If Not Us, Then Who?
A three week tour around the country has shown just how serious America's economic problems are for working people. Change will come when people outside the Beltway unite and create demand for a different course.
I am at the end of an extended tour around the country. The final stop is a rally for Houston janitors like Ercillia Sandoval. Ercillia has been nominated for Glamour magazine’s Women of the Year for her leadership in trying to change the lives of 5,000 janitors who earn just $21 a night with no benefits cleaning expensive, downtown office buildings.
Recently, Ercillia learned she had breast cancer and believes she very well may die because she had no early detection and no money to pay for treatment. Instead, she just hoped her feeling ill and discomfort would go away.
These courageous janitors in Houston are standing up to change their lives against corporate giants like Chevron. It’s Big Oil vs. the courage of working people like Ercillia.
I have felt so much gratitude for SEIU members’ devotion every day to making sure hard work is valued and rewarded in America. But it also broke my heart to hear so many stories of hard working Americans who are forced to live paycheck to paycheck. It broke my heart to see America growing apart, with the rich accumulating tremendous wealth while the rest of us fall further behind.
There is Ercillia’s story, and the security officer in Minnesota who can afford health care but only by eating at a soup kitchen every day, and parents in Seattle forced to choose which of their children will have insurance because they cannot afford to cover them all.
In Los Angeles I heard about men and women working two or three jobs, worried that with all the time they spend working they will miss seeing their children grow up. In New York, I came across a man who has an eye infection that is going untreated because he has no money for medication – and even if he did have enough money to pay for treatment he receives no sick leave, so seeing the doctor means losing a day’s pay.
And there was Timothy Bowers, who at age 62 robbed a bank so he could have time in prison where he would have health insurance and a roof over his heard until he turns 65 and can collect Social Security and Medicare. I talked with mothers whose kids could not afford to go to college, and they told me how miserably the schools were failing their children.
We are living in a time when the stock market is at record highs, the economy is growing, and the Fortune 400 CEOs are all billionaires. If the minimum wage had been indexed to CEO's salaries since 1990, it would be would be $23.03. The share of income today going to profits is at a record highs while the share of wages is at a record low. America needs a new economic plan.
This is not our fathers’ and grandfathers’ economy. The one job in a lifetime career is over. Employers and employees are getting a divorce, and employer-provided health coverage and pensions are disappearing. We are truly in a global economy and our dominance is not guaranteed. China is our first economic competitor and many analysts think they could pass us economically over the next 20 or 25 years. Americans are anxious and more in debt than ever before.
That is not the America we want or need. America needs a plan to make sure that everyone shares in the wealth of a growing economy, not just shareholders and executives.
Thank God that our country does not have the lack of economic resources of countries like Bosnia or Rwanda. This is the United States of America, the richest country on earth, with eight of the top 10 research institutions in the world. We won Nobel Prizes in science and economics this year.
But we cannot drive into the future looking in the rear view mirror, Unions, business, and government need to come together and make a plan to sail America in a new direction for the 21st century . And we cannot wait for change to come from Washington DC. We need to be the voices that create the winds of change that fill the sails and blow our nation’s capital in a new direction. We need to stand up and speak out, so America’s greatest gift – the American Dream of parents working hard so their kids can be better off than they are – endures.
Americans are looking for leadership – a hand up not a hand out.
On my desk is a figurine on a balance bar. On its base is this statement, “The best way to predict the future is to create it.” Let’s put America back on track, and make this A Country That Works.
And if not us, then who?
And if not now, then when?
Change tends to happen when there is a congressional will, and the means are available to rectify.
The housing market is starting to fall (by some 10% since last year) and more people are without health insurance and decent employment, which means it is just a matter of time before more unemployment and other economic implications come about.
U.S.A. economy will be going downhill in the next decade...maybe to the point where the industrialists may come to the realization they have blown it. Cocksure fools...
October 26, 2006 7:55 PM | Reply | Permalink
I am a retiree who retired with one benefit being free medical insurance. That soon became medical insurance where I paid a token amount of the cost. Now, it is health insurance that I mostly pay myself. Next year's health insurance bill will be about 50% higher per month than last years, and that will amount to about a third of my pension. And, I have only been retired for 13 years.
