Doomsday Has Arrived, OR, Why Free Market Capitalism Doesn’t Work

I’m not an economist, and indeed my interest in the economy generally falls just above my interest in which “Hills” character is hooking up with which semi-celebrity. But this recent economic collapse has got me worried.

People on Wall Street.

People in front of the NYSE.

As I’m sure everyone is aware, the stock market fell 500 points today, the worst loss since the markets opened after 9/11. The reason for the fall is one that fascinates me because it takes place on such small scales but has enormous ramifications for the US and the rest of the word:

Step 1: Person wants to buy a house (or a car, or a boat, or whatever).

Step 2: Person can’t normally afford to buy the house they want to buy.

Step 3: Lending company offers them an awesome “adjustable rate” loan so that they can afford the house.

Step 4: Rates skyrocket, making payments impossible, and the house gets foreclosed.

This happened literally millions of times all across the US. It’s obviously bad for the homeowner because they lose their house (and the payments they already made), but, as we now see, when enough people cannot afford to pay back their loans, the lending company too runs out of money and goes bankrupt. In some cases, these lending companies were well aware that the homeowners could not afford their loans, and relied on the fact that they could get at least partial payment for the house, and then resell it on the market when the loan was defaulted. Other times, they gave uneducated homeowners great-sounding deals with rates that increased to absurdly impossible rates, up to 300% (interest, not increase!) in some cases. This is called predatory lending, and it went on for years all around the nation without anyone crying foul.
On a larger scale, these loans ended up seriously hurting the lending companies. Fannie Mae and Freddie Mac, two of the largest lending companies in the US, recently were bailed out by the federal government (and your taxpayer money) so they wouldn’t go bankrupt. But this isn’t a trend that could continue- we cannot keep paying for companies that screwed up, even if the economic consequences are dire. So when Lehman Brothers reached the edge, no one was there to keep it from destruction. The result is what Alan Greenspan declared “by far the worst economy I have ever seen.”

All of this could have been avoided with more regulation. Everyone is always terrified by government intervention, but it is cases like this that prove it is necessary. My general complaint with free market capitalism is that it overwhelmingly favors the rich- those who can afford to play the markets. But here, we can see that it didn’t even do that- everyone was screwed over by what John McCain called “Wall Street greed, irresponsibility, and corruption”. The problem is that Wall Street is SUPPOSED to be greedy. That’s the nature of profit-making. Wall Street has no need nor desire for a conscience. That is what government is FOR- looking out for those whom Wall Street will not. The government protects and serves the people. And in this case, as in many other cases, the government’s free market policies failed. And nothing in the policies of John McCain, a man who continues to insist that “the fundamentals of our economy are strong,” and whose top economic advisor insists that our problems are “just in our heads,” would change that.

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Catching Up- Who the hell is Sarah Palin?!

My apologies for not updating recently. I have been off in the magical land of “college,” full of all sorts of mythical challenges including “reading like a million pages a day” and “barely being able to afford food.” But now I am back, so we shall begin.
There’s a lot of information floating around about Sarah Palin. When I first heard she was John McCain’s VP pick, my (early morning, semi-awake) stream of consciousness went something like this:

1. Is this a joke?

2. Why would all the news networks conspire to report such a dumb joke?

John McCain introduces Sarah Palin as his runningmate

John McCain introduces Sarah Palin as his running mate.

3. I hate her voice.

4. Isn’t she under investigation?

5. Isn’t she like, terribly inexperienced?

6. WORST PICK EVER.

Of course, one woman’s terrible VP pick is apparently another person’s treasure, which is why her pick has been described as a “brilliant” but “risky” choice by some, and McCain’s numbers have shot up recently (also due to a probable “convention bounce“).

I’m still stuck in the mentality of #6, though. Let’s take a look at Ms. Palin:

1. She calls herself a “hockey mom” and “got her start” working in the PTA.

This is all well and fine, although none of these make her particularly qualified for president. If they did, my mom could do the job just as well.

