The Shuffle

“Actually” means “fair” market value, what most people would pay for the house, realistically. Do you remember the 2008 housing market crash?

[youtube]https://www.youtube.com/watch?v=MesrrYyuoa4[/youtube]

The prices of houses, $600,000 were shit. During the last 30 years, contractors around the country were building “McMansions” with huge square footage, in places, towns, and areas that could not afford them. The mortgages made for these houses were never intended to be paid off, because the banking system was being rewarded and paid with fees for setting it all up. That $600,000 house was worth half its value, $300,000, or less. In many cases the houses are worth nothing at all. Because nobody can afford them.

Because nobody can afford them.

And why can’t anybody afford them, whether they are $600,000 or $300,000 ? Because the u.s. middle class disappeared, and is currently being replaced still, with minimum wage, part-time jobs, with no raises, no benefits, and no health insurance.

I’ve been reading articles this last year about the job market. Some articles say “there’s too many jobs and not enough workers”. But then you look into the details. Employers have unrealistic standards, shit wages, and practically demand that average people revolve their entire lives around a shit job with shit wage. Of course people won’t take the job, or, won’t hold it for very long. Turn-over is a problem for both employers and employees. Most companies are stupid in this regard. And jobs in large cities are categorically different than jobs in small towns or out in the country. Therefore many of the sweeping generalizations do not apply, except a few.

The rich have gotten wealthier, gutting the middle class, by digging into such markets as “the housing market” and its 2008 crash, or the tech market and “the tech bubble” in 2000.

The only hope most Americans have, then, is hyper-inflation to reset all debts. And if that happened, massive system failures would occur, as again, the rich and top 1% would be the first ones to transfer all their wealth to a different currency than the u.s. dollar. And if the u.s. dollar collapsed, the country would be rolled back a century, all “progress” gone and evaporated over night.

Fake wealth, propped up on the fake value of a dollar. Again, what is the real value? What if the real value of the u.s. dollar is 50% of what people trade it? What if nobody wants u.s. dollars? What if the u.s. dollar is not worth kindling your fire place? There are answers to these questions. Do foreign banks, countries, and people want u.s. dollars? With China, the answer is ‘No’. China demands interest payments on their loans to the u.s. to be paid for with gold. Real currency, real value. Something more substantial. Chinese then gain double on their loan, by demanding representation of value.

With gold, things are clearer. It becomes obvious who is inside and outside “the system”, the markets, the governments, and the banks.

Most or all other problems in the u.s. including this “shuffling” of people migrating between u.s. states.

When the economy down-turns, people quit moving and migrating. And they begin investing in their own families and kin. Because at least then, people know where their money and investments are going, rather into corporations, into banks, or into the government.

Side-point:

Facebook.com is not worth $1,000,000,000.00. It’s worth 50% or less. Why? Because internet websites and such, anything dominated by marketing and advertisement, is false-value. A “commercial” is worthless. It isn’t real. It isn’t based on reality. These are images and propaganda, almost always, used to push people further into debt, by stimulating people to buy shit they don’t need, and probably don’t even want. Commercials have a net negative value in markets.

All marketing, commercial, and advertising, take that out of the market, and how much of America’s “value” is lost? How much value is true versus how much is false? How much value is real versus unreal?

Are you going to take a $1,000,000.00 loan out to run a few commercials on television and the internet? To sell some shampoo, or to promote the 2017 Ford truck, which is also worth half its advertised value? Waste of money.

Carleas wrote

Yes. Corrupt companies who only care about their shareholders and upper management need to croak.

I can accept this. What you describe afterward, though, is a case in which people bought houses at one price, and then something changed that affected the actual value of the house. A house might be worth $600k when credit is flowing, because that means more buyers who can borrow more money to buy a house. The same house is then actually worth less when the market changes, credit dries up, and fewer people are buying. What you described is an actual change in value caused by an exogenous change in the market context, which affects the liquidity of the house as an asset. The fair market value of the house changed.

I don’t think this is true. I’m under the impression that migration increased significantly during the Great Depression. Do you have a good source on this question?

That is not incompatible with the claim that a significant portion of the US economy is tied up in those companies, and that allowing them all to croak at once would also lead to the croaking of a significant portion of the US economy, which would have hurt everyone.

I basically think there’s a middle ground here. I think it’s possible to defend the bailouts and QE, and simultaneously think that we should have (and still should) break up any companies and industries that could put us in a position like that.

