Quote of the day
posted at 10:02 pm on October 12, 2008 by Allahpundit
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“With no desire to exaggerate, this might be considered the financial pre-conditions of a depression.”
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Don’t worry. If the big ‘D’ lands with both feet on your throat you can always ask Jimmah and Ros to build you house with their hammers.
Limerick on October 13, 2008 at 12:31 AM
Cut corporate income tax rates.
Eliminate capital gains.
Increase tariffs slooowwwly on manufactured goods.
Cut federal spending.
Control the borders.
Elect only politicians whose single purpose is to increase individual liberty.
BOOOM!
Economic growth and opportunity for all willing to move their arse.
Saltysam on October 13, 2008 at 12:32 AM
That would suck! I’ve been waiting and waiting for years to buy a decent home with a responsible mortgage. Why should my dream die simply so that irresponsible people can keep homes they can’t afford?
Socialism punishes responsible people, that’s one of the reasons it’s so vile and counterproductive.
FloatingRock on October 13, 2008 at 12:32 AM
Until now, everything but the cost of a house is up…but now the cost of gas is going way d-o-w-n.
Hmmm…
jgapinoy on October 13, 2008 at 12:33 AM
The rubberband snap back effect. It’s a real possibility.
Expect the worst and be pleasantly surprised
Kini on October 13, 2008 at 12:33 AM
Good prescription EXCEPT tariffs???
You’re kidding, right?
jgapinoy on October 13, 2008 at 12:34 AM
You know that program that started this all in the first place……….. Affirmative Action Loans?
……………. I think a good first step in fixing this mess is to repeal and stop this program. Then hold the politicians who implemented it accountable.
Neither has happened, all our government has done is throw money at it, and guess what, if you pay for something, you get more of it.
Seven Percent Solution on October 13, 2008 at 12:37 AM
Exactly–loose lending standards at Fannie and Freddie pushed by the Dims increased the amount of money available to buy homes and drove up their price. This made homes more expensive for responsible and irresponsible borrowers alike. Isn’t falling home prices one way to make housing more affordable? It is messy for housing prices to fall like this, but so many Americans were living beyond their means.
BryanS on October 13, 2008 at 12:37 AM
Fixed
Kini on October 13, 2008 at 12:39 AM
That would suck! I’ve been waiting and waiting for years to buy a decent home with a responsible mortgage. Why should my dream die simply so that irresponsible people can keep homes they can’t afford?
Socialism punishes responsible people, that’s one of the reasons it’s so vile and counterproductive.
FloatingRock on October 13, 2008 at 12:32 AM
The entire economic problem is due to falling home vaules. you stabilize home prices you stop the economic death spiral. If you want to buy a home get a better job.
I would rather see wages go up than home prices go down. With every drop in home prices more MBS and SIV and credit default swaps become worhtless which means more banks go under which means more panic. Stop the fall in home prices and you restart the economy. Same with gas prices. While it is great that gas prices are coming down, I would rather have full employment, high economic activity and higher gas prices, than low gas prices high unemployment and negative economic activity. You can’t have3 one without the other unless you bring massive new supplies on the market.
unseen on October 13, 2008 at 12:41 AM
Oil is way down because demand is down. People are cutting back their spending on discretionary spending out of fear that they will lose their jobs. Lower spending causes companies to lower prices to spur consumption–to no affect. Lower sales leads to laid off employees, who now have no money to spend.
Rinse, repeat. Great Depression #2.
BryanS on October 13, 2008 at 12:42 AM
They all seem to be dancing around that aren’t they.
Unless that happens, expect more of the same.
And if Obama wins, expect any investigation to disappear down that rathole.
Kini on October 13, 2008 at 12:44 AM
People still made money even during the first one.
Save save save
Kini on October 13, 2008 at 12:46 AM
Great another idiot with access to a keyboard…
Bradky on October 13, 2008 at 12:49 AM
That is, assuming 6 mo to 1 yr from now, we aren’t in a deflationary death spiral. The government sure is pumping a lot of money into the system which I would think is inflationary in the long run. I wonder, though, will it be enough? We seem to be very close to a process of contraction spending feeding on itself that occurs in a depression (as opposed to a normal recession).
BryanS on October 13, 2008 at 12:29 AM
True and that is the fight we must fight now. Deflation while it may seem great. you get a cheaper house, you get cheaper gas, cheaper stocks , cheaper food. Is really a very mean and terror filled event. It also means lower profits, less jobs, less capital to expand, less reasons to expand, lower tax rev which means higher tax rates,
However the last time the FEd fought deflation they won and we got the housing bubble. what bubble will form from this fight of deflation? But like you say we must first win the deflationary fight. but in a deflationary event CASH is king. so start saving and apying off fixed loans.
unseen on October 13, 2008 at 12:51 AM
And the dollar is up.
lorien1973 on October 13, 2008 at 12:52 AM
Exactly–loose lending standards at Fannie and Freddie pushed by the Dims increased the amount of money available to buy homes and drove up their price. This made homes more expensive for responsible and irresponsible borrowers alike. Isn’t falling home prices one way to make housing more affordable? It is messy for housing prices to fall like this, but so many Americans were living beyond their means.
BryanS on October 13, 2008 at 12:37 AM
ahhh. FALLING HOME PRICES are deflation events. You want to stop deflation you stop the home vaules from falling.
unseen on October 13, 2008 at 12:53 AM
You cant cut taxes enough to put people in homes. I dont think at least.
