U.K. Mortgage Lenders: Don't Treat Us like "Drug Dealers"
Submitted by
CalculatedRisk on Sat, 11/14/2009 - 7:04am (95 comments)
User login
Who's online
There are currently 36 members and 78 guests online.
Currently online
- josap
- Elvis
- SPOOL
- Tom Stone
- Juvenal Delinquent
- Cinco-X
- Mike in Long Island
- hiker90
- ldmeier
- HomeGnome
- Anak
- bearly
- km4
- Unhappy American
- Bad Dawg Bobby
- Comrade Elmer Fudd
- aleister perdurabo
- sdtfs
- Rob Dawg
- dilbert dogbert
- Disempowered Paper Pusher
- Alpha_Bear
- EvilHenryPaulson
- Rajesh
- aClem
- YAA
- ResistanceIsFeudal
- Byzantine_Ruins
- shill
- Broke Not Broken
- Duke of Con Dao
- Counterpointer
- sk2322
- Vonbek777
- EEngineer
- billwilson
few things more humiliating than to be the comment just beneath the pig
Sometimes the bidding wars on RRE does resemble the supply/demand dynamics of the drug trade.
"Speaking at the CML’s conference, he said the FSA was at risk of creating “the kind of moral hazard it wishes to avoid”, by making consumers feel they need to take no responsibility for their own decisions."
Actually CR, that IS a good argument. This is indeed what regulation does. "Why if poppa and momma say it's safe to do, then it must be. I think I'll go pop a few acetominophen tabs for my hangover now..."
Now, let's get at the real meat and kill off the regs and other nonsence that allows these organizations to make the loans that caused the mess...To big to fail....why????
Ahhh, the ever present "caveat emptor" argument.
especially appealing so that these scum sucking asshats can continue their looting of the masses.
although I agree that we don't necessarily need/want a nanny state, I also have this nagging feeling that life wasn't so bad in the 1970's as an example, before we "modernized" our lending establishment.
if it ain't broke, don't fix it.
the corollary: if it is broke, fix it
and even more apropos: if it wasn't broke, and you fixed it and it did get broke, then go back to what you had before.
So if they don't like the term Drug Dealer, how about Idiot! they didn't even make responsible decisions to protect themselves in the long run.
.......my, my, my.........did a few here wake up on the wrong side of the cat-box?
yearning to learn
trouble is that last one makes sense,
now when have they ever made sense.
they still trying everything and its bother
havent done the right thing yet!
This is indeed what regulation does. "Why if poppa and momma say it's safe to do, then it must be. I think I'll go pop a few acetominophen tabs for my hangover now..."
I'm afraid that this is a vague argument that has both truths and non-truths embedded within.
For example, generally speaking it likely would be "safe" for most people to take out a mortgage if it is a 30 year fixed and mortgage payments are capped at the old 28/33% criteria and honest underwriting was done to ensure past history of payment responsibility and also job prospects/security.
or you could drop it to 20/25% if you wanted to account for the higher levels of debt out there right now.
an even better example: the regulated OTC drug market. Those don't just give the appearance of safe, they ARE safe. (within a reasonable relativistic bounds). Taking Tylenol 2 pills once in a while for a headache is safe.
Taking Midol for a period is safe.
of course, you can argue that there is that one person out there who might be harmed by such and such, and I won't argue. But LIFE isn't safe, so if you go by that then we can do nothing. Worse, even doing nothing isn't safe. that's why I will ask for rational rebuttals before they come.
Black Star Ranch wrote:
as in face down in the cat box
I wasn't even in on the BFF drinking party. last night either. No coffee yet.
To contrast my above argument,
regulation is bad at times and can give the appearance of safety, when none exists.
as example:
The Fed regulating our banks.
but there, the problem isn't that the regulation gives the false appearance of safety,
it's that FALSE regulation gives the appearance of safety.
in other words, the Fed was supposed to regulate, and didn't.
