Monday, January 12, 2009

Morgan Orlins and our Economy........He makes it all so clear

The Genesis of the Economic BIG LIE.............By Morgan Orlins (such good reading..thanks, Morgan)

Today we're in the midst of an economic slow-down and, unless we know what caused it, we're BOUND to repeat it. In my travels around the blogosphere I've noticed that the political left is extremely active with their dishonest--and totally self-serving--talking points about the causes of this economic downturn. In a nutshell, this is what they're saying:

The Bush Administration's 8 years of un-regulated capitalism and lack of regulations on the greedy Wall Street types and bankers led to this disaster.

Like any good stopped clock, the left did in fact hit on something, albeit accidentally in this case. The Government Sponsored Enterprises (GSE's) of FannyMae and FreddieMac desperately needed some strict oversight, but they operated free and clear of scrutiny thanks to 100% support among Congressional Democrats who used the GSE's as a campaign piggy bank, along with the help of a few weak-kneed Republicans. (Z: I had to add this video because it is SO incriminating... Take a look. It's ALL THERE)

This 4 minute video clip is a good primer for what has transpired. It's considered SO controversial by some that it had to be routed through Canada: (Z: Oh, is THIS a good one, too)

While the causes of our economic woes are many and varied, overt Government interference in the free market is the BIGGEST piece of this sordid puzzle which starts with Jimmy Carter's Community Reinvestment Act (CRA). The Clinton Administration doubled-down on the CRA by strengthening and expanding this awful practice. Here's some reading about former H.U.D. Secretary Andrew Cuomo's role:

The CRA was a piece of legislation which forced mortgage lenders to make a certain percentage of sub-prime loans to "blighted", "underdeveloped", or "minority interest" areas as the price of doing business in a municipality, county, or state. This forced widespread lending to people whose credit was so bad that they otherwise would not qualify for a normal loan, but the lenders had to play ball if they wanted to write the profitable loans which were plentiful during the building boom.

These risky loans are regarded as "toxic assets" in the best of times, and RUINOUS assets when times are tough, so lending institutions felt the need to get rid them. They accomplished this in a number of ways; first by unloading them on a newly receptive GSE like FannyMae or even FreddyMac. The government (aka "the abused taxpayers") eagerly bought up hundreds of billions of dollars of these subprime assets to pad their portfolios. This is how men like Franklin Raines earned tens of millions of dollars in taxpayer-paid bonuses, by showing these risky loans as "assets" on Fanny or Freddy's books. Lenders also unloaded these toxic loans by re-packaging them and securitizing them. This allowed them to be sold into the market in a practice akin to putting pretty wrapping paper on a rotten egg.

None of this Democrat government interference was enough, by itself, to seriously damage the economy.

Enter the force of nature known as supply and demand. As the supply of new and used homes outstripped demand for those homes, home values naturally started to fall. This drop in homes values has resulted in upwards of a TRILLION dollars in net loss!--(from the Village Voice article) Steven Holmes, a reporter from the Times's Washington bureau, wrote at the time: "In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But," he added, "the government-subsidized corporation (GSE's) may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s."

"Trouble"? Think of it as an economic time bomb that went of inside the American financial system and is now having worldwide ramifications! This is just a thumbnail sketch of what happened, but there is a VITAL lesson to learn if we are to avoid this type of trouble in the future, and it's about the role of the government and it's interference in the free market.

By forcing lending institutions to make questionable loans to dead-beat borrowers, the government induced an economic calamity. Why did Presidents Carter and Clinton (along with an abundance of Congressional help) champion this clearly ruinous policy? Quite simply, they were able to use the money of the free market to buy the votes of a large constituency of sub-prime borrowers. Then they were able to use taxpayer money to buy all of this bad paper through the GSE's, Fanny and Freddy. So they bought votes with private money, and solidified power with taxpayer money. (Z: Bush warned about this five years ago, McCain was also trying to alert Congress to what could happen, as you all know).

The government was buying votes and exerting power in ways that were never intended by the Founding Fathers. The proper role of government in the free market economy is to enforce laws against force and fraud. Regulations on the market should reflect that simple philosophy and be few and strictly enforced.

