Obama and the economy

[Michael Corleone]

IMO the "loans to high risk areas" is much too low-level. The problems were way above you and your bros who were in the trenches. Lots of good reading out there on CDO/CDS/tranches/etc.

 

My point is that the sub prime market was the basis for the entire mess. When you add in artificially low interest rates, mark to market account, government sponsored agencies, and rating agencies that the government had to approve you have a recipie for .......well what we got.

[Michael Corleone]

One other question I have is what catastrophe did we avoid in Detroit? Is this the GM bailout?

[Hatz]

Why would working wages be lower and prices higher? Business owners can't make a profit off products consumers can't afford.

 

How do monopolies limit the variety of goods and services available to the consumer? Monopolies in a free market mean your business has provided a better product at a cheaper price for the consumer.

 

Home ownership in the single digits? Are we assuming consumers can't afford the expenses or is there no demand for self-ownership?

 

Wouldn't a good picture of Free Market be Industrial Revolution America, say late 19th century to early 20th?

 

Look at the worker's lives then and see if that doesn't give a good picture of a Free Market system. :thumb:

[75center]

Industrial Revolution America would be irrelevant to today's free market models. Production, distribution, communication, labor force issues such as education and mobility, international influences and so many other influences would make it impossible to compare the two.

[BirdsJustWin]

Mostly I can.

 

The government, in 1995, FORCED the large banks to abandon basic, safeguard banking principles and put them at the mercy of political wolves.

 

The Reinvented Community Reinvestment Act

 

"Unlike the original proposal, performance is to be judged in "the context" in which the institution being evaluated operates. Thus, the agencies would take into account the demographics and credit needs of an institution's service area and the banks' product offerings, business strategy, and condition. The introduction of "context" represents a retreat from objectivity and a return to regulatory discretion."

 

I think Clinton laid the foundation of the housing problem with this change.

 

Where Bush let the banks go crazy was with the hedge funds. The SEC became (and still is) very weak. And the derivative mess is a direct result of a rules change under Bush and the basic gambling that has occurred since then.

 

An article that is directly related to the first line of your post:

Obama pushed banks to give subprime loans to Chicago blacks | The Daily Caller

[Bluegrasscard]

An article that is directly related to the first line of your post:

Obama pushed banks to give subprime loans to Chicago blacks | The Daily Caller

 

Yes, 19 of Obamas 186 clients that he sued for still have homes.

 

I think Fannie and Freddie were politicians ways to act like fat cat bankers. Money for nothing...

[Know It All]

Wouldn't a good picture of Free Market be Industrial Revolution America, say late 19th century to early 20th?

 

Look at the worker's lives then and see if that doesn't give a good picture of a Free Market system. :thumb:

 

And how was the living conditions Pre- late 20th century? Between 1865-1900 the average annual income of non-farming workers increased by 75%. By 1918, it rose another 33%. The U.S. worker during this time period saw a higher increase in income than any of their ancestors before them. Living conditions improved substantially as a consequence.

 

This is one of my favorite quotes from another thread:

 

Reply

Phi est aureum replied on Fri, Jun 22 2012 10:01 PM

rated by 0 users

*

 

Unfortunately, there was a huge labor movement fighting for labor reforms including things like safer conditions and an eight hour day that never accomplished their goal until the federal government did something. Workers don't have complete control over what their workplaces are*like. They have to take the work offered to put food on the table.

if enough people really wanted the change, if they all had quit working for employers with conditions they disagreed with, and their was profit to be made in that industry, the employer would have either improved conditions to gain the workers back or been ultimately forced out of business by an entrepreneur that would improve the working conditions, unless there were in fact more people willing to accept the risk in exchange for the wage (but that implies that not enough people wanted the change in the first place.

 

it seems to me that you believe a job is some sort of "right." furthermore, you must believe that this job should provide enough for some arbitrary amount of comfort to purchase some arbitrary amount of goods and services while providing and arbitrary level of protection from risk. You muthe then reject all aspects of the free market, because you would need to force food, clothes, shelter, etc. to be produced and sold at prices low enough to meet your arbitrary thresholds of this fundamental "right."*

 

employment is not a right. the reasoning is that you only wish everyone had a job so they could buy things, like food. but that's too vague, and ignores the fact that risk always exists. There is no guarantee that there won't be a drought and all food from some large region will be wiped out. and if it does, the unfortunate people affected have no right to force someone to ship and sell them food, at arbitrarily "low enough" prices. No different than a bear that moves to a different region from other bears and unfortunately went to a habitat with no food has no right to expect all other bears to come provide him with sustenance. He took the risk, and he will either be rewarded with plenty or be worse off.*

 

The choice is your own, the risk is your own, the consequences are your own. This doesn't mean others aren't free to voluntarily choose to help, ie charity. They don't have a right to coerce a business owner.*

 

The right to life is not a right to be kept alive through the coercion of others

 

The only one worth following is the one who leads... not the one who pulls; for it is not the direction that condemns the puller, it is the rope that he holds.

