Wednesday, February 25, 2009

Back in the USSA

The Patriot recently returned from a short vacation to Italy and has been having some trouble readjusting to the American lifestyle. Some of this may be related to lingering jet lag, but I suspect a good deal is malaise at returning to a country that seems so small minded and paranoid compared to its European neighbors. Returning to US soil through Immigration and Customs was a humiliating experience; poorly educated bureaucrats drunk with their own power, screaming at people for talking on cell phones and deigning to ask impertinent questions about what line to stand in while waiting to be evaluated for the rubber glove treatment. So it goes. We may have gotten rid of Bush, but his legacy lives on in the police state that he created and which Obama shows little interest in dismantling.

I’m not holding out Italy as some sort of paradise. Far from it. But what Italy, and the rest of “old Europe” have going for it is a lifestyle outlook that eschews consumerism in favor of simple pleasures like friends, good food, and an appreciation of leisure. Before you all write in to flame me, I am aware that Europe has issues with rigid class structures and an appalling record on dealing with immigrants. Nevertheless, the small cars, small apartments, rigidly enforced recycling program and focus on living life rather than buying crap you don’t need is something American’s should pay attention to. For better or worse we’re all going to have to start living small.

I watched Obama’s speech last night and I was not at all impressed. After a few minutes, I felt as if I was hearing the campaign rhetoric repackaged and rebranded for a slightly different audience. The speech was long on style and short on substance. With the stock market still in freefall and the "details" of our economic salvation yet to be revealed, this administration can hardly be said to have taken the bull by the horns-despite the lofty rhetoric.

Many of the ideals espoused by our Dear Leader lacked a basis in anything approaching objective reality. Obama sternly lectured that corporate executives will not be allowed to profit form the financial bailout-and yet refused to push for any strings to be attached to the money. He stated that bold action was necessary to save the country from the economic crisis and yet was short on specifics. I have a few ideas. How about bold actions like FBI forensic accountants pouring over the books of bad banks looking for fraud. How about bold action to claw back the bonuses paid to executives from the last round of TARP money? None of this is in the stimulus plan he was crowing about last night.

I see no evidence that Obama's plan to fix the banks does what the American people are demanding-hold those who gambled with the public's money accountable-or what the economy requires. His plan seems to be little more than a continuation of the philosophy of the Bush years.

While our president speaks of “necessary sacrifice”, the centerpiece of the economic recovery plan is apparently more lending and more debt. Oh, and printing more money to pay for everything. Am I alone in finding this approach to be, well, insane? Wasn’t it the accumulation of debt and laxity in lending that started us down the rabbit hole?

Tuesday, February 10, 2009

Meet the New Boss

I would have thought that this administration would have had a better read on the pulse of the populist rage sweeping the county, but I guess I was wrong. The new stimulus plan is a disaster and it won’t work. It also isn’t very much different from the first TARP plan, who’s funds disappeared down the rabbit hole of $40,000 commodes and corporate jets.

The architect of Tarp II is none other then Treasury Secretary Timothy Geithner, erstwhile head of the New York Federal Reserve and overseer of the financial meltdown. Why Obama put this man in charge of The Treasury when his short-sightedness was instrumental in causing the problem in the first place, I don’t know. The man couldn’t even be bothered to pay his own taxes, but he is rewarded by control over the entuire financial system. Nice.

As intended by Mr. Geithner, the current stimulus plan stops short of intruding too significantly into bankers’ affairs even as they start to receive corporate welfare. The $500,000 pay cap for executives at companies receiving assistance applies only to very senior executives, who will likely find a way around it anyway. The plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment. Perhaps most galling, while the administration will “urge” banks to increase lending, it will not attach any conditions to the billions of dollars in new government money. This plan is hardly different from the Bush administration’s approach of greasing the palms of the same companies and executives who peddled risky loans and investments at the heart of the crisis. How is this a change from “the failed economic policies of the last eight years?”

I think the plan is a mistake. I also think that any plan which props up home values, and extends more credit to overextended consumers is ill conceived at best. Irresponsible use of credit got us into this mess in the first place. How is extending more credit so people can resume living beyond their means going to solve this financial crisis?

