war on the middle class

[leoskee]

Wow! I didnt know that oil for homes was that much. I replaced all of my windows in my house, installed new siding and insulation and installed new front and back doors. I've been keeping my temp at 70 because of my 3 1/2 month old since December but before that my temp was at 64 when not at home and 66 when home. My bills went from $500-$600/month during the last two winters to the $320's even with the higher set temp. Its a long term investment but it has paid off so far.

But back to the middle class crisis. Everyday I have been thinking of how I am going to pay for college for my daughter and she is not even a year old! The prices of everything around us is going up at such a disproportionate rate that many middle class families are just barely getting by. Im lucky my wife and I do not have any debt besides our mortgage. If we did things would be very difficult with the sky rocketing prices of gas, food and other necessities. Something has to be done to even things out soon because it just doesnt make sense that all of the oil companies are making billions of dollars and the average person is going into the red day by day.

 

[wxl14]

Everyone feels the pinch. The biggest problem I feel is the value of the dollar going down. For the first time in history the dollar is not prefered. Also for the first time in history the Canadian dollar is worth more then hours. The reason why oil cost so much is because it is based on the once almighty dollar. As value of the dollar slip then oil will rise. In all I blame shitty finacial businesses and shitty realestate brokers who screwed up the economy by offering interest only loans. 50 year mortgages and approve anyone who could put two penies together. I hope they enjoy all the money they made as its now worth crap. Welcome to Market Correction its going to hurt and be very painful. So brace yourself the Sh it is going to hit the fan.

 

[fritz]

It has nothing to do with shady business and shady real estate brokers, it's wall street. Every bank is owned by a wall street investment firm: JPMorgan Chase, etc. All of the sub prime lenders were subsidiaries of Wall Street Firms. First Franklin Financial was owned by Meryl Lynch. Every Wall Street firm had a sub prime lending house. The Wall Street firm sold mortgage backed securities via hedge funds and what have you and then lent out all the "free money" to anyone. There was no check whatsoever. People were borrowing a million dollars based solely on their credit score. There was no check to even see if they had a JOB! The lending institution made a ton of money on closing costs and selling the loan on the secondary market.

Once the bubble burst so to speak, the wall street firms closed down the lending houses in a "well it was a good run while it lasted" move. In truth the companies went bankrupt but they did make a fortune while they lasted. Now the companies that lent the money are gone but they companies that bought those bad loans are still around. They are having to bear the brunt of that bad debt.

The Wall Street execs are fine, they get to keep the money they made giving bad loans because they found a way to do it legally. In the early 90s they would have all gone to jail or been sued by the federal government for the amount of bad debt that they caused but they found a new way to do it and this new way was legal. After all being a bad businessman is not illegal. The Mel Brooks movie "The Producers" comes to mind.

Bear Sterns went under because they had so much of this in their portfolio. These firms and hedge funds often operate on borrowed money, like playing on margin with stocks. They borrow based on their assets. The debt they own is an asset. Now sub prime loans perform at about 65% meaning that 35% aren't paying. That causes it to be devalued which decreases the amount of assets they have. If you lend them money and you see their assets shrinking you put in a call, IE: I want my money back, pay me now. This creates a nosedive. As you make a call for your debt to be paid it further devalues their assets which creates another call on your part to get payment on your owed money vs. their ever shrinking assets. People begin selling off their stock, further devaluing their assets and plunk they hit bottom. In here as well is that they write off the full amount of the bad debt they have when it all isn't really bad debt. Remember, 65% of those loans are being paid on time so while they write it off as 0, it's not 0 as 65% of the assets are performing.

In steps JPMorgan Chase:
"Hey all of this stuff is worth 0, I'll give you $2 a share for it"
Remember it's not worth 0 since 65% perform. The Bear Sterns building alone in Times Square is probably worth a good chunk of what they paid. Plus JPMorgan Chase gets the advertising of being the company not effected by this credit crunch that has the power to bail out other companies. JPMorgan stock goes up, execs cash out, little guys looses.

The thieves that have F'd up our economy are the investment bankers that thought this up and that took advantage of it. Truthfully it's criminal what they did but technically it's not.

 

[jejton]

Fred thanks for the informative post but I must disagree that all the blame lays on a handful of investment brokers. There is plenty to go around and being that we live in a democracy, the blame ultimately lays with the people. After all it is WE the people that make up the government, WE the people that make up the investment banks, WE the people that buy gas guzzling SUV's, WE the people that take out mortgages we can't afford without doing any reading, WE the people that spend millions of dollars to support athlete's, actor's and music star's coke habits while complaining of every dollar raise that teacher's request, WE the people that elected our leaders ( even if we don't vote then we allow them to get elected ), and WE the people that choose our priorities.

