Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Memetrics
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1315.7 | 6.8 | 0.52% |
| Eurostoxx Index | 2434 | 29.330 | 1.22% |
| Oil (WTI) | 101.03 | 2.250 | 2.28% |
| LIBOR | 0.5424 | -0.005 | -0.82% |
| US Dollar Index (DXY) | 78.888 | -0.237 | -0.30% |
| 10 Year Govt Bond Yield | 1.85% | 0.01% |
Markets are stronger this morning on progress in Europe. The Portuguese long bond is up a point and the Euro is strengthening. In earnings, Exxon missed, Eli Lilly beat. People are waiting anxiously to see the red herring for Facebook’s IPO. Certainly the other social media stocks have not been shooting the lights out, but leaders always trade rich to also-rans. Watching Linked-In or Groupon may not turn out to be the best comp.
The employment cost index came in at .4%, in line with expectations. Case-Schiller was also released this morning, with a 70 basis point decline MOM and 3.67% decline YOY. This puts the index back to April 2003 levels. Case-Schiller is a very lagged indicator and this number covers the 3 month average ending in November, so it is a snapshot of how the real estate market looked last fall. Anecdotally, I am hearing things are improving in my neck of the woods, NYC metro.
Chart: Case-Schiller
Another sign that the inventory of foreclosed homes is moving – the professional investor is getting involved. Bloomberg has a story this morning on how private equity is getting involved in the Administration’s REO-to-Rental program. These funds are looking at spending billions. Still, the absolute numbers are staggering. “About 7.5 million homes with a current market value of $1 trillion will be liquidated through foreclosures or other distressed sales by 2016” according to Morgan Stanley.
$1 trillion in distressed sales. Wow.
Filed under: Uncategorized |
All Things in Moderation 
The overall story on housing, obscures the local story housing. You have 6 bad states who were vastly over priced and you have everybody else who has more or less returned to equilibrium.
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Minneapolis and Phoenix showed gains. Everyone else was down. Atlanta and Chicago were the worst with 2.5% and Chicago was down 3.4%.
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There SHOULD be some fluctuation in pricing. it was the idea that housing always goes up that drove the madness, was it not?
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Isn’t that the idea behind every bubble? Remember “You can’t lose money long term” in the stock market?
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Case in point:
Stocks always go up over time -> therefore a well-diversified portfolio of stocks is as low risk as Treasuries -> therefore expected cash flows from stocks should be discounted at the risk-free rate -> A top down DCF at this rate puts the market at 40,000.
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I wonder if that will be the subject of a classroom course, or already is?
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As was noted by RUK previously, the Washington Post is making changes to their commenting system. They’ve asked for feedback on the “one change we would request”. I put in my vote for the ignore button.
http://www.washingtonpost.com/blogs/ask-the-post/post/about-our-changes-in-comment-threads-and-moderation/2012/01/30/gIQAjSPMdQ_blog.html
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Whenever people ask me about the tone of the market, I use Dow 40,000 as an example of end-of-bull market optimism. (Publication summer 1999) I use this as an example of end of bear-market pessimism. (Publication Summer 1980)
I actually do own this book. Found it in an old bookshop and had to buy it. Punch line: The US is about to disintegrate into a confiscatory fascist / leftist klepto state. Buy Rhodesian junior miners. Gold is going to 3,000. The Dow is going to 300.
Those two books give an idea of the continuum of market psychology.
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Big miss in consumer confidence – 61.1 vs 68 expected
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Yes…that surprised me.
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Of all the nubmers I watch, consumer confidence is literally the last one I worry about.
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banned:
Of all the nubmers I watch, consumer confidence is literally the last one I worry about.
I was just surprised by 1) the drop and 2) how much expectation was off. But I agree, it isn’t that important.
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Brent, john/banned, Scott and all financial wonks…
I read where personal income rose .5% but spending did not because people are either paying down debt or saving.
My question…Is this not a very good thing long term? I realize in the short term we want the consumers back in the market to lift a fragile economy…but if this crisis has changed habits and encouraged less debt and more savings from the average, financially illiterate American, isn’t that a great think long term for America?
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Yes, it is a good thing. Think about people in their 30s and 40s who are saving for retirement. What are their expected returns, given low interest rates? They’ll be lucky to get 5% over inflation. They have to save more.
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Brent, did you use “red herring” to mean “false clue”?
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Think about people in their 30s and 40s who are saving for retirement.
I’m going to be working until I drop dead, I’m pretty sure.
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Kevin
If you read the last thread about nursing homes, working until you drop dead is not such a bad option.
When the crash hit us, literally the year we had planned to retire, it necessitated working two or three more years. But we have our health and enjoy our staff and we’re not sure we want to quit anyway. We would like that to at least be an “option” though. LMAO
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I submitted this in regards to my one feature request:
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“Think about people in their 30s and 40s who are saving for retirement.”
would make it a whole lot easier if there wasn’t a 6.2% hole in my paycheck.
