4 ms·

The post housing crash housing boom was almost entirely the result of the federal government--which has made, guaranteed, or bought significantly more than half

The post housing crash housing boom was almost entirely the result of the federal government--which has made, guaranteed, or bought significantly more than half the residential mortgages since 2008--deciding there should be a housing boom. If it is indeed coming to an end it is because the federal government collectively has decided not to double down and keep the party going. This isn't the weather or even the price of gold. This is policy choices by government officials and should reported that way. I'm not saying (in this post) that it is a good thing or bad thing, but it's what is actually going on and that's what newspapers ought to report.

toomuchtodo 8y ago
The Federal Reserve (which orchestrates interest rates to manage inflation and achieve full employment [two of its mandates]) is not (edit: a branch) of the US government, and does not set government policy. Edit: This is incorrect. The Board Of Governors who set interest rates is a part of the federal govrnment as an agency (accountable to Congress), the individual Federal Reserve Banks are not.
- freedomben 8y ago
  While it is technically true that the Fed is privately owned, it's not how it runs in actuality. The Fed chairman meets with presidents regularly, and many other politicians. The president also nominates the Chair of the Fed. So hardly independent [1]. [1] https://mises.org/library/myth-fed-independence https://mises.org/library/myth-fed-independence
  - deleted 8y ago
    [deleted]
  - pfarnsworth 8y ago
    Based on how pissed off Trump is that Powell is raising rates, I would say the Fed Chairman is pretty independent.
- pdonis 8y ago
  > The Federal Reserve (which orchestrates interest rates to manage inflation and achieve full employment [two of its mandates]) is not part of the US government Yes, it is. It's established by US statute, its board of governors is appointed by the President, and its personnel are paid by the US government. It is not considered part of any of the usual three branches of the US government (legislative, executive, judicial), but that doesn't mean it's not part of the US government.
  - austincheney 8y ago
    To be fair you are both right. The board of directors is appointed by government officials and the bank was established by the Federal Reserve Act. The bank is also privately owned and not by any government. I learned this because a technology director at the Dallas bank works with me in our side job.
    - Latteland 8y ago
      This is an interesting subject. The banks that work in each federal bank's district have to buy shares in the local federal bank but they don't come with voting rights. Can this be true that its kind of like being an owner of the green bay packers without voting rights? https://www.thebalance.com/who-owns-the-federal-reserve-3305974 https://www.thebalance.com/who-owns-the-federal-reserve-3305... and https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks https://www.stlouisfed.org/in-plain-english/who-owns-the-fed...
    - pdonis 8y ago
      > The bank is also privately owned and not by any government. Each of the Federal Reserve banks is structured on paper as a private corporation, yes. But the US government effectively controls what they do; the private corporations do not exercise any of the normal functions of ownership that other private corporations do.
      - austincheney 8y ago
        Have you ever worked for the federal government? My part time job is military. The government in that case really controls what we do. At the federal reserve they aren't regulated as a federal employer or a federal agency.
- bradleyjg 8y ago
