Save me, Federal Reserve!
Peter McKay
Friday, April 11, 2008
Two big stories caught my eye this past week. And suddenly, for the first time, I feel like I understand the whole money thing.
First, in a secret weekend action, the Federal Reserve moved quickly to throw dollars (30 billion of them!) at Bear Stearns, an investment bank that suddenly found itself without anything to invest. Seems the Bear Stearns guys were taking suckers’ investment savings right up till Friday afternoon, and then planned to simply hang a “closed” sign in the window on Monday morning. The Federal Reserve took this action to shore up confidence in the stock market.
I know very little about finance (just ask my wife). Up til this, I didn’t even know what the Federal Reserve was. Now, I understand it’s an organization designed to give our tax dollars to rich people. And I now realize Bear Sterns, which I thought was a department store, is a place full of Wall Street guys in expensive suits who take little guys to the cleaners.
In the second story, our congressmen in Washington swarmed all over each other to try and be the first to fix the looming mortgage crisis. This crisis occurred because people who couldn’t really afford houses bought them anyway, using money they borrowed from banks who knew those folks wouldn’t be able to pay them back.
The government had to move quickly or people would lose confidence in the whole concept of buying ridiculously overpriced homes with money they don’t have and won’t ever get. (Rule of thumb: There’s something screwy going on when a house is supposedly worth millions, but is covered with vinyl siding.) At press time, the government still hadn’t figured out exactly what to do, but agreed it ends by throwing billions of dollars at the problem in the hopes it will go away.
I stared at my paper for a few minutes. Then it hit me. The government is spending all its efforts to help two groups of people: The really, really rich people, who probably have lots of other piles of cash to console them; and the really, really greedy people, who paid $800,000 for little cardboard-box homes because they were sure they could sell them a few months later for a cool million. It’s like they’re all part of some secret club I was never asked to join.
Like you, I’m not particularly rich or greedy. I have a house, but it’s not worth a million dollars. It’s worth basically what it’s worth. I bought it because I wanted to live in it, not because I thought it would be worth a fortune anytime soon. And if I go out and buy a new fridge, but don’t make the payment one time, I’m pretty sure two big guys with a truck are going to come knocking on my door to get it back, and I’ll be yelling at the kids to hurry up and eat all the ice cream before it melts.
I turned from my newspaper, where the headlines were all about how people were spending money they didn’t have, and looked at my morning mail. There were the usual fat envelopes from companies I’d never heard of. Each of them told me, in big, bold letters, that time was running out and I should borrow against the value of my home. I keep a stack of these offers by the front door. Most of them say “Dated Material!” on the envelope, a tip-off that they’re not worth opening.
Suddenly, it hit me. I’ll take my credit cards, go out and buy the most expensive stuff I can find -- huge TVs, luxury cars, maybe put in a pool. Then I’ll take all these loan companies up on their offers. I’ll borrow, over and over again, against my home, until I’d amassed a million dollars or so. Then I could run over to Bear Sterns, where the guys in the expensive suits would only be so happy to take my million and turn it into a billion.
As soon as I’m officially both rich and greedy, I’ll be set for life. If two guys with a tow truck come and try to repossess my 2008 Lamborghini Gallardo Superleggera, I’ll just laugh at them.
“Call my friends at the Federal Reserve,” I’ll assure them between bites of caviar. “Just let them know I’m a member of the secret club!”
To find out more about Peter McKay, please visit www.creators.com.
blulitespecial (anonymous) says...
I couldn't agree more... I'm still laughing! Except we all pay for this bailout! Funny-my house is paid for,my 3yr old truck is paid for,my 6 yr old car is paid for, my ungodly credit card debt is... wait,what's this?...it looks like zero! Maybe because I cut that card up 25 years ago.
April 11, 2008 at 4:43 p.m. ( permalink | suggest removal )
Bjnemp (anonymous) says...