This is just more protection for the wealthy and their money. I cannot understand the thought process behind a government decision that risks economic catastrophe to protect the wealthiest Americans while enraging everyone else. I think the administration will come to deeply regret this decision.

Friday, February 06, 2009

Down the Drain

The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession. The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices. This single-minded obsession government has with propping up housing values is misguided at best and seriously damaging to the economy at worst. Housing prices have to continue to fall until they are in line with incomes and the government should not do anything to screw around with the natural correction currently going on in the housing market.

The tax credit assumes that people have sufficient liquid resources for a 10-20% downpayment. The US has had a negative savings rate for the last ten years and the value of most people’s investments has been cut by ½ in the last quarter of the last year alone. I doubt too many Americans are sitting on a big wad of cash they feel would be best spent gambling on the unstable housing market right now.

The housing industry needs to downsize. There are over 2,000,000 excess housing units in the US, most of them overpriced. There was far too much construction during the boom. This not only created an excess of housing but also an excess of unsustainable jobs. Having an economy based upon building houses and selling them to each other rather than on the production of tangible goods or innovative technologies is the difference between a consumption economy and a production economy. Consumption economies are inherently unsustainable and bound to fail.

And frankly, the whole ideology of saving the economy by spending was discredited, wasn’t it? We're supposed to spend our way out of this? With what real income? With what credit? Isn't spending imaginary money what got us into this mess in the first place?

“Businesses are panicked and fighting for survival and slashing their payrolls,” said Mark Zandi, chief economist at Moody’s “I think we’re trapped in a very adverse, self-reinforcing cycle. The downturn is intensifying, and likely to intensify further unless policy makers respond aggressively.” The Obama administration needs to stop fucking around with bipartisanship and come up with some drastic solutions to what is fast becoming a spiraling economic disaster. 598,000 jobs were lost in January of this year. A half million jobs. In one month.

Monday, February 02, 2009


There has been a lot of discussion in the blogosphere about a “study” that was done last week by Parenting magazine which broke the startling news that married women, as a whole, are pissed at their husbands. The reason? According to author Martha Brockenborough:

"We're mad that having children has turned our lives upside down much more than theirs. We're mad that these guys, who can manage businesses or keep track of thousands of pieces of sports trivia, can be clueless when it comes to what our kids are eating and what supplies they need for school. And more than anything else, we're mad that they get more time to themselves than we do."

I am going to reserve comment for a minute on how completely banal and stereotypical such a depiction of lazy husbands and nagging wives sounds. I have to wonder though, who lives like this? Are there really still places in America where Everybody Loves Raymond is an accurate depiction of life in the suburbs? My gut instinct is that this “scientific” survey is nothing more than a reflection of the views of a cross section of the irate mommies who read Parenting magazine. In other words, white, upper middle class women who, for whatever reason, are stuck in lousy relationships with men they have little in common with.

The real problem? Our relationships are out of whack because our economic system is out of whack. If both parents are working full time the home is always one step away from chaos. Our children are not only being being raised by strangers out of necessity but they are being taught rigid social conformity as if it is some kind of civic virtue. (We sacrifice art and music in school for business and math and expect that we are going to have well-rounded kids-but that’s another posting entirely).

Our society needs to follow the European model and give more support to families with children. A fraction of that bailout money could go a long way towards paying for programs that allow more flexible work hours and options for part time work for both parents. We should demand that Obama and Congress pass laws that insist that companies allow more work-from-home options, and provide paid maternity and paternity leave. We need an economy that brings the buying power of our wages out of the 1970, and we need universal, single-payer health care, and publicly funded college, and retirement. Don’t tell me the government can’t afford it. If we can afford the banking bailout and bankroll two wars simultaneously, we can afford it.

Fuck Parenting magazine and their facile approach to a serious social problem. Instead of fomenting a war between the sexes, if they have any interest in helping parents they should use their platform as a bully pulpit to steer some of the billions of dollars going to bail out the Wall Street Fuckers to support working families.