I just finished my taxes-after having to take a time out to do some research on one particular set of deductions and non-deductions. I even ended up calling the IRS-where a very helpful lady helped me run the numbers to make sure I had it right. Guess we need to f*ck her out of her pension.
Now-in tebagger land, I should be outraged at the taxes I am paying. But I am not-taxes are a fact of life, and I for one want lots of services from the government. Unfortunately, we don’t get near the level of services available elsewhere.
Probably the biggest lesson I have learned is how much room to live there is-once you know what your income stream is. And for all I complain about the S.O.-she is a saving machine, and has taught me how to be one too. Had my ex been that way ( and been a FM too), who knows how rich I might be? But it would be a sin to complain-so as much as I like to on other days-today I won’t. My taxes reminded how truly blessed I am compared to other Americans who are getting screwed daily by the policies advocated by that worthless piece of human excrement Allen West, Eric Cantor and any one of your friendly neighborhood teabaggers.
The video below however, points out something you should be outraged about. I didn’t cause the recession and I pay my taxes.
Unlike some people who a) did cause the recession and then decided to put the blame on us and b) didn’t pay their taxes-but were more than willing to exploit Indonesians, Bangladeshis, Vietnamese, Filipinos etc etc.
Allen West-go f*ck your self!
Great video. So very true. Amazing how dedication to reducing the debt always fails to include corporate/very wealthy intersts. At least the tea baggers and their republican lackeys are consistent.
Skippy, I agree somewhat with this video. But see my rant on the the free phones in your NASA post, and how some companies along withgovernment intrusion have rigged the system. Big banks, along with HUD, PUSH-Rainbow Coalition, and NACN (Al Sharpton’s group) pushed for more “fairness in lending” so that people could get loans who probably shouldn’t have gotten one to pump up the housing bubble, and the following trading of mortages.
I know you don’t listen to Urban radio, but you should have heard the PSA’s being aired back in the late 90’s and early 2000’s about how it was your “right to own a home” and how these agencies can help you get the loans that you deserve to get your dream. I can even give you examples of people who used a false SSAN, bought a home, and when the rates went up left the home (they were also illegal from south of the border and came here only to work).
I say just go to a straight flat tax both for personal and corporations and then the government should learn to live within its means.
On a side note, I see the whole “carbon credit” scam going the same way as the housing mortage business.
But the system already has legal remedies for many of those excesses. I-Verify is one. I can’t buy a mutual fund without a valid SSN. I find it amazing that an someone can buy a home.
And also I’ll come back to my point-for ever person you cite above, there are 9 that are legitimate hardship.
Skippy, yes business are supposed to use I-verify but they don’t. Just like when you read stories that thousands of dead people are still on the voting rolls and some have still voted.
A great article came out in one of the CA newspapers, and was talked about on KFI. It told the story of a reporter who went on a bike ride in his old farming community and how much it had changed. What was really shocking was how many compliance issues were very obvious (dumping of trash by the side of the road, selling food from roadside trucks, etc), stuff that the CA government would fine you silly for, but yet somehow they overlook what is going on there. Why, because most of these people were non-taxpers who when faced with a fing would just simply “vanish.” Same with you and your examples, you are well established and legitimate. Much easier to make you go through the hoops of providing SSN, and to levy fines against you if you don’t comply.
I agree that there are legitimate hardship cases out there. But not too sound “its there own fault” in many cases it is. I have just seen so many examples of people I know “getting over on the system” that would shock you. I can’t blame them, when they see business and government do the same. I heard one talk show host sum it up nicely, how can someone get elected to a position (Congressman, Senator) and make a steady salary, and yet when they leave office have amassed a fortune (look at Sen Diane Feinstein, Pelosi, etc).
Ah but our host does not believe VDH and never will and if he meant what he wrote he’d do the right thing and give all of his money to the state because they’re more entitled to it than he is.
VDH can suck my dick.
Some words for you guys and VDH from my Candian Counterpart:
Here’s how it worked. After Bill Clinton and the Republicans completely deregulated the financial services industry in 1999, investment bankers got the brilliant idea that they could turn mortgages into derivatives called collateralized debt obligations. That meant that if you’re a branch manager in fucking Duluth or something, you would sell the mortgage you just handed out to Goldman Sachs for face value. The investment bank would then bundle that mortgage with thousands of other shitty loans, cut them up, and sell them to investors, more often than not institutional pension funds.
