I think that's just the Democratic comeback forever...

non-Democrat: "X"

Democrat: "Well Bush was a bad president so there!!!"

Unchecked capitalism & the free market having its way, are you serious? We have had nothing even close to that in a hundred years.

To simplify things:

At the end of the 90's, the tech stocks took a dive when Clinton sued Microsoft attacking successful business models. This caused uncertainty in the market and constriction occurred.

The current situation is from unnatural tampering with the housing market, were the federal government put tremendous preassure on lenders to underwrite mortgages for people who could not qualify in a free market.

Regressive in that the more you make over 100k the less you pay in percentage-wise into the SS system. I understand why it works that way, I just find it a bit unfair, perhaps unnecessarily so.

It's a safety net for all of us, one that we are almost always required to participate in. Someone may make a million a year for a decade, and be near pennyless before 65 and still enjoy the safety net of an income from social security. I find it a somewhat inconsistent ideology, because its a system that provides the same benefits for all putting money into it, but the burden of maintaining it is not even evenly distrusted.

The problem is, social security is this way without allowing people to opt out of it. If it is to remain mandatory, perhaps the burden of funding it shouldn't be so disproportionate?

Anyway, some Democrats, mostly pretty far left like Moore, are starting to call for everyone to pay an equal percentage, so it may be a real debate sometime soon.

All the school systems I have been around, maybe not all though.

If you really believe that you need to go find a web archive of fuckedcompany.com or something. The tech stocks took a dive because investors realized that they were giving hundreds of millions of dollars in market capitalization to companies that an eleventh-grader could have programmed for a school project.

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Seriously?

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I think the above post is a good place to start.

I think the term "successful business models" probably isn't fair to apply to illegally leveraging a monopoly in one field to push a product in another. Not just once but at least 3 times in under 10 years.

SI

And I will suggest that you go study venture capital and free market. Good luck.

Holy crap... I mean I'm a believe in markets as well, but to think the dot com bubble collapsed because the government was initiating anti-trust against Microsoft... that's just a whole new level of wow.

Every bear market has its trigger. I think the Microsoft suit triggered the NASDAQ drop in 2000.

Not really certain you're in a position to be suggesting any kind of academic advice to anyone after perusing your thought process. Care for some Flooz?

I agree that the Microsoft issue is a red herring, but I do have a question for the "unchecked capitalism" crew. What regulations would you have liked instituted in the early 2000 timeframe to prevent the mortgage issue?

Based on what people have said here (and in other spots), it seems the most common response is to have a restriction on the type of loans offered and a mandate of a certain % down payment (often 15-20%). The ironic aspect of all this is that if any republican would have proposed this in 2000, they would have been branded "looking only for the rich" as the number 1 home buying casualty in having "truer" loans with higher down payments would be the middle class and specifically minorities. So, this 20-20 hindsight is nice right now, but no one in the democratic party was in favor of adding mortgage regulations to make it more difficult for lower and middle income families to purchase homes. In fact, Dodd, Franks and half the congressional black caucus were fit to be tied when questionable loans to lower income families were given in the mid 2000s by Freddie Mac/Fannie Mae and republicans started asking questions.

So, people can blame capitalism for this if they like, but there was a "social engineering" plan at the base of this with support from Clinton, W Bush, republicans in the senate and much of the democratic party to get more people who couldn't afford to have homes in "purchased" homes. It's hard to put the blame solely on capitalism when that motive was the main reason many people on both sides overlooked some heavily questionable practices.

I made no such claim. All I am saying is that your claim that we are going to "get what we deserve" with Obama is doomsday garbage. As with every election, we are going to get what we vote for. Just as I have been disappointed that we have elected Bush for the last 2 cycles, now it's your turn to be disappointed IF Obama wins. But by no means am I going to say that Bush was what we deserved. He was far, far worse.

So, this is all the government's fault, not the market's? Gotcha.

Thanks for "dumbing it down" for me.

To be fair, this somewhat plays into his argument. I'm not sure that Kerry or Gore would have been any better as a leader over the past two terms. Worse is a relative term.

Bush = leader fail

I wasn't referencing Kerry or Gore. I make no claim as to their relative merits as a leader. I don't think Kerry would have been particularly good. I am saying that we deserve better than George W. Bush. We'll see if his successor lives up to the much-lowered standard for leadership.

The obvious regulation is that the sub-prime lenders should hold in reserve a percentage of the loan. The banks have to do that but I'm not sure what the figure is - 5% or something like that. This means if mortgages are defaulted they have the reserves to withstand the loss. Also the fact that they may suffer that loss makes them wary of handing out mortgages that will fail. As it stands, with no reserve to lose and the ability to repackage the risk and sell it on, they were less than careful.


