Archive - Sep 2008
Sometimes, when you are sick, you need to take more than one medicine to get over your ailment, and it seems as if this may be what we need to be looking at for our economy. A recent Washington Post- ABC News Poll reports that nearly nine out of ten respondents ‘expressed concern that the failure of the bill could lead to a more severe economic decline’, yet respondents also narrowly opposed the bill 47 to 45.
How can this be? Perhaps it is because the Paulson plan is like one of those pills you need to take when your sick. By itself, it is useless, or perhaps even dangerous, but taken in combination with other pills, it is exactly what is needed to cure our ills.
Let’s look at what our ills might be. The most immediate concern is a liquidity crisis. Everyone who has cash wants to take it out and sit on it. They don’t want to lend, especially short-term funds, during this time of economic uncertainty. This presents problems for would be home buyers, car buyers, or purchasers of other big ticket items, as well as the companies that sell to them, and to companies that need short-term funds to meet operating expenses. Declines in these areas could significantly further weaken our economy.
A plan like Paulson’s would inspire confidence in short-term lending, reduce the liquidity crisis and get the economy going again. Yet at the same time, the high-pitched rhetoric about how we need the plan passed immediately only adds to the lack of confidence.
Let me go back to the medical analogy. If you go to a doctor with a really sick child, and the doctor is calm, but serious, you are more likely to be calmed down. “Yes, ma’am, you child is very sick. We will work carefully and deliberatively to make sure that your child gets the best treatment possible.”
On the other hand, if the doctor’s start screaming, “Oh my God, I’ve never seen anything so serious. We have to do something right away.” Then rushes into the operating room without so much as scrubbing or putting on a gown, it is unlikely that the mother will reassured. This is one of the biggest problems with the Paulson plan.
The other problem is that it does not properly address why we have a liquidity crisis in the first place. People can get all distracted by these complicated derivative securities, but underneath it all is the problem with housing. Housing prices soared over the past eight years and we are seeing a correction in housing prices. This, together with a weak economy, has resulted in high foreclosures, bankruptcies and a decline in housing prices. Unless something is done to address this underlying issue, we will still have difficult times ahead.
According to Bloomberg News, various other proposals have been put forward, including options to get the FDIC involved issuing lenders certificates they could use as capital. This option seems to have Republican support, but not Democratic support. On the other hand, some Democrats are pushing for ‘a provision that would allow bankruptcy judges to alter the terms of a home mortgage for individuals in bankruptcy, even reducing the principal balance’, an option opposed by many Republicans.
I think both ideas are good and should be included. As a matter of fact, they should be linked. Mortgage modifications by bankruptcy judges should automatically be sent to the FDIC for review as part of issuing a certificate.
Beyond the housing crisis, there are other aspects to our financial situation that need to be addressed. T. Boone Pickens talks about the money that is flowing out of our country to purchase foreign oil as the largest redistribution of wealth ever. I do not agree with many aspects of Mr. Picken’s plan, but I think he raises an important point. Until we change our energy consumption habits, our economy will continue to have difficulties.
So, any economic recovery plan, must include provisions to move the United States towards energy independence. Ideally, this should focus on clean, renewable energy and conservation. If we were to spend $700 billion on making the United States the leader in clean, renewable energy, we would change the economic environment drastically, creating new jobs, new hope and a cleaner and safer world.
As with any sort of illness, it is not uncommon to require multiple treatments at the same time. I do not know if the three treatments I am suggesting are the best out there. Instead, we need a serious discussion about which treatments are best, and we need to stop the hysteria of selecting one treatment, right now, at the expense of others.
A problem that a traveler faces when he tries to follow the path of someone who has gone before can be ambiguity about the next destination, and as I read the early pages of William Least Heat-Moon’s Blue Highways, I ran into precisely that problem. First, I missed the starting point of Columbia and started off in St. Louis. Perhaps I’ll circle around back to Columbia next. Then, when he referred to Lebanon, I thought he was still in Missouri. There is a Lebanon, MO southwest of St. Louis. It didn’t make much sense, because I thought Least Heat-Moon was heading east, but I started looking into Lebanon, MO nonetheless.
I started off at the Lebanon, MO website. I learned that Lebanon is on an old Indian trail that during the Civil War became known as the “Wire Road” because of the telegraph wires from St. Louis to Springfield. Later, the road became known as Route 66, and then Interstate 44. Get your kicks on Route 66 came to mind as I explored the town a little more.
I checked the lists of restaurants online, and besides the Applebee’s, which I imagine to be just off the Interstate, I found links to many interesting local eating establishments. Yelp pointed me to Django’s Coffee House. It talked about Ken Chappell’s quest to have “a place to go, a hangout, a place with live music, great coffee, great food.” It talked about starting Django’s and some of the changes over time. It talked about the Open Mic on Friday nights, but didn’t list any of the performers.
I sent an email off to Django’s to get more information. They responded, apologizing that the website wasn’t up to date. They had moved and I’m still not sure I know the exact address. I prepared some follow up questions. Least Heat-Moon talked about Lebanon as ‘a brick-street village where Charles Dickens spent a night in the Mermaid Inn’. I was going to ask if the Mermaid Inn was still there and if the proprietors of Django’s had been there or had any stories. First, I checked online.
