# Conversation and Fun > Just Conversation >  Regulation, fairness, mortgages, and our financial system

## Spexvet

My sentiments, exactly:
*



Robert Reich: Now let me get this straight: Some of the dollars I'm sending to Washington this time of year are being used to backstop Wall Street investment bankers, hedge fund and private equity managers, and anybody else associated with a borrower that's too big to fail.
The reason they're too big to fail is they've borrowed so much from our pension funds and money-market funds that if they went bust, our savings would disappear. Even the danger of their going bust might make us so anxious we'd demand our money, which would close down the entire financial system.
Now, the reason they've been able to borrow so much from us without putting up much of their own capital is they're unregulated, and don't have to put up their own money. The tax code also rewards them to treat the earnings they get on the investments they make with the money you and I lend them as capital gains rather than ordinary income. So many of them are paying taxes at a lower marginal tax rate than you and I are paying.
Finally, when the risky investments they've made with our money go bad, we get a housing crisis, and the value of our homes -- our biggest assets -- plummets. And our pension funds get socked. Yet Wall Street executives continue to pull in whopping incomes. James Cayne, the former CEO of Bear Stearns, left the company with a $232 million pay package. That's because when they place risky bets that pay off, they get the windfall, and when their bets go bad, they're bailed out with our tax dollars.
This just doesn't make a lot of sense to me. We want a tax system that rewards risk taking. But not any risks -- and not one where it's heads they win and tails we lose.
			
		

from here*

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## Scout249

the busines aspect of this country needs to solely and independently managed by a "Warren Buffet" and his management team.  Politicians and lawyers, most of whom couldn't successfully startup and run a private business, are not the answer.  The article you posted is only the tip of the iceberg of widespread poor financial responsibility and accountability of our current system.  I personally don't see anything changing.  Someday tho all our financial problems will come to a point where no one will be able to save the system.  We can't continue to operate as the government does indefinately...you can't, I can't, and they can't.

On a positive note, I believe there are very qualified citizens in this country who know what to do and how to do it.  With the revenues this country generates, the right financial team could make it solvent.

Scout

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## rbaker

We are going to take some money from the public trough to bail out these bozos but we will also put in place new regulations to try to curb their greed in the future. We seem to do this every few years going all the way back to the intercontinental railroad (or the Temple of Solomon.)

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## hcjilson

In fairness, it was either that, or watch the whole house of cards, called our economy, come down. If Stearns was allowed to go down, Lehman, and Solomon et al,  would have followed within day's. etc etc!

PS We're not out of the woods yet....

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## Grubendol

Robert Reich always seems to have his finger on the pulse of things pretty well…part of the reason that labor…and also the owner/employer sector…were in better shape during the Clinton administration.  The profits may have been as insanely high for corporations then, but at least the greed was regulated so it kept itself from eating away at the base of it all.

  Regulation is a necessary aspect of the economic sector or the greed destroys everything it’s trying to reap.

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## rbaker

I have nothing against curbing corporate greed as long as it doesn't effect my wallet. Living as I am on a relatively fixed income I am more concerned over government greed  as represented by the present outrageous taxes and fees that I must pony up every three months. I just hope and pray that we can keep the socialists out of the White House come November.

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## Grubendol

Well, it seems to me in my limited awareness of things, that the Bush Administration has been more greedy with our money then any Democratic administration in recent history.  They have cut taxes on the wealthy and have not done the same for the lower and middle classes.  They have spent hand over fist on no-bid contracts, all on borrowed money…printing money without releasing the information on how much is being printed (previously an unprecedented behavior), creating a hidden inflation which we are just beginning to see the signs of with the “tax on the poor and working” with the insanely high fuel prices.  The fuel prices trickle down into higher food prices, which impact the lower incomes more than it does the higher incomes.

  Your “taxes” may be lower, but you’re paying more for goods.  I’d rather pay higher taxes personally, especially since they will hit those who can afford them more than they will people like me (which is the opposite of the current situation with the wealthy reaping the benefits of an unfair taxing system)

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## Pete Hanlin

Funny... I'm in the middle class, and my taxes were cut under the Bush adminstration.  Most of my coworkers are middle class and, gee- their taxes went down as well.

Part of the reason fuel prices are up is the weakness of the dollar- since fuel is imported when the dollar is weaker prices are going to go up.  Too bad we don't tap into all the natural resources available _in our own country_ (such as ANWR)...

As I've noted repeatedly, the taxing system isn't unfair- because the folks with the top 10% of income pay slightly more than 10% of the total taxes (that would seem to be quite fair).  What you are really advocating is an _unfair_ tax system in which the "rich" (however that is defined) pay a higher percentage of total taxes compared to their percentage of total income.

The present lending crisis can be blamed on banks which circumvented existing laws (i.e., banks which have been irresponsible with their lending)- and consumers who were irresponsible in their borrowing.  The result will be economic pain (kinda like the pain that came after the irresponsible .com investing that occurred during the Clinton administrations).  

