TRT editorial - Bush policies failing??

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Bill Glasheen
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TRT editorial - Bush policies failing??

Post by Bill Glasheen »

In another thread, Adam posted the following.
AAAhmed46 wrote:
Obama needs to seriously watch this. Oh he's probably aware, but doesn't care. The banks will keep getting bailed out.

http://www.youtube.com/user/TheYoungTur ... nVJAkhGyjQ
This had little to do with the original thread. But it gets into an important phenomenon that we all should get our brains around. We may disagree around the edges on this, but the core remains the same. We may disagree how to handle it, but handle it we must.

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Post by Bill Glasheen »

That's a compelling piece, Adam. But it's much more complicated than he makes it out to be. You're right on one thing - the banks have a lot to do with it. But you can't necessarily fault banks for it all.

Let's back up a bit and talk about a basic law of Nature. Some call it the 80/20 rule. Many centuries ago, Vilfredo Pareto observed that 20 percent of the Italians owned 80 percent of the wealth. That phenomenon occurs again and again and again in Nature. Twenty percent of the members in a health plan incur 80 percent of the health care dollars spent. Twenty percent of the members in a health plan have 80 percent of the hospital days. I've measured it in health care data, and it's true to almost an exact percent. It goes something like this.

Top 1% - a quarter
Top 2% - a third
Top 5% - a half
Top 20% - 80%

We sometimes call it the Pareto distribution in honor of Vilfredo Pareto. It's part of a broader set of distributions called the Bradford distribution.

Liberal democrats and socialists/communists harp at this distribution, claiming the rich are getting richer and the poor are getting poorer. Since a small percentage of people always own the most wealth, the phenomenon can be used by fiscal leftists to impose either socialism/communism or fiscally liberal wealth redistribution. In other words, engage in class warfare in your diatribes (Hitler, Marx, any number of U.S. fiscal liberals) and you may win at the polls. It's strictly a numbers game, and they know it. Meanwhile, most are rather wealthy themselves. Otherwise they wouldn't be smart enough to see it and take advantage of it all (and us as well).

Well here's the thing. The phenomenon exists for a few simple reasons.

1) In any society, a small percentage of the people often do most of the work.

2) In any random group, a small percentage of the people "get" what's going on around them.

3) Some people are savers. Other people can't keep a dime in their pockets.

4) Most importantly, a small percentage of the people take positive advantage of the time value of money. The rich get richer because of compounding gains in their investments. The poor get poorer because of compounding losses in their debts, late fees, etc. The middle class is in the middle, basically treading water.

No matter what we do government-wise, the laws of Nature will prevail. You can't change that.

If we have a simple flat tax, one percent of the population will pay a quarter of all taxes. The top 20 percent will pay 80 percent of the taxes. But no... it doesn't work that way, does it? Because of tyranny of the masses, we have higher tax rates on the wealthy. Then the wealthy jockey to take advantage of loopholes that give them a choice in the exercise of wealth redistribution. Give the wealthy no choice? Then they are motivated not to work as hard as they are capable of, and so don't produce as much. There's a "Fuk it!" factor involved where they just take more vacations, indulge in more pleasures, and play more golf. That ultimately hurts the country as a whole, as the movers and shakers create the wealth that everyone else aspires to get. Where the dynamic tension ends up depends upon who is in power, and what (often not very bright) economic policies they impose.

All while this is happening by the way, we live in a global economy. Right now people in China and India are willing to do more for less, and accept a lower standard of living. If we engage in the typical Eurosocialism, the harder working countries will start acquiring more of the wealth. And - you guessed it - the Pareto distribution (wealth by country) will apply at that level as well. Go figure... This kind of macro to micro phenomenon of Nature is common, and sometimes attributed to chaos theory. This is why even Obama and his treasury secretary are beginning to find religion. The numbers don't lie. Go too far to radical leftist fiscal policy and eventually you'll lose the store to the leaner and meaner countries.

