Businesses React
Robert E. Murray read a prayer to a group of company staff members on the day after the election, lamenting the direction of the country and asking: “Lord, please forgive me and anyone with me in Murray Energy Corp. for the decisions that we are now forced to make to preserve the very existence of any of the enterprises that you have helped us build.”
On Wednesday, Murray also laid off 54 people at American Coal, one of his subsidiary companies, and 102 at Utah American Energy, blaming a “war on coal” by the administration of President Barack Obama.”
Jobs coming to WI:
http://www.albertleatribune.com/2012/11/09/caterpillar-inc-to-shutter-its-owatonna-plant/
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1147 hrs
In our restaurant system, we have large franchisees in a panic (they expected Obama to lose and law repealed).
The costs of Obamacare will literally put them out of business.
There is talk of trying to sell off untis (but that takes time).
NO ONE IS TALKING ABOUT EXPANDING! (Usually a second location puts you over that 50 employee threshold, invoking the Obamacare mandate).
Obamacare is going to destroy this economy.
I lobbied our corporate lawyer to get an exemption like McD’s got from Obama, but he claims the McD’s, and other special Obama crony exemptions, are going away.
So inside industries, some will be inflicted hard by Obamacare, others get special Obama political favors.
It’s disgusting.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1233 hrs
I don’t get this. Nothing changed on Tuesday. Even if Romney had been elected… nothing would have changed on Tuesday. No new laws were passed. If this was all due to speculation regarding what MIGHT happen in several months, then you should be making decisions THEN… not now.
Posted by Nick on November 09, 2012 at 1311 hrs
Nick,
Wake up and smell the manure. Obamacare is so catastrophic to business, business owners figured it would be repealed with a new president. I counted on a Romney win.
We are now realizing the destruction of Obamacare will hit.
Many are scrambling because it will destroy more than 100% of the profit in many companies!
Even though my company is below 50 employee threshold, I will never expand to allow Obamacare in its full destructive mode to be a part of my business. So expansion off the table for me.
Despite being under the 50 employee threshold, I have spent 50 hours complying with the Obamacare 1099 requirements with all my vendors this year. It makes me puke. It will not affect my tax return, the 1099 requirement just pushes more paper and makes business ownership infinitely more difficult.
Hateful liberalism needs to be stopped..
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1316 hrs
Nick,
(Copy of a email from a large franchisee out East this A.M.)
My CPA has told me the fines will not be deductible.A labor lawyer also told me that they will take your total hours for the year and divide them by 1560 (30 hours x 52 weeks) and determine what your equivalent full time employees are and base the fine on that. What the other chains are planning is not going to work according to her.
With 14 stores, it is going to cost me between $140K and $200K as close as I can estimate. In my case, I will have to raise my prices 3% in 2012 just to cover Obama care. Those of you with fewer than 50 equivalent full time employees will not have to pay Obama care. How can I be competitive with franchisees that own 1 or two locations?
It makes me nauseous
Is this what kind and campassionate liberalism is in its truest form? Hard working business owners, on top of eveything we do, having to dodge fines, and penalties from our government?
Punishing hardworking achievers is the second sacrament in the liberal religion….right after abortion.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1326 hrs
Kevin, why do you feel the need to add things like “Hateful liberalism must be stopped” to the end of your talking-point-filled posts? And if you counted on a Romney win, I seriously doubt your ability to effectively run a business long term, as you have no ability to observe reality or foresee likely trends and outcomes in our country.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1327 hrs
VA,
See email I just posted.
It’s hateful to destroy jobs.
It’s hateful to make business owners comply with hours of needless regulation.
It’s hateful to take away a business owners entire profit.
It’s simply hateful to destroy what one has spent a lifetime achieving. (this franchisee is very, very, worried about that.)
Stop the liberal hate…that’s all I’m saying.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1344 hrs
VA,
It’s also hateful to all the workers that get laid off as a result…they are people too.
It’s hateful to force a business owner to have to decide between the entire company (bankruptcy from Obamacare expenses) and all the employees or sacrificing a smaller chunk of employees.
