Words of wisdom

Excellent insight into the housing/financial crisis, remarkably so given that is was first published in 1946, excerpted from the book "Economics in One Lesson," by Henry Hazlitt

"The Case against government-guaranteed loans and mortgages to private businesses and persons is almost as strong as, though less obvious than, the case against direct government loans and mortgages. The advocates of government-guaranteed mortgages also forget that what is being lent is ultimately real capital, which is limited in supply, and that they are helping identified (person) B at the expense of some unidentified (person) A. Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to "buy" houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in the long run they do not increase overall national production but encourage malinvestment."

Every person in America should read this book, but at the very least all elected and appointed officials. I wonder if it would have made a difference in our economy over the last 50 years?

-Joe

Do you deserve liberty?

We are barely seven generations removed from what I consider to be the "greatest generation." The founding fathers, brothers, and sons who suffered immeasurably; sacrificing their lives, comfort, and wealth to make possible the freedoms that we, their spoiled and ignorant posterity now freely discard.
I cringe each time I hear someone state "I don't get involved in politics" or other similar comment as if it were a display of virtue. I estimate many, if not most Americans spend more time in front of a television on a single weekend than they spend all year learning about government, politics, or just plain thinking. The American dream once stood for the opportunity to pursue happiness, along with the other unalienable rights of Life and Liberty. Our system of government was intended to give people the freedom to live as they wished, provided it didn't impinge on the unalienable rights of others. That opportunity is no longer a reality.
Greed, selfishness, and good intentions have all convoluted the intentions of the leaders who birthed our country. Democracy only works if citizens are both educated on the workings of government and are respectful of the rights of others. Uninformed citizens, or the "mob" as H.L. Mencken referred to them, will almost always regress to the lowest common denominator, electing and voting their way to ignorant oblivion. Which, if not for the rest of the population being taken down with them is not disadvantageous. Alexis de Tocqueville remarked "Democracy in America is doomed when the people learn to vote themselves money from the public trough...", something we've increasingly been doing since the New Deal, plunging our country into deeper debt, and ultimately abdicating our freedoms in the process.
We do not need more laws or regulation, bailouts or cash for clunkers, and perhaps most importantly we do not need to make the world safe for democracy. What would be constructive is for citizens to be responsible for themselves and allow others to do the same. What are you doing (or are going to do) to become a productive member of our country and attempt to slow the devolution of our society. Democracy needs virtuous people to survive, are we too far gone?

-Joe

cramer vs stewart

my comments are below the video.




for anyone who listened to cramer in the past, his candid 2006 comments should come as no surprise. the guy ran a hedge fund managing billions of dollars for institutions, pensions, and the very wealthy. he did not (and should not) serve the average investor.

stewart presents himself as a man of the people, yet it concerns me how he's directing his anger; at a television channel. a freaking television channel. perhaps more disturbing than stewarts misplaced anger is that people actually took cramer seriously. he's obviously intelligent and in the right arrangement his advice could be of value, but on his television program "Mad Money" he is an entertainer, nothing more. stewart knows as much as anyone what drives television programming; advertising. networks make money from advertisers, the more outrageous cramer acts (or anyone else for that matter), the more people who will watch. if more people watch, cnbc (or any other network) can charge more for advertising, plain and simple. there is nothing in the formula about being truthful or honest or on the side of the public; those are just fringe benefits if they happen to work out.

have we as a nation lost our ability to accept responsibility for our own destiny? i believe the american form of government crafted over 200 years ago was designed to give us just that, the opportunity to forge our own way, to work to improve our station, or not. somewhere along the journey we lost our direction, changed our course and asked a government to take care of us; an ironic twist of serve the servants. perhaps we've lost the skills necessary to navigate life without regulation and oversite, dependent on beauracracy to protect us from ourselves.

next time you hear of a financial scandle ask yourself, "how could the victims have protected themselves"? if the only answer you come up with is government regulation.....we might be too far gone.

-joe