A question asked:
What I would like to know is how many mortgages are really from people that couldn’t pay for their home when interest rates rose and how many foreclosures were from investors that bought with interest only loans trying to flip properties after they appreciated and got caught in the economic cycle. You know it seems that programs that are set up for altruistic purposes are then taken advantage of by greedy people. Is this inevitable or can safeguards be built into the process? I just don’t believe that things are so black and white (no pun intended). How can an attitude of service and sacrifice be fostered in this country above the where’s my piece of the pie thought.
I don’t have a good simple answer to your question about fostering service and sacrifice upon a citizenry. I do believe allowing corporations carte blanche and then bailing them out when their excesses catch up and bite them in the butt is not the answer. I don’t believe the advertisement model of capitalism teaches folks to conserve and save for the future, in fact it hypes quite the opposite in the face of evidence that we do indeed live in a finite world. I do believe that the modern Evangelical movement preaching we Americans are wealthy because we deserve to be — and God says so — does not promote peace and harmony on a planet of diverse culture. But I do believe government can play a role in suggesting ethical behavior and promoting the common good.
Like you, I have little sympathy for those who saw a way to make a quick buck, based on a hugely optimistic market demand, which ignored the dangers of over supply. I have measured confidence in a capitalistic market where domestic policy promotes economic growth without passing costs unfairly to the public domain. I am talking government oversight and regulation of private sector players, as a matter of practical necessity.
Investigative reporting strongly suggests some real estate advisers and investment bankers persuaded homeowners to take advantage of these huge market run ups and to cash in while they had a chance. This behavior from “experts” is in violation of a common sense rule against risking a primary residence to speculation. I am suggesting, these loans fueled by wildly rising prices, often with inflated borrower claims of wage potential, would not have happened without the advice and consent of lenders. Home buyers fell prey to their own greed, and also to the greed of those they trusted for their leadership.
We can distill the argument one further step. Realtors encouraged and investment bankers underwrote bad loans because government oversight had been eased. The assumption that free markets will self-perform more efficiently without government intervention, was the guiding doctrine. This has been exactly the case. Unfortunately though predictably, the pendulum of an unrestricted market allows for spectacular highs and disastrous lows, when there is not a governor in place which we call regulation.
Tags: altruistic, service and sacrifice
Ironically, the theme of the Republican Convention was “service”. Yet these same Republicans demonstrated no reservation when denigrating those who organize and aid communities disenfranchised from political power. A leader as “public servant” is always oxymoronic for enablers of the wealthy. Perhaps “private servant” is a more appropriate term for they who mock grassroots involvement among the least of our citizens. Perhaps service is but a naive term; a concept useful in duping middle Americans while an elite and wealthy class grabs more power. You think?
Republicans would prefer aid to poor unfortunate souls, to be enacted only in a religious frame for political effect. Top down authority, as practiced by churches, assures little upward mobility among impoverished individuals. If community workers gain power through their efforts, it is necessary they apprehend the sense of mastery their new found privilege requires; that, or risk being ostracized and constrained. It would never do to have an “uppity” advocate for the least of us, preaching populist notions of equality and civil rights. This is what the governing class means by separation of church and state. Stop your whining about life’s situation; your reward will be in the next life.
Smug attacks against community service offered by numerous Republican speakers in St. Paul at their convention must not go unanswered. Grassroots organizers have a long history defending democracy and advocating for the power poor in America. While upsetting the status quo, community organization offers an humane alternative to a ruthless business model which only rewards success at the expense of the less fortunate among ourselves.
This is a bit thin, though intellectually and politically significant concerning Republican VP selection, Sarah Palin.
During the 2006 race for the Alaskan governorship, the current presumptuous Republican VP nominee responded as follows to the written questionaire from the Eagle Forum Alaska
2006 Gubernatorial Candidate Questionnaire:
Are you offended by the phrase “Under God†in the Pledge of Allegiance? Why or why not?
Written response by S. Palin:
“Not on your life. If it was good enough for the founding fathers, its good enough for me and I’ll fight in defense of our Pledge of Allegiance.”
FOR THE RECORD:
Francis Bellamy (1855 – 1931), a Baptist minister, wrote the original Pledge in August 1892. He was a Christian Socialist.
His original Pledge read as follows:
‘I pledge allegiance to my Flag and (to*) the Republic for which it stands, one nation, indivisible, with liberty and justice for all.’ [ * ‘to’ added in October, 1892. ]
In 1923 and 1924 the National Flag Conference, under the ‘leadership of the American Legion and the Daughters of the American Revolution, changed the Pledge’s words, ‘my Flag,’ to ‘the Flag of the United States of America.’ Bellamy disliked this change, but his protest was ignored.
In 1954, Congress after a campaign by the Knights of Columbus, added the words, ‘under God,’ to the Pledge.
The Pledge was now both a patriotic oath and a public prayer.
So she ain’t a historian either, unless you consider the Catholic organization, the Knights of Columbus “founding fathers” back in 1954.
Plus, all of a sudden I feel so old.
On August 4th of this year, Personal Investment Reporter — Russell Wiles of the Arizona Republic filed a page one story about the viability of Social Security. Wiles spoke concerning “long-term financial dangers”, and referenced a recent report by the Social Security and Medicare Board of Trustees (SSMBT). So far so good, that is what we call news.
While Mr. Wiles is entitled to his opinions, articles on the front page of the largest daily circulation newspaper in Arizona deserve to remain factual reports, not editorial pieces. Mr. Wiles correctly identifies the volatility of the Social Security debate, then proceeds to obfuscate the facts concerning the solvency of the Social Security fund. So I emailed him my disappointment with his writing, as follows.
