"Bail out" passes Congress... Welfare for the Banksters

[sammi jo]

This is yet another repeat of the fearmongering tactics pushed by this administration, hoodwinking Congress into a quickie vote, without really examining the issues, based on spreading panic reactions via lies and bullshit. WMDs in Iraq. Nukes in Iran. Al Qaeda agents on every corner. Environmentalists trying to wreck our way of life. More crap, more lies, more bogus threats. Yet again.

Rep. Brad Sherman had it down.. see his piece here on CSPAN (http://www.youtube.com/watch?v=gnbNm6hoBXc) Congress was pushed into a panic Pavlovian kneejerk reaction on the threats of the market "losing thousands of points unless the "bailout" was passed instantly, or even "martial law being imposed in the US if Congresspersons voted against.

There was never a real inquiry to find out what's been going down, to arrive at a rational solution which might stand a chance of success in stabilizing the market. What if this bailout doesn;t work? Where is the next $700 BILLION coming from? And the next after that?

Considering that even the FBI is investigating Fannie Mae, Freddie Mac, AIG and Lehman for fraud (http://www.nypost.com/seven/09242008/news/nationalnews/bailout_big_4_in_fraud_probe_130493.htm).... (yes I know that's the fox investigating the henhouse, but hey...).. what does this amount to:

$700 Billion welfare, paid for by you and me, to fleece a bunch of white collar (suspected) criminals, authorized by the weasels and cowards in both Houses, and instigated by the thugs and appeasers of the current administration.

There are no words....

[screener]

On a good note, American taxpayers will save the Canadian economy. Yay.

[BRussell]

On a good note, American taxpayers will save the Canadian economy. Yay. As long as you keep the distance between us and Sarah Palin, we'll be happy.

[iPoster]

700 Billion in corporate welfare to banks who got caught with their hands in the cookie jar, due to shady loan practices and creative accounting?

Nothing to see here, sheeple. Move along. Move along.

And according to the McCampaign, the Democrats are the ones who are going to spend the country into oblivion? *Facepalm*

[screener]

As long as you keep the distance between us and Sarah Palin, we'll be happy.
No problem, nothing for me south of the border or north of Sudbury, in a physical sense of course.

[Frank777]

It's worth remembering that both parties got played here.

Democrats can try to hide it, but they were conned into this by the fraudsters who took advantage of their willingness to create "affordable housing" for people who couldn't afford houses. Obama's campaign is particularly well connected to those involved in the mess, not that the press is going to make a big deal about that.

Republicans did their part as well, unwilling to stand up to this disaster in the making and refusing to outlaw things like 50-year mortgages (as we did in Canada.)

Congress may have authorized the laws that created this situation, but the Bush White House signed them, without a fuss.

And don't get me started on the Fed's actions in helping to plunder the American economy.

So yes, thanks to the incompetence of the entire American political class, Canadians will do much better now.
Please accept our sincerest thanks.

[iPoster]

Before anyone gets to uppity and partisan and all of that we all need to realize this is a solidly bipartisan plundering.

I know both parties were involved with the bill, I meant that the Republican campaign line has been hauling out the old 'tax and spend' Democrat line.

[e1618978]

Am I the only one who thinks that the bailout was a good idea? I was just talking to a guy today who runs a bicycle company - they can't get loans from banks all of a sudden due to the death of the commercial paper market, and they will go out of business soon unless it changes, even though they have a three year waiting list for their bikes.

And there are millions of other people working for similar businesses.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0JbUyhTA71Y&refer=home

[pfflam]

I think something needed doing . . . so I guess I agree with you

[sammi jo]

Much of the esoteric workings of stock enchanges and international finance is even over the heads of qualified accountants; unless they have studied this in depth, your average politician is clueless. Both houses voted on the bailout without having the knowledge or qualification on the subject to vote. Thus they were easy prey to being panicked. Brad Sherman (see above) has more of a handle on it than most, and he raised the alarm: A factor largely ignored by the news media is that the bailout is also aimed at rescuing foreign investors (http://www.safehaven.com/showarticle.cfm?id=11424&pv=1).

extracted:

Rep. Brad Sherman, D California:

Larry I am glad you have a few seconds to talk to someone who voted against this bill. I am not changing my mind. I want to thank my colleagues who stood up to the purveyors of panic and voted against a very bad bill and voted with 400 eminent economists including three Nobel laureates who wrote to us and said don't panic, don't act hastily, hold hearings, work carefully. The fact is Larry if you read this bill, even you would have voted against it.

It provides hundreds of billions of dollars of bailouts to foreign investors. It provides no real control of Paulson's power. There is a critique board but not really a board that can step in and change what he does. It's a $700 billion program run by a part-time temporary employee and there is no limit on million dollar a month salaries.

Larry Kudlow:

Let me just ask you one question. I think you are referring to foreign banks headquartered in the United States. I do not see how foreign investors get bailed out.

Rep. Brad Sherman:

Larry you have to read the bill. It's very clear. The Bank of Shanghai can transfer all of its toxic assets to the Bank of Shanghai of Los Angeles which can then sell them the next day to the Treasury. I had a provision to say if it wasn't owned by an American entity even a subsidiary, but at least an entity in the US, the Treasury can't buy it. It was rejected.

The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday.

Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can't be sold to the Treasury.

Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure that can happen.

Senator, please scrap the Paulson proposal in entirety and try something that might work, that is constitutional, and does not put taxpayer money at risk.

US citizens should not spending $700 Billion to bail out foreign investors. The actions of Treasury Secretary Paulson go far beyond disgusting, to outright betrayal of US citizens.

I ask that you take a clear stand against this un-American bill by not only voting against it, but to Filibuster the bill until it is given up for dead. I cannot and will not vote for any legislator who votes for this bill, or even allows it to be brought up for vote.