I think one of the reasons for not demanding a deposit is that many tenants have paid in rent the equivalent of a mortgage repayment for years and could clearly repay the mortgage but have never been able to save the tens of thousands needed for a deposit. In these circumstances it was deemed that the deposit requirement could be put aside because these people have shown they can make the payments..

However what has happened is tha the sub-prime lenders have gone well beyond this and even sold mortgages on the basis that, even if you find you can't make the payments, you can always sell up in 6 months and take a profit. Fine, of course, until prices turned down.

It was never intended that loans be given to people who couldn't make the payments - what's the point in that? You're not doing them any favours there. But when you leave the decisions to the agents selling loans who are paid bonuses by the number and value of what they sell then sense goes out the window.

But these loans should have been monitored by lenders, Fanny Mae etc and weren't.


Except that the problem didn't stop with the loans themselves - they were then packaged and repackaged, derivatives produced which made the content of the packages opaque and created in such a way that they didn't appear on the balance sheets and so went unnoticed (this is the reason for the loss of trust between banks because no one knew how vulnerable any bank was).

All this occurred because of a environment in which traders, like the agents, worked on bonuses for deals and so risk was ignored. There was an orgy of buying and selling dubious derivatives boosting trader bonuses and apparent profits.

I saw an incredible figure reported in an article this weekend that it's estimated that there are between 500 and 700 trillion dollars worth (yes, FIVE to SEVEN HUNDRED TRILLION!) of these derivatives washing around world banks now. To put that into perspective - the GDP of the world is around 50 trillion. There are over ten times total world GDP in derivatives and some commentators believe the worst could be far from over.

This is what Greenspan meant when he said that his mistake had been to assume that banks would act to serve their shareholders when, in fact, they took part in extremely rash trading, ignoring risk. Then, when the core of these derivatives went sour - house prices - the whole edifice collapsed.

What this highlights is that when motivational bonus payments are such a significant part of the rewards package then financial dealing (both selling mortgages and financial trades) become irrational with concern for risk overwhelmed by greed for bonuses. It was this "capitalist mentality" that amplified the mortgage crisis into a world financial crisis.

It's interesting - communist economics fails (partially) because of lack of motivation for individuals and capitalism has now failed because of an excess. When I first read Marx I recall thinking "this guy doesn't understand the psychology of the working classes" (who are every bit as greedy, irrational and self-interested as the rich but just don't have the opportunity :rolleyes: ). It seems that that lack of understanding isn't restricted to Marx :)

So the new GOP argument is that the 3 headed monster, Obama, Pelosi, Reid is dangerous. The strange thing is that that argument never came up from the side in control that I can remember. So over the last 30 years, when one party controlled the executive and legislative branch I'd like to know if that very same party said, "This really isn't good. We shouldnt hold all three 'heads' of this thing." Whether or not you agree with the premise of danger when all three hold court, it's somewhat disingenuous to now claim this when it wasn't the equivalent when it happened to you. It's kind of the same as the tax argument above....no matter what the corp in the crosshairs wont ever agree that, "now is a good time to raise taxes on us." It just wont happen because theyre all full of shit.

and here you hit on the crux of my thoughts. I feel like I know what I'll get with a McCain/Palin Presidency and while it's been a long while since we had a Democrat in the White House from what I recall things we're better than they've been under the last 8 years. While I wouldnt venture to say Obama will be able to replicate the Clinton years at least I feel like I'll legitimately be getting something starkly different from the last 8, for better or worse and I'm willing to wager that there is more room above the line Bush set than below it.

Sure, my point doesn't diverge from that. Just because one option wasn't all that good doesn't mean the other one was better.

Alas, we'll never know for sure. :D

Here's where I feel like your playing the role of psychic rather than anything based on reality. I'll likely vote for McCain and I can tell you with great certainty that I'm not certain at all what I'll get with a McCain presidency. You're buying into the Democratic party line that McCain is just 4 more years of Bush. If we use that line of thinking, which is mostly based on the 90% voting number floated around, should I then know exactly what I'm going to get with Obama? He voted with the party leaders 96% of the time, much more than McCain did.

My personal opinion is that I don't know what I'm going to get from either candidate and that I'm playing a hunch with my vote. Any talk that you 'know' what you'll get from either candidate is based on partisan talking points rather than any unbias fact-finding.

Agreed, but it does play into the nature of this election and just how much we really know about either candidate and how he/she will perform in office.

