History Is This Really the Largest Financial Crisis in History?

[russ_watters]

This deserves its own thread:

This is being described as THE largest financial crisis in history. This is a national catastrophe.

1. By whom?
2. By what standards of measurement?

I have my own argument to make about why this is pure, unadulterated hyperbole, but it's your claim: I'd like to hear exactly why you think these things are true. And I would hope such an argument would be based on historical financial data. Statistics that show that what we are seeing now is worse than at any other time in our history.

Others are welcome too - others have made similar remarks. Let's hear it. Prove it.

 

[wildman]

Anyone here from Sweden? Apparently they had one of these a few years back. It seems they survived it ok. Maybe you all could give us some advice.

I understand it was worse than what we are suffering in the US. Is that right?

 

[turbo]

Russ, you know that this "crisis" is a lie designed to stampede idiots into giving taxpayer money to Wall Street speculators with NO oversight. The neoconservatives raiding our treasury (with Bush and Cheney holding the flashlights) have no pretense of fiscal responsibility, nor will the US taxpayer have more than a hope of recompense when the "bailed-out" companies start thriving. In this political economy, risk is socialized and dumped on us all, while profit is privatized and concentrated for the powerful. It's time that a few "conservative" apologists like yourself acknowledged this and helped to change things. Please help.

 

[OmCheeto]

This deserves its own thread:

This is being described as THE largest financial crisis in history. This is a national catastrophe.

1. By whom?
2. By what standards of measurement?

I have my own argument to make about why this is pure, unadulterated hyperbole, but it's your claim: I'd like to hear exactly why you think these things are true. And I would hope such an argument would be based on historical financial data. Statistics that show that what we are seeing now is worse than at any other time in our history.

Others are welcome too - others have made similar remarks. Let's hear it. Prove it.

Let's break this down.
Two statements have been made.

THE largest financial crisis in history.

This one could probably be argued for quite a while. The way I see it, the Earth has never had as much wealth, in totality, as it has had today, or at least two weeks ago. So I'd say I have to agree with Ivan. As a scalar value, this is the largest.

and

This is a national catastrophe.

Now on this point, I have to quote an old acquaintance of mine who said something to the effect that;"30 years of hindsight can really bring things into perspective", or something like that. Therefore, I'm afraid I'm going to have to side with you on this one Russ. Catastrophe's come and go like Katrina's and Ike's. We really won't know if it's a catastrophe for quite a while. I mean really, have any brokers jumped out of windows yet?

btw, did anyone see that google is giving away 10 million dollar prizes for good ideas? I was thinking of nominating Ivan for his algaeoil thingy. I know the idea has been around for about 70 years, but what the hell else is anyone doing, besides pissing and moaning.

TG4GD

 

[vanesch]

Now, if you guys could keep it a *national* catastrophe, and not bother others with it, that would be already great

 

[Astronuc]

For some it's a catastrophe. Some people lost much or most of the wealth they thought they had.

WaMu becomes biggest bank to fail in US history
http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/washington_mutual_future

NEW YORK - As the debate over a $700 billion bank bailout rages on in Washington, one of the nation's largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market.

The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July.

One positive is that the sale of WaMu's assets to JPMorgan Chase prevents the thrift's collapse from depleting the FDIC's insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation's most momentous financial crisis since the Great Depression.

Because of WaMu's souring mortgages and other risky debt, JPMorgan plans to write down WaMu's loan portfolio by about $31 billion — a figure that could change if the government goes through with its bailout plan and JPMorgan decides to take advantage of it.

It's hard to assess the magnitude of the current financial crisis, since no one apparently knows the value of the debt. Certainly, many financial companies whose stock got beaten down by 70, 80, 90+% represent a true loss for those who bought the stocks earlier this year or last year. And then there all those derivatives and mortgage backed securities which have contributed to losses.

It perhaps represents a loss of wealth and a significant reduction in the potential of standard of living (e.g. the father of a family acquaintance lost about $400 K last week).

Let's see what happens with industrial output, exports and unemployment during the next three months.

I agree with Om, that catastrophes come and go like Ike and Katrina. Those poor folks in Galveston and the Bolivar Peninsula (and elsewhere along the Gulf Coast) who lost their homes and businesses/jobs, have suffered a real catastrophe.

And I've heard rumblings of similar financial problems in the UK and EU, but perhaps not of the magnitude as the US.

