The Trump Economy

[row_33]

Just now, GG said:

 

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.

 

the bubble was caused by the Dems finally getting their dream implemented into law that...

 

asking how someone with a horrible credit rating, and no job, was going to pay back their large mortgage was discriminatory....

 

 

 

 

[GG]

2 minutes ago, row_33 said:

 

the bubble was caused by the Dems finally getting their dream implemented into law that...

 

asking how someone with a horrible credit rating, and no job, was going to pay back their large mortgage was discriminatory....

 

 

 

 

 

This was a total bi-partisan interconnected financial mess.  The tie to CRA is anecdotal and too small to cause a global financial crisis.

[3rdnlng]

26 minutes ago, GG said:

 

This was a total bi-partisan interconnected financial mess.  The tie to CRA is anecdotal and too small to cause a global financial crisis.

Would you agree that it was at least the camel's nose that pushed its way under the tent?

[GG]

4 minutes ago, 3rdnlng said:

Would you agree that it was at least the camel's nose that pushed its way under the tent?

Not really.  Too small in the grand scheme of things.  

 

If you are looking at the bigger government malfeasance, then turning a blind eye to the accounting frauds at Fan Fred was much bigger. 

Edited November 12, 2019 by GG

[TPS]

2 hours ago, GG said:

 

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.

The "offending institutions" were wiped out, really?  All of them?    Citigroup was a healthy institution?  

 

Yes, yes...The FED and former GS CEO T-sec Paulson played the bad government man and forced the banks to take handouts.  I guess Hank was corrupted once he became a government employee...So the banks were force-fed Tarp funds, but they gladly accepted becoming BHCs to have access to the Fed's window.  Again, you want it both ways.  Some countries full-on nationalized, and that well could've happened here.  But private property....blah, blah, blah...

 

 

 

[3rdnlng]

 

[billsfan89]

19 hours 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. 
 

 

 

 

There are some circumstances in which you have to relocate resources via new taxes to fix issues. It isn't the solution to every issue but a lot of our issues stem from a lack of public investment into avenues that would help the middle and consumer class. 

 

I agree that high schools and the general education system needs to reorient how they prepare students for the decision to go to college. And although high schools the last 5 years are starting to shift how they prepare students (my nephew is going to a trade school because he was explained the benefits of taking on a trade vs taking on huge loans to go to college) there still needs to be more work done in that respect. So we are in full agreement that the education system as a whole needs major adjusting in how they prepare students for a post school life. 

 

As to why Wall Street Speculation taxes? Well for one that tax actually helps alleviate the high frequency trading that is ***** with the markets. Two it is something that has worked in other nations, it is actionable far better than a wealth tax. Finally it would raise enough money to both fund the bailout of students trapped in past debt and finance college publicly for the foreseeable future. Personally I think it just makes sense from a feasibility standpoint. A Wall Street Tax also has a limited impact on most Americans, you can have the first 30k worth of trades exempted 

 

But if you wanted to go after colleges in some way that makes sense to help pay for the solutions I am fine with it. I do think that public financing should come with steeper regulations to limit useless administrators and other frivolous spending so it shouldn't be a blank check either. 

 

However what do you do about the three generations of students from the 90s, 00s, and early part of this decade who were misinformed and miseducated about what their prospects for college were? No one would give a small business loan to an 18 year old with zero collateral and relevant experience. Yet we want to hold people responsible for access to bad credit they can't default on. 

 

The thing is this is hurting the economy. We have tens of millions of people whose consumer spending is heavily limited by hundreds to even 4 figures worth of monthly payments they are trapped in. If you free up these people's money that money more than likely is going to go back into the economy and increase demand (which has a massive widespread benefit.) 

 

So in addition to the moral argument of bad credit and bad advice at a young age shackling students with bad debt due to decisions made at age 17/18 there is the general economic argument. 

[row_33]

4 hours ago, GG said:

 

This was a total bi-partisan interconnected financial mess.  The tie to CRA is anecdotal and too small to cause a global financial crisis.

 

Dems and liberals have been calling loan application forms racist since the 1960s, and yeah the GOP can take some blame for forcing the banks to implement it

 

 

[billsfan89]

10 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.

 

If a 17 year old went to a bank and asked for a 50k small business loan with no collateral and cosigner they would be rightfully rejected. Yet not only did three generations of students have access to 5 and 6 figures worth of loans they were encouraged by trusted educators to take out these loans, loans to which they could not go bankrupt on. This was as much if not more an institutional failure as it was an individual failure. 