Now let's get back to The Young Turk's Channel editorial. How could the 80/20 inflection point in the Bradford distribution be shifting? Well sorry, Charlie, it isn't because "trickle down economics" is bad. The theory isn't wrong. It isn't the problem of wealth being inherently bad. Something else happened which is allowing the announcer to fool the audience here. I'm betting it isn't a Machiavellian phenomenon. He's just not the sharpest tool in the shed. Not all people can be...

No, Pareto's laws aren't being violated. And yes, something really bad is happening. And no, it isn't the fault of the wealthy, the Republicans, Bill Gates, etc., etc.

More in the next post. (Give me a few hours…)

- Bill
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Post by AAAhmed46 »

Bill Glasheen wrote:That's a compelling piece, Adam. But it's much more complicated than he makes it out to be. You're right on one thing - the banks have a lot to do with it. But you can't necessarily fault banks for it all.

Let's back up a bit and talk about a basic law of Nature. Some call it the 80/20 rule. Many centuries ago, Vilfredo Pareto observed that 20 percent of the Italians owned 80 percent of the wealth. That phenomenon occurs again and again and again in Nature. Twenty percent of the members in a health plan incur 80 percent of the health care dollars spent. Twenty percent of the members in a health plan have 80 percent of the hospital days. I've measured it in health care data, and it's true to almost an exact percent. It goes something like this.

Top 1% - a quarter
Top 2% - a third
Top 5% - a half
Top 20% - 80%

We sometimes call it the Pareto distribution in honor of Vilfredo Pareto. It's part of a broader set of distributions called the Bradford distribution.

Liberal democrats and socialists/communists harp at this distribution, claiming the rich are getting richer and the poor are getting poorer. Since a small percentage of people always own the most wealth, the phenomenon can be used by fiscal leftists to impose either socialism/communism or fiscally liberal wealth redistribution. In other words, engage in class warfare in your diatribes (Hitler, Marx, any number of U.S. fiscal liberals) and you may win at the polls. It's strictly a numbers game, and they know it. Meanwhile, most are rather wealthy themselves. Otherwise they wouldn't be smart enough to see it and take advantage of it all (and us as well).

Well here's the thing. The phenomenon exists for a few simple reasons.

1) In any society, a small percentage of the people often do most of the work.

2) In any random group, a small percentage of the people "get" what's going on around them.

3) Some people are savers. Other people can't keep a dime in their pockets.

4) Most importantly, a small percentage of the people take positive advantage of the time value of money. The rich get richer because of compounding gains in their investments. The poor get poorer because of compounding losses in their debts, late fees, etc. The middle class is in the middle, basically treading water.

No matter what we do government-wise, the laws of Nature will prevail. You can't change that.

If we have a simple flat tax, one percent of the population will pay a quarter of all taxes. The top 20 percent will pay 80 percent of the taxes. But no... it doesn't work that way, does it? Because of tyranny of the masses, we have higher tax rates on the wealthy. Then the wealthy jockey to take advantage of loopholes that give them a choice in the exercise of wealth redistribution. Give the wealthy no choice? Then they are motivated not to work as hard as they are capable of, and so don't produce as much. There's a "Fuk it!" factor involved where they just take more vacations, indulge in more pleasures, and play more golf. That ultimately hurts the country as a whole, as the movers and shakers create the wealth that everyone else aspires to get. Where the dynamic tension ends up depends upon who is in power, and what (often not very bright) economic policies they impose.

All while this is happening by the way, we live in a global economy. Right now people in China and India are willing to do more for less, and accept a lower standard of living. If we engage in the typical Eurosocialism, the harder working countries will start acquiring more of the wealth. And - you guessed it - the Pareto distribution (wealth by country) will apply at that level as well. Go figure... This kind of macro to micro phenomenon of Nature is common, and sometimes attributed to chaos theory. This is why even Obama and his treasury secretary are beginning to find religion. The numbers don't lie. Go too far to radical leftist fiscal policy and eventually you'll lose the store to the leaner and meaner countries.

Now let's get back to The Young Turk's Channel editorial. How could the 80/20 inflection point in the Bradford distribution be shifting? Well sorry, Charlie, it isn't because "trickle down economics" is bad. The theory isn't wrong. It isn't the problem of wealth being inherently bad. Something else happened which is allowing the announcer to fool the audience here. I'm betting it isn't a Machiavellian phenomenon. He's just not the sharpest tool in the shed. Not all people can be...

