Capitalism Guarantees Rising Inequality

[RKMBrown]

they must have thought all of those sub-prime loans they made beyond the requirements of the government were going to make them a profit.

what part of the fact that they did make both a short term profit for making the initial sale, and then a long term profit when we bailed them out with tax payer funds, went over your head?

wtf?

Your gonna have to provide more information than wtf, if you want a reasoned response.

Lenders make an initial profit on all loans in the form of fees.

When the US Government sends failing lenders bail out money, the lenders end up making even more profit. Not only did we bail them out with cash we let them borrow money to buy up the failed properties at discount prices that they wanted to own, and we are paying the bad notes for CRA borrowers who don't have income, giving the failed lenders even more profit that they don't deserve, all money from the US Taxpayer.

 

[RKMBrown]

IRRELEVANT.

Banks are in the business of lending money for a profit.

If they believe that you are a bad risk they are not going to lend it.

They should NOT be coerced or compelled to make one one one single loan.

.

They must have thought all of those sub-prime loans they made beyond the requirements of the government were going to make them a profit.

No they didn't. They knew they were going to take it on the chin. They were counting on the government bailing them out.

^ Nailed it. My bet is that was the plan from the start. Bankers (cartel) figured it was time to cash in on the dot com boom. Run the rates to the floor, set up the market for a massive bubble, then buy it all up at discount prices with near zero interest rates and using tax dollars to boot. Barney Frank and his "committee" colluded. Cartel cashed in by having congress puppets push the to big to fail advertising message. Like it was scripted.

Next step will be to run the rates back up, then sell us back our property at pre-crash prices that they bought with our tax dollars. In stead of loosing trillions for the risks they took, the banks are making trillions and we are paying for it.

 

[itfitzme]

IRRELEVANT.

Banks are in the business of lending money for a profit.

If they believe that you are a bad risk they are not going to lend it.

They should NOT be coerced or compelled to make one one one single loan.

.

Wrong in so many ways.

a)The Congress finds that—
(1)regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;

(2)the convenience and needs of communities include the need for credit services as well as deposit services; and

(3)regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.

(b)It is the purpose of this chapter 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

Your fundamental axioms or postulates are a) The government has no right to regulate bank, b) the free market would function properly without regulations and c) banks are required to make bad loans.

The reality of the economy is that money is a public good. It is not a private good.

In fact, the very founding of the US was driven by mercantile policy of England that continuously removed monies from the colonies and drove the economy to a standstill. England also made it illegal for any of the colonies to create monies.

As well, the creation of monies is accomplished by extending credit. Economic growth, even at a local level, is entirely dependent on an expanding local supply of monies.

If, in fact, a bank does not extend credit to the local community from which it gets deposits, it is effectively removing money from the local community instead of growing the local economy and money supply. This is, in principle, in complete opposition to the motivations of the drafters of the Constitution.

The fact of the matter is that the free market, even credit markets, are not somehow magically stable. It can and will kill the economy far more rapidly than it grows. Money has no purpose except as a means of accounting in an economy. It is, by it's very nature, the most public of all objects.

The fact that a bank is taking deposits from the local community clearly means the local community is sound and that there are local individuals to whom good loans may be made.

CRA does not require financial institutions to make bad loans.

And, CRA applies to FDIC banks, banks that have accepted the FDIC and to banks that are part of the Federal Reserve system. It applies to regulated banks. There are many financial institutions to which it does not apply.

At the very least, as an insurance company, the FDIC and gov't has every right, by free market principles, to require insured banks. And, as the Federal Reserve has every reason why they should monitor and regulate banks that do business with them.



OCC: Community Reinvestment Act (CRA) Questions and Answers

12 CFR 228.11 - Authority, purposes, and scope. | LII / Legal Information Institute

FRB: Community Reinvestment Act (CRA)

Community Reinvestment Act - Wikipedia, the free encyclopedia

 

[Bombur]

This discussion went from talking about lending poor people money to buy a home to high crimes and conspiracies to steal billions from the American people.

I really have no interest in the latter but if anyone else wants to talk about the former I am all for it.

 

[Contumacious]

IRRELEVANT.

Banks are in the business of lending money for a profit.

If they believe that you are a bad risk they are not going to lend it.

They should NOT be coerced or compelled to make one one one single loan.

.

Wrong in so many ways.

a)The Congress finds that—
(1)regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;

(2)the convenience and needs of communities include the need for credit services as well as deposit services; and

(3)regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.

(b)It is the purpose of this chapter 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

Your fundamental axioms or postulates are a) The government has no right to regulate bank, b) the free market would function properly without regulations and c) banks are required to make bad loans.

The reality of the economy is that money is a public good. It is not a private good.

In fact, the very founding of the US was driven by mercantile policy of England that continuously removed monies from the colonies and drove the economy to a standstill. England also made it illegal for any of the colonies to create monies.

