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On September 01 2012 02:49 paralleluniverse wrote:Show nested quote +On September 01 2012 02:17 JonnyBNoHo wrote:On September 01 2012 01:53 paralleluniverse wrote:On September 01 2012 01:40 JonnyBNoHo wrote:On September 01 2012 01:11 paralleluniverse wrote:
Under Jonny's logic, if Obama spent $~1 trillion on making bricks to be dumped into the Pacific ocean, we shouldn't blame him for blowing up the deficit. That would only be 40% of a $~2.5 trillion deficit. What about the other 60%? The other 60% is the marginal spending increases or tax cuts beyond the CBO baseline. You should include it along with the $1T in brick chucking. Otherwise you are just being dishonest. What? The other 60% IS the baseline. Under this example, the baseline is $1.5 trillion in deficit, then brick chucking causes the deficit to blow up another $1 trillion beyond the baseline. Just like how the baseline when Bush was first put in office was to have indefinite surpluses, but his policies blew up the budget, causing trillions more dollars spent relative to the baseline. If you increase the deficit more than the baseline, then you've made the deficit worse, if you reduce the deficit relative to the baseline, than you've made it better. Bush did the former. Let's use this report here.First let's ignore economic and technical changes to the baseline and just focus on policy changes. Let's also make one more change - the CBO does not include a line item for war costs so let's use the CBPP's number and take it from discretionary spending. For 2010 (last year of the Bush tax cuts) - the percentages refer to the change in the CBO 2001 baseline estimate. Bush Tax Cuts 12% War Costs 8% ARRA 19% Other Tax & Spend 10% Discretionary Spending 28% Medicare Part D 3% TARP 0% Net Interest 19% In total these policy changes moved the CBO baseline $1.5T more towards the red. Interest would still need to be allocated - which would make Bush-era percentages higher but that would apply to discretionary spending as well as the tax cuts and wars. The important thing is that we are not longer ignoring the increase in discretionary spending or the other small tax and spend policy changed that occurred under Bush. So now you're gonna blame the deficit mostly on "discretionary spending". Discretionary spending includes war spending, so nice double counting. So, wonder why discretionary spending blew up?
One actually has to be really careful with statistics and check their exact definitions because Bush funded the wars almost entirely through emergency supplemental spending instead of discretionary spending that appears on the budget. For example, the 2006 budget had $512.1 billion dollars of defense spending, it had $0.00 of spending for the additional costs beyond the peacetime defense budget for continuing combat operations in Iraq and Afghanistan.
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"But don't tell me everyone who made a dumb decision before 2008 got tricked. The vast majority of them knew what they were getting into"
Maybe, but then they didnt have a choise.
I dont care about bubbles and crashes in the stockmarket, normal people dont need to own stocks and normal people can be indifferent towards that.
Everyone needs a house though ,
you cant blame the people taking a huge mortgage and buying a house in 2007-2008 at peak,people have to live somewhere.
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Don't need your links.
Use the one I already linked: https://en.wikipedia.org/wiki/Janesville_GM_Assembly_Plant
It describes the chronology:
-On Feb 2008, Obama says his policies would keep the plant open for 100 years.
-On Oct 2008, GM announces that the plant will be closed and largely idled by Dec 23 2008.
-On Dec 23 2008, almost everything shuts down except a small crew working on Isuzu.
-On Jan 20 2009, Obama takes office. On April 21 2009, everything shuts down.
Given 1) that GM announced that the plant will be closed, 2) that it was idled, 3) that virtually everyone was laid off, and 4) this:
![[image loading]](http://media.gazettextra.com/img/photos/2008/12/24/LastGMBannerPose_t715.jpg?529764a1de2bdd0f74a9fb4f856b01a9d617b3e9)
And given that 1), 2), 3), 4) all happened on or before Dec 23 2008, before Obama took office, do you not consider this the point of no return?
Assuming that you agree that this is the point of no return, can you blame Obama for not saving a plant that was doomed before he had the power to do anything?
