Trickle down or trickle up economics?

[sweeps]

Sweeps, I was dirt poor as a child.

Same here, and since then I've done fairly well for myself. But you know what, I probably couldn't have done it without government help, most notably public education, college grants and subsidized student loans.

[GrimJack]

Yes, those poor union workers are underpaid, so let give them all a raise and live happily ever after.

I have no idea where this comes from or what you want to get across. But I will guess that you think the unrestrained pay given to management is a good thing but wages paid to workers is a bad thing.

[KGeary]

We have some stark philosophical differences and we'll just have to disagree, but this comment in particular caught my eye.

Actually the banking industry crashed because it was DE-REGULATED. Banks took on risky investments that they didn't understand and they got burned. Now they're begging the government for help.

Banks took on investments they didn't understand?

Ok, you're done. No more credibility.

The fact is, the government pressured the banks to lend to people who couldn't afford it. 99% of the banking industry objected to this. Then the government promised they'd back the banks if things went awry. With federal backing, the banks didn't have a problem making the loans.

Thus you have the problem we're in now. It's not about not understanding, it's about GOVERNMENT TAMPERING with good lending practices.

Jesus, get over it...your mommy government screwed up again.

[GrimJack]

Wages increase in a free market economy. We've seen this.

Where do we see this? In a free market system, miners are sent into mines for pennies a day, with no safety equipment; meat packers pick up dead cattle on the side of the road to add to the food supply.

Why do you think there are 401k matches,

the 401k was started as another way to slip more money to the executive - it was a hard-fought battle to get that benefit down to workers.

employer sponsored health care plans,

this was a hard-fought battle forced by the unions on unwilling bosses

As more businesses enter the market, competition increases. This competition benefits low level workers, not CEOs. Companies provide more benefits and pay higher wages to attract lower level workers. This is consistently proven.

this is not consistently proven - what is consistently proven is that these things only come with hard-fought battles. Free market allows monopolies which stops more business from entering the market and competition decreases. All your argument assume government control of the market place.

Then people like you come along and raise the minimum wage, effectively destroying this free-market routine and causing companies to lay-off workers because instead of the average wage increasing over time as a market effect it increases instantly. Companies aren't prepared for this, can't adapt instantly, and lay off workers to even out the new costs. Thus, instead of having really happy workers making more money, we have a lot of workers who no longer have a job.

Heh-heh, you are joking about happy workers making more money, right? That is the communist line - 'happy workers taking the reigns from the bosses' You are saying that having a minimum wage stops companies from paying workers more money - there is a disjoint here.

Liberalism is an ideology completely based in emotion rather than logic. It has failed time and time again. Every current failing government program is based on liberal ideology.

This is an argument based entirely on your particular ideology without reference to anything outside your own head

[disneysteve]

The fact is, the government pressured the banks to lend to people who couldn't afford it.

it's about GOVERNMENT TAMPERING with good lending practices.

There used to be usury laws, government-imposed limits on interest rates and lending. When banking was deregulated, all hell broke loose. That's when we saw the rise of 500% interest payday lending, tax refund anticipation loans and every manner of "creative" mortgage loans. When the government was regulating the industry, those types of things couldn't occur. There were industry-wide standards that a borrower had to meet to qualify for a loan. Now, those standards got thrown out the window. It wasn't government interference that caused that. It was the government stepping out of the picture.

[GrimJack]

Banks took on investments they didn't understand?

Ok, you're done. No more credibility.

The fact is, the government pressured the banks to lend to people who couldn't afford it. 99% of the banking industry objected to this. Then the government promised they'd back the banks if things went awry. With federal backing, the banks didn't have a problem making the loans.

Thus you have the problem we're in now. It's not about not understanding, it's about GOVERNMENT TAMPERING with good lending practices.

Jesus, get over it...your mommy government screwed up again.

You have just proven you have no credibility. 99% of the banking industry objected - show some quotes from bankers objecting. No one forced mortgage brokers to make NINJA, Liar's Loans, or any of the other subsubsubprime loans. No one forced these into CDOs and/or Asset-backed Securities. No one forced Moody's or S&P into rating these securities AAA ratings even though they contained 80% subsubprime loans. As long as these ABS were rated AAA, it was very profitable to initiate any mortgage no matter how risky because they could sell it off. The government is not in there anywhere - they should have been. The SEC should have forced some honesty into the system; but they said 'the free market will keep it honest.' Well, we see how well that worked.

[KGeary]

Where do we see this? In a free market system, miners are sent into mines for pennies a day, with no safety equipment; meat packers pick up dead cattle on the side of the road to add to the food supply.the 401k was started as another way to slip more money to the executive - it was a hard-fought battle to get that benefit down to workers. this was a hard-fought battle forced by the unions on unwilling bosses this is not consistently proven - what is consistently proven is that these things only come with hard-fought battles. Free market allows monopolies which stops more business from entering the market and competition decreases. All your argument assume government control of the market place.Heh-heh, you are joking about happy workers making more money, right? That is the communist line - 'happy workers taking the reigns from the bosses' You are saying that having a minimum wage stops companies from paying workers more money - there is a disjoint here.This is an argument based entirely on your particular ideology without reference to anything outside your own head

Oh please. You're so full of it. Go take an economics class.

