Behold, the birth of a liberal "tea party"

[Xru]

I'll vote the Tea ticket if Sarah Palin is the Presidential candidate .. . . I want to see her in a bikini even if it is Photo Shopped!

Wait . . . . . . wait . . . . wait































. . . wait .. . .wait . . .. It's the Tofu Party.

I nominate SoyMan as the obvious choice for the Presidential slot. He'll get the Christian vote.

Then I nominate Lao Tzu . . . He'll bring in the agnostic/atheist/materialistic naturalism voters! There's no problem with your citizenship is their LT? I mean . . . of course not. But we have to be sure! AND you are a War Hero! I can easily make up a very believable war Hero story.

The Tofu Party thread starts here http://www.theologyweb.com/campus/sh...23#post3314323

[nickcopernicus]

Nick:
I can think of a real world example where it’s profitable to lend to people who are unable to repay their debts.
Consider this. It’s well known that most mortgages aren’t retained by the institution that initiates the loan. So If my ‘bank,’ let’s call it Country Wide Financial, focuses on generating subprime mortgages instead of prime or Alt-A mortgages because subprime mortgages command higher interest rates, then it would generate more revenue than a conventional bank that focused on only lending to prime or Alt-A customers.

If both institutions are going to sell their mortgages to investment banks, who will then securitize these mortgages and pay rating agencies to rate them, then why should my Country Wide Financial give a crap if these people can pay them back or not?

This is of course, what happened. There doesn’t appear to be any free market, self-correcting solution that would prevent this from happening.
Read about Country Wide Financials dealings here.

Joel:
But this didn't happen in an unhampered market. There was printing of money and giving it to banks, expectations of bailouts, government manipulation of interest rates.

Nick:
I did not say it happened in a free market. I simply pointed out that there are times when it’s profitable to give loans to people who can’t afford them. I am not sure a free market would change this much.

Joel:
In an unhampered market, the higher price for riskier loans will tend toward only offsetting the higher frequency of default, such that on average, the return is the same (or zero, because the demand for such high priced loans falls to zero).

Nick:
Well, I’m no expert on statistics, but I doubt it would work out that perfectly. I suspect there are plenty of algorithms that determine the frequency in which low credit scores correlate to loan defaults. However it doesn’t seem that the rate of defaults would reduce the return for primary lenders.
Perhaps in the overall market things would equalize, however, it doesn’t seem that it would reduce the incentive of organizations like CFW to lend to people that can’t afford them. So long as there are plenty of investors willing to take the risk of default, IOW, as long as there is a market for Sub Prime Mortgages (SPM), there will be organizations willing to supply them.

This in and of itself isn’t much of a problem. It’s when these problems spread to people who had nothing to do with it that my concerns arise.

Joel:
But as you say, they were profitable because other institutions (e.g., Freddy and Fannie) were willing to purchase anything. Yes, but why was this possible? F&F were willing to purchase anything because they were able to sell anything by guaranteeing repayment of the loan themselves if the borrower defaults. And why was this guarantee trusted completely? Because it was expected that even if F&F were unable to honor its guarantee, the federal government would step in and honor it (bail them out).

Nick:
It’s true that FNM and FRE hold around half of the mortgage market; however you seem to be ignoring the other half.

Even if FNM and FRE did not exist, or where not government controlled agencies, there would be investors willing to purchase these MBS. That the market appetite for these MBS would be half of what it is now doesn’t eliminate the fact that the private sector played a large role in the housing bubble and subsequent collapse.

Joel:
Without this, as F&F became more insolvent, their guarantee would have been worth less and less, their investors would have dried up. Without subsidization of risk, prices would have better reflected the risks.

Nick:
I agree that without FNM and FRE, the market correction probably would not have been as extreme as it was.

Nick:
Certainly you’ve heard of herd mentality. Lots of financial institutions and consumers irrationally contributed to the housing bubble.

Joel:
The problem with this is that in an unhampered market, errors produce signals and incentives in the other direction. The further a price or quantity is pushed off equilibrium, the bigger the signals and incentives pointing back to equilibrium. The bigger (and more obvious) become the opportunities for people to profit by pushing things back toward equilibrium. The odds become bigger that someone will spot these opportunities for profit. As well as the fact that the people making the mistakes will be incurring losses.

What causes a bubble is when these signals are masked/distorted by government intervention. E.g., where losses are hidden so people continue making a mistake without being able to tell it is mistaken.

