The Rich Are Not Getting Richer
mr dude@harvarduniversity.edu
The Rich Aren’t Getting Richer
Actual super-wealthy households saw their income decline.
Are the rich really getting richer? That’s a pretty standard line from
the Left, a lament usually cited in the course of calling for higher
tax rates. Robert Reich is particularly fond of this mode of attack: A
recent post of his was headlined, “For 70 years, the wealthy have
grown wealthier.” Professor Reich probably doesn’t write his own
headlines, but it’s a common enough sentiment for him, and his prose
is rich with phrases such as “the super-rich got even wealthier this
year.”
He isn’t alone in employing this mode. Take this from an April 7 Salon
article: “And surely the rich don’t need that 25 percent top rate in
the way poor folks need programs like TANF and seniors need Medicare —
about 90 percent of all American income gains since the 1970s have
gone to the top 10 percent of earners.”
This is not true.
The numbers generally cited in support of this argument do not
actually tell us much about what has happened to the incomes of
wealthy households over time. That’s because the people who are in the
top bracket today are not the people who were in the top bracket last
year. There’s a good deal of socioeconomic mobility in the United
States — more than you’d think. Our dear, dear friends at the IRS keep
track of actual households (boy, do they ever!), and sometimes the
Treasury publishes data about what has happened to them. For instance,
among those who in 1996 were in the very highest income group isolated
for study — the top 0.01 percent — 75 percent were in a lower income
group by 2005. The median real income of super-rich households went
down, not up. The rich got poorer. Among actual households, income
grew proportionally more for those who started off in the low-income
groups than those that began in high-income groups.
That wasn’t even an unusually good decade in terms of mobility. During
the horrible, horrible Reagan years, as National Review noted back in
1991, the average income growth for actual households in the lowest
income bracket was 77 percent over the course of a decade; income
growth for actual households in the top group was only 5 percent
during those same years. Of those who were in the poorest fifth in
1979, 85.8 percent had moved to a higher bracket by 1988, and 14.7
percent of them moved to the top bracket — which is to say, the poor
of 1979 were more likely to be the rich of 1988 than to be the poor of
1988. The poor got richer, and some of them got a lot richer. Reagan’s
record has not been matched — Ronald Reagan was the champion of the
poor, as it turns out — but economic mobility has been pretty stable
for the past 20 years: About 50 percent of U.S. households move from
one income group to a different one every decade, and actual
households initially in the low-income groups see proportionally more
income growth than do actual households initially in the high-income
groups.
When somebody says that that top 1 percent saw its income go up by X
in the last decade, they are not really talking about what happened to
actual households in the top 1 percent. Rather, they are talking about
how much money one has to make to qualify for the top 1 percent. All
that really means is that the 3 million highest-paid Americans in 2010
made more money than did the 3 million highest-paid Americans in 2000,
the 100,000 highest-paid Americans this year made more money than did
the 100,000 highest-paid Americans made in 2000, that the 50,000
highest-paid Americans made more money this year than did the 50,000
highest-paid Americans made in 2000, that the 1,000 highest-paid
Americans this year made more money than did the 1,000 highest-paid
Americans made in 2000, etc., which is not shocking. But, as the
Treasury data show: They are not the same people.
mr dude
eric
<foster...@gmail.com> wrote:
> The numbers generally cited in support of this argument do not
> actually tell us much about what has happened to the incomes of
> wealthy households over time.
Complete twaddle. Since 1980 or so the US has been becoming much more
inequitable. It is by far the worst of any developed country.
http://en.wikipedia.org/wiki/Gini_coefficient
mr dude@harvarduniversity.edu
>
> http://en.wikipedia.org/wiki/Gini_coefficient
And this offends you how?????
mr dude
eric
The fundamental idea of capitalism is that improvements in
productivity of the worker (which have been quite large since 1980)
through the investment of capital result in an increase in the
standard of living for said worker.
This hasn't been happening. Instead the owner/manager of the business
has been the sole beneficiary of the improved productivity of the
worker. The worker has gained bupkis despite his increased
productivity.
This isn't capitalism. It's a modern form of feudalism run by
plutocrats. The worker would be better off in a socialistic or
communistic society where he would get to share in his increased
productivity,
Ultimately this is going to lead to serious class warfare (we are
seeing signs of it now) and political stress along with an erosion of
the political structure that the US is based on. Some people think
ultimately is in the very near future.
mr dude@harvarduniversity.edu
>
> Ultimately this is going to lead to serious class warfare (we are
> seeing signs of it now) and political stress along with an erosion of
> the political structure that the US is based on. Some people think
> ultimately is in the very near future.
Did you ever think that the oppressive 35% corporate tax rate (the
highest in the world!!) may affect decisions made by American
companies???
Corporations are not shipping jobs overseas, the greedy Imperial
federal government is forcing these corporations to make obvious
monetarily wise decisions to ship jobs overseas!
Yet your "God" Obama just expressed his opinion that 20 million
illegals should be given amnesty???
How about amnesty for the American born companies that have endured
the harsh taxation from the US government???
