Not Without Guilt 2 (A Working Title)

I continue below with thoughts on the divisions within our nation. It is best considered as a continuation of the post linked in the first line of the body. It also is incomplete -- merely a beginning at looking at the divisions within the United States.

Education is obviously one of the issues that must be considered when we look again at the CNN example of the destroyed repossessed homes. But again, we must dig into the question of what we mean by education. This brings up the moral and cultural issues that are at the heart of our divided nation. We must seek to bridge the gap between at least two radically different ways of viewing the world.

So, where to begin? I think first we must look at different ways in which individuals are “educated.”

When we speak of education, the most common frame of reference is the public school system. It is the body to which we have consigned our children in the expectation that they will be provided with a basic set of skills which will allow them to not only function properly within society but which will allow them to succeed. But, then, I’m looking at education from my frame of reference which differs from some other group’s point-of-view.

If we look at a poor single mother who is trying to raise children, provide an income and basically just survive on her own, she may not see school so much as a place where her offspring can obtain a basic set of skills as she sees it as a babysitter. Perhaps she sees it merely as a place to keep those children out of her hair while she lies in a drugged stupor. Perhaps – well, there are thousands of “perhaps” that could encompass only a portion of the potential scenarios. But, what is a key here is that we first realize that the public schools are being asked to function in a role for which they were not designed. They should not be babysitters. They were designed to function as a place of learning for those who are motivated to learn – either through the threat of punishment from a parent who wanted the situation of their children to be improved from their own, or because the child truly desired to learn and improve his own situation. That is often not what we have today.

So, we see that the public schools as a source of education is a barely functioning entity today because it is tasked with goals for which it was not designed and is inadequately prepared. That leaves us with other forms of education.

The greatest source of education is a mentor. Most often, a mentor – especially for young children – is a parent who seeks to create a desire for learning and a sense of purpose for that desire. What happens to that portion of the learning process when both parents are working sixty hour weeks because they want to “get ahead” in life? What happens when the child is reared in a single-parent home in which survival takes precedence over special attentions to the needs of the child? What happens when the influences of our friends and neighbors seek to degrade the desire for success by replacing it with a desire for disruption or excess? What happens when the family is disconnected in such a way that “extended” family members are merely a phone number or address in a book and not a vital part of life? Grandparents can sometimes fill the role of a mentor when the circumstances cause an inability on the part of the parents. The disintegration of the family is a factor in the failure of our children to obtain an education that will lead them to function well in society.

...perhaps to be continued.

Not Without Guilt (A Working Title)

I present below, what might be considered the beginning of an essay -- or, perhaps it is the entirety of the essay in the event that I decide not to continue. Whatever it is, it is only a small piece of the puzzle that must be solved if the nation that we call the UNITED States of America is to truly be re-UNITED into a single nation. Today, we are not UNITED. Anyway, here are some thoughts....

Today as I ate my pizza from the buffet line at Gatti’s in Bowling Green, Kentucky, I watched CNN Headline News on the big-screen television hanging on the wall. Please realize that I don’t normally watch CNN, just as I don’t watch MSNBC or NBC or CBS or ABC news as a general rule. I find that their biases often get in the way of their reporting. However, when the proprietor has the television set to a particular channel, that’s usually what you are stuck with – just like in the breakfast area of whatever motel chain I happen to be using as my current home-away-from-home.

Anyway, the talking heads seemed incredulous that the repossessed homes in the particular Chicago area neighborhood where they had chosen to base their “news” story were in terrible shape. Commodes were ripped from the floor, there were holes in the walls, doors were off their hinges, trash was piled everywhere and the general shape of the property was worse than pitiful. The reporters seemed shocked that the homes were in such condition and felt certain that it could only be because of the ill treatment of the previous “owners” by whatever lender that had so viciously evicted them.

Is it a symptom, or is it the disease? I’m of course referring to the reaction of the newscasters, not the behavior of the previous occupants of the repossessed houses – but, then again, the same question could be asked about those former occupants. Was their behavior a symptom, or was it the disease? However, upon further reflection, perhaps we should define “what” behavior is the object of our question. Are we observing a behavior of protest at poor treatment, or are we observing a general attitude about life and a lack of caring for property? Is it an issue of education? Is it an issue of an oppressed group of citizens? Is it the result of drug abuse? Is it something else altogether?

