Wolffs American class analysis in cartoon form

[RGacky3]

http://www.rootsofhealthinequity.org/how-class-works.php

[Bud Struggle]

Yea. Cartoons. That a plan.

[Revolution starts with U]

Yea. Cartoons. That a plan.

http://www.youtube.com/watch?v=IUGJmo7XzS8

[RGacky3]

Yea. Cartoons. That a plan.

Did you watch the video? I was hoping that even this would be easy for you to understand but obviously you are bent on your stupidity.

[Lynx]

I believe that cartoons that deal with serious subject matter are called animations. Hopefully Bud Struggle will muster the effort needed to critique the content??

[Judicator]

Some comments:

Pawn shops and the mafia were the only forms of (uncollateralized) credit available to the masses before credit cards. The interest rate on a credit card is arguably an improvement. Plus, nobody's holding a gun to your head to borrow. People respond to incentives (explaining borrowing increase in the 1970s) but this does not absolve them of their responsibility for how they choose to respond.

You can keep lending to people forever, you just need to jack up interest rates as they get more and more likely to default. This will put the brakes on their borrowing. The banks didn't so they kept on borrowing.

He ignores the fact that in a mortgage contract, to get one in the first place, you have to agree that the house belongs to the bank. Otherwise you'll have to get a normal house rather than a McMansion. If you don't want that risk, don't use collateralized debt. If you sign a contract that says "the interest rate is 2% for 2 years and 15% after that"...what do you think is going to happen after rates go down.

Bankers have social responsibility....:laugh::laugh::laugh::laugh:

I'm sure rising wages helped a lot in 1930...

[danyboy27]

Some comments:

Pawn shops and the mafia were the only forms of (uncollateralized) credit available to the masses before credit cards. The interest rate on a credit card is arguably an improvement. Plus, nobody's holding a gun to your head to borrow. People respond to incentives (explaining borrowing increase in the 1970s) but this does not absolve them of their responsibility for how they choose to respond.
.
This is bullshit. Credit is something mankind used to exchange good and services for millenia.interest rate where mostly illegal back then, considered a theft, today its legit.


Some comments:

He ignores the fact that in a mortgage contract, to get one in the first place, you have to agree that the house belongs to the bank. Otherwise you'll have to get a normal house rather than a McMansion. If you don't want that risk, don't use collateralized debt. If you sign a contract that says "the interest rate is 2% for 2 years and 15% after that"...what do you think is going to happen after rates go down.

Someone who lend money or something to someone always share the risk and responsability that come with it.


If i give a gun and several bullets to someone who i know is batshit insane, wouldnt be my responsability if he goes on a killing spree to murder a lot of peoples?

If i sell a piece of land near a populated area while knowing verry well a lot of toxic waste are gonna be stored there and kill ton of people, wouldnt be my responsability to not sell the lend to this buisness?

Libertarian: Beccause the notion of personnal responsability can be selectively applied whenever we choose!

[Lynx]

The bank doesn't own the house unless the default clause is triggered and the owner is unable to refinance or sell before the deadline. Rising house prices ensured that a mortgage was repayable, so long as there were buyers willing to take their turn on the bandwagon.

I would say that bankruptcy laws and lack of debtor prisons encourage borrowing beyond one's means. This was supposedly put in place for entrepreneurs.

[Judicator]

This is bullshit. Credit is something mankind used to exchange good and services for millenia.interest rate where mostly illegal back then, considered a theft, today its legit.


I don't know about the Jews in 1500, but do you really think the interest rate a pawn shop or loan shark would have charged in 1960 was lower than that of a credit card agency?

I mean...maybe it was (but I doubt it)...pawn shop loans are overcollateralized and the mafia break your knees if you don't pay. Credit card companies do neither.



Someone who lend money or something to someone always share the risk and responsability that come with it.


I mean they share risk...not responsibility really.



If i give a gun and several bullets to someone who i know is batshit insane, wouldnt be my responsability if he goes on a killing spree to murder a lot of peoples?

