For several decades, since the Regan era at least, those of industry and wealth had a powerful tool to get what they wanted.....
Jobs.
"Cut our taxes" they promised, "and we'll use that money to create more jobs."
"Cut out the Environmental stuff, so we can make more money and create more jobs."
"Buy us a football stadium, and a team, and we'll bring in more jobs."
My favorite--"We are closing this plant and cutting back 20,000 jobs in order to be stronger and have the resources to create new jobs."
And we of the ever shrinking ever poorer middle class shook our heads and gave them what they wanted, for without our jobs what were we?
Poor.
Besides, what could we do? They proved that this was not a scam or a plot. It was only basic capitalism, totally un-blamable, un-changeable market mechanisms.
Today that can all change.
Today the middle class has its own phrase of power. If you dare wield it, then untold is your position in the future.
Are you ready?
Here it is:
"If you do that I can't make my mortgage payment."
or
"I'll have to default on my mortgage."
And all those of wealth and power will realize that if you too default on your home loan, you too will add to the chaos and collapse. Their fortresses of economic power will shudder and sink with every default.
What are they without their securities and property values?
Poor.
Next time a large company announces plans to cut thousands of jobs, send the CEO and the Board of Directors a note saying, "without my job I won't be able to make my house payments. Neither will one out of every 10 employees you lay off. What will that do to your net worth?"
Will this threat, this weapon of the overwhelmed homeowner, actually work?
Will it convince Pharaceutical Companies that maybe 3000% increases in cost will have some bad effects on their stock holders?
Will it convince your insurance company that the $200/year raise in your health insurance has to come out of somewhere, and that somewhere is going to be out of the Mortgage, and that wave of defaulting mortgages will cost them a whole lot more than $200 per year?
And they really can't complain.
Its not a scam or a plot. It was only basic capitalism, totally un-blamable, un-changeable market mechanisms.
Posted by Pegasus (Member # 10464) on :
While I agree with the concept that you have put forth, it seems you are pitting long term thinking and indirect effects against short term thinking and direct effect to their bottom line. I don't think it's realistic to think that many corporations would be willing to risk their own profits and economic well-being to help keep the general economy afloat. I only wish it could be so.
Posted by MightyCow (Member # 9253) on :
Somehow you're going to force companies to make jobs by losing your home and helping bring about a recession?
Cutting off your nose to spite your face, I'd say.
Posted by MightyCow (Member # 9253) on :
If I read this correctly, then according to the U.S. Department of Labor, the current unemployment rate is less than 5%, and actually in the low range of the last 10 years of statistics.
That's because to be unemployed you have to be actively searching for a job. If you just gave up, then you're no longer unemployed.
Posted by fugu13 (Member # 2859) on :
There have been several studies, and while there are some less than optimal things about the employment situation unrevealed in the rate, increases people who could be but aren't looking for a job do not appear to be very large.
While the unemployment rate isn't as rosy as it looks, it is low, and it has been low for nearly the entire time since Reagan.
As for the shrinking middle class, you might be interested to note that the percentage of poor has not significantly increase, and that decreases in the percentage of middle class are almost exactly equal to increases in the percentage of upper class.
Posted by Synesthesia (Member # 4774) on :
quote:Originally posted by MightyCow: If I read this correctly, then according to the U.S. Department of Labor, the current unemployment rate is less than 5%, and actually in the low range of the last 10 years of statistics.
I don't think I believe them. At ALL. The fact is they measure unemployment based on how many people are filing unemployment claims. When they run out of unemployment they aren't counted. I'm getting close to that level.
I think supply side economics is not only illogical, but it has screwed us over for years into the future. It's like the pigs in Animal Farm stating they're eating all the milk and apples for the benefit of the other animals.
Posted by Dagonee (Member # 5818) on :
quote:The fact is they measure unemployment based on how many people are filing unemployment claims. When they run out of unemployment they aren't counted.
That's just not true.
Posted by Blayne Bradley (Member # 8565) on :
*c'mon student loans*
*crosses fingers*
*3500$ free money ftw*
Posted by mr_porteiro_head (Member # 4644) on :
What you have described is akin to the Prisoner's Dilemma, where people tend to try to get others to act responsibly, but then go for the quick buck themselves.
