Waiting for Fitzgerald

[Spanky]

Originally posted by Captain
Just a question for you and the other poster on New Orleans, who mentioned Kelo. Won't some level of redesign and rationalization occur without government intervention? I know that Chicago after the fire was rebuilt in a radically more rational way, but I don't know how much of that was free market forces at work and how much was government intervention.

It strikes me that a rational real estate developer has a better chance of assembling a useful larger parcel for development in the affected area than they had before Katrina, regardless of anything the government does.

If everyone gets their property back there won't be any redesign. You can't make a new map when the old map is locked in. Any redesign is going to involve the confiscation of private property.

[Spanky]

Originally posted by Captain
Don't we solve this problem by opening our borders to intelligent younger people from around the globe, leaving other countries to deal with aging populations without the benefit of our workforce? I do not mean this entirely in jest.

I don't think this is a joke at all. This is exactly what we need to do. One of the reason this country has been so successful economically is that we steal all the best minds and entrepeneurs from other countrys. By definition, anyone that is willing to leave their home and travel to a foreign land where they don't speak the language, is a risk taker. In other words, the personality of an entrepenuer that will help drive this country.

Immigration is very important to this countrys future.

[ltl/fb]

Originally posted by Spanky
If everyone gets their property back there won't be any redesign. You can't make a new map when the old map is locked in. Any redesign is going to involve the confiscation of private property.

Ummmmmmmmmm it seems like it is possible that people might sell their property on, like, you know, the market. How much of the area that most needs a redesign is residential owner-occupied versus nonresidential or residential non-owner-occupied?

Was there a mass confiscation in Chicago after the fire? In Galveston after the 1900 hurricane? I'm actually genuinely curious.

[Spanky]

Originally posted by Captain
I do not believe I made these assumptions. I am simply trying to test your hypothesis, and making an initial stab at it based on very broad data. If you'd like your hypothesis to hold up, I'd suggest digging deeper into the data.

I have not been around bond traders in a while (by the way the real trendsetters are not the guys in the pit). But I was in this world from 92-96. These guys predict future budget deficits for a living and their income depends on such predictions. So they can't afford to get involved in partisan B.S. That is why I think their opinion is a good one.

I know what the conventional wisdom was at the time. After the 93 act, it looked as though the only way Clinton was going to balance the budget was to keep raising taxes. His tax increase did not solve the problem and spending had actually gone up. So if spending was going to continue to go up, Clinton was going to have to keep raising taxes to get where he wanted to go. The Bond markets did not like that scenario.

Before the Republicans came in, and when he was working with the Dems Clinton was the voice for Fiscal restraint. However, Congress would not accept most of Clintons proposed cuts and just accepted his proposed tax increase. But when the Republicans came to town, and the Republican proposals came through, Clinton thought that the Republican cuts were too deep (they were not actually cuts, but reductions in growth). There are strong arguments for what Clinton did. The cuts may have been too deep. However, there is no question that he put these domestic programs over fiscal discipline. You can argue if this was the right move, but there is no question that is what he did.

Clinton fought budget cuts from 94 until the end of his presidency. So to give him credit for balancing the budget is just absurd. It is like giving him credit for welfare reform.

If the Republicans had not come in 94, the only way out of the mess was to keep raising taxes every year and I just don't think there was the political will to do it. And the Dems were not going to make the necessary cuts.

In the partisan political game the President is given credit or demerits for everything that happens during their tenure. But the more discerning citizen realize this is just partisan B.S. Especially when the President's party does not control congress.

However, since Bush came to office, and he has shown amazing control of Congress, I think it is fair to give Bush credit or demerits for everything that has happened since he has been president. For the first time since Lyndon Johnson, the presidents budgets have actually become reality.

As for why the long term bond rates are still low is a mystery to me. I am not in that world anymore. I would think they would be higher. My suspicion is that the markets thought the deficits were necessary to create growth and that growth would lead us back to balanced budgets. But with Delay's talk of already cutting all the fat I, I would be really sckeptical if I were a bond trader. But maybe they know something I don't.

[Spanky]

Originally posted by sgtclub
Why hasn't anyone mentioned that Rubin's theory (i.e., that there is a connection between high deficits and high interest rates) has been proven incorrect?

