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The Economy.

Farted by AbsintheClock, November 14, 2008, 12:03:20 AM

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IoClock

One concerning factor that's likely going to contribute to GM/Ford/Chrysler NOT getting their act in gear would be the declining gas prices. Oil dropped below $50 a barrel and the national average for gas is below $2 for the first time since I can remember (which is probably about 12 months, I haven't been on the road that long). This of course will not in the least bit encourage GM to make more fuel efficient cars, rather, it will encourage them to continue manufacturing gas-guzzlers.

Frankly, I don't have a problem using taxpayer money to bailout corporations. However, they must get money based on several factors:

1. the executives and managers are extensively and intrusively investigated for fraud, mismanagement, loan sharking, general-dickery
2. all executives found guilty of shady practices are subsequently tried and jailed.
3. No single employee of the failing company receiving taxpayer money can be making more than $1,000,000 anually (figure includes bonus pay and stock dividends (for his company, other capital gains cannot be included in this figure to honor the free market))

In addition, new regulation should be passed to prevent this from happening again:

1. No bank may grant a mortgage to a person where the monthly payment exceeds more than 60% of their monthy income (after taxes). Further, there should be an additional clause preventing loan shark practices here (for instance, establishing an interest rate so high the homeowner is continually paying off interest and isn't actually paying off the price of the house.
2. Any individual with more than $8,000 in unpaid credit card debt should have all his cards frozen until the debt is paid down.
3. All persons receiving government welfare must have a low-interest fixed-rate mortgage on a house not exceeding three times the value of one year earnings in their most previous job (before taxes).
4. Banks should, under no circumstance, be buying variable-rate mortgages on credit. Whoever thought of that in the first place fucked the world economy and should be hung by his thumbs in the middle of Time's Square to serve as an example for the rest of the world.

Capitalism runs on fear, greed and credit. It's preserved through logical thought, greed and responsible use of credit spending. People need to be taught the later, if they can't learn it on their own, they should be forced into it by government.
Quote from: LokiClock;1197594My large, soft ears are like pitchers waiting to be filled with giraffe cum.

AbsintheClock

Quote from: IoClock;1453279One concerning factor that's likely going to contribute to GM/Ford/Chrysler NOT getting their act in gear would be the declining gas prices. Oil dropped below $50 a barrel and the national average for gas is below $2 for the first time since I can remember (which is probably about 12 months, I haven't been on the road that long). This of course will not in the least bit encourage GM to make more fuel efficient cars, rather, it will encourage them to continue manufacturing gas-guzzlers.

I'd like to see them turned down on this bailout soley on the factor that they won't streamline their cars.

QuoteFrankly, I don't have a problem using taxpayer money to bailout corporations. However, they must get money based on several factors:

1. the executives and managers are extensively and intrusively investigated for fraud, mismanagement, loan sharking, general-dickery
2. all executives found guilty of shady practices are subsequently tried and jailed.
3. No single employee of the failing company receiving taxpayer money can be making more than $1,000,000 anually (figure includes bonus pay and stock dividends (for his company, other capital gains cannot be included in this figure to honor the free market))

Do you know how much 700 Billion dollars is? These assholes should have been investigated for fraud a long time ago. Unfortunately they've got friends in high places. Also I think it's pretty un-american to dictate how much the CEO's should pay themselves. In any case we are a capitalist nation. If a place fails it's their fault. If companies make a series of bad decisions they have to fold. And as much as I feel sorry for the people who lose their jobs they really should move on ahead of time and find another one. Job security is the responsibility of the employee not the employer.

QuoteIn addition, new regulation should be passed to prevent this from happening again:

1. No bank may grant a mortgage to a person where the monthly payment exceeds more than 60% of their monthy income (after taxes). Further, there should be an additional clause preventing loan shark practices here (for instance, establishing an interest rate so high the homeowner is continually paying off interest and isn't actually paying off the price of the house.
2. Any individual with more than $8,000 in unpaid credit card debt should have all his cards frozen until the debt is paid down.
3. All persons receiving government welfare must have a low-interest fixed-rate mortgage on a house not exceeding three times the value of one year earnings in their most previous job (before taxes).
4. Banks should, under no circumstance, be buying variable-rate mortgages on credit. Whoever thought of that in the first place fucked the world economy and should be hung by his thumbs in the middle of Time's Square to serve as an example for the rest of the world.

These for the most part seem like common sense measures. I am especially fond of the idea of hanging Alan Greenspan by his thumbs in the middle of times square. Nonetheless we can't legislate common sense because common sense doesn't always apply in real-life situations. Also I'm pretty sure it's unconstitutional to dictate to businesses how to run themselves. On another note it's impossible to put in these conditions now as there are already other conditions doing the opposite. The bailout more or less says "Take this money, get a shitload of tax breaks, and pay it back whenever."

