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Edited by Mrph1 on Nov 30th 2023 at 11:03:59 AM

AlleyOop Since: Oct, 2010
#156076: Nov 17th 2016 at 6:49:08 AM

If it helps any Obama will be available to assist in any Democratic campaign efforts once he's out of the White House and says he'll be at it with more force than he had during his presidency. And he's leaving with high popularity so what he says hopefully have more resonance among middle voters. He's also very social media savvy, something that was noted about the 2008 campaign and which the Clinton campaign was lacking.

FluffyMcChicken My Hair Provides Affordable Healthcare from where the floating lights gleam Since: Jun, 2014 Relationship Status: In another castle
Fighteer Lost in Space from The Time Vortex (Time Abyss) Relationship Status: TV Tropes ruined my love life
Lost in Space
#156078: Nov 17th 2016 at 6:54:38 AM

Monsieur Thenardier: I see posts like yours and I have a very hard time letting them stand unchallenged, but this topic moves fast enough that I'm afraid a mega-post would get lost. Further, the manner in which you are approaching it makes me doubt that we can communicate successfully. That said, I'm a sucker for punishment so I'll give it a shot.

Sub-prime mortgages were not high risk bets for Wall Street, in fact they arose out of a specific desire for a safe and steady return. The risks of such mortgage products were higher than the risk models the banks and rating agencies and investors themselves used due to faulty modeling.
Blatantly false. Banks were under pressure to achieve higher investor returns on lending and so they started applying pressure on mortgagors to skimp on the usual diligence. This resulted in a sales environment wherein sound underwriting practices were thrown out the window, applicants for loans were encouraged to falsify income statements, and anyone who dared speak out was blacklisted. Everyone knew it was going on but ignored it as long as the profits kept rolling in.

The major banks, in turn, engaged in their own shady practices by packaging up subprime mortgages as security instruments, colluding with rating agencies to fraudulently rate them as AAA, and selling them on investment markets. Companies like AIG ran up huge liabilities insuring those products against default, which became their own form of security instrument in the markets. Everyone involved was, knowingly and deliberately, building a giant house of cards which toppled as soon as the music stopped, with all of it encouraged by the easy-money and lax regulatory environment of the Bush administration.

I've heard this narrative that the U.S. financial system was brought to its knees by would-be homeowners (usually distinguished as poor people and minorities, because of course) trying to defraud the system. That is absurd; lenders blatantly and collusively failed to apply proper standards. I've heard that Freddie Mac and Fannie Mae, the big GSEs backstopping the mortgage lending system, played some role, but they were late to the party — they never dealt in subprime mortgages and only towards the end did they start to relax their investing rules.

The repeal of Glass-Steagall was an issue, to be sure, but not as pertinent a problem as it was breathlessly made out to be. The kind of shadow banking practices that helped run up the market bubble wouldn't have been prevented by it per se; what it would have done would have been to make it so the big consumer banks like JP Morgan and Wells Fargo couldn't have gotten quite so deeply into the pudding, creating less immediate risk for consumer deposits.

The banks are not engaging in "dangerous, high risk practices" right now as Warren claimed. Most economists think they're being too conservative.
[citation needed] on the "most economists" thing, but generally when we talk about banks being "too conservative", it's not in the sense that they need to start running up massive Ponzi schemes to inflate their stock prices. Right now, the investment banking marketplace ("Big Money" if you will) is suffering from a tremendous dearth of good investment opportunities.

The original purpose of stock markets, as Adam Smith so famously documented back in the 18th century, is to provide a ready supply of capital to fund increases in production capacity. What Smith failed to document, and what became one of John Maynard Keynes' key insights, is that if consumer demand is insufficient to buy all the products that are being made, there is no place for investment capital to go that will generate substantial returns. In this situation — a "general glut" of savings — investors will desperately chase anything that offers the possibility of a higher return, no matter how risky, which is exactly how new bubbles get generated.