The experience argument didn't work (then was taken out back and shot once Palin was chosen)
Copying the "change" message didn't work
"Lipstick on a pig" hasn't worked
Focusing on pork barrel spending hasn't worked
Bringing up Bill Ayers hasn't worked
Slinging mud at ACORN hasn't worked
Bitching about media bias hasn't worked
Joe Six-Pack, Joe the Plumber, and Joe Liebermann haven't helped
Talking about flagpins hasn't worked
Calling Democrats Marxists hasn't worked

They'll keep trying different things until time runs out.

Mac summed it up really well in his post. Along with his suggestion that banks should be forced to hold some of the loan, there's a much bigger problem here. Sure, lost mortgage money would have hurt banks. But not like this. The bigger problem is that banks turned around and were allowed to leverage that money for a whole order of magnitude more of borrowing (10-15X!) and that's really why we're in the crapper.

No one is happy about throwing 700B at the problem. But if these were just bad mortgages, hell, 700B would be a decently large fraction of all bad morgages. Again, not that it's the right or best solution- but the government could have written a (big debt) check and problem solved. Instead, we have these bogus funds and money on paper floating around to the tune of tens of trillions of dollars and that's where things are going to take time to unravel.

So, in short, a regulation on limiting how much leveraged lending you could do, to the tune of 1-3x your assets rather than 15 or 30 (depending on the type of institution you are) would have saved us from whatever monstrosity this is going to become.

SI

and you do the exact same thing on the opposite side of the fence. I do know that the GOP line has been going for 8 years now, McCain IMO has sold out to the group within the group, and Im unwilling to take a chance on the same group pulling strings. You may be. I wont be.

I'm still chuckling about the Microsoft anti-trust lawsuit causing the dot-com crash. I love FOFC :D

1 week to go.

I can't help but wonder how the McCain campaign would be doing if it had manged to stick with a line of attack for more than 2-3 days at a time.

In summary, you're willing to buy into a party line endorsed by many of the same Congress members who had a large hand in creating this mess. IMO, ignorance abounds in this situation and it's not limited just to Bush. He and his advisors obviously missed the bus and didn't realize the true nature of the finance beast. Without question, it's Bush's greatest gaffe of his presidency.

On the other side, many of the Democratic congress members ignorantly defended many of the policies that created this mess by taking the partisan stance concerning the need for everyone to own a home and anyone who stood up against it was racist or against the poor. Those same members are now claiming to have all the answers and may have a veto-proof majority. That's a very scary situation, though some in this thread have already dismissed it as a joke.

It can be difficult and I guess you have to listen to whosoever has an insight into the abilities of these guys.

I saw an interview this weekend, I think it was on Larry King Live, with a guy who was presented as Clinton's chief economics advisor during the Clinton years (you guys will probably know his name but I forget it now). He said that he'd been in a number of meetings with Obabma and had been very impressed with the way he took charge of the meetings, listened to anyone that could articulate their arguments regardless of whether they matched his view or not, analysed the information he was given and came to a sensible, on-balance, conclusion. He insisted that Obama impressed him every bit as much as Clinton in the way he grasped complex ideas and situations.

Of course he presumably is a Democrat but I didn't get the impression that he was pushing a party line (you can usually tell).

I think that we won't. Since it has already happened, it will be harder to get the news to pick up on it, and harder to get people to pay attention. If the first time that anyone ever heard Wright say "God Damn America" was last week, then McCain has one of the best October suprises of all time.

But Clinton ruined that for him. Unless there is a video of Wright and Obama on stage both saying "God Damn America," then I think that it is a non-starter. Besides, if they had it, they would have released it near the start of early voting--not wait until 1 week to go.

By not using Wright, Senator McCain, win or lose, can say "I ran an honorable campaign."

Mac Howard, you win this week's "post of the thread" award. Congratulations!

Oh, c;mon, lets not let him off that easy.

I wouldn't worry so much about that. Obama--based on his fundraising ability and his voter lists--is more powerful than the Democrats in Congress. He is not beholden to them. This image of him as Reid and Pelosi's lapdog does not accord with reality.

Also, if the Dems reach veto-proof majorities, it will be because a lot of conservative Dems are winning in 5+ REP districts states. Unless these guys want to be one-termers, they are not going to go all leftist on us. They will make the Democrats in Congress more powerful, but also more moderate.

And, since I take it that you are a Republican fan, you can see it as a win/win. Either the Congressional Democrats are more moderate than you expect, which you will like. Or, they will do like the GOP Congressmen did for six years and act as a rubberstamp for the President and not challenge him in any way. That's how a party dies in front of our eyes. Not allowing any constructive dissent or debate from within.

