patrick.net

Thanks for posting the Magnetar Trade article. I've not seen that.

..."From what we've learned, there was nothing illegal in what Magnetar did; it was playing by the rules in place at the time."

Hand picking and packaging the worst cancer and than shorting it is like a boxer taking the fall for a payout. With all these big players involved, I hope this story gets continued exposure.

OT: "since they are stupid" caught my eye, GaryA. Friendly tip...shooting off that kind of shallow generalization at a party will get you neither laid (by someone who matters) nor respected (by someone who matters).

Common Sense says

How can anybody blame one faction of this mess more than the other? Every one of us, less renters like my girlfriend, partied hard and were more than willing to [recklessly] accept the [irresponsible] terms. I think we should put the scale away.

At least you're honest.
I think we need to put the Justice Scales away also, and pull out the hand cuffs.

I think all of those liar loans should be gone over with a fine tooth comb.
Just because they were accepted with out proof, doesn't mean they didn't sign and agree to that they could be prosecuted for miss representing their finances, and ability to pay.
Fraud is still illegal in this country after all.

But the problem has been there hasn't been much serious inquiry beyond Blog Jockeys and Forum hounds rehashing common knowledge that not one damn law maker has acknowledged.

Even as Big of a Grade A first class ASS and a Tool that I think Michael Moore is. He presented the facts of what went on during the fall of '07 through the summer of '08 immaculately, in a full feature film. Of course none of what he said was news to the average Patnet reader.
I remember I called him an Ass bag for coming out a year later, after Bloggers and Forums had rabble about it for a whole year.

But I must say, the Man put together as a Film Maker, a Case of Fraud on a Federal Level, to the out right Fraud on Wall Street. This was a stronger case than anything Robert Kennedy could have done, in a lifetime if he wasn't killed.

And not one bit of out rage from people to demand that some law maker look into the allegations. If nothing else he should have been sued for slander, he made some strong legal and liable allegations against most of the Democrat Congress and Senate.

I didn't care for him making the Loan takers out as Victims. They were no less greedy.

But rest assure you're in clear Common Sense. I don't think anyone is minding the store.

It's like the Villain in "Last Action Hero" where he tele-ported into Reality and shot a person. To no panic response from anyone. "Hello! I just SHOT somebody! I said I murdered a MAN!" "Shut up!"

Tenouncetrout says

Even as Big of a Grade A first class ASS and a Tool that I think Michael Moore is. He presented the facts of what went on during the fall of ‘07 through the summer of ‘08 immaculately, in a full feature film. Of course none of what he said was news to the average Patnet reader.
I remember I called him an Ass bag for coming out a year later, after Bloggers and Forums had rabble about it for a whole year.

CNBC had Michael Moore on one morning. So they asked him. If you dont trust Wall Street, where do you invest your money, do you save in stocks or bonds? His response was "I dont understand Finance, I put all my money into my house".

Ok, so Moore pours in all his money he has made into his over inflated home with some hope someone will overpay for is diggs in a middle class neighborhood of Flint Michigan. Brillint !!!!

Did he say he was selling it?

I'm buying a house that is making sense as it is.
I plan on doing 50-100K worth of work to.
Of course I wont be paying that much, most will be sweat equity.
But if I thought for a minute, I'll ever recoup the money in my life time I wouldn't do it.
I hope to buy an even nicer house, when the Train comes to a full stop. In a neighborhood that is a two times upgrade than what I am buying now. For as much if not little less than I paid for this one. I'll keep the second house, for my kids or rent it out.

It wont be for sale, it's in the family now.

But I'm sure what Michael meant besides actual physical work in his house. Perhaps he meant he hoards his cash at his house.

So why were unqualified buyers able to get a loan for a house anyway?

In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.[111] In 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.[112] From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year, which included $350 billion of Alt-A securities. Fannie Mae had stopped buying Alt-A products in the early 1990s because of the high risk of default. By 2008, the Fannie Mae and Freddie Mac owned, either directly or through mortgage pools they sponsored, $5.1 trillion in residential mortgages, about half the total U.S. mortgage market.[113] The GSE have always been highly leveraged, their net worth as of 30 June 2008 being a mere US$114 billion.[114] When concerns arose in September 2008 regarding the ability of the GSE to make good on their guarantees, the Federal government was forced to place the companies into a conservatorship, effectively nationalizing them at the taxpayers' expense.[115][116]

I'm put off by the poster's urge to call the Tea Party stupid, as if the Tea Party was a group with a single united view. They aren't.

