Is it time to start hiding money and assets?

[Sequoia]

The much-hyped economic problems have given the do-gooders great license to perform the social engineering they've lusted after for decades.

A few days ago, our President angrily told Wall Street that this .... "is not the time for profits and bonuses." Yesterday, our Vice President upped the ante by publicly stating that he wanted to throw the bonus recipients into jail. The President's spokesperson even commented that the President was "really angry" and was surprised at that since .... "he never gets that way ......."

In all of history, I don't ever recall a prior instance where a President told a private company when it was or was not, a "proper time" for profits and bonuses. The naked admission of wanting to jail such folks is frightening.

Has it come time in America to hide money and assets? And, if this is the result, will the stampede to do this actually compound the problems that the do-gooders claim to want to fix?

 

[ted mcmeekin]

It would be a good time to throw one newly appointed cabinet member and one soon to be appointed cabinet member in jail for not paying taxes. They are dishonest crooked hypocrits. They obviously missed Pat's declaration that paying high taxes is a simple moral obligation.

Ted

 

[Patrick H. Crowe]

Sequoia:

May I please refresh your memonry about "In all of history a president never told . . . ."

Please take a look at Califano's biography of LBJ. LBJ told entire industries - - see eggs, copper, so many - - what was going to happen if the tried to increase profits on his watch. He showed the consequences and they backed way off.

Obama is more subtle but I must say your knowledge of history/politics strickes me as amateurish. Please reply only after you have read Califanos book - - of course if you have already read it, I aplogize.

Patrick H. Crowe

 

[Bubbles Galore]

This so called social obligation is such bs!

Since when is it my job to take care of someone else? It just puts a bad taste in my mouth when I am told that it is a moral obligation of a civilized society to take care of their own. I don't mind helping others out, but when a government tells me I have to do it and they are going to take it from me whether or not I like it, they can get bent. I donate both money and time to charities of all types, because I want to, not because big brother tells me to.

I know this is off topic, but I needed to vent. Sorry

To be quite honest, I will do everything I can to keep what I have earned in my own hands. I sense a Revolution!

 

[robert roman]

What PO's most people is that bailout money was used to pay hugh bonuses to top managers who didn't deserve it. If tax money was not involved, I don't believe the outcry would have been nearly as bad. If you are a shareholder in a company that is losing money and are stupid enough to reward top managers with things like letting them buy $75,000 rugs, etc. and paying them disproportionate bonuses, so be it, just don't do it with my tax dollars.

By the way, AP just came out with a report that there are at least a dozen banks who got bailout money who have petitioned the government for over 20,000 visas to bring in foreigners for top paying jobs instead of hiring American workers. I'm a capitalist but this sucks. Where is the equity with this strategy?

 

[rph9168]

I think that most people thought the so-called bailout money was intended to allow banks and financial institutions to free more money for new loans and refinancing to help people having problems with their current loans. I don't think that the money was intended to line the pockets of the very people that caused the problem. Ordinarily I would object to the government dictating to private businesses but when these institutions came begging for money they gave up that right. They should be held accountable for the appropriate usage of the funds they received.

 

[Greg Pack]

Some of the quotes I heard from Obama last week were taken out of context. I happened to hear a bit of Hannity on the radio last week and he was playing that soundbite but snipped off part of it. Obama was talking about the guys at the banks who knew they were making short term profits recklessly. When this stuff blew up they went out, hat in hand, to the taxpayer. We've had a bunch of incompetent greedy guys as head of these institutions who made a lot of money on what is turning out to be horrible investments. I believe these last comments were brought out by last week's news about John Thain, (A HARVARD MBA GRADUATE), his bonuses to his employees just before BOA took over MER with taxpayer funding. Also Thain's (A HARVARD MBA GRADUATE)lavish refurbishment of his office ruffled some feathers. They (bank ceos) knew they were building a house of cards and personally profited from the misery they have caused in the form of huge bonuses.

Personally, I am against any bailout for any business. If they are too big to fail then they should be too big to exist. Let the free market cut them up and divvy what is worth having and jettison the junk. It will hurt a lot but then we can get on with recovery. If they are gonna bail them out, i say let the gov claw back some of those fraudulent bonuses from Thain(A HARVARD MBA GRADUATE), Mozillo, Fuld, Prince, etc. I think some perp walks might actually bring back a little confidence in the system.