No one should be forced into that no-win decision.Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1411 hrs
I’m really upset about the coal miners, out of everyone, being put out of work due to the double-whammy of Obamacare and Obama’s war on coal. Those coal miners can’t just pick up and go work at another coal mine or even in a different type of mining. Coal mining is very specialized and has its own type of machinery and processes. But even beyond that, most coal mining takes place in areas that already are riddled with poverty. Whole regional economies depend on the dollars that coal mining produces. As a friend of mine in eastern Kentucky once told me “If you don’t work in coal mining I don’t know what you’d do here.” So, Hope and Change has now doomed a region that just 10 years ago was seeing things pick up to endless crushing poverty and all of the hopelessness that comes with it.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1454 hrs
“Besides American Century, Murray’s company, the largest independent coal operator in the country, also owns, via a subsidiary, the Crandall Canyon Mine in Utah. Five years ago this month, six miners and three rescue workers were killed in that mine. Murray showed his true colors with his belligerent behavior after the accident. The Mine Safety and Health Administration fined the operation more than $1.85 million for violations that it says directly contributed to the deaths.
Murray had said the violations were trivial and lied about one of the them, withholding information from the federal government about a dangerous mining technique the company decided to use to meet its coal quota just before the lethal collapse.
Murray has lobbied against new safety regulations, arguing that these are “playing politics with the safety of my employees.”Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1601 hrs
He can do whatever he want as a business owner. But structuring a political tirade as a prayer to Christ? That’s just tacky.
Posted by Recess Supervisor on November 09, 2012 at 1639 hrs
Wait a minute. Owen, you approve of this.
Coal is having problems because it is being displaced in the power grid by natural gas from shale. It isn’t because of Obama, it’s being driven by the free market.
Damn the free market! If this were France the coal miners would stand a chance.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1718 hrs
And I’d like to note that the fate of Obamacare did not depend on the presidential election because the votes weren’t there in the Senate. So, in an odd twist, Obamacare would be more threatened today if the GOP had supported more moderate candidates like Dick Lugar.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1724 hrs
There are many more companies that are laying off 48 hours after Obama’s reelection.
http://www.theblaze.com/stories/how-many-businesses-have-announced-closings-or-lay-offs-since-obama-won-a-second-term/
Yes, it’s the blaze. What other media would do it?Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 1741 hrs
Nick in 3 , agreed.
Real businessmen hedge and adjust to whatever life throws at them.RS- I thought the same. Jesus really should have given Romney the missing 400,000 votes. You would think He (or She) would know what was best for us
Kevin, get off the blog , run a special and sell more product. ( lord knows I’ve already done all i humanly could for DQ’s in Washington County)
Ditto the war on coal ( see post #12 ). Boone Pickens would tell you natural gas is the answer to America’s energy issue ( no liberal he ) and that the phrase
“Clean coal ” is an oxymoron .Some industries get left behind as technology evolves. We wouldn’t want the government to pick winners and loser now would we?
The whining has really reached a fever pitch here. Put the purse down, put on your big boy pants, quit complaining and compete.
Posted by .(JavaScript must be enabled to view this email address) on November 09, 2012 at 2139 hrs
Mark,
Are you the “unofficial” Boots blog control?
The example I cited is a fellow franchisee. He is face with unfair competition and an uneven playing field. As a director of the operators association (you could call it a union), its my job to help beat back the intellectual dishonest of Obamacare.
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 0053 hrs
Or you could help your fellow owners and Association members deal and adopt to Obamacare so they are best prepared for when the full effects of the law become active. That way you can help your fellow businessmen plan long term and save money by creatively dealing with the new law.
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 0620 hrs
John,
Or you could help your fellow owners and Association members deal and adopt to Obamacare so they are best prepared for when the full effects of the law become active.
Ommm….yeah…could you point to any one source that can explain the full impact of this law?
This franchisee paid for advice from 3 labor lawyers on the request your describe and got COMPLETELY different answers!
What we do know is destructive, hurtful, and job killing….what is even worse is the junk we don’t know!!!
