CHILDREN OF THE FINANCIAL HOLOCAUST

I think Bob Herbert of the NY Times wrote today what will be eventually seen as the most important article on the financial crisis. We’ve seen it before — the children of the great depression, children of the holocaust, returning veterans from WWI, WWII, Korea, Vietnam, Iraq, Afghanistan. Now it’s the financial meltdown.We ignore it at our peril.
All these events have one inescapable thing in common — damaged children, the extent of which was not easily discernible until years later. Damaged children lead necessarily to a dysfunctional society, and that is what we have.
TODAY CHILDREN ARE GROWING UP WITH A HISTORY OF BEING TORN FROM THEIR HOMES, THEIR LIFESTYLES AND THEIR PRECIOUS HOPE AND TRUST IN THEIR PARENT’S PROTECTION IN A WORLD THAT IS NOT FAIR OR JUST. (It is this point and this point alone that I publish this blog, my writings, my public appearances and my seminars).
EXACTLY HOW MUCH BRAIN POWER DOES IT TAKE TO REALIZE HOW THESE CHILDREN WILL PERCEIVE THE WORLD WHEN THEY GROW UP AND START RUNNING THE WORLD? MAYBE WE SHOULD START PAYING ATTENTION TO THEM. MAYBE WE SHOULD GIVE THEM THE MESSAGE THAT THEY MATTER MORE THAN ANYTHING ELSE. MAYBE WE CAN MODEL HOW TO MAKE THE WORLD A LITLE BETTER FOR THE NEXT GENERATION.
But that’s just my opinion. I could be wrong.
November 28, 2009
Op-Ed Columnist

Stacking the Deck Against Kids

Every year at Thanksgiving, parts of the Upper West Side of Manhattan become like a paradise for children. There’s the exciting preparation of the balloons and floats for the Thanksgiving Day parade, and then, on Thursday morning, the parade itself.

The weather isn’t always kind. I’ve seen the kids out there in snow, in freezing rain, in winds that threaten to send the balloons and their handlers soaring to distant venues. It doesn’t seem to matter. The children come into the neighborhood in waves, holding the hands of adults or riding atop their shoulders, smiling, laughing, playing hide-and-seek among the police barricades. Finally, inevitably, they end up staring in absolute open-mouthed, wide-eyed awe as the mammoth, colorful helium-filled creations of their favorite characters begin making their majestic way down Central Park West.

We have an obligation and an opportunity at this special moment in history to do right by these youngsters, and all the rest of America’s kids. It’s a special moment because we’ve seen so clearly the many things that have gone haywire in the society, and while it may not be easy to articulate, we have a sense of what needs to be done.

The American economy is broken, ruined by the greed and irresponsibility of fabulously wealthy corporate chieftains and their shabby acolytes and enablers in government. While Wall Street is handing out billions in bonuses, American families are struggling with joblessness, home foreclosures and rampant debt. The economic woes are exacting a fierce toll on family life, and children are taking a big hit — emotionally, psychologically and otherwise.

One effect of the Great Recession, according to a recent series in The Times, has been a big jump in the number of runaway children, many of them living in dangerous conditions on the street.

Family homelessness is also up, and poverty is increasing. More than a third of all black children in America are poor, and that tragic percentage is expanding. The outlook for America’s working classes is bleak. A few weeks ago a New York cab driver nearly broke down in tears as he told me he’d had to apply for food stamps to continue feeding his family.

A sense of urgency may be starting to emerge. With President Obama’s jobs summit approaching, representatives from labor and progressive organizations gathered in Washington to warn of the lasting damage being inflicted on the prospects of young Americans by the continuing employment crisis.

Millions of youngsters like those who were suffused with such delight at the Thanksgiving Day parade are being buffeted by an economy that is eroding their quality of life, curtailing their educational opportunities and undermining their prospects for economic success as adults. That more attention is not being paid to this growing disaster is criminal.

Groups represented at the meeting in Washington, which was sponsored by the Economic Policy Institute, included the A.F.L.-C.I.O., the Leadership Conference on Civil Rights, the N.A.A.C.P., the National Council of La Raza and the Center for Community Change. Among other things, they urged the administration and Congress to provide substantial additional relief to economically distressed state and local governments, to invest in much more widespread infrastructure improvements, and to engage in some direct government creation of jobs.