No, Pareto's laws aren't being violated. And yes, something really bad is happening. And no, it isn't the fault of the wealthy, the Republicans, Bill Gates, etc., etc.

More in the next post. (Give me a few hours…)

- Bill
Always take Cenk with a grain of salt, ALWAYS.

Certainly it's been grossly mishandled.

Reagonomics done by reagan was done alot better when compared to bush and obama.
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Post by eric235u »

excellent video. thanks for sharing. i couldn't agree more with what they said.

<rant>
god i hate hearing reagan's name. he tripled the national debt, mandatory minimum sentencing, greatly expanded federal government, closing of many mental health hospitals and flooded our prisons, funded the contras, sold missiles to iran, gave assistance to saddam hussein and osama bin laden. not that great of an actor and a worse president. obama looks great compared to him. let's not even start talking about bush w. ugh.
</rant>


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Post by eric235u »

speaking of fun vids here's another one.

http://www.thedailyshow.com/watch/wed-j ... ent-future

fool me once shame on you. fool me twice shame on me. fool me eight times...
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Post by Bill Glasheen »

eric235u wrote:
excellent video. thanks for sharing. i couldn't agree more with what they said.
Did you take the time to read what I posted? The gentleman needs a fundamental understanding of statistical distributions in economics and Nature before posting these misleading charts.

Having a political point of view is one thing. We're all entitled to our views on how the world should work. Butchering the data - by ignorance or by design - is something altogether different. There was a very interesting study where people were asked basic questions about economic theory, and then asked what their political views were. Interestingly enough, fiscal conservatives scored the highest. (This would include some fraction of Republicans, "Blue Dog" Democrats, and most libertarians). Liberals scored the worst. While the correlation wasn't 1.00, it was fairly high. That finding calls to mind a famous quote - sometimes attributed to Winston Churchill.

If you're not a liberal when you're 25, you have no heart. If you're not a conservative by the time you're 35, you have no brain.
- François Guizot

Be careful what you cheer; you might not like what's showing.

If you have an opinion on the matter, I suggest delivering it at least at the level that the announcer on TYT did. He appeared at least to be sincere in his analysis of economic trends. I'm honoring that attempt at civil dialogue by putting thought and effort into my response.

As I promised... more following.

- Bill
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Post by Bill Glasheen »

The announcer on The Young Turks made a rather interesting analogy between economic trends of the 1920s, and those of today. Was the comparison valid? Actually yes. Is it a condemnation of fiscal conservative economic policy? Ahh... that's where the validity ends.

What was the commonality in-between the two times? Well it had little to do with "trickle down" economics, or the accumulation of wealth by a few. The problem - and it was a big one - was easy credit.

Everyone today can buy stock "on margin." What this means is that you can put some of your own money up, and then borrow the rest. Why would you borrow money - at a cost - to make money? Well if you knew that you could borrow money at say an 8 percent rate and make 30 percent per year, well it's a no-brainer. You're always going to be making money.

At the time, the stock market was advancing at an unsustainable trend. It's not a lot different than the dot-com trend of the 1990s, or the housing boom of the middle 2000s. Young investors with little experience in the cyclic nature of economic trends jumped in aggressively to cash in on the boom.

But back in the 20s, it wasn't just about putting your own money up. People could buy at very high margin rates. In other words they were using mostly the bank's money to invest, and counting on returns that beat their interest debts to the banks.

If a whole lot of people discover this at once, then there will be a whole lot of people borrowing and investing. Demand for stocks drives the stock prices up. The booming trends encourage more people to jump in, which drives prices up even more. Banks begin to loan more and more money to these investors, and hence get more and more interest return. Everyone was making money, and the money-making was getting more and more intense.

All was going well until... At some point, all insane trends level off. A good crude index of a stock's proper price is the P/E ratio, or the ratio of the price of the stock to the earnings of the company. A stock price shouldn't get too far ahead of the ability of the company to produce. When it does, there is a natural correction which causes stocks to be priced closer to their true value.