As well, the creation of monies is accomplished by extending credit. Economic growth, even at a local level, is entirely dependent on an expanding local supply of monies.

If, in fact, a bank does not extend credit to the local community from which it gets deposits, it is effectively removing money from the local community instead of growing the local economy and money supply. This is, in principle, in complete opposition to the motivations of the drafters of the Constitution.

The fact of the matter is that the free market, even credit markets, are not somehow magically stable. It can and will kill the economy far more rapidly than it grows. Money has no purpose except as a means of accounting in an economy. It is, by it's very nature, the most public of all objects.

The fact that a bank is taking deposits from the local community clearly means the local community is sound and that there are local individuals to whom good loans may be made.

CRA does not require financial institutions to make bad loans.

And, CRA applies to FDIC banks, banks that have accepted the FDIC and to banks that are part of the Federal Reserve system. It applies to regulated banks. There are many financial institutions to which it does not apply.

At the very least, as an insurance company, the FDIC and gov't has every right, by free market principles, to require insured banks. And, as the Federal Reserve has every reason why they should monitor and regulate banks that do business with them.



OCC: Community Reinvestment Act (CRA) Questions and Answers

12 CFR 228.11 - Authority, purposes, and scope. | LII / Legal Information Institute

FRB: Community Reinvestment Act (CRA)

Community Reinvestment Act - Wikipedia, the free encyclopedia

Wrong is so many ways

The Congress finds that—

1-The poor vote early and often

2-there are more poor people that there are bankers

3-if a congresscritter gets the majority of the vote they get elected to office which provides them power

4-t is perfectly alright to stick to rich white bankers

.

 

[Londoner]

Wrong is so many ways

The Congress finds that—

1-The poor vote early and often

2-there are more poor people that there are bankers

3-if a congresscritter gets the majority of the vote they get elected to office which provides them power

4-t is perfectly alright to stick to rich white bankers

Mortgages became the new gold rush. They were used to create the largest Wall Street ponzi scheme ever (securities, swaps, derivatives). It's one thing for the government to help poor people buy homes, but its quite another for private firms like AIG to places a trillion dollars in bets on those transactions. The Wall Street meltdown that sank the economy happened because our great financial innovators freely chose to create a profit cow out of garbage. At the end of the day, they're responsible for the bets they make. If they didn't have 100% certainty in the nature of those mortgages, than they should not have purchased and re-sold them. They created a fucking conveyor belt that turned those mortgages into fools gold to be sold all over the globe. They got rich as the bubble grew; then they hedged (profited off) the meltdown. At that the end of the day, the poor homeowner got foreclosed on, but AIG and its investors were made whole by the corporate Welfare State.

Bankers get the most welfare of all. They get virtually free money at under 1%, then they loan it out for a king's ransom. If shit goes wrong, they get bailed out by Uncle Sucker, then they foreclose on the poor homeowner so they have more homes to sell to the next round of idiots.

If you want to see how to put the non-credit-worthy into homes, watch this. (We know you won't). Here you see how Bush gets rid of all the lending regulations that prevented poor people from buying homes. Why'd he do it? The economy was dead. After 20 years of debt-fueled consumption, the American consumer was tapped out. The only way to pump money into the economy was by tapping into the non-credit worthy, which Bush lays out carefully below. The strategy was brilliant. Once they got all the poor morons into homes on sub-primes, ol' Alan Greenspan raised the interest rates to flush the idiots out . . . so now the banks had a fresh round of competitively priced homes for the next round. But this was more than simply a mortgage or housing phenomena. When people are buying homes, they flock to stores en masse to furnish those homes - this increased spending is vital to economic growth. And then there's the uptick in home/condo construction, which also increases consumption. And then there's all the consumption that occurs as people's home values go up. People feel richer, so they spend more - and they borrow more against the home. Housing has often been used to fuel economic growth, but Bush turned into a criminal art form . . . and now we're paying the price.

[ame=http://www.youtube.com/watch?v=kNqQx7sjoS8]Home Ownership and President Bush - YouTube[/ame]

 

[Contumacious]

Wrong is so many ways

The Congress finds that—

1-The poor vote early and often

2-there are more poor people that there are bankers

3-if a congresscritter gets the majority of the vote they get elected to office which provides them power

4-t is perfectly alright to stick to rich white bankers

Mortgages became the new gold rush. They were used to create the largest Wall Street ponzi scheme ever (securities, swaps, derivatives). It's one thing for the government to help poor people buy homes, but its quite another for private firms like AIG to places a trillion dollars in bets on those transactions. ]

WHY are they different things?

You forced Mr Lender to lend to a deadbeat?

How does the banker make a buck in the transaction?

.

 

[Londoner]

WHY are they different things?