George Washington famously said;

"Government is not reason, it is not eloquence, it is force; like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action."

We are at a crossroads in American history. We have the opportunity to learn from our mistakes and protect our God-given freedoms and our way of life by reining in an out-of-control federal bureaucracy led by those whose sole motivation is power over the American people OR we can continue on our path to the all-powerful nanny state envisioned by fascists and the rest of the political left.

In 1775 Patrick Henry wrote:

"Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!"

I'm with him!

Morgan Orlins


Anonymous said...

My only regret after writing this opinion is that I didn't do a good enough job naming names. People like Chris Dodd, B. Hussein Obama, Barney Frank, and Maxine Waters to name a few were dipping into the GSE piggy bank routinely for campaign cash. Franklin Raines is a CLOSE personal advisor to PEBO.

So first they write legislation affecting Fanny and Freddie, then they use it at will. I forgot, aren't we supposed to get a card and some flowers first?


Anonymous said...

Z, thank you SO much for adding that video! It's an absolutely perfect addition.


Chuck said...

Great read. Unfortunately the sheeple will still believe that it is all Bush's fault.

Gayle said...

I haven't watched the videos yet, Morgan, as I have much to do this morning, but I've copied and saved the links. This is an awesome post!

No matter what happens, if it's bad the left will blame President Bush and if it's good they'll take credit for it. They have no concept of truth in reporting or of truth in anything else!

Ducky's here said...

The CRA was a piece of legislation which forced mortgage lenders to make a certain percentage of sub-prime loans


That's an absolute lie. The CRA applied to regulated banks making standard 30 year fixed loans. It was never part of the sub prime fiasco.
The fact that Fannie went into the subprime market because stockholders wanted greater returns and executives wanted their bonuses has nothing to do with the CRA.

I understand you are in a difficult position trying to push the failure of the world economy onto a couple of Dems and a 30 year old bill but that doesn't excuse your intellectual dishonesty.

Anonymous said...

Ahh Ducky. You can keep your head in the sand if you want, but you remain ignorant of the facts. Is it because you don't want to know the truth?

Do you even try to apprise yourself of the facts?

Here's a link just for you, if you dare. Watch, listen, and learn:

Morgan's absolutely right. This was a political cabal flexing it's muscles for political and monetary gain, on the backs of the poor and minorities, and ultimately, at the expense of all of us.

This is not to say there were not those who profited, there were. But, politicians and activists made it possible, and participated.

When the overseers of corruption are corrupt, chaos will reign.


Z said...

Ducky...again....completely ignore ALL the facts in the piece and hang your hat on one thing that I'm pretty sure you're wrong about..Morgan will be back and you can learn.

I swear sometimes I believe you ARE with the media because they do the same thing; completely ignore facts and skewer Republicans= that's all that matters to you.

This isn't good for the country; it's like a third world country when people do things like you did here.

Morgan..GREAT piece..FINALLY someone tells the truth and the videos support it. I'm glad you thought mine fit as I don't like to add to somebody else's piece...just couldn't resist.

Chuck's right.....look at Ducky's post; a graphic illustration.

Z said...

thanks, Pris...I'd commented just as you were and hadn't seen yours. I'll look at that link.

Ducky won't.

Anonymous said...

Now THAT, ducky, is an even BIGGER LIE. The CRA enabled ARMs and subprimes to become securitized and sold off as part of a loan package that included good loans (spreading out the risks, so to speak). The CRA was also the reason why federal banking standards were reduced to asking zero questions about the borrowers ability to repay the mortgage. When banks objected, lawyers like Barack Obama SUED them into compliance and threatened to prevent noncompliant from expanding.

Ducky's here said...

Pris, the mortgage meltdown may seem complicated, but it started simple, with Al Greenspan pegging the Fed fund rate at 1%.
This made Treasury Bonds a fairly lame investment, and led to investors looking for other seemingly safe securities to buy, which led to a flourishing demand for mortgage-backed securities, which led to banks increasingly lowering their standards for mortgage applications, eventually giving liar loans away to anyone willing to take them, which used to be called usury.
This led to a decline in the real value of these MBA securities due to high probabilities of foreclosure, but somehow they were still AAA-rated by credit agencies displaying either hopeless incompetence or criminal collusion.
Even a monkey wouldn't need a slide rule to see what would come next.

