Pepper sprayed for public safety.

[sebastian_dangerfield]

The govt costs $3.6 trillion to run.

Estimates of tax revenue gained from allowing cuts to expire for $250k and up brackets are between $60 and 100 billion.

So this tax fix everyone will be arguing about in DC involves enough money to run the govt for between 1/5 to 1/3 of a month?

If we couple it with removal of the payroll tax cut ($120 billion) in some manner that does not cause an offsetting decrease in consumption leading to greater unemployment, the cost of which would likely wash out the value of any gain from allowing that cut to expire, we could pay for somewhere near a whole month of govt. Given the projected 2013 deficit of $900 billion, after we get that month paid for (assuming some other revenue increases get us to the $300 bil needed, or cuts shrink the monthly operating cost), we only need to find another $600 billion in cuts and revenue enhancements and we can pay for a whole quarter of the budget.

[Sidd Finch]

Originally Posted by sebastian_dangerfield

You're getting the good feeling just now? When was it ever in doubt that Obama was going to win? I have never, through the entire campaign, believed Romney had a snowball's chance in hell. Frankly, anyone who did was either deluding himself or cognitively challenged.

The market historically does better with Ds in office, and gridlock's a good thing. Business now has absolute certainty on who'll be in charge, and perhaps that will increase hiring. And like I said, more regs = more work for lawyers. I feel like I'm supposed to shit on the victory party here, but honestly, this feels like nothing more than Wednesday, the day after the Tuesday election where what everybody expected to happen happened.

I try not to count chickens before they hatch. And there is always a chance of something happening -- another dismal debate performance, an aberrant uptick in unemployment, people believing the latest Romney lie, etc.

[Adder]

Originally Posted by sebastian_dangerfield

The govt costs $3.6 trillion to run.

Estimates of tax revenue gained from allowing cuts to expire for $250k and up brackets are between $60 and 100 billion.

So this tax fix everyone will be arguing about in DC involves enough money to run the govt for between 1/5 to 1/3 of a month?

If we couple it with removal of the payroll tax cut ($120 billion) in some manner that does not cause an offsetting decrease in consumption leading to greater unemployment, the cost of which would likely wash out the value of any gain from allowing that cut to expire, we could pay for somewhere near a whole month of govt. Given the projected 2013 deficit of $900 billion, after we get that month paid for (assuming some other revenue increases get us to the $300 bil needed, or cuts shrink the monthly operating cost), we only need to find another $600 billion in cuts and revenue enhancements and we can pay for a whole quarter of the budget.

The budget will not, and should not, be perfectly balanced for years.

And, as is always the case, if and when it is, it will be primarily because of economic growth and not cuts or tax increases.

[Adder]

Originally Posted by sebastian_dangerfield

I justified voting for Mitt over Gary Johnson on the basis that, if the GOP/Dem chasm in PA tightened, in future races we'd see more in-state campaigning by Presidential candidates. This would be annoying, of course, but it creates economic activity, which PA needs.

That's not what you said before.

But it's an interesting strategy given that your's is one of the small handful of states that both presidential candidates visited, multiple times each I think, in the last week.

By the way, I'm not sure in state campaigning is a net positive, given the disruptions and expenses it involves. It's probably good for the police union though.

[ThurgreedMarshall]

Originally Posted by sebastian_dangerfield

I don't know, and your argument holds a lot more pragmatic heft than mine. It just disturbs me people in this country - from banks to those who borrow from them - are becoming more and more dependent on Uncle Sam. In an endless variety of ways.

"Becoming more?" What are you talking about? From the cause of the Great Depression (companies fucking people on stock while we let the market reign supreme) to the cause of the Great Recession (companies fucking everyone on mortgages and asset-backed securities), one thing has been consistent. People are stupid and the smart will take advantage to better themselves personally without caring about the wider implications of their fleecing of all the suckers they can.

People who aren't sophisticated enough to understand these complex products (whether they be 15 year, hybrid 5/1 ARM mortgages or
complicated collateralized debt obligations) want and need to establish some type of protection. Rich people hire financial advisors and lawyers (who sometimes prove unhelpful, especially when they are ignored by their clients). The rest look to the government to establish some layer of protection (like the SEC or a consumer protection bureau) that has their and the country's (and the market's!) best interests in mind. Smart people are constantly trying to get around these protections and are designing products that are so complicated that the (i) typical mortgage consumer can't hope to understand them and (ii) the SEC and even internal risk departments of very sophisticated investors can't possibly keep up. Are there idiots out there who don't even try? Sure. There will always be morons who jump in way over their head without looking. But the idea that it's just sad that the American consumer is getting dumber and therefore more dependent is just simplistic and shallow.

TM

[Greedy,Greedy,Greedy]

Originally Posted by Sidd Finch

Personally, I'd like to Obama reach across the aisle now, and make it clear that the main message from the electorate was to stop bickering and start dealing with shit. And then state the framework for an intelligent compromise to avoid the fiscal cliff. Shit, even CEOs are supporting tax increases at this piont, the Rs need to get over the notion that it's all about spending cuts.

