[jstoesz]

For once I Agee. Although, left unchecked it still has the similar negative repercussions. The extent of the damage was not exclusive to single homebuyers. Clearly the repercussions were greater. But the same flawed logic was in play. The unintended consequences must be analyzed for every well-intentioned policy!

CAR, argue the intent of the previous statement, the extent of the devastation is another discussion. If you disagree at all, that is.

[jstoesz]

Hell, we lost the CCC and alphabet soup and got permanent disability, food stamps, and 99 weeks. We have changed how we support the poor. We only have a few widened roads to show for the stimulus. Will anyone look at those roads in 70 years like we look at the hoover dam or the perfectly graded trails of the Sierra. Anyone been up the 99 switchbacks lately? We have lost our ability to build shit quick and for cheap.

[jstoesz]

You guys are missing the core issues here.

Nobody wants all the money concentrated in the hands of the rich (well
maybe a few rich people do).  But by and large, conservatives want a
larger middle class and fewer poor people.  The disagreement is not
over the goal, it is over the solution.

Redistributive policies may temporarily achieve the goal, but at
substantial unintended costs. In many people, they have a reverse
effect creating a culture of dependency.  If we are serious about
solving the disparate income problems, we must be serious about the
unintended consequences.

Housing is a perfect example of where our social policy produced an
unintended consequence.  We said, “look people who own houses are more
involved in their communities, value education more highly, have
better marriage rates and few single parent households.  We should
encourage more people to buy houses so that they will be better
citizens.”  It was the classic correlation is causation fallacy.
People who owned homes had all those characteristics because they had
the personal and financial skills to achieve home ownership.  Home
ownership did not bring about those attributes.  And now look at the
unintended consequences.

I think too many people believe that if we support the poor to enable
them to live like the middle class, they then will acquire the life
skills to then self sustain that lifestyle and eventually the support
can be removed.  I think again the opposite occurs, people lose the
impetus to acquire those necessary skills.

[jstoesz]

I think the solution is a step or two back…

The problem most people see is a lack of accountability with Teachers. We could extend this problem to say their is a lack of accountability with schools (districts, administrators, teachers, etc.)

The solution to this problem is school choice. If parents can choose where their kids go to school, their is no need to for all of these fancy statistical metrics. Some would be helpful in supplying families accurate knowledge of their schools, but not to the same level we have today.

If we open up school districts monopoly on kids, where they go to school, how they are taught, when they are taught etc. All of these problems will be self regulating.

Sure some parents wont give a crap where their kids go to school, but the schools they attend will naturally be bettered by all the new accountability infused into the education system.

[jstoesz]

Did I miss something, what did he say that was so obnoxious? Was it the apologize comment?

[jstoesz]

Thanks for the realtor.com suggestion. Never really used that before…strange really. Seems pretty good though, perhaps better than the others I have been using.

I miss the sdlookup address forum widget though. Some of the best info on a house is right there.

[jstoesz]

[quote=LaPasta]Are you really a professor?

[quote=EconProf]ctr70, the original poster of this thread says he leaned left most of his life, then steadily turned to the right politically.
Winston Churchill once said, paraphrasing, if one is young and not liberal, they have no heart. If one is older and not conservative, they have no head.[/quote]

I ask because you just “paraphrased” Churchill as saying something that anyone with an ounce of research skills would know has been mis-attributed to Churchill (by a conservative, no doubt).

Here’s an Abraham Lincoln quote for you: “Anyone who votes for a billionaire running a campaign paid for by billionaires is either a billionaire or a sheep.”[/quote]

The author was Francois Guizot

http://en.wikipedia.org/wiki/Fran%C3%A7ois_Guizot

[jstoesz]

[quote=briansd1]Here’s a good article by Charlie Crist, former governor of Florida on why Obama is the right choice.

This is a very important announcement since, for Romney the road to the white house is only through Florida. Obama can win without Florida.

http://www.tampabay.com/opinion/columns/former-gov-charlie-crist-heres-why-im-backing-barack-obama/1247631%5B/quote%5D

Come on brian…everyone knows crist has a serious case of sour grapes…Would you respect an article written by Arlen Spector too?

These guys are bitter that they found themselves in political no mans land praying anyone will take them seriously. Don’t throw them the bone they so desperately need.

[jstoesz]

[quote=harvey]http://finance.yahoo.com/news/corporate-cash-spikes-time-high-185700472.html

Corporate Cash Spikes to All-Time High, 11% of U.S. GDP

This is very old news, corporations have been accumulating cash for years, some data suggests decades:

http://www.ritholtz.com/blog/2010/07/corporate-cash-has-been-piling-up-since-1982/

A handful of big companies have debt issues, like GM, but these don’t influence the big picture much. (BTW: Much of GM’s “debt” is unfunded pension obligations and not actual bonds.)

The point is that there is plenty of capital available. Companies have cash, they can easily borrow, the market is strong and they can issue more equity.

But they aren’t doing it because there is no demand.

