CAMPOS: Whose tax plan is really best?
By Paul Campos, Rocky Mountain News (Contact)
Published September 17, 2008 at 12:05 a.m.
In what may end up being a particularly unfortunate example of poor timing, Donald Luskin, an economic adviser to John McCain, wrote an article in Monday's Washington Post arguing that, as his candidate avowed recently, the U.S. economy is fundamentally sound.
This article appeared even as a wild scramble was taking place on Wall Street in an attempt to keep the financial markets from melting down. The day before, Lehman Brothers, one of the nation's oldest and largest investment banks, filed for bankruptcy, after various attempts to engineer a bailout of the firm failed.
At the same time, the Bank of America announced it was buying troubled brokerage house Merrill Lynch, in a deal designed to stanch the bleeding from the ongoing mortgage lending crisis.
Then, as this column went to press, the Federal Reserve made the shocking announcement that the U.S. government was essentially buying insurance giant AIG in return for $85 billion in loans - a rescue operation literally 25 times larger, in real terms, than the infamous 1979 bailout of Chrysler.
Stocks were down sharply on Monday, and on Tuesday morning McCain was advocating a 9/11-style commission to investigate the financial crisis that an economic adviser told us Monday isn't happening. Indeed, the GOP presidential candidate is suddenly sounding like William Jennings Bryan, railing against greedy Wall Street financers who have robbed America's workers blind.
Anyway, Luskin's argument is essentially that average Americans feel worse about their financial situation than the facts warrant, because politicians, most notably Barack Obama, are, for reasons of electoral self-interest, painting an unrealistically gloomy economic picture.
What Luskin's argument overlooks are how the economic anxieties of Americans are the inevitable result of 30 years of widening income inequality, in a culture that also encourages conspicuous consumption and celebrates fantasies of unlimited wealth.
Consider that in 1978 the median household income in America - meaning half of households made less - was about $40,000, in current dollars. Today it's about $48,000.
Meanwhile, the gross domestic product has grown by 140 percent, from about $5 trillion to around $11.7 trillion, again in current terms. At the same time, the population has increased by 40 percent.
This means that, per person, the nation is nearly twice as rich as it was 30 years ago. Yet the income of the typical household has barely grown at all.
It's hardly a mystery where all those extra trillions have gone; while median household wealth has increased only modestly, the income at the top of the economic pyramid has skyrocketed to such an extent that we now have a greater level of income inequality in America than at any time since before the Great Depression.
The priests of the "free market" (these are generally the same people who are currently trying to shake down the federal government for taxpayer- funded bailouts of some of our biggest financial institutions) will tell you all this is an inevitable product of global capitalism, and as unavoidable as the laws of thermodynamics.
That's obviously untrue; the reason the rich have gotten so fabulously rich in America over the past generation is because almost every change in the rules of the economic game has been designed specifically to benefit them.
A new report from the Tax Policy Center reveals that McCain's tax proposals promise more of the same - if they were enacted, the richest 1 percent of Americans would see a far larger percentage increase (and an astronomically larger gross increase) in their income than anyone else.
Under Obama's proposed tax plan, 95 percent of American taxpayers would see their after-tax incomes increase, while the richest Americans would experience a slight decline in the staggering wealth they've accumulated during our new Gilded Age.
And if that means people like John and Cindy McCain end up owning only 11 instead of 12 houses, that's a price I suspect the average American voter is willing to pay.
Paul Campos is a professor of law at the University of Colorado. He can be reached at paul.campos@colorado.edu.
September 17, 2008
5:49 a.m.
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SheikYurBooty writes:
The events of the last few days delivered the coupd de grace to whatever remained of the myth of the "free market."
McCain's problem, aside from being on record as saying that the economy is basically sound, is that he is from the side of the political spectrum that says: laissez-nous faire - hands off the economy Mr. Politician, the free market will cure itself of anything that might ail it. That view, a bedrock of the GOP worldview, has been completely discreditied. Where does McCain go from here? The spin meisters can deal with anything, but the GOP has to do a gut check and recognize that, left to its own devices, the free market will always propel itself to unstable extremes fueled by raw greed.
September 17, 2008
6:26 a.m.
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Oh_Wise_One writes:
How hard is it to comprehend the word "fundamental" in the phrase "fundamentally sound"??? It must be really hard up there in the partisan liberal brains cause you seem to miss it or are willfully ignorant.
The sky is not falling and the Democrats are bleating because they want power. If they keep bleating for long enough, it could be self fulfilling prophecy, but, in their mind, they will be blameless. Economics is about confidence.
September 17, 2008
7:03 a.m.
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SheikYurBooty writes:
OWO - "Economics is about confidence."
Otherwise stated, "hit me with the happy talk."
Why don't you do us great unwashed a favor and define "fundamental?"
September 17, 2008
7:10 a.m.
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justmy2cents writes:
The idea of the economics of confidence is what has generated the rapid modern boom-bust cycle ... the confidence in the "quick money" of dot.coms and the "always higher" real estate market. The economics of confidence yields high profits for the few and short term jobs followed by economic uncertainity for the many.
What economics REALLY is, is the "production, distribution, and consumption of goods and services, or the material welfare of humankind" ... where American economcis now fails is we don't exactly participate in the production of goods and services anymore, we are too busy with their consumption.
September 17, 2008
7:11 a.m.
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taoistblockhead writes:
"Free Markets" = "Corporate Socialism"
September 17, 2008
7:31 a.m.
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roger44 writes:
Our system is basically sound, it's the greedy that upset the apple cart. we should not be bailing these people out.
let's just dream for a second the federal tax system gives us some breaks, but we have dummies in charge at the state level. some years ago, feds had lowered taxes, but the state raised theirs, (Nebraska) just enough so overall tax was a touch lower. Some break. Now the house has approved drilling for oil, but only beyond 50 miles. most oil inside 50 miles, states can say no to drilling, their choice, and states cannot get royalties. So why would they approve drilling? no money in it for them. Smoke and mirrors for the democrats, but they will smile and say they approved drilling. we are in deep trouble if this keeps up no matter who is elected.
September 17, 2008
8:13 a.m.
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SheikYurBooty writes:
roger44 - "let's just dream for a second the federal tax system gives us some breaks" - what does that mean??? Pass off even more taxes to the future with interest? Live even MORE beyond our means ("hair of the dog" economics)?
September 17, 2008
8:53 a.m.
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Marshdale writes:
It is a combination of things. We have the middle class in reverse socialism subsidising the ultra wealthy. We have well to do and some upper middle class folks borrowing money for homes that they can't afford. I will place blame for this later. The goods and products we purchase here in this country are often not made here creating a huge trade deficit and weakening the dollar.
Back to blaming who's at fault for failed mortgages. For one, I believe Colorado is one of only two states that does not have any regulatory commission or body that licenses mortgage lenders, so there is no accountability. Unscrupulous lenders ran wild in this state and took advantage of uneducated borrowers who were desparate for the quote, "Illusive American Dream". Second, the lending industry as a whole has been so deregulated nationwide it was like a greased pig on a slip and slide. Third and the least of all some simple math by borrowers and some basic home economics would have alleviated some of this, but only some, because these lenders would talk borrowers into a contract having them believe they were going to have a certain payment and when the first payment came in the mail it was 15% higher than they were told.
Word to the wise. If your lender tells you your payment is going to be "around" a certain amount, don't sign on the dotted line. The lender should be able to provide you the exact amount at the time of signing including, taxes and insurance. If they tell you they can't they are telling you a bold faced lie.
