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If you have watched any of the debates so far you know that Barack Obama will be our next President. The polls clearly show Obama pulling away, and the electoral map is virtually screaming an Obama landslide.
With the worsening economy and the overall negative vibe in our nation we are hungry for…( I can’t even stomach the word anymore but you know what I am talking about.) The only thing I can compare it to is the anxiousness for something new that a high school senior feels about getting away from home.
I had anticipated that the debates would be more informative but in large part both candidates “are what I thought they were.” With the economy going down faster than NHL popularity, there is a real move toward Obama and his favorable economic policies toward the middle class and the poor. People are angry, and rightfully so at the corporate world. They feel as if they have been jipped in a system that perpetually rewards the rich and leaves them empty handed. It makes no difference if you think these sentiments are true, this is how people FEEL and that is what matters most when people vote.
With McCain sinking in the polls the only thing he can do is go dirty. He can try and link Obama to terrorism or use manipulative statements about Obama’s tax voting record. Either way, McCain is not at his best when he is going negative, it just does not fit him. It makes him come off as small and disingenuous. Not to mention that he does this creepy laugh when he throws his punches and gets a bit flustered, which leads him to calling Obama “that one.”
So mark it down folks on November 4, our new President-elect will be Barack Obama. Game over.
ryan
Filed under: politics |
matt and ryan's blog 
“they were who were thought they were”
Dennis Green reference. Awesome!
“If you want to crown them, crown them.”
I like the pace of the blog lately. We can build on this! WE CAN BUILD ON THIS!
Ah, back to random inside jokes. The blog is officially back.
Our economic situation right now is not the “crisis” it is being played up to be.
But when taxes go up it will be.
700,000 jobs lost- Check.
World wide credit freeze- Check.
Need for global interest rate cut (unprecedented)- Check.
700,000,000,000 federal bailout to keep us from Depression 2.0- Check.
Stock Market dropping 5,000 points in last year (10/07, 14,4000 10/8, 9,200)- Check.
2 trillion dollars of retirement wealth lost in last month- Check.
Yup, no crisis here, just move along folks…
Ryan, history should have it so good that 6% unemployment and a standard of living such that we all have is called a “crisis”. Did you have to kill your own food today? Or walk to a well and carry your water back in a dirty jug? I am not saying nothing needs to be done. But the sky is not falling. Recession is the price of expansion, a bill we have paid only slightly in the last twenty years.
Let that sink in. In 20 years, we have had two MILD recessions. Many large economies face crash-size problems with smaller periodicities than that. Show me any system that grows without correction, contraction, or stress….because there is none.
Equity markets that were largely fluff need to be weeded out. Overvalued assets need time to return to their realistic value. Bundles need to be unbundled. The whole WORLD’s economy has to adjust to so many players on the field all of a sudden. And the speed of information. And the reliability of information.
And bad government policy.
Which is about to get worse.
We are at a unique time in history…never have so many people been so prosperous. So no, not a crisis; rather, the price of worldwide prosperity. Growth will return. Bargains will be found. Investments will be made. Opportunity will increase.
(Before you flame all over that – read Paul Collier’s “The Bottom Billion” for a real picture of the world economy, and who is really rich and poor).
Again, no crisis. No second great depression. The sky is not falling.
Yet.
Addressing the “2 trillion dollars of retirement wealth lost”:
Even in business school it amazes me that no one gets the nature of equity. The thing is, it is not real money. It is pretend fairy money, all the way until it is cashed out. Until you have that cash in your hand, you do not have one dollar more than the original amount you put in.
Equity, whether it be in a house, or a stock, or whatever, is simply the wager that at some future date, someone with less judgement or a moment of desperation, will pay more for it than you did.
That’s it. That’s all it is. Until it is cashed out.
So it wasn’t real “wealth” that disappeared. It was hoped-for or promised wealth, which, sadly, is not actual wealth. Once it becomes actual wealth, it ceases to be equity and turns into cash.
Want to make billions? Figure out a better retirement system than one founded on equity, cause that one sucks pretty bad.
The only thing on that list that is of real concern economically (not socially) is the credit freeze. Hopefully, easing mark-to-market will help with a great deal of that problem.
As for the global interest rate…I am not sure yet that that is bad. After all, with the spread of prosperity has come the reality of 24/7 markets in operation, and the ownership of everywhich currency by everywhich country and everywhich investor. It makes some sense that the globalization of assets would require the globalization of interest rates. (Not saying I’m for it…not sure either way yet).
One last thought:
There is an unspoken expectation that our economy will always grow, that recession of any kind is bad, and that one day, everyone everywhere will have a high-paying job.