Even Barbara Lee voted for this, saying. "It's best that we put out the fire now, and punish the arsonists later"

In other words...she knows that crimes are involved, but still voted to give our money to domestic and international criminals.

An apt term for all this is "Financial Terrorism".

:mad:

[hardeeharhar]

Am I the only one who thinks that the bailout was a good idea? I was just talking to a guy today who runs a bicycle company - they can't get loans from banks all of a sudden due to the death of the commercial paper market, and they will go out of business soon unless it changes, even though they have a three year waiting list for their bikes.

And there are millions of other people working for similar businesses.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0JbUyhTA71Y&refer=home
I too thought something needed to be done to bring liquidity into the lender's market again.


sammi, the problem with that scenario is that the treasury is not required to buy all toxic assets...

[talksense101]

``The credit window is closed,'' Jim Press, president of Chrysler LLC, the third-largest U.S. automaker, said today at the Paris Motor Show. The financial rescue plan must be approved because ``it's important for us to restore credibility in our banking system.''

Credibility?! Har-de-har.

[iPoster]

I know we're not supposed to post pictures without content, but I found this week's Time cover to be quite appropriate from my view of the bailout:

http://i34.tinypic.com/34pj0qo.jpg

[midwinter]

Am I the only one who thinks that the bailout was a good idea? I was just talking to a guy today who runs a bicycle company - they can't get loans from banks all of a sudden due to the death of the commercial paper market, and they will go out of business soon unless it changes, even though they have a three year waiting list for their bikes.

And there are millions of other people working for similar businesses.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a0JbUyhTA71Y&refer=home

I agree that something needed (and still needs) to be done to get the banks lending money to one another again, but I don't like the idea that the banks all sat tight hoping that they'd get a better deal from the gummit.

[jimmac]

Well I do think George W Bush does deserve some of the blame.

Here's a little something that will seem like Deja Vu!

http://www.cnn.com/2008/US/10/05/shaky.banks.ap/index.html

U.S. bank failures almost certain to increase in next year

A little something about the first few paragraphs of this article.

We had a Bush in office a short time before then ( similar to now ). This was after many years of republican rule ( like now ).

And we ended up paying for their mistakes from a debacle due to deregulation ( like now ).

There are more parallels.

As I've said before I think there's a pattern here ( and maybe a lesson ).

[Frank777]

I agree that something needed (and still needs) to be done to get the banks lending money to one another again, but I don't like the idea that the banks all sat tight hoping that they'd get a better deal from the gummit.

Yep.

This 'bailout' sets a dangerous precedent, and I have a bad feeling that the 'regulations' that are inevitably going to be imposed on the sector will further see our banking system run by private and elitist groups.

This is a clear failure on the part of the Fed.
If anything, that is what should be bought out by the government, not mortgage companies.

[Frank777]

And we ended up paying for their mistakes from a debacle due to deregulation ( like now ).

I understand you're on the Democratic side, but claiming Bush deregulated the banking sector is simply not true.

Clinton did.

Link One - CNN (http://www.cnn.com/ALLPOLITICS/stories/1999/11/12/banking.reform/index.html)

Link Two (http://findarticles.com/p/articles/mi_m1282/is_n7_v45/ai_13699788)

Link Three (http://piggington.com/clinton_republicans_agree_to_deregulation_of_us_fi nancial_system)

[SDW2001]

I understand you're on the Democratic side, but claiming Bush deregulated the banking sector is simply not true.

Clinton did.

Link One - CNN (http://www.cnn.com/ALLPOLITICS/stories/1999/11/12/banking.reform/index.html)

Link Two (http://findarticles.com/p/articles/mi_m1282/is_n7_v45/ai_13699788)

Link Three (http://piggington.com/clinton_republicans_agree_to_deregulation_of_us_fi nancial_system)


Exactly...not to mention that "deregulation" is not the problem to begin with.

[jimmac]

Frank and SDW. Stop using Clinton as an excuse! He's been out of office for almost a decade now! That's pathetic!

These links are from 1999 and 1993!

It's the same old " we'll take credit if it's good but if it's bad we had nothing to do with it ".

This is Bush's watch. This is Bush's legacy. This is Bush's mess.

You simply can't argue with the bottom line. The end result.

And it's familure.

The only ones saying it wasn't the republicans is of course the republicans.

And if you want to really go back to past deregulation we could talk about Regan. You know. Back in the 80's!

[Powerdoc]

As long as you keep the distance between us and Sarah Palin, we'll be happy.

:lol:

Note that the failure of Wall Street, will lead probabily to the election of OBama. Without the credit crunch, Mac Cain was the favorite.

[SDW2001]

Frank and SDW. Stop using Clinton as an excuse! He's been out of office for almost a decade now! That's pathetic!

These links are from 1999 and 1993!

It's the same old " we'll take credit if it's good but if it's bad we had nothing to do with it ".

This is Bush's watch. This is Bush's legacy. This is Bush's mess.

You simply can't argue with the bottom line. The end result.

And it's familure.

The only ones saying it wasn't the republicans is of course the republicans.

And if you want to really go back to past deregulation we could talk about Regan. You know. Back in the 80's!

Could you please show where I posted the word "Clinton" in my previous post?


This is Bush's watch. This is Bush's legacy. This is Bush's mess.

That is very convenient of you. Unfortunately it doesn't explain what happened...not even a little bit. It's just a talking point, a gotcha game, etc. I'd be happy to discuss what really happened, but I doubt you're interested. Judging from precedent, I'd say you'll just respond with a one-liner or a CNN Money link.

[screener]

I understand you're on the Democratic side, but claiming Bush deregulated the banking sector is simply not true.

