Thursday, October 9, 2008

Me being impartial....

Good Policies Can Save the Economy
Why we need lower tax rates and more skilled immigrants.

By LEE E. OHANIAN


President Bush argued that the passage of the Treasury rescue plan was necessary to prevent the U.S. from entering a severe downturn. Yesterday, the Federal Reserve announced it will begin buying commercial paper to, in the words of Fed Chairman Ben Bernanke, help "financial firms cope with reduced access to their usual sources of funding."

Both of these actions were designed to restore confidence in our financial markets. Unfortunately, they have created considerable fear about the underlying strength of the U.S. economy. This panic has roiled stock markets and led to comparisons between today's crisis and the Great Depression of the 1930s.


Getty Images
The Treasury plan and the Fed's emergency measures are certainly useful. However, their main contribution is not preventing a Depression-like scenario from evolving out of the current financial crisis. The real economy is a great deal stronger than many believe.

Despite the September employment report, there are no signs that the economy is on the verge of a depression. Real GDP rose at an annual rate of 2.7% over the last five quarters, which is on trend, once a correction is made for the decline in the growth rate of the working-age population. Productivity growth remains rapid. Consumer installment borrowing, which represents most consumer nonmortgage borrowing, is up 5% year over year, and the interest rates on these loans are equal to, or below, the levels that prevailed over the last five years. Commercial and industrial loans are up 9% year over year. And to those with good credit histories, conforming mortgages are available at 30-year fixed rates of around 6%. That represents an inflation-adjusted mortgage rate that is low by historical standards. So the current financial crisis is not as deep or as broad as some have feared.

Moreover, financial panics and crises are not as depressing as many believe. Current discussions point to the banking crises of the Great Depression as the best evidence that the financial crisis would devastate the U.S. economy. This is based on the very common misperception that the banking crises of the 1930s helped turn a garden variety recession into the Great Depression.

Banking panics did not create the Great Depression, nor did the elimination of panics via the introduction of deposit insurance generate economic recovery. The first banking crisis of any national significance didn't occur until the fall of 1931. Before this, there were regional banking crises that had no measurable impact on capital markets, as the spreads between Treasurys and risky obligations changed very little. However, the Great Depression was already "great" at this point -- industrial production and employment had fallen by more than 35%. The genesis of the Great Depression was not a banking crisis.

Given my view that the crisis is not as deep as some have feared, and that the potential impact of the crisis would be smaller than what has been advertised, should we even have adopted the Treasury plan?

Absolutely. While the economy would avoid a serious downturn in the absence of the Treasury plan, recent financial market conditions left unchecked could lead to a moderate recession. And there is a real danger that even a moderate recession, along with the current perception of an economic crisis, would lead to calls from various quarters for bad economic policies -- policies that tend to either pander to special-interest groups, benefiting relatively few at the expense of many, or raising taxes, particularly on the nation's most productive citizens, many of whom create jobs through their own enterprises.

There are many historical precedents of bad policies following crises. The worst case was after the stock-market crash in October 1929, which produced a truly perfect storm of bad policies. Tax rates rose, tariffs rose (reflecting special interest groups attempting to insulate domestic producers from foreign competition), and both Presidents Herbert Hoover and Franklin Roosevelt strongly promoted industry-labor cartels that were designed to stifle domestic competition.

In the absence of these policies, the Great Depression would almost certainly have been like every other U.S. recession -- short-lived and relatively mild. Normal recovery didn't begin until the most onerous of these policies were reversed, a process that didn't begin until the end of the 1930s when antitrust activity was resumed, and during World War II when the National War Labor Board reduced union bargaining power by limiting negotiated wage increases to cost-of-living adjustments only.

Bad polices impact the two most important determinants of living standards: output per worker and the amount of time devoted to market work. We need look no further than Western Europe to see how bad policies have depressed a number of advanced market economies. Hours worked per adult in the average Western European country have declined nearly 30% since the 1960s, as tax rates on labor are up 15 to 20 percentage points.

Japan in the 1990s is an example of bad policies that depress productivity growth. Once Japan stopped subsidizing inefficient production and reformed its banking system, productivity growth resumed. Another example is Mexico. After a financial crisis in 1981, Mexico had a depression resulting from polices that depressed productivity by severely restricting competition in its banking sector and by allocating loans to preferred borrowers at artificially low rates. Chile also had a financial crisis in 1981, but in contrast to Mexico, introduced policies that fostered competition in its banking sector and streamlined bankruptcy process. These policies contributed to substantial productivity growth that has sustained Chile's growth "miracle" for the past 25 years.

