Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktOne of the ongoing themes here at ATiM as well as in the wider media, and perhaps a motivating factor for the otherwise aimless and inexplicable happening (event? movement? protest?…what the hell is it, anyway?) known as Occupy Wall Street is that while the finance industry got saved by taxpayers during the financial crisis of 2008, the average person….the 99% in the lingo of the OWS crowd…was left on the outside looking in. Unemployment remains high, housing prices remain low, and the economy is growing at a glacial pace, leading many to resent the bailout of banks (along with, as never seems to be mentioned, insurance companies, car manufacturers and, of course, quasi-government agencies) and to pose the rhetorical question: While Wall Street was getting bailed out, what did Main Street get?
Well, allow me to point out what it got. Or, more accurately, gets.
Earlier today I posted a comment pointing out just how much gets spent on “Main Street” every year. But even the huge dollar numbers don’t do justice to the sheer number of federal programs aimed at providing aid to the self-declared 99%. Consider the following, not at all comprehensive, list, headed by the government department tasked with administering the aid.
Agriculture Management Assistance Program
Business and Industrial Guaranteed Loan Program
Child and Adult Care Food Program
Commodity Marketing Assistance Loans and Loan Deficiency Payments
Commodity Supplemental Food Program
Crop Insurance Program
Dairy Indemnity Program
Disaster Supplemental Nutrition Assistance Program (Florida only)
Emergency Conservation Program for Agricultural Producers
Emergency Farm Loans Program
Emergency Food Assistance Program
Farm Operating Loans Program
Farm Ownership Loans Program
Farm Storage Facility Loans Program
Noninsured Crop Disaster Assistance Program
Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers Competitive Grants Program
Rural Housing Loans Program
Farm Labor Housing Loans and Grants Program
Housing Repair Loans and Grants Program
Rural Rental Assistance Program
Rural Rental Housing Program
School Lunch and Breakfast Program
Senior Farmers Market Nutrition Program
Special Milk Program
Special Supplemental Program for Women, Infants, and Children (WIC) Program
Summer Food Service Program
Supplemental Nutrition Assistance Program
WIC Farmers’ Market Nutrition Program
Advanced Placement Test Fee Program
Byrd Honors Scholarships
Child Care Access Means Parents in School Program
Early Intervention Program for Infants and Toddlers with Disabilities
Education Consolidation Loans
Federal Pell Grants
Federal Perkins Loan Program
Federal Supplemental Educational Opportunity Grants
Federal Work Study
Graduate Assistance in Areas of National Need
Jacob K. Javits Fellowship Program
PLUS Parent Loan
Stafford Loans for Students
TRIO Student Support Services
Department of Health and Human Services
Advanced Education Nursing Traineeships
Assets for Independence Program
Child Care and Development Fund
Clinical Research Loan Repayment Program
Community Food Nutrition Program
Consolidated Health Centers
Contraception and Infertility Research Loan Repayment Program
Disaster Assistance for Older Americans
General Research Loan Repayment Program
Head Start and Early Head Start
Health Disparities Research Loan Repayment Program
Health Professional Scholarship Program
Immunization Grants
Low Income Home Energy Assistance Program
Medicaid Program
Medicare Program
National Health Service Corps Loan Repayment Program
National Health Service Corp Scholarship Program
National Research Service Awards
National Vaccine Injury Compensation Program
Nursing Education Loan Repayment Program
Pediatric Research Loan Repayment Program
Prescription Drug and Other Assistance Programs
Preventive Health and Health Services Block Grant
Social Services Block Grant
State Children’s Health Insurance Program
Temporary Assistance for Needy Families
Undergraduate Scholarship Program for Individuals from Disadvantaged Backgrounds
Department of Housing and Urban Development
Adjustable Rate Mortgage Insurance
Basic FHA Insured Home Mortgage
Combination Mortgage Insurance for Manufactured Home and Lot
Doctoral Dissertation Research Grants
Early Doctoral Student Research Grants
HUD Public Housing Program
Home Equity Conversion Mortgages
Home Rehabilitation Mortgage Insurance
Manufactured Home Loan Insurance
Property Improvement Loan Insurance
Mortgage Insurance for Disaster Victims
Disaster Unemployment Insurance
Dislocated Worker Program
EBSA COBRA Premium Assistance
Health Coverage Tax Credit
Longshore and Harbor Workers Compensation
National Emergency Grants
Unemployment Insurance
7a Small Business Loan
Business Physical Disaster Loans
Certified Development Company Loan Program
Economic Injury Disaster Loans
Small Business Investment Company Program
Home and Property Disaster Loans
Microloan Program
Social Security Administration
Child’s Insurance Benefits
Disability Benefits
Disabled Surviving Divorced Spouse Benefits
Disabled Widow(er)’s Insurance Benefits
Divorced Spouse Benefits
Independently Entitled Divorced Spouse’s Benefits
SS Medicare Program
Mother’s or Father’s Insurance Benefits
Parent’s Insurance Benefits
Retirement Insurance Benefits
Spouse’s Insurance Benefits
Surviving Divorced Spouse Benefits
Widow(er)’s benefits
Supplemental Security Income
Again, as long as this list may appear, it is not comprehensive. And note that, unlike the Wall Street bailouts, these are not one-off programs. They are on-going benefits with annual budgets, year after year. Note also that few of these benefits are available to the demonized 1% that the OWSers are making such a fuss about. Perhaps the 1% ought to think about Occupying Main Street.