Ducky's here said...

z, I have asked misfit to produce some figures and he failed, maybe you can do better.

What was the mortgage default rate of 30 year fixed loans (i.e. CRA) made to minorities. Was it lower, higher, equal to the default rate of other loans.

Not that it matters since the default rate was not the primary cause of the hemorrhage but rather the inevitable drop in housing prices which is expected by the reality based community in a bubble environment.

Ducky's here said...

Farmer, you're not even wrong.

Sub prime loans were not extensively issued by regulated banks. Period end of story.
When they were issued they were issued with considerable enthusiasm. You think during that orgy that banks had to be forced to get in on the profits from the junk paper.

Ask Robert Rubin. Citi finally got sick of his act. These guys believed in a perpetual motion machine. There was a complete ABSENCE of government during this fiasco.

Z said...

The blogger MISFIT isn't here on this thread, Ducky.
Morgan works..hard. He'll be back.
FJ will be back, too.

Let's skip that one point....

Do those videos matter to you? Daniel Mudd looking like a deer in the headlights? WHO made him do this? AND WHY? He looks scared to death, probably knowing full and well how dangerous his moves were going to be. Maybe more scared of what would have happened to him had he not done this?
Did you even dare watch the FOX report from Canada?

Does truth EVER raise its ugly head enough to suit you?

Ducky's here said...

Farmer, here is a portion of the Wikipedia entry on the community reinvestment act. Now, notice that the efforts of Clinton (primary unnamed culprit) were to weaken the act and eliminate government regulation.

The act as it applies to lending to minorities had nothing to do with the melt down.

Legislative changes 1999

In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act, also known as the "Financial Services Modernization Act," which repealed the part of the Glass-Steagall Act, which prohibited a bank from offering a full range of investment, commercial banking, and insurance services. The bill was killed in 1998 because Senator Phil Gramm wanted the bill to expand the number of banks which no longer would be covered by the CRA. He also demanded full disclosure of any financial deals which community groups had with banks, accusing such groups of "extortion." In 1999 Senators Christopher Dodd and Charles E. Schumer broke another deadlock by forcing a compromise between Gramm and the Clinton administration which wanted to prevent banks from expanding into insurance or securities unless they were compliant with the CRA. In the final compromise, the CRA would cover bank expansions into new lines of business, community groups would have to disclose certain kinds of financial deals with banks, and smaller banks would be reviewed less frequently for CRA compliance.[31][32][33] On signing the Gramm-Leach-Bliley Act, President Clinton said that it, "establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act".[34]

[edit] Regulatory changes 2005

In 2002 there was an inter-agency review of the effectiveness of the 1995 regulatory changes to the Community Reinvestment Act and new proposals were considered.[16] In 2003, researchers at the Federal Reserve Bank of New York noted that dramatic changes in the financial services landscape had weakened the CRA, and that in 2003 less than 30 percent of all home purchase loans were subject to intensive review under the CRA.[35]

In early 2005, the Office of Thrift Supervision (OTS) implemented new rules that – among other changes –[b] allowed thrifts with over $1 billion in assets to meet their CRA obligations without regard to services for, or investments in, their communities.[/b] In April 2005, a contingent of Democratic Congressmen issued a letter protesting these changes, saying they undercut the ability of the CRA to "meet the needs of low and moderate-income persons and communities".[36] The changes were also opposed by community groups concerned that it would weaken the CRA.[37]

The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Controller of the Currency put a new set of regulations into effect in September 2005.[38] The regulations included less restrictive new definitions of "small" and "intermediate small" banks.[10] "Intermediate small banks" were defined as banks with assets of less than $1 billion, which allows these banks to opt for examination as either a small bank or a large bank.[38] Currently banks with assets greater than $1.061 billion have their CRA performance evaluated according to lending, investment and service tests. The agencies use the Consumer Price Index to adjust the asset size thresholds for small and large institutions annually.[16]

christian soldier said...

