The Tax Man Cometh….

04 Feb
"Screw ups"

"Screw ups"

If this isn’t the most compelling advertisement for the Flat Tax…I mean, really.  If highly educated, Washington insiders, that can afford the most prolific accountants known to man can’t figure it out, how does the common man?

Perhaps it’s not a matter of understanding, but evasion.  Wouldn’t a guy who’s the “foremost expert” on financial markets, understand the tax code?  Particularly if he’s vying to be Secretary of the Treasury? Geitner was lucky to be confirmed.  Had it gone one week longer, he would not have been. 

And, just how much do you have to make to OWE $128,000 in taxes?  Nannies, maids, drivers, millions….and these are Democrats?  As Leona Helmsey famously said,

“We don’t pay taxes.  Only the little people pay taxes.”

Oversights and misunderstandings, ignorance and avoidance…but, you, my fellow Americans should forgive such slight and irrelevant faux pas because they’re just so damn smart.  To quote our President:



For once, the IRS are heroes….

   Taxman, The Beatles


Posted by on February 4, 2009 in Calling Bullsh*t, Obama, the beatles


Tags: , , ,

55 responses to “The Tax Man Cometh….

  1. djcnor

    February 4, 2009 at 8:37 am

    No, he’d be aware of the grey areas. Any tax advisor will tell you to take every deduction and credit you think might be valid and let the IRS figure it out. Haven’t you seen the news stories? Every year some reporter calls the IRS repeatedly asking the same tax question and gets a variety of different answers.

    And the flax tax is nonsense. Countries that work, like the Scandanavian countries, have the opposite.

  2. music maven

    February 4, 2009 at 9:05 am

    Oh, come on…

    If this were Republicans, people would be marching on Washington. Sorry, but not paying taxes on nannies and domestic help is an old story. They should have learned by the example of Zoe Baird and others. When in doubt, err to the conservative. Pay MORE and let the IRS sort it out, not less. Isn’t THAT the patriotic thing to do?

    Sorry, no passes from me. These are not novice folks filling out the “short form”.

    As for Daschle, he is a hypocrite of monumental proportions. Calling himself a “special advisor” to avoid the lobbyist label is extremely transparent and Mr. Obama looks foolish for signing an “order” implementing the “highest ethic standards of any admistration ever” and then not following his own rule. But we need these valuable exceptions, right? Evidently not. Perhaps the tax thing is karma.

    And sorry, we can just agree to disagree as I’m not into a socialist system in any shape or form. Most of the opposition to the Flat Tax has been from bureaucrats and accountants. Both of which are out of a job if the Flat Tax is adopted. If you really want change, CHANGE.

  3. djcnor

    February 4, 2009 at 9:32 am

    If Obama sent his “army” out to examine the Republicans in the House and Senate with the same measure they are using for his staff, there wouldn’t be a single one remaining.

    And yes, we can agree to disagree. But you are aware, aren’t you, that not only does Denamrk have the happiest people in the world, but it was also declared the country with the best climate for business, and they weren’t talking weather. After all, more people have the nerve to innovate and start businesses when they know it won’t jeopardize their healthcare, their kids access to higher ed, their ability to live under a roof and eat and such.

  4. little Deb

    February 4, 2009 at 9:35 am

    Bravo MM. I love it when someone says what I want to and says it so much better.

  5. music maven

    February 4, 2009 at 9:49 am

    djcnor —

    We’re not talking about Republicans, we’re talking about what’s going on right now. The “well, they do it too” defense has to go. Where is the “era of accountability”. At least Obama fell on his sword, albeit not very gracefully, and said “I’m sorry”. However, not sure how many “sorries” we can afford.

    Regarding Denmark —
    At a little over 5 million in population (60% of which are either on public assistance or work for the government), it’s not comparable to a population of over 300 million. Again, no welfare state for me. This country survives and thrives on capitalism. Markets correct when left alone.

  6. djcnor

    February 4, 2009 at 10:52 am

    That’s a flat out lie about Denmark. Show your source if you can.