This is what happens when an ignorant Nancy Pelosi passes a bill that she has not read, doesn’t understand, or has any clue to the consequences.
America will suffer when business owners scramble to save their companies from bankruptcy caused by this bill.
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 0824 hrs
Ah, yes, the perfect storm. The sky is falling mentality, meet the self-fulfilling prophecy. Investors and business owners THINK that Obamacare will be the death knell of the free market, that they BELIEVE these reforms will end up being their Waterloo.
Indeed, say our fine “we built that” corporate heads, why not take preventative measures to ward off its ALLEGED and SUPPOSED long-term disastrous effects? No need to stay the course required. No need to “let’s just see how this plays out, then take the proper course of action”.
Nay, let’s CREATE a financial panic on Wall Street by our mantra—cut, cut, cut and sell, sell, sell. King Kong ain’t got s&^% on Chicken Little!
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 0901 hrs
greencarman,
How many businesses do you own?
No need to “let’s just see how this plays out, then take the proper course of action.
In my experience, that is a awful approach when it comes to dealing with any taxing authority.
I suffered a sales tax audit where I took your approach and it was a disaster. It took me 3 years, and $10,000 to vindicate the issue. (The issue being, we followed advice of taxing authority, but they changed their mind on issue in my audit and tagged me retroactively.)
Government is not eloquence, it is not compassion, it is force pure and simple…and it is ugly.
Do you support the ugliness?
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 0915 hrs
That should be, “do you support the ugliness, and suffering, of Obamacare”?
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 0917 hrs
ndeed, say our fine “we built that” corporate heads, why not take preventative measures to ward off its ALLEGED and SUPPOSED long-term disastrous effects?
That’s exactly what they are doing. With less workers, they will be better positioned to either move overseas or pay the taxation. Why does that bother you? It’s not like we didn’t warn you numerous times. It’s not over either….more will come.
Posted by .(JavaScript must be enabled to view this email address) on November 10, 2012 at 1911 hrs
That should be, “do you support the ugliness, and suffering, of Obamacare”?
Translation: Do you support continuing to have millions of people lack the access to basic health care because it might cut into my bottom line even though the plan was first implemented by Romney in Mass. and devised by the Heritage Foundation as a responsible way to have all individuals covered whiles still benefiting their supporters, the insurance companies? OK they only came up with that at the time because it seemed better for insurance companies than President Clinton’s plan.
There is a reason that cost per capita for health care in this country is the highest in the world with our health care itself in the middle of the pack…insurance company profits. How would you propose to cover those individuals? Through private charities paying for funeral costs? I imagine you are also a big fan of raising the minimum wage.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1020 hrs
From reading the comments it is easy to identify those commentors who have civil service protections vs those who are the producers and have a rudimentary knowledge of basic economics.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1222 hrs
lovetoride—Praytell, to whom are you referring to? Why not call out those individuals rather than being vague?
“How many businesses do you own?”
I do not own any, Mr. Schuenemann. But I do know a number of small business owners. They are concerned about the potential impact of Obamacare; a few are taking the “sky is falling” mentality while others are being cautiously optimistic.
“In my experience, that is a awful approach when it comes to dealing with any taxing authority.”Exactly, from YOUR perspective, ANY and ALL alleged “government intrusion” in business is “evil” or “nonsense”. Something tells me that you ran afoul with regulations, henceforth the tax audit. Remember, the will of the people is reflected in states that pass company regulations. Majority rules, remember? Those laws were created by the people, who elected representatives to look out for their interests.
It’s amazing how much you claim to support freedom…unless it bites you in the ass, and then you whine and complain how that freedom is “oppressive” and that “minority rights” ought to be recognized!
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1303 hrs
“Ommm….yeah…could you point to any one source that can explain the full impact of this law?
This franchisee paid for advice from 3 labor lawyers on the request your describe and got COMPLETELY different answers!
What we do know is destructive, hurtful, and job killing….what is even worse is the junk we don’t know!!!”
