90% tax on bonuses....

[AgentDrazenPetrovic]

so Barney Frank essentially wants to insure insurance companies with a federal agency?

 

[barfo]

more last year right?

There were 25 in 2007, 3 in 2007, 0 in 2006.
Since it is only March, chances are good that 2009's number will end up being higher than 2008.

barfo

 

[AgentDrazenPetrovic]

so by this year, you mean 2008????

or how many banks failed in 08...i thought it was over 50.

 

[barfo]

There were 25 in 2008, 3 in 2007, 0 in 2006.
Since it is only March, chances are good that 2009's number will end up being higher than 2008.

barfo

sorry, typo in the original.

barfo

 

[AgentDrazenPetrovic]

sorry, typo in the original.

barfo

OMG, PRODUCER GETS PWNED!!!!!!

 

[maxiep]

The Cal-Trans workers are fucking lazy. It took them like 2 years just to add a lane of traffic each way on a road near my house, they clogged up traffic everyday...many days they didn't even work, they just left it there.

What I mean is, infrastructure projects are temp work. They have a beginning and an end point. I'm more interested in job creation, ones that don't end and directly and positively impact the GDP.

As for the reasons roadways often look like they're done but remain unused, there could be a simple explanation. Concrete has a 28-day cure period. If you don't give it that time to set, you end up with a set of gutters in each lane where the cars drive. That being said, I agree that most road workers don't work all that hard.

 

[blazerboy30]

Therefore... building roads is bad?
barfo

Building roads isn't bad. But the way our government typically does it is bad. Typical road projects always seem to take years, and seem so incredibly inefficient, wasting so much of taxpayers money.

The frustrating thing is that we have proof that when necessary, the government can make these things happen MUCH faster and MUCH more efficiently.

For example, when the SF Maze collapsed in 2007, the government started an incredible bidding competition, offering the incentive of $200k for every day before schedule the project was finished (and $200k penalty for not meeting the bid date). The winning bidder bid ~$875k to finish the project while Caltrans was estimating $5.2MILLION.

They finished in 25 days.

 

[barfo]

What I mean is, infrastructure projects are temp work. They have a beginning and an end point. I'm more interested in job creation, ones that don't end and directly and positively impact the GDP.

Any one road project has a beginning and an end (although I agree with the other posters that the end never seems to come fast enough). But there are lots and lots of potential road projects - we've been deferring paving and bridge projects for years and there is quite a backlog.

barfo

 

[maxiep]

Any one road project has a beginning and an end (although I agree with the other posters that the end never seems to come fast enough). But there are lots and lots of potential road projects - we've been deferring paving and bridge projects for years and there is quite a backlog.

barfo

And do those positions grow the GDP? And don't give me this, "well, we need smooth roads, blah, blah, blah...". I'm talking about positions that are more than maintenance. There are line positions and staff positions. Being on a road crew is a staff position. If you want to grow an economy, increase the number of line positions.

 

[barfo]

And do those positions grow the GDP?

I would think so. The road crew spends their paychecks on beer and lottery tickets, and that money flows onward.

And don't give me this, "well, we need smooth roads, blah, blah, blah...".

I won't give it to you. We can all buy hummers so we don't get stuck in the potholes.

I'm talking about positions that are more than maintenance. There are line positions and staff positions. Being on a road crew is a staff position. If you want to grow an economy, increase the number of line positions.

Somebody has to do the grunt work. We can't all be investment bankers.

barfo

 

[MARIS61]

And do those positions grow the GDP? And don't give me this, "well, we need smooth roads, blah, blah, blah...". I'm talking about positions that are more than maintenance. There are line positions and staff positions. Being on a road crew is a staff position. If you want to grow an economy, increase the number of line positions.

So by "line position" you are referring to someone who gets paid a lot to do very little actual work?

 

[maxiep]

I would think so. The road crew spends their paychecks on beer and lottery tickets, and that money flows onward.

That's an interesting skewing of the velocity of money argument. Unfortunately, the dead weight loss associated with such an expenditure more than outweighs the spending those road workers generate.

I won't give it to you. We can all buy hummers so we don't get stuck in the potholes.



Somebody has to do the grunt work. We can't all be investment bankers.

barfo

I didn't say not to do any work, but make work is another issue. I have no problem with anyone who does honest work. But those construction workers could start small businesses. Now THAT would be a real contribution to GDP.

 

[maxiep]

So by "line position" you are referring to someone who gets paid a lot to do very little actual work?

Unsurprising you don't understand.

