dagblog - Comments for "People Who Want To Hurt US"

Further to this is the matter

Peter Schwartz — Fri, 12 Aug 2011 14:45:14 +0000

In reply to Well, there's the rub, Dan.

Further to this is the matter of having adequate information and sufficient understanding of the terms of the loan. The lenders have an unfair advantage here and have to be forced to be more open and explanatory about the terms.

I remember when they were forced to put the APR in a larger-point font, for example.

? and the Hysterians

Donal — Fri, 12 Aug 2011 01:44:25 +0000

In reply to Oh, I thought the Pete

? and the Hysterians

Oh, I thought the Pete

AmericanDreamer — Fri, 12 Aug 2011 01:34:14 +0000

In reply to Less strident than the

Oh, I thought the Pete Peterson and austerity-mongering crowd were known as the Hysterians, with spinoff sects known as the Hysterical Austerians and the Austerity Hysterians.

Ha. I'm getting as silly as you, acanuck.

Well, there's the rub, Dan.

Michael Maiello — Fri, 12 Aug 2011 01:16:15 +0000

In reply to The credit business is a

Well, there's the rub, Dan. It's as if we've decided to remove risk from the lending system entirely, by removing the risk to lenders. Borrowers still get screwed when things go wrong but the lenders, who freaking charge money so as to be compensated for the work of taking risk, are protected. So, what are the banks paid for then?

I think it's a very

Michael Maiello — Fri, 12 Aug 2011 01:12:53 +0000

In reply to Less strident than the

I think it's a very interesting point that the uber wealthy stock owning class would be far better off with a modest tax increase than with seeing trillions wiped from the market over 2 weeks.

Less strident than the

acanuck — Thu, 11 Aug 2011 21:04:50 +0000

In reply to People Who Want To Hurt US

Less strident than the Austrians are the Austerians.

Then there are the Austerlitzians, who think the answer to our fiscal problems is to destroy the Holy Roman Empire. Sorry, I had to get that bit of silliness out of my head.

Excellent post, destor, especially the Daily long-form version. As the clock ticked toward the debt-ceiling limit, every reasonable pundit -- and even the politicians most involved -- declared that a default would be a self-inflicted wound. Congress still stalled until the last possible moment to cobble together a half-assed deal. Not so much to avoid a default, but to avoid blame for a default.

It didn't work. Agreed, no default occurred, and the S&P downgrade proved inconsequential. But Congress (in fact, the whole U.S. political system) inflicted a very serious wound on itself. Throw-the-bums-out sentiment has soared, and now includes a big dose of throw-the-bums-out-that-we-elected-to-throw-the-other-bums-out.

Boehner reportedly walked away from a deal with Obama over $400 billion in direct taxes to the very richest. Just $40 billion a year. Without doing any math at all, I'm pretty sure the resulting market meltdown has already cost the American public (including the very wealthy whom Boehner was trying to protect) untold trillions. Self-inflicted indeed.

Is there a religious or moral dimension to this? Yeah, I think a lot of Americans think they (or the country as a whole) have sinned, mostly in worshipping at the altar of wealth and greed. But all the other stuff too: drugs, pornography, homosexuality, birth control, abortions, out-of-wedlock babies, petty crime, unemployment, welfare and off-color language in the movies and on TV.

Admitting personal fault is hard, changing your ways even harder; accepting part of a collective punishment doled out by a just God can be seen as a noble thing. And if the punishment falls a little bit harder on someone less able to endure it, well, they probably were guiltier than you were. Comforting in a way.

Rick Perry is probably on to something with his prayer meetings. Put your trust in God, vote Republican, and -- whatever results -- accept it as divine will. Fiscal crisis solved.

I'm rambling. Solid post, destor. Good comments too.

Possibly at the root of the

Peter Schwartz — Thu, 11 Aug 2011 20:40:52 +0000

In reply to Possibly at the root of the

Possibly at the root of the half-hearted and largely ineffective policy responses to the home mortgage-related aspects of our bad economic situation is the head-on collision between what "respectable" culture says is personally responsible behavior, versus various mortgage-relief policies which may be necessary to turn around this economy, affected as it is so heavily by peoples' home mortgage-related financial distress. This might be described as a culture vs. macroeconomics clash.

Very good point. When you listen to conservatives on this, there is moral outrage. Our Puritan heritage bubbling up?

They find the notion of relief for those who in their view made not just different, but irresponsible or dumb, purchasing decisions to be not just inequitable, but offensive and outrageous preferential treatment.

Perhaps resentment at how the irresponsible had all that fun while they, the responsibles, denied themselves and now they aren't even going to pay for all that fun. Notice how 99% of all teen horror movies involve PREORDAINED payback for having sex. John Calvin still speaks.

Let's remember that it was Santelli's on-air outrage at Obama's supposed plan to make taxpayers pay to bail out their irresponsible or dumb neighbors from foreclosure that amped up the anti-Obama backlash that gave us this certifiable Republican House.

This is a very good point. These same people are now bitching that Obama didn't adopt "good business principles" and solve the housing crisis. But inevitably, that means debt relief, no? One key to happiness: Never compare yourself to your neighbors.

The contrary perspective, offered in this context by some Keynesian-oriented macroeconomists, is that it's just a very foolish thing to do to make economic policy decisions on the basis of judgments about the personal morality seen as reflected in individual choices. Krugman argued this in one his columns awhile back.

