6 ms·

Somehow this stuff got built before. There must be a way to get back into that state.

untog 8y ago
After witnessing 2008, I'm not sure that even another Great Depression would get America back to the New Deal mindset. Politicians would just blame welfare recipients, or something.
- Someguywhatever 8y ago
  It was the government forcing banks to lend to people who would normally not qualify for mortgage loans that caused the crisis in the first place. The people who the banks accurately predicted couldn't pay and were normally denied loans were instead actually given loans, subsequently couldn't pay, aaaand everything collapsed. I think that the securitization and sell off of these mortgage backed securities were the banks trying to pass the hot potato off onto somebody else. They knew it would blow up, only the financially illiterate, and busybody do-gooders in government with a regulatory gun to the banks heads didn't see it coming with predictable results.
  - icebraining 8y ago
    "Several candidates made the argument at the debate that the government forced mortgage lenders to make bad loans. But in reality, most subprime loans were made by companies that were not subject to any kind of federal regulation." "No executive of a major mortgage company said at the time that the government was forcing them to make subprime loans. They said they did it because they thought they would make money. And even now, after the crash of the housing market, with all the temptation to point fingers, it is awfully hard to find a mortgage executive who echoes the argument" https://www.nytimes.com/2011/11/10/us/politics/the-role-of-regulation-in-holding-back-business.html?ref=presidentialdebates https://www.nytimes.com/2011/11/10/us/politics/the-role-of-r...
    - Someguywhatever 8y ago
      Was there some incentive from government then, was there some kind of deregulation or some other kind of regulatory change? Why would this subprime lending begin in the first place do we know?
      - mikeash 8y ago
        Subprime is a great way to make money if you can manage the risk. Before the crisis, people figured out that if you bundled a lot of them together and sliced up the bundle in clever ways, you could shuffle the risk around and manage it better. People who wanted riskier assets could get them, and people who wanted safer assets with lower returns could get them too. Except this only works if you actually evaluate the risk correctly. If you underestimate the potential for large-scale default due to, say, a sudden drop in house prices, then everything gets screwed up, and people who bought “safe” assets suddenly find themselves losing their investment.
  - Marazan 8y ago
    Absolutely false. The subprime crisis was not caused by 'government mandated' lending to traditionally undeserved parts of the population. Anyone pushing that narrative is trying to pushing a implicitly racist 'reason' for the financial crisis: "it was all them loans to the black people that did it" .
    - Someguywhatever 8y ago
      Ok well I'm out to lunch then, I read that somewhere but can no longer remember where.
  - barbecue_sauce 8y ago
    The government? It was demand for mortgage-backed securities (viewed as traditionally safe assets for investment) from investment funds that led to more and more lenient mortgage qualifications to increase supply, weakening the previous strength of those securities overall that, through layers of financial indirection (see tranches), were not valued correctly until too late (with the subsequent credit default swap responsibilities crippling interbank loaning). This was targeted predatory lending, often targeted at people who already had home equity in some form. This was not something significantly exacerbated by the FHA.
    - Someguywhatever 8y ago
      ah ok, so demand for MBS --> led to some kind of lobbying for deregulation---> which led to the deregulation actually happening ---> which led to unscrupulous individuals subprime lending so they could package it up as MBS and sell those off to make money
Analemma_ 8y ago
It was built when the top marginal tax rate in the United States was above 70 percent, a level which would make a lot of people go into fits of apoplectic rage if you were to suggest it now.
- bovermyer 8y ago
  Wait, what?
  - throwawayjava 8y ago
    Highest federal tax rate by year, 1918 - 2017: https://bradfordtaxinstitute.com/LibRepository/235f37bd-612d-4a49-ad95-52769c17687d.png https://bradfordtaxinstitute.com/LibRepository/235f37bd-612d... The bulk of the interstate highway system was built between 1960 and 1980.
    - refurb 8y ago
      And tax deductions were much higher then than now. Nobody actually paid those rates. The percentage of GDP collected as income taxes is about the same then as it is now. In fact, the top 1% paid less of the total taxes during the New Deal than now.[1] [1]http://www.slate.com/blogs/moneybox/2017/08/07/the_history_of_tax_rates_for_the_rich.html http://www.slate.com/blogs/moneybox/2017/08/07/the_history_o...
  - nightbrawler 8y ago
    Some interesting statistics of tax rates: https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco... - During WWI it peaked at 77% - During WWII it peaked at 94%!!
    - throwaway76543 8y ago
      It didn't really, though. That's the marginal income rate, not capital gains -- it's a tax rate for an empty bracket. It was super effective wartime grandstanding which is still fooling everyone decades later. Capital gains -- the rate the upper class actually pays -- has never risen above 35% at the federal level. And that's within a few points of 2018 marginal rates when we factor in state level taxes for places like California. The tax moved from federal to state (or to earmarked federal, like NIIT) Capital gains: 1945: 35% federal + 6% state = 41% 2018: 25% federal + 3.8% NIIT + 13.1% state = 41.9% Prior to losing SALT, wealthy Californians paid slightly lower marginal rates than in 1945. Trump's changes cause the current marginal tax rate for wealthy Californians to be higher than in 1945 -- the year you're calling out as a peak. No one really paid 94%.