You program has nothing that speaks to the needs of the batshit crazy loons.
Maybe we can graft on it some notion of Joe Biden mudwrestling with Sarah Pallin on Fox News?

Intelligent compromise? Do you really want to disenfranchise the 48% of Americans who voted for half-assed lunacy this election?

[taxwonk]

Originally Posted by sebastian_dangerfield

Why Mitt penned that editorial I will never know. Dumbest political move in history.

Ever notice how some questions seem to answer themselves?

[Replaced_Texan]

Originally Posted by sebastian_dangerfield

You're getting the good feeling just now? When was it ever in doubt that Obama was going to win? I have never, through the entire campaign, believed Romney had a snowball's chance in hell. Frankly, anyone who did was either deluding himself or cognitively challenged.

The market historically does better with Ds in office, and gridlock's a good thing. Business now has absolute certainty on who'll be in charge, and perhaps that will increase hiring. And like I said, more regs = more work for lawyers. I feel like I'm supposed to shit on the victory party here, but honestly, this feels like nothing more than Wednesday, the day after the Tuesday election where what everybody expected to happen happened.

Just speaking as a healthcare lawyer, we're now a shit ton busier today thanks to the dithering of people in our industry who were CERTAIN that the ACA wasn't going to happen. There are a lot of people in healthcare who really were unprepared for this.

[taxwonk]

Originally Posted by sebastian_dangerfield

She's going to create work for lawyers and accountants. That's good... for us.

Whether enshrining into law the notion people are incapable of reading loan documents, and can't avoid being fleeced by lenders without aid of a govt agency to watch their back is a good thing is another question. I'm not against the consumer agency's banning things like cross-defaults in unrelated consumer loans. But I am nervous about society being told, "Don't bother learning how to navigate a lending agreement. The govt will make it all nice and safe for you. It'll make sure you can stay as uneducated on the subject as you like. Nanny has your back."

(And, of course, the implicit message - that people cannot live without consumer credit, and therefore we need an agency to make sure they get it on terms most advantageous to them - is disturbing.)

Lenders have noone but themselves to blame for this. It's not about "contracts are incomprehensible" that leads to consumer protection laws and regulations. It's about the lenders' imposition of a take-it-or-leave-it bargaining posture.

The majority of borrowers would feel less antagonized by lenders if they could actually get an answer other than "fuck you" if they aske to have their mortgage payment due on the 16th, since they get paid on the 15th.

[sebastian_dangerfield]

Originally Posted by ThurgreedMarshall

"Becoming more?" What are you talking about? From the cause of the Great Depression (companies fucking people on stock while we let the market reign supreme) to the cause of the Great Recession (companies fucking everyone on mortgages and asset-backed securities), one thing has been consistent. People are stupid and the smart will take advantage to better themselves personally without caring about the wider implications of their fleecing of all the suckers they can.

People who aren't sophisticated enough to understand these complex products (whether they be 15 year, hybrid 5/1 ARM mortgages or
complicated collateralized debt obligations) want and need to establish some type of protection. Rich people hire financial advisors and lawyers (who sometimes prove unhelpful, especially when they are ignored by their clients). The rest look to the government to establish some layer of protection (like the SEC or a consumer protection bureau) that has their and the country's (and the market's!) best interests in mind. Smart people are constantly trying to get around these protections and are designing products that are so complicated that the (i) typical mortgage consumer can't hope to understand them and (ii) the SEC and even internal risk departments of very sophisticated investors can't possibly keep up. Are there idiots out there who don't even try? Sure. There will always be morons who jump in way over their head without looking. But the idea that it's just sad that the American consumer is getting dumber and therefore more dependent is just simplistic and shallow.

TM

I understand these points, which is why I'm conflicted. On one hand, no, we cannot allow pure survival of the fittest in transactions where the informational asymmetries are so great (and the people in the industry so amoral). On the other, isn't there some way to inject enough personal responsibility into the system to bring down - substantially - the number of idiots "jumping in way over their heads"? Because I don't think that number is so small. I see amazing levels of not only financial ignorance, but general life management cluelessness. People forget to pay property taxes if they're not escrowed and paid through the loan. People forget to pay insurance. People with jobs and money walk away from credit cards and personal loans, get sued, and are then astonished when their accounts get frozen. They sign guarantees for relatives. Hell, I have one lady who consolidated her student loans with her husband - assuming his debt. The list goes on...

These aren't terribly complicated instruments. What I see are people who wish to live in an uncomplicated fashion refusing to meet the duties of what is, unfortunately, an ever more complicated world. They seem to be overwhelmed by all the bills they get and look at borrowing to pay for things as mere administrative events ("I go to a closing, sign something that tells me what to pay every month and then I get a house. Is it an ARM? Whatever. I'll just pay what it says.").

We've taught millions of people to think before having sex - to avoid disease, pregnancy, or worse. And I have to assume it's worked and saved many otherwise ruined lives. Maybe it's time we put out a similar PSA about borrowing. A campaign to scare people into reading the details of what they're signing. To advise them that a lender, like any party to a transaction, is seeking to make a profit from the other side, and that in many instances, the bank is trying to enhance that profit by creating an advantage for itself that can and often does hurt the borrower. Arm consumers with information so we don't have to keep larding on so many new regulations in a futile game of cat and mouse with "smart people" crafting intentionally confusing instruments.