QuoteCapitalism runs on fear, greed and credit. It's preserved through logical thought, greed and responsible use of credit spending. People need to be taught the later, if they can't learn it on their own, they should be forced into it by government.

The only way we can teach people to be responsible is by letting these giants fall. The world needs to see what happens when you get stupid, and now is the chance.

RomanClock

Hey, if we want the government to change the way a business works to receive government money, why not do this with individuals? Probably a different topic though.
lemayo lol :soups:

AbsintheClock

How about the government just stops giving away free money?

RomanClock

Quote from: Groucho Marx;1453538How about the government just stops giving away free money?

I wish :(
lemayo lol :soups:

IoClock

Quote from: Groucho Marx;1453297Do you know how much 700 Billion dollars is? These assholes should have been investigated for fraud a long time ago. Unfortunately they've got friends in high places. Also I think it's pretty un-american to dictate how much the CEO's should pay themselves. In any case we are a capitalist nation. If a place fails it's their fault. If companies make a series of bad decisions they have to fold. And as much as I feel sorry for the people who lose their jobs they really should move on ahead of time and find another one. Job security is the responsibility of the employee not the employer.

$700 Billion is approximately 1/60 the World's GDP and approximately 1/15 America's GDP. It's is a meager fraction of the massive debt market created by the buying and selling of toxic loans (which, according to a Money magazine article exceeds the World's GDP by about $300 Billion: http://www.twine.com/item/11x9jl0qw-30t/will-credit-default-swaps-which-exceed-world-gdp-cause-the-next-financial-crisis-sep-30-2008). It's a mere pittance compared to the economic shitstorm we'd be forced to endure if we had allowed the market to "correct itself". The way I see it, a well managed bailout of that size (or even twice that size) is a small price to pay compared to risking near anarchy in many currently unstable states (Russia, China, Iran, etc. All of which have experienced rapid economic growth thanks mostly to commodities).

Unfortunately, as they've proven time and again, the current administration, congress and secretary of treasury "well managed" to them means "give to the 25 most powerful companies/individuals in the private sector, cross our fingers they won't buy themselves a solid gold toilet and instead use this to fix the problem"

If the $700 billion was instead used to help responsible, hard-working individuals who pay their bills on time by giving them a little extra spending cash (or some extra liquidity to inject into the banks if they so chose) then the problem would have fixed itself. The Congress saw Lehmann Bros., Bear Sterns, Freddie and Fanny and thought "well shit, banks are going down, let's give them money to stop that!" What they failed to consider in their bailout proposal was the thousands of retail chains that are being forced to close stores, file for bankruptcy, etc. Their stock prices start plummeting, and the investment banks lose even MORE money. (Watch what happens after Chistmas, when all these stores start shutting off the lights for good. Hopefully that will be the bottoming out of the stock market, but if the Dow Jones ends above 7,000 by the close of the quarter, I'll be shocked.)

The other portion not going directly to the people should be used to buy up the toxic mortgages of those people who are working two jobs flipping burgers and answering phones while attending night classes to better themselves. The government can set their interest rate and basically give them a couple of years to finish school and get into a decent job before selling their mortgage back to the bank. This will also give the banks some liquidity to work with paying off their own toxic debt (or, actually, more realistically, paying their CEOs $20,000,000 Christmas bonuses).

The economy isn't entirely dicated by the CEOs anyway. If they drive a company into the ground, it not only hurts their employs, but will hurt the bank collecting mortgage payments on the laid off, it will hurt the credit card company collecting payments, it will hurt the grocery store selling food to the laid off, it will hurt the retail sector selling TVs and DVRs to the laid off. It will (and effectively is now) cause a huge chain reaction of economic shrinkage (a recession). The problem with letting one or two huge companies collapse is miniscule. On the contrary it's good for the long term strength of the economy. The problem with letting entire SECTORS go under (auto, banking, retail) as what would happen if the government played a hands off role would basically recreate the conditions in the early 30s while, unlike the 30s, make it very difficult for us to get back up. Thanks to increasing globalization, any huge power vacuum in the auto industry now can be filled more readily by asian companies. (Toyota recently opened a huge factory down south in like Mississippi or Louisiana or something)

Quote from: Groucho Marx;1453297These for the most part seem like common sense measures. I am especially fond of the idea of hanging Alan Greenspan by his thumbs in the middle of times square. Nonetheless we can't legislate common sense because common sense doesn't always apply in real-life situations. Also I'm pretty sure it's unconstitutional to dictate to businesses how to run themselves. On another note it's impossible to put in these conditions now as there are already other conditions doing the opposite. The bailout more or less says "Take this money, get a shitload of tax breaks, and pay it back whenever."

