...where I'm likely to ramble on most anything.
My goal: To persuade or be persuaded.
Need to fix the link, dude. Otherwise, I can't read what you are referencing.
Actually, it's more a case of it's biased, therefore it can't be trusted. The "conservative" part has little to do with it. One can be conservative and yet reasonable and relatively unbiased.Or at least in theory...
Here is your link.
From the Heritage Foundation report, near the end:"Not only was there was little deregulation of financial services during the Bush years, but most of the regulatory reforms achieved in earlier years mitigated, rather than contributed to, the crisis."The first part of this sentence is true. BTW, Bill Clinton signed this bill - Gramm-Leach, which was, in essence, a repeal of the Glass-Steagall Act - because he knew that his veto would be overridden. Ever the political animal, he had no way of knowing that destroying part of the structure that had prevented a serious financial crisis would melt the markets and banking industry in less than a decade. After all, it had been in existence for over sixty years at that point, and the investment banks had not only learned to live with it, but preferred it, as it mitigated the temptation to high-yield, but also high-risk, investment strategies.Yet, the housing-and-mortgage bubble was part and parcel of the direct result of this bill. By creating an atmosphere in which debt securities could actually exist as equity for investment - that is, the banks took the value of the mortgages, rather than the equity that had been paid in to them, as collateral for investments, as well as considering these bundled mortgages as an investment in and for themselves - Congress created the situation we have now. From 1938 until this past month we had only one minor glitch in the stock market, the 1987 "crash" that ended up being meaningless in the long run. It did not cause a banking panic, it did not cause jittery feelings on the street, and the big investment houses continued their work much as they had before.Now, with the bubble - and it was in fact known to be a bubble for at least a year before it actually popped in 2007 - gone, the big investment houses not only held worthless paper, they held many, many loans that had been securitized by this worthless paper. In other words, as the mortgages became nothing more than scraps of paper, all that "security" suddenly became, in reality, worthless. The banks found themselves bankrupt.That's what happened, and it is indeed a direct result of removing the firewall between commercial banking, other types of investment products (particularly insurance and pensions), and private, consumer banking. Glass-Steagall created that firewall so that we would not go through what he have, in fact, gone through. Its repeal was enacted by John McCain's chief economic adviser, former Sen. Phil Gramm of Texas, perhaps the worst economist in the nation to still have a Ph. D. in the dismal science.The Heritage Report is, indeed, biased. At some points it is correct in relating certain factual matters. Yet, it simply states that the deregulatory structure instituted by Gramm-Leach lessened the effects of the collapse of the housing bubble. Hot it did so is not discussed in detail for one simple reason - it did no such thing precisely because, by removing the safeguards within the financial industry as a whole that insulated various sectors from such probable events as financial bubbles, there was simply no protection when the basis of an entire system of investment-for-profit was found to be without financial merit.To repeat myself in order to emphasize my point: Glass-Steagal was passed during the 1930's. With the exception of the so-called "Roosevelt Recession" of 1938, which was accompanied by a modest dip in the stock market and its refusal to move upward until the even of American entry in to WWII, there was only one significant drop in the stock market, in 1987. That was an isolated event, and was nothing more than a speed-bump on the ever-upward trend of the market. Nine years after its repeal; nine years after the single most important safeguard against the kind of mess we find ourselves in right now, we find ourselves in the mess we are in. Without the regulatory structure embodied in Glass-Steagall, there is no recourse other than the demise of the entire investment banking industry, with nothing left to take its place, and no safety net to help other types of investors to take up the slack. These facts, reviewed over and over again in the press and in discussions wherever one turns, are both well-known and uncontroversial. The idea that somehow our current mess is the result of Nancy Pelosi being the Speaker of the House the past two years, in a word, is ludicrous on its face. The kind of investment strategies that led to this disaster were created the moment Gramm-Leach was signed in to law, and were the chief cause of much of the expansion of the stock market. Once it became evident that it was no longer a crime, or even a violation of reality, to use nonexistent collateral to take out loans to invest real money buying more mortgages to use as collateral . . . well, it should be clear that there is a difference between something that has the potential of being worth $100,000 (a mortgage with no equity) and something that is actually worth $100,000. At its heart, that is what happened here. People figures that these mortgages were in fact worth what they in fact were only potentially worth. As any first year philosophy student can tell you, the difference between something that is potential and something that is actual is that the former does not exist. These mortgages were not, in reality, "worth" anything until they had been paid off. Since most mortgages are only held for a short period, little equity was actually accrued, and their net value remained low. When the bubble this entire house of cards supported burst, all that was left were some scraps of paper.Heritage skips over this inconvenient set of facts not because they are untrue, but because they do not fit in to the conservative narrative that we need even less regulation in order to right ourselves again. It wasn't true before, it isn't true now. You don't have a baseball game without umpires, a football game without referees, and you shouldn't have a financial system without rules, laws, and overseers because human beings very often do stupid and criminal things that do massive damage without some sort of structure to prevent them from doing so. This should be an uncontroversial point, yet it is overlooked by those who screech "free market! free market!" because there seems to be some magic that happens in markets that doesn't happen in any other human social endeavor - including graft, greed, lying, and the pursuit of private interest at the expense of public good.