Plus, government needs to focus more on spending. In every state in this country, and country on this planet. the more a government spends in % to its gdp, the lower growth is. less government spending = more growth.
lorien1973 on October 13, 2008 at 12:53 AM
WAY OFF TOPIC!!!!
Liberal Outrage: A Pro-McCain March In Manhattan
Kini on October 13, 2008 at 12:57 AM
And we seem to be headed down the same path of electing socialists to power during this crisis–only to entrench more power in the hands of government.
McCain really needs to borrow from Reagan and paint Obama as nothing but the same type of do-good liberal that caused this crisis in the first place. Government really WAS the problem in this case.
I’m afraid that with an Obama win, we could see all conservative progress since the early 80s undone.
BryanS on October 13, 2008 at 12:57 AM
Let Wall Street run wild within defined legal guidelines and regulation created by Congress and associated regulatory bodies.
Any Congresspersons accepting any cash or gifts from anyone associated with a Wall Street firm or large corporation should be shot on sight.
Any corporate lobbyists suspected of exchanging cash for preferential Congressional treatment should be tortured and then executed by hanging.
Problem solved.
mylegsareswollen on October 13, 2008 at 1:00 AM
Right. Eventually values will reach an equilibrium, and if we end the affirmative action lending practices, as Seven Percent Solution refers to them, home prices should stay in a reasonable range. It sucks for those who bought homes at prices far higher than their real value, but if the outrageous prices were so obvious to me, having no special insight to the problem aside from common sense, then it should have been apparent to them as well. And I suspect it was for most, but they threw personal responsibility to the wind and decided to get in on the action themselves, hoping to make a bundle on their investment, often not even waiting to sell, rather taking out second and third mortgages to cash in immediately.
Patience is a virtue and is an aspect of personal responsibility. I was patient, waiting for home prices to fall in spite of everybody in my family disagreeing with me, telling me that historically, house prices virtually never decline, but I just knew they must be wrong. It didn’t seem sustainable, especially where I live.
Now those same irresponsible people are hoping to steal some go-juice from their more responsible neighbors, hoping to reignite the housing-bubble to let the good times rip and roar again.
But, NO!
They screwed up. They payed too much for their homes. They leaned too heavily on credit, spending money they didn’t have on crap they didn’t need. Now the house of cards has come tumbling down and they hope to build it back up again. But all the kings horses and all the kings men couldn’t put the credit and housing bubbles back together again.
FloatingRock on October 13, 2008 at 1:00 AM
True. But it seems that if the housing issue isn’t corrected, we just delay the collapse. I suppose we could inflate the hell out of everything and over time the situation corrects itself. Of course, high inflation makes borrowing for a home more expensive, thus depressing sale prices. We seem damned if we do, damned if we don’t.
BryanS on October 13, 2008 at 1:02 AM
Look, if you payed to much for your home, that’s your problem. If you can’t afford your home, get a better job or a less expensive home. Don’t expect us to pay for it.
FloatingRock on October 13, 2008 at 1:04 AM
It seems to me that the measure which would be the most effective in solving the economic crisis would be to immediately eliminate all barriers to energy production. This would include barriers against oil drilling, production, and refining; and it should include removal of barriers to drilling on federal lands, shale oil production, etc.
Remember how fast prices rose throughout the economy when oil got expensive?? There is a huge multiplicative effect via transportation on all goods … and even many services. Messing around with financial system fixes directly affects just a small part of the economy: oil prices pretty directly affect everyone.
I’m not big on conspiracy theories, but I still can’t help but think that the Democrats did this deliberately to cause election chaos and set the country up for a socialist takeover.
landlines on October 13, 2008 at 1:08 AM
FDR did a lot to extend that. But there were other factors that played into that which are not in play in today’s world.
However, I agree the results could parallel. Once home ownership is abolished.
Kini on October 13, 2008 at 1:09 AM
So your plan is to blow more air into the bubbles… The sad part is, if you’re successful in doing so for a while, a short while, the next crisis will be far worse.
You should write a book, Bubble-Economics and Perpetual Motion, How They Work.
FloatingRock on October 13, 2008 at 1:13 AM
Agreed on the energy thing. It would be our way of kicking OPEC while they are down. Moreover, it gets much more difficult for countries like Iran to cause trouble if they don’t have the money to do so.
I say, let’s have a national energy investment spree like we had on transportation during Great Depression. It’d give our economy much needed jobs, keep a ton of money from going overseas, and would make the job of securing our country much less expensive. I think both parties could sign on in general to the concept.
BryanS on October 13, 2008 at 1:14 AM
Again,
1) Obama poised to win
2) Our enemies obtaining nukes
3) Deperession on the horizon?
I don’t know–is God (or as AP says, god) judging America?
jgapinoy on October 13, 2008 at 1:15 AM
I hate to quote a Democrat, BUT…
“There is nothing to fear but fear itself”
gmoonster on October 13, 2008 at 1:16 AM
They dance around it because they realize that if they stop the affirmative action loans housing prices won’t have the fuel required for launching back into space.
What should be done is fix the problem by ending the affirmative action loans while spurring the economy with free-market incentives such as lowering taxes.
FloatingRock on October 13, 2008 at 1:18 AM
Keep an eye out for FloatingRock’s Pitchfork Sharpening Service.
FloatingRock on October 13, 2008 at 1:20 AM
How many times can a liar lie,and still lie to liars who lie to other liars who lie?
http://www.clevelandleader.com/node/7203
christene on October 13, 2008 at 1:21 AM
A less discussed contributor to the economic collapse are usurious practices legalized or adopted in the last ten years.
