O.K., here we go again. (*WINK*)
As I stumble upon news, opinion, studies, and such that I feel others should be exposed to I'll post the links within the Comment Section of this thread.
Enjoy! Feel free to add your own links of interest.
Subscribe to:
Post Comments (Atom)
9 comments:
http://online.wsj.com/article/SB122809320261867867.html
Excerpts...
-- ...the 12 "foreign," or so-called transplant, producers making cars across America's South and Midwest. Toyota, BMW, Kia and others now make 54% of the cars Americans buy. The internationals also employ some 113,000 Americans, compared with 239,000 at U.S.-owned carmakers, and several times that number indirectly....the transplants operate under conditions imposed by the free market. Detroit lives on Fantasy Island. Consider labor costs. Take-home wages at the U.S. car makers average $28.42 an hour, according to the Center for Automotive Research. That's on par with $26 at Toyota, $24 at Honda and $21 at Hyundai. But include benefits, and the picture changes. Hourly labor costs are $44.20 on average for the non-Detroit producers, in line with most manufacturing jobs, but are $73.21 for Detroit....for every UAW member working at a U.S. car maker today, three retirees collect benefits; at GM, the ratio is 4.6 to one....Since 1992, the Big Three's labor force declined 4.5% on average every year; the international grew 4.3%. According to the Center for Automotive Research, for every job created by the transplant producers, Detroit shed 6.1 jobs in the U.S., 2.8 of them in Michigan. --
BILL
http://www.ibdeditorials.com/IBDArticles.aspx?id=312766781716725
Excerpts...
-- The Community Reinvestment Act is to blame for the financial crisis, but it so powerfully serves Democrats' interests that they'll do anything to protect it — including revising history. The CRA coerces banks into making loans based on political correctness, and little else, to people who can't afford them. Enforced like never before by the Clinton administration, the regulation destroyed credit standards across the mortgage industry, created the subprime market, and caused the housing bubble that has now burst and left us with the worst housing and banking crises since the Great Depression. The CRA should be abolished, along with the government-sponsored enterprises that fueled the secondary market for subprimes — under pressure from Clinton, who ordered HUD to set quotas for "affirmative action" lending at Fannie Mae and Freddie Mac. But powerful Democrats in Washington want to protect the act — along with Fannie and Freddie — and spin the subprime scandal as the result of too little regulation, not too much....Already the debacle has erased $13 trillion in wealth, while putting taxpayers on the hook for up to $8 trillion in bailouts....Clinton beefed up the CRA and used it to force banks to subsidize poor communities with close to $1 trillion in high-risk loans and other commitments that flouted underwriting rules....Fact: The 1977 law was only lightly enforced until Clinton added teeth to it in 1994 and launched an anti-redlining campaign against banks, led by Ludwig, Housing Secretary Henry Cisneros (and later Andrew Cuomo) and Attorney General Janet Reno that lasted into this decade. Minority homeownership rates, which had been flat, began a steep rise in 1995, and home prices soon followed, stoked by easier lending. Numerous bank officials complain that they still feel pressured by CRA regulators to make inner-city loans they know are at great risk of defaulting....Fact: Nearly 4 in 10 subprime loans between 2004 and 2007 were made by CRA-covered banks such as Washington Mutual and IndyMac. And that doesn't include loans made by subprime lenders owned by banks, which were in effect covered by the CRA. Last year, when the bubble burst, bank subprime loans totaled $142 billion, dwarfing those made by lenders. What's more, the biggest subprime lender, Countrywide, while not subject to the law, still came under federal pressure to make risky loans in minority communities. Clinton created a separate department at HUD to police "fair lending" at Fannie and Freddie and also at lenders like Countrywide, which became Fannie's biggest client. In 1994, Countrywide became the nation's first mortgage lender to sign with HUD a "Declaration of Fair Lending Principles and Practices." As a result, Countrywide made more loans to minorities than any other lender — and not surprisingly, was one of the first lenders swamped by loan defaults. Other lenders felt the heat from Reno's Justice Department, which prosecuted them for failing to operate enough branches in black neighborhoods. Reno put the entire banking industry on notice about the CRA and her enforcement program....Fact: Subprime loans were the vehicle banks used to satisfy CRA compliance, and Clinton and his regulators encouraged their use. Before Clinton took office, subprimes were virtually unheard of. By the time he left, they made up more than 9% of the market for mortgage originations. Today they're 20%. "It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of the CRA," ex-Fed chief Alan Greenspan said in recent testimony on the roots of the crisis. Clinton pushed banks to grant mortgages to minorities with poor credit by using "flexible" underwriting standards — or risk being branded racist. Rules were weakened to the point where welfare and unemployment checks were accepted as qualifying income....Fact: Clinton's regulatory policies led to the creation of this new risk on Wall Street. His CRA amendments created the subprime market, and only after he pressured Fannie and Freddie to socialize the risk and guarantee the profit from the subprime loans did Wall Street get involved in a big way. The exotic securitizations that have gotten so much of the blame were a symptom, not the cause, of the crisis. The architects of the crisis want to divert attention from their own culpability by blaming the markets rather than their own regulations mandating that banks make high-risk loans based on race. In fact, regulations had almost everything to do with this mess. And instead of strengthening them to atone for the alleged "sins of capitalism," we should be abolishing them. Two bills in the House would be a good place to start. HR 7264, which has nine co-sponsors, would repeal the CRA. And HR 7094, with 17 co-sponsors, would dissolve Fannie Mae and Freddie Mac. During the last severe slump, President Reagan deregulated the economy, saying: "Government is not the solution to the problem; government is the problem." He's as right today as he was then. --
* I have a few comments/questions/caveats concerning the above linked editorial and since the excerpts I've taken from said editorial are rather lengthy, I'll add my two cents worth in a follow-up post.
