Everybody is a Economist now
By John Amato Tuesday Sep 30, 2008 7:00pmHave you noticed that every person suddenly knows everything there is to know about how the economy works? Wow, it's all so simple. Activists now know all there is about the dollar and oil prices and mortgages. I wonder why they never chimed in before...I started asking people for their stock tips since they are all experts now. We will all get rich quick. Right?
Login or Register to post comments.
Here's my tip:
Vote Obama
Let me know the hottest tips when they come in would ya?
Yup, I run into them all day long... most of them don't think the bailout is necessary or desirable.
They will have lots of time to discuss this great theory on the unemployment line.
All you need to get even richer is a big pile of cash.
Here is Nader on the 'Bailout' Bill.
He IS an expert about our government gone wrong.
He says any bailout, if one is even needed, should come after sufficient public hearings with the REAL economic experts.
He says more than that. Check it out.
This country is being railroaded on Paulson's Plunder.
They are all Bourgeoisie Economists, these new armchair Keyneses & have just as much grasp of reality at those parading around w/degrees & credentials.
All dead-enders fighting for a dying economic regime.
Rob a bank.
Don't do anything. It'll be fine. The GOP said so.
Sarah Palin is a disgrace.
Well, at least it isn't everyone pretending to be civil engineers who now know all about the structural strengths or weaknesses of the World Trade Centers and any other suspicious buildings, but couldn't design a single suspension bridge if you offered them as much money as they wanted.
El Cid @ 10:
...as long as they don't blink.
All I know is when you run up more debt than you can pay back, you need to stop running up debt. Especially when you are buying things because people on tv tell you that you just won't be cool but instead be a total loser if you don't have what they are selling. Ya gotta have a new car, large, or giant tv, and all the newest electronic toys. You must have a kitchen with granite counter tops and all stainless steel appliances. Your bathroom must be spa like.
Full disclosure, I have none of the things listed above. But what I do have is paid for in full.
ROTFLMAOFFFFFFFFF!!!!!
heheh. Excellent topic John..
Good on Yaa.!!
Everybody is an Economist now
Sorry....Grammar Nazi.
Do the right thing...VOTE OBAMA/BIDEN!
Thanks for the laugh, John.
Like Obama said in the debate: We have to start dealing with things before they become a crisis.
Everyone but Palin...
We need more deregulation and tax breaks for the rich.
The mantra of those that don't know what to do about the economy.
Jean Meslier's words should be altered: "Man shall not be free until the last politician is strangled with the entrails of the last banker".
http://newsproject.org/node/136
Here is Glenn Greenwald on the failure of the journalists again on the 'Bailout'.
Just like Iraq.
Just like the Patriot Act.
Stop Paulson's plunder.
You've got to admit, Paul Krugman (NY Times) has called this baby from the get-go about two years ago. I wish he would share some investment tips.
I can see an economist from my dining room window, so i guess that makes me...
upchuck @ 17:
If you have a surplus: Tax Breaks
A Deficit? Then try Tax Breaks
Stagflation? Surely a Tax Break is in order
Put it all in cranberry sauce! Thanksgiving will never die! BUY BUY BUY!!!!!
The problem, of course, is that there are very few, if any, economists or other "experts" that we can trust. Sure some of them are trustworthy, but there's no way to know which ones they are. Most of the "experts" I've been hearing from are tied tightly into the very class of people who will benefit from the bailout, so their statements cannot be relied upon.
We can't just sit back and form no opinion, though. Whether for or against the bailout, if we just shut our mouths then we're letting these untrustworthy people have the run of the place.
I'm no expert, but I'm doing the best I can to understand the situation. Part of the best I can is to think and analyze for myself. There is no authority whose word is worth a damn.
Excuse me, but what's your point, John? And what's with the front load of "vote Obama" comments on the thread? Both McCain and Obama favor this massive giveaway to the rich and careless. Nobody else will benefit at all. If Obama would come out and denounce this ludicrous bill, he'd win in a landslide. But he won't, because he's a bought and paid for shill.
