Yahoo ran this AP report by Darlene Superville of President Barely O'Braindead getting tough on the job situation.
I know. That's funny just saying it. As if he has any idea. It begins like this:
"A combative President Barack Obama rolled out a long-term jobs program Monday that would exceed $50 billion to rebuild roads, railways and runways, and coupled it with a blunt campaign-season assault on Republicans for causing Americans' hard economic times."
This means we'll see more money spent on those signs that inform us of how the slowdown on the freeways are brought to us by Barry & Co. It also means little else as the "stimulus" only ever lasts as long as our money is given back to us to "create" these jobs. First of all, I think, but am not sure, that the railways are owned by the railway companies. So why are we again subsidizing private industries? Why not lower corporate tax rates and let them fix their own tracks. They could surely work out details with all other entities that use the tracks or hope to ship via the rails.
Roads are a local matter, not a federal one. States and counties should be taking care of their own roads and if they continue to chase away business in their areas with Obama-like policies, then that's their own tough luck. Why should Delaware help pay for roads in New Mexico?
Only the runways might fall into some federal jurisdiction, but around here, you might have to talk to Richie Daley about that.
But then the end of that opener is par for Obama's course. Blame it all on the Republicans, as if Dems were pure as the driven snow. Doesn't matter what their part was in our current economic situation, and they had plenty to do with it, just blame the opposition. The question now is just how many of those who voted for the boob buys into that crap anymore.
Here's anothe gem from the article:
"Jim Manley, spokesman for Senate Majority Leader Harry Reid of Nevada, cautioned, "If we are going to get anything done, Republican cooperation, which has been all but non-existent recently, will be necessary.""
The fact that any Republican cooperation with this administration exists at all is reprehensible. Why would any self-respecting Republican care to jump on this train to hell only to claim his share of the righteous anger and frustration that is growing amongst the electorate? There are some Dems that are getting the message as well, at least as regards the plan for letting the Bush tax cuts expire, and one can only hope that they find the spine to stand firm.
We once again take the time to point out that while it is better to have an alternative at the ready (and the GOP does), one is not necessary to justify a loud "NO!" to the stupidity that is meant to pass for intelligent policy proposals by Obama, the brilliant one who has yet to provide any brilliance.
"He said Republicans have opposed virtually everything he has done to help the economy..." because his ideas are stupid and have failed. He proposes nothing new, but only his version of ideas that haven't worked for other countries that have tried them.
"...and have proposed solutions that have only made the problem worse." How can this be? They have no majority to implement anything. How can something that can't be implemented make anything worse? Has he, through his cohorts in Congress, allowed or tried anything like, say, what Mitch Daniels has done in Indiana? I don't think so. What a liar. But then the next line in the article is this:
""That philosophy didn't work out so well for middle-class families all across America," Obama told a cheering crowd at a labor gathering. "It didn't work out so well for our country. All it did was rack up record deficits and result in the worst economic crisis since the Great Depression.""
To what philosophy does he refer? The one that opposes his goofy ideas? THAT didn't work out so well? THAT is how we racked up record deficits? We didn't start racking up anything record-breaking until he and his Dem cohorts took control of Congress in '06! And anything they did was dwarfed after his sorry ass took a seat in the Oval Office! Hey Geoffrey! This is what a liar in the White House looks like!
Check this out:
""If I said fish live in the sea, they'd say no," Obama said."
The smart money says to question anything that comes our of this guy's mouth. If he told me my name, I'd check my ID.
Once again, we see that he appeared "Casual in brown slacks and open-collar white shirt with rolled-up sleeves," I have a tip for him: He could appear in overalls and a hard hat and I still wouldn't believe he is working hard. He should stop the posing and actually do something, preferably something that works, like cutting corporate tax rates to attract business.
Of course, here's the punchline:
"Obama said the proposal would be fully paid for. In an earlier briefing for reporters, administration officials said Obama would pay for the program by asking lawmakers to close tax breaks for oil and gas companies and multinational corporations."
So once again, he intends to hurt the sources of jobs by taxing them harder to pay for his little project that he thinks is going to stimulate job creation. But we can't be too hard on the man. It must be really hard to think with his head so far up his backside. In the meantime, the unemployment rate steps up a little higher.
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107 comments:
I could be wrong, but I'm not sure they've spent the last stimulus yet, and now they want to spend more.
If we could increase our income by spending more money, the way my wife spends, I'd be a multi-millionaire by now.
Silly wives... always spending.
Gee I thought gasoline taxes were supposed to pay for road maintenance, I wonder where that went
"I wonder where that went"
A trillion dollars for an unwarranted war in Iraq took it.
Speaking of idiots, feodor's back. How'd the trip go?
Provence was great. Warm but dry, great food, wine, Avignon, Arles, Aix-en-Provence, Nice, St. Tropez, a little town called Vaison la Romaine with both ancient Roman ruins and an upper Medieval part of town separated by a medieval bridge. The parish church was built in the tenth century and then added on to. Paris was cold and rainy, but, this time, the most striking thing was Monet's long panels of water lilies exhibited as he had directed, in three oval room sections connected through crossing corridors.
One question for now:
1. Why extend BUSH tax cuts when you can implement OBAMA tax cuts?
Good question. Here's the best answer:
The Bush tax cuts, if allowed to expire in the manner Buttrot O'Bumble intends, would have an adverse impact on small business owners, many of whom have their business income taxed as personal income.
In just terms of personal spending, saving and investing (which is the same thing--it's just a matter of who's doing the investing), a greater stimulating effect will occur by allowing people to have more of their own money to use as they see fit. What has happened with the money that has been taxed since the cuts? It's been squandered without any positive impact on the economy. It's a free market issue and more activity occurs through free market movement of capital in the private sector.
The Obama preference is a proven failure as his stim packages incuded tax incentives that did nothing. If he's giving tax breaks for businesses to buy new equipment and/or facilities, how is that going to compel such purchases? If the break doesn't equal the price of that new facility or piece of equipment, why would a hurtin' company spend the money? If a company is in the market anyway, the incentive wasn't necessary.
Better still is to keep the cuts in place permanently except for corporate tax rates which should be lowered further. Even without the corp rates being cut (to be more competitive with the rest of the world in order to attract foreign businesses as well as to attract our own who left for the better deals elsewhere), just knowing the the income tax rates, as well as any other cuts that were part of the package, such as inheritance taxes and such, would be a burden of worry of the backs of Americans which will allow for confidence to begin to grow.
The main problem here is that these "incentives" that Obama wants to pass are merely meaningless decorations meant to give the impression that he is doing something. As more knowledgable people in Congress, who are all on the right side of the aisle, righteously oppose this frivolous and insulting charade in favor of real business stimulating proposals, Obama can continue to whine about how the GOP is the party of "No" and won't play nice.
The end of the second to last paragraph should have read:
"...just knowing the the income tax rates (as well as any other cuts that were part of the package, such as inheritance taxes and such) would remain constant, itwould be a burden of worry of the backs of Americans which will allow for confidence to begin to grow."
There. That's better.
OK, I just noticed another typo. Too freakin' bad.
How dare Obama blame the Republicans for the mess they made? Much better to reelect them so they can pursue the same failed policies. If we give them another chance, maybe they can make the Great Depression look like a boom!
Nice history re-write, Vinny. You stand a better chance getting away with re-writing the history of the eary Christian church. Of course you're wrong there as well.
Yeah, Vinny, the cost of the war in Iraq ain't nothin'. Trillion dollars, thousands of American lives. Ain't nothin'.
But a mosque near the strip club by Ground zero! God forbid!
So let me see if I can figure this out. Mel the plumber had a pretty good year last year. Did enough business to fully employ 3 people for his business. The full cost of these employees and all other expenses relating to the business (including the trip to Maui for the Plumber's convention) are tax deductible. So it was a good year and after expenses, the business nets $1,000,000. Under the Obama tax plan, Mel is taxed an extra 4.6% on $750,000 or $34,500. His after tax income is now $645,192 instead of $679,692. Can he afford it?
Can you make up an example that is more to your liking, Jim? Perhaps make it 2 million dollars so your case is stronger? The big problem with your "example", aside from the fact that you make a lot of assumptions (how many plumbers do you know that had that good a year in this economy?), is that it isn't up to you to decide how much of someone else's hard earned money is enough for HIM. Covetous little weasel!
For Vinny, here's one take on how bad it was when those horrible Republicans were in charge. Keep in mind that I'm still not a big fan of their spending, but compared to what we have now, I long for those days.
For feodor, who went to France to get a heapin' helpin' of some fine French stupid, here's a little something about the "trillion" we spent on the war. Keep in mind, assuming you have one, that no one here said anything about even one cent spent on the war being "nothing". And no one here would even think of suggesting that the loss of one drop of American, allied or civilian blood is "nothing". One would hope some R&R would have cleared your head so that a cogent thought might appear now and then. Instead you come back as empty headed as you left. All those books...
