The GOP is showing its true colors by rebelling against the “Cash for Clunkers” deal- they only back initiatives that can roll kickbacks their way. The program has proven to be the fastest stimulus to the economy so far, propelling Ford stock up to over $8 a share (It was at $1.58 less than 6 months ago) and generating sales for dealers, confidence by consumers and rebooting an industry that the public now owns two of the three American players. Not only that, we’re eliminating old gas guzzlers from the roads- decreasing our dependence on foreign oil.
I’ve yet to see one construction/infra-structure project have as much impact on the general public in as short a time.
Sure, we’re giving tax dollars back to people who may not need it- but how is this any different than George Bush’s tiny $250 refund checks? What kind of impact did that generate? Since Congress is terrified to tell the banks to cut credit card rates, cap fees or restructure mortgages with one fell swoop- this is the first thing that has actually restarted assembly lines and saved jobs. Michigan and Ohio, two states that have been hammered by the automotive industry woes are rejoicing as dealers start to restock their lots.
So, why does the GOP hate this program so much? Unlike the bonuses still handed out on Wall Street for bailed out firms, no one who is getting $4,500 off a new car is going to turn around and write a check for $2,200 to their congressman. The people’s lobby isn’t what counts anymore. Voters are just pawns in the big game of campaign finance- they don’t count – except at the ballot box.
Of all the stimulus plans so far, this is the one worth keeping. It might not hurt to include motorcycles and scooters in the deal too- trade in a heap that gets less than 18mpg and get $1000 to the purchase of anything that gets over 40 mpg. In the end, anything we can do to cut our dependence on foreign oil will have much longer and more beneficial impact on the economy.
They believe they can score points by appealing to knuckle-draggers.
I’m guessing someone has a motorcycle or scooter that wants to get in on this deal but can’t.
I’ve got a scooter and a motorcycle and a car. I’d like to see more people replace the second car with something more efficient.
It’s my goal to have antique vehicle plates on every vehicle.
Well Drexel Dave, I see you are long on the invective and short on the details. One need not be Neanderthal nor Republican to see the folly of this cash for trash exchange. Being from Drexel you must have noticed the leading industry in that exurb is used car parts. The Old Bandito’s shadow frequented Buster Blackford’s used parts emporium back in the day when cash was short and the Pinto was ailing. And the cash for clunkers program requires the clunkers be rendered immediately immobile. The Old Bandito suspects there will be an immediate black market in popular used parts (you don’t really expect the dealers to crush such valuable parts as alternators or engines, doya?) at best, or at worst create an immediate increase in the price of said parts. Poor folk (you know, the folk this blog continually obsesses over) will be even poorer. Furthermore, the cars on the trade in eligibility list is very limited, and the cars the government is steering consumers to make not fit their needs. Nobody makes anyone purchase an SUV, they are the chose consumers made when government fuel standards redered the ever popular station wagon illegal. And in case anyone hasn’t noticed, there are considerably fewer dealerships with which to deal with, and the plan is so elastic that what qualifies today will not qualify tomorrow. And why should the government take money from taxpayer A and give it to taxpayer B to buy a car? Here’s a cash for clunkers deal we can all live with; get the government out our pockets, and give folks the money and the freedom to purchase the cars they want and can afford; be it a Mini-Cooper or a Porsche Carrera. Ok Drexel Dave, you’ve replaced discourse with insult without giving one reason that this is a good idea. Convince us……………
IB the only part that is not reusable is the engine. The dealer has to pour some type of sand mixture into the oil and rev the engine until it blows. All the accessory parts of the engine and the rest of the car (fenders, doors interior, etc) can be resold in pieces but not as a whole. One interesting fact is if the dealer gets more than x dollars for the clunker from the scrap yard they are supposed to rebate that excess (I think the gvt is supposed to get it).
There was an interesting chart on TV over the weekend showing the differenc in stimulus payback dollar by dollar for each stimulus initiative. This clunker program had one of the highest reutrns.
This is hardly a stimulus program. There are no long-term jobs being created here, which means it’s exactly like the Bush rebate, but wait, there’s more, we are now putting people into debt. Nice. And, the extra money for the extension is coming from a place that could actually create excellent jobs for the future- renewable energy loan guarantee program.
