Poor Us: The Great Depression 2.0

April 8, 2009

No Fooling, April is “Financial Literacy Month”

Filed under: Who knew? — Tags: , , , , — debacled @ 12:55 am

Ink_Study_No__3_by_GilAskanWhat with bailouts, bankruptcies, unemployment, foreclosures all worse than any time since The Great Depression, it seems unimaginably arrogant, or tone deaf or farcical for the US government to presume to  “teach” American taxpayers what to do with our money.  What are they going to teach us?  How to sharpen pitchforks and keep our torches lit?

Whatever, it lives on. Five years ago, in March 2004, the Senate passed Resolution 316 that officially recognized April as National Financial Literacy Month to address “problems resulting from pervasive financial illiteracy among adults of all ages.”  (So they guessed that we were clueless, did they?)

President Bush never got around to signing that bill, but he was responsible for the creation of the Financial Literacy and Education Commission, an august government body that by 2006 had spent $3million taxpayers dollars to produce a 162 page report called, and I kid you not, Taking Ownership of the Future: A National Strategy for Financial Literacy

As the press release claims “the report outlines a series of outreach and education goals for the public and private sectors aimed to help Americans improve their understanding of financial issues such as credit management, savings, and homeownership.”

Here’s the now mind-bogglingly wrong-headed introduction to the report’s Quick Reference Guide by then Secretary of the Treasury, John Snow:

April 4, 2006

The economic leadership of President George W. Bush has made
this a time of terrific economic growth in America. Because of the
President’s pro-growth policies, Americans are keeping more of what
they make, millions of jobs have been created, and homeownership
is at an all time high. With good economic times comes an increased
level of economic independence and more Americans every day know
the pride of ownership. Ownership of one’s home, secure health care
and a sound retirement savings all contribute to an individual’s sense
of security and empowerment. The financial security that comes from
owning something affords Americans the opportunity to plan for the
years ahead, and when people feel they have a stake in the future, they
build stronger families, stronger communities, and a stronger America. (more…)

March 23, 2009

“Arrre you kidding?” WWD’s Snarky Suze Orman Bio

Filed under: Who knew? — Tags: , , — debacled @ 5:01 pm

Suze Orman

Over at Celebrity Perfumery–a blog that imagines the perfect aromatic mix to match their original celebrity caricatures–they douse professional scold Suze Orman  in a no-nonsense bouquet of:  “Pleather, Foundation, Hairspray, Cuban heels, Sea breeze, Microphone foam, Mascara, Egg salad sandwich, Fabric softener, Nail hardener, Home sewing machine, Treadmill handles, Facial bleach, Primrose capsules, Freshly minted cash, Crisp linens and Seltzer”

And you can almost catch a wiff of that heady scent while reading today’s snarky bio in Women’s Wear Daily.  My favorite quote: “Even the victims of Bernie Madoff don’t get off scot-free when Orman gets going. “You walked right into that financial concentration camp, my loves.”

There’s almost no one out there as ripe for parody as Orman, 57. There’s the highlight-heavy blonde wedge haircut, the chunky gold earrings and the way she cocks her head to the left and furrows her brow when asked a question about whether to declare bankruptcy, take a loan out on a 401(k) or switch credit card companies.

Her populist rage is just as pronounced off-camera. Sitting in a green room after her TV interviews, she lambasts everyone from Alan Greenspan to Larry Summers to the former president of the United States, who holds an especially dark place in her heart. “Commander in Chief?” she says of George W. Bush, with a mix of disbelief and scorn. “You blew up every single financial vessel we had and if you think you aren’t personally responsible, well, the blame starts at the top. There is no higher top than you, SIR! If I were you, I would feel so absolutely horrific that I would take every penny I had and distribute it to anybody and everybody to help them in whatever way I could. You owe the American people every penny of your fortune and your family’s fortune.” (read on)

via The Consumerist

March 12, 2009

Super Fail: Press downplayed ’94 Derivative Risk Report

Filed under: Who knew? — Tags: , , — debacled @ 11:47 am

Nano Journalist by arzamasRemember the infamous intelligence assessment memo that read something like “Bin Ladin to Strike US Really, Really Soon” that the Bush administration totally blew off? Then after the 9/11 attacks they claimed they hadn’t followed up because the warning hadn’t specified an exact date.

