Krugman's take on Age of Greed

[BK]

Re: Krugman's take on Age of Greed

Of Course CRA was part of the Problem and still is. CRA spawned a great network of CDFIs and other Non-profits that specialize in moving Tax Payer supplied Funds and Tax Credits for Banks.

And CRA is still part of the problem. You are aware that every Bill Clinton worked hard to expand CRA and his truly brilliant move was "New Market Tax Credits" under the umbrella of CRA. The New Market Tax Credits are a phenomenal political tool because it feeds cash to Poor - and often Democratic leaning Inner City Neighborhood awhile giving Tax Credit of approximately 40% to the Bank that provides the Cash.
The best part is the Secretary Of Treasury determines the allocation of the Tax Credit. AS itulip readers know Banks have the ability to create Money based on their Reserves. If you pay attention Banks are in the midst of drastically expanding the "New Market Tax Credit" operations to reduce their Corporate Taxes. Originally the New Market Tax Credits under CRA were limited to Real Estate - but, Real Estate isn't considered a great investment right now and New Markets get expanded to cover things beyond Real Estate - just to keep the Tax Breaks for Banks and Campaign Donations to predominately Democratic Politicians.
Goldman Sachs launched "http://www2.goldmansachs.com/citizenship/10000-small-businesses/index.html?cid=PS_01_07_06_99_01_04
This is a CDFI which is a requirement for channeling the New Market Tax Credits under the Community Development Act.
The Presidents stance on the Environment is about Tax Credits. Tax Credits that are completely controlled by the Secretary of Treasury and go to companies that support the Presidents stated Policies and appear to result in Campaign donations.

For example,
Angeleno Group- is an Investment firm that funds appears to only fund Investments that receive New Market Tax Credits and makes Environmental investments. The Angeleno Group Executives gave $11,262 for the 2008 Obama Campaign.
Banks investing Funds with Angeleno get a 40% Tax Credit, over the first 7 years, from Investing in New Market Tax Credit qualified projects. I suspect this makes it easier for Angeleno Group to attract capital.

Angeleno is funding firms like www.VerengoSolar.com - there are lots of Investments Funds supporting these 'new industries" thanks to tax credits.
Another Green Investment House is....
Los Angeles Solar NMTC Fund

New Market Tax Credits - have been used by a company www.trfund.com - to eliminate food Deserts in the inner city. TRFund Executives gave approximately $12,000 for the Presidents Campaign in 2008.

So, New Market Tax Credits are used for everything from solar power to providing low income housing to preventing fat kids through eliminating food deserts.

These Tax Credits Reduce Corporate Income Taxes that Banks will pay seven years into the future.

Next time you see the President at a Solar or Wind Turbine Company - think TAX CREDITS = Campaign Donations.

Did you know the US Treasury as an entire Department (www.cdfifund.gov) that assigns New Market Tax Credits. A department Dedicated to reducing Taxes for Financial Institutions if they make investments that dovetail with the Executive Branch's interests.
Yes, Tim Geithner over sees the passing out of Tax Credits to Financial Institutions and Non-Profits called CDEs or CDFIs.

The New Market Tax Credits are kind of the secret sauce of Washington DC and the Banking Industry. An entire Industry of Lawyers, special departments in Banks and Investment Houses, and non-profits that often funnel the Tax Credits to Banks.

Perhaps you've seen these urls at the end of commercials for Banks - these are advertisements for the New Market Tax Credit operations for Goldman and BofA on CNBC....
http://www.goldmansachs.com/progress
www.bankofamerica.com/opportunity

[mesyn191]

Re: Krugman's take on Age of Greed

Of Course CRA was part of the Problem and still is. CRA spawned a great network of CDFIs and other Non-profits that specialize in moving Tax Payer supplied Funds and Tax Credits for Banks.

Quit copy/pasting talking points/trash from freep and do some of your own thinking and research.

The CRA was was about ending or reducing redlining which was a racist policy the banks and other institutions used to deny loans and even healthcare to minorities, it did not force the banks to give out shitty loans that people couldn't pay for. The banks did that because they no longer had to worry about risk which they could shift off of themselves and onto MBS and CDO buyers while skiming profits off the top. The government bears some of the blame because they let themselves be bought to change the rules in favor of the banks or to have regulators look the other way while the banks made these toxic debt instruments. This has nothing to do with democrats or poor white/black/mexicans. This is all about the rich at the top using their money and influence to fuck you, me, and everyone else just for more money and power, which is what the FIRE economy is all about.