Clinton did.

Link One - CNN (http://www.cnn.com/ALLPOLITICS/stories/1999/11/12/banking.reform/index.html)

Link Two (http://findarticles.com/p/articles/mi_m1282/is_n7_v45/ai_13699788)

Link Three (http://piggington.com/clinton_republicans_agree_to_deregulation_of_us_fi nancial_system)
The National Review link is a joke, right?

The CNN article points out who the instigators are, is,
"The world changes, and Congress and the laws have to change with it," said Senate Banking Committee Chairman Phil Gramm (R-Texas), who has fought for years for the overhaul. Gramm said the bill would improve banking competition and stability.
How long were they pushing for this?
Proponents had pushed the legislation in Congress for two decades, and Wall Street and the banking and insurance industries had poured millions of dollars into lobbying for it in the past few years.
Pushing for it for decades, before Reagan.

From your last link,
A financial deregulation bill was passed in the early 1980s under the Reagan administration, lifting many restrictions on the activities of savings and loan associations, which had previously been limited primarily to the home-loan market. The result was an orgy of speculation, profiteering and outright plundering of assets, culminating in collapse and the biggest financial bailout in US history, costing the federal government more than $500 billion.
Yup, Clinton caused the Savings and Loans fiasco.

Ahead to 1999,
Times were good again but Clinton's political capital was gone, granted, his own fault.
Still, he fought against eliminating the CRA and mostly succeeded.
The banks and other financial institutions did not themselves oppose continuation of the CRA, which they have treated as nothing more than a cost of doing a highly profitable business in minority areas. Loans tied to the CRA average a 20 percent rate of return. Financial industry lobbyists complained that they were being caught in a crossfire between the Republicans and Democrats which was unrelated to the main purpose of the bill.
The Clinton White House threatened to veto the bill if CRA provisions were substantially weakened, in response to heavy pressure from the Congressional Black Caucus and the Reverend Jesse Jackson, whose Operation PUSH has made extensive use of CRA in its campaigns to pressure corporations and banks for more opportunities for black businessmen. But eventually the White House caved in to Gramm, accepting his amendments so long as the program remained formally in place.
But this wasn't enough for Gramm,
http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_froma_harrop/mccain_and_the_meltdown
McCain's former economic adviser is ex-Texas Sen. Phil Gramm. On Dec. 15, 2000, hours before Congress was to leave for Christmas recess, Gramm had a 262-page amendment slipped into the appropriations bill. It forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors.
And he still wasn't done,
http://www.politico.com/news/stories/0308/9246.html
A year after the Gramm-Leach-Bliley Act repealed the old regulations, Swiss Bank UBS gobbled up brokerage house Paine Weber. Two years later, Gramm settled in as a vice chairman of UBS’s new investment banking arm.

Later, he became a major player in its government affairs operation. According to federal lobbying disclosure records, Gramm lobbied Congress, the Federal Reserve and the Treasury Department about banking and mortgage issues in 2005 and 2006.

During those years, the mortgage industry pressed Congress to roll back strong state rules that sought to stem the rise of predatory tactics used by lenders and brokers to place homeowners in high-cost mortgages.
Yup, Clinton's fault.
Forget the instigators or rules that were changed, eliminated after he was out of office.
Forget the fact that the predatory lending practices happened under Bush's watch.
Forget the fact that Bush embraced these practices,
http://www.whitehouse.gov/news/releases/2002/06/20020618-1.html
And so, therefore, I've called -- yesterday, I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers. And I'm proud to report that Fannie Mae has heard the call and, as I understand, it's about $440 billion over a period of time. They've used their influence to create that much capital available for the type of home buyer we're talking about here. It's in their charter; it now needs to be implemented. Freddie Mac is interested in helping. I appreciate both of those agencies providing the underpinnings of good capital.
And part of the cornerstone of America is the ability for somebody, regardless of where they're from, regardless of where they were born, to say, this is my home; I own this home, it is my piece of property, it is my part of the American experience. It is essential that we stay focused on the goal, and work hard to achieve that goal. And when it's all said and done,

We can look back and say, because of my work, because of our collective work, America is a better place. Out of evil came incredible good.

[midwinter]

You know that Clinton is also responsible for us invading Iraq, right?

[screener]

You know that Clinton is also responsible for us invading Iraq, right?
And that North Korea has a nucloor device.

And that Afghanistan could, is being lost.

And how the financial crisis will be blamed on Obama when he takes office because Clinton is campaigning for him.

It's like the last 8 years never happened.

[midwinter]

And that North Korea has a nucloor device.

And that Afghanistan could, is being lost.

And how the financial crisis will be blamed on Obama when he takes office because Clinton is campaigning for him.

It's like the last 8 years never happened.

What do you mean? The Democrats have always been in control of everything. Forever.

[screener]

What do you mean? The Democrats have always been in control of everything. Forever.
I would imagine this "crisis" ensures Bush's place in history can never be raised above the worst President in history.

[hardeeharhar]

On come on Harding (Bush's intellectual antecedent) was worse.

[Frank777]

I have said previously in this thread that both parties were at fault. Some people are however, blinded by partisanship, and can only see the faults of the other side.

The lack of honesty is almost comedic at some points. It is acceptable to reference the Republican S&L bailout under Reagan, of course. But mention that Clinton's 'reforms' had a more direct hand in the current situation, and all of a sudden, this is George W's mandate, and that's all we can discuss.

This situation wasn't made in a day. Change was incremental, and every weakening of the oversight of the banking sector drew us closer to this debacle. It takes time for an industry-wide banking collapse to happen, and that time did start during the Clinton mandate and ends up in the current Bush years.

