I just want to start by saying it's really a pleasant surprise to join a forum and find a reasonable political discussion going on.  It's not at all what I would expect.  Anyway, I really only have a few things to add:

OnlyInThisLight wrote:

Like I mentioned above, taking loads of cash from people like Paris Hilton sounds great, because, well, fuck lazy-ass, spoiled Paris Hilton, but taking a massive cut of money from the guy who studied and spent 50,000 on college and has spent a good fifty years of his life climbing ladders and gaining experience and know-how, just because he's more well off than you?

I definitely understand the sentiment behind this, but, unfortunately, it's very hard to implement in practice.  Consider two executivess A-ko and B-ko, heading similar companies and earning similar salaries.  A-ko came from a lower class family, studied her ass off in school, worked hard to pay through college, and climbed the ladder ever so slowly to get to where she is now.  B-ko had prep school and tutors to make sure she got into the same Ivy League school her parents (now major donors, of course) went to, where she made contacts and schmoozed her way into top level executive positions; when things haven't gone well under her leadership, she's always had golden parachutes to keep her afloat until her next job.

Now, obviously we would like to see B-ko taxed more heavily than A-ko, but how can the law actually do this?  A-ko can get some tax credit on account of her student loans, but other than that, their differences aren't something the tax code can really look at.  And if you're waiting for B-ko to stop getting those high-end executive jobs, well, you may have a long wait coming, especially if she has the right golfing buddies.

satyreyes wrote:

Whoa whoa whoa.  He wants to use my taxes, the taxes of a person who made no irresponsible home-ownership decisions, to bail out people who bought houses they knew they couldn't afford -- so they can keep their homes?  Daaaaaamn!  Talk about rewarding irresponsible lending and borrowing practices!  One would hate to set a precedent that you can be as shortsighted as you want and the government will bail you out, wouldn't one?  It almost makes me want to go take out a subprime mortgage.

The biggest reason I can't see bailing out homeowners as being as problematic as bailing out banks is because of the disparity in what happens to the people involved.  The people who decided to take out these mortgages lose their homes, but the people who set the policy to allow such mortgages, well... maybe their bonuses will be smaller this year?  Sure, the banks may be suffering, and this may translate into a lot of layoffs at the lower levels, but I think it's safe to say that every actual high-level decision maker employed by said banks is going to be just fine.

And, really, if anyone should have known better, it's them.  Buying a home is a huge process during which you're inundated with paperwork, and while on some level one should read it all and think things through carefully and so on, it's really not surprising that even people who are otherwise fairly responsible might just believe what they're hearing about everything being "standard boilerplate, nothing you need to worry about" and not really look into the ramifications of all the financial jargon in the documents they're signing.  But banking executives are trained in that jargon, and they have no excuse for not realizing what might happen under any given policy for approving mortgages.

So, yeah, I have a hard time opposing the bailing out of the people who are really hit hard by this when the other, supposedly more responsible party kind of comes pre-bailed-out.  It's just a shame that the latter can't be penalized to cover the costs of the former, but I realize that this is not how money works.

Stormcrow wrote:

So what does this boil down to? We've got some rough times ahead. And neither candidate has the balls to say so. Can you blame them? Look what happened to Carter when he had the nerve to point out there were problems.

I'm not sure how I feel about ever really agreeing with Akio, but presidential campaigns are when I most often remind myself that, you know, the world around them is dirty.

Stormcrow wrote:

Leaving aside the larger philosophical concern for a moment...we live in a country predicated on the idea that people are innocent until proven guilty. It seems to me that that means we can't pass judgment on people for having a lot of money without some kind of due process. So are we going to have trials where the charge is being rich, and you have to prove you earned it properly, productively? And without that process, would we condemn everyone without any concern about whether they were "right" or "wrong"? So you see there are problems there...

You mean I can't condemn the entire wealthy ruling class as guilty on a whim? I have to actually investigate to see if they're honest first? Man, what a chore. If the French were that cautious and sympathetic in 1789, hardly anyone would have gotten their head cut off! What fun would that be?

Flippant sarcasm aside, I'm not suggesting we put every single millionaire on trial. However, we absolutely need better regulations that promote good business and prevent dishonest practices. Obama says he'll do that, and however much anyone wants to nitpick other stuff he's said, he's got my vote.

satyreyes wrote:

You could be right. As far as I know, no one's done an ethical survey of all America's rich people. Nevertheless, I wonder what your sample size is.

No such survey is possible or needed. If ethical business people were in the majority, our situation would not have gotten this bad. It's easy to place blame on the lower/middle class, such as...

satyreyes wrote:

The first question any prospective homeowner should ask is "can I afford to own a home," and if they don't ask that question, they are a party to their own exploitation.