 

[Art]

The catastrophe hasn't happened yet but will if the financial sector isn't stabilised. It will be evidenced by first more banks failing and subsequent job losses followed by companies in other sectors failing as their access to credit is cut off leading to more job losses and by pension funds being unable to meet their commitments meaning retirees lose their income, as their pension funds investments tank, accompanied by a further collapse in the housing market, dropping even more people into the pit of negative equity.

As consumer demand plummets as a result of lower/no incomes, less confidence, and an inability to borrow, manufacturing and service industries will be the next in the line of dominoes to fall, leading to more job losses; and so it will continue to spiral downwards. Without intervention now to prop up the financial sector I'd give it 12-18 months before the financial crisis you have on your hands left unchecked becomes an economic catastrophe.

 

[Briant232]

Russ, you know that this "crisis" is a lie designed to stampede idiots into giving taxpayer money to Wall Street speculators with NO oversight. The neoconservatives raiding our treasury (with Bush and Cheney holding the flashlights) have no pretense of fiscal responsibility, nor will the US taxpayer have more than a hope of recompense when the "bailed-out" companies start thriving. . . .

Absolutley. It remindes me of the talk of mushroom clouds before the invsion of Iraq. It also reminds me of the swindlers who urge you to "act now before it's too late" to get the deal du jour.

I hope people will see how on-the-same-page the democrats and republicans are; even though they pretend to disagree, they agree about the thing that matters most to their real constituents--the money, your money.

 

[turbo]

Please, everyone who has more than two brain-cells, write to your congressional representatives and tell them NOT to fund this faux "bailout". The current stagnation in the financial market is not necessarily indicative of the health of the market, but is likely more due to the "smart money" waiting to see where the "bailout" money will go and who will benefit. The longer Congress dithers around, the longer the financial stagnation will last, and after a few weeks, there WILL be long-term damage.

 

[Art]

Please, everyone who has more than two brain-cells, write to your congressional representatives and tell them NOT to fund this faux "bailout". The current stagnation in the financial market is not necessarily indicative of the health of the market, but is likely more due to the "smart money" waiting to see where the "bailout" money will go and who will benefit. The longer Congress dithers around, the longer the financial stagnation will last, and after a few weeks, there WILL be long-term damage.

How do you see the current financial crisis being resolved without gov't intervention (money) to restore confidence in the financial institutions??

 

[vanesch]

Absolutley. It remindes me of the talk of mushroom clouds before the invsion of Iraq. It also reminds me of the swindlers who urge you to "act now before it's too late" to get the deal du jour.

I hope people will see how on-the-same-page the democrats and republicans are; even though they pretend to disagree, they agree about the thing that matters most to their real constituents--the money, your money.

Isn't this the danger of having cried wolf several times ? Now that the wolf is there, you think it is again just a trick...

 

[turbo]

How do you see the current financial crisis being resolved without gov't intervention (money) to restore confidence in the financial institutions??

When a company's debts exceed its assets and it cannot borrow its way out of trouble, another company will buy it. The FDIC had to step in and seize Washington Mutual due to its overwhelming load of bad debt and lack of liquidity, but JP Morgan Chase bought WaMu's assets and owns the company today. It is not necessary to throw taxpayer money at every real or perceived problem. There is a LOT of money floating around out there looking for a place to invest, and when banks or other companies lose value to the point that they look like bargains, they will be bought. That's the way that capitalism is supposed to work. This "bailout" plan is a raid on the Treasury by neo-con insiders who hope that we are too stupid to understand what they are doing.

 

[turbo]

Again, to everybody who understands just how crooked this "bailout" plan is, PLEASE write to your congressional representatives and tell them to oppose this plan. All of the House members and 1/3 of the Senators are up for re-election in about 40 days, and you will have no more influence over them at any other time than you have right now. There are very few true fiscal conservatives left in our government, and we have to back them as they resist this bailout.

 

[Art]

When a company's debts exceed its assets and it cannot borrow its way out of trouble, another company will buy it. The FDIC had to step in and seize Washington Mutual due to its overwhelming load of bad debt and lack of liquidity, but JP Morgan Chase bought WaMu's assets and owns the company today. It is not necessary to throw taxpayer money at every real or perceived problem. There is a LOT of money floating around out there looking for a place to invest, and when banks or other companies lose value to the point that they look like bargains, they will be bought. That's the way that capitalism is supposed to work. This "bailout" plan is a raid on the Treasury by neo-con insiders who hope that we are too stupid to understand what they are doing.

