If you want to solve the predatory lending problem, make a law that each change in the interest rate of a loan requires a separate and contemporaneous act of consent by the borrower.

^ It's not $45 an hour plus benefits, it's $45/hour if you count paid vacation and benefits as salary.

Here's a graphic from the analysis the NYT did.

Note the actual wage difference is $3/hr. Also, note that in the full article, they estimate the difference in labor costs (using the all inclusive $73/hr and $59/hr figures), would amount to an $800 difference in the price of each vehicle.

Labor costs account for about 10% of the cost of each vehicle. Suppose the UAW decided to agree to become slave labor -- working the same hours for free. That amounts to a 10% discount on the sticker price of each car.

Now, go find an American-made car you like, give it a 10% discount, and go try to get a loan to buy it.

You can't? Wonder if it might have something to do with banks not making loans because predatory lending and BS derivatives sunk the credit market.

But hey, gotta be those lazy ass auto workers, or the stupid American car companies, right?

Never mind that such giants as Honda and Toyota are cutting back, too.

I'm not a fan of people getting something they didn't earn, but that's not what happened with the UAW. I'm not a fan of many of the decisions the big three made, but that's not why they're in this much trouble.

I am a fan of keeping these companies from going out of business and having to lay off millions of workers, when our economy is already in the toilet.

Democrats are demanding restructuring, and this whole "bailout" business is in the form of a loan that is expected to be paid back, with interest.

Sounds like a good investment of taxpayer money to me.

They didn't come well prepared to this meeting it would seem. I also disagree that predatory lending is the leading result of the auto industries problems. The foremost problem would be the UAW, us much as they would like to think they are entitled to more than the average worked, they aren't and they are strangling these companies from the inside out. I'm sorry but a guy turning bolts all day should in no way get $45 an hour plus benefits and a pension. The second problem is the slow speed at with the American automobile companies are adapting to the change in the public's opinion of larger less economical vehicles.

>> ^chilaxe:
^Austrian economics occupies a fringe position in the marketplace of ideas. If they're really such geniuses, they should be able to find a way into a more central position. That would be the proactive course of action, rather than just railing against economics "dumbasses".
Your argument is supposed to be that unregulated markets are more efficient, but you're conflating that argument with your moral advocacy of small government and low taxes, thereby limiting the appeal of your efficiency argument to people who agree with your moral argument.


But that's exactly what's going to happen. Why assume that this should have happened already? One thing that the Keynesians had in their favor and made it look like their ideas were working was that the dollar retained its reserve currency status in 1971 despite severing from what got it there. For 30 years, our now fiat government could build up these excesses because we had the unique position of being able to export our inflation all around the world. Now, though, the market is getting saturated with paper, but not with goods. You have massive emerging economies like China and India that have happily taken our factories and debt in exchange for a lengthy consumption binge. Now they control the source of the world's wealth and will stop buying our paper. They've already got 2 trillion of our money in reserves, they just announced a stimulus plan where they may use some of it on this rally.

Did you really think this trend could go on forever, where we become 100% service based and foreign producers continually loan us their savings to consume their products so that they can go without them and have bigger reserves of our paper?

Your argument is supposed to be that unregulated markets are more efficient, but you're conflating that argument with your moral advocacy of small government and low taxes, thereby limiting the appeal of your efficiency argument to people who agree with your moral argument.

It's not just moral, it's factual and rational. Nobody spends money with more thrift than its earner, thus you want to limit the amount of money non-earners are controlling to duties which truly lead to more benefits than costs. Also, I love the term regulation. Very popular these days, that's how socialism keeps building on itself. Socialist program causing a problem? Good, shift the blame on spontaneous human evolution into becoming more greedy, and create another socialist program to address it. Rinse and repeat. For example, the predatory lending would have never gotten to the extreme that it did had interest rates not been price fixed far lower than the market would have set them. That false signal caused people to make all kinds of malinvestments that they otherwise would not have. Market got drunk, socialist central bank spiked the punch. Who's to blame? According to socialists, the lack of a designated driver program. Um no, that's not it, the problem was that the 5th plank of the communist manifesto is spiking the punch.

Oh yes, YES.

Exactly. Government in and of itself is not bad. This current trend of suggesting that ANYTHING government run is a bad idea... WTF? Yeah, let's make EVERYTHING privately run, because they're all so honest and good and have everyones best interest at heart.

What a load of shit.

Case in point, your poorly regulated banking system that let the whole sub prime shit happen in the first place etc.

