No bailout for middle, lower income groups

[Sir Bandelot]

U.S. income gap widens in slump

The recession has hit middle-income and poor families hardest, widening the economic gap between the richest and poorest Americans, census figures show.

"No one should be surprised at the increased disparity," said Richard Freeman, an economist at Harvard University. "Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have."

No, no one should be surprised that the bailout helped the rich more than the middle class or poor. For them there is no bailout. Because for one thing the "golden parachute the folks at the top have", came right out of their pockets.

Edited September 29, 2009 by Sir Bandelot

[kimmy]

I have been wondering about the fairness of the economic stimulus and the bailouts and all of that.

I am wondering how much of the stimulus money is going to create jobs and preserve the income and assets of people who already have considerable assets built up.

Ok, it's very sad if the economic downturn has caused people to lose jobs and put people in danger of losing their homes. But when I look around me, in the community I live in, and reflect on all these half-million dollar homes with half-million-dollar mortgages, it makes me hope and pray that these aren't the people who the stimulus is supposed to be helping.

Seems to me that a lot of people live far beyond their means, and if the stimulus money is being spent from my taxes and yours to help people continue to live beyond their means, I'm not wild about it, to be honest.

-k

[Argus]

Seems to me that a lot of people live far beyond their means, and if the stimulus money is being spent from my taxes and yours to help people continue to live beyond their means, I'm not wild about it, to be honest.

I don't think there's a lot of evidence of that happening here in Canada. In the US, however, it seems to me that the majority of the stimulus money went to supporting large financial institutions which made a sustained series of poor decisions based on greed - and thus should have been allowed to collapse. If you invested in a bad bank and it went under - so sad for you. The US probably would have been better to put out that billion helping small business survive the temporary mess in the financial markets.

What gets me is all those greedy CEOs, bankers and brokers who led their companies into ruin are still very wealthy men. Aside from actual criminal acts none have been charged with anything, nor required to pay the piper for their greed-inspired incompetence.

[Pliny]

I don't think there's a lot of evidence of that happening here in Canada. In the US, however, it seems to me that the majority of the stimulus money went to supporting large financial institutions which made a sustained series of poor decisions based on greed - and thus should have been allowed to collapse. If you invested in a bad bank and it went under - so sad for you. The US probably would have been better to put out that billion helping small business survive the temporary mess in the financial markets.

What gets me is all those greedy CEOs, bankers and brokers who led their companies into ruin are still very wealthy men. Aside from actual criminal acts none have been charged with anything, nor required to pay the piper for their greed-inspired incompetence.

I like to get away from the term greed. Who exactly is greedy? Is the whole system corrupt and everyone at the top or who can rise to the top greedy? did they dictate the terms of their employment? Or is thaqt just the way it is set up?

The whole problem of the economy is the ability of government to economically engineer who fails and who succeeds by being able to manufacture and distribute fiat currencies as they see fit. They do it economically and they do it socially.

[geoffrey]

The bailouts mostly benefited low income individuals in that they can now secure mortgages again that they'd never qualify for from a reasonable financial institution or at reasonable interest rates.

For the middle and higher income among us, we got hosed.

[kimmy]

The bailouts mostly benefited low income individuals in that they can now secure mortgages again that they'd never qualify for from a reasonable financial institution or at reasonable interest rates.

For the middle and higher income among us, we got hosed.

I dunno, it sounds like it worked out ok for those of you who own property, at least.

Readily available mortgages for deadbeats means demand for property continues to outstrip supply, which ensures that prices stay high. Seems to me that the bailouts may have saved the middle and higher income folks from losing tens or hundreds of thousands of dollars in equity that would have vanished if a real-estate "market correction" had been allowed to happen.

-k

[Oleg Bach]

Bail outs are for the arrogant and privledged that proved themselves to be poor managers and losers. It was very anti-Darwinian in it's nature - to prop up people that the laws of nature finally deemed poor...now we have to keep the poor rich afloat who are not fit to be rich..but INSIST that they are entitled even though they are lazy, corrupt and stupid.

[kimmy]

I dunno, it sounds like it worked out ok for those of you who own property, at least.