You state "The fundamental idea of capitalism is that improvements in
productivity of the worker ." How does the government taxing the fuck
out of the employer affect your statement??
My guess: A shitload!!!!
I have to go now. We can't sing "Kumbaya" by a campfire and share food
stamps. I can't "share your pain", "level the playing field", "make
the productive pay their fair share", "punish those you won life's
lottery", or chant "But but but Bushhh!!! with you."
I would rather be a productive human being and ask your Mother (aka
the government) to leave me the fuck alone.
When 10% of Americans pay the bill for the other 90% it seems that
someone isn't paying their "fair share".
Hint Libfuck: Sean Penn, Michael Moore, Tom Cruise, Angelina Jolie,
Brad Pitt etal AREN'T paying their "fair share"!!!
You are outraged when a corporate CEO earns $9 million a year (who
employs and is responsible for hundreds of thousands of workers) Yet
if Sean Penn gets $20 million for a film it is OK with you. You are so
hypocritical it may be funny if it weren't so sad for your obvious
bias and sorely lacking mental awareness.
Yet where is the "class warfare" betwixt your ideology involving
Oprah, Sean Penn, Lady Gaga, Kobe Bryant, Anderson Cooper, P Diddy,
Michael Moore, Madonna, and Snoop Dog??? Surely the unequal wage
distribution among these people means that the the "rich are getting
richer"???
You want class warfare?? Look at your heroes and get back to me!!!
mr dude (ohhh I did soooo bitch slap your loser ass!!!!!)
eric
<foster...@gmail.com> wrote:
> Did you ever think that the oppressive 35% corporate tax rate (the
> highest in the world!!) may affect decisions made by American
> companies???
Oh pooh. More BS from Faux News. That's the statutory marginal tax
rate and doesn't account for many tax breaks and loopholes in the US.
The EFFECTIVE US corporate tax rate is far from the highest in the
world.
Didn't you see the recent news items regarding giant US companies like
GE paying no taxes at all? How could that happen if we have the
highest corporate tax rates?
This article shows how in fact that the US effective corporate tax
rate is far from the highest in the world.
http://mediamatters.org/research/201004260006
Personally though I am actually in favor of zero corporate taxes.
Shocking, eh? The reason is that lobbying government for tax breaks
distorts the political system and get corporations involved in
lobbying for candidates who support their particular positions. I am
also totally against government subsidies for businesses including the
insane ethanol and tobacco subsidies for the same reasoning. In
exchange for this corporate lobbying and campaign contributions should
be made illegal via a constitutional amendment. This would also make
it easier for businesses to make sound decisions free of worrying
about how to game the system regarding taxes and subsidies.
Of course this would mean an increase in personal taxes, especially
for the people who would get the increased dividends that result from
zero corporate taxes, but I think overall the result would be better
than the system we have now.
eric
<foster...@gmail.com> wrote:
> Hint Libfuck: Sean Penn, Michttp://groups.google.com/group/alt.sports.football.pro.ne-patriots/browse_thread/thread/b2dcfc628aada02f?hl=en#hael Moore, Tom Cruise, Angelina Jolie,
> Brad Pitt etal AREN'T paying their "fair share"!!!
>
> You are outraged when a corporate CEO earns $9 million a year (who
> employs and is responsible for hundreds of thousands of workers) Yet
> if Sean Penn gets $20 million for a film it is OK with you. You are so
> hypocritical it may be funny if it weren't so sad for your obvious
> bias and sorely lacking mental awareness.
$9 million ISNT the big problem fucktard. It's the guys like the hedge
fund managers who earn FOUR BILLION in one year and pay essentially no
taxes. These guys AREN'T running productive corporations, they are
just skimming fees from managing money.
mr dude@harvarduniversity.edu
> $9 million ISNT the big problem fucktard. It's the guys like the hedge
> fund managers who earn FOUR BILLION
>
> http://www.nytimes.com/2010/04/01/business/01hedge.html
Of the Four billion,$3.3 billion comes from Obama promoter Soros!!!
Surely the "greedy" people are Rethuglicans??? Nope!! Obama
supporters!!!
Why won't Obama supporters pay their "fair share"??????
The runner-up in the ranking was George Soros, the Hungarian émigré
who has become better known in recent years for supporting Democratic
candidates and making political headlines than for picking stocks. His
fund, Quantum Endowment, grew 29 percent in 2009, earning Mr. Soros
$3.3 billion in fees and investment gains.
Once again I spanked your moronic financially idiotic ass!!!!
mr dude (going for the hat trick)
eric
Nice failed attempt to inject a Red Herring into the discussion,
loser.
Who gives a flying fart who xyz super rich person who does nothing to
earn his money supports? The PROBLEM is that these people have vast
unearned incomes and are paying little to no taxes on them. This is a
free country, the wealthy can have any damn political opinion they
want just like anyone else. The issue is the distribution of income
and the US policies that encourage it, not who some jackwagon
supports.
