The crisis on Wall Street - Is all in your head?
Reaganomics started it back in the 1980s with Phil Gramm and John McCain leading the pack - end government regulation to encourage a free market, reduce taxes to the movers and shakers, and wealth would trickle down to all of us. We've had Republican control of the Whitehouse or Congress or both for 26 of the past 28 years and these policies have held.
Now we have news of a major financial disaster that Alan Greenspan called the worst he's seen.
Phill Gramm said that the current crisis is all in our heads - we are a nation of whiners http://www.youtube.com/watch?v=1mHsuL6FfY4
McCain temporarily distanced himself, but now Gramm is back full force as McCain's economic advisor. Can we expect more of the same failed economic policies that got us into this mess? where does McCain really stand on the economy? Do his recent statements like this one at Townhall.com point to him abandoning the policies he's adhered to for decades and advocating regulation?
"Our economy, I believe, still, the fundamentals of our economy are strong, but these are very, very difficult times, so I promise you: We will never put America in this position again. We will clean up Wall Street," McCain said."
What do you think? How's this all working out for you so far? Do you believe the economy is strong?
Original Post by enchantingimage:
It makes them conditioned to think or live in a certain way. That's in no way a free thinker. . . Or intelligent. It's a dabatable version of stupid. Living beyond your means because you've been conditioned to isn't linked to intelligence. It can be called any number of things. In this case it was noted as stupid in their view.
I'd call it ignorant as well to listen to big shots saying "The economy is strong... " while they continue to splurge on things unaffordable to their income because they're drones "Keeping up with the Joneses."
this is just another way of saying that other people are stupid (but not you, right?). we're all programmed (conditioned, if you prefer) by our experiences. we don't just pull knowledge from the ether, you know.
I know this may be a little off topic, but how are money markets affected by the general stock market? I have some money in one of those (along with personal investments and company 403b) rather than a savings to get a little more interest on it, but was just curious how the rate of return on those are affected by the stock market and such. Do money markets ever actually loose money?
Any insight would be greatly appreciated :)
I don't think that people wanting a better standard of life for themselves and their family is stupid, at the time they take on the debt they can afford to pay it, not everyone pays attention to the markets. On the same token if they were stupid for taking the debt on in the first place then the lenders were as stupid because it is peoples inability to now pay that debt because of the economic down turn that has caused them to go bust.
Andie-joe, if you're making a gamble (that the markets will rise, that your income will rise, that inflation will go down, that interest rates will hold) then it's best to be informed on those topics.
In other words, if you're taking out massive amounts of debt and planning to pay it off when your wages go up, then you better know for a fact your wages will go up.
Otherwise, you are being STUPID.
If the lenders didn't foresee this so how on earth is the ordinary person on the street supposed to. The lenders are not innocent in all this, they encouraged people to take the chance.
So what you are saying is people shouldn't buy houses unless they are millionaires and can pay for the house cash, because none of us can predict the future, therefore we have no way of guaranteeing our future income, you could get ill, lose your job and so on.
We should all just stay stagnant in our lives. Now that is stupid!
Random thoughts:
When I sold my house in 1993, put the money into savings and moved into an apartment, I was bombarded with offers from real estate "experts" to buy another house. They tried to sell me on a low interest balloon mortgage and did their best to convince me that a house was the best investment I could make. I'm so glad I didn't listen. Instead of saving money I would have spent it all keeping up a property I could barely afford.
A lot of people weren't so lucky. They listened to the sales pitch and during the next decade bought mini mansions. Huge houses were going up all over the place. I'd drive past and wonder how on earth those people found the money. Now I know - they were in hock up to their ears and are now scrambling to adjust. The giant, 5,000 sq ft houses are on the market and nobody is buying.
I don't think it's altogether their fault. The larger part of the blame goes to financial institutions who wrote risky loans to people they knew would have to struggle to pay them.
I feel that this started way before the Bush policy of encouraging this kind of investment. It goes back to the Reagan deregulation which was pushed through by Phil Gramm for one, McCain's trusted economic advisor. McCain was very much in favor of deregulation. It allowed the bandits to take over.
There is no excuse for people living beyond their means. Blame should be pointed in the mirror before blaming mortgage holders. It's their choice in life. Their income isn't a secret from them or a mystery. They're accountable for their situations in life. ( They created it. )
It can be called stupid by opinion because it sure doesn't mark intelligence. Standards aren't measured above your income... your goals are!
to whomever said something about the markets closing early... they most certainly did not. it is a very rare thing for the markets to be closed early, something about capitalism and free markets and other rubbish that bases the economy.
500 point drop is significant, 4.4%. Add that to the fact that since approx June 23, the market has dropped from 13000 on May 19 to under 11000 today, with the market over 14000 just a few months before that.
Why cant more people listen to GMA (ugh) and hold on to their money and leave the market alone when they dont know what they are doing? Getting scared and selling just screws the rest of us. Let it ride.
