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America Must Not Allow Me to Fail
Insolvency in the financial sector is threatening America's economic future. Blogger / economist / consumption expert Dave Burge explains why the Fed must act now to stabilize our most critical financial institutions, such as Dave Burge
America's economic engine: Dave and friends
When it comes to bad economic news, "when it rains it pours." For instance, after the latest dismal national inflation and employment numbers were released last week, I received another repossession notice from Coralville Yamaha. In order to protect my family and my beloved dirt bikes from the approaching financial storm, I invited my colleagues Chuck and Randy over to help me torch the VIN numbers off the frames.
Long story short, acetylene torches, weed, and Jager shots are not a good mix. Later that night when we were waiting in the emergency room, the CNN guy on the TV started talking about the various financial problems at Fannie Mae. I was shocked and worried when I heard this, but I though, hey, there's always Russell Stover or Whitman samplers. But it turns out that Fannie Mae not only makes delicious chocolate gift boxes, they are the largest consumer home lender in America!
The TV guy also said that the government would have to step in with money to save Fannie Mae and Freddie Mac. Like many of you, my first thought was, "why the hell does that guy need money? Doesn't he have a sitcom on UPN?" But the more I thought about it, the more I realized that our economy is a complex web of interdependent players, and if one is allowed to stumble it will eventually result in a "domino effect," causing our entire economy to crash. For example if Freddie Mac fails, he will be followed by Tyler Perry, then Steve Harvey, then Cedric the Entertainer, and before you know it the whole Def Comedy Jam tour has been canceled.
It's useful to think of our current economic situation as a spirited game of nude Twister, with Fannie Mae as an extremely fat drunk chick. One unanticipated "Left Foot Blue" spin could mean a trip to the emergency room for all of us, not to mention uncomfortable explanations for our various wives. It is critical that Congress makes sure that Fannie Mae gets the additional "do over" spins necessary to keep her from crushing us on the vinyl.
I know what you're saying -- "who invited the fat chick to the Twister party?" Certainly, all of us (with the possible exception of Randy) wish she wasn't here. But it's important to remember that fat chicks are often an important source of party supplies, and we must take the good with the bad. In the same way, Fannie Mae supplies the critical financial weed and beer to keep our national economic party going.
The numbers are complex, but let me boil it down for the economic layperson. Fannie Mae is a government company type thing that has a large pile of money, which I will call "A". The first thing it does is create $20 million bonuses for high performance executives like Franklin Raines, James Johnson and Jamie Gorelick, which I will call "B." Next, it allocates an amount "C" to lobbyists to make sure important Congressmen always get a thoughtful holiday card from Fannie Mae. After subtracting B and C from A, they are left with D, which is lent to homebuyers. These homebuyers then pay back the amount E, which, when subtracted from D, leaves F, the amount Congress has to come up with. In order to keep this important financial system humming along at peak efficiency, it is necessary that you, the taxpayer, are F'ed.
Clearly, in order to avoid a national economic catastrophe, Congress must act now to keep Fannie Mae afloat. But this only addresses part of a greater threat arising from looming financial instability in what I like to call the "Dave Sector." As some of you know, in the last few months I have fallen victim to the subprime mortgage crisis and FEMA's crappy Iowa flood prize packages. Without an immediate infusion of federal cash, Dave will be bunking with Fannie and Freddie at the bankruptcy rehab clinic, and the consequences are almost too terrible to contemplate.
The warning signs are already dire. Every week I am faced with a fresh load of overdue warnings and repossession notices to drag to curbside recycle. In order to avoid harassment by other creditors -- especially Tiny Munson --I have been forced to avoid Happy Hour at dozens of area taverns, depriving the Iowa retail alcohol beverage sector of an important source of revenue and accounts receivable. These hurting tavern owners also face the loss of other customers, who will drift off without me around to entertain them with my famous Happy Hour antics.
But it's not just innocent bar waitresses that face potential disaster. If left unchecked, the recent increase in repo man activity around my house will flood the market with cheap secondhand dirt bikes and big screen TVs, further weakening the electronic and transportation industries. In the Dave Doomsday scenario, foreclosure will saddle the wobbly mortgage industry with yet another completely unsellable house. And, I might mention, I'll have to move somewhere -- maybe even next door to you.
Take a minute to reflect about the alternatives: (A) a slightly higher April tax bill, or (B) total economic meltdown, American streets filled with angry unemployed bartenders and stereo salesmen, and Dave Burge's van pulling up your driveway. I realize the choice is unpleasant, but if we all act now we can make sure the pain is shared equitably. Call your local Congressional Office and tell them you support my draft proposal for H.R. 7802, the Dave Burge Recovery Act of 2008. Together, we can stop the economic displacement of me and my dirt bikes.
Oh, and Jamie Gorelick? Call me, babe.