Your pithy little American Dunker writer claims to be dumbfounded how a Noble Laureate came up with a figure so much larger than the CBO number. The Dunker can't read. And neither do you, apparently. Among the notes made by Linda J. Bilmes and Joseph E. Stiglitz:
-The administration talks only [and the CBO reports only] about the upfront costs, which are mostly handled by emergency appropriations.
- Add in the costs hidden in the defense budget
- Add in the money we'll have to spend to help future veterans
- Add in the money to refurbish a military whose equipment and materiel have been greatly depleted...
and the total tab to the federal government will almost surely exceed $1.5 trillion. But the costs to our society and economy are far greater.
- When a young soldier is killed in Iraq or Afghanistan, his or her family will receive a U.S. government check for just $500,000 (combining life insurance with a "death gratuity") -- far less than the typical amount paid by insurance companies for the death of a young person in a car accident. The stark "budgetary cost" of $500,000 is clearly only a fraction of the total cost society pays for the loss of life -- and no one can ever really compensate the families. Moreover, disability pay seldom provides adequate compensation for wounded troops or their families. Indeed, in one out of five cases of seriously injured soldiers, someone in their family has to give up a job to take care of them.
All told, the bill for the Iraq war is likely to top $3 trillion. And that's a conservative estimate.
Apparently your pithy little American Dunker friend -- can't you read something more substantive than this mess? -- can't think out the long term implications of destroyed lives and depleted armed forces. And he thinks he gets over on a Nobel laureate... and all his books. You two are some kind of foolishness.
Like I said, I guess casualties of war ain't nothin' to you folks.
In 1980, America was the world's largest creditor nation. Thirty years of Republican tax cuts for the rich have turned it into the world's biggest debtor nation and destroyed its manufacturing base. 80% of income gains since 1980 have gone to the wealthiest 1% of Americans. In the Bush years, all the gains went to the wealthy.
Of course you won't believe this because you don't find it in the American Thinker. In the American Thinker, you get an article about the effect of Bush's war and Bush's tax cuts on the deficit that doesn't show you what things looked like before that war and those tax cuts. The American Thinker shows a graph that starts in 2003 so you won't think about the budget surpluses that we had before the Republicans took control of all three branches of government in 2002.
The Republicans have succeeded in destroying the American middle class because they have been able to distract conservative Christians with issues like flag burning, abortion, school prayer, gay marriage, Acorn, Terry Schiavo, and school prayer.
lol.. and after all that.. Ma.. you still didnt answer my question. Such is life. What is very clear... You dont know what the Obama plan is! LOL
Park,
You're an idiot. I answered your question directly. Don't give me crap because you're too stupid to undestand the answer. Better would be to give a rebuttal of substance. As to Obama's plan, you did not request a description, only what one way would be better than the other. Please remove your head from your backside and pay attention.
The 2006 Democrat takeover of congress was the catalyst of the recession.
2009's stimulus bill which makes the Iraq war look like chump change sunk the economy even lower guaranteeing a even longer recession.
Now Obama wants to blame the minority party and fix the recession with road cones. This is like having Michael Scott from Dunder Mifflin as president.
What color is the sky in your world Edwin?
Look Vinny, I've read your comments and it would seem that you think the only way to save our economy is to drag down the rich. You got to let go of this class warfare thing. The only way to save the economy is put people back to work and as much as it pisses you off they will work for rich people.
Hurting the rich will only help your jealousy complex not the economy
Nice ad hominem response by the way, you're a real thinker.
"The 2006 Democrat takeover of congress was the catalyst of the recession."
Right.
Before the Dems took over, nothing wrong was brewing over a decade ago as Wall Street investment banks bundled bad mortgages investments into enhanced leverage hedge funds like Bear Stearns' High Grade and High Grade EL offerings. It took a change in Congressional chairmen to make Bear and Lehman Brothers collapse into bankruptcy, Merrill Lynch to melt into Bank of America and Goldman Sachs and Morgan Stanley to change their status.
Nancy Pelosi did it.
Right. Wasn't Edwin Drood an unfinished novel? This is thinking that hasn't even started.
So the problem is that the rich aren't rich enough?
Why only concentrate on the rich? The persistent goal of economics is to increase the wealth of everyone.
Are you under the impression that people only get rich by taking money from others. I'm middle class and have never had my money stollen by a "rich" person. Being middle class I don't stay that way by stealing money from the poor.
I agree that the goal is to create wealth for everyone. That is why I have a problem with policies that only create wealth for those who already rich.
What policies would those be, Vinny? The only policy any party should promote is no policy at all, except for any policy that overturns previous policies that have stymied growth in the private sector.
The problem is in the thinking that says the gov't must intervene in the private affairs of the people to insure everyone has a chance at wealth, as if they could and as if such a chance didn't already exist.
"So the problem is that the rich aren't rich enough?"
This question is the problem. Of what concern is it for one man that another makes good scratch? The only concern anyone should have is "how can I get rich as well?" if getting rich is one's goal. But it seems some busy their time believing that all wealth is blood money, obtained at the expense of others. That's largely crap and a covetous and envious assumption by too many people of others of whom they have no real knowledge. It's a waste of time.
"Thirty years of Republican tax cuts for the rich have turned it into the world's biggest debtor nation and destroyed its manufacturing base."
That's nonsense and far too simplistic. How exactly do tax cuts destroy the manufacturing base? In addition, you have not shown anything to rebut the info from my link. Where does the author go wrong in his analysis?
"In the Bush years, all the gains went to the wealthy."
In the Bush years, the wealthy accounted for a greater percentage of revenues to the federal gov't. In the Bush years, more people at the bottom end of the earnings scale were relieved of paying income tax. During the not yet two years of Obama, the percentage of people considered in poverty has risen. It really doesn't matter who I read. What matters is where the information comes from. The guys I read, particularly the guy to whom I linked for both your comments and feodor's takes great pains to base his stuff on gov't numbers.
BTW, those "surpluses" (and when I'm able to get my computer fixed I have info that speaks to that tired but not totally true subject) were shrinking before Bush was elected. But keep in mind, that I am among many on the right who were unhappy with Republican spending, which is why they lost control of Congress (as opposed to the war).
"The Republicans have succeeded in destroying the American middle class because they have been able to distract conservative Christians with issues like flag burning, abortion, school prayer, gay marriage, Acorn, Terry Schiavo, and school prayer."
Where do you get your weed? What an insipid assertion.
BTW, the Hoven article is specifically about what Obama likes to reference as the "last ten years" (up from "the last eight") or "the previous administration" or some such finger pointing when his stim philosophies continue to fail. Those years previous to Bush were not prosperous because of liberal policies. Keep in mind that the Gingrich led congress was largely responsible for balancing the budget and Clinton merely signed on to it.
"-The administration talks only [and the CBO reports only] about the upfront costs, which are mostly handled by emergency appropriations.
- Add in the costs hidden in the defense budget
- Add in the money we'll have to spend to help future veterans
- Add in the money to refurbish a military whose equipment and materiel have been greatly depleted..."
If feo had read the links in the article, he would have seen that Hoven drew from numbers that speak to "hidden" costs as well. But what feo's hero's are doing are speculating without giving any hardcore info such as what Hoven presents. One can speculate all day as to what can or cannot be attributed to the war.
For example, to say "- Add in the money to refurbish a military whose equipment and materiel have been greatly depleted..." is to assume that refurbishing equipment and material doesn't take place even during peace time. Or more to the point, perhaps it wasn't done as it should have been with spending by the previous administration, run by a guy who "loathed" the military. Now, when there is a war, feo and his preferred columnists and economists want to put all that cost on Bush. Can't do that and be honest about the cost of the war.
"...nothing wrong was brewing over a decade ago as Wall Street investment banks bundled bad mortgages investments into enhanced leverage hedge funds like Bear Stearns' High Grade and High Grade EL offerings"
a result of Dem policies, some of which went back to Carter. The actions of some of these Wall St guys would not have happened without Dem interference in the private sector. When the Dems put on pressures, be they tax or regulatory, business, as well as individuals, will try to compensate.
"a result of Dem policies"
Sadly, no. And, not every bad thing that happens to you, Ma, is "a result of Dem policies". There will come a day in your life when you will have to take a little responsibility. 'Till then, might I suggest doing some research outside your tiny bubble. For example.. try Moody's or the CBO.
PS.. Where is Mark when you need him? With all the hate talk, Ma, I'm wondering if thats what a Christian would say.
MA,
When individual marginal tax rates were high, corporations retained their earnings and invested rather than paying them out to managers and shareholders. Corporations concentrated on building long term stable businesses and long term capital gains were the key to building individual wealth.
