The Trump Economy

[SoCal Deek]

On ‎11‎/‎8‎/‎2019 at 5:44 PM, billsfan89 said:

 

I don't think anyone is bothered by continued economic growth. But in 2006 someone could have been saying that the economy is being propped up by deficit spending mainly used to fund a war and tax cuts for the wealthy, deregulation in various sectors and a bubble in the housing market. Would your retort to them have been why does growth bother you? 

 

Someone in 2006 would have been right to say the growth is a positive but what is causing it isn't going to last. Trump's economic growth was promised to be 3% and higher for multiple years. The best he got to was 2.9% (a high Obama reached) and that was with lower than usual (for positive GDP growth times) interest rates, huge deficit spending, and massive deregulation. 

 

There are huge bubbles in consumer credit, auto loans, student debt and various other credit cycles that aren't sustainable and unlike 2008 the interest rates are being held low which means that the stimulative effect of lowering rates will not be in the feds tool box come a possible recession. We have seen this script play out in 2008. Deregulation and sugar high tax cut deficit driven growth will always come with a big crash. 

 

When you don't have demand increases to justify expanding business your growth will be based on buyback and dividend increases funded by tax cuts. But once the tax burden gets normalized there is no room to grow. With the money from Trump's tax cuts and the increase to the military budget alone the US could have forgiven student debt, financed public college for all, and partially funded a infrastructure overhaul bill. All things that would have had a true stimulative long sustained impact on the economy. Instead we just juiced the stock market for a couple of years. 

Nice....so now you want my tax dollars towards bailing out kids who took out loans they couldn't afford?  Last time I was supposed to use my tax dollars to bail out adults who took out mortgages they couldn't afford.  Well guess what?  While all of this bailing out was going on, I funded my kids college education and paid off my house!  I couldn't give a rip about another bail out!  I'm done paying for everyone's poor spending habits!

[GG]

1 hour ago, Deranged Rhino said:

 

 

 

Oops.

[billsfan89]

3 hours ago, SoCal Deek said:

Nice....so now you want my tax dollars towards bailing out kids who took out loans they couldn't afford?  Last time I was supposed to use my tax dollars to bail out adults who took out mortgages they couldn't afford.  Well guess what?  While all of this bailing out was going on, I funded my kids college education and paid off my house!  I couldn't give a rip about another bail out!  I'm done paying for everyone's poor spending habits!

 

I get the idea of a moral hazard when it comes to bailouts. The mortgage bailouts weren't even a consumer oriented bailout they were bailouts for big business not the people that took the mortgages. I think the bank bailouts and the auto bailouts are the definition of socializing the losses and privatizing the gains. 

 

But when it comes to student loans I think a bailout would be both good economic policy (this would free up hundreds to thousands of dollars a month to millions of consumers, which would pump demand directly into the economy on a consumer level.) But it wouldn't be a moral hazard bailing out of lazy people who made bad decisions. 

 

The students who took on student loans were given access to 5-6 figures worth of loans with zero collateral and no means to declare bankruptcy or default at the age of 17 or 18. That isn't irresponsibility on the part of the student but the system. On top of that most of the students who took on student loans were encouraged to do so by their school system both public and private. When I went to high school everyone was basically told go to college or you are a loser. You were actively told you had to go to college (which was driven by the "college acceptance rate" metric being a highly desired ranking.) 

 

This isn't a failure on the consumer who the people issuing the loans knew weren't fully educated, mature, or able to put up the collateral needed and the schools that heavily pressured young students from the age of 14 on that this was their only option. I paid back my college loans, I have no problem levying a Wall Street transactional tax in order to finance a bailout of consumers hamstrung on loans that they should have never been able to take out. 

[DC Tom]

22 minutes ago, billsfan89 said:

 

I get the idea of a moral hazard when it comes to bailouts. The mortgage bailouts weren't even a consumer oriented bailout they were bailouts for big business not the people that took the mortgages.

