This is a discussion on Question about the Economy within the Off Topic & Humor Discussion forums, part of the The Back Porch category; Well the economy in the NATION might be strong, but certainly not here in MI!!!...
Well the economy in the NATION might be strong, but certainly not here in MI!!!
Better to die on your feet, than to live on your knees.
I would go all the way back to Eisenhower read his Farewell AddressCongress (and our entire political system) has been in a dysfunctional state born of ideological stupor since at least the Gerald Ford administration.
He was the last President to have a truly balanced budget (Clinton was able to do it with fancy accounting, whch is a sad second place) and he built SAC, Put God in the Pledge of Alligence and the started the Interstate system.
We ( the entire Western World) have been living a lifestyle that is unstustainable and it is time to pay the piper
A real man loves his wife, and places his family as the most important thing in life. Nothing has brought me more peace and content in life than simply being a good husband and father.
But other then cars, how do we not meet our own energy needs?
And why is the American midwest the breadbasket of the world if we don't produce substantial amounts of our own food?
I'm generally against government bailout, but in this instance I'm not sure it was a bad idea. If just one of these institutions was going down I'd be playing the fiddle while it burned, but several at once rocked the market in a huge way.
If the government hadn't done something about it, just about anything that would be seen as positive, then the stock market really would have tanked and we would be going bad. Perception is the reality when it comes to the volatile world of stocks.
Yes, the midwest has been (note past tense) the breadbasket. No longer. We import huge amounts of food from overseas. E.g., fish from China; Beef from various places, Veggies from South America. And we burn our food for fuel, thus raising the cost of all food for ourselves and others in the world who depend on our corn output.
An economy based on trading paper instead of production of food, consumer goods, and defense needs, is doomed.
To the participant who commented that we need to look back to Eisenhower and not Ford, as I suggested, you might be totally on.
Ike, if nothing else, laid the foundation for prosperity by building the interstate highway system. His successor, Kennedy further laid a foundation for prosperity with the space program which brought us these wonderful machines we use to chat with.
I can't think of a substantial forward looking idea that came from any of the lot of them afterwards. Johnson at least tried in some ways. But, Nixon, Ford, Carter, Reagan, Clinton, Bush I, and Bush II haven't had a single forward looking thought between them. Oh, "free trade, globalization, and other slogans, "trickle down," sure.
Reagan did have one flight of fancy about a hyper-plane going to Japan in 30 minutes, but the idea was quickly squelched and remolded to Star Wars defense systems. I guess we won't find out if that was worthwhile until N Korea or Iran tests it.
An economy makes progress when new things are made and brought to market. Some such, require massive government investment and political capital. E.g., the interstate system. So yes, we may need to look back to Ike as an example of the sort of leadership we have been lacking.
As far as the bailouts, it'll be debt, same as tax revenue over eons, but it's still inflationary.
In a perfect world I would be against any and all bailouts, but this one probably makes some sense due to the intertwined global economy and the credit markets in the tank.
I think this is pretty dead on right. The CRA and the Clinton mess sure added to the problem, along with Barney Frank and his cronies.My two cents. Yes, I think it was absolutely proper. The reason the mortgage companies and their insurers went down is solely due to the government mandate for these companies to provide bad loans to individuals who could not possiby afford a home. The businesses are not to blame. They correctly assess who is capable of paying loans and they provide mortgages for those who are qualified. However, the government got involved because some were screaming about racism and forced the lenders to give money to people they knew very well would never repay. The government caused the problem and the businesses should not be held accountable for what the government caused them to do.
Since we are the government it is the responsibility of the people to try to make things right.
As far as the overall economy, McCain said it best and was trashed for speaking the truth. The economy is strong. Ninety four people out of every hundred have work and those who don't are typically between jobs. We are certainly not in a recession. That economic term is well defined and simply doesn't apply.
Many people simply listen to what the media feeds them, especially if it fits their political persuasion .I suggest everyone read the columns of Dr. Sowell rather than the blathering of Greenspan and his cronies. The truth is that we are in a strong historical position of economic growth and that has no signs of ending (unless the American people continue to choose socialism over capitalism.)
I also want to add that this so called bail out is actually a loan. Most people remember the Chrysler bail out on the '80s. That, too, was a loan, which Chrysler repaid over time (well, most of it.)