This was not Rubins theory, but the conventional wisdom of the bond markets. The bond markets definitely don't think this has been proven incorrect. I don't buy the Republican propaganda about Rubin. Without him things would have really gotten out of hand from 92-94. In addition, if the Republicans had not come to power in 1994 he would have been the person holding us back from disaster.

In addition, he argued that the Republican spending cuts were not necessary because economic growth would pull us out of the deficits sooner than people thought. He was right. I think the spending cuts would have been a good thing, but the guys knew his stuff.

[Penske_Account]

Originally posted by Spanky
I have not been around bond traders in a while (by the way the real trendsetters are not the guys in the pit). But I was in this world from 92-96. These guys predict future budget deficits for a living and their income depends on such predictions. So they can't afford to get involved in partisan B.S. That is why I think their opinion is a good one.

I know what the conventional wisdom was at the time. After the 93 act, it looked as though the only way Clinton was going to balance the budget was to keep raising taxes. His tax increase did not solve the problem and spending had actually gone up. So if spending was going to continue to go up, Clinton was going to have to keep raising taxes to get where he wanted to go. The Bond markets did not like that scenario.

Before the Republicans came in, and when he was working with the Dems Clinton was the voice for Fiscal restraint. However, Congress would not accept most of Clintons proposed cuts and just accepted his proposed tax increase. But when the Republicans came to town, and the Republican proposals came through, Clinton thought that the Republican cuts were too deep (they were not actually cuts, but reductions in growth). There are strong arguments for what Clinton did. The cuts may have been too deep. However, there is no question that he put these domestic programs over fiscal discipline. You can argue if this was the right move, but there is no question that is what he did.

Clinton fought budget cuts from 94 until the end of his presidency. So to give him credit for balancing the budget is just absurd. It is like giving him credit for welfare reform.

If the Republicans had not come in 94, the only way out of the mess was to keep raising taxes every year and I just don't think there was the political will to do it. And the Dems were not going to make the necessary cuts.

In the partisan political game the President is given credit or demerits for everything that happens during their tenure. But the more discerning citizen realize this is just partisan B.S. Especially when the President's party does not control congress.

However, since Bush came to office, and he has shown amazing control of Congress, I think it is fair to give Bush credit or demerits for everything that has happened since he has been president. For the first time since Lyndon Johnson, the presidents budgets have actually become reality.

As for why the long term bond rates are still low is a mystery to me. I am not in that world anymore. I would think they would be higher. My suspicion is that the markets thought the deficits were necessary to create growth and that growth would lead us back to balanced budgets. But with Delay's talk of already cutting all the fat I, I would be really sckeptical if I were a bond trader. But maybe they know something I don't.

2. Although Ty will find a blog to refute this.

[Tyrone Slothrop]

Originally posted by Spanky
Do you have any evidence to support this theory?

Brad DeLong has been pointing out when they do this for three or four years. I don't have time to go through all of his archives, but here is a recent example, as discussed in The Economist.

[sgtclub]

Originally posted by Spanky
This was not Rubins theory, but the conventional wisdom of the bond markets. The bond markets definitely don't think this has been proven incorrect. I don't buy the Republican propaganda about Rubin. Without him things would have really gotten out of hand from 92-94. In addition, if the Republicans had not come to power in 1994 he would have been the person holding us back from disaster.

In addition, he argued that the Republican spending cuts were not necessary because economic growth would pull us out of the deficits sooner than people thought. He was right. I think the spending cuts would have been a good thing, but the guys knew his stuff.

I don't mean theory in the literal sense, but it was his guiding management principle. How could they not think it? We've had massively growing deficits for 5 years, while rates have (until recently) been near historic low levels.

[Tyrone Slothrop]

Originally posted by Spanky
Actually my request from evidence was for Tyrones theory about Bush doctoring the numbers.

No -- I was the one who asked for a shred of (reputable) evidence linking the bond markets and the party in Congress. I'm still waiting.

[Spanky]

Anyone get this in their email. I assume it is B.S. because there is not actual specific cite for the information but I was just curious.


