http://blogs.suntimes.com/sweet/2009/01/rev_lowery_inauguration_benedi.html

Rosalie Stine

Hi Johnny,
I checked your blog this morning hoping to read your comments on the inauguration yesterday. Hope you were able to watch it. All of it was like a breath of fresh air after a suffocating past eight years. But the highlight, to me, was the benediction. In case you hadn't gotten to hear it I hope you'll read it in it's entirety at the link above.

~

Sorry I haven't been on the blog. As of late, I've been throwing myself into a new project. In fact I was so involved in it that I missed every bit of inauguration news there was... excepting Jon Stewart's late night - haha- report.

I suppose it must feel as though some barrier has been broken for the former slaves of whitey. But seriously, while I appreciate what this day embodies for them, and everyone for that matter, the day is no more or less historic than any other. I see masses of people who've simply waited for the times to change.

Obama deserves all the respect in the world for what he's accomplished. But the average black man or woman will be no better or worse off today than the day before. Instead of taking pride in what the President has accomplished, they should be ashamed at their lack of the courage, conviction, fortitude and principles that Obama has displayed throughout his life, and that ultimately won him the presidency. Any one 37 or older and native born can run for the highest office in the country. It's been this way for years, the black man is not held down by the few racist pricks who still exist. He's held down by his own expectations of what he can achieve.

A man once asked why I was so happy that our high school football team had made it to the divisional playoffs. I, being young and dumb answered "because their my team." He laughed and said, "You shouldn't be celebrating. You should be ashamed that you didn't have the balls to join them on that field. This is their victory not yours." The same goes for the people celebrating on the mall of our capital: This is not your victory, this is the time to ask yourselves why it wasn't you on the podium.

PS:I'll admit that I celebrated a little as well. But you can't blame me... Bush is finally gone!

Week Two, Bail-outs (pit-stop on the road to socialism)

So, last week we covered the housing bubble. I think the place that naturally leads us to would be the Bail-outs. Well, what can I say about that? (besides pleh...(the sound one makes after imbibing a mouthful of sea water)) Obviously, last week we covered the cause of the implosion of the market. So we should probably pick up where we left off. The root cause of the entire fiasco was the government sticking it's dirty little finger into the free market, in the form of forcing lenders to lend at rates that didn't justify the risks.


Now, and this really pisses me off, we are beginning to hear more and more about how "de-regulation" has destroyed the free-market. Oh, what a load of crap, when it's so painfully obvious that it was very specific regulation that sent us down this road. Of course the government will not allow this mess to be turned against them. Alright, so maybe your wondering why the government would be against "de-regulation". If you're really wondering that, you're not thinking for your self any more. The government wants control. They want as much control as they can twist the constitution into allowing them. Now I will have to say that there are some congressmen that have good intentions. However, a man with principles in government becomes a pawn for those who have been further corrupted. Let's not forget that power corrupts, and absolute power corrupts absolutely

So how does a country get to the point where they will voluntarily hand over more and more control of their day to day lives to the government? FEAR. The ominous words of the chancellor from the block buster "V for Vendetta" ring true to the objective of the government in our current situation,"I want everyone... to remember... why they NEED us!" We've seen this kind of fear mongering before: Germany, USSR, and most recently BUSH. All that needs to be done to gain unprecedented control over an aspect of a community, is to convince the common people that they can't survive without the government in control of that aspect. First it was Bush, who manipulated the 9/11 events, to take unprecedented control of the military, not to mention using the events as an excuse to engage in domestic espionage. He built a machine that worked toward his goals, and it ran on fear. These disasters occur unexpectedly (notice I didn't say naturally) but those very intelligent people who are standing at the podium (and the people behind them, who actually form these strategies) see every disaster as a double edged sword. They see every 9/11 as an opportunity to change the way people think about the role of government.


Unfortunately those who voted for change will find only superficial improvements, and this mad dash towards greater government control will continue. The latest disaster to be twisted into handing the government even more control, is this recession. Even though those in control created the bubble, when it inevitably collapsed their first reaction (no surprise) is not to apologize for sticking their grubby little fingers into the pie, but to convince the public that we should simply hand over the entire pie. It is ludicrous, it's infuriating, it's dumbfounding, it's corrupt, and it's un-American.