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Mark,
A “red herring” is another name for a preliminary prospectus. The company and its bankers prepare a preliminary prospectus and send it to the SEC. This first draft is what Facebook should be issuing this week if the rumors are correct. This is a document that will be redlined and revised numerous times before the final prospectus is issued. It doesn’t mean that the information is false in any way.
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ruk:
Savings and paying down debt are literally a terrible idea. In doing either you are fighting the Fed in a war you can’t win.
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There’s a 5% hole in my paycheck, where I pay into the Tennessee Retirement fund. Which is great, if it’s there when I retire, the chances of which I put at about 60/40. Can’t trust government run pensions. 😉
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does that mean you’re exempt from SS?
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john/banned
Savings and paying down debt are literally a terrible idea. In doing either you are fighting the Fed in a war you can’t win.
Is that snark or a serious comment. If it’s the latter, forgive me, I need more education. If they pay down their homes and end up debt free..regardless of the “value” of their “investment” won’t they be in better shape? I get that as Brent pointed out earlier, returns on savings or virtually all “secure” investments are horrible right now…but still..isn’t a 5% return compounded over a few decades enough to “battle the Fed” as you put it.
Not challenging your assertion so much as asking for amplification for a financially illiterate American.
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Brent, do you know the history of that usage? I recall when the prelim prospectus was called a “red line”. It seems ironic or intended as humor that the prelim would be called a “red herring”, like a rabbit trail in an Agatha Christie novel.
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ruk:
No, I was serious. The Fed has committed to low interest rates thorugh 2014 AND a 2% rate of inflation. That means that anybody in this conutry who saves is GUARANTEED by the Fed to lose money. Conversely whatever money you borrow now, will be paid off in dollars of lesser value, especially the farther out you string the payments.
Under current market conditions, getting a 3.75% 30 year mortgage is the closest to robbery that you will ever get.
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RUK, as you and I have lived through stuff, we agree that being out of debt is way better than the alternative.
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Nova
LOL I know we’ve had this discussion before but really…reality check.
I am 64 and could be taking S.S. currently. Since my late 20’s I’ve been told that S.S. simply would not be there for me. I am a member of the “most destructive” group in American according to some right wing politicians..the AARP. I don’t believe S.S. is going anywhere soon. There are plenty of other places to look for savings and S.S. is not really a driver of our deficit. Medicare is another debate of course..but S.S. is not in bad shape at all.
Meanwhile after saving and putting that money into a 401K for decades my wife and I watched the value of the professionally managed portfolio drop by 40%, the entire market dropped 50% during the crash if I’m not mistaken, so we fared about like everybody else. Now if my S.S. had been privatized there went 50% of my retirement.
But it’s not private…Wall Street didn’t have it to gamble with and so now I’m left trying to squeeze 5-7% out of our retirement portfolio (considered to be realistic in today’s market environment) while my S.S. benefits climb 8% a year for every year I can hold off until 70.
How do you suppose you’re going to convince a 64 year old with “real life” experience who has witnessed the market and S.S. and how both have fared to buy into your libertarian ideas? To be a bit blunt…S.S. has worked just as intended and just as I’ve planned in my life and the experiences of all my peers…the stock market…again can you say CRASH?
Now I don’t wish to hear all the coulda, woulda, should’ve’s re the failure of the Stock Market to provide any real financial security, no matter how diversified, or professionally managed…nor do I wish to hear “speculation” about the “future” demise of S.S. The program has lasted 75 years now and certainly done a far better job in “reality” if not “theory” than the private market when it comes to retirement for the average American.
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ruk:
The program has lasted 75 years now and certainly done a far better job in “reality” if not “theory” than the private market when it comes to retirement for the average American.
A better job at doing what?
The private market creates value, thus increasing the store of wealth. When a person makes a private investment in some kind of retirement account, whatever additional value that is there when he withdraws it has been created. It has not come at the expense of anyone else.
SS does not create value. It simply transfers value from SS contributors to SS beneficiaries. Any benefit realized by an SS beneficiaries is balanced off by an expense for someone else.
It doesn’t make sense to compare them and say that SS has done a “better job” than private market retirement strategies, because the two do not, and are not intended to, do the same thing. One creates new wealth, while the other simply transfers existing wealth.
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Mark
I respectfully disagree. See what happened to all those people who paid off their mortgages early in areas of declining value. now they have both no cash, and no value.
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I’m not exempt from SS.
I should have said, there’s an additional 5% hold in my paycheck. Equally mandatory, if you work for the government in TN. 😉
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when I was about 12, the dinner table discussion turned to what would happen if my father died. My mother said to him that she would take his life insurance and pay off their then about 4% GI bill mortgage.
My father turned to me and said “For God’s sake, If I die don’t let your mother pay off the mortgage! LOL true story.
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Ruk – I really don’t disagree with anything you said. My argument is simply that as an adult US Citizen, I should be free to make my own personal financial decisions and accept the consequences.
“Under current market conditions, getting a 3.75% 30 year mortgage is the closest to robbery that you will ever get.”
