FYI to the fam: I am going to be on the Mike Gallagher Show Friday morning at 10:30 am EST. I don't know much about this guy, but apparently, he is one of the top 10 hosts in the country. The show likely comes on in your city (whatever station the conservatives appear on, I don't listen to them). Monday, I am going to do some commentary for The History Channel on Black Leadership. I'll keep you posted on when that is going to come out.
As I work with my Finance students (you are welcome to hang out with us on our blog at www.DrBoyceFinance.wordpress.com), the economy has been on my mind this week. So, I have shared some thoughts on Financial Leadership in the article below. As I've communicated in the past, strong Financial Leadership in the Black community is the most efficient way for us to fulfill Dr. King's dream. Equality will not come from Capitol Hill....it will come when we have Capital to pay the Bills.
Crash and Burn 101: A Finance Professor’s Take on Our Economy
By Dr. Boyce Watkins
www.BoyceWatkins.com
The United States is respected throughout the world for its powerful economy. We are also, unfortunately, becoming known for our arrogance and financial irresponsibility. During my tenure as a Visiting Scholar with the Center for European Economic Research, one of my colleagues could not understand why American consumers earn more than Germans and pay less in taxes, but have savings rates less than 20% of the average German citizen. Basically, there is a degree of irrational overconfidence and financial carelessness that comes from never having to experience a deep recession first hand. This explains why most baby boomers are not ready for retirement, and why young people spend and borrow like drunken sailors.
American consumers aren’t the only pilots in our crashing economic airplane. U.S. Monetary policy, headed by Federal Reserve Chairman Ben Bernanke, is both art and science, and the apparent success of Alan Greenspan has forced any subsequent Fed Chairman to become a Financial Da Vinci. The saddest part of the Greenspan era, however, is that his choices in the 1990s caused major “speculative bubbles” (inflated asset values in homes and stocks) that have started to burst at the end of this decade. Our leaders create and dictate policies that impact the choices of companies and consumers. Financial leadership has taken the American consumer on a frightening ride, and this is only the beginning.
The US economy saw its financial chickens coming home to roost in 2008, as the recent recession and market downturns have been predicted for years. These “financial chickens” included excessive spending by American consumers, mixed with irresponsible borrowing and lending on the part of both individuals and banks. Personal responsibility is thrown out the window when discussing wealthy and so-called “mainstream” Americans, as financial leaders are called upon to bail out the banks, the consumers and everyone else.
The government bailout package for 2008 has, thus far, included a massive spending bill, one that featured tax refunds and support to help consumers keep their homes, even if they were the causes of their own demise. Another set of “financial steroids” being employed have been the strong and consistent cuts of the Federal Funds rate by Federal Reserve Chairman Ben Bernanke. Bernanke has become known as “Bold Ben” by members of the media, who are consistently stunned by the Chairman’s massive and powerful attempts to control the economic downturn. The latest moves have included the $85 Billion dollar bailout of AIG, an insurance company that has apparently been deemed “too large to fail”. If only our government had the same compassion for the thousands of small businesses across America struggling to find capital to meet short-term financing needs.
Republicans, known for being fiscally responsible, have created budget deficits our country has never seen. Between the Iraq War and the 2008 recession, spending continues to go up, even when tax revenues are expected to go down. The ready availability of additional government borrowing to support our massive spending bills has our financial leaders behaving like teenagers in possession of a “really awesome” American Express card. Like the “blinged out” athlete who thinks his wallet will never be empty, our country may wake up to a grave financial nightmare.
Continuously cutting interest rates may provide additional stimulation to the economy, but the problem is that cutting interest rates, allowing the value of the dollar to slide and frivolous government spending is a recipe for serious, horrific and uncontrollable inflation. Inflation is a Pandora’s Box that doesn’t close nearly as easily as it opens. You think the economy is bad now, you haven’t seen how bad it can get in the face of stagflation (a declining economy with out of control inflation). It’s hard not to feel that “Bold Ben” and “Big Bad Bush” aren’t gambling with our children’s futures and current taxpayer resources.