Mr. Schuenemann, you do realize that there is a disconnect here with your “logic”. You claim that no one knows the long-term consequences of Obamacare, especially since the experts disagree on its effects. YET, you repeatedly tout that its impact on businesses will be devastating…without having any direct proof!Obamacare may or may not be a thorn in the side of companies. I get it…the fear of the unknown to corporations is most unsettling to long-term growth. I do acknowledge that this legislation is complex and that Congress should have vetted it more thoroughly. But the “Chicken Little” battle cry of businesses will probably lead owners to panic. And if we look at history, this mindset has helped facilitate recessions.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1313 hrs
Dave,
Translation: Do you support continuing to have millions of people lack the access to basic health care because it might cut into my bottom line….
If the bottom line is destroyed in the process…which I pointed out to you in a direct example, why own the business? Why put up with the seven day a week headache? Why put up with the disrespect from people who feel they are entitled to your hard work?
People lose these jobs as a direct result of destroying these small businesses through Obamacare. What about your compassion for these people.
You want to be Spain, or some other country with 20% unemployment?
That is not compassion, it is state sponsored oppression on a Stalinist level.
I’m also still waiting for your 3 things in Republican platform in your outrageous statement the other day.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1411 hrs
greencarman,
1.) Obamacare is not freedom, it is oppression.
2.) Some effects are known and those business owners are contemplating exiting, selling, closing, or laying people off to bridge the gap.
3.) The effects we don’t know are truly scary in terms of the huge taxes on the small business owners in terms of compliance and regulation! Even though my business is not allegedly subject to the law with less than 50 employees, I’ve spent hours of my time complying with the 1099 reporting requirements. What gives you the right to subject my life to worthless paper pushing that serves no one? That is slavery.
How can majority rule on something they have no idea on what it is? (Especially the chief Stalinist, Nancy Pelosi.)
How is anyone “getting” health ins. under Obama? The law forces people to buy health ins. or be fined.
It seems you don’t even know the law!
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1418 hrs
Kevin, there is a significant difference between cutting into your bottom line and wiping out your profits. The business owners making this statement now are making just that, a statement (or hissy fit) to react to their loss at the polls to a candidate that puts the common good ahead of individual corporate profits. Anytime government makes a decision that involves taxation for the common good it will cut into the bottom line and you will scream about Stalin, socialists, etc. and help continue the slow slide of the Republican Party into history.
What gives you the right to subject my life to worthless paper pushing that serves no one? That is slavery.
The lack of government regulation gives us corporations that put corporate profit ahead of the common good, it gives us the savings and loan scandal, Enron and most recently the banking/housing bubble bursting in 2008. We could use more of that kind of oppression.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1654 hrs
The lack of government regulation gives us corporations that put corporate profit ahead of the common good, it gives us the savings and loan scandal, Enron and most recently the banking/housing bubble bursting in 2008. We could use more of that kind of oppression.
Actually, the intrusion of government regulation gave us the housing bubble. I thought this was common knowledge now?
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1849 hrs
Actually, the intrusion of government regulation gave us the housing bubble. I thought this was common knowledge now?
Posted by Spock on November 11, 2012 at 1849 hrs
To progressives, this very thought is mind-blowing.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 1854 hrs
“Actually, the intrusion of government regulation gave us the housing bubble.”
Spock and Mike, please educated yourself! I would venture to say it was DEREGULATION, among a myriad of factors, that caused this crisis.
http://en.wikipedia.org/wiki/Causes_of_the_United_States_housing_bubble#Deregulation
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2006 hrs
“What gives you the right to subject my life to worthless paper pushing that serves no one? That is slavery.”
Thanks for the hyberole, Mr. Schuenemann!
And what gives YOU the right to circumvent the will of the majority? The law was passed by representatives, who were voted into office to look out for the interests of their constituents. Was not Obamacare passed by Congress by majority vote? Is not this process part of our democracy?
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2009 hrs
Ooops, I meant to say hyperbole!
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2010 hrs
Spock and Mike, please educated yourself! I would venture to say it was DEREGULATION, among a myriad of factors, that caused this crisis.
