Tag Archives: Great Depression

Buying Washington with our money

$3.8 billion. That’s how much the people you elected to Congress and the Senate took from finance, insurance and real estate lobbyists in the past 10 years. That’s right, billion.

What did they buy? Protection from regulation that would protect consumers and investors. Protection from laws that would stop the outrageous risks, self-dealing, market making, collusion and investor deception. Protection from paying ordinary taxes on their extraordinary incomes. And protection from failure to the tune of more taxpayer money than, according to The Intelligence Daily,

“… the cost of all US wars (including such events as the American Revolution, the War of 1812, the Civil War, the Spanish American War, World War I, World War II, Korea, Vietnam, Iraq and Afghanistan, the invasion of Panama, the Kosovo War and numerous other small conflicts), the Louisiana Purchase, the New Deal, the Marshall Plan and the NASA Space Program combined.”

With Congress safely in their vest pockets, the financial sector has thrived and is expected this week to announce record bonus payments – “… expected to be 30 to 40 percent higher than 2008’s.” Wall Street and the mega-banks profits have so bloated during this period that, according to Robert Creamer,

“of every 12.5 dollars earned in the United States, one goes to the financial sector, much of which, let us recall, produces nothing.”

What wait, you must be thinking, what about the regulation and reforms we were promised to keep from having to save all the firms too big to fail from failing again? Surely voters won’t stand for more of the same. The tough votes will have to be made, right? We’re going to re-regulate these companies, get transparency, watch them and enforce our laws, right?

Hate to get your hopes up. On December 11, 2009, the House passed H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009 – according to the DNC, the bill is the  “most sweeping financial regulation since the Great Depression.” DNC Communications Director Brad Woodhouse, said,

“One year after nearly the worst financial collapse in our nation’s history — a collapse brought on by the excessive greed and risk taking of Wall Street and by the anything goes regulatory environment put in place by Republicans — not one Republican in the House thinks that consumers deserve additional protections or that the practices of Wall Street should be curbed.”

The Dems writing the bill, apparently, don’t think so either. The fix was in. To get the 1,300 page bill to a vote, they caved on the enforcement provisions so that the bill falls somewhere between a tediously long suggestion and a PR stunt. Sound tough to voters, but make sure the market sees the secret wink and the nod. Sure, the bill would shuffle the regulators, asks the Treasury to report stuff to Congress, requires a lot more forms to be filled out, and adds some councils and boards. It prohibits a few new things, but also repeals some regulation on the books that could make things worse. Dennis Kucinich (D-OH) voted against the bill, believing the legislation does not go far enough. On his website, Kucinich noted the loopholes in the bill “that sophisticated financial industry insiders will exploit with ease.”

But hey, the Senate just got a hold of it. Don’t expect it to be better, shorter, or even get to a vote until spring, if then.


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Even crime is down

crime_scene_mgmt1_2405-1Competing for attention with the hot videos, box office and iPhone app downloads, the latest crime stats are out. The FBI has just released the preliminary report of the latest numbers of crimes — break-ins, robberies, rape, murders, arsons, that sort of thing. If you have sophisticated data crunching skills and way too much time on your hands, here’s the full report (note: They offer breakdowns for crime where you live, just keep clicking the links).

Finally, something that is going down is good news: for the second year in row, crime has declined. According to the report, “Nationwide, violent crime fell 3.5 percent and property crime 2.5 percent during the first six months of the year…”

So, why? Some rational thinkers among us expected the stats to rise based on the economy (the greatest depression since the great depression except we have Prozac and a $9 trillion bailout).