2. She ran for mayor of the town of Wasilla, population approximately 6000. The Frontiersman (the local newspaper) reports that:
“When asked how she would run the city without experienced department heads, she responded, ‘It’s not rocket science. It’s $6 million and 53 employees.’ “[Seattle Times]

She later (at the RNC) compared this experience to Barack Obama’s as a community organizer. I have a few issues with this:

  • Community organizer was one of Barack Obama’s first jobs. This is sort of like saying I’m inexperienced because I one time worked at Jamba Juice, and her job of mayor was much harder.
  • Cesar Chavez was a community organizer. Martin Luther King, Jr. was a community organizer. JESUS was a community organizer. Just because you don’t know what it is doesn’t mean its a worthless position.
  • If you don’t know what it is, maybe do a little research? Perhaps read Obama’s book Dreams from My Father, in which Obama describes his tasks as an organizer, which included improving the housing situation for hundreds of people in the poor parts of Chicago.
  • How the hell do you make helping poor people sound like a bad thing?
  • Even if we say that Obama’s job as a community organizer did not prepare him for the presidency, we are forgetting that he was later in the Illinois State Legislature and then IN THE SENATE.

3. She is FANTASTICALLY inexperienced. And not in a good way. Let’s break it down:

She has LESS THAN 2 years of experience as governor. In these two years:

  • She was commander of the Alaskan National Guard, which the McCain campaign claims to give her foreign policy and executive experience. However:

Since governors have no role in overseeing Guard members federalized for service in Iraq, military experts said that should not count as foreign policy experience.

Furthermore:

Closer to home, the bread-and-butter duties of most state National Guards are natural disasters. During Palin’s 21 months in office, there has been one declared disaster: widespread flooding in June and July this year. Palin quickly signed a disaster declaration, officials said. The Guard’s role was limited to providing two water tanks and 30,000 sandbags to local authorities. [LA Times]

  • She claimed at the RNC that she said “no” to the Bridge to Nowhere. This is, of course, after she said “yes” to the Bridge to Nowhere.

…political leaders of both parties said the claim was false and a betrayal of their community, because she had supported the bridge and the earmark for it secured by Alaska’s Congressional delegation during her run for governor.

The best part?

The state, however, never gave back any of the money that was originally earmarked for the Gravina Island bridge, said Weinstein and Elerding. [Reuters]

  • She is currently under investigation:

The legislative council approved 100,000 dollars for the investigation that will find out whether Palin was angry at Monegan for not firing an Alaska State Trooper who went through a messy divorce with Palin’s sister…

Legislators approved hiring a special investigator to look into the controversial firing of former Public Safety Commissioner Walt Monegan. Monegan was fired two weeks ago without explanation and has said he was pressured by the governor and her staff to fire a trooper who was once married to Palin’s sister.Accusations have risen that Monegan was fired for his refusal to fire trooper Michael Wooten. The council’s intent is to investigate the circumstances and events surrounding the termination of Monegan and potential abuses of power and improper action by the Governor and her administration. [KTVA]

  • She was an enthusiastic member of the Alaskan Independence Party, a group in Alaska that has the ultimate goal of the state seceding from the United States.

“Keep up the good work,” Sarah Palin told members of the Alaskan Independence Party in a videotaped speech to their convention six months ago in Fairbanks. She wished the party luck on what she called its “inspiring convention.”

The Alaskan Independence Party, founded in 1978, initially promoted “the Alaskan independence movement.” But now, according to its website, “its primary goal is merely a vote on secession.” [LA Times]

This is spectacularly ironic, since she is running on which a main campaign tactic, publicly or otherwise, has been to question Barack Obama’s loyalty to the United States.

