It's the Economy, and I'm Stupid

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Tag(s): Banking; Bankruptcy; Conspiracy; Credit; Democratic; Economy-Economics- US; Edwards John; Information; Internet; Kucinich-Dennis; Obama-Barack; Politicians; Poverty; Reform; Sub-prime; Truth
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January 22, 2008 at 10:29:15

It's the Economy, and I'm Stupid

by Kevin Gosztola Page 1 of 2 page(s)

http://www.opednews.com

What can any of us do if we do not fully understand the scope of the problem that we are facing? If we do not realize the connections between everything monetarily and how economically they all combine to have dire effects for us, than we stand mute unable to speak the truth about what’s happening.

The Nevada debate awarded to three of the five remaining Democratic candidates for president by General Electric had one thing good come out of it: a question was asked connecting foreign money to home foreclosures. It brought forward slightly (I believe) the idea that outsourcing and offshore tax havens have had an effect on how loans are conducted in America. It also linked those evasions of American policies to the scandal going on with the subprime loan industry.

It didn’t go any further. It left Americans like me who are in the dark on the whole scope of the problem with the economy still thinking compartmentally. It left us unaware that fixing home foreclosures can only happen if you reexamine bankruptcy laws. It ignored taking a look at the credit card and banking industries, which graciously allow this mess to be wrought upon us all. It ignored hedge funds, which to tell you the truth I wish I could look my father straight in the face and explain to you how those work but despite all my research, he does not know because I cannot coherently tell him what hedge funds do.

“It’s the economy, stupid” was a fitting phrase during the 1990s and the age of Bill Clinton or Clintonomics. Now, a better phrase might be, “It’s the economy, and I’m stupid so…” And the dot dot dot or ellipses signifies a trailing of thought, a trailing that occurs because we are ashamed that we cannot fight this because we do not understand this and don’t know how to understand this.

We don’t know how to convey the scope of this problem to the American people because it is reported to the American people in fragments and connecting it all together makes everything seem like a conspiracy. Conspiracies don’t happen in America (that’s what the history books children get their education from would like us all to believe, right?).

Without being able to comprehend the scope of the problems with our economy, how can we as a nation know who does and does not out of the field of candidates understand fully the subprime loan scandal and all the other issues with our economy? When they tell us they get it, how do we figure out if they do or do not?

It's a sad thing to suggest that we are incapable of electing the right man but it's a definite possibility that America has reached a point where we truly are blind to the defects of our leaders. It's even possible we do not know what defects look like in a leader anymore.

Having watched Chairman Dennis Kucinich run Domestic Policy Subcommittee hearings on urban America and discuss the economic turmoil we are in, which directly addressed the subprime loan scandal in America, I am almost there. Having heard of hedge funds numerous times from him in speeches, I think I am getting closer. And hearing about foreign investment in Dubai having effects here that are not good, I might be just shy of connecting the dots and producing a fine exposé for you all to read.

Connecting the dots via Google or however you seek to gain your information is the best thing we can do if we seek to fix the economic problems in this country. I have the LexisNexis at my disposal since I am a college student. Combined, there is no reason I cannot know of the filthiest and dirtiest dealings in America unless the powers that be have succeeded in keeping them hidden.

But for those who do not have Internet or LexisNexis access, where do they go? We’ve uncovered the Poverty of Knowledge in America. It combines with the Poverty of Understanding and Education in America to allow for mainstream corporate media to be the only source of information we tap into. That poverty results in Americans not realizing they aren’t being told the full story or not hearing certain stories. (I also know people who are afraid of the CIA or FBI harassing them if they knew the whole truth and so they are okay with being kept in the dark.)

My uncle didn’t know a New Hampshire recount was happening when it was reported on the Internet it had been awarded to Dennis Kucinich and Albert Howard who would each be paying for it from their campaign funds. And yet, when I told him, it’s not like he made the decision to never watch cable news again and just get information from the Internet or some public access television show like Democracy Now!.

The Poverty of Knowledge and the Poverty of Understanding and Education is perhaps primarily generational but it is also financial. Those struggling to get by haven’t the time or opportunities to muckrake---to go through endless amounts of information and put the pieces together for people to think seriously about.

So, it becomes the duty of people like me and you (if you write articles and get Diggs or Reddits) to connect dots for them, write about it, and find ways to get our articles or ideas published in the mainstream corporate media.

In my connecting of the dots for others who cannot, I came across the idea that bankruptcy reform bills passed in the past seven years have brought forth this sub-prime loan scandal or made it way worse than it would have been.