[midwinter]

On come on Harding (Bush's intellectual antecedent) was worse.

Buchanan was worst of all.

[midwinter]

I have said previously in this thread that both parties were at fault. Some people are however, blinded by partisanship, and can only see the faults of the other side.

The lack of honesty is almost comedic at some points. It is acceptable to reference the Republican S&L bailout under Reagan, of course. But mention that Clinton's 'reforms' had a more direct hand in the current situation, and all of a sudden, this is George W's mandate, and that's all we can discuss.

This situation wasn't made in a day. Change was incremental, and every weakening of the oversight of the banking sector drew us closer to this debacle. It takes time for an industry-wide banking collapse to happen, and that time did start during the Clinton mandate and ends up in the current Bush years.

While there may be blame on both sides, it was mostly Clinton's fault.

[screener]

The lack of honesty is almost comedic at some points. It is acceptable to reference the Republican S&L bailout under Reagan, of course. But mention that Clinton's 'reforms' had a more direct hand in the current situation, and all of a sudden, this is George W's mandate, and that's all we can discuss.

This situation wasn't made in a day. Change was incremental, and every weakening of the oversight of the banking sector drew us closer to this debacle. It takes time for an industry-wide banking collapse to happen, and that time did start during the Clinton mandate and ends up in the current Bush years.
Your comment about a lack of honesty is amusing.
Claiming the fault is Clinton's reforms when Republicans were on the vanguard of deregulation in just about every sector is laughable.

Your second paragraph says the weakening of the oversight in increments caused this crisis.

Bastardizing what Clinton signed, incrementally, happened under Bush's watch.

[midwinter]

Your comment about a lack of honesty is amusing.
Claiming the fault is Clinton's reforms when Republicans were on the vanguard of deregulation in just about every sector is laughable.

Your second paragraph says the weakening of the oversight in increments caused this crisis.

Bastardizing what Clinton signed, incrementally, happened under Bush's watch.


But still, it was mostly Clinton's fault. And liberalism.

[SDW2001]

I have said previously in this thread that both parties were at fault. Some people are however, blinded by partisanship, and can only see the faults of the other side.

The lack of honesty is almost comedic at some points. It is acceptable to reference the Republican S&L bailout under Reagan, of course. But mention that Clinton's 'reforms' had a more direct hand in the current situation, and all of a sudden, this is George W's mandate, and that's all we can discuss.

This situation wasn't made in a day. Change was incremental, and every weakening of the oversight of the banking sector drew us closer to this debacle. It takes time for an industry-wide banking collapse to happen, and that time did start during the Clinton mandate and ends up in the current Bush years.

This is absolutely correct. It's not about one person. It's also inaccurate to say "this is Clinton's fault." But the roots of the problem did start with the federal government pushing for more "affordable" housing via the Community Reinvestment Act and other "reforms." Of course, the Republican Congress let this happen, so they are not without blame, either.

Your comment about a lack of honesty is amusing.
Claiming the fault is Clinton's reforms when Republicans were on the vanguard of deregulation in just about every sector is laughable.

Please read this carefully: Deregulation is not the problem. The free market is not the problem.


Your second paragraph says the weakening of the oversight in increments caused this crisis.

Bastardizing what Clinton signed, incrementally, happened under Bush's watch.
Really...please demonstrate how that was the case.

But still, it was mostly Clinton's fault. And liberalism.

I know you're being facetious, but it's not Clinton nor liberalism. That said, there were Clinton initiatives at work here. There was a also a GOP controlled congress that let it happen. Best of all, we now have the same people that helped cause the meltdown (or at least did nothing to prevent it) "fixing" the problem with a bailout. Since the Dems are now in control, they get to blame the Bush Administration for "deregulation." Ahhh...election years. Gotta love 'em.

[hardeeharhar]

Buchanan was worst of all.
For what? The civil war?

Fuck that:

Harding had the Teapot Dome scandal and the bastard died before he could have articles of impeachment drafted against him... His and Grant's administrations were in a toss-up for the most corrupt until Cheney and Bush came along. He coddled the Germans and Austrians. He set into motion the most devastating economic policy until now. He death was the direct result of him having failed to choose a doctor worth his salt as surgeon general. Let's see here, if you decisions as president directly result in your death, you might be a red-neck.

Jesus all Buchanan did was fail to stop the nation from going to war for a pithy five years. Comparing the two is like comparing a pot smoking slacker to a guy who pushes MDMA on school children while eating the aborted fetuses of untouchables...

[sammi jo]

The real beneficiaries here are the speculators. After todays crash n' burn, wait for the vultures to clean up. They always do it. They always get away with it. Because they can.

[Frank777]

While there may be blame on both sides, it was mostly Clinton's fault.

I have not said that, and certainly do not believe that.

[midwinter]

But the roots of the problem did start with the federal government pushing for more "affordable" housing via the Community Reinvestment Act and other "reforms."

No it didn't (http://www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_c risis). Now hurry and complain that I linked to an opinion piece from a liberal magazine.

[hardeeharhar]

I really hate Warren G. Harding.

[midwinter]

Jesus all Buchanan did was fail to stop the nation from going to war for a pithy five years.

Hehehe. Yeah. The Civil War is totally overrated.

[hardeeharhar]

Will you elaborate on this opinion?
Great Depression.

[screener]

Please read this carefully: Deregulation is not the problem. The free market is not the problem.

Really...please demonstrate how that was the case.



I know you're being facetious, but it's not Clinton nor liberalism. That said, there were Clinton initiatives at work here. There was a also a GOP controlled congress that let it happen. Best of all, we now have the same people that helped cause the meltdown (or at least did nothing to prevent it) "fixing" the problem with a bailout. Since the Dems are now in control, they get to blame the Bush Administration for "deregulation." Ahhh...election years. Gotta love 'em.
Twice now you said deregulation isn't the problem.
Here's your chance, what is, was the problem.