Readily available mortgages for deadbeats means demand for property continues to outstrip supply, which ensures that prices stay high. Seems to me that the bailouts may have saved the middle and higher income folks from losing tens or hundreds of thousands of dollars in equity that would have vanished if a real-estate "market correction" had been allowed to happen.

Gee, I'm surprised that none of you home-owners felt compelled to defend the largesse you've received at my expense.

-k

[geoffrey]

I dunno, it sounds like it worked out ok for those of you who own property, at least.

Readily available mortgages for deadbeats means demand for property continues to outstrip supply, which ensures that prices stay high. Seems to me that the bailouts may have saved the middle and higher income folks from losing tens or hundreds of thousands of dollars in equity that would have vanished if a real-estate "market correction" had been allowed to happen.

-k

Ya, but it's another bubble Kimmy. I haven't gained any real wealth because of this, it will all go poof. Out of my pocket in taxation and back in through inflation? No, I don't think so.

Anyways, there wasn't any bank/mortgage bailouts in Canada anyway, so none of us "fat cats" made any money off the taxpayer here. Instead all my money went to uneducated hoodlums building cars for six figures in Ontario and extended EI benefits for deadbeats in the Maritimes.

The artifical depression of interest rates is another topic all together. But what I gain by having idiots buying houses they can't afford I lose in diminished investment returns. And in the end, the bubble will pop and my money will go again to supporting unsustainble union jobs and that sort of thing.

Bail outs are for the arrogant and privledged that proved themselves to be poor managers and losers. It was very anti-Darwinian in it's nature - to prop up people that the laws of nature finally deemed poor...now we have to keep the poor rich afloat who are not fit to be rich..but INSIST that they are entitled even though they are lazy, corrupt and stupid.

Well, actually if we are talking about the US, the people that were propped up are those that are getting their mortgages repriced by the government because they bit of more then they could chew. That's anti-Darwinian. These people could never afford a house, but instead they thought they could afford the six bedroom mansion. They buy it and default, destroying the economy in the process. Yes, the banks should have screened better, but your still repsonsible for your own financial decisions.

I'd be ok if you let Lehman Brothers fail and AIG executives starve. But American families should be sleeping in gutters and eating from food banks for their stupid as well. You can't only target the executives because they drive nice cars. The average greedy individual is just as responsibile. They should be homeless and starving. Not enjoying their house in a government subsidized mortgage while the responsible people earn their keep and housing.

Gee, I'm surprised that none of you home-owners felt compelled to defend the largesse you've received at my expense.

-k

Huh?

[Oleg Bach]

U.S. income gap widens in slump

The recession has hit middle-income and poor families hardest, widening the economic gap between the richest and poorest Americans, census figures show.

"No one should be surprised at the increased disparity," said Richard Freeman, an economist at Harvard University. "Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have."

No, no one should be surprised that the bailout helped the rich more than the middle class or poor. For them there is no bailout. Because for one thing the "golden parachute the folks at the top have", came right out of their pockets.

When an American bank states to the state. "We are about to collapse because we have abused money to the point that it has become useless - in effect we are broke - can you please take as much money from the average citzen and the poor and hand it over to us?" This whole mentality is the eccense of sickening and absurd entitlement that boarders on insane...BUT the public is stupid and they worship the high end of rich society - even when they go broke and come to the door begging for bread - I don't get it..is it just me?

[geoffrey]

A few banks did that, but millions of Americans that bit off more than they could chew did that too. Money goes from the responsible to the irresponsible. That's the way government works. Like I said above, the banks should have been allowed to fail and everyone that needed a morgage bailout should be living in a gutter. That would be equity.

[Oleg Bach]

A few banks did that, but millions of Americans that bit off more than they could chew did that too. Money goes from the responsible to the irresponsible. That's the way government works. Like I said above, the banks should have been allowed to fail and everyone that needed a morgage bailout should be living in a gutter. That would be equity.

Or give them housing for life - in one of our non-profit projects? Yes siree bub..it had nothing to do with the banks - it was those poor stupid people that are to blame for over extending themselves - those that own the banks are smarter than the average Joe -------Not so - there has been a general decline in intelligence at the high end of society as well as the low end - what makes you think that the rich are smart? If they were this would not have happened.

