April 13, 2016

"To call your own citizens 'superpredators' is pretty harsh... It's just an easy brush to paint somebody with."

"And it's really not stopping the problem. It's just making it worse, because now... the authorities feel justified in how they treat these so-called 'superpredators.' And what is that? Who is that? I mean, specifically, who are you talking about?... Back in the 80s, Darryl Gates and LAPD, they did a 'war on gangs.' But if I'm a black kid that's not in a gang... but I look like a gang member to this white officer, then it's a war on me. So that's the problem with a term like 'superpredators.' And for some reason, the Democrats feel like they're exempt from these protests. Like: 'We're Democrats! Why are you talking to us like this? Go talk to the Republicans!' No. No. Everybody's a little guilty... of turning their back... or passing bad legislation. And everybody should be called out on it."

Said Ice Cube, commenting on a 1996 speech by Hillary Clinton, referring to "superpredators."

113 comments:

Michael K said...

Hillary would "feel the bern" if she would give up her secret service protection.

Wilbur said...

Girlie Hill is on a lot of video over the last 30-35 years.

It'll be interesting to watch as those other videos of all stripes surface.

Birkel said...

Do 'superpredators' kill people on Mayor DiBlasio time?

MDBT is super.

n.n said...

Class diversity schemes. We have learned nothing.

J. Farmer said...

Black men are about 6% of the US population and commit nearly 50% of the homicides. If that's not a "superpredator," what is?

HoodlumDoodlum said...

Fair enough, Cube, but I would be more willing to take black entertainers who talk about the problems of the black community more seriously if they didn't spend so much time portraying themselves and their communities in the worst possible lights. I mean, when you rap about what a good drug dealer you are, how great of a killer you are, etc, and then complain about how the common people see you and people who look like you as criminals and drug dealers...

cubanbob said...

In 1996 the Clinton's needed the White working class vote. This year, it appears they don't.

FullMoon said...

I dislike Hillary.She lies. "Dodging sniper fire?"

But, this thing of taking ten, twenty, or more year statements as indicative of a person's current philosophy is a bit much. Don't know about you guys, but there are idiotic statements in my past Some I still regret decades later.

Rhythm and Balls said...

This thread could have been interesting but I see it's filled with the predictable scolds yammering about how young black men in Daryl Gates' L.A. did not respond submissively enough to regular abuse, beatings, harassment and the militarization of the P.D.

Go watch Straight Outta Compton, Crackers. Learn.

StephenFearby said...

Comparing this clip of the vibrant 1966 Hillary with video of the slowed and halting 2016 edition is a reminder of the ravages of time...at least for her...in just 20 years.

I can see what Bill admired in her and now they both are well on their track without very much grace to fade gradually into to the sunset.

A pocket full of loot does not fully offset the effects of age-related degenerative issues.

Big Mike said...

But if I'm a black kid that's not in a gang... but I look like a gang member to this white officer, then it's a war on me.

Ah, Ice my friend, did you consider dressing in a fashion that did not resemble gang members? You look like a thug, people treat you like a thug. That's the price you pay for looking like a thug.

Curious George said...

http://www.youtube.com/watch?v=jfX8VhqsZS8&t=1m20s

Birkel said...

"Rhythm and Balls":

I prefer that you embrace your inner bigot. It suits you well. Please, do, tell us all how you think white folks are terrible and deserve racist names directed at them.

Tell us more, please.

Hammond X. Gritzkofe said...

So how's that war on drugs working out? 'Bout like Prohibition?

EDH said...

Wow, she was actually fuckable in that video, in the manner of a stern dominatrix.

Rhythm and Balls said...

Oh no! Names!

Certainly much worse than being targeted for assault, profiling, harassment and a P.D. militarized specifically for your very own racial pleasure.

Please tell us again about the injustice of being called a name, Cracker Barrel. I mean, Cracker Birkel.

Do you try to be square? Usually, deliberately ignorant people aren't proud of how out of touch they are. But you, guys like you, it's like you're the furthest thing from a nerd but almost wish that you could identify with them.

Bizarre. Being from the 1950s doesn't make you as respectable as you think, Birkel. Or is it the halcyon days of the 1850s that today's reactionaries are all about returning to?

DKWalser said...

In 1996, the Clinton's received standing ovations from black audiences for their tough on crime stance. Black community leaders were demanding something be done about the violent crime that was part and parcel of the market for crack (primarily) and other drugs (to a lesser extent). It's fair to say, with 20/20 hindsight, some of the policies implemented in the 90's were wrong headed. (It's also fair to say those policies were mostly right.)

It is unfair to taint the Clinton's as racists for helping to implement policies that were being demanded by black communities, policies that were overwhelmingly supported by black Americans at the time. It is totally fair to point out Hillary's hypocrisy as she tries to benefit from the black lives matter movement by blaming Republicans for the policies passed and implemented during her husband's administration.

Beldar said...

I predict that Professor Althouse won't be able to resist the photo of First Lady Hillary Clinton welcoming Donald, Donald Jr., and Eric Trump to the White House -- with Donald Jr. in shorts.

Henry said...

You live by triangulation; you die by triangulation.

Rhythm and Balls said...

Question. Is Birkel trying harder to be like this or like this?

I think it's William Foster. George McFly was actually decent looking and had a brighter future than the Michael Douglas character. Plus, that character is just wound up enough and resentful enough to be a good identity for Birkel.

AReasonableMan said...

EDH said...
Wow, she was actually fuckable in that video


Potential Clinton voter.

Henry said...

Thanks to Bill Clinton, neither of the two major political parties cares about the civil liberties of the accused. Clinton had the very good excuse that the Democrats got hammered by the Republicans for being soft on crime. Politically he could dispense with that plank of his party and only reap benefits. But we are a vastly poorer culture for it.

Freedom from baseless accusation and the rights of the accused are matters of principle. When matters of principle conflict with pragmatism it is not necessary that principle always win, but it is profoundly important that principle is asserted and defended.

That was another era.

Paco Wové said...

If that's not a "superpredator," what is?

Shhh! You're not supposed to mention that the "moderate Democrat" policies of the 1990's are beyond-the-pale fascist to all Right Thinking Folk in the 2010's.

D. said...

>Certainly much worse than being targeted for assault, profiling, harassment and a P.D. militarized specifically for your very own racial pleasure. <

black male peeps between 14 -30 commit most the crime in this country. you are very proud of this "achievement" of your community.

Fritz said...

Blogger DKWalser said...
In 1996, the Clinton's received standing ovations from black audiences for their tough on crime stance. Black community leaders were demanding something be done about the violent crime that was part and parcel of the market for crack (primarily) and other drugs (to a lesser extent). It's fair to say, with 20/20 hindsight, some of the policies implemented in the 90's were wrong headed. (It's also fair to say those policies were mostly right.)