All players in the subprime meltdown were at fault for a variety of reasons - people who knew they couldn't afford a big house gambled they could outsmart the ARMs when they came. The government shifted regulations favoring subprime lending to make unqualified buyers suddenly qualified with a sense of entitlement, and the banks tried to cover the mess by repackaging it and trading it around. It ALL combined to create the problem.

The part that makes me mad is the fact that the government put the taxpayers on the hook for the liability. Without that factor, people who couldn't afford houses they bought would simply lose their house and have to rent. Banks with bad loans would have to eat the loss, but the rest of us wouldn't be footing the bill for this crap.

It's not magic or mystical - if you cannot afford it, do not buy it. If you cannot take the risk of lending money to someone unqualified in the credit arena, don't make the loan. And the government can piss off on asking everyone to pay for this stupidity. We're already paying our own mortgages, or rent, or whatever.

I suppose I don't see the Tea Party the same way as GaryA and perhaps some others on this board, because I do not see it as a particularly unified front. Though it may its roots in the Santelli rant against taxation, that rant did not provide any type of agenda for people, it simply drove home to people that all the problems, no matter who caused them, are being fixed with their tax dollars. This is not, then, about who is to blame for these problems, it is about cutting spending. Each member of the Tea Party seems to have their own idea as to where those spending cuts (with many opposed to cutting things they themselves benefit from; there is hypocrisy in pretty much every political party when it comes to their own backs getting scratched) should come from, but the general consensus seems to be anti-TARP and anti-Healthcare bill. I wouldn't call a group hatched from the ashes of animosity toward the bailouts (which mostly went to the banks) as being particularly pro-bank, honestly. From speaking with some Tea Party people, the vast majority think the banks should have been allowed to fail for handing out bad loans, which seems to indicate that they blame the banks for their own negligence. Tea Partiers are also, as a group, in favor of auditing the Fed and generally distrust the central bank. Just because two people, who you identify as founders of the Tea Party movement, and perhaps they are, don't rail against banks as much as you would like does not indicate that the average person who identifies with the Tea Party is pro-banker. In fact, the mainstream wing of the Republican party is far more pro-banker than the Tea Party, just as the mainstream of the Democrat party is far more pro-banker than the Progressives. I have not met many average Americans, from the Moveon.org and Huffington Poster to the Freerepublic and Liberty Poster, who actually are pro-bank in the slightest. Everyone blames the banks for making stupid loans, the question is how much blame should be assigned to the Realtors, the Appraisers, and the home buyers themselves. Sit back and think about the experts on each side, the Keynesian (usually espoused by the left) side versus the Austrian (usually espoused by the right) side and ask yourselves which is more pro-bank and pro-Fed. Have you ever seen a more pro-Fed, pro fiat-currency fellow than Paul Krugman, generally adored by the left (and who quoted Keynes on gold that gold is a "barbarous relic," and who adamantly opposed the movement to abolish the Fed, the best friend of banks and the source of their profits since TARP)? Isn't the entire Austrian push against allowing banks to loan at ridiculous reserve ratios as strong an anti-bankster position as one can have? Isn't allowing the banks to fail for their own stupidity (as Mitch McConnell recommended in April, drawing the ire of Krugman) anti-bankster? Even the Huffington Post grants that the Tea Party is anti-bankster at heart (http://www.huffingtonpost.com/robert-kuttner/question-for-the-tea-part_b_642379.html), it just questions their ability to see through the distortions of the Republicans.

