Glenn Beck has been promoting doom and gloom on the economy for, oh let's see... at least a year now. Today was no different. Today he had a guest on named Steve Cordasco who is a money expert. They talked about our economic woes and how a key indicator to watch is 30yr T-bills. For all of you financially non-literate types ;-) that's a 30 year Treasury bill, a very safe investment with low interest rates. The rates on bonds go down as the demand for them gets higher. The rates on 30yr T-bills are lower than they've ever been before. This, Beck's guest Cordasco claims is a sign of things to come. People are moving their money into very safe investments for the long haul.
Now, it must be remembered that it's an election year and with that will be all that typically goes along with an election year. Glenn Beck's first choice for President is Mitt Romney, a man with whom Beck shares religious faith. Beck has repeatedly touted Romney as someone with a strong business sense who can save our country's financial crisis. What better way to move Beck's political agenda along than with a little financial mess that must be cleaned up by... oh, I don't know... Romney!
I have no doubt that there is a recession on the way, but let's think about how we got to this point. Two leading factors come to mind 1) debt 2) economic anarchism. Both of these were taken on at the behest of Conservatives.
1) Our national debt climbs to pay for our 3.5 billion per day war budget and the corporate bail-outs that Bush has arranged for such paupers as Citibank (since they shouldn't have to be held responsible for their bad loans) is strapping us as a nation. On top of this, we as individuals have responsibility for taking their crappy loans and getting caught up in the borrow-and-spend mentality our President advised following 9-11.
2) Free-market capitalism, or more appropriately "economic anarchism" does not work. Well, it works in a feudal sense, but not in a democratic one. Ironically, the all-wise consumers in whom economic anarchists place all trust to guide the market are fools the moment they step into a voting booth. Furthermore, the "free-market" is actually not free. The people who own it are increasingly the Citibank's and Wal-Marts of the world. This phenomenon will continue as the "free-market" works it's magic.
It just seemed a little too much today to be coincidence with the first two hours of the program being about economic crisis and the third hour being about Romney for President. It turns out Steve Cordasco is a conservative talk show host on 1210am in Philadelphia aka "The Big Talker." This is the same station from which Beck's career took off. They offered no other explanation for the take off in T-bills other than a recession. Uh, how about that baby boomers are retiring left and right and any financial advisor would be remiss if they didn't suggest putting money in T-Bills as a source of income for a retiree??!!!???
There may be a recession ahead, but how we got there is as important as how we can get out. In fact, if we are careful to learn from our mistakes... we might not make them again in 2008.
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4 comments:
I like Glenn Beck, but I agree, he does preach a lot of death and destruction. I totally disagree with your viewpoint on the economy. First of all there is no such thing as a 30 yr T-bill. T-bills have a maturity of less than a year. I know that is not a big deal, however, if you are going to rail on the greatest economic system in the world at least understand it.
Next, your views on the cause of the recession are not necessarily accurate. First of all, it is very easy to blame Bush (which most people like to do). However, he actually is not as responsible for the economic downturn as people would like to think. Bush's tax cuts did indeed provide an economic boost, he was not responsible for the current credit crisis. The Federal Reserve (that would be Greenspan and currently Bernanke) are in charge of the level of interest rates. Bush is not. Did the rates stay to low for to long, that is a valid argument, but certainly not President Bush's doing.
Next the purpose of a free market. It is not to provide free money or free opportunities. It is to allow supply and demand to work freely and to give everyone an equal chance to improve their circumstances. The people who are in financial hardship right now (in reference to the credit crisis) are there because they did not do their own due diligence. It is not the governments fault. They were not taken advantage of. After all, the free market requires that research and disclosures are made available to everyone equally. That research is/was there and if people were dumb enough to not do their research before going into debt with risky loans, then it is their own fault, not the free market nor president Bush's.
Finally our National debt is high but if you were to compare it per capita to the rest of the world it is still not as bad. People have a habit of comparing National debt to a corporation or an individual persons debt and you cannot do that. It does not work the same. If national debt is being spent on assets or investments that are going to bring a return to the country than the level of debt regardless of how high is not as important. However, I will agree with you, the reckless spending in the past few years has been bad for the economy, in my opinion. Not because the debt is so high but because our government is not spending the money on investments that are going to provide a return for our children. That, Bush definitely holds some accountability for. It is not contributing as much to the economic downturn now as much as it will cause problems for future generations.