Just as the Clinton Administration cannot be legitimately blamed for the crash after the .com bubble burst (even though much of the economic success during that admin was due to irresponsible stock market investing), blaming the Bush Administration for irresponsible lending (which has been a boon to the economy these past few years) is a bit of a stretch.

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## rbaker

> The present lending crisis can be blamed on banks which circumvented existing laws (i.e., banks which have been irresponsible with their lending)- and consumers who were irresponsible in their borrowing.  The result will be economic pain (kinda like the pain that came after the irresponsible .com investing that occurred during the Clinton administrations).


Not the banks. They are regulated up the wazoo. Its the mortgage companies that are presently pretty much unregulated that caused the problem. Hopefully they will soon fall under new regulations and we can all rest easy again.

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## FullCircle

> Its the mortgage companies that are presently pretty much unregulated that caused the problem


And let's not forget the consumers. Those home buyers that should never have been home buyers.  Buying something they simply couldn't afford, not reading the contract and also not having a real estate attorney explain to them what they didn't understand BEFORE signing.

My DH and I were just explaining all of this to my stepson this weekend. I showed him the ammount of paperwork that needs to be signed, as well as where it showed our payment breakdown (359 payments of x, 1 payment of x)  We explained there is no pride in not notifying your creditors when your income status changes and the most important thing that we stressed -being a homeowner is a priveledge, not a right.

I have little empathy for many of the people that were on the losing end of these exotic loans and ARMS. Obviously there are exceptions, but even when a very close family member lost his house that he had built himself, I put the majority of the responsibility on him.

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## Spexvet

> Funny... I'm in the middle class, and my taxes were cut under the Bush adminstration. Most of my coworkers are middle class and, gee- their taxes went down as well.


I'll bet that weathy peoples' taxes went down Waaaaaayyyy more than yours did. And that's not fair.




> Part of the reason fuel prices are up is the weakness of the dollar- since fuel is imported when the dollar is weaker prices are going to go up.


Wrong. Oil is traded in US dollars, so the strength of the dollar doesn't impact the price of oil. From here:




> There is though one major obstacle to this happening: oil. Oil is not just by far the most important commodity traded internationally, it is the lifeblood of all modern industrialised economies. If you don't have oil, you have to buy it. And if you want to buy oil on the international markets, you usually have to have dollars. Until recently all OPEC countries agreed to sell their oil for dollars only. So long as this remained the case, the euro was unlikely to become the major reserve currency: there is not a lot of point in stockpiling euros if every time you need to buy oil you have to change them into dollars. This arrangement also meant that the US effectively part-controlled the entire world oil market: you could only buy oil if you had dollars, and only one country had the right to print dollars - the US.


and 




> But the more dollars there are circulating outside the US, or invested by foreign owners in American assets, the more the rest of the world has had to provide the US with goods and services in exchange for these dollars. The dollars cost the US next to nothing to produce, so the fact that the world uses the currency in this way means that the US is importing vast quantities of goods and services virtually for free.





> Too bad we don't tap into all the natural resources available _in our own country_ (such as ANWR)...


I'm all for drilling and dumping sludge in _your_ back yard, Pete.:p




> As I've noted repeatedly, the taxing system isn't unfair- because the folks with the top 10&#37; of income pay slightly more than 10% of the total taxes (that would seem to be quite fair). What you are really advocating is an _unfair_ tax system in which the "rich" (however that is defined) pay a higher percentage of total taxes compared to their percentage of total income.


That's not the only way to assess what's "fair" since disposable income is really what differentiates wealth from poverty. What would be more "fair" would be to calculate the amount that it costs to "live". A reasonable amount ("reasonable" to be defined by others more capable, at a future date) for food, clothing, housing, education, transportation, childcare, etc. should not be taxed at all. ALL income above that should be subject to a flat tax - with NO deductions. Just an idea in the works, but more "fair" than our current system.




> The present lending crisis can be blamed on banks which circumvented existing laws (i.e., banks which have been irresponsible with their lending)- and consumers who were irresponsible in their borrowing. The result will be economic pain (kinda like the pain that came after the irresponsible .com investing that occurred during the Clinton administrations). 
> ...





> Not the banks. They are regulated up the wazoo. Its the mortgage companies that are presently pretty much unregulated that caused the problem. Hopefully they will soon fall under new regulations and we can all rest easy again.


More regulation or increased compliance to existing regulation = more government enforcement employees = increased goverment spending = higher taxes = unhappy Pete and rbaker. What's the answer?




> And let's not forget the consumers. Those home buyers that should never have been home buyers. Buying something they simply couldn't afford, not reading the contract and also not having a real estate attorney explain to them what they didn't understand BEFORE signing.


I have more pity for first time buyers than for the consumers who went from a 3 bedroom modest home to a 5 bedroom 3.5 bath with in-home theater and pool, who signed up for an "interest only" mortgage. 




