Faith Based Economics, by John Ostrander

John Ostrander

John Ostrander started his career as a professional writer as a playwright. His best known effort, Bloody Bess, was directed by Stuart Gordon, and starred Dennis Franz, Joe Mantegna, William J. Norris, Meshach Taylor and Joe Mantegna. He has written some of the most important influential comic books of the past 25 years, including Batman, The Spectre, Manhunter, Firestorm, Hawkman, Suicide Squad, Wasteland, X-Men, and The Punisher, as well as Star Wars comics for Dark Horse. New episodes of his creator-owned series, GrimJack, which was first published by First Comics in the 1980s, appear every week on ComicMix.

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14 Responses

  1. Vinnie Bartilucci says:

    Instead of recession we have "downward trends" because no one wants to admit we're close to a recession. The word "recession" was coined in the 70's when no one wanted to admit we were dancing on the edge of another depression. And the word "depression" was coined when no one wanted to use the word "collapse". 30 years from now we'll be afraid of a "fiscal dent".The thing that screws up the market are the people looking to Get Rich Quick. Speculators and Day-traders who buy and sell like mad, grabbing things in a attempt to start a run, like that. The comparisons to the collectibles industry are staggering. It was a vastly over-valued stock market that caused the Depression in the first place. The Stock Market was a hot trend back then; people were writing pop songs about it. And somebody looked around one day and said "Hey, this stock can't possibly be this valuable, and people panicked. It's that herd mentality that causes such violent changes in the market. I remember back when marvel went public-Bill Mantlo left the company, a press release was written, and Marvel stock took a hit. Why? Because people who invested in Marvel without knowing anything about it read that one of their editors (which they equated to a high-level executive) left, which is often a sign of a company in trouble. The people that "win" in the stock market put their money in a major company with a long tradition, and leave it there. Slow and steady, don't you know. It was either Benjamin Franklin or pro wrestler John Bradshaw Leyfield who said "The greatest invention of the human race is compound interest".And BTW, the sub-prime loan was created after pressure from public officials who accused the banks of being…oh, let's call it "preferential" for not extending mortgages to certain parts of the population. The banks tried to explain that it was because the people did not and would not have the money to pay back the loan, not because they were members of a certain part of the population. Yes, they may have jumped into it with both feet once they got started, but it wouldn't have got started in the first place had they not been shamed into it. Legislation is a good idea for the free market, but as a last resort, not as an ingrained part of the process. Everybody knows that things don't get BETTER once the government gets involved, so the threat of it is usually enough to get the wheels grinding. The Comics code, the labels on records, and the video game labels are all examples of industries responding to the threat of government involvement in their industries.

    • Rick Oliver says:

      Sorry Vinnie, I don't think there's any evidence to support your assertion that the evil government somehow forced responsible bankers into the subprime mortgage market. The government did, indeed, play a role by ALLOWING the subprime market to fluorish by DEREGULATING the banking industry. Good old-fashioned bipartisan (you can thank Ronald Reagan AND Bill Clinton) GREED caused the subprime disaster.

      • John Ostrander says:

        I'd also include George W. Bush among those making deregulation in general go i9n the government. Not so much because he believes in less government, I think, but because HIS brand of people are the the heads of business.

        • Rick Oliver says:

          Dubya believes in less government…when it's government that benefits anyone outside his social circle or isn't related to military spending (which also tends to benefit folks in his social circle). He believes that social security is bad ostensibly because it's backed up by nothing but paper (everyone take a dollar out of your wallet and tell me what it made out of). In reality, he's opposed to social security because folks in his social circles don't need it, so why should they have to pay for it?

  2. Glenn Hauman says:

    Amazing how risk-averse people are when they lose money, ain't it?

  3. John Tebbel says:

    I've always hated "certain parts of the population" and am energized to realize they are responsible for this, too. Continue to face front.

  4. Russ Rogers says:

    "Did the stockholders question how the company was being run? Probably not – so long as the rate of return on their dividends was good." 33% of Bear Stearns stock was owned by the employees! This was how the company funded their employee retirement. So, yes, a great deal of the stockholders knew how the company was being run, they ran the company. So, Bear Stearns was bought out by J.P. Morgan (another investment bank), that means huge job redundancies and potentially thousands of Bear Stearns employees will be out of jobs after losing much of their retirement savings too. I'm not sure how much the average employee was responsible for the policies that led to the collapse of the Bear Stearns House of Cards. Now, it's my understanding that the fed didn't PAY 30 Billion out in the Bear Stearns deal. The fed has just guaranteed 30 Billion in Bear Stearns holdings. Basically the Fed is acting like the F.D.I.C. for an Investment Bank (which is unprecedented). The 30 Billion is to back up J.P. Morgan in case there is a "run on the bank" at Bear Stearns. It's up in the air as to how much money this deal will actually cost the government.But you are right, the government did choose to back up the holdings of investors with Bear Stearns rather than the company itself. In this way, the one truly left holding the bag is the average worker at Bear Stearns, who didn't set company policy, the one without a golden parachute, but will still be out of a job and out of their retirement savings too.

