The economy

[SUBMAN1]

Am I the only one that is getting sick of all the media BS that says this economy is not our fault? Enough with the victim label already! It is our fault!

Thoughts anyone?

-S

[SteamWake]

Banks forced to give home loans to people that could not afford them comes to mind.

[GoldenRivet]

It is the fault of lenders for loaning money to those who could not afford the loans

it is the fault of borrowers for borrowing money they knew they could never have a hope to pay back

collectively - every sector of the financial industry is to blame.

the question is...

... what are we all going to do about it?

stimulating the economy does not rest with tax cuts, or trillion dollar bail out packages.

the consumer has to consume goods and services, and industry has to employ people

I think congress would do well to cancel these bail outs and develop a 2 year plan to bring back ALL - or at least a majority of - the manufacturing jobs that the United States has sent over seas.

offer perks and incentives to those companies who do so.

you cant expect results by repeatedly injecting subsidized cash into the markets.

the banking industry has to learn and grow from this embarrassment and if you just dump hundreds of billions of dollars onto them when they screw up - nothing will ever change.

[Max2147]

There's always going to be debate on whether to blame the banks or the homeowners for the bad loans. Ultimately both have to share the blame. The banks wouldn't have offered the loans if the homeowners weren't demanding it, and the homeowners wouldn't have taken out the loans if they didn't have the banks telling them that they'd have no trouble paying them off, since the value of their house would only go up.

But I still think you have to blame the banks more. The homeowners weren't innocent, but they're not financial experts. Most of them should have known that they couldn't afford the loans, but most probably didn't know what a housing bubble was. The bankers should have known better, since it's their job to know the housing market. It's not like a housing bubble is a new phenomenon. They should have known that home values weren't going to go up forever, and when they told the homeowners that they'd have no trouble paying off their loans they had to know they were lying. The only thing forcing them to make those loans was their own herd mentality.

All that said, I think Obama made a good point in his speech. We're in a crisis, and the focus now needs to be getting the economy back on its feet. We need to take actions to stimulate the economy, even if it's not in direct response to the things that caused the meltdown. Once the economy is on the mend, then we can go back, assign blame, and take actions to ensure that the same problems don't cause another meltdown.

As far as bringing back manufacturing jobs, I think that ship has sailed. The US just can't compete on cost with these sorts of jobs, and with today's increasing levels of automation we don't have a quality advantage anymore. The opportunity cost of bringing those jobs back is just too high. The money required would be better spent training people for today's high-tech jobs in the service industry. We're not a manufacturing economy anymore - we're a service-based economy.

[Aramike]

All that said, I think Obama made a good point in his speech. We're in a crisis, and the focus now needs to be getting the economy back on its feet. We need to take actions to stimulate the economy, even if it's not in direct response to the things that caused the meltdown.

I actually agree with this. However, I believe this is a deflection from Obama.

While I hate Obama's stimulus package, I do believe we needed one. The problem arises when one considers that, while he isn't directly addressing the things that got us into this mess, the package similarly doesn't address the things needed to get us out of it.

I do believe we needed a stimulus. While I am a staunch believer in capitalism, I also acknowledge that it isn't a perfect system. One of the problems inherent in capitalism is essentially a "snowball" effect. By that I mean strong trends tend to amplify themselves, both positively and negatively. On the positive side, we see what are termed "bubbles". What is less understood is that those same forces work in reverse. As demands decrease, so does production and supply. If things fall to a certain point, actual production and supply drops well below the actual demand (not simply the perceived one) and we enter a depression of sorts. Any limited depression concerning specific markets would simply be a negative bubble.

This is precisely the opposite of a positive bubble - it is an artificial and exaggerated state of a segment of the economy. Unfortunately, it is also a side-effect of a capitalist system which lends itself more to perception than actual numbers and value.

Normally, capitalism has been a self-correcting mechanism. But, there is nothing normal about this recession. Our economy and, indeed, the world economy has grown so large, and so beyond the scope of hard data and actual numerical values that we are relying super-intensely upon perception. Think about it: if Wall Street honestly believed that we'd have an 18 month period of 30% growth ... problem solved. But it doesn't believe that. Rather, Wall Street seemingly is resigned to loss, causing more loss.

A bubble.

What Obama doesn't realize is that simply injecting a massive amount of money into the economy is not the prescription for what ails us. That money needed to go SPECIFICALLY to things that increase the perception that is holding people back from participating in the transactions present in a healthy-growth period. Instead, this money is going to a liberal wish list that, while it will indeed be influxed into our economy over some time, it ultimately instills no consumer confidence.

What you're left with is a situation where people end up crossing their fingers and hoping it works out, all the while waiting for signs of positive progress. Instead, they need to be participating in that progress for it to occur in the first place.

In other words, if everyone sits back and waits for Obama's plan to work, it won't. Unfortunately, Obama's plan doesn't give anyone reason not to do just that. Why would anyone risk further loss on said plan - especially when the president is intent on explaining that it will get worse before it gets better?

[Zachstar]

Originally Posted by SUBMAN1

Am I the only one that is getting sick of all the media BS that says this economy is not our fault? Enough with the victim label already! It is our fault!

Thoughts anyone?

-S

The start of the crisis was deregulation but the "Length" of the recession is entirely our fault.