Even the High Priest of the Free Markets, Alan Greenspan, admitted before Congress yesterday that his ideology was flawed. It turns out that banks did not self-regulate the way he thought they would.
Is this the same Heritage Foundation that joined with the KKK to support protestors who bombed, burned and picketed elementary schools, tried to assassinate the school board, set dynamite on bridges and planned the bombing of school busses and carpools in Kanawah County, West Virginia to protest books depicting a positive view of blacks in the History of America?
Teresa,What the hell are you talking about? Links, please!
Geoffrey,Has there ever been an article wherein you've actually debated the point? In this article, the point was to refute the charges that this financial mess was caused by Bush's deregulations. It stated that there were very few regulstions at all guiding the industry. They didn't gloss over anything that had to do with the point. That is, whatever you feel was intentionally omitted was not necessary to explain the position they took. Otherwise, nice response.
"Actually, it's more a case of it's biased, therefore it can't be trusted. The "conservative" part has little to do with it."Spread that bullshit elsewhere, Dan. You know perfectly well that you, Geoffrey and others dismiss pretty much anything that comes from a conservative source because it's a conservative source, with the accusation being that they are biased, with their conservatism the implied reason for their bias.
I pray for a great Christian revival in the United States, and in Australia, and in Great Britain.The U.S. and the U.K. have bequeathed some things of wonderment to the world, and to their own peoples, and this gets too quickly forgotten or denied. The best times have been when the influence of Christianity has been strongest of all. Yet Britain has tended to decline concurrently with the falling degree Christian influence among its people. The U.S. suffers the abuse of numerous people for whatever they can hold against it and too rarely gets credit for what there is in its history to be proud of. There may be an element of jealousythere! In Australia, the bitterest critisism comes from the alienated and nihilistic who can't or won't see any good in anything. I pray that God's will be shown in the outcome of the U.S. election.
Marshall Art,It is difficult to pick just one, but here's one link:http://www.edgehill.ac.uk/research/TEXT/Godless%20Books.pdf
Here's a blog entry about it from someone who lived and went to school in the area at that time. He mentions the link above, I believe.The book, The Big Sort also tells hoe the Heritage Foundation helped leaders of this texbook protest organize a number of other textbook protests around the country. I dont know if any of them got as violent as the one in Kanawah.
oops: Heres the link to th blog:http://charlestonian.blogspot.com/2007/09/remembering-1974-kanawha-county.html
I would never say "It's Bush's fault." I have yet to say that. I do not know of anyone of any serious repute who has said such a thing. It is, however, the conscious decision by Republicans to eliminate the best tool protecting our financial markets from meltdown that led to our current situation. Bush has certainly stumped for a continuation of the currently untenable deregulatory regime in financial markets, even in his weekly radio address this past Saturday (I know because I heard it replayed on BBC world service, the only news organization that actually pays attention to him).What I do blame him for is the overheated rhetoric a month or so ago, which only fed fears not just in financial markets but among the American people that somehow the collapse of investment banking spelled the impending doom of western civilization. That is hardly the stuff of "leadership". It might be a tactic that has worked well for him and his Administration in the past - think the rush to war in Iraq - but in the face of events, it made public perceptions of a bad situation that much worse. Barack Obama's coolness in the face of events, juxtaposed with Bush's "Sky is falling!" nonsense and John McCain's ridiculous "We could be in a Depression on Monday!" talk have done more to help his campaign than anything. Unlike our current President, and the Republican challenger, Obama showed that he has what it takes. I might have preferred he not endorse giveaways to the financial institutions that brought us this mess in the first place - that's a policy difference - but his approach showed he has a cool head, a calmness that should have been apparent to anyone who has seen how he has conducted his campaign for the past two years.That's neither here nor there, though. The article in question attacks a straw argument, "It's Bush's fault", because the Republican Party and their supporters in the financial and banking industries (what's left of them, anyway) refuse to take responsibility for one simple fact - they got what they wanted in the form of unfettered cross-polinization of investment products, and it led, as it has done in the past, to a bubble, a panic, an implosion, and a serious tightening of credit markets and reduced liquidity. Everyone who knew anything about how banks have operated under non-regulatory regimes knew this would happen; it was predicted by opponents of the repeal of Glass-Steagall back in the late 1990's. No one listened, because it seemed possible that people who were seeking profit uber alles would behave differently than they had in the past.Alas, they behaved as they always have and always will. Our investment structure, credit markets, and general financial health were much safer when we had a series of checks to that wonderful human tendency to act against what is in the common interest. While Adam Smith's "invisible hand" might seem to work well in theory, when irrational pursuit of best chance takes over, the balance in the equation ceases to function.In other words, human sin and greed are at the heart of our current crisis. Those who pretend that people will check their own tendency to work against their own best long-term interest are not only ignorant of history, they are ignorant of our ability to screw ourselves quite wonderfully, given even a ghost of a chance. This was aided and abetted by the Republican Party - the Party of Christian values, no less - and Bush is a part of that. He doesn't deserve blame for how this whole thing started; he does bear a certain amount of responsibility, however, for his bungling and really stupid talking points once it was clear this was a problem that would only get worse.Does this satisfy your criteria for actually addressing the article in question?
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