Wouldn’t it be better to promote bicycling? Or public transport? Or carpooling? Less sprawl? If you really want to do something for the environment, why trade a car for a car and in the process render one car useless? And also in the process take money from people who are truly working to create energy alternatives to oil?
It’s a feel good program that sounds nice, makes a few folks (read: voters) feel all warm and fuzzy towards the government, but has minimal longterm benefits. IOW, our money (and it is OUR money) would be better spent elsewhere.
This is not a socialist program. It is a capitalist program that benefits auto manufacturers and dealers.
Wouldn’t it be better to promote … public transport?
Now that would have been a revolutionary idea — give the money to local public transportation systems around the country on the condition that they eliminate fares for the duration they’re using the money.
It is a welfare program. Just like we do for individuals.
The big difference is that this welfare program is going to an industry that has provided jobs and been a huge part of our economy and success. They deserve welfare for a little while unlike the individual losers we give it to on a daily basis.
It is not, nor is was it really ever meant to be, a long term thing. It is just to get a little cash flowing. I don’t think anyone with a half a brain thought it was a long term thing. Yes, they are pissing away money. They piss away money all the GD time. They are the government, they can’t help themselves. It is like being addicted to drugs, they are addicted to bullshit and wasting money.
Promoting bicycles and public transportation would be a waste of time and money. People love their cars. The difference between a demo-rat and republi-can’t is that a demo-rat wants everyone else except himself to give up their car while a republi-can’t only wants tree hugging losers to give up their cars. It is easy to get on the GREEN wave, but I don’t see anyone from any party giving up anything, it is always someone else’s job to sacrifice. YOU ALL KNOW THIS IS TRUE.
How about we get BIG BOY and change they way we do government. We collectively pound our fist regarding our constitution. But we need to collectively look in the mirror and recognize that our system does not work well anymore, it has failed. The Old Men could never have predicted our greed and our so-called “need” for all the bullshit in our lives. That needs to change – our government and priorities need to change. Not everything is meant to be a handout and not every dollar is meant to be taxed.
>This is not a socialist program. It is a capitalist program that benefits auto manufacturers and dealers.
Last I checked, we owned significant shares of GM and Chrysler. So we are taking taxpayer’s money to subsidize government owned companies. That sounds remarkably like socialism to me.
But what do I know?
it is a welfare thing, which is socialism. But this “welfare” is benefiting businesses not owned or subsidized by the government. So it ain’t pure socialism.
Just another government bs idea – but at least it is popular unlike so many other ideas
it is different from GWB $250 – that money was my money to begin with. This is also my money, if I chose to get a new car, but I have to spend a lot of money (buying a car) to get my money back from the crooked government.
I actually like this program. But it is way different in so many ways than the GWB $250.
GWB refund did not help, but who cares about that, it was the citizens money to begin with. When did the government become entitled to my money, or your money?
Of note- I read over the weekend that 50% of the trades for this program- the deals were cash deals.
Yet another indication of the transfer of wealth from the poor to the wealthy.
I’m still not against this program as an emergency smoke and mirrors trick- it’s boosting the idea that we are doing better- better than anything else. However, once again, is it doing as much as forcing credit card rates down- or the mortgage rates could have? Or by restructuring Wall Street back from a Casino into a regulated market?No.
? ? ?
Transfer of wealth from the poor to the wealthy ?
IF THEY ARE POOR THEY HAVE NO WEALTH.
Stop defending poor people. Most of them are losers who are lazy and love to suck the system dry. We all know it.
You know the poor of America……… flat screen tvs, cell phones, eating fast food all the time, most have cars, you know, POOR people.
Most of them are losers who are lazy and love to suck the system dry.
I try to imagine Jesus saying something like this, and I just can’t.
Truth hurts.
The fact is most (85-90%) of the poor know it is their fault for being poor. They know they are lazy and unproductive. Hell, I am somewhat lazy and unproductive. Nothing wrong with it, just happens to be fact.
Yes, most of them are losers. They lost when they gave up.