Your “education” is wanting.
Simply put, who would have thought that government policy to give homes to people who could not afford them could go wrong? There could be a number of causes for the crisis, but only one culprit in creating the environment. Linking wikipedia? Fail.
PS. Realize that I didn’t say government caused the crisis. It just wouldn’t have happened without government policy to get homes to people who can’t afford them.Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2020 hrs
I do get a kick out the lazy, ‘point to a link that agrees with me’ wiki-answer.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2048 hrs
greencarman,
So the will of majority can enslave others?
I thought we fought a civil war over that?
Did the South win, and I missed the memo?
The reality is: many business owners are strongly thinking about not working anymore. If Obamacare is going to strip all of their profit and then some…why even work?
It’s easier to be a moocher. As a moocher, their time will be their own. (It will destroy country in process, but that seems to be what liberals want.)
Personally, there is plenty a Sunday A.M. I could do without having to pay attention to some business emergency. Moochers usually have their Sundays to do whatever.
If you feel punishing achievers is noble, moral, and and correct…the achievers (or as I prefer, the slaves at the end of your whip) will stop doing what they are doing and it will hurt workers…the people you claim to care about.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2055 hrs
greencarman,
PapaJohn’s cutting back staff and their time:
Obamacare: hurting they very people its meant to help.
Also, it is going to raise prices on many things, making it a huge regressive tax on buying power for poor and middle class.
Is this the grand liberals scheme: Tax poor and middle class without being honest about it?
I find that reprehensible.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2118 hrs
Kevin,
As a business owner your level of disdain for customers or “moochers” as you call them is incredible.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2144 hrs
Spock—You can chose to focus on only one part of the problem—government—regarding the housing bubble fiasco. You would also be taking a simplistic approach. Culpability is equally divided, my friend, among (D)‘s and (R)‘s, the private sector, and the banking industry.
Indeed, who would have thought that lending institutions would lend money to previously unqualified people and have nothing go wrong? Are you seriously suggesting that banks should have “known better” and refrained from taking advantage of the changes in the law? Why, how anti-free market of you if that is your intention!
Here, let me provide some additional resources that even you can understand.
http://www.youtube.com/watch?v=h4Ns4ltUvfw
http://www.pbs.org/wgbh/pages/frontline/meltdown/view/
Mike—Refute the source, Mike, with evidence. And, if I’m lazy for simply pointing to wikipedia, what does that make YOU for linking to YouTube with humorous, yet irrelevant, material to the thread? Hint: It begins with an i and ends with a t, with a d, an i, and an o.
Mr. Schuenemann—Chicken Little!Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2146 hrs
Here you go, we can trade links til the cow come home.
Or, you can provide your own poorly thought-out analysis.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2154 hrs
Congratulations, Mike, you can cite a source other than using YouTube!
I’m NOT denying that the government played a role in the financial meltdown of 2008. All I am saying is that for anyone to say the government is THE sole reason or THE major factor out of several causes for its occurrence is an absolute fool given the complexity of the issue.
“Or, you can provide your own poorly thought-out analysis.”
I would focus on your own debating skills before you start pointing fingers. You must take your marching orders from Smeety!
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2227 hrs
Spock and Mike, please educated yourself! I would venture to say it was DEREGULATION, among a myriad of factors, that caused this cr006 hrs
Posted by greencarman on November 11, 2012 at 2006 hrs
- - - - - - - - - -
I’m NOT denying that the government played a role in the financial meltdown of 2008….
Posted by greencarman on November 11, 2012 at 2227 hrs
Let us all know when you figure out wtf you are talking about.
Posted by .(JavaScript must be enabled to view this email address) on November 11, 2012 at 2234 hrs
Spock—You can chose to focus on only one part of the problem
Like you are? That’s silly. I am focusing on the only problem. Banks will not give out loans to people who can’t afford them unless they are forced or bribed to do so. It’s not that hard to figure out. I could go into the GSE’s and their massive involvement in the secondary market, credit ratings, the assumed government backing or the fallacy of MBS’s. It all comes down to government intrusion in the marketplace to give out loans to people who can’t afford them. It certainly wasn’t any “deregulation” boogy man.
