Congress Finally Grew a Pair

It would seem that our Congress has finally experienced some testicular dropage when Congress voted on the bailout, aka the "Emergency Economic Stabilization Act of 2008". When it came before a vote in Congress, it was voted down, 228 to 209. It seems as the politicians are now forced to listen to the people, because they are afraid of losing their jobs and quite possibly their heads if they vote for the bailout.

As many you know, the bailout was to buy up toxic debt from floundering financial institutions on Wall Street. This would get it off of their books, and allow them to potentially become profitable in a short amount of time. Of course, it would just cause the Government, and consequentially, the taxpayer to be even further in debt. There was a clause in the bill that stated that the financial institutions would be held responsible for the debt of the toxic loans and unstable securities that we buy up if they never reach a mature enough state for the Government to either profit, break even, or close to even. Have no doubt in your mind that these financial giants will do anything in their power from ever having to pay for a loan or security that they've sold to us. If they go bankrupt, you bet your bippy we won't see much more than a few pennies from that debt we bought.

If this bill ever gets through, it would essentially turn Uncle Sam into one of the largest landlords in the country. Here's another thing to think about; if these Wall Street firms cannot manage debt this volatile and toxic, do you really think that the Federal Government is going to do any better at it? If our current debt, corruption, and run away spending is any indication on how well we govern our financies, I guarantee you the plan is destined to fail. When the people overseeing this mess are one of the ones that got us into this mess (thanks a lot Congressmen Chris Dodd, Frank Barney, and Richard Shelby), you can guarantee that we'll see nothing but the best show of incompetence in government history.

Some of you may be saying, "Why are you being so cyncial? This could work!". Look, I am not cynical without reason. This has about as much of a chance of working as I do of getting a hole in one on a Par 5. I don't play golf either, so you do the statistical probablilty calculations.

Many in Congress are seeing the result of the vote on this bill as a massive failure, because their fat cats on Wall Street are running around screaming "The sky is falling!" The sky is falling because your tried to prop it up too high. You put too much weight on it. The sky isn't really falling, though. It's normalizing. The only way the Government is ever going to regain it's money spent on you is if there is another housing bubble and they can sell off those homes at the outrageous prices you valued them at. If another bubble happens, we are right back to square one, becuase there is one fundamental guarantee about bubbles. They will pop, and the bigger they are when they pop, the louder and more painful it's going to be.

While Congress sees this as a massive failure, I see it as an epic win, particularly for the American People. Like I said before, this is gonna hurt. It's gonna hurt bad, and some people are going to be severely burned. Most of them will be the greedy aristocrats on Wall Street who will have to sell off 5 of their 10 vacation homes. Some normal people like you and me may not get any moratorium on your foreclosures and have to move back into rental properties. Some rental properties may go under, too, forcing people to find other homes. Remember, where someone fails, another person will end up profiting. It's usually the person that planned smarter and acted more responsibly who will stand to gain. The brats on Wall Street had plenty of time to play with our money like it was a toy, and they are pissed that their toys are all gone. For the rest of us who spent our money like it was important to us, we will be alright after the storm calms. We'll take some bumps, lose some of our retirement money, but we won't prolong the inevitable or allow ourselves to be drawn into a decade long Depression.

To you Congressmen and women who voted no on this bill, hurrah for you! Nay, nay, you said! Thank you for listening to us this time. Thanks for showing that you can stand up to the big whigs in your party, and that your not the typical rank and file pansy like most of your other colleagues. Thank you for showing some respect for the principles of our country and the taxpayers. Your show of defiance to the sell outs in Congress will not go unnoticed or without reward.

Bailout for Wall Street? Hell No! Here's Why.

We've been told a lot in the last week about the financial catastrophe.  If we don't do something now, the sky will fall.  The world will end.  We will all be poor and homeless. Aliens will descend onto Planet Earth and demand cavity searches to find our brains. They might actually find some brains, depending on which cavity they search on certain politicians.

The fact is this; there is no way to bail out Wall Street without it coming back to royally screw the taxpayer.  Period.  This is going to hurt either way we do it.  The question is which is the wisest way to do it?  Now I'll be the first to admit, I'm no expert when it comes to the economy, so John McCain and I share something in common.  I know, I'm pretty surprised about that myself.  But I know the following facts:

• The Federal Government is over $9 Trillion Dollars in debt, mostly to foreign countries.
• Last year we paid $406 Billion in interest, not Principal, on that debt.
• The Federal Government brought in $2.56 Trillion in total revenues.
• They spent $2.73 Trillion in Government spending.
• The Government is broke, and has negative cash flow.
• We don't have $700 Billion to give to Wall Street, or even to loan to it.
• The Government is insolvent.