 

They were actually bailouts of entire markets, not banks or people.  Unemployment was two months away from hitting 20%, because companies couldn't float commercial paper and were going to miss making payroll, which would have thrown them in to immediate bankruptcy (and we're talking big companies, like GM), because the lenders didn't have enough capital above their required reserves to buy commercial paper at any price.  The entire capital market system was about to go under.

 

I mean...people still don't understand this?  People think Lehman Brothers going under at 1am on a Monday morning was about protecting the executives, not US Treasuries?

 

 

[3rdnlng]

1 hour ago, billsfan89 said:

 

I get the idea of a moral hazard when it comes to bailouts. The mortgage bailouts weren't even a consumer oriented bailout they were bailouts for big business not the people that took the mortgages. I think the bank bailouts and the auto bailouts are the definition of socializing the losses and privatizing the gains. 

 

But when it comes to student loans I think a bailout would be both good economic policy (this would free up hundreds to thousands of dollars a month to millions of consumers, which would pump demand directly into the economy on a consumer level.) But it wouldn't be a moral hazard bailing out of lazy people who made bad decisions. 

 

The students who took on student loans were given access to 5-6 figures worth of loans with zero collateral and no means to declare bankruptcy or default at the age of 17 or 18. That isn't irresponsibility on the part of the student but the system. On top of that most of the students who took on student loans were encouraged to do so by their school system both public and private. When I went to high school everyone was basically told go to college or you are a loser. You were actively told you had to go to college (which was driven by the "college acceptance rate" metric being a highly desired ranking.) 

 

This isn't a failure on the consumer who the people issuing the loans knew weren't fully educated, mature, or able to put up the collateral needed and the schools that heavily pressured young students from the age of 14 on that this was their only option. I paid back my college loans, I have no problem levying a Wall Street transactional tax in order to finance a bailout of consumers hamstrung on loans that they should have never been able to take out. 

So, you are taking money from elsewhere or devaluing the dollar to free up money for the students who don't want or can't pay their loans back? Don't you think it's a little counter productive to bail out people who paid money to get an education that isn't good enough to allow them to pay the loans back themselves? The government made loans too easy and then the schools got greedy. All liberals behind this horseshit.

[Taro T]

5 minutes ago, 3rdnlng said:

So, you are taking money from elsewhere or devaluing the dollar to free up money for the students who don't want or can't pay their loans back? Don't you think it's a little counter productive to bail out people who paid money to get an education that isn't good enough to allow them to pay the loans back themselves? The government made loans too easy and then the schools got greedy. All liberals behind this horseshit.

 

Which also doesn't address why somebody who took loans out should end up with college for free when a lot of people paid for their or their kids' education end up being out $50-100k?

 

 

 

[3rdnlng]

2 minutes ago, Taro T said:

 

Which also doesn't address why somebody who took loans out should end up with college for free when a lot of people paid for their or their kids' education end up being out $50-100k?

 

 

 

Think of the children though.

[leh-nerd skin-erd]

1 hour ago, billsfan89 said:

 

I get the idea of a moral hazard when it comes to bailouts. The mortgage bailouts weren't even a consumer oriented bailout they were bailouts for big business not the people that took the mortgages. I think the bank bailouts and the auto bailouts are the definition of socializing the losses and privatizing the gains. 

 

But when it comes to student loans I think a bailout would be both good economic policy (this would free up hundreds to thousands of dollars a month to millions of consumers, which would pump demand directly into the economy on a consumer level.) But it wouldn't be a moral hazard bailing out of lazy people who made bad decisions. 

 

The students who took on student loans were given access to 5-6 figures worth of loans with zero collateral and no means to declare bankruptcy or default at the age of 17 or 18. That isn't irresponsibility on the part of the student but the system. On top of that most of the students who took on student loans were encouraged to do so by their school system both public and private. When I went to high school everyone was basically told go to college or you are a loser. You were actively told you had to go to college (which was driven by the "college acceptance rate" metric being a highly desired ranking.) 

 

This isn't a failure on the consumer who the people issuing the loans knew weren't fully educated, mature, or able to put up the collateral needed and the schools that heavily pressured young students from the age of 14 on that this was their only option. I paid back my college loans, I have no problem levying a Wall Street transactional tax in order to finance a bailout of consumers hamstrung on loans that they should have never been able to take out. 

