In reply to Heath (msg #96):

There is no "value" to a ranking.  It is merely a method by which one compares one thing to another.  America did not start with people saying they wanted to be ranked number one economically.  They just worked their asses off and did so creatively with the promise that the fruit of their labors would be theirs.

What you label as a sacrifice is willingly and enthusiastically pursued by people for the rewards they provide to them and their families.



And I argue that individuality and personal reward is what has made America the number one economy.  Those individuals didn't work for a ranking, they worked for themselves.  It is the notion that if you work hard and smart you can create your own prosperity.  Add "good government", as you say, and you get exactly the environment you claim to be against.  Crushed individuality and no economic growth.

In Japan's case, you claim to see a loss of individuality.  In America's case I see individuality enshrined.  But the two are vastly different cultures that have both generated powerful economies.  Therefore, I do not see economic power at the cost of individuality to be the norm.  I see Japan as a culture that does not see individuality the way Americans do.



Look back at how you describe Japan.  Pretty grim.  You didn't say it, I did.  As I say above, Japan didn't trade off anything, they just see individuality differently than Americans and Westerners do.  I would say their rise from post-War II devastation to a world-class economy is inspiring.

Well, having lived in Japan for 7 out of the last 15 years, I think you share the same flawed generalization of the Japanese that many Americans have.  Japanese crave individuality, they just have difficulty finding it in their culture.  That is why so many Japanese women want to marry an American and move to the States.  They do not relish their conformity at all.

There is no "loss" of individuality.  Japanese never had it because they are trapped in a culture and society.  If I could tell you all the Japanese I've spoken to who repeat this to me.  I'm not looking at statistics or some detached sociological evaluation.  This is what you hear over and over again from the Japanese, particularly the youth.  It has caused entire trends of change, but always bucking up against the system.  But where in China the restraints are very visible, in Japan they are invisible (social pressure, loss of face, occupational requirements, etc.).

In any case, that's neither here nor there.  I'm still not sure my point made it through.

You changed my point completely.  I said that where the government sacrifices the well being of its citizens, then its number one ranking isn't all it's cracked up to be (such as China).  You changed that to individuals willingly making sacrifices.  That's a different thing altogether.

Then you say there is no "value" to a ranking and it is used for comparison.  That's all fine and good, but the key point is that the comparisons made by the ranking are proper and not misplaced.  I am saying that economic #1 is not comparable between countries because all it does is make a conglomerate totality out of so many numerous factors that the context gets lost in the shuffle.

For example, I can say a grapefruit is #1 when compared in size to an apple.  That doesn't mean it's better than an apple.  All it means is that it is bigger.  It doesn't even mean it consists of the same thing.  However, if you said you could grow an apple that's as big as a grapefruit and the apple tastes better, then you get quality (the better taste) along with the quantity (size).  When you compare economies of countries, you risk looking at the quantity without the quality.

Jupiter is bigger than the earth but I wouldn't want to live there.

To bring my point to a close:

What I think is more valuable than looking at the size of an economy, or even its success as a nation, is to look at the "opportunity" available.  That gives you a value assessment.

China= Very low opportunity due to sacrificed rights and communism

Japan= Moderate opportunity due to societal pressures and limitations of homogeneity

USA= High opportunity due to value of individual freedoms and expression of individuality (also due to many geographic locations that will give more opportunity to certain groups -- San Francisco to gays, Chinatown to Chinese, etc.)

Now, where there is opportunity, there is a path to making the "economic" side succeed and become #1, but it places that success in the hands of the individuals rather than in the government.  They can choose to seize opportunity or let it pass by.
This message was last edited by the GM at 00:41, Wed 16 Feb 2011.

The depression *started* in the US, and we are largely still blamed for it. Mexicans left because there were better jobs in Mexico. Compared to the threshold definition of 'has lost prestige' that is a heck of a lot, even with us still in the #1 position- we may still lead the pack but other economies are closing with us.
as to 'blaming Bush' I mentioned his presidency for 2 reasons: 1) it defined the timetine, and 2) concencus global opinion still holds him largely responsible- which is why our situation improved by electing Obama before he actually did anything. It was your own asumption that I was factually blaming Bush, and your own knee jerk response that was an over-reaction to what I actually said.

back to the orriginal topic: education is not a linear value. A person who is a doctor is educated in the feild of medicine, but may be completely ignorant of politics, economics, history, literature, or electrical engineering. General education necessary for a democracy would focus on feild that have largely been devalued in the modern American culture- history, economics, anthropology and social studies. In the modern age a general science education is also necessary.