Reagan's tax cutting changed the dynamic. Short term gains that could be paid out as quickly as possible became preferable to building a business over the long-term. Manufacturing as a share of GDP shrunk while finance grew because cash changes hands more quickly in finance making short term gains easier.
Vinny,
You seem to think there's a connection between the cutting of tax rates and the choice of business to think long term or to take short term gains. It would have been nice to see just how that connection works. In addition, I don't see how anyone would think that going through the hassles of starting a business for any reason contrary to long-term profits makes any sense.
Just the same, I now offer this link to provide more insights into the benefits of tax rate reduction.
Again,would be helpful if you can show how reducing tax rates result in a loss of manufacturing. From what I can see, manufacturing losses stem mostly from our inability to be competitive globally because of burdensome tax and regulatory policies, not a loosening of them. I await your links.
Parkie provides nothing again:
"And, not every bad thing that happens to you, Ma, is "a result of Dem policies"."
It would be nice if this statement had any relevance to anything I've said. MY statements refer to Dem policies resulting in bad things for America.
"There will come a day in your life when you will have to take a little responsibility."
I have never abdicated responsibility for anything that's happened in my life, nor have I ever suggested anything to the contrary. If you'd spend less time with your head up your ass, you wouldn't have such crappy irrelevancies to offer.
"'Till then, might I suggest doing some research outside your tiny bubble. For example.. try Moody's or the CBO."
No. You might not suggest anything until you have shown a capacity for offering something substantive at this blog. Thus far, you have not come close to doing so. And hey, butthead, if you actually read the links I post, you'll note that the info presented by the authors to whom I link use CBO numbers, as well as IRS and OMB numbers, too. So bite me.
"With all the hate talk, Ma, I'm wondering if thats what a Christian would say."
As if I need the likes of you to preach to me what is or is not Christian behavior---as if you would even know. In addition, is telling an idiot that he is an idiot really "hate talk", or cold hard honesty? I'm sorry for posing such a tough question. The answer is, it's honesty. If my style is less than Christian, you can write it off to my less than perfect nature as I tell you to pound sand. Like feodor, you come here to provoke. I don't mind. I'm more than happy to give you the smack down you seek. Then, you can pretend that you've raised my hackles and dance triumphantly in grade school jubilation. As long as my visitors are happy...
MA,
You have made it clear in the past that you only consider conservative sources like the American Thinker trustworthy. I can offer you no such links to support my position.
lol @ Ma...
"the authors to whom I link use CBO numbers, as well as IRS and OMB numbers, too."
Then I'm sure those authors pointed out that the CBO ranked the "Bush Tax Cuts" as 11th out of 11 of the proposed plans they studied to get the economy going.
Ma.. think about when the Bush Tax Cuts were going into effect, 2001, and their objective, to get rid of that pesky budget surplus.
What about Moodys? Do you know who they are?
"As if I need the likes of you to preach to me what is or is not Christian behavior"
LOL.. Ma.. you managed to miss one small point. I have no interest in defining who is and who isn't Christian. That is Mark's job.
"You have made it clear in the past that you only consider conservative sources like the American Thinker trustworthy."
To be more accurate, I've made it clear that I find the sources on which I rely to be trustworthy (which is why I use them), and result in no alternative equal from my opponents, but only derision and cheap shots at the points (assuming they're understood by my opponents---not commonly true) made by the authors of the articles I present. I have absolutely no issue with reviewing counter arguments in links presented by my opponents (to suggest otherwise is sadly untrue as I consider all the wasted time with some truly bad lib articles) and continue to welcome them, even insisting that they be offered at all.
My opponents insist they do not blog in hopes of changing anyone's opinions. I say that's crap. While I admit I look to convince, however poor my attempts, I also insist I stand ready to convert on the basis of sound argument and facts. To date, none have been presented that could even nudge me in that direction. That's not stubborness on my part, but failure to the part of my opponents.
Glad I could clear that up. Now, Vinny, if you have anything to present, do so.
"Then I'm sure those authors pointed out that the CBO ranked the "Bush Tax Cuts" as 11th out of 11 of the proposed plans they studied to get the economy going."
Source, please? And while you're at it, find an article I've presented that sought to rank Bush's plan as opposed to merely stating the true results of the plan. Also, the CBO does not make analysis on anything other than data presented to it. Thus, if mitigating factors are left out or if data presented is not honest and accurate, rankings of effectiveness are questionable. As you've made the charge, back it up.
"
What about Moodys? Do you know who they are?"
Yes, I do. What's your point? Not the one on your head, but the point about Moody's.
Today (or was it yesterday?) I saw an article speaking of Moody's position that the rich save more when they get tax cuts. I guess this was printed as a reason to allow their cuts to expire, but it fails to mention why this is a problem. Whether I decide to invest myself or put my money in some form of savings plan (mutual funds, passbook account), is besides the point of cutting our taxes. In either scenario, the money is now in the private sector and even if the rich save their tax cuts (do you really think they'll store it under their mattresses?), it is being used for investment by someone. That's a good thing.
"I have no interest in defining who is and who isn't Christian."
Yet you wonder about what constitutes Christian behavior in either of us. The charge of "idiot" seems more appropriate every time you post a comment. Thanks for the laughs.
"it fails to mention why this is a problem"
I rest my case. Parklife 1 - Ma 0
"Yet you wonder about what constitutes Christian behavior in either of us."
LOL... You're reading too much into it.
""it fails to mention why this is a problem"
I rest my case. Parklife 1 - Ma 0"
Are you posting from a rest home of some sort? Frankly, I don't much care what you do with your case. It would be nice, however, if you would make one. Claiming victory would make so much more sense. Now I'm sure you think you've bested me somehow, but why not tell the class just how you did that? We love a good mystery, but at some point it helps to reveal it.
Here's an idea: since you are so in tune with Moody's, perhaps you might have some info from that source that actually counters what I've posted here. That's usually how it's done, you know. Unless of course you asked one of the orderlies to tell you the name of some source that you could pretend here to know all about. That might impress the other loons at the home, but I'll need a bit more meat before I can concede anything.
"why not tell the class just how you did that?"
Ma, perhaps you should enroll in an intro to economics course at the local junior college. That may help you with this difficult topic.
You have yet to respond to Fedor’s post awhile back, I was looking forward to that.
Parklife,
I am having absolutely no trouble with this topic whatsoever. I am, however, having big trouble trying to get you to post something substantive. Instead, all I've been getting is the most ambiguous comments regarding what I do or do not know or understand, but never any specifics to which I could ever hope to respond. That's not an indictment of my knowledge or abilities, it's an indication that you are full of shit. You think you're winning some battle of wits, but you've offered nothing in the way of either disputing what I've posted (other than to mock it in the most vague terms), or offering a substantive alternative. But if throwing cheap shots makes you feel superior, go right ahead. I don't mind you continually proving what a mindless ass you are. I find idiots entertaining. There's little more satisfying than for people like you to open your mouth (blog-ophorically speaking) and proclaiming to all who read your words, "Look at me. I'm a complete idiot!"
As to feodor's question, you seem to know how to cut and paste so do as much with feo's question and I'll answer it again, but with smaller words so that you can understand, if you possess any capability of understanding at all. I know. You mentioned Moody's so I'm supposed to think you know something, but humor me.
"battle of wits"
From your own comments, it is evident that you have no background in ecomomics. We can not have a "battle of wits" if you dont understand the topic. My only suggestion was to learn a little on the topic, more than what you read on-line.
"From your own comments, it is evident that you have no background in ecomomics."
Though I have never said that I had a background in economics, that is, any formal education in the field, there has been nothing in any of your comments that could ever hope to prove such a thing. What have I said that makes it evident to you? You've given no hint that any such thing exists or that you have the capacity for spotting it. All you've done is to spout off hoping to appear as if you're knowledgeable. But at some point, some proof of knowledge is helpful. I know it scares you to offer anything that can be scrutinized for fear it will be eviscerated. Don't be such a coward.
"We can not have a "battle of wits" if you dont understand the topic."
Nice dodge. Do you really think this fools anyone, coward? I'll make it easy for you, fool. I re-iterate that I am not formally educated in economics. That's on the table for all to see. Go ahead an open up. Let 'er rip. I stand unafraid for whatever you think you've got. I'm saying you got nothin'. You're a fraud, a bigger fraud than feodor. I have absolutely no fear of you or of being shown how little I know. The worst that I will suffer is further education and that's as much why I blog as any other reason. Bring it, punk.
Wow.. that was something.
