Living the Good Life: The Good Old Days Are Now
Here's another comparison of consumer purchasing power in the 1960s versus today, based on the time cost of common household appliances like a kitchen oven. The Sears Kenmore oven pictured below retailed for $330 in 1966, which would represent 121.3 hours of work (about three weeks) at the average hourly wage in that year (ignoring taxes).
At the current average hourly wage of $19.54, today's average consumer would earn roughly $2,370 working 121.3 hours, and would be able to furnish their entire kitchen and laundry room with the eight new appliances pictured below (click to enlarge) from Best Buy including a high-efficiency front-loading washing machine, a super capacity gas dryer, a 30-inch gas stove, a 8.8 cubic feet chest freezer, a 16.5 cubic foot refrigerator, a 24-inch dishwasher, a mid-size microwave and a blender:
In other words, with the income earned working 121 hours, the typical consumer 45 years ago in 1965 would have only been able to purchase a single appliance - the electric oven pictured above, compared to the eight appliances that a typical consumer could purchase today with the income earned working 121 hours.
Measured by what is ultimately most important, the value of our time, household appliances keep getting cheaper and cheaper, thanks to innovation, technology improvements, supply chain efficiencies, increases in productivity and other market-driven efficiencies that drive prices lower and lower year by year. As much as we hear about declines in median income, economic stagnation, the disappearance of the middle class, falling real wages, increasing income inequality, the data tell a much different story: The rich are getting richer and the poor are getting richer.
73 Comments:
I've shown data before that a teen today living at home, for example, can work roughly the same hours to buy a new 2011 Ford F-350 as a teen would work in 1985 to buy a new 1985 Ford F-350.
So, all the quality improvements of a Ford F-350 over the past 25 years was free.
And when the difference in interest rates are included (since most people live month-to-month), a new 2011 Ford F-350 is much cheaper today than a new 1985 Ford F-350 was in 1985.
And for those people who believe inflation is understated and real GDP is overstated, because of some overdue cautious changes in how the CPI is calculated, they're ignoring a most dynamic economy:
Part I
Why the Economy Is a Lot Stronger Than You Think
FEBRUARY 13, 2006
In a knowledge-based world, the traditional measures don't tell the story. Intangibles like R&D are tracked poorly, if at all. Factor them in and everything changes.
What if we told you that businesses are investing about $1 trillion a year more than the official numbers show? Or that the savings rate, far from being negative, is actually positive? Or, for that matter, that our deficit with the rest of the world is much smaller than advertised, and that gross domestic product may be growing faster than the latest gloomy numbers show? You'd be pretty surprised, wouldn't you?
Everyone knows the U.S. is well down the road to becoming a knowledge economy, one driven by ideas and innovation.
What you may not realize is that the government's decades-old system of number collection and crunching captures investments in equipment, buildings, and software, but for the most part misses the growing portion of GDP that is generating the cool, game-changing ideas.
"As we've become a more knowledge-based economy," says University of Maryland economist Charles R. Hulten, "our statistics have not shifted to capture the effects."
The statistical wizards at the Bureau of Economic Analysis in Washington can whip up a spreadsheet showing how much the railroads spend on furniture ($39 million in 2004, to be exact). But they have no way of tracking the billions of dollars companies spend each year on innovation and product design, brand-building, employee training, or any of the other intangible investments required to compete in today's global economy.
That means that the resources put into creating such world-beating innovations as the anticancer drug Avastin, inhaled insulin, Starbuck's, exchange-traded funds, and yes, even the iPod, don't show up in the official numbers.
As Greenspan would be the first to tell you, it's a lot easier counting how many widgets the nation produces in a year than quantifying the creation and marketing of knowledge. After all, we're talking about intangibles: brand equity, the development of talent, the export of best practices.
By the early '90s, Greenspan was becoming increasingly frustrated by the official numbers' inability to explain a rapidly evolving economy.
In 1996 and 1997 he refused to accept conventional data telling him that productivity growth was falling in much of the service sector, noting -- correctly, as it turns out -- that "this pattern is highly unlikely." He also pointed out that the official numbers for consumer inflation were too high.
Part II
At the Washington offices of the BEA, J. Steven Landefeld, who became director in 1995, felt pressure to include numbers that better reflected the knowledge economy. Landefeld isn't a rash fellow, and the pace of change at the BEA, while quick for a statistical agency, would be called deliberate by most.
But in 1999 -- six decades after Kuznets laid the groundwork for calculating GDP -- Landefeld and the BEA decided to break with the past.
The BEA started treating business spending on software as a long-lived investment. The decision was overdue. Companies were spending more than $150 billion annually on software, far more than the $100 billion for computer hardware. And the software often stayed in use longer than the hardware.
Silly as it may seem now, it was a revolutionary change at the time. But over the past seven years the economy has continued to evolve while the numbers we use to capture it have remained the same.
Globalization, outsourcing, and the emphasis on innovation and creativity are forcing businesses to shift at a dramatic rate from tangible to intangible investments.
Want to see how this works? Grab your iPod, flip it over, and read the script at the bottom. It says: "Designed by Apple in California. Assembled in China."
Where the gizmo is made is immaterial to its popularity. It is great design, technical innovation, and savvy marketing that have helped Apple Computer sell more than 40 million iPods.
Yet the folks at the BEA don't count what Apple spends on R&D and brand development, which totaled at least $800 million in 2005.
Rather, they count each iPod twice: when it arrives from China, and when it sells. That, in effect, reduces Apple -- one of the world's greatest innovators -- to a reseller of imported goods.
But look at how our perception of the economy changes once you add in things like R&D and brand-building.
The published data show that total investment -- business, residential, and government -- has been falling over the past three decades as a share of national spending, while consumption has been rising. Add in the intangible investments provided by our three economists, and the picture changes completely.
Total investment rises, going from 23.8% of national spending in the 1970s to 25.1% in the early 2000s -- much higher than the 18.3% the conventional numbers show.
That helps explain why the economy has sustained strong productivity growth, and why foreign investors continue to pour money into the U.S.
Ricardo Hausmann, director of Harvard's Center for International Development, believes it should be. He describes these cross-border flows of knowhow as "dark matter."
Hausmann notes that U.S. multinationals consistently earn higher rates of return than their foreign counterparts -- an average of 6% on foreign operations since 2000, vs. the 1.2% foreign multinationals earn in the U.S., according to the latest BEA figures.
From that, he infers that the multinationals are benefiting, in part, from knowledge exported from the U.S., a country with faster productivity growth than the rest of the industrialized world.
In the private sector, manufactured goods become cheaper and better every year.
In the federal sector, civilian and military, manufactured goods become more expensive and less reliable every year.
Why the Economy Is a Lot Stronger Than You Think
FEBRUARY 13, 2006 ...
