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I enjoy using hyperlinks to add humor to my work, but much of what I referenced has since passed away, just like tamethebear. I've updated what I can, and removed the dead wood where necessary, but all is not as it once was.

The Rules
By Michele Kraft February 12, 2009

You and I have rules in our lives. We don’t even think about them. When we have a little oversight that results in a big overdraft, we expect to be fined. When we get behind on payments, we expect our credit will get dinged up. We know the rules.

Now the people who are so good at making harsh, punitive rules for us to follow, the banking industry, are suddenly jumping to lay down some new rules for themselves. Mark T. Williams, an expert in risk management and former Federal Reserve Bank examiner, had some interesting comments in the Washpo’s article, Banks to Assure Congress About Use of Public Funds :

“Wall Street has recently begun to elevate the importance of risk management as a good business practice”

Later in the article, he’s quoted calling this phenomenon the “return of the nerds”.

The sudden return, of what I would not call nerds but sanity, is in response to recent public outcry over the bank bailouts and the realization that enormous sums of our money have been handed over, without oversight or demands, to an industry full of people who were not even following the same basic rules we are forced by them to live by. Little things like keeping track of one’s money. Making sure it all adds up. Not making stupid choices.

Now scrambling to do the kind of self-regulation it was assumed they were doing all along, bankers, like children who want to set their own bedtimes, are resisting regulations imposed by we, the people who are so kindly bailing out their failed businesses.

Oversight, transparency and regulations need to be in place to protect everyone, even the greedy from themselves.

It is human nature to take as much as we think we can get away with. When did we start believing that people in the banking industry are made of different meat than the rest of us?

Kill the Zombie
by Michele Kraft, March 27, 2009

With the New York Times editorial staff screaming about Geithner’s regulatory reform ideas, I expected, with my belief in the power of Obama's oversight, that when I read the primary sources I would be relieved to find a silver lining. I encourage you to have a look yourself: Treasury Outlines Framework of Regulatory Reform (dead link) and Treasury Secretary Tim Geithner Written Testimony House Finance Services Committee Hearing.(dead link)

As outlined in Obama's campaign and in his frequent addresses, I expected his man Gatherer’s main thrust would focus on doing right for American citizens.

Instead, I am alarmed that the NYT editorial critiques don’t scream loud enough, except, perhaps Krugman’s.

Yes, Krugs is right again. The zombies have won, and despair is appropriate.  

Rather than addressing the big, honking root of the problem, that we have financial institutions that are so large that if they fail, they bring the world to its knees, Geithner hopes to create a regulatory body to keep the monster in check.

How do you discipline your master, Mr. Geithner? We are at the mercy, entirely, of these financial giants and Geithner’s plan is more evidence of that fact.

Throwing petty regulations at their feet will be as effective as tossing tacks in the path of the zombie. The financial lobby will write the legislation, as has been the case since at least the Reagan administration. We will have more bubble economies, bailouts of the wealthy, followed by unemployment that widens the gap between the rich and the poor.

I don’t think the multinationals are specifically trying to kill off the regular people, these corporations are just like every other multi-celled organism, they want what they believe is the best for themselves and they are in an excellent position to achieve it.

We don’t need the complex web of regulations Geithner endorses to micromanage the financial industry, we need to restructure how we do business in this country and around the world.

It is my Polly-Anna-Sunshine hope that grassroots groups from all points of the political spectrum can get together and fundamentally change the way we do business. We don’t even have to agree on why.

Complex laws beg to be broken, worked around, and have sneaky bits of legislation tacked on to them. This is what people who are actually conservative, and not just front men for global conglomerate interests get their panties in a bunch over- complexity- government intervention.

Progressives should rally against it because it protects the very object that has brought the citizenry to our current abyss of pain- the power of big money. Financial groups have been granted rights that supercede the needs of the people, and in no way serve the people.

Getting the legislation behind this kind of thinking is an impossible dream, I know. But then again, I thought an African American president was too.

Barrack, I know you’ve got a lot on your plate, and it looks like you’re handing this financial mess off to someone you thought was qualified, who shared your vision or at least would take your direction. I know you meant well. But you have a fox in hen’s clothing on your hands, and you must get rid of him.

Money for Nothing
By Michele Kraft March 17, 2009

As outlined on a previous post, AIG is blindly defending distributing bonuses to some of those in the chain of responsibility for ruining the world economy. They didn’t change the rules to make it happen, but they did the deals and grew quite rich themselves. Naturally, they are not giving it up without a fight.  

In reading AIG CEO Edward Liddy’s letter to Geithner explaining how his hands were tied, it occurred to me that the United Auto Workers need to find the lawyers who wrote these air-tight contracts and hire them immediately.

AIG executives don’t even need the power of a union to back them up. Their boss is the one going to the mat for them. Blue-collar workers, for whom the dollars are much smaller, yet more desperately vital, have no resolute backing of compensation packages. It seems auto industry executives, instead of citing the lack of protective tariffs they used to enjoy, have made every attempt to shove the blame for their downturn onto the backs of their workers.

Even so, where does the money end up when it is paid to those already fabulously wealthy? Some of it buys cars and bling, but the rest of it is invested in the next bubble economy, which will burst as all the others have.