Well, journalists can start dusting off their alibis now that The Columbia Journalism Review (CJR) has dug up all of the “It’s-no-big-deal” reporting  that  followed a 1994 report from the Government Accountability Office (GAO) titled–and I’m not making this up–“Financial Derivatives: Actions Needed to Protect Financial Systems.”  CJR’s Elinore Longobard builds a case to show how reporters seemingly sided with financial insiders’  against  increased regulation the GAO report advocated:

“The two-hundred page report, two years in the making, could have resulted in tough derivatives legislation, which is to say needed regulation. But it didn’t. The reasons why are complicated, and the press is certainly not the only culprit here, but it did play a key role. What happened is this: A triumvirate of the financial industry, misguided regulators and a passive press relegated the report to the dustbin almost as soon as it came out.

This despite the fact that the report was remarkably prescient in its strong warning about derivatives—almost a decade before Warren Buffet’s now-famous derivatives-as-WMD comment.

The report does not entirely condemn derivatives, but it is full of flashing danger lights. First it offers some context:

Derivatives activities are rapidly expanding and increasingly affected by the globalization of commerce and financial markets. Much OTC derivatives activity in the United States is concentrated among 15 major U.S. dealers that are extensively linked to one another, end-users, and the exchange-traded markets. (more…)

February 20, 2009

Reporters didn’t miss the meltdown; they read all about it

Filed under: Uncategorized, Who knew? — Tags: , , , , — debacled @ 7:17 pm

How did the business press miss the most important  story of their generation?  Who knows? But they weren’t the only ones. The then President of the United States stuck to his story that “the fundamentals of the economy were strong,”  his once vice president  recently commiserated with reporters that,  “I don’t think anybody saw it coming,” and even former Fed Chairman Alan Greenspan claims he had no idea that Wall Street was too greedy for our own good.  What were the poor reporters supposed to do if even their best sources didn’t know what was up?

Nonetheless, last month a former Wall Street reporter took his colleagues to task in a piece for Mother Jones How Could 9000 Business Reporters Blow It? Then Diane Tucker at Huffington Post answered with How 9,000 Business Reporters Blew the Mother of All Meltdowns.  So what were the watchdogs of democracy doing while they were supposed to be minding our business?  Maybe they were  reading:

We Didn't See It Coming

February 17, 2009

Uneasy reading: Bankers’ subprime motives in BusinessWeek

Filed under: Who knew? — Tags: , , , — debacled @ 7:15 am

Finance Sunday by mmystery via deviantart.comThe cover story of the Feb. 12 BusinessWeek is an expose of  how the banking industry is undermining efforts to keep people in their houses and how  politicians are lining their pockets with banks’ campaign contributions with one hand while shaking a sternly hypocritical finger at them with the other.

One memorable quote came after a gathering of top banking executives on Apr. 18, 2007.   Senator Chris Dodd (who, by the way, received more than nearly $6 million from the financial industry) was trying to get them to agree to adjust loan terms so borrowers would continue to make some payments, rather than stopping altogether.  The responses were all subprime, but this was one was the worst:

“Some from the industry denied a foreclosure problem existed, including Sandor E. Samuels, at the time chief legal officer of subprime giant Countrywide Financial. They vowed to continue selling loans with enticing introductory rates as well as those requiring minimal evidence of borrowers’ income. “We are going to keep making these loans until the last second they are legal,” Samuels later told a fellow participant. Read: How Banks Are Worsening the Foreclosure Crisis in BusinessWeek

February 16, 2009

OMG! Is that US in the Superpower Collapse Soup line?