[geoffrey]

So if you take out massive amounts of loans that you can never repay it's the lenders fault? You don't have any responsibility for your financial situation? You should max out all debt until someone stops you? If they don't stop you quick enough it's their fault?

What?

You live in some bubble with a strong culture of entitlement. The reality is that you alone are responsible for your financial situation and if you go bankrupt, you only have yourself to blame. You failed. Not the bank. Not anyone else. You failed.

[Sir Bandelot]

So if you take out massive amounts of loans that you can never repay it's the lenders fault? You don't have any responsibility for your financial situation? You should max out all debt until someone stops you? If they don't stop you quick enough it's their fault?

What?

You live in some bubble with a strong culture of entitlement. The reality is that you alone are responsible for your financial situation and if you go bankrupt, you only have yourself to blame. You failed. Not the bank. Not anyone else. You failed.

And if the game is found out to be rigged, and it is, then there can be no real "failure" in the true sense, since there was never any chance to win at all. But looks to me like the rich folks did alright again, after all aren't they the ones who got the bailout money. I don't own a bank or run an automotive company. In fact I paid for part of that bailout they gave away to shore up the banks and corporations... some of that was money we paid to the state, to build better roads and schools, and hospitals. Those projects that keep getting cancelled, Mr. Senator... why do they keep getting cancelled while the banks walk away unscathed?

They didn't just take the bailout money, they took more out of the peoples pockets, which halts consumerism, further crippling the economy.

Edited November 18, 2009 by Sir Bandelot

[kimmy]

Ya, but it's another bubble Kimmy. I haven't gained any real wealth because of this, it will all go poof. Out of my pocket in taxation and back in through inflation? No, I don't think so.

The sunnovabitch I work for bought a house when the market was down, hung onto it for less than a year, and was able to flip it a few months ago for a 6 figure profit because once again chumps are apparently able to get mortgages easily again. When I see that stain rolling around in his Porsche it makes me skeptical that people aren't making real wealth out of this bubble.

Anyways, there wasn't any bank/mortgage bailouts in Canada anyway, so none of us "fat cats" made any money off the taxpayer here. Instead all my money went to uneducated hoodlums building cars for six figures in Ontario and extended EI benefits for deadbeats in the Maritimes.

It seems to me that our government bought billions of dollars of bad mortgages off the banks to proactively protect our banks from the kind of hit that banks in other countries suffered. Seems to me that Canadian taxpayers still picked up the tab for a lot of people having mortgages they should have never been given.

It seems to me like banks would be more cautious about handing out risky mortgages if the government wasn't willing to rush to the rescue last time out.

-k

Edited November 22, 2009 by kimmy

[msj]

Kimmy, you're use of the past tense is incorrect.

Many Canadians are clueless as to just how bad our system has become.

A good primer can be found here:

CMHC - Canada's Breaking Point

[geoffrey]

MSJ: I will suggest that the decrease in home equity upon purchase is as much a function of higher home prices than it is of any sort of regulatory change. Maybe 50/50. It's an important point.

And it's also why central banks need to lean into asset bubbles. Asset bubbles pose systemic risk... far more than Goldman Sachs or AIG does/did. The ignorance of central banks regarding this is a bigger risk than CMHC changing their mortgage term conditions for securitized mortgages.

[Oleg Bach]

Bail out everybody on mass at the same instance - the ancient Jews had this thing where every fifty years they would forgive all debts..and allow EVERYBODY to start fresh. At this rate paying some group of fat parasites a million bucks a minute is sheer abuse. Those at the sucking end of this vampirism should be jailed - How can we not call persons NOT crimminals that would enslave a hard working and honest world? Fire the fu**kers - why pay ten times what something is worth because of some nasty unconscionable contract that destroys society - are we stupid - put an end to this crap....We see a clock ticking..at a thousand dollars a second - who is getting this free money and why do we actually have to comply to the will of these evil and stupid sons of bitches...deslove this debt! What are they going to do..come to your house and beat you up?