Instead of joining Occupy Main Street, I’m going to join this movement:
Filed under: Uncategorized |
All Things in Moderation 
That's all? No wonder they're protesting!I have an amorphous theory that a great deal of what happens in politics (and fashion, and consumer trends) happens at a macro-level, where we all feel specific (or sometimes non-specific) motivations and rationales, but are perhaps explaining rationally motivations and tendencies that are manifesting at the limbic level . . . I don't know, don't have anything substantial to go on, but I wonder if much of OWS is just a response to the consistent musing that liberals needed their own Tea Party–or just the existence of a Tea Party. "If the western tribes can get together and have a party, why can't the eastern tribes do the same?"My experience has informed me that protesters enjoy protesting, that being part of a movement can not only feel good but can be a transcendent experience, that there are many rewards for the young and old protestor alike (beyond the boost to the ego and the endorphin rush) and, frankly, if you don't like things and don't know what else to do, the whole protesting things feels like you are at least doing something. I don't think many of them have an idea of just how many government entitlement programs there are, nor do I think there's some kind of critical number of entitlement programs after which they'd say: "Well, that's an awful lot of government assistance from our limited tax base. Let's go home!"Things like OWS are difficult to force, no matter how much some folks would like to spend their lives in that state of being part of a generational movement. Once it's got momentum, there are folks who are going to want to keep it going on as long as possible–irrespective of anything else. I understand that attraction of protesting. I even understand feeling like things are out of whack, and having no idea what to do, so why not blame other people. I even understand the idea that the big banks got bailed out and the people largely responsible for the crisis kept cushy jobs and fat bonuses. (What, only a few hundred thousand this year instead of 20 million? Cry me a river). But . . . this open-ended amorphous protesting seems mostly an excuse to get together with like-minded folks, bitch about how bad things are, and yell at bagel vendors and take the occasional dump on a police car. Of course that last bit may be more a function of the kind of people you're inevitably going to attract when your main protests are in huge urban centers.
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"Perhaps the 1% ought to think about Occupying Main Street."Most of the programs are for protecting the poor from having insufficient funds for food or shelter, to give lower class people an access to education or prenatal care they might otherwise not have, etc. They are all (even if some of them may overshoot their mandate) there ostensibly to give folks of limited means assistance to avoid utter destitution, and give them some limited access to education and other resources they otherwise could not afford.None of the folks in the top 50%, much less the top 1%, really have that problem, so I can understand why they don't feel compelled to Occupy Main Street. Besides, the wealthy have so many more options for partying and getting laid and hooking up with drugs, an OWS style protest probably has very little appeal. Haven't you ever watched The Kardashians? 😉
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Kevin:Most of the programs are for protecting the poor from having insufficient funds for food or shelter, to give lower class people an access to education or prenatal care they might otherwise not have, etc.In terms of number of programs (which, admittedly, was the point of the post above) that is probably true. But I am not sure it is true in terms of $$ paid. College aid, for example, doesn't just go to poor people, nor does a lot of education money spent by the Feds. Nor does SS, or Medicare, or unemployment benefits.Haven't you ever watched The Kardashians?Regrettably, no. Not when there are far more mentally stimulating shows on like Say Yes to the Dress.
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Rich people are too busy making money to occupy Main Street, and also too used to comfortable surroundings to sleep in tents for weeks at a time. Maybe they'd occupy a luxury hotel or a Morton's, but I doubt they'd occupy Main Street. 😉
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Scott, SS and unemployment benefits and Medicare are available to the 1%, although presumably the 1% would have other sources of income in terms of interest, etc., even if unemployed, so would not qualify to receive benefits (but then, again, the point is to provide income to folks who, having lost their job, have no other source of income). On the whole, I don't think need to look with envy or protest at the bottom 99%."Regrettably, no. Not when there are far more mentally stimulating shows on like Say Yes to the Dress."So, you're married as well. ;)I crack wise. My wife is tired of reality shows that don't have to do with food or travel. So unless it's Andrew Zimmerman or Anthony Bourdain (sp?), we don't watch. BTW: Occupy Mordor. So perfect. So very perfect. "Because one ring should not be allowed to rule them all." Love it!
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OWS is primarily a manifestation of some decades of a media, political, and educational system that promotes grievance and entitlement mentalities, nurses resentment and blame, scorns responsibility and work and merit, tells people that all their problems and responsibility for fixing them lie with amorphous oppressors and systemic unfairness — all a network of appeals to the basest instincts. It's not really complicated. Transcendent experience? Please. Let people tell me I'm strident and unfair. These people don't speak for 99%. They don't speak for 50%. I doubt they speak for 10%.
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"Maybe they'd occupy a luxury hotel or a Morton's, but I doubt they'd occupy Main Street."As I noted, they have access to many, many more options for their endorphin rushes and inflated sense of self esteem. OWS and Tea Parties are venues for the rest of us to Party with a Purpose.
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ashot:Maybe they'd occupy a luxury hotel or a Morton's, but I doubt they'd occupy Main Street. 😉 Funny you say that. I didn't catch the whole thing, but this morning on CNBC they were showing a clip of someone (didn't catch who it was) in a tux giving a speech in which he made a joke, thanking the presumably high-paying attendees for "occupying the Waldorf".
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Kevin:So, you're married as well.Yup, and three daughters as well. It's the youngest who is obsessed with Say Yes to the Dress, which I am tempted to call one of the dumbest shows on television, but I know it is in fact probably only in the middle of the pack.
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This is what every self-respecting billionaire needs at a protest. Earlier this year, the latest salvo was fired by the venerable bath fixtures manufacturer Kohler. It produced a new toilet, the Numi. The Numi features a touch-screen remote control. The Numi washes and dries its user. The Numi costs $6,400, or 81 times the price of the basic throne at Home Depot.