UAW pay goes right back out to the economy- to the grocery store, to Farm and Fleet, Walgreens, Sears. When workers are paid, when there is a productive middle class, the economy flourishes. The fabulously wealthy can still be fabulously wealthy, but they need all of us to be doing well so they have a base of real money to make money from.

The wealth of the middle class is the basis for all wealth in our country, not subject to fleeting investments and ponzi schemes. This wealth is goods and services, a gallon of milk, a loaf of bread, and the farmer that produced the materials to make these things.

Making money out of handling money this way is slight-of-hand theft. It doesn’t produce anything as it turns out, not even more cash.


Deficit Bad
By Michele Kraft March 2, 2009

I have been hearing some generalized freaking out about the budget deficit, haven’t you? We should not have a budget deficit. Deficit bad. But how bad, on the scale of “meh” to “OMFG” is this one? Let’s get some historical perspective.

In 1943, we were in the middle of waging World War II. ’43 was the most expensive year of the war for us. In the years leading up to our commitment of troops to the war there were a fairly large number of isolationists and even Nazi supporters who were strongly opposed to jumping into the fray, for financial and ideological reasons. We tend to glorify WWII in hindsight and overlook how many Americans were adamant that we were falling off some horrible cliff by getting involved.

The budget deficit in 1943 was -31% of our gross domestic product. That is pretty huge. Now history is on the side of those who felt we should take action regardless of the expense.

Today, the wars we are embroiled in are a side dish to the economic troubles we, and the rest of the world, face. Our budget deficit is the largest it has been since 1943. That is scary and it should be. Our inner threat level should be on flaming fuchsia because of it, but how does this deficit measure up to the numbers in 1943? Today our deficit, measured against the current gross domestic product, is about a third of what it was back then at -12%.

We have big problems, problems as deep and as likely to reshuffle the social order as much as Nazi and Japanese world domination would have. By 1947, we had a budget surplus. We had survived, after rolling the dice and spending a third of our GDP on a war. We emerged from that war a new vision o f what a country could be- a country that was respected and admired around the world. We became a leader in our own right, stepping out of our isolationist struggle and onto the world stage.

We are in a similar struggle today as we were in the early 1940s. We are taking big risks that will reshuffle the deck. Things may not go our way this time, but I am not prepared for my government to sit around and do nothing.

Obstructionists, like the isolationists of the 1940s, cling to the notion that individual people, without the power of our combined efforts under the umbrella of government, will somehow rise up to solve our economic problems. Louisiana’s governor Rising Star repeatedly stated in his rebuttal to Obama’s speech that individual Americans can do anything. His clear implication: we individuals do not need government help, as if our government was an alien system dropped on our heads from Mars.

We are the government. Believing that we, our government, cannot work, that we, in the form of a government, are somehow an impediment to progress is the ideology that brought us to this state. Getting Government “out of the way” has brought us a ruined economy, for what moved in when government moved out was greed.

No one is happy about the budget deficit. No one is happy about the economy. Many economists believe we are not doing enough. Yet we find conservatives throwing out alarmist propaganda to its shrinking constituency.

The rest of us are listening, watching, ready to take corrective action for ourselves, using the power of our government when the need arises. Yes. Deficit bad. But it is better than the alternative.

But the Headline is a Lie
By Michele Kraft, March 13, 2009

Having read quite a bit about what auto workers make when corporate jets were launched (with flying monkey escort) a few months ago, I knew right away the NYT headline U.A.W. Deal With Ford Cuts Hourly Rate to $55 was misleading pile at best. Anyone with marginal English language skills would interpret those words to mean Ford’s workers will now earn 55 dollars an hour. And that isn’t even close to true.

Remember hearing that autoworkers make 80 dollars an hour a few months ago? That figure flew for a day before it was downsized to the low 70s, but even that figure was trumpeted almost everywhere. NYT actually reported on how that figure was arrived at, after throwing it out there themselves, and that was helpful.

As shown in the instructive graphic, everyone who gets a paycheck racks up almost twice their hourly wage in costs like those listed.

I once worked in a sign shop and had a similar equation included with my paycheck one week, revealing my $8 an hour was actually $16. Of course, the gratitude that flowed through the shop afterwards was magical. The following week the entire staff was paraded out to the parking lot to admire the boss’s new luxury car. I am not making this up.

What troubles me is how this wage information is reported. I read a lot of headlines and don’t read the articles, and I know I am not alone. By burying the details of the information, sometimes in the last paragraph of an article, people are less likely to get the whole story. People who believe they are keeping up on current events by listening to radio news broadcasts and skimming the headlines are getting a much-filtered picture. We don’t have time to get to the bottom of everything and we rely on news media to give us the scoop.

As a writer, I know it is almost impossible to get the pointed information right out there in the first paragraph, or as is the case with the interwebs, in the first three words of the headline. We have to give a bit of background first, and what is the point of writing 500 words if all of the good stuff is in the first three?

However, like with the NYT article, the headline may be all a reader sees. She’ll go through her day not even consciously aware that she now believes autoworkers make $55 dollars an hour. She may repeat that figure over lunch as she frets about not getting a raise, not realizing she is participating in a very subtle war.

Information is tricky. If I only described the stripes on a zebra, you would think I was talking about a black pony.


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