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peterm99

Listed below are comments made by peterm99 between Saturday, 4th October 2008 and Tuesday, 7th October 2008.

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Did deregulation really cause the crisis? 2:03pm on 07 Oct 2008 re: #115 MarkfromOxford wrote:

"What caused the crash was the Bush tax cuts and the war in Iraq."

Well, that might be correct as a description of the most proximate underlying cause, but the real problem is more systemic and long-term. The last time the US Gov't had a surplus was in the early 60's. Continuous deficits are unsustainable, even if one can print money at will. A major crash was inevitable; the Bush policies merely hastened it. Other factors discussed on this blog played a role as well, but they are much less significant contributors.

If one looks at the numbers, it appears that either the war or the cuts might have been accommodated for quite some time, but the combination of both was just too much. In addition, the drastic rises in the price of oil in the past few years served to drain even more capital out of the economy, reducing resiliency even more.

In some ways, it's eerily similar to the "Guns AND Butter" choice that Johnson made (and Nixon more or less followed) during the Viet Nam war, which contributed greatly to the mess of the mid/late 70s which came to a head with the oil shortages.
Did deregulation really cause the crisis? 12:43pm on 07 Oct 2008 re: #96 David_de_Jong

In general, one could get a 30yr fixed mortgage at a constant interest rate fixed at the time of loan closing.

One also had the option of choosing a variable interest rate, often 2-3 (or more) percent below the fixed rate, which would stay constant for a time, generally a year or two or three, at which time it would reset to the then prevailing rate, and then adjust, generally yearly, to the then current rate. This type of variable mortgage was extremely popular among the "flippers" who never intended to keep the house for more than a year or two, and also the "low income" folks, because eligibility for the loan was determined based on the initial interest rate only.

At the expiry of the initial fixed period, the rates rose in accordance with the mortgage contract and those who could just barely afford the mortgage payment with the initial "teaser" rates could not afford the new payments, and, due to the housing market, could not sell for what they still owed on the house.

Obviously, all the rates were based on the perceived riskiness of the mortgage, and the "sub-prime" rates were somewhat higher than the prime rates. That explains the higher initial rate you cite as well as the higher payment after the initial period.
Did deregulation really cause the crisis? 11:18pm on 06 Oct 2008 re: 23 moderate_observer

I believe this post identifies the single most important issue in the crisis.

Even in a totally chaotic, unregulated market, if there is sufficient transparency to allow rational buy/sell decisions to be made, egregious behavior will not be rewarded in the marketplace. If the unsoundness or the illegality of certain practices is allowed to be hidden, individual misbehaviors can snowball into market-wide bubbles, panics, and crises.

The fact remains that the entire problem is not a Rep/Dem issue, but that government (both parties) has been in bed with those moneyed interests from whom they have demanded (and received) financial and other rewards for allowing various misbehaviors to be hidden. Any suggestion that there is a substantive difference between the two parties in the area of corruption is either extreme partisanship or intellectual dishonesty (or both).

Post #27 by lordBeddGelert also identifies a key issue, regarding the difference between substantive regulation and bureaucratic red tape.

Even with substantive regulation, there has always been a problem with the actual enforcement of the regulation that has existed: the US press is replete with stories about "Company X has agreed to pay a penalty of y dollars without admitting any wrongdoing in exchange for dropping of the case." Sadly, what is neglected is that Company X was accused of practices that resulted in tens or hundreds of millions of profit and the penalty was generally a small percentage of the ill-gotten gain. Over the years, it has gotten to the point that these penalties were included as part of the "normal cost of doing business" calculation for many companies.
McCain out of Michigan 07:26am on 06 Oct 2008 re: 506, 509, 512

Apologies for the triplicate posts.

The count was stuck at 495 and, by all indications, the post was being rejected, so I tried minor edits to get it past the "auto-mod" function.
McCain out of Michigan 07:18am on 06 Oct 2008 re: #495 british-ish wrote:
"That's because too many reasonable people become disheartened by the frequent flood of repetitive rants by the same handful of contributors."

Responding to political ranting only encourages the ranters to continue.

". . . I raise an issue here . . . , it largely gets ignored by partisans of both sides."

I would think that is a good thing - why would you want partisan drivel in response to real issues you might raise? I have noticed that reasonable posts often do get thoughtful responses, although they are far outnumbered by the drivel.

"It speaks to the shocking lack of political debate in this election."

I assume you refer to the overall situation, and not just on this blog. The simple answer is that half the electorate has an IQ of 100 or less. Raising the level of political discussion by either party to a higher intelligence level would thus result in their losing any chance at attracting that half of the voting public, thereby assuring an election loss - the votes of a thousand know-nothings count more than the votes of 999 reasonable, discerning people. That is "democracy".