 

If that isn't a system to which you can understand someone falling prey to then I think you are failing to step out from the idea that not everyone thinks like you and people shouldn't be punished for the rest of their lives because they weren't as responsible at age 18 as you were. At age 16, 17, and 18 people are susceptible to those types of circumstances and bad guidance without being wildly irresponsible. This isn't a moral hazard situation. Would some people be bailed out on stupid decisions? Yes but we can't base entire policies on the idea that if 10% of people benefit were stupid then ***** the rest. 

 

And that's forgetting the grander economic argument that if you actually were to do a consumer level bailout (unlike previous bailouts which bailed out the companies) you would see a massive positive economic gain far greater than the tax cut bill for relatively far cheaper. Student loans eat up hundreds to thousands of dollars of tens of millions of families and individuals monthly income. If you give a 25 year old 400 dollars extra a month they are probably going to circulate that at a consumer level. They are going to spend it on things they were putting off or into enjoying them selves at local business or buying consumer products. Most of that money actually stays in the economy unlike corporate tax cuts which go to dividends and buybacks that end up in a lot of international hands effectively transferring money out of the economy. That is an actual sustained stimulus on the economy. 

 

I would get being against a bailout of credit card debt for consumers because well you can't just bail people out of poor decisions. That's a true moral hazard. You also have the ability to go bankrupt on most other forms of debt, which while damaging to your credit is not something that can't be overcame. This is a unique situation where a consumer bailout is something that falls well into the line of reason both in terms of economic stimulus and moral necessity. 

[3rdnlng]

3 minutes ago, billsfan89 said:

 

If a 17 year old went to a bank and asked for a 50k small business loan with no collateral and cosigner they would be rightfully rejected. Yet not only did three generations of students have access to 5 and 6 figures worth of loans they were encouraged by trusted educators to take out these loans, loans to which they could not go bankrupt on. This was as much if not more an institutional failure as it was an individual failure. 

 

If that isn't a system to which you can understand someone falling prey to then I think you are failing to step out from the idea that not everyone thinks like you and people shouldn't be punished for the rest of their lives because they weren't as responsible at age 18 as you were. At age 16, 17, and 18 people are susceptible to those types of circumstances and bad guidance without being wildly irresponsible. This isn't a moral hazard situation. Would some people be bailed out on stupid decisions? Yes but we can't base entire policies on the idea that if 10% of people benefit were stupid then ***** the rest. 

 

And that's forgetting the grander economic argument that if you actually were to do a consumer level bailout (unlike previous bailouts which bailed out the companies) you would see a massive positive economic gain far greater than the tax cut bill for relatively far cheaper. Student loans eat up hundreds to thousands of dollars of tens of millions of families and individuals monthly income. If you give a 25 year old 400 dollars extra a month they are probably going to circulate that at a consumer level. They are going to spend it on things they were putting off or into enjoying them selves at local business or buying consumer products. Most of that money actually stays in the economy unlike corporate tax cuts which go to dividends and buybacks that end up in a lot of international hands effectively transferring money out of the economy. That is an actual sustained stimulus on the economy. 

 

I would get being against a bailout of credit card debt for consumers because well you can't just bail people out of poor decisions. That's a true moral hazard. You also have the ability to go bankrupt on most other forms of debt, which while damaging to your credit is not something that can't be overcame. This is a unique situation where a consumer bailout is something that falls well into the line of reason both in terms of economic stimulus and moral necessity. 

So, should an 18 year old gang member who chops the head off of the 12 year old neighbor girl not be punished for the rest of his life because he was just irresponsible?

[DC Tom]

15 minutes ago, billsfan89 said:

 

If a 17 year old went to a bank and asked for a 50k small business loan with no collateral and cosigner they would be rightfully rejected. Yet not only did three generations of students have access to 5 and 6 figures worth of loans they were encouraged by trusted educators to take out these loans, loans to which they could not go bankrupt on. This was as much if not more an institutional failure as it was an individual failure. 

 

If that isn't a system to which you can understand someone falling prey to then I think you are failing to step out from the idea that not everyone thinks like you and people shouldn't be punished for the rest of their lives because they weren't as responsible at age 18 as you were.

 

They took someone else's money.  Paying it back is not "punishment."

[leh-nerd skin-erd]

49 minutes ago, billsfan89 said:

 

There are some circumstances in which you have to relocate resources via new taxes to fix issues. It isn't the solution to every issue but a lot of our issues stem from a lack of public investment into avenues that would help the middle and consumer class. 

