GM Ramps Up Risky Subprime Auto Loans To Drive Sales; Taxpayers Still Own 26.5% - Investors.com

“President Obama has touted General Motors (GM) as a successful example of his administration’s policies. Yet GM’s recovery is built, at least in part, on the increasing use of subprime loans. . . . Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime. GM Financial auto loans to customers with FICO scores below 660 rose from 87% of total loans in Q4 2010 to 93% in Q1 2012. The worse the FICO score, the bigger the increase. From Q4 2010 to Q1 2012, GM Financial loans to customers with the worst FICO scores — below 540 — shot up 79% to more than $2.3 billion. The second worst category, 540-599, rose 28% from about $3.4 billion to $4.3 billion.”

At least it's a private company that's not risking our money...

 

Because ALL employment dramatically was reduced starting in 2008. Federal levels were hardly impacted, in fact, federal levels were +10% by 2010 by nearly 200,000 positions were the private sector was down by almost 8 million. That graph doesn't paint a clear picture; it's biased.

And it's supposed to suggest that Obama is has something to do with the number, but this was not a reduction in the size of gov't or austerity measures, this was a reduction in the amount of jobs in the gov't (mainly at state/local), due to budgeting issues; local and state gov'ts actually have to pass a budget and use real money to pay employees.


and I don't care if he's spending at the slowest rate, it still doesn't excuse the fact that it's an issue, and a problem. Obama's budgets, which always get voted down, have entitlement spending over 50% of the federal budget. I almost wonder if that's a ploy to produce stats on "slowest spending ever." We currently spend over 2 billion dollars a day, and we don't take that much in.



cities in California aren't going bankrupt because they they take too much in in taxes, it's because they promise too much in entitlements. Slowing the increase in the amount of spending isn't good enough when you're throwing it all away...

 

That's actually all true - I avoid the Daily Kos (angry left) like I avoid the Rush Limbaughs and Glenn Becks of the world (angry right).

Nice!

See, Cord, we're really on the same side of most issues. The US government should not be the backstop of an auto company any more than it should be backstopping investment banks. (I do believe it should be a backstop, via the Federal Reserve as lender of last resort and the use of FDIC insurance, to traditional banks).

A) Using 2010 as your end point is also biased as that includes the ramp up in temporary census hiring but does not include the elimination of those positions. See the third graph in your earlier post.

B) Your conclusion that "ALL employment dramatically was reduced starting in 2008" cannot possibly be accurate. Cord can fill you in on the details, but it turns out that you cannot fire people in the public sector.

I agree with you on most of that, except for a subtle caveat. Obama could have dramatically impacted the state and local unemployment by spending his first year (when he had a Democratic majority in Congress) to pass spending bills that increased the amount of money that went to the state level and/or increasing tax cuts rather than working on jamming through a huge and divisive health care bill.

 

I wanted to see the one like I first posted go out to 2012, but couldn't.

and come on Cord, we don't live in France.

 

Good. I linked that for lulz, not for SRS BSNS

This sums up the position of just about everyone I know - left or right. The only people against it I know of are the auto company/investment bank employees and campaign donors.



Something I've noticed on here, Scrappy. If it's negative (The economy is BAAAADZZZZ! OMG!) it's Obama's fault by default, if it's positive (The budget is growing slower than inflation! Government jobs are being cut!) it cannot possibly be Obama's responsibility - even if the same logic and reasoning was applied previously to make that topic Obama's responsibility. It's why I only post here for lulz - as you pointed out above, anything that can be twisted, manipulated, or otherwise warped will be to smear the guy. I mean, as you can see from Brainy's post, Obama is responsible for *all* budget increases and/or attempts at budget increases, but never budget cuts. Obama's responsible for *all* increases in employment (Even for Census employment that was mandated decades in advance of Obama even being born....), but not for decreases in employment.

Anyways, what I actually wanted to post:

http://www.nytimes.com/2012/07/30/op...ptic.html?_r=4

 

im pretty sure my posts show that he's not responsible for any of it. HIS budgets have yet to be passed.

 

Just to be clear, I'M AGAINST THE SIZE AND POWER OF THE FEDERAL GOVERNMENT, WHETHER CONTROLLED BY LEFT OR RIGHT.

Sorry for yelling.

At present, the group paddling fastest towards the fiscal cliff are the Democrats. Obama wants us all to jump in his speed boat. Most (not all) Republicans are content to go with the flow--to our collective doom--because they think they can't compete with Democrats in their district when they say "I want to cut spending and services."

