San Diego Housing Bubble News and Analysis

History clearly shows that government intervention in financial markets makes matters worse - both in the ultimate cost of recovery and in the time it takes for recovery to occur (ie, recovery costs more and takes longer when the government gets involved)

Since Americans choose to ignore history maybe it will be different this time???

Yeah, and monkeys might fly out of my butt at any moment ...

This is simply a case of supply and demand.

Rich people hate paying taxes. They especially hate it when their taxes are spent helping poor people. They feel that they are being robbed by the government. They dream of an ideal world with no taxes, no government, no minimum wage, no unemployment benefits, no socialized healthcare, where rich people would live in their mansions and poor people would serve them for scraps off their tables. They even have their own party. It pursues interests of the richest 10% of the population and fools another 40% into voting for them by using various deceptive practices.

Naturally, there's a lot of demand for books, articles, theories, etc. that would justify why big government is bad and why taxes are bad.

When there's demand, there's supply. This book is an example of this supply.

And if I had to guess whether esmith fell into the 'rich' camp or the 'poor' camp I would guess ...

~

I've been working hard since I was 12 - is it wrong for me to feel like I have a right to keep the money / things I have worked for?

Because my parents emphasized education and made sure that I got one I am supposed to pay 50 to 70% of my earnings to support a bunch of low-life chimpanzees who want to lay around watching TV, doing drugs and producing illegitimate children?

My point exactly. People like you are the reason why people like Amity Shlaes are compelled to write their books, whether or not their claims have anything to do with reality.

Yeah, there are tons of people in the top 50% of income earners who will fight to the death to keep the top 1% of income earners from paying more taxes. And then there are the kooky anti-choice and religious zealots who have joined them. It's quite a group.

Agree with esmith on this one.

Those who have the wealth control the flow of money, period. Of course, they want even greater amounts of money to flow to them. They don't care what happens to the people who give this money to them (employees who make less so the execs can make more, via busted unions; customers who overpay so their vendors can make more, via monopolies & patent protection; taxpayers who pay for corporate/executive welfare, via tax credits and incentives and limited liability -- see bailouts, etc.).

And you can't convince me that the "rich" make poor people wealthier by "investing" thier wealth. They do not intend to GIVE this money to start-ups or other businesses. They want all of it back, plus interest/dividends/cap gains. IOW, the goal is to take money **out** of the system every time they invest. Someone else now owes them the same amount plus interest, and that debt service pulls money from future economic activities.

As long as we have a debt-based monetary system, there is no "trickle-down". Credit = debt PLUS interest. Only the creditor wins. And money is concentrated into fewer and fewer hands until we reach a point where the lower classes can no longer service their debt, and we get a deflationary depression. At some point, the money is redistributed and the economy (and credit cycle) can grow once the economy has hit bottom.

Wealth disparity is a bad thing.

Full disclosure: I'm a market speculator/investor and 100% of my income is from investments. What I'm saying does NOT benefit me, but somebody has to be honest about it (Warren Buffett seems to have similar beliefs). I think it is entirely immoral and unethical that my income should be taxed at a lower rate than income that is earned via labor.

4plexowner : I'm with you, brother! I started delivering newspapers and TV Guides when I was nine years old. I had a morning, evening 7 Sunday paper route that required me to get up at 4:30 in the morning so I could finish the route and get ready for school. I learned a great work ethic from this experience and the more money I made as an adult, the government was always standing there, wanting more & more for the "ner-do-wells" of America who had NO work ethic and who are always pissing & moaning about how sorry their lives are when the real problem is that they are simply professional victims of their own making. It makes me very angry that the liberals in the government want to punish the people who keep the economy working and reward the bozo's who only want to take.......and take..............and take some more..............and then bitch about how little they have. Screw 'em!!

I hear ya' brother! No doubt you would have been just as successful in Russia or China. All your success is because of YOUR efforts and people like YOU shouldn't have to pay any taxes because YOU are so special.

Now you just have to convince the other 99% of Americans who make less than you to lower your taxes after they've seen the very rich rape the system for the last 8 years. It should be an easy sell.

Edited to add:By the way, if you make less than the top 1% (approximately $250K per year), then you don't have anything to worry about under either McCain's or Obama's proposed tax plans as folks who make less than $250K will not see their taxes raised under either new administration's plans. It's only the super-rich like FLU who should fear the Obama plan as they will finally have to pay their fair share.

Any number of cultural historians have noted the American belief that success is a sign of God's favor. And over the past couple of decades he has had a downright love fest with the already-rich. So much so that the richest 400 Americans now have more money stashed away that the combined bottom 150 million Americans. Some $1.6 trillion bucks.