 

[fritz]

You're 100% right and it's not a handful of people, millions made money on this. Here's my issue:
My wife writes warrants all the time for people committing credit card fraud but the police stop chasing it, rightfully so because credit card companies WILL NOT prosecute. EVER. The ADAs that assist in this process do nothing, 90% of their job is covering another department because their primary job, assisting in the prosecution of credit card fraud DOES NOT EXIST. Credit Card Companies NEVER press charges.
Instead they raise interest rates

Medicare fraud is a biggie also. It is estimated that billions of dollars are stolen every year from the medicare system. When was the last time you saw a medicare ring busted on the news? Never? Interesting. You have a few in your neighborhood I guarantee it. It's uasually a medical building, a kid comes into one dr. and is referred to every other doctor in the building. X-rays, MRIs, etc. Maybe he gets the treatment, maybe it;s only on paper. On paper though he comes back every single week for two months, $14,000.00 each visit. For a cold. So does his mom, and anyone else they have info on. These rackets often generate $100s of thousands of dollars a week and most of it is sent overseas. Think of that next time you look at the money taken from your check. No one goes after them.

Commit credit card fraud or steal from Medicare/Medicaid, to quote from Lord of War:
"The ones who know don't care and the one's who care don't know." Although this is America, no one cares and if they do they won't next week when American Idol is down to the top 8.

 

[pecan2phat]

You know that you are screwed when you don't even qualify for the stimulus check.

For the taxes that I paid on my home in LI the 10 years that I lived there, I'm glad that I left.

 

[TimberTDI]

I think more and more people are living above their means, has to have the latest gadget and gizmo.

Think about how much you pay in non-essential bills every month. Think about how much you've sent to your cable company and cell provider every year. I guarantee that everyone hear can easily cut 30-40% of their spending and not even feel like they are living a "lower" lifestyle.

Duke, What kind of contract did your union sign that you are making the same as five years ago?

 

[duke62]

my union made a contract that helps out the contractors more then us.sure we have gotten a raise but not nearly enough to cover what the cost of inflation has gone up from.for god sake if this country is so worried about people going into forclosure stop raising the taxes 400 dollars a year on my tiny cape that im living in.it costs me 900 a month to fill up my fuel tank to keep my children warm and if it wasnt for this mild winter it would have cost me twice that.i cannot find an insurance company to give me a fair price on my li home.it jumped from 650 a year to now 2000 a year.all because insurance companies are worried about a hurricane in the future.lipa increases 5% a year as does cable ,phone.college for my kids are you kidding me.how the hell am i going to afford that when i cant even take a day off work to see my doctor for my 3 herniated discs.im 31 years old ive been in my union now for 13 years.i cannot retire till im 57.which means i syill have 25 years of hard labor with this pain just so i can retire and die a year later which is what happens more then less in my business . believe me i make a damn good living what im saying is how the hell is someone going to buy a house who is middle class these days without the constant struggle.yeah years ago there was no gizmos but it was pretty much a 1 income household.my wife and i both work and we have to for a very long time.my oldest is 11 and he has 1 more year of after school.how is my wife and i going to keep and eye on him when he is home alone next year after middle school and the summer.he is a very smart kid but he has constant supervision.we all know all it takes is a little to get them off course and thats what im afraid most of all.but if my wife does not work we will not make it out here on the island and will have to look for another state to live.that is my point in all of this.

 

[jejton]

I have one thing to say when I hear people complain about college costs - state school. The only reason - the one and only - that private schools cost so much is because people are willing to pay for the name brand. You can get as good, and sometimes better, education at your community, city or state college. Thank God I learned my lesson and only made that mistake once.

 

[GQ22]

.

Capitalism created this. leads to inflation, speculation, and disparity which only gets worse until the government steps in. How is it that a CEO can mkae a 150mm in a year, while people get laid off and entry level makes 50k. Is his job really that much more important than a manager or entry level person making much less?

Also as far as our dumb ass goverment goes, they should stop with standard old fashion economics like reducing interest rates, and help subsidize grants to help make this country great again. Things like solving global warming, air pollution, water powered cars...if we actually did stuff like this maybe our economy would get much better. Say ford didnt shut down in detroit..who knows....i sometimes wish this country was run under a dictatorship with just a string of just and sound minded rulers to clean up this whole mess without bueracracy...

 

[GQ22]

also the youth of america sucks big time. We are about to enter a period in time in which the youth of america does not produce as much as the baby boomers, and this will have an overall impact to the economy. People dont talk about this stuff, because its hard to quantify, but it makes perfect sense. ie the helicoptor parent, always hovering over their children, never making them work hard, always protecting or spoiling. Things dont seem the way they used to. if you check out portland oregon, it is a town full of runaway kids that are heroin addicts.

 

[fritz]

You're 100% dead on right about State School. My wife and I talk about it all the time. She went to law school and if you compare everyone she went to school with you find two distinct groups that you can separate them into:

Parents paid for Law School
Took out Loans for Law School


For the most part, those who took out loans for school have very good jobs right now. They worked their asses off to ensure that they would get high paying corporate jobs that could pay off their loans. On the other hand those that graduated without any debt had a far more laid back attitude towards working and the money that they would need in life.

I don't know that one is better than the other but is certainly factual. I would be happy either way truthfully. If my son leaves school with no debt and can work where he is happy because he need not worry about paying loans off, that would make me happy. If the drive to pay off his debt leads him to work harder, that would also make me happy.