Is it possible that the economy is so bad people can’t afford to drink as much and do really stupid things? Yes. Is it possible the findings are based on what is reported and with nationwide cutbacks there are fewer statisticians in the police ranks reporting? Sure. Is it possible everyone has an iPod and they are no longer worth stealing? Yes. Is it possible preliminary numbers are spun by political functionaries, like we do with employment numbers and they will be adjusted after the news cycle? Seems so. Is it possible things are so bad there are fewer things to steal? Nah. Is it possible there is just no good market for stolen goods? Yes. Is it possible all the people seeking free room, board and medical care are already in prison? Not likely. Is it possible we had fewer police on the streets who arrested a few percent less people? Could be on to something. Could it be we were so involved in hope, Palin’s wardrobe and the Bush-Cheney train finally leaving, that we forgot to rob, rape, murder and pillage? Maybe.

Oh, I know. Teacher, teacher, teacher, call on me. Wall Street ate all the money.

Please comment and weigh in.

Boardwalk is Too Important to Fail

1monopoly

The Bush-Obama economic recovery plan is largely based on the philosophy post-great-depression, economist Charles Darrow and a couple of brothers named Parker. I kid you not, just read some of the actual rules of the game:

  • The object of the game is to become the wealthiest player through buying, renting and selling of property (note that you are not able to become wealthy by actually working).
  • Each player is given $1500 (we’ll be getting less than that through tax rebates) and all remaining money and other equipment go to the Bank.
  • Select as Banker a player who will also make a good Auctioneer.
  • Besides the Bank’s money, the Bank holds the Title Deeds, and the houses and hotels prior to purchase by the players. The Bank pays salaries and bonuses. It sells and auctions properties and hands out the proper Title Deed cards when purchased by a player, it also sells houses and hotels to the players and loans money when required on mortgages.
  • The Bank collects all taxes, fines, loans and interest, and the price of all properties which it sells and auctions. The Bank “never goes broke.” If the Bank runs out of money, the Banker may issue as much as needed by writing on any ordinary paper.
  • If you land on Income Tax you have two options: You may estimate your tax at $200 and pay the Bank, or you may pay 10% of your total worth to the Bank. Your total worth is all your cash on hand, printed prices of mortgaged and unmortgaged properties and cost price of all buildings you own. You must decide which option you will take before you add up your total worth.
  • Even though you are in Jail, you may buy and sell property, buy and sell houses and hotels and collect rents.
  • Unimproved properties can be mortgaged through the Bank at any time. Before an improved property can be mortgaged, all the buildings on all the properties of its colour-group must be sold back to the Bank at half price. The mortgage value is printed on each Title Deed card.
  • You are declared bankrupt if you owe more than you can pay either to another player or to the Bank. If your debt is to another player, you must turn over to that player all that you have of value and retire from the game. In making this settlement, if you own houses or hotels, you must return these to the Bank in exchange for money to the extent of one-half the amount paid for them.
  • Should you owe the Bank, instead of another player, more than you can pay (because of taxes or penalties) even by selling off buildings and mortgaging property, you must turn over all assets to the Bank. In this case, the Bank immediately sells by auction all property so taken, except buildings. A bankrupt player must immediately retire from the game. The last player left in the game wins.

Most of us have played the game. Most of us have lost. While the makers represent that it requires the skills of negotiation and resource management to win, it is basically a game of chance. In the real version of the game, the money isn’t distributed evenly at the beginning and some players start with hotels of a matching color group.

So here we are winding down toward the end of the game. Some suggest the game should just play out. Others suggest that each of the players just get more money so all can continue playing. Those with heavily mortgaged properties want mortgage relief so they can start collecting rents again. All those going to jail, of course, want to get out free. There are even voices who dare to suggest that the rules need changing and there be regulation. So here’s what the Treasury plans to do: just keep giving the bank(s) more money. An odd choice. The banks will have the money, but no one will be playing.

