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Visualizing the housing bubble bust

By Peter P follow Peter P   2006 Mar 14, 12:32pm 15,941 views   173 comments   watch   nsfw   quote   share    


Let's try to visualize the bursting of the housing bubble. Tell us what are your visions. Tell us how a correction towards normality is good for the economy in the long run.

#housing

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134   LILLL   ignore (0)   2006 Mar 16, 11:16am     ↓ dislike (0)   quote   flag        

-sellind
+selling

135   Randy H   ignore (0)   2006 Mar 16, 11:18am     ↓ dislike (0)   quote   flag        

I think I got sprayed by the last can of troll-b-gone too. Can't seem to post.

136   Peter P   ignore (0)   2006 Mar 16, 11:20am     ↓ dislike (1)   quote   flag        

I think I got sprayed by the last can of troll-b-gone too. Can’t seem to post.

Huh?

137   Different Sean   ignore (0)   2006 Mar 16, 11:21am     ↓ dislike (0)   quote   flag        

Life is not fair. Live with it.

so why are you on this site complaining about house prices then? waste of time... same advice for all the people scapegoating 'boomers' etc for causing it.

138   Peter P   ignore (0)   2006 Mar 16, 11:25am     ↓ dislike (1)   quote   flag        

so why are you on this site complaining about house prices then? waste of time…

Again, I am not complaining.

same advice for all the people scapegoating ‘boomers’ etc for causing it.

Let's find a way to make money off boomers. hehe

139   Different Sean   ignore (0)   2006 Mar 16, 11:28am     ↓ dislike (1)   quote   flag        

Also, do you think that in the US we have a ‘let the market decide’ mentality because up until very recently it was possible to move up the economic ladder with hard work and determination. Might it not be in our national character to champion the rich because, hey, we might all be one some day?

OK. I'll address this one... Americans seemed to be noted from the early days of settlement to show relative disregard and indifference to the plight of others, and today, by most measures, they have about the most regressive welfare system in the OECD, and it tends to have bred a lot of fatalism in outlook. Shame that early ideas of the Revolution foundered so badly.

Mike Moore has a really big spray in 'Dude, Where's My Country?' I think, where he points out that many Americans don't criticise the rich establishment Republicans because they believe that one day they too will 'have a seat at the table' if only they're entrepreneurial enough (as though the Establishment would welcome them). The statistical reality is that the vast majority are going to pretty well stay put in terms of social and economic mobility. However, that belief system allows the rich to get away with more and more egregious cons, and actually get admired for it by the population...

140   Peter P   ignore (0)   2006 Mar 16, 11:31am     ↓ dislike (1)   quote   flag        

The statistical reality is that the vast majority are going to pretty well stay put in terms of social and economic mobility. However, that belief system allows the rich to get away with more and more egregious cons, and actually get admired for it by the population…

This is not untrue but what is the alternative?

141   Different Sean   ignore (0)   2006 Mar 16, 11:47am     ↓ dislike (1)   quote   flag        

so why are you on this site complaining about house prices then? waste of time…
Again, I am not complaining.

right. so you just come here for kicks and to get quiet amusement from people concerned about housing affordability as a part of the social settlement.

which makes you some sort of market apologist or real estate troll, i suppose. and because you are laissez-faire market, your contributions are in no way intended to effect any change in current market conditions, or serve as a lobbying platform to govt.

and it's just you holding these extreme, unsubstantiated, unthoughtful and indefensible beliefs, putting in the occasional short put-down without any credible or reasonable justification.

don't you have anything better to do with your time than sit in a forum in which you apparently have no worthwhile interest?

142   Peter P   ignore (0)   2006 Mar 16, 11:51am     ↓ dislike (0)   quote   flag        

right. so you just come here for kicks and to get quiet amusement from people concerned about housing affordability as a part of the social settlement.

I still want to discuss about the possibility of profiting from the housing bubble bust.

