Catastrophic apocalyptic armageddon!
Or something.
I am so confused about the whole bailout plan thing that I have no idea what I’m supposed to think. Bailout bad? Necessary? Socialist? We’re all gonna die this weekend if it doesn’t pass? Overblown fearmongerin’? Serious butt-hurtin’?
Economics is not my forte so I’m kind of lost, but I’m curious what some of the savvier commenters around here think. Here’s stuff I’ve been reading.
Newt Gingrich wants the plan killed hard and quick, and says McCain should refuse to support it. Since Obama does support it, when it potentially fails, guess who’s the asshole? Obama. Or at least I think that’s the idea. I like it.
Jake Tapper says the Democrats are worried that that is exactly what McCain will do. Heh. But they also say they’ll never pass it unless McCain gets on board. I have no idea what any of this means.
My friend Nicki Fellenzer, who’s actually an economist, says the whole thing is a ginormous reward for bad behavior, and that we should let the free market do its work as it always has because it’s pretty fuckin’ stupid to think taxpayers should want (or be forced to buy) a stake in a failing enterprise. I like her ideas too, which seem to concur with Newt’s.
Mark Krikorian at The Corner says credit is not a civil right, and the idea that it is was a big contributor to this whole mess. I think that means he’s a RACIST! And also right.
Megan McArdle explains the run on money market funds, and in a followup, says we need a bailout because:
There is no benefit from a “tough love” strategy for anyone that even begins to approach the catastrophic consequences, for everyone, of a massive and rapid contraction.
I think that’s a fancy way of saying butthurt.
Michelle Malkin shows why Henry Paulson shouldn’t be trusted, with quotes by him over the last year or so about how there was no serious problem, we had already bottomed out, and so on. Paulson is the guy this part of the bailout plan is talking about:
“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Good lord.
Meanwhile, what does Joe Biden think about all this?
“When the stock market crashed, Franklin Roosevelt got on the television and didn’t just talk about the princes of greed,” Biden told Couric. “He said, ‘Look, here’s what happened.’”
The stock market crashed in 1929, while Hoover was president. FDR became president in 1932. Television wasn’t introduced to the public until a decade later. Dumbass.
(Hot Air has the video.)
Nothing is more clear to me now than it was before I read all of these articles. The whole thing is, as those in the military might put it, FUBAR.
If you could postpone an earthquake, but then the inevitable earthquake would be bigger when it happened, would you do it? That is the choice here.
EDIT: Morals aside, that would depend on whether you are rich or not. If you are rich, it is in your advantage to postpone it. That will give you more time to accumulate wealth and put it in materials & precious metals, so that when the depression forces the common people to sell their homes very cheaply, you can buy those homes and make shitloads of money when the economy gets better again.
If you are not rich, then the best thing to do is to take the depression now and not later.
September 23rd, 2008 at 4:09 pmJoe Biden may be right! If Franklin Roosevelt and his wife, Theodore, posted the true cause of the “inside job” that led to the Great Depression on their web site, as Obama told everyone when he visited all 57 states, then the TRUTH would be known!!
“He’s making it up as he goes along!” –John Cleese (The Life of Brian)
September 23rd, 2008 at 4:17 pmMarkku … Finn? look, ‘rich’ people might be able to take advantage of a melt-down, but the reality is that this is a huge arse-hammering of the vast majority of Americans who did not get drunk on greed over the last housing cycle.
Anyone who wants a mulligan should be forced to open up all elements of their finances to the scutiny of an investigator. Ran up a home equity line? tough. Took a second mortgage? tough. Ran up the credit cards (and that metric has gone nuts this year)? tough.
Mostly, greed drove people to pay high prices for houses, because they thought they’d make easy money. For every dirty realtor and mortgage guy, there was a homebuyer thinking he’d cash in on the boom.
And virtually all levels of the banking system, thru Fannie and Freddie were knowledgeable about just how tenuous it was. When they went to no income verification, only a fool would’ve thought this wasn’t going to collapse.
Bailing out public corporations so the shareholders don’t get hurt is just criminal. That’s like asking Uncle Sam for money toward your car loan because it’s only new until you drive it off the lot, then it’s at 90% of what it was before.
The infusion protects the US’ credit supposedly, but look at the markets … all it does is let China, and Japan, and all foreign holders rebalance the portfolio. There was a short pop while naked shorts were forced to cover, but it was a band-aid on a punctured artery. Let it tank and rebuild, but don’t believe anything the government does will do anything but slow down the inevitable. The financials are screwed, and people should feel the tough love. Give them a Euro-style 60-year mortgage, but don’t just let them off the hook.
No … fuck that. A trillion dollar bailout is just nuts.
September 23rd, 2008 at 4:30 pmYes.
Sure, there are many reasons for the depression, but not to have a depression is not among the options. The options are a smaller one now (no bailout) or a bigger one later (with bailout).
For the rich, the latter is better, since they have more time to prepare to make the most of it.
September 23rd, 2008 at 4:34 pmKrikorian is right. To my consternation, our current president has also swallowed that “American Dream”, everyone-deserves-to-own-their-own-home mantra. I don’t see said “right” anywhere in the Constitution, although the Declaration does mention “…they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness” early on. It’s that “pursuit of” right that’s endowed by the Creator — not that goal of Happiness. Simple, eh? Not to the Left in America these past four decades. That mass confusion among liberal minds is certainly part of the current mortgage debacle. Nevertheless, this whole thing is Bush/McCain’s fault according to what’s-his-face.
September 23rd, 2008 at 4:36 pmJust a warning, this thing eats posts if you don’t fill out the fields the right way.
I wrote a lot but it’s too much to write again. So I’ll just post this:
Ben Bernanke is a man who taught himself calculus, scored 1590 on the SAT, and has a PhD in Economics.
So, I guess I’m only listening to people qualified to argue with him.
No, Newt Gingrich nor Michelle Malkin qualify.
I always thought the conerstorne conservatism was about reason and logic … You know, enlightenment stuff.
I guess the cornerstone of conservatism is that the Government doesn’t spend X dollars on Y activity, and now Malkin says it’s dead.
So, whatever Malkin is now? I’m not that.
I’m the person who wants to use logic, reason, and economic science to put forth the best solution to what could potentially be a global catastrophe. And to me, there are a few people qualified to do that. One of them is Ben Bernanke.
September 23rd, 2008 at 4:39 pmIf the ‘pubs don’t support it and a world wide recession happens, the ‘pubs look like Herbert Hoover all over again.
But, if both parties support it, then it looks like the war in Iraq was cheap by comparison, and we will not be able to afford anything in the War on Terror. Essentially, Wall St. has lost us the War on Terror.
Hope those martinis taste good, Wall Streeters! It will be the last you will get, once the Jihadists take over!
September 23rd, 2008 at 4:40 pmWhat the US government has seemingly failed to take into account is that China will seize this opportunity. They will stop lending money, and start dumping the Dollar.
