Romney: Debt is like ‘prairie fire’
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Willard’s an idiot and the scripts devised by his handlers are worse.
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How’s this? Fire anyone who talks prairie & “national debt”.
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Austerity is like a prairie dog. At the first sign of a challenge, it burrows into a hole and waits for the scary stuff to pass.
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Warren
I think there is a lesson to be learned here from Mit. The language that he is using Debt is like ‘prairie fire’. It just has to be switched to a budget surplus is like ‘prairie fire’ in a demand deficient economy. You probably won’t be cited for plagiarism. It may be useful to see how the mainstream using their words and learn from that. Since rational arguments don’t work with people who have theological ideas.
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Politicians are using leeches to put out a prairie fire in the forest.
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roger erickson Reply:
May 17th, 2012 at 6:44 am
@Tom,
And it’s a Fallacy of Composition to think that talking to the choir about politicians using leeches to put out prairie fires in forests as a useless metaphor.
But the humor does relieve some stress.
Back to that virtual Billboard Fund. Has one been proposed?
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Charles Yaker Reply:
May 19th, 2012 at 11:05 pm
@roger erickson, We need a doer who has time energy and drive to pull this off. But no no one has formally proposed such a fund oer then me and I keep hoping and bringing g it up because I think it has a great deal of potential.
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Ignorance is like a prairie fire in the forest
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Posts about politicians talking about debt are like a prairie fire.
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The GOVT destroyed our economy once again. If you think it was the banks, you are not looking high enough up the chain.
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The false ones always use metaphor. They can never get out of “metaphor mode”.
Bowles recently used “cancer” and Walker used “iceberg” recently. They dont understand what is really going on so they resort to metaphor exclusively, it’s a tip-off.
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Ivan Reply:
May 16th, 2012 at 7:51 am
@Matt Franko, But why blame the politicians. The blame clearly lies with economists. They’re the ones advising the politicians. They’re the pros in this area. If I had never been exposed to MMT, I’d be more inclined to believe a Nobel prize winning economist, a Treasury Secretary, and a Fed Chairman than a splinter group like MMT. The politicians are still trying to cure disease with leeches because their “doctors” are telling them that’s how to do things.
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Monica Smith Reply:
May 20th, 2012 at 1:22 pm
@Matt Franko, Indirection seems to be characteristic of the instinct-driven. I’m more inclined to identify euphemisms, rather than metaphors. The idea is to speak in riddles and confuse the enemy.
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roger erickson Reply:
May 20th, 2012 at 2:11 pm
@Monica Smith,
Ahh, you’re noticing that Pandora’s box never could be closed, Monica.
Indirection is what escapes excessive control by instincts, and can be called an essential instinct itself. Otherwise, there would be no difference between dynamic & static “value” metrics.
And you’re entirely right. Any tool, fixed-instinct or indirection, has a spectrum of uses, from helpful to harmful. That’s why “selection”, i.e., regulation, is a constant requirement. Even the tolerance limits for what are/aren’t helpful/harmful applications of habit-vs-indirection are themselves dynamic.
Engine tuning, market tuning & national policy tuning are always dynamic processes, and we’re surfers, not couch-potatoes. Or at least the survivors soon will be.
I really like Warren’s summary. “How do you get people to explore their options?”
Answer? Keep adjusting education & training until it’s a cultural instinct? :)
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Is anyone else pissed or confused about why gas prices aren’t moving down with the drop in crude oil? WTF is that all about? I live in LA, CA and prices seem to have risen the past couple weeks as oil drops. Thoughts/insights anyone? Warren?
perhaps they are noticing a shift in demand simply due to more economical cars on the road and so to make up the difference they are keeping prices high even in spite of oil being cheaper?
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Ivan Reply:
May 16th, 2012 at 7:02 am
@Mario, I don’t think the EPA has allowed a new refinery to be built in the U.S. since the 70’s so there is a bottleneck in the refining process. Also, we’re now switching over to “summer gas” which is more expensive to manufacture.
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jonf Reply:
May 16th, 2012 at 2:48 pm
@Mario, There’s a wikipedia article on contango that might explain some of this nonsense.