It is unfair to taint the Clinton's as racists for helping to implement policies that were being demanded by black communities, policies that were overwhelmingly supported by black Americans at the time. It is totally fair to point out Hillary's hypocrisy as she tries to benefit from the black lives matter movement by blaming Republicans for the policies passed and implemented during her husband's administration.


Black lives matter; consistency doesn't.

mccullough said...

Businesses don't want to invest in high crime areas.

How many police would be needed to deter violent crime in these areas? One on every corner 24/7/365 for 20 years?

The police could be polite and courteous to eveyone and be there to deter violence but how should the police respond to violence in their presence? Are the allowed to use violence against a perpetrator who won't surrender after a police command or just plead with them for days on end? Do they get to chase the perpetrator? Do they have to wait to be shot at before shooting back?

If eveyone in the community were given a make work job that paid 30,000 a year as long as they showed up and worked, would that be enough after a generation? If fathers were paid 10,000 a year to be involved in their kids lives, with a bonus of 10,000 to any father married to the child's mother, would that be enough after a generation?



Rhythm and Balls said...

But the real crime of it all is that this doesn't even need to be a partisan matter.

Can't we all just agree that Hillary is a liar, Bill is a bullshit artist, the Republicans were crazy, crime was higher in the 1980s but just beginning a steep, natural decline anyway, violating anyone's civil rights is bad and equally condemnable - even if it tends to affect blacks more, and locking up people for smoking weed is a waste of time and money while decreasing the prevalence of black fathers by about another 1/3rd?

All these things are obvious and worth agreeing to. Now go ahead and just repeal the stupid sentencing abominations and criminality of non-lethal drugs and move on.

None of this even matters within the current political climate because blacks will apparently vote for Hillary no matter how much she uses and abuses them (it's all the Clintons know) since they seem to identify with the fact that no one likes her and yet she still yaps her stupid mouth just to prove that she's still around.

That's all there is to any of this nonsense, at the end of the day.

David Begley said...

Hillary told the truth. For once.

Historic.

Fernandinande said...

"And it's really not stopping the problem."

What problem?

"The Predator" by O'Shea Jackson
You can run but you can't hide from the westside
Night stalker, shit talker, run and tell them Mr L.M.
Nigga with the gat and I'm back
Off the everyday prey that I slay
Rolling with the fo' chase ya through South-Central
Monkey-wrench ho's should know that, she'll get the balzac
...yet more gibberish.

Curious George said...

BLM latest cause in Chicago. "There is outrage after Chicago police shot and killed a 16-year-old boy."

http://www.fox32chicago.com/news/local/121528082-story


Predator? Nah.

Carol said...

I always refer to this site, for my Chicago news.

Buncha cops...what do they know..

Comanche Voter said...

Hey Ice Cube--if the name fits, embrace it.

D. said...

> violating anyone's civil rights is bad and equally condemnable - even if it tends to affect blacks more,<

the "gentle giant of ferguson" rough up an east asian then went on to do battle with a cop. the black community is collectively stupid. yo go kkkarl marx grrrl

Birkel said...

Oh, "Rhythm and Balls" and all its condescending assumptions.

I do enjoy your obligatory bigotry. How does the party of the KKK suit somebody so delicate as you?

holdfast said...

Yes, crime was already beginning a decline in the 1990s. Yet apparently the Assault Weapons Ban was necessary because of that high crime. And yet since it sunset in 2004, crime has continued to decline. Well, at least until the last year or two in certain big cities. . . .

And remember, the brief Bush I-era recession was already over by the time of the 1992 election, but that's not how the media played it, and that was a big help to getting Clinton elected.

So sometimes things aren't over when they are over, ya know?

Crazy Jane said...

R&B speaks truth here. Imprisoning more people for longer terms is "vengeance," not offering non-violent offenders a path back into honorable participation in their communities. After the Crime Bill enactment, black people liked the idea that their neighborhoods might become safer, but over time resentment grew as every black child was viewed as a mortal threat.

Where the blue state model has abandoned African Americans is in schools. It has sent real, significant increases of money into inner-city districts and allowed that money to be hoovered up by connected politicos and local jobs programs instead of being applied to the preparation of children from diverse and often chaotic backgrounds. Only the charter school parents seem to care, and still the "community" votes for the Clinton Foundation.

It will sound like heresy, of course, but if I were a black community leader, I would play Republicans and Democrats off against each other as Likud plays the parties in Israel. Being in the Clintons' pocket is a sucker's game.

Balfegor said...

Re: Rhythm and Balls:

All these things are obvious and worth agreeing to. Now go ahead and just repeal the stupid sentencing abominations and criminality of non-lethal drugs and move on.

I'm fine with all that . . . but the US still has a massive crime problem, and it is not merely disheartening but actually repugnant that politicians and civil servants have decided to attack concerns about crime as racist because maintaining public order is hard and attacking the peaceable citizenry is a lot easier.

I've been in Japan for the past month, and the contrast is remarkable, every day -- when one is stuck in the US, one can sometimes forget just how much convenience, how much of our public space, we cede to rampant criminality. I comment on it regularly, because it still bowls me over, but people walk about in huge, dense crowds with their wallets hanging out of their back pockets, confident that of the thousands of people they brush by anonymously in the crowd, not one is going to rob them. There's no way you could do that in the US. People save spots at outdoor cafes by plopping down $800 smartphones at an open table and heading inside to order a $2 coffee. In the US, we're strongly encouraged not to use our smartphones in public at all, for fear that someone will pluck it from our distracted hands.

And while elevated levels of Black crime do an awful lot to inflate our crime statistics, it's really not all about Black crime. It's about the basic orientation of society. There's a tipping point, and Japan is on one side, and the US is on the other. Their citizenry and police can get by on an assumption that people are basically law-abiding. Ours can't -- criminals are a tiny minority here too, but not nearly as tiny. Their activities have sufficient reach that they cast a shadow over all our public spaces. And what's more, criminals are scary and don't obey the law, so the typical response of our government is to impose burdens on the law-abiding segment of the population just to make it infinitesmally more difficult for criminals to obtain the tools of their trade. Whether it's decongestant medicine for asthmatics, or hunting rifles, or encryption technology.

When I return to the US, I feel the loss of this sense of freedom keenly. And it frankly depresses me that politicians and the civil service, so far from wanting to restore this climate to the US too, is hell bent on attacking as racist and classist anyone who dares suggest that maybe the US has a crime problem that won't be solved by banning decongestants and handguns and electronic security. And large amounts of cash or a pattern of small deposits to your back account. It's insane, really. We don't have to live like this.

jr565 said...

