This may well be the most important article on CD today.
Why? Because even if the Democratic party finally finds it's progressive spine and Dennis Kucinich is elected President, with our debt structure we will not be able to control our destiny. We are in short being sold into economi8c slavery. Start learning chinese, Russian, and arabic becasue that is where all our dollars are going to be. except for tihose wealthy greedsters who have fled to Paraguay, Dubai, the Caymans, and other non-extradictable hideaways.

When there are so many suckers out there, predatory lenders and negligent regulators asleep at the wheel of government -- the whole market shoots up. Even though I played by the rules, within my comfort level, etc. I've seen my assessed property values (taxes/insurance) shoot up unrealistically.

The Bush Dynasty is untouchable for some reason, they can DO NO WRONG. The crux of the problem: not sub-prime, laissez-faire approach, ponzi schemes, etc. But that we have a dynasty or class of people who are fully carnivorous and needn't be troubled with ethics or laws.

As long as the Ruling Class does well-what do we losers matter? You see, in the present mindset, if we have not clawed our way up to the Ruling class with the proper display of ruthlessness, lack of ethics or advantage of birth, it is due to some lack of effort or general incompetence and unworthiness. You see, it is because we didn't apply ourselves and demonstrate personal responsibility that makes it our fault, and, as a consequence, we are not deserving of the priviliges.

An economic collapse of the USA should be of concern to all Americans. It is almost inevitable that this will happen. My prediction would be no less than ten years from now. This collapse may occur even more soon and this is all independent of "terrorism" or "illegal immigration" or whatever inconsequential issue Americans complain about today. This inevitable financial collapse will be much much more worse than your Great Depression during the 1930s. The USA is simply in too much debt to swim out of. Ironically China, of all countries, is your primary banker (I thought most Americans do not like Communism), followed by Saudi Arabia probably. Do these two countries make Americans feel uncomfortable? The USA will eventually belong to China and Saudi Arabia to divide up however way THEY wish. Americans will have no say in this matter and probably would have to beg for mercy from China and Saudi Arabia. The fact that these two countries are among the worst human rights violators in the world may make asking for mercy a waste of time.

If the above scenario happens, most Americans I am sure will move out of their precious nation, or at least try to. Some Americans may have to learn other languages though. I have heard recently that some Americans object to the Spanish language and demand that only English be spoken in Government funded schools over there? No lo se. ?Es verdad? Well, if China and/or Saudi Arabia financially own the USA by default, Americans can be sure that these two nations will demand Chinese and/or Arabic be spoken in the good old U S of A (I can say from experience that the Chinese and Arabic languages are much more difficult to learn than Spanish is). Objection to a takeover will prove futile more so than objecting to your Government invading Iraq.

An economic collapse of the USA should be of concern to all Israelis.

It's ironic that the "less Guv-mint" folks are the first ones to cry, "but we did nothing 'illegal'" when it hits the fan.

Yeah, nothing is "illegal" because you want less "Guv-mint".

Good riddance Saint Ronnie.

Less gubmint is not no gubmint. The problem here is that in neither case is the market allowed to correct itself. The S&L deal and the subprime deal are/were bailed out with taxpayer money, when the banks who leveraged these and those who took them should be permitted to fail. Only this costs enough people enough money they choose to risk so that all parties have incentive (real incentive, not regulatory incentive) not to risk another loss.

For those who use subprime loans properly, they are a great boon. Banning them will merely remove one more tool from a free adults financial toolbox. Not one citizen's choices should be sanctioned by the State because lenders make poor choices or loan takers make poor choices. Risk is the nature of life.

In one case anyway, Bush didn't lie. He said to the oligarchy that they were his constituency. And they got their fascism.

Are you advocating a Depression as the invisible hand's correction of the market?
Because even when you advocate punishing the abusers--like we could possibly know

http://www.counterpunch.org/petras08252007.html

there are alot of innocent people who could lose everything when the bottom drops out.

As much as it may be nice to blame the current administration for all the world's problems (real or imagined), Congress controls the borrowing/spending of the federal government. However, there is not anywhere close to a majority in the House/Senate that is willing to turn off the "free money" spigots that buy them votes.

As long as the electorate is unwilling to hear "No" for an answer, believing that every day is Christmas from Uncle Sam, it won't change. Spending beyond one's means has become an acceptible personal and governmental long-term strategy. And many proposed plans to save those who bought unaffordable homes reward that position, often at the expense of more responsible members of society. This doesn't seem like an approach that encourages appropriate behavior for the future.

The secret plan is for The United States of America to file for bankruptcy, then emerge reorganized a year later, with a "privatized" Executive Branch working out of the KBR White House, while the Congressional board members meet in the Exxon/AT&T Capitol Building.