I am particularly concerned about bad policies because significantly higher taxes have been proposed by Barack Obama. His plan would raise the marginal tax rate on the most productive workers more than 10 percentage points -- an increase that would bring us near Western European levels. His plan would also raise capital income taxes, taxing capital gains and dividends at 20%, compared to a 15% rate under Sen. John McCain's plan. A five percentage-point difference might strike you as small, but it is not. I have calculated that a five percentage-point difference in overall capital income taxation over the long haul is equal to a difference in the nation's capital stock of about 18%. This means a 6% difference in GDP and a 6% difference in the average wage rate. This means that real GDP and the average wage would fall, gradually but persistently declining about 6% after 25 years. That's not quite a Great Depression, but a significant step towards one.

What should be done? We should encourage the immigration of prime-age individuals. Beginning in 2007, net immigration fell to half of its level over the previous five years. Increasing immigration would increase the demand for housing and raise home prices. And note that the benefit would be immediate. Home prices -- and the value of subprime obligations -- would rise in anticipation of a higher population base. The U.S. particularly needs highly skilled workers. These workers not only would purchase homes, but would generate higher living standards for all Americans.

Will we duck a depression? We will if the principles of economic growth -- increasing the incentives to work and save, promoting competition, and fostering economic openness -- are maintained. This is the most important lesson we learned, the hard way, from the 1930s.

Mr. Ohanian is a professor of economics at UCLA and director of the Ettinger Family Program in Macroeconomic Research.

MY RESPONSE>>>>>>>>

Banking panics did not create the Great Depression, nor did the elimination of panics via the introduction of deposit insurance generate economic recovery. The first banking crisis of any national significance didn't occur until the fall of 1931. Before this, there were regional banking crises that had no measurable impact on capital markets, as the spreads between Treasurys and risky obligations changed very little. However, the Great Depression was already "great" at this point -- industrial production and employment had fallen by more than 35%. The genesis of the Great Depression was not a banking crisis.

Ok this entire paragraph is flawed in my opinion. What he’s saying is that the failing of "regional Banks" did not have an effect on the great depression. This just doesn’t make any sense. At this time Regional banks were all that existed. There were no national banks with the exception on JP Morgan. These capital markets did not suffer BC the market had already crashed at this point. Also when he says there was no banking crisis of significance until fall of 1931. The crash occurred in the fall of 29. Which then filtered down to the regional banks.

If he’s saying none of this contributed to the fall of employment of industrial production. Then what the hell did?? He contradicts himself several times throughout the article stating that when people no longer have faith in the economy it will fail. Isn’t that exactly what happened in the great depression??? I’m not being argumentative but if Ur going to say this didn’t cause it, you better tell me what the hell did

Also at the end of the article where he states that immigration is necessary to help re-build our economy.... How can this help if when they immigrate they cant find jobs? This is the situation for many EDUCATED AMERICANS! That’s bogus

Then finally when he says that things aren’t that bad right now bc a person with "good credit" can still get a great rate on a 30 yr fixed mortgage. OF COURSE they can... but for how long? When they loose their job, default on some bills, get behind on their car/mortgage.... that’s when they will have BAD CREDIT!!


I love you but this guy is a right wing economist...

Saturday, August 9, 2008

update 8/8/08

just an update.. I start boxing on Monday... should be interesting! The instructor wanted me to actually "Box" as in like.. in a fight... hahaha... seriously....

I got a job.. then quit a job... Still hunting for something in politics but as of now.. waiting tables will have to do. I loved the idea of working for obama but not exactly the idea of working 12 hours a day 6 days a week... im just not that focused.

Love life.... SUCKY.... lots of randoms here and there but after moving to charlotte and assuming that I would not fall into old habits.. I have. Now I must move on and suck it up

Its been a really rough week but hey im getting through it... keep ya posted!