  You are simply wrong. The Board of Governors of the Federal Reserve System is a policy making arm of the United States Federal Government. It was created by and can be abolished by or have any of its functions changed or decisions overruled by statute, it's members are officers of the United States within the meaning of Article II, section 2, clause 2 of the US Constitution appointed by the President of the United States by and with the consent of the Senate. Please stop spreading this nonsense. You may as well be telling people that they don't have to pay taxes because of the yellow fringes on flags in court houses.
  - toomuchtodo 8y ago
    [removed]
    - bradleyjg 8y ago
      The Federal Reserve banks are not one in the same as the Board of Governors of the Federal Reserve System. That's why they have different names. It's Board of Governors that determines the interest rate. It is a policy making part of the federal government. https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html > The Federal Reserve System is supervised by the Board of Governors. Located in Washington, D.C., the Board is a federal government agency consisting of seven members appointed by the President of the United States and confirmed by the U.S. Senate. The Board has about 1,850 employees. Please stop spreading this nonsense.
      - deleted 8y ago
        [deleted]
      - toomuchtodo 8y ago
        I have updated both of my comments in this thread. Thanks for pointing out my misunderstanding between the Federal Reserve’s Board Of Governors and the Federal Reserve Bank entities they oversee.
        8y ago
- curuinor 8y ago
  it's not political, it's just got a board entirely appointed by the president with consent of the senate and has a congressional mandate to do stuff...
- deleted 8y ago
  [deleted]
condorwhilhem 8y ago
Can you prove that? Not saying I don't believe you but I've never heard that before.
Gibbon1 8y ago
The government responded to the crisis with fiscal austerity and massive levels of QE. If you wanted to enrich the FIRE sector and screw working class people that would be exactly how to do it. If you look at inflation by sector instead of focusing on nominal and ignoring everything else, you find asset bubbles on stocks, bonds, and real estate, no wage growth and low rates of nominal inflation.
- jarjarbanqs 8y ago
  > fiscal austerity => lets tighten our belts! decease debt, decrease risk > massive levels of QE. => print more money, lend it out at 0% their actions are directly opposite their statements. they are trying to kick the can down the road as long as possible while enriching themselves and their friends problem is the can is picking up more dirt. you can use a bigger shoe but and eventually your foot will break. they know this as well so the plan is pump and dump. significant "real" wealth has not been created since 2008. feel free to point out where.. I'll wait by boosting the market and skimming the top continuously you'll be safe from the pop. paid for by the pension plans of everyday joe.
- bko 8y ago
  Austerity: difficult economic conditions created by government measures to reduce public expenditure. > Federal Spending was increasing modestly, year on year, in the mid 2000s. But it jumped by $700 billion a year in the Great Recession to bail out the banks and provide “stimulus.” Since the recession federal spending held steady at about $3.6 trillion per year for a few years, before resuming growth in 2015. Viewed from a GDP perspective, federal spending was steady at about 19 percent GDP in the mid 2000s and then jumped, in the Great Recession to almost 25 percent GDP. But in the subsequent economic recovery federal spending has steadily declined as a percent of GDP down to about 20 percent in 2014. But in 2015 federal spending started to increase as a percent of GDP. The federal government never cut public expenditure. It went up considerably due to the stimulus and was magnified in terms of percentage of gdp due to drop in gdp. Over the years following the crisis the expenditures dropped as a percentage of gdp from the new elevated rate due to gdp growth, but saying there was austerity by the federal government is not true https://www.usgovernmentspending.com/federal_spending_chart https://www.usgovernmentspending.com/federal_spending_chart