When using the Mexican metric, it's important to also factor in costs. There is a non-trivial cost with an illegal immigrant trying to get work in the US. There may still be better work in the US, but when you take the value of that work minus the cost of trying to live here as an illegal, Mexico may now come out ahead. That speaks either of our loss of value as an economic power, OR as the increased effectiveness in controls against illegal immigrants (related to the fallout from the 'war on terror' perhaps).

in 2007 it was pretty clear that the returning immegrants to Mexico was a fallout of the economy. Sure tehre are people trying to rewrite history now. there are also people who try to claim the holocaust never happened. Revisionist history is revisionist history. Besides, if it were a matter of better enforcement then why would the numbers of illegal immigrants have risen again as the economy improved?
This message was last edited by the player at 15:03, Wed 16 Feb 2011.

Because there are two factors in the equation. It's Profit - Cost. If the Cost is high, it will balance out a high Profit. However, if Profit jumps AGAIN, the equation may now favor the US, if the Cost doesn't keep pace.

Pretty clear to who?  Please, cite the history if you would and show your evidence.  While your theory is not revisionist history, I believe you are jumping to a conclusion based on personal bias.

On a side note, I do like the comparison of discussing the reasons for the illegal immigrant exodus being akin to denying the Holocaust.  Very classy.

Here are a few reports from 2007 talking about new strict laws making illegals move:

http://www.usatoday.com/news/n...7-09-26-moving_N.htm
http://www.boston.com/news/nat...ving_out_immigrants/

I am sure that the drop in construction jobs affected illegals greatly but so did a rash of new laws targeting illegals.  However, I do not see how you link lawbreakers leaving the US as a sign of a loss of economic prestige.

Sorry for the thread hijack.

http://findarticles.com/p/news...conomy/ai_n41417913/

and I am not tying the immigration reversal to the holocaust, I am tying the psychology of Holocaust deniers to teh revisionist history of the Bush era. Both are done by people who want to ignore historical facts that do not fit their preconcieved right wing ideology.

In reply to silveroak (msg #106):

You did not tie the two together.  Never said you did.  What I said was that you were comparing the debate of the reason for illegals returning to Mexico with denying the Holocaust.  That is what you did.

Please show me where I rewrote history.  I acknowledge that the economic downturn began in 2007.  I took issue with the idea of declaring a loss of economic prestige based on illegal aliens returning to Mexico.  There was more to it than your assumption.

Want to blame the housing bubble on Bush?  Fine.  It isn't based in fact other than it happened on his watch.  I have many grievance against Bush, the bailout being my biggest one, but your level of rancor against Bush is distorting your perception of the issue.

There was a lot more to the depression than just the housing bubble. After all the tech bubble which exploded in the 1990's under Clinton's watch did not produce a recession. at least we agree on the bank bailouts, though possibly not in the same way or degree. My point however is that the recession which began in 2007 (and it has been defined as such through objective economic measures) caused a loss of prestige for america in the economic arena, which is reflected in part by this exedous. A loss of prestige means essentially we had egg on our face, nothing more. why you feel the need to debate this ad nauseum and turn it into a political deathmatch over issues which are matters of fact is beyond me.
and incidentally *that* was the connection I was drawing- the denial of established fact. Even if you assert that increased enforcemen was *partially* responsible for the decrease in immigration (which i could debate, but won't here) the economics were also certainly a factor, and more signifigantly to the point I was making they were internationally *percieved* as the primary factor.

In reply to silveroak (msg #108):

The tech bubble didn't produce a recession?  Who is revising history now?  Clinton ended his Presidency with a recession.  But that is neither here nor there.

