Blogging About the Bailout From the Netherworlds of Anti-Obama Territory

I was on the road all day yesterday driving from Houston to Pensacola to visit my parental types with my sister. Besides all the damn convoys of electricity and tree-trimming trucks heading back home after helping get Houston power back up following Hurricane Ike (my sister says thank you) driving in the left lane trying to give me an aneurysm, the ride went pretty well. All I’m saying is that I don’t know what South Texas and South Louisiana did to make baby jesus mad. Who knew hurricanes were such a useful tool of divine justice?

As I’m playing Highway Commando and trying to make good time, we get a call that the House voted against the bailout. Against the bailout! We immediately turned my new XM radio (which rocks hard) to the news stations – which was fun because the first thing we heard was Boehner and his fellow boners blaming Pelosi for the failure of Republicans to vote for the bailout package. Apparently, Pelosi gave some partisan speech, which pissed off quite a few of the Repubs so much, they forgot their vote would affect the entire U.S. economy and that of the rest of the world and decided to use their vote for political gamesmanship and spit in Pelosi’s glossy eye with a “Nay.” What word am I thinking of? It’s another word for donkeys… Oh, yeah – Jackasses!!

Who gives a shit about people’s retirement packages? Who gives a shit about companies being able to meet payroll? Mortgages, car loans, grocery bills…who cares, who cares, who cares? The American people have been fed a lot of baloney about the free market and American capitalism and decided to call their representatives, instructing them NOT to vote for the bailout. And the House reps actually claim they listened to these people – these people who have not one iota of understanding about how the markets work and what a catastrophe it will be if the bailout fails and allows the markets to wallow, freezing credit and large portion of the exchange of monies. Even my Republican family – who is watching the retirement upon which they currently live head toward the drain – was astounded at the stratospheric stupidity of these politicians.

Just real quick – the House Repubs are LYING when they said they’re voting no because of their constituents. They’re voting no because of lobbyists. As we speak, K Street is in a tizzy over golden parachutes and regulation and anything that might redistribute wealth in this country and is threatening all those little Congresspeople up for reelection. Three words: constituents my ass. Don’t insult me. I’m mean, I’m a blogger, for chrissakes.

I don’t think this current situation is altogether a bad thing.

Pick your jaw up off the ground and take a breath.

First of all, the level of education of the American public in the areas of economics, finance, credit, etc. has increased immensely. If we have to feel pain now so that our entire country operates with a few more smarts and a tad more responsibility, it is worth it. The people of this country have been told that their monthly income should not determine their standard of living. Credit was the answer to everything, and was easy to access, encouraging every Tom, Dick, Harriet, Rumor, Tallulah and Scout to spend those george washingtons without any attention to budgets and saving. Economic retards, as it were. I used to be one. These are my people.

Well, I’ve moved on – slapped in the face by a low FICO score, and it’s time for the American people to do so as well. Hopefully, this economic crisis will move us in that direction.

So, have a margarita, a mojito, a martini, a miller lite or whatever it takes to get your blood pressure down; then save money, diversify your investments, purchase cars and homes  beneath the amount you are approved for, stop trying to keep up with the Joneses, learn the language of finance and grow old, fat and happy (well, not fat).

That’s silver lining numero uno. The next, OBVIOUSLY, is the political fallout.

How fun! How tickling! How fucking hysterical!

The Democrats are about to take over the majority of the House and the Senate and get the Executive branch. And what happens? The House Repubs group together to collectively shoot themselves in the foot and take McCain down with them. Well, yeee-fucking–haw! I didn’t think this election season could get better AFTER McCain’s fake suspension, but I was gloriously mistaken. If I wasn’t in my parents’ Republican household, I’d be cranking up all the angry liberal commentary on the boob tube I could and just enjoy watching the conservative avalanche. God, it’s like Festivus came early this year. I don’t have anything else on my wishlist.

And it only gets better. The icing this week will be the Biden-Palin debate. Even if Palin does well – and I hope she does – Biden will be drowning our little sassy Republican VP candidate in facts, names, dates, details of overseas trips. And I love Gwen Ifill. Seriously, I think we would be friends in real life.

Ultimate conclusion 09.30.08: Keep yer panties on, because the economy will do much better under Obama than McCain – so get out there and make sure your vote is on the right side of future prosperity.

And wish me well as I try to keep my angry, foul liberal mouth in check just a little bit. Because my mom (who is not crazy conversative) still hits. Backhands, to be more specific. (As my sister will testify.)


