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Bloggingheads 05-27-2010 03:25 AM

Slow Bleed (Annie Lowrey & Mike Konczal)
 

breadcrust 05-27-2010 07:24 AM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Lynn Paramore, editor at New Deal 2.0 (see above under "Mike Konczal") wrote a piece at HuffPo on April 27th about a commission which discussed the "myths" of US government deficits. Here's one of the experts:

Quote:

The truth is, the system was never broken in the first place, because the government's ability to pay benefits does not in any way depend on the balance in the Social Security or Medicare Trust Funds. Benefit checks come directly from the Treasury, and, as Alan Greenspan has admitted, "[A] government cannot become insolvent with respect to obligations in its own currency."

And so the question is not whether the government needs to make "tough choices" in order to keep these vital programs afloat. The question is, will politicians make the toughest choice of all and tell the American people the truth: Social Security and Medicare face no financial crisis now or in the future.
You see? Deficits don't matter because the US can always monetize any debt in its own currency. This is becoming standard thinking among liberals, not just Galbraith and Klein.

badhatharry 05-27-2010 11:13 AM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
This was kinda like a totally interesting discussion of the current financial space.

Mike explains the best time for the government to step into the economy....when the smart money isn't.

Ocean 05-27-2010 11:23 AM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Nice discussion about finance reform (or rather regulation) bill.

Annie and Mike interact very nicely. They are both sweet, smart and knowledgeable. I'll leave the comments on their physical appearance for others to make, although I doubt anything negative could possibly be said. Oh, youth!


The last section was, although a more trivial concern, a very timely one, regarding facebook privacy issues. Having started, for still unclear reasons, a facebook page just recently, I can relate very well to the issues discussed. I found the discussion about the way the "Millenials" view these privacy concerns particularly interesting, as it relates to my children's age. But, the idea of only sharing what you wouldn't mind your mother or your boss to know is a simple rule of thumb. In my case, I tend to think of what I wouldn't mind that much if my patients found out. Of course, then I have to think about what my friends post that shows up on my wall, and then it starts to get tricky... Especially when friends start to get overly excited posting glamorous photos of celebrities in various degrees of limited clothing.

:)

conncarroll 05-27-2010 12:30 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by badhatharry (Post 162844)
This was kinda like a totally interesting discussion of the current financial space.

Mike explains the best time for the government to step into the economy....when the smart money isn't.

Do progressives like Annie and Mike pause for even a second to wonder if just maybe the market is telling us something when no bank wants to be making mortgages. Maybe housing prices are too high and need to be corrected? Maybe we've already invested too many of the eocnomis resources into housing and we need to scale back?

No, of course not, says Mike. Government was created for this purpose! Just reinflate the bubble!

This is exactly why Fannie and Freddie must die and sooner rather than later.

claymisher 05-27-2010 12:41 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by conncarroll (Post 162850)
Do progressives like Annie and Mike pause for even a second to wonder if just maybe the market is telling us something when no bank wants to be making mortgages. Maybe housing prices are too high and need to be corrected? Maybe we've already invested too many of the eocnomis resources into housing and we need to scale back?

No, of course not, says Mike. Government was created for this purpose! Just reinflate the bubble!

This is exactly why Fannie and Freddie must die and sooner rather than later.

If you really think that's what Mike thinks then you're even dumber than I thought.

SaraK 05-27-2010 12:41 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Good discussion. I like that Annie made sure to stop and summarize what Frannie and Freddie were -- in this case I knew, but in analogous situations in other BHs on topics that are more far afield for me, I don't, and I wish BH would more strongly encourage this type of quick review.

JoeK 05-27-2010 01:29 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
You commie-socialists are going to lose again; just like you lost 1989. Then it was Berlin Wall that came crashing, this time around European welfare states will crash and burn for everybody to see. You won't be able to deny it.

AemJeff 05-27-2010 04:08 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by JoeK (Post 162860)
You commie-socialists are going to lose again; just like you lost 1989. Then it was Berlin Wall that came crashing, this time around European welfare states will crash and burn for everybody to see. You won't be able to deny it.

Wow, Joe! Take your medication, man, you'll feel better after you get some sleep!

conncarroll 05-27-2010 06:49 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by claymisher (Post 162852)
If you really think that's what Mike thinks then you're even dumber than I thought.

OK then. Educate me. What exactly did Mike mean when he said Fannie and Freddie's role in today's housing market is exactly why and when the guvment needs to interfere in the economy.

carkrueger 05-27-2010 09:10 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
The financial regulatory bill is a “disaster,” and its proposed consumer protection agency would create a Fannie and Freddie “on steroids,”

“The bill is a disaster because it doesn’t address the fundamental underlining causes of the economic issue, which were real estate and underwriting,” he said. “This bill became, ‘I want to score the most points against Wall Street.’

