Voting is important, but not a panacea

In a recent Gainesville Sun guest column entitled "Yes Voting Matters" Matt Coleman writes that exercising your right to vote is one of the most important one can do to "preserve the American way of life" (whatever that comes to, exactly). I agree that voting is an important part of civic engagement, but not the only important part of such engagement.

Crazy? Or responding sanely to an insane world?

This is the introduction to a paper I gave at Santa Fe College at the inaugural meeting of the Socratic Saints the Santa Fe philosophy and ethics club. The complete paper is available here as a .pdf.

One may very well be depressed by the majority of the news one sees on TV or the Internet. And why not? Such a reaction seems entirely appropriate. Many (if not most) of the major themes of the news stories we see are to do with catastrophe. For example, $700 billion has been taken from US taxpayers to bail out (or more euphemistically to 'rescue') the financial institutions now at the heart of the world economy. Take another example: unemployment is at record levels nationally and in Florida. Over 10% of those who want work can't find it, and many of those who do have jobs are underemployed. The lack of health insurance is a related issue. In the US, health insurance is usually had as part of a benefit package that accompanies full-time employment. If unemployment and underemployment are rising, then health insurance is sure to be a problem for the unlucky unemployed or underemployed. As a final illustration of the unending cataclysm we're told that we face, global climate change is thought to be under way and progressing faster than previously predicted. As if this problem with our environment weren't enough, many believe that the global peak of oil production has already occurred or is fast approaching. Once production has peaked, we're told, we must begin the inevitable process of economic decline.

It's saddening stuff, and stuff that shouldn't be taken lightly or disregarded if we're to believe what we see on TV and believe what we read on the Internet. In fact, if we take seriously many of the things we see and read, then we should be worried, very worried, about those vast and immane elemental forces with which we're unable to mettle but which may affect us all in very important ways.

I've tried to get your attention with the sort of stuff that would appear at the top of the local news at 11. They dictate that if it bleeds, it leads, and the biggest bleeders these days are taxpayers supporting Wall Street fat cats, rising joblessness and fast approaching environmental Armageddon. I hope I've just been every bit as dramatic and disturbing as AM talk radio or the Colbert Report.

But, as much fun as generating an uncontrollable hurricane of emotion is…. I'd like to try to give you a paper that does not continue on in the same way that Stephen Colbert, Rush Limbaugh or Keith Olbermann might. I'd like to try to give a paper in which we consider the sorts of frightening news stories I just sketched, and perhaps more importantly our reactions to those news stories, and try to think about these issues in a calm, analytical and dispassionate way.

In this short paper, I would like to do three things. First, I want to bring some issues, pressing issues I believe, to our attention. Apart from the pressing issues themselves, I'd like to focus on our reaction to those issues. Second, I will offer some analysis on why the issues that we face are in fact pressing issues. And even though these issues are pressing and serious, I believe that there is something that can be done and done by us. Finally, I'll offer a sketch for the sort of actions I believe we should take. This sketch will be too vague and indeterminate, but I hope it may point us in the right direction.

Even though I used these as part of the mock-local-news-film-at-11 send up of the introduction, I would like to return to the three main difficulties we face today. Recall that the issues were (1) the $700 billion bail-out of the financial sector, (2) increasing unemployment, underemployment and the related problem of health insurance for the unemployed and underemployed and (3) environmental damage / global climate change / dwindling resources.

[Read the rest here, complete with references, as a google document.]

Here's the trouble with TARP

Turns out that the Gainesville Sun did publish an edited version of my submission as a guest column.

I saw the Bailout fail

(I sent this to the Gainesville Sun, but I'm not sure they'll publish it. If so, I'll link.)

TARP worked but concerns remain

The Troubled Assets Relief Program of 2008 (TARP) was supposed to rescue and then stabilize the US economy after the financial services "meltdown" following the housing market crash that started in 2007. In the year since the bill became law, many have forgotten how the former president and the former Secretary of Treasury horrified us with predictions of the systemic financial collapse that would result if hundreds of billions of dollars weren't taken from the taxpayers to fix the mess that the huge banks and Wallstreet had created.

So far, it appears that a "financial Armageddon" has been avoided. I feel relieved. Since the credit markets aren't frozen up and are moving again, we should all be able to sleep better at night.

Even though we avoided the immediate catastrophe, some troubling issues remain unresolved. Of course, there's the issue over whether leaders in Washington have actually put in place reforms to make sure that megabanks can't create the same conditions that almost caused a total economic collapse. And there's the issue of whether a moral hazard was created during the course of the bailout. Will megabanks learn the wrong lesson from their almost complete destruction of our economy? Will they come to believe that they can become "too big to fail" and engage in risky, yet extremely profitable lending without regard for the consequences because they'll be bailed out again next time?