7 Responses to “Blogging About the Bailout From the Netherworlds of Anti-Obama Territory”

  1. 1 sandysays1
    September 30, 2008 at 8:39 pm

    Nope your wrong. It will do equally poor under each, unless you’re rich. They’re all controlled by the same people. You’re young and haven’t seen this before. The silver-tongues always go after the young. Neither McCain or Obama are worth a slimy shit. If you want the whole list of how every Rep voted on the bailout, check my site. SandySays1.wordpress.com

  2. 2 Rob
    October 3, 2008 at 1:48 pm

    I have been waiting for an economic blog from you, OH HO HO HOOOOOOOO! and I got one, yay!

    So, first off, I’m one of the many MANY that called to say a resounding “HELL NO” to the bailout package (that just passed the house a 2nd time around).

    Let me pour on this topic some knowledge that was missed in your blog.

    1 – Inflation. People better be worried about this, including you, your family, your dog, the postman, the grocery clerk, etc. Where does this magic 700 billion come from? Why we make it up out of thin air of course.

    2 – Prices will rise due to inflation. So this means everything you buy, will cost more, because the dollar is worth less. Have any doubt about that? Look at prices 2 years ago and now. It’s not due to strictly “gas prices” because that’s absorbed by the truckers getting shafted and getting paid vs. the cost of gas (ask a trucker about how his bank account has done in the past couple years).

    3 – People who are barely scraping by right now will more than likely not be able to pay their mortgage in a year or so because of reason 1 and 2 above

    4 – These “financial institutions” who fucked around with mortgage backed securities were dumbasses and we just bailed them out, so guess what? Now they’ll be back when the people listed in #3 above default on their mortgage. So, 1&2 cause 3 which will cause 4.

    5 – Guess who’ll be stuck with the bill for all of the above? That’s right, the taxpayer, again, will foot the bill and we’ll bail out the same crap-tastic financial institutions.

    6 – Can you go to #1 and read 1-5 again. There ya go. Welcome to the cycle that we’re now going to be stuck in until the economic collapse of a lifetime occurs. I’m fairly certain that I would rather be wrong, but if there’s any economic genius (you included, Mer) who can prove this to be wrong, I’m all ears.

    We’re fucked.

  3. October 6, 2008 at 6:15 pm

    rob –
    First off, the basic break in your cycle would come in #4. This crisis will result in tightening regulations, which will help prevent the predatory lending practices which produced much of this crisis.

    But in analyzing whether this bailout should or should not go forward, you have to start by looking at the causes of the financial crisis. When the economy was doing well in the nineties and there was a lot of cash floating around the U.S., much of that cash-flow was directed toward the housing market. Newer technologies allowed for the building of cheaper houses and we had a development boom that triggered a development bubble after the market was saturated with qualified home buyers.

    There were more homes than qualified buyers, so what did the financial institutions do? They approved the purchase of homes by people who could not afford them. Things were great, so the credit industry approved the issuing of cash to people who were not qualified for these new debts. And these credit companies got greedy. They approved loans for fast cash inherent in closing costs. There was a lot of money injected into the market, which caused high inflation and a devaluation of the dollar. Rises in prices will always occur – what has to be watched is how proportionate they are to the rise in wages. And they have been very disproportionate for quite a while.

    Now, the mortgage companies took their fast cash and ran by packaging the mortgages together, cut up them up and resold them. Because all of these packages stood on a foundation of people who could not meet their financial obligations – especially adjustable rate mortgages – the financial giants lost money. Too much money, which affected their lines of credit and ability to borrow from world institutions.

    Here’s where it gets interesting. Had appropriate regulations been in place, had some of them not been contravened by legislation designed by Phil Gramm and his fellow congressmen (and signed by Bill Clinton), it would have been harder for the credit industry to act so inappropriately.

    So, you have two options. One is to not bailout these huge financial giants. This will cause a paralysis in the credit industry and a continuation of the crash in the stock market. The domino effect will be people unable obtain financing, make payroll, job loss, buy groceries, make house and car payments, etc. The crash will be much larger than what we’re experiencing.

    With the bailout package option, we’re not simply going to have a huge flood of cash into the market – which will cause some inflation, but not MASS inflation – we’re going to simply lubricate the financial institutions’ ability to make loans and keep the financial industry from completely seizing up, which would have monumentally disastrous consequences.

    Also, much of the anti-bailout argument is to let the market correct itself. I have quite a few issues with this theory. First of all, we do not have an open, free market. The US market is not unto itself. It is intertwined with the global economy and markets of other countries – many of which are regulated. Secondly, our market is not open because an open market requires transparency. Not only is our corporate sector NOT transparent, corporations collude and cooperate to keep wealth at the top of the financial sector. Thirdly, you cannot mathematically predict the behavior of humans. The theory of capitalism and free market tries to predict human behavior, which is impossible. The idea of American capitalism is nice and cute, but an impossibility – which means we must have effective regulation to ensure financial stability.