Butthurt doesn’t even begin to describe the results.
EDIT: Who you vote for doesn’t make a difference. They both want it up your ass. You just get to choose whether you like it black or white.
What you should do is start buying guns and ammunition.
September 23rd, 2008 at 4:43 pmI say no bailout. Here’s a good article on the mortgage mess.
September 23rd, 2008 at 4:54 pmThis trillion dollar socialist bailout is outrageous, there aren’t big enough words to describe how angry it makes me. If it were up to me we’d all head to NY to round up those stupid Wall Street fucks with big nets, and then ship them promptly off to Guantanamo. This was no “accident”, anyone with an IQ higher than that of a tomato could see something was wrong when a 19 year old running the Taco Bell drive thru could qualify for a $700k McMansion.
September 23rd, 2008 at 4:57 pmRach! How was the test? Email me!
Interesting couple of portions that John Lott pulled out of the bailout monstrosity here.
Tell me this doesn’t give you a prickly, gross, clammy feeling!
Oh, John’s an economist too. Best known for gun research, but an economist nonetheless.
Oh, and I found this article John just did for Fox News.
I’m not the only economist on the block who thinks this is absolutely abhorrent.
September 23rd, 2008 at 4:58 pmFrom what I can tell the idea is that federal rules regulating mortgages and outlawing what used to be called red-lining created a situation where bankers felt compelled to make loans that would not have met credit requirements previously. Pressure increased in the 1990’s to make loans to people for mortgages for which they were not previously qualified.
The rules went out the window.
So, over time, these guys got used to making loans to people that didn’t have the income or credit history to fit what we used to use as formulas to determine creditworthiness. Soon enough they’re applying the bad rules to everyone.
Demand for housing goes up. Prices go up. People are buying houses on spec counting on appreciation of the asset and heavy demand to bail them out if they get in trouble. Lather rinse and repeat - a lot - for about 15 years.
Add in that the mortgage companies start repackaging and reselling these higher risk loans to each other and others as investment instruments and lots of mutual funds and pension plans buy them.
Works fine until you hit a slowdown and prices collapse. Now you’ve got millions of mortgages that are marginal and the houses have lost value. People start abandoning them. But the lenders cannot resell them without taking a loss because they are not worth what they loaned on them in the first place.
The thing is if you are a bank and have a bunch of mortgages that are not being paid they are not worthless. If I stop making my house payment that doesn’t mean my house is worth zero, but the bank may not be able to recoup the full amount outstanding. But since my mortgage is bundled with 1,000 others, my house in Houston packaged with some in Dallas, and North Carolina and San Francisco nobody really knows what the bundle is worth.
Suddenly everyone lost confidence in the financial standing of several funds that hold these instruments and they’ve been failing one, two and three at a time until last week when everyone freaked out.
I think I have all that pretty close to right.
Should we bail them all out? That’s not clear to me. Certainly I do not believe we should bail out rich folks (investors) for poor decisions - and make no mistake, that is what is being proposed. But should pensioners lose some portion of their pensions because of these decisions? And will the rest of the economy tank if we let these guys take their lumps? They say it will, but they want a trillion dollars and my guess is they’d say pretty much anything right now.
On the other hand, what we’re buying isn’t worth zero as I pointed out above. It has some value, we just don’t know how much we’re over-paying.
Then you have the problem of having set a precedent that you’ll do this type of thing at all, meaning we’ll be expected to do it again. And of course we’ll have altered the relationship between us and the government (power grab) in pretty profound ways.
September 23rd, 2008 at 4:58 pmI have to say I’m with Nikki and Newt on this one. I’d also like to stop all foreign aid until our economy is healthy again.
I’m not scared…I’m resigned.
PS: Ditto the advice on ammo. Buy now.
PPS: Roger that on the Iraq War - we won’t be able to afford it.
September 23rd, 2008 at 4:59 pmI’m no economist either, but I’m feeling pretty damned SMUG and pleased with myself at the moment, because the second I read what you said economist Nicki Fellenzer said, well, damn! That is EXACTLY what I’ve been thinking, if not saying, all week.
This, in addition to thinking “Fuck Oprah!” every hour or so, all day, has me exhausted.
September 23rd, 2008 at 5:04 pmRedhead Infidel - even if we weren’t facing an economic downturn right now, I’d still be all for stopping foreign aid. I’ve had just about enough of my earnings being redistributed to those whose only claim check to them is whining need.
And by the way, this utter BULLSHIT is not NECESSARY! We are still experiencing economic growth. Granted GDP growth is at about 2 percent, but it’s still GROWTH. You can’t justify “crisis” when your GDP is still growing. Additionally, our inflation rates are fairly enviable at 5.4 percent, especially compared to the rest of the world, and there are nations out there who would sell their first borns for 6 percent unemployment! I don’t trust Paulson when he claims this bailout is necessary. I don’t trust the media when they screech about a recession. And I don’t trust politicians when they attempt to steal my earnings to pad the wallets of their biggest donors and supporters while obviously hoping that I ignore economic indicators.
FUCK THAT!
September 23rd, 2008 at 5:05 pmI have no loans, no mortgage, no credit cards, no car payments; thus, no debt. My shit may be ancient, but it’s mine and I don’t pay anyone else one dime for the privelege of using it.
SO I don’t give two shits about the economy … what I care about at this EXACT MOMENT is …
HOW. DID. YOU. DO. ON. THE. EXAM?
I demand to know.
Oh, and fuck Oprah, rich know-it-all bitch.
September 23rd, 2008 at 5:08 pmMy wife and I hate owing people money. I know, that sounds unamerican but there you go. Our only debt is the mortgage on a rental property and so long as it’s occupied, the tenant is paying that. Our own house, cars, and airplane are completely paid for. We have not paid a penny in credit card interest in years.
Let me tell you, that’s a good feeling. It can be done, folks. All you have to do is live on less than your income (take home pay, not gross). It doesn’t matter how much you earn, it’s what you have left over that counts. Get a copy of “The Millionare Next Door”, read it and live it.
September 23rd, 2008 at 5:10 pmYeah, what they said… how was the test…? Is your Chem prof still sporting hardened nipples after grading it? Enquiring minds (or mindless…) ya know…
September 23rd, 2008 at 5:16 pmNikki - agreed! I’d also like to abolish welfare without work; and welfare/education/free healthcare for illegals; plus I’d like to ship all the foreign criminals out of our country instead of incarcerating them to the tune of $60k/year; and dump the UN. But that’s another post…
Dogette - ditto the Fuck Oprah. I actually had that typed in and deleted it in a re-write. My bad. The comment is just not complete without it.
I saw this comment over at HotAir that helps give a little perspective:
September 23rd, 2008 at 5:18 pmI went to Vegas this last weekend so this seems apropos: let it ride! That didn’t turn out so well.
