The Corruption of America

[Perchoutofwater]

This is fairly long, but a pretty good essay outlining the problems we face and how we got here. It takes shots at Dems, the GOP, unions, and corporations.

[CaP'N GRuNGe]

This Stansberry guy has been talked about before here and shown to be an alarmist and oppurtunist, if I'm thinking of the right guy.

[CaP'N GRuNGe]

You want Washington corruption? Read this:

 

http://www.nationalreview.com/articles/286...lliamson?page=1

[wiegie]

I read up to the point where he started talking about GDP adjusted by "sound money" and then I realized he is likely a nutjob and wasn't worth my time.

[wiegie]

RE: Corruption

Stansberry was successfully sued for fraud in 2003 by the U.S. Securities and Exchange Commission for a "scheme to defraud public investors by disseminating false information in several Internet newsletters".[3]

 

In 2007, he and his investment firm, then called "Pirate Investor," now known as "Stansberry & Associates," were ordered by a US District Court to pay $1.5 million in restitution and civil penalties, the court stating "Stansberry's conduct undoubtedly involved deliberate fraud, making statements that he knew to be false."

--wikipedia: http://en.wikipedia.org/wiki/Porter_Stansberry

[Perchoutofwater]

The guy may be a crook, I don't know. This is the first thing I've read from him. What he has written in the essay does make a lot of sense. Wiegie, what do you take issue with?

[wiegie]

The way he calculates real GDP makes no sense.

 

He purports that the chart comparing the "unemployment rate with the size of the federal government's spending, as measured against GDP" shows that "the larger the government grows as a percentage of our economy, the higher unemployment rises. The more government, the less opportunity." This is such a dumb interpretation as to defy belief. The reason for this correlation is that unemployment rates go up during recessions and so does government spending as a % of GDP (partly because a recession causes GDP to go down which makes a constant level of government spending be a greater % of GDP and partly because automatic stabilizers cause government spending to automatically increase during recessions.)

 

Those are the only two things that I have gotten to in his article yet, and they are so misguided that it's north worth my time critiquing it anymore.

 

And for the record, I have long argued that a reduction in social norms towards good behavior could be bad for the economy, so I actually was interested in reading this person's article. Alas, it's not worth it.

[Ursa Majoris]

You want Washington corruption? Read this:

 

http://www.nationalreview.com/articles/286...lliamson?page=1

Said it before - kill them all, or they will assuredly kill us.

[BeeR]

You want Washington corruption? Read this:

 

http://www.nationalreview.com/articles/286...lliamson?page=1

 

racist.

 

Hope! Change! blah! Vote for me because by golly I'm an eloquent speaker. That's what matters...

[Redfish]

This Stansberry guy has been talked about before here and shown to be an alarmist and oppurtunist, if I'm thinking of the right guy.

 

He is the tinfoil hat dude that produced the webinars entitled "End of America" so he could sell investment advice. Very low level of credibilty.

[bushwacked]

So dude is an alarmist,a criminal, and a quack who is trying to convince people that gubment is the root of evil. I, for one, am shocked that Perch is reading him.

[Ursa Majoris]

So dude is an alarmist,a criminal, and a quack who is trying to convince people that gubment is the root of evil. I, for one, am shocked that Perch is reading him.

Grunge's link is much better.

[bushwacked]

Grunge's link is much better.

 

Yes, it was.

 

When President Obama opined during his 2011 State of the Union speech that a corporate tax-rate cut might be just the thing for America after a year of record corporate profits, his left-wing base was shocked and dismayed. Heck, some conservatives were caught offguard, too. Perhaps they hadn’t noticed who was running the Obama administration: In large part, the same guys who plan to be running the next Republican administration.

 

[Ursa Majoris]

Yes, it was.

 

Depressing, though.

[Ice1]

The way he calculates real GDP makes no sense.

 

He purports that the chart comparing the "unemployment rate with the size of the federal government's spending, as measured against GDP" shows that "the larger the government grows as a percentage of our economy, the higher unemployment rises. The more government, the less opportunity." This is such a dumb interpretation as to defy belief. The reason for this correlation is that unemployment rates go up during recessions and so does government spending as a % of GDP (partly because a recession causes GDP to go down which makes a constant level of government spending be a greater % of GDP and partly because automatic stabilizers cause government spending to automatically increase during recessions.)

 

Those are the only two things that I have gotten to in his article yet, and they are so misguided that it's north worth my time critiquing it anymore.

 

And for the record, I have long argued that a reduction in social norms towards good behavior could be bad for the economy, so I actually was interested in reading this person's article. Alas, it's not worth it.

 

Actually, he is comparing GDP to other currency outside the US dollar. The reality is the world economy is tied to the US dollar because oil is calculated using this currency. Measuring against commodities at today's rates is interesting to say the least. Ironically, the US dollar is becoming and will become a less important measure as debt increases. Ultimately the valuation must drop as more dollars must be printed. No one can realistically argue the stability will increase as we had 1.1 - 1.5 trillion in new debt annually. He is just looking at valuation based on other value sets that still require dollars.

 

The government spending argument vs unemployment is weaker but the obvious truth is the larger the government the more revenue it consumes from the economy which always limits growth. The government is a consumer of dollars not a net gain jobs business. Every job created is always on the taxpayer to fund which factually increases costs. When the government adds massive layers of spending, they add more and more people but do not restrict the size or scope ever; so we see an upward spiral of costs to support the beast.