Of course, we also want to talk about OT things because the participants here care about each other. ;)

143   Peter P   ignore (0)   2006 Mar 16, 11:52am     ↓ dislike (0)   quote   flag        

your contributions are in no way intended to effect any change in current market conditions, or serve as a lobbying platform to govt.

We cannot effect any change, but we can react to changes.

144   Different Sean   ignore (0)   2006 Mar 16, 11:54am     ↓ dislike (1)   quote   flag        

This is not untrue but what is the alternative?

the social democrat states of Europe, where there is a reasonable balance between the family, the state and the market, better social guarantees and much lower salary multiples in executive and 'professional' remuneration. less of galbraith's famous 'private affluence and public squalor'. canada. NZ. australia. i've posted all of this before in other threads.

someone who has never seen or experienced an alternative or read or studied widely but professes to know best is...?

145   Different Sean   ignore (0)   2006 Mar 16, 12:02pm     ↓ dislike (0)   quote   flag        

Of course, we also want to talk about OT things because the participants here care about each other.

but you don't really care about anyone, you've made that obvious. you apparently care for a random collection of anonymous posters, but are unable to generalise this concern to the broader community. that's a sign of...?

i suppose you could create an options instrument like 'put options' or a hedge in the share market - offer home owners trying to sell their places a guaranteed price below current market as an expiring option, then sell that option to others... i don't know if it would work too well... this, of course, is profiting from others' suffering - another sign of sociopathy...

there's any number of dodgy spruikers out there claiming to offer such advice on how to profit in a falling market -- for only, say, $5,000 you can go to their 'boot camp', followed by another $5,000 for their 'business mastery' course...and another $5,000 for their 'instant property wealth' course. comes complete with course notes, with huge margins, large type face, double-spaced, with loads of empty pages for 'notes'...

see www.johntreed.com/reedgururatings.html - in fact, john reed himself sells books for $30 on how to profit in real estate, he may have a few pointers on profiting in downward markets...

147   Peter P   ignore (0)   2006 Mar 16, 12:23pm     ↓ dislike (1)   quote   flag        

i don’t know if it would work too well… this, of course, is profiting from others’ suffering - another sign of sociopathy…

Well, either this or someone will profit from our suffering.

148   Different Sean   ignore (0)   2006 Mar 16, 12:27pm     ↓ dislike (1)   quote   flag        

Well, either this or someone will profit from our suffering.

hmm, they already are...

the urban proletariat will have to have a people's revolt, as in the French Revolution - if the peasants can't afford bread, then let them eat brioche... ho, ho, very witty, your majesty...

149   Different Sean   ignore (0)   2006 Mar 16, 1:15pm     ↓ dislike (0)   quote   flag        

Prices may be out of touch with your reality if you’re pulling down 60 grand a year. But, I hate to break this to you, 60 large in 2006 is crap. My first recollection of a salary was my father’s which in 1975 was 40 grand and we weren’t exactly living like kings.

Not sure what the context of the post is, but isn't the average salary in the US still about $50K or something?

Maybe you should have quit that McDonald’s assistant manager job after high school and went for a law or medical degree instead? Just a thought.

Isn't this individualising a systemic problem and blaming the victim? And saying ordinary people don't count? Not that i'm sure what the context of the post is...

150   FormerAptBroker   ignore (0)   2006 Mar 16, 1:25pm     ↓ dislike (1)   quote   flag        

SFWoman Says:

"I asked the contractor and the landscapers how much the workers get, and they each separately told me $16/hr. ($4/hr commission to the contractor per laborer) Considerably more than you would earn at Walmart or McDonalds. Why is it that only Mexicans and El Salvadoreans are doing this work? It is hard work, and they work harder than anybody, but why are they the only people I have ever seen doing this?"