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@Warren if your still interested in running for office now is the time to buy billboards on the nations highways with the following or similar messages and sign thhem with your name and web site. “Mosler’s Law” ” Reduced deficits, a balanced budget or return to the gold standard will result in Recession possibly a Depression” ” the Fedaral Reserve sets the bond intrest rates not the so called bond vigilantes” “Standard and Poors lowered our credit rating and the intrest rate went down not up” “Austerity only causes pain look at Europe” and most importantly for me anyway. ” the young and old do not need to clash there is a better way”
People outside of the “choir” that don’t read this blog and New Economic Perspectives need to get the message then when it hits the fan they will be ready to join the “choir”
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WARREN MOSLER Reply:
May 17th, 2012 at 3:24 am
contributions welcome!
;)
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Charles Yaker Reply:
May 17th, 2012 at 10:54 pm
@WARREN MOSLER, While I am not wealthy and my wife will kill me do you have an organization that can start this and if so any idea how much it will cost for even just one billboard because I still think we need to get e message out to people other those interested in the topic
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WARREN MOSLER Reply:
May 20th, 2012 at 9:43 am
sorry, not anything i know anything about, but appreciate the effort!
“We will stop borrowing unfathomable sums of money we can’t even imagine, from foreign countries we’ll never even visit. I will bring us together to put out the fire.”
I love it. So pleased these foreign countries loan us all our money. Where did they get it?
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Ivan Reply:
May 15th, 2012 at 10:05 pm
@Jonf, Is the message really any different from Obama?
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jonf Reply:
May 15th, 2012 at 10:28 pm
@Ivan, Sadly, likely not since both seem to believe we are bankrupt, although I have yet to hear Obama talk about us borrowing from foreign countries. Maybe I missed it.
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WARREN MOSLER Reply:
May 17th, 2012 at 3:23 am
he has. and gone to china to negotiate with ‘our bankers’
WARREN MOSLER Reply:
May 17th, 2012 at 3:22 am
if not, who is more capable of executing?
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Charles Hayden Reply:
May 17th, 2012 at 4:38 am
@WARREN MOSLER,
Warren,
We need MMT: the Movie.
I think we are outside innocent fraud territory with Romney. These Hamiltonians know better.
Mike Norman Reply:
May 16th, 2012 at 1:29 pm
@Jonf, Exactly. Where did they get all those dollars from? Why is this always left out of the discussion? Absurd!!
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ESM Reply:
May 16th, 2012 at 2:18 pm
@Mike Norman,
Well, to be fair, some people use the term “money” as a metaphor for goods and services that “we’re” consuming on credit.
I think MMT still has to fight a battle against the very natural instinct people have that it is somehow destabilizng to consume more than you produce. That somehow the piper has to be paid, and when it is, it will be a bad thing. And we’ve had these issues with people who clearly do understand the basics of MMT.
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jonf Reply:
May 16th, 2012 at 2:46 pm
@ESM, On credit? what credit? we give them dollars, they give us goods, well Wal Mart to be sure, but goods.
ESM Reply:
May 16th, 2012 at 3:45 pm
@ESM,
@Jonf:
“On credit? what credit?”
What do you think dollars are? They’re little IOUs/credits. Of course, they’re credits with a variable and arbitrary value that is completely determined by the US government, which is why there’s not much risk in allowing other countries to accumulate them.
WARREN MOSLER Reply:
May 17th, 2012 at 3:36 am
dollars are tax credits
ESM Reply:
May 16th, 2012 at 6:11 pm
@ESM,
No, I think the budget deficit/trade deficit/current account deficit is all fine. I’m just saying that MMT-ers need to think a little bit deeper about what bothers other people about such things. The discussion here is often very shallow. Something like “doesn’t that idiot politician/economist/whatever realize that all we owe China is an electronic tax credit in a Federal Reserve account, and that the government can always clear the checks and can never go bankrupt?”
I don’t think that explains very much because the talk about going bankrupt or being in hock to China is really metaphorical. The worry is that some day China will want to exchange those electronic tax credits for real goods and services, which (in their view) will lower the buying power of the tax credits held by domestic residents and destablize our economy. The argument for why that shouldn’t be a worry runs deeper, and I don’t think in general it is explained very well on this blog.
Mario Reply:
May 16th, 2012 at 8:06 pm
@ESM,
The argument for why that shouldn’t be a worry runs deeper, and I don’t think in general it is explained very well on this blog.
I would agree with you there ESM (can you believe it!!!) ;)
I think the best way for America to counter act such a “threat” down the road with China is by vamping up our green technology, space technology, become experts in service sectors like law, accounting, medicine, IT, computers, etc., revolutionize our education system, and get health care going, etc., etc. In short I think America needs to push the envelope of possibilities in nearly every major sector of its economy and society. We need to be INVESTING in ourselves. The Chinese can have the more crude manufacturing and exporting market. That’s fine for us imho so long as we take advantage of the excess capacity in our nation and plow ahead of everyone else in the world.
