A trillion here, a trillion there, pretty soon you’re talking about real money.
I’ve been thinking the same thing for a while. I don’t see any strong policy differences between Romney and Bush the Younger. It’s as if the failures of the Bush administration served only to discredit him personally. Conservatives will look for any explanation for the Bush years other than actual policy. The ideology can’t be to blame; it must be something else.
Wow, I’ve never seen someone say that a recession precipitated almost entirely because of a real estate bubble popping had nothing to do with the real estate bubble but somehow was because Bush lowered taxes while he was President.
Where are you getting that from, the McDonald’s or the K-Mart School of Economics?
The root cause of our problem was the housing market. A large portion of Americans were sold on buying houses they could not afford and lenders were issuing loans to people who were simply not credit worthy. This was primarily happening for two major reasons:
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Implicit Federal guarantees of the system. Despite Fannie Mae explicitly being spun off as a private company and telling everyone “the Federal government does not guarantee Fannie Mae securities” in 1968 the market basically ignored that under the belief the Federal government wouldn’t allow the secondary mortgage market to disappear no matter what they said. This implicit guarantee basically made people behave in a far riskier fashion than they otherwise would have.
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Rating Agency fail. Because the ratings agencies basically rated almost all mortgage backed securities the same as sovereign debt, it was considered an almost risk free, fixed income investment. A lot of mutual funds that hold bonds and pension plans that hold bonds and all kinds of people that hold bonds have either explicit limitations on buying “junk” bonds or just personal preference to not buy those bonds. Since MBS were rated so highly they were held by lots of people and institutions that would not hold poorly rated debt from say, a fledgling corporation. It ends up the ratings agencies poorly understood the assets they were rating and their ratings had essentially no value. A lot of the side effects of the housing collapse are actually tied to the secondary mortgage market where mortgages were securitized and sold all over the country and the world. But a lot of that was only going on because of these assets were basically rated as risk free.
The housing bubble bursting had all kinds of economic impacts. It destroyed consumer discretionary spending and created a shift to greater personal savings (which depresses the economy.) Lots of things are tied into a healthy housing market, and an unhealthy housing market hurts so many different industries. Falling home prices destroy local revenues, and bankrupt local governments. Falling home prices wreck having on the financial sector, the materials industry, home builders and all kinds of ancillary industries. Also, because of debt securitization, the housing collapse brought big financial firms and also wrecked having on the insurance industry that had lots of CDS plays.
If you don’t believe that the recession has anything to do with all that, you are frankly the most uninformed person on this issue I’ve ever encountered.
Again, only in Foxworld is that factual. The rest of your post is based on a false imputation that I’ve agreed with you, despite clearly stating otherwise. You did, to your credit, fall short of explicitly making the common claim that it’s all Barney Frank’s and Bill Clinton’s fault for encouraging “those people” to buy houses. Two decades earlier.
You do need to look at the effects of “free marketing” the financial industry in general, and the collapse of Lehman and the manipulation of Goldman in particular, not to be considered one of “the most uninformed person on this issue I’ve ever encountered.” :rolleyes:
So in the world of ElvisL1ves, commonly accepted reasons for the recession are “foxworld” propaganda. I’ve never seen someone so boldly go directly in the face of absolute, bedrock accepted facts.
I’ll use Wikipedia here simply because it is easy, contains its own citations, and is crowd-sourced to such a degree that blatantly partisan comments would not long survive in an article about the 2007 financial crisis. Right from that source you have this quote:
If you truly don’t believe the housing bubble is what caused the crisis you are simply wrong. It isn’t even arguable. You’ve actually said nothing to contradict it really, certainly nothing with any weight.
Virtually no one links the Bush tax cuts to the crisis which you tried to do. The one salient point you made was in matters relating to regulation. Yes, poor regulations explain some of the fiscal irresponsibility but it would have taken a lot more than just poor regulation for a 15 year housing bubble to form. If you look at inflation adjusted housing prices over the past 30 years, the Housing Price Index went virtually vertical after 2005, a hallmark of a bubble market and exactly what happens before a burst. You see such behavior all the way back to the Tulip market in the 1600s.