All of that, in my view, would amount to just a first step. We remain stuck in an economic model that not only permits but encourages the continued existence of financial institutions that are too big to fail, which means that when one or more of them fail — as will surely happen at some point — we’ll again be rushing to “save the system” by bailing them out at taxpayers’ expense.

The system remains grotesquely unfair, with the deck stacked against working people, even as we’re desperate to have them sustain the economy with nonstop consumer purchases. Keep in mind that at the start of the recession the collective wealth of the richest 1 percent of Americans was greater than that of the bottom 90 percent combined. The economic and political clout of that bottom 90 percent has only weakened since then.

We still have a hideously dysfunctional public education system, one that has mastered the art of manufacturing dropouts and functional illiterates. We have not even begun to turn that around.

We still keep fighting tragic, futile, stupid wars, squandering lives and resources and creative energies that could be put to use right here at home, where the need for nation-building is beyond critical.

The U.S. should be a paradise for young people. We need big changes in this country, approaches that are constructive, creative and fundamentally new, if we’re going to give those smiling kids I saw on Thanksgiving Day the kind of society they deserve.

Economic Meltdown and Moral Constipation = POLITICS and MSM

I would give credit for the term “moral constipation” but I can’t remember where I heard it. I invite all who read this to give me the creator’s name so I can correct this blog and give him the attribution he deserves. 

It appears that we can all agree on one thing regardless of which candidate, party or ideology we subscribe to — The United States of America is on a path of moral bankruptcy, where ethical concerns and choices between right and wrong have been shoved off the table and instead convenience and self-aggrandizement is accepted by “we the people” with far more tolerance than is acceptable to me.

There is practically nothing so dear to me as my own opinion of my own intelligence. And yet I am dumfounded by the lack of outrage as corporate America and Government join hands in our pockets, in our lives, in our families, and in our minds. Protests erupt about the Olympic flame — but where is the outrage, the “I’m mad as hell and I won’t take it anymore” about the following:

