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Old 03-20-2009, 09:28 AM
 
1,552 posts, read 4,394,750 times
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The NPR radio program "This American Life" has done two excellent radio episodes devoted to the housing bubble and its collapse. These programs are available in podcast format free of charge, to listen to on your computer or your i-Pod.

The first one, done back in May 2008, almost evokes a feeling of nostalgia for the time back when the idea of a Second Great Depression seemed remote. Nonetheless, it's a good introduction to the housing bubble from the early days of the collapse:

This American Life

Recently, they've done another program on the related issue of the bank failures:

This American Life

For any of you out there with i-Pods and a long commute, these are perfect to listen to on the train, or you can listen to the podcast from your computer. They're not nearly as dry and boring as you would expect from a radio program talking about finances -- they're very well done.

Here's a bit of the transcript from near the end of the second episode, after all the analysis of the housing bubble, the financial crisis, and the bail outs:

"We’re looking at a graph, and it's, basically, a measure of how much debt we the citizens of America, are in. How much we all owe--on our mortgages and credit cards and auto loans--compared to the economy as a whole, the GDP. And for most of history, the amount we owed was a lot smaller than the economy as a whole. This ratio, household debt to GDP bounces along around between 30 and 50 percent, for most of the '30s and '40s 50s, 60s, and 70s, right into the 80s. Then it breaks through 50 % in the 80s, starts heading up in the 1990s. And then .. from 2000 to 2008, it just goes, almost a hockey stick, it goes dramatically upward.

Like a rocket.

It hits 100% of GDP. That is to say, currently, consumers own 13 trillion dollars when the GDP is $13 trillion. That’s a $100 trillion owed by individuals. That is a ton.

Has there ever been a time where we owed that much before?

Guess what? The earlier peak, which is way over on the left part of the chart, where debt is 100% of GDP, was in 1929. This is a map of twin peaks. One in 1929 and one in 2007.

That chart is the most striking piece of evidence that I have that what is happening to us is something that goes way beyond toxic assets in banks, it’s something that had little to do with mortgage securitization, or ethics on Wall Street, or anything else. It says the problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us. We have over-borrowed. We have been living very high on the hog. We are, our standard of living has been rising dramatically over the last 25 years, and we have been borrowing to make much of that prosperity happen."

We've been living a lie. And more consumption, more spending, more lending and more borrowing is the absolute worst thing we can do right now. We are like heroin junkies who think that another hit is going to solve our problems, except our drug is debt and consumption.
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Old 03-20-2009, 12:04 PM
 
364 posts, read 781,270 times
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Wow!!!!! Good links.

Thanks a lot.
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Old 03-20-2009, 01:15 PM
 
Location: New Jersey
3,913 posts, read 4,349,920 times
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Quote:
Originally Posted by Lusitan View Post
more consumption, more spending, more lending and more borrowing is the absolute worst thing we can do right now.
funny thing is, when W was engaged in deficit spending, the republican spin machine had us believe that it was the right thing to do.
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Old 03-20-2009, 01:21 PM
 
1,552 posts, read 4,394,750 times
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Originally Posted by JG183 View Post
funny thing is, when W was engaged in deficit spending, the republican spin machine had us believe that it was the right thing to do.
Yes, you know NPR is nothing but a right-wing radio station run by the Republican spin machine, right?

You can try to avoid the uncomfortable topic with lame jabs at Bush, but it doesn't get you anywhere when it comes to dealing with reality.
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Old 03-20-2009, 01:32 PM
 
Location: NJ
386 posts, read 794,104 times
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Quote:
Originally Posted by Lusitan View Post
Yes, you know NPR is nothing but a right-wing radio station run by the Republican spin machine, right?

You can try to avoid the uncomfortable topic with lame jabs at Bush, but it doesn't get you anywhere when it comes to dealing with reality.
Reality and JG183 - not cosmic neighbors.

Thank for the links. Excellent work by NPR.
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Old 03-20-2009, 01:36 PM
 
Location: New Jersey
3,913 posts, read 4,349,920 times
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no no, I agree that the overspending by consumers (especially those who had no business buying the things they did) was a root cause.

but, the deed is done -- and if more spending (in the short term) is what's needed to get out us of the hole, then I'm all for it. It just has to be the right amount of spending, and on the right things... e.g. our nation's infrastructure is long overdue for repairs/upgrades.
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Old 03-20-2009, 01:41 PM
 
744 posts, read 1,324,145 times
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Quote:
Originally Posted by JG183 View Post
no no, I agree that the overspending by consumers (especially those who had no business buying the things they did) was a root cause.

but, the deed is done -- and if more spending (in the short term) is what's needed to get out us of the hole, then I'm all for it. It just has to be the right amount of spending, and on the right things... e.g. our nation's infrastructure is long overdue for repairs/upgrades.
Yes because the best way to fix the problem of being over-leveraged is to double down and borrow some more.

Actually I do play poker sometimes, that does occasionally turn out well

I must admit though if idiots (other than the Fed which is making things confusing by messing with the market) are willing to loan the US government money at super low interest rates then take it while the getting it good, since one day they won't be willing to do so.
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Old 03-20-2009, 05:57 PM
 
17,852 posts, read 17,445,182 times
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Well, if I read correctly, the govt decided two days ago to print up a whole, big sh**load of money.

That's going to make things interesting.

Dems, Repubs same players, different uniforms IMO.
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Old 03-20-2009, 06:27 PM
 
3,269 posts, read 9,448,186 times
Reputation: 2021
Thanks for the links...will listen later when little people aren't running around and jumping on me.
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