However as a Democrat you seem to think the crusaders of government can easily run the entire economy. Only because Doom Emperor Bush and his Cabal of Necromancers quashed the crusaders of light and justice in the SEC did any of this happen. Amazingly they control the fabric of reality and time itself, such that they went back in time to the early 90s to start housing bubbles all over the world that would erupt right near the end of the Bush Presidency.
The claim that the crisis was somehow caused by deliberately lax regulations under Bush is so farcical as to be almost unworthy of consideration. However note that people that make that claim rarely can link any actual regulatory laxness to the crisis specifically. Further, much of what happened was totally legitimate business and would not have been cause for any regulatory action. Note again, much of the stuff that we’re talking about, unwise lending, mortgage securitization, credit default swaps, and various hedging behaviors by large financial firms were 100% within the bounds of extant regulations. So “lax regulation” is a poor claim, because the primary causes of the recession were poor decision making that was entirely legal, and consumed much of the Western world. It simply was not an issue of regulation.
You can say that the bursting of the housing bubble was the sole cause, in much the same way that you can say that the fuse burning was the sole cause of setting off the dynamite. The more accurate cause would be the house of investment cards that depended on real estate prices being in permanent upward mode.
The ultimate cause is a financial industry that is exciting, fast paced, and innovative. Investment ought to be staid, boring and dull. Certainly in those sectors most prone to bubbling, of which real estate is the prime example. Add to that innovation and creative thinking, centered around finding some way around the simple fact that added return must entail added risk.
And I clearly remember how the Bushiviks fueled the bubble in real estate, and if you think on it, you will too. How many times had you seen someone approach the Bushiviks with data that suggests an economic slowdown a-coming, only to have them say “Hey, the real estate market is going great, up, up, and up, and everybody is making tons of free money!”
How many people do we have currently employed in the financial/investment sector? Making how much money compared to, say, forty years ago? How much money must an investment bank make in order to meet its grossly bloated payroll? Who’s money is that going to be?
In almost the same breath, you identify that these stupid things were “100% within the bounds of extant regulations” and then deny that “lax regulation” had anything to do with it. Perhaps if they had not been “100% within the bounds of extant regulations”…?
They are commonly accepted in Foxworld, yes. Perhaps you ought to explore others?
What caused the housing bubble? :dubious: And what caused all that insane, irresponsible financing of it? :dubious:
Perhaps because I didn’t. What, you think the housing bubble was everything that was wrong?
The point. which anyone outside Foxworld understands, was that the pernicious, erosive effects of the federal budget deficit, all the absorption of investment capital and reduction of government capacity to invest in the economy, and so forth are indeed the result of Bush’s (and your party’s in general) antifactual ideology that reducing taxes on the wealthy does anything but create deficits. Clinton left a booming economy and surpluses. Your guys reversed his policies and destroyed the economy. Romney wants to do even more of it, further increasing the deficit but pretending that the Laffer Curve fantasy will finally make things right, and that, after a decade of historically low taxes, the wealthy will finally become “job creators”. But you don’t see the disconnect there, do you? I assure you, we out here in the reality based community do.
Thanks for the laugh. 
Um, you *were *joking, weren’t you? Please say you were joking.
This is a fundamentally stupid post, and I rarely even respond to your posts because that is the intended content of them. However your first few sentences were good and I agree with you. I was never saying the housing bubble was the “sole cause” for the recession, and you are absolutely right about the “house of cards.” But that’s basically an implicit point, the economy is intrinsically linked up, when something as important as real estate gets into a huge bubble that bursts you can expect there to be quite a few casualties. Especially because almost all homes are bought with a bank loan, so the banking industry is intrinsically tied in with the real estate market. Plus, real estate is a very common investments in various forms (direct investment, MBS purchasing, REITs etc) so when a major asset class has a bubble-burst you can expect general problems throughout the economy.