August 4, 2008
Mr. Wiles, you wrote on page one of the Arizona Republic — Monday, August 4, 2008:
“The system faces long-term financial dangers, with the most recent Social Security trustees’ report predicting expenditures will start to outpace tax revenues by 2017, with the fund mostly exhausted by 2041.” (emphasis mine)
No, the fund will not be exhausted by 2041 according to the Social Security Board of Trustees. The Board predicts the fund reserve will be mostly exhausted by 2041 if nothing is done before then to correct the shortfall. The fund itself will be fully solvent in 2041.
And furthermore, one can find in print:
Social Security is a “program that the Congressional Budget Office (CBO) projects to be fully solvent until 2046 with no changes whatsoever. CBO projects that even after the date when the program can no longer pay full benefits it would always be able to pay larger real benefits than what current retirees receive”.
As a personal finance reporter, you must certainly understand the difference between what the Social Security Board of Trustees wrote and what you reported. I accuse you of mis-speaking at best and fear-mongering if your meaning was intentional.
Sincerely,
Jeff Stana
Assessments vary, but the difference in the projections of the SSMBT and the CBO may well reflect adjustments for the latest inflationary pressures acknowledged in the newer SSMBT estimate. Social Security payments are scaled to cost of living measurements. Higher inflation (which we have been experiencing for the last few years — accelerating of late) adversely affects reserves, perhaps accounting for the five year difference in marking the exhaustion of reserve funds.
Using the latest SSMBT figures, Social Security remains fully solvent until 2041, even if nothing is done to address this future deficit. These are the facts. After 2041, Social Security beneficiaries will receive reduced payments, unless additional revenues are generated. It is not the case that all funds will be exhausted, as might be deduced from the writings of Mr. Wiles. That is why; he was rightly accused of fear-mongering.
The merit for and against the existence of Social Security is a different argument, waged for political and philosophical reasons. Those who would wish the demise of Social Security, for whatever reason, tend to exaggerate future deficits with the administration of the Social Security program. Convoluting the viability of the Social Security Administration with the Medicare/Medicaid program is another common tactic taken by the detractors of Social Security. At present, various solutions to the more calamitous trouble with spiraling costs for health care and medical insurance are under consideration and are being seriously debated in Congress.
Mr. Wiles kindly responded to my personal email the very next day. He employed the above mentioned second stratagem, pooling the financial troubles of Social Security with Medicare. This is dishonest and hints at ulterior motives beyond a dispassionate financial assessment. Again, political opinion is best suited for the editorial pages. It is not front page news. In his emailed response to my criticism, Mr. Wiles wrote:
OASDI tax income will begin to fall short of outlays in 2017, and will be sufficient to finance only 78 percent of scheduled annual benefits in 2041, after the combined OASDI Trust Fund is projected to be exhausted. (emphasis mine)
The combined OASDI Trust Fund about which Mr. Wiles speaks, is the combination of the Social Security Administration and Health Insurance Trust Funds of the Medicare/Medicaid program. Though both programs are designed to offer protection for Americans without continuing wage income, individually each fund is not equally at risk of default. Lumping trust fund issues together and predicting grave consequences, does much to raise national anxiety. It does little to advance thoughtful ideas or promote solutions with which we can mostly agree.
It is admirable to advertise a need for financial correction, when pursued without melodrama — to advocate for adjustments to shortfalls in revenue and/or the regulation of outlays in expenditures at Social Security. Cool analysis will not be remembered with the fervor of dire warnings of eminent disaster. Yet deliberate, serious calculation is required to find honest answers that promote the general welfare of our nation.
Tags: cultural anxiety, insurance industry, neoconservative, wing-nut conspiracy
The presumptive GOP candidate for President of the United States (POTUS) has verbally stumbled more than a few times this election cycle. Perhaps a senior citizen’s impatience with others, forged from years of experience, powers these mistakes. Blunders of age though, cannot satisfactorily explain the extent of these public gaffes. Maybe we are witness to the infamous temper of J. Sidney McCain. If so, how many more faux pas can this candidate sustain before a deja vu of surrealistic proportion shoots down the Republican presidential nominee again.
The other day in Denver, saw a McCain pander to the base of epic dimension. This might not be the last nail in John McSame’s political coffin, but it could be sufficient to seal the final deal. For in steering a hard right course, the Republican Senator offended nearly all demographic sides.
- Start with a rabid wish to continue an unpopular and very expensive war,
- Season with a desire to extend tax cuts which overwhelmingly favor the extremely well off,
- And finally, pay for this mess by cutting entitlement programs such as, social security and medicare/medicaid.
If that’s not a half-baked recipe for political suicide, packed with dangerous ideas easily understood by both the young and the old, I don’t know what is. And for dessert, promise to balance the budget by 2013. (That should make even the most sour-faced Republican laugh).
Give J. Sidney McCain points for humor, he has earned it. And all because of the need to mouth tired old conservative talking points, without a shred of evidence, without any hard figures to back these worn out Republican memes. Pure quackery. Complete fiction.
- Cut taxes (no matter that wealthy folks reap most of the bounty),
- Curtail entitlement programs (a head-nod to racist fervor rampant among the wingnut base),
- And more war (no matter the cost in blood and treasure).
G.W. Bush may be a lame duck, but Senator McCain walks and talks like a political dead duck.
Tags: balance the budget, national security, war