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I do not know the accuracy of the figures. But, the author pretty much makes his political colors known in the end....
It is too easy to be critical now after the fact. We had a choice of not growing government debt but let the banks and the rest of main street fail with it. Far more people out of work, much deeper hole to climb. I can almost hear those being critical of debt complain why government not doing anything then.
The day Paulson and Bernake hit the streets with news that the sky was falling, I knew nothing about the best steps but was able to predict the future. I told my husband and friends - Just watch, the road not taken will be proved correct no matter what the outcome. If nothing was done by the government (they now say) we would have faired better without any debt. If fork A or C or D, E, F had been taken instead of B (presumed to be the worse) we would be fully employed and booming. The data point not taken which lies at the end of the road of the fork not taken is always the most certain measurement.
Again, I see after everything has played out, people are coming and saying what we should have done. This is BS! Economics looked a bunch of alternate schemes then (from both parties and came to conclusion what it is). What is being sold as alternative schemes now was not like to succeed but that does not stop people speculating that they would have been a more potent remedy.
This is just like treating cancer with homeopathic means. 99% does not work but there is a great industry that makes money from selling ineffective products.
I don't believe that the article suggested alternative schemes. It merely portrayed the nature of some of the deals that went down. So what you are saying is that, for instance, the two women portrayed in the article performed a legitimate service and they deserved the Tarp funds they got from the government and the 'deal' under which they received them. We, the taxpayers of the US, needed that event to happen to save our financial system. We also needed all of those funds going to off-shore bank accounts to save the same financial system. From my point of view, none of that was necessary, they should have been allowed to fail and it demonstrates the endless circle of power, money and politics i.e. those that have can pay whomever to get even more at the expense of everyone else. That's where your BS lies.
My radar picks up when I see numbers tossed around without citations, and terms used without definitions.
For example, on p.11, there is an assertion that 5% of wealthy Americans pay 58%+ of total US taxes collected. Fuzzy terms: wealthy (income? net worth? some blend?); US taxes (paid to the US government? paid to all entities, city, state, federal in the US?). No matter, without definitions, I can choose the interpretation and the citation.
http://www.ctj.org/pdf/taxday2011.pdf (Citizens for Tax Justice, "America's Tax System is Not as Progressive as You Think", April 15, 2011). Table 1 (where the notes define the terms) shows that the top 5% of taxpayers pay just 37.1% of taxes (21.5% + 15.6%). And to preempt the response that not everyone pays taxes, we have the paper noting: "All Americans pay taxes. ... State sales taxes affect everyone who shops ...".
On p. 4, we're told that "the response to EVERY financial crisis has been to cut interest rates". I'm sure that will come as a surprise to Paul Volker, who responded to stagflation in the late 70s by raising interest rates. One can make whatever point one wants by implicitly tailoring terms (like "financial crisis") to support one's conclusions.
The globe is more connected and with more connected there are now new inter-dependencies. A (a US) entity issues debt which is bought by B (an international entity) and C a US entity (say an insurance company) has written a insurance policy for D (another Intl. entity) that if B fails they will pay a large some etc. So on and so forth... Unfortunately, we are all in the same system. There is no longer isolated boundaries.
You cannot simply say let the foreign entity fail. If there is large enough failure in the system, it will propagate in ripples in every direction. That's what happened with Lehman, Bear, AIG. More and more of these could have failed (even JPM) until it is all rubbles.
We had the opportunity to fix this system. Yet, the as soon as there was pulse in the financial system again, those entities took position against re-regulation. What you got is a lite version that even that is the target for further gutting.
You hear politicians saying if only we de-regulate these... It is tried. It didn't work. It is still pushed as solution by a certain political movement. Obviously they are not listening to main street because main street is not actually asking de-regulation of financial entities. Just the opposite. But then again, main street is fooled to vote for these people again and again. There you go!
We had crisis like this before, and this will not be the end of it. I think we will get more financial crisis like this sooner or later. Let's hope the bill will be less next time.
"My radar picks up when I see numbers tossed around without citations"... as well it should. Unfortunately the internet and also an abundance of "forwarded" emails are simply littered with this kind of crap.
I just emailed a friend who had forwarded a bunch totally unreferenced claims regarding alleged Medicare premium increases, to suggest that we get enough of this BS from our politicians, and it's really not a great idea to also do it to ourselves.
Comments
It is too easy to be critical now after the fact. We had a choice of not growing government debt but let the banks and the rest of main street fail with it. Far more people out of work, much deeper hole to climb. I can almost hear those being critical of debt complain why government not doing anything then.
There is a cost to any action or even inaction...
This is just like treating cancer with homeopathic means. 99% does not work but there is a great industry that makes money from selling ineffective products.
For example, on p.11, there is an assertion that 5% of wealthy Americans pay 58%+ of total US taxes collected. Fuzzy terms: wealthy (income? net worth? some blend?); US taxes (paid to the US government? paid to all entities, city, state, federal in the US?). No matter, without definitions, I can choose the interpretation and the citation.
http://www.ctj.org/pdf/taxday2011.pdf (Citizens for Tax Justice, "America's Tax System is Not as Progressive as You Think", April 15, 2011). Table 1 (where the notes define the terms) shows that the top 5% of taxpayers pay just 37.1% of taxes (21.5% + 15.6%). And to preempt the response that not everyone pays taxes, we have the paper noting: "All Americans pay taxes. ... State sales taxes affect everyone who shops ...".
On p. 4, we're told that "the response to EVERY financial crisis has been to cut interest rates". I'm sure that will come as a surprise to Paul Volker, who responded to stagflation in the late 70s by raising interest rates. One can make whatever point one wants by implicitly tailoring terms (like "financial crisis") to support one's conclusions.
The globe is more connected and with more connected there are now new inter-dependencies. A (a US) entity issues debt which is bought by B (an international entity) and C a US entity (say an insurance company) has written a insurance policy for D (another Intl. entity) that if B fails they will pay a large some etc. So on and so forth... Unfortunately, we are all in the same system. There is no longer isolated boundaries.
You cannot simply say let the foreign entity fail. If there is large enough failure in the system, it will propagate in ripples in every direction. That's what happened with Lehman, Bear, AIG. More and more of these could have failed (even JPM) until it is all rubbles.
We had the opportunity to fix this system. Yet, the as soon as there was pulse in the financial system again, those entities took position against re-regulation. What you got is a lite version that even that is the target for further gutting.
You hear politicians saying if only we de-regulate these... It is tried. It didn't work. It is still pushed as solution by a certain political movement. Obviously they are not listening to main street because main street is not actually asking de-regulation of financial entities. Just the opposite. But then again, main street is fooled to vote for these people again and again. There you go!
We had crisis like this before, and this will not be the end of it. I think we will get more financial crisis like this sooner or later. Let's hope the bill will be less next time.
I just emailed a friend who had forwarded a bunch totally unreferenced claims regarding alleged Medicare premium increases, to suggest that we get enough of this BS from our politicians, and it's really not a great idea to also do it to ourselves.
No reply... maybe no more friend?
OJ