A lot has changed since the Great Depression, obviously. Most property is bought and taken up in the u.s. now. Cheap land is rare and becoming rarer with each passing year. So the era is different and un-comparable. During the Great Depression, poor farmers were forced off their lands, and moved, because they had nothing to lose. Today’s setting is completely different.

It’s common sense. When people don’t have much money, and limited options, they return home when desperate. The “boomerang kids” phenomenon of the Millennial generation returning to home after college with $30,000-$150,000 debts. They have nowhere to go. Now, today’s current migrations maybe because of jobs. If a great job opens up across the country, then yes, that may merit a move. But that’s rare, not common.

I remember during the 2010s hearing about individuals needing to commute 3 hours, one way, 3 hours back, to keep jobs. That’s desperation and bad sign of times ahead.

A $100,000 salary job is becoming a gold mine, harder to find and more difficult to gain access to. The baby-boomers are hanging onto all the high salary positions, unwilling to give them up, and keep working into their 70s and 80s.

The wealth is stagnating and not being passed around anymore, like all previous decades.

Oh, you didn’t pay $5 for a gallon of gas or pay 25% increases in all food costs due to shipping cost increases?

Urwrong, I basically agree with what you said, but I also think it supports my point: a poor economy doesn’t drive a lack of migration. I think the generational effects you point out are a large part of that, because in order for young adults to go back home, their parents have to well enough off that there’s a home to go to.

But it’s still the case that for most of these people, moving would improve their prospects of getting a job. Particularly if your local job economy sucks, it’s very unlikely that you already live in the best local job market. There are certainly many places in the country where there plenty of jobs. But it’s hard to move there when you don’t know anything about the cities, don’t have any connections to them, and have never really left home or spent much time with people from somewhere else.

I don’t follow. Are you saying price increases are inconsistent with the claim that things would have been worse if every major bank had gone bankrupt within a year? I’m not saying there wasn’t a recession, I’m saying that it was not as bad as it could have been. Do you disagree with that?

“QE pulled us out of recession”, wow. I mean really. Just wow.

1. You’re misquoting me (and not just because you dropped the word “the”). That was the first half of a conditional statement: “If QE pulled us out of the recession…”

2. I’m open to argument or evidence that QE wasn’t an important and effective part of the response to the recession. “Just wow” is neither.

The fact you framed it as a hypothetical doesn’t change that it’s the claim you’re making. It just allows you to make the claim more subtly, so as to blunt the argumentative edge of the position contrary to your own. People fall for this tactic a lot, I’ve noticed. NPR is one of the masters of it. I notice you also did it during the discussion on Shakespeare in the Park, holding back from openly making the claim that is clearly the claim you are actually pushing. But with me, I will always go right to the actual point being made, sophistry aside.

And to claim that QE 1-4 has been anything but an unmitigated disaster for the American people, but a huge win for banks and big government, is crazy. The game is rigged, and anyone who defends it either is protecting their own interest in it being rigged or is simply following the status quo narrative because that’s easier than thinking against the grain.

I think framing a claim as a conditional is useful and valid. In this case, Otto scoffed at the idea that QE has been successful and was good for non-bankers. I asked him what he’s comparing against, and then offered two conditional statements, to say, “if this is the context, then your implication that QE has been unsuccessful or bad for ‘main-street’ is wrong”. In context, they aren’t assertions, they are demonstrating that it matters what baseline we’re using to evaluate a claim like “QE has not been successful”. “Stabiliz[ing] housing prices” can still leave a lot of people in a shitty place, with houses worth much less than they paid for them, while still being a lot better for those people than some alternative.

And it’s a legitimate response to say, “I agree with the conditionals but I reject the antecedent”, and it’s useful because it moves the conversation to what the antecedent should be, e.g. without QE, X would be the case, and with QE, Y is the case, and therefore QE is unsuccessful.

I read Otto to be saying more or less that QE didn’t fix everything. I agree. I agree that the US economy isn’t in an ideal state, there’s a lot wrong with it, and the banking system is part of what’s wrong with it, and I lean towards agreeing that QE exacerbated certain problems with the banking system (but I haven’t looked into it and my belief is only weakly held). I don’t see any of these claims as incompatible with the claim that QE was successful, because I understand the goal of QE to be to inject liquidity in the market in order to keep consumer interest rates low. It has done that, and even if the benefits have been unequally distributed, the result for the average American has been net positive.