    Go ahead, demand perfection from your politicians, but you won’t get humans that way, and you won’t get the best person for the job unless you restrict your considerations to what qualities are needed to do the job. What Europe knows that Americans don’t is that politicians are and always will be human and imperfect, and that it is that quality which gives them any ability to empathize with the failings of the humans they work for.

  7. djcnor

    February 4, 2009 at 11:03 am

    And here’s some fresh info on Denmark. Note that other European countries are looking to them as a model. Maybe they know something?

    By the way, those extra government workers, almost entirely accounted for by universal healthcare. Add the workers in the US that work in healthcare to our numbers and what do you get?

  8. Shrewspeaks

    February 4, 2009 at 11:12 am

    Accountability. Look I get everyone makes mistakes…especially on both sides of the isle. But I must say…this administration can’t ask the regular peeps to give more with these mistakes. I get that we can’t have perfect god’s running the government, but if I applied for a job in the private sector that ooooh required me to be ethical and advise on oh…let’s say tax laws. I would have to have a squeaky clean.

    I am not asking for perfection…just that our elected officials held to the same priniciples and rules as we are.

  9. djcnor

    February 4, 2009 at 11:20 am

    What happens when you make a mistake and pay too little on your taxes. It may or may not be caught. If you’re the one who catches it, will you call it to the attention of the IRS or wait and see if they catch it and then pay up? Seems to me like Daschle did a little better than that by calling it to their attention.

    Actually, they can ask that of the people, IF the alternative is to have someone less than the best in that job working for the people.

  10. Shrewspeaks

    February 4, 2009 at 11:39 am

    In the greatest financial crisis, running on a platform of change, yet putting the same types in with the same “mistakes” is not accountable.

    I really want change and have been very hopeful for what I have seen prior to these events…but one right after another has been horrid and does not fill me with HOPE.

  11. music maven

    February 4, 2009 at 12:07 pm

    Admittedly, I’m no expert on Denmark. (check Wikipedia and update the sources if they’re wrong)

    However, there is simply no way to compare infrastructure for 5 million to infrastructure for 300 million. And, sorry, you’re just not going to get me to say that socialized medicine or a government controlled workforce is the cure for what ails.

    Also, I am not an elected official or one appointed to set policy for others. I am not accountable to other people, only to myself. Let’s cut to the chase. These guys are just as greedy, crooked, and uncaring as those they have vilified “on the other side”.

    Daschle only came clean when Geitner was scrutinized. He didn’t do so out of some great moral barometer. Please. Personally, I think that there are likely alot more people out in the health industry that aren’t so biased and in the pocket of certain companies that can do a much better job. How about some people that actually WORK in health care?

    I’m sorry, but this crap infuriates me. I’m not perfect, believe me, but the hypocrisy of these officials HAS to end. Don’t make rules that you don’t/can’t/won’t follow. The “Change” platform is a tall order. Alot of promises were made and this President has been elevated to god-like proportions. He’s had a relative pass from the media and from citizens who just “feel good” about him. Well, now’s the time to walk the walk. This is a TOUGH job.

    If he will truly “put away childish things” and honestly turn the apple cart upside down, people from all corners of the political spectrum will applaud. So far, it smells like status quo.

  12. music maven

    February 4, 2009 at 12:09 pm

    By the way, if I somehow found out that I had not paid enough on my taxes, I definitely would immediately file an amended return….that’s just how I roll.

  13. huckleberryfriend

    February 4, 2009 at 12:10 pm

    But MM – they DID figure it out. The IRS didn’t catch any of them.

    I can understand someone making a mistake on their taxes. I can understand someone wanting to make a lot of money. But these people seemed to have knowingly chosen to act in an unethical manner at the expense of the rest of us and are beyond contempt. I hope bad things happen to them (financially) and they lose every penny they have. I hope their friends turn their backs on them. I hope their colleagues refuse to hire them.

    But it won’t happen.

  14. music maven

    February 4, 2009 at 12:19 pm

    While I’m at it…a point that may be too subtle in the post is that Democrats paint themselves as the “party of the poor, the downtrodden, the underprivaledged” and the Republicans as the rich, fat cats hell bent on taking everything you have.