It’s not taxes and it’s not regulation that are preventing companies from investing. Those are bullshit explanations by a political party that is trying to differentiate themselves and discredit the other team. There is no CEO in America that is choosing not to expand because of taxes or regulation – they are holding back because they are concerned that their markets cannot grow.

(You will hear of CEOs that complain about taxes and regulation in order to be consistent with the party-line, and because it still helps their bottom line to change these policies, but taxes and/or regulation are NOT the driving issue in the economy right now – they are just the political meme from one side of the aisle.)

The capital is there, plenty of it. Nobody is using the capital to expand because not enough consumers are able to buy what corporations are building. There is overwhelming data to support this argument.[/quote]

Are you intending to deny the debt side of the equation? No one is denying companies have cash…

[jstoesz]

[quote=harvey][quote=jstoesz]Saying businesses is sitting on tons of cash is like saying, homeowners who HELOC’ed their paid off residence are flush with cash. Yes, they have cash, but net, they have nothing…[/quote]

No, it isn’t the same. Not even close.

Apple computer has more than $27 billion in cash.

Exxon has $17 billion.

We could go on all day with this list – many large companies have similar positions.

No go find us a single HELOC borrower who still has any cash from the original loan.

Brian is right, businesses today have plenty of cash but they are choosing not to invest it.

It’s a so easy to spot a “Tea Party” dimwit these days: They don’t check even the most basic facts. Much easier to spout off whatever mythology they’ve been told to obey on Fox news.

BTW: That “chart” comparing debt vs. cash is a joke of a distortion. Here’s a little homework for ya: calculate the cash/debt ratios for each.[/quote]

Your post is a classic example of cherry picking anecdotal cases to disprove something that applies to the aggregate. I don’t give a flying crap what amount of cash Apple has. They are such a small portion of the overall gdp, it means nothing. I could come up with just as many companies that are being swallowed in debt. Car manufacturers come to mind. If you want to believe everyone who disagrees with you is some brainless zombie, have at it, but I think you are being intellectually dishonest.

The 2 trillion in excess cash meme, seems illusionary, considering companies have the taken on more debt to achieve it. The home owner analogy was just that an analogy.

FYI, I don’t have a cable connection or even rabbit ears, so Fox news is a little hard to come by (2.5mb dsl line is all I can get).

That chart shows the debt to cash ratio to be comparable? So what, is that surprising? If you increase your debt, doesn’t your cash on hand go up by a comparable amount. It sounds quite logical really. What is more interesting than the cash to debt ratio, is the fact that while debt went up by 1.8 trillion, the cash only went up by .5 trillion…

How does that show US companies in good shape to go spend like the like crazy?

[jstoesz]

Saying businesses is sitting on tons of cash is like saying, homeowners who HELOC’ed their paid off residence are flush with cash. Yes, they have cash, but net, they have nothing…

[jstoesz]

Not such a large pile of cash when put in perspective.

This is from 2011, but I doubt much has changed.

[jstoesz]

[quote=sdduuuude][quote=jstoesz]people who buy real estate for investment purposes do not receive a mortgage tax deduction.[/quote]

Sure they do. It is deductible as a business expense, like any other expense.

Home mortgage interest is given special consideration to be treated like a business expense when it is, in-fact, a personal expense.

Mortgage interest on investment property starts out as a business expense and is therefore deductible without any special rules.[/quote]

True true. Good point. maybe it is not so apples to oranges. Not sure it disagrees with the larger point though.

[jstoesz]

[quote=bearishgurl][quote=jstoesz]No one argues that the housing mortgage deduction is not simulative of housing prices…obviously it is. Is it stimulative for the economy in general? Seems to me, the answer is no. It incentivizes people to put their savings in non productive assets. If houses were cheaper and the market not artificially skewed towards housing, that money could be put to much better uses. The same thing goes for you alls argument on business investment deductions.[/quote]

jstoesz, which better uses than investment RE would you suggest for one’s money they have currently set aside for investment purposes?[/quote]

First off, BG, people who buy real estate for investment purposes do not receive a mortgage tax deduction. So, I think this is a bit of an apples to oranges disagreement regarding what I was talking about.

With that said, housing investment seems more like speculation, much like buying metals. Gold is a non productive asset, but “investing” in it does stimulate mining jobs etc. Just like housing results in construction jobs, but it doesn’t have the same stimulation as investing in companies. Companies are built to further produce additional value from that investment (increasing efficiency and wealth for its investors). A house or a bar of gold can’t produce crapola.

[jstoesz]

From what I have read, businesses are not simply sitting on a pile of cash, earned from profit. Rather they have a pile of cash and an even bigger pile of debt. Mine as well mortgage the crap out of your company while rates are so low, to hedge against future downturn. It is a cheap way to protect your company against future risk, but to spend it would be a very risky proposition indeed.

Furthermore, what piles of cash sitting out there that do exist, higher rates do not touch. Only future profit gains are affected by higher rates. This has the effect of keeping companies from taking riskier investments because their profit margin is cut. Thereby, making the risk/reward ratio less attractive, not more attractive.

[Author]

Posts