Louisville John's Blog

To me, "affordable housing" means you can buy and own a house. To the people in Washington it means that you can devote a portion of your income to a thirty year mortgage for several years, and then refinance to string it out for another thirty. The market would seem to agree with me. Housing prices, kept artificially high by speculation and loose mortgage lending started to seek their actual level. Congress's priority is not to allow the market to dictate how much a house should cost, but rather to keep values artificially high-- so that people don't lose the "investment" they put into their homes.

"Affordable health care" to me means that if you get sick or injured, you can pay your medical bills. To Congress, it means that you can devote a portion of your income for health insurance every month, and then if you get sick or injured, you can somehow manage to pay the deductible and the copays, and maybe get well in spite of the restrictions on coverage. It's funny that most proposals Washington makes about "fixing" healthcare involve making Health Insurance affordable rather than addressing the cost of medical care, hospital stays, diagnostic testing, and the big one Drugs. It makes me wonder whether there will be a medical bubble just like the housing bubble? How will Congress react when the medical bubble bursts?

"Affordable Education" means that a kid can get a degree at a State University at a reasonable tuition, and the taxpayers and University donors pick up the rest of the tab because they see the benefit of educating our young people. To many in government, reducing the costs of education means gutting the budget for schools and universities so that we can afford tax cuts. This is supposed to help our economy, but in fact, it adds additional burdens to families who have to pay increasing tuitions, and it keeps many others out of college-- limiting the pool of educated or skilled people in a given state. Politicians try to address the problem by tinkering with the student loan programs, meaning that when people get out of college, they are saddled with debt for a substantial number of years.

"Minimum Wage" is meaningless without a maximum wage. Increasing minimum wages is supposed to keep workers at a minimally comfortable standard of living. However, the minimum wage needs to accurately reflect the cost of living, and must be adjusted when the costs of living rise. When it is acceptable for some in our society to earn hundreds of millions of dollars, minimum wage doesn't really do much for the worker and his family. The government could address this issue marginally with income tax policy (or maybe a wealth tax instead), but it really should come from social values. We should decide everybody's worth as a multiple of minimum wage. It should start with our Congressmen. How important is their job? Is it 10 times more important than "Joe Sixpack" or 20 times more important. They currently draw salaries of about 12 times the minimum wage, but that doesn't include perks and moonlighting. Shareholders should come to a consensus about executive salaries. How much is our CEO really worth. Should he be making 50 times more than the regular worker, or 100 times more? It's not unusual to find executive compensation at more than 2000 times that of the minimum wage worker, and some have even greater multiples. And shareholders are losing their shirts in the market under their leadership.

How about retirement? Congress is trying to steady the market so that people don't lose their retirement. How are they reacting to the problem? By giving away tax dollars, decreasing tax revenues, and cutting interest rates. Therefore, you are increasing the tax liability of the future taxpayers, while decreasing the return on their bank deposits.
When I think about saving, I always thought that you save your money in the bank. I opened a savings account recently at about 2% interest. People tell you that you are a chump for putting your money in the bank. They will tell you that over time, the stock market earns much more than a savings account, even during turbulent times. That's no consolation to the older generation who have recently lost their retirements in the stock market, and won't have the time to wait for the stock market to bouce back. The market isn't just swinging back and forth. Here's what's happening: Corporations are taking money from retirement accounts and individuals in return for ownership in their company. They use the money to add wealth to thier companies. Suddenly, stock prices fall. People try to preserve the value of their retirement accounts by selling at a low price. Wealthy people pay the low prices, and get a windfall of the value placed into those companies by less wealthy people. Then the cycle starts over again.
The banks pay maybe 2 percent on money we have on deposit at the banks. However, if we borrow money from the bank, whether it be on a mortgage, car loan, student loan or credit card, the rate can be as much as 200% to 1200% of what they're paying us on the same money! Saving for retirement should not require us to gamble away our earnings on Wall Street's gaming tables. If the banks use our money, they should pay for it, just as we pay the banks for the use of their money.

Our system is broken. Congress and state legislatures are not looking in the right places for a fix. I think they need to return to the root of the problems.