September 17, 2008
9:04 a.m.
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Marshdale writes:
Ok, AIG is rescued. Does that mean the Fed just printed 85 billion more dollars. What does this do to the value of the dollar. I have an idea#^@!^. Where will inflation be? Is the Fed trying to set up Obama for failure, so in the next election we can elect another republican who will let the big money brokers rob the American people even further? Conspiratorial as it may sound, I would not put it past them. They did it once already. For those of you who are old enough to remember when Jimmy Carter was elected this is exactly what happened to him so they could bring in the Great Deregulator Ronald Reagan. Once again, I'm not saying it is a conpiracy or anything!
September 17, 2008
9:10 a.m.
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Bmac writes:
Campos – you are a liar just like most lawyers and most politicians. You play with words to mislead the uninformed and ignorant. Obama’s plan is a tax “credit” (500.00), not a tax cut, and proposes a marginal tax increase on income tax, capital gains, payroll tax, the death tax, and dividends and increasing corporate taxes – all of which will hurt the middle class as usual. McCain proposes doubling person exemptions for dependants plus reducing corporate tax from 35 to 25 percent which will help the economy with better wages, new jobs, and probably help with insurance costs. The European countries tax business around 20% (Ireland is at 12% I believe). Tax “revenues” to the government increase when you lower taxes – not raise them. President Kennedy understood that lowering taxes was the answer – not raising them. The Democrats since then have always tried to raise taxes, and this year with control of the congress they are really ready to screw the people of America. Locally, the people of Colorado fell for Ritter’s BS, and we have been paying for that since. I don’t particularly like either party, but at least with the Republicans, I think we will have voice in our future.
September 17, 2008
9:20 a.m.
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RainbowWarrior writes:
Create a Global Strategy for Main Street, not Wall Street
We must end the corporate dominance over our nation’s tax, trade and energy policies, and recognize that in a global economy what’s good for America’s multinational corporations isn’t necessarily good for America’s working families. Corporations can’t be allowed to use our tax code to park profits offshore and send jobs overseas. Government investment can spearhead the renewal of America’s productive might. For example, a concerted drive for new energy will stimulate innovation, create jobs, develop new technologies, reduce our dependence on Persian Gulf oil and create millions of “green collar jobs” in manufacturing and construction.
September 17, 2008
9:59 a.m.
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taoistblockhead writes:
Long Live the New Union of Socialist Republicans
Welcome news comrades! We the People are now We the Owners. The People's Insurance Company, formerly known as AIG, was saved for the time being from the forces of capitalism by the new Union of Republican Socialists, formerly known as the GOP. Somewhere in the great beyond, the ghost of Karl Marx is grinning while the spirit of Adam Smith forks over the one dollar bet with an invisible hand:
In a move aimed at averting a new global economic shock, the US Federal Reserve agreed an unprecedented 85-billion-dollar rescue loan for American International Group. The deal, sealed late Tuesday, saved AIG from collapse and gave the US government a 79.9 percent stake in the insurance behemoth.
Now that the People own a major insurance company, it's fair to ask how the People's Insurance Company, along with the People's Mortgage Companies and the People's Investment Banks, will benefit the People who Own them. Can we expect lower premiums, equity sharing, and corporate perks for our hundreds of billions of dollars? Should we start checking our mailbox for dividend checks? Who gets paid first, claimants, bondholders, stockholders, or we the new taxpayer owners? We the Owners, want to know, and the Union of Socialist Republicans better damn well tell us, fast.
http://www.dailykos.com/
September 17, 2008
10:20 a.m.
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John_II writes:
Campos never quite explained how "income equality" adds to economic "anxiety" among the middle class. He cites some statistics but, as usual, he cannot logically connect the dots. Does he honestly believe that the average middle-class American is worried about how rich the rich are?
This is pure class warfare demagoguery. This country has the highest per capita income in the world. We have relatively low unemployment. We live in the biggest homes. We drive the biggest cars. Our population is rapidly growing because everyone wants to live here. Millions of Mexicans have migrated here since 1978.
Of course, we have serious economic problems right now. Who told Campos that free markets will never suffer declines? Our current problems did not stem from anxiety over income inequality. But it certainly stemmed from unchecked greed.
Millions of greedy consumers decided to buy bigger homes than they could afford. They accepted risky loans from banks and promised those banks that they would pay the money back over time.
I witnessed this in Los Angeles for years. All of our friends, who made the same amount of money as we did, were buying huge homes in expensive neighborhoods. They spent $600k, $700k, and $800k for these homes. They took out risky loans and assured us that it was fool-proof because the homes would always increase in value.
So now California is among the highest, if not the highest, in terms of foreclosures. Millions of Americans accepted hundreds of millions of dollars in loans yet never paid those loans back as they promised they would. And now banks are failing.
Sure the banks should have exercised better judgment in handing out these loans. But lets get something straight: these banks failed because they placed too much trust in the honor and judgment of many American citizens.
And now all the Marxist demagogues come out of the woodwork, telling us that the wealthy need to pay more and that the middle-class is not as rich as they should be. Even though the federal government has warped the free market with the creation of Fannie Mae and Freddie Mac, law professors from their ivory towers, with salaries paid to them from the government, shout down to the masses and say, "you see, you see, free markets do not work. The rich are getting richer faster than you are. We must stop this!"
September 17, 2008
10:31 a.m.
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taoistblockhead writes:
America is not a sustainable culture. Any questions?
September 17, 2008
10:34 a.m.
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rjnova writes:
The economy is fundamentally sound if allowed to function without government interference. We are going thru a correction in the financial markets because Congress decided everyone should own a home whether they could afford it or not. So much money was put in play prices and speculation drove prices out sight and “financial institutions” became creative with “financial paper” that has collapsed. To me that is unintended consequences of Congressional meddling. They are now dumping money into the economy trying to bail everyone out and cover their a*s for the ill they have done. We should not be bailing out speculators---the system is self correcting if they go out of business.
McCain’s plan allow all businesses to grow, create jobs and keep taxes out of the hands of Congress to prevent more mischief. Obama’s plan is income distribution because 40% of people do not pay taxes and would be getting rebates on taxes they do not pay. Taxing capital gains and those making them will really bring down the economy.
Campos being from the Socialist Republic of Boulder, where only at CU could be a professor, will never understand or accept the capitalist system. The biggest threat to this country today is the school system is saturated with left leaning and socialist teachers that come out of our secondary schools and colleges without ever understanding the basis for the American economic system. Capitalists and free enterprise proponents dropped their guard years ago and we may now be hopelessly stuck with the system that is self perpetuating.
Now our universities are turning out graduates like Obama who do not understand everyone cannot be a teacher, service worker for the government, do each others laundry or be a ski instructor. There has to be a risk/reward system in place for those willing to risk starting an enterprise or we will become like the Europeans where the bulk of their income goes to welfare, health care, 30 days vacation and a 32 hour work week. It sounds great but they are sinking deeper and deeper into where no one works and their imported Islamist workers are taking over the institution.
September 17, 2008
10:37 a.m.
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dakar writes:
Campos is nothing but a political mouthpiece for the left. Take a look at who a lot of these rich people are - from Hollywood to many in business are liberals. Their belief is they know whats best for everyone and let the gov't determine wealth. USSR tried and failed miserably. China used to mostly do that and even they realized that doesn't work to well and their turning into more of a dictorial/capitalist nation.