  1. Diesel fuel is $4 per gallon here but across the border in Mexico it is $2. Anyone care?
  2. Real inflation for the Average American is in excess of 15% and climbing. Anyone interested?
  3. Exxon made $11 billion last quarter. The rest of us made less at the end of the month because the money went to Exxon. Is there any connection between that fact and the Presence of an Oil man in the White House/ How about a vice President that headed up the very company that profited the most from the Iraq war? Is this so boring that MSM should be ignoring it just because nobody seems to want to anything about it?
  4. By 2009, 1 person in 10 will be on food stamps in the United States. Shouldn’t that be interesting to both sides of the “Aisle?”
  5. The average person in the United States is in debt on credit cards and other consumer and real estate loans in an amount that they can never repay, whereas no other modern country has that problem. Why?
  6. Interest on debt accounts for more expenditure by government and individuals than anything else in the United States. Trillions of dollars of transfered wealth from those who now can’t eat to those who don’t know what to do with the money. What is being done about interests rates that guarantee non-payment and assure financial enslavement? (By the way medical care is second is now touted to be the “employer of last resort”).
  7. Houses were appraised at $500,000 and within days were revealed to have values of less than 70% of that. People were prompted, tricked and coerced into signing mortgage documents they didn’t understand, in violation of law (not that anyone has been prosecuted), and now the borrowers are blamed for a scheme they still don’t understand. Now millions of American citizens are or will be broke, homeless and jobless. We know who did it and how it happened but MSM doesn’t care about that.
  8. All of MSM (Main Street Media) is now controlled by a handful of people who let us hear only the things they want us to hear and only in the ways they want us to hear it. If you want news, go to the Internet, if you want infotainment watch TV or listen to radio. 
  9. How many flag draped coffins can be hidden from view to keep the Iraq war “sanitary” and keep the public distanced from the gruesome reality of war, death, disfigurement, famine, disease and moral decrepitude? And why is MSM going along with  the ban on pictures of coffins? Isn’t the death of young loved members of families who made the ultimate sacrifice worth reporting?
  10. How many veterans need to be homeless and wandering through the streets with head injuries before we think to ourselves “you know, there is something not quite right about this.”
  11. We have outsourced the most sensitive manufacturing of top secret defense components to China which just happens to be the only real military threat to our national security. And we have financed their military expansion by encouraging their economic growth to the point where they now have a  stranglehold on our country — they own most of our debt, they manufacture most of our goods, they process most of our food, and they are the most prolific source of spying in the United States. Thus whatever they don’t get legally, they get illegally. 
  12. MSM (main Street Media) has virtually eliminated their staff of reporters, because they get everything off the newswires and they make up the rest. Most of the time spent on “news” channels consists of opinions about gossip. Interesting, perhaps, but useless for those of us who would like to evaluate our options on voting on issues and candidates.
  13. It is illegal to counterfeit money unless you are a foreign country (North Korea for example) or you are a Wall Street investment banking firm that creates money supply by calling them “derivatives, collateralized debt obligations” and such. Between North Korea’s supernote and and the $500 trillion (yes with a “T”) in derivatives, credit swaps etc. out there it can be no surprise that no government can control the effects on world monetary supply —- that has been outsourced to the private sector as well. 
  14. MSM (Main Street Media) now presents us with pretty faces, some nice looking legs, a tempting bust line, and a teleprompter written by people who have not researched the validity of the reports in 10 years.
  15. Prescription medications are “so dangerous” that you can’t get them without seeing a doctor, but they are advertised directly to consumers. Is this what we want our children to hear and see? You can get a Bud Lite or a Absolute martini without a doctor’s prescription and drink all you want. It’s only when you kill or main people with your driving or other physical abuse that you are held accountable. 
  16. MSM (Main Stream Media) provides us with pundits and moderators who are undereducated, and inculcated with the sole core value of saying something that will increase the ratings and thus revenues of the media in which their comments appear. 
  17. Prescription medications cost $20 per pill here and as little as $0.50 in other countries easily accessible from the U.S.
  18. The total expenditures for medical care, drugs, products and associated services is around 2-3 times the amount spent by any other country or group of countries. The average U.S. Citizen is in constant danger of dying for lack of medical care because he/she is probably not covered entirely for the medical event, because he/she was never given a preventative regimen that is regularly followed in other countries, or because they are simply barred from access to medical system. 
  19. Despite the amount we spend per person, we get less care, and suffer from shorter longevity, higher infant mortality, shorter height, than at least a dozen other countries and sometimes as high as 40 other countries depending upon which metric you are interested in. To say we lost our “lead” is not the point. 
  20. The average person educated in the U.S. has slipped from 1st in world ranking to around 20th. Does that bother anyone?
  21. Bullying has spread through every school, public and private and is spreading into the marketplace. Hello? Anyone there?
  22. We have lost our way. We worship money in all its forms more than we worship God. Every day we perform acts that involve our worship, use and belief in money. Most of us spend at best one day per week for a couple hours worshipping God.
  23. MSM (Main Street Media) thrives on conflict over minutia (bullets in Bosnia, a flag pin probably made with lead in China, and statements of “associates” that are made into controversial “positions”) rather than actual issues and characteristics about the candidates themselves. We allow this by talking about that the pundits tell us to talk about. And what we talk about causes us to vote against our own interests.  
  24. When we tried importing from China and India the prescription drugs at a fraction of the cost that the drug companies were charging us, the government stepped in and said it was unsafe and  could result in tainted drugs. Now the drug companies have eliminated American jobs and outsourced the manufacture of the drugs to where? — India and China — and we have what — tainted, deadly drugs of dubious value to begin with and with side effects that include anal leakage and death. 
  25. How many times do we need to hear that pharmaceutical companies spend $5,000 on every man or woman doctor in the U.S. to push their stuff before we make THAT an issue?
  26. The war on drugs is making a fortune for people on both sides of the law, including the privatization of prisons and huge profits from private ownership of prisons, 75% of the inmates of which are there because of minor drug charges. There is no war on drug use and there is no war on drug supply. That is why we have drugs in America.
  27. How many times do we need to be disappointed in a politician, whom we knew was taking money from the medical- pharma complex, insurance companies, oil companies and credit card companies? What makes us vote for these people?
  28. Where is MSM “keeping them honest” by reporting discrepancies between promises and action?
  29. How many dogs need to die before we accept that they are the canary in the mine shaft and that the rest of us are just as much at risk because the tainted, poisoned food is all coming from the same place now?