 

[Denny Crane]

I would think so. The road crew spends their paychecks on beer and lottery tickets, and that money flows onward.
barfo

You'd think people would learn from FDR's mistakes. For a decade, he used inefficient govt. money to hire people at govt. works project type jobs and unemployment and the economy remained stagnant (at best). It wasn't until WW II and the govt. buying goods from the private sector in huge numbers that turned things around.

The flaw in your thinking is that it costs govt. $200K to pay a worker $100K to generate $25K in revenue (the taxes the employee pays).

I am probably being generous at $200K - it might be $300K or more.

You also have to consider that govt. is spending at massive deficit levels. In order to do so, it has to borrow. There's only so much money to be leant and when you're talking about govt. sucking up > $1T per year of that, there's not much left for the private sector to borrow.

 

[barfo]

You'd think people would learn from FDR's mistakes. For a decade, he used inefficient govt. money to hire people at govt. works project type jobs and unemployment and the economy remained stagnant (at best). [

Which, by itself, proves nothing, since one can easily argue it would have been worse without those projects.

It wasn't until WW II and the govt. buying goods from the private sector in huge numbers that turned things around.

So, gov't buying stuff from the private sector for war works, buying stuff in peacetime doesn't work. Not sure I see why that should be.

The flaw in your thinking is that it costs govt. $200K to pay a worker $100K to generate $25K in revenue (the taxes the employee pays).

I'm not sure that's a flaw, or that it has to do with my thinking. If it costs $200K to pay a worker $100K, where does that extra $100k go? To government workers, presumably, who would otherwise be unemployed. So it generates $50K in tax revenue, since the gummint worker also pays tax.

Anyway, the point is not to generate tax revenue, is it? If that was the point we could just raise tax rates.

I am probably being generous at $200K - it might be $300K or more.

No offense, but I think you are just pulling numbers out of your, um, hat.

You also have to consider that govt. is spending at massive deficit levels. In order to do so, it has to borrow. There's only so much money to be leant and when you're talking about govt. sucking up > $1T per year of that, there's not much left for the private sector to borrow.

You've got it completely backwards. The government is spending at massive levels because the private sector isn't, and the private sector isn't because there is no money for it to borrow.

barfo

 

[Denny Crane]

Which, by itself, proves nothing, since one can easily argue it would have been worse without those projects.

The evidence suggests the opposite. The depression was longer and deeper than any bad economic times in our history.

So, gov't buying stuff from the private sector for war works, buying stuff in peacetime doesn't work. Not sure I see why that should be.

Govt. buying from the private sector, period. The private sector is and was way more efficient at putting the capital to use.

I'm not sure that's a flaw, or that it has to do with my thinking. If it costs $200K to pay a worker $100K, where does that extra $100k go? To government workers, presumably, who would otherwise be unemployed. So it generates $50K in tax revenue, since the gummint worker also pays tax.

To a bunch of middlemen who already have jobs. Secure ones at that.

Anyway, the point is not to generate tax revenue, is it? If that was the point we could just raise tax rates.

Higher tax rates gave us weaker economic growth and lowered govt. revenues. See Reagan's tax cuts and how revenues increased. JFK wanted tax cuts for the same reasons.

No offense, but I think you are just pulling numbers out of your, um, hat.

LOL

I've yet to see govt. do anything that's inexpensive and efficient. I see it in small businesses and large businesses all the time.

You've got it completely backwards. The government is spending at massive levels because the private sector isn't, and the private sector isn't because there is no money for it to borrow.

barfo

Google "credit crunch" and get back to me on this looloo

 

[barfo]

The evidence suggests the opposite. The depression was longer and deeper than any bad economic times in our history.

And therefore whatever was done to try to stop it was wrong? That doesn't follow logically.

Higher tax rates gave us weaker economic growth and lowered govt. revenues. See Reagan's tax cuts and how revenues increased. JFK wanted tax cuts for the same reasons.

Yeah, that's sort of irrelevant to the point I was making. You brought up the higher tax revenue.

Google "credit crunch" and get back to me on this looloo

I don't see how you can think this is an adequate comeback. The credit crunch started last Sept. The stimulus spending started well after that. How you can blame the stimulus package for the credit crunch is really quite puzzling.

barfo

 

[blazerboy30]

The government is spending at massive levels because the private sector isn't, and the private sector isn't because there is no money for it to borrow.

barfo

I'm curious where you are getting this. The reason I ask is because I have read about several economists saying that "people", with the White House being part of them, are under the impression that the private sector isn't lending. However, the private sector is indeed lending, but at a more responsible and sustainable level. Some people and the White House are seeing this lending level at less than it was during the irresponsible times, and think that lending isn't happening and that we need to increase the lending.