D/
"eric" <wart...@gmail.com> wrote in message
news:470c6eaa-5dd9-441d...@gu8g2000vbb.googlegroups.com...
--------------------------------------------
I'm at a loss to understand the warped logic you applied in the last
paragraph. I'm assuming that you are referring to the hedge fund managers
who earned money last year. However, you claim that they do nothing to earn
the money. This doesn't make sense. They have to work to invest (if you're
going to bet on the horses, it's a good idea to know something about horses)
and assume risk for bad investments. From the same article you promoted:
"For many of the top 25, the big personal gains in 2009 came after steep
losses in 2008. Half of the top 10 managers in 2009 lost money the year
before, including Mr. Tepper, whose flagship fund, Appaloosa Investment Fund
I, dropped 27 percent in 2008. "
Thus, they earn their money.
The next twist you present is that "This is a free country..." followed
quickly by defining the problem is the "distribution of income." It seems
that people earn the income they earn. What is the problem with the
distribution? What part of free is confusing you? Can you clarify your
position?
"When I use a word," Humpty Dumpty said, in a rather a scornful tone, "it
means just what I choose it to mean-neither more nor less."
"The question is," said Alice, "whether you can make words mean so many
different things."
"The question is," said Humpty Dumpty, "which is to be master that's
all."
Alice was too much puzzled to say anything, so after a minute Humpty
Dumpty began again. "They've a temper, some of them-particularly verbs, they're
the proudest-adjectives you can do anything with, but not verbs-however, I
can manage the whole lot! Impenetrability! That's what I say!"
zz...@zz.com
>> highest in the world!!) may affect decisions made by American
>> companies???
adminstration.
ZZH...@yahoo.com
wrote:
Or people like GE who made billions of dollars and paid no taxes.
http://motherjones.com/mojo/2011/03/bernie-sanders-top-10-tax-avoiders
eric
> "eric" <warth...@gmail.com> wrote in message
>
> news:470c6eaa-5dd9-441d...@gu8g2000vbb.googlegroups.com...
> On Apr 23, 12:10 am, "mr d...@harvarduniversity.edu"
>
>
>
>
>
>
>
>
>
> <foster...@gmail.com> wrote:
> > On Apr 22, 10:53 pm, eric <warth...@gmail.com> wrote:
>
> > > $9 million ISNT the big problem fucktard. It's the guys like the hedge
> > > fund managers who earn FOUR BILLION
>
> > >http://www.nytimes.com/2010/04/01/business/01hedge.html
>
> > Of the Four billion,$3.3 billion comes from Obama promoter Soros!!!
> > Surely the "greedy" people are Rethuglicans??? Nope!! Obama
> > supporters!!!
>
> > Why won't Obama supporters pay their "fair share"??????
>
The problem is simple The productivity of the American worker has more
than doubled since 1980. His real wages have declined at the same
time. The people whose incomes who have gone up are the managers,
company owners, investment bankers etc. whose 'productivity' put the
US in the current economic crisis and on the road to ruin.
They haven't earned jack yet they are living high on the hog based on
the improved productivity of the Working Stiff.
D/
-------------------------------------------------------------
Productivity is influenced by a number of factors - improvements in
processes, shifting of the products/services being produced, and, as you
seem to imply, workers working harder. Since 1980, there have been
significant changes in the world's economy. In 2011, the US is simply a
competitor in a global economy. One analysis of worker productivity over
the period 1979 - 2007
(http://seekingalpha.com/article/97931-the-great-american-worker-productivity-increases)
shows US worker productivity growth at a 3.9% annual growth rate. Over that
same period, Taiwan shows a 5.9% and Sweden at 4.4%. This leads to the
conclusion that US workers are not uniquely productive.
Determining wages is another complex problem. One approach for isolating
worker wages might be to look at the metric used by the Social Security
system. The National Wage Index (http://www.ssa.gov/oact/cola/AWI.html)
shows increases from $11,480 to $40,710 over that period. Directly
comparing these measures of productivity and worker's wages doesn't appear
terribly out of balance.
There has been a significant increase in compensation to the upper echelon
of corporate management. However, I cannot seem to find anything that shows
that their compensation is the cause of our current economic turmoil.
Perhaps you have a reference that might support that assertion.
In searching for the largest drain on the US economy, it doesn't take a
rocket scientist to recognize that the US government has spent us into near
economic collapse. The over $14,000,000,000,000 debt they have saddled us
and future generations with is unconscionable. However incompetent the
government is at handling money, they are at least equally adept at
directing citizen wrath towards other targets. The class warfare that you
evidence with your "They haven't earned jack yet they are living high on the
hog based on the improved productivity of the Working Stiff" comment shows
just how effective the administration's "tax the rich" mantra has been.
"A billion here, a billion there, and pretty soon you're talking real
money!"
mr dude@harvarduniversity.edu
>
> Or people like GE who made billions of dollars and paid no taxes.
>
> http://motherjones.com/mojo/2011/03/bernie-sanders-top-10-tax-avoiders
Surely they must have committed a crime in doing this??
