First, there was the whole thing about sending out the SEALS to rescue the American captain who'd been captured by Somali pirates. Gutsy move. And the pirates are pissed, of course. Their statements can basically be boiled down to, "How dare the US stop us from committing illegal acts for self-enrichment!" They went on a spree today, seizing four ships to show how tough they were. Of course, none of them were US. Yeah. That'll show us.
However, two events also this week prevent this silver lining from overtaking the cloud. First, Obama appointed a fifth RIAA -connected lawyer to the Justice Department. What's really infuriating is that this is the FIFTH. I wrote previously when he put two of them up in the #2 and 3 spots. So, at some point, he added two more, and the fifth just made the headlines. I just know that our Hollywood overlords are going to have them looking for wardrivers instead of doing things like combating domestic crime that results in things like murder or pyramid schemes that rip off regular people at the expense of those in charge.
Then, there was Obama's speech today. He said that the economic slump was brought on by people's desire for instant gratification and running up too much debt.
Oh, where do I begin to pick this one apart?
1) Part of the problem is the sheer amount of debt business ran up. Sam Zell bought the Tribune companies for $7.2 bil in loans, not cash. The New York Times shelled out $1.1 bil for the Boston Globe, and when the sale was complete, paid $500 mil for a new office building. Now, these companies that went berserk are finding the revenues aren't enough to pay off their spending sprees. And remember...these are the companies that provide jobs. Without them, there is no money entering the workforce to prop the economy up.
2) Economic models have been based on US consumer spending accounting for 78% of the GDP. That is not how it's supposed to work, it's supposed to be lower than that, your GPD is supposed to be based on more stable industrial numbers. In other words, the current economic model was created by others leaving consumer spending as pretty much the only game in town despite macroeconomic warnings.
3) Two years ago, people started trending from adding additional debt to paying it off. So much so, when Bush Jr. (a.k.a. Shrub) signed the stimulus package to give everyone that extra $600, he told people to spend it, not pay off debt with it. The party was breaking up a long time ago, so there is no sudden shift to guilt-trip people over.
4) I know a couple of people who tried going car shopping and despite having perfect credit, the banks wouldn't approve their loans. Those that can spend are being shut out.
5) So, spending like mad and racking up collasal debt is a recipe for disaster. Then why is Obama's economic plan all about inflating our way out of the debt?
I'm guessing that the higher ups who live with the stock market and business cycles are running into a problem...in order for them to get back where they were, people need to act like they did before the crash. But you can't make them unsee this stuff. They KNOW times are tight. They KNOW they need to live within their means or they risk losing everything if a company goes under and they lose their jobs. So you have everyone from the Fed to (now) Obama trying to get people to quit being so selfish, good times will return if we behave like these are good times.
As someone who has been slowly but surely digging his way out of debt, I find this whole thing just a little sad.