nostrademons 8y ago
Wartime. The interstate highway system got built because Eisenhower saw firsthand how effective having a national road network is for logistics in times of war, and so it became a national security concern. The transcontinental railroad was financed by the Department of War and greatly accelerated when the Southern states seceded - Congress had been denying funding for a decade before, but the first season after the war started, it was approved. It'll likely be the same for high-speed rail, hyperloops, and under-city tunnels. Once we're at war again there will be a huge incentive to be able to move large quantities of people across the country within hours, and ideally do so out of the reach of aerial bombardment. It would be nice if we could do this without blowing everything up, though.
- geezerjay 8y ago
  > It'll likely be the same for high-speed rail, hyperloops, and under-city tunnels. Please don't make the mistake of equating the hyperloop scheme with reputable and tried-and-true railway services. Hyperloop is at best a marketing gimmick based on naive and ill-informed notions of what it takes to run a vehicle in a track, while real railway services are mundane technologies which have been proven to work for at least half a century.
  - nostrademons 8y ago
    Railroads were very far from reputable services when they were first being built. The history of these is fascinating; you think tech scams are bad today, you should've seen the machinations of Jay Gould [1] or Thomas Durant [2]. Many early railroads failed to get completed at all, or if they did, the trains would blow up on the tracks and kill a bunch of passengers. [1] https://en.wikipedia.org/wiki/Jay_Gould https://en.wikipedia.org/wiki/Jay_Gould [2] https://en.wikipedia.org/wiki/First_Transcontinental_Railroad#Authorization_and_funding https://en.wikipedia.org/wiki/First_Transcontinental_Railroa...
    - geezerjay 8y ago
      Apples and oranges. Your examples refer to specific business ventures initiated in a time where steam-powered rail transport was already a century old and with a proven track record, while hyperloop is a pie-in-the-sky scheme that is both technically and economically unfeasible. It's like comparing flying cars with the DeLorean.
fipple 8y ago
This is one of the costs of diversity. People don’t work together towards shared goals anymore since they characterize the other people benefiting as un-American/unpersons.
- mikeash 8y ago
  That sounds more like a cost of bigotry and intolerance.
  - teddyh 8y ago
    It’s actually the combination of both which is a problem. As you say, diversity wouldn’t be a problem if there were no bigots and intolerant people, but conversely, bigots and intolerant people weren’t as much of a problem when there was less diversity.
    - mikeash 8y ago
      Sure, in the same way that a shooting murder requires someone to be in the path of the bullet, not just someone to pull the trigger.
      - teddyh 8y ago
        Yes, of course, but the bigots and intolerants (i.e. the people shooting bullets) were here first. Introducing diversity into this world full of bigots and intolerants does create problems, and it’s a bit disingenuous to disclaim all responsibility when only pushing for diversity when you know it’s going to cause problems, especially since it’s mostly going to cause problems for the very minorities that diversity is ostensibly meant to help. To be clear; I’m not blaming the actual victims of bigots and intolerants, nor do I want to remove any blame from the bigots and intolerants. I simply want to add some blame to those blindly pushing diversity without regard to who gets hurt.
        mikeash 8y ago
        The bigots were here first? Are you not aware of native Americans or African slaves? I can’t even.
closeparen 8y ago
The defining factor of that state is a willingness to disenfranchise neighbors and obliterate communities for the sake of convenience. Politics are now far too sensitive to local constituents’ rights and opinions to permit the construction of infrastructure nearly as good as the interstate highway system. A system optimized for utility will be less useful than one balancing utility and social justice.
- mikeash 8y ago
  That’s a really interesting point and I’m sure it has a huge impact, but it can’t be the whole story. For example, the DC Metro suffers from this inability to get much done, and absurd costs and timelines when it does, yet most of their projects are underground or use existing rights of way.
  - closeparen 8y ago
    Tunneling isn’t cheap. Much simpler to demolish whatever is in the way and make cross traffic wait (traditional rail) or go to one of a few specific overpass/underpass points (freeways). But such options are no longer even taken seriously. It’s just assumed that new transit must not interfere with the status quo. That has a cost, and it comes out of overall effectiveness. Projects built in an era of higher tolerance for political hubris didn’t have that problem. I agree it’s not the whole story, but it’s something.
    - mikeash 8y ago
      We did lots of tunnels before, though. Or look at Metro’s proposal for a western extension to the Orange Line. The track would be down the median of a highway that’s currently just grass. Not a single person would be displaced, nor would any tunneling need to happen. Still no movement on it after decades.