    Yet, the Clintons, the Daschles, the Obamas, the Dodds, etc., etc., are millionaires who have very limited work histories outside of government jobs. How does that happen if not for kickbacks and pay for play? Perhaps Blago will shed some light on just how “the system” really works.

    I find it incredulous that those who find the speck in the eyes of the “elite”, can’t see for the log in their own eye. I abhor hypocrisy and the last couple of weeks is filled with it.

  15. music maven

    February 4, 2009 at 12:27 pm

    Huck — I get it. The IRS is a hero just because they exist, in this case. I needed a way to get Taxman into the post. 🙂

  16. djcnor

    February 4, 2009 at 12:36 pm

    i take your points, all of them, though I would not come down so hard on Daschle as you would, especially on the tax bit because it has nothing to do with how good he would have done in the job.

    His other activities and close association with those presently in the healthcare industry is more interesting. Especially since doctors are now pushing for a single payer system so they can spend their time doing their jobs. Still, it is generally acknowledge that he was expected by more than Democrats to do a good job and a good job is desperately needed when it comes to the US healthcare system. I’ve worked on the edge of the US healthcare system as a biomedical researcher, and I’ve experienced the UK system, which is among the worst of the universal care systems, supposedly. All I can say is it beats the hell out of the US system.

    as for the bit about never having anything but government jobs. Teachers and policement and soldiers never have anything but government jobs. That should not be used as a pejorative.

  17. music maven

    February 4, 2009 at 12:47 pm

    I’m not an expert on health care either. I only know that I want to be able to chose my doctor and my hospital and I don’t want to have to pay a fortune for prescription drugs.

    Perhaps someone else, *ahem* can chime in on the health care industry. Now, if we want to talk financial crisis and the banking industry, I’m your gal. 😉

    As for Daschle, I’m hard on him because of crap like this. It’s all so fake. Now the guy has a “donated” driver and car and that’s what he used to rail against to get elected? It’s all manipulation. It’s time for the hardworking, tax paying people of America to fight back and DEMAND accountability from those they elect and the ones that those elected appoint.

    This is a raw nerve for me. Obviously.

  18. djcnor

    February 4, 2009 at 12:55 pm

    We do choose our own doctors under universal healthcare by the way, and our hospitals, and as for our prescription drugs, hubby has about 7. He pays about $60 every three months, which would cover all he had, no matter how many or how expensive. And I, because I need thyroxin (they didn’t explain why that made it so), pay nothing at all for mine, however many and however expensive.

    But, yep, someone else should “talk”.

  19. Shrewspeaks

    February 4, 2009 at 12:56 pm

    WOAH…I also work with both systems. Excellent doctors are available to medicare patients in the US. Some (and I don’t say all) some contries cannot say that is true…if you have cancer and want the best go private…if you have heart disease and want the best go private. In the US even medicare patients have the opportunity to have excellent coverage with top notch doctors for the most agressive treatment descisions available. I have seen on the EU side physicians who are out of date and are not pressed to be agressive in treating their patients because the healthcare system does not warrent it. Yet, the families may want it. So please don’t tell me the US system is not as good when the same pricnicple exists in EU…want the best you need to pay.

    May I ask…are you a resident of the US? If not, please do not suppose you can walk a mile in my shoes and I will not do the same of you.

  20. Sally

    February 4, 2009 at 1:00 pm

    Amen Music Maven!! I have been filled with disgust lately as I have watched the hypocrisy unfold within this new administration. “There will be no lobbyists within my administration” except for my deputy sec. of defense who used to lobby for Raytheon. Give me a break.
    As far as the Dems portraying themselves as the party of the poor and downtrodden-give me a break. They have the same nannies and housekeepers that the Repubs do. As for taxes? My hubby and I have an accountant and a tax attorney. Both are under strict instructions that there is to be nothing questionable. After our taxes are prepared we sit down in a meeting with them and go over the return in detail. I don’t enjoy paying my taxes but I want to make sure that we have followed the law to the letter. And by the way, we don’t ever intend to run for elected office or to be appointed to any sort of govt. post! I would think you would be much more careful if you were.
    As for the above discussion on Denmark. No thank you. In my opinion, socialized medicine would be a nightmare of epic proportions. I’m tired of the dissing of free markets and free enterprise. Perfect we are not but we don’t need to throw the baby out with the bath water.
    Sorry for digressing so far off the subject of music so let me just add……Love the Beatles! 🙂

  21. Sally

    February 4, 2009 at 1:04 pm


    I do not consider teaching a government job. At least not a federal government job. My kids go to private school so in our case not even local or state government.

