patrick.net

>>1) Woodrow Wilson — started the income tax, sitting president during the inception of the Fed, dragged us into WW1 — essentially pushed the first domino to turn America into the Global Empire it is today

If you feeel you want to dislike him more, read "The Great Influenza."

Has anyone noticed that there has been a HUGE increase in the number of commercials for retirement plans and investment planning? They are all painfully targeted to boomers. One had this guy walking through the woods with his kids. He has an inner thought: “Soon the kids will be gone and will I have enough to retire?”

SHTF,

Could you have been referring to this perhaps? When I first saw this ad, I threw up a little in my mouth (and nearly put my foot through the TV).

Conor,
I don't think FDR should be on the list because many of the programs he started at the time were greatly helpful to the country, particularly parts of the country that suffered the most during the depression.
My grandfather was part of TVA, a government program started by FDR that essentially brought the south into a modern era with cheap hydroelectric power, jobs to men that would've probably starved to death, and education to farmers to get more production from their land so they could survive with more crops from less land.
I agree that many of these programs are very outdated, but they were at the time of their inception revlolutionary and most responsible for pulling the US together when it could've gotten very, very ugly. A dead man can't be responsible for the actions of today.

Thanks for the input DinOr:

Are you saying start your own business? I'm not really sure what sort of business you were getting at.

My friend Chris, MBA Columbia, chucked the corporate sh-t and started his own business. It's been a tough a-- go of it but he's squeeking by.

HARM-

I just threw up in my mouth a little when I clicked your link. [[shudder]]

>>A dead man can’t be responsible for the actions of today.

Well, why not?

Every time you start a government program, you're creating a beast for the future. Institutions don't want to shut down when their task is done. Indeed, they don't even want their task to be done--they have a vested interest against a degree of success that would put them out of business.

They twist like snakes and will go for any niche they can to stay alive.

Look at how little of our budget is discretionary now. It's almost impossible for current politicians to do anything substantial because the dead presidents still rule the budget.

Michael,
I'm in total agreement with you that old programs only have so much time to be useful before they become obsolete. Ca's prop 13 is the perfect example of an old piece of legislation that's biting us all in the ass.
But at the time of their inceptions, most programs and laws were passed to adress a dire problem. Prior to 1978, property taxes were going up so much that many elderly CA residents were getting priced out of their homes. Prop 13 was supposed to be a temporary fix until enough housing supply was built, or a diffrent tax system was devised. That never happened, so now we have to pay for it.
The programs started in the depression were formed for obvious reasons and have no business still being around, yet many are. I doubt many of the politicians that thought them up imagined they would be around 20,30, even 70 years later.

Michael Holiday,

I'm saying exactly that. I (like Surfer X) openly admit that I have scrubbed crappers, emptied trash cans and washed the boss man's car! And where did it get me? I was in my late 30's before I realized something was terribly wrong. You're busy raising a family, commuting, paying taxes and trying to make a buck you didn't notice that others are being advanced but "you're too valuable where you're at" for us to consider "moving" you"! Notice the use of the word "moving". Why you're the BEST cold caller (or crapper scrubber) we got! Besides you make plenty of money! Well yeah, but...... I've had my share of "Snakes in Suits" (not finished but good read) thank you!

This is going to sound pretty weird but it doesn't really matter what you do out of the gate. Work on a small scale and see if your compatible w/ the self employed environment. Work up from there. You don't have to be the next Bill Gates, just get your foot in the door and take it from there. You can hack it.

Conor,
The US was a very diffrent place circa 1929. Over 75% of the country was rural. That's totally opposite of today. Many farmers were either completely reliant on agriculture, or even using crops as substinence. Where I came from, most farmers had no running water, electricity, or roads that would allow automobiles. When the depression hit, it wasn't simply a matter of accepting lower wages and expecting people to make due because many of these people didn't have ANY money to start with. Trust me- I listened to my grandad talk about this very thing.
Programs like the CCC in our area paid the workers in food and shelter. Without these programs, they would've either starved, or come very close to it.
The US is now 100% opposite of 1929. Come a depression, people could probably make due better than back then when the majority of the population exsisted on low income salaries.

