The bankers are deservedly copping a hard time for their greed and economic mismanagement, but let's not leave out/forget there are others deserving of our disdain and anger. This was over at the Consumerist site:
"Here's a sad little saga. After convincing our government that it was responsible enough and commercially viable enough to deserve a multi-billion-dollar bailout, Chrysler spent some of the money taking out full page ads in The Wall Street Journal and USAToday, thanking America for its money. They also posted these ads proudly on their blog. The reaction from actual Americans was, um, harsh."
For more, and the backlash comments see here
Stupidity seems to be in an abundance thoughout the business world these days (and government, so it seems)... but to advertise it in a national publication is beyond stupid. Talk about going from the sublime to the ridiculous! Hopefully, Barack Obama will put a stop to these business bailouts - if a company isn't good enough to trade its own way out of trouble it will continue to fail regardless - and start jailing some of these high flyers for corporate fraud/public embezzlement and etc.
I particularly agree with this part from one of the backlash comments: "even if your company fails, you will have your golden parachute stitched with money taken from the pockets of people who are losing their homes, their jobs, and their ability to provide for their family....". As always, the average bloke gets flushed down the toilet while the rich keep get richer off dirty dealing/underhanded tactics.
OK, let's put it another way. What about the family on combined income of $70,000 pa and they take out an affordable $200k mortgage on modest home over 30 years because rents keep going up and it's dead money anyhow, and for the first two years this family is doing well, with repayments as well as a few home improvements, etc. Yup, everything is going well, but suddenly the wife's capitalist employer lays her off to maximise profit through reduced production/labour costs, leaving just the husband working on 35,000 pa. It's a struggle but they're still managing their repayments and keeping their heads above water... then the husband is told he has to take a pay cut if he wants to keep his job, and this happens just about the same time as interest rates start to rise sharply. Uh, oh, look out, they have fallen behind in their mortgage repayments and now the bank is foreclosing... they're going to be homeless with two young children.
Yes, that was a hypothetical situation, but there were thousands upon thousands of situations just like it happening all over the US... and other countries, too. The point is, not everyone was gullible and/or got conned into a larger mortgage than they could afford. Many good intentioned people with decent incomes fell victim to the greed ridden capitalists who kept hiking up interest rates and prices on living essentials... and as their spending power diminished greatly over a relatively short period of time, so did their propensity to make their repayments.
As for the 'gullible' who borrowed bigger than they could manage. OK, so a young couple with a family walk into what they understand is a reputable bank to borrow $100k to add to their $90k to buy a home. Sounds reasonable, doesn't it? However, unbeknown to them, the 3 piece suited loans manager is as great a thief, liar and cheat as a balaclava wearing burglar who steals from poor peoples homes. Still, they do not know this and trust him to do the right thing by them... after all, it is a reputable bank - and who can you trust if you can't trust a bank - and it has always looked after their $90k savings, so why not trust the bank....
The loans manager introduces himself and rolls off a list of BA's in economics, math and social planning, etc, before explaining that, with their savings and combines income they can afford a $150k loan, which would buy them a bigger/better house and thus save them a bundle on extensions, etc, when they have and addtion to the family. Sure, they want more kids, so why not... after all, it is a reputable bank and the loans manager IS an economist and really knows his stuff... and to compound the travesty, they're sent off to a 'friendly' property settlement lawyer who OK's the purchase of a $220k house instead of the $150k one they went there for... and why not, they're both working and finances are pretty good....
Next thing, the wife falls pregnant (remember, they wanted more kids) and she has to give up working due to complications. That's a blow but they're still alright, what with his income and their $90k equity in the home, but then his income drops, interest rates soar and the cost of living rises sharply.... now (6 years later) they're in trouble. Not only does the bank foreclose, they also lose their $90k equity to unpaid 'higher' interest.
Again, a hypothetical, but that was happening all over as well, people going for smaller mortgages but being tricked into much larger ones by so-called 'reputable banks' with 'conmen economists' as frontmen! It was as if the banks knew the arse was going to fall out of the market/banking sector, and so went on a crusade to sign up whoever they could before the total collapse came. So! Were these people gullible or trusting... and not so much trusting of the conmen, they didn't know they were going to see one, but rather of the institutions that had faithfully served the public for generations before them?
Throws a different light on it, doesn't it?
This OT but I needed to say it.
@starkers:
It's easy to see why I like you so much. You are a "mensch" (def Leo Rosten, "The Joys of Yiddish" - "someone to admire and emulate, someone of noble character. The key to being “a real mensch” is nothing less than character, rectitude, dignity, a sense of what is right, responsible, decorous").