I still do not buy that illegals moving back to Mexico is a sign of a loss of economic prestige.  There were other factors besides economics involved in that.  If you don't wish to debate, which you really haven't, then don't keep beating this dead horse with your over-the-top comparisons.  The fact is illegals were/are moving back to Mexico.  Your opinion is that this is some sign of loss of economic prestige.  I can accept your opinion as what you believe but don't sell it as a fact.

I don't see where international perception of the US was damaged by the flow of illegals back to Mexico.  The damage was due to their economic institutions and governments being heavily intertwined into American markets which have taken a severe hit.  In America's defense, their problems are of their own making for the most part.  We did not create the socialist welfare states of Greece, Spain, etc.  We only highlighted their unsustainable nature with this current recession.

That recession began in 2001 http://www.sjsu.edu/faculty/watkins/rec2001.htm, which would have been on Bush's watch as well...

In reply to silveroak (msg #110):

A little insight into how these things work: 2001 was Clinton's last budgetary year.  I actually like to assign blame based on who was actually to blame.

Using the stock market as an unofficial benchmark, a recession would have begun in March 2000 when the NASDAQ crashed following the collapse of the Dot-com bubble.  The Dow Jones Industrial Average was relatively unscathed by the NASDAQ's crash until the 9/11 attacks.

Even your own source says:



That would be Clinton, no?

Really? so you aren't one of teh Republicans who blames Obama for 2009?

In reply to silveroak (msg #112):

For the recession?  No.  I don't blame Obama for that.  I blame the Community Reinvestment Act and the house of cards built on it by the Democrats.  Forcing banks to give loans to people who can't afford to pay them back was never a good idea.

However, the spending spree Obama is on and his disasterous policies have worsened the recession.  In fact, he was done nothing to help the economy.

Forcing banks to make loans against their judgment is a bad idea, though, the fraction of banks forced to make subprime loans was rather small.  The rather large majority of them got into that business on their own.  The CRA may have been a bad idea, but I think it's hard to argue it was the primary cause for the collapse, since most of the banks involved weren't affected by it (especially those outside the US).


From what I've read, most economists feel the stimulus has helped the economy somewhat.  I've not seen any say that its actually hurt the economy or worsened the recession.  Where are you getting this view?  Which "disasterous policies" in particular are you referring?  And, out of curiosity, what policies do you feel would help the economy?

In reply to Tycho (msg #114):

So the fact that the CRA is enforced by the financial regulators (FDIC, OCC, OTS, and FRB) doesn't mean anything to you?  Get caught redlining and you could be in for a visit from the US Attorney General.  Although the CRA found little litigation that changed when Clinton "revised" the CRA.  Under those revisions US banks committed over a trillion dollars for inner-city and low-income mortgages and real estate development projects.  Most of it was funneled through left-wing community groups.  ACORN anyone?  That is when the CRA really took on the role it played in our current recession.

A great many of those banks softened their risk by rolling in into other financial institutions and packages.  The global market place did the rest.  The foundation of the current recession, as far as the US's role, starts with the CRA.



Really?  "Most" economists?  Please provide me the names of these economists who believe that the stimulus has helped the economy.

What Obama has really done is waged a war on prosperity.  He goes after the ones who create jobs and tells them that they have "made enough money" and that he is the one "protecting them from the pitchforks".  Class warfare at its most base level.  Why doesn't the man just put a gun on the table when he talks to business leaders?  Business owners don't know who is going to go after or who he and his Union thugs will target next.  He did it to the auto industry, the banking industry, and the healthcare industry.

So my view comes from watching our President spend trillions of dollars for nothing, demonize success, seize control of GM for his Union cronies, ram through an unpopular take over of healthcare under the cover of darkness, place an illegal ban on oil drilling, trying to ram through tax increases during a recession, using regulations to try to impose a carbon tax, and leaving the business and economic community with no idea of what he is going to go after next.  Uncertainty makes people hoard their wealth until they believe their investing it will earn them more wealth.  Obama doesn't understand that and is more concerned about his ideology than the economic well-being of Americans.

As for what I think should be done, well, I am a libertarian.  I believe government should get the fuggle out of the way of small business and corporations alike and allow them invest and grow as much as they can.
This message was last edited by the player at 20:15, Thu 17 Feb 2011.