I know I am small peanuts, and insignificant, but I am able to get lending. But, from what I have experienced, the banks are being much more careful and responsible than they were a few years ago. This doesn't seem like a terrible thing.

 

[Denny Crane]

And therefore whatever was done to try to stop it was wrong? That doesn't follow logically.

Putting out fire with gasoline doesn't make sense. Follow that.

Why keep on doing what isn't working?

Yeah, that's sort of irrelevant to the point I was making. You brought up the higher tax revenue.

The govt. needs money to spend. It can get it from three sources: taxation/fees, selling things like national parks, or borrowing. What part of the govt. has been borrowing way too much at the cost of money to lend to the private sector is hard to figure out?

True under Bush, which is a big factor in his own lack of popularity among even Republicans.

http://www.mcclatchydc.com/227/story/64003.html

I don't see how you can think this is an adequate comeback. The credit crunch started last Sept. The stimulus spending started well after that. How you can blame the stimulus package for the credit crunch is really quite puzzling.

barfo

http://en.wikipedia.org/wiki/Crowding_out_(economics)

 

[barfo]

Putting out fire with gasoline doesn't make sense. Follow that.

Why keep on doing what isn't working?

Sometimes a fire doesn't go out immediately when you spray water on it. Does that mean using water is necessarily a bad idea?

http://en.wikipedia.org/wiki/Crowding_out_(economics)

How about making an argument instead of citing wikipedia articles? There is probably a wikipedia article on projectile diarrhea, but that doesn't mean it caused the economic crisis.

barfo

 

[barfo]

I'm curious where you are getting this. The reason I ask is because I have read about several economists saying that "people", with the White House being part of them, are under the impression that the private sector isn't lending. However, the private sector is indeed lending, but at a more responsible and sustainable level. Some people and the White House are seeing this lending level at less than it was during the irresponsible times, and think that lending isn't happening and that we need to increase the lending.

I know I am small peanuts, and insignificant, but I am able to get lending. But, from what I have experienced, the banks are being much more careful and responsible than they were a few years ago. This doesn't seem like a terrible thing.

Of course, it is not all-or-nothing. I shouldn't have stated it in such black-and-white terms. Of course, there is still lending going on, but as you say it is at a lower level than before. And that means less things get funded, which means less jobs, which means less consumer spending, which means the economy crashes.

Whether that is a good thing or a terrible thing depends on whose ox is getting gored. If you lost your job, it's probably a terrible thing. If you think the bubble needed to burst and you have the wherewithal to profit from the misfortune/mistakes of others, then you probably don't see a big problem.

barfo

 

[Denny Crane]

Sometimes a fire doesn't go out immediately when you spray water on it. Does that mean using water is necessarily a bad idea?

$1T+ deficits as far as the eye can see is gasoline on the fire, not water.

How about making an argument instead of citing wikipedia articles? There is probably a wikipedia article on projectile diarrhea, but that doesn't mean it caused the economic crisis.

barfo

The Wikipedia article is something they teach in macroeconomics 101, not some "out there" kind of theory.

I get your argument tho. "If you loved Bush and the Republicans' spending, you're really going to love Obama's."

 

[blazerboy30]

Of course, it is not all-or-nothing. I shouldn't have stated it in such black-and-white terms. Of course, there is still lending going on, but as you say it is at a lower level than before. And that means less things get funded, which means less jobs, which means less consumer spending, which means the economy crashes.

Whether that is a good thing or a terrible thing depends on whose ox is getting gored. If you lost your job, it's probably a terrible thing. If you think the bubble needed to burst and you have the wherewithal to profit from the misfortune/mistakes of others, then you probably don't see a big problem.

barfo

Do you think it is good for the country, in general, for lending levels to go back to how they were, say, 3-4 years ago?

 

[maxiep]

Sometimes a fire doesn't go out immediately when you spray water on it. Does that mean using water is necessarily a bad idea?

When the fire gets bigger, then yes, it's a bad idea. It's not a difficult problem. We overspent, both on the governmental and personal consumer side. People are overstretched where we're reaching a point of debt overhang. Do you really believe the solution is getting into more debt? Please explain to me how that makes sense?

How about making an argument instead of citing wikipedia articles? There is probably a wikipedia article on projectile diarrhea, but that doesn't mean it caused the economic crisis.

barfo

Crowding out is a legitimate economic concept. There's a finite amount of capital, regardless what the Obama Administration believes. When the government borrows, that means there is less for the private sector to borrow. Sure, the Government can print more money, but that only works as long as others are willing to finance it. Pretty soon you end up with a Weimar Republic monetary policy.