  22. djcnor

    February 4, 2009 at 1:05 pm

    i am an American, with some 50 years of experience of the US system, who moved to the UK 4 years ago, so I have experience of both. My US experience was probably the best of the best, since I was faculty at two major med schools.

    The difference in the healthcare systems is a major consideration in our staying here rather than returning now that Obama is in charge. I’m sorry for the myths Americans have been fed, but universal healthcare really is better and comparative studies show it.

  23. Shrewspeaks

    February 4, 2009 at 1:09 pm

    I am so glad you are happy in your new home and with the new heathcare system. What I have witnessed overseas is not a myth, but my experience. I am glad you have not fallen into the same treating hands that I saw.

  24. Sally

    February 4, 2009 at 1:11 pm

    I am not an expert in healthcare. Far from it. However, I have many friends in Canada (and a couple in UK) who travel to the U.S. for healthcare. The reason they have given is because of the waiting required for the procedure. The story that sticks with me is one whose mother needed bypass surgery in Canada and was scheduled for a month later. In the meantime was basically told to go home and cross her fingers that she wouldn’t have a heart attack. These were white collar executives who immediately headed south to NY to pay out of pocket to have the procedure done. It doesn’t exactly sound ideal to me. I also realize that it may or may not be the norm. I’ve just heard so many complaints from friends as it relates to quality and availability that I absolutely don’t want to go there. In my opinion, there is nothing that government does better than private business. Healthcare included.

  25. djcnor

    February 4, 2009 at 1:28 pm

    The waiting lines are another thing Americans tend to not have all the information about. Yes, when you have a need for some special care, you are put on a list, but the list is constantly revised and reprioritized. You are given the initial estimate of your wait time based on your being at the bottom of the list and not moving up, but it very often shortens, always if you are considered at high risk. We have never had longer waits than in the US.

    You are guaranteed to see your GP within 48 hours. Those who want to jump the line and can afford to do. But that gives folks who can’t afford to jump the line much better access than in the US. And the lack of anxiety over a possible bill makes a huge difference in the stress of a medical problem. Wasn’t there just recently a news story about huge numbers of Americans putting off care and taking less drugs than advised because of costs?

  26. music maven

    February 4, 2009 at 1:32 pm

    Again, I think servicing 5 million vs. 300 million is the issue.

    No doubt, we need some reform but like Sally says government is not the answer. Let private industry figure out a better way. Government, at least in the U.S., has never “fixed” anything. To the contrary.

  27. Shrewspeaks

    February 4, 2009 at 1:33 pm

    Look I understand you feel you have found your solution…don’t suppose one size fits all.

  28. djcnor

    February 4, 2009 at 1:42 pm

    The UK is not 5 million. It’s 61 million. And the WPA spending fixed a whole lot which the US is still benefiting from.

  29. Shrewspeaks

    February 4, 2009 at 1:44 pm

    WPA is not universal healthcare…apples and oranges. I am all for getting people jobs.

  30. djcnor

    February 4, 2009 at 1:47 pm

    yes, but it, like medicare (and there are many other examples) , is an example of a problem in the US solved by government.

  31. Shrewspeaks

    February 4, 2009 at 1:54 pm

    Okay…and all I am asking is that the architects of these programs pass the red face test.

  32. music maven

    February 4, 2009 at 2:01 pm

    I was talking Denmark, not UK. Sorry, missed the jump there.

    The WPA was not a wholesale “fix” and much of it was spending on projects that weren’t a necessity. The Depression persisted until WWII manufacturing kicked in.

    We can debate the history of government intervention until the cows come home, but it’s pretty well substantiated that government does not have a good track record in fixing anything.