Does this mindset have its roots in:
a. greedy sinfulness, where man wants it to be easy and sunny all the time, or;
b. the Kingdom of heaven is here now, where man honestly believes that we can solve the social and economic problems and bring about the complete Kingdom of God right where we are, or;
c. something else that has not occured to me. Because from a rational standpoint, that expectation, while universal, is also obviously irrational.
Thanks for schooling me Adam, I always love your input. Your are a hundred percent right when things are put in a global, macro-historical perspective.
Let’s say…75% right. The truly scary thing is that my school is top-100 world…faculty top-30 world…and NO ONE agrees, nor knows, what is happening, why it happened, nor what will happen. My opinion counts for about 10-20% of the people I talk to. Hysterics count for about 10-20%. The rest are worried that they won’t be able to retire and have the freedom to do jack squat until they die.
Glad this blog is back…is it?
I enjoy your perspectives, Adam and Ryan. I love where you went with this Adam.
“There is an unspoken expectation that our economy will always grow, that recession of any kind is bad, and that one day, everyone everywhere will have a high-paying job.Does this mindset have its roots in:
a. greedy sinfulness, where man wants it to be easy and sunny all the time…” This is what people need to hear.
Thanks Chelsea. I’d love to hear your thoughts on the topic…
I think it is a bit of both. There is a growing movement among young believers to turn the state into the church, where taxes become the tithes and offerings, and the elected officials become the priests and elders. It is the anti-Catholocism (where the church functioned largely as the state, or at least exerted inappropriate influence over the state), whereby the state becomes the church.
It grows from the “Kingdom of God is here, now” movement, in my opinion. Just as Evangelicals took the “it will all burn anyway” viewpoint to dangerous extremes, so is this current movement taking theirs.
And greedy sinfulness, too!
We may not be headed for the end of the USA but its a find it wrong to trivialize the suffering that people are facing and are going to face.
Adam I do not know you and respect that you are wise about business stuff, but academics and theorists are usually wrong about this stuff. Look at Bernake leading the Reserve right now. The guys does not really know how to run the Reserve because he belongs back at Princeton being an economic professor. So let him go back to Princeton and continue to study the last great Depression, and bring in someone more qualified with actual Wall Street experience, to keep us from going into another one.
Thanks for setting the record straight Adam! Not many can do it quite as eloquently as you just did.
Brian, thanks for your reply. I would agree with you on more than you might think.
I would also offer, by the way, that it was your “Wall Street experience” folks that created the tools that got us in this mess. You are right about academics, though. One of my points is that NO ONE knows what is going on or why. Throwing money at it right away is a stopgap at best. And keep in mind, the average intelligence of a group of legislators is lower than that of you and your friends. Could you and your friends reach a viable solution in less than a week? So how then will the legislators? THAT is a crisis, Brian.
And I would ask where you see me trivializing. What I said was that the sky will not fall, and that the consequences will not be as severe as what people elsewhere, and throughout history, have lived with every day. Unemployed? Having to work after age 65? Worse things could happen, and do. We’ll survive, and the world economy will continue to prosper after it adjusts.
I am certainly wrong about some things…but not about everything. A perspective of hysteria and fear IS wrong about everything, almost always. I go after Ryan because I know he is capable of greater rationality and objectivity, two places where productive solutions can be sought after.
Brian – what ideas do you have? What do you see the problem as being (again, NO ONE totally agrees on even this)? How would you address what is going on?
An open letter to Adam H:
Adam, I usually agree with most of what you say. But I have to bring something up. I remember sitting in Einstein Bagels with you prior to the start of the war in Iraq, and hearing you say that we shouldn’t wait for the UN, because the UN is made up of small, irrelevant countries, non of which should have a stake in directing America’s policies. But even our own allies had reservations. “We are the most powerful nation in the world — economically, politically, and militarily — and we are likely to remain so, for decades ahead, but we are not omniscient. If we cannot persuade other nations, with similar interests and similar values, of the merits of the proposed use of that power, we should not proceed unilaterally..” That was a quote from Robert McNamara’s movie. His point cuts through the heart of all arguing.
You said, “Our economic situation right now is not the “crisis” it is being played up to be.” To believe that, you have to believe in an insane ideological conspiracy. I just can’t be that cynical. What do you have investing in ignoring what is happening? I don’t understand.
Whew! DOW is down another 680 points!! That makes it over a 40% drop in one year, unbelievable.
And while I agree in principle about equity with you Adam, when 40% of the economy is wiped away that is scary. And to think we have not even see the total collapse as the commercial loan defaults are just beginning.
