20 November 2008

Insufficient Funds.

Well, we have to have spending priorities, or we're going to see that phrase a lot. Worse still, having "insufficient funds" doesn't get you out of the overdraft charges. Oh... and even worse still, in this beautiful day of electronic banking, your checks can get bounced about a billion times before you figure out what's going on and do whatever it is you have to do to rectify the situation.

I find the financial world befuddling. Perhaps that's why I vote more on social issues than whether my economics trickle down from some rich guy who buys property in Montana. I'm figuring if you're honest, forthright and moral, you can't go far wrong. Though I'm sure there are plenty of honest, forthright and moral people in poverty. I just like to think that they don't maliciously pass bad checks in their personal lives, and wouldn't want to bankrupt our country. Well, I think that.

Now, I'm not saying there aren't certain economic principles out there that really work. More that, the more I understand about markets and demand, the more I realize that these experts are really just taking educated guesses when they appear on TV and tell us how "the economy" is going to do.

"The economy." It's just so nebulous to me. Suppose about ten million people make Big American Widgets at various US companies, but no one wants to buy widgets this year from American suppliers. OH NO. The companies spent years designing the thing in their own versions and rigging the assembly lines across the US to make this kind of widget. They can't just make a different kind tomorrow, or tell their workers they are now earning three dollars an hour because that's all their labour is really worth in this market. ("Hey, supply and demand, baby. Tough noogie." See how well that goes over with the Feds... they get picky like that.)

They need some help from the government or they're going to go under. Let's not kid ourselves and think that it won't affect YOU when all those workers can't buy groceries or pay their mortgages.

But we can't stop there. Big American Mortgage companies and "Home Equity" companies and "Home Improvement" companies need money, too. People need to get back taking out Big American Mortgages and "Home Equity" loans so they can go back to buying Big American Widgets. BIG AMERICAN WIDGETS needs help NOW!!

And you know, I don't think that by "widgets," I mean just fancy cars. I think the problem comes from overspending, period. You want what you don't have and use credit to get it. I know I sure do, or I wouldn't have a house to live in. I'd be in some slummy apartment, paying way more than the place is really worth on a month-to-month basis because I couldn't scrape together $150,000 cash to plunk down all at once.

So here's what we did. We figured that we'd take a chance and buy a house. (Well, we got a mortgage and I guess we own about half of it now. Um... maybe a lot less if things keep going downhill.) We knew when we bought the house that home values could go down. Yes, we did. I don't know where all these stupid people the newscasters come up with went to school, but it's just such a basic concept that no one should leave the eighth grade without understanding that commodities can go up or down in value. "Value" simply means, "what others are willing to pay for something." And guess what? At least so far here in America, no one is mandating that I personally go out and buy a product or else.

Oh, wait. Yes, they do. It's called auto insurance. Well, scrap that. You knew what I meant, though.

But widgets! What's the solution to get everyone to buy American products?

6 comments:

  1. "They need some help from the government or they're going to go under. Let's not kid ourselves and think that it won't affect YOU when all those workers can't buy groceries or pay their mortgages."

    I've been thinking about this some and if it were my husband's job on the line I may not be so anti-bailout.

    However, if Big American Widgets is bailed out and they don't do anything differently, they're still going to go under, just in 5 years instead of next week. I liken the bankruptcy option to surgery for a cancer patient (Well, actually Glenn Beck said it, but I agree with him). If they file bankruptcy, it will hurt, and it will cost jobs, but at least they can restructure, get healthy, and more importantly, be in a position to renegotiate the ridiculous promises they've made to the United Widget Workers Union, which is really what is causing the bulk of the problem and costing them billions each year.

    No easy answers here. I partly agree with you, but the truth is that bailing out Big American Widgets is simply delaying the inevitable.

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  2. I think Big American Widgets might qualify for a bail-out once all its books are investigated, all its corporate officers and board members are fired - and they must return their bonuses. Anything belonging to them - cars - homes - planes but paid for by the company must be sold.

    Then a bailout would have a chance. All board meetings must be open and televised on C-Span and an independant auditor must sign all the checks.

    It's not unions that are killing us it is greedy executives who have gotten away with far too much for far too long.

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  3. See, I think once the government gets involved and spends our money on something, they'd have every right to have a say in how it's spent and what you do to receive it.

    ONE of the big reasons I'm against national healthcare. Just think what they might do to parents who have a conscientious objection to this or that. They could lose their insurance or their children.

    BUT I will say that the government owning this or that is nothing new and oughtn't NECESSARILY be viewed as socialistic. I think back to the time where the people willingly gave Pharoah their land just to eat. Then they were pretty well the government's slaves.

    Um...

    Maybe I don't want to get too deep into that right now. :]

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  4. Oh! And I forgot to add...

    Terry, I think if we've been overspending, and the economy is now DEPENDENT on our overspending, that's exactly where we're headed. We need some really big spenders out there to plunk down ridiculous amounts of money on about everything there is out there. Oh, but it can't be on credit. We just need a lot of spend-happy people with lots of cash.

    :] Where are they?

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  5. Standing in line this morning waiting to buy a Blackberry Storm!

    That's where they are. I thought we were in a recession? But I digress.

    I agree with Dianne aabout corporate CEO greed. However, there is NO company under the sun that can survive when they are paying full pension and benefits for retired associates as well as current workers. It's a recipe for disaster. And even under the threat of all that could be ahead, the United Widget Workers refuse to, FOR THE SAKE OF THEIR MEMBERS, understand that times have changed, the economy has changed, and as such, their expectations need to be much more reasonable.

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  6. Freedom. That's what it boils down to. In completely free markets, there is no corporate greed. A company that has greedy corporates won't last. It would be inefficient and if the greedy ones didn't get "ungreedy" then a company would come along that was more efficient and it would outdo the company with the greedy folks.

    What will it take for me to buy American? A good quality product that has the lowest cost! I don't care about paying a price that covers a company's "greedy corporate" salaries or union expenses.

    If the government interferes any more than it already has in the economy we'll really be in big trouble. Why should the government bail out an industry that made bad business decisions? Won't bailing it out just be a license to make more bad decisions? Worse yet.. how about Michael Moore's suggestions on Larry King that the gov. bail out the industry, but then make mandates that mass-transit vehicles be produced and fuel efficient vehicles!? Kinda sounds like the planned economy of the USSR. Where is the freedom there?

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Non-troll comments always welcome! :)