And, of course, a new corporate-country branding: FREEDUMBMLAND.

The man described below can scarcely be relied upon to build a solid economy for the world's largest market:

"A moment I've been dreading. George brought his ne're-do-well son around this morning and asked me to find the kid a job. Not the political one who lives in Florida. The one who hangs around here all the time looking shiftless. This so-called kid is already almost 40 and has never had a real job. Maybe I'll call Kinsley over at The New Republic and see if they'll hire him as a contributing editor or something. That looks like easy work."

-- Ronald Reagan in his recently published diaries, May 17, 1986.

Hey Paul . . . Your quote . . . "The Bush Dynasty is untouchable for some reason, they can DO NO WRONG."
The reason is simple . . . The money boys are making money. As long as that continues to happen you will not see BUSHies doing anything wrong.

Hey mirf59 . . .
Is that quote correct?
I had not heard that before.

"The Bush Dynasty is untouchable for some reason"

See Kevin Phillips' "American Dynasty" -- I'm sure most leftists have already read it.

"Even though I played by the rules, within my comfort level, etc. I've seen my assessed property values (taxes/insurance) shoot up unrealistically."

Following WWII, the rulers had to prevent returning GIs from being radicalized, as so many were following WWI; so GI loans were provided, the roads & highways subsidized to allow the new dwellers in suburbia get to the urban jobs while experiencing the sense of security & safety of living removed from urban conditions; owning one's own property or home has always been one of the foundations of the capitalist illusion -- "I bought it/built it/made it" all by myself, and all the infotainment media plant the image of the happy, healthy, free American family in their own homes. NOT to have one, or NOT to be in the course of preparing to buy one, is a mark of exclusion, of incapacity; and it helps to have the abandonment of the cities & their reduction, outside of the chosen enclaves of 'urban renewal' (chase the poor elsewhere, to even worse conditions), to a condition which can hardly help producing gang violence. Include the immense increases in renting apartments over the past seven years, and the "choice" involved in grabbing onto a raft which will appears to be able to carry oneself & one's family towards safe harbors, is reduced; they are being squeezed one way or the other, and in either case, the Market Fairy faithful will, while clapping for Tinkerbell, continue to chide the victims for failure to make responsible choices.

There will be a bailout for the big boys, the democrats will go along with it. All the little
guys will get is a note saying " Sorry about that".

"OUR ENEMIES...
THEY NEVER STOP THINKING ABOUT NEW WAYS TO HARM OUR COUNTRY AND PEOPLE, AND "NEITHER DO WE" " "yes, george, you never have stopped thinking about new ways to harm our country and people

DID YOU HAVE A SPEECH WRITER FOR THIS GEORGE, OR ARE THESE YOUR OWN GARBLED WORDS ?

MtnGoat is right. No bailouts for lenders should be the way to go. Capitalism, at best, is about creative destruction as much as it is about creative creation. Those who can't make a profit and run into financial ruin should be left to go broke and out of business. That's the big mistake of the old communist countries: they kept propping up losers by pumping them full of taxpayer money. I hope that those conservatives who are so proudly anti-communist remember this when corporate execs come crying at their doorsteps.

To protect borrowers in the future, why not mandate that lenders give them a graph of interest rates in the past? (No one can complain about it being an onerous regulation.) That way, people will be less likely to purchase an ARM (Adjustible Rate Mortgage) when interest rates are at record lows and instead more likely to lock in their rate with a 30-year fixed mortgage. But don't outlaw the ARM - it is an attractive option when interest rates are above the historical average.

I agree strongly that there must be no bailout, but the Dimocrats would do well to research age-old concepts of justice. The basic way justice has been delivered, world-wide and cross-culturally, has been to HUNT DOWN the wrong-doers, take the yaks/cows/horses/etc. back, and return them to the rightful owners.

Now I'm not sure how this translates to the crisis of usury in our society (far worse than sub-prime), though I have some ideas, but the basic concept is that you do NOT punish the whole society (a taxpayer-funded bailout) for the wrongs committed by a few. But whether Superfund, S&L, failed airlines (NWA here in Minnesota), the nuclear industry as a whole, etc. the consistent message from the Democrats is that the many should bail out the bad practices of the few. That's not justice. That's proof that crime does, indeed, pay.

Dichterfreund: Fairly decent analysis, but I'd take it one step further. That the ordinary state of human affairs IS to be a part of the community into which you're born, to not face 30 years of forcible ejection if you don't pay a tithe to the warlords (bankers and governments), etc. We've embraced a system which, in many ways, is little changed from feudalism -- control by institutionalized warlords. I believe, certainly, in reimbursing carpenters, bricklayers, electricians, etc. but there is clearly an essential stripping away that is done by our society such that "owning" property is seen as a goal. It's been prostituted as the de facto means to whip the laborers into action until they're too old to work -- at which point they might actually "own" something. Or still be stuck renting, with absolutely nothing to pass onto their children except landlessness itself.