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[Spanky]

Originally posted by Tyrone Slothrop
Brad DeLong has been pointing out when they do this for three or four years. I don't have time to go through all of his archives, but here is a recent example, as discussed in The Economist.

You come from such an absurd position that it is hard to know what to say. I might have a theory that Bush is really a catholic but he just hides it. There is no way to ever prove or disprove that theory. Same with this theory. Unless someone leaks that this is what happened this theory can never go beyond speculation.

Yet because people have been talking about the possibility that this might have happened you talk about it as if it were a fact. Just because people are suggesting this is a possiblity does not make it true.

[Spanky]

Originally posted by Tyrone Slothrop
No -- I was the one who asked for a shred of (reputable) evidence linking the bond markets and the party in Congress. I'm still waiting.

Again. You make these ridiculous comments. It was like when you were questioning whether Roosevelt wanted to get us into WWII, or was misleading the American public about his intentions about WWII. It is conventional wisdom. You kept asking for a cite but everyone ignored you because it is like you were questioning whether or not the sky is blue. I am not going to look for a cite teling you the sky is blue.

You questioned the buses and wanted a cite from a reputable news source. Of course I didn't go looking for one because you were being ridiculous again. When I picked up the economist that week and read the lead story, what did this London based newspaper talk about in their lead story? the buses.

Now you are asking for a cite to support the fact that the bond markets care which party is in congress and what they are up to. Why should anyone look for a cite for something that is so patently obvious. Bond traders are always trying to predict future federal budgets. Why would they not factor in what party controlled congress and what they are up to. It is so absurd it is not even worth replying to.

[Hank Chinaski]

Originally posted by Spanky
Again. You make these ridiculous comments. It was like when you were questioning whether Roosevelt wanted to get us into WWII, or was misleading the American public about his intentions about WWII. It is conventional wisdom. You kept asking for a cite but everyone ignored you because it is like you were questioning whether or not the sky is blue. I am not going to look for a cite teling you the sky is blue.

You questioned the buses and wanted a cite from a reputable news source. Of course I didn't go looking for one because you were being ridiculous again. When I picked up the economist that week and read the lead story, what did this London based newspaper talk about in their lead story? the buses.

Now you are asking for a cite to support the fact that the bond markets care which party is in congress and what they are up to. Why should anyone look for a cite for something that is so patently obvious. Bond traders are always trying to predict future federal budgets. Why would they not factor in what party controlled congress and what they are up to. It is so absurd it is not even worth replying to.

2. Someone has needed to say this for years, but only someone with Spank's Gravitas could do it effectively. Time for a sock change Ty. slave, when do i get the keys to this place?

[Spanky]

Originally posted by sgtclub
I don't mean theory in the literal sense, but it was his guiding management principle. How could they not think it? We've had massively growing deficits for 5 years, while rates have (until recently) been near historic low levels.

These long term mortgage rates are set by people (not by Greenspan). The rates reflect what the mortgage traders (the market) think the future federal deficits will be. For some reason they are optimistic about future US budgets. I am no longer in these circles so I have no idea why they think that. All I can assume is that they know something we don't.

I should also point out that during the Reagan era that the markets had no confidence in the Dem congress balancing the budget or in Reagan being able to get them to pass anything close to balanced budgets. I could be wrong, but I am pretty sure they were really high in the 80s (higher than 8).

[Mmmm, Burger (C.J.)]

Originally posted by Spanky
If everyone gets their property back there won't be any redesign. You can't make a new map when the old map is locked in. Any redesign is going to involve the confiscation of private property.

Not really. If the redesign means their property is under water, that's not a taking, that's your own bad luck. If we decided to abandon new orleans, as I've been saying we should for the most part, it's not a taking. they can still live there, with scuba gear.

And fringe this gives me an opportunity to respond to your FB post in teh right place.

If the oil companies need a place for their workers, why should the rest of the country pay for that? Same for the railroad cos. I know that you support Bush and all, but isn't doing so a bit much even for you? Instead of rebuilding the low lying areas of the city so that roughnecks can live there, why not take the money and get teh oil companies to kick in their share too to build a 20 lane highway to allow workers to commute super fast from Baton Rouge or somewhere above sea level. Same for the rail junctions. If people just work there, they can send them home once a decade for the bad storms.