Why is no one being arrested????????
mr dude
mr dude@harvarduniversity.edu
> "For many of the top 25, the big personal gains in 2009 came after steep
> losses in 2008. Half of the top 10 managers in 2009 lost money the year
> before, including Mr. Tepper, whose flagship fund, Appaloosa Investment Fund
> I, dropped 27 percent in 2008. "
Wait...didn't Eric say:
"$9 million ISNT the big problem fucktard. It's the guys like the
hedge
fund managers who earn FOUR BILLION in one year and pay essentially no
taxes. These guys AREN'T running productive corporations, they are
just skimming fees from managing money."
Then you state half of the top ten managers LOST money???? (We already
covered that $3.3 billion was Soros).
That means that Eric's "the rich are getting richer (except for Soros
of course) comment totally invalid!!!
Eric gets the bitch slap again!!
Damn!!!! I scored the hat trick!!!!!! Yippee!!!!
mr dude (gonna join a hockey team)
eric
They lost money in 2008. Big deal, that's one year. Every other year
since the Regan tax cuts they raked it in.
eric
> shows US worker productivity growth at a 3.9% annual growth rate. Over that
> same period, Taiwan shows a 5.9% and Sweden at 4.4%. This leads to the
> conclusion that US workers are not uniquely productive.
>
> Determining wages is another complex problem. One approach for isolating
> worker wages might be to look at the metric used by the Social Security
> system. The National Wage Index (http://www.ssa.gov/oact/cola/AWI.html)
> shows increases from $11,480 to $40,710 over that period. Directly
> comparing these measures of productivity and worker's wages doesn't appear
> terribly out of balance.
>
> There has been a significant increase in compensation to the upper echelon
> of corporate management. However, I cannot seem to find anything that shows
> that their compensation is the cause of our current economic turmoil.
> Perhaps you have a reference that might support that assertion.
>
> In searching for the largest drain on the US economy, it doesn't take a
> rocket scientist to recognize that the US government has spent us into near
> economic collapse. The over $14,000,000,000,000 debt they have saddled us
> and future generations with is unconscionable. However incompetent the
> government is at handling money, they are at least equally adept at
> directing citizen wrath towards other targets. The class warfare that you
> evidence with your "They haven't earned jack yet they are living high on the
> hog based on the improved productivity of the Working Stiff" comment shows
> just how effective the administration's "tax the rich" mantra has been.
>
> "A billion here, a billion there, and pretty soon you're talking real
> money!"
Full of holes. Lets start with Sweden. Yes their productivity grew
nicely, but what is their income distribution? Take a look at the Gini
data I referenced earlier. Sweden's income distribution measure has
been flat from 1960 to the present, very unlike the US measurement
which has shown a steady increase in inequity since 1980. Simply state
this means that the increases in productivity and thus standard of
living have been shared equally by people in the Swedish economy,
while not so in the US.
The wage index measurement is interesting but it's presented in a
complete vacuum, being uncorrected for inflation. This chart shows the
sorry tale in constant 1982 dollars. Note that real inflation adjusted
wages for non-farm workers DECLINED.
http://www.workinglife.org/wiki/Wages+and+Benefits%3A+Real+Wages+%281964-2004%29
> There has been a significant increase in compensation to the upper echelon
> of corporate management. However, I cannot seem to find anything that shows
> that their compensation is the cause of our current economic turmoil.
> Perhaps you have a reference that might support that assertion.
You don't need to be a rocket scientist to figure this out. Who is
making the decisions to issue undocumented variable rate subprime
mortgages to bundle up for sale as AAA rated securities? Surely not
the assembly line workers.
eric
The amount of money somebody earns is not necessarily equal to the
compensation they deserve. The CEOs of many companies walk away with
many millions of dollars after driving their company into ruins.
Countrywide Finance anyone?
Another key thing is to examine is the contrast between a corporate
CEO and a Hedge Fund manager. The corporate CEO generally runs an
organisation that provides a useful service (i.e. something that
people are willing to spend money on) and employees a bunch of people
in order to do so. Successful corporate CEOs sometimes become
successful by doing it more efficiently than others. This can be a
useful job which benefits society as a whole. Now while there is a
problem with CEO compensation in the US, it is orders of magnitude
less of a problem than exists with financial sector compensations and
hedge fund managers in particular. A hedge fund manager rarely gets
results any better than the market as a whole, and can rake in huge
fees that are exempt from taxes due to some strange tax loopholes. So
what has this person done to deserve this strange situation? They
aren't risking their own money, they are investing other people's
money so they are taking on no personal risk. The money they lose
isn't theirs. They don't contribute or get results better than the
market as a whole. They don't make or build anything.
D/
http://www.workinglife.org/wiki/Wages+and+Benefits%3A+Real+Wages+%281964-2004%29
--------------------------------------------
The chart you refer to does not support your contention. From 1980
($281.27) to 2004 (last year from the chart, $277.57) shows a decline of
just over 1%. Hardly Earth shattering. In fact, to describe it, you'd have
to say that it is pretty flat. Good enough for Sweden, eh?