What we need right now is to return to the kinds of taxes on the super-rich that we used to have, even up to 91% in the top brackets, in order to rebuild the nation like was done after the Great Depression via the New Deal and WWII. (Well, also the destruction of our major competitors all across Europe and the creation of an instant, desperate market, but we'll do without that.)
We also need to figure out how to kick these low tax obsessionists out of the country, so that they can go live in some 3rd world hell-hole and watch it crumble all around them as they fantasize about themselves living rugged, independent lives. Maybe the ungovernable areas of the Democratic Republic of the Congo.
You get the country and the economy you pay for. Let all the super-rich walk free, and your country and economy falls to sh*t. What did you expect?
I'll admit to getting a little "long in the tooth" age wise, so to speak, but man. What a world we are living in. It never ceases to amaze me. When corporations make billions profit, have you ever heard any of them offer to pay down any nation's debts? Have you ever seen the CEO of say, GM, go on national television and say "well, we had a great year and made 17 billion profit, so we're going to assist in paying off the national debt?" Yet even if they have 20 years of crazy ass profits, the minute they lose 5 cents, they run to the government with hands wide open. It's amazing.
The fed is an unconstitutional banking cartel. I know that much and that much is enough.. the game is rigged.
"I believe that banking institutions are more dangerous to our liberties than standing armies . . .
If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered —Thomas Jefferson
I may not be crazy about the Federal Reserve system, but I'm glad that Bush Jr. didn't have his hands directly on a Central Bank for the last 8 years. You think we're f***ed now? At least the Fed is fairly independent.
Why are US taxpayers being asked to bail out saudi investments?
http://www.politicalbull.net/hidden_secret_of_the_financial_crisis.html
I am surprised McCain is not taking the gamble by going on the Senate floor and oppose the bailout since they loaded it up with pork.
Could turn this election around.
i'm an expert on my economy - and have expertly screwed it up many times.
getalife @ 31:
Doubt it. We all know what caused this. GOP backed deregulation.
They can spin this all they want. But the bottom line comes down too the GOP.
I have heard of people robbing banks before but banks robbing the people? Come to think of it, it's been going on for a long time!
Folks are probably tired of being raped by priests.
Tim @ 28:
Thanks for giving the REAL point. The Federal Reserve is an unconstitutional private central bank that RIGS the whole system. You don't have to be an economist to see this. You also don't have to be an engineer to know that a building can pancake at free fall speed.
Well El Did is two for two. Loved the silver lining offered in @10
So if the Federal Reserve is so horrible, does that mean we'd be so better off with a Central Bank? We tried that. Several times. That didn't work out either.
Sorry El Cid. Clumsy fingers tonight.
Look--alot of people in this country are working paycheck to paycheck, fighting off the bill collectors, and just trying to keep our families together. Then we regularly see people making untold millions of dollars with parachute clauses, etc., and now THEY NEED a bailout? It is hard to swallow. So, everyone has an idea on how to fix it since we (middle-class and lower-middle-class) have to pay for that. Of course, we are not experts. But we have 2 wars going on, billions paid in hurricane inflicted areas, oil companies making billions, wall street making billions, and now we have to rescue them. Aghhhhhhhhh!!!! I have always believed that the neocons and Bush have a plan to bankrupt this country. So that all we can pay for is military armaments. Has he succeeded? I believe he is as close to it as possible.
Courtesy of Fact Check.
A MoveOn.org Political Action ad plays the partisan blame game with the economic crisis, charging that John McCain’s friend and former economic adviser Phil Gramm “stripped safeguards that would have protected us.” The claim is bogus. Gramm’s legislation had broad bipartisan support and was signed into law by President Clinton. Moreover, the bill had nothing to do with causing the crisis, and economists – not to mention President Clinton – praise it for having softened the crisis.
A McCain-Palin ad, in turn, blames Democrats for the mess. The ad says that the crisis “didn’t have to happen,” because legislation McCain co-sponsored would have tightened regulations on Fannie Mae and Freddie Mac. But, the ad says, Obama "was notably silent" while Democrats killed the bill. That’s oversimplified. Republicans, who controlled the Senate at the time, did not bring the bill forward for a vote. And it’s unclear how much the legislation would have helped, as McCain signed on just two months before the housing bubble popped.