September 17, 2008
10:43 a.m.
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SheikYurBooty writes:
John II - first of all, Campos talked about "income INequality" and not "income EQUALITY."
Second, the US hasn't been "highest in per capita income" in a while, nor are we likely to be there again any time soon. We are #6 - #8 depending on how you measure:
http://en.wikipedia.org/wiki/List_of_...(PPP)_per_capita
"Does he honestly believe that the average middle-class American is worried about how rich the rich are?" Yup. I believe that too. It's not even close.
Free markets do indeed work.... until they don't. They are like those velodrome bikes that have no brakes. That's great - you save the $$, weight and complication of a braking system, and as long as you don't need to slow down, you are fine. But otherwise....
September 17, 2008
10:53 a.m.
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John_II writes:
Yes, I have should written inequality rather than equality.
And no nation as large as our country has a higher per capita income.
Also, free markets work best when they fail. Failure is what causes markets to adjust and improve. That is why allowing the government to eliminate the consequences of failure is such a bad idea.
September 17, 2008
10:54 a.m.
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John_II writes:
I should say free markets work best when they are allowed to fail.
September 17, 2008
10:58 a.m.
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P_Denver writes:
* * * * * * *
taoistblockhead writes:
America is not a sustainable culture. Any questions?
* * * * * * *
Tao:
As a conservative Christian, I generally disagree with you. In this case, I think you may be right.
As it stands today, we have many cultural (spend-spend-spend) and financial ("favor the rich") roadblocks to sustainability.
CEOs "earning" appalling salaries while their companies go bankrupt. Businesses making unsound decisions and waiting to be bailed out by the government. An entitlement culture of "gimme, gimme" from people who never worked an honest day in their lives.
"Not sustainable" is an accurate description of our society today.
September 17, 2008
11:03 a.m.
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mytwosense writes:
John_II writes: "Does he honestly believe that the average middle-class American is worried about how rich the rich are?"
Well, obviously, you aren't:
John II: "And now all the Marxist demagogues come out of the woodwork, telling us that the wealthy need to pay more and that the middle-class is not as rich as they should be. Even though the federal government has warped the free market with the creation of Fannie Mae and Freddie Mac, law professors from their ivory towers, with salaries paid to them from the government, shout down to the masses and say, "you see, you see, free markets do not work. The rich are getting richer faster than you are. We must stop this!"
However, the average middle class American IS taking note that the rich have rapidly gotten far richer, while their own situation is stagnant at best.
Of course, based on your posts, I've never considered your frame of mind to be that of the "average" citizen.
September 17, 2008
11:13 a.m.
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mytwosense writes:
John II: "Sure the banks should have exercised better judgment in handing out these loans. But lets get something straight: these banks failed because they placed too much trust in the honor and judgment of many American citizens."
And this is the free market judgment you want us to trust in?
Anyway, the suggestion that these institutions were just handing out risky loans out of a goodwill excess of trust is perhaps one of the most ludicrous ideas I've heard from you yet.
These banks knew perfectly well that every loan created was instantly created pretend money their investment partners could stuff in their pockets. They knowingly leveraged themselves to the hilt, and they knew their reckless scheme was likely to be covered by the US Treasury if it failed.
And they too counted on home values to keep rising. So they were even more stupid than homeowners since they were supposed to be the more financially sophisticated party in the transaction.
September 17, 2008
11:21 a.m.
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jay writes:
some of the greatest apologistic hits so far:
"free markets work best when they fail"
"The economy is fundamentally sound if allowed to function without government interference"
"We are going thru a correction in the financial markets because Congress decided everyone should own a home whether they could afford it or not"
"Economics is about confidence"
"I don’t particularly like either party, but at least with the Republicans, I think we will have voice in our future"
"This is pure class warfare demagoguery."
"This country has the highest per capita income in the world." (my favorite myth so far)
"these banks failed because they placed too much trust in the honor and judgment of many American citizens" (second favorite myth)
"The biggest threat to this country today is the school system is saturated with left leaning and socialist teachers that come out of our secondary schools and colleges without ever understanding the basis for the American economic system"
"Take a look at who a lot of these rich people are - from Hollywood to many in business are liberals. Their belief is they know whats best for everyone and let the gov't determine wealth. USSR tried and failed miserably"
September 17, 2008
11:23 a.m.
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Conservativeslayer writes:
Who says republicans don't believe in socialism? They surely do. They believe in privatizing the profits, and socializing the losses. So the rich get to keep the profits, but the losses get to be paid for by the tax payers. Isn't that a great scheme?
September 17, 2008
11:24 a.m.
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SheikYurBooty writes:
John II - it's one thing to let a kid learn by touching a hot stove, and quite another to let him learn by falling off a roof. So too with market failures - little ones are useful but big ones are disasterous.
September 17, 2008
11:32 a.m.
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mytwosense writes:
I'm not entirely convinced we shouldn't let these institutions fail. But that doesn't mean we can't enforce some common-sense regulations for any financial institution that wants to do business is this country. Starting with not allowing them to give out more loans than they have the collateral to back up.
And certain accounting practices should be downright illegal, especially if they allow public companies to hide potential risk to shareholders.
I also have no problem with establishing government agencies to assist first-time homeowners or buyers, as long as the loans are sensible and sensibly given. But keep these separated from the privateers, who will almost always run them into the ground.
September 17, 2008
11:36 a.m.
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mytwosense writes:
Conservativeslayer writes: "Who says republicans don't believe in socialism? They surely do. They believe in privatizing the profits, and socializing the losses. So the rich get to keep the profits, but the losses get to be paid for by the tax payers. Isn't that a great scheme?"
In all fairness, there are plenty of Dems who allow this to take place, too. Neither candidate is passionately urging we just let these institutions take the hit. And yet, I suspect both candidates believe it's wrong for taxpayers to foot this bill.
Who is pressuring them? Because the public opinion seems to be mostly outrageous that we're having to pick up the tab. So why is neither politician running with this?
September 17, 2008
11:38 a.m.
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John_II writes:
That is a great point, Sheik. So, because we do not want the kid to fall off of the roof, we should not give him the ladder to climb up there. Nor should we tell him it won't hurt if he falls.
Government-backed FNMA and FHLMC warped free market principles by allowing unqualified people to buy homes they could not afford. I've been reading the comments on this forum lately and it seems that most people do not understand the role those institutions play.
September 17, 2008
11:47 a.m.
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John_II writes:
"Who is pressuring them? Because the public opinion seems to be mostly outrageous that we're having to pick up the tab. So why is neither politician running with this?" - MTS
Democrats are just as guilty as Republicans. Sure, the public hates bailing out these companies. But the public also hates to see the economy sink.
So what should the politicians do? They could bail out a few large private institutions and hope the public soon forgets about it. Or they can let the market adjust and suffer the economic consequences (and the economic blame game) that the public will not soon forget. Most politicians will opt for the former rather than the latter.
September 17, 2008
11:48 a.m.
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mytwosense writes:
John II, which is it? Did the government force these financial institutions to give out unqualified loans, or did they just do it because they "placed too much trust in the honor and judgment of many American citizens"? As you assuredly stated before.
Quit patronizing the posters on this forum. I hear a lot of assertions from you that people don't know how the economy works, yet I have never seen evidence that you understand the complexities of our systems of commerce at all.
September 17, 2008
11:48 a.m.