Right now, markets are flush with money — there is such insane amount of wealth that it's hard to comprehend in a human brain just floating around, searching for something to put it to use. The crucial need in our economy is to get that money to where it can create consumer demand. Since the markets are patently unable to do this, the government must step in to stimulate the economy, whether by taxation or borrowing,

Now, you are right about one thing: it is not true that "breaking up the banks" necessarily carries any direct economic benefit. The rationale for it (aside from populist anger at The Man) is that it helps mitigate the systemic risk caused by large institutions that might threaten the global financial system again were they to suddenly go under. It's the "don't put all your eggs in one basket" mantra. There are also lessons about monopoly and monopsony power that are beyond the scope of this post.

The other moral aspect to the 2008 financial crisis is that not a single major bank executive went to jail or was even prosecuted for what was essentially a giant fraud job perpetrated on American consumers. We'll throw a man in the pokey for failing to pay back a $500 loan but when someone colludes in a scheme that sucks $14 trillion out of the global economy, he gets a $50 million bonus. This is at the root of the anger at Wall Street that is channeled by such folks as Warren and Sanders. It is absolutely justified, it is very real, and believe it or not, it helped get Donald Trump elected, because people saw Hillary Clinton (fairly or not) as being in league with the big banks.

Where I take issue with Warren and Sanders is in their presentation of solutions to these problems. Warren does a better job of it, I think; when you actually listen to the details of her policy statements rather than the applause lines of her speeches, she's got a fairly pragmatic, Keynesian view of things. Sanders, I think, has more populism and less pragmatism, which is part of why I didn't support him enthusiastically for the nomination. But the problem with economics is that it's really hard to explain to laymen who find it challenging to balance their checkbooks, never mind understand Hicksian interest models. Fiscal multipliers and IS-LM modeling don't make for sexy TV sound bites or inspiring campaign slogans.

The minimum wage issue is worth an entirely separate mega-post, and I'm not sure it's a conversation I am prepared to have in the U.S. Politics thread, where it's going to get swamped and forgotten about.

edited 17th Nov '16 7:54:38 AM by Fighteer

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Rationalinsanity from Halifax, Canada Since: Aug, 2010 Relationship Status: It's complicated
#156079: Nov 17th 2016 at 7:08:38 AM

Also, if Trump really shits the bed Obama's numbers will do what Clinton's did during the Dubya years, go up fueled on pure nostalgia.

Politics is the skilled use of blunt objects.
AlleyOop Since: Oct, 2010
#156080: Nov 17th 2016 at 7:13:20 AM

It's funny how a lot of Trump voters are labor union members, or the types who would've been in one if the right hadn't gutted union rights so hard. I don't have a particular love for unions myself, as I've seen the teachers unions at my school rally multiple times around people who I personally knew to be quite abusive sometimes, even to me, and were clearly unfit for the job, simply because they were one of them, but it's something the Democrats ought to capitalize on.

edited 17th Nov '16 7:34:47 AM by AlleyOop

CaptainCapsase from Orbiting Sagittarius A* Since: Jan, 2015
#156081: Nov 17th 2016 at 7:15:00 AM

[up] Organized labor in the united states is extremely impotent in the vast majority of states. Some of things unions do may be irritating, but there's a stark difference between working in a state which has right to work laws in place and a state which does not.

CaptainCapsase from Orbiting Sagittarius A* Since: Jan, 2015
Draghinazzo (4 Score & 7 Years Ago) Relationship Status: I get a feeling so complicated...
#156085: Nov 17th 2016 at 7:32:19 AM

So what are the chances of the content of those calls leaking out if he continues to do that?

PotatoesRock Since: Oct, 2012
#156086: Nov 17th 2016 at 7:34:16 AM

Likely.

Trump's presidency is going to be a flaming shit show of racism, bigotry, sexism, unsecure information and staff and a general rolling turd.

RedRob Since: Feb, 2016 Relationship Status: One Is The Loneliest Number
#156087: Nov 17th 2016 at 7:34:55 AM

I'm not sure if I should be pissed at the stupidity, or laugh at the sheer irony.