Hand picking and packaging the worst cancer and than shorting it is like a boxer taking the fall for a payout.
In this analogy, it's the promoters -- who sold tickets to the fight and did not materially disclose to those in ringside seats (CDO buyers) that there may not be a fair fight -- that are the guilty party. Not easy to prove in a court of law. Magnetar could simply take their marbles elsewhere if the CDO manager didn't provide risky enough assets to get the return they needed on the equity tranche.

thomas.wong1986 says

GaryA says

If you don’t blame the banksters, they get away with it. I don’t mean that you should be racists, or anti this or that, but in general the bankers who control the central banks are at fault and should be called out.

So how do you blame the “banksters” on prices doubling from 1998-2000 ?

Easy money.

jljoshlee3 says

no one in banking understood the macro economic forces causing asset inflation, let alone lay people who just wanted to buy a house. The only thing to blame is peoples greed and herd mentality. its easy to look back now and say you bought a house for half a million dollars? you were crazy, but no that was the market price, and if you didn’t cough it up you were renting, period.

Sorry Patrick, I flagged this comment by mistake. It is early on Saturday and I hit flag instead of quote. Sorry.

As to the post, of course bankers at the highest levels knew exactly what would happen if you offered easy money as opposed to tight money. The ponzi systems are created. How can you say that the banksters at the top didn't know? Maybe your local banker didn't know.

lollyd says

So why were unqualified buyers able to get a loan for a house anyway?
In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.[111] In 1996, HUD set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.[112] From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year, which included $350 billion of Alt-A securities. Fannie Mae had stopped buying Alt-A products in the early 1990s because of the high risk of default. By 2008, the Fannie Mae and Freddie Mac owned, either directly or through mortgage pools they sponsored, $5.1 trillion in residential mortgages, about half the total U.S. mortgage market.[113] The GSE have always been highly leveraged, their net worth as of 30 June 2008 being a mere US$114 billion.[114] When concerns arose in September 2008 regarding the ability of the GSE to make good on their guarantees, the Federal government was forced to place the companies into a conservatorship, effectively nationalizing them at the taxpayers’ expense.[115][116]
I’m put off by the poster’s urge to call the Tea Party stupid, as if the Tea Party was a group with a single united view. They aren’t.
All players in the subprime meltdown were at fault for a variety of reasons - people who knew they couldn’t afford a big house gambled they could outsmart the ARMs when they came. The government shifted regulations favoring subprime lending to make unqualified buyers suddenly qualified with a sense of entitlement, and the banks tried to cover the mess by repackaging it and trading it around. It ALL combined to create the problem.
The part that makes me mad is the fact that the government put the taxpayers on the hook for the liability. Without that factor, people who couldn’t afford houses they bought would simply lose their house and have to rent. Banks with bad loans would have to eat the loss, but the rest of us wouldn’t be footing the bill for this crap.
It’s not magic or mystical - if you cannot afford it, do not buy it. If you cannot take the risk of lending money to someone unqualified in the credit arena, don’t make the loan. And the government can piss off on asking everyone to pay for this stupidity. We’re already paying our own mortgages, or rent, or whatever.

Bill Gross wants to nationalize the GSE's and the Republicans want to privatize the system and still have government guarantees. The 30 year mortgage will go away or be too expensive without government guarantee in a fiat money system that is being manipulated by the rich.

Yes, the GSE's bought subprime loans, but they didn't originate them. Wall Street and their cronie did. And Wall Street set up the system in bubble fashion. The GSE's never allowed liar loans until they started losing business.

The government guarantees were a given. But I guarantee you that if it was just subprime, as Henry Paulson thought, it would have been contained. But the prime and jumbo liar loans are what are killing the economy. Subprime was contained. But it was much more than subprime. And that is where the Tea Party is smoking funny stuff as they don't see it.