Posted by rivka (Member # 4859) on :
quote:Originally posted by Blayne Bradley: *c'mon student loans*
*crosses fingers*
*3500$ free money ftw*
Loans are NOT free money, Blayne. You have to pay it back. With interest.
Posted by MightyCow (Member # 9253) on :
It's free if you default on the loans to "Stick it to the man."
I'm not sure why the "Middle Class" would want to hose the economy though. The middle class participates in the economy, own stock investments, keeps their money in banks, and so forth. If the economy tanks, we all lose. I'm not sure how the logic works that it will benefit people who are having a hard time finding a job.
Actually, I think I'll change that to "finding a job that they want." I see lots of job openings at menial or low-paying positions, but middle class people don't want to work in food service.
Posted by Pegasus (Member # 10464) on :
*c'mon TAX RETURN*
*crosses fingers*
*3500$ free money*
Gotta love how the government doesn't think you can hack it on a low-income so they send you extra money every year.
Posted by rivka (Member # 4859) on :
quote:Originally posted by MightyCow: It's free if you default on the loans to "Stick it to the man."
Not really. Then the costs are to one's credit, and quite possibly involve the government taking the money straight out of your paycheck. Not sure how it works in Canada, but pretty sure defaulting on student loans is as lousy an idea in the Great Frozen North as it is here.
Posted by fugu13 (Member # 2859) on :
m_p_h: interestingly, the prisoner's dilemma is no longer a dilemma when repeated. The nash equilibrium for a repeated prisoner's dilemma is cooperate, not defect (assuming any defection is punished with subsequent defection -- actually, there are even looser conditions, but that's the classic one).
Posted by mr_porteiro_head (Member # 4644) on :
In order for the cooperative equilibrium to be maintained, people have to continue to behave in ways that are in their long-term, not short-term interest. It's rare that people consistently behave in such a fashion for extended periods of time.
Posted by fugu13 (Member # 2859) on :
The greater payoff for cooperating can be maintained with a very short long term if things are structured properly.
That the equilibrium occurs with people who routinely defect in the non-repeated version, even when the repeats are somewhat widely separated, has been studied.
Posted by MightyCow (Member # 9253) on :
The prisoner's dilemma, and any consequent benefits or penalties, only work if the actions and consequences are well understood by all parties involved.
If some of the people think that their defaulting on loans has no effect on anyone else, they have no incentive to do anything beyond what they feel will be in their immediate best interests.
Posted by fugu13 (Member # 2859) on :
Your first sentence is true, though I would say 'sufficiently understood' instead of 'well understood' -- players with only partial knowledge can reach equilibria just fine, given the right partial knowledge.
The second is irrelevant for such scenarios. For the prisoner's dilemma, or the repeated prisoner's dilemma, or any other game to come to its Nash equilibrium (if one exists) only requires that people understand what is in their personal best interest, all else being equal, and act on it. It doesn't matter if they have no grasp of the impact on others, the equilibrium will still be reached.
Posted by MightyCow (Member # 9253) on :
Well, I'm sure some equilibrium will tend to be reached in any situation.
My intention, and perhaps I worded it incorrectly, was that many people don't understand the full implications of their actions, and so are not able to work in their best interests, only in what they imagine to be their best interests.
I suppose some of that is taken into account in the prisoner's dilemma, because one does not know how the other person will behave, so has to guess at what will be their best interests, given incomplete information.
Posted by Stormie (Member # 11545) on :
Dan_raven:
The rich and the wealthy are not a single entity. Threatening to NOT pay your mortgage might bother the banks, but it will not even illicit a yawn from the oil companies, the manufacturers and the drug companies.
Yes, all parts of the economy are interconnected. But, the short-sighted cannot see from one sector of the economy to the other. This has already been proved by the mortgage mess, but don't expect anybody to learn their lesson.
Posted by DevilDreamt (Member # 10242) on :
quote:Originally posted by Dan_raven: Today that can all change.