Not to mention countries in Europe are virtually nationalizing the banking systems and seeing their currencies collapse. So while I may not hunt for my dinner tonight, if this keeps up, a lot of us could be standing in line for it…
One more thing Adam. Create a standard or criteria by which a “crisis” can be gauged. If a “crisis” is hunting for your own food, then you are right, we are not in a crisis. But if a crisis consist of having 40% of the economic being wiped out (as Ryan put it), having people’s retirement funds evaporate into thin air, and fighting a 10 Billion-a-month war in another country while the economy seems to be spiraling downward…then we are in a crisis.
When would it be adequate to label what is happening a “crisis.” By the standards of WWII, Iraq is not a war. But the funny thing is that it is a war, just not in comparison to the magnitude of WWII.
Well, one last thing. More than anything, I want you to know that if there is anyone worthwhile to argue against it is Adam H. And it is interesting to read about Ryan and Matt’s opinions on these current issues.
So, Adam, if you feel like I am attaching you, we can just arm wrestle, and settle this matter like real men.
By the way, all the grammatical errors are due to the fact that I am typing English on a Spanish keyboard……
There…
Okay, you win, it is because I went to UNLV and I can’t spell..
Jenna, you said:
“Thanks for setting the record straight Adam!”
Not only is that I very close-minded statement, but also an inaccurate picture of what Adam was trying to do.
No one on this blog is trying to “set the record straight,” especially when opinion are more prevalent than facts. Rather, what is going on in this post and comments is a dialogue over politics, theology and culture. I would like to hope that Adam, Ryan and Will learn and grow as much as I do from these discussions. What I appreciate so much is the commenter’s (especially Adam) willingness to ask questions (mostly clarifiers) of the other commenters. I grow because I am not trying to “set the record straight.”
Will, I am still pissed at you, but glad to have you back in these discussions. It wouldn’t be the same without you commenting 4 times in a row, each time saying, “one more thing.”
Adam, really liked your theocracy comments and the theory that they are in reaction to the “everything is going to burn” idea. There is much to think about and chew on in that respect.
We can build on this! WE CAN BUILD ON THIS!
Matt, maybe it was a poor choice of words, but Adam is offering a perspective that you will never get from CNN, MSNBC, CBS News, or just about any other popular source of information out there. I appreciate that he is sharing more than just the one side that we hear about from the media, and that it’s coming from a logical perspective that has been well thought out.
Matt and Jenna, I like both of you so you guys need to hug and makeup, that is what Vicky would want.
Adam, I will get back to you tomorrow once we are down in the 7,000’s maybe I will find a way to short these stocks and profit off all the fear and massive sell off.
Jenna,
Here is an exhaustive list of my political sources:
Drudge Report (right oriented)
Vicky (right oriented)
Ryan (moderate)
Adam’s comments (RIGHT oriented)
Debates (subjective)
I really cannot speak as to what we “hear” from the media because I would rather babysit for Britney Spears before watching or listening to political shows.
On that note:, does anyone think Ryan is sharing what we hear on the media?
I honestly don’t know if he is or not. I assumed he wasn’t and that Adam and he were discussing their particular views.
I understand that you think this blog is a political liberal outpost, but I think these blogs we wrote might speak something very different:
Obama and Abortion
I’m anti-Obama
and my favorite: A Response to Ryan
My main point is this: were you responding to CNN, MSNBC, CBS News, or this blog? I was under the impression that we were having a dialogue of sides that you don’t get from the media, but perhaps it was simply due to my ignorance of the political media.
Just FYI. Ryan’s blog post is very inline with the media at this moment. Mainly in declaring Obama the winner before an election has taken place:)
Matt,
Is Drudge really the only news source you read?
I appreciate your list, but my response to Adam was based on his comments from Ryan’s post. To address your main point…..I am so frustrated with the media at the moment, so I am certain that some of my response was based on that frustration. However, I was responding to the blog also. I think it’s important to dig a little deeper than what we are being told. Adam has done that and has articulated it well and I was just giving him props (can’t believe I just wrote props, but I couldn’t think of a better word).
and….I don’t think that this blog is a political liberal outpost, if it were, I wouldn’t enjoy reading it….and I do enjoy reading it 🙂
Jenna, I see what you are saying. Adam’s arguments are definitely not getting circulating on CNN or MSNBC.
Thanks Jenna for your input. Unfortunately we’re going to have to ban you from making further comments on the blog. Not because of your perspective and disagreements with Ryan, or even support of Adam. No, you are hereby banned from the blog for using the term “props.” I hope you understand that will cannot allow such content. We have an image to uphold.
🙂
Okay here goes.
I am not responding to mainstream media, they usually do not pick up on the financial news until chaos has ensued. In fact when the normal average guy is aware of the stock market that is a big problem. I read the WSJ, listen to Paulson who used to be the CEO of Goldman Sachs, and sometimes even crazy Jim Cramer on CNBC.