You engage the situation at the human level. I can only hope that people in this current trouble meet someone with your approach to them.
Thank you for being my friend. You and Ed personify what Leo Rosten wrote. There are others, too numerous to mention here and that wasn't my purpose. It was to thank you.
Yes, m-203, I do consider it relevant. It's another example of Capitalist greed, selfishness, wastlefulness and absolute disregard for others.... excesses to excess, and then cry broke as they lay off workers who can ill-afford to lose their jobs.
All I can say is... hope the capitalist pig dies/died on the 'job'.
Myself being one of those laid off, as of last week, after 13 years, due to our company being 'broke'.
Never did like that poxy number anyways...
The thing that gets me about it is this:we produced aluminium piping for car air-conditioners, amongst other things,and back when our section started with it, I observed the sheer amount of piping going through our hands,20 Tons in 1 shift was a normal day,I went directly to the boss one day, and said to him:"Sooner or later, the car companies are going to have more than enough air-conditioners, what then?"In one ear, out the other, and here I sit 10 or 11 years later,no job exactly for that reason I went to the boss for...
Your reply #51 might hold some water but thats not the real culprit. What went wrong is back in the late 90's( pre Bush) they wanted the minorities to beable to get loans to buy homes. So the Government ordered Freddie and Fannie to loosen up the criteria so they could get loans. So everyone else say what was happening so they did it too and sold a portion of the loans to Freddie and Fannie. Bush tried to stop it but Barney Frank blocked him in congress. Now thats not the only reason where in deep crap, just one.
Thanks Doc, that means a lot to me and says a lot about you as a friend. So yeah, it's easy to see why I like you so much, too.
As for engaging the situation at a human level, well that's because I know no other way. I see and feel human suffering for what it really is... human, and deal with it accordingly, with compassion and from a grass roots level human perspective... as a person who care much less about money than I do about people.
Same thing that happened in 2000 with the computer industry. When will "Sustainable Production" ever enter the vocabulary?
When will industry realize that people aren't in the "Use and Dispose" category?
That's because having known suffering we relate to others with an open heart. Fear (of every kind) is a weapon of violence and is used that way. It should be eschewed.
People should be treated as people, not cogs or tools to be used. "Gotcha" only engenders more violence of the physical, mental and economic variety (there are others).
People should be treated on a one to one basis as people. There is no alternative as the alternatives will only engender more violence.
Someone just push the lever and flush it already! It's never going to change...we'll just watch one documentary after the other on how it's going down the toilet...and the last thing you will hear is the giant sucking sound!
@WG: There always has to be one unbridled optimist.
The way I read this is that blame is still being apportioned to the little guy rather than the banks, the government... and certainly not Bush. However, the problem still comes back to corporate/bank greed and the fact that the average joe/little guy was always trapped between a rock and a hard place when it came to buying his own home. Firstly: even if he could have afforded a modest home the lending criteria automatically disqualified him regardless; and secondly, property values rose so sharply when he could get finance that he was priced out of the buyers market anyhow.
Furthermore, many people were told that they could buy their own home for less than their monthly rent, which for most was rising constantly due to rising property values and land taxes,..landlord greed while getting little or nothing done regarding maintenance, etc. So naturally, with interest rates low at the time, and house payments amounting to less than rent, people were going to accept 'too-good-to-be true' mortgage offers to get into their own homes. And let's not forget, many of them were promised modified mortgages (40 years instead of 30, ect) to make the monthly payment more managable. They may have walked into it with their eyes open, but opened to to a huge lie and they were deceived into believing the American dream was possible for them. The banks knew that increased lending would force interest rates up, and thus the monthly repayments, which for most was the straw that broke the camel's back...the killer interest
In either event, banks/mortgages/housing have always driven by greed and the little guy never stood a chance. If the banks weren't screwing him with high interest, the real estate industry was screwing him by driving up property values to collect higher agent fees and etc... again, greed driven price hikes to make the rich richer. I mean, why is a house that was worth $75k ten years ago suddenly worth $200k today.. or more? The average wage/salary hasn't kept pace with that rate of inflation, so now the only people who can 'really' afford to buy a house sre the rich, and thus the gap between the haves and have nots gets wider. And of course, the US does not believe in government welfare schemes, so as the cost of living and buying a home spirals out of control, what do the average joes do to survive? Do they emmigrate or die, as capitalist greed forces up the number living on the poverty line and/or well under.
One never said the idiots were not governed by greed. That always plays a big part. Its a shame opinion over rules fact. But like assholes, everyone has one.
What I find is that so many people are correct in this thread. Except WOM...he's a Mod, so what does he know?