I started here at a place called Impact Lab where it says “2005 Bankruptcy Law Changes Causing Subprime Loan Scandal.” I continued on to a Business Week article titled, “Bankruptcy Reform Bites Back.” Then I came across the great CommonDreams.org where an article titled “36 'Democratic' Senators Vote For Credit Card/Banking Industry's Bankruptcy 'Reform” was published six years ago. It shows that John Edwards and Hillary Clinton both voted for it along with other Democrats who sold out the American people. And then I see Citigroup was involved in Tom Daschle’s district…

…Citigroup has invested hundreds of thousands in Barack Obama and Hillary Clinton. John Edwards has Citigroup invested in him but the amount has not been disclosed on WhiteHouseforSale.org.

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Kevin Gosztola goes to Columbia College in Chicago where he is studying film. He hopes to become a documentary filmmaker. He is currently working as a production assistant on a documentary called "Seriously Green" which traces the development of the Green Party throughout the 2008 election. He has a passion for journalism and writes articles or press releases in his spare time. Kevin Gosztola is also a student activist who believes in questioning the way America's systems work(its electoral system, its military-industrial complex, its foreign policy of American exceptionalism, its media which has become the Fourth Branch of government,etc.)
His ambitions have him currently organizing and raising money for a Chicago Conference for Media Reform in April or May of 2009. It will be organized by college students to promote youth involvement in media reform and justice. Those interested in attending or helping with the organization of the program should contact him.

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6 comments

Sherwin Steffin is a retired educator, and research analyst. His working career ranged from classroom teacher, university administrator, founder and CEO of two software companies, independent consultant, ending as a research statistician for a large Internet Service Provider. Although he has some mobility problems, his life continues to be productive and enjoyable. He spends his time doing online tutoring, reading writing entries in his blog, operating an online store, and dabbling a bit in ...

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Sherwin SteffinSherwin Steffin is a retired educator, and research analyst. His working career ranged from classroom teacher, university administrator, founder and CEO of two software companies, independent consultant, ending as a research statistician for a large Internet Service Provider. Although he has some mobility problems, his life continues to be productive and enjoyable. He spends his time doing online tutoring, reading writing entries in his blog, operating an online store, and dabbling a bit in ...

to see more of bio, click on member name

Here's one answer

No, you aren’t stupid!

In fact, what you have discovered is the world is a hell of a lot more complex than you once thought it was. Getting an understanding of that world doesn’t require that you have access to LexisNexis. Rather, it involves incorporating into your thinking processes that very few problem that human beings encounter have simple explanations.

Look at all the areas of disagreement that we hear or see in our daily news sources, whatever they may be. Is the Earth really experiencing global warming, and if so, to what degree is it caused by human activity vs. natural phenomena? What should the U.S. do about Iraq, Iran, and the whole of the Middle East? We are experiencing the beginning of a world-wide recession. What caused it, and what can be done to fix it?

You will find as you get older, you will develop your own view of the world which works pretty well in guiding your own personal explanations for complex human problems. I’ll tell you mine, but that doesn’t mean I am recommending it for you. You will have to come to terms with it in your own way, and wear it as comfortably as you wear your own skin.

So here it is – do what you want with it.

1. There is a constant war in the brains of all human being between the rational (thinking and reasoning) and the irrational (behavior driven by emotion).

2. There are really only two basic systems that drive all human behavior – Greed and Fear, and you can classify your observations of everyone you know as reacting to one or the other (and sometime both at the same time) of these stimuli.

3. Everything interaction of a person with others results in Winners and Losers. Example, those who play in the Foreign currency market, have done extremely well the last couple of months buying Euros and Selling U.S. Dollars. The same is true with those selling short on a variety of stocks. Others will lose their lifetime savings as their 401K portfolios dissolve to nothing. While in the end lots of people will lose if this recession runs unchecked for any extended period, there are some who are rubbing their hands together as they watch.

4. Winners tend to be those who are dominated and controlled in their behavior by the rational parts of their brain, with Losers those dominated by emotion. For me, every individual, who has been the victim of fraud, scam artists, and salesmen, has been victimized out of sheer failure to reason.

5. The sub-prime phenomenon is that simple and easy to understand. Those who fell prey to easy purchase of homes with variable rate mortgages simply never bothered (or were incapable of seeing) the consequences. (If something is too good to be true, count on it – it isn’t!) The banks that sold the mortgages were just as irrational, failing to look at what would happen when the housing bubble burst.

