MORALITY AND THE LAW CLXIV
By Stephen Ellis
THE ECONOMIC ROLLER COASTER RIDE
Nobody asked me, but…
To a limited extent, you can count me among the people who do not fully understand the economic roller coaster ride we are on. One day the Dow Jones Average is down 500 points, the next day its up 500 points…one day Treasury Secretary Henry Paulson says he’s going o buy delinquent mortgages from the banks…the next day he says he already spent half of the $700 billion bailout…one day Paulson is flushing the banks with money, the next day major banks like Citi Bank are ready to be taken-over by government regulators…what’s really going on?
If there is one word that can best explain this whole thing, it’s “confidence”. The world has lost “confidence” in the American economy. To a very limited extent, this lack of “confidence” is justified because of the greedy and corrupt top management of many of our long-trusted firms. Frankly, I would love to see some the automobile industry’s top execs, some of Wall Street’s top execs, some of the banking industry’s top execs…rot in jail for what they’ve done to the American economy. More important, I’d really like to see George W. Bush and Dick Cheney rot in jail with them.
The keys to this economic debacle are Bush and Cheney. Bush appointed his Texas cronies to the most important positions in the world…and they proved they were totally incapable of handling the jobs. Rumsfeld was a disaster as Secretary of Defense and got us into the Iraq War. Colin Powell was good Secretary of State, but Bush fired him because Powell wouldn’t do everything Bush told him to do. So, Bush appointed his “yes-girl”, Condoleeza Rice as Secretary of State. He appointed an unknowledgeable Ben Bernake to head the Federal Reserve. He appointed a totally incompetent, Henry Paulson, to be the Secretary of the Treasury. Bush appointed unqualified and inept people to head FEMA, the transportation system, the commerce system, national security, etc. And then, as a topping for the cake, Bush and Cheney took away anything that would regulate the economy and gave the greedy and corrupt free reign over absolutely everything.
Is it any wonder that our people have lost “confidence” in America?
It is a lack of “confidence” that is driving the economic roller-coaster. Most companies are showing much lower profits…but they’re still showing profits. Ridiculous as it may sound, the sub-base of our economy is still strong…but people don’t know where it’s headed. Because most companies don’t know what to expect from the economy, they’re playing-it-safe and cutting back the number of employees…thus creating greater unemployment. Greater unemployment means that people have less money to spend, so the economy is falling into a downward spiral.
Under Bush, banks could lend someone else’s money and make a profit. Banks would lend money for mortgages (improving the real estate market), then they would “pool” the mortgages, and sell the "pools" off to investment groups (maintaining a small servicing charge). The banks would get their money back from selling the "pools" of mortgages and were free to do this over and over again. To the banks and to the real estate market, this was great. But then, without regulations, banks started to get greedy and make loans to people who should not have gotten loans. “No money down”, etc.
It took longer than it should have, but investors who bought these pools of mortgages started to face the reality that a lot of them were not making payments. Most of the "no money down" home buyers had nothing to lose by handing their houses back to the bank or allowing them to be foreclosed upon. Many had borrowed second and third mortgages on overpriced homes. The Wall Street firms demanded the banks take the mortgages back. The banks refused and the market to buy pools of mortgages from banks dried-up overnight. This meant that banks were now stuck with a ton of mortgage pools they could not sell off...and would have to lend their own money, and not someone else’s money, for mortgages. So banks tightened up their credit requirements to a ridiculous pointand even legitimate borrowers couldn't afford the down-payment requirements lenders were now demanding. Houses stopped selling and the real estate market started sliding down.
Congress pushed through a $700 billion bailout bill to buy-up the foreclosed on mortgages. The whole idea behind the bailout was to take the bad debt away from the banks and encourage them to start lending on real estate and manufactured goods again. A good idea…but the inept Henry Paulson changed the plan: Now he wants to give cash to the banks and let them use it however they want. Without regulations, of course!
Which reminds me: Paulson had said that fully half of the $700 billion has already been spent. I’d like to know how, why and where it was spent…but Paulson isn’t telling.
