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Money dropped from a helicopter is no where near the same as building a road. One employs people
if you drop money from helicopters or give tax cuts or build roads (huge part of stimulus) even BO agreed it puts money instantly back in economy where it creates artifical demand that requires artificial non sustainable employment to supply!! 1+1 =2
I've actually gotten A's in every economics class ive ever taken. I can tell you've never been in a college class before.
You realize FDR's new deal coalition stayed in power until the late 60's right?
If it wasnt the war that got us out of the depression what was it genius?
I've actually gotten A's in every economics class ive ever taken. I can tell you've never been in a college class before.
actually it was you who said I was the first person to say cash for clunkers was a bubble, and it was you who said "there is no "data set" to show that Fanny caused the recession, and you who still lacks the IQ to understand mal-investment versus sustainable real investment.
I have yet to see the data saying fannie and freddie were the cause of the recession.
I have, however, seen quite a bit of data that would indicate two things. One, that F/F were followers, not leaders. Two, the quality of mortgages held by F/F was higher than those held by private banks.
See, thats the problem with this argument.
You think the government spends $700 billion and then its just gone. You think its a math problem where you just do one simple addition.
In reality you would have to follow the path of those dollars through the economy to determine its impact, a fairly hard task.
The end result is that stimulus has an effect even after the money is spent. Its not even debatable.
I have yet to see the data saying fannie and freddie were the cause of the recession.
I have, however, seen quite a bit of data that would indicate two things. One, that F/F were followers, not leaders. Two, the quality of mortgages held by F/F was higher than those held by private banks.
So Sorry: Actually the SEC sued Fanny Freddie last week:
Pelican Parts:
Mr. Mozilo and Fannie essentially were business partners in the subprime business. Countrywide found the customers, while Fannie provided the taxpayer-backed capital. And the rest of the industry followed.
Bloomberg 12/21/11 on SEC action:
The truth is that Fannie and Freddie engaged in far greater financial-reporting abuses, which couldnt have happened without the governments knowledge and cooperation.
Fannie and Freddie continued to maintain they were adequately capitalized, as did their regulator, until they were placed into conservatorship in September 2008. This farce wouldnt have been sustainable had the two companies been forthright about their earnings and asset values.
:
WSJ/12/21/11 on SEC action against Fanny Freddie
Fanny degraded its underwriting standards to increase its market share in the sub prime loans... Fanny led private lenders into the sub prime market loans... by the mid 2000's other mortgages lenders developed other similar reduced documentation loans.....Fanny hid the risk of sub prime loans to investors... Fannie said its Alt. A exposure was 11% of its portfolio, when it was closer to 23% - a 341 billion difference...Dallavecchia told investors that Fanny's sub prime exposure was
"immaterial".... we see part of our mission to make mortgages available to people who don't have perfect credit...the Freddie record was similarly incriminating...private lenders could never have done as much harm if Fan and Fred weren't providing tens of billions in tax payer subsidized liquidity to lend on easy terms to borrowers who couldn't[t pay it back...Congress created the 2 mortgage giants as well as their affordable housing mandates.
Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this [Fanny Freddie] is one of the great success stories of all time. And we don't want to lose sight of that and [what] has been pointed out by all of our witnesses here, obviously, the 70% of Americans who own their own homes today, in no small measure, due because of the work that's been done here. And that shouldn't be lost in this debate and discussion. . . .
Rep. Waters: However, I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn't broke. Housing is the economic engine of our economy, and in no community does this engine need to work more than in mine. With last week's hurricane and the drain on the economy from the war in Iraq, we should do no harm to these GSEs.[Fanny Freddie] We should be enhancing regulation, not making fundamental change.
Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine. In fact, the GSEs have exceeded their housing goals. . . .
Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?
Mr. Raines?
Mr. Raines: No, sir.
Mr. Frank: Mr. Gould?
Mr. Gould: No, sir. . . .
Mr. Frank: OK. Then I am not entirely sure why we are here. . . .
Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.
* * *
Senate Banking Committee, Oct. 16, 2003:
Sen. Charles Schumer (D., N.Y.): And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.
The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his spouse. Another Washington Post report said Frank called Moses his lover and that the two were still friends after the breakup.
Frank was and remains a stalwart defender of Fannie Mae, which is now under FBI investigation along with its sister organization Freddie Mac, American International Group Inc. (NYSE:AIG) and Lehman Brothers (NYSE:LEH) all recently participants in government bailouts. But Frank has derailed efforts to regulate the institution, as well as denying it posed any financial risk. Franks office has been unresponsive to efforts by the Business & Media Institute to comment on these potential conflicts of interest.
While the relationship reportedly ended 10 years ago, Frank was serving on the House Banking Committee the entire 10 years they were together. The committee is the primary House body which along with the Office of Federal Housing Enterprise Oversight (OFHEO) has jurisdiction over the government-sponsored enterprises.