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taoistblockhead writes:
George Bush the CEO President is a failure and needs to be fired ASAP by his shareholders - We the People.
September 17, 2008
11:53 a.m.
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John_II writes:
"John II, which is it? Did the government force these financial institutions to give out unqualified loans," - MTS
Where did I suggest that? I do not understand your confusion.
September 17, 2008
11:58 a.m.
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mytwosense writes:
John II: "So what should the politicians do? They could bail out a few large private institutions and hope the public soon forgets about it. Or they can let the market adjust and suffer the economic consequences (and the economic blame game) that the public will not soon forget. Most politicians will opt for the former rather than the latter."
What I wonder is the degree to which the economic fallout would really hit the *majority* of the public. This is a research-intensive question, of course. I may embark on it if I have the energy.
September 17, 2008
noon
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jay writes:
"Democrats are just as guilty as Republicans. "
wrong john...the foundation for this problem began with mccain advisor phil gramm...and was exacerbated by the republican policies (or lack thereof) over the last 8 years.
that's not to say that dems don't deserve some of the blame....but let's not pretend that the majority doesn't lie on the shoulders of conservatives.
as far as your assertion that we're in this mess because the corporations who gave out fiscally irresponsible loans "placed too much trust in the honor and judgment of many American citizens"....no surprises there...you'll do whatever it takes to shift blame away from conservative politicians and the corporations that they're in bed with.
you're nothing if not predictable.
September 17, 2008
12:04 p.m.
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mytwosense writes:
John II, you suggested it here: "Government-backed FNMA and FHLMC warped free market principles by allowing unqualified people to buy homes they could not afford."
By the way, I am going to assume that when Freddie Mac and Fannie Mae were handed over to private management, NONE of the new execs urged Congress to include legislation that removed implicit government backing and anti-fraud measures other financial institutions were accountable to.
For that matter, were there any "free market principled" legislators who urged this?
September 17, 2008
12:05 p.m.
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John_II writes:
I don't think the failures would affect the "majority" of the public. But, in this age of economic hypochondria (see this Campos column), the slightest tick in economic numbers allows the media and demagogues to exaggerate the problem. One only needs to listen to an Obama speech to understand how statistics are used to scare voters.
September 17, 2008
12:07 p.m.
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John_II writes:
"John II, you suggested it here: "Government-backed FNMA and FHLMC warped free market principles by allowing unqualified people to buy homes they could not afford."" - MTS
That does not mean banks were forced.
September 17, 2008
12:09 p.m.
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John_II writes:
"wrong john...the foundation for this problem began with mccain advisor phil gramm..." - jay
Hmm. I'm sure there is a rational point in there somewhere.
September 17, 2008
12:12 p.m.
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SheikYurBooty writes:
The problem is, as it always is, abuse of leverage. Once the govt steps in to regulate/restrain to prevent over extension (as we are now in) then it gets accused of "hurting growth" and "hurting the economy." How many realtors, land speculators and construction interests would have had a cow if the 0 down trend were halted and something as small as 5% down were required? They would have screamed to high heaven about "govt interference" - we know the words to that song. If the govt is backing the loans, then it has every right to set standards. Don't like it? - then take your business elsewhere w/o govt insurance.
September 17, 2008
12:13 p.m.
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Ted_in_Vegas writes:
A little history lesson; the problem IS THE LACK OF FREE MARKETS!
Over the last few decades there has been a lot of pressure to make home ownership available to lower-income, higher-risk buyers. That pressure brought about reforms in the 80s and 90s, through the work of both parties. Those reforms led to the changes in the housing markets that are now collapsing. I believe that had it not been for those reforms, there would not be the housing collapse we're seeing now. In other words, we made this bed - BOTH PARTIES made this bed.
There were some who sounded the alarm years ago, J.C. Watts and John McCain come to mind, but we all chose to ignore their warnings. Too bad for us (and I just lost my home).
On the other hand, we have a group of agitators who led us to those reforms that now doom us and among those agitators is a group called ACORN. ACORN's best-known agitator/organizor? BARACK D'OHBAMA!
Thanks for the pain, D'OHbama!
September 17, 2008
12:21 p.m.
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DenverDan writes:
What responsablity does the rebublicans and the people who voted for George Bush "twice" have? None. Look at what is going on now? This is not a blue or red problem, this is a United States problem. I lean to the left, but would not have a problem voting for a republicain. All this has happened under Bush.People need to turn thier pride around and vote for who is going to get us out of this problem. McCain is not the person to do it. People need to have a open mind. Party first is not the answer. Four more years of this Economics is not the answer.
September 17, 2008
12:24 p.m.
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jay writes:
"I'm sure there is a rational point in there somewhere."
the point, john, is that you can't lay the blame for the mess we're in equally on both dem and repub shoulders.
why do we see so many conservatives running away from accountability these days?
if you're unaware of phil gramm's role in laying the groundwork for our recent financial meltdown, i advise you to do some reading.
this will be on the test in november.
September 17, 2008
12:30 p.m.
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cassidy22 writes:
Our entire economic system is based on continued growth. Sure, we have some downturns, but our economy depends on those being short, and few and far between.
We are no longer able to support constant growth, and the outcome is the downfall of large parts of our economy, even entire industries, as we are seeing right now. No one ever put any programs in place to face the idea of "what if"
What if the American economy can't continue to support growth? How can we handle it when our economy goes into a long period of contraction? It's happening now, and no one knows how to handle it. It's just band aid after band aid - no one is looking at the long term, big picture.
September 17, 2008
12:33 p.m.
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John_II writes:
"A little history lesson; the problem IS THE LACK OF FREE MARKETS!" - Ted in Vegas
Exactly. But that is not the lesson that will be learned by the public. Especially when fools like Obama talk about new programs such as increased college tuition assistance.
Obama wants the federal government to help pay (more) towards college tuition. This is the same nonsensical strategy the socialists have been trying for years. If the government gives students thousands of dollars to pay for college, do you (the socialists) think colleges will raise, lower, or keep tuitions at the same level? If the government gave everyone $5000 to spend on a new Prius, do you think the price of a Prius will rise, lower, or stay the same?
Obama's rise has caused me to seriously doubt the efficacy of democracy. Especially when any idiot over 18 can cast a vote. It makes no sense at all.
September 17, 2008
12:38 p.m.
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4gColoNative writes:
".... the reason the rich have gotten so fabulously rich in America over the past generation is because almost every change in the rules of the economic game has been designed specifically to benefit them."
Wholeheartedly agree with this! And the upper-middle class people who have put themselves in trouble with foreclosures have been trying to live above their means ... to live more like the rich.
I don't want ANY candidate tell me that they're going to lower personal income taxes for anyone! It's a smokescreen. It's like Bush administration handing out stimulus checks. It doesn't solve anything. It's pandering. The biggest bang-for-the-buck solution is going to happen with *reform* of corporate income tax structure--which in most cases wouldn't mean a lessening. And avoidance of having to perform bailouts!!
September 17, 2008
12:44 p.m.
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jay writes:
more socialism boogeyman stories, john.
haven't we gone over why those are irrelevant at best and ignorant at worst?
bush reduced the money available for college and tuition costs skyrocketed anyway.
kind of points your rhetoric in the proper bucket no?
September 17, 2008
12:54 p.m.
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SheikYurBooty writes:
Ted in Vegas: "Thanks for the pain, D'OHbama!"