If i sell a piece of land near a populated area while knowing verry well a lot of toxic waste are gonna be stored there and kill ton of people, wouldnt be my responsability to not sell the lend to this buisness?

Libertarian: Beccause the notion of personnal responsability can be selectively applied whenever we choose!


So you're bringing up 3 examples (including the money)

1) It's wrong to give guns to crazy people
2) It's wrong to commit fraud
3) It's wrong to lend money to fiscally irresponsible people

Please show me the logic you used to derive (3) from (1) and (2).

[RGacky3]

Pawn shops and the mafia were the only forms of (uncollateralized) credit available to the masses before credit cards. The interest rate on a credit card is arguably an improvement. Plus, nobody's holding a gun to your head to borrow. People respond to incentives (explaining borrowing increase in the 1970s) but this does not absolve them of their responsibility for how they choose to respond.


He was'nt criticizing credit cards, he was criticizing the NEED for credit cards due to flatlined wages.


He ignores the fact that in a mortgage contract, to get one in the first place, you have to agree that the house belongs to the bank. Otherwise you'll have to get a normal house rather than a McMansion. If you don't want that risk, don't use collateralized debt. If you sign a contract that says "the interest rate is 2% for 2 years and 15% after that"...what do you think is going to happen after rates go down.

Bankers have social responsibility....:laugh::laugh::laugh::laugh:

I'm sure rising wages helped a lot in 1930...

I don't think he said bankers have social responsibility, thats the problem.

He does'nt ingore that fact, but he's an economist not a personal moralizer of what people SHOULD do, economists examine the world how it is.

BTW, NOTHING in your post is an actual critique on the actual class analysis, just finding a way to blame the worker.


Hopefully Bud Struggle will muster the effort needed to critique the content??

Don't hold your breath.

[danyboy27]

I don't know about the Jews in 1500, but do you really think the interest rate a pawn shop or loan shark would have charged in 1960 was lower than that of a credit card agency?

I was making the point that in the past, when currency was lacking, peoples invented and used credit at various degree trought history. Pawn shop, loan shark are a relatively new concept that appear after the legimization of interest bearing loans. Credit wasnt really needed in the 60s beccause there was money in circulation, people had a decent purchasing power beccause they had relatively good wages.


I
I mean they share risk...not responsibility really.

Semantics. when you take a risk you take responsability for the consequences, good and bad.

[danyboy27]

I
1) It's wrong to give guns to crazy people
2) It's wrong to commit fraud
3) It's wrong to lend money to fiscally irresponsible people

Please show me the logic you used to derive (3) from (1) and (2).

if you lend money to a lot of poor peoples and those folks cannot repay you, has an invididual you have to eventually assume that you will never be able to see your money again and just drop the cases.

Of course has an invdividual you have the right to seize the assets of those people and throw them to the street, create more criminality and povrety, but that wouldnt be really responsable, would it?

[Judicator]

Pawn shop, loan shark are a relatively new concept that appear after the legimization of interest bearing loans. Credit wasnt really needed in the 60s beccause there was money in circulation, people had a decent purchasing power beccause they had relatively good wages.


If real wages are flat they have the same purchaing power today. You can't say "BBBBBUT costs of living went up!" because you already said real wages were flat (and real wages include the impact of changes in the CPI).

I was making the point that credit cards were better than pawn shops, so if the guy in the video wants to attack credit cards he should using your point of comparison...not the 1960s.



Semantics. when you take a risk you take responsability for the consequences, good and bad.


Oh, sure. Banks are certainly should be responsible for the values of their loan portfolio...but this is more a responsibility to their creditors than a responsibility to the debtors.


if you lend money to a lot of poor peoples and those folks cannot repay you, has an invididual you have to eventually assume that you will never be able to see your money again and just drop the cases.

Of course has an invdividual you have the right to seize the assets of those people and throw them to the street, create more criminality and povrety, but that wouldnt be really responsable, would it?

Some never do repay you. This is why not everyone can borrow at the risk-free rate. The risk of default is priced into the loan in the form of a higher interest rate.

