First off, just want to apologize for not blogging enough lately. Been dealing with some family stuff that has distracted me considerably. Ironically, the issue revolves around money -or lack thereof.

My mom is 65, turning 66 this July. She goes to her financial planner last week who suddenly realizes that she's going to be broke by 71. Evidently, this came to a shock to him. This is the guy who is supposed to manage my mom's (limited) money, and has been (again, supposedly) for the last 5 years at least.

Now, I'm going to do a whole other post about the investment systems in Canada another day, but for today I want to talk about a phrase that is suddenly entering into our conversations, and one that mom heard from this douche bag financial planner.

"Live within your means"

Have you head that lately? You probably have.

It has become the rallying call of not just Republicans but Democrats as well. It's become the bumper sicker of the 'new economics' of this American decade.

There's a political action group named for it: http://livewithinourmeans.com/

Obama has used the expression in one of his speeches: http://gatewaypundit.blogspot.com/2009/02/unreal-obama-says-weve-gotta-get.html

And Republicans like Ron Paul have made a mantra out of it: http://ronpaulromania.blogspot.com/2009/01/ron-paul-solution-is-to-live-within-our.html

Now, on the surface, there is nothing wrong with the argument that we have to live within our means. It makes perfect sense. If you spend more than you make you go into debt and risk financial ruin to not only yourself but your family.

As a nation, if you spend too much, you risk crippling debt, recessions, and potentially disastrous inflation.

But, the advice is great for an ideal world. The fact is, we don't live in one. The ugly truth is that most people CANNOT live within their means, and we have NEVER been encouraged or been able to do so by the powers that be.

We live in a society that NEEDS CREDIT. Not only for convenience, but as a major factor in our economic survival.

Think about it: if it was so easy to "live within our means", why do we have a banking crisis? Why are so many businesses hurting because they can't get a loan, and why is the government rushing to help them out?

I mean, if we should just live within our means, why are we trying to get capital flowing again?

The reason: our system is geared towards perpetual debt. Not perpetual profit.

The abundance of credit has been a KEY factor in the economic success of the Western world for 100 years now. By providing easy access to credit and loans, governments and businesses have ensured the following:

-Easy economic expansion of a consumer based economy

-Suppression of wages of the working class (Why pay someone more when they can live off of credit?)

-Creation of a debt burden to ensure that people work for whatever salary you give them and are less likely to quit no matter how much you exploit them.

-Keeping people economically suppressed so that they are always focused on their personal situations and not the 'big pictures' of life.

The truth is, the Western economies would COLLAPSE if people 'lived within their means'.

If you lived within your means, would you go out to dinner once a week? Would you go to the movies or buy a DVD? Would you get that new iPhone or new Britney CD? Would you buy a house? Or buy a second car? Would you go on vacation somewhere or just stay home?

Would you buy a new dress? Buy a coffee on your way to work? Would you spend any money during Christmas?

Probably not. You won't be able to do much.

So, explain to me then, how does a Western economy like America survive if people lived within their means? Because, after all, the American economy is one of excess.

What would happen to companies if the average American had to live within a budget? What would happen to Mercedes, Abercombe and Finch, The Gap, Nine West, Gucci, Ford, Lincoln, Crocs, Banana Republic, Boss, Armani, Versaci, Disney World, Sony, Samsung, Apple, Louis Vuitton, Pizza Hut, McDonald's, Chanel, Rolex, Shell, Boeing, Levi's, Motorola, Nissan, Starbucks, or Nivea?

They'd go tits up, that's what.

To everyone who uses the rallying cry of "Live Within Our Means" as a front against the Obama budget -which at it's worst is somewhere between 1-2 trillion dollars- let me quote from Video Jug :

The average American today has about thirteen credit cards and about $9,800 in outstanding balances... As far as the totals, there is currently about nine trillion dollars in mortgage debt outstanding, about two and a half to three trillion dollars in non-mortgage debt, that would credit cards, which is about nine hundred million, car loans, student loans, medical debt, all kinds of other debts combined are about two and a half to three trillion dollars. So consumers have a total of well over ten trillion dollars in debt in this country and it's hurting an awful lot of people's ability to keep up.