If during the campaign, Obama had promised your friend a ride on Air Force One, but your friend died of a heart attack on 23 Dec 2008, would you blame Obama for not keeping his promise?
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On September 01 2012 03:09 paralleluniverse wrote:Don't need you links. Use the one I already linked: https://en.wikipedia.org/wiki/Janesville_GM_Assembly_PlantIt describes the chronology. Obama says he's policies would keep the plant open for 100 years in Feb 2008. In Oct 2008, GM announces that the plant will be closed and largely idled by Dec 23 2008. On Dec 23 2008, basically every shuts down except a small screw working on Isuzu. On Jan 20 2009, Obama takes office. On April 21 2009, everything shuts down. Given that 1) the plant announced that the plant will be closed, 2) that it was idled, 3) that virtually everyone was laid off, and 4) this: And given that 1), 2), 3), 4) all happened on or before Dec 23 2008, before Obama took office, do you not consider this the point of no return? Assuming that you agree that this is point of no return, can you blame Obama was not saving a plant that was doomed before he had to power to do anything? If Obama had promised to take your to ride on Air Force One during the campaign, but your friend died of a heart attack on 23 Dec 2008, would you blame Obama for not keeping his promise?
What's a point of no return? Certainly an auto plant can be restarted and workers can return.
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On September 01 2012 03:00 JonnyBNoHo wrote:Show nested quote +On September 01 2012 02:53 paralleluniverse wrote:On September 01 2012 02:30 JonnyBNoHo wrote:On September 01 2012 02:20 paralleluniverse wrote:Ben Bernanke's speech today: http://federalreserve.gov/newsevents/speech/bernanke20120831a.htm Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.
Second, fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth. Notwithstanding some recent improvement in tax revenues, state and local governments still face tight budget situations and continue to cut real spending and employment. Real purchases are also declining at the federal level. Uncertainties about fiscal policy, notably about the resolution of the so-called fiscal cliff and the lifting of the debt ceiling, are probably also restraining activity, although the magnitudes of these effects are hard to judge.30 It is critical that fiscal policymakers put in place a credible plan that sets the federal budget on a sustainable trajectory in the medium and longer runs. However, policymakers should take care to avoid a sharp near-term fiscal contraction that could endanger the recovery.
Third, stresses in credit and financial markets continue to restrain the economy. Earlier in the recovery, limited credit availability was an important factor holding back growth, and tight borrowing conditions for some potential homebuyers and small businesses remain a problem today. More recently, however, a major source of financial strains has been uncertainty about developments in Europe. These strains are most problematic for the Europeans, of course, but through global trade and financial linkages, the effects of the European situation on the U.S. economy are significant as well. Some recent policy proposals in Europe have been quite constructive, in my view, and I urge our European colleagues to press ahead with policy initiatives to resolve the crisis. Basically, stop the austerity now, and have a creditable plan for reducing the deficit over the long run, not blow it up with $4 trillion in tax cuts for the rich that is "mathematically impossible" to pay for within the promises of the Romney/Ryan plan. There's no austerity now. Uncle Ben doesn't want to see the fiscal cliff occur, which would be relative austerity to today. "State and local governments still face tight budget situations and continue to cut real spending and employment" isn't austerity only in your world of bizarro-semantics. Republicans should love the fiscal cliff given their deficit fetishism. How are you defining austerity?
Austerity = cuts in government spending.
"State and local governments still face tight budget situations and continue to cut real spending and employment", because they need to cut spending.
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On September 01 2012 03:18 paralleluniverse wrote:Show nested quote +On September 01 2012 03:00 JonnyBNoHo wrote:On September 01 2012 02:53 paralleluniverse wrote:On September 01 2012 02:30 JonnyBNoHo wrote:On September 01 2012 02:20 paralleluniverse wrote:Ben Bernanke's speech today: http://federalreserve.gov/newsevents/speech/bernanke20120831a.htm Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.