Seriously I think this idea sucks. If there was any money to be made by snapping up this debt people would be putting their own money in it. Since I am not interested in picking up this investment for myself, I see no reason why I should do it via the government.
It’s a bad investment period, that’s why it tanked. Let the original investors hold the bag. They’re just trying to pass it on to the next sucker. Will it freeze up credit? Maybe. Well if that is the case why not make credit available with our tax dollars to valid businesses? Why go through the same middle man who has already shown their total ineptitude?
Oh and free up a little American money to American hands by drilling for oil here. I suppose that’s above Nancy’s paygrade. Come to think of it just about everything appears to be above the paygrade of the clownshoes in DC.
September 23rd, 2008 at 5:19 pmDang, just got moderated.
*Akismet flashback*
September 23rd, 2008 at 5:19 pmIf FDR were president at that moment, no doubt he would have authorized his press secretary to send out an e-mail to the press corps, and he personally would have sent a text message to all American citizens’ cell phones.
I see a future for Biden teaching American history in a public high school.
September 23rd, 2008 at 5:24 pmWow Larry, I’m so glad that someone else out there thinks the same way I do. Well said.
September 23rd, 2008 at 5:37 pmNicki - What happens if the commercial paper market freezes?
September 23rd, 2008 at 5:54 pmI think we’re heading for some deep trouble. Every business runs on short term loans and if the bail out doesn’t happen, there will be NO MONEY available in the banking industry.
That means farmers won’t be able to get loans to plant next year’s seed crops. Business’s won’t make payrolls. Buildings won’t get built, old buildings won’t get torn down, and nobody’s Internet is going to work any more because the pipeline that your data runs through exists in a company that runs on short term loans.
You can smile about YOUR lack of debt all you want, but you won’t be smiling when there’s no food in the damned stores. Trucking companies need short term loans to keep their rigs on the road, delivering the produce you see in your store.
Yes, this is huge mess that the Democrats got us in to. But plunging the world into a depression is no way to get out of it.
September 23rd, 2008 at 6:01 pmhere’s my quick take: I don’t like it, but I think we have to do it. The only reason I think gov’t should bail these guys out is because they largely forced these companies into it, and while the companies didn’t shrink at undeserved massive profits, they probably wouldn’t have taken the risk if congress hadn’t forced them to.
September 23rd, 2008 at 6:39 pmI say no bail out unless someone goes to jail. And to make it fair, the RNC gets to pick 5 and the DNC gets to pick 5. While the public gets to vote on another 10 that includes officers from Fannie Mae, Freddie Mac, Paulson, Cox and any lawmaker with oversight of the finicial markets and took campaign contributions from said instutions.
September 23rd, 2008 at 6:47 pmI find it almost laughable. Congress wants to bail out a destroyed system two years after denying the administration the opportunity to reform Freddie and Fanny. Democrats got rich, now everyone gets to suffer. (I think I am in the wrong party. I want to get rich fast and let the rest of you suckers bail out the system later.)
September 23rd, 2008 at 6:50 pmGod how I hate politics–particularly McCain and Obama. We need real change. Not more-of-the-same change or Chicago-Machine-Politics change
Listen to Megan McArdle and Bonnie. They know what they are talking about.
This is a liquidity crisis, and having the banking system lock up will throw us into a deep recession or possibly a depression. The consequences would be far more serious than just having a couple of investment houses fail. Totally solvent companies would also be unable to find the cash to maintain their day-to-day operations, there would be a run on the banking system, and there are estimates that as much as $30 TRILLION in net worth could disappear (hint: that’s more than 50% of our current national net worth).
Anyone holding stocks or mutual funds would be totally screwed. Hell, you might not even be able to get your money out of the bank. There would simply be no place to hide from this magnitude of financial disaster.
And guess what happens then? The Federal Government will still be deeply involved, because of the FDIC guarantees if nothing else, plus annual deficits would balloon because of a rapid decline in government revenues. So we’d STILL be out the $700 billion (or more), with a totally devastated economy to boot.
Finally, I will note that the assets that are going to be purchased in this buyout are NOT worth zero. The problem is that a lack of liquidity has temporarily caused them to be far undervalued. Once they are off the balance sheets of the banking system and the markets return to something approximating normality, they will return to close to face value (the underlying mortgages are still something like 98% sound), and the government can sell them off and recoup most of its original investment.
This is not so much a bailout as a massive injection of liquidity into the markets, with the government taking these instruments as security for future repayment.
Not, perhaps, the most desirable situation, but far better than the alternative.
September 23rd, 2008 at 6:50 pmIt was Malkin’s article that really got me steamed. I can’t speak for all the markets and liquidity stuff, what really bakes my cake is the absolute control that Paulson would get. Rachel quoted it:
That right there scares the bajeebers outta me.
September 23rd, 2008 at 7:02 pmBen Bernanke is a man who taught himself calculus, scored 1590 on the SAT, and has a PhD in Economics. So, I guess I’m only listening to people qualified to argue with him.
Only a Bachelor’s in Economics and a university professor taught me calculus, but I’m otherwise qualified by your criteria, so perhaps you will listen to me. This plan is a disastrous con that the American people would be complete idiots to swallow, Bernanke and Paulson have massive conflicts of interest, and it simply will not work as advertised. It cannot.
Bernanke says that if the plan is not enacted, there will be a recession and unemployment What he is not saying is that if the plan is enacted, there will be recession and unemployment… because this is what always happens after an extended period of economic growth and job growth, especially illusory statistical GDP growth that is primarily the result of redefining inflation out of the numbers. Mr. Helicopter Money - if you don’t understand the reference, you should just accept what you’re being told now - is attempting to snake more resources he can throw at the avalanche in a futile attempt to delay the inevitable. The amusing thing is he’s applying an outdated Keynesian model to what is empirically an Austrian world. This is amusingly ironic and the sufficiently educated will understand why.
Now, why is the delay important? Because it allows him and his banker friends to convert their worthless paper assets into real ones at the American taxpayer’s expense. But the economic contraction will come in any event, since it’s not something that can be prevented by changing the names on the ownership titles.
September 23rd, 2008 at 7:08 pmMy basic opinion on this whole thing is that I am quite pissed that I will have to pay to bail out a bunch of manipulative, greedy assholes who have been living the high life based on fabrications and lack of sense for the past decade.
Much jail time should ensue.
September 23rd, 2008 at 7:09 pmListen to Megan McArdle and Bonnie. They know what they are talking about.
No, they don’t. They’re Keynesian-trained and so they don’t understand the basic problem, which requires the Austrian economic model to properly comprehend. The recession and possible depression is the inevitable result of the historic period of economic growth. They’re just babbling about the usual “smoothing out” of the business cycle that no government has ever been able to achieve. Liquidity is merely one symptom, it is not the disease.
The longer you delay the correction, the worse you pay in the end. It’s already going to be bad enough due to Greenspan’s decision to put it off, and further delay in taking the medicine will only make it worse.