WWJD? Well, let me tell you, he would not put up with the criminal element. The poor he helped did not spend their money on tvs, cell phones, cable tv, fast food, over priced clothes, etc. The poor he helped were……… poor. Hungry. Not money sucking leaches who spend money on tattoos and cigarettes before spending it on their kids. David Lauri, these are two different types of poor here. You know it, I know it, we all know it. Quit defending the losers. They f*ck themselves.
Dear Dave, I have not commented on your site before, but I found you through Dayton OS and have some input on this particular topic. I called Mike Turner’s office to let him know I was very disappointed with his support of this bill. I read all the comments and there seems to be some misunderstandings afoot. Lets review this bill in some formats of thought. (Ice Bandit does a pretty good job above). First we need a name, but this label is either Mercantilism or Fascism. Wheras Mercantilism, the dealers own the property, but through their pressure they get the government body to refund their products specifically. Every dollar that is then spent on cars is a dollar not spent elsewhere in the economy. Through means of mercantilism a very select group (auto industry) profits on the backs of the rest of society. Now, we can also call this program fascism if we feel the pressure is the other direction. Since the government has such a large stake in the industry, governmental control of the means of production creating a method to line their pockets would be fascist. My point is understand that this is not Capitalism, that this is forms of socialism. That once you begin deviating from capitalism, opportunities for corruption begin to widen exponentially. Gene, I think our founding fathers covered this in the constitution, we simply have distorted it beyond any semblance. Philosophically: If you think cash for clunkers, then you think it is ok to take from one person arbitrarily and give to another? Once the power is given, the amount is arbitrary. Why not 20 billion for this program? Why not 80 billion? The government should not have the authority to give $1.00. It is not theirs to give. It is mine, it is yours. Economically: For every dollar that is spent on cars, that is dollar removed from another sector of the economy. So while our selected group of the day favors, everyone else silently suffers (like auto parts). Not only that but it creates false signals about the demand in the… Read more »
Dave,
I also wanted to respond to your comment:
“I’m still not against this program as an emergency smoke and mirrors trick- it’s boosting the idea that we are doing better- better than anything else. However, once again, is it doing as much as forcing credit card rates down- or the mortgage rates could have? Or by restructuring Wall Street back from a Casino into a regulated market?No.”
Do you realize the negation of individual liberty in your comments? Again, the economics: Artificially low interest rates caused the majority of the problem. To have the government do more mandated restriction on market rates creates a distorted market of which will boom and bust again. It also negates the individual liberty of all lenders and savers to contract with their property in mutually agreeable terms as they see fit.
Furthermore it is a perfect example of bad government creating a problem in which more government is then necessary to fix the problem. Since you seemed concerned about the poor, interest is a measure of risk. If you artificially lower interest to 4%, then what you are equivocally saying is that everyone is the same risk. It works basically like this, no one wants to loan money to poor people unless their reward is high, because what good is it to make 4% on something you may never get paid on? So what you would see by artificially playing with market rates is the entire sector of the populace that represented risk above 4% would either get twisted with fees to make up for it, or they would simply not get loans. Not getting loans deprives the lender and the borrower from individual liberty and greatly reduces the amount of services even made available to poor people. These kind of ideas, while heartfelt, will reduce services and opportunities to the poor.
Capitalists get a really bad wrap when it comes to the poor and is unfortunate, since they are the most likely to service their economical needs.
PS: I used Google chrome for the first post and it did not format correctly. Sorry for the wall of text. Explorer looks much nicer in the 2nd post.
@Robert-
Welcome. Thanks for your input. Your points are right on. However, our government spends lots of money in funky places for the “common good” that really aren’t for the common good.
We’re not going to address the real problems of campaign finance, deregulation, the casinoization of Wall Street, or the costs of lobbyists- what we had was a tactical feel good move that has done more to restore confidence by those who play with our money supply.
For that- it works. From a reasoned position- it’s pure and utter BS. We need less people driving in this country- and more people walking. That would be real progress.
Thanks for stepping in- hope to see you back. And, interesting that Google Chrome messes up- I’m a big Firefox fan still.