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"A man without ethics is a wild beast loosed upon the world" Albert Camus
it is not. government use of taxpayer money to take over ANY business is socialism bordering upon communism. Capitalism, by its very definition is to reward those do good business and to perish any business with bad or unethical business practices. These savings banks who unethically leant money to "sub Prime" borrowers only wrap those loans into securities to be sold off to investment banks which would trade them on the public markets was just unethical of a practice as Enron and so far beyond the pale in regard to lending practices and proceedures.
These banks should collapse. When an infection grows on a body it needs to be cut out, even if it stings for a while it is better for the body as a whole.
laissez faire "leave alone / let it be" is the principle of a free market and the government, specifically our government, is NOT supposed to bail anyone out especially bail out bad businesses. It is crazy, no one would expect the government to takeover a business that was wildly successfull and profitable, so why take over the oppostite?
latest news has it that our tax money will be bailing out foreign banks http://www.politico.com/news/stories/0908/13690.html
I am sworn to protect the Constitution of the U.S.A. from all threats both foreign and domestic.
It's not right ! Everytime some bank or some company has a major melt down after they have made major money they look to Uncle Sam to clean up the mess because it will destroy our economy.Where's the regulation to prevent this from happening ? The last bank bail out cost every taxpayer $1200 ! Why
should I have to pay for it ; It's not morally right
It is absolutely not proper. The congress will most likely put one man, Paulson, in charge of this financial fiasco, with little or no oversight. Some need to look at the proposed legislation. The federal government will then be responsible for debts that they don't even know the value of to the tune of about 1.3 TRILLION dollars.
For those people that think that free unregulated markets are the way to go, well here you go folks, this is exactly what you get. It is not the result of the government forcing anyone to give loans to people because of race or whatever. It is the result of financial instituions getting away from sound lending practices. Instead of making people stay at 40 percent debt ratios they let them go to 50 or 60 percent debt ratios with variable rates, then bundling and selling the loans to financial institutions that were willing to take the risk hoping to turn profits for their investors. It is the result of people taking out two mortgages on their homes so that thay can buy the 60,000 dollar Hummer or whatever else they desire. Then when the interest rates go up, and they can't make the payments the go into default.
It is the result of insurance companies getting into financial instruments when they don't have a history or the knowledge of such instruments. Other companies getting out of their regular business because the money in something esle looks better. Well I can put whatever I want on paper, but that doesn't make it a financially sound thing to do.
But now since we are in this situation, the government is going to use the excuse that these institutions are too big to let fail. If they fail this will effect the world economy. It could put the US into a credit crisis where people would not be able to borrow money and companies would not be able to raise capital. I say BS to that. Let them fail and let the economy go where it may. We are already in a financial crisis, most people spend more than they make, and the federal government (ok the taxpayer) is 10 trillion dollars in debt with no end in sight. Everyone is worried about the stock market values, and financial institutions, when in reality, the values of stocks on the market are probably many times what they are worth in real dollars. When the government finishes this deal, they will have no idea, absolutely no idea what they have purchased and what the real dollar value is, or what it will accomplish. Anyone stop to think about if this is just the tip of the iceburg. What if many other major institutions start going down, you all ready to anti up on those too.
And sorry to say, this is political. You have one party that wants to regulate albeit probably too much who we call liberals, and another party that wants to deregulate until there is a crisis like the S&L and this latest crisis, then step in and bail them out with taxpayer money, and people call them conservatives. If you look at the facts and the consequences of their policies, then the reactions to those consequenses how in the world can anyone like any thing they see, and say hey I'm a whatever party affiliation.
It is time to clean house people. The elections are only a month and a half away. If you think the people in Washington are there for you, well guess what they ain't. You don't have enough money for them to care about you.
Duisburg, and yes your right. Paulson this morning did not rule out the fact that the feds would step in and bail out foreign financial institutions. He said since it was a world economy we would do what we had to. People have lost their minds.
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All the other bad stuff, insurance, derivatives, packaging of loans ALL follow from this affirmative action policy. The government should not mandate businesses to make bad business decisions. And that is EXACTLY what has happenned here.
From David Halko's blog:
Back to section 804...
