China Rising

Click here to read a fascinating article on China's ascendency in the world.

Can Any Party Really Last?

Everyone and their mother is blogging about the Massachusetts election yesterday. But I thought this short piece about whether any national party can "re-align" and stay in power for years and years in this technologically driven world was very interesting.

We expect immediate results, we want government to fix things, and from my perspective there has been very little collective self reflection on how banks and Wall Street found the openings to prey on us. It's not like we kept the doors closed....

That said, the apparent anger which motivated many Massachusetts voters seems in line with seeking immediate results.

And while jobs, jobs, jobs should be the government's key objective, remember what is lost in all the hub-bub about health care is that if we can spend less (as a nation) on health care, we can spend more on infrastructure, buying cheap TVs, and granite countertops for our kitchens...

In the Crosshairs

As the economy changes our ideas of the 'haves' and 'have nots,' many issues will come under scrutiny. One that caught my eye were hunting licenses in Montana. In most states there is a fee disparity for licenses. For instance, when I fish in Idaho, I pay more for a license than a resident. The flip is true, an Idaho fly fisherman pays more for a Washington license than I do. Same thing has been true for hunting licenses.

However, in Montana, which restricts the numbers of hunting licenses, there are a number of hunting licenses reserved for nonresidents that are sold through guides and outfitters. These guides and outfitters frequently take their clients to private access areas to hunt, for instance large tracts of ranch land the guide leases from a rancher.

Hunters in Montana are fed up with this system, believing the rich out of state hunters get a better deal. On the ballot this fall will be an initiative to eliminate this system and increase the out of state license fees, much like what is done in many Western states. Of course, if this idea passes, the guides and outfitters claim they will be severely hurt. Private land owners who lease out their land (think Ted Turner) may not respond by allowing unaccompanied hunters onto their lands. Their sense is that hunters usually behave quite badly (think piles of beer cans left near a smoldering fire). It's a class war if there ever was one.

More interesting, however, I think is the backlash between the perceived economic disparity. In other words, part of this initiative is based on anger that "rich, out of state" hunters get better and different opportunities for natural resources. And as our economy continues to create a larger divide between the rich and everyone else, I suspect in many other areas we will begin to see these kinds of backlashes.

When You Rely On Consumption

When you rely on consumption and people are not feeling too giddy about their futures...it's a recipe for a stagnant economy.

We're there, now! And the stock market finally realizes it.

The Good, The Bad, The Ugly in Unemployment Numbers

There was good news today. While many economists predicted the unemployment number would rise to double digits today, they in fact went down a bit, from 9.5% to 9.4%. Statistically, the margin of error makes them the same, but that doesn't stop everyone from celebrating and headlines trumpeting the end to the recession (depression) is near!

The bad news is, of course, unemployment is still high and is probably going to remain high regardless whether the mucket-mucks say the depression (see, I said it) is over.

And the ugly news is in reality, this 9.4% is only measuring people who are actively looking for jobs, not people who have been unemployed for over the 15 week measuring mark. My suspicion is if we could figure out how to measure all the unemployed but want to find work people in this country, well, that figure would certainly be double digits and also scare the crap out of most politicians. So, like how we measure inflation (taking out food and fuel from the equation, which as we all know from last summer can be and are highly volatile) the government is essentially controlling information to "make us feel better."

The reality is that we have to be creating over 125,000 jobs a month in this country just to employ the people coming into the market. Right now, we have close to 7.88 million people unemployed. There are guesses that the real unemployment rate is over 16% and rising.

If you believe that the American economy is a function of confidence, the numbers released today, the President's comments, and Wall Street's closing are all intended to bolster your sense that the economy is getting back into shape. But dig deeper. Don't let the bally-hooing out of New York and Washington fool you. Numbers can and do deceive. They are intended to do that. It's good, it's bad, and believe me, it's really ugly.

Ta-Da! Recession Over. Sadly, Pain is Not

No longer waiting around for the stimulus money to "trickle down" to its citizens, Tennessee decided to put people to work in the fashion of a New Deal works program. The several hundred people in a rural Tennessee county who were laid off when an automobile manufacturing plant went to Mexico, were able to find state jobs in, yes, the unemployment office, working on thinning a forest, and other public works tasks.

And this is good, because despite economists declaring the recession "officially over," the pain of unemployment, lost value in retirement equities, and increasing prices in necessities such as gasoline, are continuing to hit everyone.

