Thursday, March 19, 2009

Brett said...


Brett said...

"I don't strongly disagree with anything you have said but I have a hard time understanding how it is so clear cut to you. I mean the alternative to not bailing out those companies is to allow them to go under, which would cause higher unemployment, less productivity, and would send the country even farther into recession...I am interested to hear what you think is the best course of action for our government."

You may be right. Some economists have said that if AIG (because they are insuring tons of companies bad debts right now) and the Big 3 (because its not just 3 companies but an entire sector of industry, which means dealerships, manufacturers, suppliers, etc…) collapse our whole way of life would be destroyed in this country because both are so interwoven into our economic structure. So maybe some of my ranting was misdirected but let me now clarify and be more specific about the things I am truly frustrated about. To do it I must explain the way I see things.
1. Why are we in a recession? Banking industry’ s bad lending practices finally caught up to them. They were making bad loans to people that could not afford them. These loans were then packaged together and traded on the open market as investments and when the housing boom slowed down and as people’s rates readjusted on their subprime and ARM loans, not only could they not afford their house, but they also couldn’t sell it because they owed more than what it was worth. The housing market boom finally slowed down because growth at that rate cannot be sustained in any economy. The majority of foreclosures that caused all of this are in the states where the housing boom was the biggest: California, Arizona, Nevada, and Florida.
2. Why did these banks make bad loans to unqualified buyers? The government. This started during Carter’s administration and has only gotten worse each year, especially with Clinton and Bush. You may remember Bush’s second to last state of the union address where he said “Every American should be able to buy a home.” Congress agreed – Republicans were happy because more home construction is better for business; Democrats were happy because they got to claim they were helping poor minorities own homes, who would not qualify to buy a home under normal circumstances. So Congress continued to put pressure on banks to lend to anyone that walked in the door.
3. Who is to blame? Congress and the past Presidents for trying to manipulate the banking industry and market. Government regulators (Barney Frank and Chris Dodd) who ignored repeated warnings from various concerned parties about the large scale destructive lending practices as well as took money from those same companies’ lobbist groups. Individuals who bought homes they couldn’t afford. The banks who made the bad loans. Insurance companies like AIG for backing the bad loans. The press for not making a bigger deal about the whistle blowers and the regulators who ignored them – the press is suppose to be there to look out for you and me…and they failed.
4. What should we have learned? Government should not interfere with the private sector except to regulate it and prevent fraud. Capitalism is the most effective when government leaves it alone. The lobbying system in Washington needs to be reformed. There are too many politicians getting money from these groups and then looking the other way as these companies perform criminal actions. Don’t buy something if you can’t pay for it.
5. Best course of action for our government right now? Focus time, energy, and money on the problem at hand: the economy and banking mess. The so-called stimulus packages were filled with crap that has nothing to do with this problem. More time should have been spent figuring out the cause of the problem and what would fix it instead of trying to rush massive spending bills through Congress that I am skeptical will have any impact other than tripling our national debt. We also need to be focusing on how to bring the war (yes we are still in a war) to a close so we can stop wasting so much money over there. We should not be trying to tackle highly controversial and extremely expensive programs like nationalized health care. Government should be cutting back its size and programs because we are in a recession. Government should be lowering everyone’s taxes so that each of us has more money in our pocket to help out during this recession. The temporary tax cut included in the stimulus bill was a joke. Our country should be looking at ways to get our country’s balance sheet back into the black so that our currency is actually worth something in 10 years and so that China doesn’t annex us. That’s right, where the hell do you think we are getting all of this money from? China. They are the single largest owner of US bonds which is how our country pays for things it can’t afford. Which is why Hillary went over there recently and kissed butt because if they don’t keep buying we can’t pay for Barack’s new helicopter.


Bottom line, best course of action for our government right now? Balance the budget , stop thinking of new ways to interfere in private industry, fire every single last person that was on the Banking Regulatory committee and replace them, reform the lobbying system in DC, work out strict payback plans and spending criteria for all receivers of bailout money, focus on ways to keep our country safe starting with securing our southern border, and continue to upkeep roads and bridges. Cool?

7 comments:

  1. I agree 100% Jake. I just don't feel that much of this will happen....I don't feel Barack has made any moves in this direction, or has even mentioned much like it. I guess all we can do is wait and see. Jake Donaldson 2012?

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  2. I think one thing I am very disappointed about is the fact I felt that Obama did a great job in his campaign with his "hope and change" jargon about how he was going to be different and stop the corruption on Capitol hill, etc, etc. I know he hasn't been in office long, but from what he has done I don't feel he has done much different then presidents in the past (well, he will be on the Tonight Show this evening....so there is one). I was ready to give him a shot and see if he could do all this he was saying he was going to, because he is very motivation when he speaks. But then the stimulus bill come out the first time, which he said would have not "pork or earmarks"....what happened there?

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  3. I agree Sarah. Even though I didn't vote for him, I was excited by all of his speeches about changing the way things are done. But unfortunately I think we slowly finding out that all he meant by change is doing it the Democrat way instead of the Republican way. I don't think either party truly wants to change things because that equates to them losing power and money. Both sides only care about one thing: control. True change will only come from an independent candidate or if one of the parties undergoes a major transformation.

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  4. Does that mean you guys are going to join my non-party movement?

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  5. Give me some names and I will let you know. :o)

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  6. I think you have to have more than one person in order to call it a 'movement'
    (thats what she said)

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  7. Well you can be a part of my movement...if I don't call it a movement then it becomes a party and I don't approve of those which means I would have to drop out. And Jake if you and Sarah joined that would be 4 people part of my movement...which qualifies for having a Movement.

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