PS. Now PBS? Where’s the Huffington Post?Posted by .(JavaScript must be enabled to view this email address) on November 12, 2012 at 0141 hrs
Ewing,
As government hands out more food stamps, that CAN’T be used at restaurants….what do you think happens to restaurant industry?
With rare exception (the few states that let Taco Bell, BK and some other restaurants take food stamps) mooching hurts restaurants.
Thanks to dramatic expansion in food stamps, restaurants are chasing far fewer dollars. Making it more difficult for those business owners to pay their taxes as a result.
It is the leaders and achievers who are insulted by the mooching, not the moochers.
Posted by .(JavaScript must be enabled to view this email address) on November 12, 2012 at 0731 hrs
While there was certainly a ton of factors that contributed to the mortgage & housing market collapse, the core reason is singular. The Government Sponsored Enterprises - Fannie & Freddie - decided to accept sub-prime loans. Period.
If they hadn’t, banks wouldn’t have been issuing bad loans because it would’ve been their own money on the line. Wall Street Journal (among others) predicted big problems this as soon as Fannie & Freddie changed their criteria.
Posted by .(JavaScript must be enabled to view this email address) on November 12, 2012 at 0924 hrs
Mike, I’ll speak really slowly so even you can understand.
Spock is claiming that government was the sole reason for the financial meltdown in 2008. I am saying that government is one of many factors for that fiasco. I have been consistent in my position. Spock and company want to pin the blame squarely on government. I assign government blame as well, but banks and speculators are EQUALLY culpable.
For Spock and Locke to suggest that the core reason is singular is employing simple logic. The financial industry in particular was calling for deregulation! They wanted it easier to be able to loan money to other groups of people who normally were ineligible to receive loans. That is, they sought to provide loans to at-risk borrowers because they represented an “untapped market”. That is why they were happy as a lark when components of Glass-Steagall were set aside in the late 1990’s.
Government did NOT coerce banks…banks were WILLING partners. Moreover, the deregulations enabled financial institutions to become involved in the collateralized debt market, i.e. banks “packaging” sub prime mortgages and assigning a rating. The higher the rating, the higher the cost to buy, the more profit to potentially earn. On top of it all, insurance companies decided to protect these “toxic assets” at high premiums.
No one put a gun to the head of these companies to become involved, they were more than willing to put billions of dollars of their own money on the line in hopes of scoring big-time!
Lending institutions definitely wanted government intrusion in the marketplace to give out loans to people who could not afford them. As depository institutions lost market share to less-regulated investment firms, calls for the repeal of the Glass-Steagall Act gained traction. Advocates maintained repeal of the act could be coupled with regulations requiring banks to limit themselves to relatively low-risk investments to prevent potential conflicts. The law was finally abolished in 1999 by a Republican-controlled Congress in legislation signed by Democratic President Bill Clinton. Ultimately, new relationships that had been previously off-limits between depository banks and investment banks led to poorer quality loans, massive securitization of mortgages, and a housing bubble.
Posted by .(JavaScript must be enabled to view this email address) on November 12, 2012 at 2222 hrs
Spock is claiming that government was the sole reason for the financial meltdown in 2008. I am saying that government is one of many factors for that fiasco.
You need to be specific. I said the housing crisis would not have occurred if government had not intervened in the marketplace.
I never said that banks were necessarily coerced. I agree that part of their motivation was profit from government and it’s entities.
Almost all of the secondary market was GSE controlled. Be specific as to who did the “packaging”.The financial industry in particular was calling for deregulation! They wanted it easier to be able to loan money to other groups of people who normally were ineligible to receive loans.
All businesses want less regulation. That said, the financial industry did everything it could to not hold subprime and fought tooth and nail to prevent giving loans to the ineligible. Only when government took the risk while giving them the profit did they begin following government policy. Of course, then they loved government intrusion since they had no risk and all profit. Most of your major banks really didn’t need a bailout. Several denied bailout money when strings were attached. Guess which banks haven’t paid back their TARP money?