ahasuerus99 says

I suppose I don’t see the Tea Party the same way as GaryA and perhaps some others on this board, because I do not see it as a particularly unified front. Though it may its roots in the Santelli rant against taxation, that rant did not provide any type of agenda for people, it simply drove home to people that all the problems, no matter who caused them, are being fixed with their tax dollars. This is not, then, about who is to blame for these problems, it is about cutting spending. Each member of the Tea Party seems to have their own idea as to where those spending cuts (with many opposed to cutting things they themselves benefit from; there is hypocrisy in pretty much every political party when it comes to their own backs getting scratched) should come from, but the general consensus seems to be anti-TARP and anti-Healthcare bill. I wouldn’t call a group hatched from the ashes of animosity toward the bailouts (which mostly went to the banks) as being particularly pro-bank, honestly. From speaking with some Tea Party people, the vast majority think the banks should have been allowed to fail for handing out bad loans, which seems to indicate that they blame the banks for their own negligence. Tea Partiers are also, as a group, in favor of auditing the Fed and generally distrust the central bank. Just because two people, who you identify as founders of the Tea Party movement, and perhaps they are, don’t rail against banks as much as you would like does not indicate that the average person who identifies with the Tea Party is pro-banker. In fact, the mainstream wing of the Republican party is far more pro-banker than the Tea Party, just as the mainstream of the Democrat party is far more pro-banker than the Progressives. I have not met many average Americans, from the Moveon.org and Huffington Poster to the Freerepublic and Liberty Poster, who actually are pro-bank in the slightest. Everyone blames the banks for making stupid loans, the question is how much blame should be assigned to the Realtors, the Appraisers, and the home buyers themselves. Sit back and think about the experts on each side, the Keynesian (usually espoused by the left) side versus the Austrian (usually espoused by the right) side and ask yourselves which is more pro-bank and pro-Fed. Have you ever seen a more pro-Fed, pro fiat-currency fellow than Paul Krugman, generally adored by the left (and who quoted Keynes on gold that gold is a “barbarous relic,” and who adamantly opposed the movement to abolish the Fed, the best friend of banks and the source of their profits since TARP)? Isn’t the entire Austrian push against allowing banks to loan at ridiculous reserve ratios as strong an anti-bankster position as one can have? Isn’t allowing the banks to fail for their own stupidity (as Mitch McConnell recommended in April, drawing the ire of Krugman) anti-bankster? Even the Huffington Post grants that the Tea Party is anti-bankster at heart (http://www.huffingtonpost.com/robert-kuttner/question-for-the-tea-part_b_642379.html), it just questions their ability to see through the distortions of the Republicans.

You don't get it. Fox News strongly supports the banks. So does CNBC. These continually promote the Tea Party, and you cannot deny what I said about Hennessey, the founder of the Tea Party, not calling out the banks when on Kudlow. This happened more than once. I emailed him and he is a flake. He refused to discuss the issues in a return email. I don't buy anything the leaders of the Tea Party say because they are for Wall Street and against mainstreet. If you can't see this you are deceived.

And that link is a joke. The guy says they don't much like bankers, but I have watched the founder in action. I know better.

Be certain as you listen to this crap, that he never talks about the real problem, but rather wants to do away with social security, health care, welfare, and everything that filters any money from the top to the bottom. But I remind you that 10 percent of the people in the US control 93 percent of the wealth. This direction cannot continue or there will be societal meltdown. But Hennessey wants to keep his part of the pie. That is what the Tea Party is about. Wake up. They will continue to ruin America. Both parties are in the pockets of the rich. But the trickle down doesn't work. Didn't work with Bush, isn't working now as the banksters got bailed out and Wall Street is stronger while mainstreet is wobbling.
http://www.youtube.com/watch?v=1_fgg_E6cok

By the way, his kudlow interviews are missing from you tube. They may still be on the CNBC site, I don't know.

Yeah but Gary, it's the Democrats in power now doing the Exact same thing you are warning us about the Tea Party.

And just for the record so every body knows, I'm against both parties for the main reason that they have turned into Polarized "Parties" the last thing I'm for is any Political affiliation that has the Word "Party" in their goddamn NAME!

We need to start Electing people that have no Answer for typical Left and Right fodder questions. Because truth be told they don't give a Rats ass about those fabricated troubles that is eroding the fabric of this country and what it is to be American.

We need politicians that take problems as they arise Maturely and with a level head acting for the good of all people. Instead of petty ASS HOLES acting in the best interest of their party leaders, party contributors second, and their party elite third, and for the fourth and feel good reason to sock it to the other party. But make no mistake the lowly constituents are on the very bottom of a long long shitty list. For the impetus of their actions.

Independents have no such goals, and typically are already wealthy and self made, and are big Washington and Wall Street outsiders.

