Thursday, October 23, 2008

Financial Crisis in a Nutshell


Folks, this is a hilarious (and ridiculously true) "primer" on the subprime/financial crisis that we now find ourselves in. Please watch this powerpoint presentation, depicting the crisis as acted out by stickfigure people.

9 comments:

Anonymous said...

DON is truly my hero!

Don said...

There is a lot of truth in this post, but even Coca has to admit there is a role for the Federal Reserve and Barney Frank in any discussion of this topic.

kath said...

Predatory lending obviously played a role in this mess. But, I know this would never fly in an election year, what about the individual borrower's responsibilities? Why do we have to bail them out? Aren't these people adults? Haven't they learned that if something sounds too good to be true, it probably is? How did they not recognize the ballooning interest rates on their payments after 3, 5 however many years? I'm far from a financial genius but knew what I could and could not afford when buying my house. It really pisses me off...I recognize that the problem is too big now to do nothing.

And McCain's proposal to buy up those foreclosed upon mortgages sounds like a terrible idea.

Don said...

If Kath is upset now that she has to give money to people who don't deserve it .......

.... just wait until January.

I am confident the Obama administration can distribute Kath's wealth better than she can.

kath said...

I was going to be so surprised if I didn't get some kind of comment in that direction about socialism taking over the country, etc.

I think the specifics of the sub-prime issue are intrinsically different that general tax plans. One of the beautiful aspects of this country is that everyone is offered the opportunity to become a success. It is up to the individual to make something of themselves but everyone has the opportunity with our public services, including foodstamps, schools, etc. Inherent to this opportunity is health care. I believe these are things all Americans deserve.

Going a step further, (nearly) everyone has the opportunity to earn a living. But it should be up to the individual to responsibly be in a position to buy a house. I don't believe everyone is entitled to homeownership and that is where I do blame the individuals who bit off more than they could chew and showed know financial restraint. Those people don't deserve my money for their stupidity, greed, naivete, etc

My ideal tax plan would be a flat tax where there were no loopholes for me, corporations, noone. Short of that, I know I can afford to pay more in taxes (and we do get our fair share of deductions). But I think it is worth it for the good of the people of our country. Yes, some people will take advantage. And I don't doubt there is significant waste. But the solution is to clean up the system, no abolish taxes altogether.

Don said...

If you want a flat tax, then you are definitely backing the wrong guy for President. Obama's tax policies are the exact opposite of a flat tax. All this talk of individual responsibility and flat taxes for all... Kath, the more you talk, the more you sound like a right-winger. Better watch out around here.....

Cocameister said...

Kath,

I have to agree with Don's last comment there.

You make valid points, and, thus, yes, McCain's tax policy is more in line with your thinking than Obama's.

kath said...

In an ideal world, I would favor flat tax. This would never fly b/c of the tax sheltering opportunities there are all around. But, as I said, I am committed to the well-being of the country and gladly make my contribution through paying taxes. I don't believe that trickle-down economics works...the income gap has been steadily increasing, remember? The rich are definitely getting richer and the poor are definitely getting poorer. I wouldn't favor a tax that would basically make all people have the same income (ie communism) b/c I recognize that competition is essential to our country's growth.

The opportunities for success must be provided for all citizens and that's where my taxes come in. But I don't think we have to guarantee homeownership to everyone...they have to earn it! Basic needs such as education, healthcare, food, shelter should be provided by the gov't to give everyone the same opportunity.

And let's be honest, I suspect many of us are more fiscally conservative than we might want to admit. Am I really the only one in our group who feels this way? But on practical issues and moral issues (ie well being of the country's people), I am a proud, strong liberal.

Side bar: has anyone else found McCain's socialist accusations against Obama ironic in the face a $700 billion financial bailout? Did you see him on MTP this past week?

Cocameister said...

Kath,

I absolutely agree with everything you said.

A flat tax may be most "fair" but we know that it doesn't work that well and would leave too many in the lurch. Not everybody needs to be a homeowner- renting should be fine for many people.

Sure, we want to be fiscally conservative for ourselves, but fiscally liberal for the everyone else. It's a constant inner struggle that we have to try to overcome. I actually think our country does a good job of balancing wealth redistribution with incentives for work and higher earnings.

Yes, McCain is a sell-out on that issue.