?????? by Janus Kane

Does anyone out there know what is going on?



Within a five minute period, I read two articles. The first was a cautionary missive, warning us to all learn how to prepare our own emergency food supply in preparation of the day when the store shelves would be empty. The second was the latest bailout news. Apparently, the powers that be have decided that six major life insurance companies deserve bailout money. It left me wondering how even the possibility of two such occurrences can co-exist in one country, state, city or even on the same block.



Is there a conceivable future where taxpayers will be paying BILLIONS to maintain greedy businesses while they are unable to afford groceries at the local bodega? I suppose we don't have to envision it because the reality is here. As companies like the Hartford and Prudential, who have built their businesses on a foundation of actuarial expertise, dig into the taxpaying public's pocket, thousands of people join the unemployment lines every day and those that can hold onto their jobs are scraping together enough to afford a trip to the grocery store.



A housing market that is going belly up, car dealerships closing left and right and prices for consumerables that are leaping by the day, don't bode well for our economy. And yet, we continue to hand out money as if we had a printing press in the basement of the White House.



Obama has made an impressive show over his short term in office and we all realize that he inherited this problem but, at some point, government officials will have to understand that throwing money at the problem is not helping. If we could be more confident that these decision makers were being more judicious about where this money is going and what strings were attached to its use...



The more we see, the more clear it becomes that there are few, if any, penalties for abuse of this system. Big corporations, cunning but not stupid, have caught the scent of money and are coming running, faster than hogs to the slop bucket. Just as with the banking industry, I fear that this money will disappear and the problem will remain, unchanged. Does anyone out there doubt that, at some point in the future, these big insurers will stop paying claims while crying poverty all the way to the bank?



Something is broken within our financial system. Capitalism is failing. Until we find out what the root of the problem is and cure it, we will continue to dig ourselves into an ever-deepening hole.

Our Boat Has A Hole In It by Janus Kane

I am curious. How many of you out there actually believe that our economy will have any integrity at all when the dust settles? Will the American dollar have any value after this recession has finally leveled out? First the disclaimer - I am by no means an expert. My one undergraduate course in Economics did not go well. I think I recall a C+ for my efforts. But, I have been successfully managing my own finances for over 30 years and I believe I have developed a sense of what works and what doesn't. I had no love for 'the Bush administration'. I do like Barak Obama and what he stands for. I think he is the shot-in-the-arm that this country needs. I do realize that 'doing nothing', in light of this recession, was not an option.

Having said all of that, I have to add emphatically that I am not in favor of, nor do I understand the current bailout philosophy. This is not the first time we have helped to bail out an industry (several years back it was the Savings and Loan organizations) and it will probably not be the last. But, where is this money coming from and are we placing no restrictions on its use? A wise man once told me; 'if you are going to give money - give it with the understanding that you will, in all likelihood, never see it again'. The context here was loaning money to a family member. The banking industry is not a family member, unless we consider it the shiftless uncle that drops in only when he needs some cash, and this money was not a gift. At least I hope it wasn't.

But, I am not sure. In all of the congressional hearings, I don't remember any mention of interest rates or repayment terms. How odd that the American people would give money to financial institutions that survive on one thing alone - the interest that they charge us for the use of their money. So now, if I am understanding this correctly, we are giving money to the banks so they can loan it back to us at the going interest rate. ????

I suppose that the original logic was based on the trickle down theory - that these large amounts of money would eventually trickle down and benefit the general populace. Unfortunately, the only trickling seems to be happening within the hierarchy of these major corporations.
But, if we put that questionable plan aside, that still leaves the question of where this money is coming from. How is it that we have suddenly gotten access to over a Trillion dollars that we are free to loan/give to whomever we choose? Is there a little back room at the Treasury where we are printing this special EXTRA money? Is this money backed up by gold bullion? If so, where was it when our government was running a financial deficit of its own?

Again, I acknowledge that math is not my strong suit, but it still does not add up. We had a Trillion dollars sitting around collecting dust while we had elderly who were shivering in the cold, while kids were dying for lack of health insurance and while mothers had to send their children to bed, hungry. I ask again, where did this big influx of cash come from? And while these corporations happily pad their bonuses and use this money unscrupulously, what will it do to the American dollar.

Are we creating a world where our children will have to carry thousand dollar bills around like we carry twenties? Are we edging toward the fifty dollar cup of coffee or the twenty dollar tank of gas? I have to wonder, because that is the one thing I took away from my Economics 101 course - supply and demand. In this instance, have we increased the supply of greenbacks in circulation to the point where they will loose their value? I suppose only time will tell, but one thing seems pretty clear - we are not going to fix our current economic problems by throwing more money at them.

The Little Insanity Intro