My Side of the Fencepost
September 24, 2008
It will be a bitter pill
By Jim Dickerson
I apologize in advance for the dire tone of this column, but I’m upset about the current mortgage banking crisis. The fact is that some of our top government leaders, regulators and Wall Street executives should have seen it coming and didn’t — or else they did see it coming and failed to act in a timely manner.
The more you read about the “subprime mortgage crisis,” the more difficult it becomes to pin the blame on any single entity. As usual, there is plenty of blame to go around.
Those who know the system and have given the subject some thought will usually say that a number of factors, all happening at the same time, caused this investment banking crisis.
It’s important to remind ourselves that “investment banks” like Lehman Brothers are quite different from most commercial banks operating in our local communities. Their main business involves the sale of stocks and bonds to raise capital.
Our commercial banks are well regulated and insured by FDIC to guarantee that our deposits are safe. They don’t take the same kinds of risks.
Anyway, back to my take on the mortgage crisis in layman’s terms. Most analysts aren’t blaming a lack of regulation, but many are blaming federal policies that created a more risky lending environment for investment banks, sometimes creating pressure on them to make loans to borrowers who may not have been stellar credit risks.
At the same time, the housing boom was underway in the U.S. Interest rates were low and home prices were escalating. There was fierce competition between lenders to make loans in a market where values seemed to be going nowhere but up.
New tools called Adjustable Rate Mortgages and even Subprime Mortgages were created. Apparently, in many cases, these tools allowed borrowers to buy more house than they could afford.
In the case of Subprime Mortgages, when credit tightened and interest rates increased, a relatively large group of homeowners found they could no longer make their payments. They couldn’t refinance to a fixed rate loan, and housing demand declined with tighter credit. Falling home prices meant that many could not sell their homes for enough to repay their mortgages. That caused an increase in foreclosures.
Investment banks with large holdings of packaged loans were then in a tough spot. Their asset base was declining with the real estate market, and they had a big liquidity crisis.
Many other factors were thrown into the mix — not the least of which was a new “fair value accounting” method that valued assets at their price in the current market instead of their true economic value.
To shorten a long story, the government took over Fannie Mae and Freddie Mac, and a short time later announced the largest government bail-out in U.S. history to (hopefully) keep the investment banking industry solvent.
What will this multi-billion dollar bail-out mean to us in rural Nebraska?
That’s an interesting question. No one knows the full magnitude at this point, but it will have an impact. Anyone who has retirement savings in mutual funds likely already owns a piece of the investment banking pie and therefore will feel the effects.
The one thing I am fairly certain of is this: The simple fact that the federal government is dedicating hundreds of billions of dollars to the bail-out (and thereby to the already huge federal deficit) will devalue our currency. Our dollar will be worth less in future years because of this debacle.
It doesn’t take an advanced degree in economics to realize that a devalued dollar is inflationary. It will take more even more dollars to buy the goods and services we require in the future.
President Bush and Congress have had to choose the lesser of two evils and proceed with the bail-out, because this crisis likely could have triggered even worse consequences without it.
Either way, this is a very bitter pill to swallow while some of the aforementioned Wall Street executives enjoy their multi-million dollar bonuses dating back to those “good years.”
Molly’s Musings
September 24, 2008
Chicken Soup does soothe the soul
by Molly Young
Chicken noodle soup for the soul. It’s a bit cliché. But, I discovered, completely true.
My friend was sick last Wednesday. He was miserable: he could hardly talk or breathe during our short conversation that day.
I told my roommate, who quickly quipped, “Let’s make him some chicken noodle soup.”
Homemade chicken noodle soup, we hoped, cured any sickness.
Four hours and $14 worth of groceries later - we redeemed a coupon for a free rotisserie chicken - we gathered the ingredients. Noodles, carrots, onions, celery, broth, chicken and spices covered the countertops.
We used my grandma’s recipe: a list that called for a pinch of this and a stalk of that. Three carrots. One medium onion. A bay leaf. Heat the broth. Simmer the vegetables. Cook the noodles. And add the chicken.