And the automobile industry is crying the blues and saying that if the government doesn’t lend them 5 or 10 billion, the US automobile industry will collapse. Maybe, with the incompetence of their top executives, it deserves to collapse! While every car manufacturer in the world was gearing up to build smaller, more economically operating, cars, GM was building and promoting …the Hummer. If any money is loaned to our Big 3 auto makers, it should come with the caveat that all present execs are fired…without golden parachutes…and replaced with younger, innovative thinking.
Besides, what is the “American” automobile industry? The Big 3 are no longer the mainstay of the American automobile industry. Toyota of America builds and sells their cars here and the profits go to the American Toyota Corporation that hires lots of people to build the cars...here! Honda and Nissan do the same. Fifty percent of all Mercedes and BMW cars are built in America by American companies. If the Big 3 fail, their slack will be taken-up by the other car manufacturers. Jobs? Sure, there will be a lot of jobs lost…initially…but in very short order, the other car manufacturers will need to hire every available skilled worker. When money becomes more available, the American romance with the automobile will be reborn.
Will the Obama administration be able to straighten-out our economy? In all probability, yes. Just based on the quality of cabinet members selected so far, I’m guessing that an Obama administration will restore “confidence” in our economy. Just look at how the stock market has reacted to the naming of members of Obama’s Cabinet. Each new announcement has brought about a surge in stock prices. It’s not going to happen overnight, but just watch what a restoration of “confidence” in our economy will bring.
As I said…nobody asked me.
Sunday, November 23, 2008
Monday, November 17, 2008
DEREGULATION
MORALITY AND THE LAW CLXIII
By Stephen Ellis
WHATS WRONG WITH DEREGULATION
Nobody asked me, but…
I doubt very much, no matter who you voted for, that there will be any disagreement as to the following:
1. John McCain has an excellent sense of humor. Those of us who saw him on Jay Leno’s “Tonight” show may wonder if he should be working as a stand-up comic. I don’t mean that in a negative way. His responses to Jay Leno’s questions were genuinely funny. Of course, they were intended to be funny, and it’s a tribute to the man who worked very hard to get elected and lost that he still maintains a a strong sense of humor.
2. Obama is already working very hard getting ready to become the President of the United States. If anyone thought that Obama was going to take a rest and relax after a grueling campaign, they were mistaken. I do not believe, in the seventy six years I’ve been alive, that I have ever seen a President-Elect work so hard at preparing his transition to take office as Barak Obama.
To me, this is a tribute to both candidates. Anyone who believes that either candidate would not have made a better president than George W. Bush, should not be wasting their time reading this blog because facts are meaningless to such people.
We are now engaged in a great economic turmoil. We can, understandably, cast the blame on the greed of some of Wall Street’s profiteers, and upon banks that made a profit center out of making money without lending their own money or upon insurance companies who took their safety reserves and invested them in questionable “derivatives” or to automobile manufacturing giants . More than anything else, we can cast the blame on the word “deregulation”. Personally, I hate regulations that make me do things in a certain way…but the fact is that there are a very high number of people who, if not regulated, have absolutely no conscience: they will rape and pillage everyone’s else’s economy, steal from the retirement accounts of hard-working people, etc.…just to fatten their own pockets. They will lie and artificially inflate the value of their company’s stocks to deceive the public. They make a mockery of the Securities Exchange Commission whose job it is to oversee them. So, as distasteful as it is, regulations are not only important, they are mandatory!
Plunderers like Michael Milkin, Gary Winnick, Lehman Brothers, Enron and Arthur Young always come out on top…while their investors are forced into bankruptcy. Usually, the investors are hard-working people who are trying to assure themselves of a decent retirement. It’s very difficult for someone who’s been on a salary all his/her life to set aside something for their later years after paying for their kids’ education, etc. So, many of these people believed the “hype” and TV ads about investments being secure…about real estate being better than money in the bank…about certified audits really being accurate…and invested their retirement accounts, their IRAs and their 401Ks with the plunderers.
Our Uncle Sam is our “Uncle” and not our “Dad”. The government should not be expected to step in and secure investments made foolishly or greedily. But, if there were strongly enforced regulations in place, the plunderers would not be able to entice unsophisticated investors into extremely sophisticated and risky schemes.
As I said…nobody asked me.