And when people like Jack say "don't worry, we'll just print more money." it makes it harder to enact any sort of fiscal discipline. Is spending less than you take in really that hard? Doesn't everybody ELSE do that?

But really, how much of the money that you earn does the government "need"? Right now in California I'm 38% Fed + 9.5% State, plus sales tax, plus property tax, plus gas taxes, and I think I'm still paying for the Spanish American war via phone taxes. Let's not forget the EXHORBITANT fees I must pay my accountant and insurance agent just to stay in compliance with the rules. So in essence when I work a 12 hour day, over half the day is spent giving my money to an organization whose sole function seems to be ignoring their Constitutional reason for being, or making it harder for me to earn a living.

 

For what it's worth, cordy, I don't recall seeing Scrappy engage you on any kind of debate over prescriptive policy questions (ie, whether deficits are good or bad, appropriate levels and types of government spending, etc.). I have seen him repeatedly attempt to discover your understanding of the current monetary system and its implications.

In other words, it appears to me that Scrappy is reticent to argue over conclusions when the premises are not agreed upon. I can't say I find this position unreasonable.

 

You're absolutely right. I have been a bit hard on Scrappy. I think mainly it's because we have differing economic and currency philosophies. What he said that stuck with me was;

Scrappy: "Being a sovereign issuer of a free-float fiat currency is not a theory. It is an observation of what is.

Saying a government controlled fixed currency (e.g a peg to gold) is better than what we have is an opinion. Basing predictions on what someone thinks should be, rather than what is, leads to flawed analysis like those examples I have pointed out (and many more that I haven't).

And, in many cases, that flawed analysis leads to high blood pressure and pulling out of one's hair unnecessarily () or to being curmudgeonly far beyond one's years ()."

My bottom line is that despite anyone's currency philosophy, good fiscal policy is good fiscal policy. We don't have that now. We have political gamesmanship at best, and pay for play at worst. As an example, I can show you some neat graphs that resulted from "cash for clunkers" that look positive and are completely the opposite from a macro standpoint.

I agree that even paper money has value, but my point is that the value behind the money is being actively debased. The debt, the deficit, the sluggish economy, regulations, our government's long range planning and energy policy are all working against the value of the dollar.
__________________

 

If you are going to skip this post because it's too long, at least read the first indented portion.
Understanding the current monetary system which underwent a HUGE change in 1971 (plus other changes in the late '70s, early '80s and again in the mid-'90s) is critical to reaching reasonably accurate predictions of outputs to policy changes.


Said another way, imagine there is a modern car with a high static compression, turbo-charged four-cylinder engine with variable cam timing and electronic fuel-injection (including direct-injection). The car is running very poorly.

A very smart, incredibly experienced old hot-rod tuner says, "We need to gap down the plugs and lean it out. That always worked for my carb'd big blocks." Several older hot-rod guys agree.

Another camp of hot-rod guys says, "No way! We've seen this problem with our carb'd big blocks in the past. If you lean it out and gap down the plugs, you'll just make it worse. You've got to richen it up first, then eventually lean it out." Lots of other older hot-rod guys agree.

Then, in the corner being largely ignored, you've got a group of guys that no one has ever heard of before. They say, "Hey - it's worth pointing out that this is not a carb'd big block and that should be taken in to consideration before applying any fixes."


Unfortunately, this is not accurate. It is just not that simple. This is like saying one tuning method (e.g. high static compression and lower boost) or one medical prescription (e.g. a strict diet and vigorous exercise routine) is always the best.

To that point...

From a national level, the answer is no. The USA has run a deficit for a significant portion of its existence and many (most?) other nations run fiscal deficits so long as they run foreign trade deficits. When all nations run foreign trade surpluses, then all nations can run balanced government budgets and still allow the private sector to net save.

Remembering that in order for one nation to run a trade surplus, some other nation or nations must run deficits... Obviously, not all nations can run trade surpluses.



Historically, regarding the USA running a balanced budget, a government surplus or even major reduction of debt and deficits, see below:

 

To keep the back and forth to a minimum, I'm just going to say that I understand what you're saying, and disagree that the remedies put forth at this time en toto are the proper ones.

 

I think we should just let the Bloombergs of the world refuse facts and logic in favor of their own “feelings” and their misplaced confidence in their own superior intellect and infallibility. what's the worse that could happen?

 

Hurray! We do agree on some things. I also disagree that the remedies put forth at this time en toto are the proper ones.

 

I wonder if this is the solution:

 

 

 

Me.

 

It's hard to keep up with Braineack when only one of the site's I frequent ever has cartoons.

 

what's interesting is that most my cartoons come form economists' blogs.

 

So much makes sense now.