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Bond Investors Hate Democrats and UnionsFollow

#1 Sep 15 2011 at 8:11 AM Rating: Good
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And now, there's data to prove it:

Quote:
Political-institutional factors—such as the political composition of state legislatures, and interstate variations in public sector labor environments, such as union strength, and collective bargaining rights—can explain a significant proportion of interstate variation in bankruptcy risk. We find that, controlling for multiple economic variables, states with weaker unions, weaker collective bargaining rights, and fewer Democratic state legislators pay less in borrowing costs absolutely, and less in borrowing costs at similar levels of unexpected budget deficits, than do states with stronger unions and a higher proportion of Democrats.

Eat your heart out, Varus.
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#2 Sep 15 2011 at 4:46 PM Rating: Excellent
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Sounds like they're itching to be good and regulated.
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#3 Sep 16 2011 at 2:10 PM Rating: Decent
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So... Um... Things cost more in states with a strong union presence? I could have told you that!
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#4 Sep 16 2011 at 2:11 PM Rating: Good
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lol @ gbaji not getting it.
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#5 Sep 16 2011 at 2:28 PM Rating: Decent
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idiggory, King of Bards wrote:
lol @ gbaji not getting it.


I suppose I should probably read the whole link, but based on what Demea quoted, it seems as though it's saying that in states that have weaker unions, weaker collective bargaining, and less Democratic Party influence, the cost to borrow money is lower than it is in states with more Dem influence, stronger unions, and stronger collective bargaining rules.

Isn't the cost to borrow money being lower a good thing? Banks giving folks a better deal and all of that?


Oh, wait! So you guys are trying to claim that the fact that it costs more to borrow in those states is because the lenders somehow magically hate unions and Democrats! See. It's right there in the darn thread title. Guess I should have looked closer.

Or... waitaminute! Here's a thought. Maybe it's more expensive to borrow in those states because the unions themselves, their collective bargaining, and the influence of Democrats and their poor economic policies result in increased operating costs being born by the banks and other lending institutions thus requiring them to increase the cost of a loan in order to make up the difference! Well that kinda explains things too, doesn't it? No... that's just crazy talk! Because we all know that lenders don't set their rates based on prevailing economic conditions. Obviously they base their lending rates on whether or not they like the people living there!


Whew!

Edited, Sep 16th 2011 1:31pm by gbaji
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#6 Sep 16 2011 at 2:34 PM Rating: Good
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To be pedantic for a moment, the increased borrowing rates do not reflect increased costs to the banks of servicing the loans, but rather a perceived increased risk of default, of which the primary factors are the (big "D") Democrat economic policies and public labor union influence.
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#7 Sep 16 2011 at 2:52 PM Rating: Good
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Demea wrote:
To be pedantic for a moment, the increased borrowing rates do not reflect increased costs to the banks of servicing the loans, but rather a perceived increased risk of default, of which the primary factors are the (big "D") Democrat economic policies and public labor union influence.


I include losses due to default as part of the costs of lending, but tomato/tomahto. I'm still seeing this as supporting what I've said all along: Democrats and strong union presence are bad for the economy. Is this really surprising?
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