I think you are in a minority on this issue. I don't know of any serious commentators who claim a rescue plan is unnecessary. The current divisions are merely over the shape and form it should take.

 

[turbo]

I think you are in a minority on this issue. I don't know of any serious commentators who claim a rescue plan is unnecessary. The current divisions are merely over the shape and form it should take.

With the WaMu collapse yesterday, we have just experienced the largest single bank failure in the country's history. The sun came up this morning, as always, and JP Morgan Chase has some new assets.

The constant wailing about the financial markets is not supported by the facts. There are people and businesses with lots of money to invest, and when business assets are depreciated to what investors feel is a realistic market value, they will buy. Right now, people are afraid to buy into companies that are heavily "invested" (a ridiculous term in this instance) in derivatives or in bundled debt products because there is no way to assess the risk inherent in those holdings.

This situation was brewed by the speculators who stand to gain from the "bailout". If the speculators were willing to write down their bad investments, they and their stock-holders would lose some money, but (if they acted responsibly) their leaner, trimmer organizations with safer debt would attract new investments.

 

[Amp1]

The bailout is to hopefully stop a domino effect described a little in post #7 by Art. The neo-cons do want to "RAID" the treasury as posted several times above. I think the restriction or elimination of 'Golden Parachutes' will definitely help and not hinder. In fact, I think if some of those execs don't get it - they will whistle-blow which is why this faux plan is being rushed.

 

[turbo]

If the banking industry wants "bail-out" money, it should come at a price. Here are some suggestions:
1) The industry needs to be re-regulated to prevent a repeat of this economic hostage crisis.
2) Any company wanting taxpayer money cannot sell us taxpayers their junk investments, but must issue preferred stock to be held by the treasury.
3) Executive compensation must be structured to reward long-term stability, not short-term profits. This means that issuing short-term stock options to executives should be forbidden by law. (Would executives engage in risky short-term strategies if they knew that their stock options could not be exercised until 10 or more years after they were issued?)
4) I would levy a surtax on banks and investment firms to pay for the oversight necessary to keep them honest. The SEC needs to be beefed up to provide adequate oversight, and that cost should not fall on the citizenry.

I'm sure that there are lots of good ideas floating around out there, but if I were a politician being railroaded into approving a bailout, the plan would have to contain these features at a minimum.

 

[Ivan Seeking]

This deserves its own thread: 1. By whom?
2. By what standards of measurement?

I will post more later, but the short answer for now: The President that you have always defended.

Are you now admitting that [after eight years of lies and abuse of power] he is a liar and a con? Are you now admitting that he is raping the country?

 

[Ivan Seeking]

Furthermore, are you suggesting that McCain is taking advantage of this and stoking the fires of fear when there is no emergency?

I have NEVER seen a candidate announce the suspension of his campaign. Was this just showboating by a con? Was McCain blowing smoke out of rear by saying that he would fire the chairman of the SEC [which he can't do, btw] Is that what we are to conclude from your post?

 

[mheslep]

For some it's a catastrophe. Some people lost much or most of the wealth they thought they had...

WaMu becomes biggest bank to fail in US history
http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/washington_mutual_future
...

The 'lost much or most' followed by the WaMu story implies the WaMu seizure&sale was where this happened? Who was wiped out in the WaMu collapse?

 

[Ivan Seeking]

A must-watch to gain an understanding of the crisis

 

[Astronuc]

The 'lost much or most' followed by the WaMu story implies the WaMu seizure&sale was where this happened? Who was wiped out in the WaMu collapse?

I don't know what equities were associated with the loss. Certainly those holding WaMu stock have lost a lot, and that is just one of many distressed financial institutions.

 

[Cyrus]

A must-watch to gain an understanding of the crisis

Errr...that was terrible.

 

[Ivan Seeking]

Credit Frozen Ahead Of Bailout

Errr...that was terrible.

Obviously you haven't been watching CNN.

Payrolls at risk

markets gave a glaring example of the freeze that has prompted the widespread support for some type of government relief package. Lending between banks is getting more costly, as the spread between the three-month London interbank offered rate (3.77%) and overnight Libor (2.56%) increased to 121 basis points, from 61 Wednesday. Meanwhile, the difference between three-month Libor and the yield on a three-month U.S. Treasury bill (0.10%) was near all-time highs at 367 basis points.

