INORITE!!!??? Because being economically intimate with other countries is FUCKING BULLSHIT! NWO and all that.LividBovine wrote:
NOOOOOOOOO, it is not the way of progress. We must become an international economy that is dependent on each other so that we may implement our new world order in order to achieve true redistribution of wealth and social justice...it must not be this way...
Now for something completely different:
I hope the US actually start doing this as well. It is never a bad idea to be more of a producer (or at least close to equal) nation than a consumer nation.
It's normal. Sending manufacturing overseas only really works for producing cheap stuff in bulk like electronics, toys etc. The quality stuff will always stick around to be produced locally because it can get away with charging more to cover the cost of labor. If the best knife manufacturer in the world was located in Canada, it could not ship it's manufacturing plant to China, produce on the cheap, keep it's reputation for quality, and in return charge high prices. Doesn't work, not in the long run when consumers catch on.LividBovine wrote:
NOOOOOOOOO, it is not the way of progress. We must become an international economy that is dependent on each other so that we may implement our new world order in order to achieve true redistribution of wealth and social justice...it must not be this way...
Now for something completely different:
I hope the US actually start doing this as well. It is never a bad idea to be more of a producer (or at least close to equal) nation than a consumer nation.
You get what you pay for. Cheap, throwaway garbage will always be produced where it is cheapest to manufacture it. Quality goods can be produced anywhere (within reason). Will companies cut corners? Of course. Dell internal components are still manufactured in bulk in China but if enough of their customers demanded, and were willing to pay for American made components, they would manufacture them here.Agent_Dung_Bomb wrote:
Service jobs are like this too. When Dell tried moving all their technical support to India, and I believe the Philippines, there business customers revolted. As a result of the high markup on business grade computers/servers, Dell had no choice but to bring the support back to the US. When I call them I know for a fact that I'll get a service rep located in the US.
I'm not talking about the computers themselves, so much as their technical support. Their consumer level support is still overseas, but it you buy a business class machine you'll get support out of the US.JohnG@lt wrote:
You get what you pay for. Cheap, throwaway garbage will always be produced where it is cheapest to manufacture it. Quality goods can be produced anywhere (within reason). Will companies cut corners? Of course. Dell internal components are still manufactured in bulk in China but if enough of their customers demanded, and were willing to pay for American made components, they would manufacture them here.Agent_Dung_Bomb wrote:
Service jobs are like this too. When Dell tried moving all their technical support to India, and I believe the Philippines, there business customers revolted. As a result of the high markup on business grade computers/servers, Dell had no choice but to bring the support back to the US. When I call them I know for a fact that I'll get a service rep located in the US.
I know what you were saying. I was agreeing with youAgent_Dung_Bomb wrote:
I'm not talking about the computers themselves, so much as their technical support. Their consumer level support is still overseas, but it you buy a business class machine you'll get support out of the US.JohnG@lt wrote:
You get what you pay for. Cheap, throwaway garbage will always be produced where it is cheapest to manufacture it. Quality goods can be produced anywhere (within reason). Will companies cut corners? Of course. Dell internal components are still manufactured in bulk in China but if enough of their customers demanded, and were willing to pay for American made components, they would manufacture them here.Agent_Dung_Bomb wrote:
Service jobs are like this too. When Dell tried moving all their technical support to India, and I believe the Philippines, there business customers revolted. As a result of the high markup on business grade computers/servers, Dell had no choice but to bring the support back to the US. When I call them I know for a fact that I'll get a service rep located in the US.
Until a short while ago I used to recommend Gateway computers to people that weren't very tech savvy. The reason was that all of their support was still based out of the US. Once Acer bought them, I stopped recommending them because all of their support is now outside the US. I don't care how hard they try, trying to talk to some one from India or the Philippines is aggravating. They still have thick accents and are difficult to understand.
Original quote with a few words changed, the premise still remains.but if enough of their customers demanded, and were willing to pay for American service, they would have American Customer Service.