Your major problem is understanding the marketplace at the time and the incentives that government created to produce this policy.
Posted by .(JavaScript must be enabled to view this email address) on November 12, 2012 at 2306 hrs
Spock—“I never said that banks were necessarily coerced.”
Yes, you did. This is what YOU stated in #44…“Banks will not give out loans to people who can’t afford them unless they are forced or bribed to do so.”
Spock—“That said, the financial industry did everything it could to not hold subprime and fought tooth and nail to prevent giving loans to the ineligible.”Patently false, according to this study. Banks clearly facilitated the process.
http://articles.latimes.com/2009/may/06/business/fi-subprime6
And this settlement is further evidence of banks direct knowledge and involvement in the matter.http://dealbook.nytimes.com/2012/08/29/citigroup-in-590-million-settlement-of-subprime-lawsuit/
“Your major problem is understanding the marketplace at the time and the incentives that government created to produce this policy.”Government AND financial institutions co-produced this policy, so do not forget this fact!
Posted by .(JavaScript must be enabled to view this email address) on November 13, 2012 at 0007 hrs
Yes, you did. This is what YOU stated in #44…“Banks will not give out loans to people who can’t afford them unless they are forced or bribed to do so.”
That is what I said. That doesn’t equate to “banks were coerced”. I suppose in your mind it does. That is your problem. The ability to understand. Though I will not state they were not. There could very well be sticks along with those carrots.
Patently false, according to this study.
Amazing. This inability to understand. I will say this, Bank of America did buy the ruse government played. Your “study” is quite an opinion piece. It’s just not a study.
And this settlement is further evidence of banks direct knowledge and involvement in the matter.
Um, yeah, lawsuits no longer mean guilt. It just means they lost.
I am not saying that banks aren’t culpable. They used taxpayer risk to finance their profit. Getting free money has a lot of appeal. It’s disgusting. It’s immoral. It’s reprehensible. It’s unpatriotic. Why isn’t anyone in jail? Well, because they did the policy of those who are in government.
Here’s the difference. The banks did not produce the policy. In fact, banks don’t make policy. You should not forget this fact. It is government, and only government, that controls the regulatory strings. Government changed the regulation to provide loans to people who can’t afford them. Without this INCREASE/CHANGE in regulation, the mortgage crisis would not have occurred.
I repeat, Your major problem is understanding the marketplace at the time and the incentives that government created to produce this policy. To add, you are even ignorant of policy making.Posted by .(JavaScript must be enabled to view this email address) on November 13, 2012 at 0115 hrs
VA -
To add to your hatefullness, businesses are going for sale to avoid capital gains tax your Messiah has enacted. How many more jobs down the dumper now?
http://www.businessweek.com/news/2012-10-19/wealthy-advised-to-sell-for-gains-before-unfriendly-2013Posted by .(JavaScript must be enabled to view this email address) on November 13, 2012 at 1154 hrs
Bajaskier—Chicken little!
Spock—“That is what I said. That doesn’t equate to “banks were coerced”. I suppose in your mind it does. That is your problem. The ability to understand.”I comprehend perfectly. You infer that government used its influence to unduly lead banks to engage in a desired behavior. Coerce is a synonym for force. Yet, clearly, banks forged ahead on their own accord. They were NOT coerced, forced, or bribed.
Spock—“Your “study” is quite an opinion piece. It’s just not a study.”Indeed, the source I cited is an opinion, one rooted in facts and evidence. YOU are now required to refute with the study with counter arguments rather than put a simplistic label to it.
Spock—“Banks don’t make policy”.Where have you been, man? To add, it would appear that you are ignorant to how special interests are able to advance legislation.