More damage has been done to the U.S.A. by the Bush crime family than the 9/11 bombers. They bombed buildings cause they hate our way of life,Bush surrender our civil liberties. Never again vote for the party, but whats good for the country.

I too laughed when I first read the alleged Reagan diary quote provided by mirf59, but it is not a true attribution.
http://www.snopes.com/politics/satire/kinsley.asp

Also off topic, as I am by now ;)

It seems to me that the defaulted mortgages could be bought at discount by the
Federal government. The federal government could help a defaulter with restructured loans.

The question though is what is the value of the property?

There are so many loans that are underwater now that they are beginning to infect and destabilize standard markets. In many local markets properties are perhaps 20% overvalued. Now when local governments tax these properties, the declining value can affect the tax base. The services that are cut are usually public education.

Spiraling down of the housing market can destroy not only the lower income, but moreover the middle class that is leveraged well beyond reasonable expectations of repayment

"But it looks more like a "Minsky massacre," not an unavoidable economic downturn but rather a coldly-calculated hit, with the intention of transferring wealth from the lower and middle classes to an unaccountable few at the top."

Bush's "ownership society" will be a repeat of the one that took place after the 1929 Stock Market Crash; the wealthy will be the ones who benefit from the strategically manipulated losses of the unsuspecting majority. Yes indeed, U.S. Citizens will once again experience how the elites write and orchestrate our economic history to enrich themselves at the expense of the rest of us.

The lead of the story about "Millions of Americans losing their homes" caught my attention. Most of these people will not lose much/any equity since they had none to begin with or their irrational greed led them to gamble the little they had--that's why the sub-prime loans were the only option. They were equally guilty of gambling against an unknown future. If these foolish gamblers didn't put up a healthy down payment they have no reasonable claim to ownership--at best they were were renting with a option to claim home ownership later if they got lucky.

I really don't want to be harsh (or I wouldn't be reading CD but I have to say a part me mumbles "Victim of this, victim of that..." while reading the current press. There will always be crooks and schemers. The truth is that the "victims" of this generation are intellectually lazy and unwilling to admit it. Most didn't invest enough effort toward education in a rapidly changing world and so their incomes are limited. I enjoyed a very middle-class childhood and graduated from high school in 1973. The unemployment, oil prices, and inflation of the 70's and early 80's made deep impressions on me. It took over 16 more years to get the right education and proper financial security before we bought our first and only home. We could have bought MSFT or DELL stock. (Unfortunately) We chose the safe route and paid off the mortgage early and bought used cars to give us resources to put kids through college later. Life is about choices.

But I have to admit my wife and I have raised six kids who don't seem to have learned many lessons in money management. They see our sacrifices and delayed gratification as unnecessary. The last 25 years have been so good they have no fear of the future. They weren't spoiled by us but they foolishly chase dreams that are not founded in principles of rational money management or even good arithmetic. They follow the cultural mantra of irrational hope and pay-as-you-go. I could give you some comical examples but it would be too painful. Only with extreme caution should we "lenders or borrowers be". Let the lenders and borrowers suffer the unmitigated consequences--it will leave all of us a little wiser...

PS: I will leave the discussion the crimes of the political and business elite to another time. :-)

Like always, there is no want for opinions. We have the typical libertarian account. Mtngt seems to think that these reprhensible "tools" for adults have a place in society. Others seem to think that we will need to learn to speak another language. Please. We live in the only society that used nuclear weapons when we may have not needed to do so. Do you think that if push comes to shove, that Canada will not become a part of the US? That we won't make a deal to carve up other countries? The problem that the US government faces is how to redifine our culture. We need to force our leaders to listen to us befor it is too late The answer isn't less governement, its less pork, less defense spending on duplicate weapon systems, and more spending on health care, pension reform an a new path to reclaim trhe soul of the America that never existed, but was always envisioned.

NOT IS TURNING IN THE TITLE,___ 'HAS TURNED'

Bush has ruined us.

In this nation we have three groups of people, those with their heads stuck up Bush's butt, those whose heads are up their own butt while trying to kick Bush's butt and last but in the main don't give a damn whose head is stuck up whose butt they just want to make a living and for the other two groups to stop messing up their lives.
Bush is not the man who caused the United States to be the way it is today but is just a continuance of a period of empire building and mass thievery of long standing.
Much as Bush tries to indoctrinate people into believing that the world changed on Sept.1 of 01 so to do the people who were a part of this thievery and those thieves and slight of hand and mind artist were not all elected or Corproate heads that put Empire building in motion.

"Spiraling down of the housing market can destroy not only the lower income"

How will decreasing cost of housing destroy the lower income?