Ma, you might want to consider the "Million Moderate March"
Parkie,
Might you want to consider quitting the sad attempts at cleverness and risking what you might consider a comment with substance? I know that's a pipe dream for me, as you've demonstrated no capacity for depth, thoughtfulness or knowledge of any kind, certainly not knowledge of how to be clever. Posturing yourself as intelligent works better if you demonstrate some intelligence. Do you have the sack for it? I'm wagering you don't.
"Do you have the sack for it?"
Parklife 2
Ma 0
Ma, you have no capacity to make a reasonable, rational argument. You are entrenched in the extreme conservative way of thinking. On top of that, name calling and general disrespect is not going to entice me to engage directly with you.
I would greatly encourage you to tone it down a notch. Take a course or two and learn that one day we can all get along.
Sparkie,
Upon what are you basing your scoring? Don't you at least have to play in order to rack up points? You haven't offered a thing in the way of substance and yet you see yourself winning? Winning what, exactly? Where have I gone wrong (as if I haven't asked) and where have you corrected me? Which of your many substance free comments have demonstrated any knowledge or capability on your part to engage in civil discourse? Indeed, how does my being "entrenched" in extreme conservatism indicate in any way a lack of ability on my part? I would say that adhering to conservative philosophy even by accident demonstrates more reasonable and rational thought than anything from the leftist point of view, and far more than anything you've thus far NOT provided in any of your lame comments.
But of course, none of that matters, since you obviously have no game and instead seek to provoke (nice try) in order to whine about name calling. I don't mind for as I said earlier (elsewhere if not here), I don't mind providing fools and opportunity to display their foolishness. And you insist on waving the banner boldly.
Conservatism by its nature (as it is understood today---whether you understand it is another question) is reasoned and rational, which is why I fall in with conservative thought. Way back when, when I first took a serious look at politics and thought that I was more of a Democrat/lib, than a conservative, I found that conservatism aligns perfectly with logic, reason and most importantly, Christian teaching. To say so makes lib heads explode, but that's only because they neither understand conservatism or Christianity. What YOU understand I couldn't say because you haven't summoned the courage to risk presenting it. That's what makes you a coward and a fraud. It isn't name calling. It is an accurate description of the commenter who calls him(or her)self "Parklife", and it is based on the empty comments and false triumph expressed therein. If you insist on spouting foolishness in your otherwise meaningless comments, then "fool" is an appropriate description of how you've presented yourself. Don't get all defensive with me if I call it as I see it. Perhaps YOU should be making the adjustments so that you might have a chance to receive a bit of the respect you seem to think you have coming.
You'll notice that I don't give Vinny a hard time. He tends to actually engage to some extent. Even Dan Trabue, of all people, seeks to provide SOMETHING on which to debate or discuss, even if he only reverts to tap-dancing away from the implications of his own words. But he provides words to consider (though the result is always the same), whereas you provide nothing. (Where are we now? Parkie 3-MA 0?) All I've said is true based on what YOU have presented (in this you're quite like Dan): you're a coward for not risking your opinions, you're a fraud for acting as if you know something (w/o proving it) and you're a punk for thinking you're clever. It would be so easy to prove me wrong. Doing the cry-baby thing and expecting me to suffer it won't get it done.
For example, to say "- Add in the money to refurbish a military whose equipment and materiel have been greatly depleted..." is to assume that refurbishing equipment and material doesn't take place even during peace time. Or more to the point, perhaps it wasn't done as it should have been with spending by the previous administration, run by a guy who "loathed" the military. Now, when there is a war, feo and his preferred columnists and economists want to put all that cost on Bush. Can't do that and be honest about the cost of the war.
Excellent point Marshall! I see very few on the left admitting that truism.
It’s as if the money spent on defense is a constant “whipping-boy” for the left; and to be sure the military budget is rife with waste and fraud. But, as the left seldom points out – all government spending is rife with waste and fraud. The fact that government spending on our defense is one of the few areas mandated by our constitution, and that it is also one of the longest areas of continued government spending almost guarantees it’s going to be full of waste and fraud! BECAUSE THAT IS WHAT GOVERNMENT DOES BEST, that is, waste our money and provide an atmosphere for fraud.
To whistle blow on that waste is admirable. But to get yourself in a “tizzy” and faking a case of the “vapors” screaming about fraud, mismanagement, and waste in the military budget, while simultaneously championing government growth in other areas is somewhat disingenuous.
It’s all about consistency, transparency, and accountability, man! You (those on the left) that point out waste in the military budget while passing on all other waste in government spending, render your arguments somewhat suspect.
Once upon a time, I voted for Gerald Ford and Ronald Reagan because I too thought that conservatism aligned with logic and reason. Since that time, America went from being the biggest creditor in the world to the biggest debtor. It lost its manufacturing base. Wealth became more and more concentrated in fewer and fewer hands. CEO pay went from 35 times to 300 times the average worker's pay. The financial system has been hit with the savings and loan crisis, the 1987 stock market crash, Long Term Capital Management, and the subprime mortgage crisis. Despite all this, conservatives keep claiming that tax cuts pay for themselves and the rising tide of the economy lifts all boats and less regulation is always better. I still appreciate the logic and reason of the conservative position. The problem is that it never seems to align with the facts.
Blamin,
Really good to see you comment again. I missed ya.
Vinny,
"I still appreciate the logic and reason of the conservative position. The problem is that it never seems to align with the facts."
The facts are that you haven't showed how conservatism can rightly be blamed for the ills you've listed. And if conservatism doesn't align with the facts, then it's neither logical or reasonable, is it? Yet, one must make that connection in order to make the claim you imply.
We know the subprime mortgage was a result of Democratic intervention in the housing industry, in a well intentioned attempt to allow more people to own homes. Conservatism does not make that play because it recognizes the reality that if one cannot afford to buy, one should not.
Market crashes are corrections that take place every now and then, but even if you try to make the case that capitalists manipulated the market, as we saw in the crash of '29 but is no longer legal, that isn't conservatism OR capitalism, but greed. Greed is neither conservative or liberal no matter what liberals try to make people believe.
The level of CEO profits is none of your concern unless you can prove some illegal activity that drove it up. Though we all wish that increased profits will lead to higher pay, there is no mandate from any source that insists it should or that anyone should expect that it will. And even if you want make it a case of ethics, what is even more true is that to force anyone to raise the pay of their employees is definitely unethical as no one has the right to dictate to another how to run his business. Income disparities is a lame argument against conservatism, but it is an indictment of the envy and covetousness of liberalism.
If you truly see the logic and reason of conservatism, then to be a liberal is illogical and unreasonable itself. If you cannot make a direct connection between conservative philosophy and whatever ill you attribute to it, then your charge is unreasonable and illogical.
MA,
I'm sorry but you are absolutely wrong about the causes of the subprime crisis. It was the failure of the government to regulate that caused the problem, not government interference. The facts do not support your assertion.
There was not a single financial crisis in the the four decades after the reforms put in place under FDR. There have been four such crisis in the three decades since deregulation began under Reagan. Once again, facts are facts.
The positive results that conservatives claimed would result from tax cuts and deregulation of the financial industry have not come to pass. The rich have gotten richer and most Americans have been left behind.
Democracy has never flourished in any society that did not have a healthy middle class. Tremendous concentrations of wealth lead to tremendous concentrations of political power.
I have no problem with a Bill Gates or a Steve Jobs who become incredibly wealthy because they create and innovate, but there is something fundamentally wrong with a system in which Dick Fuld can take home hundreds of millions of dollars of compensation for turning Lehman Brothers into the time bomb that almost brought down the financial system.
Vinny,
First of all, dereg didn't begin under Reagan. Carter signed a dereg bill in 1980 that affect the financial industry. Transportation dereg occurred under Nixon, Ford and Carter so Reagan didn't even start that. My question to you, since you want to lay all on old Ronnie, is in what manner did his deregs (after first specifying which were his) "cause" any financial crisis. Keep in mind, I'm referring to direct cause of the policy itself, not how it may have been abused or twisted by ne'r do wells afterwards. What I've been finding is not so much a reduction in oversights, which is more likely a cause, but a reduction in controls, which opens up markets. Oversight is probably where you should be focussing attention. But the fact remains that the actions of Dems in the financial and housing markets had much to do with allowing loans to people unable to pay them back, and the giving lenders the ability to sell those bad loans to entities like Fannie and Freddie. If this isn't the case, I have yet to see a better explanation or set of proofs.
You seem to focus so heavily on what the rich have. Why is this and how does it matter to what YOU have or don't have? Why do suppose your situation isn't soley the responsibility of your own self?
You have yet to provide anything to demonstrate any connection between conservatism, the policies of a conservative like Reagan, and the plight of the middle class. You just keep making charges. I would very much like to learn as I don't wish to remain a conservative if indeed conservatism causes harm. I don't think it does, I don't think you can prove it does and I don't think you can separate the actions of an individual with the philosophies of conservatism.
