I am really sick of Democrats blaming businesses for the problems in our country

[motivez]

Originally Posted by Dumpy Dooby

I think the idea that government regulation takes care of everything flies in the face of the poisonous pet food from China.

How many people die while waiting for the FDA to approve a drug?

Government regulation certainly doesn't solve all problems, I've never made the claim that it does.

As far as how many die while waiting for the FDA to approve a drug, I'd imagine less than would die if there was no oversight at all working to ensure the safety of the drugs they do produce.

[lew]

Originally Posted by motivez

Really, so the businesses didn't make any bad decisions here? The loans weren't at all irresponsible?

Oh the loans were certainly irresponsible. But why should the banks care when the Feds will just bail them out when people start defaulting?

[Smull]

Yeah, if you ask me the mortgage crisis is one of the better cases for less regulation. The banks made irresponsible loans and normally they would pay a huge price for it. But like Lew said the banks aren't being punished for their bad call, instead the taxpayers get to pay for their mistake. I have some more sympathy for the people who took the bad loans, but they should have been more responsible when making decisions that involve thousands of dollars.

Now the price of housing is going down, and everyone (including McCain if I'm not mistaken) wants to bail everyone out so the prices stay the same/go back up. This seems like a terrible idea to me, if the price owning a home goes down then more people will be able to own a home, and most people would agree that more Americans owning their own homes is a good thing, right?

[Dumpy Dooby]

Originally Posted by motivez

Government regulation certainly doesn't solve all problems, I've never made the claim that it does.

You seem to have suggested that those who adhere to the principles of Capitalism necessarily believe that Capitalism subsumes utopia and perfect morality (re: "flies in the face of..."). That's just not the case. Capitalism, as a politico-economic backbone, is inerrant, but the individuals that act within the system are subject to be just as vile and heinous as those within a so-called "mixed economy." The difference is that Capitalism doesn't abuse the state's monopoly on force to aid in the process of such unethical business practices.

As far as how many die while waiting for the FDA to approve a drug, I'd imagine less than would die if there was no oversight at all working to ensure the safety of the drugs they do produce.

Why do you think a businessman would determine it's in his best interest to not have any oversight to ensure the safety of the drugs his company produces? That would be one Hell of a cost/benefit analysis because last I checked, if his company is responsible for directly harming its customers, there's likely a good chance of a class action law suit, as well as a good chance that people could wind up in jail for criminal negligence.

[Dumpy Dooby]

Originally Posted by Smull

Yeah, if you ask me the mortgage crisis is one of the better cases for less regulation. The banks made irresponsible loans and normally they would pay a huge price for it. But like Lew said the banks aren't being punished for their bad call, instead the taxpayers get to pay for their mistake. I have some more sympathy for the people who took the bad loans, but they should have been more responsible when making decisions that involve thousands of dollars.

Now the price of housing is going down, and everyone (including McCain if I'm not mistaken) wants to bail everyone out so the prices stay the same/go back up. This seems like a terrible idea to me, if the price owning a home goes down then more people will be able to own a home, and most people would agree that more Americans owning their own homes is a good thing, right?

Not exactly. When people default on their loans, it's really bad for our economy. The value of our dollar is based on our debt. When our debt is no longer worth purchasing (i.e., it's too risky because we default too often), the value of our dollar drops significantly. Whenever you take out a loan for a house or a car or whatever, the bank that issues the loan (or the bank of the financial institution that issues the loan) creates the money right there. In the event that you need notes, they issue notes from their reserves, but their overall capital is not affected. It's when you default on the loan that they actually lose capital. Too much defaulting on loans can lead to deflation, which would be much worse than the inflation suffered from bailing out the banks.

I'm not defending the idea of bailing them out. But I am explaining their reason for doing it. Personally, I think they should just let the economy fall flat on its ass. I'd rather it just happen quickly ... just like taking off a Bandaid!

[IminWonderland]

This whole housing crisis thing has been like this for the people I know...

