Archive for October, 2008


American Democracy or Bust

As I’ve mentioned in the past, I’m not sure I can vote for either presidential candidate, and I’m afraid tonight’s debate drove that home. For what seems like years and multiple elections, I’ve heard the same talking points and “personal” attacks, regardless of the actual candidates themselves. Frankly, a two-party election bores the hell out of me. We all know what the Democrats are about. We all know what the Republicans are about. Isn’t it time we tried something new?

What about a Green or a Libertarian? Well, Ralph Nadar put a nail in the Green coffin, and even though ex-Congressman Bob Barr is somewhat known (Monicagate, anyone?), he still isn’t enough to power the Libertarian party into serious competition. Let’s think about these two parties. In some ways, they represent extremes of both major parties, appealing to niches versus vast majorities, a hindrance for winning a national election. I write this even with my personal leanings being Libertarian flavored on many issues.

Candidates that have challenged and beat the establishment have done so because they represented a majority of the public’s view on a topic of interest. The Republican Party first rose to prominence in the 1800s over the issue of abolishing slavery. However, it seems like we’ve come to a bit of a stalemate. The differences between the two parties are predictable and not necessarily in a good way.

Democrats and Republicans

For all that Obama positions himself as the candidate of change, does he really represent a different version of the Democratic party or simply a more attractive, charismatic package than Al Gore or John Kerry? While I disagree with many of the Democratic positions, I’ve never believed Democrats as a party to be stupid, just somewhat disorganized with multiple voices clamoring for equal billing. Now they have a presidential candidate who’s perhaps the best orator in a generation and a fundraising machine courtesy of the Internet and millions of contributors. He’s spending some of that money this month on a personal Obama satellite channel. Maybe he is a man of the people, a candidate of change.

For the Republicans, well, if they win this election it will be due to a Hail Mary. Nothing is in their favor. The economy has tanked. We’re still stuck in a country five years later where we were told we’d be greeted as liberators. And for a party that claims to favor a small government, one is left wondering if this is small, what big government would look like. Add in a candidate who claims to be a maverick and picks a maverick as a running mate and citizens can only wonder how many other Middle East countries might be ready to “welcome” us. One also can’t ignore that the sitting Republican president has some some seriously low approval ratings. I don’t think the White House welcome mat is laid out for McCain.

As Good As It Gets

Is this election really as good as it gets? I don’t care if you’re a Republican, a Democrat, Green, Libertarian, Socialist, or even a misanthrope. If these candidates are representative of the best this country has to offer, we’re in trouble. I write this knowing that many people believe Obama to be this country’s only hope for future success. I respect that belief. He may very well prove me wrong and be the best president we’ve every had. But what happens if he’s not? Who’s left in the Democratic party, Hillary aside, to take up the party leadership in a way that bucks the past? The same applies to the Republicans. I didn’t like anyone in that primary anymore than I liked any of the Democrats.

We’ve proven so innovative in so many areas. Why does America’s democracy continue down the same path it’s followed for years? Can’t we make it better? H.L. Mencken captures it perfectly with the thought that, “Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” But, one can counter with the wisdom of Winston Churchill: “It has been said that democracy is the worst form of government except all the others that have been tried.”

American history has shown that political parties can rise and fall. If you truly believe that either of the major parties is a perfect fit for you, more power to you. However, if you look at that status quo and potentially have to hold your nose to vote for the least bad candidate, isn’t it time we thought seriously about a new party or at least a new type of political candidate? Do you believe you deserve better?


The Bubble Popped. Now What?

I’ve held my tongue for days as I’ve watched the supposed leaders of this country try to explain how they’re going to “solve” the current economic mess. Part of me enjoys the perfect timing of everything blowing up right before an election. The other part, well, it wonders why everyone is so shocked that the bubble popped. The United States and its citizens were testing the theory that they could live on credit indefinitely.  Amazingly enough, running at a deficit has a cost that we’re all becoming intimately acquainted with.

I’ve waited with great patience for one, just one, person to accept responsibility, even if it’s only partial, for any part of the chaos. Surprise, surprise all I hear is both political parties blaming each other and talking heads on CNBC predicting a long-term recession. I hear everyone talking about Main Street bailing out Wall Street. I hear politicians assure me that they must intervene. Why?