We can counter external shocks to our economy by bolstering our internal systems. Unfortunately we seem to be back-pedaling at the very time when we desperately need to be pushing ahead. All b/c of a widespread failure to grasp simple functional concepts like electronic spreadsheets which MMT highlights.
WARREN MOSLER Reply:
May 17th, 2012 at 3:34 am
at the macro level you can’t consume more than you produce without consuming your real savings
Greg Reply:
May 20th, 2012 at 4:10 pm
@ESM,
ESM
How can you consume more than you produce? Is that even possible?
roger erickson Reply:
May 20th, 2012 at 6:56 pm
@Greg,
> How can you consume more than you produce?
> Is that even possible?
It’s called a Black Hole, aka a politician, aka the 1%
ESM Reply:
May 20th, 2012 at 9:01 pm
@ESM,
@Greg:
“How can you consume more than you produce? Is that even possible?”
You can consume more than you produce if somebody else is producing more than he consumes, and he gives you that excess production for whatever reason.
Do you live under a rock? What do you think the typical American has been doing for the last 30 years? Do you think college students produce anything useful while they’re consuming $50K/yr in education/food/housing services?
Mario Reply:
May 16th, 2012 at 8:16 pm
@Mike Norman,
plus alot of Warren’s policy proposals like payroll tax holiday, state funding aid, etc. all very much contribute to re-building America and protecting ourselves from international financial “battles” that could potentially arise down the road.
A properly educated populace is more powerful than mechanical soldiers. The Bhagavadgita proves that when Arjuna was given the choice between having Krishna as his commander in battle or having a legion of soldiers. His enemy (and family member) chose the legion of soliders and Arjuna chose the Master Krishna. Quality always beats quantity in the end. And this site is jammed packed with such quality. ;)
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Save America Reply:
May 17th, 2012 at 3:47 am
@Mario, “I think the best way for America to counter act such a “threat” down the road with China is by vamping up our green technology, space technology, become experts in service sectors like law, accounting, medicine, IT, computers, etc., revolutionize our education system, and get health care going, etc., etc.”
I watched a lot of congressional hearings on all the resources thrown by the obama administration into solyndra and others, as Obama himself has said energy independence is Job 1 of his presidency. In solyndras case, China just did it better for cheaper – the administration threw everything at it they could, legal and illegal, and just couldn’t win. Why should any nation try to do it when china can do it better? Imports a benefit. Why be so worried about energy independence when china willing to work themselves to the bone to give the world lotsa solar stuff? Maybe Obama should accept defeat and move JOB 1 of his administration to something we can do better – like maybe tax code for the global energy industry.
If Romney expects me to get up and start working picking strawberries and making stuff when I can get china man to do it, I aint voting for him, I like having the time to sit around and burn on MMT blogs and learn stuff, play warcraft world and minecraft and watch free porn, Romney will rob me of that with his policies.
Space technology! Why start the shuttle program back up when china willing to do it better? I saw star trek and they had an asian officer and monster pointy eared alien as an officer too. I am sure the chinese star trek counterpart has african and caucasian officers to doctrinate thier young that we should all work together right? Where is the chinese star trek?
I just watched some congress today about violence against women, where we can bring in all these great foreign women (imports a benefit) and crossbreed out all our differences, but some of those silly congressmen are saying we are BROKE, and we can’t afford to give citizenships and help to foreign women after thier husbands beat on them some. Some of my friends have brought over 20 or 30 foreign wives, and now new rules say they can only bring over 2!
I am very disspointed in US Government that we have so many congressmen that say the US is too broke to give citizenship to good foreign women that are getting beat on by uneducated, poor cultured, violent men. I am horrified that the government of the USA has now dictated that if you can’t find a good foreign wife after 2, FU, no more chances. Third times a charm eh? One friend started with a mexican wife, then panamanian, then costa rican, and finally found THAI was the wife he needed, but under new policies he couldn’t have done that, wow at the FREEDOMS us government is taking away!! What are the laws like in other countries for how many wives you can bring in?
All you islamic and african and indian and chinese women coming over to chase the american dream maybe won’t have a door slammed in your face, my heart bleeds for every one of you. Hopefully we can get these silly congressmen to realize we need desperately need you here to keep american woman from getting the big head and realize imports are a benefit and exports a cost (unless you exporting drama queen USA girl :)
WARREN MOSLER Reply:
May 17th, 2012 at 3:33 am
and what are the places the net dollars can exist? ultimately only cash, reserves, and tsy secs.