For example, when the government inflates the currency, it can make returns appear larger than they really are--can make a loss appear as if it were a profit.

And an even bigger problem results from artificially lowering interest rates.
It is the combination of these two (and things like FDIC) that create bubbles.

Nick:
Look, we both agree that bubbles occur, and we both agree that market distortions exacerbate the intensity of market corrections. However we part ways when you insist that it’s primarily (or at least you imply thus) government intervention that creates market distortions.

Last time I checked the major credit rating agencies are not a part of the government. They contributed immensely to market distortion by giving investment grade ratings to MBS’ that were full of SPMs. Now sure, AFAICT, no one can predict the future, but there is an obvious conflict of interest when the rating agencies were paid (and handsomely so) to rate these securities.

So my point here is that our aim should be to minimize market distortion. To do that requires government regulation that companies, especially publicly owned companies accurately report their financial activities. Hence, government oversight.
Sure, if a company is reporting bogus data, eventually it will catch up to them. But in many times not before it’s destroyed not a few lives in the process.

Joel:
In that case of the market for transferring risk, risk tends to get priced correctly. It will constantly be pushed to the equilibrium price. And those taking on the risk bear its full risk. There's no problem with that. The problem arises when an outside force causes risk to be mis-priced.

Nick:
Forces such as conflict-of-interest prone rating agencies, des ne?

Cheers,

Nick

[nickcopernicus]

I don't suppose you can tell us WHY GM and Chrysler had to be bailed out in the first place, can you?

Nick:
Well, I am slightly in favor of them being bailed out. Firstly because IF the government absolutely insists on bailing out industries....well, I can drive a corvette or a 300. AIG and Lehman Bros did not make anything except money AFAICT.

Government bailouts aren't anything new (remember the Airlines and 9/11?) I am not against them in principle, but I think they should be more of a 'nuclear option' sort of thing that will save more 'lives' than if they didn't use it. In this case, America would likely have lost the last shred of a manufacturing base that we had. So I guess it's both the jobs it saved and a bit of national pride. Plus, now, AFAICT, both Chrysler and GM are doing well. Weather it was worth it is a matter of some debate, but as I said, I can see the results in people keeping their jobs and both companies being forced to get their acts together. At least for a while.

Cheers,

Nick

[Cow Poke]

Nick:
Well, I am slightly in favor of them being bailed out. Firstly because IF the government absolutely insists on bailing out industries....well, I can drive a corvette or a 300. AIG and Lehman Bros did not make anything except money AFAICT.

Wow -- because they have a product you can use, it doesn't matter WHY they needed a bailout?

Government bailouts aren't anything new (remember the Airlines and 9/11?)

And how many times has that ever happened?

I am not against them in principle, but I think they should be more of a 'nuclear option' sort of thing that will save more 'lives' than if they didn't use it. In this case, America would likely have lost the last shred of a manufacturing base that we had. So I guess it's both the jobs it saved and a bit of national pride.

And, again --- it doesn't matter WHY?

Plus, now, AFAICT, both Chrysler and GM are doing well. Weather it was worth it is a matter of some debate, but as I said, I can see the results in people keeping their jobs and both companies being forced to get their acts together. At least for a while.

Cheers,

Nick

Ford is doing well, and they didn't take a bailout.

[nickcopernicus]

Nick:
Re: Automobile industry. You don't think that as a majority shareholder and debtor of GM and Chrysler, the government should have any say in what goes on in those companies? Who initiated the bailout of GM and Chrysler? Hint, it wasn't a Democrat.

Rogue06:
The problem is that they seized control of the auto industry in the first place which is what made them the major shareholder. And IIRC GM filed for bankruptcy protection in the summer of 2009 which is when the federal government took control of 60% of the company -- who was president then? Which party had absolute control of both parts of Congress?

Nick:
In answer to your questions: Obama and Democrats. Now, will you please answer mine?

rogue06:

Sure auto companies had been bailed out before. Chrysler was back around 1980. But they paid it back in something like three years with the taxpayers gaining several hundred million dollars in the deal. Contrast that to how it was done under Obama. The stockholders were screwed along with the taxpayers.

Nick:
…..and When your boy GW and his “conservative” congress bailed out the airline industry and didn’t take control of the industry, the airlines laid off tens of thousands of workers. What’s your point? That both Republicans and Democrats are for bailouts, but the Democrats at least pretend to try and save jobs?
If the auto bailout was an example of a ‘far left’ policy then you would need to acknowledge that your boy GW was also a ‘far left’ leader in order to maintain consistency. Right?

