The lone dissenter. What a guy.
What you don’t think the fed should have cut rates by 125 bps in 8 days?? Shame
Speaks volumes about the extent of the subprime crisis and the ripple effect it’s had on the rest of the economy.
Recession is not a Fed’s problem. The Fed thinks it is… Fed is too soft. It should stand up to the lawmakers and ask them to work on correcting the structural problems that got us here in the first place. For example, there are millions of legal immigrants who are not buying homes because they do not have permanent residency. By passing immigration reforms, lawmakers can get these 100k+ earning families to buy homes. Fed can force the govt. to get out of the war, cut government spending, stop 150b freebies, invest in +ve NPV projects… - just stop printing more money
busy_people Wrote: ------------------------------------------------------- > Recession is not a Fed’s problem. The Fed thinks > it is… > I think it is. Equity markets are not the Fed’s problem though. > > Fed is too soft. It should stand up to the > lawmakers and ask them to work on correcting the > structural problems that got us here in the first > place. > They did in wacky ways. > > For example, there are millions of legal > immigrants who are not buying homes because they > do not have permanent residency. By passing > immigration reforms, lawmakers can get these 100k+ > earning families to buy homes. > Sure, because as long as you make 100K we’ll give you a green card. > > Fed can force the govt. to get out of the war, cut > government spending, stop 150b freebies, invest in > +ve NPV projects… - just stop printing more > money Fed can force govt to get out of the war? Congress couldn’t force the govt to get out of war in Vietnam, how can the Fed do it?
“For example, there are millions of legal immigrants who are not buying homes because they do not have permanent residency. By passing immigration reforms, lawmakers can get these 100k+ earning families to buy homes.” so are these people earning all this money are living on the street? of course not. by buying a home their just moving from renters to buyers. so what? the value of the houses in the neighborhood they move to go up or the builders have one less house in their inventory. but what happens to the house they move from? what about the person who owns that house? no rent income equals no cash flow to pay the note etc. just because person A buys a house doesn’t mean some other renter is going to be able to come in and take their place. but i do agree with you that the fed’s job isn’t keeping us out of a recession. and it surely isn’t to support the equity markets. they should worry about inflation and if some well timed rate cuts kept within a tight band can help the economy, i think that’s ok. i’m just not certain i trust their ability to either time them correctly.
JoeyDVivre Wrote: ------------------------------------------------------- > Sure, because as long as you make 100K we’ll give > you a green card. JD, I am not suggesting give green card because you are making 100k - give green card in order to retain the valuable human capital that the high skilled immigrant brings with him (structural issue). these people buying homes is incidental. Of course, lawmakers can debate on whether the nation needs human capital from foreign immigrants . My point is, Fed is not putting any pressure, whatsoever, in forcing the government to take hard decisions on structural issues. They can do it by cutting money supply.
mlh97 Wrote: ------------------------------------------------------- > “For example, there are millions of legal > immigrants who are not buying homes because they > do not have permanent residency. By passing > immigration reforms, lawmakers can get these 100k+ > earning families to buy homes.” > > so are these people earning all this money are > living on the street? of course not. by buying a > home their just moving from renters to buyers. so > what? the value of the houses in the neighborhood > they move to go up or the builders have one less > house in their inventory. but what happens to the > house they move from? what about the person who > owns that house? no rent income equals no cash > flow to pay the note etc. just because person A > buys a house doesn’t mean some other renter is > going to be able to come in and take their place. > They are moving from a small rental apartment (rent is throw away money bias) to much bigger size homes. The downpayment for the house, buying expensive furniture and durables (compared to rental apts), employment generated, credit, etc - all these collectively spurs the economy. The order of magnitude is much bigger.
Arg. I try to be nice. So were supposed to dry up the money supply but then get lots of immigrants to buy stuff to stimulate the economy as a way to stop having wars. I suppose that somehow handing out green cards increases the velocity of money so that with all that speedy money we can’t concentrate on having wars or something. Interesting economic theory. Handing out green cards to make immigrants PERMANENT residents to solve a TEMPORARY economic problem is a fundamental mismatch and thus a bad idea. Even without the mismatch, all we would get is immigrants trying to take on more debt in a deeply befuddled credit market. Bad plan^2 I think the Fed’s main job is to control inflation but the other side of the coin is deflation and recession. It just doesn’t make sense to say that the Fed can’t be concerned about recession because monetary policy is so important for both.
I’m not sure how the number of immigrants and their status as residents affects the velocity of money.
It doesn’t but if we’re trying to stimulate the economy while cutting the money supply by giving out green cards, that’s the only explanation I can think of (there’s that m*v=p*q thing here - want p*q to go up while m goes down, need v to go up).
If you give green cards to illegal immigrants, they would have to pay taxes. Their discretionary incomes fall sharply. Not to mention that it will further incentivize people to cross the border. There are better ways to help the economy. This might be of the worse one, IMO.