Second, fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth. Notwithstanding some recent improvement in tax revenues, state and local governments still face tight budget situations and continue to cut real spending and employment. Real purchases are also declining at the federal level. Uncertainties about fiscal policy, notably about the resolution of the so-called fiscal cliff and the lifting of the debt ceiling, are probably also restraining activity, although the magnitudes of these effects are hard to judge.30 It is critical that fiscal policymakers put in place a credible plan that sets the federal budget on a sustainable trajectory in the medium and longer runs. However, policymakers should take care to avoid a sharp near-term fiscal contraction that could endanger the recovery.
Third, stresses in credit and financial markets continue to restrain the economy. Earlier in the recovery, limited credit availability was an important factor holding back growth, and tight borrowing conditions for some potential homebuyers and small businesses remain a problem today. More recently, however, a major source of financial strains has been uncertainty about developments in Europe. These strains are most problematic for the Europeans, of course, but through global trade and financial linkages, the effects of the European situation on the U.S. economy are significant as well. Some recent policy proposals in Europe have been quite constructive, in my view, and I urge our European colleagues to press ahead with policy initiatives to resolve the crisis. Basically, stop the austerity now, and have a creditable plan for reducing the deficit over the long run, not blow it up with $4 trillion in tax cuts for the rich that is "mathematically impossible" to pay for within the promises of the Romney/Ryan plan. There's no austerity now. Uncle Ben doesn't want to see the fiscal cliff occur, which would be relative austerity to today. "State and local governments still face tight budget situations and continue to cut real spending and employment" isn't austerity only in your world of bizarro-semantics. Republicans should love the fiscal cliff given their deficit fetishism. How are you defining austerity? Austerity = cuts in government spending. "State and local governments still face tight budget situations and continue to cut real spending and employment", because they need to cut spending.
That's certainly an unorthodox definition of austerity. But yes, under that definition austerity exists.
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On September 01 2012 03:18 paralleluniverse wrote:Show nested quote +On September 01 2012 03:00 JonnyBNoHo wrote:On September 01 2012 02:53 paralleluniverse wrote:On September 01 2012 02:30 JonnyBNoHo wrote:On September 01 2012 02:20 paralleluniverse wrote:Ben Bernanke's speech today: http://federalreserve.gov/newsevents/speech/bernanke20120831a.htm Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.
Second, fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth. Notwithstanding some recent improvement in tax revenues, state and local governments still face tight budget situations and continue to cut real spending and employment. Real purchases are also declining at the federal level. Uncertainties about fiscal policy, notably about the resolution of the so-called fiscal cliff and the lifting of the debt ceiling, are probably also restraining activity, although the magnitudes of these effects are hard to judge.30 It is critical that fiscal policymakers put in place a credible plan that sets the federal budget on a sustainable trajectory in the medium and longer runs. However, policymakers should take care to avoid a sharp near-term fiscal contraction that could endanger the recovery.
Third, stresses in credit and financial markets continue to restrain the economy. Earlier in the recovery, limited credit availability was an important factor holding back growth, and tight borrowing conditions for some potential homebuyers and small businesses remain a problem today. More recently, however, a major source of financial strains has been uncertainty about developments in Europe. These strains are most problematic for the Europeans, of course, but through global trade and financial linkages, the effects of the European situation on the U.S. economy are significant as well. Some recent policy proposals in Europe have been quite constructive, in my view, and I urge our European colleagues to press ahead with policy initiatives to resolve the crisis. Basically, stop the austerity now, and have a creditable plan for reducing the deficit over the long run, not blow it up with $4 trillion in tax cuts for the rich that is "mathematically impossible" to pay for within the promises of the Romney/Ryan plan. There's no austerity now. Uncle Ben doesn't want to see the fiscal cliff occur, which would be relative austerity to today. "State and local governments still face tight budget situations and continue to cut real spending and employment" isn't austerity only in your world of bizarro-semantics. Republicans should love the fiscal cliff given their deficit fetishism. How are you defining austerity? Austerity = cuts in government spending. "State and local governments still face tight budget situations and continue to cut real spending and employment", because they need to cut spending.