Where did the bailout money go?

As important as these two are, an even more pressing question remains. Someone should ask, "Where did all the bailout money go?" And political leaders and financial elites should be required to answer.

So where did all the bailout money go? Before last week, I, like many others, assumed that the money went into the hand of experts to shore up some important part of the financial system in dire need of repair. I had a the vague idea that the money was supposed to go to banks so that they could keep credit flowing, or so I'd heard back in the panicked days of October 2008.

Requesting for a "bailout" for my neighborhood

Last week, I began to reconsider TARP and how it was supposed to help out. Like many Gainesvillians, I live in condominium complex. It's not a new complex. In fact, it's relatively modest, but it is a place that owners and board have recently been trying to make better. The board wanted to replace old wood siding with composite that would better resist the Florida heat and moisture, paint the buildings and replace old roofs and do some landscaping ahead of the 2010 hurricane season. A majority of owners in the complex agreed that these upgrades seemed like a good idea.

So almost a year ago, our board of directors began the process of applying for a loan so that this work could be done relatively quickly instead of being done piecemeal and paid for by increased association dues or by special assessments. There are twenty buildings in the complex with over 100 owners; the loan sought was for $370,000 over a period of ten years. Every bank the board approached – five altogether – turned us down. No one wants to lend the one hundred condominium owners this relatively small sum (less than the price of Haile Plantation "dream home", correct?) to make our neighborhood better and more attractive.

The board and the property manager did their due diligence. The amount of the loan and the terms were reasonable. I believe it could have been paid back without incident. I had thought that a loan like this was exactly the sort of the thing at which the TARP money was to be aimed.

So much for bailout money trickling down to us.

Concerns over banks hoarding money

One thing that some economic commentators worry over is whether the $700 billion of TARP will actually make it into the hands of those individuals and communities who can use it. These commentators are concerned that, instead of lending and "getting credit moving again", banks may simply hoard the money given to them as a security against future defaults and tough financial times. I'm sure that banks have financially rational reasons for things they do, and unfortunately, hoarding may be the smartest thing for them to do given our current situation.

Perhaps this sort of hoarding is one reason that my complex couldn't get the relatively modest sum we wanted for our improvements.

Of course, there's a general lesson to be learned from the bailout of '08 and its consequences.

By passing TARP, we have avoided complete financial catastrophe, but in doing so, we have essentially rewarded banks for risky behavior that brought dire consequences. No meaningful regulations have been put in place to prevent the conditions that made the near-meltdown possible. And some of the richest among us, those who earn exorbitant bonuses at bank holding companies and financial services companies like Goldman Sachs and Bank of America continue, despite the fact that their shortsightedness and greed helped cause this crisis, to receive outlandish compensation even as their organizations have accepted bailout money.

Financial elites benefit when the system must be rescued

We face a serious problem that few people can or will talk about. Financial elites, with the help of government leaders, have created an unstable economic system in which, as we've seen, catastrophe is possible. Moreover, the system is such that if a "rescue" is required as it was last year, those at the top benefit handsomely from the measures taken to save the economy.

While US taxpayers are sending money to Washington to make sure that the house of cards built by the elites doesn't come crashing down, those very elites pocket a disproportionate share of the money used in the rescue. All to often, as I believe I just witnessed when my condominium complex didn't qualify for a loan, little of the money that was necessary for the rescue is invested in local communities.

We must demand accountability and a departure from business as usual from our political leaders. They have made it the case that financial elites are rewarded for their greedy gaming of the system and that people who desperately need money to improve their lives have less access to credit.

The economy and health care

My opinion piece on the economy and health care appeared in the Gainesville Sun on July 8th, 2009. 

Two interesting articles back to back from the July 2009 issue of Harper's: "Barrack Hoover Obama" and "Labors Last Stand"

It's strange but true: Barrack Obama and Herbert Hoover bear important similarities especially with regard to their abilities vis-a-vis the economic situations of their respective times. Even though Hoover was regarded as the most competent man for the job of president at the beginning of what came to be known as the Great Depression, he failed to stop it from deepening. Will Obama, widely regarded as one of the most capable leaders in the face of the depression we face now, also fail and do so for reasons much like those responsible for Hoover's failure? Two articles in the July 2009 issue of Harper's outline how and why he could fail and offer ways in which he might avoid mistakes like Hoover's. 

Chilling fiction and non-fiction to combat the summer heat

There are several books that I've enjoyed reading over the past few years, particularly in the summer. I've written an "overview" review of all of them here. I hope to write a separate review of each of them over the coming weeks. Please watch this space.