Clinton initiatives that Gramm wanted abolished and Clinton fought to keep.
You're saying CRA was part of the problem whereas the banks and financial institutions deny it.

For the demonstration, ignoring or outsourcing oversight that may have averted the crisis, and Gramm's machinations linked to earlier,
http://www.nytimes.com/2008/10/03/business/03sec.html?scp=51&sq=&st=nyt
But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio — a measurement of how much the firm was borrowing compared to its total assets — rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.
I read somewhere but can't remeber where that some lenders had up to 100/1 ratio. Crazy.
The commission’s decision effectively to outsource its oversight to the firms themselves fit squarely in the broader Washington culture of the last eight years under President Bush.
“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”
In essence, regulation without teeth.
Cox's excuse in hindsight,
“Implementing a purely voluntary program was very difficult because the commission’s regulations shouldn’t be suggestions,” he said. “The fact these companies could withdraw from voluntary supervision at their discretion diminished the mandate of the program and weakened its effectiveness. Experience has shown that the S.E.C. could not bootstrap itself into authority it didn’t have.”

[hardeeharhar]

Harding's economic policies did not cause the Great Depression.
Like hell they didn't.

The tariff alone was enough to weaken in the long term American corporations. Remember, sslarson, tariffs are bad in a free market...:rolleyes:

[hardeeharhar]

Indeed tariffs are bad for a free market. In fact they are the opposite of free market. And certainly the Fordney-McCumber Tariff had the (predictably) negative effects of any tariff, it was certainly not the cause (or even a major contributor to the Great Depression). Credit for that goes to another tariff (Smoot-Hawley) and other government interventions (across both the Hoover and Roosevelt administrations) that not only precipitated the depression but made it "great" (i.e., longer, deeper and harder). The Great Depression was caused by and made worse by the government dorking around with the economy.

Interestingly, one analysis had this to say:



Sounds eerily like what's happening today.

Those who don't know history...

If my theory that Bush is Hoover and Obama is FDR is correct then we're in for a lot more pain.
Yawn. More Austrian School BS....

[hardeeharhar]

:lol: :rolleyes:

I've seen your dismissal of the Austrian school, but not a logical, fact-based, evidentiary refutation of it. Oh well.

What's stunning is that, just as in regards to the Great Depression, our current times finds people looking the wrong direction and blaming the wrong things.
You cannot refute intelligent design with evidence either.

They are both tautologies.

[hardeeharhar]

Austrian economic theory is not a tautology.
It absolutely is.

[hardeeharhar]

Well that settles that then. I guess we'll all take your word for it. :rolleyes:

:err:
You don't have to. All you need to realize that all the Austrians claim is that if things go wrong its because there wasn't enough freedom in the free market. If things go well, there was just the right amount of freedom. It isn't a predictive theory -- it is an interpretive theory, and one that depends on this tautology -- everything good is because of freedom in the free market, and everything bad isn't.

[hardeeharhar]

Unfortunately I don't have the time (nor inclination) to educate you on the breadth, depth and nuance of this theory (beyond simplistic characterizations). I hope you'll take some time to learn more about it because, despite what you've claimed, it is predictive and has much to say about past, present and future economic developments. In fact Mises did predict much of the economic catastrophe of the early part of last century. Ron Paul, who understands and applies this same school of economic thought also predicted much of the economic difficulty we're seeing now.
Yeah, so did Obama and McCain.

It doesn't take an Austrian Economists (who are the fringe of the fringe) to realize that the economy is going to hit the shit can.

[hardeeharhar]

Why do you insist on resorting to ad hominem as an argument?
I am not attack you, sslarson. I am pointing out a fact that the school of thought in question isn't considered relevant to questions of the economy by any academic or private economist.

Libertarian economists have problems with the Austrian school too, you know...

[midwinter]

Are you seriously debating whether the Austrian school is outside the mainstream? That's a demonstrable fact, isn't it?

[hardeeharhar]

I never said you were. Your ad hominem was directed at the Austrians (i.e., you were attacking teh people/group rather than their argument). Calling someone the "fringe of the fringe" isn't exactly making an argument against their claims, reasoning, facts or evidence. It's merely an attempt to dismiss and discredit their argument because they are the "fringe of the fringe".




So it's really an appeal to popularity then. Sorry.




So?


This is nothing but fallacy.

Just because a group is thought (by you) to be "the fringe of the fringe" or their ideas and questions aren't thought (by you) to be "relevant to questions of the economy by any academic or private economist" or because (you think) "Libertarian economists have problems with" them, these have no bearing whatsoever on the truthfulness or falseness of the theory.
I was simply pointing out that as non-experts we might not be able to see the entire picture clearly. The fact that the Austrians who attend a theory which is considered heterdox and IS on the fringe of the fringe of respected economic theories, suggests that there is something deeply unsettling to studiers of economic theories about it.

It could be due to any number of factors, Friedman rejected the theory multiple times over the course of his life even though he wanted it to be true.

[hardeeharhar]

Not if we choose to apply our minds to the facts, evidence, logic and reason of the arguments.




No it doesn't.




There you go again.


Now, back to our regularly scheduled programming...

The Great Depression was not caused by laissez faire free-market capitalism, and neither was our current financial crisis. The former was not caused by government interventions into the economy, but also made worse. The first is true of our current situation and, I fear, the second will be as well.
Economics cannot be explained with verbal logic.

[jimmac]

Could you please show where I posted the word "Clinton" in my previous post?



