Some people know what the hell they're talking about

Great post about why we're fucked right now.

Pay especially close attention to the videos at the end. Ron Paul knows what the hell he's talking about. I'm still reading a lot about the Federal Reserve and how exactly things work with it, which was intentionally made complicated to keep people from understanding how big a scam it really is. Keep in mind, the Fed was created by a bunch of bankers on Wall St because there was too much good competition in the banking industry for Wall St to keep its power over the financial sector. This total meltdown of our financial system is almost 100 years in the making.

For once it's not Bush's fault

Anyone that starts screaming about how this nice little financial mess we find ourselves in was caused by Bush is an idiot. The seeds of this collapse were sewn in the early post-war era with the creation of the Fed, the FDIC, and the creation of all the Federally insured mortgage companies because 'everyone should be able to own a home'.

The Fed sets the percentage of a bank's deposit that must be held on hand at any time. The rest of the money may be lent out for the bank to earn interest on. Because banks, and other Federally insured operations, have the insurance of the FDIC they are protected if they become insolvent. Now, these financial institutions all pay the same rates to the FDIC for this insurance regardless of their performance or risks. This allows banks to be as reckless as they want with how they loan their money out, as they will be covered by this insurance if they fuck up. So what you have is no discouragement to these people to make lots of risky investments that have the potential for high returns. As many other mortgage brokerages did in recent decades, they made a habit of giving out very risky mortgages that would lead to really good returns if there was no default on the account. Because of this, housing prices were artificially inflated which led to riskier loans and so on.

Fast forward to today, where all these risky investments are going south. Now everyone looks for the Fed to bail them out. Keep in mind that the FDIC only has enough money on hand to cover $50 Billion of the $1 Trillion of insured assets. So the government is subsidizing restructured mortgages for people (tax-payer dollars), nationalized Freddie and Fannie which shifts liability for these companies to the taxpayers, the FDIC pays out for the insured accounts, and the Fed has to come to the rescue when all else fails to keep these companies solvent. That usually means the Fed (the "Lender of Last Resort") allows the insolvent bank/firm to offer tax-free bonds, which the Fed then buys with newly printed money (inflation). Through all of this, the people that suffer are investors and tax-payers, while the owners of the banks/firms are shielded from too much, if any, loss. And this is happening across the board in all financial industries right now.

The one sane proposal I have seen to remedy the horrible way our system is setup is to make payment into the FDIC insurance protection fund entirely based on the firm's risks in their investments. You pay more if you perform more risky lending. It would probably be the simplest way of regulating the whole thing.

Then of course there's the issue of continuing to support the Federal Reserve, an entity that does not answer to Congress but prints money at its leisure. (Note: It is unconstitutional for anyone but Congress to coin money) However, the issue of central banking and the crooks that created the idea is for another day.

Market forces work

despite what lots of different special interest groups would like you to believe. For years now, Americans have been living in a fantasy world where they have some inherent entitlement to cheap gas. This has led to the prevalence of gas chugging SUVs and a continuous, rapid exodus from city living to suburbia, "The American Dream". This shift was also helped (and possibly begun) by the changing of zoning laws during the mid-late 40's, post-WW2. During the war, zoning laws were put into effect that segregated commercial and residential structures, and this was continuing trend for years. That did a lot to help decentralize our population, and that was one of the most detrimental things to happen to our society.

Today, gas prices are averaging almost $4 a gallon across the country (I can find gas in Hennrietta for $3.59 as of yesterday). This has brought gas prices, and energy in general, to the forefront of American consciousness. Thus, it has become a major topic for our useless sacks of... I mean our politicians. There has also been a huge drive, due to higher energy costs and the onset of global warming consequences, to switch our country to cleaner energy production methods. The solutions we keep hearing about these topics just show how good the federal government has been at manipulating the population to be completely dependent on them. Every solution is some new government tax on company profits, excise tax holidays, cracking down on speculators (as if that's even possible, considering many of them are out of US jurisdiction), tax incentives for green energy, mandating green energy production, and the list keeps going. How about the solution that doesn't involved us collectively chugging from the government's corrupted teet? Let the market do its thing. Yes, people in this country have the quick-fix mentality ingrained in their consciousness, but if you think to the future just a little bit, you'll see that you can actually rely on the market to make corrections for you. Prices are rising? Guess what happens in economics when prices rise? Demand will drop in that market, and will increase in a different market. People will find alternatives. It's a collective pipe-dream that we should all be allowed to drive our behemoth SUVs everywhere without regard to our actions while the government does whatever it needs to do to keep our irresponsible way of life going.

Over the past few years there have been no government mandates taxing profits on oil companies, nor have there been mandates on the auto industry to stop conspiring to keep alternate technology cars off the market, and what has been the result? The market took care of it. GM and Ford, and Toyota with their focus on pickup trucks, have been desperately trying to retool and shift their focus away from gas-guzzlers as demand for SUVs and other large vehicles has plummeted. Americans are drastically shifting their transportation habits. In March we cut 11 billion miles nationally from our total vehicle miles traveled. Car companies can't even come close to pumping out hybrids fast enough to meet demand. Freight companies are mandating their truckers to drop from 70mph to 63mph on highways, increasing their mileage from 4.7 to 5.6 miles per gallon (that comes directly from my uncle, who has been driving trucks for 30 years). Public transportation, which is woefully inadequate in this country, especially in the northeast, is seeing a spike in passengers. Syracuse has started adding more bus routes, and I think Rochester will be doing that soon, too. Couple this with the mortgage crisis and you see a flood of people moving from suburbia back into the cities. This is most prevalent in California where you are now seeing ghost towns where people used to live in their McMansions.

Yes, I completely agree that the energy crisis in this country sucks. But it's a crisis of our own doing. It was brought about by our short-sightedness, our feeling of entitlement, a callous arrogance we have, and an ignorance most of us share about how our actions impact the world. America needs this crisis because it is the only way to shift our culture over to one with a more sustainable way of life. Americans can be tough and resourceful, we just prefer not to be. Well, the world is giving us a wakeup call right now.

Here's hoping for an STI that runs on hydrogen one of these days....