We all know that the economy sucks right now. Honestly all this financial freak-out doesn’t really affect my life too much since, as a struggling artist, I’ve always been on a budget. I’ve tried to minimize my spending but New York City has a unique way of sliding bills out of my wallet to pay for cab rides, cocktails and chair massages (only $10 for 10 minutes! How can I say no?) So how long could the average person really go without spending any money? Check out this great piece by Steve Almond about his experiment to see if he could go a week without spending a single penny.

For more money-smart stories and advice takepart and check out the Real Simple’s Guide to Money and Finance. I know I need to educate myself on the art of saving.

A friend pointed me in the direction of this video - which while funny on the outside, is very very true on the inside.

Give a watch, have a laugh and retain the information it presents:

Also, learn more about what the candidates plan to do about the economy

takepart to read Barack Obama’s plan for the economy and

takepart to read John McCain’s plan for the economy

Read on:

Election Nightmares and Cutting the Bull

This American Life is One That Requires Discussion About The Economy

Should You Be The President? Think About It

by Eugene Yoon

If you’re like me, you’re probably twiddling your thumbs as you anxiously watch the Dow plummet down, down, and further down. With no foreseeable end in sight, I advise you to not sit near a window in the case that another bad day in the market persuades you to jump out. However, if you already find yourself with one foot outside the window ledge, and the other inside your apartment reading this blog, then let me give you an inspirational tid-bit — you’re not alone. Just know that there is a fellow Zimbabwean with his hand extended because he understands your pain. New York Times reported that “Zimbabwe’s inflation rate, already one of the highest in world history, rose from an annual rate of 11 million percent in June to 231 million percent in July.” In comparison to their economic situation, the American crisis, even in its darkest hour cannot empathize. Now don’t get me wrong, I’m not trying to smooth over any punches and say that what we as Americans are going through is not a brain-wrenching struggle. All I’m simply trying to do is shed some light and turn a bad situation into an opportunity to understand the world around us — a world that is much less privileged than ours. So, if you’re still standing outside the window, get back inside and trust me — in the end, everything will be okay.

takepart with garden africa, an organization that helps Zimbabweans plan their own gardens to sustain themselves

(Photo: Gregor Rohig Flickr’s photostream)

The massive Wall Street bailout package that has dominated headlines for the past week was passed by the House and signed into law today.   The record $700 Billion expenditure is probably the largest amount of money ever to be spent on something nobody really wanted.   The Wall Street firms, while obviously happy to get the money, certainly never wanted to get to this point.   Politicians throughout Washington DC spent the week busy trying not to take too much of the credit or absorb too much of the blame over the passage or defeat of the legislation, many even voting under protest or literally holding their noses while saying “Aye” for the measure.   The Presidential candidates, Barack Obama and John McCain, handled the issue - albeit sometimes clumsily - with kid gloves, recognizing the importance of the package being passed, while not wanting to be identified too closely with something so unpopular with the voting public.   Eventually both would vote for it though, as would the Senate on the first try and House on the second.

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It’s nearly impossible to leave your home these days without overhearing people’s opinions on the credit crisis and bailout package.   Yesterday, while running errands, I had the misfortune of tuning in for a few minutes to a conservative Baltimore radio commentator, hilariously trying to pin the credit crunch on Democratic policies and their obstruction to regulation (!), while railing against the bailout and vaunting the House Republicans who voted against it (no word was mentioned about the Democrats who actually doomed the measure).   Later while standing in line at a National Wholesale Liquidators in Northeast Baltimore - about as good a place as you can find to overhear regular people’s concerns - I listened to a checkout line full of shoppers irate over the bailout package that would go to “all those millionaires up there in New York“.

It is indeed an infuriating thought that billions of dollars of Federal, taxpayer money will go to the same Wall Street firms who greedily demanded deregulation from the politicians they patronize in Washington, then, once they got it, eagerly wrapped it around their own necks and hung themselves.   So why do it?  What is the possible justification for this?  The answer comes down to one simple concept: Credit.

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The US House of Representatives defeated the mammoth bailout package for Wall Street this afternoon by a vote of 228-205.  The move sent markets reeling with the Dow Jones Industrial Average dropping over 700 points before recovering slightly.   Details are still emerging regarding the machinations of this coup against both Democratic and GOP party leadership, but it is clear that “No” votes came from both sides of the aisle in striking this record bailout package down.