There has been a big change in the past 20 years where white people don't seem to want to do hard work any more. My first job was for $0.60 an hour (a penny a minute) pulling weeds and I've done everything from picking grapes to painting apartments to fixing roofs in the rain. I was just talking to a couple friends (one who's parents still live in Atherton and are members of the Circus Club and another who's parents still live in Presidio Heights and are members of the PU Club). One worked at McDonalds in High School and the other was a grocery store bag boy in Laurel Heights the entire tine he was going to UHS). We were commenting that we don't know a single person (friend of the family or relative) doing similar hard work today. You can find some Irish and Asian illegal aliens doing hard labor around town but most of the people working their ass off doing the hard work in Northern California today are from Latin America.

151   Different Sean   ignore (0)   2006 Mar 16, 1:26pm     ↓ dislike (0)   quote   flag        

Foreclosure World aka The American Dream aka the Perfect Free Market:

http://www.johntreed.com/Foreclosureworld.html

152   FormerAptBroker   ignore (0)   2006 Mar 16, 1:42pm     ↓ dislike (0)   quote   flag        

Different Sean Says:

"Americans seemed to be noted from the early days of settlement to show relative disregard and indifference to the plight of others"

You are way off base here, no country in the world helps others as much as America (or even comes close). I don't know a single person that gives less than a thousand dollars a year to charity and I know many that give tens of thousands along with many hours (I've been way over $12K a year since my first job out of grad school). I might look the other way then I see a guy on the street with a crack pipe or a bottle of Mad Dog 20/20 in his hand but when my Uncle told me about a hard working gardner in his Parish that was having a tough time paying for three kids in Catholic school despite his long hours I got a bunch of friends to chip in and pay their tuition.

"many Americans don’t criticize the rich establishment Republicans because they believe that one day they too will ‘have a seat at the table’ if only they’re entrepreneurial enough (as though the Establishment would welcome them). The statistical reality is that the vast majority are going to pretty well stay put in terms of social and economic mobility."

The "rich establishment Republicans" (and "rich establishment Democrats") welcome new people all the time. As the demographic profile of the Bay Area (and the nation) changes I'm seeing both parties actively reaching out to Hispanics, Asians, Indians and other fast growing groups here in America. There are verey very few WASP only old money hold outs in the US left...

153   surfer-x   ignore (0)   2006 Mar 16, 2:26pm     ↓ dislike (0)   quote   flag        

Ha Ha, you make 160K total compensation, AND have 150 large in the bank. ;)

154   Unalloyed   ignore (0)   2006 Mar 16, 2:27pm     ↓ dislike (1)   quote   flag        

Let’s find a way to make money off boomers. hehe

Seen the Fidelity Investments ad with psychedelic flower power art and Iron Butterfly's In-A-Gadda-Da-Vida playing? Maybe all it takes is to play 60's or 70's music in the background and appeal to memories of being wasted. Wondering what to do with that fat wad? Buy a Peter Framton Immediate Annuity and get guaranteed monthly income for life. [Include nostalgic disco music and leisure suits.]

155   Unalloyed   ignore (0)   2006 Mar 16, 3:16pm     ↓ dislike (0)   quote   flag        

Another great ad: Century 21. The hubbie does not want to buy the house because it stretches them too far. (I assume that's why he's beaded with sweat.) The nagging wife (obviously suffering from unipolar recurrent mania) whines about how good the schools are. Hubbie says but the kids are only like 1 and 3. Wifey, now also beaded in sweat, whines back but they GROW UP FAST! Realtor leaves voice mail that yes, they CAN TOO afford it (must have skipped that ethics course in the NAR ad). Hubbie sees "no doggy style in-n-out glide for 6 months" in wifey's eyes, and crumbles. Perfect illustration of the old adage: Get 'em by the balls and their hearts and minds will follow.

156   Randy H   ignore (0)   2006 Mar 16, 3:22pm     ↓ dislike (0)   quote   flag        

There is also a very, very progressive tax system in France. Over a certain income (and I’m sorry, but I don’t know the amount)

Therefore most high earners in France shelter offshore, as do most high earners anywhere in continental Europa. When I lived in Germany earning DEM, I took a good portion of my income in CHF and CAD as "royalties", which was encouraged common practice for expats earning in in the "high" tax zone. It was unseemly: a double tax shelter avoiding both German and US taxes. That was the 90s, things may have changed now.

