Checking CNN this morning I came across three stories about the economy that I wanted to share.
1. Ten states are reporting that by 2009 they will have no more money in their unemployment funds.
2. AIG says the $85 billion they received in government assistance was not enough and that they want more. $37.8 billion more, to be exact.
3. Cook County Sheriff announces he will no longer honor foreclosure eviction notices from banks.
Clearly they paint a bleak picture of the economy and the news is stark, but are these stories just being reported because the media is looking for these types of stories? It's hard to really know. The old adage is that no wants to read the good news. It's always the bad news that sells. But as an overall picture of what's going on around the country, the details are disturbing. The ten states running out of unemployment funds are: California, Michigan, Missouri, New York, Ohio, South Carolina, Wisconsin, Indiana, Kentucky and Arkansas. According to the report, eight more states are in danger of insolvency if the economy gets worse. To think about it at a macro-level, twenty percent of the country will have to pass emergency legislation to honor their unemployment laws or cut the people loose. If those additional eight states fail that's fully thirty-six percent of the states failing. It's hard to predict what the overall impact of the failure would be, but I can imagine, and it's not pretty.
So while these states, their leaders, and their people struggle to figure out what they will do, our government handed over more than $750 billion to the Treasury Department to help failing banks, and the State of New York (who is one of the states running out of unemployment funds) loaned AIG $85 billion. Now they want an additional $37.8 billion. We're told on one hand that we need to save companies like AIG because they are important to the overall health of economy, and they're in danger of failing, but they have half-a-million dollars to spend on a weekend at a luxury resort. I am pro-business, but not to this level of obscenity. Which is what this is. I'm almost inclined to think that it would be more beneficial for the US government to buy the mortgage insurance policies AIG holds, as well as the other profitable assets, sell them to other companies at a discount and fire the AIG executives. Well, maybe not beneficial, but certainly satisfying in a vengeful kind of way.
And speaking of satisfaction, we have Sheriff Tom Dart of Cook County, IL who has begun refusing to evict people from their homes for foreclosure. In an interview with CNN this morning he stated that the overwhelming majority of the people he has been evicting have not been the homeowners, but tenants. They are renting the homes and condos that are being foreclosed on, and had no idea that the property where they resided was in danger. Sheriff Dart says that banks are not doing their due diligence and until they begin to assert that the resident is the borrower. The banks are threatening to take Sheriff Dart to court and have him charged with contempt. Call me crazy, but I don't think that he's going to get convicted, even if charged. Going back to that notion of vengeance and its distant cousin justice, people are angry. They're hurt, and their scared, and Sheriff Dart's actions seem heroic. He's standing up to the banks, who look like the bad guys right now, and telling them that they have to change. While he might be breaking the letter of the law, a jury of his peers would validate his stand. A judge who convicted him would do so with the knowledge that he's going to ignite a firestorm of protest. It is an injustice to the people to have them pay through the nose to bailout the banks through the Federal Government while tossing them onto the street. Sheriff Dart's acting on his conscience, And for me, that's very satisfying.