We have a long way to go before anyone feels like they are out of the woods. The so-called green job creation may, at it's peak, develop into 2.4 million jobs, a mere drop in the bucket of how many jobs have been lost in this recession, much less how many more need to be created to keep up with the growing work force.

While housing sales are increasing, house values continue to slide. In other words, people are buying, but sellers are losing value with each sale. Most of these sales are excess inventory or subsequent to bank foreclosures.

As the Slate article suggests, don't download Happy Days Are Here Again.

The Way We Were

The fact over 70% of our economy is driven by consumption, you know, retail sales, is disturbing. Even more disturbing is that we seem to be fixated on an economic recovery that is dependent upon the same idea: people spending lots of money (or mostly debt) to buy several different colors of the same thing (I am guilty of the pleasure myself).

While this ramping up of consumption may have been sustainable for several decades, it clearly is not economically, environmentally, or socially sustainable for the future. We must figure out ways to enjoy our free time that don't require spending lots of money on jeans that will be thrown out in less than a month or a new Coach purse that looks just like the last one but is in a new color. As the divide between the haves and the have-nots deepens, it seems that unless we begin to save money, there will be more and more have-nots and fewer haves.

A vibrant middle class is the hallmark of a healthy democracy. People vested in their country's future. If the divide between rich and becoming poorer continues to swell, our own democratic fabric may begin to tear.

So while it is fun to speculate what swanky store will lease expensive space at the mall, it seems to me we need to have a national dialogue about the foundation of our economy. Is it Costco or Ford? Manufacturing or buying stuff? Going further into debt or having countries and people owe us money? Is this really a choice?

Green Shoots Doused?

The Obama Administration is touting "green shoots," their language for signs on progress the economy is turning around. Small pieces of data, they say, indicate that their stimulus package is beginning to work. One such data point is the unemployment rate which was announced last week. While 9.5% is the highest in over 20 years, the Administration asserts that the rate of increase in unemployment is slowing down. I feel better already.

But really, the economy is still reeling and the slightest hiccup can cause problems. Over the past few weeks gas prices have soared. The price of a barrel of oil has risen even more and for the first time in a long long time, gas prices have not even kept up with the price of oil. Increasing oil prices are frequently a sign that the economy is growing. Most oil traders subscribe to the notions of supply and demand. If the economy is growing, demand for oil increases and given the oil cartels and, well, er, greed of the big oil companies, supply is often limited. When the Obama Administration announces there are green shoots, in other words, hope for the economy, oil traders boost the price of oil and gas prices soar.

But here is the problem. Over 9.5% of Americans are unemployed. In most places it takes a car to look for work. Go to the unemployment office, to job interviews scattered throughout the area, pick up kids from school, network with employed parents on the sidelines of the soccer game, you get the idea. If the cost of gas increases, as it has, then something on a fix income has to go. Green shoots wither.

And of course, there are the transportation wonks who advocate increasing federal gas taxes so people can not afford to drive (one of these days I will talk about all my environmental colleagues who owned large cars and drove to work, every day).

I don't envy the economists and budget gurus advising President Obama. This is a delicate and tough time. Hopefully, however, they are paying attention to the little things that can send families over the edge. Gas prices are certainly one of them.

Making It In the New Economy

Almost two years after introducing the iPhone and a year since giving the world a new operating system, Apple had a splashy ceremony today showing off yet another iPhone, operating system upgrades, and new laptops.

But, Apple, realizing that these one-right-after-another "new models" reeks of Detroit's now famed planned obsolescence is offering consumers something not many manufacturers are doing these days: price reductions.  Not a lot, but enough to perhaps disguise the lack of sustainability in the constant "newness" they are pumping up.

So it seems the new economy isn't that different from the old economy.  Spend money on the new and shiny!

Unemployment

Can't blame the Administration for emphasizing any good news.  Today's unemployment figures are the highest since 1983.  Many of the work force were not alive in 1983 (I was and well into the work force by that time). But the Obama Administration noted that the rate of increase, the rate, was slowing down from the previous months.  So although we have over 5 million people who seeking unemployment insurance, and probably just as many who are unemployed and ineligible for unemployment insurance and hence not counted, the rate of adding more people is apparently slowing down.

Or, or perhaps every one is just taking a breather from laying people off, waiting to see if there is any good news in the economic horizon.

What baffles me is how we can go from such dire economic news in March and April, to finding silver linings in early May?  Is the economy really beginning to turn around?

Stay tuned!

In the meantime, those 5 million people, or probably more accurately 10 million, our neighbors, friends, family members, they are scared, nervous, and feeling a little hopeless.  The 8.9% is not just a number, it's people.