That last bit is for those who would point to anyone self-identified as being on the right and attaching the consequences of his actions to conservatism, just because he calls himself conservative. GW Bush might be conservative, but nowhere near conservative like Reagan, and he clearly implemented, or attempted to implement, blatantly unconservative policies.
So since you make the charge, I'd like you to make the case.
Throughout most of the housing boom, Fannie Mae and Freddie Mac lost market share because they were limited to investing in conforming mortgages. They could not invest in innovative products like no-doc, interest only, pick-a-payment, or any of the other crap loans that the mortgage industry invented and securitized. Until late in the game, Fannie and Freddie only invested in and guaranteed loans that met traditional underwriting standards. The sub-prime crap was the invention of private parties acting without government inducement.
The housing bubble was already well inflated before Fannie and Freddie relaxed their standards at all and they never got into the worst crap. Moreover, when they did relax their standards, they got into higher end mortgages to borrowers with good credit ratings. They did not get into trouble by lending money to the poor. Fannie and Freddie helped to blow the last couple puffs into the bubble, but were in no way the cause of the problem. They were casualties of the bubble not causes.
When you demonstrate the ability to comprehend the facts regarding Fannie and Freddie, I will be happy to address more complex issues.
Vinny said...
“Once upon a time, I voted for Gerald Ford and Ronald Reagan”
Once upon a time I was a liberal. I voted for and fought for the “cause”.
Then I grew up. I realized that critical thought trumps knee-jerk emotionalism.
Vinny,
My understanding of Fannie and Freddie ain't the best, but I think it's better than yours. Here's but one source that fleshes out the issue nicely.
It seems to me that lenders were content to deal with only those who, by their ability to raise the large downstrokes, were perceived to be responsible and good risks. The gov't pressured lenders to deal with riskier borrowers in order to appear to have done something for the "downtrodden". Fannie and Freddie were every bit responsible for the mortgage crisis as anyone, and arguably a major culprit.
Unlike you, I read to learn rather than to have my presuppositions reinforced. Among the books I have read are the following: The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy by George Cooper; House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William D. Cohan; The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash by Charles R. Morris; 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson and James Kwak; Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy by Barry Ritholtz, Bill Fleckenstein, and Aaron Task; The Foreclosure of America: The Inside Story of the Rise and Fall of Countrywide Home Loans, the Mortgage Crisis, and the Default of the American Dream by Adam Michaelson; Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips; The Age of Turbulence: Adventures in a New World by Alan Greenspan
I have recommended Barry Ritholtz’s blog, The Big Picture, to you before. Ritholz is a financial analyst without a political agenda. As I recall, you said you couldn’t figure out whether he was a conservative or a liberal, which I suppose disqualified him in your eyes. However, last week’s post titled Frannie/Freddie Acquitted explains the facts quite nicely, although I doubt that you will grant it much credence since it doesn’t simply blame the Democrats for everything.
Vinny,
That's quite an assumption on your part to suggest that those with whom you disagree are reading only to support presuppositions. Are you suggesting that the link I presented is leaning right vs left as opposed to simply studying the issue and coming to conclusions? Then of course is the assumption that you're understanding what you're reading and I'm not. That's a lot of arrogance you've got there, Vinny. How 'bout instead, simply showing what is wrong with my link. I'm getting really tired and bored with libs denegrating that which doesn't comport with their warped realities as being somehow a matter of bias and leaving the argument there. You made a statement and I provided what appears to be unbiased testimony. But rather than argue the merits of that testimony, you prefer to attack me personally. I don't give a flyin' rat's ass what you read if your attitude is such. Why should I believe you comprehend the books you read when your responses fail to deliver any substance?
As to Ritholz's blog, I don't recall either his name or it. I'm not saying you're mistaken, but only that I don't recall. I'll check out the link later and see if he supports his premise to a level that suggests he's not doing what you accuse me and my sources of doing. Then we'll go from there and I'll show you how a response should look.
MA,
You claimed that you knew more about Fannie and Freddie than I did. What have you read? Where did you get that knowledge? Have you read anything that covers what happened at Fannie and Freddie between 1999 and 2005? What kind of loans did they buy and/or guarantee? Why did they lose market share in those years? What kind of loans were being made by private lenders? Why were they making those loans if Fannie and Freddie wouldn't buy them? Who were they selling them to? Why did investors prefer those loans to the loans securitized by Fannie and Freddie? How much lower is the default rate on the Fannie and Freddie loans than on the others?
Don't give me links. Show me you understand it better than I do by explaining it to me.
Vinny,
This is what you said:
"I'm sorry but you are absolutely wrong about the causes of the subprime crisis. It was the failure of the government to regulate that caused the problem, not government interference. The facts do not support your assertion."
The first three paragraphs of the link I provided tell you all you need to know about what happened and who or what caused it. Notice the last line of the 1st paragraph:
"... in order for lending institutions to have access to the secondary mortgage market of Fannie Mae they had to abide by Fannie Mae's rules."
Then it goes on to say the Fannie insisted on lenders refraining from red-lining. But red-lining was a logical practice that protected the interests of the lenders and their patrons. They did not want to take the chance of having to take possession of a property in a bad neighborhood if the borrower defaulted, even if the borrower had initially met all their requirements. I'd say that's a reasonable position for a lender to take. But Fannie said otherwise and forced them to prove that their denials were not the result of redlining. They were forced by this to provide loans to people that were less likely to meet their debt obligations. Their practices were changed by Fannie Mae because they'd have been unable to do business with Fannie if they refused to make loans to those from bad neighborhoods.
Many of your questions are answered in the link I provided. What makes you think the link is insufficient? What in any of your books says anything different? Why are you so intent on trying to blame conservatism and capitalism for human failings and the corruption of Fannie Mae people like Franklin Raines?
"Don't give me links. Show me you understand it better than I do by explaining it to me."
What a bullshit think to say by a guy who was asked to explain his own contrary opinion. In other words, I asked you first to show what was wrong with anything I've already said. Instead, you simply made charges with no support. When I offer a link, you brag about how many books you've read, as if any of those are worthy of consideration simply because you read them. How can I be assured the books you've read are worth a damn? How can I be assured that you understand what you're reading?
So once again, the question was whether the crisis was a result of conservatism or if it was spurred by gov't interference. The facts say is was gov't interference that began the whole thing.
To get more to the point, you maintained that a variety of the nation's ills were a direct result of conservatism and have yet to offer one shred of support for this contention. I'm not about to chase around all these questions so that you don't have to back up your assertions. For Pete's sake, Vinny, that's what feodor and parklife are for.
in order for lending institutions to have access to the secondary mortgage market of Fannie Mae they had to abide by Fannie Mae's rules.
This is actually somewhat true. It is the reason why the investment banks decided to securitize mortgages without following Fannie Mae’s rules. Fannie Mae’s rules had underwriting standards that cramped the style of the investment banks. Fannie Mae required down payments and income verification and it would not insure jumbo mortgages. However, the investment banks realized that they could charge higher rates and fees on low-doc, no-doc, interest-only liar loans. Independent actors in the free market bought the mortgaged backed securities that Fannie Mae wouldn’t touch because they trusted the unregulated free market. That is why Fannie and Freddie lost share in the secondary mortgage market from 2000-2005.
Unfortunately, after the bubble was well along in 2005, Fannie and Freddie lowered their standards in order to regain market share. Fannie and Freddie were badly run companies but they did not create the housing bubble. They were late to the game created by private parties pursuing their self-interests of their own free will. Of course your douchebag doesn’t mention this because it does not fit his ideology. However, people in the real world know that’s what happened.
Thayer Watkins?
MA,
Let me ask you a question: When you file your tax return, do you take every deduction in order to minimize the amount you have to pay or do you pay extra?
According to your theory, the government induced lenders to make crappy loans to low income borrowers by having Fannie and Freddie guarantee those loans or purchase them and turn them into mortgage backed securities (MBS). However, the lenders did not seek to minimize their exposure to crappy loans. Instead, the lenders invented even crappier loans that Fannie and Freddie wouldn’t backstop like pick-a-payment loans to people who couldn’t verify any income. Moreover, investors preferred MBS based on these crappier loans to MBS that came with Fannie and Freddie guarantees. Fannie and Freddie lost market share because the lenders could make more money by making incredibly crappy loans and selling them to investment banks like Lehman Brothers, Merrill Lynch, and Bear Stearns than they could by making the moderately crappy loans that met Fannie and Freddie’s standards.
Under any theory of rational free markets, lenders would not knowingly make crappy loans without a government backstop and investors would not knowingly buy crap based MBS without a government backstop. According to your theory, they did. They were too stupid to figure out that the Democrats wanted them to act against their own economic self-interests and they knowingly threw away their money. It would be like you declaring income you didn’t have so you could pay even more taxes than required.