When the fed was created, the public was told that its primary purpose would be to make sure that the American dollar stays strong. Throughout its history (especially since we went off the gold standard), the dollar has lost its value continuously.

If an organization is created for a primary purpose in which it fails miserably, should'nt it be shut down?

Sriram Goplan,

You are promoting some dangerous ideas --I order you to cease & desist at once. If you do not, the black helicopters will be coming for you forthwith.

Thanks for the input DinOR.

I was considering this strategy: Law enforcement and real estate on the side. Get in legit with real estate, work the neighborhood I patrol and sell a few houses a year just to build up legit experience.

Ten years into being a cop, if I hate it I can bail with half a pension and make the switch to full time legit real estate (my own business).

I'm sick of corporate shit and wouldn't mind going back to the South Bay, even though I'd have to rent for years.

I see that this thread has become a blame game.

Michael Holiday,

I echo much of DinOR's perspective on getting another Masters at your stage. Getting an MBA mid-career can be a form of insurance, though it still won't really get you invited across the glass ceiling. It will ensure that you can have a good chance at making the pile of resumes that get looked at. The network is the main thing. You can call on folks you went to school with or other alumni your entire life, which helps alot of you ever do start your own business/practice, etc.

A second Masters, especially a "generalist" sort of one, isn't really that useful for the $. People don't hire on academic accomplishments at your stage, but on experience. That's why you'll find guys with 3 or 4 advanced degrees working for guys with just an MA who's managed his/her career very carefully.

You could consider a PhD in a field you love. That would give you the ability to teach as an adjunct professor somewhere, which can also be part of a plan to launch your own consulting practice. Again, you might be able to find such a professorship with just your MBA, so the PhD is really a vanity/labor of love thing.

I see that this thread has become a blame game.

Blame laid precisely where blame is due, perhaps, but unwarranted?
Hardly.

All I can say about the Great Depression discussion and FDR is that it is highly revisionary. Perhaps its part of the natural generational cycle with war and economics that future generations are doomed to eventually repeat the past having forget its lessons.

The GD was not a set of economic and financial variables occurring in a petri dish. One needs to spend some time carefully studying US and European history from at the least the early 1900s forward to the 30s to understand what realistically could and couldn't be done.

Just a couple of things: FDR was not the cause of Deutschland's Inflationszeit, but had to deal with its consequences. FDR didn't command the overcapitalizations and misallocations during the peak industrialization era, but had to deal with the consequences. FDR didn't write Upton Sinclair's novels, but had to deal with the resultant societal changes.

The stakes were pretty high during this period in history. Keep in mind that the two major victors of the entire era, following the war, were one which won a war of economic and military attrition and another that won a war of slash-and-burn "heroic" self sacrifice. Both were terrible policies, ill-formed strategies, and downright irresponsible. Both were preferable to the alternative.

Blame laid precisely where blame is due, perhaps, but unwarranted?

True, but why blame when there is nothing you can do?

Who here has done scenario analysis on alternative outcomes which the Fed could have engineered? What would have happened without post 911 liquidity? I'd love to hear the armchair Fed governers here teach a lesson in global macroeconomics.

You know, it is quite possible that the housing bubble is an unintended consequence, albeit a pretty bad one, but still preferable to the alternatives.

And just for the record, the Fed's mission has never been to "keep the dollar strong". Google "Strong Dollar Policy" to see how well the US' experimentation with currency manipulation panned out.

RE: blame game

For the record, I am no fan of Woodrow Wilson's policies or LBJ's bloated "Great Society" welfare programs, but I admire FDR for making a pretty decent play, given a very bad hand (I agree with Randy H here). There were times during the Depression when the country could have turned in a very bad direction (communism or fascism) and FDR helped to steer us away from that.