  33. djcnor

    February 4, 2009 at 2:30 pm

    If it’s that well substantiated, let’s see a reference from a research study. I think it’s just an often quoted statement from Rush and his ilk, that a lot of folks have swallowed whole.

  34. huckleberryfriend

    February 4, 2009 at 3:03 pm

    I think the problem is that there is no shame any more.

    I’m not saying we need 1950’s morality, but knowing that you will be looked down on if you break the law or violate common decency was a great deterrent.

    If I had done what any of these 3 have done, I would apologize and vow to never take another penny from the government. No pay, no fees, and I would donate my social security to charity. These people are scum.

  35. music maven

    February 4, 2009 at 3:09 pm

    Here you go…

    2004 UCLA Economic Research on the New Deal and Persistence of the Great Depression


    “Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”

    and this gem….

    “The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes,” Cole said. “Ironically, our work shows that the recovery would have been very rapid had the government not intervened.”

  36. djcnor

    February 4, 2009 at 3:12 pm

    And here’s a reference for you which puts the whole debate regarding FDR’s policies and the Depression more in the context of the times and the economic wisdom of the times.

    You’ll note that it concerns the arguments on both sides, not just one.

  37. music maven

    February 4, 2009 at 3:41 pm

    My reference is a study by a traditionally liberal university, so I would assume that this was studied without considering “sides”. Also, the UCLA study was done in 2004 when the economy was still rather good, so no added bias of today’s politics are included.

    I don’t say that FDR was stupid or knowingly tried to hurt the recovery, but facts show that the actions taken DID. Same as with government today. I want smaller, less intrusive government and opportunity to steer my own ship.

    I’ve worked in one of the most sexist, eliteist businesses known to man, and I’ve seen more waste and unfairness in pay than I care to admit. HOWEVER, I do not think that anyone’s pay should be limited by the government. (Obama’s most recent “order”)

    That’s what boards of goverenance and shareholds within a company are for. And if they haven’t been doing their jobs, then shame on them. Let the investors put the pressure on those companies. But once you give the government the power, you seldom get it back AND it seldom works to the favor of the “people”, at large.

    Slippery slopes…

  38. djcnor

    February 4, 2009 at 4:11 pm

    Yes, I’ve seen your reference. And California has changed. Those professors are not liberal. And their view is a distinct minority view of RDR’s policies and the dpression. Here’s a discussion:
    that talks about the use of this reference for conservative purposes. I quote:

    “Lowry also avoids an entire library of work from scholars discussing how the New Deal helped end the Depression and instead focuses only on 2 UCLA professors who published a paper supporting his conclusions.

    His article could gain credibility were he able to explain other viewpoints and how his view is different. Credibility tends to be the weak point in the conservative story, but conservatives have recognized that most people don’t have time to investigate and dig deeper.”

    I’m wondering what your alternative plan for receiving equal pay for your equal work is? me, I wouldn’t be satisfied to accept less. As a scientist, another sexist field when I was active, I wasn’t. If those things you mentioned actually worked, the job would have been done at some time since the feminist movement started. It hasn’t.

  39. Shrewspeaks

    February 4, 2009 at 4:25 pm

    We are far off field. If we are to change…should we not demand the same accountability that Obama speaks of? We are all agents of change.

  40. Sally

    February 4, 2009 at 4:33 pm

    We expect the government to fix something that they broke through failed policy? I speak of the fed and the relaxation of lending requirements in an effort for everyone to be able to afford to own a house. There were loans being made that had no business existing. Even for those who could afford mortgages there were much bigger loans being made than what was prudent. The government along with the banks caused the housing crisis which in turn brought on the financial crisis. Why in the world do I want these clowns to take on a bigger role in business?

  41. djcnor

    February 4, 2009 at 4:35 pm

    Agreed. But we need to set priorities and be aware of manipulations as well. Remember, that blue dress was a tiny little human failing that had nothing to do with how well Clinton did the job of President, yet the American people let the Republicans manipulate it to the point that we exchanged an excellent President for a miserable one, in the process rejecting a noble prize winner with ideas the rest of the world has already adopted (Gore). We must keep our eye out on the major changes we want made, and get the best folks to make those changes, even if they have imperfections.