You forced Mr Lender to lend to a deadbeat?

How does the banker make a buck in the transaction?

.

Fair point.

I'm not talking about the loans themselves, but who bought the loans and what they did with them free of Government intervention.

Nobody forced private Wall Street firms to build a trillion dollar profit industry from a corruptly managed mortgage industry. At the end of the day, those Wall Street firms did not properly evaluate those mortgages. If AIG lacked crucial information about the deadbeat's ability to service the corrupt government mortgage, than they should have stayed away. However, they did the opposite. Wall Street wanted those mortgages because they were able to turn them into gold. This is why so many non-government mortgage companies got in the game (-I'm talking about the 65% of the mortgages sold to deadbeats not because of government, but because they could sell those mortgages to Wall Street without assuming any liability if the loan became non-performing. Meaning: deregulation, by protecting the loan's originator from liability if the deadbeat failed to service the loan, removed the entire mortgage industry's incentive to loan exclusively to credit-worthy borrowers).

Things like the CRA worked fine for decades until crucial regulations were removed by Clinton and Bush, who both caved to Wall Street pressure ("donations"). Anyway, it sounds like your news sources haven't talked much about Bear, Lehman, and AIG - the companies that very directly fueled the mortgage explosion but had nothing to do with the government loans you're talking about. Had the problem been just about government-influenced loans to deadbeats, it would have been containable. But Wall Street got involved, which created a fee based incentive system that pulled in the entire mortgage industry, which meant that over 50% of the loans made to deadbeats had nothing to do with government. At the end of the day, Wall Street should not have purchased those mortgages if they didn't have certainty about the people who received those loans.

 

[Contumacious]

WHY are they different things?

You forced Mr Lender to lend to a deadbeat?

How does the banker make a buck in the transaction?

.

Fair point.

I'm not talking about the loans themselves, but who bought the loans and what they did with them free of Government intervention.

Nobody forced private Wall Street firms to build a trillion dollar profit industry from a corruptly managed mortgage industry. At the end of the day, those Wall Street firms did not properly evaluate those mortgages. If AIG lacked crucial information about the deadbeat's ability to service the corrupt government mortgage, than they should have stayed away. .

Reaaaaaaaaaaaaaaaaaaaaaaaally?

ACORN wouldn't have accused them of discriminating against the brothers?

"Over the past thirty years or so, ACORN has been a major player in what can be described as a legalized extortion racket administered by the Federal Reserve and the Comptroller of the Currency, among other federal government agencies. The racket started with Jimmy Carter’s 1977 Community Reinvestment Act (CRA), which empowered "community groups" like ACORN to effectively extort billions (yes, billions with a "b") of dollars from banks. Much of the money is then used for ACORN’s political activities, which involve the mass registration of Democratic Party voters; supporting left-wing political candidates at all levels of government; organizing rallies, protests, and lobbying efforts for various planks of its "People’s Platform," which is essentially the same as the Socialist Party Platform of 1922".

.

 

[kaz]

They were used to create the largest Wall Street ponzi scheme ever (securities, swaps, derivatives)

Those aren't "ponzi" schemes. If you want to slam Wall Street because you trust government, that's up to you. But at least use words that make sense.

 

[Londoner]

WHY are they different things?

You forced Mr Lender to lend to a deadbeat?

How does the banker make a buck in the transaction?

.

Fair point.

I'm not talking about the loans themselves, but who bought the loans and what they did with them free of Government intervention.

Nobody forced private Wall Street firms to build a trillion dollar profit industry from a corruptly managed mortgage industry. At the end of the day, those Wall Street firms did not properly evaluate those mortgages. If AIG lacked crucial information about the deadbeat's ability to service the corrupt government mortgage, than they should have stayed away. .

Reaaaaaaaaaaaaaaaaaaaaaaaally?

ACORN wouldn't have accused them of discriminating against the brothers?

"Over the past thirty years or so, ACORN has been a major player in what can be described as a legalized extortion racket administered by the Federal Reserve and the Comptroller of the Currency, among other federal government agencies. The racket started with Jimmy Carter’s 1977 Community Reinvestment Act (CRA), which empowered "community groups" like ACORN to effectively extort billions (yes, billions with a "b") of dollars from banks. Much of the money is then used for ACORN’s political activities, which involve the mass registration of Democratic Party voters; supporting left-wing political candidates at all levels of government; organizing rallies, protests, and lobbying efforts for various planks of its "People’s Platform," which is essentially the same as the Socialist Party Platform of 1922".

.

I'm not talking about the lenders, nor am I talking about Fannie and Freddie.

I'm talking about the private Wall Street firms who purchased those loans when there was no pressure from government or ACORN to do so. You're not separating the Mortgage Lenders from the Wall Street institutions who freely bought those mortgages and converted them into securities.