The economy is still not all that strong five years after the commentary was written.
Since 2006 we have seen a contracting real economy create a collapse in the labour participation rate after decades during which the entry of women had caused a rise from 56% in the early 1960s to 64% in the late 1990s.
During this time we have seen a huge increase in the number of people seeking assistance.
State and local governments all over the country are broke and are forced to slash jobs at very high rates.
Businesses are being crushed by a growing regulatory burden.
As David Walker points out, The US cannot grow itself out of the unfunded liability problem.
In the 1960s Sears woud service what they sell. good luck getting anything repaired today.
As for the F-350 some things are a lot better, and some things are a lot worse. The new f-350 is probably cheaper because it IS cheaper. The bill may yet come home in the maintenance.
On a cradle to grave basis, for the same amount of material hauled the same miles I seriously doubt the new F-350 is cheaper.
Sticker price and monthly payments are important, but the real issue is the ultimate cost per ton mile. It is productivity that counts.
The published data show that total investment -- business, residential, and government -- has been falling over the past three decades as a share of national spending, while consumption has been rising.
===============================
Two ways to look at this. As an investor, why invest more if spending and consumption are rising while you sit on your hands?
As a consumer, it appears that you spend more and get less, or else you get more stuff that is crap you throw away.
As I pointed out above, that new f-350 may well cost a lot more over its lifetime, meaning the consumer spends more and gets less, even if the new f-350 is nominally a nicer vehicle at a lower real dollar price.
VangelV says: "The economy is still not all that strong five years after the commentary was written (etc. etc.)"
That's because we got the opposite of Reaganomics, i.e. Obamanomics.
The government has one foot on the accelerator and the other foot on the brake.
We're burning cash as fast as possible - several trillion dollars just in the past three years, which we'll all pay for in the future, one way or another.
Hydra says: "The bill may yet come home in the maintenance (and) the real issue is the ultimate cost per ton mile."
You may want to look at a semi truck or a locomotive.
Ford F-150 Truck of the Year 2009
"Delivers unmatched capability and unsurpassed fuel economy."
The new F-150 delivers class-leading towing capability of 11,300 pounds and hauling capacity of 3,030 pounds – a combination no other competitor can match.
F-150 has improved its fuel economy by an average of 8 percent across the entire lineup, thanks to a wide range of engineering enhancements.
•“Automotive Excellence” award in the Workhorse Category from Popular Mechanics.
•“Top Safety Pick” from the Insurance Institute for Highway Safety for its standard safety technology.
Every new car has costs. The "maintenance" and "repair" categories over the first five years are relatively low.
>>> And the software often stayed in use longer than the hardware.
LOL, "y2k".
Before most of the Baby-Boomers retire, there will be a "correcting mechanism" to make older Americans work longer, because younger Americans won't work that hard to provide the goods & services, and taxes, to support a massive retired population.
>>> During this time we have seen a huge increase in the number of people seeking assistance.
Ludicrously irrelevant. People have been choosing to live at their max income/outgo margins for a considerable time. This means little investment outside their home ownership and very little reserve capital to deal with short to medium downturns.
>>> State and local governments all over the country are broke
Also ludicrously irrelevant, you nit, and rather blatantly so. What did the states do with the windfall from the tobacco lawsuit? They padded their budgets with them, using them to increase the amount of money they spent -- including long-term commitments!! -- despite the fact that the tobacco settlements were a one-time influx of cash. What has every state, just about, done with any influx of capital, regardless of the source, for the last 20+ years? Spent it, that's what, and, worse still, used that spending to create long-term commitments and not one-time "we'll pay it this year and see what kind of money we have next year" things. So it's pretty much a rather ludicrously obvious thing that, when there is a downturn, that the state and local governments would fail to be able to keep up with that level of financial outlay.
>>> As David Walker points out, The US cannot grow itself out of the unfunded liability problem.
Of course it can, but it won't happen under the regulatory burden of which you speak, and it cannot do so as long as Congress refuses to control the increase in such unfunded liabilities rather than to seek to at least fix them at a certain value. When the government force-passes an abortion like ObamaCare when it's clear that it can't be paid for, then does everything possible to not repeal it, that does limit our capacity to grow past the liability values. So the statement is only correct when you allow Congress to continue to act irresponsibly. That was always rather a "Duh! Water, stupid" concept to even a fish.
>>> In the 1960s Sears woud service what they sell. good luck getting anything repaired today.
ANNNK. Actually, if Sears makes it, they service it. I've got a friend who has had their garbage disposal, made and installed by Sears, fail (not due to error on their part). Sears has come out and fixed it with no argument.
>>> As for the F-350 some things are a lot better, and some things are a lot worse. The new f-350 is probably cheaper because it IS cheaper. The bill may yet come home in the maintenance.
ANNNKK. Name it, dude, instead of making vague undefined pronouncements.
WHAT isn't as good as it was in the 1980s?
The tires? Better
The engine? Better
The crash worthiness? Better.
The fuel economy? Better.
The power derived from less fuel? Better.
The sound system? Better.
The instrumentation? Better.
In general, the truck is probably a bad choice.
American cars in the 80s were unreliable as hell. After about 100k miles they were money pits. This is no longer the case, almost all cars nowadays make it to 150k to 200k miles before they become labors of love to keep in service. And almost all the increase in costs since that time are due to government mandated fuel-economy improvements (despite the fact that fuel costs are only a distinct but minor fraction of the expense of car operation and ownership), as well as equally mandated improvements in crash-worthiness.
In the 1960s Sears woud service what they sell. good luck getting anything repaired today. ~Hydra
Actually, the Sears service center is directly across the road from the retail store here in Flint, MI.
I took the snow blower I bought from Sears to the service center for a tune up.
And as OBloodyHell pointed out, Sears will send a service tech to your house to repair major appliances.
Hydra, here's the link for Sears Service.
According to the web site, you can even get 24 hour service.
They service:
Air Conditioning (Window Unit) Repair
Camcorder Repair
Chipper Repair
Compactor Repair
Dehumidifier Repair
Digital Camera Repair
Dishwasher Repair
Dishwasher Maintenance
Disposal Repair
Dryer Repair Elliptical Repair Exercise Bike Repair
Freezer Repair
Garage Door Opener Repair
Garage Door Repair
Grill Repair
Grill Maintenance
Air Conditioning and Heating System Repair
Air Conditioning and Heating System Preventive Maintenance
Home Theater Repair
Icemaker Repair
Laundry Maintenance
Lawn Mower Repair Lawn Mower Tune-up
Log Splitter Repair
Microhood Repair
Microwave Repair
Power Washer Repair
Range Hood Repair
Range and Oven Maintenance Range, Cooktop and Oven Repair Refrigerator Repair
Refrigerator Maintenance Refrigerator and Freezer Repair Riding Mower Repair
Sewing Machine Repair Snowblower Repair
Snowblower Tune-up
Stacked Laundry Unit Repair
Stacked Laundry Unit Maintenance Stand-alone Icemaker Repair
Stepper Repair
Television Repair
Tiller Repair
Tractor Repair
Tractor Tune-up
Treadmill Repair
Vacuum Repair
Washer Repair
Washer/Dryer Repair
Water Heater Repair
Weight Machine Repair
Yard Tool Repair
Geez. They'd fix my log splitter if I had one.
