While O’Donnell laudably tried to concentrate the audience’s awareness onand hopefully very last, Charlie Sheen trainwreck interview, courtesy of the tragic undertow that threatens to pull Sheen beneath for very good, I used to be overtaken, not by the pulling around the thread, along with the voracious audience he serves. It did not make me depressing, it manufactured me angry.
Regarding celebrities, we could be a heartless region, basking within their misfortunes like nude sunbathers at Schadenfreude Beach. The impulse is understandable, to some degree. It could possibly be grating to pay attention to complaints from folks who love privileges that the majority of us can’t even envision. Once you can’t muster up some compassion for Charlie Sheen, who helps make a lot more dollars to get a day’s deliver the results than the majority of us will make inside of a decade’s time, I guess I can not blame you.
With all the quick tempo of events on the internet and therefore the information revolution sparked by the Online world, it is especially very easy for the engineering trade to believe that it is different: frequently breaking new ground and executing items that no one has actually completed in advance of.
But you can get other sorts of business enterprise which have previously undergone a lot of the same exact radical shifts, and have just as awesome a stake within the long term.
Consider healthcare, for example.
We quite often imagine of it being a significant, lumbering beast, but in fact, medication has undergone a series of revolutions from the previous 200 years which have been at the least equal to individuals we see in technological know-how and knowledge.
Significantly less understandable, but nonetheless in the norms of human nature, is the impulse to rubberneck, to slow down and have a look at the carnage of Charlie spectacle of Sheen’s unraveling, but for the blithe interviewer Sheen’s existence as we pass it from the best lane of our each day lives. To become straightforward, it may be tough for people today to discern the variation between a run-of-the-mill focus whore, and an honest-to-goodness, circling the drain tragedy-to-be. On its very own merits, a quote like “I Am On a Drug. It’s Known as Charlie Sheen” is sheer genius, and we cannot all be expected to consider the full measure of someone’s life every last time we listen to something amusing.
Extremely fast ahead to 2011 and I am seeking to examine will mean of currently being a bit more business-like about my hobbies (mainly new music). Through the finish of January I had manned up and commenced to advertise my blogs. I had established a number of completely different blogs, which have been contributed to by buddies and colleagues. I promoted these activities by means of Facebook and Twitter.
Second: the tiny abomination the Gang of 5 around the Supream Court gave us a 12 months or so ago (Citizens Inebriated) really has a tad bouncing betty of its very own that may really well go off inside the faces of Govs Wanker, Sacitch, Krysty, and J.O. Daniels. Because this ruling prolonged the notion of “personhood” to the two companies and unions, to strive to deny them any proper to run within the legal framework that they had been organized beneath deprives these “persons” with the freedoms of speech, association and movement. Which implies (the moment once more, quoting law college trained friends and family) that both the courts really need to uphold these rights for your unions (as person “persons” as assured from the Federal (and most state) constitutions, or they've to declare that these attempts at stripping or limiting union rights really need to apply to main firms, also.
I know that memories are short on Wall Street. But are they short on Main Street too? Reading Linda Stern’s latest paean to leverage and housing risk, it certainly seems that way. Saving for a down payment is hard, she says. It can take time!
And that doesn’t seem to pay. If you think about the cost of paying rent for five or more years, you may be better off jumping into a home with a low down payment now. That’s true even if you have to spend more money on fees and mortgage insurance to get one of those low down payment loans.
Well, yes, let’s think about the cost of paying rent for five or more years. In fact, let’s plug all our numbers into a rent-vs-buy calculator and see where we’re at after five years. The problem with Linda’s formulation here is that it helps to reinforce the common fallacy that 100% of rent payments are “wasted,” in a way that mortgage payments are not. But that’s simply not true. In both cases you’re paying money every month for your shelter; in the rental case that money goes to the landlord, while in the ownership case it goes to the bank.
Some small part of your monthly payment may or may not end up helping you build equity in your home, if house prices move up rather than down and depending on how much of your payment goes towards principal. But remember that the alternative here is saving up for a down payment — which is essentially the same thing as building up equity in a future home. If you save up $250 per month for five years and then put down $15,000 as a down payment, then you immediately start off with $15,000 of equity in your home. By contrast, if you buy today with no money down and start making mortgage payments, there’s a good chance your equity will be much less than $15,000 in five years’ time.