That is very convenient of you. Unfortunately it doesn't explain what happened...not even a little bit. It's just a talking point, a gotcha game, etc. I'd be happy to discuss what really happened, but I doubt you're interested. Judging from precedent, I'd say you'll just respond with a one-liner or a CNN Money link.

Frank used Clinton and you agreed with him. This was addressed to both of you.

As you may or may not recall we have talked before about how recession seems to follow the republicans. We've also talked about the S & L debacle of the 80's and how it kind of mirrors present times.

The republicans don't take responsibilty for this ( what a surprise ). What was Bush doing all this time? Sitting on his hands?

This was his mismanagement. I remember talking to you about this before ( during the last Bush recession ). And gosh here we are again only worse!

[e1618978]

The republicans don't take responsibilty for this ( what a surprise ). What was Bush doing all this time? Sitting on his hands?

Bush called for major reforms in Fanny Mae and Freddie Mac starting in 2001:

http://www.whitehouse.gov/news/releases/2008/09/20080919-15.html

And McCain joined him in 2005:

http://www.webloggin.com/just-when-the-going-was-good-mccain-calls-for-a-911-like-commission-to-investigate-wall-street-failures/

The GSO trouble was a problem caused by the Democrats, the high leverage in i-banks was caused by the SEC (appointed by Republicans).

[jimmac]

Bush called for major reforms in Fanny Mae and Freddie Mac starting in 2001:

http://www.whitehouse.gov/news/releases/2008/09/20080919-15.html

And McCain joined him in 2005:

http://www.webloggin.com/just-when-the-going-was-good-mccain-calls-for-a-911-like-commission-to-investigate-wall-street-failures/

The GSO trouble was a problem caused by the Democrats, the high leverage in i-banks was caused by the SEC (appointed by Republicans).

Well as the neocons sink slowly in the west people just aren't buying that this is a democratic problem. That's why Obama's numbers are up.

This house of cards is folding just like I said it would only I wasn't expecting it to get this bad. What you're saying might have something solid behind it if it wasn't for the fact that this was a republican/republican government for 6 out of the last 8 years. Both of your dates are within that time frame. What happened?

As my friend said on Sunday as we were discussing this : " It's probably a good thing in a way this is happening to finally get through people's heads that we've been dealing with a bunch of losers ".

[screener]

Bush called for major reforms in Fanny Mae and Freddie Mac starting in 2001:

http://www.whitehouse.gov/news/releases/2008/09/20080919-15.html

And McCain joined him in 2005:

http://www.webloggin.com/just-when-the-going-was-good-mccain-calls-for-a-911-like-commission-to-investigate-wall-street-failures/

The GSO trouble was a problem caused by the Democrats, the high leverage in i-banks was caused by the SEC (appointed by Republicans).
For Immediate Release
Office of the Press Secretary
September 19, 2008
You didn't really expect anything else from the Press Secretary's Office did you?
And for all the effort Bush gave, with a Republican Congress, here we are.

Read the whole thread.

[e1618978]

You didn't really expect anything else from the Press Secretary's Office did you?
And for all the effort Bush gave, with a Republican Congress, here we are.

Read the whole thread.

If I am so wrong, then why is Waxman doing his level best to avoid any investigation of what happened at the GSOs? He is doing it to shield all the problems caused by the Democrats. We will hear a lot about Lehmann, a lot about the SEC, but nothing about Fanny Mae as long as the Democrats control the house and senate.

Republicans tried to bring it up today, and Waxman refused to hear their motion.

[hardeeharhar]

If I am so wrong, then why is Waxman doing his level best to avoid any investigation of what happened at the GSOs? He is doing it to shield all the problems caused by the Democrats. We will hear a lot about Lehmann, a lot about the SEC, but nothing about Fanny Mae as long as the Democrats control the house and senate.

Republicans tried to bring it up today, and Waxman refused to hear their motion.
You are wrong because you are reading into the actions of one congressman too much.

[screener]

If I am so wrong, then why is Waxman doing his level best to avoid any investigation of what happened at the GSOs? He is doing it to shield all the problems caused by the Democrats. We will hear a lot about Lehmann, a lot about the SEC, but nothing about Fanny Mae as long as the Democrats control the house and senate.

Republicans tried to bring it up today, and Waxman refused to hear their motion.
Did you read any of my posts, with links and quotes on page one of this thread.

[e1618978]

Did you read any of my posts, with links and quotes on page one of this thread.

You linked to an article saying that the Graham act was the cause of all our problems (no evidence provided in the article). I just don't see it - it looks like all the act does is allow mergers, and mergers did not cause our current problems:

http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_froma_harrop/mccain_and_the_meltdown

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

And Waxman matters because he is the head of the Government Oversight committee, and he is using that committee to examine only Republican caused problems (and not a word about Fanny Mae).

[hardeeharhar]

You linked to an article saying that the Graham act was the cause of all our problems (no evidence provided in the article). I just don't see it - it looks like all the act does is allow mergers, and mergers did not cause our current problems:

http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_froma_harrop/mccain_and_the_meltdown

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

And Waxman matters because he is the head of the Government Oversight committee, and he is using that committee to examine only Republican caused problems (and not a word about Fanny Mae).

Wait. Fannie Mae and Freddie Mac are not controlled by the Government so why would their actions be questioned by the Government Oversight committee whose purview does cover the SEC?