This is what the building looks like if you want to stop by.
As for the F-350 some things are a lot better, and some things are a lot worse. The new f-350 is probably cheaper because it IS cheaper. The bill may yet come home in the maintenance.
I think that everyone is missing the point. The F-350 should be significantly cheaper than it is because of the great improvements that have been made by the automobile makers. What we should have seen is a decline in nominal prices even though the product has improved. The people who are arguing that we have not had inflation are guilty of falling for the Broken Window Fallacy.
As the inflationary boom of the 1920s showed, a huge increase in the money supply does not have to show up as price increases in consumers goods.
As the Austrian economists have shown, one of the major effects of productivity improvements is to continually lower costs. A country that experiences a great deal of capital formation, as the US did, should experience a price inflation as cheaper goods spread throughout the economy and workers benefit by seeing their pay have a higher purchasing power. But this effect is offset in our modern economy by the monetary inflation which is pushing prices higher. So instead of benefiting from a lower nominal price picture we see actual consumer prices rise slowly or stay stable.
While people like Mark may see that as benign economists of the Austrian School point out that in a society that has a free-market the higher productivity will result in a huge increase the type and supply of goods along with much lower prices. That would mean that workers, savers, and investors would see an increase in purchasing power and would have a higher standard of living.
The problem is that we have an economy that is very far from a free market. What we have is a huge growth in government that diverts wealth away from workers, savers, and consumers towards the public sector and special interest groups that support the expansion of government. A rational individual needs to understand this and prepare accordingly.
That's because we got the opposite of Reaganomics, i.e. Obamanomics.
Nonsense. When it came to spending and the growth of government Bush was one of the worst presidents in American history. While Obama is as bad or worse he does not absolve the Republicans from their big government expansion when they were in charge.
VangelV, you stated: "The economy is still not all that strong five years after the commentary was written."
The U.S. economy is fundamentally strong.
However, Bush failed to prevent a severe recession and Obama failed to promote a strong recovery.
If Bush could've been elected to a third term, given his past economic policies, we would've had a V-shaped economic recovery (which normally follow severe recessions).
Per capita real GDP today would be much higher than 2007, budget deficits would be much lower, the unemployment rate would be much lower, etc..
Instead, we got more regulation, weak tax cuts, a huge amount of additional spending, etc., i.e. Obamanomics.
Why don't we ever get the same amount of government for less money?
Do we even measure the quality, efficiency, or productivity of government "services?"
"Bush failed to prevent a severe recession and Obama failed to promote a strong recovery"...
What could Bush have done to stop a Democratically controlled House and Senate?
Bush had lots of flaws, some quite serious but he was hardly responsible for the housing problem...
And for those people who believe inflation is understated and real GDP is overstated...
VV is right.
If you pay any attention to the last two decades to people who only live on Social Security (whose yearly increases are baed on CPI-W, which is higher than CPI-U), you would know positively and with zero question that CPI is *severely* understated. Their standard of living has dropped greatly.
Good grief, just one example - CPI is about 6.5% medical and the GDP share of medical is just under 18%, and medical costs are at the high end of the areas whose prices are way up.
The CPI weight for medical is heinously wrong and is BS to the max - and that's without the effects from OER, geometric vs. arithmetic weighting, hedonics, substitution, Boskin, etc., etc. ad nauseum.
The U.S. economy is fundamentally strong.
I see no evidence of that.
However, Bush failed to prevent a severe recession and Obama failed to promote a strong recovery.
Bush's meddling with the economy made the recession worse. Obama is not much smarter than Bush and can't help himself. Point to any alternative (other than Dr. Paul) would would be better than either Bush or Obama if elected president.
If Bush could've been elected to a third term, given his past economic policies, we would've had a V-shaped economic recovery (which normally follow severe recessions).
No. Bush was one of the worst presidents in your history. He made government much bigger and wasted more than $1 trillion on a useless war with Iraq. He was a puppet for the neoconservatives who have their fingerprints over most of the economic and foreign policy failures of the past decade and a half. And as far as I am concerned Obama is already serving Bush's third term.
Per capita real GDP today would be much higher than 2007, budget deficits would be much lower, the unemployment rate would be much lower, etc..
Nonsense. A promotion of the welfare/warfare state does not lead to an increase in real GDP. Bush was an incompetent fraud.
Instead, we got more regulation, weak tax cuts, a huge amount of additional spending, etc., i.e. Obamanomics.
Look at Bush's regulatory record.
President Bush and The Federal Register
Bush was a fraud. It seems that so are you are one as well.
While Obama is as bad or worse he does not absolve the Republicans...
Amen V... and before Bush or Obama, Reagan increased the deficits more than any other non war President.
(President)onomics is not only just a label that avoids confronting the raw truth that both parties and the power/control freaks behind them are equivalently guilty and broadly incapable of seeing consequences.
Before most of the Baby-Boomers retire, there will be a "correcting mechanism"...
Of course - and way late too.
I'm sure there are many people like VangelV and Bart (Ron Paul is another), who don't have a clue about the real U.S. economy.
The facts remain. Americans live in bigger and better houses, drive bigger and better autos, consumed a huge amount of goods, including imports up to $800 billion a year more than exports.
The U.S. not only leads the world in the Information and Biotech Revolutions (in both revenues and profits), it leads the rest of the world combined, while the U.S. Agricultural and Industrial Revolutions are the most productive in the world by far.
Of course, I don't expect people like VangelV, Bart, or Ron Paul to even have a rudimentary understanding of how economic forces interrelate and interact. So, they continue to be one-trick ponies, and it's not even a good trick. They'll continue to focus on their very small slice of the economy, while rejecting the rest of reality.
Peak: "If Bush could've been elected to a third term, given his past economic policies, we would've had a V-shaped economic recovery (which normally follow severe recessions)."
Is this the same Bush who said "I've abandoned free market principles to save the free market system."?
I'm sure there are many people like VangelV and Bart
Thankfully there are. And yes, some things have and are getting better.
But more importantly, your personal attacks with zero facts (and your failure to address the raw facts cited, like how seniors on SS over the decades have lost very large amounts of purchasing power due to CPI *lies*, or the gigantic difference between CPI and GDP share of medical costs) tell a fuller and less convenient story.