After witnessing 2008, I'm not sure that even another Great Depression would get America back to the New Deal mindset. Politicians would just blame welfare recipients, or something.

Someguywhatever 8y ago
It was the government forcing banks to lend to people who would normally not qualify for mortgage loans that caused the crisis in the first place. The people who the banks accurately predicted couldn't pay and were normally denied loans were instead actually given loans, subsequently couldn't pay, aaaand everything collapsed. I think that the securitization and sell off of these mortgage backed securities were the banks trying to pass the hot potato off onto somebody else. They knew it would blow up, only the financially illiterate, and busybody do-gooders in government with a regulatory gun to the banks heads didn't see it coming with predictable results.
- icebraining 8y ago
  "Several candidates made the argument at the debate that the government forced mortgage lenders to make bad loans. But in reality, most subprime loans were made by companies that were not subject to any kind of federal regulation." "No executive of a major mortgage company said at the time that the government was forcing them to make subprime loans. They said they did it because they thought they would make money. And even now, after the crash of the housing market, with all the temptation to point fingers, it is awfully hard to find a mortgage executive who echoes the argument" https://www.nytimes.com/2011/11/10/us/politics/the-role-of-regulation-in-holding-back-business.html?ref=presidentialdebates https://www.nytimes.com/2011/11/10/us/politics/the-role-of-r...
  - Someguywhatever 8y ago
    Was there some incentive from government then, was there some kind of deregulation or some other kind of regulatory change? Why would this subprime lending begin in the first place do we know?
    - mikeash 8y ago
      Subprime is a great way to make money if you can manage the risk. Before the crisis, people figured out that if you bundled a lot of them together and sliced up the bundle in clever ways, you could shuffle the risk around and manage it better. People who wanted riskier assets could get them, and people who wanted safer assets with lower returns could get them too. Except this only works if you actually evaluate the risk correctly. If you underestimate the potential for large-scale default due to, say, a sudden drop in house prices, then everything gets screwed up, and people who bought “safe” assets suddenly find themselves losing their investment.
- Marazan 8y ago
  Absolutely false. The subprime crisis was not caused by 'government mandated' lending to traditionally undeserved parts of the population. Anyone pushing that narrative is trying to pushing a implicitly racist 'reason' for the financial crisis: "it was all them loans to the black people that did it" .
  - Someguywhatever 8y ago
    Ok well I'm out to lunch then, I read that somewhere but can no longer remember where.
- barbecue_sauce 8y ago
  The government? It was demand for mortgage-backed securities (viewed as traditionally safe assets for investment) from investment funds that led to more and more lenient mortgage qualifications to increase supply, weakening the previous strength of those securities overall that, through layers of financial indirection (see tranches), were not valued correctly until too late (with the subsequent credit default swap responsibilities crippling interbank loaning). This was targeted predatory lending, often targeted at people who already had home equity in some form. This was not something significantly exacerbated by the FHA.
  - Someguywhatever 8y ago
    ah ok, so demand for MBS --> led to some kind of lobbying for deregulation---> which led to the deregulation actually happening ---> which led to unscrupulous individuals subprime lending so they could package it up as MBS and sell those off to make money