Honey! I Shrunk the Economy!

The economy continues to shrink.  It's the 100th day of the Obama Administration, a benchmark which is convenient for the media but seems arbitrary and useless for the rest of us, but on this day, President Obama has to worry whether he has implemented enough steps to arrest the economic contractions.

Ironically, today is the shareholder's meeting for Bank of America.  Ken Lewis, the head of Bank of America, has been in his office for over 7 years.  And during those 7 years he has been part of a real estate boom and bust that has rocked and roiled the global economy.  Chances are, despite some shareholder activists, Lewis will remain the head of the company, the Dead Bank Walking, while complaining his salary and bonus is not high enough.

More important, however, is that President Obama has expressed optimism that the economic stimulus packages will create 2 to 3 million jobs.  That's great, except we are now at an unemployment rate far greater than 2 or 3 million.  

We have a long long way to go before we have figured out how to have a sustainable economy, not subject to the "wizards" of the financial industry's ideas to spread risk on lending practices or whatever other scheme they come up with that will cause our economic stability to crash down around us.  The first step is, during the next 100 days, for Congress to insert ear plugs and stop listening to the financial industry lobbyists.  Then pass legislation that mandates regulation of this industry so that they are not risking our money on Ponzi-like schemes where they and only they come out richer.

The first 100 days have been good, hopefully the next 100 get better.  

In the meantime, anyone know where the economy went?

Economic Heroes: Elizabeth Waren

An expert in bankruptcy law who is on the faculty of Harvard Law School, Elizabeth Warren is challenging the Obama Administration to do all it can to ensure our economy no longer goes through the boom and bust cycles we have seen for the past thirty years.  

Currently, Warren is the chair of a Congressional Oversight Panel monitoring how the Toxic Asset Relief Plan (oops, did I mean Troubled Asset Relief Program?) is implemented.  This position has given her a soapbox to talk about what needs to happen for long range economic stability.  The kind we saw post World War II for at least 50 years.  As witnessed by yesterday's news, our economy can not continue to ride this roller-coaster that we have been on since the savings and loan crisis in the mid-1980s.  

The second largest shopping mall developer files for bankruptcy.  Foreclosure rates are rapidly increasing.  New housing starts drop to their lowest levels, ever.  Our economy is chronically sick.

So, Warren advocates a new path.  Greater regulation and monitoring of our financial systems.  Safety nets.  Leveling out the booms and busts so all Americans can find a niche to succeed.  She is spot-on and hopefully legislators and the current federal and state administrations are listening to her.  This unassuming and brilliant woman.  Here is another article relating Warren's cautious but insightful analysis of the financial institution crisis where she essentially says what we are doing mimics what Japan tried to do in the 1990s, and that decade in Japan is called: lost.

An economic hero.  Or, as Jon Stewart said, "she gives chicken soup for the economy."

Again, the Economy

Yesterday, President Obama gave what was billed as a major economic speech.  He said, in my opinion, all the right things.  But the problems remain horrific.  While Wells-Fargo reported "record earnings," it is highly probable that those earnings were based on the accounting changes recently made so that the so-called toxic assets are not valued at fair market value.  And the unemployment rates continue to rise, causing hardship unknown to many in recent history.

Truly, this country must change in fundamental ways.  

Hopefully, policy makers are listening to what the President said.  And that they are asking what they can do, now, to continue making the changes necessary to guard against this financial shenanigans from happening again.

But on the ground, I don't think change is really happening.  Lenders are jacking up interest rates making enormous profits on the spreads.  They continue to foreclose, to  to negotiate mortgages that will ultimately fail, and to lobby against provisions in the bankruptcy code which will actually help homeowners and debtors in trouble.  Meanwhile, Wall Street complains that they have become the victim!

Layoffs continue.  Hallmark announced massive layoffs.  John Deere.  The list of American companies goes on and on.  

We need change.

Guns and Stress

It's no surprise that we are beginning to see a rise in gun violence in America.  People are stressed.  Homes foreclosed, creditors calling, employers expecting more for less, health insurance non-existent.  One more thing reaches a tipping point whether it is spousal issues, kids, landlord, employer.  And the gun gets pulled out, safety off, trigger pulled.

And since this is America, we will get the usual responses from the advocacy groups.  Gun control advocates will point fingers and say: "see I told you so," while the NRA will emphasize that only people kill people, not guns.  