How is collecting on your end of an agreement irresponsible? If I flipped a coin with you for $20 and it came up in my favor, would it be irresponsible for me to ask for $20?

[R_P_A_S]

Can someone PLEASE explain to me what he means about immigration. Starting from 3:50 (The foreclosure and credit crisis)...

He's talking about the rising of wages until 1970's and he "blames" women in the work place and immigration among other things.

I'm a big advocate for immigrant rights and this sorta hurts my arguments that immigration is not a huge factor. How am I supposed to rally workers and get them all to come together if this stuff is out there? that they are too blame? "immigrants"? :/

[Judicator]

He was'nt criticizing credit cards, he was criticizing the NEED for credit cards due to flatlined wages.


Wages are only "flatlined" for the bottom...not enough to account for the massive amount of credit card spending if we're looking at the entering the labor force in 1970 (i.e. the incomes of those who are ~60 today).

Anyway, if $X in real income is good enough to get by without credit card spending then, there's no need to use credit cards now.



BTW, NOTHING in your post is an actual critique on the actual class analysis, just finding a way to blame the worker.


His class "analysis" is basically "let's blame the rich for all of our problems." What I've said attacks that. Even you agree with this by claiming I blame the workers.

[RGacky3]

He's talking about the rising of wages until 1970's and he "blames" women in the work place and immigration among other things.


He's not blaming them ... Its part of the equasion, he's blaming capitalism.


His class "analysis" is basically "let's blame the rich for all of our problems." What I've said attacks that. Even you agree with this by claiming I blame the workers.

Thats not what his analysis is, watch it again, and pay attention.


Wages are only "flatlined" for the bottom...not enough to account for the massive amount of credit card spending if we're looking at the entering the labor force in 1970 (i.e. the incomes of those who are ~60 today).


Wages are flatlined for most of the working class, and it does account for the credit card spending if you take into account expecting rising living standards.


Anyway, if $X in real income is good enough to get by without credit card spending then, there's no need to use credit cards now.


First of all many peoples incomes are no longer good enough to get by, and also most people would have had to lower their living standards.

No you might say "then they should have done it." but thats a moral argument, and we need to look at the economics of it.

[Os Cangaceiros]

I don't know about the Jews in 1500

Goes back even further, all the way to ancient Mesopotamia, in fact.


Please show me the logic you used to derive (3) from (1) and (2).

In this case the jump from "lending to people you know won't pay back" to "fraud" is the fact that banks, in cahoots with rating agencies, bundled these toxic loans (which they knew were toxic, based on their own statements, such as refering to certain CDO's as "dog shit", and financial hedging, all while marketing the loans as a good investment) and sold them to retirement funds, resulting in devastation.

[Judicator]

Thats not what his analysis is, watch it again, and pay attention.


You'd deny that one of his claims is that "it's a problem that the rich make consumption decisions?"



Wages are flatlined for most of the working class, and it does account for the credit card spending if you take into account expecting rising living standards.


If you spend money on a credit card in anticipation of a raise (rising living standards) and you don't get one...the solution would be to spend LESS, rather than MORE on your credit card.



First of all many peoples incomes are no longer good enough to get by, and also most people would have had to lower their living standards.


If it isn't good enough now then it wouldn't have been good enough in the past, so you're contradicting yourself. Plus, how on earth is credit card spending going to increase your living standards?



No you might say "then they should have done it." but thats a moral argument, and we need to look at the economics of it.


:confused: I might say they should have done what?

[RGacky3]

You'd deny that one of his claims is that "it's a problem that the rich make consumption decisions?"


No, I deny that "blame the rich" is his analysis.


If you spend money on a credit card in anticipation of a raise (rising living standards) and you don't get one...the solution would be to spend LESS, rather than MORE on your credit card.


No shit, thats a personal solution, but not a systemic one, when you have economic growth without a growth in living standards you have a problem.


If it isn't good enough now then it wouldn't have been good enough in the past, so you're contradicting yourself. Plus, how on earth is credit card spending going to increase your living standards?