This is a major problem historically and also going forward. I'm not sure how we address this.
some people (such as Misean... good to see you btw) feel that we should just get rid of the regulation. My guess is that it's because they feel that there is no answer to the "false regulation" problem.
others feel we should expand regulation. IMO not understanding that often times our issue wasn't lack of regulation, but lack of enforcement of regulation.
others like me feel we should regulate, but moreso increase enforcement of said regulation. but then we come back to the question of HOW. after the events of the last year is there any doubt that our regulators are 100% captured and complicit? it's already business as usual for the big dogs, and they aren't even out of their last mess yet.
but a caveat emptor society will drop us to the dark ages quickly. Westernized life is too complex for people to be able to function in a regulation free caveat emptor setting.
(for instance, how would you ensure that your medicine has the medicine in there? how would you ensure that the steel bar you buy has steel in there? how would you ensure that the gas pump pumped out the correct volume of gas? etc...)
the only way you can know enough to not get royally screwed without at least some regulation is to live in an simplified agrarian lifestyle IMO
....prior to 50-years ago, "taking out a loan" was considered in a very negative context. Over the years, the concept has been made "acceptable" to the current day - lifestyles daily utilizing revolving credit, other peoples' money, and until recently, regularly accessed home equity lines of credit.
more than "acceptable"... Desirable!
I can't tell you how many times I was told that my equity was "trapped" in m home.
The only true way to extract equity is to sell the property. Barrowing against it is not real value. Kind of like mark to wishing.
CR,
Any idea what the trade numbers will mean in terms of the revision to Q3 GDP? Thx
Lemme guess before I even read the article- "They were doing Gods work"?
I weep for you equity...mine too for that matter...
(
Comrade Misean is Dope wrote:
I think what is lost is everyone focuses on regulation when the real problems lie in STRUCTURES. The bridge keeps falling down because the pilings aren't adequate. TBTF came into existence via not only deregulation but stripping away structures, nationally and internationally. IOW, the wild-wild west lawless behavior became legal. Relaxation of capital standards in Basal II, destruction of Glass-Steagall and the CFMA created a brave new world for finance to profit anyway they wanted without road signs, without road margins, without even a map.
Yearning to Learn wrote:
Lets be careful about not throwing the baby out with the bath water. I think people should have a choice to fix the rate on their mortgage for whatever term they want to. Somebody purchasing a starter home has absolutely no reason to take a 30 year fixed rate mortgage. That is just out right dumb. In fact for most people the interest premium on a 30 year fixed rate makes no sense because most people are not going to be in their homes for that long.
Lets not try and over complicate this- old fashioned lending used to require two ways out of the loan. The first was from the income of the borrower and the second way was the underlying collateral. BTW this is true irrespective of whether the borrower is an individual or corporation. In the madness of the last few years lenders forgot about the first way out and were just counting on the collateral to get them out.
The proposals are aimed at full disclosure, and to protect consumers from, uh, "drug dealers".
That talk is nothing but CLASS WARFARE! Why do you hate America, CR?
(Or Britain. Or some other place that will never see genuine financial reform, so it might as well be America.)
The mortgage lenders should just turn themselves into. Walk into the local police station and confess. Provide details on the entire cartel.
Sure I was dealing. Everyone was doing it. To single moms, anyone that I could give a loan to. Didn't care. But if you really want to stop this you need to get to the source. I'll give you his name for complete immunity.
A few hours later, immunity granted. Lender says "Give me a sheet of paper, I WILL NOT say his name out loud."
Paper provided and he scrawls "B e n B e r n a n k e". Reaching into his pocket, he pulls out a box of tic-tacs and quickly chews a few. Within seconds he is foaming at the mouth and slumps over dead.
Yearning to Learn wrote:
I think there is a problem in expecting somebody to do something that they can't. Asking government regulators to control the banking system would be the equivalent of asking unarmed police to regulate the street gangs. Isn't going to happen. The sad truth is that anybody who actually understands some of the complex products isn't going to be working at the Fed they will be on the other side making 10 times as much money. Secondly, even if you did find somebody who understood the products the Street has too much money and can buy off that individual or failing which that person's boss or ultimately the politician.