Tlaloc, I feel a bit like you're talking in campaign soundbites.  Probably I'm sounding that way to you.  How 'bout we both try to just keep things neutral, and stick to facts, deal?



But not all banks are subject to it.  The large majority of the subprime lending was done by banks that had no obligation do it under CRA.  That other banks were required to do it may (or may not) be a bad thing, but most banks that did it were doing it entirely by their own choice.  (Really, look for whatever source you trust on this, and check the numbers.  I can give you numbers, but I think it'll be more convincing if you go from whatever source you trust.  What fraction of loans were made by banks subject to CRA?  Let me know what you find).


Can agree with this part, as long as we realize that "a great many of those banks" were mostly not subject to CRA, and were doing this based on their own assumptions about the housing market.

And how much blame should the market get for "doing the rest?"  How about other financial institutions who bought the packages?  Do they have no obligation to make sure their investments are sound?  Is an investment bank that buys a bundle of bad loans not guilty of at least the same poor judgment as the lending bank that made the loans in the first place?


But what of all the other banks, doing the same thing when they didn't have to?  If less than half of the subprime lending was done by banks no subject to CRA rules, is it really fair to say CRA was the cause?  If the non-CRA banks gave out loans that defaulted more often than the CRA banks did, which were the bigger cause?

To be clear, I'm not saying that CRA was necessarily a good idea (that's another debate altogether), just questioning the assert that it was the cause of the financial crises.  How did an american law cause a housing bubble in Ireland and Spain?  How did subprime lending lead to the collapse of Iceland's banks?



Okay, I'll give a few.  If you could give your sources that would be useful too.
Paul Krugman, Stuart Hoffman, chief economist at PNC Bank, Mark Zandi of Moody’s Economy.com, Diane Swonk of Mesirow Financial.
(here's a blog piece mentioning most of these: http://yglesias.thinkprogress....the-stimulus-failed/ )


Okay, all of this is just political speech.  There's no real talk about what he actually did, just colorful ways of expressing your disapproval.  I get that you don't what he's done, but I think it'd be more useful to explain what, in particular, he's done that you don't like, and why you don't like.


Wait...the auto industry that the government bailed out to stop it from going completely belly up, and likewise with the banking industry?  It's one thing to say he should have just let them fail.  I think a decent case could be made for that.  But claiming that he's holding them down, stopping them from producing, or whatever seems dubious to me, since many of companies wouldn't still exist today if the government hadn't stepped in to save them.  May it shouldn't have saved them (in at least some of the cases I'd say it probably shouldn't have), but that's different from what you seem to be describing.  As for the healthcare industry, he just got a program passed that required everyone to buy their product.  Whatever you might say about the healthcare law, it wasn't exactly ruining the insurance industry's day.


I assume you mean the stimulus here.  If this actually saved us from another great depression (which, remember, is what many people were saying we were about to be entering at the start of the collapse), would it have been worth it?  It seems unlikely that we'll agree that it did stop that, but we may find some agreement on whether it would be a worthwhile spend if it hypothetically had.


Can you give a more specific example?


Do you feel it would have been better to let it go bankrupt?  I might not disagree with that, I just want to be sure I know what you're proposing the proper action to have been.  Do you feel the economy would be better off now if GM had gone under?


It was unpopular, but "under cover of darkness" seems somewhat over the top.  He ran his presidential campaign promising healthcare reform.  The majority of american wanted healthcare reform.  Of the people who didn't approve of it when it was passed, it was about evenly split on disapproving it because it "went too far" and because it "didn't go far enough."  I'm not a huge fan of all its details, and I have no problem with you saying you don't like it in whole or in part.  It just seems a bit unfair to characterize it as some abuse of power.  This is what the democrats ran on.  And the package is more or less what the republicans were saying should have been done back during Clinton's attempt at healtcare reform.  Saying you don't like it is fine, but perhaps we can tone down the rhetoric a bit, and just discuss what aspects you don't like?


Why do you feel it was illegal?


Which were those?  Do you mean not extending the bush tax cuts on the wealthy (which, as you may recall, did end up getting extended for little while, at least)?  Did you know that Obama cut taxes for the vast majority of Americans.  That's right, taxes paid by most americans are lower than the were during Bush's presidency.

