Thoughts on Law and Life

The Official Blog of Astrab Legal Services LLC

Inaugural Thoughts

For those of you who know me, I am pretty conservative and end up pretty far from the left on most of my opinions. It is therefore a great admission that I am actually excited about the Inauguration of Barack Obama. This country has been through a lot in the past decade – a lot of the problems were not of our creation and President Bush did what he felt was right to protect our nation. On the other hand, the whole financial crisis has been disturbing at best and nearly criminal at its core. I feel that the government (both sides of the aisle) could have done a lot more to not only monitor the nation’s financial institutions, but to take proactive measures to step in and say ‘enough’ when it was obvious that there were issues.

A couple examples:

  • When I left my law practice to enter the world of finance, I could immediately see issues back in 2005. At that time, my employer was really big on securities-based lending. They were pushing advisors to sell their clients on the idea of using their securities portfolios to finance the purchase of homes, boats and even to pay for weddings! In an up market that is all well and good, but any student of history, or someone who simply reads the newspaper, can tell you that markets not only go up, but they go down as well. To utilize a portfolio for financing brings with it the risk that the markets will drop, thus causing the collateral utilized for the loan to drop in value, thus necessitating the need to deposit more funds to secure the financing. This concept was ignored by management with an arrogance that astounded me at the time. If someone with a few weeks experience could see the problems, why couldn’t those folks running the show in New York also see it? The best answer that I have to this is that they simply did not care and became willfully blind to the situation.
  • The most obvious problem is in the sub-prime mortgage crisis. Who in their right mind believed that an industry based on lending to the working poor at variable rates with little or no down-payment was a sustainable business model?

If the government had stepped in and put its foot down on these two practices alone, perhaps we would not be in the situation that we face today. I am no fan of overbearing governmental intervention, but at times the government needs to act in the best interests of its tax-paying citizens and whack some industries (and the leaders of those industries) around with a big stick.

So why am I excited about the Inauguration? I believe that a great deal of the problems that we face today are due to bitter bipartisanism. So many people hated President Bush that Democrats (as well as some Republicans) were loathe to cooperate with his Administration in order to avoid being lumped in with his policy decisions. The logjam created by this hesitancy was historic and essentially ground Washington to a halt. Now that a new administration is taking over, perhaps the logjam can be alleviated and progress on many fronts can be initiated.

Do I agree with President Obama on many issues? No. I am open, however, to giving the man a chance to fulfill his promises and move America forward. I refuse to jump aboard the partisan bandwagon and criticize him before he has even had a chance to make any substantive policy decisions. The day after the election I was already receiving Facebook invitations for “Impeach Obama” groups. Most of those were jokes, but reflect an attitude that must stop if we are to progress as a society. It is time to put down our partisan politics and work to get our nation out of the mess that it is in.

Some ideas:

  • Hold your leaders accountable – Hold President Obama, your congressional representative, Senator and even city council members and your Mayor to their campaign promises. If your councilperson promised trash pickup before 11:00 in the morning and it is still getting picked up at 4:00, give him a call and give him hell about it. If your congressional representative promised to reach across the aisle and work towards more compromise legislation, make sure that he or she is doing it and simply not spewing out the same party line crap that got us into the mess that we are in today.
  • Pay attention to your investments – Make sure that you understand your investments, your risk tolerance and your time horizon. If you feel uncomfortable with something, give your advisor or banker a call and demand an explanation. If you are not satisfied with the explanation, find another advisor or banker – there are plenty out there to choose from.
  • Spend and save wisely – There is a balance that must be achieved with spending/saving. If we all simply crawl into shells and refuse to spend, the economic downturn will be extended. At the same time, we must choose where and when to spend our money very wisely. Sit down and set up a budget – include all of your expenses and set aside money to be saved for the proverbial rainy day (3 months expenses at a minimum) and plan for major purchases. If you want to buy a $900 television, then budget $100 a month (or an amount that is affordable) and pay cash for the TV in 9 months instead of using a credit card. The economy will slowly improve and you will not incur further debt.
  • Get involved – join an organization that promotes community service or works constructively towards promoting a certain viewpoint. Run for office. Make sure that you are not silent about issues for which you have passion! Our leaders must know that we will not be sheep any longer.
  • Stop watching the news – the evening news programs (particularly network) know that blood and bad news mean ratings. They will more often than not lean their presentation to the dark side of the story and thus fuel the fires of negativity. Watch the news for the weather and sports and live your own life.

My bottom line is that I am an American, not a Democrat or Republican. I am tired of the BS that I am seeing out of Washington and I sincerely hope that the inauguration of a new president will help us move more towards being Americans first, partisan second.

Michael K. Astrab is the principal attorney for Astrab Legal Services LLC, a general practice law firm located in Cleveland, Ohio. He may be reached at (216) 577-0013 or via e-mail at astrablegal@sbcglobal.net. This blog is designed for informational purposes only and does not constitute legal advice.

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January 19, 2009 - Posted by | Financial, Law, Life | , , , , ,

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