It is very ironic that the Democrats and Obama have an opportunity to fix what they started: the sub-prime mortgage crisis. The entire problem started with the Community Reinvestment Act that was signed under the Carter administration. This act created an incentive for low-income borrowers, however it didn’t work too well. The Act was not much of a problem until 1995 when changes were made under the Clinton administration that forced banks to issue ‘subprime loans.’ So, the only way to turn a profit through selling more mortgages was to offer these loans to all income levels. However, under the new provisions, banks would be fined if they did not issue enough subprime loans.
This Act worked great at aiding more low-income families at giving loans because there was no money down and had variable interest rates. But when interest rates and gas prices rose, low-income houses had to stop paying bills and that meant not paying their mortgage. So, when borrowers stop paying, lenders stop lending, and the housing market collapsed. With only sellers in the market and no buyers, Fannie Mae’s guarantees became worthless and ultimately banks collapsed.
So, why are the Democrats at fault for the housing crisis and ultimately our current recession? Because before the Community Reinvestment Act house prices rose with the inflation rate, and after they skyrocketed, which in no way promoted affordable housing. On three occasions, the Republicans tried to change the CRA, but were stopped by Democrats under the pretense that low-income families would no longer receive loans. Under further examination, numerous ties and connections arise between Obama and Fannie Mae officers who ultimately resigned upon the subprime mortgage crisis. Obama, himself, has even sued banks for not issuing enough loans. So, if Obama is one of the biggest antagonists of our current problem that has lead to a global downturn, why is he in office?
In the end, the problem did not arise through free markets, poor people not paying their debts, or even deregulation, but bad government regulation and exterior motives of the people in power.
Saturday, February 28, 2009
Pony Pride
When I think about SMU’s sports team I feel upset that we do not have the same prestige or tradition as some of our rivals do. I realize that we are a smaller school than most, but I don’t think that is an appropriate excuse. I do take into consideration the death penalty that the football program received, but I think a school like SMU has the potential to truly excel on the athletic fields.
How good our teams are is not as big of problem issue as our apparent lack of school spirit for our teams. I attended football games in the fall, and it seemed to me that football games are only an excuse to Boulevard and not actually come together to support our team. The Boulevard receives a much better turn out of the student body than the football game does, and I really hope that changes. I think Boulevarding is great, however I believe it is important that we start to fill Ford Stadium because passion for our school and our teams will only leave SMU a better place. I recently attend a basketball game, and needless to say, the turnout was very much reminiscent of a typical Saturday at Ford Stadium.
I will agree that it is easier to draw people to a sporting event when the teams are very successful, but from an athlete’s perspective fans can often win games for a team due to their intensity and enthusiasm. With the hopeful rise to prominence of our football and basketball teams the future of SMU’s student involvement in athletics look optimistic, and hopefully have positive consequences for school spirit.
How good our teams are is not as big of problem issue as our apparent lack of school spirit for our teams. I attended football games in the fall, and it seemed to me that football games are only an excuse to Boulevard and not actually come together to support our team. The Boulevard receives a much better turn out of the student body than the football game does, and I really hope that changes. I think Boulevarding is great, however I believe it is important that we start to fill Ford Stadium because passion for our school and our teams will only leave SMU a better place. I recently attend a basketball game, and needless to say, the turnout was very much reminiscent of a typical Saturday at Ford Stadium.
I will agree that it is easier to draw people to a sporting event when the teams are very successful, but from an athlete’s perspective fans can often win games for a team due to their intensity and enthusiasm. With the hopeful rise to prominence of our football and basketball teams the future of SMU’s student involvement in athletics look optimistic, and hopefully have positive consequences for school spirit.
Where does the time go?
Authors like Lee Siegel and Steven Johnson argue the pluses and negatives of the technology boom and the Internet on our society and intelligence, but neither seems to touch on the time commitment that Internet activity, like blogging, merit. To truly benefit from blogging or Internet interaction, I feel it is insufficient to solely worry about your own blog. Instead, the majority of one’s time should be spent on reading other blogs and searching through clicking on links. However, as I just browsed around reading other people’s blogs I failed to realize I spent 25 minutes just skimming random posts. For me, getting sucked into mindless, unproductive activates occurs multiple times a day, and I often use ‘doing nothing’ on the Internet to kill time.
I just wonder how much more schoolwork or how much more productive I could be if I totaled up all my unproductive time, and accomplished things I had pushed back. I realize that jumping from link to link is mentally stimulating because one is surrounding themselves with diverse information, but is 30 minutes of skimming blogs really worth my time? Most of the time, the posts are just someone’s opinion that is thrown at us with the assumption that it is valuable knowledge.