Like virtually everyone following this unbelievably important story, I have had my share of doubts about bailing out an industry that got itself, and the rest of the country, into this enormous mess.   However after research and much reflection, it is clear that something desperately needs to be done.   The credit markets in the United States are on the verge of falling apart, with nobody having access to the capital they need to run their business, buy property or loan between banks.   In a system such as ours this is an untenable situation.   American needs free flowing credit - to qualified borrowers - in order to function.   It is as simple as that.   Striking down this bill is preventing a desperately needed package from helping to revive the economy.

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Don’t believe the hype from the politicians, the bailout is all about politics. Congressional politics, Senatorial politics and most importantly Presidential politics. Two huge aspects of politics that often go unspoken are taking credit and assigning blame. Indeed many of the key policy positions of political parties in the United States and democracies around the world arose from their ability to either take credit or assign blame for actions on issues related to those positions. This bailout is no different, and the way it’s played by both political parties and their respective candidates has the potential to redraw the political map as we know it in this country for a generation to come, if not more, should one side take a bold action.

The current bailout plan proposed by Treasury Secretary Henry Paulson has elicited a deep measure of skepticism in the electorate for a number of very poignant reasons. True conservatives absolutely detest spending taxpayer money to bailout anything, with many considering the current plan “financial socialism” as Kentucky Senator Jim Bunning termed it. Liberals aren’t so much turned off by the socialism than by the fact that it’s intended to go to the people in this country who need it the absolute least: Wall Street investment firms. Finally people from across the political spectrum can all think of much, much better things to do with their hard earned $700 Billion than to go and gamble it on a financial industry that has already had a number of bailouts and is still falling apart.

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Once the current Federal bailout package for Wall Street comes together, Treasury Secretary Henry (Hank) Paulson will become The Check Writer-In-Chief. Spurred by the recent collapse of the entire industry of investment banking in the United States, the Federal Government is crafting a bailout package in upwards of $700 Billion in the hopes of salvaging the financial industry and, we’re told, the US economy. Once that package is agreed to by Congress and the White House, there will be one man in charge of implementing it - Treasury Secretary Paulson, giving him, one man, what is to be the largest spending power in the history of money. Given that, thanks to the priorities of the press in this country, I know far more about Sarah Palin’s hunting trips and the background of her supposed son-in-law to be Levi Johnston than I do about the Treasury Secretary this is more than a little disturbing.

So let’s find out about this guy. Hank Paulson was born in Palm Beach, Florida and attained the rank of Eagle Scout in the Boy Scouts of America. He is 62 years old. He attended Dartmouth College for his undergraduate degree and went on to Harvard Business School for his Masters in Business Administration. All of this sounds good so far. He’s an overachiever and went to some top schools. He worked in in the Federal government previously as an assistant to the Assistant Secretary of Defense at the The Pentagon then went on to work in the Nixon Administration as a staff assistant. While this might not be my favorite White House in US History, it stands to reason that many top Republican policymakers worked there in their youth.

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Less than a week ago, I wrote about how a barrel of oil had dropped below $100 for the first time in a half billion years, and I was thinking aloud on whether this was a good thing or not.   Well, that whole post is totally moot now as oil prices jumped up to $120 a barrel today.   This probably has something to do with Wall Street falling apart.

The New York Times reports that oil prices surged as investors were drawn to commodities today due to the uncertainty stemming from the news of, well, everything.   Take your pick.   Goldman, AIG, Fannie, Freddie, Morgan, Lehman’s, Citi, and we can keep going and going and going.   The dollar grew even weaker today, too, hitting $1.478 against the Euro, giving Europeans another reason to be all snooty about themselves.   Oh, and the Dow dropped 372 points today, too.   Anyway, we were talking about oil prices.

Due to refinery issues stemming from the hurricanes, prices at the gas pump had remained inflated, so it’s difficult to say how much of an impact the higher price of crude will have when you fill up your tank.

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The Bear roars once again on Wall Street as two of the largest investment banks in the United States have failed. After a weekend of intense negotiations with the Federal Government and other investment houses slated as potential buyers, troubled brokerage house Lehman Brothers has announced it will file for Chapter 11 Bankruptcy protection after its fellow financial institutions all said “Thanks, but no thanks” to acquiring the doomed company. Across town, Merrill Lynch will meet with a somewhat better, having agreed to be acquired by Bank of America in a deal worth roughly $50 million.

All I have to say is that I leave New York for two weeks and the whole place goes to pot. Both of these companies managed enormous amounts of capital and seemed as untouchable, in the eyes of a lay-observer such as myself as any organization in the world.   Their swift declines, with hardly a moments notice, are a grim reminder of the historically volatile economy we’re facing.  

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