Also, another crisis appears to be simmering in the commercial paper market, according to Federal Reserve data. The Fed's figures show the U.S. commercial paper market shrank by over $100.0 billion in the past two weeks, as the ongoing calamity in credit markets has shaken investor confidence in virtually all instruments other than government debt.

According to Jerry Marlatt, a partner at law firm Clifford Chance, if the commercial paper market grinds to a halt it will have huge repercussions for Main Street, since many companies fund their payrolls by issuing such debt. [continued]

http://www.forbes.com/markets/2008/09/25/briefing-closer-bailout-markets-equity-cx_ss_0925markets34.html

 

[Ivan Seeking]

"Economic Pearl Harbor"

Billionaire Warren Buffett, calling turmoil in the markets an "economic Pearl Harbor," said his $5 billion investment in Goldman Sachs Group Inc. is an endorsement of the Treasury's $700 billion bank rescue plan.

"I am betting on the Congress doing the right thing for the American public and passing this bill," Buffett said Wednesday on cable channel CNBC. "I certainly have a vote of confidence in Goldman and vote of confidence in Congress." [continued]

http://www.sltrib.com/business/ci_10555903

 

[Ivan Seeking]

As linked in the thread referenced in the op:

According to House Minority Leader John Boehner, and Senior Senator and Chairman of the Senate Banking Committee, Chris Dodd: The situation is so dire that it cannot be publically discussed.

 

[TheStatutoryApe]

Furthermore, are you suggesting that McCain is taking advantage of this and stoking the fires of fear when there is no emergency?

I have NEVER seen a candidate announce the suspension of his campaign. Was this just showboating by a con? Was McCain blowing smoke out of rear by saying that he would fire the chairman of the SEC [which he can't do, btw] Is that what we are to conclude from your post?

Local conservative radio talk show hosts John & Ken described him (sarcasticly) as "riding in on his white horse" and said he isn't known for experience in dealing with money save for his involvement in the Keating Five scandal. They also tear Palin apart on a daily basis. Yet somehow, for some reason, they still plan on voting for McCain if for anyone.

 

[WhoWee]

This is a must read for anyone concerned about the current economic crisis. Warren Buffet disclosed this information to his shareholders back in May...

http://www.marketwatch.com/news/story/derivatives-new-ticking-time-bomb/story.aspx?guid={B9E54A5D-4796-4D0D-AC9E-D9124B59D436}

This week, the SEC chairman testified in Congress and specified that $60 to $183 TRILLION in derivates is at risk and unregulated.

 

[WhoWee]

This is also a must read regarding the Lehman failure and the concern over derivates last week...

http://news.yahoo.com/s/nm/20080914/bs_nm/lehman_specialsession_dc_3

Very Important!

 

[OmCheeto]

This is also a must read regarding the Lehman failure and the concern over derivates last week...

http://news.yahoo.com/s/nm/20080914/bs_nm/lehman_specialsession_dc_3

Very Important!

Wow. Is that some kind of hacker introduced number?

http://news.yahoo.com/s/nm/20080914/bs_nm/lehman_specialsession_dc_3
NEW YORK (Reuters) - A rare emergency trading session opened Sunday afternoon to allow Wall Street dealers in the $455 trillion derivatives market reduce their exposure to a potential bankruptcy filing by Lehman Brothers.

4.55E+14 dollars divided by 6.0E+9 humans = $75,833.33 per human.

Aren't 3 out of 6 earthlings making about $100 a year?

Did someone overextend their futures somewhere in outer Mongolia, or Siberia? Or did someone hedge their funds on Jupiter real estate.

$455,000,000,000,000.00! Ah! hahahahahahaha!

Silly humans...

 

[mheslep]

Wow. Is that some kind of hacker introduced number?



4.55E+14 dollars divided by 6.0E+9 humans = $75,833.33 per human.

Aren't 3 out of 6 earthlings making about $100 a year?

Did someone overextend their futures somewhere in outer Mongolia, or Siberia? Or did someone hedge their funds on Jupiter real estate.

$455,000,000,000,000.00! Ah! hahahahahahaha!

Silly humans...

That is a volume of transactions figure, not a debt figure that you can spread over the population.

 

[Art]

That is a volume of transactions figure, not a debt figure that you can spread over the population.