I could go on, but I invite you to add your own comments to the list. And while you are at it, why not answer this question: What specifically are you going to say to your friends and family about these issues and how will you vote?

Our Decaying Educational SYstem: An Answer from Cyberspace

Several pilots around the country involving tens of thousands of students point strongly to a solution for education that is fiscally possible and could catapult this nation back into the forefront of innovation and education. It also presents a major opportunity for local American businesses to get involved in their communities, expand their revenues, increase their profits and boost employee productivity.

On-line education is being tested in several states with some interesting and very positive results. Criticism seems to come mostly on ideological grounds. But the home-schoolers already know that our education system as it stands is broken. Now comes a high tech solution to a low tech problem — parent – child involvement and bonding.

This is a possible way of sidestepping the high cost of renewing parts of our infrastructure while at the same time leaping ahead of where we currently stand in education, relative to our own past and relative to other countries. U.S. HIstory points to several seminal turns like this and I suspect that this is going to catch on BIG time.

Older facilities can be retrofitted cheaply to accommodate occasional classes and extracurricular activities, sports and social events while most of the schooling is done on line. Under the right direction, if the child is doing well, then the system is working. If the child is not doing well, tutoring can be offered at some local facility.

This leads to an interesting phenomenon. Only parents whose children are NOT doing well will suffer the inconvenience of taking their child for tutoring. 

For the first time, parents whose approach is based upon their own satisfaction and convenience and laziness, would have an active reason to make certain that the child is learning their lessons well at home. This in turn could lead to more parent-child interaction and thus the ultimate high tech solution to a low-tech problem — parent-child involvement and bonding. 

The financial savings would easily cover the re-introduction of arts, physical fitness, and all the things we were accustomed to seeing at school a few decades ago.  

It could also lead to high productivity of students, enhanced by greater knowledge, more highly developed analytical skills, more nourished creative impulses, and more rounded and complete understanding of world history, geography, culture, arts, sciences and of course the basics of science, math and communication. 

In turn, this means that baby boomers, like myself, would have a better chance of getting treated by a physician who is better trained and educated when we really need it, if we are still around, in 20-30 years. And it means that our children and grandchildren stand a much better chance in a highly competitive world to create entrepreneurial opportunities for themselves and get jobs that offer better lives than the generation before them. 

And here is a tip for the marketing savvy geniuses. If you assume that this IS going to catch on, you have a huge marketing channel for many services and products. So for example, community banks and credit unions who offer on-line banking could include tutorials on basic personal finance and let students manage virtual bank accounts. Hardware and software providers would have easy access into each of the homes of the students if they offered basic systems to the schools for nothing or next to nothing. Companies wishing to make a name for themselves and ingratiate themselves with a community could make donations that they know will result in better candidates for employment.

Mortgage/Credit Meltdown: Stimulus vs. Economics 101

Mortgage Meltdown: Economics 101

Theoretically economics should be a separate discipline from politics. It is referred in textbooks as the study of scarcity and allocation of resources. It ought to be an “assist” in developing national, regional and local policies that lead to better lives of citizens. In fact, however, it is merely an arm of political partisanship and ideology. It has become the effluent (sewage) of econometrics (measurement of economic data) because the measurements are selected for the purpose of furthering political ambition, power, and ideological agendas. The resulting economic policies are not surprisingly ineffective, unrealistic, and often lead to disastrous consequences.

The latest blast from the past is the talk of “economic stimulus.” In other words, more of the same, deferring the inevitable crash until somebody else gets into public office and we can blame them for not controlling an economy that has been scrambled with political agendas for 50 years or more. 

We don’t need and should not want “stimulus.” What we need is to correct our perspective, change our behavior, and pursue a zero tolerance on economic policies that are not designed to add value to our society, our competitiveness in a world economy, and encourage the one thing that has distinguished the American experiment from all other societies and systems of government and rules of the marketplace — INNOVATION. Capitalism and a republic operating under democratic principles are good things in theory. But if not practiced in reality they become mere buzz words behind which ambitious people hide their personal goals.

