Thankfully, President Obama is on the side of fairness and equity in condemning the practice fueled, as it is, by tax payers’ money.
The more worrisome issue is the ongoing lack of responsibility that people everywhere exhibit who have been the catalysts for this crisis. It just seems like business (greed) as usual. Line up at the trough and push for more. These folks make pigs look good.
It is essential that we call the entitlement mentality so prevalent among so many exactly what it is; access to the highest quality lifestyle for the fewest obligations. Preferably none!
Whatever happened to citizenship?
No country can long endure when all the people all of the time expect a free ride. There is no express to the promised land. No where. No how. (Assuming you do it legally.)
The privileges we enjoy are not free. The rights we so easily take for granted should cost something for the very reason that they are so precious. And they do. That’s the whole range of what good citizenship means.
Just once I would love to hear someone stand up and say, “I have been a greedy, selfish sonofabitch and want to make things right by giving back my ill-gotten gains. The needs of the country come first.”
But then again, I still believe in the tooth fairy.
Copyright 2009 William M. MacKay
[ add comment ] ( 4 views ) | permalink |
( 3.1 / 154 )Got a credit card? Are like the average U.S. user?
You owe $5729.00.
That’s only nominally higher than 12 months ago. Not so bad given the hard times.
But it’s still too high given the creep in interest rates issuers are demanding.
Keeping up your payments on credit cards is vitally important to your lifestyle. Try booking a hotel or buying any kind of ticket without one and you learn quickly that cash is not yet king. (And may never be the way the world’s central banks are printing money these days.)
By all means protect your credit rating by paying down debt although doing so at the expense of your mortgage payment or other loans must only be a short term strategy.
Your credit history is important. But don’t keep looking up your score as often as those the pop ups and banner ads keep appearing on your computer screen.
Too many searches make your credit suspect.
Copyright 2009 William M. MacKay
[ add comment ] ( 4 views ) | permalink |
( 3 / 158 )The U.S. savings rate just hit 5%.
But how long will this last? Is this a sea change in consumerism or simply a classic response to fear?
We have a long way to go to match the Chinese (+35%) and the Japanese (+20%) but should we even come close to their saving rates then we have entered the genre of science fiction.
And like the scary scenarios many of those stories reveal we will be in for some unbelievable outcomes if savings should come anywhere close to those Asian rates. Recession would evolve quickly into something bigger and longer.
But I hardly think it likely that we will step into this paranormal range after decades of debt and leverage to enjoy the lifestyle we want when we want it. No deferred or postponing of gratification seems to fit with our experience.
When I wrote SAVING Is for Suckers; Unless You’re Spending on Purpose I didn’t imagine my worse fears of a global meltdown would actually come true. Now it is a fact of life and we are all responding to the new reality. But the title, I think, still holds true.
In fact, less spending is now responsible for maintaining and improving whatever the lifestyle you manage to enjoy today. It had better be producing a great return in satisfaction and moving you toward your goals and aspirations, albeit more slowly.
If not then saving in the face of foolish spending is still an inadequate strategy for sustaining all that you value.
The new leverage of the day is found in spending on the purposes you truly value most.
Copyright 2009 William M. MacKay
[ add comment ] ( 3 views ) | permalink |
( 3 / 147 )Oh, hear my prayer and along comes American Express. Now they want you at the back of the line, not the front. The rewards of non-membership are ever shifting.
If you are one of the lucky retail credit-card holders AMEX wants to dump, you get a cool $300 (as in prepaid gift card). But there is a catch. No free lunch even for a favor.
Here’s the deal. Agree to pay off your credit card balance and close your account by Feb. 28.
It’s just that little problem of coming up with all that cash you owe. For some that nut is in the $9000 range. But AMEX gives you until April 30th to pull it off, the financial equivalent of the loaves and fishes miracle.
Whether you can or cannot meet this challenge your account is still closed. No questions answered.
You can be sure this move is in your best interests. It’s doubly comforting to know that American Express has also ducked under the biggest TARP ever conceived (The ‘Toxic’ Asset Relief Program) to the tune of $3.4 billion.