157   Randy H   ignore (0)   2006 Mar 16, 3:25pm     ↓ dislike (0)   quote   flag        

I saw a sign on the Marin Civic Center this past weekend. Peter Frampton is coming! You’d better hurry if you want your ticket.
I am bummed that I missed the Whirling Dervishes there. It sounded rather interesting.

I heard Front 242 is opening for Frampton. lol...not.

158   Peter P   ignore (0)   2006 Mar 16, 3:29pm     ↓ dislike (0)   quote   flag        

A progressive tax system will only invite tax shelters. The rich will always find a way because they tend to be more savvy.

Any attempt to create a fair system will be exploited as a way to create more unfair advantages.

159   B.A.C.A.H.   ignore (0)   2006 Mar 16, 3:35pm     ↓ dislike (1)   quote   flag        

There's a short story in a recent Atlantic Montly that gives a scenario for bursting of the housing bubble. Housing bubble, credit bubble, liquidity bubble, all sorta tied together.

In this fantasy, the event that triggered it was kinda peripheral, sorta off most folks' radar screen: politics in Venezuela. Well that exact scenario might be far fetched but the point is that that the "it"could be something most of us overlooked.

Check it out, it's a good read. (Published before Katrina, the author mentions the gov't helping to get homeless folks into living in RV's.).

http://www.theatlantic.com/doc/200507/fallows/2

160   HARM   ignore (0)   2006 Mar 16, 5:50pm     ↓ dislike (1)   quote   flag        

@Surfer-X,

"HARM-X" I love it! Better get it Trademarked, like NAAVLPâ„¢, just to be on the safe side, ya' know...

@Peter P, Randy H, SFWoman, FormerAptBroker, etc.,

I've been extremely busy with work lately, and was starting to feel neglectful with regards to my blog participation here. Then I skimmed through Different Sean's various rants, and felt a whole lot better.
I really wouldn't waste anymore of your valuable time arguing with him. Everyone here has tried to explain his/her position as patiently and respectfully as possible --only to have your words twisted, exaggerated and spit back at you in the ugliest possible tone. And then laced with personal insults to boot.

As has been pointed out before, DS is a shrill demagogue, not interested in a true policy debate, much less friendly conversation. He is only interested in seeing/admiring his own brand of agitprop and bile up on the screen, a-la "Limbaugh from the Left". Despite the fact that bloggers here reflect a broad spectrum of socio-politcal-economic beliefs, in DS-world, we're all culture-war neo-cons and market fundamentalists. And even worse, he can't even manage to be succint --he's got to drone on and on and on...

Does the term "Always on transmit, never on receive" ring a bell with anyone?

161   HARM   ignore (0)   2006 Mar 16, 6:13pm     ↓ dislike (0)   quote   flag        

New thread: "Fake Breasts and the PPT"

162   Different Sean   ignore (0)   2006 Mar 17, 10:44am     ↓ dislike (0)   quote   flag        

In this fantasy, the event that triggered it was kinda peripheral, sorta off most folks’ radar screen: politics in Venezuela. Well that exact scenario might be far fetched but the point is that that the “it”could be something most of us overlooked.

Great to see people can waste hours of time carefully constructing incredibly finely crafted but unlikely fantasies based mostly on US-centric prejudices and self-interest, denying the democratically elected Chavez any kind of credibility, suggesting he will become a dictator, when the US happily propped up right-wing dictators like Pinochet and Noriega, and itself trained thugs, murderers and assassins at the SOA and WHISC inside the US for years for its own narrowly-defined geopolitical self-interest.

It's right in pointing out that the encirclement of Cuba by embargos holds it up and stops it from developing better.