Filed under: Who knew? — Tags: , , , , — debacled @ 4:19 am

In 1995, Russian/American engineer Dmitry Orlov discovered the recipe for dish he calls “Superpower Collapse Soup.”  Based on the ingredients that brought down the Soviet Union–a severe and chronic shortfall in the production of crude oil, a severe and worsening foreign trade deficit, a runaway military budget, and ballooning foreign debt–Orlov theorized that the U.S. was not far from completing their own economic disaster stew. By 2007, soup’s on! Come and get it!

So what’s for dessert?  Not much, it seems, since in the “absence of a functioning economy… commerce at a standstill… little or no access to imports… a population that is largely penniless” we can “forget growth, forget jobs, forget financial stability,”  according to the  “savagely humorous”  SALT talk Orlove presented on Friday the 13th  in San Francisco.  You can read the entire text of  “Social Collapse Best Practices”  here and decide for yourself if you agree that’s it’s “savagely humorous” or if it wipes any thought of a smile from your face perhaps forever. However sad a soup it is, Dr. Debacled suggests that you hold your nose and swallow every drop of this bitter bouillon.  That which doesn’t kill us makes us stronger (we hope). Here’s a sip to get you started:

“Right now the Washington economic stimulus team is putting on their Scuba gear and diving down to the engine room to try to invent a way to get a diesel engine to run on seawater. They spoke of change, but in reality they are terrified of change and want to cling with all their might to the status quo. But this game will soon be over, and they don’t have any idea what to do next. (more…)

February 14, 2009

Greenspan tells CNBC: Greed happens

Filed under: Who knew? — debacled @ 8:23 pm
Very Funny by italiansausage via DeviantArt

Send in the clowns: "House of Cards" showing 2-14, at 7 and 10; 2-15 at 9, check CBNC for more showings.

At the end of CNBC’s harrowing (as in “we’re doomed”) House of Cards, reporter David Faber tried to find out if Former Fed Chairman Alan Greenspan took any personal responsibility for the current fix we’re in.  As his troubling response (transcript after jump) shows, he didn’t see anything wrong with sub-prime lending, liar loans, credit default swaps and the other confidence games that now threaten global stability.  His only problem:  too bad his boys  got caught.

In absolving himself and his ilk Greenspan did ponder this rhetorical question: “Looking at the way we all behaved, how is it possible that this species built up such an extraordinary world standard of living that has drawn hundreds of thousands of people out of poverty?”  It begged the answer “because greed is good.”

Faber wisely gave Greenspan the last word, but yesterday on Jim Lehrer’s New’s Hour, Jared Diamond,  provided a much more plausible answer based on his book Collapse: How Societies Choose to Fail or Succeed.

“One of the predictors of a happy vs. an unhappy outcome (to the economic collapse) has to be with the rule of the elite or the decision makers or the (more…)

February 8, 2009

La Belle Rand Sans Merci

Filed under: Who knew? — debacled @ 9:16 pm
 Money is the barometer of a society's virtue.

Ayn Rand flashing Alan Greenspan's fraternity pin.

Could Alan Greenspan’s  half-century old mad crush be responsible for the current financial collapse? As an early disciple of Ayn Rand’s “Objectivism,” the blame chain may well have started with the future Fed Chairman sitting at his mentor’s feet in a swoon over this siren call:

Government ‘help’ to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off,” Rand purred, and he was lost–and now all these years later so are we.

Back in the ’50s  Alan Greenspan began a relationship with the Hollywood screenwriter turned novelist/philosopher that lasted until her death in 1982.  How deep was his love?  Here is an excerpt from a 1963 article he wrote in Rand’s monthly journal The Objectivist “The Assault on Integrity”:

“Protection of the consumer against ‘dishonest and unscrupulous business practices’ has become a cardinal ingredient of welfare statism,” Greenspan wrote in an article for Rand’s Objectivist journal. (more…)

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