This is definitely the greatest economic system in the world.
Just a couple of counterpoints:
1) I didn't claim there is a 30yr T-bill... as the blog indicates I got that information from a "financial expert" named Steve Cordasco.
2) The debt of which I speak is not only national, but corporate, and personal; all three of which are at problematic levels.
3) I don't care about Bush. He is irrelevant. Not even the republicans will touch him with a 10-foot pole this year... even they are campaigning on "change."
4) Again, there is no such thing as a free-market. Someone always owns it. "Free-market" is term used to denote the ideology which propgates a false sense of "freedom." It's similar to the use of "patriot act" or "freedom fries" and other such rhetorical devices. What is at issue with respect to the "free market" is not WHETHER it is owned, but WHO owns it. In the case of a Liberal Democracy, voters have a say in that, in the case of Free-Market Capitalsim they don't; which sounds more "free?"
5) Capitalism is a mechanism. I know business courses don't teach morality or ethics because they don't know them... but having a good economic system is only a small part of having a decent society. Saying that capitalism "works" or that it is "effecient" isn't any more useful than saying the holocaust "worked" or how those gas chambers were so "effecient." Maybe so, but maybe giving people what they want, when they want it, as much as they want without some external dialogue isn't such a hot idea.
Actually business schools do teach ethics and its amazing that because of the actions of citibank you have lumped all business's into the category of unethical an that every businessman is unethical is a huge generalization. Your comparison to the holocaust is quite a stretch. You make it sound like Citibank forced all those people to take out risky loans. The government has to bail out Citibank, its not a favor, if Citibank were to go under the effects would be huge.
I disagree no one owns the market. A market is a place where buyers and sellers meet to negotiate purchases and sales. A free market means they have the freedom to do that. They do, of course have regulations such as disclosure to protect buyers as I mentioned before, but no one owns the market. I don't think you are seeing all the good that a free market system has done.
You said that the debt was brought on by the behest of conservatives. I agree that personal debt is definitely a huge problem, but it was not brought on by conservatives. I do not believe that corporate debt is at a problematic level either. When debt for a corporation gets to high they are punished by the stockholders. Again I agree with you on the reckless spending, but I do not see it contributing as much to our problems now as I see it being a problem for future generations.
Also I apologize I saw you didn't quote there as being a 30 yr t-bill, if the financial professional really quoted a 30yr t-bill he needs to study a bit more.
Bush is not irrelevant. His policies he passed are still in force and he is one of the conservatives that you are accusing of contributing to our current economic state.
You are right even republicans are distancing themselves from Bush. But I don't believe it is because of economic reasons (with the exception of reckless spending which I agree with you on), I think it is because of the war and all the scandals that have plagued his presidency.
True, business schools teach ethics but they teach "business ethics." Which is to say they teach ethics which do not address the larger problems of humanity. Which is fine for business schools, but as voters and thinking people we need to recognize that business is one aspect among many of human progress.
I don't think all business is unethical, in fact, using the term "unethical" implies there must be an "ethical" alternative. Citibank is one example among many though with respect to unethical behaviors, the list is long. Additionally, the same conservatives so adamantly opposed to "welfare" for individuals are apparently willing to give welfare to corporations. They are also willing to give welfare to their kids in the form of trust funds. Yes the effects would be huge, but so would the rewards: we would clense our system. By bailing them out of their bad behavior, we reward it. And if the stockholders punish them for their mistakes, I wonder why they need government help in the first place?
I'm not claiming no one owns the market, it is most definitely owned. And the fact it is owned is a case against the idea of a "free market" wherein people are able to bargain or negotiate. Bargaining and negotiation are only effective between parties on equal footing, the "free market" is no such place.
One final note, immediately following 9-11 Bush told people to borrow and spend. Greenspan's actions also encouraged this. No doubt... no doubt personal responsbility must play a role but if we expect accountability then it should start with the leaders of the country.
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