There are no easy answers, just as there are no easy questions – at least no easy questions that have been properly framed with clearly definable intent. I believe the frame of reference from which the “talking heads” were seeking to deliver a “newsworthy” story was so totally foreign to the actual events about which they were reporting that they had no idea of how to pose proper questions or in any way to relate to the events. They fell back instead on the dogma of their beliefs – namely, that it was an issue of victims and bad guys – of course, the actor of bad behavior is never the bad guy, it is always the one who suffered at their hands that was being punished for bad behavior – i.e. the bank, or landlord, or the builder, or whoever.

The age-old dilemma of communication between men and women is a piece-of-cake compared to the ability of the liberal media to communicate with the average human being in the United States – or the other way around. (I considered including all people but really have no good concept of the ability of media in other countries to connect with their people – although I suspect the issue is universal.) Why is it that way? Is it due to cultural biases? Is it a result of education? Is it a function of personality types that seek media careers as opposed to those who don’t? What exactly makes it so difficult for media figures to connect with the average person? Is it an elitism springing from a career-based attitude that inculcates the “successful” media personalities? Whatever the source, there is clearly a disconnection between the reporters and their subjects – unless they are talking of other media types – which would include television, movie and many music personalities.

So, where am I going with this? I guess I am seeking to reason through what is happening in our country. The example of the CNN Headline News reporters is a symptom of many things. It is a manifestation of deep moral and cultural issues that are on the verge of tearing apart the basis for our nation – that is, the ability to present reasoned arguments and through the art of seeking accommodation through shared values and balanced compromise to arrive at solutions to issues of the day by seeking the common good. There is no commonality. There is instead a deep divide that is growing wider by the day. If it is not addressed, it will bring about the end of the United States of America – not just as we know it – but as a nation.

Texas Economic Star is Shining

Texas has long had a pro-business attitude. It is a state full of entrepreneurs in a governmental climate that supports their initiatives in many ways. With no state income tax, a budget surplus and excellent infrastructure many businesses are looking to Texas for their new home. The article below points to some of the strengths of the Texas economy and why it is growing.

The Lone Star State is Flexing its Muscles

While much of the nation is currently struggling with high unemployment and loss of industry, it is good to know that there are some bright spots in the U.S. economic picture. I believe that much of the struggle nationally is the self-fulfilling fear of the people. When people lose confidence in the economy it will falter. Although there is added caution in the behavior of some, the Texas economy continues to churn ahead in large part because of the can-do attitude of the state's business community. I hear remarks daily that can be summed up in the following statement: "Yep, it's a little tough right now. That just means we need to do things better and smarter." If only the rest of the country would get that message.

Let the entrepreneurs invest in the economy. The result will be jobs and more revenue at lower tax rates. Redistributing income is the wrong way to fix our economy. Our government leaders are in the midst of the largest redistribution scheme since the Great Depression. We are taking money from our children and grandchildren and giving it to corrupt and inept industries. Some of them must be let to fail gently but others need to come crashing down. It is time to start the rebuilding process. Instead, we are on the course of prolonging the agony into future generations. Not right.

Random Thoughts From Jacksonville Florida

It has been awhile since I have posted anything. My travel schedule has been crazy and will continue to be that way until almost Christmas.

I am writing this from Jacksonville, Florida, while waiting until time to board my flight west.

It has been a good week working in the Southeast. The people are friendly and the weather was great. Attitudes are good.

Every newspaper that I pick up has gloom-and-doom headlines about the economy and yet as I look around, I don't see it. Business is happening and people are spending money. There is certainly an underlying current of anxiety because people don't know what may really be happening in the economy. That anxiety is fed by the newspaper headlines. Yet, there lifestyles really haven't changed.

In agriculture, things really look pretty good. There is certainly some market turmoil -- but that's the way it always is. The markets go up, the markets go down. You do the best that you can.

The only negative that I've heard is a rumor that one very large outfit that is an industry leader is financed by one of the BIG 5 banks. The word is that their credit line has been squeezed.

So, why is our government bailing the big banks out? I know that it's because it would devastate our economy if they fail because it would create a cascading effect that would start with the big boys and work its way down until everyone was affected.