Yes, something needs to be done. A lot needs to be done. Nothing will be done, however, unless we elect a Democratic Congress, followed by a Democratic President in 2008. Even then it will take a lot of pressure from all of us to force change to go in positive directions.
Our system of government cannot survive much longer with the vast and growing disparity between the wealth of the top 1% and the rest of us. I think it will be better to make the changes needed within the our present form of government and not as a result of a revolution.
Hoppy in Sacramento
October 26, 2006 8:11 PM | Reply | Permalink
No! We cannot make demands of our team leaders! We'll lose elections if we start making demands on our party! We can't make a difference anyway so why bother? Just shut up and vote! Or the republicans will win!
October 27, 2006 4:31 AM | Reply | Permalink
More than 6.6 million new jobs have been created since August 2003.
Our 4.1 annual growth rate is superior to all other major industrialized nations.
The Dow has set record highs multiple times in the past several weeks.
Productivity is up, and the deficit is down.
Real, after-tax income has grown by 15 percent since 2001.
Inflation has remained low.
As Vice President Cheney summed it up at a recent meeting with journalists, "What more do you want?" The tax cuts proposed by President Bush and passed by a Republican Congress can take a bow.
October 27, 2006 6:20 AM | Reply | Permalink
my question: isn't there equality in america if almost all the wealth is owned by 1% of the population? that means "99% of the population is in the same economic boat?" A millionaire has about one dime for each billionaire's dollar.
in general, I think that we're seeing our health care providers becoming worried about losing the community's good will because now they're saying: "we're going to provide free basic health care."
outsourcing has had a big impact on our health care system, I think, because some of the "cash cows" are being slautered... and more should be.
I know a senior citizen who goes to therapy-- she lifts some weights and gets a message-- and medicare pays $150 a visit and, per month, the bill comes to about $1200.
I'm not sure that companies should be responsible for pension and health benefits. that's because small businesses, for example, can't compete with the corporations on them. however, I do advocate single-payer health care and social security.
October 27, 2006 6:21 AM | Reply | Permalink
Funny how this doesn't translate to any improvement in peoples lives.
I guess that's how it is when the benefits flow to the 1%.
Seriously, if you were to divide 'after tax income' up among different economic classes, what would it show? And if you included *all taxes* not just income tax as part of 'after tax income' what would that show.
The Dow's 'record highs' represent only a 12% rise in six years. You'd have done better with a credit union savings account, than throwing your money away on the stock market.
The deficit is down? Down from what? Clinton surpluses? ROTFL.
What's that old proverb again: 'Statistics never lie, but liars use statistics'? I think our pal Kiwi might have taken that to heart.
Here's a good one for you: 'You can't fool all of the people all of the time.'
October 27, 2006 6:33 AM | Reply | Permalink
"I am a retiree who retired with one benefit being free medical insurance."
nothing is ever free because somebody has to pay for the benefit in labor and/or environmental degradation.
in my opinion, that forces the community to create a "low wage class" that provides those "benefits" on the cheap.
in the old days, a man and wife had kids because they needed their help when they got old.
nowadays, parents expect the financial system to support them so they can say "I'm not a burden on my kids." however, they don't like admitting that "now I'm a burden on someone elses kids."
October 27, 2006 6:34 AM | Reply | Permalink
"The Dow has set record highs multiple times in the past several weeks."
if these numbers were adjusted for inflation, are they still record highs? when I see people "present numbers," they typically don't report "inflation adjusted results."
under president bush, for example, our country's deficit doubled and housing, college and health care has become unaffordable.
if this situation is caused by "low inflation," I'd hate to see moderate or high inflation!
in general, I think that the fed is correct about needing to increase interest rates but this country is guided by "inflationary policies" that support psychological happyness while ignoring financial liberty and security.