If you borrow $900 to go with the only $100 you have to your name and the stock goes down 20 percent in a day, you suddenly owe $900 and your stock is worth $800. In other words you owe $100 more than you are capable of paying back - at least at that moment. At that point you have two choices. You can pull out and pay back what you can, and hope to earn the rest later on. Or... you can sweat bullets and hope the stock goes up to cover your debt.

If this happens on a grand scale where a large number of people are borrowing to invest, then suddenly a large number of people are incapable of paying their loans back. Many pull out of the market to cut their losses, which brings the market down even more for those who stay in. Ultimately many people default on their loans. And then banks which heavily lend in this venue fail. First the small banks fail. And then the larger and larger ones.

Since that time there are measures that prevent this 1929-style collapse. The most important change is the proportion of the money you invest which is borrowed has dropped - by law. You must report the amount you are buying on margin when you invest. And finally, you get a "margin call" when the price of the stock goes down to the level of the amount you have borrowed. In other words you are forced to sell immediately before you lose the money you borrowed. That margin call phenomenon has itself caused mini-crashes, as many people can have margin calls when a market drops precipitously. This has led to further efforts by Wall Street to slow trading down (e.g. closing the market for a cooling off period) so these catastrophic losses can't happen.

More in a bit.

- Bill
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Post by Panther »

:lol: :roll: :mrgreen:
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Post by Bill Glasheen »

Well what's the similarity to today? In the 1920s, it was stocks. In the 2000s, it was real estate.

Here were the driving forces.
  • We were experiencing a bit of a recession. One way The Federal Reserve can control both recessions and inflation is by how it sets The Prime Rate. This is the rate at which large banks can borrow money amongst each other. Other interest rates follow which include the interest rate on bank accounts, CDs, and (drum roll...) loans to purchase homes.
  • At some point, we got to a near-record-low Prime Rate. We were not in danger of inflation, so making money easier to get wasn't a problem. If anything, we were suffering from a threat of DEflation, where the price of goods actually goes down and there is a downward pressure on salaries. Making money easy to get can stop deflation. It also stokes the economy.
  • It isn't just The Federal Reserve and Big Banks, folks. The wealth redistributionists were in on this too. Many liberal types were bringing banks to court because of allegedly discriminatory loaning practices. This includes - but is not limited to - a certain community organizer who now resides in a rather large, White Washington residence. Rather than fight the lawsuits, it was just cheaper for banks to say WTF and take the risk. They made credit easier for people who otherwise would never have gotten loans because of bad credit or not enough money to put down. The more people who never should have gotten loans get thrown into the housing market, the greater the risk for banks. But it's just risk. It can be priced, right?
  • The record-low interest rates created two phenomena. First, a whole group of people were eligible for loans who otherwise couldn't have gotten them (due to easy and cheap credit). Suddenly someone CAN take on that $100K loan at a very low interest rate to buy that first house. Additionally, folks already in the market could now afford much bigger homes.
  • At some point, the demand for housing far outstripped the supply. The housing market couldn't respond quickly enough. So the price of housing began to skyrocket.
  • People selling one home to buy into a bigger one suddenly discovered how much money could be made with housing trends being what they were. So a whole new class of folks entered the market - the home flippers. These were people who would buy a house, sit on it a little and/or fix it up, and sell it for a profit.
  • Banks now got into the game. They started a number of questionable practices including giving loans to folks who never should have gotten them (sometimes by falsifying the loan application) and selling whole groups of these loans to other banks. Many banks invested heavily on these "junk loan" assets. (FWIW, the bank my sister works for saw the light, and chose to divest of such holdings.)
  • At some point - as with the 1920s stock market trends and the dot-com trends - an unnatural trend levels off and self-corrects. Housing prices dropped. Demand dropped.
  • Many people got in WAY over their heads. The first to fail were those who never should have gotten loans in the first place. (Right, Mr. Community Organizer????) Along with them came folks who got loans with falsified data. No way could they keep up with those payments. No way could they sustain interest-only loans forever. When defaults happened and demand dropped, other folks suddenly discovered that they owed much more money than their home was worth. This is not dissimilar to the situation in the 1920s where a person borrowed more money than their stock was worth. Many folks found it easier just to turn in their keys and walk from the loan.
  • With demand for housing dropping and housing loan defaults increasing, housing prices went down even more. This meant more people exposed, and more defaults on loans.
  • At some point, banks involved directly or indirectly in these toxic loan assets began to fail. First it was the small ones. Then the bigger ones.
  • As with the 1920s.... Business relies on the ability to borrow in order to grow. If banks fail and/or credit dries up, businesses fail. Those businesses that don't fail do so by cutting their costs. Cutting costs means laying people off.
  • When the demand for products and services goes down because personal finances are taking a hit, businesses fail. When businesses that sell to other businesses suddenly cannot sell their products because demand for services in the economy goes down... You guessed it. Count the business dominoes. Count the job losses.
  • Been there, done that. To some this is theory. To others, it's a stare-at-you-in-your-face economic reality. The difference between me and the next person is that I was smart enough NOT to jump into the housing bubble, and I was smart enough to save for a rainy day. I may have lost a salary for an extended period of time. But I never collected unemployment, and I didn't lose my home. Many of my neighbors weren't so proud (for better or for worse...), so smart, or so lucky..
Why did my sister's bank not fail? Why did I lose my job and not my home? Ahh... Dad grew up in The Depression - born in 1922. He taught us well. ;)