[Raz]

Re: Krugman's take on Age of Greed

No, Democrats are clearly at fault as much as Republicans, and the author says as much:

I've read the article twice - I suppose I missed the part where Krugman blamed the Democratic Party for anything. But to be fair I've read many times where Krugman blames Democrats for not spending enough.

"...Nixon and Ford—like today’s Republicans—blamed the economy’s troubles not on the true culprits but on big government. Madrick stresses a key point that is often forgotten or misunderstood to this day: the surging inflation of the 1970s had its roots not in some general problem of “big government” but in largely temporary events—the oil price shock and disappointing crop yields—whose effects were magnified throughout the economy by wage-price indexation. Yet constant policy shifts by the Treasury and the Federal Reserve (remember wage-price controls?) under Nixon, Ford, and Carter, Madrick argues, made the American public lose faith in government effectiveness, creating within it a ready acceptance of the antigovernment messages of Milton Friedman and Ronald Reagan.

While we believe that there were deeper reasons for Reagan’s rise, Madrick is right that the economic malaise of the 1970s gave Reagan his big opening. As Madrick describes, Reagan’s enormous capacity for doublethink and convenient untruths enabled him, the front man for business interests, to convince a credulous public that “government had become the principal obstacle to their personal fulfillment.” In possibly the best chapter of the book, Madrick recounts the irony of how Reagan, the great moralizer, made unchecked greed and runaway individualism not only acceptable, but lauded, in the American psyche."

"...True, most Democrats are now in favor of stronger financial regulation—although not as strongly as is required by the continuing manipulations by large financial institutions. But today’s Republicans remain firmly attached to greedism. In their view, it’s still government that’s the problem. ...Republicans are currently hard at work undermining the Obama administration’s consumer protections that would largely prevent a replay of rapacious subprime lending."

Krugman is a liar, a demagogue and a Keynesian Clown. I give him equal credibility with Art Laffer.

[Raz]

Re: Krugman's take on Age of Greed

You didn't read what he posted at all did you? I mean it even says:

"Fifth, even if this story had any validity, both parties promoted an “ownership society,” so blaming Democrats alone is about politics, not reality."


What the heck are you talking about? SS and Medicare? Medicare is getting cut and SS looks to be next, Obama who is a Democrat BTW on record saying he loves Regan, plans on shaving $1 Trillion off of these and other programs all together. And these are programs people pay into and have for decades and which were supposedly fixed to adjust for longer life spans and baby boomers by raising the FICA tax back in the 80's.

Blaming Democrats alone?

I've never been able to have a real conversation with anyone who denies the obvious.







http://online.wsj.com/article/SB1000...172498352.html

[mesyn191]

Re: Krugman's take on Age of Greed

You forgot to mention they could raise taxes on the super rich, particularly capital gains and FICA, and SS/Medicare/Medicaid would all be paid off probably until the end of the century. Your chart is quite explicit that it assumes current tax levels.

Blaming Democrats alone?

You spend nearly all your time on the boards complaining about Democrat this, socialization that, bla bla entitlements and very little to no time complaining about how the Repub's claim to be the party of financial responsibility but then keep blowing up spending on the military, favor super rich corps with sweet heart no bid contracts, and deregulate industries which seem to have corruption scandals (ie. Enron, banking) like clockwork a few years later. In short if you come off sounding like a typical conservative regardless of whatever you consider yourself to be.

[Starving Steve]

Re: Krugman's take on Age of Greed

By 2050, four happenings would work IN FAVOUR of solving America's deficit problem, i.e. to close the deficit and maybe even create a surplus--- to the dismay of those present-day economists: Alan Greenspan and his Putz from Princeton, Bernanke.

1,) America will be a nation of young immigrants, once again as in the early 20th Century, and these immigrants would be paying taxes and not drawing benefits from government;

2.) America's baby-boomers born in the years 1946-1964 will be mostly pushing-up flowers, and no longer be collecting Social Security, Medicare, and other retirement benefits from government;

3.) Other nations would be the world's policemen, no longer America, so America's defence-spending would decrease toward zero;

4.) America would have a federal sales tax, maybe a GST like in Canada now, and this would increase revenues to Washington.