October 27, 2006 6:44 AM | Reply | Permalink
Bill Bishop
Austin, TX
This was telling, in yesterday's NYT, in a story about a change in the advertising agency servicing Wal-Mart:
"A new cadre of advertising and marketing executives at Wal-Mart wants to make over the retailer's brand image to stimulate sales growth, which has slowed as lower income Wal-Mart customers have encountered problems making ends meet."
Traditional Wal-Mart customers now can't afford to shop there. Jeez....
October 27, 2006 7:49 AM | Reply | Permalink
Statistics are fine, but what we really is to get out the stories of real people who are suffering under this administration and its policies.
People like my friend Linda, a single mother who has a BS in Economics, but has to work as a bartender, without health insurance for herself or her 8-year-old son. Or Julie, who answers the phone on the Medicare hotline under a government contract that can't provide her with a living wage and health care. Or Jill, whose breast cancer may have returned, but is working as a temp without benefits, so she can't afford to have it checked out.
These people need help now! And they don't want a handout. All they're asking for is a living wage and access to decent health care, things that EVERY other affleuent Western nation provides to all their citizens.
Can't America provide the same for our people?
October 27, 2006 8:53 AM | Reply | Permalink
Re: nowadays, parents expect the financial system to support them so they can say "I'm not a burden on my kids." however, they don't like admitting that "now I'm a burden on someone elses kids."
My father's healthcare bills the last few years of his life (paid by Medicare and other insurance) easily hit a half million dollars. And that's pretty typical. Once upon a time of course people didn't have healthcare bills like that because healthcare couldn't do very much apart from keep you somewhat comfortable while you died in a few days of some rampant infection. But nowadays nearly all of us will be running up half million dollar bills in our last years of life.
How many families can afford that? I was a college student working for $7 an hour in my father's final years. I sure the heck couldn't have helped him out financially (I did help him out in many practical ways though). And if families are forced to support their elders in lieu of social security what do you think that will do to the birth rate. People aren't going to be able to afford any kids at all if they have to support a grandparent or two at the same time.
October 27, 2006 9:05 AM | Reply | Permalink
No it has not. That would mean, in general that the average raise per year of %6 after a 3% inflation. That is certainly not the case. Plus with the increase in energy costs the real after tax income has grown much less. I know that I am making just about %50 of what I was making in Jan 2001. So for me real after-tax income has shrunk by nearly %50. I know many people in the same boat as me.
October 27, 2006 9:12 AM | Reply | Permalink
Live with your parents until you're 35, because you can't afford your own apartment. When you're 50, they move back in because they can't afford health care. When you're 75, move in with your own kids for the same reason.
This is what Republicans really mean by "family values:" three and four generations living under the same roof, out of economic necessity.
-- "Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable." (John Kenneth Galbraith)
October 27, 2006 10:20 AM | Reply | Permalink
More than 6.6 million new jobs have been created since August 2003.
How many jobs have been lost? Is it too much to ask for that number as well, when George gets up there and smirks about all the new jobs created? And what KIND of jobs? These are not high-paying technical jobs, but low-paying, non-benefit-earning jobs.
Productivity is up, and the deficit is down.
This is pure, play-with-numbers-BS. The cost of the Iraq war remains off-budget, but does that mean our children and grand-children will not be repaying these deficits for their entire lifetimes? No.
In fact, the figures on which they calculate the deficit are even more misleading than that. They count income from Social Security (already spoken for, but not yet spent) as income offset for today's deficits.
All you have to do is look around to see that Bush's base (the financial one -- not the poor slobs in his VOTING base), which George describes in his very own words: The 'haves' and the 'have-mores' are the only ones who are benefitting from this criminal administration's policies.
Jan Knaus
October 27, 2006 10:28 AM | Reply | Permalink
I can't rebut all those apparantly valid statistics. You have done your homework and I suppose you are right, the economy is terrible.
Perhaps my evidence is purely anecdotal, but I keep doing better every year. I am making a ridiculous amount of money, and so are my friends and business associates.
In fact, I don't understand anyone who isn't making money in this country, even in this "terrible" economy. Sorry.
...and, by the way, I pay a fortune in taxes.