  42. Shrewspeaks

    February 4, 2009 at 4:46 pm

    and 18 minutes of tape was a judgement of error…

    Hey, if you run on the platform of change and accountability…then be about it. I don’t ever think Clinton ran on fidelity.

  43. djcnor

    February 4, 2009 at 4:46 pm

    First of all, the givernment’s fault in that was lack of oversite of the banks. The banks were the real villains. But we had some corrupt “cops” who were basically paid off by the bankers (Bush’s crowd). No, I wouldn’t trust Bush’s crowd to now provide good oversite, but there is every indication (note the $500,000 limit) that Obama plans to do good oversite. This is a different government than the one that did the breaking. Do we trust ourselves in choosing someone to fix what’s broke or don’t we? I do. At least two years worth as a minimum.

  44. djcnor

    February 4, 2009 at 4:51 pm

    Those 18 minutes had to do with how Nixon was doing the job of President. Clinotn’s failing didn’t. That’s a big big difference.

  45. music maven

    February 4, 2009 at 5:13 pm

    Honey, sorry, we are just not of like mind. I don’t want to relive every Democrat and Republican administration. However, character does matter. If you can cheat on your wife in the most respected house in the world, outright lie on national television about it on television, what else are you capable of? So, his dishonesty only pertains to his libido? I am reminded of something my grandmother used to say, “If you can lie, you can cheat. If you can cheat, you can steal. If you can steal, you can kill.” As I said before, slippery slope.

    I consider myself open-minded to good ideas that solve problems. But this whole post started with a lack of tolerance for double standards and hypocrisy.

    As for equal pay, I’m doing just fine now, thank you very much. By working hard and proving myself, my company pays me what I’m worth and as much or more than my male counterparts. I’d still rather have my fate in the hands of private industry than government. I’ve seen more people screwed by the government than helped.

    I have a deaf sister who never ONCE took disability. Her husband is deaf also. They raised two boys and his kids from a previous marriage. The two boys both worked hard in school and received scholarships to college. My sister became ill in her mid-40’s and applied for disability or some assistance. She was flat out refused.

    My mother was left paralyzed in her left arm from polio as a young child. Again, never took a dime from the government. When my father got sick, she tried to get assistance for medicine and other necessities she needed. She was flat out refused.

    The Veterans’ Administration took THREE years and a mountain of paperwork to FINALLY cover my father’s doctors bills and medication. When my father died, it took my mother another YEAR to get the piddly death benefit he was due. So much for 3 years of Naval Service from 18 – 21.

    And finally, the IRS couldn’t get their thumbs out of their butts long enough to evaluate my father’s case and release liens so that property could be sold to pay them. As consequence, my father lost his business, his home, and all of his property.

    Don’t tell me that government “fixes” things. Too much evidence that it’s just not true. Guess who “fixed” my parents’ problems?

  46. music maven

    February 4, 2009 at 5:33 pm

    Banks are not the villians. Investment houses, maybe, but not banks. Most banks have steadfast lending policies and are still in good shape. They have stopped lending because consumers stopped spending. Because of fear, consumers don’t buy/support business, business can’t sell. Banks won’t lend to business because there are no sales, i.e., cash flow.

    One of the early points of this thread was the fact that Obama is already making exceptions to his own “orders”. How is that strict oversight? Or is that he’ll have strict oversight over Republicans, but Democrats should be allowed to do whatever because they’re so much smarter?

  47. Sally

    February 4, 2009 at 6:49 pm

    For me it comes down to personal integrity, character and personal responsibility. To go even a little farther afield than we already are we are becoming a nation of victims. Every failing is someone else’s fault. I’m sorry but character does count. Particularly in our government officials. Sorry, but I think I can handle my money a lot better than the govt. can.
    At this point I think we need to just acknowledge that we will never ever agree that more gov’t is not and never will be the answer.