Way to go - blaming your problems on others. Even if the govt opened the floodgates and let unqualified people get in over their heads doesn't mean **you** had to do it. If you lost your home and need someone to blame, suggest you look in the mirror.
September 17, 2008
12:58 p.m.
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John_II writes:
Sheik,
I did not get the impression from Ted's comment that he personally had to go through a foreclosure. I believe the "pain" he was referring to was the general economic fall-out we are all experiencing.
September 17, 2008
1:19 p.m.
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mytwosense writes:
Yes, the mighty Goliath ACORN is to blame for free marketeers regretfully losing their principles and giving out loans to the evil greedy irresponsible public.
Oh brother.
September 17, 2008
1:57 p.m.
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Conservativeslayer writes:
Thank you twosense. Ted in vegas, needs to stay in vegas. Because he has no clue what so ever. Talk about nonsense, the problem is lack of free markets. Give me a break. If I wanted to hear Republican talking points Ted, I'd listen to Druggie Limbaugh. Try thinking for yourself and then report back to us.
September 17, 2008
2:03 p.m.
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Marshdale writes:
John-II: You said "free markets work best when they fail." Work best from an intellectual standpoint maybe, but they don't work best for those who are living on their 401k's or their pension funds.
Just who will the treasury rob to bail out the next corporate giant. This is why regulations need to be in place. To soften the blow. Fine, free markets generate incredible profits, but that is not the whole picture. When competition gets to the point where there are only a couple of corporate giants running an entire industry and one fails the share of the market effected is huge. This is why Teddy Roosevelt created anti trust regulation which Hoover tried to change and look what happened.
I suppose you are so financially secure that none of this will ever effect you. I'm sure you have all of your eggs in one basket, don't you? This is the problem when you have very little competition in the market place because a few giants own it all. It's like having all eggs in one basket. This is not economics 101. This is common sense.
It's the same for industry. An industry that has such a huge percentage of the market has no reason to compete and reduce costs or invest in capital. So they are like a giant. The bigger they are the harder they fall, and they take a lot more with them.
None of this suprises me. This is how Rothschild got so powerfull. He created situations where the market would fail and swooped in and bought up all of the cheap stock that was out there. There will be people who bennefit from this greatly, but they are the ones who can handle the initial financial shock. I swear to god you conservatives worship these corporate giants. I hope you are not a Christian, because Jesus would roll over in his grave. What did Jesus do to those merchants who were profiting off of the the poor peasants in Jeruselam? Go read the Bible. I suspect this was the reason he was killed.
I'm not against making a profit, just against gouging.
John-II; Get A Grip.
September 17, 2008
2:25 p.m.
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John_II writes:
Good job, Conservativeslayer. You really slayed conservatives in your last post. I mean, that part where you referred to Rush Limbaugh as a "druggie" was just brutal. I don't know how conservatives will rebound from your blistering logic.
You know what, you got me. You actually convinced me. Capitalism is bad. Socialism is good. I am now a believer. Let's tax the rich! Yes! Tax the rich! Let's add more regulations and restrictions to business! That is the answer to our problems. Business is bad so we must tax and regulate them more.
Rush is a druggie. You slayed me Conservativeslayer. Well done! Thank you, my slayer, for showing me the errors in my thinking. I am now a believer. So, how does this work? Am I now supposed to be afraid of "climate change"? Do I get a pamphlet or a free toaster? Do I get a free copy of The Communist Manifesto? Is there a secret salute I should know about? How should I identify myself to Jews and the Hollywood type? Is there a secret hand-shake? I guess my conversion puts me in good standing with all of the hot Obama supporting chicks. That's cool. Everyone knows that hot chicks are smart. And now they'll like me because I'll have a Obama bumper sticker too! Thanks, Conservativeslayer, thanks for showing me the light. This video actually makes sense to me now: http://www.youtube.com/watch?v=ghSJsE...
All this time, I thought those idiots in that video had no idea what they were talking about. Now I get it! Rush is a druggie! It all makes sense!
September 17, 2008
2:33 p.m.
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Marshdale writes:
When it comes to being Christians and economic conservatives, you republicans are a walking contradiction. Based on everything I have read in the Bible, if Jesus would have been an economist he also would have been a socialist. Not that I favor socialism, but the conservative blood lust for profit is almost incomprehensible. It's the screw everybody else attitude. I got mine, then repent and ask for forgiveness so you can find your little place in heaven.
I wonder how James Dobson justifies his economic empire to the lord. Will spending money on larger bigger mega-churches save him? Just where in the Bible does it say you need to go to church every day. I don't think it does. I believe it only asks that you worship regularly. You don't have to set foot in a mega-church to do that.
September 17, 2008
2:34 p.m.
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John_II writes:
"I suppose you are so financially secure that none of this will ever effect you." - Marshdale
No. I am affected. My investments are down. My 401k is down. I am greatly worried about my job. I work in the financial industry. I worry that I may lose the house I recently purchased.
"I hope you are not a Christian, because Jesus would roll over in his grave. What did Jesus do to those merchants who were profiting off of the the poor peasants in Jeruselam? Go read the Bible. I suspect this was the reason he was killed." - Marshdale
Was it really necessary to bring religion into this discussion? You showed your lack of class in that comment.
"I'm not against making a profit, just against gouging." - Marshdale
What is gouging? Where have you been "gouged"? Show me a man who feels he has been gouged and I'll show you a man burdened by his own desires.
September 17, 2008
2:44 p.m.
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Marshdale writes:
Lack of class. I only point out the obvious. How can you conservatives claim the altar when your motivation is pure profit? I simply point out the contradiction. Ouch, that one hit you right in the bread basket didn't it?
September 17, 2008
2:47 p.m.
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John_II writes:
"Based on everything I have read in the Bible, if Jesus would have been an economist he also would have been a socialist. Not that I favor socialism, but the conservative blood lust for profit is almost incomprehensible. It's the screw everybody else attitude. I got mine, then repent and ask for forgiveness so you can find your little place in heaven." - Marshdale
Capitalism has done more to reduce poverty than any charity I know of.
I am really sick of these dumb liberals claiming Jesus was a socialist. Jesus asked us to share our wealth. He asked us to care for the poor. At one point, he scolded a man for not sharing his wealth with the poor. But, he did not forcefully take that man's wealth and give it to the poor. Of course, he had the power to do so. Yet, he left the decision to the rich man. That is the complete opposite of socialism.
The problem with your thinking, Marshdale, is that you associate government with charity. How do you know that I do not voluntarily donate my money to charities that help the poor and unfortunate? I give money voluntarily. Jesus did not take from the rich and redistribute to the poor. He asked us to do so voluntarily.
September 17, 2008
2:56 p.m.
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John_II writes:
"I wonder how James Dobson justifies his economic empire to the lord. Will spending money on larger bigger mega-churches save him? Just where in the Bible does it say you need to go to church every day. I don't think it does. I believe it only asks that you worship regularly. You don't have to set foot in a mega-church to do that." - Marshdale
First of all, I am a Christian who has never heard a Dobson sermon. I am not saying that I oppose Dobson. But, I think it is silly to assume that every Christian is a Dobson follower.
As far as mega-churches go, I'm not sure what your point is. Yes, Jesus did not command us to go to church everyday or to go to a mega-church. Therefore what? If some Christians like going to a "mega-church", what is so bad about that? And if they want to go to church everyday, why is that so bad? Your comments are completely off topic. You are just a typical angry secular liberal. You are emoting rather than thinking. You hate religion so you decide to bash it no matter what the topic.