There is no challenge in our society today that blaming the system and a good old tax can’t fix.  In spite of the hardship so many faced while walking the mean streets of high school, with unsavory characters in trench coats offer applications to colleges in far away lands, many chose the road less traveled. They applied reason to higher education, remembered the basic math skills they were taught in elementary school and ‘settled’ for a trade, a job upon graduation, community college or a local school.  Still others committed to more expensive education and saw it through, honored their debt and managed to stay out of the soup kitchens.  
 

In the world you described, they system includes educators on every level, including and up to higher education.  Why are they immune to being part of the solution?  I’d think many schools have endowments, why not seize some of the money there?  They directly benefitted from the culture.  Why not a payroll surcharge on educators, the ones that participated in the scheme?  What about a pension tax, seeing as they benefited directly from the scheme?   I just checked the Penn State operating budget...$6.8 billion in 2019.  Heck the Penn State Alumni association pimps everything from license plates to credit cards.  Why tax Wall Street? 
 

I enjoyed reading your posts. 
 

 

 

[3rdnlng]

33 minutes ago, leh-nerd skin-erd said:

There is no challenge in our society today that blaming the system and a good old tax can’t fix.  In spite of the hardship so many faced while walking the mean streets of high school, with unsavory characters in trench coats offer applications to colleges in far away lands, many chose the road less traveled. They applied reason to higher education, remembered the basic math skills they were taught in elementary school and ‘settled’ for a trade, a job upon graduation, community college or a local school.  Still others committed to more expensive education and saw it through, honored their debt and managed to stay out of the soup kitchens.  
 

In the world you described, they system includes educators on every level, including and up to higher education.  Why are they immune to being part of the solution?  I’d think many schools have endowments, why not seize some of the money there?  They directly benefitted from the culture.  Why not a payroll surcharge on educators, the ones that participated in the scheme?  What about a pension tax, seeing as they benefited directly from the scheme?   I just checked the Penn State operating budget...$6.8 billion in 2019.  Heck the Penn State Alumni association pimps everything from license plates to credit cards.  Why tax Wall Street? 
 

I enjoyed reading your posts. 
 

 

 

The University of Michigan has 93 Diversity Officers.

 

“According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 — a 221 percent increase.”

Universities are large and require administrators to function, of course. The problem is there seems to be no end to the expansion. This point was recently illustrated by Mark Perry, an economics professor at the University of Michigan-Flint.

Perry, who also is a scholar at the American Enterprise Institute, used the University of Michigan as an example to highlight the rise of “diversicrats” (diversity bureaucrats) on today’s campuses. The numbers are astonishing.

1. The University of Michigan currently employs a diversity staff of nearly 100 (93) full-time diversity administrators, officers, directors, vice-provosts, deans, consultants, specialists, investigators, managers, executive assistants, administrative assistants, analysts, and coordinators.

2. More than one-quarter (26) of these “diversicrats” earn annual salaries of more than $100,000, and the total payroll for this small army is $8.4 million. When you add to cash salaries an estimated 32.45% for UM’s very generous fringe benefit package for the average employee in this group (retirement, health care, dental insurance, life insurance, long-term disability, paid leave, paid vacation, social security, unemployment insurance, Medicare, etc.) the total employee compensation for this group tops $11 million per year. And of course that doesn’t count the cost of office space, telephones, computers and printers, printing, postage, programs, training, or travel expenses.

https://www.intellectualtakeout.org/article/diversity-staff-university-michigan-nearly-100-full-time-employees

[leh-nerd skin-erd]

17 minutes ago, 3rdnlng said:

The University of Michigan has 93 Diversity Officers.

 

“According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 — a 221 percent increase.”

Universities are large and require administrators to function, of course. The problem is there seems to be no end to the expansion. This point was recently illustrated by Mark Perry, an economics professor at the University of Michigan-Flint.

Perry, who also is a scholar at the American Enterprise Institute, used the University of Michigan as an example to highlight the rise of “diversicrats” (diversity bureaucrats) on today’s campuses. The numbers are astonishing.

