No Bailout

First of all a disclaimer: I am not an economist, I am not a banker, I am not in the mortgage or real estate business and don’t profess to know a whole lot about most things.

I hear warnings of another depression. I hear all kinds of scenarios of businesses going belly up. I hear it is absolutely necessary to bail out the economy.

Yes, we have a lot of strained financial institutions. Some are so mismanaged that they probably will fail while their corporate officers take millions in golden parachute benefits and move on to mismanage another company.

Tightening credit is not a bad thing. When I grew up, a few people had a credit account at department or grocery stores, but credit cards were non-existent. About the time I graduated college, I started receiving a credit card now and then. They were gasoline credit cards. My wife and I managed to get a Sears revolving charge card which meant we could purchase more than one item at a time on credit.

We paid cash for our food, cash for our gasoline, cash for our clothes, and cash for our meals out. It was a reasonably good system. If you had the money you could make the purchase. If you didn’t you just had to continue to wish.

During the time we matured to legal age, people could buy a car or a home IF they had a good credit record and the potential earnings to make the monthly payments. Even into the early-seventies, we continued to operate primarily as a cash based society. Inflation was almost unheard of. There were no corporate bailouts. If you screwed up, you screwed up. Learn your lesson and move forward. There’s nothing wrong with making a mistake. The problem occurs when you make it again.

On one of the blogs I read, someone mentioned we should shut down the stock markets for a week to allow for a “cooling off” period. That’s not a real bad idea.

I don’t think a buyout or bail out is necessary. When companies get themselves into financial trouble, let them go out of business or sell to another interested company. So what if a major manufacturer goes out of business? There are plenty of other manufacturers out there to take up the slack. So what if a major bank goes under? Their good book of business will be easily absorbed by other financial institutions.

Companies go out of business every day. Companies are sold every day. Companies fail every day. So let them do it.

I see no reason to “bail out” those who made bad decisions and who are apt to do it again. That would not solve the problem. It would simply exacerbate the problem. Oh yes, those who are in debt up to their eyeballs will probably shed tears and beg for relief. But people and companies who are financially responsible will continue to get along just fine.

It Hurts

We, the American people, are about to throw $700 Billion at a problem and hope that it gets solved. I’d like to see the worksheets that added up to $700 Billion. I just can’t fathom that amount.

Will this do the job? We are told that the powers to be don’t really know. Maybe, maybe not.

I would like to know is how the money is actually being allocated and to whom. Yes, it is a serious financial problem. But it was brought about by widespread deceitful practices that robbed people of their money, their dreams, and their family security by bringing wealth to the perpetrators.

Are we bailing out those shameless, unprincipled, perfidious real estate agents, mortgage brokers, and mortgage companies who are responsible for this mess? I hope not.

There’s an easy paper trail to follow for every unscrupulous transaction. I’d like to see the authorities follow that paper trail and let the general public know who the shameless thugs are. I know they didn’t break any laws. But they sure violated the consumer. Their names should be made public in local communities all across America. They should be called forward and pointed out so others will not do business with them.

Personally, I think they ought to have to give up a couple of fingers or a hand so they will remember their dastardly deeds.

The problem we are trying to correct is basically an ethical and moral problem. Bailing out those deceitful, unprincipled shysters will not change their ethics or morals. Rather it will convince them that they have a green light to continue the practices.

It’s a shame to put the public through even more misery and not put an end to the problem. It makes me want to just sit down and cry.

An Unusual Year

This is a very unusual election year. We have an incumbent President who everybody likes and hates at the same time. I think it’s because “W” is truly a nice person but just an awful manager. His ratings are as low as any in history for a President.

Then we have Obama. He’s the first minority to ever be nominated by a major party as their presidential candidate. He’s young. He’s exciting. He’s a great candidate but, he has very little experience in national government. But, hey neither did George Bush, Bill Clinton, Jimmy Carter or Ronald Reagan. So, how important is experience at the federal level?

John McCain is a true American hero. If elected, he will be the oldest first term President in history. He started out aligned with George W. Bush but has done an about face and now tries to position himself as one who will shake up Washington. A man with a quick and fierce temper, he has the respect of millions of Americans.

There’s Joe Biden as a vice presidential candidate on the ticket with Obama. A long time Senator who has run for president a couple of times. Biden has a perpetual case of foot–in-mouth disease. Widowed early in his first marriage, he devoted himself to raising his two sons. He travels two hours each way to and from Washington each day. He sleeps at home and is not a part of the Washington cocktail crowd.

The newest player in the election drama is Sarah Palin, the current governor of Alaska. She’s attractive. She has a great looking family. She married her high school sweetheart. Her approval rating as governor runs in the low to high eighties. Again, she has no Washington experience but promises to shake up Washington. She too appears to suffer from foot-in-mouth disease.

The issues in this election are quite different than in most elections. There’s the war in Iraq which has the potential of becoming another Korea as far as the commitment of U.S. troops is concerned. Iraq also has the potential of becoming another Viet Nam where we had no exit strategy. In my opinion Iraq is a lose/lose situation. There’s no way we can post a “mission accomplished” sign and really mean it.

