O/T: The Bail Out

[Han]

Tim Daneliuk wrote in news:mk8vq5-agi.ln1 @ozzie.tundraware.com:

Yo should read your writings from the point of view of an unbiased mind, and you'll understand why I won't say anymore than

[krw]

IMO, it does. Without Wall St. the banks would be holding more of their own paper. The money wouldn't be made so much from originating the loans as holding them. They would naturally be more careful with their own portfolio.

OTOH, once the investment houses got involved, anything with a AAA rating was the same as any other and "AAA" got stamped on everything. The really silly thing was the banks were packaging and selling known junk on the loan side of their operations, then having their investment side buy the same junk others were packaging. Apparently they thought others somehow had a better class of "AAA" junk.

[Frank Boettcher]

Yes, if they did it by leveraging 40-50 to one and knew the risk factors. Watched some interviews yesterday with some CEO's of smaller banks and investement firms that are leveraged 3-4 to one and they are doing just fine, return on assets very repectable.

agreed.

agreed. The responsible rich did not cause this.

Better think this one through. So I make my 20% down payment, get a fixed interest rate, live frugally so that I can pay off my mortgage, live my life debt free, often denying myself and family things because I don't want debt, save religiously, make it to retirement oblivious of the fact that my pension fund and 401K, even though they are rather conservatively invested, are intertwined with these 40-50 to 1 leveraged firms that are going down and are at risk of catastrophic failure as a result.

The time for the hard line was before the fact. The people you describe as causative above will lose very little because they had no skin in the game. Those living off of someone else will walk away from their debt and continue to live off of somebody else. The greedy evil corporate bankers and CEO's will get large severance packages, and will complain at the country club that if it had held up they would be far richer. Politicians will continue to spin the truth and get elected or, if not, join lobbying firms to lobby their replacements.

But hundreds of millions described above, who had nothing to do with the cause, will suffer greatly. It is true that if nothing is done, they won't have to worry about paying to bail either party out, if this thing spirals down as modeled by a number of economists, they won't have enough assets and income to pay taxes to do so.

My thoughts.

Frank

[Dave in Houston]

If this guy is right, it can't be good. Kevin Phillips on Bill Moyers:

in Houston

[Swingman]

"Dave in Houston" wrote

Not only is he right, but if you go back and read through the archives of this newsgroup alone you will see his premise alluded to again and again by many of us common folk, particularly by those who share an all important age based perspective. All regarding issues such as loss of manufacturing, with emphasis on a burger flipping service economy and its attendant, ignorance based acceptance of shoddy goods and services; rampant corporate greed; a broken educational system (which, at its highest levels encourages that greed and blurs the distinction between morality and legality in our laws and social systems, with no moral compass to guide); social welfare trappings that exist mainly to salve a guilty conscious; illegal immigration; fiscal irresponsibility at all levels (just wait until the unsustainable credit card debt "bubble" hits the fan); and the inexplicable, tacitly allowed and insidious, government gridlock/ineptitude; which are all blatant, visible manifestations of an economy and culture spiraling downwards.

This crisis, with more to come, has been predictable for some time, which begs the question that if us common folk can see it coming, why the hell not our elected "representatives" ... for "leaders" they are provably not?

You can now sit back and wait for the next "crisis" stemming directly from the "What's in your wallet?" mentality.

Simply put: "what you sow, you shall reap"...

[Tim Daneliuk]

If we just let them fail, this problem would be self-correcting.

So that means - and I face this decision like so many others - we have to rebalance our retirement portfolios - now before the bottom falls out.

But, if we have bailout, we'll all be paying to *perpetuate* what you've just described.

You are - I think - right, up to a point. The problem is that there is *no* fix. The most the government can do is delay the inevitable. This whole mess starts and ends with business, individuals, and government living in economic fantasyland. Trying to buy our way out of it now with tax money will fix nothing. It will weaken the dollar and cause a consequent increase in oil prices. When government interdicts and distorts markets, no good thing comes from it. We need to get back to "Root, hog, or die" as did our forefathers.

[Frank Boettcher]

Don't think so, too intertwined, I'm led to believe. But I'm no expert.

A lot of the damage has already been done there. And there is no place to go except hard assets and cash and cash isn't safe. If the big bucks flow out of equities and cost and availability of capital is nil for those "adding value to something that is mined or grown", then they go down, nobody has a job and nothing is worth anything. So the government starts the priniting press and cash becomes worthless. And when there is no one to sell anything to, hard assets don't have any value.

The fix is to prevent complete collapse, then gradually move in the other direction in an orderly fashion. That direction would be limited government, limited taxation, rewarded personal responsibility, regulatory action to only prevent fraud, deception, or outright illegal behavior.

Problem is, we may have gone too far to get back. We have attained a weird sort of government and economy that has creeping socialism on one end and those in favor of and reaping the benefits of that have allowed a sort of reckless captialism on the other end to fund it. Even though the game is all but over, nobody is going to give up their position if they don't have to.

[Tim Daneliuk]

It's not "creeping". We have leapt into the socialist sewer on virtually every front given almost any opportunity. It is ironic that Comrade Obama has admitted he may have to give up his communist health insurance ambitions to make room for the socialist economic bailout. Evil begets evil.

Well, the problem is that it wasn't really free market capitalism at all. It was more like oligarchic capitalism in which the largest center of money in the private sector took profit when it appeared (as they should), but laid off the risk and losses to the taxpayer whenever possible (which should never have happened). This is not a free market economy, it's a con game. This doesn't stop the Obama communists from claiming that this was a "failure of the free market". It was no such thing and they know it, but like all collectivists, at their heart, they are liars.