6.2% goes a long way to helping me come up with the 20-25 percent I need to come up with for down payment on an investment property.
instead, the 1% will get their hands on the surplus inventory.
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nova:
If you don’t mind moving, the best way to do that is to rent out your current home and go get another, market conditions permitting.
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John, they have a reduced monthly outlay. A home can be viewed as an investment or as a piggy bank, but it can also be viewed, simply, as a dwellling, and once paid for, a secure one. I have lived mortgage free for 17 years and I like it even though my home as an asset has dwindled about 10% in value since 2007.
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My dad agreed with your dad and with you. Thought it was unsound to prepay a mortgage.
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mark:
There is value in piece of mind. I would never question that. I was making a strictly economic argument.
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“Under current market conditions, getting a 3.75% 30 year mortgage is the closest to robbery that you will ever get.”
Going to be closing on a VA loan in the next month or two. 104% LTV. Gotta love Bearish Ben and quantitative easing.
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“If you don’t mind moving, the best way to do that is to rent out your current home and go get another, market conditions permitting.”
Done. but i’m a greedy SOB. I’ve got a a condo we owned and have been renting out for 2 years. we bought our current house on down payment that was funded through 1) personal savings and 2) a life insurance and 401k payout from the untimely death of my mother-in-law. that payout also put my sister-in-law through graduate school.
The “risky” 401k of a home health nurse bought us a house in one of the most expensive markets in the country. SS told us to pound salt — we didn’t get a dime of the money she had paid into for 35+ years.
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The program has lasted 75 years now and certainly done a far better job in “reality” if not “theory” than the private market when it comes to retirement for the average American.
On what planet is an apples-to-apples comparison end up with SS on top? Is there any conservative investment strategy, consistently applied, on a regular basis that would not out-perform SS? Any market index fund would have out performed SS over any 30 year 40 year period. As far as I know. Financial guys, please correct me if I’m wrong.
I don’t invest because I need my money now, but if I were to invest, I’d pick an index fund, and dollar-cost-average my investments over decades, and measure the performance of my investment thusly.
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I’ve pre-payed some on my mortgage, but it only means that more of my regular monthly payment now goes to the principal rather than interest. This seems like a good idea to me, am I mistaken?
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kevin:
What’s your current rate, AND what would you do with the extra money if you had it?
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RUK said to Kevin:
If you read the last thread about nursing homes, working until you drop dead is not such a bad option.
Just want to mention you don’t always get a choice about those things.
Life deals people strange hands sometimes. Most of us here probably have a ‘quirk’ or two we didn’t sign up for.
But regarding money, if one comes into some extra cash, where the heck does one put it?
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But regarding money, if one comes into some extra cash, where the heck does one put it?
msjs: The bank. Or a mattress. If you want to invest it (and I’m not a professional), I’d put it in a money market account with a fixed monthly draft that invested it in a market index fund. Unless you thought you’d need it soon, then keep it as cash. You know the best way your money can work for you? By not disappearing.
I learned that during the dot-com bust.
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“But regarding money, if one comes into some extra cash, where the heck does one put it?”
Gold and 9mm rounds in the cellar?
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gold or oil, on any dips of 5-8%
The Fed has made the choice for you.
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banned: Current rate: 5%. If I had the extra money, it would go more quickly to nest-feathering purchases, such as new living room furniture. 🙂
If I suddenly inherited $85k, my instinct would be to pay off the mortgage and just be done with it. If inherited more, my instinct would be to buy a new house, with cash, and then just be done with it. I don’t like that inexorable monthly expense. 😉
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nova:
semi-jacketed HP .357s. We’re not squirrel hunting.
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kevin:
I would choose the mortgage over new furniture too. BUT if for instance you were paying your kids college tuition, then it would be all over.
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We’ve got cash set aside for tuition, and should that run short (and it almost certainly will), my mother will probably help out. We’ve only got the two kids, so I *think* we’ll be able to pay for college, although I’m going to argue for in state tuition and living at home. I’m not planning to cover rent out of state (my wife is not as firm on this as I am, but unless we win the lottery, I think I’ll win that argument).
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i stink with the 357s. but can handle the .45 go figure.
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kevin:
if you are only paying for in state, then you should see if your state has a pre paid tuitiion plan. That would be a MUCH better investment than paying off your mortgage, given the rate of tuition inflation.
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nova:
because with the .45, presumbaley your target is only about 10 feet in front of you.
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“because with the .45, presumbaley your target is only about 10 feet in front of you.”
If you’re ever in Vegas, you can rent a WWII era Thompson. that’s a good time.
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“Savings and paying down debt are literally a terrible idea. In doing either you are fighting the Fed in a war you can’t win.”
I’d argue this depends on the interest rate of your debt.
Also, I’m in my 40’s and I have no expectation of receiving SS or Medicare benefits.
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nova:
In DC that would mean I was outgunned
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I’m in my 40s and I expect to receive both SS and Medicare. But I don’t expect I’ll be able to live on it. 😉
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Kevin,
On what planet is an apples-to-apples comparison end up with SS on top?