[Bluegrasscard]

Wouldn't a good picture of Free Market be Industrial Revolution America, say late 19th century to early 20th?

 

Look at the worker's lives then and see if that doesn't give a good picture of a Free Market system. :thumb:

 

What system has worked better?

 

Mr. Friedman says none in recorded history at the 1:00 mark below.

 

[Hatz]

Industrial Revolution America would be irrelevant to today's free market models. Production, distribution, communication, labor force issues such as education and mobility, international influences and so many other influences would make it impossible to compare the two.

 

In what way? If the market is free then those with enough means will tend to make the most money possible while paying out the least money possible, correct. (Not seeking here to evaluate with a moral lens) If there are no limitations on the free market (child labor laws, minimum wage, etc) then can't those with enough means simply control society as once before? I think philosophically speaking that was free market at it's most free (particularly when the government helped control labor for the people with means.

 

You are probably right 75, but just as many have little trust of the government in these matters, I too have little trust in many of the ones who sit at the top of corporate society as well.

[BigGreenHorse]

Sounds like more Republican Reagan "Voo Doo Economics." We could solve it all if Mitt would just loan the Government all the money he has stashed in offshore accounts.

[Hatz]

And how was the living conditions Pre- late 20th century? Between 1865-1900 the average annual income of non-farming workers increased by 75%. By 1918, it rose another 33%. The U.S. worker during this time period saw a higher increase in income than any of their ancestors before them. Living conditions improved substantially as a consequence.

 

This is one of my favorite quotes from another thread:

 

Was it that rosey? You didn't give a link or cite a source but I'll take your word on your stats. However stats can be misleading.

 

What impact did industrialization have on American society?

 

· Raised the overall standard of living for most people

 

· Created sharper economic divisions between the rich, the middle class, and the poor

 

· By the 1890’s 10% of the US population controlled 9/10’s of the nation’s wealth

 

· The expanding middle class

 

o Large corporations required white-collar workers: salaried employees whose jobs did not involve manual labor

 

o Middle management, accountants, clerical workers and sales people

 

o Increases in the number of “good-paying” jobs increased the income of the middle class and consumer consumption

 

· Wage earners or working-class families

 

o By 1900 2/3 of Americans worked for hourly wages at jobs that required 10 hour days, six days a week

 

o Wages were determined by the demand for workers and the available supply of workers

 

o High immigration in the late 1800’s helped keep factory wages low

 

o David Ricardo’s “iron law of wages”

 

· Used to justify low factory wages

 

· Arbitrarily raising wages would attract more workers, increasing the supply of workers

 

· An increased in the supply of workers would cause wages to fall even lower creating a cycle of misery and starvation

 

o Most working-class families could not survive on one income leading to women taking factory jobs and child labor

 

o Women in the workforce

 

· Most women who worked in factories were young and unmarried

 

· Only 5% of married women worked outside the home

 

· Women’s factory jobs were usually restricted to industries that were seen as extensions of the home: textile, garment and food-processing industries

 

· As the demand for clerical work increased women moved into roles as secretaries, book-keepers, typists, and telephone operators

 

· Occupations that became feminized usually lost status and received lower wages

 

 

The Rise of Industrial America 1865-1900

 

Please note the bolded. I'm certain that anyone can increase their income significantly when they work 10 hour+ days and 6 days a week or they lose their job.

[75center]

In what way? If the market is free then those with enough means will tend to make the most money possible while paying out the least money possible, correct. (Not seeking here to evaluate with a moral lens) If there are no limitations on the free market (child labor laws, minimum wage, etc) then can't those with enough means simply control society as once before? I think philosophically speaking that was free market at it's most free (particularly when the government helped control labor for the people with means.

 

You are probably right 75, but just as many have little trust of the government in these matters, I too have little trust in many of the ones who sit at the top of corporate society as well.

 

Not sure what you're asking when you ask in what way. Some of the people running corporate America may attempt what you fear but other factors in today's society offset it, including the handful I mentioned. Obviously there might be pockets that would simulate the past but overall it would not be duplicated.

[Hatz]

Not sure what you're asking when you ask in what way. Some of the people running corporate America may attempt what you fear but other factors in today's society offset it, including the handful I mentioned. Obviously there might be pockets that would simulate the past but overall it would not be duplicated.

 

I see. I was asking in what way would the two eras not be comparable. You've given me your answer and I think you for that.

[Know It All]

By 1900 2/3 of Americans worked for hourly wages at jobs that required 10 hour days, six days a week.

 

What's your point? That's a decrease from the amount of hours worked by farmers and the self-employed in the earlyish 19th century.

[2 Humped Camel]

More Good news:

 

The rally was broad, with more than three-fourths of stocks listed on both the New York Stock Exchange and Nasdaq ending higher. Materials, financials and industrials - groups tied to the pace of economic growth - led with gains of more than 2 percent, giving the Dow index its biggest daily gain in two months and helping the Nasdaq advance to its highest since 2000.

 

Wall Street closes at multi-year highs on ECB, data | Reuters