10 trillion dollars. That's what Americans spent on credit.

So image sucking 10 trillion dollars out of the national economy. What do you think it would do? How damaging would that be on business? How many people would be out of work?

Before we all start demanding that people start living within their means, let's understand what the consequences will be: a very different Western world. No more innovations at the rate we are currently used to, no more fun gadgets to buy every Christmas, no more new car line ups every year. Good bye 401ks and RRSPs. So long retirement plans. Nice knowing you manufacturing sectors and blue collar jobs. Good luck tech sector. See ya around GDP growth.

Hello 15-20% unemployment rate for the next 20 years or so.

I completely agree that people need to live within their means. But not for some kind of sick economic morality that seems to be sweeping the nations. But because credit has become a yolk around the necks of the working class and because it perpetuates a false economic condition that cannot survive.

We need to re-engineer our economic systems so that both companies and workers make good money so that companies can reinvest in themselves and that workers can reinvest in their economies without living in debt.


MoonBat

I've come to realize -and perhaps it is naive of me for not seeing this earlier- as to why the AIG bonuses story is as big as it is.

I'm one of those guys that is constantly saying: "Why isn't the media devoting more time to global warming, or poverty, or the chaos in Africa? Why aren't we talking more about the rise of China or the history of American intervention in the Middle East that lead to the birth of Al-Qaeda?"

For the longest time I used to think that the media didn't do this for bogus political reasons or because of corporate sponsorship. Now I'm beginning to realize that they don't do it because they are lazy.

Stories like the AIG bonuses are easy to produce, because -ultimately- there are only two sides to the story. You are either for the bonuses or against them. The idea of these guys making millions of dollars after crashing the economy lights something up in the reptile part of our brain. The part that gets offended easily and wants some kind of primitive retribution and tribal justice. "It's not fair! It's not right!" is usually the rallying cry of the reptile brain.

Even President Obama said the bonuses were a moral and ethical issue.

For the media, stores like this makes for 'engaging television' and easy journalism. You don't have to cover a story. Only the reaction to the story. Honestly, how much time has been spend understanding why we are where we are with AIG versus the outrage of the bonuses? Ask yourself: what angle of the story is actually more important in the long run?

You can see the same thing with the Octo-Mom story. People were either supportive of it or against it. They spent hours talking about the 'ethical and moral' implications of having so many babies.

Considering all of the true moral and ethical quandaries we are in as a civilization, are these the best examples we can come up with? No. But they are the easiest to put on television. Why? Because these kinds of "dilemmas" are easy for people to understand.

And that's the thing. Rick Santelli had a point recently, that the outrage of the bonuses makes no sense because they represent 1% of the money given to AIG. His thesis: Why the outrage over 160 million when we just handed over 160 billion? And he's right.

But arguing about the bigger issues -like if a bailout for AIG was even required in the first place- requires a nuanced argument, with subtle details of law, economics, capitalism and principle. It means that people have to actually UNDERSTAND the issue before they can have an opinion on it.

(Why is it -for example- that no matter how complex an issue is, the media always reduces it to a two sided argument? (Think Israel vs Palestine). Is it because they are corrupt? No. It's because they are lazy. Explaining the Mobeus strip that is the Middle East is too hard. Making it a story about settlers vs terrorists is much easier.)

Why is it that we have spent more time now talking about the AIG bonuses than we did about the idea of, the implementation of, the management of, and the laws of giving AIG a BAILOUT in the first place? Because the latter requires actual thought and discussion. And the easier it is for people to have an opinion on something -and the faster you can present an argument so they can have one- the more will follow the story and be 'engaged' in it.

Looking back, I can see this happening constantly. Remember the whole Monica Lewinsky scandal? Why was that so big? Cause it was easy for people to have an opinion on it.

Gays in the military? Gay marriage? Abortion? Same thing. Reptile brain reactions to all of them.