Nick:
Re: Healthcare---er, he may have pushed for healthcare reform, but he certainly did not write that bill. Sure, he spent the better part of his first year in office being a salesman for reform, but he didn't write it. But sure, we can chalk this up to being a far left policy.

Rogue06:
Um, you should have learned in Middle School that the president doesn't write bills. Any of them. That is done in the House of Represenatives. But Obama made it clear what he wanted.

Nick:
I wonder how someone so smart can make such inane statements. The careful reader would see that above I acknowledge that the healthcare bill that Obama was a salesman for is an example of a far-left policy. What do I get in response? Some stupid crap about how I should have learned that presidents don’t write laws.
Please forgive me. I was educated in Texas and Oklahoma, both states of which are rife with ignorant country bumpkins.

Nick:
Re: Tax increases....er, how much have your taxes increased since Obama took office?

Rogue06:
Being grossly underemployed and often unemployed since then my taxes have gone down because I have far less income.

Nick:
Okay. And if you had kept your job or made over $250,000 a year would your tax rates have gone up? What’s that? I didn’t think so. In fact, one of the first things he did when he got into office was pass a massive stimulus bill that included tax cuts. He extended the Bush tax cuts. I wish people would stop griping about Obama and how he’s trying to ‘raise their taxes.’
Dammit. I hate having to defend Obama because I’m not impressed with him at all. But for the love of Mephistopheles, please come up with some legitimate criticism.

rogue06:
But the fact remains that he has pushed for substantial tax increases even after readily acknowledging that raising taxes during a recession is bad economic policy.

Nick:
Has Obama vetoed or threatened to veto any bill that didn’t include these tax rate increases he’s pushed for? No. I am more interested in what he has done than I am in what he has said. He also said he’d close Guantanamo one year after he was sworn in. So he’s a liar. He’s a politician so that can’t be too much of a shock.

rogue06:
Before being elected he indicated he wanted to raise capital gains taxes (even acknowledging the government would get less revenue as a result) for the "purpose of fairness."

Nick:
Of the hundred and seventy thousand dollars I made last year, $33,000 of it was in capital gains and dividend payouts. On that income I paid 15%. The marginal tax rate on someone who makes $8,375 – $34,000 is 15%. Fair, des ne?
So when an investment banker makes 400,000 in capital gains and pays a tax rate of 15%, that’s fair when juxtaposed to the 35% that a surgeon, who saves people’s, lives pays right?
You’ve an ‘interesting’ sense of fairness.

rogue06:
Keep that in mind next time he claims he wants to raise revenue.

Nick:
Cause we all know it’s silly to raise revenue if one wants to reduce deficits.

rogue06:
And as I noted he even delayed settlement of the deficit debate earlier this year by insisting that tax increases be included after the Senate Democrats agreed to drop it.

Nick:
Well, did the resultant agreement require his approval? If it did, did it include tax increases?

Nick:
Re: Pro-Gay marriage - Exactly what powers does a president have that influence this one way or another?...IOW, who gives a crap what his views are on this?

Rogue06:
How about by instructing his Justice Department to no longer oppose legal challenges to the Defense of Marriage Act which bars the federal government from recognizing same-sex marriages for one?

Nick:
No, that’s not far left. That’s “the justice department has far more important things to worry about, like terrorists and criminals, than to waste time defending a law passed to stop homos from marrying.”

Nick:
Re: Pro-Abortion - Loaded term not worthy of comment.

Rogue06:
Can't blame you for not wanting to defend partial birth abortion (something his vice president even voted against) much less Obama's vote against a bill that would protect babies born alive following unsuccessful abortions.

Nick:
Perhaps when you’re feeling a bit more rational we can have a discussion on abortion in another thread.
For now, I will cede that his views on abortion are far left.

Nick:
You forgot one, Obama believes in evolution.

Rogue06:
Considering the number of conservatives I know who accept evolution I don't see this as a liberal-conservative issue. Nice try at introducing a red herring though.

Nick:
You aren’t getting off that easy. What percentage of conservatives believe in evolution compared to those on the ‘far left’ that do?
Let me give you a hint: your antidotal evidence doesn’t override a gallop poll.

Nick:
Eh, I hardly think the increased drone strikes or his fortitude to go after and kill Bin-Laden were 'forced' upon him. What lead you to believe these things were forced upon him? Did someone also 'force' him to keep Gates on as Sec O' Defense? Those are things we'd expect of a Republican president. if anything, besides the cessation of water boarding, Obama has been as tough on or more tough on foreign policy as Bush.