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qb:Let people tell me I'm strident and unfair. OK. You are strident and unfair.(But absolutely right.)
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lms:The Numi washes and dries its user.I'm not sure I really want to know.
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"OWS is primarily a manifestation of some decades of a media, political, and educational system that promotes grievance and entitlement mentalities"I think it manifests (including the promotion) from natural, hardwired inclinations (including the very positive human compulsion to find a more efficient way to achieve a goal–unfortunately, the most efficient way to achieve something often appears to be to take it from someone else, and, of course, history is replete with that being a very common method of achievement). Water finds it's own level–resentment and grievance mentalities are like weeds. They are what happens naturally if individuals and societies don't feed and water and clean their own cultural and mental gardens. Which is not to say every grievance is unfounded. I have a hard time thinking of a belief in entitlement that is well-founded, but perhaps there is one. Still, even if you have legitimate grievances, those grievances are still weeds in a garden, and should be fought, not nurtured. In my opinion, it;s much better to work actively to do something productive in your own life (and there is always something productive you could be doing), rather than focusing on whose to blame and who you can make a bad guy in a given situation. Most of us have had run-ins with people who did us wrong. Was any of the time spent nursing a grudge, revenge fantasies, or waiting for the schadenfreude actually time well spent? For example, the Winklevoss twins, who sued Zuckerberg and Facebook and eventually won millions for essentially doing nothing–when, if they were in fact the brains behind Facebook, they could have spent their time doing something productive, and coming up with the Next Big Thing rather than suing Facebook, and then settling for millions, and then suing again. Imagine all the OWS folks getting together and starting a Barefoot University or a communal farm project or just getting together and petitioning the city to legally garden in some empty lots or clean up some abandoned building. Or if they started some sort of business that provided a useful service or made something of some kind. In the long run, that would be the sort of thing that would likely make a more productive difference. Not that it's not useful to discourage large banks from taking too many risks and getting over-leveraged or making "predatory" loans (or, as I prefer to call them, "idiotic, doomed-to-forfeit" loans). Not sure OWS is going to do that . . . "These people don't speak for 99%. They don't speak for 50%. I doubt they speak for 10%."I suspect the OWS people speak for about 34% (number of Americans in one poll that identified as liberal) to 47% (number of Americans in the same poll who identified themselves as Democrats). Nobody speaks for 99% of people on anything.BTW: "Transcendent experience" is what people who feel they are part of a legitimate movement and a historic moment in time would call it (often), and it may be, for them personally. Irrespective of it's actual relevance to the forward march of history.
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"…unlike the Wall Street bailouts, these are not one-off programs."On the one hand, this strikes me as part of a good defense of the bailouts, i.e., that the bailouts were necessary to avoid dire consequences and that bailouts will not be a continuing drain on resources.On the other hand, this strikes me as a promisory note, i.e., it was necessary to bail out these institutions, but that won't be a problem going forward, a promisory note that isn't very convincing.
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lmsinca: you don't have to be a billionaire to pay $6,400 for a toilet. Given the average price of a jacuzzi tub, in America, .6% of people living below the poverty line could potentially afford a $6,400 toilet. 😉 Lots of every average people with very little in assets have spent $6,400 on a laptop or desktop computer. I know this from experience. 😉
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Simon Johnson points to this: "More than three years after the crisis and the accompanying bailouts, the six largest American financial institutions are significantly bigger than they were before the crisis, having been encouraged to snap up Bear Stearns and other competitors at bargain prices. These banks now have assets worth over 66 percent of gross domestic product — at least $9.4 trillion, up from 20 percent of G.D.P. in the 1990s. There is no evidence that institutions of this size add sufficient value to offset the systemic risk they pose."
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In financial news this is pretty interesting as well. The speculation is that this ends the SEC's commitment to investigate this kind of past behavior.It’s worth reading the full SEC complaint in the case which was settled by Citigroup yesterday for $285 million. For anybody familiar with Goldman’s Abacus deal, it all rings very familiar; in fact, the wording on the Abacus sign can be applied perfectly accurately to Class V Funding III. It’s worth rehearsing in full: It’s wrong to create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn’t aware that you sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon.The loans in this case — just like in the Abacus case — were “synthetic”, or made up of credit default swaps rather than actual loans. Wall Street, at the time this deal was done, had run out of actual loans to securitize, and so was forced to create such things by inventing ever more complex transactions. This one, for instance, is a hybrid CDO-squared: it’s a CDO made up mostly of CDSs written on the mezzanine tranches of other CDOs.Citigroup had two aims when it structured this transaction; one was fully disclosed to its client-investors, and the other was not. The first was to make millions of dollars — $34 million, to be precise — in fees. The second was to put on a $500 million short position in the CDO market. Citi was a big trader in CDSs on CDOs, and therefore could simply have acquired that short position directly, in the open market. But when Class V Funding III was put together, such protection was already very expensive. And the CDOs that Citi wanted to buy protection on were known in the market to be particularly horrible. Probably, it couldn’t buy protection on those particular names at all. And if it could, the price would be prohibitive.
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"It’s wrong to create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn’t aware that you sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon."Well, couldn't they be excused for just being over-optimistic, and thinking that, with so much money coming to them, things would just magically work out somehow? I know that's what I'd think. "Man, if we're making this much money on this, it *has* to be good!"
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Kevin, I think everyone who rents or sells a home to someone making less than $50K really should take the air conditioner and the jacuzzi tub with them. They should be movable parts like a fridge.
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"More than three years after the crisis and the accompanying bailouts, the six largest American financial institutions are significantly bigger than they were before the crisis,"Am I the only one who considers this insane? And let's recall the self-help definition of insanity: doing the same thing (or even doubling down) and except different or better results.