For what it's worth, I think extending the tax cuts was a bad idea.  It increased the deficit far more than most of the programs they're haggling over in congress right now.  If deficits are the big threat, huge tax cuts without corresponding spending cuts doesn't make sense.


Why do you oppose this?  Do you agree that CO2 is an externality, at least?  Internalizing externalities is generally good economics (let the market do the work, etc.), even if taxes tend to be unpopular.  Do you have another suggestion on how best to deal with the externality?


I think both sides are going to point their fingers at the other and say the same.  Dems will say the Republicans ran on a platform of reducing the deficit and cutting spending, and then have mostly pursued ideological targets (health care, abortion, etc.).  Republicans will say things like you've just said.  Doesn't really get us anywhere (well, I suppose it gets politicians of both stripes elected, so it does get them somewhere, but it doesn't do much for you or me).


Okay, I think most people of all political stripes will be pretty happy to agree with that.  But it's a vague statement, which doesn't really indicate what it means in practice.  Do you mean no taxes at all?  Do you mean no regulation at all?  Do just mean less taxes and/or regulation?  If so, how much is right?  Do you support eliminating all subsidies as well?  That might be something where we could find a degree of agreement.

What sounds like a campaign soundbite can indeed be a fact.  Tell me, how does a "neutral" debate go?

Speaker One: "What he says is cool with me."
Speaker Two: "Cool.  I agree with him."

Debate over.

As Zap Branagan says "Their neutrality sickens me."



You didn't include the part where I point out that Clinton revised the CRA and that was when it really became toxic.  Nor do you address it in any way.  Is selective quoting part of our "neutral" arsenal in this back and forth?  If it is then you can count me out.

This is telling because it is those revisions that substantially increased the number and aggregate amount of loans to small businesses and to low and moderate income borrowers for home loans.  It is also a common tactic to avoid talking about the Clinton revisions and focus only on CRA's beginnings.

The increase in home loans was due to increased "efficiency" in creating them and the way the revisions of the CRA allowed for the creation of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization.

This is the root of the secondary market for mortgage loans which is very important to my point.  Those revisions allowed the securitization of CRA loans containing subprime mortgages.  The first public securitization of CRA loans started in 1997 by Bear Stearns.  The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.  It was this securitization that made the risk filter through the global markets.

The revisions gave Fannie and Freddie extraordinary leverage to allow them to hold just 2.5% of capital to back their investments, vs. 10% for banks.  By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market.  Thus leading us to the problems of today.

So blame "the market" if you wish but the market adjusts to the rules laid down by governments.  When they interfere in markets it causes nothing but trouble.  I prefer to lay blame on those who create the environment and write the rules rather than those who try to work according to them.

I would address the rest of your post but I will concentrate on this one since it is the root cause of the economic crisis.  One quick point though:

Krugman, whom I read religiously and disagree with totally, does not call the stimulus a success.  He calls it a failure.  Why?  Because it wasn't large enough for his liking.  He was also the man who, in 2002, called for the housing bubble to solve the dot-com bubble!  Is that the kind of economist whose opinion you would trust?

http://www.nytimes.com/2002/08...ya-s-double-dip.html

Read and be amazed.
This message was last edited by the player at 22:26, Thu 17 Feb 2011.

My understanding is that the housing crash was manifold, as follows:
1) Republicans pushing the concept of home ownership pushed from supplying te underprivledged with rent to stimulating them to buy houses, on the basis that ownership is good for everyone, despite evidence that many people do wind up destroying or losing everything they own.
2) Democrats, no longer meeting with opposition on the issue from Republicans, expanded the housing 'support' of the federal government, and used regulatory 'incentives' instead of actual money to accomplish their charity.
3) banks having been pressured into taking bad loans repackaged those loans and resold tehm as derivatives.
4) banks discovered they could actually make money by making bad loans at high interest rates and selling the derivatives at a low interest rate, thereby bypassing the limitations on what percentage of their assets they could loan by using the turnarround in place of holding the loans.
5) since repossesion did not go along with the sold loans, defaulted loans (resulting in a house auction) would produce more revenue for the bank than successfull loans
6) hilarity chaos ensued

In reply to silveroak (msg #118):

Interesting theory.