 

Sadly, this government is not increasing spending just to compensate for higher unemployment by any measure but you are correct that unemployment is as serious factor, but then again the government policies through the community reinvestment act and the resulting Freddie/Fannie nightmare is largely due to government policy in the first place. While this caused white hot expansion it also creates a bubble.

 

While you disagree with some of the article, had you read the entire article it is interesting.

 

His Detroit portion is very accurate. In the most simplistic form he is discussing classic conditioning much like Ivan Pavlov did back in the day when looking at dogs.

[Sugar Magnolia]

Actually, he is comparing GDP to other currency outside the US dollar. The reality is the world economy is tied to the US dollar because oil is calculated using this currency. Measuring against commodities at today's rates is interesting to say the least. Ironically, the US dollar is becoming and will become a less important measure as debt increases. Ultimately the valuation must drop as more dollars must be printed. No one can realistically argue the stability will increase as we had 1.1 - 1.5 trillion in new debt annually. He is just looking at valuation based on other value sets that still require dollars.

 

The government spending argument vs unemployment is weaker but the obvious truth is the larger the government the more revenue it consumes from the economy which always limits growth. The government is a consumer of dollars not a net gain jobs business. Every job created is always on the taxpayer to fund which factually increases costs. When the government adds massive layers of spending, they add more and more people but do not restrict the size or scope ever; so we see an upward spiral of costs to support the beast.

 

Sadly, this government is not increasing spending just to compensate for higher unemployment by any measure but you are correct that unemployment is as serious factor, but then again the government policies through the community reinvestment act and the resulting Freddie/Fannie nightmare is largely due to government policy in the first place. While this caused white hot expansion it also creates a bubble.

 

While you disagree with some of the article, had you read the entire article it is interesting.

 

His Detroit portion is very accurate. In the most simplistic form he is discussing classic conditioning much like Ivan Pavlov did back in the day when looking at dogs.

 

BTW, it is "classical conditioning"

[Ice1]

BTW, it is "classical conditioning"

 

That it is.

[Ursa Majoris]

the government policies through the community reinvestment act and the resulting Freddie/Fannie nightmare is largely due to government policy in the first place. While this caused white hot expansion it also creates a bubble.

I guess if you repeat something often enough, it becomes truth......for some.

[Sugar Magnolia]

That it is.

 

 

I just don't understand your classical conditioning analogy.

[Ice1]

I just don't understand your classical conditioning analogy.

 

For someone so adept in picking up a typo, I wouldn't think it so difficult. Obviously, you have some understanding of Classical Conditioning so I will leave it to you as to how this applies.

[Ice1]

I guess if you repeat something often enough, it becomes truth......for some.

 

Enlighten us as to the cause and effects of "The Community Reinvestment Act" and this impact on Freddie and Fannie. Do you somehow think the competitive markets didn't follow up on the foundation the government laid?

 

Show us your skill and explain your comment to the readers of this thread. I am certain it would be interesting.

[CaP'N GRuNGe]

Enlighten us as to the cause and effects of "The Community Reinvestment Act" and this impact on Freddie and Fannie. Do you somehow think the competitive markets didn't follow up on the foundation the government laid?

 

Show us your skill and explain your comment to the readers of this thread. I am certain it would be interesting.

 

If you'd been around longer you'd have known this was discussed in detail a while back more than once and the facts were shown that the bulk of of the housing shenanigans were actually not caused by the CRA. There are links here I'm sure but i'll let you enterain yourself in searching for them yourself.

[CaP'N GRuNGe]

Here's your link...

 

http://www.federalreserve.gov/newsevents/s...er20081203a.htm

[Sugar Magnolia]

For someone so adept in picking up a typo, I wouldn't think it so difficult. Obviously, you have some understanding of Classical Conditioning so I will leave it to you as to how this applies.

 

Sorry, I couldn't figure it out.

[Ice1]

If you'd been around longer you'd have known this was discussed in detail a while back more than once and the facts were shown that the bulk of of the housing shenanigans were actually not caused by the CRA. There are links here I'm sure but i'll let you enterain yourself in searching for them yourself.

 

No need to put words to in my mouth. While I was not around in the last discussion I was bringing up the the CRA and the cause and effects this government policy ultimately had on Freddie/Fannie.

 

As is normal, the government puts forth policy and there is a shift in business as competition increases. It is actually pretty easy to see what happens as the "chicken in every pot strategy played out"

 

The government led the charge putting the freight train on the track and the government insured programs followed trough on those policies which ultimately led to the collapse that we are still dealing with today.

 

No doubt there is plenty of blame to go around the CRA and realities of follow through by Freddie/Fannie insuring far too many high risk loans were the leaders that others followed the government foundation.

 

Here is a decent article that marries the two cause/effect relationships.

 

government mandated article

 

Unfortunately, by 2007 close to 50% of all US mortgages were of the sub-prime variety with around 70% insured by Freddie/Fannie via the federal government.

 

I doubt anyone really believes a significant percentages of these of mortgages would have been without the government backing of Feddie/Fannie.

 

In other words, the policies of the USA and subsequent implementation by secured agencies were the real key contributors. Business no doubt followed suit but in reality it was the actual policy that laid the foundation and that should be obvious to all that study the cause and effect relationship regardless of the noble cause the government had in mind.

 

In the end, when one makes loans based on low credit scores problems arise even when backed by the faith and credit of the US Government.

 

The CRA was the legislation, the implementation overtime was the key contributing factor so I am not arguing the CRA just the cause/effect of implementation which no doubt played a gigantic role and still is today.