Wednesday, March 19, 2008

St Patty's or St Francis? (Hospital)

After a rough (that's putting it mildly) week in NYC. I sobered up enough to participate in Columbia's 5 points St Patty's day festival...or so I thought. The day started good. We ate Breakfast, green pancakes and all, and then went down the the action. Throughout the day I was pretty much just trying to pace myself. I was determined to stay alive past midnight. Well all this was going well.. a few randoms run ins with people I haven't seen in years. Then, all of a sudden, one of my friends says "Lauren! look t your foot your standing in a puddle of blood!" I was kinda shocked considering I had not felt anything nor did I remember doing anything that would cause a gash on my foot that led me to believe that I kicked a beer bottle like a soccer ball.

I am very stubborn normally. Add alcohol and multiply that times a thousand. Everyone kept telling me to go to the hospital. My response was "There's no way I'm leaving St Patty's day to go sit in an emergency room for 8 hours!" So, I solved the problem, by tying a bar rag around my foot. I know...not smart. Three bar rags later and my friends were freaking out. Finally J came and took my to the emergency room. We walked in (I Limped in) and I decided I was going to the bathroom. I think I said something like "I'm not staying here every retard in Columbia is here.. its ST Patty's day!" Obviously I was unaware that I was also one of those retards. Soooooo.....I stuck my foot under the sink, washed off the blood, covered it with toilet paper and headed back to the bar... that's right I WENT BACK TO THE BAR! I awoke the next morning in excruciating pain and immediately went to doctors care. I now have 9 stitches in my foot that resemble a job a four year old would do on their teddy bear. I guess I also have a story of St. Patty's day.

My New York City Debacle

As many of you probably know most of my life I have been planning on going to law school. I have also lived my life so far unaware of monetary issues and what the rest of the world calls "Fiscal Responsibility". You could also say I am a spoiled brat that has had Daddy bail her out all her life. I however prefer the term "fiscally irresponsible". Well much to my surprise about a month ago, I was informed by my dear daddy that he would like to retire within the next 50 years and therefore cutting me off. Including co-signing for student loans... and since I have only had like 2 kinda sorta real jobs in my life (Both of which I just decided one day to not show up.. dunno if you would call that getting fired or voluntary termination)I am unable to go to law school at this time.

Since I doubt my eBay, designer apparel, mikimoto pearl, and Kate Spade habit would be conducive to a homeless girl lifestyle, I decided to GASP! get a big girl job. I decided after watching all the Sex and the City episodes on my On Demand, that New York was the place for me. Luckily, and thanks to pageants, I have several connections in the Big Apple. I made a few phone calls and like a hundred e-mails and in about a month I had successfully lined up 3 interviews.

The first was with a division within the Ralph Lauren Brand called Club Monaco. This was on Wednesday. I walked in, the girl was stunning and I fell in love with the idea of working in the fashion industry. I was so excited about my new opportunity, I decided to celebrate with a night on the town with one of my best girl friends (Hayley's shout out here) that lives in the city. When we are together, lets just say its a coin toss to see which one of us can accomplish the sketchiest act imaginable...so needless to say I should have seen an interesting evening on the horizon.

Hayley is going to have to fill in the blanks and names because all I remember is ____ bar for drinks with her boyfriends Dad and sister. _____ bar for more drinks with two additional friends. APT...lots of Sapporo..lots of tequila...more vodka....and them a dancing club, and finally a random guy putting me in a cab at 2:30am.. or maybe that was the cab fare? Anyways.. after a few drunk dials, I stumbled my way to my hotel room fought with the key and finally passed out fully clothed.

I awoke in the morning to my alarm and wake up call my dear mother set for me. Scrambled like crazy to pull my hair back, wash my face, brush the alcohol off my teeth, get dressed, and make it to my interview with the largest commercial real estate company in the US ..maybe the world by 11 am. In the midst of getting out of my cab that morning, I happened to look at my feet. BIG mistake. I had the same shoes I was wearing the previous nite on and apparently I had lost the buckle on the top of one of them... probably my interviewers first indication I was not sober.

She wanted to walk to breakfast. GREAT. On the way, I dropped my only lifeline, My coke on the ground which soaked my BCBG dress pants...(Damn it, guess I'm not returning these for those killer shoes). When we finally get to the restaurant and sit down she orders and omellete. Ever girl can agree.. you cannot let a girl order food your trying to impress and you order nothing.. it makes her feel fat..not good. So I follow suit and later begin to believe that God hates me.