Well I’d like to see the financial gurus weigh in on this as well. I’ve just provided a real life example where the “market” dumped 50% of it’s value in a single year’s time. S.S. has not and in fact returns are at 8% annually for me for the next six years…far better than I expect to receive, and far better than several brokers have told me to expect in the market. They talk in Brent’s 5% range with 7% being outstanding…the 10% days are over.
And so like you I’d like to see the comparison including the big crash of 08! And of course my wife and I are exceptional when compared to the American public at large in terms of how much we faithfully and regularly put into the retirement program. Many people simply do not have the money and live from paycheck to paycheck.
Am I the only person on this blog who lives with some everyday Americans, folks perhaps in the bottom 50%? Some of the comments I read surprise me.
john/banned
I certainly accept your point about “timing” right now…yeah if you can get a 30 year mortgage at these low rates..why not jump on it and see if you can do better than the small interest required…I get that the Fed has guaranteed low “returns” on savings until 2014….but all that you mention are related to “timing” issues. And I believe you and Brent and Scott are professionals who know enough and pay attention enough to profit from “timing” markets..whatever they be…the average American is investing long term…a house…or at least five year hunks in their Autos..and perhaps shorter term in their appliances…but the average American IMO is not astute enough to “time” markets. Hence my question..isn’t it good ‘long term” that these folks have started saving and stopped acquiring more debt willy nilly?
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ruk:
S.S. has not and in fact returns are at 8% annually for me for the next six years…far better than I expect to receive
SS does not provide “returns”, because there is no investment. You will receive whatever amount the politician of the day decide you will receive. It may be 8% on what you paid in, it may be 20% on what you paid in, or it may be 0% on what you paid in.
And even if we do accept the notion that FICA payments are an “investment” that will provide “returns” when you retire, you will still have no idea what your “return” was until after you are dead and SS stops paying, because the “investment” does not belong to you. You might even have a negative “return” if you die before getting back the full amount that you paid in over your working life. If you die, your “investment” disappears and there are no more “returns”.
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What would you save your money in that wouldn’t actually be a losing investment compared to the rate of inlfation?
The Fed has already declared you dead. They just didn’t send out emails. At least SS will receive a COLA, because the old people vote! Savers will get nothing.
As to the timing issues, try to imagine any situation short of another world recession where the price of oil goes down significantly, and then realize that if you HAD bought oil in 2009 or 10 say, you would have doubled your money by now.
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jnc:
of course, but the FED is subsidizing your debt. I’m presuming those of us here are eligible for market rates. Were that not to be individually true, then the Fed has effectively shot you dead and left your body in the street as a warning to others.
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jnc
Also, I’m in my 40′s and I have no expectation of receiving SS or Medicare benefits
On what historical evidence do you base your fears? Again remember you’re addressing somebody who has heard S.S. would not be there for me, and I’ve heard that for over 30 years! And yet..here it is…is it enough for me to live on..absolutely…to live on “in the style to which I’ve been accustomed”…NO..that’s what our IRA, real estate holdings, and business holdings have to provide…simply the “style” but not the actual survival.
If nothing else read john/banned’s comment and understand EXACTLY why you’ll have S.S. when you retire.
At least SS will receive a COLA, because the old people vote! Savers will get nothing.
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ruk:
On what historical evidence do you base your fears?
Mathematics, I would guess. That which cannot go on forever, won’t.
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nova, you corking corker.
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I think it’s a numbers game:
There are roughly 79 million Baby Boomers
There are only 51 million members of Gen X (people born roughly between 1965 and 1976). — me at 33 and jnc in his 40s
There are 75 million “Millenials” and they’re not paying FICA for camping out in various parks.
also: http://www.cato.org/pub_display.php?pub_id=3818
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“Mathematics, I would guess. That which cannot go on forever, won’t.”
I assume that a program that pays out beneficiaries on average three times what they paid into it is unsustainable, given current demographic trends.
http://www.urban.org/publications/1001553.html
I also assume that there will be no proactive reform prior to the issue being forced by the bond market, at which time it will be too late.
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jnc:
The vast expansion of the money supply has taken care of that so far.
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banned:
The vast expansion of the money supply has taken care of that so far.
Maybe SS benefits will someday include a wheelbarrow, a la Weimar.
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Well I’d like to see the financial gurus weigh in on this as well. I’ve just provided a real life example where the “market” dumped 50% of it’s value in a single year’s time.
__________________
Since Q1188, the ML Treasury 30 year total return index has returned 9.55% annually. Over the same time period, the S&P 500 Total Return index returned 9.4%. Those numbers include the dot.com bust as well as the 2008 implosion. Q188 is the farthest back I can go on the stock and bond total return indices.
So yes, Treasuries outperformed, although I would point out that Treasuries are in the terminal vertical phase of a blow-off bull market top, courtesy of an assist from the Fed, and stocks have been in a bear market for 12 years.
Needless to say, I don’t expect that out-performance to continue. You couldn’t pay me to hold treasuries right now.