First, the unstable credit card. Credit cards used to be fixed rate, or variable based upon the prime. They stayed that way until the user cancelled. Now these same cards have a default or late payment rate, which can go to 30 percent for a single late payment or underpayment. The punishment rates were often snuck into the contract by stealth warnings included with advertisements in the billing. Unless the card holder notifies the credit company in a period of time as little as two weeks, the new punishment schedule is appended to the contract.
Consolidate your credit under one credit card. Receive the stealth punishment rate and at 30 percent debt becomes a lifetime of interest only payments.
As the economy slowed, banks have increased the stealth games and make huge profits on the overdraft and late fees. Banks have shifted grace periods to trap more and more persons into late payment, which not only gives a hot $39 late fee, but could swing the creditor into 30 percent punishment rate. For instance, I now am late on some cards if I pay after 2:oo pm on the day payment is due.
Second the revised bankruptcy law, lobbied for by the banks under Bush, makes liquidation of the home a requirement for middle income debtors. Formerly the domicile was protected. Now a person forced into bankruptcy (say by a 30 percent penalty rate that happened when he was temporatily unemployed or when he had a heart attack before the payment was mailed) must liquidate his home to satisfy creditors. This added to the ARM foreclosure glut, further depressing the sale price of hiomes, and reducing the equity from sale.
Lose a job. Miss a payment. Go to 30 percent. File bankruptcy. Judge sells home.
Banks turned on the screws as money dried up to keep up the numbers. As they increased the traps, they helped deflate the housing market and destroy their own base of customers
Just as now mortgages are sold and resold, credit card accounts are now traded by banks. and the accounts of the weakest cardholders are traded down to the most unscupulous banks, with the worst punishment schedules for the victims
As smaller regional banks were eaten up by the mega banks. the banks became detached from the customers and the credit card holder became not a customer but a commodity who had to be cut off at the knees is he did not produce
entagor on October 13, 2008 at 1:22 AM
Agreed, we are headed for tough times, though I don’t think it’s divine retribution. Food for thought–I bet Ahmadinejad thinks god is judging us. That’s more what I’m worried about since that thought will only embolden them–as if Iran needed it.
BryanS on October 13, 2008 at 1:23 AM
You guys want to see the “Obama Kids March held in Seattle today? Or yesterday for you eastcoaster?
Pictures
Video
Gwillie on October 13, 2008 at 1:23 AM
That’s why we shouldn’t have allowed these interdependent bubbles to form in the first place, but since we weren’t responsible enough to do so we are now paying the inevitable price.
But some people are desperately trying to avoid paying the required price and have yet to determine a way out short of blowing more air into bubbles that have already been identified as causing this problem in the first place.
FloatingRock on October 13, 2008 at 1:24 AM
ALLAH just take a minute.
BREATHE.
There, don’t you feel better?
Ugly on October 13, 2008 at 1:42 AM
There is often a price to pay for irresponsible behavior: on a personal level, on a state level, on a global level and someday perhaps, on star-system and interstellar levels. I seriously doubt evolution can negate the necessity of responsible behavior.
That’s why socialism is doomed to failure.
FloatingRock on October 13, 2008 at 1:44 AM
Unless, of course, we can create robots who’ll be responsible for taking care of all our needs. In which case, IT’S TIME TO PAR-TAY!!!
FloatingRock on October 13, 2008 at 1:46 AM
…But then, whoever has the most robots and/or the strongest, fastest, smartest robots, will rule the day and the party will once again come to an end.
We just can’t win.
FloatingRock on October 13, 2008 at 1:48 AM
Why not hire some dozers and arsonists to take care of the empty homes? Too much supply equals falling prices.
flyfisher on October 13, 2008 at 1:56 AM
Shush! Robots are Allah’s fantasy or fear. I’m not sure which, but humping comes to mind.
Kini on October 13, 2008 at 1:56 AM
Reminds me of the Cheech and Chong Up In Smoke Movie where the, ahem, minority affirmative action entitlement type, demands to the welfare worker behinds the glass, “Where’s ma money biotch”.
The Free Market is a 4 letter word to democrats…. to them, free is fowl.
Kini on October 13, 2008 at 2:01 AM
It’d create more jobs, too.
FloatingRock on October 13, 2008 at 2:02 AM
BryanS on October 13, 2008 at 1:02 AM
Again the problem was that home prices went up faster than wages. If you can not allow home prices to fall because of the deflationary death spiral the only alternative is to increase wages.
unseen on October 13, 2008 at 2:04 AM
We can then go burn some witch’s that turn me into a newt!
I got better….
Kini on October 13, 2008 at 2:05 AM
Think of the new construction! And destruction! And Construction.
Sucha vicious cycle
Kini on October 13, 2008 at 2:07 AM
Look, if you payed to much for your home, that’s your problem. If you can’t afford your home, get a better job or a less expensive home. Don’t expect us to pay for it.
FloatingRock on October 13, 2008 at 1:04 AM
Have no idea what you are talking about. No debt, great job sitting on a mound of cash that I started to invest on friday. You were the one moaning that you couldn’t afford a home and wanted prices to fall more. I simply stated that to allow home prices to continue to fall would plunge the entire country and world into another depression. Therefore if you can not afford the home prices today it may be you that needs to get a better job. Why should the entire country go into a depression because you can not afford a house at today’s prices? Doesn’t make sense.
unseen on October 13, 2008 at 2:07 AM
What doesn’t make sense is trading our freedom and liberty for socialist programs intended to re-inflate a demonstrably unsustainable bubble that resulted from irresponsible lending practices.