...Which may be true for some. But it's very likely that many of those people *could* afford to own a home when they signed on to the mortgage. Then energy prices kept going higher, and everything got more expensive, and people lost their jobs, and the economy basically went down the toilet because of the current administration. People who could afford their payments suddenly couldn't anymore. There should have been measures in place to prevent such a disaster.

Now, if I've been sounding like an extremist, it's because I'm mad as hell about what's going on in this country right now. The pendulum has swung so far in one direction that I feel like I have to push back twice as hard. I'm sure some of you are fed up with me over this, and perhaps I should just grow up and accept the way things are, but this is something I needed to express. It would sure be nice if I could just emotionally detach myself from all of this and calmly analyze the economic situation through the objective eyes of history. I cannot do so. What's happening in the world right now directly affects whether I will have a roof over my head in the near future, and there are millions of people who have it even worse than I do.

I dont have answers, but that's not going to stop me from looking. And that's all I have to say about that.

Wow, allegoriest, that's a fascinating story!  I've gotta say that I know almost nothing about welfare as it's actually implemented in America, as opposed to economics class stuff about welfare traps and such.  I am not libertarian enough to say that I think there should be no social "safety net," and I'm happy to see part of my taxes go towards supporting what are called the deserving poor.  But if your relatives are using their welfare checks to buy plastic surgery and making no gesture towards working, something obviously is seriously wrong.

I don't think this is the wrong place for it, but given the global opinion of us it would leave us with about 10% of the amount of liveable land we have today.

BioKraze wrote:

Is it really so wrong to have a foreign policy that simply states "Anybody who looks at us wrong is going to get H-bombed back into the Stone Age"?

No one likes us.
I don't know why.
We may not be perfect, but heaven knows we try.
But all around, even our old friends put us down --
Let's drop the big one, see what happens.

We give them money, but are they grateful?
No, they're spiteful, and they're hateful!
They don't respect us, so let's surprise 'em --
Let's drop the big one, pulverize 'em!

Asia's crowded, Europe's too old,
Africa is far too hot and Canada's too cold.
South America stole our name.
Let's drop the big one, there'll be no one left to blame us.

We'll save Australia.
Don't wanna hurt no kangaroo!
We'll build an all-American amusement park there --
They got surfin' too!

And boom! goes London, boom! Paris,
More room for you and more room for me!
And every city, the whole world round,
Will just be another American town,
Oh what peaceful little people -- we'll set everybody free! --
You wear a Japanese kimono babe, it'll be Italian shoes for me!

They all hate us anyhow --
So let's drop the big one now!
Let's drop the big one now!

--Randy Newman, "Political Science"

Breaking news!

The $700 billion bailout of financial companies just got voted down in the House, 207 for to 227 against.  The vote was notably not party-line; I'm reading one story that says Democrats voted for it narrowly, 140-95, while Republicans voted against it 65-133.  These are earlier figures, but they can't have changed much.  The Dow has fallen 700 points in the past few hours in response to the news.  (For those of you who don't follow the financial news: 700 points is a lot.  Basically it is saying that U.S. business just lost 6%-7% of its entire net value in the last few hours as a result of this vote.)

It's possible they'll try to put together another bailout plan, but it may be too late.  Viscerally I want to just let the banks and lenders succumb to their own idiocy, though I'm not enough of an economist to claim to know whether that's a good idea.  In the long term it probably is.  In the short term it almost certainly isn't.

Megan McArdle, a centrist economics blogger, analyzes the vote thus.  Many Republicans voted against the bill because the authoring committee failed to include a reduction of the capital gains tax.  Since the capital gains tax is beside the point, they can be accused of cynicism.  The Democrats hardly get off scot-free either, though; many of them may have voted against the bill because the Republicans were going to vote against it by a much wider margin, allowing the Democrats to blame the Republicans for what is now happening to the stock market.  I think Megan is overstating her case -- we should give the benefit of the doubt and assume that many legislators on both sides voted against the bill because they believe it's a bad bill against our long-term interests -- but it's hard to argue that the practical effect of the bill's failure won't be what she says.

Since Obama and McCain are senators, neither of them cast a vote on the bill, though I believe both are on the record supporting it.  The Senate was going to vote on the bill Wednesday.

Last edited by satyreyes (09-29-2008 01:17:45 PM)

So, just how bad is this? In terms of "kind of bad" and "ZOMG REALLY BAD RUN TO THE BANKS AND GET YOUR MONEY BEFORE THEY RUN OUT." Is it anywhere at all near the second one?