Analemma_ 8y ago

It was built when the top marginal tax rate in the United States was above 70 percent, a level which would make a lot of people go into fits of apoplectic rage if you were to suggest it now.

bovermyer 8y ago
Wait, what?
- throwawayjava 8y ago
  Highest federal tax rate by year, 1918 - 2017: https://bradfordtaxinstitute.com/LibRepository/235f37bd-612d-4a49-ad95-52769c17687d.png https://bradfordtaxinstitute.com/LibRepository/235f37bd-612d... The bulk of the interstate highway system was built between 1960 and 1980.
  - refurb 8y ago
    And tax deductions were much higher then than now. Nobody actually paid those rates. The percentage of GDP collected as income taxes is about the same then as it is now. In fact, the top 1% paid less of the total taxes during the New Deal than now.[1] [1]http://www.slate.com/blogs/moneybox/2017/08/07/the_history_of_tax_rates_for_the_rich.html http://www.slate.com/blogs/moneybox/2017/08/07/the_history_o...
- nightbrawler 8y ago
  Some interesting statistics of tax rates: https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco... - During WWI it peaked at 77% - During WWII it peaked at 94%!!
  - throwaway76543 8y ago
    It didn't really, though. That's the marginal income rate, not capital gains -- it's a tax rate for an empty bracket. It was super effective wartime grandstanding which is still fooling everyone decades later. Capital gains -- the rate the upper class actually pays -- has never risen above 35% at the federal level. And that's within a few points of 2018 marginal rates when we factor in state level taxes for places like California. The tax moved from federal to state (or to earmarked federal, like NIIT) Capital gains: 1945: 35% federal + 6% state = 41% 2018: 25% federal + 3.8% NIIT + 13.1% state = 41.9% Prior to losing SALT, wealthy Californians paid slightly lower marginal rates than in 1945. Trump's changes cause the current marginal tax rate for wealthy Californians to be higher than in 1945 -- the year you're calling out as a peak. No one really paid 94%.

nostrademons 8y ago

Wartime. The interstate highway system got built because Eisenhower saw firsthand how effective having a national road network is for logistics in times of war, and so it became a national security concern. The transcontinental railroad was financed by the Department of War and greatly accelerated when the Southern states seceded - Congress had been denying funding for a decade before, but the first season after the war started, it was approved. It'll likely be the same for high-speed rail, hyperloops, and under-city tunnels. Once we're at war again there will be a huge incentive to be able to move large quantities of people across the country within hours, and ideally do so out of the reach of aerial bombardment. It would be nice if we could do this without blowing everything up, though.