The failure to address them and many others (including the raw facts about Prohibition and what happened when it was repealed) show your lack of command of the full picture... at best.
Ron, yes, that's the same Bush.
When your house is on fire, you call the government, i.e. fire department, not rely on the free market.
When the dam breaks, you expect the government to fix it to prevent water flooding your house, not wait for the free market.
When the Japanese attacked Pearl Harbor, you want the government to do something about it, not the free market.
What's your point?
Bart, I've shown many facts and how they fit together. Yet, some people choose to ignore it, while they continue to pound square pegs into round holes.
And "seniors" tend to be the wealthiest Americans.
"...Bush was an incompetent fraud"...
Speaking of incompetent frauds I see you fill the bill perfectly vangeIV with your supposed links to the federal register but instead the links a nest of left-wing economists...
Regarding the rules, the rules issued by the Bush administration maybe you should look at the following:
From the Mercatus Report: The Bush Administration Regulatory Record
The Bush administration has reasserted control over federal rulemaking in important ways. oira has reinvigorated the regulatory review process, exhibiting a willingness to return regulations that do not meet analytical requirements, and has required changes in a larger percentage of the rules it reviewed than previous administrations. It has issued guidelines to agencies on regulatory analysis, peer review, and data quality that, while not entirely consistent with free-market and federalism principles, are generally sound.
juandos: "What could Bush have done to stop a Democratically controlled House and Senate?"
As strong as both George Bush's were in foreign affairs, they both showed incredible weakness with Congress and the federal budget. W never vetoed anything - even when he disagreed with his own party or with the Democrats. His father likewise caved in to the Democrats on budget issues and raised taxes.
I disagree with VangeIV (big surprise) when he argues that W will go down as one of the worst presidents. But I'm not going to bother wasting my time by arguing with him.
bart: "If you pay any attention to the last two decades to people who only live on Social Security .... CPI is about 6.5% medical and the GDP share of medical is just under 18%, and medical costs are at the high end of the areas whose prices are way up."
Seniors have not seen a reduction in standard of living due to medical cost increases. Medicare and social security increases have easily offset the increases in senior health care. Also, if you know much at all about the medical advances since 1964, you know that the quality of health care - for seniors especially - has sharply increased.
Please note that I'm not arguing that seniors are healther today than they were 50 years ago. Obesity and other personal choices have taken a huge toll on the lives of many if not most seniors.
Peak: "What's your point?"
Well, if I had a financial crisis caused by government, I sure wouldn't call the government to fix it, especially that clueless Bush fellow. I would, in fact, call the free market to correct mis-allocation as quickly as possible.
"they both showed incredible weakness with Congress and the federal budget..."...
Thank you jet beagle for getting it!!
Still the fact was that George W was dealing with an extremely adversarial Democrat controlled Congress and we know where all the spending bill actually originate, right?
Still George W did exhibit an amazing allergy to the veto pen...
juandos: "the fact was that George W was dealing with an extremely adversarial Democrat controlled Congress and we know where all the spending bill actually originate, right?"
Yes, for the last 2 years of his presidency, the Democrats controlled Congress. But Republicans are to blame for the 6% average annual increases in federal government expenditures from FY2001 to FY2006
The facts remain. Americans live in bigger and better houses, drive bigger and better autos, consumed a huge amount of goods, including imports up to $800 billion a year more than exports.
Looking at the asset side of the ledger is fine. But you also have to look at the liabilities. The total debt plus unfunded liabilities for the government alone stand at more than $100 trillion. Many of those houses are under water with a mortgage that is greater than the market value of the home. Many of the cars are leased, not owned. Most of the goods are bought on credit. What you have is an illusion that has been financed on credit.
The U.S. not only leads the world in the Information and Biotech Revolutions (in both revenues and profits), it leads the rest of the world combined, while the U.S. Agricultural and Industrial Revolutions are the most productive in the world by far.
The information 'revolution' is not producing very much in profits because competition keeps reducing margins. And the US is hardly alone in the sector. While Cisco has said that it believes that it can ignore most of its domestic competitors it has made it clear that it expects Huawei to be a tough long term competitor. To stay ahead Cisco has to keep lowering prices but that causes it to take a huge hit on margins and profits.
As for biotech, I see the American regulatory environment to be a huge hurdle. And let us not forget that while the US pharma industry is very profitable most of its profits come from selling drugs inside the US. (Which is why the US industry was pushing hard for Bush's Medicare Part D program.) The fact that other governments are not paying as much for drugs is not a negative for their taxpayers.
Of course, I don't expect people like VangelV, Bart, or Ron Paul to even have a rudimentary understanding of how economic forces interrelate and interact. So, they continue to be one-trick ponies, and it's not even a good trick. They'll continue to focus on their very small slice of the economy, while rejecting the rest of reality.
I can't speak for others but what I understand is that a debt financed standard of living is not sustainable unless there is a huge increase in productivity. But when you have a growing portion of the population leaving the work force and depending on transfer programs, and when employment and wage growth have been highest in the public sector there is no way to have the type of productivity growth that could support that standard of living.
All you need to understand the reality is simple math. That $100 trillion figure cannot be dismissed by hand waving and diverting attention from reality. It can only go away by destroying the currency or by default. In either case the standard of living is toast.
When your house is on fire, you call the government, i.e. fire department, not rely on the free market.
Why not allow the private sector to compete in the fire protection sector? It would be cheaper and better.
When the dam breaks, you expect the government to fix it to prevent water flooding your house, not wait for the free market.
I don't expect the dam to break. It is far less likely to break if it was owned and operated, and insured privately.
When the Japanese attacked Pearl Harbor, you want the government to do something about it, not the free market.
The free market would not have allowed an attack. The US had the Japanese code and knew of the attack. FDR actually encouraged the attack by making sure that America's friends within the Japanese government lost power.
What's your point?
I can't speak for Bart but I think that his point is that you are an irrational statist. You love big government and only speak out when the 'other party' is in charge.
Speaking of incompetent frauds I see you fill the bill perfectly vangeIV with your supposed links to the federal register but instead the links a nest of left-wing economists...
I provide the most convenient link that I find in Google. The fact that the federal register exploded under Bush is not in dispute. He was actually a much worse president than Slick Willie and amazingly enough a less honest one. If you want the same critique from the right you can look here.
You are just pissed off because rational people expose the right to be just as corrupt and stupid as the left. Both sides are in favour of big government and simply make up the opposite side of the same authoritarian coin.
From the Mercatus Report: The Bush Administration Regulatory Record
The Bush administration has reasserted control over federal rulemaking in important ways. oira has reinvigorated the regulatory review process, exhibiting a willingness to return regulations that do not meet analytical requirements, and has required changes in a larger percentage of the rules it reviewed than previous administrations. It has issued guidelines to agencies on regulatory analysis, peer review, and data quality that, while not entirely consistent with free-market and federalism principles, are generally sound.