"...give me LIBERTY or give me DEATH."...
One of my favorite Revolution speeches..another...
Muhlenberg's (pastor) ..."Now is the time to fight..." He (Muhlenberg) became an officer at the request of G.Washington....

Misfit410 said...

Ducky, I've shown you so much evidence only a Monkey with downs syndrome could walk away with any opinion other than our own.. well, then there is you.....

there is all you need to see, spelled out so plainly even you can understand it..

and again excerpts from the senate meetings where your boys denied, denied, denied... Bush tried to intervene but your dolts kept any change from taking place..

Asking to present does not good when you won't look, listen nor learn, I thought you libtards were supposed to be all open minded.

Anonymous said...

Mr. ducky... the problem with your fairy tale is that the timeline doesn't fit for all those events you cite. Try starting it around 1995, when the '93 Clinton mods to the CRA went into effect, and you will see a direct correlation with the start of the Housing Bubble. If the Housing Bubble chart doesn't fit, you must acquit the '99 Graham-Leach-Bliley Act.

Anonymous said...

ps- the CRA is only one piece in the puzzle, but perhaps the most revealing in that the "motives" of the government-over-regulators-w/thumbs-on-the-scale of the so-called free-market stand fully revealed.

dmarks said...

Ducky: The whole thing with the CRA lending to minorities is rather racist. That is one thing that is being overlooked too. It was an effort to lend to people based on skin color, and violated the spirit of the Fair Housing Act.

There are so many reasons why it is a bad idea for the government to punish and reward people based on their skin color.

Z said...

The thing is the minorities are now out on their bottoms with really bad credit due to this whole ridiculous scheme. Just for VOTES. That's showing them people care, huh?
I wish voters had awakened before the obama election. Seeing who was really on their side might have opened their eyes.

Ducky: I wonder if you'd ever give any credit to Bush or McCain for having tried to blow the whistle on the troubles THEY foresaw through this nightmare of sucking up to the Black National Caucus? Did you watch that video?

it's like the liberal idea of school's been a disaster and they're still doing it. Black kids still sit with Black kids at lunch, White with White.....Asian with Asian. Heck, even at my huge Bible study (250 women lawyers, doctors, homemakers, writers, etc.), the Black women and Asians will be seen in little groups...they love everyone but gravitate 'home'..what did the left think could be solved by this in schools? And, if it ain't working, FIX IT, right? NO, we've had it here in LA now for about thirty years and it's still going strong...sending ghetto kids to the really posh I used to say when it first started "Sure, show them our high school's BMW's in the parking lot, the expensive clothes, the great vacations THESE kids have and then shove them back on the bus for a 2 hour drive thru miserable traffic to their mean little homes...GREAT IDEA???"!

We have to start listening to MLK Jr and judge people on their character..not their color.

And now we've got an even more agenda-driven president coming in who thinks our Supreme Court Justices should have more ethos and deliver HIS brand of 'justice', did you see that quote?
And the Left screeched at Republicans for 'litmus tests' in their appointments? HILARIOUS!

Anonymous said...

Hey everyone! I'm back for a few minutes until tonight. Thank you all so much for the wonderfully kind words! I wrote this in response to the BIG LIE that I see making the rounds of the blogosphere, "this is the fault of Bush and the Republican's and runaway, unregulated, capitalism, ya dada..." You know the rest of the lie. The truth is the opposite.

My description of the problem DID indeed lack something, another video! Watch this one carefully (8 minutes) from start to finish, it completely incriminates Andrew Cuomo, and by extension Monica's boyfriend's administration.

I read ducky's "artful" criticisms, and don't have the time to dissect them right now, BUT he's clever in that he mixes obvious truths in with piles of steaming bovine squeeze! Well done Duckster!

The video I've provided is an illustration of a left-wing cleptocrat in action and a PERFECT illustration of two things:

1. Why the left puishes hard to silence political dissent.
2. Why it's SO hard to be a leftist in the era of recording devices! :-)

Thanks again and I'll be back later!


dmarks said...

Z: I think kids should be bussed to the closest school. Period. It is waste of school money to ship the kids far away for reasons that have nothing to do with anything other than the kid's skin color.

Of course, this also means that if the rich kids school is closest to the poor kids house, send the kids to the rich kids school.