I find this situation distressing.
"What went wrong is back in the late 90's( pre Bush) they wanted the minorities to beable to get loans to buy homes. So the Government ordered Freddie and Fannie to loosen up the criteria so they could get loans. So everyone else say what was happening so they did it too and sold a portion of the loans to Freddie and Fannie. Bush tried to stop it but Barney Frank blocked him in congress. Now thats not the only reason where in deep crap, just one."
This is true.
However, the problem still comes back to corporate/bank greed and the fact that the average joe/little guy was always trapped between a rock and a hard place when it came to buying his own home.
Furthermore, many people were told that they could buy their own home for less than their monthly rent, which for most was rising constantly due to rising property values and land taxes
They may have walked into it with their eyes open, but opened to to a huge lie and they were deceived into believing the American dream was possible for them.
In either event, banks/mortgages/housing have always driven by greed and the little guy never stood a chance.
Is also true.
Let's let the Federal Investigators do their job and find out who did what and when. Let's not expect instant results.
Let's have meaningful OVERSIGHT and TRANSPARENCY.
So much went wrong because Government was not doing it's job. That lack of oversight is the Bush Admin and Republican Congress's fault. The Democrats didn't do their job either (as a responsible opposition party) and most deplorable was that the "Free Press" was along for the ride, not doing it's job either.
Just as important, when will industry realise that people are not buying new but hanging on to whatever they have, in these hard economic times?
Which begs the question, if people can't afford to buy new cars, why in the hell did the US auto industry get a bailout package? Makes no damned sense to me. US cars are not in great demand overseas, thus not great exporters, so what happens to all they produce if they get back to near full production. Will they just sit and rust in stock yards until they're obsolete, then get melted down until the next bailout comes along?
Yup, it was throwing good money after bad alright... and what's worst, given the capitalist fuelled attitude in the US to government funded welfare payments, the people who need it most will never see an economic stimulus cent. It makes no sense whatsoever for the US gov't to fund consumer industries, yet ignore the consumer base which buys those products. Yup, Kevin Rudd had the right idea with his economic stimulus package, he enabled the consumer base and the increased spending kickstarted the Oz economy again. We're not out of trouble yet, but it was a step in the right direction.
Unfortunately, i have a sister in law that is driven by greed, (just despise this woman) she has ripped off her own mother (who is in the beginning stages of alzheimers) after her father passed, tens of thousands, to the point where my wife and i had to step in and put my wifes name on all the accounts, so it drives people to do it to their own family members. I still ask the question to myself, "how could you rip off your own mother?"
I agree. "Bottom up" is a good approach. I believe Obama is taking a mixed "Top down" and "Bottom up" approach. It's going to take time...so take a deep breath, mate.
Simple - we want the gold and silver reserve notes back so we have to crash all that paper money markets to do so.
Paper is just that - nothing but paper. So without the money being backed by something - it is not worth a thing.
Like a lot of other things here in this world today. But till it all comes down and crashes to give way to the new system we will all suffer loss and a lot of bad headaches.
Just get rid of the CEO's and the politicians along with those so called BANKERS and the world will do for itself again.
MAYBE?????
@Starkers:
You make good points that are lucid, and I can see where you are comming from in most cases, however, there is one thing that you keep saying over and over in this thread that is bugging me.
No matter what form of government anyone prefers, there will be greed. Greed needs to be squashed, not capitalism.
'No matter what form of government anyone prefers, there will be greed. Greed needs to be squashed, not capitalism.'
Amen.
Oh i would like to publicly thank George W Bush for this wonderful mess he helped to create (cant blame him 100% so i will give him 99 94/100 % like Ivory Soap)
People have tunnel vision, they tend to have short memories and blame everything on the last guy no matter what. For those that have forgotton, I never voted for Bush for any office he held but I won't blame him for this entire mess we're in.
I speak of capitalists and greed together because, for the most part, it is capitalist driven greed that's behind the issues we've been discussing. Secondly, I acknowledged that Bill Gates and Warren Buffet are capitalists with social consciences and socialist agendas which are quite generous, so yes, I do know that not all capitalists are necessarily greed driven. In fact, I think Bill Gates is quite the opposite because his prime philosophy appears to be development, etc. In other words, he's a doer of things who makes money, rather than a money maker who does things.
And of course not all greedy people are capitalists. For example, I will always take the largest slice of cheesecake cos I like it more than mrs starkers does... well I dunno she likes it less, but I'm bigger than her so I need it more.
Seriously, you are quite correct, I have met many a greedy person over the years, and quite a few were non-capitalists who thought it their right to have the most, biggest and best because... well just because.