By Stephen Ellis
WHATS WRONG WITH DEREGULATION
Nobody asked me, but…
I doubt very much, no matter who you voted for, that there will be any disagreement as to the following:
1. John McCain has an excellent sense of humor. Those of us who saw him on Jay Leno’s “Tonight” show may wonder if he should be working as a stand-up comic. I don’t mean that in a negative way. His responses to Jay Leno’s questions were genuinely funny. Of course, they were intended to be funny, and it’s a tribute to the man who worked very hard to get elected and lost that he still maintains a a strong sense of humor.
2. Obama is already working very hard getting ready to become the President of the United States. If anyone thought that Obama was going to take a rest and relax after a grueling campaign, they were mistaken. I do not believe, in the seventy six years I’ve been alive, that I have ever seen a President-Elect work so hard at preparing his transition to take office as Barak Obama.
To me, this is a tribute to both candidates. Anyone who believes that either candidate would not have made a better president than George W. Bush, should not be wasting their time reading this blog because facts are meaningless to such people.
We are now engaged in a great economic turmoil. We can, understandably, cast the blame on the greed of some of Wall Street’s profiteers, and upon banks that made a profit center out of making money without lending their own money or upon insurance companies who took their safety reserves and invested them in questionable “derivatives” or to automobile manufacturing giants . More than anything else, we can cast the blame on the word “deregulation”. Personally, I hate regulations that make me do things in a certain way…but the fact is that there are a very high number of people who, if not regulated, have absolutely no conscience: they will rape and pillage everyone’s else’s economy, steal from the retirement accounts of hard-working people, etc.…just to fatten their own pockets. They will lie and artificially inflate the value of their company’s stocks to deceive the public. They make a mockery of the Securities Exchange Commission whose job it is to oversee them. So, as distasteful as it is, regulations are not only important, they are mandatory!
Plunderers like Michael Milkin, Gary Winnick, Lehman Brothers, Enron and Arthur Young always come out on top…while their investors are forced into bankruptcy. Usually, the investors are hard-working people who are trying to assure themselves of a decent retirement. It’s very difficult for someone who’s been on a salary all his/her life to set aside something for their later years after paying for their kids’ education, etc. So, many of these people believed the “hype” and TV ads about investments being secure…about real estate being better than money in the bank…about certified audits really being accurate…and invested their retirement accounts, their IRAs and their 401Ks with the plunderers.
Our Uncle Sam is our “Uncle” and not our “Dad”. The government should not be expected to step in and secure investments made foolishly or greedily. But, if there were strongly enforced regulations in place, the plunderers would not be able to entice unsophisticated investors into extremely sophisticated and risky schemes.
As I said…nobody asked me.
Saturday, November 8, 2008
MORALITY AND THE LAW CLXII
By Stephen Ellis
NOW IT’S ALL OBAMA’S PROBLEM
Nobody asked me, but…
Now that the election and the electioneering is over for another couple of years, let’s try and understand what really happened:
In my opinion, Obama did not win a “mandate” as almost every newspaper will allege. He did win a significant majority of the popular vote (approximately 5 million) compared to Bush winning a popular majority of 300,000 in 2004 and losing the popular vote by 200,000 to Al Gore in 2000. The electoral votes were no less impressive. But I do not believe that most people voted “for” Obama…I believe they voted “against” eight years of incredible mismanagement of George W. Bush and the lies and deception of Dick Cheney.
Never, in U.S. history has there been such a bad presidency as there has been with Bush. Nixon was more corrupt and Jimmy Carter was more ignorant. But together, Nixon and Carter did not equal the ineptitude of the Bush administration.
It took Bush eight years of gross mismanagement and stupidity to wreck the economy of the United States and the rest of the world. Please don’t expect Obama to restore it to its former glory in one or two years.
