MATTHEWGOODONLINE

The reaction that I have received about the site has been overwhelming. I’ll tell you what, I will make sure that commenting on the new site is still a feature. I’ll find a way, no worries. The last thing in the world that I would ever do is ask anyone to pay to read what I write, and while I’m flattered that some have suggested that as a solution, it’s not something that I would ever contemplate. No one should have to pay for access to information, to be a part of a broader discussion regarding what is transpiring in the world, their country, or their community. So I’ll find a way to make it happen.

Anyway, Roy sent me this video yesterday which is worth a look. While economic analyst Max Keiser is a little over the top at the beginning of the interview, make sure to watch all of it, as what he has to say is extremely important.

Congress will vote tomorrow whether to back a Senate revision to the proposed $700 billion dollar economic bailout package. The President, as always, continues to play the fear card, claiming that it is an issue that goes beyond Wall Street and that the House Of Representatives has a responsibility to average Americans to support the deal and thus instill a sense of stability. Of course, the House’s rejection of the initial bailout plan was very much aligned with public sentiment, something that the White House continues to overlook.

In today’s Guardian, historian Howard Zinn provides commentary with regards to the crisis which is noteworthy…

“This current financial crisis is a major way-station on the way to the collapse of the American empire. The first important sign was 9/11, with the most heavily-armed nation in the world shown to be vulnerable to a handful of hijackers.

And now, another sign: both major parties rushing to get an agreement to spend $700bn of taxpayers’ money to pour down the drain of huge financial institutions which are notable for two characteristics: incompetence and greed.

There is a much better solution to the current financial crisis. But it requires discarding what has been conventional “wisdom” for too long: that government intervention in the economy (”big government”) must be avoided like the plague, because the “free market” will guide the economy towards growth and justice.

Let’s face a historical truth: we have never had a “free market”, we have always had government intervention in the economy, and indeed that intervention has been welcomed by the captains of finance and industry. They had no quarrel with “big government” when it served their needs.

It started way back, when the founding fathers met in Philadelphia in 1787 to draft the constitution. The first big bail-out was the decision of the new government to redeem for full value the almost worthless bonds held by speculators. And this role of big government, supporting the interests of the business classes, continued all through the nation’s history.

The rationale for taking $700bn from the taxpayers to subsidise huge financial institutions is that somehow that wealth will trickle down to the people who need it. This has never worked.

The alternative is simple and powerful. Take that huge sum of money and give it directly to the people who need it. Let the government declare a moratorium on foreclosures and give aid to homeowners to help them pay off their mortgages. Create a federal jobs programme to guarantee work to people who want and need jobs and for whom “the free market” has not come through.

We have a historic and successful precedent. Roosevelt’s New Deal put millions of people to work, rebuilding the nation’s infrastructure, and, defying the cries of “socialism”, established social security. That can be carried further, with “health security” – free health care – for all.

All that will take more than $700bn. But the money is there. In the $600bn for the military budget, once we decide we will no longer be a war-making nation. And in the swollen bank accounts of the super-rich, by taxing vigorously both their income and their wealth.

When the cry goes up, whether from Republicans or Democrats, that this must not be done because it is “big government”, the citizenry should just laugh. And then agitate and organise on behalf of what the Declaration of Independence promised: that it is the responsibility of government to ensure the equal right of all to “life, liberty, and the pursuit of happiness”.

Only such a bold approach can save the nation – not as an empire, but as a democracy.”

The Prime Minister is asking that the upcoming debate’s full hour be devoted to the economy, obviously in response to the current crisis in the United States. The NDP is supporting the amendment.

Something that should not escape anyone is the ability to use what is currently transpiring as a tool of political fear. President Bush attempted to cast the crisis in just such a light prior to Congress voting down the proposed bailout package, and he continues to do so. Of course, lost in his rhetoric, and that of many others, is the culpability of those responsible versus those that will ultimately be made to flip the bill – the people.

The United States is our foremost trading partner. But we are not alone in feeling the repercussions, and thus the fear produced, by what is currently transpiring. Markets around the world have been negatively affected by the wanton actions of financial institutions in a single country, and that is something that should not be overlooked. As has been the case for decades, the world’s foremost commodity markets are subject to the strength of the US dollar, and therefore the US economy itself.

