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Constitutionality of light bulb ban questioned - Environmental Protection Agency must be called for

Discussion in 'Electrical Engineering' started by dpb, Jun 20, 2008.

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  1. Guest

    |> There needs to be certain regulations on this. Where bad decisions can only
    |> affect ones own profits, the government really has no need to be involved.
    |> But where bad decisions can affect the whole economy, the government has a
    |> genuine interest to be involved.
    |
    | Where do you draw that line? ...other than the obvious fraud
    | involved.

    I draw the line where the decisions affect the public in general, the nation,
    and the economy. For it to be a violation, there has to be regulations or
    laws in place. There are lots of little lines to draw, and I don't have
    all the answers. I just know that where thet are drawn now isn't good
    enough.


    |> Generally, bankruptcy proceedings can separate a loser from his losses.
    |> Those who own a losing business get to lose their business that way.
    |> That may well be an adequate remedy for situations like this. But if
    |> more is needed, maybe jail time for the bad actors?
    |
    | You can jail them for fraud. How do you jail them for bad financial
    | decisions? Your answer is too simple to be of use.

    See above. If the decision involves something that will have an impact
    beyond just the deciders finances, or the finances of his company, then
    it needs to be regulated/legislated. The specifics would depend on what
    is involved. There are lots (thousands) of little areas that might be
    subject to this.

    What I'm proposing is the general idea. Specifics still need to be worked
    out.


    |> I did suspect this housing mess needs to have some people put in jail. But
    |> the laws may not have made it sufficiently clear to do it this time around.
    |> To the extent that is so, the laws need to change.
    |
    | What do you propose to make illegal that isn't already?

    I don't know, yet. If everything done by that executives that caused this
    mess really is already illegal, then lets put the bastards in jail. If we
    can't (now) then we need to explore why not and fix things so we can in
    the future (and make sure they understand these changes).


    |> |> |> | As for taxing imports, this silliness was settled in the 18th Century in
    |> |> |> | Adam Smith's "The Wealth of Nations." Smith proved that everybody benefits
    |> |> |> | when nations do what they do best and freely trade with other nations who
    |> |> |> | also do what they do best.
    |> |> |>
    |> |> |> As long as all nations are on a level playing field, this would be so. But
    |> |> |> it is a fact that most nations outside the USA have governments playing a
    |> |> |> hand in the economies.
    |> |> |
    |> |> | It's impossible for a government to *not* have a hand in economics
    |> |> | and silly to think they should (not).
    |> |>
    |> |> How the governments in places like China are managing their economy compared
    |> |> to the USA is a big contrast. It puts the USA in a weak position.
    |> |
    |> | Also true, but irrelevant.
    |>
    |> You sure to consider a lot of things to be irrelevant.
    |
    | They may have merit but are irrelevant to the point being raised in
    | this thread. IOW, a strawman (or red herring - take your pick).

    Well, for the original thread topic, yeah, China is irrelevant.
     
  2. Guest

    | On 24 Jun 2008 17:20:49 GMT, wrote:
    |
    |>| Hi Phil,
    |>|
    |>| Alternatively, if you don't require that much light, you could simply
    |>| opt for a halogen lamp of a lesser wattage; e.g., a 40-watt Halogen?
    |>| ES provides the same amount of light as a conventional 60-watt
    |>| incandescent and lasts up to four times longer.
    |>|
    |>| If you're still contemplating a low-voltage solution, Philip's IRC
    |>| MR16 are some of the best available.
    |>|
    |>| See:
    |>| http://www.nam.lighting.philips.com/us/ecatalog/halogen/pdf/p-5758.pdf
    |>
    |>5000 hours? Not all that good. Half will be burned out in 3 years of
    |>regular use (about 5 hours a day).
    |
    |
    | Hi Phil,
    |
    | In the context of a regular A19 incandescent lamp with a nominal life
    | of 750 hours to 1,500 hours, 5,000 hours strikes me as pretty good
    | (since our original conversation pertained to standard household
    | incandescents, I limited our options to incandescent and halogen light
    | sources).

    If the ordinary bulb ratings are only that (I really haven't looked in
    ages, since I rarely need to buy them), then the numbers are different.
    What I read in the referenced PDF was that these 5000 hour ratings is a
    50% remaining rate. That's NOT what I see for regular incandescent
    bulbs at 750 hours. Oddly enough, the bulbs that seem to burn out the
    most are the ones in various table lamps subject to lots of vibration.
    All the bulbs in all the hanging lamps and all the ceiling cans have not
    burned out in the 5 years I've been in this house (that my mother had
    built and my father now owns). Most of them are on all evening.


    | If long life is important, some of the new Philips T8s fluorescents
    | have a rated service life of up to 46,000 hours but, then, as you
    | indicated in another thread you refuse to use linear fluorescents in
    | your home due to potential concerns related to Hg. On that basis, I
    | presume we can rule out metal halide as well.