Economic interdependence does somewhat help with averting war, but more often than not, it simply encourages economic imperialism and the disintegration of the middle class in First World countries.Iconic Irony wrote:
Surely it doesn't prevent wars or make the economies of everyone involved stronger and more stable. Of course not
Funny that the middle class in America has continuously grown in size then. The only thing that has disappeared is the false middle class propagated by unions in manufacturing plants.Turquoise wrote:
Economic interdependence does somewhat help with averting war, but more often than not, it simply encourages economic imperialism and the disintegration of the middle class in First World countries.Iconic Irony wrote:
Surely it doesn't prevent wars or make the economies of everyone involved stronger and more stable. Of course not
That's wrong. When looking at the percentage of the population that is middle class as a proportion of the total population, it has fallen over the last few decades by most measures.JohnG@lt wrote:
Funny that the middle class in America has continuously grown in size then. The only thing that has disappeared is the false middle class propagated by unions in manufacturing plants.Turquoise wrote:
Economic interdependence does somewhat help with averting war, but more often than not, it simply encourages economic imperialism and the disintegration of the middle class in First World countries.Iconic Irony wrote:
Surely it doesn't prevent wars or make the economies of everyone involved stronger and more stable. Of course not
Being squeezed out of neighborhoods due to gentrification does not mean the middle class doesn't exist.Turquoise wrote:
That's wrong. When looking at the percentage of the population that is middle class as a proportion of the total population, it has fallen over the last few decades by most measures.JohnG@lt wrote:
Funny that the middle class in America has continuously grown in size then. The only thing that has disappeared is the false middle class propagated by unions in manufacturing plants.Turquoise wrote:
Economic interdependence does somewhat help with averting war, but more often than not, it simply encourages economic imperialism and the disintegration of the middle class in First World countries.
While it is true that measures vary by definition, here's a good starting point...
"A study by Brookings Institution in June 2006 revealed that Middle-income neighborhoods as a proportion of all metropolitan neighborhoods declined from 58 percent in 1970 to 41 percent in 2000. As housing costs increase, the middle class is squeezed and forced to live in less desirable areas making upward mobility more difficult. Safety, school systems, and even jobs are all linked to neighborhood types."
http://www.brookings.edu/reports/2006/0 … booza.aspx
http://www.realclearpolitics.com/articl … conve.html"Economic Facts and Fallacies" hints at another intriguing explanation, however--a explanation that hovers around the murkier sides of the human psyche. In his discussion of income, Sowell cites a currently popular political lament: the impending "demise" of the American middle class. This widely-accepted assertion, he writes, is simply a function of statistical voodoo: defining a "middle class" income bracket (say, $35,000 to $50,000), claiming it is shrinking, and then ignoring the fact that the bracket is shrinking because average incomes are moving up, not down, the curve.
What could be a simple error for some, Sowell points out, is doubtful to be the case for many in today's chattering class--including Paul Krugman, a trained economist and frequent middle-class Cassandra, who falls into Sowell's category of "people who should know better (and perhaps do know better)." Why would writers like Krugman repeat a negative spin that is contradicted by facts? That, Sowell writes, is a "question that goes beyond the realm of economics."
Indeed. For many, it seems, beliefs in economic fallacies take on a quasi-religious significance, fueled by a fervent belief in the way things ought to be or in a worldview soaked in victimization. Sowell suggests that certain "evidence is too dangerous--politically, financially, and psychologically--for some people to allow it to become a threat to their interests or to their own sense of themselves." In that sense, as many an innocent, cocktail-holding political wonk has found, logic and facts often have no place when it comes to defining good policy. For many, emotions and psychological crutches take their place. "Blame," Sowell writes, "is much easier to understand than causation, and more politically convenient. But it is also a source of many fallacies."
Last edited by JohnG@lt (2009-12-30 10:57:14)
Brookings Institute is Keynesian, Sowell is laissez-faire. Essentially, both are looking at the same facts and coming to different conclusions.JohnG@lt wrote:
Being squeezed out of neighborhoods due to gentrification does not mean the middle class doesn't exist.Turquoise wrote:
That's wrong. When looking at the percentage of the population that is middle class as a proportion of the total population, it has fallen over the last few decades by most measures.JohnG@lt wrote:
Funny that the middle class in America has continuously grown in size then. The only thing that has disappeared is the false middle class propagated by unions in manufacturing plants.
While it is true that measures vary by definition, here's a good starting point...