What a bunch of drivel. You missed a few things. First, your own citation admits that, "Regulatory staff has grown by 40 percent since 2000." If Bush reduced regulations and the regulatory burden just what are these extra people doing?
And let us not forget, that your own citation ends with, "Overall, however, OIRA’s paradigm appears to be that, rather than rely on market processes, property rights, and indi- vidual choice, smarter regulators can devise government solu- tions to perceived problems."
Got that? Bush was in favour of central planning and thought that regulators could do a better job than the market. How does that make him any different than Obama?
VangeIV: "What you have is an illusion that has been financed on credit."
That's a misleading and gross exaggeration of the financial situation of American households.
The only recent estimates I've seen recently are that about 1/4 of all U.S. mortgages represent loans greater than the value of the home. But that does not mean that 1/4 of U.S. households are in financial trouble.
In the first place, only about 11 million U.S. households - or about 10% - live in homes with underwater mortgages. The other 90% either rent, own their homes outright, or live in homes worth more than mortgages.
Second, just because a home is temporarily worth less than its mortgage does not indicate financial stress. Home values fall and rise, while mortgages do not. Only a small few live with mortgages they cannot pay.
Please understand, vangeIV, that I have no hope of convincing you of anything. I'm only responding so that other readers are not taken in by your misleading pronouncements of gloom.
That's a misleading and gross exaggeration of the financial situation of American households.
How is it an exaggeration? Let me list a few of the things that I see and tell me where I am wrong.
First, If we do not count people who are so discouraged that they gave up looking for work we have approximately 14 million unemployed Americans. The U-6 rate stands at at more than 15%. If we add the long-term discouraged workers, who were defined out of existence post-Boskin, we get an unemployment rate of more than 20%.
Second, many state and local governments are broke and have to slash a large number of jobs quickly. That will not be enough so expect services to be cut and taxes, fees, etc., to be increased.
Third, the regulatory environment is crushing small businesses.
Forth, around one in seven American families is on food stamps.
Fifth, the number of people who are self employed has fallen by around 2 million since 2006.
Sixth, in the face of the most stimulative fiscal and monetary policies in our history, we have experienced the loss of over 7 million jobs, wiping out every job gained since the year 2000.
Seventh, federal debt is higher than GDP.
Eighth, Gallop showed that Americans are very worried about not having enough money for retirement. Not only do they not have enough of their own savings but their pension funds are severely underfunded and cannot meet their obligations. I am not even mentioning the unfunded liabilities in SS and Medicare.
I can go on and one but trust that the point has been made. Mortgage and consumer debt is too high at a time when income security is low and savings and pension funds are insufficient to finance a decent life after retirement. There is no way to look at the facts and be optimistic about the future of the average working man or woman.
Well vangeIV your supposed convient link leads to 'about blank'...
"Got that? Bush was in favour of central planning and thought that regulators could do a better job than the market"...
Thanks for the chuckle vangeIV and letting me know that your ability to read is at best questionable...
Manzanar and Hart Mountain was what the government did about Pearl Harbor.
Bart, I've shown many facts
I admire you for continuing to avoid directly addressing all of the facts I've presented.
The fact is that CPI is woefully and heinously under representing inflation. Apparently you don't know anyone on SS for a while, otherwise it would be obvious.
In either case the standard of living is toast.
Indeed V - and even just using the straight and bogus and lying un-corrected CPI, minimum wage was about 20% higher in the 70s and over 25% higher than it was in the 60s - same and more with real personal income when using a corrected CPI.
I can't speak for Bart but I think that his point is that you are an irrational statist. You love big government and only speak out when the 'other party' is in charge.
I sure don't know PT or a few others very well, but their complete refusal to see certain facts, or even grant a vague possibility that what happened after Prohibition was repealed did have something to do with Prohibition having been repealed strongly leads me to believe that they have a huge ax to grind, a wild inability to see or even acknowledge raw facts in front of their faces, a truly sad lack of an in depth education and probably even a dose of Pollyanna mode.
Optimism is fine when backed by real and non PR/spin mode weight of facts... but we haven't had that for many years.
I wonder how many even had a vague idea of the possibilities of a housing bust (as I called in 2005) or a massive financial as we both called many years ago too.
VV: Let me list a few of the things that I see and tell me where I am wrong.
All I see or hear is crickets... in other words, folk running/hiding from the facts you cited.
vangeIV: "How is it an exaggeration? Let me list a few of the things that I see and tell me where I am wrong."
The comment I referenced was the last sentence in your paragraph about how household debt was driving the increased standard of living in the U.S.
Here's the last three sentences of your paragraph:
vangeiv: "Many of those houses are under water with a mortgage that is greater than the market value of the home. Many of the cars are leased, not owned. Most of the goods are bought on credit. What you have is an illusion that has been financed on credit."
That's the gross and misleading exaggeration I referred to.
I agree that government debt and the unfunded liabilities of Social Security and Medicare are huge problems. But neither has anything to do with the increased living standards of middle class America.
If you want to argue that the FUTURE for the U.S. is at risk due to government debt and retirement liabilities, I will join you in making that argument.
If you continue to argue that the advances of the past four decades are an illusion, I will provide evidence to the contrary.
Where you really piss me off, vangeIV, is in your seemingly unintentional support of Leftists. Leftists argue that government policy changes since 1980 - deregulation, global trade, and marginal tax rate reductions - have left middle class America worse off. Your misleading information supports their arguments.
bart: "I wonder how many even had a vague idea of the possibilities of a housing bust (as I called in 2005)"
Oh, please! Many economists and many in the financial industry were predicting a housing bust in 2005 and earlier. The more public pronouncements by economists occured:
by UCLA's Ed Learner in 2002
by Karl Case and Robert Schiller in 2003
by Paul Kasriel of Northern Trust in 2004
by Bruce Bartlett in 2004.
Many others predicted the bust at least that early. But none of them had the influence of Alan Greenspan, who was in denial until 2007.
It's very easy to predict that a financial crisis will happen in the future. That's because we get a new one every decade or so. What's not so easy to predict is when the crisis will happen. Or to predict that government will take action to prolong the crisis for years, as Obama and the Democrats have certainly done.
JB:
Oh, please! Many economists and many in the financial industry were predicting a housing bust in 2005 and earlier.
Of course - I successfully predicted it. Did you?
My actual point though is about posters here. Both V and I have a quite successful and consistent long term track record. I wonder how many of the optimistic ones here do.
It's very easy to predict that a financial crisis will happen in the future. That's because we get a new one every decade or so. What's not so easy to predict is when the crisis will happen. Or to predict that government will take action to prolong the crisis for years, as Obama and the Democrats have certainly done.