6. The same is true for the credit card industry. They gave out tons of credit, to people who will never be able to pay it back, and now that they are not, whether the customer goes bankrupt or not, that money will just not get paid… it’s that simple.

7. Then there is another group all together – the sociopaths who are entirely rational, incapable of feeling empathy, compassion, or guilt. Almost entirely male, they are estimated to make up 1-4% of the population. They know what they want, and they will let nothing stand in the way of their getting it. Where do they end up? They are the top executives of the corporations and guess what else? You got it, the politicians who get elected time and time again. To get a feel for these wonderful folks, read my articles, Congress and the Return of the Body Snatchers, and It’s All in the Brain. You will have a clear understanding of my own views in this regard, and you can come to your own conclusion about whether this is a realistic explanation for much of what we see going on around us.

8. Last but not least is the question of why and how the American Public let’s all this happen. For me, there is an excellent explanation offered by Robert Altemeyer, in his online book, The Authoritarians.

I’ll be interested in your thinking after you have read this material, and thought about the rest of what I said above.

by Sherwin Steffin (14 articles, 22 quicklinks, 1 diaries, 73 comments) on Tuesday, January 22, 2008 at 5:54:48 PM

Kevin Gosztola goes to Columbia College in Chicago where he is studying film. He hopes to become a documentary filmmaker. He is currently working as a production assistant on a documentary called "Seriously Green" which traces the development of the Green Party throughout the 2008 election. He has a passion for journalism and writes articles or press releases in his spare time. Kevin Gosztola is also a student activist who believes in questioning the way America's systems work(its electoral sys...

to see more of bio, click on member name
Kevin GosztolaKevin Gosztola goes to Columbia College in Chicago where he is studying film. He hopes to become a documentary filmmaker. He is currently working as a production assistant on a documentary called "Seriously Green" which traces the development of the Green Party throughout the 2008 election. He has a passion for journalism and writes articles or press releases in his spare time. Kevin Gosztola is also a student activist who believes in questioning the way America's systems work(its electoral sys...

to see more of bio, click on member name

I'll check it out

But I do wonder about your making this seem like this is just the way humanity works. I feel a lot of our behaviors were learned.

It's like what Dennis Kucinich says about how we learned to be violent and if we can learn to be violent, we can learn to be peaceful. It's probably harder to undo violence than it is to undo peace but the point being things aren't just the way they are because. It can be changed through education over a long term period of time.

I know you've thought I think this can all happen in the short term. I don't.

But I do think we need to figure out all the connections economically. We need to find a book by someone who understands this mess. We need to find some way to get this guy to go around and talk to people to help them see how money is being affected, passed around, etc. Tell people what's happening to the dollars they think they have which they don't have.

The sociopaths are making money off people who are desperate. And that desperation in my opinion comes from years of bad policies. So, the government should do something about it because we can. And so everything I want in the future involves a government getting the people to restore trust in it to function.

After trust is restored, than we can go from there.

by Kevin Gosztola (172 articles, 88 quicklinks, 62 diaries, 705 comments) on Tuesday, January 22, 2008 at 6:41:39 PM

The Risk Averse Alert is Power to Prosper

"Many will say to Me in that day, 'Lord, Lord, have we not prophesied in Your name, cast out demons in Your name, and done many wonders in Your name?'

"And then I will declare to them, 'I never knew you; depart from Me, you who practice lawlessness!'"

-- Matthew 7:22-23
GoldenTThe Risk Averse Alert is Power to Prosper

"Many will say to Me in that day, 'Lord, Lord, have we not prophesied in Your name, cast out demons in Your name, and done many wonders in Your name?'

"And then I will declare to them, 'I never knew you; depart from Me, you who practice lawlessness!'"

-- Matthew 7:22-23

A couple rebutals

I would take issue with a couple points you make here, Iceman.

#3. I believe capitalism offers power for creative investment capable of benefiting all. Let's take an example involving common stocks to demonstrate this (truth is there are other viable sources of investment capital beyond common stocks, but for now this will do). Capital made available for investment in a business can help finance the implementation of improved processes that lead to an increase in the productivity of labor. This reduces the cost of production. This, then, offers to even reduce the cost of the product paid by the end consumer.

So far, then, we have the business, and the consumer of its wares, benefiting. Improvements in productivity lower the cost of production, and so, increase the business' profit margin. Check business benefit. Some of this increased profit margin can be passed on to the product's end consumer, thus lowering the cost they pay. Check consumer benefit.