Global warming? The role of a central banking system in democracy? The role of government in supporting a capitalistic system and what limitations should be placed on IT as well as the markets in general? Good luck seeing CNN give any of those issues any time. Too complicated. Not sexy enough.

The trouble is, of course, that the most important issues we face as a society, a people, and a species, aren't easy to understand. It requires us to educate ourselves in various schools of thought and subject matters. It means that we have to silence our reptile brain and use our higher functions to actually have an INFORMED opinion.

What is going on on Wall Street and on Bay Street and in London, Paris, Berlin, Rome and everywhere else is epic. It's a complex, almost Homer-esque tragedy playing out, and there are no Cliff Notes or Coles Notes to skim off of.

For decades, those in power have been distracting us -and we ourselves- with these simple yes or no 'issues'. Obsessing over them, we have failed to educate ourselves on the real issues that matter, and the stories that we must decode and understand.

The AIG bonus story is big for sure. But not for the reasons you believe it to be. Ultimately, our society won't feel it one way or another if those jerks get their bonus money or not.

No, this story is big because we are so stupid as a country and as a people, that this is the only part of the narrative that we truly 'get', and therefore, the only part of the story that we have an actual opinion on.

Next time you have an opinion on something, I mean REALLY have an opinion on something, odds are likely you have an opinion on a subject that is totally irrelevant to your life and your country. Not because your opinion doesn't matter, but because the issue is most likely so simplistic that it is ultimately irrelevant. It may make you feel good to have an opinion, but so what?

I'll never be able to watch the news the same way again.

Once again, Kieth Olbermann and Jonathan Turley breaks it down simply in terms of the hypocrisy of the outrage. Couldn't have said it better myself.

Another day, and another AIG freak out on behalf of the Obama administration.

Today, Obama huffed and puffed about AIG's insistence on paying $170 million dollars in bonuses.

Now I'm a huge fan of Obama and I'm disgusted at the idea of paying bonuses to the guys who broke the American economy. But as I said in yesterday's post on this, AIG is contractually obligated to do so. In fact, if they don't, they may have to pay DOUBLE because of the state laws that they operate under.

The question is not: "How dare AIG pay?". We know they have no morals on the situation anyway. The question is: "How dare the Obama administration NOT know this was going to happen?"

They effectively 'bought' AIG with tax payer money. Didn't they look at the books? Tim Giethner, used to work for Goldman Sachs. He KNOWS how things roll on Wall Street. Hey Timmy. Did it just slip your mind? (Also, I'm sure he also had NO idea that AIG paid $13 billion to Goldman Sachs -even though they were also recently bailed out.)

The US gov is just showing itself to be incapable of dealing with this mess, and at the heart of this shit storm is Geithner. It's time for this guy to step aside. He has lost all credibility in dealing with these issues.

In the meantime, don't get distracted by stories of bonuses. That's not the outrage here. The outrage is that there seems to be no accountability on behalf of the US gov as to how they are spending your money.


MoonBat

So AIG announces that they will have to pay hundreds of millions of dollars in bonuses because contractually they are obligated to, and -naturally- politicians go ape shit over it.

You know what? Good on AIG. And thanks for nothing Washington.

I know that sounds weird coming from me, given that I've been calling for a major overhaul in the American financial system, and more accountability to American taxpayers, but in this case I side with AIG.

The US government had a chance to nationalize AIG and chose not to. It could have let AIG file for chapter 11 and chose not to. Either one of these options would have allowed AIG to break the contracts that were currently in place with their management team and not require them to pay bonuses.

The US gov has shown itself to be completely incompetent as to their understanding of and their management of this situation. They actually thought that by bailing out AIG, that they had some legal authority to tell AIG what to do. Guess what losers. You don't. Thanks for coming out.

AIG is LEGALLY obligated to pay those bonuses. LEGALLY. If they don't, they can and WILL get sued. How much is that going to cost to resolve?

To the monkey's in Congress and the Senate, please understand: there are no half measures in this. If you want control over how a company spends it's money you have to BE in control of the company. If a company is 'too big to fail' then guess what? You probably aren't going to be in a good position to negotiate, because if you don't meet their demands they will just let the system collapse and still walk away millionaires.