[screener]

You linked to an article saying that the Graham act was the cause of all our problems (no evidence provided in the article). I just don't see it - it looks like all the act does is allow mergers, and mergers did not cause our current problems:

http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_froma_harrop/mccain_and_the_meltdown

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

And Waxman matters because he is the head of the Government Oversight committee, and he is using that committee to examine only Republican caused problems (and not a word about Fanny Mae).
The right is trying to pawn off the crisis on Clinton.
This started here in the Karl Marx thread.
The Gramm-Leach-Bliley Act is what Clinton signed but was added to by Gramm shown by the quote I supplied from the Rasmussen link.
In case you missed it, here it is again,
On Dec. 15, 2000, hours before Congress was to leave for Christmas recess, Gramm had a 262-page amendment slipped into the appropriations bill. It forbade federal agencies to regulate the financial derivatives that greased the skids for passing along risky mortgage-backed securities to investors.
In case that has no meaning to you,
http://www.usnews.com/articles/opinion/2008/09/24/from-enron-to-the-financial-crisis-with-alan-greenspan-in-between.html
In 2002, the world's smartest investor (and my pick for president this year), Omaha billionaire Warren Buffett, issued his annual letter to the shareholders of Berkshire Hathaway. In it, he called derivatives "financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."
You might want to read post 44 on this page which adds more insight

[e1618978]

You might want to read post 44 on this page which adds more insight

I don't disagree that the SEC caused problems by allowing the i-banks to go to 40-1, but that has nothing to do with the GSOs. I think that most people in this thread, including you, are too partisan to think clearly on this issue. If you think that every problem we have in our economy was caused by Republicans, then you are not being impartial.

My point is that both parties caused our issues, and only the Republicans are currently on the hot seat - and people like Waxman are keeping that going by refusing to talk about the causes of the problems in the GSOs.

How exactly did the Graham act forbid government oversight of derivitives, and how did that affect FNM? Nothing like that is mentioned in the wikipedia article, and your article has no references. You keep mixing in unrelated items (like i-bank leverage), to avoid getting to the point.

[hardeeharhar]

Why technically not "controlled" by the government, Fannie and Freddie were setup as GSE (Government Sponsored Enterprises).

This designation clearly blurs the lines between public (i.e., government) and private organizations. Fannie and Freddie were the beneficiaries of a very "cozy" relationship with the federal government include freedom from certain government regulations and taxes that burdened the fully private competitors:




Furthermore, and most importantly, there has always been an implicit promise that the federal government would bail them out if they ever got into trouble (Hint: This is another example of how this was not laissez faire free-market).

Stop right there. There was no implicit promise. There was an assumed promise. This is an important distinction because if these agencies had the actual backing of the federal government they wouldn't have had the option of being left alone...

So Fannie and Freddie are the "bottom of the pyramid" (or house of cards as I prefer) for this mortgage crisis. The federal government, by the way it treated Fannie and Freddie, set this train in motion, specifically in the area of loosening credit into the sub-prime market where fully private entities would have been less likely to venture (unless they thought someone might bail them out if they got into trouble). Since they were a major portion of the secondary market for mortgages (they owned or guaranteed about half of the U.S.'s $12 trillion mortgage market) their policies (looser credit) would significantly affect the entire market for mortgages.

Pure speculation on your part. Fannie and Freddie are fiscally ok compared to the private mortgage lenders... Makes your speculation a bit specious...

[screener]

I don't disagree that the SEC caused problems by allowing the i-banks to go to 40-1, but that has nothing to do with the GSOs. I think that most people in this thread, including you, are too partisan to think clearly on this issue. If you think that every problem we have in our economy was caused by Republicans, then you are not being impartial.

My point is that both parties caused our issues, and only the Republicans are currently on the hot seat - and people like Waxman are keeping that going by refusing to talk about the causes of the problems in the GSOs.

How exactly did the Graham act forbid government oversight of derivitives, and how did that affect FNM? Nothing like that is mentioned in the wikipedia article, and your article has no references. You keep mixing in unrelated items (like i-bank leverage), to avoid getting to the point.
The Graham Act on it's own may not have caused this crisis, but what the article referenced was this,
http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000
The Commodity Futures Modernization Act of 2000 has received criticism for the so-called "Enron loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by lobbyists for Enron working with senator Phil Gramm[3] seeking a deregulated atmosphere for their new experiment, "Enron On-line"[citation needed].
Several Democratic legislators introduced legislation to close the loophole from 2000-2006[4][5], but were unsuccessful.
In September 2007, Senator Carl Levin (D-MI) introduced Senate Bill S.2058 to specifically close the "Enron Loophole" [6] This bill was later attached to H.R. 6124, the Food, Conservation, and Energy Act of 2008, aka "The 2008 Farm Bill". President Bush vetoed the bill, but was overridden by both the House and Senate, and on June 18th, 2008 the bill was enacted into law.

The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like mortgage backed securities, necessitated the government bailout of insurer A.I.G.
And Bush vetoed trying to fix the problem.
And last spring Bush had no idea gas would climb towards $4.

As for Fannie and Freddie, here is a good article describing the competition it faced because of the sub-prime competition, backed by unregulated derivatives.
http://www.nytimes.com/2008/10/05/business/05fannie.html?_r=1&scp=13&sq=&st=nyt&oref=slogin
But at that meeting, Mr. Mozilo, a butcher’s son who had almost single-handedly built Countrywide into a financial powerhouse, threatened to upend their partnership unless Fannie started buying Countrywide’s riskier loans.

Mr. Mozilo, who did not return telephone calls seeking comment, told Mr. Mudd that Countrywide had other options. For example, Wall Street had recently jumped into the market for risky mortgages. Firms like Bear Stearns, Lehman Brothers and Goldman Sachs had started bundling home loans and selling them to investors — bypassing Fannie and dealing with Countrywide directly.

“You’re becoming irrelevant,” Mr. Mozilo told Mr. Mudd, according to two people with knowledge of the meeting who requested anonymity because the talks were confidential. In the previous year, Fannie had already lost 56 percent of its loan-reselling business to Wall Street and other competitors.