In this instance, banks produced and promoted the policies that government adopted. There was an intense lobbying effort in the late 1990’s by financial institutions that drove deregulation. They led the charge to implement the changes in the law. Governments make policies and regulations based on what is desired by the general public and private entities. In this instance, financial institutions convinced Congress it was in the nation’s best economic interest to “reform” Glass-Steagall. Members of the House and Senate from both sides of the political fence willingly obliged. Without the insistence of the banking industry to make it easier for banks to create “new financial tools”, the mortgage crisis could have been averted. Your major problem is understanding that government policy is dictated in part by marketplace demands. Government does not by itself create policy for the hell of it; these policies reflect the wants and needs of individuals and groups.
It was the banks and brokers who chose to make NINA (no income, no asset) loans because they could make big-time commissions and then pass the risk on to the market. They were free to hold mortgages, bundle them as “investments”, and sell them. They knowingly made bad loans in order to cash in. Banks took advantage of the law they helped to craft and convince Congress to pass through their special interest cronies. Government, in turn, ignored the warning signs that their own auditors pointed out.
Posted by .(JavaScript must be enabled to view this email address) on November 13, 2012 at 2058 hrs
I comprehend perfectly. You infer that government used its influence to unduly lead banks to engage in a desired behavior. Coerce is a synonym for force. Yet, clearly, banks forged ahead on their own accord. They were NOT coerced, forced, or bribed.
Government attempted to force them. Janet Reno and Eric Holder did all they could to make banks do their bidding. Here’s the thing, banks still wouldn’t do it. Bankrupt is bankrupt regardless of how it comes. Clinton put Franklin Raines in to buy up these subprime loans, the bribe, and that did the trick. It was all downhill from there. Loan originators made profit and the taxpayer was on the hook.
Indeed, the source I cited is an opinion
Enough said.
Where have you been, man? To add, it would appear that you are ignorant to how special interests are able to advance legislation.
I repeat, banks don’t make policy. Government does. Of course, there were several politicians involved in this policy they were paid quite handsomely to promote private profit and public risk. Follow the money. Who were the greatest benefactors during the time? Who prevented Bush from reining in the GSE’s?
It was the banks and brokers who chose to make NINA (no income, no asset) loans because they could make big-time commissions and then pass the risk on to the market.
Be specific. They didn’t “pass the risk on to the market”. They originated the loans for the GSE’s. Then, like you said, they got their bribe. Thank you for playing and supporting my position.
Posted by .(JavaScript must be enabled to view this email address) on November 13, 2012 at 2228 hrs
You can call “chicken little”, but smart businesses know when to duck & cover.
Posted by .(JavaScript must be enabled to view this email address) on November 14, 2012 at 0131 hrs
Spock, if you want to be ignorant on how special interests groups influence legislation, be my guest. PEOPLE and GROUPS help to create policy; the government is the vehicle to put that policy into practice.
The purpose for gutting Glass-Steagal was to remove barriers in the market (!) among banking companies, securities companies, and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. The opportunity for poor people to buy homes was a RESULT of the law. The new investment tools created by banks was a RESULT of the law. The passing of risk was a RESULT of the law. Indeed, some banks, the smaller ones, wisely remained on the sidelines.
The larger banks, they were salivating at the opportunity to take advantage of the situation, of the law THEY helped to craft.
Posted by .(JavaScript must be enabled to view this email address) on November 14, 2012 at 2009 hrs
Let me make sure to clarify, the law passed by Congress was NOT created by the government itself; it was created by representatives who represented the interests of their constituents. In this particular instance, the constituents were big banks. Big banks were called in as the experts to develop the provisions of the Financial Services Modernization Act (1999).
A year before the law was passed, Citicorp merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities, and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998.
Less than a year later, FSMA was passed amid heavy lobbying by the financial industry to legalize these types of mergers on a permanent basis.Government did NOT on its own create the components of this law simply to increase the number of poor people to own homes they were unable to afford. Rather, this phenomenon was the result of the financial instruments that the banks could now develop due to the law. Certainly, the government was complicit in encouraging those loans after the law was passed—more homes built, more construction jobs, more property taxes for communities—but banks themselves made the decision to issue those loans, package them as investments, and sell them.
Posted by .(JavaScript must be enabled to view this email address) on November 14, 2012 at 2134 hrs
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