Soon, the warm, spicy aroma of chicken noodle soup filled our duplex and lingered in the air. For the safety of our friend, or perhaps because the temptation was too strong, we each had a bowlful of steaming soup. The chicken, the vegetables, the noodles - the ingredients combined to fill our stomachs and our hearts. The soup was safe to eat.
We poured the remaining soup into a plastic container, grabbed a baggie of fresh-baked cookies, and drove across Lincoln to our friend’s house.
Our hope was confirmed: the soup - which I thought would surely last a few meals - was gone 15 minutes after walking in the door. A “thank you” came with each bite.
He wasn’t healed instantly; in fact, he didn’t feel fully well until a few days later. The coughs and sneezes were still there. But the misery was gone, dissolved with the last drop of soup.
Chicken noodle soup for the soul. His wasn’t the only spirit lifted that night, either. After a long day of classes, the healing power of carrots, celery and pre-cooked chicken was hard to deny.
Chicken noodle soup soothes the soul, even if it is a cliché.
Molly’s Musings
September 11, 2008
Bringing back the ‘heart’
By Molly Young
A large scarlet “N” painted across her cheek, the woman walked past me wearing a red shirt with white lettering. At first glance, she looked much like the 80,000 other fans filtering into Memorial Stadium. Then I read her shirt.
“My ‘bofriend’ is back in town.”
And what a welcome her “bofriend” received.
In his two games as head coach of the Nebraska Cornhusker football team, Bo Pelini has transformed the Huskers beyond adding notches to the “win” column. Pelini has restored a sense of tradition, the foundation of Husker football and a concept his predecessor never seemed to grasp.
Admittedly, Saturday’s game versus San Jose State was a little shaky. And there were some interceptions during the season opener versus Western Michigan. But, I am not a sports writer, nor will I ever be. I don’t really care who missed a tackle or who dropped the ball. Repeat: I am not a sports writer.
But I do know one thing. Husker football is, and always has been, about the team - the ritual of the Tunnel Walk, the unity on the field and the support of the sidelines.
Hartley Burr Alexander’s words, carved in stone above an entrance to Memorial Stadium, describe the true meaning of Husker football. “In the deed, the glory.”
Victory is desirable, but the true glory comes from effort and hard work.
As Nebraskans, this concept flows through our veins. The appeal of Husker football is not based on wins and losses. Instead, for five hours every Saturday, Nebraskans set their differences aside. Superficial things become meaningless, and society’s boundaries are broken. For a few hours a week, Nebraskans are one.
The gritty details really don’t matter. In five years nobody will remember the specifics of every game. What people will remember, however, are the pits in stomachs forming right before kickoff, the Midwest’s Red Sea engulfing the field, and the instantaneous roar erupting after touchdowns. These things are hard to forget.
Our “bofriend” came home, and he brought back the heart of Husker football.
Perspectives
September 11, 2008
An Obscenity . . . .
By Paul Hosford
For months, the Democrats complained that the media was biased against Hillary Clinton, to which the Republicans scoffed. Now Republicans are beginning to resent the media’s treatment of vice presidential candidate Sarah Palin. As one woman put it: Women, regardless of party affiliation, are treated as “second-class citizens” by the national press.
Women have for a long time felt they’re treated like second-class citizens. Women have made great strides in the past century, but still face many biases and obstacles. Women can point to the fact that they still receive less pay for the same job as a man, that the proverbial “glass ceiling” preventing them from reaching upper management still exists, and that they are a distinct minority in elected state and federal offices. At home, women still do most of the cleaning and cooking, and still do most child care tasks.
Societies are considered more liberal or conservative depending on a number of factors, including the status of women. As challenging as women find it in America today, especially when compared to certain liberal European countries, women are facing much worse conditions in more conservative parts of the world.
In July for example, five women from Baluchistan, a province in Pakistan — three of them in their teens — were beaten, shot and buried in a ditch while still alive. Why? Were they mass murderers, child molesters, members of the “Democrat Party”? Not exactly.