Today the middle class has its own phrase of power. If you dare wield it, then untold is your position in the future.
Are you ready?
Here it is:
I was honestly expecting "This is the communist revolution. Your wealth has been seized in the name of the people. Have a nice day."
Posted by MrSquicky (Member # 1802) on :
fugu, Do you have links to the equilibrium being reached in prisoners' dilemna situations? That's something I'm very interested in.
Posted by Sid Meier (Member # 6965) on :
quote:Originally posted by rivka:
quote:Originally posted by Blayne Bradley: *c'mon student loans*
*crosses fingers*
*3500$ free money ftw*
Loans are NOT free money, Blayne. You have to pay it back. With interest.
The Students loans package includes 3500$ (in my case as our income is 14k a year) of burseries which do NOT need to be paid back.
There is however another 3500$ in actual loans which have NO INTEREST for as long as I am a student for is the next year and a half.
I however have every intention to put the loan money in a savings account until I either need it or can pay it back.
Posted by fugu13 (Member # 2859) on :
That an equilibrium is reached in the basic prisoner's dilemma is the whole point of the prisoner's dilemma: the Nash equilibrium is not the best outcome.
So I'm guessing you're talking about the repeated prisoner's dilemma. The Wikipedia page on the Prisoner's Dilemma has a decent write up, with references where you can find more. The basic result has been known since the late 50's, but it became famous in a computer program contest that was held later, where programs that played using a "tit for tat" strategy were the most successful against other programs by far.
Posted by MrSquicky (Member # 1802) on :
Oh. Yeah, I know about that. You weren't talking about in real life then?
Posted by fugu13 (Member # 2859) on :
Ah, I see what you want. Lets see . . .
There's a summary paper that goes over a few pieces of evidence called "Rational Cooperation in the Finitely Repeated Prisoner's Dilemma: Experimental Evidence"
Elinor Ostrom has several papers that touch on other results or produce their own results, with a variety of practical applications. Heh, I just found one co-authored with the guy who taught me game theory.
This paper looks interesting, though I haven't read it: "Cooperation without Reputation: Experimental Evidence from Prisoner's Dilemma Games"
This one is interesting for showing how confusion about other players can lead to differing outcomes, but only under some conditions: Probability of reciprocation in repeated prisoner's dilemma games
Posted by Jhai (Member # 5633) on :
Mighty Cow, game theory as it is taught at the lower levels does require perfect information (you need to know everyone's payoffs for all possible actions), and rational actors (everyone has to act in their own best interests - but of course you can fiddle with payoffs to allow "own best interest" to be anything you like). These are strong assumptions, and, of course, they are very rarely actualized in the real world.
Game theory at the graduate level is a whole 'nother kettle of fish, though. Since the 80's micro theorists have been hard at work refining game theory equilibrium concepts - how to handle games with imperfect information, for instance, or what to do when there's a small possibility of an actor making a mistake. They've also been incorporating a lot of real world situations into games: people can be uncertain about their payoffs, how to handle repeated games where the actors change over time and information is lost (think presidents or CEOs), new players entering the field, etc
The math and mental acrobatics you need to do to deal with these complications is daunting, which is why you don't hear about it in your typical undergrad economics courses. But the basic ideas of game theory still hold up, and allow for a lot of better-than-a-crappy-Nash-equilibrium outcome that you see in the simpler form of the Prisoner's Dilemma. About the only requirement in game theory now is that everyone has to have some idea of what might happen - i.e. a probability distribution assigning the likelihood of a thing occurring. If you give up that you're just operating in a completely random world, and no systematic study could tell you anything. Luckily, we don't live in that world. Posted by MrSquicky (Member # 1802) on :
I've been researching psycho-mythological factors that alter cooperation in prisoner dilemma situations - basically if the stories (or rather the structure and themes of these stories) a society tells correlate with its members average performance in PD situations (pretty sure this is a yes in some cases) and what themes and structures are the the active ones (other than the obvious ones, I have no idea).
I'll check out the papers you recommended.
Posted by Dan_raven (Member # 3383) on :
I think I can solve some of this bickering with a few explanations.