 

[gnarlylove]

At the end of the day, they're responsible for the bets they make.

This is how we think society operates. When people make poor decisions they deserve to bear the burden. Indeed, who else could do better at bearing this burden than people making a million to 20M a year?--not to mention their millions in bonuses! The answer is few.

However, we know those who bet against themselves are not generally acting responsible. In this case it involved deceiving millions of folks in order to turn higher profits. 4 million homes were foreclosed on leaving many families homeless and this precise event meant the bankers won. If the families managed to pay the loans the bankers also won. Yet the money the bank "earned" mostly went to the board of directors and eventually gave Jamie Diamon a quaint 5 million dollar raise--roundly earned!

At that the end of the day, the poor homeowner got foreclosed on, but AIG and its investors were made whole by the corporate Welfare State.

Exactly. FOX news and Conservative media machines make it seem like poor people are entitled pricks while NEVER MENTIONING how bankers and social elite are above reproach, above laws. They can't go to jail even if they steal from millions of Americans by fraudulent loans they know were not affordable. When underwriters were questioning supervisors about fraudulent applications early on they were told to make it so that they could qualify--reducing basic standards. In other words, forget the fraud and let's commit our own fraud. This came down from above, it was not a decision underwriters who approved the loans made.
This is contrary to getting what you deserve, a sentiment widely expressed by staunch capitalists/conservatives who say the poor have earned their spot at the bottom. Why not the banker?

I guess the reason bankers earned so much is they have earned a spot as gods in our civilization. Normal laws of earning and capitalism seem to pass them by and we are OK with it. Fine capitalists who we aspire to be even! Whether they fuck over tax payers by billions upon billions (7.7 trillion) they are Job Creators. Somehow they take from us WAY MORE than they give and somehow they are infallible. Protect the interests of millionaires and convince the public of the same by convincing them the alternative--caring for those in poverty--is a scam. This is contrary to what you deserve, a sentiment widely expressed by staunch capitalists/conservatives who say the poor have earned their spot at the bottom. Why not the banker? Because they've earned enough money that they only deserve more money, even if they fuck over a significant portion of Americans in one way or another.

HA! WHAT A FUCKING CIRCUS!

If you want to see how to put the non-credit-worthy into homes, watch this. (We know you won't).
Home Ownership and President Bush - YouTube

Well said, of course they won't! It would mean stepping outside their own perception of reality. Of course they don't need to look at other perspectives because they already know their's is the right one even if it is secretly working against their own interests. That's how billions of dollars spent annually on Public Relations (ie propaganda) ends up dumbing Americans so they perceive a simple enemy: the poor and entitlement folks. The common goal is to extinguish all opposition.

That's not humanity. That's not our national interest. National interest involved the interests of all of those in the nation, not just whomever you wish. That's warfare on ourselves and we're waging it! FOX and all the leftwing sources are out to incapacitate our understanding. Pit us against ourselves and the reckless 1% wins the day as we scream at one another.

 

[Londoner]

They were used to create the largest Wall Street ponzi scheme ever (securities, swaps, derivatives)

Those aren't "ponzi" schemes. If you want to slam Wall Street because you trust government, that's up to you. But at least use words that make sense.

Are you fucking kidding me?

A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top.

When the banks ran out of creditworthy borrowers, they had to turn to uncreditworthy “subprime” borrowers; and to avoid losses from default, they moved these risky mortgages off their books by bundling them into “securities” and selling them to investors. To induce investors to buy, these securities were then “insured” with credit default swaps. But the housing bubble itself was another Ponzi scheme, and eventually there were no more borrowers to be sucked in at the bottom who could afford the ever-inflating home prices. When the subprime borrowers quit paying, the investors quit buying mortgage-backed securities. The banks were then left holding their own suspect paper; and without triple-A ratings, there is little chance that buyers for this “junk” will be found. The crisis is not, however, in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people’s money. - http://www.globalresearch.ca/credit...meltdown-and-derivative-disaster-du-jour/8634

 

[kaz]

They were used to create the largest Wall Street ponzi scheme ever (securities, swaps, derivatives)

Those aren't "ponzi" schemes. If you want to slam Wall Street because you trust government, that's up to you. But at least use words that make sense.

Are you fucking kidding me?

A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top.

When the banks ran out of creditworthy borrowers, they had to turn to uncreditworthy “subprime” borrowers; and to avoid losses from default, they moved these risky mortgages off their books by bundling them into “securities” and selling them to investors. To induce investors to buy, these securities were then “insured” with credit default swaps. But the housing bubble itself was another Ponzi scheme, and eventually there were no more borrowers to be sucked in at the bottom who could afford the ever-inflating home prices. When the subprime borrowers quit paying, the investors quit buying mortgage-backed securities. The banks were then left holding their own suspect paper; and without triple-A ratings, there is little chance that buyers for this “junk” will be found. The crisis is not, however, in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people’s money. - Credit Default Swaps: Evolving Financial Meltdown and Derivative Disaster Du Jour | Global Research

What you wrote in red as their motivation is preposterous. Banks made sub-prime loans because the Clinton administration decided it was the "American Dream" to own a home and they threatened to Spanish inquisition them if they didn't do it. W continued that policy. And the Fed pumped them with virtually interest free cash to fund it.