Poor Family Man: I wish I could get a house for my Family.
Realtor: Well, home prices are on the rise, you better get in now!
Finance Person: Well, don't give me any pay stubs, we'll just say you make 100K, that way you can qualify for your dream home. Ding ding ding! You just got a brank new type of loan! Lucky you! You get to take advantage of great interests rates now, and have low payments for 5 years. Then it will adjust, because obviously, your earning potential is only going to increase, but don't worry, the interest rates can't go THAT high in that time. So take this letter, it says you can buy a house for only 500k!
Realtor: This house is priced at 400K, but alot of people are bidding on it! You better put it in on the high side!
Home Seller: Sweet! All these offers! I'm going to SCOTTSDALE!
Poor Family Man: WOW! It's so great that everyone is getting what they want!
Finance Guy: Yeah! I know, I got my commission!
Realtor: Me too!
Home Seller: I own my property outright now!

5 years later
Poor Family Man: Well, my job was in a call center, and that's in Delhi now. My wife left me because I couldn't support us. And now I'm loosing my home because it turns out it wasn't worth the money I paid for it.



Notice in this scenario, who walked away with money, they don't have to get back.

The Realtors used people to appraise houses worth WAY more than they were. They were all GREEEEEEEEEEDY. Like..INSANELY GREEDY. And they have yet to be punished for it. Because it is easier to have the Poor Family Man punished than a corporation or business who gets to have dinner with the legistlature and their assemblyman.

[jimeigh]

Originally Posted by WickedLou9

I think we need alot more people looking inward. I know it's kind of trite to quote Ghandi but we should be the change we want to see in the world. You don't like high gas prices? use less gas. Make changes in your own life and set a good example for others to follow.

ahhh the wise words of ghandi. what was it that he said? i think it was, "remember folks, when an obstacle comes your way... don't eat. The world will bow to your genius."

[Dumpy Dooby]

Originally Posted by IminWonderland

This whole housing crisis thing has been like this for the people I know...

Poor Family Man: I wish I could get a house for my Family.
Realtor: Well, home prices are on the rise, you better get in now!
Finance Person: Well, don't give me any pay stubs, we'll just say you make 100K, that way you can qualify for your dream home. Ding ding ding! You just got a brank new type of loan! Lucky you! You get to take advantage of great interests rates now, and have low payments for 5 years. Then it will adjust, because obviously, your earning potential is only going to increase, but don't worry, the interest rates can't go THAT high in that time. So take this letter, it says you can buy a house for only 500k!
Realtor: This house is priced at 400K, but alot of people are bidding on it! You better put it in on the high side!
Home Seller: Sweet! All these offers! I'm going to SCOTTSDALE!
Poor Family Man: WOW! It's so great that everyone is getting what they want!
Finance Guy: Yeah! I know, I got my commission!
Realtor: Me too!
Home Seller: I own my property outright now!

5 years later
Poor Family Man: Well, my job was in a call center, and that's in Delhi now. My wife left me because I couldn't support us. And now I'm loosing my home because it turns out it wasn't worth the money I paid for it.



Notice in this scenario, who walked away with money, they don't have to get back.

The Realtors used people to appraise houses worth WAY more than they were. They were all GREEEEEEEEEEDY. Like..INSANELY GREEDY. And they have yet to be punished for it. Because it is easier to have the Poor Family Man punished than a corporation or business who gets to have dinner with the legistlature and their assemblyman.

What should they be punished for? And how should the government punish them?

Realtors don't approve loans. It's not their fault that the banks loaned the "Poor Family Men" money. Banks should be able to loan money to whoever they want.

The problem, here, is that the government bails out the banks when they fuck up. Ergo, the banks have no incentive to not loan the money. On top of that, the Commodity Futures Modernization Act of 2000 (look it up) allowed "Speculators" to place bets on whether or not the loans would be paid off. The banks were betting that the loans would be paid off (except Bear Sterns who used the system to hedge their capital so as not to experience any significant loss) because people don't generally default. This encouraged the banks to start issuing more loans because they were doubling the amount that they made on them by "speculating."

[Dumpy Dooby]

Oh, but let's blame it on a lack of government involvement!