Capitalism is not to blame, "Greed is Good, Greed Works". The issue is that we don't care. I think it's Germany that does not allow CEOs to make more than a certain times the salary of the average employee. Try doing that here, you'll be labeled a communist and told how you're unAmerican.

I tell my wife all the time that we should move to Canada. I tell her that right off the bat we'll be $600,000.00 richer. All three kids college educations will be paid for as soon as we cross the border. Health Care will be covered as soon as we cross the border. Europe is the same way. Which was my point with my "what happened to America" comment. We used to lead the world in most everything and now we don't. We've fallen way behind and it pisses me off as an American.

I get even more pissed off when I'm told "that won't work here, we can't do that here". Well we waste billions of dollars on sh1t. How about we admit that someone along the way goofed, we hire up a bunch of consultants from Canada and Europe and bring them over here and let them figure it out, they've done it before. They come from Republics just like we do (we're not a democracy, we're a republic) their system is just like ours.

Jefferson went there to learn when we were planning our nation and what he learned was invaluable to who we are today. Why not learn again from his example?

 

[inked]

Wow very depressing post. We have no one to blame but ourselves! We just piss everything away! In the US as a whole all we do waste and then complain we don’t have anything, everything has to be the biggest and the best. As a kid growing up we didn’t have allot. But we had what we needed, food, clothes and a roof over our head. Vacations were spent in a tent at the camp ground 10 miles from us. In my younger years I remember thinking we were poor, that’s why my family didn’t go to Disney every year, didn’t have a big house, didn’t have a new car. While all my friends parents did. I have a dad that grew up in a totally different generation he had me in his 50's (he is 89 now). Some how he and my mom managed to pay off that small house, that used car and feed us, all while making no more then 7 bucks a hour at the time. The amazing part is they did that all with that tiny amount of money and get this actually saved money too! Don’t get me wrong I am just as bad as everyone else, obviously look where this is posted lol! I wouldn’t even want to know on a average what we all spend in a year to keep what amounts to a box of water. Some place along the line we have gotten off track! Its like we think we need all this stuff to make us happy or feel complete. Everyone is debt but we still continue spending. Its also funny that we get rewarded for being in debt too no one pays off there houses anymore because Uncle Sam gives us more money back on our taxes. I have no idea how to fix it or if it can be fixed. I highly doubted a elected official is going to turn it around, even if they do we would spend it on new toys anyway. I just wonder who is happier? Us? Having all these cool toys and gadgets and live in debt Or our parents, grandparents who had a simplier life and didnt live from pay check to pay check.

P.S
I just got my income tax back anyone got any sps for my new tank lol!

 

[jejton]

Capitalism created this. leads to inflation, speculation, and disparity which only gets worse until the government steps in. How is it that a CEO can mkae a 150mm in a year, while people get laid off and entry level makes 50k. Is his job really that much more important than a manager or entry level person making much less?

Yes it is. That's why one person is CEO and 10,000 are entry level. Unless your father installed you, you have to work or buy your way up to CEO. Whether or not that justifies their salaries, well VOTE at your next shareholder meeting. Gotta love democracy.

Also as far as our dumb ass goverment goes, they should stop with standard old fashion economics like reducing interest rates, and help subsidize grants to help make this country great again. Things like solving global warming, air pollution, water powered cars...if we actually did stuff like this maybe our economy would get much better. Say ford didnt shut down in detroit..who knows....i sometimes wish this country was run under a dictatorship with just a string of just and sound minded rulers to clean up this whole mess without bueracracy...

You'll be hard pressed to find a dictatorship that fluorishes long term economically or otherwise. Just look at China. Its only a matter of time before their government comes apart. While it may not become a democracy like ours, their system wont last. You can't give people economic freedom without them eventually wanting political freedom.

 

[Aqua Pro Builder]

You can't give people economic freedom without them eventually wanting political freedom.

Not so sure about this point.

Take Hong Kong as an example before returning to China. Under British rule, people in Hong Kong is top freest trading city in the world yet people of Hong Kong has NO(ZERO political freedom at the time.) I am pretty sure 99.99% of people from Hong Kong from that time are proud of being Hong Kong citizens who can choose to become whoever one wanna be(except A POLITICIAN.) When I was a kid, the police of rank lieutenant has to be a British White person but yet most people in Hong Kong were happy because we had greatest financial freedom. My father became one of the top richest in Hong Kong in less than 10 years after barely escaped from the Nanking Massacre(i.e. absolutely penniless.) The British, at the time, cared less how rich you get, JUST DON'T GET INVOLVED IN POLITICS. People of Hong Kong at the time were simply lured to admire the greatness of wealth(I would not mind either, provided that I am so poor now) rather than having a free political system. 60 years of dictatorship under British rule since WWII, Hong Kong was one of the top 20 GNP per capita(actually was better than Britain itself).

 

[duke62]

well as i sit here wondering about the future i can honestly say i feel bad for my grandchildren and my kids arent even out of elementary yet

 

[pecan2phat]

duke,
Get the hell off the island, it'll suck you dry. Took me 10 years to realize that.

 

[SIReefer]

Waaaahhhh, Now my kids'll never move out.
Oops, should this be in the WAAHHmbulance thread????