    That's not my primary concern. It is a concern, and one that _may_ limit
    my use of them. My primary concern is the poor spectrum (not the color) of
    every fluorescent light I have ever seen. What I am referring to is that
    the spectrum is not as uniformly continuous as incandescent. These are
    therefore ruled out for critical task lighting areas (especially kitchen
    and shop).
     
  3. Guest

    | Although it varies by state, if we use the U.S. national average, the
    | generation of those additional 6,100 kWhs would release 80 mg of Hg
    | into the environment. At least with the fluorescent lamp, the 1.7 mg
    | contained within can be recycled or properly disposed in a secure
    | landfill (thereby potentially reducing our exposure to 0 mg) whereas
    | the 80 mg of Hg released from the burning of coal indiscriminately
    | pollutes our air, land and water.

    But at least those other releases of Hg are not released in my house.

    Hg is not by primary reason for avoiding fluorescent lights. But it is
    one and would be the primary one if the light quality issue gets solved.

    That's not to say I like the idea of releasing Hg into the air. For every
    incandescent lamp used, we should depricate an equivalent amount of coal
    burned. I'm all for building lots more solar/wind/hydro/nuclear capability
    (provided it is done in the right way).
     
  4. Guest

    | I went to a trade show a few years ago and I saw several companies had a
    | maintenance program that included removing fluorescent tubes, they had a
    | rig with a drum & a device on top with a hole, you'd stick the tubes in
    | & shredder the bulbs, then you can conveniently take out and disposed
    | the scrads in a bag...
    |
    | This is probably good for Factories or Large Building operations.I don't
    | know the name and costs but if someone is interested I can look it up in
    | my files....

    And the mercury went where?
     
  5. Roy

    Roy Guest

    Re: Home Depot Annouces CFL Recycling Programme

    Group: alt.engineering.electrical Date: Wed, Jun 25, 2008, 7:12am
    (EDT+4) From:
    | I went to a trade show a few years ago and I saw several companies had
    a | maintenance program that included removing fluorescent tubes, they
    had a | rig with a drum & a device on top with a hole, you'd stick the
    tubes in | & shredder the bulbs, then you can conveniently take out and
    disposed | the scrads in a bag...
    |
    | This is probably good for Factories or Large Building operations.I
    don't | know the name and costs but if someone is interested I can look
    it up in | my files....
    And the mercury went where?
    -- snippp
    -------------------------------
    I remember I spoke to the reps back then & they have a number of sites
    where they take their hazardous stuff, & I believe they had a list of
    places through-out the US where to deliver the refuse if one was to
    purchase the system [drum & vac]....for ones company - It all sounded
    real fantastic to me too, but just in case, {me the green guy that I am)
    I took the specs and keep them for reference & business consulting, all
    for nothing., ]:( the locals have no use for it... and I don't get
    enough contracts involving Fl tubes to get one myself, though it's part
    of a plan};-)

    Roy Q.T. ~ US/NCU ~ E.E. Technician
    [have tools, will travel]
     
  6. Doug Miller

    Doug Miller Guest

    More to the point: the lies in the NE are obvious, whereas those in the NYT
    are much more subtle.
     
  7. I've broken a number of fluorescent lamps over the years and when one
    crashes to the floor I basically follow EPA guidelines; for me, it
    hasn't been a concern. For those who are uncomfortable about the
    prospect of cleaning up a broken CFL, an incandescent or halogen
    source may be a better option.
    Some are ok with the light, some aren't, and some of us are willing to
    trade-off a bit of light quality for the other benefits they provide.
    You have to decide for yourself what makes sense for you.
    I think we have to acknowledge the basic truth that incandescent lamps
    use, on average, four times more electricity than their CFL
    counterparts and that over half of the electricity currently generated
    by U.S. utilities is coal fired and that more coal-fired plants will
    be built to help meet future load growth. Nothing is going to change
    that, at least not overnight.

    With respect to utilities switching to cleaner sources of power, my
    sense is that most folks support the idea in principle -- they just
    don't want to pay for it by way of higher electricity rates. If
    utilities are going to invest hundreds of billions of dollars in these
    alternate sources (and, at the same time, write-off their previous
    investments in dirty coal), someone is going to foot the bill and we
    all know who that is, right?