But what of investors and labor? Well, first, when profit margins are increased as a result of the improvement in productivity, then both investors and labor can financially benefit. Investors by way of how the improved earnings power of the business increases the value of their share in the business; labor by way of how wider profit margins make pay raises feasible.

And labor can potentially benefit all the more, too, were more time made available for other pursuits as a result of the improvement in productivity.

So, not every interaction among people always results in winners and losers. Some interactions are, in fact, win-win.

#5. One thing you neglect to mention in the fallout from the subprime mortgage crisis (regarding those who might be incapable of seeing the consequences of a variable rate reset) relates to the consequences of our society having perfected the art of turning a blind eye. I think it is safe to say most borrowers entering into a financial transaction as significant as a mortgage assume the lender would not act contrary to the lender's best interest. Can the borrower not rightly assume the lender has no vested interest in building a portfolio of non-performing loans? Indeed, the borrower also has every reason to believe regulators are on top of the situation, and would protect against a run-away, rogue lender who might threaten the very integrity of the mortgage market (let alone compromise the very underpinnings of the financial system, itself).

Yet, by perfecting the art of turning a blind eye, our government's regulatory agencies might rightly be looking down the barrel of criminal charges, as well as congressional representatives for lack of oversight, such as one might reasonably claim is leading to a "Breach of the Peace" (see U.S. Constitution Article I, Section 6).

by GoldenT (6 articles, 1 quicklinks, 1 diaries, 51 comments) on Saturday, January 26, 2008 at 7:45:33 PM

Steven Leser specializes in Politics, Science & Health, and Entertainment topics. He has held positions within the Democratic Party including District Chair and Public Relations Chair within county organizations.

Steven Leser writes for www.opednews.com, an internet only media site that has grown to become one of the highest traffic news sites in America, reaching more traffic, according to alexa.com, than all but the thirty largest daily newspapers in the US. Mr. Leser is one of t...

to see more of bio, click on member name
Steven LeserSteven Leser specializes in Politics, Science & Health, and Entertainment topics. He has held positions within the Democratic Party including District Chair and Public Relations Chair within county organizations.

Steven Leser writes for www.opednews.com, an internet only media site that has grown to become one of the highest traffic news sites in America, reaching more traffic, according to alexa.com, than all but the thirty largest daily newspapers in the US. Mr. Leser is one of t...

to see more of bio, click on member name

Good question re: Hedge funds.

Time I educated myself on this as well, and so I have. Good explanation here http://en.wikipedia.org/wiki/Hedge_fund

by Steven Leser (189 articles, 35 quicklinks, 32 diaries, 1263 comments) on Tuesday, January 22, 2008 at 9:07:01 PM

I live in the heart of America, and am haunted by the saying:
"Evil succeeds because good men do nothing." by Edmund Burke.

Albert Einstein had another way of saying it:
"The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing."

So I do what I can.
Edward Ulysses CateI live in the heart of America, and am haunted by the saying:
"Evil succeeds because good men do nothing." by Edmund Burke.

Albert Einstein had another way of saying it:
"The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing."

So I do what I can.

Here's a good place to start.

"To K. and T. -- and to all young people like them who are eager to learn the truth, whatever it may be, about the world they must live in, so that they may not make it worse than it is in trying to make it better."

Dedication, by author Harry Scherman within his book, published in 1938,
THE PROMISES MEN LIVE BY [Book review, March 28, 1938 issue of TIME Magazine:"Easy Economics."]

But first, seriously, make sure you really want to take the "red pill."

by Edward Ulysses Cate (0 articles, 0 quicklinks, 0 diaries, 214 comments) on Wednesday, January 23, 2008 at 1:53:28 PM

The Simple Answer

"One of the great American industrialists of our day—a man who has rendered yeoman service to his country in this crisis-recently emphasized the grave dangers of "rightist reaction" in this Nation. All clear-thinking businessmen share his concern. Indeed, if such reaction should develop—if history were to repeat itself and we were to return to the so-called "normalcy" of the 1920’s—then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of Fascism here at home."

-- President Franklin Delano Roosevelt 1944 State of the Union Address

The simple answer is returning the power of the purse to the People.

See Dennis Kucinich's H.R. 3400 - Rebuilding America's Infrastructure.

And discover:

How Roosevelt’s RFC Revived Economic Growth, 1933-45

by GoldenT (6 articles, 1 quicklinks, 1 diaries, 51 comments) on Saturday, January 26, 2008 at 6:07:18 PM