These shooting sprees are generally not a result of a bank robbery, but systemic stress in our culture that is increasing.  These are not horrific incidents that will be cured by gun control or liberalized gun laws.  Rather, we must find ways of dealing with this increasing stress that leads to such horrible violence and death.

The unfortunate thing is that the policy makers don't seem in any hurry to help the average person.  Today, White House officials acknowledge that they will not be able to accomplish President Obama's ambitious agenda in the first year.  What concerns me is that I am not sure the Administration or Congress is going to do much to help main street (to use their term) in the next few months.  

It's important to continue linking this violence to the current economic disaster.  To keep the pressure on policy makers, whether local, state or federal to understand that people are in a world of hurt.  Remember, 5 million Americans are without employment.  That's 5 million (actually more, since many are unable to find work past unemployment compensation much less those who lost their jobs and don't qualify) people worrying about bills, their children, their partner, and wondering where the ammo is kept.

Right Direction?

Perhaps it is just my simple mind, but I keep thinking that trying to merely right the ship and add a few more crew members to monitor the sails, isn't going to create a healthy economy.  But it seems that is the direction the Obama Administration is taking.  It is their hope, through guaranteeing private investors buying up the so-called toxic assets on financial institutions ledger sheets, and by adding more regulatory authority, more referees if you will, that the same markets that got us into this mess will get us out of this mess.

While I am all for innovation and creativity, I keep wondering whether those attributes are a good thing in the financial sector.  It seems to me that every boom and bust we have had during the past two decades have been caused by reckless innovation in the financial markets, whether it was using leveraged money to come about with whacky ideas for Internet marketing during the dot.com boom and bust, or whether it was the slicing and dicing of mortgages and other debts (consumer credit, student loans, Lord knows what else) into securities that were sold, insured, and leveraged more times than probably anyone knows, it seems the financial industry's creativity knows no bounds.  While that may be fine and good if they are gambling with their own money, their own retirements, their own homes, it's not good when it is playing with teacher's retirements, a janitor's home, and deposits in a bank.  

I keep coming back to a more holistic view of economy.  That is, we can not continue to rely on selling services.  Over 70 % of our economy was about consumer spending.  And what we exported became the Lords of Wall Street, financial services and the related businesses such as lawyers.  In order to create something fundamentally sustainable, to avoid these huge, massive, booms and busts, it seems to me we need to reign in the financial industry's creativity and develop more production of stuff, things other people will buy, here and abroad.  

Stocks and securities must be about long term investments in companies that are, to use an overused word that essentially has no more meaning, transparent.  We should invest based on profit and earnings, not some wild idea that goes public, makes a few kids under the age of 30 millionaires and later goes bankrupt leaving retirement accounts empty.  We should not allow mortgages and credit card debt to be traded like baseball cards, but rather the lender assesses the risk and holds the card.  It's the only way loans can be made responsibly.  

Until we all learn how to behave I think righting the ship isn't enough.  We need to come to shore, get off, and learn how to sail, safely.  In the meantime, to join the world economy, we need to stop being the consumer and begin, again, to produce.  We can not continue being reckless in our consumption, ruining other countries as we binge on buying cheaply made crap.  

These changes are to the very core of an economy.  It's time we realize the fixes will be an over haul.

Corporate America

As we begin digesting the Obama Administration's financial industry bail-out plan, I am struck by the lack of debate concerning the relationship between government and private investors.  Certainly there are discussions about the large guarantees and actual cash the Federal Government is contributing in order to lure private money (something like 9¢ on the dollar, in other words, the government is contributing  91¢) in buying the so-called "toxic assets" off the financial institution's books.  But there is scant discussion about the new partnership that is created.  In other words, the United States Government is now partners with private investors who will be eagerly trying to maximize their profits.  

Aside from the distaste of how those profits are going to be maximized (assume that some of those toxic assets are mortgages which are "submarined" or that are secured by real estate worth far less than the face value of the promissory note) by foreclosing and selling people's homes, developer's half baked projects, and overly-leveraged businesses like Donald Trump.  But there are real people behind those toxic assets, with real homes, kids in neighborhood schools, struggling to afford a loan sold to them on dreams and more than likely fraudulent practices.

In the middle of these discussions, about how do we want corporate America intwined with our government, we also should look at corporate "solutions" to other issues.  For instance, in yesterday's New York Times I noticed a full page ad from IBM.  The ad gave a litany of food problems: mad cow, salmonella, e. coli.  And, IBM touted it's solution, of tracing food from production to market as a way to trace and track problems.  Of course, this tracking would require Federal legislation and regulation.  Interestingly, many proponents of local foods, people in the slow food movement, oppose tracking system because, ah-ha, it benefits the conglomerates who can afford the IBM systems!  It will, essentially, put the small producers out of the market.  

