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Friday, October 10, 2008

Watching the Meltdown from Glasgow

One thing none of the talking heads on television is talking about during this economic meltdown is the matter of how this stock market crash is going to affect us here in Glasgow. As the chief purveyor of the television signals that carry these talking heads, we thought we should correct this oversight. So, here goes.

First, before you read another word, you should know that the writer is not an economics expert. Rather, the author is simply a local person with some opinions on the subject and access to the internet such that my opinions can easily be plastered across this page. If you are reading this expecting more than that, please look elsewhere.

However, no one can dispute that this present crisis is rooted in the bursting of a very large bubble of inflated housing prices. But since housing prices have never been terribly inflated here locally, Glasgow really didn’t participate in that part of the crisis. The bursting of the bubble lead to widespread losses in many large financial institutions, but Glasgow does not house any of those so, once again, not a big deal here. It is true that many of us helped inflate that bubble by financing our own homes with “secondary market” mortgages. We did that for the reason that so many of us do so many things . . . they were cheaper. But even though many locals have mortgages, my family included, that may indeed be lost somewhere in this financial morass, so long as we keep making our payments there should not be a big impact on Glasgow.

Of course many local folks own stock through mutual funds, 401K’s, and other investment and retirement plans, and the value of those investments is presently in free-fall. It is certain that some local retirees are living off of the income generated by those investments and they will certainly see their incomes decrease. Other locals that have investment accounts targeted at future retirement may be looking at working longer than they had anticipated, but that should not force any locals to look for a tall building to jump off of. Those of us in that age bracket could not make it to the top of one anyway. Local investment advisors are not winning any popularity contests of late, but, their income should be quite secure because most of them get paid when we buy or sell stock, it is our problem if we lost money on the transaction generally, not theirs.

There could be dramatic impacts on Glasgow if this “crisis of confidence” results in the collapse of the automotive industry and a general resistance to folks shopping and spending. Many locals work in factories and industries and dealerships that depend upon the sale of trucks and cars and everyone with a job depends on someone being willing to purchase the products that person’s business sells. If there is anything that we really should be worried about right here in Glasgow that might be it. There is no quick fix to that, but, long term, we should be electing folks that recognize our long-term need to promote localism and growing our economy from within instead of putting all of our hope in the attraction of another outside industry. Generally however, that is a national issue that we must rely on strong national leadership to solve. This is why we should be very afraid and ready to demand more.

WARNING - POLITICAL OPINIONS COMING. For many years now we have elected leaders who employed the philosophy that government’s job is to help businesses pursue profits, and that business, in turn, should (and would) distribute that wealth among the rest of us. In the 1980's President Reagan espoused this philosophy when he said, in his first inaugural address, “Government is not the solution to our problem, government is the problem.” That truism continued to echo through the Newt Gingrich revolution of the mid-90's and it can even be witnessed today from presidential debates all the way to the uber popular Glasgow Forum on Topix.com. The only problem with the philosophy is that Wall Street is now proving what we all should have learned in American History class, that Reagan had it dead wrong. In fact, the demonization of government is now having results that none of the proponents, from Reagan to Gingrich and their descendants, ever intended. It turns out that a town without a Sheriff is not a pleasant place to live. What a pity we did not learn that from the warnings issued by Hamilton in the Federalist Papers or from the experience of our parents who lived through the Great Depression! While we certainly cannot fix any of that from our position here in Glasgow, we, along with the residents of ten thousand other cities like Glasgow across the United States can certainly fix it, and we must.

Our decades-long love affair with dismantling our federal government is at the very core of the problems facing our economy today. We crashed our ship upon the rocks while we listened to the siren song of “returning power to the people,” but it turns out that dismantling regulatory agencies by slashing their budgets and appointing clueless leadership, did not return power to us at all, instead, it turned power over to the great rival of national government, the large corporations and the business community. Now we can see that getting government off the back of business simply means putting business on the back of government, and, in turn, on my back and your back right here in Glasgow.

This is not a Republican or a Democrat issue, it is about greed from both sides of the political aisle, the sort of greed that can be carried out while we regular citizens are busy trying to make a living and raise our children. What we need today are leaders like the Roosevelts, both the Republican, Theodore, and the Democrat, Franklin. Both of them saw the national government, not as a menace to be denounced and feared, but as an instrument of greater democracy and as a vital means of helping people to help themselves. Both of them were fought, every step along the way, by short-sighted men of wealth and privilege. Still, it is said that Franklin Roosevelt rescued capitalism from the capitalists. We need leaders like the Roosevelts again, both nationally and locally.

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