Yeah, I'd still call it "fiscal discipline," lol. What about "growth?"
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On September 01 2012 03:20 JonnyBNoHo wrote:Show nested quote +On September 01 2012 03:18 paralleluniverse wrote:On September 01 2012 03:00 JonnyBNoHo wrote:On September 01 2012 02:53 paralleluniverse wrote:On September 01 2012 02:30 JonnyBNoHo wrote:On September 01 2012 02:20 paralleluniverse wrote:Ben Bernanke's speech today: http://federalreserve.gov/newsevents/speech/bernanke20120831a.htm Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.
Second, fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth. Notwithstanding some recent improvement in tax revenues, state and local governments still face tight budget situations and continue to cut real spending and employment. Real purchases are also declining at the federal level. Uncertainties about fiscal policy, notably about the resolution of the so-called fiscal cliff and the lifting of the debt ceiling, are probably also restraining activity, although the magnitudes of these effects are hard to judge.30 It is critical that fiscal policymakers put in place a credible plan that sets the federal budget on a sustainable trajectory in the medium and longer runs. However, policymakers should take care to avoid a sharp near-term fiscal contraction that could endanger the recovery.
Third, stresses in credit and financial markets continue to restrain the economy. Earlier in the recovery, limited credit availability was an important factor holding back growth, and tight borrowing conditions for some potential homebuyers and small businesses remain a problem today. More recently, however, a major source of financial strains has been uncertainty about developments in Europe. These strains are most problematic for the Europeans, of course, but through global trade and financial linkages, the effects of the European situation on the U.S. economy are significant as well. Some recent policy proposals in Europe have been quite constructive, in my view, and I urge our European colleagues to press ahead with policy initiatives to resolve the crisis. Basically, stop the austerity now, and have a creditable plan for reducing the deficit over the long run, not blow it up with $4 trillion in tax cuts for the rich that is "mathematically impossible" to pay for within the promises of the Romney/Ryan plan. There's no austerity now. Uncle Ben doesn't want to see the fiscal cliff occur, which would be relative austerity to today. "State and local governments still face tight budget situations and continue to cut real spending and employment" isn't austerity only in your world of bizarro-semantics. Republicans should love the fiscal cliff given their deficit fetishism. How are you defining austerity? Austerity = cuts in government spending. "State and local governments still face tight budget situations and continue to cut real spending and employment", because they need to cut spending. That's certainly an unorthodox definition of austerity. But yes, under that definition austerity exists.
Unorthodox?
In economics, austerity refers to a policy of deficit-cutting by lowering spending often via a reduction in the amount of benefits and public services provided.[1] Austerity policies are often used by governments to try to reduce their deficit spending[2] and are sometimes coupled with increases in taxes to demonstrate long-term fiscal solvency to creditors.[3]
https://en.wikipedia.org/wiki/Austerity
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Ron Paul
User was warned for this post
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The more that I think about it, the more that I like what the republicans and Romney did at the convention. I like that they largely attacked Obama through the lenses of disappointment and regret. I like that they stayed very positive. Most of all, I like how they humanized Romney. Assuming that Americans at large were paying attention to the convention, democrats are going to have a much harder time demonizing him as a cold-blooded corporate raider. Best of all, I think the convention finally made conservatives comfortable with Romney. They understand him better now through the stories that were told. The partLy is now Romney's in a way that it wasn't last week. Republicans are going to want to vote for Romney now and not just vote against Obama.
I think democrats are going to have a very difficult time matching the positive tone of the republican convention. In fact, the contrast is likely to be quite stark. This won't be the hope and change convention of 2008. It is going to be a far smaller event ideologically.
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On September 01 2012 03:07 Rassy wrote:
"But don't tell me everyone who made a dumb decision before 2008 got tricked. The vast majority of them knew what they were getting into"
Maybe, but then they didnt have a choise.