Greenspan wasn't they guy who thought of the default swaps, he's merely the guy who, despite all his economic expertise, didn't see how anything could go wrong with them. He's an idealist and turned a blind eye to the problem when it started to emerge, but at least he had the balls to admit he was wrong after the fact. The current government could learn a thing or two from that.

There is a clause in the constitution under the powers and responsibilities of Congress, that says it's responsible for inter-state trade regulation. It's an old clause meant to stop the problems of multiple currencies circulating during the Articles of confederation days, but I'm sure if the Supreme Court wasn't loaded with friends of Reagan, Bush, Clinton and Bush Jr they would permit a limited-time legislation allowing more severe regulations until the problem is fixed and power can once again be returned to the private sector. I might be reading too far into it, and there may well be a clause in there saying the exact opposite, that it CAN'T be done, I haven't read the Constitution since I took government 2 years ago, so I don't remember.

Either way, there is no arguing that the current bailout is a terrible piece of legislation that was hastily thrown together in a panic when they could very well have taken an extra week to get it right at the expense of maybe another bank or two getting bought up or collapsing. It wouldn't have been devistating. (Although emergency measures MUST have been taken to save AIG which is a global insurance company as well as investment bank. If AIG had been allowed to go under, we'd be talking about <25% unemployment rates across the planet before things settled out)



Quote from: Groucho Marx;1453297The only way we can teach people to be responsible is by letting these giants fall. The world needs to see what happens when you get stupid, and now is the chance.

There has to be moderation in what we allow to fall and what we don't. A collapse in the auto industry essentially ends the mid west, states begin to go bankrupt (something I don't think has ever happened in history, the results would probably not be fantastic) and people start flocking to other places. Unfortunately, since the banking market is also collapsing, the East Coast isn't any refuge. California, pending the auto industry holds on, will likely be the first state to declare bankruptcy (God, they must sure be glad the queers can't get married, at least they've got THAT going for them!!). I agree that this country needs to experience some pain to get it's ass in gear. The $4 gas was a great start, and the collapse of some major companies might just be the medicine we need.

But to allow ALL of them to go under will ruin this country and likely take the world with us. If the recent, sharp increase in the value of the Greenback is any indication, the world is looking to us for a solution and clearly trying to help out any way they can while simultaneously trying to keep their own countries afloat. If we don't do anything and let the market run its course, then we send a message to the world that, despite all our efforts trying to keep our hegemonic status, we are ultimately powerless. This would cause irreparable damage to our image as the shining gold standard of how to live, and nothing would be more un-American than allowing that to pass.
Quote from: LokiClock;1197594My large, soft ears are like pitchers waiting to be filled with giraffe cum.

AbsintheClock

1/60th of the world's capitol is not going to save us from ourselves. I realize there are a lot of consequences that follow, but at the same time there are advantages to the average joe. For one prices are dropping dramatically especially gas prices. The more we starve these scum the more they're going to have to adapt. Second of all inflation will go way down. Finally it would send a clear message to those that did run an honest business not to fuck it up.

Instead of throwing money at this problem, we should be fixing our own problems. First of all what about that massive debt we owe to China? This country has no gold standard anymore. If anything it is a massive joke to a lot of countries, and it's been going down the crapper for a while.

The clause you are referring to only stops states from making up their own individual currency really. It has nothing to do with buying out bad stocks, giving monkey to big companies, or anything of that nature. It quite literally has everything to do with how we manage our money. (Mostly the physical making of money)

I would also argue that if AIG went under they would have to sell their contracts to other banks creating a more competitive market for smaller banks which would cushion the blow. Jobs would be lost, but it'd be nowhere near the 25% range. That's just a far fetched exaggeration.

As for the auto industry in the midwest as you said yourself Japanese companies are more than likely going to conquer the factory market in order to fill the void. There would not be enough factories to fill the demand for automobiles, thus they would pretty much have to. It's just another case of rich people saying "We don't want our cars to be unamerican."

To assume that all companies would go under is just another case of drinking the kool-aid. This is the kind of rhetoric that large banking firms want you to believe because they're scared shitless and want your money. The shining gold standard in itself is a fabrication. There is no gold standard for living beyond what we make of it. We can't make anything of our economy if we just throw meaningless money at it.

Furthermore I still think we need to hang Greenspan by his thumbs. That cocksucker should die and rot in hell already. I may not believe in hell but I'm willing to make one just for him.

RomanClock

700 billion is more than the GDP of most nations on earth.
lemayo lol :soups: