ANYWAY, Nancy Pfotenhauer's recent comments disappoint me. The comments attributed to her about the difference between the “Real Virginia” and it's assumed counterpart “Unreal Virginia” commutes a death sentence upon the Republicans who reside in NOVA. Just because they are no longer in the majority disregards the impact of their votes since they live in NOVA? I believe John McCain could be a very effective president and Virginia could be a swing state that falls in his favor. Why alienate a quarter of it with a flippant remark? There are voters of the Republican Party who are being ticked off by resorting to such geographic divisions to develop a “who's with us and against us” mentality. Will this further strengthen the GOP resolve or scare independent voters into the arms of the Democrats? I'm weighing for the latter the way the media. good or bad, is portraying this.

-Barring a major f-up, voting Obama, but also thinks McCain could be a darn good President,

Apparently, Jesus_Hitler

http://www.youtube.com/watch?v=eW9viaJatpo

By the way, I only suggested bankruptcy judges as the ones who could renegotiate principle as well as interest because there is a strong disincentive to declare bankruptcy. If we're going to help out everyone whose home values have declined, even the ones who are perfectly solvent, then I'll be happy to get in line too.

It's sufficient to say here that related to this (also in Bootle's book but also in many others, too) that one thing triggering the Great Depression was trade wars that were sparked by protectionism here in the USA after the stock crash. Protectionism and trade wars and contraction of trade will only make any world-wide economic slump worse.

Odds are it was a strong _political_ case. In any event, the orthodox approach to pre-emptive war against deflation (consider it a worse threat than just a slump) is classically Keynesian (I don't like it, but on its face it's logical enough), which not only involves spending increases but also tax reductions. It's a two-pronged kind of stimulative approach, in other words, financed by borrowing. (Tax increases are not stimulative; they are the reverse, as are spending reductions in theory.) Note that all the “stimulative” spending by the Japanese didn't reverse the deflation, any more than spending and other grand programs in the USA did; the New Deal never cured the Great Depression — World War II did. (Note that World War II in the USA featured inflation as well as increased deprivation of the population at home as well as abroad. Of course things were set to jump back to liveliness when the war ended.)

No, it does not follow that to cure our current slump threat we need a nice stout war against Iran.

Brace yourself, Green Dreams.

For not only has the Economist come out in support of bailouts. (One letter writer this week said the only thing left to do is to change its name to “The Communist.”)

But when you talk about a floor, do you recall the Oil Patch bust several years ago? Donald Hodel wrote a book about it, and wrote about what he saw as a solution to the problems of low oil prices at the time:

************** federal subsidies to support minimum oil prices ******************

************** oil industry subsidies *****************************

Sweet Green Dreams!

Now,

You are right, Stockster. Not that the banks _should_ renegotiate in the sense that they are _obliged_ to do so; obviously, they are not, and forcing them to do this is tyrannical. But if they voluntarily do so, if they _choose_ to do so, it is their right, and why would they do this? They're trading off the partial loss of principal and interest with a renegotiated loan against larger losses from foreclosure (or bankruptcy of the debtor, default on the loan) and the costs to resell the homes (as well as often, in the real world, to repair the damage and remodel many of these homes).

It remains to be seen how much interest the lenders will express in the HUD program.

* We all know that fixed-rate payments are like defined-benefit pensions or annuities, namely, that they are predictable as well as consistent. Yes, we bemoan the demise of defined benefit pensions (although we have a substitute for this in the form of Social Security) even though they are obsolete in the business world.

Extra-constitutional, judicially arrogant, low-life theft if not compensating the lenders, obvious, blatant moral hazard and defect. How can anyone want, or advocate, this?

There _is_ a revision program being offered through HUD (it should be private or state-run, not federal), but at least it is a _voluntary_ program, not incorporating theft by the courts and judges.

The only recourse to a judge should be if debtors file for bankruptcy, and often if this is done, the home should be forefeited or the owner converted to a renter.

These are regional and state and metro-area problems, and if these places were grown up (and faithful to federalism), they'd take the initiative and even be jealous of maintaining control rather than ceding any to Washington over these issues. But you see the opposite, including California leading states rushing now to Washington for bailouts and handouts, aping self-destructive New York City's behavior decades ago. (Will we ever learn? No, it seems. Or the lesson “learned” from the welfare state and entitlement mentality isn't the lesson we should learn.)

I give McCain credit for trying to come up with a new approach, but his plan is impractical. These people need relief NOW. If McCain's plan were passed today, to set-up a new agency, train the staff and start buying the mortgages then renegotiate. That would take at least a year to have any effect and how many of those people will have lost their homes and how much more damage will have happened to our economy as a result of waiting?