> My DH and I ...


You have a Designated Hitter? Cool!:D

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## Grubendol

Correct in a technical way that I am arguing for an unfair tax system>  It is called a Progressive Tax and it was originally proposed by Adam Smith in a "Wealth of Nations".  The wealthy pay a higher tax rate, which is technically a higher tax, but as a proportion of their living wages, it has a much smaller impact on their ability to sustain themselves and their family.  A Progressive Tax System is designed to help ensure that the poor can afford food and home and other necessities...and if done properly it provides them an opportunity to climb out of the low income state.




> The idea of a progressive income tax has garnered support from economists and political scientists of many different ideologies - ranging from Adam Smith to Karl Marx, although there are differences of opinion about the optimal level of progressivity. Some economists[5] trace the origin of modern progressive taxation to Adam Smith, who wrote in _The Wealth of Nations_:
>  The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.[6] A century later, Karl Marx argued for a progressive income tax in _The Communist Manifesto_: "In the most advanced countries the following will be pretty generally applicable: a heavy progressive or graduated income tax."[7]

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## HarryChiling

> I have little empathy for many of the people that were on the losing end of these exotic loans and ARMS. Obviously there are exceptions, but even when a very close family member lost his house that he had built himself, I put the majority of the responsibility on him.


I have a few family members that are real estate inestors and Interest only and ARMS are great mortgage tools if utilized correctly.

When investing a home to flip (buy fix up and then sell for profit) the holding costs (mortgage) is a very real cost that east profit away.  Investors often sought out interest only loans because they would have bought the house and paid lower holding costs while in the process of rehabing these houses.  In every case the idea was to sell the house before the principal was due and walk away with a profit and the banks were happy because they walked away with a pure profit as well.  The mortgage industry offered these options to people that were purchasing homes in th eguis eof lower costs which is not the case with an interest only loan, to top that off the home prices were inflated by the market as well as the unscrupulous appraisers which would purposely inflate home prices to get the client into the home with very little cost.  Also traditional mortgages require that the buyer have 20% down on the home or they would need to pay PMI (priviate mortgage insurance) why?  Beacuse without 20% down the bank is taking on the risk with these homes similar to the way we need to put inventory on sale when it's not moving the banks would need to put a home on sale to get them off their books, a good way of doing this is by selling the home for less than it's worth to make a quick sale.  What alot of people were doing was taking out two loans the second to cover the 20% so they wouldn't have to pay the PMI, but hat just meant that the risk was split and the collateral was the same on each loan the home.  The mortgage industry had a lot of blame but so does the buyer.  I have a few friends that make less than me living in homes that are three times as big at four times the cost of my home.  Irresponsible buying was encouraged by the lenders and irresponsible buying was performed byt he buyer so both parties have blame.

When I bought my home for 3 years before me and my wife lived in an 500 square foot efficiency in the rough neck neighborhood of Baltimore City (ever seen the wire, they can't shoot in the neighborhood we lived in after 5:00PM), it allowed us to sacrifice and pay down debt and build a deposit for our home.  Our mortgage company approved our loan for 3 times what we spent and we knew we could afford it, how?  Because we did not want to risk living in the hood for the rest of our days if things went sour.  Too many people thought they were entitled to a home.  Same thing happened with the stock market during Clintons administration everyone wanted to play day trader or invest in companies forgetting that it is an invvestment.

You gotta pay to play and unfortunately alot of people wanted to play on another persons dime and now we are fronting the bill for those boobs.

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## FullCircle

> I have more pity for first time buyers than for the consumers who went from a 3 bedroom modest home to a 5 bedroom 3.5 bath with in-home theater and pool, who signed up for an "interest only" mortgage.


My Designated Hitter and I (lol! On most days, he'd be my Dear Husband. Tho I could use a DH) were 1st time buyers in the midst of all these funky ARMs and no money down loans. I've got a standard 30 fixed that I've refinanced 2x since we bought. The difference between us and those 1st timers that lost their homes is one simple word. RESPONSIBILITY. we took responsibility for our purchase and did our homeswork so we wouldn't be caught with our pants down. Our original loan was an 80/20, the 20&#37; being basically a HELOC. We rolled that bad boy as fast as we could after closing.

What I'm noticing is too much lack of self responsibility nowadays. "It's not my fault I can't pay my mortgage, I didn't know that my 5 year ARM was going to do that." "It's not my fault I rolled my $50,000 credit card debit into my refinance and did it as an ARM then rather than planning for the increase, just spent and spent AND ran my cards back up." It's the mortgage company's fault.

Now, those that got caught up in massive layoffs and whatnot, I dont group them in completely with this crowd. Those folks I have some compassion for.