 

I agree that high schools and the general education system needs to reorient how they prepare students for the decision to go to college. And although high schools the last 5 years are starting to shift how they prepare students (my nephew is going to a trade school because he was explained the benefits of taking on a trade vs taking on huge loans to go to college) there still needs to be more work done in that respect. So we are in full agreement that the education system as a whole needs major adjusting in how they prepare students for a post school life. 

 

As to why Wall Street Speculation taxes? Well for one that tax actually helps alleviate the high frequency trading that is ***** with the markets. Two it is something that has worked in other nations, it is actionable far better than a wealth tax. Finally it would raise enough money to both fund the bailout of students trapped in past debt and finance college publicly for the foreseeable future. Personally I think it just makes sense from a feasibility standpoint. A Wall Street Tax also has a limited impact on most Americans, you can have the first 30k worth of trades exempted 

 

But if you wanted to go after colleges in some way that makes sense to help pay for the solutions I am fine with it. I do think that public financing should come with steeper regulations to limit useless administrators and other frivolous spending so it shouldn't be a blank check either. 

 

However what do you do about the three generations of students from the 90s, 00s, and early part of this decade who were misinformed and miseducated about what their prospects for college were? No one would give a small business loan to an 18 year old with zero collateral and relevant experience. Yet we want to hold people responsible for access to bad credit they can't default on. 

 

The thing is this is hurting the economy. We have tens of millions of people whose consumer spending is heavily limited by hundreds to even 4 figures worth of monthly payments they are trapped in. If you free up these people's money that money more than likely is going to go back into the economy and increase demand (which has a massive widespread benefit.) 

 

So in addition to the moral argument of bad credit and bad advice at a young age shackling students with bad debt due to decisions made at age 17/18 there is the general economic argument. 

Well, I was following your line of reasoning that someone, somewhere, somehow should be penalized for the decisions people make.  I actually would not advocate for penalizing teachers and hitting their pension plans--I have no major issues with teachers, see no reason to punish them, and besides, that would never happen. 

 

As for the 3 generations of students...I would support them honoring their debt.  Many likely drove past the 3 or 4 local community colleges on their way to amassing debt that made little sense anywhere along the way. Many, most, likely ignored the advice of those who cautioned against taking on the debt load--the suggestion that no one warned them or urged caution makes little sense to me.

 

Aa an alternative, since we're going down this road--would you support reimbursing the cost of education for those who did not incur the debt?  My 3 children attended college, and through work, reasonable loans and assistance from us they graduated debt free (or will, one is still in school). Honestly, I could use the money back and had I known the march toward all free all the time was coming, perhaps I would have encouraged financing the nut. I was under the impression they were doing something honorable and beneficial for their own future(s), had I known they were victims of Big EdU I might have handled things differently.  

 

Here's the other thing. Students attend school, obtain grants and loans and do all sorts of stupid $#!# with the money. Alcohol. Drugs. Spring Break. Live on campus instead of living at home. Drop out with debt. How do we separate the wheat from the chaff-- or do we not bother because we gotta find a victim somewhere?

 

If the pols insist on the "forgive the debt of the victims, screw the people that paid as obligated, and screw wall street", yes, I'd suggest raising the coffers of the alumni funds, school budgets and endowments to solve the debt issue before ever getting to Wall Street. Thay, too will never happen because when you say "Seize 10% of the annual operating budget of "UCLA" or "Cornell Alumni Fund", its hard to see them as greedy as "WALL STREET".  

 

As for Wall Street reform, I'm all for it, but the money should not go back to a pretend victim class--it should go back to the people and victims of the scheme. 

[leh-nerd skin-erd]

39 minutes ago, billsfan89 said:

 

If a 17 year old went to a bank and asked for a 50k small business loan with no collateral and cosigner they would be rightfully rejected. Yet not only did three generations of students have access to 5 and 6 figures worth of loans they were encouraged by trusted educators to take out these loans, loans to which they could not go bankrupt on. This was as much if not more an institutional failure as it was an individual failure. 

 

If that isn't a system to which you can understand someone falling prey to then I think you are failing to step out from the idea that not everyone thinks like you and people shouldn't be punished for the rest of their lives because they weren't as responsible at age 18 as you were. At age 16, 17, and 18 people are susceptible to those types of circumstances and bad guidance without being wildly irresponsible. This isn't a moral hazard situation. Would some people be bailed out on stupid decisions? Yes but we can't base entire policies on the idea that if 10% of people benefit were stupid then ***** the rest. 