But you’re absolutely correct and I’ve never said otherwise, the real estate bubble wasn’t the “sole cause”, but it was what started the problem and by and large everything cascaded from there.
I take “lax regulation” to mean “regulators not enforcing extant regulations rigorously.” That is how I use the term, anyway. If you think the problem was lack of appropriate regulations then I’d think you’d say the problem was “unregulated behavior” not “laxly regulated behavior.”
I don’t watch the news of any kind, but I can guarantee you that basically every source of news agrees the housing bubble caused the recession. Regardless of whether or not Ruper Murdoch is somehow involved.
I don’t think you actually know the answer because I suspect you think Bush was responsible. However the market bubble, like all bubbles, grew slowly then skyrocketed before bursting. The bubble started growing globally more than 15 years ago. It wasn’t really Clinton or Bush’s fault and it wasn’t local to the United States.
You should go work for the Democrats, I’ve never seen someone spew so much retarded campaign style platitude rhetoric on a message board. You realize this isn’t a forum for that sort of thing, at least not a very good one? You should be out on the streets with a megaphone where you belong.
Housing markets in many countries around the world experienced a bubble, even countries like the UK which have very high marginal tax rates on their top income earners, far higher than in the United States.
Clinton benefited from a GOP House that was almost entirely responsible for the budget surplus (and it is the House that originates budget bills and congress in general that has to pass them.) Bush also had to fight a global war on terror (and chose to fight a war in Iraq.) Clinton benefited from a dot-com bubble that burst and shit all over the beginning of Bush’s Presidency. Clinton deserves virtually no credit for anything positive and is amongst our most overrated and terrible Presidents.
Not joking so much as making fun of your childish, uninformed and totally naive and lacking understanding of the economy.
And you’re willing to take a stand on the distinction between inadequate enforcement and inadequate laws? You do realize that cedes the entire point, don’t you?
Ah, no worries, the Laffer Curve Fairy will make everything all right. Eventually. If only we *believe *in him hard enough.
The last post of yours? Couldn’t read it through the thick coating of foam you spewed all over it. Just more incoherent ranting, no doubt. Cool, though, bro.
I assume that Romney is a plutocrat who enjoys the support of plutocrats. He will advance the social conservative agenda only so far as is necessary to keep them in the tent, while talking up moral values a lot. Abortion rights will be under assault, but he won’t shut them down completely because that would lose the plutocrats their very best issue for keeping the idiots voting Republican. Lotta talk on that front, relatively little action.
Gay rights will be trickier, as that is a losing position demographically for the Pubbies, but an important issue for the idiot vote. (I’m using “idiot” as a useful shorthand for social conservative lower and middle class folks, here. I realize that not ALL of them are idiots, but MOST of them are, so … works for me! I do not mean to be insulting anyone who reads this, as I do not think very many of the group I just described read The Straight Dope, or … much of anything.) Probably lots of talk, but little action, once again, on suppressing gay rights.
The important part of his agenda, for Romney, will be to continue the gutting of the US middle class by the one percenters, as that’s very much on the agenda of the plutocrats. Look for tax breaks for the rich a go-go, deregulation business in general and of the financial sector in particular, laws making it easier for the wealthy to export jobs outside the US, and putting more of the tax burden on the middle and lower classes, and cutting out student loans, while stripping more of the social safety net from the middle class.
Ryan will be Romney’s attack dog on the middle class, taking the lead, and the heat, in unpopular measures like gutting Social Security, Medicare and Medicaid, and in raising taxes on the middle class, while Romney sits back and looks all innocent and Presidential. Romney may even veto some of Ryan’s intiatives if they prove sufficiently unpopular with a wide enough array of voters to make Republican control over the government unlikely.
Of course, it will all be kabuki theater, with Romney and Ryan working together to dismantle the middle class as efficiently as possible behind closed doors while playing good cop/bad cop for the idiot vote.