And then we have the in vogue with transportation planners, congestion pricing.  IBM is running commercials, which have to be expensive, on the NCAA basketball championships, regaling viewers with how much time we waste stuck in traffic.  How European countries have solved this problem (cut to happy Norwegians) with congestion pricing.  Of course, IBM is all to happy to sell you lots of expensive technology to solve this "problem."  

Let me tell you how IBM sales work.  For years they sold main frames to Boeing.  And they were so in bed with Boeing, that IBM sales force had offices in Boeing corporate offices.  Same thing with Nordstrom, selling them point-of-sales machines.  You just know IBM marketing folks are wining and dining transit planners, agriculture, food, and drug regulators, and of course, Congress, to legislate "solutions" to "problems."  

We have to remember, these corporations have lobbyists.  Lots of them.  They are good at what they do.  Many of these lobbyists used to be Congressmen, Democrats and Republicans.  They are friends with the current Administration.  When they yell "fire," everyone is conditioned to listen, even if there is no fire or a small flame easily extinguished.

So, we then must wonder...what are these toxic assets that we have to so urgently buy?  What is the problem that corporate America is whispering to our "leaders?"  And is it a good thing we are now partners with the very investors who were so eager to make a buck off of sub-prime mortgages?  What, really, is this fire?

Dealing with Population Booms

2007 saw 4.3 million births in the United States, topping the greatest population increase in the 1950s.  In other words, we're increasing our population.  And that doesn't include increases from immigration.

Usually these kinds of topics are sensitive.  But population issues impact economics, culture, the environment.  For instance, if we're worried about how to pay Social Security and Medicare for the aging Baby Boomers, what are we going to do for this whole new generation?  

And, from an environmental standpoint, no matter what we try to do to reduce carbon emissions, frankly, increases in population increase our contribution to the human enhancements to global climate change.  More housing, more transportation, more food...

The news of the population increase was buried.  And the actual article focused on the high percentage of births by unwed mothers (40%) rather than the mind numbing idea that there are 4.3 million new Americans (not including immigration numbers).  

Where is the discussion about what are we going to do with this boom in relation to a life that seems to be going bust?

Boom and Bust

While we continue to be fixated on the AIG bonuses, which I want to again plead that while it is unconscionable those bonuses were paid, it is still a distraction from issues that really need our collective attention, there was a fascinating and demonstrative news item originally reported a week ago.  In Bozeman, Montana, a gas line exploded, destroying a number of historic buildings on the main street of town.

For those of us who get to Bozeman, this is sad news.  Those buildings were indeed lovely.  Bozeman was one of those places that was seemingly immune from the economic nightmare devastating the country.

But the blast brought attention.  And a realization that indeed, all is not well in Paradise.  The bankruptcy of The Yellowstone Club, the moratorium on Ameya Preserve, (another land based development catering to not only the extremely rich but wealthy people who consider themselves into "sustainable" living by eating only foods "designed" by Alice Waters) along with other wealthy land owners beginning to collapse is causing a ripple effect in the Bozeman/Gallatin county economy.

Why do we care?  Couple of reasons.  More than likely as Bozeman begins to feel the impacts of the depression, many other rural areas will descend quicker and longer.  To come out of a depression in a rural area takes longer.  

But even more importantly, Bozeman is really a case study (as they say in MBA schools) on boom and busts.  Without doing the research to determine when boom and bust economies started in the US, I feel safe to say we have a long history of them.  Think gold and silver mining, and logging.  In fact, early in our history, booms and busts were natural resource dependent.  Come in, strip the area of the resources, make a lot of money, and leave a ghost town.  

We have, over time, managed to level out the booms and busts until the past twenty years.  Now we have dot.com booms and busts, the real estate boom and bust and it's safe to say without changing our economic models drastically, there will be another boom and bust within the next ten years.  

So here is Bozeman, on the rural/small town edge of a showy wealth driven boom and a last gasp of egos slide bust.  Strangers came into town, convinced the locals that these swanky real estate developments would enhance the economy over time, and now hundreds of carpenters, tile layers, ski lift operators, art gallery owners, interior designers, architects, escrow officers, are all beginning to understand what a bust feels like.  They attend bankruptcy hearings where formerly wealthy people who leveraged other people's money try to hold onto control of developments that were never real in the first place.  

