By David Glenn Cox
Houston, I be gots a question. Why do they call it a stimulus if I have to pay bills with it? Are the little boats on the sides of cruise ship stimulus boats? I’m stimulated to write checks? Sounds more stimulating to my creditors than to me, but I am grateful for it and don’t wish to sound unappreciative. I don’t want the orange one to catch wind of this and send the FBI to my apartment to beat the shit out of me and take the money back. Funny today but not so tomorrow.
It is the right thing to do to save the banks. Everything always comes back to the banks. With the economy shutdown wholesale auto auctions are shutdown. Used cars sales were down 65% last week. All the automakers are offering give away deals not to save you but to save themselves. Every month tens of thousands of cars come off lease. They end up in the auto auctions along with the repo’s and trade ins. As the bulge begins at the wholesale level and the prices begin to fall. Like turning on a light, the cars aren’t worth as an asset the money borrowed against them.
This is what crippled GM in 2008. They had thirty thousand cars a month coming back. Escalades and SUV gas hogs in the teeth of the Great Recession. Thirty thousand cars per month that were basically dead stock. It’s a falling knife it loses value just sitting in the parking lot. To save themselves they must save us. So, no matter who you finance a car with, in the end it’s a large bank. A bank that leant $500 million in car loans now worth only $300 million, at best…someday. GM is making offers to lease holders to keep their car past the end of their lease, they don’t want it back.
Living here in Denver, I’ve wondered about buying a home. There are fields like wildflowers of homes rolling on almost forever. The minimum asking price is 350 thousand. Too rich for my blood what with taxes and upkeep. This is what FDR was talking about, that poor people create a drag on the economy by making it easier for them to become prosperous you aid the entire society. If you don’t help them to become prosperous, every plan you come up with is doomed to failure. In an economy 70% based on consumer spending if you don’t aid the consumer you might as well put a gun to your head.
A stimulus that catches you up on your bills until next month is no stimulus at all. It’s a lifeline until next month and thanks. It won’t increase spending and it won’t help with the societal anxiety based on fear of the unknown. No one will buy a house, and few will buy cars. As a “Stimulus” its money down a rat hole. A long-term program with monthly payments over a year or eighteen months where the people can hear and see its government is invested in their recovery versus an orange brain dead monkey man having pissing contests with the media.
Conservative means, when the house is on fire you only use one bucket of water at the time as a hose might be wasteful. Wasteful is giving money to the Cruise lines. It’s going to be a long day in January before tourists will voluntarily pack themselves in a small metal boat with a few thousand of their friends. Two weeks in a stateroom the size of a Gemini 7 is the stuff of horror films. But if the American consumer knew that they weren’t just going to have survival money but maybe a little extra? That’s a stimulus.
I remember vaguely something from my Bible training about tithing. There was an amount you were supposed to give, and you didn’t earn any praise until you’d given more than that. You don’t get praise for doing what you’re supposed to do anyway. Ladies and gentlemen…Donald Trump. I prefer the Native American approach; you can tell a man’s greatness by what he can afford to give away. If you help some one out, good. If you give away a horse, an old man rides.
The mortgage crisis of 2008 is a road map. Already home prices are falling, America is locked down you couldn’t buy a house if you wanted too unless you did it all online. Twelve million home foreclosures caused by an economy in the dirt in 2008 over four years. Now imagine twice that in one year. Those numbers would cause mortgage bonds to collapse and then it’s, “Welcome to the Brave New World of 1929!”
During the Great Recession, Sacramento California, had outperformed its neighbors due to state government spending. The governor, “Arnold,” prorated government spending and Sacramento joined it neighbors in the tank. Instead of normal expenditures supporting a regular economy they cut spending and used the money saved for extra unemployment checks. Trying to fatten a dog by feeding him his own tail.
But, my bank account sure shines today. It’s like I’m someone else! Come tomorrow I’ll be me again and balance won’t look nearly as attractive. Tomorrow my creditors will breath a sigh of relief. Oh, thank god, he got the check moving my accounts back into the good graces. The CEO’s can put the pistol back in the desk drawer until next month, playing out the warden’s last scene from the Shawshank Redemption.
“Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.”
― Franklin D. Roosevelt