The best thing for this country, in the event Obama wins the Presidency, is for the Presidency and the Congress to get back to their give/take relationship. And, considering who Obama is and what the Congress will look like, I think that there is a decent chance that will happen.

Seriously? If there's a mistake that Bush has made in his presidency that outweighs the impact of a global economic crisis, I'd love to hear it. Bush and the congressional idiots have managed to affect the lives of 4-5 billion people simply through inaction. That's pretty impressive stuff for all the wrong reasons.

Poor, brown skinned people are not the reason we're in this mess.

I agree with you for the most part. I think that there will be some moderate members in there. They have an approval rating in the single digits, so they're not exactly looked upon much more favorably than Bush, which is saying something. I also think that the economic situation is going to hog-tie this administration to the point where most of the campaign promises on either side will go unfulfilled due to the lack of government money available.

I agree. Not sure why that was even mentioned as I didn't say that anywhere in my post.

Oh goodness, not this shit again.

If the Community Reinvestment Act and POOR PEOPLE could destroy the prosperity of the American economy by themselves, they'd have wrecked it a long time ago.

This bullshit talking point just fails to recognize common sense, much less ignore the history behind what's happened the past 15-20 years. Look at all of the McMansions that are foreclosed in suburbs across America and tell me again that this problem was caused by Democrats.

Look, hate the Dems all you want and vote against them. I do and will continue to unless they start to make sense with my own political, economic and social values.

But lies like this is why more and more reasonable people are leaving the Republican tent. Call them RINOs if you want to, but even those who aren't have grown sick and tired of the antics of the conservative base, who seem hellbent on race baiting, ignorance and class warfare.

You can be fiscally conservative, against redistribution of wealth, public schools and other such things and be an American who believes everyone deserves an opportunity to thrive in this country.

But it seems many on the right are so hellbent on benefitting and passing wealth to their heirs and shutting out as many others, all the while wondering "why they can't pick themselves up by their bootstraps."

The duplicity doesn't astound me, but I'm fed up with the bullshit.

Carry on with the stupidity and washed up logic.

What then does this mean?

Win or lose, Wright or no Wright, he has not run an honorable campaign.

I agree with this that the lower income folks were not the only ones abusing this policy. There's some very large houses in my area that were paid for with zero or five percent down. With that said, that door was opened by the Democrats. The fact that middle and upper class peole abused the policy was an unintended consequence, but the cause rests with the people who opened that door and refued to close it when it became obvious that something was amiss.


This is a capitalist society. People look out for their own best interests and that's generally what drives this country forward. You don't want to stop that kind of thinking. I think there's a place for government intervention in regards to your bootstraps statement, but I think the government has generally failed miserably despite a wealth of resources to help the people you are referring to in your statement.

I think most bankers would tell you that the CRA has not been the cause of the subprime meltdown. A contributor? Sure, but probably not a material one. If you track the path of the crisis, you will see that the first loans to become distressed were not subprime loans. Those continued to perform relative to the market. The initial hits came from Alt-A borrowers--those with high FICO scores who were able to get loans with little or no documentation. Alt-A borrowers come in all stripes--investors and flippers, those with undocumented or unreliable income (perhaps bonus or commission heavy), etc., but they generally aren't subprime borrowers.

As of the middle of 2007 the entire subprime market was valued at 1.3 trillion dollars. Subprime mortgages aren't the major problem.

You make some very good points, but just to make sure we are on the same page, the issues surrounding credit derivatives are very different from mortgage backed securities. I believe the number you quote is all credit derivative exposure. The vast, vast majority of these will not be on subprime assets, but on credit indexes or individual corporate names.

The securitization and resecuritization of mortgages has certainly spread the housing problem over a much, much wider segment of the population (why would you ever think you would have exposure to subprime mortgages in your seemingly safe money market mutual fund?), but the mechanics are different from the swaps and derivatives issues out there.

You're having a rough day. Nowhere in my statement did I say that sub-prime mortgages were a 'major' issue. I agree that they're only part of the problem.

Wow. I haven't read the rest of the thread yet so I assume you've already been called on this, but I couldn't let it pass without commenting. There have been many gross generalizations and ridiculous claims in this thread, but I think this is the new high water mark!

Who knew? Clinton caused the dotcom crash!

So again, what do you mean by this:

Yes, of course. I'm not suggesting there's 500 trillion of sub-prime mortgages out there. The article was saying that there's far worse than the sub-prime problem out there in the financial world. But, as far as I can see, these mortgage backed securities have become entangled in the derivatives environment and were probably the trigger for the financial crisis that has encompassed the whole world. In short that the US housing problem has been amplified into a world crisis by the (abuse of?) the capitalist system. The purpose of the derivatives is to spread the risk - well that's exactly what it's done, spread the risk around the whole world :)

I have seen it suggested that this whole thing may well have happened eventually even without the sub-prime problem.