[KGeary]

There used to be usury laws, government-imposed limits on interest rates and lending. When banking was deregulated, all hell broke loose. That's when we saw the rise of 500% interest payday lending, tax refund anticipation loans and every manner of "creative" mortgage loans. When the government was regulating the industry, those types of things couldn't occur. There were industry-wide standards that a borrower had to meet to qualify for a loan. Now, those standards got thrown out the window. It wasn't government interference that caused that. It was the government stepping out of the picture.

It has nothing to do with deregulation, it has to do with stupid consumers consuming these products.

People need to regulate themselves...I don't need a nanny state to protect me from me...maybe you do, but I don't, and my founding fathers didn't either...go live in France where they'll take good care of you.

And you're wrong about lending standards not being changed by government interference.

[maat55]

I have no idea where this comes from or what you want to get across. But I will guess that you think the unrestrained pay given to management is a good thing but wages paid to workers is a bad thing.

As far as the auto industry(big three) is concerned, they are all overpaid. That, or the rest of the world is underpaid. I believe in middle ground, what exist today is rediculous. Thus, future bankruptcy for the big three. Looks like they all loose.(probably the tax payers also)

[maat55]

Same here, and since then I've done fairly well for myself. But you know what, I probably couldn't have done it without government help, most notably public education, college grants and subsidized student loans.

Education is the one thing I am for. I would rather it happen under a balanced budget. As helpful as it may be, it is extremely costly and mismanaged by the government. Wikipedia states that average cost per pupil in public education cost more than double that of private education.

I'm all for affordable higher education for everyone. In a way, grants and subsidized loans are an investment for the gov, you end up paying more tax in the long run to cover it. What I like about this process is that you had to do your part.

[KGeary]

You have just proven you have no credibility. 99% of the banking industry objected - show some quotes from bankers objecting.

"Bankers generally opposed CRA as an unnecessary measure that could adversely affect business decisions by mandating credit allocation and cause safety and soundness problems by forcing institutions to make excessively risky
loans."

http://www.gao.gov/archive/1996/gg96023.pdf

Why don't you look up Community Reinvestment Act on Google. Look at all the regulatory bodies and bills that have been screwing with and screwing up the market system and have created the mess we're in now.

While you're there, look up Sarbanes-Oxley; another failed attempt at regulation by the nanny state.

No one forced mortgage brokers to make NINJA, Liar's Loans, or any of the other subsubsubprime loans.

Ha! That statement is naive at best.

No one forced these into CDOs and/or Asset-backed Securities. No one forced Moody's or S&P into rating these securities AAA ratings even though they contained 80% subsubprime loans. As long as these ABS were rated AAA, it was very profitable to initiate any mortgage no matter how risky because they could sell it off.

And nobody forced FICO to develop a credit score that lenders use that's based solely on debt and debt to income ratios and not based on real indicators of financial responsibility.

So what? Nobody forced the stupid consumers to sign on the dotted line either. When is anyone in this country going to start being accountable for their own stupid actions? Why is it always someone elses fault? Only a moron gets a NINJA loan or a sub-prime loan and the government wanted it that way with their CRA plan.

Accept it. Government doesn't help anything. It never has and it never will. The best type of government is a limited government.

The government is not in there anywhere - they should have been. The SEC should have forced some honesty into the system; but they said 'the free market will keep it honest.' Well, we see how well that worked.

Really? You're so naive.

[Broken Arrow]

Wow KGeary, calm down. Seriously, you're just trolling now.

And the last thing we need is for people who can't at least agree to disagree (even though grimjack, sweeps, DisneySteve are correct about what are saying to you), and instead, would resort to insulting another man's character.

It's a good thing this forum has an ignore list. Bye bye!

[KGeary]

Wow KGeary, calm down. Seriously, you're just trolling now.

And the last thing we need is for people who can't at least agree to disagree (even though grimjack, sweeps, DisneySteve are correct about what are saying to you), and instead, would resort to insulting another man's character.

It's a good thing this forum has an ignore list. Bye bye!

I called him Naive. I also posted sources to my argument. And you call that trolling?

Please, put me on ignore. You don't agree with me, but can't refute what I say so you call me a troll and post a comment about how you're going to ignore me. Thank you for wasting our time.

[tripods68]

Wow!

This thread has become a bit passionate.

BA - But I tend to side with Kgeary on this one. You should be able to call off that person's comment NAIVE if you can prove (by submitting evidence) on the contrary. As if the person attacking is some sort of Economic expert with proper credentials in the field, now that's funny trying to argue your point on this site. We can agree and disagree without resorting to personal attack.

[Broken Arrow]

BA - But I tend to side with Kgeary on this one. You should be able to call off that person's comment NAIVE if you can prove (by submitting evidence) on the contrary.

Hmm. Well, yeah, I suppose that's fine if the forum admins will allow it. Elsewhere, you can get banned if you keep it up, because this sort of "forum pollution" tends to drive decent people away.

Of course, accusations of naivete is hardly a substantive rebuttal. It practically ruins one's own credibility. So, perhaps not much needs to be done here.