Are Financial Institutions, Auto Industry & Government-Blind to theTruth?
What happened to make all of our financial problems surface at the same time?
Warren Buffet gave the simple answer: “You only know who is swimming naked when the tide goes out”
A recent piece in the New Yorker magazine pointed out that that the confidence grifters thrive in the froth of a overly hot and bullish economic climate. It is when things slow down that the naked swimmers are exposed.
Many of the financial institutions would be insulted to be included in the same pot as Bernie Madoff. They however are part of the same stew that gave us our current economic mess. The executive bonuses based on overstated financial statements are all part of the same mentality used by some illegally and others on the edge of legality. Extraordinary personal financial gain was the primary goal of many on both sides of the narrow line determining legal activity in the financial community. Hubris was the operating characteristic common on Wall Street. They all seemed to have the same financial illness, which was being “ blind to the truth” that the tide always turns.
Tthe economy has its own neap tides.. We all understand that we are in a period where the low point of the economy is causing problems that are grave for financial navigation purposes. I believe that the solution to the current problems will come from the general population, not from some giant public works program. The people are starting to work on the problem while the politicians only stop talking for a moment to throw money at the problems. They are shoveling the money with little control or requirements on those recipients of the bail out funding.
While the economists predict outcomes and the politicians create more debt, the people are starting to take action. November and December saw the greatest decrease in the use of revolving credit (credit cards) in many years. Ordinary people recognize what the politicians have yet to understand. The one thing that we do not need as individuals or a nation at this time is more debt.
Some prominent economists reaction to this reduction of credit use has been to decry the decline in spending that this signifies. Those geniuses don’t recognize that the people of America are the strength of the economy A year ago the nation was warned about excessive use of credit for purchase and chided by financial gurus for being obsessed with the over consumption of everything. Now that the public is responding with actions taken in their self interest, somehow that is not satisfying the nations needs. This need as being called for by the political side of the issue is to spend more and don’t worry about debt.
The banking community received $350,000,000,000 of our money to save the financial system and expand credit availability for the housing crises Where did the money go? Not to housing or the people facing foreclosures. What have the banks done with the money to increase the credit availability? No one seems to have that answer.
The political answer now taking place is to approve the second half of the $700,000,000,000 that has been allocated to save the financial system and free up credit for housing and business needs. This is being done even though The Department of the Treasury has not told the lenders (us) what happened to the first $350,000,000,000
Like most Americans my family has had more credit cards than we needed or should have. In the last month we have taken the”opt out” option on each of the cards on which we have received notice of an interest rate hike. The cards turned back have a total credit availability of close to six figures. I am convinced that this is the right move to take. I certainly do not need more debt. The banks are so messed up that they now need to raise rates on their credit card loans to a level that will not work and may chase away many of their credit worthy customers along the way.
It is rumored that the new administration will address the credit card rate hikes by putting a limit on the rates charged. The new limit will be about 36%. At one time such a rate was considered usurious. This was a rate that only the mob would get. Are we going bananas to let such absurd solutions be even proposed? We, as a first step, towards solutions must recognize the truth that government and financial institutions have lost sight of the nations needs and strengths while merging their own goals into a unified self serving agenda.
We now need to demand transparency concerning the use of our money for the bail out of various mismanaged businesses. Not one more dime should be handed out unless a clear track for responsible use and reporting to the public is established.
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