I wonder what they do with all that money.
P.S. Did I fail to mention that you lose all your Membership Reward Points on this deal? Yikes! Only 4 days left to spend them. Hurry.
P.P.S. Miss the April 30th deadline and you don’t get the giftcard.
R.I.P. And your account still stays closed. Now, I dare you to check your credit score.
[ add comment ] ( 2 views ) | permalink |
( 2.9 / 149 )And you thought it was the other way around? Not anymore it seems.
But can you guess who said it? You’ll be surprised.
He is a seasoned and knowledgeable veteran, aware of both systems, but watching from the sidelines now as the global financial meltdown and the subsequent bail-outs of world famous banks and corporations continue.
Give up?
It’s none other than Mikhail Gorbachev, the Soviet leader who opened up his country to elements of capitalism. Obama and other western leaders should take note.
CAPTAINS OF THE UNIVERSE
Would you agree … the most vocal proponents of capitalism are rich and powerful?
You can find them in almost every industry and country. I suspect they are heavily concentrated in the financial service industry where the money to be made defies reason. (You decide if the gains of the super-rich on the backs of the workers [e.g. free trade driven job losses] also defy another value we cherish.)
And it is an industry. It produces goods and services and distributes them globally although certainly unevenly among the general population.
Innovation (the legerdemain of financial engineering), free markets (deregulated), easy credit (driven by low interest rates), and business credibility (as vouch-safed by paid rating agencies) are all designed to make high profits for the shareholders and multi-million dollar salaries* for the corporation’s executive management. (*estimated at 370 times the pay of the average American worker)
Executives triple-dip with annual bonuses tied to attendance and other exacting performance measures; they also stand to reap windfall profits through stock options honored by a grateful nation and legions of lawyers. Such activities and largesse are under the watchful eye of well-compensated Boards of Directors who treat good governance as gospel.
SO WHAT'S THE PROBLEM?
The public want their bank deposits protected from loss. Government obliges through taxes collected from all workers to create deposit insurance. Is this not the worker subsidizing the risk taking ventures of the banking corporation who singularly stands to profit?
In the worst case scenario (today!), bail-outs to cover toxic ‘assets’ (lol) and prevent a ‘run-on-the-bank’ are financed through printing money, a gift from future generations of taxpayers. What is so repugnant here is the ultimate lose-lose scenario; when the risk-taking private enterprise loses, you lose, too.
Other financial service organizations employ private capital from the general public to make risk-based investments. The greater the profit potential (for distribution to the shareholders and employees), the greater the risk.
As events have proved, should any financial player lose big on a bad bet (sub-prime mortgages, collaterized-debt obligations, junk bonds, etc.) then government will choose the survivors arbitrarily, in effect, by securing their as yet unknown total liabilities with public funds to keep the entity solvent.
BEHIND CURTAIN #3
Does anyone seriously think this will ever prove to be enough cash and stimulus given the enormity of the bad bets still floating in Neverland? It seems we have reached the “Too big to bail-out” decision.
This option lets the banks fail and saves the depositors. That may put a cap on the loss. The complex mechanisms for this I know not. But this exercise and the bail-outs are what occupy legislators today and will do so for months to come. So far, 35 U.S. banks have been closed and another 200 are on the edge.
When losses are socialized, the taxpayer pays. In other words, we socialize risk. Is this fair when we capitalize profits with the gains going exclusively to the corporation, its executives, and shareholders?
ANOTHER ALTERNATIVE
What arguments can you offer to make banks like utilities, simply service-providers like the water and electric company? Are they not an essential service, the life-blood of our system?
If we could regulate them as tightly as the nuclear power industry, we may prevent a repeat of the current crisis and the global loss of trillions of dollars in asset value, a loss of such magnitude that no one has yet been able to quantify. ($30 trillion? Or is it $300 trillion and counting?)
The problem gets personal. Then again, you know this.
Copyright 2009 William M. MacKay
[ 3 comments ] ( 10 views ) | permalink |
( 2.9 / 159 )
Calendar
