If Palin was a man...

[Usonian]

With more time, I'd come down on this like a million-pound sh*thammer. As it is, I'll just say a couple of things. First, you've done a very good job of reciting the history of the Great Depression you've been taught. But it's not true. Both the immediate and deep causes of the 1929 crash were far more rooted in the rising protectionism of the preceding decade and the screwed-up economics of the Treaty of Versailles. Only the very last step in the process was a function of "free markets" -- i.e. the runs on the banks once it was clear that the game was well and truly up. A secondary element of the specific issue of the stock market crash was margin buying, but that would have worked itself out if left alone.

If you want a far, far better analogy than 1929 to the current situation, the "Panic of 1873" is much closer:

http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18

Jumping from "credit crisis" to "unfettered capitalism is bad" is just as simplistic as the caricature of Palin, BTW as a knuckle-dragging moron. Satisfying, but essentially BS.

I was adressing two quite separate points advanced by Spacenut: 1. America should leave markets alone. 2. Poor people taking out loans they couldn't afford is the root cause of the current crisis. I separated those two points graphically

---

and I don't believe I mixed them together at all, except to conclude that economic stability, achieved through government administered "economic medicine," is good - for stocks, banks or other segments of the economy. I used the 1929 crash to illustrate point 1. becuse its the only crash everyone (including myself) can specifically recall.

Taking a very quick look at the Web, I find wide-spread American bank runs occuring in 1819, 1837, 1857, 1873, 1893, 1907 and 1929. (Am I missing any?) Wide-spread American bank runs since the New Deal: None. There must be a reason - 79 years without a wide-spread bank run significantly beats the averages. Even the S&L melt-down of 1989 didn't produce a panic, because of Federally mandated and backed deposit insurance, or so I have been taught.

I am no economist, nor even an amateur student of economic history, so yes, I am repeating the lessons I have been taught. Those lessons conform to the evidence I can see directly (no bank runs in my lifetime) so I accecpt them as true. I am certainly willing to learn new lessons, but I would also certainly regard any lesson that had to be administered with a sh*thammer as carrying no authority whatsoever.

 

[Eagle]

Maybe we just need a small classification attached to loans above a certain size (say $80k). A good old ratio Approximate monthly salary of the person who took the loan/The monthly rate of the loan.

Of course there would be no reason to go beyond 2 decimal points. A ratio near 1 is likely impossible to be paid. A ratio of about 3-5 would be normal (for a mortgage), any above would be a rather safe loan. I would also consider a ratio as an upper bound (the loan is at least as good as the ratio, but no worse).

You could handle adjustable rate mortgages by lowering the ratio if the rate goes up and vice versa.

This should already be done at some level though, need to do more research...

 

[John_L]

Well, in the context of Greg's analogy, the problem here is that the Doctor prescribed the wrong meds in the first place, and waited far too long to do the surgery, so now we're in a triple bypass situation or the economy will suffer (probably to a lesser extent than is being portrayed though).

 

[fort]

Well, in the context of Greg's analogy, the problem here is that the Doctor prescribed the wrong meds in the first place, and waited far too long to do the surgery, so now we're in a triple bypass situation or the economy will suffer (probably to a lesser extent than is being portrayed though).

I would have rather looked at, me, all this like the development and the survival or the disappearance of the species. This one tried its chance but with failed in its adaptation to the medium. It does not disappear. It tries a change.

There is different ones, concurrent. And which knows: it can be will produce a crossing. Or to vanish reciprocally. Except adhering to a certain vision of the world described by the VP of the Republican Party, isn't this as that that that occurs since a long time?

 

[GregBurch]

Taking a very quick look at the Web, I find wide-spread American bank runs occuring in 1819, 1837, 1857, 1873, 1893, 1907 and 1929. (Am I missing any?) Wide-spread American bank runs since the New Deal: None. There must be a reason - 79 years without a wide-spread bank run significantly beats the averages. Even the S&L melt-down of 1989 didn't produce a panic, because of Federally mandated and backed deposit insurance, or so I have been taught.

I am no economist, nor even an amateur student of economic history, so yes, I am repeating the lessons I have been taught. Those lessons conform to the evidence I can see directly (no bank runs in my lifetime) so I accecpt them as true. I am certainly willing to learn new lessons, but I would also certainly regard any lesson that had to be administered with a sh*thammer as carrying no authority whatsoever.

It's a matter of symptoms versus causes. The specific example to which you (and it seems like just about every pundit who can get access to the Web) cited (1929) has almost nothing in common with the current situation in terms of causes. But it's all being lumped together as "market failure," appropriately evil capitalists are identified as the culprits, and we are all invited to the bonfire upon which more economic liberty shall be roasted up and served to the poor victims of unfettered competition.

I'm not criticizing deposit insurance. But the role of government as guarantor of Fannie and Freddie -- an extension of this principle beyond the immediate New Deal prescription for the SYMPTOM of bank runs -- can't be ignored. It's a classic example of the general concept of what is called "moral hazard" in insurance finance theory. It's as if we have a fever, so all the doctors prescribe such massive doses of aspirin that our stomach linings are eaten away and our blood thins so much we start bleeding from our ears.