Vinny,
I'm going to respond in more detail to your recent posts later. For now, I'm only checking in while I have a moment between tons of chores. Regarding your last link to the Big Picture, I noticed this:
"The proper question is not: What story is consistent with my general philosophy or worldview?"
Why do some people feel that it is OUR side that is asking this question? I can't even say that our side assumes this of YOUR side. Also, how can anyone be sure that the Ritholz is not asking this question himself, even though he claims not to?
As to your last comment, I would begin by saying that you're acting on a shakey premise. As my source explains it, Fannie was set up to provide the secondary market whereby lenders could sell mortgages in order to acquire more money for investments. But Fannie put the stipulation to them that they could not red-line. So indeed, this was the initial pressure to make riskier investments put on the lenders by a gov't entity. That's the way I understand the history. If you're saying that lenders went elsewhere and Fannie changed to re-attract their business, the question becomes why did they buy bad mortgages? The lenders didn't have to worry about the quality of the loans once the gov't guaranteed them. It seems you're saying the bad loans came first. But that doesn't make sense. What compelled the lenders to make bad loans if there was no market for them? Who would want to buy bad loans and risk a default? The gov't was guaranteeing the loans after forcing lenders to lower their standards in order to allow those whose credit wasn't originally good enough, to get a home loan.
The issue here is how did it all start? What was the action that set the ball rolling? It seems, as best as I've been able to ascertain, the consequence of gov't interference. Y'know when banks first started providing loans for homes, downstrokes were as high as half the cost of the property. One really had to prove that they were responsible enough to entice a lender to part with their dough. The length of the loan was normally less than even 15 year loans, often five years. The idea was to make a profit and there were no guarantees to the lenders that they wouldn't lose money, so the terms to qualify were stiff indeed. The terms were all the guarantee they had until the gov't opened up the secondary mortgage market. Who else was buying mortgages until then and who was willing to buy crappy mortgages? I don't see that any private entity would willing take such risks without incredibly high interest rates, and likely the borrower's first born as collateral.
Gotta go, but I'll be checking out your link in more depth later. I wonder if you even glanced at mine, or simply ignored it believeing it would only be inconsistent with your general philosophy or worldview?
I read your link and I looked at the guy’s resume.
Fannie Mae was established in 1938 to create a secondary market for long term mortgages. These were not crappy loans. These were good loans that the banks would have made in the first place except for the fact that they didn’t want to fund twenty year loans with short term deposits for fear of a run like The Bailey Building & Loan had in It’s A Wonderful Life. The lenders sold some loans to Fannie but they also kept many of them.
Redlining is a practice by which lenders simply refuse to lend in certain higher risk areas. For example a bank might refuse to lend in Humbolt Park where there are more crack whores than in Barrington. The problem with redlining is that there are lots of decent hardworking folks in Humbolt Park who might like to buy a home, but it is more work for the lenders to figure out who is a good risk and who is not, so it’s simpler for the lender simply not to lend money there at all. The idea behind prohibiting redlining is not that the banks will lend money to crack whores, but that they will find those hardworking folks who deserve a loan.
I am not sure whether or not banks made loans to crack whores rather than good hardworking folks in order to meet Fannie Mae’s anti-redlining rules. If they did, however, I am sure that they made the absolute minimum number of loans they had to make in order to make Fannie happy. They would never have lent on the scale that was necessary to create the housing bubble. Fannie had been contributing to a stable housing market for fifty years before it took a stand against redlining.
Fannie Mae had always issued mortgage backed securities however, they were fairly boring. A single pool of mortgages was turned into a single type of bond. In the 1980’s, investment banks came up with the idea of slicing a pool of mortgages up in to many different bonds with different risks. At the top was a bond that had the first claim to payment and it carried the lowest risk and the lowest interest rates. This bond would be paid off unless all the mortgages in the pool defaulted. At the bottom was a bond with the highest rate of interest. This bond took the first hit in the case of default. In between were various slices (or tranches) with various risks and rewards.
These sliced and diced MBS were more popular because they gave the investors more choices. However, the market really took off in the middle of the 1990’s when the rating agencies got involved. At this point it became possible to take any pool of crappy loans, whether it was mortgages, credit cards, equipment leases, or car loans and slice them and dice them in such a way that the ratings agency would slap a AAA rating on the top slice. These securities looked great because they carried the rating of a top notch corporate bond but they paid a higher interest rate.
The subprime crisis happened because Wall Street figured out a way to spray perfume on a pile of crap and make it smell like roses. Lenders went nuts making loans to people who had no business owning a home, but it was not because the Democrats wanted them to, but because Wall Street was eager to buy those loans and sell them to unsuspecting investors.
Vinny,
"Fannie Mae was established in 1938 to create a secondary market for long term mortgages. These were not crappy loans."
I don't think anyone's suggested that crappy loans were being sold to Fannie in the beginning. Lenders weren't in the business of making crappy loans and went to great lengths to avoid making crappy loans. The crappy loans came once they were pressured into it.
"The problem with redlining is that there are lots of decent hardworking folks in Humbolt Park who might like to buy a home, but it is more work for the lenders to figure out who is a good risk and who is not, so it’s simpler for the lender simply not to lend money there at all."
This is not the case and doesn't even make sense. The lender goes through the same procedures for each individual to determine credit worthiness. The reason red-lining was practiced was not because of the borrower, but because of the neighborhood in which the borrower lived. What are the three most important things to remember in real estate? Answer: location, location and the third is, location. A borrower meeting all the criteria for the loan, that is, a low risk borrower, can still be hit by a truck. If the property on which the loan is given is in a crappy neighborhood, the bank will have more trouble selling the home if the good borrower meets with some catastrophe that compels the lender to foreclose. Lenders do not want to try to sell foreclosures. They only want to lend money and collect the interest on the loans.
I don't think you can make the case that lenders were interested in making crappy loans without first being compelled to do so. Why the hell would they? Even your notion that someone, WallSt, I think you blame, came up with ways to sell crappy loans, you still have to make the case that there was some compelling reason to make the crappy loans in the first place. (I'm assuming by "crappy loans", we're both referring to loans to people not as likely to pay them off---people with poor credit ratings, low wages, etc) Would you loan a hundred to someone you felt was likely to stiff you? Not likely, unless your uncle, let's call him Sam, told you he'd give you a hundred if the guy defaults.
So you need to show that anyone was perfuming anything on their own volition when they were already making money on good loans to qualified borrowers. To be specific, who was the first to offer to buy crappy loans and who was the first to disguise them as safe loans in order to dupe anyone into buying them?
My problem with your stuff, to the extent that I've been able to read so far, is that it seems to explain the "debacle" from a point beyond the beginning. And from there, it seeks to lay blame at the feet of those who were already doing what they would not have done had they not been compelled to do so. Worse, you seem to be trying to absolve Fannie from their complicity in the crisis and I think there is enough to show that they were not innocent victims of anyone. Whether their motivations were honorable or not is irrelevant to the question of how we got here. If gov't was NOT responsible for setting this ball in motion, you have not made the case.
"a low risk borrower, can still be hit by a truck."
Ma, do you really understand any of this? Or are you just pretending not to? Your explanation for how things have happened / how things happen is terrible.
There have always been people who found ways to make money lending to poor credit risks. Pawn brokers are the most obvious example. A loan is only truly crappy if the collateral and interest rate are not sufficient to compensate the lender for the risk of default. There have always been businesses that made car loans, appliance loans and second mortgages to people with shaky credit. However, prior to the rise of securitization, these were relatively small operations that had to rely on careful screening and aggressive collection practices to make a profit because there was no secondary market in which to sell the loans.
The businesses that originally made these kinds of loans did so because they knew how to make a profit. They weren’t compelled to make the loans. They only made loans when they were confident in the collateral and the chance of collection because they could not be resold to Fannie and Freddie. When Wall Street started buying these loans and packaging them as MBS, it attracted a lot of new players to the business. The newcomers did not have the same standards because they never expected to be responsible for collecting them.
Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis, by Paul Muolo and Matthew Padilla has a good history of the subprime lending industry. I wish I could provide you with more detail, but it's one I borrowed from the library more than a year ago.
Vinny,
You give me book titles and links to articles, which is more than Parklikfe ever does (he'd rather just pretend he understands as opposed to offering substantive comments) and though I am low on time at present, at least the titles are available for me by searching my own blog. I appreciate that for sure.
I would say this for your initial response, though: Pawn shops are not the same. They mitigate their risk by offering loans against the property that are far less than the value of that property so that they can sell it for a profit to cover the loan that hasn't been paid. In that, their risk is really low, especially compared to the far more sizable home loans. The lenders do NOT want to sell properties to cover their loss, but prefer the loan to be repaid. They aren't set up for real estate sales (as a profit making venture).