Right on! I pay my bills and don't buy things I can't afford. When we bought our home in Emporia we were told by the bank we qualified to finance a home for up to $350,000, or more. Instead, we chose to buy a very nice & comfortable home for less than $100,000. Why should I, a responsible citizen and taxpayer, pay for those who aren't? This is America: I am free to be smart and you are free to be dumb. Don't ask me to pay for your mistakes or greed.
April 11, 2008 at 5:23 p.m. ( permalink | suggest removal )
emporian (anonymous) says...
We actually got a house we could afford. Will I get any help with my mortgage? No, because I am responsible with my money. Thats the what chaps me off about the whole deal. They couldn't afford it before and they are surprised now?
April 11, 2008 at 5:41 p.m. ( permalink | suggest removal )
admireed (anonymous) says...
bj..how can Obama or Hillary save you if you do not need to be saved.? How unamerican of you!
April 11, 2008 at 6:18 p.m. ( permalink | suggest removal )
Bjnemp (anonymous) says...
Admireed: Obama won't save me. He doesn't even like me. During the speech he made last Sunday, he made it clear he does not like people from small towns in America, and I live in Emporia. Obama said we small town folks "cling to our guns and religion" and don't like immigrants or anything different than ourselves. Alas, I fear I am beyond saving, even by free spending tax-raising liberal socialists like Barack and Hillary. I live in a small town, I do like my guns, I don't like illegal aliens (or any other law breakers), I don't like socialized government, and I sure don't like more taxes. I am conservative patriotic mid-American small town scum.
April 11, 2008 at 10:15 p.m. ( permalink | suggest removal )
admireed (anonymous) says...
Bj...wonder when the first arrow will come your way?
April 11, 2008 at 10:19 p.m. ( permalink | suggest removal )
alfalfa (anonymous) says...
Can anyone post a link to that speech? I would like to read it.
It sounds coldhearted, but those of us who do live within our means are being penalized on two fronts now. First, we have less than those who didn't, and second, we are going to pay for what they have that we don't. This article was right on the money as far as I am concerned.
April 11, 2008 at 10:33 p.m. ( permalink | suggest removal )
create (anonymous) says...
Alfalfa, while I didn't find a link to the speech itself, here's a good article from the Wall Street Journal that refers to it.
http://blogs.wsj.com/washwire/2008/04...
April 12, 2008 at 9:08 a.m. ( permalink | suggest removal )
Bjnemp (anonymous) says...
Admireed: No arrows yet. I feel pretty safe. I live in the mid-west where the vast majority of people feel the same way I do. That is, they have an irrevocable love of America, God, family, and community. We still remove our hats and place hand over heart when we hear the national anthem and see Old Glory waving in the wind. We can't help but shed tears when we hear "America the Beautiful". We value life above all things but would give ours in a heartbeat to protect our freedom or family. I disagree with many of the comments I read in these blogs and think some of the contributers are, forgive me, deluded idiots, but I will fight for their right to voice their opinion. No arrows yet, Admireed, but I will dodge all I can and heal from the ones I don't.
April 12, 2008 at 11:46 a.m. ( permalink | suggest removal )
77flint (anonymous) says...
If you research what was said and what was meant. You would see how it was blown out of proportion. Obama is more like us that Clinton or McCain ever will be. No Arrows just an understanding of what was said. Also, the benefit of the doubt. I am not R or D.
April 14, 2008 at 8:56 a.m. ( permalink | suggest removal )
Bjnemp (anonymous) says...
I am also an independent, but if it walks like a duck, quacks like a duck, and looks like a duck, it's probably a duck. With Obama's 20 year association with Rev. Wright and his racist tirades and Michele Obama's substantiated remarks such as "For the first time in my life, I am proud of my country", I tend to think Obama is a duck.
April 14, 2008 at 9:59 a.m. ( permalink | suggest removal )
emporialifer (anonymous) says...