Again. V and I did.
How many here can say the same?
The only recent estimates I've seen recently are that about 1/4 of all U.S. mortgages represent loans greater than the value of the home. But that does not mean that 1/4 of U.S. households are in financial trouble.
Actually, 25% of all mortgages being under water is a terrible statistic. It means that there is a huge overhang of inventory that will keep real prices for housing low. While that is good for new buyers, it is a terrible for those people who were hoping that their homes would provide equity to finance retirements.
In the first place, only about 11 million U.S. households - or about 10% - live in homes with underwater mortgages. The other 90% either rent, own their homes outright, or live in homes worth more than mortgages.
Can I get a reference on this please? I thought that the US Census showed that only 30% of US homes were mortgage free.
Second, just because a home is temporarily worth less than its mortgage does not indicate financial stress. Home values fall and rise, while mortgages do not. Only a small few live with mortgages they cannot pay.
But that is not true. And the problem is not just the mortgage but the lack of savings as people get closer and closer to retirement. For many boomers the dream is dead and is slowly being turned by the Fed and Treasury into a nightmare.
Please understand, vangeIV, that I have no hope of convincing you of anything. I'm only responding so that other readers are not taken in by your misleading pronouncements of gloom.
I am easy to convince when the facts are laid out clearly and you have a logical argument. The problem is that you don't.
Well vangeIV your supposed convient link leads to 'about blank'...
No it does not. When I click on the link I get the report, Red Tape Rising: Regulatory Trends in the Bush Years, by James L. Gattuso. It was put out by the Heritage Foundation publication Backrounder, No. 2116, March 25, 2008. The report makes the same argument that I did. In their talking points we read:
• The regulatory burden has increased during the Bush Administration.
• Since 2001, the annual regulatory cost of federal regulation has increased by nearly $30 billion. Over $11 billion was added in FY 2007 alone.
• By contrast, actions to lessen regulatory burdens have been rare. In FY 2007, savings from significant actions reducing regulation totaled some $684 million, or about 1/17th of the cost of new burdens imposed that year.
• Regulatory burdens may increase even more in 2008, with a bevy of costly new regulations already in the pipeline. Historically, regulatory activity surges during the final year of a presidential Administration.
• Policy makers should consider a number of reforms, including strengthening the OMB’s Office of Information and Regulatory Affairs, establishing a Congressional Regulation Office, establishing a sunset date for all new regulations, and requiring independent agencies to submit benefit-cost analyses for review by the OMB.
"Got that? Bush was in favour of central planning and thought that regulators could do a better job than the market"...
Thanks for the chuckle vangeIV and letting me know that your ability to read is at best questionable...
I quoted right out of the citation that you provided. In the introduction we read, "However, OIRA’s paradigm seems to be that smarter regulators can devise solutions to perceived problems." And in the conclusion we see, "Overall, however, OIRA’s paradigm appears to be that, rather than rely on market processes, property rights, and individual choice, smarter regulators can devise government solutions to perceived problems." Your own citation shows that your man Bush did not believe in the markets and that he preferred central planning. With 'friends' like that who the hell will argue in favour of free market capitalism?
I sure don't know PT or a few others very well, but their complete refusal to see certain facts, or even grant a vague possibility that what happened after Prohibition was repealed did have something to do with Prohibition having been repealed strongly leads me to believe that they have a huge ax to grind, a wild inability to see or even acknowledge raw facts in front of their faces, a truly sad lack of an in depth education and probably even a dose of Pollyanna mode.
There are times when all of us have an ax to grind. But lack of logic and the ignoring of facts do not belong in rational discussions. Our friends have an emotional investment in the drug issue and refuse to see the serious problems with what they support.
By the way, you may be interested in two points, if you do not know them already. David Beito writes about the little known property tax revolts during the 1930s. His book, Taxpayers in Revolt: Tax Resistance During the Great Depression can be downloaded for free as an ePub or PDF document at the link provided. The second item is Mark Thorton's article, The Real Reason for FDR's Popularity, in which he expands on Beito's argument to point out that the reason that FDR was so successful even though his policies prolonged the Great Depression was the repeal of Prohibition. The tax revolts actually ended when consumers got access to cheaper alcohol that could still raise revenues for cities and states. By eliminating the profit margin for the gangsters FDR allowed the cities to keep their fire and protection services (even as less was spent on alcohol law enforcement) and consumers of alcohol to get a safer, better, and cheaper product.
I suspect that the next President will try to do the same thing as FDR. Once drugs are legal their cost will collapse and instead of spending billions on prisons and enforcement governments at all levels will be able to get billions in revenues. This would allow judges to treat property and violent crimes much more harshly and to ignore many of the victimless crimes that clog the courts and fill the prisons. As drug usage becomes more affordable there will be no need for robberies to feed expensive habits. Fewer resources will be diverted from unproductive use and more will become available for other needs.
The poor will be the biggest beneficiaries of legalization because they are the greatest victims of the drug gangs and are most likely to wind up in jail for minor possessions. They may actually see an improvement in their living conditions as their costs fall and security increases. Perhaps they will see the benefit of having less intrusive government and finally figure out that their votes on mainstream candidates are wasted.
That's the gross and misleading exaggeration I referred to.
Really? You mean that using credit cards and refinancing mortgages to buy non-durables was a good idea? Or that being close to retirement but having little set aside for retirement does not mean that the lifestyle was unsustainable?
You have to open your eyes. People no longer seem to own their own homes or their vehicles. They buy gasoline, food, and all kinds of trivial items on credit cards even as they carry forward unpaid balances. They owe far more on their homes than their parents used to and need both parents working full time to make ends meet. While we clearly benefit from some very cheap goods that were undreamed of by our fathers and mothers they will have a harder time having a comfortable retirement.
I think that you need to forget the illusion and start to see the reality. If you have paid attention you would have known that many people saw the trouble coming and predicted most of the things that we saw over the past decade. It is smart to pay more attention to those people and to ignore much of the noise coming from the naive optimists.
If you continue to argue that the advances of the past four decades are an illusion, I will provide evidence to the contrary.
My argument is simple. It now takes two incomes to make ends meet and even with those two incomes most people don't have enough saved to retire in comfort. That should tell you many things. One of them is about data integrity.
Where you really piss me off, vangeIV, is in your seemingly unintentional support of Leftists.
My support is totally intentional. When the lefties argue that the stupid Bush wars were a danger to the solvency of the country they are right. (Of course, few make this argument when their man is in the Oval Office.) When the lefties argue that Bush was a big spender who grew the size of government I support them because that is what the data actually shows. When the lefties argue for civil liberties and less intrusion into the social lives of people I also agree.