    A bailout is the lesser of two evils. I’m sure they decided on $700 billion by throwing a dart at the wall and it landed on 700. That sucks. Furthermore, giving Paulson unquestionable authority over the bailout was ridiculous, as the administration quickly discovered.

    I understand your cycle argument, but it’s too simplistic, doesn’t take into account the underlying causes of the financial crisis, and doesn’t present a solution – only a doomsday scenario. If you don’t think we should have a bailout package, what do you think we should do solve this crisis? I certainly think not doing anything would be enormously detrimental.

    Also, if you’re waiting for me to write a specific blog to which you can respond, why don’t you start your own blog so you don’t have to wait to respond to mine?

  4. 4 Rob
    October 7, 2008 at 11:01 pm

    I always get a good summary of what CNN and the mainstream media is parroting from your blog, and I keep waiting for you to do something different on this subject, but I can just watch CNN instead of read the blog about this issue. We’ll come back to this blog in a few months and see which one of us is right.

    As for me, I’ll bet against that thing called inflation and make a bit more money buying gold and silver vs. investing more into a market that’s going to just conglomerate everything until the S&P becomes the “15” instead of the “500”. I loved the idea for a bit of making money from the market by doing research and finding the diamond company in the rough, but it’s just unstable and almost pick and choose by the government who will make money and who won’t. (Lehman Brothers vs. AIG) and I don’t expect that Paulson and his new powers (they’re still in the bill, read it, you can find it gives him just as much power, just through proxy now… He just hired his old underling from Goldman to hand out the $700B, if that’s not a joke, I don’t know what is…)

    Point is, this bailout is a joke, and I would have done absolutely nothing.

    What do you think the DOTCOM bubble was? Just a freak occurrence? They let it burst and it filtered out the shitty pets.com websites vs. the amazon.com and ebay successful ideas that carried validity. This bailout is parallel to bailing out the shitty decision making dotcom companies who blew through venture capital and had all their workers on the high-life of being dotcom millionaires and built huge buildings and everyone was drunk on the .com. You lived in Austin when that bubble burst, was it the end of the Internet? Did people live on the streets in Austin? No, they had to get different jobs and sell their porches, etc. B and I worked in that building where there was a different company moving out every week. We had no one working on our floor for an entire year because of the bust.

    It’s the same, but these institutions are “too large to fail” which is bullshit. Even if you have regulations in place, you’re saying we should reward the shitty companies who knew what they were doing by having tons of capital and huuuuuuge investments in mortgage backed securities.

    Just because these companies give out credit, doesn’t mean there aren’t any other credit lenders and banks who have solid capital and aren’t leveraged to their friggin neck in debt vs. deposits. That’s why I switched banks and started the process months before it was out in the news that WAMU was in the shitter. They were going to fail, if you just looked at their financials, which they have to report, and even on bankrate.com, they were screwed, but people who believe that companies aren’t corrupt think that “nah, could never happen to them, I haven’t heard anything about it on CNN or the news.” doesn’t mean there’s not a simple statistic or two to look up and find that they’re in the shitter.

    Why the hell should we help shitty companies? Let them die and let mom and pop stores and local banks rise and be rewarded for running solid companies that don’t have to depend on credit. That’s the simplistic part of capitalism that should never be altered, and that’s what the bailout is doing. By the way, it’s going to be closer to 4-5 trillion vs. 700 billion, according to places even mainstream like bloomberg’s financial website. It’s going to have the cycle that I wrote up there, and that’s not Ron Paul talking, that’s just common sense.

    Inflation isn’t going to adjust and catch up to wages, why the hell would it? Companies need to fail, workers who are worth their pay will get paid more and companies that have to cut jobs will cut the fat off the company payroll. It’s survival of the fittest in this economy right now and we shouldn’t expect it to change. In my industry, it’s about to hit the fan because they’re going to start expecting better outcomes in fewer visits. We’re not worried because we don’t bullshit our numbers to insurance like others who are making tons of money right now, but when they have to show statistically that they are just as good or better than companies such as the one I work for, they won’t be able to, so they’ll have to either adjust or close their doors. And if they have to close their doors, too bad, and patient’s will have a better chance of getting better treatment because of this type of “filtering” system that will be showing up in more and more sectors of the economy.

    Those people who lose their jobs and those who are scraping by won’t make payments, and yes, the cycle will continue. Just give it some time (I predict by Christmas, we’ll see the shit hit the fan because no one will spend, and then it will hit that sector of the economy and the market will crash more… then what? Do we regulate and bail them out too because they’re too big to fail?)

    Anyhow, we’ll agree to disagree, but I’ll be reminding you of this in a few months and we can look over what happened and see who was Nostradamus and who was chomping at the propaganda. (could go either way, I’ll be more than happy to be wrong and we’re doing great around Christmas)

    Good friggin grief! Time for bed!