Can you provide evidence or argument beyond “just wow” to contradict any of that?

Reminder:

When people are suckered into a $600,000 mortgage on a $300,000 house, and after they spend 25 years paying it down by half, they still do not own the house.

That’s where America is at right now. The country doesn’t even own its own assets. The banks do.

How much actual wealth do Americans even own, as a percentage of the national debt and GDP??? What I mean, how many American assets are paid-off and not in debt?

25% maybe??? I think I’m being generous in this estimation.

Reminder:

A college education is not an asset. It is not a real value. It is not materialized. It is not a thing. And in most cases, you cannot resell it.

And why are we charging American youth to be educated in the first place? Isn’t it an obligation of parents, of teachers, of professors, of society, to educate their youth for free?

It’s like a parent charging his or her biological child rent after 18 years, for being born. “I brought you into this world, but you owe me $500 rent per month, for 18 years.”

Fucked. Up. You people are sick, and make me sick.

You owe me $100,000 for being born.

What kind of interest should we tack onto that? 25%?

You owe me $125,000 for being born. Fuck you, pay me.

…doesn’t sound like a “free society” to me? Just a society of fraud and selling each other out. A disloyal nation.

Yeah Ur, it is very sickening. Leftist ideology has cancer-ravaged the morality of the west. We now use something as valuable and wonderous as education or owning your own home and land as an excuse to force permanent debt-slavery on each other. And most people don’t even bat an eye, they don’t even see the utter irrationality and immorality, the pure insanity, of it all. What the fuck has become of us.

Carleas, I want to have direct talks about the truths here. I don’t want to merely form hypotheticals like this is an abstract academic jerk session, with no real consequences. If you believe QE is good, say so. If you believe QE is bad, say so. Then we can War the respective ideas and see which comes out on top.

And I missed if you responded to the article I posted about the Fed Reserve. We can’t talk about the housing bubble or the economy or jobs and wages or even QE and debt without also taking seriously and deeply about the Fed Reserve-- what is it, how does it operate, who owns it, what are its effects.

I already did, I posted not only some of my thoughts but also an article on the Fed Reserve and QE. If you could kindly reply to the substance of that article, we might start to get somewhere.

Here it is, sandiegofreepress.org/2014/07/d … int-money/

If there is any kind of solution or hope, then I guess it is familiarity. People need to begin to bond and care about each other, at least, enough to educate and provide care for each other. If it is only a nation of back-stabbing and throwing each-other a bus, then it is not a society at all. That is anti-society, anti-social. Families are defined by their ability to both care for their own young, and educate, which is implied by “caring”. It seems noxious and cancerous to me to demand debt from unborn nations, from future children.

However these are slave societies at the core. The goal is, specifically, to enslave the upcoming X amount of generations. The more generations ahead they can enslave, they will. This is not a “free” society.

Debt and freedom are antonyms.

Yes and that is another reason why generational debt is so dangerous. We all inherit a “debt” to the society and culture we are born into and that helps us grow up and educates us, but when that symbolic debt becomes literally $300,000 (your share of the national debt in the US, if you were born today) that is simply madness.

Anyone who can’t see how big government tyrannists want to enslave as many X future generations as possible, as you say, is simply not wanting to see the truth. I’m very tired of dealing with non-philosophers. People who do not want to think are the number one plague upon humanity. And then such people rise into positions of power, because power rather than truth is their god.

Hypotheticals help get at which truths matter. For example, the truth of whether QE was good depends on the baseline; we have to explore the hypothetical world in which we didn’t implement QE and think about how the world would have been different, in order to talk about the truth of what QE did. There’s no getting around the hypotheticals. That’s what I was doing when I used the hypothetical: asking Otto for what alternate reality he’s comparing against when he says QE wasn’t a success. If the recession is still ongoing in the alternate world, then QE was probably good, even if this world sucks.

I will, but I have to say that I resent it a bit. I’m having a conversation with you, not the author of this article. If you understand what the article is saying, it would be better that you present the ideas yourself in a way that directly responds to what I’ve said so far. I think you would agree that it would not be a good faith reply for me to just send you an article that takes the opposing position.

And it’s not even as though this article is more authoritative than you could be: it’s not a more trustworthy source than you are (if only because I’ve never heard of it), it’s written by a non-expert like us, and, where it cites references, they are popular articles, blog posts, and shaky sources like the conspiracist “Center for Research on Globalization”. That said, I’ll take factual claims as hypothetical until better supported, and take the arguments as saying, “if these things are true, then we should conclude”.

