FOMC 2006 Transcripts: The 1% Solution

Discussion in 'Economy' started by georgephillip, Jan 22, 2012.

  1. georgephillip
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    georgephillip Gold Member Supporting Member

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    Anyone remember 2006, the year when the $8trillion housing bubble began to deflate?
    Maybe now we know why the Fed waits five years before making their crimes public:

    "There is no one in the eight FOMC meetings who suggests that the economy faces any serious turbulence ahead. There is not even discussion that a mild recession could be in sight.

    "In fact, at the last meeting of 2006 (pdf), we hear Janet Yellen, who was then the president of the San Francisco Bank and is now vice-chair of the board of governors, comment that:

    "'There are some encouraging signs that the demand for housing may be stabilizing … After a precipitous fall, home sales appear to have leveled off … Finally, the gap between housing prices and fundamentals might not be as large as some calculations suggest.'"

    Alan Greenspan's Ship of Fools | Truthout

    At the last FOMC meeting in 2006 some members expressed concern that the unemployment rate of 4.5% was too low to keep inflation in check.

    They did solve that problem for the benefit of the 1%.
    Not so much for the 99%.
     
  2. georgephillip
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    georgephillip Gold Member Supporting Member

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    "The FOMC seemed utterly oblivious to the fact that the savings rate had been driven to record lows by the wealth generated by the housing bubble; and that this consumption boom would end when the housing bubble wealth disappeared.

    "People who no longer had equity in their homes could not borrow to support their consumption.

    "Furthermore, those who had expected that home equity would support them in retirement would soon discover that they had to cut back in a big way on consumption in order to rebuild their savings.

    "It also should have been obvious that a serious wave of defaults was going to hit the financial system.

    "Housing is always a highly leveraged asset, but that was far more true in 2006 than at any prior point in history, as many people were buying homes putting literally nothing down.

    "With prices plunging, millions of homeowners would fall under water. This guaranteed more foreclosures and higher losses on each one."

    Alan Greenspan's Ship of Fools | Truthout

    It seems obvious those serving on the Federal Reserve's Board of Governors in 2006 weren't unaware of the "epidemic of mortgage fraud" the FBI began warning about in 2004.

    It's equally obvious the Fed choose to serve the rich at the expense of everyone else.
     
  3. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    of course thats 100% absurd since the Wall Street rich mostly went bankrupt!!
     
  4. georgephillip
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    georgephillip Gold Member Supporting Member

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    Then explain why the world's richest have now recouped their losses from 2008 and there are 11 million more of them than before the latest Wall Street looting.
     
  5. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    This month the IRS released more detailed tax data for 2009, and the nearby table records the decline of the taxpaying rich.


    In 2007, 390,000 tax filers reported adjusted gross income of $1 million or more and paid $309 billion in taxes. In 2009, there were only 237,000 such filers, a decline of 39%. Almost four of 10 millionaires vanished in two years, and the total taxes they paid in 2009 declined to $178 billion, a drop of 42%.

    Those with $10 million or more in reported income fell to 8,274 from 18,394 in 2007, a 55% drop. As a result, their tax payments tanked by 51%. These disappearing millionaires go a long way toward explaining why federal tax revenues have sunk to 15% of GDP in recent years. The loss of millionaires accounts for at least $130 billion of the higher federal budget deficit in 2009. If Warren Buffett wants to reduce the deficit, he should encourage policies to create more millionaires, not campaign to tax them more
     
  6. georgephillip
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    georgephillip Gold Member Supporting Member

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    And by June 2011 the worlds "high net worth individuals" defined as having more than $1 million of free cash by Merrill Lynch and Capgemini surpassed their 2007 peak of $40.7 trillion largely because of austerity budgets implemented by governments owned by the richest 1%.

    It's time to stop borrowing from the rich and tax them at the same rates Eisenhower did.
     
  7. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    Are you talking the world including China and India? What does it have to do with austerity??? The more rich the better since a rising tide lifts all boats. Today, for example, the poor have state of the art health care despite not being able to pay for it or invent it. This is not trickle down it is tsunami down Republican capitalism!



    of course thats idiotic since 1) in the 1950's we had the only economy left standing after WW2, 2) even liberals like Charlie Rangel want to lower taxes to be competitive, 3) the rich create our jobs and products so the more we steal from them the less they can help us, 4) it makes more sense to tax the poor since they don't use the money to create new jobs and new products.
     
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    Last edited: Jan 22, 2012
  8. DSGE
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  9. georgephillip
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    georgephillip Gold Member Supporting Member

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    That"tsunami of Republican capitalism" coincided with more US job losses in a single decade than any other state in history with the exception of the USSR during the last ten years of its existence.

    India has everything to do with austerity according to the 250,000 debt-ridden farmers who've committed suicide and the 800 million survivors who've seen their boats scuttled to make room for the richest 100 of their countrymen to consolidate assets equivalent to a quarter of India's GDP.

    The rich don't create jobs.
    Middle class demand does.
    It makes more sense to tax the rich at Eisenhower rates and fund a new WPA.
    If the Koch brothers don't like it, they can move to Mumbai.
     
  10. georgephillip
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    georgephillip Gold Member Supporting Member

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    What's your definition of a "smidgen"?

    "It may not have been obvious who was going to take the hits, but economists who could see the world with clear eyes knew that big hits were coming.

    "Unfortunately, none of them was sitting on the FOMC.

    Here's what Frederick Mishkin, a Federal Reserve Board governor who later played a starring role in the movie Inside Job, had to say about the risks from the housing market in that same December 2006 meeting:

    "'I don't see any indications that we will have big spillovers to other sectors from weak housing and motor vehicles. In that sense, there's a slight concern about a little weakness, but the right word is I guess a "smidgen," not a whole lot.'"

    Alan Greenspan's Ship of Fools | Truthout
     

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