Countries like Australia (yeah, I'm using my country again, well, because we just came out number one on a world poll of most desirable places to live in terms of prosperity and lifestyle) have a very regulated banking industry in which, while there are bigwigs who make way too much money, and where you can get a loan even though you really shouldn't because you're going to have a hard time paying it back, there is none of this predatory lending or bullshit that was going on in the states.

It IS about the people who run a government OR a company, there are great examples of both, and there are times and places for both.

Things like health, public transport, police, fire etc. SHOULD NOT be privately run because YOU SHOULD NOT BE MAKING MONEY from them... they are a SERVICE, they should be the best SERVICE possible, not the best return for a few investors.

Go Mr Black, Go.

>> ^BansheeX:
Do you understand that in a libertarian society, it is illegal to infringe on a person's rights, whether you're a company or an individual? How do you interpret my post as wanting to let companies do ANYTHING they please?

Force of habit, I'm used to bumping heads with Republicans, and rarely do Libertarians preach about the need to restrict the power of corporations to infringe on people's individual rights. Most just talk about the tyranny of regulation, and often go so far as to debate the necessity of OSHA, USDA and even the FTC (which seems to have faded from existence in my lifetime).

"Economics" is too vague. There are many different branches, the dominant philosophy changes with time. Currently, it is neo-Keynesian, but that will change after its collapse. It matters not that 90% of current economics doctorates are in this manner of thinking. The Austrians were already proven right from the FIRST great depression, do we really need another one to figure out that the Federal Reserve is the equivalent of the benevolent dictator argument?

Not to lean too heavily on an appeal to authority, but are you saying there's something about Austria in the Great Depression that disproves the underpinnings of what 90% of economists believe? Shouldn't someone at Universities around the world be notified?

I'm just reacting to the insistence that there's something fundamentally flawed with liberal philosophy. Usually that "something flawed" is that "socialism doesn't work" or "the free market fixes everything" or some other nonsensical absolute assertion.

For example, you said I don't understand which powers of government are "justified" and which ones aren't. That's not true, we just have a different concept of what's justified.

You also questioned whether or not I'd go along with letting the government have and use a hypothetical mind control device -- and of course I'd be opposed to such a thing. I'm all for protecting individual rights, and limiting government's power over the individual, I just don't think free markets are always the best way to fulfill every need in society, merely most of them.

The market is millions of people making mutually agreeable transactions. The government is not the market, they're just suppose to protect people's property and settle disputes on a national and domestic level. And it isn't black and white anyway. For example, I disagree with fellow libertarians in that I want to keep the FDA for information, labelling, and enforcement of what constitutes terms like "organic" and "free range," but remove their ability to ban products. That power is currently used for collusive anti-competitive reasons. Go on wikipedia and look up Stevia for one example, the artificial sweetener lobby bribed officials to block its use in products because it was a natural, no-patent substitute to crap like "Aspartame" which would have cost them billions.

I agree on that issue, that there's abuse of the power that needs to stop, but I don't think the solution is to remove government power to ban products.

I'm not entirely sure what such a law would say, there are risks everywhere to everything.

That's easy: show a schedule of payments to potential purchasers, so they know what their obligations will be with regards to the loan.

There's differing opinions out there about who's at fault for the crisis, but part of the problem did start with predatory lending practices, motivated by the hunger for those mortgage backed securities.

Ultimately, though, their only loss will be their credit and the home they couldn't afford because they can walk away and leave their bank or lender with the unpaid loan and depreciating house. That's what the government is trying to bail out with honest taxpayer money.

Actually, since we're still under the auspices of the Bush administration, it's mostly going to help out banks who leveraged themselves to invest in mortgage backed securities. Regular people who got screwed by predatory lending are having to get by with the scraps the Democrats can attach to the legislation.

I know it's all socialism to you, but to me there's a vast difference in those things.

Instead of letting the chips fall where they may, we're trying to delay a necessary recession AGAIN with inflation. Prices want to come down from these artificial levels, and have those jobs reallocate to manufacturing exports because exports are the only thing a the weak dollar is good for.

I agree with the assessment of the current situation, it does seem like we're putting off the inevitable. I'm a cynic though, I think they want to make sure the next President gets the big market crash, and they're intentionally delaying things for that purpose, even at the risk of making that crash worse.

