February 19th, 2009
I am so tired of television and radio pundits who talk about how we are “addicted” to oil and borrowing and on and on. Talk about piling on the victims of this economic meltdown.
I breathed a sigh of relief when gas prices slipped back down to about $1.60, but I didn’t change my driving habits. I can’t change my driving habits. My grocery store is about 4 miles from my house. I have to drive to it on a divided highway. Even if I felt like walking along the side of the highway to get there, I’d still have to haul my 10-12 bags of groceries back home. Not to mention other necessary errands. Addicted to oil, my foot. When someone comes up with something to replace it that I can afford, the “addiction” will go away almost instantly.
Recently I’ve been hearing a lot about how we in this country have become “addicted” to credit and living beyond our means. Come on, really? Yes, there are those among us who when they get their first credit card go nuts. They learn very quickly that this isn’t the best path, and they suffer mightily for years with trashed credit. This behavior has been around for many years, and it’s hardly new or news.
What we have now is a population that was deliberately targeted by people who stood to make billions in salaries, bonuses and Lord knows what else. These people are some of the sharpest and most conniving out there, and they cultivated legislators and regulators to promote bills and rules that would specifically benefit themselves. Not happy with the interest you are paying on your credit card or how your credit card company changes the terms of your agreement? Thank these guys. Blindsided by the galloping interest rates that have ballooned your mortgage payments? Thank them again. Crushed by a mortgage that’s more than the value of your home? Yup, it’s them.
I read somewhere that several of the architects who devised the tools that made their way into the credit markets were the same folks who brought us Enron and that huge energy ripoff in California a few years ago. When you stop and think about it, it makes perfect sense. There had to have been a lot of people involved in those scams who learned plenty. Very few went to jail, and the rest would be highly sought after by the unscrupulous who would love to perpetrate the same type of scams on a larger population. How perfect.
And we’re “addicted?” Hardly. We were the rubes at the snake oil show. Let’s call it like it is. Then maybe we’ll get angry enough to go after the snake oil salespeople once and for all.
A moment for a little self-promotion — If you would like to earn extra money helping people escape the ravages of the debt, please visit United First Financial.
Categories: Commentary, Economy |
Tags: addicted, borrowing, economic, financial, first, meltdown, united | 3 Comments
February 1st, 2009
Don’t you just love it. The same people who had no problem with doling out hundreds of billions of dollars to the Lords of Wall Street with no strings attached have an issue with providing help to beekeepers. I guess those guys don’t read National Geographic. Without bees we won’t have crops to harvest, and a mysterious disease has been killing the bees. But I suppose it resonates nicely in a sound bite to call this small bit of assistance in the Economic Stimulus Plan pork.
Conservative ideology is sounding mighty mean-spirited these days. The Economic Stimulus Plan is not perfect, but it’s a far sight better than anything the Bush administration and Henry Paulson came up with. The Conservative message of cut, cut, cut has the feel of Marie Antoinette picking our pockets as she admonishes us to quit whining.
I just heard Mitch McConnell on CNN complain about spending $600 million for government-owned cars and say that’s not appropriate for this bill. What? That’s roughly 30,000 cars that would have to be built by someone. Sounds like job stimulus to me. And since the government doesn’t build cars, it sounds to me like that money will be going to big business. I really don’t understand their problem with it.
Conservatives consistently argue against bigger government. That’s their code for taking our taxpayer dollars and parcelling it out to their pals in the private sector to provide the services that government otherwise would. Which is fine, to a point. Some services are not suited to lumbering bureaucracies. But paying excessive sums to politically connected companies with little or no oversight is not. Halliburton’s Iraq contracts come to mind.
The Conservative argument isn’t about spending money; it’s about whose fingers it sticks to on the way past. For the last eight years there was a huge transfer of wealth to the richest Americans via tax cuts and decreased regulation. That was just peachy with Conservatives. But the Economic Stimulus Plan with its extending benefits to unemployed Americans who buy the goods that generate the profits for big business, not so much.
I don’t understand the logic, and if there isn’t any logic, it might mean it’s just plain old greed. Maybe those Barons of the Conservative movement and our Lords of Wall Street consider us peasants.
Not so long ago in England, a gentleman was someone who owned property. They were the gentry. Today very few of us actually ownproperty. It’s mortgaged, and that’s the biggest reason for our peasanthood. The way to free ourselves from this predicament is to get ourselves out of debt.
I can help. Please visit United First Financial to learn more.
Categories: Commentary, Economy, Government, Politics |
Tags: beekeepers, bees, conservative, economic stimulus, financial, first, ideology, plan, united | 2 Comments
January 11th, 2009
Some things just seem to require a little common sense, and fixing the mortgage crisis is one of them. I heard a story on National Public Radio a couple of weeks ago. I haven’t heard anything about the concept since, and it really requires more discussion.
According to an article in Wikipedia on the subprime mortgage crisis, “As of August 2008, 9.2% of all mortgages outstanding were either delinquent or in foreclosure.” (The source is the Mortgage Bankers Association website, http://www.mbaa.org/NewsandMedia/PressCenter/64769.htm.) Think about this for a second. Almost 10% of all mortgages are in trouble.
- Would you buy a toy for your child if there was a 10% chance the toy contains lead?
- Would you buy an electrical appliance if there was a 10% chance that faulty wiring will cause a fire?
- Would you buy a car from a manufacturer whose air bags fail 10% of the time?