Dinner time. Gotta go. Go Bears.
I didn’t mean to suggest that pawn brokers would make real estate mortgages. I just used them as the most obvious example of people who lend money to people who are poor credit risks. Another example would be store credit cards which can be obtained by people who wouldn’t qualify for a Visa or Mastercard. The stores usually charge a higher interest rate and the risk is offset by the markup on the product. If the store’s margin on each sale is 50%, it can live with a higher rate of default than Visa or Mastercard can. My point is that loaning to people with poor credit can be profitable if done correctly and there have always been some lenders, like the mafia shylock, who have specialized in it.
My recollection of that last book I mentioned is that some of companies that specialized in subprime mortgage lending like Ameriquest were run by guys who got their start in businesses that financed subprime loans on cars and major appliances. In those businesses, the lender doesn’t want to repossess the collateral either since its sale is unlikely to cover the amount outstanding on the loan. However, if they demand a sufficient down payment and charge a high enough interest rate, they make enough on the people who do make their payments to offset the ones that they are unable to collect.
"You give me book titles and links to articles"
Ma.. I completely agree with Vinny. Not only that, but he has a finance background with an easy writing style.
The funny part about this is you are the one with the conspiracy theory. There are hundreds of books, some at the library, which you can read and they support Vinny's comments. Might I suggest the WSJ? What about NPR's "This American Life", they had a few episodes explaining the crisis. Each one of these sources supports Vinny.
Parklife,
Thank you for the kind words. I am never sure that I actually understand an issue unless I can express it clearly to someone else.
MA,
I make my living in the stock market and I don't want to bet my family's financial future on my liberal biases. I really do try to find people who will give me the straight dope regardless of which side looks worse. I think that there are plenty of villains from the Democratic side of the aisle in this mess including Robert Rubin, Larry Summers, Chuck Shumer, and Chris Dodd.
Park,
You agree with Vinny? Really? No kidding? Wow! I'd have never guessed! That's freakin' amazing. I never saw that coming! Incredible!
Perhaps you can give an idea of just what you think YOU know about anything. Anything? Anything at all? No. You know nothing but prefer to pose as someone in the know. You offer nothing. You are nothing.
Vinny,
Don't kid yourself about Parky. He might agree with you, but he couldn't tell you why if his life depended upon it. If you can find any comment in this thread alone that implies he knows anything, I'll be impressed.
As to your own self, I appreciate the gracious admission of Dem complicity in the crisis. But as regards politicians, who on the right has implemented policies that contributed? I don't mean who signed on to Dem policies (heaven knows there have been lefty Republicans and still are), but what conservative contributed? This would be tough since a the policies indicate lefty thought, though it is possible a normally conservative person might go astray on one issue. But I don't think you'll find many hard-core conservatives that had anything to do with this beyond mitigating it to the best of their ability. Just a hunch. But since you are so well read on the topic, you might have someone in mind.
Ideological opposition to the regulation of financial markets is a righty policy, not a lefty one. That is the idea that the Dems bought into. Phil Graham would perhaps be the conservative politician with the most blood on his hands since he was instrumental in both the repeal of Glass Steagal and the Commodity Futures Modernization Act of 2000 which blocked regulation of over-the-counter derivatives.
Vinny,
Before I dive into Gramm's actions, I would suggest that what is dividing us is the concept of regulations at all. (Not to be confused with oversight) Regulation is the Dem version of, "Since some kids won't eat their dinner, no one gets dessert." Regulations prevent honest people from doing business in the most logical and efficient manner. It also assumes that all people are crooks. This is the basis of the opposition to regulation.
A co-worker sent me a PBS documentary about the crash of '29. One of the main causes dealt with the top dogs manipulating the markets, in the same manner demonstrated in the movie "Trading Places" (Akroyd & Murphy). This is not much different than the artificial manipulations of the average Dem financial policy and it hurts everyone. It was logical that such activities be rendered illegal. Look at the result: deceptive practices to artificially create a profitable result.
But redlining was not such a practice. It was done, as was described, to prevent the possibility of a default leaving the bank with a property to sell in a bad neighborhood. To pressure lenders to loan money to people in this area, including those who wouldn't normally qualify for a loan, was to set up lenders for failure. This is the type of intervention and regulation that hurts business and ultimately the economy. To oppose such interference by chuckleheaded politicians is mandatory for anyone with any shred of common sense. For now, as we've seen with the redlining issue, business people will alter their behaviors to protect their interests and the interference caused it. I don't pardon any lender who chose to act illegally or unethically. But if they were left to themselves, they would not have been compelled to attempt such things. Why would they? They were doing fine.
Anti-redlining policies had nothing to do with the subprime mortgage crisis.
Did you just use Dan Akroyd and Eddie Murphy as a source?
"Did you just use Dan Akroyd and Eddie Murphy as a source?"
Good gosh, you're an idiot.
"you're an idiot."
Again, what part of your faith teaches you this? lol.. nevermind..
Ma.. Focus like a laser beam. We have all been waiting for a credible response regarding the cause of the crisis.
I stopped by the library and borrowed Chain of Blame again. I would say that me recollection was essentially correct. Beneficial Finance started out before World War II as a company that made fairly small loans to consumers secured by cars or appliances. In the 1960's it moved into the business of making second mortgages. In the 1970's it was joined by other companies like The Money Store. These were the kinds of lenders that provided the first subprime loans for Wall Street to securitize into MBS. It was not banks and S&L's responding to government pressure.
"Again, what part of your faith teaches you this?"
You mean, telling the truth? Should I lie and say you've been nothing short of brilliant? Is it typical for heathens to goad Christians, provoking them to speak the obvious for the purpose of having the opportunity of attacking the Christian as being less than Christ, who called people hypocrites and vipers? I won't argue that it is unChristian to call people names. But, if I saw a guy with one leg on crutches, is it unChristian to call him a cripple? After all, he is crippled. And after all, you are an idiot. Both are statements of fact. The difference is, that I have more compassion for the cripple and despite my disdain for the politically correct, I would refrain from using the term "cripple" if I thought the person would be offended.
But like the thief, who can become something better, I see no downside in calling you what you insist on being. My hope is that you will alter your behavior to something less idiotic rather than be known for the idiot you plainly are.
Now. Focus like a laser beam. I've been waiting for something resembling a substantive comment from you. I've not felt a compulsion to hold my breath.
As for whatever YOU'RE awaiting, I invite you to hold yours for a long, long time.
The fact is, that I have answered quite a few questions in this post and have yet to have anyone show where I'm wrong (though Vinny's offering something akin to an arugment---study him for how it's done) and have yet to hear answers to questions I've had on the table for days.
To clarify, I've yet to hear an explanation for Vinny's comment of Sept 10 @ 0805hrs. That's how this whole thing got started and somewhere it jumped to the subprime situation with no noticable connection. I'm cool with tangents, and frankly, I'm into the subprime discussion. But I don't need a clinical idiot supposing he's in on any of the conversation when he hasn't shown one shred of evidence he has any understanding and then thinking he's got any right to demand anything. Sometimes the village idiot just needs to shut the hell up until we need entertainment.
MA,
How does bringing up a comment I made three weeks ago clarify anything? It seems to me that you are rather desperate to switch the topic to something where you think you have a better chance.
"It seems to me that you are rather desperate to switch the topic to something where you think you have a better chance."
I dunno, Vinny. You seemed to employ this very tactic yourself. It came about as I was trying to get you to support your comments from the post referenced in my last comment. But I think I may see where I may have invited your departure from the path. Note the emboldened words:
"The facts are that you haven't showed how conservatism can rightly be blamed for the ills you've listed. And if conservatism doesn't align with the facts, then it's neither logical or reasonable, is it? Yet, one must make that connection in order to make the claim you imply.
We know the subprime mortgage was a result of Democratic intervention in the housing industry, in a well intentioned attempt to allow more people to own homes. Conservatism does not make that play because it recognizes the reality that if one cannot afford to buy, one should not."
It should have read "subprime mortgage crisis". You might not think the distinction makes a difference at this point, but it may have at the time. My point was that as you can see from the entire exerpt, the subprime issue was a mere example of my larger point at the time. YOU chose to focus on the subprime issue rather than address the objection I made to your sweeping accusations about conservatism, accusations you not come close to supporting. Thus, your changing of the subject to the subprime issue is understandable, and as I said to little Parkie, I'm into the subprime discussion and haven't bailed on it at all. But the fact remains that we got here as a result of YOU switching topics.
"idiot"
Lol.. Ma.. Do whatever you like. Nobody really cares. Just interesting that you can twist your book around to make it say whatever you like, just like your book was used to justify slavery and homophobia. The name calling is just a small example.