1. The University of Michigan currently employs a diversity staff of nearly 100 (93) full-time diversity administrators, officers, directors, vice-provosts, deans, consultants, specialists, investigators, managers, executive assistants, administrative assistants, analysts, and coordinators.

2. More than one-quarter (26) of these “diversicrats” earn annual salaries of more than $100,000, and the total payroll for this small army is $8.4 million. When you add to cash salaries an estimated 32.45% for UM’s very generous fringe benefit package for the average employee in this group (retirement, health care, dental insurance, life insurance, long-term disability, paid leave, paid vacation, social security, unemployment insurance, Medicare, etc.) the total employee compensation for this group tops $11 million per year. And of course that doesn’t count the cost of office space, telephones, computers and printers, printing, postage, programs, training, or travel expenses.

https://www.intellectualtakeout.org/article/diversity-staff-university-michigan-nearly-100-full-time-employees

 

 

[KRC]

11 hours ago, billsfan89 said:

 

I get the idea of a moral hazard when it comes to bailouts. The mortgage bailouts weren't even a consumer oriented bailout they were bailouts for big business not the people that took the mortgages. I think the bank bailouts and the auto bailouts are the definition of socializing the losses and privatizing the gains. 

 

But when it comes to student loans I think a bailout would be both good economic policy (this would free up hundreds to thousands of dollars a month to millions of consumers, which would pump demand directly into the economy on a consumer level.) But it wouldn't be a moral hazard bailing out of lazy people who made bad decisions. 

 

The students who took on student loans were given access to 5-6 figures worth of loans with zero collateral and no means to declare bankruptcy or default at the age of 17 or 18. That isn't irresponsibility on the part of the student but the system. On top of that most of the students who took on student loans were encouraged to do so by their school system both public and private. When I went to high school everyone was basically told go to college or you are a loser. You were actively told you had to go to college (which was driven by the "college acceptance rate" metric being a highly desired ranking.) 

 

This isn't a failure on the consumer who the people issuing the loans knew weren't fully educated, mature, or able to put up the collateral needed and the schools that heavily pressured young students from the age of 14 on that this was their only option. I paid back my college loans, I have no problem levying a Wall Street transactional tax in order to finance a bailout of consumers hamstrung on loans that they should have never been able to take out. 

 

Disagree. People need to take responsibility for their actions, not blame others because they were not prevented from making bad decisions. Nobody repaid my loads. I paid them by working. I also worked to make sure that I minimized my loads. Nobody gave me anything. I worked for it. It took me longer to get through college, but I did not come out with massive debt that I could not afford. Why? Because I understood math. I also did not come out with massive debt after getting my Master's. Again, Math. The system is not to blame for people being irresponsible. It is the people who took out the loans.

Edited November 12, 2019 by KRC

[SoCal Deek]

Student Loans: Another system screwed up by having the federal government involved! And for our next trick?  Health Care! (This’ll be an even bigger mess.)

[row_33]

2 hours ago, SoCal Deek said:

Student Loans: Another system screwed up by having the federal government involved! And for our next trick?  Health Care! (This’ll be an even bigger mess.)

 

The People see college as an entitlement, which is beyond moronic if you don't have:

 

1)  a studious STEM child

2)  the $$$$ to pay a good chunk of the costs already

3)  a degree that will be of use when you graduated, usually point 1) but lots of non-STEMS have good careers

 

 

 

 

[TPS]

13 hours ago, DC Tom said:

 

They were actually bailouts of entire markets, not banks or people.  Unemployment was two months away from hitting 20%, because companies couldn't float commercial paper and were going to miss making payroll, which would have thrown them in to immediate bankruptcy (and we're talking big companies, like GM), because the lenders didn't have enough capital above their required reserves to buy commercial paper at any price.  The entire capital market system was about to go under.

 

I mean...people still don't understand this?  People think Lehman Brothers going under at 1am on a Monday morning was about protecting the executives, not US Treasuries?