I read recently global debt is $100 trillion and global GDP is $33 trillion.

 

[WhoWee]

The basic concerns about derivatives are 1.) huge numbers, 2.) often done in private, 3.) controlled (generally) by small groups of people, 4.) NOBODY outside of their group REALLY understands them...including the Fed or SEC chairs...certainly not Congress.

Compare this to the scientific community...nobody hands over unlimited resources to a few researchers (who do something nobody else understands) without asking them what they are doing and keeping them accountable.

Nobody wants oversight...but if you read the Buffet article...the combined real estate value of the entire world is only $75 Trillion.

 

[OmCheeto]

That is a volume of transactions figure, not a debt figure that you can spread over the population.

Well then DeFazio's idea is starting to make sense.

1/4 of 1% on $4.55E+14 = $1.14 trillion / year.

hmmm... just enough to bail us out.

A sales tax on the uber-rich.

And has the idea of taxing wealth been discussed? Or am I being a communist left wing liberal for even bringing it up?

hmmm... maybe not:

http://www.taxprophet.com/faq/991128.htm
1999
Donald Trump’s Wealth Tax Proposal

Billionaire Donald Trump, a prospective Reform Party candidate, has dropped a political bomb on his fellow tycoons: He plans to tax their accumulated wealth and pay off the National Debt in a single year!

Trump has called for a one-time 14.25 percent tax on the net worth of individuals and trusts worth $10 million or more. Trump says this would generate $5.7 trillion in new taxes which would then be used to eliminate the National Debt.

Well I guess that would have been a moot tax given that the debt is now around $9 trillion+. And it probably would have scared all the rich people away to Switzerland or somewhere.

Perhaps we should make it a permanent, less drastic pill.
I have to pay property taxes. Why shouldn't the super-rich have to do the same?

Say 0.5% of anyone worth over $10 million, 0.75% over $100 million, and 1% for those over a billion. With no loopholes of course.

Everyone in the Forbes 400 is worth over a billion, with a net worth of $1.57 trillion, so 1% of that per year would be $15.7 billion, which is half of their combined wealth increase last year, which translates to a 50% tax bracket, which makes me a commie left wing liberal... Donald! What were we thinking!?

But anyways, I think these ideas may make the markets more "efficient" in the long run.

 

[WhoWee]

We need to create an environment that attracts investment into a competitive manufacturing base at home. Before someone says it, manufacturing doesn't have to mean pollution.

Our companies need to quit thinking in 90 day increments and start thinking long term.

Just imagine if after WWII, we (yes WE THE PEOPLE) had not just rebuilt the German and Japanese industrial complex...but retained an equity stake. Instead, corporate America loaned them money and received a small return...whoopee!

We're making the same mistake in Iraq...they (the new Iraqui leadership) need to pay for our help...they have resources...or they need to accept the responsibility of governance. We can't afford to be there. Please don't tell me we shouldn't have gone in or they wouldn't have a problem...if we didn't go in...they wouldn't even BE the leadership.

I've strayed off point. The Chinese think in 250 year increments. Big surprise, the current strategy is to create business at any cost...agree to produce anything for less...and become the only manufacturer.

Guess what comes next? Remember supply and demand?

To make things worse...now we rely on them to fund our (Government) operations...what's the current debt number $500,000,000,000?

One of these days they're going to say...NO...your new rate is 12% or 15% or 20%...then what will we do...sell nukes?

We have a chance to turn things around...we can't wait 4 more years or until the next big crisis comes along...we need decisive leadership RIGHT NOW. I think McCain has the most potential...I also think Obama can be VERY helpful to the country if he goes back to Washington and fights for what he believes in...he's young and will have another chance...he's not ready.

 

[turbo]

We have a chance to turn things around...we can't wait 4 more years or until the next big crisis comes along...we need decisive leadership RIGHT NOW. I think McCain has the most potential...I also think Obama can be VERY helpful to the country if he goes back to Washington and fights for what he believes in...he's young and will have another chance...he's not ready.

McCain won't fix the economy. It's people like him and his close buddy Phil Gramm that stripped out all the safeguards and oversight over the financial markets that engineered this problem. McCain has been part of the problem since well before the Keating 5 debacle came to light, and he has not changed one bit. Electing McCain to "fix" the economy is ridiculous. He and Gramm and their buddies are NOT conservatives by any stretch of the imagination - they are radical neo-cons who de-regulated us into this mess. Don't listen to what McCain says - pay attention to what he has done.