I found an article that described Lebanon as being twenty three miles to the east of St. Louis. To me, it looked like it was around 150 miles south west of St. Louis. It wasn’t even twenty three miles away from Springfield. Then, it struck me. The Mermaid Inn, twenty three miles east of St. Louis is in Lebanon, IL, not Lebanon, MO. Now, it made sense. Least Heat-Moon had talked about State 4. I hadn’t been able to find Missouri State Route 4 anywhere on the maps. That is because State Route 4, which runs through Lebanon is in Illinois.
Nonetheless, I spent a bit more time checking out Lebanon, MO, and figured that I’d catch Lebanon, IL when I get back on track. One thing I found out about Lebanon, MO was the magnetic waters. People would travel from miles around to take advantage of these healing waters in Lebanon and stay at The Gasconade Hotel. Not the same as the Mermaid Inn where Dickens had stayed in Illinois, but another interesting Hotel in and of itself.
I looked around to see if I could find any locals to speak to. Using Twitter Local, I found Sana Abdul Aziz. She listed her location as Lebanon, MO, but described herself as an English Language and Literature major at SNHU. Best as I can tell SNHU is Southern New Hampshire University, but given my confusion between Lebanon, MO and Lebanon, IL, who knows. She spoke about her desire to soon be an ex-truck driver and I read a poem she had written about being on the road in a Kenilworth. My only means of contacting her was through Twitter. She posted sporadically and had recently posted about being sick. I sent out a message in hopes of getting a reply, but as I sit down and write this, I haven’t seen a reply.
There were others from Lebanon that I tried to reach out to, but without any success.
In the email from Django’s they spoke about Lebanon being your typical small town, nothing special. In fact, it is that aspect of being a typical small town that you get as you go beyond the Interstate and Applebee’s that makes it so special and interesting.
It is one of the hazards of trying to follow someone else’s path. You sometimes take a wrong turn and end up somewhere very different from where you intended to be. However, it is precisely these little experiences that can make the trip so enjoyable.
So, right now, I’ll plan on circling back around to Columbia, then I’ll head back through St. Louis and make it to Lebanon, IL. If you’re somewhere along the way, wave to me virtually, and let me know what to look for.
Over the past few days, I’ve been receiving more and more emails from State Legislative candidates trying to reach the Citizen Elections Program (CEP) goals. To quality for funding State Representative candidates need to raise $5,000, with at least 150 of the donations, ranging from ten to a hundred dollars coming from people living in towns in their district. The hurdle for State Senate candidates is similar, except it is $15,000 from at least 300 people. Some of the panicked emails talked about the deadline being early October.
Since Kim is a registered Lobbyist here in Connecticut as a result of her current role as Senior Organizer for Common Cause in the State, the regulations about spouse’s of lobbyists apply to me. This means two things. First, I cannot contribute. So, to any of you that have contacted me, sorry.
In addition, I cannot help in fundraising activities of these candidates. Otherwise, I would post something here talking about candidates that I would like people to support.
However, I also have another role. I am a citizen journalist. I can, and feel compelled, to write about what is going on with the State Legislative races in Connecticut. In this role, I downloaded data from State Elections Enforcement Commission (SEEC) about the status of the CEP program.
As of this morning, their site listed 299 candidates. 263 of these candidates, or 88% of the total candidates are participating in the CEP. Massaging the data, it appears as if 241 of all the candidates are in competitive races and 58 are not. For those candidates in competitive races, 219, or 91% are participating. 44 of the remaining 58 candidates, or 76% the candidates in non-competitive races are also participating.
Of the 263 candidates, 136, or 52% have already qualified. When you break this down by House and Senate, we have 204 candidates running for the House and 114, or 56% have qualified. On the Senate side, there are 59 candidates, but only 22, or 37% have qualified.
It appears as if the $15,000 hurdle is proving to be larger than people had anticipated. My hypothesis, based on anecdotal evidence is that the hurdle is also tied to how wealthy the district is. The candidates that I’m have already easily met the goal come from fairly wealthy districts and the candidates that I’m hearing are having problems are coming from fairly poor districts with some obvious exceptions.
This isn’t surprising. The difference between the median income in the riches communities in Connecticut and the poorest communities is close to ten to one. When I have more time, I hope to cross reference the data with census data for median income by zip code.
However, before I do that, I hope to clean up the data that I have a little bit. It appears as if the data from the SEEC is incomplete as I’m finding examples of races where no competition is listed that I’m fairly sure are contested districts.
Nonetheless, the data should be looked at more closely to better understand what is working and what isn’t working with the Citizen’s Election Program.
As I was reading the blogs this morning, I stumbled across Bill Reichart’s blog post about Pulpit Freedom Sunday. Here is the comment that I added to the discussion there.
My wife works for a secular non-profit advocating on specific legislation related to the beliefs of members of the organization.
As such, they regularly speak about issues that matter to them, but cannot endorse specific candidates.
If they wish to endorse specific candidates, they need to change their status from being a non-profit 501(c)3 to being a taxable 527.
Leaders and their members are free to say whatever they want. However, if they engage in electoral politics they lose their tax exemption.
I believe that the same should apply to any organization, no matter what their beliefs, and organizations that willfully and flagrantly violate the tax code should lose their tax exemption.
If pastors want to chose who the next Caesar will be, then they should render onto Caesar what is Caesar's.