What most people do not realize is that the reason the stock market is collapsing is largely because of fear. So when the average person watches Couric, Gibson, or Williams and hears the market is collapsing they react and decide to pull their money out. So what happens then? Well Mutual and Hedge Funds do not have cash on hand, and they have to sell stock in order to give the money back to their clients. What does this mean? Well it means that lots of good companies that are very profitable and with great balance sheets, get over-sold. So in are market right now ALL stocks go down, even the good ones, because fear is king. So in large part the people to blame right now for the market crash is “Joe six pack.” Because when he takes he money out and the hedge funds and mutual funds have to return money to their clients THEN THERE ARE NO BUYERS.
Vicky- I am by no means calling the election a month early because I gleefully want to see Obama win (still undecided) but because I can see the hand writing on the wall. Even the most passionate sports fan can sometimes tell that their team is not very good and another is better, denying that, and the objective facts, only makes you look absurd. It does not take a political scientist to tell you that people vote based on how they feel. And the conservative view (which I do think has some merit) of “well at least your not hunting for your dinner tonight and rescission are cyclical and good for the economy,” does not play well on the stump or on the debate stage. Rather, telling people that you are going to tax those making 250,000 a year or more and give stuff to the poor goes over really well in times of economic crisis.
Vicky just go look at any of the electoral map previews that are out there. Obama is set up right now that he virtually has to win just one or two of the nine states that are still in play! Obama is putting bedrock Republican states in play that have not so in decades, such as Indiana, North Carolina, and even Virgina. These are tremendous advantages and points to an Obama electoral landslide. Obama is last year’s Patriots and there is no way he could los… wait a minute…
Ryan, I totally agree with what you are saying just 2 points….
Bush was behind by more at this point than McCain in popular and electoral votes
and
UNLV beat Arizona State
The game isn’t over until it’s over, sometimes the down team surprises you which I why you never bet against your team even if it seems unbeatable:)
Good points Vicky, something radical could happen before 11/4 to change the race. Truth is though, that Arizona State was vastly overrated and the UNLV upset was not really as big as we thought it was. And also SNL and viral video seems to be having a bigger impact on this election than any of us realize, and that does not bode well for McCain.
And on a last order of business I want to enter into the record the phrase, “well at least your not hunting for your dinner tonight” as a catch all for people that are complaining or have lost perspective! And also as the worst possible campaign slogan of all time. I am going to email McCain right now and propose it.
32 Responses in two days damn!!!!
This getting to be one popular blog. Just got off of work I am too tired to write a lengthy response. Good guys
You said, “Our economic situation right now is not the “crisis” it is being played up to be.” To believe that, you have to believe in an insane ideological conspiracy. I just can’t be that cynical. What do you have investing in ignoring what is happening? I don’t understand.
WILL! Man, I have to go all loony-conservative to get a rise out of you anymore!
How about this? CRISIS= something bad that happens, that shouldn’t have happened.
NOT a crisis= something bad that happens, that needs to happen in order to get to better things.
Somehow it is perceived that I am glad the DOW average is going down…that equity is evaporating…that people will have to work harder during retirement…that jobs have been lost.
Let me be clear: I wish we could keep going on forever with our have-it-now/never worry/let someone else work for me/put it on a credit card/values go up forever economy. I wish.
I wish, but really, didn’t we all know: credit card bills come due…ARMs balloon…stocks are volatile…rising wages leads to rising prices leads to rising wages leads to rising prices…Fed can’t lower rates forever…houses would one day be totally unaffordable ($500,000+ 2 b/1 ba homes?!?)…tech sector would one day have to show actual profits…come on, you could put stuff in here too.
CRISIS= our economy and psychology as a nation have been sound all along, but one mistake tripped us up, one person made a bad decision, one event led us astray.
NOT a crisis= this HAS to happen. We HAVE to endure this. The reset button is being hit for our generation. As people, we could get stronger. The long term consequences could be bright. We could learn from this.
But we have been spoon-fed fear. We have been told that someone else will solve our problems. We are on the brink of handing over our opportunity to a group of people (not just a Presidential candidate – the whole government, R and D alike) who care nothing for us. They don’t have my or your best interests in mind. We have come to rely on a “safety net”. What happened to friends and family taking care of one another? Gone, baby, gone. Give me mine, cause that’s just easier. Is safety worth the price?
I look ahead and think of what kind of world I want my kids to live in. Do I want a world where they line up for their checks when times are hard? Or would I rather they lean on their communities while they shoulder their burdens and take advantage of implicit opportunities? Sadly, though, I know they will experience that kind of world only in the pages of their history books.
So, Will, hard times? YES. Hard work? YES. Worst thing I could imagine? Not by a long shot.
