Thanks, Bill. As you correctly point out, there is no one cause of the housing collapse. There is no one group culpable. There is no one easy solution. Certainly government policy, bading lend proceedures and irresponsible borrowers all played a part. So what do we do? Up til now, we've done almost nothing, other than bail out the banks. Isn't it about time we begin to get needy homeowners some relief and make some of the sleaziest lenders pay? We've already begun to change government policiy, thankfully. Crafting a way of doing the first two isn't easy, for some of the reasons you cite. But there are several good reasons to do so. 1. The lenders should have known better. They're the growns-up in the lending process. 2. The housing collapse remain a huge burden on the entire economy. A foreclosed home hurts everyone in the block, everyone in the town -- and on and on. 3. Not one of these loans was written by Freddie or Fannie or any other government agency. They were approved by bankers and mortgage hypsters and other supposed professionals whose recklessness, greed or evil -- you pick it -- just about sunk our ecnomy. And so far, hardly any of them have paid at all. To me, that's the biggest piece of unfinished business here. This deal is a start but only a start.
Of course, I welcome your disagreement. Thanks for taking the time to write.
Monday, March 5, 2012
Letter to Ellis Henican
It is clear that anyone who committed fraud should be prosecuted. What is not so clear is that the majority of these mortgages were to those who were "pressured, tricked, defrauded, deceived, or otherwise victimized". This is what your article and the Attorney General would have us believe but is completely unsupported. There was fraud but it is a fiction to suppose that the majority of Americans - while making the largest economic decision they will ever make - did not know what they were doing.
What is clear is that the decision to vastly increase the Government's (Fannie/Freddie/FHA) portfolio of sub-prime mortgages and the subsequent modifications to their lending guidelines (which the banks all followed) channeled money to people who never would have qualified under any sensible lending criteria. That decision was not fraud, just ill-conceived and politically motivated. But it is where it all started. (Hint: Google Andrew Cuomo HUD and Sub-prime) Greenspan didn't help but Andy, Barney, Maxine and Chris had more to do with it.
Is it cynical to question whether an Attorney General in the Administration of one of the perpetrators is chasing easy targets to direct us away from those who actually were involved?
It is also unclear why everyone who is "underwater" needs to be saved.
A fable: Two guys with the same income buy homes for exactly the same amount of money. Mr. A has saved up 25% of the purchase price and makes that as a down payment. Mr. B has no savings and takes out a mortgage for the entire purchase price. The value of both homes goes down 20% Mr A is not underwater; he just lost most of his equity and savings. Mr. B is underwater and has lost exactly nothing. But the Attorney General's, your article's and the Administration's plans all help Mr. B. The moral appears to be that saving and prudent purchase are not rewarded while overspending is.
So, investigate to find the cause. Knowing what happened will go a long way to avoiding a repeat performance, punishing fraud, identifying corrective measures, and making for better policy in the future (maybe). The easy target is just not always the right one to aim at.
What is clear is that the decision to vastly increase the Government's (Fannie/Freddie/FHA) portfolio of sub-prime mortgages and the subsequent modifications to their lending guidelines (which the banks all followed) channeled money to people who never would have qualified under any sensible lending criteria. That decision was not fraud, just ill-conceived and politically motivated. But it is where it all started. (Hint: Google Andrew Cuomo HUD and Sub-prime) Greenspan didn't help but Andy, Barney, Maxine and Chris had more to do with it.
Is it cynical to question whether an Attorney General in the Administration of one of the perpetrators is chasing easy targets to direct us away from those who actually were involved?
It is also unclear why everyone who is "underwater" needs to be saved.
A fable: Two guys with the same income buy homes for exactly the same amount of money. Mr. A has saved up 25% of the purchase price and makes that as a down payment. Mr. B has no savings and takes out a mortgage for the entire purchase price. The value of both homes goes down 20% Mr A is not underwater; he just lost most of his equity and savings. Mr. B is underwater and has lost exactly nothing. But the Attorney General's, your article's and the Administration's plans all help Mr. B. The moral appears to be that saving and prudent purchase are not rewarded while overspending is.
So, investigate to find the cause. Knowing what happened will go a long way to avoiding a repeat performance, punishing fraud, identifying corrective measures, and making for better policy in the future (maybe). The easy target is just not always the right one to aim at.
January unemployment numbers
Some perspective needs to be applied to the December numbers. Even if these numbers reflect a trend rather than the seasonal addition of people to wrap gifts - and we all hope that it is a positive trend - the reporting and exuberance needs to be tempered, especially on LI.
Several things need to included in the reporting after the obvious fact that more employment nationally is a good thing. Like,
Where are these increased jobs and what are the local policies in the places that create job growth? For example, Sheldon Silver wants to raise the minimum wage to Connecticut/Massachusetts levels. Are Connecticut and Massachusetts adding jobs or are they as stagnant as LI?
About 10,000 a day are becoming eligible to collect Social Security What is this doing to the number of people looking for jobs and the resulting unemployment rate?
The few times it is reported, the number of people that are actually working appears going down as the unemployment rate also goes down. That is certainly counter intuitive and looks like people are leaving the job market regardless of age. To what extent does that impact the rate?