This was accomplished by selling off or shipping out ever available asset, from jobs to seaports, smashing usury and anti-monopoly laws, raiding the public coffers and manipulating the medium of exchange and blackmailing the peasantry regarding common needs such as heath care and energy to keep their asses warm -- to name a few. The ultimate coup was to convince the entire nation that the well being of the rich, meaning the well being of Wall Street, was indeed the common man's well being.

So keep on complaining about the greed and avarice of the poor as our country gets destroyed by above. It's keeps your eyes off the real criminals.

Thebreeze: The reason that many people who make over $250k per year (including myself) is because we don't sit around whining: We get off our asses and do something to change things so we can earn that kind of money. This fucking communistic/socialist thinking that seems to be invading America today that because the upper 1% owe even more than they've been paying for taxes is just plain ole crappola. If you're not making $250k per year now and you have any kind of "get up and go make something happen" spirit within you, you also make make that kind of money one day. Then, we'll see just how much you enjoy paying more than your fair share of taxes for supporting the beer swilling, couch potatoes and lazy "ner do wells" with their illegitimate children that don't want to work for living.
AND.........I don't think God had anything to do with my success or anyone else's success because I'm a dyed in the wool, atheist. It's a tough world out their guys. Quit moaning and whining and do something to make more money rather than trying to give mine away. Geeeeez, you fucking liberals make me wanna puke.

Hmm... hard to comment w/o profanity.

Fact is I am from poor folks. They werent lazy and they didnt sit front the telly smoking crack. They worked. We went to public school, gota degree, got a decent job.

And its ONLY about PAYING a fair share, not LESS than a fair share, as it is now... btw.

Cos the fact remains that I pay as much or more taxes than those who make millions.

The class warfare nitwits are out in force. There's not much that I'd agree with the Obamas on, but $250k a year isn't rich. Technically it may be, but in reality it just isn't all that much. I probably know a half dozen folks with more than $50 mil. Amazingly, they're mostly liberal twits who dedicate their lives to tax avoidance.

BTW esmith, I take it back. You're an idiot. Now go on out there, and eat the rich.

Does anyone here seriously think the people making $250k a year are doing ten times the work of those making $25k a year?

And those making 2.5 million are working ten times harder than those making $250k?

I suppose I'm confused. Or perhaps the argument is so simplistic it's beyond comprehension. Actually, the old class warfare arguments are about as appealing as the stuff that drops out of my dogs butt when he squats on the lawn.

So, the guys that started Microsoft, eBay, Google Cisco, Qualcomm etc. have not helped society through the creation of jobs? Are they not all filthy rich? Does not the amount they pay to employees in their companies FAR outweigh what they pay in taxes? How about the overall amount of utility that society derives from using their services or products?

A hypothetical question: If you asked the employees at Google if they would prefer that Larry Page and Sergey Brin pay 0 taxes for the rest of their life OR we shut down Google permanently what would be their answer?

Same question for eBay, Amazon, Cisco, Microsoft etc.

To say the rich do nothing for the working class is patently absurd and borders upon kindergarten reasoning heavily tainted with jealousy and envy. You're all entitled to your opinions but from my perspective it is nothing but slop.

I don't want government determining what my minimum wage will be. Nor do I want them determining my level of health care. Nor am I rich. To me, anyone that craves that amount of outside control over their lives has some sort of disorder and probably needs psychological counseling.

A hypothetical question: If you asked the employees at Google if they would prefer that Larry Page and Sergey Brin pay 0 taxes for the rest of their life OR we shut down Google permanently what would be their answer?

False dichotomy.

Why don't you ask those same employees if they think its fair that Larry & Sergey pay a smaller percentage of their yearly earnings in taxes than their salaried employees?

Btw, both Bill Gates and Warren Buffet have both stated that they feel they are not paying their fair share of taxes relative to their employees.

No kewp, I don't work harder than I did when I was making $3.35/hr in the 80's. But what I had to do to get here in terms of education and training is easily 100X or more what I needed to do to qualify for the minimum wage jobs. I definitely feel I earned my rightful place in society, and it irks me when people say it's my responsibility to provide for everyone else who worked less hard to get where they are than I have.

Don't missunderstand, I realize the necessity of graduated taxes, just don't expect my to be joyful about it. And $250,000 a year in Southern California is a comfortable living, but is by no means rich.

In my personal experience, the harder I worked, the less I was paid. As I worked my way up the ladder, the jobs became MUCH easier, and I had far more freedoms than when I worked for minimum wage.