I don't understand your connection between the *compensation* for the upper
echelon of corporate management and the *decisions* made by the financial
institutions that caused the subprime mortgage problems. Please review and
comment on what was actually stated.
D/
--------------------------------------
"The amount of money somebody earns is not necessarily equal to the
compensation they deserve." Absolutely. However, it's generally what they
agreed to at the outset of their relationship. I don't mean to upset you or
anything, but life isn't fair. It isn't intended, promised, or designed to
be fair.
If hedge fund managers is such a lucrative venture with no demands to do
better than the market as a whole, why don't you become a hedge fund manager
and take advantage of the megabucks you can earn and the loopholes you can
exploit? Perhaps there's more to it than you acknowledge?
Hedge funds, as other investors, support the entities they invest in.
Capital - don't leave home without it.
mr dude@harvarduniversity.edu
n.
>
> You don't need to be a rocket scientist to figure this out. Who is
> making the decisions to issue undocumented variable rate subprime
> mortgages to bundle up for sale as AAA rated securities? Surely not
> the assembly line workers.
Similarly, where is your outrage when Sean Penn or Susan Sarandon get
paid $20 million dollars to do a film and it bombs???????
Why have I not heard a peep coming from you calling Penn or Sarandon
evil and greedy!!
mr dude
mr dude@harvarduniversity.edu
>
> You don't need to be a rocket scientist to figure this out. Who is
> making the decisions to issue undocumented variable rate subprime
> mortgages to bundle up for sale as AAA rated securities? Surely not
> the assembly line workers.
The bamks made these loans because the Imperial federal government
FORCED them to make these bad loans!!
Thanks to the Community Investment Act (thanks Bubba) banks were
forced to make bad loans.
Also Fammy Mae and Freddy Mac made terrible loans! Remeber NINJA
loans?? That's right they gave housing loans to people with No Income
and No Jobs for Jebus' sake!!!
There were two key factors on the side of government intervention that
contributed to this recent bubble by artificially increasing the
demand for housing, GSE’s and the Community Reinvestment Act (CRA).
GSE’s are otherwise known as ‘government sponsored enterprises’. The
GSE’s involved in the recent bubble were Fannie Mae and Freddie Mac.
These two ‘enterprises’ were backed by the federal government. That
means that shareholders enjoyed the profits and the American tax
payers would share in the losses. This is not a free market vehicle
because is privatizes the profits and socializes the losses.
These ‘companies’ also accounted for as much as 90% of the secondary
mortgage market [2]. The secondary mortgage market is where mortgage
brokers turn to sell loans that they are paid to originate, but they
do not hold on their books. Which means the mortgage brokers can make
a profit, but transfer the risk of the asset on to whoever buys the
security. Since Fannie Mae and Freddie Mac were backed by the US tax
payers, they were able to take on risks that other companies could
not. Therefore, they were able to set loan standards extremely low
with no need to adequately price the loan for risk with a higher
interest rate. This made homes disastrously easy for many to ‘afford’
that they otherwise could not, this further contributed to the
artificial increase in demand, which lead to the overproduction of
homes.
mr dude (please make me stop spanking you, my hand is beginning to
hurt!!!)
mr dude@harvarduniversity.edu
>
> You don't need to be a rocket scientist to figure this out. Who is
> making the decisions to issue undocumented variable rate subprime
> mortgages to bundle up for sale as AAA rated securities? Surely not
> the assembly line workers.
Plus, many in Congress saw the housing collapse coming and tried to do
something about it.
Who blocked them? Chris Dodd and Barney Frank!!
Now watch this video. Ignore the fact that it is Fox News. Just listen
to what Dodd and Frank are saying:
http://www.youtube.com/watch?v=63siCHvuGFg
mr dude (speaking truth to power)
eric
So you agree that some people get unjustified compensation?
> If hedge fund managers is such a lucrative venture with no demands to do
> better than the market as a whole, why don't you become a hedge fund manager
> and take advantage of the megabucks you can earn and the loopholes you can
> exploit? Perhaps there's more to it than you acknowledge?
>
> Hedge funds, as other investors, support the entities they invest in.
> Capital - don't leave home without it.
There is nothing wrong with investing mechanisms such as hedge funds,
and actual investors who take the risks deserve the rewards. Hedge
fund managers however don't take the risks, get the rewards and in
addition get a tax loophole.
As far as the career advice, thanks but I am pretty happy with my
current career.
eric
OK, I agree with you that celebrities in this country are awarded much
more than they contribute to society. Hollywood stars, pro athletes,
etc.
eric
The Community Investment Act only applied to the practice of
redlining, and was passed in 1977, 30 years before the flood of
subprime loans occurred. It specifically contained a clause requiring
that the issuance of these loans be made consistent would sound
lending practice. The idea that it was the cause of this crisis is
ludicrous.
Here is link to section 802.
http://en.wikisource.org/wiki/Community_Reinvestment_Act_of_1977#Sec._802.