September 23rd, 2008 at 7:13 pmPlato wrote The Republic after a democratic mob ordered the death of his mentor, Socrates, the wisest man in Athens. Plato tried hard to find a middle ground, but what he did not foresee, could not foresee, was the rise within a republic of a professional political class. I’m not sure who said it: “power does not corrupt, but the corruptible are drawn to power.” Indeed. Our Congress is full of con-men, scalawags, misanthropes, drunks, carpetbaggers, plutocrats, self-promoters, and thieves. We have seen how they squander taxpayer money by the trillions. We should trust them now in a time of crisis? I don’t think so. Ayn Rand is the only contemporary writer to state in no uncertain terms who they are: looters. Self-interest before country, that is their motto. To that I say HELL NO!
Let the chips fall where they may. Congress can pass a single law that would right this situation. The penalty for failure by a CEO, CAO, or board of directors for bankruptcy is DEATH. It would put a stop to thievery and skullduggery at the highest levels of corporate America in a heartbeat. There was a time in this country when we hanged horsethieves. It’s time we made the penalty for the theft billions just as personal. Hang them. And when his lawyer loses in court, hang him, too.
Bill Whittle penned a fine essay about the web of trust. Uh-huh. I have played by the rules and prospered thereby. Because I trusted the market would assess risk, award investors, and damn the losers. Fair is fair. I’m willing to take my lumps when I’m wrong. I’m not willing to take a beating when someone has cheated. The current situation reaks of great, stinking gobs of bullshit. And the decisions now are in the hands of the wrong people. Double-bullshit.
If the markets cannot restore faith, why bother with markets at all? And when did the price of .45 ammo hit $15 a box? Something ain’t right, brothers and sisters. It ain’t right.
September 23rd, 2008 at 7:20 pmI don’t have a clue about what to do.
Keep the gov’t out of it as much as possible seems best.
September 23rd, 2008 at 7:21 pmEvery business runs on short term loans and if the bail out doesn’t happen, there will be NO MONEY available in the banking industry.
Damn Keynesians don’t even pay attention to their own idiot model. What has S been this past decade, Bonnie? S=I, remember? Where has I been coming from? Foreigners and inflation. The bailout doesn’t help the situation you describe at all.
If you want more loans, you have to jack the interest rate up to 20 or 25 percent. Then people will save and the savings/investment pool can grow. Three or four years of contractionary pain and then it’s back to growth. Of course, the bankers lose their worthless paper and unemployment goes to 20 percent, so Mr. Paulson and Mr. Bernanke don’t like that idea. Much better to rob the taxpayers instead and put things off for another 6 months until the next crisis.
September 23rd, 2008 at 7:21 pmLarry and Sumie, I’m exactly the same way. I only ever use my credit card to pay for things online, and then I pay it all off right away. I won’t use it at all unless I have enough funds in the bank to do an immediate transfer.
There’s a rewards system, so I actually get to exploit them instead of the other way round…heh!
The only debt I’d ever consider is a mortgage, and even then I’d know what I’d be agreeing to. Unlike some people, I actually bothered to pay attention at school.
September 23rd, 2008 at 8:05 pmThe Republicans screwed up the economy over the last 8 years. How we get out of it us anybody’s guess.
September 23rd, 2008 at 8:25 pm“Decisions by the Secretary …are non-reviewable ….” Why is this any surprise to anyone who has followed politics over the last 8 years? Executive decisions are NOT REVIEWABLE. Get over it, it’s the way things are. If you oppose this, you are un-American.
September 23rd, 2008 at 8:30 pmI suspect Bernanke is trying to apply Milton Friedman’s explanation of the cause of the Great Depression to this problem:
I just do not know enough about economics to know if it is a correct application or not.
September 23rd, 2008 at 8:38 pmI don’t think the commercial paper market will freeze up. The Fed has already taken steps to deregulate the amount of dollars its counterparts can auction around the world to $247 billion. That will provide more liquidity. And quite frankly, these banks and companies need to take action to get investor confidence back. THAT’s how you avoid a commercial paper market freeze. Fucking up, fucking up and fucking up and letting the government steal money from the taxpayers to bail you out does nothing for investor confidence.
September 23rd, 2008 at 8:53 pmIf they are going to bail out the mortgage businesses, shouldn’t that money pass down to bail out mortgages that are in trouble? I doubt it.
And I’m not in favor of rewarding those who do things poorly anyway.
September 23rd, 2008 at 9:03 pmI have been so against the bailouts that have already taken place that I initially just lumped the AIG thing with all of them, however AIG is a asscat of a different color. Whereas the other institutions could have failed and only been catastrophic for the fat cat Bazillionaires who worked for those institutions, AIG would have a real serious hurt on for the regular small time Mom and Pop business owners and people who depended on the insurance.
The AIG deal if structured the way I have heard it described would actually be paid back over time with interest, how many other government bailouts have that kind of deal? None that I know of.
September 23rd, 2008 at 9:15 pmDamn, Rachel, I am freakin’ more confused than ever.
People I trust tell me to trust the government (like President Bush and Michelle Malkin), but it just feels DIRTY!!!!!
Other people I trust (like Newt) tell me to avoid this at all cost. But so do some people (all Demon-rats) that I wouldn’t trust if my life depended on it!!!!!
I’m going to bed and staying there until President Palin and VP Jindal get elected in 2012!!!!!!!!!!!!
September 23rd, 2008 at 9:41 pmI have no idea what to think. I’ve tried to wrap my brain around it all but it’s too complicated for me. And I work in the finance world! (No, I’m not an adviser, nor do I handle investments directly thank God.)
The idea of bailing out people who made bad, and greedy, decisions makes me vomit a little in my throat. But the alternative is what? A massive depression the likes of which would dwarf the “great” depression? I don’t fancy making clothing out of potato sacks. Or rationing marshmallows (still not sure why great-grandma had to do that).
I’m trying not to panic and so far so good. I haven’t pulled my money out of the bank … yet.
*sigh*
September 23rd, 2008 at 9:42 pmI second this…
And tell us how your test went!!!
September 23rd, 2008 at 9:43 pmAnd here’s an update. Still think the bailout is a wise idea?
September 23rd, 2008 at 9:44 pmSurely The Great Teleprompter Reader knows what to do? Let’s ask him:
Oh Great Teleprompter Reader,
Before you heal the planet and fix our broken souls, please tells us what you, in your Marxist opinion, think we should do to fix this?
Wait . . .
The Great Teleprompter Reader says that the answer lies somewhere above his pay grade, but be sure to vote for him so as to prove that you are not racist.
Fuck Oprah and Al Gore!
September 23rd, 2008 at 9:45 pmI owe no one, and haven’t for years. I pay cash (cars, motorcycle, vacations, golf…etc.), yet want for little, and save now for what I may want/need in the future.
