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Then why did Volcker raise interest rates under Reagan and received credit for turning a bad economy into a good one?
Volcker raised interest rates to reduce inflation. Greenspan dropped rates during inflation. The chart I posted earlier:
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People didn't pay their loans. There was an increase in new home owners who didn't make even one payment. This is what happens when you lower standards.
No, this happened because...
The economy was losing jobs (2.97 million private sector jobs were lost during FY2001, FY2002 and FY2003), income was dropping but house prices were still rising and solution was for people to spend more (tax cuts), get easy credit (interest rate cuts) and make it even easier for the top financial institutions to lend at an obscene rate of 30:1 (or more).
What other outcome did you expect out of this?
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Crony capitalism is picking the winners and losers. Solyndra is an example of crony capitalism.
You've been fed BS, and you're spewing it out. There is a reason we're looking more and more like a country going backwards when it comes to new ideas and pursuing them. We politicize failures, ignore success and promote more of the same old push by snake-oil sales person to keep believing in them. Green energy... yeah, we're better off serving China's interests than trying to build on our own, encouraging domestic entrepreneurs would be cronyism after all.
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Anyone with a little money can invest and take advantage of the lower capital gain rates.
Not anyone. Only with people who can afford to invest and not a lot of Americans are in a position to do that. A vast number of households live on month to month basis. They can't afford to risk any part of their wages. And that is assuming that they are educated about it.
Did he explain why he lowered it to begin with? That was the mistake, not that he left them there for too long.
That they were left there too long and continue to be is the problem. That is what he admitted to. Nothing changes with short term changes.
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And why do we have this problem?
Because as has been noted over and over, the governments main concern has been and will continue to be the markets until we quit voting for the status quo.
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This is why I hate arguments that are based on "I'm shooting in the dark, and you should too". But let me address this idea of regulations getting in the way... ANY regulation will get in the way. However, we can agree on the fact that we could rid some regulations, but don't keep screaming about "government control of economy". It is bound to be a part of ANY capitalistic society.
The government has no business making sure that certain segments of the economy gets a boost over the interests of other parts. The government should never be picking winners here.
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So, let us talk Gramm-Leach-Bliley Act, which did that. What drove congress vote on this bill? This is how the bill was voted:
House: 343-85 (Yes: 205 republicans and 138 democrats; No: 16 republicans and 69 democrats)
Senate: 54-44 (Yes: 53 republicans and 1 democrat; No: 0 republicans and 43 democrats)
Well, you quoted numbers....you didn't really talk anything but to your question....many things did. The banks don't play along with expanding housing unless they get something in return being the major one.
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Which isn't without controversies. Ask Ron Paul.
Ron Paul has absolutely nothing to do with the governments decision to totally ignore Sarbanes/Oxley.
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Are you okay with slow and steady? Or, are you among those who is blaming Obama for recovery not being brisk enough?
My belief has nothing to do with Obama. I believe Bush is an ******* for the bail-out and while I wasn't going to vote for McCain because of his insistence on trampling on our rights, his racing back to help save the bail-out would have otherwise sealed my decision to not vote for him.
Believe it or not there are some people who have principled positions.
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Don't worry about your position. Worry about your arguments. They demonstrate your position.
You seem to not actually want to discuss my positions but rather your idea of what you think they are.
A perfect score and the test was such a joke too. If you didn't make a perfect score you should consider donating your brain to science since you're obviously not using it.
Volcker raised interest rates to reduce inflation. Greenspan dropped rates during inflation. The chart I posted earlier:
Interest rates cut when economy is struggling, and increased as it recovers.
This is what I was refering to. The economy was struggling yet rates rose
The disconnect is not understanding the term inflation and where it comes from. Inflation is the increase in the money supply. The feds "printing" it up. If you want to slow inflation quit printing money and stop the out of control government spending.
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Originally Posted by EinsteinsGhost
No, this happened because...
The economy was losing jobs (2.97 million private sector jobs were lost during FY2001, FY2002 and FY2003), income was dropping but house prices were still rising and solution was for people to spend more (tax cuts), get easy credit (interest rate cuts) and make it even easier for the top financial institutions to lend at an obscene rate of 30:1 (or more).
What other outcome did you expect out of this?