geezerjay 8y ago
> It'll likely be the same for high-speed rail, hyperloops, and under-city tunnels. Please don't make the mistake of equating the hyperloop scheme with reputable and tried-and-true railway services. Hyperloop is at best a marketing gimmick based on naive and ill-informed notions of what it takes to run a vehicle in a track, while real railway services are mundane technologies which have been proven to work for at least half a century.
- nostrademons 8y ago
  Railroads were very far from reputable services when they were first being built. The history of these is fascinating; you think tech scams are bad today, you should've seen the machinations of Jay Gould [1] or Thomas Durant [2]. Many early railroads failed to get completed at all, or if they did, the trains would blow up on the tracks and kill a bunch of passengers. [1] https://en.wikipedia.org/wiki/Jay_Gould https://en.wikipedia.org/wiki/Jay_Gould [2] https://en.wikipedia.org/wiki/First_Transcontinental_Railroad#Authorization_and_funding https://en.wikipedia.org/wiki/First_Transcontinental_Railroa...
  - geezerjay 8y ago
    Apples and oranges. Your examples refer to specific business ventures initiated in a time where steam-powered rail transport was already a century old and with a proven track record, while hyperloop is a pie-in-the-sky scheme that is both technically and economically unfeasible. It's like comparing flying cars with the DeLorean.

fipple 8y ago

This is one of the costs of diversity. People don’t work together towards shared goals anymore since they characterize the other people benefiting as un-American/unpersons.

mikeash 8y ago
That sounds more like a cost of bigotry and intolerance.
- teddyh 8y ago
  It’s actually the combination of both which is a problem. As you say, diversity wouldn’t be a problem if there were no bigots and intolerant people, but conversely, bigots and intolerant people weren’t as much of a problem when there was less diversity.
  - mikeash 8y ago
    Sure, in the same way that a shooting murder requires someone to be in the path of the bullet, not just someone to pull the trigger.
    - teddyh 8y ago
      Yes, of course, but the bigots and intolerants (i.e. the people shooting bullets) were here first. Introducing diversity into this world full of bigots and intolerants does create problems, and it’s a bit disingenuous to disclaim all responsibility when only pushing for diversity when you know it’s going to cause problems, especially since it’s mostly going to cause problems for the very minorities that diversity is ostensibly meant to help. To be clear; I’m not blaming the actual victims of bigots and intolerants, nor do I want to remove any blame from the bigots and intolerants. I simply want to add some blame to those blindly pushing diversity without regard to who gets hurt.
      - mikeash 8y ago
        The bigots were here first? Are you not aware of native Americans or African slaves? I can’t even.

closeparen 8y ago

The defining factor of that state is a willingness to disenfranchise neighbors and obliterate communities for the sake of convenience. Politics are now far too sensitive to local constituents’ rights and opinions to permit the construction of infrastructure nearly as good as the interstate highway system. A system optimized for utility will be less useful than one balancing utility and social justice.

mikeash 8y ago
That’s a really interesting point and I’m sure it has a huge impact, but it can’t be the whole story. For example, the DC Metro suffers from this inability to get much done, and absurd costs and timelines when it does, yet most of their projects are underground or use existing rights of way.
- closeparen 8y ago
  Tunneling isn’t cheap. Much simpler to demolish whatever is in the way and make cross traffic wait (traditional rail) or go to one of a few specific overpass/underpass points (freeways). But such options are no longer even taken seriously. It’s just assumed that new transit must not interfere with the status quo. That has a cost, and it comes out of overall effectiveness. Projects built in an era of higher tolerance for political hubris didn’t have that problem. I agree it’s not the whole story, but it’s something.
  - mikeash 8y ago
    We did lots of tunnels before, though. Or look at Metro’s proposal for a western extension to the Orange Line. The track would be down the median of a highway that’s currently just grass. Not a single person would be displaced, nor would any tunneling need to happen. Still no movement on it after decades.