So, how does this have anything to do with the bail-outs. Hahaha! They've done such a good job masking it that you probably didn't even realize why they really wanted to do this. If you recall the way we all felt about the bail-outs when we first heard about them. Oh god... I thought there would be rioting in the streets if it ever passed.... and then it did... and we were all so terrified that we let it slide. So, why did they want this badly enough to go against the will of the people? Easy, they knew they could frighten us into going along with it. Why did they rush a bill through congress that was so incredibly vague and open ended? Also easy, they did it because on the other end they could do whatever they wanted, as far as buying their way into the private sector. Ah ha! They are buying their way further into the private markets under the guise of a heroic rescuer.

Why, should we worry about the government take over of the private markets? Well, it's very simple. As we have it now, each individual has a small part in creating and controlling the economy. This spreading of the economic load across the shoulders of many, has been the saving grace of this country thus far. Individual responsibility for each financial decision allowed the free market to micro-manage it's self. This is why governments have historically done horrible jobs of managing economies. They are too far detached. They simply cannot create an artificial system that works across the board. The Russians tried it with socialism. It failed. Besides all the talk about whether it could work theoretically, we cannot forget the human element in all of this: Power corrupts. This we must always deal with. There will always be a government. It is a necessary evil. But, before we allow ourselves to be intimidated into handing over the keys to the private sector, we must remember what is more important: Absolute power corrupts absolutely.

Week one, the Housing Bubble

So, where to start on the housing bubble. Not knowing where most of you are coming from on this topic I'll start simple and work my way up.

How does one make a housing bubble? First you have two general groups of people, some are "Home Owners" and others are "Home Wanters". Easy enough. There are sub-groups of each of those groups. Of those that want homes, some can afford to pay in cash (we'll call them "Cashers"), some will have to borrow and will have the means to pay back the loan (We'll call them "Good Loans"), and still others will have to borrow but will not be able to pay the loan back (and we'll call them "Bad Loans"). Subdivisions of the Home Owners group are: those who decide to refinance their homes for extra disposable income (They will be "Refinancers"), and those who own their homes outright (we'll call them .... well... "Happy"). We'll also add another group that is created by all this activity, "The Home Builder". We'll examine these sub groups to see how this bubble pop ripples across the economy.

The bubble first begins to rise when loans are made to everyone with out proper credit checks, or at a lower interest rate than the risk of the loan dictates. This is exactly why Fannie Mae and Freddie Mac were the first to implode, the government in an effort to make housing more available to the lower middle class, dictated to Fannie and Freddie that they lend at sub prime rates. If the risk of the loan is not compensated for by higher interest rates on other loans of that type, the entire system falls apart.

So, how does that reach out to touch everyone in the economy? First we'll start with the Home Builder. The Home Builder sees all of the activity in the market. Homes are suddenly going for twice what they used to be worth (largely due to people being granted loans they can't really afford, the Bad Loan Home Wanters) So the Home Build goes about building tons of houses and making a great living at the same time. The trouble is.. that in the midst of building his latest development, those Bad Loans begin to catch up with the lenders, and they begin to either go out of business or change the way they lend. So suddenly it becomes more difficult for the Home Wanters to buy a new home, and at the same time the housing market is saturated with homes that sit vacant. So effectively the housing bubble has been pricked, but not yet completely popped. The Home Builder sees that he has all these homes sitting vacant, he needs to continue making the money back that he has invested in the homes. So he decides to lower the prices on them to entice Home Wanters into buying one.