 

[barfo]

Do you think it is good for the country, in general, for lending levels to go back to how they were, say, 3-4 years ago?

No, I don't. At least, not if you mean sloppy lending practices. I'm not arguing for that at all.
If you mean the total volume of loans, it would be good for the economy if that level was restored, but in a sustainable manner this time. That's clearly not going to happen for some time, however.

barfo

 

[barfo]

When the fire gets bigger, then yes, it's a bad idea.

I don't want to focus too hard on this metaphor, but fires do get bigger even after the firefighters start working on them, sometimes. Happens all the time with forest fires.

It's not a difficult problem. We overspent, both on the governmental and personal consumer side. People are overstretched where we're reaching a point of debt overhang. Do you really believe the solution is getting into more debt?

Because we now have a bigger problem than debt? If we let the banks fail, if we let the car companies fail, if we let AIG fail, then ...

well, what do you think happens if we do that? I'm not sure but I'd guess it won't be pretty.

Crowding out is a legitimate economic concept. There's a finite amount of capital, regardless what the Obama Administration believes. When the government borrows, that means there is less for the private sector to borrow. Sure, the Government can print more money, but that only works as long as others are willing to finance it. Pretty soon you end up with a Weimar Republic monetary policy.

I wasn't meaning to suggest it wasn't a legitimate economic concept. However, so is, say, deflation. But by merely mentioning deflation, have I convinced you that deflation caused the current crisis? Or is the result of the current crisis? Or has anything to do with the current crisis?

barfo

 

[BLAZER PROPHET]

Because we now have a bigger problem than debt? If we let the banks fail, if we let the car companies fail, if we let AIG fail, then ...

well, what do you think happens if we do that? I'm not sure but I'd guess it won't be pretty.barfo

It's an interesting question. There are 2 plausible scenarios:

1) We let AIG and the auto companies file for bankruptcy. What happens? That's up to the company. They can shed some debt, shed some aspects of labor contracts that preclude them from making money, shed some business concerns that are losing money and re-emerge leaner and possibly profitable. Will it cause the loss of some business to competitors? Certainly. But that's the price for being a crappy company. Will it cost some jobs? Yes. But this is the way of business. The unions were so damned greedy that they knew this day was coming. I've been laid off from two jobs. ABM has been laid off a few times. It's never pretty, but all jobs cannot be guaranteed for life. Eventually, in a few years, the balance of business comes back according to the needs of the consumers.

2) We can continue to indefinately feed companies and whole sectors of the industry trillions of dollars. What happens? Eventually the USA becomes hyper inflationary and defaults on it's obligations. When that happens, the economy collapses in ways we cannot imagine and we may very well cease being a nation. Or, in a better case scanerio, we just keep feeding them money forever and let our debt grow out of the trillions and where ever it goes from there. But at some point in time there will be a price to pay.

 

[barfo]

It's an interesting question. There are 2 plausible scenarios:

1) We let AIG and the auto companies file for bankruptcy. What happens? That's up to the company. They can shed some debt, shed some aspects of labor contracts that preclude them from making money, shed some business concerns that are losing money and re-emerge leaner and possibly profitable. Will it cause the loss of some business to competitors? Certainly. But that's the price for being a crappy company. Will it cost some jobs? Yes. But this is the way of business. The unions were so damned greedy that they knew this day was coming. I've been laid off from two jobs. ABM has been laid off a few times. It's never pretty, but all jobs cannot be guaranteed for life. Eventually, in a few years, the balance of business comes back according to the needs of the consumers.

Do you think there are no consequences for folks outside of those companies? I'm not particularly concerned about the welfare of AIG/GM/etc employees, or the stockholders of those companies, but I am concerned about what effects the failure of those companies might have on the overall economy.

barfo

 

[maxiep]

I don't want to focus too hard on this metaphor, but fires do get bigger even after the firefighters start working on them, sometimes. Happens all the time with forest fires.



Because we now have a bigger problem than debt? If we let the banks fail, if we let the car companies fail, if we let AIG fail, then ...

well, what do you think happens if we do that? I'm not sure but I'd guess it won't be pretty.



I wasn't meaning to suggest it wasn't a legitimate economic concept. However, so is, say, deflation. But by merely mentioning deflation, have I convinced you that deflation caused the current crisis? Or is the result of the current crisis? Or has anything to do with the current crisis?

barfo

Your arguments are the triangulation between the silly, naive and ignorant.

 

[barfo]

Your arguments are the triangulation between the silly, naive and ignorant.

Supposedly you are trained in economics, why don't you provide some value instead of just being insulting?

barfo