Banks should renegotiate these mortgages because they already know the customers and this will allow the hard-hit financial services industry to keep more people employed (to renegotiate these mortgages) instead of laying off people…

Dave, another very real way of looking at this is that the assets owned by struggling mortgage holders will have to be repossessed. The banks incur substantial costs in the process, forgo mortgage payments until they can sell the properties, and there is no chance currently that they will sell these assets to someone else for the value of their current mortgages. Repossession and resale doesn't make sense for either the current owner or the bank.

As Obama suggested, we should let bankruptcy judges reassess the realistic values of these properties, and offer the current mortgage holder the same kind of deal that the bank will need to offer to a new purchaser. This helps keep families in their homes, and the net effect on banks will not even be a negative, unless people who are not in trouble decide to declare bankruptcy anyway. Considering the many disruptions of personal bankruptcy, I don't see that happening on a large scale. Would you declare bankruptcy to get a reduction of your mortgage? I do agree that the concept of trying to support the inflated value of some properties is foolish and futile.

Given that the GOP's philosophy, plans and policies have wreaked havoc on our economy, an economic stimulus in the form of government spending, while anathema to libertarians, may be what is required. Even though we may want to strive toward some libertarian and true conservative goals of smaller government and less taxes, we need to address the economic crisis with the structure we have right now.

To continue to do what Bush has done the past eight years would only lead us into a depression…. And then we might welcome China coming to our rescue by forgiving some or all of the trillions of dollars in debt they will be holding….

http://www.nytimes.com/2008/10/17/opinion/17kru…

“If John McCain is elected president, you will see a significant reduction in the growth rate of federal spending, and that number will be significantly lower. You’ll also see an increase in federal revenues coming in, which will come because of growth, not because of an increase in taxes…”

This is exactly what Bush said eight years ago and which many leading economists scoffed at. Bush's policies did not encourage job growth, economic growth and only more than doubled the size of the federal deficit. We have had eight years to figure out that BUSH'S POLICIES DO NOT WORK, as predicted by many economists eight years ago.

Further, Bush pushed through his plan when we were actually running budget surpluses. If McCain takes office then we're lokoing at about $500 bn to $750 bn (or over $1 trillion since McCain's mortage plan adds $300 bn right there) to the national debt in one year…. During the debate McCain was given several chances to detail what he would cut from his proposals, but he offered no answer.

It's really unf***ing believable that we are now headed into a deep recession and McCain is planning on doing the same thing that Bush did to get us out of a shallow recession… and it didn't work well for Bush and in fact the Dow is 1,500 point less than it was when Bush took office eight years ago. Under Clinton the Dow increased from roughly 3,400 to 10,500 when he left office… And Bush's policies have only created roughly 1/5 the number of jobs that Clinton's did. And the ultimate number will be lower since the economy is shedding jobs….

If McCain believes that his philosophy of lower taxes will spur economic growth and so we can lower taxes now (hoping that economic growth will pick up sometime in the future) he can live in his fantasy world, just don't let him be president. This philosophy hasn't worked for the past eight years and in fact has proved to be a disaster.

The floor is the citizen's ability to pay their bills…whatever mortgage or market they choose to buy in.

Solution:
1. Become a more self-sufficient nation and expand our product diversity to cover all the major fields of goods that we currently import way too many of. Why do we need to only buy precision-sharpened german steel for instance? Why not find a way to produce that at home?

2. Tax the hell out of american companies who outsource jobs and impose huge import tariffs on those that do. Find a way to pat industries on the back who choose to stay stateside. Make it worth their while. One way is…

3. Universal health care that relieves the burden of providing for workers or the unbelievably high premiums with workman's comp, (the medical cost end). Workers will make more (and infinitely cheaper) preventative trips to the doctor and will not have the stress of health care hanging over their heads every day like walking under a piano held up by dental floss everywhere you go. (that is how I've heard that anxiety described)

With jobs at home, people employed, goods exported instead of imported, the GNP goes up. More prosperity will handle home prices.

Oh and

4. Eliminate lobbying. Democracy is the Will of the majority. Lobbying is therefore Unconstitutional because it promotes the Will of the minority over the People's interests. If that lesson hasn't hit home, it never will.

The problem isn't that 15,000 sq. ft. houses all over the country that were selling for $2 million have seen their prices fall. The problem is that 1,500 sq. ft. houses in California that were selling for $2 million have seen their prices fall.

It seems to me that the very regionalized nature of the problem requires that it be addressed by the states rather than the federal government. Further, prudent policy would be trying to find and support the floor rather than trying to maintain the height of the ceiling.