    Cheers,
    Paul
     
  8. Roy

    Roy Guest

    From: (Paul M. Eldridge)
    On 25 Jun 2008 07:10:53 GMT, wrote:
    In alt.engineering.electrical Paul M. Eldridge
    | Although it varies by state, if we use the U.S. national average, the
    | generation of those additional 6,100 kWhs would release 80 mg of Hg |
    into the environment. At least with the fluorescent lamp, the 1.7 mg |
    contained within can be recycled or properly disposed in a secure |
    landfill (thereby potentially reducing our exposure to 0 mg) whereas |
    the 80 mg of Hg released from the burning of coal indiscriminately |
    pollutes our air, land and water.
    But at least those other releases of Hg are not released in my house.
    --
    I've broken a number of fluorescent lamps over the years and when one
    crashes to the floor I basically follow EPA guidelines; for me, it
    hasn't been a concern. For those who are uncomfortable about the
    prospect of cleaning up a broken CFL, an incandescent or halogen source
    may be a better option.
    Hg is not by primary reason for avoiding fluorescent lights. But it is
    one and would be the primary one if the light quality issue gets solved.
    Some are ok with the light, some aren't, and some of us are willing to
    trade-off a bit of light quality for the other benefits they provide.
    You have to decide for yourself what makes sense for you.
    That's not to say I like the idea of releasing Hg into the air. For
    every incandescent lamp used, we should depricate an equivalent amount
    of coal burned. I'm all for building lots more solar/wind/hydro/nuclear
    capability (provided it is done in the right way).

    I think we have to acknowledge the basic truth that incandescent lamps
    use, on average, four times more electricity than their CFL counterparts
    and that over half of the electricity currently generated by U.S.
    utilities is coal fired and that more coal-fired plants will be built to
    help meet future load growth. Nothing is going to change that, at least
    not overnight.
    With respect to utilities switching to cleaner sources of power, my
    sense is that most folks support the idea in principle -- they just
    don't want to pay for it by way of higher electricity rates. If
    utilities are going to invest hundreds of billions of dollars in these
    alternate sources (and, at the same time, write-off their previous
    investments in dirty coal), someone is going to foot the bill and we all
    know who that is, right?
    Cheers,
    Paul
    --------------------
    You're not the only one., I used to push them into the large plastic
    garbage bags & break them with my pliers , rather than leave them
    exposed in public.....I never give second thoughts to contamination.

    Roy Q.T.
    [have tools, will travel]
     
  9. Hi Phil,

    As with the halogens I identified above, incandescent lamp life is
    based on the same 50 per cent rule -- that is an industry-wide
    standard. For a graphical representation of this, see page 2 of:

    http://www.sylvania.com/content/display.scfx?id=003694068


    Sorry for my confusion. When you said "What about long tube
    fluorescent lights that I also refuse to put in my home for the same
    reason?" in relation to our other discussion pertaining to Hg, I
    understood the word "refuse" to be an absolute.

    If your primary concern is good light quality, there are fluorescent
    lamps with a very high CRI such as the Philips TL930 (95 CRI) and
    TL950 (98 CRI), but if you require something better than that, it's
    probably best to stick with an incandescent or halogen source. And if
    you're concerned your access to these lamps may be restricted at some
    future date, you can always stock up on whatever you use now as a
    precaution.

    Cheers,
    Paul
     
  10. Guest

    | As with the halogens I identified above, incandescent lamp life is
    | based on the same 50 per cent rule -- that is an industry-wide
    | standard. For a graphical representation of this, see page 2 of:
    |
    | http://www.sylvania.com/content/display.scfx?id=003694068

    Then something's out of whack somewhere. I see far more than 50% of bulbs
    last beyond 750 hours of usage. That didn't catch my attention before as I
    did not assume something like the 50% basis.


    |>| If long life is important, some of the new Philips T8s fluorescents
    |>| have a rated service life of up to 46,000 hours but, then, as you
    |>| indicated in another thread you refuse to use linear fluorescents in
    |>| your home due to potential concerns related to Hg. On that basis, I
    |>| presume we can rule out metal halide as well.
    |>
    |>That's not my primary concern. It is a concern, and one that _may_ limit
    |>my use of them. My primary concern is the poor spectrum (not the color) of
    |>every fluorescent light I have ever seen. What I am referring to is that
    |>the spectrum is not as uniformly continuous as incandescent. These are
    |>therefore ruled out for critical task lighting areas (especially kitchen
    |>and shop).
    |
    |
    | Sorry for my confusion. When you said "What about long tube
    | fluorescent lights that I also refuse to put in my home for the same
    | reason?" in relation to our other discussion pertaining to Hg, I
    | understood the word "refuse" to be an absolute.