1. Provide the names of those Republicans who pushed the underpriviledged from rent to home ownership.  Also provide how they did this.
2. Which bills accomplished this?
3. This one is true as I described it.  The Clinton revisions made this possible.
4. Banks didn't "discover" this.  Government regulations allowed them to do it.
5. Repossession was the end result of loan default.  Not the banks fault at all.  If you can't pay you shouldn't live in something the bank owned anyway.
6. Indeed.

Your understanding has its valid points.  It just requires some tweaks to get it to conform to reality.

1) No. I simply don't have the free time to track down teh names of teh participants involved from 15 years ago. It was a Republican concept and bill which moved the welfare concept fo housing from rent to ownership. It didn't cause the problkem, it merely set teh satge, and like I said, I don't have time to run down ever aspect of this for you to examine, this whole conversation is a side not to the side note to the main point and is frankly becoming absurd.
2)Again, you are asking for a level of detail I do not plan to research. Besides which this si the step that I thought you agreed was at leat a part of teh problem- with the focus now on home ownership instead of providing rent democrats realized they could pressure banks into extending loans (which unlike education loans the government did not guaruntee)- this is merely step one of that process
3) I believe this was more of a concensus effort than simply being Clinton. It isn't as if the man single handedly wrote and signed every bill and micromanaged teh country. He signed it because it looked like a good idea at the time and was a minor point in a much larger bill which had been signed off on by a Republican dominated legislature.
4) Banks discovered it at the same time as teh Bush Republican philosophy of 'regulation is bad, we should not enforce the laws or pas regulations' gave them an unfettered ability to push the limits of their 'innovation'
5) I didn't say reporssesion was teh bank's fault- I am saying the banks made more money when there was a repossesion, which resulted in a number of effects- riskier loans and unwillingness to work with homeowners who were having trouble being chief amongst them. When banks owned the loans they made they were willing to work with customers to avoid having to default because everyone came out ahead that way. Now they are especially harsh and have in some cases gone overboard reposessing houses they didn't even have a loan on. (Bank of America did this to me and we are still in court about it)

In reply to silveroak (msg #120):

1) No evidence or support.  Noted.
2) No evidence or support.  Noted.
3) Clinton revised the regulatory rules that governed the CRA.  It is a matter of fact and wasn't a bill that was passed.  It was the Executive branch alone.  Kind of what Obama wishes to do with the EPA and greenhouse gases.  Your beliefs are not in line with the facts.
4) Ummm... No.  The CRA revision was firmly in place and the banks using the revised rules well before the Bush administration.  Need I remind you, which it seems that I do, that Bush actually called for stricter regulation of housing loans and the institutions making them in 2003 (Fannie and Freddie being the two most notorious).  He was painted as a heartless brute by Dodd, Frank, and the media.  Obviously Bush hated poor people having homes.  He backed down in the face of strong Democrat backlash.
5) Banks have the right to foreclose.  If they are not doing so within accordance with the law then they need to reminded of the proper procedures.  The courts will have to decide on a case by case basis now.  Or Obama can just demonize the banks more.  Seems to be working.

You may hate seeing historical record provide such damning evidence on the Democrats hands in the housing crisis but it is there and it is easily found if you are willing.

I can supply endless quotes from Democrats telling us that everything is fine in the housing market as well as showing that those institutions involved in those markets contributing overwhelmingly to Democrats.  But this is the quote that I think sums it up nicely:

"The responsibility that the Democrats have may rest more with resisting any efforts by Republicans in the Congress or by me when I was president to put some standards and tighten up a little on Fannie Mae and Freddie Mac." - Bill Clinton

When you get Bubba admitting responsibility you know that you can't lie your way out of it.

I'm not saying that banks do not have a right to foreclose, I'm saying their incentive structure to do so changed dramatically as a result of teh derivatives market, which is the real major issue here, and the regulation of the SEC durring teh Bush administration ws a joke, with the grand total of 5 investigators spending more time downloading porn than investigating any SEC violations.
the problem isn't 'the banks are evil' the problem is that derivatives basd banking resulted in a revision of the incentives of banks in making loans while the market was under the assumption that the old incentives were still in play.