That said, I had hoped that the self-selection of people to post on a blog such as this (BBC as opposed to a partisan US political blog) this would have resulted in a higher level of discourse than seems to be evident. In #492, David Cunard likes this to a "coffehouse conversation"; I think he's too generous, by far.
McCain out of Michigan 07:16am on 06 Oct 2008 re: #495 british-ish wrote:
"That's because too many reasonable people become disheartened by the frequent flood of repetitive rants by the same handful of contributors."

Responding to political ranting only encourages the ranters to continue.

". . . I raise an issue here . . . , it largely gets ignored by partisans of both sides."

I would think that is a good thing - why would you want partisan drivel in response to real issues you might raise? I have noticed that "meaty" posts often do get thoughtful responses, although they are far outnumbered by the drivel.

"It speaks to the shocking lack of political debate in this election."

I assume you refer to the overall situation, and not just on this blog. The simple answer is that half the electorate has an IQ of 100 or less. Raising the level of political discussion by either party to a higher intelligence level would thus result in their losing any chance at attracting that half of the voting public, thereby assuring an election loss - the votes of a thousand idiots count more than the votes of 999 reasonable, discerning people. That is "democracy".

That said, I had hoped that the self-selection of people to post on a blog such as this (BBC as opposed to a partisan US political blog) this would have resulted in a higher level of discourse than seems to be evident. In #492, David Cunard likes this to a "coffehouse conversation"; I think he's too generous, by far.
McCain out of Michigan 06:00am on 06 Oct 2008 re: #468 Fritz_Kraut wrote:

". . . arguments that have been rebuted numerous times, in a polite and sensible fashion . . ."

I disagree.

Sadly, the main problem with this blog is that there are very few cogent arguments that are made for or against either side, and the vast majority of "rebuttals" are little more than childish name calling that most certainly are not "polite and sensible".

Even many posters who do occasionally offer reasonable discussion points often dismiss differing views with derision rather than with reasonable counterargument.

Unfortunately, much of what appears here is little better than the drivel that appears on highly partisan US blogs. I stay to read and occasionally comment here only because there is occasionally reasonable and intelligent comment (from differing viewpoints) interspersed with what can only described as "Dreck".
McCain out of Michigan 04:33am on 05 Oct 2008 re: #279 DominickVila

By all definitions of which I am aware, a surplus occurs when total income exceeds the sum of total expenditure and accrued liability. Arriving at a "surplus" by not including interest on the debt is "creative accounting" by any rational standard.

"As for the integrity of the CBO, I had never heard anyone questioned it before."

Sorry about that - I should have been more careful in the way I wrote that. I did not intend to question the integrity of CBO, only to point out that the way it accounts for different types of funds/expenditures is insufficiently transparent to me to be able to use the data provided after only a brief examination. That is why I used only the Treasury and OMB data. I quoted the sentence from another site merely to show that I wasn't the only one who had difficulty with the way in which the CBO handled/presented their data.
McCain out of Michigan 01:10am on 05 Oct 2008 re: #258 DominickVila

The link you cited (http://clinton4.nara.gov/WH/New/00Budget/I_web_budget_summary.html) is merely the budget _submitted_ by Clinton, not the one actually implemented - heck, even GWB _submitted_ at least one balanced budget, and we all know how that turned out. ;-)

I got federal debt info from (http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf) and crosschecked with several pages at (http://www.treasurydirect.gov/govt/reports/pd/pd.htm), and it appears that the White House/OMB data is consistent with the US Treasury data.

I also checked out CBO data, and found them to be internally inconsistent: often, they don't even add up correctly. Further exploration an various sites leads me to the conclusion that they treat various items differently. As one source stated: while the CBO may be non-partisan, that does not mean the CBO is non-political or that their numbers are honest or transparent.

Anyway, the fact that BOTH the US Treasury and the OMB data show consistent increases in annual US gov't debt throughout the Clinton administration, confirms (at least to me) that any Clinton "surpluses" are artifacts of creative accounting.
McCain out of Michigan 10:40pm on 04 Oct 2008 re: #250 DominickVila

regarding Clinton surpluses:

Upon review of actual US national debt numbers, it is apparent that the last time there occurred a year to year decrease was in the Kennedy administration. Even in Clinton's best year, the national debt actually increased by roughly $18 billion.

Thus, any assertion that he had _real_ surpluses, i.e., not as a result of budgetary shenanigans, is obviously contrafactual.

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