patrick.net

HydroCabron says

yodaking says

Governmental interaction (public sector) and either (dovish or hawkish) as Keynesian

Keynes explicitly warned against stimulus during expansionary times - those periods of GDP growth which I referred to above.

Can you read?

The question is *can you* read?

Keynes advocated what has been called countercyclical fiscal policies, that is, policies that acted against the tide of the business cycle: *deficit spending* when a nation's economy suffers from recession or when *recovery is long-delayed and unemployment is persistently high*

Source: https://en.wikipedia.org/wiki/Keynesian_economics#Active_fiscal_policy

Your comment only makes sense if you are argueing that our unemployment is in good shape.

Your assertion that Keynes advocated spending to mirror GDP growth is largely simplistic.

yodaking says

Great question, the only way to tackle unemployment is to support pro-business policies - that means reforming our tax code, lowering regulation, (yes, even environmental), and embrace not isolate oneself from the global economy.

I disagree 100%. Lower taxes lead to higher profits, but not one job more. Companies don't hire because they make more money--they hire to meet demand. Lowering regulation is a race to the bottom--you have to agree that's not the correct policy decision. What does "embracing" the global economy mean exactly?

yodaking says

Please refrain from ad-hominem attacks on how I hate the environment and hate workers etc.

Of course. I don't know how you feel about the environment other than you seem to advocate policy decisions that would harm it.

yodaking says

As far as the wealth gap - only education can equalize that - our current school system is not properly equipping our population for the new economy....and I am no way insinuating that lack of money/funding is the *only* cause for this as is often repeated.

I believe more people are getting a college education than ever before. While the education gap (rich to poor) reflects the general wealth gap--it's a symptom not the root cause.

yodaking says

Your comment only makes sense if you are argueing that our unemployment is in good shape.

Here is what I said: " Loose fiscal policy during GDP growth is also not a tenet of Keynesianism."

I am not discussing our current economic situation, because it is not a period of job growth. I wasn't even thinking of the present.

I was only saying that fiscal stimulus during a time of GDP growth is not a Keynesian tenet.

The end.

yodaking says

Greenspan keeping interest rates too long after 9/11

GSAs making good ol' uncle same the last guy holding the bag for companies such as Freddie Mae/Fannie Mac/etc

Government programs mandating banks lend to 'disadvantaged' groups

Tax Subsidies for Mortgages

I don't think any of those are Keynesian. The early and mid 2000s were a good time economicially--Keynes would have advocated reduced spending, not increased.

Does Keynes say anything about advocating home ownership?

Regardless---if you truly think government programs mandating banks lend to disadvantaged areas had ANYTHING to do with the housing bubble then you are much less learned than I thought.

yodaking says

the only way to tackle unemployment is to support pro-business policies - that means reforming our tax code, lowering regulation, (yes, even environmental),

There have been periods of tremendous economic expansion in places with heavy environmental regulations. Job and wealth creation is never a reason to sacrifice public health.

tatupu70 says

Regardless---if you truly think government programs mandating banks lend to disadvantaged areas had ANYTHING to do with the housing bubble then you are much less learned than I thought.

This forum is admittedly tiring me out.

Source:
http://www.nber.org/digest/may13/w18609.html

Btw NBER is non-partisan and is used by both sides of the political aisle to determine when recessions start/end.

yodaking says

This forum is admittedly tiring me out.

You and me both. That link is weak at best--as it's a summary with no link to the actual paper. It uses a period from 1999 to 2009 and purports to show that loans in CRA areas are 15% more likely to default in 1 year. Even if that's true, which I don't believe to be the case, it has no bearing on the housing bubble. I would hope that you would agree that the housing bubble and bust were not primarily for houses in areas subject to the CRA. And I would hope that you would also agree that the biggest drivers of the mortgage fraud were S&Ls that are not even subject to CRA regulations.

tatupu70 says

You and me both. That link is weak at best--as it's a summary with no link to the actual paper. It uses a period from 1999 to 2009 and purports to show that loans in CRA areas are 15% more likely to default in 1 year. Even if that's true, which I don't believe to be the case, it has no bearing on the housing bubble. I would hope that you would agree that the housing bubble and bust were not primarily for houses in areas subject to the CRA. And I would hope that you would also agree that the biggest drivers of the mortgage fraud were S&Ls that are not even subject to CRA regulations.

I actually think the Great Recession was a combination of factors - that's what makes anybody claiming they "know" what caused it right and wrong at the same time.

1) Low Interest Rates
2) Greed by Wall Street
3) Lower requirements for getting a loan
4) Mortgage Fraud
5) Exotic Loans
6) CDS
7) MBS
8) GSE
9) Credit Rating Agencies
10) Repeal of Glass Stealgal
11) 2000 Omnibus Bill
12) CRA
13) Home Equity Loans
14) Bankruptcy of Lehman (no structured buyout like Bear Stearns)
15) Predatory Lending
16) Little to no down payments
17) Consumer borrowing - home equity loans/home equity extraction

I think it was truly a 'perfect' storm of events - with truly no 'one' or even 'main' reason - a real confluence of multiple factors. That's what made it so extraordinary. Wall Street has been doing shenanigans since the 1920's - and it will continue to do so...

HydroCabron says

There have been periods of tremendous economic expansion in places with heavy environmental regulations. Job and wealth creation is never a reason to sacrifice public health.

Agreed, take my comment with a heavy grain of salt - no need to sacrifice pubic health - but some regulations are very draconian and ultimately nonsensical.

yodaking says

think it was truly a 'perfect' storm of events - with truly no 'one' or even 'main' reason -

The recent recession was caused by 17) Consumer borrowing - home equity loans/home equity extraction

specifically, the failure of this credit expansion:

blue is monthly job gain, red is quarterly mortgage take-on

Now, this credit expansion was driven by:

1) Low Interest Rates
2) Greed by Wall Street
3) Lower requirements for getting a loan
4) Mortgage Fraud
5) Exotic Loans
6) CDS
7) MBS
9) Credit Rating Agencies
10) Repeal of Glass Steagal
13) Home Equity Loans
15) Predatory Lending
16) Little to no down payments

essentially, laissez-faire deregulation of our housing finance sector. The results were predictable, fraud as far as the eye could see.

8) GSE
12) CRA

had little to do with this fraud. Banks were making billions lending trillions to middle-class america, these two government programs are right-wing bugbears but blaming them is more an attempt at obfuscating who really screwed things up -- the conservatives who deregulated our financial system in the 1990s and then were in charge of its oversight 2001-2006.

The Dems in the minority 2001-2006 failed to do their constitutional duty to oppose these great crimes, granted.

Additionally, per the above graph it's important to understand this credit expansion did not just end up in higher home prices and granite countertops, these trillions ping-ponged through the entire economy as middle class America was able to tap on average $1000/mo of free money while the housing bubble party lasted (2004-2006).