  5. Matthew Ceplina says:

    Vinnie – you raise some good points. I didn't know/don't recall that the government convinced banks to adopt sub-primes. Where could I reference it?Russ – well its good to know that the Fed hasn't yet outright bought a bank for JP Morgan. Just guaranteed it so far. I agree that the employees are the losers. But then there's always losers from an acquistion.John, you raise some valid points. Here's some counterpoints. One, the Fed isn't bailing out Bear Stearns. Just in case we are arguing semantics, I don't consider an acquisition to be a bail out. If the Fed would have done what they did last "Sunday earlier in the week then Bear Stearns would still be around". That I consider to be a bail out. Incidentally, the quotation is a paraphrase of a statement that Jim Cramer made on his Mad Money TV show. I don't recall what exactly the Fed did.Two, your comment on Wall Street's faith-based economics is actually a core component of economics itself. If we believe the country is in a recession then it is in one. Which is probably a reason that is influencing Bush's denial of the current economic status of the country.Three, I agree that the lenders should not receive preferential treatment compared to the ones facing foreclosure. However, the hard-nose conservative would probably argue that the lending company affects significantly more lives than any given individual.Four, I doubt that the common stock shareholders of Bear Stearns is happy. I know I wouldn't be happy if my stock was reduced to two dollars a share. (I'm assuming share price as I don't recall specifics.)Five, What scares me more is that the Fed (or at least Bernanke) seems to be playing favorites. If the Fed continues playing favorites while encouraging consolidations of banks, a few banks will rule them (and us) as well. An incredibly scary thought.

  6. Anonymous says:

    I thought Freddic Mac and Fannie Mae were for people who had low incomes and couldn't get a loan from a bank. if true, why would banks create sub-prime mortgages at the govt. request?

  7. Alan Coil says:

    Corporate welfare is good; personal welfare is bad. That's the mantra being proposed by this bailout.As usual in these cases, it is the little guy who gets hosed when these things happen. The people making $50,000 a year or less can only be beaten down by the loss of a pension. Those making $250,000 and more don't need the retirement that they lost; they have enough othr investments to survive a recession.The decades long experiment with trickle-down economics has proven to be a failure. The gutting of Federal agencies designed to protect the common good has left the US vulnerable to thieving moguls. Witness the lead paint, tainted beef, e.coli from spinach, the collapsed bridge in Minnesota, the 2 collapsed cranes in the last weeks—all are indicative of the down sizing of the Federal agencies that protect us all. The toy factory in China was NEVER inspected. The farms where out foods are grown are only inspected once every 3 or 4 years. Inspector jobs were eliminated because the companies doing the work were considered to be above making mistakes or getting greedy. Or even worse, because they were friends of the Republican Party.

  8. Sean Meiers says:

    In all honesty, I don't feel that we should be bailing anybody out. I've got to pay my own mortgage and don't believe I should be paying someone elses. It all comes to greed both corporate and individual. People bought bigger houses in an attempt to keep up with (or exceed) the Joneses. And it is also with the builders, building the McMansions and townhouses becuse they can get more money for those than if the build smaller houses. I am tired of having to spend my money (via taxes) for other people's poor judgement. Or greed. And that is either corporate or individual.

  9. Sean Meiers says:

    Alan, you're confusing trickle down economics with the draw down of funds for inspectors, which can be considered part of deregulation. And I blame Congress for this. Congress controls the purse strings, and they should have told Bush to take a hike when he proposed decreasing the funding for oversight. When the Democrats took over for the Republicasn, they have done nothing to correct the situation. Personally, I would much rather have a lot fewer gov't programs and more oversight on businesses, but I also want a house with a big gameroom so I could get a pool table. (Of course given the original topic of conversation, maybe I should have just bought it and let you all pay for it. :) )

    • Alan Coil says:

      Sean, I think it all goes back to killing the size of government, which was a part of trickle down. Bring down the size of government and all that left over money will trickle down to line everybody's pockets. Empty promises.