One crucial example of US economic dominance is that of the oil market, which is universally represented in US dollars. Not one major oil bourse on the planet exists that trades oil in another currency. Were, for example, Iranian proposals to create an independent bourse controlled by the Euro ever to become a reality the repercussions on the US economy would be devastating – and make no mistake, that is a very real factor with regards to US disdain for Iran, even though it is little reported.

While the people of the United States are facing a crisis in which they may very well end up paying for the wanton greed of Wall Street’s elite, they won’t be the only ones that will be made to bleed for it - average citizens the world over will be there right along side of them simply because of the economic stranglehold that the United States has on the world. And while foreigners might not feel the affects as harshly, the reality remains that what is transpiring right now in the United States is not simply an American problem, but one that will be felt by people the world over.

Here at home, rather than a national debate taking place in which a variety of important issues are addressed, Canadians may very well be treated to an entire hour dedicated to addressing a financial crisis spawned in a foreign country, and all of the political fear mongering that such a crisis makes possible.

We’ll see.

From the BBC…

“The lower house of the US Congress has voted down a $700bn (£380bn) plan aimed at bailing out Wall Street.

The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.

About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.

Shares on Wall Street plunged within seconds of the announcement, after earlier falls on global markets.

A White House spokesman said that President George W Bush was “very disappointed” by the result.

He would meet members of his team in the coming days to “determine next steps”, spokesman Tony Fratto said.

The vote followed a day of turmoil in the financial sector.”

[…]

“So grave are the consequences of this decision, reports the BBC’s Kevin Connolly from Washington, that the speaker of the house paused for several long minutes after the vote was taken before declaring it official.
The no vote plunged the world of Washington politics into turmoil and the markets into deep and instant chaos with rapid falls on Wall Street, our correspondent says.”

A comment left by a reader from Baltimore summed it up…

“I am glad the bailout bill failed. I work five days a week, save cash and pay my bills. I did not want to pay for Corporate America’s greed”.

Global Impact

» Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities.

» Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival.

» The UK government announced it was nationalising the Bradford & Bingley bank.

» Global shares fell sharply - France’s key index lost 5%, Germany’s main market dropped 4% while US shares plunged after the vote result was announced.

Update

I’m not one to happily use Lou Dobbs to demonstrate a point, but in this instance it’s pretty relevant (tip: satchboogieca)….

Congresswoman Marcy Kaptur of Ohio’s 9th District lays it out on the floor of the House in plain English…

And, for kicks, a video that you probably don’t want to see. Just a hunch, but I don’t think God wants to see it either.

Norman Solomon adds devastating perspective to the realities of “too big to fail and too small to matter”…

“These times provide a crash course on the corporate state:

If a company like AIG is too big to fail, the government will rescue it. Mere people — too small to matter — are expendable.

The insurance industry is too big to fail. A person’s health is too small to matter, so — when it fails due to the absence or loopholes of insurance coverage — that’s tough luck.

The Defense Department is too big to fail. The people it’s killing in Iraq and Afghanistan are too small to matter.

The U.S. nuclear arsenal is too big to fail. The Nuclear Non-Proliferation Treaty, undermined by Washington, is too small to matter.

Overall, the warfare state is too big to fail. The virtues of peace are too small to matter.

Agribusiness is too big to fail. Family farmers are too dirt-small to matter.

The leverage for the U.S. Treasury to subsidize Wall Street is too big to fail. The leverage to subsidize mothers and children kicked off welfare is too small to matter.

The political momentum for bailing out corporate America is too big to fail. The political momentum for funding adequate payment rates from Medicaid to reimburse healthcare providers is too small to matter.

The oil conglomerates are too big to fail. Global warming is too small to matter.

The prison industry is too big to fail. The need for preschool is too small to matter.

Corporate power is too big to fail. The ordeals of working people and want-to-be-working people are too small to matter.

Human worth as maximized by dollars: too big to fail. Human worth as affirmed by humanistic values: too small to matter.”

I’m going to do my damndest to sleep in tomorrow morning, so I thought I would post a few articles of interest for those of you in other time zones that will be up well ahead of me.

First, an article by the Boston Globe’s Joan Vennochi which includes an opening that could have been penned by Bruce Springsteen…

“When you are too big to fail, you are bailed out.

When you are too small to save, you are down and out on the street.”

The second article, entitled Why does the US think it can win in Afghanistan?, is by The Independent’s Robert Fisk. Fisk is easily one of the most educated journalists in the world when it comes to Middle Eastern affairs, having been The Independent’s foreign correspondent in that region (based in Lebanon) for more than 30 years. If you haven’t read it, I highly recommend his masterpiece - The Great War for Civilisation: The Conquest of the Middle East.

Nighty-night.

On the flight home today I got my hands on a copy of yesterday’s Guardian and wanted to bring attention to an article by Larry Elliott about the ongoing economic crisis that I thought incredibly well written…

“This was the week the world changed. It started with the US authorities trying to rescue Lehman. It ended with the US taxpayer preparing to pick up the tab for the mistakes of Wall Street’s elite.

It started with the prime minister sipping cocktails with financiers in Canary Wharf. It ended with the government slapping a ban on short-selling and Gordon Brown pledging to clean up the City. Britain’s biggest lender was rescued, and the Chinese government lined up to take a 49% stake in Morgan Stanley, one of the last US investment banks left after a week of carnage.

Ben Bernanke, chairman of the Federal Reserve, and Hank Paulson, the Goldman Sachs tycoon who became US treasury secretary, have done more for socialism in the past seven days than anybody since Marx and Engels.

Over and above the extraordinary individual events, there was the capitulation of the prevailing economic model. History will show that the great postwar experiment with financial deregulation lasted from the first oil shock in 1973 to the third oil shock in 2008.

Between those years the constraints on capital imposed after the Great Depression were whittled away, leaving a world of easy credit, complex financial instruments, stratospheric salaries and supine regulators.

Like a spoiled child, what big finance wanted, big finance got.”

For Those That Were Wondering

For those wondering what I was doing in Toronto this weekend, I was playing a private show on Toronto Island. The weather was nice, it was a good time.

It’s a beautiful day here in the GGTA.

The following will have little to do with the subjects I usually post about, those being the CF and Afghanistan. Given recent international market volatility, and some troubling comments I saw in other posts related to economics, I asked Matt if I could provide some advice on financial security.

No other author or contributor is affiliated with the information I am about to provide and I will not benefit financially in anyway from any product or company for offering it.

Rare are the times that I express my opinion, but I truly do believe maybe some in the community may take value from what I am about to write. I have no doubt that the majority will challenge and dismiss my advice.

That’s quite alright. History will be kind to me, as I intend to write it.

I know that money cannot buy happiness. I also know that it can cause a lot of unhappiness.

I also know that money, when managed properly, can also remove some of the things that cause unhappiness. That is worry and stress.

I believe that it is the greed of money that is the route of all evil, not money itself.

It is greed that caused the problems we see in the markets today, as it always has been.

Greed on behalf of the lender, and greed on behalf of the borrower.

How did the troubles in the States occur? Who is to blame?

The poor? The wealthy? The government? Bad luck? The war? Natural disasters? Republicans? Democrats?

Yes.

However, most recently the N.I.N.J.A sums up the majority of the guilty parties.

What is the N.I.N.J.A.?

No income, no job: Approved!

The sub-prime mortgage lending crisis is the domino effect of very greedy, very lackadaisical, and very bad lending habits. A culture of credit if you will.

So how does lending someone the future value of their house in a mortgage at a very low interest rate cause such a mess?

I can go into detail but very simply put, if I owe the bank $100 and can’t pay it, I have a problem.

If I owe the bank $100,000 and can’t pay it, the bank has a problem.

Wash, rinse, repeat.

There are 4 billion credit card offers a year to Americans. The average American household has $9000 in credit card debt and will pay more than $1,300 a year in interest alone.

Only the greed of wanting more and more and more, and the willingness to lend so as to have more, more and more, in the richest nation on the planet could cause such havoc as we are only seeing the tip of the ice berg in recent months.

A large majority of the American people, and a series of its leaders and their administrations, and their addiction to credit and the fostering of a culture of borrowing and only paying the minimum and immediate gratification will have even the best intended governments with the most forward financially savvy thinking minds in trouble for decades to come.

Carter had warned of it. The reliance on credit, and yet every president afterwards saw fit to borrow more and more and more.

the financial industry’s influence over the President and Congress. When you are the largest contributor to a President’s re-election campaign, you can not only write laws but you can eliminate one of the oldest federal rights: bankruptcy. The industry gets whatever it wants. The result? Traditional protections disappear. The rich get richer and the poor get poorer. The situation becomes even more absurd as George W. Bush implores Congress not to leave Iraqis with debt at the same time National Guardsmen are forced to declare bankruptcy in Baghdad and the average American household’s share of the national debt rockets to nearly $90,000.

- From the Film Maxed Out

While the author of the site writes tongue in cheek that salvation lies in moving to Europe and living off the land, their is a great deal of truth to this logic.

It may be the army in me, but I’m not quite so ready to throw in the towel, at least where my own security is concerned.

Canada’s lending habits are not as bad as the States, (you practically have to give a pint of blood to the bank to get a mortgage!), and there is less self regulation on Canada’s financial institutions as there is the States, but it would be very arrogant of me to say that there isn’t a growing culture of instant gratification in this country as well.

As Dave Chilton of the Wealthy Barber wrote, successful financial planning is easy, and is mostly just common sense.

In the next few posts I will share some very simple and very successful techniques that will not necessarily bring you happiness, but hopefully remove some of the unhappiness associated with worrying about financial security.

I will provide my credentials at the end of this post.

So here it is, on matthewgood.org, the beginning of the end of all your financial problems.

It starts with a few questions, and only one of them and all of them have anything to do with your finances.

It is success by the inch that is a cinch, and by the yard that is hard.

Ask yourself these questions, write them down, and write down your answers and keep them somewhere safe. Feel free to share in the comments, I promise I won’t tell anyone.

1. If we were to meet 3-5 years from now, Sept 19th 2011-2013, and reflect on the past to this date today, what events would have had to have transpired for you to concede that the previous 3-5 years had been successful and productive?

8. Summarize your investment philosophy in 10-30 words?

The last question is the only one I will respond to.

If you cannot explain, your philosophy on your financial future in 10-30 words, or thought about answers satisfying you to the other questions, how can the people and institutions managing your money get you to your desired end state?

Here are my credentials:

I have 75% of my income if I live to long die to young, or become disabled or critically ill along the way.

24 words.

I am not independently wealthy, I am not expecting a large inheritance and I am notorious for spending large amounts of disposable income on things I do not need.

Now here’s what my credentials costs me:

A nickel of every after tax dollar I make goes to investments, and a nickel of every after tax dollar I make goes to insurance.

67 Cents of every after tax dollar I make goes to living expenses (home, food, car etc).

10 cents of every after tax dollar I make goes towards liquidity - that is cash available in the event of an emergency or opportunity.

13 cents of every dollar I make goes towards luxury.

Now what I make and what I pay is irrelevant to you and quite frankly, none of your business.

But if it’s good enough for me, is it good enough for you?

If you find any value in any of this, stay tuned for part 2: The Plan.

*Remember the bumblebee.

While I may not agree with him on most social issues, nor am I an advocate of the Libertarian movement (I consider it a convenient and thinly veiled excuse for selfishness), I do wholeheartedly agree that Dr. Ron Paul is the ONLY politician in the United States Government who understands the true nature of our economy and what we are facing. He was also the ONLY politician who could have perhaps gotten us out of this epic and overwhelming morass… (although, odds are he would have taken a 7.62 round to the temple had he tried, as the world banking conglomerate dictates and controls pretty much everything down to what you had for breakfast this morning, but I digress…)

Regardless of who wins the presidential election, Dr. Paul should be consulted on how to fix our economy… Dr. Paul was loudly derided by those in his own Republican party, who chose to laugh at him instead of listen to him… while the Democrats saw little use in bringing the ideas of the “enemy” into the fold…

Understand that what has transpired the past few days is nothing compared to what is coming down the pike… A few band-aids on a mortally wounded patient won’t heal it or save its life… the best we can hope for is that it will slow the warm arterial spray and buy some time… time in which the problem will get worse… and worse…

Think of it as a coiled spring, a boiling pot… the harder you push down the more violent the eventual explosion…

You can’t put a fire out with gasoline… and you cannot print yourself out of debt…

I invite you to watch the video on the link below…

Dr. Paul tells it like it is…