I try never to think that some other person's good fortune is my misfortune. You're right, everyone's home values got taken down at least some. Rejecting the need to do something is like cutting off one's nose. Besides, things could be done to make sure the irresponsibles take a haircut and don't get off scott-free. Horrors! No one except a few eggheads care about "moral hazard." Most folks just think it isn't fair for others to have so much fun and not "pay for it."

Past a certain point which we long ago passed, if there are enough people under water with their mortgages, it has an effect on the economy that drags lots of other folks down into the muck. Including lots of folks who didn't make any decisions whatever that were arguably irresponsible or dumb.

Yes.

So, the Krugman argument goes, to decline to take action easing homeowners mortgage-related woes that would halt or reverse a situation hurting many more, because of outrage at the prospect of helping people seen as highly undeserving, is just foolish and self-destructive for a society and its government to do.

Yes.

Has it gotten bad enough that they need to take action to ease the housing mess, knowing this will earn them the wrath of millions of Americans who feel they exercised basic personal responsibility and deeply resent subsidizing those who in their view didn't? If policymakers don't intervene, will the situation turn around on its own, eventually? How confident are we of that? How long would it take? Until that time, are we supposed to accept overall high levels of joblessness and an anemic economy if there are policies, including mortgage-relief policies, that could be adopted which might avert that, and might even be necessary to avert that?

The conservative paradox is to bitch about current economic conditions, or blame them on Obama, but insist the best thing to do is do nothing. They also get to complain that Obama is a do-nothing, non-leader who is doing just what they prescribe--nothing.

The credit business is a

Dan Kervick — Thu, 11 Aug 2011 20:39:21 +0000

In reply to People Who Want To Hurt US

The credit business is a two-way street. Lending businesses don't lend money as a charitable operation, but to make money. Its the job of the folks who are in the business of extending credit to assess credit-worthiness and risks, and make the right calls. If some borrower borrows more than they can rationally expect to pay back, then they have engaged in irresponsible and avaricious borrowing. Similarly, if some lender extends more credit to a borrower than they can rationally expect to see paid back, they have engaged in avaricious and irresponsible lending. It takes two parties to produce a bad loan.

Possibly at the root of the

AmericanDreamer — Thu, 11 Aug 2011 18:48:46 +0000

In reply to People Who Want To Hurt US

Possibly at the root of the half-hearted and largely ineffective policy responses to the home mortgage-related aspects of our bad economic situation is the head-on collision between what "respectable" culture says is personally responsible behavior, versus various mortgage-relief policies which may be necessary to turn around this economy, affected as it is so heavily by peoples' home mortgage-related financial distress. This might be described as a culture vs. macroeconomics clash.

"Respectable" culture says that people who take on debt they should know better than to take on should not be bailed out by others, including their government. This isn't only, or primarily, on account of the moral hazard argument, which is future-focused, but is very much about the present. Many citizens who, not sure if they could buy a house or something else they really wanted, held off. They find the notion of relief for those who in their view made not just different, but irresponsible or dumb, purchasing decisions to be not just inequitable, but offensive and outrageous preferential treatment.

As your comments illustrate, Peter, things are a good deal more complicated than that. What people may believe they are seeing (and are helped to see by interested others) is not always what is actually going on. And...perception often trumps reality as a driver where the two are different, in politics as in other realms of life.

Let's remember that it was Santelli's on-air outrage at Obama's supposed plan to make taxpayers pay to bail out their irresponsible or dumb neighbors from foreclosure that amped up the anti-Obama backlash that gave us this certifiable Republican House.

The contrary perspective, offered in this context by some Keynesian-oriented macroeconomists, is that it's just a very foolish thing to do to make economic policy decisions on the basis of judgments about the personal morality seen as reflected in individual choices. Krugman argued this in one his columns awhile back.

Past a certain point which we long ago passed, if there are enough people under water with their mortgages, it has an effect on the economy that drags lots of other folks down into the muck. Including lots of folks who didn't make any decisions whatever that were arguably irresponsible or dumb.

So, the Krugman argument goes, to decline to take action easing homeowners mortgage-related woes that would halt or reverse a situation hurting many more, because of outrage at the prospect of helping people seen as highly undeserving, is just foolish and self-destructive for a society and its government to do.

Thus the policymakers' dilemma.

Has it gotten bad enough that they need to take action to ease the housing mess, knowing this will earn them the wrath of millions of Americans who feel they exercised basic personal responsibility and deeply resent subsidizing those who in their view didn't? If policymakers don't intervene, will the situation turn around on its own, eventually? How confident are we of that? How long would it take? Until that time, are we supposed to accept overall high levels of joblessness and an anemic economy if there are policies, including mortgage-relief policies, that could be adopted which might avert that, and might even be necessary to avert that?

Destor, there is apparently a

Oxy Mora — Thu, 11 Aug 2011 18:11:30 +0000

In reply to People Who Want To Hurt US

Destor, there is apparently a religious basis to the austerity beliefs. I didn't get a chance to research it further, but the Baptists, who migrated from the Calvinists, had (have?)specific beliefs that, for example, giving to the poor would just make them more beggarly--in other words, they're on their own. I assume the Baptists would feel even more that way if the poor were so as a result of borrowing and spending.