IMO given that we should be pushing for less regulation and more outright bans. No FDIC insured institution should be engaging in trading activities of any kind- that includes foreign exchange bond trading etc. Let all the stuff be done in unregulated entities and limit the amount of credit that can be extended by FDIC insured entities to these "trading units". Add one more requirement that all asset backed securities sold to regulated financial institution or entities subject to ERISA must have at least 10% of their assets on the books of an FDIC insured bank.
Totally disagree, 30 year fixed gives stability. The trick is to pay the home off in 10-12 years with increased principle payments.. Interest is lesser the expense if you look at dollars spent.
The Ditech Ad last night offer a 30yr fixed at 4.675%. Sweet right? No, 2.21 points! Plus fees! For the last 20 years mortgage lenders have had favorable borrowing spreads, and lots and lots of refinancing fees to feed their appetite. Now they see through regulation, transparency and rising rates that their income is going to be halved if not quartered and they don't like it.
What we need are negative interest rates to kick start the enconomy.
Say I get a mortgage for 500,000, have the bank send me $50K per year for say the first 10 years instead of me paying them. Then forgive all the interest etc. for the first 10 years. Then I just refiance every 9 years.
A WIN-WIN that will really get things moving!
Since the tax revenues already suck, how long until we see the deductibility of consumer credit interest payments return? That might put some marginal gas in the tank...
.
What's the over/under on doing away with the internet sales tax exemption, anyone?
No, 2.21 points!
yes, but when homes reach fmv then those points will only cost $1000-1500
how do you measure over/under on a yes/no proposition?
The FSA is right most people are innumerate, and not knowledgeable about financial affairs then there need to be rules to protect them. Surveys indicate that a lot trusted the mortgage salesman to do the right thing by them. On money issues the solution is to be paranoid because everyone is out to get your money! Actually a lot of mortgage salesmen at least assisted in fraud if not commited it with the alt-a issue. (400,000 a year at Wal-Mart and you don't live in Bentonville??) The fraud (in the sense of suspending reasonable disbelief) chain goes into at least the underwriters and possibly higher in the mortgage companies.
If you are going to pay it off in 10-12 year why would you pay the higher 30 year rate rather than the 10 year rate. That makes absolutely no sense.
The problem was not the adjustable rate mortgages--the problem was the teaser rate.
....I don't get the anger directed towards lenders..........they made a choice to lend or not to lend. They chose to lend to anything breathing. Normally, that would be to THEIR downfall. Our FedGov propped them up against our wishes. The supposed "crash" that was stopped was in my estimation as dangerous as the "WMDs" in Irag - DOWN WITH ALL INCUMBENTS for starters. No more professional politicians - anyone who thinks politicians need experience is an idiot. That's what career government employees have, NOT our elected reps. Give me a welder in Washington for 4-years as my representative any day.
And the fact that the mortgages were not underwritten at the full rate. (So that house prices had to go up or the mortgage would default) It was due to a lack of skin in the game in the lower levels of the industry. One solution is to pay mortgage salesmen like whole life insurance salesmen are paid over 3 years say 60% 20% 20$ with the last two payments coming only if the mortgage is current. (On an arm the final payment would come 1 year after the full rate kicks in)
ldmeier wrote:
I'm in the process of helping a relative realize they need to file for bankruptcy. After having looked at their balance sheet (which of course I had to put together), I have to say that a little ol' word like inumerate doesn't even come close to explaining the effin' CRAZYNESS that must have been going on out there in the last decade or two. Treating a significant percentage of the adult population as adults WILL NOT WORK.
"the industry should be allowed to treat its customers as adults, respecting their right to make their own decisions"
Governments should be allowed to treat lenders as adults, too. If they wrote bad loans, pay the price instead of asking for a neighbor to bail them out.
CrazyV,
Makes sense that if you are young, The the stability of pulling back on prepay the principle for job loss, pregnancy, health needs. It also stops you from over buying, the biggest problem. Run a thirty year amortization at 1% more then a fifteen and look a total interest paid.