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Nathaniel:…that bailouts will not be a continuing drain on resources.In fact the bank bailouts were not much of a drain at all. According to the treasury, $245 billlion was injected (invested?) in banks via TARP, and it has since recouped $243 billion from those banks.…a promisory note that isn't very convincing. Why isn't it convincing?
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"Kevin, I think everyone who rents or sells a home to someone making less than $50K really should take the air conditioner and the jacuzzi tub with them. They should be movable parts like a fridge."Most people I've known who have owned Jacuzzis (not all, but most) have, in fact, not actually wanted to take them with them.I bet they'd feel the same way about $6,400 commode. It might sound good at first, but who wants to have to repair and maintaing electronics on their toilet? And who do you call? What a pain in the rear. So to speak.
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"…a promisory note that isn't very convincing. Why isn't it convincing?"What about it is convincing? The remaining banks that were too big to fail are now too bigger to fail, there is little but good will and earned wisdom to prevent the same sorts of things from happening again (and such wisdom, like water, evaporates over time). What, exactly, will prevent these huge banks from getting themselves into a position that they need to be bailed out again? Because if there's something, I confess, I'm missing it.
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What's to prevent another AIG? Anything?
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And Joe Biden takes a beating from the fact checkers.Joe Biden falsely claimed on multiple occasions that the number of reported rapes in Flint, Mich., has skyrocketed since 2008 — providing different accounts at different events that do not square with FBI data. He started at a 152 percent increase, and since then has said rapes in Flint have tripled and even “quadrupled.” But FBI data show the number of rapes in Flint has gone down 11 percent, from 103 in 2008 to 92 in 2010.Biden also said the city’s murder rate has “tripled.” The city says there were a record-high 66 murders last year — double, not triple, the 32 murders that occurred in 2008.
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"In fact the bank bailouts were not much of a drain at all. According to the treasury, $245 billlion was injected (invested?) in banks via TARP, and it has since recouped $243 billion from those banks."A much better investment than, say, Iraq.
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Kevin, that was my little joke of the morning, well the second one after the toilet. Most homes didn't have air conditioners installed by builders until the 70's and typically they come with the home when you rent or buy. If air conditioning is a metric of wealth, take it with you.
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"And Joe Biden takes a beating from the fact checkers."Far be it for me to defend Uncle Joe, but is it possible that he was referring to per capita? But I doubt even that would make sense, although hasn't the population of Michigan decreased from 2009 to 2010?Still, double the murder rate doesn't look good, and might be partially due to a lack of first responders. Given that, nationally, violent crime is down, when you're an outlier like Flint (or, for that matter, Memphis, the Detroit of Tennessee), it's not a good sign.
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Kevin:And let's recall the self-help definition of insanity: doing the same thing (or even doubling down) and except different or better results. Our economic troubles were not caused by the size of our biggest banks. They were caused by the bursting of an asset bubble in the housing market. That bubble is not being reinflated, so we are not doing the same thing as before.
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Kevin:What's to prevent another AIG? Anything? Yes. The absence of a housing bubble, for one. Also, many derivative contracts are now being cleared through an exchange which has signficant excess margin requirements, making the contracts more expensive to maintain, but mitigating the risk that the failure of a single market participant will cascade into a liquidity crisis for the whole market.
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Here's a pretty decent chart depicting taxes as a share of Federal revenue since 1950.Over the 58 years preceding the Lesser Depression, the share of federal revenues that came from individual income taxes has remained fairly stable, fluctuating between 40 and 50 percent, and peaking just before George W. Bush slashed rates in 2001.The rest has come from corporate income taxes, payroll taxes, and various other taxes. To a surprising extent, the story of the last six decades is one of a shrinking burden on big business, and a growing burden on workers — the bulk of the "47 percent". Since 1950, regressive payroll taxes have grown to comprise over one-third of federal revenues — they used to comprise about one-tenth. For corporate income taxes, it's just the opposite — what used to provide the Treasury over a quarter of its revenue now provides just over 10 percent.Income taxes, both corporate and individual, provide "general revenue" — money that the government spends on most federal programs. Payroll taxes, by contrast, are dedicated to financing Medicare and Social Security, both of which have grown considerably as a share of national expenditures in past decades. Indeed, prior to 1965, there was no Medicare, and the payroll tax's share of revenue has grown since to reflect that. But to a wage-earner's annual bottom line, that makes no difference.
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"Kevin, that was my little joke of the morning, well the second one after the toilet. Most homes didn't have air conditioners installed by builders until the 70's and typically they come with the home when you rent or buy. If air conditioning is a metric of wealth, take it with you."My tongue is always in my cheek. I appreciate the toilet humor. ;)But part of what determines quality of life is access to the benefits of a wealthy society. If the only metric of the quality of my life is the money in my wallet, my life mostly sucks, but that's not the full story. If we discount the huge improvements in something like air conditioning (which is a lifesaver for many) because it's not a portable asset . . well, that's like saying people living in bigger houses have the same quality of life as someone living in a dirt-floored shack because previous owners don't take the walls with them (to me).Independent of improvements in my wage over that of my father or my father's father, I still have air conditioning, and enjoy the benefits thereof. I still have a refrigerator and, apparently, could even have a second refrigerator (which implies a need to store food which I apparently have access to).Even if I live beneath the poverty line, I'm likely to have a VCR or a DVD player, cable or satellite TV, hot water (that is also sanitary) . . . at what point to I start to appreciate any of that? I dunno. Not trying to be flip (that's hard for me, I've got issues) but I see the real improvements in quality of life as an important context, for multiple reasons. But, yes, things could always be better than they are now, if if they are better than they were then.