What kind of jobs are being added? Jobs that require wearing a hairnet and a name tag need to be distinguished from actual head of household positions to accurately gauge what is happening
Unfortunately, the reported number of jobs - even if they are head of household jobs - is still below what is needed.
We should celebrate that the rate is going down; not that the reported rate is 8.2%.
It is good that the rate goes down. It makes people more confident, especially people who have jobs. Unfortunately, with all the other factors considered, a lower rate is a public relations issue, does not create any jobs, and it does not help anyone who is looking for a job to find one.
So, let us celebrate the good news and look forward to those who have a public voice do a better job of explaining what it means.
Several things need to included in the reporting after the obvious fact that more employment nationally is a good thing. Like,
Where are these increased jobs and what are the local policies in the places that create job growth? For example, Sheldon Silver wants to raise the minimum wage to Connecticut/Massachusetts levels. Are Connecticut and Massachusetts adding jobs or are they as stagnant as LI?
About 10,000 a day are becoming eligible to collect Social Security What is this doing to the number of people looking for jobs and the resulting unemployment rate?
The few times it is reported, the number of people that are actually working appears going down as the unemployment rate also goes down. That is certainly counter intuitive and looks like people are leaving the job market regardless of age. To what extent does that impact the rate?
What kind of jobs are being added? Jobs that require wearing a hairnet and a name tag need to be distinguished from actual head of household positions to accurately gauge what is happening
Unfortunately, the reported number of jobs - even if they are head of household jobs - is still below what is needed.
We should celebrate that the rate is going down; not that the reported rate is 8.2%.
It is good that the rate goes down. It makes people more confident, especially people who have jobs. Unfortunately, with all the other factors considered, a lower rate is a public relations issue, does not create any jobs, and it does not help anyone who is looking for a job to find one.
So, let us celebrate the good news and look forward to those who have a public voice do a better job of explaining what it means.
Monday, November 7, 2011
Research
The does not seem to be any definition of what "fair share" means when applied to taxing the people who have money. The tax raisers among us certainly would not consider it fair if everyone one paid the same amount of money; they don't consider it fair if everyone paid the same percentage of their income in taxes (they must have missed the day in 3rd grade where many learned that 20% of $1,000,000 is more than 20% of $50,000); and they don't consider it fair that the top rate is infinitely higher than the lowest rate which is 0%. The left's definition of "fair share" appears to be that some people should pay everything that is needed. What happens when that is not enough?
Whiner in chief
President Obama is making progress. He has advanced from blaming his predecessor to blaming everything. He tells us that his economic plans would have worked except there was a tsunami, problems in the Middle East, oils prices went up and other things happened that were beyond his control. That speech is the first time I have heard any President actually whine and I have been around for more than most. While it is good to know that he recognizes his failures, the blame thing is really getting old.
Well, Recuse me.
When a judge is assigned a case where there is personal involvement, they are supposed to recuse themselves. Our President has at least two close relatives who have been in this country illegally for years and he is still involved in the illegal immigration discussions. The White House has no comment. Hmmm
Friday, October 28, 2011
Getting Richer
There are several very deceptive things wrong with the article about the rich getting richer.
There are reasons why this has to happen:
The top tier has money to invest and does so; the bottom tier does not, so just can not grow as quickly. In addition, inflation makes the absolute difference even larger. The same inflation rate on a larger amount of money has a larger absolute impact.
There is no limit to what the upper tier earns; all the other tiers are limited in what they earn by the tier structure.
If someone in a lower tier earns more than the tier limit, they move up. Except at the top, the highest earners in every tier are always leaving.
The study was over 30 years. Are we to believe that we are discussing the same people? The people in the lowest tier 30 years ago have moved on – obtained more skills, gotten better jobs and higher salaries. If the same people are still in the lowest tier after 30 years, they have a problem, not society.
Meanwhile, the lowest tier has constantly been replenished by new kids leaving the nest, immigrants, etc. It is no surprise these are at the bottom; starting at the top is not the usual way to success. Whether they stay there is the issue.
The results of the study are reported in manner that is deceptive and intellectually dishonest. If this is what the Occupy Wall Street movement is about, it shows their lack of perception.
There are reasons why this has to happen:
The top tier has money to invest and does so; the bottom tier does not, so just can not grow as quickly. In addition, inflation makes the absolute difference even larger. The same inflation rate on a larger amount of money has a larger absolute impact.
There is no limit to what the upper tier earns; all the other tiers are limited in what they earn by the tier structure.
If someone in a lower tier earns more than the tier limit, they move up. Except at the top, the highest earners in every tier are always leaving.
The study was over 30 years. Are we to believe that we are discussing the same people? The people in the lowest tier 30 years ago have moved on – obtained more skills, gotten better jobs and higher salaries. If the same people are still in the lowest tier after 30 years, they have a problem, not society.
Meanwhile, the lowest tier has constantly been replenished by new kids leaving the nest, immigrants, etc. It is no surprise these are at the bottom; starting at the top is not the usual way to success. Whether they stay there is the issue.
The results of the study are reported in manner that is deceptive and intellectually dishonest. If this is what the Occupy Wall Street movement is about, it shows their lack of perception.
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