 

[WhoWee]

The problem with Obama is he STILL wants to increase spending.

 

[LowlyPion]

The problem with Obama is he STILL wants to increase spending.

He's already on the record suggesting that the $700B plan would cause some delay of implementing programs. Like Clinton before him he seems to have a much firmer grasp of understanding the need to reduce the deficit than the tax-reduction, anti-regulation oversight, spend like drunken sailor Republicans.

You'll never hear McCain talking about PayGo with his devotion to un-taxing the rich.

 

[turbo]

The problem with Obama is he STILL wants to increase spending.

Don't listen to campaign talk unless you're willing to dig into the background of the statements. Every candidate WILL increase spending in some programs. You can either vote for someone who will increase federal revenues to cover the spending, or you can vote for someone who will increase spending, reduce revenues by giving tax breaks to the wealthy, and borrowing money from China et al, to finance the spending. The former is derided as "tax and spend" by neo-cons, who prefer to "borrow and spend" increasing the deficit and the national debt while rewarding their friends. When Clinton left office, there was a surplus. Where's the surplus now?

 

[OmCheeto]

Don't listen to what McCain says - pay attention to what he has done.

Why you dirty rotten bull-goose loony scoundrel...

That was my line:

I posted my research of Obama's voting record on key bills last month in the https://www.physicsforums.com/showpost.php?p=1572557&postcount=49" thread. He voted the same way I would have. He therefore represents my values. I will therefore vote for him, regardless of what he says. Because it's been my experience that in order to get elected, all successful politicians will say whatever they think you want to hear.

Hence, I never listen to any of them.

Except for the debate yesterday. I figured I should at least know what our next president sounds like.

 

[WhoWee]

I'll say it again...we can't think in 90 day terms anymore...and we also can't make everyone happy, fat and comfortable.

The world is tired of our arrogance and many are enjoying our struggle.

We've lowered our educational standards (and disguised it as an improvement) in the name of equality. In the mean time, our graduate programs are filled with Chinese (mostly) and other foreigners. What US citizen are we helping (even with a BA/BS) when the only job we prepare them for is a retail sales or management training position? We need HIGHER educational standards...and we need safe schools (not war zones) where students have a chance to learn. Search career builder or monster...lots of commission only sales jobs for recent graduates.

We build new schools that we can't afford to operate (prisons also)...and staff them with teachers that...aren't all really great...for too many teachers - GETTING the job was the goal.

We reward unwed mothers for having children and emancipate teen mothers. We penalize low income people who want to work, but lose benefits if they earn too much.

To cite a specific example of waste...in my state...a case worker can decide that a hospital located 150 miles away (Cleveland Clinic for example) is better than the local hospital (that's in the same SuperMed system as Cleve Clinic)...arrange a taxi ride at 8 AM for a 10:00 appointment, have the taxi wait all day and return the person from the distant (very expensive Cleve Clinic) hospital in the afternoon. That same case worker can decide it isn't convenient for this person to take public transportation (even though it picks up a block from their home and drops off at the door of the employer) to work in a call center paying $8/hr...4 hour shift...and arrange for taxi service to and from for as long as the person "requires" assistance.

We also penalize married couples.

We have an estimated 31% fraud rate in our current government medical program...and want to expand it. We allow predatory lending and marketing practices (nursing home admission tactics are deplorable) against our senior citizens.

We allow food stamps to be used to pay for overpriced (target marketed) brand names instead of generic or (pre-negotiated rates) discounted brands...how much money could be saved if food manufacturers had to bid on food stamp participation.

We allow technologies to be suppressed and block responsible US companies from drilling in places where un-responsible foreign companies are more than happy to fill the void. I don't trust T. Boone Pickens too much (he definitely has something to gain) but he's right about fueling trucks with natural gas. Most truck stops are in remote areas...near gas wells and pipelines, and trucks have storage space for tanks. The investment to operate passenger cars in this manner is too investment intensive. Back on point, we have an ample gasoline supply...no shortages of gasoline...the problem is the "middle of the barrel"...we need to use less diesel and the price of gas will fall drastically.

There is WASTE everywhere.