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WARREN MOSLER Reply:
May 17th, 2012 at 3:20 am
and what are the options for places to ‘keep it’- reserve accounts at the fed vs securities accounts at the fed, directly or indirectly
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Really? Obama hasn’t said that America is “broke”. He isn’t insisting on tax hikes? We don’t have “taxmageddon” coming on 12/31 if he allows the Bush cuts to expire, the Obamacare tax to kick in, and the FICA holiday to lapse? We are facing one of the most devastating tax hikes in the history of this country and the only way to stop it is to elect Romney.
Let’s face it. Neither party understands MMT. The question is which party will do the least damage. At this point, I’d argue the democrats insatiable thirst for tax hikes is the most damaging.
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Danny Reply:
May 15th, 2012 at 9:13 pm
@Ivan, I think after the elections both parties will quietly back down from their current posturing, at least in terms of what they actually end up signing into law in 2013 and beyond. It’s what they do best. Part of me even thinks that in private there are quite a few insiders on both sides that would welcome a split decision (most likely being a 2nd Obama term accompanied by a solidly Republican House, with control of the Senate being the rubber match fought in November) so there is no clear mandate to actually do any of the drastic spending cutting/tax hiking they’re beating their chests about right now. Muddle/Along ’14!!!!
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Danny Reply:
May 15th, 2012 at 9:14 pm
@Danny, erm, that should say Muddle/Along ’16. Where does the time go?
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Ivan Reply:
May 15th, 2012 at 10:00 pm
@Danny, The problem, in this case, is inaction as opposed to action. If they can’t reach an agreement, these tax hikes will occur automatically. I can’t imagine Obama running on his “tax the rich” platform and then agreeing within 6 weeks after the election to postpone what would be an automatic tax hike.
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Danny Reply:
May 15th, 2012 at 11:19 pm
@Ivan, The best one could hope for is some deal that includes face-saving nominal tax hikes for some, nominal tax cuts for others, spending increases for GOP pet project X and spending decreases for Dem pet project Y (or vice versa) that ultimately ends with no or little income removed from the economy. Then Barry O, Orange Crush, and the two Senate Majority/Minority geeks can have one of their awkward back-slapping press conferences and announce how their really shaking things up and “getting Washington working for the American people once again”.
Jonf Reply:
May 15th, 2012 at 9:28 pm
@Ivan, Then again the republicans have this insatiable thirst for spending cuts. Oh and debt limit arguments to get what they want. So let’s talk damage.
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Ivan Reply:
May 15th, 2012 at 10:03 pm
@Jonf, Let’s be realistic. If the Republicans win, they will extend the Bush cuts, eliminate the Obamacare tax, and perhaps cut the automatic adjustments in entitlement. The deficit will grow initially and it will be positive for overall economic growth. It’s much easier and cleaner to deal with fiscal policy on the revenue side than the spending side.
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jonf Reply:
May 15th, 2012 at 10:26 pm
@Ivan, Easier? Is that the right way, to cut social spending?
Ivan Reply:
May 15th, 2012 at 10:31 pm
@Ivan, Jonf…it’s no longer about right and wrong. This is a desperate situation and both political parties believe the same nonsense. Another Obama term will likely come with no further spending hikes because of a Republican congress but certainly tax increases since they’re automatic. There is a day of reckoning coming and it is 12/31 and a 5% of GDP hike in taxes. The only hope of stopping this is with Romney…not because he understands things any better but because he is ideologically bound to cut taxes.
Harold Reply:
May 16th, 2012 at 11:25 am
@Ivan
Romney is only ideologically bound to cut the taxes of the wealthiest. He’s not going to cut my taxes. None of them are.
Vincent Reply:
May 15th, 2012 at 10:17 pm
@Ivan,
So many people wax poetic about the Clinton tax hikes…how they were the basis for the prosperity that followed. I find these folks difficult to convert–people like Bill Maher, and pretty much anyone on TV are spreading this type of misinformation all the time. Warren, if I recall, you’ve written that Andy Card was convinced. Any chance of you having a word with Romney’s people? If he were to win, how could he possibly be a successful President without harnessing MMT?
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Mario Reply:
May 15th, 2012 at 11:50 pm
@Ivan,
that’s an interesting argument. you may be onto something there.
