[patientrenter]

Well, davelj, at last you have some realism in your outlook. And I’ll even agree with you that there is money to be made in some of the flavors of mortgage-backed securities for sale out there now. But the only reason is that the money will come from the government. Without government money pouring into the housing market, the CDOs and MBSs etc out there would mostly still be overpriced.

You draw a comparison between the current govt intervention and the Marshall Plan. I think the differences are bigger than the similarities. Enormous amounts of Europe’s physical capital was destroyed or neglected during WW2. There was still a lot left, and there was a large educated population with institutional capital like education, a tradition of law, etc. What was needed was the plugging of certain gaps, mostly filled by simply supplying specific missing equipment or financing specific needed construction projects.

To draw my own exaggerated analogy, consider a car plant producing Toyota Camrys very efficiently. (Europe before WW2.) Then remove all the welding equipment in the plant. (WW2) The plant produces nothing of any high value or worth. (Europe right after WW2.) Now give the plant welding equipment and help them install it. (Marshall Plan.) Result is a highly productive plant once again. (Europe after Marshall Plan.) Lot of oversimplifications, but you get the idea.

Our current economic problem is not that our capacity to shop or buy more houses or build more retail is devastated unnecessarily by some external force, and we just need to restore it through the power of govt spending. Instead our problem was that were were shopping too much, and buying too many houses, and building too many retail stores… What we need is to reduce incentives for people to do those things, and increase the incentives to produce the world’s most efficient, reliable cars and power plants, and electronics, and….

Funneling money into mortgage lending and housing etc does nothing except delay and divert from what we need to do. Extended unemployment benefits are what we need, not govt money to perpetuate some house price levitation.

[patientrenter]

Well, davelj, at last you have some realism in your outlook. And I’ll even agree with you that there is money to be made in some of the flavors of mortgage-backed securities for sale out there now. But the only reason is that the money will come from the government. Without government money pouring into the housing market, the CDOs and MBSs etc out there would mostly still be overpriced.

You draw a comparison between the current govt intervention and the Marshall Plan. I think the differences are bigger than the similarities. Enormous amounts of Europe’s physical capital was destroyed or neglected during WW2. There was still a lot left, and there was a large educated population with institutional capital like education, a tradition of law, etc. What was needed was the plugging of certain gaps, mostly filled by simply supplying specific missing equipment or financing specific needed construction projects.

To draw my own exaggerated analogy, consider a car plant producing Toyota Camrys very efficiently. (Europe before WW2.) Then remove all the welding equipment in the plant. (WW2) The plant produces nothing of any high value or worth. (Europe right after WW2.) Now give the plant welding equipment and help them install it. (Marshall Plan.) Result is a highly productive plant once again. (Europe after Marshall Plan.) Lot of oversimplifications, but you get the idea.

Our current economic problem is not that our capacity to shop or buy more houses or build more retail is devastated unnecessarily by some external force, and we just need to restore it through the power of govt spending. Instead our problem was that were were shopping too much, and buying too many houses, and building too many retail stores… What we need is to reduce incentives for people to do those things, and increase the incentives to produce the world’s most efficient, reliable cars and power plants, and electronics, and….

Funneling money into mortgage lending and housing etc does nothing except delay and divert from what we need to do. Extended unemployment benefits are what we need, not govt money to perpetuate some house price levitation.

[patientrenter]

Well, davelj, at last you have some realism in your outlook. And I’ll even agree with you that there is money to be made in some of the flavors of mortgage-backed securities for sale out there now. But the only reason is that the money will come from the government. Without government money pouring into the housing market, the CDOs and MBSs etc out there would mostly still be overpriced.

You draw a comparison between the current govt intervention and the Marshall Plan. I think the differences are bigger than the similarities. Enormous amounts of Europe’s physical capital was destroyed or neglected during WW2. There was still a lot left, and there was a large educated population with institutional capital like education, a tradition of law, etc. What was needed was the plugging of certain gaps, mostly filled by simply supplying specific missing equipment or financing specific needed construction projects.

To draw my own exaggerated analogy, consider a car plant producing Toyota Camrys very efficiently. (Europe before WW2.) Then remove all the welding equipment in the plant. (WW2) The plant produces nothing of any high value or worth. (Europe right after WW2.) Now give the plant welding equipment and help them install it. (Marshall Plan.) Result is a highly productive plant once again. (Europe after Marshall Plan.) Lot of oversimplifications, but you get the idea.

Our current economic problem is not that our capacity to shop or buy more houses or build more retail is devastated unnecessarily by some external force, and we just need to restore it through the power of govt spending. Instead our problem was that were were shopping too much, and buying too many houses, and building too many retail stores… What we need is to reduce incentives for people to do those things, and increase the incentives to produce the world’s most efficient, reliable cars and power plants, and electronics, and….