WHY do we show grace and honour to men that show us NOT the same? I could see the sense in it if these people cared about us - we would do our best and help these big dogs - they have no mercy - I suggest we show them the same.

[Oleg Bach]

Okay the banking industry is a needed thing - Interests that are uncontrolled are not a needed thing. Biblically speaking you are not suppose to lend money at an interest - but then if we did not use the interest system - the super rich would just be average Joes. They would be proper Lords (keeper of the bread) - and not horders of the bread..greed is mental illness and causes in time the incrimental murder of the poor..and it causes strife between all of us..BUT if we were not at each others throats constantly over money - the powerful and rich would actually have to do some intelligent ruling of the masses - it's easier to hord and ignore human suffering - besides it makes the greedy ones feel superiour..we would not want their self esteem damanged ---would we?

[Sir Bandelot]

Uncomfortable dynamic

Since the summer, the administration has been facing an uncomfortable dynamic in the economy. The ranks of the jobless have been growing, while big financial firms that got taxpayer bailout money have been thriving.

http://www.msnbc.msn.com/id/34375497/ns/business-washington_post/

Exposes the purpose of the "bailout", as a free-for-all insurance plan for the bankers and rich, the premiums paid for by the taxpayer. Enjoy... don't forget to submit your taxes for 2009 on time, or you'll pay an additional penalty.

[Oleg Bach]

Super rich people that have authority over governement will not allow anyone to be bailed out other than themselves...sorry - Looks like the save the company (themselves) and fire the workers - YOU! Odd that they take our money and then refuse to give it back in the form of employment?

[bush_cheney2004]

... Looks like the save the company (themselves) and fire the workers - YOU! Odd that they take our money and then refuse to give it back in the form of employment?

If YOUR money is so special, why wasn't it used start YOUR OWN company? Are the "workers" just rich and stupid at the same time?

[Oleg Bach]

If YOUR money is so special, why wasn't it used start YOUR OWN company? Are the "workers" just rich and stupid at the same time?

A worker that does his job IS the company! Do you actually belive that some executive sitting in a black glass tower could actually put on the mitts and drive that drill into the ground personally to achieve oil wealth - without the real guys doing the real work a "company" would not exist - I just expect the top dogs to be grateful to the little dogs that do the heavey lifting..but are disposed of like garbage if the slightest hint of fiscal failure shows it's ugly head - for better or for worse.......I would love to start my own company - but as Howard Hughes said - partnership is a dead weight - and the partners that I would consider don't like me because I have the talent and brains and they have the money - funny how the stupid guy ends up with all the cash.

[Sir Bandelot]

without the real guys doing the real work a "company" would not exist

Unless of course, they contract out the work to some company in CHINA.

Do yo think that's absurd? Welcome to the economy of the 21st century.

[ToadBrother]

Uncomfortable dynamic

Since the summer, the administration has been facing an uncomfortable dynamic in the economy. The ranks of the jobless have been growing, while big financial firms that got taxpayer bailout money have been thriving.

http://www.msnbc.msn.com/id/34375497/ns/business-washington_post/

Exposes the purpose of the "bailout", as a free-for-all insurance plan for the bankers and rich, the premiums paid for by the taxpayer. Enjoy... don't forget to submit your taxes for 2009 on time, or you'll pay an additional penalty.

I'm still of the opinion that if a stimulus was needed, what the US and Canadian governments should have done was written a $10,000 cheque to every citizen, regardless of age. That would have done a helluva lot more to stimulate Main Street than simply dumping it on Wall Street and Bay Street, and creating thousands of pothole filling projects. With 20,000 bucks my wife and I would have received, I would have built that addition that I'm having to do much slower because of funds. I would have dumped pretty much of all of it into my local lumberyards and hardware stores, assuring jobs stayed in my town. My kids cheques would have gone towards their education, thus assuring the next generation was getting the skills they need plus dumping badly needed money into post-secondary education. Hell, if you just decided to drink and gamble the whole damned thing away, it would still benefit liquor store, bar and casino employees, and the taxpayer too, since these activities see a lot of cash end up back in government revenues.