However I am not sure if keeping capital gains rates where they are now will be enough to overpower the insane losses we’d see in dropping social security/medicare and the huge surge in savings (and drop in consumption) that would obviously follow from such policies. And with a republican tri-fecta you can be sure that social security would be first on the docket.
Not to mention the opportunity cost and economic losses for our nation, people, and our grandchildren (this time literally) from losing out on social security.
of course this is just analyzing the economic ramifications of rom vs. ob and not taking into consideration factors like war, peace, and social agenda’s, etc.
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Mario Reply:
May 15th, 2012 at 11:53 pm
@Mario,
and I still think Obama is basically just as bad as romney and you really can’t say that obama won’t cut taxes or push for the taxes to be cut for 90% of America (including millionaires mind you)….b/c well…that’s what he’s been SAYING all along anyway.
The same goes for the payroll tax holiday. Obama and his team have always been for that just as smaller increments than us MMT folks would like.
so your premise isn’t fully accurate. Plus let’s not forget it was Obama who threw social security under the bus last year with the debt ceiling debates if I’m not mistaken.
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WARREN MOSLER Reply:
May 17th, 2012 at 3:26 am
and took 500 b out of the medicare budget to give to insurance companies to get healthcare passed, and declare another victory
Greg Reply:
May 16th, 2012 at 5:33 am
@Ivan,
Dont see it Ivan
Taxing an additional 5% on those who are just ferreting it away somewhere like a commodities account is not going to affect AD.In fact if we severly reduce the hot money in some commodities we could see some significant price drops which would allow the average American to better off. Taxes going up on those over 500,000/year will have little negative affect on the economy except maybe the stock/commodity markets.
Reducing payments to already strapped Americans on SS/UI and ending the payroll tax cut will lead to worse economic outcomes than the tax hike on the rich.
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Ivan Reply:
May 16th, 2012 at 7:00 am
@Greg, This is 5% of GDP on the entire economy!
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Jonf Reply:
May 16th, 2012 at 11:31 am
@Ivan, I don’t know what the 5% is all about. But I am basically for a tax increase on the wealthy, including,the estate tax. I don’t want their money. I would like to flatten out the difference between the top and bottom income classes. I would want the revenue addition to be as close to neutral as possible. The corp income tax should be lowered and the payroll tax reduced, at least for the next several years. There are any number of things we should be spending on. Let’s have a JG. Why not a federal infrastructure company to fix and build things. Why not an increase in the min wage. Why not aid to the states to hire teachers. I don’t see Romney doing any of that. Obama maybe but not the other guy. You can find negatives about Obama, but I can match you easily. So let’s not play that game.
Vincent Reply:
May 16th, 2012 at 1:41 pm
@Ivan,
Why not an asset tax on the upper upper tiers? The problem is 500K is actually not that much income, and will hurt small business owners, which will translate to layoffs.
WARREN MOSLER Reply:
May 17th, 2012 at 3:29 am
agreed.
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Ivan Reply:
May 16th, 2012 at 7:53 am
@dave, And in the words of Billy Joel from Goodnight Saigon…”and we all.. go down..together”.
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WARREN MOSLER Reply:
May 17th, 2012 at 3:17 am
or Romney’s superior ability to get things done?
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roger erickson Reply:
May 20th, 2012 at 2:23 pm
@WARREN MOSLER,
Depends on what he proposes to get done.
“Romney has embraced the budget blueprint put forward by House Budget Committee Chairman Paul Ryan (R-Wis.)”
touts the Deficit Clock;
will lower the deficit by cutting taxes & cutting spending more (or so he says)
http://www.washingtonpost.com/politics/the-missing-issue-in-the-presidential-campaign/2012/05/19/gIQAcKIKbU_story.html
Either you believe a politcian … or you don’t. If we’re gonna vote based on what they’ll do, not what they’ll say … then why bother voting at all?
Just imagine you voted. Then imagine your imaginary candidate will deliver what you imagine. Then imagine we still have democracy.
But imagine if there’s many a slip ‘twixt the tongue & the Party Whip? I don’t want to imagine that, and we don’t have to … it’s already happening.
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Monica Smith Reply:
May 20th, 2012 at 12:54 pm
@Ivan, The purpose of money is to be spent, much as the purpose of script is to be writ. Money needs to circulate. People who hoard money are bad news.
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WARREN MOSLER Reply:
May 20th, 2012 at 6:40 pm
so can be people who don’t read the 7dif…???
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before his legacy could even really get started it appears it has already been destroyed by his own “inferno of debt” to logic, intelligence, and integrity.
