Gaffing all the way
[See also this. Since this particular tempest is about economics, I’ll not weigh in myself.]
The New Neo
A blog about political change, among other things
[See also this. Since this particular tempest is about economics, I’ll not weigh in myself.]
Its interesting to note that the bubble was created by the left, and once it came they exploited it (or tried to).
in essence, the bad loans went mostly to minorities, who under normal circumstances couldnt get loans as they didnt have the financials for them.
however, the left penchant for equality of outcome over equlity under the law, put forth the scary proposition to banks that they were going to sue them for racial discrimination if they didnt get their loans more racially harmonious.
well, stuck between the two, they did that, and decided to avoid their problem by bundling them and selling them as the do with other loans
on the flip side, poor people saw what they thought was a opportunity. however, they are often poor because they are not savvy at what is opportunity, what is risk, and how to navigate that safely. so they decided to do things like… buy the house, sit in it for one year, and then sell it at a profit…
however, thats speculation, and it causes people to see what they can afford for a year… with such endless rumours all my life that real estate always goes up in value (Tell that to the people of newark), and you get poor people thinking that flipping houses many times the size that they could ever live in, was the way to make it to easy street.
however, the banks had to figure out how to help them and thats the ARM loans… it solved the problem of how to give poor people money they cant repay, and at leat have the potential that tey will be able to flip and sell.
eventually, less and less savvy people joined, and so you get people with 40k a year in a house that needs 400k because they had enough savings to live that way for 1 year. and when the house didnt sell, well the bubbles started to pop.
thats exacerbated by things like fractional banking, where the money is multiplied many many times as it makes loans, and since ther is no gold none of them are actually backed by things. so when the bbble pops, a lot more damage is done since the bets called in are all calling for the ame 100 dollars loaned out to 20 separate people.
ergo the fiat bailout that will seem to resulve things. but in essence will make it worse in a more subtle way… by inflating..
right now the dollar is worht 1/10 of what it was when i was 10 years old..
they basically take the value out of the money, but creating more of it, and the big guys that get the new stuff get to spend it at the oldrate before it propagates and corrects its value.
clever huh?
anyway… ever since crysler was bailed out the mantra was to grow as large as you can with state help that way the state will protect and preserve your ass from market competion.
so we have a state that wishes a planned economym, [people willint to try it out, but they cant see that the state cant even get it right when only a small part of the economy is that way!!!
we are in for some bad times, the likes of which havent been seen since i was a kid. and given other issues, we may be in bad time akin to my grandparents if world issues and depression hits the skids when china and others decide no longer to use US currency as their means of exchange.
it all waits to see what each player will do..
I especially liked the link to BHO’s gaffe on “New Pennsylvania”.
In isolation I could attribute such a remark to the stresses of the campaign trail. However, when one starts to combine New Pennsylvania within the 57 states of America, I begin to wonder: does this guy even really know anything about his own country?
Artfldgr is correct, but there is an additional point, which I think favors neither Republicans nor Democrats, because no one wants to hear it.
Not everyone who got those loans defaulted. Those loans fail at a higher rate, leading to cumulative troubles, but most of them succeed. A lot of those people are still in their homes. It may be precarious and tight, but a lot of them will ride this out.
Future blog entry suggestions for Neoneocon.
“She’s Vice President in our hearts”
“Palin: where are the fact-checkers?”
“Why Palin’s flips don’t matter”
“Wanting a cool and sexy Vice Prez”
“Palinphiles: well, nobody’s perfect”
“Palin and getting her facts straight”
“Palin’s ignorance: this is getting scary”
“Palin: don’t know much about history, but I know what I like”
“A cult is born: they believe in her”
I’m sure I come up with more if you need me too.
Of course you had a whole week to deconstruct her, and only a year in the spotlight for Obama. Who do we really know?
I’m an economic illiterate myself but just from a political viewpoint it seems like Democrats wouldn’t want voters to see a series of headlines that read:
Palin says Fan-Fred too expensive to taxpayers
Democrats say Palin doesn’t know what she’s talking about
Federal Government allocates $2 Billion to bail out Fan-Fred
“Of course you had a whole week to deconstruct her,”
Deconstructionism is *sooo* 90’s – heck by the time I graduated (early 2000) we had already moved into a post-deconstructionist curriculum even in the medium sized state college I went too. In the larger universities they were on the verge of the Next Great Thing (sadly, being an engineer I thought the whole thing a load of horse crap and never bothered to see the what the Next Great Thing was – I was really kinda tired of learning why those English, history, and other humanities professors were telling us their ideas meant that math was no longer correct – but then when you somehow thought that 2+2 *might* equal five if you looked at it a certain way I guess one might have some issues with college level math).
By all means – please enlighten us with many reams of deconstructionist thoughts on Palin. I’m sure they will *really* help you win the election. Shower us with your wisdom, at least I guess it isn’t stuck in the 1960’s like many others out there.
I’m not an economic illiterate – been doing banking for a few decades.
What Palin said is true. If I had not read that someone was pouncing on it as a gaffe it would not even have crossed may mind to question her statement.
When I was young and a leftist I found their goals attractive. I also thought economics was boring. As I learned more about economics as a banker and started to dig down beneath the superficial dogmas the left is so fond of, my politics also shifted. I think there is a connection. When talking to many people on the left it seems to me that they are able to hold to their views because they assume some idiotic economic nonsense.
I have no idea what Palin believes economically speaking, but her statement is accurate as far as it goes.
That anyone would attack her on that basis actually reveals more about their own ignorance or foolish assumptions.