Who To $hore Up And Why..

[Sihouette]

Here's a thread for posters to put their favorite part of the ailing economy up for inspection, weighed against how effective stimulating it would be in actually saving our country from a disturbing downward spiral akin to the French Revolution..

Here's my thoughts:

If they did nothing else but prop up homeowners with letting them off the hook for just the interest on their payments for one year, people would stay in their homes, housing values therefore would stablize, bank's bad paper would regain strength, new loans would start being made to new enterprises..stimulating the tax base. More people would have more income to spend on durable goods...boosting sales in the retail industry, cars included.

But you see, there is one fatal flaw with that plan: no $50 million dollar private corporate jets for the uberrich. So yeah, it'll get shot down.

I'm telling you, instead of scattershot, they should hit that one little duck and watch the nation get back on her feet. If we make the same mistake France did just before the Revolution, making sure the aristocracy is tended to at the expense or the poor at the end of their ropes..there will be no more country left to party in for the rich. Trickle-down is a MYTH amongst greedy humans. No better example of that can be seen than the recent attempt to purchase a $50 million dollar jet with bailout money FROM THE POOR who will ulitmately pay the tab.. They really are at the crossroads of making the exact same mistake Louis and Marie did.

Relieve the interest on homeowner's mortgages.. Put the money there to shore up the banks for a year. Watch things grow back on the financial moonscape...

Or listen to a bunch of spoiled rich babies whine about tax cuts for the superwealthy and watch heads roll...and a nation go down the commode. I think it took like two centuries for France to recover from that blunder. Put on your seatbelts, we're in for a LOOOOONNNNNG rough ride if the GOP gets its way..

I just can't get a Boehner anymore for the GOP's tired facade of "Trickle-Down" economics..lol...

 

[Sihouette]

Another pet project of mine to get America back on her feet would be a fund earmarked for encouraging/educating people to turn a portion of their suburban flag lot into a victory garden. I was visiting a city over the holidays and noticed with some awe how nary a person had a single edible plant growing in either their front or back yards! Nary a one.. There were tons of ornamentals, many of them poisonous. But any olive trees? No. Any banana trees? No. Avocados? No (I think you can guess where I went..) OK...to be fair I did see one yard with a lonely orange tree...hardly enough to feed the neighborhood..

People need to know what to grow, how to mulch their yard trimmings and how to keep the proper amount of moisture for a given crop in the soil. Basic stuff for an old timer like me..but I got the feeling like if any of them had to put a potato in the ground they'd starve in a week..

Now I sat down and did the math of that many people suddenly experiencing a shortage of either money or imported foods and wow! Golly... There'd be mayhem in less than three days.

People need to understand where the very very basics of what they consume on a daily basis actually come from and, God forbid, they may need to rely on food they grow themselves to support themselves, a neighbor in need or even their local school or church outreach nearby.

So, that's another of the projects to bolster the nation: teach people how to garden. It's fun and they'd lose weight too, turning the soil and whatnot.

Of course, I could be biased..

 

[Pidgey]

http://www.phrases.org.uk/meanings/227600.html

Since you seem so fond of that quote. I'm not sure what you actually think it means, but people usually quote it thinking it means something quite other than its original meaning.

Anyhow... who to "bail" out...

So... we take money from the taxpayers to pay off... bad mortgages in the hopes of restarting the economy. But that means that the taxpayers have less money to pay their own bills... and rather less incentive to do so if defaulting means "somebody" is going to come along and bail you out.

Dang. I hate it when that happens.

I really don't understand why so many Americans seem to think that this is a local problem when it's being repeated literally the world over. We're not even in the worst shape. Europe's doing a pretty pisspoor job of it, too.

Finance works this way: the future needs to be perceived as rosier so that the chances of there being a paycheck down the line for however long that loan's for are good. If financial institutions take a real beating then the investors simply don't have a reason to keep investing. If you've got a 401(k) or something like it, then you're an investor. Shoot, even if you've got a savings account, you're still an investor.

Our problems are this simple: to have not been in this situation today, we collectively should never have gotten loans or gone into debt in the first place for whatever. That's called "living within one's means". Don't like that restriction? Then forget the big screen TV and quality time with the family and work your *** off to get ahead in life. Or, learn to live with less and be happier. People used to do that once upon a time when they didn't know any better.