__________________
“At least SS will receive a COLA, because the old people vote! Savers will get nothing.”
That COLA is based on the CPI, as defined by the government. The more honest they are in calculating inflation, the more money they lose. They have every incentive to understate inflation and I believe they do. Does the “no inflation” world the government seems to believe exists comport with the reality you face?
I find it ironic that the government is all over the private sector over conflicts of interest, and is perfectly fine with being able to define the index on which it bases its liabilities.
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That guy looks like Mr. Monopoly, aka Rich “Uncle” Pennybags.
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“jnc:
The vast expansion of the money supply has taken care of that so far.”
I assume that Pretend and Extend can’t work for 20 years, but I could be underestimating Ben Bernanke.
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Well I’d like to see the financial gurus weigh in on this as well. I’ve just provided a real life example where the “market” dumped 50% of it’s value in a single year’s time
I don’t think the top 25 or top 15 indexes lost 50% of their value and, again, if you’re playing the long game, the market has, historically, always out performed SS.
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KW:
…always out performed SS.
Which, in more precise terms, means, “always out performs political inclinations to transfer money from younger people to older people.”
We really should stop talking about SS as if it is an economically “performing” asset, and talk about it in terms of what it is: a politically determined transfer payment.
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BTW, and apropos of absolutely nothing at all, I don’t think the search feature at the top of the site works for comments. I think it only searches posts. Which is quite irritating.
Now back your regularly scheduled program.
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if you’re playing the long game, the market has, historically, always out performed SS.
As someone once said, in the long run, we’re all dead.
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scott and jnc:
if you want to fight the Fed, have at it. i am one of the little people who feeds on the crumbs that the rich allow me to have.
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Scott, Nova,, and others..
SS does not provide “returns”, because there is no investment.
I have always, and will continue to stipulate that I do not believe S.S. to be an “investment” but rather a tax. I shall further stipulate something that should warm the cockles of your conservative heart…FDR was lying when he started S.S. with the canard that it was an investment and not simply a tax. The depth and malice behind such a “lie” are for a different debate. Just know that I concede S.S. is a tax not an investment.
There are 75 million “Millenials” and they’re not paying FICA for camping out in various parks.
I’m not sure I follow this line…unless it’s some snark indicating your generation is to busy “Occupying” to pay their FICA taxes…you can explain..if it’s snark..well what can I say/
Mathematics…the conservative mantra…when it comes to entitlement programs…but the MIC..not so much. Dana Rohrbacker got on TV and claimed a 1.6% cut was “gutting” defense. The “mathematics” you conservatives in rooted in “frozen” numbers. The math in reality is in a constant state of flux, affected by myriad factors.
The math you conservatives generally trot out is a math that is encumbered by very limited choices…IE defense is untouchable..as are other programs.
I think history bears me out and argues against your claims. S.S. is now almost three times older than you’ve even been alive NOVA. It’s still functioning just fine thank you.
It has avoided the awful situation prior to it’s creation where the elderly were the leading group among the impoverished. I’m speaking from historical reality. You guys are speaking from pure speculation based on numbers that you choose..again..no adjustment to the program and no adjustment to our nation building.
S.S. is easy to adjust, requiring nothing serious, and nothing that is politically too toxic to pull off. #1 Simply eliminate the cap on FICA and if we really need to means test I’m ok with that as well. As far as raising the age limit I am against it unless it is done the way it currently operates. That is, retirement at 62 with enough of an incentive like the current 8% annual increase in benefits to get people to hold off taking when they can.
My cousin took early retirement at 62…he paid in far less than i have..he get’s a small fraction of what I shall receive, especially if I hold off taking bennies until 70. From an “investment” standpoint that is probably a bad call on my part given all the actuarial tables showing that I probably will not live long enough to recoup all the money I have foregone for 8 years. I’m cool with that. Again..S.S. is far more than a simple “investment” program. It’s a “social” program that prevents folks like my cousin from retiring in total poverty. I could be judgmental about my cousin…he didn’t work as hard as me, he didn’t have my intellect, good looks, or talent. I had fun pursuing my dream and being on TV, he worked in a brewery and several different manufacturing jobs…all real drudgery. I don’t really suspect I want to see my cousin impoverished because of his real or perceived lack of effort, or results.
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ruk:
Just know that I concede S.S. is a tax not an investment.
Then you should also concede that it makes no sense to speak of a “return” on SS, nor to suggest that SS is doing “a better job” than private investments.
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john/banned
i am one of the little people who feeds on the crumbs that the rich allow me to have
OK John, that is the funniest line of the day. Too bad the folks over at the PL don’t know that about you, they might hold back on some of their eff bombs..eh..then again..NOT. LMAO
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ruk
It’s true! LOL
I never lose sight of the fact that I am not a trend setter, nor will I ever “beat” the market for anything more than a random number of days. I ride the waves and sit out a few when the water is too rough, or when depth is too unknown.
I also never believe in “fairness”. As your father would have said, the game is always rigged.