"A study by Brookings Institution in June 2006 revealed that Middle-income neighborhoods as a proportion of all metropolitan neighborhoods declined from 58 percent in 1970 to 41 percent in 2000. As housing costs increase, the middle class is squeezed and forced to live in less desirable areas making upward mobility more difficult. Safety, school systems, and even jobs are all linked to neighborhood types."
http://www.brookings.edu/reports/2006/0 … booza.aspxhttp://www.realclearpolitics.com/articl … conve.html"Economic Facts and Fallacies" hints at another intriguing explanation, however--a explanation that hovers around the murkier sides of the human psyche. In his discussion of income, Sowell cites a currently popular political lament: the impending "demise" of the American middle class. This widely-accepted assertion, he writes, is simply a function of statistical voodoo: defining a "middle class" income bracket (say, $35,000 to $50,000), claiming it is shrinking, and then ignoring the fact that the bracket is shrinking because average incomes are moving up, not down, the curve.
What could be a simple error for some, Sowell points out, is doubtful to be the case for many in today's chattering class--including Paul Krugman, a trained economist and frequent middle-class Cassandra, who falls into Sowell's category of "people who should know better (and perhaps do know better)." Why would writers like Krugman repeat a negative spin that is contradicted by facts? That, Sowell writes, is a "question that goes beyond the realm of economics."
Indeed. For many, it seems, beliefs in economic fallacies take on a quasi-religious significance, fueled by a fervent belief in the way things ought to be or in a worldview soaked in victimization. Sowell suggests that certain "evidence is too dangerous--politically, financially, and psychologically--for some people to allow it to become a threat to their interests or to their own sense of themselves." In that sense, as many an innocent, cocktail-holding political wonk has found, logic and facts often have no place when it comes to defining good policy. For many, emotions and psychological crutches take their place. "Blame," Sowell writes, "is much easier to understand than causation, and more politically convenient. But it is also a source of many fallacies."
I'll stick with the smart black manTurquoise wrote:
Brookings Institute is Keynesian, Sowell is laissez-faire. Essentially, both are looking at the same facts and coming to different conclusions.
http://online.wsj.com/article/SB1000142 … 27574.htmlOn Christmas Eve, when most Americans' minds were on other things, the Treasury Department announced that it was removing the $400 billion cap from what the administration believes will be necessary to keep Fannie Mae and Freddie Mac solvent. This action confirms that the decade-long congressional failure to more closely regulate these two government-sponsored enterprises (GSEs) will rank for U.S. taxpayers as one of the worst policy disasters in our history.
Fannie and Freddie's congressional sponsors—some of whom are now leading the administration's effort to "reform" the financial system—have a lot to answer for. Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, sponsored legislation adopted in 2008 that established a new regulatory structure for the GSEs. But by then it was far too late. The GSEs had begun buying risky loans in 1993 to meet the "affordable housing" requirements established under congressional direction by the Department of Housing and Urban Development (HUD).
Most of the damage was done from 2005 through 2007, when Fannie and Freddie were binging on risky mortgages. Back then, Mr. Frank was the bartender, denying that there was any cause for concern, and claiming that he wanted to "roll the dice" on subsidized housing support.
In 2005, the Senate Banking Committee, then controlled by Republicans, adopted tough regulatory legislation that would have established more auditing and oversight of the two agencies. But it was passed out of committee on a partisan vote, and with no Democratic support it never came to a vote.
By the end of 2008, Fannie and Freddie held or guaranteed approximately 10 million subprime and Alt-A mortgages and mortgage-backed securities (MBS)—risky loans with a total principal balance of $1.6 trillion. These are now defaulting at unprecedented rates, accounting for both their 2008 insolvency and their growing losses today. Since 2008, under government control, the two agencies have continued to buy dicey mortgages in order to stabilize housing prices.
There is more to this ugly situation. New research by Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A.
In general, a subprime mortgage refers to the credit of the borrower. A FICO score of less than 660 is the dividing line between prime and subprime, but Fannie and Freddie were reporting these mortgages as prime, according to Mr. Pinto. Fannie has admitted this in a third-quarter 10-Q report in 2008.
An Alt-A mortgage is one in which the quality of the mortgage or the underwriting was deficient; it might lack adequate documentation, have a low or no down payment, or in some other way be more likely than a prime mortgage to default. Fannie and Freddie were also reporting these mortgages as prime, according to Mr. Pinto.
It is easy to see how this misrepresentation was a principal cause of the financial crisis.
Market observers, rating agencies and investors were unaware of the number of subprime and Alt-A mortgages infecting the financial system in late 2006 and early 2007. Of the 26 million subprime and Alt-A loans outstanding in 2008, 10 million were held or guaranteed by Fannie and Freddie, 5.2 million by other government agencies, and 1.4 million were on the books of the four largest U.S. banks.