Hey, I live in Australia and I was talking to a guy this weekend who claims to have lost over $100,000 from his superannuation fund as a result of this crisis. If youi guys thought that you were disliked before I can assure you there's some pure hatred out there now :)

From John Snow in 2003:


Response to Snow where they passively try to point out the real reason they think people oppose Fannie/Freddy Mae:


But when the s%$# hit the fan, Barney Frank made it blatently obvious what he thought was happening:

The Associated Press: Frank says GOP housing attacks racially motivated

Lou Dobbs did a pretty good job of calling Barney Frank on it in this interview:

Video - Breaking News Videos from CNN.com)

I still don't understand this. How is it a disproportionate burden? If I stop putting in money, I stop contributing to the amount I will receive from Social Security. This math is not correct, but to oversimplify it (both for simplification and because I don't know how it actually works), if I put in $100,000 to social security over my life, I get $1,000 a month in retirement. If I put in $50,000 to social security over my life, I get $500 a month in retirement. Is this not the case? Why do people need to keep contributing to Social Security beyond $103,000 in income? If they don't contribute past that, they're not taking money away from anyone but themselves. Correct?

The semi-private status of Fannie and Freddie were obvious problems, and while I think Frank got it wrong, I don't think fully privatizing them would have stemmed this crisis. While there was astounding corruption, at the end of the day I don't think Fannie and Freddie are causes of the crisis, but symptoms. The under regulated investment banks and the financial instruments created by them are a much bigger problem.

However, attacks on the CRA, while not always racist IMO, are misguided. The CRA played a minor, if any, role in this crisis.

No denying there has been interplay between the two. AIG is the best example of the combo effect, as they served to backstop a number of CDOs that held a lot of mortgage exposure, through various types of swaps.

CDS has certainly been lurking as an issue. I can post more in the thread started on CDS. But I tend to share your view that housing has been the driver, and it's been amplified by other factors.

That's really along the same lines of what I was saying, though. Any regulation that restricts the number of loans you could make (compared to what you own) would have hurt the ability of poorer citizens (ie, worse credit) to get homes. Both sides were staunchly opposed to limiting the ability of any citizens to buy homes and any person that would have created a new regulation (be it to increase the amount of down payment, limit the number of loans made by institutions or require better credit scores) would have been shout down for limiting the ability of poor and minority communities to buy houses.

So, here were the possible solutions as I see it and (IMO) the reason they would not have flown if presented in 2000-2005:

1. Restrict the amount a bank can loan (compared to what they hold). The effort of this would essentially have been to make home loans tougher to get. Less cash available for loans means less accessible loans for poorer citizens (or poor credit citizens). Again, in retrospect, it is a good idea - but both republicans and democrats had this idea that everyone should have access to buying a house and any policy that restricted this was a political loser.

2. Increase the required downpayment or credit rating requirements. Same logic as #1. Not a terrible idea, but one that would have been demagogued pretty heavily by both sides. Bush and co had bought into this "ownership society" and would have criticized this. The democrats would have viewed it as being unfair to the middle class as it puts too much of a burden on middle income people to be able to afford to buy a house.

3. Change the accounting practices to allow more flexibility in holding loans that initially had lower value but would increase. After Enron, transparency was the name of the game and no one would have gone along with a change to allow this. So, the moment you got a "hot potato" loan, you had to move it quickly.

Again, I am not blaming democrats or republicans only here. The political climates were just not there to do any of the above 3 options. Bush and the republicans (esp in the senate) didn't want to restrict home-buying opportunities because of his "ownership society" goal. The democrats didn't want to allow accounting practices that could lead to another Enron or reduce the ability of lower to middle income families to buy houses. So, blaming capitalism for this is ignoring a significant elephant in the room. There were logical steps that could have been taken, but no one wanted the hit politically to take them. Capitalism can always be blamed for poor decisions in the industry as a business' base goal is usually to make more money. But, no one even tried these options above (outside of a few house republicans in 2005 - and they got rejected by both parties). So, I would put the blame on political will by both parties to correct a somewhat questionable situation, not simply capitalism.

Holding investment banks to a regulatory scheme close to that of commercial banks would have helped quite a bit IMO.

So, in the end, you agree that more regulation would have helped, and that "unchecked capitalism" in this case was the main source of the problem.

Its amazes me that people blame the democrats for this when the republicans held the presidency from 2001 through 2009, the house from 1995 to 2007, and the senate for most of 2001 and again from 2003 to 2007. This mess was created long before the democrats took control of the house and senate.

