Week of 07/14/2008

Making Matters Worse
– by David Matthews 2

Let’s suppose that you’re onboard a boat that has a leak in the side and you find out that you’re not going to make it to dry ground before the boat completely submerges. Do you:

(A) Find some way to continue to float until you can make it to dry ground.

(B) Curl up in a ball and cry about not remembering to bring a life jacket.

(C) Take an axe and chop open a hole in the bottom of the boat so that the leaking water will just drain away.

We would all think that we would want to try the first option. Some of us will admit that we will probably do the second. And as crazy as it may sound, and as much as they will deny it, some people actually will do the last option thinking it is a legitimate course of action.

We don’t like to admit that we could make matters worse, but we still do it. You’re really having a bad day and someone comes along and just makes it worse. Sometimes it’s done out of ignorance. Sometimes it’s just really bad timing. Sometimes it’s done because it is the most opportune time for them to act. Sometimes it’s done maliciously.

Take America’s economy… please.

When times are great, we all would like to prosper from it. But when times are not so great, it seems like everyone wants someone else to bear the burden and we still want the good times to go on like nothing has happened.

Unfortunately our economy is more intricately-woven than we would wish it to be. When times are great, we all prosper. But when times start to sour, then we all go down together.

America’s economy under George W. Bush was never as great as the Washington spin machine want us to believe it has been, even during the so-called “good times”. Corporate profits were up, but real wages didn’t match. They certainly didn’t keep up with the ever-rising cost of living. The bulk of America’s “wealth” came through the rise in housing prices, and in borrowing ON that “wealth”, which during the infamous Housing Bubble gave people the having the illusion of having more wealth than they really had.

But hidden inside that “prosperity” were some serious problems. Banking and bankruptcy rules were changed to better benefit the lending institutions. An abysmal and unforgivable energy policy continued to place America’s energy resources under the grip of foreign nations and market speculators. Subprime lending practices allowed banks to play hard, fast, and loose with customers. Shoddy inspections would lead to poisoning of our food and products.

It was only a matter of time before it would all start to collapse.

As with all previous recent economic downturns, it was the price of gasoline that started this one. Although ignored by the government (and others), the ever-increasing rise in gasoline prices above and beyond the cost of living caused a chain reaction to the economy. Higher fuel prices meant higher prices for goods and services. Higher prices meant less available money for discretionary spending. Times would get tougher. Businesses would have to cut back on bonuses, perks, and even stop hiring or start laying people off.

Our economic ship is sinking. Now we have to do something about it.

And unfortunately there are still those who would continue to take an axe to the bottom of our sinking economic ship in hopes of “draining the water”. And this axe comes in many forms.

Bad Service – Times are tough. People have to work harder and harder to make ends meet. There is more of a demand placed on those businesses to keep staying profitable and still cut costs at all corners. This added stress leads to bad service.

This is painfully true with the airline industry. Once upon a time you could go to any airport in America and fly for as low as $20 one-way! Today you’re lucky if you’re paying under $100 for a one-way flight, and you have to be there at least TWO HOURS in advance, not counting the time you would have to spend going through airport security.

And there is a fee for EVERYTHING on an airplane now! I’m waiting for one of the carriers to announce a fee for BREATHING! You know it’s a matter of time before they do.

The airlines want you to believe that it is all because of the high cost of fuel

To make matters worse, airlines like Southwest Air have instituted their own personal unofficial dress code. If you dress too attractively, or if you wear a tee-shirt with a message that someone doesn’t like, they can kick you off the plane. Your flight with them is considered a LUXURY, and done so at THEIR discretion, not yours.

Delays have gotten worse too. An American Airline flight going from Miami to New York had to be cancelled because the passengers complained too loudly about the excessive delays from the flight crew. And with more overbooking and more congested airports, not to mention the added security imposed on the passengers, the delays are only going to get worse and worse.

Americans are now flying the HOSTILE skies, and it is believed from some sources that it has cost the airlines anywhere up to $11 BILLION because of it. And that is not counting the losses incurred by the hotels, restaurants, and tourist groups.

Bad Banks – Lending institutions have been playing hard, fast, and loose with all the money they have… theirs and ours. They have bought and sold debt like so many baseball cards. Sure you may be writing the checks to the same place, but you really don’t know who holds your debt now.

And now that the banks got all the changes they wanted (including to personal bankruptcy) from George W. Bush and the Republican-controlled Congress, they get to screw with us over now that the times are getting tough.

Terms of Agreement keep getting sent out… if you’re late on any payment for any reason, your interest rate on ALL of your credit card debt goes up and up. Credit card lenders are also reducing the maximum credit limit, sometimes lowering it to BELOW what holders currently owe. The end result? More penalties, not just for THAT lender but for any other lender that gave you a credit card.

