DadTalk

Scenes From Immigration Rally

I brought my camera with me for a work-related project before realizing it was May Day, which means Immigration Rally.

Since 2007, I’ve watched the rallies directly from my place of work. In 2006, I was in Los Angeles. This and last year, the protesters passed in front of my office window.

Since working in the financial sector, I’ve heard a handful of derogatory and distasteful remarks about immigrants, especially Hispanics. But the rally was peaceful, at least, when it passed my vantage point on Jackson Boulevard.

I’ve included more photos on the jump.

A Tale of Two Americas: Dropouts vs. College Bound

The article you are about to read is nothing new. And that’s the problem.

A new report shows that less than 50 percent of students graduate from high school in 17 of America’s largest cities, reports The Associated Press via Education Week. As I said, no surprise, but troubling nonetheless.

Even nationally, only about 70 percent of high school students graduate on time with a regular diploma, reports AP. About 1.2 million teens nationwide drop out annually.

In some cities, the numbers are so bad, it’s difficult to comprehend:

High School Graduation Rates (percent)
24.9 || Detroit
30.5 || Indianapolis
34.1 || Cleveland

Although we live in a place called the United States of America, it is anything but. Consider that elite colleges are turning away over-qualified kids in droves, reports The New York Times.

‘Green Crack’ Is Drying Up Despite Fed’s Best Efforts

The addict rifles through the mail piling up on his kitchen counter.

Late electric bill.

Late gas bill.

A warning from his mortgage company.

“Crud. It’s gotta be here somewhere.”

Half of the pile falls, scattering on the floor.

“Sh---”

John bends over to pick up the pile. There, just under the cable bill – that one is always paid on time – is what John is looking for.

“Pay off all your bills!”

“Low your interest rates!”

“Consolidate debt!”

John shakes as he opens up the envelope. A rush of warm liquid power courses through his body. “You are approved for up to $8,000!”

“I swear, this is the last time I’ll ever borrow money,” John says quietly to the cat.

Meanwhile, deep in the recesses of America’s financial power, the Federal Reserve Board considers its next move to keep Green Crack flowing out to businesses and consumers.

The Credit Czar considers his recent efforts:

“Lower interest rates. Check.

“Make it easier for financial institutions to borrow. Check.”

“Let banks use worthless holdings as collateral to borrow money. Check.”

“Print more money. Check.”

Recalls Senate Passes Bill to Improve Toy Safety, But Will It Survive?

The U.S. Senate approved a plan this week to completely revamp product safety in the United States, reports The New York Times. The bill actually increases funding for the Consumer Product Safety Commission and increases its ability to fine and punish those who dump dangerous products on unsuspecting Americans and their children.

The bill also would allow state prosecutors to take action if the federal government fails to effectively protect consumers. And in the no-duh department, the bill also would create a product complaint database accessible to the public.

In fact, the bill is so superior to the one approved by the House, it would seem a no-brainer. And perhaps that explains why the bill is disliked by some Republicans and  a White House that seems intent on dismantling the CPSC once and for all.

Overheard

“Dad, that looks a mushroom that’s on fire.” – Seth looking at the cover of my Scientific American

“It is. It’s a, um, from an atomic explosion.”

“What’s that?”

“A really bad thing.”

I then launch into a limited explanation of what a nuclear bomb is.

Should Money-Troubled Americans Just Walk Away From Their Homes?

It’s a radical suggestion that financially troubled American’s should just walk away from their homes. But what if that very suggestion might resolve the housing crisis faster than suggested interventions? Would it be worth it?

Financial institutions and politicians want you to believe that the housing market is solvable. Why would they do that? Well, financial firms really have little choice: the more homes that are foreclosed or deserted, the more billions they have to write-down.

This is causing serious upheaval in the financial industry. Countrywide has been bought by Bank of America and Washington Mutual may soon be bought by JPMorgan.

Other firms are selling themselves piecemeal to foreign investors and countries. Merrill Lynch, which is hinting at another $15-billion write-down, is trying to raise $4 billion from Asia, the Middle East or American firms. Citigroup has already sold $7.5 billion of itself to the Abu Dhabi Investment Authority.