 

[Patrick H. Crowe]

cfcw:

Remeber when the S & L's were deregulated? The game was let us take much bigger risks but if we fail then the government must back us up. Deregulation with government backing for losses was folly, plain and simple. Only RR could give us such complete foolishness - - he had help but he also had a veto pen.

We did not learn. Here we go again. Bush, an alleged conservative, spends money like a drunken sailor. Had a veto pen, did not use it. Has six years of a congressional majority form his own party. He tossed money, by the billions at the deregulated banks. The took silly risks: zero down, below prime rates, almost no qualifications, on and on. Why not? If we fail the government will bail us out!

What was done wrong was to not realize much stricter regulation was needed because there were many bankers (& S & L's) who saw a sure thing. When you expect government backing, like FDIC insurance, then you should have also accepted the severe regulation that MUST come with it. To expect gov backing without stringent regulation is silly.

When will we learn? When will congress learn? These folks in banking, not all but many, will steal us blind. Regulate them very carfefully and hold them accountable if we are going to back them in any way.

Patrick H. Crowe

 

[Sequoia]

Money and assets

My take on the dynamics is to ask if the flames of class warfare have been ignited?

It's not hard to figure it out when you see the V.P. of the United States in the White House saying "Welcome Back" to all the organized labor leaders. Then, his comments about "jailing people" for earning a monetary bonus is much easier to understand.

I call the new shift the "War on Success." If you are a business owner, you'll become a bigger target than you used to be. As the efforts intensify, expect to be targeted for higher "contributions" to the tax system, whether in fees, taxes, fines, or what-have-you. And, expect to be targeted with more audits to endure "compliance". And more.

I have to question whether it's now out of favor to be successful in America. If success only achieves the planting of a bullseye on you for the pols to take shots at-- then I want OFF of that radar.

 

[pitzerwm]

All civilizations run through a cycle, rise and fall, and types of governments, i.e. the downfall of the Russian empire. I hope that I am not alive when the cycle of Capitalism is over. We are probably as close as we can get now. Anti-Capitalism and success has been taught in our colleges for 20+ years, eventually, that will be totally agreed with.

 

[PaulLovesJamie]

Duane, I agree with what you're saying. Problem is that everything I have is tied up in my farm & the wash, both of which are difficult to hide. If I could just perfect that cloak of invisibility...

 

[PaulLovesJamie]

Let the free market cut them up and divvy what is worth having and jettison the junk.

classic austrian economics (my point of view btw) - for a minute there I thought you were Cebo in disguise!

 

[cebo]

and we all know what a stellar president lbj was. maybe when all the seal crap comes out about him the masses will wake up.

 

[cebo]

Paul it it might have been me and I didn't even know it. It maybe about time to go further underground.

The problem is not deregulation it is too much regulation.

PC likes to give out reading assignments and it's been years since I gave him one. Pat have you not figured out "The Law" (Fredrick Bastiat) by now? But I digress.

As a real estate appraiser I have been telling people for about 4-5 years bad times were on the way, but nobody listened. Hell, most of the people in this country are unable to balance a check book much less comprehend macro-economics.

Give me a day or two and I'll find a link on how the great fannie & freddie paid off congress to run wild. I wish Bush had as big a spine on domestic economics as he did on terrorism. Most of this stupid bailout won't be spent until we are getting over the hangover. Can someone explain how increasing agency budgets (IE condom giveaways etc) is going to help the economy?

Obama said we are a young country which is correct, but we have an old government. Think about it. While we are a while from socialism (a economic system most people cannot define) it's on the way. See my post on the quote thread.

 

[Patrick H. Crowe]

Dear Cebo:

Was there too much regulation on the S & L's which caused their demise?

Was there too much regulation on the banks and financil institutions which cause their collapse?

Was the lack of almost any regulation in the bail out the real problem?

If any person or institution wants to completely "go it alone", I am all for them. I sincerely admire the few who do.

But the whining crybabies who expect the taxpayers to cover their foolish, incompetent management and then have the gall to show up on private jets with tin cup in hand - - what a craven hoax - - can anybody buy that? That's the auto mindustry, isn't it?

Meantime their foreign competitors, building better, more efficient, more reliable cars, come to the USA and eat their lunch. Read The Decline & Fall of the Anerican Auto Industry. You'll get the idea.