Rogue06:
"Fortitude to go after Bin-Laden"? I would expect any president - liberal or conservative to do that without hesitation.

Nick:
I would expect a far left president to do something stupid like ask Pakistan’s permission first.

rogue06:
And appointing a member of the opposition party in the Cabinet has recently become a bit of a tradition. IIRC Clinton did it. Bush moved Clinton's Commerce Secretary over to Transportation. In reality it represents an essentially empty gesture toward the notion of bipartisanship. Much of the public, including a good number of those who voted for him, had doubts about Obama when it came to defence so he felt it wise to leave someone with gravitas in there even if it was for the majority of the time a figurehead position.

Nick:
I doubt a far left president would appoint a member of the opposition party to the largest, and one of if not the most important departments into their cabinet. No, appointing a Republican as SOD (Gates is the only person, IRRC, to have served under two opposition parties) is hardly an ‘empty gesture’ nor is it the actions of a far left leader.

rogue06:
And launching high altitude bombing attacks like in Libya and drone attacks are things the press allows Democrat presidents to do but not Republicans because they result in a dramatic increase in civilan casualties. That was why we were forced to use low altitude bombing in Iraq under Bush. To the majority of the press civilian casualties are atrocities when a Republican is president but merely collatoral damage under Democrats.

Nick:
I’m sorry. I missed where this indicates that either Obama wasn’t tough on foreign policy or that his actions are similar to those of far left presidents.

Rogue, honestly, you’re a smart guy and I read with pleasure almost everything you post in the natural science forum. So it’s very painful for me to see you sound less like a Libertarian and more like an uninformed conservative (I am NOT calling all Conservatives uninformed) who, when all else fails, falls back on complaining about the media.

VR,
Nick

[nickcopernicus]

Wow -- because they have a product you can use, it doesn't matter WHY they needed a bailout?

Nick:
That's not what I said nor implied. So, would you rather your government spend your tax money on things you can't use?

CowPoke:
And how many times has that ever happened?

Nick:
At least a dozen times since 1970, AFAICT.

Cow Poke:
And, again --- it doesn't matter WHY?

Nick:
I'm sorry, I don't quite understand your question. Are you asking if it doesn't matter why, or my comment doesn't matter, and why (are bailouts okay).

Cow Poke:
Ford is doing well, and they didn't take a bailout.

Nick:
Which is why my next vehicle is likley to be a Ford Taurus SHO. Look, the benefits outweighed the cost. You can disagree that it was so; however surely you'd agree that if the benefits outweigh the cost then action should be taken, right?

Cheers,

Nick

[Cow Poke]

Nick:
That's not what I said nor implied. So, would you rather your government spend your tax money on things you can't use?

wow, what a failure to grasp the principle... But I AM glad that you recognize that it IS my money, and not the governments! There's HOPE!

And you never answered my question about WHY GM and others "needed" a bailout.

Nick:
At least a dozen times since 1970, AFAICT.

What "half dozen" incidents are on a scale of 9/11, Nick?

Nick:
I'm sorry, I don't quite understand your question. Are you asking if it doesn't matter why, or my comment doesn't matter, and why (are bailouts okay).

Why did they "need" bailouts. I have one daughter who spends all her money on Starbucks, cigarettes, tattoos, and foolishness, and always needs help with rent money or utility bills. I have another daughter who never needed help, but when her husband died of cancer, she was short of money with all the expenses until insurance money came in. I helped both -- but you know which one I enjoyed helping?

Nick:
Which is why my next vehicle is likley to be a Ford Taurus SHO. Look, the benefits outweighed the cost. You can disagree that it was so; however surely you'd agree that if the benefits outweigh the cost then action should be taken, right?

Not all economists agreed, Nick. Again -- do you know WHY they needed the bailout? That's not important to you?

[joel]

In an unhampered market, the higher price for riskier loans will tend toward only offsetting the higher frequency of default, such that on average, the return is the same (or zero, because the demand for such high priced loans falls to zero).

Well, I’m no expert on statistics, but I doubt it would work out that perfectly.

To clarify, the statistical condition I gave is not what would be, it is what the market would constantly tend toward because of the profit/loss incentives. (and it would be a constantly moving target that it would be tending toward.)

It’s true that FNM and FRE hold around half of the mortgage market; however you seem to be ignoring the other half.