1) I used the phrase "non-Blamable, Non-changeable market dynamics" for a reason. I am not saying that jobs were not created in the past few decades, or by the actions taken that benefited the wealthy. I am saying the opposite--that the market makes such creation an inevitable result of those actions. (Although I do think the efficiency of those actions come into question. Were there really that many jobs created by stagnating the Minimum Wage for several decades? But that is a debate for another thread.)
Similarly I did not say that people would chose to, or even threaten to default on their mortgages to negotiate better deals. I said that they would be forced to default. If you are going to lose your home to the evil money-men, this offers a hope that those vultures will choke on it.
2) This logical thinking of which you talk about is powerless against my use of Fear! Sure, not every rich and powerful interest in the world cares about mortgages and foreclosures. However the people behind those interests do. Once over $150,000 per year in salary, wealth is almost universally carried in two containers--Investments and Property. The Sub-Prime Debacle hits those two areas very hard, crashing the value of Property, and sinking the value of Investments ranging from pure Stocks to convoluted Hedge Funds.
Irrational decisions will come not from corporate spreadsheets which detail the best way to increase quarterly profitability. It will come from CEO's who are worried that their $5 Million home is suddenly worth about $200,000 and their Portfolio is dropped 12%. Should they increase company profits which will grant him a $1,000,000 bonus, or do something that will cut company profits, but may hopefully save him $10,000,000 in stock prices, especially when some postdated stock to the board will insure he gets that bonus anyway.
Fear will motivate them, if we spread the story that we are forced to default unless they cut us some slack.
If they think we are going homeless out of spite to get back at them, well then they are too dumb to stay in business long anyway.
3) Finally, this has a heavy dose of satire in it. Since the earliest days the bad guys have often been the evil banker threatening to foreclose on the family farm. From "The Perils of Pauline" to the "Blues Brothers" the Evil Bankers nefarious schemes to foreclose have been a hallmark of the "bad Guy".
Wasn't there a scene in Beowulf where some warrior yells, "So you've slain a Dragon. Big deal. I stopped Gorgon and McTavish from foreclosing on the Mead Factory."
Didn't Odysseus spend 7.5 years of his voyage at the Island of High Interest Rates?
Between befriending Enkido and slaying the Bull of Heaven, didn't Gilgamesh also "Lay siege upon the bakers of Tyr and free from them the mortgage upon Uruk's walls."
Ok, maybe not. But Norse Ragnarok is all about a Bank Foreclosure gone wrong. It seems Odin, with financial advisement from Loki, had his house built (Valhalla) on credit. It was in exchange for some chattel (the goddess Freya if I am correct). He then defaulted on that loan, and the Giants are striving to repossess it.
It seems this in not the first Sub-Rate Loan crisis that has been called, "The end of the World".
So we have a history of "evil bankers" gleefully threatening us with "Foreclosure" papers. Is it not fun to take a little laugh at the idea that some bankers now sit in fear of those papers?
Posted by fugu13 (Member # 2859) on :
Unfortunately, while there have been a large number of PD-related experiments . . . I think most of them have been on US populations (and of course, frequently college students).
Generally, if someone gets together funding to go do research abroad, they perform more complicated games .
Lets see . . . I saw a talk relatively recently that involved having villagers do a series of ecology games, also looking at the water regimes in the area. I'll try to remember who that was, some of their games might be equivalent to
Oh, someone else you might look at is Roy Gardner (the aforementioned guy who taught me game theory) and some of his papers on the former soviet bloc (and the soviet union), and perhaps also his fisheries paper.
Posted by Tatiana (Member # 6776) on :
Dan Raven, you are inspired! Posted by Jim-Me (Member # 6426) on :
quote:Originally posted by Dan_raven: Fear will motivate them, if we spread the story that we are forced to default unless they cut us some slack.
"Fear will keep the local systems in line... fear of this battle station."
Posted by Samprimary (Member # 8561) on :
Being broke as a joke and in default is the middle class revenge?
Ouch.
If that's successful revenge, give me failure.
