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Making Sense of the Bailout
Published: October 7, 2008 at 7:36 AM
After a 777 point drop in the Dow Jones Industrial Average, businesses, citizens and politicians alike begged the U.S. Congress to pass a $700 billion bailout package bill, late last week. Congress responded by tossing Wall Street the $700 billion life preserver because a lack of liquidity in the credit markets would suffocate consumer and business lending, bringing the economy to a grinding halt.
What does the bailout mean for someone on Main Street? If you as a consumer can't borrow money because the banks have no money to lend, you can't buy the services or products a business has to offer. As a result, businesses can't cover their operating expenses—which include payroll—since there is a lack of commerce (no consumer spending) and no available credit (no bank loans). Businesses are then forced to cut costs, which in many instances result in employee layoffs, and the entire episode comes full circle.
Why are we in this mess? Credit. We as a country have stopped dealing in liquidities (cash) and are subscribed to the I.O.U. honor system we call credit. Statistics show that more Americans are in debt than ever before and it's a direct result of credit. Credit has made it easy for people to live beyond their means and financial institutions are taking advantage of this. By extending credit cards, auto loans and home loans to individuals who wouldn't normally qualify for them, financial institutions are looking to turn a quick profit through enticing introductory rates, no-interest grace periods and other tactics with back-loaded, high-interest. When these high-interest rates eventually set in, like the ARMs (adjustable rate mortgages) in the housing market, people can't afford the payments and the loans go sour.
History has shown that government intervention in financial issues in not the solution in a free market society. Take Franklin Delano Roosevelt's New Deal for example. The New Deal was created to help America get out of the Great Depression and though some credit it with doing so, the truth of the matter is that the industrial revolution spurred by WWII was the true catalyst for the rise from depression. Even those who believe it was solely the New Deal that helped America out of depression can't deny that over 70 years later government still can't get a grip on some of the New Deal's "bailout" programs such as social security and welfare. Government intervention is a temporary solution that has unforeseen repercussions that can last generations as with the New Deal.
So how does giving $700 billion in cash to the financial institutions, who will put the cash right back into the credit system that caused this mess in the first place, solve the financial crisis? It doesn't; it only continues the viscous cycle, which will inevitably require additional bailouts in other sectors of the economy. Congress has set a dangerous precedent in bailing out Wall Street and it's only a matter of time before the government is forced to buy off sour mortgages and other bad debt. The truth of the matter is that American society has been living beyond its means and a correction in the form of a recession, depression, whatever the terminology is inevitable even with a government bailout.
Politics As Usual
Published: February 19, 2008 at 7:39 AM
Another Tuesday and another round of delegates go up for grabs. Since John McCain has the Republican nomination wrapped up, the media focus will be on the Democrats. Hillary Clinton—behind in delegates and loser of the last 10 races—wasted no time in addressing the issues that really matter. Clinton accused Barack Obama of plagiarism for using a line from a speech made by Massachusetts Gov. Deval Patrick. Obama, a friend of Patrick's admitted to using the line with Patrick's suggestion and regrets not attributing him. Clinton's camp went on to say that the lack of attribution "raises questions about the premise of his (Obama's) candidacy." Obama obviously defended himself and called shenanigans.
Uhm, are you kidding me? These third grade antics (not to mention the baggage that comes along with Hillary) raise questions about the premise of her candidacy. Not only that but they are yet another example of why this country needs new leadership and major reform. I'm not insinuating Barack Obama will be the solution, but right now he is a step in the right direction and seems like the best choice.
What Fueled the Rocket?
Published: February 14, 2008 at 2:03 PM
Yesterday's big headline in the sports world was Roger Clemens' testimony before Congress in defense of allegations that he used performance enhancing drugs (steroids, HGH) during his Major League Baseball career. What perplexes me is that the wires' slant on the story focuses on Clemens' testimony and not at the fact that our elected officials are wasting tax dollars on a steroids witch hunt. Are there not enough "real-world" problems facing this country or has Congress has got the whole poverty, hunger, unemployment, and recession thing figured out and they just haven't made us aware of it? Ah, sarcasm!
Waiting for Karma
Published: June 20, 2006 at 1:12 AM
Much to my disappointment, the Hartford Whalers Carolina Hurricanes managed to slide by the Edmonton Oilers to win the Stanley Cup. I’m not disappointed because I'm an Oilers fan, but rather a Peter Karmanos detractor. In 1997 Karmanos - Hurricanes team owner - moved the Whalers out of The Constitution State to Raleigh, North Carolina, under some suspicious circumstances.