"Mtngt seems to think that these reprhensible "tools" for adults have a place in society."

of course they do. Not all of us are incompetents or children, as so many seem to think. I realize managing everyone as if everyone are incompetent or children is very popular, but this is simply not the case. For those of us who are competent adults, these 'tools' are simply tools, they're not reprehensible at all.

Why don't you go find someone who agrees to let you make decisions for them because you are smarter, then keep them from signing up. They'll deserve it.

The rest of us do not deserve to be micromanaged to suit you.

"We need to force our leaders to listen to us befor it is too late The answer isn't less governement, its less pork, less defense spending on duplicate weapon systems, and more spending on health care, pension reform an a new path to reclaim trhe soul of the America that never existed, but was always envisioned."

Good luck with that. Every day or two here I am told it is illogical to pursue a system that has never been proven. Apparently, as many 'progressives' 'know', what has never been proven in real life is not legitimate to pursue.

How everything we have now, which began as unproven in the real world, got built and works, I have no idea. After all each item and system was only a dream at some point, yet by their principle, it shouldn't have been tried to begin with.

I never get an answer on this simple conundrum, probably because even the proponents of this fallacy become too embarrassed.

But back on topic, you're going to have a heck of a battle to increase health care spending. All we need to do is hearken to the IRS, the DMV, point to Canada's waiting lists and the UK's people getting superbugs in their 'flagship' hospitals, and we can corrode support for such foolishness. The State has *zero* buisness destroying 1/8 of the nations economy in order to take control of what they should leave entirely alone to begin with.

My ancestor . a bastard child of an Irish lass and an English soldier came to hese shores in mid 1600's because it was a land of opportunity. Hundreds of millions more were either born here or emigrated to these shores since his time because of opportunity.
by the mid 1920's and into the 1930's the opportunity had becomne less and less possible because by then the few now were limiting the many and denying them the same opportunitys they had once used.
Americans who still remembered why they had fought the British, for denying them opportunity, said no once again and broke up the monopolys and their political machinery that had let them pass laws that limited opportunity except to themselves.
After a second world war the new economy sprung forth with opportunitys overflowing so that any industrious citizen even those of limited education could reah a status of middle class people the like the world had never seen before.
To the majority of its citizens that is, for there were still hangers on of the old beliefs who found blacks and poor people necessaary to once again begin a growth of wealth by exploitation of political and military power within a nation constantly at war.
Both partys systematicly began limiting opportunity but in different ways, one by urging conformity by hard work and hating government, and the other loving government and urging conformity to governmental needs.
teh gradual merging of these two fields of thought had been warned agaisnt by many past Scholars of Amerianism with the last warning coming in the 1950's by a President who found he was a President in name only, Eisenhower, so he told us in kind words that we were screwed and then he went back to where his heart had always been, onto the golf course.
Eisenhower rang the death knell to the last vestiges of a Republic ideals "Of, For and By the People and the beginning of the National Socialism phase of the United states.
When Ike went golfing the United States populace went on a shopping spree and those of the old beliefs with the new technology, and a constant state of warfare let the people believe that what they were doing was in thier interest until they had taken nation so far out of the old representative forms there was no way of turning back.
The new owners of world will not just sit and listen for they do not have to sit and listen as theri plans are not just for the immediate but already are set in motion for tomorrows reality and to those who believe talk and old laws are going to sway them, a; a vast majority seem to do so more out of fear they will lose their own comfort zones of economic security and beliefs in humanity as humane than out of care for humanitys survival in dignity as a whole.
Humans will survive no matter the form of government, the real question is, what form will that humanity assume.

Okay, can an economics guru explain why private companies make the money off the wars and the military doesn't? Or does the military make a capped amount and the rest goes to private companies?

Or is it that private companies just throw money to have the laws worked(?) for special interests?

Help! (Is this public information material, Mr. Nader?)

MtnGoat August 27th, 2007 3:18 pm

"when the banks who leveraged these and those who took them should be permitted to fail."

I agree in principle, but when banks start to fail, panic can set in and things can quickly get ugly like 1929. Everybody knows the bubbles in the financial markets and real estate can't stay inflated forever and the gubmint is trying to engineer a soft landing for the FIRE sector at the expense of the little people. What else is new?