October 27, 2006 1:01 PM | Reply | Permalink
I am truly sorry for you guys, but there is no reason you can't do well in this country.
America offers you the freedom to fail or succeed, you decide, but no guarantees and nobody's fault but your own. If you ever start depending on someone else, or worse, the government, to provide success, you are doomed.
Secure an education, get married, stay married, work hard, you'll have all the prosperity you dream.
It isn't necessary, but it helps to believe in a power greater than yourself.
October 27, 2006 1:10 PM | Reply | Permalink
Mr. von Huber:
My first reaction when I saw this and your other post was:
Oh...My...God.
I have been a practicing attorney now for 11+ years. Let me assure you that getting an education, leading a moral life and having a good work ethic does not guarantee a financially successful life.
I have done too many bankruptcies because of circumstances outside of my client's control, seen too many people who failed in business because someone else did something illegal, unethical or tortious to them (including business partners and competitors), seen too many people who could not complete some step or another that you mentioned due to situations which no amount of perserverance, no amount of moral fortitude, no amount positive thinking and no amount of religious faith that would have changed one iota of their condition.
You have expressed how you cannot imagine how anyone could possibly fail unless it was their own fault.
Let me give just one example from my own personal life: on June 5, 2000, an angry driver, who was angry at the world around him, looked me right square in the eyes, turned his car on me and gunned the accelerator (i.e. "burning rubber"). Even though I turned and ran toward my truck, he, driving a car, was able to accelerate enough to catch me before I could jump in the bed of my pickup truck. He crushed me between his car and my truck. It caused a compound fracture of my left tibia (shin bone) and fibula. I was in and out of the hospital for over six months. I had to have six operations. I incurred over $150,000 of medical bills. The driver (the tortfeasor, as we call it in the law) only had a $10,000 insurance policy. The rest of the medical bills fell on me to pay.
I didn't "fail." But I lost a lot of time that I could have used to save for retirement. My situation is not that unusual for bankrupt people. It was a circumstance beyond my control. I could not outrun that car. I am not Superman.
From my life experience, I find your posts full of arrogance and sanctimoniosness. It takes everything I have to contain my anger at your posts. Even if everything you write is true, you are merely lucky -- nothing more. Don't forget the saying "but for the Grace of God go I."
I did everything you (and others) said I was supposed to do to become financially successful. But, as my experience shows, it only takes one angry driver and being in the wrong place at the wrong time to completely obliterate all the hard work that someone can do. It is easy to destroy. It takes study, hard work, moral living, and a lot of luck to become successful. It also takes a strong government (esp. effective courts) that is capable or protecting the weaker members of society. Otherwise, only those who are born into powerful families will have any chance. There is a famous saying in the law practice and accounting industry: "all great wealth starts with a crime." Some of that crime is committed by wealthy, powerful -- and even popular -- figures. I have seen that in my law practice, too.
Satellite Sky Blog
Find the Truth. Do Justice.
October 27, 2006 7:17 PM | Reply | Permalink
Thanks for sharing your heartfelt story. I am certain that was not easy to recount.
Coincidentally, I, too, have practiced law in California for over 25 years and made a fortune, lost it all, and made it again another way.
The state and federal governments, although not by design, have fought me every step of the way. I have started businesses and been more challenged by the government regulations and taxes than the market place.
When I sold a succesful company a few years ago, the state and federal governments, who had made the entire process difficult with countless regulations and confiscatory taxes and shared none of the risk, acted as if they had been my partners all along and demanded a hugh chunk of the profits. Which, of course, I paid in full to avoid their taking all my wealth and personal freedom.
You are right in that all my successes have been God given. I thank Him literally every day for all the blessings He has bestowed upon our family.
But He also had a good reason for the difficulties and failures we experienced. He wants the best for us, although we don't always see the logic, especially not right away.
I have had partners cheat and steal and do everything in their power to hurt my family and me, but upon looking back, it was clearly the best for me.
Don't get down. That fool who hit you is being punished every day and you now have the opportunity, not misfortune, to create abundance and joy from the experience.
I know, I sound like an idiot to you, but it has worked for my family.