A state committee headed by then Governor Lowell Weicker awarded Karmanos ownership of the Whalers in 1994, despite receiving a higher bid from another group of investors. Karmanos promised to keep the team in Hartford, but didn't waste any time creating a stadium negotiation tug-of-war when Governor John Rowland took the reigns in the state capitol. No matter what the state offered, including full funding of a new $150 million arena, Karmanos demanded more. It soon became apparent that he had no intention of keeping the team in Hartford and the hope to save the whale ended in 1997.
Flash forward today, the slime-bag Karmanos wins a Stanley Cup in Carolina, the crook Weicker fills his pockets sitting on the board of directors for Karmanos' Compuware Corporation, and Whalers fans still wait for the return of Puckie and the Brass Bonanza.
Do Two Stupids Cancel One Another Out?
Published: May 16, 2006 at 11:06 PM
Who's dumber; the illegal aliens who gathered in large masses at predetermined locations to protest for civil rights or the American government for complaining about how difficult it is to locate and deport these people, yet not rounding them up when they knew where they would be and when they would be there?
I've held off commenting on the national debate regarding the influx of illegal immigrants into the United States because it's a mute point. I find it hard to believe that the RIAA can find and prosecute individuals for downloading music from P2P networks, but our government can't find illegal immigrants. I'm no INS agent, but I'd start by checking the paperwork of those guys doing the roofing down the street from me - you know, the ones who can't speak a lick of English.
Understanding Political Ideologies
Published: February 2, 2006 at 12:40 AM
While watching the State of the Union speech last night something struck me - no not an object falling off the wall. In his speech, President Bush stated that the politicians in congress need to step back and let the military leaders manage our military tactics abroad, including troop deployment and withdrawal schedules. Makes sense, right? This brought the Republicans to their feet with applause, of course, while the Democrats sat on their hands stoically; partisanship at its finest. In politics, you tend to lean toward a certain political affiliation, but how many people truly understand the party ideologies? I'll put my privileges and obligations (that's what the diploma says) as a Bachelor of Political Science to work in order to provide you with an explanation.
Simply put, liberals want their hands on everything - pun intended. It's like a boss from hell who assigns you a task and stands over your shoulder for the entire week it takes you to get it done, unmercifully nagging at you. While liberals want you to believe the cliché "give the power to the people" is their motto, conservatives actually empower individuals. Conservatives are like the boss who assigns you a project, checks in now and then to make sure you have everything you need, and lets you get your job done with a complete faith in your abilities.
It's a crude analogy, I know, but the aforementioned quote is a real-life example that goes beyond the tree hugging liberal versus war-mongering conservative bickering portrayed by the media. It's an illustration of why government will never grasp the vast needs of individuals unless they let individuals rule themselves. Next time you step up to the poll and are getting ready to cast your vote, think about who you'd rather have as a boss.
The Xbox 360 Microcosm Theory
Published: December 10, 2005 at 2:31 AM
So there are a lot of people out running around in circles trying to get their hands on an Xbox 360 (got mine suckas!). As you'd expect the media is buzzing around the 360 story like flies on shit. The thing is, most of what's being reported is wrong, not to mention predominately negative. Ready for a dose of reality my communist liberal comrades?
You know at some point or another you've read that; Microsoft is creating intentional shortages, the system is freezing, the DVD drive scratches game discs, there has been a recall, etc. Have you read anything about someone playing the 360 on their 42-inch Panasonic TV at 720p HD? How about someone connecting to their Media Center PC and streaming their music collection via the 360 to their all Digital home theater receiver? I bet you haven't read anything of the sort; though I'm sure you know all the details about the guy in Illinois who's suing Microsoft because his 360 failed.
My point is if the media can't give you an unbiased factual story that covers both perspectives, factoring both negative and positive, about the Xbox 360 how can you believe anything being reported about the war in Iraq?
Are you telling me our troops haven't completed a single successful task since we liberated Iraq? Why isn't anyone asking our soldiers how they think things are going? Why do the Democrats refuse to face the reality that their jockying for political power is a demoralizing slap in the face to our troops? Most importantly, why isn't their someone, in the mainstream media, who isn't afraid to give a truthful, unbiased report about Iraq? Simple - it's the ratings, stupid.