In fact, there’s ample blame to go around. Experts have cited everyone from home buyers to Wall Street, mortgage brokers to Alan Greenspan.
.
.
. All I'm interested in is the truth.
Alice X - (Click Here for Nader on the 'Bailout' Bill) - status quObama - change you can pretend in - @ 5:
But, but... A REAL cowboy would make an immediate decision!
I'd f***ing get cable just to watch THOSE hearings.
They're just following congress' lead.... I listened to Kucinich the other night on Maddow's show -- he was utterly clueless about the current issues and possible crises. John Boehner and the rest of the house republicans also seem utterly clueless. This isn't about the equity markets folks!
For those people who keep whining about the basic functions of the Fed and cry havoc over the loss the bimetallic currency standards, I suggest you actually research numerous depressions which America endured between the civil war and 1905.
I have a degree in economics... so, Sup?
Great post, John. We can only assist in moving things forward if we are totally honest, realistic, and committed. The "reform and resolution" we need to bring our economy and our government back to the productive, innovative, and constructive state it once was will take years of effort and adjustment. The "bail out" is an attempt by a host of Americans advised by the best we have who, even though they have different political motivations, actually are on the hook for the impact of this initial step to stem the damage to the global economy. No one knows what action today is guaranteed to be the "best". We all have ideas, concepts, and wishes but they all cannot be resolved in one act.
If we devote the same energy to all the complex follow-on decisions and legislation that will come in the months ahead as we have to letting everyone know we have a better answer to this first step, we will make real progress. As far as this legislation is concerned, we do not have to carry the extraordinary load of "what if we are wrong?" The folks doing their best at the moment do carry that responsibility and compromises to the idea solution will be made - by all.
FactCheck is right about the 'bipartisan support', but in the 2001 Commodities Futures Modernization Act it was an Omnibus Federal Budget, voted on yea or nay, 2 days after Bush V. Gore.
Second, they are flat wrong about the consequences. The underlying problem here is the Credit Default Swap market, entirely deregulated by Gramm's 2001 CFMA.
If FactCheck cannot manage to actually check that fact, maybe they need to hire some people capable of doing so.
It didn't take an expert to see this coming. But plenty did. People across the political spectrum have been spelling it out for decades now. Take Kevin Phillips's "Politics of Rich and Poor" published in the late eighties.
If you read, saw, or listened to any of the following, you are a relative expert:
Oliver Stone's "Wall Street"
Any Kevin Phillips book for the last twenty years
Doug Henwood
Dean Baker
Joe Stiglitz
James Galbraith
DemocracyNow!
Ralph Nader
David Cay Johnston
Any WTO teach-in
Any Labor Union Policy Accessment
Paul Craig Roberts
Counterpunch
Even . . . dare I say . . . Ron Paul was more astute than these Wall street Jackasses.
You might not have seen any of the above since they probably have never been featured up the DNC leadership's assholes. Instead you thought the shit you were hearing on CNBC, CNN, the networks, the NYT, the WaPost was all astute commentary.
You feel like you are surrounded by experts only because your half-wit neighbor now seems smarter than Bob Rubin. Well, guess what Jack, he always was.
To be fair John, some of us were able to predict this on a scale of years prior to the occasion, and to us the question becomes why those with the power to act did not.
Economics seems very simple, there are easily grasped principles which are widely known. However, this situation shows precisely how even individuals with very high qualifications failed to grasp the realities of what was unfolding.
I applaud your comment here, but I am compelled to point out that you do sometimes argue points on economics here on this blog in a very simplistic manner.
Cheers,
I agree, only real certified economists should be allowed to have a position on this. The real economists should take over the tv stations by force if necessary so they can have unlimited airtime to convince us to just pay the ransom and then things can go back to normal.
The nerve of these ignorant taxpayers poking their noses where they don't belong, don't they realize the kidnappers might get spooked and kill the economy????