P.S. with our 80/20, we had no PMI but the APR on the 20% was prime plus 2.5%

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## Pete Hanlin

I'm all for drilling and dumping sludge in _your_ back yard, Pete.:p
Well, there's the problem Spexvet...  In 1998, the USGS estimated a 95% chance that 11.6 billion barrels of oil are present on federal lands- with a 5% chance that 31.5 billion barrels or more are present.  The USGS has never done a survey of the 1/4 acre lot I live upon, but if there is 11.6 barrels of oil down there, I'm all for drilling it (of course, my homeowner's association might have something to say about that :^).

ANWR is above the Artic Circle, doesn't even see the sun for several months of the year, and is home to about 30,000 people and some wildlife.  If you're opposed to drilling there, I guess you will be opposed to drilling _anywhere_ in the US as well (except for, apparently, my backyard :^).

Of course, it will be argued that 11.6-31.5 billion barrels is insignificant (funny, given its potentially comparable to the Prudhoe Bay)...  It will be argued that we should be focused on reducing consumption...  As a result, we'll just do _nothing_ to tap into the natural resources of the US.  Its the same illogical rationale found in the state of California, which uses more and more power every year, but refuses to build a power plant anywhere in the state.

Well, I guess we're doing _something_ about conservation- after all, incandescent lightbulbs are being phased out by mandate (of course, the silly looking fluorescent bulbs that replace them have mercury in them which is hazardous to dispose, but...).

About the only resource you seem to want to tap is "rich people's" money.  Funny, you react in horror at the prospect of drilling for oil on land owned by the American people, but have zero qualms over drilling for money from the bank accounts of those who make more than whatever sum you consider "reasonable."  Guess its the same philosophy (raise taxes- but not from my bank account).

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## Grubendol

But, see the problem with drilling in ANWR is not just about how many people live there, or how much sunlight there is there.  It’s within the arctic circle, which is part of the problem.  The speed with which polar ice caps are melting, the polar bear has a legitimate chance of becoming extinct because of it, and building the roads and pipelines to extract the oil would impact much more than just the region of ANWR, not to mention the pollution and global warming impact on the region.  The permafrost of the area isn’t even permafrost anymore so you have all kinds of issues with building of roads.

  How much oil would be expended to withdraw that oil?  Would that oil EVEN stay in the US?  The most likely customer for the ANWR oil would be the Chinese, and potentially the west coast of the US, but the middle America and the East wouldn’t see a drop.

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## rinselberg

To me, it's just a question of how much oil could be produced from ANWR, vs. the environmental impacts. How much oil production, net? Obviously some energy in the form of oil will be burned in order to set up and maintain the projected oil production in ANWR, but that's always a factor; it's not peculiar to ANWR.

Where the ANWR oil goes--to China or to the West Coast--is beside the point. If a car in China or San Francisco burns oil from ANWR, it's not burning an equivalent amount of oil from Canada or Arabia or somewhere else. And that oil could go into a vehicle in Illinois or New York.

I'm onboard with the perils of global warming and the need for alternative energy sources, but I think that the continuing debates about ANWR that appear in the mainstream media (like OptiBoard) have become caught up with an encumbering sentimentality.

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## Spexvet

> ...About the only resource you seem to want to tap is "rich people's" money.


"Rich people" will survive after they are tapped for their fair share, while some flora and fauna in ANWR will not.




> Funny, you react in horror at the prospect of drilling for oil on land owned by the American people,


I don't think I react in horror. I believe that spending money on more fossil fuel production is fruitless. I'll bet that if you took the amount it would take to get oil from ANWR and spent it developing alternative fuels, we would have viable alternatives in less time than we would have oil from ANWR.




> but have zero qualms over drilling for money from the bank accounts of those who make more than whatever sum you consider "reasonable."


After paying their fair share of taxes, those people will still have bank accounts containing what even you would consider "reasonable" and will will still make more than you would consider "reasonable". I'm not talking about increasing taxes on people with $120,000 household incomes - I'm talking about wealthy people who can afford to pay their fair share and still live the good life. Maybe they can sacrifice one of their annual trips to France or cut back from a Bently to a Volvo.




> Guess its the same philosophy (raise taxes- but not from my bank account).


Touche.

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## Pete Hanlin

I don't think I react in horror. I believe that spending money on more fossil fuel production is fruitless. I'll bet that if you took the amount it would take to get oil from ANWR and spent it developing alternative fuels, we would have viable alternatives in less time than we would have oil from ANWR.
We will have to just agree to disagree on this point. Currently, fossil fuels play an enormous role in our economy and society. Additionally, the US has a huge trade deficit (yes, in no small part because of the exporting of manufacturing jobs to countries with work forces willing to work for smaller wages). Given that combination, I do not think it is "fruitless" to tap into an extremely valuable and necessary natural resource.