FloatingRock on October 13, 2008 at 2:17 AM
That’s why we shouldn’t have allowed these interdependent bubbles to form in the first place, but since we weren’t responsible enough to do so we are now paying the inevitable price.
But some people are desperately trying to avoid paying the required price and have yet to determine a way out short of blowing more air into bubbles that have already been identified as causing this problem in the first place.
FloatingRock on October 13, 2008 at 1:24 AM
Capitalism is a series of bubbles and busts. that is capitalism. You can not have capitalism without booms and busts. It is the side effect of capitalism. Capitalism is controlled by fear and greed. It is the greed factor that makes capitalism go up and the fear that causes the busts. Bubbles have been around since the beginning of capitalism. Remember the Tulip bubble. No central banks involved in that. Capitalism requires inflation to work. the ability to borrow short and lend long creates capital which can than be used to expand economies. The profit motive or greed causes people to borrow more and more short and lend more and more long to create more and more inflation which creates more and more capital which is used to expand the economy more and more. It is human nature that at SOME point that impluse gets away from itself and causes EVERYONE to have a come to Jesus moment at the same time which starts the fear motive to kick in and people protect their savings more and more which causes lending to dry up which causes economic activity to contract which causes more people to stop lending which causes busts.
Get it now? You can not have robust capitalism without bubbles and busts. To not have bubbles you need socialism or governmental oversight to control the human impluses of unrestrainted greed. This will cramp economic activity in the short term but in the long it will save you from bubbles and busts. However the more socialism you have the less economic activity you have. Under a 100% socialism economy you have zero growth because the fear and greed motives are no long allowed to function.
unseen on October 13, 2008 at 2:17 AM
Updated
FloatingRock on October 13, 2008 at 2:19 AM
Not sure where I heard this (Limbaugh show?), but suggestion was made from McCain to name (right now) Rudy Guiliani as Atty. General with assignment to fully invesitgate/try/jail those responsible for Fannie/Freddie debacle, and name Mitt Romney as Sec. of Treasury.
electric-rascal on October 13, 2008 at 2:21 AM
Correction:
Bad=made from McCain
Fix=made for McCain
electric-rascal on October 13, 2008 at 2:22 AM
What doesn’t make sense is trading our freedom and liberty for socialist programs intended to re-inflate a demonstrably unsustainable bubble that resulted from irresponsible lending practices.
FloatingRock on October 13, 2008 at 2:17 AM
the problem again was not that housing went up, it was that wages didn’t. As long as housing and wages increase in a direct correlation the bubble can be inflated forever. It is one goes up and the other stays the same or goes down that you have problems as the homes become unaffordable to many people and new ways must be found to afford the home. Thus you have a 30 year home loan iunstead of a 15 year, a ARM instead of a fixed rate, no money down instead of 20% down. Same with cars. Instead of a 3 year loan you get a 5 yr or a 6 yr loan. If car prices continue to go up you will get interest only loans, leases etc. zero % financing. The problem is WAGES.
company profits have become the end all be all in an effort to keep costs down companies (at least major corp) no longer allow wages to increase to keep up with prices. This is due to several factors including outsourcing, illegal immigration, high taxes, lack of pensions, etc.
If companies what to continue to enjoy customers having the ability to afford their products they must increase wages to their employees.
unseen on October 13, 2008 at 2:24 AM
Note on capitalism/”bubbles”:
It doesn’t help capitalism one bit when shenanigans like CRA/Freddie/Fannie are allowed to blossom; it tends to make the bubbles grow faster and larger, and make a larger “bang” when they burst.
It also gives the socialist clowns that caused this mess in the first place to claim that capitalism doesn’t work.
electric-rascal on October 13, 2008 at 2:27 AM
The only thing worse than putting Rudy in charge of the justice department would be Rudy in charge of Alcohol, Tobacco and Firearms.
Actually, I take that back. He can probably do more harm to the 2nd amendment as Attorney General.
FloatingRock on October 13, 2008 at 2:28 AM
I understand that, but the fact remains that the balance wasn’t maintained. So, absent socialism, how do you propose we increase wages significantly faster than home values for a period of time necessary to achieve that balance? And if socialism must necessarily be a part of your plan, then how do you propose, once an equilibrium is reestablished, that it be maintained adequately under a socialism regime?
FloatingRock on October 13, 2008 at 2:32 AM
I cannot disagree with you more strongly. Fear and greed has nothing to do with pure Capitalism in it’s truest sense. It is the application of the human factor that plays to the Fear and Greed.
To which I agree with your hypothesis :
But you and FloatingRock are arguing about semantics.
As a matter of history… we, the United States, are better positioned to weather this storm better than anyone else. We have the ability to change, economically and inventively, more so than any other nation on Earth. Once we recover, the others will also.
What Obama is saying, you make $250,000, I’m gonna tax the sh!t out of you. That’s the first step to socialism and the redistribution of wealth. This is the real fear.
Kini on October 13, 2008 at 2:36 AM
Or continue what they’ve been doing for years. Expand the credit bubble still further to allow people to buy their products, including homes. That’s why they’re trying to preserve the credit bubble while taking desperate measures to place a band-aid on the root problem.
FloatingRock on October 13, 2008 at 2:37 AM
And the reason why we’re more resilient is precisely because we have more economic freedom.