I'm in awe who the educated Americans in this country keeps turning to in the polls, after bitching about the same guys performance the last 4 years, when he wore a different colored suit.

It's hard to have respect for them, or at least take their political rants seriously.

Common Sense says

OT: “since they are stupid” caught my eye, GaryA. Friendly tip…shooting off that kind of shallow generalization at a party will get you neither laid (by someone who matters) nor respected (by someone who matters).

Well then, perhaps they are just diabolically evil rather than stupid. I wrote about this here: http://bgamall.bravejournal.com/entry/64795

And a fellow wanted Sharron Angle's take. She is against public social security, and is a Tea Party joker. She knows like we all do that the boomers are boycotting stocks. It is really confounding Wall Street, and they need new fresh money, as 401k's are being depleted due to hardship as well. That new money is social security. It isn't stupid, I guess, just greedy and evil. Is that better, "common sense"? I have a little more common sense don't you think? Here is the deal, the money on the sidelines that Wall Street pines for on CNBC is boycotting stocks. I applaud all those who want to grab the banksters by the balls. There is no better way.

ahasuerus99 says

I suppose I don’t see the Tea Party the same way as GaryA and perhaps some others on this board, because I do not see it as a particularly unified front.

Agreed!

The "Tea Party" is most certainly not a unified front. You can ascribe all kinds of opinions to it since it's a somewhat anarchic collective. As an avid reader of Instapundit and Powerlineblog (blogs that cover the Tea Party quite thoroughly and without malice/snottiness), I don't see where in the Tea Party movement there is any consensus that ponzi home buyers are "to blame". My understanding all along has been that they are against bailing anyone else out-- bankers, home buyers... anyone. Actually seems pretty middle-of-the-road for the Patrick.net-savvy crowd. Unless you have an irrational predisposition to hating Tea Party folks (i.e. you think Olbermann is a journalist).

"It isn’t stupid, I guess, just greedy and evil"

I'm confused, Gary. So then Bernie Madoff isn't greedy and evil? Unless, of course, there's no difference between his scheme and the current mechanics of social security. However, my original post dealt more with the mistake of making generalizations and not your intended smack. Remember, no individual or entire party is one-dimensionally bad. There is a lot of genuine concern within that movement.

Ahhh... GaryA is from Reno. No wonder he's so bitter, biased and just plain wrong. Ya, I've got some family members with investment property out in Sparks lol. None of us are tea partiers. I'll give GaryA 1 point for not calling them tea-baggers like many of my co-workers in the SF bay area or for that matter our dear leader.

mark1inla says

ahasuerus99 says

I suppose I don’t see the Tea Party the same way as GaryA and perhaps some others on this board, because I do not see it as a particularly unified front.

Agreed!
The “Tea Party” is most certainly not a unified front. You can ascribe all kinds of opinions to it since it’s a somewhat anarchic collective. As an avid reader of Instapundit and Powerlineblog (blogs that cover the Tea Party quite thoroughly and without malice/snottiness), I don’t see where in the Tea Party movement there is any consensus that ponzi home buyers are “to blame”. My understanding all along has been that they are against bailing anyone else out– bankers, home buyers… anyone. Actually seems pretty middle-of-the-road for the Patrick.net-savvy crowd. Unless you have an irrational predisposition to hating Tea Party folks (i.e. you think Olbermann is a journalist).

I don't buy that for a minute Marc. I don't care about the rank and file. I care about what Hennessey believes. He is the founder. He is for cutting basic government as a means of strengthening the big banks and lower the tax burden of the very top earners. He is for letting banks fail, but not the big banks. So the big banks get bigger. He is for doing away with social security so the big banks can get their hands on the money. He is for lack of regulation but we saw how that allowed the big banks to go wild.

He is for switching power from the government to the people, all the while knowing that the banksters, not the government is in charge. So don't tell me this guy doesn't know. He knows, and he is trying to call fascism communism. You cannot understand what is going on if you think that fascism is communism. Fascism is corporate rule. Communism is government rule. We have corporate rule. That is what the Tea Party midgets reject. I say Hennessey knows and is a liar. Others may want to say they are midgets and maybe they are. One of the two.