Funneling money into mortgage lending and housing etc does nothing except delay and divert from what we need to do. Extended unemployment benefits are what we need, not govt money to perpetuate some house price levitation.

[patientrenter]

Well, davelj, at last you have some realism in your outlook. And I’ll even agree with you that there is money to be made in some of the flavors of mortgage-backed securities for sale out there now. But the only reason is that the money will come from the government. Without government money pouring into the housing market, the CDOs and MBSs etc out there would mostly still be overpriced.

You draw a comparison between the current govt intervention and the Marshall Plan. I think the differences are bigger than the similarities. Enormous amounts of Europe’s physical capital was destroyed or neglected during WW2. There was still a lot left, and there was a large educated population with institutional capital like education, a tradition of law, etc. What was needed was the plugging of certain gaps, mostly filled by simply supplying specific missing equipment or financing specific needed construction projects.

To draw my own exaggerated analogy, consider a car plant producing Toyota Camrys very efficiently. (Europe before WW2.) Then remove all the welding equipment in the plant. (WW2) The plant produces nothing of any high value or worth. (Europe right after WW2.) Now give the plant welding equipment and help them install it. (Marshall Plan.) Result is a highly productive plant once again. (Europe after Marshall Plan.) Lot of oversimplifications, but you get the idea.

Our current economic problem is not that our capacity to shop or buy more houses or build more retail is devastated unnecessarily by some external force, and we just need to restore it through the power of govt spending. Instead our problem was that were were shopping too much, and buying too many houses, and building too many retail stores… What we need is to reduce incentives for people to do those things, and increase the incentives to produce the world’s most efficient, reliable cars and power plants, and electronics, and….

Funneling money into mortgage lending and housing etc does nothing except delay and divert from what we need to do. Extended unemployment benefits are what we need, not govt money to perpetuate some house price levitation.

[patientrenter]

Allan from Fallbrook, I agree with your point of view.

Economists try to measure our material wellbeing. After a few decades, they came up with simple, crude measures like GNP and GDP. After a while, people forgot that they were crude and oversimplified, and the general public – and even many economists – came to accept them as gospel. Now almost everyone actually believes that these measures are true, accurate indicators of wellbeing. Real people’s real activities are redirected to boost these measures. I think, Dave LJ, you may have fallen for this trap.

Consider an economy that is humming along with people making cars and food etc for each other, with a GDP per capita of $50,000. Now you change things, in the New Economy: You force everyone to spend the same time every day digging and refilling holes as they spend at work, and you pay them $25,000 a year for that. People can only produce half as much in useful goods as before, but the New Economy shows a GDP per capita of $50,000, same as before.

What’s happening recently in our housing and asset markets in general is a very loud signal to us that we need to change what a lot of people do for a living. But in response, people who would lose in such a change spin a yarn that if we just boost this GDP per capita number, we’ll be fine. Even if that number is artificially raised by paying people to do things that society at large doesn’t want them to do any more. All this is doing is misleading people who need to change that change is unnecessary. And penalizing people who made good choices in order to transfer real wealth to people who made bad choices. This is not a good way to encourage people to make good responsible choices in the future.

Merry Christmas!

[patientrenter]

Allan from Fallbrook, I agree with your point of view.

Economists try to measure our material wellbeing. After a few decades, they came up with simple, crude measures like GNP and GDP. After a while, people forgot that they were crude and oversimplified, and the general public – and even many economists – came to accept them as gospel. Now almost everyone actually believes that these measures are true, accurate indicators of wellbeing. Real people’s real activities are redirected to boost these measures. I think, Dave LJ, you may have fallen for this trap.

Consider an economy that is humming along with people making cars and food etc for each other, with a GDP per capita of $50,000. Now you change things, in the New Economy: You force everyone to spend the same time every day digging and refilling holes as they spend at work, and you pay them $25,000 a year for that. People can only produce half as much in useful goods as before, but the New Economy shows a GDP per capita of $50,000, same as before.

What’s happening recently in our housing and asset markets in general is a very loud signal to us that we need to change what a lot of people do for a living. But in response, people who would lose in such a change spin a yarn that if we just boost this GDP per capita number, we’ll be fine. Even if that number is artificially raised by paying people to do things that society at large doesn’t want them to do any more. All this is doing is misleading people who need to change that change is unnecessary. And penalizing people who made good choices in order to transfer real wealth to people who made bad choices. This is not a good way to encourage people to make good responsible choices in the future.

Merry Christmas!

[patientrenter]

Allan from Fallbrook, I agree with your point of view.

Economists try to measure our material wellbeing. After a few decades, they came up with simple, crude measures like GNP and GDP. After a while, people forgot that they were crude and oversimplified, and the general public – and even many economists – came to accept them as gospel. Now almost everyone actually believes that these measures are true, accurate indicators of wellbeing. Real people’s real activities are redirected to boost these measures. I think, Dave LJ, you may have fallen for this trap.