 

And that's forgetting the grander economic argument that if you actually were to do a consumer level bailout (unlike previous bailouts which bailed out the companies) you would see a massive positive economic gain far greater than the tax cut bill for relatively far cheaper. Student loans eat up hundreds to thousands of dollars of tens of millions of families and individuals monthly income. If you give a 25 year old 400 dollars extra a month they are probably going to circulate that at a consumer level. They are going to spend it on things they were putting off or into enjoying them selves at local business or buying consumer products. Most of that money actually stays in the economy unlike corporate tax cuts which go to dividends and buybacks that end up in a lot of international hands effectively transferring money out of the economy. That is an actual sustained stimulus on the economy. 

 

I would get being against a bailout of credit card debt for consumers because well you can't just bail people out of poor decisions. That's a true moral hazard. You also have the ability to go bankrupt on most other forms of debt, which while damaging to your credit is not something that can't be overcame. This is a unique situation where a consumer bailout is something that falls well into the line of reason both in terms of economic stimulus and moral necessity. 

10%??!

 

90% of the victim class were innocent victims who didn't know basic math?  I'm not sure how the economy survives if 90% of people who graduated in the 90s are 90% imbecile. 

[billsfan89]

23 minutes ago, DC Tom said:

 

They took someone else's money.  Paying it back is not "punishment."

 

They can't go bankrupt on those loans like any other loan. If a bank makes a risky loan they suffer the consequences of such risky activity. But we saddle students with loans that they can't default on. Loans they were encouraged to take by educators that they trusted in many cases. That is punishing them by having onerous conditions to massive amounts of money they shouldn't have had access to. 

[TakeYouToTasker]

15 minutes ago, billsfan89 said:

 

They can't go bankrupt on those loans like any other loan. If a bank makes a risky loan they suffer the consequences of such risky activity. But we saddle students with loans that they can't default on. Loans they were encouraged to take by educators that they trusted in many cases. That is punishing them by having onerous conditions to massive amounts of money they shouldn't have had access to. 

Sounds like a strong argument in favor of abolishing the DoE and teachers unions, and raiding the endowments of universities and teachers pension funds.

[billsfan89]

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

Well, I was following your line of reasoning that someone, somewhere, somehow should be penalized for the decisions people make.  I actually would not advocate for penalizing teachers and hitting their pension plans--I have no major issues with teachers, see no reason to punish them, and besides, that would never happen. 

 

As for the 3 generations of students...I would support them honoring their debt.  Many likely drove past the 3 or 4 local community colleges on their way to amassing debt that made little sense anywhere along the way. Many, most, likely ignored the advice of those who cautioned against taking on the debt load--the suggestion that no one warned them or urged caution makes little sense to me.

 

Aa an alternative, since we're going down this road--would you support reimbursing the cost of education for those who did not incur the debt?  My 3 children attended college, and through work, reasonable loans and assistance from us they graduated debt free (or will, one is still in school). Honestly, I could use the money back and had I known the march toward all free all the time was coming, perhaps I would have encouraged financing the nut. I was under the impression they were doing something honorable and beneficial for their own future(s), had I known they were victims of Big EdU I might have handled things differently.  

 

Here's the other thing. Students attend school, obtain grants and loans and do all sorts of stupid $#!# with the money. Alcohol. Drugs. Spring Break. Live on campus instead of living at home. Drop out with debt. How do we separate the wheat from the chaff-- or do we not bother because we gotta find a victim somewhere?

 

If the pols insist on the "forgive the debt of the victims, screw the people that paid as obligated, and screw wall street", yes, I'd suggest raising the coffers of the alumni funds, school budgets and endowments to solve the debt issue before ever getting to Wall Street. Thay, too will never happen because when you say "Seize 10% of the annual operating budget of "UCLA" or "Cornell Alumni Fund", its hard to see them as greedy as "WALL STREET".  

 

As for Wall Street reform, I'm all for it, but the money should not go back to a pretend victim class--it should go back to the people and victims of the scheme. 

 

I say this as someone who paid off their debt (35k worth of debt myself 10k paid for by my parents) I think it would be nearly impossible to reimburse people who paid off past loans and there always has to be a cut off. No matter what type of loan forgiveness you do there are always going to be winners and losers. You have to consider the grander economic benefit and the future benefit of publicly funded state universities (your kids no longer have to worry about saving for college.) 

 

I also think you underestimate the pressure that was put on students to attend college from high schools. My guidance counselor told me that I basically only would be successful if I attended college (I graduated high school in 2007) and I was a fairly mid-level student. High Schools public and private were often graded on "college acceptance rate" they were funneling students to go to college because they were graded on it for funding and rankings. That's not to say that students don't have agency in their lives but rather that there were many factors that influenced kids to take on those loans that weren't the result of rampant irresponsibility but institutional failure at many levels.