Basically you just contorted their motivation to make it sound like a "ponzi scheme." But that they were doing it to avoid losses from default is preposterous and unsupportable. The housing bubble is what happens when lawyers force business to do their bidding, and the finger pointing afterwards is what happens when lawyers screw the pooch and it doesn't work.

 

[gnarlylove]

Banks made sub-prime loans because the Clinton administration decided it was the "American Dream" to own a home and they threatened to Spanish inquisition them if they didn't do it. W continued that policy. And the Fed pumped them with virtually interest free cash to fund it.

So the banks bend to the will of the government? Yeah I guess that's how you might view it but bankers make far more money than any government official. They pay to get legislation they write up adopted. They donate to campaigns of favored politicians. Those politicians are not looking out for you. They are looking out for those who helped them get elected.

Who lost in this scheme anyway? The way you make it sound the Banks loose. Do you think the banks are doing poorly because they almost drove global market off a cliff? Nope. They are doing better than ever. 91 billion in bonuses just over 2 months ago

So who suffered? Those who cannot afford homes experience the biggest loss. It's good you can spin this to be a failing of the government. Blaming the government is easy, especially when the government fucks up every time. And with such narrow interests represented, it's no wonder we typically see pathetic governing.

 

[Londoner]

The housing bubble is what happens when lawyers force business to do their bidding, and the finger pointing afterwards is what happens when lawyers screw the pooch and it doesn't work.

Bear, Lehman and AIG bought those mortgages, turned them into securities, then insured them, then sold them all over the globe.

The global money that poured into these mortgage back securities was unreal. The pension funds that bought these securities en mass were not motivated by putting poor people in houses. They were motivated by the returns that these securities promised, and the Wall Street firms were motivated by the profits made from selling these securities. They couldn't create mortgages fast enough to satisfy the global thirst for the returns these products promised. Why are you denying the amount of money they made from these products?

What explains the behavior of those firms who purchased the bad loans, made billions in profits converting them into securities, but were not operating under a government mandate? We're not talking about Fannie/Freddie here. Meaning: the FOX News version of events leaves too much of the story unexplained. It under-reports the incentives Wall Street gave to mortgage originators.

Why are you still not separating the lenders from the private Wall Street firms who turned those loans into fool's gold. AIG was under no compunction from the US Government. They participated in the securities and derivatives business because they were making massive profits in the beginning, as housing values were rising. They could have easily passed on those mortgages, but the money was too good. This is why everybody got in the game. Decades of neoliberal tax policy had left tons of surplus wealth on top, all of it looking for sound, safe investments. This is why so much money poured into these products. A gold rush mentality formed around these mortgage backed securities, and Wall Street firms couldn't sell them fast enough. You're trying to make the whole story about the bank that was forced to lend money to the poor black family, but you refuse to talk about the banks that participated independently of government mandate, or the entire Wall Street securities and derivatives industry created outside of government mandate. Look who got rich off this scheme, and then look who got foreclosed on . . . and you will understand who benefited from this criminally inflated and very predatory asset bubble.

Stop blaming Clinton for the bubble that burst on Bush's watch. Are you now saying we can't blame Bush for a crisis that happened on his watch, after he had been in office 8 years, 6 of which had GOP control of House and Senate. Listen to what Bush says below, especially about engaging Fannie & Freddie far more than Clinton ever dreamed. Listen to his words. This was part of Bush's ownership society. Thatcher tried the same thing. The theory is that if you give people a large taxable asset, they will have real skin in the game and be more likely to vote Republican. But the real upside for Bush was that the housing bubble created massive spending across different sectors and helped fuel an economy terribly weakened by 20 years of consumer debt, 20 years of losing middle class manufacturing jobs to China ... along with the bursting of the tech bubble and 9/11. Housing and Mortgage back securities became the only games in town; they promised (wrongly, but they did promise) solid, dependable returns. Greenspan lowered rates to the point of chasing money into these products. It was an orgy of profit built atop money that was fraudulently loaned into a dead economy on the backs of morons.