Yeah, what the hell. Who needs more than 12 hours to read a bill before voting for it anyway? Only good things can come from fear.
If and when the bailout passes congress, the dollar will tumble. If you have been watching the dollar as the market tanks, the dollar strengthens. .71 against the Euro up .04 within the last few weeks. I may have too much confidence in Ron Paul's assessment of this bailout, but until he is proved wrong, my confidence remains.
I was thinking this very same thing today. Why did these same "experts" not give a shit when we were and still are pouring billions of borrowed money into the unnecessary Iraq War?
El Cid @ 38:
When the government does its constitutional duty to coin money WITHOUT interest, the people are better off. When the government abdicates that duty and allows ANY private central bank to print as much money as they want, charge us interest to use it, they take control of the economy (which is what we have right now).
And we don't need more government regulations. If a business commits fraud, they should be prosecuted and all ill gotten gains should be given back. Other than that all the regulations do is protect big business from competition, which is bad for all of us. It is an absolute fact that economic prosperity is directly proportional to the freedom of markets (absence of government manipulation).
El Cid @ 38:
The Fed Reserve ISN'T a central bank?
Seriously?
motherjones july/august 2008 issue
But the Enron loophole was small potatoes compared to the devastation that unregulated swaps would unleash. Credit default swaps are essentially insurance policies covering the losses on securities in the event of a default. Financial institutions buy them to protect themselves if an investment they hold goes south. It's like bookies trading bets, with banks and hedge funds gambling on whether an investment (say, a pile of subprime mortgages bundled into a security) will succeed or fail. Because of the swap-related provisions of Gramm's bill—which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers—a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed.
In essence, Wall Street's biggest players (which, thanks to Gramm's earlier banking deregulation efforts, now incorporated everything from your checking account to your pension fund) ran a secret casino. "Tens of trillions of dollars of transactions were done in the dark," says University of San Diego law professor Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the risks were flowing." Betting on the risk of any given transaction became more important—and more lucrative—than the transactions themselves, Partnoy notes: "So there was more betting on the riskiest subprime mortgages than there were actual mortgages." Banks and hedge funds, notes Michael Greenberger, who directed the CFTC's division of trading and markets in the late 1990s, "were betting the subprimes would pay off and they would not need the capital to support their bets."
These unregulated swaps have been at "the heart of the subprime meltdow
I'm certainly no expert on the economy, just like I wasn't an expert in the potential for Iraq to threaten our country. I was against the war from the get-go, because I didn't trust Bush. I still don't trust him and definitely don't trust our government to do the right thing about this economic crisis. In other words, I'm adamantly against this so-called bail-out.
The American public is responsible for this mess. We employ the people that let this crisis occur. The only way we're going to learn is to suffer through it. Too many people have no comprehension of what the war in Iraq has cost this country in financial security, amongst, of course, the loss of life and limb of our son and daughters. If they did, the war would have been over years ago. I'm absolutely disgusted with my country right now. Present company (for the most part) excepted.
bbk @ 44:
It doesn't count unless you support paying the ransom.
cattgrrl @ 52:
Are you kidding me?!?!?!? Where have you been? See post 47 if you want a handful of people who have been screaming about the time bomb in NY. Use the Google.
The only question that really puzzles me anymore is why we're not retro-actively bailing out Enron.
El Cid @ 46:
Well you saved me the trouble and scored a hat trick. Furthermore the subprime mortgage mess was an entirely predictable consequence of the new rules. Or absence of them. Post on bro.
MADMAX @ 56:
FU, it isn't like I can go up and hand them a pink slip and say, "You're fired." I really get tired of people who blame the victim.
I would buy AMD right now ...and get into some nanotech stocks,... Tiny is one...
El Cid @ 29:
He could not have done it at all, that's the point.
The underlying problem is a lack of real growth in the economy while the housing market grew due to easy credit and the expectation that it would never shrink. What we have now is a market correction that has followed a catastrophe curve that has come as a shock to the system. The market can not gain liquidity in the short term if everyone engages in a massive sell off.
I knew we were headed for trouble years ago when I first saw zero down loans.
constituent @ 55:
BINGO!