    It might be absolute. I'm actually undecided at the moment. This applies
    to the design of my new home, which I have not timeline, yet, for building.
    I'm refusing to put fluorescent fixtures into that design unless and until
    I see some solid proof I should not be concerned with it.


    | If your primary concern is good light quality, there are fluorescent
    | lamps with a very high CRI such as the Philips TL930 (95 CRI) and
    | TL950 (98 CRI), but if you require something better than that, it's
    | probably best to stick with an incandescent or halogen source. And if
    | you're concerned your access to these lamps may be restricted at some
    | future date, you can always stock up on whatever you use now as a
    | precaution.

    My primary concern is an aspect of light quality that has nothing to do with
    the CRI rating. As I understand it, CRI refers to the balancing of color in
    the spectrum within the confines of how human eyes perceive it so the color
    of illuminated objects looks correct or natural. My concern is more with the
    way the spectrum affects contrast edges given that human eyes, and worse when
    corrective or magnifying lenses are involved, do not focus the light spectrum
    at a single point. Under a single visible wavelength, contrast edges always
    look as sharp as the viewer can see them. Under a broad continuous spectrum
    of white light, the edges will be slightly blurred, but will be uniform. But,
    under a the harsh light of 3 distinct single wavelengths, that edge will look
    like 3 distinct colored edges. That's the worse situation. Fluorescent light
    corrects this poorly because its spectrum has "hills and valleys" despite the
    color balance being a reasonable white. LED has the same issue but I think
    there may be more hope to correct this for LED than for FL (since FL has been
    around for so long and this hasn't been fixed). Some HID has less of an issue
    with it. MV and MH are bad, but HPS seems to be OK (though it has very poor
    color in the eye of many).

    As for stocking up, I'm not worried. There will be a black market. There
    always is. It's not like they are going to put that much effort into this.
    It's not like pirating software/music/movies.
     
  11. Guest

    | On 25 Jun 2008 07:10:53 GMT, wrote:
    |
    |>
    |>| Although it varies by state, if we use the U.S. national average, the
    |>| generation of those additional 6,100 kWhs would release 80 mg of Hg
    |>| into the environment. At least with the fluorescent lamp, the 1.7 mg
    |>| contained within can be recycled or properly disposed in a secure
    |>| landfill (thereby potentially reducing our exposure to 0 mg) whereas
    |>| the 80 mg of Hg released from the burning of coal indiscriminately
    |>| pollutes our air, land and water.
    |>
    |>But at least those other releases of Hg are not released in my house.
    |
    | I've broken a number of fluorescent lamps over the years and when one
    | crashes to the floor I basically follow EPA guidelines; for me, it
    | hasn't been a concern. For those who are uncomfortable about the
    | prospect of cleaning up a broken CFL, an incandescent or halogen
    | source may be a better option.
    |
    |>Hg is not by primary reason for avoiding fluorescent lights. But it is
    |>one and would be the primary one if the light quality issue gets solved.
    |
    | Some are ok with the light, some aren't, and some of us are willing to
    | trade-off a bit of light quality for the other benefits they provide.
    | You have to decide for yourself what makes sense for you.

    If I get past the Hg issue, I will put FL in some places but not in others.
    That is, unless the address the light quality issue that I am concerned
    about. Areas where I will be working for more than 20 minutes at a time
    will have incandescent/halogen lights.


    |>That's not to say I like the idea of releasing Hg into the air. For every
    |>incandescent lamp used, we should depricate an equivalent amount of coal
    |>burned. I'm all for building lots more solar/wind/hydro/nuclear capability
    |>(provided it is done in the right way).
    |
    | I think we have to acknowledge the basic truth that incandescent lamps
    | use, on average, four times more electricity than their CFL
    | counterparts and that over half of the electricity currently generated
    | by U.S. utilities is coal fired and that more coal-fired plants will
    | be built to help meet future load growth. Nothing is going to change
    | that, at least not overnight.

    If they come up with suitable replacements, I'm fine with using them.
    Maybe the Hg issue won't be much of one. I'm considering the fact that
    so far I have never broken an FL light outside of some intentional acts
    when I was a teenager. The spiral of CFLs seems to be a stronger glass
    than the long tubes, as well.