Now adding to that is the federal government – under George W. Bush – bailing out bad institutions like Bear Sterns, and shutting down others like IndyMac. Other lending institutions will follow. Meanwhile the average consumer with debt is getting squeezed without any kind of help from the government.

Bad Government – George W. Bush believed that handing out money would be the cure to America’s ailment. Just give out money (and a few choice tax cuts) and the economy will be back in black.

And if you believe that, then I have some real estate in the North Pole for you!

Unfortunately nothing really changed to fix the SOURCES of our fiscal ailments. Foreclosures are still expected to strip Americans of their most valued asset well into 2009 and quite possibly beyond. The credit card companies haven’t stopped screwing over Americans. The collapse of lending institutions will continue and get worse. Our energy policy is still abysmal and inexcusable.

But there’s more involved than just bad governing on a federal level.

Rising foreclosures have also affected state and local governments. As whole neighborhoods are getting driven into foreclosure, there is nobody there to pay the property taxes on those homes. Local communities need those taxes to keep their services going, so they were have to cut some services and/or shift the burden onto those remaining homeowners and hope that they aren’t driven out as well.

In Atlanta, the area has been hit not only with a souring economy, but also with a crippling drought. This has put the taxpayers into an even worse bind, because they are first being told by Governor Sonny Perdue that they have to cut back on the water they use, and then they are being told by their local officials that because people are using less water, they have to raise the water bill rates even higher.

The whole thing is asinine, plain and simple. SOMEONE in government has to be willing to take a hit, and nobody wants to be the one doing it, so they’re fobbing it all off on the public and that is only serving to make matters worse.

And then there is…

DENIAL – And I’m not talking about “de name of de river in Egypt”!

Since the first step of dealing with a problem is admitting that there IS a problem, it’s pretty obvious that most of the failures on the federal level are coming from those in government FAILING to admit that there is a problem to begin with.

For the longest time, George W. Bush FAILED to admit that there was a problem with the economy, even when more and more people began to see the signs of it happening. He REFUSED to admit there was a problem, and then when he finally had to admit that there was a “slowdown”, he just decided to throw some money at the problem and hope that it would go away.

Likewise many conservatives and neo-conservatives are continuing to live and breathe in a bubble of delusion; shut off from reality itself and insulated by the money in their own bank accounts. Money that some of them made FROM the problems we are currently experiencing.

Take, for instance, former GOP Senator Phil Gramm of Texas. Gramm was one of the authors of the Commodity Futures Modernization Act of 2000, which was used to allow market speculators to take over the energy industry. That, by the way, includes the price of oil. This allowed companies like Enron to manipulate the energy market, and also hastened its collapse. Gramm’s wife was on the board of directors for Enron. Gramm is currently an executive with the Swiss-based UBS, the financial investment company that picked up the pieces of Enron.

The former Senator is on the record as saying that there is no recession; that it’s all in our collective heads. NEVER MIND the skyrocketing price of oil and the skyrocketing price of gasoline (which a large part is from the market speculators brought in BY Gramm). NEVER MIND the climbing price of goods and services directly related to the rise in fuel costs. NEVER MIND the thousands of jobs lost, and thousands more that WILL be lost. NEVER MIND the bankruptcies and the foreclosures. It’s all in our heads, according to the man who was responsible for helping many of our problems come to be.

By the way, it should be noted that Phil Gramm is also Senator John McCain’s most valued economic advisor in his run for the 2008 Presidential Election. Senator McCain had to publicly distance himself from his “economic brain”, but the fact of the matter is that there are A LOT of conservatives and neo-conservatives that agree with Gramm. And they can AFFORD to live comfortably in that delusion-bubble of theirs and spout off their outright LIES about how GREAT the economy really is and that anything to the contrary is just a myth.

Let’s get brutally honest here… as long as all of these factors are in play, our economy will continue to swirl down the toilet!

The basic problem is this: nobody wants to take responsibility for the messes they created. The banks create a scam that they should have known would bite them in the ass, and they refuse to take the hit for it. Government officials helped to facilitate the scam that they also should have known would bit them in the ass, and they also refuse to take the hit for it. They all expect the consumers to burden the cost and the blame for these things that THEY THEMSELVES created.

The overall consumer, meanwhile, is struggling, just trying to keep up with the wave on top of wave of bad news. Higher prices, shoddy oversight, bad quality, bad service, inept government. They’re doing everything they can to prevent from curling up into a ball in sheer frustration. We certainly don’t need any of these jackasses making matters worse. At the very least, if these jackasses don’t want to be part of the solution, then they need to stop trying to make the problem even worse, because it will otherwise come back to hurt them in ways that they will not expect.