The Baumgarten Report

Let’s put this financial mess into a little perspective.

After all, when you go to the doctor and his diagnosis is a life-threatening one, you need to hear the truth. Right between the eyes. Then you can consider your options. But sugar coating things doesn’t help very much.

People who have lost their jobs and those who may be next aren’t going to find it very easy finding new ones.

Those who have looked down their noses at the “lazy poor people” who should just go out and get a job better hope that the job-cutting axe doesn’t fall on them. But if it does, it will change their perspective on life real quickly.

Yesterday, during News Talk Online on Paltalk.com, I mentioned that some people are supplementing their nutrition with cat food. I was accused of taking that line out of some socialist playbook. But the sad truth is, there are people in the United States, my fellow Americans, who actually are buying pet food for human consumption.

The New York Daily News today reports about a man from New York state who worked in a mine. He was laid off, but was recruited by a Montana mining company to re-locate there for a job. So, not wanting to be one of those “lazy poor people” he packed up and drove 2,000 miles and reported for work.

His first day on the job finished, he returned to his new home, only to get a message on his cellphone. He was being laid off again.

Take Sam Gallup’s experience. Put it in your mind. Now increase it by one million. Or two million. Or three million.

Imagine the drain on our economy if, say, General Motors folds. And one, two or three million people, GM employees, suppliers, the people who transport the vehicles, the folks who work at the car dealerships – you get the idea – find themselves out of work.

Not only will they be out of work, but like Gallup, they will find it difficult to get other jobs.

There is good reason the Dow keeps nose diving on word that Congress is reticent to approve a GM bailout package. It’s ture that unlike the Wall Street bailout there must be actual oversight. A way to ensure that improvements and efficiencies are made to make it more likely that, as with the Chrysler bailout decades ago, there will be a return on the taxpayer’s investment. But letting GM fail is lunacy. It’s the proverbial cutting off one’s nose to spite one’s self.

The CEOs of the Big Three are correct when they say if one falls so may the other two. The auto manufacturers share suppliers. If GM were to close shop, so too will some of their suppliers. Making it impossible for Ford and Chrysler to keep their lines running.

Imagine the ripple effect in the economy. Imagine the increasing numbers of people, whose jobs are not even remotely related to the auto industry, who will be getting pink slips.

Now, imagine looking in the mirror in the morning and seeing Sam Gallup’s face staring back at you. Just imagine.

African nations are forgiven their debts. So too, says Danny Schechter, people who are defaulting on their mortgages in the United States.

Author, media critic, journalist and filmmaker Schechter was my guest today on News Talk Online on Paltalk.com.

He says the Congress pushed through with urgency a bill to bailout the financial industry. Then the very next day, Pres. Bush, in his weekly radio address to the nation, told the American people things will be OK in the long run. So where was the urgency, he asks.

While Schechter recognizes that people who took out flexible loans that put them in default on their mortgages have to be responsible for their decisions, the scales of responsibility tip toward the lenders who used predatory sales tactics to get them to sign for the loans in the first place.

DETROIT – The battle cry among those who opposed the Wall Street bail out has been, “what about us?”

Many opponents to the bailout want to know why the government is helping the fat cats that got us into this fiscal mess but doing nothing for the people who are the victims, whose homes are being foreclosed at record numbers.

One government entity, however, is doing something about it.

Wayne County Michigan is intervening on behalf of homeowners who face foreclosure.

The plan, outlined on News Talk Online on Paltalk.com by County Executive Robert Ficano, is now, he says, being looked at by other regional and local governments across the nation.

Financial counselors are being provided for those in Wayne County facing foreclosure. The counselors try to negotiate a new mortgage payment plan that keeps the person in his or her house. If that is unsuccessful, they try to find the person more modest accommodations.

And, says Ficano, if the worse occurs, they help them move out with dignity, rather than having to face the embarrassment of bailiffs forcing them out of their homes and tossing all their worldly belongings on the curb.

I know of no other government that’s this proactive in helping citizens in its jurisdiction. Hopefully Ficano’s plan does help people who’ve received foreclosure notices. And hopefully the other governments studying his program follow his lead.

Costa

DETROIT – Chuck Costa is known as the guy who once owned the most inner city residential units in Detroit. He went belly up in the 70s when the government ended direct vendor payments to landlords. But diversified and recovered.