When the Democrats come in to power, all will be well.

It amazes me that you cherry-picked that one quote and didn't toss in the ones where I noted that the administration similarly failed.

this is incorrect. most people get far more out of the social security system than they ever put in. the money you contribute today is used to pay benefits for people receiving them now. it is not held aside in your name for when you retire.

example would be someone who starts collecting at age 65 a benefit of $1,000 a month ($12K per year. let's say they live to 85, so 20 years x $12K per year = $240K that they receive from the system. over that person's lifetime, they would have contributed far less than $240K to the system through payroll deductions.

What you're saying doesn't contradict what I'm saying, I don't believe. You get more than you put in, but in relation to someone that worked the same years you did, but paid more/less into the system, I believe it is proportionate, is it not? If Person A works from 20-65 and contributes $250k, and Person B works from 20-65 and contributes $500k (we're assuming they are the exact same age),t hen person B would receive a propportionately larger amount in retirement, would they not? (Let's also assume they both live to the age of 85).

How long will we have to wait for Obama to fix everything before he's considered a failure?

8 years? I mean, it's only fair to give failures from both sides the maximum term limit. :lol:

He'll have about a year and a half before mid-term elections. If Obama wins, and hasn't shown progress by then, the Dems will feel it in the mid-terms. They'll probably feel it anyway if the economy rebounds, because the big issue will move on to some unforeseen boogeyman that will probably favor the GOP.

not exactly, since the amount contributed is capped each year. the calculations are very complicated, and if you are married or not plays into it. here is some stuff from wikipedia that tries to explain it:

Social Security (United States) - Wikipedia, the free encyclopedia

In 2004, Urban Institute economists C. Eugene Steuerle and Adam Carasso created a Web-based Social Security benefits calculator.[71] Using this calculator it is possible to estimate net Social Security benefits (i.e., estimated lifetime benefits minus estimated lifetime FICA taxes paid) for different types of recipients. In the book, Democrats and Republicans - Rhetoric and Reality, Joseph Fried used the calculator to create graphical depictions of the estimated net benefits of men and women who were at different wage levels, single and married (with stay-at-home spouses), and retiring in different years. These graphs vividly show that generalizations about Social Security benefits may be of little predictive value for any given worker, due to the wide disparity of net benefits for people at different income levels and in diffferent demographic groups. For example, the graph below (Figure 168) shows the impact of wage level and retirement date on a male worker. As income goes up, net benefits get smaller - even negative.

However, the impact is much greater for the future retiree (in 2045) than for the current retiree (2005). The male earning $95,000 per year and retiring in 2045 is estimated to lose over $200,000 by participating in the Social Security system.[72]

In the next graph (Figure 165) the depicted net benefits are averaged for people turning age 65 anytime during the years 2005 through 2045. (In other words, the disparities shown are not related to retirement.) However, we do see the impact of gender and wage level. Because women tend to live longer, they generally collect Social Security benefits for a longer time. As a result, they get a higher net benefit, on average, no matter what the wage level.[73]

The next image (Figure 166) shows estimated net benefits for married men and women at different wage levels. In this particular scenario it is assumed that the spouse has little or no earnings and, thus, will be entitled to collect a spousal retirement benefit. According to Fried:

"Two significant factors are evident: First, every column in Figure 166 depicts a net benefit that is higher than any column in Figure 165. In other words, the average married person (with a stay-at-home spouse) gets a greater benefit per FICA tax dollar paid than does the average single person - no matter what the gender or wage level. Second, there is only limited progressivity among married workers with stay-at-home spouses. Review Figure 166 carefully: The net benefits drop as the wage levels increase from $50,000 to $95,000; however, they increase as the wage levels grow from $5,000 to $50,000. In fact, net benefits are lowest for those earning just $5,000 per year."[74]

The last graph shown (Figure 167) is a combination of Figures 165 and 166. In this graph it is very clear why generalizations about the value of Social Security benefits are meaningless. At the $95,000 wage level a married person could be a big winner - getting net benefits of about $165,000. On the other hand, he could lose an estimated $152,000 in net benefits if he remains single. Altogether, there is a "swing" of over $300,000 based upon the marriage decision (and the division of earnings between the spouses). In addition there is a large disparity between the high net benefits of the married person earning $95,000 ($165,152) versus the relatively low net benefits of the man or woman earning just $5,000 ($30,025 or $41,890, depending on gender). In other words, the high earner, in this scenario, gets a far greater return on his FICA tax investment than does the low earner.[75]

