Mark Souder takes the “big government” stance AGAIN
You should read today’s piece in the News Sentinel written by Bob Caylor. It discusses the views of all three candidates for Indiana’s 3rd Congressional District on the current bailout being considered by Congress.
On this blog several commenters have taken exception to the fact that I am voting for Libertarian William Larsen rather then “big Government” Republican Mark Souder this fall.
This article shows just one more reason why I cannot vote for Mark Souder for Congress.
I have posted a lot about the Socialist bailout of Wall Street on this blog and everyone reading this blog knows that I oppose it and why I oppose it.
Per the piece Libertarian Larsen opposes the bailout package.
Per the piece Democrat Montagano says “he would not support such a bailout unless benefits for more individuals are added.”
Per the piece Republican Mark Souder says “some type of bailout is necessary…”
Further he says that after consultations with experts from Bank of America and JP Morgan Chase that “Federal support is needed unless you want to lose every bank in your district.”
What a complete load of BS.
Mark Souder should go and consult with local banks in his district rather then large banks located in New York who are poised to gain the most from this bailout. Mark Souder should call some local financial planners, CPA’s, bankers, etc. I talked to two other CPA’s today and three certified financial planners today. All six of us oppose the bailout in Washington DC. We all live in Mark Souders District and we are all small business owners in Mark Souder’s Congressional District.
Rather then talk to us he chooses to talk to Bank of America and JP Morgan.
I will be voting for Libertarian Larsen for Congress.
This piece shows yet another reason why.
Mark Souder is a “big government” Republican that has no grasp of economics.
Mike Sylvester
How the current financial crisis occurred, part 3
The third item that contributed to the current financial crisis are rules put into place in the last decade, mainly due to the collapse of Enron.
Congress passed sweeping regulation known as Sarbanes-Oxley. This act passed in a bi-partisan fashion with unanimous support in the Senate in 2002. In the House of Representatives it passed easily with almost all Republicans voting in favor of it and about 60% of Democrats voting in favor of it.
Sarbanes-Oxley changed financial reporting requirements and required a tremendous amount of new and costly regulation to be put into place. This regulations cost companies billions of dollars to comply with and has completely failed to prevent the current financial crisis.
Consider this, Lehman Brothers just paid over 31 million in auditing Fees to Ernst and Young for 2007 and recently got a clean fiscal bill of heath; months before filing bankruptcy.
Another relatively recent change are the mark to market accounting rules and FASB 157. Since the 1980’s there has been a partial shift towards fair value accounting in the United States. In fact, the SEC now plans on taking all Publicly Traded companies entirely to fair market accounting in the next few years. These rules have been implemented over the last 20 years’ especially the last few years.
In mark to market accounting rather then carry items at historical cost you have to “mark them to market” or adjust them to their current fair market value. In a volatile market this has had a tremendous impact on the balance sheets of banks. Basically banks have been forced to take large write downs of their assets as they have realized that many of their loans have gone into foreclose and will not pay the lender back.
Accounting changes have significantly contributed to the current financial crisis.
Mike Sylvester
Kos over at Daily Kos “nails it”
This is not something that I say often; however, Kos has a post on his blog Daily Kos that sums up the Wall Street bailout package rather well.
In his piece he warns Democrats that they will enable Republicans to distance themselves from President Bush if the Republicans vote against this bailout package.
He then goes on to warn Democrats that if this corporate bailout package passes with Democratic votes that the entire unpopular bailout will be blamed on Democrats.
He is so right on this one.
Any intelligent human being in Congress should vote against this abysmal bailout.
I heard polling data today that claimed that only 28% of those polled favored a major bailout plan.
It is six weeks before the Election; both parties should be careful with this from a political standpoint!
Mike Sylvester
Another reason Senators make bad Presidents and Vice Preidential candidates
As you know I have been wavering between voting for McCain or Barr for President. I am still wavering somewhat; however, if I were voting today I am back to favoring Libertarian Bob Barr.
Both major Party political candidates for President are US Senators as is the Democratic Vice Presidential candidate.
