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A number of you have told me that you don’t look forward to reading the column on your computer screen. That’s not necessary if you have a printer. Print out the column and take it with you to the breakfast table or wherever else you choose to read printed material. (You can also call up past columns in case you missed them.)
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September 25, 2008
Let me try to explain how this country got into the current multi-billion-dollar economic mess (a trillion-dollar mess?) in terms that I can understand.
Perhaps this will also help some of my readers understand the situation which has been largely reported in terms of statements from politicians and public officials who have supplied precious few details of what happened and exactly how those billions upon billions of dollars are going to be used.
There is enough blame to go around, from the Federal Reserve Board which brought loan interest rates down to totally unrealistic levels, to those credit card issuers whose monthly bills allow you to make a small minimum payment, (thereby, in effect, loaning you money at substantial interest rates on the unpaid balance), to the thousands of financial institutions which loaned money for mortgages at initially-low interest rates to non-creditworthy homebuyers, to the financial institutions which bought up the non-creditworthy mortgages and bundled them to be sold up the financial stream to giant Wall Street firms like Lehman Brothers.
And let’s not forget that some of the blame—arguably a large share—rests with those Americans who ignored the fundamentals of sensible home buying—substantial down payment and a mortgage interest rate which reflects your credit worthiness.
Remember that those who ignored these fundamentals are to be bailed out by taxpaying Americans who have the good sense to live within their means.
There is, incidentally but importantly, no shame in being a renter, as millions of Americans know. To cite a personal example, our family lived in a succession of rented homes and, as far as I know, no one in the family felt we had been cheated out of the “American dream” of home ownership.
A tip of my columnist’s cap to The Omaha World-Herald for a front-page story last Sunday which appeared under this headline: “Having good credit score: Priceless.”
The story did the best job that I have read or heard in explaining the precise way in which, ignoring sensible standards of credit worthiness, financial institutions extended unrealistic mortgage loans to house buyers—and to more than a few “homeowners” who weren’t really all that interested in pursuing the “American dream” as they were of making money buying and selling houses.
The World-Herald story reported that mortgage seekers will have to meet new, higher, more realistic standards of credit worthiness as measured by agencies which track the borrowing and debt repayment records of millions of Americans.
All of this reminds me of the old maxim about not waiting to lock the barn door until the horse is gone. Barn doors are being locked all over the country by financial institutions by raising the standards for making mortgage loans—but the multi-billion-dollar horse is long gone from the barn.
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The Sunday World-Herald also had an excellent front-page article comparing the tax plans of Republican John McCain and Democrat Barack Obama.
Except for proposals to impose increases up to 19.4% on persons with income above $600,000, Obama’s emphasis was entirely on tax reduction. Obama’s plan, for example, would relieve 20% of current taxpayers—the bottom 20% in terms of taxes paid—from paying any federal income taxes at all.
The McCain plan would give tax decreases all across the board including 8.8 to 10.4% for taxpayers with incomes above $600,000.
The estimated budget deficit impact of these tax policies would be, in McCain’s case, to increase the national debt by $5.1 trillion dollars and, in Obama’s case, by $3.6 trillion dollars.
My question: Why propose any tax cuts at all, especially at a time we are being told it will take multi-billions of dollars to repair the damage done by the easy-credit economic policies of the past decade or more?
* * *
Raise your hand if you were surprised by the fact that Sen. Chuck Hagel of Nebraska became the most prominent Republican to publicly question Alaska Gov. Sarah Palin’s qualifications for the vice presidency.
I would think that, figuratively, very few if any readers’ hands went up. Whether you agreed with Hagel or not, his position was not surprising. It was entirely consistent with his well-publicized break with the national leadership of the Republican Party—a break which, judging by the comments which have come to my ears, has made him more than a little unpopular with a good many Nebraska Republicans.
One reaction, which I found particularly interesting, went like this: Hagel faults Palin for her lack of foreign policy experience. So the Republican vice presidential candidate doesn’t have foreign policy experience. But neither does the Democratic presidential candidate (except for a recent eight-day, news media-oriented sprint through the Middle East and Europe).
* * *
Like so many other golf fanatics, I watched every bit as much of the Ryder Cup coverage as I could, and I failed to hear a single mention of what to me is one of the most fascinating chapters in Ryder Cup history.
The biennial matches—this year’s was the 37th—originated as a competition between professional golfers from the United States and professional golfers from Great Britain.
By 1977, the Americans had become so dominant (eight wins and one tie against one loss in the preceding 10 years) that American golf legend Jack Nicklaus approached British golf representatives with a suggestion:
To improve the competitive nature of the matches, the United States team should face a team composed not only of British golfers but also those from other European countries. This approach was adopted, and the matches did indeed become more competitive.
During this year’s competition which ended 16 ½ to 11 ½ in favor of the United States, a television commentator offered this description of Phil Mickelson: “One of the most popular players in the game—if not the most popular player.”
I thought there was pretty general agreement that Tiger Woods is the most popular player in the game. In any case, Woods and Michelson share some things besides popularity. They both pull off some great recovery shots and sink some remarkable putts. They also share a hard-to-understand difficulty in consistently hitting drives anywhere in the neighborhood of the fairway.
* * *
In State Auditor Mike Foley’s second annual release of a list of state government’s highest-paid employees, it was not surprising that multi-million-dollar contract payouts put a University of Nebraska’s fired football coach and fired athletic director at the top of the list of high-paid employees.
Fired Husker Coach Bill Callahan received more than $4.5 million in salary and other payments in the fiscal year ending June 30. Athletic Director Steve Pederson received more than $2.9 million.
Nowhere in the news accounts which I read or heard about these high-end payments was there mention of the fact that the money did not come from state tax dollars, in contrast to payments to a number of other individuals in Foley’s “top state salaries” list.
As with other compensation paid to University of Nebraska-Lincoln athletic department personnel, the payments to Callahan and Pederson came from revenues generated by the athletic department.
A new dog has joined the extended Andersen family circle.
Her name is Samantha (Sammy for short), she is a 5-month-old, 3 ½ pound white-furred Chihuahua and she has already taken charge in the Denver household of our daughter Nancy, her three sons, and Rookie, their five-year-old Bichon Frise.
The purchase of Samantha—we call her Sammy—followed long discussions about what to do about Rookie’s long periods of loneliness while the grandchildren were busy at school or athletic events and Nancy was involved in her job and hauling her children to those athletic events. Nancy suggested finding the lonesome Rookie a home with someone who would be able to spend more time with him or provide the companionship of another dog.
The children were having none of that. Counterproposal: Buy another dog to keep Rookie company.
The happy result, after a few weeks in which Rookie considered Sammy more a pest than a companion: Rookie and Sammy frolic together, with, as you might expect, the female playing the leading role.
Seven-year-old grandson Grant Karger thought Sammy needed a name more comparable to the names which had been given to him and his two brothers. So if you want to be formal, you now address frolicsome Sammy as “Samantha Wheaton Andersen.” Grant explained that Wheaton (a name honoring Marian’s father, Wheaton Battey) was the middle name of one of Grant’s older brothers, 13-year-old James Wheaton Karger. And, Grant explained, he just liked Andersen as a last name.
Marian and I feel very complimented to have such a popular newcomer to Nancy’s household have a name which recognizes both Marian’s family and mine.
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