To make Republican control of government even more secure, there will be more assaults on democracy, more needless restrictions on voting in the name of “protecting from voter fraud” and more influence of money in politics moving us ever farther from “one man, one vote” and ever closer to “one dollar, one vote.” Ultimately, the goal is to make voting irrelevant, giving the corporatists a free hand in running America.
I dunno. Canada’s tightly regulated. No bank failures, here.
“Retarded”? “Childish”? Even without those specific adjectives, this is more an attack than a discussion.
Dial it back or take it to The BBQ Pit.
[ /Moderating ]
The Laffer Curve has nothing to do with economic prosperity or even deficits. It also has nothing to do with “supply-side” “trickle down” or “voodoo economics” whatever you want to call it. Supply-side economics posits that lower taxes on the wealthy leads to greater economic investment and thus benefits for all. There is some kernel of truth to that but not generally enough to justify it as a policy position (the kernel of truth is yes it increases investment but not by very much, the wealthy don’t spend their money as much on things that actually help the economy and a lot of their money is almost “put to sleep” in terms of the greater economy. The middle class and lower class spend most of their income on consumer products and consumer staple goods which are far more important for overall economic growth than the purchasing of large amounts of municipal and corporate bonds and secondary market equities.)
The Laffer Curve was used in the 80s to justify the supply-side economic position, but all the Laffer Curve actually shows is that tax over a certain amount has diminishing returns for government coffers. That is actually not significantly contested, and actual history of tax rates does show that a move from say, 90% effective top marginal rate to 50% effective top marginal rate actually does result in both an overall increase in government revenue and the top AGI taxpayers paying a greater portion of all taxes collected. Even most left leaning economists agree with this basic premise, that at the extremes (0% tax and 100% tax) government revenues will essentially be $0. This is just a reflection of the reality of elasticity.
However the “sweet spot” so to speak is generally much higher than say, 35% or even the lower 28% rate seen in the past on the top margin. Average estimates put the sweet spot north of 50% in the 60-70% range.
For anyone interested, the NYT Week in Review has a lengthy article on just this subject. Don’t want to link to it as I’ll have to eat into my NYT monthly quota to do so. I will note that the author assume the GOP keeps the House and gains a slight lead in the Senate. I agree with the former, but not the latter. Still, a good read. Also, lost of other good analyses concerning GOP politics.
The point, as I’m sure you understand, was that the notion that reducing taxes on the wealthiest somehow results in broad-based economic stimulus is nonsense. All it does is run up the debt. We know empirically that Keynes was right and Rand was wrong. But the GOP collectively cannot admit that, Romney in particular doesn’t have the integrity to say it if even he believes it, and instead they are pushing for even *more *voodoo economics and fuzzy math and deregulation. Maybe if we cut their taxes even more, the Job Creation Bunny will finally appear, after a decade or more, huh?
To get out of this mess, we need more of what got us into it, they claim. That’s based not on facts and experience, but on denying them and instead trusting in ideology and hand-waving. And here you are supporting that position. Remarkable.
Let’s hope so. Romney’s business and organizational experience are light-years ahead of the current benighted soul, whose tenure as Leader of the Free World is longer than any full-time position he has ever held.
That, I don’t know. It depends on who controls Congress, but one of the complaints about Romney during his governorship was that he made the state legislators schedule appointments and meetings thru his office, and was a lot less informal than they wanted. Don’t know how much of that is carping from Dems who wanted to try to talk him out of doing whatever he was doing.
Reagan, who you mention, was a lot better at schmoozing, as well as being more personally charming than Romney is. Reagan could be friends with Tip O’Neill even across the ideological divide. And that helped him get his agenda across. Clinton was just a genius at politics and triangulation. I doubt Romney is going to be that.
That can be good, or bad, or both. Carter, for instance, was going to be a hands-on President, and then got bogged down in minutia to the point of scheduling the White House tennis courts. I am hoping that Romney’s business expertise will allow him to delegate and keep his eye on the bottom line.
I am hoping that running Bain and the Olympics is better experience than running a farm and a peanut warehouse.
Regards,
Shodan