I'm sick of hearing this constant complaint about bonuses. If you hate them so much, take all these companies over an be done with it. If you are too scared to do so, then shut up and stop putting on a show of crocodile tears for taxpayers. You knew EXACTLY what AIG was going to do with this money, and if you DIDN'T, then you are too incompetent to be doing your job.


MoonBat

Well another 7 days have gone by so that means it's time for Douche Bags of the Week!

This weeks winners are:

Alan Greenspan - Evidently, wrecking the economy wasn't good enough for Mr. Greenspan, he also wants to wreck history as well. This week, Mr. Greenspan wrote an article for the Wall Street Journal, basically saying that it wasn't his fault that everything went to shit in the economy so don't blame him. Unfortunately, it kinda is his fault. Mr. Greenspan was head of the Fed, and was the one that kept lowering interest rates, which made it cheaper for banks to borrow and lend, which made it cheaper for people to take out mortgages, which yada yada yada. Had he "closed the window" of the Fed, we might have averted the catastrophe that continues to unfold (and much of which that has not) upon on. Not to mention that Mr. Greenspan was also Mr. Don'tRegulateTheMarketsTheyCanFigureItOutThemselves. So fuck you twice Greenspan.

Ben Bernanke - Ben Bernanke is the current head of the Fed, and as such, he's the guy who's supposed to know exactly how the money in America is being spent and where the pains in the market is. Well, 2 years into this recession and 6 months after the economy started to bottom out, Ben has come to the conclusion that the markets need a regulatory overhaul. Really? You figure that one all out by yourself Sherlock? And so quickly too. Of course the markets need an overhaul you turd blossom. And that overhaul has to start with the Fed.

Tim Geithner - I hate coming down on Timmy cause he's had his job just a few days less than Obama has had his. But there are certain screw ups that just need to be pointed out. This week, Geithner had an interview with Charlie Rose, where he said, and I quote "Capitalism will be different". Considering your boss is still being called a socialist by every red neck south of the Mason Dixon line (and a few retards in Washington), maybe you should find better talking points. And next time you sit down and talk about what you are going to do about the banking situation, maybe you should have an actual plan ready to roll out. So far you have nothing.


Stephen Harper - There are douche bags and then there are douche bags. Harper is the crown prince of them this week. I've never liked the guy, I will admit. Personally, I think he's a disaster of a PM in many ways. Sure, he didn't invade an Arab nation without cause, but -believe me- if he had the army he would. This week, Harper decides to launch into a tirade against liberals in a 'closed door meeting' with his party members and supporters. "We are in a global recession principally – and we have to face this – because a lot of people on Wall Street, because a lot of people in the private sector more generally – homeowners or consumers – pushed or bought into a very unconservative idea that they could live beyond their means"," he said. Never mind the fact that is was conservative ideology that screwed up the American system, and liberal ideology that saved the Canadian one. (AND also nevermind that under Liberal leadership Canada had record surpluses a BOOMING economy and a strong dollar) Also, just a few weeks after Obama visited Canada and Harper was all friendly to him to his face, Harper goes on to criticize Obama's stimulus package and economic policy. Hey Harper: next time your approval ratings are in the high 60's you can talk trash to Obama. Until then, shut up. If you have something to say about liberals or Obama, say it in public like a man. Bitch.

Seems that Michael Steele knows the end is coming and has decided upon an exit strategy.

He recently gave an interview with GQ where he stated (confusingly) that he is (possibly) pro-choice when it comes to abortion.

Not only will this certainly get him booted from the GOP, but it lays down a great excuse as to why he will get the boot.

When he talks about it in the future, he will probably point to his "progressive" stance on abortion rights -not his total incompetency, and corruption as GOP leader.

Brilliant.

MoonBat

Or he might as well have.

At least a year after everyone else got the memo, Ben has decided to announce to the world that the US financial system needs serious regulations.

Thanks for coming out Ben. You've been doing this for how long?

