The American Spectator

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Should've Listened

9.18.08 @ 12:01AM

(Page 2 of 5)

The common thread running through all booms and busts like what we have experienced recently with housing is the Fed. The Fed giveth with low interest rates. Then, when prices rise, the Fed taketh away by raising interest rates. Blessed be the name of the Fed for giving us this current financial crisis.
-- Roger D. McKinney
Broken Arrow, Oklahoma

I would have to agree with Philip Klein's assessment of Buffett's warning concerning derivatives. The only additional point I would like to interject is the role the Federal Government played in all of this. The mortgage giants Freddie Mac and Fannie Mae are quasi public/private mortgage institutions. They carry over $5 trillion of mortgages, and are just as susceptible to political pressures as they are market pressures. If there ever is a reason to balk at future calls for public-private "partnerships," these 2 institutions should be evidence enough. Two weeks ago as Freddie and Fannie were going into receivership, Barney Frank (D-Mass.) defended Freddie and Fannie, and balked at any mention of selling off their assets and dissolving them completely.

The other organization (or actually person) that comes up for scrutiny is the former Fed Chairman Alan Greenspan. By cutting short-term interest rates to 2% in the wake of 9/11 and keeping them low for so long, he created the conditions for the housing bubble. Banks and financial institutions borrowed at 2% and charged anywhere from 6% (mortgages) to 30% (credit cards). Firms like AIG, Bear Stearns, and Morgan Stanley used the mortgage backed securities bundles to spread the risk (from high risk borrowers underwritten by Fannie Mae/Freddie Mac), while pulling down high margins. The inflated real estate valuations were a direct result of low short-term interest rates set in place by Greenspan. He set in place the expansion of money and credit totally tied to real estate. Consumers who saw their home equities double in a space of a few years borrowed against the inflated assets (usually through equity loans) and went on a spending spree. With real estate values now plunging many of these consumers are walking away from both their original mortgages and home equity lines of credit leaving firms like Bear Stearns and AIG footing the bill.

Yes, Buffett was correct -- but only half correct. I wonder if the old wizard today still believes in that old liberal canard of public/private partnership?
-- JP
Indiana

Liberal Democrat vulture capitalists like Warren Buffett, George Soros and Democrat hedge fund managers are part of the problem. These men make their money by destroying economies and people's lives then they have the effrontery to tell us we need to have our taxes raised while they protect their wealth from the tax man by donating to one another's liberal non-profits. Who cares what a supporter of Obama thinks when like his political allies his one motive is helping himself and to hell with the country? Buffett's advice will wreck the economy and make the Great Depression look tame, but that's exactly what Warren Buffett wants, because it makes him and other liberal carrion richer. Despite the current financial troubles, thanks to supply economics, low taxes and a pro-business administration, America will weather the current correction and come out ok. Had Buffett's buffoons been in charge he'd be getting richer while the rest of us would be in the poor house.

Simply Freddie Mac and Fannie Mae are in trouble, because they've been run since the 1990's by corrupt Democrats more interested in getting undisclosed bonuses and personal perks than fulfilling their fiduciary responsibilities. President Bush suggested reforms, but the Democrat darlings of Buffett and Wall Street blocked him, because it benefited them and their financial patrons.

As for the housing market and the rest of the economy it only took a nose dive when Buffett's inept Democrats took control of Congress and did absolutely nothing except push for higher taxes, terrorist appeasement, costlier energy and expansion of the government. When banks are compelled to loan money to high risk individuals as part of a social egalitarian experiment the end result is obvious and you don't have to be a vulture capitalist to predict the future. While working Americans struggle Warren Buffett will keep raking in the cash and then sheltering it from taxes by funneling it to liberal non-profits on a mission to socialize America.

I have a suggestion for Warren Buffett, George Soros and the wealthy liberal elite: give all your money to real charities that help people and quit profiting from the pain of others if you're so damn altruistic. Maybe President Bush should take a page from the Warren Buffett playbook and seek legislation to strip the vulture capitalists who caused this problem of all their profits and wealth -- I mean if Warren Buffett thinks it's good enough to destroy the family farm and small businesses with the death tax maybe its time we stuck it to him like he wants to stick it to us.
--Michael Tomlinson

SOCIAL MASOCHISM
Re: Lisa Fabrizio's Those Who Forget the Past:

Ms. Fabrizio writes of her experience at a party in Connecticut that she attended with her fiance. She recounts the bitterness, hatred, and bile that was directed at her and her finance' during the party. She then writes; "Once again we witnessed the phenomenon where otherwise perfectly nice people were transformed into fire-breathing attack dogs at the mere mention of the GOP."

It constantly amazes me that otherwise sane conservatives and Republicans continue to submit to this kind of insulting behavior, and harassment. No, Ms. Fabrizio, these are not nice people. These people are not friends. Friends do not act that way towards their friends.

I will never understand why people that belong to the Republican portion of the activist class, and the public part of society seem so willing to submit to this treatment. Surely there are Republicans and independents in Connecticut who also give parties. I hear the same stories from Laura Ingraham on her radio show, and she keeps telling her audience that these harridans are "nice people." I have come to believe that you folks that time and again present yourselves to be treated thusly must be true masochists. What else would you call someone that continually submits to the attacks of their vicious, sadistic, mentally unbalanced members of their social circle. I would find a new social circle within which to spend my time, one where the people are more congenial, and more circumspect But then I am not a masochist, even if I do live in the Peoples' Republic of New England..
-- Ken Shreve

I would add only one other example of liberal media malfeasance. I refer to Mr. Obama's slip of the tongue when he said that he had visited "50 of the 57 states."

Mr. Obama is a devout Christian, but you know, I read that in the Islamic world there are 57 states. Oops! Could this be a slip of that theology he never espoused but, according to one of his biographies, would follow if things got bad?
-- Jay Molyneaux
Denver, North Carolina

KEEP AN EYE ON HIM
Re: Peter Ferrara's Obama Can't Be Trusted On National Defense:

Letter to the Editor

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