In addition, about 7.7 million subprime and Alt-A housing loans were in mortgage pools supporting MBS issued by Wall Street banks—which had long before been driven out of the prime market by Fannie and Freddie's government-backed, low-cost funding. The vast majority of these MBS were rated AAA, because the rating agencies' models assumed that the losses that are incurred by subprime and Alt-A loans would be within the historical range for the number of high-risk loans known to be outstanding.
But because of Fannie and Freddie's mislabeling, there were millions more high-risk loans outstanding. That meant default rates as well as the actual losses after foreclosure were going to be outside all prior experience. When these rates began to show up early in 2007, it was apparent something was seriously wrong with assumptions on which AAA ratings had been based.
Losses, it was now certain, would invade the AAA tranches of the mortgage-backed securities outstanding. Investors, having lost confidence in the ratings, fled the MBS market and ultimately the market for all asset-backed securities. They have not yet returned.
By the end of 2007, the MBS market collapsed entirely. Assets once carried at par on financial institutions' balance sheets could not be sold except at distress prices. This raised questions about the stability and even the solvency of most of the world's largest financial institutions.
The first major victim was Bear Stearns, the smallest of the five major Wall Street investment banks but one invested heavily in risky MBS. The government rescue of Bear Stearns in March 2008 signaled that the U.S. government, and perhaps others, would stand behind other large financial institutions. The moral hazard this engendered was deadly when Lehman Brothers' solvency came under challenge. Spreads in the credit default swap market for Lehman, despite massive short-selling, showed very little alarm by investors until just before the fateful weekend of Sept. 13 and 14, when they blew out on fears that the firm might not be rescued.
By that time it was too late for Lehman's counterparties to take the protective action that might have cushioned the shock. As it turned out, however, none of Lehman's largest counterparties failed—so much for the idea that the financial market is "interconnected"—but all market participants now realized they had to know the true financial condition of their counterparties. The result was a freeze-up in interbank lending.
For most people, that freeze-up is the beginning of the financial crisis. But its roots go back to 1993, when Fannie and Freddie began stocking up on subprime and other risky loans while reporting them as prime.
Why Fannie and Freddie did this is still to be determined. But the leading candidate is certainly HUD's affordable housing regulations, which by 2007 required that 55% of all the loans the agencies acquired had to be made to borrowers at or below the median income, with almost half of these required to be low-income borrowers.
Another likely reason for Fannie and Freddie's mislabeling of mortgages was their desire to retain congressional support by "rolling the dice" while making believe they weren't betting. With the Federal Housing Administration, Wall Street investment banks, and Fannie and Freddie all competing for these loans, the bottom of the barrel had long before been scraped and the financial system set up for a crisis.
Last edited by JohnG@lt (2009-12-30 13:13:04)
Its the right time of year for it...Aftershock, Beam and Monteiths for me tonight! Bacon sandwich for brekky will be my first meal of the new decade.ghettoperson wrote:
I read the title as Pimms...
I'm personally neither a Keynesian nor a free market economist. I'm in the middle. I support socialization of certain things, but I favor the disbanding of Fannie Mae and Freddie Mac.JohnG@lt wrote:
http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html
Moving poor people into homes they couldn't afford worked out great, no? It's also a big reason why home prices skyrocketed and forced the middle class to move further away from city centers.
End the Fed while we're at it.Turquoise wrote:
I'm personally neither a Keynesian nor a free market economist. I'm in the middle. I support socialization of certain things, but I favor the disbanding of Fannie Mae and Freddie Mac.JohnG@lt wrote:
http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html
Moving poor people into homes they couldn't afford worked out great, no? It's also a big reason why home prices skyrocketed and forced the middle class to move further away from city centers.
So, I agree that Keynesianism is far from flawless.
I would favor that as well.JohnG@lt wrote:
End the Fed while we're at it.Turquoise wrote:
I'm personally neither a Keynesian nor a free market economist. I'm in the middle. I support socialization of certain things, but I favor the disbanding of Fannie Mae and Freddie Mac.JohnG@lt wrote:
http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html
Moving poor people into homes they couldn't afford worked out great, no? It's also a big reason why home prices skyrocketed and forced the middle class to move further away from city centers.
So, I agree that Keynesianism is far from flawless.