Two Views of the Great Depression

Over the hills.GG

Yesterday, I drove 150 miles over the hills and through the woods to my grandmother’s house. “GG.” She’s 103. Lives independent, because all the men she knows are “just too old” and she’s “not planning on any more children.” There’s always a sparkle in her eyes when she looks at you. While her short term memory betrays her more often than the last year or so, her wit never does. Always listening and wanting to make you feel special. To laugh. To smile back into hers eyes. To say as she does that, “she’s lucky,” is an exaggerated understatement. Every day of her life she has been able to say, “I feel great.” She never worried for money and the only job she ever had was “making up my brother’s bed for a nickel a week.” Survived two exceptional husbands – one who laughed to 78, and the second who was gracefully internet active and drove himself to the hospital where he died at 99. Adored by two children, now in their eighties, seven grandchildren, sixteen great-grandchilren and ten great-great-grandchilren. And is almost mythical to spouses, extended family and friends. She renewed her driver’s license last year and State Farm reduced her insurance rate for being a safe driver – though she no longer drives on the interstates because she’s “too polite to merge.” She doesn’t wear glasses and devours paperbacks by the box – the bawdy ones, too. Plays bridge. Pays her bills. Manages her investments. Remembers and writes birthday cards – though friends are now all second and third generation. Clearly, we are lucky, too.

A year ago, I would have also visited my “younger” grandmother who we knew as “Papa’s Mama.” At 98, she finally got her wish of the last few years and died. She had occupied a Medicaid bed in a nursing home for seven years – too healthy to die, too infirmed to live the purposeful life which was all she had heretofore known. I never knew her when she was healthy, and seldom when she was happy. Papa's MamaShe was walking to the drug store diner on her lunch hour one random day in the early 60’s, when the brakes of a parked car gave way and pinned her between another car. Her legs were crushed and, in that moment, so was her joy. Six months in the hospital. Numerous surgeries. With torturous rehab, she regained her ability to walk, but she never fully recovered from the pain. Late in her life, Papa’s Mama finally revealed her long dormant sweet side to those of us who had only known the other. It was after she’d buried her second husband of 50 years, her only son – he called her “Pal,” her humble devoted brother, and her favorite and always misunderstood, or at least she felt was misunderstood, grandchild – all within just a few years of each other – that she seemed to give up feeling sorry for herself and lovingly reached out to those of us who had always hoped it was there for us, too, but had never known it. Papa’s Mama’s life had been hard.

GG was 24 in October of 1929, married and pregnant with my mother. Her father was in real estate, owned some rental homes and the building that housed the local department store – the stock market crash hurt them, but years later their worthless stock certificates turned back into modest wealth. GG’s husband was an engineer and kept his job, while his parents owned a grocery store that prospered even during those terrible times, and in a few years, was acquired by a chain for stock that merged with a national chain for more stock. Their view of the great depression was mostly from the inside of a chauffeured car and of the gratitude of those less fortunate that they both helped and profited on.

Papa’s Mama was 19, married and the mother of my six-month old father in October of 1929. Her family was country poor. Her father was a farmer. Her mother, the meanest, nastiest-spirited woman I have ever known, took them in and reminded my grandfather every day that he was a miserable failure. Family folklore has it that during one of her nightly beratings at dinner, she placed a bottle of rat poison in front of him and dared him to drink it. He did. Papa’s Mama was a homeless widow at 22. The only societal safety net then was family, church and a soup kitchen. At a time when few women worked, she got a job working in the office of a hotel. She didn’t have a car and couldn’t afford the street car. Six days every week for the next 10 years, whether it was 90 degrees and sunny, or 33 degrees and raining, she walked the five miles from her rented room to her work and she kept working most all of her life.

What does that say about our great depression?

Those that have some wealth, some property or stocks, a dependable job, they’ll do okay. The percentage won’t change much for them – they’ll still have more than most, even with less. Wait it out. Hold onto to those investments, they’ll come back.

Those without wealth will have it very hard. Lives will be lost. Families will be broken. There will be hunger. They’ll have to do without. There won’t be much joy. Some, with luck and hard work, will make it. It may take a decade, but the next generation can have it better. Others, won’t be so lucky.