As with every economic "aid" government offers to the market, it's a good idea only so long as our brilliant public servants have the discipline to apply it very sparingly.

Self-discipline in the use of government programs that can generate campaign contributions from recipient institutions and votes from the electorate .... Naaahhhh ...

 

[Usonian]

It's a matter of symptoms versus causes. The specific example to which you (and it seems like just about every pundit who can get access to the Web) cited (1929) has almost nothing in common with the current situation in terms of causes. But it's all being lumped together as "market failure," appropriately evil capitalists are identified as the culprits, and we are all invited to the bonfire upon which more economic liberty shall be roasted up and served to the poor victims of unfettered competition.

I'm not criticizing deposit insurance. But the role of government as guarantor of Fannie and Freddie -- an extension of this principle beyond the immediate New Deal prescription for the SYMPTOM of bank runs -- can't be ignored. It's a classic example of the general concept of what is called "moral hazard" in insurance finance theory. It's as if we have a fever, so all the doctors prescribe such massive doses of aspirin that our stomach linings are eaten away and our blood thins so much we start bleeding from our ears.

As with every economic "aid" government offers to the market, it's a good idea only so long as our brilliant public servants have the discipline to apply it very sparingly.

Self-discipline in the use of government programs that can generate campaign contributions from recipient institutions and votes from the electorate .... Naaahhhh ...

Now there is a reasoned argument (sh*thammer-free).

The article about the 1873 crash was very interesting and I get the point about the marginal connections between 1929 and the current crisis. (Although, the author doesn't address the plus or minus of corrective government intervention.) Your point about regulatory restraint is also well taken - to stretch the medical analogy, the current effort to save every institution may sink to the unnecessary level of elective face lifts, boob jobs and Viagra.

As for bank runs being only a symptom, viewed from a higher plain, that is certainly so. But for most Americans, their bank deposits and mortgages are ground zero. From most people's perspective, closure of their local bank and loss of their savings and homes would look like the root cause of their economic woes. Since we live in a democracy, and these ordinary citizens have most of the votes, it seems unlikely we will ever return to an unfettered free market. Face it, my Libertarian friend, most people like the protections of big government, especially in the age of Borrow-and-Spend, ushered in by Reagan, when payment for those protections could be deferred. Weaning folks from that childish mindset will be the big challenge of the early 21st century.

And stock up on your blood pressure medicine. Universal health care for America is just over the horizon! Soon, we shall be completely stripped of our freedoms and crushed under the heel of the Nanny State! Just like the impoverished, over-taxed, freedom starved Germans, and Danes, and Dutch, and Swedes, and Australians, and Canadians, and...

 

[fort]

Usonian:

Say to you that among these starved still stays some whose heroism confines can be in the eyes of some with congenital idiocy. I must be one of them.

When our new omniprésident in France, a year and half ago, promised tax cuts to us (in fact it all increased them since...) it was a group ( a gang ? ) of fools 30 or 40000 , including me, which signed a call in which we asked that be privileged, before all, the social credits (health, school, old-age insurance...), even if this were to lead to the same level of tax or its increase.

There are countries whose citizens have strange behaviors not ?

 

[Usonian]

Usonian:

Say to you that among these starved one still finds some whose heroism confines can be with the eyes of some with congenital idiocy. I must be one of them.

When our new omniprésident in France, a year and half ago, promised tax cuts to us (in fact it all increased them since...) it was a band ( a gang ? ) of cretins 30 or 40000 all the same, of which me, which signed a petition in which we asked that be privileged before all the social credits (health, school, old-age insurance...), even if this were to lead to a maintenance of the tax in the state or its increase.

There are countries whose citizens have strange behaviors not ?

I think I understand you. I do not want to give offence by not responding to your posts, but your translation software produces English that I can barely understand. If you are writing this yourself, then I apologize - your English is far better than my French. In fact, I really know only one French word... merde. You may freely apply that word to me if I have offended you!

 

[fort]

In fact, I really know only one French word... merde. You may freely apply that word to me if I have offended you!

Usonian,

Not at all.



I try my best to answer here the people who answer my messages but I do not write, at any time here, on the forum, in the intention to have an answer.

edit

I used a dictionary these last years when I had to seek certain words but I recently installed a translator, that I try to correct as well as possible.

It is not easy... I have sometimes the feeling that it speaks another language that mine.

By the fact i'm pretty sure that it does.

 

[GregBurch]

Meanwhile, over at the New York Times:

Whitewash
​

For a little video that puts the evidence into the perspective in which folks who don't support Obama might view these things, take a minute to looks at this:

[ame="http://www.youtube.com/watch?v=D-45A6I-N5I"]YouTube - Devastating Video, Obama talks about job Ayers gave him[/ame]

Yes, the scary music is corny, but what's the alternative when the NYT is so utterly "in the tank" for the Chicago Kid?