I’m just afraid that, with two children in college, the money I have saved and invested over the years to pay for it will get flushed during this CF. Background: Very conservative investments, over a prolonged period of time with moderate returns and recent rapidly increasing losses.
No clear answer is apparent, but I must call this a SNAFU vs FUBAR because it still smells like the same old pile of dung, just with a $700B price tag.
F’ing greedy crook bastards all of ‘em, regardless of party affiliation or the letters in their title…R/D/CEO/CFO!
September 23rd, 2008 at 10:03 pmI worked with a guy about 5 years ago at a very well-known electronics company. During his tenure, I witnessed a time when Tom needed to come up with $1500, which he could not do. “I don’t have that sort of money,” he told me.
He got tired of the grind, although only 31 years old at the time, and quit. He decided to be a contractor, and that’s what he’s doing now. He started buying houses on the cheap, did some repair, and then sold them. Here we had a guy who couldn’t come up with $1500, but he was buying houses with almost no money down! Part of the game, as he explained it, was creative financing so that he would not have to pay ANY money up front. “You can’t lose money in Silicon Valley housing,” he told me.
I remember talking to him in 2006 when he was trying to find money to fund one of his reconstrutions. He had just found money @ 15%, and way happy about it. As I remember, he needed $200,000, but borrowed $250,000 so that the extra $50k could be used to make the payments.
I haven’t spoken with him since, but I suspect he is in a heap o’ trouble today.
Why should you or I bail him out? Why should I pay for his gambles?
September 23rd, 2008 at 10:16 pmRachel,
I definitely think that onthow wins the CNAJUHG award. The “great teleprompter”…….lol!
Unfortunately, I am one of those in the evil real estate industry……and to be quite honest I am totally blindsided. I worked for a brief 6 months in the late 90’s as a loan officer for my builder and it was very regulated. Consider my eyes wide open…….no one can get a loan now. What do I know? I do not want this bailout to become a pattern, I want the marketplace to determine a company’s viablity…..but I also do not want the American economy to collaspe. My biggest concern is as McCain believes………….I do want some sort of oversight on this.
September 23rd, 2008 at 10:26 pmAnd I should have added…..
F**k Oprah and Al Gore!
September 23rd, 2008 at 10:30 pmI’m like you, Rachel. I have no earthly clue what to believe about all this. Guess I’ll just be a good redneck, and cling to my religion. Prayer seems the only effective option at the moment. Heaven knows our leaders on both sides of the aisle could use all the wisdom and guidance they can get!
September 23rd, 2008 at 11:20 pmI’ll chime in: No more bailouts! The people and institutions who made bad decisions need to suck it up and take their medicine.
I heard Michael Reagan on the radio today saying that the proposed legislation gives the Secretary of the Treasury near-dictatorial powers.
This is starting to look like the amnesty bill from last year, which the Senate tried to sneak under the radar in the dead of night. This has to be stopped, period.
September 23rd, 2008 at 11:37 pmPhilosophically, I’m against the bailout. Like most everyone else here, why should I have to pay for the mistakes of others? Why should I have to pay tax money towards some bankers who took some bad loans? Why should my money be used to bail out a bunch of idiots that thought they could flip houses and make infinite money over and over again?
Then I remember where my money actually is - in a bank. What’s going to happen to that money if the financial sector locks up? What happens to people’s retirement plans - honest people, mind you, who tried to save prudently - when the banks and firms that manage their retirement go under? How much will that cost to deal with? How much money from FDIC are we going to pay if half of the banks shut down?
Yes, it’s true that we shouldn’t have to bail anybody out. Yes, it’s true that, in an ideal world, we’d be able to tell them to go pound sand and let them collapse so they could “learn their lesson”. Trouble is, it’s not just a bunch of “fatcats” on Wall Street or “asshats” in hot real estate markets that will suffer - it’s anybody who’s financially connected to these guys, which, if you follow the trail far enough, is pretty much everybody.
Think of it this way - let’s say you’re a farmer and, next door, you have another farmer. Unfortunately, this farmer isn’t particularly attentive or motivated; instead of properly planting and maintaining his crops, he instead lets his field get overrun with noxious, invasive weeds. You now have two choices:
1. Let him rot and hope those weeds respect the fence between your farm and his.
2. Get the community together and have everyone pull weeds for a weekend.
Option 1 sounds good on paper - he gets what he deserves (no money from his crops, which are inevitably destroyed by the weeds). On the other hand, option 2 is probably the best bet if everybody else actually wants to make money this season - yeah, it’s unpleasant, and he should have pulled his weeds, but letting his weeds overrun everybody else’s fields just so you can feel morally superior is not a particularly wise option.
We went with option 2. Let’s hope our fields aren’t already overgrown.
September 24th, 2008 at 1:25 amConsidering I live in the foreclosure capital of the United States (Las Vegas, NV) I feel it is my duty to weigh in on this subject. We purchased during the big home buying frenzy that happened about five years ago. Within one year of buying, we could have sold and made about 130K. Like so many others, we were offered every kind of credit card, vehical loan, boat loan, etc. We chose not to live beyond our means on all levels; no new cars, no expensive vacations, etc., we had a mortgage to insure was paid each month in addition to building our retirement fund.
Last summer I mentioned to my husband how I thought it was bizarre that our neighbors would park their Hummers and SUV’s on their driveways rather than protect them from the harsh beatdown sun. (A personal pet peeve of mine.) He said that they couldn’t fit them in the garage because of all of the boats and four wheelers that took up all of the space.
These same people who may have chosen to live beyond their means are now in trouble. Three doors away there is a five bedroom house (apparently abandoned about eight months ago) that is on the market for less than what our THREE bedroom house is valued at. This house, in particular, was one of the boat, SUV, Hummer-laden that I had mentioned the summer before.
So, because my husband and I have lived within our means, have not taken a real vacation in four years, and are always looking at one more way that we can put money into our savings, i.e., we do not have cable television, we are now going to be punished for those who weren’t mature enough to control their impulsive behavior?
Although I keep hearing about how it is the banks’ fault and how buyers were “misled” and encouraged to sign on the dotted line, not fully understanding the terms of their loans, I think this is only a small part of the problem. With bankruptsy laws the way they are currently, these people may not even lose their homes and expensive toys AND will not have to pay for anything.
I have yet to see this addressed in the media (maybe this subject is brought up on the cable channels, but like I said, I wouldn’t know as I prefer to put that $60.00+ a month on the principal of my mortgage.)
Bailing out this situation will only encourage the same bad behavior all over again. How much more do we “middle class” have to hemorrhage in taxes to “bail” these people out?
I really could use a drink, but with the price of alcohol these days…
Oh and, fuck all of those stupid actors who pumped their fist in the air for Obama and, as always…fuck Oprah.
September 24th, 2008 at 3:18 amGore and Oprah caused the economic crisis? Why isn’t the MSM covering that? Oh, because they are the MSM.
