Wednesday, March 18, 2009

Global Economic Collapse

First off, Bobo was 17 lbs 14 ounces. The ped thinks he's probably a few ounces shy of 18 lbs because of his bout of influenza. It put his growth on hold for a day or two. No big deal. Kid is still huge. 26". Which is odd since he was 26-1/2" two weeks ago, but measuring is hard. And I'll go with it since our baby bucket car seat only goes to 26". And I want him in the bucket.

On to the economy.... The following could be full of unpopular opinions, so I'll start by reminding everyone that I am a libertarian and pretty much think everyone should take care of themselves. That out of the way, here I go spewing my manifesto or something.

AIG Bonuses - These were contractually mandated by the pay structure. If the government didn't want them paid out, they should have put stipulations on the money before they gave it to AIG (or better still, not given AIG one red cent and let the company go bankrupt which would void all contracts and everything could be re-negotiated. This reminds me of a mom who gave her daughter a check to spend on her wedding. It was not enough to cover even half of it and she gave it to her daughter freely and without condition. And THEN, later, started telling her daughter what kind of wedding she had to have since the daughter was spending the mother's money. Ugh! Pay the bills directly, or put conditions on the money upfront. Barney Frank, (D-MA-4th Dist) I am looking at you Mr. Master Grandstander.

On Auto Execs taking private planes to DC to ask for money - OK, I understand that it looks bad. Taking a pay cut for yourself and promising to brown bag it to work every day would probably make some people feel better. But, let's talk about private jets. Let's say these guys make $1,000,000/year. Assume a 75-hour work week. They make $256 per hour. Standing in line at the Northwest Airlines counter, going through security, etc, takes time. And time is money. Plus, they had more than one guy flying to DC for this, so it might just be a little bit economical if the CEO and 2 VPs need to go to DC. Also, many of their employment contracts stipulate private plane travel (of course, they could waive that). And they don't make their own travel arrangements. Their secretaries contact the Corporate Travel Department who handles it. Their time is money and they don't spend their money on the Southwest Airlines website trying to figure out whether flying into BWI and renting a car to DC is the most cost-effective travel route.
Full Disclosure: Many years ago, when I was but a fresh-faced lass right out of college, I lobbied in DC. And I took a private jet. I'd leave for work at 7:30, fly to DC in my smart pants suit, face a full day of lobbying, lobbying, lobbying, fly home, and be back in time to have dinner for my husband on the table by 5 pm. A chauffer-driven car would be waiting for me at the private plane terminal. It would whisk me away to the lawyer or the Deparment of Commerce or wherever. Then I would head to "The Club" for lunch and back to wherever for an afternoon of stiflingly hot conference rooms. Once I saw Al Gore in the private jet terminal (he was in his fat, beard phase after his 2000 loss). I'd like to state that this was THE BEST JOB EVER. It was super hard and sometimes felt like beaurocratic drudgery but the perks were awesome. And the bathrooms were so clean. And they had hand lotion and mouth wash and free tampons because who wants to carry a tampon in her briefcase only to have it tumble out in front of the US Trade Representative. My point is that I was not making $200/hour and even I got to fly in a private jet.

On helping people who got behind on their mortgages: I'm sympathetic to their plight, but I feel as if they've gotten themselves into the situation and need to just "man up" and get out of it. Now, certainly, some people have circumstances, but other people borrowed more than they reasonably could afford. They lied (or had mortgage brokers lie on their behalf), they borrowed too much, they took risks (option ARM with interest only for first 5 years?), they assumed property values would climb forever (what goes up must come down). I feel like they should have to bear the brunt of the risks they took. The reason it could have paid off big is because the downside is bad. If there is no downside to things, how will people learn not to take risks? I am risk averse by nature. We have a small mortgage. We save money. We live on one income. We live on less than one income. We work for companies that provide benefits. I will never be rich because I don't take risks, but I'm not losing my house due to unpaid medical bills, etc. I do not want to pay for the mistakes of others. I just don't. If they fail and flail, then let that be a lesson to them.

On nationalized health care: I'm against it. I'm actually sort of against today's traditional insurance. I'd prefer high-deductible catstrophic plans that would force people to shop around for the best price on primary and preventive health care.

On government education: I'm against it, but I moved to a good school district (even before I was married and before I had kids because I figured people who pay a premium to live in a good school district are people I would like to have as neighbors and homes in good school districts are easier to sell). If I could get my school district tax dollars back and use them to pick a school for my kids I would, but we will muddle through in our school district with strict parental oversight.

And that's my Libertarian Manifesto. Oh, and my secret for financial success: invest countercyclicly (hmmm, is that spelled correctly?).

1 comment:

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