"Surveys indicate that a lot trusted the mortgage salesman to do the right thing by them. On money issues the solution is to be paranoid because everyone is out to get your money! "
Seven Charged in 53-Count, Million-Dollar Mortgage Fraud Scheme
More Than 100 Properties Involved
Not Found
Time until...throw a window out there
This argument sounds good, but it isn't. Obviously the borrowers are still taking on the risk of "borrowing". The idea of the FSA regulations is full disclosure and to reduce the risk that the borrower will not know what they are signing.
For most borrowers, this is one of the largest financial decisions of their lives - and they probably should be provided adequate information
best to all
barfly - That does ot help their image. Shame on you for insulting such a profession.
(sarcasim off)
Black Star Ranch wrote:
and who is leading the charge- the politicians of course as a way of escaping their responsibility. I have a simple proposition for 2010- don't support any politician who is not prepared to support Sen. Sanders position that too big to fail is to big to exist. They should support a simple proposition that financial assistance to a financial institution can only come in the form of an FDIC take over. Sen Dorgan put it best- "too big to fail - is no no-fault capitalism". It would appear to me that Democrats and Republicans whether they be moderate or conservative or liberal should be willing to support this simple proposition. If they can't then they clearly are not representing us but rather the bankers who own them. Never has there been a more simple and uncomplicated litmus test.
Lobbyist Ben Dover
if we accept that a 30 year fixed has a higher interest than a 10 year ARM - I fail to understand how if you are (a) not going to own the home for more than 10 years (b) as you suggest pay it off in 10-12 years it makes sense to pay the higher the 30 year rate.
My point is simple pay the first one off, no matter how long you entend to live there. Are you buy a home or an investment. Maybe renting is best, especially in over inflated markets. It is all about the bottom line expense and protecting your family. Every transaction has it's challenges but simple math/risk will show the answer.
volker
you get use to it.
edit to add time since 10:05am
I can empathize with Mr. Wyles - In our own government, the philosophy seems to be that physicians, hospitals, insurance companies, banks, utilities, etc., are "evil" and must be placed under strict government control - profit is "bad" - the consumer is an infant that must be protected from their own bad judgments. Yes, changes must be made to disincentivize bad behavior, but the approach being taken by our own government is incorrect.
crazyv, it does make sense. We did just this twice. Also remember ARMs were not always offered, our first home was one of those old style mortgages requiring due diligence in origination and even before those nasty credit rating games being played today. The second was also a traditional 30 even though we only financed about 1/3 of the home from the sale of the other. We paid it down FAST for ownership. We've had to weather some bad storms in our lives, having a mortgage payment that was well within our means in comparison to renting or other products paid off in major ways for us. Its a type of insurance due to its stability over the long haul. KISS can pay off.
If you are going to pay it off in 10-12 year why would you pay the higher 30 year rate rather than the 10 year rate.
Flexibility. It allows you to pay the minimum if you need to. It's worth the marginally greater interest.
Speed wrote:
I agree. Allows for more productive use of $$$ if the opportunity comes along. And if we get currency collapse/hyperinflation a fixed 30 will be starbucks money in a few years.
"...but the approach being taken by our own government is incorrect. " - Terry
don't stop there. What is the right approach, in your opinion?
Would we have a society based on overconsumption if our money got more valuable in the future? We talk about sustainability but it feels like we have system based on exponential growth facilitated by depreciating currency. Is it possible to sustain the unsustainable?
