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Thread: Higher Minimum Wage Coming Soon

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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by LaMidRighter View Post
    If the minimum wage is good though, then why does it have to constantly be increased? And what numbers make 7.50/hr. better than 5.75/hr. considering that costs will increase accordingly? Fair market labor value is preferable to a minimum wage any day, I haven't seen a valid counter argument to that.
    That would be true if most companies did not seek to exploit the workers for their own selfish greed. That's the biggest problem with a Capitalistic system and why the prior administration was such a failure. The prior administration believed that companies best regulate themselves. We see where that idea got us.
    <font size=5><b>Its been several weeks since the Vegas shooting.  Its it still "Too Early" or can we start having the conversation about finally doing something about these mass shootings???​</b></font>

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    Re: Higher Minimum Wage Coming Soon

    [quote]
    Quote Originally Posted by disneydude View Post
    That would be true if most companies did not seek to exploit the workers for their own selfish greed.
    I stopped reading there, got some internal writings saying such, or something other than the democrat party line backing this statement up? Actual labor value charts? Company earnings statements? Tax liability statements? Or is this more lecturing to feelings that actually doesn't fix anything?
    Neither side in an argument can find the truth when both make an absolute claim on it.

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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by disneydude View Post
    That would be true if most companies did not seek to exploit the workers for their own selfish greed. That's the biggest problem with a Capitalistic system and why the prior administration was such a failure. The prior administration believed that companies best regulate themselves. We see where that idea got us.
    Like Fannie Mae and Freddy Mac?
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by disneydude View Post
    That would be true if most companies did not seek to exploit the workers for their own selfish greed. That's the biggest problem with a Capitalistic system and why the prior administration was such a failure. The prior administration believed that companies best regulate themselves. We see where that idea got us.
    You mean the companies with unions and those that Barney Frank and Chris Dodd threatened if they didn't extend loans to people that couldn't afford them? The ones we're bailing out? (Notice they all have DNC leanings and associations)

    Most companies were fine until the banks dried up. Thanks, Barney and Chris.

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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by disneydude View Post
    That would be true if most companies did not seek to exploit the workers for their own selfish greed. That's the biggest problem with a Capitalistic system and why the prior administration was such a failure. The prior administration believed that companies best regulate themselves. We see where that idea got us.
    Uhm, DD... reality check. The housing bubble was caused almost exclusively by Washington mandated housing policies.

    THAT is why people like you are so easy to, dismiss. you ignore the reality for political theory.
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by MrVicchio View Post
    Uhm, DD... reality check. The housing bubble was caused almost exclusively by Washington mandated housing policies.

    THAT is why people like you are so easy to, dismiss. you ignore the reality for political theory.
    What Washington policy specifically had lenders giving arm and interest only loans to people that couldn't realistically afford the loan after the initiation date expires and the real monthly payment is due?
    "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by Gibberish View Post
    What Washington policy specifically had lenders giving arm and interest only loans to people that couldn't realistically afford the loan after the initiation date expires and the real monthly payment is due?
    Uhm...

    erenít the majority of the subprime loans made by mortgage service companies not subject to the CRA?
    This is true. But it is largely beside the point. A huge driver of the demand for subprime loans was the demand for CRA bonds. Banks operating under the CRA could meet their obligations by buying up CRA loans or MBS built from CRA loans. The CRA created a demand that the mortgage servicers were meeting.

    What's more, many smaller mortage service companies hoped to be acquired by larger banks. Increasing their CRA lending made them more attractive take-over targets.

    A study put out by the Treasury Department in 2000 found that the CRA was encouraging the mortgage servicers to provide loans to low-income borrowers, in part because the CRA loans had been so successful.

    Finally, the Clinton adminstration threatened to subject the mortgage companies to the CRA if they didn't comply voluntarily. They promptly agreed to increase their CRA-type lending in order to escape the kind of public scrutiny that comes with official CRA regulated status.

    If the CRA was forcing all this lax lending, why weren't bankers objecting?
    Are you really in the dark about why the leaders of large public corporations wouldn't publicly object to a piece of civil rights legislation? Fine. I'll be totally open with you: this would have been career suicide and an open invitation to bias litigation and increased scrutiny from regulators. In this case, silence is misleading.

    What's more, no one said the bankers hated the lax lending the CRA was requiring. Sure, some did. But those people were quickly shown the door, while the enthusiasts were promoted. The regulations themselves selected for enthusiasts for the program of lax lending.

    How do you explain the fact that CRA loans historically had low levels of default. Doesnít this mean that loan standards were not relaxed?
    Actually, no. We know that lending standards were relaxed under the CRA. The fact that they had relatively low default levels was initially a surprise but it isnít an indicator that lending standards were secretly high. There are plenty of explanations for this, including the lack of borrower ruthlessness in unsophisticated home owners and a tendency of delinquent low-income borrowers to sell the home and prepay the mortgage rather than default. Especially during a period of rising home prices, the default option was not heavily exercised.

    But even during the crisis, CRA loans didnít default at higher rates than other mortgages. CRA banks arenít failing more than other financial institutions, CRA areas arenít hotspots of defaults. What about that?
    In part, this is evidence that the lending standards of the CRA had spread to the rest of the mortgage market.