The expectation of a federal guarantee of F&F is only one example of the government subsidizing risk.
FDIC and credit expansion by the Federal Reserve are other examples.

However we part ways when you insist that it’s primarily (or at least you imply thus) government intervention that creates market distortions.

Last time I checked the major credit rating agencies are not a part of the government.

Perhaps not nominally owned by the government, but it is extremely regulated and the big three agencies form a government-enforced cartel/monopoly.


There is also the issue that when the price of risk is subsidized, then it becomes difficult to impossible to measure it well. Just as if the government distorted the price of beans, it would be difficult to impossible to accurately judge the true market value of beans.

This is the problem when we consider market-wide bubbles in general, which are caused by artificial credit expansion, when interest rates are held artificially low. The objection is raised regarding why businessmen didn't correct for this--why they all made the mistake of acting as if the artificial interest rate were the real market rate. A big reason for it is that with the interest rate exogenously manipulated, it's impossible to guess what the real market rate would be.

Government bailouts aren't anything new (remember the Airlines and 9/11?) I am not against them in principle, but I think they should be more of a 'nuclear option' sort of thing that will save more 'lives' than if they didn't use it. In this case, America would likely have lost the last shred of a manufacturing base that we had.

Yes, there is a history of bailouts. That's part of the problem because it causes moral hazard.
And I disagree with your conclusion. I think this thinking comes from a misunderstanding of bankruptcy. I think people are thinking that all the assets disappear into nothingness. On the contrary, the assets would simply change hands. The new owner(s) could keep the business running (and people employed) as it did before (but without the debts and other obligations). More likely is that the use of the assets would be improved (since the old practices clearly resulted in losses). In a free market, the profit incentives keep pushing assets to their most economical uses, thus increasing standards of living. Propping up unsound firms only obstructs that process and perpetuates waste and destruction of wealth.

So when an investment banker makes 400,000 in capital gains and pays a tax rate of 15%, that’s fair when juxtaposed to the 35% that a surgeon, who saves people’s, lives pays right?

I'm all for lowering the 35% rate to 15% or even lower. Then it'd be "fair," right?

[rogue06]

Nick:
In answer to your questions: Obama and Democrats. Now, will you please answer mine?

Going a bit on memory here but IIRC the Democrat-controlled Congress passed a $25 Billion bailout. Bush eventually agreed but pared it down to $17 Billion which was $17 Billion too much IMHO. So the answer is both the Democrats and Bush.

Nick:
…..and When your boy GW and his “conservative” congress bailed out the airline industry and didn’t take control of the industry, the airlines laid off tens of thousands of workers. What’s your point? That both Republicans and Democrats are for bailouts, but the Democrats at least pretend to try and save jobs?
If the auto bailout was an example of a ‘far left’ policy then you would need to acknowledge that your boy GW was also a ‘far left’ leader in order to maintain consistency. Right?

My "boy GW"? I'm not sure I voted for him either time (Here in Georgia it was a fore-gone conclusion he'd win allowing me to vote for third party candidates as a protest vote).

The difference between them is that the airline bailout the taxpayers didn't get screwed. The airline bailout was paid after earning a $300 Million profit for the taxpayer. Under Obama the auto bailout money only gets paid back from other money given to them from the taxpayers pockets. Further the airline bailout resulted from 9/11 rather than due to horrible business decisions made by the companies like in the case of the auto companies. Further during the airline bailout the stockholders weren't shafted so that the unions could be paid off. And speaking of that they sure got nice raises and big sign on bonuses all paid for by the taxpayers.

Nick:
I wonder how someone so smart can make such inane statements. The careful reader would see that above I acknowledge that the healthcare bill that Obama was a salesman for is an example of a far-left policy. What do I get in response? Some stupid crap about how I should have learned that presidents don’t write laws.
Please forgive me. I was educated in Texas and Oklahoma, both states of which are rife with ignorant country bumpkins.

Then why bring up the red herring that "he certainly did not write that bill" in the first place?

Nick:
Okay. And if you had kept your job or made over $250,000 a year would your tax rates have gone up?

Don't know since I don't fill out my taxes based upon what I didn't make.

Dammit. I hate having to defend Obama because I’m not impressed with him at all.

Well if Bush is my boy then Obama is yours.

Nick:
Has Obama vetoed or threatened to veto any bill that didn’t include these tax rate increases he’s pushed for? No. I am more interested in what he has done than I am in what he has said. He also said he’d close Guantanamo one year after he was sworn in. So he’s a liar. He’s a politician so that can’t be too much of a shock.