September 17, 2008
3:05 p.m.
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John_II writes:
MTS,
You may have commented on this already but I am curious to hear your take on Palin. I know you plan on supporting Obama but what do you think of Palin as potentially the first female VP?
September 17, 2008
3:17 p.m.
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Marshdale writes:
I don't hate religion. I actually like it when those practicing it aren't contradicting it. I always wonder why Christians refer to the Old Testament when they need to justify something evil. They never refer to anything in the New Testament which is where Jesus is. It's always Leviticus or some other scary place in the Old Testament.
There is nothing wrong with going to a mega-church, but would it not be nice if the money they donated weekly went to an organization rather than a public service bill and was used to feed the poor and needy rather than construction of a newer bigger edifice.
September 17, 2008
4:02 p.m.
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MBR693 writes:
Jay writes:
"wrong john...the foundation for this problem began with mccain advisor phil gramm...and was exacerbated by the republican policies (or lack thereof) over the last 8 years."
"that's not to say that dems don't deserve some of the blame....but let's not pretend that the majority doesn't lie on the shoulders of conservatives."
and in another letter
"why do we see so many conservatives running away from accountability these days?"
Uhh...let's not confuse Republicans with conservatives. Make up your mind whom you are attacking here. True fiscal conservatives, whether or not Republican, have been quite unhappy with many of the fiscal policies and spending programs pushed over the last 8 years. If you're trying to make a point you need to be more precise.
September 17, 2008
4:10 p.m.
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MBR693 writes:
John_II:
Right on. The New Testament church model was an example of voluntary sharing and giving between individuals and church communities. There is not a single example of forced redistribution of wealth.
It might be fashionable today for person A to demand that the government take from person B to give to person C. Person C is fed, and person A has assuaged his guilty conscience. It's yet another thing for person A to give to give directly to person C in such a way that it costs him.
September 17, 2008
4:25 p.m.
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Bookem writes:
John II wrote: "Do I get a pamphlet or a free toaster?"
Thanks for the laugh, John. I am not going to comment one way or another on all this, but that just busted me up. I need it today, too.
Bookem
September 17, 2008
4:51 p.m.
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jay writes:
"I am affected. My investments are down. My 401k is down. I am greatly worried about my job. I work in the financial industry. I worry that I may lose the house I recently purchased."
and yet amazingly enough, john, you continue to vote against your own best interests because the republicans pull your strings on the fairy tale business.
MBR...what are you cranky about...that conservatives can't distance themselves fast enough from the policies they've supported for 50 years?
http://zfacts.com/p/318.html
nice try...but the accountability monster isn't going to be fooled by semantics.
September 17, 2008
5:01 p.m.
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FreeToChoose writes:
Dear Mr. Campos:
Your article was filled with some mathematical errors and erroneous assumptions.
FIRST, you make an assumption that the median household has been a constant, when in fact it has been a variable. Trends in divorce rates and later-in-life marriages have distorted the definition of 'household' such that it is not a comparable statistic over the 30-year time span you highlight. Single income households have, in fact, risen considerably over this period.
According to a recent Wall Street Journal article By Mr. Laffer and Mr. Moore, in 2007 “the real median income for intact families -- mother and father in the home -- rose to $78,000, an all-time high.” That is a more comparable statistic to the definition of 'median household income' as it existed in 1978.
Secondly, you make an assumption that people remain in the same quintiles of income distribution. Or, more specifically, you assume that there has been no chance for an American household to improve their lot. However, the statistics you quote do not support that either... they can't since they are incomplete. Here too, Mr Laffer and Mr Moore have compiled considerable statistics that show a high level of income mobility over the last 25 years.
For the full article at the WSJ, go to:
C:\Users\Bob\Documents\Economics & Policy Papers\New Evidence on Taxes and Income - WSJ_com.mht
It is helpful to note that many Obama supporters keep bringing up these income inequality statistics without ever qualifying the changes in the make-up of household income over these time periods or noting the advances individual groups have made along the income distribution curve. Evidence suggest Americans can still move freely across the curve and have been doing so steadily since 1983. Plus, regression analyses show the highest degree of correlation between lifetime earnings and education. Taxing the rich more won't help our kids to a better education... will it? To prove that, you would have to prove that raising tax rates will raise tax revenue AND that the increase in revenue would be spent effectively on education... but that's entirely seperate beehive of misinformation that I couldn't possibly address in 3000 words or less!
September 17, 2008
5:09 p.m.
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jay writes:
would you prefer to use real wages bob?
shall we talk about the performance of real wages under reagan/bush/bush vs. clinton?
would that be more to your liking?
somehow i doubt it.
you folks can run from the data all day long...but it's just data.
September 17, 2008
6:32 p.m.
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joggle writes:
Bmac: 'Campos – you are a liar just like most lawyers and most politicians. You play with words to mislead the uninformed and ignorant. Obama’s plan is a tax “credit” (500.00), not a tax cut, and proposes a marginal tax increase on income tax, capital gains, payroll tax, the death tax, and dividends and increasing corporate taxes – all of which will hurt the middle class as usual.'
If you will, I'm going to turn those words right back at you.
First of all, since you like brandishing the 'liar' word around, you yourself are a liar. For example, how will taxing the inheritance of estates worth more than $7 million (only 0.3% of estates) hurt the middle class? The capital gains tax would only be increased for families that make more than $250,000 per year, not exactly the middle class. And it would only be raised from 15% to 20% (the latter being the lowest rate during the Clinton years and substantially lower than the rate during the Reagan years). The capital gains tax would be eliminated on investments in small and start up firms. He's proposed a number of tax credits that many people would be able to take advantage of. If you are paying the government less in taxes then how is that not a tax cut? He plans on closing loopholes that perversely reward corporations for sending jobs overseas and will use this money to reward companies that expand or start operations here in the US.
As for McCain's plan, perhaps you should see this interview with Greenspan over the past weekend: http://www.huffingtonpost.com/2008/09...
'"Oh, by far," Greenspan said, when asked if the situation was the worst he had seen in his career. "There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system."'
'In an interview with Bloomberg Television, Greenspan argued that the country couldn't afford the tax cuts being proposed by John McCain without an equally massive reduction in spending.
"I'm not in favor of financing tax cuts with borrowed money," he said. "I always have tied tax cuts to spending." '
September 17, 2008
6:44 p.m.
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FreeToChoose writes:
Sorry, prior link was to afile on my own computer...
here's the link to the WSJ article:
http://online.wsj.com/article/SB12214...
September 17, 2008
6:48 p.m.
flaco writes:
(This comment was removed by the site staff.)
September 17, 2008
6:55 p.m.
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jay writes:
great quote from that article ftc:
"incomes fell sharply in the U.S. after the dot-com bubble burst in 2000 and still haven't fully recovered"
considering we also had 9/11...as well as the fallout from 8 years of poor fiscal policies (as of today...worse than the damage done on 9/11)...it is no wonder that real incomes have stagnated under republican rule.
September 17, 2008
7:16 p.m.
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ManginoTorreta writes:
"We the People are now We the Owners. The People's Insurance Company, formerly known as AIG, was saved for the time being from the forces of capitalism by the new Union of Republican Socialists, formerly known as the GOP."
The last time I checked, Congress was controlled by Democrats, not Republicans.