Posted by kmbboots (Member # 8576) on :
Dan, we can't "threaten" the rich people. They don't care. They already got theirs.
Posted by Dan_raven (Member # 3383) on :
Km, the Sub-Rate Prime crisis has shown that too many of them have bet all of theirs on our ability to pay our bills and continue to increase the value of our homes. If we can't afford to do that, their multi-million dollar homes and $100/share Baers and Stearns stocks suddenly are not worth much. The fear is not that they got theirs--the fear is that we will make them loose theirs.
Sam, revenge, by its nature, is rarely successful or profitable, for either side. But hey, if you are going to lose it all, why not loose it in a way that lowers prescrion drug prices.
Posted by DarkKnight (Member # 7536) on :
quote: Dan, we can't "threaten" the rich people. They don't care. They already got theirs.
I had a very snarky response at first, but I am just going to ask for a bit of clarification. Are you sure the rich don't care? We all know there are a lot of poor and middle class that don't care about a lot of things as well. I'm curious about the 'They already got theirs' part too. Do you think they earned it or they just 'got it' in some way that is unfair? Or is it unfair they have things others don't? I've had some very interesting discussions with a bunch of 18 year olds about the 'rich' (meaning we the parents) and how we are holding them back (not allowing them to do everything they want or buy what they want with our financial backing)
Posted by MightyCow (Member # 9253) on :
Here's a question: Why do you think that it's appropriate or ethical to attempt to ruin other people's financial wellbeing? What if the shoe were on the other foot, and someone with less money than you felt that you are rich, and intended to devalue your life savings, or ruin your business?
Seems petty at best, marginally criminal at worst.
How do you imagine that this will lower the price of prescription drugs? Someone has to pay for that research. If the price goes down here, it goes up somewhere else, or we just stop getting new drugs.
Posted by The Rabbit (Member # 671) on :
The idea that only the US pays for drug research is a myth.
According the pharmaceutical companies, drug prices are higher in the US than in other countries (like Canada) to cover advertising costs and legal expenses.
What they don't say, is that their profit margins in the US are obscene. They can't get away with that in other countries because in a single payer system they compete with other companies based on cost.
Posted by The Rabbit (Member # 671) on :
quote:Dan, we can't "threaten" the rich people. They don't care. They already got theirs.
You missed the point "theirs" is invested in securities that include our morgages. When people default on their morgages, they loose theirs (or at least part of it).
And I don't think Dan was really suggesting that we all default on our morgages just to stick it to the rich.
I think he was pointed out that the current mortgage crisis demonstrates that we are all connected. Wealthy corporations can't ignore the plight of the workers without ultimately damaging their own interests as well. The middle class needs to make sure that message is heard loud and clear.
Posted by The Rabbit (Member # 671) on :
quote:If I read this correctly, then according to the U.S. Department of Labor, the current unemployment rate is less than 5%, and actually in the low range of the last 10 years of statistics.
The really important thing that is truly lost in employment statistics is the number of people who are under employed or whose jobs don't pay well enough to lift them out of poverty.
People don't need "jobs". People need food, shelter, medical care, beauty and something meaningful to do with their lives. Jobs that fill those needs are a good thing. Jobs that don't (and that is a growing percentage of jobs in America) aren't.
Posted by MightyCow (Member # 9253) on :
That may be the case, but I'm not sure how a depressed economy, failing banks, and an inability for average people to get home loans is going to help that.
Clearly there are some problems, but I don't see how Dan_raven's suggestion will do anything but harm.
Posted by orlox (Member # 2392) on :
[ March 27, 2008, 11:51 PM: Message edited by: orlox ]
Posted by rivka (Member # 4859) on :
quote:Originally posted by Sid Meier: The Students loans package includes 3500$ (in my case as our income is 14k a year) of burseries which do NOT need to be paid back.
There is however another 3500$ in actual loans which have NO INTEREST for as long as I am a student for is the next year and a half.
I however have every intention to put the loan money in a savings account until I either need it or can pay it back.
You're a bit confused. It's a student aid package, which includes both loans and grants. Apparently your loan is subsidized, which does NOT mean there is no interest; it means the government is paying that interest on your behalf.