Note that is doesn't REQUIRE banks to issue these loans, only
encourages, and the wording is
"It is the purpose of this title to require each appropriate Federal
financial supervisory agency to use its authority when examining
financial institutions, to encourage such institutions to help meet
the credit needs of the local communities in which they are chartered
consistent with the safe and sound operation of such institutions."
Fanny Mae and Freddy Mac were operated recklessly, I agree. However
their problems have nothing to do with the collapse of AIG, Lehman
Brothers etc. and the need to bail out the banking system.
eric
<foster...@gmail.com> wrote:
> Also Fammy Mae and Freddy Mac made terrible loans! Remeber NINJA
> loans?? That's right they gave housing loans to people with No Income
> and No Jobs for Jebus' sake!!!
Yes I remember NINJA loans. However they weren't made by Freddie and
Fanny. The term was originated by HCL Finance, a private lender.
The primary mechanism for the meltdown was issuance of subprime loans
to people who had no chance of repayment, and resale of the loans as
bundles of AAA securities to be held as reserves by banks. The entire
process was corrupt. The originators didn't care who they issued the
loans to because they were going to sell them. Ratings agencies were
rating total garbage as AAA, and banks were using these securities as
a form of capital on their books which evaporated leaving the banks
insolvent. Companies like Lehman Brothers and AIG collapsed because
they were providing insurance for these mortgage backed securities
without having adequate capital to back up the insurance. We are
starting to see criminal charges being brought against some of the
executives involved in this scheme.
Freddy and Fanny, while they made a lot of bad loans that taxpayers
will be stuck with DIDN'T default on anything, and don't resell their
loans. The Fox video that you cited is not accurate when it claims
that the problems with Freddie and Fanny spread to the rest of the
economy. That is not true. The only effect of Freddy and Fannie's bad
loans is to increase government debt. If you have been paying
attention to the news there is work going on to decommission both
Fannie and Freddy.
eric
>
> > There has been a significant increase in compensation to the upper echelon
> > of corporate management. However, I cannot seem to find anything that
> > shows
> > that their compensation is the cause of our current economic turmoil.
> > Perhaps you have a reference that might support that assertion.
>
> You don't need to be a rocket scientist to figure this out. Who is
> making the decisions to issue undocumented variable rate subprime
> mortgages to bundle up for sale as AAA rated securities? Surely not
> the assembly line workers.
>
> --------------------------------------------
>
> The chart you refer to does not support your contention. From 1980
> ($281.27) to 2004 (last year from the chart, $277.57) shows a decline of
> just over 1%. Hardly Earth shattering. In fact, to describe it, you'd have
> to say that it is pretty flat. Good enough for Sweden, eh?
Is it not a decline? Yes it is not a huge decline. The issue here is
not the magnitude of the decline, but rather that there is ANY decline
at all when productivity is rising.
> I don't understand your connection between the *compensation* for the upper
> echelon of corporate management and the *decisions* made by the financial
> institutions that caused the subprime mortgage problems. Please review and
> comment on what was actually stated.
What is the productivity of a manager who drives the institution he
bears responsibility for into bankruptcy?
D/
--------------------
So you admit that it's a totally insignificant decline.
As I pointed out before, productivity cannot be directly compared as it is
not a measure of workers working harder without considering a variety of
inflluencing factors. Relative to other economies, the US worker has not
been a stellar performer. Here's a simple analogy. If a worker in 1980 had
a job to tie shoelaces in a boot factory by hand, 100 pairs of boots could
be tied in an hour. The company, using capital that is available due to
investors (directed to the company by evil, vile, lazy, and incompetent
hedge fund managers) invested in machinery that would tie 1000 pairs of
boots in an hour, would not that worker monitoring the machine's operation
be 10 times a productive? Is the worker working 10 times as hard? Do you
assert that they should go from $15 per hour to $150 per hour because of the
output of the new machinery?
--------------------
> I don't understand your connection between the *compensation* for the
> upper
> echelon of corporate management and the *decisions* made by the financial
> institutions that caused the subprime mortgage problems. Please review and
> comment on what was actually stated.
What is the productivity of a manager who drives the institution he
bears responsibility for into bankruptcy.
---------------------------
Are you referring to Obama?
D/
---------------------
What part of "Absolutely" do you not understand? So you agree that life
isn't guaranteed to be fair?
---------------------
> If hedge fund managers is such a lucrative venture with no demands to do
> better than the market as a whole, why don't you become a hedge fund
> manager
> and take advantage of the megabucks you can earn and the loopholes you can
> exploit? Perhaps there's more to it than you acknowledge?
>
> Hedge funds, as other investors, support the entities they invest in.
> Capital - don't leave home without it.
There is nothing wrong with investing mechanisms such as hedge funds,
and actual investors who take the risks deserve the rewards. Hedge
fund managers however don't take the risks, get the rewards and in
addition get a tax loophole.
---------------------------------------
Did a hedge fund manager kick your dog or something? Of course they take
risks. Please read your linked article for how the genious who you say made
billions of dollars one year for his fund lost 27% one year. Do you
honestly think he'd be able to lose 1/4 of his investor's funds year after
year and still be employed in his position?