It also does not change the fact that alternative sources of energy are not capable of producing the energy requirements of the planet at this- or any foreseeable- time. The problem is fossil fuels contain a lot of energy potential compared to their volume (which is a major problem for wind and solar energy- the space required to produce the useable energy contained in a gallon of fossil fuel is relatively large). Invest all you want, but it simply requires too much space to produce large amounts of wind-generated power. The only viable alternatives currently feasible are nuclear-driven powerplants (which have been ignored by the US for far too long) and hydroelectric power (both nuclear and hydroelectric draw fire from the same environmentalists who complain about global warming- even though both of these sources are "carbon-free"). It also takes too much energy to create hydrogen and the chemicals necessary to create batteries create a whole different set of pollution problems.

I'm not against conservation and R&D, but I am realistic. If there was an economically viable way to devise an economically viable alternative fuel source, one of those rich people we all hate would be looking to develop it to make a profit (in fact, the owner of Virgin is currently investing in finding a viable alternative to jet fuel). Of course, if we limit the amount of money one can make from such an investment by taxing them down to a "reasonable" income, I suppose the incentive to invest may be somewhat diminished...

After paying their fair share of taxes, those people will still have bank accounts containing what even you would consider "reasonable" and will will still make more than you would consider "reasonable".
Again, we may differ on what is considered "reasonable" (as well as the definition of "fair share"). For example, according to recently disclosed income information, the Clintons paid $34 million in taxes against $109 million in income over the past 8 years. Is the $74 million they retained "reasonable?" Given that the Clintons are a couple who have risen to the very top of their professions (politics, author, speaker, consulting, etc.), I believe that amount is perfectly reasonable. I certainly believe it is unreasonable to expect them to contribute _more_ than 31&#37; of their income to society. Could you define the exact percentage of their income to which you feel society has a "reasonable" claim?

But, see the problem with drilling in ANWR is not just about how many people live there, or how much sunlight there is there. It’s within the arctic circle, which is part of the problem. The speed with which polar ice caps are melting, the polar bear has a legitimate chance of becoming extinct because of it, and building the roads and pipelines to extract the oil would impact much more than just the region of ANWR, not to mention the pollution and global warming impact on the region. The permafrost of the area isn’t even permafrost anymore so you have all kinds of issues with building of roads.
For the sake of this conversation, I'm willing to suspend my sense of reality for a moment and assume human activity is a large contributor to the warming of the Earth's climate. That does not change the fact that we depend on and consume fossil fuels. Until our need for fossil fuels diminishes, the prudent course of action would be to harvest the reserves which occur in the US (somehow, I think a company drilling in ANWR would be held to a tighter environmental standard than a company drilling in the Middle East or Venezuala).

Back to reality- the planet is going to continue to become warmer (even if all human activity ended as of midnight tonight). The planet goes through ice ages and warming cycles- we're currently emerging from an ice age. No, I'm not saying the production of greenhouse gasses has no effect on the climate. However, the ice shelf of Antartica is going to diminish whether humans exist on the planet or not- because the planet is in a warming stage.

Actually, once the planet warms to the point where the North Atlantic loses its current pattern, the Earth will become much colder very quickly (assuming the polar bears are still around, they'll have PLENTY of habitat at that point- probably spend their Summers in Texas)!

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## rbaker

A few weeks ago I heard former New Hampshie governor John Sununu, PhD speak on the ANWAR oil reserves. He commented on engineering studies by the US Fish and Wildlife Service which showed that the area required to drill and produce oil would not exceed the area of Pease Air Force Base. In addition, the environmental impact would be positive.

This subject is far too important to be politicized. It is an engineering problem which requires an engineering solution. The emotional arguments have already hindered nuclear power production and have increased our dependence on petroleum. Like it or not we need increasing amounts of energy. If your concern is pollution you had best be keeping your eye on India and China.

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## rinselberg

> [When] the planet warms to the point where the Atlantic [oceanic currents] lose their current pattern, the Earth will become much colder very quickly. (Assuming the polar bears are still around, they'll have PLENTY of habitat at that point--probably spend their summers in Texas..)


All the more reason to be seriously concerned about Anthropogenic Global Warming.

Another Ice Age may be inevitable, but there's no advantage for humanity (that I can see) in speeding its arrival.



Don't risk staying after school and writing this 100 times.. click on the "chalkboard" to learn more about bunk-peddling fiction writer Michael Crichton and his global climate Kool-Aid.

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## rinselberg

> . . . alternative sources of energy are not capable of producing the energy requirements of the planet at this--or any foreseeable- time. The problem is fossil fuels contain a lot of energy potential compared to their volume (which is a major problem for wind and solar energy--the space required to produce the useable energy contained in a gallon of fossil fuel is relatively large). Invest all you want, but it simply requires too much space to produce large amounts of wind-generated power. The only viable alternatives currently feasible are nuclear-driven powerplants (which have been ignored by the US for far too long) and hydroelectric power (both nuclear and hydroelectric draw fire from the same environmentalists who complain about global warming--even though both of these sources are "carbon-free"). It also takes too much energy to create hydrogen and the chemicals necessary to create batteries create a whole different set of pollution problems.