Common Sense says

“It isn’t stupid, I guess, just greedy and evil”
I’m confused, Gary. So then Bernie Madoff isn’t greedy and evil? Unless, of course, there’s no difference between his scheme and the current mechanics of social security. However, my original post dealt more with the mistake of making generalizations and not your intended smack. Remember, no individual or entire party is one-dimensionally bad. There is a lot of genuine concern within that movement.

Wall Street wants the social security money. You can call it a ponzi if you want, but the Wall Street casino is a much greater and much more classic ponzi. If the trust fund ran out people would get over 60 percent of their benefits. If the stock market crashes, you never know.

Wall Street is bleeding dry from the "sideline money" permanently sidelined. Wall Street sees 401k money being withdrawn for hardship. Wall Street wants social security money and all the lies under heaven will not change that fact.

Well, I say give it to 'em. Maybe a job'r two will come from it. And from what I've seen over the past 1.5 years, I'm convinced the taxpayers will get the bill for any losses regardless of whether the money is stolen by the politicians or gambled away by Wall Street.

No we need to strangle Wall Street. Wall Street is engaged in a massive misallocation of capital, and is destroying mainstreet. The way to strangle Wall Street is to cut off the money supply.

We already know that they are manipulating the stock market, the bond market and the price of commodities and houses. The world would be better off without Wall Street because it is no longer true capitalism.

You may be right about the bill. We default and tell the banksters and the IMF to shove it if it comes to that.

Another way that Wall Street may be destroyed would involve a package with a terrorist nuke in it. I hope it does not happen.

Personal responsibility is what the Tea Party people are trying to bring back.

Attacking Tea Party logic means that you are against personal responsibility.

Frohickey says

Personal responsibility is what the Tea Party people are trying to bring back.
Attacking Tea Party logic means that you are against personal responsibility.

No, it is not so simple as that. Tea Party personal responsibility plays into the hands of Wall Street and the uber rich. Tea Party is either naive or in bed with the banksters. The way that Hennessy carries on with Kudlow makes me wonder. The Tea Party is just interested in tax breaks for the rich. If that is what selfish society is about then I suggest that it is not about personal responsibility, but rather is about personal GREED. There is a difference. If the poor and middle classes swallow this propaganda, they will be raped and the Tea Party folks will be richer.

Perhaps it is as simple as that.

Tea Party wants personal responsibility. If Wall Street or uber rich happens to like that as well, maybe Wall Street/uber rich wants personal responsibility as well. Tax breaks for the rich is pretty good, IMHO, about the only thing better than that would be "Tax breaks for everyone". However, some people see giving tax breaks to everyone as only giving tax breaks to people who are eligible for it.

If there was a government program that allows you to deduct money paid as interest when you borrow a loan, and loans are only given to people who can afford to pay the loans back, would that be considered a tax break for the uber rich, or a tax break for everyone?

Maybe the more egalitarian way of doing tax policy is to have a flat tax. Everyone with a pulse pays $x amount. That way, you cannot accuse government of being in the pockets of the rich.

"The Tea Party is just interested in tax breaks for the rich. If that is what selfish society is about then I suggest that it is not about personal responsibility, but rather is about personal GREED."

It's charming in it's delightful absurdity. A typical FDR era attack "they're for the rich" and accusations of "greed" from someone who just wants to rob the "rich" for his own sake but that's not "greed". In addition, even as the attackers of the tea party generalize that they're all "greedy" and out "for the rich", at the same time they're a bunch of loser trailer park residents who don't deserve any respect or consideration whatsoever.

If only those "rich" "trailer park residents" weren't so "greedy", then the socialists could run this place like South America so it will look like... Sweden someday. Got it?

Me neither.

But that's the universe they live in. Oh, did I mention that those who disagree with them are "stupid?" What a surprise!

Frohickey says

Maybe the more egalitarian way of doing tax policy is to have a flat tax. Everyone with a pulse pays $x amount. That way, you cannot accuse government of being in the pockets of the rich.

A flat tax would be strong evidence that the government is in the pocket of the rich. That would be HUGELY beneficial for them...

