Bailouts and Begging
It is only the poor who are forbidden to beg.
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Aristotle on Thought
ByHeatherIt is the mark of an educated mind to be able to entertain a thought without accepting it.
— Aristotle
Quality Counts
ByHeatherA job done by half is never done right.
— Mom
Consumers Go On Strike
ByHeatherAs the economy continues to sour, consumers have gone on strike. For the past few months, I have been contemplating the following economic and social trends that seem to explain why.
- American productivity has risen almost 20% in the last decade (Source)
- Real median income over the same period has declined (Source)
- Executive compensation has risen astronomically (Source)
- Consumer debt has risen substantially (Source)
- Consumer spending comprises 70% of GDP
Rising productivity is what enables companies to increase employee’s pay. Increases in pay result in the overall rise in our standard of living. However, in the last decade, this relationship between productivity and rising employee pay seems to have been fractured.
Magic is a vanishing art
ByHeatherMagic is a vanishing art.
— Bumper Sticker
On the Financial Meltdown
ByHeatherAs they say on Wait, Wait, Don’t Tell Me, “and now for some quotes from this week’s news.”
First, a delightful blog I discovered called The Big Picture by Barry L. Ritholtz. In a post titled The Underlying Basis of Finance and Credit, Mr Ritholtz observes:
Over the entire history of human finance, the underlying premise of all credit transactions — loans, mortgages, and all debt instrument — has been the borrower’s ability to repay.
Except for [the 5 year period from 2002 to 2007] the entire history of human finance was rather reasonable about the basis for making loans in general, and extending mortgage loans in particular.
For 99.9996% of the last 1.2 million years, loans were granted primarily on the condition of whether or not the lender believed that the borrower could repay. Between 2002 and 2007 this condition was dropped.
Running the Country
ByHeatherToo bad all the people who know how to run the country are busy driving taxi cabs and cutting hair.
— George Burns