Economists are right when they constantly remind us that we are in a constant process of trade-offs. We take more from there and gain a little somewhere else. We spend a little here and take a little from there. This is true. Yet the same economists come up with exotic theories supporting unscrupulous politicians of all political persuasions. We are told that spending is not real spending because the multiplier effect will produce more in taxes than it costs the government. Ornate “theories” predict the recovery of the economy, and the necessity of periodic recessions, boom and bust cycles, etc.

For example, if the multiplier is 5, then one dollar spent by the government produces $5 “stimulus” to the economy. If the average tax is 20%, the government spends a dollar and gets it back. And five people get the benefit of extra revenue. But it doesn’t work that way. The multiplier is rarely 5 even if it averages five for the entire economy. The revenue is subject to costs that are not taxed. And the tax code which consists of thousands of pages of conflicting policies, procedures and favors to large political contributors, hardly provides 20% tax revenue. it is more like less than 1%, which is why the deficit continues to rise an alarming rate.

Add to that the intense pressure from government, business and banks for consumers to spend every penny they get and the pressure to improve one’s credit score at all costs so that more debt can be acquired and spent, and we are left with a nation whose citizens are completely enslaved in debt, a government that is hopelessly in debt and locked in policies that can only make the matter worse, and a currency whose value is correctly perceived by the rest of the world as resting on an economy based on the BIG LIE: Using whatever means are at the disposal of decision makers, they coerce, trick and otherwise convince consumers to buy items they don’t need or even want. Now that consumers are basically out of money and have no more credit available, the government wants to get more credit into their hands and give them just enough money to make a down payment on acquiring more goods than they need or want. 

This is not “stimulus”. It is pushing us over a cliff. If we want to give citizens some extra money, then let us couple it with reality — education on saving the money, retraining their spending and building wealth. 

A basic working assumption of economists is that individuals are rational maximizers most of the time. In other words they are successful, most of the time, about making decisions that are in their best interests. It is a nice assumption but isn’t true. Perhaps it could be closer to true if (1) everyone received adequate education and (2) government, industry and finance gave up the desperate goal of spending more regardless of the costs. 

As it stands, we are a generation developing a legacy that is the opposite of our parents — the inheritance will be trillions — tens of trillions — in debt and a currency that is nearly worthless. We will be a society of uneducated, unsophisticated citizens who cannot spell “innovation”, much less come up with it. 

And the top 1/2% of the country unaffected by the desperate poverty, hunger and housing situation of their fellow citizens, will debate “stimulus” packages that are geared to channelling even more money to themselves while giving the appearance of helping the nation. The upper class will socialize police services to make sure they don’t get hurt by people who are hungry and disaffected. Fore services will be socialized so that the homes of the wealthy are saved, the lives of the wealthy are saved and the property of the wealthy is preserved. The rest can go the way of Katrina. Healthcare will be socialized but the money will fist go to insurance companies and then to medical providers thus guaranteeing higher medical costs, and the brokering of life and death for profit. 

The solution for the current crisis that threatens us with the worst economic conditions we may have ever experienced, is to stop it. The Fed and finance sector cannot spend our way out of it without creating worse conditions. Punishing the rascals who came up with this scheme of moving risk around under sea shells so fast that nobody knows where it lands is not the answer either. Maybe they deserve jail. But more importantly, we deserve a viable society and viable economy. 

The rascals have the channels already established through which solutions can be passed. Getting rid of them would be like disbanding the one force that could have kept order in Iraq after the invasion — the Iraqi army and police. We need the power of government and the finance sector. It was the the investment banking firms that created the funny money and not the Federal reserve. That is why the Fed’s lowering of interest rates and “increasing liquidity” will have minimal results. 

The brakes have already been outlined in this blog. To summarize, stop the foreclosures (and don’t distinguish between those who “deserve” to be foreclosed), stop the write-offs for lenders, halt the criminal investigations, modify the mortgages down to any level that will keep the houses occupied, provide the owners of CDOs with a return as soon as possible as much as possible, and THEN find ways to crank up the economy without excess consumer spending and debt.

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