I just have a few questions that I honestly don't understand. Forget about politics for a second, not the same old Pelosi this, Obama that.
What I understand is that a lot of people took out bad loans that they couldn't really pay. So than some banks default because they are not getting their money. Why is this a big deal? Is the money gone or if not, who has it? I also know that the worth of money is not an equivalent of gold but 'trust in the American economy'. Does that mean it is all virtual money? Where are all those trillions of dollars? Please help me out here before we trash all these proposals because I have the sinking feeling that neither 'liberal' nor 'conservative' economists have any idea what they are talking about.
Much, much more complex. Banks took those loans, bundled them together, and sold them as securities to banks like Lehman and Morgan Stanley. Those biggies then bundled them into even bigger packages and sold them around the world. A market developed for them in the stratosphere of high finance and these pieces of paper were bought and sold numerous times, each profit or loss being recorded as if the damn things had actual value outside of the small market that was trading in them.
When housing prices collapsed, the bubble burst on these mortgage backed securities. All of a sudden, you had trillions of dollars in paper that no one knew what they were worth. They sure weren't worth what people had been trading them for.
These are known now as "toxic assets." I don't understand the mechanism for trading them except it was a small change to an obscure law that allowed these securities. Passed in 1999 by a Republican Congress and signed into law by a Democratic president. In short, the libs are right for saying you can't blame this on people who took out bad loans. That amount is a pittance compared to the amount in bad paper carried under these mortgage backed securities around the world. It might top $13 trillion dollars when the value of all bad mortgages is around $1.2 trillion.
Basically, we have a banking system that has less than zero net worth. That's why everyone is so afraid we will have a depression.
ed.Comment Posted By funny man On 31.01.2009 @ 14:58
I sometimes ask myself; maybe this is just one big experiment. Sometimes the more individualistic, sometimes the more collective societies win. Can a society remain dynamic even after hundreds of years? Today we look at Roman society and its supposed decadent ills with hindsight but they still lasted almost a thousand years. Are we? I value my freedom but I'm also thinking there must be a glue that holds our ever more diverse society together. You can't pretend we are still in the 19th century West. That's just my disordered thoughts..Comment Posted By funny man On 29.01.2009 @ 00:07
The problem is that you can't direct invention. For example, there is the hope for biotech 'garages' producing anything from biofuels to novel medications. It might sound naive but it happens when enough people is convinced it can happen. My example always is Florence at the end of the Middle Ages. How many inhabitants were there? Perhaps 50,000. Now does that mean any place in the US has the same talent pool that Florence? Perhaps so but they don't believe that themselves. The few that do actually migrate towards institutions like MIT because they think that is where it is 'happening'. And so it does. True enough; whether today with government funding and or visionary financiers or back then the Medici, money is still needed. Hope we don't forget the greatest strength of the United States especially in time of crisis, innovation and discovery.Comment Posted By funny man On 25.01.2009 @ 19:38
"Somewhere along the way, we gave into the temptation to use conservative ideas to divide rather than unite".Comment Posted By funny man On 24.01.2009 @ 00:54
I can attest to that by my own experience. Conservatism has to evolve has to adapt and change because the times 'they are a'changing'. That doesn't mean you should become like democrats (like they know where they are heading). However, that evolution needs rigorous, honest debate and that is what I often see missing. Thanks Rick for a beautiful piece here.
Let's take the economy. What is needed here? It appears that the dogma that free markets regulate themselves didn't hold up. Why? For one, greed is just ingrained in human nature. Kind of reminds me of communism; nice idea but the problem is the people. So don't we have to find a role for government in regulating banks and insurances. That sure doesn't sound conservative but then what does?
When it comes to the never ending circus of race relations I encourage everyone to examine your own heart than to beat up irrelevant straw men like Al Sharpton. I'd rather hear someone moving things like my hero Michelle Rhee as chancellor of the DC school system. Think about the needs of the children not the political needs of adults (her words to Marion Barry; couldn't help but smile)
One thing I agree with Obama, volunteering is a great thing we can all do together as Americans be that at the Salvation Army, Teach for America or what have you. Sometimes better than drowning in self pity and cynicism (own experience). It'd getting late and I'm making less and less sense; or do I ever.
Michael Reynolds:Comment Posted By funny man On 22.01.2009 @ 17:20
you forgot the coalition partner of united, transgender, jewish freemasons. Then you've got the take-over. Wait, my bad; I forgot to include Rev Wright.
Retire,Comment Posted By funny man On 20.01.2009 @ 16:47
sure AA applies to Native Americans too. BTW, it's Lakota not Sioux anymore.
Bet,Comment Posted By funny man On 20.01.2009 @ 15:16
I used to live in Michigan too and I will tell you that your 'white guilt' concept is more an urban myth than reality. Please don't confuse Talk Radio slogans with Conservatism.
It is a great day for America that is for certain. Sure racism and hostility are not just going away (and that applies to all) but today also represents the ability of our society to reinvent itself. Today I don't want to talk about all the negatives and political differences but celebrate exactly this.Comment Posted By funny man On 20.01.2009 @ 13:43
IQ in the political sense means bringing the right people together. I mean, it might be great if someone can explain black holes but that does not translate into a balanced budget. So again, whether you have gotten As or Cs in your class does not tell that much about future success. Of course, you shouldn't have below average intelligence for the presidency. However, this was really never the case in my lifetime.Comment Posted By funny man On 16.01.2009 @ 20:06
BTW, just in case you haven't noticed, most students in Berkeley are Asians (60s are sort of over)Comment Posted By funny man On 15.01.2009 @ 17:16