Friday, February 27, 2009

Obama Shows us some change

It is a great feeling to see the budget actually include everything we need to spend as a nation in one place instead of the shell game that the last administration played since the 2003. It is also great to the see the shift towards more logic driven policy funding, it is the best way to avoid situations that result from ideologically driven policies such as the "ownership society" that was the genesis of the housing bubble.(

This isn't going to be an easy or short trip from the Greenspan driven "self-regulating markets", another ideological misstep that lasted past Reagan for another two decades mainly due to most people hoping that the myth that markets had an inherent morality that would create a fair work place. Despite the evidence ( of an increasing inequality in income and mounting debt requirements of the lower and middle income earners the idea that this "rugged individualist" was how society work.

This was wrong, both currently and historically, the countries that have the highest "happiness rating" ( also have the highest levels of common interests, elevating the provision of care to people that are not coping with the challenges of life as well as most. Reaching that level of common caring is very difficult for the US as the diversity that has lead to our innovation also come with elements that make it harder to integrate concerns and causes.

No one likes to feel they are biased but tests tell a different story, if you don't believe me try a few, ( and don't get angry if the tests show something that you don't like, use the knowledge to change the way that you react in the next situation that may be affected by a biased decision or reaction.

The reason that this primer on bias was inserted into a post on the budget is that a key component of acceptance of any proposal is fairness, and biases are at the center of biases, one way that biases express themselves in society is in the validation of self entitlement based on race, gender, physical characteristics and handicaps, religion, ethnicity, geography, or culture.

We need to look at the budget at a kitchen table of 300,000,000 and counting and agree to find a way to help those that need it, reducing suffering first and increasing opportunity as close to simultaneous as can be managed. Will it be fair on an individual basis? Most likely not, we have a tax system based on proportionality and that can be a tough concept for some people to grasp, talk to a "flat tax" advocate and you'll see what that means.

The right question to ask is if the country, and indeed the world, is served by this budget as well as we can tell at this time. It should always come with a set of Key Performance Indicators to avoid floating objects, and be adjusted if the facts are showing that a change in the situation or an erroneous assumption has altered the need.

This kind of societal focus driven by an effective government of the people has been seen before, here and around the world, and this is a time for the concept to go global. There is no better way forward than with objectives aligned, self interest tempered and a concern for all future generations.

Friday, February 6, 2009

Forgive the Young and Those seeking knowledge.

This is my second post on the idea of asking the government to forgive all student loans as part if the stimulus spending, the first post dealt mainly with the logical reasons, and there will be more of that in this post.

The main purpose for the second in this series that could be titled “Let’s help people that were more victims that perpetrators”, is to focus on the moral imperative that we have as an adult generation to right the wrongs of the financial debacle created by the need to get an education past high school to earn a living wage and the banking industry’s exploitation of our youth on every complicit campus.

At the root of the problem is the exact same factor that drove the housing bubble, a financial opportunity for bankers and lenders fueled by the pursuit of the “American Dream”, a good dream that we all understand and appreciate emotionally. In fact, it was this emotional component enhanced with it’s own urban myths, “look at history, the more education the more money you will make, paying it back will be easy”, recognize the parallel between this claim and “Housing Prices Always Go Up?

If you do see the comparison it should come as no surprise, the same cast of characters were running the same scam, only this time instead of lower income blue collar workers and envious professionals keeping up with the Jones the targets were young students and their optimistic parents, who couldn’t say no to private schools they couldn’t really afford.

Driven and manipulated by their desires to compete and get into the schools on the “lists” people looked back decades and assumed that the past would predict the future, and in this case again that turned out to be a poor strategy.

The results for the financial institutions were the same sweet ride as housing, the false market they created with the loans did what economics 101 tells you it always will, it increase demand and therefore prices. A Lot, I mean at least double the rate of inflation, at the same time the market value of college degrees (outside of the fantasy land of Wall Street, until recently) were going down.

Bankers knew this, colleges knew this, some parents knew this (some still couldn’t say no, college search has become more emotional than logical), but since the kids could get the money themselves, and the banks were there to help with the forms, adding a credit card in for good measure (and 24% APR), they preyed on the youth of American like vultures on the buffalo shot from trains, with equal concern or remorse.

This is an evil act, worse than terrorism, at least they tell us they want our heads, whereas the banking community pretends to be helping us as they remodel million dollar offices, fly in private jets and hold parties that would make Croesus blush.

So what to do? Get mad, write your reps and senators and tell them before another dime goes to the perps we want a little to go the victims, the most innocent victims, the future of our country! Forgiveness will get our young folks back to spending on what’s next, instead of decades on an overprices product sold in a ponzi scheme every bit as heinous as Bernie Madoff’s grand rip off, and those investors were supposed to be experts. If you feel one iota of sympathy for those damaged by Madoff then you have to feel for the debt-laden kids.