Where are you getting the idea that the "rich" have somehow "earned" their money?

Also, wasn't Bill Gates embroiled in antitrust lawsuits because he's structured the business so there can be no real competition? Do the customers benefit from his actions?

http://news.cnet.com/2100-1040-232565.html

Isn't he also the one who hired permanent "temporary" workers so he didn't have to pay healthcare benefits and pensions, etc.? Did the employees benefit from this?

http://www.crn.com/it-channel/18812579

So, taxing Google's **profits** will somehow make them go bankrupt or eliminate any incentive to keep working...please explain, in detail, how you come to this conclusion.

Not sure where you get the idea that "lazy, beer-swilling couch potatoes" are the recipients of the taxpayers' largesse. The numbers would certainly prove that claim wrong.

The largest expense, by far, is defense spending. Social Security and Medicare follow close behind. Are these the "lazy" people you're referring to?

Here is a chart:

http://www.usgovernmentspending.com/#usg...

Where does the "No Bankers Left Behind" bill fit into your thesis that the "rich" earned their money???? Aren't the banks and financial players some of the wealthiest people in the nation? Is this what you would call "class warfare"?

Yojimbo, I agree with most of what you are saying. But would you say the same for Jamie Dimon at JPMorgan?

What seems to be lost in this most delightful discussion is that we currently have the new "republicans" flavor of socialism: give to the upper 1% today and tax the other 99% tomorrow. I don't think anyone in this class warfare battle likes this plan. Shouldn't we, instead of bickering among ourselves, be united in our concern that the government is corrupt and dangerous, and its actions are harmful to all of us.

I haven't read the book, but I think the point is that a government, made up primarily of people who are more skilled at winning popularity contests than they are at understanding finance, is not qualified to manage something as big and complex as the economy. Even their most well meaning efforts have unintended adverse consequences. How much should we trust these people to "fix" things? Not much, no matter where you land on the class spectrum. The idea of America is "individual freedom", and our founders recognized that freedom for the citizens can only occur when the government's powers are limited.

That's funny Kewp. Isn't it called a "False Choice"? Falling back on the false choice defense as an intellectual argument is weak. Most any political, economic, or social issue has more than two distinct and exclusive alternatives. I suppose I could have asked the Google employees whether Sergey's tie was blue or red. Would that have satisfied you?

I asked those particular questions to make a point. They were somewhat rhetorical. Besides, what is your point? I think quite a few employees would not like the fact that Sergey pays a smaller percentage of his income in taxes (assuming of course that he actually does - I will also assume that you have no idea if that is factually true or not). Then again there are probably some that would not care one bit. I would be one of those people. Look at what he's created and the jobs he's provided. Why should I care if he pays any taxes or not?

The true false choice is looking only at the amount of taxes he pays individually and comparing that with what one of his employees pays. What about Google's corporate taxes? If he hadn't created Google then all those employees would probably not be paying as much in income taxes either. How about the sales taxes that result from the sale of products? Sales taxes on the products and services Google employees buy with their income? Shouldn't he get some credit for all of that as well?

Underdose, I'm certainly not naive enough to believe that there are not CEO's, politicians, or certain rich citizens that try , and do, take advantage of both the system and the lower earning population. Jamie Dimon is definitely taking advantage of his situation and will make millions because of it. In fact, I'm not really posting to defend the rich etc. I'm posting because certain posters on this board continuously insinuate that if you don't see things their way you are essentially a close-minded uneducated idiot. The behavior is a common quirk of left leaning "intellectuals". I normally do not post because I usually have more productive things to do. Sometimes, however, I can not take the incessant condescending arrogance.

The real problem for Kewp, TheBreeze and others in their everlasting quest to have government help others is that I just don't really care about others. Why should I fund a health care system for a bunch of obese, smoking, drinking blobs that refuse to take care of themselves? Why should I bail out someone who extracted every last dime out of their property to spend on idiotic toys to prop up their own self esteem and are now getting foreclosed? Why should I bail out Lehman, or Fannie, or social security, or medicare. I don't care about any of them. Let them all crash and burn.

A top and bottom purge would be nice. And, if the money spigot shuts off a purge will occur. But it won't be pretty.

That's funny Kewp. Isn't it called a "False Choice"?

No.

http://en.wikipedia.org/wiki/False_dilemma

Btw, I do happen to know *exactly* what Sergey and Larry's salaries are. One dollar each, look it up. They make their money (billions) from capital gains, which results in a lower relative tax rate when compared to their salaried employees.

You are again making the assumption that the super-wealthy are somehow *blessed* and deserving of extra-special bennies above and beyond already being super-rich.

Larry and Sergey are nothing special. They are in my peer group, in fact. I've known thousands of engineers exactly like them. They owe their success to a *tremendous* amount of luck as much as their innovation and hard work; Google would have gone under during the dotcom bust if it wasn't for angel funding, for example.

Anyways, my point, in a nutshell, is we should all be taxed fairly and progressively; relative to our real income. Both ditch-diggers and day-traders alike. And re: healthcare, no disagreement there. I'm all for a nationwide sales tax to fund socialized healthcare, with the excises determined by the relative harm of the product. I have no problem with cigarettes and sugary sodas costing 10-20 times as much.

Ok, false choice it is.

I see the difference between us. You believe the predominant amount of those who are well off were lucky. I believe they probably worked hard, educated themselves, adapted to market conditions, saw a product or service that they felt would provide value to people and pursued it. Luck certainly helps though.

Once again, let's try to generalize. I know that is difficult for engineers, but my use of Brin as an example was just that - an example. Pick any founder of a successful startup. Of course, I guess it wouldn't matter who I picked if you truly believe success is only a product of luck.

Also, you are not in their peer group. I'm sorry. It's nice that you have a high level of self esteem but you are not part of their group. You may be smarter, or more detail oriented, or better at writing terse, more intellectual-than-thou posts on boards than they are but they managed to break free of the routinized world of nine to five by creating something of value, taking risk, and competing successfully in the marketplace over a long period of time.

"Blessed"? Who said anything about being blessed? I'm not putting them up on a pedestal I just respect the fact that they've done something productive. I mean they could have just stuck with the 9-5 routine and driven to work everyday, done what they were told, earned their paycheck, driven home, watched TV and posted on boards about how sad it is that the rich are shafting the poor and the government needs to step in and help.

As for health care. I'll take care of myself thanks.

There are people who work demanding physical jobs and get paid minimum wage. There are people who sit in their chairs 9 to 5 doing "white collar" jobs, and they get paid five times as much. And then there are people who were born into wealth, and they don't really have to work at all. The outcome is 80% genetics and parents' socioeconomic status, 20% personal effort.
You can't fight genetics, but you can do something to make sure that children of people from the first and third categories get equal access to healthcare and education.
As one smart guy said long time ago, "From each according to his ability, to each according to his needs".

I see the difference between us. You believe the predominant amount of those who are well off were lucky.

The clear majority of people I know that are well off came from already wealthy families. So, yeah, luck definitely has something to do with it.

Beyond that, the super-rich became that way primarily by exploiting loopholes that are only available to (tada!), the already very wealthy. Hedge funds are great example of this. Want market beating returns? Sorry, rich people only. Don't want to pay taxes on your gains? No problem; its all done off-shore!

Again, this group *already* already has advantages far beyond anything available to the average American. Do they really deserve a tax break for that?

Also, you are not in their peer group. I'm sorry.

I meant we are of the same age, similar educational backgrounds and yes, took the similar risks at the same time. They got lucky. Most of us didn't. And as much as I would like to believe we live in a meritocracy, I'm just not that naive.

I mean they could have just stuck with the 9-5 routine and driven to work everyday, done what they were told, earned their paycheck, driven home, watched TV and posted on boards about how sad it is that the rich are shafting the poor and the government needs to step in and help.

Um, you do realize the government is stepping in and bailing out the rich folk with 700 billion dollars of poor folks taxes?

Smart guy? Who? Karl Marx?

I agree with you that ability is largely a genetic accident. I call it the DNA lottery. I make decent money because I am good with computers and can automate getting a lot done with little physical effort, but a lot of mental effort and creativity. To a degree I earned it because I went to school to learn computer science and worked my tail off to learn it as best I could and get good grades. But to a degree I recognize that I was born with a predisposition for it, some freakish gift that my synapses are wired just so that analytical reasoning comes easily to me. Is it fair? Maybe not. But should I be punished for the misfortune of being born with ability? What justice would there be in that? And how much incentive would I feel to employ my natural born gifts if I am required to bear a disproportionate load? I'd be better served to fein disability, and claim extraordinary needs.

esmith, you are taking it too far to the other extreme. The key is to try to have empathy for everyone. Put yourself in the shoes of anyone in society. What if you had by accident been born with a predisposition to practice medicine. Would you want socialized medicine? Would you want to be essentially enslaved by the government? What if you had been born in poverty with below average intelligence and no hope of acquiring white collar skills? Would you want a purely capitalistic meritocracy? The tough thing is that no system is fair to everyone. But some systems are so extremely unfair to some segment of the population that they are down right oppressive. If you want full blown communism, from those with ability to those with needs, well, as John Lennon said:

If you go carrying pictures of Chairman Mao
You ain't gonna make it with anyone any how

Smart guy? Who? Karl Marx?