Just a month before, Frank had aggressively thwarted reform efforts by the Bush administration. He told The New York Times on Sept. 11, 2003, Fannie Mae and Freddie Macs problems were exaggerated, a gross miscalculation some five years later with costs estimated to be in the hundreds of billions.
These two entities Fannie Mae and Freddie Mac are not facing any kind of financial crisis, Frank said to the Times. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.
. J. Bridges says:
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.
For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.
Warren Buffett: "There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places".
Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!
You realize FDR's new deal coalition stayed in power until the late 60's right?
If it wasnt the war that got us out of the depression what was it genius?
perhaps it had something to do with the rest of the world's economies being flat out 100% destroyed? How would our economy be doing tomorrow if we destroyed China, Japan, Europe, today? Isn't thinking fun??
See, thats the problem with this argument.
You think the government spends $700 billion and then its just gone. You think its a math problem where you just do one simple addition.
In reality you would have to follow the path of those dollars through the economy to determine its impact, a fairly hard task.
The end result is that stimulus has an effect even after the money is spent. Its not even debatable.
All agree, dropping money from a helicopter to buy a car or snack or bridge creates artificial velocity that causes mal-investment and recession until the Republican free market has reallocated resources to their proper sustainable places. For example, a carpenter must retrain and get a real job in the private economy when the liberal make work bubble bursts.
Lol fiscal policy created a bubble in the depression?
this is why the economy never recovered for 10 years or how liberalism made a recession a Great Depression..
And let me guess, the war got us out of it?
who said that??????????? Anyone knows conservatives think that idea is absurd.
Marvelous!!!The bad news in red.
With all the leftloon bitching and moaning about "income inequality", how can throwing regulatory obstacles like this in the way do anything to help the business ventures of the sainted "little guy"?
The only people who create real, sustainable jobs are in private businesses -- if they're unsubsidized.
Some CEOs are upset that people don't appreciate what they do. So they formed a group called the Job Creators Alliance.
Brad Anderson, former CEO of Best Buy, joined because he wants to counter the image of businesspeople as evil. When he was young, Anderson himself thought they were evil. But then he "stumbled into a business career" by going to work in a stereo store.
"I watched what happens in building a business. [My store] the Sound of Music, which became Best Buy, was 11 years [old] before I made a dollar of profit."
In 36 years, he turned that store into a $50 billion company.
Tom Stemberg, founder of Staples, got involved with the Job Creators Alliance because he's annoyed that the government makes a tough job much tougher.
He complains that government mostly creates jobs -- that kill jobs.
"They're creating $300 million worth of jobs in the new Consumer Financial Protection Bureau," Stemberg said, "which I don't think is going to do much for productivity in America. We're creating all kinds of jobs trying to live up to Dodd-Frank ... and those jobs don't create much productivity.
Now, Stemberg runs a venture capital business. "I helped create over 100,000 jobs myself," he said. "Pinkberry and City Sports and J. McLaughlin are growing and adding employment."
To do that, he had to overcome hurdles placed in the way by government.
"All that we get is grief and more hoops to jump through and more forms to fill out and more regulations to comply with," complained Stemberg. "Fastest-growing investment segment in venture capitalism: compliance software."
Read more at the Washington Examiner: Job creators fight back | John Stossel | Columnists | Washington Examiner
Yet those weren't the people whining in your OP and not the ones he was referring to....the people in your op are not small business owners and are more than likely paying 15% only.Wow...All I have to do is say "economic dilettante" and look what happens.Yeah......but the one percenters make almost all of their money off of capital gains.
Most of the "1%-ers" are small business operators who work for and pay taxes on profits.
Maybe you can even see a few of them from your tent in the park.
Nobody in their right mind is ever going to agree that your imagined 'middle class' --or any class for that matter-- was better off with double digit unemployment and double digit inflation.
I'm not convinced Obama has tried to narrow income gaps at all.
By the way, a note on that graph. That nicely delineates the three periods of U.S. industrial economic history: 1900-1940, 1940-1980, and 1980-present. You notice from the graph that income inequality took a steep plunge during World War II, and stayed down, fluctuating around a lower midpoint, until the Reagan administration took over. It has soared ever since then. So we have a middle 40 years in which income gaps were dramatically lower than they had been or later became. OK? Agreed on that?
Now here's the other thing. During the years from 1900 to 1940, with high income gaps, per capita economic growth per year averaged a bit over 2 percent. The same has been true since 1980. But from 1940-1980, it was well over 4 percent per year. So during this period when income gaps were narrow -- when, by supply side thinking, the economy should have collapsed in ruin for lack of incentive or lack of capital -- the economy actually outperformed the other periods, run on supply-side principles, by more than two to one.
And that's how I know that supply-side thinking is a bust, and that no, the rich ARE NOT the "job creators." The proof is in the pudding.
How DARE more people become wealthy!!!! Quick! Stop them!!!