Ron Says: FU
Really Ron? Why do you think this country is in this mess? The majority has spoken since year 2000. With the promise of big tax cuts and big 401k profits, we're voting for the politicians that will enhance our personal lives, not the one's that would do the best thing for the country in whole. This is not blaming the "victim". We, as citizens, are responsible for this mess. More than half of the voting public are freaking morons. It's time to pay our dues.
By the way, FU, too.
Hold on. You mean Megan McArdle and Jim Cramer aren't economists?
Mick Piobr @ 54:
Well, it depends on what you mean, because, yes, it is, but most of the people attacking the Federal Reserve component focus on its partially private nature, and a degree of presumed over-independence. I used the phrase to suggest more tightly government-linked Central Banks. And in such a case, imagine had Bush Jr. had even more influence over any of our monetary policies.
But then, like most theories which over-emphasize one institution or family or whatnot, such an analysis mistakes the symptom -- a quasi-private but heavily inter-regulated institution -- for the cause -- an overall domination of U.S. government and institutions by our own upper-most classes.
I don't think there was a golden age, and then the Federal Reserve came along and ruined everything. There have been varying forms of greatness and crap, and a power and class analysis is a lot more helpful.
A lot of other nations seemed to agree that more independence by the Central Bank was desirable -- even China, which is a state capitalist totalitarian dictatorship.
MADMAX @ 66:
Obviously, you haven't read that Gore actually won Florida and the SC handed it to Bush and in Ohio and New Mexico their were more than enough votes disenfranchised or outright stolen that would have put Kerry in. So, FU.
What I want the most is to learn as much as I can from people who have the knowledge regarding this crisis. As I've written in other threads, I want to hear about this crisis from people who have reason.
I also understand that folks are angry and want heads to roll for this crisis. I do too.
But, first and foremost, I want people to just simply state the facts:
1)Denoting what's wrong in clear, precise language. Historical precedents help on this end.
2)Conveying what remedies can fix this problem in clear, precise language.
Throw in a few theories if they like. But first and foremost it all comes down to the facts. That is far better than anger, concern trolling, and canvasing for third-party votes.
Other than that, I know that the bill was wrong. I want people to be punished for the predatory lending practices. I would like regulations to come back. I want people to be helped with their mortgages and lines of credit. I also would like punitive and regulatory measures pressed upon the CEO's, especially for running their businesses in the ground. I want to see long-time planning here--not a giving in to Bush's extortion.
Ultimately, I thank you, John, for just telling it like it is. Now is the time for answers.
Dispatches: How the Banks Bet your Money spelled it out Feb 25 2008. I was persuaded, then.
It stated that there was $500B loss in sub-prime mortgages and $750B loss in credit default swaps. I think that was joint U.S.- U.K totals.
I've a Master's in Econ and completed the first year of a PhD in Econometrics. I worked at the Federal Reserve Bank (of SF) for eight years.
And I haven't a clue as to the root cause or how to fix it. Derivatives and hedging has completely changed the markets.
We are in uncharted territory.
As to the brokers, I always ask "If it's such a great money-making deal, what do you need me for?"
The Senate passed the bailout 74-25.
getalife @ 73:
Where did you get that? The vote is live now and still not complete.
Can someone tell me how they are managing to try to pass tax reductions when our economy is falling flat on its face?
This totally does not compute.
W.T.F???
AN economist.
AN!
"A" goes before all words that begin with consonants.
* a cat
* a dog
* a purple onion
* a buffalo
* a big apple
with one exception: Use an before unsounded h.
* an honorable peace
* an honest error
"An" goes before all words that begin with vowels:
* an apricot
* an egg
* an Indian
* an orbit
* an uprising
with two exceptions: When u makes the same sound as the y in you, or o makes the same sound as w in won, then a is used.
* a union
* a united front
* a unicorn
* a used napkin
* a U.S. ship
* a one-legged man
74 MsJoanne
Vote is over 74-25 passed.
It is up to the House now and Coburn should release all the bills he is holding "to save the taxpayer's money".
He voted yes .