All you need to do is listen to Bush's words below. He wanted all Americans to buy homes, and borrow money against their homes so they could spend on main street and save the economy from long standing recessionary pressures. It looks like they were trying every trick in the book to stimulate the economy. If you want to blame government, check out the regulations surrounding Leverage. Government was asleep at the switch and over-trusted these firms to protect their investors. It allowed Wall Street to make huge profits selling insurance products that they didn't have the capital to cover. And when everything blew up, they skated with a bailout, leaving the consumers of houses and securities to wallow in the fraudulent aftermath of a ponzi scheme. But the larger picture is what matters. At the end of the day, the Bush administration, by not cooling the bubble when it became apparent that home values had become dangerously inflated, bankrupted a generation of homeowners and set in motion job losses that this country has not seen for over 70 years, and we now have over a decade of de-leveraging ahead of us as the overhang of consumer debt is reduced. But nothing is Bush's fault. Everything that happened on Bush's watch from 9/11 to the 2008 meltdown is Clinton's fault. And you blame Obama for not taking accountability? Your side invented blaming the previous president. Listen to Bush's words and stop soft-peddling his role. He didn't continue a previous policy. He put it on steroids and declared wild west lending and borrowing to an extent this nation has never seen. Own it for once. Take the accountability of what happened on your president's watch . . . for once just take accountability.


[ame=http://www.youtube.com/watch?v=kNqQx7sjoS8]Home Ownership and President Bush - YouTube[/ame]

 

[georgephillip]

WHY are they different things?

You forced Mr Lender to lend to a deadbeat?

How does the banker make a buck in the transaction?

.

Fair point.

I'm not talking about the loans themselves, but who bought the loans and what they did with them free of Government intervention.

Nobody forced private Wall Street firms to build a trillion dollar profit industry from a corruptly managed mortgage industry. At the end of the day, those Wall Street firms did not properly evaluate those mortgages. If AIG lacked crucial information about the deadbeat's ability to service the corrupt government mortgage, than they should have stayed away. .

Reaaaaaaaaaaaaaaaaaaaaaaaally?

ACORN wouldn't have accused them of discriminating against the brothers?

"Over the past thirty years or so, ACORN has been a major player in what can be described as a legalized extortion racket administered by the Federal Reserve and the Comptroller of the Currency, among other federal government agencies. The racket started with Jimmy Carter’s 1977 Community Reinvestment Act (CRA), which empowered "community groups" like ACORN to effectively extort billions (yes, billions with a "b") of dollars from banks. Much of the money is then used for ACORN’s political activities, which involve the mass registration of Democratic Party voters; supporting left-wing political candidates at all levels of government; organizing rallies, protests, and lobbying efforts for various planks of its "People’s Platform," which is essentially the same as the Socialist Party Platform of 1922".

.

"Let's clarify the causes of current circumstances. Ask yourself the following questions about the impact of the Community Reinvestment Act and/or the role of Fannie & Freddie:

• Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?

• 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?

• What about 'No Money Down' Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?

• Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?

• Did any Federal legislation require real estate agents and mortgage writers to use the same corrupt appraisers again and again? How did they manage to always come in at exactly the purchase price, no matter what? Did the CRA require banks to develop automated underwriting (AU) systems that emphasized speed rather than accuracy in order to process the greatest number of mortgage apps as quickly as possible?

• How exactly did legislation force Moody's, S&Ps and Fitch to rate junk paper as Triple AAA?

• What about piggy back loans? Were banks required by Congress to lend the first mortgage and do a HELOC for the down payment -- at the same time?

• Internal bank memos showed employees how to cheat the system to get poor mortgages prospects approved that shouldn't have been: Titled How to Get an 'Iffy' loan approved at JPM Chase. (Was circulating that memo also a FNM/FRE/CRA requirement?)"

The Big Picture

Do you see how the richest 1% of citizens use the power of government to enhance private fraud and then blame the same government when their crimes become too glaring to hide?

 

[Andylusion]

Voodoo wrecked and IS WRECKING the nonrich to the point where demand for products and services has dried up, along with their savings...before the corruption and cronyism housing and credit meltdown of 2008- while the rich have quadrupled their wealth...

I am making more this year, than ever before in my life. My mutual fund investments, made 23% increase last year.

1. WORKERS past 63 years worker productivity has grown by 2.0% per year.But after 1980, workers received a smaller share every year. Labor’s share of income (1992 = 100%):1950 = 101%1960 = 105%1970 = 105%1980 = 105% – Reagan1990 = 100%2000 = 96%2007 = 92%A 13% drop since 1980A 13% drop since 1980

2. THE TOP 10% GET A LARGER SHARE.Share of National Income going to Top 10%:1950 = 35%1960 = 34%1970 = 34%1980 = 34% – Reagan1990 = 40%2000 = 47%2007 = 50% TO MAKE UP FOR THE LOSS.Household Debt as percentage of GDP:1965 = 46%1970 = 45%1980 = 50% – Reagan1990 = 61%2000 = 69%2007 = 95% An increase of 16% since Reagan.

