Let me just say this. We are not in a recession. We are not in a depression. We are not necessarily headed there.
But we could be.
All of that said, let me add to what I said yesterday, work together here folks. Not doing to could send us to the crash that NO ONE wants.
First up, did you see President Bush's speech last night? He took up about thirteen minutes to tell us what is going on, how we got there and why we need to act quickly. The scary part was that he made a whole lot of sense in that short talk to us.
What I liked about what he did was that he DID NOT STAND UP AND BLAME EVERYONE BUT HIMSELF!!!!! He blamed no one specifically, but rather laid out the series of events that led to where we are today.
Simply put, credit was made too easy. Most of that was based on the belief that home prices would continue to rise. When several things, and Bush did not specify in his brief address, caused the property values to drop, this mess was upon us.
One of those factors was ENERGY costs. When money is directed from one area to another area in anyone's budget, that causes things to adjust. So, if people have less money to put into real estate due to the fact that they NEED to spend more on energy costs, they cannot use that money elsewhere. If you have $3000 a month to cover your expenses, and you spent $300 a month on your utilities and another $100 for gasoline to run your car, that left $2600 for everything else. So maybe you could afford $800 a month for the mortgage. BUT, when your utilities jump from $300 to $450 a month and your gasoline costs double to $200 a month, that makes that $800 a month mortgage payment quite a bit tougher. That is not even counting the additional costs for groceries caused by everyone else having higher fuel costs.
So, you now have my spin as to how ENERGY costs got us in this mess.
Going further, I was surprised at how much sense the words of President Bush made. This is NOT a man who is known for being, um, articulate.
Now I understand that the $700,000,000 price tag is a MAXIMUM not a minimum. It is still a number that is about four or five more decimal places than I could never personally relate to, but I am starting to get it.
The plan, in general terms, is to have the government buy up the mortgage-backed securities and possibly a few other thing for pennies on the dollar. The government will then SIT on them until they can get more for them.
Buy low and sell high....this makes sense, right? But doing so with our money is where people get nervous.
Now I do agree that SOMETHING has to be done. And this plan seems to make sense....except the lack of oversight is what gives me big concerns. I think that idea is now off the table.
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Sports analogy time.
Late in a close game, winners want the ball.
Doug Flutie wanted the ball in 1984 late in the game at the Orange Bowl when they were trailing Miami.
Michael Jordan wanted the ball in the NBA Finals when the Bulls were behind the Jazz.
Kirk Gibson wanted to play in Game One of the 1988 World Series.
Winners want in the game. They are at their best when the heat is on.
Losers don't want that kind of pressure because they know they will crack.
While many will spin John McCain's move to re-insert himself in Washington as political posturing, those who know more about this man can really see where this "posture" came from.
McCain has often said that his hero was Theodore Roosevelt. So, what do you know about TR?
I know that TR was an Assistant Secretary of the Navy who quit that job and helped lead the 1st U.S. Volunteer Cavalry Regiment. And it was at the Battle for San Juan Hill that thrust TR in to the real limelight. Often, field commanders will issue an order to "Charge!" Roosevelt did not do that. Rather, his order was to FOLLOW HIM and he LED the Charge and fought along side his men.
I think John McCain feels this is another moment to get others to follow his lead by inserting himself in the middle of the action. I do not believe this is PURELY political, but rather that McCain knows that what he is doing does have political consequences.
Only a pure cynic sees this as politics for politics sake.
Yeah, and Flutie just wanted to loosen up his arm, Gibson needed a little batting practice before game two, and Jordan was trying to sell more shoes.
All wanted to be heroes. John McCain is no different. And like Flutie, Jordan and Gibson, he is taking a chance. Will it pay off?
Flip that around. Prior to being invited to the White House, the word from Barack Obama was that he would stay out of the mix in Washington. He said that he did not want to insert Presidential politics in to the situation. Really? Besides running for President what has this guy done.
Barack Obama wanted to stay on the sideline. John McCain wanted in the game.
That is the simple difference between these two men. Which approach you think is better.....well, that is up to you. I know what I think.
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University of Southern California's Trojans are on the road tonight to take on the Oregon State University Beavers.
Trojans will win this one, no doubt about it. But I think Thursday night college football games are a horrible idea.
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Have a great Thursday!