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If you look at the link, this is just more of the ‘poor black people are to blame’. ‘They’ destroyed our economy, not those guys in the corner offices on Wall Street. If people buy it, they have only themselves to blame. Since Romney is a creature of Wall Street it certainly makes sense to keep up this meme.
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Dan Kervick Reply:
May 15th, 2012 at 7:17 pm
@SteveK9, Maybe Romney and his preppy buddies have a plan to hold black people down and scrub their color off.
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ESM Reply:
May 15th, 2012 at 9:20 pm
@SteveK9,
WTFF are you guys talking about? How do you get from debt to racism against blacks? This isn’t the Daily Kos you know. You don’t get tips for spouting incendiary nonsense.
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djp Reply:
May 15th, 2012 at 9:41 pm
@ESM,
Oh wait, I get it… the “Night” is dark, just like that “black cloud” of debt. Yeah, that’s it!! It’s all code! Sharpton was right all along….
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SteveK9 Reply:
May 16th, 2012 at 12:03 pm
@ESM, Read what is on the link, as I mentioned
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ESM Reply:
May 17th, 2012 at 8:37 am
@SteveK9,
Warren, I find this arbitrary censorship to be pretty obnoxious.
SteveK9 continues to claim that the article says something it doesn’t say. How else can I prove he’s a liar without posting the contents of the article? If you’re worried about copyright issues, it is permissible to excerpt an article for discussion purposes. If you just don’t like your blog to be cluttered up, then I’ll only point out that it’s common to see rambling, useless posts here which are far, far longer than the article I posted.
WARREN MOSLER Reply:
May 20th, 2012 at 9:35 am
ok, try again
Save America Reply:
May 17th, 2012 at 5:15 am
@ESM, http://www.snagfilms.com/films/title/prom_night_in_mississippi
Morgan Freeman pays a school in mississippi to integrate thier still segregated white and black proms. Now where we had 2 proms, we have 1, so that means less jobs right? More unemployment. Imagine if we segregated every school again, a doubling of jobs overnight eh? ;)
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Save America Reply:
May 17th, 2012 at 6:50 am
@Save America, Colin thank you for correcting me, I would be lost without you…
take us out Donna….
http://www.youtube.com/watch?v=czF6f8u1X-E
What do I have to do, to get you to notice me too? :) LOL!
djp Reply:
May 15th, 2012 at 9:40 pm
@SteveK9,
Outrageously insane interpretation.
I just came to browse the comments, but then I had to read the article to see what in the world you were referring to — then I realized you’re out of your mind.
Criticize the left’s and the right’s misunderstanding of fiat currency all you like, but this twisted interpretation belongs elsewhere.
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SteveK9 Reply:
May 16th, 2012 at 12:04 pm
@djp, Sorry it seems as plain as day to me. Oh, and why don’t you relax a bit, you’ll live longer.
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djp Reply:
May 16th, 2012 at 9:55 pm
@SteveK9,
I guess this thread was worth reading to figure out what to filter.
Been a while since I’ve been trolled.
Oh the old times… Welcome to my kill file
;)
djp Reply:
May 16th, 2012 at 9:56 pm
@SteveK9,
Oh the annoying xhtml!!
Welcome to my kill file \
SteveK9 Reply:
May 16th, 2012 at 12:06 pm
@djp, I guess since YOU realized it, it must be the case.
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jim Reply:
May 17th, 2012 at 7:36 am
@SteveK9,
I can see your point.
It seems from the article that Romney lays all the blame on subprime mortgages. And subprime mortgages has become codeword for “loans to poor black people” in the Republican blogosphere.
ESM Reply:
May 17th, 2012 at 8:29 am
@SteveK9,
“And subprime mortgages has become codeword for “loans to poor black people” in the Republican blogosphere.”
No, I think so far it’s pretty much just you, SteveK9 and Dan Kervick who think “poor, black people” when they hear subprime mortgages. People who aren’t consumed with race all the time think that subprime mortgages are loans made to people with poor credit histories and/or high (post-mortgage) debt-to-income ratios.
I’m in the business, and believe me, the race of a mortgagor has never even crossed my mind before – not that it would even be possible to determine from the available data except statistically perhaps by zipcode. My guess is the overwhelming majority of subprime mortgage loans were made to people who aren’t black. Furthermore, my expectation is that the % of subprime loans made to black people actually declined during the bubble years. I suppose I could google around for a recent study, but I’m not particularly interested in the answer.
jim Reply:
May 17th, 2012 at 9:33 am
@SteveK9,
You are misreading what I was saying.
