Tough times call for fiscal discipline
West Bend Daily News is online. It’s called, “Tough times call for fiscal discipline.”
Good piece Owen.
The only thing I would disagree with is the bit about
nothing worse than Americans have faced before
I don’t believe this is true for a variety of reasons.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 0953 hrs
I don’t believe this is true for a variety of reasons.
So, you really think now is the worst Americans have ever faced?
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1002 hrs
So, you really think now is the worst Americans have ever faced?
From an economic perspective, yes.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1009 hrs
This is not the worst - not by a long shot. The depression in the 30’s was WAY worse and it was really bad in the mid-late 70’s and early 80’s.
Those were multi-year events - this will be resolved in a few months.
In a year or two the economy will be soaring so high it will make the mid-late 90’s look like a recession.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1009 hrs
this will be resolved in a few months.
Bill, you are delusional.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1011 hrs
For anyone over the age of 78, might not be the worse economic challenge they have ever faced. For others, it might be.
It’s all relative - it has to do with how today’s population is equipped to handle future economic challenges. Do people have an inherent sense of self-sufficiency & self-reliance? Or do they have an attitude of entitlement, that “someone” will take care of them?
A lot of the recovery from the Depression had to do with World War II, the U.S. dominance of the global economy, post-war economic expansion (some of that based on the post-war baby boom), the number of people living in rural areas (my grandparents were farmers & the Depression did not have that huge an impact for them). I’m not sure if any of those factors would come into play today.
I wouldn’t count on the dynamics of 70 years ago to help deal with future economic challenges. There has been what is called a “paradigm shift”.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1025 hrs
Agreed, we are in tough economic times - but certainly not the toughest. Ask your parents or grandparents about that.
Much of it is relative. Look, we all hate paying $3.75 for gas, but we still do it. The cost of everything is going up, which for many people means buying the 46” plasma TV instead of the 50” version.
Kids have more useless toys, video games, clothes, accessories, computer equipment, and other such things than the generation before.
People who earn $50,000 a year actually believe they both deserve and can afford a $300,000 home.
For some people, $10,000 in credit card debt is “acceptable”.
Belt tightening for some means only going out on the town two nights a week, rather than four.
In our day, casserole could feed a large family for two days. Today, casserole has been replaced with a call to the local Pizza Hut. And don’t forget the soda! Kids today need gallons and gallons of soda every week.
Look, I’m a staunch capitalist and believe in the free market and consumerism, but when people point the finger of “greed” at the financial institutions, they don’t realize that their own greed is a contributing factor to much of this.
Thus, it’s no wonder that government wishes to be equally greedy.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1047 hrs
I think the fact that anyone actually believes this is the worst economic period in the history of this country demonstrates how vapid most people are. Talk about a complete lack of historical perspective!
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1206 hrs
On second thought, vapid isn’t the correct word. Clueless, self-centered, delusional, short-sighted, unformed…those are better choices.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1210 hrs
I think the fact that anyone actually believes this is the worst economic period in the history of this country demonstrates how vapid most people are.
Be patient.
Talk about a complete lack of historical perspective!
Please enlighten me?
And why don’t you throw in a little sketch of your vision of our road to recovery?
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1214 hrs
Let’s chat again in a few months pjr and see how many people are even talking about the mortgage mess… which was caused by a) greedy companies that should be out of business for making stupid decisions
b) Congress passing all kinds of stupid laws requiring banks to give loans to people who had no means to pay them back.Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1215 hrs
Really, Bill? What law did Congress pass to require banks to make loans to people who did not have the means to pay them back?
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1218 hrs
Let’s chat again in a few months pjr
It will be a pleasure.
How many months?
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1222 hrs
cynical:I don’t believe this is true for a variety of reasons.
so what is your opinion about it??Posted by Suzuki Fairings on September 23, 2008 at 1228 hrs
pjr, I’ll give you my recovery plan as soon as you can prove that the U.S. economy is worse than it has ever been.