[Rouger2]

I would like to know where all those dollars for those funny house loans came from. I understand there were foreign investors involved. China and the Suadi have billions and billions of dollars to throw around because of our huge trade deficit with them. Were they pushing their dollars willing to take over the funny loans from US banks thinking they were going to make a bundle. So our banks were taking the funny loans knowing they could get rid of them. The realtors knew the banks would take them so they pushed them just a ugly cycle. Then who did we bail out, was it the foreign lenders we will never know because they are protected from prying eyes. I bet it was. Dam it we need to get rid of that Giantic trade dificit but who is talking about that those guys are going to own us. Start saving and quit driving and buy american make those foreigners pay. They are gaining billions and billions of dollars a year and there is no end in sight. Why do they want those dollars simply to buy our debt. Well they have more than enough to do that so the only thing else they can spend it on is our assets. They will own us. Where is the out rage where are Obama and Mccain.

[IminWonderland]

Originally Posted by Dumpy Dooby

What should they be punished for? And how should the government punish them?

Realtors don't approve loans. It's not their fault that the banks loaned the "Poor Family Men" money. Banks should be able to loan money to whoever they want.

The problem, here, is that the government bails out the banks when they fuck up. Ergo, the banks have no incentive to not loan the money. On top of that, the Commodity Futures Modernization Act of 2000 (look it up) allowed "Speculators" to place bets on whether or not the loans would be paid off. The banks were betting that the loans would be paid off (except Bear Sterns who used the system to hedge their capital so as not to experience any significant loss) because people don't generally default. This encouraged the banks to start issuing more loans because they were doubling the amount that they made on them by "speculating."

In the industry, MANY realtors knew that A) Home prices were being inflated and B) People were getting loans they had not the means to pay.

Actually, the Lenders knew it, the banks knew it, the only people who didn't realize it were the Chinese, where all this money came from in those package thingys they invested in our home industry.

Every facet of it was out to make a quick buck, and now everyone in the middle, who SHOULD have known better, has made their money, and dissappeared.

I know these people, they live in my area. I know so many people who have spouses who "used" to work in the mortgage industry, Ameriquest, Countrywide, the whole bit, they aren't just nameless corporations, people work for them, and those people made their money, and left the bond holders with bad investments, and the consumer with a popped balloon.

The entire thing was disgusting, and misleading, and I know this first hand, because those a-holes tried to qualify me for a subprime loan. I knew something didn't make sense, and we backed out of it thank god. But for other people, they were told they were going to be able to afford the American Dream, and now, they are left with bullocks.

No whistleblowing? Just foreclosing. That's an insult to the morality of all of the people involved.


I agree that alot of these people got into loans they should have never been offered. But, I also miss the days when banks acted like banks, instead of mafia loan sharks.

[IminWonderland]

Originally Posted by Rouger2

I would like to know where all those dollars for those funny house loans came from. I understand there were foreign investors involved. China and the Suadi have billions and billions of dollars to throw around because of our huge trade deficit with them. Were they pushing their dollars willing to take over the funny loans from US banks thinking they were going to make a bundle. So our banks were taking the funny loans knowing they could get rid of them. The realtors knew the banks would take them so they pushed them just a ugly cycle. Then who did we bail out, was it the foreign lenders we will never know because they are protected from prying eyes. I bet it was. Dam it we need to get rid of that Giantic trade dificit but who is talking about that those guys are going to own us. Start saving and quit driving and buy american make those foreigners pay. They are gaining billions and billions of dollars a year and there is no end in sight. Why do they want those dollars simply to buy our debt. Well they have more than enough to do that so the only thing else they can spend it on is our assets. They will own us. Where is the out rage where are Obama and Mccain.

I think you have the first part of it right. We got the money foreign, they gave it to the banks. The banks gave it to the lenders, who let loose all of their standards for loans, and loosened WAY WAY WAY too much. The only Bank who isn't falling hard on foreclosures is Wells Fargo, because they tightened their restrictions, instead of falling into the trap that others did.

And all of the lenders and financers, took this license, and took people's signature's knowing FULL WELL, that they would not have been able to get the loan that they did years before. They wouldn't ask for documentation, zero down, adjusting the income to fit the purchase price, having the home price inflated WAY beyond its worth.