Now we reach across to the Home Owners, now with all housing values falling because of the new relative low cost of buying a new home from the Home Builder, the estimated worth of the Home Owners house has fallen. Now for those who were counting on refinancing there homes, to send their children to college, or to buy a new car, or to improve their home further. This is how the housing situation prominently burst into other markets. Our economy has become so dependent upon lending, such as second mortgages and home equity lines of credit. So now that the Refinancers have no value to borrow against in their homes, they cannot afford that new car, lavish Christmas presents, or a trip to visit their distant families. This happening to one person may not seem like a big deal, but on a grand scale where millions of people decide to stay home for Christmas instead of travel, or decide to spend a little less on presents this year, or decide to fix the old car instead of by a new one, suddenly the markets that are effected begin to experience a slow-down. What may worsen the situation is the posibility of layoffs related to a decrease in spending. Which in turn may spark another round of home selling, further flooding the housing market and driving home values even lower.

This is how this problem finally reaches our "Happy" Home Owners. With the slow-down now filtering into other markets, those markets begin to cut jobs. So this group of "Happy" Home Owners begin to be sucked one by one into the Refinancers group. Those who lose their jobs will spend less on even more types of markets. They will begin to spend less on even the essentials. Shopping less often and buying items that will feed their families more efficiently. This simply spreads the economic decline. Causing more jobs to be lost, and even further decline in spending.

This vicious cycle continues until some one can find a way to capitalize on the situation. The companies in a free market system are must react to the market's status. The Free Market is the most powerful human generated force on planet, because of one overriding factor. The free market is driven by the most universal human element: survival, procreation, and most of all greed. A Free Market is self correcting because it people react to the changing markets. Not only do people have to adapt to survive, people naturally desire to prosper. If people are spending less on certain more luxurious items, those companies which show real long-term value to the public, will eventually gain ground on companies that refuse to react and continue to do business in the old way. The companies that don't react will fail and be weeded out, those that adjust to a new way of doing business will easily be able to fill the vacuum left by the large failed dinosaurs. As those companies grow larger, people who've lost their jobs in other sectors will regain employment.

So there is hope. It will take time to rebuild our faltering economy. However, when we do we must remember the lessons we learned from this bubble pop: the free market is self correcting, although the government may have good intentions tampering with the market can have unforeseen effects, and lastly when think about investing in a market with an incredible face value, we must dig to it's base to make sure it is built on sound economics. If we can learn from these lessons we can avoid another Housing Bubble.

Contact Me!

If you have a discussion topic, or if you'd like to chime in on a topic already being discussed, send and email with your proposed text and "Yes and No: Topic" in the subject line, to jcool25@juno.com

Yes and No, Opinions

So, as this is the first of many posts on this blog, I'll start with a brief over view of what I'll be talking about in the coming weeks followed by a brief introduction of myself, so you might better understand where I'm viewing these events from. Generally, I'll be using this blog as an outlet for common sense, which, by the way, I feel much of this world seems to be lacking. I'll be striving to uncomplicate that which seems so very ... well.. complicated. The recent events, such as the collapse of the housing market, gun control, health care, and the right to gay marriage will all be fair game.

When speaking with nearly any reasonably intelligent human being, more often than not the answers they will give regarding many of life's most important questions, are a mixture of yes and no. Which is no surprise, considering the complexity of most situations. For example, I believe firmly that the populous should have a greater hand in ruling the country. Sounds simple enough. More referendums, or more clout with your senator. This would have been incredible in matters such as the 750 billion dollar bail out debate. However, just recently decided on by Californians in a referendum... the right to gay marriage, or now the lack there of. Why should the majority be able to revoke the rights of the minority? Simple answer.. they shouldn't. So if you were to ask, "Whether I support populace rule?" I would have to say "Yes and No."

In introducing myself I would have to start with the facts that I am: The father of one, Husband of one, an over-educated landscaper caught in a dead-end job, a member of an alternative style band (Ahltyra), and lastly a member of the true fiscal right and the true social left. I was born Nov. 28 1986, which for you people who'd rather spend your time reading than counting, makes me 22, as of this writing. Of course, being twenty two and a landscaper by trade makes it pretty difficult to find many peers to debate with and hash out the finer points of social injustice and economic catastrophes (although that topic is beginning to become quite popular in most circles).

Through this blog I hope to encourage open discourse between opposing views, and I'll be regularly including links to articles both in support and in opposition to my arguments. I welcome all responses, from any side of these issues. Simply because I hold a belief doesn't mean I'm not open to the possibilities of other views.