Velveeta Democracy

The End.

2008-11-05T12:40:00.001-05:00

This is the best way I ever could have imagined ending this blog: meet the new First Family of the United States of America.

Reflection on My Blog and the Election

2008-11-04T14:15:00.001-05:00

I believe I have reflected on this blog project in my self-analysis post, however there are a few other areas of relevance I would like to expand on via this post. I thought the idea of a blog project was novel, because I've never been asked to do a project even resembling this, although I knew it would be frustrating because I would, in part, have to depend on my fellow classmates in order to be successful. Now, this is nothing personal, because I DO love my fellow classmates, but there's nothing more in life that I hate than having to rely on other people, which is what, in a way, this project has involved. While I have learned an immense amount on my subject, as well as the various other topics that members of my English class have chosen to blog about, I'd rather write an essay any day!

And while there is no doubt in my mind that the internet is a powerful tool, capable of reaching the multitudes of people across the globe, I'd much prefer to blog about fashion or music than politics. I feel like, had I felt more passionate about my topic, I could have had a much more interesting and successful blog. So while I AM very excited about the prospects of blogging, because it is truly exciting to see people commenting on your entries, there is no way I will blog on a topic like this again.

Now, on to the election! IF YOU HAVE NOT ALREADY VOTED, PLEASE GO OUT AND DO SO! While in my ideal world everyone would vote for Obama, I would honestly be just as pleased if people just go out and vote. Period. Make your voice count! This is undoubtedly the most exiting election this country has seen in a good many years, and regardless of who wins (fingers crossed for Barack!) this has been an immensely historical election. I've saved my "I Voted" sticker and will keep it for the rest of my life, and show my children/grandchildren when they read about November 4, 2008 in school decades from now!

Extended Links Posting

2008-11-03T17:49:00.005-05:00

While I do occasionally post links from blogs, but only those I deem to be reputable, I get most of my links from the 'normal', 'everyday' websites. These include, but are not limited to, the following:

The New York Times

The Washington Times

CNN

BBC

The Washington Post

The LA Times

MSN

While I would like to be able to provide an 'extended' reading list for my followers, the places I acquired most of my information are from well known sites such as the ones listed above. All of these websites offer factual and up-to-date reports on the current housing market crisis and what is being done to fix it. For more opinionated readings, I would recommend reading blogs; some blogs that I recommend are on my blogroll, located on the right-hand side of this page towards the bottom.

Corrente Wire This blog has postings from 8 bloggers, men and women from around the country, and it uses humor to address a plethora of political/economical issues, including the housing crisis and what various politicians in Washington plan to do about it. I like this site a lot because there are always several posts a day, it is entertaining, and it looks at a wide range of topics.

What I've Learned Through this Blog

2008-11-03T16:18:00.003-05:00

The whole purpose of entering college and doing school projects, such as this blog that was required for an English class, is to grow as a person both creatively and mentally. Therefore, the point of this project was not to do it for a grade, although on the surface that would indeed be the reason behind it; we, the students, should have both learned and expanded our minds as a direct result of this blog project.

So, what have I learned? How has my understanding of the issue grown and evolved? How has my new knowledge shaped my understanding of the subject? How has my opinion on said subject evolved? These are some of the questions I asked myself so I could fully consider how this blog has affected myself and my thinking.

In choosing my topic, the way the bailout money is to be spent to fix the housing crisis, I have most definitely acquired a new wealth of information with every post I've made. However, despite simply absorbing facts I've read, my perception on the issue has changed: I'm now much more aware of how complex the problem is, and how interconnected my problem is to other fields, such the as political and global aspects involved. Not only does this problem cross the perspectives of politics and economics, but of time (as politicians are looking into the past, plans like the HOLC, to try and find solutions that can be applicable for today's crisis). I'm now much more aware of how the issue of the mortgage meltdown is an absolutely crucial issue that needs to be solved, because it affects both the United States' economy via the Stock Market, which in turn affects other world economies and other world markets, which in turn come back and affect the US. The world's economies and markets are very much like a food web, where one imbalance can easily throw off all other aspects, as they are all interconnected and interdependent on one another.

The thing that most surprised me, pleasantly nonetheless, is how through blogging on this issue I've gleaned a bit of hope; although the situation that the United States is in is indeed bleak, lawmakers and politicians are doing everything in their power to fix the housing crisis. I have gone from not being knowledgeable and automatically having negative connotations about the bailout to feelings of optimism, learning that fixing the housing market will in turn help the Stock Market rebound and provide a better buffer for the ever roughening economy. And while sides may hold differing viewpoints on how to go about finding a viable solution, all can agree on the important points that 1) the homeowners need a quick, yet reasonable, solution and 2) fixing the housing market is one of the most crucial steps to helping the United States rebound out of its current situation.