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"If air conditioning is a metric of wealth, take it with you"No, don't do that. just what I do. make the toilet and the air conditioner coin operated. You must Pay the Rent!!
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"Indeed, prior to 1965, there was no Medicare, and the payroll tax's share of revenue has grown since to reflect that. But to a wage-earner's annual bottom line, that makes no difference."The same could be said of mandates to buy car insurance or any modern need. Medicare is a mandatory single-payer healthcare insurance program for our "golden years". Such mandates, however implemented, impact the workers bottom line but aren't really the same as raising their income taxes to increase general revenue, as their Medicare participation comes with a specific benefit to be collected upon at retirement. As does SS. Payroll taxes are forms of mandatory participation in defined benefit plans that will eventually return something to you. I work for a public school system. All public employees in the state of TN have a mandatory participation obligation in the state pension. This decreases my bottom line, but I get everything back if I quit or lose my job pre-retirement (supposedly), and, if I reach retirement, I get a nice stipend to supplement my Social Security. This is not the same thing as my income tax, which goes to fund defense, entitlement programs, and government administration. Sometimes things break and I have to buy stuff to repair them. I suppose I have a choice, but really, I don't, if I want to maintain any kind of life. It's not much different than the choice I have about payroll taxes: if I don't want to pay them, I don't have to earn an income. But that's not really a choice.
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"If air conditioning is a metric of wealth, take it with you."I kind of like that retort. But leaving the air conditioner there lets you charge more in rent, or list a higher sale price. It's probably a luxury most people could live without, particularly the poor people Kevin appears to be scolding, and I'm guessing that they would happily pay $20 less a rent in month or whatever if that were an option. Beside, one of the reasons poor people poor is because they make poor decisions with their money. Whether they use their money for air conditioners or electronic toilets, they still make $X every year so that seems an odd way to attack someone as not really being poor. The better thing to attack, and I have seen this criticism made here, is the level the government sets as being poor and the failure of poverty statistics to take into account programs like the numerous ScottC listed in this post. I wish I still had some of my college financial aid statements to look at so I could determine, but if I look at how much my school cost and how much I ended up borrowing, I probably had about $3,000-5,000 in money from the government I didn't have to pay back along with the interest I saved on the $10,000 I borrowed a year but the interest didn't start until after I graduated.
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Kevin:there is little but good will and earned wisdom to prevent the same sorts of things from happening again How could it ever be any different? The government is the government, and so is always…always…in a position to create legislation and incentives that can result in unfortunate consequences. Yes, the government could again establish policies or agencies encouraging home lending to people who cannot afford to pay back the loans, thus encouraging and enabling irresponsible lending practices. And the Fed could again maintain interest rates at a level which creates an economic bubble in the economy. All we have is good will and earned wisdom to ensure that they won't.
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It’s wrong to create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn’t aware that you sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon.This quote was derived from a blog post by Conor Friedersdorf, who also advocates that the TEA party and OWS cooperate on their common ground.Conor's quoteWhy the Tea Party and OWS should cooperateConor talks about Lessig and Gary Johnson reaching out to OWSOh, hey, look. My own little link dump!
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"The better thing to attack, and I have seen this criticism made here, is the level the government sets as being poor and the failure of poverty statistics"I've seen some white papers on stuff like that. Kind of, we need to justify our budget, so let's create more poor people by re-defining poverty. think it was passed around during my last "league of evil meeting"
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Which is not an attack on the 47%. Characterizing the 47% as free-loaders while they in fact provide revenues to pay current SS and Medicare benefits, many of whom are Republicans and/or conservatives, is a bunch of class warfare style crap and exactly the sort of stuff that alienated my from the Democrats and the left, lo so many years ago.That folks who make $16k a year don't pay income taxes (although they do pay SS and Medicare and sales tax and . . . ) is not a deep economic problem. How about large corporations who do billions of dollars in business in America, but pay little or no corporate taxes here (but do pay them in other countries throughout the world, meaning we are, in essence, subsidizing these other countries indirectly). BTW: going back to the Clinton tax rates. Government revenues were 45% or thereabouts individual income tax in the early 1990s. About the same in or a little less in the 1950s and 1960s. And . . . that's about where they are now. If there's something causative rather than correlative about individual tax receipts, we should be doing as well now as we were in 1995.
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mike — I saw a Ron Paul sign at the McPherson square Occupy DC protest this morning.
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"How could it ever be any different? The government is the government, and so is always…always…in a position to create legislation and incentives that can result in unfortunate consequences. Yes, the government could again establish policies or agencies encouraging home lending to people who cannot afford to pay back the loans, thus encouraging and enabling irresponsible lending practices. And the Fed could again maintain interest rates at a level which creates an economic bubble in the economy."Well, for starters, we could have avoided encouraging bank mergers to create even bigger banks when we had apparently identified Too Big as a problem. Limitations on leverage levels. Etc. But again, I do not know: what have we actually done to prevent the same sort of thing from happening again? I mean, laws can be passed. Fannie and Freddie could have gotten out of the business of encouraging bad loans. Etc. I don't think it's impossible to do something, regulatory or otherwise, to make the sort of problems we faced less likely to happen. And I think that regulatory framework might ought to encompass both government and private reforms. Maybe. But the one thing I don't buy is that nothing can be done. And, if anything has been done, I'm still not entirely clear on what that is. Thus, the whole lack of confidence that all this won't happen again, and sooner rather than later.
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"particularly the poor people Kevin appears to be scolding"Darn those poor people for taking my air conditioning! And potentially living in a place with an expensive toilet, despite being poor!I hope I don't sound like I'm scolding. I'd really prefer to sound like Mickey Rooney: "Come on, gang! We'll get together and have this old barn fixed up in no time. Then we'll put on a show!"