Obama could probably gain a lot from using people like me in his administration, but he will never ask me or the thousands of others who just want to help. Yet, the tasks facing him are no less than Herculean:
The first thing that his attention should be drawn to is the enormous loss of jobs in this country. Creation of new jobs should be his first effort. New jobs can be created by building high-speed rail and by conversion of our motor vehicles from petroleum to the far-less-expensive natural gas. This may only be an “interim” step in stopping our reliance on foreign oil, but until there are hydrogen pumps at every gas station across the country, natural gas is the least expensive and most practical “next-step”. Other projects such as nuclear reactors and huge de-salinezation plants could help solve water and power problems forever and create hundreds of thousands of new jobs
Many of the “institutions: that were created in the great Industrial Revolution are now crumbling. The government is going to have to step in with some major money to re-tool and re-think our “Big Three” auto manufacturers. The top management of these companies has to go and be replaced by younger, forward thinking, executives. Companies that have farmed-out hundreds of thousands of jobs to less-expensive nations have to be encouraged to bring those jobs back to America until the unemployment problems here, at home, are solved.
Credit must be loosened, but with specific restraints: Home mortgages should be made available and cheap…but with a minimum requirement of a ten-percent down payment. Automobile loans should have the same type of regulation on them. The “no money down” and no-payments-for-years credit panacea has to be brought back to reality.
Tax breaks given to some of the richest companies in the world have to be stopped immediately. The oil depletion allowance for oil companies keeps almost a hundred billion dollars a year from being taxed must be ended.
I do not believe anything can stop the lobbying system in Washington, but more strict penalties have to be enforced to prevent our elected officials from accepting gifts and other gratuities from lobbying firms and repaying them with pork-barrel spending.
The wars in Iraq and Afghanistan must be brought under fiscal control and ended. Maybe Iraq and Afghanistan will have some problems as a result, but it’s their countries…let them solve the problems and not us. The USA is not the world’s policeman. We would be more helpful to the world stopping mass slaughters in Sudan and Congo than “policing” Iraq.
Wall Street speculators have to stand or fall on their own without government help. Deregulation must be ended in order to save these firms from their own greed. Retirement accounts of individuals, like IRAs and 401Ks should be insured by the FDIC (or an offshoot of the FDIC), the premiums for which must be paid by the Wall Street Firm.
The disgrace of the USA’s medical and drug system should be brought up to the level of the rest of the world where medicine and drugs are available at very low prices. Sure the government will have to subsidize this, but the money the government would save on Bush’s wars would more than cover the subsidy.
There are other problems facing Obama, and the suggestions I’ve made are only “stop-gaps”. As the USA returns to profitability, many of these somewhat socialistic programs can be ended and the USA return to a successful capitalistic system. But right now, the government has to step-in and stop these continuing abuses.
As I said…nobody asked me.
By Stephen Ellis
NOW IT’S ALL OBAMA’S PROBLEM
Nobody asked me, but…
Now that the election and the electioneering is over for another couple of years, let’s try and understand what really happened:
In my opinion, Obama did not win a “mandate” as almost every newspaper will allege. He did win a significant majority of the popular vote (approximately 5 million) compared to Bush winning a popular majority of 300,000 in 2004 and losing the popular vote by 200,000 to Al Gore in 2000. The electoral votes were no less impressive. But I do not believe that most people voted “for” Obama…I believe they voted “against” eight years of incredible mismanagement of George W. Bush and the lies and deception of Dick Cheney.
Never, in U.S. history has there been such a bad presidency as there has been with Bush. Nixon was more corrupt and Jimmy Carter was more ignorant. But together, Nixon and Carter did not equal the ineptitude of the Bush administration.
It took Bush eight years of gross mismanagement and stupidity to wreck the economy of the United States and the rest of the world. Please don’t expect Obama to restore it to its former glory in one or two years.
Obama could probably gain a lot from using people like me in his administration, but he will never ask me or the thousands of others who just want to help. Yet, the tasks facing him are no less than Herculean:
The first thing that his attention should be drawn to is the enormous loss of jobs in this country. Creation of new jobs should be his first effort. New jobs can be created by building high-speed rail and by conversion of our motor vehicles from petroleum to the far-less-expensive natural gas. This may only be an “interim” step in stopping our reliance on foreign oil, but until there are hydrogen pumps at every gas station across the country, natural gas is the least expensive and most practical “next-step”. Other projects such as nuclear reactors and huge de-salinezation plants could help solve water and power problems forever and create hundreds of thousands of new jobs
Many of the “institutions: that were created in the great Industrial Revolution are now crumbling. The government is going to have to step in with some major money to re-tool and re-think our “Big Three” auto manufacturers. The top management of these companies has to go and be replaced by younger, forward thinking, executives. Companies that have farmed-out hundreds of thousands of jobs to less-expensive nations have to be encouraged to bring those jobs back to America until the unemployment problems here, at home, are solved.