Thanks
Dave, You seem to be acting in a capacity in which you would like to avail yourself of a public office. You are accepting donations and have a very fine site in which to present yourself. You have a large D, by your name, so I assume you would take a democrat platform. So my question to you is a direct one. When you open with: “The GOP is showing its true colors by rebelling against the “Cash for Clunkers” deal- they only back initiatives that can roll kickbacks their way.” I think that I laid out very rational and economic reasons why someone would vote against this bill. Do you still stand by your statement of the GOP? I guess I dont understand why in an opportunity to civilly discuss the impact of a particular bill, the opening was of an accusatory tone. Your response is a little unclear. Did you mean to state the Bill is utter BS, but at least it is a feel good move? If this is your stance is the GOP still a bunch of theives for voting against it? I did not expect to get off topic with addressing other issues. As that post is outside the narrative of this response, but not wholly unrelated. For if one can begin to understand the economic impact of this type of bill, if one can define their underlying philosophical selves from this type of event, then this same structure of argument applies to so many other bills. So what is your philosophical defining point? Do you find yourself believing that it is ok to take from one person and give to another? If so, do you base this power on election, meaning that Majority could always vote themselves profit at the expense of the minority. Do you define “common” or does someone else define it? How much are you allowed to take? When are you allowed to take it? What products do people have rights too? Do you see the # of purely arbritary elements that you have to concede and negotiate if you find… Read more »
@Robert
The GOP isn’t acting rationally in any of this. They are voting against Obama- and turning the economy around- wanting to make sure the economy remains a mess.
Neither party is addressing the real issues. The GOP is also against health insurance reform- something that needs to happen.
I don’t believe in wealth redistribution- but, when it comes down to shared responsibilities- unfortunately, the auto industry is one of the fulcrums in our economy. When it fails- the whole thing goes topsy turvey.
It is ok to take from one to give to another- if it is for the benefit of all. Spreading risk is a good thing. This program, isn’t quite the panacea it’s made out to be for many reasons- but, if it rebuilds confidence in our economy- every penny is worth it. More so than economic development incentives that move jobs from Ohio to Ga for instance.
That removing fuel inefficient cars from the market raises the price of remaining used cars beyond what poor people can pay is not a very good reason for not removing any fuel inefficient cars. Nor is the fact that cash for clunkers doesn’t benefit poor people who can’t afford to buy new cars a very good reason either. Instead these are both reasons for working to make public transportation viable for poor working people.
Of course enabling middle and upper class people to buy new cars is much more popular than helping poor working class people get to work via affordable (free?) public transportation covering the areas where they live and work.
How can you redistribute something that was never distributed in the first place? When I was born I never was distributed wealth, nor has it been distributed to me since. No, I earned my wealth, like the other 99.97% of the people in this country. Yes, people inherit things. But people should decide who get their money, not the government taking it from them. I have a big problem with the government taking something they already taxed.
It is ok to take from one to give to another? Well then, send me your money. With the money you send me, we will say $500, I will buy food for the shelter. Fair? Oh, that is right, your examples never includes you. You just want to take other peoples wealth and leave your wealth alone.
When did taking from one and giving to another become “spreading risk.”?
I said I like this “program” bc they are going to keep spending money anyway. At least regular people get to participate this time. I never support our government wasting money, but when they waste it (like now) I like some waste more than other waste, if you will. In a perfect world they would never mis-spend a penny. But since they spend like liberals I sift through all the bs and kinda like this program, compared to other programs.
Wow. I had no idea my comment about this being a capitalist program would spawn such a discussion. Vigh notes this is not fascism. Fortunately this program is not even close. Sure the US has some 60% of the stock in GM and an 8% share of Chrysler but gains nothing from clunker trade-ins at Ford, Toyota, Honda, Lexus, etc etc. If this had been anything close to a fascist move it would have only included the first two companies. And Vigh substantiates my claim with a long explanation of how this will cause auto prices to increase. That sure appeals to capitalists in my book. And thanks also to Gene for calling this what it is, welfare for businesses. This is not socialism. This is not fascism. It is an attempt to fuel capitalism in two big sectors of our economy – automotive and banking. It will create jobs as all these companies strive to meet their newfound demand. It will create spending on supplies and new spending by the employees in retail and the service sectors, which should create additional jobs. Alone it will not cure the economic recession the world is experiencing but in context, with the multitude of other initiatives, it will play a role. Will it be enough, should more be spent? No one knows for sure but dollar for dollar it does a whole lot more than distributing the money back to every taxpayer. Capitalist and socialist governments redistribute tax revenues all the time. How it is used and how much is distributed is the fine line of balance that is controlled by popular vote of our representatives. Some will decry any redistribution. To them I say give up your social security and Medicare, pay a toll every time you use a road, and employ your own police and fire service to protect your property. The greatest thing about all this in America is that we are each free to openly discuss and criticize these policies. Try that under a fascist or communist system. I also agree we should do more to promote public… Read more »
>It is ok to take from one to give to another
Chilling.