BJ - I am with you all the way. It bugs me to no end that I work my tail off to afford what I can and only buy what I can afford, while this happens and those of us who are more responsible end up paying for it. In my opinion it ties into the Government run health care (YIKES!) idea too because why should I have to pay for the health care of other people who perhaps make life choices (smoking, drugs, etc.) that put them at risk for diseases, illnesses, etc. that they cannot afford health care for, but now I have to pay for their poor choices? Doesn't make sense to me. We are doing our children a disservice by teaching them that someone else will take care of them. Everyone needs to learn responsibility and to stand on their own two feet or at least try.
Can someone explain to me what the author meant when he said that the Federal Reserve is designed to give our tax dollars to the rich (3rd paragraph)?
April 14, 2008 at 10:30 a.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Personally, I'm hoping that if Obama or Hillary get elected, they'll pass some similar legislation to bail me out if I lose my money gambling at the casinos. Federal Reserve ought to take care of poor people like me just trying to increase my finances and get ahead, right? If the gov bails me out for gambling on flipping houses, why shouldn't they bail me out for gambling on 3-of-a-kind?
I wonder exactly when Michelle first became proud of her country - when their income passed the $500,000/year mark, or the $1 million/year mark?
April 14, 2008 at 12:04 p.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Speaking of ducks.... I went to church the first Sunday after 9/11. At the end of the service, the entire congregation sang "God Bless America". It was a very moving experience. If the pastor had said "God DAMN America", I would have walked out on the spot and never set foot in that church again. If I had not attended but even HEARD that was what he said I would have done the same.
Now, I don't know the pastor very well personally, he's not my personal friend, spiritual mentor, guide, etc, on a very personal level (fairly large church). And I've only went there for 8 years, not 20, but I know enough to know how he things and feels about things. There is NO WAY that I am naive and dumb enough to have gone there for 20 years and not know. So vote me for President, I'm alot smarter and perceptive than the apparent choices we are faced with.....
April 14, 2008 at 1:07 p.m. ( permalink | suggest removal )
Deepthoughts (anonymous) says...
I remember that feeling right after 9/11 when Americans seemed to be banded together and proud of our country and ready to take on with full force anyone that attempted to harm us. I think it is sad how quickly that "Proud to be an American" mentality faded and got mixed in with ugly/dirty politics and media/people with agendas of their own and it seems that people have turned on their own country/leaders/military.
I would love to start with a clean slate and find a new group of candidates who would actually not just make promises, but rather follow through on their word. I would love it if politics became less about Democrat vs. Republican and more about what is best for our country and the citizens trying to make a living in it. It would be nice if the corruption was gone as well.
I used to think that it would take a horrible tragedy that brought our country to our knees for things to finally get cleaned up and for us to look at each other as fellow Americans proud of our country, but it scares me that if 9/11 couldn't do it, then nothing "man made" will.
April 14, 2008 at 1:38 p.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Right on. I wish we'd scrap the whole 2-party system and just have everyone running as an Independent.
But then they'd just spend all their time squabbling and never getting anything accomplished.
Oh wait, that's what they already do..... (sigh)......
April 14, 2008 at 2:21 p.m. ( permalink | suggest removal )
Bjnemp (anonymous) says...
open_eyes, you are wise beyond your years. We tend to hire (vote for) people who make decisions to benefit their political party, their respective constituency, their legacy, their personal agenda, or sheer greed, but not for America or Americans. We used to have government leaders who put America first, but I think they all died of a broken heart upon seeing what our nation has become.
April 14, 2008 at 5:27 p.m. ( permalink | suggest removal )
hottopics (anonymous) says...
I like the sound of that too! Im tired of the whole political game and garbage that comes with it. Not to mention the MILLONS of dollars that fund it. I am still wondering why there isnt another country with their borders wide open and a immigration plan for Americans who would like the same hand out that new immigrants here get. I'd be on the first boat.
April 15, 2008 at 11:36 a.m. ( permalink | suggest removal )