 

How far back do you go in reimbursing people for paying off their loans? Do you go 4 years back then the people 5 years back will complain? There is always going to be a borderline where people fall off. Once again there is the grander economic benefit of debt forgiveness. Also if you accompany debt forgiveness with publicly financed universities you have a benefit that future generations universally benefit from. 

 

As far as irresponsible people using that loan money on bad investments? Well in any universal solution you are going to have people that benefit from irresponsible behavior. But considering the circumstances a universal solution is the only one that makes sense. You have a program that you know would have widespread positive economic impacts and would largely benefit middle/working and upper middle class people many of whom were not acting irresponsibly then I don't see why a small minority of people would keep you from supporting such a program that would also benefit future "responsible" generations.

 

As far as getting the money from endowments and the colleges themselves? I don't know if that is necessarily possible. I am not sure if you tax endowments and college funds 10% or more that it would produce the money needed in order to fund a program. Whereas a Wall Street Speculation tax with the first 25k exempt is a tax that solves the high frequency trading problem while funding the bailout money and future college education funding needed. 80% of Americans don't own stocks, of that 20% that do most don't make more than 25k worth of trades. A speculation tax would be a very small tax burden placed on an industry who constantly gets bailout, subsidized and favorable tax treatment and has a problem with high frequency trading that needs to be curbed.

1 hour ago, 3rdnlng said:

So, should an 18 year old gang member who chops the head off of the 12 year old neighbor girl not be punished for the rest of his life because he was just irresponsible?

 

For one that's an extreme example that is very hyperbolic. The main argument is that the system that encouraged and granted loans was far more irresponsible than the young students who were often ill-informed and ill-prepared for the massive amount of capital loans they should have never had access to and can't default on. The students were not Irresponsible the system was. 

[billsfan89]

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

10%??!

 

90% of the victim class were innocent victims who didn't know basic math?  I'm not sure how the economy survives if 90% of people who graduated in the 90s are 90% imbecile. 

 

If your teachers, guidance consolers and parents tell you college is the path to a better life then you think you are acting responsibly to get an education that is constantly being told to you as the path to a better life. I think you have a system that shouldn't be giving 5-6 figure loans with zero collateral to 18 and 17 year olds. You can't even default or go bankrupt on these loans. This is a failure of the system that was supposed to prepare kids for this decision on many levels not a bunch of irresponsible people doing something frivolous in most cases. 

Edited November 13, 2019 by billsfan89

[3rdnlng]

9 minutes ago, billsfan89 said:

 

 

 

For one that's an extreme example that is very hyperbolic. The main argument is that the system that encouraged and granted loans was far more irresponsible than the young students who were often ill-informed and ill-prepared for the massive amount of capital loans they should have never had access to and can't default on. The students were not Irresponsible the system was. 

From your post that I responded to:

 

not everyone thinks like you and people shouldn't be punished for the rest of their lives because they weren't as responsible at age 18 as you were.

[billsfan89]

1 minute ago, 3rdnlng said:

From your post that I responded to:

 

not everyone thinks like you and people shouldn't be punished for the rest of their lives because they weren't as responsible at age 18 as you were.

 

As though there is no context? 

[GG]

4 hours ago, TPS said:

The "offending institutions" were wiped out, really?  All of them?    Citigroup was a healthy institution?  

 

Yes, yes...The FED and former GS CEO T-sec Paulson played the bad government man and forced the banks to take handouts.  I guess Hank was corrupted once he became a government employee...So the banks were force-fed Tarp funds, but they gladly accepted becoming BHCs to have access to the Fed's window.  Again, you want it both ways.  Some countries full-on nationalized, and that well could've happened here.  But private property....blah, blah, blah...

 

 

 

 

Investment banks and banks weren't one and the same, but I'm sure you conflate them in these discussions accidentally.   

 

Please tell me why trust and clearing banks like Bank of NY, Northern Trust & State Street had to accept TARP even though they had zero subprime exposure?  I see the rationale why the Fed wanted every bank to take the funds so as not to highlight the banks that were in truly bad shape, but that's not what you're arguing, is it?

 

Also another lesson why the business community abandoned Obama.  He ran to the banks asking for everyone to pitch into a common solution, even though it was detrimental to the individual organizations they ran.  When things calmed down, he turned around and sued the executives who pitched in to help.   Then he was miffed why the business community hated him.