Now, you've probably heard me harp about Peak Oil before. What most people just can't seem to get through their thick heads is that production doesn't even have to literally peak for its effect to be felt. All that has to happen is that the demand base gets larger faster than supply grows. OR, exploration and drilling costs go up, which is where we are today. ConocoPhillips just lost something like $31 billion in Q4. Yep, BigOil is losing like big dogs now and aren't we all just pleased as punch about that? Right up until the inevitable shortages start and that nightmare you're alluding to begins to happen for real. Just about that time it'll be the neighbor who voted with you for the same candidate who will all-of-a-sudden not feel the previous comradeship if he or she thinks that you've got one more lousy can of beans in your cupboard than he or she does.

How much land do you need to put into a garden? About an acre per person for a year's worth. Of course, then you've got to worry about your lazier neighbors helping you with the harvest. Or helping themselves TO your harvest, more like. And they'll be just as likely to ruin the plants before the harvest is even ready out of sheer clumsiness or stupidity. Most humans don't deal well with starving to death.

 

[Sihouette]

Good points.. But since the taxpayers of the future are going to get reamed anyway, no matter where the money is spent, we might as well give them a break at the get go.. and allow them to not have to pay the interest-only on their mortgages for one year. We put the bailout money into banks to cover their losses in interest-not-received...and we don't cover the losses completely, as a punishment to the banks for their bad-lending practices. After all, it was their sharkish get-rich-quick short-sided scheming which lured people in over their heads. The banks, like any business, will have to suffer the hardships of poor business practices, scale back corporate salaries and perks, tighten the collective belts of all who work there, cut the fat, and so on..

And anyway, people want to live in their own homes. Most people I know who are losing their homes are losing them to job losses and illnesses.. things beyond their control. Why punish people for this? The simple fact is that if John and Jane Doe mortgage payer have a year off from the burden of huge interest payments on their loan, then they have more money to spend on goods and services. Last time I checked, goods and services create jobs. You create more of a demand for them, you create more jobs. More jobs mean more people able to afford to buy back more land, buying back (or staying in) more land stablizes housing values and, therefore, the banks' net worth. Their net worth gets better, more loans are made. More people are able to access money to start new business, more business creates more jobs, and voila! The economy gets the zap to the heart that starts its automatic beat again.

The problem started with the housing crises...so that's where the solution needs to be.

People might even have enough money to buy new cars...and the auto industry gets a boost...and so on...

Since you seem so fond of that quote. I'm not sure what you actually think it means, but people usually quote it thinking it means something quite other than its original meaning.

If you're referring to the Marie Antoinette quote...I know it's not the original meaning of what she reportedly said. It doesn't matter. What matters is the message that type of hubris sends to the reader. At once it depicts the absolute disconnectedness of the rich from the factual plight of the poor. The recent attempt of the bailed-out bank to purchase a 50million dollar corporate jet for posh and speedy jaunting about, with taxpayers' monies who are dropping like flies, is equally illustrative of that point.

The hubris, the utter hubris.

 

[Pidgey]

Read the last part:

http://en.wikipedia.org/wiki/Let_them_eat_cake

I don't even begin to agree that the crisis started with the housing crisis, and for reasons I've outlined elsewhere. There's been a long-term downward trend that nobody's been able to stop that's demonstrated in plots of several economic metrics. What I haven't seen from anyone is a solution that addresses the underlying causality.

 

[Sihouette]

Do you mean the chronic cancer of suppression of R&D for alternatives where we are like global dinosaurs in this cutting edge, mushrooming technology?

OK, we agree then. Let me rephrase: The housing crises was the professed reason for the economic downturn. It was like a fever is to gangrene...an overt symptom of something much more destructive at work below the surface. The actual cause of our more chronic demise is the net result of decades of BigOil lobbying and corporate pressure. ie: the BigOil monopoly.