And let me add…NO ONE knows what is going on right now. Not the “experts”. Not the journalists. Not the economists. NO ONE.
Pay attention, think clearly, and you may just find a lot of opportunity coming your way, and fast. Seriously.
Adam,
First I just want to second what you say about economic opportunity being very ripe in the near future. As Warren Buffet is famous for saying, “A recession is really a garage sale for the smart/wealthy.”
Also, I was just wondering if you are a Ron Paul economic guy? As far as getting back on the gold standard and philosophy of credit and debt, just curious.
No, not a Ron Paul guy. But, just because a man is crazy, doesn’t mean that he doesn’t have the germs of good ideas. I mean, we may see a resurgence of a majority-cash economy in the near future, which won’t be a bad thing in my opinion. You have the cash, you buy what you need/want. You don’t…well, then you wait until you do.
I bet that we see luxuries like cable TV and cell phone packages, as well as (damn it) high speed internet, be among the first things to take a hit in the next year. We think these things necessary, but they aren’t as important as groceries. What else do you think will go?
Credit is fine, if your personal account can pay it back in reasonable time. But gone are the days when banks and businesses figure a certain percentage of clients to be a loss and budget accordingly. Those people will simply not get loans or credit (at least until enough time has gone by that we forget this lesson).
But on a more personal note than simply outcomes and investment opportunities…there will be prime opportunities for caring for others coming really soon. Once the government gets serious about taxing us out of a recession (which is a terrible idea, but what else can they do? The interest rates can’t go much lower), we will be able to do so much for those that can’t find work etc. Hard times may come, but so much the better for acts of righteousness.
Again to Will’s point about defining “crisis”…read this, and come back and tell me that what is happening in the financial markets might not be a “maunfactured crisis”?
http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html
This article outlines the “Cloward-Piven Strategy”, a well-known (to radicals) plan to overwhelm government systems in order to cause them to break down. It also details Obama’s ties to that strategy.
I never thought I would find myself longing for Bill Clinton, or Mike Huckabee, hell, any Arkansas politician (Hillary is from Illinois too)!
AT says, “By crisis, we mean a publicly visible disruption in some institutional sphere. Crisis can occur spontaneously (e.g., riots) or as the intended result of tactics of demonstration and protest which either generate institutional disruption or bring unrecognized disruption to public attention.”
And it sounds alarming and somewhat conspiratorial. It just sounds too conspiratorial to me. Tying Obama to the “Cloward-Piven Strategy” just sounds too conspiratorial. To believe that you would have to believe that he controls so much more than he does. I’m not ready to label Obama as a god who can single-handily make capitalism collapse or burden its institutions to the point of collapse, thus forwarding his “socialists” views.
Also, AT is a conservative, right-winged magazine, who is not tax-exempted because it “reserves the right to be partisan.” I know, everything is tainted by bias. I know, I know…
– Will
“Tying Obama to the “Cloward-Piven Strategy” just sounds too conspiratorial. To believe that you would have to believe that he controls so much more than he does.”
I agree, believe me. But he doesn’t have to be “godlike”, he just has to be on board with a larger movement, which I think he is. All he ahs to do is provide the face for a movement. Is that still too conspiratorial?
Your earlier comment reminded me of Homer Simpson: “Well, everything sounds bad if you REMEMBER it!”
One more thing, I’ve been thinking about this a lot today (which sucks during midterms):
I emphatically do NOT think that Obama is some kind of “evil mastermind”. I don’t think he has plans for world domination, nor is he a part of a cartel of string-pulling, backroom-dealing types.
But Will: would you agree that there is an influential network of radical thinkers at work right now? Say, at the universities and editorial pages, for starters?
And while certainly not their mastermind, could Obama be sympathetic to their cause/s? Odds of this are at LEAST even based simply on his past occupations and associations.
That’s as far down the conspiracy road as I am willing to go. BAD=arm wrestling Will. WORSE=handing my political sovereignty over to some radical douche.
“WORSE=handing my political sovereignty over to some radical douche.”
Like an incumbent Palin in 4-8 years? Oh but don’t worry, she’ll be up against Clinton. Awesome!
Awesome= Palin v. Clinton.
WAY! MORE! AWESOME!= Clinton v. Obama II.
(And Palin is after my sovereignty? How could she be, if she is a pandering idiot?)
“Would you agree that there is an influential network of radical thinkers at work right now? Say, at the universities and editorial pages, for starters?”
Isn’t there always a network of radical thinkers at work?
Adam, one more thing.
The “Founding Fathers” were a network of radical thinkers.
Lincoln could probably fit the mold of a radical thinker.
MLK was a radical thinker.
Christ was a radical thinker (I had to bust that out).
Anyone who challenges the status quo is radical.