FloatingRock on October 13, 2008 at 2:41 AM
FloatingRock on October 13, 2008 at 2:32 AM
If I knew that I would be King. However there are ways to get some of those results with out massive socialism. One is to secure the border and stop allow indentured servents into the country. Two is to reduce taxes on companies that stay in the USA while increaisng taxes or tarrifs of imports. Three companies could bring employess in as shareholders. The people at google did wellwith their stock options. the avg employee getting paid in wages plus stock options is a good idea that does not require massive socialism.
But at the end of the day it requires CEO’s and other excutives to understand that the bottomline is not the end all be all of their drive. Look at the CEO of Oreck vaccums during Katrina. he continued to pay every employee even when the plant was shut down, he paid for housing, food, shelter etc. He put his employees above the bottomline and he still does well.
This was the idea behind a progressive tax system in the first place. The more you make the more responsibility you have to society. Somehow the pursuit of the bottomline has replaced the drive to build a better county, state, nation.
The believe in a higher good. Thus relgion will play a part in the final solution also.
A person making 400million while his employee works for min wage is a disgrace. How much is too much. That is where gov, relgion, morals etc come in to play.
all i know is that when you allow the gap to widen between the extreme wealthy and the rest of the country bad things happen like depressions, revolutions, revolts, strikes, massive socialism.
Like anything in life there must be guideposts that EVERYONE must follow. Be they rich or poor, white or black, rep or dem. The law must work for everyone.
unseen on October 13, 2008 at 2:47 AM
So companies haven’t increased wages because it will affect their profitability and thus their stock price? In that case, won’t increasing wages put further downward pressure on their stock prices, thus leading us back where we started, only with home values once again rising the the stock market deflating? But if the stock market deflates, aren’t home prices likely to fall as well?
FloatingRock on October 13, 2008 at 2:49 AM
Kini on October 13, 2008 at 2:36 AM
if you take the human factor out of pure communism than that would work flawlessly also. It is the human factor that causes booms and busts in capitalism and it is the human factor that causes communism to not work also.
FloatingRock on October 13, 2008 at 2:37 AM
Yeah but the people can no longer make the min on their credit repayments. Thus you can not continue the lifestyle without increasing people’s ability to buy no matter how much you inflate the bubble of credit. Credit needs to be repayed or it does not create more capital and in fact it destroys capital and leads to deflation. The only way to stop deflation is to increase income or decrease price on goods. deflation will usally decrease prices which is what destroys economic activity. Increasing wages has never been tried in a deflationary environment. A long sustained increase not a $600 one time check. but a 5% raise in income. I wonder what will happen if it was tried.
unseen on October 13, 2008 at 2:55 AM
Spoken like a true Marxist.
We offer the the greatest opportunity to level the playing field.
I don’t live by guideposts. Neither do I want to be dictated by them.
Kini on October 13, 2008 at 2:58 AM
This is called living in one’s means.
Kini on October 13, 2008 at 3:00 AM
FloatingRock on October 13, 2008 at 2:49 AM
possible. however, the increase in income to employees may increase sales at the company which would increase the bottom line. It would impact the margin on sales but it would if all companies did it lead to greater volume of sales. the company could increase or start a div (which the gov should not tax) which would give shareholders a % of the profit. thereby awarding shareholders with the profit of the company. True it would not allow massive day trading on the markets but it would allow company to focus on sales and not just the bottom line.
It would be like Walmart effect. I.e more sales at lower prices instead of like the Tiffany approach of less sales but massive marked up prices.
One reason GM can not sale cars is because they laid off the people that use to buy a new car every year their workers and shipped the jobs to mexico and china. the new workers do not make enough to afford the GM cars. As long as it was just GM doing it the laid off workers could find another job. but if the entire country lays off workers and moves jobs to places like Mexico and China who is left to buy their products at the prices they were selling for before?
If becomes demand destruction and over supply.
unseen on October 13, 2008 at 3:03 AM
That’s what we Capitalist call…. desire.
Kini on October 13, 2008 at 3:04 AM
don’t live by guideposts. Neither do I want to be dictated by them.
Kini on October 13, 2008 at 2:58 AM
So your a law breaker? an outlaw? doing whatever feels right? All societies have guideposts some call them laws, some morals, some customs. But all societies have GUIDEPOSTS.
unseen on October 13, 2008 at 3:05 AM
That’s what we Capitalist call…. desire.
Kini on October 13, 2008 at 3:04 AM
one man’s desire is another’s greed or fear or hatred…
unseen on October 13, 2008 at 3:06 AM
I could get behind most of that, especially numero uno. :)
But none of that is socialism, IMO. I think many would call increasing tariffs protectionism, and although I’ve sometimes thought it might help force certain markets to open if we matched our tariffs to theirs, I don’t know enough to have a strong opinion and have deferred to the status quo.
I agree with that….
…but certainly not with that. I agreed with your point above, yet I’m an atheist, so evidently religion hasn’t anything to do with it.
That’s certainly been true in the past, at least. But on the other hand, wealthy people reinvest much of their wealth, thus creating more jobs and more wealth, for others as well as themselves. Punishing them for that, which has been tried, has been shown to be detrimental to the collective good.
Until recently our standard of living has continued to increase over time. Unless we adopt socialism, it will do so again.
FloatingRock on October 13, 2008 at 3:09 AM
This is called living in one’s means.