More later.

- Bill
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Post by Panther »

Bill Glasheen wrote: [*] Been there, done that. To some this is theory. To others, it's a stare-at-you-in-your-face economic reality.
Gawd, I love Austrian Economics. It's really a shame that more people don't "get it" and continue to follow the popular, but wildly incorrect, Keynesian economic policies and theories.

The difference between me and the next person is that I was smart enough NOT to jump into the housing bubble, and I was smart enough to save for a rainy day. I may have lost a salary for an extended period of time. But I never collected unemployment, and I didn't lose my home. Many of my neighbors weren't so proud (for better or for worse...), so smart, or so lucky..
I didn't get caught either... I also went an extended period of time... I also did not collect anything from the government coffers... I also still have my homes... What I don't have is the large retirement savings, which (even though I was in constant contact with the funds managers) ended up (even still) being virtually destroyed. I also don't have very much savings anymore, but it's coming back... ever so slowly.
Why did my sister's bank not fail? Why did I lose my job and not my home? Ahh... Dad grew up in The Depression - born in 1922. He taught us well. ;)
The bank that I have was the same way, even though it was threatened at one point by the "Barney Frank" crew for not investing enough in the "community". That cost all of us in what the bank had to spend to "defend" (read payoff) the "community" representatives (but none of the money ended up back in any of those "represented" communities... go figure. :roll: ) Bank is still here... unfortunately, so is Barney. :cry:

Ditto on being taught by folks who lived through the Depression. I remember being told by my Grandaddy how and why he didn't trust banks anymore. As a kid I went with him after he got paid for some work. He would CASH the check at whatever bank it was drawn on and then go and deposit CASH into his bank... Always keeping a "rainy day" amount that he could survive on when (not "if" according to him) the next engineered crash came. And still, he was invested in stocks too, even though he felt like that was (at least in part) rigged.
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Post by IJ »

Interesting discussion about the CRASHES, but the Reagan criticism was about wealth discrepancy, the decline of the middle class, and so on. Those trends were apparent long before the community organizers caused the crash by forcing unsafe lending.

I would also be interested in hearing what % of unsafe lending was mandated. We hear that it occurred; I missed the outcry from the banks at the time, and I'ver never heard whether the amounts that were forced really were relevant to the total amount leveraged in risky investments.

Meanwhile, we had boon-bust cycles previously, eg, the south, with cotton. Over and over. People are vulnerable to this; it has happened, it will happen again if history is any guide. We can't place too much certain blame much as we can't assure ourselves climate change is due to industry only.