May God bless you in your life of abundance.
October 28, 2006 1:38 PM | Reply | Permalink
I can't believe you guys! I am sure you mean well but there is no excuse for failure in this great country!
Quit blaming Bush or "industrialists" or anybody or any situation for your lack of success. You are all obviously smart, well educated fellows who should be thanking God for the opportunities He has given you in this great country.
Get on board. Don't fret over all the benefits the 1% are receiving. Become one of them!
October 28, 2006 1:59 PM | Reply | Permalink
So how do we intervene to fix these problems? What needs to change to establish widely shared prosperity and economic justice, equal liberty and all that goes with being created equal and eschewing privilege?
Give up?
A really good starting point -- necessary if not sufficient -- would be to recognize the truth of Henry George's 1879 observations in the amazing book Progress and Poverty, and then to implement his remedy, in the form of a simple alteration of our taxes. Would we get it exactly right instantly? No. But any significant step in the direction he laid out would be an improvement. I realize this sounds far too good to be true. I came around slowly and rather grudgingly to being persuaded, myself, having concluded that nothing else explained the situation as completely or did more than provide bandaids without fixing the underlying problem.
I invite you to learn about George's ideas. The website WealthandWant.com is my attempt to provide doors into this wide-ranging body of thought. It has been embraced by people as diverse as Winston Churchill, Mark Twain, Bill Buckley, Clarence Darrow, Albert Einstein, Aldous Huxley, Henry Ford, George Bernard Shaw, as well as a number of Nobel prizewinners in economics.
It represents a third way, a refinement of capitalism which eliminates unjust monopolies, and harnesses them for the good of all of us.
The game of Monopoly, by the way, is based on a game patented in 1903, designed to teach these ideas, called The Landlord's Game.
There is a new edition of Henry George's landmark book, a thought-by-thought updating, entitled Progress and Poverty: Why there are recessions and poverty amid plenty -- and what to do about it, a paperback which is about a 7 hour read.I commend it to your attention. While you await the hardcopy, take a look at a couple of shorter versions:
You will come away with an entirely different understanding of wealth concentration, privilege, equal opportunity and economic justice. Well worth your time if you hang out at TPMCafe, IMHO.
<>If Not Us, Then Who?
<> lvtfan
<>http://www.wealthandwant.com ... if you'd like to see an end to poverty
October 28, 2006 3:43 PM | Reply | Permalink
Re: The driver (the tortfeasor, as we call it in the law) only had a $10,000 insurance policy. The rest of the medical bills fell on me to pay.
In such cases of clear malfeasance I am surprised that the resulting bills were simply not left with the driver, not you, regardless of whether he could pay them or not, and leaving him to declare bankruptcy, not you. Surely we ought alter our laws so that in such cases this is exactly what happens, leaving innocent victims free of any financial responsibility.
October 28, 2006 6:14 PM | Reply | Permalink
So mid-level professionals compensated with worthless stock options, or urged to reinvest in valuable corporate 401(k)'s such as Worldcom or Enron or Nortel, are not at fault when actively lied to by corporate officers? Why was Sarbanes-Oxley passed, and the PCAOB established to keep a very close eye on the independence of nominally independent auditors, if there wasn't a problem with widespread corporate officer fraud? A while back, it was LBOs and junk bonds, but there has been far too much breaking with classical free market theory, and having short-term value as the be-all end-all subject to greenmail if not optimized.
When the Administration actively encourages the offshoring of critical high-tech skills in the national workforce, there is a basic misunderstanding of human resources as part of national security. When fear, uncertainty and doubt encourage "doing something" military adventures, there is a problem. When tens of billions are being dumped into a national ballistic missile defense system of dubious reliability and an uncertain enemy, yet large parts of national critical infrastructure (e.g., the chemical industry and the power grid) invite low-tech terrorist attack, there is, at best, fiscal irresponsibility.
I am not aware of having had any conversations with Mr. or Ms. God, although he or she is mentioned frequently. Certainly, I have not noted any opportunities from this source. While he or she may exist, this being prefers to be incognito.
