May 19, 2011
I’m writing because my family and I were affected by the economic collapse of 2008, and we don’t want it to happen again. My sister's job was outsourced and at the age of 58 nobody wanted to hire her. She has gotten nothing but low pay jobs without any benefits, as that is all that is available since the crash.
I see my grandchildren suffering because teachers and state employees throughout the nation are being blamed for the economic problems caused by the greed of wall street bankers. They will be starting college in short order, but colleges are having their budgets cut and tuition raised. The quality of education in this nation is failing from kindergarten to college because the states cannot afford to support them. Now, fewer and fewer people can even afford to go to college. And, the federal government supports private for profit schools that fail to provide educated and employable graduates who end up with nothing but huge debts and no job to pay for them.
Water lines, gas, and electricity distribution have become a joke in this country. Numerous people in southern NM and El Paso TX lost all utilities due to an unusual freeze in February this year. Why, because the gas company could not provide gas, the electric grid could not keep up and because there was no heat, water lines froze. This is because the infrastructure is deteriorating and nothing is done. Many people are still working to repair the damage that resulted from the lack of utilities. Our streets and highways are deteriorating to the point that they are becoming dangerous.
Wall Street greed and outrageous pay practices were a major cause of the collapse. One way to change the incentives so they don’t collapse our economy again would be for regulators to use a *safety index* for incentive compensation, instead of a profit index. I had money in the market before the crash, I took what little was left and put it in a savings account. I cannot afford to lose money because Wall Street is corrupt and uses immoral tactics to take working peoples money. I do not trust the market and I do not understand why those who are 'gaming' the system deserve huge bonuses and low taxes. They have not created jobs, they are holding the economy hostage by refusing to make money available to start ups and companies who would create jobs.
Currently, most bankers receive stock options. So if they can generate more profits, the stock price goes up, and their options become more valuable.
Instead, what if they used the bank’s bond price, which measures the overall ability of the bank to repay its own debt? Another measure of bank stability is the spread on credit default swaps (the insurance-like policies that are essentially bets, where one gambler bets with another that a particular firm will fail). The closer a bank comes to failing (such as in failing to pay of its bond debt), the bigger the spread on credit default swaps.
Thank you for considering my comment,
Sylvia Aronson