Yet this is precisely what we’re being asked to do when we buy today’s mortgage “products.” (And that is the term lenders use.)
Current mortgage regulations date from the days when borrowers and lenders negotiated loan terms face to face. Those days are long gone, and yet the laws assume borrowers and lenders are on an equal footing. Not long ago I sat next to clients who were purchasing a home. We were at the closing, and they were seeing their loan documents for the first time. (Lenders now fax the documents to the closing attorney or escrow at the last possible moment.) They had gotten their loan through one of those Internet companies that promise cheap rates, and the terms of the loan were not what they had been told. Not even close. They called the 800 number and argued with the clerk at the other end. In the end they were told that if they didn’t like the loan they could refinance at a future date or they could go somewhere else.
Here’s the problem –
- You can’t get a new loan at the drop of a hat. It would probably take a minimum of 3-5 days under the best of circumstances. The property will need to be re-appraised, and the buyer would have to pay out more money.
- The seller may not be willing or able to extend the contract, and there’s no provision in a typical real estate contract for this type of circumstance.
- The buyer has made commitments. In this case, the buyers’ moving van was parked in the driveway of the new house. The buyer would have to pay storage for their household goods and incur the expense of staying somewhere else temporarily. Depending on how prudently they packed, they might have things they badly need for personal or business reasons buried in a box at the back of the truck.
Negotiating a mortgage loan is a far cry from negotiating face to face, and it can be a far cry from fair and ethical behavior from entities that hold all the power. If we’ve learned nothing from all the various corporate scandals that have come our way lately, it’s that we can’t count on large corporations to be fair and ethical with their customers.
The speaker on NPR had a brilliant solution, and I sure wish I’d gotten her name. Here’s how to fix the mortgage crisis once and for all: Mortgage lenders refer to the loans they make as “products,” and it’s true. They are. As such they should be overseen by the Consumer Product Safety Commission. Forget the Treasury Department and the SEC and all those agencies who haven’t lifted a finger to protect consumers from these mortgage products. Let’s put oversight where it belongs — the Consumer Product Safety Commission. And let’s give them the budget and the inspectors they need to get the job done.
Lastly, here’s my little self-promotion — if you want to take power back from lenders who clearly don’t care about you or your interests, please visit my website: United First Financial. I can help you get out from under. Instead of contributing to what is probably the largest building in your town, I can help you keep your hard-earned money for yourself and your family. Basically, you can stick it to them by cutting down on their income. Perfect.
Categories: Commentary, Economy, Government, Personal Finance, Taxes, Uncategorized |
Tags: commission, consumer product, crisis, financial, first, fix, Mortgage, safety, united | 2 Comments
October 13th, 2008
I received an email from a cousin recently that really got me thinking. He owns a small business, and he believes government should stay out of people’s lives. He wants lower taxes and less regulation. He believes people should stand on their own two feet.
But how about the fact that his kids attended public school? What about the daughter who is currently attending a state funded university? What about the miles and miles of roads he drives to get anywhere? What about fire, police and trash removal? Are these the proper functions of government, or should he be paying for his use of these amenities?
To keep things simple, let’s accept those amenities as a given. The vast majority of Americans are not averse to paying taxes for public education, emergency services and roads.
Suppose his neighbor down the street loses his job. His company goes under, and he’s laid off. As a small business owner my cousin has been paying for unemployment insurance for decades. He doesn’t like paying it and thinks it’s an unfair burden on small business owners. Maybe so. I’ve been a small business owner, and I thought it really unfair that my husband and I would never collect on the unemployment taxes we paid on our own salaries. Still, what would you do for the neighbor who lost his job? Should he be on his own? Should unemployment taxes be paid by the entire taxpayer base instead of employers?
As a result of the stress of losing his job, the neighbor’s marriage falls apart. His wife has few skills, and she has spent the last two years taking care of small children. Because her husband is unemployed, he can’t help with child support. Sure they could stay together until things settle down, but it’s getting pretty nasty in that household. Should the mom rely on charity? Donations can be iffy sometimes, so maybe she should count on family members. But what if those aren’t an option?
Oh, I know we all have the image of welfare moms in our minds, but that situation ended quite a few years ago. There are now education requirements and limits on the time someone can collect welfare. And even if our goal is to keep moms off the dole, what about the kids? Is it a proper government function to keep our youngest citizens healthy and fed?
That was a fictional story of a possible neighbor of my cousin. Let’s tackle a bigger issue. If we are to stand on our own two feet and be self-sufficient, if we are to be empowered to make our own decisions concerning things like health care, what protections do we have against the in-house legal departments of companies that do us ill? Is it the role of government to regulate insurance companies? Is it the role of government to inspect our food and drugs to make sure the things we ingest are safe? Is it the role of government to test imports to keep lead out of toys?
If government doesn’t do it, who will? I don’t have the wherewithal to sue an insurance company for denying me the treatment I might need. I know I don’t have a lab that can test for melamine in my dog’s food, and I don’t have the equipment to test my water, spinach, tomatoes and beef. Do you think maybe this is something that all of us taxpayers can agree is something that we should spend our money on?
There is much to think about here. We taxpayers pay for many things, and it is time we define what it is we expect government to do for us. Personally I think we’re all in this together and we have a responsibility to look out for each other. It’s the moral thing to do.
Categories: Commentary, Economy, Politics, Taxes |
Tags: education, Government, health, insurance, regulation, regulations, Taxes, unemployment, welfare | 1 Comment