Ice Cube from NWA WAS a super predator. Assuming he wasn't just doing rap to make money. But if he was he certainly was promoting the super predator thugs life. As much of rap does.
As rappers like to say "it's not about a salary its all about reality" .if you promote the thug life and life the thug life, you might get the rep of a super predator. Sucks doesn't it?

MayBee said...

Balfegor-

, so the typical response of our government is to impose burdens on the law-abiding segment of the population just to make it infinitesmally more difficult for criminals to obtain the tools of their trade. Whether it's decongestant medicine for asthmatics, or hunting rifles, or encryption technology.

So incredibly sadly true.

And yes, living in crime-free Japan did make me realize how wonderful it is to not be afraid of crime. To know if you leave something on the train someone will return it.
To be a woman and walk home alone late at night and not be afraid.
It is something I wish we could all experience more. But it made me especially sad for honest, poor Americans, because I think they are affected the most by being constantly surrounded by the criminal element.

MayBee said...

I don't get, though, how 'super predators' is so very racist. I don't picture a black criminal when I hear that term.

Rhythm and Balls said...

Is Burpel being haunted yet again by his delusional false memories of being lynched while a complacent and satisfied police force watches on in approval?

Can anyone imagine the hardships this poor man has had to face?

Rhythm and Balls said...

I'm fine with all that . . . but the US still has a massive crime problem, and it is not merely disheartening but actually repugnant that politicians and civil servants have decided to attack concerns about crime as racist because maintaining public order is hard and attacking the peaceable citizenry is a lot easier.

I've been in Japan for the past month, and the contrast is remarkable, every day -- when one is stuck in the US, one can sometimes forget just how much convenience, how much of our public space, we cede to rampant criminality. I comment on it regularly, because it still bowls me over, but people walk about in huge, dense crowds with their wallets hanging out of their back pockets, confident that of the thousands of people they brush by anonymously in the crowd, not one is going to rob them. There's no way you could do that in the US. People save spots at outdoor cafes by plopping down $800 smartphones at an open table and heading inside to order a $2 coffee. In the US, we're strongly encouraged not to use our smartphones in public at all, for fear that someone will pluck it from our distracted hands.

And while elevated levels of Black crime do an awful lot to inflate our crime statistics, it's really not all about Black crime. It's about the basic orientation of society. There's a tipping point, and Japan is on one side, and the US is on the other. Their citizenry and police can get by on an assumption that people are basically law-abiding. Ours can't -- criminals are a tiny minority here too, but not nearly as tiny. Their activities have sufficient reach that they cast a shadow over all our public spaces. And what's more, criminals are scary and don't obey the law, so the typical response of our government is to impose burdens on the law-abiding segment of the population just to make it infinitesmally more difficult for criminals to obtain the tools of their trade. Whether it's decongestant medicine for asthmatics, or hunting rifles, or encryption technology.

When I return to the US, I feel the loss of this sense of freedom keenly. And it frankly depresses me that politicians and the civil service, so far from wanting to restore this climate to the US too, is hell bent on attacking as racist and classist anyone who dares suggest that maybe the US has a crime problem that won't be solved by banning decongestants and handguns and electronic security. And large amounts of cash or a pattern of small deposits to your back account. It's insane, really. We don't have to live like this.


Surely more guns will solve these problems, as it has for the Japanese.

Michael said...

Balfegor

Alas, Japan is an homogenous society living on a tight island which demands rule following to succeed. I note scores of five year olds streaming down into the subways with no adults in attendance. A score of handgun murders in the whole country. In a year, not a night.
Walking very early one morning in the Ginza I note a man wait for the green hand before he crosses the street. No cars in sight from any direction. Honoring the rules. Works. Love that country.

Gahrie said...

Surely more guns will solve these problems, as it has for the Japanese.

Well, preventing law abiding citizens from owning guns certainly won't.

Why is everyone on the Left so hellbent on becoming serfs again?

MikeD said...

Just another reason for me to change my vote from SMOD 2020 to SMOD 2016!

Michael said...

You could arm every man, woman and child in Japan and the murder rate needle probably wouldn't wiggle. Murder is against the law in Japan. Crossing a street when the red stop hand is up is against the law.

Mr Wibble said...

Why is everyone on the Left so hellbent on becoming serfs again?

Because they don't believe that they will be the serfs. They think that they will be the ones in charge.

Terry said...

If you read virtually any liberal pundit (or listen to any D politician), they will tell you that the GOP has moved so far right that the party that nominated GHW Bush, Dole, GW Bush, McCain, and Romney, wouldn't nominate Reagan in 2016.

Terry said...

R&B wrote:
Surely more guns will solve these problems, as it has for the Japanese.
No, no, no, R&B. Different nations require different solutions. The answer in the US is to make abortion more available in urban areas. I believe Ruth Ginsberg was the first liberal to openly embrace this plan.

William said...

In the 3/14 issue of the New Yorker, there was an article about General Butt Naked. General Butt Naked--that was the nom de guerre he chose for himself--was a minor Liberian war lord. He went before the Truth & Rconciliation Committee in that country. He confessed to recruiting children and then forcing those children to murder other children. General Butt Naked claimed to have murdered thousands of children, but he writer of the article said that was an exaggeration. The real number was probably less than one hundred. He did, however, practice cannbalism. That wasn't a lie. General Butt Naked claimed that just as he was about to murder a little girl, Jesus appeared before him and told him to stop his evil doings. The General followed the advice of Jesus. He sincerely repented his evil ways. He founded a Chrisian home where some of his followers now live. The good General accepts outside funding to pursue this project. The Truth & Reconciliation Committee accepted his sincere apology for murdering dozens of children and making dozens of other children murderers. He has the distinction of being the only Liberian to have apologized and repented for any of the grotesque crimes committed during that country's civil war. His apology and repentance have been accepted by the country at large.........In that same issue of the New Yorker, there was a sympathetic article about the founders of the Black Lives Matter movement. They are less forgiving of George Zimmerman and Darren Wilson........I wonder about the juxtaposition of those two articles. I wonder if the editor got the same take away from those articles that I did. .

Balfegor said...

Re: Rhythm and Balls:

Surely more guns will solve these problems, as it has for the Japanese.

Oh ha, ha, very droll. A brilliant riposte sirrah. Ha. Ha.

But Michael's right -- Japanese society is not orderly because people don't have the opportunity or the motive to commit crimes. They have, like people everywhere else! But that's my whole point: they have the means and motive to commit crime on a flagrant scale. If someone wanted to commit murder, the police probably couldn't do much to stop him. But normal human beings -- civilised human beings, at any rate -- don't commit murder just because they have access to a gun. Or a knife. Or poison or whatever. That's the how civilisation works.

This is not something innate about the Japanese -- even without bringing up the War we can just remember the riots and disorder after the Great Kanto earthquake in 1923. They had a violent and lawless fringe too. But they have suppressed it, generation after generation, to build habits of orderliness and self-control.