The point was he sabotaged a process as it was finally reaching a conclusion because he continued to demand an increase in taxes after the Democrats in the Senate agreed to drop this demand. It pushed the settlement of the debt crisis to the brink delaying agreement by over a week.

Nick:
Of the hundred and seventy thousand dollars I made last year, $33,000 of it was in capital gains and dividend payouts. On that income I paid 15%. The marginal tax rate on someone who makes $8,375 – $34,000 is 15%. Fair, des ne?
So when an investment banker makes 400,000 in capital gains and pays a tax rate of 15%, that’s fair when juxtaposed to the 35% that a surgeon, who saves people’s, lives pays right?
You’ve an ‘interesting’ sense of fairness.

Um, most people have already paid income tax on the money they invested when they initially earned it and then paid an additional 15% capital gains tax on that if they made any profit when they risked it investing it. So actually your money was taxed twice.

Nick:
Cause we all know it’s silly to raise revenue if one wants to reduce deficits.

Remember Obama even acknowledged that raising the capital gains tax would result in a decrease in revenue but didn't care because it was for the "purpose of fairness." The fact is there are many ways to raise revenue. But what Obama is interested in is not raising revenue but raising taxes.

Nick:
Well, did the resultant agreement require his approval? If it did, did it include tax increases?

His tax increase demand resulted in prolonging the debate and almost certainly contributed in the decision to downgrade our credit rating by S&P.

Nick:
No, that’s not far left. That’s “the justice department has far more important things to worry about, like terrorists and criminals, than to waste time defending a law passed to stop homos from marrying.”

You asserted that Obama had no influence over the gay marriage debate which I demonstrated was not the case. And I don't think the reasoning you provided was ever brought up when they announced their decision. They said it was because they thought the Defense of Marriage Act was discriminatory and therefore unconstitutional not for the reason you just made up -- that they had more important things to do.

Nick:
Perhaps when you’re feeling a bit more rational we can have a discussion on abortion in another thread.
For now, I will cede that his views on abortion are far left.

If allowing someone to kill live babies after they were unsuccessfully aborted is the rational view I sincerely doubt I'll be "rational" about it later.

Nick:
You aren’t getting off that easy. What percentage of conservatives believe in evolution compared to those on the ‘far left’ that do?
Let me give you a hint: your antidotal evidence doesn’t override a gallop poll.

I'll willingly concede that more liberals support evolution than do conservatives.

Nick:
I would expect a far left president to do something stupid like ask Pakistan’s permission first.

Liberals are only against unilateral action in foreign countries when conservatives do it. Clinton, who was more of a moderate liberal, launched strikes into several countries without asking their permission without a peep from the media.

Nick:
I doubt a far left president would appoint a member of the opposition party to the largest, and one of if not the most important departments into their cabinet. No, appointing a Republican as SOD (Gates is the only person, IRRC, to have served under two opposition parties) is hardly an ‘empty gesture’ nor is it the actions of a far left leader.

Considering how weak he was viewed on defense issues both here and abroad Obama felt compelled to keep Gates on possibly because he didn't have anyone in his ranks that would fit the bill. A Gallup poll showed the decision to keep Gates was supported by 80% of Americans.

Further, some liberals crowed about this decision saying he was cover for withdrawing troops from Iraq because it would be hard for conservatives to attack Obama for cutting and running because Bush's man would be overseeing it. They thought keeping him on would take Iraq off the table and help shield Obama from blame if things went wrong there. They also figured since he lost his deputies he would be essentially reduced to a figurehead though I don't think that turned out to be the case.

And while Gates is the first person to serve as SOD under two parties he is actually the fourteenth Cabinet member in history to serve under two Presidents of different parties. As I said, it has become a bit of a tradition to demonstrate bipartisanship.

Rogue, honestly, you’re a smart guy and I read with pleasure almost everything you post in the natural science forum. So it’s very painful for me to see you sound less like a Libertarian and more like an uninformed conservative (I am NOT calling all Conservatives uninformed) who, when all else fails, falls back on complaining about the media.

I think lao has come to a similar conclusion so you're not alone. But in some areas I'm more liberal than conservative (I accept evolution after all ) while in others I'm obviously more conservative than liberal.

[Jedidiah]

That's not what I said nor implied. So, would you rather your government spend your tax money on things you can't use?

I would rather spend my money myself, thanks.