Coercion is coercion, David. You recently blogged about someone stealing from you. If the thieves who stole from you were simply hungry, I suppose it’s all okay now? When you begin to justify your use of force, then we must justify all force. It’s not okay to participate in coercion.
So, Teri, are you advocating that participation in the funding of publicly-funded services such as police and fire protection and public roads should be purely voluntary? In other words, would it be okay for people simply to opt out of paying taxes?
If not, isn’t forcing people to pay taxes coercion?
If so, could you give us a sketch of how such a society without any coercion whatsoever would function?
Dear David Esrati, How can you claim the GOP is acting irrational when you stated my points were right on. My points were rational reasons not to vote for the bill. By contrast, you then feel you are rational when you say: “It is ok to take from one to give to another- if it is for the benefit of all.” Translation: “From each according to his ability, to each according to his need” -Karl Marx I could get into philosophical diatribe about the negative effects this has, but I should not have to as their is several historical examples that shows this to be a really terrible idea. Dear David Lauri, It is an effect of the bill. The other reasons are more potent in my opinion, but it is an example of the governments intervention excluding the poorest population. Dear Bruce Kettelle, This is definitely Mercanitilism. It is a sector of the economy profiting on their products, not through their performance in the market, but through performance in the political arena. I think you may have missed the point that every dollar spent here will result in a dollar not being spent at the auto parts store, grocery, electronics store etc. That any new job creation here will be offset by no new job creation where the consumers demand truly resides. If this program was done long enough and with enough money, we would create a “bubble” in the industry, just like we did in housing. You may want to review your comment about not giving money back to its earners. Follow that logic and see where it leads……..100% tax rate? I would gladly give up my social security, medicare and fire department if I had that option. However the majority voted my individual liberty right out the window. I can make a good argument for private roads as well. The police, I feel that is the public interest. That everyone needs to share in the ownership of the rule of law. Dear Gene and Teri, I agree. Except with Gene on the acceptance of the lessor of… Read more »
Dear David Lauri,
Forcing people to pay taxes, by definition is coercion. Not to get to far off the original topic, but yes, fire protection and roads could easily be private. There is a sound arguments for making police private. However, I disagree with those at this time. Those arguments are anarcho-capitalist. I am simply a constitutional capitalist.
Government gets the Military, Police, Courthouses. What else do they need?
[B]y having a government subsidized transit system, we eliminate any possibility of a viable private system emerging.
ROFL @ the idea of a viable privately-owned and run mass transit system. Sorry — no, actually, I’m not sorry — but anyone who thinks such a thing is possible is just crazy.
Here are a couple of fun tidbits to get people who are worried about government coercion even more riled up:
http://www.nytimes.com/2009/08/11/opinion/11tue3.html
http://www.lohud.com/apps/pbcs.dll/article?AID=/20090811/OPINION/908110318
Hi David L-
>So, Teri, are you advocating that participation in the funding of publicly-funded services such as police and fire protection and public roads should be purely voluntary? In other words, would it be okay for people simply to opt out of paying taxes?
Nope, I’m not advocating any of that.
>isn’t forcing people to pay taxes coercion?
Yes.
If so, could you give us a sketch of how such a society without any coercion whatsoever would function?
This was just answered by Robert, quite nicely btw, but has been answered on another post too, if memory serves?
So much for “When you begin to justify your use of force, then we must justify all force. It’s not okay to participate in coercion” then, huh? You’re okay with coercing people to pay taxes, therefore you’re okay with any coercion? Or you don’t mean what you say when you say it?
>You’re okay with coercing people to pay taxes
Did I say that?