September 24th, 2008 at 6:02 amLet Wall $treet and Washington burn.
September 24th, 2008 at 6:27 amGet a grip, people. This is all Oprah’s fault, really. There’s no denying that.
September 24th, 2008 at 7:57 amMy wife and I hate owing people money. I know, that sounds unamerican but there you go…
We have not paid a penny in credit card interest in years…
All you have to do is live on less than your income
Wow Larry, I’m so glad that someone else out there thinks the same way I do. Well said.
Well, I guess that makes people like us chumps. We could’ve been living well beyond our means for years now. We could be up to our eyeballs in debt with all the latest toys (BTW: my airplane is a 40 year old Piper Cherokee 140. Sure, it’s an expensive addiction but it’s paid for). Then, when the collapse inevitably comes, we can scream for others to pay for our mistakes.
Guess what, it apparently won’t end with bad mortgages. According to this Washington Times article, they’re already expanding it to cover bad student loans, credit card, and auto loans.
In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other “troubled” assets held by banks.
The changes, which were included in draft language that also opened the bailout program to foreign banks with extensive loan operations in the United States, potentially added tens of billions of dollars to the cost of the program.
And today, Congress is discussing a $25 billion loan package to the auto industry. Yippee! Free money!
Like I said, those of us who lived within our means and paid off our debts are chumps.
September 24th, 2008 at 8:15 amWell, I’m with Larry and several others. My credit card bills are about $4000 each and every month, since I use them for almost all purchases. And I have not paid a penny of credit card interest in 20+ years. I have 3 mortgage payments left … I’ll be completely free and clear before Christmas.
I did that by living WITHIN my means, and paying cash for any toy I desperately NEEDED!
So … Fuck all those “poor” folks who are losing homes they never could afford in the first place.
Fuck all the mortgage companies that knowing made loans to people with piss-poor credit.
And Fuck all the learned economists that claim we HAVE to bail out idiots that criminally soaked their shareholders while raking in big dollars for themselves.
The very first think that should happen is criminal proceedings - especially against the heads (or former heads) of Freddie and Fannie. A public execution or two would be appreciated.
The second thing is to cancel ALL of the bailouts. All the whining and wailing about “worse than the Great Depression … give me a break. Can you say big bad boogeyman? As many other economists have pointed out, the economy is NOT in the toilet, and not likely to end up there.
The third thing … why, oh WHY would you trust the fucking government to clean up a mess it perpetrated in the first place. The assholes who walk the halls of congress can’t balance their personal friggin’ checkbooks … it wasn’t that long ago when that was big news. The only idea they EVER have at fixing problems … which always turn out to be caused by their unintended consequences … is taking more of our money to throw at it.
There is absolutely nothing in the constitution about home ownership, credit availability or the right of the friggin’ federal government to play banker to the billions. JUST SAY NO.
Oh, and the poor farmers that can’t get a loan for next seasons seeds? I don’t recall that farm subsidies, forcing fucking ethanol down our throats or farm operating loans were in the constitution either. Another scary, scary boogeyman. Easy credit hasn’t dropped my grocery prices … and if it goes up a bit becausae farmers who are lousy businessmen go out of business. Too bad, so sad. (and, as I do every year, I threw out the letter from my friendly neighborhood government reminding me of the deadline to file for subsidies on my farm … fuck ‘em ALL). Getcher damned hands out of my pocket!!!
September 24th, 2008 at 8:28 amThe problem is that most people don’t really believe in the future. Deep down inside they believe that if the doom can be postponed, they might just wake up as if from a bad dream before it happens.
Nobody who suggests that “Let’s crash and burn right now. Some people will starve to death, many more will be left homeless, but at least not as many as would otherwise” will be very popular.
September 24th, 2008 at 9:14 amMarku’s first post more or less summed everything up.
I’m not an economics or business expert but as I understand it, we’ve basically got two choices.
A) We can bail out these companies to stave off a recession or depression. Best case scenario, they clean up their act and we never speak of this again. Worst case scenario, they keep doing what they’ve been doing and we’ll be up against an even WORSE potential recession/depression further down the line.
or B) We can let these companies go under and take the resulting recession/depression like a man. Best case scenario, the bad times only last a few years or so and in the end both the economy and the American people will be better for it. Whatever doesn’t kill us can only make us stronger. Worst case scenario, the bad times last longer than anyone expects and some big-government liberal who thinks he’s the Second Coming of FDR shoves a bevy of socialist programs down all of our throats.
And that’s just on the domestic front. I have no idea how other nations, particularly China, will respond to either option.
Personally I’m in favor of cutting our losses and trying to soften the blow as much as possible while we watch these companies crash and burn.
September 24th, 2008 at 9:29 amI do understand what is going on and while I have serious doubts about part of the bailout, I think it is necessary to prevent a collapse of the financial system. The greatest fear is a run on money market funds. If that were to happen, it would lead to economic ruin. Money market funds depend on a firm commitment to maintain the value of one dollar per share. No management firm can afford to allow that value to drop below $1.00 by even a penny. The guarantee by Gov. will not cost the treasury anything; but will prevent the kind of panic that would crush the market for quality short term debt. If that happened, it would impair the capital positions of even the strongest institutions.
September 24th, 2008 at 9:32 amIncidentally, a friend of mine (who is an economics major) says a government bailout would cost each American approximately $2,300. For a family of four that’s about $10,000.
September 24th, 2008 at 9:33 amSimply:
1. The bailout is not socialism, it is fascism (without the dictator and wars). Fascism = Public-Private Partnership, aka Corporatism aka Mercantilism.
2. The bailout is just putting more money on the National credit card that eventually has to be paid. Down the road the Reaper will be paid. As Markku wrote:
Sure, there are many reasons for the depression, but not to have a depression is not among the options. The options are a smaller one now (no bailout) or a bigger one later (with bailout).
It truly is a simple as that.
Austrian economics has your answers.
Govt. is the problem and not the solution.
It doesn’t matter if it is the Repub’s or the Dem’s, neither can fix it. They can only make it worse by meddling.
Get out of the way and the market will correct itself.
This used to be commonly known in this country.
September 24th, 2008 at 9:33 amSweet St. Darwin of the Galapagos with a corndog up his butt…
September 24th, 2008 at 9:34 amI hate comment moderation…
been posting for a few months now and it just started to throw me into moderation hell.
It occured to me the other day that our generation (end of the baby boomers 40 to 50 year olds) were once called the “ME GENERATION”, correct? Seems that many people my age came from hard working people who made it too easy for their children, wanting to give them more than what they had had as children growing up during the depression.
Can you imagine how messed up today’s kids are?
These kids have soooo much STUFF, but what they don’t have are parents who are able to give them the attention they need. Everybody is working to pay for all the STUFF, no one has time just to be a family anymore. I tried being a Girl Scout leader for a couple of years, finally gave up because the girls were so awful and the parents couldn’t care less. Being in Girl Scouts was just another form of free baby sitting to them, and I spent more time trying to correct their poor behavior that it just wasn’t worth it anymore.
