Monday, December 1, 2008

Banks and Credit Cards...the Next Bailout

I really AM trying to find and write on more positive news and ideas...but today's combination of crisis economically, politically and even natural disasters forces us to look realistically at what is going on around us and motivates us to plan or adjust based on the facts and trends at hand.

This Op-Ed last week in NYTimes brings to consideration the next shoe to drop in the USA economic crisis. The circle of financial collapse in the USA is not close to terminating yet. Round one has been a combination of Wall Street corporate America and the USA government’s mis-managing and mis-appropriating BILLIONS of dollars of income from taxpayers and consumers...and now asking the US Taxpayer to bail out all these major corporate institutions PLUS the government behind them. Yet, the fallacious part of this agenda is where this bailout money will come from.

Let's face it; the government only has a couple sources of funds...we taxpayers and possibly the "spoils of war". Yet, it seems we fight wars without any of the spoils these days accept for the billions exchanged between the government fighting machine and the private military industrial complex that sells to the government to propagate these wars (oops...I'm sorry. We don't have declared "wars" anymore, just regional conflicts). Of course, many of our elected leaders profit from funds or even "blind ownership" in many of these private one could argue, "conflicts" are good for THEM. But, to get back on track, where does all this money for wars and bailouts come from? The TAXPAYERS! To my knowledge we are getting no payments from Iraqi oil in return for our defense of their country and "freedoms". What spoils of war are we gaining in Afghanistan...and why stop there...what are we gaining from the BILLIONS we spend fighting drug cartels and dealers? I see no progress, I see no gains.

So...if all of these wars and bailouts are on the backs of the USA tax system, it seems quite logical that we need to look at the economic condition and "credit worthiness" of American business and taxpayers. With many personal portfolios dropping in value 40-50% at least on "paper" in the current stock market recession, and businesses cutting back, cutting jobs and seeing less profits because of the sudden reversals in "consumerism"...just where is government going to find resources for current and future "bailout" needs? And who is to blame for being in this predicament?

Going back to core reasons and values, I think the finger points back to each of us Americans who have bought into the spirit of consumerism and sold our souls to easy credit and "keeping up with the Jones". As long as we have had low unemployment and easy credit, we have been mostly focused on OURSELVES, our image, and blindly trusted our government and financial institutions to be there for us when needed. We have made large tax contributions to government and paid large interest to these financial institutions. In return they almost jointly market back to us the pressure to buy buy buy, borrow borrow borrow, until the point where they "own" us. Is it only me who sees the lunacy of this circle where we are offered contracts on TV and in the mail constantly urging us to slit our own financial the same institutions and government that COUNTS ON our profitability and savings for income that fuels all this activity?

In short, what we have here is the next reality of what I fear will be a long term "reality check" for our country and its institutions. And this reality will affect the whole global economy, so EVERYONE should prepare and or adjust for the storm. Because when the consumers come knocking on governments door for relief of THEIR historical financial mistakes, any remaining funds that came off their backs in the first place will have already been raided by the very institutions and government that offered them all these "benefits" for decades. There is no such thing as "free money", and it is going to take each of us individually protecting and adjusting OURSELVES to protect from the oncoming devastation of our own past actions and/or inactions.

I am afraid we are in for a long needed re-education that "A is A" (see my previous blog on "Objectivity"). Sometime in life the math always adds up. Action-RE Action. We need to plan and get back to analyzing some of those very basic realities. It is time to cut bait with cards, home and car loans, and for sure retail spending. And if many of us do this, it will unfortunately speed up the process of financial devastation to the financial markets and the government least in the short term. It will be a tough number of years. But SOMEHOW we have to take back our individual responsibility and sovereignty over our own fates. WE have to tell the government what we will and will not accept...after all, they are just OUR representatives, right? Only when we are able to once again build and save for OURSELVES and our security will we be able to rebuild true wealth and security. All of these short term bailouts and gyrations in the markets are basically temporary Band-Aids over the true gaping wounds of our reality. It is time for each of us to do our own part to weather the storm and survive. And, I'm sorry to say, it may mean following the rich to investments and holding patterns financially OUTSide of the USA system that has now revealed its true, dysfunctional head.

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