This issue of time does not just apply to blogging, but to most of the new forms of technology that are engrained in everyday American culture. There is no doubting that my generation spends our time differently than my parents generation, however I think it’s too early to tell the effects of such a culture shift. In theory, our productive it may be so much higher now that we have time to kill because we can accomplish the same amount today that took twice the time 30 years ago. Either way, the Internet can act as a double edge-sword that has something to offer everyone. I hate to formulate an opinion about blogging before I have ample exposure, but I want to give it a fair shot before I dismiss it because of the time requirement.
I just wonder how much more schoolwork or how much more productive I could be if I totaled up all my unproductive time, and accomplished things I had pushed back. I realize that jumping from link to link is mentally stimulating because one is surrounding themselves with diverse information, but is 30 minutes of skimming blogs really worth my time? Most of the time, the posts are just someone’s opinion that is thrown at us with the assumption that it is valuable knowledge.
This issue of time does not just apply to blogging, but to most of the new forms of technology that are engrained in everyday American culture. There is no doubting that my generation spends our time differently than my parents generation, however I think it’s too early to tell the effects of such a culture shift. In theory, our productive it may be so much higher now that we have time to kill because we can accomplish the same amount today that took twice the time 30 years ago. Either way, the Internet can act as a double edge-sword that has something to offer everyone. I hate to formulate an opinion about blogging before I have ample exposure, but I want to give it a fair shot before I dismiss it because of the time requirement.
Are we really stimulating?
I think its safe to say that the current state of the economy is most American’s number one concern, and it is certain the Obama administration’s greatest task at hand. With every fiscal and monetary economic tool at work, why isn’t this recession turning around? American’s are scared and short for liquid capital, and I think the new Obama stimulus package will not have the desired effect he wants it to and we will sink ourselves into a bigger deficit.
The taxpayer ultimately funds whatever government spends, so why would someone spend more money now when they have to pay higher taxes later. The Ricardian Equivalence Proposition is the idea that a tax cut or more money in a consumer’s pocket will not boost Consumption or GDP. This assumption assumes that the individual realizes the benefit of having more money now will offset with having less in the future, so they do not change their spending habits. If this is true, then why do we keep drafting up stimulus packages when this first one never even worked?
I think the government needs to take a step back and assess their role in this problem. The Federal Reserve has about done as much as they can, so it is the fiscal policy that will have to save this economy. Given the almost complete shift to a Keynesian approach, our government has to stimulate demand. Putting money into American’s hands, who already have mounting debt, only soaks up their own balance sheets, and does not get pumped into the economy. This same dilemma is happening with banks and large corporations who lend money and contribute to large purchases of capital stock, respectively. Right now there is no demand and thus no need for supply and employment, and that needs to change very soon.
I am not suggesting that Obama should create government programs similar to FDR, but government spending has to put people to work. If unemployment rising, there are less people with money, which means they will be buying less, and ultimately higher unemployment numbers. So, ironic as it is, I think we need temporary regulation in order to get us back to the free market we know and love. For the invisible hand to take over again, the money were spending has to put specifically guided into the economy or else we will continue to spin our wheels in this recession.
The taxpayer ultimately funds whatever government spends, so why would someone spend more money now when they have to pay higher taxes later. The Ricardian Equivalence Proposition is the idea that a tax cut or more money in a consumer’s pocket will not boost Consumption or GDP. This assumption assumes that the individual realizes the benefit of having more money now will offset with having less in the future, so they do not change their spending habits. If this is true, then why do we keep drafting up stimulus packages when this first one never even worked?
I think the government needs to take a step back and assess their role in this problem. The Federal Reserve has about done as much as they can, so it is the fiscal policy that will have to save this economy. Given the almost complete shift to a Keynesian approach, our government has to stimulate demand. Putting money into American’s hands, who already have mounting debt, only soaks up their own balance sheets, and does not get pumped into the economy. This same dilemma is happening with banks and large corporations who lend money and contribute to large purchases of capital stock, respectively. Right now there is no demand and thus no need for supply and employment, and that needs to change very soon.
I am not suggesting that Obama should create government programs similar to FDR, but government spending has to put people to work. If unemployment rising, there are less people with money, which means they will be buying less, and ultimately higher unemployment numbers. So, ironic as it is, I think we need temporary regulation in order to get us back to the free market we know and love. For the invisible hand to take over again, the money were spending has to put specifically guided into the economy or else we will continue to spin our wheels in this recession.
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