Credit must be loosened, but with specific restraints: Home mortgages should be made available and cheap…but with a minimum requirement of a ten-percent down payment. Automobile loans should have the same type of regulation on them. The “no money down” and no-payments-for-years credit panacea has to be brought back to reality.
Tax breaks given to some of the richest companies in the world have to be stopped immediately. The oil depletion allowance for oil companies keeps almost a hundred billion dollars a year from being taxed must be ended.
I do not believe anything can stop the lobbying system in Washington, but more strict penalties have to be enforced to prevent our elected officials from accepting gifts and other gratuities from lobbying firms and repaying them with pork-barrel spending.
The wars in Iraq and Afghanistan must be brought under fiscal control and ended. Maybe Iraq and Afghanistan will have some problems as a result, but it’s their countries…let them solve the problems and not us. The USA is not the world’s policeman. We would be more helpful to the world stopping mass slaughters in Sudan and Congo than “policing” Iraq.
Wall Street speculators have to stand or fall on their own without government help. Deregulation must be ended in order to save these firms from their own greed. Retirement accounts of individuals, like IRAs and 401Ks should be insured by the FDIC (or an offshoot of the FDIC), the premiums for which must be paid by the Wall Street Firm.
The disgrace of the USA’s medical and drug system should be brought up to the level of the rest of the world where medicine and drugs are available at very low prices. Sure the government will have to subsidize this, but the money the government would save on Bush’s wars would more than cover the subsidy.
There are other problems facing Obama, and the suggestions I’ve made are only “stop-gaps”. As the USA returns to profitability, many of these somewhat socialistic programs can be ended and the USA return to a successful capitalistic system. But right now, the government has to step-in and stop these continuing abuses.
As I said…nobody asked me.
Sunday, November 2, 2008
Election and then What
MORALITY AND THE LAW CLXI
By Stephen Ellis
ELECTION…THEN WHAT
To all my dear readers: My last blog will be published for AOL on October 31, 2008. If you would like to continue to read it, it is now available at
http://www.moralityandthelawakanobodyaskedme.blogspot.com/.
To those of you (like myself) who have a fascination with the paranormal, my new blog can be read at http://www.explaininglifesmysteries.blogspot.com/.
Nobody asked me, but…
The time has finally come for all the rhetoric to stop and for everyone to go into the voting booth and vote their own conscience in the manner of their choice. No one will ever know how you voted…except yourself. What you tell people may or may not be the truth…but if you were true to yourself and to your thoughts, you need not apologize to anyone.
Although the polls strongly favor Obama, we won’t really know if the polls were accurate until Tuesday night. Despite all the last minute campaigning, in my opinion, the vote will be a landslide in favor of Obama. It’s not that I favor Obama over McCain; either one will be a vast improvement over George W. Bush. The reason I predict an Obama landslide is that I feel most of the country is composed of thinking people. And, people who “think” recognize that George W. Bush was probably the worst president in American history.
Since Bush was a Republican, I believe that most people will vote as a protest against the Republican Party. I believe Republican candidates will be protest-voted “out” and there will be a Democratic landslide.
If my prediction is accurate, it will demand a change to the way things are done in Washington:
When one party has a landslide victory, the elected candidates usually assume the voting was “for” them and not a vote “against” the last eight years. The elected politicians, somehow, usually twist the results around into believing that they, personally, have been mandated by the public to represent them. They immediately start to think they can do no wrong and callously start ”repaying” their large campaign contributors with non-competitive government contracts and favoritism. Big, big mistake! If Obama allows this to happen, he will be a one-term president.
The USA today is very much like the time Franklin Roosevelt was elected president. The nation’s economy was in complete turmoil, and he was swept to victory by an anti-Hoover sentiment.
Whoever wins is going to have to change a lot of things. In every other nation in the world (except a few dictatorships) the elected officials listen to and follow the demands and needs of the voters. In America, historically, our government listens only to the lobbyists and major financial corporations. American people have come to view their government as the “enemy”. And this has to stop.