Unfortunately, an artifact of a corporate workaround to WWII wage and price control now literally controls life and death. I see the continuance of a partial-coverage healthcare system, operating by principles tangential to a free market, as benefitting certain healthcare investors and executives. I am open to a multiple-payor system, as long as it returns the shared risk problem to a free market model of an interaction between provider and consumer. The artificiality is that a true market exists between employers wanting to reduce costs, and benefits managers who use market power, forbidden to actual healthcare providers, to lower reimbursement.
--
Howard
*equal opportunity offense to both extremes*
October 28, 2006 7:24 PM | Reply | Permalink
Howard...One can always blame someone else for one's failures.
So what if you invested in a company that fails and who cares why it failed?
You, alone, have the ability to succeed or not. As soon as you blame another for your failure (a cheating partner, corporate officers who lie, etc.) you transfer power over your life to them. They are now in charge of your success and happiness because you gave them the power.
Do you want a life of no challenges where everyone is "fair" and all your investments are without risk? You know better. You are far too successful to believe your life is at the mercy of others. (I read your biography).
As for ridiculing "Mr. and Mrs. God," I understand why you might do that. That's OK. It is entirely up to you to reject the benefits He or She offers.
Meanwhile, those of us who believe in a higher intelligence and assume responsibility for our lives, will continue to prosper. That is not arrogance, it is the law.
Forget faith and Mr. and Mrs. God, the laws of success are like gravity. Neither good nor bad, just the law.
Accept responsibility for all that happens in your life, even the "unfair" events, consider them opportunities (or gifts from Mr. or Mrs. God, I love that phrase!) and prosper.
...or don't. It's your choice. Not the government's fault.
Finally, I know that even if the House and Senate go Democrat and Hillary is elected in 2008, my family will figure out a way to do well. Sure, we'll pay higher taxes and doing business will be more difficult, but we won't blame anyone.
We will continue to flourish, with the generous blessings of Mr. or Mrs. God. You can too.
October 29, 2006 5:02 AM | Reply | Permalink
Given that this is a political blog, it seems entirely relevant to politics to discuss white collar crime that the existing laws do not cover. Mentioning the need for (and problems with) Sarbanes-Oxley, HIPAA, and the "PATRIOT" act are directly relevant to evaluating candidates' platforms and the play-by-play on legislation and court decisions in process.
When Bernie Ebbers demanded $440 million from Worldcom's board to support his non-Worldcom business ventures, and then refused repayment on the grounds he'd have to sell Worldcom stock and depress the price, is this something that no one should care about? If a CEO is getting millions in salary, is it not of concern to the board that he's spending time and effort on unrelated business? Get a thousand in an armed robbery and the sirens blare; take hundreds of millions of other peoples' money and it's one more nod of a board member's head.
I am angry with corporate boards and Congressional bodies that ignore their fundamental responsibilities of oversight. At the moment, I am rushing to finish my fifth book, Enterprise Architectures, which is a rescue for a publisher -- the original author dropped out. I spend a good deal of effort, along with technical details, explaining how to stay in legal compliance and out of jail. It's a real concern, both where there is new regulation, and such things as deregulation that had unforeseen consequences. Electrical utility deregulation, for example, is a major cause of the 2003 Ohio Valley blackout.
You mention my biography, so it may be relevant when I comment that the Administration is refusing legal oversight, and engaging in military and intelligence programs, that, in my professional opinion, are unlikely to work, and are focused on minimal threats. Please note that I am not saying the money should not be spent by the government, but there are places where the money can get more bang for a buck. I suppose I should rephrase that for some defensive systems, where the goal is to get a non-bang.
You seem to be saying that I should accept everything a government does and profit from it. The idea of an infallible leader-state came from Hegel and Nietzsche, and had some unfortunate implications.
As one real-world example that would be funny if it wasn't so serious, banks are under a "know your customer" (KYC) regulation that puts them into a role of law enforcement surveillance for which they have no training or legal authority. KYC requires that customer names be checked against various lists of terrorists, money launderers, drug dealers, etc. Eventually, I called the Financial Crimes Enforcement Network in the Department of the Treasury, and asked where I could find the list of lists to be checked.