As the former head of Detroit’s landlord association, he has seen economic declines in Detroit in general and a housing market that has gone south. But never, he says, as bad as it is today.

Worse now, he says, because of the downturn in the automotive industry. Costa was my guest today on News Talk Online on Paltalk.com.

Costa says there is, however, a silver lining. Housing prices are so low, he says, that investors can pick up residential properties for a song, and make money.

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Photo credit: Gary Baumgarten

President Bush just got through addressing the nation in an attempt to ease anxiety about the economic situation.

The president is, of course, a lame duck with a low approval rating. Seemingly, no one wants to listen to him.

But this is a crisis. His administration is taking steps to alleviate its affects. And he should be listened to.

There were no new programs announced. No new strategies. Instead the president recapped previous announced steps, including the $700 billion Wall Street bailout, designed, he said, to make capital available to the economy.

Wall Street works on psychology. “Anxiety,” the president noted, “can feed anxiety.” Hopefully his calming words will have a positive affect.

He began by acknowledging that this is a “deeply unsettling time for the American people” and then went onto recap what’s being done.

Among the points he made in his brief address:

*The Federal Reserve has injected hundred of billions of dollars into the system.

*The prime rate decrease is designed to help banks borrow money.

*Money in insured banks and credit unions is safe.

*Programs have been established to prevent foreclosure and make it easier for “responsible homeowners” to refinance. “If you’re struggling to meet your mortgage,” the president said, “there are ways that you can get help.”

*The SEC is “focused on preventing abusive practices” by investors who might attempt to manipulate the market to take advantage of the crisis.

*Other nations are joining with the United States in initiating steps to help mitigate the worldwide economic downturn. “We’re in this together,” Bush declared, “and we’ll come through this together.”

*The housing market will eventually stabilize. “When supply and demand balances out our housing market will begin to recover,” he said.

Bush assured Americans that the plan his administration is “aggressive” and is “the right plan.”

Finally, he promised that his strategy is “big enough to work.”

“We know what the problems are,” he said. “We have the tools to fix them.”

Friday’s News Talk Online on Paltalk.com focused on the top two stories of the day, the vice-presidential debate and the House passage of the Wall Street bailout plan.

Many callers felt both Sarah Palin and Joe Biden made excellent points during the debate. Though some Republicans accused Biden of lying and some Democrats (and others) pointed out that Palin declined to answer some of the questions posed to her, electing instead to talk about topics she wanted to raise.

A CNN analysis about the debate found that both candidates made misleading or untrue statements, and predicted there will be a lot more of that between now and election day.

The bailout passage was applauded by some, decried by others. But even if one favored a package to help Wall Street, the pork that was stuffed into the bill was distasteful at best (money for wooden arrows and NASCAR for example). Those who voted yes should be expected to explain that portion of the bill to their constituents as they return to their home districts for the election recess.

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Today’s edition of News Talk Online on Paltalk focused on two issues; the economic bailout plan and tonight’s vice-presidential debate. Since the precursor discussion of the debate is about to be dated, I’ll concentrate on talking about the bailout.

Here’s my problem with the process, as articulated during the show and not contradicted by any callers.

The House voted the original measure down because of strong constituent opposition. All House members, of course, are standing for re-election this year. It wouldn’t do well to fly in the face of the barrage of phone calls, e-mails and letters in opposition to the plan.

The Senate, of course, has the luxury of staggered and longer terms. So it approved a modification of the plan the in the hopes, from the perspective of proponents, of pressuring the House to now follow suit.

Now, I don’t know how good a plan this is. But I do know one thing. It shouldn’t have included pork barrel spending measures. This is not the time to play that game. The economy is in dire straits and if that money is really needed for a bailout, by God, then every penny of the $700 billion budgeted should go for that. Can anyone on Capitol Hill say Bridge To Nowhere?

Frankly, it’s high time Congress write bills in terms the average American understands. And every portion of those bills, especially those that appropriate funds, should be directed toward the resolutions’ stated purpose.

It’s time to stop pork barrel spending. If Congress doesn’t have the resolve to do this itself, then it should hand it over to the president by giving him a line item veto.

It’s time for our elected officials to start acting responsibly!

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