They were guilty of something worse. They all wanted to choose their own husbands, to marry for love. In the Baluchistan province of Pakistan, as in many other parts of the world, women have no choice in such matters. Like Mormon polygamists in this country, marriages are arranged by families and usually involve pairing a young girl with a much older man.
The Pakistani Parliament, not exactly noted for its liberal-mindedness, took notice. When the Baluchistani representative addressed the flabbergasted assembly, he bluntly told the other members to accept it as a part of his people’s traditions.
He said that such traditions help stop obscenity.
The Nazis were fond of burying people alive. They would force prisoners, often Gypsies or Jews, to dig their own graves and then make other prisoners bury them. They would later dig the victim up just so other prisoners could see the incredible agony still etched on the dead person’s face.
One can only hope that the five women in Pakistan were near enough to death that they didn’t suffer long after being buried.
And it goes without saying that the obscenity here was the attack on these women. Defending it was just as obscene.
It boggles the mind how anyone could subject anyone else to such inhuman behavior. It is the stuff of horror movies, where psychopaths massacre pretty girls. It seems inconceivable that entire societies could engage in this sort of behavior — it’s as if movie villains Jason and Freddy were running societies like Baluchistan‘s.
There are those among us today — many would say in the media — those who still seem to resent the strides women in this society have made. Just down the road in Columbus, there’s a religious sect that requires women to wear drab grey dresses and walk several steps behind their husbands. Fortunately, not even the most conservative members of our society would ever dream of treating women the way Baluch tribal people do.
It is encouraging that two women are now on the forefront of American presidential politics, and although neither is in contention for the presidency, both wield considerable influence. One can only hope that as women’s voices continue to grow stronger, the societal problems all women face — both here and abroad — will gain greater attention and much-needed improvements will continue. The U.S. has sent $5.8 billion to tribal areas of Pakistan alone since 2001 ($10 billion in total aid). All Americans, but women especially, should demand that as a requirement for this sort of funding, the abuse and killing of women must stop.
Women play a vital role here in Albion. From retail businesses to banking, health care to education — not to mention homemaking — women are working hard to keep our community going. I would like to invite my readers — as well as my fellow contributors to this editorial page — to share their thoughts and concerns about the progress women have made, missteps that may have been taken, and the challenges they still face, locally, nationally and internationally.
My Side of the Fencepost
September 11, 2008
Two sides to the budgeting coin
by Jim Dickerson
The budget-making process is one of the more interesting aspects of local government, but as I’ve learned through many years of covering budget hearings — they attract very little public participation.
It could be that we just like our easy chairs too much, or it could be because we need the rest from our busy work schedules.
In any case, there is usually very small attendance at budget hearings. And it’s too bad, because these hearings can be educational. The current string of budget hearings fits that description.
This year, according to the proposed budgets we published last week, property tax revenues will be increasing substantially for the county, city and Boone Central Schools.
As also previously reported, valuations are going up substantially for all three governmental subdivisions, ranging from 17.9 percent for the county to 22 percent for the school district and 97 percent for the City of Albion. Much of that valuation increase comes from the ethanol plant personal property, and the gains will be reduced quickly over the next five years by depreciation of that personal property.
But not all of the valuation increase is coming from the ethanol plant. A share of it comes from various farms, ranches, businesses and individuals.
The county budget, approved Monday, includes a $383,598 increase in property tax revenue — yet the tax rate will decline by a fraction.
The city’s proposed budget (hearing held Tuesday night) increases property tax revenue by $208,428 while maintaining the same tax rate as the past four years.
Boone Central School District’s proposed tax levy will decline by about 3.3 cents for 2008-09, but the school district will still be increasing its total tax revenues by $827,494 as compared to last year.
Now, I’m not saying that there is no justification for those revenue increases. It takes money to accomplish things like infrastructure and facility improvements, and to improve government services. There are reasonable arguments in favor of increasing revenues while the opportunity exists, but there is another side of that coin.
I really haven’t heard yet from many taxpayers who might want to say: “Hey, wait a minute! How about more of a break for us taxpayers while the opportunity exists?”
There’s room for that kind of argument, too.