And to heather (mom's retirement) at Merrill Lynch. Being bought out is not the worst thing that can happen (Just ask Lehman Bros), and shouldn't really affect her accounts-- at least not any more than the rest of us are getting screwed by it.
It is indeed each person's responsibility to live within their own means. I'm not excusing everyone and putting the blame soley on the lending institutions. However the lending institutions and the policy makers are partly to blame.
Some individual people are stupid. Some are just uneducated. There were a lot of predatory lenders that preyed on the uneducated and sold them a line of bull about how easy it would be to refinance in a couple of years. They took vulnerable people who were looking for their first homes and convinced them they could afford it. Many could at first. Then the upkeep happened.
Most lenders have policies about your income to spending ratio. So people aren't given loans they can't pay back. Some people try to bamboozle the system to get more than they can afford. ( Which is stupid. )
Now strangely enough I agree with enchantingimage (there is a first time for everything). No government bailout for either the errant homeowner or the errant mortgage company-- there are legal remedies for the truly mislead homeowner. I do think that praying upon stupidity/ignorance should be actionable, and perhaps is, via the atty general of each state.
Additionally, though, I wonder if the state of ignorance is enough that some people dont understand that there are choices. Or maybe they are just willfully blind.
I also think that it obfuscates the true issues when we focus on "keeping up with the Joneses" as the cause of our economic woes. It is misplaced blame, I think, and keeps us distracted from the economic policies that supported the "mortgage bubble." Being a debt dependent country is what fueled our prosperity-- perhaps our downfall as well. What matters more now, however, is shoring up the things that can keep us in a defensive position within the world market, which means capitalizing on intellectual capital and allowing freer movement into our country rather than exporting brain power. It means finding a way to take the uneducated manufacturing laborer in Michigan, Indiana, and Ohio and find him a job that which he can make enough money to stay off the dole. It probably means more technical schools, diverting money from postgraduate education to vocational schooling, and capping tuition levels, while allocating more resources to sustainable technology (both for jobs and oil independence).
Which candidate is going to do all that? And get congress to pass it?
The institutions are absolutely also to blame, I didn't mean to exclude them. The problem I have is that these institutions are now being bailed out. They wrote risky loans, it didn't pay off, they should lose. That's business. But on the same note, you buy a house you can't afford on a variable rate...because you listen to some slick dude telling you the market is going to stay low...well, now it's your fault and I disagree with the mortage bailout to homeowners as well.
The same thing is true for credit cards. Yes, I accumulated alot of credit card debt buying things I couldn't afford...I should be held accountable. But in the same respect, I receive about 7-9 credit card offers a week...my wife doesn't have a job and gets even more than me...a friend of mine declared bankruptcy and received credit card offers within 3 weeks of filing. So do I feel bad when a credit card company gets screwed out of that money, not really...shouldn't have given that guy a card.
When I bought my first house, I figured I could afford between $75,000 and $125,000. The bank I went with offered me a loan for up to $250,000. I could never have afforded that payment...but could have gotten the loan. I also got all kinds of offers for "interest only" refinancing and other types of gimmic loans. I'm not an economist...but a little common sense can get ya a long way and I chose an affordable house, with an affordable payment, with an affordable interest rate.
I see people take out 2nd and 3rd mortages so they can afford a high def TV or buy new furniture. That's fine...but when something happens and you lose your house because you lost your job and now you have a big mortage... I guess taxpayers should bail you out? Will taxpayers bail me out of credit card debt? I mean, if they'll pay your mortage because you needed a new TV...why can't they pay my credit card because I needed a new TV?
And it's not like I think people should just be thrown out on the street. People have options like bankruptcy protection or they can just walk away from the house and move into an apartment. Walking away hurts your neighbors, but unless they are going to pay your mortage note, sometimes you got no choice.
Original Post by drea99:
capitalizing on intellectual capital and allowing freer movement into our country rather than exporting brain power. It means finding a way to take the uneducated manufacturing laborer in Michigan, Indiana, and Ohio and find him a job that which he can make enough money to stay off the dole. It probably means more technical schools, diverting money from postgraduate education to vocational schooling, and capping tuition levels, while allocating more resources to sustainable technology (both for jobs and oil independence).
Which candidate is going to do all that? And get congress to pass it?
- The first step is to award companies for employing Americans and harm companies that export jobs overseas.
- The second step is to ensure that free trade is "fair" trade. If Americans are hurt by trade agreements, those agreements should be canceled or include compensation.
- Immigration (except for intellectual needs) should be capped based on the unemployment rate in the country. If we don't need workers, then keep them in your country until they are needed. And do whatever it takes to stop it. Start with massive penalties for companies and people taht hire people illegally and maybe include gun towers at the border. I know that sounds cruel, but simply asking them not to come over and then providing them water bottles along the trail probably isn't a very good deterrant.