Consider an economy that is humming along with people making cars and food etc for each other, with a GDP per capita of $50,000. Now you change things, in the New Economy: You force everyone to spend the same time every day digging and refilling holes as they spend at work, and you pay them $25,000 a year for that. People can only produce half as much in useful goods as before, but the New Economy shows a GDP per capita of $50,000, same as before.

What’s happening recently in our housing and asset markets in general is a very loud signal to us that we need to change what a lot of people do for a living. But in response, people who would lose in such a change spin a yarn that if we just boost this GDP per capita number, we’ll be fine. Even if that number is artificially raised by paying people to do things that society at large doesn’t want them to do any more. All this is doing is misleading people who need to change that change is unnecessary. And penalizing people who made good choices in order to transfer real wealth to people who made bad choices. This is not a good way to encourage people to make good responsible choices in the future.

Merry Christmas!

[patientrenter]

Allan from Fallbrook, I agree with your point of view.

Economists try to measure our material wellbeing. After a few decades, they came up with simple, crude measures like GNP and GDP. After a while, people forgot that they were crude and oversimplified, and the general public – and even many economists – came to accept them as gospel. Now almost everyone actually believes that these measures are true, accurate indicators of wellbeing. Real people’s real activities are redirected to boost these measures. I think, Dave LJ, you may have fallen for this trap.

Consider an economy that is humming along with people making cars and food etc for each other, with a GDP per capita of $50,000. Now you change things, in the New Economy: You force everyone to spend the same time every day digging and refilling holes as they spend at work, and you pay them $25,000 a year for that. People can only produce half as much in useful goods as before, but the New Economy shows a GDP per capita of $50,000, same as before.

What’s happening recently in our housing and asset markets in general is a very loud signal to us that we need to change what a lot of people do for a living. But in response, people who would lose in such a change spin a yarn that if we just boost this GDP per capita number, we’ll be fine. Even if that number is artificially raised by paying people to do things that society at large doesn’t want them to do any more. All this is doing is misleading people who need to change that change is unnecessary. And penalizing people who made good choices in order to transfer real wealth to people who made bad choices. This is not a good way to encourage people to make good responsible choices in the future.

Merry Christmas!

[patientrenter]

Allan from Fallbrook, I agree with your point of view.

Economists try to measure our material wellbeing. After a few decades, they came up with simple, crude measures like GNP and GDP. After a while, people forgot that they were crude and oversimplified, and the general public – and even many economists – came to accept them as gospel. Now almost everyone actually believes that these measures are true, accurate indicators of wellbeing. Real people’s real activities are redirected to boost these measures. I think, Dave LJ, you may have fallen for this trap.

Consider an economy that is humming along with people making cars and food etc for each other, with a GDP per capita of $50,000. Now you change things, in the New Economy: You force everyone to spend the same time every day digging and refilling holes as they spend at work, and you pay them $25,000 a year for that. People can only produce half as much in useful goods as before, but the New Economy shows a GDP per capita of $50,000, same as before.

What’s happening recently in our housing and asset markets in general is a very loud signal to us that we need to change what a lot of people do for a living. But in response, people who would lose in such a change spin a yarn that if we just boost this GDP per capita number, we’ll be fine. Even if that number is artificially raised by paying people to do things that society at large doesn’t want them to do any more. All this is doing is misleading people who need to change that change is unnecessary. And penalizing people who made good choices in order to transfer real wealth to people who made bad choices. This is not a good way to encourage people to make good responsible choices in the future.

Merry Christmas!

[patientrenter]

It’s way too early for a sustained rebound, esmith. We are just 2-3 years beyond the real estate peak, and the stock market was at a peak just a year ago.

But thanks for waking people up, even if only for a false alarm!

[patientrenter]

It’s way too early for a sustained rebound, esmith. We are just 2-3 years beyond the real estate peak, and the stock market was at a peak just a year ago.

But thanks for waking people up, even if only for a false alarm!

[patientrenter]

It’s way too early for a sustained rebound, esmith. We are just 2-3 years beyond the real estate peak, and the stock market was at a peak just a year ago.

But thanks for waking people up, even if only for a false alarm!

[patientrenter]

It’s way too early for a sustained rebound, esmith. We are just 2-3 years beyond the real estate peak, and the stock market was at a peak just a year ago.

But thanks for waking people up, even if only for a false alarm!

[patientrenter]

It’s way too early for a sustained rebound, esmith. We are just 2-3 years beyond the real estate peak, and the stock market was at a peak just a year ago.

But thanks for waking people up, even if only for a false alarm!

[patientrenter]

I know there are people who oppose the bailout for the automakers, and others who support it. My question is not about that. I want to know what you thought was going to actually happen in the end.

Did anyone on this board believe that the automakers would not be bailed out in the end?

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