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lms:re the Citigroup settlementI wonder why no one has bothered to ask the victim of Citi's alleged fraud what in the world they were doing selling CDO squared protection on a bunch of mortgages that, apparently, they were incapable of analyzing themselves. I don't know who the victim was, but I doubt it was some naive investor who was talked into the trade. It was likely a sophisticated investor who should have known better. I'm not going to defend Citi's behavior (not least because I don't know exacty what it was) but to use the favored casino metaphor, it is tough for me to feel too sorry for someone who walks up to the craps table and bets all his money without even taking the time to understand the rules of the game.
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"The government is the government, and so is always…always…in a position to create legislation and incentives that can result in unfortunate consequences."I think, and Kevin can correct me if I'm wrong, the concern is less with the various incentives and more about the fact that these institutions are still "too big to fail" so Wall Street can forge ahead knowing that ultimately someone will save them from themselves if need be.Now, the bailout itself could/should be considered a governmental incentive (it just wasn't one you listed in your post) to continue with risky behavior. So to some extent people here are saying the same thing. The primary difference is that Scott appears to lay the blame on the government for creating the incentives and lmsinca and OWS seem to blame Wall Street for taking advantage of the incentives even though they knew the risk of doing so. If we take Mike's advice we'll put aside the issue of blame and work together to address what both sides see as a problem. I'm not sure this is possible assuming OWS thinks more government is the solution and Scott thinks less is the solution. Even if the two sides try to compromise at a middle ground, I'm not sure the solution would be effective in solving the problem.
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Harold Meyerson speculates on why OWS is popular with a solid majority of Americans.At its root is the simple fact that the Wall Street banks over the past quarter-century have done none of the things that a financial sector should do. They have not helped preserve the thriving economy that America once enjoyed. They have not funded our boldest new companies. (That’s fallen to venture capitalists.) They haven’t provided the financing to maintain our infrastructure, nor ponied up the capital for manufacturing to modernize and grow here (as opposed to in China). Instead, they’ve grown fat on the credit they extended when Americans’ incomes stopped rising. They’ve grown plump on proprietary trading and by selling bad deals to suckers. (Citigroup, like Goldman before it, just agreed to pay hundreds of millions of dollars to settle charges that it defrauded investors.)The original J.P. Morgan was hardly a beloved figure. But in the course of attending to his business, he helped form the American economy. He consolidated railroads, cobbled together the companies that became U.S. Steel and General Electric. In pursuit of profit, he helped build the country. By no stretch of the imagination is that what today’s Wall Street is about. The country isn’t being built; no one’s been building it for the past 30 years. Wall Street’s interests are elsewhere, in realizing huge profits and bonuses for arbitrage and paper-swapping that has brought little but debt and ruin to the larger economy.
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If you click through Mike's links, you'll find an essay re: Citizens United with this little nugget:"A single lobbyist with a good friend in the right place can deliver more to a special interest than many millions spent on campaign advertising."http://theweek.com/bullpen/column/106558/the-progressive-fallacy-on-free-speech
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BTW, that quote from the Simon Johnson piece was actually quoting Jon Huntsman regarding the TBTF banks in case you missed that by not going to the link.
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The TEA party phenomena is primarily a manifestation of some decades of a media, political, and educational system that promotes grievance and entitlement mentalities, nurses resentment and blame, scorns responsibility and work and merit, tells people that all their problems and responsibility for fixing them lie with amorphous oppressors and systemic unfairness –all a network of appeals to the basest instincts. It's not really complicated.
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Kevin:Thus, the whole lack of confidence that all this won't happen again, and sooner rather than later.What specifically do you mean by "all this"? I still have the sense that you believe if we didn't have banks that were TBTF, the economy would not have tanked the way it did. That just isn't the case.
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"A single lobbyist with a good friend in the right place can deliver more to a special interest than many millions spent on campaign advertising."Which only hammers home the questions others here have asked….why, if we have a lobbyist as one of our big contributors, are we not all being paid by the government for our work at this blog? Occupy NoVa's Office!
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"What specifically do you mean by "all this"? I still have the sense that you believe if we didn't have banks that were TBTF, the economy would not have tanked the way it did. That just isn't the case."Specifically, I have a general feeling that if, in the case of failure, you don't make any changes to how things are done (except perhaps in regards to quantity at the moment), you're highly likely to have the same failure in due course.
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bsimon:The TEA party phenomena is primarily a manifestation of some decades of a media, political, and educational system that promotes grievance and entitlement mentalities…Entitlement mentality? That is a highly bizarre claim, given the the TPers are actually demanding that the government do less, not more. Entitlement mentalilty, indeed.
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Scott-Bsimon simply cut and pasted QB's description of OWS to make the point that these sort of movements are generally motivated by the same things. The fact that you only picked out one of the numerous motivations listed really only hammers home that point.
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Kevin:Specifically, I have a general feeling that if, in the case of failure, you don't make any changes to how things are done (except perhaps in regards to quantity at the moment), you're highly likely to have the same failure in due course. And what, do you think, was the cause of the failure?
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Kevin wrote: "Part of what determines quality of life is access to the benefits of a wealthy society. If the only metric of the quality of my life is the money in my wallet, my life mostly sucks, but that's not the full story."That's a thread worth following. How do you measure quality of life? For me part of the equation is material / financial, but time is also a significant factor. Collectively we're working more than we use to. There are more dual-income families, for instance. I don't have the statistics handy, nut time spent on the job (for the employed) has gone up. To me that reflects a lower quality of life / standard of living. Having said that, people make their own choices.