Interesting article in Harvard Magazine a while back compared regulation of financial industry after the Great Depression, which was supported with collective memory of the event. When that faded, and the regulation was seen as a burden, we started deregulating, and decades of stability vanished in favor of the S+L crisis. Not long after in the life of a nation = housing boom-bust. I'm still looking for that, but found this in the interim:

http://harvardmagazine.com/2008/05/making-credit-safer

The government and community organizers didn't make these credit tricks mandatory. Far from it.
--Ian
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Post by Glenn »

Really good information here Bill, and I appreciate you taking the time to provide some explanation of these economic events in clear terms. I do question a couple of your earlier comments about the Pareto Principle though.
Bill Glasheen wrote: Let's back up a bit and talk about a basic law of Nature.
and
No matter what we do government-wise, the laws of Nature will prevail. You can't change that.
"The Pareto Principle is an observation, not a law of nature"

Newton’s laws are laws of nature. In socio-cultural systems like economics there are no deterministic laws, natural or otherwise. Such laws would imply that certain socio-culture phenomena cannot be changed, yet socio-cultural phenomena are made to be changed. Observing the Principle in a number of phenomena does not make it infallible or “natural”, merely ubiquitous. The reasons for its prevalence include aspects of the reasons you list, as well as the simple fact that the currently dominant socio-cultural systems promote it. Pareto's Principle is really about optimization and efficiency, and the 80-20 rule in economics describes conditions that are optimal for the accumulation of wealth. The flip side of that is that it has been used by some to justify inequality, but as others have stated ‘Inequality is not a Law of Nature’, particularly since the concept of wealth accumulation is a cultural construct and not a law of nature. The Pareto Principle has its uses, but justification for maintaining a status quo in a given phenomenon in which it is observed is not one of them.

There is growing debate as to how relevant Pareto's Principle is to economics, with economists such as Paul Krugman saying that over the past 30 years the reality has been more like 80-1, i.e. that 1% of the population accounts for around 80% of the wealth, particularly at the global scale.
Bill Glasheen wrote: 1) In any society, a small percentage of the people often do most of the work.
To what extent has this assumption been quantitatively verified? In any society, the people who do most of the work are called “poor” or “labor”, not wealthy! The inclusion of a comment like this as a cause of wealth inequality always grates on me. Even if a small percentage of people may do most of the work and a small percentage of the people has most of the wealth, that does not mean the two are causally related. If anything, the relationship is inverse. Do you really think that the top 20 (or 1) % who are working primarily for wealth accumulation do more work than the bottom 40% who are working so that they and their families can survive day-to-day? I guarantee a subsistence farmer in Africa is working more, and harder, than is a CEO in the U.S., but the former will never accumulate the kind of wealth that we base principles like Pareto’s on. Nor will the factory worker in China working 50+ hours a week in very strict conditions for an average wage of 50 cents an hour. And yet they are somehow working less than the wealthiest people in the world? Even in the U.S. the hardest working people I know are the hourly laborers, not the CEOs. What your explanation of the Pareto Principle leaves out is that the wealth of the top X% is made off the labor of the bottom Y%. It also ignores the benefits that can be gained from privileged geography and birth.

While your 2nd, 3rd, and 4th points are relevant for most people in the more-developed countries like the U.S., they have no relevance to the majority of people in the world. Many people in the world don’t even earn a wage as we conceive it, so there is no opportunity for saving or investing.
Bill Glasheen wrote: Top 5% - a half
The world median annual income in 2005 was $1700, so if you make over $1700 a year you make more than half the people in the world...and hardly anyone in a more-developed country makes anywhere near that little, heck my oldest child made almost half that just detassling corn for a month last year. Five % of the global population is ~340 million people, the vast majority of whom are located in the more-developed countries, so odds are good that most if not all on this forum fall into at least the top 5-10% of wealthiest people in the world based on income. Do you feel that wealthy? How much of your portion of global income wealth is due to how much work you do relative to everyone else in the world, how much you “get it”, or how much you save or understand the time value of money…and how much is due simply to the opportunities that come from living in a more-developed country? Something to think about.
Last edited by Glenn on Tue Jun 22, 2010 9:52 pm, edited 5 times in total.
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Post by IJ »

--Ian
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Post by eric235u »

:D
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Post by Panther »

Good, interesting post Ian...

