Chaotek Thoughts

Alexander Tytler once noted that democracy “can only exist until the voters discover they can vote themselves largess out of the public treasury.” While Tytler was referring to the decline of the Athenian Republic, the comment certainly reflects current events. In an effort to appease voters in a troubled economy, the Democrats and Republicans have come together in a rare show of bi-partisanship to give the American public $600 each during an election year…

Not wanting to be the party that said no to giving the public “free” money, Democrats and Republicans in Congress and the White House are working to expediently get money to the taxpayers to help avert an economic recession. Why, because they want to keep their jobs and buying votes from the taxpayers is a good campaign sound-byte. The problem is, it’s the wrong solution.

The problem with the current economy is one of greed. The mortgage companies, eager to cash in on the real estate boom, didn’t properly approve loans. They knowingly gave loans to people who couldn’t afford them hoping, like the home buyer, for a quick turn around on the loan for fast profit. The home buyers, also greedy for money, were all too eager to sign horrific loan agreements. Everyone, home buyers and mortgage companies knew that house prices were rising too fast and that it wouldn’t last forever. The problem with gambling, is that there is risk. Now people are losing their homes and mortgage companies are collapsing before our eyes. It may be cruel to say, but maybe they had it coming.

You see, back in the 80s and 90s, there was something called the Savings and Loan Crisis. Over 1000 lenders failed because of poor management, corruption, and risky loans. The government stepped, bailing out the industry with taxpayer money. Sound familiar? It’s because it’s happening again. The loan industry is once again calling on the government to bail them out.

So today the government is once again stepping in, making deals with the big mortgage brokers to hold off escalating loan rates and allow many of these home buyers an opportunity to refinance. I think that this was a smart move. It seems like a win-win for everyone. Mortgage companies don’t get stuck with overvalued foreclosures and people get to keep their homes. And it didn’t cost me or my unborn children anything.

But is wasn’t enough. Now our elected officials want to give about $600 to each taxpayer, costing roughly $100 billion in money that the government doesn’t have. While $100 billion might seem like a lot, the United States has a gross domestic product of roughly $14 trillion. That makes the combined $600 checks less than a 1% of 1% blip in the economy. Even more interesting, the government doesn’t want you to spend that money on debt. Instead, they want you to buy something expensive and unnecessary.

Here’s some facts about American debt:

• American consumers owe about $2 trillion dollars in debt
• Over a third of which is credit card debt ($700 billion)
• That’s roughly $20,000 per household (not including mortgage debt)
• Non-mortgage debt has increased more than 41% in the last 8 years
• 43% of American families spend more than they make each year
• Personal bankruptcies have doubled in the last decade

Perhaps the solution to the economy, is to deal with the credit/debt of Americans. Instead of increasing the national deficit with a check that will likely amount to little impact on the economy, maybe our elected officials can help the average American in a significant way. The deals made to limit interest rate explosion in the mortgage industry was a good start. Maybe start into the credit card companies next. The problem is too much credit is being given out, with the companies seemingly eager to cash in by skyrocketing interest rates when the consumer spends too much and can’t afford the payment. Maybe reduce the amount of credit people can have, as well as find a way to control interest rates. You still want to reward those with good payment history versus those with bad, but we don’t need to continue in the direction that we are going. I’m not an economist, so I don’t have the perfect solution. But I think that reducing personal debt and keeping the credit lending institutions from abusing consumers is a great way to get the economy back on track. Not only on-track, but much healthier. A $600 check might seem nice, but it is only a band-aid on a broken system.

For the second time in less than a decade, the elected officials in Washington are going to write Americans a check. Once we figure out that we can get a check anytime we want, the end of our way of life is in sight…

As the New England Patriots are enjoying a perfect normal season, there has been some talk of adding an asterisk to the record books, noting that controversy around the Spygate scandal which resulted from the September 9, 2007 game against the Jets in which the Patriots were caught cheating. Should the perfect season record be marked as questionable? In my opinion, that’s ridiculous. Either give them the validation of their accomplishment, or punish them with a forfeit of the entire season…

The concept of an asterisk next to a record seems to go back to Roger Maris, who beat Babe Ruth’s homerun record in 1961. As Maris was an unpopular player, who came out ahead of the fan favorite, yet injured, Mickey Mantle. Since 2 teams had been added to the league that year, 8 games were added to the schedule. The commissioner, Ford Frick, ruled that in order to beat Babe Ruth’s record, the homeruns should be accomplished in the same number of games. Otherwise there would be two separate records, one for 154 games, and one for 162 games. The concept of adding an asterisk to Maris’ record is an urban myth, but the idea has been popularized since then–including the 2001 movie 61*.

In October 2007, track and field athlete Marion Jones admitted to lying to investigators about steroid use. By December 2007, Marion Jones was forced to return all medals earned back to September 2000, including 5 Olympic medals. Considering that she never failed a doping test during those competitions, it seems questionable to me why she had to lose all of her past wins.

Seven consecutive time winner of the Tour de France bicyclist Lance Armstrong has been plagued with accusations of steroid use. Though never proven, there have been many calls for an asterisk to be added in the record books next to Armstrong’s wins, noting that the results are questionable. There have even been VERY questionable retests of urine samples from past races to try to disqualify the champion. If ever found guilty of cheating in a single case, Lance would likely be required to return all medals and would be removed from the record books.

At the 2000 Olympics in Sydney, Andreea Rãducan tested positive for the banned stimulant pseudoephedrine. During the IOC’s evaluation of the case, it was determined that the gymnast had used a common over-the-counter cold medicine which provided “no competitive advantage at the competition” and was given to the teen by her team physician. Though the Olympic Committee, Court of Arbitration of Sport, and International Gymnastics Federation all ruled that she was “an athlete who was innocent in this situation” Andreea was forced to give up her gold medal in the all-around gymnastics. Innocent, yet she lost her valid win.

Then we come back to the Patriots. Caught videotaping the Jet’s hand signals, the Patriots were faced with a massive scandal. While the taping could not have affected the outcome of the game, it does have potential impact on future games. It also raises the question of how long this practice has been going on? Could signal taping have been used to achieve other victories, including recent Super Bowl and playoff wins? If held up to the same standard as Olympic athletes, the Patriots could have been stripped of all recent titles and been banned for the rest of the season. Even worse, the coaching staff could have been banned from the NFL for years or life if held to the same standards as Olympians…

Instead the coach was fined $500,000, the team was fined $250,000, and they lost their first round draft pick. All and all, it’s a pretty light punishment in my view, as the financial benefits from a successful, even ill-gotten, season far outweigh the fines levied as punishment. While a first round draft pick may be strong, the Patriots were weighed as being the favorite for the Super Bowl well before the season started, due to some incredible pre-season trades. They should be sitting pretty good for many years, and one round of the draft in one year will hardly be noticed in the long run.

I don’t think that adding an asterisk is appropriate. It is the coward’s way out of a controversial situation. Either give it to them, or don’t. Consider the perfect season to be valid, or disqualify the season in its entirety. To add an asterisk to the record books invalidates the records.