    FYI, I also intend to avoid the E26 screw base in as many places as I can.


    | With respect to utilities switching to cleaner sources of power, my
    | sense is that most folks support the idea in principle -- they just
    | don't want to pay for it by way of higher electricity rates. If
    | utilities are going to invest hundreds of billions of dollars in these
    | alternate sources (and, at the same time, write-off their previous
    | investments in dirty coal), someone is going to foot the bill and we
    | all know who that is, right?

    We have a broad spectrum of people out there that range from wanting to have
    the lowest price at everyone else's expense, to those willing to pay triple
    and more to ensure they impact no one else. It will be interesting to watch.

    I say "tax it". If you don't want certain things done and can show a good
    cause why (it impacts others in some way), then tax it. That comes down to
    electrical usage. Raise the tax on the _generation_ of electrical power that
    is made from coal. Or just tax the measured pollution produced (leaves open
    the possibility of developing better cleaning processes). I'm not concerned
    with the banning of A19/E26 white incandescent bulbs because there are plenty
    of alternatives. The yellow insect bulbs can be used for reptile warming.
    I can go with new fixtures that use bi-pin halogens, especially at low voltage.

    If I were caught under the silliness of California's law that requires a
    certain amount of lighting be the high efficacy type, and focuses on the
    kitchen, where I need good quality task lighting the most (and generally
    for no more than an hour or two a day, except on 2 or 3 holidays a year),
    then you will see HPS lights (unused) dominating the kitchen while I still
    used localized halogen task lighting there.
     
  12. Guest

    | You're not the only one., I used to push them into the large plastic
    | garbage bags & break them with my pliers , rather than leave them
    | exposed in public.....I never give second thoughts to contamination.

    So you leave sharp edges of broken shards instead?
     
  13. Guest

    |
    | Re: Home Depot Annouces CFL Recycling Programme
    |
    | Group: alt.engineering.electrical Date: Wed, Jun 25, 2008, 7:12am
    | (EDT+4) From:
    | | I went to a trade show a few years ago and I saw several companies had
    | a | maintenance program that included removing fluorescent tubes, they
    | had a | rig with a drum & a device on top with a hole, you'd stick the
    | tubes in | & shredder the bulbs, then you can conveniently take out and
    | disposed | the scrads in a bag...
    | |
    | | This is probably good for Factories or Large Building operations.I
    | don't | know the name and costs but if someone is interested I can look
    | it up in | my files....
    | And the mercury went where?
    | -- snippp
    | -------------------------------
    | I remember I spoke to the reps back then & they have a number of sites
    | where they take their hazardous stuff, & I believe they had a list of
    | places through-out the US where to deliver the refuse if one was to
    | purchase the system [drum & vac]....for ones company - It all sounded
    | real fantastic to me too, but just in case, {me the green guy that I am)
    | I took the specs and keep them for reference & business consulting, all
    | for nothing., ]:( the locals have no use for it... and I don't get
    | enough contracts involving Fl tubes to get one myself, though it's part
    | of a plan};-)

    Did the machine have a means to capture the mercury vapors?
     
  14. Guest

    |>
    |>David Nebenzahl wrote:
    |
    |>> Anyone who expresses a preference for the /National Enquirer/ over the
    |>> NYT *is* a certified fool.
    |> Not really. You always know the National Enquirer is lying, but you
    |>aren't always sure with the NYT.
    |
    | More to the point: the lies in the NE are obvious, whereas those in the NYT
    | are much more subtle.

    The NE knows that everyone knows they are lying. They don't try to hide it.
    The NYT tries to make sure people don't know they are lying.
     
  15. Roy

    Roy Guest

    From:
    | You're not the only one., I used to push them into the large plastic |
    garbage bags & break them with my pliers , rather than leave them |
    exposed in public.....I never give second thoughts to contamination.
    --------
    So you leave sharp edges of broken shards instead?
    -- snip--
    ---------------------------
    Not quite all ends up inside the bags - they usually get pulverized
    under my plier., I slap them all the way to the stub...it's not much of
    a measure but it keeps it off the streets.

    In NYC it's illegal to toss them in the garbage exposed., but there are
    plenty of people that either don't know, or dont give a hoot.