But Adam, what is it that you are seeing in Barack Obama that is making you think this? Send me some links if you have time….
– Will
I’ll round up some links for you, and send them to you personally.
And come on, you know EXACTLY what I mean by “radical”. Not someone that challenges status quo, or works for beneficial change. Someone that destroys people and institutions, simply out of a need to destroy. Not constructive, but someone that trades one slavery for another, one tyranny for another. Someone that repudiates what is “good” for the sake of the “greater good”.
McCain’s opening line just now in the debate, “Americans are hurting and the are angry.” Saying they are angry because they are innocent victims of corporate greed. Well the pandering has begun and real leadership is off the table. I sure hope we can do better than that.
Moderator: What specifically will you cut from the Federal budget?
Obama: We need to get going on independent energy to get this economy going.
McCain: something about the Great Depression. Then more stuff about earmarks…
I hope you do not answer questions from your spouse this way.
Ryan,
You are so blatantly trying to get this post over the 50 comment mark. This is blatant self-pandering.
YES WE CAN!! YES WE CAN!!
Pander away. I am intrigued. May I subscribe to your newsletter?
These last few comments were Brett Favre to your Michael Strahan.
adam –
you had some good thoughts near the top, so i told myself that when you said, “there is no crisis,” that you were saying that it can take a while for the macro economic issues to filter down and be realized in a practical in your face way by Joe-American. Similar to the crash of ’29 when it took until ’31 for wages to start dropping, and soon after people hunting for their own food.
but then there was that link to an article on Obama’s economic planning. i thought i was going to get directed to The Economist or something. don’t tell me you actually read the drivel that the link pointed to! I wouldn’t be surprised if that was written by manny ramierez (he’s gotta find something to do since no one in their right mind is going to pick him up demanding 6 yrs for $150M).
So Brent…what exactly about it was “drivel”? The fact that Obama has displayed a pattern of having associates that work to foment such a crisis; or the fact that EVERYONE knew this crisis was coming, and either did nothing, or in the case of many leading Dems, openly opposed action?
You missed the part where I said that I don’t think Obama is some kind of evil mastermind. I don’t even think there is a conspiracy. What I do think is that we are starting to see the fruits of intentional as well as ignorant neglect of sound economic principles, and that the case can be made, and strongly, that quite a few of Obama’s past advisors and mentors would have desired to see just such a thinig happen.
Prove me wrong. Please God prove me wrong.
(I am not holding my breath.)
by “drivel” i was speaking more about the quality of the piece. two sentences on economics somehow ballooned into a dissertation on the candidates activist ties and crisis conspiracy theories. the writing level and partisan bias (in that order) are not reflective of a credible journalistic source (at least the ny times is readable). i loved the flow-chart.
i wholeheartedly agree that we are reaping what we sow, in this case an economic standpoint. for some reason there are those that are convinced that we have grown as a people, that markets are different, etc (at least that’s the argument that got clinton to abolish the glass-steegal act that got us in this mess – full disclosure, it was backed by the full power of the republican party). unfortunately we just keep going around the cul de sac of human selfishness, greed, and general depravity.
It was heartening to read that paul volcker has joined the obama camp as a senior economic advisor. the more obama distances himself from robert rubin (he was a major player in convincing clinton to sign the law above).
I just can’t believe Brent Williams reads my blog, let alone is providing excellent comments on it. That just made my day!
“the writing level and partisan bias”
I await your analysis of one single media outlet of which this statement is not reflective. So CNN’s or CBS’s bias is somehow better? Of course, if that is your bubble, it would make sense to you.
The problem is not as much full disclosure as you think it is. Even disclosing the details of these financials would mean nothing to nearly anyone. Most Wall Street people, as I have heard, don’t really know how the products they’ve been selling, really work. How has transparency of campaign financing workerd out lately? Or how about food labels? I’m thinking of all the less-obese people I’d see if there weren’t so many fat people in the way. Waste. Of. Legislation.
The problem in the greatest part has been the Community Reinvestment Act, which has forced banks and lending institutions (and in some cases, not forced but justified) to lend to customers who otherwise should not qualify for a mortgage. All, of course, in the name of “fairness”. Guess what? Fairness doesn’t work as well as merit does in the financial world.
And as for your analysis of the link…it requires less effort for me to connect the dots from Obama to radicalism than it does for you to connect the dots from Obama to statesman deserving of the Presidency.
And, as I have thought about it, your above analysis of my previous posts is way off. I did not mean anything about two years from now. I mean right now, the word crisis has been hijacked.
How many people have cable, cell phone, and Internet?
How many people have more than one car?
How many people use machines to wash AND dry their laundry?
How many people have a laptop and a desktop computer?
How many people ate three full meals today? How many of those meals were prepared by others?