I dont care about bubbles and crashes in the stockmarket, normal people dont need to own stocks and normal people can be indifferent towards that.
Everyone needs a house though ,
you cant blame the people taking a huge mortgage and buying a house in 2007-2008 at peak,people have to live somewhere.
Actually, most normal people DO own stocks because they have some kind of invested savings, whether it is private, a mutual fund, or some kind of pension.
Buying a house is very different from having somewhere to live. Buying a home IS an investment, which is what caused the mania. There was this idea that house prices could never fall, so people could buy homes they couldn't afford and keep refinancing the loan until their income rose to a level where they could make payments.
Out of curiosity, coming from the Netherlands, do you ever learn about the Tulip mania?
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On September 01 2012 03:18 paralleluniverse wrote:Show nested quote +On September 01 2012 03:00 JonnyBNoHo wrote:On September 01 2012 02:53 paralleluniverse wrote:On September 01 2012 02:30 JonnyBNoHo wrote:On September 01 2012 02:20 paralleluniverse wrote:Ben Bernanke's speech today: http://federalreserve.gov/newsevents/speech/bernanke20120831a.htm Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.
Second, fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth. Notwithstanding some recent improvement in tax revenues, state and local governments still face tight budget situations and continue to cut real spending and employment. Real purchases are also declining at the federal level. Uncertainties about fiscal policy, notably about the resolution of the so-called fiscal cliff and the lifting of the debt ceiling, are probably also restraining activity, although the magnitudes of these effects are hard to judge.30 It is critical that fiscal policymakers put in place a credible plan that sets the federal budget on a sustainable trajectory in the medium and longer runs. However, policymakers should take care to avoid a sharp near-term fiscal contraction that could endanger the recovery.
Third, stresses in credit and financial markets continue to restrain the economy. Earlier in the recovery, limited credit availability was an important factor holding back growth, and tight borrowing conditions for some potential homebuyers and small businesses remain a problem today. More recently, however, a major source of financial strains has been uncertainty about developments in Europe. These strains are most problematic for the Europeans, of course, but through global trade and financial linkages, the effects of the European situation on the U.S. economy are significant as well. Some recent policy proposals in Europe have been quite constructive, in my view, and I urge our European colleagues to press ahead with policy initiatives to resolve the crisis. Basically, stop the austerity now, and have a creditable plan for reducing the deficit over the long run, not blow it up with $4 trillion in tax cuts for the rich that is "mathematically impossible" to pay for within the promises of the Romney/Ryan plan. There's no austerity now. Uncle Ben doesn't want to see the fiscal cliff occur, which would be relative austerity to today. "State and local governments still face tight budget situations and continue to cut real spending and employment" isn't austerity only in your world of bizarro-semantics. Republicans should love the fiscal cliff given their deficit fetishism. How are you defining austerity? Austerity = cuts in government spending. "State and local governments still face tight budget situations and continue to cut real spending and employment", because they need to cut spending.
I would make it more specific.
Austerity is refusing to make increases in government spending during recession and cutting social programs. This applies during recessions because the conventional wisdom is that government spending should rise on social programs.
Defining growth is strange without context. Do you mean spending growth, economic growth, or regulatory growth? It's just having more of it, but we can always disagree on how to measure and project it.
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On September 01 2012 03:28 coverpunch wrote:Show nested quote +On September 01 2012 03:07 Rassy wrote:
"But don't tell me everyone who made a dumb decision before 2008 got tricked. The vast majority of them knew what they were getting into"
Maybe, but then they didnt have a choise.
I dont care about bubbles and crashes in the stockmarket, normal people dont need to own stocks and normal people can be indifferent towards that.