    Roy Q.T.
    [have tools, will travel]
     
  16. Roy

    Roy Guest

    From:
    and I saw several companies had | a | maintenance program that included
    removing fluorescent tubes, they | had a | rig with a drum & a device on
    top with a hole, you'd stick the | tubes in | & shredder the bulbs, then
    you can conveniently take out and | disposed | the scrads in a bag...
    | |
    | | This is probably good for Factories or Large Building operations.I |
    don't | know the name and costs but if someone is interested I can look
    | it up in | my files....
    | And the mercury went where?
    | -- snippp
    | -------------------------------
    | I remember I spoke to the reps back then & they have a number of sites
    | where they take their hazardous stuff, & I believe they had a list of
    | places through-out the US where to deliver the refuse if one was to |
    purchase the system [drum & vac]....for ones company - It all sounded |
    real fantastic to me too, but just in case, {me the green guy that I am)
    | I took the specs and keep them for reference & business consulting,
    all | for nothing., ]:( the locals have no use for it... and I don't get
    | enough contracts involving Fl tubes to get one myself, though it's
    part | of a plan};-)
    -------------
    Did the machine have a means to capture the mercury vapors?

    ------------------------
    I'm not sure what EPA measures they have, when I get a chance I'll look
    for the brochures I have and send you the contact info.........

    Roy Q.T.
    [have tools, will travel]
     

  17. Hi Phil,

    A couple possible explanations. One is that although a standard
    100-watt incandescent has a nominal service life of 750 hours, the 25,
    40 and 60-watt versions are typically rated at 1,000 hours. Secondly,
    manufacturers have been introducing products that are shifting the
    balance between higher lumen output and longer life further towards
    the latter, so you may have noticed the elogic lamps in the above link
    have a rated life of anywhere from 1,125 hours (95-watt) to 2,250 in
    the case of the 40-watt equivalent. Line voltage and the use of
    dimmers can also dramatically affect lamp life.


    Fair enough.


    If you're extremely fussy about spectral distribution, I don't see any
    clear winners. Philip's new MasterColour Elite ceramic metal halide
    lamps are arguably the very best the industry has to offer; you can
    see its distribution graph on page 2 of the following spec sheet and
    draw your own conclusions.

    See:
    http://www.nam.lighting.philips.com/us/ecatalog/hid/pdf/p-5899.pdf

    The spectral performance of their TL930 and TL950 lamps can be found
    here:

    http://www.nam.lighting.philips.com/us/ecatalog/fluor/pdf/P-5037-D.pdf

    Sounds reasonable.

    Cheers,
    Paul
     
  18. krw

    krw Guest

    You're quite sure with the NYT too, but it's a lot less
    entertaining.
     
  19. krw

    krw Guest

    The idea that nothing should be done that "affects the public in
    general" scares the shit outta me! Such sentiments would make
    Stalin grin.

    It would be impossible to draw all this "little lines". There isn't
    just one issue here; most of it hyped by the press out of all
    recognition.
    You and I *certainly* disagree here. It is impossible to have an
    open society and one where people can't have an affect outside their
    little sphere, as well.
    The devil is always in the details. It's that devil I'm afraid of.
    Not everything bad that happens is illegal, nor can it be. Nor,
    indeed, should it. Life is about risks, and should be. Making
    everything that is bad "illegal" also eliminates the possibility of
    "good". If you want to live as a drone, move to France. ;-)
    As such they simply are tools to push emotional buttons thus aren't
    useful, assuming your intent is to exchange information rather than
    propaganda. The mainstream press is good at this.
     
  20. daestrom

    daestrom Guest

    Not to draw too close a parallel, it is worth looking at the stock market
    crash of 1929. The laws of the time did not prevent ignorant investors from
    getting into things way over their head. Certainly some brokers encouraged
    this as a way for the average 'Joe' to make money. Brokers extended
    lucrative credit to novice investors that bought stocks on margin because
    'everyone' was doing it, and nobody defaults, they just flipped the stock
    and turned it over to another stock. So brokers weren't losing out and
    actually made money on the commissions. They didn't worry so much about
    'bad risk' borrowers because boom times helped all. They 'got away with it'
    for a few years because the borrower could always just 'flip' the stock for
    a goodly profit and move on.

    Then stock prices fell and borrowers couldn't pay back the margin-calls.
    Lots of lenders lost money, lots of borrowers lost all their stocks. Money
    supply dried up.

    Any of this sound familiar? Just replace 'broker' with 'mortgage broker'
    and 'stock' with 'real-estate'.

    After the crash, stricter regulations were put in place about buying on
    margin and most people got smarter about buying on margin. Probably a
    similar thing will happen now with mortgages.

    daestrom
     
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