I was so hopeful when Sarah Palin came onto the scene and now I feel like we, the middle class, are just doomed. Argggghhh. Why can’t it be November 4th yet?
September 24th, 2008 at 9:41 amCan someone please explain to me the difference between Kensian and Austrian??? I iz jus a dum rednek.
But seriously…I’d love a good (and layman) explanation.
September 24th, 2008 at 9:52 amThink of it this way. Say a bond cost 100.00, but if no one wanted it, what would be its value?? 100? 0.00? So what the governement is trying to do is create a floor say at 50% or whatever. Now with the backing of the government, there is actually a market for those bonds and so market can start moving again. If the market doesn’t start working. Then just envision going to work this week, and next and then waiting around for a paycheck that has does not come. Why? You may ask. The short term credit markets have frozen up because banks stop lending, and then the whole financial markets are frozen. Sheer panick sets in, unemployement jumps to ultra record highs (20-30%), and our blessed America falls into a deep recession for the next 3-7 years. Huge Huge damage to Wallstreet as well as main street. (side note: wallstreet was actually a wall set up for new yorkers way back when to keep feral pigs out of the town, alot of good that did). There are so many fingers to point in so many differnt directions. (Ultra low interests rates, government entities Fannie Mae,Freddie Mac operating in a free market(side side note: the alarm was sounded back in 05/06 and nothing was done…pigs!) , corporate greed & greedy politicians PIGS!!, Sec(for getting ride of the uptick rule back in July of 07, then finally get ride of naked shorting of stock last week,(because they were wrong, it was in place for the last 70 years dumbasses!!!!! PIGS PIGS PIGS!) Stupid mark to markets accounting rules, which are helping unravel businesses at a nuke flashing rate, because as soon as a company gets down graded they need to raise more capitial, then when the money gets tight, and then when financial institutions stop lending, companies then have a fire sale, flood the market with their holdings, prices drop to .20 on the dollar, other companies have to mark to market their holdings (which are the same as the next company) naked short sellers push on those companies, which then get down graded again and again, need to raise more and more capitial. The large financials and hedge funds pull their positions out of the company to protect their clients, and then the cycle goes on and on. Thats why we need this government program now, or we’re all S.O.L. Only a few fat PIGs are left standing… but what would I know. Im just a big eared country boy that klings to his guns and religion……blah blah blah..
~mole
September 24th, 2008 at 10:10 am“My basic opinion on this whole thing is that I am quite pissed that I will have to pay to bail out a bunch of manipulative, greedy assholes who have been living the high life based on fabrications and lack of sense for the past decade.
Much jail time should ensue.”
fuck jail time.I want to see some public executions over this clusterfuck
September 24th, 2008 at 10:31 amYou’re a fuckin’ idiot if you think that this financial mess is only because of the past 8 years. When were sub-prime mortgages forced on the banking industry? 1995 by the Clinton Administration, and implemented under threat of federal action by Janet Reno, you buttnugget.
Mohammad in a whorehouse, at least READ something before posting on a subject you know absolutely NOTHING about. And clean the drool off your keyboard before you fry what’s left of your single-cell brain.
Fuck you and Oprah.
September 24th, 2008 at 10:43 amRedhead Infidel - I am an idiot, I drool. So what. Could you cite to the Clinton/Reno/1995 blame you ascribe? I watch news, but have not heard that. Lots of people point to derugulation (they pulled the rug out from under us) of 8 years ago. Not sure where I heard the 8 year mem, but must have been on TV, through talking heads, as that is what provides the voices in my head.
September 24th, 2008 at 11:00 amI did hear it was due to minority mortgages, but again no cite or statistics.
I hate Oprah.
South Park Oprah.
Nomination for UHG award.
September 24th, 2008 at 11:01 amThe devil’s ALWAYS in the details.
While I think the bailout is probably necessary to keep markets liquid and prevent a free-fall, the outcome depends on what price the Fed pays for the assets. Do they make the banks and investment houses take it in the shorts and buy the assets cheap, or do they buy them at inflated prices and let the idiots who underwrote the paper skate?
If they buy cheap, then there’s the chance that these assets will recover somewhat over time. That is good.
However, the Fed’s likely to hire the same people who created the mess to evaluate the paper, and who knows what they’ll do? That could be bad.
The biggest risk is that the politicians will get involved and force the Fed to bail out everybody; banks, auto finance companies, mortgage companies, Fannie, Freddie, AIG…everybody.
That’s a big, stinking sack of BAD.
One thing that has been little discussed, which is the regulatory structure that has driven this mess as well. As has been said before, it goes like this:
1) Institute strict mark-to-market accounting
2) If the value of a security falls, the holder has to mark it down, forcing
3) The holder has to raise additional capital or sell a depressed security at a loss, requiring
4) Even more capital to be raised, forcing even more asset sales in a declining market, forcing
5) The holder to raise even more capital, etc., etc.
This is what we call a Death Spiral
September 24th, 2008 at 11:05 amRight. It’s aaaaalllll the Republicans’ fault.
They caused 9/11, they caused Katrina, they went back in time and turned Fannie Mae into a corruption pit.
All the Republicans. All their doing.
September 24th, 2008 at 11:13 amMany of the comments seem to be centered on the “the government shouldn’t bail out a bunch of people who borrowed too much” theme. As several people (myself included) have tried to explain, that is not what this is. The debts and mortgages underlying the derivative securities purchased by the government in this program will still have to be paid off — by the borrower. No one is getting any free money.
What needs to be headed off is a banking system meltdown that will result in 30% unemployment and a huge economic contraction that will last for decades. Probably longer, in fact, because it will propel Democrats into power and they will totally screw up the recovery like they did in 1930.
Not owing any money won’t do you any good. Unless you have your money buried in coffee cans in your back yard, you will likely be unable to access it. The same goes for companies trying to make payroll, or buy new equipment, or just buy the raw materials to make their next round of products.
Those who say that we’ll get through this, that the economy is in good shape are similarly missing the point. The economy is OK now, but without this program it will shortly contract into depression territory. The housing sector alone, which accounts for 20% of the economy, will virtually disappear overnight. That effect will be replicated throughout multiple sectors, and anyone who thinks that they are immune, or that they can weather that storm, is sorely mistaken.
And, as has been noted, the government will wind up with far more than an additional $700 billion in deficit spending, with nothing to show for it, simply because the economy will have contracted by a third and its revenues will have dropped by about $800 billion PER YEAR.
This is as opposed to the “bailout” scenario, where the government will spend perhaps up to $700 billion to buy these debt-backed instruments via reverse auction (letting the market set the price, incidentally), but will be able to sell them later at a profit thus rendering the actual expenditure as close to zero.