--------------------------------------
As far as the career advice, thanks but I am pretty happy with my
current career.
-------------------------------------
I'm happy for you. Please do not think of changing careers.
mr dude@harvarduniversity.edu
.
>
> ---------------------------
>
> Are you referring to Obama?
If Obama was working on commission he'd owe us all eleventy billion
dollars each!!!!
mr dude
mr dude@harvarduniversity.edu
>
> http://en.wikisource.org/wiki/Community_Reinvestment_Act_of_1977#Sec.....
>
> Note that is doesn't REQUIRE banks to issue these loans, only
> encourages, and the wording is
Of course, if they banks didn't make these loans members of ACORN
would be outside picketing and threatening anyone trying to enter
these banks.
The abuse of this act by ACORN and officials like Janet Reno was a
factor in causing the economic crisis. The harassment suits filed
under this act were used to get banks to lower credit standards and
hand out high risk loans. We have dug up the lawsuit below while
researching Obama’s legal career. It is a typical example of an ACORN
harassment lawsuit.
In these lawsuits, ACORN makes a bogus claim of Redlining (denying
poor people loans because of their ethnic heritage). They protest and
get the local media to raise a big stink. This stink means that the
bank faces thousands of people closing their accounts and get local
politicians to lobby to stop the bank from doing some future business,
expansions and mergers. If the bank goes to court, they will win, but
the damage is already done because who is going to launch a big
campaign to get the bank’s reputation back?
It is important to understand the nature of these lawsuits and what
their purpose is. ACORN filed, or threatened to file, tons of these
lawsuits and ALL CRA suits allege racism (usually the press involved
and such with the threat of the CRA lawsuit is enough to get the bank
to give in and put them in a catch 22, they also had a willing Janet
Reno Justice Department to work with – see below for more on Reno). As
we have said in our series or articles analyzing every aspect of this
story (links at the very bottom of this post), the series of ACORN
harassment lawsuits and intimidation against banks to lower credit
standards was not the sole reason for the mortgage crisis, it was one
important layer of many that brought us to the mortgage crisis and the
largest financial scandal in the history of the world.
mr dude
mr dude@harvarduniversity.edu
>
> OK, I agree with you that celebrities in this country are awarded much
> more than they contribute to society. Hollywood stars, pro athletes,
> etc.
WOW! You are not being a partisan left wing hack.
Good to see someone with an open mind.
Respect!
I would love to have a response to the Barney Frank video though.
mr dude
A1...@gmail.com
du...@harvarduniversity.edu" <fost...@gmail.com> wrote:
>On Apr 26, 11:10 am, eric <warth...@gmail.com> wrote:
>
>>
>> http://en.wikisource.org/wiki/Community_Reinvestment_Act_of_1977#Sec.....
>>
>> Note that is doesn't REQUIRE banks to issue these loans, only
>> encourages, and the wording is
>
>Of course, if they banks didn't make these loans members of ACORN
>would be outside picketing and threatening anyone trying to enter
>these banks.
>
Never mind that those people who got loans through Acrorn had a better
payment record than real estate speculators...........but why lets
fact get in the way of a good rant.
eric
The US was bankrupt long before Obama took office.
eric
They take risks. With other people's money. When the investments go
down they don't lose any of their own money. When they go up the fees
go through the roof. Take a look at the fee structures in the Hedge
Fund industry and you will see what I mean.
eric
I did make a response, but I'll restate it for you.
1. Yes Freddie and Fanny were operated in an irresponsible fashion.
The financial obligations that the federal government (and by proxy us
the taxpayers) is eating are many billions of dollars. Hopefully we
will never see GSE's like this again.
2. The place where I have a problem with the video is the claim that
this led to the financial meltdown. It did not affect the financial
system precisely because the federal government backed up these
agencies. What caused the meltdown is the issuance of bad mortgages by
private lenders, the sale of these in bundles as securities, the
rating of these garbage securities as AAA by S&P etc. and the
guarantee of these securities by companies like Lehman and AIG. When
Lehman was unable to cover the securities and failed, the whole chain
unravelled and every major bank in the US became insolvent.
It is interesting that the TARP funds and Fed loans to banks are all
being repaid with interest, making the impact on taxpayers negligible.
Freddy and Fanny however are going to hurt.
eric
Yes, I agree with you that it is not simple. However your example is
baloney. What happens now is that rather than investing capital
shoelace manufacture goes offshore where low wages allow 10 times as
many shoelaces to be made per dollar of wage.
What happens now is that US manufacturing increasingly requires higher
skill levels and the goods produced are higher value products like
airliners, CPUs and heavy earthmoving equipment. Unskilled labor
producing shoelaces is something that is quite rare in the US these
days.
eric
<foster...@gmail.com> wrote:
> On Apr 26, 11:10 am, eric <warth...@gmail.com> wrote:
>
>
>
> >http://en.wikisource.org/wiki/Community_Reinvestment_Act_of_1977#Sec.....