  • She claims that as VP she will be an outspoken advocate for education and kids with special needs (as mentioned in the comments), but:

Before her run for the vice presidency, advocacy for special needs programs had not been a central part of her political campaigns or during her administration, despite her sister’s autistic son. [CNN]

4. But let’s get back to the Alaska thing. Here’s a few facts about the state:

Population: about 680,000

All right, that’s actually the only part I care about. Less than 700,000 people. The following cities have larger populations than all of Alaska:

New York

Los Angeles

Chicago

Houston

Phoenix

Philadelphia

San Antonio

San Diego

Dallas

San Jose

Detroit

Jacksonville

Indianapolis

[Wikipedia]

Not only does Sarah Palin lack foreign policy experience, she is the governor of a state that has fewer people than 13 major American cities. This is not to downplay the state of Alaska, since obviously it holds in its snowy bosom a favorite thing of all Republicans: oil. But the fact is, the state is not a huge economic powerhouse. Nor is it a huge political powerhouse. My point is that being governor of Alaska is simply not experience enough to become president.

To be fair, though, its no wonder McCain chose her, since he did so little research to look into who she actually is. Can you imagine how little thought McCain might put into important positions such as the Secretary of State, or Supreme Court justices? [NY Times]

To summarize, Sarah Palin has zero foreign policy experience, very little national policy experience (unless you consider getting enormous amounts of pork-y funding for your state national policy experience). And yet John McCain, potentially the oldest first-term president in American history, has put her one step away from being Commander in Chief. She is a no good, very bad, terrible pick, and if her selection process was any indication, McCain shouldn’t be president either.

Oh, and one more thing. If you’re still convinced that Sarah Palin can do a good job as vice president, you should probably tell her what a VP does, because she doesn’t even know.

——

By the way, everyone should read this awesome article by feminist icon Gloria Steinem in the LA Times titled “Wrong Woman, Wrong Message.” It will be a good wakeup call for anyone who thinks that having Palin on the ticket is good for women.

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On Elitism

Politicians are not normal people. It takes a special kind of person to run for office, one with an incredible amount of confidence- “arrogance”, if you will- and a belief that they are the best person for the job at which so many have had problems. For these reasons alone, it is ridiculous to for a candidate- running for president, no less- to call another candidate “elitist.” Of course he is elitist. So are you. I am, of course, not referring to any two candidates in particular.

The most comical part of this whole exchange has been the comments leading up to it.

1) In a forum at Saddleback Church in Southern California a couple of days ago, when asked what he considered “rich,” John McCain responded that the term can be applied to anyone who makes more than FIVE MILLION DOLLARS a year.

2) Today, when asked how many houses he owns, he responded that he didn’t know and “would have his staff get back” to the inquiring reporter

3) When Obama started using the “houses” statement in ads, McCain’s spokesman responded:

Does a guy who made more than $4 million last year, just got back from vacation on a private beach in Hawaii and bought his own million-dollar mansion with the help of a convicted felon really want to get into a debate about houses? Does a guy who worries about the price of arugula and thinks regular people “cling” to guns and religion in the face of economic hardship really want to have a debate about who’s in touch with regular Americans?

By 100% non-partisan logic, therefore, Barack Obama is not rich, but by virtue of “only” making $4 million a year, just middle class. What kind of elitist does that make him?

So Obama isn’t rich, and McCain has so many houses that he can’t keep track. Which sounds more elitist to you?

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That’s My Baby! A roundup of anything interesting, stupid, or funny around the web

This is a continuation of a feature that I started a couple of weeks ago and will continue to continue… whenever I feel like it. Here we goooo:

My personal favorite blog, Wonkette, has a great way to freak out your Obamaniacal friends with a fake text message announcing his VP as…. Michael Moore! Or whoever else you want. [Wonkette]

John McCain is gaining ground in national polls– a result of his performance at the Saddleback Church event? Of people getting tired of Obama? Or something else? Will this climb continue? This whole thing makes me nervous…. [Pollster.com]

Rudy Guiliani is set to be the keynote speaker at the Republican National Convention, as Republicans are trying to live their post-9/11 days of domination. Did I mention that Giuliani was the mayor then?! Former Democrat and winner of the Benedict Arnold Prize for Bipartisanship, Senator Joseph Lieberman will also speak. [HuffPo]

If you want to learn more about Obama but wish you could be taught in your native language of “frat boy,” Brobama has your back. Learn about the issues and how they apply to you, the common bro. [Brobama]

Check out these TRULY, TRULY awesome buttons from Democratic Stuff: Bug Enthusiasts for Obama! Mohawks for Obama! Oil Barons for Obama! Etc Etc Etc- check it out- all 3 pages. [Democratic Stuff]

Anything else?