They were really nice people, and said they'd have to get back to me. Someone answered at about 8:30 PM DC time, saying there is no such master list. It appears that one has to bring in Dun & Bradstreet or an equivalent to figure out what due diligence would be in checking public and private lists. Are you suggesting that this should be accepted and I should make money on it, as I am in a book?
Some regulation, especially claiming to protect against terror, is fundamentally insane. Others close the barn door after the horses and cattle have stampeded.
I don't blame people for my problems, but, as in one crooked lawyer that cost me several hundred thousand dollars, I want restitution, disbarment, and prison. Are you proposing I should ignore this person and go seeking other business opportunities while singing "Everything's coming up roses?"
About 25 years ago, I took, and benefitted from, the Lifespring self-awareness trainings. One of the catchphrases in the Basic course is "there are no accidents", implying one is responsible for everything in one's life. There's truth to that, but there's also a need to recognize randomness.
I happened to be standing on a street corner in New York (46th & Broadway, IIRC). Even in New York, people looked strangely at me when I went into hysterical laughter. Lifespring's panel truck, which moved sound systems and the like, had just driven by.
It had more scratches, dents, missing paint, than the worst of New York cabs. Sure. Want to tell me, again, "there are no accidents"?
--
Howard
*equal opportunity offense to both extremes*
October 29, 2006 9:12 AM | Reply | Permalink
I think Mr. Huber is living in a pipe dream. Maybe he sells drugs; what a great business. You don't even have to pay taxes. But then again, neither do many of the rich. Perhaps staying in his fantasy world would be better for him but reality will have to be addressed by all of us soon.
The housing market is about to tank. I do not believe we have seen even the tip of the iceberg yet. I live in Philadelphia, considered to be one of the best urban markets still out there. The housing inventory here has quadrupled since mid summer.
Nationwide, individual debt is at an all time high, most of this debt has been leveraged against peoples homes. The saving rate last month was in the negative, this has not happened in over 20 years.
I would hope that most rational people realize that the sudden decrease in gas prices and interest rates since September is a bit conspicuous. Of course it is, it’s called the political cycle. Make no mistake the interest rates and gas prices will soon rise after election day.
Current home prices are not a reflection of real income. They are a reflection of risky loan products, most notably, the product array called Alt – A. These products qualify borrowers based on “Stated Income”, Stated Income/Stated Assets”, “No Ratio” and “No Doc” qualifications. Little is mentioned of them in the media but they have comprised approximately 45% of the total mortgage loan volume in the past 12 month period. They are essentially a license to “fabricate” credentials to purchase residential real estate and are a significant contributing factor behind over inflated home values nationwide.
It is now hitting the proverbial fan as a result of this and it will get a lot worse. The damage has been already done. The Fed warned the Bankers, they have known about this for over two years and continue their folly to the detriment rational standards and guideline because Executive bonuses are predicated on a unsustainable growth model. The reverse yield curve, the relation between short term and long term interest rates, supports this conclusion. The stock held bank holding companies have snubbed their capitalistic, elitist noses at public policy aimed to protect everyone. It is a cornerstone reason why the Fed has continued to raise short term interest rates.
The wage gap between executive pay and worker pay has never been wider. Unions have been badgered by the Republican Party since Regan. Across the board, benefits have decreased for all working Americans, except for the Elitist, Executive tier of major US corporations. Executive pay scales and golden parachutes amount to nothing less than robbing the public trust.
In 2003 the executives of both Fannie Mae and Freddie Mac engaged in account fraud scandals of $7 Billion and $12 Billion, respectively. These individuals were never prosecuted; these executives received huge golden parachutes and pensions for leaving their positions. Should this surprise anyone? Georgy's daddy was responsible for the S & L crisis in the early 80's. Those Good Ole Boys got off scott free too.
Supply side economics doesn't work but it was a "work of art spin job" by Mr. Regan to make the rich, richer. Who is going to buy the products and services if there is no middle class?