- The goverment must agree within one year as to which sources of alternative energy will be pursued and the begin work on that infrastructure.
- Mandate that no new gasoline powered car be sold after 2018 and set a graduated time table to convert portions of energy to wind or solar.
- Universal Healthcare
Closing free trade will create jobs in this country...who knows, maybe we'll make our own shirts some day. Companies will not outsource or close factories for fear of losing the US market. Clsoing the borders ensures a fair wage as the lowest acceptable wage will not be falsely lowered by immigrants that will work for next to nothing. Things may get more expensive as they are made by higher waged workers...but things will even out over time. And by having universal health care, companies will be more competitive globally as they won't be paying high premiums for each of their workers, the workers probably will see a slight increase in salary, and the overall health care costs will be lowered as costs are consolidated and people seek care earlier when health care is most affordable. The alternative energy sector will be successful because they won't need to fear the uncertainty of whether or not people will actually buy the product. And by all companies being forced to act by the same date, there will be no competitive issues of going to alternative energy too soon vs your competition.
Or...we could just accept that the only industry left in this country is fast food and if we want a different job we should learn Chinese or Indian. The middle class will disappear and we'll simplly be a form of Russia with better beaches and less attractive prostitutes. But that's just me thinking outloud...I'm sure it's all impossible for some reason or another.
Where I disagree is the immigration policies as to Mexico. A good portion of our economy depends on migrant workers and, lets face it, underpaid illegal immigrants. Despite the fact that I despise our current leadership, I sort of think the guest worker idea, if remotely workable, would be something in our best interest. I dont think closing the border to Mexico will be beneficial in either the short or the long run.
My thought is maintaining american smarts on american soil with american companies. Pull foreign smarts by making those visas easier to get and restrict sponsorship visas based on familial or hometown relationships. up the quantity of j-1 visas but place limits on bringing families/using state resources (a lot of Asian governments toss a lot of money at our universities).
edit: left out a word.
When an illegal uses a fake or stolen social security number to get a job, there is an SS deduction from his/her paycheck just like the rest of us. The difference is, they can never claim benefits. In other words, the illegals are propping up SS. Interesting, but I can't find a link to back this up.
edited to add: Found One!!!
(snip)
As the debate over Social Security heats up, the estimated seven million or so illegal immigrant workers in the United States are now providing the system with a subsidy of as much as $7 billion a year.
(snip)
excellent point Claire... I believe there are some good statistics on the "cost" of each illegal as well, that they are less likely to use medical and welfare resources than other immigrants or impoverished americans. I am too lazy to look.... maybe someone else?
The problem with that logic is it completely offsets supply and demand.
For example...a farmer on the border says he needs immigrant workers because he can't afford to pay american wages. He pays them in cash, no social security. Now, an American WILL do that job...just not for .70 an hour. Normally, the wage rate is set by the minimum amount a population is willing to work in order to get enough people to do a job. If an employer has trouble getting workers, he needs to raise the wage to a point where workers will come to him/her. This in turn raises prices...but to a level where they should be based on supply and demand, the basis for a capitalist society. I find it funny that Republicans use supply and demand to make an arguement for high oil proces, but then disregard it when it comes to labor.
But there are much higher costs than the opportunity lost to Americans that could pick fruit. Many of these illegal aliens make so little that they can't survive, have no health care, and many find their way to cities where they learn to manipulate our system to get public assistance. Many also learn that the life of crimce pays more than a farmer, by alot! Jails and prisons up and down the coast of California and throughout Texas are filled with young men and women that decided making .70/hour and living like dogs is no way to live at all.
I knew of a family of illegals, brought north with the promise of a good life, an apartment, and a car. They ended up workingthe night shift at a target cleaning the floors...illegally through a cleaning service. 4 families lived in a 4-bedroom apartment and they all shared a minivan. They could not affford health care, medicine, diapers, formula, etc... Maybe they didn't have it much better where they started, but they didn't need to look out their window and see all of the happy, fed, healthy families living nearby that had everything while they lived in the shadows as a sub-class.
You're not doing them any favors nor are you making their country a better place to live...because you are taking their energetic citizens out of a bad environment rather than forcing them to make their own country a better place. I embrace the fact that we are a country of LEGAL immigrants...not that we are a country of slavery and indentured servants who would exploit our neighbors for cheap labor and larger profits. It used to be just a border issue...but now illegal aliens are painters and part of most construction crews and landscaping crews. They've found ways to get housekeeping jobs in hotels and work twice the hours an American teennager would at McDonalds but for half the pay.
It's easy to say they are "doing jobs Americans won't do" when you aren't offering those jobs to Americans at a reasonable wage. If illegal aliens could run for office and take an elected official's job...perhaps more urgency on the issue would be seen.
With Groups - you're not alone.Get the experience and support
of others who succeeded.
