The Standard of Living for the average Middle Class Person is going down, down, down! (bankruptcy, mortgage)

[Wild Style]

Originally Posted by Mircea

Well, sure, people had self discipline.



Got that wrong.

From the time Clinton took office up to the present the annual inflation rate has been 2.9%, far below the 6.3% in the UK and the double-digit inflation in Italy, Spain and many other countries. In fact, since 1974 the average inflation rate in the US has been 3.9% per year.

His inflation aspect is wrong but he is correct about the bubble creation and the F.I.R.E. economy we now have. Greenspan himself has admitted he screwed up.

Originally Posted by One Thousand

Discipline says don't buy the house if you can't afford it. End of story.

If people did that, then skyrocketing housing prices wouldn't exist; demand would slow down and prices would level.




What does that mean? Greenspan didn't have a thing to do with the bubble. He did what he had to do to get the economy moving after 9/11. He can't really help it if people chose to buy more house than they could afford. The Fed has nothing to do with bubbles. Nothing.

Calling it the Greenspan bubble is like calling the Dutch Tulip Craze "the sun bubble" because the sun did what it was supposed to do every morning.

Whoa, wait. So greenspan played no rule in these bubbles? Are you serious about that statement? He promoted each of these bubbles in the beginning, he lowered interest rates to spur on these things and on and on and on. Do some research for God sakes instead of jumping in head first with comments. Do a google search on Greenspan and the housing bubble for starters. There have been SO many articles on this subject.

[John23]

Originally Posted by One Thousand

Discipline says don't buy the house if you can't afford it. End of story.

If people did that, then skyrocketing housing prices wouldn't exist; demand would slow down and prices would level.




What does that mean? Greenspan didn't have a thing to do with the bubble. He did what he had to do to get the economy moving after 9/11. He can't really help it if people chose to buy more house than they could afford. The Fed has nothing to do with bubbles. Nothing.

Calling it the Greenspan bubble is like calling the Dutch Tulip Craze "the sun bubble" because the sun did what it was supposed to do every morning.

There have been alot of accomplices. Some of it has been stupidity, sure. But I don't know if *everybody* losing their house now was stupid.

-There's been a severe dumbing down of financial news. It's all the party line. If people were better informed, they could make better decisions.

-The big networks have been hijacked by Wall Street and the Whitehouse. They surely aided the stupidity. There's been little if any real discussion about how to live in the current economy.

-Little if any objective information about mortgages, mortgage brokers or whats going on behind the scenes. The whitehouse/any oversight committees have completely fumbled the ball.

-Terrible education/understanding about the FIRE economy in school. People were living in a manufacturing/real goods economy, and basically landed in a FIRE economy, and didn't have a clue what just happened.

[Mircea]

Originally Posted by Wild Style

Whoa, wait. So greenspan played no rule in these bubbles? Are you serious about that statement? He promoted each of these bubbles in the beginning, he lowered interest rates to spur on these things and on and on and on.

No, he lowered interest rates based on the Phillips curve, so that the US could have low unemployment and low inflation, unless you would enjoy being unemployed and not being able to buy anything with your unemployment benefits because of higher costs resulting from currency inflation.

Even if we were to assume what you said was true, you're essentially saying that any woman who runs around scantily clad deserves to be raped, or that someone owns a car is at fault if the car is stolen merely because they owned a car in the first place.

The fact that the Federal Reserve lowers interest rates does not grant people a license to act financially stupid. No one held a gun to people's heads and made them run up their credit card debt, or squander the equity in their home with HELOCs, or 2nd and 3rd mortgages, or buy "investment" property using an interest only loan, and no one forced them to have perpetual car payments.

The Middle Class isn't losing money, they're throwing it away of their own free will to satisfy every infantile urge and fantasy. They got what they wanted.

[Wild Style]

Originally Posted by Mircea

No, he lowered interest rates based on the Phillips curve, so that the US could have low unemployment and low inflation, unless you would enjoy being unemployed and not being able to buy anything with your unemployment benefits because of higher costs resulting from currency inflation.