Congress is debating what will likely be the largest bailout since the Great Depression, in fact they are considering a bill that could dwarf all previous bailouts.
That being said all three candidates are likely to skip the Senate vote on the bill in order to campaign for President and raise money.
There are only 100 Senators in the US. Three are too busy with the Presidential campaign to bother attending this Senate vote. In fact, the truth of the matter is they are all three too busy to be bothered with being involved in hardly any Senate votes…
What a sad state of affairs.
All three men should be completely ashamed of themselves and all three are failing in their duties as US Senators.
Mike Sylvester
Summit City Health Care Summit
Dan Jehl of Fort Wayne Public 1 has spent a tremendous amount of time organizing the upcoming Health Care Summit and, based on the agenda, it looks like he’s done a fantastic job.
SUMMIT CITY HEALTH CARE SUMMIT
This health awareness forum is sponsored by Public 1, Inc. and cooperating community Sponsors including Parkview Hospitals, St. Joseph’s Health Foundation, Lutheran Hospitals, University of St. Francis, Ivy Tech, IPFW, etc.
September 24 Downtown Public Library Free Admission
MORNING SESSION
9:00 a.m. Welcome and Introduction, Karen Goldner (D-2), FW City Council
9:10-10:00 The Health of the Nation, Dr. Jon Walker, Practicing Physician with Allen County Retinal Surgeons, National Physicians for Health Care, and recent winner of Fort Wayne Business Weekly’s Healthcare Heroes Award
10-10:30 Behavioral and Mental Health and the Community, Paul Wilson, CEO, Park Center, Fort Wayne, Decatur, and Bluffton
10:45-11:30 a.m. Community Health and Programs of Fort Wayne and Allen County, Deborah McMahan, M.D., Director, Fort Wayne City-County Health Department
Note: The State of Indiana Office of Medicaid, a patient advocate from Matthew 25, and Lutheran Hospitals will be present at community resource/ information tables, with information on city, county, community, and state health resources.
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NOON SESSION Noon-1:00 PM
The Present and Future of the Fort Wayne VA Hospital and Medical Center
Moderator: Charlotte Weybright, Publisher, Berry Street Beacon, Advocate and Writer on VA
Tom Hayhurst, M.D., Fort Wayne physician and civic leader
Eve Bratton, RN, Veteran’s Hospital and Medical Center, ASK Ministries, and recent Fort Wayne Business Weekly Local Heroes award winner
Rev. Phillip Johnson, Associate Pastor, New Joshua Church, and war veteran
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AFTERNOON SESSION 1:00-2:00 p.m.
Keynote Address: The Health of Hoosiers
Introducer: Allen County Commissioner Linda Bloom
Indiana State Health Commissioner Judy Monroe, M.D.
AFTERNOON SESSION 2:00-3:00 p.m.
Is there a National Solution to Better Health and Healthcare for All?
Woody Myers, M.D., former State Health Commissioner, representing the Sen. Barack Obama Campaign
Rep. Matt Bell, representing the Sen. John McCain Campaign
Julia Vaughn, Healthcare Policy Consultant , Citizen Action Coalition of Indiana
My (Radical?) Ideas For Changing Indiana’s Liquor Laws
The battle over Sunday alcohol sales is still raging and some liquor store owners oppose the proposed expansion according to an AP article in the NS:
Liquor stores already face stiff competition from drug, grocery and convenience stores and would have to open on Sundays to maintain their market share if the law were changed, said John Livengood, president of the Indiana Association of Beverage Retailers.
“For many of them, they are still small-business owners who run their own businesses and man their own cash registers,” Livengood said. “That is their only day off.”
I can see their point but that is no reason to force everyone to adhere to their preferences. If they don’t want to sell alcohol then they don’t have to as the state isn’t going to force them to stay open.
This topic irritates me every time I think about. First, the government has absolutely no right to determine when and where private businesses can sell a product. Second, the regulations put in place by the state only serve to line the pockets of distributors who in turn kick back campaign contributions.