JMK said...

So many things helped create the current credit crisis - the turbo-charging of the CRA back in 1995, the inability or unwillingness of Congress to rein in Fannie and Freddie, the redefining of Collateralized Mortgage Obligations (CMOs) FROM a few specific home's mortgages bundled into a given CMO TO fractions of hundreds of various mortgages bundled into a single CMO.

Financial experts couldn't figure out the value of these things as home prices fell!

But one thing is often overlooked by Conservatives and that is Conservatism's or at least Republican's role in this mess.

It started with the well-meaning Jack Kemp's "Ownership Society," predicated on the idea that since homeowners tend to be more responsible, more goal-oriented and thus more Conservative people, by increasing home ownership, more Conservatives could be made via "the magic of home ownership."

G W Bush (a Keynesian at heart, like his Dad, who called Reagan's Supply Side policies "Voodoo Economics") bought into this, as did many Moderate/"Liberal" Republicans.

What ISN'T true is that all or even ANY of those good things are due to some "magic of ownership."

The fact is that far MORE savvy, self-disciplined and goal-oriented people tend to own property, while few reckless and irresponsible people are generally either inclined or able to bear that burden.

What Jack Kemp didn’t seem to realize is that, Ownership DIDN'T make owners better people, BETTER PEOPLE gravitate to property ownership!

Kemp took the lesson that became the foundation of "the ownership society" and got it exactly backward.

The misguided Kemp vision of "creating millions more responsible, Conservative-oriented citizens via the magic of homeownership" led to many, MANY Conservatives supporting the creating of credit out of thin air (credit socialism) to, in effect, GIVE more reckless and irresponsible people a piece of that "ownership society," but you CAN'T give away what must be earned!

Reckless and irresponsible people, given the keys to homeownership on the cheap (via low, LOW "teaser rates") remain as reckless and irresponsible as "investors" who were given their positions and never told anything but how great they were.

Reckless and irresponsible people tend to stay reckless and irresponsible due to BOTH inertia (the gravity that tends to keep resting bodies at rest) and entropy (the law of breakdown and decay).

Jack Kemp's vision didn't factor in those two immutable forces...and that misguided vision has helped lead the way to what is one of the worst excesses of government and potentially one of the worst global fiscal calamities in over three-quarters of a century.

Kemp’s misguided philosophy is the foundation of what the Bush administration called “Compassionate Conservatism.” Back in January of 2004, in a bid to boost minority homeownership, President Bush, in Kemp-like tradition, asked Congress for authority to eliminate the down-payment requirement for Federal Housing Administration (FHA) loans.

At the time, while announcing the plan at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal "the most significant FHA initiative in more than a decade." The administration claimed that it could lead to 150,000 first-time owners annually, he said.

Nothing-down options had long been available in the private mortgage market, but, in general, they required the borrower to have pristine credit. Bush's proposed change was designed to extend the nothing-down option to borrowers with blemished credit – “subprime” borrowers.

That was classic Kempian “Compassionate Conservatism."

Sadly, that became part of a legacy of GSE’s (Government Sponsored Enterprises) like Fannie Mae and Freddie Mac, run amok.

In 2003 and again in 2005 G W Bush and John McCain sought to push through reforms that included an oversight organization for both Fannie and Freddie. There were never more than 6 votes in favor of those reforms among the 18 member U.S. Senate Committee on Banking, Housing and Urban Affairs and no more than 17 votes among the 39 member House Financial Services Committee.

While Rep. Barney Frank was Fannie Mae’s and Freddie Mac’s point-man in the House and Sen. Chris Dodd was their point-man in the Senate, Fannie’s and Freddie’s lobbying efforts and money were well spread around.

With Frank and Dodd and all that GSE money and influence (threatening to go to Congressional supporters of GSE regulation and oversight and telling voters they were against mortgages for working people) the GSE were able to avoid the regulation and oversight those agencies desperately needed.

That's the sad thing, many Liberal (Rockefeller) Republicans bought into this Kempian nonsense and too many Conservatives were intimidated by the GSE's political outreach.

Z said...