Everyone needs a house though ,
you cant blame the people taking a huge mortgage and buying a house in 2007-2008 at peak,people have to live somewhere. Actually, most normal people DO own stocks because they have some kind of invested savings, whether it is private, a mutual fund, or some kind of pension. Buying a house is very different from having somewhere to live. Buying a home IS an investment, which is what caused the mania. There was this idea that house prices could never fall, so people could buy homes they couldn't afford and keep refinancing the loan until their income rose to a level where they could make payments. Out of curiosity, coming from the Netherlands, do you ever learn about the Tulip mania?
except the people were being told by their banker that they could afford their 1.2million dollar house. The bankers forgot they were supposed to be giving sound financial advice not trying to get the highest commission by convincing people to take out a massive mortgage. Most people don't know a ton about finance and rely on their bankers to help them, and when the bankers get greedy we saw what happened.
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On September 01 2012 03:22 paralleluniverse wrote:Show nested quote +On September 01 2012 03:20 JonnyBNoHo wrote:On September 01 2012 03:18 paralleluniverse wrote:On September 01 2012 03:00 JonnyBNoHo wrote:On September 01 2012 02:53 paralleluniverse wrote:On September 01 2012 02:30 JonnyBNoHo wrote:On September 01 2012 02:20 paralleluniverse wrote:Ben Bernanke's speech today: http://federalreserve.gov/newsevents/speech/bernanke20120831a.htm Rather than attributing the slow recovery to longer-term structural factors, I see growth being held back currently by a number of headwinds. First, although the housing sector has shown signs of improvement, housing activity remains at low levels and is contributing much less to the recovery than would normally be expected at this stage of the cycle.
Second, fiscal policy, at both the federal and state and local levels, has become an important headwind for the pace of economic growth. Notwithstanding some recent improvement in tax revenues, state and local governments still face tight budget situations and continue to cut real spending and employment. Real purchases are also declining at the federal level. Uncertainties about fiscal policy, notably about the resolution of the so-called fiscal cliff and the lifting of the debt ceiling, are probably also restraining activity, although the magnitudes of these effects are hard to judge.30 It is critical that fiscal policymakers put in place a credible plan that sets the federal budget on a sustainable trajectory in the medium and longer runs. However, policymakers should take care to avoid a sharp near-term fiscal contraction that could endanger the recovery.
Third, stresses in credit and financial markets continue to restrain the economy. Earlier in the recovery, limited credit availability was an important factor holding back growth, and tight borrowing conditions for some potential homebuyers and small businesses remain a problem today. More recently, however, a major source of financial strains has been uncertainty about developments in Europe. These strains are most problematic for the Europeans, of course, but through global trade and financial linkages, the effects of the European situation on the U.S. economy are significant as well. Some recent policy proposals in Europe have been quite constructive, in my view, and I urge our European colleagues to press ahead with policy initiatives to resolve the crisis. Basically, stop the austerity now, and have a creditable plan for reducing the deficit over the long run, not blow it up with $4 trillion in tax cuts for the rich that is "mathematically impossible" to pay for within the promises of the Romney/Ryan plan. There's no austerity now. Uncle Ben doesn't want to see the fiscal cliff occur, which would be relative austerity to today. "State and local governments still face tight budget situations and continue to cut real spending and employment" isn't austerity only in your world of bizarro-semantics. Republicans should love the fiscal cliff given their deficit fetishism. How are you defining austerity? Austerity = cuts in government spending. "State and local governments still face tight budget situations and continue to cut real spending and employment", because they need to cut spending. That's certainly an unorthodox definition of austerity. But yes, under that definition austerity exists. Unorthodox? In economics, austerity refers to a policy of deficit-cutting by lowering spending often via a reduction in the amount of benefits and public services provided.[1] Austerity policies are often used by governments to try to reduce their deficit spending[2] and are sometimes coupled with increases in taxes to demonstrate long-term fiscal solvency to creditors.[3] https://en.wikipedia.org/wiki/Austerity
Unorthodox to only look at government spending. You should be looking at the deficit (spend and tax). You can keep spending constant, raise taxes and have austerity.
Moreover, austerity is often a relative thing. Since the deficit has fallen since its peak, we are austere relative to it, yet quite profligate relative to the pre-crisis era.