In the book, How Social Security Picks Your Pocket, other factors affecting Social Security net benefits are identified: Generally, people who work for more than 35 years get a lower net benefit - all other factors being equal. People who don't live long after retirement age get a much lower net benefit. (These people include men, the obese, and people with health problems related to environment or heredity.) Finally, people who derive a high percentage of income from non-wage sources get high Social Security net benefits because they appear to be "poor," when they are not. The progressive benefit formula for Social Security is blind to the income a worker may have from non-wage sources, such as spousal support, dividends and interest, or rental income.[76]

That wikipedia article is irrelevant. My whole point is two people beginning and ending work at the same time. I don't understand how the cap contributes to the situation. If you're capped, you don't get as much in retirement. Wouldn't it be true that if someone was no capped, they would just get more in retirement? I understand that the money you are contributing now goes to pay current retirees, but if you put more money in aren't you owed more when you start collection social security?

hm.. it does appear the graphs show that you gain less the more you put in, but that only goes in the reverse of the logic you seem to be displaying, but I could be wrong. Clearly I don't know enough about Social Security.

That line of reasoning would be fine if: 1) You could choose to not participate in SS. 2) If it was guaranteed that SS will always have your money ready for you. Its not a voluntary savings system so it shouldn't be analyzed as one. It is a safety net that attempts to correlate the amount you put in with the amount you receive.

It is a heavier burden to the middle class and poor because they pay for it through a higher perrcentage of their income. They are doing this despite the fact that it is a safety net for everyone and despite the fact that it is a safety net that may not be there when they finally need it.

But aren't we increasing our burden if we were to have wealthy individuals with little or no cap? That means that this money that is supposed to vanish by the time "we" retire will be even harder to pay back?

i just re-read my posts and i'm not being clear. my knowledge of social security comes from calculating benefit amounts at an old job, so i know that there are a lot of variables that go into the equation. my point is that if obama gets in and institutes the payroll tax on higher incomes, since the benefit amounts are capped, it would be nothing more than a "re-distribute the wealth" tax. higher income workers get a declining benefit (relative to lower paid workers) as the wage base for the payroll tax increases.

Social Security is a tax!!!! :banghead:

Eurgh.... We know how well that's worked out for California....


I think people aren't investing because the investments on offer seem very risky at the moment, not because of the cap gains tax. Lowering the cap gains tax may take away some of the cost, but takes away none of the risk. Were this a stagnant market I think your argument would be correct.


Oh I hope so. If the Republican Party becomes solely (or mainly) the party of Palin, nationwide, we'll be looking at a future where the GOP has lost its electoral relevance and might even possibly see a third party arise, finally.


While a monopoly is certainly a successful business model, it's also the achilles heel of pure capitalism, in that it effectively destroys the competition model upon which capitalism rests. Arguably Clinton's pursuit of Microsoft was to remove this threat to capitalism from Microsoft in what has become a very important sector of the economy.

So basically Clinton was a defender of free market capitalism. Blows your mind, eh? :D


I subscribe to the idea that due to the significance of the year changeover (from 1999 to 2000) the volume of portfolios being rebalanced, and investors of all stripes taking the calendar opportunity to lock in gains, caused the initial "instability" which was actually a halt in accelerating gains. This in turn caused more people to look at the fundamentals of the companies in which they were investing and OH MY GOD THEY HAVE NO REVENUE OR PROFIT took hold. :D


:+1:

So you believe that, of the blame that should be attributed to the US government, democratic congress members share some of it, but the majority should go to the republican congress members and president?

I think that is what W's legacy will truly be. America will always be hated by some because of many factors, but Bush has caused many who were friends (or at least ambivalent to the US) to now just despise us. I don't think there is any doubt that the US reputation in just about every factor has taken a big hit in the last 8 years.

I think that may be right, to be honest. But I will add one caveat - by "regulation" I mean actions akin to having rules that you need to stop on a red light. IE, none of these were all that terrible to the market, they were more difficult political moves than capitalistic moves.

So, after 8,800 posts did anyone cause anyone to change their vote yet?

I've gone from being undecided to not voting.

Because this thread proves that everyone in the world has all the answers except me, so I'll just leave this shit up to them and assume things will work out fine.

Yes. Before the thread, I was for "Tastes Great". But the arguments here have persuaded me to vote "Less Filling".

I think the saddest part is that the US had everyone (in the Western world at least) eating from the palm of their hands after the 9/11 attacks. We all had the feeling of how we'd taken the US for granted, and how horrible it was to see 'the big guy' take a hit like that essentially for the rest of us. We all gathered in line to go into Afghanistan and get the assholes responsible.

