Posts Tagged ‘economy’

Film Review: “Capitalism: A Love Story”

Capitalism__A_Love_Story_1Did you know that one home is foreclosed every 7 1/2 seconds in the United States? Or that millions of unsuspecting Americans have secret life insurance policies taken out on them by the very companies they work for? If you didn’t, Michael Moore is here to tell you all about it in his new film Capitalism: A Love Story. So sit back and prepare for history class…

It’s been 20 years since Michael Moore burst onto the film scene with his first documentary, Roger & Me. Although his films have gotten bigger in budget and broader in scope, one thing hasn’t changed: Moore’s decisive uphill battle to point out what he perceives as the ills which face this country, and possible ways to correct them. All of this dedication comes to the fore in Capitalism: A Love Story, which details not just the history of capitalism itself, but how much the dream has changed from an idealistic vision that could have allowed us to live in a financial utopia, to a nightmarish quagmire that threatens to collapse our economy at any moment, based on the insatiable avaricious behavior of the 1% rich that unfortunately hold power over all of us. (more…)

Numberscruncher: Angels, Demons, and Debt

200548456-003In the summer of 1998, Harper’s Magazine published one of its most talked-about stories, Vince Passaro’s narrative of how his family accumulated $63,000 in credit card debt. He and his wife had academic jobs bringing in a combined $100,000 per year as well as a rent-controlled apartment in New York City, but they also had three children in private school. Passaro attracted opprobrium back then, and the story remains one of the key works of the personal finance confessional genre.

Until Sunday, that is. Edmund Andrews, who covers economics for the New York Times, wrote a story for the magazine about how he dug more than $500,000 into debt because he wanted to buy a nice house for his new blended family, even though much of his $120,000 annual salary was claimed by his ex-wife for alimony and child support. 

I’m the kind of person who clips coupons and rides the Megabus. While printing presses all over this great land were rolling out Edmund Andrews’s tale of woe, I was at the grocery store loading my cart with $0.88 packs of cream cheese and $2.00 boxes of raisin bran. Then I swung past the Junior League’s annual second-hand clothing sale, where I bought some shirts for my husband and me, just $3.00 each, some still with tags on them. I want to smack Passaro and Andrews around, then pack them into my nine-year old-car and show them what a thrift shop looks like. I want to teach them to make their own pizza dough and mend socks and use tie-dying to turn stained school uniform shirts into fun playclothes. (more…)

Spending Our Way Into, and Out of, This Mess

83585834One of my friends had a complaint about the personal financial press: why is it, she wondered, that they are telling people now about raising emergency funds and living below your means. Where were these columnists when her business was good and she had the money to set aside?

Suze Orman always talks about emergency funds, but most of the rest were writing about how to get the most value from your second house or how to buy stocks when things were going well.

Because I’ve been self-employed for ten years now, I’ve been forced to learn how to deal with irregular income. When things are good, I save. That way, I can spend at a steady rate when the work isn’t coming in and the customers are late with payment. Most people work for someone else and receive a steady paycheck, so they are more attuned to the mood of the times, and that is often reflected by advertising. When the economy is hot, advertisers have money to spend to entice you to buy what they offer. When the economy is not so good, the ads disappear, and then people writing about the economy become especially conservative.

Spending got us into this financial mess: spending money that people didn’t have on assets that weren’t as valuable as they thought, whether it was a condo in a new Las Vegas subdivision or a pair of Jimmy Choo shoes. But consumer spending is the engine of the economy. Personal consumption makes up about 70% of the gross domestic product, so when regular folks cut back, it hurts.

Now is a great time to be spending money, assuming you have money to spend. And you know what? A lot of people do. Most people have jobs, and some are getting raises. Bankruptcy lawyers are busier than they have ever been, and the good executives at AIG are collecting fine bonuses. The government’s stimulus package will give taxpayers an extra $8.00 a week to spend. Meanwhile, prices are falling because stores are desperate to attract customers. There are plenty of bargains to be had! (more…)

Dw. Dunphy On… Get Me Some Money Too

In response to the nearly self-fulfilling prophecy of a recession, President Bush recently announced proposals to offer tax rebates in the ballpark of $150 billion. He also proposed a kick-in for industry to help support production, all in the name of boosting a rapidly sagging economy. There’s just one problem with his intentions — they won’t work.

The biggest variable is the price of oil. It depresses the value of the dollar worldwide, it crushes the budgets of millions of American households, and there isn’t a damn thing we can do about it. With the tables shifting in world economics and China booming with industry, if we had the ability right now to reject Middle Eastern oil outright, the effect on the price per barrel is presumed by most analysts to be negligible.

This, of course, is the pebble at the center of the massive snowball. Those American households I mentioned are dealing with a lot — subprime mortgages, credit crises, foreclosure, unemployment, and the winter cold that doesn’t care about the price of oil or the size of your home or how far you have to drive to an underpaying job. (more…)