It’s easy to understand why politicians want you to believe they can fix the problem: they’re trying to get elected or cover their collective asses. Solutions range from cutting the Federal Reserve Board’s borrowing rate to federal government bailouts that would cost taxpayers more than $100 billion.

Both ideas are kind of dumb: Cutting the borrowing rate just throws fuel into the fire. Making credit cheaper will just prolong the entire fiasco by encouraging lenders to repeat their mistakes. Worse, subsequent rising inflation will push the U.S. dollar ever lower, eventually making it a junk currency.

Government bailouts are even more ridiculous because we, the taxpayer, will someday pay. Consider what happens in a bailout: the federal government takes money out of its already overextended budget to help a homeowner keep his home. Because the government has to borrow money for this bailout, the U.S. immediately starts racking up interest charges. Someday, taxpayers MUST foot this bill.

Popular Children’s Health Care Insurance Is Extended

Every now and then, politicians do the right thing. I know, I know, it’s hard to believe, but it does happen.

In this case, President Bush signed legislation that extends federally-funded children’s health care, reports The Associated Press. This follows two vetoes of Democrat-authored plans that would have expanded the original program.

The version Bush signed provides states enough money to cover existing programs through March 2009 when a new Congress and president will be in place.

It’s a relief to see children’s needs finally put ahead of party bickering and partisanship. Perhaps a better plan can be worked out next year.

Previously

• Bush Vetoes Second Bill That Would Hike Child Health Care
• 10 Million Unhappy Kids
• Health Care Debate on Children Continues

Bush Vetoes Second Bill That Would Hike Child Health Care

President Bush vetoed a second bill that would have increased federal funding for a state-run health insurance program that benefits children, reports CNN. The veto was virtually assured because the bill so closely resembled the original he vetoed in November.

While I don’t agree with the president on this, I think the Democrats were somewhat disingenuous pushing an identical bill through the House and Senate. I find it distasteful when children are used as political footballs on either side of the fence.

The two best choices Democrats had was to either find enough common ground with Republicans to override Bush or extend the expired bill until after the 2008 elections when the need for compromise is likely to change.

A vote to discuss overriding the veto is tentatively scheduled for January 23.

Housing Bubble Defined: Greed

Greed is supposed to be an ugly word. In the United States, though, it’s often considered a virtue.

But there is little doubt that it was greed that created America’s housing mess. There is plenty of blame to go around, but a case can be made that Wall Street firms hungry for high-return mortgage securities was the demand that generated the supply. Or you could argue that this mess was created by Americans who demanded a lifestyle they couldn’t afford. Perhaps it was both.

Let’s start with Wall Street, which was hungry for high-yield profits needed to reward unrealistically greedy investors. To see how this self-fulfilling greed system worked, read deep into this New York Times story and you discover that Wall Street was falling over itself to buy subprime mortgages.

By 2005 and 2006, financial institutions wanted these crappy securities so bad that it’s no wonder subprime lenders were throwing money at any Joe who walked in off the street. To heck with credit ratings or income levels!

But as early as 2006, risk managers at some of these financial institutions smelled rotten fish. While most couldn’t stop their organizations from buying questionable securities, they instead hedged against them. That’s why Goldman Sachs came out mostly ahead rather than down when its securities started to fail.

Does Housing Bailout Plan Help All the Wrong Americans?

Whenever I read a story that makes my blood boil, I delay writing about it. Why? Because I like to offer calm, thought-out analysis on this site.

Sometimes, I make an exception. The subprime bailout plans really piss me off and here’s why: it’s a waste of time and energy and is morally dishonest to the vast majority of Americans who have handled their finances responsibly.

For those who haven’t been following, Treasury Secretary Henry Paulson is trying to delay and dampen a coming economic recession by offering a variety of bailouts to lenders and Americans who hold subprime mortgages, reports Bloomberg. U.S. officials are still denying that recession is around the corner, while at the same time working bailout deal after bailout.

One plan would delay mortgage resets for a still debated number of years. Supposedly only good borrowers would be given the gift of time. Flippers and liars would not get the extension. I’ll believe that when I see it.

A better guess is those that are best at gaming the system will finagle extensions. Those who were duped via fraud are the ones likely to lose their homes. Read this story in The Seattle Times about how the elderly may be the biggest victims of the subprime crime wave.