Suzuki, I think it is bad, but nowhere near the worst in history. Heck, I’d even argue it was worse in the late-70s than it is now - high unemployment, out-of-control inflation and a president that didn’t have a clue.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1235 hrs
Federal Deficit
Consumer Debt/Spending
Commodity prices
Projected GDP/GDI
Balance of Trade
Global economic conditions/dynamics
Bloated Money supply
Is that enough micro & macro stuff to work with?
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1249 hrs
Bill said:
Congress passing all kinds of stupid laws requiring banks to give loans to people who had no means to pay them back.
At first, I thought Bill was perverting the Community Reinvestment Act. Many years ago I was on a CRA Citizen Advisory Committee for a local bank branch office (because of my interactions with lower income people via various nonprofit boards/committee activities). Because of my employers banking relationship with a different bank, I participated in a CRA audit survey (we were selected randomly). This was quite a few years ago, and at the time, the CRA requirements seemed pretty benign - seemed like the focus was to make sure that everyone that was qualified for credit & banking services were being treated equally - i.e,, advertising in the local paper versus only in the golf club newsletter, etc. Same applicable underwriting standards, etc.
Anyway, I did a quick check on CRA, and this is one of the things I ran across:
http://www.forbes.com/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html
It is popular to take low lending standards as proof that the free market has failed, that the system that is supposed to reward productive behavior and punish unproductive behavior has failed to do so. Yet this claim ignores that for years irrational lending standards have been forced on lenders by the federal Community Reinvestment Act (CRA) and rewarded (at taxpayers’ expense) by multiple government bodies.
The CRA forces banks to make loans in poor communities, loans that banks may otherwise reject as financially unsound. Under the CRA, banks must convince a set of bureaucracies that they are not engaging in discrimination, a charge that the act encourages any CRA-recognized community group to bring forward. Otherwise, any merger or expansion the banks attempt will likely be denied. /quote]
.........................................................................
The government has promoted bad loans not just through the stick of the CRA but through the carrot of Fannie Mae and Freddie Mac, which purchase, securitize and guarantee loans made by lenders and whose debt is itself implicitly guaranteed by the federal government. This setup created an easy, artificial profit opportunity for lenders to wrap up bundles of subprime loans and sell them to a government-backed buyer whose primary mandate was to “promote homeownership,” not to apply sound lending standards.
Is this what you were referring to, Bill?
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1252 hrs
blah, blah, blah, no proof, blah…
Is that enough micro & macro stuff to work with?
It’s a start. Let’s see your proof.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1253 hrs
cynical,
Here is a question for you.
Would you continue to lend the US consumer money or buy the US gov’s paper given the current and projected economic conditions.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1256 hrs
Let’s see your proof.
Sorry cynical, I don’t see your name on my client list.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1300 hrs
Sorry cynical, I don’t see your name on my client list.
Nor will you ever.
Obviously, you can’t prove your assertion, because it simply isn’t true. Is everything rosy? Of course not, but this is not an insurmountable problem. If you want to play Chicken Little, be my guest.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1410 hrs
So CRA is the answer to my question? I just want to get that straight, as mht answered the question posed to Bill.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1446 hrs
Of course not, but this is not an insurmountable problem.
Did I say insurmountable?
Obviously, you can’t prove your assertion,
Not quite right, I just not going to do your homework for you.
I gave you a list of things that you could take a look at to get a sense of the basis for my perspective.
You are obviously to lazy to do that.
Now if you want to give me some items to reference that are going to give me the basis for your position,
I’ll be happy to do the homework to get a sense of the basis for your perspective.
Seems simple right.
And are you going to answer this simple question,
Would you continue to lend the US consumer money or buy the US gov’s paper given the current and projected economic conditions.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1743 hrs
Owen said,
Tough times call for fiscal discipline.
Indeed. I wish we had a political party that was interested in it.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1748 hrs
I’m asking because if CRA is all you got, you’re way, way off.
