Well, yes. Inherited wealth buys houses in good school districts, and leaves plenty of room for reading tutors and the best for the children. Inherited wealth almost entirely precludes poverty and privation of the young students who you brought into the discussion. So it very much figures in when it comes to academic access to places like Harvard. And that doesn’t even consider the access given to the minority of legacy students at these elite colleges, which very much matters in real life.
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i see that you are calling someone out for bad manners and then end with an mmmkay, yourself.
Time to step away from the keyboard for a while?
“mmkay” is considered rude? I wasn’t aware. I edited the comment, and I thank you for the heads-up.
Though I wasn’t calling anyone out for being rude. I was calling @anon15383236 out for presenting a position filled with logical fallacies.
That’s from a work of fiction, though the characters in Ellis’s novel were all members of the one percent, and the beneficiaries of trust funds and the like… In the novel, the character was named “Paul Owen”
The real Paul Allen was Bill Gate’s business partner.
What you’re describing is the transformation of inherited wealth into income, no? People don’t generally exchange the ownership of a factory for a house in a good school district – there’s a transitional step that registers with the tax authorities. So if this sort of thing were happening with any kind of regularity, would it not show up in the income statistics?
(sorry, I edited the original post on you as you were replying. There’s a bit of overlap now)
No. That’s what the article is describing, and what we are discussing. No?
fair enough. I usually say something when I see someone tritely pointing out someone else’s lack of good faith. It’s more comedy than tragedy, and thanks for accepting my well intentioned advice, well. Have a good day.
Not in my understanding. The original article had nothing to say about wealth that isn’t being used to generate income. I understood your comment [quote]
So, how is the parents household income related to their inherited wealth?
[/quote] to mean that there must be a group of people who are inheritors of wealth but for whom that wealth is not being reflected in their annual income. Thus, the transformation of wealth into income strikes me as being very relevant to the position I originally stated in the comment you replied to: The one pointing out that it’s not just the 1% who are able to afford a Harvard education.
The boom and bust cycles are probably an unavoidable consequence in either scenario.
It’s named after three Republicans. Admittedly, Clinton signed it, but traditionally its the GOP (and Libertarians) that are clamoring for de-regulation. Conservatives like to blame affordable housing policies, conveniently forgetting that sub-prime mortgages are not new, they’ve been around for decades, but banks avoided them because they are risky. It’s only when they found they could shuffle that risk into derivatives and trick other banks into buying them that suddenly sub-prime mortgages took off (I have a friend who bought a house in 2002, and the bank pushed hard for him to get a sub-prime mortgage when he qualified for a less risky loan, he resisted and still has his house.)
[edit: image search for “sub-prime mortgages” and “graph”, you’ll see that sub-primes didn’t skyrocket immediately following the bill you cited, but do increase exponentially after Gramm-Leach-Bliley, and after the Commodity Futures Modernization Act of 2000, which both parties can share the blame on.]
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That S&L crisis back in the 80s featured mortgage-backed securities. If you want to see “them” at work, look back at what the press was saying while 2007-2008 crisis was unfolding. They acted like mortgage-backed securities where some new-fangled, never before seen thing.
How did the subprime package differ from the one he took? Variable rate?
Also, while we are on the subject of the 2007-2008 crisis. Who recalls that credit “reform” thing circa 2005 or 6? That was the pin that popped the housing credit bubble. IMHO.
What are unsupported blanket assertions, then?
“Credit default swaps” are in fact relatively new (and difficult for most folks, myself included, to really understand.)
Yea CDSs are something different. At one time in my life I had a good handle on what a swap is. ( I used to be a trader ).
I distinctly remember mortgage backed securities as a feature of the 80s era crisis. Some public schools lost their nut because they went all in on them .
Now that I think about it swaps are similar. Great, now Im haunted, I have to look this up.
Either way, Things like “affordable housing act” and the like, forced the banking system to adapt to the added risk of taking on less than qualified borrowers, the result as the mortgage backed security( maybe a swap ). So that the banks could package risky borrowers with low risk ones and lay off the risk with the concept being that the sum of the parts of the package is greater than the whole.
Havent thought about swaps in a looooong time. Gotta go crack a book.
EDIT: My point is Socialism fails and Capitalism takes the blame.
Furthermore, if the Affordable Housing Act led to the housing/credit bubble. Do you care to take a crack at what the Affordable Care Act( obamacare ) will result in?
EDIT: Im sorry if you thought that by supporting ACA you thought you were “fighting the system”. But thats how the world works; people that has, gets more while people that dont, well, not so much.
I get the impression this idea that affordable housing policies are the cause of the housing bubble is being promoted by conservative pundits, I keep hearing it from folks who only get their info from AM radio and Fox News. I will grant that it is partly to blame, but if you step back and look at everything that led up to the 2008 crash, affordable housing policies were among the smallest parts of it. From the Financial Crisis Inquiry Commission report: “the Community Reinvestment Act was not a significant factor in subprime lending or the crisis. Many subprime lenders were not subject to the CRA. Research indicates only 6% of high-cost loans – a proxy for subprime loans – had any connection to the law. Loans made by CRA-regulated lenders in the neighborhoods in which they were required to lend were half as likely to default as similar loans made in the same neighborhoods by independent mortgage originators not subject to the law.”
Banks want to make money (and that’s fine, we all do) but it’s not like the government twisted their arms to make millions of bad loans.
(I am only “for” the ACA in that it is better than nothing. You see how Washington works-- do you think those of us that want a European-style government run plan would ever get it? The GOP has gotten so partisan that a program virtually identical to a plan they floated in 1994 is now “communism”-- the ACA is a lot of things, but it’s not communist.)
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I know, I get that, it was just a joke. I figured that Bill Gates and Paul Allen were the two people that no one really needed a background on.
Exactly. There’s nothing the Right likes more than blaming black and brown people for the housing bubble, for being “greedy” and/or “stupid” in getting “mortgages they couldn’t afford.” The contributions of “greedy” investors to the unsustainable credit default swaps and the utter corruption of the mortgage ratings industry is always ignored, because that doesn’t fit the “blame the minorities and bleeding heart liberals who forced those poor, poor banks to make those loans” narrative.
Of course, I’m a middle-class white woman who got railroaded into a riskier mortgage than I would have qualified for, thanks to the rapacious appetite of the Giant Pool of Money for more, more, more, more returns. But that doesn’t fit the “greedy/stupid minorities and the libruls who catered to them” narrative either.
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Some jokers think that the only real capitalism is “pure” capitalism, and if you pass any regulations then it’s socialism. it’s sorta like playing the “no true Scotsman” game-- don’t blame capitalism, it was those dang socialist rules and regulations that screwed everything up! It’s not like capitalism in some kind of pure form would never have market crashes and panics. In fact they would be bigger.
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I keep thinking that there was something else in addition to the CRA, much more recent.
But anyway… another factor ( I finally got around to looking it up ) is the Bankruptcy Abuse Prevention Act. When this was making the news I realized that this will alter credit pricing models at a time when consumer credit growth was running hot and the prices of consumer staples was tending to the high end of their range. This didnt cause the bubble but it without a doubt precipitated it bursting.
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