A couple of tidbits of information that a lot of people don't seem to get about the "mortgage crisis" are: Even with the large increase in defaults/foreclosures, more than 95% of mortgages were being maintained as contracted. Certainly the number of defaults had increased, but the "crisis" came when the banks created the mortgage derivatives and started "bundling" them as secured investments. Another thing is the amount of money in these "bailouts". We had a banking bailout including TARP (Toxic Assets) and the banks ended up with over a TRILLION dollars of OUR money supposedly so they could help US. I never did like that BS circular logic, but it happened and it was supported by the powers on BOTH sides... plenty of blame. My point is the amount... IF that amount was needed to support a failing mortgage system, people should realize that with a TRILLION dollars, every single mortgage in the country could have been paid for OVER a YEAR! Every single one... If they wanted to get things going again, how about taking the Trillion and letting EVERYONE have a year without having to make mortgage payments!?! (I don't think I'd take "advantage" of such a program, but I'd bet lots of people would put the money they save on mortgage payments right back into the economy... giving it a very large boost.)

On the point in Glenn's post about us being from a wealthy country... no apologies here. I also know that in other parts of the world where people make much, much less money, they have a lower cost of living. I understand that the standard of living is also lower, but when THIS country was founded, people were living out of wagons, cabins, and didn't have "modern medicine" either. I have ancestors who were living in tents, hunting and gathering, and went to a medicine-man... and now I have a modern lifestyle. Yes, it took a number of generations for my family tree to reach this point, but that doesn't mean that my family should take 20 steps back so that things are "equal" with someone who is still living in a cabin/tent and hunting/gathering. From where my ancestors were compared to where they are is not really that different. Actually, I think the other side of my family tree created a lot of the changes, otherwise I might still be living in a tent hunting deer (oh... wait a sec... nevermind...) Anyway, again no apologies for my ancestry/lineage. I know plenty of people (in the U.S.) who have had the "advantage" of where they live and their background, but who seem to lack the ability to continue the forward progress (and in some cases have seemed to take a number of steps back). I feel for their kids, but I don't have any sympathy for them.

An example is someone I know who lives in a very small, nearly dilapidated house, which he got behind in payments on... He's complained to me about how "unfair" it is for me to have my nice house. Forget the fact that he didn't lose his job like I did and he's the one who fell behind in his mortgage payments....

But then I pointed out that:
1) every few years he trades in for a BRAND NEW Benz, Beemer, or Caddy for he and his wife... while I'm driving a 13 year old vehicle with ~270k miles on it and my wife was driving a 20 year old vehicle with ~170k miles on it (until it died and was replaced by a 7 year old vehicle with 45k miles on it);
2) his family eats out LOTS, we don't and if I forget my "brown bag", I skip lunch... in "tight times" my wife and I have done without and made sure that the kids had good, substantial, home-cooked food on the table;
3) he takes his family to the movies/concerts/shows/etc at LEAST once a week and his kids have (literally) roomfuls of brand new toys that are added to each week... we save our money and chose a handful of events throughout the year to attend and my kid plays with lots of second-hand toys that were bought at the church fair for a few bucks;
4) he works 35-40 hours/week and complains to the union when he's asked to do more, while I work 50-60 hours/week at my FIRST job and another 20-30 at my second and third jobs... (FYI, he makes more per hour at his union job than I do as a professional. Also, I go to my second and third jobs after my son goes to bed so I don't miss any time with my son... the friend complains and GETS "comp time". That's fine and good for him, but don't cry to me about your finances when you aren't willing to do anything extra about it. And while I'm on it, he complained about the "foreigners" up the street who are driving nice cars and their homes are paid off... I know them as well... they've been here, legally, for 2 generations, work 90+ hours/week and manage their money extremely carefully... they came from a much lower standard of living and are doing everything to make their kids have even better than they have.)

Now, after all that, he STILL couldn't "get it" when I told him that it's simply a matter of priorities and where/how you want to spend your money. At least his wife understands, but he just grumbles.
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