[mesyn191]

Re: Krugman's take on Age of Greed

Point 2 I'd agree with. Point 1 I dunno about, immigration keeps changing so much, as near as I can tell there are less people coming to the US these last few years. They also tend to be the uneducated and unskilled laborers instead of the educated professionals we got lots of post WW2 up til' maybe 03' or so. Point 3 may or may not happen, our country would have to probably just about totally go bust if congress/president to let the military spending drop enough to force a policy change. Point 4 is outright terrible idea. A regressive tax on goods will overly hurt the middle class and poor. Just raise the damn capital gains tax and add higher tax brackets above $120K or whatever it is for FICA and maybe do means testing too.

[Starving Steve]

Re: Krugman's take on Age of Greed

Point 2 I'd agree with. Point 1 I dunno about, immigration keeps changing so much, as near as I can tell there are less people coming to the US these last few years. They also tend to be the uneducated and unskilled laborers instead of the educated professionals we got lots of post WW2 up til' maybe 03' or so. Point 3 may or may not happen, our country would have to probably just about totally go bust if congress/president to let the military spending drop enough to force a policy change. Point 4 is outright terrible idea. A regressive tax on goods will overly hurt the middle class and poor. Just raise the damn capital gains tax and add higher tax brackets above $120K or whatever it is for FICA and maybe do means testing too.

Please understand that I hate sales taxes just as much as you apparently do. Yes, sales taxes would strangle the economy. But I hate deficit-spending and inflation even more.

Before the money was spent (and funneled into private pockets ) in our own time and in our parents' time, economists (and not just conservative economists) should have taken seriously the question of how the spending was to be paid for? It ended-up that inflation and de-valuation would pay for the deficit-spending, and most of an entire generation of our children will be impoverished and sacraficed because of the deficits and deficit-spending of their parents... One might ask, how "liberal" and how "socialist" and how "progressive" was that? Who benefited by deficit-spending? Whose pockets did the money from deficit-spending go into? What does liberalism really stand-for to-day? And what should liberalism stand for to-morrow? What are we learning now, in the depths of the Great Recession, about Keynsian economics?

[BK]

Re: Krugman's take on Age of Greed - please be civil and debate with facts.

Please keep your comments civil -
Can you please Document that any of the information I provided was wrong - BTW- the Research is all mine.

The Key Players in the Community Redevelopment Act are call CDFIs or Community Development Financial Institutes - one advantage the are granted is called "New Market Tax Credits" - these Tax Credits are passed on to the Banks that provide the Capital - the banks get approximately a 40% of their investment in Tax Credits - plus a stream of revenue to pay back the loan.

Lets look at a major CDFI - call Local Initiatiive Services Corp - www.lisc.org - CitiBank was a major supporter of this CDFI and Chairman of the Board for LISC is Robert Rubin - Former member of the Clinton Administration - lets remember he was the CEO of CitiBank during the Housing Boom.
What benefits did Citi Bank get from LISC.ORG during the Boom - TAX CREDITS - Tax Credits that CitiBank received from making Investments through LISC.ORG Reduced CitiBanks Corporate Taxes.

The Best part - LISC CEO - Michael Rubinger - Pay package for 2009 according the IRS 990 was approximately $440,000 - LISC is a Firm that gets its Funds from Government sponsored acitivities -

I'd love to see a list of CDFIs that support Republican Candidates - I haven't been able to locate one - I'm sure there is likely to be a few, because Republicans like to give away Tax Payers Money almost as much as Democrats.

[dcarrigg]

Re: Krugman's take on Age of Greed

I've read the article twice - I suppose I missed the part where Krugman blamed the Democratic Party for anything. But to be fair I've read many times where Krugman blames Democrats for not spending enough.

"...Nixon and Ford—like today’s Republicans—blamed the economy’s troubles not on the true culprits but on big government. Madrick stresses a key point that is often forgotten or misunderstood to this day: the surging inflation of the 1970s had its roots not in some general problem of “big government” but in largely temporary events—the oil price shock and disappointing crop yields—whose effects were magnified throughout the economy by wage-price indexation. Yet constant policy shifts by the Treasury and the Federal Reserve (remember wage-price controls?) under Nixon, Ford, and Carter, Madrick argues, made the American public lose faith in government effectiveness, creating within it a ready acceptance of the antigovernment messages of Milton Friedman and Ronald Reagan.