A rose by any other name would smell as sweet Unless I grew it. In that case, throw it in the trash.
NoName999 Since: May, 2011
#156088: Nov 17th 2016 at 7:36:04 AM

And of course, the mainstream "liberal" media will ignore this.

Draghinazzo (4 Score & 7 Years Ago) Relationship Status: I get a feeling so complicated...
#156089: Nov 17th 2016 at 7:37:11 AM

Will they? That's free ratings for them.

...oh right, it's Trump FUUUUUUUUUUUUUUUUUCK

Pseudopartition Screaming Into The Void from The Cretaeceous Since: Dec, 2013 Relationship Status: YOU'RE TEARING ME APART LISA
Screaming Into The Void
#156090: Nov 17th 2016 at 7:41:21 AM

(Ann Lowery) Just to drive the point home: Trump has been talking to world leaders on unsecured lines without being briefed or prepped for the calls.
Okay, look -

I never again want to hear a single. damn. complaint. about the fucking email scandal from the right wing, Bernie or Busters, the people who didn't vote out of apathy, or Trump/third-party voters. For the rest of my life.

But I probably will, because very few people understand the definition of hypocrisy.

Draghinazzo (4 Score & 7 Years Ago) Relationship Status: I get a feeling so complicated...
#156091: Nov 17th 2016 at 7:42:31 AM

"Those security measures are a joke anyway!!! #Drain The Swamp"

This is gonna be a rough 4 years.

PushoverMediaCritic I'm sorry Tien, but I must go all out. from the Italy of America Since: Jul, 2015 Relationship Status: watch?v=dQw4w9WgXcQ
I'm sorry Tien, but I must go all out.
#156092: Nov 17th 2016 at 7:42:58 AM

I love the people who are sarcastically commenting that at least it wasn't over E-Mail.

NoName999 Since: May, 2011
#156093: Nov 17th 2016 at 7:45:50 AM

If the Democrats were smart they would get Sanders to jump all over these "DAMN PHONECALLS."

If the FBI was smart.... they would actually do their damn job.

But alas...

Draghinazzo (4 Score & 7 Years Ago) Relationship Status: I get a feeling so complicated...
#156094: Nov 17th 2016 at 7:46:03 AM

You know what? Wasn't there something about Trump having his own email server in some kind of problem?

It would be absolutely hilarious if there was some kind of email scandal while Trump is in office, just to watch the sheer denial that would take place.

speedyboris Since: Feb, 2010
#156095: Nov 17th 2016 at 7:53:09 AM

James Clapper resigns. Not a fan of the guy, but I just hope Trump doesn't replace him with somebody worse.

CaptainCapsase from Orbiting Sagittarius A* Since: Jan, 2015
#156096: Nov 17th 2016 at 7:54:22 AM

[up] That's one of several positions Michael Flynn might be getting.

AlleyOop Since: Oct, 2010
#156097: Nov 17th 2016 at 7:56:46 AM

Might as well exercise our right to post anti-Trump speech while we can before he appoints one of his cronies. Fuck him.

TerminusEst from the Land of Winter and Stars Since: Feb, 2010
#156098: Nov 17th 2016 at 8:00:30 AM

Jon Stewart says a few words on the American project.

Si Vis Pacem, Para Perkele
Fighteer Lost in Space from The Time Vortex (Time Abyss) Relationship Status: TV Tropes ruined my love life
Lost in Space
#156099: Nov 17th 2016 at 8:02:27 AM

We complained bitterly about being forced to vote for a Democrat with supposed integrity issues, so we voted in a Republican with vastly worse integrity issues. Murica!

"It's Occam's Shuriken! If the answer is elusive, never rule out ninjas!"
Pseudopartition Screaming Into The Void from The Cretaeceous Since: Dec, 2013 Relationship Status: YOU'RE TEARING ME APART LISA

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