This is a fairly accurate analysis for the near term. Looking farther ahead: There are other ways to generate electricity from wind that may eventually catch on. In particular, generating electricity from high altitude winds using high altitude power generators, kept aloft either by lighter than air technology or helicopter-like systems. Wave farms using marine and river tides and currents have untapped potential.

Ultimately, I like the possibility of a large constellation of earth-orbiting solar power converters beaming power in the form of microwave radiation down to earthbound receivers.

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## rbaker

> Ultimately, I like the possibility of a large constellation of earth-orbiting solar power converters beaming power in the form of microwave radiation down to earthbound receivers.


Please don't forget to consider the attenuation of the microwave energy that would be caused by the earths atmosphere in your equation. You may find the loss unacceptable.

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## rinselberg

Since wind power has been referenced in this discussion, I would like to comment briefly on what the future of that technology may look like:



SkyWindPower's tethered flying generator concept for producing electricity from high altitude winds was the subject of a recent story on CNN.



The Magenn Air Rotor System is a tethered, lighter-than-air wind-powered electricity generator.



KiteGen's kite-powered merry-go-round concept (as reported by WIRED) aims to convert wind power into electricity on a scale that could compete with nuclear power plants.



A concept called "Ladder Mill" from the Netherlands.


_There are those who say that the future of wind-powered electricity is truly "up in the air".._

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## Spexvet

> I don't think I react in horror. I believe that spending money on more fossil fuel production is fruitless. I'll bet that if you took the amount it would take to get oil from ANWR and spent it developing alternative fuels, we would have viable alternatives in less time than we would have oil from ANWR.
> We will have to just agree to disagree on this point. Currently, fossil fuels play an enormous role in our economy and society. Additionally, the US has a huge trade deficit (yes, in no small part because of the exporting of manufacturing jobs to countries with work forces willing to work for smaller wages). Given that combination, I do not think it is "fruitless" to tap into an extremely valuable and necessary natural resource.
> 
> It also does not change the fact that alternative sources of energy are not capable of producing the energy requirements of the planet at this- or any foreseeable- time. The problem is fossil fuels contain a lot of energy potential compared to their volume (which is a major problem for wind and solar energy- the space required to produce the useable energy contained in a gallon of fossil fuel is relatively large). Invest all you want, but it simply requires too much space to produce large amounts of wind-generated power. The only viable alternatives currently feasible are nuclear-driven powerplants (which have been ignored by the US for far too long) and hydroelectric power (both nuclear and hydroelectric draw fire from the same environmentalists who complain about global warming- even though both of these sources are "carbon-free"). It also takes too much energy to create hydrogen and the chemicals necessary to create batteries create a whole different set of pollution problems.
> 
> I'm not against conservation and R&D, but I am realistic. If there was an economically viable way to devise an economically viable alternative fuel source, one of those rich people we all hate would be looking to develop it to make a profit (in fact, the owner of Virgin is currently investing in finding a viable alternative to jet fuel).


I think you're "misunderestimating" the ingenuity and resourcefulness of the American people - what kind of patriot are you :p? There was no atom bomb before the Manhattan Project. We had a goal, we committed to that goal, we invested money and our best minds, and we acheived that goal. We can do the same with alternative fuels. Instead of exporting oil, we can export this new fuel, or the technology. It would take YEARS and hundreds of millions of dollars to see an impact from ANWR oil - plenty of time and money to develop an alternative, and the alternative may not be wind, hydro, nuke, batteries, hydrogen, or anything else that has already been thought of. On the other hand, maybe it will be safe "nucular" energy - you and I just don't know.

Oil is used in products other than fuels. When we run out of oil, we run out of plastics, some medicines, lubricants, etc. Let's get the fuel out of the way, so we can reserve oil for other important products.




> Of course, if we limit the amount of money one can make from such an investment by taxing them down to a "reasonable" income, I suppose the incentive to invest may be somewhat diminished...


I don't get this "If I can't make $100 million, I'm not going to invest to make $10 million" attitude that conservatives think is so prevalent. If you had a job that paid $50K/year, would you pass on a $100K/year job because it didn't pay $200K/year? Of course not. Even wealthy people have to do something with their money. If they don't invest in alternative fuels, they'll buy something, and the guy who makes the profit from that sale can invest in alternative fuels. If the wealthy guy puts his money in the bank, the bank can lend it to someone to develop alternative fuels.




> After paying their fair share of taxes, those people will still have bank accounts containing what even you would consider "reasonable" and will will still make more than you would consider "reasonable".





> Again, we may differ on what is considered "reasonable" (as well as the definition of "fair share"). For example, according to recently disclosed income information, the Clintons paid $34 million in taxes against $109 million in income over the past 8 years. Is the $74 million they retained "reasonable?" Given that the Clintons are a couple who have risen to the very top of their professions (politics, author, speaker, consulting, etc.), I believe that amount is perfectly reasonable. I certainly believe it is unreasonable to expect them to contribute _more_ than 31% of their income to society.