If you're actually an economist (like I am) this recent trend is especially annoying. Everyone thinks they know what they are talking about, and few do.
On the upside, people actually want to talk to me at parties now.
This crisis wasn't unexpected. Take this line from the 2005 IMF world financial stability report:
"The combination of compressed risk premiums and the rapid growth of instruments that lack transparency and afford the potential for taking leveraged positions in the credit markets is a potential source of vulnerability that merits attention."
I remember reading that years ago and thinking, "now there's an understatement."
Sadly, until major companies started going belly up, most people just didn't care. I bored the crap out of many people a few years ago trying to explain what a collateralized debt obligation was and why they made me scared. And, honestly a vast majority of economists had never heard of any of the new financial instruments and had no idea what was going on in those markets and definitely didn't know how large they'd gotten. Lots of finance guys knew about all this, but they were making insane amounts of money and they saw no problem with the way things were going.
The other problem was that so many of us had been saying "this is going to be bad" for so long and when it didn't happen, people started blowing us off thinking us to be silly doomsayers.
If you've ever seen 12 monkeys when they talk about the Cassandra complex, it felt a lot like that. Now that things have started to get ugly, everyone is running around going, "of course this would happen!" Its pretty annoying.
All the emails I get from colleagues, family, and friends saying, "we should have listened" or "I am going to frame those emails you sent me in 2005" make me feel a tad better though.
getalife @ 76:
I'm confused...I am watching Maddow live now and the votes are being tallied right now. Am I watching a rerun? This is her first show of the night. She has the senate floor live on the teevee right now.
I am totally confused.
Ok, you're right...Maddow just said the same vote you did.
I am still confused. But that's nothing new. :D
myboysherman @ 58:
You misunderestimated what I was saying. The "experts" (notice the quotations) here are all the people that suddenly care about our money and debt because we may be using it to bail out Wall Street, but they didn't care how much was/is being spent on the war.
From the post:
"Have you noticed that every person suddenly knows everything there is to know about how the economy works? Wow, it’s all so simple. Activists now know all there is about the dollar and oil prices and mortgages. I wonder why they never chimed in before…I started asking people for their stock tips since they are all experts now. We will all get rich quick. Right?"
Are you referring to our politicians? They're all of a sudden acting like the economic experts, telling us how to 'rescue' the economy..
Ron Says: Obviously...
Yes, jackass, being from Ohio, I first handedly witnessed the sham of the year 2004 election. Both year 2000 and 2004 were close enough votes for Bush to steal the elections.
If you're taking my opinion personally, that's your problem. My point is, we as a nation will not learn anything by letting the idiots in Washington continue to "bail us out". Once the stock market goes back up, it will all be forgotten. The so-called conservatives in Congress will continue to get re-elected and have enough power to continue our countries path to fascism. Look at the compromises on the bail-out bill the Senate just passed. We're f*cked and we're responsible for it.
upchuck @ 30:
Because those investments prop up your "No payments till 2011" deal at Rooms to Go and the credit you need to buy a car, or a house.... or the short term loans that businesses need to fund projects or payroll.
It ain't that simple... yes it sucks, but it needs to get done.
Experts. Right. Now they come out and know what to do. Right. And would they *please* stop saying Main Street?? Stop it.
Nylund @ 77:
No one actually uses Mary K cosmetics; the business model is an inverted pyramid scheme where you must sell the face paint. The trick is to get others to sell it – and they have to buy it from you. At some point, the last sucker is left holding the box of cream. That’s cool when the box of cream cost 24.95, but when a Bank bets $24.95B and they’re left holding, they lose, and have lost your deposits as well.
The credit default swaps worked this way. As long as the next sucker bought the package, the seller made billions. It was obvious to those that paid any attention it was going to unravel at some point, but what the hell – a 200M bonus is a 200M bonus. Greed, apparently, is only good for a while…
cattgrrl @ 80:
Oh. Sorry. My anger with John got the best of me.
And for Nylund@77, it seems you economists fall into 3 categories: crooks, liars, and ignored.
I noticed this today at work. Funny observation.
jmo @ 75: