the thrill of making money hand over fist? I once knew a guy who tried to kick his cocaine habit by e-trading all day long, but I digress..) only serves to hurt them. Enabling, anyone?
When I see the practice of greed under the guise of "Republican" values, followed by the refusal to succumb even when faced with insurmountable debt and the hubris of Enron executives, I wonder exactly what we're up against. If we cannot trust the stewards of our greatest financial institutions to make shrewd decisions in the best interest of the greater good, where are we, exactly? When we bail out Freddie Mae and Fannie Mac, and the shareholders still get dividends checks, whom is protected?
What role does government play, exactly? More importantly, what role do we play?
Our first job is to PAY ATTENTION. I don't say this because I'm giving out grades or because I want stimulating class conversation. I say this because if we don't listen to what's happening, if we chalk it up to being too overwhelming or too complicated, then we let them get away with it. Greed feeds on fear and ignorance.
Our second job is DO SOMETHING. Vote. Volunteer. Speak up when you hear a cruel word or a smear or, my personal favorite whine, "My vote doesn't count." "I can't do anything." "I don't believe in government." COP OUT. The system as we know it is as it is because of the apathy of the masses. CARE, dammit!
So, we're on the hook for another $60 billion that the government won't bear. The Republican convention is more concerned with calling Obama a "celebrity" than addressing the hypocrisy of no government economic intervention but the expectation that the government will bail them out when they assume too much risk.
What are we supposed to do with that?
So what? Why do I care?
I see all political issues as stemming from economic ones. The basic principles of our political parties are economic: Democrats favor larger, more centralized government, meaning a more interventionist government, which calls for stricter regulations and more economic involvement. Republicans traditionally favor smaller government, more states and individual rights, and less government intervention in all affairs, including economic. More economic intervention and bigger government translates to higher taxes and more social services coming from those funds. Less government intervention means more ups and downs into economy, translating in the ability to buy low and sell high. Investors profit from market fluctuation, whereas the middle class suffers.
Full disclosure: I am a registered Democrat, I work on the campaign for a local Democratic candidate, and I sit on the board of the Sarasota Young Democrats. I do not, however, believe in disparaging other parties. I respect the economic tenants and the ideology of the Republican party wholeheartedly, if their tactics and Giuliani's speech at the RNC made me puke.
So, back to Lehman brothers, and why I care. I support Paulsen's decision to let them fall. I also support Merrill Lynch's foresight to sacrifice itself to BOA. I believe in personal responsibility and the effect of consequences. Often, helping those who behave irresponsibly or recklessly(might I even add addictively? I mean, how can you deny the similarity between the rush of using and the thrill of making money hand over fist? I once knew a guy who tried to kick his cocaine habit by e-trading all day long, but I digress..) only serves to hurt them. Enabling, anyone?
When I see the practice of greed under the guise of "Republican" values, followed by the refusal to succumb even when faced with insurmountable debt and the hubris of Enron executives, I wonder exactly what we're up against. If we cannot trust the stewards of our greatest financial institutions to make shrewd decisions in the best interest of the greater good, where are we, exactly? When we bail out Freddie Mae and Fannie Mac, and the shareholders still get dividends checks, whom is protected?
What role does government play, exactly? More importantly, what role do we play?
Our first job is to PAY ATTENTION. I don't say this because I'm giving out grades or because I want stimulating class conversation. I say this because if we don't listen to what's happening, if we chalk it up to being too overwhelming or too complicated, then we let them get away with it. Greed feeds on fear and ignorance.
Our second job is DO SOMETHING. Vote. Volunteer. Speak up when you hear a cruel word or a smear or, my personal favorite whine, "My vote doesn't count." "I can't do anything." "I don't believe in government." COP OUT. The system as we know it is as it is because of the apathy of the masses. CARE, dammit!