Holding onto money is only harming the economy. The only reason I'm even holding on to 500 dollars is to wait for my account to be set up. Afterwards that will be 500 dollars back flowing into the economy. Not much but if everyone stops with the "Got to live frugally BS" Things will get back on track.

[Max2147]

Originally Posted by Aramike

While I hate Obama's stimulus package, I do believe we needed one. The problem arises when one considers that, while he isn't directly addressing the things that got us into this mess, the package similarly doesn't address the things needed to get us out of it.

I'm no economic expert, but I agree in a broad sense. I think a stimulus package is needed, but I'm not sure this current package is the right way of going about it.

[AVGWarhawk]

Originally Posted by GoldenRivet

It is the fault of lenders for loaning money to those who could not afford the loans

it is the fault of borrowers for borrowing money they knew they could never have a hope to pay back

collectively - every sector of the financial industry is to blame.

the question is...

... what are we all going to do about it?

stimulating the economy does not rest with tax cuts, or trillion dollar bail out packages.

the consumer has to consume goods and services, and industry has to employ people

I think congress would do well to cancel these bail outs and develop a 2 year plan to bring back ALL - or at least a majority of - the manufacturing jobs that the United States has sent over seas.

offer perks and incentives to those companies who do so.

you cant expect results by repeatedly injecting subsidized cash into the markets.

the banking industry has to learn and grow from this embarrassment and if you just dump hundreds of billions of dollars onto them when they screw up - nothing will ever change.

Amen brother Now, everyone, go spend some money!

[Aramike]

Originally Posted by Max2147

I'm no economic expert, but I agree in a broad sense. I think a stimulus package is needed, but I'm not sure this current package is the right way of going about it.

I agree there.

[SteamWake]

I look at it this way...

Wife to Husband "Honey, were going broke, theres almost nothing left in savings and were not putting any more in. Maybe we should get a second job".

Husband to Wife "No.. no lets just spend more money. The money we spend should bring in more income"

Now here is an interesting opinion piece points out Obama's 'fear factor'

http://thehill.com/dick-morris/its-o...009-02-24.html

[Sea Demon]

Originally Posted by SteamWake

I look at it this way...

Wife to Husband "Honey, were going broke, theres almost nothing left in savings and were not putting any more in. Maybe we should get a second job".

Husband to Wife "No.. no lets just spend more money. The money we spend should bring in more income"

Now here is an interesting opinion piece points out Obama's 'fear factor'

http://thehill.com/dick-morris/its-o...009-02-24.html

Yep. Also don't forget ......"let's also tell the credit card companies that our charges now, will be picked up by the kids and grandkids later".

[Max2147]

Originally Posted by SteamWake

I look at it this way...

Wife to Husband "Honey, were going broke, theres almost nothing left in savings and were not putting any more in. Maybe we should get a second job".

Husband to Wife "No.. no lets just spend more money. The money we spend should bring in more income"

You also have to remember the banker whispering in their ear "Yeah, take out that loan! Look at how your house value is going up, it'll go up forever and you'll have no trouble paying back the loan!"

There's no one single group at fault here. Each was encouraging the other.

[Sea Demon]

Originally Posted by Max2147

You also have to remember the banker whispering in their ear "Yeah, take out that loan! Look at how your house value is going up, it'll go up forever and you'll have no trouble paying back the loan!"

There's no one single group at fault here. Each was encouraging the other.

True, there is alot of blame to go around. But I think SteamWake's example above is used to detail the federal government's outlook is in regard to this crises. Spend, spend, spend, with money we don't have and pass on the debt to future generations wwhen these people are no longer around to be held accountable.

[SUBMAN1]

I don't care what anybody says, in the end, the consumer is at fault and now they are simply passing the blame. Greed is at fault. What happened to personal responsibility? What happened to learning from negative consequences? They have turned it into you being the VICTIM! It is not your fault! In this feel good society, no one loses! We are all winners! If we play soccer and never win a single game, we still all get a shiny trophy! Hahahaha!

One thing is for sure, if you are the part of half the masses that thinks like this, be Your life is already written as being mediocre at best. Reality is, you will probably end up homeless on the street.

There is a sharp divide happening in America these days. There are two sides. Side one wants the government out of your life and they will fix their own problems. Side two wants the feel good method of having the government bail them out even though the government is not capable of bailing them out. What separates their thinking? Child vs adult thinking. Children do what feels good. That is what it comes down to.

Whomever gave me this BS of it being the lenders fault is an idiot. No better way to explain it. If someone sells you looks like snake oil and smells like snake oil and you buy it, who's fault is it really? I don't care how great that snake oil smells. You are the idiot.

Lenders that sell snake oil in fancy suits are still selling snake oil. They always have. They always will. It is not their fault you are an idiot.

-S

[joegrundman]

But Subman, if as a result the Snake Oil vendors are also in financial crap, then it was stupid of them too.

And it was stupid of international banks to make the mistake of thinking that American triple A rated debt (marked with a label saying "you can't lose, i promise" was trustworthy, without stopping to consider it might be a scam.


In short the stupidity lies not with whichever group best suits your political prejudices, but with who at the end of it is in the crap, when there were things they could have done to stop it if they hadn't been so dazzled by the prospect of vast riches.