SS may not be an ideal program, but it's chief problem is in how it's been mis-managed and perenially looted/underfunded by Congress. If not for it, we would have many more homeless elderly people on the streets than we already do. Not a bad thing. That said, I am not against instituting private retirement accounts. Personally, I think all 401k contributions should be mandatory for the corporate employed, and IRAs should be manadatory for the self-employed. If you're not saving for retirement now, then you will almost certainly be a drag on others' incomes later on.

Who here has done scenario analysis on alternative outcomes which the Fed could have engineered? What would have happened without post 911 liquidity? I’d love to hear the armchair Fed governers here teach a lesson in global macroeconomics.

One common perception is that recessions are bad and that they must be averted. As a result, many think AG is a hero.

In reality, a recession is bad only if it affects you. During the 2000 SV recession, many of us actually enjoyed improved traffic flow, abundance of restaurant tables, and low rent.

IMO, recession is a necessary garbage collection process.

HARM,

Where did you find the "puke in your own mouth link"? Funny stuff especially the comments! Over at "Ben's Blog" (which sounds suspiciously like a tavern your wife rather you not frequent) there was a link to the "San Diego Creative Investor" website that was freakin' hysterical. One of the gals ventured over to offer her opinion on:

"I bought ANOTHER flipper home in Phoenix (at the height of the market) and have had difficulty getting it sold. Now I'm just looking to break even but with the realtors cost and the monthly payments it looks like I'm screwed wether I sell it OR rent it out".

Needless to say she was less than generous with this FB!

Who here has done scenario analysis on alternative outcomes which the Fed could have engineered? What would have happened without post 911 liquidity? I’d love to hear the armchair Fed governers here teach a lesson in global macroeconomics.

Can't say that I have, though I would put little credence in the results from anyone's "scenario analysis". Isn't economics the art of predicting the past? No macroeconomic model --no matter how sophisticated-- is capable of predicting future outcomes with perfect reliability. And most are built with the inherent bias of the person(s) constructing the model.

One thing we can do, however, is study the consequences of past mistakes (unintended ot not) and adjust our current policies appropriately.

You know, it is quite possible that the housing bubble is an unintended consequence, albeit a pretty bad one, but still preferable to the alternatives.

Such as what? A somewhat deeeper recession followed by sustainable growth and no housing bubble? Sounds pretty good to me.

In reality, a recession is bad only if it affects you. During the 2000 SV recession, many of us actually enjoyed improved traffic flow, abundance of restaurant tables, and low rent.

Don't forget decent returns on cash. Randy, we're JBRs. If we owned houses from '00-'06, we'd be singing the praises of Greenspan as he blew up the prices of the assets we owned and inflated and cheapened our liabilities.

Instead, our wages have shrunk substantially wrt house prices, our cash assets have been pilfered while every house-betting man in the BA has been handed a check for $300K.

My push for a slow moving Fed is to make the Fed's motions become predictable for the average Joe so he can plan accordingly and avoid getting stolen from. If recessions result from a lethargic Fed, so be it.

HARM,

Myself and others have been most vocal regarding "dis-enrollment" for 401K participants! Meaning you're new on board, we automatically enroll you into the plan and if you really, really want out you have to jump through hoops. Maybe even have their spouse sign acknowledging that they are "O.K" with living in a single wide at retirement? I think busting this bubble will provide the first step and sufficient motivation.

Such as what? A somewhat deeeper recession followed by sustainable growth and no housing bubble? Sounds pretty good to me.

Unfortunately it doesn't work that way. Global economics contains myriad feedback loops and threshold "tipping points". Given the imbalances that existed before the shock occurred, a global deflationary cycle was a very real possibility. The reversal of Japan's recovery caused by a drop in US consumption alone could have started the ball rolling, not to mention the fragile nature of Europe's anemic recovery at that point.

Keep in mind that most of the folks writing books and essays about killing the Fed are hedge fund managers, former or current. A requirement of being a hedge fund manager is truly believing you are smarter than the Fed Governor, and everyone else on the planet for that matter. There's plenty of room for criticizing the Fed, as in DinOR's accusations of politicization. But all this "those bastards are useless" is, in my opinion, useless rhetoric.