[e1618978]

The Graham Act on it's own may not have caused this crisis, but what the article referenced was this,
http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000

And Bush vetoed trying to fix the problem.
And last spring Bush had no idea gas would climb towards $4.

As for Fannie and Freddie, here is a good article describing the competition it faced because of the sub-prime competition, backed by unregulated derivatives.
http://www.nytimes.com/2008/10/05/business/05fannie.html?_r=1&scp=13&sq=&st=nyt&oref=slogin

You are redirecting again - nothing I was talking about has anything to do with energy trades. Your "enron loophole" is bullshit that is irrelevant to the topic at hand.

And from your article - "Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers.". Guess which party that was?

"shareholders and Congress all thought the companies should be taking more risks, not fewer" -- Guess which party in Congress? The one with Barny Frank in it.

"Had Fannie been a private entity, its comeuppance might have happened a year ago."

again from your article:

"Lawmakers, particularly Democrats, leaned on Fannie and Freddie to buy and hold those troubled debts"

The article makes an interesting point, though - Fanny Mae took more risks, because the i-banks were taking their business, and both sides dragged each other down into the dirt by making riskier and riskier bets.

[screener]

You are redirecting again - nothing I was talking about has anything to do with energy trades. Your "enron loophole" is bullshit that is irrelevant to the topic at hand.

And from your article - "Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers.". Guess which party that was?

"shareholders and Congress all thought the companies should be taking more risks, not fewer" -- Guess which party in Congress? The one with Bernie Mac in it.

The article makes an interesting point, though - Fanny Mae took more risks, because the i-banks were taking their business, and both sides dragged each other down into the dirt by making riskier and riskier bets.
So what is the topic at hand, your assertion that Waxman is covering for the Democrats?
Bullshit.
Now it was only democrats demanding loans to low income borrowers?
I guess you missed Bush's speech I linked to huh?

I appreciate you bringing in a dead guy to the conversation, but what the hell does Bernie Mac have to do with anything?

Of course your partisan reading missed this in the quote,
The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like mortgage backed securities, necessitated the government bailout of insurer A.I.G.
I suppose you don't know what a credit default swap is,
http://en.wikipedia.org/wiki/Derivative_(finance)#Types_of_derivatives
So yeah, it is relevant and Gramm was the culprit and Bush tried to veto the closing of the "Enron Loophole"

The shit hit the fan under Bush's watch with both houses in Republican hands and he denied it until it was to late.

Another article for you to skim,
http://www.time.com/time/business/article/0,8599,1723152,00.html

[e1618978]

So what is the topic at hand, your assertion that Waxman is covering for the Democrats?[/url]

energy trades != mortgages. Bringing in energy trades is just an attempt to "baffle them with bullshit"

And I meant Barny Frank, got the names mixed up.

Earlier you were saying that the Gramm act stops regulation of derivatives, which is obviously false (I bought a derivative yesterday - an Apple call option, regulated by the SEC). Now you are getting more specific since I am poking you a bit. I agree that credit default swaps are dangerous, and need to be regulated the same way as any other insurance (by forcing the insurer to keep reserves to pay the defaults).

And I don't think it is fair to call me partisan - I blame both sides, you blame only one. Republicans erred on the side of deregulation, and Democrats erred on the side of giving too many mortgages to poor people without setting aside the corresponding default insurance. Credit default swaps didn't kill Freddie Mac and Fanny Mae.

I agree with a lot of the stuff you think, btw - I just think that you give the Democrats a pass, and change the subject to something the Republicans did wrong whenever I try to talk about the Democrats.

[screener]

energy trades != mortgages. Bringing in energy trades is just an attempt to "baffle them with bullshit"

And I meant Barny Frank, got the names mixed up.

Earlier you were saying that the Gramm act stops regulation of derivatives, which is obviously false (I bought a derivative yesterday - an Apple call option, regulated by the SEC). Now you are getting more specific since I am poking you a bit. I agree that credit default swaps are dangerous, and need to be regulated the same way as any other insurance (by forcing the insurer to keep reserves to pay the defaults).

And I don't think it is fair to call me partisan - I blame both sides, you blame only one. Republicans erred on the side of deregulation, and Democrats erred on the side of giving too many mortgages to poor people without setting aside the corresponding default insurance. Credit default swaps didn't kill Freddie Mac and Fanny Mae.

I agree with a lot of the stuff you think, btw - I just think that you give the Democrats a pass, and change the subject to something the Republicans did wrong whenever I try to talk about the Democrats.
Glad to see you agree with most of my points.

The Gramm act was, is being used by the right to try and show the crisis had it's beginnings with Clinton which I argued against.

I don't remember stating the Gramm Leach Bliley Act deregulated derivatives, if so I retract it.

Gramm's Enron Loophole was added to an Omnibus Spending bill as the Commodity Futures Modernization Act of 2000 and was never debated in the house but slipped into the spending bill before the holiday break.
It's all in the links I provided and shows how the unregulated derivatives, default swaps where later used in the mortgage sub prime industry.

Could it be that your call option is now regulated because a democrat got a bill passed in June of this year, to close the Loophole, which was attached to another bill that Bush tried to veto?
This information was also linked and quoted in post #77.

The partisan comment was in response to your assertion that only democrats pushed Fannie and Freddie and your belief that I and some here lay it all on the republicans.
Like the Iraq war, democrats were culpable in this mess and I have no argument against that premise but the buck has to stop somewhere.

Like I said earlier, this all happened under Bush's watch who, by the way also pushed to give poor people a slice of the pie which I provided a link to and quoted from.

[Frank777]

Has anyone seen the SNL skit featuring Bush, Pelosi and...George Soros?

Apparently, it has suddenly disappeared from NBC.com and Hulu. Does anyone have a copy?