All $7000 is supposed to be used exclusively for education-related expenses. I'm betting you had to sign something saying that was what you were spending it on. I'm sure the taxpayers will be thrilled you're getting money you don't need.
Posted by MightyCow (Member # 9253) on :
My college roommate always applied for as much loan as they would give him, and used the excess for "living expenses", which included a TV and sports equipment.
He had to pay it back with outrageous interest though, so I guess joke's on him.
Posted by Blayne Bradley (Member # 8565) on :
quote:Originally posted by rivka:
quote:Originally posted by Sid Meier: The Students loans package includes 3500$ (in my case as our income is 14k a year) of burseries which do NOT need to be paid back.
There is however another 3500$ in actual loans which have NO INTEREST for as long as I am a student for is the next year and a half.
I however have every intention to put the loan money in a savings account until I either need it or can pay it back.
You're a bit confused. It's a student aid package, which includes both loans and grants. Apparently your loan is subsidized, which does NOT mean there is no interest; it means the government is paying that interest on your behalf.
All $7000 is supposed to be used exclusively for education-related expenses. I'm betting you had to sign something saying that was what you were spending it on. I'm sure the taxpayers will be thrilled you're getting money you don't need.
Didn't have to sign a thing, my parents declare their income, I declare my income they calculate how much I can get and then give it to me.
No interest for as long as I am a student interest only starts to be applied after I finish my studies.
2000 of it is meant specifically for the purchase of computer equipment and periphirals.
Posted by steven (Member # 8099) on :
"I'm sure the taxpayers will be thrilled you're getting money you don't need."
Rivka, I understand that you only have two speeds, sarcastic and sarcastier.
HowEVer...I am more than happy to see Blayne get some extra cash. Really, how many threads about Blayne getting punched by his dad are you willing to read? With extra cash, he has no excuse not to move out, something which we'd all like to see. Si, senorita? I mean, whatever.
Posted by rivka (Member # 4859) on :
You'll note that he's not using it for that purpose. Too bad -- I would be absolutely thrilled if he did.
Posted by steven (Member # 8099) on :
quote from Blayne--"I'll probly be moving out this summer, me and a friend are conducting preliminary plannings now."
It pays to be thorough in one's research, although, as I said before, I do understand that you only have two speeds, sarcasm and sarcasmier. Posted by TomDavidson (Member # 124) on :
quote:Didn't have to sign a thing, my parents declare their income, I declare my income they calculate how much I can get and then give it to me.
I would be very surprised if you didn't have to sign anything. Otherwise you could simply pretend that you never received the loan in the first place.
Posted by Mucus (Member # 9735) on :
quote:Originally posted by steven: ... With extra cash, he has no excuse not to move out, something which we'd all like to see.
No excuses? Are we still talking about the same person?
Posted by Sid Meier (Member # 6965) on :
quote:Originally posted by rivka: You'll note that he's not using it for that purpose. Too bad -- I would be absolutely thrilled if he did.
And you'll note that the breakdown goes like this:
3500$ Bursuries. 2000$ Loans. 2000$ Specifcally applied for Computer Loans
The latter 2k is MEANT for purchasing a new computer.
Posted by rivka (Member # 4859) on :
quote:Originally posted by steven: quote from Blayne--"I'll probly be moving out this summer, me and a friend are conducting preliminary plannings now."
He has said this before, and as Squicky noted (although I'm not sure I agree with his assessment on why), there is no urgency.
Seems to be plenty of urgency on getting a cool gaming rig, though.
Also, I heard you the first time. Any particular reason you feel the need to beat this specific dead horse?
quote:Originally posted by TomDavidson:
quote:Didn't have to sign a thing, my parents declare their income, I declare my income they calculate how much I can get and then give it to me.
I would be very surprised if you didn't have to sign anything. Otherwise you could simply pretend that you never received the loan in the first place.
Among other problems.
quote:Originally posted by Sid Meier:
quote:Originally posted by rivka: You'll note that he's not using it for that purpose. Too bad -- I would be absolutely thrilled if he did.