Funny, JMK...if all that's true about Kemp, and I have no reason to doubt you because econ isn't my forte(ay), he's a dope, but he's a positive, optimistic dope. He felt having a home would elevate people. The left uses dope (I"M KIDDING!)!! He felt people would BE BETTER if they owned.

The Left took another tack..."people who own homes don't have to be responsible or even make salaries enough to warrant loans...they'll never amount to anything, so let's give them the whole enchilada...we just know they'll get a house and vote for the Democrat who produced it at a steal...." They gave what someone so aptly said "loans based on the size of a person's welfare check". Maybe that's an exaggeration but the point's there.

Kemp, if I understand you correctly, said "if people have homes, they'll become solid citizens who can afford them" and, MAYBE I'll give the Frankens and Dodds of Congress the benefit of the doubt (HELP ME, GOD!) and say they, too, felt home ownership would improve people's lots in life, but..... did you watch the Daniel Mudd link I posted in this article? Listened to what he said?

So, JMK, what's your proposal to get us out of this mess?

If the government would get the HECK out of the way, it would all settle....people who can afford the homes would have them, those who couldn't would rent. Why did ANYBODY feel experiments like what happened would work?

Anonymous said...

I think JMK ascribes a bit too much credit to Jack Kemp for promoting the "original idea" of an "Ownership Society", as the one that emerged under the Clinton Administration was vastly different from the one envisioned during the Reagan/Bush '41 years. Unlike the Bushes, Kemp was a BIG supporter of Supply Side (aka Voodoo) Economics.

Kemp never pushed Ninja loans. I bought my house during the "Kemp" years, and believe me the idea of a 100% mortgage was NOWHERE to be found. And the FHA PMI premiums on those w/o a 20% equity stake was STEEP.

Kemp may have been a "Bleeding Heart" conservative, but when it came to economics, he wasn't a fool.

Papa Frank said...

Follow the money ducky!!!

Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008

1. Dodd, Christopher J

2. Kerry, John

3. Obama, Barack

4. Clinton, Hillary

5. Kanjorski, Paul E

6. Bennett, Robert F

7. Johnson, Tim

8. Conrad, Kent

9. Davis, Tom

10. Bond, Christopher S 'Kit'

11. Bachus, Spencer

12. Shelby, Richard C

13. Emanuel, Rahm

14. Reed, Jack

15. Carper, Tom

16. Frank, Barney

17. Maloney, Carolyn B

18. Bean, Melissa

19. Blunt, Roy

20. Pryce, Deborah

21. Miller, Gary

22. Pelosi, Nancy

23. Reynolds, Tom

24. Hoyer, Steny H

25. Hooley, Darlene

Anonymous said...

Here's a critique of Kemp's tenure at HUD from The Cato Institute.

Z said...

FJ, you know what? The Left doesn't understand when Republicans are critical of their own. I see that time and time again. CNN is a perfect example but it's too easy a shot. You just never see liberals discussing differing viewpoints.

Conservatives do.>CATO is honest about Kemp, as JMK was, and you have a good viewpoint about him, too. It's what informs us, fleshes out our opinions.

Frankly, that's why people are SO surprised Caroline Kennedy's actually not SO welcome as Senator by some Democrats. Trust me, though..she, will be.

Papa, thanks...the numbers speak for themselves.

And Ducky's gone. yoohoooo!?

Warren said...

He "ducks" out when he's lost but in his mind he always has the last word.

Always On Watch said...

Well, I missed the party. But I guffawed when I read this from Misfit:

Ducky, I've shown you so much evidence only a Monkey with downs syndrome could walk away with any opinion other than our own.. well, then there is you.....

As Warren pointed out, Duck disappears when the answers are tossed his way.

JMK said...

"...but he's a positive, optimistic dope. He felt having a home would elevate people." (Z)
Kemp's "ownership society" became one of the cornerstones of "Compassionate Conservatism." While there's no question that Kemp "meant well," so do most Leftists! The fact is that the "ownership society" was predicated on mistaking a symptom for the event. He saw that homeowners were generally more responsible, etc., and naively assumed that homeownership inculcated those traits, rather than considering that it was "better" (more responsible, etc.) people who tended to willingly take on the burdens of property ownership to begin with.