It is'nt good enough now because the economy has take a major hit, we had rising wages up until the 70s.

Spending on debt will increase your living standards because you can now afford it, especially when the debt is sold to you really well.


:confused: I might say they should have done what?

Not spent on credit.

[Judicator]

Goes back even further, all the way to ancient Mesopotamia, in fact.

Apparently the first moneylenders appeared ~2000 BC in Babylon. What point are you trying to make here, that the interest rates they charged were much lower, so if only we had their banking system everyone would get low interest mortgages!?


In this case the jump from "lending to people you know won't pay back" to "fraud" is the fact that banks, in cahoots with rating agencies, bundled these toxic loans (which they knew were toxic, based on their own statements, such as refering to certain CDO's as "dog shit", and financial hedging, all while marketing the loans as a good investment) and sold them to retirement funds, resulting in devastation.

Everybody knows some people will default on a loan, that's why the interest rate is above the risk-free rate!

The act of lending and the act of selling repackaged mortgages are separate. I believe the original claim was that the LENDING ITSELF is fraud. Your only evidence for this claim seems to be that lenders sold the mortgage assets to banks, who subsequently used them to commit what may or may not have been fraud. The original mortgage lenders aren't perpetrating fraud unless you think they misrepresented the contents of the assets to the banks who repackaged them. And since you evidently know that the banks knew the loans were going to fail, this is inconsistent with your view.

I'd also comment that if they banks knew the housing crisis was coming, they would have made a lot more money...but they didn't. Look at earnings for Countrywide, Wachovia, Merrill, LEHMAN, Citibank, to name a few.

[Os Cangaceiros]

Apparently the first moneylenders appeared ~2000 BC in Babylon. What point are you trying to make here, that the interest rates they charged were much lower, so if only we had their banking system everyone would get low interest mortgages!?

I was simply making the point that credit has been around for a long time, long before Jewish moneylenders.


The act of lending and the act of selling repackaged mortgages are separate. I believe the original claim was that the LENDING ITSELF is fraud.

Well, the mortgage collapse was brought up, so that specific example was what I was addressing.


I'd also comment that if they banks knew the housing crisis was coming, they would have made a lot more money...but they didn't. Look at earnings for Countrywide, Wachovia, Merrill, LEHMAN, Citibank, to name a few.

And yet many of the people in leadership positions in those firms became extremely wealthy after crashing their companies. It doesn't matter that they ruined their companies...they (esp. Lehman Brothers) knew that the American financial system would be up shit's creek without a paddle without them, and therefore they could take those risks.

[Judicator]

I was simply making the point that credit has been around for a long time, long before Jewish moneylenders.

:thumbup1:



Well, the mortgage collapse was brought up, so that specific example was what I was addressing.


Oh okay. Yeah I think that gets a bit more complicated.



And yet many of the people in leadership positions in those firms became extremely wealthy after crashing their companies. It doesn't matter that they ruined their companies...they (esp. Lehman Brothers) knew that the American financial system would be up shit's creek without a paddle without them, and therefore they could take those risks.


Even the leaders who got out with golden parachutes would have gotten MUCH RICHER had their firms stayed afloat through the crisis ... primarily because their equity wouldn't have gone to 0. There were a few hedge funds that made out like bandits during the crisis because they did exactly that. So I'm skeptical that the leaders of these banks "knew it was coming."



No, I deny that "blame the rich" is his analysis.


He explicitly says (9:00) it's just as much (if not more) the fault of the banker when someone borrows irresponsibly as it is the borrower's fault.



No shit, thats a personal solution, but not a systemic one, when you have economic growth without a growth in living standards you have a problem.


Why?



It is'nt good enough now because the economy has take a major hit, we had rising wages up until the 70s.

Spending on debt will increase your living standards because you can now afford it, especially when the debt is sold to you really well.


You miss the point, again. If a real wage of $X is fine in 1970, it's fine today, based on the definition of a real wage.

Borrowing just moves consumption from the future to now, it cannot increase your lifetime average standard of living.

I don't know how offering 30% interest is a good sales pitch in any universe.