Clearly, this is not a desirable scenario. However, the alternative is much, much worse for everyone. We need to get through this crisis and then figure out how to prevent it from ever happening again, probably through a revision of the rules of government oversight and regulation. But we won’t have the luxury of that conversation unless we fix the liquidity crisis NOW.
September 24th, 2008 at 11:16 amKeynesian economics says that the economy is like an engine. It goes up, it goes down. When you understand where it is currently going, you can fiddle with it to make it do what you want.
Austrian economics is a bunch of rules. You do thing A, and thing B generally follows. These rules are derived from how individuals generally behave. It rejects the idea that you can trust economics to always go through the same periodical action.
September 24th, 2008 at 11:17 amZarba: just a quick comment to reiterate a point which addresses one of your concerns. The government is going to buy these instruments via reverse auction. In other words, the institutions holding the paper will be submitting bids on what they will be willing to accept as payment for their paper, and the lowest bidders win. The incentive, if they really need to get the paper off the books, is to go as low as they can so that they will be included in the deal. Hold out for too much dough and you might not be able to sell anything. It’s a market-driven mechanism, not a fiat from the SecTreas, that will set the price.
September 24th, 2008 at 11:20 amlk …. ever think of doing your own research instead of just spouting off with crap from the few places you do “read”?
While you’re doing that, check out who appointed the heads of Fannie anbd Freddie.
dipstick!
BTW … I’m not an economist, nor do I play one on TV. I will, however, point out that an economist writes editorials in the NYT … and he is the stupidest, most venal piece of shit that ever lived, and knows fuck all about economics. Like far too many of them. Which is why I discount their advice, in general. (yes, I do mean Paul “dumb as a stick” Krugman)
September 24th, 2008 at 11:47 amIf you haven’t read this, then you should. Short and to the point:
Economics in One Lesson
September 24th, 2008 at 11:53 amby Henry Hazlitt
HT,
Ditto. Well written.
I probably would have made everyone’s eyes glaze over with a discussion of mark-to-market (post-Enron) and credit default swaps.
The liquidity issue you speak of has clearly been reflected in the London inter-bank lending market. Banks now want a large premium to lend dollars to each other. Not a whole lot of trust between them at the present.
September 24th, 2008 at 12:02 pmRchl,
I snapped a bit earlier in comments, and was rude and uncivil. My apologies to you for flaming in your comments, but not to lk. I meant every word. And in my defense (per your comment rules), I would certainly say the same things to lk’s face, up close and personal.
I am just sick and tired of the stupidity of Leftists who keep electing these thieves and criminals to office and then blaming the very people who try and REFORM this shit so we don’t all suffer. I have never in my life witnessed such suicidal idiocy and I am having a tough time being civil to imbeciles these days. They are not MY Tribe and I am sick of humoring them and their puling Leftard memes.
It’s time to start cracking heads full of mush - these people need to wake up before they land us all in socialist hell.
September 24th, 2008 at 12:07 pmTo give you some idea of how full of shit Keynesians are, I quote Wikipedia:
Austrian economics
Can you see the underlying assumption behind Keynesian economics? That people in fact do behave according to a scientific model. What if they don’t? Well, then applying Keynesian solutions to an economical situation might lead to total disaster.
And by “might” I mean “will”.
September 24th, 2008 at 12:14 pmThank you Markku Koponen and Connan. I’m going to read through that Economics site. I never really understood the more complex economic ’stuff’…
Redheaded Infidel…I LUVS U!!! =)
September 24th, 2008 at 12:20 pmIK, do a google search on The Community Reinvestment Act. It was a law enacted in 1977 that the Clinton administration strengthened and used to stop so called redlining.
The following is an excerpt from a commenter at Hot Air who goes by rvastar:
More:
September 24th, 2008 at 12:39 pmApollyonBoB Says:
September 23rd, 2008 at 4:39 pm
Great! I’m sure congress will get someone really good with fancy money stuff to help oversee this, like Rangel or Dodd.
It’s not that it couldn’t work, it’s that it won’t work through government. Having the people who made the laws that screwed up the mortgage market make the rules for correcting it sounds lose-lose.
September 24th, 2008 at 1:25 pmAll so we can go through a harder fall later? No thank you.
September 24th, 2008 at 2:03 pmMarkku Koponen Says:
September 23rd, 2008 at 4:43 pm
Ban Chinese imports. Then they have worthless paper and little to no economy. It is a world of hurt to us too, but if we are on the edge and China pushes us off, grabbing them is the only thing to do.
September 24th, 2008 at 2:27 pmPaulson and Bernanke: go to jail. Go directly to jail. Do not pass Go. Do not collect $700 billion.
What appalls me here are the folks who say that we have to do this hideously immoral thing because the economy will collapse if we don’t. Ends don’t justify means. The economy will collapse, regardless. But paying for a bailout with money we don’t have can only be done by printing more, which means that everyone, including the poorest and weakest yada yada, will be paying this off every time they spend.
I’m trying to figure out what happened to FNMA in 1968. It was privatized in that year, and I read some brief snark about “Lyndon Johnson sold it to finance the Vietnam War.” But I haven’t found any details on that. Even a liberal knows that having a private profit system with a government guarantee is mucho bad…that’s the sort of thing they accuse Republicans of doing. If so, the Dems were involved every step of the way: founding, selling, weakening and bailing out.
September 24th, 2008 at 3:13 pmHi Rachel.
Apocalyptic feels right.
Lots of people say that the shit is gonna hit the fan sometime. Sir Isaac Newton believed it, and I ain’t about to blindly dismiss that guy.
September 24th, 2008 at 4:14 pmI’ve been reading Conan the Cimmerian’s link to Economics in One Lesson for the better part of an hour now. I’ve gotten through about a quarter of it. It is explained pretty well (my last economics class was more than 10 years ago), but I need to take a break and let my brain digest what I’ve read.
September 24th, 2008 at 5:27 pmEasier to do that when you are making more than $12 an hour. It’s what I call “career deflation”. A bunch of us lost jobs in the tech bust. We were pushed down to much lower paying jobs. If I hadn’t been unemployed for 13 months, I might have managed to hold onto my 401k money.
Having said that, we will own our place in 7 more years. We are buying from a friend, simple interest. If it all fall apart, then I guess we pack up the trailer we live in and move it a bit further down the road. I agree with you in principle, but it is so easy to tell people what they ought to do.
September 24th, 2008 at 7:17 pmWhen my wife and I married 25 years ago (1983), we were both still in college. Our first few months together, we averaged less than $400 of income. For the next couple years, we got by on less than $12K per year. It wasn’t until 1990 that our income began to be really liveable. We had a choice to make - live within our means and pay off our debts or increase our spending to (or beyond) our income level. We chose the former and that was a good thing. In 1992 at age 35, I became unemployed for 9 months. Fortunately, we got through it.
I know how hard it is to get by on a low income, but having done it more than once myself, I know it can be done. Hang in there and do everything possible to live on less than your take home pay.