People run for political office because of the power that office gives them. People cow-tow to their elected officials and it doesn’t take much for the elected officials to assume they are “above” the rest of the population. This, too, has to stop.
A democracy only works when those elected to office use that office for the benefit of the people…not for the benefit of themselves.
There are lots of reforms needed in Washington, and I sincerely hope and pray that if there is a Democratic landslide (as I predict), that Obama will use his office to end the power-grabbing and pork-barreling so common in Washington and so offensive to taxpayers. He will be inheriting the worst economic turmoil in 75 years, and the only way he will restore this nation to its position as a world leader is to stop the “business as usual” in Washington.
I am not a socialist and in fact I am anti-socialism. But we are going to have to put some socialistic regulations into effect, even if only on a temporary basis, to stop the greed and pillaging of our Wall Street Firms, our oil companies, our insurance companies and our Congress. The success of a capitalistic society is dependent on the honesty and integrity of those people in charge of major corporations. We haven’t seen any of that honesty and integrity for a lot of years.
As I said, nobody asked me.
By Stephen Ellis
ELECTION…THEN WHAT
To all my dear readers: My last blog will be published for AOL on October 31, 2008. If you would like to continue to read it, it is now available at
http://www.moralityandthelawakanobodyaskedme.blogspot.com/.
To those of you (like myself) who have a fascination with the paranormal, my new blog can be read at http://www.explaininglifesmysteries.blogspot.com/.
Nobody asked me, but…
The time has finally come for all the rhetoric to stop and for everyone to go into the voting booth and vote their own conscience in the manner of their choice. No one will ever know how you voted…except yourself. What you tell people may or may not be the truth…but if you were true to yourself and to your thoughts, you need not apologize to anyone.
Although the polls strongly favor Obama, we won’t really know if the polls were accurate until Tuesday night. Despite all the last minute campaigning, in my opinion, the vote will be a landslide in favor of Obama. It’s not that I favor Obama over McCain; either one will be a vast improvement over George W. Bush. The reason I predict an Obama landslide is that I feel most of the country is composed of thinking people. And, people who “think” recognize that George W. Bush was probably the worst president in American history.
Since Bush was a Republican, I believe that most people will vote as a protest against the Republican Party. I believe Republican candidates will be protest-voted “out” and there will be a Democratic landslide.
If my prediction is accurate, it will demand a change to the way things are done in Washington:
When one party has a landslide victory, the elected candidates usually assume the voting was “for” them and not a vote “against” the last eight years. The elected politicians, somehow, usually twist the results around into believing that they, personally, have been mandated by the public to represent them. They immediately start to think they can do no wrong and callously start ”repaying” their large campaign contributors with non-competitive government contracts and favoritism. Big, big mistake! If Obama allows this to happen, he will be a one-term president.
The USA today is very much like the time Franklin Roosevelt was elected president. The nation’s economy was in complete turmoil, and he was swept to victory by an anti-Hoover sentiment.
Whoever wins is going to have to change a lot of things. In every other nation in the world (except a few dictatorships) the elected officials listen to and follow the demands and needs of the voters. In America, historically, our government listens only to the lobbyists and major financial corporations. American people have come to view their government as the “enemy”. And this has to stop.
People run for political office because of the power that office gives them. People cow-tow to their elected officials and it doesn’t take much for the elected officials to assume they are “above” the rest of the population. This, too, has to stop.
A democracy only works when those elected to office use that office for the benefit of the people…not for the benefit of themselves.
There are lots of reforms needed in Washington, and I sincerely hope and pray that if there is a Democratic landslide (as I predict), that Obama will use his office to end the power-grabbing and pork-barreling so common in Washington and so offensive to taxpayers. He will be inheriting the worst economic turmoil in 75 years, and the only way he will restore this nation to its position as a world leader is to stop the “business as usual” in Washington.
I am not a socialist and in fact I am anti-socialism. But we are going to have to put some socialistic regulations into effect, even if only on a temporary basis, to stop the greed and pillaging of our Wall Street Firms, our oil companies, our insurance companies and our Congress. The success of a capitalistic society is dependent on the honesty and integrity of those people in charge of major corporations. We haven’t seen any of that honesty and integrity for a lot of years.
As I said, nobody asked me.
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