You're certainly all over the map. You want decreased intrusion into the market but more entitlements? What are your views on progressive taxation and estate taxes?Turquoise wrote:
I would favor that as well.JohnG@lt wrote:
End the Fed while we're at it.Turquoise wrote:
I'm personally neither a Keynesian nor a free market economist. I'm in the middle. I support socialization of certain things, but I favor the disbanding of Fannie Mae and Freddie Mac.
So, I agree that Keynesianism is far from flawless.
I support higher personal income taxes on the extremely wealthy but lower corporate taxes (a more similar tax arrangement to most of the rest of the First World). As for estate taxes, the system that will be implemented after 2010 seems good enough as it is.JohnG@lt wrote:
You're certainly all over the map. You want decreased intrusion into the market but more entitlements? What are your views on progressive taxation and estate taxes?Turquoise wrote:
I would favor that as well.JohnG@lt wrote:
End the Fed while we're at it.
55% after the first $1M? Gee, gives me a lot of incentive to work hard and leave money to my family. What's the point of working if you can't leave it to your children and grandchildren?Turquoise wrote:
I support higher personal income taxes on the extremely wealthy but lower corporate taxes (a more similar tax arrangement to most of the rest of the First World). As for estate taxes, the system that will be implemented after 2010 seems good enough as it is.JohnG@lt wrote:
You're certainly all over the map. You want decreased intrusion into the market but more entitlements? What are your views on progressive taxation and estate taxes?Turquoise wrote:
I would favor that as well.
The goal of higher personal income taxes and lower corporate taxes is to reinvest most of your income in the market itself and in your business. This discourages the hoarding of wealth, since wealth in and of itself is only beneficial to society when it is invested or spent.JohnG@lt wrote:
55% after the first $1M? Gee, gives me a lot of incentive to work hard and leave money to my family. What's the point of working if you can't leave it to your children and grandchildren?Turquoise wrote:
I support higher personal income taxes on the extremely wealthy but lower corporate taxes (a more similar tax arrangement to most of the rest of the First World). As for estate taxes, the system that will be implemented after 2010 seems good enough as it is.JohnG@lt wrote:
You're certainly all over the map. You want decreased intrusion into the market but more entitlements? What are your views on progressive taxation and estate taxes?
Because they're hiding most of their assets elsewhere. Wealthy people pay as little tax as they can get away with. I'll hopefully exceed the $7M cap one day and you better believe most of my money will be in a Swiss bank account.Turquoise wrote:
The goal of higher personal income taxes and lower corporate taxes is to reinvest most of your income in the market itself and in your business. This discourages the hoarding of wealth, since wealth in and of itself is only beneficial to society when it is invested or spent.JohnG@lt wrote:
55% after the first $1M? Gee, gives me a lot of incentive to work hard and leave money to my family. What's the point of working if you can't leave it to your children and grandchildren?Turquoise wrote:
I support higher personal income taxes on the extremely wealthy but lower corporate taxes (a more similar tax arrangement to most of the rest of the First World). As for estate taxes, the system that will be implemented after 2010 seems good enough as it is.
As for estate taxes...
"On Dec. 3, the House of Representatives voted to permanently extend the present 45% estate tax rate, and the $3.5 million, per person, exclusion from estate taxes. While everyone was expecting a one-year extension, no one was expecting any permanent legislation while Capitol Hill is embroiled in the health-care debate.
For a married couple, this means that up to $7 million worth of assets would be excluded from estate taxes. That excludes nearly 60% of all estates. Based on 2008 filings, 22,642 estates out of a total filed of 38,373 are under $3.5 million, according to IRS data."
http://www.marketwatch.com/story/estate … 2009-12-18
Most wealthy people are unaffected by the estate tax.
If you're rich enough in the first place, you know how to hide your money from the IRS.JohnG@lt wrote:
55% after the first $1M? Gee, gives me a lot of incentive to work hard and leave money to my family. What's the point of working if you can't leave it to your children and grandchildren?Turquoise wrote:
I support higher personal income taxes on the extremely wealthy but lower corporate taxes (a more similar tax arrangement to most of the rest of the First World). As for estate taxes, the system that will be implemented after 2010 seems good enough as it is.JohnG@lt wrote:
You're certainly all over the map. You want decreased intrusion into the market but more entitlements? What are your views on progressive taxation and estate taxes?