 

 

They aren't mutually exclusive.  The Fed (and TARP) did  both--they made sure markets had sufficient liquidity to function AND they bailed out the largest banks by buying up toxic assets at face value, then paying interest on the reserves. The banks then had the hutzpah to offer bonuses for their great management during the crisis.... 

[3rdnlng]

3 hours ago, KRC said:

 

Disagree. People need to take responsibility for their actions, not blame others because they were not prevented from making bad decisions. Nobody repaid my loads. I paid them by working. I also worked to make sure that I minimized my loads. Nobody gave me anything. I worked for it. It took me longer to get through college, but I did not come out with massive debt that I could not afford. Why? Because I understood math. I also did not come out with massive debt after getting my Master's. Again, Math. The system is not to blame for people being irresponsible. It is the people who took out the loans.

I don't understand what your "loads" have to do with anything. Is it like selling your blood?

[KRC]

2 minutes ago, 3rdnlng said:

I don't understand what your "loads" have to do with anything. Is it like selling your blood?

 

How do you think I paid for my student loans?

[GG]

30 minutes ago, TPS said:

They aren't mutually exclusive.  The Fed (and TARP) did  both--they made sure markets had sufficient liquidity to function AND they bailed out the largest banks by buying up toxic assets at face value, then paying interest on the reserves. The banks then had the hutzpah to offer bonuses for their great management during the crisis.... 

 

Revisionist history much?  

 

Nothing about the federal government urging healthy banks to acquire teetering investment banks (without much due diligence) to ease the crisis,  stomping on shareholders' rights and then turning around and suing those banks for following the feds' suggestions?   Fully knowing (and tacitly encouraging) LIBOR gaming in a cheap way to restore bank stability, then turning around and suing banks for that manipulation?

 

Please tell us of the bonuses that Jimmy Cayne & Dick Fuld received during the crisis.

[B-Man]

DON’T GIVE THEM ANY IDEAS: 

How To Trigger A Global Recession In One Easy Step: Ban Fracking.

 

 

 

 

 

 

THE DISASTROUS TRUMP ECONOMY CONTINUES:  Chase Bank CEO – “This Is The Most Prosperous Economy The World Has Ever Seen.”

 

 

 

 

.

[TPS]

1 hour ago, GG said:

 

Revisionist history much?  

 

Nothing about the federal government urging healthy banks to acquire teetering investment banks (without much due diligence) to ease the crisis,  stomping on shareholders' rights and then turning around and suing those banks for following the feds' suggestions?   Fully knowing (and tacitly encouraging) LIBOR gaming in a cheap way to restore bank stability, then turning around and suing banks for that manipulation?

 

Please tell us of the bonuses that Jimmy Cayne & Dick Fuld received during the crisis.

Awww....the poor little bankers did nothing wrong.    I wonder how the poor shareholders would've reacted if the banks were simply allowed to fail?    I'm mean, if we're going to cry about "stomping on shareholders' rights" by the heavy hand of the feds, then let's simply let the market work things out....

 

Finance wants it both ways.  Leave us alone when we're making money, but save us when we create out of control bubbles...

[GG]

8 minutes ago, TPS said:

Awww....the poor little bankers did nothing wrong.    I wonder how the poor shareholders would've reacted if the banks were simply allowed to fail?    I'm mean, if we're going to cry about "stomping on shareholders' rights" by the heavy hand of the feds, then let's simply let the market work things out....

 

Finance wants it both ways.  Leave us alone when we're making money, but save us when we create out of control bubbles...

 

Wrong take again.  The offending institutions' equity was wiped out as those banks ceased to exist.   The bailouts preserved market liquidity through the healthy institutions, while Fed mandated that nearly all banks take TARP funds, even those who refused it.   We have laws that protect private property from unjust takings by the government, which were usurped by executive order.

 

As for the banks' bad behavior leading up to the crisis, I'd put them below the realtors and the mortgage brokers, who were all regulated by the states, which were perfectly happy to look the other way as real estate churn padded the revenues.  It was also less evil than the accounting chicanery at Fan/Fred that fueled the bubble.   And less dangerous than the regulators allowing full credit for structured CDOs to have the same capital requirements as other AAAs.