While we believe that there were deeper reasons for Reagan’s rise, Madrick is right that the economic malaise of the 1970s gave Reagan his big opening. As Madrick describes, Reagan’s enormous capacity for doublethink and convenient untruths enabled him, the front man for business interests, to convince a credulous public that “government had become the principal obstacle to their personal fulfillment.” In possibly the best chapter of the book, Madrick recounts the irony of how Reagan, the great moralizer, made unchecked greed and runaway individualism not only acceptable, but lauded, in the American psyche."

"...True, most Democrats are now in favor of stronger financial regulation—although not as strongly as is required by the continuing manipulations by large financial institutions. But today’s Republicans remain firmly attached to greedism. In their view, it’s still government that’s the problem. ...Republicans are currently hard at work undermining the Obama administration’s consumer protections that would largely prevent a replay of rapacious subprime lending."

Krugman is a liar, a demagogue and a Keynesian Clown. I give him equal credibility with Art Laffer.

Bi-partisan; bi-winning



Republican imagination:



Reality:



Democratic imagination:



Reality:

[BK]

Re: Krugman's take on Age of Greed

MasterShake,

We could put CRA to rest if you can provide one other piece of research from a Research Organization that may be a wee bit more to the right- even a few degrees than www.cepr.net

I would not describe the funders of CEPR.NET as Fiscal Conservatives - would you?
"
CEPR Funders..................

The Center for Economic and Policy Research is proud of the support that we receive. Approximately 80% of our funding comes from grants made by foundations. We are also supported by an ever-growing number of individuals who have made personal donations to our work. To join our ranks of individuals donors, click on Donate Now.

CEPR does not receive any funding from corporations, unions, or foreign governments.
CEPR Funders are below - many of these organizations all so support CDFI organizations and other beneficiaries of CRA....Please let me know if you want me to document their relationships.
CEPR Foundation support in 2010 includes:

Annie E. Casey Foundation
Arca Foundation
Atlantic Philanthropies
Ford Foundation
National Academy of Social Insurance (NASI)
Open Society Institute
Public Welfare Foundation
Rockefeller Brothers Fund
Rockefeller Family Fund
Streisand Foundation

[flintlock]

Re: Krugman's take on Age of Greed

After being invited to eat dinner in a restaurant in Los Gatos, California a few days ago, and seeing the wealth there and money flow across the tables in Los Gatos--- one of the richest of the suburbs of Silicon Valley--- one would never believe that there is a Great Recession now in the world. The ultra-rich live in their own little world, with never-ending parties, get-togethers, re-unions, banquets, vacations and celebrations--- totally oblivious to the suffering of the common people around them, and totally oblivious to what is happening now in the world.... I was shocked!

Greed? one might ask. They might reply, "What greed? What are you talking about?"

I actually have to agree somewhat with you on this Steve. I see it every day in the course of my business. No recession going on in some circles, no sir. As far as a lack of concern by the rich, I can't speak for that.

[flintlock]

Re: Krugman's take on Age of Greed

SS and Medicare are not welfare.

[flintlock]

Re: Krugman's take on Age of Greed

Just raise the damn capital gains tax

Agreed. Also, there are probably enough deductions that could be eliminated to make raising the rates unnecessary.

The truly rich find ways around most of these taxes anyway. So this idea we all just tax the "super-rich" more is kind of silly. Shut down the loopholes first or its just political pandering.

[flintlock]

Re: Krugman's take on Age of Greed

A response to Will's article.

http://www.cepr.net/index.php/blogs/...conomic-crisis

Seriously, can't we put this clearly false meme to rest (that the CRA was in any way responsible for the crash)?

Yeah, I called BS on that the first day it it the press. It may have had some influence on events, but blaming the CRA is like blaming your neighbors water hose being left on for your flooded house after Katrina. Most of the foreclosed homes in my area are the McMansions, not the starter homes. I'm sure that varies from town to town. And the gubment didn't make rating agencies lie about the quality of these mortgages so they could resell them for more than they were worth. They came up with that one all on their own.

This CRA thing is taken for gospel in many Republican circles. I'm right leaning, but even I can see through this. Blaming the lefty programs helps deflect attention from the massive bankster corruption and irresponsible oversight. I doubt much arm twisting was necessary to make these horrible loans happen. Not when Uncle Sam was whispering in their ear, " Don't worry, I'm good for it, and we'll all get rich in the process".