The omelette's come out, eggs are not fully cooked, runny. If you close your eyes spin around the room 10 times as fast as you can and then flip your head up and down 25 times you might get the same sensation I felt...complete nausea. The rest of the meeting was spent with me trying my best to not vomit on her. I went back to my room with every intention of making it to my final interview... God did hate me.... like 3 times...didn't make it.

Obviously not only and I fiscally irresponsible... I'm irresponsible in every aspect of my life...and now one step closer to begging for change on the street.

Seeing to believe?? In honor of Easter..

In today's world its hard for people to not over analyze their lives and leave certain things up to blind faith. This has been a problem for humans dating as far back as the bible. Thomas just did couldn't get his mind around the fact that Jesus had in fact, risen to heaven. He demanded to see and touch his wounds.

Why is it so hard for us to just do the best we can, plan as much as we can, and then just trust that everything will work out. This might be the hardest thing for any of us to do. We worry, especially women. Women worry ALOT. We worry about the men were seeing, (If they like us, if it will work out, will we get married, what about kids? is he cheating, will he cheat?, does his family like me...it goes on and on) But women also worry about what their doing with their lives, where their careers are going, and if they are on the right path. We also spend a lot of time worrying about our friends and families. As much as I might reject the stereotype that women are homemakers, they are inherently kind and caring (for the most part).

We are unaware of what the opposite sex worries or spends most of their time thinking about and we worry about that as well. When it comes to relationships, in my experience worrying is a waste of time. The one that is meant to work out in the end will, and the others are not wasted time. The others... now this is what most people spend their lives worrying about (Once you find that person, you probably wont worry it will just fit)... the others. The others are what make us who we are. We learn about ourselves through our interactions with other people.

Just like when we were toddlers, we learned to walk, talk, and crawl by watching and imitating others. we follow this process in relationships. We learn what characteristics are important and which values we want to instill in ourselves and more importantly in our offspring. My point is that maybe instead of spending a good majority of our time figuring out the right an wrong way to handle a relationship or a friendship, we should just use these traits we have picked up. We should use our best judgement to do what we think is right, then close our eyes and pray for the courage to walk away and leave the rest to fate. I know....easier said than done...

Friday, February 29, 2008

star to star?

Being someone who is involved and moderately successful at pageantry... I have to be prepared to take on a reasonable amount of slack. I mean lets be honest, beauty queens haven't exactly had the best reputation in the US lately. What I put up with and what I don't put up with is completely dependent on the person that's teasing me. J, A, B, S, EM.... they tease me all the time, they are also however very aware at the level of discipline I have and exemplify in order to participate in these events. They know what I sacrifice, and they also know that I am anything but your average "pageant girl".

Yes, I can be stubborn, self-centered, self-involved, and hard to deal with at times but I am aware of these things. When it comes to the things I take seriously in this life; family, friends, my goals; I put all my needs aside and try to be the best person I can be. Over the years I have taken a lot of criticism for the activities I choose to participate in and I understand that there is a certain stigma that comes along with pageantry. My problem lies when people ignore the fact that I am much much more than that. Yes, I am an attractive person and yes, that has worked to my benefit many times, but it has also worked against me. Please don't confuse these thoughts with me bitching about my life. I am grateful for everything I have and every opportunity these things have provided me with. My point is to maybe open up a new way of looking at the situation for a minute. No one ever thinks about the negative things that come along with this.

The majority of my life, I have busted my ass to distinguish myself as a smart, caring, well-rounded, and yes ATTRACTIVE individual. I have also faced terrified looks when I express my desire to NOT be a House OR Trophy wife, and instead choose to support myself AND my husband/family if I choose to have one. The response I often get is "Well you could always just find a rich guy and you know... live the life of luxury.. why would you want to work when you can do that?" I love designer clothes and italian shoes, but I love them more when I know I paid for them. But this is a whole other post. Its a little disheartening when it seems like no matter what I accomplish I can never be differentiated from the pageant stigma. I was nominated by a very distinguished professor to be a Rhodes Scholar. Some of my friends response was, "Its a good thing your pretty". I mean come on... that's crap... what happened to someone saying "Wow that's great congratulations on your hard work!" It doesn't happen like that for me. Even now, as I am approaching the end of my college career and preparing for the job market, the contacts I have to help me get a job are asking me to send a picture along with a resume. Now what exactly does that have to do with anything?