INSANE.

I can't believe that I was alive and watching it happen.

This guy on NPR today was saying that one of two things will happen because of this:

major recession

or


government regulation




Maybe we need to get a quarter and pick that way. One or the other is going to happen. A recession is going to hurt the people. Regulation is going to hurt business.

[Dumpy Dooby]

Originally Posted by IminWonderland

In the industry, MANY realtors knew that A) Home prices were being inflated and B) People were getting loans they had not the means to pay.

Actually, the Lenders knew it, the banks knew it, the only people who didn't realize it were the Chinese, where all this money came from in those package thingys they invested in our home industry.

Every facet of it was out to make a quick buck, and now everyone in the middle, who SHOULD have known better, has made their money, and dissappeared.

I know these people, they live in my area. I know so many people who have spouses who "used" to work in the mortgage industry, Ameriquest, Countrywide, the whole bit, they aren't just nameless corporations, people work for them, and those people made their money, and left the bond holders with bad investments, and the consumer with a popped balloon.

The entire thing was disgusting, and misleading, and I know this first hand, because those a-holes tried to qualify me for a subprime loan. I knew something didn't make sense, and we backed out of it thank god. But for other people, they were told they were going to be able to afford the American Dream, and now, they are left with bullocks.

No whistleblowing? Just foreclosing. That's an insult to the morality of all of the people involved.


I agree that alot of these people got into loans they should have never been offered. But, I also miss the days when banks acted like banks, instead of mafia loan sharks.

You called for them to be punished. How would you like to punish the realtors? What do you think would be fair punishment?

[IminWonderland]

Originally Posted by Dumpy Dooby

You called for them to be punished. How would you like to punish the realtors? What do you think would be fair punishment?

What is the punishment for coercsion? Do we still do tar and feathering?

Dumpy, no one is going to punish anyone for this. And that, to me, is the sad part. This whole mess could have been avoided if these people were a little less greedy.

Can't our government at least point a finger at the industry and say "You guys need to do right."

The point isn't the punishment, the point is that that they were all greedy bastards making their commissions, taking their 3%.

In OC, a SFR used to run from 250-400K in a decent area. Because of all this, the Realtors, and Lenders were able to push the prices of those homes to 500-750K. Almost tripling the value of a house that isn't worth that. And I don't believe that things just go for however much people are willing to spend. We can't buy homes in SoCal for under 125K anymore. And we never will be able to again. But, they don't care, they made their paper, and went to South Coast Plaza.

It wouldn't have happened without their help. And alot of them KNEW that they were doing something that wasn't kosher. That's just aweful.

[Dylith]

Originally Posted by thewise1

An insurance company profits most when none of their clients suffer.

Which is why many people who really need it (and don't have it given to them through employment) can't afford it.

[Dylith]

Originally Posted by Dumpy Dooby

You seem to have suggested that those who adhere to the principles of Capitalism necessarily believe that Capitalism subsumes utopia and perfect morality (re: "flies in the face of..."). That's just not the case. Capitalism, as a politico-economic backbone, is inerrant, but the individuals that act within the system are subject to be just as vile and heinous as those within a so-called "mixed economy." The difference is that Capitalism doesn't abuse the state's monopoly on force to aid in the process of such unethical business practices.

So I take it that the free rider problem should be attributed to the failure of human morality instead of to a flaw in pure capitalist theory?


(still love the AV by the way, always makes me chuckle)

[Dumpy Dooby]

Originally Posted by Dylith

So I take it that the free rider problem should be attributed to the failure of human morality instead of to a flaw in pure capitalist theory?


(still love the AV by the way, always makes me chuckle)

I think the free rider "problem" is a myth. There is a market for roads, rubbish disposal, parks, etcetera.

The major problem that I see is a group unintentionally depleting a natural resource while trying to corner a market, but I wouldn't expect that to happen with any major commodities. Perhaps it could happen with lobster (or some other plant/animal that we consume), but then the market value of lobster would increase dramatically, and it would be in the best interest of the companies to preserve the life of the animals.