I've been watching documentaries again. Here's a goodie, available on Netflix and YouTube.
I knew the situation in China was terrible, I knew the cheap stuff was inferior quality and possibly dangerous, and growing up I had some vague notion that if everything was made in China our economy would probably suffer. For a while I was just apathetic, because there didn't seem to be too many ways around it. There aren't too many products out there with a "Made in USA" alternative. But now I'm just mad, and determined to look for an alternative whenever one might possibly exist. This will tie in with that later post wherein I will scour Target and Wal-Mart for those elusive "Made in USA" items and compare the two.
Oh, and I'll never order fish at a restaurant again, at least not unless I can verify it came from this hemisphere. Not that fish farming anywhere is AMAZINGLY healthy. Bah. Fish are difficult.
I hope all the Sandra Flukes of the world can rest easy knowing they enjoy free birth control at the expense of a young boy with a life-threatening milk allergy who can now barely afford his EpiPens, the family of ten who now live on ramen noodles with limited utilities in a futile attempt to afford medical supplies for their two children with Type 1 Diabetes, the self-employed chiropractor who can no longer afford his home and had to move his family of five into a friend's house, the families who are proactively quitting their jobs and declaring bankruptcy to qualify for Medicaid rather than face even more devastating financial ruin, the small business owners who are closing their doors because their healthcare plans will now negate their profits, the single mothers who now must work two part-time jobs because government regulations slashed their hours, and the doctors who are seeking early retirement or considering leaving the country because they feel the new government standards of limited care violate the Hippocratic Oath.
What a wonderful enlightened world we live in. Many thanks to Matt Walsh for putting this compilation together. People need to be aware of the real human cost. For some reason, the Affordable Car Act has left millions of Americans out of work, out of money, out of options, and still unable to afford what used to be basic healthcare.
It used to be an option to just do without what you cannot afford. Now if we try to do without, we are fined for our trouble. They will get you either way. Unless you actually quit trying to make ends meet, give up attempting to maintain a legitimate income, you will be hounded for everything you have. I've been saying for a while that the real collapse won't come until the average American realizes he has nothing left to lose. This could very well be the final ruin of the middle-class.
In the words of Emily from Iowa:
Recently our 2 year-old daughter had an ear infection. Went to the doc, got a prescription for an antibiotic. Went to the pharmacy to fill said prescription. I was expecting it to cost around 5 dollars because that’s what it cost the last time we had it filled. Wrong. It now costs 75 dollars. I paid 75 dollars for an antibiotic that used to cost us 5 dollars. When I asked the pharmacist, “Why the huge increase?” She replied, “Obamacare. And this is just the beginning.”
For more stories which will be detrimental to your blood-pressure, follow the link to The Matt Walsh Blog. I read each and every one. We're still covered by military health insurance, and I dread the day we'll have to face off with Obamacare. With any luck, maybe we could join one of those religious co-ops if they're still exempt. Shoot, at this point I'm considering settling in on welfare in an attempt to pull the whole edifice down sooner. If we all give up at once, maybe we could just burn this administration to the ground and start from scratch.
This is one of the very few things that can make me stop and think, "Thank God we don't have kids."
America is essentially dead. What on earth do we have now?
We've been talking about it for a long time. We pretend we can actually avoid it indefinitely. I've been hearing it a lot more often lately. It's the D-word. DEFAULT.
Based on everything I've read, the United States of America will inevitably default on it's enormous financial obligations some day. Forgive us for being human, but Dave and I are really hoping that day isn't Monday. We have just under $13,000 in personal debt left after cars, student loans, and credit cards, and - all things being equal - I'd rather face the catastrophic economic downturn with no debt at all. But I guess we're better prepared than most.
All the same, I'd rather eek out another year . . .
I keep posting this trailer, but it is an excellent documentary. If they raise the debt ceiling again, all that will buy us is time. Use it wisely.
I've never been a huge fan of Wal-Mart, and after watching various documentaries of years past exposing their cut-rate exploitation of their employees and the overseas production workforce, I decided never to shop there again.
But then I saw a segment on the news about Wal-Mart's new "made in America" campaign while waiting on an oil change. They claimed to already carry many items made stateside, and plan to add more. Apparently the rising cost of fuel makes it more worthwhile to invest in domestic production than to go overseas. Maybe the mantra about Wal-Mart's "cheap Chinese crap" no longer applies.
Just to see for myself, I put Wal-Mart to the test yesterday before our big road trip. I was originally planning to go by three different stores - Petco, for disposable puppy pads, Target, for a travel cooler, and Trader Joe's, for healthy snack food. Instead, I swung into the Wal-Mart lot to see what I could find.
The disposable eco-friendly puppy pads AND the cooler were quite affordable and both stamped with "Made in USA." While I was at it, I picked up some chewing gum and 100-calorie nut packets. Shopping done.
Very interesting. I will have to investigate this further.
The Housing Crisis. The Real Estate Bubble. The Credit Crisis. "The worst financial crisis of modern times." We've all heard about it. An incredible number of people experienced it. I, for one, never understood it. Economics is not my strong suit, and I was fortunate enough to be far too busy writing papers and studying for exams to give it much thought. This documentary, House of Cards, made the whole process abundantly (and maddeningly) clear. So, for anyone else of my generation who may have missed it, here's a breakdown of the financial train wreck we call the Housing Crisis.
September 11, 2001, happens. Expecting a severe economic stall after the tragedy, Chairman of the US Federal Reserve Alan Greenspan preemptively lowers interest rates to encourage spending.
Encouraged by "the lowest interest rates in a generation," many Americans take the plunge, buying homes and committing to mortgages.
Responding to demand, residential development increases. Brand new neighborhoods start popping up.
While all this is going on, the actual price of a new home is increasing at a greater rate than the average American income because of the inflated demand.