Increasing gas (oil, petroleum, gas, by-products) prices is one real-world variable that could bring it all down. A la the oil price shocks of the early 70s when OPEC upped its prices, causing Recession and consequent inflation and unemployment in the West. The price of everything goes up with oil - cost of freight, cost of heating, power stations, cost of personal and public transport, cost of all the chemical byproducts from oil such as plastics, creams, etc... Just depends how long higher prices last... Makes the US even more determined to drive through its agenda in Iraq and the Caspian Sea (Afghanistan), tho...

163   Different Sean   ignore (0)   2006 Mar 17, 10:58am     ↓ dislike (1)   quote   flag        

that's right, HARM. the US does everything the right way, that's why you're so popular around the world... it's so wonderful that you have no housing affordability crisis at all, and your welfare state is the best, which is why no-one declares bankruptcy from medical bills, and no-one is homeless.

the rest of the world has got it all wrong. i may be ranting, but perhaps for good cause. i think i've clearly articulated my position, i HAVE listened to others, and i think your comments are completely unjustified.

164   Different Sean   ignore (0)   2006 Mar 17, 11:33am     ↓ dislike (1)   quote   flag        

A progressive tax system will only invite tax shelters.

A flat tax system may also invite tax shelters - the very rich may well try to go on to still avoid tax no matter what the rate. It's up to the govt to enforce the system, stop evasion wherever possible, and educate the public into the very good reasons why everyone beneifts from progressive tax, how those who have far more than they need to live comfortably, and who obtained their riches from everyone else paying them, therefore ought to put a little more back into the system that has clearly benefitted them so much.

This presumed 'flat tax' post is one of the more selfish ones that completely contradicts the other poster who said how so many people love giving all their money away to charity. If everyone loves giving to charity, then why object to progressive tax that helps others out more systematically and reliably?

Once again, which way do you guys want it in your self-contradictory belief systems? (Bill Gates is to be commended for his generous donations to charity and research, by the way, which he is not obliged to do. Larry Ellison of Oracle, on $18 bn, however, is not so forthcoming.)

165   Different Sean   ignore (0)   2006 Mar 17, 12:26pm     ↓ dislike (0)   quote   flag        

in France [...] over a certain income the government takes such a high percentage that there isn’t much financial incentive to work super long hours.

hmm, well, if they're already earning over a certain amount, I don't know if they need to work super long hours. the general labour movement argues, for quality of life reasons, that no-one should be forced to work super long hours anyhow, given that we don't actually need to, being clearly able to rack up a huge surplus 'n'all. (except for the survey I read that the working poor have the worst sex lives of anyone, due to their long working hours and life stresses.) the french actually capped the working week to 35 hours by law, as an attempt to spread the work around, but that does not stop middle managers from actually working much longer because their higher ups expect it. the french labour market has a few structural problems, as per the recent announced changes and riots at the sorbonne - apparently people virtually hold jobs for life, which means progression on seniority, some inefficiencies, and lack of access to jobs and training for the next generation. however, the proposed changes are that employees are on probation for the first 2 years of their jobs, and can be sacked summarily within that period with no explanation and no 2nd chances or feedback for improvement. have to look into all that further, though, they have problems with a huge influx of unskilled migrants as well...

now we can do germany, UK, eire, sweden, norway, austria, spain, portugal, denmark, finland, italy, poland, czech republic, switzerland, luxembourg, belgium, canada, australia, NZ......

there are comparative studies and rankings out there on all the aspects of the welfare systems of the affluent OECD countries, I haven't bothered referencing them in any of these posts, it's been a while since i looked at them...

166   Peter P   ignore (0)   2006 Mar 17, 3:44pm     ↓ dislike (0)   quote   flag        

Bill Gates is to be commended for his generous donations to charity and research, by the way, which he is not obliged to do. Larry Ellison of Oracle, on $18 bn, however, is not so forthcoming.