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bsimon: "The TEA party phenomena is primarily a manifestation of some decades of a media, political, and educational system that promotes grievance and entitlement mentalities, nurses resentment and blame, scorns responsibility and work and merit, tells people that all their problems and responsibility for fixing them lie with amorphous oppressors and systemic unfairness –all a network of appeals to the basest instincts. It's not really complicated."I think there are important differences. The TEA Party folks advocate a self-sufficient, buy-the-bootstraps orientation, generally, so they wouldn't be scorning responsibility and work and merit–quite the opposite–but rather would be affixing blame for general problems and an amorphous sense of dissatisfaction on an abstract other that *does* scorn responsibility, work, and merit, and believes that they caused the problem and the solution to fixing it is to not elect or underwrite those merit scorners. Amorphous oppressors seem to be a common thread, but I would replace "systemic unfairness" with "oppressive regulatory environment". There was clearly some grievance amongst the TEA party folks, but a difference in the entitlement mentality: ergo, OWS feels entitled to the money of other people, while the TEA party folks (if we are going to paint with broad strokes) feel they are entitled not to pay for anything they don't specifically want. So, if they don't specifically want that road or financial support for mothers with infants, they shouldn't have to pay a nickel for it. If at any point they have to, say, pay taxes for roads they don't drive in, an injustice has been done, because they are entitled not to pay. They are entitled to their own money (and that Medicare Powerscooter). 😉 Also, to concur a bit with Mr. Sullivan, it's clear that some people in the TEA Party movement wanted you damned kids to get of their lawn.
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"Collectively we're working more than we use to"Indeed. At the individual level, it's going to be different for each person, I think. I actually work less than I used to (but being young and stupid and willing to put in 24 hour days to meet arbitrary deadlines for people who will cut you loose to drown the minute you no longer serve their immediate purposes . . . that will do that). But, I recently put in a 12 hour day, occasionally do the 8 hour days, would definitely like a few more weeks off for travel and whatnot. But . . . I like my job, and the quality of my work life is much better than, say, working in a coal mine.
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ScottC, I'd add that this idea that taxes are theft is a different sense of entitlement. It costs money to maintain our system of government, yet a vociferous segment of the population seems to think there's always room for more tax cuts. Cut gov spending, but don't cut the DOD budget or social security!
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Occasionally do the *10* hours days. I always do the 8 hours days. 😉
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ashot:Bsimon simply cut and pasted QB's description of OWS to make the point that these sort of movements are generally motivated by the same thingsI know, and I was pointing out that the comaprison makes no sense.The fact that you only picked out one of the numerous motivations listed really only hammers home that point.Given that "leave me alone" means something quite nearly the opposite to "do something for me", it baffles me that you think the two could be sensibly said to be the result of the same motivations.
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Scott: "And what, do you think, was the cause of the failure?"A great many things. It was a private/public partnership involving many inputs. Which doesn't mean nothing at all could be done to try and avoid such unsustainable bubbles in the future. I don't think we're going to defeat the business cycle, but it certainly appears, as a layperson, that pretty much nothing was done and that if and when things get better, we've already set ourselves up for it to all happen again. A requirement that lending banks have to hold on to any loan past the average point of default for that class of mortgage. Would that be so hard? So oppressive? Wouldn't that have at least helped with the part of the problem that involved bad mortgages? Would it not perhaps change the incentive structure from one where the quicker you can make a loan and sell it, the better?
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bsimon:ScottC, I'd add that this idea that taxes are theft is a different sense of entitlement.Only if the taxes are providing a desired benefit. The objection that most people have is not that they have to pay taxes for any government at all, but that they have to pay for government that they don't want and from which they get no appreciable benefit. That is not an expression of "entitlement" in any way at all.
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"Given that "leave me alone" means something quite nearly the opposite to "do something for me", it baffles me that you think the two could be sensibly said to be the result of the same motivations."I think the argument is that one group says: "I want somebody else to pay my credit card bill." And the other side says, "Leave me alone, I don't want to pay my credit card bill, period. I shouldn't have to, there shouldn't be a credit card bill, I didn't really want to buy any of this stuff, anyway, it was all my wife's idea. And get off my lawn!"
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Or, one side says: cut all government spending, except that which I benefit from. And the other side says, increase government spending on the things which I will benefit from. I think there are perspectives where OWS and the Tea Parties could be seen as similar. The places where they clearly don't have much in common would be in the level of piercings, disturbing facial tattoos, and taking dumps on police cruisers.
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"it baffles me that you think the two could be sensibly said to be the result of the same motivations."Then go ahead and pick apart the rest of the QB's description and explain why they don't apply to the Tea Party. The Tea Party blames the government for virtually everything that ails our country. Systemic unfairness, although obviously in a different sense, is certainly a theme of the Tea Party. Both movements rely heavily on envy, a base emotion, as motivation. The Tea Party is envious of the "takers" who don't pay federal income tax while OWS is envious of the wealthy.
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"I didn't really want to buy any of this stuff, anyway"I like that one.
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"They have to pay for government that they don't want and from which they get no appreciable benefit."There is a difference between getting no perceived benefit and no appreciable benefit. There is a benefit derived from an interstate highway even if you never leave the county.
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bsimon:There is a benefit derived from an interstate highway even if you never leave the county. Agreed. A highway is very nearly the classic example of a true public good. But surely you are not under the impression that most of what the government spends its money on (outside of defense, which, BTW, was the original justification for the interstate highway system) is such a public good.
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"They have to pay for government that they don't want and from which they get no appreciable benefit."So they want a Goldilock's government? It can't be too hot (benefits others but not them) and can't be too cold (doesn't provide for their benefits) it has to be just right.
