Today as I was driving my son to work, (he’s wrecked his car again), I was listening to the local NPR station. They were running a story about the Puerto Rican debt crisis. The report talked about how their government has been mis-spending funds and borrowing money on bond debt for over 20 years.
Apparently a lot of 8%, tax free bonds were issued a few years ago and greedy hedge fund managers loaded up on them, knowing full well that there would be a high risk of default. Heck, the report even said that the Puerto Rican government knew they couldn’t pay back the debt when they issued the bonds. Today they can’t even make the interest payments. There’s a lot of discussion now on Capitol Hill regarding a potential bailout.
I’m not a fan of bailouts because I believe they ‘bail out’ the bad guys. I realize we would have gone into a depression had we not bailed out GM years ago, but at my core, I believe we should not reward poor behavior. The tremendous debt that has been built up now as a result of the quantitative easing program will have to be repaid.
I could go on and on with this topic, but I guess I got to thinking about corruption while listening to the radio. Where does corruption begin and is it everywhere? What the heck does your views on bailouts and corruption have to do with your growing up blog site stories anyway? I guess my point to you is to always be on the lookout. Even the most honest looking person sometimes could be harboring a secret, trying to take advantage of you.
When I worked at HP Deuscher’s foundry in the early 80’s in Hamiltucky, I was like most young people; I trusted everyone. Working at small hometown businesses has some advantages over that of working for large corporations. There often times is a greater sense of family, a more relaxed working atmosphere. People take turns bringing in the morning doughnuts, making the department coffee or doing the lunch run for the hamburgers.
Local clients and sales representatives stop in on a daily basis and they too feel a bit like family. At Christmas time we’d distribute a ham to every employee. Through the year, we’d also get various people stop in, looking to sell locally raised and grown products like tomatoes, beans and even eggs. In fact, we had a nice older lady who came in for several years on every other Monday. She raised her own chickens and would drive around town to many local places of businesses in the effort of selling her delicious, fresh farm eggs. The people there at the office said that she did this to have something to do, she didn’t need the money. Well, she did drive up in a nice new car. I’m sure she had a name, but we all just called her The Egg Lady.
I never knew where The Egg Lady lived or raised her chickens. I simply followed the crowd that I worked with there in the main office. They bought her eggs and claimed that they were delicious, more delicious than store-bought chicken eggs because they were fresher. And so, I too would buy a dozen or two of the fresh, farm-raised eggs which my family and I would then enjoy on the weekends when we cooked up our delicious weekend breakfasts.
Boy, were those eggs delicious. We had no idea what we had been missing by eating those crummy store eggs. The chickens for those store eggs must be defective or something.
I worked at Deuscher’s from 1979 to 1987 and in that time I must have purchased eggs for perhaps three of those years. I think it was towards the end of my gig at the foundry, perhaps 1986, when on a normal Monday egg day The Egg Lady showed up as she always did. At the particular time on this day, not many people of the regular egg buyers were around. I don’t recall what was going on, but I decided to strike up a little conversation with our a Egg Lady. We were just chitchatting and I asked her where she lived. She told me and the area just did not mentally add up to me as the chicken-raising neighborhood it should be. So then I asked her where her chickens were.
Oh, I don’t have any chickens.
No chickens, well then, where do you get your eggs?
I was thinking, ok there must be a farmer’s market she frequents. But no, she said, “oh I used to raise them, but got out of that years ago. I have several places I get my eggs”.
What? The Egg Lady does not have her own eggs? The King is wearing no clothes? There is no Santa Clause? You mean she is buying those eggs at other places, putting them into her own old-looking crates and then selling them to us at a big markup?
What a letdown. I felt as if I’d walked in on my parents having sex (shudder). When folks returned back to the main office, I’d told them about my little convo with our egg lady. Naturally, they thought I was making it up. I can’t blame them, I had spent many years there building up a reputation for enjoying a good prank. But after thirty minutes or so of convincing, they all came to the same conclusion as I – there was no Santa Claus. (Had I not known any better, I would swear my dad was behind this – story link).
Did we bail out The Egg Lady? Did we continue to overpay for the same eggs we could buy at any local grocery store? You bet we did not! Sure, she was still the same nice old rich lady, but we all need to abide by rules and communicate with each other.
Today, Carl Icahn said that a “day of reckoning” is coming soon (link). There are a few notable others making the same claim, indicating forthcoming issues related to the massive debt that has been built up all throughout the various economic sectors, (such as automotive, student loans, corporate leveraging, etc).
For about the same number of years that The Egg Lady sold us her golden eggs, the Fed has been engaged in a Quantitative Easing program. Money has been printed, everyone’s borrowed the cheap money and built up enormous debt and the bonds have been bought and sold. For all of our sakes, let’s all hope The Egg Lady has kept her golden chickens. If the ‘Bear Profits’ are right, we’re all going to need some of those golden eggs.