I guess this all sort of culminated to a head last nite. About 3 months ago I realized that no matter what, I was never going to be taken seriously in my chosen field, being politics. I could probably get a job working for someone, but running on my own is virtually impossible. I am a Beauty queen.. no one on the planet is going to take me serious when I say I have ideas on how the nation could afford universal health care without raising taxes or hurting the capitalists that run this country. Its frustrating to think that no one is ever really going to listen to what you have to say or think you actually deserved your place in the world. I understand that this is probably really ridiculous for me to complain about these things, but when someone you thought finally got how you feel goes and says something to the effect of "What do you do? You just walk from star to star" it makes you step back and take a breath.. then get the urge to scream. I guess its just going to have to be good enough that I know I deserve it and I know I do a hell of a lot more than walk from star to star... even if I do happen to do that particular feat very well....

Wednesday, February 27, 2008

Brer Rabbit and the Tar Baby

For anyone whose parents were lucky enough to score a copy of "Uncle Remus's Stories", before they were banned due to the excessive use of the word "Ni**er" , you have grown up seeing the world in a different light. My favorite Uncle Remus tale deals with Brer Rabbit and the Tar Baby. Brer Rabbit is lazy and obnoxious to his fellow forrest inhabitants "Brer Bear" and "Brer Fox" (cleaver names right?) But what perhaps makes him the most dispicable is his ability to outsmart Brer Bear and Brer Fox at every juncture in the road. The main jist of this story is all three charecters are digging a well in order to recieve..you guessed it! WATER! haha. Brer Rabbit decides hes to pretty to work that hard and wonders off to frolock, leaving the others to carry on his duties. (Obviously this is my own personal spin on the story, Uncle Remus would never think being TOO PRETTY was a good enough excuse, but I do... so here goes) Brer Bear and Brer Fox decide to get Brer Rabbit back and teach him a lesson for once and for all. They build some sort of contraption similar to a scarecrow and shape it to look like a baby. Then they cover it in Tar.. nice friends right?? Well Brer Rabbit is walking down the path and sees this creature whom he beleives to be a real person... Yea right... He stops and says something to the effect of "Good morning sir! Isnt the weather lovely today?" of course.. the tar baby says nothing... Then Brer Rabbit says "didnt your momma teach you its not polite to ignore someone when they talk to you?" again... no response. Brer Rabbit finally gets pissed off enough and threatens to "slug" the tar baby if he doesnt respond.. no response... so now Brer Rabbit's fist is stuck in the tar. OK.. heres where I have a problem with this story...He goes on to hit him again.. then kick him.. then head but him. This all continues untill Brer Rabbit has now gotten both his arms.. both his legs.. and his HEAD stuck in the Tar baby. Obviously this is not the Rabbit that outsmarted Elmer Fudd on Looney Tunes all those mornings.

This is where the story becomes an analogy in my mind. Like Brer Rabbit and the tar baby... you just keep going till you really get yourself in a mess you cant get out of.. he later gets thrown into the Briar patch.(Ouch). I feel like I am well educated and smarter than the average girl. BUT.. I get myself into these situations quite often.. more often than I will ever admit. Mostly with relationships. What is is about relationships? I mean you know your getting stuck.. and you still cant help yourself.. you cant control the urge to pull back and head-but the situation? Ok.. maybe this is a bad analogy but your getting my point. This logic doesnt stop at just realtionships, jobs, pets, family..ect. Why is it so hard for us to just walk away? To say "Thanks, I have had fun, given it my best go, but its not working out and if I stay here any longer Im going to have a head full of tar." WE CANNOT do this... its so hard to admit we have failed at something.. even if failing and bailing out early is WAY better than sticking around long enough to be pulling briars out of your tar covered skin.

Our society puts enormous amounts of pressure on us for EVERYTHING! To get married to, to go to law school, have a family... maybe this is why we keep kicking the tar baby? We dont want to start over again.. rebuild, repair.. most of all take the chance of getting hurt again.. or stuck in another tar baby. So we just keep trying, we keep wasting time on things that arent right for us, people that are not meant for us and a life that were not even sure we want. We just know thats what were supposed to want. MAYbE thats what lifes all about.. constantly getting into situations, then figuring out something from them, and trying really hard not to get stuck in the same tar baby again. Im not really sure how to go about changing this about myself of conditioning my mind to reject these obsedities... but I am sure that Im going to get some paint thinner, try to remove the tar, and keep going... im keeping the paint thinner handy though...