Re: UNCIVIL UNIONS

On Thu, Mar 10, 2011 at 4:58 AM, Karl Swenson <[email protected]> wrote:
> **I dunno.  I think some people deserve the misery they got when they took
> on loans they knew they could not afford.

And the banks deserved some misery for taking on loans they knew had a
high risk of default.

I don't mean that one side got punished more than they should have
been.  I mean that the other side was barely punished at all, when
traditionally/historically/ethically they would have also been
financially "punished" for each loan they originated that defaulted.
Instead they collected record high compensation.  Their "risk
management" strategy was to internalize and privatize the profits and
externalize and socialize the risks (aka arbitrage).  Financial and
legal imbalances like this completely subvert the "invisible hand"
that allows a free market to function and generate wealth for
everyone.

> **I am buying a house (final walkthrough is Friday) and I went over my
> budget with a fine tooth comb before I submitted the offer.

Congrats.  :-)  If your signature isn't already a fast and easy one,
by the end of closing day it will be.  ;-)

> **the indirect contribution of buying stuff is not the same as actually
> using your money with the intent of creating a business and hiring people,
> that's all.

My money doesn't know anything about my intent when it's circulating
through the market.

> **I think any business owner who had a family income of 18k would be pressed
> to start a business.

Yes.  But if your other options (as you understand them) are just as
bad or worse, you are hard pressed no matter what.

> **of course, that might mean his employees make more than he does?  Would
> you stay in business?

I wouldn't, because I have confidence I could quickly land a job at a
far far higher salary for which I'm qualified and which I would enjoy.

My father-in-law is in a situation similar to the mechanic
hypothetical I posited, where the business used to do well but now
just barely subsists.  I don't know whether he's making less than the
poverty line, but I think he's making less than he's paying his
remaining employee.  I wouldn't classify him as "poor" anyway, both
because my mother-in-law works, and because of their accumulated
assets (the business owns the property it's on and the equipment, and
they own their house free and clear).  At any rate, he's been
self-employed for so long that he doesn't want to sell his business
and work for another mechanic, even though it would be more profitable
at this point.

-- 
Nick

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