Now if you want to build an over the counter business from that, you want to sell loans with a very high interest rate, since that makes investors think that they’re getting a higher than average rate of return. As it happens, few loans have higher interest rates than subprime mortgages because of the adjustable rates that were built into most of them. And the adjustable rates got even more profitable for the banks when Alan Greenspan jacked up interest rates in early 2006. Unfortunately, that also started the tidal wave of defaults that would throw the U.S economy into recession the following year.
All of a sudden, it didn’t make a difference if the bank manager in Duluth ever saw a nickle back from the mortgage he just issued because he didn’t own it anymore. In fact, he was incentivized to issue as many subprime mortgages as he possibly could. As early as 2003 the entire industry was overrun with rampant and blatant fraud as mortgage lenders were giving money to people without assests, jobs or even a basic command of the English language. This was easy because they no longer carried any risk in doing so, the investment banks and institutional investors relieved him of it almost immediately.
By 2006, the wizards at the investment banks finally began to understand that they were making a fortune from an illusion, so they started to hedge their own exposure through credit default swaps, mostly through AIG. In time, they used CDS’s to bet against one another’s bad CDO investments. And when the bubble burst, all of them were so over-leveraged (betting as much as $40 for every $1 that they actually had. In the case of Iceland, just three banks were betting 100 times the entire country’s GDP) that no one could pay off the trillions of dollars that they owed one another.
Everyone went immediately to hell, except for the guys who originally issued the subprime mortgages. If they got out early enough, they got spectacularly rich.
If you got through the last five paragraphs, chances are that you’re not a member of the Tea Party. Financial instruments are very complicated and Tea Partiers are very stupid, so they just blamed the Community Reinvestment Act of 1977 instead. The fact that the savings and loan industry was tanked through exactly the same kind of deregulation, greed and rampant stupidity – completely independent of the CRA – twenty years earlier escapes them completely. It turns out that life is a lot less complicated when you’re not burdened by actually knowing stuff.
Since the Republican party is at the forefront of the idealization of ignorance, it stands to reason that those same idiots would take a tawdry ghoul of a real estate jackal like Donald Trump to their bosoms in the lead up to the Great Apocalypse of Ought Twelve. There are now multiple polls that show him in the very top tier of preferred Republican primary candidates. In most of those polls, he’s even kicking Sarah Palin’s superior little ass across the country.
And that makes sense. If you’re one of those moronic “values voters,” where else are you going to turn other than a guy who’s been through two bankruptcies, three wives and tried to skeeve his way out of paying a $40 million loan as recently as two years ago? He’s a goddamn natural and if you don’t see that, you don’t know the first thing about modern conservatism.
Skippy,
Good summary. But before you start blaming Trump, remember it all started under “Slick Willie.” As I had mentioned, if you listened to Urban radio at that time, they were pretty much begging you to go to banks and “demand your fair share” in getting a loan.
Just like I mentioned with the Virgin cell phone service to people who are on public assistance, the same story will happen all over again. Not as major with housing, but when you look at it, what they will be charging poor people for phone service over the basic amount is just like what we had with the lending industry and the cash advance companies.
Maurice,
and don’t forget it’s all VDH’s fault.
Oh and remember the interest rates one used to get for putting $ into an S&L back then as Whitewater was washing through the White House? Dad put a lot of money into a lot of S&Ls and carefully took out the interest each and every month knowing it was just a matter of time. FDIC took care of the rest. Gaming a known loss. One created by the government just like so many other losses that politics make.
Skippy,
A brief history lesson:
1977: Jimmy Carter (D) signs the Community Reinvestment Act, guaranteeing homes loans to low-income families.
1999: Bill Clinton (D) puts the CRA on steroids by pushing Fannie Mae & Freddie Mac (F&F) to increase the number of sub-prime loans (owning a home is now a ‘right’.).
1999 (September): New York Times publishes an article, ‘Fannie Mae Eases Credit To Aid Mortgage Lending’, which warned of the coming crisis due to lax lending policies of the Clinton (D) administration.
2003: White House calls Fannie and Freddie a “systemic risk”. The Bush (R) administration pushes Congress to enact new regulations.