The military is corproate and is but the one branch of a much larger corporation.
The military is not a part of the governing bureaucracy, that is another branch within the overall corproate structure.
The top military men are the CEO's and the heirarchy runs from the top down and uses much the same managment techniques of a supplier of manufactured goods.
their budget though supposedly resting upon two year income plans is actually much longer a priod than that with soem projects under more or less permanent funding for almost 20 years now.
today we see military CEOs and junior administrators going directly inot the very same departments in corporate entitys they dealt with while in military.
In fact the Marine Corps usage of less men and materials to get its work done is a model often studied by cororate managers for lean production, just in time management from its very efecient Supply down to its personell training techniques.
the military is not as most people think The most ineffecient use of nations resources but it is in fact teh huge bureaucracy of a antion wherebyh 50% of its populace are needed to manage the country.
This includes everthing from educational to city park or sewage and waste water managemnt personell.
Domesticly the proceeds from sale of US natural and usage of human resources and by taxing productivity of its populace pays for the supply needs of this branch of corproate.
Teh main collector of revenue is not the Corproates as in industrial or information services but within the finacial centers where the cost for managing the money supply is also taxed; or in more relative terms a user fee is charged for all transactions and money movments.
The income in tax's , import duty, capital gain etc. from the top 500 companies listed on stock exchange provides more than enough to pay for cost of civil government.
As for a cap on military yes there is one, in reality two, public and off the books, and within the civil side of the bureaucracy ledger books is hidden away much of the true cost of military spending.
Military research is mostly funded off the books as such through many programs, from educational budgets,to space budgets that are not rely hidden but given enough cover to pass everything but unusual scrutiny.
teh 80 billion dollars in educational budgets yearly only 10% goes towards managment fees within those organizations and without these organizational fees and the other 90% for military and corproate study programs these university professors who double dip in think tanks would see a drastic cut in their pay checks and our chldren see a corresponding raise in their educational cost until only the very rich would or could afford such.
That is the basis of what pases for American free enterprise system, with a central bank loaning amounts over the real income of nation and then recieving it back with interest by and from our overseas and some domestic returns that keep the US humming along today.
The Central Banks are not US they are International so while they rob us to pay themselves they have much the same deals ongoing overseas as well.
A simplified idiots version upon why the United States has become a National Socialist Entity without the people realizing it and why today teh Governemtn is borrowing hundreds of billions to pour back into economy to stave off to rapid a decline in our GDP and thereby give such people as RON Paul who is running for President some traction in this next election.
Basicly the American popualce is holding breath hoping that the system works or at least when it kicks us in the wherever it will not hurt too much.

Aside from maybe the threatening gestures of Cheney to bomb Iran, this topic seems most important and in need of immediate attention, and yet so little understood by most, including me. I admire those of you with economic awareness and insight, it's helpful to read your comments.

Just Thinking, I agree with you. My approach is similar. For example I refuse to buy new vehicles and still drive an 18 year old pickup. The repairs I've had to pay for in the last few years don't even come close to just the interest payments on a new truck. Yet nearly everyone in my area is driving a huge, shiny new truck, most of which are financed, and being financed the fees are higher, insurance is higher, etc.

But to your point about "intellectually lazy victims", I have an acquaintance who works at a truck dealership. He's in sales, at the "back end" of sales, that being, the selling of finance, where in his words "the real money is made". Once the "victim" thinks they have made a deal and thinks the vehicle is sold, he then takes over to do the real selling, and he is continually amazed at the ignorance and gullibility of the general public. Seldom do they ever do the real math, or question "add on" fees, or look at other financing options. They primarily want to drive out with their shiny new big rigs and worry about all that payment stuff later.
It is/was the same with the housing market, few ever took the time to really look at what was being sold. Now, those of us cautious ones may not face a foreclosure but, we may suffer along with everyone else when the economic meltdown occurs.

The corporate media machine does an amazing job of selling us all kinds of crap, materially as well as abstractly, making us think we are "buying the dream".

Hide Behind, interesting posts, thank you. By the way I too am a descendant of an Irish lass and English soldier, settled in Rhode Island (Rogues Island)in 1648. I was raised with the awareness of the long struggle for freedom throughout the centuries. However reading Howard Zinn in college began my journey of disillusionment. Despite that, I have a deep seated trust that we as a people will somehow pull through this impending catastrophe, and I don't mean just the financial one.

Mountan Goat asks, 'How will decreasing cost of housing destroy the lower income'.

The cost of buying houses may drop, but the interest rates will go way up. In addition the price of everything else will go up, as it already has. Meanwhile, many large and small company's will fold. There will be many more out of work, the lower income people who have less education will lose their jobs to those who have higher education but have to take jobs such as drivers, clerks, managers at fast food outlets and convenience stores etc. It snowballs Goat and the ball is rolling downhll now. The lower income folks feel it first,__ just like always.

msmutt August 28th, 2007 1:38 am

Okay, can an economics guru explain why private companies make the money off the wars and the military doesn't? Or does the military make a capped amount and the rest goes to private companies?

The basic difference is that the military is a taxpayer funded government entity that makes no profit, and there are no shares to buy that will increase in value because of war. It is simply a cost that the taxpayer foots the bill for.

