Great Quote to Think About

For all of the bloggers, including myself, out there, this is a great quote to keep in mind (I read this quote in the letter to shareholders written by Jamie Dimon, President of JP Morgan, one of the few strong financial companies left because of how they did business):

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of the deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” - Theodore Roosevelt

Regardless of where I disagree with our government and where I think they could have done better; I am proud to see that they acted. Upon getting more and more bad news (often times worse than the news from the day before) every single day they acted to help solve the problem and perhaps get ahead of it. Hind sight is 20-20 and mistakes were made, but I don't think anyone can say that our Government didn't try the best solution they had on hand at that time.

On a different point, to go along with the above post, I am going to try with this blog to look at each issue from all perspectives by putting myself in the shoes of those making decisions and acting, to see what I might have thought or done had I been the one in position. I am also going to be doing more myself. I write my representatives, I complain and whine to those who'll listen, but I don't stand up and do something about those things I believe strongly in. I hope to post soon about how I have changed that.

The Problem with Government Loans

So this is just conjecture at this point, but it will be interesting to see if anyone has already seen studies on it, or when there will be studies on it, whether or not they show I'm right.

I was reading the news today and noticed that data is showing that all types of consumer loans are increasing in defaults. I was thinking about that in comparison with the unemployment rate and then remembered that retail sales have been increasing since the start of this year. People are beginning to buy things again.

Part of those sales are coming because people are finally back in the stores buying necessities that they have been going without. Part of the buying is because people have been saving more and more since October of last year (mostly the wealthy, who, coincidentally have actually seen pay increases over the last year). Those who were saving their money were really hoarding it until things seemed to have bottomed out, so until today, I thought that the retail sales were due solely to this spending. Now I have a different thought as to why some of that spending is there.

Our government seems to be coming out with a multi-billion dollar program every week that is designed to give free money (grants in most cases not loans) to people who have been struggling or will be struggling over the next year. Most have just been outraged about the struggling home owner help, but there has been quite a bit more than that going on.

So here's my theory: Those who have been struggling to make their payments, but have been making them by foregoing a lot of normal everyda purchases, are now going out and buying those things and defaulting on their payments because they know they will get bailed out on at least partially on one of those payments.

I think this might be the case because you have to be defaulting on payments in order to get aid, and until now many have just been struggling through barely getting enough to exist while still making their payments. I have to admit, with the way the government is spinning this ("it's the big bad bankers fault not yours, just take this money and we'll make it all better.") it certainly does have a small appeal to just stop making my mortgage payment for a few months, or stop making my car payment so that I can get some "free" government money.

Of course the catch with doing that is a destruction of personal integrity along with credit score. Short term gain with a long-term problem. Why is it that our government seems to be going to extremes to give us this short-term gain while building up the greater likelihood of major problems in the future?