Pretty much every left government in the past 100 years has participated, but so have a good many of the the so-called right governments. I note with disdain that the airlines got protection from the Bush administration in the immediate aftermath of 9/11 even though their problems long predated this, for instance. Why? Because the sheeple howled that they had a "right" to a "fair" price. Just like Clinton told them they have a "right" to housing. Just like Comrade Obama invents a "right" to healthcare and so forth. In my very jaundiced (I admit) view, it is this body of invented and fictitious rights promised the sheeple that actually paved the way for the taxocrats and the oligarchs to pillage the country's coffers, private and public.

Maybe you're right, we need to find a softer landing for now. But on the other side of that, as you say, we need and immediate return to limited government, individual responsibility, and self-sufficiency. Every time some drooling ideologue insists on using tax money to "help" people, we need to point out that this was a large part of what led us to the meltdowns of 2008 ...

[Robatoy]

A well-spent 26 minutes. Thanks for the link.

[Han]

Tim Daneliuk wrote in news:n5a2r5-7rr.ln1 @ozzie.tundraware.com:

Limiting government is easy to legislate. Individual responsibility is an ideal, almost impossile to legislate. Self-sufficiency is a dream, possibly attainable by erecting HUGE trade barriers, but who is going to profit from limited resources after the barriers are erected, pray answer?

[Han]

Han wrote in news:Xns9B269B2BB8027ikkezelf@

199.45.49.11:

................................................impossible to legislate, let alone enforce.

[Frank Boettcher]

Are you kidding me? The government is going to limit itself? Pray tell when in history that ever happened.

In someone's post to this thread it was suggested that individual responsibility can be legislated? More government action to legislate individual reponsibility? ROTFLOL.

When there is no handout you only have two choices. Be responsible for you and yours or perish. Most will choose the former.

I think he is referring to individual self sufficiency not trade issues

[Tim Daneliuk]

And is corrupted almost immediately by the mooching sheeple.

But can be strongly "encouraged" by holding people accountable when they harm another person. "Harm" here pretty much always comes in some form of fraud, force, or threat.

I wrote this imprecisely. By "self sufficiency", I don't mean independent of each other or our trading partners. Successful people are always voluntarily interdependent. What I meant was "not dependent on the involuntary confiscations of our fellow citizens' assets".

IOW - Root, Hog, Or Die...

[Han]

Frank Boettcher wrote in news: [e-mail]:

It has happened. See the repeal or limitation of income taxes. You or Tim D will just have to set up the constitutional amendments necessary. How else are you going to "return to limited government" as you said we need?

Responsibility alo includes not screwing others. That should be legislated, or are you going on the honor sysem? ROTFLMAO, indeed.

I don't understand. Aren't we all dependent on many functions of government? Defense, trade, transportation, healthcare? Or do you want to be your own doctor?

If you mean that we should earn our way, I agree. However, some people haven't gotten the same chances that others could profit from. For instance, my parents paid for my education, and that (plus a lot of luck) is what got me where my family and I are today. Does that mean that someone who didn't have the luck of having parents (and grandparents etc) like mine should rot away like garbage?

[Tim Daneliuk]

Defense is the only legitimate government function on your list. (Because it is essential to the preservation of liberty.) Trade, transportation and healthcare are properly private sector activities in which the government has no business. (Because none of them are issues of liberty.)

I wasn't born with the physical skills to make $20M per year playing the NBA. Does that mean I should be excluded from being a point guard for the Chicago Bulls? I am too old to make any significant breakthroughs in theoretical physics. Does that mean I should be excluded from a full professorship in the Princeton physics department? I cannot run a marathon in 2 hrs. Does that mean that I can't be on the Olympic long distance team?

In a free society, inequitable circumstances of birth and family are almost entirely eradicated within a generation or two *so long as the individuals in question work very hard to make inter-generational progress*. The purpose of liberty is not to ensure equivalent outcomes for all beneficiaries - this is a fantasy peddled by political vermin like Comrade Obama. The purpose of liberty is to provide an environment where everyone can try their best to succeed without living in fear of fraud, threat, or force.

In a society that promotes individual liberty, the only way people "rot away" is when they don't try very hard. Well, there is one other circumstance: When they are profoundly physically or mentally handicapped. In this latter case, there is more than enough private charity to help. But able bodied/minded people ought to be expected to be responsible for their own economic and social progress and not given the hammer of government to force their neighbors to pay up.

[Frank Boettcher]

Didn't limit government. It provided a stronger economy and more tax reciepts for the government to spend. If anything it expanded government.

Don't need amendments, Constitution OK as is. Just abide by it.

The government should provide for my defense from those who would do me harm, both foreign and domestic.

No, I want to choose my doctors.

Well good for you, I don't hold it against you, in fact I'm happy for your good fortune. I didn't have that luxury, had to work my way through, please don't hold that against me. I don't think I'm rotting away like garbage.

Frank

[Nova]

Do you really feel that if your parents had not paid for your education you would be rotting away like garbage?

[Han]

Nova wrote in news:BhzDk.392$kI6.128 @nwrddc01.gnilink.net:

I am pretty sure that if not for the "luck" I have ad, my circumstances would be different. Consider that admision of lazyness.

[Mark & Juanita]

... snip

Perhaps you can help me out here, I'm not yet fully up on my Book of Obama: Does all of the above happen before or after he lowers the ocean levels and heals the sick?

If, by some chance our country is punished with an Obama presidency, it is more likely we will finally experience that Jimmy Carter second term that we missed in the 80's.

[Mike Marlow]

Too many of us did not receive an education funded by our parents, to accept Han's statement above. The key point that Han seems to have missed out on by receiving the gift that he did, is the merit and the benefits of hard work to achieve one's goals.