But this hardly makes me a lefty. They get pissed off at me when I point out that their man Obama is no better than Bush. They get pissed off when I point out that their economic policies do not even work in theory let alone in practice. They scream when I bring up the economic arguments of Bastiat, Say, Menger, Mises, Friedman, or Rothbard.
Leftists argue that government policy changes since 1980 - deregulation, global trade, and marginal tax rate reductions - have left middle class America worse off.
What deregulation? Reagan tripled the deficits and grew the size of government. The two Bushes, Slick Willie and The One have taken the same big government path. While marginal tax rate reductions help, when you don't change the effective rate much because you close loopholes you are not really helping all that much.
The middle class is worse off because it is far more regulated than it used to be, it pays more in FICA taxes, has fewer loopholes, and is far more dependent on easy financing than when it had accumulated savings.
If you want to look at giving credit for deregulation you need to look at Carter, not Reagan or his successors. While he was a terrible president who let the monetary inflation get out of hand he was responsible for most of the deregulation that Reagan took credit for.
Your misleading information supports their arguments.
Not at all. I simply point out that both the left and right are anti-liberty. Both supported Bush's stupid wars. Both voted for the Patriot Act. Both kept funding foreign meddling. Both refuse to cut real spending and to do anything about the unsustainable growth in SS, Medicare, and Defense spending.
The US would be better off if voters rejected both the Democrats and Republicans and insisted that the size of the federal government were cut by 80-90%.
capability and unsurpassed fuel economy." The new F-150 delivers class-leading...........
+++++++++++++++++
Macht nicht.
Cradle to grave costs for a new f150 may still be higher in constant dollars than a 1970 truck, where benefits count as negative cost.
Now, if your 1970 truck was hauling two tons of eggs and your new one is hauling two tons of ipods, then your new truck might look cheap.
But if your new truck still has to earn its way hauling eggs, then you are screwed.
capability and unsurpassed fuel economy." The new F-150 delivers class-leading...........
+++++++++++++++++
Macht nicht.
Cradle to grave costs for a new f150 may still be higher in constant dollars than a 1970 truck, where benefits count as negative cost.
Now, if your 1970 truck was hauling two tons of eggs and your new one is hauling two tons of ipods, then your new truck might look cheap.
But if your new truck still has to earn its way hauling eggs, then you are screwed.
It's very easy to predict that a financial crisis will happen in the future. That's because we get a new one every decade or so. What's not so easy to predict is when the crisis will happen. Or to predict that government will take action to prolong the crisis for years, as Obama and the Democrats have certainly done.
Obama and the Democrats are not much worse than the Bush Republicans. They had control of Congress and the Presidency and could have cut regulations instead of increasing them. They could have cut spending. They could have removed the implicit guarantee to the GSEs or told the regulators to reign in the liars at the rating agencies. Instead they stood aside and did nothing of the kind.
And note that anyone can be optimistic or pessimistic and be right about the trend in the market. It takes knowledge to make good predictions consistently. Let us look at your example of Robert Shiller. Instead of giving you my critique of many of his nutty ideas let me provide the Publishers Weekly reveiw of his book, The New Financial Order: Risk in the 21st Century. We read:
"Shiller is best known for arguing, as he did in Irrational Exuberance, that stock market movements do not reflect underlying economic reality and that the volatility of the market makes the financial system unstable. It is therefore a surprise to find him advocating vast expansion of financial derivative markets to reduce the economic risk faced by individuals and countries. According to Shiller, governments should swap 10% or more of their gross domestic product with other countries and administer income swaps among entire generations. Individuals should manage risk by trading in new financial instruments based on the lifetime income of their profession, the value of homes in their area or economic statistics like the unemployment rate or inflation rate. Money, he says, will be replaced by "indexed units of account" tied to things like wage rates and commodity prices. People will carry transponders to report on their every activity, with the results stored in "global risk information databases," containing all personal information, including genetic data but protected against unauthorized access. In this way, the government can eliminate the underground economy and tax evasion and individuals will enjoy more economic security. The author admits people don't think they want this additional security, but he advocates "psychological framing" to change their viewpoint. The book is certain to be controversial. Some will see a visionary, high-tech combination of the best of capitalism and socialism. Others will be reminded of Brave New World and 1984, with privacy, freedom and adventure traded for a totalitarian mediocrity founded on constant monitoring and propaganda."
Shiller is a nut who does not understand economics very well. He is a statist who sees a huge role for government even though government has proven that it does best when it takes the smallest role possible.
vangeiv: "If you want to look at giving credit for deregulation you need to look at Carter, not Reagan or his successors."
Your history is incomplete if you only credit Carter for the deregulation of the late 1970s,1980s, and 1990s. Ford started the nation on the path to transportation deergulation. Reagan eliminated the most important energy regulations. Deregulation of financial institutions was started in 1982. And, as Milton Friedman pointed out, Reagan appointees temporarily stopped the growth in administrative regulation growth.
Giving credit to Reagan and the Republicans was not the point I was making anyway. I specifically stated deregulation since 1980 because that's the year significant pro-business deregulation was started:
- the Staggers Act (railroad deregulation);
- the Motor Carrier Act of 1980 (trucking deregulation);
-the Regulatory Flexibility Act (forced Washington to flex regulatory information requirements to the size of trhe business, savings small businesses many billions of dollars).
vangeiv: "The middle class is worse off because it is far more regulated than it used to be, it pays more in FICA taxes, has fewer loopholes, and is far more dependent on easy financing than when it had accumulated savings."
No question that government has inhibited economic growth. But the fact remains that despite government intrusion, middle class families have a far higher standard of living than they did 50 years aqo.
Easy financing is exactly one of the free market features of today's world which have increased our standard of living.
VV: Red Tape Rising: Regulatory Trends in the Bush Years, by James L. Gattuso. It was put out by the Heritage Foundation publication Backrounder, No. 2116, March 25, 2008. The report makes the same argument that I did. In their talking points we read:
Not only that, but how many of those regulations are both extremely poorly written (full of loopholes etc.) or bypassed by senior administrators for political or "lobbying" purposes?
Lots of regulations existed that covered mortgage fraud - that were not enforced since the FBI was pulled off the cases to do other stuff.
There are times when all of us have an ax to grind. But lack of logic and the ignoring of facts do not belong in rational discussions. Our friends have an emotional investment in the drug issue and refuse to see the serious problems with what they support.
Yep - the phrase 'ax to grind' implies a high emotional involvement and very frequently a failure to see or even acknowledge the full panoply of facts & data available to a relatively unbiased observer... aka, they also remind me a bit of sf3006. ;-)
By the way, you may be interested in two points, if you do not know them already. David Beito writes about the little known property tax revolts during the 1930s. His book, Taxpayers in Revolt: Tax Resistance During the Great Depression can be downloaded for free as an ePub or PDF document at the link provided. The second item is Mark Thorton's article, The Real Reason for FDR's Popularity, in which he expands on Beito's argument to point out...
