Obama's Bailouts Questioned

An underlying question keeps occurring regardless of what topic we are discussing. That question would be, “When should government step in…or out.”
I believe it is probably human nature to take the path of least resistance. The concern that one may have is... does this short cut take you to a dead end?
It seems recently all we have been hearing is talk of bailouts. Mortgage companies have all gotten in line to take the bailout money. Now we have stumbled across another obstacle. Once the money is given should the companies be accountable for how it is used?
President Obama’s political honeymoon is in danger. AIG is giving huge bonuses to there employees. Do they deserve such bonuses when they are taking money to keep the company running? I would say “NO.” However, was there a discussion that took place or contingency on accepting these funds? I think not.
One may assume that in the economic climate that is has sparked awareness for companies to be more pro-active in doing the right thing. Mortgage companies where encouraged to do loans. The majority of Loan Originators worked off straight commission. Shouldn’t one assume that they weren’t just concerned about the homeowner’s decision to buy a home, but that they needed to close the loan in order to be paid? AIG employees, regardless of what shape the company is in, is interested in fulfilling there own financial interests. Congressional leaders are threatening not to approve further bailouts for banks and financial institutions. AIG lost $100bn last year. These executives obviously where not making good decisions, but they still feel like they deserve bonuses? This is asinine.
Obama has become the “yes” man. He has hurried through quick fixes that have turned into large problems. He has failed to fill key administration posts, such as appointing Tim Geithner who had failed to pay his taxes, as US treasury secretary. Charles Grassley said that AIG executives have committed hara-kiri. In a radio interview yesterday, he said: "I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, 'I'm sorry', and then either do one of two things: resign or go commit suicide. And in the case of the Japanese, they usually commit suicide before they make any apology."
Obama is naïve to think that these companies are looking after the common folk. I would tend to agree with Charles Grassley. They have met immediate gratification, but the opportunity will never rise again. Now it is a matter of time to see how they plan to fix their problems. Remember, they have backed themselves into a corner thus fare. There needs to be a plan that is well sought out and that can be implemented for a long-term fix. Not one that is a band aid fix that will only endure the next four years that the President is in office.
http://www.guardian.co.uk/world/2009/mar/17/aig-bonuses-obama-economy

Renee Fogle
Your Credit Company

Hail To The Banks...

...well not all Banks.

First, I would like to congratulate Citi Bank for turning a profitable first couple months of 2009. Now I hope they will be able to do as the following banks are planning to do, which is to pay back the government and get back to running their bank the way they intended.

The New York Times is reporting that:
"As public outrage swells over the rapidly growing cost of bailing out financial institutions, the Obama administration and lawmakers are attaching more and more strings to rescue funds.

The conditions are necessary to prevent Wall Street executives from paying lavish bonuses and buying corporate jets, some experts say, but others say the conditions go beyond protecting taxpayers and border on social engineering.

Some bankers say the conditions have become so onerous that they want to return the bailout money. The list includes small banks like the TCF Financial Corporation of Wayzata, Minn., and Iberia Bank of Lafayette, La., as well as giants like Goldman Sachs and Wells Fargo.

They say they plan to return the money as quickly as possible or as soon as regulators set up a process to accept the refunds. On Tuesday, Signature Bank of New York announced that because of new executive pay restrictions in the economic stimulus package, it notified the Treasury that it intended to return the $120 million it had received from the government only three months ago."

Another bank mentioned in the article was Johnson Bank of Racine, WI.

I would like to applaud these banks for boldly standing firm in this economic downturn and recognizing the opportunities for them to succeed if they are not restrained by the government.

There is at least one bank on this list that is local to me. I pledge that if that bank gives back all taxpayer money, thus cutting the strings imposed by the government, I will express my vote as a consumer by opening an account. I encourage you to take note of these banks and keep an eye on the news. When you see a bank in your area that has given back taxpayer money to the Treasury, support them with either your voice and/or your dollars.

Matt Kemper
YourCreditCompany.com

Power to the Consumer!

Sorry about the gap between posting all!

Lately I've been thinking about the consumer. There is a lot of commentary about bubbles these days. The Savings and Loan Bubble, The .com Bubble, and most recently the hosing bubble. Wild fluctuations over several years of expanding and contracting economies. My brain has really been working on the relation with these bubbles, and the consumer. Can a balance exist? Certainly balance can be achieved, but who's responsibility is it to create that balance, and to what extent?

There are those out there that will shout very loudly that the business community in general, and Wall Street specifically, caused this deepening recession. Governments are another choice to create balance. Obviously right now our government is throwing everything, including the kitchen sink, at the economy hoping it will improve. However, let me introduce you to a third choice. This group rises above the other two. The other two choices are ultimately dependent upon this group. Look into the glare of your monitor. The group is you.

Can you comprehend the amazing responsibility you have as a consumer? You, as a part of the consumer collective, decide what products reamain in the market. If you don't like a company, certainly you can sell your interest in that company, maybe even get others to sell too! Government might be more tricky, especially here in the United States. You do have voice and a vote, but not on everything. The United States is a "representative democracy". You get a say in who represents you, but after that the best you can do is remind them who and what they represent. Not to worry though, he/she will be back in a couple years asking for your support again, and you will have the responsibility again.

The consumer vote must remain strong. The strength of that vote is threatened by misuse of personal credit. Personal credit has marginalized many consumers, and will continue to as long as consumers use it irresponsibly. Consumers should work toward a minimizing their personal debt and create responsible habits when using personal credit. Personal credit allows a single consumer to become the equivalent of 3/8 of a vote or less, and barring and misrepresentation, the consumer did it to his/her self.

In this difficult economy it is more important than ever that the consumers recognize their role and responsibility. Every dollar that is spent, or invested, or saved is an affirmative vote. Power to the Consumer!

Matt Kemper
www.YourCreditCompany.com