Some questions for T. Boone
With debate well underway on the T. Boone Pickens plan for energy independence, we need to have much more discussion on the obvious issues: How, and at what cost, does America build a practical network of fueling stations to provide the compressed natural gas to power the majority of our vehicles? Compressed natural gas is cheaper than gasoline, but will it be practical to convert existing vehicles to use that fuel source? How long will it take to accomplish these changes, and at what cost?
My Side of the Fencepost
August 27, 2008
The season of ‘spin’
By Jim Dickerson
Just a word of warning. We’re going to hear a lot of “spin” in the next three months.
It is a relatively new term for efforts to accentuate the positives and downplay the negatives of any given situation, event or issue (positive spin); or, used in reverse, to accentuate the negatives and downplay the positives (negative spin).
I believe the term started to become widely used during the political upheavals of the 1970s and 80s. Political consultants became known as “spin doctors.” A rock group named Spin Doctors was also formed in the 80s.
We have always had “spin,” but it wasn’t always called that. Any time there are two sides to a debate, both sides will obviously try to accentuate their strongest arguments and downplay any rebuttals.
The term “spin” shouldn’t necessarily be considered a negative, but we should recognize that it is present in every argument. We hear it every day.
T. Boone Pickens was obviously using it on a recent trip to Nebraska to sell his plan for achieving U.S. energy independence. In the main points of his argument, he advocates large scale development of wind energy, along with converting all of our vehicles to run on natural gas.
He gives us some food for thought in the national debate over energy, but his argument includes mostly what he wants us to hear. We should consider the suggestions of Pickens as part of the bigger picture, and we should look at where he’s coming from. He is already a big player in the natural gas industry and has plans for a huge wind farm in Texas. He also has a proposal to pump water from the Ogallala Aquifer in Texas to serve the growing water demands in Dallas.
Pickens stands to benefit if the nation adopts his plan.
With the presidential campaign heating up and the Democratic Convention underway, we are hearing spin every time we tune in.
Personally, I thought Michelle Obama gave an excellent speech Monday night in support of her husband’s candidacy. It obviously included her own spin on their family history, Barrack Obama’s qualities and the campaign issues. The quality of her presentation — spin and all — leads me to believe that Mrs. Obama could have a bright political future of her own if she chooses to pursue it.
Molly’s Musings
July 10, 2008
Visiting Ground Zero and Remembering
By Molly Young
The wooden flute’s notes split the sticky city air.
As I stood on the busy sidewalk, I joked about the selection: “My Heart Will Go On.” The Celine Dion love ballad was quite different than the flutist’s previous performance of South American songs.
The small town square near Wall Street paid little attention to the musician. Vendors peddled their fares: “Crystal figurines: 2 for $10!” “Roasted Chestnuts: Best in the City!” A tow-headed toddler chased pigeons into the fountain. Tourists with instant smiles and arms thrown over one another posed for a group picture.
Taxis whirred. Hot dogs sizzled. Pedestrians chatted.
I breathed deeply and inhaled the scenery. New York City was alive.
I continued walking; floating along with the resonating tune until reaching a construction zone. Chain-link fence reached into the air. Signs marked the zone as a “Hard Hat Only Area.” Suddenly, the noise - the traffic, the food, the people - stopped, and time stood on edge.
Music shattered the silence.
“Near, far, wherever you are…”
The words resounded in my mind. Tears welled in my eyes. This was no ordinary construction zone.
“…I believe that the heart does go on.”
This was Ground Zero.
Beside me, a father explained to his three young sons, “This is where the bad guys flew planes into a building seven years ago.”
None of the boys - dressed in matching navy blue New York City T-shirts - were born yet, I told myself. They will read about September 11 in history books. They will memorize numbers, locations and perhaps even names.
My generation, my parents’ generation, and my grandparents’ generation, though, need no visual aids or history books to remember 9/11.
Much like my grandmother Muriel Young recalls listening to President Franklin Roosevelt declare December 7, 1941, a “date which will live in infamy,” I remember everything about September 11, 2001.