Yep, familiar with both and although I think that Thornton's work was too "enthusiastic" in attributing that much economic effect to the repeal, the basic point is quite valid.
"Easy financing is exactly one of the free market features of today's world which have increased our standard of living."
Let me clarify that statement. Easy financing which resulted from financial deregulation has increased our standard of living. "Easy" financing which resulted from government interference in free markets - such as Congressional pressure on Freddie Mac and Fannie Mae to increase loans to poor household - generally works against the increase in GDP by misallocating resources.
JB: But the fact remains that despite government intrusion, middle class families have a far higher standard of living than they did 50 years aqo.
50 years ago - probably correct.
30 years ago - a *lot* more subject to judgment calls, on both things like 'freedom' and also actual things like a particle board & plastic veneer vs. a solid wood dining room table (aka, reverse hedonics).
Your history is incomplete if you only credit Carter for the deregulation of the late 1970s,1980s, and 1990s. Ford started the nation on the path to transportation deergulation.
Fine. But it was Carter who actually did it.
Carter deregulated the airlines and also went after trucking and the railroads. Reagan got the endorsement from the Teamster's Union because he promised to delay Carter's deregulation of the trucking sector. Conservatives have this blind spot and forget that their enemy, the Teamsters, supported Reagan.
Reagan eliminated the most important energy regulations.
No. The deregulation measures were passed under Carter and were scheduled to go into effect in 1981. All Reagan did was enact them immediately. Keep in mind that Kennedy and Nader both attacked Carter for deregulating the oil business. (Carter's failing was not deregulation of the energy sector but his stupid Windfall Profits Tax.)
On the energy issue you need to go back and look at your history again.
Deregulation of financial institutions was started in 1982. And, as Milton Friedman pointed out, Reagan appointees temporarily stopped the growth in administrative regulation growth.
Bull. Reagan tripled the size of the deficit and grew government without paying for it. He made deals in which spending would go up immediately but cuts would take place later. The cuts never came but the spending increases did.
Giving credit to Reagan and the Republicans was not the point I was making anyway. I specifically stated deregulation since 1980 because that's the year significant pro-business deregulation was started:
- the Staggers Act (railroad deregulation);
- the Motor Carrier Act of 1980 (trucking deregulation);
-the Regulatory Flexibility Act (forced Washington to flex regulatory information requirements to the size of trhe business, savings small businesses many billions of dollars).
If you check the Staggers Act or the Motor Carrier Act you find that they were signed into law by Carter, not Reagan. And most of the heavy lifting for the Regulatory Flexibility Act took place in the late 1970s and were being pushed by Carter. By the time Reagan came into office most of the work had been done.
It seems to me that in your haste to give Reagan credit for every positive event in the early 1980s you ignore that most of those events were either done by Carter or pushed by Carter before he left office. While I am not a big fan of the man, I think that he deserves a lot more credit than the conservatives give him.
No question that government has inhibited economic growth. But the fact remains that despite government intrusion, middle class families have a far higher standard of living than they did 50 years aqo.
It is still hard to make this argument when a single salary is no longer enough to raise a typical middle class family.
Easy financing is exactly one of the free market features of today's world which have increased our standard of living.
There is nothing free market about the Fed meddling with interest rates. I argue that people are worse off because the artificially low rates made them misjudge the true economic picture and by doing so encouraged them to ignore bubbles. This is why most boomers have little in the way of savings.
Easy financing is exactly one of the free market features of today's world which have increased our standard of living.
Simple facts direct from the BLS etc. show the real truth:
http://www.nowandfutures.com/images/median_income1948_now.png
Not only that, but how many of those regulations are both extremely poorly written (full of loopholes etc.) or bypassed by senior administrators for political or "lobbying" purposes?
If you think about it, it is actually worse. The regulations were written by lobby groups to prevent competition for established players. The big companies do not want a free market. They actually favour regulations that cost them a few percent in profit but give them protection in return. In the end, consumers and taxpayers get screwed while the rent seekers and their enablers get richer.
Lots of regulations existed that covered mortgage fraud - that were not enforced since the FBI was pulled off the cases to do other stuff.
Correct. If 120 regulatory agencies missed the problem why are we to assume that a few more would have been sufficient to catch the problems?
Let me clarify that statement. Easy financing which resulted from financial deregulation has increased our standard of living. "Easy" financing which resulted from government interference in free markets - such as Congressional pressure on Freddie Mac and Fannie Mae to increase loans to poor household - generally works against the increase in GDP by misallocating resources.
Deregulation? What the hell are you talking about? Don't you know that the finance sector is dominated by the GSEs and the protected Wall Street banks? That there are more than 100 regulators that are supposedly watching, all kinds of regulatory protection schemes, forced insurance, etc.? The financial sector is heavily regulated and nobody could ever confuse its activities with anything relating to the free market.
vangeiv: "It seems to me that in your haste to give Reagan credit for every positive event in the early 1980s you ignore that most of those events were either done by Carter or pushed by Carter before he left office."
Read my damned comments, OK? I did not give credit to Reagan for either the Staggers Act or for the Motor Carrier Act of 1980. And I specifically stated that my point was not to give credit to any administration.
V: If 120 regulatory agencies missed the problem why are we to assume that a few more would have been sufficient to catch the problems?
This is by far in my opinion the primary issue with the "more regulations" crowd - they just don't see what is *actually* going on, although some are catching on with all the bankster political/lobbying games.
Give me rule of law, not rule by slimeball vested interests (who have zero clue about 'common good').
Read my damned comments, OK? I did not give credit to Reagan for either the Staggers Act or for the Motor Carrier Act of 1980. And I specifically stated that my point was not to give credit to any administration.
And here I was thinking that you were immune to button pushing. I guess that I was wrong.
Isn't it ironic (or hypocritical if you wish) to accuse me of lending support to the statist lefties when I say over and over again that they are just as confused and evil as the statists on the right? The right in your country, which you clearly support, has been just as responsible for government expansion and the reduction of liberty as the left. There hasn't been a Republican President who has tried to keep government from growing in my lifetime. And many of the actions that they get credit for (such as deregulation and reforms) were actually pushed by Democratic administrations. It was Carter who deregulated trucking, airlines, and energy and Slick Willie who reformed welfare not the Bushes or Reagan. And while Clinton benefited from the capital gains bubble and criminal accounting that allowed him to falsely claim to have run a surplus it is clear that he was much better on the spending issue than Bush I and Bush II.
Your problem is that you are blind to the hypocrisy and anti-American positions of the Republican Party. As I have argued, the GOP is not any better than the lefties that you so despise. A good American who stood for freedom would reject both and would look for an alternative that was based on the very ideals that once made the US the greatest country in the world.
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