PolishKnight says

“The Tea Party is just interested in tax breaks for the rich. If that is what selfish society is about then I suggest that it is not about personal responsibility, but rather is about personal GREED.”
It’s charming in it’s delightful absurdity. A typical FDR era attack “they’re for the rich” and accusations of “greed” from someone who just wants to rob the “rich” for his own sake but that’s not “greed”. In addition, even as the attackers of the tea party generalize that they’re all “greedy” and out “for the rich”, at the same time they’re a bunch of loser trailer park residents who don’t deserve any respect or consideration whatsoever.
If only those “rich” “trailer park residents” weren’t so “greedy”, then the socialists could run this place like South America so it will look like… Sweden someday. Got it?
Me neither.
But that’s the universe they live in. Oh, did I mention that those who disagree with them are “stupid?” What a surprise!

I'm not familar enough with the Tea Party members to know what the story is, but here's one possible scenario to explain the dichotomy that you point out.

Some wealthy, well connected folks observe that there is a bubbling anger at government because of the bailouts of Wall St. and the banks. Additionally, Obama's election has stirred up some resentment among some people for whatever reason.

So the wealthy folks stoke this anger and fear and let it coalesce into some sort of ragtag movement all the while subtlely pushing them towards positions that further their interests. But cloaking it under the guise of personal responsibility or liberty or free market principles so it's not too obvious. Eventually, you end up with seniors on Medicare telling their senators to keep government out of their healthcare... Does that sounds about right?

tatupu70 says

A flat tax would be strong evidence that the government is in the pocket of the rich. That would be HUGELY beneficial for them…

Only if the flat tax were used to pay for something the 'rich' would require/use and the 'poor' wouldn't. Since government is supposed to provide universal services, such as common defense, patent protection, post roads, navy, etc., then there should be no such program that government does that will be HUGELY beneficial to one group of people and not beneficial to another group of people.

If a program exist that is HUGELY beneficial to one group and not beneficial to another group, then government should not be undertaking that program, or government should be funding that program solely with fees that are paid for only by the gropu that benefits.

Frolickey--

It would be good for the rich because they would pay much less and the middle class would pay much more (as a percentage of income)

Tea Party Complaint No 1: Government Employee Pay & Pensions
Oh, I'd say everyone, and I mean everyone is getting involved:
[SF] Public Defender Jeff Adachi, a stalwart of the left, is the equally unlikely champion of a pension reform initiative that has jolted organized labor into full combat mode even as the measure awaits certification for the ballot.

tatupu70 says

Frolickey–
It would be good for the rich because they would pay much less and the middle class would pay much more (as a percentage of income)

Why are you hung up on "percentage of income"? Would you seek to penalize someone that happens to be more fortunate than you? What if you are the one that is trying to become more fortunate? Wouldn't that be punitive to becoming successful?

If the rich pay $10K in taxes, and the middle class pay $10K in taxes, who is paying much less and who is paying much more? Last I checked, $10,000 = $10,000.

Frohickey says

tatupu70 says

Frolickey–
It would be good for the rich because they would pay much less and the middle class would pay much more (as a percentage of income)

Why are you hung up on “percentage of income”? Would you seek to penalize someone that happens to be more fortunate than you? What if you are the one that is trying to become more fortunate? Wouldn’t that be punitive to becoming successful?
If the rich pay $10K in taxes, and the middle class pay $10K in taxes, who is paying much less and who is paying much more? Last I checked, $10,000 = $10,000.

First off--it's not about punishing or being punitive to anyone. The goal is to have a vibrant economy and healthy society. In order to accomplish this goal, you need to have progressive taxation--otherwise you end up with extreme disparity between the haves and have nots. Which usually ends in war or revolution.

tatupu70 says

First off–it’s not about punishing or being punitive to anyone. The goal is to have a vibrant economy and healthy society. In order to accomplish this goal, you need to have progressive taxation–otherwise you end up with extreme disparity between the haves and have nots. Which usually ends in war or revolution.

In other words, you would use the power of government to penalize high income people in order to maintain public order? Are you saying that we need to eliminate the possibility of extreme disparity between the haves and have-nots in order to maintain order? What does that say about the lawfulness of the have-nots? What does that say about the inability of government to protect the innocent and punish the guilty?