The oil situation is something to be dealt with. The price per barrel is artificially high. The situation is raping the U.S. Economy. The price of oil affects everybody and almost everything we use in life. Both major party candidates say they support more offshore drilling to include our Atlantic and Pacific coasts, if a state approves drilling fifty miles or further off their coasts.

The economy is in the worst condition it has been in almost a century. The immediate response is for the government to bail out everybody. Nobody has any clear cut plan of how to deal with it. It is definitely starting to adversely impact this election.

Then there are the normal issues of health care, education and taxes.

In the midst of all this a couple of things are evident. America wants new blood in the White House. Americans really don’t give a big flip about Washington experience.

Why do I think that? Obama has drawn record setting crowds throughout this campaign. He has delivered speeches before 50,000, 60,000 and up to 80,000 people. Can you imagine Americans standing in line to hear a political speech?

Once Sarah Palin joined the McCain campaign, she has been the draw. Lately it was reported that she drew 60,000 in Florida. The fact that McCain just happened to be there was incidental. Clearly they were there to hear Palin even though she is on a short leash and highly scripted. Americans don’t really care. They are hungry for change.

Or, perhaps, Americans are hungry for relief. Either way, this is an unusual election year.

Funky White Boy

I’m still in a “funk”. I’m worried. I like for my life to be orderly. The past has to be tidy and the near future well planned. I don’t like worry.

When you are self employed, you find that some years are better than others. That’s been true for me, but we’ve always been able to avoid debt and pay our bills on time. We are indeed fortunate.

As part of being self employed, you must provide for things that many employers provide as a benefit. I’m responsible for my own insurance, my own retirement, my own sick leave, my own jury duty, etc.

Our health insurance has a maximum deductible for in patient hospital. I have that maximum stored away in savings in case I ever need it. I contribute to my own retirement and keep my fingers crossed that the stock market doesn’t screw over me.

I don’t have disability insurance, but I have squirreled away two years worth of income in case something happens to keep me from working. If I make it to retirement without using it, it will go toward my retirement. I plan to continue to work for another five years before retiring.

In my business, you have to line up your clients before the end of the calendar year because after the first of the year the opportunity for new business decreases expotentially for the first six months. There are three and a half months before the end of the year.

Some clients are temporary and some are “bread and butter” clients. Over the last two years I have lost 32% of my income. Next year there’s the possibility that I will lose 60% of the remainder. The reason for all the losses have been corporate mergers and corporate reorganization. No matter how hard I work or how good a job I do, I cannot have any influence over those factors.

I’m not asking for any sympathy. No, not at all. But, I do want to explain what has me in a “funk”.

Free: Slightly Used Weather Radio

In April I bought my first weather radio. Everybody else had one so I figured I ought to have one too.

There's only three "weather" events that bother me; earthquakes, hurricanes, and tornadoes. There's no way to accurately predict an earthquake. With a hurricane we know days in advance that we may be in peril. But tornadoes come up quickly, move rapidly and do a lot of destruction.

I could care less about a thunderstorm warning. Hell, I've lived with them all my life and haven't had one hurt me yet.

I think people who pay attention to "watches" need to rethink their priorities in life. A "watch" simply means there's a cloud in the sky...somewhere. That's it, period. If that offends you, tough.

Yet our National Weather Service has gone out of it's way to infringe upon our lives in every possible way. They issue watches out the ying-yang. If rain is forecast tomorrow, they issue a flood watch today and follow that up with a severe thunderstorm watch. Give me a break!

The local TV weather people have taken the National Weather Service watches and warnings and make a living of trying to scare people about the weather. Heck, it's too sunny, it's too hot, it's too cold, the wind is blowing too hard. It might rain. We might experience lightning. The sky is falling and the world is rapidly coming to an end.

Well, I bought a weather radio that I could program to just warn me about what I wanted to be warned about.....tornadoes in Rankin County. I'm not interested in Smith County, Hinds County, Madison County, Neshoba County, or Scott County.....just Rankin County.

I programmed the radio to do just that; warn me only of tornado warnings issued for Rankin County. I live pretty near the center of the county and would probably have three or four minutes to react if the alarm goes off. That's plenty of time for me. The little radio diligently did it's job. No false alarms. When it sounded, we scrambled for the basement.

All of a sudden I started getting warnings for other counties. I inquired of the National Weather Service as to why. They replied they changed the way they issue warnings. Now they issue warnings for the entire projected path of the weather event.

That sounds logical, I guess. But considering the small amount of information used to issue a warning, it ain't good enough for me. Hell, I don't give a damn about a hook on the radar screen. If you're gonna warn me about a tornado, it better be tossing mobile homes around and uprooting trees.

So, rather than listen to warnings that I could care less about, I'm giving away my radio. It's a good one. It works well. Never had a problem with it. I only have a problem with the "chicken little" attitude of the National Weather Service. Maybe I'm crazy, but today I received four tornado warnings. Only one was headed for Rankin County and they "lost" that one before it ever made it to the county line.

If you want a good weather radio free, including instructions and batteries, just let me know and it's yours.