I agree. I am a big fan of Bill Gates. Larry is not my favorite.

167   Different Sean   ignore (0)   2006 Mar 17, 4:47pm     ↓ dislike (0)   quote   flag        

in DS-world, we’re all culture-war neo-cons and market fundamentalists.

not at all. i think that whole post represents an exaggeration. i've only questioned the logic of views of market fundamentalists. and maybe libertarian fundamentalists. why would i question the views of some of the more thoughtful posters here i agree with? i've put forward alternative views of the 'perfection of the market' theorists to try to show up its weaknesses and inherent contradictions and human rights problems. is that a crime? people are wandering all over the socio-economic terrain in their posts, so there are no limits on the discussion topics. and it's not easy to critique 'grand meta-narratives' that the elites and right-wing thinktanks have devised in a short space either. in fact, many of the posters who are ruthless market fundamentalists in print probably (hopefully) don't behave that way in practice. i don't believe that i'm the rush limbaugh of the left, although the left certainly needs several to balance out the Fox stable - i can only think of 'lies, and the lying liars who tell them'. i must say, though, that the attitudes of the limbaughs and coulters and hannitys and neocons and NRA and all the rest are really inconceivable and seen as quite bizarre in most other comparable countries, including some you assume are allies and culturally similar. people are not hearing good things about your country outside of it, in general. it's the sometimes incredibly nutty statements i've read here that trigger my concern and sometimes an escalation of views...

168   Different Sean   ignore (0)   2006 Mar 17, 10:50pm     ↓ dislike (1)   quote   flag        

foreclosures are at a record high in sydney, for the last 2 years, in fact - could be a harbinger... mainly young investors gettnig burnt, who heard something from a spruiker about getting rich quick in property...
rents weren't high enough to cover the interest bill...

http://www.smh.com.au/news/national/huge-rise-in-repossession/2006/02/01/1138590568709.html

169   Different Sean   ignore (0)   2006 Mar 18, 10:43am     ↓ dislike (0)   quote   flag        

In At the Rise Says: March 15th, 2006 at 11:26 am
After another a year of incredible home appreciation since Spring of 2006, home prices seem to be gaining momentum for another rise again. The 50 year loan is introduced making it easier for families to afford the new averge price of 742,000 for a home. Over 200 new bubble blogs have emerged to accomodate the newly created mass of renters that missed the wave again.

IATR may be being droll... The interesting thing is that house prices ultimately have to be underpinned by wages and salaries (or equivalent earnings). The banks will only lend where you can demonstrate you are able to meet repayments based on income, altho they have liberalised lately. Even landlords are limited by the wages and salaries of their tenants in terms of how much to pay for an investment property without committing economic suicide. So there is held to be an automatic cap on housing inflation that will kick in eventually - or else you will see massive upward pressures on wages to compensate instead = inflation. The 'illogical economics' market reality is the 'irrational exuberance' effect of speculators and the panic buying effect of young people who don't want to miss out. The actions of RE agents and others make sure that prices immediately fill any vacuum, due to the nature of the selling process. In some other postulated society, profiteering from real estate might be seen as immoral, as charging interest on a loan is proscribed in the Qu'ran, for instance...

170   HARM   ignore (0)   2006 Mar 19, 7:49pm     ↓ dislike (1)   quote   flag        

i may be ranting, but perhaps for good cause. i think i’ve clearly articulated my position, i HAVE listened to others, and i think your comments are completely unjustified.

Different Sean,

You are obviously passionate about your beliefs, and while I don't share all of them, I don't fault you for believing what you believe. Where I think you started to cross the line was in making personal attacks on other bloggers, based on blind assumptions. Peter P is clearly Libertarian-leaning in his economic views, as am I (though not as strongly).

Many here are fiscally conservative (this is a bearish blog, after all). Almost none of us, however, are pure market fundamentalists and/or anti-government extremists. You may want to re-read the points made in the "Libertarian" thread. Don't be so quick to assume that everyone here speaks with one mind/voice regarding every issue. We represent a fairly wide ranging political/social spectrum. Anyone posting here will read many things to disagree with, as well as many things to agree with.