My thought though, is that they need to seriously consider breaking the big banks up into multiple smaller institutions. Kind of a Ma Bell breakup. Let's spread our risk instead of allowing it to concentrate into a few hands.

What bothers me is that the very banks that the Fed is propping up are the ones buying other financial institutions. If I had a bent toward conspiracy theories, I think we could certainly build a case that this whole financial meltdown smacks of a conspiracy to gain financial control of the world. But, being the rational individual that I am, maybe it's just a function of human stupidity instead.

Maybe I should run for President. Is there anybody out there that would vote for me?

Making Tough Decision

I almost titled this post "The Bitter Pill" but thought better.

The Senate has voted in favor of a $700 Billion bailout of Fannie Mae/Freddie Mac. Wow. $700 Billion is a lot of money no matter how you view it. What do the taxpayers get in exchange? We get to be in the mortgage investment business corporately (as in we're all in this thing together). We will own $700 Billion worth of mortgages which are secured by about $560 Billion worth of real estate (assuming a 125% of value mortgage).

Once we own those mortgages what will we do with them? The first hope is that we could re-sell them on the open market. That could be a problem. The one's the government will own are the one's no one else wanted in the first place. Will we foreclose on the properties for those mortgages that are non-performing? Hmm -- I have a hard time seeing that happening although it does in small doses already. FHA has been foreclosing on real estate for a long time.

Let's say that we eventually will recover about half of the $700 Billion by either selling the mortgages or the foreclosed properties. That means about $350 Billion will be non-recoverable debt -- that will be made up from taxes. That's what makes this such a bitter pill to swallow.

But, let's look at the other side of this. What happens without a bailout?

First, we have a bankrupt Fannie Mae and Freddie Mac. Their assets are liquidated by the court and the net result to the economy will still be a loss of about $350 Billion. But we also have all of the $5.3 Trillion in mortgages that were guaranteed by Fannie Mae/Freddie Mac whose guarantees are now worthless. Any of the mortgage based securities sold to various financial institutions and individuals that are non-performing are now worth considerably less than their previously guaranteed value.

In the case of securities held by individuals, it is a matter of writing down their value, taking the loss and moving on. In the case of those held by financial institutions there is suddenly a huge problem. When the securities are written down, the financial institutions must then "classify" those assets as non-performing. Those classified assets offset the capital of the financial institution and cause many to drop below the minimum threshold required by the FDIC or other regulatory bodies. It also drops the available funds for lending to borrowers even though they may be well-qualified borrowers. In other words, the credit market dries up and many banks fail.

What happens when the credit market dries up? Business comes to a halt. Grocery stores can no longer stock their shelves. Auto dealers can no longer extend credit because somewhere behind that dealership is a bank or other financial institution underwriting the loan. In fact, many businesses will fail if credit becomes tight. When businesses fail, people lose their jobs. When people lose their jobs in an economy which is contracting due to unavailability of credit, there is little hope of finding a new job. We enter into a Depression.

This financial disaster is NOT a Wall Street problem alone. It is a Main Street problem. It affects the stock market because corporations must have credit to operate. The real problem though is the impact on the credit markets. Without credit, our economy comes to a halt. The taxpayers are going to be hit whether a "fix" is passed or not. The hit will be much harder and much more severe without a fix. No fix means Depression and huge loss of equity in retirement plans and many other assets. A fix means buying time to come up with a longer-term solution.

I applaud those Senators, like John Cornyn, who voted in favor of the fix. They knew that it was not the popular thing on Main Street. But, they also know that it is sometimes necessary to make tough decisions. I mention Senator Cornyn because he is up for reelection this year. His opponent can make political hay of this vote and if he's smart, will do his best to make the Senator appear to favor Wall Street over his constituents. In fact, it's the other way around. By making the tough call, Senator Cornyn is siding with the people of Texas. I pray that he will have opportunity to present legislation that will begin the process of fixing the underlying problems that created the financial meltdown in the first place. We need to send him back to Washington for another term.

The Common Sense Fix

Dave Ramsey has a proposed solution to the current financial crisis that I believe merits the attention of our Congressional leaders. It is called The Common Sense Fix. Read it by clicking on the link and then go to this page to see how you can take action. This is critically important to our future.