GaryA says

Wall Street wants the social security money. You can call it a ponzi if you want, but the Wall Street casino is a much greater and much more classic ponzi. If the trust fund ran out people would get over 60 percent of their benefits. If the stock market crashes, you never know.
Wall Street is bleeding dry from the “sideline money” permanently sidelined. Wall Street sees 401k money being withdrawn for hardship. Wall Street wants social security money and all the lies under heaven will not change that fact.

I do not have a problem with this.
1) Social Security money is money earned by the business (6.1%) and by the employee (6.1%)
2) If you earn the money, its your property, and as your property, you should have complete control over it.
3) With the Social Security regulations, you do not have control over your money until the time you retire, and you do not have control over which causes you support. (read, foreign wars).
4) Government takes your money and gives you an IOU, but the conditions of the IOU are always subject to change without your consent. If this were done property, government would be forced to refund all monies with interest back to you if they were to change the conditions of the contract.

How the hell could it possibly be the borrowers fault?

The arrangement was very explicit: Pay $X per month, or the lender gets the collateral. Mortgage lending is the same as pawn shop lending. They lend money, and keep collateral if payment terms are not met. And let's not forget they are not lending out of kindness, they are lending FOR PROFIT. Huge profit.

Sorry, if you're a pawn shop that lends $1000 against a ring that's only worth $500, you're an idiot, and you deserve to loose $500. How can you possibly blame somebody for just going and buying a new ring for $500 instead of going back with $1000 to reclaim their old one?

Same goes for mortgage lenders that lent $1 Million against a home only worth $500K. And same goes for the people that give the keys back and rent or buy a cheaper place.

tatupu70 says

Frohickey says

tatupu70 says

Frolickey–
It would be good for the rich because they would pay much less and the middle class would pay much more (as a percentage of income)

Why are you hung up on “percentage of income”? Would you seek to penalize someone that happens to be more fortunate than you? What if you are the one that is trying to become more fortunate? Wouldn’t that be punitive to becoming successful?
If the rich pay $10K in taxes, and the middle class pay $10K in taxes, who is paying much less and who is paying much more? Last I checked, $10,000 = $10,000.

First off–it’s not about punishing or being punitive to anyone. The goal is to have a vibrant economy and healthy society. In order to accomplish this goal, you need to have progressive taxation–otherwise you end up with extreme disparity between the haves and have nots. Which usually ends in war or revolution.

This is the first time that I have heard the argument that a flat tax was a flat dollar figure, and I think you are incorrect, Frohicky, to describe it as a flat amount. I have always understood it to be a "flat" % of income. For example, if it were a flat 10%, then someone making $10K/year would pay $1,000, someone making $100,000/year would pay $10,000, etc. Also, a flat % of income is not the same as "progressive taxation."

Frohickey says

1) Social Security money is money earned by the business (6.1%) and by the employee (6.1%)
2) If you earn the money, its your property, and as your property, you should have complete control over it.
3) With the Social Security regulations, you do not have control over your money until the time you retire, and you do not have control over which causes you support. (read, foreign wars).
4) Government takes your money and gives you an IOU, but the conditions of the IOU are always subject to change without your consent. If this were done property, government would be forced to refund all monies with interest back to you if they were to change the conditions of the contract

I'm not sure you understand Social Security. It's no longer your money the second you pay FICA. You've paid into a trust fund. And as such, you are not entitled to have direct control (you do have control over who you vote for..).

tatupu70 says
I’m not sure you understand Social Security. It’s no longer your money the second you pay FICA. You’ve paid into a trust fund. And as such, you are not entitled to have direct control (you do have control over who you vote for..).

My mistake.
It was my money prior to it having been taken against my will for the Social Security trust fund, which is insolvent and would need to change the conditions of its payout to me during my retirement years because its was a government-approved Ponzi scheme all along for which Madoff and others have been imprisoned for.

Realtors go nuts when they try to sell me a property and I ask them about that the same house would rent for. The tell me "you can't go by monthly rents." These guys are such slime.