And anyone who thinks this is somehow a rebuke to the free market is living in a fantasy world where no bad things should ever happen for any reason. In a free market, the government would let these companies collapse for their own bad decisions, not bail them out (and it's going to get worse when the Big 3 automakers start coming for their handout).
The whole point of a free market is that those who perform bad business practices inevitably go under. It's the responsibility of individual citizens to inform themselves of these businesses and their respective practices, not blindly throw money at them. Otherwise, you're going to be crying the blues later on.
Proponents of the free market have never promised utopia, just that things will eventually work themselves out if allowed the opportunity. Utopias are for socialists, and so far they've completely failed to deliver on that promise because they believe people can't even wipe themselves without the government providing them with a roll of toilet paper and an instruction manual. One of the biggest reasons is statements like this one from Campos:
"Under Obama's proposed tax plan, 95 percent of American taxpayers would see their after-tax incomes increase, while the richest Americans would experience a slight decline in the staggering wealth they've accumulated during our new Gilded Age."
The left's utter hatred of anyone who's managed to be financially successful never fails to amaze. Campos' comment hearkens back to the "64 families" remark that Harold Ickes propogandized during the Depression, the paranoid notion that wealth would always remain exclusive to a few unless government played Robin Hood. It was utter hogwash, of course, but because it successfully appealed to people's envy, the philosophy has become one of the foundations of modern leftist thought.
September 17, 2008
7:20 p.m.
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mytwosense writes:
John II: "MTS,
You may have commented on this already but I am curious to hear your take on Palin. I know you plan on supporting Obama but what do you think of Palin as potentially the first female VP?"
George Bush with lipstick.
September 17, 2008
8:51 p.m.
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jay writes:
mts, i don't think that palin is george bush with lipstick...she's a lot more poorly educated and a lot more fundamentalist.
"The last time I checked, Congress was controlled by Democrats, not Republicans."
The last time I checked, if you're confused about why congressional approval ratings are low, you need to take a civics class or pick up a newspaper.
the conservatives in congress have obstructed legislation and initiatives with the support of the majority of americans...and you have the gall to whine that nothing is getting done.
wow.
the rest of your post, mangina, is filled with the type of socialism boogeyman tales that we've debunked here many times over the last months...with a few rants about the evil of oversight thrown in for good measure....before finally ending with the predictable strawman argument:
"The left's utter hatred of anyone who's managed to be financially successful never fails to amaze."
do you believe it sounds remotely reasonable to believe that half the country "hates anyone who's managed to be financially successful"?
you need to lay off the rushian class warfare bs, my little footsoldier.
September 17, 2008
9:21 p.m.
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Eli writes:
"These banks knew perfectly well that every loan created was instantly created pretend money their investment partners could stuff in their pockets. They knowingly leveraged themselves to the hilt"
I'm not sure what your logic is here, MTS. Are you saying that banks create money out of nothing to lend? Correct me if I'm misunderstanding, but that's what it sounds like.
That's not really true. Financial institutions have lending limits based on both state and federal regulations (depending if it's a state or national bank). For the applicable limits on a national bank, see 12 USC 84.
Basically, a loan to any one borrower that is not secured by collateral having a market value that is at least equal to the amount of the loan may not exceed 15% of the bank's capital and surplus.
September 17, 2008
9:43 p.m.
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ManginoTorreta writes:
"The last time I checked, if you're confused about why congressional approval ratings are low, you need to take a civics class or pick up a newspaper.
the conservatives in congress have obstructed legislation and initiatives with the support of the majority of americans...and you have the gall to whine that nothing is getting done."
First off, please provide a direct quote where I whined that "nothing is getting done". Any cursory examination of the headlines the last few days shows that anybody who actually believes in free market principles is pointing out that nothing should be done and that the government shouldn't be bailing these companies out. Both presidential candidates are trying to make people feel better by promising to get whatever bad guys they can manufacture out of all this, but whatever they are doing, it's not free-market capitalism.
And with two houses of Congress under control, the Democrats still can't get anything done? Quelle suprise. Maybe if "the most ethical Congress in history" managed to censure their own corrupt members and stop making excuses as to why they can't get anything done, they wouldn't have to blame their low ratings on "obstructionist conservatives".
the rest of your post, mangina, is filled with the type of socialism boogeyman tales that we've debunked here many times over the last months...with a few rants about the evil of oversight thrown in for good measure"
Please point out these "boogeyman tales" and where I designated oversight as evil. Oversight is one thing, but if you think that socialists aren't invested in controlling people's lives, I've a got a local public smoking ban to throw your way.
"before finally ending with the predictable strawman argument:"
So pointing out how Campos' predictable rhetoric reflects the arguments of leftists past to justify their positions is a strawman?
"do you believe it sounds remotely reasonable to believe that half the country "hates anyone who's managed to be financially successful"?
When that half of the country is proposing that they be taxed into oblivion and laments their success, what would any reasonable person think, that they are happy for them? If I told you that you didn't deserve to have so much more money than me, would you think I was congratulating you?
September 17, 2008
11:20 p.m.
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joggle writes:
YIOTA_LIVES: "especially when BO after only a couple of years in the Senate is the NUMBER #2 money recipient from the lobbyists for Fannie and Freddie."
Yes, and Merrill Lynch gave $285,000 to John McCain (http://www.opensecrets.org/orgs/topre...). What's your point or do you think that by Fannie and Freddie giving $126,000 to Obama (http://www.opensecrets.org/news/2008/...) makes him responsible for them in some way? (Obama's campaign budget is roughly $50 million per month)
Who the heck else are McCain/Palin going to blame? Just the Democrats who have only been in control of Congress for the last 2 years?
The Republicans control the judiciary, the executive and, for 6 out of the past 8 years, the legislature. It's not too much of a stretch to place a large amount of blame on them this election cycle.
As for change, how is McCain's tax plan or foreign policy different from the current administration? Can you answer that question without looking up McCain's plan online first? I sure as heck couldn't, and I watched most of the RNC convention including his speech.
September 18, 2008
1:22 a.m.
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r0ckyAurora writes:
Mr. Campos supposedly knows law, claims to know medicine (e.g. child obesity), and now economics. It’s a good thing he’s not a professor of mathematics. He should stay away from statistics, unless his intention is to use them to mislead.
Why would you pick 1978 as a beginning point? Census Bureau data shows a local maxima of household income that year (convenient to your argument), not to be met again til about 1985, and almost met (coming down) again in 1993.
You can’t say that the GDP grew 140% and the population grew 40%, so therefore, per person, the nation is twice as rich as it was then. For every $100 and 10 people then, there is $240 and 14 people now; i.e. 71% increase per person.
FreeToChoose pointed this out earlier. The jump from “households” to “per person” was subtle, but, of course, an important point in this comparison. The average household size shrunk about 9% in those 30 years, so if you adjust the median household income to “current household size”, income grew by 32%.
It seems that several of those trillions of dollars went to increased population (immigration or births) and to more single-adult households.
So GDP grew by 71%, income by 32%. So what? Why are you comparing GDP to income? Why compare apples to oranges? You could naively ask “where did those trillions go?”, or you could account for 30 years of productivity increase and wonder why it took so much income increase to produce that GDP increase.
Stay away from economics, too.
September 18, 2008
8:24 a.m.
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John_II writes:
Excellent comment, RockyAurora.
September 18, 2008
8:55 a.m.