“You’ll basically have a consumer protection agency which decides to go out and in the morning and say, ‘well everybody who’s XYZ should have a loan, even though the local community bank says XYZ shouldn’t have a loan, because if we give them a loan, we know they’re not going to pay back,’” he said. “It’s going to become an agency that defines lending on social justice purposes instead of safety and soundness purposes.”

Sen. Judd Gregg, R-N.H. CNBC

I'll trust Judd Greggs word on this one.

kezboard 05-27-2010 09:48 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

I'll trust Judd Greggs word on this one.
Really.

Cain 05-28-2010 01:12 AM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
"totally radically."

badhatharry 05-28-2010 08:45 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by conncarroll (Post 162850)
Do progressives like Annie and Mike pause for even a second to wonder if just maybe the market is telling us something when no bank wants to be making mortgages. Maybe housing prices are too high and need to be corrected? Maybe we've already invested too many of the eocnomis resources into housing and we need to scale back?

I am convinced that this is a reflection of what economics majors are learning. Not 'what is the best, most prudent thing to do', but rather just 'do something, because we have all these totally bitchin' vehicles for interfering'. Smith would roll over. But maybe not...he knew a thing or two about human nature.

Have you ever seen this? This should be a part of the curriculum, but of course won't ever be. We're doomed!!!

Despite overwhelming evidence, Socialism does not go away. Like a vampire, it reappears and seemingly cannot be terminated. Like the vampire, it sucks the life out of each economy it touches. Despite experience, each new generation seems to produce gullible people lured by the siren song of socialism. Each generation seems destined to battle these false promises anew.

badhatharry 05-28-2010 08:54 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by carkrueger (Post 162883)
The financial regulatory bill is a “disaster,” and its proposed consumer protection agency would create a Fannie and Freddie “on steroids,”

I'll trust Judd Greggs word on this one.

I really like Judd Gregg.

Does no one see that the government regulatory agencies are a complete and utter mess?....arguably worse than even the Congress? From the financial meltdown to our current disaster in the Gulf, they have been proven to be ineffectual when it counts and worse, corrupt.

What to do? Hmmmm, I know. Make more regulations and create more agencies!

bjkeefe 05-30-2010 03:59 AM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by kezboard (Post 162889)
Really.

LOL! I was just thinking the same thing.

It's comical how wingnuts (une autre) immediately promote anyone to the highest level as soon as he or she does or says something against Obama.

ledocs 05-31-2010 12:22 PM

Re: Slow Bleed (Annie Lowrey & Mike Konczal)
 
Quote:

Originally Posted by conncarroll (Post 162850)
Do progressives like Annie and Mike pause for even a second to wonder if just maybe the market is telling us something when no bank wants to be making mortgages. Maybe housing prices are too high and need to be corrected? Maybe we've already invested too many of the eocnomis resources into housing and we need to scale back?

So how does the market self-correct if no bank writes mortgages? All transactions on the way down will be all-cash transactions? Or the only financing will be seller financing (but a lot of the housing stock is now owned by banks, so seller financing is bank financing)? Isn't the idea that the government helps to make a market by setting a floor on asset prices? Didn't that seem to work recently in the case of the US stock market, for example, when the DJIA had fallen to 6,600, from a high of about 14,000, before governments worldwide provided huge amounts of liquidity and guarantees to the credit markets? You've probably heard that "markets" tend to overshoot on both the upside and the downside. So perhaps the government has a role to play in making the housing correction less painful and quicker than it might otherwise be. But, yeah, the government might subsidize a mortgage on a house in a Detroit suburb that sold for $500,000 when it was built two-three years ago and is now selling for $250,000. And it might turn out that even $250,000 is too high for a while. So what? Your idea is that it should sit vacant until it finds an all-cash buyer? That's fine, if there are enough all-cash buyers to go around. But presumably there are not.

One would need to distinguish between too much housing, in the sense of too much physical housing stock, and too much housing, in the sense of a housing stock that was overvalued because, for example, too much household income was being allocated to mortgage payments, in the aggregate.

I tried to go to the segment that was most relevant here, the "101" intro to Fannie and Freddie provided by Ms. Lowrey. I found that introduction to be sadly wanting and very difficult to listen to. But in any event, Conn, you'll find that Ross Levine, also a "liberal," thinks that too much capital was allocated to housing. It is not primarily liberal economists who watched the bubble get inflated without a peep: see Shiller, Krugman, Dean Baker. That's on your guys, mostly, isn't it?

bjkeefe 06-24-2010 05:14 PM

On a somewhat peripheral note, ...
 
... one aspect of FinReg that is provoking a bit of discussion is the question of whether to regulate car loans made by dealers. I'm not really ready to discuss that at the moment, but I wanted to pass along this post by Matt Yglesias (via), just because it's interesting. Matt looks at one little-known aspect: the car loan infrastructure as a way to launder drug money.

(To further justify the inclusion of this post in this thread, I'll note that Matt links to a post that Annie did on the more mainstream concerns related to car loans and why they should be a part of FinReg. (Spoiler alert: they probably won't be.))


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