BILL
re: IBD editorial excerpted in my previous post.
1) There's plenty of blame to go around. Although I agree it was MAINLY Democrats who pushed for irresponsible lending based upon ideology rather than economic reality, the Dems weren't alone. Indeed, let's not forget that the Republicans were in control of BOTH Houses of Congress for most the period between January 1995 thru December 2006 with a Republican president since January 2001. (*SHRUG*)
2) The editorial gives the impression that inner city loans to black and minorities caused the bubble. I don't know. I'd really like to see how the figures break down according to race/ethnicity. By direct observation I know that there are plenty of whites - middle class and even upper middle class suburbanites - who got themselves (and thus the rest of us taxpayers who are on the hook for these "bailouts") screwed up via borrowing far more than was prudent and depending - like idiots - on the hope that the housing market would always go up, never go down. (*FROWN*)
Bottom line, forget class and color; what we need to do as a society is go back to the old rules of thumb on housing - 20% down and monthly mortgage/taxes not exceeding a quarter (maybe a third...) of family income for the average month.
The same formula should apply to car purchases - 20% down!
People need to live within their means. Period.
BILL
http://www.ibdeditorials.com/IBDArticles.aspx?id=312760807933122
Excerpts...
-- Intelligent, informed people differ about why the Depression lasted so long. But people whose recipe for recovery today is another New Deal should remember that America's biggest industrial collapse occurred in 1937, eight years after the 1929 stock market crash and nearly five years into the New Deal. In 1939, after a decade of frantic federal spending...unemployment was 17.2%. "I say after eight years of this administration we have just as much unemployment as when we started," lamented Henry Morgenthau, FDR's Treasury secretary. Unemployment declined when America began selling materials to nations engaged in a war America would soon join. In a 2004 paper, Harold L. Cole and Lee E. Ohanian, both of UCLA, and the Federal Reserve Bank of Minneapolis argued that the Depression would have ended in 1936, rather than in 1943, were it not for policies that magnified the power of labor and encouraged the cartelization of industries. --
* As I did with the prior IBD editorial, I question this op-ed's (George Wills') emphasis - the emphasis in particular on apparently "blaming" unions for lengthening the Great Depression.
I'm sure in certain instances they did... but I'm not so sure that on the whole they did. I admit - I don't have the facts at my fingertips; I'd like to see the numbers that back this worldview up. (*SHRUG*)
In any case, the thrust of the op-ed is I fear on target. Throwing good money after bad along with increased government meddling in free markets is only going to make things worse.
On fact that is undeniable is that FDR's "New Deal" policies didn't get America out of the Great Depression - WW-2 did. And I'm not interested in a WW-3 to "help" get our nation out of this jam. (*FROWN*)
BILL
http://article.nationalreview.com/?q=YzBjMmM3MmJlZGUzOWY1YWJiOTc4NGQzNjkzMjY0NjA=
Excerpting...
-- Today’s gargantuan mess started largely because Washington used Fannie Mae and Freddie Mac to promote affordable housing....Well, it worked. America is awash in affordable housing. Home prices in 20 major cities plunged 16.6 percent last quarter. That’s bad news if you’re selling, but a bonanza for those seeking affordable housing. So, rather than declare “mission accomplished,” Uncle Sam has cannon-balled into the mortgage markets to jack up housing prices. --
* EXACTLY!!! For those with savings who are gainfully employed, fairly confident of their ability to continue earning near, at, or even beyond their current income in the near/mid-term, the bursting of the housing bubble was a Godsend!
-- The Troubled Assets Relief Program then endeavored to rescue teetering banks. But to do so, Treasury dragooned prosperous banks into accepting bailout money so their needy competitors would not be stigmatized. This is like a supermarket whose affluent shoppers must accept and spend Food Stamps so low-income customers with Food Stamps don’t appear poor at the checkout stand. "I think it’s absurd,” says the director of one small mid-Atlantic financial house. “We are a profitable bank. We have zero non-performing loans. We have more capital than we are required to have. We arguably are overcapitalized from an economic and a business point of view. Our only constraint on lending is the demand of credit-worthy borrowers. Our lenders are on the street every day, as they have been throughout this financial crisis, looking to make new loans. Despite that, we are being offered this relatively low-cost capital in the form of this preferred stock to be bought by the federal government.” This bank officer estimates that the Fed is ready to hand his hale and hearty institution between $4 million and $5 million. This banker notes “the ironic escalation of the interest rate.” The terms of the loan, he marvels, are “five years at 5 percent, then it goes to 9 percent.” In other words, Washington is giving banks adjustable-rate loans. This perfectly parallels the adjustable-rate mortgages that steered us into this ravine in the first place. --
* Folks. This is insanity! The inmates are (and have been) running the asylum.
-- Bailout season began with G. W. Bush, Federal Reserve Chairman Ben Bernanke, and Treasury Secretary Henry Paulson — the Moe, Larry, and Curly of fiscal policy — insisting that America needed a $700 billion bailout as urgently as a rattlesnake-bite victim requires anti-venom. “Americans’ personal savings are threatened,” Paulson panted in September. “The ability of consumers and businesses to borrow and finance spending, investment, and job creation has been disrupted.” But then Comrade Bush created the world’s biggest starting bonus. He decided to leave half the bailout budget in the Oval Office desk for Barack Obama to allocate. (This bizarre act of generosity with other people’s money invalidates the notion that Bush failed because of a “my way or the highway” attitude. Bush flopped because he was so busy spooning with liberal Democrats that he left his free-market allies shivering on the kitchen floor.) Assuming Obama spends that $350 billion on inauguration day, three months and 17 days will have passed since the bailout’s October 3 enactment. So, at least half the desperately needed bailout proved unnecessary. “Never mind!”
* Yep. (*SIGH*)
-- As president, neither Al Gore nor John Kerry could have gotten away with such aggressively socialist policies as the allegedly “conservative Republican” Bush administration’s dizzying parade of massive outlays, fiscal injections, equity purchases, mandatory subsidies, and even nationalizations. --
* I don't have a crystal ball, but Murdock (the author of this piece) has a point. How indeed could things have been any worse had Kerry been elected president in 2004?
-- As for Barack Obama, he envisions yet another stimulus package worth perhaps $700 billion. His senior advisor, Austan Goolsbee, told Face the Nation on November 23: “It’s going to be a number big enough that when they spell it out, it looks like ‘Oooooooooooh!’ with that many zeroes on it.” --
* Yep. Out of the frying pan, into the fire. God help this once great nation.
BILL
http://www.breitbart.com/article.php?id=081201191102.3uw0pjyd&show_article=1
-- US manufacturing slumped to a 26-year low in November, highlighting the abrupt downturn in the world's biggest economy, a survey showed Monday. The Institute of Supply Management said its manufacturing index slumped 2.7 points to 36.2 percent, far below the 50 percent level that separates expansion and contraction. The level was the lowest since May 1982. New orders fell even further to a level of 27.9 percent, suggesting the worst may not be over yet for the sector. "When comparing November to October, the (index) indicates a continuing rapid rate of contraction in manufacturing," said ISM survey chief Norbert Ore. "New orders have contracted for 12 consecutive months, and are at the lowest level since June 1980 when the index registered 24.2 percent." --
Listen. I wish it were otherwise. It's not. It is what it is.
BILL
http://www.boston.com/news/politics/2008/articles/2008/12/02/big_business_transfers_its_loyalty_money_to_the_democrats/
Ahh... here's one for the Left -
"Big Business transfers its loyalty, money to the Democrats"
(*SNORT*) Duh. (*CHUCKLE*)
Seriously. I've always gotten a kick out of the Kool-Aid contingent of the Left who actually believe that the Democratic Party is the Party of the... err... "Working Man."
(*SMIRK*)
"...the Obama administration's promise of swift government action to protect companies and workers is likely to achieve one result that has been unthinkable for 75 years: It will make the Democrats the party of Big Business. The two major political parties have been shifting their coalitions for a while now, as higher-income Americans move closer to the Democrats..."
"Protect" companies and workers, huh? (*SMIRK*) So now because it's the Democrats doing it corporate "welfare" is out - corporate "protection" is the word of the day.