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Underlying most of the debates between the progressives and conservatives is the difference in attitude towards government versus the “private sector”.
Personally I hold no advocacy for either. They both are very effective in some applications, and they both suck in other applications.
I find it amusing that someone like Jamie Dimon can be a “genius” in the private sector, but will instantly become a moron once he joins Government.
I find it amusing to jump through all the hoops United Healthcare forces on me, when my wife made simple online entry for an appointment, then sat with a lady for about 30 minutes and her Medicare is in place and working just fine.
Bureaucracy is bureaucracy in the private sector as well as the public. I’m always concerned about the balance between the “gains” in economy of scale, versus the “loss” of efficiency as organizations grow ever larger..again whether the organization is public or private. I realize I’m whizzing in the wind with this observation for many of you because of an existential hated of Government which seems to preclude any rational judgement about the successes and failures in Gov’t and private organizations.
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“t has avoided the awful situation prior to it’s creation where the elderly were the leading group among the impoverished.”
And instead we a have a poverty rate of almost 25% (I think it’s 22 but would have to double check) among those 18 and younger.
Low-income workers are being forced to pay a sizable chunk into a Social Security system that is not inheritable and to which they have no legal ownership rights.
Kicker: they don’t live as long either. I fail to see why we should be proud of this achievement. We should be throwing rocks at FDR’s memorial, not taking tour buses there.
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This is amusing: Who should German voters believe, their own experiences or the NYT editorial board?
“As usual, Germany was the driving force behind the pact. I keep wondering why German Chancellor Angela Merkel, by all appearances a brilliant politician, thinks that shrinking economies is the right way to expand them. What makes her think that sacrifice is the key to reviving an ailing economy – despite the fact that all the evidence points the other way. Just look at Greece, Ireland, Britain, Portugal, Italy and Spain.
I put that question to David C. Unger, who writes about European affairs for the editorial board. He responded that German leaders may be misled by what they think they see happening in Germany itself.
‘Despite, or they would say because of, Germany’s tight fiscal policies, its economy continues to grow, businesses continue to invest and consumers continue to spend. But are these positive numbers really the fruits of Teutonic budgetary virtue, or are other factors at work? Since psychology is a crucial factor in economics, I grant Chancellor Angela Merkel and her economic advisers one point: Most Germans really do believe that deficits and inflation are the worst things that can happen to an economy (as opposed, say, to the mass unemployment that helped bring Hitler to power in the 1930’s). So when they see German deficits trending down, they are inclined to open their wallets wider. In Germany, though not in the rest of Europe, reduced public spending tends to be at least partially offset by increased private spending.'”
http://loyalopposition.blogs.nytimes.com/2012/01/31/what-are-the-germans-thinking/?ref=opinion
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novahockey, on January 31, 2012 at 1:15 pm said:
“I fail to see why we should be proud of this achievement. We should be throwing rocks at FDR’s memorial, not taking tour buses there.”
The moons have aligned and you will now see me do that rarest of things: Defend FDR. Two points:
1. Social Security solved the problem it was meant to solve, specifically destitution in old age. Most government programs don’t even achieve that.
2. Social Security, as enacted by FDR, was a vastly more limited and frugal program than it is now. Among other things, keep in mind that automatic COLA’s were enacted during the Nixon administration in 1975. It’s more appropriate to hold FDR responsible for Social Security as it was enacted, as opposed to how it has evolved over the years.
My primary problem with entitlements is that they are automatically appropriated every year without a vote. The annual appropriation for Social Security and Medicare should be voted on by Congress, just like all other spending programs should be and the outlays for supporting seniors balanced against other competing priorities.
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FDR look forward, with no specifics or mandate, to a time when SS would be “privatized”, as well. I expect people on the left would be throwing rocks at him, he showed up today and tried to follow through on that ambiguous, and perhaps insincere, expression of intent.
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I realize I’m whizzing in the wind with this observation for many of you because of an existential hated of Government which seems to preclude any rational judgement about the successes and failures in Gov’t and private organizations.
I think this is an especially egregious presumption among this group. Even libertarians believe government has had some successes, early on in the history of the country, and only started to go to pot in the 1930s. 😉
I think the government does many things well, could do many things better, and doesn’t need to do many of the things it does, and that obstruction when it comes to the government expanding the already tremendous list of things it does is probably a good thing. And you should qualify “government”–many folks have minor quibbles with governments doing X and Y at the state level, but do not believe the government should be doing X or Y at the federal level, which is not a wholesale condemnation of the public sector, but, in part, an expression of the opinion that government works better at the level of the governed, and more centralized government power is, the more problematic it is.
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ruk:
I realize I’m whizzing in the wind with this observation for many of you because of an existential hated of Government which seems to preclude any rational judgement about the successes and failures in Gov’t and private organizations.
Who here do you suppose has an existential hatred of government? I don’t know anyone at ATiM that fits that description.
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“I realize I’m whizzing in the wind with this observation for many of you because of an existential hated of Government which seems to preclude any rational judgement about the successes and failures in Gov’t and private organizations.”
