February 9, 2012

AARP survey shows optimism for economic future

A new survey from the American Association of Retired Persons shows Iowans have a high degree of optimism despite the current economic woes and other problems facing the nation. The advocacy group for older Americans surveyed 700 Iowans who voted in the November 4th election, and found that 70% believe the country is headed in the wrong direction. However, 67% say conditions will be better four years from now.

Jeff Lowe, a research director for A-A-R-P, says it’s unclear whether the optimism comes from the election of Barack Obama as president. "I think in some sense, the optimism you’re seeing among Iowans, and among the national population actually, is maybe an artifact of the honeymoon period," Lowe said. "It could be the case if you have a new administration, if you have a changeover, of any party, it could be that people are more optimistic then because of the changeover."

Lowe says the survey results offer hope. "Even though there are some really difficult situations in the country right now and the economy has some real challenges, that people are still looking toward the future, and they’re still asking to get things done, and they’re still concerned with the real issues for most Americans. That’s not surprising, but it’s encouraging." Nearly half of Iowans surveyed say the issue of healthcare factored in how they voted, second only to the economy on a list of important issues.

Harkin introduces law to regulate financial transactions

Senator Tom Harkin has introduced legislation to establish new oversight of financial transactions that some argue were the cause of the Wall Street meltdown. Harkin, a Democrat, proposes that the Commodities Futures Trading Commission begin regulating financial transactions called swaps and derivatives.

"You would then have price discovery. You would know the buyers, the sellers and how much was being transacted. The exchanges could then set margin requirements so that you would have to put up a certain margin if you were a buyer of those derivatives," Harkin says. "That’s what I’m seeking to do is get it out there so everyone knows what we’re doing and it’s all open, above board."

Some experts estimate there are over half-a-trillion "swaps" in force today, transactions that occurred outside the oversight of federally-chartered financial exchanges where, for instance, stocks are traded. Harkin would give the owners of swaps and derivatives a year to register on the exchange, publicly disclosing who owns the swap or derivative and its value.

"So within that next 12 months, they would all have to come forward and be on that exchange," Harkin says. Financial guru Warren Buffet has called swaps and derivatives "financial weapons of mass destruction" and Harkin admits he thought about trying to outlaw them.

"Believe me, I considered that especially in the area of what we call naked swaps," Harkin says. "That’s where someone purchases bonds on these derivatives, but they’re not the buyer or they’re not the seller. They’re just sort of gambling on the side." But Harkin says some use these kind of contracts to lock in a price for buying or selling, a practice called hedging, and Harkin says that’s useful in the marketplace.