When a transaction affects more than just the buyer and seller sometimes it makes sense to look at the broader benefits and economics. In the case of mass transit the guy spending $2 to get to work on a bus appears to be the only one subsidized by government. But is he the only person that benefits? No way. The guy driving his car to work benefits because now there are fewer cars on the road, less congestion, less pollution, and fewer dollars spent on new road construction and maintenance. The employers benefit since they don’t have to pay a higher wage to attract auto commuters and parking expenses. So how do you spread out the benefits of this $2 transaction. That to me apears to be the ideal role of government.
Government’s role has changed dramatically since 1776 as the country’s population density has increased and the original farm based economy has been replaced by the effects of the industrial revolution that reshaped the world. I couldn’t imagine how we would be dealing with monopolistc capitalism without government controls and social programs. These spinoff economic effects are everywhere, not just in transportation issues.
The magic is in how we balance the two.
Bruce, You bring up a nice point. However, I think it may work in favor of getting rid of public transportation and all other programs similar to “spreading the benefit” out. For example, lets get rid of public transportation. Now jobs that want low wage earners move closer to the poorer populace, infrastructure begins to build in those neighborhoods. More congestion means higher # of cars on the road and possibly higher gas prices. This increases the cost to everyone that does not use public transit. This restores the direct relationship to paying for what you use. As those prices creep up, there will become a greater profit motive for someone to privately develop a transit system. The market equalizes and everyone pays for exactly what they use without government mis-allocation. This increases wealth and quality of life to the populace and maintains individual liberty for everyone. Capitalism becomes monopolistic on occassions. If you look at examples through history, (Boat Faires, trains, oil) there were monopolies that developed because there was someone that knew how to perform in each of those industries so well that they bought everyone else. When the government decided to break them up, costs increased to the consumer dramatically. Monopolies are not bad, they are still balanced by market forces. Let me explain, cause this is a good key component of capitalism. Say you are a monopoly on Candy Bars (arbitrary, just for fun). You have one hundred percent market share. You attained 100% Market share by offering the best prices and best candy bar to the market and bought all your competitors who were selling candy bars at 120% of the price. You are so good at making candy bars, no one can even figure out how to make candy bars at your price so they dont try. OK, we have our monopoly and consumers benefitted through the entire process. Now what? Lets raise the price, we are the only candy bar makers. So were do you raise it too? 150% of the price? Well, now you just signaled to investors a huge profit margin… Read more »
Sorry, I used Google chrome again. I am not trying to make you go blind I swear!
>>You’re okay with coercing people to pay taxes
> Did I say that?
I asked you, “So, Teri, are you advocating that participation in the funding of publicly-funded services such as police and fire protection and public roads should be purely voluntary? In other words, would it be okay for people simply to opt out of paying taxes?”
You said, “Nope, I’m not advocating any of that.”
If you’re not advocating that people be allowed to opt out of paying taxes, then you’re okay with coercing people to pay taxes. Or at least you grudgingly accept that people be coerced into paying their taxes since the alternative would be that people be allowed to opt out of paying taxes, which you said you weren’t advocating. In which case, your statement that “[i]t’s not okay to participate in coercion” isn’t something you meant.
Or, when you said, “Nope, I’m not advocating any of that,” you didn’t mean that.
I’m really not trying to trap you; I’m just trying to make sense of what you say.
>If you’re not advocating that people be allowed to opt out of paying taxes, then you’re okay with coercing people to pay taxes.
I see the confusion. Let me try to elucidate.
Under the current system, no, I don’t advocate breaking laws, (opting out of paying taxes) even though yes, the laws are coercive. Make sense? However, I do advocate changes in order to create a system that is non-coercive. Who doesn’t? As it stands now, we are all both coercive and coerced. Who wants to live like that? But that’s off point.
Back to the subject: Does this clarify my position on C4C?
Vigh said “The world has the best natural tendency to balance itself,”
That is exactly what would happen in a utopian capitalist system. Unfortunately it just doesn’t tend to work out that way. Greed amongst the capitalist elite have shown time and time again they will not care for their employees, customers, and countries.
A recent example is the mortgage industry meltdown. After the great depression new market rules required equity traders to carry their liabilities more transparently on their balance sheets. Gradually as the economy improved and time went by the capitalists asked for more modern rules that diluted those post depression requirements. Legislators eventually succumbed to these sirens and gave their “conservative” supporters the changes they desired.