Maybe we need to tighten up the old Sherman Act and close the loopholes:

July 2, 1890

Sherman's march against monopolies

The federal government tackled the rising specter of outsized business conglomerations on this day in 1890 by passing the Sherman Anti-Trust Act. Sponsored by Ohio Senator John Sherman, the bill was designed as a direct strike against "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade of commerce among the several States, or with foreign nations." Along with attempting to block the future creation of monopolies, the Sherman Anti-Trust Act also called for existing monopolies to be disbanded. But, such seemingly strong tactics betrayed the bill's weak language. Written by Senator George Hoar (Mississippi) and Senator George F. Edmunds (Vermont), the Sherman Act was fraught with ambiguous terms like "trust," leaving it ripe for exploitation by both litigious business officials and savvy attorneys. Sure enough, the ensuing years saw anti-labor forces manipulate the bill in their crusade against organized labor unions. In 1894, these anti-labor efforts were legally sanctioned by the Supreme Court which ruled in United States v. DebsI that the Sherman Act did indeed cover unions, as well as hulking business entities.~
Source: http://www.history.com/this-day-in-history.do?action=Article&id=5914

 

[Dr.Who]

If they did nothing else but prop up homeowners with letting them off the hook for just the interest on their payments for one year, people would stay in their homes, housing values therefore would stablize, bank's bad paper would regain strength, new loans would start being made to new enterprises..stimulating the tax base. More people would have more income to spend on durable goods...boosting sales in the retail industry, cars included.

The number of subprime mortgages in default represent less than 2% of homes. This is not the cause of our woes.

The housing market in general is doing poorly more because new houses are not being bought. Obviously people realized that they could not afford to borrow 300,000 dollars to buy a home that should only cost 250,000 and that they would be better off paying off those credit cards that have reached an average of $8000 per card.

The stimulus package is actually big enough that the gov could pay off all those credit cards but that would encourage people to rack up more debt. We need to sit it out until those are paid off.

I'm telling you, instead of scattershot, they should hit that one little duck and watch the nation get back on her feet.

I could not agree more that scattershot is the worst thing we can do and it is exactly what this bill is.

We need the money to go to the places that help. Consider what happens when the gov bails out a failing auto industry; the companies that should have gone out of business continue in their reckless ways. Meanwhile if they had gone out of business some other new and robust company would have stepped in to take their place with wise business practices. The wrong thing is the bailout and the right thing is the opposite - the money, if it gets distributed at all, should go to the robust companies that would start. Problem: congress doesn't know what company that would be.

If the auto company failed some new start-ups would step in. the good ones would succeed. Millions of consumers all spending their own money with careful consideration would tend to support the companies that offered a good product with wise business practices. The blind market made of of millions of seeing individuals would automatically distribute that money to the robust businesses and the money would not be stolen first, it would not hurt our kids, and each person would make a deal they felt was a fair trade while they were doing it.

If we make the same mistake France did just before the Revolution, making sure the aristocracy is tended to at the expense or the poor at the end of their ropes..there will be no more country left to party in for the rich. Trickle-down is a MYTH amongst greedy humans. No better example of that can be seen than the recent attempt to purchase a $50 million dollar jet with bailout money FROM THE POOR who will ulitmately pay the tab.. They really are at the crossroads of making the exact same mistake Louis and Marie did.

Yes trickle down is a myth. It's a good thing that conservative economists don't propose that we do that. Moveing money from poor people to rich people is just as inherently unfair as moving money from rich people to poor people. What economists do propose is that we move money into businesses that hire a lot of people. I still think a free market is even better than that. how do you get money into the free market? Well for starters just don't take it out to begin with! Leave it with the people who actually own it and who have a vested interest in being very careful about where they spend it.

Will this stimulus package take money FROM THE POOR? The poor don't pay taxes so the answer is no.

 

[Pidgey]

The oil companies have done quite a bit of research into economically feasible alternative energy technologies. However, they also exist as enterprises to supply the consumer. This means you. If there doesn't seem to be enough money for R&D, it's because you haven't been willing to pay it so what you want is for your government to confiscate the money from you and do it anyway. However, you want the end product to be much cheaper energy for you in the long run and therein lies our problem: no alternative energy venture has heretofore paid off and become anywhere near as cheap as oil, gas and coal.

Therefore, about all we've been able to do is increase efficiencies. There are all kinds of interesting dynamics that mess with our overall utilization of oil though... take diesel, for instance: Diesel engines are generally more efficient but chemicals in their exhausts are more carcinogenic, too. And, worse, crude oil has a lot more gasoline components in it than the fuel oil distillates from which we get diesel. For instance, we get about 19.5 gallons of gasoline out of a barrel of oil and only about 9.2 gallons of fuel oil (4.1 gallons of jet fuel, too). source

So, let's say we all thumb our noses at BigOil and start driving diesels... what happens? Well, the cost of gasoline goes through the floor and the cost of diesel goes sky high, which leaves the uneducated consumer screaming about BigOil: "THOSE RAT B@STARDS!!!" Who wins? The people driving regular cars. Who loses? The people driving the diesel trucks delivering your groceries to the store.