As for private companies they make equipment or provide services with the idea of making a profit.

IE: A contractor bids to provide a service to the military for 30$ per hr per employee. They then hire workers to do the work at 10$ per hour. The 20$ per hour difference minus their expenses, payroll, admin etc. is then their profit. If they are a public company and sell shares then their share value will normally go up based on the value of the contracts they have successfully bid on and as the price goes up the shareholders will make money on the appreciated value. For the taxpayer it is simply another added expense that they foot the bill for.

Lobo Gris

Just Thinking:
When senior citizens are conned out of their life savings by sweet talking con men do we blame the victim or the con men?
Before you accuse others of being "intellectually lazy", Just Thinking, perhaps it would serve, instead of accepting simplistic excuses, to consider that there are a host of reasons, causes, complex dynamics that keep many locked into a socio-economic dead-end cycle--where only the exception escapes.

More than anything, I despise the libertarian greed-is-good credo that worships the invisible hand despite the evidence that it is the biggest scam for con men to bring this country to it's knees. I hope it implodes--not because people will suffer, but it because it is the only time things are inacted to improve the lot of those who do suffer. The suffering becomes so great it becomes impossible to blame the victim instead of the system that exploits peoples faith in the American dream.

Wasn't there some executive order recently issued having to do with seizing property? Hm, I don't particularly care for this order, but perhaps it might have some "one-time" value if used for the benefit of "the Commons" particularly being that everyday folk are the ones who have enabled concentrated wealth in the first place, and everyday folk are the ones paying the price for sellers who are not bearing the full costs of products sold (as Adam Smith called for long ago). You know.

In fact, these few individuals with all their money - maybe they ought to "get some religion" and just give it up as a beautiful gesture in recognition of this supposed "land of opportunity" where many of us reside. Hey billy g., warren whathisname, and the rest of the filthy rich. What ya think about this? It would be great for everyone - wouldn't it?

Of course, there are always some other options (most of which are very unseemly involving continued descent into further chaos), but I'd just assume not talk about those if we don't have to......

Peace
Ken Hausle

"Bush administration will focus on bailing out predatory lenders rather than helping Americans keep their homes."
Bush seems to be bailing out every corporation but they are not making any money. Bush's corrections are a joke the corporation just turns around and rips off the public, lays off workers and whines because they cannot make money.
Education? Plenty of moslems in arab countries very educated who are choosing the path of terrorism mainly because there are no jobs and opportunities. A lot of countries will not take the path of ripping their citizens off. I find this untolerable and unethical from a nation such as ours who say they are for family values and protecting us from terrorism yet they feel this is o.k.
I wonder what would happen to us if we wanted to ignore a few laws here and there. Not pay taxes, not insure our vehicles or whatever. Would someone be there to bail us out. Of course not, as poor americans we would be told to plead guilty to the lessor charge.
Suppose we sent an agreement to the IRS saying we would pay them extra money but put in all kinds of clauses and such and in the end would pay them nothing.
Would this fly just because they signed it.
Did New Jersey have preditory lenders? Just wondering as a lawyer is required to be there at all real estate transactions.

KEM PATRICK,

What's the "natural law" that suggests that interest rates must go up if prices go down? We're not dealing with physics or even supply-demand here. If what you suggest is true, the causation is sheer greed. In order to preserve their exploitation, dollar for dollar, the usury industries will adjust upward?

It wasn't always this way. In 1862 with the Homestead Act you could get 40-80 acres for a mere pittance, almost straight off your immigrant steamship from Europe.

There's no natural or physical law that usury must exist at a certain return rate for wealthy bankers and foreign investors who apparently own America at this point. We need to tighten the noose around what one poster here so-aptly called the FIRE "industries" (finance, insurance, real estate). They don't actually produce anything. We are quickly becoming a nation whose economy is built on a massive ponzi scheme.

My dream would be able to pick among home prices with a large magnitude spread. As with cars, you can get a $100, $1,000, $10,000 or $100,000 car. Pay that amount, whatever your comfort level, the lien is removed, and the car is yours. There is no light at the end of the tunnel for real estate. Why can't I find a $1,000 home or a $10,000 home? I mean to own that property outright. People used to be able to make a living as store clerks, bus drivers, even gas station attendants. Hundreds of occupations now are totally inadequate. It's not the occupations -- it's the racketeering around real estate.

If I could roll my meager equity into a $10,000 home, buy it outright and be freed from usury, I could actually generate some savings, college money for my kids, and perhaps start a small business. But the market has been gamed far to the high end of magnitude that most people have virtually no extra money. Indeed, even my Air America affiliate (which I now consider to be a hopeless shill) was running ads on how to take out home equity loans. There's only so deep that Americans can scrape when they're already at the bottom of a bucket.