[Cow Poke]

Please forgive me. I was educated in Texas and Oklahoma, both states of which are rife with ignorant country bumpkins.

Let me give you a hint: your antidotal evidence doesn’t override a gallop poll.

I'm sure you mean anecdotal.

But a good education COULD be the antidote to ignorant country bumpkins.

[Cow Poke]

I would rather spend my money myself, thanks.

I would rather Jed spend his money himself, too.

[Challenger Grim]

Cause we all know it’s silly to raise revenue if one wants to reduce deficits.

Except we've past the point where we can raise enough revenue to cover deficits.
http://dailycaller.com/2011/03/11/ha...nal-resources/
http://blogs.dailymail.com/donsurber/archives/39534

buffett%20rule.png

http://www.nationalreview.com/articles/262045/there-aren-t-enough-millionaires-kevin-d-williamson

So, how about taxing people who make less than $250,000? That’s probably whom you want to tax, since they are the ones who have the money (Counterintuitive, I know.) The Bush “tax cuts for the rich” cost the Treasury about $800 billion in forgone revenue; the Bush tax cuts for the middle class cost trillions – 2.2 of them, to be precise.
Repealing all of those Bush tax cuts, for rich and middle class alike, gets you about $3 trillion — over ten years. The deficit is running from a third to almost half that every year. Will not balance. Does not compute.

© source where applicable

Weird, I thought atheists were all about facts & math.

[nickcopernicus]

wow, what a failure to grasp the principle... But I AM glad that you recognize that it IS my money, and not the governments! There's HOPE!

Nick:
Just so long as you acknowledge that it's also your government.

Cow Poke:
And you never answered my question about WHY GM and others "needed" a bailout.

Nick:
That's because I did not understand your question. So, you are asking why the bailout was necessary in the first place, yes? It was never necessary. And I mean necessary in a strict (but not logically) sense. Hardly anyone or anything 'needs' to do anything. The government doesn't 'need' the public's consent to do what it wants. No one 'needs' to follow the laws. Because we have at the very least, the illusion of free will, we can do whatever we want so long as it's physically possible. Now the consequences of one action might be of a nature that necessitates taking one action over the other - thus a 'need' occurs.

So I'd say that GM and Chrysler 'needed' the bailout because otherwise, it's very possible they would have filled chapter 7, liquidation, instead of chapter 11, restructuring.
Apparently, the final cost of the Chrysler bailout was around 1.8 billion dollars. Although the final cost of the GM bailout is yet to be determined, according to a Bloomberg news story, if the Government sold its remaining shares, the losses would amount to 9 billion dollars.

Sickening, I know. but two points arise here. First, in the same news story Bloomberg cites a study that shows the US government would have lost 28 billion in tax revenue had both companies filed for chapter 7. Now that research group, Center for Automotive Research in Ann Arbor, Michigan, is hardly an unbiased source. But if we half their number and include the jobs lost, we'd see that the benefit outweighed the cost.

It's completely unfair to Ford, whose CEO (The former CEO of Boeing) had to lay off over 9,000 workers in, IRRC, February of 2007, but was able to report their first quarterly profit in 2008 since like '06. How can a market be nominally free or even fair if bad business practices are subsidized with taxpayer (some of who lost their jobs anyway) money? Of course it can't.

But when we compare that to the 182 billion that it cost the government (22 billion of which apparently went in the pockets of investment banks such as Goldman Sachs) on AIG, the auto bailout was worth it.

To borrow a bit from Churchill, if the government is willing to spend so much on so few (bank bailouts), isn't it natural that we demand they spend such a little on so many (Auto bailouts)?

Cow Poke:
What "half dozen" incidents are on a scale of 9/11, Nick?

Nick:
Oh, another misunderstanding on my part. I thought you were asking how many times the government bailed out corporations. So I'll assume your question was a bit rhetorical as it's obvious that attacks like 9/11 are exceedingly rare. Pearl Harbor is the closest incident in the last hundred years I can think of.

Cow Poke:
Why did they "need" bailouts. I have one daughter who spends all her money on Starbucks, cigarettes, tattoos, and foolishness, and always needs help with rent money or utility bills. I have another daughter who never needed help, but when her husband died of cancer, she was short of money with all the expenses until insurance money came in. I helped both -- but you know which one I enjoyed helping?

Nick:
But you 'helped' both right? Look, I totally understand. It undermines the whole system when one eliminates the need to practice good business. We can even say that people who worked for GM and Chrysler should have diversified their job skill set, or that they should have worked for better companies or chose a better job field.

