Saturday, September 27, 2008

Bailouts and Book Buying

Like most folks I am worried about the economy and curious (and slightly annoyed) about the potential...who are we kidding...inevitable bailout of Wall Street (I think the House votes on the plan on Monday).

700 billion dollars! Really?

What is clear is that the bailout will be financed by the taxpayers. There is no magic pot of money sitting somewhere ready to be tapped into to fund this financial catastrophe. Why was this allowed to get so far out of hand? Why does Wall Street believe that the government should help them out of the hole they have dug for themselves? What happened to "the market will correct itself" and personal responsibility? I know all the talking heads are saying we don't have a choice at this point, and the bailout MUST happen or our economy is going to spiral even deeper into chaos. According to the Treasury secretary Henry Paulson, we are moments from a depression. If what they are saying is true, and the mismanagement by the folks on Wall Street is inextricably tied to the financial well-being of the people of America (if not the world), then why weren't they keeping an eye on our financial cousins all along? Aren't there people, paid good ass money, in charge of keeping track of all this. Didn't they see this coming?

Every day there appears to be a new casualty. On Thursday, WaMu Bank (biggest bank to fail in US history) went down the toilet (assets sold to JP Morgan Chase for 1.9 billion dollars). The week before, Lehman Brothers filed bankruptcy, and AIG received some sort of "favorite nation" status when they received a $85 billion bailout from the feds. This after we threw out life preservers to Fannie Mae and Freddie Mac earlier in the month. And let's not forget that the dollar is as weak as atrophied legs on a coma patient. As the folks on the Hill try and come up with a plan that takes care of "Wall Street and Main Street," I have to ask - why were these banks allowed to dispense all these risky loans to people and businesses that they knew couldn't repay them?

When I was buying my house five years ago, just before the market became so inflated that the same house I purchased for less than $200,000, could be sold "as is" for $350.000; I was informed by my financial officer that according his calculations that I could actually afford to borrow $300,000. On what planet? He informed me that although my house was relatively cheap, I could borrow the rest of the money to make major renovations on the house and increase its value. Okay...but I can't afford a $2,000 house note. Again, he assured me that he could "work a deal" and the note wouldn't be that high - initially. That's right- an ARM. He told me I was smart and talented and he just knew that I would be making an additional $10,000 before the ARM went into affect. Seriously? I told him I worked for a nonprofit. End of story. But clearly a lot of folks let these financial wizards talk them into homes (cars, credit cards, investments) they couldn't afford in the long run, and when the bill came due, they were screwed royally.

So what does the the failing economy and looming bailouts have to do with book buying? Everything. In fact it is impacting every area of our society. When you are paying $4.00 for gas, barely keeping up with your mortgage, and trying to keep food on your family's table, you suddenly have to start making choices, and a book comes off the must have item list, very quickly. Unless of course you are selling how to make money and survive financial meltdowns -then those might be bestsellers.

When I started the production of Just Like A Girl I was unaware, that in a year, we (as in the US) would be in such deep doodie - economically. Now that I am selling and marketing the book it is absolutely apparent. With this new information I've had to make adjustments, rethink how I book readings (especially on the west coast - since the price to fly has doubled),and how many review copies of the anthology I can send out. I've had to step up my marketing of the book with an emphasis on sales through the GirlChild Press website ( makes 55% on each sale of the book through their site) and crunching the numbers on what bulk sales vs individual sales will look like over the next 6 months. Since I know that Uncle Sam will not be coming by GirlChild Press anytime soon, and writing me a bailout check to keep it afloat, I will have to be a good fiscal manager and make realistic and responsible decisions to insure that the Press will be around for many more years. What a novel concept.

Until later!


Carmen said...

Tell the truth, woman! I'm glad you had the good sense to sense the danger in that up-front "offer" of more debt than you could bear. To hear"leaders" like Palin talk about the responsibility borrowers have for taking out more than they could bear is enfuriating for exactly the reasons you describe. When someone who claims to be on your side sells you a pipedream then blames you for smoking the pipe, well, it's like living in a Republican regime... Oh wait, we are.

Books now feel like luxuries when they felt like lifeblood. I can't imagine what it's like for independent publishers and booksellers. I heard that this weekend, a number of booksellers had to THROW AWAY books that were damaged in the deluge on Saturday. First they pay to be there, then they pay to have been there, in the form of losses I can't even imagine.

Most appalling of all of this is the shock doctrine of "fear the worst, it's here, we must act NOW!!! (and if you really want to be safe, you can't know what, exactly, we're doing and no, you can't regulate things--we're wasting valuable time even TALKING about what we're going to do--we gotta act NOW!!!!)."

Stay strong, and keep talking about the connections between it all.

Much love to you.

Lisa C. Moore said...

alright, Michelle! as a fellow publisher, i know whereof you speak. but i think the book business will be OK. people will get tired of the constant fear fear fear that the TV puts out, and will seek some solace in the pages of a book. whether that book be from the library, or from the bookstore, or the publisher herself, still that book will be sold. we will just have to accommodate the changes in the marketplace, that's all. this, too, shall pass. (and i'm glad you didn't fall for the mortgage hard sell.)