By Danica Dow, SOHH
After the House rejected the Bush administration's $700 billion bailout plan, SOHH caught up with West Coast emcee/ex-stockbroker Paris to get the low down on the proposal and find out how the hip-hop industry and you will be affected by the current credit crunch.
Paris had his first hit single, "The Devil Made Me Do It" in 1990, the same year that he earned a Bachelor's Degree in managerial economics. Since then he's bounced between careers. He's released several albums and he spent 5 years working as a stockbroker.
According to the San Francisco based rapper, the worst thing about the current financial crisis is that consumer confidence is low, which means that the average buyer is not optimistic about the state of the economy and therefore has reduced spending.
"Consumer confidence needs to maintain a certain level just for the country to run," he explained. "If nobody is spending money then everything comes to a standstill and that's where I feel we're going next." To avoid this the Bush administration proposed the Emergency Economic Stabilization Act of 2008, which is intended to bail out the U.S. financial system.
"What the bailout entails is a $700 billion package that needs to be approved by Congress to provide liquidity to lenders," Paris explained. "There needs to be money available for lenders to allow you to borrow."
According to Paris once the bailout is passed, it will become easier for the average American citizen to get a car loan, home equity loan or student loan.
"Of course when the bailout package is passed there will be more money available to people," he explained. "Anytime there's money available, people borrow and people spend and that's what stimulates the economy."
Though the White House's proposition can lessen the damage, the United States is still facing a severe economic stretch and Paris believes that the effects will be seen in every industry, including hip-hop.
"With this stimulus package will hip-hop return to business as usual? It probably won't," said Paris. "The hip-hop industry has been affected long before this."
Paris thinks that we'll continue to see record companies closing, merging and trying to maintain with less operating money. More label employees will be laid off, fewer artists will be offered deals and some signed artists will be dropped from their labels.
"Hardship affects everything else," he said. "[It makes] it more difficult for a business to run, makes it more difficult [for] artists to get signed, for budgets to remain large, for people to travel, all of those things that go along with entertainment as we know it."
Paris' new album Acid Reflex hits stores on October 28th.