(*SNORT*) (*SMIRK*)
"In the recent presidential campaign, the financial sector, long the biggest backer of the Republicans, actually gave more money to the Democrats, by roughly $65 million to $59 million, according to the Center for Responsive Politics."
But of course because Democrats are now the major recipients I suppose words such as "bribery" and "influence peddling" are going to be out - perhaps liberals will start speaking of "synergy" and "partnership" instead. (*HUMORLESS CHUCKLE*)
"...lawyers and lobbyists, a traditionally reliable Democratic constituency, backed the Democratic presidential candidates over Republicans by a whopping $68 million to $21 million."
Yet another NON surprise. (*SMIRK*)
"But if the financial sector split the difference between the two parties in 2008, it will probably skew toward the Democrats in succeeding elections, as Obama becomes the chief advocate of the Wall Street bailout."
Ahh, yes... the Democrats supporting Wall Street bailouts. So much for the Party of the Working Man.
"Even though the recent $700 billion bailout package was orchestrated by a Republican president, the GOP, as the party in exile, will almost certainly coalesce around opposition to it."
LET'S HOPE SO...!!!
It's going to be an interesting four years.
BILL
* BTW, if the link doesn't work...
Boston.com
December 2, 2008
Peter Canellos
canellos@globe.com
File Under: The Loyal Opposition
http://online.wsj.com/article/SB122818170073571049.html
Excerpts from a joint op-ed written by Republican Governor's Rick Perry of Texas and Mark Sanford of South Carolina -
-- ...we've grown increasingly concerned over the past weeks as Washington has thrown bailout after bailout at the national economy with little to show for it....the federal government is not only burying future generations under mountains of debt. It is also taking our country in a very dangerous direction - toward a "bailout mentality" where we look to government rather than ourselves for solutions. We're asking other governors from both sides of the political aisle to join with us in opposing further federal bailout intervention for three reasons. First, we're crossing the Rubicon with regard to debt. One fact that's been continually glossed over in the bailout debate is that Washington doesn't have money in hand for any of these proposals. Every penny would be borrowed. Estimates for what the government is willing to spend on bailouts and stimulus efforts for this year reach as much as $7.7 trillion according to Bloomberg.com - a full half of the United States' yearly economic output....That trillion-dollar figure is the tip of the iceberg when it comes to checks written by the federal government that it can't cash. Former U.S. Comptroller General David Walker puts our nation's total debt and unpaid promises, like Social Security, at roughly $52 trillion....Borrowing money to "solve" a problem created by too much debt seems odd. And as fiscally conservative Republicans, we take no pleasure in pointing out that many in our own party have been just as complicit in running up the tab as those on the political left. Second, the bailout mentality threatens Americans' sense of personal responsibility. In a free-market system, competition and one's own personal stake motivate people to do their best. In this process, the winners create wealth, jobs and new investment, while others go back to the drawing board better prepared to try again. To an unprecedented degree, government is currently picking winners and losers in the private marketplace, and throwing good money after bad. A prudent investor takes money from low-yield investments and puts them in those that yield better returns. Recent government intervention is doing the opposite - taking capital generated from productive activities and throwing it at enterprises that in many cases need to reorganize their business model....Third, we'd ask the federal government to stop believing it has all the answers....In the rush to do "something" to help, federal leaders would be wise to take a line from the Hippocratic Oath, and pledge to do no (more) harm to our country's finances. We can weather this storm if we commit to fiscal prudence and hold true to the values of individual freedom and responsibility that made our nation great. --
AMEN!!! Jeez! These two guys sound like... err... me! (*GRIN*)
BILL
File Under: Common Sense Isn't All That Common
http://www.iht.com/articles/2008/12/02/business/02tarp.php
"U.S. Bailout Monitor Sees Lack of a Coherent Plan"
Excerpting...
-- The head of a new congressional panel set up to monitor the gigantic U.S. government bailout says the government still does not seem to have a coherent strategy for easing the financial crisis, despite the billions it has already spent in that effort. --
-- Elizabeth Warren, the chairwoman of the oversight panel, said in an interview Monday that the government instead seemed to be lurching from one tactic to the next without clarifying how each step fits into an overall plan. --
-- "You can't just say, 'Credit isn't moving through the system,'" she said in her first public comments since being named to the panel. "You have to ask why." If the answer is that banks do not have money to lend, it would make sense to push capital into their hands, as the Treasury has been doing over the last two months, she continued. But if the answer is that their potential borrowers are getting less creditworthy with each passing day, "pouring money into banks isn't going to fix that problem," she said. --
Any questions...???
(*SIGH*)
BILL
Post a Comment