MtnGoat:

Not here in Minnesota anyway. Check these URL's:
http://www.bestplaces.net/
http://www.nhc.org/chp/p2p/
http://www.edinarealty.com/RECoHomepage.aspx

According to bestplaces.net, the median Minneapolis was $306K (http://www.bestplaces.net/city/Minneapolis_MN-52743000000.aspx). Basically the only homes under $75K are tear-downs or in gang/drug neighborhoods.

How about in rural areas? Want to get a small plot of land and farm it? Want to open a shop in a small town and sit on a couple acres for gardens, etc? Good luck. You tell me where it's financially viable and I'm there. The market has been racketeered/speculated/flipped by distant entities, not hooked in to the local economy. I've got relatives in Minnesota small towns who are basically priced out of them. There are several reasons that small town America is dying, and the fact that their land values are speculated by people outside of those economies is probably THE primary cause.

Sure, we have lots of new toys to keep us distracted, but show me an MLS listing of a cheap/safe home as I described earlier, well within the ability to avoid the necessity of usury. And I'm there. I'll buy it outright, not as an "investment" but as a place to raise my kids, and take my extra money and set it aside for college, start a small business, etc. Rather than send it all to Chase-Manhattan, JP Morgan, Goldman-Sachs, etc.

MtnGoat wrote, "The problem here is that in neither case is the market allowed to correct itself. The S&L deal and the subprime deal are/were bailed out with taxpayer money, when the banks who leveraged these and those who took them should be permitted to fail."

Well said...bailing out the perpetrators of this "scandal" is against capitalist rules! There must always be a winner and a loser. Trickle down theory, my ass. More like the "Bend-Over-and-Kiss-Your-Ass-Goodbye Theory."

Dichterfreund, you wrote, "Following WWII, the rulers had to prevent returning GIs from being radicalized, as so many were following WWI; so GI loans were provided,..." In using "radicalized," do you mean in the sense of anarchy? The reason the gov't passed the "GI Bill of Rights" was to keep the millions of returning soldiers from entering the slowed job market due to reduced need for wartime goods. That would have created anarchy! By 1944 when the GI Bill was passed, the government had already been planning for their return and the known impact on the American economy. Soldiers were given unemployment benefits for 52 weeks, education benefits, VA loans, etc. This "government handout" created the booming economy of the late 40s and the 50s, back when the government invested in infrastructure, hospitals, and above all, its PEOPLE.

MsMutt: Glenn Greenwald's movie "Iraq for Sale" explains the war profiteering that is going on very well. When the government has work that needs to be done, normally they put out requests for bids and numerous companies bid on chunks of the pie. Now, the government/military has given just a few companies, e.g. KBR, Haliburton, Blackwater, etc. "no-bid contracts" to do the work that American soldiers would normally do, whether it's in battle, construction, food services, etc. (Anyone remember the dreaded "KP" duty, peeling potatoes and such during WWII, Korean War, and Vietnam? What a riot...yuck yuck.) Another problem the film talks about are the career soldiers who have had their jobs, which they've been trained to do, taken away by KBR employees, and our soldiers end up on guard duty wondering what the hell just happened. KBR and Halliburton were both charged with overcharging the gov't for services, as well as NOT providing services, or sub-standard service. It's no surprise the war's not going all that well!

"Bush's military adventurism, not to mention his administration's exorbitant tax cuts for the wealthy, gutted the surplus of $128 billion Clinton handed him in 2001 into a deficit of well over $200 billion today. And Bush has simultaneously increased the national debt by over $3 trillion (to roughly $9 trillion), effectively nailing each and every US citizen with a bill for almost $30,000."

For those with a short memory, we were paying just over $1 for a gallon of gas in 2001 and our health insurance premiums were at least 60% LESS than what we're paying today and our coverage was much better than it is today.

Food and other consumer goods over the past 6 years have risen sharply while the U.S. dollar was strong. Historically, consumer prices rise when our currency is weak.

Ronald Reagan's "DEREGULATION" and Bill Clinton's "NAFTA" essentially set the stage for King George to step in and implement the royal screwing of American citizens.

The problem is the Federal Reserve. The Federal Reserve is perpetually loaning the government money. When we pay taxes on April 15th we are paying the interest on the US gov't debt to this group of private bankers. The Federal Reserve is no more Federal then Federal Express. The Federal Reserve makes the most money as do all central banks when a country is at war. The gov't has to keep borrowing money in order to win the war. We've had a long string of wars in an invasions since 1913. Think about it. The Federal Reserve also has the power to print money and more money you print and put in circulation the more you debase fiat currency. Our currency is not backed by gold. We went off the gold standard a long time ago The dollar by the way is in free fall compared to the Euro, Yen, and Pound. The Federal Reserve has enormous power and determines how much interest we pay on car loans, business loans, housing loans etc. They can raise interest rates or cut them at a whim. Congress cannot regulate the Federal Reserve. I suggest watching this video below:

http://tinyurl.com/37au9j

GOAT:_______ IF I AGREED WITH YOU ON ANYTHING, IT WAS ONLY BECAUSE YOU AGREED WITH ME. If it should by mere chance to ever, ever happen again, please keep it to yourself.