I am 100% for personal responsibility. The recent Supreme Court decision notwithstanding, corporations aren't 'persons.' They are organizations. No one size solution will fit- which is why I go for case to case bases. The Financial industry has become an over-mature forest in need of a large fire. No banking institution should have gotten a bailout. Perhaps it would have brought the American economy to its knees. But AFAICT, that happened anyway. It's just that it's far less of a problem that the auto industry got a bailout if the Financial Industry did.

Cow Poke:
Not all economists agreed, Nick. Again -- do you know WHY they needed the bailout? That's not important to you?

Nick:
AFAICT, the only thing that all economists agree on is that all economists rarely agree on anything. They 'needed' the bailout for reasons listed above. Yes, it's important to me.

Cheers,

Nick
p.s.

I'm sure you mean anecdotal.

Nick:
Correct. I could not remember how to spell it and MS word didn’t show that when I clicked for spelling corrections. I was forced to leave it since I don’t have a paper dictionary. I suppose I could have googled it, but it did not occur to me at the time. Anyway, thanks for the correction.

Cow Poke:
But a good education COULD be the antidote to ignorant country bumpkins.

Nick:
Now yer’ making cents.

[Cow Poke]

Nick:
Just so long as you acknowledge that it's also your government.

And why would I deny that? You miss the point entirely. The government doesn't HAVE any money -- the collect it from the citizens or they print it, but it is "we the people" who pay for things. At least -- the 49% of us who actually pay taxes.

Nick:
That's because I did not understand your question.

You STILL don't.

So, you are asking why the bailout was necessary in the first place, yes? It was never necessary.

Then it simply should not have happened.

And I mean necessary in a strict (but not logically) sense. Hardly anyone or anything 'needs' to do anything. The government doesn't 'need' the public's consent to do what it wants. No one 'needs' to follow the laws. Because we have at the very least, the illusion of free will, we can do whatever we want so long as it's physically possible. Now the consequences of one action might be of a nature that necessitates taking one action over the other - thus a 'need' occurs.

Do you need to breathe, Nick? You are really torturing the word "need".

So I'd say that GM and Chrysler 'needed' the bailout because otherwise, it's very possible they would have filled chapter 7, liquidation, instead of chapter 11, restructuring.
Apparently, the final cost of the Chrysler bailout was around 1.8 billion dollars. Although the final cost of the GM bailout is yet to be determined, according to a Bloomberg news story, if the Government sold its remaining shares, the losses would amount to 9 billion dollars.

Sickening, I know. but two points arise here. First, in the same news story Bloomberg cites a study that shows the US government would have lost 28 billion in tax revenue had both companies filed for chapter 7. Now that research group, Center for Automotive Research in Ann Arbor, Michigan, is hardly an unbiased source. But if we half their number and include the jobs lost, we'd see that the benefit outweighed the cost.

You're still not getting it. What was the CAUSE of the financial crisis in the automakers? Do you have any clue?

It's completely unfair to Ford, whose CEO (The former CEO of Boeing) had to lay off over 9,000 workers in, IRRC, February of 2007, but was able to report their first quarterly profit in 2008 since like '06. How can a market be nominally free or even fair if bad business practices are subsidized with taxpayer (some of who lost their jobs anyway) money? Of course it can't.

Yet, that seems to be exactly what you are justifying.

But when we compare that to the 182 billion that it cost the government (22 billion of which apparently went in the pockets of investment banks such as Goldman Sachs) on AIG, the auto bailout was worth it.

I'm becoming more and more convinced that you really don't understand economics.

To borrow a bit from Churchill, if the government is willing to spend so much on so few (bank bailouts), isn't it natural that we demand they spend such a little on so many (Auto bailouts)?

No.

Nick:
Oh, another misunderstanding on my part. I thought you were asking how many times the government bailed out corporations. So I'll assume your question was a bit rhetorical as it's obvious that attacks like 9/11 are exceedingly rare. Pearl Harbor is the closest incident in the last hundred years I can think of.

The point is -- 9/11 was extraordinary, and certainly not the fault of the airlines in any way, shape or form.

Nick:
But you 'helped' both right? Look, I totally understand. It undermines the whole system when one eliminates the need to practice good business. We can even say that people who worked for GM and Chrysler should have diversified their job skill set, or that they should have worked for better companies or chose a better job field.

You're still missing the actual cause of the auto industry's demise.