This About Sums it up..

2008-10-28T16:02:00.000-04:00

"We just let things get completely out of hand," he said of his own party's rule in the past eight years. Spending, the conduct of the war in Iraq for years, growth in the size of government, larger than any time since the Great Society, laying a $10 trillion debt on future generations of America, owing $500 billion to China, obviously, failure to both enforce and modernize the [financial] regulatory agencies that were designed for the 1930s and certainly not for the 21st century, failure to address the issue of climate change seriously."

- John McCain on George W. Bush's presidency, in a new interview with The Washington Times

Class Links

2008-10-23T23:57:00.003-04:00

Three classmates' blogs that I highly recommend, and will no doubt follow more closely from this point onwards:

Crime and Punishment

This blog provides a multi-faceted look at the criminal justice system, who exactly inhabits it, and the various problems and solutions posed by this system. The author ponders the question of rehabilitation, including when, why, and if it could be beneficial in helping reform criminals and returning them to society as productive, and most importantly, non-threatening individuals. She gives extremely fascinating details on the lives these incarcerated people lead, the chances of success they have once they leave their confinement and the various views of the two Presidential candidates on the matter of criminal rehabilitation.

A Shot in the Dark

I like this blog because it presents an issue that has been lost in all the turmoil of the economy and the Presidential election. Usually the issue of gun control, and the various interpretations of the 2nd Amendment, are more publicized areas of the election, as views on this controversial subject has often gone hand-in-hand with defining one's stance as a Republican (pro-right to bear arms) or Democrat (traditionally against the right to bear arms). There are also some interesting articles brought up, such as one that links gun control to ideas of women's rights, and how the two are interconnected.

The Iraq War

This is a blog that I most definitely recommend reading, although I am slightly biased in saying so because I agree on many of the things the author has to say. The point of this blog is to bring the War in Iraq back into the light, as the subject, which has in no way lost any importance or significance in my eyes, has slowly drifted into the background as thoughts of the economy, the housing crisis and the Presidential race have moved to the forefront. This blog exposes the miss-steps, fumbles and straight up lies of the Bush Administration as well as the fact that we have been told, for far too long, that our troops would be brought home, but with little to no follow through in the matter.

How College Students Will be Affected by the Housing Crisis

2008-10-23T23:26:00.002-04:00

So earlier in class someone brought up a very good point when they inquired as to how they might be affected. Not in a global or economic sense, but in a personal sense.

The credit crisis, brought on by the failing housing market, has made it harder for families to borrow money for student loans. This has not been too much of a problem this semester, but only because students, so far, have managed to find alternatives and their finances were in order months ago, before the credit crisis and the economy took a turn for the worst.

Many families, which are barely scraping by while managing to put their child[ren] through school, are now being faced the possibilities of layovers, which would make putting their kids through school, without the help of student loans, nearly impossible. Federal loan volume has already increased nearly 10% from last year, and if this trend continues state agencies, that provide loans to college students, will begin to run out.

We must, as students and as citizens, face the reality that with so much of the United States' money going to things like the War in Iraq and the newly passed Bailout Plan, little money will be left for things like education.

If You Play with Fire, You Will Get Burned..

2008-10-23T22:45:00.002-04:00

So what are the implications of all of this? What will be the end result if the housing crisis doesn't find a resolution?

The problems can be felt on both a macro and micro scale. The housing market, which is connected to consumer confidence, which is connected to the performance of the Stock Market, and is in turn connected to European and Asian Markets. It isn't terribly far fetched to suggest the very real chance that, if this problem isn't nipped in the but, we might enter a worldwide recession.

Another implication of what might happen should this issue remain unsolved are the fact that millions of Americans will lose their homes; in the past two years more than a million homes have been lost to foreclosure, with another 1.5 million in the process of being foreclosed on. How many more homes will be lost if the government doesn't step in and intervene?

And no doubt there's a connection between the fall of the housing market, which has had a negative impact on the Stock Market, and the Stock Market conversely having a negative effect on many major companies. When the stock of said companies go down, the results are massive layoffs. Layoffs from companies ranging from GM and Chrysler to Wal-Mart. Thousands of people across the United States are being layed off, thus worsening their already poor off financial situations.

But What Does it All Mean?

2008-10-23T07:31:00.003-04:00

Because most Americans are being affected by the housing crisis, and even if they aren't individually the repercussions are being reverberated throughout the United States and Washington D.C. Despite leaders having differing ideas on the best course to take to solve, or at least alleviate, this problem, people from all approaches have the same basic goal in mind: to save the economy.

Given this issue, both McCain and Obama seem to agree on the basics of how to go about fixing the bleak situation of the current housing market: individually buying back the mortgages from homeowners, instead of buying them through the mortgage companies.

But what of the basis for the two candidates to come together? Their campaigns are at risk; this can be viewed as a 'trial period' for their Presidency, a sort of 'return to the store if broken, the warranty is still valid until November 4th' deal. More importantly, though, is the desperate urgency to save the US housing market, which has direct effects on Stock Market, which in turn affects other World Markets. It's not simply the housing market which is at stake, for global economies are tied so closely together that when the US suffers, or a part of the US, like the housing market, then it literally affects the entire world.

The Old Man and the Nationalized Banks

2008-10-14T12:03:00.003-04:00

$700 billion to buy back the homes of the unfortunate. Now, $250,000 goes to buy back the economy, being throw into the homes of money. Will the people suffer while the vaults grow fuller?

9 banks, once strong on their own, receive gifts from the Treasury. Sadly, this is the only way to get by nowadays. The days of giants standing unsupported are ended at long last. The results are felt immediately: the Stock Market rises an impressive 936 points. Consumer confidence is restored. Or is it?

This choice might come back to haunt us. But who's to know when we might know? If it all?

Analyze This

2008-10-08T17:12:00.006-04:00

Despite where your opinion lies regarding the bailout, and on all the points which are hard to come to a consensus on, I believe the American public can agree on one thing: out future, especially the future of our housing crisis, is currently looking grim.

The Bailout Plan was deemed a package necessary to boost the US economy that was, and still is, on the verge of collapse due to the housing bubble bursting, a squeeze on banks, utter chaos on Wall Street and a credit crunch. Both the Presidential candidates, Barack Obama and John McCain, were in favor of the bill passing; Senator Obama even spoke to the Senate before the bill was to be revisited for it's second vote. While he called the bailing out of Wall Street an "outrage," he still supported the bill, because he truly believes the "stability of our entire economy" is at risk.

McCain, who also was in favor of the bill passing, has a different strategy on how to solve the mortgage crisis: his American Homeowner Resurgence Plan. This plan would involve the direct purchasing of mortgages from distressed homeowners. The proposal would use $300 billion in funding (which would not require the approval of lenders), plus part of the $700 billion financial rescue plan approved last week. Were this plan to be initiated, Congress may have to raise the borrowing limit to make it work.

Obama seems to agree on some of the ideas in this plan, like giving the government the authority to purchase mortgages directly, instead of through mortgage-backed securities. This plan, as has been shown in the past, can allow for taxpayers to profit as the housing market recovers. This is crucial, Obama says, because the economy as a whole cannot "recover without the restoration of our housing sector," which includes a "rebound in the home values" of Americans.

Basically, what they're both calling for, and what Hillary Clinton had proposed before both McCain and Obama was a modern-day HOLC (Home Owners' Loan Corporation), which was designed during the financial collapse of 1933. The agency acted "to relieve the mortgage strain" by acquiring the defaulted residential mortgages and give its bonds in exchange, then refinance the mortgages on more favorable and more sustainable terms. The HOLC's investment was limited to 80%, or what today would be equivalent to a $270,000 home. It bought about a fifth of all mortgage loans nationwide (or about one million loans); today, a fifth of all mortgages would be about 10 million loans. In 1933, it owned almost 14 percent of the dollar value of outstanding mortgage loans; today, 14 percent of outstanding mortgage values would be about $1.3 trillion. While this may seem dismal and bleak, there is hope: when the HOLC closed its books in 1951, it had a surplus of $14 million.

So who to side with? Both candidates have put mortgage crisis on the top of their list of priorities, hand-in-hand with the seemingly derailed economy. There are some slight differences in the way they would use the bailout money to help the mortgage meltdown; Obama, initially, offered a plan that would include aggressive regulation of financial institutions, relief for home owners and a $30 billion economic stimulus package. After being criticized by McCain, who claimed it was a "multi-billion dollar bailout for big banks and speculators," Obama proposed spending $10 billion for government-backed mortgages for homeowners facing foreclosure. McCain's proposal would allow the federal government to pay borrowers and lenders in full, despite how fair the original transaction was; but doesn't that reward the kind of bad lending and borrowing practices that caused the housing crisis in the first place?

FIlling in the Blanks: Why the Bailout Passed the 2nd Time Around

2008-10-08T16:18:00.003-04:00

So, for those of you who were wondering why exactly the bailout passed the second time around, and who changed their minds, this post is for you!