Listen, forget the animosity towards the various producers of energy... what we all want is "work done". That's what we use energy for--to get work done. And if it comes to pass that the per capita net energy delivered to the consumer (again, this means you) starts declining, then there's your economy tanking right there. There happen to be many concurrent reasons for this very phenomenon occurring as we type. The world's smartest people have been on it like a duck on a junebug for several decades now and still haven't come up with a solution that offsets Jevons paradox. I'm sorry, I wish it were otherwise.

 

[Sihouette]

Bull****e. There's been plenty of money for many years, not the least of which from BigOil's profits themselves to R&D altnernatives. Alternatives aren't as easy to manipulate pricing on and this is why BigOil bribed, threatened and stonewalled alternative technology that Europe had in place decades ago back into the broom closet...hidden and collecting dust..

Moveing money from poor people to rich people is just as inherently unfair as moving money from rich people to poor people.

Hmmm...it's unfair to move money to rich people and to poor people. Yet in actual fact we did move quite a bit of money to rich people and once again, the poor got screwed. Soo....

In the interest of fairness...as you pointed out so nicely...we need to move..how much was it now? Something like 100s of billions to the poor before we can start over talkiing about what is fair and what isn't.

Yep. That's what we'll do..

 

[BigRob]

Here's my thoughts:

If they did nothing else but prop up homeowners with letting them off the hook for just the interest on their payments for one year, people would stay in their homes, housing values therefore would stablize, bank's bad paper would regain strength, new loans would start being made to new enterprises..stimulating the tax base. More people would have more income to spend on durable goods...boosting sales in the retail industry, cars included.

With the amount of ARM's that will adjust in 2009 it seems clear why the banks are holding money. Not to mention corporate lines of credit as well, but the banks are not lending money most likely because they are trying to shore themselves up for the disaster that will come this year.

Further, you do nothing to address the problem at the root of the problem. Artificial credit and major debt. You basically advocate for more of it.

I'm telling you, instead of scattershot, they should hit that one little duck and watch the nation get back on her feet. If we make the same mistake France did just before the Revolution, making sure the aristocracy is tended to at the expense or the poor at the end of their ropes..there will be no more country left to party in for the rich. Trickle-down is a MYTH amongst greedy humans. No better example of that can be seen than the recent attempt to purchase a $50 million dollar jet with bailout money FROM THE POOR who will ulitmately pay the tab.. They really are at the crossroads of making the exact same mistake Louis and Marie did.

You are attempting to claim that an attempt to buy an airplane is an example of trickle-down economics. That is a farce. The jet purchase was ridiculous, but it hardly defines an economic school of thought.

Relieve the interest on homeowner's mortgages..

Massive government spending... funded by the taxpayers....

Put the money there to shore up the banks for a year. Watch things grow back on the financial moonscape...

We have handed them in excess of $7 TRILLION dollars in bailouts and guarantees and yet they continue to need more. Fannie Mae and Freddie Mac are already asking for billions more. Claiming "put the money in the banks to shore them up" will cost well in excess of an additional trillion dollars... who funds that? The taxpayer.

Or listen to a bunch of spoiled rich babies whine about tax cuts for the superwealthy and watch heads roll...and a nation go down the commode. I think it took like two centuries for France to recover from that blunder. Put on your seatbelts, we're in for a LOOOOONNNNNG rough ride if the GOP gets its way..

What we are in for in is massive inflation if this spending continues.

I just can't get a Boehner anymore for the GOP's tired facade of "Trickle-Down" economics..lol...

Comments like this do serious damage to your credibility.

 

[Pidgey]

Considering it's the Wiki AND the nature of the subject, this is actually a pretty concise article on the matter:

http://en.wikipedia.org/wiki/Free_energy_suppression

Anybody who owned free or cheap energy technology would stand to make a mint, even BigOil. And if the Saudis had it, who are even now doing a bunch of R&D on alternatives, they'd be marketing it. Trust me. I've looked into a lot of alternatives and haven't seen anything I'd call promising yet in terms of economics.

 

[Sihouette]

Don't you mean massive and monopolized economics for an elite few?

Yeah right...only that whatever energy you produce, people will line up to buy it without question...just can't make a stinking fortune on it though... poor babies..