Yep

? Maybe not. But should I be punished for the misfortune of being born with ability? What justice would there be in that? And how much incentive would I feel to employ my natural born gifts if I am required to bear a disproportionate load? I'd be better served to fein disability, and claim extraordinary needs

You are not punished. You pay more taxes, but you get to keep orders of magnitude more money than poor people get from the government. Between cash and food stamps, welfare recipients average less than $1000/month per family. (The average was $600 in 2001, don't know about today) How would you like to raise a couple of kids on that income?

You were fortunate because you won the DNA lottery. And also because you were able to survive till adulthood, you were well-fed and you could afford to spend time with computers, instead of spending evenings washing dishes at Denny's for minimum wage through high school. Then someone must have paid good money to send you to college. It costs upwards of $60,000 to get a bachelor's degree in a typical private university. Computers may be an exception - formal diploma is not as necessary - but many other high-paying jobs have high up-front costs.

In a pure capitalist society without government, none of it is a given. There would be no healthcare for poor, no government-sponsored public universities like UCSD, no federal student loans, etc.

Here is a great example of the hardworking elite enjoying the fruits of our labor:

http://voices.washingtonpost.com/livecov...

Very much in agreement with esmith here.

Nobody in his/her right mind is claiming that all people should have exactly the same income or wealth, irrespective of their efforts, education, luck, etc. But there should be some more reasonable ratio where the disparity is not so great as to cause great suffering among the greatest number of people.

Ultimately, if you don't protect those who are less fortunate, you end up with something that more closely resembles Mexico or a number of African nations where the few wealthy live in guarded homes and drive armoured cars and live in fear of their children being kidnapped, etc. That's what wealth disparity does. It does not make the less fortunate more productive, it makes them more violent.

Progressive taxes are more like buying protection against violent crime and revolutions. It is the wealthy who benefit at least as much as the poor.

Can someone explain to me why paying the same percentages of your income in taxes is equitable. Wouldn't true equity be that each adult pays the same dollar amount?

If I'm not mistaken, the top 5% of wage earners pay over 50% of the taxes.

The arguments here are ridiculous...amazes me when intelligent people forget that returns on capital actually do effect investment. I spend a lot of time with the CEO of our company...I could care less how hard he works (though he does work harder than 99% of the population), but the guy makes multiple decisions every day that have impacts in the tens of millions of dollars. He's worth every penny he is paid and more.

Stan

A lot of distaste for the "rich" on this board. I can only offer one personal experience.

I was screwed out of about $120,000 to $400,000 depending on the value of the particular stock today.

I used to work for a computer appliance startup several years ago. I was one of about 50 employees. I worked for them for two years. There were times when I worked three days straight with about 3 hours sleep one night and another 3 hours sleep the second night. I worked at least 60+ hours per week to help that company be successful. One day upper management began forcing about 16 of us out of the company. I had never had a black mark on my record from anywhere I have worked during the last 30 years.

Six months later the company announced they were being bought by a big fish. I had vested 80,000 shares of common stock. But the Board of Directors of the company I used to work for voted that common shareholders such as myself and the other 15 ex-employees would get nothing, ZERO, from the buyout deal. The BofD voted that only PREFERRED shareholders such as themselves would get paid anything. I exercised my option to buy my vested shares right before I left the company.

I helped those assholes. They were already rich. They just didn't want anyone else to move up the ladder with them. Those are the only rich people I know. Bunch of scumbags.

TheBreeze..Dude... are you on crack???
Have you ever seen a break down of how much more the affluent pay in taxes? Here are some stats you may want to review before you repeat the dem’s standard "fair share" mantra;

According to data from the IRS, the bottom 50% percent of income earners pay approximately 4% of income taxes
The top 25% of income earners pay nearly 83% of the income tax burden, and the top 10% pay 65%.
The top 1 percent of income earners pay almost 35% of all income taxes.
The top 400 richest Americans paid 1.58% of total income taxes in 2000.

Maybe you need to further define fair.. perhaps instead you should look up the definition of jealousy.. seems to fit here.

You are right about one thing though, under Obama's plan there will be big reward for the supposed winners of the tax hike.. it is called a LAYOFF and my company will be one the first that is forced to have one.

"No doubt you would have been just as successful in Russia or China." Hmmm I have been going to China every year for many years and I see the same thing that I see here.. hard working risk takers and job providers are rewarded for their efforts… it is a global phenomen.