But Linda’s on a roll here, and manages to come out with one of the most astonishing pieces of personal-finance advice I’ve seen since the crisis hit:
Even if you have the money for a bigger down payment, there can be good reasons to save your cash. Mortgage rates continue to skirt all-time lows: Why not put your money to work for yourself and borrow as much as you can reasonably afford, on a monthly basis, at today’s rates? You can put the money you’re not paying into a down payment to work elsewhere. If home values rise, you will have done your best to leverage a small down payment into bigger equity. If they fall, you’ll have less skin in the game, and that could put more pressure on your banker to improve your loan terms lest you walk away.
This, in a nutshell, is everything that was wrong with the housing market before the crash — everything that we want to avoid going forward. Can’t Linda look around at the current devastated state of many people who bought with little or no money down, and see the dangers here? Evidently not. Instead, she seems to think it’s a bright idea to borrow more money than you need, to the point at which you’re pushing the envelope of what you can reasonably afford. And then take the cash you’re not using for a down payment, and “put your money to work for yourself.”
I barely know where to start on this. Here’s one way of thinking about it: banks are not charities, and that they expect to make money from their loans. They have a cost of funds which is lower than the mortgage rate that you’re paying; the difference between the two rates is their profit. You, however, if you follow Linda’s advice, have a cost of funds which is your mortgage rate: if you wind up getting a lower return on your savings than you’re paying on your mortgage, you would have been better off just using the money for a down payment. Needless to say, if there was an easy way of getting a higher return on capital than the mortgage rate, the banks would have done it already, rather than lending you the money. And it’s pretty delusional, frankly, to think that you can invest better than say JP Morgan. Yes, there are tax benefits to having lots of mortgage-interest payments. But they’re not sufficient to make the difference here.
Here’s another way: let’s say you own your home outright. Would you take out a mortgage against 95% of your home’s present market value, and then invest that money in the market somehow, trying to “put it to work for yourself “? Of course not: you don’t have remotely that kind of risk appetite. Borrowing money against your house to invest in the market is, always, stupid. But that’s exactly what Linda’s proposing you do.
And here’s one more: shit happens. Sometimes, you end up needing money, in an emergency. If you’re already borrowing as much as you can reasonably afford, that’s a big problem. If you have a bit of fiscal breathing room, you’re much better off. If you end up in a situation where you’re in a position to put pressure on your banker to improve your loan terms lest you walk away, that’s not a good situation to be in. It means you’re broke. It’s something you want to avoid, whereas in Linda World it seems to be something to actively court.
Linda’s also convinced that house prices are going to rise: if you buy now rather than later, she writes, that means you’re buying “while housing prices are low.” That’s debatable — they still seem quite expensive, on some measures: the price-to-rent ratio, for instance, is still well above its historical average. And more generally, buying low doesn’t help you in the slightest if prices just continue to grind lower.
Linda’s conclusion is that “the less you put down, the better off you are.” Which is true so long as you keep on making all your mortgage payments without any problem, and nothing goes very wrong either with your personal economic situation or with the US economy as a whole. That’s the way that leverage works: it makes everything sunny, so long as things go right. And then it plunges you into misery when things go wrong.
The scariest part of Linda’s post, for me, is when she talks about how it’s a good idea to “do your best to leverage a small down payment into bigger equity.” It’s not the dollar amount of the equity she’s talking about here, it’s the leverage used to get there, and the higher the leverage the better off you are. Following that advice got us into our current mess. And taking it now is a recipe for disaster.
Meet Buddy Roemer, who hasn’t won an election since the 1980s and lost to America’s most famous neo-Nazi. McKay Coppins talks to the ex-Louisiana governor about his White House dreams.
Buddy Roemer is the kind of politician who likes to use your first name in conversation—a lot.
“That’s a good question, McKay!” he exclaims when I ask him why he decided to become a Republican halfway through his first and only term as governor of Louisiana. “You gotta stop asking these questions!”