There, standing in front of a chain link fence, I closed my eyes. Science. Second period. Movie about volcanoes. Interruption. “Class, two planes have just flown into the World Trade Center in New York City.” Confusion. “What? Was this a mistake?” Pre-Algebra. Third period. Another plane crashed in Pennsylvania. Another hit the Pentagon. Industrial Tech. Fourth period. “Thousands perished this morning.”
I grabbed the cool metal wire. Music pounded in my chest.
“…I believe that the heart does go on.”
Perspectives
July 10, 2008
Independence Day
By Paul Hosford
The trouble with never throwing anything away is that sooner or later you run out of space for everything. Save things over a span of generations and it can really get crowded. While waiting for fireworks on the Fourth, I decided to sort through an old suitcase in hopes I could throw it away. It turned out to contain papers, photos and one old table knife that had belonged to my great aunt and uncle.
It was fascinating to go through. He passed away in 1963 and at the top were bills he’d paid shortly before his death. Their natural gas bill had been $5. Property taxes for their farm were $337 - today they’re $2,947! The sale of their farm equipment had netted them about $1,200.
Moving deeper into the pile carried me backwards in time. He stopped farming with horses and bought a 12 horsepower Allis-Chalmers “C” in 1949 from Warner Farm Supply, Phone 17. The tractor cost $1,174 and a mounted 2-row lister $225. Today you could multiply those prices by 100.
There was a card for a businessman in “Habana, Cuba” from before Castro’s revolution. Then there were owner’s manuals for a 1960 Chevy and a 1954 Crosley TV, both of which were still in use far into my childhood; directions for a hearing aid built into a set of horn-rimmed glasses and instructions for a trick card deck that enabled my great-uncle to cheat without getting caught.
There were lots of old black and white photos. Some faces were familiar, but most were not. None had names, but a few had dates: August 1944, October 1941, Thanksgiving Day, 1938.
Near the bottom of the suitcase was a set of hand-written directions on how to tame a wild horse. It concluded with the simple observation that if you love the horse, the horse will love you. It was dated 1872, 15 years before my great-uncle’s birth.
There were also copies of two sale bills from pre-Civil War Kentucky. One began “Having sold my farm and am leaving for Oregon by ox-team…” and goes on to list what the farmer is leaving behind. Two cows and a mare, two yoke of oxen and an iron plow, 1,500 fence rails, a 60-gallon soap kettle, 10 gallons of maple syrup and a barrel of 7-year-old Johnston-Miller whiskey. He was also leaving 12 pitchforks, 2 spinning wheels, 30 lbs of tallow and a figle (?) with bullet molds and powder horns, along with six fox hounds, “all soft mouths but one!”
As an afterthought were listed “6 negro slaves, 4 men, 2 boys and 2 mulatto wenches.” Mercifully, they were to be sold “all together to one party as will not separate them.”
The second sale bill was dated Sept. 26, 1859. It was for a farmer moving from near Harrisburg to Missouri and started by listing “1 Buck N—– 25 yrs. Old wt. 219 lbs. 4 n—– wenches 18 to 24 years old. 3 n—- boys 6 years old.” It went on to list oxen and carts, whiskey jugs, “2Bbl saur kraut” and 2 tons of tobacco. Oh, and “1 extra good n—– whip.”
I suppose one must be prepared for anything when looking into the past…
I want to think that these sale bills didn’t involve anyone in my great-uncle’s family, that they were copied and preserved as a window to the past, but who knows? His family did come to Nebraska from Missouri, so the second sale bill (which doesn’t list the seller’s name) might have had a connection to his family.
I hope not.
Somewhere the descendants of those slaves sold at auctions in Kentucky, like the descendants of all slaves, struggle to come to terms with the lives their ancestors led. But to the rest of us, slavery is a wrong that happened long ago and righted by the Civil War. We intellectualize it today, like the Crusades or the Black Death. But stumbling on those sale bills and reading about those poor souls being sold like they were oxen, made slavery much more real to me.
Independence Day marks a milestone in human history, but July 4th, 1776, meant nothing to slaves, and we would do well to remember that Americans did not become free all at once. Independence has instead been an on-going process — a process that must continue until men, women and children everywhere are at last free.
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