Now, knowing these facts, your probably asking yourself the same thing I asked myself. What the hell are we doing?  Well, the Federal Government is gearing up to do exactly the same thing that got us into this mess in the first place, and that is to prop up an insanely overvalued market, privatize the gains and socialize the losses.

The housing market largely failed for two major reasons.  The Federal Government allowed big lenders like the Federally chartered Fannie Mae and Freddie Mac to relax requirements to get mortgages so that more people could buy houses.  The private lenders followed in suit to compete.  This allowed people who should've never been making huge financial commitments to get into homes they couldn't afford.  That was the first mistake.  The second mistake is that the valuation of homes and what they were worth had reached the highest mark of insanity.  Some homes had, on paper, increased in value 100% over the last 4 years.  Where those homes really worth that much?  No.  They weren't. It created two more problems, and those were that since counties were reappraising homes at such huge values that it drove up property taxes on those homes.  That strained the homeowner who already couldn't really afford their mortgage in the first place.  That caused tax foreclosures and the banks took the hit for it.  Secondly, it caused people who just had to have a home to get one for such a huge amount of money that they couldn't afford it.  So the big lenders came up with fancy loans, like adjustable rate mortgages, interest only loans, non-amortization loans (where the principal never goes down, only up), and so on.  

These problems built a house of cards that was doomed to fall.  Now what the Federal Government is doing, along with the Federal Reserve (which is actually private bank with a Federal charter) and Treasury, is to buy up this toxic mortgage debt and homes in hopes of one day being able to turn around and sell it at a profit.  That will never happen unless the housing market returns to the insane prices we saw prior to the bubble busting, and we all now know what happens when that occurs.  Do you see the vicious cycle yet?  I do, and it scares the living bejesus out of me.  It's beyond stupid. This is clinical insanity at it's best.

To bailout these Wall Street firms, we will have to borrow that $700 Billion from other countries, and raise our national debt ceiling to make room for it.  But the kicker is that it will cost far more than $700 Billion.  When you figure in the interest we'll end up paying on it along with our already unbelievable amount of debt, the costs of brokering such loans for our Government (which will cost billions of dollars and be done by the same brokers that got us into this mess), and the devaluation of our dollar as a result of inflation caused by this debt overshadowing our currency, the total amount of money that will end up being spent on this bailout is astronomical. The reason the politicians aren't talking about these facts is because they know it will gain no support from the taxpayers, and they feel helpless to do anything else. They also want to not piss off their super rich campaign contributors who have far more to lose than you and I if they decide to not bail out Wall Street.  In addition, they don't want to talk about the hyperinflation of the dollar that this could cause, which would essentially steal money from everybody since it will reduce our dollar's value, especially in the global market.  The fact is that once our dollar crumbles, so does the foundation of our society.  It wasn't war that brought Rome to it's knees.  It was the fact that it's currency became essentially worthless.  The paper it's printed on ends up being worth more than the number printed on it.  

If you need a good example of hyperinflation, the most well-known was the great German hyperinflation of the 1920s, when the monthly inflation rate peaked at approximately 30,000% in October 1923.  Back then, if it normally cost 1 mark to buy a loaf of bread, you'd have to pay $30,000 marks at it's hyperinflated rate.  If you think this couldn't happen to America, think again.  Our dollar is currently only worth 5 cents to the Dollar of 1913.  Now you really know why old people can be extremely grumpy.  Think of every dollar you have as being a share in a company, and it's worth a certain amount.  Your stock is essentially your savings and your retirement funds. Now imagine what happens when this company crashes, and wipes out the value of your shares.  You've lost your savings, and there is nothing anyone can do about it. Welcome to the wonderful world of fractional reserve banking and fiat currency! Yay! Isn't this so much fun?  It is if your a sadist.  This is the threat of inflation, government overspending, debt, and printing money out of thin air.

Overall, there is not going to be any easy way to get out of this, but propping up a housing market that was way overvalued will just prolonging what could be a 1-2 year recession and turning it into a decade long depression.  If we were to take a sanity pill and accept that our valuations of homes were a false reality and let the market adjust and recover on it's own, this problem will work itself out in a year or two, and not put the cost in the laps of taxpayers for generations to come.  It's going to be painful. Make no bones about it.  There will probably be a few more major bank failures and people will invariably lose their homes and the equity they invested in them.  It's tough luck, but this is what happens when you gamble and make bad decisions.  It will claim many innocent victims that weren't educated about what sort of loan they were getting when they signed the dotted line.  This is where homeowners and the lenders need to take personal responsibility, and accept the lumps they will be dealt in consequence.

To summarize, we can either accept reality, or continue to prop up a market that was a pipe dream.  We can weather out this financial hangover sober, or we can decide to keep cracking open cold ones and stay drunk as a means of not facing the inevitable.

A Message To All Clinton Supporters

Allow me to start off by saying that I'm not part of the Obama campaign, and I'm not getting paid for saying this.  This, all in all, is not a pro-Obama plug.  