When you lower lending standards, efficiency suffers. The loans were doomed to fail from day one, basic economics tell you that, and those type of loans increased dramatically later on.
It started by making reckless loans. Treat the cause not the symptom.
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Originally Posted by EinsteinsGhost
You've been fed BS, and you're spewing it out.
Awww did someone get their panties in a bunch because I showed them they didnt know what crony capitalism is AND I used their chosen one to do it?
Guess what? Bailouts are crony capitalism and both big government parties wanted them. Feel better now?
The only bs spewers are the ones who redefine words in order to fit a twisted agenda.
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Originally Posted by EinsteinsGhost
There is a reason we're looking more and more like a country going backwards when it comes to new ideas and pursuing them. We politicize failures, ignore success and promote more of the same old push by snake-oil sales person to keep believing in them. Green energy... yeah, we're better off serving China's interests than trying to build on our own, encouraging domestic entrepreneurs would be cronyism after all.
yet here you are promoting the same destructive policies of managing the economy and anointing winners and losers that have always failed in the past. Quit treating symptoms, treat the cause.
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Originally Posted by EinsteinsGhost
Not anyone. Only with people who can afford to invest and not a lot of Americans are in a position to do that. A vast number of households live on month to month basis. They can't afford to risk any part of their wages. And that is assuming that they are educated about it.
Because we cannot manage our money well. We do get enticements from government with easy credit to spend, spend, spend and that adds to our inability to earn and save money.
Easy credit like the dot com bubble, the housing bubble and what we currently see in the out of control rising cost of higher education.
Worse we get government to manage things. I know you're fond of that. Even though it has been proven many times over that government raises costs. Lack of competition and accountability do that. Just look at the sky rocketing costs of health care, especially since Reagan got in office.
When are you going to quit listening the ones who were wrong about the economy? The manipulation of the free market only works for the manipulators. Wonder why people in Congress and the one percent saw their wealth rise when the people saw theirs crash?
Hazlett told us about the crash in "Economics in One Lesson" in 1946 and specifically addressed the housing crash with his up date in 1979. I'm sure it had to do with Carter starting the business of "affordable housing".
Last edited by Loveshiscountry; 11-01-2012 at 04:28 PM..
That they were left there too long and continue to be is the problem. That is what he admitted to. Nothing changes with short term changes.
So, you're basically agreeing with his idea of cutting interest rates and also that he shouldn't have kept it low for too long. Consequently, you're disagreeing with my take that interest rates should not have been cut to begin with, especially since price inflation was in progress. True?
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Because as has been noted over and over, the governments main concern has been and will continue to be the markets until we quit voting for the status quo.
Your vote can only change that, if you don't promote play of money in politics, directly or indirectly. So, do you agree with Citizens United decision? I never did with the blasphemy.
Now, let me highlight the other side of your ideas as well. I’m sure you subscribe to the idea that social security be privatized? If that were the case, wouldn’t markets be a greater concern for the government if it affects the general welfare of the populace? As it is, 2008-2009 recession had a disastrous effect on investment. A person with millions isn’t as affected by it, as would an average household about to rely on “investments”. Do tell why government should completely deregulate the markets and why you feel there will be no implications.
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The government has no business making sure that certain segments of the economy gets a boost over the interests of other parts. The government should never be picking winners here.
Government isn't supposed to be picking winners, like treating oil, natural gas and coal industry as being the saviors and deserve exceptions. But, there is very much a need for the government to step in and encourage investments in these and other areas that hold promise. That is not picking winners, that is encouraging entrepreneurs to try and be winners. Many will lose, but it is normal to expect a few will emerge. Now, why should I promote discouraging that?
Other countries aren't sitting on their rear end, and if more Americans were to think like y'all do, we're doomed. Excuse me for not joining in.
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Well, you quoted numbers....you didn't really talk anything but to your question....many things did. The banks don't play along with expanding housing unless they get something in return being the major one.
My numbers were to highlight the state of politics, AND to dig deeper into the subject on how things work. But since you want me to speak more, let me ask you of one major finance related bill that has been pushed by "fiscal conservative" republicans over last two decades that you believe has had a positive effect on nation's economic health.
As for the argument on banks, they are in business of doing business, not looking for nation's welfare. If there is an opportunity to profit, why do you think they should think twice about not grabbing the opportunity? They clearly bought a lot of politicians to push thru their agenda. No? And they can do that because people tend to think that getting government out of the way will get it all done. Instead, it should be about fixing the government to do it right. Why isn't THAT the mantra?