And it will be a replay of the FDR administration with Obama, but pretty effing bad under McCain [snip]

That's exactly how I see it too, and I couldn't be more happy at the thought of a new FDR-style administration, I just hope we don't have another Great Depression and World War to go with it.

Quite the discussion of economic philosophy, in the comments on a video of Obama talking about Republicans being pridefully ignorant on energy.

Transcript for the hard of hearing/thinking:

Part 1: how to effectively pause while the audience is interrupting you
thats all right....lets....excuse me....hey.....hold on a second...........(audience chanting)....hold on....hold on everybody...excuse me young man...this is going to be question and answer session.....youll have your chance to answer your question, you dont have to disturb the whole meeting.

Part 2: how to stall while you are thinking of an answer to the question
alright alright, well uh i-i-i-they-uh-well-i-i-i-guess-i-i-i-hold-on-hold a second-everybody-i want everybody to be respectful, thats why were having a town hall meeting, this-this-this is democracy at work, and he-he asked a legitimate question so i want to give him an answer. um, i think you are misinformed about when you say not one time, every issue you spoke of i did speak about

Part 3: how to fabricate an answer to a question off the top of your head
ive been talking about predatory lending for the last two years in th us senate, and worked to pass legislation to prevent it when i was in the state legislature. and i have repeatedly said that many of the uh-uh predatory loans that were made in the mortgage system did target african american latino communities. ive said that repeatedly. number two, gina six. i was the first candidate to get out there and say that this was wrong and we should change it. thats number two, when sean bell got shot i put out a statement immediately saying this is a problem.

Part 4: how to ineffectively cope with your questioner confronting the absurdity of your response, in stutter
so so all all all i all im all all all im im saying im sorry wait wait wait dont start wait wait ho ho ho hold on. dont start dont start shouting back im just answering your question. on on on each of on each of these issues ive spoken out, not i may not have spoken out the way you would have wanted me to speak out, which is which is fine, because no no no i understand, no no look look but but, well well they we well they uh, re-re-re-remember i have other people so im just trying to answer your question.

Part 5: how to make excuses for your answer, in stutter
so so all all all i so uh all i uh ho ho ho ho hold on dont dont dont start shouting back im just answering your question on on on-on each of on each of these issues....i have spoken out, now i may not have spoken out the way you would have wanted me to speak out, which is which is fine, because i, no i understand, no, but but, uh , which is fine, well uh uh, well uh uh they well uh hold on a second, re-re-re-remember well ive got other people.

Part 6: how to deflect attention from your ridiculous response, while trying to establish false credibility through past actions, in stutter
heres what im suggesting is, is that on each of these issues that you mention ive spoken out and ive spoken out forcefully, and i-i-i-i-i uh listen i was a civil rights lawyer i-i-i-i-i i have i have passed the first racial profiling legislation in illinois i uh i passed i-i-i-i passed hold on a second i passed some of the-the-the-the toughest death penalty reform legislation in illinois so-so-so these are issues ive worked on on for decades

Part 7: how to assault your questioner, then raise your voice as you proudly recite a feel-good, meaningless, cliched statement to distract your audience from what just happened
now that doesnt mean that im always going to satisfy the way you want these issues framed. which which which uh gives you the option of voting for someone else, it gives you the option to run for office yourself, but, the, those, those are all options, but, but the one thing but the one thing that i think is important the one thing that i think is important, is that, is that we are respectful to towards each other, and what is true, the one thing i believe is that the only way we are going to solve our problems in this country, the only way we are going to solve our problems in this country is if all of us come together black, white, hispanic, asian, native american, young old, disabled, gay, straight that i think has got to be our agenda. alright. okay.

the two biggest factors in the US economy tanking are: credit companies being allowed free-rein and the Iraq war

How can they sit there and admit that we are basically sending US money to the arab world and then try to say that the money will be spent back to us?! How in the world do they really think all the money we spend in Iraq will make it back to the US? Iraqi people are gonna start ordering stuff off of US ebay?!
Allowing the credit companies to fleece America STILL is killing the middle class; rates keep getting cut (so the credit companies have lower interest) but notice credit companies are not cutting rates for the end user - the middle class. Thus they credit companies (who admittedly made some serious mistakes by their rampant predatory lending practices) are doing everything they can to retain all profits rather than extend the falling interest to the consumer.

Incredibly, just the week the agency I work for, The Reinvestment Fund in Philadelphia, released a study of predatory lending practices by the sub-prime lending market. You can download a PDF of the study at http://www.trfund.com/news/press/pr040407.html .