    I thought you said CRA loans caused this crisis.
    Nope. It isnít losses from CRA loans that drove the crisis (although they are disproportionately responsible for losses at some banks). Instead, the CRA required lax lending standards that spread to the rest of the mortgage market. That fueled the mortgage boom and bust.

    So how and why did the CRA lax lending spread to the rest of the mortgage market?
    The structure of the CRA regulations encouraged the spread. Banks that were the best at making CRA loans were allowed to grow by making acquisitions and opening new branches. This created a kind of political-financial Darwinism that reward the biggest enthusiasts for lax CRA lending standards. Of course, the most successful people under this regime were not the types who needed their arms twisted to make loose loans. They were who were predisposed to engage in loosey-goosey finance, who discovered that the CRA had made the world their oyster.

    As for the ďwhyĒ part of your question, the answer is a bit ironic. Banks making CRA loans initially expected that defaults would be higher due to lax lending standards. When they discovered the low-income borrowers had an unexpected propensity to pay their mortgages. After years of data poured in showing that borrowers were paying mortgages despite high LTVs, low down payments and unconventional income measures, bankers began to believe that many of the traditional measure of credit worthiness were overly conservative. Recall what I said earlier about how mortgage service providers started pursuing low-income borrowers in part because of the CRA.

    What they didnít take into account was that different types of borrowers may behave differently, and that much of the data on those lax lending mortgages was warped by increasing home prices. Wealthier, more sophisticated borrowers ruthlessly default when their mortgage goes underwater, for example. Whatís more, the reversal of housing prices meant that defaults across all borrower classes increased.

    Making matters worse, President Bush pushed hard for lax lending standards. He wanted to expand minority and low income home ownership far beyond what the CRA required. So he pushed even harder for the broadening of these lending standards.
    Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending

    The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

    The original lobbyists for the CRA were the hardcore leftists who supported the Carter administration and were often rewarded for their support with government grants and programs like the CRA that they benefited from. These included various "neighborhood organizations," as they like to call themselves, such as "ACORN" (Association of Community Organizations for Reform Now). These organizations claim that over $1 trillion in CRA loans have been made, although no one seems to know the magnitude with much certainty. A U.S. Senate Banking Committee staffer told me about ten years ago that at least $100 billion in such loans had been made in the first twenty years of the Act.

    So-called "community groups" like ACORN benefit themselves from the CRA through a process that sounds like legalized extortion. The CRA is enforced by four federal government bureaucracies: the Fed, the Comptroller of the Currency, the Office of Thrift Supervision, and the Federal Deposit Insurance Corporation. The law is set up so that any bank merger, branch expansion, or new branch creation can be postponed or prohibited by any of these four bureaucracies if a CRA "protest" is issued by a "community group." This can cost banks great sums of money, and the "community groups" understand this perfectly well. It is their leverage. They use this leverage to get the banks to give them millions of dollars as well as promising to make a certain amount of bad loans in their communities.

    A man named Bruce Marks became quite notorious during the last decade for pressuring banks to earmark literally billions of dollars to his organization, the "Neighborhood Assistance Corporation of America." He once boasted to the New York Times that he had "won" loan commitments totaling $3.8 billion from Bank of America, First Union Corporation, and the Fleet Financial Group. And that is just one "community group" operating in one city Ė Boston.

    Banks have been placed in a Catch 22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults. If they donít comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

    Consequently, banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as "subprime" loans. In order to compensate themselves for the added risk of extending these loans, many lenders have increased the lending fees associated with mortgage loans. This is simply an indirect way of doing what banks always do Ė and what they must do to remain solvent: charging effectively higher rates of interest on riskier loans.
    Obama seeks to mandate more risky, low-income loans by banks, in new financial rules

    As they say: Educate thyself.
    Climate, changes. It takes a particularly uneducated population to buy into the idea that it's their fault climate is changing and further political solutions can fix it.



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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by Sturmrabe View Post
    Yes you can, but only to a point...
    You can't do it in the middle of a recession. If we had 3-4% unemployment it would be a different story.

    This is nothing but a, "Look what we did for the poor folks", piece of legislation.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: Higher Minimum Wage Coming Soon

    Quote Originally Posted by disneydude View Post
    That would be true if most companies did not seek to exploit the workers for their own selfish greed. That's the biggest problem with a Capitalistic system and why the prior administration was such a failure. The prior administration believed that companies best regulate themselves. We see where that idea got us.
    And, what has massive government regulation gotten us so far? It's only been six months and it's causing the economy to swell up like roadkill. Won't be long before the economy blows up like roadkill on a Louisiana blacktop in July.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: Higher Minimum Wage Coming Soon

    I've read that argument before. As far as I know the CRA doesn't tell the lenders to undertake unethical and harmful practices in order to expand their lending to lower income communities. It seems what is wrong with the CRA, other then being forced to exist in the first place, is that it allowed the lenders to be as laxed and maliciously creative as possible with their lending, hence pushing subprime mortgages.

    Would lenders have tapped into the lower income consumer market by persuading them with sub prime lending without the CRA? It would have been the only way to get their business.
    Last edited by Gibberish; 07-10-09 at 06:25 PM.
    "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
    - Warren Buffett

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