May 19, 2011
I’m writing because my family, friends, and I were affected by the economic collapse of 2008, and we don’t want it to happen again.
My good friend, a bright, energetic and intelligent 25 year old woman with a Masters in Education and School Counseling is unable to find a job. She has applied to over ONE HUNDRED positions, from which she recieved three interviews. She is unable to utilize the education she worked so hard for, and spent quite a bit of money on. This is an even further detrement to our society as the knowledge, skills, ability, care and concern she could provide to our nation's children is being missed.
My mother, a 57 year old Social Worker, who has worked tirelessly to improve the lives of abandoned and neglected children in our country was "let go" from her job as an adoption supervisor after over 22 years at the same agency. Because this agency is part of the Catholic diocese, the money had simply run out, and paying my mother (based on the number of years she was an employee) was simply too expensive. She has been in search of a job for over a year and a half now, and because of her experience and age, she is unable to find gainful employment. It is deeply saddening to watch my mother struggle to find a job and for my parents to figure out how they will pay for my younger sister's college education. Her unemployment will run out soon, and my parents fear for the future.
I could on and on and list more examples of these situations, but we are ALL aware of them- it's what we are going to do about them. I am 26 years old, making less than $30,000 a year (and I have a college education) and I still find ways to contribute and give back to my community whenever possible. It sickens me to watch millionaires and billionaires recieve more and more tax breaks and bonuses while the MAJORITY of the American people are suffering at their expense. It is no longer the "lazy" person who doesn't want to get a job, or the person taking "advantage" of the welfare system, but regular, everyday hard-working, college educated people who can't even find a job or pay their bills. American families and children are suffering, and it's time someone takes some responsibility for it.
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.
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,
Rebecca Dries