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Every Four Years

I have Olympic fever, and I am not ashamed to admit it. It’s a devastating disease- I have been known to turn down meeting with friends in order to watch the Games- and yet one that I have no intention of curing.

He's running for me!

The Olympics are fascinating to me for many reasons, including the fact that I am freakishly competitive. I also love sports, and men without shirts. But most of all, I love the idea that countries, sometimes in the middle of civil wars, governmental instability, and more, can come together and compete. I love that (almost) every nation (and Puerto Rico!) is represented, and that athletes have a uncanny ability to make their fellow countrypeople proud.

Or at least this is the effect the Olympics have on me. On Tuesday night I watched Michael Phelps, Jason Lezak, and the rest of the men’s 4 x 100 freestyle swim team pull off a truly miraculous come-from-behind gold medal win. On the inside I was screaming, jumping up and down, and waving an enormous American flag at the top of the Statue of Liberty- even if on the outside I only was sitting on my couch, cursing and yelling at a TV screen. Last night, I was living and dying by the U.S. men’s gymnastics team’s pommel horse performances. Despite the fact that I don’t know any of these athletes, at the Olympics I watch them with the same nerve and emotional attachment as I would a family member.

Meanwhile, outside of the frantic Beijing bubble, China continues to commit serious human rights abuses in places like Tibet, and fund them in Darfur. Even inside it, they have blocked foreign journalists’ access to websites including those belonging to Amnesty International and controversial religious group Falun Gong.

It’s a stark contrast. The Olympics bring us stories like this, the real world, this. But China will be disappointed to know that the Olympics do not exist to cover up, or even overshadow, international stories. The spectacular Opening Ceremony will not mean that China can escape some responsibility for the atrocities in Darfur, and, although coverage has been waning over the last few days, people will not forget about Tibet. Rather, these stories are approached in a different way at the Olympics. Through the Olympics we come to appreciate the power of the truly amazing men and women around the world that we would otherwise not know existed. Through the Olympics we see past the showboating and chest-puffing of governments and bear witness to the vulnerability of our fellow human beings- and nothing makes us more united.

International relations-from the UN to NATO, from China to the US to Darfur- at its core, is glorified group therapy. A former diplomat that I once heard speak described how he once was in the middle of a really difficult negotiation session: the two parties just could not agree, could not even find common ground- everyone was tired and ready to give up. Then they brought out the alcohol. People began to talk about their families. They came out of their emotionless, suit-and-tie shells and began to loosen up. They even began to sing. The result was that an agreement was reached, and each person left understanding that maybe the “foreigners” were not so foreign after all.

That’s what the Olympics do. They take away the boundaries, each country’s own Great Wall, if you will. One can only imagine how much better off the world would be if the negotiations were conducted by people willing to set themselves up for failure- or victory- as much as Olympic athletes. Maybe we’d see a little less war and a little more of this.

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From Me to You: Why Hillary Supporters Should Back Obama

So the media is blowing up over the idea that “embittered” Hillary Clinton supporters (affectionately called “Hilltards” by the Wonkette crowd) would be so angry at the DNC’s treatment of Clinton that they would vote for John McCain, who–get this– is a Republican.