So, we're on the hook for another $60 billion that the government won't bear. The Republican convention is more concerned with calling Obama a "celebrity" than addressing the hypocrisy of no government economic intervention but the expectation that the government will bail them out when they assume too much risk.
What are we supposed to do with that?
Saturday, September 6, 2008
Ancient History: The Fall of Bear Stearns
In case you didn't catch the fallout the first time around, here is a link to an article from Vanity Fair detailing how Bear Stearns was rendered limb from limb. Full text here.
Look Monkey, Look!
So, while we are temporarily hypnotized by Governor Gidget, Mountain Woman, the Huffington Post asserts in this article that the Fed will be taking over Freddie Mac and Fannie Mae, as soon as this weekend.
Why should you look up from CSPAN long enough to pay attention to this? Well, here is another $5.5 TRILLION for your consumption. But wait, aren't FM and FM private corporations? Doesn't the Republican ideology, if we can call our parties ideological, shirk the government regulatory bodies in favor of free-market, balls-out money grubbing? Well, yes. The GOP opposes "big government" and the presence of regulatory bodies in the economic system. It is the party of Big Business, as well as the small business owners, who make up 80% of the business out there. So why, then, is the Fed bailing out private companies?
Because if they don't, we're finished. Greater Depression, anyone?
Freddie and Fannie, silly names aside, are liable for $5.5 trillion in mortgages. The way the subprime crisis works is that the mortgage lenders sold very risky loans to people who, on the whole, could not afford them. These loans were then bundled into CDO's (collateralized debt obligations) which were shadily rated A+ and then sold in parcels to pretty much every major bank anywhere. Banks who hold mortgages use those as assets against which they can borrow. As people began to default on, or not pay, their mortgages, the CDO's had nothing to back them, resulting in the banking failures we're been scratching our heads over since the beginning of the year.
FM and FM hold, according to Bloomberg, almost half of all mortgages in the country. Basically, if they fold, $5 trillion is flushed away, leaving the country in shambles, ruined and broke.
As I write this, an article on Bloomberg.com is announcing that Henry Paulson, Treasury Secretary and a man who looks like he could break your skull, will be placing FM and FM into "Conservatorship," and kick their CEO's to the side. Each quarter, the Fed will inject money into the companies as the losses dictate, meaning avoiding a huge taxpayer payout up front.
Why should you look up from CSPAN long enough to pay attention to this? Well, here is another $5.5 TRILLION for your consumption. But wait, aren't FM and FM private corporations? Doesn't the Republican ideology, if we can call our parties ideological, shirk the government regulatory bodies in favor of free-market, balls-out money grubbing? Well, yes. The GOP opposes "big government" and the presence of regulatory bodies in the economic system. It is the party of Big Business, as well as the small business owners, who make up 80% of the business out there. So why, then, is the Fed bailing out private companies?
Because if they don't, we're finished. Greater Depression, anyone?
Freddie and Fannie, silly names aside, are liable for $5.5 trillion in mortgages. The way the subprime crisis works is that the mortgage lenders sold very risky loans to people who, on the whole, could not afford them. These loans were then bundled into CDO's (collateralized debt obligations) which were shadily rated A+ and then sold in parcels to pretty much every major bank anywhere. Banks who hold mortgages use those as assets against which they can borrow. As people began to default on, or not pay, their mortgages, the CDO's had nothing to back them, resulting in the banking failures we're been scratching our heads over since the beginning of the year.
FM and FM hold, according to Bloomberg, almost half of all mortgages in the country. Basically, if they fold, $5 trillion is flushed away, leaving the country in shambles, ruined and broke.
As I write this, an article on Bloomberg.com is announcing that Henry Paulson, Treasury Secretary and a man who looks like he could break your skull, will be placing FM and FM into "Conservatorship," and kick their CEO's to the side. Each quarter, the Fed will inject money into the companies as the losses dictate, meaning avoiding a huge taxpayer payout up front.
Friday, September 5, 2008
Oh Gawker!
Wednesday, September 3, 2008
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