Because the prices are rising, new homeowners (mortgage holders) find they have significant equity in their new homes as soon as they move in.
As demand for real estate slows because of the rising prices, lenders and mortgage companies begin looking for new and appealing ways to package their product.
"Subprime mortgages" become popular, or mortgages for people with shaky credit who would ordinarily be considered a bad risk. There is little or no vetting process for these mortgages, and as a consequence many people are granted loans they cannot afford.
A quick note about how the market works: Fannie Mae and Freddie Mac were government institutions established to increase homeownership by buying home loans from mortgage lenders. As the new owners of these mortgages, these two companies would receive a steady flow of monthly payments, pool the money and sell shares. These shares are called "mortgage-backed securities." While they dominated the market, Fannie Mae and Freddie Mac were able to dictate the terms of the mortgages they would buy, terms which used to be strict.
However, while Fannie and Freddie are momentarily distracted by internal accounting scandals, a crop of new mortgage lenders in California takes advantage of the chance to sell risky subprime mortgages to Wall Street. Suddenly there are no more rules.
Wall Street likes to sell their mortgage-backed securities to foreign countries, like China and India, which are suddenly flush with cash. These countries see American mortgage-backed securities as low-risk, high-return investments, which would have been true under normal circumstances. However, international demand in turn leads Wall Street to pressure the risky subprime mortgage lenders to supply more mortgages, regardless of quality.
Mortgage lenders drop all standards in order to meet Wall Street's demand, offering subprime mortgages to people who have no business taking out a loan. There is no investigation, so it is simple for applicants to lie about their stated income. Sometimes the lender will cook the books on the applicants' behalf, with or without their knowledge. The lenders then flip the risky "liar loan" to Wall Street, which would then flip it to unsuspecting international investors.
None of the firms on Wall Street want to be the first to impose stricter standards, because such a move would be "suicidal" in that market.
Suddenly, many Americans in a lower income bracket find themselves able to "afford" a home loan, the American dream.
(Remember the rising cost of homes across the market?) "Adjustable-rate mortgages" become popular, mortgages with low interest rates for the first few years before jumping to a higher rate. Borrowers who accept these terms usually plan to refinance before the rate changes, counting on the house continuing to increase in value.
When homeowners discover the new equity suddenly put into their homes by the rising costs of the real estate market, they are quick to refinance, a move which gives them ready cash but also a larger mortgage. Small-town America goes on a spending spree, causing retail sales to improve.
While the mortgage-lending market is booming, everyone wants to get on the act. People with no training and no qualifications begin selling subprime mortgages. The more loans they close, the more fees they collect. Any candidate is a good candidate. Meanwhile, these are all profitable because of Wall Street's demand.
Encouraged by the sudden increase in homeownership (and the alleged economic recovery that implied) the government encourages the mortgage companies to invent still more kinds of mortgages to make them more accessible to those who essentially could not afford it. They call these "greater mortgage product alternatives to the traditional fixed-rate mortgage." Mortgage companies and Wall Street are both eager to comply.
Deceptively complicated products with cryptic names like the "pay option negative amortization adjustable rate mortgage" are created. Laymen call it a "pick-a-payment mortgage," in which any unpaid interest will be added to the principal each month. The end result is a mortgage that gets "paid up" rather than down, trapping the homeowner in debt.
All this risk is held together by the notion that home prices would continue to rise.
As the loans became riskier, the rating agencies (which the international investors relied upon to vet their investments) are convinced to bend the rules, giving a mortgage-backed security which originated in a risky subprime mortgage the same rating as another backed by a stable traditional mortgage. AAA is the safest rating, and international investors would allegedly buy anything rated AAA.
While the market was booming, banks invent yet another way to repackage their product for investors. A "collateralized debt obligation" (CDO) is a collection of several parts of several different mortgage-backed securities, a sneaky way to intermingle the bad mortgages with the good ones. Only the mathletes understand them, and unwary investors take them on faith often without any idea what they are actually buying, trusting the fraudulent AAA rating. Again, the appeal of these investments is predicated on the notion that housing prices would never fall and that homeowners would not default on their payments.
As international demand increases for CDOs and other mortgage-backed securities, Wall Street leans harder on the lenders and mortgage brokers, who in turn aggressively issue mortgages to anyone willing to sign the dotted line, qualified or unqualified. All the while, everyone in the business is becoming fabulously wealthy. This peaks in 2004-2005.
Fannie Mae and Freddie Mac find themselves missing out, and abandon the standards they had once enforced, embracing the subprime mortgage business.
Homeowners, made euphoric by the perception of their sudden affluence, spend whatever additional equity they have in their new homes. With no ability to pay off such a huge mortgage, everyone plans on refinancing later to stay afloat, trusting prices to continue rising.
By 2006, subprime mortgages begin to default, beginning the avalanche. Suddenly feeling the pain, Wall Street begins to cut off the risky mortgage brokers, driving them out of business. With fewer mortgage brokers willing to make risky deals, prospective homeowners are no longer able to qualify for a mortgage. With fewer prospective buyers, housing prices stall. When housing prices stop rising, homeowners are not able to refinance and find themselves stuck with crushing debt, many trapped in adjustable rate mortgages. As the interest payments on adjustable rate mortgages begin to increase, more mortgages default. Many families find they owe more on their homes than they are now worth and abandon them to foreclosure. Neighborhoods of new homes became ghost towns.
As housing prices fall and mortgages default, the mortgage-backed securities and CDOs begin to sour. International investors realize they have been sold a crate of lemons, setting off the global credit crisis. Demand for those investments abruptly dries up, crashing the market. Banks and investment firms begin dying like flies. Hence the cry for bailouts.
This is why it's apparently a buyers market right now. I think I'll pass.