  5. October 8, 2008 at 1:18 pm

    stop waiting for me to do anything, rob. stop reading my blog and just watch cnn if that’s how you feel. christ. i check a wide range of sources and don’t parrot anyone any remotely informed person who reads my blog can see. do you have one disagreement with ron paul at all? i do.

    ron paul’s opinions exist in a theoretical world, as your’s do. this bailout is not simply rewarding the company’s who behaved poorly. it was a necessary injection of cash to keep our financial markets running.

    “Let them die and let mom and pop stores and local banks rise and be rewarded for running solid companies that don’t have to depend on credit. That’s the simplistic part of capitalism that should never be altered.” Even these “mom and pop” stores depend on credit. Revenue is not constant all year and most of them have to borrow to make it through the year. That’s why the Friday after Thanksgiving is called Black Friday. It’s the first day all year that many, many companies are in the black, not the red. Farmers almost always take loans from banks to buy seeds and don’t have the revenue to pay it back until after the harvest and sale of their crops. Many of the large corporations are strong enough to withstand an economic crisis. It’s these mom and pops you speak of that would be severely at risk and they make up a huge percentage of businesses not just in this country, but worldwide. And the decisions we make at home have a domino effect around the world, which what you’re seeing now. If the vastly imperfect bailout package didn’t pass, it is all these smaller businesses that would fail.

    in our market, money is both psychological and physical. just because you place money in a bank doesn’t mean it stays there. we exist in a world of trading, commodities, securities, futures. our involvement in the global market, and economic success, depends on this. you cannot simply go back to the gold standard. it cannot be done. it won’t happen. we trade with countries that don’t have the same gold we do, but have productive societies, goods and services by which their currencies are measured. many countries don’t play by the rules, like china – yet we cannot simply stop cooperating with them. we’d have to stop cooperating with many markets, which would wreck our economy and the world’s.

    the gold standard is a good thought and would be peachy to tie everything to, but it will never happen. it’s an impossibility. there’s no perfect standard, we have to deal with what is before us. once you understand that, you can begin to react to reality instead of theory – which is what the bailout did. if the bailout wasn’t passed, credit – and money – would freeze up even more than it already has and cause mass job loss and weaken the american consumer to the levels of mass depression.

    “Inflation isn’t going to adjust and catch up to wages” – you’re right. inflation has outpaced wages for decades. but the american idea of prosperity has convinced americans to depend on credit and live high on the hog, putting them directly in the line of fire of creditors who want to make quick bucks. inflation, however, is inevitable, which is why we need the federal reserve to manage interest rates and encourage trading, lending, and the exchange of monies.

    “Companies need to fail, workers who are worth their pay will get paid more and companies that have to cut jobs will cut the fat off the company payroll.” This is far too simplistic an idea of what actually happens. Workers are not paid what they’re worth and haven’t for a long time. This is why I call this country a corporatocracy. Companies concentrate revenue at the top – which has plagued this country and proves the trickle-down theory incorrect. The market is not free, information is not available, companies are not transparent and the consumer is rendered less able to make decisions for a multitude of reasons. the idea that companies that should stay in business do and companies that shouldn’t don’t is erroneous. and trying to fix the mess by throwing free market theories at it will only increase the corporatocracy we now face.

    your ideas of the economic universe are far too simplistic. it is difficult for almost anyone to understand and most don’t have a clue how the markets work. to simply try and handle these realities with simplistic, theoretical free market approach is not only detrimental, it is impossible. i can’t express this enough it seems. the free, open market of Adam Smith do not exist, cannot exist, will never exist. This is a worldwide economy. For a free market to exist, EVERYONE must play by the rules and be transparent. This will not happen. This is not a world of shoulda, woulda, coulda. This is a world of what IS. We must work with what we have, not with what we wish to be. without understand what is actuality, what is on the table, you cannot formulate effective solutions. the bailout was far, far from perfect, but a bailout of some sort, sooner rather than later, was a necessity because of the reality of world markets, which are not free and not open.

    let me add one thing. i don’t give a shit if you think i’m right or not. so far, you have never agreed with any stance other than the one you originally offer. you wouldn’t admit i was right if i was and you don’t come to any discussion with an open mind. and i don’t care. i blog because it’s fun and i like the conversation. superiority and “being right” is not my goal. but don’t try to win an argument with insults and condescension and saying i’m mimicking CNN. it’s a cheap dig and it ruins the entire spirit of the discussion.

  6. 6 Rob
    October 8, 2008 at 2:04 pm

    Ragin’ Cajun Alert!

    Yeah, reading it again, the CNN comment was crap, sorry Mer, uncalled for. I just like the debate aspect of this.

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