5. SO THE GAP BETWEEN THE RICHEST AND THE POOREST HAS GROWN.Gap Between the Share of Capital Income earned by the top 1%and the bottom 80%:1980 = 10%2003 = 56%A 5.6 times increase.

When I read this and it says "share of" and "gap between", my question always is "So what? Why should I care?"

Last year I made $20K. The year before I made $12K (very bad year for me). This year I'm making $25K.

If the richest 1% were making $100K, what difference would that make to me? If the richest were making $200K, what difference does that make? If they made $200 Million, what difference does it make to me? If they made $200 Billion, what difference does that make to me?

The answer to all of those is.... nothing. If Warren Buffet get's kicked out of Berkshire Hathaway, and ends up working as a WalMart Greeter, for minimum wage, what difference does that make to me?

Nothing. My life will not be impacted, whether the rich end up making trillions more, or trillions less. Them doing worse, will not result in me doing better. Nor does them doing better, result in me doing worse.

So as far as I can tell, the absolute only reason that people would care, or need to know what "share of the income" they are getting, or what "gap in income" there is, is if they are motivated by greed and envy of those doing better than themselves.

I have numerous friends in high school, that today make as much money in one year, as it takes me to earn in 10 years. It never occurred to me, that I should care about the gap in our income, or what larger share in the wealth they have.

In fact, I want EVERYONE to do better. That includes those wealthy people from my high school years. When they do better, I'm ecstatic. Why should anyone want someone else to do worse?

3. WORKERS COMPENSATED FOR THE LOSS OF INCOME BY SPENDING THEIR SAVINGS.The savings Rose up to Reagan and fell during and after.1950 = 6.0%1960 = 7.0%1970 = 8.5%1980 = 10.0% – Reagan1982 = 11.2% – Peak1990 = 7.0%2000 = 2.0%2006 = -1.1% (Negative = withdrawing from savings)

4. Household Debt as percentage of GDP:1965 = 46%1970 = 45%1980 = 50% – Reagan1990 = 61%2000 = 69%2007 = 95%A 45% increase after 1980.

Due to a cultural shift, not because of some economic factor. Many people don't realize that in the early 1970, and before, it was considered "evil" to have debt. Not just 'bad', but actually EVIL to have debt. Even Paul Krugman commented on this in his article

http://www.nytimes.com/2010/11/01/opinion/01krugman.html?_r=0

And there are many today, who have worked very hard to say that debt is good, and indeed the culture believes this. And it's not just consumer debt either. I've had people tell me that it's impossible to run a business without debt, never mind the fact thousands of well know companies have operated debt free since their creation, nevertheless people deny it.

Yet I myself am living debt free. I have not earned more than $20K in a single year, for the last 15 years. Yet I have no debt. Owe no one anywhere anything.

The reason consumer debt as gone up, is because in the late 1960s, and early 1970s, we ditched our moral values, which included debt is bad. We embraced the "get whatever you want, when you want it, on credit". As a result, the debt increased, and savings fell. Has nothing to do with economics. Has to do with people refusing to live within their means. That's all there is too it.

6. AND THE AMERICAN DREAM IS GONE.The Probabilityy of Moving Up from the Bottom 40% to the Top 40%:1945 = 12%1958 = 6%1990 = 3%2000 = 2%A 10% Decrease.

But is that by choice, or by economic policy?

Tell that to Robertson, who was a drunk guy working at a bar, and started whittling duck callers on his back pouch. I guess he missed the memo.

I just heard the story a married couple who came from Vietnam. They came here as students, and went to the University of Alabama, both got degrees in engineering. Both now make $120 each, for a household income of $240K a year..... from Vietnam.... learned English on the fly....

You tell them the American Dream is gone. Tell Robertson the dream is gone. Tell Nick Woodman, who created GoPro, that the American Dream is gone. He started off selling shell necklaces, to gain some money, and started working on his camera.

See, the problem isn't that the America Dream is gone. That's not the issue. The issue is that we have normalized stupidity.

You want to be broke for life? Just divorce your wife and find a new one every few years. I've met a dozen people right now, that lost nearly everything they built up, because they wanted to sleep around, or because "the ol grey mare just ain't what she used to be", and all that crap.

Or here's another one. We have moronically told our kids they can do anything they want. Then our kids go get a decree in Art History, or Music Therapy, and end up working at Burger King.

Have you ever wondered why Asians routinely out perform White Americans? It's because they get degrees in the hard sciences, instead of a Drama major, and end up making $26K. The two people from Vietnam, didn't come here and get a degree in Music, and then complain their $26K wage proves the American Dream is dead. They got an engineering degree, with a $120K wage, and said it's alive.

And lastly, what about all those people who simply refuse to advance themselves? When I was in high school, working at Wendy's, we had a lady show up who said openly she only intended to work until she qualified for welfare again, and even gave us the date. Sure enough, on that date she stopped showing up for work.