"Okay, can an economics guru explain why private companies make the money off the wars and the military doesn't?"

I'm no guru but I will tell you this, military members should make far more than they do, but many would complain if the military budget was increased to do so. That we subsidize adult citizens here for no work, and pay those who work for us and take tremendous personal risks basically welfare wages, is really backwards.

"More than anything, I despise the libertarian greed-is-good credo that worships the invisible hand despite the evidence that it is the biggest scam for con men to bring this country to it's knees."

There's your first mistake. There is no libertarian greed is good credo. That's you and others falsely putting your judgements into ideas you don't like, claiming they are held by those you attack, and judging not the actual credo but your misreprentation of it. It's a strawman deal where you judge the strawman misrepresentation instead of the arguments actually made.

The libertarian 'credo' is that you have the right to decide for yourself what is good, and serve that good with your mind, labor, choices, and actions without anyone interfering as long as you do not steal, cheat, defraud, or use violence against someone else. How you choose to use your life and your choices is up to you. It's a matter of elemental respect for everyone around you, allowing them to pursue their lives without being knuckled under to what you think is best.

"and everyday folk are the ones paying the price for sellers who are not bearing the full costs of products sold"

The everyday folk will pay the price regardless. You do not seem to understand how trade functions. Sellers do not mint money. They have no indepent supply of it. It ALL comes from the buyers.

Even if you attempt to insure what you call the 'full cost' comes from sellers by enacting laws, it will STILL come from buyers, because that is the only source of revenue for the sellers.

"People used to be able to make a living as store clerks, bus drivers, even gas station attendants."

You can still make a living doing those things if you are willing to live without what we have today that did not exist then. You are comparing conditions that are not the same. If you never want access to health care that did not exist in the time you discuss, and only want to set a broken leg or have an appendix removed or maybe get some penecillin, and you are willing to die from cancer without treatment, diabetes with rudimentary treatment, and any other number of ailments then that pretty much meant you were a dead man walking, your costs would be much lower.

If you want to live in a house with no AC, no stereo, no computer, no vcr or DVD, no cameras or other consumer gear of this nature, no flatscreen, X box, power hedge trimmers, or any of the other consumer goods that did not exist then, you can do so..for much cheaper. Ditto for travel. If you never fly anywhere and only take the bus or the train, you can do so for much less.

Don't forget not to buy prepared foods of most kinds, do not go to fast food of most kinds, and eat simple meals you prepare yourself from whole foods.

The fact is many, many costs exist now that did not exist before, and most of them are *voluntary* costs. I know people who live without many of these things, and they do live far cheaper on low end jobs... because they want to.

Comparing conditions now to when a gas station attendant could live on their wages without taking into account the explosion in discretionary spending items AND the immensely better health care is not valid.

From Bill Woolsey's "Who Owns The Fed"

The chief problem with the theory that the private owners are making huge profits from the Fed is that the Fed transfers large amounts of money back to the U.S. Treasury each year. In 2003, the amount transferred was $22 billion. Since that is exactly how much interest the Fed earned from U.S. securities, the net cost of the Federal Reserve to the U.S. taxpayers was zero.

Zero? The conventional view among economists is that the Fed makes money for the government. How? One way to look at it is that if the Fed didn't own these government bonds, then someone else would. Those investors would not transfer their earnings back to the Treasury. By having the Federal Reserve own a portion of the national debt, the U.S. government saved $22 billion in interest expense in 2003.

Conspiracy theorists like Schauf have proposed that the government replace Federal Reserve notes with "greenbacks" — U.S. Treasury notes that bear no interest. They claim that this would free the government from paying interest on part (or even all) of the national debt.

If the government replaced Federal Reserve notes with that sort of currency and retired interest-bearing debt, then the government would not have paid the Federal Reserve $22 billion in interest. But neither would the Fed have transferred the $22 billion back to the Treasury. An exact match doesn't occur every year. In 2002, the Fed earned $25 billion on government bonds and transferred back only $24 billion.

Still, that didn't create an additional $1 billion "profit" for the member banks that "own" the Federal Reserve. The member banks make six cents on each dollar they are forced to have invested in the Federal Reserve system. In 2003, the total dividends to the member banks were $518 million. That amounts to .02% of U.S. government spending. It amounts to about .5% of the $100 billion in total commercial bank earnings.