By slow prudence to make mild. A rugged people, and through soft degrees. Subdue them to the useful and the good.

Meanwhile, our government has just decided to give up. Because trying to improve things would be racist.

mccullough said...

Violent crime increased 10% in the last year across the 25 most populous cities. Young black males are unusually violent compared to Latinos, whites, and Asians. The homicide rate among Japanese Americans is the same as among Japanese. Homicide rate among Swedish Americans is the same as Swedes. The Scots Irish have the highest rate of violence of white ethnics in the US. Even the women are more violent. West Virginia has a high violent crime rate for a state that is 93% white. Culture matters

I Callahan said...

not offering non-violent offenders a path back into honorable participation in their communities.

Good Lord, I am so weary of tripe like this. Libertarians keep talking about these poor "non-violent" criminals who are in jail in such huge numbers, but when I ask who they're talking about, I get non-answers at best; mostly ad-homs. "Non-violent" offenders are as numerous as bigfoot sightings - I hear about them all of the time, but no one can product any evidence that they really exist.

"Non-violent" offenders are not in jail. They either learned their lesson, or became violent offenders. Which is why they're in jail.

I Callahan said...

Surely more guns will solve these problems, as it has for the Japanese.

Out of all of what was posted on that, that's all you could come up with? Why does anyone bother anymore.

Crazy Jane said...

As usual, Balfegor makes sense.

I once saw a Japanese tourist, part of a group, near the Market Street cable car turnaround in San Francisco. A thick wad of American currency was clearly visible in his shirt pocket. His tour guide was nowhere to be seen, and neither of us spoke the other's language. So I tried with gestures to indicate to him that he really needed to move that money to a pants pocket or his backpack. He didn't understand, and I certainly didn't want to do the job for him. I'm pretty sure he thought I was crazy.

I do resent being carded and having my identity entered into a federal database when I buy Sudafed. If the government decided to collect all the guns, my brother would hand over our grandfather's .22 rifle, but he and it are not the problem.

Brando said...

There simply is such a thing as a superpredator, and Ice Cube either knows this and is deliberately lying to stay on the good side of his leftist fans or he is a complete idiot. A disproportionate number of crimes are committed by a very small number of offenders, and when crimefighting tactics moved towards more arrests and holding these people for lesser crimes, the overall crime rate dropped significantly because those predators were off the street (even temporarily). A guy who breaks into a home and will assault the residents is not a "one time" miscreant who went astray--it's someone with a long list of criminal behavior who just elevates until he's doing major felonies.

And if you're afraid that the cops are going to mistake you for a superpredator, then maybe it's a good idea not to voluntarily decide to dress, act or talk like one. Just like if you don't want people to think you're a white supremacist, you may want to avoid dropping racial epithets and wearing swastika tattoos (even if you were doing those things to be ironic).

I'm fine with talking about policing reform--surely our crimefighting isn't perfect and anything that might make it more effective and less destructive to unfortunate innocent people is desirable--but this anti-police demagoguery and race-baiting is not going to lead to anything good. And it's fine for a wealthy guy like Ice Cube to preen about it, but a lot of people who live in those slums have to face the criminals and cops regularly in less pleasant circumstances.

Ann Althouse said...

"I once saw a Japanese tourist, part of a group, near the Market Street cable car turnaround in San Francisco. A thick wad of American currency was clearly visible in his shirt pocket."

It's possible that it was an anti-robbery trick. How do you know it was a wad of real bills? It could be a way to keep pickpockets and robbers away from his real wallet — a $5 bill wrapped around fake bills or just a bunch of $1 bills amounting to only $10 or $20. It could be a good idea to keep a pack of low denomination bills where you can reach them for tips or panhandlers so you never access your real wallet/money belt where thieves can see it.

Robert Cook said...

The "superpredators" are the well-fed and well-dressed (mostly) men who reside in the corner offices of our Too Big To Fail Big Banks, the Wall Street Financial Institutions, and corporate boardrooms. These superpredators go home to sumptiously appointed mansions on resplendent estates, well-protected from any possibility of seeing the ruin they bring and have brought to so many people's lives.

Brando said...

"The "superpredators" are the well-fed and well-dressed (mostly) men who reside in the corner offices of our Too Big To Fail Big Banks, the Wall Street Financial Institutions, and corporate boardrooms. These superpredators go home to sumptiously appointed mansions on resplendent estates, well-protected from any possibility of seeing the ruin they bring and have brought to so many people's lives."

That's some neat bit of irrelevancy there. I could talk about how the real "suprepredators" are the extreme couponers who always seem to be in front of me at the store, and it would have about as much to do with this discussion as Wall Street Bankers.

Robert Cook said...

"Ah, Ice my friend, did you consider dressing in a fashion that did not resemble gang members? You look like a thug, people treat you like a thug. That's the price you pay for looking like a thug."

For too many people in this country, and too many police officers, just having dark skin is sufficient to "look like" and to be treated like a thug.

Tank said...

Ann Althouse said...

"I once saw a Japanese tourist, part of a group, near the Market Street cable car turnaround in San Francisco. A thick wad of American currency was clearly visible in his shirt pocket."

It's possible that it was an anti-robbery trick. How do you know it was a wad of real bills? It could be a way to keep pickpockets and robbers away from his real wallet — a $5 bill wrapped around fake bills or just a bunch of $1 bills amounting to only $10 or $20. It could be a good idea to keep a pack of low denomination bills where you can reach them for tips or panhandlers so you never access your real wallet/money belt where thieves can see it.


In my normal suburban life, I just keep my money in my wallet. When I am on vacation in unfamiliar places, or generally, in places warranting concern, I always have some cash separate so that I never need to take my wallet out in public. The big city guides in Europe all warn travelers about pickpockets.

Curious George said...

I pity the fool that calls me a predator.

William said...

Which is more traumatic and stressful--losing money to a predatory lender or losing money to a predatory armed robber?

Robert Cook said...

"Which is more traumatic and stressful--losing money to a predatory lender or losing money to a predatory armed robber?"

That probably depends on who takes more of your money, who does greater long-lasting damage to your life. In other words, the predatory lender.

cubanbob said...

Robert Cook said...
"Which is more traumatic and stressful--losing money to a predatory lender or losing money to a predatory armed robber?"

That probably depends on who takes more of your money, who does greater long-lasting damage to your life. In other words, the predatory lender.

4/14/16, 8:17 AM"

I hope you do realize just how stupid that comment of yours is.

William said...

I have known plenty of people who have lost plenty of money of Wall Street. There are varying amounts of regret and remorse, but you walk it off. I have also known some people who were victims of violent crimes. They suffered catastrophic injuries which they were never able to to walk off. Not ever.