Kini on October 13, 2008 at 3:00 AM
and if living in one’s means makes the entire economy go into a death spiral? The entire lower and middle class can live within their means but they are tapped out. which means by them living within their means they will not be able to expand their economic output with new shopping, new eating out, new homes etc. Thus the economy will not expand. thus you either have to decrease their costs or increase their income to achieve economic activity expansion. to reduce their cost will require the entire country to go into a massive recession or a depression. To increase their wages would require some few people to live with less. you make the call.
unseen on October 13, 2008 at 3:11 AM
Anyone heard of Employee Stock Sharing programs?
A company profit sharing program?
Anyone ever quit a job because they were fed up with the lousy wages?
Anyone working for WalMart want to explain to me why? Why when they open a new store the applications go out the door and around the corner?
What about ingenuity? The quality of being cleverly inventive or resourceful; inventiveness.
Isn’t that who we are? Why we came here?
Kini on October 13, 2008 at 3:12 AM
Yes, but a bust under communism leads to the end of the state and a bust under capitalism leads to renewal and growth through adaptation.
FloatingRock on October 13, 2008 at 3:12 AM
It’s simple. Move.
This is precisely why we have a immigration problem.
Let me ask you a question. Why do so many people want to immigrate here if we are such a despicable nation? This is what you are saying, yes? We’re not fair, yes? We need to redistribute the wealth, yes?
Take from those, to give to the less fortunate, yes?
Kini on October 13, 2008 at 3:18 AM
Until recently our standard of living has continued to increase over time. Unless we adopt socialism, it will do so again.
FloatingRock on October 13, 2008 at 3:09 AM
until recently we have not had massive outsoucing and illegal immigration. We were able to be enriched by the wealth that was created within our borders. The new world order has changed that to a large degree IMO.
I don’t want to punish the rich. I do not hate the rich in fact I respect them somewhat. I am just saying that the natural balance in this country has been broken. Like in the 1920’s anti trust should be enforced again. Will the massive wealthy be less wealthy if their golden parachute is $100million instead of $200million? how much is too much. That is where I think relgion must come in or at the very least morals to shame these people. They are like gluttons but instead of food they consume money. the good of society has to be above the bottomline and at some point enough has to be enough.
unseen on October 13, 2008 at 3:18 AM
Tear Down These Walls
Seems someone didn’t learn those lessons FR. Pity.
Kini on October 13, 2008 at 3:21 AM
Well said! Especially since one can guarantee that some self-serving idiot will want to move said posts, to better serve a ’special’ group.
OldEnglish on October 13, 2008 at 3:23 AM
Let’s hypothetically assume that companies do inflate wages. What will happen is home prices will start heading back up and reach vastly higher levels, because the sub-prime lending will resume once again in force. Perhaps not immediately, due to present conditions, but assuming the markets start heading up again, the socialists that run our government will say, “what problem?”. The companies will want to offset their costs for the higher wages by raising prices. The government and corporations, especially those that most directly benefited from the credit-bubble before, will want the whole mess to continue. Real-estate will still be misaligned with wages.
And if the underlying laws and regulations that enabled the credit bubble are discontinued, there will simply be fewer buyers on the market and real estate will continue to deflate, especially, I hope, in areas like where I live where real estate is still near the highs.
FloatingRock on October 13, 2008 at 3:27 AM
The entire world economy is run on one thing. Trust. That is, the trust that people who borrow will pay. Everything else is just details.
The news media has a lot to answer for in this crisis. Starting with the election of GWB in 2000 the Democrats have been screaming that the sky is falling financially. They have been doing their best to undermine the confidence in the U.S. government as well. “It’s the worst economy since the Great Depression!!” they have been screaming at every opportunity.
The news media has been reporting these overblown reports faithfully. In some cases they have misreported good news in order to make the news follow the line.
It looks like they got their recession. The problem is, it is not limited to the evil Republicans and their supporters. It is bringing down the whole house.
As I said at the beginning. The economy of the entire world runs on Trust and the Democrats and news media have done their jobs well. There is no trust in the markets, there is no trust in the government, there is no trust for any institution.
Good job Democrats. And you expect us to trust you, why?
schmuck281 on October 13, 2008 at 3:29 AM
You know that is inevitable.
It is precisely why we have the economic crisis we have now.
Guideposts, were moved.
Kini on October 13, 2008 at 3:29 AM
Kini on October 13, 2008 at 3:18 AM
No….put down the kool-aid and use your mind. Money is power. The more money you have the more power you have. Our Congress is bought off, our president is paid for. Anti trust is a joke. the unions have been weaken and the tarrifs that the consitutions orginally gave the gov the only way to raise revs is sacrificed for free trade. The gov needs rev so instead of tarrifs that companies pay and we pay in higher prices we just cut out the middle man and pay income taxes now. So which is better us paying income taxes or the companies paying tarriffs. The gov must have funds to do its functions. should the gov take form the cotizen or the company. which is wealth redistrubution? Should the companies not pay anything for the right to wrok, trade ans sell in this country? Should the citizens pick up the entire tab?
who should the profits of capitalism go to? The workers or the shareholders. Both have risked something. shareholder risk capital, workers risk time that can never be recovered. Should not both share in the profits. One with higher divs the other with higher wages? Human greed will always cause people to hoard the profits for themselves. Before it was the church that tempered human gred, or governmental laws, or customers like in Japan where the CEO makes no more than x times his lowest paid employee. There is right and their is wrong. gluttony, greed, pride are human sins for a reason they cause societies to fail when those sins are allowed to run agains tthe best interest of the society. that is why there are laws for murder, stealing, rape etc. The law of the jungle does not make a society.
unseen on October 13, 2008 at 3:31 AM
Whatever happened to living on one’s means?