How many people drank something other than water?
How many people have pets? Of those, how many spend $100 or more on a vet visit?
How many people have money in savings?
I could go on. My point is, every one of those things is a luxury. As is continuous employment. As is retirement savings. Those things are not birthrights; they are blessings. To not have them is not a crisis. To have to work hard for them shouldn’t cause a whole country so much wailing and nashing of teeth.
THAT is the point I was making, not that in two years we will be hunting for food. Things are not like they were in 1929-1931, and you know that.
Dude, how did you know I spent $100 on a vet visit yesterday? Seriously I did.
“THAT is the point I was making, not that in two years we will be hunting for food. Things are not like they were in 1929-1931, and you know that.”
This, however, is a straw man attack on the idea of a crisis. If we know better than we did then, then crisis becomes anything that could lead to that. By making lesser issues (that have the ability to turn into the crisis of 1929-1931) what we deem to be a crisis, we protect ourselves from what you consider to be a real crisis. Also, people couldn’t use credit cards and other means to pay the rent and mortgage then. So, while you mention that things are not like they were in 1929-1931, you also still measure crisis in comparison to 1929-1931. Things are very different, crisis looks very different.
A crisis when I was 7 is different than a crisis when I was 12, 18, 25, etc. Not to mention the varying levels of crisis that can be had. You keep arguing we are not is a crisis based on a fixed definition, when a crisis is a) not fixed, and b) subjective.
If you want to make an argument that the 1929-1931 version of us would kick our ass for calling this a crisis, then fine. But not many of us are living in that reality. You want to argue the etymology of the word, fine, but that’s not the point. If your point is that we have many luxuries and shouldn’t be freaking out as much, cool. But I think your fight over the meaning of “crisis” has even gotten you off your point.
The term crisis is subjective. Get over it.
“Get over it.” Dude, harsh or not, can’t tell. Oh well.
And I wasn’t trying to repeat myself; Brent was totally misrepresenting my point. I was contrasting with his simplification.
But how does the subjective meaning of the word get me off point?
“By making lesser issues (that have the ability to turn into the crisis of 1929-1931) what we deem to be a crisis, we protect ourselves from what you consider to be a real crisis.”
That’s what I said, right? That so many lesser issues are being called “crisis”? That doing so makes the word lose its meaning?
And that doing so lessens vigilance for real, actual crises.
adam
it is fairly easy to list off media outlets that have a higher level of craftsmanship than the article you linked to (CNN and CBS are infotainment; no much regard for either). the bias factor was also very high for that particular article. i would suggest The Economist; high caliber writing and many well-balanced articles.
as for full disclosure, i was pointing out that both parties were culpable – clinton signed the bill into law, but it was the republicans that created and pushed through the legislation.
CRA has actually had little to do with the current financial crisis (not an endorsement of the program). after glass-steegall was repealed, investment banks could securitize and sell packages of mortgage loans. their success (due primarily to the fact that they had the name lehman brothers, etc stamped on them) created massive demand for mortgages. loan originators like countrywide and liberty mutual lined up the vast majority of sub-prime loans for the investment banks, and as they were not banks they did not have to comply with CRA (these and may other institutions are now defunct). also note that the root problem for fannie and freddie was not CRA but the housing and urban development act. to sum, the repeal of glass-steegall and the lack of oversight in mortgage lending are the root of our current issues (plenty more, but that’ll do for now).
you are too quick to construe that because i do not hold a high opinion of the article you linked to that i support obama for president.
my comments regarding the definition of crisis were simply to show that just because Joe-American is not being struck in the face with financial crisis means very little. it is the root of the crisis that i am concerned with. now as in ’29 major events precipitated a crisis with far-reaching affects. do you define the start of the crisis by when Joe-American is forced to hunt for food (’34), or when the original events played out (’29)? my definition is definitely with the former. and if this time around we don’t have to deal with a depression (we’ll see if $2 trillion in global government intervention stave’s off disaster), very few will think back to those that worked hard to stop-gap the crisis. hopefully in all the toil, they put together a few good oversight programs.
you are correct that american’s are the aristocrat’s of the world, basking in luxury while hardly realizing or appreciating the concept. hopefully we and the ignorant surrounding us won’t be forced into learning the fact the hard way.
that is what i set out to do today matt. i set out to make your day.
i actually got to your blog through a six-degrees of bill simmons search engine. you are truly aligned with the great ones my friend.
Brent – your presence makes this blog even more interesting. Matt seems to hold you in very high regard…I can see why.
Issues of craftsmanship: no argument from me. But poor form doesn’t discount information conveyed. I’d wait for you to go search CNN or CBS archives for anything linking Obama to pracitioners of Cloward-Piven…but we all have lives, so why wait that long?