Agreed, there will always be greed, that's a sad fact of human nature. However, just as familiarity breeds contempt, so does Capitalism in its purest form breed greed, by virtue of the fact that capitalists are profit motivated and driven. This is why there needs to be some form of Socialist component within government to create the balance required for a more equitable society where all citizens are looked after, particularly the aged, infirm and disabled, etc. A purely Capitalist society may build the infrastrucure and provide the necessary resources to cater for these people, but not necessarily the means with which to pay. This is where the Socialist component of the govenment steps in... it provides the means so these disadvantaged persons can pay the Capitalists for the use of the facilities and resources. Socialism and Capitalism working hand in hand to provide for those who can not provide for themselves works quite well in many countries, and it would work in the US, given the chance,
So where would the money come from? Well everybody pays taxes in one form or another (income, sales, fuel, etc), and if the US cut back on the War budget - we won't call it a defense budget because nobody's going to launch a military attack US soil - the government already has the funds to implement assistance programmes for those most disadvantaged/in need. And the capitalists would have nothing to fear, because social welfare better enables a larger portion of the population to buy/use their products and sevices. It'd be a win win situation, and eliminating poverty, narrowing the gap between the haves and have nots would likely see the crime rate could drop dramatically, but of course there's the hard-nosed sceptics who believe government should not... can't run anything.
Strange, that! They'll trust the government to engage in overseas wars in Iraq, Afghanistan, Grenada, etc, and applaud it for something that takes life, but not with something that saves lives. Something seriously wrong with that thinking, seriously, seriously wrong.
I am way over my head in this conversation, but having read the initial post, I feel the need to comment on the bail-out.
From a parent's point of view.
I have four children (two step , to bio) I have seen the negative side of bailing out a kid who gets himself in "too deep too often". That particular kid is now on house arrest at his grandmothers, after having served some time in prison. No one has held this child accountable for his actions till now (he is now 19).
If he had been held accountable for his actions from day one, he would presently be an upstanding, working member of society. With his intelligence, possibly finishing his third year of college. Because he wasn't, he feels the "world owes him a living" and has no intention of bettering himself.
While the economy is totally trashed, and it's understandable that something had to be done, I feel the bailout was encouraging that mindset of "the world owes me a living". There was no initial accountability, the money was literally just handed out arbitrarily and there was no sign of a consience on either side. Our government has failed us in it's "parental" capacity.(not suggesting our government shouldbe our parents, merely pointing out the heirarchy,.. chain of command if you will.)
The real question now, is what will happen next? Everything else is not relative anymore unless it is duplicated in some way in the future.
I was fearful of how America would survive with our new president, but I have hope that finally someone will be able to stand in that "parental" role and demand accountability , instead of making excuses and throwing money away on ungrateful "children".
I would like to say that I have enjoyed participating in this post (discussion). Different viewpoints and opinions have been presented and it has stayed very friendly. Thanks to everyone for that.
I know we are talking about the current economic problems that are facing everyone, but if we can just step back a little I think just about everyone will see that what we are really talking about and discussing is LIFE in general. Surely we all have stories in our past (those of us that are old enough) where are parents where faced with similiar if not the same or worse problems.
My parents started out as children of the 'Great Depression' and came out of it as young adults. My father didn't get a chance to complete school because of the need to help the family with getting a job. Later on in lfe married and wtih three children my father lost his job of 25 years. This coming just at the time he decided to take his savings and invest it property in Florida. This was the early 60's, he had bulit the two homes by himself that his family lived in and was now faced with hard decisions to make. We moved to a smaller house, he got another job, mother went back to work, and he never lost the property and kept hold of his dreams for his family. In less then five years, minus to sisters, we moved to Florida.
What's the point here, well life changes everyday for all of us. Each day we find ourselves making decisions that changed what we planned on doing yesterday with our future.
Starkers, you gave a situation with a young family that I'm sure happens more then we all realize. I do though have to ask, once the wife lost her job, just what decisions took place? Did they look at what life had presented to them and make hard decisions? They could of sold the bigger house and moved to a smaller one. Did foreclosure really need to happen?
Do not think by how I respond here that I haven't been faced with hard decisions in my life, we all have. I think though that the current generaltion of young adults are not equipped emotionally to do what is necessary. Who is a fault for that, I don't know, maybe Society in general.
There is one thing that I do know, generations before us came through as hard if not harder times. Did things work out, well, we are all here so I have to think that things worked out. People will still experience hardships and losses everyday and still manage to make it. That my friends is LIFE.
Everyone have a great day.
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