Previous LA Gov. Buddy Roemer is considering running for President. Credit: Ethan Miller / Getty Images
Unfortunately for him, that will be one of the easier queries he faces in the coming months, as he tests the waters in a long-shot bid for the Republican nomination in 2012. Roemer hasn’t won an election since 1987. As governor, he became something of a state joke when he entrusted his emotional well-being to a new-age guru who instructed him and his staff to ward off negative thoughts by snapping a rubber band on their wrists and saying, “Cancel. Cancel.” And his only real claim to national fame is losing his bid for re-election to the statehouse in a primary to a veritable neo-Nazi. But today, none of that is preventing him from exploring a White House run.
“Thursday, I’m announcing an exploratory committee,” he says in a cheerful New Orleans accent, making him only the second Republican candidate so far to officially declare his intentions. (The other is pizza magnate Herman Cain.) “And then I will proceed to explore, to think through, to listen to people—I call them plain people—throughout America.”
It’s easy at first to dismiss Roemer as a kook—or, worse, a cynical opportunist looking to cash in a brief, buzzy presidential run for a future book deal or a cushy cable gig. But while his stated campaign strategy is hugely untenable—more on that below—he insists his intentions are sincere. And, well, maybe he’s telling the truth.
“Many will say that ‘he doesn’t have a chance,’ that ‘he’s not to be taken seriously,'” he says, pausing for emphasis and then lowering his voice. “Watch me, McKay.”
So far, Roemer’s platform is thin. He doesn’t have a lot to say about entitlement reforms or Middle East engagement. Instead, Roemer, who served seven years in the U.S. House, appears to be putting all his eggs in one basket, and betting that the message will resonate among populists in both parties. His target: something he calls “the money monster.”
“People are asking, ‘Why are you coming back?’ And I say it’s because there’s a need here. I am unimpressed and frightened by the money culture in Washington…
“Many Congressmen are auctioning themselves off for retirement. You have a health-care bill without any tort reform. I wonder how that happened. You have a financial-regulation bill that doesn’t require major banks to follow the same rules as every other company. Gee, I wonder how that happened.”
His bid to free Washington from the grips of the money monster will start with his own campaign. Roemer says he will refuse to accept donations from corporations, PACs, or special-interest groups, and that he will limit personal donations to $100 per individual. Slate’s Dave Weigel has already pointed out that such an approach to fundraising will make it all but impossible to raise enough cash to launch a credible campaign—but Roemer is ignoring the naysayers.
“I will declare my independence from the ‘all I want is access’ money,” he says proudly, insisting that this is more than just campaign window garnish. Indeed, he says, “I happen to think this is key to fixing most of the problems that are ailing America.” It’s a bold claim, and I press him to outline specific policy proposals that will solve the problem. At first he demurs—“That’s for future times,” he says—but then, as though the thought is just occurring to him, he offers, “When Congress sees the success I have with my own campaign, they will turn and say, ‘How did you do that?’ and ‘How does that work, and how does the Internet work?’ I’m not going to dictate to them.”
Robert Mann, a professor of mass communications at Louisiana State University, and a one-time reporter who covered Roemer when he was in Congress, says the politician has always relished being perceived as a "maverick." As a conservative Democrat, he was one of the first members of the House of Representatives to cross party lines and work with Ronald Reagan. And, later, as a governor hoping for re-election he switched parties because, Mann speculates, "he saw that the state's politics were trending conservative, and he thought it would be easier to be re-elected." (Roemer, on the other hand, insists he switched parties to add partisan variety to the Democrat-dominated state. He points to Gov. Bobby Jindal's election as a success made possible, in part, by his own political trailblazing.)
Of course, this independence comes with some baggage that may not smell so rosy to GOP primary voters. As governor, Roemer vetoed an anti-abortion bill because, he says, it "didn't do enough to protect the life of the mother." And he has a record of supporting environmental regulations that will surely be viewed with suspicion by the party's more adamant climate skeptics.
But while Roemer's maverick persona has a mixed track record of electoral success, Mann says he still has the intuition of a good candidate. "If there's a politician that could talk a bird out of a tree, it would be Buddy Roemer," says Mann. "There's a refreshing quality to his rhetoric, and a freedom that comes with not being beholden to any party."
There may or may not be more to Buddy Roemer than an entertaining 20-minute interview. But even if rhetoric's all he's got, he'll still have an important place in the 2012 primary. Namely: on the stage, drawing attention to every other candidate's dance with the "money monster."
McKay Coppins reports on politics and culture for Newsweek.
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