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"Goldilock's government"Ashot for the win…………..Great discussion everyone.
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ashot:So they want a Goldilock's government?Sure…don't we all? We only differ on what it is that constitutes "just right".
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"So they want a Goldilock's government? It can't be too hot (benefits others but not them) and can't be too cold (doesn't provide for their benefits) it has to be just right."Which puts the serious OWS folks in a very similar, though not identical, position to the Tea Party folks. They want an arrangement that is just right, and usually just right means of maximum financial and/or emotional benefit to themselves, reflective their values, and not so much reflecting the values of those they disagree with.And that, kids, is why we have elections. 🙂
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BTW…who put up the Occupy Mordor thing? I assumed it was Kevin, but sounds like maybe it wasn't.
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Yep, I agree Scott. It certainly wasn't meant as a criticism because I obviously want the just right benefit, too.
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I put it up, Scott. A friend had it on facebook and this little group of sci-fi/fantasy political geeks were the first people I thought of.
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And I thought the occupy Mordor thing was Scott. Tag your posts if you edit someone else's (— Ashot) if you think about it. 😉
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"And that, kids, is why we have elections. :-)"yes, but that's also why we have a founding charter that establishes the parameters and framework for that "just right". some would argue that those parameters have been stretched over time.
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We have definitely stretched it. Stuff that used to would have taken an amendment: pass a law, little litigation, there ya go!
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this deserves it's own post, but that stretching, I think, as a lot to do with the perceived inability for gov to get things done.
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Kevin- I usually do tag my post, but forgot this morning for some reason. "some would argue that those parameters have been stretched over time."That's also why we have elections, right?
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ash — kind of. I'd say that elections are supposed to work within that framework, not stretch it. or that failing, use the rules available to change the framework.
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"…a promisory note that isn't very convincing."In addition to Kevin's comment, wiser people than I have observed that the bailouts appear to create a moral hazard in that the bailouts seem to send the message that government will not allow certain institutions to fail, and, therefore, that said institutions can take all sorts of risks without worrying about the consequences.
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NoVa- I know, I was being a contrarian more than anything. Although elections decide who selects the SCOTUS and they have an awfully big say in what that framework is exactly. I assume that is one of the things that you were getting at with the "kind of."
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exactly ash — would make for an interesting post. has the judiciary stretched the framework to the point that the remaining functions cease to function as designed? or are the remaining functions working as intended?
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"ashot: "Bsimon simply cut and pasted QB's description of OWS to make the point that these sort of movements are generally motivated by the same things."That's what he tried to do, but the resulting statement was patently implausible. Those motivations are if anything the opposite of Tea Party motivations. Indeed, those impulses behind OCW are part of what the Tea Party is against. I doesn't work to try to equate resistance to higher taxes with the entitlement mentality of the Left, which is just the opposite.
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"Then go ahead and pick apart the rest of the QB's description and explain why they don't apply to the Tea Party. The Tea Party blames the government for virtually everything that ails our country. Systemic unfairness, although obviously in a different sense, is certainly a theme of the Tea Party. Both movements rely heavily on envy, a base emotion, as motivation. The Tea Party is envious of the "takers" who don't pay federal income tax while OWS is envious of the wealthy."ashot, this is a little Orwellian. Yes, the TP blames government for problems; I doubt that most of them blame the government for "virtually everything" that ails us (take Hollywood, for example), but their complaint is against government interference and overtaxation. That makes them the opposite of OCW.It isn't just systemic unfairness in a different sense. I'm not sure you understand what I meant by this. I meant the standard and pervasive leftist ideologies that claim that civil society is itself oppressive and exploitative: American society and its economic system and institutions are inherently oppressive, racist, sexist, oligarchical, etc. These are currents of Marxism, radical feminism, post-structuralist critical theory, etc. They are exclusively elements of leftism and have nothing to do with the ideas and sentiments of the Tea Party. Again, the TP is concerned with government abuse. OCW is a leftist movement seeking to enlist government in regulating and expropriating from elements of civil society the Left holds are oppressive.In truth, there is nothing in my description of OCW motivations that is characteristic of the Tea Party. In simple terms, wanting to use government to take more from others (the left) and resisting having it taken (the right) do not both arise from envy. If you want to indict the TP's motivations, I think you should make your case or at least say what its motivations are and where they come from. Just asserting that they are the same as OCW's is hardly persuasive of anything.
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Re-reading this thread, I swear, I worry about my brain. I missed an early explanatory email from Scott about derivative contracts being "cleared through an exchange which has signficant excess margin requirements". While I'd heard such things suggested, I wasn't sure if such a thing was actually happening. That's very good. Are there bits not being so cleared?That sounds good, though, and my post-that-comment replies would have been tempered by that answer, had I read it. How'd I miss that? Dang work.
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" In simple terms, wanting to use government to take more from others (the left) and resisting having it taken (the right) do not both arise from envy"I think there is resentment on the part of (many) of the Tea Party folks. Whether or not you believe that resentment is more legitimate than envy (I do, personally) I think they are flip sides of the same coin . . . but envy is the wrong word for the Teapers. I think both groups share resentment of those who take advantage of them or are guiding the world in the wrong direction. But disagree profoundly about some of the specifics (one of the things that would make teaming up a difficult idea). "I doubt that most of them blame the government for "virtually everything" that ails us"No indeed! You mention Hollywood, but what about academia? And Hollywood is too broad, for me, but I definitely think MTV has a mission to slowly kill Western culture through it's moral cancer. And most reality television, also bad for us. If only the government would step in and . . . hey, wait!
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