Sometimes, when you party too hard, you are forced to deal with the hangover. Americans have been blessed with a financial celebration that has lasted over a decade. For the past 15 years, we drank straight out of the liquor bottle and danced with lamp shades on our heads: not saving effectively, spending like crazy and borrowing to cover our financial insanity. But rather than simply allowing the party to end and letting everyone sober up, our financial leadership has taken on the irresponsible behavioral norms of American consumers. Their excessive rate cuts and spending increases have kept us pumped up on Financial Dope in order to avoid the impending crash.
This is not solid financial leadership, and something has GOT to give. Hopefully our leaders will get it.
Dr. Boyce Watkins is a Finance Professor at Syracuse University and author of “Financial Lovemaking 101: Merging Assets with Your Partner in Ways that Feel Good.” He is a regular commentator in national media, including CNN, CBS, NBC, BET and ESPN. For more information, please visit www.BoyceWatkins.net or DrBoyceFinance.Wordpress.com.
13 comments:
I tell ya Boyce. This is a great country with a lot of potential, but I don't know if I have faith in our future. All these years of over-investing in consumption and under-investing in education and our public school system has created a bunch of idiots. I mean, American's on average are 2 IQ points away from mental retardation. What's worse is most of those mental lightweights are in Washington running our country into the ground. I say we start dealing out the death penalty to some of these folks on Capital Hill until they act like they have some sense...who's with me?
For example, why have we allowed Bush to remain in office without even attempting to impeach him? He and his administration blatantly lied to the people. The last president who did that got impeached over some BS. So a President can't lie about getting some dome, but when you lie about a war that has cost us billions, thousands of lives, and possibly our standing as a world leader, we leave you alone? There's a word for that...retarded. Frankly, we deserve all this bad shit that's going on...maybe we'll wise up and learn something.
And get this...The Department of Energy budget is around $20 billion, while the Department of Defense is around $600 billion. So rather than increasing the energy budget to become energy independent, we're willing to spend 30 times more trying to secure oil that's going to run out anyway. Don't tell me that alternatives are "too expensive" when we're spending over half a trillion dollars on weapons and wars that don't create any productive assets. I work in the alternative energy industry, and I know for a fact that we could become energy independent in 10 years if we took even half of that war money and spent it on energy.
I'm going to learn Portuguese and I'm moving to Brazil
Mike Gallagher is a racist.He's worst than Oreilly. He still calls Sen.Obama ,Hussein.he plays minstrel shows on his program.
Plays Minstrel Shows on his program. Can you back that claim up? If you can, I would be very interested in seeing what you have... I knew there was something strange about that man.
Too simplistic and too bad you would subscribe to this type of reporting this complex and serious situation.
"the Sarah Palin you tube video you had might have been a Trojan horse to ambush you.Watch out. He's a real Asshole, seriously."
My sentiments exactly. Unfortunately Boyce fell for it hook, line, and sinker. Put that degree to work son and try not to get hoodwinked next time!
actually the guy's story on the sarah palin thing might be true. They are refusing to take a dna test to prove that he is not the father. Boyce never said he believed it. But I do.
"actually the guy's story on the sarah palin thing might be true. They are refusing to take a dna test to prove that he is not the father. Boyce never said he believed it. But I do."
Thats not saying much. Niggas will believe anything these days.
I just read that CNN is still working to confirm if the brother is Palin's baby's father. So, apparently, they are gullible too. I love it how white people automatically believe each other.
"I just read that CNN is still working to confirm if the brother is Palin's baby's father. So, apparently, they are gullible too. I love it how white people automatically believe each other."
Please provide a link. Oh...don't bother there isn't one.
"I love it how black people automatically believe each other."
Sound familiar fool? ;)
If a man says that he is the father of a child, and the mother refuses a DNA test, that makes his word as good as hers.
"If a man says that he is the father of a child, and the mother refuses a DNA test, that makes his word as good as hers."
Ok I'm saying that you are my son/daughter. Tell your mom that I want to be acknowledged as the father. Do you see how stupid you sound now???
It would be equally stupid to assume that you're automatically lying, particularly if you are able to provide detailed information, as the young man did in his video.
Believe what you want to folk...
Post a Comment