Robert Cook said...

William:

Your comment amounts to mere anecdote. Statistically, and historically in this country, far more people are harmed far more greatly by the crimes of the financial institutions than by those of street criminals.

Brando said...

"For too many people in this country, and too many police officers, just having dark skin is sufficient to "look like" and to be treated like a thug."

While I believe for some police officers racial bias plays a part in their assumptions about people they interact with, this is way overblown and race is nothing near to the determining factor that language, dress, age, gender and actions are. If you're telling me a 60 year old black church lady who talks clearly and interacts normally with a police officer is going to get worse treatment than a 19 year old white guy dressed like Tupac, speaking in street patois and making sudden movements, then I have a bridge to sell you. It doesn't justify racial bias where it actually exists, but it is miniscule compared to almost every other prejudice a policeman may (justifiably, in such circumstances) hold.

"That probably depends on who takes more of your money, who does greater long-lasting damage to your life. In other words, the predatory lender."

Really? You think a violent assault is less traumatic than being bamboozled out of investment money? I hope for your sake you never have to experience the former and realize how naïve that sounds.

Brando said...

"Statistically, and historically in this country, far more people are harmed far more greatly by the crimes of the financial institutions than by those of street criminals."

I don't know--the people most harmed by financial criminals are the very wealthy, and by leftist logic they are most able to take the hit as they do on their tax rates and are less in need of protection from financial dealers (hence "qualified investor" exemptions).

But I'll venture that poor people with no money to invest care a bit less about the Bernie Madoffs of the world than they do that pack of thugs hanging out on the corner.

Owen said...

Balfegor: great comment about Japan. Culture matters. Thomas Sowell has written well on that.

Robert Cook said...

"...the people most harmed by financial criminals are the very wealthy...."

No, the people most harmed by financial criminals are everybody but the very wealthy. One does not even have to have money invested in Wall Street to be harmed by their crimes. Their crimes injure whole communities, impoverish millions, drive the wars that kill untold numbers and destroy societies. I suggest you start looking at the bigger picture of why things happen in the world as they do.

Brando said...

"No, the people most harmed by financial criminals are everybody but the very wealthy. One does not even have to have money invested in Wall Street to be harmed by their crimes. Their crimes injure whole communities, impoverish millions, drive the wars that kill untold numbers and destroy societies. I suggest you start looking at the bigger picture of why things happen in the world as they do."

Interesting--you just made a great argument for why the Left's "beat up the rich" arguments fall flat--the poor tend to be the ones most harmed by losses at the top. Maybe you're re-thinking your positions?

Peter said...

"How many police would be needed to deter violent crime in these areas? One on every corner 24/7/365 for 20 years?"

Twenty months, perhaps. If the policing was well done, and criminal courts were willing to deliver serious sentences for serious crimes.

In a place where few violent crimes are ever solved, where witness intimidation derails convictions, and where more than a few of those who are convicted receive trivial sentences from brain-dead judges, everyone understands that the government's law is not enforced, that the real law of the streets is administered, harshly, by the ruling gangs, and only fools expect police can or will protect them.

In such places many violent crimes can't be solved because no one dares to snitch. And why would you put yourself and your family at risk in a world where police can't or won't protect you, where you're marked for death if you testify, and where, even if the accused is convicted, the perp may be back on the street (and gunning for you) in less than a year?

Intensive, quality policing can move the equilibrium away from this lawless state in far less than 20 years, but, weak or half-way measures are just not going to do it. BUT this remains a very high risk strategy for a politician, as not only are accusations of racism a certainty, but, given the reality that some police are corrupt and far more are either lazy or incompetent or both, the possibility of an unjustified shooting can't be eliminated.

It's not as if most people who live in these neighborhoods are criminal, they're not, many are just trying to get by. And arguably it is an outrage that for those who must live in such places, defensible space and the right to use public space with reasonable safety is all too often unobtainable.

Fernandinande said...

mccullough said...
Culture matters


Pinker -> Genes matter more, which is why "The homicide rate among Japanese Americans is the same as among Japanese. Homicide rate among Swedish Americans is the same as Swedes."

Robert Cook said...

"Interesting--you just made a great argument for why the Left's "beat up the rich" arguments fall flat--the poor tend to be the ones most harmed by losses at the top. Maybe you're re-thinking your positions?"

No. The crimes of the great financial and corporate institutions most often cause losses at the bottom and in the middle; when the losses do occur at the top, they are swiftly transferred downward.

Brando said...

". . . .when the losses do occur at the top, they are swiftly transferred downward."

Exactly my point. So why would any income distribution scheme of taking heavily from the rich not have awful effects for the people who work for them, purchase from them, etc.? Why do you think this "crap flows downhill" argument works only for financial crimes and not for government redistribution schemes?

Dan Hossley said...

The left taught us that it was unacceptable to use a "harsh" but otherwise accurate description. It's pretty funny to see the left use the vocabulary of the left against the left. I'm enjoying this one.

HoodlumDoodlum said...

One funny thing: the only people using "superpredator" or a similar classification these days are campus Leftists who assert that there's a sexual assault epidemic at colleges today and, per "documentaries" like "Hunting Ground" it's largely due to superpredators. So, you know, let's think about how the term & idea are actually used today, too.

Char Char Binks said...

How dare anyone call Ted Bundy a murderer!? He was a citizen, for gosh sakes!

Michael said...

Robert Cook
"That probably depends on who takes more of your money, who does greater long-lasting damage to your life. In other words, the predatory lender."

Please define "predatory lender."

And what would the counter-party, the borrower, be called?

Robert Cook said...

"And what would the counter-party, the borrower, be called?"

A sucker and a victim.

Michael said...

Robert Cook

So as victims they were forced to borrow? Or suckers because they did not understand the difference between floating and fixed rates? I am confused as to how a borrower is victimized by a lender. I am not talking about the rare shyster or loan shark or "finance company" but of bank lending the type you appear to be exercised about.

I am puzzled by your genuine intelligence falling so wide of the mark on this topic.

Brando said...

"Please define "predatory lender.""

Here's how it works. If you're a lender and you don't make a loan to a person with poor credit and no assets, you're a discriminatory bastard. If you do make a loan to such a person at the terms necessary to account for your risk, you're a predatory lender. And if you make loans to such a person at terms that don't adequately account for your risk, you're an unsafe and unsound business that risks the collapse of the financial system and you should be shut down.

In other words, don't be a lender.

Brando said...

"So as victims they were forced to borrow? Or suckers because they did not understand the difference between floating and fixed rates? I am confused as to how a borrower is victimized by a lender. I am not talking about the rare shyster or loan shark or "finance company" but of bank lending the type you appear to be exercised about."