  48. djcnor

    February 5, 2009 at 3:00 am

    Music, the news, if you started following during the Bush administration, perhaps during the campaign, made clear that indeed the banks did act entirely outside aceepted practices, handing out loans they knew very well were likely to go bad. Why? Because when they did, they knew they, the banks, would end up owning the homes, and they thought they would make a profit on them reselling to legitimate mortgagees. They last that bet.

    As for your family’s problems with the folks who decide disability and veterans cases, they needed the help of a good social worker in presenting their cases. There is now very good info on the web of how to go about it. Blame Reagan for making such applications much harder to carry through successfully.

    Obama is experiencing much frustration in finding the right person for the job not entirely clean. That it’s the right person is more important right now, in my opinion. For now, when it’s the right person, exceptions should be defended on the basis of that for the good of all so that what needs done can get done.

    All his nominees are much much much cleaner than Bush’s, and that should be good enough for now.

  49. music maven

    February 5, 2009 at 8:38 am

    Now, I will ask you to prove your allegations. Give me where banks (not Mortgage banks, but good old fashioned Retail banks) acted entirely outside accepted practices.

    To say that a bank would try to make Mortgages so that they could purposely re-possess the homes to re-sell for a profit is simply ludicrous. In my 27 years in banking, I’ve worked for banks and consulted for banks when times have been really good and really bad, so I’ve seen some of this before. Therefore, I feel qualified to speak on this.

    Use common sense. The cost to re-possess a house runs in the tens of thousands in legal fees, etc. The houses re-possessed are generally in disrepair because the owners no longer give a crap about keeping it up, so the bank can spend another tens of thousands in repair costs. Then, there’s the carrying costs of utilities, upkeep, etc., that usually run for 4-6 months (longer depending on the market). Add in realtor fees, taxes, etc., etc. and I can promise you the bank loses money on a re-po.

    Some banks lowered standards because Fannie Mae and Freddie Mac, HUD, and the CRA act (all pets of the Democrats, BTW) provided the product and the pressure. However, most banks do not “portfolio” mortgages. That means that roughly 75% of the mortgages made at the bank were sold in the secondary market to a larger provider like Citibank, Chase, Washington Mutual, Countrywide, etc. These mega banks and Mortgage companies are the ones who were “buying” bad paper and making low-value loans. They, in turn, were brokering loans to investors with foggy derivitives that blew up when Florida, California and New York real estate tanked.

    The lesson in the Mortgage crisis is that not everyone can afford a home.

    I’m not going to defend every Republican administration, but suffice it to say that there are MANY Amercians who still ascribe to a more conservative philosophy. We are not evil people, hell-bent on keeping the “little man” down. Hell, many of us are the “little man”.

    With all due respect, please don’t tell me that my family’s problems were our lack of understanding for the right forms. Do you think that these were two week problems? These are things that happened over long periods of time with letters to Congressmen (Democrats if you must know), sitting in waiting rooms for hours, filling out the right forms three and four times, and sitting on hold for hours.

    Obama’s nominees are no cleaner than Bush’s or any others. Get real. He comes from the most prolific political machine in Chicago. You can bet his butt is twitching with Blago on the loose. If they don’t get him paid soon, he’ll either suffer an unfortunate demise or he’s gonna sing like a bird. Make no mistake, Blago is a big liability for Obama. But, I guess it doesn’t matter how dirty the guy is, right?

    Why not hire Bernie Madoff as Secretary of the Treasury? He was able to create a $50 Billion fund and keep it running for decades. I’m sure Social Security would be a snap for him.

  50. Shrewspeaks

    February 5, 2009 at 9:50 am

    Hey…you know what…you have convinced me, djcnor. Do you have an extra room there in the UK? What are the taxes like that you pay? You happy with Brown?

  51. blueberry

    February 5, 2009 at 5:08 pm

    I missed this one yesterday – you guys were busy! Love, love the conversation. Nothing really to add, I share the same anger, frustration and WTF feelings you all have about all this. I do, however, have a wee bit of optimism – as long as everything is not too far down the drain, we the people are at least paying attention and IF this can get fixed, maybe we won’t be asleep at the wheel in the future and “those” who did this won’t be able to cause more damage. Problem I have is little or no trust in what anybody is saying as to what is best for our country now and for our children later, so it is hard to figure out exactly who “those” people are.