I recently wrote to my Governor to ask how much money our state spends per year cutting the grass along the freeway system. I don't want anyone to lose their job...I suggested they save the fuel, let the grass grow and use the labor to instead plant trees and erect windmills. If you think I'm strange...take a look at the wild flowers on the outside of the freeway and on the hillsides...where they don't cut...much nicer to look at than a burned out brown yard. I figure the highway system is already (there and ugly) so why not add some windmills and wires and hide them with flowers and trees?

We can blame the problems on presidents, congress, Wall Street...the system...but WE THE PEOPLE need to start thinking for ourselves and ultimately hold our elected politicians accountable.

If someone promises to do something...they need to do it! If they don't...(to quote Glenn Beck) "get out the pitchforks".

To reiterate, my problem with Obama is that he STILL wants to increase spending...McCain CLAIMS he now understands spending must be cut.

Obama said he'll try to spend (if he can find the money)...McCain said he'll try to make cuts.

If neither can be trusted at their word...then we need to find a way to keep them accountable.

How about public spankings...or maybe we should install some of those old wooden arm/head shackles on the steps of the Capitol...so the citizens can speak to any politicians who lie...in person.

Just a thought.

 

[Artman]

The ones who will suffer in this are the main street and side street people. I have a friend who has one of those sub prime loans and he now works three jobs, one as an engineer, to try and meet his mortgage payment, which continues to rise. This bill needs to fix interest rates and limit duration and set limits for any non fixed rate loans to reasonable levels. Anything else is legalized loan sharking and that is the kind of banking that caused this.

In my opinion, this would work itself out, but it would end up hurting those who can least afford it, the taxpayers.

 

[WhoWee]

I too have friends in trouble.

My closest friend of 40 years has, since 911, lost a total of 5 car wash and restaurant businesses.

The reasons vary (I'm familiar because I helped him analyze the numbers)...38% same store slow down in sales, higher minimum wages, 58% cumulative increase on utilities, 42% cumulative increase on major items cost of goods sold, health insurance cost increase of 89%, 2 parcels were owned by (2 different) investors and were both sold out from under him when the property could not be developed to it's full potential...lease allowed for cancellation (bad attorney and the "investor" was his partners (on that location) father...supposed to be able to trust him) in the event of sale of property at new owners option. New owner tried to double the rent.

Another property involved a pre-engineered modular building that had to be moved when the plaza was sold to the largest importer of Chinese goods in the world. The list goes on and on and on.

Somehow he's managed to stay in his home (although his mortgage is with EMC/Bear Stearns and is currently interest only...future unclear but somehow he's only one month behind) and live off of credit cards between opportunities. He has never quit...he's very inspirational to me.

He does consulting work, sells health and life insurance, does tax recovery work, works part time at Home Depot selling water systems, works part time on weekends counting inventory. and is a bird dog (finds businesses) for about 2 to 3 manufacturing companies, he's also trying to sell his car wash and restaurant equipment on ebay...but no buyers...just non-paying bidders and about $500 in fees at last gripe. His wife is also trying...2 degrees and all she can find is part time teaching positions...no full time contracts OR BENEFITS...she's an English teacher...and doesn't coach (except for free in the community soccer league).

Aside from the lease agreement oversight (that he depended upon the lawyer and partner's father)...NONE OF THIS HAS BEEN HIS FAULT...he's a GOOD guy, the first to help everyone, he's a professional restaurant executive and ran a good business model. His locations were sharp, people well trained food or services good, everything reasonably priced (hot dogs $.89...had to raise to $.99 after absorbing 100% cost increase...sales dropped 50% as a result), had sustained 5% local advertising and cross promotion...the guy knows his business...now he's working (I count 8 jobs total) to keep a roof over his wife and 4 children.

This guy should be employable (not considered over-qualified - translation costs too much). He made over $100,000 per year back in 1982 as a restaurant chain executive running hundreds of locations and now he's busted out...and will have to sell his home at a loss and move...if he can find a decent paying job somewhere. He said he might move to Minnesota (IF they offer him a job...he's over qualified) and work for Burger King...$40,000 to start on a fast track to District Manager program running 3 or 4 locations...after 1 year $60,000...but he'll lose a minimum $150,000 on his house and they won't help with the move.

He voted for Kerry and Gore and despises Bush (Clinton(s) too...blames NAFTA and Hillary ties to (that big retail company prospering in China) for a lot of our problems...(I agree).

He has a McCain sign in his yard...doesn't think Obama is qualified (or Palin as far as that goes). I agree again.