And you'll note that the breakdown goes like this:
3500$ Bursuries. 2000$ Loans. 2000$ Specifcally applied for Computer Loans
The latter 2k is MEANT for purchasing a new computer.
At the time I posted, I don't think you had clarified that. Regardless, I have absolutely NO problem with you spending money on a computer for school. Or on a living space that is not your current bad situation! Quite the contrary -- I think both those things are perfect ways to spend the money.
I am concerned that you seem to think this money is less a tool to help with your education, and more free toys. I'd be thrilled if you took Scott's suggestion and proved me wrong. Posted by Sid Meier (Member # 6965) on :
Wasn't scotts suggestion building it myself? I am certain I said 2-3 times that I what I am doing, building it myself... with oversight from Dano but then again I am not spending money only to break it putting it together.
And yes it is school related that I can play any and all games every made possibly even crysis at darn near max settings on 1600by1000 somethingish resolution is merely an unattented unplanned for awesome side effect.
In all seriousness I got my original desktop some 5 years ago and have been repairing and updated it haphazardly since. That it can actually use the HD3870 (top of the line video card) is a surprise cosnidering they (MDG) said that my motherboard does not have PCIE, which it turns out it does.
Its old, it might go at anytime and I'm starting to notice the new visual studios are starting to get higher and higher resource requirements.
Posted by BlueWizard (Member # 9389) on :
I think Dan's point is that in today's global economy, you can't go around screwing the middle class and not expect it to have grave consequences.
The current mortgage problem is having world wide consequences, and because of this the middle class now has some defense, which is to say, yeh, go ahead and screw me, but remember when you screw me, you screw yourself.
In my opinion business and government are incredibly short sighted, and that is gradually coming to a head. It's nice to make money, but making money without regard for the consequences of doing so only hurts you in the long run.
So, yes, we can hold our mortgages up as a banner, and even as a form of blackmail, to the business world, to remind them that the days when the local 'evil' banker could foreclose on a home with no greater consequences to the community are gone.
Bankers made ridiculously bad loans to people with ridiculously bad credit, because the banker never intended to hold that loan. Bank loans are gathered together and sold as commodities on the open market. The banker made money on the load when he initiated it and when he sold he, then he was free and clear of the debt. What did he care if the individuals couldn't pay it back.
In today's world, 'good credit' has been turned on its head. Those with 'bad credit' are now considered to have 'good credit'. Those who manage their money poorly are the favored clients while those who manage their money wisely are considered deadbeats.
My brother who has always been very financially responsible was thinking of buying a house, so he closed all his misc credit cards, and paid down all his debt, and the bank who hardly lend him anything for his new home. My brother's friends were buried in student loan and consumer debt qualified for a much more expensive house, which they bought.
That's the problem with today's consumer economy, it is build on an illusion, a falsely interpreted illusion at that. Spend, spend, spend, consume, consume, consume, debt, debt, debt may be good in the short term, but it is a house of cards that is about to fall down, and when it does, the result is going to be worldwide disaster.
Some idiot-people who took out idiot-home-loans from idiot-bankers, really do need to default on their mortgages. They never could afford them, and they never should have had them. I see no reason for the taxpayer to subsidies idiots. They need to default, and let the idiot banker accept responsibility for their idiot decisions.
In the long run this actually helps people, because the price of hyper-inflated homes will come down closer to where they should be priced, and that will make homes more available to people who can really afford them.
Any time there is a real-state bubble, you can be absolutely certain, that bubble is going to burst. How could it not?
The whole 'flipping' of homes in Florida, frequently home that hadn't even been built yet, was nothing but a big pyramid scheme guaranteed to crumble under its own weight. The only hope you could have if your were 'flipping' home in Miami is that you were early enough in the pyramid that you made some money, even knowing that the people stuck at the end of the pyramid scheme, were going to be left holding worthless property and were, as a result, going to lose a fortune. Still I have no sympathy for any of them. They created a game of hyper-inflating home prices through rampant unscrupulous speculation, and I say, let them take the hit. Mean while, if I win the lottery, I'll be happy to go down to Miami and pick over the bones of their greed.
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