(b) Majority-owned institutions. In assessing and taking into account, under subsection (a), the record of a nonminority-owned and nonwomen-owned financial institution, the appropriate Federal financial supervisory agency may consider as a factor capital investment, loan participation, and other ventures undertaken by the institution in cooperation with minority- and women-owned financial institutions and low-income credit unions provided that these activities help meet the credit needs rating of local communities in which such institutions and credit unions are chartered.
Race and Gender is called into question of the employees of the bank?
If you are part of a bank wanting to expand your business and you are the wrong race or gender - you can fix your gender or race problem by writing risky loans to "help meet the credit needs rating" in your community.The name of this type of loan, which people are getting accustomed to, in the 2008 is "Sub-Prime Loans".If you are the wrong race or gender, you have to write bad loans in order to keep your bank from being suffocated by the Federal Government. Let's continue with Section 808 of the law...
SECTION 808-Operation of Branch Facilities by Minorities and Women(a) In the case of any depository institution which donates, sells on favorable terms (as determined by the appropriate Federal financial supervisory agency), or makes available on a rent-free basis any branch of such institution which is located in any predominantly minority neighborhood to any minority depository institution or women's depository institution, the amount of the contribution or the amount of the loss incurred in connection with such activity may be a factor in determining whether the depository institution is meeting the credit needs of the institution's community for purposes of this title.
You have to love this one: if a bank loses money, your bank will not be starved to death.This is a good one, too: if you turn over ownership or management of a branch to someone based upon the "correct race" for that community or turn over ownership of a branch to a "better gender" - then the Federal Government will not starve the bank to death.What exactly is a "minority"?
...The term "minority" means any Black, Native American, Hispanic American, or Asian American.
The racists are at it again.Penalizing people for their ethnic background is a poor way to run any business, never mind a nation.Who actually benefited from this law? Not the lower-income citizens, who were supposedly to benefit, because they have been defaulting on their loans and losing their homes.Not the banks, which were coerced to provide bad loans, because they have been under tremendous pressure to keep from going out of business due to the citizens who were defaulting on their loans.Only theliberal racists, who used the power of the federal gun, were the ones who benefited from this system.
Remember the Liberal activist group, ACORN (Association of Community Organizations for Reform Now), perpetrators of voter fraud across the United States?Rotten Acorn: Democratic Voter Fraud Map and HistoryWhat does the continual illegal voter fraud activities of ACORN have to do with the CRA? Follow the money... how is ACORN funded for their voter fraud? Where do they get their money from? Who receives the benefits for the voter fraud on a multi-state level?Apparently, ACORN abuses this Carter/Democratic legislation by organizing followers of their special interest group to complain to the regulatory agency, to starve banks which did not donate money to their politically affiliated community groups or perform enough bad loans to their politically affiliated community group followers.Founded in 1970, ACORN successfully lobbied the the Democratic Party in 1977, to create an indirect funding mechanism, in which political activities would be donated in return, which apparently included voter fraud.
So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities. A man named Bruce Marks became quite notorious during the last decade for pressuring banks to earmark literally billions of dollars to his organization, the "Neighborhood Assistance Corporation of America." He once boasted to the New York Times that he had "won" loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group. And that is just one "community group" operating in one city â€" Boston.
SD Wrote in response to Farronwolf: "I don't think you fully understand the magnitude of the racist policies associated with banks, mortgages, and other financial instruments. This has nothing to do with businesses willfully providing bad loans."
Good grief!!!! A large segment of the defaulting loans are on McMansions. Nothing racist going on there. And yes, businesses willfully provided bad loans, re-sold the originated loan to intermediaries (brokerage houses) who re-sold the stuff to saps like me.
The only comfort is that there were bigger saps with smarter minds apparently buying the same worthless paper over at Bear Stearns and Lehman, and AIG.
This is not a bubble crisis. This is a crisis born of greed, of a refusal of regulators to regulate, and dishonesty at an enormous level.
Years ago a friend of mine complained that his son could not get student financial aid because they (his parents) had been prudent in their finances and had a net worth which precluded them from getting assistance.
His neighbor, with roughly the same income, was a profligate spender and in debt to his eyeballs; he had it all--including the boat.
The neighbor's kid qualified for financial help while the kid with prudent parents did not.
The parallel situation has happened here in the mortgage meltdown.