 

[fort]

ar 81,

I stop there.

I'm searching since two days.

I haven't find anything giving to me the possibility to look at Sarah Palin differently except as a person and, a fortiori, wich could construct, in my opinion, charges or something else in terms of sexism ( If, as i suppose, it was, in fine, the question).

My search brings me tonight at this two videos.

But i think that there is nothing to find, once more, in that two case...

I know, there is my English's practice...But...

(Message without translator).

 

[GregBurch]

I haven't find anything giving to me the possibility to look at Sarah Palin differently except as a person and, a fortiori, wich could construct, in my opinion, charges or something else in terms of sexism ( If, as i suppose, it was, in fine, the question).

My search brings me tonight at this two videos.

I'm hopeful my question can get through the language barrier: Have you, personally, ever been in a very high-pressure public speaking situation in which 1) you had very limited time and 2) you wanted to get a specific message across, even if 3) it meant not answering the question that was put to you?

... just curious ...

Because it's hard, even for a smooth talker like The One:

 

[fort]

GregBurch,

My answer is : yes.

 

[joeybigO]

you know I've jad it with all those liars and cheats and theives who call themselves candidates. Quote from the stutterer oh I mean Sarah Palin: "I didn't answer the questions the way the moderator asks. I answered the questions the way the people would have wanted" unquote. Trite crap. If you would have just answered one simple question then the people would have not hammered you. What a louse and what crap. No more, my vote is going elsewhere

 

[Andy44]

Well, when you give straight answers to questions instead of ducking them, you wind up like Ron Paul. Politics is a liars' game.

 

[joeybigO]

Ron Paul was my vote in the primaries. Why can't he be the Veep? My Dad thought me crazy at the time.

 

[David]

Your "blame the poor" analysis of the credit crisis is absurd. There are always two parties to a loan - the borrow and the lender. The lender has the money and therefor has all the power to set the terms of the transaction. In the current situation, lenders knowingly made foolish loans, with the intention of bundling them into security packages for sell to other dupes before the original loans went bad.

[...]

But whether the borrowers were rich or poor they didn't get those loans simply by asking for them - banks offered them. The banks, unlike naive and fooling individuals, could reasonably be expected to know what they were doing. The lenders must bear the majority of the blame for the current mess.

Then again, the lenders can share some of the blame. In the modern scheme of things, there is a third party to a loan - the law. Through the law, governments are supposed to constrain lenders from predatory practices

Well, in fact, the government mandated such "predatory practices." The Community Reinvestment Act (originally passed in 1977) was given considerable attention by the Clinton administration, which promised rigorous "enforcement" of requirements that lending institutions provide loans to "unserved communities."

And then, when various persons complained that the result was that the lending system was becoming problematic, they received a response (from persons such as House Financial Services Committee then-ranking-member Barney Frank) that there was no such problem, and that any such complaints threatened the opportunities for "unserved communities" to get loans.

No doubt, various governmental agents would argue that, well, they certainly didn't mean that lending institutions should behave unreasonably, in granting loans. But of course, that was the whole point, since if the federal government respected the "reasonableness" of lending institutions, in determining to whom they would grant loans, then it wouldn't have thought it desirable to enforce other practices.


I would add that lending institutions are not naturally inclined to making bad home loans (whether expecting to be able to pawn them off on others, or not). When a lender grants a home loan, he wants the money (and interest) repaid; he does not want to repossess the house, since lenders are not generally in the business of managing houses (and neither do I suppose that they are greatly desirous of kicking people out of their homes), and repossessing a house means that the lender must then look after its maintenance, and then find a way to sell it, to get back his money. I don't suppose that a whole lot of lenders were purposefully engaging in a "predatory practice" of offering unrepayable home loans, without the "encouragement" of the government's threatening them with violence, if they didn't.

 

[dougkeenan]

Not being a lawyer, I don't know: How easy is it to become editor of the Harvard Law Review?

 

[joeybigO]

No, but I bet the Harvard Law Review Editor would glady answer any and all questions posed to him, not just try and search for the answers, damn how hard is it to say: I dont know?

Apparently pretty hard...

 

[GregBurch]

Not being a lawyer, I don't know: How easy is it to become editor of the Harvard Law Review?

Not easy. There are two ways -- you can "grade on" or "write on" -- i.e. get into the review by having really, really, really good grades in your first year (just really, really good grades won't do), or you can compete in a pretty rigorous, very short-fuse writing competition, that is judged blindly. Once you're "on the review,' though, being an "editor" is somewhat of a political thing within the hyper-law-nerd crowd that is "on" the review. It's kind of weird, being "on the review" is a very prestigious thing. Then, within that, being an "editor" is like ... I dunno, running for class president of the genius club.

There are actually some metrics for how well an "editor" does his job (in terms of how hard he works) -- I've never checked on Obama's, though.

(Needless to say, although I was on the the Texas Law Review, I was too interested in drinking beer to be an editor. I did publish, though.)