I’ve read living beyond one’s means, but haven’t read about the latter.
If you cannot afford it. Why buy it?
Kini on October 13, 2008 at 3:33 AM
Have you all not seen Obama’s economic package??????
I dont mean to give it all away…. but it involves unicorns, you idiots. UNICORNS!!!!!!!
Chuck Schick on October 13, 2008 at 3:36 AM
FloatingRock on October 13, 2008 at 3:27 AM
yes a sticky problem. but to stop subprime you need regualtions, prices will only go up if the people can afford the home. thus you can regulate the type of loans you can get which would allow wages to go up more homes to be sold but on a surer footing. There are ways to do it. It is not a 100% pure capitalism nor a 100% pure socialism fix. It is a mixture with capitalism being the majority.
just like we have had for the last 200 years.
unseen on October 13, 2008 at 3:38 AM
Good job Democrats. And you expect us to trust you, why?
schmuck281 on October 13, 2008 at 3:29 AM
good point.
unseen on October 13, 2008 at 3:39 AM
I agree with your sentiment. I hate the level of outsourcing that has been occurring. On the other hand, I don’t want to government to dictate that it can’t be done. I don’t even think they could. A company could just move entirely overseas where the cost of business is less. All the government could do is forbid the company from marketing their product in the US, which would be harmful to us, not helpful. The only thing I’ve ever heard that I could get behind is providing companies incentives for keeping jobs in the US and reducing the cost of business here.
On the other hand, I’ve often felt that the ultimate achievement, so to speak, in globalization would be to drive down wages and standards of living to the lowest common denominator. People would have to move from one country to another to find work at lower and lower wages, which would mean the end of homebodies like me. It would also diminish the marketability of goods, but corporations tend to be shortsighted in that respect so would probably jump right into the pit for competitive reasons.
But what can be done aside from incentives and reducing the cost of business? Socialism still isn’t the answer. Freedom requires law and order and markets require a certain level of regulation and bureaucracy, but too much of a good thing and it becomes destructive.
FloatingRock on October 13, 2008 at 3:43 AM
It’s expanded farther than is warranted by sound principles already.
FloatingRock on October 13, 2008 at 3:48 AM
FloatingRock on October 13, 2008 at 3:43 AM
taxes are a good blunt instrument. Lower taxes for those comapnies that remain, higher tarrifs for those that leave. The lower they drive down wages the less people can spend the more credit is needed. It does not end well.
To me it goes back to the old saying. “You need to spend money to make money” companies that invest in their workers will have higher sales.”
the business colleges are not producing good CEO’s they are too shortsighted and care more for the three month numbers than decade long sustained sales and workforce.
the government could also give incentives to companies to provide pensions or 401ks or other things that help society. there is an ever growing pie as long as everyone has a place at the table. when the CEO’s exclude the workers the pie gets smmaller and when the workers exclude the CEO’s and the capital the pie gets smaller. Each needs the other and should respect and treat each outher with respect not trying to get one over on the other. Laws making unions less policital and more focused on the workers rights instead of the union bosses are a good idea also. Laws to allow companies to fire union employee for lack of work but protects workers from firing for age, health etc reasons.
There is a middle way. where both can do well. And both can improve the others life. We have found that middle way many times in our history and I am sure we will find it again.
unseen on October 13, 2008 at 3:52 AM
It’s expanded farther than is warranted by sound principles already.
FloatingRock on October 13, 2008 at 3:48 AM
yes but only because all the parts did not expand at the same time.
unseen on October 13, 2008 at 3:54 AM
Dude, you believe in Global Warming or somptin, yes?
Read your words:
What does that mean? I mean really?
Obviously, the investors. The Share holders. Me. I ponied up my money as a risk, I deserved to the rewarded. Employment need not apply, unless there is a profit sharing plan where everyone gains.
Kool-Aid…. try Merlot.
Kini on October 13, 2008 at 3:54 AM
We got into this mess through an ill advised attempt at social engineering, which I consider a form of socialism. We need to discontinue those attempts. We don’t need to lay more layers of social engineering atop the prior, we need to eliminate them. Then, after addressing the original problem, which led to the greed you’re referring to, we should provide incentives for people to spend their money, large and small, for example by lowering various taxes. Then we wait until this all sifts out, reach a level of equilibrium, and we’ll come roaring back stronger than before. I like some of your other ideas, but at the root, this is all that really needs to be done.
FloatingRock on October 13, 2008 at 4:01 AM
I’ve occasionally toyed with the idea of imposing on companies that outsource tariffs equivalent to the labor costs they save by said outsourcing. It might work as long as the US consumer market remains as powerful as it
iswas. But then, if you don’t impose comparable tariffs on foreign companies that do the same, it would put the US companies at a disadvantage. So now we have a bunch of new tariffs and talk of protectionism and it’s history, so I have serious doubts it would be beneficial in the real world.But I do feel that outsourcing, though beneficial in some regards, also causes harm to America when carried to extreme. If we turn into a nation of 3rd world managers, where will our true strength come from? It would be almost as bad as becoming a nation of lawyers. :)
FloatingRock on October 13, 2008 at 4:11 AM
Kini on October 13, 2008 at 3:54 AM
You just lost the arguement. Thanks for making that clear.