Most of my objections would be solved by overturning Wickard v Filburn and re-instituting Federalism.
http://en.wikipedia.org/wiki/Wickard_v._Filburn
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http://www.fdrheritage.org/bill_of_rights.htm
*barf*
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Re: Wickard — reason had a post yesterday re: an ABC news story on the history of the case
http://reason.com/blog/2012/01/30/meet-roscoe-filburn-the-dead-farmer-at-t
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“novahockey, on January 31, 2012 at 1:48 pm said: Edit Comment
http://www.fdrheritage.org/bill_of_rights.htm
*barf*”
FDR definitely evolved, but I do give him some credit for having to deal with domestic politics involving Huey Long and Douglas MacArthur.
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I guess he looks okay compared to Mr. “Share Our Wealth”
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Big miss by AMZN.
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Who here do you suppose has an existential hatred of government? I don’t know anyone at ATiM that fits that description.
I believe I corked you on that one. I would at least expect a shout out.
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Kevin:
I believe I corked you on that one. I would at least expect a shout out.
I’m corked out. Keeps happening.
I may re-do my suggestion of the one feature I would like to see on Plum Line as a banning of DDAWD
Racist.
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OT: I may re-do my suggestion of the one feature I would like to see on Plum Line as a banning of DDAWD. Sheesh, that guy. 😉
/gossip
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“Kevin S. Willis, on January 31, 2012 at 2:14 pm said: Edit Comment
OT: I may re-do my suggestion of the one feature I would like to see on Plum Line as a banning of DDAWD. Sheesh, that guy. 😉
/gossip”
I believe that’s covered in your original feature request.
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Good sign crappy numbers, but the markets came back nearly all the way.
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Who here do you suppose has an existential hatred of government? I don’t know anyone at ATiM that fits that description.
I concede that point!
Nova…
And instead we a have a poverty rate of almost 25% (I think it’s 22 but would have to double check) among those 18 and younger.
Low-income workers are being forced to pay a sizable chunk into a Social Security system that is not inheritable and to which they have no legal ownership rights.
And instead? I haven’t done any research but is it your contention that the poverty rate among young people during the Depression was significantly lower than the rate among the elderly? IE Is it your contention we’ve simply swapped one problem for another? Or perhaps you might agree, we’ve solved one problem while ignoring the other.
Low income workers now have a much higher wage than back then because of companion (largely Democratic) laws that enabled, protected, and strengthened unions. Now you can hate on unions all you wish, and I could give you a wonderful real live examples of featherbedding and some other excesses I’ve witnessed myself…but have we thrown the baby out with the bath water? The middle class income disparity closely mirrors the shrinking of unions.
The fact that the drop in unions coincides with a 6% drop of middle class share of the GDP (Source:Think Progress) is perhaps mere coincidence. Many economists think otherwise.
The New Deal was far more than just SS…FDR’s Presidency encompassed more than the New Deal and WWII. An argument can, and has been made, that FDR’s policies in totality…Unions, Infrastructure, social safety nets, banking regs, all combined to launch the middle class we take for granted. Certainly coming home after WWII with all the abundant natural resources in a land unscarred by war while the rest of the world lay in ruins closed the deal. But long after that boom, when union membership started shrinking, so did the middle class share of GDP.
We’ve seen how it used to be…this is within my generation…my mother told me stories of their suffering in the Depression…virtually everyone of my extended family were deeply scared by the Depression…THEY would never want to go back! Social Darwinism seems fine in theory, but in reality it has it’s challenges.
I understand the frustration with me for some of you. I realize our values differ, and our political choices are diametrically opposed. But as you guys used to say at the liberal joint…you wouldn’t want an echo chamber.
Now Kevin…help..:-)
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I realize I’m whizzing in the wind with this observation for many of you because of an existential hated of Government which seems to preclude any rational judgement about the successes and failures in Gov’t and private organizations.
Breathe, ruk, breathe … relax … ahhh.
Feel better?
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ruk – let’s pick this up tomorrow.
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Now Kevin…help..:-)
I’m tired.
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“The New Deal was far more than just SS…FDR’s Presidency encompassed more than the New Deal and WWII. An argument can, and has been made, that FDR’s policies in totality…Unions, Infrastructure, social safety nets, banking regs, all combined to launch the middle class we take for granted. Certainly coming home after WWII with all the abundant natural resources in a land unscarred by war while the rest of the world lay in ruins closed the deal. But long after that boom, when union membership started shrinking, so did the middle class share of GDP.”
Keep in mind that there’s a fair amount of FDR’s Presidency that was rather dramatic overreach and has since been repealed. Prime examples are the ban on private ownership of gold and it’s confiscation by the government, the Agricultural Adjustment Act that paid farmers not to plant food in an effort to drive prices up, and the NRA which set up a vast price control system on goods and services.
http://en.wikipedia.org/wiki/Executive_Order_6102
http://en.wikipedia.org/wiki/Agricultural_Adjustment_Act
http://en.wikipedia.org/wiki/National_Recovery_Administration
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nova
Thanks…I was afraid I had pissed you off…lol…glad to pick it up at your convenience.