When the proposed bailout failed, 133 Republicans voted against it and 95 Democrats voted against it, or, in other terms, 65 Republicans voted for it as did 140 Democrats. The way the votes shifted was from 65 Republicans pro-bailout to 91, and 140 Democrats in favor of the bill to 172. So, 26 Republicans switched their minds and 32 Democrats.

However, the bill did not necessarily pass because it was "fixed"; in fact there were several contributing factors as to why the bill passed. The first, and the one most widely experienced by American citizens, was the 778-point plunge in the Stock Market, felt after the bill was defeated. Secondly, the apparent swing in public opinion after the defeat (even I have to admit I thought its passing the first time around would be a sure thing, and when it didn't I wondered what other options we, as a country, really had). Also, the Senate added business tax breaks, mental health parity legislation, and increased federal insurance on bank deposits. Finally, much coercion and persuasion took place on the part of Republican and Democratic leaders to help coax members into passing the bill.

2nd Time's the Charm

2008-10-03T14:50:00.002-04:00

The $700 billion economic passed bailout today, Friday October 3, 2008, 263 votes to 171.

[More to follow later. Comments on this issue, despite the brevity of my post, are encouraged none the less.]

Here We Go Again

2008-10-03T12:45:00.005-04:00

The proposed bailout plan, which passed in the Senate yet was rejected by the Republicans in the House of Representatives, is going to be given a second shot. Today, Friday October 3rd, at least 17 House members said they had switched positions on the bailout, which might give the bill enough leeway to be passed. Some of the House members switched because of what Presidential hopeful Barack Obama said, promising that, if elected, his administration would use "authority in the bill to prevent foreclosures and stabilize the housing market."

The modified bailout package includes a plan that would allow Henry Paulson, Treasury Secretary, to buy up to $700 billion in bad mortgage-related securities, as well as other bad assets which are undermining credit markets worldwide. Along with this, the Treasury Department would be allowed to modify mortgage terms to help homeowners avoid foreclosure, restrict executice pay for companies aided by the bailout program.

And, if you're thinking to yourself that it sounds like the Treasury Department is going to have an awful lot of power, like I myself was, then you'll be pleased to hear there's an addition clause in the bill which requires the creation of an independent oversight board to oversee the Treasury Department program. However, I would be interested to know just how these boardmembers are chosen, and by whom.

I'm undecided about the bill, although I'm also aware that whether it passes or not (which, it eventually will) is not up to me, and all I can do is sit back and feel the effects, both the positive and the negative. The passing of this bill is crucial to the economy of the United States, as there have been reports of Barack Obama himself calling black lawmakers, asking them to switch their vote in favor of the bill.

Head of Skate [unrelated to the economy, yet humorous]

2008-10-03T12:43:00.000-04:00

See more funny videos and funny pictures at CollegeHumor.

Basic Logistics

2008-10-02T07:52:00.003-04:00

Over the next several weeks, directly pertaining to the ebbs and flows of the current election, I will be discussing the logistics of the mortgage crisis, the proposed (and, as of currently, failed bailout), the ramifications on society today and what damage we may have done to our posterity and their hopes of being raised in n economically smooth time.

Due to the deregulation of the housing market, and what directly followed (i.e. the low or nonexistent interest rates given to home owners allowing most anyone to buy a home, borrow money against said home, and then eventually find out that people could not sustain the payments on these loans) caused a downward spiral of foreclosures to occur throughout the United States. As homes were foreclosed, and mortgage companies like Fannie Mae and Freddie Mac were not paid back, thus began what is now known as the "mortgage meltdown" or "mortgage crisis", which finally came to an ugly head in Washington. Henry Paulson, Treasury Secretary under Bush's Administration, proposed a bailout of the institutions hurt by the bad mortgages and loss of investor confidence; the plan involved asking Congress for $700 billion to buy up mortgage-backed securities which had become impossible to sell or whose value had declined sharply. The plan was rejected in a 60%-40% vote by Congress on Monday September 29, 2008.

So, what is the next step in the mortgage crisis? Should the federal government bailout the private sector? It most certainly would not be the first time this has happened, as the US long has a history of abandoning its free-market ideology; Lockheed Aircraft and the Penn Central Railroad were assisted through federal money under President Nixon, Chrysler under the Carter administration and the US savings and loans system was salvaged in the late 1980s through federal money.

Why do we care so much, then, about this bailout? There are many reasons no doubt: who exactly is to blame, the fact that this is the costliest government bailout to date and that, as many people believe, had the mortgage companies looked at who they were selling houses to, this could have either been avoided or the crisis would have occurred in a much smaller scale.