Glass-Steagal vs. CRA: certainly G-S played a part in what happened. But the reason I think CRA is a bigger deal is that G-S opened the door for banks to make riskier loans, but CRA pushed them through it. Even greedy bastards have to think about self-interest, and would *in the majority of cases* stop short of loans that were to their obvious detriment. CRA, on the other hand, gave the government AND advocacy groups (including ACORN) the ability to force banks to make loans that were to the banks’ detriment. Not that the banks minded after a while, when they found they could pass the bill.
So G-S allowed banks to make risky loans; CRA forced banks to make risky loans.
It bears note that both actions were well-meant: G-S attempted to *lower* risk (so they say) by allowing banks to diversify (including securitized assets). CRA was intended to get more people into homes, and provide some degree of transparency in the lending industry. Yay for Congress.
My assumption of your political stance: you’re right, poor form on my behalf. Withdrawn.
upon further reading of the article, i noticed that ACORN pushed for the approval of the securitization of sub-prime loans quoted from an IBD article). i had not realized that and it truly is a major point contributing to the mess we are in (far more so than banks being forced to comply with CRA, as stated above most loans were going through without any documentation anyway). however, without the glass-steegall repeal, investment banks and their massive leverage ability would not have been able to get at them. the sub-prime crisis was just the vehicle that exposed what a poor decision it was to repeal glass-steegall. given time the investment banks would have found another vehicle to bring us to the brink. i would still put the glass-steegall as the major starting point that led us to today.
Fair enough, and you may be right. As I’ve said, there is obviously a great deal of disagreement about the whole mess.
Are you saying that one way or another we would have come to the mess in time? If so, I would agree, although maybe not for the same reasons. I think the financial cycle necessarily goes through periods of conservatism followed by lowering caution, followed by optimism, followed by outright greed…and back to conservatism (not of the political type) when greed reaps its consequences.
I found out the other day that a whole field of “behavioral finance” exists. It sounds fascinating, and looks to predict these very occurences (along with other phenomenon, obviously) based on observed human behavior.
i would definitely agree with your financial cycle. it seems too much to ask that we learn from past mistakes. with the repeal of glass-steegall, we were bound to end up driving off the cliff sooner than later. even without the glass-steegall repeal, the securitization of sub-prime loans could have brought things down, but it would have taken much longer to permeate the global system to the extent that currently exists (a very shaky conjecture, but it fits in the financial cycle we agree on!).
don’t tell any of your economics profs that you are looking into behavioral finance (or behavioral economics)! as most are of the normative school (everything works by our perfect models) they don’t tend to like the fact that humans don’t always respond to incentive the way their perfect models predict. personally i think you need to have tension between the two – you need to have models based on ideal situations but mainly for a standard/point of reference to compare with reality. sound direction can then be taken to bring reality closer to the ideal (if the process were only that easy).
i would highly suggest “Fooled By Randomness” as a great overview of behavioral economics applied to financial markets. it is more a primer on the limitations of normative economic models, but it brings up behavioral economic topics a lot and introduces many great minds contributing to the field. it is the only book that, upon completion, i simply flipped back to the first page and started reading over again. very well written. an excellent commentary.
a last note on G-S; repealing it was sold as less risky due to the fact that larger firms would be less likely to fail (fairly inept in hindsight). the real problem with repealing G-S was that commercial banks could once again be involved in investment banking (for the first time since the depression). the basic difference is simply the risk level and use of leverage. interesting that it is unstable levels of leverage that constantly comes back to bite us, crash of ’29, S&L crash of ’89, sub-prime crash. all were precipitated by the government allowing too much leverage.
What Brent said.
“interesting that it is unstable levels of leverage that constantly comes back to bite us, crash of ‘29, S&L crash of ‘89, sub-prime crash. all were precipitated by the government allowing too much leverage.”
I was reading through Andrew Mellon’s biography (who was Treasury Secretary under Hoover, and would not allow a government bailout, so that the financial systems would purge bad assets, which many think led to the deepening of the Depression…although I don’t think that is the only factor)…anyway, Mellon’s family were bankers, and the book describes how prior to the establishment of the Federal Reserve in 1913, the financial markets would crash catastrophically about every 12-15 years.
Think about that: three major, major financial meltdowns, just in my lifetime. The main reason had to do with exactly that; too leveraged by loans that were too risky and speculative.
Will do on the reading recommendation. One of these days. My reading list is hefty right now! (What with this blog and all…)
http://hillbuzz.wordpress.com/2008/10/24/hey-america-wake-up/
Just sayin’.
And if you haven’t been reading the PUMA sites, you have been depriving yourselves of this election’s single greatest phenomenon.
Hillary 2012!