You know I’m still indebted to you for the tip about the 3/4″ videotape. My son who is just a few years older than you is coming down and he’s never seen this stuff so I’m going to get it digitized..
Then again I’m afraid I might humiliate myself. LMAO Have you ever looked at your old airchecks?
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jnc
I readily concede the “evil” side of FDR that was guilty of some egregious overreach. His attempt at stacking the S.C. is enough to besmirch his reputation forever…but gotta take the bad with the good with most historical figures. I’m still trying to figure out what the bad is about Lincoln, but now that I’ve mentioned it I suspect some of our good historians will straighten me out.
FDR was a complicated man with a giant ego…but I suspect it takes a giant ego to really make such a difference…..
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“LMAO Have you ever looked at your old airchecks?”
oh they’re awful. i was trying too hard to be “serious journalist” my DJing tapes are more fun, but equally bad.
although, if i can brag a bit, i won a SPJ award for something i shot and edited.
lobbying duties call. catch you all tomorrow.
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“I readily concede the “evil” side of FDR that was guilty of some egregious overreach. His attempt at stacking the S.C. is enough to besmirch his reputation forever…but gotta take the bad with the good with most historical figures. I’m still trying to figure out what the bad is about Lincoln, but now that I’ve mentioned it I suspect some of our good historians will straighten me out.
FDR was a complicated man with a giant ego…but I suspect it takes a giant ego to really make such a difference…..”
For Lincoln, it would be suspending Habeus Corpus by executive order. The Constitution provides for Congress to do that during time of insurrection, not the President.
Regarding FDR, I’d argue that four terms is too much time in power for anyone.
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Ralph Nader on CNBC for sharholders rights
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Hey RUK, sorry to leave you here to defend SS all on your own, but I just filed my State Sales Tax and paid it online, and an hour early at that, so I’m working my way back to the blog. I’ll be back in full swing tomorrow. There are a lot of things the government gets wrong but SS isn’t one of them, IMO.
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jnc:
I’d argue that four terms is too much time in power for anyone.
And, as we’ve learned recently, even four years is too much time for some.
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I remember feeling exactly like that in 2004 Scott.
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jnc
four terms is too much time in power
I agree jnc. I wonder how much of that had to do with the War? Of course we’ll never know, but I think the country is loathe to criticize or replace President’s in time of War.
I think FDR would have worn out his welcome by the end of the third term if not sooner, but the War changed everything.
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A great bit of good fortune that he died in his fourth term and not his third. He understood who Henry Wallace was, after awhile, and dumped him for Truman.
Truman in 1948 is the first campaign I remember anything about. What I remember is that he said, on the radio, “Dewey, hooie”. Got my 5 year old attention with that one. It was after my birthday.
The radio was everything. That summer we listened to Zale-Graziano and Louis-Walcott and Robinson-Gavilan, and I was in my dad’s truck for the All Star Game as we drove to and from a dairy cattle auction. Then we would see the abbreviated version of sports events and speeches in the newsreels at the movies.
Anyway, if that Stalin sympathizer Wallace had succeeded to the Presidency, there would have been no Berlin airlift, no Marshall Plan, no SAC, no line drawn in Austria, Greece, Germany; it would have been bad news.
FDR did a great thing in WW2 – he actually left the operation of warfare to the military.
Hitler and Stalin did not, to their own detriment, and Churchill did not want to. He chafed over Ike having more authority than he did. He also was, with Churchill, a great war cheerleader. He instilled confidence in every family I knew, and most of them were Rs.
None of them would have voted for him in peacetime, of course.
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Mark:
He understood who Henry Wallace was, after awhile, and dumped him for Truman.
I think you give FDR way too much credit. My understanding is that both Democratic Party leaders and top Roosevelt advisors, knowing that Roosevelt was on his last legs and was unlikely to survive a full fourth term, negotiated to have Roosevelt drop Wallace and pick up Truman.
Roosevelt never really valued, nor bothered much with, any of his vice-presidents, one reason why he had three different VPs over the course of his 3 and a bit terms. Indeed, it was FDR’s first VP, John Garner, who coined the now famous description of the Vice-presidency as “not worth a bucket of warm piss.”
To give FDR credit for sagely dropping Wallace for Truman is, from my understanding of events, to give him too much credit.
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Mark
What a difference four years makes! You got to experience the final days of radio as the dominant media. Just four years later I was the first TV baby. I have no memories of radio other than as a teen listening to the “hits”!
But of course I am aware that back in the day, Soap Operas, dramas, everything was on radio. I envy your experience. I think folks gathering around a radio as opposed to a TV screen must have produced a different dynamic. I wonder for example how many times family members and friends listening to a show on the radio saw the expressions on each other’s faces and either reinforced what they were hearing or perhaps had the opposite effect. Listening to the radio as a communal experience must have been interesting.
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