Moving on:

I agree with Lawrence’s claim in paragraph 2 that the rationale for QE was to lower interest rates, and in paragraph 5 that low interest rates stimulate the economy by making it easier to buy a home or car. I disagree, however, that this is somehow harmful to consumers. Cheap credit is valuable to the borrower. When you buy a $300k dollar house, you get $300k of value from that house from day 1. If you lower the down-payment and the mortgage interest, you make it cheaper to get that value. That’s a benefit to the person purchasing the home, even if they will owe money on it for the next 30 years.

And that lower cost ripples through the economy. Lower interest rates on small business loans mean lower operating costs of running a small business, which means lower overhead and lower prices for consumers. If people can get a car easier, they can access a larger job market, they may spend less time commuting (depending on how they were getting around before). People who already own houses see their home value increase, meaning they can refinance at take advantage of lower rates as well. Home sales mean work for laborers. Etc. etc.

Credit is valuable, so conceding that credit gets to consumers (as Lawrence does) is the same as acknowledging that QE is putting money in consumers’ pockets (contrary to what Lawrence says in paragraph 4, and again in paragraph 13). Lawrence treats the financial as though it’s part of a completely different economy, as opposed to a part of the same economy that the average consumer experiences and buys from and is employed by.

And I’ll agree that it isn’t ideal, but that isn’t the same as saying that it isn’t effective. Lawrence concedes that it is buoying home prices. It’s doing that by stabilizing the prices of mortgage backed securities, i.e. giving money to banks, but the effect is also to stabilize home prices and prevent more people from being underwater and foreclosing. Lawrence seems to acknowledge the vicious nature of the problem in paragraph 17, where he points out that decreasing consumption would be bad for everyone. If that’s true, and QE is currently preventing that from happening, that seems like a concession that QE is better than the alternative for everyone, not just for bankers and the rich.

It is not inconsistent to claim that this program benefits the wealthy, even that it benefits the wealthy more than it should, that in increases inequality, and yet that it is better than the alternative (because the alternative was really, really bad).

Much of the article is apocalyptically speculative (e.g. paragraphs 21-26). The claim that the Fed will never remove debts from its balance sheet (paragraph [size=100]8[/size]) is unfounded, even assuming that his numbers are right. The program began as a response to a recession, it was targeted at stabilizing the market. It has been less than a decade since everything went to shit, and it’s unreasonable to judge the long term future of a program based on what has been done during and immediately following a recession. An alternative prediction is that the program will continue until the economy is strong, and the Fed will continue to taper and slowly raise rates to prevent the economy from overheating, and do it gradually enough so that there is no major shock to the economy along the way.

And the suggestion that a public bank, run by the people who currently run the federal government, would be better than an independent, apolitical Fed is at best uncertain. There are problems with the structure of the Fed, but so too are there problems in every branch of government, and making the central bank subject to the political whims of Congress does not seem like an obvious solution to making it a more just and equitable body.

Handing more money and power to banks is not a wise investment in the long-run as banks are private institutions and beholden to share-holders, not the general public, and not the american people. During the 2008 housing market bubble crash, the Government should have stepped in and seized at least one major bank if not more. They sort of did, but didn’t have the balls to do so at the time. Instead they worked out “deals” behind closed doors, which the general public never heard much about.

And people doubt and distrust the Federal Reserve Bank, sometimes for good reason, although the average consumer doesn’t understand macro-economics or the exact role of the Fed.

My point is that many of the deals are not made in the interest of average joe-schmo, but rather to add a million dollar to the bank account of private share-holders.

However that may very well be “the way of the world”.

K: it seem that you are demanding something from others that you are not demanding of yourself…
you call for caring about others… yet your words certainly aren’t about caring about others…
everyone else is wrong but you…you have shown no compassion of any kind for anyone…
everyone is naïve and a simpleton but not you…your philosophy seems to be…
do as I say, not as I do… and this is common in right wing types…holding everyone else
accountable but not themselves…want examples, see any GOP politician like 45 or Bush jr.
Ryan or McConnell or Pence…they all want to hold everyone accountable but themselves…

Look in the mirror before you accuse everyone else of being damaging…

What have you done to improve or help society?

Kropotkin