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• Awesome.

  Of course, the right-wingers are already attacking this. Glenn Beck was smearing Soros and everyone else involved with this, and had his favorite “economist”, WSJ’s Stephen Moore on, to fail to explain what it’s about.

  Posted by Zach P | October 28th, 2009 at 2:18 pm

• I am a long time progressive activist most recently weighing in on single payer as one of 17 Aetna sit-in arrestees and an organizer of the Newark Horizon sit-in with seven arrests.

  On the issue of financial regulation I have been very concerned that too little was being done and thrilled to hear Robert Johnson on Democracy Now this morning. I was Community Reinvestment Organizer for New Jersey Citizen Action among my long carer in eduaction, government and nonprofit research and activiism.

  Would like to participate anyway I can in addressing the re-inflation of the bubble and the failure of Democrats to reform this country because of their addiction to campaign cash from those they bailout or “regulate”.

  Posted by Mary Ellen Marino | November 2nd, 2009 at 9:56 am

• Every one seems to want to stimulate the economy. I think
  the economy is too stimulated already. Countries are enormously productive, maybe 20 times or more so than 200
  years ago. There is no reason why we can not go to a 6 hour
  day or a four day week. That much work would provide us
  with all the necessities and all the comforts we need, and most
  of the luxuries. I suspect it would even provide us with
  gambling casinos, mansions, monuments, and even million
  dollar bonuses to parasites and nobles. If some of the last did have to be
  cut back on, I would not be distressed.
  A mandatory 6 hour day or 4 day week with time and a
  half for overtime in corporations would solve the
  unemployment problem over night. With the extra time people
  could enjoy themselves. There is no divine law of the Universe
  that says we must work exactly 8 hours, not a second more or
  less, each day. The important matter is for everyone making
  money, no one destitute.
  If there was not enough production that way to make
  gambling casinos, no problem. People could gamble by card
  games in their own homes if they wished. Of course it would be
  necessary to HAVE their own homes for that. Foreclosure
  could be prevented by the government paying the full
  amount immediately (thus bank liquidity solved) provided the
  owner agreed to pay back by an agreement to pay 20% or so,
  or whatever was enough, additional income tax, which would
  include principle amortization, 6% or so interest, and cost of
  life insurance to cover the remaining principle. That would
  eliminate most foreclosures. It would also eliminate loss
  with citizens having a whole life time to pay back if necessary.
  Sincerely, Charles Weber

  Posted by Charles Weber | March 15th, 2010 at 11:49 am

• The great irony, in my opinion, is that the theoretical work required to understand the origins of the boom-to-bust nature of economies was accomplished long ago. Economics discared much of what their predecessors had already elaborated in favor of a neo-classical construct that never explained what occurs in the real world. Price does not, in fact, clear all market.

  As a market analyst and business manager at Fannie Mae for 20 years, I came to recognize the disconnect between what most economists (there were and are some exceptions) were saying and what was occurring in the property and credit markets. So, I began developing my own independent research — with input and direction from several economists I came to respect greatly and who saw the financial meltdown coming nearly a decade before the sub-prime mortgage and derivatives debacle brought down the house of cards.

  I retired from Fannie Mae in 2005 and began preparing regular updates on the economy, distributed to many of my former colleagues in the community development banking sector. At the same time, I urged that the most important regulatory reform that should be pursued is to prohibit those financial institutions that accept government-insured deposits from making loans for the purchase or refinancing of land.

  Almost everyone interviewed in the media or providing testimony before Congressional committees talks about the “housing” bubble, which shifts the focus away from that portion of property markets — land markets — that are inherently dysfunctional and subject to intense speculation (particularly when fueled by the kind of low interest and minimally underwritten credit that describes the 4-5 years prior to the 2007 meltdown. We are also now seeing the consequences of imprudent underwriting by banks for loans made on income-producing properties.

  My own modest attempts to warn senior officers at my former company went unheeded; their concerns were focused elsewhere on the restatement of financials. Yet, each year as property (i.e., land) prices skyrocketed, we in the secondary market merely acquiesced by raising our maximum loan limits (even though housing incomes and savings were not keeping pace). To keep loan volumes growing (and the opnions of stock analysts positive) the tradeoffs were to reduce down payment requirements and accept higher levels of household debt by borrowers. The private mortgage insurance firms went along for the most part and have borne the top losses as more and more conventional mortgagors have defaulted and lost their homes to foreclosure.

  All of this was, in my view, clearly visible. Appraisal reports revealed that each year the percentage of mortgage financing going to the purchase of land was increasing as a percentage of the total provided. In markets such as San Francisco, New York, Boston, Washington DC, and other high cost regions, the average land-to-total value ratios were often greater than 50% and (in the second home markets) sometimes at high as 75-80%.

  Until our public policies focus on the stabilization of land prices at levels that allow for the affordable use of land for both residential and business uses, we will forever be prone to property market crashes every 18-20 years. Up to this point, virtually every measure adopted as public policy has only exacerbated the problem and exposed our economic system to structure collapse.

  Posted by Edward J. Dodson | March 26th, 2010 at 8:28 pm

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