Those who bought into the "ownership society" completely seemed to eschew the old truism, "You can't get silk from a sow's ear." Sadly, magically "creating" millions of new "homeowners" via zero-down mortgages, teaser rates, etc., DIDN'T and DOESN'T create a larger number of responsible, better people, it merely gives more reckless and irresponsible people access to homeownership....which is ultimately courting disaster, as we've found out.

The inane idea that "The Democrats were solely, or even primarily responsible for blocking the regulation and oversight of Fannie Mae and Freddie Mac," OR even that "Democrats were the ones who pushed through the turbo-charged CRA (Community Reinvestment Act) in 1995" is utter nonsense and makes those who spout that sort of thing, appear to be hyper-partisan hacks, unworthy of being taken seriously.

The FACT is that the GOP controlled BOTH houses of Congress in 1995 (when the turbo-charged CRA was passed), 2003 (when G W Bush and McCain first sought to rein in the GSEs) and 2005 (when G W Bush and McCain AGAIN tried to rein in the GSEs). Sad to say, there were many Republicans complicit in those disasters. That may be an inconvenient fact, but it IS a fact.

What does that prove?

It proves, WITHOUT A DOUBT that some in the GOP were largely complicit, NOT merely suppine, but complicit in the things that brought on the subprime mess that imploded into the global credit crisis.

I WISH it were otherwise, I really do, but then again, I wish it'd rain rootbeer too....and that ain't happening either.

UNTIL Conservatives recognize the fact that the controlling, or monied interests (the "Rockefeller Republicans") in the GOP are strict Keyensians and enemies of Conservatism, then Conservatism as a political movement is effectively doomed.

There have been only TWO GREAT Supply Side Presidents over the past quarter century - Ronald Reagan...and...(gulp!)...Bill Clinton. That's right, Bill Clinton, who cooperated as well with the Supply Side Gingrich Congress as G W Bush has with the Keynesian Pelosi-Reid Congress.

NAFTA, welfare reform, a HUGE Cap Gains cut were all instituted on Clinton's watch. He was a Supply Sider (re-appointing Greenspan) and a free trader.

BOTH Bush's are Keynesians from the Rockefeller-wing of that Party. George Bush Sr (Bush-41) had called Reagan's Supply Side policies, "Voodoo Economics," and yet the monied and controlling interests of that Party forced Bush Sr on Reagan as VP. Reagan wanted either Gerry Ford or Paul Laxalt.

G W Bush has spent like a Liberal Democrat and that's ASIDE from war and domestic security spending. He's spent more money on reckless social spending (even adjusted for inflation) than LBJ did!

As to what I would do/suggest...not that it matters, but cutting America's Corporate tax would be a good start and a far more effective stimulus than a mere "tax rebate check" that the incoming administration has apparently signed on to. Then there are other MORE painful options....LOWERING the payroll tax (FICA taxes) for all (this would most help low-income workers), BUT to do that we'd have to revamp social security, perhaps cutting benefits (even if only by "freezing" them for a few years) and drastically hiking the retirment age - when ss started, the average American male lived about 66 years, by that parameter, today's collection age for full benefits would have to be raised to around 78.

As to the idea advanced by some (Ducky) that "The re-vamped or turbo-charged CRA of 1995 did NOT mandate subprime loans," that's demonstrably untrue and it's proven untrue by the fact that Barack Obama, as a young lawyer helped sue Citibank on behalf of ACORN member Calvin Roberson over "not making enough subprime mortgages available to minorities" in Chicago.

That suit was successful, so it wouldn't have been heard and it COULDN'T have been won, UNLESS there were laws that mandated that those kinds of loans be made available - that law was the turbo-charged CRA.

Anonymous said...

There may have been some complicit Republicans, but the fact of the matter is that...

"Democrats were the ones who pushed through the turbo-charged CRA (Community Reinvestment Act) in 1995"

A Democratic majority Congress passed the legislation in '94 and it didn't go into effect UNTIL July of '95.

These changes put the banks at the mercy of Community activists who "rated" the banks on the basis of "service delivery" and made it easier for groups like ACORN to control bank activities by 'rating' their compliance or non-compliance.