Of course they were forced to borrow! Just like poor people are forced to buy overpriced products and poor people are forced to work for someone who isn't willing to pay them higher wages. Remember the poor have no agency and the people who deal with the poor (in most cases who aren't rich themselves) are predators who should be in the charity business.

Sammy Finkelman said...

The term "super-predators" which is probably a good word for some people - although maybe not for all the people affected by the longer sentences in the crime bill - that was Hillary's lie in 1994 - I don't think that bill even contaioneda "three-strikes" clause - that was in various state laws - is a term that Hillary was applying to people at the point of conviction, not something that could be used by police.

There are people, or can be people, who do nothing but rob and kill and assault.

Owen said...

Brando @ 10:59: "Here's how it works. If you're a lender and you don't make a loan to a person with poor credit and no assets, you're a discriminatory bastard. If you do make a loan to such a person at the terms necessary to account for your risk, you're a predatory lender. And if you make loans to such a person at terms that don't adequately account for your risk, you're an unsafe and unsound business that risks the collapse of the financial system and you should be shut down.

In other words, don't be a lender."

Perfect statement. It's good to know that "disparate impact" can power the Social Justice program in all sorts of new endeavors. That old "red-lining" rhetoric was just the beginning. Fun with math!

Sammy Finkelman said...

Michael said...4/14/16, 10:57 AM

I am confused as to how a borrower is victimized by a lender.

Predatory lender is probably a bad term. Now in some cases, brokers or others qualified people for loans by filling out forms for them almost.

The basic thing that went wrong is that some people thought the banks knew what they were doing. The bank wouldn't make a loan unless they had an appraisal that a house was worth such and such. People assumed, and were even told, that that was a fixed value. They still are told that. You have this claim that people bought more house than they could afford. No, they spent too much for the house, irrespective of whether or not they could afford it.

People assumed that when their rates went up, they could refinance at about the same low rate they started with (since people weren't told and didn'tt understand that the market rate of interest could change) by which time the calue of the house would have gone up, and they pocket the profits, and that if things went wrong, and their income dropped, they could always sell - but they couldn't because the value of the house dropped! Housing prices supposedly couldn't drop, because nobody would ever sell at a loss. But houses were sold at a loss because of forced sales, otherwise known as foreclosures.

Michael said...

Sammy Finkelman

Again, the 'victims' were the architects of their own problems. I look at it this way. The borrowers got the money. They took the money and either bought a new house, refinanced an old one with money-out and used the proceeds to buy bass boats or new cars or paid for college tuition, But in all cases, every single case, the borrower got money. Which she then proceeded to spend. There was no whining about getting the money, no crying about the interest rate, no accusations of being cheated, no calling their congressmen. No. They had the fucking money and they spent it. The rest came in when, oh golly, they had to pay it back on the terms they agreed to when they took the fucking money. That is when the whinging began in earnest. Because they did not want to do what they agreed to do.

The technical term for this predicament is tough shit.

mikee said...

If you want to hear Hillary say some really amazing things, wait for her inaugural address and her first State of the Union speech.

Unchecked by any further likely restraints upon her actual beliefs, Hillary will tell us all exactly what she thinks. And then God help us, for nobody else can, or will.

Eleanor Iselin will look like a charming old lady compared to President Hillary.

Sammy Finkelman said...

Brando said...4/14/16, 10:59 AM

"Please define "predatory lender."

Here's how it works. If you're a lender and you don't make a loan to a person with poor credit and no assets, you're a discriminatory bastard. If you do make a loan to such a person at the terms necessary to account for your risk, you're a predatory lender. And if you make loans to such a person at terms that don't adequately account for your risk, you're an unsafe and unsound business that risks the collapse of the financial system and you should be shut down.


Actually the way in which risk was evaluated didn't have too much to do with the truth. There was a formula that didn't even take account of take home pay (different states have different income taxes) but only gross pay. don't tell me a 30-year mortgage is based upon income. That can carry a lot of people past retirement age. The 30-year mortgage relies on the fact that after a whle aperson will have equity in the house.

The whole formula for creditworthiness was wrong anyway, because the only thing that mattered was a person's credit score, which reflects the desire to make payments and the ability to judge their income and expenses - and their current income, and that mostly mattered only for the first year. (Now one thing that happened was, there were more and more adjustable rate mortgages but whether someone could make the payments was evaluated only for the first year or so.)

But anyway, remember:

These were mortgages.

The houses are supposed to be collateral.

Nothing really should matter but the value of the house. (and minimal honesty)

The problem was, the banks had that wrong. Because the value of the house wasn't a fixed quantity.

Now, more and more buyers were being "qualified" (it doesn't matter that some of the old standards were irrelevant) and that enabled housing prices to keep rising. They were really pushing it in the end. Forty year mortgages. What stopped it was the Federal Reserve Board raising interest somewhat in the mid-aughts. The housing market froze around July, 2007, and things crashed about a year later.

Sammy Finkelman said...

Michael said...4/14/16, 11:29 AM

But in all cases, every single case, the borrower got money. Which she then proceeded to spend. There was no whining about getting the money, no crying about the interest rate, no accusations of being cheated, no calling their congressmen. No. They had the fucking money and they spent it. The rest came in when, oh golly, they had to pay it back on the terms they agreed to

In some cases they were told, verbally, that they could never run into trouble because the terms they agreed to (if what we are talking about is the interest rate on a mortgage, and their monthly payments adjusting upward) would never come to pass, because they could re-finance.

Sammy Finkelman said...

There were also people who were put into mortgages at higher interest rates when they could have gotten, had they only known, a mortgage at a lower interest rate, and those banks who did that are the "predatory lenders"

Michael said...

Sammy Finkelman

So those who were victims of predatory lenders did not bother to see if there were other lenders who could offer a cheaper rate for the money they were borrowing? I wonder if laziness and stupidity are in any way correlated. Would a car dealer be predatory if he charged more than his competitor? Or would he come down on his price when confronted with a competitive offer?

Had they only known!!

But in every single case the borrowers took the money and spent it.

Robert Cook said...

So much equivocating and faux confusion about what "predatory lending" might possibly be. An answer is readily available.

Of course, predatory lending is just one part of the crimes of the great financial institutions. For those who might pretend to further ignorance--"What corporate crimes?"--Answers to this question are also readily available. They're all around us, in the present day and reaching back the length of the life of our nation. Now, the criminals have global reach, and their crimes are global, (even more so than they used to be).

Goldman Sachs, for instance, just agreed to pay $5 billion for their part in the 2008 financial crime of the century, (so far). Unfortunately, but typically, no one will go to prison.

Matt Taibbi has published much in recent years about the crimes of the financial and corporate institutions. Interested parties may search out his articles and books. He is only one of many who have written about financial crimes of recent history. There also the wars that are driven by corporate prerogatives, the poisoning of the environment, the capture of governments, etc., etc.