  52. djcnor

    February 5, 2009 at 6:05 pm

    Music, if I’d known about your post sitting at home waiting for me, I’d have made a copy of a great article in today’s Herald Tribune that I read out at the local university. It explained how actually the banks had almost entirely stopped holding any mortgages. Instead, they sell them on to hedge funds and such for a percentage of the mortgage, thus freeing up the money to make still more loans, which they will sell away as well. So, since they have no intention of ending up with the risk themselves, they weren’t at all picky about the mortgages they gave out. Meanwhile, the hedge funds sell them on as packages, with the high risk mortgages offering a greater payback, if paid, but higher risk. Maybe I’ll try and find the link tomorrow.

    Shrewspeaks, it’s great if I actually did manage to convince you. I’m no fan of Brown, but the great thing about the parlimentary system is that they can kick their bad ones out in six weeks, if they make up their mind to. If just one of his proposals fails to pass, he faces a vote of confidence or no confidence, so PMs can’t go too far in any direction. Unfortunately, the Brits have now, as a result of the economic downturn and a dumb thing Brown said (“British jobs for British people!” Apparently he forgot that all EU jobs are open to all EUers), become rather unwelcoming of newcomers from outside. They feel they’ve been swamped with incomers from the lesser EU countries, and they conveniently forget how many Brits are working and living elsewhere in the EU. Hope that changes.

  53. music maven

    February 5, 2009 at 6:38 pm

    Here’s my last comment on the subject. “Banks” are too broad a term. The everyday bank around the corner, i.e, Community and Regionals may sell their loans, but they are only to other larger processors like Citi, Chase, Wells, BofA, etc.

    No bank can make (or buy) a loan without meeting stated lending criteria. They ARE regulated and have a quarterly loan review on ALL loans made. They cannot arbitrarially make loans to just anyone without meeting their established criteria. Banks who buy these loans also have to report on their portfolio, so it doesn’t behoove them to buy “bad” or risky paper. These loans are highly scrutinized.

    If they have too many loans in higher risk ratings, they then have to increase their loan loss reserves which is basically a savings account that equates to the balances at risk. This ties up their capital and does not allow them to pay adequate dividends, invest in people or offices, and generally, make a profit.

    The “bad” loans were primarily through Fannie Mae, Freddie Mac, Countrywide and specialty lenders that are NOT “banks”, in the traditional sense.

    Painting all banks with the “villian” paintbrush is not accurate and not fair. There are plenty of good banks that employ ALOT of good people, and in general, banks are the MOST honest business out there. Their money has to balance every day, they must disclose EVERY aspect of their products and pricing structure and they are the most aggressively regulated industry in the country.

    When you hear “banks” on CNBC or otherwise, they’re usually referring to investment banks like Bear Stearns, Goldman Sachs, and others who are now defunct.

    Now, I’m done. I’m sure everyone is bored stiff.

  54. djcnor

    February 5, 2009 at 6:47 pm

    To quote another blog:

    Why is it that when it’s time to find places to tighten our belts, the first program to go are those that benefit women and children? Who decided that education, health care and the Violence Against Women Act were pork?� ThinkProgress notes that the proposed cuts to make the bill more “stimulative” (which of course leave tax cuts untouched, contrary to Economics 101), disproportionately affect women and children.

    These cuts would include:

    � $150 million cut to the Violence Against Women Act

    � $50 million to the Victims of Crime Act

    � $25 million to the Internet Crimes Against Children Task Forces

    � $1.1 billion to Head Start

    � $50 million to Teacher Quality Partnership Grants

    � $5.2 billion for Prevention And Wellness (including diabetes screening and HIV testing)

    � $13.9 billion for Pell Grants

    � $2 billion for Child Care Development Block Grants�� (ThinkProgress)

    Are these really the changes you want made to the stimulus bill?

  55. djcnor

    February 5, 2009 at 6:49 pm

    And, as the article explained, yes they can, if they pass on that risk to another type of organization. The loans they hold onto have to meet those criteria, but the ones they pass on don’t.


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