toomuchtodo 8y ago

The Federal Reserve (which orchestrates interest rates to manage inflation and achieve full employment [two of its mandates]) is not (edit: a branch) of the US government, and does not set government policy. Edit: This is incorrect. The Board Of Governors who set interest rates is a part of the federal govrnment as an agency (accountable to Congress), the individual Federal Reserve Banks are not.

freedomben 8y ago
While it is technically true that the Fed is privately owned, it's not how it runs in actuality. The Fed chairman meets with presidents regularly, and many other politicians. The president also nominates the Chair of the Fed. So hardly independent [1]. [1] https://mises.org/library/myth-fed-independence https://mises.org/library/myth-fed-independence
- deleted 8y ago
  [deleted]
- pfarnsworth 8y ago
  Based on how pissed off Trump is that Powell is raising rates, I would say the Fed Chairman is pretty independent.
pdonis 8y ago
> The Federal Reserve (which orchestrates interest rates to manage inflation and achieve full employment [two of its mandates]) is not part of the US government Yes, it is. It's established by US statute, its board of governors is appointed by the President, and its personnel are paid by the US government. It is not considered part of any of the usual three branches of the US government (legislative, executive, judicial), but that doesn't mean it's not part of the US government.
- austincheney 8y ago
  To be fair you are both right. The board of directors is appointed by government officials and the bank was established by the Federal Reserve Act. The bank is also privately owned and not by any government. I learned this because a technology director at the Dallas bank works with me in our side job.
  - Latteland 8y ago
    This is an interesting subject. The banks that work in each federal bank's district have to buy shares in the local federal bank but they don't come with voting rights. Can this be true that its kind of like being an owner of the green bay packers without voting rights? https://www.thebalance.com/who-owns-the-federal-reserve-3305974 https://www.thebalance.com/who-owns-the-federal-reserve-3305... and https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks https://www.stlouisfed.org/in-plain-english/who-owns-the-fed...
  - pdonis 8y ago
    > The bank is also privately owned and not by any government. Each of the Federal Reserve banks is structured on paper as a private corporation, yes. But the US government effectively controls what they do; the private corporations do not exercise any of the normal functions of ownership that other private corporations do.
    - austincheney 8y ago
      Have you ever worked for the federal government? My part time job is military. The government in that case really controls what we do. At the federal reserve they aren't regulated as a federal employer or a federal agency.
bradleyjg 8y ago
You are simply wrong. The Board of Governors of the Federal Reserve System is a policy making arm of the United States Federal Government. It was created by and can be abolished by or have any of its functions changed or decisions overruled by statute, it's members are officers of the United States within the meaning of Article II, section 2, clause 2 of the US Constitution appointed by the President of the United States by and with the consent of the Senate. Please stop spreading this nonsense. You may as well be telling people that they don't have to pay taxes because of the yellow fringes on flags in court houses.
- toomuchtodo 8y ago
  [removed]
  - bradleyjg 8y ago
    The Federal Reserve banks are not one in the same as the Board of Governors of the Federal Reserve System. That's why they have different names. It's Board of Governors that determines the interest rate. It is a policy making part of the federal government. https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html > The Federal Reserve System is supervised by the Board of Governors. Located in Washington, D.C., the Board is a federal government agency consisting of seven members appointed by the President of the United States and confirmed by the U.S. Senate. The Board has about 1,850 employees. Please stop spreading this nonsense.
    - deleted 8y ago
      [deleted]
    - toomuchtodo 8y ago
      I have updated both of my comments in this thread. Thanks for pointing out my misunderstanding between the Federal Reserve’s Board Of Governors and the Federal Reserve Bank entities they oversee.
      - 8y ago
curuinor 8y ago
it's not political, it's just got a board entirely appointed by the president with consent of the senate and has a congressional mandate to do stuff...
deleted 8y ago
[deleted]

condorwhilhem 8y ago

Can you prove that? Not saying I don't believe you but I've never heard that before.

Gibbon1 8y ago

The government responded to the crisis with fiscal austerity and massive levels of QE. If you wanted to enrich the FIRE sector and screw working class people that would be exactly how to do it. If you look at inflation by sector instead of focusing on nominal and ignoring everything else, you find asset bubbles on stocks, bonds, and real estate, no wage growth and low rates of nominal inflation.

jarjarbanqs 8y ago
> fiscal austerity => lets tighten our belts! decease debt, decrease risk > massive levels of QE. => print more money, lend it out at 0% their actions are directly opposite their statements. they are trying to kick the can down the road as long as possible while enriching themselves and their friends problem is the can is picking up more dirt. you can use a bigger shoe but and eventually your foot will break. they know this as well so the plan is pump and dump. significant "real" wealth has not been created since 2008. feel free to point out where.. I'll wait by boosting the market and skimming the top continuously you'll be safe from the pop. paid for by the pension plans of everyday joe.
bko 8y ago
Austerity: difficult economic conditions created by government measures to reduce public expenditure. > Federal Spending was increasing modestly, year on year, in the mid 2000s. But it jumped by $700 billion a year in the Great Recession to bail out the banks and provide “stimulus.” Since the recession federal spending held steady at about $3.6 trillion per year for a few years, before resuming growth in 2015. Viewed from a GDP perspective, federal spending was steady at about 19 percent GDP in the mid 2000s and then jumped, in the Great Recession to almost 25 percent GDP. But in the subsequent economic recovery federal spending has steadily declined as a percent of GDP down to about 20 percent in 2014. But in 2015 federal spending started to increase as a percent of GDP. The federal government never cut public expenditure. It went up considerably due to the stimulus and was magnified in terms of percentage of gdp due to drop in gdp. Over the years following the crisis the expenditures dropped as a percentage of gdp from the new elevated rate due to gdp growth, but saying there was austerity by the federal government is not true https://www.usgovernmentspending.com/federal_spending_chart https://www.usgovernmentspending.com/federal_spending_chart