Out of that came new tools (derivatives, swaps, and predatory loans) that only benefited the captains of the economy and their shareholders leading to another bubble that impacted all of us. It cost good people their homes, their jobs, decimated most every American’s retirement savings and strained government services.
As the father of modern economics Adam Smith points out in his 1776 treatise ‘Wealth of Nations’ that capitalism cannot be left unrestrained and requires government intervention especially to look out for the well being of the lower classes.
On getting rid of public transportation – Even in the face of high commute times during the 70’s, 80’s, and 90’s suburban sprawl continued. Facing 2 hour commutes, workers did not flock to city living. Removing public transit will not encourage urban growth.
>Out of that came new tools (derivatives, swaps, and predatory loans) that only benefited the captains of the economy and their shareholders leading to another bubble that impacted all of us. It cost good people their homes, their jobs, decimated most every American’s retirement savings and strained government services.
But wait! There’s more.
It wasn’t all predatory from the mortgage/ real estate side, it was predatory from the government too. You forgot about pressure from organizations/ government to create mortgage products- incentives- that allowed people to willfullly get a loan. Legislators gave in to the siren call to offer the ‘dream’ of home-ownership to voters, some of them who had no business getting a loan, putting people into homes who have no business owning a home. And while it’s hugely unpopular to say this, the truth is that for many buyers it was predatory from their side as they bought property for investment purposes and shopped loan products until someone told them what they wanted to hear.
Which should cause at least some concern about C4C.
Yes you are right a few probably were given loans that should not have qualified. However the broader problem that is still emerging were the not as educated but qualified buyers that were told they could only qualify for these “new products” which contained exhobitantly escalting rate adjustments some as frequent as every six months.
Breaking News
U.S. Enters Recovery as Stimulus Refutes Skeptics, Survey Shows
By Shobhana Chandra and Kristy Scheuble
Aug. 12 (Bloomberg) — Recovery from the worst recession since the 1930s has begun as President Barack Obama’s fiscal stimulus — derided as insufficient and budget-busting months ago — takes effect, a survey of economists indicated.
The economy will expand 2 percent or more in four straight quarters through June, the first such streak in more than four years, according to the median of 53 forecasts in the monthly Bloomberg News survey. Analysts lifted their estimate for the third quarter by 1.2 percentage points compared with July, the biggest such boost in surveys dating from May 2003.
“We’ve averted the worst, and there are clear signs the stimulus is working,” said Kenneth Goldstein, an economist at the Conference Board in New York.
Teri, Good answer. Bruce, I would ask you to examine the role of Fannie Mae and Freddie Mac. This are tax payer funded mortgage institutions that through political desire set rates unbelieveably low and purchased mortgage packages from other banks. The Federal Reserve through means of political arena kept the mortgage rates way below market value. To blame the current crises on Capitalism is a fundamental misunderstanding of capitalism. Furthermore, the government allowed all the top dogs to profit through interference. They then interfered with stimulus so the top dogs could profit even more! Capitalism takes the blame instead of socialism and we continue to let the corruption continue. You cannot create a socialist spine to support all the corruption and then blame it on capitalist greed! We are getting to good points in the conversation, as I believe our current political system should be taking the painful steps towards restoring everything to their market values. Government interference, continues to serve as justification for more government interference. They keep creating a problem that they proclaim only they can solve. The opportunity for corruption with the public money far exceeds those opportunities that would be born of capitalism. Frankly, the mortgage crises would not have occured without government directing us that way for years. I have not read the “wealth of nations”. As for that particular line of his book, I simply disagree. There are plenty of cases which speak to the contrary. Bruce, I would argue that in our lifetime we have not witnessed real capitalism. We dilute it more and more every year. C4C is a good easy topic that alot of people can understand and participate in. I think this is why I took so much interest in writing about it. Because the same philosophic and economic principles apply to healthcare and other facets of our society. Once one believes it is ok take labor from one person to help another with a car, then that same person will pretty much be ok with taking anything from anyone to give to whom they see fit. Especially healthcare. This… Read more »
Bruce,
I do not put much stock in the average economist. I hope that they are correct, but the economic arguments thus far are not undone by the success or failure of the stimulus package. The true recovery in my opinion is that Americans savings rate went from -1. something to over 5%. True recovery is based on savings, not spendings. So, the American working person pulled through again for its country and is them that we should thank. Not the politicians that try to deride us. Furthermore, we may recover now, but at what cost? I am not looking forward to the value of the dollar when the money supply almost doubles in a years time. I also have to ask, where is the next bubble, as one cannot displace this much money without creating another “bubble”.