Interestingly enough, he decided to announce this -not to Congress or to Wall Street- but the the Council on Foreign Relations, in hopes to create a 'discussion' with the G20 nations to enact international financial standards. Possibly laying down the foundation for a central international banking and financial system.

New World Order conspiracy theorists, start your engines.


MoonBat

So the DOW today had a good day. And there are people already saying that this is the beginning of the rebound.

But let's not get stupid.

For starters, a good day on Wall Street is just that. A good day. People put their money in and then sell it just as fast. So don't get fooled by a one day up tick.

Also, let's not loose sight that NOTHING HAS BEEN FIXED ON WALL STREET YET!

There are no true "good days", until we see real change on Wall Street and real regulations and restructuring take place.

Until that happens, today is like like getting lucky on the slots. Just because it pays out once, doesn't mean that your next pull is going to be any bigger.


MoonBat

Wake up America.

There is no silver bullet to what ails you. For all of the hype behind the stimulus bill, the banking bill, the multiple bail outs -none of them are going to fix this problem.

When an economy is as fucked as yours is, don't expect any one piece of legislation to bring salvation. It's not a werewolf you can shoot at and change back.

Your entire economic system is a fraud. You've been ripped off by those you trusted, and the whole 'trickle down economics' thing is finally kicking in: you're getting pissed on.

Like a badly broken bone, your economy needs to reset. And if you ever had a broken bone reset before, you know it hurts almost as much as the actual break.

What does this mean for you? Probably some are all of the following:

1) Total nationalization of the banking system for a 'short' period of time.
2) The collapse of at least one major auto company.
3) The fall of home values by 30% or more
4) A Dow Jones of around 5000 when it hits 'bottom'. Maybe less even.
5) A national unemployment rate of around 11-13%, with at least one state having one of around 20%.
6) An inflation rate of around 5% or more
7) Kissing your 401ks good-bye

Don't blame Obama for any of this. There is nothing he can do to fix it. Like watching a building collapse, there is nothing you can do but wait for it to hit the ground and then clean up the mess.

Just remember who you should be angry at: every politician that told you that Al-Qaeda was the biggest threat to America. They spent years and a trillion dollars on a 'war on terror' when they should have been waging a 'war on fraud' on Wall Street. Remember them telling you how Osama Bin Ladin was going to destroy capitalism? From a cave no less?

Seems that the jerks on Wall Street did a good job of that themselves.


MoonBat

Pity the poor Albertans.

I mean that. I'm not saying that in any kind of lefty, snarky way.

The people of Alberta have been shafted. Their leaders betrayed their trust. And the industries that they placed their futures in are indifferent to their plight.

A recent story has it that Alberta's economic is in the ditch.

After years of a booming economy, based almost solely on high gas prices, the plunging markets have screwed up the Albertan economy for at least the next 2 to 3 years. I would hazard to guess more.

Albertans, like all citizens, put their trust and faith into government officials and 'industry experts'. For the last two decades, Albertans have been told that there is no need for real economic diversity, that there is no pressing urgency to invest into new industries, and that the gravy train will never end.

Well it just screeched to a full stop.

Alberta is officially near the bottom in Canada in terms of economic growth.

In many ways, Alberta is representative of what is going on in the world. Focus on what's working NOW, forget about long term planning, ignore all evidence to the contrary, get every one's hopes as high as possible, profit as much as you can in the short term, and then bail when things come crashing down.

Albertans are going to have a devil of a time re-working their economy. Especially with oil and gas lobbyists working overtime to prevent any green shift within the province.

To every Albertan who is going to -or already has- lost a job, I'm sorry. Our government, and our industries should have done better.

I hope, for the rest of us, we learn the lesson.


MoonBat

Going to try and start something new tonight. Each week I will be compiling a list of who I consider to be the biggest Douche Bags.

This ignoble title will be bestowed upon the men and women that have done the most in the last 7 days to set back humanity, just because they want to be pricks.