Increasingly, I also have the feeling that regulators see lenders and intermediaries as the sweetshop owners – or worse, the drug-dealers at the school gates
sullying the name of drug dealers
face it
many if not most contracts are written in a vocabulary and syntax that is unintelligible to the average person
and...that...is ...by...design
the loan originators who deliberately deceived and lied to people
should be tried and imprisoned for a long time
the damage these miscreants did to the country boarders on treason and sabotage's
white collar crime is rarely punished in proportion to the harm
I must be in an alternative universe. Lets see if I can make this simple - if you were an investor would you rather invest for ten years at the 10 rate of 3.5 % or would you rather invest at the 30 year rate at 4.4% Pretty clear which one you would go for. Now explain to me that if it makes sense for an investor to do that why does it make sense for a borrower. If you are only going to be in the home for 10 years then essentially all you have is a 10 year loan. There is a separate question of whether you want the amortization schedule based on a 30 year loan or 10 year but that has nothing to do with the rate.
barfly wrote:
I am all for disclosure and minimum standards (such as no home loan without 20% hard cash down, no credit card if you don't meet criteria A, B and C; investments have to be suitable to the investor). I am not for a single commissioner heading up a DC agency (the CFPA), having sole authority to dictate the terms of every single financial product.
Do not believe the US population is dumb, but CAN be lead like sheep. Lots of my loan customers are school teachers and have borrowed so many times they know more about lending than I do.
These were two consecutive classified ads in our local bi-weekly rag. The basset hound tile on the left reminded me of them:
1st Ad (under Pets Needed/For Sale)........
MaryAnn wrote:
Fully one half of the population has an IQ below 100. They aren't on hoocoodanode discussing the finer points of various loan types, they are out shopping, maxing out their 17th credit card.
Terry wrote:
We are grasping at the wrong end of the stick. The problem was that all this junk via Wall Street alchemy and the rating agencies was allowed to infect the rest of the economy. The people we should be holding accountable are the ones who were willing to turn off their brains when they purchased these assets based on the rating agencies. BTW your suggested solution is exactly what got us into this mess- e.g. bank regulators establishing criterion A- if it was mortgage banks had to hold lesser capital against it. Or Pension fund trustees laying down rules that you had to purchase stuff that was AAA rated
Terry, I'm just the opposite with respect to a CFPA. Why have a hodge-podge of regulatory agencies, who have proven themselves inadequate to the task, instead of one whose sole focus is upon consumer protection?
MLM wrote:
Another way of looking at this: most everyone knows (and judges will so inform) that representing yourself in a criminal case is more than crazy, it should be completely discouraged by the system.
Similarly, no one should enter negotiations and agreement on a substantial mortgage without the paid assistance of an attorney working for the borrower. The innumerateness won't go away, and the deals are very complex. It is far to easy for the borrower to be taken advantage of by the broker/lender.
100k loan at 30yrs:4.4%
$500/mo
$200 extra principal / mo
makes a 16yr loan at $700/mo
and is flexible
100k loan at 15yrs:3.3%
$705/mo
I must be in an alternative universe. Lets see if I can make this simple - if you were an investor would you rather invest for ten years at the 10 rate of 3.5 % or would you rather invest at the 30 year rate at 4.4% Pretty clear which one you would go for.
Optionality has value.
With a 30-year, you can pay on a 10 year or a 30 year schedule.
With a 10 year, you're stuck.
I'll repeat, since you don't seem to grasp it: Optionality has value.
There are many reasons why you might decide to drop from 10 to 30. The two big ones:
1) You lose your job. With a 10 year note, now you're completely fucked. With a 30, you just lower your payments
2) Inflation. With a 30 year, that's like finding money in the street.
I'll re-repeat, since you don't seem to grasp it: Optionality has value.
CrazyV,
As an investor I do not play the equity game of numbers. I pay X for the property and it is worth X until the day it is sold. Then and only then is the profit or loss real. My current goal is to buy one rental property a year cash. The cost of money is the single most expensive expense. I play a safe slow growth game. You wish to be a speculator at others profit and loss including you. Problem is I will get to the same place a little slower but can sleep at night and not run from creditors when things go wrong. The collapse of the Faux economy is from Speculation and not good solid business practice by all players top to bottom. I see what you are doing but your risk reward for short term profits, I would never subject my family to. This is freedom of choice and most can't handle the loss side of it. Limited speculation has it's place, just like Arms do but improper use by people how can not handle or understand them is the exploding bomb now.