I was not equating sub-prime with “loans to poor
blacks”.
I was pointing out that many conservatives firmly believe the blame for the entire economic collapse was affirmative action programs designed to help low income minorities get loans.
some examples (pro and con)
http://www.slate.com/articles/business/moneybox/2008/10/subprime_suspects.html
http://hotair.com/archives/2008/10/10/video-subprime-loans-affirmative-action-andrew-cuomo/
ESM Reply:
May 17th, 2012 at 10:01 am
@SteveK9,
@Jim:
When conservatives think of the subprime mortgage debacle, they think of the government mucking around in and distorting the private market for political reasons through a combination of regulations, tax credits, subsidized loans, and bullying.
When progressives think of the subprime mortgage debacle, they think of conservatives thinking of “poor, black people.”
Your two links completely validate my point – the first is from a liberal website which talks about racial subtext and stupid crap like that. The second is from a conservative website, and all it does is show a video (with accurate commentary) of a liberal talking about how the government is going to force banks to lend to people based on non-financial considerations.
As to a broader point, sure there are conservatives who are focused on race (I hesitate to use the word racist, since that word has lost much of its dictionary meaning). But most don’t. I think progressives (by percentage and by intensity) are much more focused on race, and they justify this focus by claiming (falsely) that conservatives are focused on it.
I suspect you, SteveK9, and Dan Kervick are typical progressives. You hear conservative dog whistle racism, when a) it’s a dog whistle, so you’re not actually able to hear it; and b) there is no dog whistle.
jim Reply:
May 17th, 2012 at 10:36 am
@SteveK9,
“When conservatives think of the subprime mortgage debacle, they think of the government mucking around in and distorting the private market for political reasons through a combination of regulations, tax credits, subsidized loans, and bullying.”
How does any of that relate to sub prime loans?
Subprime lending is what produced the most profits for both borrowers and lenders (as long as house prices continued to climb). Beyond the desire to maximize profit, there is no other explanation for why subprime lending became so widespread.
ESM Reply:
May 17th, 2012 at 11:01 am
@SteveK9,
@Jim:
It eventually became a bubble, but bubbles have to start somewhere. The reason the housing bubble got going is because people saw a steady and powerful rise in home prices, which incentivized the borrowers to borrow to buy and the lenders to lend. The initial rise had its origin in government policy shifts.
A lot of wacko conservatives who don’t understand MMT at all (the Ron Paul types for instance) believe that the government controls credit in this country and completely determines whether and when it is loose or tight. Ironically, they’re right!
krish Reply:
May 22nd, 2012 at 12:07 am
This is not a comment on this article per se but in general the strain of thinking and economic philosophy being socialized on this web site. Specifically on the “7 deadly…” that is meant to give the americans a feeling of comfort that all is well. Actually it isnt, and while the book explains how the US is creating money out of thin air and goes then goes on to state 2 key things,
a) Firstly how its problem of other countries to do what they want to with the dollars they have accumalated. Eg. the book says if chinese are free to keep the money in their fed account or if they want gold they can buy it from a seller who ‘wants’ dollars for the gold.
b) The debt accumalated is not passed on to the future generations because the future generations can continue to move numbers around in the spread sheet seamlessly.
The above 2 statements must initially provide relief to an american reader since it promises that there are no downsides to the current policies, not only that their future generations too are not going to be burdened, rather they are free to continue the current (mal)practices.
THIS STUFF IS DANGEROUS..for everyone including americans becuase this is exactly the kind of policy making that will lead to the WW3 ( I will come to this point in a little while).
Where the book really lacks in telling the reader is HOW america is able to print endless money that other people want. It does touch on the british example of hut-taxation to but what most of the readers missed is the fact that one needs to be an imperial power to be able to pull that off. If the answer to the HOW is not obvious by now then its because USA is an imperialistic power too which is why it has been able to establish the dollar hegemony.
Note the timing of the start of this open hegemony, the 70’s. The 70’s, a period with a weak europe scared of russia after its designs for russia failed in the WWII and the 2nd world weak and emerging out of the colonialism. They were easy pushovers for the US was able to enforce it.
But what is the consequence of this and for how long will this policy be successful ? The book does not discuss these key issues and lulls the reader into believing that all there is to it is a simple manipulation of a spread sheet.
As for the consequence the citizens are already seeing it but are unable to link it to the cause. The number of troops that the US has to station to keep dollar hegemony going has increased through the decades and so is the number of regions where it needs to maintain control, typically today its in and around the oil producing nations of asia. This may be a small price to pay for the sake of national prosperity but if the people who have lost their sons and husbands in these wars were to know the linkage then probably the enthusiasm would be lowered.
But the final consequence of this reckless policy is another WW when either the debtors will eventually come knocking in on the doors and rightly so or the US/Europe will go too far in trying to enforce the dollar hegemony and regional theaters of conflict will blow into wider conflicts. The scary bit is that there is nothing to stop this as the general american public is as callous and shallow as it policy makers.
Reply
WARREN MOSLER Reply:
May 22nd, 2012 at 3:29 am
imperialism is not currently the reason the US pulls off a trade deficit
the consequence of not being able to run such a large trade gap is we have to make more of what we want ourselves.
the US military isn’t out there to force people to accumulate $US.
In fact, it’s been explicit US policy to get them to spend their hoards.
fortunately we’ve failed, at least so far.
Reply
Sergei Reply:
May 22nd, 2012 at 4:14 am
@WARREN MOSLER,
“the US military isn’t out there to force people to accumulate $US”
Then the US military out there must be paid in the out there local currencies.
WARREN MOSLER Reply:
May 22nd, 2012 at 11:33 am
US soldiers get paid in US dollars. missing your point?
Sergei Reply:
May 22nd, 2012 at 1:38 pm
@WARREN MOSLER,
Since US soldiers were paid in US dollar they must have spent some of those locally. Which means locals must have accumulated some of those. Q.E.D. :)
WARREN MOSLER Reply:
May 22nd, 2012 at 2:15 pm
but the point of the US invasion wasn’t to force locals to save dollars
Save America Reply:
May 22nd, 2012 at 8:53 am
@krish, Krish, why is china going into africa and stealing thier food? Why is China paying 200K USD for a jeep?
http://www.bloomberg.com/news/2012-05-22/jeeps-sell-for-189-750-as-china-demand-offsets-tariffs.html
Krish, warren says Obama had to go beg china for financing, which we use to support military operations to liberate oil that then goes to CHINA! China controls US military purse string, manufacturing of US military weapons, drones, tank parts, etc etc, if China wanted to help rest of world in way you think, they could take tremendous steps to shut down US military machine. (and eventually they might if they build thier own – but why – they control ours and we get all the world hate)
You just don’t get it Krish, in today’s global world, specialization goes to the highest bidder. We have the best military, it was sold to China and china uses it to keep the oil lanes clear and global oil wells pumping, and let TEAM USA take all the global hate for what they are doing through us by proxy. Cement, roads, oil consumption, all roads lead to china dude, don’t get like that AK guy who attacked the USA and Lenovo before his foot got stuck in his mouth that China now owns lenovo. Why do we do this, because while we have the best military, china has the best factories to make all that stuff we all want and that the military liberates resources for.
You have to stop thinking in terms of nation states, china benefits TREMENDOUSLY from USA military and don’t want to upset apple cart cause it would be shooting thier own foot off. There are 7 billion humans, china makes a lot of stuff for most of them and need somebody to go liberate resources to keep the global economy going. If when chinas rise happened, Africa had the best military in the world, then by natural evolution and proxy it would be african militaries liberating resources for world demand to go to chinese manufacturers no?
Why don’t you explain to me why china wants big SUV jeeps and roads and cities that is going to take massive amounts of oil and require liberation of that OIL from rest of world?
I agree though, all this nationalist sentiment could lead to fascist governments that see violence and war as the solution.
7 billion people, many in China and India (and other places) want stuff like BIG SUV’s that take lotta oil, before you start blowing hate and smoke at team USA, you better look at other people around the world as well.
China working lotta people so they don’t have idle hands, china got 90 million surplus men because of dumb policies in yesteryear, and now Rest of World have to suffer idle hands problems of thier own to keep 90 million china surplus from igniting world war.
Reply
Save America Reply:
May 22nd, 2012 at 8:58 am
@Save America, http://www.nakedcapitalism.com/2012/05/in-greek-humanitarian-crisis-its-liberals-or-nazis.html
Krish here good article for you on similar MILITARY issue relating to greece and germany, greece have huge military, that is where lotta this finance stuff flow into between germany and greece, rest of world like greece having big military to keep check on turkey and middle east, you need to play game “balance of power” – this finance stuff is secondary to the real game. China and many others tremendously benefit from world police who keep global pipelines and oil lanes and oil wells going warp speed, but some are getting stepped on, but you blame the right humans and thier wants and needs and don’t be so blind!