September 29, 2010

Eskimo Pies came on the market, available for a nickel, and I fell in love with them. Payday was Saturday at noon. We grocery shopped in the afternoon, and I would buy and eat five Eskimo Pies while parents bought the week’s groceries.  One Wednesday, Johnny Duggan, the store owner, saw me watching someone else eating one of my favorites, and said. “You love those pies – do you know you could have one today and pay for it Saturday?” 

Without notice on my part, I soon had a $2.50 bill, and instead of speaking to me, he called my Father, who drove immediately to school, took me out of class, led me to his car, said with his Scottish burr – “GET IN!”.  He drove out into the country, stopped in the middle of a deserted one lane dirt road, and said “GET OUT!”  And, as I remember, knocked me across the hood into the ditch, and spent a long time explaining “How much better it is to PAY FOR SOMETHING BEFORE YOU GET IT THAN AFTER!!”

It took me quite a few years to realize that was the best lesson I ever learned, and later how much better off this country’s people would be had he been the father of us all! Of, he didn’t have the time.  And I don’t think I ever told him my current view of that few minutes teaching, and what it has meant to me and my children.

In my opinion, the weak lending standards, serving the political interest of affording housing for all, are the main reason for the nation’s financial and employment downfall.  Well, the fact that Chinese companies and employees are out producing and under pricing many products developed here in earlier years has a big effect – and didn’t we sort of do that to established European countries? 

In 1929, when any investor could buy stocks on margin with as little as 10% down, wasn’t that followed by a huge financial CRASH?  A recession so heavy that Roosevelt started something called Works Progress Administration to build needed roads, parks, and entertainment facilities?  Spending money that was in short supply even to the government that prints the money, and temporarily losing the support of many American voters, even a few of his own party?

Small wonder that after the crash, the government instituted a margin requirement of 50 percent down: I am glad that my father taught me to pay for it before I got it. Of course, when this recession occurred, my holdings were devalued, but I didn’t still owe somebody for part of my purchase!  If you don’t follow me, do you believe a combination of political deregulation, and insufficient enforcement, accompanied by GREED of a few put us in harm’s way.

I started investing in the late 1970’s.  I did not inherit wealth, I worked for it.  My investments grew rapidly until the mid 1990’s, when, in my opinion, regulators worked with weakening lending policies as mandated by Congress (politicians, more lawyers than economists, farmers, businessmen, or truckowners), systematically dismantled a housing-finance system based on the common-sense principles of 1. Adequate down payment, 2. Good credit, and 3. Ability to handle the mortgage payment.

These policies led to we taxpayers having to foot the bill for bailout after bailout, and I think no one political party is responsible for all, nor is one party able to fix it all!  Do try to know EACH person’s thinking WHEN YOU VOTE IN OUR NEXT GOVERNMENT – AND PLEASE DO!  .  .  .  good gardening

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