In comparison with the corporate and financial titans who are lionized by the financial press, inner city thugs are a minor problem to the world at large, (as nasty as they are to the those unfortunate enough to live in their vicinity).

Robert Cook said...

Economist Richard Wolff has many lectures on YouTube that are also worth seeing. Unlike most economists, he is quite entertaining as he relays the ugly truth.

Michael said...

Robert Cook

I see that your go-to for financial information is Matt Taibbi. LOL. Really, dude, you can do better. Start with the crazy idea that there are two people in every trade.

Just as you see bankers hanging from lampposts in your dreams, I see the OWSers operating without banks or bankers.

Michael said...

Robert Cook

And, LOL again, Richard Wolff is as entertaining a Marxist "economist" as any that has drawn breath. Hope he is the Treasury Sec. under Bernie.

Brando said...

I know "predatory lending" is a term of art for lenders who loan at unfavorable (or VERY unfavorable) terms but remember no one is forced to accept that deal. The only time it's truly "predatory" is if there's fraud involved and you didn't fully disclose the terms. But if the only way I give you $20 today is if you agree to pay me back $50 next week, I'm no more a predator than someone who only agrees to pay a nickel for you to mow his lawn. You have every right to walk away from the deal.

If your beef is that borrowers with bad credit can't catch a break, then I am sympathetic but no way that's a private lender's fault just because the only deal he can offer is a pretty bad one. Instead you should be pushing to create a charitable group that extends more favorable loans to such people or just gives them grants. But until you're throwing your own money away on risky loans I don't want to hear about how awful payday lenders and the like are.

Sammy Finkelman said...

Rhythm and Balls said...4/13/16, 7:42 PM

Can't we all just agree that...crime was higher in the 1980s but just beginning a steep, natural decline anyway

That only started arond 1990, before the crime bill, however, and it wasn't natural, but just not caused by deliberate government policy, unless you mean the policy crimnalizing the sale of IV needles, which went back to about 1978. It began reducing crime when the AIDS virus migrated in the IV-drug user community. This was not only the criminals that HIV eliminated directly, but it enabled police and prosecutors to catch up, ushering in a virtuous cycle. Or did you think the cause of the steep drop in crime in the 1990s was Roe v Wade? Then why was it so much steeper in New York City?

Sammy Finkelman said...

migrated into the IV-drug using community. Circa 1988, but it took a while for heroin addicts to get sick.

Bruce Hayden said...

Overall, I don't buy into the idea of predatory lending. In the case of mortgage lending before the bubble burst (and, arguably, thanks to the Obama Administration in the future), the problem was the federal government pushing lending to a lot of unqualified borrowers. They didn't have the income to support the houses they were buying, nor the stability. The left got the idea that since home ownership was indicia of being middle class, if they could get a lot of poor people into their own homes, they would miraculously become middle class. (And, yes, the CRA, along with Clintonistas at Freddie and Fannie, and esp. Barney Frank, were behind this). It, of course didn't work, and the bubble in housing prices just made things much worse. Talked to people at DR Horton (home builders) recently, and they were regaling me with tales from that time. They had lines for every house they could complete, and the prices kept going up and up and up. Until they didn't.

I have no more sympathy with claiming that payday lenders and the like are predatory. Interest his high, because default rates are high. And, if you don't charge high interest when the chances at default are high, you will soon be out of business. If you deny their clientele payday lending, they move to pawn shops. It is a cut throat business, with participants competing almost viciously for customers. Which means that profits are low, thanks to that high default rate, despite the high interest rates. One of the guys over at Volokh has written about this extensively.

Sammy Finkelman said...

mccullough said: Culture matters

Fernandinande said...Culture matters

mccullough said: Pinker -> Genes matter more, which is why "The homicide rate among Japanese Americans is the same as among Japanese. Homicide rate among Swedish Americans is the same as Swedes."

That's culture too. If genes mattered, then the crime rates among different groups - and why just the crime rate, why not also the marriage and unwed motherhood rate rate, too? - should stay the same from generation to generation and community to community and it doesn't.

Where are the Irish criminals of yesteryear? Are the African Americans of the 1920s. the same as those of the 1960's and those of the 1960s and 1970s the same as the
1990s and later and do you find the same thing in North Carolina as you do in Chicago? And why did Jamaicans have a low crime if they came to the United States but a much higher crime rate if they came to England?

Bruce Hayden said...

Goldman Sachs, for instance, just agreed to pay $5 billion for their part in the 2008 financial crime of the century, (so far). Unfortunately, but typically, no one will go to prison.

GS isn't/wasn't involved in the sort of predatory lending that most talk about when they use that term. Their clientele is not the poor and downtrodden, but rather, the rich and pension funds. Mostly deal with "accredited investors", as well as institutions, and that is the purpose of defining "accredited investors" - they are people who won't starve if their investments go bad.

Bruce Hayden said...

That's culture too. If genes mattered, then the crime rates among different groups - and why just the crime rate, why not also the marriage and unwed motherhood rate rate, too? - should stay the same from generation to generation and community to community and it doesn't.

The problem there is that part of the problem (maybe much of it) in regards to marriage and unwed motherhood rates is that they are, to some extent, driven by economic incentives by the government. If women don't need men in their lives financially (because the government is supporting them), then some of them are not going to marry the fathers of their children. You get more of the things that you subsidize, and less of those you penalize. We are into maybe the third generation of this (counting back to LBJ's Great Society, which really got this going). So, each generation, more and more women slip into this, and their daughters, never having seen men in their lives (except to impregnate them), tend strongly to follow their mothers. Which is probably why the poorest among us seem to slip further and further into this dynamic, generation by generation. Black families were already under stress when the Great Society was enacted, which is maybe one reason that it is worse with them now, plus the economic damages of slavery followed by a century of Jim Crow, maybe tripling the out-of-wedlock birthrate of that community over the last 50 years (from maybe 1/4 to 3/4).

Sammy Finkelman said...

Bruce Hayden said...4/14/16, 12:51 PM

Overall, I don't buy into the idea of predatory lending. In the case of mortgage lending before the bubble burst (and, arguably, thanks to the Obama Administration in the future), the problem was the federal government pushing lending to a lot of unqualified borrowers.

What do you mean unqualified? The standards are about 85% nonsense.

They didn't have the income to support the houses they were buying,

First of the all, not the house. That is again the fallacy of the fixed price.

Usually they did have rhe income, or the question of income was ignored, and they were charged a slightly higher rate.

The income to support payments, however, was only measured against the first years payments, even when the mortgage was scheduled to reset at a higher rate, and the formula was so stupid it didn't take account of that. It didn't take account of state income taxes, either.

