Friday, April 3, 2009
There are times, of course, when a value needs to be put on my house without the mechanics of the market involved, say for tax purposes. In order to determine the value here, a neutral party, most often from the government, estimates what my house might be worth these days and taxes me accordingly. Now, you could easily argue - and people on the right especially often do - that the government is not neutral, because they have an incentive of over-value my house in order to collect more taxes. We all know that if there is one thing the government loves, it is collecting taxes.
Now the last person who should be relied on to fairly value my house is me, right? Especially in any meaningful way. For tax purposes, I am going to value my house at $4. If I want to borrow money based on the value of my house, then its worth at least $400,000. Right? We all know this.
So someone, anyone, please for God's sake explain the new mark-to-market rules to me. How in the fuck can it make sense to let banks, not the market, not the government, but banks themselves declare what their mortgage holdings are worth? Am I understanding right that banks are saying, jeebus, no one on the market wants to buy our house for anything more than pennies. And then they say, jeebus the government is saying our house is only worth pennies. But the banks want their house to be worth more. They need to their house to be worth more so that no one thinks they're poor and have no assests, so they are going to be allowed to say that their house is worth whatever they think it is worth? And then borrow money based on that value?
This seems like perhaps the dumbest idea ever. And I don't want to go too far down this road, because I am not a trained economist in any way, but isn't this solution (again) designed to get banks lending money to each other? So if one bank tells another bank that it has holdings worth, say, ten million bars of gold-pressed latinum, it can borrow from the other bank one hundred million bars of gold-pressed latinum. And in turn that bank can borrow even more latinum from the first bank! Yeh! Because what we have here is a liquidity crisis, not an exploision of a debt-based housing bubble, a lack of middle-class jobs, stagnant wages, an over-supply of housing (in some areas), individual debt such that it makes semse to lend money to nobody. Those are problems we don't have. Nope, all we have is a crisis of confidence. If banks are not forced (BY THE GOVERMENT!!!!!) to tell people what their actual assests are worth, but are, rather, allowed to make up whatever they want, then we will all be able to see that Bank of America and CitiGroup actually have lots and lots of money and we can all quit worrying and start borrowing and buying each others houses at wildly inflated prices again.
Seriously, someone tell me where I have gone wrong, because I am starting to sound like someone who raves about these things. I feel like I am one step away from advocating a return to the gold standard here and this not a place I want to be.
Thursday, April 2, 2009
Tuesday, March 31, 2009
"I think in this economy that what has to happen is that the unions and management get together and try to see if they can work out something," Feinstein said.Yes, because after management has managed to fuck this economy nine ways 'til Sunday, we need to make sure that they stay in charge of this thing. Wouldn't want to go nuts and make it easier for the workers to have a voice, would we? I mean, I am sure the anti-EFCA forces will be perfectly willing to make some compromises that are good for everyone. And why do I deeply suspect that the compromises will be something along the lines of "stiffer penalties for management when they break the law balanced by stiffer penalties for unions." In other words, more of this crap where we pretend like there is a level playing field and both sides need to work to make nice-nice. Fuck that noise.
Monday, March 30, 2009
President Obama announced Monday that struggling automotive giants General Motors and Chrysler will be given a "limited" period of time to "restructure in a way that would justify an investment of additional taxpayer dollars."at the same time that I know that the government is spending $970 billion to buy up worthless mortgages in the hope that one day, maybe thirty years from now, they might be worth something (and then we can auction them off for pennies on the dollar!).
The US autoworker is about to take a giant kick in the metaphorical balls. What makes me cry is that, while I just read a whole lot about how bad Joe Finance has it because he might lose his million dollar bonus at AIG, I imagine I am about to read a whole lot about how Joe Autoworker had it coming because he wanted health care after he retired. Fuck. Fuck, fuck, fuck.
I'd also like to note for the record, before we get too far down the fuck road that Obama defended the AIG bonuses because there were in a legal contract, and here he is saying that UAW must again "restructure" its contract in order for the industry to get more bailout money.
Of course, when one looks across the aisle, what do we see? Fuck stick and Lex hero Senator Bob Corker. Here is a guy who looks at a situation where the auto industry is coming to the government begging for money to stay afloat and the government says, sure we'll give you the money, as long as you make some changes to your business (especially if you can figure out a way to fuck your workers, because worker fucking is fun for everyone) and this asshat sees the heavy boot of communism come crashing down on American capital.
Sen. Bob Corker, R-Tennessee and member of the Senate Banking Committee, said this is a "major power grab" by the Obama administration.God bless the people of Tennessee, but do they really look at the situation with the US auto industry, and one imagines the firing of Rick Wagoner, and see a totalitarian government interfering with the fine, fine businessmen at GM? How can they vote for this guy?
"This is a marked departure from the past, truly breathtaking, and should send a chill through all Americans who believe in free enterprise. I worry that in one fell swoop we've lost our moral high ground throughout the global community as it relates to chastising other countries that use strong arm tactics to invade on private property rights," he said in a statement.
Lord the hate feels good, now I know how Vader felt.
But back to the sadness. Is there anyone who reads this blog thinking Obama is doing well? Are we still cutting him slack? Anyone ready to cut the line? I'm getting very, very close and having a harder and harder time believing that it would have been all that much worse under McCain. Especially when I read shit like this.
Goddammit, I so wanted to have something to believe in.
the most original thoughts regarding the impact of socialism on society. I would've used it for the benefit of my children had I not already informed them of the LBGT community looking for the perpetual free ride. Information that I acquired as an adult, since I'm not LGBT, had to be disseminated to my children at an early age because I married a closet case that eventually colluded with the gay family court system. My children were able to observe first hand that LGBT children are not "born that way". Kudos on your economics lesson to the economically naive.
Sunday, March 29, 2009
I'm in a horrendous mood: EFCA's fucked, fntsy bsbl is off to a false start, and my worst pangs are wholly unmentionable for the moment. Suffice it to say that the soothing, sleek seal that is the Sea and Cake's Car Alarm isn't even enough to calm my shit down. Whatever, I'll spin it again....
Anyway, all this shit makes Dean Baker's shit-talk-y, sardonic Beat the Press blog even more appropriate than it already always is. No matter how far we've all contorted ourselves in the service of sanctioning and/or "giving a pass" to these or those of the President's this and thats, I think we all do well to keep the raspier raps from Baker, Henwood, Frank and Reed close at hand --- even if it means my recycling new iterations of what're closely-held, nearly 'goes without saying'-y premises.
The media are busy perpetuating a myth that the United States has been a beacon of "free market" capitalism. This is a lie. The United States never had free market capitalism and certainly the system in place over the last three decades hardly qualifies.
The U.S. put in place policies designed to transfer income from the poor and middle class to the wealthy. This is most evident now with the hundreds of billions of dollars being spent bailing out the banks. For the last three decades, the banks and their top executives, made vast fortunes using a free government insurance policy called "too big to fail," under which bond holders and other creditors could lend money to the banks knowing that the government would honor their debts if they ever got into trouble.
It is an outright lie to call this a "free market." This is a huge government handout. This insurance policy is enormously valuable and the banks did not have to pay a penny for it. The banks are ardent opponents of free market capitalism. None of them have advocated that they be allowed to collapse.