Even if we were to assume what you said was true, you're essentially saying that any woman who runs around scantily clad deserves to be raped, or that someone owns a car is at fault if the car is stolen merely because they owned a car in the first place.

The fact that the Federal Reserve lowers interest rates does not grant people a license to act financially stupid. No one held a gun to people's heads and made them run up their credit card debt, or squander the equity in their home with HELOCs, or 2nd and 3rd mortgages, or buy "investment" property using an interest only loan, and no one forced them to have perpetual car payments.

The Middle Class isn't losing money, they're throwing it away of their own free will to satisfy every infantile urge and fantasy. They got what they wanted.

whoa whoa, so you are telling me low interest rates = low inflation? Did you graduate with your degree yet or are you still in school?

As for that other stuff you said, I won't debate you on it. I would say do research, maybe read Nourel Roubini, economist from NYU stern school of business. Or not.

[One Thousand]

Originally Posted by Wild Style

Whoa, wait. So greenspan played no rule in these bubbles? Are you serious about that statement? He promoted each of these bubbles in the beginning, he lowered interest rates to spur on these things and on and on and on. Do some research for God sakes instead of jumping in head first with comments. Do a google search on Greenspan and the housing bubble for starters. There have been SO many articles on this subject.

Yes, Greenspan encouraged consumer spending in one speech, realized it wasn't the best move when the market began to shift and came out within a month to rescind the position and warn homebuyers about being morons.

The nation was in a recession. He had no choice but to cut rates and admitted, as I recall, that he should of raised rates a quarter sooner than he did.

I hate armchair economists. You can read all the articles you like, but just like every other reporter out there, they're there to get their names out. People don't read if it's good news, but they read when someone's under attack.

I suggest you do your own real research-- the government produces a book, IIRC, titled "The Federal Reserve and What it Does". It's about 100pgs and will give you a primer into the workings and various philosophies behind different actions.

Perhaps, after reading that, you'll be freed from being towed by articles with political slants.

Originally Posted by John23

There have been alot of accomplices. Some of it has been stupidity, sure. But I don't know if *everybody* losing their house now was stupid.

What is the current foreclosure rate at? 4%? It's not "everybody". Far from it.

[Wild Style]

Originally Posted by One Thousand

Yes, Greenspan encouraged consumer spending in one speech, realized it wasn't the best move when the market began to shift and came out within a month to rescind the position and warn homebuyers about being morons.

The nation was in a recession. He had no choice but to cut rates and admitted, as I recall, that he should of raised rates a quarter sooner than he did.

I hate armchair economists. You can read all the articles you like, but just like every other reporter out there, they're there to get their names out. People don't read if it's good news, but they read when someone's under attack.

I suggest you do your own real research-- the government produces a book, IIRC, titled "The Federal Reserve and What it Does". It's about 100pgs and will give you a primer into the workings and various philosophies behind different actions.

Perhaps, after reading that, you'll be freed from being towed by articles with political slants.




What is the current foreclosure rate at? 4%? It's not "everybody". Far from it.

can you show me the speech where he told people not to purchase these exotic loans? Because the only place I know he made such a speech at was in bizarro world. But back in reality he didn't. He talked up exotic loans as the best thing since sliced bread, lowered interest rates and helped to encourage this unsustainable housing growth/bubble.

As for being a 'armchair economist', I have a degree in the subject, do you? See the difference here is, I can do actual research on the subject and apply my knowledge in economics to discern facts from fiction. Generally I read from other economist, most have their own websites. One of my favorites in Nourel Roubini. I suggest you do some actual research, or not.

[Michigansnowflake]

[quote=One Thousand;3689387]Yes, Greenspan encouraged consumer spending in one speech, realized it wasn't the best move when the market began to shift and came out within a month to rescind the position and warn homebuyers about being morons.