Patrick H. Crowe

 

[mac]

You guys don't seem to understand that arguing a point with Mr Chrowe is like mud wrestling with a pig. Not only is it a waste of time, but after a while you realize the pig enjoys it.

 

[cebo]

Mac, give me a break I was halfway through a box of wine and was bored.

Pat you love those reading assignments. Did you ever comprehend Bastiat's "The Law". Maybe these will be easier. Have to run, got some taxes to pay.

http://www.reason.com/news/show/130330.html

http://www.reason.com/news/show/130951.html

http://www.reason.com/news/show/130916.html

http://www.reason.com/news/show/130843.html

 

[Patrick H. Crowe]

Dear Cebo:

Many thanks for the reading assignment. As soon as I saw it I clicked on the first article and read it. Then I printed it so I could read it again. I very much liked Mr. Flynn's style: He tells us what he's going to tell us, then he tells it to us and then he briefly tells us what he told us. I sincerely hope others will read it. Here's what it said to me.

Paragraph one ends with the cause of the problem being ". . . . bad government policy and worse crisis management."

I agree 100%.

In the very next paragraph he tells us the banks . ."created ever more exotic mortgasge loans . . pushed housing prices up . .extended mortgage debt to familes vulnerable to economic downturns . . "

To me he is making my exact point. The bankers figured out that due to the almost complete absence of reasonale regulations that they could do what ever they wanted and they would either make big bucks or the Fed would cover their losses. They did zero down loans, sub-prime loans, interest only loans. They made them to unqualified buyers, sometimes using exaggerated appraosals. Almost any fool could see they were inviting trouble because they were almost unregulated.

Flynn has made my case. He calls the lack of reasonable regulations "bad government policy". An odd twist in my view. These folks, as the S & L crisis proved, will become more and more greedy, take outlasndish risks and do this knowing that if it blows up the taxpayers will bail them out. Stringent regulation was needed, that's my point.

As to Flynn's point about Bush used "bad crisis management" he got that 100% right.

I also like Flynn's point that the "conservative commentators" who blamed the Community Reinvestment Act for this crisis had "overblown" its real role.

Thanks again Cebo.

Patrick H. Crowe

 

[cebo]

Pat,

There were very few investors that would take subprime (i.e. bad loans) until fannie started taking buying them. For all practical purposes fannie is a govennment agency. Once they started buying these other investors just assumed they were ok and did not look under the hood. Next thing the lenders started bundling CDO and selling to governments & institutional investors all over the world.

I have been an appraiser for 19 years and have seen a run up of prices in certain submarkets of my area several times. When a return on investment (real estate) increases substantially above reaonable historic increases it is always followed by a decline or period of inactivity that lets the rest of the world catch up.

And yes this crisis is overblown. By the time the fed gets the stimulus out we'll be getting past the hangover and are grandkids will suffer with the debt.

You also need to go back and look over what really happened in the S&L crisis. The FSLIC only paid many of the depositors pennies on the dollar. So much for government backing. There should be a lot of govenment strings attached to this money just so people won't take it.

 

[Patrick H. Crowe]

Dear Cebo:

Like Flynn you make my case, you do it even better. Here's all I am saying: Any business person who wants to go it 100% free of government backing should be absolutely free to do so. Please say AMEN!

Any person who wants the government (we taxpayers) to cover their potential losses must accept very stringent regulations. Couldn't any fool see that? The banks completely suckered Bush, right. Zero down? Sub prime rates? Unqualified buyers? You know all the other stuff, exaggerated appraisals, on and on.

Their amateruish theory was that as long as prices contine to grow rapidly we make money. If it crashes then our losses are backed by taxpayers.

All I'm saying is we should have put Cebo in charge. He'd have squared these folks up. Zero down? NEVER! Cebo's regulations would have been reasonable. Of course the buyer has to meet reasonable guideline to qualify for a loan. Of course any bank found to be doing "sweetheart" deals has just lost their backing. I'd love to hear Cebo tell the fools at the SBA what to do.

I strongly favor home ownership. I strongly favor entrepreneurship. I simultaneously am far, far more conservative, i.e., want government backing then meet these regs, than Bush ever was.

I think we are in basic agreement, I welcome your response.

Patrick H. Crowe