Broken Borders, why not? Slave labor without taxation, great idea if you are an exploiting profiteering capitalist. When your illegal resident alien worker or their children get hurt/sick, just walk into any hospital, the middle class will pay for it. Do you think executives pay the same medical premiums as the workers? WRONG - they pay nothing, it is one of the perks of their executive package for many major US corporations if not all on the Fortune 500 list.
I recently herd of a bank that was moving their mortgage processing facility to India. As an American citizen, do you want your mortgage loan application processed in another country? All your personal data. Identity theft??? Hello! Gee try going after that/those person(s) on the other side of the World. Good luck.
Yes, ladies and gentlemen, we have a big problem and it will get worse. Unfortunately, the damage is already done, so buckle your seat belts, its going to be a bumpy ride!
As for the national debt, I don't know were Mr. Huber gets his facts, but here is a current article from very a credible source and individuals. Gee, you haven't seen this in the media as of late...I wonder why.
US 'could be going bankrupt'
By Edmund Conway, Economics Editor
Information appearing on telegraph.co.uk is the copyright of Telegraph Group Limited and must not be reproduced in any medium
without licence. For the full copyright statement see Copyright
(Filed: 14/07/2006)
The United States is heading for bankruptcy, according to an extraordinary paper published by one of the key members of the country's
central bank.
A ballooning budget deficit and a pensions and welfare timebomb could send the economic superpower into insolvency, according to
research by Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve.
Prof Kotlikoff said that, by some measures, the US is already bankrupt. "To paraphrase the Oxford English Dictionary, is the United
States at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure
to pay its creditors," he asked.
According to his central analysis, "the US government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this
context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds''.
The budget deficit in the US is not massive. The Bush administration this week cut its forecasts for the fiscal shortfall this year by almost
a third, saying it will come in at 2.3pc of gross domestic product. This is smaller than most European countries - including the UK - which
have deficits north of 3pc of GDP.
Prof Kotlikoff, who teaches at Boston University, says: "The proper way to consider a country's solvency is to examine the lifetime fiscal
burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or
simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national
bankruptcy.
"Does the United States fit this bill? No one knows for sure, but there are strong reasons to believe the United States may be going
broke."
Experts have calculated that the country's long-term "fiscal gap" between all future government spending and all future receipts will
widen immensely as the Baby Boomer generation retires, and as the amount the state will have to spend on healthcare and pensions
soars. The total fiscal gap could be an almost incomprehensible $65.9 trillion, according to a study by Professors Gokhale and Smetters.
The figure is massive because President George W Bush has made major tax cuts in recent years, and because the bill for Medicare,
which provides health insurance for the elderly, and Medicaid, which does likewise for the poor, will increase greatly due to
demographics.
Prof Kotlikoff said: "This figure is more than five times US GDP and almost twice the size of national wealth. One way to wrap one's head
around $65.9trillion is to ask what fiscal adjustments are needed to eliminate this red hole. The answers are terrifying. One solution is
an immediate and permanent doubling of personal and corporate income taxes. Another is an immediate and permanent two-thirds cut
in Social Security and Medicare benefits. A third alternative, were it feasible, would be to immediately and permanently cut all federal
discretionary spending by 143pc."
The scenario has serious implications for the dollar. If investors lose confidence in the US's future, and suspect the country may at some
point allow inflation to erode away its debts, they may reduce their holdings of US Treasury bonds.
Prof Kotlikoff said: "The United States has experienced high rates of inflation in the past and appears to be running the same type of
fiscal policies that engendered hyperinflations in 20 countries over the past century."
Paul Ashworth, of Capital Economics, was more sanguine about the coming retirement of the Baby Boomer generation. "For a start, the
expected deterioration in the Federal budget owes more to rising per capita spending on health care than to changing demographics," he
said.
"This can be contained if the political will is there. Similarly, the expected increase in social security spending can be controlled by
reducing the growth rate of benefits. Expecting a fix now is probably asking too much of short-sighted politicians who have no incentives
to do so. But a fix, or at least a succession of patches, will come when the problem becomes more pressing."
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