There is gold in them there hills!

We clearly need a new economy to make sure we are not constantly re-enacting the creation of ghost towns.  You would think we'd learned our lessons from 1849.  Guess not.

What We Have Become

In a very cleaver picture essay, this artist demonstrates with quick wit what we have become.  Attached to all things electronic!  

A few days ago I did a presentation to a 3rd grade class on forestry and what foresters do.  Of course, like anyone in this field, I got into forestry because I loved being outside, but I finished my photo presentation with a picture of my desk, because, like everyone else, that is where I spend most of my time.

We have become complicated by the cables.

All those lines of wire are symbolic, of course, of the fact that we really are no longer an economy or culture that actually produces something tangible.  We produce ideas, concepts, but nothing that we can stick into a container and ship overseas, load onto a truck, or even sell at the local market (as much as we talk local produce, really, most local is miles away from where you are shopping with your chic canvas bag).

Yesterday I heard, again, the number that just sends chills through me.  Over 80% of our economy is based on consumer spending.  Much if not all of what we spend money on is not produced here in the United States.

When I was talking to the 3rd graders I realized that very few of them knew paper came from forests.  They didn't mention logging when I asked them what happened in forests.  It's simply not "politically correct" to talk about manufacturing or producing anything other than locally grown lettuce.  Growing lettuce at a scale of selling it at the local Sunday market can not sustain a family.  We simply must figure out how to create middle class jobs with healthy wages.  This will and must include manufacturing things.  Using our resources.  Learning to live simply.

Unwinding this mess will be as tricky and frustrating as untangling all the cables underneath my desk.

Laughing All The Way To The Bank

One of the standard ways for media to draw attention to itself is to pick a fight with other, perhaps rival, parts of the media.  Readers of New York tabloids know this strategy well.  Last year we witnessed an MSNBC news "anchor" constantly flame a Fox News commentator.  Ratings, apparently went up all around.

It's not surprising then, that this past few days Jon Stewart of Comedy Central has taken on financial media types like Jim Cramer of CNBC, accusing them of fueling the economic bubble from the past 8 or so years and failing to take responsibility.  Stewart's Exhibit A is Cramer's endorsement of Bear Stearns stock days before the company went belly-up.  

NBC, the owner of CNBC, loved the attention, just as Fox did when their commentator was attacked by MSNBC.  In this game, the idea that attention, good or bad, is good for ratings, holds true.  Jon Stewart invited Cramer on his show, and NBC milked it.

While Stewart apparently was not a comedian with Cramer, and engaged in some fairly serious accusations about media types failing to investigate the extent of the financial institutions failures and hyping the "bubble," it's still odd, in some conventional sense, to think of a comedy show doing the work of journalists and opinion "leaders."

In reality, Stewart makes his living off of current issues.  And the economy is front and center.  Picking on Cramer (who is way too hyperbolic for my taste) was like shooting fish in a barrel.  Easy pickings for Stewart, especially since he probably couldn't get John Thain or any other Lord of Wall Street on the show.  It was a win-win for Stewart as well as Cramer.

However, the economy is a real problem impacting everyone.  It's global reach is devastating.  And there are serious details in the reconstruction work that needs to be done, which require attention of everyone, pushing leaders to do the right thing, not short change us as they have in the past.  One of those issues is quite technical but extremely urgent if we want to have a long term sustainable economy built on (to use the current vernacular which I think has lost meaning) transparency.  Mark-to -market is an accounting rule that requires financial institutions to value assets on what they could get on the market, not what they paid for the asset.  In other words, what it is worth.  It is like saying the 10 year old Ford you own is still worth what you paid for it, rather than what you could get if you listed it on Craigslist.  

Financial institutions, now scrambling to demonstrate to Treasury and the Federal Reserve that they are solvent (to avoid federal take-overs and loss of that oh-so sweet corporate jet and huge salaries), want to mark the assets value at something closer to what they paid, rather than what the market will bear.  In other words, fluff up their assets.  Then they can claim they have the reserves to function and voila, the financial problems go away.

The problem is, some Members of Congress are actually listening to them (remember I have discussed the lobbying advantage these banks have over us?)!

So while Jon Stewart and Jim Cramer can "fluff" up their ratings railing at each other about who is responsible for the economic debacle, we all need to keep our eyes on the ball, follow what our leaders are doing, to make sure it doesn't happen again.  This is serious stuff.  And only we can make sure the right policies are set into place so we are not here, again, or our children are not left picking up the pieces.