Edit: And as for the rest of of the world, Hong Kong went down 1000 points because their economy depends on ours so much.

Come on, economy! You can make it! I believe in you!

Last edited by Razara (09-29-2008 04:13:56 PM)

Stormcrow wrote:

If the bank fails, the FDIC will still pay you the money you had when it went, up to that $125000...maybe it's just $25000? Help me out here Satyr?

I'm not Satyr, but according to the FDIC website, it's $100,000.

To play devil's advocate, it's worth pointing out that while the relative point loss is nowhere near Great Depression levels, we do have a major variable to account for, and that's that the American economy is now tied thorough to the global economy. Not to say trade didn't exist back then, but nowadays our money and out prospects are thoroughly, completely tied to the world economy, and all it takes is fear that the American economy may go into a major recession a la Great Depression to send the others into tailspin. Objectively, the European markets are the best off to deal with this. We've been major philanthropists in the Asian economy and it's going to show when we start hurting.

It's not yet time to take your cash out of the bank, but this is a time for financial responsibility. If you don't already own (not mortgage) property, this isn't the time to try. Loans are a bad idea, and obviously, so is investing. The hurricane hasn't hit yet, but that just means you have a chance to get the shutters up.

Good news!  The markets closed up 500 points today, erasing most of yesterday's decline.  This emphatically does not mean "never mind, false alarm, the economy's fine now," but it does mean that Wall Street has not yet begun to panic.  Part of the reason is undoubtedly optimism that Congress, spooked by yesterday's Tower of Terror, may yet reach an agreement on a bailout.  But it's not as though Congress suddenly turned around and said "wait, we want to change our vote," so probably another part of the reason is that the market now thinks it overreacted in the first place.  It's good news, in a way.  In another way, it shows that the market is not as omniscient as conservatives like to think -- and if it's not omniscient it's going to be more unpredictable than they'd like.  Invest prudently. 

What I mean is that conservatives (and what I mean here is conservative economists, not conservative politicians, though the two often go together) think that the market accurately prices commodities.  If oil is trading for $100 a barrel, that's at least how much revenue its purchaser will raise by buying it.  If Disney stock is trading at $30 and there are two billion shares of Disney stock outstanding, then the entire company is worth $30 x 2 billion = $60 billion.  (Those are approximately the real numbers, by the way, in case you're thinking of buying the Walt Disney Corporation.)  The market knows all, because traders who spot inefficiencies (places where the market is incorrect) can make money by exploiting those inefficiencies, which brings the market back to efficiency.

The problem is that when the Dow dives 777 points one day and soars 485 points the next day -- representing losses and gains of hundreds of billions of dollars -- when nothing fundamental changes for businesses in between, it's hard to argue that the market knows what it's doing, what the real value of the Dow should be.  It's like if you saw Superman diving 77 stories off a building and then immediately reversing course and flying up 48 stories -- you'd conclude that he's frantically looking for Lois and doesn't know where she is.  If he knew where she was he'd go straight there, not reverse course.  He must not have X-ray vision after all.  (The markets are not efficient.)

The alternative is that Lois is actually being moved within the building, and Superman makes his course correction because Lois isn't where she was a minute ago.  He does have X-ray vision, but it doesn't help him settle on a story because Lois is moving and he has to keep up.  This interpretation makes sense if you think that the true value of the companies that make up the Dow actually did change by hundreds of billions of dollars today (that is, Lois was moved up a few dozen stories).  But it's hard to see how that could have happened in a single day when there was little political news on the bailout and no new major failures or successes on Wall Street.

How is that for a strained metaphor?

satyreyes wrote:

It's like if you saw Superman diving 77 stories off a building and then immediately reversing course and flying up 48 stories -- you'd conclude that he's frantically looking for Lois and doesn't know where she is.  If he knew where she was he'd go straight there, not reverse course.  He must not have X-ray vision after all.  (The markets are not efficient.)

And the Dow dives 700 points today, falling under 10k for the first time in four years. Sustained loss, over a couple weeks at least, will really tell us the state of affairs. Unfortunately though run by men, the stock market acts like a really fickle PMSing woman. It gets angered, startled, and weepy very easily. The problem is one crying bitch can ruin the vibe of the whole party--now the global markets are responding.

satyreyes wrote:

It alleges -- no, seriously -- that Hagan is a secret atheist making secret promises to atheists to do nasty atheist things.

Wasn't something similar said about Thomas Jefferson in the election of 1800?  What progress we've made since then.

I do realize that I have it easier as an atheist than I would as a Muslim, especially as we don't exactly have religious practices to single us out, but I'm still sick of atheism being used as a slur in this country.