2003: Barney Frank (D) says F&F are “not in a crisis” and bashes Republicans for crying wolf and calls F&F “Financially Sound” Democrats block Republican sponsored regulation legislation.
2005: Fed Reserve Chairman Alan Greenspan voices warning over F&F accounting “We are placing the total financial system of the future at a substantial risk”
2005: Sen Charles Schumer (D) says “I think F & F over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world.”.
2006 Sen. John McCain (R) again calls for reform of the regulatory structure that governs F&F.
2006: Democrats again block reform legislation.
2008: Housing market collapses: Democrats blame the Republicans.
Obviously the Republicans aren’t free of guilt concerning the cause of this crisis because they didn’t try hard enough to prevent it and in some cases allowed it to happen (one of the reasons conservatives and independents disliked Bush by the way and one of the reasons that many of those votes went to Obama as a ‘protest’ against Bush’s liberal tendencies). But as can plainly be seen the Democrats hold the lion’s share of blame for the economic melt down we’re currently enjoying.
Federal Reserve Board data show that:
•More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
•Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
•Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that’s being lambasted by conservative critics.
The “turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007,” the President’s
To be sure, encouraging lower-income Americans to become homeowners gave unsophisticated borrowers and unscrupulous lenders and mortgage brokers more chances to turn dreams of homeownership in nightmares.
But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party’s standard bearer, President Bush, didn’t criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.
Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.
During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.
In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.
Fueled by low interest rates and cheap credit, home prices between 2001 and 2007 galloped beyond anything ever seen, and that fueled demand for mortgage-backed securities, the technical term for mortgages that are sold to a company, usually an investment bank, which then pools and sells them into the secondary mortgage market.
About 70 percent of all U.S. mortgages are in this secondary mortgage market, according to the Federal Reserve.
Conservative critics also blame the subprime lending mess on the Community Reinvestment Act, a 31-year-old law aimed at freeing credit for underserved neighborhoods.
Congress created the CRA in 1977 to reverse years of redlining and other restrictive banking practices that locked the poor, and especially minorities, out of homeownership and the tax breaks and wealth creation it affords. The CRA requires federally regulated and insured financial institutions to show that they’re lending and investing in their communities.
Conservative columnist Charles Krauthammer wrote recently that while the goal of the CRA was admirable, “it led to tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That’s called subprime lending. It lies at the root of our current calamity.”
Fannie and Freddie, however, didn’t pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market.
What’s more, only commercial banks and thrifts must follow CRA rules. The investment banks don’t, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.
These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren’t subject to federal regulation or the CRA, originated most of the subprime loans.
In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today’s problems.
“Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans,” she said. “The CRA has increased the volume of responsible lending to low- and moderate-income households.”
In a book on the sub-prime lending collapse published in June 2007, the late Federal Reserve Governor Ed Gramlich wrote that only one-third of all CRA loans had interest rates high enough to be considered sub-prime and that to the pleasant surprise of commercial banks there were low default rates. Banks that participated in CRA lending had found, he wrote, “that this new lending is good business.”
Skippy,
As we have both posted, there is plenty of blame to go around. Both sides are as guilty.
However, what I want to bring out to you is that sometimes all of these researchers and pundits go after a problem in a set pattern. You guys look at a problem and how it works from a higher level, rather than a “boots on the ground” view.
I saw the same thing with the Ken Starr approach to going after the Clintons. He went after them looking into the things that someone of his type would commit, and not was really going on at the ground level. I’m from AR, and what those of us who were in the “hood” knew about him and some of his connects knew why he was called “slick Willie.”
I bring this up, because look at my post, at the 1999 year mark and the comments about a “right” to own a home. I am sure as I have stated you don’t listen to urban radio and TV, but when these messages were going out, groups like ACORN, HUD, Rainbow-PUSH, NACN, LaRaza were going full bore to get people to apply for loans and get houses. I was on AD at the time, and I often wondered how people I knew were buying these nice homes and cars, and they were making much less than I (a LT at the time).
A lot of back room deals were going on between all of the Federal Agencies, but the bottom line is they can’t start the slaughter process without the cattle being led in, which in this case are the people applying for and getting the loans who really didn’t qualify for them. If they didn’t they would have been caught for outright stealing, but this way they can make it look legit.
gaming a known loss.