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Tales from a small town

Short stories about life in a small town. Non-fiction. Great reading.

Tuesday, February 14, 2006

Barak's SUV

I was looking at Intellectual Insurgent's blog, and I saw something about a speech made by Barak Obama, where he was talking about how white America couldn't grasp why Katrina survivors were having such a hard time. Speaking of white America in this speech, Barak said white America can't understand why the residents of New Orleans couldn't load up their SUV with Perrier, drive to a hotel 500 miles away, and just ride out the storm.

Two things struck me when I read this - and in this order:

  • How dare someone look down on me because I don't bleed for every cause and understand every thing that is possibly wrong with society today?
  • Then, I realized what my blog is all about and thought to myself, "You hypocrite!"

How do I reconcile the two? By realizing I have a right to my initial feelings, then by understanding that, as Red Green (of Opossum Lodge fame) would say, "I'm looking out for you, because we're all in this together." (Anyone know who I'm talking about? No Canadians answering, please!)

I can understand why Barak would make such a statement. It's not a "white America" thing: it's a "rich America" thing - and not in the way you might think I would attack the problem.

This is the fault of rich America, but not because the rich aren't cutting checks for mansions, to replace the shotgun-shacks of the disenfranchised homeless. This is the fault of rich America, for keeping everyone from middle-class on down, ignorant on how money really does work.

See that stupid little plastic thing in your wallet or purse? You know, the thing you reach for, everytime you want to buy something? That little thing is making you an economic slave-to-the-grind.

There are 2 sales meetings that rank up there in the all-time list of successful sales presentations, that I would've given my right nut to witness:

  • The guy who sold the script for the 1960's sitcom, "Hogan's Heroes."

Could you imagine how the sales pitch went on that one? "Hey, I've got an idea for a sitcom, that'll leave the whole family in stitches! How about a group of American POWs in a German prisoner of war camp during WWII? Wouldn't that be a hoot?" Don't laugh: the guy (or gal) sold the script, and Hogan's Heroes even went into syndication, which is the only reason I know it ever existed.

  • The person who originally thought of credit cards.

Could you imagine how the sales pitch went on that one? "Hey, I've got an idea that'll get people to keep paying for items they've already bought!"

Close your eyes, and imagine a skeptical Simon from American Idol: "Oh, come now! This has probably got to be the most bloody ridiculous idea I've heard from you yet! Do you honestly think people are that stupid?"

"Yes, I do."

Then imagine Simon, rubbing his chin, deep in thought. This was probably the birth of credit cards.

When you're paying 25% interest on the unpaid balance, you keep paying for things that you've already bought. Seriously.

So what does this have to do with Barak's "SUV" speech? Everything.

When you get a loan for a house, you've got the option of incorporating into the loan, one year's worth of disaster insurance, and one year's worth of property taxes.

The bank will total up the amount for the year's worth of taxes and insurance, add five percent (to allow for increases) divide that by 12 (the number of months in a year) which figures your monthly payment on your taxes and insurance (escrow) for a year. You pay the monthly payment for the house, plus your escrow payment. Your escrow payment goes into an escrow account, that always keeps you 12 months ahead. (Remember, you've already incorporated into your mortgage loan, one year's worth of taxes and insurance - which you'll pay at the "closing table" when you sign for your loan.)

Even if you get 3 months behind on your loan, you're still 9 months ahead on your taxes and insurance. This way, when disaster strikes, even if you're a little behind the eight-ball yourself, you'll always have insurance to cover your losses. This is called an "escrow account."

Again: what does this have to do with Barak's "SUV" speech? Everything. If the people of New Orleans had their insurance escrowed, chances are good that they wouldn't have to rely on FEMA to bail them out - their insurance company would.

Who teaches you this? Nobody! Why? Money is a finite resource. There's only so much to go around. Do you honestly think the rich want everyday school kids to learn this stuff? Of course not! Who would keep buying stuff with credit cards, who would keep renting apartments, and for those lucky enough to know how to build their credit enough to get a mortgage, who will fall behind when disaster strikes, so the bank can repo your house after you helped pay a significant portion of the amount borrowed, down?

Were you ever taught in school that the benchmark measurement for determining whether or not an investment is providing a good return, is comparing it to what you would have made, if you would have stuck that money in a CD?

Do you learn in school what a sector of the economy is, and how to balance your investments in stocks, so they're in off-setting sectors?

Do they teach you what commodities are, or the fundamentals of investing in commodity-based stocks? For example: Weyerhouser (sp?) is one of America's leading provider of lumber. When a hurricane is off the coast, what do you think happens to the price of Weyerhouser stock? It skyrockets!

We're too busy buying stuff with credit cards and going broke as a result, to ever notice.

If the middle class is to survive, this has got to stop.

Shortest post ever!

Click on this link, read it, and tell me if we're all screwed or not. Don't worry - it's nothing heavy like Mideast Peace or anything - in fact, it's rather light reading. Having taken very high-level English classes at my local university, what you're about to read, really doesn't surprise me.

Have a nice day :)