I think it might also be political in nature. President Obama needs all the praise he can get in the month of August to try and sell his Socialized Medicine bill. What does that even say, that some people surveyed think we will grow? I am not sure a speculative survey even has any place in the well thought thread we have going.
>were the not as educated but qualified buyers that were told they could only qualify for these “new products” which contained exhobitantly escalting rate adjustments some as frequent as every six months.
These products were created as a counter to double-digit interest rates, which prohibited many buyers from owning homes. Remember? There was pressure from everywhere- interest groups, government, home builders, the RE industry, and oh yes, consumers themselves, to adjust the requirements of home ownership to allow as many people as possible to participate. We were all willing participants in this, and there were very few people screaming about being the hapless victims of a booming economy…
Bueller?… Bueller?
Anyway.
>Recovery … has begun
Ah. Well. Nevermind then.
And while I agree with some of what Robert says-
I also agree with what Bruce says- and his quote from Adam Smith.
Here is the crux of it: there have to be penalties for those who screw people. You lose billions of dollars- and get a pension and a golden parachute. You steal meat from the grocery store- you go to jail. That isn’t a fair system.
Our economy is built on trust. There is no gold backing the greenback. Therefore, if you can’t trust that justice will be done- you can’t trust that the dollar is still good- the whole thing fails.
Unfortunately- we’re all looking at the trees- while the forest is in dire straights.
Health care is broken. It’s time to set it straight.
Wall Street has transformed into a Casino- it needs to be closed and reopened as a rational financial market.
Our infrastructure was built on the premise of cheap oil- that’s unrealistic now, we need to rebuild it.
Our education system is also failing- it needs a fresh approach.
To bear the mantle of the greatest nation in the world- we need to come in first in quality of life, opportunity for all, and productivity, innovation etc. Right now- we’re not winning- but posing as a winner.
‘enuf said.
Robert,
You are wearing me out but not wearing me down. (I do have to attend to some of my own capitalistic pursuits.)
I understand your points. I stand by mine.
The country will prosper more efficiently with a good balance. Unfortunately human nature will make a perfect balance unlikely. So we are stuck with an evolving set of balances that tend to swing back and forth. We should strive to keep those swings as small as possible. As capitalism finds ways to exploit labor socialism will sometimes overreact and vice versa. Our nations founders were careful to create a system that would not fall back into the european feudal systems they escaped. We have taxation ‘with representation.’ It works and those in power do not hold office very long when excessive imbalance occurs. It is not clear yet if this administration has or is creating too much imbalance, history will tell that story soon enough.
Thank you everyone for pitching in, it has been enjoyable and I do enjoy civil discourse. However, it appears we have reached the point where we simply disagree. It is fun to boil it down and find the realizations as to why we disagree. It is my own misfortune that I am subject to the loss of my liberty and labor at the votes of others. While those I disagree with never have such opposition from me.
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
The preamble. My posterity will be born into 15.3% soc and medicare. 25% federal, 7% state 2% city, 7.5% sales tax, 2% property tax, energy tax, etc. Possible limited choices in healthcare and will not be able to contract their private property with a mutually agreeable other. They will start their lives with a mountain of debt burdening their country. My posterity I can no longer amptly explain they are born with the blessings of liberty.
It has been a pleasure. If anyone wants my input on a thread or wants to further a discussion on any topics, I would be more than happy as I have enjoyed everyone’s input. [email protected] —I dont want to continue to wear out this thread (I have to work too!)
David Esrati, you receive my special thanks for being a courteous host.
Robert, if you don’t have time to read Shaw’s work there is decent desciption on wikipedia under his name. You might find it interesting how much of his philosophy is similar with yours.