Some homeowners are starting to understand how it works:
"You work so hard. Put a lot of money down on your house. You pay your taxes. You pay your mortgage, and it's all stolen from you,” said Jeff Zerner, the homeowner.
He and his wife, Yanthy, found out about the foreclosure when the new owner posted a notice on their door Nov. 4.“I get this notice that says you have five days to vacate the property,” he said. “So I called the number (on the notice) and I say, ‘Who are you?’ and they say, ‘We're the legal owners of this house. It went up for foreclosure."
Just days before, the Zerners thought their home was safe. They had finished their trial modification with Chase and were led to believe they would qualify for a permanent modification...
What happened?
The foreclosure process and modification process are run by separate entities. The two sides forgot to communicate.
crazyv wrote:
I think this caused some confusion. Commenters discussing 10 year loans were assuming 10 year fully amortized. I know I was.
Found a paper last night following up on a link posted by EHP...the same author, Aleklett, has a new paper coming out in Energy Policy (subject of last night's link) that I am quite eager to see, this earlier one from December of 2007 is an excellent bit of research. I am going to go back through his earlier work, as the iterative downward revisions of IEA's 2030 oil production forecast are moving towards his viewpoint (though it is still much more pessimistic than the current IEA forecast).
http://www.internationaltransportforum.org/jtrc/DiscussionPapers/DiscussionPaper17.pdf
Speed,
Spot on! I have a simple rule buy 80% of what you can afford and pay down with the other 20%. You can also weight not pay the prepayment on the principle on the last 10 years and divert the cash to savings. Savings interest may even be higher then the mortgage rate depending on the cycle.That is when you pay the hard dollars back with little interest dollars.
LOL.......the house is burning down and you're discussing the interest rate on the wall-coverings and draperies............I gotta go build something.........have a great day, All
http://www.thismodernworld.com/arc/2009/TMW2009-08-26colorlowrespy.jpg
JimPortlandOR wrote:
Of course, that doesn't solve the problem of all those enticing credit card offers that bombard the unwary from all directions.
If you had asked me five years ago, I would have said that adults should be treated like adults and let the chips fall it will all work out in the long run. As far as I'm concerned, reality has intruded on that little fantasy in a major way.
Bezos will never let that happen...
time frame...the day after CA becomes a territory
MLM wrote:
The borrowers are not much that different now than 20 years ago. What has changed reality is that scumbag lenders and brokers have no current concept of responsible lending (and the fiduciary advice they give to borrowers). Once mortgages became instruments of leveraged borrowing, derivatives, credit swaps, and financial non-transparency, then the game had completely changed.
Like you, I'd like to think adults should be treated as adults. The FIRE industry now treats adults as scam targets, so countermeasures are completely in order (starting with legal/financial advice for the borrower before anything is agreed to).
Off topic, more "deficits don't matter" from NakedCapitalism:
“President Obama, deficit terrorism is not the answer!” « naked capitalism
The basic point, as I understand it, is that the more government spends, the higher growth will be, and the larger tax revenues will be in the longer term. Apparently, there is no concern about the long term effects of public debt. And previous attempts to drive the economy thru government spending failed because they 1) weren't large enough 2) were canceled too soon.
The FIRE industry now treats adults as scam targets, so countermeasures are completely in order (starting with legal/financial advice for the borrower before anything is agreed to).
Well, and the government doesn't treat the FIRE industry like adults.
More like the petulant child standing at the checkout counter screaming for candy.
The money shot from the above article:
In any event, the President’s single-minded focus on the budget deficit is profoundly misguided. Why? Because a sovereign government can always afford to buy anything that is for sale in its own currency –whether that is unemployed labor, real estate, or bad financial assets.
Why doesn't this seem to make sense?
Eric wrote:
yep. But the banksters are actually financial terrorists. How about military tribunals for GS/JPM/BOA/Wells/et. al.?