Is that because the American Dream is dead, or because she made a choice? 75% of all McDonald's Franchise owners, started off making minimum wage, and worked their way up. Clearly, you can advance, even from the minimum wage.

But it requires you to make that choice. Choosing to stay poor, is not a result of bad economic policies.... or maybe it is, in that we pay people to not work. But it most certainly is not because we prevent people from advancing.

 

[Andylusion]

Technological progress doesn't mean income inequality doesn't matter. There was massive increases in technological progress leading up to the early 1900's but the depressed working classes in Italy, Germany, and Russia were still used to help set up dictators and push nations towards war in large part because of income inequality.

These days nations protect themselves from such eventualities and some people in the US consider it to be socialism when in reality it is a desperate attempt to prevent real socialism from taking over.

The end goal is not equality but market economies that don't concentrate the income gains into just one class of people.

Income inequality isn't just a problem that exists in a bubble. It is something that is caused by other problems. Namely a weak labor market that doesn't just lead to income inequality but unemployment and inefficiency and slower growth in demand. This growth in demand becomes very important as we look at our current economic problems because it is rather clear at this point that US consumption has helped support global economic production increases for decades but it has been artificially propped up by debt and trade imbalances. Eventually this tactic would stop working and the entire world is starting to face the consequences. Demand has to grow with Production increases. This is a very hard fact that supply-siders don't seem to get.

Inequality has in fact pushed some nations to war. But that doesn't mean that inequality is bad, only that greed and envy of others who have more, is bad.

Further, it is impossible to have a system of 'freedom' in which wealth is not concentrated.

If you use your freedom to blow your money, you'll end up poor, no matter what your income is.

If I use my freedom to save my money, and invest my money, I'll end up rich, no matter what my income is.

You realize that just saving $100 a month, in a mutual fund, from 20 to retirement, will result in you being a millionaire, or close to it?

It goes back to the Pinball people, verses the Beer Pong people.

This is based on Warren Buffets history. When Buffet was in high school, he was working a paper route, and saved up money to buy a Pinball machine, which he placed in a local business. He invested his money into making more money.

Now what do most people do? I can't speak for everyone, but when I was in high school, the popular thing to do buy a keg of beer, and go to someone's home whose parents were away, and have a party, and play beer pong all night. They would consume all their money, and have a party.

Now, there is nothing wrong with what either of what these two groups did. There's nothing wrong with investing your money and buying a PinBall machine, or buying kegs of beer, and playing beer pong.

But the fact is, Buffet is not one of the worlds most wealthy men, because of some economic system, or government policy, or "class-system", or anything else. Buffet is wealthy and has concentrated wealth, because he was wise and invested his earnings, into making more earnings.

The reason that most people are poor, is because they spend every dollar they have, and consume their income. Now again, there's nothing wrong with that.

But there is something wrong with making choices, and then complaining that other people have "concentrated wealth", because they invested instead of spent, and you spent instead of invested.

When an individual makes a choice that makes them poor, it's not another persons fault for not doing the same. That's just greed and envy again.

 

[gnarlylove]

Androw, your stock increases offer nothing to half the country that doesn't play that game. It's odd how about 59% of Americans will experience poverty and that coincides with the stock ownership.

So as people like yourself and make money, it takes away money from those at the bottom. That's why it matters that the top 1% earn so much more. There is a limited amount of money in the system at one time and since 40% of the global wealth is owned by the top 1%, that leaves a lot less for the rest to share doesn't it? Not in your world since you have capital to back up your capital investments. What about the average household whose debt is exceeding their annual income now? I guess these people are to be written off in your equation and ignored "since they clearly haven't shown the earning power."

This American Dream is propaganda and advertisement for the US. While a few can break through the bonds of poverty, what tends to happen for those in poverty is they stay there. Not because a lack of motivation (poverty sucks!!!) but because a sheer lack of opportunity and quality education.

Read here about what American's think of the American Dream now-a-days. It ain't what it use to be...

The survey, MetLife’s 5th annual, uncovers emerging trends that show Americans are
less concerned with material issues, and that life’s traditional markers of
success — getting married, buying a house, having a family, building wealth — do not
matter as much today. Rather, achieving a sense of personal fulfillment is more
important toward realizing the American Dream than accumulating material wealth.

This tells the story that Americans have forsaken the idea of personal wealth (car, house family ownership) and is being traded in for a more feasible alternative: accepting what you have and aiming to not be a pay check away from poverty/couch surfing.

The economic policy are so evidently stacked against the poor its just dim-wittedness to miss it. War on the Poor is real and is happening. To deny it is to protect yourself in your isolated bubble of your well-to-do affluent friends. Such snobbery is easy to come by when poverty is a concept and not a reality for yourself.