With the primaries being over, there is an obvious nuclear fall out from the Hillary Clinton's campaign loss.  A substantial amount of you hardcore Clinton supporters feel that you've been treated unfairly, and even robbed of Hillary's nomination.  All these things may be true.  I am not going to argue any of that here today.

I've read many message board comments from Hillary supporters, and the amount of you who say they are going to vote for McCain in November is just astonishing.  It's not as much as the fact it would be a crossover vote astonishing, but unbelievable because you are in essence saying that if Hillary is not the nominee, you're are going to vote for the man who opposes nearly each and every one of Hillary's objectives and proposals.  Every issue that McCain stands on is nearly polar opposite to Clinton's.  On womens issues, McCain has consistently voted against them.  McCain even voted no to create a Federal holiday in honor of Martin Luther King Jr., and now panders to African-Americans by telling them he was wrong for doing that.

Right now, the Republican party is about to hang up, once again, a large "Mission Accomplished" sign.  Do you know why?  It's because via the media, planted people acting as vocal supporters on both sides, and by pure deception that they have caused a huge rift in the Democratic party.  Pundits like Rush Limbaugh have encouraged his viewers to cross over and vote for whom he believed was the weakest Democratic candidate with his "Operation Chaos".  First he said "Vote for Hillary!  We'll spank her in November".  Then he did an about face and tried using reverse psychology and told his Republican minions to vote for Obama, just to cause more infighting between the two campaigns.  He wanted this primary to go on for as long as possible because he knew it would break the resolve of the Democratic electorate. In Pennsylvania, exit polls showed that nearly 20% of people interviewed who voted for Hillary stated they had no intention of voting for her in November.  

Whether his opinions were valid or not, I think it's irrelevant.  A lot of you fell for the bait, though.  You bought into it, and you believed it.  Both sides spewed vitriolic statements at each other. Karl Rove, Rush Limbaugh, and McCain are giggling like schoolgirls.   Now McCain is trying to pander to your frustration and get you to support him.  Do you know what McCain's campaign thinks of Hillary? Well one supporter in his campaign staff was caught on video asking McCain "How do we beat the bitch?", to which McCain turned away and laughed.  He didn't stand up and say "That's not how you talk about a fellow senator".  This is certainly questionable for someone who claims to respect and honor Hillary Clinton.

If you also look McCain's voting record, you can see his votes largely fall in line with the rest of the Republican party.  There aren't as many crossover and bipartisan bills as he would like you to believe.  He also supports Bush's tax cuts for the most wealthy Americans, while not doing much at all to ease the tax burden on the working middle-class who desperately need it.  He's done next to nothing to secure the Mexican-US border in Arizona, either.  He's admitted to making statements and stands on issues for "all the wrong reasons" and faults his "ambition" rather than just doing the right thing.  He can never remember where he stands on many issues because his opinions are given to him by special interest groups and lobbyists.  He lied about voting for ever legislative investigation on Katrina.  He's actually voted against them, on several occasions.  He states that it was because of "pork-barrel earmarks", but when I read the amendment he voted no against, there where no earmarks there.  Not even in the fine print.

My point is this: if your going to vote for McCain, do it because you believe how he stands on the issues. Understand that he has far more in common with Bush than he ever does with Hillary.  Understand he has no intention to end the needless war in Iraq. Keep in mind that McCain has stated that there will be "many more wars" to come.  Be aware that he supports almost every Bush policy currently in place.  Accept the fact that you will not get any sort of Universal Healthcare.  Quite to the contrary, actually. Your healthcare benefits might get cheaper, but your coverage will be much less. Claim denials will be extraordinarily high. Accept that you will get nearly nothing that Hillary has promised you, and that you will be setting up this nation for an extension of the Bush administration.  Be comfortable with the fact the voices of the common people will not be heard, and that lobbyists and special interests will continue to rule over Washington policies.  Know that McCain's closest advisors include Phil Gramm, who is one of the people notably responsible for causing the mortgage crisis and luring people into bad loans that they cannot pay and are now losing their homes over.  Know that another McCain advisor, Michael Goldfarb, believes that the founders of our country "sought an energetic executive with near dictatorial power in pursuing foreign policy and war."  This man will likely be appointed to some sort of office if McCain is elected.  So will Phil Gramm.

With all of these things in mind, ask yourself this: Do I really believe in McCain and want him to run my country for the next 4 years?   If the answer is no, and there is no one else you believe in, just don't vote. If you vote, write in a name of someone you do believe in.  If you really do not believe in McCain, vote in opposition of him for his opponent.  If you want even a fraction of what Hillary Clinton wanted for you, vote for Obama.  Nobody else who has a chance of winning can give you that.  Nobody.  The choice is yours. 

Make it wisely.