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John_II writes:
""We want to take money [from those making over $250k] and put it back in the pocket of middle-class people,"" - Joe Biden
I wonder how many conservatives think Revolt! when they hear stuff like that. The Marxists need to be stopped in this country.
September 18, 2008
10:48 a.m.
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John_II writes:
Laissez-faire dreams? Show me laissez faire in the mortgage industry. The government ruined the mortgage industry. You'd know this if you spent more time studying the issues and less time learning economics from newspaper cartoons.
http://www.ibdeditorials.com/IBDArtic...
"Only, the risk-taking was her idea — and the idea of all the other Democrats, along with a handful of Republicans, who over the past 30 years have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans to unqualified borrowers in the name of diversity.
They were the ones who screamed — "REDLINING!" — and sent banks scurrying for cover in low-income neighborhoods, where they have been forced to lower long-held industry standards for judging creditworthiness to make the subprime loans.
If they don't comply, they are threatened with stiff penalties under the Community Reinvestment Act, or CRA, a law that forces banks to make home loans to people with poor credit risks.
No fewer than four federal banking regulatory agencies are responsible for enforcing the law. They subject lenders to racial litmus tests and issue regular report cards, the industry's dreaded "CRA rating."
The more branches that lenders put in poor neighborhoods, and the more loans they make there, the better their rating. Those lenders with low ratings can not only be fined, but also blocked from mergers and other business transactions needed to expand.
The regulation grew to monstrous proportions during the Clinton administration, obsessed as it was with multiculturalism. Amendments to the CRA in the mid-1990s dramatically raised the amount of home loans to otherwise unqualified low-income borrowers.
The revisions also allowed for the first time the securitization of CRA-regulated loans containing subprime mortgages. The changes came as radical "housing rights" groups led by ACORN lobbied for such loans. ACORN at the time was represented by a young public-interest lawyer in Chicago by the name of Barack Obama."
September 18, 2008
12:06 p.m.
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Wagthedog1001 writes:
All of this talk about socialism is hyperbole. This is a democracy and the conservatives (both parties) have used "free markets" and deregulation to get fat. They are taxing the middle class, not taxing themselves, and gambling with our money. When they lose the bet, they run to the government for help.
Now McCain is trying to run away from his lifelong love affair with deregulation. He claims he's going to clean up Washington. Well, since the S&L problems in the 80's he's been part of the problem. Anyone remember Silverado?
I don't see McCain solving much now. Time for a real change in the way our government works and doesn't work.
September 18, 2008
1:13 p.m.
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jay writes:
mangina says...after claiming he's not whining, "with two houses of Congress under control, the Democrats still can't get anything done?"
please see my quote about civics classes and newspapers.
that's your rush talking.
"Oversight is one thing, but if you think that socialists aren't invested in controlling people's lives, I've a got a local public smoking ban to throw your way."
i'm not sure if this is a strawman argument or a false dilemma.
obviously conspiracy theories about "socialists" don't hold water when you consider we can have responsible oversight....and should have. besides...do you believe not allowing companies to expose their employees to benzine and asbestos and lead to be "socialist" policies, manny?
see where i'm coming from here? this is why i always point out that the far right wing rhetoric about "socialists" and "marxists" is just empty headed parrotted rhetoric from the likes of rosen and rush.
they're not doing your grasp of the issues any favors. i urge you to stop hurting your own credibility by spouting the same talking points they are.
"So pointing out how Campos' predictable rhetoric reflects the arguments of leftists past to justify their positions is a strawman?"
nope.
it's a strawman because you set up a sham position and called it campos's.
yiota provides us with a perfect example here:
"You and your messian BO keeps pointing the blame only at the republicans but the truth hurts, especially when BO after only a couple of years in the Senate is the NUMBER #2 money recipient from the lobbyists for Fannie and Freddie."
of course i don't lay all the blame for this fiasco on the feet of the conservatives.
only the majority of it.
making his latest gaffe a great example of a strawman argument.
see how that works?
why don't you stick to debating the actual points...instead of stuff you just make up.
" Are you saying that banks create money out of nothing to lend?"
eli, sounds like once again you're a little confused.
i think you can tutor yourself here by doing a little research on how leverage ratios were foundational in the trends we've seen over the last 18 months.
rocky...if you're uncomfortable with using median household income to point out the failures of conservatives fiscal policies over the last say...30 years...would it be easier if we just used real wages?
would that solve any remaining dancing fits?
"The Marxists need to be stopped in this country."
this was john's response to repealing the tax cuts to the upper class.
well john...i hope you voted against the bush administration twice....or does wealth redistribution only qualify as such when it distributes downward?
can you smell that john?
i doubt it...one can rarely detect their own odor.
that's the smell of conservative hypocrisy.
September 18, 2008
2:08 p.m.
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Eli writes:
"eli, sounds like once again you're a little confused.
i think you can tutor yourself here by doing a little research on how leverage ratios were foundational in the trends we've seen over the last 18 months."
Two things, jay:
1. The question was not directed to you
2. You didn't answer it. The question asked was whether MTS was stating that banks were creating money out of thin air to lend to borrowers, as if there were no guidance and no regulations governing what can be given to borrowers. I may have misunderstood what MTS was saying, which was why I asked, but either way your response is not relevant.
September 18, 2008
2:19 p.m.
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jay writes:
i hope you get the information you need, eli. again...google leverage ratios and lehman and do a little edumacating.
just trying to help.
September 18, 2008
6:30 p.m.
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woodwose writes:
Campos just proved he is a clown AGAIN. Although, he converted his dollars into current terms, which comes as something of a shock to someone who has read a fair number of Campos columns, he uses "household income" as his barameter for how much worse off we all are since 1978.
One problem. The average number of people living in a "household" as declined by around a third since 1978 as birth rates have gone down and the median age of the country has gone up.
Kind of blows that whole column to hell, doesn't it Clown Compos?
Why don't you go join the circus?
September 18, 2008
7:28 p.m.
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GeorgeLillyforCongress writes:
Without getting too deep into economic, fiscal, and monetary policy, the FED has been encouraging malinvestment for years. One bubble pops, and a new one emerges for more malinvestment to pour into. A great metaphor I've heard repeated by Peter Schiff and other straightforward financial experts, is that the U.S. economy is essentially waking up to a prolonged hangover. Recessions are naturally occurring in the free market; but what our government has been doing to prevent this is bailing out banks and companies, and using other forms of intervention into the markets. And this is done with seeming good intentions, because the elected officials simply want to keep We the People from feeling the pain of a recession. If they prolong the recession, the elected officials can then be re-elected and keep passing the buck to the next generation of legislators and We the People. But what are the long term effects? Instead of navigating through a few recessions, we are being steered, headfirst, into a deep depression. Do you think those same politicians will feel the massive, hangover headache that is coming the way of We the People?
---Sean Doherty campaign manager for George “Lilly for Liberty” www.GeorgeLillyforCongress.com Running for Congress in Denver
*I've posted my two cents worth on this article. And thanks to inflation, in the time it took me to write my reply, my two cents is now only worth one cent.*
September 18, 2008
7:39 p.m.
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jay writes:
woodwose, would you prefer that campos use real wages to clearly show that conservative fiscal policies have been failures?
September 19, 2008
3:44 p.m.
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FreeToChoose writes:
Even if you use real wages, you can't assume that the average or median American has not done better [or worse] than the movement in the medians or averages would suggest. To make the case that Americans are better or worse off using median statistics, you would have to assume that the same people or households remain on the same spot of the income distribution curve