The main thing the loans were based on was the re-sale value of the house. That's why they are called mortgages. If the true soundness of the loan was not based on the re-sale value of the house, how could you give a 30-year mortgage to a 60-year old man? There was and is no such age discrimination.

If a mortgage was limited to two thrds of the value of the house then you wouldn't have problems, but if you did that, housing prices would drop, because, you see, there is a permanent bubble.

What mortgages relied on, again, was the re-sale value of the house. They were not credit cards. The re-sale value, however, was not stable, but was assumed to be either stable or a floor. That was the problem.

If a person has equity, the mortgage could still be good even if the price dropped somewhat.

Talked to people at DR Horton (home builders) recently, and they were regaling me with tales from that time. They had lines for every house they could complete, and the prices kept going up and up and up. Until they didn't.

Above all, there was a denial that a housing bubble was even theoretically possible.

What there wasn't, was price discipline among the lenders. The key issue isn't how much someone could afford to pay, but what the house could be worth in several years. Even people with money to pay threw away the keys.

Appraisals simply failed to take into account the fact that housing prices could be in a bubble. They never had. They still don't. They are actually in a bubble right now, still. Just a less inflated bubble than in 2007. If the percentage of equity required to buy a house went up, it would deflate.

Sammy Finkelman said...

claiming that payday lenders and the like are predatory.

Payday lenders don't exist in New York, and nobody misses them. They find other ways to borrow. Maybe they don't pay some bills.

Most of the pay day loan borrowers actually don't get trapped, but the business model is dependent on people being trapped. It happened to a lot of soldiers.

If you deny their clientele payday lending, they move to pawn shops.

Which are a better deal.




Sammy Finkelman said...

Technically, I think, "predatory lending" is lending money to someone who could get a better deal, if only they knew. sometimes it might be steering people into aloan for which the steerer gets a higher commission or percentage.

Sammy Finkelman said...

It is U.S. government policy, and has been since at least the 1930s, to inflate housing prices, and they are inflated, right now. The 30-year mortgage was one method of inflating them.

Michael said...

Sammy Finkelman

Not sure that the intent of the policy of encouraging home ownership is the same as inflating housing prices even if the effect of the former is the latter. It is worse than that. The government as led by lefties has conflated home ownership with middle class values and has assumed that either follows from either when in fact ownership flows from the values of the middle class. A home delivered to the underclass free of charge does not change their values, work habits, savings etc.

Money is currently very very cheap but is not having the desired effect on the overall economy as seen by the weakening first quarter numbers. The FOMC will not raise rates this month or next and possibly not until the end of the year.

For people who live in high property tax cities the low cost of money should encourage them to consider giving up the advantages of city living, if any, for a suburb where the taxes are much lower. In Atlanta it would not be uncommon to pay $20,000 per year in property taxes while an adjoining country would have taxes on the same size house at $5,000. That $15,000 in property tax savings can be used to borrow $200,000 at today;s 30 year self amortizing rates.


Smilin' Jack said...

"I once saw a Japanese tourist, part of a group, near the Market Street cable car turnaround in San Francisco. A thick wad of American currency was clearly visible in his shirt pocket."

It's possible that it was an anti-robbery trick. How do you know it was a wad of real bills? It could be a way to keep pickpockets and robbers away from his real wallet — a $5 bill wrapped around fake bills or just a bunch of $1 bills amounting to only $10 or $20. It could be a good idea to keep a pack of low denomination bills where you can reach them for tips or panhandlers so you never access your real wallet/money belt where thieves can see it.


Or it could have been an undercover cop looking to catch pickpockets and robbers.

Haha--JK. Cops aren't going to waste their time on trivia like that when there are dope-smokers to catch.

Robert Cook said...

"I see that your go-to for financial information is Matt Taibbi."

No. He is a good source of reporting on the great crimes of the financial institutions.

Peter said...

"The basic thing that went wrong is that some people thought the banks knew what they were doing. The bank wouldn't make a loan unless they had an appraisal that a house was worth such and such."

Corrupt appraisers existed then, and exist now. There will be incentives for appraisers to inflate appraised values for as long as lenders stop using appraisers who come in too low.

BUT the root cause remains a secondary market for loans that seems unable to correctly price risk.

Consider, for example, that one can still qualify for a larger loan if the loan is an ARM than if it is fixed-rate, because borrowers are almost always qualified based on the initial rate, and not on the worst-case rate (if the ARM adjusts to its cap). Yet an ARM obviously presents a risk (interest rates may rise) that a fixed-rate loan does not and, while qualifying borrowers for the worst case is probably excessive, qualifying borrowers for some amount greater than the initial rate would seem only prudent.

Yet the mortgage industry does not do this, perhaps because Fannie and Freddie will buy the loans anyway and, if the lender intends to sell the loan anyway, then why would the loan originator care about risk? Of course, the loan buyers should care, but, with political pressures and an implicit guarantee of a government bailout, they don't care so much either.

Not that the private mortgage market did much better. So long as pension plans and other fidiciaries were willing to buy CDOs that were paying a tiny premium over treasuries (even though the CDOs were full of low-quality loans), mortgage originators could sell their loans to the investment banks that bundled them into the CDOs.

And why didn't the pension plans care? Because the CDOs were rated "AAA" by Moody's and, even though Moody's income comes from those it rates (thus creating an incentive to please those who are being rated by giving them a high rating), the highly paid financial experts running these funds apparently couldn't be bothered to look beyond the "AAA" rating to assess the quality of the loans inside the CDOs they were buying.

Fiancial services supposedly attracts the best and brightest, yet sometimes it sure doesn't look that way. And sometimes Adam Smith's Invisible Hand doesn't work so well, especially when those who make poor decisions don't have to accept the full consequences of having done so.

And, finally, it's hard to feel too bad about the borrowers. Yes, it was possible to get trapped in a high-rate mortgage which you couldn't refinance because the value of the property had gone down and you couldn't afford to bring enough money to the re-fi closing to qualify for a new loan. BUT plenty of borrowers took out those option-ARMs (in states which permit negative amortization loans) and paid perhaps one percent interest (about $420./month for a $500,000. loan) to live in a nice house, and then rolled the loan over a few times when the loan threatened to reset but the value had gone up. And, well, eventually the value went down and the loan reset to a punitively high default rate and they got foreclosed. But, they usually got to live in a much nicer place than they could actually afford for many years, and, when this fiancial house-of-cards finally collapsed it was others (lenders, banks, taxpayers) who took the hit.

(And, yes, Bernie I realize you don't understand this (and even if you did you couldn't distill it into a bumper-sticker-size quote your followers could understand.)

Robert Cook said...

"And, LOL again, Richard Wolff is as entertaining a Marxist 'economist' as any that has drawn breath."


Why the quote marks around "economist", Michael? Wolff is an economist...he's even credentialed, by gosh!