Not spent on credit.


They certainly could have, that's a fact.

[RGacky3]

He explicitly says (9:00) it's just as much (if not more) the fault of the banker when someone borrows irresponsibly as it is the borrower's fault.


Sure, due to information assymetries and so on, but thats not his analysis at all, if thats ALL you got from it watch it again.


Why?


Because the point of the economy is that people live better.


If a real wage of $X is fine in 1970, it's fine today, based on the definition of a real wage.


Looking at mean real wages, or if you take out the top quintile, wages have dropped actually, Average wages have stayed the same or dropped a little.


Borrowing just moves consumption from the future to now, it cannot increase your lifetime average standard of living.


Ok, but it increases it NOW, which is the point.


I don't know how offering 30% interest is a good sales pitch in any universe.


No shit.


They certainly could have, that's a fact.

Sure, but thats not a defence of the system, you might as well, just say the problem is "Americans are stupid."

[Judicator]

Sure, due to information assymetries and so on, but thats not his analysis at all, if thats ALL you got from it watch it again.


The point stands that "let's soak/blame the rich" is a key theme.



Because the point of the economy is that people live better.


"but thats a moral argument, and we need to look at the economics of it."



Looking at mean real wages, or if you take out the top quintile, wages have dropped actually, Average wages have stayed the same or dropped a little.


Looks like it's going down to me :drool::drool::drool:
http://www.ofm.wa.gov/trends/economy/charts/ch102.gif

On wages going down, changing your facts are you?

"Wages are flatlined for most of the working class" - Rgacky



Ok, but it increases it NOW, which is the point.


Spending my entire paycheck this month increases my standard of living too then :lol::lol::lol: . As soon as you start carrying a balance your standard of living falls in relation to what you otherwise would have had you not spend money on the card in the first place.



No shit.


Any yet people said "sign me up!!!"



Sure, but thats not a defence of the system, you might as well, just say the problem is "Americans are stupid."


That's a big problem. And it would explain a lot of poor decisions.

[RGacky3]

The point stands that "let's soak/blame the rich" is a key theme.


The key theme is capitalism as a system is to blame.


"but thats a moral argument, and we need to look at the economics of it."


A moral argument is such and such does'nt DESERVE that, or such and such DESERVES.

Defining the goal of economics a bieng the the best for the most people is a given.


Looks like it's going down to me :drool::drool::drool:


Those are AVERAGE wages, meaning it includes this
http://thinkprogress.org/wp-content/uploads/2009/07/wsjchartedit.gif

And you have to take into account this
http://upload.wikimedia.org/wikipedia/commons/thumb/0/01/United_States_Income_Distribution_1947-2007.svg/800px-United_States_Income_Distribution_1947-2007.svg.png (http://upload.wikimedia.org/wikipedia/commons/0/01/United_States_Income_Distribution_1947-2007.svg)

Meaning that average income will raise slightly, because the super rich are gaining more and more, while the rest are not. Notice I said "IF YOU TAKE OUT THE TOP QUINTILE," I worded that carefully.


"Wages are flatlined for most of the working class" - Rgacky


http://upload.wikimedia.org/wikipedia/commons/thumb/a/a7/United_States_Income_Distribution_1967-2003.svg/800px-United_States_Income_Distribution_1967-2003.svg.png (http://upload.wikimedia.org/wikipedia/commons/a/a7/United_States_Income_Distribution_1967-2003.svg)

Notice I said MOST OF THE WORKING CLASS, not AVERAGE WAGES.


Spending my entire paycheck this month increases my standard of living too then :lol::lol::lol: . As soon as you start carrying a balance your standard of living falls in relation to what you otherwise would have had you not spend money on the card in the first place.


Exactly ...

Unless your wages rise with productivity, which they did not.


Any yet people said "sign me up!!!"


Because that was'nt the pitch was it.


That's a big problem. And it would explain a lot of poor decisions.

Ok, so Capitalism does'nt work in America because people are stupid :laugh:, the incentive systems are fine, people are juts dumb.