Did you know that a bar must buy their alcohol from a distributor and if they run out of something on Friday night they can’t just run down to the local liquor store? And or course, because of this distributor monopoly, bars pay vastly more than you or I do for alcohol and that cost gets passed directly to the consumer. Here’s what I would do to change the law:
Another post from Daily Kos I have to agree with
Two posts from Daily Kos I agree with in one day.
This one is from Hunter and you should read the post.
I want to state that I am 100% against the bailout package being considered in Congress. It is absurd. It is socialist. It forces the taxpayers to bail out companies that have made massive profits and taken excessive risks.
First of all the bailout does not fix anything; instead, it forces the taxpayers to bail out companies that have made mistakes. It does not fix the core problems.
Second of all the bailout will cost the taxpayers between 700 billion and two trillion depending on the final package. I feel that it will likely cost us at least 1.2 trillion dollars so I will use that figure.
This 1.2 trillion would be used to buy up toxic debt and save Wall Street firms from imminent failure. This is what the idiots in Congress are currently considering.
I agree with Hunter over at Daily Kos. I would rather see this money printed by The Treasury and directly mailed to the taxpayers. I do not want to see a dime spent on Wall Street.
The IRS has estimated that 130 million taxpayers will get an economic stimulus payment in 2008 (Most already have it). If we were to remove the income limits and just mail new bailout stimulus payments to all taxpayers regardless of income and regardless of the number of children they have we would be sending checks to about 150 million Americans.
If we spent the same 1.2 trillion Congress wants to waste on Wall Street then each taxpayer would get a check for $8000 in the next few weeks.
Taxpayers would then take those checks and spend them.
This would most likely have a much stronger effect on the economy then what Congress is considering.
Taxpayers would most likely choose to spend their bailout stimulus checks to catch up their mortgage payments. This would allow many Americans to stay in their homes for at least a year longer. This would allow many Americans to catch up on late bills and pay some of their credit card debt. It would allow many Americans who are behind on their car payments to catch up on their car payments. This would result in Americans removed debt from their personal balance sheets and these payments would shore up the balance sheets of Wall Street firms as well.
Many Americans also would likely save some of this money and this would shore up the banking deposits and hence reserves.
This plan certainly stimulates the economy and it would put money into the banks, mortgage companies, finance companies, etc. It would also stimulate consumer spending.
Better yet this plan would send money to every voter and would not send money to those whose failed policies created this mess.
This plan is far more “fair” then what they are currently proposing. At least this way everyone gets some of the money not just Wall Street.
I prefer the bailout plan listed above to the one being considered by Congress.
That being said I 100% oppose the bailout plan being considered by Congress. I also would oppose the bailout plan listed in this post; however, it would be a far better plan then the one being considered by Congress.
If either Democrats or Republicans embraced the plan I denoted in this post and passed it through Congress they would win the next election in my opinion.
What do you think?
Mike Sylvester
How the current economic crisis occurred, part 2
The second item that significantly contributed to the current financial woes of many of the nations large investment banks is an excess of the use of debt and leverage.
In the last 25 years laws have been passed that allowed additional institutions to carry mortgage debt including insurance companies and investment banks. This has caused mortgages to be held by many more companies and industries. These laws also allowed companies that were not heavily regulated as far as their balance sheets are concerned (Investment banks etc) to accumulate a size-able amount of mortgage debt.
In the last 25 years laws have been passed that have caused the SEC to not have the amount of regulatory authority they used to have and use. The SEC has been minimized and has loosened its controls on the financial sector significantly.
In the last 25 years laws have been passed that allowed companies to have lower reserve ratios then used to be required. This basically allowed these companies to have insufficient capital on hand in case of an economic downturn (Such as the recent real estate downturn). Basically they borrowed more and more and took larger and larger risks in order to realize a higher profit; however, they were not ready for an economic downturn from a capital perspective.
Complex financial derivitives were intoduced that allowed companies to take even more risk and supposedly protect them against risk. One such derivative is a Credit Default Swap. These instruments are very complicated and even Warren Buffett admited publicly that he did not understand them.
Short selling became rampant when there was a panic on Wall Street and this in turn cuased the financial sector to drop further as speculators bet against the financial sector by short selling their stocks.
All of the above items contributed to the problem and all of the above items made the following true:
Companies leveraged their money fully, accumulated large amounts of debt, and created a financial situation for themselves where real estate prices had to continue to rise at historic rates to keep the companies making large profits.
Those of you who have read my blog posts over the last couple of years know that I continually harp on the fact that we have too much debt. The Federal Government is in way too much debt. Most States, cities, towns, municipalities, school districts, etc. are in debt. Most companies are in debt. Most taxpayers are in debt.
Well, too make a long story short, I was right. We do have too much debt and the effects of that are finally starting to be seen!
Mike Sylvester
How the current economic crisis occurred, part one
I have had several people email me and ask me to take a shot at explaining what went wrong in our financial markets and who is at fault. I have done a lot of research and I have read the views of many economists, accountants, politicians, regulators, auditors, and other financial experts in the last couple of weeks. I have made it a point to research the views of conservatives and liberals.
I am going to have a series of posts outlining how we got to this point and who is at fault.
The first part of the problem is a “bubble” in the real estate market. Median home prices in the US were between $89,000 and $135,000 when adjusted for inflation between 1890 and 1915. They dropped to $74,000 - $98,000 between 1915 and 1945. From 1945 - 2000 they ranged between $98,000 and $135,000. From 2000 - 2007 the inflation adjusted price for the median priced home in the United States increased to between $135,000 and $225,000. In 2007 the median price fell. Here is a chart for your viewing pleasure.
This is a classic “bubble.” Anyone looking at this chart should realize that housing prices had increased by a huge amount and that eventually they would likely ”correct” and fall in price.
From 1890 - 2007 the inflation adjusted median home value in the United States has ranged between $74,000 and $225,000. For 80 of those years the median home price in the US when adjusted for inflation ranged between $98,000 and $135,000. For thirty years (1915- 1945) the inflation adjusted median home price was $74,000 - $98,000. For seven years (2000-2007) the median house price adjusted for inflation was between $135,000 - $225,000.
Basically home prices increased to levels that are far above the historic norm for housing prices in the United States of America.
The last part of each of these posts will discuss who is at fault. It is a presidential election year and I hear Democrats blaming Republicans and Republicans blaming Democrats. I personally feel that the two major political parties are JOINTLY at fault along with those who purchased more house then they could afford, lending institutions, regulators, etc. MOST of the laws that led to this mess passed on a broadly bi-partisan basis.
I feel the large increase in residential housing prices was caused by the following:
- Policies were enacted by politicians in a bi-partisan fashion that required banks to lower their lending requirements in an effort to allow easy money to be available so that more people could purchase a house.
- Policies were enacted by SOME lending institutions to lower their lending requirements even further then required by Congress and make money easy. Note there are many small local banks that are NOT in the middle of a financial crisis because they did not make a huge number of bad loans. In many cases the larger lending institutions had lower lending standards then small local banks. It was easy to get mortgages even for people with bad credit a no money for a down payment.
- Consumers seemed convinced that housing prices would continue to rise at unprecedented rates. Many “professionals” were “touting” the “fact” that home prices would continue to rise. This list includes, politicians from both Parties, Realtors, mortgage brokers, lenders, and many more.
Basically it became far too easy to borrow money to purchase a house. Consumers borrowed far too much money and lenders decided to allow consumers to borrow excessive amounts. This “easy money” in turn forced home prices even higher!
Mike Sylvester
FWP Polling
We’re going to try putting polling questions up in the right sidebar underneath the local blogosphere widget. These polls will typically deal with local policies and politicians. I understand this isn’t a scientific sampling of the entire community, but I thought it might give us an interesting insight into the demographics of FWP readers.
So if you’re reading this then please take 5 seconds to vote in the current poll. I’m not sure how often we’ll update the question - I suppose it depends on how many people vote…