Obviously, the investors. The Share holders. Me. I ponied up my money as a risk, I deserved to the rewarded. Employment need not apply, unless there is a profit sharing plan where everyone gains.
Kool-Aid…. try Merlot.
Kini on October 13, 2008 at 3:54 AM
so your money is at risk. big deal. The workers very lives are at stake sometimes. You think your money is more important than a coal miners life? You think he isn’t risking anyhting everytime he goes under the mountain? So you put up some money and expect all the reward even though you sit at home and take none of the life and death risk? Your money is more important then their lives? You really think that. And if not their lives other workers risk their marriages, their time, their family lives to produce the best product at the cheapest price. Without the workers taking those risks your money would be worthless So Stop the kool-aid please. it’s killing your thinking cells.
when did money become more important risk then someones life?
unseen on October 13, 2008 at 4:13 AM
unseen on October 13, 2008 at 3:52 AM
401K’s are individual retirement accounts not company pension plans. Companies come and go, 401K’s are yours to keep and follow you to different companies.
Government never gives incentives. Government only interferes.
Taxes are never good. Never.
Under the tutelage of whom…. William Ayers?
Somebody needs they’re nightie night time. How about productivity?
Kini on October 13, 2008 at 4:14 AM
FloatingRock on October 13, 2008 at 4:11 AM
the way I see it companies are going to be the big losers with outsourcing. their sales will suffer. So they will lose in the end. short term profit over long term thinking never wins the race. The need to teach the rabbit and turtle in business school I guess. Tax incentives for them to stay would probalby be the best but the WTO will most likely call that something unfair or something ….so in the end the workers become poorer and thus the comapnies that sell them products. It is a table we all either eat or starve together. People fail to understand that
unseen on October 13, 2008 at 4:20 AM
I wouldn’t bet on that!
I agree that artificially propping up home prices is a horrid idea.
angelat0763 on October 13, 2008 at 4:28 AM
When it became more than a Sally Field moment in your response to my comment on personal responsibility.
Coal miners, like all Americans, have a choice. A choice.
unseen, you need to understand where a lot of us come from.
At one time in my life. I had nothing, I slept in cars, I relyed on others for food. Then, I got a job, I saved, I avoided credit cards, I only payed for what I could afford. I now live my dreams.
That’s America. You are too quick to dismiss who and what we are.
Money is life. Money is not God, Money is part of the pursuit of happiness. Success is not measured in money, but is part of life and liberty and it’s pursuit.
Sure, I wish I could make the millions that corporate executives make, but I don’t want to live in a 3000 sq foot house, because I would not want to clean it.
Your life is your responsibility. Not the govmints. Capish?
Kini on October 13, 2008 at 4:34 AM
Kini on October 13, 2008 at 4:14 AM
with every post you become more of an kool-aid drinker.
You want to highlight every wrong key stroke go right ahead I will tell you there will be plenty. those that pick out the little mistakes of others usally have surrendered the main arguement.
401k are government created accounts for the workers. They derive their name from the tax code that created them. The gov could offer incentives for comanies to match more of the 401k or place a set amount in the workers account. They are many ways to increase companies willingness to help their employees.
As far as taxes. without taxes you have no government, no law, no order. I think taxes are needed for the common good. They should be kept small but some taxes are needed to fund the governmental functions that creat a society. Your kool-aid view of taxes again paints you as an extreme individual that can not think for himself.
What part of lack of work don’t you get. Lack of work means no productivity. Please stop posting before you embarass yourself more. your arguements are childish kneejerk responses that add nothing to the converstaion and actually give capitalists a bad name. I am actually an investor and stock trader I understand risking capital. I also am a consumer, citizen, and worker and understand the other side of the coin. You seem like you have no idea about supply, demand, price points, cost of doing business, lack of historic prospective on America over the last 300 odd years. the mix that America has had with socialism and capitalism. What did they teach you in school? you want to live by the law of the jungle fine. But that is not a way to form a society of any lasting result. The consitution created guideposts. The government is for, by and of the people. that includes the workers, the CEO’s and the shareholders. All must partake of the feast or none will.
unseen on October 13, 2008 at 4:35 AM
Kini on October 13, 2008 at 4:34 AM
you have no idea where I come from. you think I did not live in cars at times in my life, I too lost everything, I too started over. I am now very well off, I have everything I want, I give to charity, I invest, I work, I have no debt, I live within my means. And nothing I have would have been possible if not for the this great country. This great country could not be if not for the government formed by the consitution. It is an experiment in the world and in history and it is in danger because of unrestranied greed. I understand my capital is just as important as a workers time. Without the worker my invest goes to zero. A bad worker can change a money making investment into a money loser. I respect the workers enough to understand they and not just cogs in the wheeel but are the foundation for my profit. Of course if the worker does a great job I expect the company I am investing in to reward that worker. Not make him poor so he changes jobs. I would rather my comapny that I invest in pay the CEO a lot less and the workers a lot more. the CEO does nothing without a good base of workers. It is the workers that determine if the company makes a profit, a good product, under budget not the CEO. The CEo sets the big picture. It is the rest of the workers that fullfill that picture. Porductivity in Mexico is 30% less than it is here. I expect my company I invest in to pay Americian more because they are better workers. I expect those workers to buy the companies products with their income therby increasing my return on my investment.
Sam Walton would be ashamed what Walmart as become under the new CEO’s. We need more Sam Walton and Warrne Buffets and less Charlie Princes..
unseen on October 13, 2008 at 4:48 AM
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