(By the way, between banks? Minimal regulation. I say leave banks to screw one another however they see fit short of criminal fraud. Sophisticated parties don't need Uncle Sam's handicapping. If some bank in Germany feels Goldman screwed it, let it sue Goldman, or screw them back somehow.)

[taxwonk]

Originally Posted by Greedy,Greedy,Greedy

The Republicans have a couple big problems. In order to win nationally, they need to attract people into the party whom most of the party viscerally hates. And, the Dems are now the party of fiscal responsibility, while they are the party of tax breaks for the rich. That 47% comment, where Romney complains about other people's taxes being too low, that really defines where they've come to. Hank, you're in an area where the Rs may not yet be over the top. But head south or west, and the nuts are running the asylum.

But, on to letting the Bush tax cuts expire. Say goodbye. If you want to save something, Boehner will have to play let's make a deal, and lay his priorities on the table.

On the good side, once we establish that even a billion dollars can't buy the election, perhaps there is a little less incentive for these guys to french kiss Adelson's and Trump's asses.

The single best thing that could happen to our economy would be for Congress and the White House to let us go off the fiscal cliff.

Repeal of the Bush tax cuts is an imperative if we are serious about deficit reduction. Continuing to extend those tax breaks is going to break us. And the cuts in all spending areas would allow for a easy reduction in spending, and would allow a principled discussion about what spending needs to be in all areas.

Yes, it will be painful. But what possible better time to let the pain come than in the first years of a lame duck presidency? We need to let the Gov'mint beast die in order to recreate a new one that has focus and priorities that aren't beased on who needs to promise what to the voters to get re-elected.

[sebastian_dangerfield]

Originally Posted by taxwonk

Lenders have noone but themselves to blame for this. It's not about "contracts are incomprehensible" that leads to consumer protection laws and regulations. It's about the lenders' imposition of a take-it-or-leave-it bargaining posture.

The majority of borrowers would feel less antagonized by lenders if they could actually get an answer other than "fuck you" if they aske to have their mortgage payment due on the 16th, since they get paid on the 15th.

The problem there is TBTF. Why do banks say "fuck off"? Because they can't take the time to service any one account uniquely. Everything's automated to save on labor costs, and no one any mortgage borrower could get on the phone has authority to do anything but say "Our policy says you must pay on [insert date]. Fuck off."

If we had more local and regional banks, and banks had more skin in the game (beyond the 10-15% of loan risk I think most retain), and they did "paper underwriting," we wouldn't have 1/100th of the problems that currently stem from depersonalized, shoddily-run systems. We'd also create a fuckload of decent paying middle class jobs for people who'd work for these banks.

But none of that is going to happen because that would eat into the short term bottom line. And Jamie Dimon can defend TBTF dinosaurs by saying shit like, "If we don't have huge banks that can play in the global market, Chinese banks will do it!" (As if multiple banks can't and don't engage in participation.)

[taxwonk]

Originally Posted by sebastian_dangerfield

The problem there is TBTF. Why do banks say "fuck off"? Because they can't take the time to service any one account uniquely. Everything's automated to save on labor costs, and no one any mortgage borrower could get on the phone has authority to do anything but say "Our policy says you must pay on [insert date]. Fuck off."

If we had more local and regional banks, and banks had more skin in the game (beyond the 10-15% of loan risk I think most retain), and they did "paper underwriting," we wouldn't have 1/100th of the problems that currently stem from depersonalized, shoddily-run systems. We'd also create a fuckload of decent paying middle class jobs for people who'd work for these banks.

But none of that is going to happen because that would eat into the short term bottom line. And Jamie Dimon can defend TBTF dinosaurs by saying shit like, "If we don't have huge banks that can play in the global market, Chinese banks will do it!" (As if multiple banks can't and don't engage in participation.)

Fine. Then let them live with the ineffciencies and costs of regulation. Fuck us? FUCK THEM!!!

And as I have stated many times over, no commercial institution is too big to fail. But, as long as the law treats any institution as too big to fail, it has the right to crawl up anywhere it feels like looking and making whatever regulations it feels are necessary to prevent failure and to protect consumers.

[Adder]

Originally Posted by sebastian_dangerfield

If we had more local and regional banks

Just out of curiosity, just how many local and regional banks do you think we have in this country?

'Cause it's a lot.

But your point about servicing still stands. Those over 10,000 banks (last time I looked a few years ago, maybe only 9,000 now), likely aren't servicing many or any of the mortgages they originate.

[Tyrone Slothrop]

Originally Posted by Sidd Finch

We've been through this before. The issue isn't just protecting people who are incapable of protecting themselves, or unwilling to do so. On that, I tend to agree with the "fuck 'em" mentality. The problem is that that, as those people default and the defaults mount, they end up fucking all of us.

"Too big to fail" means "too big not to regulate."

I'm not altogether unfamiliar with what the CFPB is doing from the perspective of the regulated party, and I really don't understand what all the bitching is about.