Nuke wrote:
It does make sense, but the words 'taxes' and 'deficits' have been turned into jihad language over the last 30 years, and no government can counter the financial/economic absurdity that allows wars to be fought endlessly on borrowed money, but putting people to work must be forgotten because "we can't afford it".
Why doesn't this seem to make sense?
.
The exorbitant privilege of paxamericana allows our putative leaders to become senseless.
The frenzy and relatively good pricing is mostly the result of restricting supply. Told you so Jim
Jim:
I would counter that this only makes sense when you are the dominant global power with the reserve currency who can dictate terms to other countries. Otherwise, it is nonsense.
In other words, the fact that we have achieved global military and political supremacy allows us to spend endless amounts of money we print. I think Obama knows this, which is why he is exempting the military from any spending restraints.
just the mere fact that the trash is traded, and income is won from it, is Wrong.
stealth theft
" November 14, 2009
Russian Prime Minister Vladimir Putin has signed the final agreement between all partners for the building and operating of the South Stream pipeline, RIA Novosti reported Nov. 14. The agreement between Russia and Slovenia had been signed earlier by the energy ministers of both countries."
The term I like is adult toddler. Do as you are told, They did and bought into the house/car bling is the golden prize!
just kidding-
people trade junk all the time. just go to any pick-a-part salvage lot.
OK, edit,
allowed our putative leaders to become senseless.
but they're still at it.
Nuke wrote:
Pork galore!
"....I don't get the anger directed towards lenders..........they made a choice to lend or not to lend. They chose to lend to anything breathing. Normally, that would be to THEIR downfall. Our FedGov propped them up against our wishes. The supposed "crash" that was stopped was in my estimation as dangerous as the "WMDs" in Irag - DOWN WITH ALL INCUMBENTS for starters. No more professional politicians - anyone who thinks politicians need experience is an idiot. That's what career government employees have, NOT our elected reps. Give me a welder in Washington for 4-years as my representative any day."
Yeah, we tried that here in California with term limits. I voted for it myself, one of my more stupid electoral decisions. Aside from some hoary old pols playing musical chairs, see e.g. Edmund G. Brown Jr., the only experts are the lobbyists now.
"In any event, the President’s single-minded focus on the budget deficit is profoundly misguided. Why? Because a sovereign government can always afford to buy anything that is for sale in its own currency –whether that is unemployed labor, real estate, or bad financial assets.
Why doesn't this seem to make sense? "
If it is hard currency, globally fungible? Perhaps otherwise a country falls into the trap that put paid to the Soviet economy: Nobody knows what anything costs.
Pass a law that politicians can't hold a lobbyist position for at least 10 years after they leave office. That would be the next step.
Nobody knows what anything costs.
.
Doesn't that about sum up x% of this blogfest?
. sorry, my reply button appears to be fritzing...
Did you make those up BSR? They're very funny. At least he (or she) has laid out alternative strategies!
"Pass a law that politicians can't hold a lobbyist position for at least 10 years after they leave office."
Those same politicians are supposed to pass a law that calls for that?
First pass a law against sin.
Many states the voters can put laws on the ballot to be voted on and by pass the politicians. I would like to make Being Stupid against the law. It would take care of most the problems.
Lobbyist Ben Dover wrote:
Yes! Then make the total number of registered lobbyists be limited to twice the number of congresspeople (instead of 10 or 20 to 1 - or more - as it is now).. Make them bid for a seat on the lobby panel.
Then forbid lobbyists from being appointed to government positions or elected for 5 years after leaving lobbying.
Then enact criminal penality (felonies) for violations of the above. With no white collar prisons for conviction: hard time.. (and attorneys lose their license when convicted of felonies, currently)
crazyv wrote:
You've just created a new business that will fill the cracks, the money will be lent out to a fund of fund group. This is capitalism, it always finds a work around.
Obviously Basel II has some serious flaws as it forced banks into more risk exposure, not less.
Forcing banks to have contracyclical capital requirements(like in Spain) and exponential risk reserving for trading purposes allows banks to limit how they can operate yet limits the possibility of regulatory capture.