Vice President Joe Biden is coming to my neighborhood today to talk about the stimulus package. It seems that a group is trying to get money to take the old American Can Company building and turn it into apartments or condos. This would help our neighborhood if the project was a success, but I am not sure why we need Federal money to get this done, if the project can stand on its own. I can go along with roads and bridges, but I am not sure I like condos being built with my tax dollars. If it is a loan, or a guarantee behind a loan, I can see it, but a private, for profit project, should stand on economics alone. So, I am going to clean myself up and walk down to where Joe is going to speak at 10am. I wonder if he wants to hear from me about the credit rating agencies?
Here in Ohio we have this Congressman who talks out of both sides of his mouth at nearly the same time. (Perhaps a trait that one has to have to be a Congressional Representative.) Anyway Congressman John from up the road in Westchester wants to take credit for shovel ready jobs while at the same time bashing the Dems for the Stimulus Package in the first place.
And, here I am, trying to write about economics and the markets and monetary policy and the credit rating agencies. I think, or should I say, I know, most Americans don't know enough about their own money to bring about the changes that are necessary to prevent another financial crisis, bond market meltdown or economic crisis.
So, I am going to take a walk and see Joe speak. You all have a nice day, and don't worry about money & banking, I will do that for you.
Stay tuned.
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11 comments:
Now you have struck a nerve with me.
CDBG grants and EDA free money. Otherwise known as the bounty that makes the natives behave in the fiefdom.
It goes like this. I work. I turn something from nothing, a resource, my skill, into $$. I give 30% of my work to the government. I give 30% of my work to insurance companies and utilities. (Note the chain of command). Then I have maybe 20% left to spend locally. The math doesn’t work, I know. Then there is this little 10% bad boy called surety, which should be savings.
The feds get 25% of my government money. They in turn take part of that and create these little free buckets of money called CDBG grants to give to the Governor to give to the people. Sadly, it would stagger your imagination to know how long and how much local governments depend on grants to survive.
The up side, we would be a 3rd world country if we didn’t have fed involvement. The locals would cut taxes back so much they would not be able to build a road or in your case invest in an economic stimulator. Worst off, a couple of people with money would buy up all the property because values would be depressed and they could and what a really bad fiefdom.
The down side, it never works out as intended. As you have put your finger right on the pulse, it lands in the hands of private investors anyway, mostly attorneys and engineers.
I like to call that Knuckleheadnomics. It’s like pushing on a balloon. You push one place and it pops out somewhere else.
You watch, they will bill this project out as “affordable housing.” You wait.
Sorry for the long post.
I just read your piece about the need for the Fed to control CRAs. I'm a journalist and I'm working on a piece about credit bureaus, and I'm currently chasing leads of people to talk to. You seem to have something on your mind about the CRAs, and I wonder if I could speak with you? My email address is jonathankaufmannathan@gmail.com.
Jono,
I sent you an email. Hope you got it.
I am happy to talk with you about the CRAs.
I have written several earlier posts about them.
You can also reach me at my email address:
fdzigler@yahoo.com
I love the Republican speak lately - as they bash the Stimulus package as being unnecessary. "The economy is going to rebound anyway" or words along those lines. And true. It will. But if you want a picture of what would happen if the Feds did nothing - or too little - just look to Japan and their 10 YEAR recession - which they've suffered through mainly because the government there did too little, too late, all along the way. Thank you, GOP, but I don't want to live through a 10 year recession. Stimulate me, baby.
Ahhhh. Maybe the day has finally come Fred.
I like ducksmahal's post and to go along with this I would like everyone to watch this video on YOUTUBE. Draw your own opinion. I'm sure the gentleman from Westchester wouldn't like it.
http://www.youtube.com/watch?v=jeYscnFpEyA
There's been talk of another stimulus plan....
Here's my idea for a stimulus....
The government mandate that every home loan mortgage originator (or current holder) allow indivudual home owners (not investors) the option to renegotiate their mortgage at the CURRENT appraised value. Any home appreciation from this point would belong to the loan originator.
The debt holders get future appreciation, the current home owner is no longer under water and probably has a smaller monthly payment.
I went to the Biden rally this morning in my neighborhood of Northside. I listened to Joe's speech and then I walked up to where he was shaking hands and saying a few words to the people in the crowd. I shook hands with the V.P. and told him that what needed change was the credit ratings agencies. I also mentioned that I thought they were corrupt. He said they have something coming out about that. So, I guess I wait and see if they really are going to correct the conflict of interest that the CRAs have with the investment bankers who pay them for the ratings. Maybe they have gotten the word. Hell, we all know this shit isn't rocket surgery.
Welcome ducksmahal,
Glad you decided to join us. We always are interested in what you have to say.
And, I enjoyed your blog, especially about the check list for your MIL.
Please feel free to become a MONEYTHOUGHTS HEAD.
Government money is often used in housing if a percent of the units are reserved for "affordable housing." Here in Bellingham, we have a project under construction that is a mix of subsidized units and regular market units. Mixing of incomes is good. Quite a few local working people can't afford the housing market without a boost. It seems like in the local market, there are still no codos under $100,000. Many workers, like me, make $10 per hour or less. This project I mentioned is rentals rather than condos, I think, but some rents need to be subsidized in this inflated market. Bellingham is still inflated. Some projects are also mixed condo and rental units. I like bringing people of different incomes together.
Mr. Zieglar. Thanks for the welcome.
I have become deeply entranced in your postings. Your skill and depth of discipline and research in your field has afforded you the ability to refine your words to simple terms of art that anyone can understand.
It is my hope that I see you on Sunday morning TV with the usual suspect pundits and refine their analysis. You clearly in my view are able to grasp the many prisms of this entire economic freeway collision and have articulated the light which Congress has reflected on the science of economic legislation. There in lies the permissive mechanism be it intentional or accidental; the resulting affect is extremely consequential. I can’t be hyperbolic about that.
Why haven’t I read you sooner? Somehow you need to be published on a wider scale.
There you go Fred, another customer for the book you are working on.
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