>
> > Note that is doesn't REQUIRE banks to issue these loans, only
> > encourages, and the wording is
>
> Of course, if they banks didn't make these loans members of ACORN
> would be outside picketing and threatening anyone trying to enter
> these banks.
So what's the problem with that? Do you want to ban free speech? What
happens at Tea Party rallies and in from of Planned Parenthood Offices
is as bad or worse. At least they aren't shooting at bankers.
> The abuse of this act by ACORN and officials like Janet Reno was a
> factor in causing the economic crisis. The harassment suits filed
> under this act were used to get banks to lower credit standards and
> hand out high risk loans. We have dug up the lawsuit below while
> researching Obama’s legal career. It is a typical example of an ACORN
> harassment lawsuit.
> In these lawsuits, ACORN makes a bogus claim of Redlining (denying
> poor people loans because of their ethnic heritage).
Oh the humanity. First you try to blame Clinton for a piece of
legislation that passed when Carter was president, and now you are
claiming that redlining didn't actually happen despite factual
evidence that it was common practice?
Redlining began back in the 1930s and was quite public.
http://en.wikipedia.org/wiki/Redlining
> They protest and
> get the local media to raise a big stink. This stink means that the
> bank faces thousands of people closing their accounts and get local
> politicians to lobby to stop the bank from doing some future business,
> expansions and mergers. If the bank goes to court, they will win, but
> the damage is already done because who is going to launch a big
> campaign to get the bank’s reputation back?
So again you want to ban free speech. Nice.
I don't think it is necessary to say anything further to rebut this
article.
D/
-----------------------------------------------
Whoa there.... Pump the brakes!
First you say that US workers are not compensated adequately for their
productivity. Now you say that US workers are so expensive compared to
foreign workers that US jobs go overseas. Which is it? Overpaid or
underpaid?
mr dude@harvarduniversity.edu
>
> 2. The place where I have a problem with the video is the claim that
> this led to the financial meltdown. It did not affect the financial
> system precisely because the federal government backed up these
> agencies. What caused the meltdown is the issuance of bad mortgages by
> private lenders, the sale of these in bundles as securities,
Why did they bundle these securities???
Because they knew the government forced these bad loans!
They knew they were going to lose their shirts over these bad loans so
they tried to make money and save their companies any way they could.
mr dude
mr dude@harvarduniversity.edu
. If the bank goes to court, they will win, but
> > the damage is already done because who is going to launch a big
> > campaign to get the bank’s reputation back?
>
> So again you want to ban free speech. Nice.
>
> I don't think it is necessary to say anything further to rebut this
> article.
The Imperial federal government has free speech rights???
mr dude
eric
They bundled the loans into securities because they knew that with
government mortgage insurance they could sell them to some sucker no
matter how bad the loans were.
Interesting news today - it may turn out that these loans will come
back to bite the banks who made them after all.
http://finance.fortune.cnn.com/2011/05/04/have-lying-mortgage-bankers-met-their-match/
mr dude@harvarduniversity.edu
>
> http://finance.fortune.cnn.com/2011/05/04/have-lying-mortgage-bankers...
Freddy and Fanny set up the criteria under which the banks can sell
the loans and no longer have any risk of them going bad. That was the
mistake. Fanny and Freddy with other government collusion pressured
the banks to provide the loans to unqualified folks
The government under Clinton Janet Reno threatened to sue the banks
for discrimination if they didn’t provide the loans. Since the banks
weren’t at risk they went ahead and did as they were told. Fanny and
Freddy allowed the packaging of the bad loans with the good loans to
be sold to Goldman Sachs and others and AIG came up with a fraudulent
insurance policy called a derivative that was all sanctioned by the
government regulators.
It is important to understand the nature of these lawsuits and what
their purpose is. ACORN filed, or threatened to file, tons of these
lawsuits and ALL CRA suits allege racism (usually the press involved
and such with the threat of the CRA lawsuit is enough to get the bank
to give in and put them in a catch 22, they also had a willing Janet
Reno Justice Department to work with – see below for more on Reno). As
we have said in our series or articles analyzing every aspect of this
story (links at the very bottom of this post), the series of ACORN
harassment lawsuits and intimidation against banks to lower credit
standards was not the sole reason for the mortgage crisis, it was one
important layer of many that brought us to the mortgage crisis and the
largest financial scandal in the history of the world.
mr dude (despite the FACTS you still try to blame the banks?? The
government forced lawsuits on these "greedy" banks if they did not
give out unqualified loans!)
mr dude
eric
NIce story but your timeline doesn't work at all. The thing that
completely blows away this chain of reasoning is that really large
volume subprime lending didn't happen until 2005 or so, some 5 years
after the Clinton administration was out of office.
http://www.thetruthaboutmortgage.com/subprime-lending-volume-over-the-years/
eric
Also, you may want to consider this study regarding the effect of CRA
on the financial crisis.
http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf
Among other things it shows that CRA regulated banks were less likely
to originate subprime mortgages.