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Ron Paul has absolutely nothing to do with the governments decision to totally ignore Sarbanes/Oxley.
I asked, what do you think his personal take is on the issue? And last I checked, he was a part of the government you speak of unless your idea of government is dramatically different than mine. I do hear a lot about "government" versus "us" by republican politicians though.
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Believe it or not there are some people who have principled positions.
Being principled is no guarantee of doing things right.
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You seem to not actually want to discuss my positions but rather your idea of what you think they are.
So, you're basically agreeing with his idea of cutting interest rates and also that he shouldn't have kept it low for too long. Consequently, you're disagreeing with my take that interest rates should not have been cut to begin with, especially since price inflation was in progress. True?
For you to state that they should never have been lowered in the first place was simply a way to restate what I said so that you wouldn't have to agree with me.
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Your vote can only change that, if you don't promote play of money in politics, directly or indirectly. So, do you agree with Citizens United decision? I never did with the blasphemy.
I can decide to not vote for the status quo whether a politician spends $1000 or 1 billion. How much they spend has no bearing on my vote.
It's none of my business what people want to do with their money here. If you allow it to influence your vote that would be your problem, not the problem of the money spent.
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Now, let me highlight the other side of your ideas as well. I’m sure you subscribe to the idea that social security be privatized?
No, this is not my position but this is not a discussion on S.S.
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Government isn't supposed to be picking winners, like treating oil, natural gas and coal industry as being the saviors and deserve exceptions. But, there is very much a need for the government to step in and encourage investments in these and other areas that hold promise. That is not picking winners, that is encouraging entrepreneurs to try and be winners. Many will lose, but it is normal to expect a few will emerge. Now, why should I promote discouraging that?
Investors are going to invest. They will invest no matter what. No, the government should not be picking winners and losers here.
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Other countries aren't sitting on their rear end, and if more Americans were to think like y'all do, we're doomed. Excuse me for not joining in.
"Other countries" is quite a generalization. There are "other countries" in terrible shape right now. "Other countries" does not an argument make.
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My numbers were to highlight the state of politics, AND to dig deeper into the subject on how things work. But since you want me to speak more, let me ask you of one major finance related bill that has been pushed by "fiscal conservative" republicans over last two decades that you believe has had a positive effect on nation's economic health.
I'm not here to defend the Republicans. I will note the earlier Sarbanes/Oxley would have if it had been enforced.
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As for the argument on banks, they are in business of doing business, not looking for nation's welfare. If there is an opportunity to profit, why do you think they should think twice about not grabbing the opportunity? They clearly bought a lot of politicians to push thru their agenda. No? And they can do that because people tend to think that getting government out of the way will get it all done. Instead, it should be about fixing the government to do it right. Why isn't THAT the mantra?
The government allowed them to do what they did. My argument is that the government completely dropped the ball here in a bi-partisan manner and you seem to want to turn that into an argument that I want the banks to be able to do whatever they want.
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I asked, what do you think his personal take is on the issue? And last I checked, he was a part of the government you speak of unless your idea of government is dramatically different than mine. I do hear a lot about "government" versus "us" by republican politicians though.
He believed that many involved should be in prison. Ron Paul wanted to bring charges. Him and very few others.
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Being principled is no guarantee of doing things right.
I rarely agreed with someone like Dennis Kucinich but I respected him when he would be true to his principles.
Government isn't supposed to be picking winners, like treating oil, natural gas and coal industry as being the saviors and deserve exceptions. But, there is very much a need for the government to step in and encourage investments in these and other areas that hold promise. That is not picking winners, that is encouraging entrepreneurs to try and be winners. Many will lose, but it is normal to expect a few will emerge. Now, why should I promote discouraging that?
Encourage investments for ALL. Not for only gas or only oil. You get the payout it but I don't, even though we are in the same field? That is crony capitalism. That IS picking winners and losers. Especially when it is subsidized. That is the problem. Subsidizing specific industries or only a few industries in that field while ignoring others.
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Even though it has been proven many times over that government raises costs. Lack of competition and accountability do that. Just look at the sky rocketing costs of health care, especially since Reagan got in office.