Posted by .(JavaScript must be enabled to view this email address) on September 23, 2008 at 1950 hrs
Owen, I hate to disagree with you but I think you’re glossing over a lot here. The bad thing about this situation, this crisis, is that it is complex—so complex that it is not easily condensed into modern news story sound bites, so that most of the people in this nation have no clue whats going on, other than a vague notion of “financial crisis”.
This is a problem caused by aggressive social engineering by the federal government, from Carter to Clinton. However, at this point the funds that have been poisoned by shady lending practices—tranching and re-tranching of MBS and CDOs until nearly everything carried an AAA rating—have been come so prolific that liquidity is essentially gone. We were <—this—> close to having a freeze on commercial paper last week. We almost had a $200Bn run on money market accounts, one of the most stable places for capital in our entire financial system. This is not a “small thing”. This is not the S&L;crisis.
Secondly, don’t bash the Paulson-Bernanke plan yet. For one, the outline proposed pre Democratic meddling is not a bailout. It is an extension of capital in exchange for marked-to-market (worthless and legally nonviable) assets. This allows banks to get the junk off of their balance sheets. It’s like a get-out-of-jail for billions card. This is not a free pass. Banks with a lot of MBS and CDOs are going to lose a ton of money—on top of what they’ve already swallowed. For two, it stands to make the government quite a bit of money as the currently near-worthless BBB or lower rated assets will be sorted out, re-rated and sold on the open market, once federal intervention increases the transparencies of these securities. This is not a permanent Finance Czar, nor is it a $700Bn bailout—yet (we’ll see what Reid et al in the senate tack on to the bill).
And of course people on Wall Street were complicit. These securities didn’t trade themselves, but make no mistake—this crisis is government caused and government raised. The Bush Administration tried no less than seven times to fix this by increasing transparency and regulatory oversight but Chris Dodd and others blocked them at every turn…because this plays right into the “capitalism is a failed system” playbook of liberal fascists.
The current plan is, I think, a good one.
Posted by k2aggie07 on September 23, 2008 at 1952 hrs
Are you serious, aggie? You think that the problem is increasing intervention from Carter to Clinton, and then Bush tried to restore some accountability into the process? That’s the story you’re sticking to?
Posted by .(JavaScript must be enabled to view this email address) on September 24, 2008 at 0702 hrs
Well, Steve-O I would extend the intervention process to include the Fed.
Posted by .(JavaScript must be enabled to view this email address) on September 24, 2008 at 0800 hrs
In our day, casserole could feed a large family for two days. Today, casserole has been replaced with a call to the local Pizza Hut. And don’t forget the soda! Kids today need gallons and gallons of soda every week.
Look, I’m a staunch capitalist and believe in the free market and consumerism, but when people point the finger of “greed” at the financial institutions, they don’t realize that their own greed is a contributing factor to much of this.
I 100% agree.
The “gotta have it now at any cost” attitude is rampant among consumers. The same consumers that decry “greed”. These same consumers that can’t control their own spending and turn around blame their financial woes on credit card debt that they can’t get out fron underneath.
Yes boys and girls, its hard to turn on the television and see people with things you don’t have… But when you start over-spending and living outside of your means cause you JUST CAN’T live without the luxuries out there, please stop crying about how bad things are.
Posted by .(JavaScript must be enabled to view this email address) on September 24, 2008 at 1238 hrs
Interesting
http://elections.foxnews.com/2008/09/24/john-mccain-on-the-economic-crisis/
Posted by .(JavaScript must be enabled to view this email address) on September 24, 2008 at 1439 hrs
I wonder what will actually get done
http://elections.foxnews.com/2008/09/24/mccain-suspends-campaign-to-help-with-bailout/
Posted by .(JavaScript must be enabled to view this email address) on September 24, 2008 at 1459 hrs
Just words that make no sense. The actual content of the page it’s been deforming and now all the opinions a far from the original message.
Posted by Ray Ban 3309 on October 04, 2008 at 2124 hrs
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