Many of us are also socially liberal (myself included) and believe that government, while not the answer for everything, should provide certain services essential to the well being of its people. I believe that some forms of market regulation can --if well designed-- can help promote economic and social stability, and to smooth out some of the inequalities that inevitably result from pure, unregulated capitalism.

When it comes to adding more government regulation, however, the devil is in the details. There is always a very real problem of creating new moral hazards (unintended consequences) by incentivizing/subsidizing certain activities above others. The housing bubble, I believe, is itself largely a consequence of moral hazards caused by Fed interest rate manipulation, GSE risk underwriting, and a powerful pro-housing bias in American tax laws. When the public decides that the government should regulate something, I think it should take care to be sure that the "cure" is not worse than the disease.

The fact that I or Peter P believe the above does not automatically make either one of us a sociopath, though you may feel otherwise. I have shared this blog with Peter P practically since its inception. We have shared our opinions on a wide range of subjects, and I can tell you he is not an evil person. He may be bit shy when it comes to discussing issues of morality or religion, but so what? Many people are shy when it comes to those topics. Maybe he's just more comfortable discussing economics and housing, I really don't know. Regardless, this doesn't give you the right to make assumptions about people you barely know.

Now, if you'd like to continue to post your opinions here and debate other bloggers, you're welcome to do so. However, I will ask that you keep your comments civil and not engage in needless personal attacks. If you find certain views expressed here "nutty", then by all means rebut them. Just attack the argument, not the person.

171   Different Sean   ignore (0)   2006 Mar 20, 9:00pm     ↓ dislike (1)   quote   flag        

The housing bubble, I believe, is itself largely a consequence of moral hazards caused by Fed interest rate manipulation, GSE risk underwriting, and a powerful pro-housing bias in American tax laws.

I'd agree with that, although the bubble is occurring in a dozen countries at once - altho US interest rates tend to affect the rest of the world, and lenders are global institutions nowadays. The Oz govt encouraged investment borrowing by reducing capital gains tax on investments and allowing deduction son investment losses, leading to a spruiker/guru's paradise, the rise of massive greed and selfishness in those who already had some equity, etc. as documented elsewhere here...

I've also noted elsewhere that central banks only have one lever left these days, being interest rates - not exactly a multi-faceted instrument to finely tune an economy.

I stand by my comments in defence of human life and a more civil society being contructed through positive welfare measures. I've noted that the incarceration rate in the US is some 6-10 times the rate of comparable countries, and higher than Russia. Please read bap's inflammatory comments starting the ball rolling if you want to know why I get progressively more upset with certain attitudes. I have no sympathy for people worried about not being able to buy a $2m house who in turn do nothing and feel nothing for people less fortunate than they are.

172   asik   ignore (0)   2006 Mar 21, 2:37am     ↓ dislike (1)   quote   flag        

All governments are armed robbers. The only role of the government is to leave us alone, disappear, run away, or die.

173   HARM   ignore (0)   2006 Mar 21, 3:23am     ↓ dislike (1)   quote   flag        

I have no sympathy for people worried about not being able to buy a $2m house who in turn do nothing and feel nothing for people less fortunate than they are.

Nor do I. The only caveat I would add is, public assistance for the able-bodied/able-minded should be limited to the "hand-up" type and geared towards weaning people off public assitance when they are abke to sustain themselves. I have seen far too many cases of generational welfare. While this doesn't represent a majority of those receiving aid, it has a corrosive effect on society and clearly undermines the incentive to work and to become self-sufficient.

Ditto for corporate welfare --if a company cannot stay in business without perpetual government aid, then it should be allowed to fail and be replaced by a company with a more efficient business model. Taxpayers are actively subsidizing losers, which hurts our competitiveness and economic health in the long run.

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