My issue is with wealthy people who DON'T pay their fair share - and I'm sure their are plenty of them. Wealthy people have the means to avoid paying taxes. I'll bet most people with that level of income did not pay 31% taxes.




> Could you define the exact percentage of their income to which you feel society has a "reasonable" claim?


No.

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## Pete Hanlin

My issue is with wealthy people who DON'T pay their fair share - and I'm sure their are plenty of them. Wealthy people have the means to avoid paying taxes. I'll bet most people with that level of income did not pay 31&#37; taxes.
Just to make sure I understand correctly, you feel the 31% the Clinton's paid in taxes was sufficient to be called "fair?"

However, your opinion is that most "rich people" are not as honest or forthcoming as the Clintons and therefore find additional ways to "hide" money.

Realistically speaking, this isn't beyond possibility- the Clintons are politicians and are therefore likely to walk on the conservative side when it comes to avoiding taxes (nice to know they are conservative in at least _one_ respect). Plus, the former President is known for his honesty and forthrightness, so I suppose we can trust him on his taxes. 
:o
You also refrain from defining what percentage of taxation is "fair," but I'll assume 31% must define at least an upper limit (since you feel the Clintons have paid their fair share). So, if I make $200m, as long as I involuntarily donate $62m of my earnings to the federal government I can rightfully expect no condemnation from you- correct?
;)

PS- I read, on average, about 1 novel a week.  I assume Rinselberg's reference is to "State of Fear," which I read a couple of years back.  In this book, the author portrays a group ecologists as a terrorist organization which is attempting to stage horrible events in the guise of global warming to "wake people up" to the problem.  Throughout the book, Chrichton sprinkles numerous references to research which he claims throws doubt on the concept of global warming.  It was a fair to middling book, with a half-decent plot- but I wouldn't base one's view of global warming upon it.  I wholeheartedly believe the planet is indeed warming- I just do not happen to believe mankind is necessarily hastening the warming trend all that much.

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## rbaker

> My issue is with wealthy people who DON'T pay their fair share - and I'm sure their are plenty of them. Wealthy people have the means to avoid paying taxes. I'll bet most people with that level of income did not pay 31&#37; taxes.



There is a clear distinction between tax avoidance and tax fraud and an individuals income has absolutely nothing to do with it. Most of us are undergoing the process of computing our state and federal taxes at this time of the year so we had all better get a grasp of what is legal and what is illegal. The concern is whether a taxpayer is legal or illegal and not whether the taxpayer is moral or immoral. The tax code addresses legal stuff, not moral stuff.

We are retired and nearly all of our income is unearned. In other words, we have already paid income tax on these funds. Instead of stuffing the mattress with money and not having to pay additional taxes on these assets we have invested some of them in  the ownership of corporations through stock and bond purchases. We may receive dividends or we may lose it all (can you say Enron) but we are willing to take that chance. If we do make any profit we will be taxed again and if we lose money it's tough tuba. In the meantime our invested money is used to purchase raw materials, machinery and pay your wages.

We also have some money in tax free municipal and federal bonds. These bonds help pave your roads, run your crappy schools and pay for the medicaid glasses that you sell.

We own 900+ acres of Douglas Fir in Southern Oregon for which we pay very low taxes. You see trees are a natural resource and it is in everyones interest that I keep and maintain fire roads and have a consulting forester manage in order that your children and grandchildren have lumber to build their homes. 

So you had better believe that our CPA takes advantage of every bit of tax relief that is available to us. Anyone who does not seek tax relief is a fool. Typically, those that complain about people taking advantage of tax abatements or any of the other features of the tax code are those who are not paying any taxes in the first place.

So, just what do you think my fair share should be?

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## Spexvet

> There is a clear distinction between tax avoidance and tax fraud and an individuals income has absolutely nothing to do with it. ...



Legal tax avoidance can only be accomplished by those who have the disretionary wealth to make use of "loopholes". If one spends all their money on food, clothing, shelter, etc., they don't have anything left to invest in tax free bonds, or what have you.




> ... Anyone who does not seek tax relief is a fool...


Anyone who avoids paying taxes is not a good citizen.

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## Spexvet

> My issue is with wealthy people who DON'T pay their fair share - and I'm sure their are plenty of them. Wealthy people have the means to avoid paying taxes. I'll bet most people with that level of income did not pay 31% taxes.
> Just to make sure I understand correctly, you feel the 31% the Clinton's paid in taxes was sufficient to be called "fair?"


I think that $74 million spendable income over the last 7 years allows one to lead a very nice lifestyle.