Who Takes Responsibility

I’m not an economist, so my argument does not even attempt to address the financial side of things, but rather what I consider to be the moral and the ethical aspect of the situation. Accountability has been missing from society for a while now. Occasionally, you’ll hear about an investigation into corruption at City Hall or something similar. The prosecuting attorney gets some air time that will play well during the election and everyone gets to feel good that someone is getting the bad guys. Unfortunately, I don’t believe our current situation fits this mold.

Here’s the reality: I believe that each one of use is guilty to some extent for the situation we find ourselves facing. If you don’t own a credit card, you’re mostly excused, unless you took out a mortgage for more than you knew you could afford to pay. I believe this mess started when we started listening to the media, our friends, our family, telling us that we deserved to have what we wanted NOW, not later, but RIGHT NOW.

So we got sucked into the credit card offers that screamed, “One Year Without Interest” or payment plans that promised, “Only $88 A Month.” We bought the big screen, the boat, and all the others toys, believing that a “little” debt was ok, because our homes were worth double, triple, etc. what they were when we bought them.

But wait, why not sell my home and buy a bigger one, because my investment will increase even more in a bigger house that’s worth more. Oh, I can get in that bigger house for less with an adjustable rate mortgage that increases my payment by $1000 a month in three years? No problem. I’ll have enough equity by then that I can swing it or sell the house for twice what I paid for it.

The Gray Area

Before you jump on me for ignoring the plight of people who were taken advantage of by ruthless mortgage brokers whose only concern was earning a commission, I know that hundreds of thousands of people were misled. Everything from last minute rate changes to outright threats played a role in bad mortgage lending. However, even if you say these individuals make up 50% of the bad mortgages that still leaves another 50% who should know better.

Consider the words of consumer behaviorist Larry Compeau of Clarkson University from a Newsweek column in March 2008.

“People in their 30s haven’t really experienced a significant or long recessionary period…I am concerned that they won’t be able to respond quickly enough to mitigate what may be the damage ahead.”

The column’s author Eve Conant continues, “Not only do people under 40 save less, but they have less to save.” Indeed, savings as a percentage of disposable income have plummeted in the United States, from between 7 and 10 percent in the 1960s and ’70s to just 0.4 percent in 2007.” (link) Note that it’s savings measured against disposable income. Doesn’t that make us complicit?

I can also hear the argument that the cost of living has increased as wages have flattened, making regular use of credit a necessity. Health care, the cost of food, the cost of energy. You name it, most everything costs more. But let’s be honest, how many people are surviving on credit cards alone as a sole source of funds? Isn’t it more likely that the credit cards are paying for the vacations, the clothes, the iPods, and the toys of life?

I’m the first to acknowledge that the credit market is screwed up and not aimed at protecting consumer interests. (I strongly encourage Maxed Out, both the book and the documentary, for a look at the credit industry.) However, we keep going back for more. I find it telling that because I pay my balance in full each month, credit card companies refer to me as a deadbeat. Their number one customers are the ones caught in the revolving door of minimum payments, never touching the principal and only paying the interest. Doesn’t this outlook tell us something important about credit card companies?

Make Something Happen

Don’t we owe it to ourselves to protect our individual interests? For those who believe more government regulation is the answer, good luck. The $700 billion bailout started as a three page document in the White House and after the House and Senate got through with it, the number had increased, going from 110 to 451 pages. The Senate, because it’s constitutional barred from initiating finance bills, slapped multiple bills together to create a package that skirted that pesky rule. Any regulation will come with strings that may or may not benefit individuals, regardless of which party controls Congress and the White House.

So I say start small. Go to and get your name removed from the list that the credit agencies provide to businesses extending credit offers or insurance. You can opt out for LIFE if you want. Start a savings account even if it’s pennies in a jar (example of government stupidity, it costs roughly 2.5 cents to make each penny, a loss of 1.5 cents per coin).

Finally, the thing I believe will save us, as it has in the past, is our ingenuity and willingness to innovate. Some have suggested, for example, that if the U.S. could create a green energy revolution through technology innovations, swinging things back to the positive side. At the foundation of whatever proves the solution will be people who made something, who didn’t just consume. We talk about the scales of justice being balanced. Doesn’t the same rule apply to what we do with our lives? If we take, doesn’t it make sense to give back?

UPDATE: If you’re curious, I wrote a post a little over a year ago about the history of credit cards and their role in the economy.

View Britt Raybould's profile on LinkedIn



October 2008
« Sep   Nov »