And then Bush set his sights on Iraq...

I would bet nobody's vote was changed but I would bet some undecideds have been influenced.

You missed the theme of this thread. It was never meant to change anybodies mind, but to comment on the process. I like reading different peoples opinions on what is going on. Plus, Presidential campaigns always have the feel of history in the making.

The main bastard that did this was captured in Pakistan - I wonder how the world would have reacted to an invasion there. Afghanistan was, and still is a bunch of oppressive super-religious guys that gave shelter to Bin Laden - they weren't the master-minds of 9/11 any more than anybody that was killed in Iraq. Worthy of death, sure, but the terrorists would fight us wherever we engaged, and Afghanistan would have been as drawn out a quagmire as Iraq, except with more difficult terrain. Neither war is the "right war", the "right war" was much more complicated and certainly eluded the administration (though they came the closest, of course, by convincing Pakistan to get involved in the capture of KSM.)

If Europeans hate Americans for what their government did, and for what banks did, they can go to hell. The fact that it's a "democracy" and we're somehow responsible for them is similar logic Al-Qaeda gives for murdering civilians.

Wait, wait.. how can McCain be continuing Bush policies after this:



;)

Good on the Gov of Florida. Nice to see someone has the guts to make sure everyone has the chance to vote.

http://www.politico.com/blogs/bensmi...s.html?showall

This is a very big deal: Florida Governor Charlie Crist, to the shock and dismay of Florida Republicans, just moved to extend early voting hours, a move likely to widen the Democrats' lead under a program on which the Obama campaign has intensely focused.

"He just blew Florida for John McCain," one plugged in Florida Republican just told me.

I put that last quote in, because it just seemed so nuts. "Oh no! More people will exercise their fundamental right to vote! Now we can't win!". I've heard jokes about how the GOP was the party that could only win if people didn't care to vote, but that's rather stark, isn't it?

I agree with Foz. There's no reason not to allow as many people to vote as possible (within reason) on voting day. If allowing working people to vote earlier in the AM causes McCain to lose the election, then he shouldn't have won it to begin with.

The polls should be open 24-hours, or at least 18 if we really need the results that night for some reason. It would cost more, but government spends far more on nonsense.

But I think a lot of is repaired by a President Obama because our allies tend to love him for his rhetorical abilities (let's be honest, a President Hillary Clinton who held the same positions as a President Obama wouldn't be half as loved as Obama is today on the other side of the pond).

Arlie: What Crist is doing is extending the hours that they will allow people to vote BEFORE election day (Florida is one of the states where to avoid hassle, you can vote before election day)

Because he's going to be a weak push-over, just like McCain, but 20x worse.

And for what it's worth, I would have voted for Hillary over either current nominee. She's got bigger balls than either of these pussies.

There. That's my political analysis.

Agreed. We need a strong leader... like me. I would wipe the floor with those pussies!

Thank you, Mr. Vice President ;).

(though I somewhat agree)

Fixed it for you ;)

I'm more torn on this, but it's still OK. I just worry about giving armies of foot soldiers on both sides all this extra time to pull things and end up reducing the impact of legitimate voters who have taken the time to learn about each candidate. But, I don't think it's a terrible idea.

Hardee har har ;)

I think you're missing my point. The US had everyone on board for Afghanistan because it made at least some sense (lets go get Osama out of the hole he's hiding in), especially during those days and weeks just after the attack. Where the US lost the rest of us was when Bush and his cronies got greedy and tried to make up an excuse to go into Iraq, when it was clearly just a vendetta/oil war.

As for hating Americans, I don't think that's right (at least, I hope not). Some people might hate America (there is a difference), but I don't think it's that either. I think people hate Bush, and what he represents, which is a part of America, but certainly not all of it. Every country has parts of it that don't look so great from the outside, its just in this case that part got placed front and center in front of the control panel of the most powerful nation in the world.

Below is a funny analogy that is somewhat on target. Well, maybe not so funny.

Of course what this misses out is that when the rich man left the country, the bar owner no longer had to pay the protection money that had made #10 so rich and the price of beers dropped from the exorbitant $10 a beer to a more reasonable $2 and the other nine only had to find $20 between them instead of $41 ;)

Incidentally, on my previous post about sub-prime loan reserve, I've just been reading that US banks have to keep a reserve of 10% of mortgage loans (a 10 tens multiple) but Fannie Mae and Freddy Mac only need to keep 2.5% (a 40 times multiple)

Where overseas is the atmosphere friendlier?

This post convinced me to never buy a game from this arrogant prick:


...well wrong thread, but they're like sister threads...

I've made much more controversial posts than that on this forum. ;)