Where do you guys go to school at? The GOP Spinbot University? Say hi to professor Cheney for me OK?

It's not that money cannot be made...now listen carefully here...it's that the PRICES CANNOT BE SO EASILY MANIPULATED BASED ON "DIFFICULTY" OF PRODUCTION. You see...we know about the little OPEC dealio. Most alternatives are steady-eddys. Can't say the pockets of sunshine are harder to get at in the Southwest. Can't say the wind turbines aren't blowing so good out in Chicago... Can't say the geothermal wells aren't doing so hot next to steaming volcanos.. Can't say the water turbines aren't getting enough flow over Niagra Falls...

THAT is why BigOil has been suppressing...price fixing...gouging...tweaking with supply and demand of a "tricky" resource to extract.. Remember the speculators? The $5/gallon gas last year? I do.. It's why they also lobby for "clean coal" "nuclear" and of course, oil... because those technologies, those resources lend best to scare scenarios of "iffy supply"...uranium, coal and oil...all hard to get. Get it? Like gold or diamonds. HARD TO GET = EXPENSIVE. [read: "we can scare you into paying more than you should for the resource].

 

[Pidgey]

Listen, goofball, I'm working on my own little renewable energy project so $#*%can the attitude! I've DONE both economic AND engineering calculations on a bunch of the kind of stuff you're talking about and it's just not as rosy of a picture as you're thinking, not by a long shot.

A 4 MW wind turbine costs from 1.5 to 3 million bucks to construct and install. It's not uncommon to only realize a capacity factor of 15% but it depends where in the country you're going to apply the energy. The northeast is the hungriest, of course, and that's about what the capacity factor's going to be up there. Going through all the calculations and adjusting for conversion efficiencies, one such wind installation will generate the equivalent energy that we'd get out of 17 barrels of oil per day. Coal's cheaper. We've got a copper problem, though.

Solar cells? You can buy them on your own and then install your own system, haven't you yet? So what are you complaining about? It's there, it's available, go get yourself some and be FREE, FREE, FREE!!! What are you waiting for?

As to OPEC and production cuts to dicker with prices... their members cheat, always have and always will. But, in the final tally... it IS their oil, you know. They don't owe it to you or anybody else at any given price. And it's not BigOil doing that--it's an open market rather like an auction. Whoever wants to bid the price up can if they want the oil bad enough.

 

[Dr.Who]

Hmmm...it's unfair to move money to rich people and to poor people. Yet in actual fact we did move quite a bit of money to rich people and once again, the poor got screwed. Soo....

Yes, when the government forces anyone at all to hand over the money that they earned with the fruit of their labors and then they give it to anyone else that is wrong. Plain and simple.

If when you say that we did move money to rich people you are talking about tax law you would just be wrong. The poor don't pay income tax so none of their money could have been given to the rich that way. The tax laws have been progressive for a long time and a slight shift toward less progressive tax laws under Reagan does not make them regressive - just less progressive.

If you are talking about congressmen making laws that favor their rich friends you would be right. So the solution is to stop the congressmen from doing what is wrong, not to create an additional wrong to balance things out - even though the people doing the balancing are the very ones who are not to be trusted. Every time they tax their friends more heavily than they should they all just use it as an excuse to create more laws to favor their friends.

We need both fair tax laws and fair legislation. Not both unfair tax laws and unfair legislation in some misguided attempt to create fairness.

In the interest of fairness...as you pointed out so nicely...we need to move..how much was it now? Something like 100s of billions to the poor before we can start over talkiing about what is fair and what isn't.

We don't need to move any money to the poor to make things fair. all we need to do is to stop treating them unfairly in the legislatures. Do they have inadequate education? Then give them a good education not a pass on contributing to society through taxes. Are they discriminated against? Then stop the discrimination don't just give them a pass on contributing to society.

Our constitution demands that everyone gets an equal opportunity. That is what they should get. Our constitution demands that taxes should be fair. That is what we should do.

What I am proposing is what is right, legal, and fair. The alternative is wrong, unconstitutional and unfair.

 

[Pidgey]

Tell you what, Sihouette, why don't you start an alternative energy thread for home use and then use it to ask simple project questions. Make it a "how-to" or "how-do-I" thread and we'll work on providing real answers to real concept and construction questions. We can discuss the economics as well and explore ideas.