The nation was in a recession. He had no choice but to cut rates and admitted, as I recall, that he should of raised rates a quarter sooner than he did.

I hate armchair economists. You can read all the articles you like, but just like every other reporter out there, they're there to get their names out. People don't read if it's good news, but they read when someone's under attack.

I suggest you do your own real research-- the government produces a book, IIRC, titled "The Federal Reserve and What it Does". It's about 100pgs and will give you a primer into the workings and various philosophies behind different actions.

Perhaps, after reading that, you'll be freed from being towed by articles with political slants.



I am supposed to believe a government produced book?

[One Thousand]

Originally Posted by Wild Style

can you show me the speech where he told people not to purchase these exotic loans? Because the only place I know he made such a speech at was in bizarro world. But back in reality he didn't. He talked up exotic loans as the best thing since sliced bread, lowered interest rates and helped to encourage this unsustainable housing growth/bubble.

As for being a 'armchair economist', I have a degree in the subject, do you? See the difference here is, I can do actual research on the subject and apply my knowledge in economics to discern facts from fiction. Generally I read from other economist, most have their own websites. One of my favorites in Nourel Roubini. I suggest you do some actual research, or not.

Sure... this is the internet, like you, I have a dozen degrees. Get real, Armchair.

Here's an article about Greenspan commenting on housing: Greenspan Warns of Housing Bubble

Read his book: The Age of Turbulence. I liked that one too.

Originally Posted by Michigansnowflake

I am supposed to believe a government produced book?

It wasn't political.

[Hasdrubal]

wow, some people here talk like if America was some Government controlled-country...America is the number one capitalist country, and the last years have proven that's not the right way to go. The rich have gone richer, while the middle class has been enduring hard situations. This Administration has encouraged individual responsibility along the line "spend what you want, it will be good for you". People have gone bankrupt because they had the feeling they could rely on the credit system and it has failed. Some Libertarians could argue that is due to the Fed involvement in the economy, and I kinda agree, but I believe they have enforced the wrong policies. Students have to face costly loans if they wanna go to college, and the healthcare system is pretty ruthless, meaning that if you get sick, be ready to choke on your medical bills. I believe in capitalism, but sorta regulated with fair policies. Reaganomics were probably the moment when the US had the most capitalistic system ever, and only the rich profited from it. America is based on its middle class, yet they cannot apply for welfare programs aimed for the poor ones, and they won't be able to live a decent existence through tax cuts and all that free market propaganda. Americans have this consumerism trend being shoved down their throats, but I can bet they would happily give up on that fancy SUV and cool hot-tub in the yard if they could have more vacation time and more family life.

[One Thousand]

Originally Posted by Hasdrubal

wow, some people here talk like if America was some Government controlled-country...America is the number one capitalist country, and the last years have proven that's not the right way to go.

One of the many great things about the U.S. is that the country is structured so that if enough individuals within a state sees it fit, you can implement more socialism to experiment with the practical potential of the applied theory against 49 other states.

The benefits are many, but the best two are 1)a socialism that is appropriate for the individual needs of each state can be implemented. Instead of a big, slow system that killed the USSR being implemented across the entire nation, something more nimble and responsive can be applied. The other significant benefit, IMO, is that the oppression that is inherent to socialism is reduced. If an American who lives in California feels the tax burden and deficit that accompanies that system's form of socialism isn't consistent with his/her beliefs, rather than the emotional depression of oppression that might otherwise effect him/her taking hold, that person can simply move to another state that's more consistent with his/her values.

Capitalism held by the central government allows for more freedom of the states and minimizes overall oppression. I wish I had the choice between moving to another state where I didn't have to pay 15.65% of my income to Social Security. The fed has failed this system miserably and is ripping us all off and there's nothing that I can do but produce less because I can't come to terms with being ripped off so I only produce enough to live. That's the oppression of socialism... endless depression and lack of hope. Socialism in it's watered down U.S. version has brought me enormous heartache. I'd rather have less than more.