Honestly, I dont really want you to be distracted by this. I do hope that you plan to stay focused on missing the entire economic focus of this topic.
By the way, the ratings agencies should not be let off the hook. The ignorant approach they took to stoke the fires of this meltdown should not be under estimated. But, again.. the ball was already rolling at that point.
I understood that you meant subprime mortgage crisis.
There are a couple reasons that I chose to focus on the subprime mortgage crisis. First, I have spent a lot of time reading about it and trying to understand it. Second, your assertion that "[w]e know the subprime mortgage was a result of Democratic intervention in the housing industry" is just blatantly false. If I cannot show you the error of your ways on that point, there is no point in even trying on any of the other issues.
Parkie,
I'm stunned and amazed! Your last comment came really close to having substance. It almost makes it seem as if you understand the issue. If only you could have spoken on where the ratings agencies fit in and just how they support the notion that they are part of the big conservative conspiracy to destroy the middle class in order to enrich the already wealthy, by golly, that would have been great!
Regarding the Book and the faith that comes from understanding its message, I don't see how I'm twisting anything. Did I miss some part where it instructs me to allow jerks to act like jerks? Am I to suffer the presence of fools who seem to have no purpose other than to crack wise and provoke, posturing themselves as wise while demonstrating no wisdom? I know I come close to returning evil for evil, but to wipe the dust from my sandles is difficult when trying to maintaining a policy of allowing fools (like yourself) the forum for exposing theirselves as the fools they are. Quite a conundrum. In that vein, if you now wish to attempt to school me in Christianity, I'm up for the comedy.
"...your assertion that "[w]e know the subprime mortgage was a result of Democratic intervention in the housing industry" is just blatantly false. If I cannot show you the error of your ways on that point, there is no point in even trying on any of the other issues."
But you haven't done that. Democratic intervention goes back to Glass and Steagall themselves. And of course, there's Carter's CRA. Even more, there are the many videos showing Dems like Barney Frank defending Fannie and Freddie against calls for oversights, as well as other Dem members of Congress defending Franklin Raines while he enriched himself running Fannie. (I've also got a vid of Andrew Cuomo introducing Dem legislation that hopes to inflict "affirmative action" into the mortgage industry and ackowledging defaults will rise as a result, but I'm having trouble linking to it. You've likely seen it anyway.) These few examples gets us back to the point of Dem intervention playing a part, if not a major role, with the current economic situation. I don't think you've done much to dispell that notion. Considering your massive reading on the subject of the subprime crisis, you haven't shown anything that supports your initial statements of Republican guilt in our economic situation. Don't get me wrong. I certainly don't consider the GOP as being without responsibilities. But you painted them as THE cause by implication of your initial statements. I think just now I've shown more to support Dem guilt than you have to show Rep guilt.
Until you can, I study on nonetheless.
MA,
Those examples don't do anything at all because those weren't the subprimes loans that investment banks were falling all over each other to securitize.
Ma, how you convince yourself that reading opinions in The American Thinker amounts to a well balanced and honest approach to any topic, let alone this one, is beyond me.
Vinny,
"Those examples don't do anything at all because those weren't the subprimes loans that investment banks were falling all over each other to securitize."
Of course they do. They go to my argument regarding Dem interference. You take solace that it wasn't total. And you haven't showed me how investment banks turned to dealing with crappy loans in the first place. I continue to insist that I have no issue with being schooled. Why won't you do so if you think you have the answers? If you have facts that shows the horrors of conservatism, capitalism or Republican policy making, I'm still waiting. So far, you've shown perhaps greed was present somewhere. Wow. Thanks for the newsflash. But you make sweeping statements and never tie anything together. I get that you believe the facts indict the rightwing or absolve the left. You just haven't shown how.
"Ma, how you convince yourself that reading opinions in The American Thinker amounts to a well balanced and honest approach to any topic, let alone this one, is beyond me."
It should be. I've never made that assertion. I can't help that your problem with clinical idiocy compels you to infer such fantasies. So why don't you take your meds and at some point, then try to find something in any AT article to which I might link and tell me why it's wrong. Tell me what isn't factual. If the author cites stats, figures and facts from some gov't source, what balance is lacking if he presents the whole story? And if he isn't presenting the whole story, then it's up to you to show where the story is lacking. Otherwise, you're just doing your usual posturing, dismissing the article because you're a rank lib with no real mind of your own.
MA,
Your argument lacks an essential element known as "causation." That you can find video clips in which Democrats come off as douchebags is insufficient to establish that any investment bank or any independent mortgage broker made any pick-a-payment liar loan as the result of anything that Barney Frank or any other Democratic politician said.
Causation??!! Vinny that's exactly the complaint I've had with YOUR arguments. You haven't made a case about the right wing's hand in ANY of the financial mess we're in. And that's exactly what I've been trying to get you to provide. But I'm waiting patiently.
MA,
I would love to talk about the role that conservative free market and anti-regulation ideology played in the financial crisis, but it is necessary get basic facts straight first. If I cannot disabuse you of the delusion that the housing bubble resulted from banks being forced to make bad loans by the Democrats, there really is no way to discuss any more complex ideas.
Take a chance, Vinny. Since the discussion began by your accusations against conservative policies, there was no need to go on about the subprime crisis. As I said, that was merely an example of Demcratic interference. Whether or not their interference was accompanied by other factors is not really the issue. My point in the post was merely that Dems interfere without positive impact. YOU decided to blame all our woes on the right. So get to it. We can get back to the subprime issue later.
MA,
Since I am not always sure what your point is, I have to stick with what you actually say. What you said was "[w]e know the subprime mortgage [crisis] was a result of Democratic intervention in the housing industry." Now you would like to pretend that your point “was merely that Dems interfere without positive impact.” This is a typical conservative tactic. When their misinformation is exposed, they pretend that they had really meant something other than what they actually said.
As far as American Thinker goes, I will show exactly why I consider Randall Hoven to be a lying sack of crap. In the last article you cited, Hoven makes the blatantly false claim that “The Bush tax cuts did not hurt revenue.” To prove this, he presents a graph showing revenue as a percentage of GDP going from 16.2% in 2004 to 18.5%. This is absolute bullshit. In order to see what effect the tax cuts had on revenue, we can’t just look at revenue after the cuts. We have to compare that revenue to the revenue before the tax cuts. When we do that we see that revenue as a percentage of GDP in 2000 was 20.6% and and it fell to 16.1% in 2004. No one with an ounce of intellectual integrity can claim that the Bush tax cuts didn’t hurt revenue, but Hoven did and you fell for it hook, line, and sinker.
"When their misinformation is exposed, they pretend that they had really meant something other than what they actually said.'
I'm going to again paste what I had said:
"The facts are that you haven't showed how conservatism can rightly be blamed for the ills you've listed. And if conservatism doesn't align with the facts, then it's neither logical or reasonable, is it? Yet, one must make that connection in order to make the claim you imply.
We know the subprime mortgage was a result of Democratic intervention in the housing industry, in a well intentioned attempt to allow more people to own homes. Conservatism does not make that play because it recognizes the reality that if one cannot afford to buy, one should not."
I want to point out once again how the first paragraph addresses your own comments regarding conservative blame. THAT is what I was commenting on and the second paragraph uses the subprime comment as an example of Dem interference. But it wasn't meant as a starting point for another discussion. I was still trying to get you to explain your initial comments that began on 9/28 @ 6:26PM, then the 1st paragraph of your follow-up comment of 9/10 @ 8:05PM, then your comment of 9/13 @ 10:46AM. I asked for clarifications @ 1:01PM and you gave me more accusations @ 5:24PM after which I sought evidence connecting your accusations to the results to which you claimed conservative actions lead. Finally, on (/24 @ 10:39AM, you made you little comment about your past conservatism, moved on to a state of the union comment, and again blamed conservatism for those things you consider negative results of conservative policy. THAT'S when I made the statement highlighted above and if you follow that chain of events, you'll notice that I've been consistent in trying to get you to support your position about conservative policies damaging America. But rather than do that, you chose to focus on an aside as if that is the whole point I was trying to make, and then accuse ME of tap dancing away from something I can't defend.
Well, Vinny. How typical of a lefty. First of all, I have stated that I'm not through with the subprime issue, but only that it is a tangent that YOU chose to make things easier for YOU because you believe you have the issue down pat. You haven't quite shown that, but I don't really care. I don't have a problem with being corrected about anything. You haven't done so yet.
But it seems quite obvious that YOU have a problem with making sweeping statements and then running away when challenged on those statements. Don't give me shit that I'M dodging, because I'm still here, I'm still checking out your links against other sources and I'm still freakin' waiting for you to answer my original challenges to your original statements.
MA,
I haven't quite shown that? I guess I should take it as high praise that you think I have even come close.
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