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On September 01 2012 03:33 TotalBalanceSC2 wrote:Show nested quote +On September 01 2012 03:28 coverpunch wrote:On September 01 2012 03:07 Rassy wrote:
"But don't tell me everyone who made a dumb decision before 2008 got tricked. The vast majority of them knew what they were getting into"
Maybe, but then they didnt have a choise.
I dont care about bubbles and crashes in the stockmarket, normal people dont need to own stocks and normal people can be indifferent towards that.
Everyone needs a house though ,
you cant blame the people taking a huge mortgage and buying a house in 2007-2008 at peak,people have to live somewhere. Actually, most normal people DO own stocks because they have some kind of invested savings, whether it is private, a mutual fund, or some kind of pension. Buying a house is very different from having somewhere to live. Buying a home IS an investment, which is what caused the mania. There was this idea that house prices could never fall, so people could buy homes they couldn't afford and keep refinancing the loan until their income rose to a level where they could make payments. Out of curiosity, coming from the Netherlands, do you ever learn about the Tulip mania? except the people were being told by their banker that they could afford their 1.2million dollar house. The bankers forgot they were supposed to be giving sound financial advice not trying to get the highest commission by convincing people to take out a massive mortgage. Most people don't know a ton about finance and rely on their bankers to help them, and when the bankers get greedy we saw what happened.
Yes, this is when we get into the details of the game, about who is lying to who.
To reiterate, I'm not overlooking or forgiving bankers at all. I'm firmly convinced the boom and bust could not have happened without massive fraud and I'll say it again, it's a disgrace that the US government has made a decisive choice to not prosecute the banks at all.
My anger at the government is mostly at Obama. Did Bush know all this was going on? Maybe, maybe not. But Obama DEFINITELY knows it happened and he still isn't doing anything about it.
IMO the best part of Romney winning is that all the fans of Obama are kind of willing to forgive him but they would never tolerate this with a Republican president.
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On September 01 2012 03:33 TotalBalanceSC2 wrote:Show nested quote +On September 01 2012 03:28 coverpunch wrote:On September 01 2012 03:07 Rassy wrote:
"But don't tell me everyone who made a dumb decision before 2008 got tricked. The vast majority of them knew what they were getting into"
Maybe, but then they didnt have a choise.
I dont care about bubbles and crashes in the stockmarket, normal people dont need to own stocks and normal people can be indifferent towards that.
Everyone needs a house though ,
you cant blame the people taking a huge mortgage and buying a house in 2007-2008 at peak,people have to live somewhere. Actually, most normal people DO own stocks because they have some kind of invested savings, whether it is private, a mutual fund, or some kind of pension. Buying a house is very different from having somewhere to live. Buying a home IS an investment, which is what caused the mania. There was this idea that house prices could never fall, so people could buy homes they couldn't afford and keep refinancing the loan until their income rose to a level where they could make payments. Out of curiosity, coming from the Netherlands, do you ever learn about the Tulip mania? except the people were being told by their banker that they could afford their 1.2million dollar house. The bankers forgot they were supposed to be giving sound financial advice not trying to get the highest commission by convincing people to take out a massive mortgage. Most people don't know a ton about finance and rely on their bankers to help them, and when the bankers get greedy we saw what happened.
Cases of fraud and deception are clearly wrong and clearly illegal. But cases where a loan was simply unsustainable the blame and pain should be born by both borrower and lender.
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Yes, this is when we get into the details of the game, about who is lying to who.
To reiterate, I'm not overlooking or forgiving bankers at all. I'm firmly convinced the boom and bust could not have happened without massive fraud and I'll say it again, it's a disgrace that the US government has made a decisive choice to not prosecute the banks at all.
My anger at the government is mostly at Obama. Did Bush know all this was going on? Maybe, maybe not. But Obama DEFINITELY knows it happened and he still isn't doing anything about it.
IMO the best part of Romney winning is that all the fans of Obama are kind of willing to forgive him but they would never tolerate this with a Republican president.