I hope that these predictions do not come true, and I don’t believe they will. I have only encountered one person who, after Hillary lost, switched their allegiances. This person, “Mona,” responded to an email by the UC Berkeley campus coordinator who was trying to rally up support for Obama. Mona wrote (to everyone who received the original email):

When the leaders of the Democratic Party did not stand up to the Trinity Church of Chicago when they mocked Hillary Clinton and when they stayed silent while Randi Rhodes called her a f’ing whore and when the media disrespected her – they in turn showed me this is NOT a party I want to belong to.   Not only will I give my vote to John McCain I am seriously considering flying to a swing state – IF the race is close – which I doubt – to help GOTV on his behalf.  The DNC chose Barry before Country during the last 3 months of this race when she was kicking his ass.

When she was challenged by another person on the mailing list, she wrote back:

HILLARY HAS NOTHING TO DO WITH MY DECISION and to blame her is frankly immature and just another “scare” tactic.   I have a brain — I am a leader not a follower.  I make my own decisions.  When Hillary stepped down today that left me a free agent.  I didn’t believe in everything Hillary stood for, however, I stood by her.  I for one hope she’s NOT the VP – she outshines Barry – he needs her – not the other way around.

You don’t get IT – what I am standing up for is WOMEN TO BE TREATED FAIRLY and with RESPECT.  That’s the stance I am taking.  The leadership of the Democratic Party needs to take heed.  When they lose in November they can blame themselves.  I won’t stay in an abusive relationship.

The whole exchange was melodramatic and frankly sad- the culmination of almost a year of hard work leading to a rapid decline and then failure, resulting in in-fighting and finger-pointing.

I quote this email because it gives us a glimpse of the logic behind a Hillary->McCain supporter. Otherwise, I really can’t grasp why any Hillary fan- Democrat or otherwise- could think that McCain is the better choice.

I mean, really:

  • Hillary- Pro-choice
  • Obama- Pro-choice
  • McCain- Mostly pro-life
  • Hillary- Against the war
  • Obama- Against the war
  • McCain- For the war (“100 more years!”)
  • Hillary- Against Prop. 8 (CA Constitutional ban on gay marriage)
  • Obama- Against Prop. 8
  • McCain- Supports Prop. 8
  • Hillary– Supports habeas corpus rights for Guantanamo detainees
  • Obama– Supports habeas corpus rights for Guantanamo detainees
  • McCain– Against habeas corpus rights for Guantanamo detainees

…. the list could go on forever. The fact is, John McCain, while not maybe as truly terrible as some many most Republicans, he is still a Republican, which means, like it or not, he follows in the footsteps of George Walker Bush (remember him? the President?). Another Republican president not only means 4+ more years of Republicans claiming to represent mainstream America, it also  means Republican Supreme Court appointees (bring us even closer to the overturning of Roe v Wade), and the people who currently advise Bush on issues of foreign and domestic policy will just switch over to the McCain administration. We can’t have this happen.

Hillary Clinton supports Obama. I find it fascinating that Mona can be so enraged by the DNC’s alleged maltreatment of Clinton and then completely disregard the endorsement of the woman she so passionately admires. Furthermore, the idea that Mona is somehow punishing the DNC by voting for McCain is both delusional and self-important. She seems to miss the fact that she is hurting herself and the very rights she supported when voting for Hillary by voting for the Republican party- and therefore against abortion, gay marriage, and, most tragically, the Constitution.

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Political Junkies, Unite!

I have been hearing about FiveThirtyEight.com for a while now, but I until today I had never visited it. I stumbled across it today, and was amazed. Amongst other things, the site contains up-to-date statistics of:

– Every possible outcome of the 2008 Presidential election, and the likelihood each happens

– The likelihood of any particular state making the difference in the race

– The likelihood of each candidate winning each state

– A trend tracker

Seriously, it’s both ridiculous and beautiful. If you like number-crunching or just dying for November to come around, you should definitely check out this site.

P.S. I’m not getting paid for this- but it would be cool if I was.

EDIT 7/31/08: Commenter (and friend of Kantankerations) Steve S. brought up another cool site: Hominid Views. I love any site that tells me Barack Obama has a 99.97% chance of winning- check it out.

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