> However, your opinion is that most "rich people" are not as honest or forthcoming as the Clintons and therefore find additional ways to "hide" money.
> 
> Realistically speaking, this isn't beyond possibility- the Clintons are politicians and are therefore likely to walk on the conservative side when it comes to avoiding taxes (nice to know they are conservative in at least _one_ respect). Plus, the former President is known for his honesty and forthrightness, so I suppose we can trust him on his taxes.


You slay me. Clinton lied about an aspect of his personal life, and you insist on making him out to be dishonest. At the same time, in 2004 you (I assume, since you endorsed him) voted for a guy who lied in his official capacity as POTUS. 

And yes, the Clintons would be more likely to be above board paying taxes because Hillary is still an elected official and wants to become President.




> You also refrain from defining what percentage of taxation is "fair," but I'll assume 31% must define at least an upper limit (since you feel the Clintons have paid their fair share). So, if I make $200m, as long as I involuntarily donate $62m of my earnings to the federal government I can rightfully expect no condemnation from you- correct?...


Sure. Making $200m a year is another debate, though. ;)

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## rinselberg

> I assume rinselberg's reference is to [Michael Crichton's novel] "State of Fear" which I read a couple of years back. In this book, the author portrays a group of ecologists as a terrorist organization which is attempting to stage horrible events in the guise of global warming to "wake people up" to the problem. Throughout the book, Crichton sprinkles numerous references to research which he claims throws doubt on the concept of global warming. It was a fair-to-middling book with a half-decent plot, but I wouldn't [form any opinions about global warming from this work of fiction.] I ... believe the planet is indeed warming. I just do not happen to believe [that] mankind is necessarily hastening the warming trend all that much.


We're on opposite sides of the fence about this, because I think that carbon dioxide and other greenhouse chemicals that are a direct or indirect byproduct of human activities _are_ the main factors that are driving global warming.



But I'm relieved to know that Pete's opinion isn't a result of having read Michael Crichton's novel "State of Fear". It sets my teeth on edge when the Crichton novel is cited as if it were a legitimate part of a debate about global warming. And it's happened at least once in the halls of Congress:


> I [just] heard that, in considering the global warming issue, a United States Senator is treating words from [Michael] Crichton as if they had scientific or practical validity.  If so ... Houston, we have a problem!


_James E. Hansen; Director of the NASA Goddard Institute for Space Studies; Climate researcher, Columbia University Earth Institute._


I don't know much about Michael Crichton or whether he had some public agenda to pursue, over and above the writing of a work of fiction, but I've put together an extensive "case" against the fanciful notion that the ideas expressed in Crichton's 2004 novel "State of Fear" have any scientific validity.

My "Crichton dossier" is here!

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## Pete Hanlin

As I recall, Crichton sprinkled several footnotes throughout the book (kinda odd for a fictional novel). I believe some of them did point out that no environmental "model" has been proven accurate more than 20 years or so out.

Point being, the environment is a pretty complex system with a lot of factors. Simply pointing to a 1 degree C rise in some areas of the planet over the past 100 years and laying it all at the feet of greenhouse gasses is a bit over-reaching, IMO. I can get somewhat interested in water pollution (since that is an issue I know causes problems and has root causes that can be realistically addressed). 

I can also get interested in the power problem (the problem, for anyone who is unaware, is that our rate of consumption is increasing globally much faster than our development of additional resources). We need to be building power plants NOW (nuclear, coal, and hydro are my favorite options). The Chinese seem to realize this...

I just can't get too interested in glaciers melting because 1.) I sincerely believe if all human beings were gone tomorrow, the planet would just keep on warming- that's the cycle its in, and 2.) I don't think there is a realistic remedy- even IF the US could do something to curtail its emissions on a large scale (and with the state of our economy and fuel requirements, we really cannot) it wouldn't matter because, 3.) there is a whole developing world out there that wants their slice of the pie- and you are NOT going to keep them from producing greenhouse gasses.

Meanwhile, people drive their battery driven cars (which create other kinds of pollution), install their mercury-laden fluorescent bulbs, and talk about hydrogen as if its a real solution.

You slay me. Clinton lied about an aspect of his personal life, and you insist on making him out to be dishonest. 
I am slayed (slain?) right back... Clinton lied about his personal life (finances are part of your personal life), and you insist on portraying him as basically honest. I have nothing in particular against the man- he's a great communicator and is doing some good in his post-admin life. However, given his history on numerous matters (not just Monica Lewinski), I think its fair to say the former President has a bit of trouble just "telling the truth" (I'm sure you feel the same about "W," and I can see where someone would have that opinion). 

I do believe they are above board with their taxes- because its just too easy to catch them being dishonest- and that would severely limit their ability to run for office and otherwise appear as PC. I do find it interesting that one member of the Clinton team makes $800k lobbying for legislation that the other half of the team is supposedly against...
;)
I sure hope Pennsylvania goes Hillary in a big way! She's done so much damage to her image at this point she is now absolutely unelectable in a national race.

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