I am simply saying MORE of the blame should fall on the financial institutions then the duped consumers. It is unfortunate that the bankers have gotten the opposite message they should of. "you crash the market with subprime loans, don't worry we will bail you out". The consumer who lost his house now foots the bill through taxes to keep the banks solvent and the fraudsters still keep their commision. Something obviously has to change.
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On September 01 2012 03:59 TotalBalanceSC2 wrote:Show nested quote +Yes, this is when we get into the details of the game, about who is lying to who.
To reiterate, I'm not overlooking or forgiving bankers at all. I'm firmly convinced the boom and bust could not have happened without massive fraud and I'll say it again, it's a disgrace that the US government has made a decisive choice to not prosecute the banks at all.
My anger at the government is mostly at Obama. Did Bush know all this was going on? Maybe, maybe not. But Obama DEFINITELY knows it happened and he still isn't doing anything about it.
IMO the best part of Romney winning is that all the fans of Obama are kind of willing to forgive him but they would never tolerate this with a Republican president. I am simply saying MORE of the blame should fall on the financial institutions then the duped consumers. It is unfortunate that the bankers have gotten the opposite message they should of. "you crash the market with subprime loans, don't worry we will bail you out". The consumer who lost his house now foots the bill through taxes to keep the banks solvent and the fraudsters still keep their commision. Something obviously has to change.
I agree with you, which is why I'm also angry that the government hasn't gone after the banks. The attitude of the bailout should have been "you rightfully deserve to die and the terms of this bailout will make you wish you did. Don't ever do this again."
But on a tangent, this is why government should inherently also be limited and small. Because no matter what the size, it is always easier for government to get co-opted by big companies than it is by the people. And if the government is large and very powerful, this means the collusion can be very costly to the people.
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Cases of fraud and deception are clearly wrong and clearly illegal. But cases where a loan was simply unsustainable the blame and pain should be born by both borrower and lender.
Alot of people don't know what an unsustainable loan is, they rely on their bankers to tell them what they can afford, not every case is fraudulant but alot were simply bankers trying to convince people to take out as much as possible which led to people simply taking out too much. Most people I know have no idea what a debenture is let alone what makes a loan sub-prime or not. you say cases where the loan was unsustainable should be both parties fault, but what was the banker doing telling people to take out more money then they can pay for then, shouldn't he know by looking at their numbers they can't afford it?
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On September 01 2012 04:04 coverpunch wrote:Show nested quote +On September 01 2012 03:59 TotalBalanceSC2 wrote:Yes, this is when we get into the details of the game, about who is lying to who.
To reiterate, I'm not overlooking or forgiving bankers at all. I'm firmly convinced the boom and bust could not have happened without massive fraud and I'll say it again, it's a disgrace that the US government has made a decisive choice to not prosecute the banks at all.
My anger at the government is mostly at Obama. Did Bush know all this was going on? Maybe, maybe not. But Obama DEFINITELY knows it happened and he still isn't doing anything about it.
IMO the best part of Romney winning is that all the fans of Obama are kind of willing to forgive him but they would never tolerate this with a Republican president. I am simply saying MORE of the blame should fall on the financial institutions then the duped consumers. It is unfortunate that the bankers have gotten the opposite message they should of. "you crash the market with subprime loans, don't worry we will bail you out". The consumer who lost his house now foots the bill through taxes to keep the banks solvent and the fraudsters still keep their commision. Something obviously has to change. I agree with you, which is why I'm also angry that the government hasn't gone after the banks. The attitude of the bailout should have been "you rightfully deserve to die and the terms of this bailout will make you wish you did. Don't ever do this again." But on a tangent, this is why government should inherently also be limited and small. Because no matter what the size, it is always easier for government to get co-opted by big companies than it is by the people. And if the government is large and very powerful, this means the collusion can be very costly to the people.
Couple caveats - not all banks that received a bailout either needed it or did anything wrong and as a whole the bank bailouts were a profitable endeavor for the taxpayer.
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EPT