Randy H,

I'm going to have to differ with you slightly on this one. Had the HB been "unintended" they would have pulled the punch bowl much more quickly. I don't consider having your choice of 89 different varieties of hardwood flooring of any real benefit.

A requirement of being a hedge fund manager is truly believing you are smarter than the Fed Governor, and everyone else on the planet for that matter.

You only need to think that you are luckier than most.

FRIFY,

I think you attributed a quote not mine to me. That was Peter P I think.

I'm a renter too with the task of protecting substantial equity savings from inflation. I still do not see the Fed as my "enemy". I see global imbalances, massive deficit spending, irresponsible tax policy, and time as my enemies.

Randy H,

If all those hedge fund managers are SO smart why do they keep calling me for ideas? Me?

RH,

I was agreeing with Peter P who responded to your quote. I'm just joining the pile on top of Randy crowd. ;-)

I certainly agree that our Tax policies are a bigger threat to my long term economic health than the Fed meddling.

"predictable for the average Joe so he can plan accordingly and avoid getting stolen from."

Hopefully this would not include Uncle Al suggesting ARMs for mass-consumption in a rising-rate environment AND when rates are already at historical lows.

Red Whine,

Yo! Even the financial media struggled with the logic of that one! Those comments should have served as a warning to GTFO! Yo!

Just for a laugh check out www.sdcia.com. Man, talk about "equity locusts"! Got to the message boards and check out "Losing Shirt in Tucson". Freaking hysterical!

Harm wrote at the top, regarding FED priorities -

–Implement monetary policy by open market operations, setting the discount rate, and setting the reserve ratio
Yes, they’ve done a “mah-velous” job of flooding capital markets with unlimited liquidity, blowing asset bubbles and destroying the value of the USD –kudos to them!

Actually HARM, don't you think out of control federal, personal and corporate debt might be more responsible for the freefall of the US Dollar than anything else.

Don't forget, the Fed incluences world economics, but the exchange rate of the dollar is a complicated thing, influenced by the world.

If you are talking about the intrinsic worth of a US Dollar, what it will buy, as opposed to its exchange rate, I still don't think the Fed can take much of the blame.

If not for the carousel of financial instruments for cash for crap from China, bombs and bail outs, would not the whole position of the US economy be completely reversed? And the Treasury Dept sets the rates that matter in this arena. And they were influenced by rates in Japan as much as by the Fed, I'm sure.

You can't blame the ceaseless trade deficit entirely on the fed. And the deficit, and debt financing of America by Asia, are factors not under the sway of the Fed. Just my opinion.

I didn't know sdcia.com existed until I visited this board. Can these people possibly be for real? Someone here coined a phrase "irrational lust for depreciating assets" or similar -- perfect.

tsusiat,

Yeah I can kind of go along with that but; when in the last 5 years + was the "cost of money" a deal killer? I mean seriously, as individuals or corporations? If you can think of examples where an aquisition or expansion plans were shelved b/c the board decided not to move forward b/c int. rates would mean the investment would have to make sense I'm open. Be it an SUV or a whatever?

What I should have said is that a lot of things may have "died on the vine" for various reasons but it wasn't b/c of the cost of money. Especially so soon after pets.com! Fast, loose and easy money for everyone with a ONE page business plan!

Randy H:

Good input. Thanks!

DinOR,

If all those hedge fund managers are SO smart why do they keep calling me for ideas? Me?

I surely didn't mean to imply that they really are as smart as they think they are. Since installing site monitoring on my cap2.0 blog I have discovered 6 or 7 hedge funds that are regularly downloading my "research".

After I finished laughing I got the bright idea to create a contra-hedge-hedge-fund. Seed these "geniuses" with my own research then take bets against what I've told them to be true.

Since installing site monitoring on my cap2.0 blog I have discovered 6 or 7 hedge funds that are regularly downloading my “research”.

Randy, rename the site to "Center for Capitalism Research" and you will get even more hits. :)