People were enabled (and sometimes tricked) into purchasing things they couldn't afford. Yup, there is personal responsibility involved, especially when there were lies put down on the application, but the originator bore NO risk. The loan originator knew he could find a market of willing fools--including myself; and of course the folks who run the large pension funds too.
So, here here to Farronwolf's comment: "For those people that think that free unregulated markets are the way to go, well here you go folks, this is exactly what you get. It is not the result of the government forcing anyone to give loans to people because of race or whatever."
Without going any deeper than I can to keep from getting banned, I'll keep it short.
In short answer to the original question NO, it's not right. It's not right in any way shape or form. I say let them fail and I say that with the full knowledge that I have friends and family that will be hurt hard by the initial plunge.
The FED, the SAC, et all have no reason to exist. They should cease and desist all operations immediately and let the market go as it may . If you think about it, America was known as the best place to be, the most free place to be, and the fastest growing economy, political power, and free country in the world for what...almost 150 years, long before the fools in control of this country decided to make various 3-letter acronym agencies to "fix" all our problems.
If a fool comes up to you on the street and claims that he burned all his money on gambling and whores and asks you for monetary help and support so he can continue on in his quest for stupidity, do you give him that which he desires? Is that what he really "needs", or what you "need" for that matter? If you really wanted to help, you'd show him the error of his ways and send him on his way. Anything else, makes you more foolish than the fool in the first place.
Let me ask you this as well. What do you call it when someone comes to your door armed, pistol whips you, says "gimme the money or I'll shoot you and everyone in the house", takes all you have, and runs off with it? Robbery right? It's not theft(which is bad in it's own right, but bear with me), it's robbery.
Robbery: The taking or attempt to take anything of value from the care, custody, or control of a person by force or threat of force or violenceNow, remember those definitions and apply them forthwith. As an example, let's say I as a hard worker am making say...100k per year for my effort. Let's further add that I barely graduated High School, dropped out of college, but managed to work hard and get myself pointed in the right direction to get me where I'm at. It takes long hours, long days, lots of studying etc... but eventually I'm rewarded for my effort. Yet before I get the fruits of my labor, the "Government" takes what I rightly earned by threat of force(ie robbery) and gives it to the fools that squandered their money or invested it foolishly or better yet never got off their collectively lazy donkey-quarters to start with. What's the difference between that example and being robbed at gunpoint in your home?Theft: The crime of taking property of others without permission.
They're both just as wrong. The only difference I see is that one acts under color of law which makes it even more heinous.
I know, I said it'd be short, but I just couldn't refuse.
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Reply to Packinova: While I don't entirely agree with your position, I do agree to this extent---
If some poor down and out thug breaks into my home to steal my TV, he might get shot in the head.
When the big shots on Wall Street steal my investments, and then expect me to pay for the losses a second time from my taxes, there is no penalty and no threat of them being shot in the head. They keep their billions, and multi-million golden parachutes, and we all get stuck with the cost.
Something is wrong with this picture.
Frankly, a massive series of crime and criminality is what underlies the present mess. A deliberate failure to enforce existing law and to pass timely new regulations as things evolved, enabled the crisis.
I know a guy with a 75K job, who somehow got himself into a house initially valued at 500K--I have no clue where he gets the bucks to pay his mortgage and suspect it is only a matter of time till he loses all, and WE end up with the bill.
Repeat that scene a few millions of times over, and we land where we are, in a national and international financial crisis.
Oh, and for years now, interest rates have been held artificially low by the Fed. They have their reasons, but this mess is one of the results.
700 billion dollars would buy one heck of a lot of new medical and nursing schools; fund the education of more than enough such folks to break the back of the inflation in health care, and raise the standard of living for everyone.
Instead of that money going to good purposes, it is now going to save the economy from the ravages of crooks.
A cousin who lives in Berlin called the Russian government a kleptocracy, a government run by thieves. Is our present one all that different?
This is no different than Enron. Why aren't the people involved, like the esteemed Senator Dodd and the bank execs not being investigated like Ken Lay was? Where did the money go? I have a queasy feeling it is sitting somewhere in the Hamptons in the form of million dollar properties.
How much longer will Americans stand for this sort of criminal activity perpetuated by politicians who serve none other than themselves? My 401k and other investments are down bigtime, thanks to a few of these a**hats.