Ed, Sorry for the delay.
How about the congressional people - among them Frank and Dodd - who encouraged Fanny and Fred to make loans to poorer people who were bad risks? Of course, Fanny and Fred reciprocated with generous contributions to the Congressmen. The two giants wrote most of the mortgages in their quasi-governmental capacity. Actually, when the subprimes were bundled into the packages along with good mortgages and were bought, seems to me that the people who bought them were those that were stuck with them. They'll know better next time. Or should - that's the way the free market works. As it is, they are getting the wrong lesson - that if you are stupid, or allow greed to overpower commonsense - you will be saved by Uncle Sam. So let's do it again! Further the subprimes are not the problem that has sent us into depression (AKA the recession. This is a species of witchcraft. Call it a recession and it won't be a depression.). First there was the instability built into a land speculation economy, where land prices and economic rents are making new business difficult. Second, the banks are being imprudent as they loan - lending on land values. Land values before the bubble were between 50-70% of the price. I saw an Australian research study that put the Australian figure at 65% of the total. So, when a bank backed a mortgage, half their collateral consisted of volatile land-values. When the land bubble burst (not the "housing bubble") they were caught with their collaterals down. (There are apparently thousands of local banks in the US which were more cautious and may be all right - if the biggees don't drag them down.) It wasn't the sub-primes that led to trouble. They surfaced when the malodorous stuff had already hit the fan. This was after government control policies that reduced the rates of interest - which has the effect of raising land prices? Abetted and encouraged by economists, governments have a thing about interest rates. They think control of the economy can be accomplished by fiddling with them. A major problem in economics is caused by the decision to place land in the capital bucket. Land is considered capital even though its characteristics are wildly different. This leads to such peculiarities as the "housing problem". We had plenty of warning which we ignored. When the Eastern banks went belly-up, the Economist on its way to discussing bank and currency failures, mentioned the "unwise real estate ventures" that precipitated the crisis. Then, they forgot it. The Japanese experience tells about the land speculation problem. Before their crash (without subprimes) a piece of land on the Ginza the size of a postcard would cost $135,000. The Japanese are still in trouble because land prices didn't hit bottom. They did the things we did, concentrating on money and banking even as land prices hung there - too high priced to use. Japan is heading towards two decades of economic stagnation. I fear we have taken the same course. The only bright spot is the US property tax. Insomuch as it is not gutted, as happened in California, it's land component may have an effect on restraining (a little) land prices. We'll see. Harry ****************************** Henry George School of Los Angeles Box 655 Tujunga CA 91043 Tel: 818 352-4141 ****************************** -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Tuesday, April 14, 2009 12:53 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] Fw: [Ottawadissenters] Re: Sen on Keynes and Pigou Harry, after the subprime meltdown and all that followed, you say that government is the problem? The problem is the absence of a good tight government run regulatory system that's the problem. Ed ----- Original Message ----- From: "Harry Pollard" <[email protected]> To: "'RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION'" <[email protected]>; "'futurework'" <[email protected]> Sent: Tuesday, April 14, 2009 1:37 PM Subject: Re: [Futurework] Fw: [Ottawadissenters] Re: Sen on Keynes and Pigou Ed, You had to bring Bush into it! Hitler was responsible for 65 million deaths. Stalin killed and imprisoned men, women, and children, by the millions. Yet, after "mission accomplished" for 6 months or so there were very few violent deaths in Iraq - I even noted at least one day when there were zero deaths (didn't examine every day so there could have been other zero days). When the 'underground' started its violence, also began civilian casualties - usually the result of deliberate terrorist violence. What Bush found out - as Obama may already be finding - is the difficulty of getting anything worthwhile out of government that resembles a viscous fluid unable to move. One recalls Reagan. the great opponent of large government. During his 8 years he got rid of one department engaged in training teachers. Two years later, the department was reinstated. Don't ask government to solve problems - government is often the problem, as at present. Watch them flailing around. Harry ****************************** Henry George School of Los Angeles Box 655 Tujunga CA 91043 Tel: 818 352-4141 ****************************** From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Thursday, April 02, 2009 5:10 AM To: futurework Subject: [Futurework] Fw: [Ottawadissenters] Re: Sen on Keynes and Pigou ----- Original Message ----- From: Ed Weick To: [email protected] Sent: Thursday, April 02, 2009 8:07 AM Subject: Re: [Ottawadissenters] Re: [Futurework] Sen on Keynes and Pigou All theologies and ideologies have to be handled with sensitivity and care. In the hands of the powerful, they can become dangerous to the point of disaster: Witness Stalin, an avowed atheist, witness Hitler and the Holocaust, witness George W killing woman and children in Iraq, witness the Taliban beating women and throwing acid in the faces of children, and witness what happened in Gaza recently. I'm enclosing a picture of what men can, through training based on ideology, be induced to do in a secular state, North Korea in this case: Someone shouts, they jump! Silly men! Why don't they just say nuts and walk away? Ed ----- Original Message ----- From: Steve Kurtz To: [email protected] Sent: Wednesday, April 01, 2009 8:42 PM Subject: Re: [Ottawadissenters] Re: [Futurework] Sen on Keynes and Pigou They want to be told how to behave toward their fellow man and to believe that what they are hearing comes from a higher power -- i.e. God. They are dangerous as they can't decide how to behave for themselves, subject to manipulation by the best cajolers and con-men alive. Claimed (and believed by hypnotized idiots) pipelines to imaginary sources of truth and goodness are pure, 100% mental and emotional masturbation. But it sure serves the top of the hierarchies making the claims. Meanwhile, the planet is overrun by competitively bred idiots. May all those with the god gene become sterile. The cynical misanthrope in Maine __._,_.___ Messages in this topic (8) Reply (via web post) | Start a new topic Messages | Files | Photos | Links | Polls | Members | Calendar Change settings via the Web (Yahoo! ID required) Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe RECENT ACTIVITY Visit Your Group Give Back Yahoo! for Good Get inspired by a good cause. Y! Toolbar Get it Free! easy 1-click access to your groups. Yahoo! Groups Start a group in 3 easy steps. 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