This weeks winners are:

Sanjay Gupta: Gupta has withdrawn his name from being considered for the job of top doctor of the US. Rumor has it that he didn't like the pay cut he would have to endure. Gupta is a brilliant neurosurgeon and a great doctor. He has just prevented millions of people form benefiting from his talents because he wants to earn a little more money shilling for CNN.

Roger Ailes: Ailes, Mr. Buddy Buddy with the Bush family, is the CEO of Fox News. He's recently been quoted as saying that he is ready to wage war with Obama , comparing it to the Alamo. Evidently, Alies considers fairer taxes, and universal health care to be key signs of the Apocalypse.

Ken Starr: What would a douche bag list be without Ken Starr. Not content with wasting the nations time and money going after Clinton in the 90s over blow jobs in the White House, Starr is now devoting his energies to deny civil liberties to homosexuals. Evidently, Starr will not be happy until no one in the country is getting laid -ever.

Zach Wamp: Wamp and Gupta must be dating, because it's a great week for beating up health care. Wamp has publicly stated that health care is not a right. Wamp is correct. There is nothing in the American constitution that requires the government to provide universal health care coverage. But then again, there is nothing in the constitution about teaching evolution, having the ten commandments on court houses, about invading countries without warrant, about having a Federal Reserve system, about banning gay marriage, or about unilaterally negotiating trade deals. All things the GOP are in favor for, and are basically the central ideologies of their party. So if we are going to be technically right, Mr. Wamp, your entire party is full of shit. So if you have the right to be full of shit, then sick people have the right to medicine.

Ken Lewis: Lewis is the big cheese at Bank of America. If you can even call it a bank any longer. Aren't banks supposed to have money? This week Lewis came out and said that TARP was "a mistake", that he really didn't need all that money (but he spent it anyway), and is now refusing to cooperate with the DA of NY regarding bonuses paid to execs. One silver lining, major shareholders of his bank want him fired. Fuck you Lewis. Don't let the door hit you on the way out.


MoonBat

President Obama has been getting a lot of flack lately, because the stock markets are tanking. And most of that flack is really unfair.

There seems to be a consensus building -a false one- that as long as the stock market drops, it is an indication that Obama is doing a bad job in managing the economy. In conversations about this, people routinely use the terms 'markets' and 'Wall Street' synonymously.

And that's a mistake.

Politically, ideologically, and rationally, we have to understand the difference between 'the markets' and 'Wall Street'.

President Obama -like all leaders- needs to do what is in the best interest of the markets. Not of the various 'Wall Streets' around the world.

Wall Street is a euphemism. It's a euphemism for big investors, big brokerage houses, big companies, big banks, and big interests.

The market is what really matters. The market is all about investor confidence, investor integrity, financial oversight, fiduciary accountability and economic responsibility.

The problem that leaders like Obama are facing is that what is best for the market, is not what is best for Wall Street.

Wall Street wants to go back to the party. Back to making insanely dangerous deals for short term payouts, long term bonuses, and big time bail outs.

Wall Street wants no regulations. They want to continue to wreck the value of global currencies, bankrupt nations, and continue the suppression of wages of the middle and working classes.

Wall Street doesn't want to pay taxes, doesn't want to go green, and doesn't want anyone looking at their books.

Wall Street wants to live in a world with stocks are over valued, and assets are over leveraged.

That's not what is best for investors. That's not what is best for the market.

The market needs to be fair. The market needs to have integrity. The market needs to know that it has an honest chance of making an honest buck.

The market is crying out for order and discipline. The market is crying out for honest trading, and consumer confidence.

The market is not asking for guarantees. Just real oversight.

Obama is right to ignore the stock tickers -for now. Wall Street needs to be revalued. It needs to hit rock bottom. It needs to be measured for what a market should be measured for: real potential for a return, real confidence, and real results.

For the last 20 years, we have been living in a fantasy world where a nation that produces nothing, has a serious inflation problem, and a massive long term debt issue, can have a stock market nearly double in a decade.

Wall Street needs a reality check. Wall Street may not like it, but that is exactly what is best for the markets.


MoonBat